10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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, 2012

Commission file number 1-04851

THE SHERWIN-WILLIAMS COMPANY

(Exact name of registrant as specified in its charter)

OHIO	34-0526850
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
101 West Prospect Avenue, Cleveland, Ohio	44115-1075
(Address of principal executive offices)	(Zip Code)

(216) 566-2000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
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 if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  x        No  o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.        Yes  o        No  x

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   o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).        Yes  x        No  o

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.         o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer    x	Accelerated filer    o	Non-accelerated filer    o	Smaller reporting company    o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         Yes  o        No  x

At January 31, 2013, 103,402,093 shares of common stock were outstanding, net of treasury shares. The aggregate market value of common stock held by non-affiliates of the Registrant at June 29, 2012 was $13,474,108,672 (computed by reference to the price at which the common stock was last sold on such date).

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our Annual Report to Shareholders for the fiscal year ended December 31, 2012 (“2012 Annual Report”) are incorporated by reference into Parts I, II and IV of this report.

Portions of our Proxy Statement for the 2013 Annual Meeting of Shareholders (“Proxy Statement”) to be filed with the Securities and Exchange Commission within 120 days of our fiscal year ended December 31, 2012 are incorporated by reference into Part III of this report.

THE SHERWIN-WILLIAMS COMPANY

Table of Contents

		Page
PART I
Item 1.	Business	1
	Cautionary Statement Regarding Forward-Looking Information	4
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	12
Item 2.	Properties	12
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
	Executive Officers of the Registrant	14
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 8.	Financial Statements and Supplementary Data	17
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	17
Item 9A.	Controls and Procedures	17
Item 9B.	Other Information	17
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	17
Item 11.	Executive Compensation	18
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	18
Item 13.	Certain Relationships and Related Transactions, and Director Independence	18
Item 14.	Principal Accountant Fees and Services	18
PART IV
Item 15.	Exhibits and Financial Statement Schedules	19
	Signatures	20
	Exhibit Index	21

PART I

ITEM 1.    BUSINESS

Introduction

The Sherwin-Williams Company, founded in 1866 and incorporated in Ohio in 1884, is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region, Europe and Asia. Our principal executive offices are located at 101 West Prospect Avenue, Cleveland, Ohio 44115-1075, telephone (216) 566-2000. As used in this report, the terms “Sherwin-Williams,” “Company,” “we” and “our” mean The Sherwin-Williams Company and its consolidated subsidiaries unless the context indicates otherwise.

Available Information

We make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission. You may access these documents on the “Investor Relations” page of our website at www.sherwin.com.

We also make available free of charge on our website our Corporate Governance Guidelines, our Director Independence Standards, our Code of Conduct and the charters of our Audit Committee, our Compensation and Management Development Committee and our Nominating and Corporate Governance Committee. You may access these documents in the “Corporate Governance” section on the “Investor Relations” page of our website at www.sherwin.com.

Basis of Reportable Segments

We report our segment information in the same way that management internally organizes our business for assessing performance and making decisions regarding allocation of resources in accordance with the Segment Reporting Topic of the Financial Accounting Standards Board Accounting Standards Codification (ASC). We have four reportable operating segments: Paint Stores Group, Consumer Group, Global Finishes Group and Latin America Coatings Group (individually, a "Reportable Segment" and collectively, the “Reportable Segments”). Factors considered in determining our Reportable Segments include the nature of business activities, the management structure directly accountable to the Company’s chief operating decision maker (CODM) for operating and administrative activities, availability of discrete financial information and information presented to our Board of Directors. We report all other business activities and immaterial operating segments that are not reportable in the Administrative segment. For more information about the Reportable Segments, see pages 6 through 15 of our 2012 Annual Report, which is incorporated herein by reference.

The Company’s CODM has been identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Because of the diverse operations of the Company, the CODM regularly receives discrete financial information about each Reportable Segment as well as a significant amount of additional financial information about certain divisions, business units or subsidiaries of the Company. The CODM uses all such financial information for performance assessment and resource allocation decisions. The CODM evaluates the performance of and allocates resources to the Reportable Segments based on profit or loss before income taxes and cash generated from operations. The accounting policies of the Reportable Segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements on pages 48 through 51 of our 2012 Annual Report, which is incorporated herein by reference.

Paint Stores Group

The Paint Stores Group consisted of 3,520 company-operated specialty paint stores in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten, Jamaica, Curacao and Aruba at December 31, 2012. Each store in this segment is engaged in the related business activity of selling paint, coatings and related products to end-use customers. The Paint Stores Group markets and sells Sherwin-Williams^® branded architectural paint and coatings, protective and marine products, original equipment manufacturer (“OEM”) product finishes and related items. These products are produced by manufacturing facilities in the Consumer Group. In addition, each store sells selected purchased associated products. The loss of any single customer would not have a material adverse effect on the business of this segment. During 2012, this segment opened 70 net new stores, consisting of 81 new stores opened (63 in the United States, 14 in Canada, 1 in Puerto Rico and 3 in Trinidad) and 11 stores closed in the United States. During 2011 and 2010, this segment opened 60 and 36 net new stores, respectively. A map on the cover flap of our 2012 Annual Report, which is incorporated herein by reference, shows the number of paint stores and their geographic locations. The CODM uses discrete financial information about the Paint Stores Group, supplemented with information by geographic region, product type and customer type, to assess performance of and allocate resources to the Paint Stores Group as a whole. In accordance with ASC 280-10-50-9, the Paint Stores Group as a whole is

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considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

Consumer Group

The Consumer Group develops, manufactures and distributes a variety of paint, coatings and related products to third party customers primarily in the United States and Canada and the Paint Stores Group. Approximately 64 percent of the total sales of the Consumer Group in 2012 were intersegment transfers of products primarily sold through the Paint Stores Group. Sales and marketing of certain controlled brand and private labeled products is performed by a direct sales staff. The products distributed through third party customers are intended for resale to the ultimate end-user of the product. The Consumer Group had sales to certain customers that, individually, may be a significant portion of the sales of the segment. However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment. This segment incurred most of the Company’s capital expenditures related to ongoing environmental compliance measures. The CODM uses discrete financial information about the Consumer Group, supplemented with information by product types and customer, to assess performance of and allocate resources to the Consumer Group as a whole. In accordance with ASC 280-10-50-9, the Consumer Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

Global Finishes Group

The Global Finishes Group develops, licenses, manufactures, distributes and sells a variety of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products in North and South America, Europe and Asia. This segment meets the demands of its customers for a consistent worldwide product development, manufacturing and distribution presence and approach to doing business. This segment licenses certain technology and trade names worldwide. Sherwin-Williams^® and other controlled brand products are distributed through the Paint Stores Group and this segment’s 302 company-operated branches and by a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third party distributors. During 2012, this segment opened 1 new branch in the United States and closed 2 in the United States for a net decrease of 1 branch. At December 31, 2012, the Global Finishes Group consisted of operations in the United States, subsidiaries in 34 foreign countries and income from licensing agreements in 16 foreign countries. The CODM uses discrete financial information about the Global Finishes Group, supplemented with information about geographic divisions, business units, and subsidiaries, to assess performance of and allocate resources to the Global Finishes Group as a whole. In accordance with ASC 280-10-50-9, the Global Finishes Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover flap of our 2012 Annual Report, which is incorporated herein by reference, shows the number of branches and their geographic locations.

Latin America Coatings Group

The Latin America Coatings Group develops, licenses, manufactures, distributes and sells a variety of architectural paint and coatings, protective and marine products, OEM product finishes and related products in North and South America. This segment meets the demands of its customers for consistent regional product development, manufacturing and distribution presence and approach to doing business. Sherwin-Williams^® and other controlled brand products are distributed through this segment’s 276 company-operated stores and by a direct sales staff and outside sales representatives to retailers, dealers, licensees and other third party distributors. During 2012, this segment opened 17 new stores (9 in South America and 8 in Mexico) and closed 6 in South America for a net increase of 11 stores. At December 31, 2012, the Latin America Coatings Group consisted of operations from subsidiaries in 9 foreign countries, 4 foreign joint ventures and income from licensing agreements in 10 foreign countries. The CODM uses discrete financial information about the Latin America Coatings Group, supplemented with information about geographic divisions, business units, and subsidiaries, to assess performance of and allocate resources to the Latin America Coatings Group as a whole. In accordance with ASC 280-10-50-9, the Latin America Coatings Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover flap of our 2012 Annual Report, which is incorporated herein by reference, shows the number of stores and their geographic locations.

Administrative Segment

The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site. Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses which were not directly associated with the Reportable Segments. The Administrative segment did not include any significant foreign operations. Also included in the Administrative segment was a real estate management unit that is responsible for the ownership, management, and leasing of non-retail properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities. Sales of this segment represented external leasing revenue of excess headquarters space or leasing of facilities no longer used

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by the Company in its primary businesses. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment.

Segment Financial Information

For financial information regarding our Reportable Segments, including net external sales, segment profit, identifiable assets and other information by Reportable Segment, see Note 18 of the Notes to Consolidated Financial Statements on pages 74 through 76 of our 2012 Annual Report, which is incorporated herein by reference.

Domestic and Foreign Operations

Financial and other information regarding domestic and foreign operations is set forth in Note 18 of the Notes to Consolidated Financial Statements on page 75 of our 2012 Annual Report, which is incorporated herein by reference.

Additional information regarding risks attendant to foreign operations is set forth on page 34 of our 2012 Annual Report under the caption “Market Risk” of “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” which is incorporated herein by reference.

Business Developments

For additional information regarding our business and business developments, see pages 6 through 15 of our 2012 Annual Report and the “Letter to Shareholders” on pages 2 through 5 of our 2012 Annual Report, which is incorporated herein by reference.

Raw Materials and Products Purchased for Resale

We believe we generally have adequate sources of raw materials and fuel supplies used in our business. However, consolidation of raw material suppliers and a reduction in raw material manufacturing capacity during the recent recession, along with an increase in global demand for certain raw materials, resulted in increased prices of certain raw materials in 2012. A continued increase in global demand for certain raw materials and coatings as the global economy recovers may result in increased prices of certain raw materials for the Reportable Segments during 2013. There are sufficient suppliers of each product purchased for resale that none of the Reportable Segments anticipate any significant sourcing problems during 2013. See Item 1A Risk Factors for more information regarding cost and sourcing of raw materials.

Seasonality

The majority of the sales for the Reportable Segments traditionally occur during the second and third quarters. There is no significant seasonality in sales for the Administrative segment.

Working Capital

In order to meet increased demand during the second and third quarters, the Company usually builds its inventories during the first quarter. Working capital items (inventories and accounts receivable) are generally financed through short-term borrowings, which include the use of lines of credit and the issuance of commercial paper. For a description of the Company’s liquidity and capital resources, see pages 24 through 34 of our 2012 Annual Report under the caption “Financial Condition, Liquidity and Cash Flow” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is incorporated herein by reference.

Trademarks and Trade Names

Customer recognition of our trademarks and trade names collectively contribute significantly to our sales. The major trademarks and trade names used by each of the Reportable Segments are set forth below.

• Paint Stores Group:    Sherwin-Williams^®, ProMar^®, SuperPaint^®, A-100^®, PrepRite^®, Duration Home^®, ProGreen^®, Harmony^®, Woodscapes^®, Deckscapes^®, Cashmere^®, ProClassic^®, Duration^®, Duron^®, MAB^®, HGTV^® Home by Sherwin-Williamsand Emerald^TM.

• Consumer Group:    Thompson’s^® WaterSeal^®, Dutch Boy^®, Pratt & Lambert^®, Martin Senour^®, H&C^®, Rubberset^®, Dupli-Color^®, Minwax^®, White Lightning^®, Krylon^®, Purdy^®, Bestt Liebco^®, Accurate Dispersions^™, Ronseal^™, Tri-Flow^®, Kool Seal^®, Snow Roof^®, Altax^™, Sprayon^®, Uniflex^® and VHT^®.

• Global Finishes Group:    Sherwin-Williams^®, Martin Senour^®, Lazzuril^®, Excelo^®, Baco^®, Planet Color^®, Ultra-Cure^®, Kem Aqua^®, Sher-Wood^®, Powdura^®, Polane^®, Euronavy^®, Inchem^®, AWX^®, Ultra^™, Sayerlack^®, Becker Acroma^®, Firetex^®, Macropoxy^® and Acrolon^®.

• Latin America Coatings Group:    Sherwin-Williams^®, Martin Senour^®, Krylon^®, Kem Tone^®, Pratt & Lambert^®, Minwax^®, Colorgin^™, Sumare^™, Andina^™, Marson^™, Metalatex^®, Novacor^®, Loxon^®, Napko^™ and Condor^™.

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Patents

Although patents and licenses are not of material importance to our business as a whole or any segment, the Global Finishes Group and Latin America Coatings Group derive a portion of their income from the licensing of technology, trademarks and trade names to foreign companies.

Backlog and Productive Capacity

Backlog orders are not significant in the business of any Reportable Segment since there is normally a short period of time between the placing of an order and shipment. We believe that sufficient productive capacity currently exists to fulfill our needs for paint, coatings and related products through 2013.

Research and Development

For information regarding our costs of research and development included in technical expenditures, see Note 1 of the Notes to Consolidated Financial Statements on page 51 of our 2012 Annual Report, which is incorporated herein by reference.

Competition

We experience competition from many local, regional, national and international competitors of various sizes in the manufacture, distribution and sale of our paint, coatings and related products. We are a leading manufacturer and retailer of paint, coatings and related products to professional, industrial, commercial and retail customers, however, our competitive position varies for our different products and markets.

In the Paint Stores Group, competitors include other paint and wallpaper stores, mass merchandisers, home centers, independent hardware stores, hardware chains and manufacturer-operated direct outlets. Product quality, product innovation, breadth of product line, technical expertise, service and price determine the competitive advantage for this segment.

In the Consumer Group, domestic and foreign competitors include manufacturers and distributors of branded and private labeled paint and 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.

The Global Finishes Group has numerous competitors in its domestic and foreign markets with broad product offerings and several others with niche products. Key competitive factors for this segment include technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price.

In the Latin America Coatings Group, competitors include other paint and wallpaper stores, mass merchandisers, home centers, independent hardware stores, hardware chains and manufacturer-operated direct outlets. Product quality, product innovation, breadth of product line, technical expertise, service and price determine the competitive advantage for this segment.

The Administrative segment has many competitors consisting of other real estate owners, developers and managers in areas in which this segment owns property. The main competitive factors are the availability of property and price.

Employees

We employed 34,154 persons at December 31, 2012.

Environmental Compliance

For additional information regarding environmental-related matters, see pages 27 and 29 of our 2012 Annual Report under the caption “Environmental-Related Liabilities” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 1, 8 and 13 of the Notes to Consolidated Financial Statements on pages 50, 63 and 71, respectively, of our 2012 Annual Report, which is incorporated herein by reference.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in “Management's Discussion and Analysis of Financial Condition and Results of Operations,” “Business” 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 current expectations, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future business plans and the costs and potential liability for environmental-related matters and the lead pigment and lead-based paint litigation. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “expects,” “anticipates,” “believes,” “will,” “will likely result,” “will continue,” “plans to” and similar expressions.

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 our control, that could cause actual

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results to differ materially from such statements and from our historical results and experience. These risks, uncertainties and other factors include such things as:

• the duration and severity of the current negative global economic and financial conditions;

• general business conditions, strengths of retail and manufacturing economies and the growth in the coatings industry;

• competitive factors, including pricing pressures and product innovation and quality;

• changes in raw material and energy supplies and pricing;

• changes in our relationships with customers and suppliers;

• our ability to attain cost savings from productivity initiatives;

• our ability to successfully integrate past and future acquisitions into our existing operations, including the planned acquisition of Consorcio Comex, S.A. de C.V. and the recent acquisitions of Leighs Paints, Geocel Holdings Corporation and Jiangsu Pulanna Coating Co., Ltd., as well as the performance of the businesses acquired;

• legal, regulatory and other matters that may affect the timing of or our ability to complete the planned acquisition of Comex;

• risks and uncertainties associated with our ownership of Life Shield Engineered Systems, LLC;

• changes in general domestic economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations;

• risks and uncertainties associated with our expansion into and our operations in Asia, Europe, Mexico, South America and other foreign markets, including general economic conditions, inflation rates, recessions, foreign currency exchange rates, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest and other external economic and political factors;

• the achievement of growth in foreign markets, such as Asia, Europe, Mexico and South America;

• increasingly stringent domestic and foreign governmental regulations including those affecting health, safety and the environment;

• inherent uncertainties involved in assessing our potential liability for environmental-related activities;

• other changes in governmental policies, laws and regulations, including changes in accounting policies and standards and taxation requirements (such as new tax laws and new or revised tax law interpretations);

• the nature, cost, quantity and outcome of pending and future litigation and other claims, including the lead pigment and lead-based paint litigation, and the effect of any legislation and administrative regulations relating thereto; and

• unusual weather conditions.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered to be a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

ITEM 1A.    RISK FACTORS

Described below and elsewhere in this report and other documents that we file from time to time with the Securities and Exchange Commission are risks, uncertainties and other factors that can adversely affect our business, results of operations, cash flow, liquidity or financial condition.

Adverse changes in general business and economic conditions in the United States and worldwide may adversely affect our results of operations, cash flow, liquidity or financial condition.

Adverse changes in general business and economic conditions in the United States and worldwide may reduce the demand for some of our products and adversely affect our results of operations, cash flow, liquidity or financial condition. Higher inflation rates, interest rates, tax rates and unemployment rates, higher labor and healthcare costs, recessions, changing governmental policies, laws and regulations, and other economic factors could adversely affect our results of operations, cash flow, liquidity or financial condition.

The duration and severity of global economic and financial conditions may adversely affect our results of operations, cash flow, liquidity or financial condition.

A worsening of global economic and financial conditions may adversely impact our net sales, the collection of accounts receivable, funding for working capital needs, expected cash flow generation from current and acquired businesses, and our investments, which may adversely impact our results of operations, cash flow, liquidity or financial condition.

We finance a portion of our sales through trade credit. The current global economic and financial conditions have caused some customers to be less profitable and have increased our exposure to credit risk. In addition, due to the tightening of credit markets, some customers who require financing for their businesses have not been able to obtain necessary financing. Continuation of these conditions could limit our ability to collect our accounts receivable, which could adversely affect our results of operations, cash flow, liquidity or financial condition.

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We generally fund a portion of our seasonal working capital needs and obtain funding for other general corporate purposes through short-term borrowings backed by our revolving credit facility and other financing facilities. If any of the banks in these credit and financing facilities are unable to perform on their commitments, which could adversely affect our ability to fund seasonal working capital needs and obtain funding for other general corporate purposes, our cash flow, liquidity or financial condition could be adversely impacted.

Although we currently have available credit facilities to fund our current operating needs, we cannot be certain that we will be able to replace our existing credit facilities or refinance our existing or future debt when necessary. Our cost of borrowing and ability to access the capital markets are affected not only by market conditions, but also by our debt and credit ratings assigned by the major credit rating agencies. Downgrades in these ratings will increase our cost of borrowing and could have an adverse effect on our access to the capital markets, including our access to the commercial paper market. An inability to access the capital markets could have a material adverse effect on our results of operations, cash flow, liquidity or financial condition.

We have goodwill and intangible assets recorded on our balance sheet. We periodically evaluate the recoverability of the carrying value of our goodwill and intangible assets whenever events or changes in circumstances indicate that such value may not be recoverable. Impairment assessment involves judgment as to assumptions regarding future sales and cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact our assumptions and may result in changes in our estimates of future sales and cash flows that may result in us incurring substantial impairment charges, which would adversely affect our results of operations or financial condition.

We hold investments in equity and debt securities in some of our defined benefit pension plans. A decrease in the value of plan assets resulting from a general financial downturn may cause a negative pension plan investment performance, which may adversely affect our results of operations, cash flow, liquidity or financial condition.

Protracted duration of economic downturns in cyclical segments of the economy may continue to depress the demand for some of our products and adversely affect our sales, earnings, cash flow or financial condition.

Portions of our business involve the sale of paint, coatings and related products to segments of the economy that are cyclical in nature, particularly segments relating to construction, housing and manufacturing. Our sales to these segments are affected by the levels of discretionary consumer and business spending in these segments. During economic downturns in these segments, the levels of consumer and business discretionary spending may decrease, and the recovery of these segments may lag behind the recovery of the overall economy. This decrease in spending will likely reduce the demand for some of our products and may adversely affect our sales, earnings, cash flow or financial condition.

During the recent recession, the U.S. homebuilding industry experienced a significant and sustained decrease in demand for new homes and an oversupply of new and existing homes available for sale. During this same time period, the U.S. real estate industry also experienced a significant decrease in existing home turnover. The commercial and industrial building and maintenance sectors also experienced a significant decline. The downturn in each of these segments contributed to an unprecedented decline in the demand for some of our products. New home starts, existing home sales and new commercial construction are significantly below their pre-recession highs. Although many of our end markets have started to show signs of stabilization and modest improvement, the recovery has been erratic and challenging market conditions are expected to continue for the foreseeable future and may worsen. A worsening in these segments will continue to reduce the demand for some of our products and may adversely impact sales, earnings and cash flow.

Increases in the cost of raw materials and energy may adversely affect our earnings or cash flow.

We purchase raw materials and energy for use in the manufacturing, distribution and sale of our products. Factors such as adverse weather conditions, including hurricanes, and other disasters can disrupt raw material and fuel supplies and increase our costs. In addition, many raw material suppliers decreased manufacturing capacity during the recent recession. Continued economic recovery has caused and may continue to cause demand pressure on raw material supplies. The decrease in manufacturing capacity, along with strong global demand for certain raw materials, has caused and may continue to cause tight supplies and significant price increases, especially in titanium dioxide and petrochemicals, which are key ingredients used in the manufacture of paint and coatings. Although raw materials and energy supplies (including oil and natural gas) are generally available from various sources in sufficient quantities, unexpected shortages and increases in the cost of raw materials and energy, or any deterioration in our relationships with or the financial viability of our suppliers, may have an adverse effect on our earnings or cash flow in the event we are unable to offset higher costs in a timely manner by sufficiently decreasing our operating costs or raising the prices of our products. Many of our paint and coatings products utilize oil based derivatives, minerals (including titanium dioxide) and metals. While we have experienced some easing of the prices of certain raw materials recently, raw material pricing has in the past and likely will in the future experience periods of volatility.

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Although we have an extensive customer base, the loss of any of our largest customers could adversely affect our sales, earnings or cash flow.

We have a large and varied customer base due to our extensive distribution network. During 2012, no individual customer accounted for sales totaling more than ten percent of our sales. However, we have some customers that, individually, purchase a large amount of products from us. Although our broad distribution channels help to minimize the impact of the loss of any one customer, the loss of any of these large customers could have an adverse effect on our sales, earnings or cash flow.

Adverse weather conditions may temporarily reduce the demand for some of our products and could have a negative effect on our sales, earnings or cash flow.

From time to time, adverse weather conditions in certain parts of the United States have had an adverse effect on our sales of paint, coatings and related products. For example, unusually cold and rainy weather, especially during the exterior painting season, could have an adverse effect on sales of our exterior paint products. An adverse effect on sales may cause a reduction in our earnings or cash flow.

Increased competition may reduce our sales, earnings or cash flow performance.

We face substantial competition from many international, national, regional and local competitors of various sizes in the manufacture, distribution and sale of our paint, coatings and related products. Some of our competitors are larger than us and have greater financial resources to compete. Other competitors are smaller and may be able to offer more specialized products. Technology, product quality, product innovation, breadth of product line, technical expertise, distribution, service and price are the key competitive factors for our business. Competition in any of these areas may reduce our sales and adversely affect our earnings or cash flow by resulting in decreased sales volumes, reduced prices and increased costs of manufacturing, distributing and selling our products.

Our planned acquisition of Comex may not occur at all or may not occur in the expected time frame, which may negatively affect the trading prices of our stock and our future business and financial results.

On November 9, 2012, we and Sherwin-Williams (Caribbean) N.V., one of our wholly owned subsidiaries, entered into a definitive Stock Purchase Agreement to purchase all of the issued and outstanding shares of Consorcio Comex, S.A. de C.V. and Conaxe, S.A. de C.V., for an aggregate purchase price of approximately $2.34 billion in cash, including assumed debt. Founded in 1952, Comex is a privately held business with operations in Latin America, the United States and Canada. In 2011, Comex had total annual sales of approximately U.S. $1.4 billion.

Completion of the planned acquisition of Comex is not assured and there is no assurance that it will be completed. The closing of the acquisition is subject to the satisfaction or waiver of customary closing conditions, including, among others, the consent, waiver or authorization of the Federal Antitrust Commission of Mexico and the National Commission of Foreign Investments of Mexico, both of which are under review. The acquisition is subject to risks and uncertainties, including the risk that the necessary regulatory approvals are not obtained or that other closing conditions are not satisfied. If the acquisition is not completed, or if there are significant delays in completing the acquisition, it could negatively affect the trading prices of our common stock and our future business and financial results.

Our obligation to complete the Comex acquisition is not subject to a financing condition.

Our obligation to complete the Comex acquisition is not subject to a financing condition. In December 2012, we incurred $1 billion of indebtedness by issuing senior notes due 2017 and 2042, a portion of which we plan to use to pay part of the purchase price of the acquisition. We also plan to pay part of the purchase price of the acquisition by borrowing through existing credit facilities and other financing facilities, which we may refinance by issuing additional long-term debt in the future. If any of the banks in these credit and financing facilities are unable to perform their commitments, we may be required to finance a portion of the purchase price of the acquisition at interest rates higher than currently expected. If we are unable to borrow the necessary funds to complete the acquisition, or if we are not otherwise able to pay the purchase price, we may not be able to complete the acquisition and will be in breach of the purchase agreement.

We may not be able to realize the anticipated benefits and synergies of the Comex acquisition at all or in the expected time frame.

The success of the Comex acquisition will depend, in part, on our ability to realize the anticipated benefits and synergies from combining and integrating the Comex business with our existing business during a challenging global economic environment. We may not be able to achieve expected objectives, or may not able to achieve these objectives on a timely basis, and the anticipated benefits and synergies therefore may not be realized fully or at all.

The acquisition involves challenges and risks, including risks that the transaction does not advance our business strategy or that we will not realize a satisfactory return. The challenges include, among others (i) the diversion of the attention of management and other employees to integration matters; (ii) difficulties in achieving anticipated cost savings, synergies,

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business opportunities and growth prospects from combining the business of Comex with our existing business; (iii) difficulties in managing the expanded operations of a larger and more complex company with an expanded presence in Latin America; (iv) challenges in keeping existing customers and obtaining new customers; and (v) challenges in retaining key employees and integrating a workforce while maintaining focus on providing high quality customer service. Any integration difficulties could decrease or eliminate the anticipated benefits and synergies of the acquisition and could negatively affect the trading prices of our stock and our future business and financial results.

To service our debt, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. We also depend on the business of our subsidiaries to satisfy our cash needs. If we cannot generate the required cash, we may not be able to make the necessary payments required under our indebtedness.

At December 31, 2012, we had total debt of approximately $1.7 billion, a significant increase over our total debt of approximately $990 million at December 31, 2011. We have the ability under our existing credit facilities to incur substantial additional indebtedness in the future, and we plan to incur significant additional indebtedness in the event we complete the Comex acquisition. Our ability to make payments on our debt, fund our other liquidity needs, and make planned capital expenditures will depend on our ability to generate cash in the future. Our historical financial results have been, and we anticipate that our future financial results will be, subject to fluctuations. Our ability to generate cash, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flow from our operations or that future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund our other liquidity needs and make planned capital expenditures.

The degree to which we are currently leveraged and will be leveraged following the completion of the Comex acquisition could have important consequences to shareholders. For example, it could:

• require us to dedicate a substantial portion of our cash flow from operations to the payment of debt service, reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

• increase our vulnerability to adverse economic or industry conditions;

• limit our ability to obtain additional financing in the future to enable us to react to changes in our business; or

• place us at a competitive disadvantage compared to businesses in our industry that have less debt.

Additionally, any failure to comply with covenants in the instruments governing our debt could result in an event of default which, if not cured or waived, would have a material adverse effect on us.

A significant portion of our operations are conducted through our subsidiaries. As a result, our ability to generate sufficient cash flow for our needs is dependent to some extent on the earnings of our subsidiaries and the payment of those earnings to us in the form of dividends, loans or advances and through repayment of loans or advances from us. Our subsidiaries are separate and distinct legal entities. Our subsidiaries have no obligation to pay any amounts due on our debt or to provide us with funds to meet our cash flow needs, whether in the form of dividends, distributions, loans or other payments. In addition, any payment of dividends, loans or advances by our subsidiaries could be subject to statutory or contractual restrictions. Payments to us by our subsidiaries will also be contingent upon our subsidiaries' earnings and business considerations. Our right to receive any assets of any of our subsidiaries upon their liquidation or reorganization will be effectively subordinated to the claims of that subsidiary's creditors, including trade creditors. In addition, even if we are a creditor of any of our subsidiaries, our rights as a creditor would be subordinate to any security interest in the assets of our subsidiaries and any indebtedness of our subsidiaries senior to that held by us. Finally, changes in the laws of foreign jurisdictions in which we operate may adversely affect the ability of some of our foreign subsidiaries to repatriate funds to us.

Our results of operations, cash flow or financial condition may be negatively impacted if we do not successfully integrate past and future acquisitions into our existing operations and if the performance of the businesses we acquire do not meet our expectations.

We have historically made strategic acquisitions of businesses in the paint and coatings industry and will likely acquire additional businesses in the future as part of our long-term growth strategy. In 2011, we acquired Leighs Paints, a leading industrial fire protection coatings manufacturer headquartered in the United Kingdom. In 2012, we acquired Geocel Holdings Corporation, which manufactures innovative caulks, sealants, and adhesives specially designed for tough construction and repair applications in commercial, residential, industrial and transport non-automotive markets. Geocel has operations in both the United States and United Kingdom. In 2012, we also acquired Jiangsu Pulanna Coating Co., Ltd., a leading automotive refinishes coatings manufacturer in China. These acquisitions, along with the Comex acquisition, involve challenges and risks. In the event that we do not successfully integrate these acquisitions into our existing operations so as to realize the expected return on our investment, our results of operations, cash flow or financial condition could be adversely affected.

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Risks and uncertainties associated with our expansion into and our operations in Asia, Europe, Mexico, South America and other foreign markets could adversely affect our results of operations, cash flow, liquidity or financial condition.

Net external sales of our consolidated foreign subsidiaries totaled approximately 21.5%, 22.6% and 18.9% of our total consolidated net sales in 2012, 2011 and 2010, respectively. This percentage is expected to increase in 2013 in the event we complete the Comex acquisition. Sales outside of the United States make up a growing and significant part of our current business and future strategic plans. Our results of operations, cash flow, liquidity or financial condition could be adversely affected by a variety of international factors, including general economic conditions, inflation rates, recessions, foreign currency exchange rates, foreign currency exchange controls, interest rates, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest, difficulties in staffing and managing foreign operations and other external economic and political factors. Our inability to successfully manage the risks and uncertainties relating to these factors could adversely affect our results of operations, cash flow, liquidity or financial condition.

In many foreign countries, it is acceptable to engage in certain business practices that we are prohibited from engaging in because of regulations that are applicable to us, such as the Foreign Corrupt Practices Act and the UK Bribery Act. Although we have internal control policies and procedures designed to ensure compliance with these regulations, there can be no assurance that our policies and procedures will prevent a violation of these regulations. Any violation could cause an adverse effect on our results of operations, cash flow or financial condition.

Fluctuations in foreign currency exchange rates could adversely affect our results of operations, cash flow, liquidity or financial condition.

Because of our international operations, we are exposed to risk associated with interest rates and value changes in foreign currencies, which may adversely affect our business. Historically, our reported net sales, earnings, cash flow and financial condition have been subjected to fluctuations in foreign exchange rates. Our primary exchange rate exposure is with the euro, the British pound, the Argentine peso, the Brazilian real, the Chilean peso, the Canadian dollar and the Mexican peso against the U.S. dollar. While we actively manage the exposure of our foreign currency risk as part of our overall financial risk management policy, we believe we may experience losses from foreign currency exchange rate fluctuations, and such losses could adversely affect our sales, earnings, cash flow, liquidity or financial condition.

We are subject to a wide variety of complex domestic and foreign laws and regulations, for which compliance could adversely affect our results of operations, cash flow or financial condition.

We are subject to a wide variety of complex domestic and foreign laws and regulations, and legal compliance risks, including securities laws, tax laws, employment and pension-related laws, competition laws, U.S. and foreign export and trading laws, and laws governing improper business practices. We are affected by new laws and regulations, and changes to existing laws and regulations, including interpretations by courts and regulators. From time to time, our Company, our operations and the industries in which we operate are being reviewed or investigated by regulators, which could lead to enforcement actions or the assertion of private litigation claims and damages.

Although we believe that we have adopted appropriate risk management and compliance programs to mitigate these risks, the global and diverse nature of our operations means that compliance risks will continue to exist. Investigations, examinations and other proceedings, the nature and outcome of which cannot be predicted, will likely arise from time to time. These investigations, examinations and other proceedings could subject us to significant liability and require us to take significant accruals or pay significant settlements, fines and penalties, which could have a material adverse effect on our results of operations, cash flow or financial condition.

We are subject to tax laws and regulations in the United States and multiple foreign jurisdictions. We are affected by changes in tax laws and regulations, as well as changes in related interpretations and other tax guidance. In the ordinary course of our business, we are subject to examinations and investigations by various tax authorities. In addition to existing examinations and investigations, there could be additional examinations and investigations in the future, and existing examinations and investigations could be expanded.

For non-income tax risks, we estimate material loss contingencies and accrue for such loss contingencies as required by U.S. generally accepted accounting principles based on our assessment of contingencies where liability is deemed probable and reasonably estimable in light of the facts and circumstances known to us at a particular point in time. Subsequent developments may affect our assessment and estimates of the loss contingency. In the event the loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material adverse effect on our results of operations or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and cannot be reasonably estimated, any potential liability ultimately determined to be attributable to us may result in a material adverse effect on our results of operations, cash flow or financial condition for the annual or interim period during which such liability is accrued or paid. For income tax risks, we recognize tax benefits based on our assessment that a tax benefit has a greater than

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50% likelihood of being sustained upon ultimate settlement with the applicable taxing authority that has full knowledge of all relevant facts. For those income tax positions where we assess that there is not a greater than 50% likelihood that such tax benefits will be sustained, we do not recognize a tax benefit in our financial statements. Subsequent events may cause us to change our assessment of the likelihood of sustaining a previously-recognized benefit which could result in a material adverse effect on our results of operations, cash flow or financial position for the annual or interim period during which such liability is accrued or paid.

We discuss risks and uncertainties with regard to taxes in more detail in Note 14 of the Notes to Consolidated Financial Statements on pages 71 and 72 of our 2012 Annual Report.

We are required to comply with numerous complex and increasingly stringent domestic and foreign health, safety and environmental laws and regulations, the cost of which is likely to increase and may adversely affect our results of operations, cash flow or financial condition.

Our operations are subject to various domestic and foreign health, safety and environmental laws and regulations. These laws and regulations not only govern our current operations and products, but also impose potential liability on us for our past operations. We expect health, safety and environmental laws and regulations to impose increasingly stringent requirements upon our industry and us in the future. Our costs to comply with these laws and regulations may increase as these requirements become more stringent in the future, and these increased costs may adversely affect our results of operations, cash flow or financial condition.

We are involved with environmental investigation and remediation activities at some of our currently and formerly owned sites, as well as a number of third-party sites, for which our ultimate liability may exceed the current amount we have accrued.

We are involved with environmental investigation and remediation activities at some of our currently and formerly owned sites and a number of third-party sites. We accrue for estimated costs of investigation and remediation activities at these sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are based on currently available facts regarding each site. We continuously assess our potential liability for investigation and remediation activities and adjust our environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated. Due to the uncertainties surrounding environmental investigation and remediation activities, our liability may result in costs that are significantly higher than currently accrued and may have an adverse affect on our earnings. We discuss these risks and uncertainties in more detail on page 23 of our 2012 Annual Report under the caption “Environmental Matters,” pages 27 and 29 of our 2012 Annual Report under the caption “Environmental-Related Liabilities” and in Note 8 of the Notes to Consolidated Financial Statements on pages 63 and 64 of our 2012 Annual Report.

The nature, cost, quantity and outcome of pending and future litigation, such as litigation arising from the historical manufacture and sale of lead pigments and lead-based paint, could have a material adverse effect on our results of operations, cash flow, liquidity and financial condition.

In the course of our business, we are subject to a variety of claims and lawsuits, including litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to us. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, we accrue for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that a loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on our results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and the amount of any such loss cannot be reasonably estimated, any potential liability ultimately determined to be attributable to us may result in a material impact on our results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred even if the possibility may be remote.

Our past operations included the manufacture and sale of lead pigments and lead-based paints. Along with other companies, we are a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs are seeking recovery based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent

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misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. We are also a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints which seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. We believe that the litigation brought to date is without merit or subject to meritorious defenses and are vigorously defending such litigation. We expect that additional lead pigment and lead-based paint litigation may be filed against us in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

Notwithstanding our views on the merits, litigation is inherently subject to many uncertainties, and we ultimately may not prevail. Adverse court rulings, such as the jury verdict against us and other defendants in the State of Rhode Island action and the Wisconsin State Supreme Court’s determination that Wisconsin’s risk contribution theory may apply in the lead pigment litigation, or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against us and encourage an increase in the number and nature of future claims and proceedings. In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which we and other manufacturers have been successful.

Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on the litigation or against us. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or any such legislation and regulations. We have not accrued any amounts for such litigation. With respect to such litigation, including the public nuisance litigation, the Company does not believe that it is probable that a loss has occurred, and it is not possible to estimate the range of potential losses as there is no prior history of a loss of this nature and there is no substantive information upon which an estimate could be based. In addition, any potential liability that may result from such legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to us relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to us arising out of such litigation may have a material adverse effect on our results of operations, cash flow, liquidity or financial condition. An estimate of the potential impact on our results of operations, cash flow, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

The Santa Clara County, California proceeding is currently scheduled for trial in June 2013. The sole remaining claim in the proceeding is for public nuisance, and the plaintiffs seek the abatement of the alleged public nuisance that exists within the plaintiffs' jurisdictions. Adverse court rulings or a determination of liability against us in the Santa Clara County, California proceeding could subject us and the other defendants to significant liabilities, costs and expenses to abate the presence of lead products for use in paint and coatings in, on and around buildings in the plaintiffs' jurisdictions and could encourage an increase in future public nuisance claims and proceedings. Any adverse court rulings or any determinations of liability against us may result in a material impact on our results of operations, liquidity or financial condition.

We discuss the risks and uncertainties related to litigation, including the lead pigment and lead-based paint litigation, in more detail on page 23 of our 2012 Annual Report under the caption “Litigation and Other Contingent Liabilities,” and pages 31 through 34 of our 2012 Annual Report under the caption “Litigation” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 9 of the Notes to Consolidated Financial Statements on pages 64through 67 of our 2012 Annual Report.

The costs or potential liability ultimately determined to be attributable to us due to our ownership of Life Shield could have an adverse effect on our results of operations, cash flow, liquidity or financial condition.

We own Life Shield Engineered Systems, LLC, which ceased operations in 2012. Life Shield developed and manufactured blast and fragment mitigating systems. The blast and fragment mitigating systems create a potentially higher level of product liability for us than is normally associated with coatings and related products we manufacture, distribute and sell. Depending upon the extent of any potential liability ultimately determined to be attributable to us relating to Life Shield, such liability could have an adverse effect on our results of operations, cash flow, liquidity or financial condition. We discuss these risks and uncertainties in more detail on pages 30 and 31 of our 2012 Annual Report under the caption “Contingent Liabilities” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

We own our world headquarters located in Cleveland, Ohio, which includes the world headquarters for the Paint Stores Group, Consumer Group, Global Finishes Group and Latin America Coatings Group. Our principal manufacturing and distribution facilities are located as set forth below. We believe our manufacturing and distribution facilities are well-maintained and are suitable and adequate, and have sufficient productive capacity, to meet our current needs.

CONSUMER GROUP
Manufacturing Facilities
Andover, Kansas	Owned	Grodzisk Wielkopolski, Poland	Leased
Arlington, Texas	Owned	Grove City, Ohio	Owned
Baltimore, Maryland	Owned	Holland, Michigan	Owned
Bedford Heights, Ohio	Owned	Homewood, Illinois	Owned
Beltsville, Maryland	Owned	Jeffersonville, Indiana	Owned
Chicago, Illinois	Owned	Lawrenceville, Georgia	Owned
Cincinnati, Ohio	Owned	Manchester, Georgia	Owned
Coffeyville, Kansas	Owned	Memphis, Tennessee	Owned
Columbus, Ohio	Owned	Morrow, Georgia	Owned
Crisfield, Maryland	Leased	Ontario, California	Leased
Elkhart, Indiana	Owned	Orlando, Florida	Owned
Elkhart, Indiana	Leased	Plymouth, United Kingdom	Leased
Ennis, Texas	Owned	Portland, Oregon	Leased
Fernley, Nevada	Owned	Richmond, Kentucky	Owned
Flora, Illinois	Owned	Rockford, Illinois	Leased
Fort Erie, Ontario, Canada	Owned	Sheffield, United Kingdom	Owned
Garland, Texas	Owned	South Holland, Illinois	Owned
Greensboro, North Carolina (2)	Owned	Szamotuly, Poland	Owned
Grimsby, Ontario, Canada	Owned	Victorville, California	Owned
Distribution Facilities
Buford, Georgia	Leased	Sheffield, United Kingdom	Owned
Effingham, Illinois	Leased	Swaffham, United Kingdom	Leased
Fredericksburg, Pennsylvania	Owned	Szamotuly, Poland	Owned
Reno, Nevada	Leased	Waco, Texas	Leased
Richmond, Kentucky	Owned	Winter Haven, Florida	Owned
GLOBAL FINISHES GROUP
Manufacturing Facilities
Bello, Sweden	Owned	Pasir Gudang, Johor, Malaysia	Owned
Binh Duong Province, Vietnam	Owned	Pianoro, Italy	Owned
Bolton, United Kingdom	Owned	Saint Cheron, France	Owned
Brantford, Ontario, Canada	Owned	Sao Paulo, Brazil	Owned
Cavezzo, Italy	Owned	Shanghai, China	Leased
Changzhou, China	Leased	Texcoco, Mexico	Owned
Mariano Comense, Italy	Owned	Valencia, Spain	Owned
Marsta, Sweden	Owned	Wuppertal, Germany	Owned
Mumbai (Paloja), India	Owned	Zhao Qing, China	Leased

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Distribution Facilities
Bolton, United Kingdom	Owned	Nassjo, Sweden	Leased
Cavezzo, Italy	Leased	Sao Paulo, Brazil	Owned
Changzhou, China	Owned	Shanghai, China	Owned
Guadalajara, Mexico	Leased	Texcoco, Mexico	Owned
Lima, Peru	Leased	Valencia, Venezuela	Leased
Mexico City, Mexico	Owned	Quito, Ecuador	Owned
LATIN AMERICA COATINGS GROUP
Manufacturing Facilities
Buenos Aires, Argentina	Owned	Santiago, Chile (3)	Leased
Guayaquil, Ecuador	Owned	Sao Paulo, Brazil (2)	Owned
Monterrey, Mexico	Owned	Quito, Ecuador	Owned
Montevideo City, Uruguay	Owned	Vallejo, Mexico	Owned
Santiago, Chile	Owned
Distribution Facilities
Buenos Aires, Argentina	Owned	Montevideo City, Uruguay	Owned
Guadalajara, Mexico	Leased	Quito, Ecuador	Owned
Hermosillo, Mexico	Leased	Santa Catarina, Brazil	Leased
Lima, Peru	Leased	Santiago, Chile	Owned
Machala, Ecuador	Leased	Sao Paulo, Brazil (2)	Owned
Maceio, Brazil	Leased	Vallejo, Mexico	Owned
Monterrey, Mexico	Owned

The operations of the Paint Stores Group included a manufacturing and distribution facility in Jamaica and 3,520 company-operated specialty paint stores, of which 206 were owned, in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten, Jamaica, Curacao and Aruba at December 31, 2012. These paint stores are divided into four separate operating divisions that are responsible for the sale of predominantly architectural, protective and marine and related products through the paint stores located within their geographical region. At the end of 2012:

• the Mid Western Division operated 925 paint stores primarily located in the midwestern and upper west coast states;

• the Eastern Division operated 840 paint stores along the upper east coast and New England states and Canada;

• the Southeastern Division operated a manufacturing and distribution facility in Jamaica and 908 paint stores principally covering the lower east and gulf coast states, Puerto Rico, Jamaica, Trinidad and Tobago, St. Maarten, Virgin Islands, Curacao and Aruba; and

• the South Western Division operated 847 paint stores in the central plains and the lower west coast states.

In 2012, the Paint Stores Group opened 70 net new paint stores, consisting of 81 new stores opened (63 in the United States, 14 in Canada, 1 in Puerto Rico and 3 in Trinidad) and 11 stores closed in the United States.

The Global Finishes Group operated 242 branches in the United States, of which 8 were owned, at December 31, 2012. The Global Finishes Group also operated 60 branches internationally, of which 7 were owned, at December 31, 2012, consisting of branches in Canada (25), Europe (16), Chile (14), Mexico (3), Peru (1) and Thailand (1). During 2012, the Global Finishes Group opened 1 new branch in the United States and closed 2 in the United States for a net decrease of 1 branch.

The Latin America Coatings Group operated 276 stores, of which 8 were owned, at December 31, 2012, consisting of stores in Mexico (120), Brazil (86), Chile (39), Ecuador (17), Uruguay (10), Peru (3) and Colombia (1). During 2012, the Latin America Coatings Group opened 17 new stores (9 in South America and 8 in Mexico) and closed 6 in South America for a net increase of 11 stores.

All real property within the Administrative segment is owned by us. For additional information regarding real property within the Administrative segment, see the information set forth in Item 1 of this report, which is incorporated herein by reference.

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For additional information regarding real property leases, see Note 17 of the Notes to Consolidated Financial Statements on page 74 of our 2012 Annual Report, which is incorporated herein by reference.

ITEM 3.    LEGAL PROCEEDINGS

For information regarding environmental-related matters and other legal proceedings, see pages 27 and 29, and 31 through 34, of our 2012 Annual Report under the captions “Environmental-Related Liabilities” and “Litigation” of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 1, 8, 9 and 13 of the Notes to Consolidated Financial Statements on pages 50, 63 and 64, 64 through 67, and 71, respectively, of our 2012 Annual Report, which is incorporated herein by reference.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following is the name, age and present position of each of our executive officers at February 13, 2013, as well as all prior positions held by each during the last five years and the date when each was first elected or appointed as an executive officer. Executive officers are generally elected annually by the Board of Directors and hold office until their successors are elected and qualified or until their earlier death, resignation or removal.

Name	Age	Present Position	Date When First Elected or Appointed
Christopher M. Connor	56	Chairman and Chief Executive Officer, Director	1994
John G. Morikis	49	President and Chief Operating Officer	1999
Sean P. Hennessy	55	Senior Vice President – Finance and Chief Financial Officer	2001
Thomas E. Hopkins	55	Senior Vice President – Human Resources	1997
Catherine M. Kilbane	49	Senior Vice President, General Counsel and Secretary	2013
Steven J. Oberfeld	60	Senior Vice President – Corporate Planning and Development	2006
Thomas W. Seitz	64	Senior Vice President – Strategic Excellence Initiatives	1999
Robert J. Wells	55	Senior Vice President – Corporate Communications and Public Affairs	2006
Robert J. Davisson	52	President, Paint Stores Group	2010
George E. Heath	47	President, Global Finishes Group	2008
Timothy A. Knight	48	President, Latin America Coatings Group	2011
Allen J. Mistysyn	44	Vice President – Corporate Controller	2010

Mr. Connor has served as Chairman since April 2000 and Chief Executive Officer since October 1999. Mr. Connor has served as a Director since October 1999 and has been employed with the Company since January 1983.

Mr. Morikis has served as President and Chief Operating Officer since October 2006. Mr. Morikis has been employed with the Company since December 1984.

Mr. Hennessy has served as Senior Vice President – Finance and Chief Financial Officer since August 2001. Mr. Hennessy has been employed with the Company since September 1984.

Mr. Hopkins has served as Senior Vice President – Human Resources since February 2002. Mr. Hopkins has been employed with the Company since September 1981.

Ms. Kilbane has served as Senior Vice President, General Counsel and Secretary since January 2013. Prior to joining the Company, Ms. Kilbane was Senior Vice President, General Counsel and Secretary of American Greetings Corporation from October 2003 to December 2012. Ms. Kilbane has been employed with the Company since January 2013.

Mr. Oberfeld has served as Senior Vice President – Corporate Planning and Development since November 2010. Mr. Oberfeld served as President, Paint Stores Group from October 2006 to November 2010. Mr. Oberfeld has been employed with the Company since October 1984.

Mr. Seitz has served as Senior Vice President – Strategic Excellence Initiatives since February 2007. Mr. Seitz has been employed with the Company since June 1970.

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Mr. Wells has served as Senior Vice President – Corporate Communications and Public Affairs since February 2009. Mr. Wells served as Vice President – Corporate Communications and Public Affairs from January 2006 to February 2009. Mr. Wells has been employed with the Company since May 1998.

Mr. Davisson has served as President, Paint Stores Group since November 2010. Mr. Davisson served as President & General Manager, Southeastern Division, Paint Stores Group from October 1999 to November 2010. Mr. Davisson has been employed with the Company since April 1986.

Mr. Heath has served as President, Global Finishes Group since September 2008. Mr. Heath served as President & General Manager, Chemical Coatings Division from November 2005 to September 2008. Mr. Heath has been employed with the Company since May 2004.

Mr. Knight has served as President, Latin America Coatings Group since November 2010. Mr. Knight served as Senior Vice President – Corporate Planning and Development from February 2007 to November 2010. Mr. Knight has been employed with the Company since December 1994.

Mr. Mistysyn has served as Vice President – Corporate Controller since May 2010. Mr. Mistysyn served as Vice President - Assistant Corporate Controller from August 2009 to May 2010 and Vice President – Controller, Paint and Coatings Division from November 2006 to August 2009. Mr. Mistysyn has been employed with the Company since June 1990.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our 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, 2013 was 7,925.

Information regarding market prices and dividend information with respect to our common stock is set forth on pages 78 and 79 of our 2012 Annual Report, which is incorporated herein by reference. The performance graph set forth on page 16 of our 2012 Annual Report is incorporated herein by reference. The information with respect to securities authorized for issuance under the Company’s equity compensation plans is set forth under the caption “Equity Compensation Plan Information” in our Proxy Statement, which is incorporated herein by reference.

Issuer Purchases of Equity Securities

The following table sets forth a summary of the Company’s purchases of common stock during the fourth quarter of 2012.

Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of a Publicly Announced Plan	Maximum Number of Shares that May Yet Be Purchased Under the Plan
October 1 – October 31
Share repurchase program (a)				17,250,000
November 1 – November 30
Share repurchase program (a)	750,000	$156.38	750,000	16,500,000
Employee transactions (b)	646	154.61		NA
December 1 – December 31
Share repurchase program (a)	50,000	$148.56	50,000	16,450,000
Employee transactions (b)	1,332	149.96		NA
Total
Share repurchase program (a)	800,000	$155.89	800,000	16,450,000
Employee transactions (b)	1,978	$151.48		NA

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(a) All shares were purchased through the Company’s publicly announced share repurchase program. On October 20, 2011, the Board of Directors of the Company authorized the Company to purchase an additional 20,000,000 shares of its common stock. The Company had remaining authorization at December 31, 2012 to purchase 16,450,000 shares. There is no expiration date specified for the program. The Company intends to repurchase stock under the program in the future.

(b) All shares were delivered to satisfy the exercise price and/or tax withholding obligations by employees who exercised stock options.

ITEM 6. SELECTED FINANCIAL DATA

(millions of dollars, except per common share data)

	2012		2011		2010		2009		2008
Operations
Net sales	$9,534		$8,766		$7,776		$7,094		$7,980
Net income	631		442		462		436		477
Financial Position
Total assets	$6,235		$5,229		$5,169		$4,324		$4,416
Long-term debt	1,632		639		648		783		304
Ratio of earnings to fixed charges (a)	7.2	x	6.3	x	5.1	x	5.6	x	5.6	x
Per Common Share Data
Net income — basic	$6.15		$4.22		$4.28		$3.80		$4.04
Net income — diluted	6.02		4.14		4.21		3.78		4.00
Cash dividends	1.56		1.46		1.44		1.42		1.40

(a) For purposes of calculating the ratio of earnings to fixed charges, earnings represents income before income taxes plus fixed charges. Fixed charges consist of interest expense, net, including amortization of discount and financing costs and the portion of operating rental expense which management believes is representative of the interest component of rent expense. The following schedule includes the figures used to calculate the ratios:

	2012		2011		2010		2009		2008
Income before income taxes	$	907	$	742	$	678	$	623	$	714
Fixed charges:
Interest expense, net	43		42		71		40		66
Interest component of rent expense	103		97		93		94		90
Total fixed charges	146		139		164		134		156
Earnings	$	1,053	$	881	$	842	$	757	$	870

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 19 through 39of our 2012 Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is incorporated herein by reference.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk associated with interest rates, foreign currency and commodity fluctuations. We occasionally utilize derivative instruments as part of our overall financial risk management policy, but do not use derivative instruments for speculative or trading purposes. The Company entered into foreign currency option and forward currency exchange contracts during 2012 to hedge against value changes in foreign currency. There were no contracts outstanding at December 31, 2012. Foreign currency option and forward contracts are described in Note 13 of the Notes to Consolidated Financial Statements on page 71 of our 2012 Annual Report. We believe we may experience continuing losses from foreign currency fluctuations. However, we do not expect currency translation, transaction or hedging contract losses to have a material adverse effect on our financial condition, results of operations or cash flows.

16

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required by this item is set forth on pages 42 through 76 of our 2012 Annual Report under the captions “Report of Management on the Consolidated Financial Statements,” “Report of the Independent Registered Public Accounting Firm on the Consolidated Financial Statements,” “Statements of Consolidated Income and Comprehensive 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 16 of the Notes to Consolidated Financial Statements on page 73 of our 2012 Annual Report, which is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chairman and Chief Executive Officer and our Senior Vice President – Finance and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based upon that evaluation, our Chairman and Chief Executive Officer and our Senior Vice President – Finance and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and accumulated and communicated to our management including our Chairman and Chief Executive Officer and our Senior Vice President – Finance and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

The “Report of Management on Internal Control over Financial Reporting” is set forth on page 40 of our 2012 Annual Report, which is incorporated herein by reference.

The “Report of the Independent Registered Public Accounting Firm on Internal Control over Financial Reporting” is set forth on page 41 of our 2012 Annual Report, which is incorporated herein by reference.

There were no changes in our internal control over financial reporting identified in connection with the evaluation that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

None.

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

The information regarding our directors is set forth under the captions “Proposal 1 — Election of Directors” and “Experiences, Qualifications, Attributes and Skills of Directors and Nominees” in our Proxy Statement, which is incorporated herein by reference.

There were no material changes to the procedures by which security holders may recommend nominees to our Board of Directors during 2012. Please refer to the information set forth under the caption “Board Meetings and Committees” in our Proxy Statement, which is incorporated herein by reference.

Executive Officers

The information regarding our executive officers is set forth under the caption “Executive Officers of the Registrant” in Part I of this report, which is incorporated herein by reference.

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Section 16(a) Beneficial Ownership Reporting Compliance

The information regarding compliance with Section 16 of the Securities Exchange Act of 1934 is set forth under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement, which is incorporated herein by reference.

Audit Committee

The information regarding the Audit Committee of our Board of Directors and the information regarding audit committee financial experts are set forth under the caption “Board Meetings and Committees” in our Proxy Statement, which is incorporated herein by reference.

Code of Ethics

We have adopted a Code of Conduct, which applies to all directors, officers and employees of Sherwin-Williams and our subsidiaries wherever located. Our Code of Conduct contains the general guidelines and principles for conducting Sherwin-Williams' business consistent with the highest standards of business ethics. Under our Code of Ethics for Senior Financial Management, our chief executive officer, chief financial officer and senior financial management are responsible for creating and maintaining a culture of high ethical standards and of commitment to compliance throughout our company to ensure the fair and timely reporting of Sherwin-Williams' financial results and condition. Senior financial management includes the controller, the treasurer, the principal financial/accounting personnel in our operating groups and divisions, and all other financial/accounting personnel within our corporate departments and operating groups and divisions with staff supervision responsibilities. Please refer to the information set forth under the caption “Corporate Governance – Code of Conduct” in our Proxy Statement, which is incorporated herein by reference. Our Code of Conduct and Code of Ethics for Senior Financial Management are available in the “Corporate Governance” section on the “Investor Relations” page of our website at www.sherwin.com.

We intend to disclose on our website any amendment to, or waiver from, a provision of our Code of Conduct or Code of Ethics for Senior Financial Management that applies to our directors and executive officers, including our principal executive officer, principal financial officer, principal accounting officer or controller, or any persons performing similar functions, and that is required to be publicly disclosed pursuant to the rules of the Securities and Exchange Commission.

ITEM 11.    EXECUTIVE COMPENSATION

The information required by this item is set forth under the captions “Compensation Committee Report,” “Compensation Risk Assessment,” “2012 Director Compensation Table” and “Director Compensation Program” in our Proxy Statement, and under the Executive Compensation section of our Proxy Statement commencing with the information under the caption “Compensation Discussion and Analysis” and continuing through the information under the caption “Estimated Payments upon Termination or Change in Control Table,” which is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information regarding security ownership of certain beneficial owners and management is set forth under the captions “Security Ownership of Management” and “Security Ownership of Certain Beneficial Owners” in our Proxy Statement, which is incorporated herein by reference.

The information regarding securities authorized for issuance under the Company’s equity compensation plans is set forth under the caption “Equity Compensation Plan Information” in our Proxy Statement, which is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is set forth under the captions “Certain Relationships and Transactions with Related Persons,” and “Independence of Directors” in our Proxy Statement, which is incorporated herein by reference.

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is set forth under the caption “Matters Relating to the Independent Registered Public Accounting Firm” in our Proxy Statement, which is incorporated herein by reference.

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PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The following consolidated financial statements of the Company included in our 2012 Annual Report are incorporated by reference in Item 8.

(i) Report of Management on the Consolidated Financial Statements (page 42 of our 2012 Annual Report);

(ii) Report of the Independent Registered Public Accounting Firm on the Consolidated Financial Statements (page 43 of our 2012 Annual Report);

(iii) Statements of Consolidated Income and Comprehensive Income for the years ended December 31, 2012, 2011 and 2010 (page 44 of our 2012 Annual Report);

(iv) Consolidated Balance Sheets at December 31, 2012, 2011 and 2010 (page 45 of our 2012 Annual Report);

(v) Statements of Consolidated Cash Flows for the years ended December 31, 2012, 2011 and 2010 (page 46 of our 2012 Annual Report);

(vi) Statements of Consolidated Shareholders’ Equity for the years ended December 31, 2012, 2011 and 2010 (page 47 of our 2012 Annual Report); and

(vii) Notes to Consolidated Financial Statements for the years ended December 31, 2012, 2011 and 2010 (pages 48through 76 of our 2012 Annual Report).

(2) Financial Statement Schedule

Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2012, 2011 and 2010 is set forth below. 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.

Valuation and Qualifying Accounts and Reserves

(Schedule II)

Changes in the allowance for doubtful accounts were as follows:

(thousands of dollars)	2012			2011			2010
Beginning balance	$	51,747		$	59,310		$	44,755
Amount acquired through acquisitions	226			462			14,739
Bad debt expense	20,922			25,078			20,606
Uncollectible accounts written off, net of recoveries	(25,228		)	(33,103		)	(20,790		)
Ending balance	$	47,667		$	51,747		$	59,310

(3) Exhibits

See the Exhibit Index on pages 21 through 24 of this report.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 28, 2013.

THE SHERWIN-WILLIAMS COMPANY
By:	/S/	CATHERINE M. KILBANE
		Catherine M. Kilbane, Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 28, 2013.

* C. M. CONNOR	Chairman and Chief Executive Officer, Director (Principal Executive Officer)
C. M. Connor
* S. P. HENNESSY	Senior Vice President – Finance and Chief Financial Officer (Principal Financial Officer)
S. P. Hennessy
* A. J. MISTYSYN	Vice President – Corporate Controller (Principal Accounting Officer)
A. J. Mistysyn
* A. F. ANTON	Director
A. F. Anton
* D. F. HODNIK	Director
D. F. Hodnik
* T. G. KADIEN	Director
T. G. Kadien
* R. J. KRAMER	Director
R. J. Kramer
* S. J. KROPF	Director
S. J. Kropf
* A. M. MIXON, III	Director
A. M. Mixon, III
* R. K. SMUCKER	Director
R. K. Smucker
* J. M. STROPKI	Director
J. M. Stropki

* The undersigned, by signing her name hereto, does sign this report on behalf of the designated officers and directors of the Company pursuant to powers of attorney executed on behalf of each such officer and director and filed as an exhibit to this report.

By:	/S/	CATHERINE M. KILBANE	February 28, 2013
		Catherine M. Kilbane, Attorney-in-fact

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EXHIBIT INDEX

3.	(a)	Amended and Restated Articles of Incorporation of the Company, as amended through July 26, 2006, filed as Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, and incorporated herein by reference.
	(b)	Regulations of the Company, as amended and restated April 20, 2011, filed as Exhibit 3 to the Company's Current Report on Form 8-K dated April 20, 2011, and incorporated herein by reference.
4.	(a)	Indenture between the Company and The Bank of New York Mellon (as successor to Chemical Bank), as trustee, dated as of February 1, 1996, filed as Exhibit 4(a) to Form S-3 Registration Statement Number 333-01093 dated February 20, 1996, and incorporated herein by reference.
	(b)	First Supplemental Indenture between the Company and The Bank of New York Mellon, as trustee (including Form of Note), dated as of December 21, 2009, filed as Exhibit 4(b) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and incorporated herein by reference.
	(c)	Form of Second Supplemental Indenture by and between the Company and The Bank of New York Mellon, as trustee (including Form of Note), dated as of December 7, 2012, filed as Exhibit 4.1 to the Company's Current Report on Form 8-K dated December 4, 2012, and incorporated herein by reference.
	(d)	Form of Third Supplemental Indenture by and between the Company and The Bank of New York Mellon, as Trustee (including Form of Note), dated as of December 7, 2012, filed as Exhibit 4.2 to the Company's Current Report on Form 8-K dated December 4, 2012, and incorporated herein by reference.
	(e)	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.
	(f)	Credit Agreement, dated as of July 8, 2011, among the Company, the Lenders party thereto, Bank of America, N.A., as administrative agent, and Wells Fargo Bank, N.A., as syndication agent, and JPMorgan Chase Bank, N.A. and Citibank, N.A., as co-documentation agents, filed as Exhibit 4.1 to the Company's Current Report on Form 8-K dated July 8, 2011, and incorporated herein by reference.
	(g)	Credit Agreement, dated as of June 29, 2012, among Sherwin-Williams Canada Inc., as borrower, the Company, as guarantor, the lenders party thereto, KeyBank National Association, as joint lead arranger, sole bookrunner and administrative agent, and PNC Bank National Association, as joint lead arranger and syndication agent, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated June 29, 2012, and incorporated herein by reference.
	(h)	Credit Agreement, dated as of September 19, 2012, among Sherwin-Williams Luxembourg S.à r.l., as borrower, the Company, as guarantor, the lenders party thereto, J.P. Morgan Europe Limited, as administrative agent and L/C issuer, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and HSBC Securities (USA) Inc., as joint lead arrangers and bookrunners, and Citigroup Global Markets Inc. and HSBC Securities (USA) Inc., as syndication agents, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated September 19, 2012, and incorporated herein by reference.
	(i)	Five Year Credit Agreement, dated as of January 30, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders from time to time party thereto, filed as Exhibit 4.1 to the Company's Current Report on Form 8-K dated January 30, 2012, and incorporated herein by reference.
	(j)	Agreement for Letter of Credit, dated as of January 30, 2012, by and between the Company and Citibank, N.A. filed as Exhibit 4.2 to the Company's Current Report on Form 8-K dated January 30, 2012, and incorporated herein by reference.
	(k)	Five Year Credit Agreement Amendment No. 1, dated as of February 6, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders from time to time party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated February 6, 2012, and incorporated herein by reference.
	(l)	Five Year Credit Agreement Amendment No. 2, dated as of February 13, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders from time to time party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated February 13, 2012, and incorporated herein by reference.
	(m)	Five Year Credit Agreement Amendment No. 3, dated as of February 27, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders from time to time party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated February 27, 2012, and incorporated herein by reference.

21

	(n)	Five Year Credit Agreement, dated as of April 23, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders party thereto, filed as Exhibit 4.1 to the Company's Current Report on Form 8-K dated April 23, 2012, and incorporated herein by reference.
	(o)	Agreement for Letter of Credit, dated as of April 23, 2012, by and between the Company and Citibank, N.A. filed as Exhibit 4.2 to the Company's Current Report on Form 8-K dated April 23, 2012, and incorporated herein by reference.
	(p)	Five Year Credit Agreement Amendment No. 1, dated as of April 25, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated April 25, 2012, and incorporated herein by reference.
	(q)	Five Year Credit Agreement Amendment No. 2, dated as of May 7, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated May 7, 2012, and incorporated herein by reference.
	(r)	Three Year Credit Agreement, dated as of November 14, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders party thereto, filed as Exhibit 4.1 to the Company's Current Report on Form 8-K dated November 14, 2012, and incorporated herein by reference.
	(s)	Agreement for Letter of Credit, dated as of November 14, 2012, by and between the Company and Citibank, N.A., filed as Exhibit 4.2 to the Company's Current Report on Form 8-K dated November 14, 2012, and incorporated herein by reference.
	(t)	Three Year Credit Agreement Amendment No. 1, dated as of November 26, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated November 26, 2012, and incorporated herein by reference.
	(u)	Three Year Credit Agreement Amendment No. 2, dated as of December 3, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated December 3, 2012, and incorporated herein by reference.
	(v)	Three Year Credit Agreement Amendment No. 3, dated as of December 10, 2012, by and among the Company, Citicorp USA, Inc., as administrative agent and issuing bank, and the lenders party thereto, filed as Exhibit 4 to the Company's Current Report on Form 8-K dated December 10, 2012, and incorporated herein by reference.
10.	*(a)	Summary of Compensation Payable to Non-Employee Directors (filed herewith).
	*(b)	Summary of Base Salary and Annual Incentive Compensation Payable to Named Executive Officers (filed herewith).
	*(c)	Forms of Amended and Restated Severance Agreements filed as Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and incorporated herein by reference.
	*(d)	Schedule of Executive Officers who are Parties to the Amended and Restated Severance Agreements in the forms referred to in Exhibit 10(c) (filed herewith).
	*(e)	The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan (as Amended and Restated) filed as Exhibit 10(g) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and incorporated herein by reference.
	*(f)	Amendment No. 1 to The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan (as Amended and Restated) filed as Exhibit 10(h) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and incorporated herein by reference.
	*(g)	The Sherwin-Williams Company 2005 Key Management Deferred Compensation Plan (as Amended and Restated) filed as Exhibit 10(g) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and incorporated herein by reference.
	*(h)	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.
	*(i)	2004-1 Amendment to The Sherwin-Williams Company Director Deferred Fee Plan (1997 Amendment and Restatement) filed as Exhibit 10(d) to the Company's Current Report on Form 8-K dated July 20, 2005, and incorporated herein by reference.
	*(j)	The Sherwin-Williams Company 2005 Director Deferred Fee Plan (as Amended and Restated) filed as Exhibit 10(j) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and incorporated herein by reference.

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*(k)	Amendment to The Sherwin-Williams Company 2005 Director Deferred Fee Plan (as Amended and Restated), filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, and incorporated herein by reference.
*(l)	The Sherwin-Williams Company 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.
*(m)	Amendment Number One to The Sherwin-Williams Company Executive Disability Income Plan filed as Exhibit 10(I) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and incorporated herein by reference.
*(n)	The Sherwin-Williams Company 2008 Amended and Restated Executive Life Insurance Plan filed as Exhibit 10(m) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and incorporated herein by reference.
*(o)	The Sherwin-Williams Company 2003 Stock Plan, dated January 1, 2003, filed as Exhibit 10(a) to the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002, and incorporated herein by reference.
*(p)	Form of Stock Option Grant under The Sherwin-Williams Company 2003 Stock Plan filed as Exhibit 10(b) to the Company's Current Report on Form 8-K dated February 2, 2005, and incorporated herein by reference.
*(q)	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.
*(r)	Form of Stock Option Grant under The Sherwin-Williams Company 1997 Stock Plan for Nonemployee Directors filed as Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, and incorporated herein by reference.
*(s)	The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(b) to the Company's Current Report on Form 8-K dated April 19, 2006, and incorporated herein by reference.
*(t)	Form of Nonqualified Stock Option Award under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(y) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.
*(u)	Form of Incentive Stock Option Award under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(z) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.
*(v)	Form of Restricted Stock Grant (Performance-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(aa) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, and incorporated herein by reference.
*(w)	Form of Restricted Stock Grant (Performance-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(aa) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and incorporated herein by reference.
*(x)	Form of Restricted Stock Grant (Performance and Time-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan filed as Exhibit 10(a) to the Company's Current Report on Form 8-K dated February 16, 2010, and incorporated herein by reference.
*(y)	The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of April 21, 2010) filed as Exhibit 10(bb) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and incorporated herein by reference.
*(z)	Forms of Stock Option Award under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of April 21, 2010) filed as Exhibit 10(b) to the Company's Current Report on Form 8-K dated April 20, 2010, and incorporated herein by reference.
*(aa)	Forms of Stock Option Award under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of April 21, 2010) filed as Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, and incorporated herein by reference.
*(bb)	Form of Restricted Stock Grant (Performance and Time-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of April 21, 2010) filed as Exhibit 10(a) to the Company's Current Report on Form 8-K dated February 15, 2011, and incorporated herein by reference.
*(cc)	Form of Restricted Stock Grant (Performance and Time-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of April 21, 2010) filed as Exhibit 10 to the Company's Current Report on Form 8-K dated February 14, 2012, and incorporated herein by reference.

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	*(dd)	Form of Restricted Stock Grant (Performance and Time-Based) under The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of April 21, 2010) (filed herewith).
	*(ee)	The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors filed as Exhibit 10(c) to the Company's Current Report on Form 8-K dated April 19, 2006, and incorporated herein by reference.
	*(ff)	Form of Restricted Stock Grant under The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors filed as Exhibit 10(d) to the Company's Current Report on Form 8-K dated July 19, 2006, and incorporated herein by reference.
	*(gg)	Form of Restricted Stock Grant under The Sherwin-Williams 2006 Stock Plan for Nonemployee Directors filed as Exhibit 10(d) to the Company's Current Report on Form 8-K dated April 20, 2010, and incorporated by reference.
	*(hh)	The Sherwin-Williams Company 2007 Executive Performance Bonus Plan (As Amended and Restated Effective January 1, 2012) filed as Exhibit 10(a) to the Company's Current Report on Form 8-K dated April 18, 2012, and incorporated herein by reference.
	**(ii)	Stock Purchase Agreement, dated November 9, 2012, by and among Avisep, S.A. de C.V., Bevisep, S.A. de C.V., Sherwin-Williams (Caribbean) N.V. and the Company (filed herewith).
13.		Our 2012 Annual Report, portions of which are incorporated herein by reference (filed herewith). With the exception of those portions of our 2012 Annual Report which are specifically incorporated by reference in this report, our 2012 Annual Report shall not be deemed “filed” as part of this report.
21.		Subsidiaries (filed herewith).
23.		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm (filed herewith).
24.	(a)	Powers of Attorney (filed herewith).
	(b)	Certified Resolution Authorizing Signature by Power of Attorney (filed herewith).
31.	(a)	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer (filed herewith).
	(b)	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer (filed herewith).
32.	(a)	Section 1350 Certification of Chief Executive Officer (filed herewith).
	(b)	Section 1350 Certification of Chief Financial Officer (filed herewith).
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

*	Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
**	Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Sherwin-Williams agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule upon request.

24

EX-10.A

EXHIBIT 10(a)

SUMMARY OF COMPENSATION

PAYABLE TO NON-EMPLOYEE DIRECTORS

Director Fees. The cash compensation payable to Sherwin-Williams' non-employee directors is as follows:

• An annual cash retainer of $95,000;

• An additional annual cash retainer of $25,000 for the Lead Director;

• An additional annual cash retainer of $21,000 for the chair of the Audit Committee;

• An additional annual cash retainer of $21,000 for the chair of the Compensation and Management Development Committee;

• An additional annual cash retainer of $15,000 for the chair of the Nominating and Corporate Governance Committee; and

• A meeting fee of $1,750 for each Board or Committee meeting attended in excess of twelve meetings during a calendar year. For purposes of calculating the number of meetings during a calendar year, any Board and Committee meetings held within 24 hours shall constitute one meeting.

All retainer amounts are payable in quarterly installments in advance. All meeting fees are payable on the date of the meeting.

In addition, non-employee directors receive an annual grant of restricted stock of approximately $110,000, valued over a prior 30-day period, under The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors.

Other Benefits. All directors are reimbursed for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board and of committees of the Board.

Sherwin-Williams pays the premiums for liability insurance and business travel accident insurance for all directors, including $225,000 accidental death and dismemberment coverage and $225,000 permanent total disability coverage, while the directors are traveling on Sherwin-Williams' business.

Directors may also receive the same discounts as Sherwin-Williams' employees on the purchase of products at Sherwin-Williams' stores and are eligible to participate in Sherwin-Williams' matching gifts on the same basis as employees. These programs provide for annual matches for gifts of up to $5,000 under the matching gifts to education program and $1,000 under the matching gifts for volunteer leaders program, as well as annual grants of up to $200 under the grants for volunteers program.

Deferral of Director Fees. In accordance with the Director Deferred Fee Plan, directors may elect to defer all or a part of their retainer and meeting fees. Deferred fees may be credited in a common stock account, a shadow stock account or an interest bearing cash account. The value of the shadow stock account reflects changes in the market price of Sherwin-Williams common stock and the payment of dividend equivalents at the same rate as paid on the common stock. Amounts deferred may be distributed either in annual installments over a period up to ten years or in a lump sum pursuant to a director's payment election. Amounts credited to a shadow stock account are distributed in cash.

EX-10.B

EXHIBIT 10(b)

SUMMARY OF BASE SALARY AND ANNUAL INCENTIVE

COMPENSATION PAYABLE TO NAMED EXECUTIVE OFFICERS

2013 Base Salary. On February 12, 2013, the Compensation and Management Development Committee (the “Compensation Committee”) of the Board of Directors of The Sherwin-Williams Company (“Sherwin-Williams”) set the 2013 base salaries of the executive officers who are expected to be named in the Summary Compensation Table of Sherwin-Williams' 2013 Proxy Statement (the “Named Executive Officers”). The base salaries of the Named Executive Officers for 2013 are as follows: C.M. Connor, Chairman and Chief Executive Officer ($1,221,987); J.G. Morikis, President and Chief Operating Officer ($826,696); S.P. Hennessy, Senior Vice President - Finance and Chief Financial Officer ($623,506); S.J. Oberfeld, Senior Vice President - Corporate Planning and Development ($569,036); and R.J. Davisson, President, Paint Stores Group ($505,362).

Annual Incentive Compensation to Be Earned in 2013. The Compensation Committee also approved the following minimum, target and maximum cash bonus award levels, as a percent of salary, for the Named Executive Officers for 2013 under The Sherwin-Williams Company 2007 Executive Performance Bonus Plan.

	Incentive Award as a Percentage of Base Salary
Named Executive Officer	Minimum	Target	Maximum
C.M. Connor	0	125	250
J.G. Morikis	0	75	150
S.P. Hennessy	0	75	150
R.J. Davisson	0	60	120
S.J. Oberfeld	0	60	120

EX-10.D

EXHIBIT 10(d)

Schedule of Executive Officers who are Parties

to the Amended and Restated Severance Agreements in the Forms Filed as

Exhibit 10(e) to the Company's Annual Report on Form 10-K

For the Fiscal Year Ended December 31, 2010

Form A of Severance Agreement

Christopher M. Connor

John G. Morikis

Sean P. Hennessy

Form B of Severance Agreement

Robert J. Davisson

George E. Heath

Thomas E. Hopkins

Timothy A. Knight

Steven J. Oberfeld

Thomas W. Seitz

Robert J. Wells

Form C of Severance Pay Agreement

Catherine M. Kilbane

Allen J. Mistysyn

EX-10.DD

EXHIBIT 10(dd)

THE SHERWIN-WILLIAMS COMPANY

2006 EQUITY AND PERFORMANCE INCENTIVE PLAN

(Amended and Restated as of April 21, 2010)

Form of

Restricted Stock Grant Agreement

Grantee: _________________ Date of Grant: ________________

Date of Vesting: _______________

Number of Time-Based Restricted Shares: ________________________                    

Number of Performance-Based Restricted Shares: __________________                    

Total Number of Restricted Shares: ______________________________                            

1.    Grant of Restricted Shares. The Board of Directors (the “Board”) of The Sherwin-Williams Company (the “Company”) grants to you (“Grantee”) the aggregate number of shares of Common Stock, $1.00 par value, of the Company set forth above (the “Restricted Shares”) in accordance with the terms of this Restricted Stock Grant Agreement (this “Agreement”) and the terms of The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan, as amended and restated as of April 21, 2010 (the “Plan”), the related Prospectus and any Prospectus Supplement, and such other rules and procedures as may be adopted by the Company. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan.

2.    Vesting.

(a)    Vesting of Performance-Based Restricted Shares. Subject to Sections 3 and 4 hereof, provided Grantee is continuously employed with the Company or a Subsidiary from the Date of Grant through the Date of Vesting, inclusive (the “Restriction Period”), in Grantee's present position or in such other position as the Board may determine entitles Grantee to retain the rights under this grant (such positions being hereinafter referred to as a “Participating Position”), a percentage ranging from 0% to 100% of the Performance-Based Restricted Shares shall vest in accordance with the Management Objective set forth below (the “Vesting Percentage”). The determination of the Vesting Percentage shall be made after such time as the Board has obtained the information, made the decisions, and completed the calculations necessary to make such determination. The Vesting Percentage is based upon the Company's Earnings Per Share (“Cumulative EPS”) during the three-year period ending on December 31 of the most recently completed fiscal year prior to the Date of Vesting (the “Measurement Period”), as determined in accordance with the following table:

Cumulative EPS	Vesting Percentage
Equal to or greater than $
$
Less than $

When the Cumulative EPS results during the Measurement Period fall between the table values, mathematical interpolation will be used to determine the Vesting Percentage calculated to the nearest hundredth of a percentage. The manner in which the Board will determine Cumulative EPS during the Measurement Period is set forth on Exhibit A attached hereto.

(b)    Vesting of Time-Based Restricted Shares. Provided Grantee is continuously employed with the Company or a Subsidiary in Grantee's present position or in a different Participating Position during the Restriction Period, the Time-Based Restricted Shares shall immediately vest in full on the same date as the Performance-Based Restricted Shares vest in accordance with Section 2(a) hereof.

3.    Change of Control. Notwithstanding Section 2 above, in the event of a Change of Control, the Restricted Shares shall vest on fulfillment of the conditions specified in Section 12 of the Plan.

1

4.    Termination of Rights to Restricted Shares. Notwithstanding anything herein to the contrary,

(a)    On the date Grantee ceases to be continuously employed in any Participating Position(s) at any time during the Restriction Period, the Restricted Shares shall terminate and Grantee shall forfeit and lose all rights to the Restricted Shares, except as otherwise provided below:

(i)    In the event of the death of Grantee during the Restriction Period, the Total Number of Restricted Shares shall immediately vest upon his or her date of death and be settled within 30 days of the termination of Grantee's employment as a result of his or her death.

(ii)    In the event Grantee is terminated by the Company or a Subsidiary as a result of expiration of available disability leave of absence pursuant to applicable Company policy due to sickness or bodily injury during the Restriction Period, the Total Number of Restricted Shares shall immediately vest upon the date of the termination of Grantee's employment and be settled within 30 days of the termination of Grantee's employment as a result of his or her disability.

(iii)    In the event Grantee's employment terminates as a result of Retirement, all rights of Grantee under this grant shall continue as if Grantee had continued employment in a Participating Position. The determination of the percentage of the number of Restricted Shares that will vest will be made as if Grantee had remained employed in a Participating Position throughout the Restriction Period. “Retirement” shall be defined as: (a) the attainment of age 65; (b) the attainment of age 55-59 with at least twenty (20) years of service with the Company or a Subsidiary; or (c) the attainment of age 60 or older and the Grantee's combination of age and service with the Company or any Subsidiary equals at least 75.

(b)    In the event Grantee is transferred from a Participating Position, the Board shall have the right to cancel Grantee's rights hereunder, continue Grantee's rights hereunder in full, or prorate the number of Restricted Shares granted hereunder for the portion of the Restriction Period completed as of the date of such transfer or as the Board may otherwise deem appropriate. In the event Grantee's rights hereunder continue in full or the number of Restricted Shares is prorated, determination of the percentage of the number of Restricted Shares that will vest will be made as if Grantee had remained employed in a Participating Position throughout the Restriction Period.

(c)    In the event that Grantee knowingly or willfully engages in misconduct during the Restriction Period, which is materially harmful to the interests of the Company or a Subsidiary as determined by the Board, all rights of Grantee in the Restricted Shares shall terminate.

5.    Book Entry Account; Stockholder Rights. Within a reasonable time following the Date of Grant, the Company shall instruct its transfer agent to establish a book entry account representing the Restricted Shares in Grantee's name effective as of the Date of Grant, provided that the Company shall retain control over the account until the Restricted Shares have vested. On the Date of Grant, ownership of the Restricted Shares shall immediately transfer to Grantee and, except for the substantial risk of forfeiture and the restrictions on transfer expressly set forth herein, Grantee shall be entitled to all voting, dividend, distribution and other ownership rights as may apply to the Common Stock generally. Notwithstanding the foregoing, (a) any stock dividends or other in-kind dividends or distributions with respect to the Restricted Shares shall be held by the Company until the related Restricted Shares have become vested in accordance with this grant and shall remain subject to the forfeiture provisions to the same extent and at the same time as the Restricted Shares to which such dividends or distributions relate and (b) any cash dividends or distributions with respect to the Performance-Based Restricted Shares shall be deferred by the Company and paid contingent upon the achievement of the applicable Management Objectives to the same extent and at the same time as the Performance-Based Restricted Shares to which such dividends or distributions relate.

6.    Transferability. During the Restriction Period, Grantee shall not be permitted to sell, transfer, pledge, encumber, assign or dispose of the Restricted Shares.

7.    Withholding Taxes. If the Company shall be required to withhold any federal, state, local or foreign tax in connection with the Restricted Shares, Grantee shall pay or make provision satisfactory to the Company for payment of all such taxes.

8.    No Right to Future Awards or Employment. The grant is a voluntary, discretionary bonus being made on a one-time basis and it does not constitute a commitment to make any future awards. The grant and any related payments made to Grantee will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing contained herein will not confer upon Grantee any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate Grantee's employment or other service at any time.

2

9.    Nature of Grant. Grantee acknowledges that (a) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty and (b) in consideration of the grant of the Restricted Shares, no claim or entitlement to compensation or damages shall arise from termination of the Restricted Shares or diminution in value of the shares received upon settlement including (without limitation) any claim or entitlement resulting from termination of Grantee's active employment by the Company or a Subsidiary (for any reason whatsoever and whether or not in breach of local labor laws) and Grantee hereby releases the Company and its Subsidiaries from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by accepting the Restricted Shares and this Agreement, Grantee shall be deemed irrevocably to have waived his or her entitlement to pursue such claim.

10.    Severability. If any provision of this grant or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this grant and the application of such provision to any other person or circumstances shall not be affected, and the provisions so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.

11.    Governing Law. This grant shall be governed by and construed with the internal substantive laws of the State of Ohio, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

12.    Application of The Sherwin-Williams Company Executive Compensation Adjustment and Recapture Policy. Grantee acknowledges and agrees that the terms and conditions set forth in The Sherwin-Williams Company Executive Compensation Adjustment and Recapture Policy (“Policy”) are incorporated in this Agreement by reference. To the extent the Policy is applicable to Grantee, it creates additional rights for the Company with respect to Grantee's Restricted Shares.

13.    Data Privacy. Grantee explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Grantee's personal data as described in this document by and among, as applicable, Grantee's employer (“Employer”) and the Company and its Subsidiaries, for the exclusive purpose of implementing, administering and managing Grantee's participation in the Plan. Grantee understands that Employer and the Company and its Subsidiaries hold (but only process or transfer to the extent required or permitted by local law) the following personal information about Grantee: Grantee's name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all Restricted Shares or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Grantee's favor, for the purpose of implementing, administering and managing the Plan (“Data”). Grantee understands that Data may be transferred to third parties assisting in the implementation, administration and management of the Plan, including Charles Schwab & Co., Inc., that these recipients may be located in Grantee's country or elsewhere (including countries outside of the European Union or the European Economic Area, such as the United States of America), and that the recipient's country may have different data privacy laws and protections than those that apply in Grantee's country. Grantee understands that Grantee may request a list with the names and addresses of any potential recipients of the Data by contacting Grantee's local human resources representative. Grantee authorizes these recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Grantee's participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom Grantee may elect to deposit any shares acquired upon vesting of the Restricted Shares. Grantee understands that Data will be held only as long as is necessary to implement, administer and manage Grantee's participation in the Plan and in accordance with local law. Grantee understands that Grantee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Grantee's local human resources representative. Grantee understands, however, that refusing or withdrawing Grantee's consent may affect Grantee's ability to participate in the Plan. For more information on the consequences of Grantee's refusal to consent or withdrawal of consent, Grantee hereby understands that Grantee may contact his or her local human resources representative.

14.    Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the Restricted Shares and Grantee's participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request Grantee's consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

15.    Compliance with Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) do not apply to Grantee. This Agreement and the Plan shall be administered in a manner consistent with this intent. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of 1986, as amended, and will also

3

include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

4

Exhibit A

Cumulative Earnings Per Share shall be equal to the sum of the Earnings Per Share (EPS) (less those items relating to extraordinary events or which result in a distortion of comparative results) for each fiscal year of the Company during the Measurement Period.

Example:

Year 1 EPS	$	4.00
Year 2 EPS	$	4.20
Year 3 EPS	$	4.40
Cumulative EPS	$	12.60

Cumulative EPS = $12.60

5

EX-10.II

EXHIBIT 10(ii)

Stock Purchase Agreement

by and between

Avisep, S.A. de C.V.,

Bevisep, S.A. de C.V.,

and

The Sherwin-Williams Company,

Sherwin-Williams (Caribbean) N.V.

Dated November 9, 2012

TABLE OF CONTENTS

Article I DEFINITIONS	1
Section 1.1    Definitions	1
Section 1.2    Construction	13
Section 1.3    Annexes, Exhibits and the Disclosure Letter	15
Section 1.4    Knowledge	15
Article II SALE OF SHARES	15
Section 2.1    Sale of Shares	15
Section 2.2    Purchase Price; Delivery of Funds and other payments	15
Section 2.3    Final Purchase Price	16
Section 2.4    Closing; Closing Deliverables	18
Article III REPRESENTATIONS AND WARRANTIES OF SELLERS	20
Section 3.1    Organization	20
Section 3.2    Authorization; Non-contravention	20
Section 3.3    Ownership of Shares	21
Section 3.4    The Subject Companies	21
Section 3.5    Capitalization of the Company	22
Section 3.6    Capitalization of the Company's Subsidiaries	22
Section 3.7    Consents and Approvals	23
Section 3.8    Financial Statements; Undisclosed Liabilities	23
Section 3.9    Compliance with Laws; Permits	24
Section 3.10    Litigation	25
Section 3.11    Tax Matters	25
Section 3.12    Personal Property	26
Section 3.13    Intellectual Property	27
Section 3.14    Insurance	27
Section 3.15    Employee Benefits and Labor Relations	28
Section 3.16    Transactions with Related Parties	30
Section 3.17    Company Contracts	30
Section 3.18    Real Properties; Real Property Leases	32
Section 3.19    Bank Accounts	33
Section 3.20    Environmental Matters	33
Section 3.21    Brokers	34
Section 3.22    Inventory	34
Section 3.23    Proceedings	34
Section 3.24    Product Liability	34
Section 3.25    No Additional Representations	34
Article IV REPRESENTATIONS AND WARRANTIES OF PURCHASERS	35
Section 4.1    Due Organization, Good Standing and Corporate Power of Purchasers	35

i

TABLE OF CONTENTS

(continued)

Section 4.2    Authorization; Non-contravention	35
Section 4.3    Consents and Approvals	36
Section 4.4    Broker's or Finder's Fee	36
Section 4.5    Financing	36
Section 4.6    Solvency	36
Section 4.7    Proceedings	37
Section 4.8    Experienced Investor	37
Section 4.9    Investigation by Purchasers	37
Section 4.10    Exclusivity of Representations	38
Article V COVENANTS	38
Section 5.1    Access to Information Concerning Properties and Records	38
Section 5.2    Confidentiality	38
Section 5.3 Conduct of the Business of the Subject Companies Pending the Closing Date	39
Section 5.4    Exclusive Dealing	41
Section 5.5    Commercially Reasonable Efforts; Consents	42
Section 5.6    Public Announcements	42
Section 5.7    Notification of Certain Matters	42
Section 5.8 Supplements to Schedules	43
Section 5.9    Antitrust Laws	43
Section 5.10    Preservation of Records	44
Section 5.11    Employee Benefits	44
Section 5.12    Non-Competition; Non-Interference	45
Section 5.13    Non-Solicitation of Employees	46
Section 5.14    Release	46
Section 5.15    Transaction Expenses	46
Section 5.16    Environmental Investigations	47
Article VI CONDITIONS PRECEDENT	48
Section 6.1    Conditions to the Obligations of Each Party	48
Section 6.2    Conditions to the Obligations of Purchasers	48
Section 6.3    Conditions to the Obligations of Sellers	49
Section 6.4    Frustration of Closing Conditions	49
Article VII TERMINATION AND ABANDONMENT	50
Section 7.1    Termination	50
Section 7.2    Effect of Termination	51
Article VIII INDEMNIFICATION	51
Section 8.1    Survival of Representations and Warranties	51
Section 8.2    Indemnification by Sellers	51

ii

TABLE OF CONTENTS

(continued)

Section 8.3    Indemnification by Purchasers	52
Section 8.4    Limitation on Indemnification	52
Section 8.5    Losses Net of Insurance, etc.	53
Section 8.6    Indemnification Procedure	55
Section 8.7    Third-Party Claims	56
Section 8.8    Sole Remedy/Waiver	57
Section 8.9    Release of the Indemnification Escrow Amount	57
Article IX TAX MATTERS	58
Section 9.1    Section 338 Election	58
Section 9.2    Tax Returns Due After the Closing Date	59
Section 9.3    Tax Refunds	61
Section 9.4    Cooperation on Tax Matters	61
Section 9.5    Amended Returns and Retroactive Elections	62
Section 9.6    Certain Transfer Taxes and Fees	62
Article X MISCELLANEOUS	62
Section 10.1    Fees and Expenses	62
Section 10.2    Extension; Waiver	62
Section 10.3    Notices	63
Section 10.4    Entire Agreement	63
Section 10.5    Binding Effect; Benefit; Assignment	64
Section 10.6    Amendment and Modification	64
Section 10.7    Counterparts	64
Section 10.8    Applicable Law	64
Section 10.9    Arbitration	64
Section 10.10    Severability	64
Section 10.11 Specific Enforcement	64
Section 10.12    Rules of Construction	65
ANNEXES, EXHIBITS AND SCHEDULES
Annex A - Shares
Annex B - Phase II Facilities
Exhibit A - Form of Escrow Agreement
Exhibit B - Sellers Allocation
Exhibit C - Form of Release

iii

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “Agreement”) dated November 9, 2012 is executed by and among (i) on one side as sellers (A) Avisep, S.A. de C.V. a company organized under the laws of Mexico (the “Primary Seller”), and (B) Bevisep, S.A. de C.V. a company organized under the laws of Mexico (each a “Seller” and, collectively, “Sellers”); and (ii) on the other side as purchasers (A) The Sherwin-Williams Company, a corporation incorporated under the laws of the State of Ohio, U.S. (“Primary Purchaser”), and (B) Sherwin-Williams (Caribbean) N.V., a corporation incorporated under the laws of Curacao (each a “Purchaser” and, collectively, “Purchasers” and, together with the Sellers, the “Parties”).

WITNESSETH:

WHEREAS, Sellers own the shares in Consorcio Comex, S.A. de C.V. (the “Company”) andConaxe, S. A. de C. V. (“Conaxe”) as described in Annex A hereto (the “Shares”), which Shares collectively represent all of the issued and outstanding shares of capital stock of the Company and Conaxe;

WHEREAS, Sellers desire to sell, and Purchasers desire to purchase, the Shares pursuant to the terms and subject to the conditions set forth in this Agreement and in the proportions indicated in Annex A hereto; and

WHEREAS, upon consummation of the purchase and sale of the Shares pursuant to this Agreement, Purchasers shall own all of the outstanding shares of capital stock of the Company andConaxe.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations, warranties and agreements herein contained, the Parties, intending to be legally bound, agree as follows:

Article I

DEFINITIONS

Section 1.1    Definitions. Defined terms in this Agreement and in the Annexes, Exhibits and Schedules to this Agreement, which may be identified by the capitalization of the first letter of each principal word thereof, have the meanings assigned to them below. Other terms may be defined elsewhere in the text of this Agreement and, unless otherwise indicated, shall have such meaning throughout this Agreement.

“Accounting Principles” means the accounting principles, policies, practices and methods described in Section 1.1(a) of the Sellers Disclosure Letter.

“Affiliate” of any Person shall mean any other Person directly or indirectly controlling, controlled by, or under common control with, such Person; provided, that, for the purposes of this definition and this Agreement, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract or otherwise.

1

“Agreed Claims” has the meaning ascribed to such term in Section 8.6(c).

“Alternate Transaction” has the meaning ascribed to such term in Section 5.4.

“Antitrust Authorities” means (i) in Mexico, the Federal Antitrust Commission (Comisión Federal de Competencia); (ii) in the U.S., the Federal Trade Commission, the Antitrust Division of the United States Department of Justice and the attorneys general of the several states of the United States; (iii) in Canada, the Competition Bureau; and (iv) any other Governmental Entity in the jurisdictions referred to above and any other jurisdiction, with authority over the transactions contemplated hereby pursuant to applicable Antitrust Laws.

“Antitrust Filings” has the meaning ascribed to such term in Section 5.9(a)(i).

“Antitrust Laws” means (i) in Mexico the Federal Antitrust Law (Ley Federal de Competencia Económica) and its regulations, as amended, as well as any other applicable Laws and Orders in Mexico; (ii) in the U.S. (A) the Sherman Act, as amended, (B) the Clayton Act, as amended, (C) the HSR Act, and (D) the Federal Trade Commission Act, as amended, as well as any other applicable Laws and Orders in the U.S.; (iii) in Canada, the Competition Act, as well as any other applicable Laws and Orders in Canada; and (iv) all other Laws and Orders that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or otherwise governing antitrust matters applicable to the Sellers, the Purchasers or the transactions contemplated by this Agreement.

“Audited Financial Statements” has the meaning ascribed to such term in Section 3.8(a)(i).

“Balance Sheet Date” has the meaning ascribed to such term in Section 3.8(a)(i).

“Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in Mexico City, Mexico, or New York, New York, U.S.

“Cash and Cash Equivalents” means cash and cash equivalents, determined in accordance with NIF.

“Claim Certificate” has the meaning ascribed to such term in Section 8.6(a).

“Closing” has the meaning ascribed to such term in Section 2.4(a).

“Closing Balance Sheet” has the meaning ascribed to such term in Section 2.3(b).

“Closing Cash” means the Cash and Cash Equivalents of the Company and the Company's Subsidiaries on a consolidated basis calculated in accordance with NIF as of 11:59 P.M. on the Business Day immediately prior to the Closing Date.

2

“Closing Date”has the meaning ascribed to such term in Section 2.4(a).

“Closing Funded Indebtedness” has the meaning ascribed to such term in Section 2.3(b).

“Closing Working Capital” means the Consolidated Current Assets of the Company and the Company's Subsidiaries on a consolidated basis less the Consolidated Current Liabilities of the Company and the Company's Subsidiaries on a consolidated basis as determined in accordance with the Accounting Principles as of 11:59 P.M. on the Business Day immediately prior to the Closing Date.

“Closing Payment” has the meaning ascribed to such term in Section 2.2(b).

“Closing Statement” has the meaning ascribed to such term in Section 2.3(b).

“Code” means the Internal Revenue Code of 1986 of the U.S., as amended and the Treasury Regulations thereunder.

“Collateral Source” has the meaning ascribed to such term in Section 8.5(a)(iv).

“Company” has the meaning ascribed to such term in the Recitals.

“Company Contracts” has the meaning ascribed to such term in Section 3.17(a).

“Company Employees” has the meaning ascribed to such term in Section 5.11(a).

“Company Intellectual Property”means any Intellectual Property that is owned by any of the Subject Companies.

“Company Permit” has the meaning ascribed to such term in Section 3.9(b).

“Company Personal Property” has the meaning ascribed to such term in Section 3.12.

“Company's Subsidiaries” means all of the Company's direct or indirect Subsidiaries.

“Company Transaction Expenses” means all expenses of Sellers and the Subject Companies incurred or to be incurred (prior to and through the Closing Date) in connection with the negotiation, preparation and execution of this Agreement and the consummation of the transactions contemplated hereby and the Closing, including fees and disbursements of attorneys, accountants, brokers, financial and other advisors and service providers, travel and entertainment expenses, and meeting and presentation expenses, payable by any Seller or Subject Company.

“Competing Business” has the meaning ascribed to such term in Section 5.12(i).

“Conaxe” has the meaning ascribed to such term in the Recitals.

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“Confidential Material” means all information (written or oral) that is confidential or proprietary to any of the Subject Companies regarding the Subject Companies. The term “Confidential Material” shall not include (i) information that is or becomes generally available to the public, other than as a result of disclosure by Sellers, the Subject Companies or their respective Affiliates and Representatives in violation of this Agreement; and (ii) becomes available to Sellers or their Representatives from a Person other than the other Seller or any Subject Company on a non-confidential basis; provided that such Person was not known by Sellers or their respective Representatives to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, any of the Subject Companies or their Representatives with respect to such materials.

“Confidentiality Agreement” has the meaning ascribed to such term in Section 5.2(a).

“Consolidated Current Assets” means, without duplication, the line items set forth under the heading “Current Assets” described in Section 1.1(b) of the Sellers Disclosure Letter, as determined in accordance with NIF.

“Consolidated Current Liabilities” means, without duplication, the line items set forth under the heading “Current Liabilities” described in Section 1.1(b) of the Sellers Disclosure Letter, as determined in accordance with NIF.

“Contract” means any written agreement, understanding, arrangement, contract, commitment, letter of intent, purchase order, note, bond, mortgage, indenture, guarantee, license, franchise, consent, or other instrument or obligation and any amendments thereto.

“Corrective Actions” has the meaning ascribed to such term in Section 8.5(b)(iii).

“Deductible” has the meaning ascribed to such term in Section 8.4(a)(i).

“Disputed Amounts” has the meaning ascribed to such term in Section 2.3(d).

“Due Diligence Materials” has the meaning ascribed to such term in Section 4.9(i)(A).

“End Date” has the meaning ascribed to such term in Section 7.1(ii)(B).

“Environment” means the air (including indoor air), surface water or ground water (including navigable waters, marine waters, drinking water, streams, ponds, drainage basins and water bodies), any land, all living organisms, sediment, soil or subsurface strata, natural or mineral resources and the environment or living environment.

“Environmental Approvals” has the meaning ascribed to such term in Section 3.20(a)(ii).

“Environmental Law” means any Law, Order or other requirement of Law relating to (i) the pollution or the protection of the Environment, including air emissions, water discharges, soil remediation, natural or mineral resources or any other regulation standing for the conservation, protection, contamination or remediation of the Environment, or (ii) the handling, storage, generation, treatment, disposal or human

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exposure to, or the Release of, Hazardous Substance, or (iii) safety or health (with respect to Hazardous Substances), as well as any Law that relates to:

(a)advising appropriate authorities, employees, and the public of intended or actual Release of Hazardous Substances, violations of discharge limits, or other prohibitions and of the commencements of activities, such as resource extraction or construction, that could have an impact on the Environment;

(b)preventing or reducing to acceptable levels the Release of Hazardous Substances into the Environment;

(c)reducing the quantities, preventing the Release, or minimizing the hazardous characteristics of wastes that are generated;

(d)assuring that products are designed, formulated, packaged, and used so that they do not present unreasonable risks to human health (with respect to Hazardous Substances) or the Environment when used or disposed of;

(e)protecting resources, species, or ecological amenities;

(f)reducing to acceptable levels the risks inherent in the transportation of Hazardous Substances;

(g)cleaning up pollutants that have been Released, preventing the threat of Release, or paying the costs of such clean up or prevention; or

(h)making responsible parties pay private parties, or groups of them, for damages done to their health or the Environment, or permitting self-appointed representatives of the public interest to recover for injuries done to public assets.

“Environmental Liabilities” means, without duplication, any Losses resulting from, arising out of or relating to (i) non-compliance by any Subject Company with Environmental Laws prior to the Closing Date; (ii) obligations of Purchasers or any Subject Company to carry out Corrective Actions, provided, however, that such Corrective Actions (A) are required to be performed pursuant to the Environmental Laws or a final or immediately enforceable Order by a Governmental Entity or (B) are necessary to eliminate, reduce or otherwise remedy an immediate danger to the Environment as reasonably determined by the Purchasers concerning circumstances or events occurring prior to the Closing Date; or (iii) Environmental Matters involving or related to a Subject Company occurring prior to the Closing Date.

“Environmental Matters” means (i) the storage, placement, release, threat of release, spillage, deposit, escape, disposal, leak, emission or presence of Hazardous Substances in the Environment, including damages to natural resources; (ii) the creation of noise, vibration, radiation, common law or statutory nuisance; or (iii) other matters relating to the protection of workplace safety (with respect to Hazardous Substances) or the Environment arising out of the manufacturing, processing, treatment, storage, handling, use, possession, purchase, sale, import, export or transportation of Hazardous Substances.

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“ERISA” has the meaning ascribed to such term in Section 3.15(a).

“ERISA Affiliate” has the meaning ascribed to such term in Section 3.15(a).

“Escrow” means the escrow account created pursuant to the Escrow Agreement.

“Escrow Agreement” shall mean the escrow agreement to be entered into on the Closing Date among Purchasers, Sellers and the designated escrow agent substantially in the form attached hereto as Exhibit A.

“Escrow Amount” means the Indemnification Escrow Amount plus the Purchase Price Escrow Amount plus the Golden Parachute Escrow Amount.

“Exchange Act” means the Securities Exchange Act of 1934 of the U.S., as amended, and the rules and regulations promulgated thereunder.

“Exchange Rate” has the meaning ascribed to such term in Section 2.3(e).

“Expert” has the meaning ascribed to such term in Section 2.3(d)(i).

“Final Purchase Price” has the meaning ascribed to such term in Section 2.3(a).

“Financial Statements” has the meaning ascribed to such term in Section 3.8(a).

“Foreign Investment Approval” means the authorization by Foreign Investment Authority pursuant to Article 9 of the Foreign Investment Law of Mexico (Ley de Inversión Extranjera).

“Foreign Investment Authority” means the National Commission of Foreign Investments (Comisión Nacional de Inversiones Extranjeras)of Mexico.

“Funded Indebtedness” of any Person means, without duplication, (i) indebtedness for borrowed money or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money; (ii) indebtedness evidenced by any note, bond, debenture, or other debt instrument or debt security; (iii) any accrued and unpaid interest owing by such Person with respect to any indebtedness of a type described in clauses (i) and (ii); and (iv) any prepayment penalties, commissions and/or fees and associated Taxes; provided, that Funded Indebtedness shall not include accounts payable to trade creditors, accrued expenses arising in the Ordinary Course of Business consistent with past practice, the endorsement of negotiable instruments for collection in the Ordinary Course of Business, and Funded Indebtedness owing from any wholly owned Subject Company to any other wholly owned Subject Company.

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“GAAP” means (i) in respect of Mexico, NIF; and (ii) in respect of any other jurisdictions, the generally accepted accounting principles applicable in the relevant jurisdiction, in both cases, as effective from time to time.

“Golden Parachute Escrow Amount” means an amount equivalent to the Golden Parachute Obligations, which amount is to be deposited by Primary Purchaser with the escrow agent pursuant to the Escrow Agreement for a period of twenty four months commencing on the Closing Date, and held and released pursuant to the terms and subject to the conditions set forth in this Agreement and the Escrow Agreement.

“Golden Parachute Obligations” means the aggregate dollar amount, which any of the Subject Companies would be obligated to pay pursuant to all of the agreements entered into with each of the individuals identified in Section 1.1(c) of the Sellers Disclosure Letter (each such Person, a “Recipient”), determined as if such obligations were triggered on the last day of the month prior to the Closing Date.

“Governmental Entity” means any federal, state, municipal, provincial or local court, arbitral tribunal, administrative agency, department, board, instrumentality or commission or other governmental or regulatory agency or authority or any securities exchange, of Mexico, the U.S., Canada or any other any jurisdiction.

“Hazardous Substance” means any and all minerals, metals, materials, chemicals, waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Law, Order or requirement of Law applicable to the Subject Companies' business, including petroleum and all derivatives thereof and asbestos or asbestos-containing materials.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“ICC Rules” has the meaning ascribed to such term in Section 10.9(a).

“IMSS” means the Mexican Institute of Social Security (Instituto Mexicano del Seguro Social).

“Income Tax” means any federal, state, local or non-U.S. income tax measured by or imposed on net income, including any interest, penalty, or addition thereto, whether disputed or not.

“Income Tax Return” means any annual return, declaration, report, claim for refund, or information return or statement relating to Income Taxes, including any schedule or attachment thereto.

“Indemnification Escrow Amount” means $93,725,000, which amount is to be deposited by Primary Purchaser with the escrow agent pursuant to the Escrow Agreement, and held and released pursuant to the terms and subject to the conditions set forth in this Agreement and the Escrow Agreement. The Indemnification Escrow Amount may be increased as set forth in Section 5.16.

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“Indemnification Escrow Fund” means the escrow fund established pursuant to the Escrow Agreement in respect of the Indemnification Escrow Amount.

“Indemnified Party” has the meaning ascribed to such term in Section 8.6(a).

“Indemnifying Party” has the meaning ascribed to such term in Section 8.6(a).

“Intellectual Property” means all intellectual property in any jurisdiction, whether owned or held for use under license, whether registered or unregistered, including such rights in and to: (i) issued patents and all provisional and pending patent applications, any and all divisions, continuations, continuations-in-part, reissues, continuing patent applications, reexaminations, and extensions thereof, any counterparts claiming priority therefrom, utility models, patents of importation/confirmation, certificates of invention, and certificates of registration (collectively, “Patents”), (ii) registered or unregistered copyrights and copyrightable works, including databases (or other collections of information, data, works or other materials), packaging artwork and design rights (collectively, “Copyrights”), (iii) Trade Secrets, (iv) computer software (including source code and object code, data files, application programming interfaces, computerized databases and other software-related specifications (collectively, “Software”)), (v) registered and unregistered trademarks, trade names, service marks and service names, brand names, trade dress, logos and certification marks, in each case including all registrations, applications, recordings, renewals and extensions and common law rights relating to any of the foregoing and the goodwill associated with any of the foregoing (“Trademarks”), (vi) Internet domain names, (vii) rights of publicity and other rights to use the names and likeness of individuals, and (viii) claims, causes of action and defenses relating to any of the foregoing; in each case, including registrations, applications, recordings and extensions and common law rights relating to any of the foregoing.

“Insurance Policies” has the meaning ascribed to such term in Section 3.14(a).

“IP Licenses” has the meaning ascribed to such term in Section 3.17(a)(v).

“IRS” has the meaning ascribed to such term in Section 3.15(a)(ii).

“Law” means any statute, law, ordinance, policy, rule, code, regulation, order, or decree of any Governmental Entity and all judicial interpretations thereof.

“Leased Real Property”means the real properties leased under the Real Property Leases.

“Liabilities” means any and all debts, liabilities and obligations, whether accrued or fixed, known or unknown, absolute or contingent, matured or unmatured or determined or determinable.

“Liens” means any liens, pledges, collateral, security interests, easements, mortgages, charges, rights of way, encroachments, gratuitous bailments, options, conditional sales (other than sales in the Ordinary Course of Business) or other types of title retention arrangements, deed of trust, reversion, restrictive covenant, condition or restriction of any kind, including any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership, or other encumbrances.

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“Loss”or “Losses”means, without duplication: (i) any and all claims, actions, causes of action, judgments, awards, settlements, Liabilities, direct losses (daños) and direct damages (perjuicios) but excluding consequential, punitive and exemplary damages; provided, however, that in the case of consequential, punitive and exemplary damages, to the extent that any such damages are actually paid by an Indemnified Party hereunder as a Third Party Claim, then any such damages so paid shall be considered direct damages; (ii) fines, penalties, costs or damages, including reasonable fees and expenses of attorneys; and (iii) all costs and expenses related to Corrective Actions.

“Material Adverse Effect” means any change, effect, event, occurrence, state of facts or development that (A) is or would reasonably be expected to be materially adverse to the business, assets, properties, results of operations or condition (financial or otherwise) of the Subject Companies, taken as a whole; provided, however, that (i) changes in economic or political conditions or the financing, banking, currency or capital markets in general; (ii) changes in Laws or changes in accounting requirements or principles; (iii) changes affecting industries, markets or geographical areas in which the Subject Companies conduct their respective businesses; (iv) the negotiation, announcement, execution, pendency or performance of this Agreement or the consummation of the transactions contemplated by this Agreement, (v) conduct by the Company or any of the Company Subsidiaries prohibited under this Agreement for which any Purchaser gave its prior written consent; (vi) any natural disaster or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) any action required to be taken under any Law or Order, in the case of each such matter described in the foregoing clauses (i) through (vii) shall be deemed not to constitute a “Material Adverse Effect” and shall not be considered in determining whether a “Material Adverse Effect” has occurred except with respect to clauses (i), (ii), (iii) and (v), to the extent that such changes are disproportionately adverse to the business, assets, properties, results of operations or condition, (financial or otherwise) of the Subject Companies taken as a whole as compared to other companies in the industries in which the Subject Companies operate; (B) prevents or materially impairs or delays the ability of the Sellers to perform their obligations under this Agreement or would be reasonably expected to do so; or (C) results in material damages to, or the destruction of, more than 50% (fifty per cent) of the manufacturing capacity at the manufacturing facilities of Empresas Aga or Tepexpan, that are not remedied on or before the Closing Date, then such damage or destruction shall constitute a “Material Adverse Effect”. For the avoidance of doubt, a “Material Adverse Effect” shall be measured only against past performance of the Company and the Company Subsidiaries.

“Mexico” means the United Mexican States.

“NIF” means the Mexican Financial Information Norms (Normas de Información Financiera), as in effect from time to time, issued by the Mexican Board of Financial Information (Consejo Mexicano de Normas de Información Financiera).

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“Non-U.S. Employee Benefit Plans” has the meaning ascribed to such term in Section 3.15(b).

“Notice of Objection” has the meaning ascribed to such term in Section 2.3(c).

“Order” means any judgment, order, injunction, decree, writ, permit or license of any Governmental Entity.

“Ordinary Course of Business”means with respect to any Person, the operation of its business in a manner that is consistent with the past recurring operations and/or practices of such Person.

“Permit” means any approvals, authorizations, consents, licenses, concessions, permits or certificates of a Governmental Entity.

“Permitted Liens” means (i) mechanics', carriers', workmen's, repairmen's or other like Liens arising in the Ordinary Course of Business securing amounts that are not past due; (ii) leases, subleases and similar agreements including those set forth in Section 3.18(b) of the Sellers Disclosure Letter; (iii) Liens for Taxes not yet due and payable or for current Taxes that may thereafter be paid without penalty or which are being contested in good faith and by appropriate proceedings and for which reserves have been established in the Financial Statements when so required pursuant to GAAP; (iv) Liens affecting the real property set forth on Section 3.18 of the Sellers Disclosure Letter; (v) Liens created by non-exclusive licenses granted in the Ordinary Course of Business in any Intellectual Property; and (vi) any Liens in favor of Purchasers created by the actions of Purchasers of any of their Affiliates over the Shares and/or the business.

“Person” means and includes an individual, a partnership, a limited partnership, a limited liability partnership, a joint venture, a corporation, a limited liability company, an association, a trust, an unincorporated organization, a group, a Governmental Entity and any other legal entity.

“Present Fair Salable Value” has the meaning ascribed to such term in Section 4.6.

“Primary Parties” means, collectively, Primary Purchaser and Primary Seller.

“Primary Purchaser” has the meaning ascribed to such term in the Preamble.

“Primary Seller” has the meaning ascribed to such term in the Preamble.

“Proceeding” has the meaning ascribed to such term in Section 3.10.

“Property Taxes” has the meaning ascribed to such term in Section 9.2(b)(i).

“Purchase Price” has the meaning ascribed to such term in Section 2.2(a).

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“Purchase Price Adjustment” has the meaning ascribed to such term in Section 2.3(e).

“Purchase Price Escrow Amount” means the aggregate amount of $37,500,000, which amount is to be deposited by Purchasers with the escrow agent of the Escrow Agreement in accordance with the terms of Section 2.2(d) and Section 2.3(e) and held and released pursuant to the terms and subject to the conditions set forth in this Agreement and the Escrow Agreement.

“Purchaser” has the meaning ascribed to such term in the Preamble.

“Purchaser Indemnitees” has the meaning ascribed to such term in Section 8.2.

“Purchasers' Proposed Calculations”has the meaning ascribed to such term in Section 2.3(b).

“Real Property Leases” has the meaning ascribed to such term in Section 3.18(b)(ii).

“Related Party Transactions” means any Contracts of any kind between any of the Subject Companies, on the one hand, and any officer, shareholders, employee or director of any of the Subject Companies or any Affiliate thereof, on the other hand.

“Related Person” has the meaning ascribed to such term in Section 5.14(a).

“Release” means disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, emptying and seeping into or upon any land or water or air or otherwise entering into the Environment.

“Released Parties” has the meaning ascribed to such term in Section 5.14(a).

“Representatives” of any Person means such Person's directors, managers, officers, agents, attorneys, consultants, advisors or other Persons acting on behalf of such Person.

“SAR” means the Law of Systems of Savings for the Retirement (Ley de los Sistemas de Ahorro para el Retiro).

“Seller” has the meaning ascribed to such term in the Preamble.

“Seller-Related Persons” has the meaning ascribed to such term in Section 8.5(d).

“Sellers Disclosure Letter” has the meaning ascribed to such term in the first paragraph of Article III.

“Seller Indemnitees” has the meaning ascribed to such term in Section 8.3.

“September 2012 Balance Sheet” has the meaning ascribed to such term in Section 3.8(a).

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“Shares” has the meaning set forth in the Recitals.

“Short Period” has the meaning ascribed to such term in Section 9.2(a).

“Short Period Return” has the meaning ascribed to such term in Section 9.2(a).

“Solvent” has the meaning ascribed to such term in Section 4.6.

“Signing Funded Indebtedness” means the amount of $465,595,000, calculated as described in Section 1.1(d) of the Sellers Disclosure Letter.

“Straddle Period” has the meaning ascribed to such term in Section 9.2(b).

“Subject Companies” means, collectively, the Company and Conaxe together with all of the Company's Subsidiaries, which are listed in Section 1.1(e) of the Sellers Disclosure Letter.

“Subsidiary”, with respect to any Person, means (i) any entity more than fifty percent (50%) of the equity or stock of any class or classes of which having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation is owned by such Person directly or indirectly through one or more Subsidiaries of such Person; and (ii) any partnership, association, joint venture, limited liability company or other entity in which such Person directly or indirectly through one or more Subsidiaries of such Person has more than a fifty percent (50%) equity interest.

“Target Working Capital” means the amount of $216,252,440 calculated as described in Section 1.1(b) of the Sellers Disclosure Letter.

“Taxes” means all taxes, assessments, charges, duties, fees, levies or other governmental charges including all federal, state, local, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, sales, import, use, value added, occupation, property, excise, severance, stamp, license, payroll, social security, withholding and other taxes, including in Mexico any payments due under any social security Laws including those related to the Mexican Social Security Institute (Instituto Mexicano del Seguro Social), the National Institute for Workers' Housing (Instituto del Fondo Nacional de la Vivienda para los Trabajadores) and the Retirement Savings System (Sistema de Ahorro para el Retiro), as well as any assessments, charges, duties, compensatory quotas, countervailing duties, fees, levies or other governmental charges of any kind whatsoever (whether payable directly or by withholding and whether or not requiring the filing of a Return), all estimated taxes, deficiency assessments, additions to tax, penalties, updates (actualizaciones) and interest thereon.

“Tax Return” means all returns, statements, forms and reports for Taxes that are required to be filed under applicable Law.

“Third Party Claim” has the meaning ascribed to such term in Section 8.7(a).

“Trade Secrets” means, collectively, any trade secrets and other confidential information, including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, molds, research

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and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information.

“Update Schedule” has the meaning ascribed to such term in Section 5.8.

“U.S.” or “United States” means the United States of America or any political subdivision thereof.

“U.S.Employee Benefit Plans” has the meaning ascribed to such term in Section 3.15.

“U.S. Multiemployer Plan” has the meaning ascribed to such term in Section 3.15(a)(i).

“Working Capital Adjustment” has the meaning ascribed to such term in Section 2.3(b).

Section 1.2    Construction.

In this Agreement, unless the context otherwise requires:

(i)words expressed in the singular number shall include the plural and vice versa; words expressed in the masculine shall include the feminine and neuter gender and vice versa;

(ii)references to Articles, Sections, Exhibits, Annexes, Sections of the Sellers Disclosure Letter, the Preamble and Recitals are references to articles, sections, exhibits, annexes, disclosure schedules, the preamble and recitals of this Agreement, and the descriptive headings of the several Articles and Sections of this Agreement and the Sellers Disclosure Letter (as applicable) are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement;

(iii)whenever this Agreement refers to a number of days, that number shall refer to calendar days unless Business Days are specified and whenever any action must be taken under this Agreement on or by a day that is not a Business Day, then that action may be validly taken on the next day that is a Business Day;

(iv)the words “hereof”, “herein”, “hereto” and “hereunder”, and words of similar import, shall refer to this Agreement as a whole and not to any provision of this Agreement;

(v)this “Agreement” or any other agreement or document shall be construed as a reference to this Agreement or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended or supplemented;

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(vi)“include”, “includes”, and “including” are deemed to be followed by the words “without limitation” whether or not they are in fact followed by such words or words of similar import;

(vii)the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or thing extends, and such phrase shall not mean simply “if”;

(viii)references to “Dollars”, “dollars” or “$”, without more are to the lawful currency of the United States of America;

(ix)references to “Pesos”, “pesos” or “Ps$”, without more are to the lawful currency of Mexico;

(x)references to NIF or GAAP in this Agreement shall be understood and construed as NIF or GAAP as the case may be, applied on a basis consistent with the Financial Statements and the Accounting Principles; providedhowever that, solely with respect to the calculation of the Consolidated Current Assets, Consolidated Current Liabilities, Working Capital Adjustment, the Closing Funded Indebtedness, the Closing Cash, the Closing Balance Sheet, the Closing Statement, the Purchasers' Proposed Calculations, the Notice of Objection, the Disputed Amounts and the Expert's resolution of the Disputed Amounts and the Purchase Price Adjustment, in the event of any conflict between the Accounting Principles and GAAP or NIF, as the case may be, the Accounting Principles shall control;

(xi)for purposes of the calculations set forth in this Agreement, to the extent any of the Subject Companies' accounting is kept in Pesos or any Loss may be materialized in Pesos, the calculation of any of the thresholds set forth in Dollars in this Agreement shall be made using the Exchange Rate (as defined below) published on the date of execution of this Agreement (or if no Exchange Rate is published on the date of execution of this Agreement, the last Exchange Rate published prior to the execution of this Agreement);

(xii)references to the Primary Seller shall be construed as to the Primary Seller acting on behalf and for the benefit of Sellers, in the capacity of Primary Seller as agent (comisionista mercantil) of Bevisep, S.A. de C.V., pursuant to an in accordance with Article 273 of the Commerce Code (Código de Comercio) and therefore, Bevisep, S.A. de C.V., hereby approves, ratifies and confirms any and all acts performed by Primary Seller on its behalf pursuant to and in connection with this Agreement and the Escrow Agreement; and

(xiii)to the extent that a representation or warranty of Sellers contained in Article III of this Agreement addresses a particular issue with specificity, and no breach by Sellers exists under such specific representation or warranty, Sellers shall not be deemed to be in breach of any other representation or warranty (with respect to such issue) that addresses such issue with less specificity than the specific representation or warranty.

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Section 1.3    Annexes, Exhibits and the Disclosure Letter. The Annexes, Exhibits and the Sellers Disclosure Letter are incorporated into and form an integral part of this Agreement.

Section 1.4    Knowledge. When any representation, warranty, covenant or agreement contained in this Agreement is expressly qualified by reference to (i) the “Knowledge of Sellers” or words of similar import, it shall mean the knowledge of the individuals set forth in Section 1.4(a) of the Sellers Disclosure Letter after due and reasonable inquiry; and (ii) the “Knowledge of Purchasers” or words of similar import, it shall mean the knowledge of the individuals set forth in Section 1.4(b) of the Sellers Disclosure Letter after due and reasonable inquiry.

Article II

SALE OF SHARES

Section 2.1    Sale of Shares.        On the terms, and subject to the satisfaction of the Conditions Precedent (condiciones suspensivas) set forth in Article VI of this Agreement, Sellers hereby agree to sell to Purchasers, and Purchasers (either directly or through a previously identified Affiliate of Purchasers and previously approved by Sellers, which approval shall not be unreasonably withheld) hereby agree to purchase from Sellers, at the Closing the Shares, free and clear of all Liens and together with all accrued rights and benefits thereto. At the Closing, Sellers shall endorse “in property” (endoso en propiedad) the stock certificates representing the Shares in favor of Purchasers. Additionally, Sellers shall take such action as is necessary and legally required to reflect the sale, assignment, transfer, endorsement and delivery of the Shares, free and clear of all Liens, on the books and records of the Company.

Section 2.2    Purchase Price; Delivery of Funds and other payments.

(a)On the terms and subject to the conditions of this Agreement, Sellers agree to sell to Purchasers, and Purchaser agrees to purchase from Sellers, the Shares, free and clear of any Liens, for a purchase price of $1,874,490,000 (the “Purchase Price”). The Purchase Price is subject to adjustment pursuant to Section 2.3.

(b)At the Closing, Purchasers shall pay to Sellers an amount equal to (i) $1,743,265,000 less (ii) the Golden Parachute Obligations as a partial payment of the Purchase Price (the “Closing Payment”). The Closing Payment shall be made by wire transfer of immediately available funds to an account designated by each of the Sellers in writing to Purchasers at least three (3) Business Days prior to the Closing. The Closing Payment and any Purchase Price Adjustment shall be allocated among Sellers (with respect to their Shares in the Company) as set forth on Exhibit B.

(c)On or before the Closing Date, Sellers shall pay any and all Company Transaction Expenses.

(d)At the Closing, Purchasers shall deliver to the escrow agent of the Escrow Agreement the Escrow Amount by wire transfer of immediately available funds.

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(e)On the Closing Date, the Purchasers, on the name and behalf of the Company, may be required to pay to the holders of the Closing Funded Indebtedness an amount sufficient to repay all such Closing Funded Indebtedness.

Section 2.3    Final Purchase Price.

(a)The Purchase Price shall be adjusted and finally determined upwards or downwards (the “Final Purchase Price”), by (i) subtracting or adding, if any, the Working Capital Adjustment, (ii) subtracting or adding, as the case may be, the difference between the Closing Funded Indebtedness and the Signing Funded Indebtedness, and (iii) adding the Closing Cash.

(b)Promptly after the Closing Date, and in any event not later than sixty (60) days following the Closing Date, Primary Purchaser shall prepare and deliver to Primary Seller (i) an unaudited consolidated balance sheet of the Company and the Company's Subsidiaries as of 11:59 P.M. on the Business Day immediately prior to the Closing Date prepared in accordance with NIF (the “Closing Balance Sheet”); and (ii) a statement (the “Closing Statement”) setting forth Purchasers' good faith calculations (the “Purchasers' Proposed Calculations”) of (A) the amount of the Closing Cash; (B) the Closing Working Capital; (C) the amount, if any, by which the Target Working Capital differs from the Closing Working Capital (the “Working Capital Adjustment”); (D) the Funded Indebtedness of the Company as of 11:59 P.M. on the Business Day immediately prior to the Closing Date (the “Closing Funded Indebtedness”); (E) the difference between the Closing Funded Indebtedness and the Signing Funded Indebtedness; and (F) a calculation of the Final Purchase Price based on such amounts. Purchasers' Proposed Calculations shall be made in accordance with NIF. Purchasers shall cause the Subject Companies and their personnel to provide Primary Seller with prompt and reasonable access to the Subject Companies' auditors and accounting and other personnel and to the books and records of the Subject Companies and any other document or information reasonably requested by Primary Seller (including the workpapers of the Subject Companies' auditors) in order to allow Primary Seller to review the Purchasers' Proposed Calculations.

(c)In the event that Primary Seller does not object to the Closing Balance Sheet or Purchasers' Proposed Calculations by written notice of objection (the “Notice of Objection”) delivered to Primary Purchaser within forty-five (45) days after Primary Seller's receipt of the Closing Balance Sheet and Purchasers' Proposed Calculations, the calculation of the Final Purchase Price pursuant to Purchasers' Proposed Calculations shall be deemed final and binding. A Notice of Objection under this Section 2.3(c) shall set forth in reasonable detail Primary Seller's alternative calculations, if any, of (i) the amount of the Closing Cash; (ii) the Closing Working Capital and the Working Capital Adjustment calculated by reference thereto; (iii) the Closing Funded Indebtedness; and (iv) a calculation of the Final Purchase Price based on such amounts.

(d)If Primary Seller delivers a Notice of Objection to Primary Purchaser within the forty-five (45) day period referred to in Section 2.3(c), then any element of Purchasers' Proposed Calculations that is not in dispute on the date such Notice of Objection is given shall be treated as final and binding and any dispute (all such amounts, the “Disputed Amounts”) shall be resolved as set forth in this Section 2.3(d):

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(i)the Primary Parties shall promptly endeavor in good faith to resolve the Disputed Amounts listed in the Notice of Objection. If a written agreement determining the Disputed Amounts has not been reached within ten (10) Business Days after the date of receipt by Primary Purchaser from Primary Seller of the Notice of Objection, the resolution of such Disputed Amounts shall be submitted to any partner of KPMG Cardenas Dosal, S.C., different than the partners that are currently in charge of the external audit of the financial information of the Company (the “Expert”), which the Primary Parties hereby jointly and irrevocably appoint;

(ii)the Primary Parties shall use their commercially reasonable efforts to cause the Expert to render a decision in accordance with this Section 2.3(d) within thirty (30) days of the submission of the Disputed Amounts, to the Expert. For the purposes hereof, upon submission of the Disputed Amounts to the Expert, the Primary Parties shall provide to the Expert all documents that each of them deems necessary, including a statement of reasons explaining their corresponding position. Such documents shall be delivered no later than fifteen (15) days following submission for Expert's intervention. Within ten (10) days following the receipt of such documents, the Expert may request the Primary Parties to provide further information, in the understanding that such additional information shall only be requested for clarifying purposes. During such term, the Expert may, set up meetings with the Primary Parties as the Expert may deem reasonably necessary;

(iii)the determination made by the Expert shall be final and binding upon each Party hereto in terms of article 2252 of the Federal Civil Code (Código Civil Federal); accordingly, the Final Purchase Price shall be recalculated based upon the final determination of the Expert with respect to the Disputed Amounts and the Final Purchase Price, as so recalculated, shall be deemed to be final and binding;

(iv)if the Primary Parties submit any Disputed Amounts to the Expert for resolution, Sellers and Purchasers shall each pay their own costs and expenses incurred under this Section 2.3(d). Sellers shall be responsible for that fraction of the fees and costs of the Expert where (A) the numerator is the absolute value of the difference between Primary Seller's aggregate position with respect to the Final Purchase Price and the Final Purchase Price as recalculated based upon Expert's final determination with respect to the Disputed Amounts; and (B) the denominator is the absolute value of the difference between Primary Seller's aggregate position with respect to the Final Purchase Price and Primary Purchaser's aggregate position with respect to the Final Purchase Price, and Purchasers shall be responsible for the remainder of such fees and costs; and

(v)the Primary Parties shall use their commercially reasonable efforts to cause the Expert's determination of the Disputed Amounts to be no less than the lesser of the amount claimed by either Primary Seller or Primary Purchaser, and no greater than the greater of the amount claimed by either Primary Seller or Primary Purchaser; provided that, if, notwithstanding the commercially reasonable efforts of Primary Seller or Primary Purchaser, (i) the Expert's determination of any Disputed Amount is less than the lesser of the amounts claimed by either Primary Seller or Primary Purchaser, then such disputed amount shall be deemed to be the lesser of the amounts claimed by either Primary Seller or Primary Purchaser or (ii) the Expert's determination of any Disputed Amount is more than the greater of the amounts claimed by either Primary Seller or Primary Purchaser, then such disputed amount shall be deemed to be the greater of the amounts claimed by either Primary Seller or Primary Purchaser.

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(e)Upon the determination, in accordance with Sections 2.3(c) or Section 2.3(d) hereof, of the Final Purchase Price, Primary Seller (on behalf of Sellers) or Primary Purchaser (on behalf of Purchasers), as the case may be, shall make the payment required by this Section 2.3(e). The amount payable by Sellers or Purchasers pursuant to this Section 2.3(e) is referred to herein as the “Purchase Price Adjustment” and shall be treated as an adjustment to the Purchase Price for federal, state, local and foreign income Tax purposes. For purposes of the calculations set forth herein, to the extent any of the Subject Companies' accounting is kept in Pesos and therefore the calculations set forth herein are made in Pesos, any Purchase Price Adjustment shall be converted into Dollars using the Exchange Rate to satisfy obligations denominated in foreign currency payable in Mexico (Tipo de cambio para solventar obligaciones denominadas en moneda extranjera) published in the Federal Official Gazette (Diario Oficial de la Federación) by the Mexican Central Bank(Banco de México) (the “Exchange Rate”) on the Closing Date (or if no Exchange Rate is published on the Closing Date, the last Exchange Rate published prior to the Closing Date). Accordingly:

(i)if the Final Purchase Price is greater than the Purchase Price, then within three (3) Business Days after the determination of the Final Purchase Price (a) the Primary Parties shall cause the escrow agent to immediately release to Primary Seller on behalf of Sellers the Purchase Price Escrow Amount in full and (b) Primary Purchaser shall pay on behalf of Purchasers an amount equal to the difference between the Purchase Price and the Final Purchase Price. Any amount to be paid by Primary Purchaser on behalf of Purchasers pursuant to this Section 2.3(e)(i) shall be paid by wire transfer of immediately available funds to one or more accounts designated by Primary Seller on behalf of Sellers in writing to Primary Purchaser promptly after the final determination of the Final Purchase Price; and

(ii)if the Final Purchase Price is less than the Purchase Price, then within three (3) Business Days after the determination of the Final Purchase Price, the Primary Parties shall cause the escrow agent to immediately release from the Escrow (a) to Primary Purchaser from the Purchase Price Escrow Amount, an amount equal to the difference between the Purchase Price and the Final Purchase Price; and (b) to Primary Seller on the behalf of Sellers the balance, if any, of the Purchase Price Escrow Amount. In the event that the Purchase Price Escrow Amount is less than the Purchase Price Adjustment determined pursuant to this Section 2.3(e)(ii), then Primary Seller on behalf Sellers shall pay or cause to be paid to Primary Purchaser on behalf of Purchasers such difference. Any amount to be paid by Primary Seller on behalf of Sellers pursuant to this Section 2.3(e)(ii) shall be paid by wire transfer of immediately available funds to an account designated by Primary Purchaser in writing to Primary Seller promptly after the final determination of the Final Purchase Price.

Section 2.4    Closing; Closing Deliverables.

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(a)Subject to the satisfaction or waiver of all of the conditions set forth in Article VI, the sale referred to in Section 2.1 hereof (the “Closing”) shall take place in Mexico City, Federal District, Mexico, at 10:00 A.M. at the offices of White & Case, S.C., within three (3) Business Days, after the last of the conditions set forth in Article VI is satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions), or at such other time, date or place as the Primary Parties shall agree in writing. Such date is herein referred to as the “Closing Date”.

(b)At the Closing, Primary Seller shall deliver or cause to be delivered to Primary Purchaser:

(i)certificates representing the Shares, duly endorsed in property (endoso en propiedad) by each of the respective Sellers;

(ii)a certified copy of the share ledger of the Company reflecting: (A) the shareholding structure of the Company on the Closing Date immediately before the transfer of the Shares; (B) the transfer of the Shares; and (C) the shareholding structure of the Company on the Closing Date immediately after the transfer of the Shares to Purchasers;

(iii)a certificate signed by Sellers, dated as of the Closing Date, confirming the matters set forth in Section 6.2(i) and Section 6.2(ii);

(iv)counterparts to the Escrow Agreement, duly executed by Sellers and the escrow agent;

(v)resignations of the members of the board of directors and statutory auditor (comisario) of the Company and all Company Subsidiaries;

(vi)copies of all consents and waivers referred to in Section 3.2 hereof;

(vii)executed and fully effective and valid releases in a form attached hereto as Exhibit C from the Affiliates of Sellers set forth in Section 2.4(b) of the Sellers Disclosure Letter; and

(viii)evidence reasonably satisfactory to Purchasers that the shares of capital stock identified in Section 2.4(b)(viii) of the Sellers Disclosure Letter have been transferred to Conaxe.

(c)At the Closing, Primary Purchaser shall deliver to Primary Seller:

(i)evidence of payment by wire transfer of immediately available funds of the Closing Payment;

(ii)upon receipt of the original duly endorsed certificates representing the Shares, a certification evidencing such receipt;

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(iii)a certificate signed by an authorized officer of each Purchaser, dated as of the Closing Date, confirming the matters set forth in Section 6.3(i) and Section 6.3(ii) hereof;

(iv)a counterpart to the Escrow Agreement, duly executed by the Purchasers; and

(v)a counterpart to the minutes of the shareholders' meeting of each of the Subject Companies, granting in favor of each director or sole administrator and statutory auditors or equivalents, the broadest release permitted by Law in respect of their legal performance of their duties and obligations as directors and statutory auditors, as applicable; (B) the revocation of the powers of attorney as agreed upon between Sellers and Purchasers; and (C) the appointment of new members of the board of directors and new statutory auditors.

Article III

REPRESENTATIONS AND WARRANTIES OF SELLERS

Except as set forth in the disclosure letter delivered by Sellers to Primary Purchaser (the “Sellers Disclosure Letter”) concurrently with the execution of this Agreement (it being agreed that any matter disclosed pursuant to any Section of the Sellers Disclosure Letter shall be deemed disclosed for purposes of any other Section of the Sellers Disclosure Letter to the extent the applicability of the disclosure to such other Section is reasonably apparent on the face of such disclosure), each Seller severally and not jointly represents and warrants to Purchasers as of the date hereto and as of the Closing as follows:

Section 3.1    Organization.

Each Seller is a company duly organized and existing under the laws of Mexico.

Section 3.2    Authorization; Non-contravention.

(a)Such Seller has the requisite power and authority and has taken all action necessary to execute and deliver this Agreement, the Escrow Agreement and all other instruments and agreements to be delivered by such Seller as contemplated hereby and thereby, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by such Seller of this Agreement, the Escrow Agreement and all other instruments and agreements to be delivered by such Seller as contemplated hereby and thereby, the consummation by such Seller of the transactions contemplated hereby and thereby and the performance of its obligations hereunder and thereunder have been and, in the case of documents required to be delivered at Closing, will be, duly authorized and approved. This Agreement and the Escrow Agreement have been, and all other instruments and agreements to be executed and delivered by such Seller as contemplated hereby and thereby will be, duly executed and delivered by such Seller. Assuming that this Agreement and the Escrow Agreement constitute legal, valid and binding obligations of each other party hereto, this Agreement and the Escrow Agreement constitute legal, valid and binding obligations of such Seller enforceable against such Seller in accordance with their terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors' rights generally.

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Assuming that all other instruments and agreements to be delivered by such Seller as contemplated hereby and thereby constitute legal, valid and binding obligations of each other party hereto, such instruments and agreements will constitute legal, valid and binding obligations of such Seller enforceable against such Seller in accordance with their terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors' rights generally.

(b)The execution of this Agreement and all other instruments and agreements to be delivered by such Seller as contemplated hereby do not, and the consummation of the transactions contemplated hereby and thereby will not, except, in the case of clauses (ii)-(iv) below, to the extent that would not be material to the Subject Companies (i) conflict with any of the provisions of the articles of incorporation, bylaws, trust agreement or other equivalent charter documents of such Seller or any of the Subject Companies; (ii) create any Lien (other than Permitted Liens) upon any of the properties or assets of such Seller or the Subject Companies; (iii) conflict with or result in a breach of, or constitute a default under, or, other than as provided in Section 3.2(b) of the Sellers Disclosure Letter, result in the acceleration of any obligation or loss of any benefits under, any Company Contract, Company Permit or other instrument to which such Seller or any of the Subject Companies is a party or by which any of its property or asset are bound; or (iv) subject to (A) the applicable Antitrust Laws and (B) receipt of the consents, approvals, authorizations, declarations, filings and notices referred to in Section 3.2(b) of the Sellers Disclosure Letter, contravene any Law or any Order applicable to such Seller, any Subject Company or by which any properties or assets of such Seller or any Subject Company are bound.

Section 3.3    Ownership of Shares. Such Seller has good and valid title to the Shares set forth opposite such Seller's name in Section 3.3 of the Sellers Disclosure Letter free and clear of all Liens, and is the record and beneficial owner thereof. Such Shares were acquired by such Seller in compliance with applicable Law. Other than this Agreement, there is no outstanding Contract with any Person for such Person to purchase, redeem or otherwise acquire any outstanding shares of the capital stock of any of the Subject Companies. At the Closing, such Seller will convey good and valid title to such Shares, free and clear of all Liens, Orders, Contracts or other limitations whatsoever.

Section 3.4    The Subject Companies.

(a)The Subject Companies are companies duly incorporated, validly existing and in good standing under the Laws of the jurisdiction in which they were incorporated and have the requisite corporate power and authority and all necessary Permits to own, lease and operate their properties and to carry on their businesses as now being conducted. Each Subject Company is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that are not material to such Subject Company not qualified, licensed or in good standing.

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(b)Except as provided in Section 3.4(b) of the Sellers Disclosure Letter, there are no restrictions of any kind that prevent or restrict the payment of dividends or other distributions by any of the Subject Companies other than those imposed by the Laws of general applicability of their respective jurisdictions of organization.

(c)Except for the outstanding dividends and capital reimbursements as provided in Section 3.4(c) of the Sellers Disclosure Letter, there are no dividends payable by any of the Subject Companies or contributions for future capital increases in favor of any of the Subject Companies.

Section 3.5    Capitalization of the Company. The authorized capital stock of the Company is set forth in Section 3.5(a) of the Sellers Disclosure Letter hereto and conforms to the information entered into the Company's stock register and capital variations register. The Shares constitute all the issued and outstanding equity interests of the Company and are represented by stock certificates validly issued by the Company. The Shares have been duly authorized and validly issued and subscribed and are fully paid and are non-assessable, and are not subject to, and were not issued in violation of any preemptive rights or other similar rights. Except for the Shares, no shares of capital stock or other equity interests of the Company are issued, reserved for issuance or outstanding. None of the Company nor any Seller is a party to any outstanding or authorized option, warrant, right (including any preemptive right), subscription, claim of any character, agreement, obligation, convertible or exchangeable securities, or other commitments contingent or otherwise, relating to the capital stock or other equity or voting interests in the Company, pursuant to which a Seller or the Company is or may become obligated to issue, deliver or sell or cause to be issued, delivered or sold, shares of capital stock of or other equity or voting interests in, the Company or any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of or other equity or voting interests in the Company. There are no outstanding or authorized (i) stock appreciation, phantom stock, profit participation or similar rights with respect to the capital stock of, or other equity or voting interests in the Company, (ii) dividends payable by the Company or (iii) bonds, debentures, notes or other indebtedness the holders of which have the right to vote (or convertible into, exchangeable for, or evidencing the right to subscribe for or acquire securities having the right to vote) with the stockholders of the Company on any matter, other than those set forth in Section 3.5 of the Sellers Disclosure Letter. There are no irrevocable proxies and no voting agreements with respect to any capital stock of, or other equity or voting interests in, the Company.

Section 3.6    Capitalization of the Company's Subsidiaries.

(a)The authorized capital stock and owners of each of the Company's Subsidiaries is set forth in Section 3.6(a) of the Sellers Disclosure Letter hereto and conforms to the information entered into each such Subsidiary's stock register and capital variations register. The shares set forth in Section 3.6(a) of the Sellers Disclosure Letter constitute all the issued and outstanding equity interests of each of the Company's Subsidiaries and are represented by stock certificates validly issued by each such Subsidiary. Such shares have been duly authorized and validly issued and subscribed and are fully paid and non-assessable, and are not subject to, and were not issued in violation of any preemptive rights or other similar rights. The Company or one or more of the Company's Subsidiaries is the record and beneficial holder of all or the majority of the issued and outstanding equity interests of the Company's Subsidiaries as set forth on Section 3.6(a) of the Sellers Disclosure Letter, free and clear of all Liens. No shares of capital stock or other equity interests of each of the Company's Subsidiaries are issued, reserved for issuance or outstanding. None of the Company, such Seller nor any of the Company's Subsidiaries are a party to any outstanding or authorized option, warrant, right (including any preemptive right), subscription, claim of any character, agreement, obligation, convertible

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or exchangeable securities, or other commitments contingent or otherwise, relating to the capital stock or other equity or voting interests in the Company's Subsidiaries, pursuant to which any of the Company, such Seller or any of the Company's Subsidiaries is or may become obligated to issue, deliver or sell or cause to be issued, delivered or sold, shares of capital stock of or other equity or voting interests in, any of the Company's Subsidiaries or any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire, any shares of the capital stock of or other equity or voting interests in any of the Company's Subsidiaries.

(b)There are no outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights with respect to the capital stock of, or other equity or voting interests in, any of the Company's Subsidiaries. None of the Company's Subsidiaries have any authorized or outstanding bonds, debentures, notes or other indebtedness the holders of which have the right to vote (or convertible into, exchangeable for, or evidencing the right to subscribe for or acquire securities having the right to vote) with the stockholders of any of the Company's Subsidiaries on any matter. There are no irrevocable proxies and no voting agreements with respect to any capital stock of, or other equity or voting interests in, any of the Company's Subsidiaries. Section 3.6(b) of the Sellers Disclosure Letter sets forth all shares or other equity interests that are owned by the Company or the Subject Companies that are not Subsidiaries and all such shares or other equity interests are owned by them free and clear of any and all Liens.

Section 3.7    Consents and Approvals. Assuming all required Antitrust Filings are made and clearances and/or approvals thereunder received, and the Foreign Investment Approval is obtained, and that any and all filings, authorizations and other consents applicable to the Purchasers are made and obtained, no consent of or filing with any Governmental Entity or any other Person, must be obtained or made in connection with the execution and delivery of this Agreement by such Seller or the consummation by such Seller of the transactions contemplated by this Agreement, except for those set out in Section 3.7 of the Sellers Disclosure Letter.

Section 3.8    Financial Statements; Undisclosed Liabilities.

(a)The Company has furnished Purchasers with (i) the audited consolidated balance sheet of the Company and the Company's Subsidiaries as of December 31, 2011 (the “Balance Sheet Date”), December 31, 2010 and December 31, 2009, the related audited consolidated statements of income, stockholders' equity and cash flows, retained earnings and changes in financial position for the fiscal years ended December 31, 2011, December 31, 2010 and December 31, 2009 (collectively, the “Audited Financial Statements”); and (ii) the interim unaudited consolidated balance sheet of the Company and the Company's Subsidiaries as of September 30, 2012 (the “September 2012 Balance Sheet”), and the related interim unaudited consolidated statements of income, stockholders' equity and cash flows, retained earnings and changes in financial position for the nine (9) months then ended. The consolidated financial statements referred to above, including the footnotes thereto (collectively, the “Financial Statements”), except as described therein, and in the case of the September 2012 Balance Sheet, except for the absence of notes thereto and subject to normal year-end audit adjustments, have been prepared in accordance with NIF.

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(b)The Audited Financial Statements fairly present, in all material respects and unless otherwise specified therein, the consolidated financial position of the Company and the Company's Subsidiaries, taken as a whole, as of the Balance Sheet Date, December 31, 2010 and December 31, 2009, respectively, and the related consolidated statements of income, stockholders' equity and cash flows fairly present, in all material respects, the consolidated results of operations, stockholders' equity and cash flows of the Company and the Company's Subsidiaries, taken as a whole, for the fiscal years then ended unless otherwise specified therein. The September 2012 Balance Sheet of the Company and the Company's Subsidiaries and the related interim unaudited consolidated statement of income fairly present, in all material respects, the financial position of the Company and the Company's Subsidiaries, taken as a whole, as of the date thereof and the related consolidated statement of income fairly presents, in all material respects, the results of the operations of the Company and the Company's Subsidiaries, taken as a whole, for the period indicated.

(c)Except as set forth in Section 3.8(c) of the Sellers Disclosure Letter, the Subject Companies have no Liabilities that are not already reflected in the Financial Statements in compliance with NIF, except for Liabilities incurred in the Ordinary Course of Business.

(d)Since the Balance Sheet Date, no event has occurred which has resulted in, or is likely to result in, a Material Adverse Effect.

Section 3.9    Compliance with Laws; Permits.

(a)The Subject Companies have conducted their respective businesses in compliance in all material respects with all applicable Laws, and have not received written notice of any material violation or non-compliance thereof.

(b)Except as set forth in Section 3.9(b) of the Sellers Disclosure Letter, (i) each of the Subject Companies owns or possesses, and is in compliance with all material Permits which are necessary to lawfully enable it to carry on its business and to own, lease, use or operate its assets and properties (each, a “Company Permit”), free and clear of any Liens (other than Permitted Liens); (ii) all of such Company Permits are valid, binding and in full force and effect; (iii) the Subject Companies have not received any written notice or claim from any Governmental Entity or other Person that asserts, or raises the possibility of assertion of, any noncompliance with any Company Permit and, no condition or state of facts exists that would provide a basis for any such assertion; and (iv) no loss, revocation, withdrawal, suspension, cancellation, termination of, or modification or expiration of any such Company Permits is pending or reasonably foreseeable (other than expiration upon the end of any term).

(c)No Subject Company or, to the Knowledge of Sellers, any of the Subject Companies' directors or employees or any other Person acting on behalf of any such Person has, with respect to the business of the Subject Companies, directly or indirectly, (1) in the case of the Subject Companies operating in the U.S. identified in Section 3.9(c) of the Sellers Disclosure Letter, taken any action that would cause such Subject Companies to be in violation of the U.S. Foreign Corrupt Practices Act of 1977, (2) in the case of the Subject Companies operating in Mexico identified in Section 3.9(c) of the Sellers Disclosure Letter, taken any action that would cause any of such Subject Companies to be in violation of the applicable anti-bribery Laws of Mexico, including any applicable Law of any locality, including any Law promulgated by the Mexican Government to implement the OECD Convention on Combating Bribery of Foreign Public Officials in Business Transactions, and (3) in the case of Subject Companies operating outside the U.S. and

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Mexico, taken any action that would cause such Company Companies to be in violation of the applicable anti-bribery Laws of the places where such Subject Companies operate or any other Law applicable to the conduct of business with Governmental Entities or agents or representatives thereof.

Section 3.10    Litigation. Except as set forth in Section 3.10 of the Sellers Disclosure Letter, the Subject Companies are not party to, and have not received written notice of, any action, claim, demand, proceeding, audit or investigation of any nature, whether civil, criminal, administrative, regulatory or otherwise, by or before any court, tribunal, arbitrator or other Governmental Entity or any other Person (a “Proceeding”), and no such Proceeding is pending or, to the Knowledge of the Sellers, threatened (i) against, relating to or involving any of the Subject Companies or any properties or assets (including Permits) owned, leased or used by the Subject Companies; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the transactions contemplated hereby, and to the Knowledge of the Sellers, no event has occurred or condition or circumstance exists that may give rise to or serve as a basis for the commencement of any Proceeding referenced in this Section. No Proceedings, whether voluntary or involuntary, are pending or to the Knowledge of the Sellers threatened against any of the Subject Companies or any Seller, nor are any of the Subject Companies or any Seller contemplating any such Proceedings, under the bankruptcy Laws and/or receivership or similar Laws of the United States, or any State thereof, or of any other country or jurisdiction.

Section 3.11    Tax Matters. Except as disclosed in Section 3.11 of the Sellers Disclosure Letter:

(a)(i) The Subject Companies have timely filed all Tax Returns that they are required to file, and have paid all Taxes thereon as owing; (ii) the Subject Companies have properly and timely withheld, collected and deposited all Taxes that are required to be withheld, collected and deposited under Law; (iii) all statutory Tax reports have been timely filed before the Tax Authorities by the external auditors of the Subject Companies, and the Subject Companies have maintained all documents and records relating to such Tax Returns as required by Law; and (iv) all Tax Returns for all open periods filed by the Subject Companies correctly reflect in all material respects the matters required to be reported therein including, where appropriate, income, expenses, deductions, credits, loss carryovers and Taxes due.

(b)Section 3.11 (b) of the Sellers Disclosure Letter lists all Income Tax Returns filed with respect to the Subject Companies for taxable periods ended on or after December 31, 2007, indicates those Income Tax Returns that have been audited, and indicates those Income Tax Returns that currently are the subject of audit. Sellers have delivered to Purchasers correct and complete copies of all federal Income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Subject Companies since December 31, 2007.

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(c)None of the Subject Companies has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(d)None of the Subject Companies is a party to any Income Tax allocation or sharing agreement.

(e)For all transactions between the Subject Companies and any non-resident Person with whom any of the Subject Companies was not dealing at arm's length during a taxation year commencing after 1998 and ending on or before the Closing Date, each of the Subject Companies has made or obtained records or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the Income Tax Act of Canada.

(f)When so required, each Subject Company is duly registered under subdivision (d) of Division V of Part IX of the Excise Tax Act of Canada with respect to the goods and services tax and harmonized sales tax and the registration of the Company is 10198-0837-RC0002.

(g)There are no Tax Audits pending or, to the Knowledge of Sellers, threatened with respect to any Tax Returns or Taxes due from (whether as a result of an assertion of a deficiency or otherwise) of any of the Subject Companies.

(h)The Financial Statements provide for reserves and allowances, in each case adequate to satisfy all Taxes payable (including Taxes accrued or accruable but not yet required to be paid) relating to the Subject Companies for all taxable periods or portions thereof through the Closing.

(i)None of the Subject Companies has received a Tax ruling or entered into a closing agreement or other agreement relating to Taxes with any Governmental Entity which would apply after the Closing Date.

(j)To the Knowledge of Sellers, all transactions entered into by any of the Subject Companies with any related party during any period for which the statute of limitations for any Tax has not expired or for which a taxable year remains open have been carried out in accordance with applicable Tax Laws, and all of the Subject Companies have complied with all applicable transfer pricing disclosure, documentation, reporting or other requirements.

(k)Sellers have delivered to the Company the documents described in Article 26, Section XI of the Mexican Federal Fiscal Code (Código Fiscal de la Federación) in order to be registered as shareholders of the Company, and the Company does not have joint and several liability with respect to due taxes, if any, arising from the acquisition of the Company's shares by the Sellers.

Section 3.12    Personal Property. Except as disclosed in Section 3.12 of the Sellers Disclosure Letter, each of the Subject Companies has good title to, or a valid interest in, or right to use, as applicable, all personal property used in its business (including machinery and equipment), in each case, free and clear of any Liens other than Permitted Liens (the “Company Personal Property”). The Company Personal Property is in good operating condition, ordinary wear and tear excepted.

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Section 3.13    Intellectual Property.

(a)Section 3.13 of the Sellers Disclosure Letter sets forth a true and complete list, as of the date of this Agreement, of all Intellectual Property owned by the Subject Companies, and a description of any royalties paid or received by the Subject Companies with respect thereto. The Subject Companies own or have the right to use, free and clear of all Liens, except for Permitted Liens, all Intellectual Property necessary to conduct their respective businesses substantially as presently conducted except where the failure to so own or have such right, or the presence of such Liens, would be immaterial to the Subject Companies, taken as a whole.

(b)Except as disclosed in Section 3.13(b) of the Sellers Disclosure Letter, the Subject Companies have not received written notice of any claim challenging the use or ownership by the Subject Companies of any Intellectual Property, except for claims that would be immaterial to the Subject Companies, taken as a whole.

(c)To the Knowledge of Sellers, the Subject Companies use of Trademarks and Patents does not infringe any Trademark or Patent, as the case may be, of any third party. During the past two years no third party has made any written claim or demand or instituted any Proceeding against any Subject Company, or to the Knowledge of Sellers, threatened the same, and neither Seller nor any of Subject Company has received any written notice, that (i) challenges the rights of the Subject Companies in respect of any of the Patents or Trademarks utilized by the Subject Companies or (ii) asserts that the operation of the business of any Subject Company is or was infringing, misappropriating or otherwise violating the intellectual property rights of any third party. None of the Patents or Trademarks utilized by the Subject Companies is subject to any outstanding order, ruling, decree, judgment or stipulation by or with any Governmental Entity.

Section 3.14    Insurance.

(a)Section 3.14(a) of the Sellers Disclosure Letter sets forth a list, as of the date hereof, of all material insurance and bonds policies maintained by the Subject Companies or with respect to which a Subject Company is a named insured or otherwise the beneficiary of coverage (collectively, the “Insurance Policies”). Except as disclosed in Section 3.14(a) of the Sellers Disclosure Letter, the Insurance Policies are valid and in full force and effect. There is no material Proceeding by any Subject Company under any of such policies or bonds as to which coverage has been denied or disputed by the underwriters of such policies or bonds.

(b)Section 3.14(b) of the Sellers Disclosure Letter sets forth an accurate and complete list, as of the date hereof, of all pending claims and the claims history of the Subject Companies for the past three (3) years (including with respect to insurance obtained but not currently maintained).

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Section 3.15    Employee Benefits and Labor Relations.

(a)Each employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and each other severance pay, salary continuation, bonus, incentive, stock option, retirement, profit sharing, deferred compensation or other employee benefit plan, contract, program, fund, or arrangement (whether written or oral) and any trust, escrow, or similar agreement related thereto, in each case maintained, contributed to, or required to be contributed to, by any Subject Company or any organization which, together with any Subject Company, would be treated as a “single employer plan” within the meaning of Section 414(b) or (c) of the Code (an “ERISA Affiliate”) or to which any Subject Company or ERISA Affiliate contributes (or has any obligation to contribute) or is a party as of the date hereof, excluding any Non-U.S. Employee Benefit Plan (as defined below)(collectively, the “U.S.Employee Benefit Plans”) is listed on Section 3.15(a)(i) of the Sellers Disclosure Letter. Except as set forth in Section 3.15(a)(ii) of the Sellers Disclosure Letter: (i) each U.S. Employee Benefit Plan (other than any U.S. Employee Benefit Plan that is a “multiemployer plan,” within the meaning of Section 4001(a)(3) of ERISA, covered by Title IV of ERISA (a “U.S. Multiemployer Plan”)) is in compliance in all material respects with applicable Law and has been administered and operated in all material respects in accordance with its terms; (ii) each U.S. Employee Benefit Plan (other than any U.S. Multiemployer Plan) which is intended to be “qualified” within the meaning of Section 401(a) of the Code is so qualified, has received a favorable determination letter or opinion letter from the Internal Revenue Service (“IRS”) or is comprised of a master or prototype plan that has received a favorable opinion letter from the IRS, and, to the Knowledge of Sellers, no event has occurred and no condition exists which could reasonably be expected to result in the revocation of such qualified status or any such determination letter or opinion letter; (iii) no Subject Company, nor to the Knowledge of Sellers, any other Person has breached any fiduciary duty under any applicable Law with respect to any U.S. Employee Benefit Plan; (iv) the actuarial present value of the accumulated plan benefits (whether or not vested) under any U.S. Employee Benefit Plan covered by Title IV of ERISA (other than any U.S. Multiemployer Plan), as of the close of its most recent plan year did not exceed the fair value of the assets allocable thereto; (v) no U.S. Employee Benefit Plan covered by Title IV of ERISA (other than any U.S. Multiemployer Plan) has been terminated and no proceedings have been instituted to terminate or appoint a trustee to administer any such plan; (vi) no “reportable event” (as defined in Section 4043 of ERISA) has occurred with respect any U.S. Employee Benefit Plan covered by Title IV of ERISA (other than any U.S. Multiemployer Plan); (vii) no U.S. Employee Benefit Plan (other than any U.S. Multiemployer Plan) subject to Section 412 of the Code or Section 302 of ERISA has failed to satisfy the minimum funding standard within the meaning of Section 412 of the Code or Section 302 of ERISA, or obtained a waiver of any minimum funding standard or an extension of any amortization period under Section 412 of the Code or of ERISA; (viii) the Subject Companies and each ERISA Affiliate have made all contributions to each U.S. Multiemployer Plan required by the terms of each such U.S. Multiemployer Plan or any collectively bargained agreement; (ix) none of the Subject Companies nor any ERISA Affiliate has incurred any unsatisfied withdrawal liability under Part 1 of Subtitle E of Title IV of ERISA to any U.S. Multiemployer Plan and none of the Subject Companies nor any ERISA Affiliate would be subject to any such withdrawal liability if, as of close of the most recent fiscal year of any such plan ended prior to the date hereof, any Subject Company or any ERISA Affiliate were to engage in a complete withdrawal (as defined in Section 4203 of ERISA) or partial withdrawal (as defined in Section 4205 of ERISA) from any such plan; (x) no Subject Company, nor, to the Knowledge of Sellers, any other “disqualified person” or “party in interest” (as defined in Section 4975(e)(2) of the Code and Section 3(14) of ERISA, respectively) has engaged in any transactions in connection with any U.S. Employee Benefit Plan that could reasonably be expected to result in the imposition of a penalty pursuant to Section 502 of ERISA, damages pursuant to Section 409 of ERISA or a tax pursuant to Section 4975 of the Code; and (xi) no liability, claim,

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action or litigation, has been made, commenced or, to the Knowledge of Sellers, threatened with respect to any U.S. Employee Benefit Plan (other than routine claims for benefits payable in the ordinary course, and appeals of denied such claims).

(b)Each employee benefit plan maintained by the Subject Companies, or to which any Subject Company contributes (or has an obligation to contribute) as of the date hereof, outside the U.S. primarily for the benefit of employees residing outside the U.S., but excluding any such plan sponsored in whole or in part by any government, governmental entity or union or employee organization or any other person other than any of the Subject Companies (collectively, the “Non-U.S. Employee Benefit Plans”) is listed on Section 3.15(b)(i) of the Sellers Disclosure Letter. Except as set forth in Section 3.15(b)(ii) of the Sellers Disclosure Letter: (i) each Non-U.S. Employee Benefit Plan is in compliance in all material respects with applicable Law and has been administered and operated in all material respects in accordance with its terms; (ii) each Non-US Employee Benefit Plan which is intended to qualify for special tax treatment meets the requirements for such treatment and no event has occurred and no condition exists that would reasonably be expected to result in the loss or revocation of such status; (iii) no Subject Company, nor, to the Knowledge of Sellers, any other person has breached any fiduciary duty under applicable law with respect to any Non-U.S. Employee Plan; (iv) no claim, action or litigation has been made, commenced or, to the Knowledge of Sellers, threatened in writing with respect to any Non-U.S. Employee Benefit Plan (other than routine claims for benefits payable in the ordinary course, and appeals of such denied claims); (v) each Non-U.S. Employee Benefit Plan that provides for pension benefits is funded in compliance with all applicable Laws; and (vi) each Non-U.S. Employee Benefit Plan required to be registered with applicable Governmental Entities has been so registered and has been maintained in good standing with the applicable Governmental Entities. The consummation of the transactions contemplated by this Agreement will not result in (x) any obligation of any member of the Subject Company to make any compensation or benefit, (y) an increase in the amount of compensation or benefits or (y) the acceleration of the vesting or timing of payment of any compensation or benefit, in each case, payable to or in respect of any Employee.

(c)Section 3.15(c) of the Sellers Disclosure Letter sets forth all of the collective bargaining agreements with labor unions to which any of the Subject Companies is a party or bound as of the date hereof. The consent or the consultation of or the formal rendering of advice by the employee representative bodies referenced in Section 3.15(c) of the Sellers Disclosure Letter is not required to execute this Agreement or to consummate the transactions contemplated hereby. Except as set forth in Section 3.15(c) of the Sellers Disclosure Letter, there has not been, there is not presently pending or existing, and to the Knowledge of Sellers there is no threatened, (i) strike, slowdown, picketing, or work stoppage, or (ii) any Proceeding against or affecting any member of the Subject Companies relating to the alleged violation of any Law pertaining to labor relations or employment matters, including any charge or complaint filed by an employee or union with the Secretaría del Trabajo y Previsión Social, Junta Federal y/o Local de Conciliación y Arbitraje or any comparable Governmental Entity, organizational activity, or other labor or employment dispute against or affecting any member of the Subject Companies or their premises. Each of the Subject Companies has complied in all material respects with all Laws relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar Taxes, occupational safety and health, and plant closing including all obligations of the IMSS and SAR. Except as set forth in Section 3.15(c) of the Sellers Disclosure Letter, no Subject Companies member is liable for the payment of any compensation, damages, Taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Laws.

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Section 3.16    Transactions with Related Parties.

(a)Section 3.16(a) of the Sellers Disclosure Letter sets forth a list of all Related Party Transactions existing as of the date hereof.

(b)Except as set forth in Section 3.16(b) of the Sellers Disclosure Letter, (i) no shareholder or officer of any Subject Company or any of their respective Affiliates nor any family member within the first two degrees in ascending or descending line, and within the first four degrees collaterally, of any of the foregoing Persons has any direct or indirect ownership or other interest in any Person with which any of the Subject Companies competes or has a business relationship; (ii) no Seller or Affiliate of any Seller nor any family member within the first two degrees in ascending or descending line, and within the first four degrees collaterally of any of the foregoing Persons owns or holds title to or possession, directly or indirectly, of any asset or Permit used or required for the operation of the Subject Companies' business; and (iii) there are no outstanding obligations (whether under Contract or otherwise) between any Subject Company and such Seller or any of its Affiliates (other than the Subject Companies).

(c)Except as set forth on Section 3.16(c) of the Sellers Disclosure Letter, none of the Subject Companies are indebted to any of their shareholders, employees or directors (or to their family members within the first two degrees in ascending or descending line, and within the first four degrees collaterally) in any amount whatsoever, other than for salaries, benefits and other compensation incurred in the Ordinary Course of Business. Except as set forth on Section 3.16(c) of the Sellers Disclosure Letter, no shareholder, employee or director (nor to their family members within the first two degrees in ascending or descending line, and within the first four degrees collaterally) is indebted to any of the Subject Companies in any amount whatsoever.

Section 3.17    Company Contracts.

(a)Section 3.17(a) of the Sellers Disclosure Letter lists those Contracts (“Company Contracts”) to which the Subject Companies are as of the date hereof, a party or by which the Subject Companies or any of their assets are bound or otherwise subject, and that:

(i)create (A) any annual payment obligation of any of the Subject Companies of more than $150,000 (or the equivalent amount in another currency) annually or (B) aggregate payment obligations of the Subject Companies of more than $250,000 (or the equivalent amount in another currency);

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(ii)provide for annual capital expenditures in excess of $250,000 individually, or in the aggregate, or for the disposition of any portion of the assets or business of the Subject Companies in excess of $300,000;

(iii)is a customer, distribution, supply or agency Contract which is: (A) reasonably likely to involve consideration of more than $150,000, in the aggregate, over the term of such Contract; (B) has a remaining term of six (6) months or more; or (C) is an agreement with a concessionaire;

(iv)is a partnership, joint venture or other similar Contract;

(v)is a Contract whereby any of the Subject Companies has granted to any Person any right to use any Company Intellectual Property and any Contract whereby any of the Subject Companies has been granted any right by any Person to license and/or use Intellectual Property (“IP Licenses”);

(vi)is a Contract to which a Governmental Entity is a party;

(vii)limits or restricts any Subject Company from competing, engaging in any business in any jurisdiction or from owning, operating, selling, transferring, pledging or otherwise disposing of or encumbering any of its assets or in any way participating in any business (in any capacity) (other than agreements principally with respect to another subject matter that contain, as part thereof, confidentiality or secrecy provisions);

(viii)evidences or governs Funded Indebtedness of any of the Subject Companies;

(ix)grants to any Person an option or a right of first refusal, first-offer or similar preferential right to purchase or acquire any of the Subject Companies' assets (tangible or intangible);

(x)creates any mortgage, pledge, conditional sales contract, security agreement, factoring agreement or other similar agreement with respect to any of the Company Personal Property or the Real Properties;

(xi)relates to any interest rate, foreign currency swap, derivative, hedging or similar transaction; and

(xii)sets out any outstanding guaranty or indemnification obligation, direct or indirect, by the Subject Companies.

(b)Notwithstanding anything to the contrary in this Section 3.17, “Company Contracts” shall not include immaterial Contracts that will be fully performed or satisfied as of or prior to Closing.

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(c)(i) All material Company Contracts are valid, binding and in full force and effect and constitute legal, valid and binding obligations of the Subject Companies and, to the Knowledge of Sellers, of the other parties thereto, and are enforceable by and against the Subject Companies in accordance with their respective terms (except as such enforceability may be affected by bankruptcy, concurso mercantil, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally); (ii) neither the Subject Companies nor, to the Knowledge of Sellers, any other Person is in material breach or violation or default under any Company Contract; and (iii) to the Knowledge of Sellers, no event has occurred which would result in a material breach of or default under, require any consent or other action by any Person under, or give rise to any penalty or right of termination, cancellation or acceleration of any right or obligation of the Subject Companies or any Person or to a loss of any material benefit to which any of the Subject Companies is entitled under (in each case, with or without notice or lapse of time, or both) any Company Contract.

Section 3.18    Real Properties; Real Property Leases.

(a)Section 3.18(a) of the Sellers Disclosure Letter lists all real property owned by any of the Subject Companies (“Real Properties”), including (i) location and dimensions and (ii) the number of the public deed pursuant to which such parcel of Real Property was acquired by a member of the Company Group together with the registration data before the corresponding Public Registry of Property. The respective Subject Company has good and marketable title over the respective Real Properties, which title is free and clear of any Liens except for Permitted Liens and those Liens identified in Section 3.18(a) of the Sellers Disclosure Letter.

(b)Section 3.18(b) of the Sellers Disclosure Letter contains a list as of the date hereof of all (i) real property leased to or from the Subject Companies; and (ii) leases of material real property (collectively, the “Real Property Leases”) to which any of the Subject Companies is a party (as lessee, sublessee, sublessor or lessor). All Real Property Leases are valid, binding and in full force and effect and constitute legal, valid and binding obligations of the Subject Companies and, to the Knowledge of Sellers, of the other parties thereto, and are enforceable by and against the Subject Companies in accordance with their respective terms (except as such enforceability may be affected by bankruptcy, concurso mercantil, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally); (ii) neither the Subject Companies nor, to the Knowledge of Sellers, any other Person is in material breach or violation or default under any such Real Property Lease.

(c)There are no limitations or contractual or legal restrictions that preclude or restrict the ability to use any parcel of Real Property or any buildings, structures or improvements located thereon for the uses for which they are currently being used.

(d)Except as set forth on Section 3.18(d) of the Sellers Disclosure Letter, the Subject Companies do not own, lease, operate or otherwise use, nor have the Subject Companies owned, leased, operated or otherwise used, any manufacturing plant or facility, blending station or distribution facility.

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Section 3.19    Bank Accounts. Section 3.19 of the Sellers Disclosure Letter contains a complete and accurate list showing (i) the name and address of each bank or other financial institution in which each of the Subject Companies has an account or safe deposit box, the number and nature of any such account or any such box and the names of all Persons authorized to draw thereon or to have access thereto; and (ii) the names of all Persons, if any, holding powers of attorney or other authority (express, implied or ostensible) from any of the Subject Companies to enter into any contract or commitment on each of their behalf and a summary statement of the terms thereof.

Section 3.20    Environmental Matters.

(a)Except as set forth in Section 3.20(a) of Sellers Disclosure Letter:

(i)each Subject Company is currently, and in the past five (5) years has been, in compliance in all material respects with all Environmental Laws;

(ii)each Subject Company possesses and is in compliance with all applicable permits, approvals, licenses, and certificates required under Environmental Law to operate its business (the “Environmental Approvals”) are in full force and effect and there is no Claim or proceeding in existence or in progress or, to the Knowledge of Sellers, threatened, which may result in the cancellation, revocation, temporary or permanent suspension or material modification of any such Environmental Approval;

(iii)none of the Subject Companies has received any written notice from any Governmental Entity or third party, and to the Knowledge of Sellers, there is no pending or threatened claim, litigation, administrative proceeding, or investigation with respect to any actual or alleged noncompliance by any Subject Company with, or Liability of any Subject Company under, Environmental Laws;

(iv)none of the Subject Companies is undertaking or has planned any investigation, remedial action or other works in respect of any Hazardous Substance present or allegedly present in soil, sub-soil, surface water, sub-surface water or groundwater at, in, on, under, or in any way materially affecting any Real Property or any other property owned or occupied by any of the Subject Companies or any other location, whether voluntarily or pursuant to a regulatory or other notice or mandate; and

(v)the Real Property is not and, to the Knowledge of Sellers, has not at any time been deemed by any Governmental Entity or under any Environmental Laws, as a Hazardous Substances disposal site, Hazardous Substances handling facility, contaminated site, environmental emergency or environmental contingency.

(b)Each of the Subject Companies have made available to the Purchaser true and complete copies and results of any material reports, certificates, studies, analyses, tests, or monitoring initiated by and in the possession of any of the Subject Companies pertaining to Hazardous Substances at, in, on, or under any property owned or occupied by any of the Subject Companies.

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Section 3.21    Brokers. Except for HSBC Securities (USA) Inc. and J.P. Morgan Securities LLC, no broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission from the Sellers or the Subject Companies in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Subject Companies or for which any Subject Company has any Liabilities.

Section 3.22    Inventory. All inventory of the Subject Companies, whether or not reflected in the Financial Statements consists of a quality and quantity usable and salable in the Ordinary Course of Business, all of which has been written off or written down to net realizable value in the Financial Statements, or on the accounting records of the Subject Companies as of the Closing, as the case may be. The quantities of each item of inventory (whether raw materials, work-in-process, or finished goods) are not excessive, but are reasonable in the present circumstances of the Subject Companies.

Section 3.23    Proceedings. Sellers have not received written notice of any Proceedings that are pending that challenge, or that may have the effect of preventing, delaying, making illegal any of the transactions contemplated by this Agreement and, to the Knowledge of Sellers, no such Proceedings are threatened.

Section 3.24    Product Liability.

(a)During the past five (5) years, no product liability, product warranty, recall or similar claims have been made against any Subject Company. No Subject Company has received (in connection with any product manufactured, sold or distributed by, or in connection with any service provided in connection with, the business of the Subject Companies) notice of any (i) claim or allegation of personal injury, death, or property or economic damages, (ii) product recall, (iii) claim for punitive or exemplary damages, (iv) claim for contribution or indemnification, or (v) claim for injunctive relief.

(b)To the Knowledge of Sellers, no Subject Company, nor any predecessor or Affiliate thereof, has manufactured, sold, distributed, marketed or installed any asbestos or lead containing products, where the asbestos or lead quantities or qualities in such products would have been in breach of the standards permitted by the applicable Law in force during such period. No Subject Company has in the last twenty (20) years received (in connection with any product containing asbestos or lead manufactured, sold or distributed by the business of the Subject Companies) notice of any (i) claim or allegation of personal injury, death, or property or economic damages, (ii) product recall, (iii) claim for punitive or exemplary damages, (iv) claim for contribution or indemnification or (v) claim for injunctive relief, in each case, related to asbestos or lead containing products.

Section 3.25    No Additional Representations. Except for the representations and warranties contained in this Article III, neither such Seller nor any other Person on behalf of such Seller makes any express or implied representation or warranty with respect to such Seller or the Subject Companies or with respect to any other information provided to Purchasers in connection with the transactions contemplated by this Agreement, and each Purchaser acknowledges that it has not relied on any representation or warranty by any Person in entering into this Agreement other than the representations and warranties set forth in this Article III. Except as expressly set forth herein, the condition of the assets of the Subject Companies shall be “as is” and “where is” and such Seller makes no warranty of merchantability, suitability, fitness for a particular purpose or quality with respect to any of the tangible assets of the Subject Companies or as to the condition or workmanship thereof or the absence of any defects therein, whether latent or patent. Such Seller

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is not, directly or indirectly, making any representations or warranties regarding any pro-forma financial information, financial projections or other forward-looking statements of Subject Companies. It is understood that any Due Diligence Materials made available to Purchasers or their Affiliates or their respective Representatives do not, directly or indirectly, and shall not be deemed to, directly or indirectly, contain representations or warranties of such Seller or its Affiliates or its Representatives.

Article IV

REPRESENTATIONS AND WARRANTIES OF PURCHASERS

Purchasers hereby jointly represent and warrant, as of the date hereof and as of the Closing, to the Sellers as follows:

Section 4.1    Due Organization, Good Standing and Corporate Power of Purchasers.

Purchasers are validly existing and in good standing (or the equivalent thereof) under the Laws of Ohio and Curacao, respectively, and have the requisite corporate power and authority and all necessary governmental licenses, authorizations, permits, consents and approvals to own, lease and operate their properties and to carry on their businesses as now being conducted. Each Purchaser is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary. Neither Purchaser is in violation of any of the provisions of its certificate of incorporation or by-laws.

Section 4.2    Authorization; Non-contravention.

(a)Each Purchaser has the requisite corporate power and authority and has taken all corporate or other action necessary to execute and deliver this Agreement, the Escrow Agreement and all other instruments and agreements to be delivered by each Purchaser as contemplated hereby and thereby, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance by each Purchaser of this Agreement, the Escrow Agreement and all other instruments and agreements to be delivered by Purchasers as contemplated hereby and thereby, the consummation by them of the transactions contemplated hereby and thereby and the performance of their obligations hereunder and thereunder have been duly authorized and approved by the board of directors of each Purchaser. This Agreement and the Escrow Agreement have been, and all other instruments and agreements to be executed and delivered by Purchasers as contemplated hereby and thereby will be, duly executed and delivered by each Purchaser. Assuming that this Agreement and the Escrow Agreement constitute legal, valid and binding obligations of Sellers and each other Person (other than Purchasers) party thereto, this Agreement and the Escrow Agreement constitute legal, valid and binding obligations of each Purchaser, enforceable against each Purchaser in accordance with their terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors' rights generally. Assuming that all other instruments and agreements to be delivered by Purchasers as contemplated hereby and thereby constitute legal, valid and binding obligations of Sellers and each other Person (other than Purchasers) party thereto, such instruments and agreements will constitute legal, valid and binding obligations of Purchaser enforceable against Purchasers in accordance with their terms, except as such enforcement may be limited by applicable

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bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors' rights generally.

(b)The execution and delivery of this Agreement and all other instruments and agreements to be delivered by Purchasers as contemplated hereby do not, and the consummation of the transactions contemplated hereby and thereby will not (i) conflict with any of the provisions of the certificate of incorporation or by-laws or equivalent charter documents of each Purchaser, as amended to the date of this Agreement; (ii) conflict with or result in breach of, or constitute a default under, or result in the acceleration of any obligation or loss of any benefits under, any material Contract or other instrument to which each Purchaser is a party or by which each Purchaser or any of its properties or assets is bound; or (iii) subject to (A) the applicable Antitrust Laws and (B) the approval of the board of directors of each Purchaser, contravene any Law or any Order applicable to Purchasers or by which any of their properties or assets are bound.

Section 4.3    Consents and Approvals. Assuming all required Antitrust Filings are made, and clearances thereunder received, no consent of or filing with any Governmental Entity or any other Person must be obtained or made in connection with (i) the execution and delivery of this Agreement by Purchasers; or (ii) the consummation by Purchasers of the transactions contemplated by this Agreement, other than the approval of the Foreign Investment Approval.

Section 4.4    Broker's or Finder's Fee. Except for Goldman Sachs & Co. no agent, broker, Person or firm acting on behalf of Purchasers is or shall be entitled to any fee, commission or broker's or finder's fees in connection with this Agreement or any of the transactions contemplated hereby from any of the Sellers.

Section 4.5    Financing. Purchasers, on the Closing Date, will have sufficient funds available, in each of such cases so as to enable them to consummate the purchase of the Shares and the other transactions contemplated by this Agreement.

Section 4.6    Solvency. Assuming the accuracy of all of the Sellers' representations and warranties, immediately after giving effect to the transactions contemplated by this Agreement, Purchasers and their respective Subsidiaries shall be Solvent. For purposes of this Agreement, “Solvent” when used with respect to any Person, means that, as of any date of determination, (a) the Present Fair Salable Value of its assets will, as of such date, exceed all of its liabilities, contingent or otherwise, as of such date, (b) such Person will not have, or have access to, as of such date, an unreasonably small amount of capital for the business in which it is engaged or will be engaged and (c) such Person will be able to pay its debts as they become absolute and mature, in the Ordinary Course of Business, taking into account the timing of and amounts of cash to be received by it and the timing of and amounts of cash to be payable on or in respect of its indebtedness, in each case, after giving effect to the transactions contemplated by this Agreement. For purposes of the definition of “Solvent” (i) “debt” means liability on a “claim” and (ii) “claim” means (A) any right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured or (B) the right to an equitable remedy for a breach in performance if such breach gives rise to a right to payment, whether or not such equitable remedy is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured. “Present Fair Salable Value” means the amount that may be realized if the aggregate assets of such Person (including goodwill) are sold as an entirety with reasonable promptness in an arm's length transaction under present conditions for the sale of comparable business enterprises.

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Section 4.7    Proceedings. Purchasers have not received, as of the date hereof, written notice of any Proceedings that are pending that challenge, or that may have the effect of preventing, delaying, making illegal any of the transactions contemplated by this Agreement and, to the Knowledge of Purchasers, no such Proceedings are threatened.

Section 4.8    Experienced Investor. Each Purchaser (i) is an investor experienced in the ownership of businesses similar to the Subject Companies; (ii) has knowledge and experience in financial, business and investment matters as to be capable of evaluating the merits and risks of the transactions contemplated by this Agreement; and (iii) has the ability to bear the economic risks of the transactions contemplated by this Agreement.

Section 4.9    Investigation by Purchasers. Purchasers have conducted their own independent investigation, verification, review and analysis of the business, operations, assets, liabilities, results of operations, financial condition, technology and prospects of the Subject Companies, which investigation, review and analysis was conducted by Purchasers and their respective Affiliates and to the extent Purchasers deemed appropriate. In entering into this Agreement, each Purchaser acknowledges that it has relied solely upon the aforementioned investigation, review and analysis and not on any factual representations or opinions of the Sellers (except the specific representations and warranties of Sellers set forth in Article III), and each Purchaser acknowledges and agrees, to the fullest extent permitted by Law, that:

(i)Purchasers have not relied on any oral or written representation or warranty, either express or implied, as to the accuracy or completeness of (A) any of the information set forth in management presentations relating to the Subject Companies made available to Purchasers, their Affiliates or their respective Representatives, in materials made available in any “data room” (virtual or otherwise), including any cost estimates delivered or made available, financial projections or other projections, in presentations by the management of the Subject Companies, in “break-out” discussions, in responses to questions submitted by or on behalf of Purchasers, their Affiliates or their respective Representatives, whether orally or in writing, in materials prepared by or on behalf of the Company, or in any other form (such information, collectively, “Due Diligence Materials”), or (B) the pro-forma financial information, projections or other forward-looking statements of the Subject Companies, in each case in expectation or furtherance of the transactions contemplated by this Agreement;

(ii)without limiting the generality of the foregoing, Sellers make no representation or warranty regarding any third party beneficiary rights or other rights which Purchasers might claim under any studies, reports, tests or analyses prepared by any third parties for the Subject Companies, even if the same were made available for review by any Purchaser or their respective Representatives; and

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(iii)without limiting the generality of the forgoing, Purchasers expressly acknowledge and agree that none of the documents, information or other materials provided to them at any time or in any format by the Company or any of its Affiliates or Representatives constitute legal advice, and Purchasers waive all rights to assert that they received any legal advice from Sellers, any of their Affiliates, or any of their respective Representatives or counsel, or that it had any sort of attorney-client relationship with any of such Persons.

Section 4.10    Exclusivity of Representations. The representations and warranties made by Purchasers in this Article IV are the exclusive representations and warranties made by Purchasers. Purchasers hereby disclaim any other express or implied representations or warranties with respect to themselves or any other Person.

Article V

COVENANTS

Section 5.1    Access to Information Concerning Properties and Records. Sellers, after the date hereof through Closing Date, shall, and shall cause the Subject Companies to, (i) provide, to Purchasers and their Representatives access, as reasonably requested in writing by Purchasers, to the offices, properties, books and records of the Subject Companies (it being understood that such access will be coordinated through Primary Seller, and granted during regular business hours upon reasonable advance notice in writing, and provided that any such access by Purchasers shall not unreasonably interfere with the conduct of the business of the Subject Companies); and (ii) furnish to Purchasers and their Representatives such financial and operating data and other information relating to the Subject Companies as such Persons may reasonably request; provided, that, Purchasers will not have access to (A) individual performance or evaluation records; (B) information that is subject to attorney-client privilege or other privilege; (C) information that, in the reasonable opinion of Sellers or the Subject Companies, would (1) result in a breach of confidentiality obligations to which Sellers or the Subject Companies are bound or (2) result in a violation of applicable Laws, including Antitrust Laws; and provided, further, (3) that such access shall not unreasonably disrupt the operations of the Subject Companies. No investigation by Purchasers or other information received by Purchasers shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by the Sellers hereunder.

Section 5.2    Confidentiality.

(a)Information obtained by Purchasers and their Representatives in connection with the transactions contemplated by this Agreement shall be subject to the provisions of the Confidentiality Agreement by and between the Company and Primary Purchaser, dated July 23, 2012 (the “Confidentiality Agreement”).

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(b)Each Seller acknowledges that it is in possession of Confidential Material. Each Seller shall, and shall cause its current shareholders to treat confidentially and not disclose all or any portion of such Confidential Material and will use such Confidential Material solely for the purpose of consummating the transactions contemplated by this Agreement and for no other purpose. Each Seller acknowledges and agrees that such Confidential Material is proprietary and confidential in nature and may be disclosed to its Representatives only to the extent necessary for such Seller to consummate the transactions contemplated by this Agreement. If such Seller or its current shareholders are requested or required to disclose (after such Seller has used its commercially reasonable efforts (litigation excepted) to avoid such disclosure and, to the extent not prohibited by Law, after promptly advising and consulting with Purchasers about such Seller's intention to make, and the proposed contents of, such disclosure) any of the Confidential Material (whether by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process), to the extent not prohibited by Law, such Seller shall provide Purchasers with prompt notice of such request so that Purchasers may seek an appropriate protective order or other appropriate remedy. At any time that such protective order or remedy has not been obtained, such Seller may disclose only that portion of the Confidential Material which such Person's counsel advises is legally required to disclose or of which disclosure is required to avoid sanction for contempt or any similar sanction, and such Seller shall exercise its commercially reasonable efforts (excluding litigation), at Purchasers' sole cost, to obtain assurance that confidential treatment will be accorded to such Confidential Material so disclosed.

Section 5.3    Conduct of the Business of the Subject Companies Pending the Closing Date.

(a)Sellers agree that during the period commencing on the date hereof and ending on the Closing Date, the Company shall, and shall cause each of the Company's Subsidiaries to, conduct their respective operations (including their respective working capital practices) only in the Ordinary Course of Business consistent with past practice, including by complying in all material respects with all applicable Laws, maintaining all assets and properties of, or used by the Subject Companies, and timely filing all Tax Returns and timely paying all Taxes due as well as timely withholding and paying all Taxes required to be withheld and paid prior to the Closing Date, and to use their commercially reasonable efforts to preserve intact their respective business organizations, keep available the services of their officers and employees and maintain their respective relationships with licensors, suppliers, distributors, clients and others having business relationships with them.

(b)From the date hereof and until the earlier to occur of the Closing Date or such date as this Agreement is terminated in accordance with Article VII, Sellers agree that, except as (i) expressly required or permitted by this Agreement; (ii) required by applicable Law; or (iii) as otherwise consented to in advance in writing by Purchasers provided that such consents do not violate applicable Law (which consent shall not be unreasonably withheld, delayed or conditioned), Sellers shall cause the Subject Companies not to:

(i)sell any material assets of the Subject Companies or purchase any material asset, other than assets sold and purchased in the Ordinary Course of Business;

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(ii)create, incur or assume any Funded Indebtedness;

(iii)grant, create, incur or suffer to exist any Liens, other than Permitted Liens, on any assets, properties or shares of capital stock of the Subject Companies;

(iv)split, combine or reclassify any of the capital stock of the Subject Companies or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of the capital stock of the Subject Companies;

(v)issue or grant options, warrants, rights to purchase, or any other instrument that is convertible into, any securities with respect to the Subject Companies;

(vi)repurchase, directly or indirectly, redeem or otherwise acquire any shares of the capital stock of the Subject Companies or any securities convertible into or exercisable for any shares of the capital stock thereof, except, in each case, in respect of acquisitions of shares representing the stated capital of any of the Subject Companies from third parties;

(vii)transfer, sell, dispose of, or agree to transfer, sell or dispose of, the shares of the Subject Companies, or enter into any agreement to do, or with respect to, any of the foregoing;

(viii)merge or consolidate with any other Person or acquire any amount of stock or assets of any other Person;

(ix)commence any Proceeding or file any petition in any court relating to bankruptcy, concurso mercantil, reorganization, insolvency, dissolution, liquidation or relief from debtors;

(x)grant to any Employee any increase in base salary, incentive compensation, severance benefits or aggregate employee benefits, except as may be required under existing agreements or applicable Law or in the Ordinary Course of Business;

(xi)enter into, modify or amend in any respect or terminate any Company Contract or Company Permit except for renewals, extensions or other modifications or amendments in the Ordinary Course of Business;

(xii)cause or permit any amendment, supplement, waiver or modification to or of any of their organizational documents;

(xiii)make capital expenditures in excess of $21,000,000 in the aggregate;

(xiv)prepay any accounts payable or delay or make cash payments of trade payables, other than, in the Ordinary Course of Business consistent in amount, frequency and type with past practice;

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(xv)make any loan, advance or capital contribution to or investment in any Person (other than loans, advancements or capital contribution to a Company Subsidiary);

(xvi)other than in the Ordinary Course of Business, forgive, cancel, compromise, waive, release or fail to pay any debts, claims or rights in excess of $250,000 in the aggregate;

(xvii)change the accounting methods, practices or procedures applicable to the Subject Companies, except as required by applicable GAAP or applicable Law;

(xviii)other than in the Ordinary Course of Business, sell, transfer, assign, license or permit to lapse or abandon any Company Intellectual Property;

(xix)(a) make, change or revoke any Tax election, settle or compromise any Tax claim or Liability or enter into a settlement or compromise, or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for Tax purposes, or (b) prepare or file any Tax Return (or any amendment thereof) unless such Tax Return shall have been prepared in a manner consistent with past practice and the Sellers shall have provided Purchasers a copy thereof (together with supporting papers) at least three Business Days prior to the due date thereof for Purchasers to review and approve (such approval not to be unreasonably withheld, conditioned or delayed);

(xx)declare, set aside or pay any cash or non-cash dividend or other cash or non-cash distribution with respect to its shares of stock;

(xxi)enter into, modify or terminate any collective bargaining agreement of the Subject Companies or, through negotiation or otherwise, make any commitment or incur any liability to any labor organization with respect to the Subject Companies other than as required by Law and in the Ordinary Course of Business; or

(xxii)agree, whether in writing or otherwise, to do any of the actions or omissions described in paragraph (i) through (xxi) above.

Section 5.4    Exclusive Dealing. During the period from the date of this Agreement through and including the Closing Date, Sellers shall not, and shall cause the Subject Companies and the respective Representatives and Affiliates of the Subject Companies, to refrain from taking any action to, directly or indirectly, approve, authorize, encourage, initiate, solicit, or engage in discussions or negotiations with, or provide any information to, any Person other than Purchasers and their Representatives concerning any Alternate Transaction, (as defined below) and Sellers shall prevent any of the Subject Companies from entering into any Alternate Transaction. For purposes hereof, an “Alternate Transaction” means (i) any stock purchase, merger, consolidation, reorganization, change in organizational form, spin-off, split-off, recapitalization, sale of equity interests or other similar transaction involving the Subject Companies; (ii) any sale of all or any significant portion of the assets of the Subject Companies; (iii) any other transaction in respect of the Subject Companies which results directly or indirectly, in a change of control of the Subject Companies or sale of any minority equity interest in the Subject Companies; or (iv) any other transaction or series of transactions which has substantially similar economic effects, in each such case, in which transaction Purchasers do not participate. Neither Sellers nor the Subject Companies will vote their capital stock of the

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Subject Companies in favor of any purchase of any capital stock of the Subject Companies or any other Alternate Transaction.

Section 5.5    Commercially Reasonable Efforts; Consents. Subject to the terms and conditions contained in this Section 5.5 and Section 5.9, the Parties shall cooperate and use their respective commercially reasonable efforts to take, or cause to be taken, all appropriate action, and to make, or cause to be made, all filings necessary, proper or advisable under applicable Laws and to consummate and make effective the transactions contemplated by this Agreement, including their respective commercially reasonable efforts to obtain, prior to the Closing Date, all permits, consents, approvals, authorizations, qualifications and Orders of Governmental Entities and parties to the Company Contracts as are necessary for the consummation of the transactions contemplated by this Agreement and to fulfill the conditions to consummation of the transactions contemplated hereby set forth in Section 6.2 and Section 6.3.

Section 5.6    Public Announcements. Primary Seller and Primary Purchaser each shall (i) consult with each other before issuing any press release or otherwise making any public statement with respect to the transactions contemplated by this Agreement; (ii) provide to the other Primary Party for review a copy of any such press release or public statement; and (iii) not issue any such press release or make any such public statement prior to such consultation and review and the receipt of the prior consent of the other Primary Party, unless and only to the extent, in the reasonable judgment of such Primary Party upon the advice of its counsel, disclosure is required by applicable Law (including the periodic reporting requirements under the Exchange Act) or under the rules of any securities exchange on which the securities of such party or any of its Affiliates are listed; provided that, to the extent so required by applicable Law, the Primary Party intending to make such release shall use its commercially reasonable efforts consistent with applicable Law to consult with the other Primary Party in advance of such release with respect to the text thereof.

Section 5.7    Notification of Certain Matters. Purchasers, on the one hand, and Sellers on the other hand, shall use their respective commercially reasonable efforts to promptly notify each other of (i) any material actions, suits, claims or proceedings in connection with the transactions contemplated by this Agreement commenced or, to the Knowledge of Sellers or the Knowledge of Purchasers, threatened, against Sellers, the Subject Companies or Purchasers, as the case may be; (ii) the occurrence or non-occurrence of any fact or event which would be reasonably likely to cause any condition set forth in Article VI not to be satisfied; (iii) any notice of, or other communication relating to, a default or event that, with notice or lapse of time or both, would become a default under any Company Contract; (iv) the occurrence or existence of any fact, circumstance or event which could result in any representation or warranty made by Sellers or Purchasers, as the case may be, in this Agreement or in any schedule, exhibit or certificate or delivered herewith, to be untrue or inaccurate; (v) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; or (vi) the occurrence of any event, circumstance, development, state of facts, occurrence, change or effect which has had a Material Adverse Effect or the occurrence or non-occurrence of any event, circumstance, development, state of facts, occurrence, change or effect which would not, individually or in the aggregate, result in a Material Adverse Effect; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under this Agreement; provided, further that a breach of this Section 5.7 shall not be considered for purposes of determining the satisfaction of the closing conditions set forth in Article VI or give rise to a right of termination under Article VII or a right to indemnification under Article VIII if the underlying breach or breaches with respect to which the other party failed to give notice

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would not result in the failure of the closing conditions set forth in Article VI or would not result in the ability of such non-breaching Party to terminate this Agreement or to obtain indemnification, as the case may be.

Section 5.8    Supplements to Schedules. Primary Seller may deliver to Primary Purchaser no later than the end of the third Business Day prior to the Closing Date a true and complete schedule of changes (the “Update Schedule”), which changes are to any of the information contained in the Sellers Disclosure Letter delivered in connection with the execution of this Agreement (including changes relating to any other representations or warranties in Article III as to which no matters have been set forth in the Sellers Disclosure Letter as of the date hereof but as to which such matter would have been required to be set forth in the Sellers Disclosure Letter if such matter had existed on the date hereof) and which changes would render any representation or warranty inaccurate or incomplete at any time after the date of this Agreement until the Closing Date. Furthermore, the only changes which may be included on the Update Schedule are those which are related to events or circumstances that occurred after the date of this Agreement.

Section 5.9    Antitrust Laws.

(a)Each Party shall use its commercially reasonable efforts to: (i) as promptly as practicable, take all actions necessary to file or cause to be filed the filings required of it or any of its Affiliates under any applicable Antitrust Laws in connection with this Agreement and the transactions contemplated hereby (the “Antitrust Filings”); (ii) obtain the required consents and clearance from Antitrust Authorities, as promptly as practicable, and in any event prior to the End Date; (iii) use their respective commercially reasonable efforts to comply with (or properly reduce the scope of) any formal or informal request for additional information or documentary material received by it or any of its Affiliates from any Antitrust Authority.

(b)Each Party shall use its commercially reasonable efforts to (i) consult and cooperate with each other and consider in good faith the views of the other Party in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party in connection with proceedings under or relating to any Antitrust Laws; (ii) promptly notify the other Party of any material written communication made to or received by it from any Antitrust Authority regarding any of the transactions contemplated hereby, and, subject to applicable Law, if practicable, permit the other Party to review in advance any proposed written communication to any such Antitrust Authority and incorporate the other Party's reasonable comments; and (iii) consult, to the extent practicable, with the other Party in advance of any material meeting or teleconference with any Governmental Entity and, to the extent not prohibited by the Governmental Entity, give the other Party the opportunity to attend and participate in such meetings or teleconferences.

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(c)Purchasers shall not, and shall cause their Affiliates not to, acquire or agree to acquire, by merging with or into or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets, if the entering into of a definitive agreement relating to, or the consummation of such acquisition, merger or consolidation could reasonably be expected to: (i) impose any delay in the obtaining of, or increase the risk of not obtaining, any consents of any Governmental Entity necessary to consummate the transactions contemplated hereby or the expiration or termination of any applicable waiting period; (ii) in any way increase the risk of any Governmental Entity entering an Order prohibiting or conditioning the consummation of the transactions contemplated hereby; (iii) in any way increase the risk of not being able to remove any such Order on appeal or otherwise; or (iv) in any way materially delay or prevent the consummation of the transactions contemplated hereby.

(d)Purchaser shall be responsible for the payment of all filing fees in connection with the Antitrust Filings under the Antitrust Laws.

Section 5.10    Preservation of Records. For a period of seven (7) years after the Closing Date, Purchasers shall cause the Subject Companies to preserve and retain, all corporate, accounting, tax, legal, auditing, human resources and other books and records of the Subject Companies (including (i) any documents relating to any governmental or non-governmental claims, actions, suits, proceedings or investigations; and (ii) all Tax Returns, schedules, work papers and other material records or other documents relating to the conduct of the business and operations of the Subject Companies prior to the Closing Date. Notwithstanding the foregoing, during such seven-year period, Purchasers may cause the Subject Companies to dispose of any such books and records which are offered to, but not accepted by, Primary Seller. Notwithstanding any other provisions hereof, the obligations of Purchasers contained in this Section 5.10 shall be binding upon the successors and assigns of Purchasers. In the event Purchasers, or any of their respective successors or assigns, (i) consolidates with or merges into any other Person; or (ii) transfers all or substantially all of its properties or assets to any Person, then, and in each case, proper provision shall be made so that the successors and assigns of Purchasers, as the case may be, honor the indemnification and other obligations set forth in this Section 5.10.

Section 5.11    Employee Benefits.

(a)For the period commencing on the Closing Date and ending on December 31, 2013, Purchasers shall provide or cause the Subject Companies to provide to all current and former employees in the U.S. and Canada of the Subject Companies (“Company Employees”) (i) a salary or wage level and bonus opportunity at least equal to the salary or wage level and bonus opportunity to which they were entitled immediately prior to the Closing Date; and (ii) benefits, perquisites and other terms and conditions of employment that are substantially equivalent to the benefits, perquisites and other terms and conditions that they were entitled to receive immediately prior to the Closing Date (including benefits pursuant to qualified and non-qualified retirement and savings plans (as permitted by Law), medical, dental and pharmaceutical plans and programs, severance plans and policies and equity-based and incentive compensation plans). Notwithstanding the foregoing sentence (but not in limitation thereof), following the Closing Date, Purchasers may terminate or cause to be terminated the employment of any Company Employee subject to the payment

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and satisfaction of severance benefits, and other entitlements of such Company Employee in connection with such termination and/or under any applicable employment agreement as required by applicable Law.

(b)With respect to each employee benefit plan, policy or practice, including severance, vacation and paid time off plans, policies or practices, sponsored or maintained by Purchasers or their Affiliates, Purchasers shall cause the Subject Companies to grant or cause to be granted to all Company Employees from and after the Closing Date credit for all service with the Subject Companies, and their respective predecessors, prior to the Closing Date for all purposes (including eligibility to participate, vesting credit, eligibility to commence benefits, benefit accrual, early retirement subsidies and severance) as permitted by Law.

(c)For the period commencing on the Closing Date and ending on December 31, 2013, (i) Purchasers shall cause the Subject Companies to ensure that no limitations or exclusions as to pre-existing conditions, evidence of insurability or good health, waiting periods or actively-at-work exclusions or other limitations or restrictions on coverage are applicable to any Company Employees or their dependents or beneficiaries under any welfare benefit plans in which such employees may be eligible to participate; and (ii) Purchasers shall cause the Subject Companies to provide, and the Subject Companies immediately following the Closing agree to provide or cause to be provided, that any costs or expenses incurred by Company Employees (and their dependents or beneficiaries) up to (and including) the Closing Date shall be taken into account for purposes of satisfying applicable deductible, co-payment, coinsurance, maximum out-of-pocket provisions and like adjustments or limitations on coverage under any such welfare benefit plans.

Section 5.12    Non-Competition; Non-Interference. In consideration of the purchase of the Shares by Purchasers, from the Closing Date until the third anniversary of the Closing Date, none of the Sellers nor any Person set forth in Section 5.12 of the Sellers Disclosure Letter shall:

(i)within any jurisdiction or marketing area in which the Subject Companies are doing business as of the Closing Date (including Mexico, the U.S., Canada and Central America), directly or indirectly own, manage, operate, control, be employed by, or participate in the ownership, management, operation or control of, or be connected in any manner with, any business of the type and character engaged in and competitive with that conducted by the Subject Companies within the two years prior to the Closing Date (any such business, a “Competing Business”). For these purposes, (A) ownership of securities of four percent (4%) or less of any class of securities of a publicly traded company shall not be considered to be competition to the extent such investment is merely of a passive nature and no rights to designate board members or officers in the company are granted to the Sellers or such Person pursuant to that investment, and (B) the sale of Comex branded products in Central America, other than Guatemala, shall not be considered to be competition;

(ii)persuade or attempt to persuade any potential customer or client to which the Sellers or any of the Subject Companies have made a presentation, or with which the Sellers or any of the Subject Companies have had discussions, not to purchase products sold or otherwise commercialized by any of the Subject Companies; or

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(iii)solicit for Sellers or any Person other than the Purchasers or any of the Subject Companies the business of any Person which is a customer or client of the Sellers or any of the Subject Companies, or was their customer or client within one (1) year prior to the date of this Agreement or in any way interfere with the relationship between the Purchasers or any of the Subject Companies and any such Person or business relationship (including making any negative or disparaging statements or communications about the Purchasers or any of the Subject Companies).

Section 5.13    Non-Solicitation of Employees. From and after the Closing Date, no Seller nor any Person set forth in Section 5.12 of the Sellers Disclosure Letter shall, for a period of three (3) years after the Closing Date, employ or solicit for employment any employee of the Subject Companies identified in Section 1.1(c) of the Sellers Disclosure Letter plus their immediate direct reports from time to time.

Section 5.14    Release.

(a)Each Seller, in each case on behalf of itself and its successors and assigns, and all Persons claiming by, through, or under any of them, jointly and severally (each, a “Related Person”), hereby fully and irrevocably releases, acquits and forever discharges Purchasers and the Subject Companies and each of their respective past, present and future officers, directors, shareholders, managing directors, representatives, employees, principals, agents, Affiliates, Subsidiaries (direct and indirect), joint ventures, predecessors, successors and assigns, (collectively, the “Released Parties”), from any and all losses, claims, demands, rights, encumbrances, contracts (other than, if applicable, employment contracts), covenants or proceedings, of whatever kind or nature in Law, equity or otherwise, whether known or unknown, and whether or not concealed or hidden, all of which such Seller or any Related Person now owns or holds or has at any time owned or held or may hereafter own or hold against any Released Party at any time related to any matter occurring on or prior to the Closing Date, relating to the business, affairs, governance or management of any Subject Company, except for (i) rights and claims arising under this Agreement, (ii) rights directly arising from such Person's employment with any of the Subject Companies, including rights to unpaid salary, wages, health and welfare benefits, expense reimbursement consistent with company policies and rights under any employment agreement, (iii) rights to indemnification, if any, under the organizational documents of the Subject Companies, and (iv) rights and claims arising under any existing contractual relationship.

(b)Each Seller hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, or commencing, instituting or causing to be commenced, any proceeding of any kind against the Released Parties, based upon any matter released hereby.

Section 5.15    Transaction Expenses. Purchasers and Sellers shall bear their own respective costs and expenses, including fees and disbursements of attorneys, accountants, brokers, financial and other advisors and service providers, travel and entertainment expenses, and meeting and presentation expenses, incurred or to be incurred in connection with the negotiation, preparation and execution of this Agreement and the consummation of the transactions contemplated hereby and the Closing. Sellers shall pay all Company Transaction Expenses.

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Section 5.16    Environmental Investigations.

(a)During the period commencing on the date hereof and ending on the date immediately preceding the Closing Date, Purchasers will conduct at their own cost, Phase II environmental investigations at the Subject Companies' facilities identified on Annex B. Purchasers shall deliver to Sellers a proposed work schedule for all facilities and a proposed scope of work for each facility. Purchasers and Sellers shall use their respective commercially reasonable efforts to promptly agree upon the schedule and scope of work at each facility. Purchasers shall use their commercially reasonable efforts to complete such investigations on or before February 28, 2013. Sellers shall use their commercially reasonable efforts to assist Purchasers in completing such investigations on or before February 28, 2013.

(b)Purchasers and their Representatives shall have the right to take soil, sediment and groundwater samples, and take other investigative measures, including the installation of groundwater monitoring wells, at such facilities. The investigations shall be performed in a safe and workmanlike manner, pursuant to generally accepted standards, practices and procedures for the performance of similar activities in the industry. Purchasers or their Representatives will obtain all Permits required by applicable Laws and will otherwise comply with all applicable Laws in the performance of the investigations. At Purchasers' request, Sellers shall use commercially reasonable efforts to assist Purchasers in their efforts to obtain such Permits. Purchasers and their Representatives will use commercially reasonable efforts to ensure that the investigation activities do not unreasonably interfere with the Subject Companies' operations at such facilities.

(c)Sellers shall, and shall cause the Subject Companies to, (i) grant reasonable access to such facilities to conduct the investigation activities described in this Section 5.16; (ii) provide commercially reasonable cooperation to Purchasers and their Representatives in the performance of such investigation activities, and (iii) inform Purchasers and their Representatives of the location of all underground utilities and structures, including, but not limited to, cables, water lines, gas lines, electrical lines, storage tanks, piping and sewers, and any other underground obstructions.

(d)At Sellers' request, Purchasers shall provide Sellers with a copy of any final data prepared by Purchasers' Representatives with respect to the investigations described in this Section 5.16.

(e)Purchasers shall promptly notify Sellers of any Environmental Matter discovered during the investigation activities that requires, or is reasonably likely to require, the Subject Company to notify or disclose the Environmental Matter to a Governmental Entity. If, in the opinion of Sellers' or the Subject Company's legal counsel, such Environmental Matter is required to be noticed or disclosed to a Governmental Entity, Sellers shall, or cause the Subject Company to, promptly notify or disclose such Environmental Matter to the appropriate Governmental Entity in accordance with applicable Law.

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(f)Upon completion of the investigation activities contemplated in this Section 5.16, if the aggregate maximum potential Environmental Liabilities, in the opinion of Primary Purchaser provided on a basis consistent with normal industry practice and standards in the environmental consulting industry in the market in which the relevant Subject Company's facility is located, exceeds $27.0 million, then the Indemnification Escrow Amount shall be increased by an amount equal to the amount by which the aggregate maximum potential Environmental Liabilities exceeds $27.0 million.

Article VI

CONDITIONS PRECEDENT

Section 6.1    Conditions to the Obligations of Each Party. The consummation of the transactions contemplated hereby are subject to the satisfaction or waiver in writing by the Primary Parties (on behalf of Sellers and Purchasers as applicable), at or before the Closing Date, of each of the following conditions precedent (condiciones suspensivas):

(i)no Governmental Entity shall have issued, enacted, entered, promulgated or enforced any Law or Order restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement;

(ii)all consents, waivers and approvals from Governmental Entities, including clearance by the Antitrust Authorities and authorization by the Foreign Investment Authority, or third parties, if any, disclosed in Section 3.7 of the Sellers Disclosure Letter shall have been obtained;

(iii)Purchasers, Sellers and the escrow agent shall have executed and delivered a duly executed counterpart of the Escrow Agreement; and

(iv)the expiration or earlier termination of all waiting periods under applicable Antitrust Laws relating to the consummation of the transactions covered by this Agreement.

Section 6.2    Conditions to the Obligations of Purchasers. The obligations of Purchasers to consummate the transactions contemplated hereby are subject to the satisfaction or waiver by Primary Purchaser on behalf of Purchasers, on or prior to the Closing Date, of the following further conditions precedent (condiciones suspensivas):

(i)all of the agreements and covenants of Sellers to be performed prior to the Closing pursuant to this Agreement shall have been duly performed in all material respects;

(ii)the representations and warranties of Sellers contained in Article III shall be true and correct as of the date of this Agreement and as of the Closing Date as if made at and as of such time (other than those representations and warranties made as of a specified date, which such

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representations and warranties shall be true and correct in all respects as of such specified date); provided, however, that for purposes of determining the satisfaction of the condition set forth in this Section 6.2(ii), such representations and warranties (other than those representations and warranties contained in Sections 3.1, 3.2(a), 3.3, 3.5 and 3.6) shall be deemed to be so true and correct if the failure or failures of such representations and warranties to be true and correct (such representations and warranties to be read for this purpose without reference to any qualification set forth therein relating to “materiality” or “Material Adverse Effect”) do not constitute, individually or in the aggregate, a Material Adverse Effect;

(iii)Sellers shall have delivered or caused to be delivered to Primary Purchaser the items set forth in Section 2.4(b);

(iv)there shall not have occurred after the date of this Agreement any event or development with relation to Sellers or the Subject Companies that, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect;

(v)Purchasers shall have completed the environmental investigations described in Section 5.16; and

(vi)Sellers shall have caused the Subject Companies to obtain the Permits set forth in Section 6.2(vi) of the Sellers Disclosure Letter or any other evidence, satisfactory to Purchasers in their sole discretion, demonstrating such Permits are not required pursuant to applicable Law.

Section 6.3    Conditions to the Obligations of Sellers. The obligations of Sellers to consummate the transactions contemplated hereby are subject to the satisfaction or waiver by Sellers, on or prior to the Closing Date, of the following further conditions precedent (condiciones suspensivas):

(i)all of the agreements and covenants of Purchasers to be performed prior to the Closing pursuant to this Agreement shall have been duly performed in all material respects;

(ii)the representations and warranties of Purchasers contained in Article IV shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as if made at and as of such time (other than those representations and warranties made as of a specified date, which such representations and warranties shall be true and correct in all material respects as of such specified date); and

(iii)Purchasers shall have delivered or caused to be delivered to Primary Seller the items set forth in Section 2.4(c).

Section 6.4    Frustration of Closing Conditions. None of Purchasers or Sellers may rely on the failure of any condition set forth in this Article VI to be satisfied if such failure was caused by such Party's failure to comply with its obligations hereunder, to act in good faith or such Party's failure to use its commercially reasonable efforts to cause the Closing to occur, as required by Section 5.5.

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Article VII

TERMINATION AND ABANDONMENT

Section 7.1    Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned, at any time prior to the Closing:

(i)by mutual written consent of the Parties;

(ii)by either Sellers or Purchasers, if:

(A)any court or other Governmental Entity shall have issued, enacted, entered, promulgated or enforced any Law or Order (that is final and non-appealable and that has not been vacated, withdrawn or overturned) restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; provided, that the Party seeking to terminate pursuant to this Section 7.1(ii) shall have complied with their obligations, if any, under Section 5.5; or

(B)the Closing Date shall not have occurred on or prior to June 30, 2013 (the “End Date”); provided, that neither Party may terminate this Agreement pursuant to this Section 7.1(ii) if such Party is in material breach of this Agreement;

(iii)by Sellers, if:

(A)any of the representations and warranties of Purchasers contained in Article IV shall fail to be true and correct, or

(B)there shall be a breach by Purchasers of any covenant or agreement of Purchasers in this Agreement,

that, in the case of either clause (A) or (B) above, (1) would result in the failure of a condition set forth in Section 6.3(i) or (ii) and (2) which is not curable or, if curable, is not cured upon the occurrence of the earlier of (x) the thirtieth (30th) day after written notice thereof is given by Sellers to Purchasers and (y) the day that is five (5) Business Days prior to the End Date; provided, that Sellers may not terminate this Agreement pursuant to this Section 7.1(iii) if Sellers are in material breach of this Agreement;

(iv)by Purchasers, if:

(A)any of the representations and warranties of Sellers contained in Article III shall fail to be true and correct, or

(B)there shall be a breach by Sellers of any covenant or agreement of Sellers in this Agreement,

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that, in the case of either clause (A) or (B) above, (1) would result in the failure of a condition set forth in Section 6.2(i) or (ii) and (2) which is not curable or, if curable, is not cured upon the occurrence of the earlier of (x) the thirtieth (30th) day after written notice thereof is given by Purchasers to Sellers and (y) the day that is five (5) Business Days prior to the End Date; provided, that Purchasers may not terminate this Agreement pursuant to this Section 7.1(iv) if Purchasers are in material breach of this Agreement; or

(v)by Purchasers if any event or development with relation to the Subject Companies shall have occurred prior to the Closing Date that individually or in the aggregate has resulted in a Material Adverse Effect;

(vi)by Purchasers, if the environmental investigations described in Section 5.16 are not completed due to causes directly attributable to Sellers or causes not attributable to Purchasers, on or before February 28, 2013.

Section 7.2    Effect of Termination. In the event of the termination of this Agreement pursuant to Section 7.1 by Purchasers, on the one hand, or Sellers, on the other hand, written notice thereof shall forthwith be given to the other Parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall, except as set forth below, be terminated and have no effect and there shall be no liability hereunder on the part of Sellers, Purchasers or the Subject Companies, except that Section 5.2, Section 7.1, this Section 7.2 and Article X shall survive any termination of this Agreement. Nothing in this Section 7.2 shall relieve any Party of liability for any willful breach of this Agreement.

Article VIII

INDEMNIFICATION

Section 8.1    Survival of Representations and Warranties.

(a)The respective representations and warranties of Sellers, on the one hand, and Purchasers, on the other hand, contained in this Agreement shall survive the Closing until the date that is eighteen months after the Closing Date. Each covenant and other agreement of Purchasers or Sellers hereunder shall survive in accordance with its terms.

(b)No Person shall be liable for any claim for indemnification under Article VIII unless a Claim Certificate is delivered by the Person seeking indemnification to the Person from whom indemnification is sought prior to the expiration of the applicable survival period, in which case the representation, warranty, covenant or agreement which is the subject of such claim shall survive, to the extent of the claims described in such Claim Certificate only, until such claim is resolved, whether or not the amount of the Losses resulting from such breach has been finally determined at the time the notice is given.

Section 8.2    Indemnification by Sellers. Subject to the other provisions of this Article VIII, from and after the Closing Date, Sellers agree to jointly indemnify and hold harmless Purchasers, the Subject Companies and each of their respective Representatives, subsidiaries, direct and indirect parent companies, shareholders, partners, members, managers, officers and directors (the “Purchaser Indemnitees”) for any

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Losses suffered, incurred or paid, directly or indirectly, by them as a result of, or arising out of or related to: (i) any failure of any representation or warranty made by Sellers in Article III or in any schedule, exhibit, certificate or disclosure letter delivered pursuant to this Agreement to be true and correct on and as ofthe date of this Agreement or Closing Date as if made on such date (other than those made on a specified date, which shall be true and correct as of such specified date); (ii) any breach of any covenant or agreement by any of the Sellers contained in this Agreement; (iii) Environmental Liabilities; (iv) Taxes of any Subject Company that relate to periods prior to the Closing Date; (v) any Company Transaction Expenses not paid by Sellers; (vi) any failure to pay the Purchase Price Adjustment to Purchaser pursuant to Section 2.3(f)(ii); (vii) any withdrawal Liability related to a U.S. Multiemployer Plan incurred within twenty-four (24) months after the Closing by any of the Subject Companies; (viii) any Liability relating to the failure of a Subject Company to hold any Permit set forth in Section 6.2(vi) of the Sellers Disclosure Letter, including any Liability incurred in obtaining such Permits; and (ix) any fraud and/or any intentional omission or intentional misrepresentation with respect to any representation or warranty made by Sellers in Article III or in any schedule, exhibit, certificate or disclosure letter delivered pursuant to this Agreement. The indemnification obligations set forth in Section 8.2(iii) shall survive the Closing and terminate on the date that is five years after the Closing Date. The indemnification obligations set forth in Section 8.2 (iv) shall survive the Closing and terminate on the 90th day following the date that the applicable statute of limitations for any such Taxes expires.

Section 8.3    Indemnification by Purchasers. Subject to the limitations set forth in this Article VIII, from and after the Closing Date, Purchasers agree to and shall jointly indemnify and hold harmless Sellers and their respective Representatives, subsidiaries, direct and indirect parent companies, shareholders, partners, members, managers, officers and directors (the “Seller Indemnitees”) for any Losses suffered, incurred or paid, directly or indirectly, by them as a result of, arising out of, or related to: (i) any failure of any representation or warranty made by Purchasers in Article IV or in any schedule, exhibit or certificate delivered pursuant to this Agreement to be true and correct on and as of the date of this Agreement or Closing Date as if made on such date (other than those made on a specified date, which shall be true and correct in all material respects as of such specified date); (ii) any breach of any covenant or agreement by any of the Purchasers contained in this Agreement; and (iii) any failure to pay the Purchase Price Adjustment to Sellers pursuant to Section 2.3(f)(i).

Section 8.4    Limitation on Indemnification.

(a)Notwithstanding anything to the contrary contained in this Agreement, (i) Sellers shall not be liable for any claim for indemnification pursuant to Section 8.2(i) unless and until the aggregate amount of Losses which may be recovered from Sellers equals or exceeds $2,000,000 (the “Deductible”), in which case Purchasers shall be entitled to recover the aggregate amount of all Losses; and (ii) the maximum aggregate amount of indemnifiable Losses which may be recovered for indemnification pursuant to Section 8.2(i), Section 8.2(iii), Section 8.2(iv) and Section 8.2(vii) shall be an amount equal to the then outstanding balance of the Indemnification Escrow Amount.

(b)Notwithstanding anything herein to the contrary (i) the limitations set forth in Section 8.1 and Section 8.4 shall not apply to Losses incurred by any Purchaser Indemnitee in connection with or arising from any breach of any representation or warranty of Sellers in Section 3.2(a), Section 3.3, Section 3.5, Section 3.6, and Section 3.21; and (ii) in no event shall any Indemnified Party be entitled to double recovery under this Agreement.

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(c)For purposes of determining whether there has been an inaccuracy in, misrepresentation of or breach of, any representation or warranty contained in this Agreement (other than those representations and warranties contained in Section 3.8(a) and Section 3.8(d)), and for purposes of calculating any Losses resulting therefrom, the terms “material”, “materiality”, “Material Adverse Effect” or similar qualifications contained in such representations and warranties shall be disregarded.

Section 8.5    Losses Net of Insurance, etc.

(a)The amount of any Loss for which indemnification is provided under Section 8.2 or Section 8.3 shall be, without duplication, net of (i) any amount for which a reserve or accrual is included in the Closing Working Capital as finally determined pursuant to Section 2.3; (ii) any amounts recovered by the Indemnified Party pursuant to any indemnification by or indemnification agreement with any third party; or (iii) any insurance proceeds or other cash receipts or sources of reimbursement received as an offset against such Loss (each source of recovery referred to in clauses (ii) and (iii), a “Collateral Source”). Indemnification under this Article VIII shall not be available unless the Indemnified Party uses commercially reasonable efforts (litigation excepted), to seek recovery from all Collateral Sources. The Indemnifying Party may require an Indemnified Party to assign the rights to seek recovery pursuant to the preceding sentence to the extent such assignment is permitted by the relevant insurance policy; provided, however, that the Indemnifying Party will then be responsible for pursuing such claim at its own expense. If the amount to be netted hereunder in connection with a Collateral Source from any payment required under Section 8.2 or Section 8.3 is received after payment by the Indemnifying Party of any amount otherwise required to be paid to an Indemnified Party to this Article VIII, the Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any amount that the Indemnifying Party would not have had to pay pursuant to this Article VIII had such receipt been made at the time of such payment (or in the case where the Indemnified Party is a Purchaser Indemnitee, the Indemnified Party shall promptly deposit such amount with the escrow agent pursuant to the Escrow Agreement, such amount to be held pursuant to the terms of this Agreement and the Escrow Agreement and shall become part of the Indemnification Escrow Fund thereunder).

(b)Notwithstanding anything to the contrary contained in this Agreement, Sellers shall not be liable for any Losses that result from, arise out of, or relate to breaches of the representations and warranties contained in Section 3.20 or the indemnification obligation contained in Section 8.2(iii) to the extent such Losses result from, arise out of, or relate to:

(i)any change in any Environmental Law on or after the Closing Date;

(ii)any voluntary disclosure to any Governmental Entity on or after the Closing Date by or on behalf of the Purchaser Indemnitees;

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(iii)any investigation actions for purposes of risk assessment, corrective, removal or remedial actions or other measures taken in response to or to correct, remedy or bring into compliance any environmental conditions involving or relating to a Subject Company (“Corrective Actions”), that exceed the minimum Corrective Actions reasonably necessary to comply with any Environmental Law in effect as of the Closing Date or that are substantially more costly than the most cost-effective means that are reasonably necessary to achieve compliance with any Environmental Law in effect as of the Closing Date (including the use of reasonable and customary deed restrictions or other reasonable and customary regulatory controls where applicable).

(c)Notwithstanding anything to the contrary contained in this Agreement, with respect to any indemnification claim made for a breach of the representations and warranties provided in Section 3.20 or the indemnification obligation provided in Section 8.2(iii), Purchasers shall conduct and control any Corrective Actions required to satisfy the indemnification obligations thereunder.

(d)Purchasers acknowledge that their and the Purchasers Indemnitees' sole and exclusive remedy against Sellers, their Affiliates or any of their officers, directors, employees, agents or partners (“Seller-Related Persons”) for any Losses relating to Environmental Liabilities is under Section 8.2 (as limited by this Section 8.5) of this Agreement. In furtherance of the foregoing, from and after the Closing Date, except for any Losses for which Seller is obligated to indemnify Purchaser Indemnitees pursuant to Section 8.2 (as limited by this Section 8.5) (i) the Purchasers hereby release, on their own behalf (and agree that their Affiliates, successors and assigns, officers, directors, employees, agents or partners rights hereunder shall be accordingly limited), to the fullest extent permitted under applicable Law, all Seller-Related Persons from any Environmental Liabilities incurred by the Purchaser Indemnitees; and (ii) the Purchasers hereby waive, on their own behalf (and agree that their Affiliates, successors and assigns, officers, directors, employees, agents and partners rights hereunder shall be accordingly limited), to the fullest extent permitted under applicable Law, any claim or remedy for Environmental Liabilities against any Seller-Related Person now or hereafter available under any applicable Environmental Law, including the Comprehensive Environmental Response, Compensation, and Liability Act or similar international, foreign, federal, or regional Law, whether or not in existence on the date hereof.

(e)With respect to the Golden Parachute Obligations, Sellers shall be obligated to bear the cost of any payments made pursuant to the Golden Parachute Obligations by the corresponding Subject Company to any of the Recipients. For such purposes, Primary Purchaser shall notify Primary Seller in writing, certified by an officer of Primary Purchaser, of the termination of the labor relationship with the Recipient and the payment of the corresponding Golden Parachute Obligation with respect to such Recipient, and the Primary Parties, shall promptly upon receipt of such notice, instruct the escrow agent to release, in favor of the corresponding Subject Company, the amount corresponding to the relevant Golden Parachute Obligation from the Golden Parachute Escrow Amount. Within three (3) Business Days following on the date that is two (2) years after the Closing Date, the Primary Parties shall cause the escrow agent to release any remaining balance in the Golden Parachute Escrow Amount to Primary Seller on behalf of Sellers. The Parties hereby agree that if any Golden Parachute Obligation is paid with funds of the Golden Parachute Escrow Amount, neither Purchasers nor any of their Affiliates (including, after the Closing Date, the Subject Companies) will enter into any labor relationship with the corresponding Recipient for a period of twelve (12) months commencing on the date in which the Golden Parachute Obligation was paid to the Recipient; provided, however, that in no event shall this provision prohibit or limit in any way the hiring of such Recipient as part of an acquisition, merger, consolidation or similar transaction in which such Recipient becomes an employee of Purchasers or their Affiliates.

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Section 8.6    Indemnification Procedure.

(a)Any Person entitled to indemnification pursuant to Section 8.2 or Section 8.3, including, any claim by a Person described in Section 8.7 (an “Indemnified Party”), which might give rise to indemnification hereunder, shall deliver to the Party from which indemnification is sought (the “Indemnifying Party”) a certificate (a “Claim Certificate”), which Claim Certificate shall:

(i)state that the Indemnified Party will incur liability for, or has otherwise suffered, as the case may be, Losses for which such Indemnified Party believes it is entitled to indemnification pursuant to this Agreement; and

(ii)to the extent known by the Indemnified Party specify in reasonable detail each individual item of Loss included in the amount so stated, the date such item should be paid, the basis for any anticipated Losses; provided, however, that in no event shall any Indemnified Parties failure to so specify limit its rights to indemnification hereunder.

(b)In the event that the Indemnifying Party shall object to the indemnification of an Indemnified Party in respect of any claim or claims specified in any Claim Certificate (other than a Third Party Claim, which is addressed in Section 8.7), the Indemnifying Party shall, within thirty (30) days after receipt by the Indemnifying Party of such Claim Certificate, deliver to the Indemnified Party a notice to such effect, specifying in reasonable detail the basis for such objection. In this case, the Indemnified Party shall be permitted to submit such dispute to arbitration as set forth in Section 10.9.

(c)Claims for Losses specified in any Claim Certificate to which an Indemnifying Party shall not object in writing within thirty (30) days of receipt of such Claim Certificate (other than a Third Party Claim, which is addressed in Section 8.7) and claims for Losses the validity and amount of which have been finally determined in accordance with this Agreement hereof or shall have been settled as described in Section 8.7, are hereinafter referred to, collectively, as “Agreed Claims”. Within ten (10) Business Days of the determination of the amount of any Agreed Claim, if the Indemnified Party is (i) any Seller Indemnitee, Primary Purchaser shall pay to the Indemnified Party an amount equal to the Agreed Claim by wire transfer in immediately available funds to the bank account or accounts designated by the Indemnified Party in a notice to the Indemnifying Party not less than two (2) Business Days prior to such payment, or (ii) any Purchaser Indemnitee, (A) the Primary Parties shall execute and deliver to the escrow agent in terms of the Escrow Agreement a joint written instruction instructing the escrow agent to pay to the Indemnified Party an amount equal to the Agreed Claim by wire transfer in immediately available funds to the bank account or accounts designated by Primary Purchaser in such joint written instruction and (B) to the extent the amount of the Agreed Claims exceeds the then-remaining Indemnification Escrow Amount and such excess may be attributable to any of Sellers Indemnification obligations other than pursuant to Section 8.2(i), then the Primary Seller on behalf of Sellers shall pay to the Indemnified Party an amount equal to such excess amount by wire transfer in immediately available funds to the bank account or accounts designated by Primary Purchaser.

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Section 8.7    Third-Party Claims.

(a)If a claim by a third party is made against any Indemnified Party (a “Third Party Claim”), and if such Indemnified Party intends to seek indemnity with respect thereto under this Article VIII, such Indemnified Party shall promptly notify the Indemnifying Party of such Third Party Claim; provided, that the failure to so notify shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent that the Indemnifying Party is actually and materially prejudiced thereby. The Indemnifying Party shall have three (3) Business Days after receipt of such notice to assume the conduct and control, through counsel reasonably acceptable to the Indemnified Party at the expense of the Indemnifying Party, of the settlement or defense of such Third Party Claim; provided, that the Indemnifying Party shall permit the Indemnified Party to participate in such settlement or defense through counsel chosen by such Indemnified Party; provided, that the fees and expenses of such counsel shall be borne by such Indemnified Party, and provided, further, that the Indemnifying Party shall not be entitled to assume control of such defense and shall pay the fees and expenses of counsel retained by the Indemnified Party if (i) such Third Party Claim for indemnification relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation against Purchasers; (ii) such Third Party Claim seeks an attachment (embargo) or other non-monetary relief against the Indemnified Party; (iii) the Indemnifying Party, in the reasonable judgment of the Indemnified Party, failed or is failing to vigorously prosecute or defend such Third Party Claim; (iv) no conflict of interest arises that prohibits, in the reasonable judgment of the Indemnified Party, a single counsel from representing both the Indemnifying Party and Indemnified Party in connection with the defense of such Third Party Claim; (v) the defense of such Third Party Claim by the Indemnifying Party will, in the reasonable judgment of the Indemnified Party, have a material adverse effect on the Indemnified Party or any business thereof; or (vi) the Indemnifying Party does not have sufficient financial resources, in the reasonable judgment of the Indemnified Party, to satisfy the amount of any adverse monetary judgment that is reasonably likely to result.

(b)If the Indemnifying Party has assumed the defense of a Third Party Claim in accordance with Section 8.7(a), the Indemnified Party shall have the right to employ separate counsel in any such action or claim and to participate in the defense of such Third Party Claim, but the fees and expenses of such counsel shall not be at the expense of the Indemnifying Party. So long as the Indemnifying Party assumes the defense of a Third Party Claim, neither the Indemnified Party nor the Indemnifying Party (except as provided in Section 8.7(d)) shall admit any liability with respect to, or settle, compromise or discharge, such Third Party Claim without the other party's prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned). Notwithstanding the preceding sentence, the Indemnified Party shall have the right, in its sole discretion, to pay or settle any such Third Party Claim at its own expense, provided that, in such event, the Indemnified Party shall waive any rights to indemnity hereunder in respect of the matter so settled without the Indemnifying Party's consent.

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(c)If the Indemnifying Party does not notify the Indemnified Party within three (3) Business Days after the receipt of the Indemnified Party's notice of a Third Party Claim of indemnity hereunder that it elects to undertake the defense thereof, the Indemnified Party shall have the right to contest, settle or compromise the Third Party Claim but shall not thereby waive any right to indemnity therefor pursuant to this Agreement.

(d)The Indemnifying Party shall not, except with the consent of the Indemnified Party (which consent shall not be unreasonably withheld, delayed or conditioned), enter into any settlement unless such settlement (i) is entirely indemnifiable by the Indemnifying Party pursuant to this Article VIII; (ii) includes as an unconditional term thereof the giving by the Person or Persons asserting such Third Party Claim to all Indemnified Parties of an unconditional release from all liability with respect to such Third Party Claim or consent to entry of any judgment; and (iii) does not impose any injunctive relief or other restrictions of any kind or nature on any Indemnified Party.

(e)The Indemnified Party shall make available records relating to such Third Party Claim and shall furnish, at the Indemnifying Party's expense to the Indemnifying Party and/or its counsel, such employees of the Indemnified Party as may be reasonably necessary for the preparation of the defense of any such Third Party Claim or for testimony as witnesses in any proceeding relating to such Third Party Claim.

Section 8.8    Sole Remedy/Waiver. The Parties hereto acknowledge and agree that (i) in the event that the Closing occurs, the remedies provided for in this Agreement shall be the Parties' sole and exclusive remedy for any breach of the representations and warranties or covenants contained in this Agreement (except with respect to any fraud and/or any intentional omission or intentional misrepresentation with respect to any representation or warranty made by Sellers in Article III or in any schedule, exhibit, certificate or disclosure letter delivered pursuant to this Agreement); and (ii) Purchasers' sole source of recourse from Sellers for any Losses indemnifiable pursuant to Section 8.2(i), Section 8.2(iii), Section 8.2(iv), and Section 8.5(e) shall be payment from the Indemnification Escrow Fund.

Section 8.9    Release of the Indemnification Escrow Amount. The Indemnification Escrow Amount will be released from time to time in accordance with this Section 8.9:

(a)on the eighteen month anniversary of the Closing Date, Purchasers and Sellers shall jointly instruct the escrow agent to disburse from the Indemnification Escrow Amount to Sellers the funds that, as of such date, represent the then-remaining amount of the Indemnification Escrow Amount, if any, in excess of the sum of (i) $77 million plus, (ii) any additional amount by which the Indemnification Escrow Amount was increased pursuant to Section 5.16(f) (such excess amount, the “Release Amount”), with such Release Amount to be reduced by (A) the amount, if any, which Sellers and Purchasers have instructed the escrow agent to disburse funds from the Indemnification Escrow Amount but which have not actually been disbursed as of such date, and (B) the amount of any claim submitted by any Purchaser Indemnitee prior to such date, in accordance with this Article VIII that remains pending as of such date;

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(b)on the fifth anniversary of the Closing Date, Purchasers and Sellers shall jointly instruct the escrow agent to disburse from the Indemnification Escrow Amount to Sellers the funds that, as of such date, represent the then-remaining amount of the Indemnification Escrow Amount, if any, in excess of $25 million, with such excess amount to be reduced by (A) the amount, if any, which Sellers and Purchasers have instructed the escrow agent to disburse funds from the Indemnification Escrow Amount but which have not actually been disbursed as of such date and, (B) the amount of any claim submitted by any Purchaser Indemnitee prior to such date, in accordance with this Article VIII that remains pending as of such date; and

(c)on the 90th day after the seventh anniversary of the Closing Date, Purchasers and Sellers shall jointly instruct the escrow agent to disburse from the Escrow Amount to each Seller its respective share of the then-remaining Escrow Amount, with such Escrow Amount to be reduced by (A) the amount, if any, which Sellers and Purchasers have instructed the escrow agent to disburse funds from the Indemnification Escrow Amount but which have not actually been disbursed as of such date, and (B) the amount of any claim submitted by any Purchaser Indemnitee prior to such date in accordance with this Article VIII that remains pending as of such date.

Article IX

TAX MATTERS

Section 9.1    Section 338 Election. Purchaser shall retain the right of making an irrevocable election under §338(g) of the Code and the regulations promulgated thereunder in connection with the purchase and sale of the Shares of the Subject Companies hereunder (“Section 338(g) Election”). The terms, conditions and procedures relating to the Section 338(g) Election, if made, shall be in accordance with the following:

(a)If Purchasers make a Section 338(g) Election for any or all of the Subject Companies, then Purchasers shall indemnify and hold harmless, and reimburse the Sellers for any incremental Taxes (including any interest, penalties and or other statutory additions to Tax) that may be incurred by the Sellers by reason of the Section 338(g) Election being made which computation shall be based upon the difference between:

(i)the after-Tax proceeds that the Sellers would have realized after payment of all federal, state and local Taxes attributable to their sale of stock of the Company to Purchaser in a transaction in which no Section 338(g) Election had been made; and

(ii)the actual after-Tax proceeds realized after payment of all federal, state and local Taxes attributable to their sale of stock of the Company to Purchaser (taking into account, without limitation, the additional Tax liability resulting from and/or attributable to, the Section 338(g) Election, and including Tax liability resulting from the reimbursement hereunder).

(b)The intent of this Section is to provide the same after-Tax proceeds to Sellers if Purchasers make a Section 338(g) Election with respect to the Subject Companies as would be realized by Sellers if no Section 338(g) Election had been made, and shall be interpreted in accordance with such intent. The adjustment resulting from this Section is generally referred to herein as the “338 Tax Adjustment”.

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(c)The Parties agree that the Purchase Price and the liabilities of the Subject Companies (plus other relevant items) will be allocated to the assets of the Subject Companies for all purposes (including Tax and financial accounting purposes) in a manner consistent with Code §338 and §1060 and the regulations there under. Purchasers and the Subject Companies shall file all Tax Returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation.

(d)Sellers shall provide Purchasers with a schedule computing the amount of the Tax resulting from the §338 election within 20 days after the Parties agree to the allocation of the Purchase Price. In making such calculation, the highest corporate federal and state tax rates to which Seller is subject shall be used and any other items of income, deduction, gain, loss, or credits of Sellers shall be ignored.

(e)Purchasers shall pay and/or reimburse the Sellers for all reasonable professional and other fees and costs (including attorneys', accountants and filing and similar fees) incurred by the Sellers by reason of or in any way relating to the Section 338 Election being made (collectively, the “338 Costs”). Within thirty (30) days of Seller's Representative providing with an itemization of the 338 Costs, Primary Purchaser shall pay to the Sellers the amount of the 338 Costs.

Section 9.2    Tax Returns Due After the Closing Date.

(a)Full Year 2012 and Short Period 2013 Income Tax Returns. With respect to Tax Returns for the Subject Companies for all periods ending on or prior to the Closing Date which are due to be filed after the Closing Date, including the Subject Companies' U.S. federal and state income and franchise Tax Returns, the Mexican Income Tax return and the Canadian Income Tax Return for the 2012 accounting year (if not filed before the Closing Date) and applicable U.S. federal and state income and franchise Tax Returns and Canadian Income Tax Return for the period from January 1, 2013 to the Closing Date (the “Short Period” with the federal and any related state income and franchise Tax Returns for the Short Period being collectively referred to as the “Short Period Return”), the Company shall engage an outside accounting firm to be selected by the Primary Seller which firm shall prepare the Tax Returns of the Subject Companies (at the Company's expense) in a manner consistent with prior period practices and under the overall direction and control of the Primary Seller. At least forty-five (45) days prior to filing such Tax Returns (but in the case of the Short Period Returns no later than December 15, 2013), Primary Seller or said accounting firm shall provide copies of such Tax Returns and complete access to all information relied upon as support for such Tax Returns, including to transfer pricing documentation, to Primary Purchaser for its review. Primary Purchaser shall advise Primary Seller of any disagreement with items shown on such Tax Returns within twenty (20) business days after Primary Purchaser's receipt of such copies. If Primary Purchaser advises Primary Seller of its disagreement with any items on such Tax Returns, Primary Purchaser and Primary Seller shall cooperate to resolve any such disagreement. If Primary Purchaser and Primary Seller are unable to resolve any such disagreement by the due date of such Tax Returns, the disputed Tax Returns will be filed, as prepared, with the appropriate Tax Authority on or before the due date and such disagreement shall be referred to a nationally recognized independent accounting firm chosen by and mutually acceptable to both Primary Purchaser and Primary Seller, which firm shall decide the matter within thirty (30) days after it is submitted to them. The fees of such accounting firm shall be paid by the Company. The decision of such accounting firm shall be final and binding upon the Parties absent fraud or gross negligence. In the event the decision of such accounting firm includes filing an amended Tax Return, the Sellers shall be responsible for filing all amended Tax Returns and Sellers shall be responsible for the payment, if any, of any additional Tax (including penalties and interest thereon) due and payable pursuant to such amended Tax Return, and Sellers shall be entitled to any overpayment of Tax pursuant to such amended Tax Return. Once prepared,

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Primary Purchaser shall have an appropriate officer of the applicable Subject Company sign such Tax Returns prepared pursuant to this Section 9.2 and shall cause the applicable Subject Company to timely file such Tax Returns. Purchasers shall not be responsible for the completeness and accuracy of any Tax Returns filed pursuant to this Section 9.2. With respect to any Tax covered by this Section 9.2 Sellers shall promptly pay to Purchasers (or be paid by Purchasers, if a credit) the difference between what was accrued as a liability for said Tax in the calculation of the Closing Working Capital and the actual liability shown on the Tax Returns as filed.

(b)Straddle Period Taxes. In the case of any taxable period that includes (but does not end on) the Closing Date (a “Straddle Period”):

(i)Property Taxes. Sellers shall be responsible for all real, personal and intangible property Taxes (“Property Taxes”) allocated to the period on and prior to the Closing Date, regardless of when such Property Taxes become due and payable. Property Taxes allocated to the period on and prior to the Closing Date shall be equal to the amount of such Property Taxes for the entire taxable period multiplied by a fraction, the numerator of which is the number of days that are in the taxable period on and prior to the Closing Date and the denominator of which is the total number of days in the taxable period. The Tax liability for any Property Taxes allocated to periods on and prior to the Closing Date (but payable after the Closing Date) shall be paid by Sellers to Purchasers on the Closing Date.

(ii)2013 Mexican Income Tax Return. Sellers shall be responsible for Mexican income Tax allocated to the Straddle Period. The portion of the Mexican income Tax allocated to the Straddle Period shall be equal to the amount of the entire 2013 Mexican income Tax liability multiplied by a fraction, the numerator of which is the number of days during the Straddle Period that are in the period on and prior to the Closing Date and the denominator of which is the number of days in the Straddle Period. Sellers shall promptly pay to Purchasers (or be credited by Purchasers) the difference between what was accrued as a liability for 2013 Mexican income Taxes in calculating the Closing Working Capital and Sellers' allocated responsibility as calculated in this Section 9.2(b).

Primary Purchaser shall prepare (at Primary Purchaser's expense) the 2013 Mexican Income Tax Return. At least thirty (30) days prior to filing such Tax Return, Primary Purchaser shall provide a copy of such Tax Return and complete access to all information relied upon as support for such Tax Return, including transfer pricing documentation, to Primary Seller for its review. Primary Seller shall advise Purchaser of any disagreement with items shown on such Tax Return within fifteen (15) business days after Primary Seller's receipt of such copy. If Primary Seller advises Primary Purchaser of its disagreement with any items on such Tax Return, Primary Purchaser and Primary Seller shall cooperate to resolve any such disagreement. If Primary Purchaser and Primary Seller are unable to resolve any such disagreement by the due date of such Tax Return, the disputed Tax Return will be filed, as prepared, with the appropriate Tax Authority on or before the due date and such disagreement shall be referred to a firm recognized by the Instituto Mexicano de Contadores Públicos, A.C. chosen by and mutually acceptable to both Primary Purchaser and Primary Seller, which firm shall decide the matter within thirty (30) days after it is submitted to them. The fees of such accounting firm shall be divided equally between the Purchasers and Sellers. The decision of such accounting firm shall be final and binding upon all Parties absent fraud or gross negligence.

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(c)Audit - Sales and Use Taxes. In the event that an audit relating to sales and use Taxes of a Subject Company includes both pre‑Closing and post‑Closing periods, Primary Seller and Primary Purchaser will use their respective commercially reasonable efforts to direct the tax auditor to calculate any pre‑Closing assessment based exclusively on pre‑Closing transactions and/or statistical samples and any post‑Closing assessment based exclusively on post‑Closing transactions and/or statistical samples. Notwithstanding Primary Seller's and Primary Purchaser's efforts pursuant to the preceding sentence, Sellers shall be liable for any assessment, Liability or other amounts determined to be due with respect to periods or transactions on or prior to the Closing Date and Purchasers shall be liable for any assessment, Liability or other amounts determined to be due with respect to periods or transactions following the Closing Date.

Section 9.3    Tax Refunds. Sellers shall be entitled to any refund of any Taxes of any of the Subject Companies which relate to Tax periods or portions thereof ending on or before the Closing Date to the extent that such refunds where not reflected in the calculation of the Closing Working Capital. Purchasers shall pay to Sellers any such refund (net of any Taxes of any Purchasers or any Subject Company) within fifteen (15) days after the receipt thereof. Notwithstanding anything to the contrary herein, Purchasers shall have no obligation to reimburse Sellers for any Tax attributes, net operating losses or the like.

Section 9.4    Cooperation on Tax Matters.

(a)The Purchasers, the Subject Companies and Sellers shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to Section 9.2 and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other Party's request) the provision of records and information that are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Purchasers and Sellers each shall cause the Subject Companies: (i) to retain all books and records with respect to Tax matters pertinent to the Subject Companies and their subsidiaries relating to any taxable period beginning before the Closing Date until the expiration of the applicable statute of limitations (and, to the extent notified by Purchaser or Sellers, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) to give Purchasers and Sellers reasonable written notice prior to transferring, destroying or discarding any such books and records and, to the extent requested by Purchasers or Sellers, as the case may be, to allow any such requesting party to take possession of such books and records.

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(b)Purchasers and Sellers further agree, upon request, to use their best efforts to obtain any certificate or other document from any Governmental Entity or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby).

Purchasers and Sellers further agree, upon reasonable written request, to provide the other Party with all information that either Party may be required to report pursuant to any applicable Tax laws, including pursuant to §6043 or §6043A of the Code or any regulations promulgated thereunder.

Section 9.5    Amended Returns and Retroactive Elections. Purchasers shall not, and shall not cause or permit the Subject Companies or any of their Subsidiaries to (i) amend any Tax Returns filed with respect to any tax year ending on or before the Closing Date or with respect to any Straddle Period; or (ii) make any Tax election that has retroactive effect to any such year or to any Straddle Period, in each such case without the prior written consent of the Sellers, which consent shall not be unreasonably withheld.

Section 9.6    Certain Transfer Taxes and Fees. All ministerial transfer, documentary, sales, use, registration or other Taxes and all conveyance fees, recording charges, other fees and charges (including penalties and interest) incurred in connection with the consummation of the transactions set forth herein shall be borne by the Purchasers; provided, however, that this Section 9.6 shall not apply to income Taxes, withholding Taxes or other similar Taxes.

Article X

MISCELLANEOUS

Section 10.1    Fees and Expenses. Except as set forth herein, all costs and expenses incurred in connection with this Agreement and the consummation of the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses.

Section 10.2    Extension; Waiver. Subject to the express limitations herein and subject to applicable Law, at any time prior to the Closing, the Parties, may (i) extend the time for the performance of any of the obligations or other acts of the other Party hereto, or the End Date; (ii) waive any inaccuracies in the representations and warranties contained herein by the other Party or in any document, certificate or writing delivered pursuant hereto by such other Party; or (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of any Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed by or on behalf of both Parties or such Party, as the case may be. No failure or delay on the part of any Party hereto in the exercise of any right hereunder shall impair such right or be construed as a waiver of, or acquiescence in, any breach of any representation, warranty, covenant or agreement herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.

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Section 10.3    Notices.

(a)Except as otherwise provided herein, all notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail to Primary Seller in case of any notices, requests, claims, demands, waivers and other communication addressed to any of the Sellers, or to Primary Purchaser in case of notices, requests, claims, demands, waivers and other communications addressed to any of the Purchasers, as follows (or, in each case, as otherwise notified by Primary Seller or Primary Purchaser) and shall be effective and deemed to have been given when received if delivered by hand or overnight courier service or certified or registered mail on any Business Day:

If to Sellers, to Primary Seller:

Blvd. Manuel Ávila Camacho No. 138

Col. Lomas de Chapultepec

11560, México, Distrito Federal

Attention: Mr. Marcos Achar Levy

email: marcos@comex.com.mx

if to Purchaser, to Primary Purchaser:

The Sherwin-Williams Company

101 Prospect Avenue

Cleveland, Ohio 44115

USA

Attention: Senior Vice President - Corporate Planning and Development

With a copy to:

The Sherwin-Williams Company

101 Prospect Avenue

Cleveland, Ohio 44115

USA

Attention: Senior Vice President, General Counsel and Secretary

(b)Notices sent by multiple means, each of which is in compliance with the provisions of this Agreement will be deemed to have been received at the earliest time provided for by this Agreement.

Section 10.4    Entire Agreement. This Agreement, together with the Exhibits, Annexes, Schedules and the Sellers Disclosure Letter, contains the entire understanding of the Parties hereto with respect to the subject matter contained herein and supersedes all prior agreements and understandings, oral and written, with respect thereto.

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Section 10.5    Binding Effect; Benefit; Assignment. This Agreement shall inure to the benefit of and be binding upon the Parties. Except with respect to Article VIII of this Agreement, which shall inure to the benefit of each Purchaser Indemnitee and Seller Indemnitee, all of whom are intended as express third-party beneficiaries thereof, no other Person not party to this Agreement shall be entitled to the benefits of this Agreement. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties without the prior written consent of the other Party.

Section 10.6    Amendment and Modification. This Agreement may not be amended except by a written instrument executed by all Parties to this Agreement.

Section 10.7    Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. Signed counterparts of this Agreement may be delivered by facsimile and by scanned .pdf image.

Section 10.8    Applicable Law. THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED MEXICAN STATES, WITHOUT REGARD TO THE CONFLICT OF LAWS RULES THEREOF.

Section 10.9    Arbitration.

(a)Except with respect to any claim asserted with respect to Sections 5.2, 5.3, 5.4, 5.9, 5.12, 5.13 and 5.16. pursuant to Section 10.11, any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including any question regarding its existence, validity or termination, or regarding a breach of this Agreement, shall be referred to and settled by arbitration under and in accordance with the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”).

(b)The arbitration proceeding will take place in Dallas, Texas, U.S., and will be conducted in the English language. The arbitration panel will consist of three (3) arbitrators appointed pursuant to the ICC Rules; provided, however, that the Primary Parties shall have thirty (30) days from the confirmation of the second arbitrator to agree upon the third arbitrator who shall act as president. Failing such agreement, the third arbitrator shall be appointed by the International Chamber of Commerce.

Section 10.10    Severability. If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions contained in this Agreement shall remain valid and binding and shall in no way be affected, impaired or invalidated, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable term, provision, covenant or restriction or any portion thereof had never been contained herein.

Section 10.11    Specific Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement to be performed after the Closing Date were not performed in accordance with their specific terms or were otherwise breached or threatened to be breached and that an award of money damages would be inadequate in such event. Accordingly, it is acknowledged that the Parties shall be entitled to request an Order for specific performance to prevent breaches of this Agreement and to

64

enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law as a remedy for any such breach or threatened breach. Each Party further agrees that neither the other Party nor any other Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 10.11, and each Party hereto irrevocably waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

Section 10.12    Rules of Construction. The Parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and have participated jointly in the drafting of this Agreement and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, Sellers and Purchasers execute this Agreement as of the date first above written.

SELLERS

AVISEP, S.A. DE C.V.

By: /s/ Marcos Achar Levy

Name: Marcos Achar Levy

Title: Attorney-in-fact

BEVISEP, S.A. DE C.V.

By: /s/ David Achar Contreras

Name: David Achar Contreras

Title: Attorney-in-fact

PURCHASERS

The Sherwin-Williams Company

By: /s/ C.M. Connor

Name: C.M. Connor

Title: Chairman and Chief Executive Officer

Sherwin-Williams (Caribbean) N.V.

By: /s/ C.M. Connor

Name: C.M. Connor

Title: Director

66

EX-13

Exhibit 13

2

FINANCIAL PERFORMANCE

FINANCIAL TABLE OF CONTENTS

Financial Summary	18
Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Reports of Management and the Independent Registered Public Accounting Firm	40
Consolidated Financial Statements and Notes	44
Cautionary Statement Regarding Forward-Looking Information	77
Shareholder Information	78
Corporate Officers and Operating Management	80

17

FINANCIAL SUMMARY

(millions of dollars except as noted and per share data)

	2012			2011			2010			2009			2008
Operations
Net sales	$	9,534		$	8,766		$	7,776		$	7,094		$	7,980
Cost of goods sold	5,328			5,021			4,295			3,831			4,481
Selling, general and administrative expenses	3,260			2,961			2,728			2,535			2,644
Impairments and dissolution	4			5			4			36			55
Interest expense	43			42			71			40			66
Income before income taxes	907			742			678			623			714
Net income	631			442			462			436			477
Financial Position
Accounts receivable - net	$	1,033		$	990		$	917		$	696		$	770
Inventories	920			927			918			738			864
Working capital - net	1,273			99			150			376			(28		)
Property, plant and equipment - net	966			957			952			819			860
Total assets	6,235			5,229			5,169			4,324			4,416
Long-term debt	1,632			639			648			783			304
Total debt	1,705			993			1,045			818			834
Shareholders’ equity	1,792			1,517			1,609			1,491			1,606
Per Common Share Information
Average shares outstanding (thousands)	101,715			103,471			107,022			113,514			116,835
Book value	$	17.35		$	14.61		$	15.04		$	13.62		$	13.72
Net income - diluted (1)	6.02			4.14			4.21			3.78			4.00
Net income - basic (1)	6.15			4.22			4.28			3.80			4.04
Cash dividends	1.56			1.46			1.44			1.42			1.40
Financial Ratios
Return on sales	6.6		%	5.0		%	5.9		%	6.1		%	6.0		%
Asset turnover	1.5		x	1.7		x	1.5		x	1.6		x	1.8		x
Return on assets	10.1		%	8.4		%	8.9		%	10.1		%	10.8		%
Return on equity (2)	41.6		%	27.5		%	31.0		%	27.1		%	26.7		%
Dividend payout ratio (3)	37.7		%	34.7		%	38.1		%	35.5		%	29.8		%
Total debt to capitalization	48.8		%	39.6		%	39.4		%	35.4		%	34.2		%
Current ratio	1.7			1.0			1.1			1.3			1.0
Interest coverage (4)	22.2		x	18.4		x	10.6		x	16.6		x	11.9		x
Net working capital to sales	13.3		%	1.1		%	1.9		%	5.3		%	(0.3		)%
Effective income tax rate (5)	30.4		%	40.4		%	31.8		%	30.0		%	33.3		%
General
Capital expenditures	$	157		$	154		$	125		$	91		$	117
Total technical expenditures (6)	140			130			103			102			106
Advertising expenditures	247			227			218			218			234
Repairs and maintenance	83			78			76			69			76
Depreciation	152			151			140			145			143
Amortization of intangible assets	27			30			35			26			22
Shareholders of record (total count)	7,954			8,360			8,706			9,151			9,469
Number of employees (total count)	34,154			32,988			32,228			29,220			30,677
Sales per employee (thousands of dollars)	$	279		$	266		$	241		$	243		$	260
Sales per dollar of assets	1.53			1.68			1.50			1.64			1.81

(1) All earnings per share amounts are presented using the two-class method. See Note 15.

(2) Based on net income and shareholders’ equity at beginning of year.

(3) Based on cash dividends per common share and prior year’s diluted net income per common share.

(4) Ratio of income before income taxes and interest expense to interest expense.

(5) Based on income before income taxes.

(6) See Note 1, page 51 of this report, for a description of technical expenditures.

18

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY

The Sherwin-Williams Company, founded in 1866, and its consolidated wholly owned subsidiaries (collectively, the “Company”) are engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region, Europe and Asia. The Company is structured into four reportable segments – Paint Stores Group, Consumer Group, Global Finishes Group and Latin America Coatings Group (collectively, the “Reportable Segments”) – and an Administrative Segment in the same way it is internally organized for assessing performance and making decisions regarding allocation of resources. See pages 6 through 15 of this report and Note 18, on pages 74 through 76 of this report, for more information concerning the Reportable Segments.

The Company’s financial condition and liquidity remained strong in 2012 and net operating cash improved primarily due to improving domestic architectural paint demand. Net working capital improved$1.17 billion at December 31, 2012 compared to 2011 due primarily to a significant increase in cash and cash equivalents and a decrease in current liabilities. On December 4, 2012, the Company issued $700.0 million of 1.35% Senior Notes due 2017, and $300.0 million of 4.00% Senior Notes due 2042, which was the primary reason for the large increase in cash and cash equivalents. The Company has been able to arrange sufficient short-term borrowing capacity at reasonable rates and the Company has sufficient total available borrowing capacity to fund its current operating needs. Net operating cash increased$152.1 million to $887.9 million in 2012, which included a first quarter payment of $59.1 million relating to a settlement reached in the fourth quarter of 2011 with the Internal Revenue Service (the “IRS Settlement”), from $735.8 million in 2011, which included a fourth quarter IRS Settlement payment of $60.0 million. Strong net operating cash provided the funds necessary to invest in new stores, manufacturing and distribution facilities, acquire businesses, pay down debt, maintain financial stability and return cash to shareholders through dividends and treasury stock purchases.

Results of operations for the Company were strong and improved in many areas in 2012, primarily due to an improving domestic architectural paint market. Consolidated net sales increased8.8 percent in 2012 to $9.53 billion from $8.77 billion in 2011 due primarily to higher paint sales volume in the Paint Stores Group and selling price increases. Acquisitions increased consolidated net sales 0.9 percent in 2012. Gross profit as a percent of consolidated net sales increased to 44.1 percent in 2012 from 42.7 percent in 2011 due primarily to increased paint sales volume and selling price increases partially offset by increases in raw material costs. Selling, general and administrative expenses (SG&A) increased$298.8 million in 2012 compared to 2011 due primarily to new stores, increased service expenses to support higher sales levels and maintain customer service, a settlement with the United States Department of Labor (the "DOL Settlement") and acquisitions partially offset by foreign currency translation rate fluctuations. See "2012 Subsequent Event - DOL Settlement" on page 33 and Note 9 on page 67. SG&A increased as a percent of consolidated

net sales to 34.2 percent in 2012 as compared to 33.8 percent in 2011 due primarily to the DOL Settlement partially offset by higher sales levels and good cost control in all Reportable Segments. Trademark impairment charges of $4.1 million occurred in 2012 due to planned conversion of various acquired brands. Impairments of trademarks were $5.5 million in 2011. Interest expense increased$0.3 million in 2012. The effective income tax rate was 30.4 percent for 2012 and 40.4 percent for 2011, which included $75.0 million related to the IRS Settlement. Excluding the impact of the IRS Settlement would result in an effective income tax rate for 2011 of 30.3 percent. Diluted net income per common share increased45.4 percent to $6.02 per share for 2012, which included charges relating to the DOL Settlement ($.47 per share), from $4.14 per share a year ago, which included charges relating to the IRS Settlement ($.70 per share).

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation and fair presentation of the consolidated financial statements, accompanying notes and related financial information included in this report are the responsibility of management. The consolidated financial statements, accompanying notes and related financial information included in this report have been prepared in accordance with U.S. generally accepted accounting principles. The consolidated financial statements contain certain amounts that were based upon management’s best estimates, judgments and assumptions. Management utilized certain outside economic sources of information when developing the bases for their estimates and assumptions. Management used assumptions based on historical results, considering the current economic trends, and other assumptions to form the basis for determining appropriate carrying values of assets and liabilities that were not readily available from other sources. Actual results could differ from those estimates. Also, materially different amounts may result under materially different conditions, materially different economic trends or from using materially different assumptions. However, management believes that any materially different amounts resulting from materially different conditions or material changes in facts or circumstances are unlikely to significantly impact the current valuation of assets and liabilities that were not readily available from other sources.

19

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All of the significant accounting policies that were followed in the preparation of the consolidated financial statements are disclosed in Note 1, on pages 48 through 51 of this report. The following procedures and assumptions utilized by management directly impacted many of the reported amounts in the consolidated financial statements.

Non-Traded Investments

The Company has invested in the U. S. affordable housing and historic renovation real estate markets. These investments have been identified as variable interest entities. However, the Company is not the primary beneficiary and did not consolidate the operations of the investments. The carrying amounts of these non-traded investments, which approximate market value, were determined based on cost less related income tax credits determined by the effective yield method. The Company’s risk of loss from these non-traded investments is limited to the amount of its contributed capital. The Company has no ongoing capital commitments, loan requirements or guarantees with the general partners that would require any future cash contributions other than the contractually committed capital contributions that are disclosed in the contractual obligations table on page 29 of this report. See Note 1, on page 48 of this report, for more information on non-traded investments.

Accounts Receivable

Accounts receivable were recorded at the time of credit sales net of provisions for sales returns and allowances. All provisions for allowances for doubtful collection of accounts are included in Selling, general and administrative expenses and were based on management’s best judgment and assessment, including an analysis of historical bad debts, a review of the aging of Accounts receivable and a review of the current creditworthiness of customers. Management recorded allowances for such accounts which were believed to be uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices, customer satisfaction claims and pricing discrepancies. However, depending on how such potential issues are resolved, or if the financial condition of any of the Company’s customers were to deteriorate and their ability to make required payments became impaired, increases in these allowances may be required. At December 31, 2012, no individual customer constituted more than 5 percent of Accounts receivable.

Inventories

Inventories were stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method based on inventory quantities and costs determined during the fourth quarter. Inventory quantities were adjusted during the fourth quarter as a result of annual physical inventory counts taken at all locations. If inventories accounted for on the LIFO method are reduced on a year-over-year basis, liquidation of certain quantities carried at costs prevailing in prior years occurs. Management recorded the best estimate of net realizable value for obsolete and discontinued inventories based on historical experience and current trends through reductions to inventory cost by recording a provision included in Cost of goods sold. Where management estimated that the reasonable

market value was below cost or determined that future demand was lower than current inventory levels, based on historical experience, current and projected market demand, current and projected volume trends and other relevant current and projected factors associated with the current economic conditions, a reduction in inventory cost to estimated net realizable value was made. See Note 3, on page 52 of this report, for more information regarding the impact of the LIFO inventory valuation.

Purchase Accounting, Goodwill and Intangible Assets

In accordance with the Business Combinations Topic of the ASC, the Company used the purchase method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed were recognized as Goodwill. The valuations of the acquired assets and liabilities will impact the determination of future operating results. In addition to using management estimates and negotiated amounts, the Company used a variety of information sources to determine the estimated fair values of acquired assets and liabilities including: third-party appraisals for the estimated value and lives of identifiable intangible assets and property, plant and equipment; third-party actuaries for the estimated obligations of defined benefit pension plans and similar benefit obligations; and legal counsel or other experts to assess the obligations associated with legal, environmental and other contingent liabilities. The business and technical judgment of management was used in determining which intangible assets have indefinite lives and in determining the useful lives of finite-lived intangible assets in accordance with the Goodwill and Other Intangibles Topic of the ASC.

As required by the Goodwill and Other Intangibles Topic of the ASC, management performs impairment tests of goodwill and indefinite-lived intangible assets on an annual basis, as well as whenever an event occurs or circumstances change that indicate impairment has more likely than not occurred. The optional qualitative assessment, which allows companies to skip the annual two-step quantitative test if it is not more likely than not that impairment has occurred, is performed when deemed appropriate.

20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In accordance with the Goodwill and Other Intangibles Topic of the ASC, management tests goodwill for impairment at the reporting unit level. A reporting unit is an operating segment per the Segment Reporting Topic of the ASC or one level below the operating segment (component level) as determined by the availability of discrete financial information that is regularly reviewed by operating segment management or an aggregate of component levels of an operating segment having similar economic characteristics. At the time of goodwill impairment testing (if performing a quantitative assessment), management determines fair value through the use of a discounted cash flow valuation model incorporating discount rates commensurate with the risks involved for each reporting unit. If the calculated fair value is less than the current carrying value, impairment of the reporting unit may exist. The use of a discounted cash flow valuation model to determine estimated fair value is common practice in impairment testing. The key assumptions used in the discounted cash flow valuation model for impairment testing include discount rates, growth rates, cash flow projections and terminal value rates. Discount rates are set by using the Weighted Average Cost of Capital (“WACC”) methodology. The WACC methodology considers market and industry data as well as Company-specific risk factors for each reporting unit in determining the appropriate discount rates to be used. The discount rate utilized for each reporting unit is indicative of the return an investor would expect to receive for investing in such a business. Operational management, considering industry and Company-specific historical and projected data, develops growth rates, sales projections and cash flow projections for each reporting unit. Terminal value rate determination follows common methodology of capturing the present value of perpetual cash flow estimates beyond the last projected period assuming a constant WACC and low long-term growth rates. As an indicator that each reporting unit has been valued appropriately through the use of the discounted cash flow valuation model, the aggregate of all reporting units fair value is reconciled to the total market capitalization of the Company.

The Company performed the optional qualitative assessment for its 2012 goodwill impairment test for each of its reporting units. The 2011 goodwill impairment test, in which the fair values of each of the reporting units exceeded their respective carrying values by more than ten percent, served as the starting point. Management identified future projected net income, return on average net assets employed and discount rate as the most relevant drivers affecting the fair value calculations. A budget-to-actual analysis was performed in which each reporting unit's key metrics were compared against budgeted amounts in order to assess the validity of future projected net income used in the 2011 analysis. Management evaluated whether there were any capital investment or working capital deviations from budget that would significantly affect return on average net assets employed. Management considered how the discount rates used in the fair value calculation would have changed since the 2011 goodwill impairment test, and performed a sensitivity analysis noting that it would require a discount rate significantly higher than what would be expected in order for any reporting unit to have a fair value not more than 10% in excess of its carrying value. Management also analyzed macroeconomic conditions, industry and market considerations, cost factors, overall financial performance of the Company,

entity-specific events and reporting unit-specific events. Based on the results of the qualitative assessment, management determined that it was not more likely than not that any of the reporting units were impaired and did not need to perform a quantitative test for any of the reporting units.

In accordance with the Goodwill and Other Intangibles Topic of the ASC, management tests indefinite-lived intangible assets for impairment at the asset level, as determined by appropriate asset valuations at acquisition. Management utilizes the royalty savings method and valuation model to determine the estimated fair value for each indefinite-lived intangible asset or trademark. In this method, management estimates the royalty savings arising from the ownership of the intangible asset. The key assumptions used in estimating the royalty savings for impairment testing include discount rates, royalty rates, growth rates, sales projections and terminal value rates. Discount rates used are similar to the rates developed by the WACC methodology considering any differences in Company-specific risk factors between reporting units and trademarks. Royalty rates are established by management and valuation experts and periodically substantiated by valuation experts. Operational management, considering industry and Company-specific historical and projected data, develops growth rates and sales projections for each significant trademark. Terminal value rate determination follows common methodology of capturing the present value of perpetual sales estimates beyond the last projected period assuming a constant WACC and low long-term growth rates. The royalty savings valuation methodology and calculations used in 2012 impairment testing are consistent with prior years.

The discounted cash flow and royalty savings valuation methodologies require management to make certain assumptions based upon information available at the time the valuations are performed. Actual results could differ from these assumptions. Management believes the assumptions used are reflective of what a market participant would have used in calculating fair value considering the current economic conditions. See Notes 2 and 4, on pages 51 through 53 of this report, for a discussion of businesses acquired, the estimated fair values of goodwill and identifiable intangible assets recorded at acquisition date and reductions in carrying value of goodwill and indefinite-lived

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intangible assets recorded as a result of impairment tests in accordance with the Goodwill and Other Intangibles Topic of the ASC.

Property, Plant and Equipment and Impairment of Long-Lived Assets

Property, plant and equipment was stated on the basis of cost and depreciated principally on a straight-line basis using industry standards and historical experience to estimate useful lives. In accordance with the Property, Plant and Equipment Topic of the ASC, if events or changes in circumstances indicated that the carrying value of long-lived assets may not be recoverable or the useful life had changed, impairment tests were performed or the useful life was adjusted. Undiscounted future cash flows were used to calculate the recoverable value of long-lived assets to determine if such assets were impaired. Where impairment was identified, management determined fair values for assets using a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets. Growth models were developed using both industry and company historical results and forecasts. If the usefulness of an asset was determined to be impaired, management estimated a new useful life based on the period of time for projected uses of the asset. Such models and changes in useful life required management to make certain assumptions based upon information available at the time the valuation or determination was performed. Actual results could differ from these assumptions. Management believes the assumptions used are reflective of what a market participant would have used in calculating fair value or useful life considering the current economic conditions. All tested long-lived assets or groups of long-lived assets had undiscounted cash flows that were substantially in excess of their carrying value, except as noted in Note 4. See Notes 4 and 5, on pages 52 through 56 of this report, for a discussion of the reductions in carrying value or useful life of long-lived assets in accordance with the Property, Plant and Equipment Topic of the ASC.

Exit or Disposal Activities

Management is continually re-evaluating the Company’s operating facilities against its long-term strategic goals. Liabilities associated with exit or disposal activities are recognized as incurred in accordance with the Exit or Disposal Cost Obligations Topic of the ASC and property, plant and equipment is tested for impairment in accordance with the Property, Plant and Equipment Topic of the ASC. Provisions for qualified exit costs are made at the time a facility is no longer operational, include amounts estimated by management and primarily include post-closure rent expenses or costs to terminate the contract before the end of its term and costs of employee terminations. Adjustments may be made to liabilities accrued for qualified exit costs if information becomes available upon which more accurate amounts can be reasonably estimated. If impairment of property, plant and equipment exists, the carrying value is reduced to fair value estimated by management. Additional impairment may be recorded for subsequent revisions in estimated fair value. See Note 5, on pages 54 through 56 of this report, for information concerning impairment of property, plant and equipment and accrued qualified exit costs.

Other Liabilities

The Company is self-insured for certain liabilities, primarily worker’s compensation claims, employee medical benefits, and automobile, property, general and product liability claims. Estimated amounts were accrued for certain worker’s compensation, employee medical and disability benefits, automobile and property claims filed but unsettled and estimated claims incurred but not reported based upon management’s estimated aggregate liability for claims incurred using historical experience, actuarial assumptions followed in the insurance industry and actuarially-developed models for estimating certain liabilities. Certain estimated general and product liability claims filed but unsettled were accrued based on management’s best estimate of ultimate settlement or actuarial calculations of potential liability using industry experience and actuarial assumptions developed for similar types of claims.

Defined Benefit Pension and Other Postretirement Benefit Plans

To determine the Company’s ultimate obligation under its defined benefit pension plans and postretirement benefit plans other than pensions, management must estimate the future cost of benefits and attribute that cost to the time period during which each covered employee works. To determine the obligations of such benefit plans, management uses actuaries to calculate such amounts using key assumptions such as discount rates, inflation, long-term investment returns, mortality, employee turnover, rate of compensation increases and medical and prescription drug costs. Management reviews all of these assumptions on an ongoing basis to ensure that the most current information available is being considered. An increase or decrease in the assumptions or economic events outside management’s control could have a direct impact on the Company’s results of operations or financial condition.

In accordance with the Retirement Benefits Topic of the ASC, the Company recognizes each plan’s funded status as an asset for overfunded plans and as a liability for unfunded or underfunded plans. Actuarial gains and losses and prior service costs are recognized and recorded in Cumulative other comprehensive loss, a component of Shareholders’ equity. The amounts

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recorded in Cumulative other comprehensive loss will continue to be modified as actuarial assumptions and service costs change, and all such amounts will be amortized to expense over a period of years through the net pension and net periodic benefit costs.

Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised. Prior to July 1, 2009, the contribution was based on six percent of compensation for certain covered employees. Under the revised plan, such participants are credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula.

A reduction in the over-funded status of the Company’s defined benefit pension plans at December 31, 2008, due to the decrease in market value of equity securities held by the plans, increased the future amortization of actuarial losses recognized in Cumulative comprehensive loss. This amortization increased net pension costs in 2010, 2011, and 2012. An increase in market value of equity securities held by the plans during 2010 and 2011 will decrease the future amortization of actuarial losses recognized in Cumulative comprehensive loss, but not enough to offset the full extent of losses experienced in 2008. The excess in market value of equity securities held by the plans versus the expected returns in 2012 will decrease the future amortization of actuarial losses. The amortization of actuarial losses on plan assets, partially offset by a decrease in discount rates on projected benefit obligations, will decrease net pension costs in 2013. See Note 6, on pages 56 through 62 of this report, for information concerning the Company’s defined benefit pension plans and postretirement benefit plans other than pensions.

Debt

The fair values of the Company’s publicly traded long-term debt were based on quoted market prices. The fair values of the Company’s non-traded long-term debt were estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. See Note 1, on page 48 of this report, for the carrying amounts and fair values of the Company’s long-term debt, and Note 7, on pages 62 through 63 of this report, for a description of the Company’s long-term debt arrangements.

Environmental Matters

The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrues for environmental-related activities for which commitments or clean-up plans have been developed and for which costs can be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, actuarial, consulting and law firms. Due to uncertainties surrounding environmental investigations and remediation activities, the Company’s ultimate liability may result in costs that are

significantly higher than currently accrued. See pages 27 through 29 and Note 8, on pages 63 and 64 of this report, for information concerning the accrual for extended environmental-related activities and a discussion concerning unaccrued future loss contingencies.

Litigation and Other Contingent Liabilities

In the course of its business, the Company is subject to a variety of claims and lawsuits, including litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial and contractual claims. Management believes that the Company has properly accrued for all known liabilities that existed and those where a loss was deemed probable for which a fair value was available or an amount could be reasonably estimated in accordance with all present U.S. generally accepted accounting principles. However, because litigation is inherently subject to many uncertainties and the ultimate result of any present or future litigation is unpredictable, the Company’s ultimate liability may result in costs that are significantly higher than currently accrued. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties involved, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. See pages 31 through 34 of this report and Note 9, on pages 64 through 67 of this report, for information concerning litigation.

In addition, the Company may be subject to potential liabilities for which a loss was not deemed probable at this time and an amount could not be reasonably estimated due to uncertainties involved. See pages 30 and 31 of this report for more information concerning contingent liabilities.

Income Taxes

The Company estimated income taxes in each jurisdiction that it operated. This involved estimating taxable earnings, specific taxable and deductible items, the likelihood of generating sufficient future taxable income to utilize deferred tax assets and possible exposures related to future tax audits. To the extent these estimates change, adjustments to deferred and

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accrued income taxes will be made in the period in which the changes occur.

In October 2011, the Company reached a settlement of the IRS’ audit of the Company’s employee stock ownership plan (ESOP). The Company has fully resolved all IRS issues for the 2003 through 2009 tax years relating to the matters challenging the ESOP related federal income tax deductions claimed by the Company and proposing substantial excise taxes and penalties. The IRS Settlement (including interest), which resolved all ESOP related tax issues, resulted in an after-tax charge related to federal and state income taxes totaling approximately $75.0 million, or $.70 per diluted common share, and an additional reduction in Shareholders’ equity of approximately $51.2 million in the Company’s fourth quarter of 2011. The Company paid $60.0 million of the IRS Settlement to the IRS during 2011 and made a final payment of approximately $59.1 million in the first quarter of 2012. The Company received a refund of $8.9 million for other issues related to the 2006 and 2007 audit period. The IRS commenced an examination of the Company’s U.S. income tax returns for the 2008 and 2009 tax years in the third quarter of 2011. Fieldwork is expected to be completed during 2013. At this time, the Company has determined that an insignificant refund is due for issues under review during this audit period.

See Note 14, on pages 71 through 72 of this report, for information concerning the Company’s unrecognized tax benefits, interest and penalties and current and deferred tax expense.

Stock-Based Compensation

The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. The Company follows the “modified prospective” method as described in the Topic whereby compensation cost is recognized for all share-based payments granted after December 31, 2005.

The Company estimates the fair value of option rights using a Black-Scholes-Merton option pricing model which requires management to make estimates for certain assumptions. Management and a consultant continuously review the following significant assumptions: risk-free interest rate, expected life of options, expected volatility of stock and expected dividend yield of stock. An increase or decrease in the assumptions or economic events outside management’s control could have a direct impact on the Company’s results of operations. See Note 12, on pages 69 through 70 of this report, for more information on stock-based compensation.

Revenue Recognition

The Company’s revenue was primarily generated from the sale of products. All sales of products were recognized when shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue is reasonably assured at time of sale. Discounts were recorded as a reduction to sales in the same period as the sale resulting in an appropriate net sales amount for the period. Standard sales terms are final and returns or exchanges are not permitted unless expressly

stated. Estimated provisions for returns or exchanges, recorded as a reduction resulting in net sales, were established in cases where the right of return existed. The Company offered a variety of programs, primarily to its retail customers, designed to promote sales of its products. Such programs required periodic payments and allowances based on estimated results of specific programs and were recorded as a reduction resulting in net sales. The Company accrued the estimated total payments and allowances associated with each transaction at the time of sale. Additionally, the Company offered programs directly to consumers to promote the sale of its products. Promotions that reduced the ultimate consumer sale prices were recorded as a reduction resulting in net sales at the time the promotional offer was made, generally using estimated redemption and participation levels. The Company continually assesses the adequacy of accruals for customer and consumer promotional program costs earned but not yet paid. To the extent total program payments differ from estimates, adjustments may be necessary. Historically, these total program payments and adjustments have not been material.

FINANCIAL CONDITION, LIQUIDITY AND CASH FLOW

Overview

The Company’s financial condition and liquidity remained strong in 2012 and net operating cash improved primarily due to improving domestic architectural paint demand. Net working capital improved$1.17 billion at December 31, 2012 compared to 2011 due primarily to a significant increase in cash and cash equivalents of $829.9 million and a decrease in current liabilities. On December 4, 2012, the Company issued $700.0 million of 1.35% Senior Notes due 2017 and $300.0 million of 4.00% Senior Notes due 2042, which was the primary reason for the large increase in cash and cash equivalents. Accounts receivable were up$42.6 million while Inventories were down$6.5 million. Deferred tax net assets were down$22.5 million while the remaining current assets increased$44.1 million. Accounts payable decreased$42.2 million, Accrued taxes decreased$68.5 million, and Short-term borrowings decreased$277.3 million while all other current liabilities increased$101.7 million. The Company’s current ratio improved to 1.68 at December 31, 2012 from 1.05 at December 31, 2011. Total debt at December 31, 2012increased$711.5 million to $1.70 billion from $993.4 million at December 31, 2011 due primarily to the debt issuance on December 4, 2012. Total debt increased as a percentage of total capitalization to 48.8 percent from 39.6 percent at the end

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of 2011. At December 31, 2012, the Company had remaining borrowing ability of $2.20 billion. Net operating cash increased$152.1 million to $887.9 million in 2012 from $735.8 million in 2011 due primarily to an increase in net income of $189.2 million partially offset by cash used to decrease Accrued taxes by $70.3 million. Net operating cash increased as a percent to sales to 9.3 percent in 2012 compared to 8.4 percent in 2011. Strong Net operating cash provided the funds necessary to invest in new stores, manufacturing and distribution facilities, acquire businesses, and return cash to shareholders through dividends and treasury stock purchases. In 2012, the Company used Net operating cash to invest $157.1 million in capital additions and improvements, purchase $557.8 million in treasury stock, pay $160.9 million in cash dividends to its shareholders of common stock, and invest $99.2 million in acquisitions.

Net Working Capital

Total current assets less Total current liabilities (net working capital) improved$1.17 billion to a surplus of $1.27 billion at December 31, 2012 from a surplus of $98.9 million at December 31, 2011. The improvement in net working capital related primarily to a significant increase in cash and cash equivalents of $829.9 million and a decrease in current liabilities. Accounts receivable were up$42.6 million while Inventories were down$6.5 million. Deferred tax net assets were down$22.5 million while the remaining current assets increased$44.1 million. Accounts payable decreased$42.2 million, Accrued taxes decreased$68.5 million, and Short-term borrowings decreased$277.3 million while all other current liabilities increased$101.7 million. The Company has sufficient total available borrowing capacity to fund its current operating needs. The increase in Total current assets and the decrease in Total current liabilities caused the Company’s current ratio to improve to 1.68 at December 31, 2012 from 1.05 at December 31, 2011. Accounts receivable as a percent of Net sales decreased to 10.8 percent in 2012 from 11.3 percent in 2011 as sales increased more than accounts receivables due primarily to a full year of sales for businesses acquired during 2011 versus only a partial year with comparable accounts receivable balances in each period. Accounts receivable days outstanding decreased to 55 days in 2012 from 56 days 2011. In 2012, provisions for allowance for doubtful collection of accounts decreased$4.1 million, or 7.9 percent. Inventories decreased as a percent of Net sales to 9.7 percent in 2012 from 10.6 percent in 2011 due primarily to a full year of sales for businesses acquired during 2011 versus only a partial year in 2011 with comparable inventory levels in each period partially offset by rising raw material costs. Inventory days outstanding decreased to 90 days in 2012 from 96 days in 2011. Accounts payable decreased in 2012 to $923.0 million compared to $965.1 million last year due primarily to timing of payments.

Goodwill and Intangible Assets

Goodwill, which represents the excess of cost over the fair value of net assets acquired in purchase business combinations, increased$48.0 million in 2012 due primarily to $42.1 million additional goodwill resulting from acquisitions.

Intangible assets increased$41.7 million in 2012. Acquired finite-lived and indefinite-lived intangible assets of $66.5 million and $3.8 million of capitalized software costs more than offset amortization of finite-lived intangible assets of $27.0 million and impairments of indefinite-lived intangible assets of $4.1 million. Acquired finite-lived intangible assets included assets such as covenants not to compete, customer lists and product formulations. Costs related to designing, developing, obtaining and implementing internal use software are capitalized and amortized in accordance with the Goodwill and Other Intangibles Topic of the ASC. See Notes 2 and 4, on pages 51 through 53 of this report, for a description of acquired goodwill, identifiable intangible assets and asset impairments recorded in accordance with the Goodwill and Other Intangibles Topic of the ASC and summaries of the remaining carrying values of goodwill and intangible assets.

Deferred Pension and Other Assets

Deferred pension assets of $249.9 million at December 31, 2012 represent the excess of the fair value of assets over the actuarially determined projected benefit obligations, primarily of the domestic salaried defined benefit pension plan. The increase in Deferred pension assets during 2012 of $21.6 million, from $228.4 million last year, was due primarily to an increase in the fair value of equity securities held by the salaried defined benefit pension plan partially offset by increased projected benefit obligations resulting from changes in actuarial assumptions. In accordance with the accounting prescribed by the Retirement Benefits Topic of the ASC, the increase in the value of the Deferred pension assets is offset in Cumulative other comprehensive loss and is amortized as a component of Net pension costs over a defined period of pension service. See Note 6, on pages 56 through 62 of this report, for more information concerning the excess fair value of assets over projected benefit obligations of the salaried defined benefit pension plan and the amortization of actuarial gains or losses relating to changes in the excess assets and other actuarial assumptions.

Other assets decreased$2.8 million to $366.1 million at December 31, 2012 due primarily to amortization of investments related to the affordable housing and historic renovation real estate properties. 

Property, Plant and Equipment

Net property, plant and equipment increased$9.4 million to $965.9 million at December 31, 2012 due primarily to capital

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expenditures of $157.1 million, acquired assets of $11.4 million and currency translation adjustments of $5.2 million partially offset by depreciation expense of $152.2 million and sale or disposition of assets with remaining net book value of $12.2 million. Capital expenditures during 2012 in the Paint Stores Group were primarily attributable to the opening of new paint stores and improvements in existing stores. In the Consumer Group, capital expenditures during 2012 were primarily related to efficiency improvements and maintenance items in existing production and distribution facilities. Capital expenditures in the Global Finishes Group were primarily attributable to improvements in existing manufacturing and distribution facilities. Capital expenditures in the Latin America Coatings Group were primarily attributable to the opening of new specialty stores and improvements in existing manufacturing and distribution facilities. The Administrative segment incurred capital expenditures primarily for headquarters building and information systems hardware. In 2013, the Company expects to spend slightly more than 2012 for capital expenditures. The predominant share of the capital expenditures in 2013 is expected to be for various productivity improvement and maintenance projects at existing manufacturing and distribution facilities, new store openings and new or upgraded information systems hardware. The Company does not anticipate the need for any specific long-term external financing to support these capital expenditures.

Debt

There were no borrowings outstanding under the domestic commercial paper program at December 31, 2012. Borrowings outstanding under this program at December 31, 2011 and 2010 were $264.9 million and $173.5 million, respectively, with weighted-average interest rates of 0.2 percent for both years. Borrowings outstanding under various foreign programs at December 31, 2012 were $69.0 million with a weighted-average interest rate of 2.8 percent. At December 31, 2011 and December 31, 2010, foreign borrowings were $81.4 million and $215.1 million with weighted-average interest rates of 4.9 percent and 2.9 percent, respectively. Long-term debt, including the current portion, increased a net $988.8 million during 2012 due primarily to the Senior Notes debt issuance totaling $1.00 billion on December 4, 2012, partially offset by regularly scheduled principal payments made on short-term debt. The Senior Notes are covered under a shelf registration filed with the Securities and Exchange Commission (SEC) on December 16, 2009 . The proceeds from the issuance of the Senior Notes will be used for general corporate purposes, including repayment of short-term borrowings and financing acquisitions.

On July 19, 2010, Sherwin-Williams Luxembourg S.à r.l., a wholly-owned subsidiary of the Company, entered into a €200.0 million (Euro) credit facility. On December 28, 2010, the Company reduced the aggregate amount of this credit facility to €150.0 million (Euro). During 2011, the aggregate amount of this credit facility was further reduced to €97.0 million (Euro). On September 19, 2012, this credit facility was replaced by a new €95.0 million (Euro) five-year revolving credit facility. On July 19, 2010, Sherwin-Williams Canada Inc., a wholly-owned subsidiary of the Company, entered into a CAD 75.0 million credit facility. On June 29, 2012, this credit facility was replaced

by a new CAD 75.0 million five-year credit facility. These credit facilities are being used for general corporate purposes, including refinancing indebtedness and for acquisitions.

On January 30, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit of up to an aggregate availability of $500.0 million. On April 23, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250.0 million. On November 14, 2012, the Company entered into a three-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250.0 million. The three credit agreements entered into in 2012 replace prior credit facilities that matured in 2012 and 2011. At December 31, 2012, 2011 and 2010, there were no borrowings outstanding under any of these credit agreements.

The Company uses a revolving credit agreement primarily to satisfy its commercial paper program’s dollar for dollar liquidity requirement. On January 8, 2010, the Company terminated the existing $845.0 million revolving credit agreement and entered into a new $500.0 million revolving credit agreement. On July 8, 2011, the Company entered into a new five-year $1.05 billion revolving credit agreement, which replaced the existing three-year $500.0 million credit agreement. The new credit agreement allows the Company to extend the maturity of the facility with two one-year extension options and to increase the aggregate amount of the facility to $1.30 billion, both of which are subject to the discretion of each lender.

See Note 7, on pages 62 through 63 of this report, for a detailed description of the Company’s debt outstanding and other available financing programs.

Defined Benefit Pension and Other Postretirement Benefit Plans

In accordance with the accounting prescribed by the Retirement Benefits Topic of the ASC, the Company’s total liability for unfunded or underfunded defined benefit pension plans

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increased$7.4 million to $40.0 million. Postretirement benefits other than pensions increased$21.3 million to $338.1 million at December 31, 2012. The increase in the liability was due to the increase in the actuarially determined postretirement benefit obligation due primarily to changes in the actuarial assumptions and unfavorable claims experience and other demographics.

Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised. Prior to July 1, 2009, the contribution was based on six percent of compensation for covered employees. Under the revised plan, such participants are credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Amounts previously recorded in Cumulative other comprehensive loss in accordance with the provisions of the Retirement Benefits Topic of the ASC were modified in 2009 resulting in a decrease in comprehensive loss due primarily to the change in the domestic salaried defined benefit pension plan and an increase in the excess plan assets over the actuarially calculated projected benefit obligation in the domestic defined benefit pension plans. Partially offsetting this decreased loss were modifications to actuarial assumptions used to calculate projected benefit obligations.

Effective October 1, 2011, participation in The Sherwin-Williams Company Salaried Employees’ Pension Investment Plan, a defined benefit plan, was frozen for new hires. All newly hired U.S. non-collectively bargained employees will be eligible to participate in The Sherwin-Williams Company Salaried Employees’ Revised Pension Investment Plan.

The assumed discount rate used to determine the actuarial present value of projected defined benefit pension and other postretirement benefit obligations for domestic plans was decreased from 4.40 percent to 3.73 percent at December 31, 2012 due to decreased rates of high-quality, long-term investments and was slightly higher for foreign defined benefit pension plans. The rate of compensation increases used to determine the projected benefit obligations remained at 4.0 percent for domestic pension plans and was slightly higher on most foreign plans. In deciding on the rate of compensation increases, management considered historical Company increases as well as expectations for future increases. The expected long-term rate of return on assets remained at 7.5 percent for 2012 for domestic pension plans and was slightly lower for most foreign plans. In establishing the expected long-term rate of return on plan assets for 2012, management considered the historical rates of return, the nature of investments and an expectation for future investment strategies. The assumed health care cost trend rates used to determine the net periodic benefit cost of postretirement benefits other than pensions for 2012 were 8.0 percent for medical and prescription drug cost increases, both decreasing gradually to 5.0 percent in 2019. The assumed health care cost trend rates used to determine the benefit obligation at December 31, 2012 were 8.0 percent for medical and prescription drug cost increases. In developing the assumed health care cost trend rates, management considered industry data, historical Company experience and expectations for future health care costs.

For 2013 Net pension cost and Net periodic benefit cost recognition for domestic plans, the Company will use a discount rate of 3.73 percent, an expected long-term rate of return on assets of 6.0 percent, a rate of compensation increase of 4.0 percent and cost trend rates of 8.0 percent for health care and prescription drug cost increases. Slightly higher discount rates and rates of compensation increases and lower expected long-term rates of return on plan assets will be used for most foreign plans. Use of these assumptions, a change in the domestic salaried defined benefit pension plan, and amortization of actuarial gains will result in a domestic Net pension cost in 2013 that is expected to be approximately $2.4 million lower than in 2012 and a Net periodic benefit cost for postretirement benefits other than pensions that is expected to increase slightly in 2013 compared to 2012. See Note 6, on pages 56 through 62 of this report, for more information on the Company’s obligations and funded status of its defined benefit pension plans and postretirement benefits other than pensions.

Other Long-Term Liabilities

Other long-term liabilities increased$1.2 million during 2012 due primarily to an increase in accruals for extended environmental-related liabilities of $8.0 million, an increase in deferred compensation liabilities of $5.2 million, an increase in long-term pension liabilities of $1.6 million, and an increase in long-term commitments related to the affordable housing and historic renovation real estate properties of $2.5 million partially offset by a decrease in non-current deferred tax liabilities of $14.9 million. See below and Note 8, on pages 63 and 64 of this report, for further information on environmental-related long-term liabilities.

Environmental-Related Liabilities

The operations of the Company, like those of other companies in the same industry, are subject to various federal, state and local environmental laws and regulations. These laws and regulations not only govern current operations and products, but also impose potential liability on the Company for past operations. Management expects environmental laws and regulations to impose increasingly stringent requirements upon the Company and the industry in the future. Management believes that the Company conducts its operations in compliance with applicable environmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance. 

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Depreciation of capital expenditures and other expenses related to ongoing environmental compliance measures were included in the normal operating expenses of conducting business. The Company’s capital expenditures, depreciation and other expenses related to ongoing environmental compliance measures were not material to the Company’s financial condition, liquidity, cash flow or results of operations during 2012. Management does not expect that such capital expenditures, depreciation and other expenses will be material to the Company’s financial condition, liquidity, cash flow or results of operations in 2013.

The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites (including sites which were previously owned and/or operated by businesses acquired by the Company). In addition, the Company, together with other parties, has been designated a potentially responsible party under federal and state environmental protection laws for the investigation and remediation of environmental contamination and hazardous waste at a number of third-party sites, primarily Superfund sites. In general, these laws provide that potentially responsible parties may be held jointly and severally liable for investigation and remediation costs regardless of fault. The Company may be similarly designated with respect to additional third-party sites in the future.

The Company accrues for estimated costs of investigation and remediation activities at its currently or formerly owned sites and third-party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are determined based on currently available facts regarding each site. The Company accrues a specific estimated amount when such an amount and a time frame in which the costs will be incurred can be reasonably determined. If the best estimate of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is accrued by the Company in accordance with applicable accounting rules and interpretations. The Company continuously assesses its potential liability for investigation and remediation activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated. At December 31, 2012, 2011 and 2010, the Company had total current and long-term accruals for environmental-related activities of $114.3 million, $132.1 million and $149.6 million, respectively.

Due to the uncertainties of the scope and magnitude of contamination and the degree of investigation and remediation activities that may be necessary at certain currently or formerly owned sites and third-party sites, it is reasonably likely that further extensive investigations may be required and that extensive remedial actions may be necessary not only on such sites but on adjacent properties. Depending on the extent of the additional investigations and remedial actions necessary, the Company’s ultimate liability may result in costs that are significantly higher than currently accrued. If the Company’s future loss contingency is ultimately determined to be at the

maximum of the range of possible outcomes for every site for which costs can be reasonably estimated, the Company’s aggregate accruals for environmental-related activities would be $88.7 million higher than the accruals at December 31, 2012.

Two of the Company’s formerly owned sites, described below, account for the majority of the accruals for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at December 31, 2012, 2011 and 2010. At December 31, 2012, $59.1 million, or 51.7 percent, of the total accrual for environmental-related activities related directly to these two sites. Of the aggregate unaccrued exposure at December 31, 2012, $57.0 million, or 64.2 percent, related to the two manufacturing sites. While environmental investigations and remedial actions are in different stages at these sites, additional investigations, remedial actions and/or monitoring will likely be required at each site.

Both of the sites are formerly owned manufacturing facilities in New Jersey that are in various stages of the environmental-related process. At the first site, extensive soil remediation was conducted on-site and completed in 2010 under an agency approved work plan. A small portion of soil remediation remains to be conducted on-site as well as some additional determination of possible off-site soil impacts. Investigation of the area groundwater continues to determine the degree and extent of contamination, both on-site and off-site. Although contamination determined to be associated with historical operations of the Company exists at the second site and adjacent areas, the extent and magnitude of the contamination has not yet been fully quantified, a final remedial action plan has not yet been formulated or no clean up goals have been approved by the lead governmental agency. It is reasonably likely that further extensive investigations may be required or that extensive remedial actions may be necessary at this formerly owned site, in adjacent areas or along adjacent waterways. At both sites, depending on the extent of the additional remedial actions necessary, the ultimate liability for these sites may exceed the amounts currently accrued and the maximum of the ranges of reasonably possible outcomes currently estimated by management.

Management cannot presently estimate the ultimate potential loss contingencies related to these two sites or other less significant sites until such time as a substantial portion of the investigative activities at each site is completed and remedial action plans are developed.

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In accordance with the Asset Retirement and Environmental Obligations Topic of the ASC, the Company has identified certain conditional asset retirement obligations at various current manufacturing, distribution and store facilities. These obligations relate primarily to asbestos abatement and closures of hazardous waste containment devices. Using investigative, remediation and disposal methods that are currently available to the Company, the estimated cost of these obligations is not significant.

In the event any future loss contingency significantly exceeds the current amount accrued, the recording of the ultimate liability may result in a material impact on net income for the annual or interim period during which the additional costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its environmental-related matters or conditional asset retirement obligations will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended

period of time during which environmental investigation and remediation takes place. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

Management expects these contingent environmental-related liabilities and conditional asset retirement obligations to be resolved over an extended period of time. Management is unable to provide a more specific time frame due to the indefinite amount of time to conduct investigation activities at any site, the indefinite amount of time to obtain governmental agency approval, as necessary, with respect to investigation and remediation activities, and the indefinite amount of time necessary to conduct remediation activities.

Contractual Obligations and Commercial Commitments

The Company has certain obligations and commitments to make future payments under contractual obligations and commercial commitments. The following table summarizes such obligations and commitments as of December 31, 2012:

(thousands of dollars)	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1–3 Years		3–5 Years		More than 5 Years
Long-term debt	$	1,638,403	$	3,689	$	500,813	$	700,295	$	433,606
Operating leases	1,108,523		242,360		419,092		255,227		191,844
Short-term borrowings	69,035		69,035
Interest on Long-term debt	602,524		47,677		78,159		62,511		414,177
Purchase obligations (a)	132,235		132,235
Other contractual obligations (b)	386,797		172,613		91,790		48,966		73,428
Total contractual cash obligations	$	3,937,517	$	667,609	$	1,089,854	$	1,066,999	$	1,113,055

^(a)  Relate to open purchase orders for raw materials at December 31, 2012.

^(b)  Relate primarily to the DOL Settlement, estimated future capital contributions to investments in the U.S. affordable housing and historic renovation real estate partnerships and various other contractual obligations.

	Amount of Commitment Expiration Per Period
Commercial Commitments	Total		Less than 1 Year		1–3 Years		3–5 Years		More than 5 Years
Standby letters of credit	$	22,845	$	22,845
Surety bonds	34,630		34,630
Other commercial commitments	56,052		56,052
Total commercial commitments	$	113,527	$	113,527	$	—	$	—	$	—

Warranties

The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary. Changes in the Company’s accrual for product warranty claims during 2012, 2011 and 2010, including customer satisfaction settlements during the year, were as follows:

(thousands of dollars)	2012			2011			2010
Balance at January 1	$	22,071		$	23,103		$	22,214
Charges to expense	28,590			29,957			23,092
Settlements	(27,951		)	(30,989		)	(22,203		)
Balance at December 31	$	22,710		$	22,071		$	23,103

Shareholders’ Equity

Shareholders’ equity increased$274.9 million to $1.79 billion at December 31, 2012 from $1.52 billion last year. The increase in Shareholders’ equity resulted primarily from an increase in retained earnings of $470.1 million and an increase in Other capital of $376.2 million, due primarily to stock options exercised, partially offset by the purchase of treasury

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stock for $557.8 million and an increase in Cumulative other comprehensive loss of $2.5 million. The Company purchased 4.60 million shares of its common stock during 2012 for treasury. The Company acquires its common stock for general corporate purposes and, depending on its cash position and market conditions, it may acquire additional shares in the future. The Company had remaining authorization from its Board of Directors at December 31, 2012 to purchase 16.45 million shares of its common stock. The increase of $2.5 million in Cumulative other comprehensive loss was due primarily to unfavorable foreign currency translation effects of $7.4 million attributable to the weakening of most foreign operations’ functional currencies against the U.S. dollar and the recognition, net of taxes, of $4.8 million in net actuarial gains and prior service costs of defined benefit pension and other postretirement benefit plans.

The increase in Other capital of $376.2 million was due primarily to the recognition of stock-based compensation expense, stock option exercises and related income tax effect. In 2012, redemptions of Preferred stock and Unearned ESOP compensation of $59.2 million occurred. Retained earnings increased$470.1 million during 2012 due to net income of $631.0 million partially offset by $160.9 million in cash dividends paid. The Company’s cash dividend per common share payout target is 30.0 percent of the prior year’s diluted net income per common share. The 2012 annual cash dividend of $1.56 per common share represented 37.7 percent of 2011 diluted net income per common share. The 2012 annual dividend represented the thirty-fourth consecutive year of dividend payments since the dividend was suspended in 1978. At a meeting held on February 13, 2013, the Board of Directors increased the quarterly cash dividend to $.50 per common share. This quarterly dividend, if approved in each of the remaining quarters of 2013, would result in an annual dividend for 2013 of $2.00 per common share or a 33.2 percent payout of 2012 diluted net income per common share. See the Statements of Consolidated Shareholders’ Equity, on page 47 of this report, and Notes 10, 11 and 12, on pages 67 through 70 of this report, for more information concerning Shareholders’ equity.

Cash Flow

Net operating cash increased$152.1 million to $887.9 million in 2012, which included a first quarter IRS Settlement payment of $59.1 million, from $735.8 million in 2011, which included a fourth quarter IRS Settlement payment of $60.0 million, due primarily to an increase in net income of $189.2 million partially offset by an increase in working capital of $5.0 million. Net operating cash provided the funds necessary to support the Company’s acquisitions, sustain its remaining manufacturing and distribution capabilities, maintain its financial stability and return a portion of the cash generated to its shareholders through dividends and treasury stock purchases. Net investing cash decreased$64.7 million to a usage of $342.5 million in 2012 from a usage of $277.8 million in 2011 due primarily to increased cash usage to acquired businesses. Net financing cash increased$761.8 million to a source of $286.6 million in 2012 from a usage of $475.2 million in 2011 due primarily to increased proceeds from total net debt activity of $753.3 million and increased proceeds from stock option

exercises and income tax effect of stock-based compensation exercises and vesting totaling $243.5 million partially offset by increased treasury stock purchases of $190.4 million. In 2012, the Company used Net operating cash to invest $99.2 million in acquisitions, spend $157.1 million in capital additions and improvements, purchase $557.8 million in treasury stock, and pay $160.9 million in cash dividends to its shareholders of common stock.

Management considers a measurement of cash flow that is not in accordance with U.S. generally accepted accounting principles to be a useful tool in its determination of appropriate uses of the Company’s Net operating cash. Management reduces Net operating cash, as shown in the Statements of Consolidated Cash Flows, by the amount reinvested in the business for Capital expenditures and the return of investment to its shareholders by the payments of cash dividends. The resulting value is referred to by management as “Free Cash Flow” which may not be comparable to values considered by other entities using the same terminology. The reader is cautioned that the Free Cash Flow measure should not be compared to other entities unknowingly, and it does not consider certain non-discretionary cash flows, such as mandatory debt and interest payments. The amount shown below should not be considered an alternative to Net operating cash or other cash flow amounts provided in accordance with U.S. generally accepted accounting principles disclosed in the Statements of Consolidated Cash Flows, on page 46 of this report. Free Cash Flow as defined and used by management is determined as follows: 

	Year Ended December 31,
(thousands of dollars)	2012			2011			2010
Net operating cash	$	887,886		$	735,812		$	706,590
Capital expenditures	(157,112		)	(153,801		)	(125,162		)
Cash dividends	(160,939		)	(153,512		)	(156,424		)
Free cash flow	$	569,835		$	428,499		$	425,004

Contingent Liabilities

Life Shield Engineered Systems, LLC (Life Shield) is a wholly owned subsidiary of the Company, which ceased operations in 2012. Life Shield developed and manufactured blast and fragment mitigating systems. The blast and fragment mitigating systems create a potentially higher level of product liability for the Company (as an owner of and supplier to Life Shield) than is normally associated with coatings and related products currently manufactured, distributed and sold by the Company.

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Certain of Life Shield’s technology has been designated as Qualified Anti-Terrorism Technology and granted a Designation under the Support Anti-terrorism by Fostering Effective Technologies Act of 2002 (SAFETY Act) and the regulations adopted pursuant to the SAFETY Act. Under the SAFETY Act, the potentially higher level of possible product liability for Life Shield relating to the technology granted the Designation is limited to $6.0 million per occurrence in the event any such liability arises from an Act of Terrorism (as defined in the SAFETY Act). The limitation of liability provided for under the SAFETY Act does not apply to any technology not granted a designation or certification as a Qualified Anti-Terrorism Technology, nor in the event that any such liability arises from an act or event other than an Act of Terrorism. Life Shield maintains insurance for liabilities up to the $6.0 million per occurrence limitation caused by failure of its products in the event of an Act of Terrorism.

Management of the Company has reviewed the potential increased liabilities associated with Life Shield’s systems and determined that potential liabilities arising from an Act of Terrorism that could ultimately affect the Company will be appropriately insured or limited by current regulations. However, due to the uncertainties involved in the future development, usage and application of Life Shield’s systems, the number or nature of possible future claims and legal proceedings, or the effect that any change in legislation and/or administrative regulations may have on the limitations of potential liabilities, management cannot reasonably determine the scope or amount of any potential costs and liabilities for the Company related to Life Shield or to Life Shield’s systems. Any potential liability for the Company that may result from Life Shield or Life Shield’s systems cannot reasonably be estimated. However, based upon, among other things, the limitation of liability under the SAFETY Act in the event of an Act of Terrorism, management does not currently believe that the costs or potential liability ultimately determined to be attributable to the Company through its ownership of Life Shield or as a supplier to Life Shield arising from the use of Life Shield’s systems will have a material adverse effect on the Company’s results of operations, liquidity or financial conditions.

Litigation

In the course of its business, the Company is subject to a variety of claims and lawsuits, including, but not limited to, litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to the Company. These uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, the Company accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on the Company’s

results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and the amount of any such loss cannot be reasonably estimated, any potential liability ultimately determined to be attributable to the Company may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred.

Lead pigment and lead-based paint litigation.The Company’s past operations included the manufacture and sale of lead pigments and lead-based paints. The Company, along with other companies, is and has been a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions, and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs’ claims have been based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company is also a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints that seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation. The Company has not settled any lead pigment or lead-based paint litigation. The Company expects that additional lead pigment

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and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the Company ultimately may not prevail. Adverse court rulings or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings. In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful.

Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations. The Company has not accrued any amounts for such litigation. With respect to such litigation, including the public nuisance litigation, the Company does not believe that it is probable that a loss has occurred, and it is not possible to estimate the range of potential losses as there is no prior history of a loss of this nature and there is no substantive information upon which an estimate could be based. In addition, any potential liability that may result from any changes to legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

Public nuisance claim litigation. The Company and other companies are or were defendants in legal proceedings seeking recovery based on public nuisance liability theories, among other theories, brought by the State of Rhode Island, the City of St. Louis, Missouri, various cities and counties in the State of New Jersey, various cities in the State of Ohio and the State of Ohio, the City of Chicago, Illinois, the City of Milwaukee, Wisconsin and the County of Santa Clara, California and other public entities in the State of California. Except for the Santa Clara County, California proceeding, all of these legal

proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings.

The proceedings initiated by the State of Rhode Island included two jury trials. At the conclusion of the second trial, the jury returned a verdict finding that (i) the cumulative presence of lead pigment in paints and coatings on buildings in the State of Rhode Island constitutes a public nuisance, (ii) the Company, along with two other defendants, caused or substantially contributed to the creation of the public nuisance, and (iii) the Company and two other defendants should be ordered to abate the public nuisance. The Company and two other defendants appealed and, on July 1, 2008, the Rhode Island Supreme Court, among other determinations, reversed the judgment of abatement with respect to the Company and two other defendants. The Rhode Island Supreme Court’s decision reversed the public nuisance liability judgment against the Company on the basis that the complaint failed to state a public nuisance claim as a matter of law.

The Santa Clara County, California proceeding was initiated in March 2000 in the Superior Court of the State of California, County of Santa Clara. In the original complaint, the plaintiffs asserted various claims including fraud and concealment, strict product liability/failure to warn, strict product liability/design defect, negligence, negligent breach of a special duty, public nuisance, private nuisance, and violations of California’s Business and Professions Code. A number of the asserted claims were resolved in favor of the defendants through pre-trial proceedings. The named plaintiffs in the Fourth Amended Complaint, filed on March 16, 2011, are the Counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano and Ventura, and the Cities of Oakland, San Diego and San Francisco. The Fourth Amended Complaint asserts a sole claim for public nuisance, alleging that the presence of lead products for use in paint and coatings in, on and around buildings in the plaintiffs’ jurisdictions constitutes a public nuisance. The plaintiffs seek the abatement of the alleged public nuisance that exists within the plaintiffs’ jurisdictions. A trial is currently scheduled to begin in June 2013.

Litigation seeking damages from alleged personal injury. The Company and other companies are defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. These proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint, claims for damages allegedly incurred by the children’s parents or guardians, and

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claims for damages allegedly incurred by professional painting contractors. These proceedings generally seek compensatory and punitive damages, and seek other relief including medical monitoring costs. These proceedings include purported claims by individuals, groups of individuals and class actions.

The plaintiff in Thomas v. Lead Industries Association, et al., initiated an action in state court against the Company, other alleged former lead pigment manufacturers and the Lead Industries Association in September 1999. The claims against the Company and the other defendants included strict liability, negligence, negligent misrepresentation and omissions, fraudulent misrepresentation and omissions, concert of action, civil conspiracy and enterprise liability. Implicit within these claims is the theory of “risk contribution” liability (Wisconsin’s theory which is similar to market share liability) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff. The case ultimately proceeded to trial and, on November 5, 2007, the jury returned a defense verdict, finding that the plaintiff had ingested white lead carbonate, but was not brain damaged or injured as a result. The plaintiff appealed and, on December 16, 2010, the Wisconsin Court of Appeals affirmed the final judgment in favor of the Company and other defendants.

Wisconsin is the only jurisdiction to date to apply a theory of liability with respect to alleged personal injury (i.e., risk contribution/market share liability) that does not require the plaintiff to identify the manufacturer of the product that allegedly injured the plaintiff in the lead pigment and lead-based paint litigation. Although the risk contribution liability theory was applied during the Thomas trial, the constitutionality of this theory as applied to the lead pigment cases has not been judicially determined by the Wisconsin state courts. However, in an unrelated action filed in the United States District Court for the Eastern District of Wisconsin, Gibson v. American Cyanamid, et al., on November 15, 2010, the District Court held that Wisconsin’s risk contribution theory as applied in that case violated the defendants’ right to substantive due process and is unconstitutionally retroactive. The District Court's decision in Gibson v. American Cyanamid, et al., has been appealed by the plaintiff.

Insurance coverage litigation. The Company and its liability insurers, including certain Underwriters at Lloyd’s of London, initiated legal proceedings against each other to primarily determine, among other things, whether the costs and liabilities associated with the abatement of lead pigment are covered under certain insurance policies issued to the Company. The Company’s action, filed on March 3, 2006 in the Common Pleas Court, Cuyahoga County, Ohio, is currently stayed and inactive. The liability insurers’ action, which was filed on February 23, 2006 in the Supreme Court of the State of New York, County of New York, has been dismissed. An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities. The Company has not recorded any assets related to these insurance policies or otherwise assumed that proceeds from these insurance policies would be received in estimating any contingent liability accrual. Therefore, an ultimate loss in the

insurance coverage litigation without a determination of liability against the Company in the lead pigment or lead-based paint litigation will have no impact on the Company’s results of operation, liquidity or financial condition. As previously stated, however, the Company has not accrued any amounts for the lead pigment or lead-based paint litigation and any significant liability ultimately determined to be attributable to the Company relating to such litigation may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. 

2012 Subsequent Event - DOL Settlement. On February20,2013, the Company reached a settlement with the DOL of the previously disclosed investigation of transactions related to the ESOP that were implemented on August 1, 2006 and August 27, 2003. The DOL had notified the Company, certain current and former directors of the Company and the ESOP trustee of potential enforcement claims asserting breaches of fiduciary obligations. The DOL sought compensatory and equitable remedies, including monetary damages to the ESOP for alleged losses to the ESOP relating to third-party valuation of the Company's convertible serial preferred stock. The Company believes that the DOL's claims are subject to meritorious defenses, however, the Company's management and Board of Directors have decided that it would be in the best interest of the Company and its shareholders to avoid potentially costly litigation and enter into this settlement to resolve these claims.

The Company agreed to resolve all ESOP related claims with the DOL by making a one-time payment of $80.0 million to the ESOP and has recorded a $49.2 million after tax charge to earnings. In accordance with U.S. generally accepted accounting principles, the Company is required to recognize this subsequent event in its 2012 fiscal year results since this subsequent event is related to conditions that existed at the balance sheet date of December 31, 2012. The Company's financial results for the quarter and year ended December 31, 2012, which were set forth in the Company's earnings release issued on January 31, 2013 and furnished on the Company's Current Report on Form 8-K dated January 31, 2013, have been revised and furnished on the Company's Current Report on Form 8-K dated February 20,2013 to reflect this subsequent event. As a result of recording this accrual in the Administrative segment, Cost of goods sold increased $16.0 million and Selling, general and administrative expense increased $64.0 million while income tax expense decreased $30.8 million and diluted net income per common

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share decreased $.47 per share for both the quarter and year ended December 31, 2012.

Market Risk

The Company is exposed to market risk associated with interest rate, foreign currency and commodity fluctuations. The Company occasionally utilizes derivative instruments as part of its overall financial risk management policy, but does not use derivative instruments for speculative or trading purposes. The Company entered into foreign currency option and forward currency exchange contracts with maturity dates of less than twelve months in 2012, 2011 and 2010, primarily to hedge against value changes in foreign currency. There were no derivative contracts outstanding at December 31, 2012, 2011 and 2010. The Company believes it may be exposed to continuing market risk from foreign currency exchange rate and commodity price fluctuations. However, the Company does not expect that foreign currency exchange rate and commodity price fluctuations or hedging contract losses will have a material adverse effect on the Company’s financial condition, results of operations or cash flows. See Notes 1 and 13 on pages 48 and 71 of this report.

Financial Covenant

Certain borrowings contain a consolidated leverage covenant. The covenant states the Company’s leverage ratio is not to exceed 3.00 to 1.00. In connection with the new credit facility entered into on July 8, 2011, the leverage ratio was increased to 3.25 to 1.00. The leverage ratio is defined as the ratio of total indebtedness (the sum of Short-term borrowings, Current portion of long-term debt, and Long-term debt) at the reporting date to consolidated “Earnings Before Interest, Taxes, Depreciation, and Amortization” (EBITDA) for the 12-month period ended on the same date. Refer to the “Results of Operations” caption below for a reconciliation of EBITDA to Net income. At December 31, 2012, the Company was in compliance with the covenant. The Company’s Notes, Debentures and revolving credit agreement contain various default and cross-default provisions. In the event of default under any one of these arrangements, acceleration of the maturity of any one or more of these borrowings may result. See Note 7 on pages 62 and 63 of this report.

Employee Stock Ownership Plan (ESOP)

Participants in the Company’s ESOP are allowed to contribute up to the lesser of twenty percent of their annual compensation or the maximum dollar amount allowed under the Internal Revenue Code. Prior to July 1, 2009, the Company matched one hundred percent of all contributions up to six percent of eligible employee contributions. Effective July 1, 2009, the ESOP was amended to change the Company match to one hundred percent on the first three percent of eligible employee contributions and fifty percent on the next two percent of eligible contributions. Effective July 1, 2011, the ESOP was amended to reinstate the Company match to six percent of eligible employee contributions. The Company’s matching contributions to the ESOP charged to operations were $142.8 million in 2012, including the $80.0 million DOL Settlement, compared to $48.8 million in 2011. The Company can fund the

ESOP by redeeming a portion of the Preferred stock held by the ESOP or with cash. At December 31, 2012, there were 14,616,378 shares of the Company’s common stock being held by the ESOP, representing 14.2 percent of the total number of voting shares outstanding. See Note 11, on pages 68 and 69 of this report, for more information concerning the Company’s ESOP and preferred stock.

RESULTS OF OPERATIONS - 2012 vs. 2011

Shown below are net sales and segment profit and the percentage change for the current period by segment for 2012 and 2011:

	Year Ended December 31,
(thousands of dollars)	2012			2011			Change
Net Sales:
Paint Stores Group	$	5,409,947		$	4,779,826		13.2	%
Consumer Group	1,321,887			1,274,281			3.7	%
Global Finishes Group	1,960,699			1,878,326			4.4	%
Latin America Coatings Group	836,057			828,451			0.9	%
Administrative	5,872			4,815			22.0	%
Net sales	$	9,534,462		$	8,765,699		8.8	%
	Year Ended December 31,
(thousands of dollars)	2012			2011			Change
Income Before Income Taxes:
Paint Stores Group	$	861,763		$	645,743		33.5	%
Consumer Group	216,422			173,654			24.6	%
Global Finishes Group	147,231			90,271			63.1	%
Latin America Coatings Group	81,238			75,494			7.6	%
Administrative	(399,345		)	(243,614		)	-63.9	%
Income before income taxes	$	907,309		$	741,548		22.4	%

Consolidated net sales for 2012increased due primarily to higher paint sales volume in the Paint Stores Group and selling price increases across all Reportable segments. Two acquisitions completed in 2012 and one acquisition completed in 2011increased consolidated net sales 0.9 percent. Unfavorable currency translation rate changes decreased2012 consolidated net sales 1.8 percent. Net sales of all consolidated foreign subsidiaries were up3.4 percent to $2.05 billion for 2012 versus $1.98 billion for 2011 due primarily to acquisitions and selling price increases. Unfavorable foreign currency translation rates reduced net sales for all consolidated foreign subsidiaries during 2012 by 7.9 percent. Net sales of all operations other than consolidated

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

foreign subsidiaries were up10.3 percent to $7.48 billion for 2012 versus $6.78 billion for 2011.

Net sales in the Paint Stores Group in 2012increased primarily due to higher paint sales volume and selling price increases. Net sales from stores open for more than twelve calendar months increased12.5 percent for the full year. During 2012, the Paint Stores Group opened 81 new stores and closed 11 redundant locations for a net increase of 70 stores, increasing the total number of stores in operation at December 31, 2012 to 3,520 in the United States, Canada and the Caribbean. The Paint Stores Group’s objective is to expand its store base an average of three percent each year, primarily through internal growth. Sales of products other than paint increased approximately 10.2 percent for the year over 2011. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of general merchandise sold.

Net sales of the Consumer Group increased due primarily to selling price increases and acquisitions. Acquisitions increased net sales 3.2 percent compared to 2011. Sales of aerosols, brushes, rollers, caulk and other paint related products were all up mid-single digits as compared to 2011. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of paint-related merchandise sold. The Consumer Group plans to continue its promotions of new and existing products in 2013 and continue expanding its customer base and product assortment at existing customers.

The Global Finishes Group’s net sales in 2012, when stated in U.S. dollars, increased due primarily to selling price increases, higher paint sales volume, and acquisitions partially offset by unfavorable currency translation rate changes. Acquisitions increased this Group’s net sales in U.S. dollars by 1.8 percent. Paint sales volume percentage, excluding acquisitions, increased in the low-single digits. Unfavorable currency translation rate changes in the year decreased net sales by 3.5 percent for 2012. In 2012, the Global Finishes Group opened 1 new branch and closed 2 locations for a net decrease of 1 branch decreasing the total to 302 branches open in the United States, Canada, Mexico, South America, Europe and Asia at year-end. In 2013, the Global Finishes Group expects to continue expanding its worldwide presence and improving its customer base.

The Latin America Coatings Group’s net sales in 2012, when stated in U.S. dollars, increased due primarily to selling price increases and higher paint sales volume partially offset by unfavorable currency translation rate changes. Paint sales volume percentage increased in the low-single digits. Unfavorable currency translation rate changes in the year decreased net sales by 10.2 percent for 2012. In 2012, the Latin America Coatings Group opened 17 new stores and closed 6 locations for a net increase of 11 stores increasing the total to 276 stores open in North and South America at year-end. In 2013, the Latin America Coatings Group expects to continue expanding its regional presence and improving its customer base.

Net sales in the Administrative segment, which primarily consist of external leasing revenue of excess headquarters space and leasing of facilities no longer used by the Company in its primary business, increased by an insignificant amount in 2012.

Consolidated gross profit increased$461.7 million in 2012 and improved as a percent to net sales to 44.1 percent from 42.7 percent in 2011 due primarily to higher paint sales volume and selling price increases partially offset by increases in raw material costs and unfavorable currency translation rate changes. The Paint Stores Group’s gross profit for 2012increased$370.2 million compared to 2011 and increased as a percent of sales due primarily to higher paint sales volume and selling price increases partially offset by increases in raw material costs. The Consumer Group’s gross profit increased$62.5 million and increased as a percent of sales for 2012 over 2011 due primarily to selling price increases and improved operating efficiencies partially offset by increases in raw material costs. Acquisitions increased Consumer Group's gross profits by $8.7 million, or 21.5 percent of acquisition net sales. The Global Finishes Group’s gross profit for 2012increased$52.3 million and increased as a percent of sales due primarily to selling price increases and higher paint sales volume partially offset by increases in raw material costs and unfavorable currency translation rate changes. Acquisitions increased Global Finishes Group’s gross profit by $8.2 million, or 23.7 percent of acquisition net sales, and foreign currency translation rate fluctuations decreased gross profit by $19.1 million for 2012. The Latin America Coatings Group’s gross profit for 2012decreased$2.3 million and decreased slightly as a percent of sales. Selling price increases and improved sales volumes were not enough to offset higher raw material costs and unfavorable currency translation rate changes which reduced gross profit dollars. Foreign currency translation rate fluctuations decreased gross profit by $26.6 million for 2012. The Administrative segment’s gross profit decreased by $21.0 million due primarily to the DOL Settlement.

SG&A increased by $298.8 million due primarily to increased expenses to support higher sales levels in all Reportable Segments, the DOL Settlement and acquisitions. Acquisitions added $16.3 million of SG&A in 2012, representing 21.6 percent of acquisition net sales. SG&A increased as a percent of sales to 34.2 percent in 2012 from 33.8 percent in 2011. In the Paint Stores Group, SG&A increased$153.7 million for the year due primarily to increased spending due to the number of new store openings and increased expenses to maintain customer service. The Consumer Group’s SG&A increased by $23.6 million for the year due to increased sales levels and acquisitions SG&A of $7.1 million, or 17.6 percent of acquisition net sales. The Global

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Finishes Group’s SG&A increased by $2.1 million for the year relating primarily to increased sales levels and acquisitions SG&A of $9.2 million, or 26.4 percent of acquisition net sales, partially offset by foreign currency translation rate fluctuations reducing SG&A by $15.9 million. The Latin America Coatings Group’s SG&A decreased by $2.4 million for the year relating primarily to foreign currency translation rate fluctuations of $17.5 million partially offset by increased expenses to support higher sales volume levels. The Administrative segment’s SG&A increased$121.9 million primarily due to an increase in incentive compensation, including stock-based compensation expense, the DOL Settlement and information systems costs to integrate previous years acquisitions. See Note 12, on pages 69 through 70 of this report, for more information concerning stock-based compensation.

Other general expense - netincreased$2.5 million in 2012 compared to 2011. The increase was mainly caused by an increase of $6.7 million of expense in the Administrative segment, primarily due to loss on sale or disposal of assets of $3.5 million in 2012 versus a gain on sale of assets of $5.5 million in 2011. Partially offsetting this unfavorable comparison was a decrease in provisions for environmental matters of $2.4 million in the Administrative segment. In addition, Other general expense - net in the Consumer Group had higher income adjustments associated with prior exit or disposal activities of $3.1 million as compared to 2011, while insignificant changes occurred in Other general expense - net of the remaining Reportable Segments. See Note 13, on page 71 of this report, for more information concerning Other general expense - net.

Impairments of trademarks decreased$1.4 million in 2012 compared to 2011. As required by the Goodwill and Other Intangibles Topic of the ASC, management performed an annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2012. The impairment test in 2012 and 2011 resulted in no impairment of goodwill and an impairment of $4.1 million and $5.5 million, respectively, of several indefinite-lived trademarks primarily in the Paint Stores Group for both years as a result of planned conversion of various acquired brands. The remaining book values of these trademarks are now being amortized over their estimated future lives. The impairment charges are shown as a separate line in the Statements of consolidated income in accordance with the Goodwill and Other Intangibles Topic of the ASC. See Note 4, on pages 52 and 53 of this report, for more information concerning the impairment of intangible assets.

Interest expense, included in the Administrative segment, increased$0.3 million in 2012 versus 2011 due primarily to higher average debt levels.

Other income - netincreased to $9.9 millionincome from $4.8 millionincome in 2011. This was primarily due to foreign currency related transaction gains of $3.1 million in 2012 versus foreign currency related transaction losses of $4.7 million in 2011, primarily in the Global Finishes and Latin America Coatings Groups. See Note 13, on page 71 of this report, for more information concerning Other income - net.

Consolidated Income before income taxes in 2012increased$165.8 million due primarily to an increase of $461.7 million in gross profit and a reduction of $1.5 million in interest expense, interest and net investment income and other expenses, partially offset by an increase of $298.8 million in SG&A. Income before income taxes increased$216.0 million in the Paint Stores Group, $57.0 million in the Global Finishes Group, $42.8 million in the Consumer Group and $5.7 million in the Latin America Coatings Group when compared to 2011. The Administrative segment had a unfavorable impact on Income before income taxes of $155.7 million when compared to 2011. Segment profit of all consolidated foreign subsidiaries increased29.4 percent to $158.4 million for 2012 versus $122.4 million for 2011 due primarily to increases in gross profit of $8.0 million and Other income - net of $43.0 million partially offset by an increase in SG&A of $13.3 million. Favorable foreign currency translation rates, partially offset by acquisitions, decreased segment profit of all consolidated foreign subsidiaries by 14.0 percent. Segment profit of all operations other than consolidated foreign subsidiaries increased21.0 percent to $748.9 million for 2012 versus $619.1 million for 2011.

Net income increased$189.2 million in 2012 due to the increase in Income before income taxes.

The effective income tax rate for 2012 was 30.4 percent. The effective income tax rate for 2011 was 40.4 percent, including income tax expense of $75.0 million relating to the IRS Settlement. Excluding the impact of the IRS Settlement would result in an effective income tax rate for 2011 of 30.3 percent. Diluted net income per common share increased45.4 percent to $6.02 per share for 2012, which included charges relating to the DOL Settlement ($.47 per share), from $4.14 per share a year ago, which included charges relating to the IRS Settlement ($.70 per share) and dilution from acquisitions ($.04 per share).

Management considers a measurement that is not in accordance with U.S. generally accepted accounting principles a useful measurement of the operational profitability of the Company. Some investment professionals also utilize such a measurement as an indicator of the value of profits and cash that are generated strictly from operating activities, putting aside working capital and certain other balance sheet changes. For this measurement, management increases Net income for significant non-operating and non-cash expense items to arrive at an amount known as EBITDA. The reader is cautioned that the following value for EBITDA should not be compared to other entities unknowingly. EBITDA should not be considered an alternative to Net income or Net operating cash as an indicator of operating performance

36

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

or as a measure of liquidity. The reader should refer to the determination of Net income and Net operating cash in accordance with U.S. generally accepted accounting principles disclosed in the Statements of Consolidated Income and Statements of Consolidated Cash Flows, on pages 44 and 46 of this report. EBITDA as used by management is calculated as follows:

	Year Ended December 31,
(thousands of dollars)	2012		2011		2010
Net income	$	631,034	$	441,860	$	462,485
Interest expense	42,788		42,497		70,595
Income taxes	276,275		299,688		215,299
Depreciation	152,217		151,212		140,347
Amortization	26,985		29,692		34,964
EBITDA	$	1,129,299	$	964,949	$	923,690

RESULTS OF OPERATIONS - 2011 vs. 2010

Shown below are net sales and segment profit and the percentage change for the current period by segment for 2011 and 2010: 

	Year Ended December 31,
(thousands of dollars)	2011			2010			Change
Net Sales:
Paint Stores Group	$	4,779,826		$	4,381,238		9.1	%
Consumer Group	1,274,281			1,297,731			-1.8	%
Global Finishes Group	1,878,326			1,417,142			32.5	%
Latin America Coatings Group	828,451			675,175			22.7	%
Administrative	4,815			5,138			-6.3	%
Net sales	$	8,765,699		$	7,776,424		12.7	%
	Year Ended December 31,
(thousands of dollars)	2011			2010			Change
Income Before Income Taxes:
Paint Stores Group	$	645,743		$	619,578		4.2	%
Consumer Group	173,654			203,974			-14.9	%
Global Finishes Group	90,271			64,675			39.6	%
Latin America Coatings Group	75,494			59,005			27.9	%
Administrative	(243,614		)	(269,448		)	9.6	%
Income before income taxes	$	741,548		$	677,784		9.4	%

Consolidated net sales for 2011 increased due primarily to selling price increases, acquisitions, and higher paint sales volume in the Global Finishes and Latin America Coatings Groups. One acquisition completed in 2011 and three acquisitions completed throughout 2010 increased consolidated net sales 4.5 percent. Favorable currency translation rate changes increased 2011 consolidated net sales 0.7 percent. Net

sales of all consolidated foreign subsidiaries were up 35.1 percent to $1.98 billion for 2011 versus $1.47 billion for 2010 due primarily to acquisitions and selling price increases. Of the increase in net sales for all consolidated foreign subsidiaries during 2011, 2.7 percent related to favorable foreign currency translation rates. Net sales of all operations other than consolidated foreign subsidiaries were up 7.5 percent to $6.78 billion for 2011 versus $6.31 billion for 2010.

Net sales in the Paint Stores Group in 2011 increased primarily due to selling price increases and improving domestic architectural paint sales. Net sales from stores open for more than twelve calendar months increased 8.3 percent for the full year. During 2011, the Paint Stores Group opened 66 new stores and closed 6 redundant locations for a net increase of 60 stores, increasing the total number of stores in operation at December 31, 2011 to 3,450 in the United States, Canada and the Caribbean. The Paint Stores Group's objective is to expand its store base an average of three percent each year, primarily through internal growth. Selling price increases throughout the year drove the increase in sales as paint sales volume was up slightly for the year as compared to 2010. Sales of products other than paint increased approximately 7.1 percent for the year over 2010. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of general merchandise sold.

Net sales of the Consumer Group decreased due primarily to the elimination of a portion of a paint program at a large retail customer partially offset by selling price increases. Excluding the impact of the elimination of a portion of this paint program, paint volume sales percentage change in the Consumer Group compared to last year increased slightly. Sales of aerosols, brushes, rollers, caulk and other paint related products were essentially flat as compared to 2010. A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of paint-related merchandise sold. The Consumer Group plans to continue its aggressive promotions of new and existing products in 2012 and continue expanding its customer base and product assortment at existing customers.

The Global Finishes Group's net sales in 2011, when stated in U.S. dollars, increased due primarily to acquisitions, selling price increases, higher paint sales volume and favorable currency translation rate changes. Acquisitions increased this Group's net sales in U.S. dollars by 20.7 percent. Paint sales volume percentage, excluding acquisitions, increased in the mid-single digits. Favorable currency translation rate changes in the year increased net sales by 1.4 percent for 2011. In 2011, the Global Finishes Group opened or acquired 1 new branch and closed 13 locations for a net decrease of 12 branches decreasing the total to 303 branches open in the United States, Canada, Mexico, South America, Europe and Asia at year-end. In 2012, the Global Finishes Group expects to continue expanding its worldwide presence and improving its customer base.

The Latin America Coatings Group's net sales in 2011, when stated in U.S. dollars, increased due primarily to acquisitions,

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

selling price increases, higher paint sales volume and favorable currency translation rate changes. Acquisitions increased this Group's net sales in U.S. dollars by 8.7 percent. Paint sales volume percentage, excluding acquisitions, increased in the mid-single digits. Favorable currency translation rate changes in the year increased net sales by 3.0 percent for 2011. In 2011, the Latin America Coatings Group opened or acquired 19 new stores and closed 3 locations for a net increase of 16 stores increasing the total to 265 stores open in North and South America at year-end. In 2012, the Latin America Coatings Group expects to continue expanding its regional presence and improving its customer base.

Net sales in the Administrative segment, which primarily consist of external leasing revenue of excess headquarters space and leasing of facilities no longer used by the Company in its primary business, decreased by an insignificant amount in 2011.

Consolidated gross profit increased $263.5 million related primarily to higher sales in 2011, but decreased as a percent to net sales to 42.7 percent from 44.8 percent in 2010 due primarily to increasing raw material costs and the dilutive impact of acquisitions partially offset by selling price increases, increased paint volume and good inventory management and cost control. The Paint Stores Group's gross profit for 2011 increased $129.7 million compared to 2010, but decreased as a percent of sales due primarily to increasing raw material costs partially offset by selling price increases throughout 2011. The Consumer Group's gross profit decreased $28.5 million for 2011 over 2010 due primarily to the elimination of a portion of a paint program at a large retail customer. As a percent of sales, Consumer Group's gross profit decreased primarily due to increasing raw material costs partially offset by selling price increases and good cost control. The Global Finishes Group's gross profit for 2011 increased $109.8 million and decreased as a percent of sales. Acquisitions, selling price increases, increased sales volumes, and favorable foreign currency translation exchange rate changes increased the gross profit dollars. Increasing raw material costs and the dilutive impact of acquisitions partially offset by selling price increases and increased paint volume decreased gross profit as a percent of sales. Acquisitions increased Global Finishes Group's gross profit by $79.5 million, or 27.1 percent of acquisition net sales, and foreign currency translation rate fluctuations increased gross profit by $7.2 million for 2011. The Latin America Coatings Group's gross profit for 2011 increased $48.1 million and decreased as a percent of sales. Acquisitions, selling price increases, increased sales volumes, and favorable foreign currency translation exchange rate changes increased the gross profit dollars. Increasing raw material costs and the dilutive impact of acquisitions partially offset by selling price increases and increased paint volume decreased gross profit as a percent of sales. Acquisitions increased Latin America Coatings Group's gross profit by $15.2 million, or 25.7 percent of acquisition net sales, and foreign currency translation rate fluctuations increased gross profit by $7.2 million for 2011. The Administrative segment's gross profit increased by an insignificant amount.

SG&A increased by $232.7 million due primarily to acquisitions and increased expenses to support higher sales levels in the Paint Stores, Global Finishes and Latin America

Coatings Groups. Acquisitions added $95.8 million of SG&A in 2011, representing 27.2 percent of acquisition net sales. SG&A decreased as a percent of sales to 33.8 percent in 2011 from 35.1 percent in 2010. In the Paint Stores Group, SG&A increased $103.0 million for the year due primarily to increased spending due to the number of new store openings and increased expenses to maintain customer service. The Consumer Group's SG&A decreased by $3.1 million for the year due to good expense control. The Global Finishes Group's SG&A increased by $85.2 million for the year relating primarily to acquisitions SG&A of $82.1 million, or 28.0 percent of acquisition net sales, and foreign currency translation rate fluctuations of $5.7 million. The Latin America Coatings Group's SG&A increased by $31.0 million for the year relating primarily to acquisitions SG&A of $13.7 million, or 23.2 percent of acquisition net sales, foreign currency translation rate fluctuations of $5.5 million and increased expenses to support higher sales levels. The Administrative segment's SG&A increased $16.6 million primarily due to an increase in stock-based compensation expense and information systems costs to integrate the 2010 acquisitions. See Note 12, on pages 69 through 70 of this report, for more information concerning stock-based compensation.

Other general expense - net decreased $1.1 million in 2011 compared to 2010. The decrease was mainly caused by a decrease of $2.3 million in the Administrative segment, primarily due to an increase of $4.2 million in the gain on sale of assets partially offset by an increase in provisions for environmental matters of $2.0 million. In addition, Other general expense - net in the Consumer Group had lower income adjustments associated with exit or disposal activities of $3.1 million as compared to 2010, while insignificant changes occurred in Other general expense - net of the remaining Reportable Segments. See Note 13, on page 71 of this report, for more information concerning Other general expense - net.

Impairments of trademarks increased $1.0 million in 2011 compared to 2010. As required by the Goodwill and Other Intangibles Topic of the ASC, management performed an annual impairment test of goodwill and indefinite-lived intangible assets as of October 1, 2011. The impairment test in 2011 resulted in no impairment of goodwill and an impairment of $5.5 million of several indefinite-lived trademarks primarily in the Paint Stores Group. There were no material changes in goodwill and indefinite-lived intangible assets carrying values in 2010. However, reductions in the carrying value of $4.5 million were recorded for

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

definite-lived intangible assets whose undiscounted cash flows were lower than the assets carrying values in the Global Finishes Group. The impairment charges are shown as a separate line in the Statements of consolidated income in accordance with the Goodwill and Other Intangibles Topic of the ASC. See Note 4, on pages 52 and 53 of this report, for more information concerning the impairment of intangible assets.

Interest expense, included in the Administrative segment, decreased $28.1 million in 2011 versus 2010 due primarily to costs related to the repurchase of a majority of the Company's 7.45% Debentures in 2010.

Other income - net fluctuated to $4.8 million income from $0.8 million income in 2010. Increased income from other miscellaneous income and expense items of $6.5 million, primarily in the Administrative segment, was partially offset by unfavorable foreign currency related transaction losses of $4.7 million, primarily in the Global Finishes and Latin America Coatings Groups. See Note 13, on page 71 of this report, for more information concerning Other income - net.

Consolidated Income before income taxes in 2011 increased $63.8 million due primarily to an increase in gross profit of $263.5 million and a reduction of $34.0 million in interest expense, interest and net investment income and other expenses, partially offset by an increase in SG&A of $232.7 million and an increase in trademark impairment charges of $1.0 million. Income before income taxes increased $26.2 million in the Paint Stores Group, $25.6 million in the Global Finishes Group and $16.5 million in the Latin America Coatings Group and decreased $30.3 million in the Consumer Group when compared to 2010. The Administrative segment had a favorable impact on Income before income taxes of $25.8 million when

compared to 2010. Segment profit of all consolidated foreign subsidiaries increased 40.8 percent to $122.4 million for 2011 versus $87.0 million for 2010 due primarily to an increase in gross profit of $152.2 million partially offset by an increase in SG&A of $121.6 million. Favorable foreign currency translation rates, partially offset by acquisitions, increased segment profit of all consolidated foreign subsidiaries by 1.2 percent. Segment profit of all operations other than consolidated foreign subsidiaries increased 4.8 percent to $619.1 million for 2011 versus $590.8 million for 2010.

Net income decreased $20.6 million in 2011 due to the impact of the IRS Settlement partially offset by the increase in Income before income taxes.

The effective income tax rate for 2011 was 40.4 percent, including an increase in income tax expense of $75.0 million relating to the IRS Settlement. Excluding the impact of the IRS Settlement would results in an effective income tax rate for 2011 of 30.3 percent. The effective income tax rate for 2010 was 31.8 percent, including a one-time increase in income tax expense of $11.4 million relating to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the "Acts"). Diluted net income per common share, including charges relating to the IRS Settlement ($.70 per share) and dilution from acquisitions ($.04 per share) both in 2011, decreased 1.7 percent to $4.14 per share for 2011 from $4.21 per share a year ago, which included charges relating to the Acts ($.10 per share), repurchase of a majority of the Company's 7.45% debentures ($.12 per share), and dilution from acquisitions ($.10 per share).

39

REPORT OF MANAGEMENT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

Shareholders

The Sherwin-Williams Company

We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. We recognize that internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and is subject to the possibility of human error or the circumvention or the overriding of internal control. Therefore, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, we believe we have designed into the process safeguards to reduce, though not eliminate, this risk. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In order to ensure that the Company’s internal control over financial reporting was effective as of December 31, 2012, we conducted an assessment of its effectiveness under the supervision and with the participation of our management group, including our principal executive officer and principal financial officer. This assessment was based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our assessment of internal control over financial reporting under the criteria established in Internal Control – Integrated Framework, we have concluded that, as of December 31, 2012, the Company’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting as of December 31, 2012 has been audited by Ernst & Young LLP, an independent registered public accounting firm, and their report on the effectiveness of our internal control over financial reporting is included on page 41 of this report.

C. M. Connor

Chairman and Chief Executive Officer

S. P. Hennessy

Senior Vice President - Finance and Chief Financial Officer

A. J. Mistysyn

Vice President - Corporate Controller

40

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Shareholders and Board of Directors

The Sherwin-Williams Company

We have audited The Sherwin-Williams Company’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Sherwin-Williams Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, The Sherwin-Williams Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of The Sherwin-Williams Company as of December 31, 2012, 2011 and 2010, and the related statements of consolidated income and comprehensive income, cash flows and shareholders’ equity for the years then ended and our report dated February 28, 2013 expressed an unqualified opinion thereon.

Cleveland, Ohio

February 28, 2013

41

Shareholders

The Sherwin-Williams Company

We are responsible for the preparation and fair presentation of the consolidated financial statements, accompanying notes and related financial information included in this report of The Sherwin-Williams Company and its consolidated subsidiaries (collectively, the “Company”) as of December 31, 2012, 2011 and 2010 and for the years then ended in accordance with U.S. generally accepted accounting principles. The consolidated financial information included in this report contains certain amounts that were based upon our best estimates, judgments and assumptions that we believe were reasonable under the circumstances.

We have conducted an assessment of the effectiveness of internal control over financial reporting based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As discussed in the Report of Management on Internal Control Over Financial Reporting on page 40 of this report, we concluded that the Company’s internal control over financial reporting was effective as of December 31, 2012.

The Board of Directors pursues its responsibility for the oversight of the Company’s accounting policies and procedures, financial statement preparation and internal control over financial reporting through the Audit Committee, comprised exclusively of independent directors. The Audit Committee is responsible for the appointment and compensation of the independent registered public accounting firm. The Audit Committee meets at least quarterly with financial management, internal auditors and the independent registered public accounting firm to review the adequacy of financial controls, the effectiveness of the Company’s internal control over financial reporting and the nature, extent and results of the audit effort. Both the internal auditors and the independent registered public accounting firm have private and confidential access to the Audit Committee at all times.

We believe that the consolidated financial statements, accompanying notes and related financial information included in this report fairly reflect the form and substance of all material financial transactions and fairly present, in all material respects, the consolidated financial position, results of operations and cash flows as of and for the periods presented.

C. M. Connor

Chairman and Chief Executive Officer

S. P. Hennessy

Senior Vice President - Finance and Chief Financial Officer

A. J. Mistysyn

Vice President - Corporate Controller

42

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON THE CONSOLIDATED FINANCIAL STATEMENTS

Shareholders and Board of Directors

The Sherwin-Williams Company

We have audited the accompanying consolidated balance sheets of The Sherwin-Williams Company as of December 31, 2012, 2011 and 2010, and the related statements of consolidated income and comprehensive income, cash flows and shareholders’ equity for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Sherwin-Williams Company at December 31, 2012, 2011 and 2010, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), The Sherwin-Williams Company’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2013 expressed an unqualified opinion thereon.

Cleveland, Ohio

February 28, 2013

43

STATEMENTS OF CONSOLIDATED INCOME

(thousands of dollars except per common share data)

	Year Ended December 31,
	2012			2011			2010
Net sales	$	9,534,462		$	8,765,699		$	7,776,424
Cost of goods sold	5,328,236			5,021,137			4,295,346
Gross profit (1)	4,206,226			3,744,562			3,481,078
Percent to net sales	44.1		%	42.7		%	44.8		%
Selling, general and administrative expenses (1)	3,259,648			2,960,814			2,728,122
Percent to net sales	34.2		%	33.8		%	35.1		%
Other general expense - net	5,248			2,731			3,803
Impairment of trademarks	4,086			5,492			4,484
Interest expense	42,788			42,497			70,595
Interest and net investment income	(2,913		)	(3,711		)	(2,929		)
Other income - net	(9,940		)	(4,809		)	(781		)
Income before income taxes	907,309			741,548			677,784
Income taxes (1), (2)	276,275			299,688			215,299
Net income	$	631,034		$	441,860		$	462,485
Net income per common share:
Basic	$	6.15		$	4.22		$	4.28
Diluted	$	6.02		$	4.14		$	4.21

⁽¹⁾ Includes DOL Settlement of $49,163, net of tax (Cost of goods sold $16,000, Selling, general and administrative expenses $64,000 and tax benefit $30,837), or $.47 per share in the Year ended December 31, 2012.

⁽²⁾ Includes IRS Settlement of $74,982, or approximately $.70 per share, in the Year ended December 31, 2011. See Note 14 for more information on the IRS Settlement.

	Year Ended December 31,
	2012			2011			2010
Net income	$	631,034		$	441,860		$	462,485
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments	(7,403		)	(65,632		)	25,131
Employee benefit plans:
Net actuarial losses and prior service costs
arising during period (3)	(6,192		)	(36,415		)	(1,335		)
Less: amortization of net actuarial losses and
prior service costs included in Net pension costs (4)	10,973			13,045			14,862
	4,781			(23,370		)	13,527
Unrealized net gains (losses) on available-for-sale securities:
Unrealized holding gains (losses)
arising during period (5)	123			(623		)	476
Less: reclassification adjustments for (gains) losses
included in net income (6)	(12		)	68
	111			(555		)	476
Other comprehensive (loss) income	(2,511		)	(89,557		)	39,134
Comprehensive income	$	628,523		$	352,303		$	501,619

⁽³⁾ Net of taxes of $2,846, $25,504 and $369, in 2012, 2011 and 2010, respectively.

⁽⁴⁾ Net of taxes of $(13,350), $(8,183) and $(9,317), in 2012, 2011 and 2010, respectively.

⁽⁵⁾ Net of taxes of $(77), $256 and $(183), in 2012, 2011 and 2010, respectively.

⁽⁶⁾ Net of taxes of $7 and $(42) in 2012 and 2011, respectively.

See notes to consolidated financial statements.

44

CONSOLIDATED BALANCE SHEETS

(thousands of dollars)

	December 31,
	2012			2011			2010
Assets
Current assets:
Cash and cash equivalents	$	862,590		$	32,696		$	58,585
Accounts receivable, less allowance	1,032,508			989,873			916,661
Inventories:
Finished goods	732,359			730,727			743,953
Work in process and raw materials	187,965			196,082			173,748
	920,324			926,809			917,701
Deferred income taxes	126,730			149,207			127,348
Other current assets	207,086			163,008			193,427
Total current assets	3,149,238			2,261,593			2,213,722
Goodwill	1,156,005			1,108,008			1,102,458
Intangible assets	347,553			305,873			320,504
Deferred pension assets	249,911			228,350			248,333
Other assets	366,134			368,898			332,100
Property, plant and equipment:
Land	102,336			105,010			106,101
Buildings	677,944			668,802			668,506
Machinery and equipment	1,750,729			1,657,874			1,617,530
Construction in progress	56,582			41,264			34,038
	2,587,591			2,472,950			2,426,175
Less allowances for depreciation	1,621,695			1,516,420			1,474,057
	965,896			956,530			952,118
Total Assets	$	6,234,737		$	5,229,252		$	5,169,235
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term borrowings	$	69,035		$	346,313		$	388,592
Accounts payable	922,999			965,149			909,649
Compensation and taxes withheld	314,892			251,060			253,247
Accrued taxes	52,104			120,555			62,547
Current portion of long-term debt	3,689			7,823			7,875
Other accruals	513,717			471,761			442,030
Total current liabilities	1,876,436			2,162,661			2,063,940
Long-term debt	1,632,165			639,231			648,326
Postretirement benefits other than pensions	320,223			297,528			295,896
Other long-term liabilities	614,109			612,913			551,633
Shareholders’ equity:
Common stock - $1.00 par value:
103,270,067, 103,854,234 and 107,020,728 shares outstanding
at December 31, 2012, 2011 and 2010, respectively	111,623			107,454			231,346
Preferred stock - convertible, no par value:
101,086, 160,273 and 216,753 shares outstanding
at December 31, 2012, 2011 and 2010, respectively	101,086			160,273			216,753
Unearned ESOP compensation	(101,086		)	(160,273		)	(216,753		)
Other capital	1,673,788			1,297,625			1,222,909
Retained earnings	1,226,467			756,372			4,824,489
Treasury stock, at cost	(849,685		)	(276,654		)	(4,390,983		)
Cumulative other comprehensive loss	(370,389		)	(367,878		)	(278,321		)
Total shareholders’ equity	1,791,804			1,516,919			1,609,440
Total Liabilities and Shareholders’ Equity	$	6,234,737		$	5,229,252		$	5,169,235

See notes to consolidated financial statements.

45

STATEMENTS OF CONSOLIDATED CASH FLOWS

(thousands of dollars)

	Year Ended December 31,
Operating Activities	2012			2011			2010
Net income	$	631,034		$	441,860		$	462,485
Adjustments to reconcile net income to net operating cash:
Depreciation	152,217			151,212			140,347
Amortization of intangible assets	26,985			29,692			34,964
Impairment of trademarks and goodwill	4,086			5,492			4,484
Provisions for environmental-related matters	6,736			9,100			7,089
Provisions for (net credit from) qualified exit costs	2,734			534			(3,811		)
Deferred income taxes	(10,422		)	16,913			20,070
Defined benefit pension plans net cost	20,309			12,326			18,104
Income tax effect of ESOP on other capital				(3,211		)	(7,515		)
Stock-based compensation expense	54,348			48,176			42,276
Net increase in postretirement liability	3,666			6,793			4,627
Decrease in non-traded investments	72,861			62,540			53,407
Loss (gain) on disposition of assets	3,454			(5,469		)	2,720
Other	(18,349		)	3,137			3,330
Change in working capital accounts:
(Increase) in accounts receivable	(33,578		)	(93,697		)	(111,113		)
Decrease (increase) in inventories	19,929			(19,222		)	(82,060		)
(Decrease) increase in accounts payable	(51,124		)	64,053			155,116
(Decrease) increase in accrued taxes	(70,264		)	5,435			(19,410		)
Increase (decrease) in accrued compensation and taxes withheld	63,697			(538		)	75,210
(Decrease) increase in refundable income taxes	(32,967		)	(572		)	16,059
DOL settlement accrual	80,000
Other	11,000			36,249			(78,910		)
Costs incurred for environmental-related matters	(31,689		)	(30,451		)	(30,880		)
Costs incurred for qualified exit costs	(4,577		)	(6,181		)	(11,275		)
Other	(12,200		)	1,641			11,276
Net operating cash	887,886			735,812			706,590
Investing Activities
Capital expenditures	(157,112		)	(153,801		)	(125,162		)
Acquisitions of businesses, net of cash acquired	(99,242		)	(44,436		)	(298,161		)
Proceeds from sale of assets	9,677			12,842			8,335
Increase in other investments	(95,778		)	(92,374		)	(74,961		)
Net investing cash	(342,455		)	(277,769		)	(489,949		)
Financing Activities
Net (decrease) increase in short-term borrowings	(284,839		)	(43,346		)	357,835
Proceeds from long-term debt	999,697			40,777			14,798
Payments of long-term debt	(14,000		)	(49,881		)	(159,422		)
Costs associated with repurchase of long-term debt							(22,192		)
Payments of cash dividends	(160,939		)	(153,512		)	(156,424		)
Proceeds from stock options exercised	221,126			69,536			102,209
Income tax effect of stock-based compensation exercises and vesting	104,858			12,958			19,676
Treasury stock purchased	(557,766		)	(367,372		)	(375,677		)
Other	(21,559		)	15,631			(4,371		)
Net financing cash	286,578			(475,209		)	(223,568		)
Effect of exchange rate changes on cash	(2,115		)	(8,723		)	(3,817		)
Net increase (decrease) in cash and cash equivalents	829,894			(25,889		)	(10,744		)
Cash and cash equivalents at beginning of year	32,696			58,585			69,329
Cash and cash equivalents at end of year	$	862,590		$	32,696		$	58,585
Taxes paid on income	$	223,329		$	196,147		$	137,872
Interest paid on debt	41,551			42,897			78,747

See notes to consolidated financial statements.

46

STATEMENTS OF CONSOLIDATED SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(thousands of dollars except per common share data)

	Common Stock			Preferred Stock			Unearned ESOP Compen-sation			Other Capital			Retained Earnings			Treasury Stock			Cumulative Other Comprehensive Loss			Total
Balance at January 1, 2010	$	228,647		$	216,753		$	(216,753	)	$	1,068,963		$	4,518,428		$	(4,007,633	)	$	(317,455	)	$	1,490,950
Net income													462,485									462,485
Other comprehensive income																			39,134			39,134
Treasury stock purchased																(375,677		)				(375,677		)
Income tax effect of ESOP										(7,515		)										(7,515		)
Stock options exercised	2,351									99,857						(7,673		)				94,535
Income tax effect of stock options exercised										19,676												19,676
Restricted stock and stock option grants (net activity)	348									41,928												42,276
Cash dividends -- $1.44 per common share													(156,424		)							(156,424		)
Balance at December 31, 2010	231,346			216,753			(216,753		)	1,222,909			4,824,489			(4,390,983		)	(278,321		)	1,609,440
Net income													441,860									441,860
Other comprehensive loss																			(89,557		)	(89,557		)
Treasury stock purchased																(367,372		)				(367,372		)
Treasury stock retired	(125,426		)										(4,356,465		)	4,481,891
Redemption of preferred stock				(56,480		)	56,480
Income tax effect of ESOP*										(54,420		)										(54,420		)
Stock options exercised	1,234									68,302						(190		)				69,346
Income tax effect of stock options exercised										12,958												12,958
Restricted stock and stock option grants (net activity)	300									47,876												48,176
Cash dividends -- $1.46 per common share													(153,512		)							(153,512		)
Balance at December 31, 2011	107,454			160,273			(160,273		)	1,297,625			756,372			(276,654		)	(367,878		)	1,516,919
Net income													631,034									631,034
Other comprehensive loss																			(2,511		)	(2,511		)
Treasury stock purchased																(557,766		)				(557,766		)
Redemption of preferred stock				(59,187		)	59,187
Stock options exercised	3,867									217,259						(15,265		)				205,861
Income tax effect of stock options exercised										104,858												104,858
Restricted stock and stock option grants (net activity)	302									54,046												54,348
Cash dividends -- $1.56 per common share													(160,939		)							(160,939		)
Balance at December 31, 2012	$	111,623		$	101,086		$	(101,086	)	$	1,673,788		$	1,226,467		$	(849,685	)	$	(370,389	)	$	1,791,804

* Includes $51,209 reduction in Other capital related to IRS Settlement. See Note 14 for more information on the IRS Settlement.

See notes to consolidated financial statements.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

Consolidation. The consolidated financial statements include the accounts of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, “the Company.”) Inter-company accounts and transactions have been eliminated.

Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those amounts.

Nature of operations. The Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America, with additional operations in the Caribbean region, Europe and Asia.

Reportable segments. See Note 18 for further details.

Cash flows. Management considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Fair value of financial instruments. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts reported for Cash and cash equivalents approximate fair value.

Short-term investments: The carrying amounts reported for Short-term investments approximate fair value.

Investments in securities: Investments classified as available-for-sale are carried at market value. See the recurring fair value measurement table on page 49.

Non-traded investments: The Company has invested in the U.S. affordable housing and historic renovation real estate markets. These non-traded investments have been identified as variable interest entities. However, because the Company does not have the power to direct the day-to-day operations of the investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary. In accordance with the Consolidation Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the investments are not consolidated. The Company uses the effective yield method to determine the carrying value of the investments. Under the effective yield method, the initial cost of the investments is amortized over the period that the tax credits are recognized. The carrying amounts of the investments, included in Other assets, were $223,701, $232,366 and $198,023 at December 31, 2012, 2011 and 2010, respectively. The liabilities recorded on the balance sheets for estimated future capital contributions to the investments were $218,688, $235,355 and $194,807 at December 31, 2012, 2011 and 2010, respectively.

Short-term borrowings: The carrying amounts reported for Short-term borrowings approximate fair value.

Long-term debt (including current portion): The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company's publicly traded debt and non-traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. See Note 7.

	December 31,
	2012				2011				2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Publicly traded debt	$	1,630,056	$	1,706,487	$	632,423	$	703,238	$	632,375	$	662,193
Non-traded debt	5,798		5,600		14,631		14,070		23,826		22,454

Derivative instruments: The Company utilizes derivative instruments as part of its overall financial risk management policy. The Company entered into foreign currency option and forward currency exchange contracts with maturity dates of less than twelve months in 2012, 2011 and 2010, primarily to hedge against value changes in foreign currency. See Note 13. There were no derivative contracts outstanding at December 31, 2012, 2011 and 2010.

Fair value measurements. The following tables summarize the Company’s assets and liabilities measured on a recurring and non-recurring basis in accordance with the Fair Value Measurements and Disclosures Topic of the ASC:

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

Assets and Liabilities Reported at Fair Value on a Recurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Deferred compensation plan asset (a)	$	19,995	$	13,893	$	6,102
Liabilities:
Deferred compensation plan liability (b)	$	28,627	$	28,627

(a) The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $19,764.

(b) The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.

Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Trademarks	$	8,928			$	8,928

As a result of the 2012 annual impairment test performed in accordance with the Intangibles Topic of the ASC, trademarks with a carrying value of $13,014 were written down to their calculated fair value of $8,928.

Accounts receivable and allowance for doubtful accounts. Accounts receivable were recorded at the time of credit sales net of provisions for sales returns and allowances. The Company recorded an allowance for doubtful accounts of $47,667, $51,747 and $59,310 at December 31, 2012, 2011 and 2010, respectively, to reduce Accounts receivable to their estimated net realizable value. The allowance was based on an analysis of historical bad debts, a review of the aging of Accounts receivable and the current creditworthiness of customers. All provisions for allowances for doubtful collection of accounts are related to the creditworthiness of accounts and are included in Selling, general and administrative expenses.

Reserve for obsolescence. The Company recorded a reserve for obsolescence of $88,356, $82,671 and $74,372 at December 31, 2012, 2011 and 2010, respectively, to reduce Inventories to their estimated net realizable value. 

Goodwill. Goodwill represents the cost in excess of fair value of net assets acquired in business combinations accounted for by the purchase method. In accordance with the Impairments Topic of the ASC, goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate potential impairment. See Note 4.

Intangible assets. Intangible assets include trademarks, non-compete covenants and certain intangible property rights. As required by the Goodwill and Other Intangibles Topic of the ASC, indefinite-lived trademarks are not amortized, but instead are tested annually for impairment, and between annual tests whenever an event occurs or circumstances indicate potential impairment. See Note 4. The cost of finite-lived trademarks,

non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:

	Useful Life
Finite-lived trademarks	5 years
Non-compete covenants	3 – 5 years
Certain intangible property rights	3 – 20 years

Accumulated amortization of finite-lived intangible assets was $260,065, $237,736 and $228,633 at December 31, 2012, 2011 and 2010, respectively. See Note 4.

Impairment of long-lived assets. In accordance with the Property, Plant and Equipment Topic of the ASC, management evaluates the recoverability and estimated remaining lives of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. See Notes 4 and 5.

Property, plant and equipment. Property, plant and equipment is stated on the basis of cost. Depreciation is provided by the straight-line method. Depreciation and amortization are included in the appropriate Cost of goods sold or Selling, general and administrative expense caption on the Statements of Consolidated Income. Included in Property, plant and

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

equipment are leasehold improvements. The major classes of assets and ranges of annual depreciation rates are:

Buildings	2.5% – 20.0%
Machinery and equipment	5.0% – 20.0%
Furniture and fixtures	10.0% – 33.3%
Automobiles and trucks	10.0% – 33.3%

Standby letters of credit. The Company occasionally enters into standby letter of credit agreements to guarantee various operating activities. These agreements provide credit availability to the various beneficiaries if certain contractual events occur. Amounts outstanding under these agreements totaled $22,845, $18,819 and $22,300 at December 31, 2012, 2011 and 2010, respectively.

Product warranties. The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience and included an amount in Other accruals. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary. Changes in the Company’s accrual for product warranty claims during 2012, 2011 and 2010, including customer satisfaction settlements during the year, were as follows:

	2012			2011			2010
Balance at January 1	$	22,071		$	23,103		$	22,214
Charges to expense	28,590			29,957			23,092
Settlements	(27,951		)	(30,989		)	(22,203		)
Balance at December 31	$	22,710		$	22,071		$	23,103

Environmental matters. Capital expenditures for ongoing environmental compliance measures were recorded in Property, plant and equipment, and related expenses were included in the normal operating expenses of conducting business. The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrued for environmental-related activities for which commitments or clean-up plans have been developed and when such costs could be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms. See Notes 8 and 13.

Employee Stock Purchase and Savings Plan and preferred stock. The Company accounts for the Employee Stock Purchase and Savings Plan (ESOP) in accordance with the Employee Stock Ownership Plans Subtopic of the Compensation – Stock Ownership Topic of the ASC. The

Company recognized compensation expense for amounts contributed to the ESOP, and the ESOP used dividends on unallocated preferred shares to service debt. Unallocated preferred shares held by the ESOP were not considered outstanding in calculating earnings per share of the Company. See Note 11.

Defined benefit pension and other postretirement benefit plans. The Company accounts for its defined benefit pension and other postretirement benefit plans in accordance with the Retirement Benefits Topic of the ASC, which requires the recognition of a plan’s funded status as an asset for overfunded plans and as a liability for unfunded or underfunded plans. See Note 6.

Stock-based compensation. The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. See Note 12.

Foreign currency translation. All consolidated non-highly inflationary foreign operations use the local currency of the country of operation as the functional currency and translated the local currency asset and liability accounts at year-end exchange rates while income and expense accounts were translated at average exchange rates. The resulting translation adjustments were included in Cumulative other comprehensive loss, a component of Shareholders’ equity.

Cumulative other comprehensive loss. At December 31, 2012, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $204,195, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $166,595 and unrealized net gains on marketable equity securities of $401. At December 31, 2011 and 2010, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $196,792 and $131,160, respectively, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $171,376 and $148,006, respectively, and unrealized gains on marketable equity securities and derivative instruments used in cash flow hedges of $290 and $845, respectively.

Revenue recognition. All revenues were recognized when products were shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue was reasonably assured at the time of recognition.

Customer and vendor consideration. The Company offered certain customers rebate and sales incentive programs which were classified as reductions in Net sales. Such programs were in the form of volume rebates, rebates that constituted a

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

percentage of sales or rebates for attaining certain sales goals. The Company received consideration from certain suppliers of raw materials in the form of volume rebates or rebates that constituted a percentage of purchases. These rebates were recognized on an accrual basis by the Company as a reduction of the purchase price of the raw materials and a subsequent reduction of Cost of goods sold when the related product was sold.

Costs of goods sold. Included in Costs of goods sold were costs for materials, manufacturing, distribution and related support. Distribution costs included all expenses related to the distribution of products including inbound freight charges, purchase and receiving costs, warehousing costs, internal transfer costs and all costs incurred to ship products. Also included in Costs of goods sold were total technical expenditures, which included research and development costs, quality control, product formulation expenditures and other similar items. Research and development costs included in technical expenditures were $44,648, $41,719 and $39,883 for 2012, 2011 and 2010, respectively.

Selling, general and administrative expenses. Selling costs included advertising expenses, marketing costs, employee and store costs and sales commissions. The cost of advertising was expensed as incurred. The Company incurred $247,469, $227,303 and $217,637 in advertising costs during 2012, 2011 and 2010, respectively. General and administrative expenses included human resources, legal, finance and other support and administrative functions.

Earnings per share. Shares of preferred stock held in an unallocated account of the ESOP (see Note 11) and common stock held in a revocable trust (see Note 10) were not considered outstanding shares for basic or diluted income per common share calculations. All references to “shares” or “per share” information throughout this report relate to common shares and are stated on a diluted per common share basis, unless otherwise indicated. Basic and diluted net income per common share were calculated using the two-class method in accordance with the Earnings Per Common Share Topic of the ASC. Basic net income per common share amounts were computed based on the weighted-average number of common shares outstanding during the year. Diluted net income per common share amounts were computed based on the weighted-average number of common shares outstanding plus all dilutive securities potentially outstanding during the year. See Note 15.

Impact of recently issued accounting standards. Effective January 1, 2012, the Company adopted Accounting Standards Update (ASU) No. 2011-5 and 2011-12, which amend the Comprehensive Income Topic of the ASC. The updated guidance requires the components of income and other comprehensive income to be presented in a single continuous statement or two consecutive statements in annual periods. The change in presentation did not have an impact on the Company's results of operations, financial condition or liquidity.

In July 2012, the FASB issued ASU No. 2012-2, which amends the Intangibles - Goodwill and Other Topic of the ASC. The updated standard gives companies the option to perform a

qualitative assessment to determine whether indefinite-lived intangible assets are impaired. If the qualitative analysis shows that it is unlikely that an indefinite-lived intangible asset is impaired, then the annual fair value calculation does not need to be performed. However, if it is not unlikely that an indefinite-lived intangible asset is impaired, then the annual fair value calculation must still be performed. ASU No. 2012-2 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company will consider performing the qualitative assessment as part of its future annual impairment tests for indefinite-lived intangible assets. ASU No. 2012-2 is similar to ASU No. 2011-8, which was adopted by the Company in 2012, and amends the Intangibles - Goodwill and Other Topic of the ASC to give companies the option to perform a qualitative assessment that can potentially alleviate the need to perform the quantitative two-step test. These standards may affect the Company's disclosures, but they will not affect its results of operations, financial condition or liquidity.

NOTE 2 – ACQUISITIONS

On November 9, 2012, the Company entered into a definitive Stock Purchase Agreement to purchase all of the issued and outstanding shares of Consorcio Comex, S.A. de C.V. (Comex) for an aggregate purchase price of approximately $2.34 billion, including assumed debt. Comex is a leader in the paint and coatings market in Mexico with headquarters in Mexico City. Completion of the transaction is subject to certain conditions and regulatory approvals.

All completed acquisitions below have been accounted for as purchases and their results of operations have been included in the consolidated financial statements since the date of acquisition.

Effective December 18, 2012, the Company acquired Jiangsu Pulanna Coating Co., Ltd. (Pulanna). Headquartered in Changzhou, China, Pulanna is a leading automotive refinishes coatings manufacturer in China. The acquisition strengthens the Global Finishes Group's established presence in China and its ability to serve automotive customers around the world.

Effective June 1, 2012, the Company acquired Geocel Holdings Corporation. Geocel manufactures innovative caulks, sealants, and adhesives specially designed for tough construction and repair applications in commercial, residential, industrial and

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

transport non-automotive markets. Geocel has operations in both the United States and United Kingdom. The acquisition strengthens the Consumer Group’s sealant and adhesive market position.

The aggregate consideration paid for Pulanna and Geocel was $99,242, net of cash acquired. Both acquisitions resulted in the recognition of goodwill and intangible assets. See Note 4.

The Company acquired a controlling interest in Leighs Paints in July 2011, and the remaining interest in December 2011. Headquartered in Bolton, United Kingdom, Leighs Paints is one of the leading industrial fire protection coatings manufacturers in the world, with a growing global platform driven by technology innovation and quality products. Leighs Paints strengthens the Global Finishes Group’s growing global platform. The aggregate consideration paid for Leighs Paints was $41,824, net of cash acquired. The acquisition resulted in the recognition of goodwill and intangible assets. See Note 4.

The following unaudited pro-forma summary presents consolidated financial information as if Pulanna, Geocel and Leighs Paints had been acquired at the beginning of 2011. The unaudited pro-forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisitions taken place on January 1, 2011 or the future results of operations of the combined companies under ownership and operation of the Company.

	2012		2011
Net sales	$	9,589,229	$	8,888,661
Net income	641,090		448,751
Net income per common share:
Basic	6.25		4.29
Diluted	6.12		4.20

NOTE 3 – INVENTORIES

Inventories were stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method. The following presents the effect on inventories, net income and net income per common share had the Company used the first-in, first-out (FIFO) inventory valuation method adjusted for income taxes at the statutory rate and assuming no other adjustments. Management believes that the use of LIFO results in a better matching of costs and revenues. This information is presented to enable the reader to make comparisons with companies using the FIFO method of inventory valuation. During 2012 and 2011, certain inventories accounted for on the LIFO method were reduced, resulting in the liquidation of certain quantities carried at costs prevailing in prior years. The 2012 liquidations reduced net income by $160 and the 2011 liquidations increased net income by $1,067.

	2012			2011			2010
Percentage of total inventories on LIFO	75		%	77		%	76		%
Excess of FIFO over LIFO	$	357,303		$	378,986		$	277,164
Increase (decrease) in net income due to LIFO	13,365			(62,636		)	(16,394		)
Increase (decrease) in net income per common share due to LIFO	.13			(.59		)	(.15		)

NOTE 4 – GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS

During 2012, the Company recognized $42,064 of goodwill and $15,899 of indefinite-lived trademarks in the acquisitions of Geocel and Pulanna. Acquired customer relationships, finite-lived trademarks and covenants not to compete recognized in these acquisitions valued at $27,487, $13,000 and $9,720, respectively, are being amortized over periods ranging from 6 to 15 years from the date of acquisition.

During 2011, the Company recognized $5,039 of goodwill in the acquisition of Leighs Paints. Acquired technology, trademarks and customer relationships recognized in this acquisition valued at $4,794, $2,125 and $1,918, respectively, are being amortized over periods ranging from 5 to 10 years from the date of acquisition.

During 2010, the Company recognized $79,909 of goodwill and $18,007 of trademarks in the acquisitions of Sayerlack Industrial Coatings (Sayerlack), Becker Industrial Products AB (Acroma) and Pinturas Condor S.A. (Pinturas Condor). Customer relationships valued at $35,886 recognized in the acquisitions of Acroma and Pinturas Condor are being amortized over periods of 15 and 19 years, respectively, from the date of acquisition.

In accordance with the Property, Plant and Equipment Topic of the ASC, whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable or the useful life may have changed, impairment tests are to be performed. Undiscounted cash flows are to be used to calculate the recoverable value of long-lived assets to determine if such assets are impaired. Where impairment is identified, a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets, is to be used to determine the fair value for the assets to measure any potential impairment.

In 2011, a reduction in the carrying value of property, plant and equipment associated with a facility closed during 2008 was recorded (see Note 5).

During 2010, a reduction in the carrying value of property, plant and equipment associated with one manufacturing facility closed during 2009 was recorded (see Note 5). In addition, finite-lived intangible assets and property, plant and equipment

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

in the Global Finishes Group had reductions in carrying value of $4,364 and $2,177, respectively, due to undiscounted cash flow projections below carrying values.

In accordance with the Goodwill and Other Intangibles Topic of the ASC, goodwill and indefinite-lived intangible assets are tested for impairment annually, and interim impairment tests are performed whenever an event occurs or circumstances change that indicate an impairment has more likely than not occurred. October 1 has been established for the annual impairment review. At the time of impairment testing, values are estimated separately for goodwill and trademarks with indefinite lives using a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets. An optional qualitative assessment may alleviate the need to perform the quantitative goodwill impairment test when impairment is unlikely. The Company used the qualitative assessment for each of its reporting units in 2012. Impairments of trademarks with indefinite lives have been reported as a separate line in the Statements of Consolidated Income.

The annual impairment review performed as of October 1, 2012 resulted in trademark impairments in the Paint Stores

Group and Global Finishes Group of $3,400 and $686, respectively, and no goodwill impairment. The trademark impairments related primarily to the planned conversion of various acquired brands.

The annual impairment review performed as of October 1, 2011 resulted in trademark impairments in the Paint Stores Group and Global Finishes Group of $4,669 and $823, respectively, and no goodwill impairment. The trademark impairments related primarily to lower-than-anticipated sales of acquired brands.

The annual impairment review performed as of October 1, 2010 resulted in trademark impairment in the Paint Stores Group of $120 and no goodwill impairment. The trademark impairment related primarily to lower-than-anticipated sales of an acquired brand.

Amortization of finite-lived intangible assets is as follows for the next five years: $33,279 in 2013, $29,840 in 2014, $25,866 in 2015 and $22,145 in 2016 and $18,003 in 2017.

A summary of changes in the Company’s carrying value of goodwill by reportable segment is as follows:

Goodwill	Paint Stores Group			Consumer Group			Global Finishes Group			Latin America Coatings Group			Consolidated Totals
Balance at January 1, 2010 (a)	$	285,445		$	686,612		$	42,397		$	371		$	1,014,825
Acquisitions							70,594			9,315			79,909
Currency and other adjustments	1,299			2,776			2,728			921			7,724
Balance at December 31, 2010 (a)	286,744			689,388			115,719			10,607			1,102,458
Acquisitions							5,039						5,039
Currency and other adjustments	254			(109		)	(408		)	774			511
Balance at December 31, 2011 (a)	286,998			689,279			120,350			11,381			1,108,008
Acquisitions				17,357			24,707						42,064
Currency and other adjustments	(214		)	(344		)	7,230			(739		)	5,933
Balance at December 31, 2012 (a)	$	286,784		$	706,292		$	152,287		$	10,642		$	1,156,005

(a) Net of accumulated impairment losses of $8,904 ($8,113 in the Consumer Group and $791 in the Global Finishes Group).

A summary of the Company’s carrying value of intangible assets is as follows: 

	Finite-lived intangible assets									Trademarks with indefinite lives		Total intangible assets
	Software			All other			Subtotal
December 31, 2012
Weighted-average amortization period	8 years			12 years			11 years
Gross	$	107,779		$	337,089		$	444,868
Accumulated amortization	(66,106		)	(193,959		)	(260,065		)
Net value	$	41,673		$	143,130		$	184,803		$	162,750	$	347,553
December 31, 2011
Weighted-average amortization period	7 years			13 years			11 years
Gross	$	109,401		$	274,086		$	383,487
Accumulated amortization	(60,030		)	(177,706		)	(237,736		)
Net value	$	49,371		$	96,380		$	145,751		$	160,122	$	305,873
December 31, 2010
Weighted-average amortization period	8 years			13 years			11 years
Gross	$	107,141		$	254,462		$	361,603
Accumulated amortization	(57,480		)	(171,153		)	(228,633		)
Net value	$	49,661		$	83,309		$	132,970		$	187,534	$	320,504

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

NOTE 5 – EXIT OR DISPOSAL ACTIVITIES

Management is continually re-evaluating the Company’s operating facilities, including acquired operating facilities, against its long-term strategic goals. Liabilities associated with exit or disposal activities are recognized as incurred in accordance with the Exit or Disposal Cost Obligations Topic of the ASC. Provisions for qualified exit costs are made at the time a facility is no longer operational. Qualified exit costs primarily include post-closure rent expenses or costs to terminate the contract before the end of its term and costs of employee terminations. Adjustments may be made to liabilities accrued for qualified exit costs if information becomes available upon which more accurate amounts can be reasonably estimated. Concurrently, property, plant and equipment is tested for impairment in accordance with the Property, Plant and Equipment Topic of the ASC, and if impairment exists, the carrying value of the related assets is reduced to estimated fair value. Additional impairment may be recorded for subsequent revisions in estimated fair value. Adjustments to prior provisions and additional impairment charges for property, plant and equipment of closed sites being held for disposal are recorded in Other general expense – net.

During 2012, 19 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other qualified exit cost of $7,363 and $313 were charged to the Global Finishes Group and Paint Stores Group, respectively. There were no provisions for severance and other qualified exit costs charged to the Consumer Group or Latin America Coatings Group. Adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2012 of $(4,942) were recorded.

During 2011, 22 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other

qualified exit costs of $913, $339 and $182 were charged to the Global Finishes Group, Consumer Group and Paint Stores Group, respectively. There were no provisions for severance and other qualified exit costs charged to the Latin America Coatings Group. Adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2011 of $(900) were recorded. In 2011, a reduction of $3,263 in the carrying value of property, plant and equipment associated with a facility closed in 2008 was recorded in the Paint Stores Group.

During 2010, 23 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other qualified exit costs of $1,314, $457 and $182 were charged to the Global Finishes Group, Consumer Group and Paint Stores Group, respectively. Adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2010 of $(5,764) were recorded. In 2010, a reduction of $1,164 in the carrying value of the property, plant and equipment associated with a manufacturing facility closed in 2009 was recorded.

At December 31, 2012, a portion of the remaining accrual for qualified exit costs relating to facilities shutdown prior to 2010 is expected to be incurred by the end of 2013. The remaining portion of the ending accrual for facilities shutdown prior to 2010 primarily represented post-closure contractual expenses related to certain owned facilities which are closed and being held for disposal or involved in ongoing environmental-related activities. The Company cannot reasonably estimate when such matters will be concluded to permit disposition.

The tables on the following pages summarize the activity and remaining liabilities associated with qualified exit costs:

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

Exit Plan	Balance at December 31, 2011		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2012
Paint Stores Group stores shutdown in 2012:
Other qualified exit costs			$	313							$	313
Global Finishes Group facility shutdown in 2012:
Severance and related costs			3,933		$	(1,697	)				2,236
Other qualified exit costs			3,430								3,430
Consumer Group manufacturing facilities shutdown in 2011:
Severance and related costs	$	197			(133		)	$	(64	)
Paint Stores Group stores shutdown in 2011:
Other qualified exit costs	156				(144		)	(12		)
Global Finishes Group branches shutdown in 2011:
Severance and related costs	129				(134		)	5
Other qualified exit costs	470				(180		)				290
Global Finishes Group branches shutdown in 2010:
Other qualified exit costs	955				(133		)				822
Other qualified exit costs for facilities shutdown prior to 2010	8,493				(2,156		)	(4,871		)	1,466
Totals	$	10,400	$	7,676	$	(4,577	)	$	(4,942	)	$	8,557

Exit Plan	Balance at December 31, 2010		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2011
Consumer Group manufacturing facilities shutdown in 2011:
Severance and related costs			$	339	$	(142	)				$	197
Paint Stores Group stores shutdown in 2011:
Other qualified exit costs			182		(26		)				156
Global Finishes Group branches shutdown in 2011:
Severance and related costs			316		(187		)				129
Other qualified exit costs			597		(127		)				470
Global Finishes Group branches shutdown in 2010:
Other qualified exit costs	$	1,114			(159		)				955
Paint Stores Group stores shutdown in 2010:
Other qualified exit costs	4							$	(4	)
Paint Stores Group stores shutdown in 2009:
Other qualified exit costs	2,022				(805		)	3			1,220
Global Finishes Group manufacturing facility and branches shutdown in 2009:
Other qualified exit costs	1,820				(918		)	262			1,164
Consumer Group manufacturing facilities shutdown in 2009:
Other qualified exit costs	721				(245		)	(74		)	402
Other qualified exit costs for facilities shutdown prior to 2009	10,366				(3,572		)	(1,087		)	5,707
Totals	$	16,047	$	1,434	$	(6,181	)	$	(900	)	$	10,400

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

Exit Plan	Balance at January 1, 2010		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2010
Global Finishes Group branches shutdown in 2010:
Severance and related costs			$	31	$	(31	)
Other qualified exit costs			1,283		(169		)				$	1,114
Paint Stores Group stores shutdown in 2010:
Other qualified exit costs			182		(178		)				4
Paint Stores Group stores shutdown in 2009:
Other qualified exit costs	$	3,213			(1,213		)	$	22		2,022
Consumer Group manufacturing facilities shutdown in 2009:
Severance and related costs	4,532		457		(3,534		)	(1,455		)
Other qualified exit costs	2,258				(612		)	(925		)	721
Global Finishes Group manufacturing facility and branches shutdown in 2009:
Severance and related costs	204				(78		)	(126		)
Other qualified exit costs	3,703				(1,288		)	(595		)	1,820
Paint Stores Group manufacturing and distribution facilities, administrative offices and stores shutdown in 2008:
Severance and related costs	70				(66		)	(4		)
Other qualified exit costs	5,426				(1,864		)	(504		)	3,058
Consumer Group manufacturing and distribution facilities shutdown in 2008:
Severance and related costs	311							(311		)
Other qualified exit costs	83				(60		)	219			242
Global Finishes Group administrative offices and branches shutdown in 2008:
Other qualified exit costs	88				(88		)
Other qualified exit costs for facilities shutdown prior to 2008	11,245				(2,094		)	(2,085		)	7,066
Totals	$	31,133	$	1,953	$	(11,275	)	$	(5,764	)	$	16,047

NOTE 6 – PENSION, HEALTH CARE AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

The Company provides pension benefits to substantially all employees through primarily noncontributory defined contribution or defined benefit plans and certain health care and life insurance benefits to domestic active employees and eligible retirees. In accordance with the Retirement Benefits Topic of the ASC, the Company recognizes an asset for overfunded defined benefit pension or other postretirement benefit plans and a liability for unfunded or underfunded plans. In addition, actuarial gains and losses and prior service costs of such plans are recorded in Cumulative other compre- hensive loss, a component of Shareholders’ equity. The amounts recorded in Cumulative other comprehensive loss will continue to be modified as actuarial assumptions and service costs change, and all such amounts will be amortized to expense over a period of years through the net pension cost (credit) and net periodic benefit cost.

Health care plans. The Company provides certain domestic health care plans that are contributory and contain

cost-sharing features such as deductibles and coinsurance. There were 18,609, 18,189 and 17,841 active employees entitled to receive benefits under these plans at December 31, 2012, 2011 and 2010, respectively. The cost of these benefits for active employees, which includes claims incurred and claims incurred but not reported, amounted to $163,011, $155,501 and $144,927 for 2012, 2011 and 2010, respectively.

Defined contribution pension plans. The Company’s annual contribution for its domestic defined contribution pension plan was $25,147, $23,344 and $22,512 for 2012, 2011 and 2010, respectively. The contribution percentage ranges from two percent to seven percent of compensation for covered employees based on an age and service formula. Assets in employee accounts of the domestic defined contribution pension plan are invested in various investment funds as directed by the participants. These investment funds did not own a significant

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

number of shares of the Company’s common stock for any year presented.

The Company’s annual contribution for its foreign defined contribution pension plans, which is based on various percentages of compensation for covered employees up to certain limits, was $4,621, $3,807 and $3,968 for 2012, 2011 and 2010, respectively. Assets in employee accounts of the foreign defined contribution pension plans are invested in various investment funds. These investment funds did not own a significant number of shares of the Company’s common stock for any year presented.

Defined benefit pension plans. The Company has one salaried and one hourly domestic defined benefit pension plan, and fifteen foreign defined benefit pension plans, including two European plans acquired in connection with the 2011 and 2010 acquisitions of Leighs Paints and Acroma. All participants in the domestic salaried defined benefit pension plan prior to January 1, 2002 retain the previous defined benefit formula for computing benefits with certain modifications for active employees. Eligible domestic salaried employees hired or re-hired between January 1, 2002 and September 30, 2011 became participants in the revised domestic salaried defined benefit pension plan upon completion of six months of service. All employees who became participants on or after January 1, 2002 and before January 1, 2005 were credited with certain contribution credits equivalent to six percent of their salary. All employees who became participants on or after January 1, 2005 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised, and all employees who become participants on or after January 1, 2002 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Contribution credits are converted into units to account for each participant’s benefits. Participants will receive a variable annuity benefit upon retirement or a lump sum distribution upon termination (if vested). The variable annuity benefit is subject to the hypothetical returns achieved on each participant’s allocation of units from investments in various investment funds as directed by the participant. Contribution credits to the revised domestic salaried defined benefit pension plan are being funded through existing plan assets. Effective October 1, 2011, the domestic salaried defined benefit pension plan was frozen for new hires, and all newly hired U.S. non-collectively bargained employees are

eligible to participate in the Company’s domestic defined contribution plan.

At December 31, 2012, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $313,964, fair value of plan assets of $559,552 and excess plan assets of $245,588. The domestic hourly defined benefit pension plan was underfunded, with a projected benefit obligation of $152,863, fair value of plan assets of $144,011 and a deficiency of plan assets of $8,852. The plans are funded in accordance with all applicable regulations at December 31, 2012 and no funding will be required in 2013. At December 31, 2011, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $269,314, fair value of plan assets of $487,990 and excess plan assets of $218,676, and the domestic hourly defined benefit pension plan was underfunded, with a projected benefit obligation of $140,715, fair value of plan assets of $126,473 and a deficiency of plan assets of $14,242. At December 31, 2010, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $261,996, fair value of plan assets of $502,707 and excess plan assets of $240,711, and the domestic hourly defined benefit pension plan was overfunded, with a projected benefit obligation of $128,261, fair value of plan assets of $132,018 and excess plan assets of $3,757.

At December 31, 2012, twelve of the Company’s foreign defined benefit pension plans were unfunded or underfunded, with combined projected benefit obligations, fair values of net assets and deficiencies of plan assets of $105,045, $65,026 and $40,019, respectively. An increase of $27,294 from 2011 in the combined projected benefit obligations of all foreign defined benefit pension plans was primarily due to changes in plan assumptions.

The Company expects to make the following benefit payments for all domestic and foreign defined benefit pension plans: $41,784 in 2013; $42,435 in 2014; $43,457 in 2015; $43,631 in 2016; $43,992 in 2017; and $225,564 in 2018 through 2022.

The estimated net actuarial losses and prior service (credits) for the defined benefit pension plans that are expected to be amortized from Cumulative other comprehensive loss into the net pension costs in 2013 are $15,111 and $(310), respectively.

The following table summarizes the components of the net pension costs and Cumulative other comprehen-sive loss related to the defined benefit pension plans:

57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

	Domestic Defined Benefit Pension Plans									Foreign Defined Benefit Pension Plans
	2012			2011			2010			2012			2011			2010
Net pension costs:
Service costs	$	19,061		$	17,933		$	16,906		$	3,654		$	3,055		$	2,061
Interest costs	17,442			18,602			18,028			6,927			5,954			4,266
Expected returns on plan assets	(44,841		)	(46,441		)	(42,311		)	(6,799		)	(5,535		)	(2,842		)
Amortization of prior service costs	1,591			1,635			1,661									29
Amortization of actuarial losses	22,205			16,865			18,943			1,022			493			1,363
Ongoing pension costs	15,458			8,594			13,227			4,804			3,967			4,877
Settlement costs (credits)										47			(235		)
Net pension costs	15,458			8,594			13,227			4,851			3,732			4,877
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial (gains) losses arising during the year	(26,459		)	48,745			681			14,131			15,944			(10,043		)
Prior service costs during the year	2,495			1,195
Amortization of prior service costs	(1,591		)	(1,635		)	(1,661		)							(29		)
Amortization of actuarial losses	(22,205		)	(16,865		)	(18,943		)	(1,022		)	(493		)	(1,363		)
Exchange rate gain (loss) recognized during the year										1,464			(387		)	(1,536		)
Total recognized in Cumulative other comprehensive loss	(47,760		)	31,440			(19,923		)	14,573			15,064			(12,971		)
Total recognized in net pension costs and Cumulative other comprehensive loss	$	(32,302	)	$	40,034		$	(6,696	)	$	19,424		$	18,796		$	(8,094	)

The Company employs a total return investment approach for the domestic and foreign defined benefit pension plan assets. A mix of equities and fixed income investments are used to maximize the long-term return of assets for a prudent level of risk. In determining the expected long-term rate of return on defined benefit pension plan assets, management considers the historical rates of return, the nature of investments and an expectation of future investment strategies. The target allocations for plan assets are 45 – 65 percent equity securities and 30 – 40 percent fixed income securities.

58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

The following tables summarize the fair value of the defined benefit pension plan assets at December 31, 2012, 2011 and 2010:

	Fair Value at December 31, 2012		Quoted Prices in  Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	68,795			$	68,795
Equity investments (b)	490,993		$	243,553	247,440
Fixed income investments (c)	239,558		131,276		108,282
Other assets (d)	37,230				18,380		$	18,850
	$	836,576	$	374,829	$	442,897	$	18,850
	Fair Value at December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	9,408			$	9,408
Equity investments (b)	482,694		$	268,307	214,387
Fixed income investments (c)	202,939		103,485		99,454
Other assets (d)	37,482				16,582		$	20,900
	$	732,523	$	371,792	$	339,831	$	20,900
	Fair Value at December 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	33,050			$	33,050
Equity investments (b)	463,108		$	257,616	205,492
Fixed income investments (c)	185,163		101,227		78,401		$	5,535
Other assets (d)	19,152						19,152
	$	700,473	$	358,843	$	316,943	$	24,687

(a) This category includes a full range of high quality, short-term money market securities.

(b) This category includes actively managed equity assets that track primarily to the S&P 500.

(c) This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.

(d) This category consists of venture capital funds.

The following tables summarize the changes in the fair value of the defined benefit pension plan assets classified as level 3 at December 31, 2012, 2011 and 2010: 

	Balance at December 31, 2011		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2012
Other assets	$	20,900	$	(3,827	)	$	1,777	$	18,850
	Balance at December 31, 2010		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2011
Fixed income investments	$	5,535	$	(5,717	)	$	182
Other assets	19,152		(1,389		)	3,137		$	20,900
	$	24,687	$	(7,106	)	$	3,319	$	20,900
	Balance at January 1,  2010		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2010
Fixed income investments	$	5,265	$	(269	)	$	539	$	5,535
Other assets	17,728		(695		)	2,119		19,152
	$	22,993	$	(964	)	$	2,658	$	24,687

Included as equity investments in the domestic defined benefit pension plan assets at December 31, 2012 were 300,000 shares of the Company’s common stock with a market value of $46,146, representing 6.6 percent of total domestic plan assets. Dividends received on the Company’s common stock during 2012 totaled $1,334.

59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

The following table summarizes the obligations, plan assets and assumptions used for the defined benefit pension plans, which are all measured as of December 31:

	Domestic Defined Benefit Pension Plans									Foreign Defined Benefit Pension Plans
	2012			2011			2010			2012			2011			2010
Accumulated benefit obligations at end of year	$	460,591		$	415,163		$	371,195		$	142,769		$	121,137		$	67,964
Projected benefit obligations:
Balances at beginning of year	$	410,029		$	390,257		$	339,275		$	141,465		$	85,936		$	75,175
Service costs	19,061			17,933			16,906			3,654			3,055			2,061
Interest costs	17,442			18,602			18,028			6,927			5,954			4,266
Actuarial losses (gains)	48,346			8,428			41,739			17,532			11,395			(6,950		)
Acquisitions of businesses and other	2,496			1,194						(975		)	42,131			14,378
Effect of foreign exchange										6,633			(3,760		)	(1,063		)
Benefits paid	(30,547		)	(26,385		)	(25,691		)	(6,478		)	(3,246		)	(1,931		)
Balances at end of year	466,827			410,029			390,257			168,758			141,465			85,936
Plan assets:
Balances at beginning of year	614,463			634,725			577,047			118,060			65,748			55,870
Actual returns on plan assets	119,647			6,123			83,369			10,201			987			5,935
Acquisitions of businesses and other										6,205			57,761			7,085
Effect of foreign exchange										5,025			(3,190		)	(1,211		)
Benefits paid	(30,547		)	(26,385		)	(25,691		)	(6,478		)	(3,246		)	(1,931		)
Balances at end of year	703,563			614,463			634,725			133,013			118,060			65,748
Excess (deficient) plan assets over projected benefit obligations	$	236,736		$	204,434		$	244,468		$	(35,745	)	$	(23,405	)	$	(20,188	)
Assets and liabilities recognized in the Consolidated Balance Sheets:
Deferred pension assets	$	245,588		$	218,676		$	244,468		$	4,323		$	9,674		$	3,865
Other accruals										(869		)	(829		)	(272		)
Other long-term liabilities	(8,852		)	(14,242		)				(39,199		)	(32,250		)	(23,781		)
	$	236,736		$	204,434		$	244,468		$	(35,745	)	$	(23,405	)	$	(20,188	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(163,088	)	$	(211,752	)	$	(179,871	)	$	(41,567	)	$	(26,994	)	$	(11,930	)
Prior service costs	(6,110		)	(5,206		)	(5,647		)
	$	(169,198	)	$	(216,958	)	$	(185,518	)	$	(41,567	)	$	(26,994	)	$	(11,930	)
Weighted-average assumptions used to determine projected benefit obligations:
Discount rate	3.73		%	4.40		%	4.97		%	4.58		%	4.94		%	5.45		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%	4.08		%	4.05		%	4.06		%
Weighted-average assumptions used to determine net pension costs:
Discount rate	4.40		%	4.97		%	5.50		%	4.94		%	5.48		%	5.57		%
Expected long-term rate of return on assets	7.50		%	7.50		%	7.50		%	6.04		%	6.12		%	5.46		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%	4.04		%	4.06		%	3.74		%

Postretirement Benefits Other Than Pensions. Employees of the Company hired in the United States prior to January 1, 1993 who are not members of a collective bargaining unit, and certain groups of employees added through acquisitions, are eligible for health care and life

insurance benefits upon retirement, subject to the terms of the unfunded plans. There were 4,402, 4,436 and 4,768 retired employees entitled to receive such postretirement benefits at December 31, 2012, 2011 and 2010, respectively.

60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

The following table summarizes the obligation and the assumptions used for postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2012			2011			2010
Benefit obligation:
Balance at beginning of year - unfunded	$	316,795		$	315,572		$	300,526
Service cost	2,943			3,495			3,532
Interest cost	13,520			15,580			16,066
Actuarial loss (gain)	18,961			(3,965		)	11,067
Benefits paid	(14,085		)	(13,887		)	(15,619		)
Balance at end of year - unfunded	$	338,134		$	316,795		$	315,572
Liabilities recognized in the Consolidated Balance Sheets:
Postretirement benefits other than pensions	$	(320,223	)	$	(297,528	)	$	(295,896	)
Other accruals	(17,911		)	(19,267		)	(19,676		)
	$	(338,134	)	$	(316,795	)	$	(315,572	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(62,814	)	$	(45,567	)	$	(52,037	)
Prior service costs	328			983			1,640
	$	(62,486	)	$	(44,584	)	$	(50,397	)
Weighted-average assumptions used to determine benefit obligation:
Discount rate	3.70		%	4.40		%	5.10		%
Health care cost trend rate - pre-65	8.00		%	8.00		%	7.50		%
Health care cost trend rate - post-65	8.00		%	8.00		%	7.50		%
Prescription drug cost increases	8.00		%	8.00		%	8.00		%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	4.40		%	5.10		%	5.50		%
Health care cost trend rate - pre-65	8.00		%	7.50		%	8.00		%
Health care cost trend rate - post-65	8.00		%	7.50		%	8.00		%
Prescription drug cost increases	8.00		%	8.00		%	9.00		%

The following table summarizes the components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2012			2011			2010
Net periodic benefit cost:
Service cost	$	2,943		$	3,495		$	3,532
Interest cost	13,520			15,580			16,066
Amortization of actuarial losses	1,715			2,505			1,304
Amortization of prior service credit	(656		)	(657		)	(656		)
Net periodic benefit cost	17,522			20,923			20,246
Other changes in projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial loss (gain)	18,961			(3,965		)	11,067
Amortization of actuarial losses	(1,715		)	(2,505		)	(1,304		)
Amortization of prior service credit	656			657			656
Total recognized in Cumulative other comprehensive loss	17,902			(5,813		)	10,419
Total recognized in net periodic benefit cost and Cumulative other comprehensive loss	$	35,424		$	15,110		$	30,665

The estimated net actuarial loss and prior service credit for postretirement benefits other than pensions that are expected to be amortized from Cumulative other comprehensive loss into net periodic benefit cost in 2013 are $3,934 and $(328), respectively.

The assumed health care cost trend rate and prescription drug cost increases used to determine the net periodic benefit cost for postretirement health care benefits for 2013 both decrease in each successive year until reaching 5.0 percent in 2019.

61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

The assumed health care and prescription drug cost trend rates have a significant effect on the amounts reported for the postretirement health care benefit obligation. A one-percentage-point change in assumed health care and prescription drug cost trend rates would have had the following effects at December 31, 2012:

	One-Percentage-Point
	Increase		(Decrease)
Effect on total of service and interest cost components	$	117	$	(124	)
Effect on the postretirement benefit obligation	$	2,938	$	(3,039	)

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Medicare Act) introduced a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In accordance with the accounting guidance related to the Medicare Act included in the Retirement Benefits Topic of the ASC, the effects of the federal subsidy resulted in a $21,400 reduction of the accumulated postretirement benefit obligation for benefits attributed to past service, which is being recognized prospectively beginning July 1, 2004. During 2012, this recognition resulted in a $5,712 reduction of the net periodic

benefit cost, which consisted of changes in actuarial experience and reductions in interest cost of $5,278 and $434, respectively. During 2011, this recognition resulted in a $7,073 reduction of the net periodic benefit cost, which consisted of changes in actuarial experience and reductions in interest cost of $6,831 and $242, respectively. During 2010, this recognition resulted in a $4,170 reduction of the net periodic benefit cost, which consisted of reductions in interest cost, amortization of changes in actuarial experience and service cost of $1,973, $1,852 and $345, respectively. The initial effects of the federal subsidy attributable to past service have been fully recognized.

In the first quarter of 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the “Acts”) were enacted and became U.S. law. The Acts eliminated the tax deduction previously allowed for the Medicare Part D subsidy beginning in years after December 31, 2012. The Company recognized the deferred tax effects of the reduced deductibility of the subsidy during the first quarter of 2010. The resulting one-time increase in income taxes of $11,400 reduced 2010 basic and diluted earnings per share by $.11 and $.10, respectively.

The Company expects to make retiree health care benefit cash payments and to receive Medicare Part D prescription cash reimbursements as follows:

	Retiree Health Care Benefits		Medicare Prescription Reimbursement			Expected Cash Payments - Net
2013	$	20,087	$	(2,176	)	$	17,911
2014	21,324		(2,357		)	18,967
2015	22,305		(2,531		)	19,774
2016	23,011		(2,698		)	20,313
2017	23,357		(680		)	22,677
2018 through 2022	114,784		(2,187		)	112,597
Total expected benefit cash payments	$	224,868	$	(12,629	)	$	212,239

NOTE 7 – DEBT

Long-term debt

	Due Date	2012		2011		2010
1.35% Senior Notes	2017	$	699,091
3.125% Senior Notes	2014	499,912		$	499,867	$	499,822
4.00% Senior Notes	2042	298,493
7.375% Debentures	2027	129,060		129,056		129,053
7.45% Debentures	2097	3,500		3,500		3,500
2.00% to 2.02% Promissory Notes	Through 2023	2,109		6,808		15,951
		$	1,632,165	$	639,231	$	648,326

Maturities of long-term debt are as follows for the next five years: $3,689 in 2013; $500,488 in 2014; $325 in 2015; $146 in 2016 and $700,149 in 2017. Interest expense on long-term debt was $36,188, $31,883 and $64,442 for 2012, 2011 and 2010, respectively.

Among other restrictions, the Company’s Notes, Debentures and revolving credit agreement contain certain covenants relating to liens, ratings changes, merger and sale of assets, consolidated leverage and change of control as defined in the agreements. In the event of default under any one of these

arrangements, acceleration of the maturity of any one or more of these borrowings may result. The Company was in compliance with all covenants for all years presented.

On December 4, 2012, the Company issued $700,000 of 1.35% Senior Notes due 2017 and $300,000 of 4.00% Senior

62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

Notes due 2042. The Senior Notes are covered under a shelf registration filed with the Securities and Exchange Commission (SEC) on December 16, 2009. The proceeds will be used for general corporate purposes, including repayment of short-term borrowings and financing acquisitions.

During 2010, the Company repurchased $136,500 of its publicly traded 7.45% Debentures due 2097. Costs related to the repurchase increased interest expense by $24,165.

Short-term borrowings. At December 31, 2012, there were no borrowings outstanding under the domestic commercial paper program. At December 31, 2011 and 2010, borrowings outstanding under the domestic commercial paper program totaled $264,902 and $173,490, respectively, and were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 0.2% at December 31, 2011 and 2010. Borrowings outstanding under various foreign programs of $69,035, $81,375 and $215,102 at December 31, 2012, 2011 and 2010, respectively, were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 2.8%, 4.9% and 2.9% at December 31, 2012, 2011 and 2010, respectively.

On July 19, 2010, Sherwin-Williams Luxembourg S.à r.l., a wholly-owned subsidiary of the Company, entered into a €200,000 (Euro) credit facility. On December 28, 2010, the Company reduced the aggregate amount of this credit facility to €150,000 (Euro). During 2011, the aggregate amount of this credit facility was further reduced to €97,000 (Euro). On September 19, 2012, this credit facility was replaced by a new €95,000 (Euro) five-year revolving credit facility. On July 19, 2010, Sherwin-Williams Canada Inc., a wholly-owned subsidiary of the Company, entered into a CAD 75,000 credit facility. On June 29, 2012, this credit facility was replaced by a new CAD 75,000 five-year credit facility. These credit facilities are being used for general corporate purposes, including refinancing indebtedness and for acquisitions.

On January 30, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit of up to an aggregate availability of $500,000. On April 23, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. On November 14, 2012, the Company entered into a three-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. The three credit agreements entered into in 2012 replace prior credit facilities that matured in 2012 and 2011. At December 31, 2012, 2011 and 2010, there were no borrowings outstanding under any of these credit agreements.

The Company uses a revolving credit agreement primarily to satisfy its commercial paper program’s dollar for dollar

liquidity requirement. On January 8, 2010, the Company terminated the existing $845,000 revolving credit agreement and entered into a new $500,000 revolving credit agreement. On July 8, 2011, the Company entered into a new five-year $1.05 billion revolving credit agreement, which replaced the existing three-year $500,000 credit agreement. The new credit agreement allows the Company to extend the maturity of the facility with two one-year extension options and to increase the aggregate amount of the facility to $1.30 billion, both of which are subject to the discretion of each lender.

NOTE 8 – OTHER LONG-TERM LIABILITIES

The operations of the Company, like those of other companies in our industry, are subject to various domestic and foreign environmental laws and regulations. These laws and regulations not only govern current operations and products, but also impose potential liability on the Company for past operations. Management expects environmental laws and regulations to impose increasingly stringent requirements upon the Company and the industry in the future. Management believes that the Company conducts its operations in compliance with applicable environmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance.

The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites (including sites which were previously owned and/or operated by businesses acquired by the Company). In addition, the Company, together with other parties, has been designated a potentially responsible party under federal and state environmental protection laws for the investigation and remediation of environmental contamination and hazardous waste at a number of third-party sites, primarily Superfund sites. In general, these laws provide that potentially responsible parties may be held jointly and severally liable for investigation and remediation costs regardless of fault. The Company may be similarly designated with respect to additional third-party sites in the future.

The Company initially provides for estimated costs of environmental-related activities relating to its past operations and third-party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are determined based on currently available facts regarding each site. If the best estimate

63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is provided. The Company continuously assesses its potential liability for investigation and remediation-related activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Included in Other long-term liabilities at December 31, 2012, 2011, and 2010 were accruals for extended environmental-related activities of $97,220, $89,266 and $89,562, respectively. Included in Other accruals at December 31, 2012, 2011, and 2010 were accruals for estimated costs of current investigation and remediation activities of $17,101, $42,847 and $60,048, respectively.

Actual costs incurred may vary from the accrued estimates due to the inherent uncertainties involved including, among others, the number and financial condition of parties involved with respect to any given site, the volumetric contribution which may be attributed to the Company relative to that attributed to other parties, the nature and magnitude of the wastes involved, the various technologies that can be used for remediation and the determination of acceptable remediation with respect to a particular site. If the Company’s future loss contingency is ultimately determined to be at the unaccrued maximum of the estimated range of possible outcomes for every site for which costs can be reasonably estimated, the Company’s accrual for environmental-related activities would be $88,671 higher than the minimum accruals at December 31, 2012.

Two of the Company’s currently and formerly owned manufacturing sites account for the majority of the accrual for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at December 31, 2012. At December 31, 2012, $59,132, or 51.7 percent of the total accrual, related directly to these two sites. In the aggregate unaccrued maximum of $88,671 at December 31, 2012, $56,952, or 64.2 percent, related to the two manufacturing sites. While environmental investigations and remedial actions are in different stages at these sites, additional investigations, remedial actions and monitoring will likely be required at each site.

Management cannot presently estimate the ultimate potential loss contingencies related to these sites or other less significant sites until such time as a substantial portion of the investigation at the sites is completed and remedial action plans are developed. In the event any future loss contingency significantly exceeds the current amount accrued, the recording of the ultimate liability may result in a material impact on net income for the annual or interim period during which the additional costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its environmental-related matters will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time during which environmental investigation and remediation takes place. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

Management expects these contingent environmental-related liabilities to be resolved over an extended period of time. Management is unable to provide a more specific time frame due to the indefinite amount of time to conduct investigation activities at any site, the indefinite amount of time to obtain environmental agency approval, as necessary, with respect to investigation and remediation activities, and the indefinite amount of time necessary to conduct remediation activities.

The Asset Retirement and Environmental Obligations Topic of the ASC requires a liability to be recognized for the fair value of a conditional asset retirement obligation if a settlement date and fair value can be reasonably estimated. The Company recognizes a liability for any conditional asset retirement obligation when sufficient information is available to reasonably estimate a settlement date to determine the fair value of such a liability. The Company has identified certain conditional asset retirement obligations at various current and closed manufacturing, distribution and store facilities. These obligations relate primarily to asbestos abatement, hazardous waste Resource Conservation and Recovery Act (RCRA) closures, well abandonment, transformers and used oil disposals and underground storage tank closures. Using investigative, remediation and disposal methods that are currently available to the Company, the estimated costs of these obligations were accrued and are not significant. The recording of additional liabilities for future conditional asset retirement obligations may result in a material impact on net income for the annual or interim period during which the costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its conditional asset retirement obligations will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time over which sufficient information may become available regarding the closure or modification of any one or group of the Company’s facilities. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

NOTE 9 – LITIGATION

In the course of its business, the Company is subject to a variety of claims and lawsuits, including, but not limited to, litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to the Company. These

64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, the Company accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and the amount of any such loss cannot be reasonably estimated, any potential liability ultimately determined to be attributable to the Company may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred.

Lead pigment and lead-based paint litigation. The Company’s past operations included the manufacture and sale of lead pigments and lead-based paints. The Company, along with other companies, is and has been a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions, and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs’ claims have been based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company is also a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints that seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation. The Company has not settled any lead pigment or lead-based paint litigation. The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the

Company ultimately may not prevail. Adverse court rulings or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings. In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful.

Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations. The Company has not accrued any amounts for such litigation. With respect to such litigation, including the public nuisance litigation, the Company does not believe that it is probable that a loss has occurred, and it is not possible to estimate the range of potential losses as there is no prior history of a loss of this nature and there is no substantive information upon which an estimate could be based. In addition, any potential liability that may result from any changes to legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

Public nuisance claim litigation. The Company and other companies are or were defendants in legal proceedings seeking recovery based on public nuisance liability theories, among other theories, brought by the State of Rhode Island, the City of St. Louis, Missouri, various cities and counties in the State of New Jersey, various cities in the State of Ohio and the State of Ohio, the City of Chicago, Illinois, the City of Milwaukee, Wisconsin and the County of Santa Clara, California and other public entities in the State of California. Except for the Santa Clara County, California proceeding, all of these legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings.

The proceedings initiated by the State of Rhode Island included two jury trials. At the conclusion of the second trial, the jury returned a verdict finding that (i) the cumulative presence of lead pigment in paints and coatings on buildings in the State of Rhode Island constitutes a public nuisance, (ii) the Company, along with two other defendants, caused or substantially contributed to the creation of the public nuisance, and (iii) the Company and two other defendants should be ordered to abate the public nuisance. The Company and two other defendants appealed and, on July 1, 2008, the Rhode Island Supreme Court, among other determinations, reversed the judgment of abatement with respect to the Company and two other defendants. The Rhode Island Supreme Court’s decision reversed the public nuisance liability judgment against the Company on the basis that the complaint failed to state a public nuisance claim as a matter of law.

The Santa Clara County, California proceeding was initiated in March 2000 in the Superior Court of the State of California, County of Santa Clara. In the original complaint, the plaintiffs asserted various claims including fraud and concealment, strict product liability/failure to warn, strict product liability/design defect, negligence, negligent breach of a special duty, public nuisance, private nuisance, and violations of California’s Business and Professions Code. A number of the asserted claims were resolved in favor of the defendants through pre-trial proceedings. The named plaintiffs in the Fourth Amended Complaint, filed on March 16, 2011, are the Counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano and Ventura, and the Cities of Oakland, San Diego and San Francisco. The Fourth Amended Complaint asserts a sole claim for public nuisance, alleging that the presence of lead products for use in paint and coatings in, on and around buildings in the plaintiffs’ jurisdictions constitutes a public nuisance. The plaintiffs seek the abatement of the alleged public nuisance that exists within the plaintiffs’ jurisdictions. A trial is currently scheduled to begin in June 2013.

Litigation seeking damages from alleged personal injury. The Company and other companies are defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. These proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint, claims for damages allegedly incurred by the children’s parents or guardians, and claims for damages allegedly incurred by professional painting contractors. These proceedings generally seek compensatory and punitive damages, and seek other relief including medical monitoring costs. These

proceedings include purported claims by individuals, groups of individuals and class actions.

The plaintiff in Thomas v. Lead Industries Association, et al., initiated an action in state court against the Company, other alleged former lead pigment manufacturers and the Lead Industries Association in September 1999. The claims against the Company and the other defendants included strict liability, negligence, negligent misrepresentation and omissions, fraudulent misrepresentation and omissions, concert of action, civil conspiracy and enterprise liability. Implicit within these claims is the theory of “risk contribution” liability (Wisconsin’s theory which is similar to market share liability) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff. The case ultimately proceeded to trial and, on November 5, 2007, the jury returned a defense verdict, finding that the plaintiff had ingested white lead carbonate, but was not brain damaged or injured as a result. The plaintiff appealed and, on December 16, 2010, the Wisconsin Court of Appeals affirmed the final judgment in favor of the Company and other defendants.

Wisconsin is the only jurisdiction to date to apply a theory of liability with respect to alleged personal injury (i.e., risk contribution/market share liability) that does not require the plaintiff to identify the manufacturer of the product that allegedly injured the plaintiff in the lead pigment and lead-based paint litigation. Although the risk contribution liability theory was applied during the Thomas trial, the constitutionality of this theory as applied to the lead pigment cases has not been judicially determined by the Wisconsin state courts. However, in an unrelated action filed in the United States District Court for the Eastern District of Wisconsin, Gibson v. American Cyanamid, et al., on November 15, 2010, the District Court held that Wisconsin’s risk contribution theory as applied in that case violated the defendants’ right to substantive due process and is unconstitutionally retroactive. The District Court's decision in Gibson v. American Cyanamid, et al., has been appealed by the plaintiff.

Insurance coverage litigation. The Company and its liability insurers, including certain Underwriters at Lloyd’s of London, initiated legal proceedings against each other to primarily determine, among other things, whether the costs and liabilities associated with the abatement of lead pigment are covered under certain insurance policies issued to the Company. The Company’s action, filed on March 3, 2006 in the Common Pleas Court, Cuyahoga County, Ohio, is currently stayed and inactive.

66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

The liability insurers’ action, which was filed on February 23, 2006 in the Supreme Court of the State of New York, County of New York, has been dismissed. An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities. The Company has not recorded any assets related to these insurance policies or otherwise assumed that proceeds from these insurance policies would be received in estimating any contingent liability accrual. Therefore, an ultimate loss in the insurance coverage litigation without a determination of liability against the Company in the lead pigment or lead-based paint litigation will have no impact on the Company’s results of operation, liquidity or financial condition. As previously stated, however, the Company has not accrued any amounts for the lead pigment or lead-based paint litigation and any significant liability ultimately determined to be attributable to the Company relating to such litigation may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued.

2012 Subsequent Event - DOL Settlement. On February 20, 2013, the Company reached a settlement with the DOL of the previously disclosed investigation of transactions related to the ESOP that were implemented on August 1, 2006 and August 27, 2003. The DOL had notified the Company, certain current and former directors of the Company and the ESOP trustee of potential enforcement claims asserting breaches of fiduciary obligations. The DOL sought compensatory and equitable remedies, including monetary damages to the ESOP for alleged losses to the ESOP relating to third-party valuation of the Company's convertible serial preferred stock. The Company believes that the DOL's claims are subject to meritorious defenses, however, the Company's management and Board of Directors have decided that it would be in the best interest of the Company and its shareholders to avoid potentially costly litigation and enter into this settlement to resolve these claims.

The Company agreed to resolve all ESOP related claims with the DOL by making a one-time payment of $80,000 to the ESOP and has recorded a $49,163 after tax charge to earnings. In accordance with U.S. generally accepted accounting principles, the Company is required to recognize this subsequent event in its 2012 fiscal year results since this subsequent event is

related to conditions that existed at the balance sheet date of December 31, 2012. The Company's financial results for the quarter and year ended December 31, 2012, which were set forth in the Company's earnings release issued on January 31, 2013 and furnished on the Company's Current Report on Form 8-K dated January 31, 2013, have been revised and furnished on the Company's Current Report on Form 8-K dated February 20,2013 to reflect this subsequent event. As a result of recording this accrual in the Administrative segment, Cost of goods sold increased $16,000 and Selling, general and administrative expense increased $64,000 while income tax expense decreased $30,837 and diluted net income per common share decreased $.47 per share for both the quarter and year ended December 31, 2012.

NOTE 10 – CAPITAL STOCK

At December 31, 2012, there were 300,000,000 shares of common stock and 30,000,000 shares of serial preferred stock authorized for issuance. Of the authorized serial preferred stock, 3,000,000 shares are designated as cumulative redeemable serial preferred and 1,000,000 shares are designated as convertible serial preferred stock. See Note 11. Effective April 21, 2010, the 2006 Equity and Performance Incentive Plan (2006 Employee Plan) was amended and restated to increase the number of common shares that may be issued or transferred by 9,200,000 shares to 19,200,000 shares. See Note 12. An aggregate of 13,558,565, 18,013,429 and 19,835,391 shares of common stock at December 31, 2012, 2011 and 2010, respectively, were reserved for future grants of restricted stock and the exercise and future grants of option rights. See Note 12. Common shares outstanding shown in the following table included 484,872, 475,628 and 475,628 shares of common stock held in a revocable trust at December 31, 2012, 2011 and 2010, respectively. The revocable trust is used to accumulate assets for the purpose of funding the ultimate obligation of certain non-qualified benefit plans. Transactions between the Company and the trust are accounted for in accordance with the Deferred Compensation – Rabbi Trusts Subtopic of the Compensation Topic of the ASC, which requires the assets held by the trust be consolidated with the Company’s accounts. Effective March 31, 2011, the company retired 125,425,977 common shares held in treasury, which resulted in decreases in Treasury stock, common stock and retained earnings.

67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

	Common Shares in Treasury		Common Shares Outstanding
Balance at January 1, 2010	119,209,669		109,436,869
Shares tendered as payment for option rights exercised	15,752		(15,752	)
Shares issued for exercise of option rights			2,436,639
Shares tendered in connection with grants of restricted stock	99,441		(99,441	)
Net shares issued for grants of restricted stock			262,413
Treasury stock purchased	5,000,000		(5,000,000	)
Balance at December 31, 2010	124,324,862		107,020,728
Shares tendered as payment for option rights exercised	2,274		(2,274	)
Shares issued for exercise of option rights			1,480,058
Net shares issued for grants of restricted stock			55,722
Treasury stock purchased	4,700,000		(4,700,000	)
Treasury stock retired	(125,425,977	)
Balance at December 31, 2011	3,601,159		103,854,234
Shares tendered as payment for option rights exercised	7,766		(7,766	)
Shares issued for exercise of option rights			4,140,822
Shares tendered in connection with grants of restricted stock	143,979		(143,979	)
Net shares issued for grants of restricted stock			26,756
Treasury stock purchased	4,600,000		(4,600,000	)
Balance at December 31, 2012	8,352,904		103,270,067

NOTE 11 – STOCK PURCHASE PLAN AND PREFERRED STOCK

As of December 31, 2012, 28,256 employees contributed to the Company’s ESOP, a voluntary defined contribution plan available to all eligible salaried employees. Participants are allowed to contribute, on a pretax or after-tax basis, up to the lesser of twenty percent of their annual compensation or the maximum dollar amount allowed under the Internal Revenue Code. Prior to July 1, 2009, the Company matched one hundred percent of all contributions up to six percent of eligible employee contributions. Effective July 1, 2009, the ESOP was amended to change the Company match to one hundred percent on the first three percent of eligible employee contributions and fifty percent on the next two percent of eligible contributions. Effective July 1, 2011, the ESOP was amended to reinstate the Company match up to six percent of eligible employee contributions. Such participant contributions may be invested in a variety of investment funds or a Company common stock fund and may be exchanged between investments as directed by the participant. Participants are permitted to diversify both future and prior Company matching contributions previously allocated to the Company common stock fund into a variety of investment funds.

The Company made contributions to the ESOP on behalf of participating employees, representing amounts authorized by employees to be withheld from their earnings, of $88,363, $79,266 and $70,601 in 2012, 2011 and 2010, respectively. The Company’s matching contributions to the ESOP charged to operations were $142,791, $48,816 and $37,894 for 2012, 2011 and 2010, respectively. The 2012 Company contributions include $80,000 related to the DOL Settlement. See Note 9 for

additional information on the DOL Settlement.

At December 31, 2012, there were 14,616,378 shares of the Company’s common stock being held by the ESOP, representing 14.2 percent of the total number of voting shares outstanding. Shares of Company common stock credited to each member’s account under the ESOP are voted by the trustee under instructions from each individual plan member. Shares for which no instructions are received are voted by the trustee in the same proportion as those for which instructions are received.

On August 1, 2006, the Company issued 500,000 shares of convertible serial preferred stock, no par value (Series 2 Preferred stock) with cumulative quarterly dividends of $11.25 per share, for $500,000 to the ESOP. The ESOP financed the acquisition of the Series 2 Preferred stock by borrowing $500,000 from the Company at the rate of 5.5 percent per annum. This borrowing is payable over ten years in equal quarterly installments. Each share of Series 2 Preferred stock is entitled to one vote upon all matters presented to the Company’s shareholders and generally votes with the common stock together as one class. The Series 2 Preferred stock is held by the ESOP in an unallocated account. As the value of compensation expense related to contributions to the ESOP is earned, the Company has the option of funding the ESOP by redeeming a portion of the preferred stock or with cash. Contributions are credited to the members’ accounts at the time of funding. The Series 2 Preferred stock is redeemable for cash or convertible into common stock or any combination thereof at the option of the ESOP based on the relative fair value of the Series 2 Preferred and common stock at the time of conversion. At December 31, 2012, 2011 and 2010, there were no allocated or committed-to-be released shares of Series 2 Preferred stock outstanding. In 2012, the Company redeemed 59,187 shares of the Series 2 Preferred stock for cash.

68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

In 2011, the Company redeemed 56,480 shares of the Series 2 Preferred stock for cash. In 2010, the Company elected to fund the ESOP with cash. The fair value of the Series 2 Preferred stock is based on a conversion/redemption formula outlined in the preferred stock terms and was $210,773, $328,495 and $411,655 at December 31, 2012, 2011, and 2010 respectively.

NOTE 12 – STOCK-BASED COMPENSATION

Effective April 19, 2006, the shareholders approved the 2006 Employee Plan, replacing the 2003 Stock Plan and authorizing the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 10,000,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or cancelled. Effective April 21, 2010, the 2006 Employee Plan was amended and restated to increase the number of shares that may be issued or transferred by 9,200,000 shares to 19,200,000 shares. The 2006 Employee Plan permits the granting of option rights, appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible employees. At December 31, 2012, no appreciation rights, restricted stock units, performance shares or performance units had been granted under the 2006 Employee Plan. No further grants may be made under the 2003 Stock Plan, all rights granted under that plan remain.

Effective April 19, 2006, the shareholders also approved the 2006 Stock Plan for Nonemployee Directors (Nonemployee Director Plan), replacing the 1997 Stock Plan for Nonemployee Directors and authorizing the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 200,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or are cancelled. The Nonemployee Director Plan permits the granting of option rights, appreciation rights, restricted stock and restricted stock units to members of the Board of Directors who are not employees of the Company. At December 31, 2012, no option rights, appreciation rights or restricted stock units had been granted under the Nonemployee Director Plan. No further grants may be made under the 1997 Stock Plan, all rights granted under that plan remain.

The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. The tax benefits associated with these share-based payments are classified as financing activities in the Statements of Consolidated Cash Flows.

At December 31, 2012, the Company had total unrecognized stock-based compensation expense of $68,558 that is expected to be recognized over a weighted-average period of 1.30 years. Stock-based compensation expense during 2012, 2011 and 2010 was $54,348, $48,176 and $42,276, respectively. The Company recognized a total income tax benefit related to stock-based compensation expense of $20,948, $18,570 and $16,290 during 2012, 2011 and 2010, respectively. The impact of total stock-based compensation expense, net of taxes, on net income reduced Basic and Diluted net income per common share by $.33 and $.32 during 2012, respectively.

Option rights. The fair value of the Company’s option rights was estimated at the date of grant using a Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for all options granted:

	2012	2011	2010
Risk-free interest rate	.78%	1.13%	1.16%
Expected life of option rights	5.11 years	5.27 years	5.27 years
Expected dividend yield of stock	1.43%	1.77%	1.84%
Expected volatility of stock	.274	.303	.304

The risk-free interest rate is based upon the U.S. Treasury yield curve at the time of grant. The expected life of option rights was calculated using a scenario analysis model. Historical data was used to aggregate the holding period from actual exercises, post-vesting cancellations and hypothetical assumed exercises on all outstanding option rights. The expected dividend yield of stock is the Company’s best estimate of the expected future dividend yield. Expected volatility of stock was calculated using historical and implied volatilities. The Company applied an estimated forfeiture rate of 2.60 percent to the 2012 grants. This rate was calculated based upon historical activity and is an estimate of granted shares not expected to vest. If actual forfeitures differ from the expected rate, the Company may be required to make additional adjustments to compensation expense in future periods.

Grants of option rights for non-qualified and incentive stock options have been awarded to certain officers, key employees and nonemployee directors under the 2006 Employee Plan, the 2003 Stock Plan, and the 1997 Plan. The option rights generally become exercisable to the extent of one-third of the optioned shares for each full year following the date of grant and generally expire ten years after the date of grant. Unrecognized compensation expense with respect to option rights granted to eligible employees amounted to $37,974 at December 31, 2012. The unrecognized compensation expense is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted average period of 1.36 years.

The weighted-average per share grant date fair value of options granted during 2012, 2011 and 2010, respectively, was $32.74, $18.47 and $16.83. The total intrinsic value of exercised option rights for employees was $298,883, $53,100 and $74,440, and for nonemployee directors was $1,412, $1,129 and $626 during 2012, 2011 and 2010, respectively. The total fair value of options vested during the year was $25,879, $25,868 and

69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

$25,073 during 2012, 2011 and 2010, respectively. The outstanding option rights for nonemployee directors were 3,500, 17,500 and 37,500 for 2012, 2011 and 2010, respectively. The Company issues new shares upon exercise of option rights or granting of restricted stock.

A summary of the Company’s non-qualified and incentive stock option right activity for employees and nonemployee directors, and related information for the years ended December 31 is shown in the following table:

	2012						2011						2010
	Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding beginning of year	9,857,695		$	60.31			10,009,385		$	55.82			10,897,652		$	50.30
Granted	1,089,240		152.93				1,407,259		78.72				1,586,984		72.48
Exercised	(4,140,822	)	53.40				(1,480,058	)	47.15				(2,436,639	)	41.95
Forfeited	(57,730	)	78.01				(76,354	)	67.02				(34,999	)	58.90
Expired	(257	)	72.65				(2,537	)	53.65				(3,613	)	54.71
Outstanding end of year	6,748,126		$	79.39	$	494,699	9,857,695		$	60.31	$	287,526	10,009,385		$	55.82	$	281,349
Exercisable at end of year	4,245,891		$	61.43	$	386,484	6,908,116		$	54.24	$	243,440	6,655,569		$	50.78	$	220,647

The weighted average remaining term for options outstanding at the end of 2012, 2011 and 2010, respectively, was 6.99, 6.54 and 6.76 years. The weighted average remaining term for options exercisable at the end of 2012, 2011 and 2010, respectively, was 5.79, 5.39 and 5.58 years. Shares reserved for future grants of option rights and restricted stock were 6,810,439, 8,155,734 and 9,826,006 at December 31, 2012, 2011 and 2010, respectively.

Restricted stock. Grants of restricted stock, which generally require three years of continuous employment from the date of grant before vesting and receiving the stock without restriction, have been awarded to certain officers and key employees under the 2006 Employee Plan. Prior to 2010, all awards were performance-based, and the shares of stock to be received without restriction under these plans were based on the Company’s achievement of specified financial goals relating to average return on average equity and earnings before interest, taxes, depreciation and amortization. The February 2012, 2011 and 2010 grants consisted of approximately two-thirds performance-based awards that vest at the end of a three year period based on the Company’s achievement of specified financial goals relating to average return on average equity and earnings per share (for the February 2010 grant) and earnings per share (for the February 2011 and 2012 grants) and one-third time-based awards that vest at the end of a three year period based on continuous employment. Unrecognized compensation expense with respect to grants of restricted stock to eligible employees amounted to $29,286 at December 31, 2012 and is being amortized on a straight-line basis over the vesting period and is expected to be recognized over a weighted average period of 1.12 years.

Grants of restricted stock have been awarded to nonemployee directors under the Nonemployee Plan and the 1997 Plan. These grants generally vest and stock is received without restriction to the extent of one-third of the granted stock for each year following the date of grant. Unrecognized

compensation expense with respect to grants of restricted stock to nonemployee directors amounted to $1,298 at December 31, 2012 and is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted average period of 1.43 years.

A summary of grants of restricted stock to certain officers, key employees and nonemployee directors during each year is as follows:

	2012		2011		2010
Restricted stock granted	301,856		300,677		348,460
Weighted-average per share fair value of restricted stock granted during the year	$	99.47	$	84.86	$	64.49

A summary of the Company’s restricted stock activity for the years ended December 31 is shown in the following table:

	2012		2011		2010
Outstanding at beginning of year	1,304,891		1,266,201		1,304,386
Granted	301,856		300,677		348,460
Vested	(412,859	)	(16,072	)	(300,598	)
Forfeited	(274,140	)	(245,915	)	(86,047	)
Outstanding at end of year	919,748		1,304,891		1,266,201

70

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

NOTE 13 – OTHER

Other general expense - net. Included in Other general expense - net were the following:

	2012			2011			2010
Provisions for environmental matters - net	$	6,736		$	9,100		$	7,089
Loss (gain) on disposition of assets	3,454			(5,469		)	2,720
Net income of exit or disposal activities	(4,942		)	(900		)	(6,006		)
Total	$	5,248		$	2,731		$	3,803

Provisions for environmental matters–net represent initial provisions for site-specific estimated costs of environmental investigation or remediation and increases or decreases to environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Environmental-related accruals are not recorded net of insurance proceeds in accordance with the Offsetting Subtopic of the Balance Sheet Topic of the ASC. See Note 8 for further details on the Company’s environmental-related activities.

The loss (gain) on disposition of assets represents net realized gains and losses associated with the disposal of property, plant and equipment and intangible assets previously used in the conduct of the primary business of the Company.

The net income of exit or disposal activities includes changes to accrued qualified exit costs as information becomes available upon which more accurate amounts can be reasonably estimated, initial impairments of carrying value and additional impairments for subsequent reductions in estimated fair value of property, plant and equipment held for disposal. See Note 5 for further details on the Company’s exit or disposal activities. 

Other income - net. Included in Other income - net were the following:

	2012			2011			2010
Dividend and royalty income	$	(4,666	)	$	(4,963	)	$	(3,857	)
Net expense from financing activities	9,220			8,023			9,256
Foreign currency transaction related (gains) losses	(3,071		)	4,748			22
Other income	(21,074		)	(22,167		)	(14,059		)
Other expense	9,651			9,550			7,857
Total	$	(9,940	)	$	(4,809	)	$	(781	)

The Net expense from financing activities includes the net expense relating to changes in the Company’s financing fees.

Foreign currency transaction related (gains) losses represent net realized (gains) losses on U.S. dollar-denominated liabilities of foreign subsidiaries and net realized and unrealized (gains) losses from foreign currency option and forward contracts. There were no foreign currency option and forward contracts outstanding at December 31, 2012, 2011 and 2010.

Other income and Other expense included items of revenue, gains, expenses and losses that were unrelated to the primary business purpose of the Company. There were no items within Other income or Other expense that were individually significant.

NOTE 14 – INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using the enacted tax rates and laws that are currently in effect. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2012, 2011 and 2010 were as follows:

	2012		2011		2010
Deferred tax assets:
Exit costs, environ-mental and other similar items	$	45,403	$	53,928	$	64,773
Deferred employee benefit items	93,039		74,577		57,810
Other items (each less than 5 percent of total assets)	73,388		83,192		79,014
Total deferred tax assets	$	211,830	$	211,697	$	201,597
Deferred tax liabilities:
Depreciation and amortization	$	202,891	$	192,035	$	165,917

Netted against the Company’s other deferred tax assets were valuation reserves of $11,474, $8,017 and $17,756 at December 31, 2012, 2011 and 2010, respectively, resulting from the uncertainty as to the realization of the tax benefits from certain foreign net operating losses and certain other foreign assets. The Company has $8,650 of domestic net operating loss carryforwards acquired through acquisitions that have expiration dates through the tax year 2030 and foreign net operating losses of $47,412. The foreign net operating losses are related to various jurisdictions that provide for either indefinite carryforward periods or carryforward periods with various expiration periods.

Significant components of the provisions for income taxes were as follows:

	2012			2011			2010
Current:
Federal	$	207,791		$	204,284		$	127,498
Foreign	51,264			50,272			50,765
State and local	27,642			28,219			16,966
Total current	286,697			282,775			195,229
Deferred:
Federal	8,692			20,713			27,903
Foreign	(16,964		)	(3,922		)	(7,145		)
State and local	(2,150		)	122			(688		)
Total deferred	(10,422		)	16,913			20,070
Total provisions for income taxes	$	276,275		$	299,688		$	215,299

71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

The provisions for income taxes included estimated taxes payable on that portion of retained earnings of foreign subsidiaries expected to be received by the Company. The effect of the repatriation provisions of the American Jobs Creation Act of 2004 and the provisions of the Income Taxes Topic of the ASC, was $7,572 in 2012, $(491) in 2011 and $1,885 in 2010. A provision was not made with respect to $19,274 of retained earnings at December 31, 2012 that have been invested by foreign subsidiaries. The unrecognized deferred tax liability related to those earnings is approximately $1.0 million.

Significant components of income before income taxes as used for income tax purposes, were as follows:

	2012		2011		2010
Domestic	$	712,873	$	560,395	$	539,120
Foreign	194,436		181,153		138,664
	$	907,309	$	741,548	$	677,784

A reconciliation of the statutory federal income tax rate to the effective tax rate follows:

	2012		2011		2010
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Effect of:
State and local income taxes	1.8		2.1		1.6
Investment vehicles	(2.1	)	(1.9	)	(1.6	)
ESOP IRS audit settlement			10.1
Domestic production activities	(1.9	)	(2.4	)	(2.5	)
Other - net	(2.4	)	(2.5	)	(0.7	)
Effective tax rate	30.4	%	40.4	%	31.8	%

The 2012 state and local income tax and investment vehicles components of the effective tax rate were consistent with the 2011 tax year. The domestic production activities component of the effective tax rate decreased compared to 2011 due to the domestic taxable income limitation as set forth in the Internal Revenue Code. During the fourth quarter of 2011, the Company reached a settlement with the Internal Revenue Service (IRS) that resolved all ESOP related tax issues for the 2003 through 2009 tax years. The settlement negatively impacted the effective tax rate for 2011.

On January 2, 2013, the American Taxpayer Relief Act (ATRA) was enacted which retroactively reinstated and extended the Federal Research and Development Tax Credit from January 1, 2012 to December 31, 2013. As a result, the Company expects to recognize an immaterial discrete tax benefit during the first quarter of 2013. The other provisions of the Act will have a negligible impact on the Company's effective tax rate in 2013.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign

jurisdictions. The IRS commenced an examination of the Company's U.S. income tax returns for the 2008 and 2009 tax years in the third quarter of 2011. Fieldwork is expected to be completed during 2013. At this time, the Company has determined that an insignificant refund is due for issues under review during this audit period. The Company has fully resolved all IRS issues for the 2003 through 2009 tax years relating to the matters challenging the ESOP related federal income tax deductions claimed by the Company. With the exception of $2.0 million of interest related to the 2008 tax year, all ESOP related settlement payments have been made to the IRS.

As of December 31, 2012, the Company is subject to non-U.S. income tax examinations for the tax years of 2005 through 2012. In addition, the Company is subject to state and local income tax examinations for the tax years 2002 through 2012.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2012			2011			2010
Balance at beginning of year	$	29,666		$	31,268		$	36,963
Additions based on tax positions related to the current year	3,760			2,807			3,109
Additions for tax positions of prior years	7,392			1,354			1,841
Reductions for tax positions of prior years	(6,583		)	(3,339		)	(9,123		)
Settlements	(1,139		)	(1,089		)	(55		)
Lapses of Statutes of Limitations	(4,977		)	(1,335		)	(1,467		)
Balance at end of year	$	28,119		$	29,666		$	31,268

Included in the balance of unrecognized tax benefits at December 31, 2012, 2011 and 2010 is $25,011, $25,569 and $27,428 in unrecognized tax benefits, the recognition of which would have an effect on the effective tax rate.

Included in the balance of unrecognized tax benefits at December 31, 2012 is $6,981 related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. This amount represents a decrease in unrecognized tax benefits comprised primarily of items related to federal audits of partnership investments, assessed state income tax audits, state settlement negotiations currently in progress and expiring statutes in federal, foreign and state jurisdictions.

The Company classifies all income tax related interest and penalties as income tax expense. During the years ended December 31, 2012, 2011 and 2010, the Company recognized a release of $1,532, $1,163 and $1,544, respectively, in income tax interest and penalties. At December 31, 2012, 2011 and 2010, the Company has accrued $6,178, $8,095 and $10,197, respectively, for the potential payment of interest and penalties.

72

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

NOTE 15 – NET INCOME PER COMMON SHARE

	2012			2011			2010
Basic
Average common shares outstanding	101,714,901			103,471,323			107,021,624
Net income	$	631,034		$	441,860		$	462,485
Less net income allocated to unvested restricted shares	(5,114		)	(4,825		)	(4,817		)
Net income allocated to common shares	$	625,920		$	437,035		$	457,668
Net income per common share	$	6.15		$	4.22		$	4.28
Diluted
Average common shares outstanding	101,714,901			103,471,323			107,021,624
Stock options and other contingently issuable shares (a)	2,215,528			2,200,650			1,763,893
Average common shares outstanding assuming dilution	103,930,429			105,671,973			108,785,517
Net income	$	631,034		$	441,860		$	462,485
Less net income allocated to unvested restricted shares assuming dilution	(5,008		)	(4,756		)	(4,749		)
Net income allocated to common shares assuming dilution	$	626,026		$	437,104		$	457,736
Net income per common share	$	6.02		$	4.14		$	4.21

(a) Stock options and other contingently issuable shares excludes 1,047,734, 101,260 and 1,544,620 shares at December 31, 2012, 2011 and 2010, respectively, due to their anti-dilutive effect.

The Company has two classes of participating securities: common shares and restricted shares, representing 99% and 1% of outstanding shares, respectively. The restricted shares are shares of unvested restricted stock granted under the Company’s restricted stock award program. Unvested restricted shares granted prior to April 21, 2010 received non-forfeitable dividends. Accordingly, the shares are considered a participating security and the two-class method of calculating basic and diluted earnings per share is required. Effective April 21, 2010, the restricted stock award program was revised and dividends on performance-based restricted shares granted after this date are deferred and payment is contingent upon the awards vesting. Only the time-based restricted shares, which continue to receive non-forfeitable dividends, are considered a participating security. Basic and diluted earnings per share are calculated using the two-class method in accordance with the Earnings Per Share Topic of the ASC.

NOTE 16 – SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

	2012
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	2,136,344	$	2,573,022	$	2,603,226	$	2,221,870	$	9,534,462
Gross profit	909,839		1,150,597		1,150,282		995,508		4,206,226
Net income	100,216		227,813		234,953		68,052		631,034
Net income per common share - basic	.97		2.23		2.29		0.66		6.15
Net income per common share - diluted	.95		2.17		2.24		0.65		6.02

Net income in the fourth quarter was decreased by $49,163 ($.47 per share) due to the DOL Settlement (see Note 9) and increased by inventory adjustments and adjustments to compensation and benefit expenses. Gross profit increased by $28,724 ($.17 per share), primarily as a result of adjustments of $29,488 based on an annual physical inventory count performed during the fourth quarter, year-end inventory levels and related cost adjustments. Selling, general and administrative expenses decreased $5,645 ($.03 per share) related to compensation and benefit expense adjustments.

	2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	1,855,586	$	2,354,751	$	2,484,920	$	2,070,442	$	8,765,699
Gross profit	797,408		1,022,755		1,038,299		886,100		3,744,562
Net income	68,316		179,115		179,877		14,552		441,860
Net income per common share - basic	.64		1.69		1.74		.14		4.22
Net income per common share - diluted	.63		1.66		1.71		.14		4.14

Net income in the fourth quarter was decreased by $74,982 ($.71 per share) due to the settlement of the IRS' audit of the Company's ESOP. Net income in the fourth quarter was increased by physical inventory adjustments and adjustments to compensation and benefit expenses. Gross profit increased by $25,123 ($.15 per share), primarily as a result of physical inventory adjustments of $23,394 based on an annual physical inventory count performed during the fourth quarter, year-end inventory levels and related costs.

73

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

NOTE 17 – OPERATING LEASES

The Company leases certain stores, warehouses, manufacturing facilities, office space and equipment. Renewal options are available on the majority of leases and, under certain conditions, options exist to purchase certain properties. Rental expense for operating leases, recognized on a straight-line basis over the lease term in accordance with the Leases Topic of the ASC was $310,109, $292,516 and $282,309 for 2012, 2011 and 2010, respectively. Certain store leases require the payment of contingent rentals based on sales in excess of specified minimums. Contingent rentals included in rent expense were $39,340, $36,917 and $37,602 in 2012, 2011 and 2010, respectively. Rental income, as lessor, from real estate leasing activities and sublease rental income for all years presented was not significant. The following schedule summarizes the future minimum lease payments under noncancellable operating leases having initial or remaining terms in excess of one year at December 31, 2012:

2013	$	242,360
2014	226,975
2015	192,117
2016	151,654
2017	103,573
Later years	191,844
Total minimum lease payments	$	1,108,523

NOTE 18 – REPORTABLE SEGMENT INFORMATION

The Company reports its segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding allocation of resources in accordance with the Segment Reporting Topic of the ASC. The Company has determined that it has four reportable operating segments: Paint Stores Group, Consumer Group, Global Finishes Group and Latin America Coatings Group (individually, a "Reportable Segment" and collectively, the “Reportable Segments”). Factors considered in determining the four Reportable Segments of the Company include the nature of business activities, the management structure directly accountable to the Company’s chief operating decision maker (CODM) for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors. The Company reports all other business activities and immaterial operating segments that are not reportable in the Administrative segment. See pages 6 through 15 of this report for more information about the Reportable Segments.

The Company’s CODM has been identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Because of the diverse operations of the Company, the CODM regularly receives discrete financial information about each Reportable Segment as well as a significant amount of

additional financial information about certain divisions, business units or subsidiaries of the Company. The CODM uses all such financial information for performance assessment and resource allocation decisions. The CODM evaluates the performance of and allocates resources to the Reportable Segments based on profit or loss before income taxes and cash generated from operations. The accounting policies of the Reportable Segments are the same as those described in Note 1 of this report.

The Paint Stores Group consisted of 3,520 company-operated specialty paint stores in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten, Jamaica, Curacao and Aruba at December 31, 2012. Each store in this segment is engaged in the related business activity of selling paint, coatings and related products to end-use customers. The Paint Stores Group markets and sells Sherwin-Williams^® branded architectural paint and coatings, protective and marine products, OEM product finishes and related items. These products are produced by manufacturing facilities in the Consumer Group. In addition, each store sells selected purchased associated products. The loss of any single customer would not have a material adverse effect on the business of this segment. During 2012, this segment opened 70 net new stores, consisting of 81 new stores opened (63 in the United States, 14 in Canada, 1 in Puerto Rico and 3 in Trinidad) and 11 stores closed in the United States. In 2011 and 2010, this segment opened 60 and 36 net new stores, respectively. A map on the cover flap of this report shows the number of paint stores and their geographic location. The CODM uses discrete financial information about the Paint Stores Group, supplemented with information by geographic region, product type and customer type, to assess performance of and allocate resources to the Paint Stores Group as a whole. In accordance with ASC 280-10-50-9, the Paint Stores Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Consumer Group develops, manufactures and distributes a variety of paint, coatings and related products to third party customers primarily in the United States and Canada and the Paint Stores Group. Approximately 64 percent of the total sales of the Consumer Group in 2012 were intersegment transfers of products primarily sold through the Paint Stores Group. Sales and marketing of certain controlled brand and private labeled products is performed by a direct sales staff. The products distributed through third party customers are intended for resale to the ultimate end-user of the product. The Consumer Group had sales to certain customers that, individually, may be a significant portion of the sales of the segment. However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment. This segment incurred most of the Company’s capital expenditures related to ongoing

74

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

environmental compliance measures. The CODM uses discrete financial information about the Consumer Group, supplemented with information by product types and customer, to assess performance of and allocate resources to the Consumer Group as a whole. In accordance with ASC 280-10-50-9, the Consumer Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Global Finishes Group develops, licenses, manufactures, distributes and sells a variety of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products in North and South America, Europe and Asia. This segment meets the demands of its customers for a consistent worldwide product development, manufacturing and distribution presence and approach to doing business. This segment licenses certain technology and trade names worldwide. Sherwin-Williams^® and other controlled brand products are distributed through the Paint Stores Group and this segment’s 302 company-operated branches and by a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third party distributors. During 2012, this segment opened 1 new branch in the United States and closed 2 in the United States for a net decrease of 1 branch. At December 31, 2012, the Global Finishes Group consisted of operations in the United States, subsidiaries in 34 foreign countries and income from licensing agreements in 16 foreign countries. The CODM uses discrete financial information about the Global Finishes Group reportable segment, supplemented with information about geographic divisions, business units, and subsidiaries, to assess performance of and allocate resources to the Global Finishes Group as a whole. In accordance with ASC 280-10-50-9, the Global Finishes Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover flap of this report shows the number of branches and their geographic locations.

The Latin America Coatings Group develops, licenses, manufactures, distributes and sells a variety of architectural paint and coatings, protective and marine products, OEM product finishes and related products in North and South America. This segment meets the demands of its customers for consistent regional product development, manufacturing and distribution presence and approach to doing business. Sherwin-Williams^® and other controlled brand products are distributed through this segment’s 276 company-operated stores and by a direct sales staff and outside sales representatives to retailers, dealers, licensees and other third party distributors. During 2012, this segment opened 17 new stores (9 in South America and 8 in Mexico) and closed 6 in South America for a net increase of 11 stores. At December 31, 2012, the Latin America Coatings Group consisted of operations from subsidiaries in 9 foreign countries, 4 foreign joint ventures and income from licensing agreements in 10 foreign countries. The CODM uses discrete financial information about the Latin America Coatings Group, supplemented with information about geographic divisions, business units, and subsidiaries, to assess performance of and allocate resources to the Latin America Coatings Group as a whole. In accordance with ASC 280-10-50-9, the Latin America Coatings Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover

flap of this report shows the number of stores and their geographic locations.

The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site. Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses which were not directly associated with the Reportable Segments. The Administrative segment did not include any significant foreign operations. Also included in the Administrative segment was a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities. Sales of this segment represented external leasing revenue of excess headquarters space or leasing of facilities no longer used by the Company in its primary businesses. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment.

Net external sales of all consolidated foreign subsidiaries were $2,049,814, $1,982,859 and $1,468,116 for 2012, 2011 and 2010, respectively. Segment profit of all consolidated foreign subsidiaries was $158,377, $122,436 and $86,951 for 2012, 2011 and 2010, respectively. Domestic operations accounted for the remaining net external sales and segment profits. Long-lived assets consisted of Property, plant and equipment, Goodwill, Intangible assets, Deferred pension assets and Other assets. The aggregate total of long-lived assets for the Company was $3,085,499, $2,967,660 and, $2,955,513 at December 31, 2012, 2011 and 2010, respectively. Long-lived assets of consolidated foreign subsidiaries totaled $718,409, $650,681 and $664,547 at December 31, 2012, 2011 and 2010, respectively. Total Assets of the Company were $6,234,737, $5,229,252 and $5,169,235 at December 31, 2012, 2011 and 2010, respectively. Total assets of consolidated foreign subsidiaries were $1,598,996, $1,443,034 and $1,467,969, which represented 25.6 percent, 27.6 percent and 28.4 percent of the Company’s total assets at December 31, 2012, 2011 and 2010, respectively. No single geographic area outside the United States was significant relative to consolidated net sales or operating profits. Export sales and sales to any individual

75

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(thousands of dollars unless otherwise indicated)

customer were each less than 10 percent of consolidated sales to unaffiliated customers during all years presented.

In the reportable segment financial information that follows, Segment profit was total net sales and intersegment transfers less operating costs and expenses. Identifiable assets were those directly identified with each reportable segment. The Administrative segment assets consisted primarily of cash and

cash equivalents, investments, deferred pension assets, and headquarters property, plant and equipment. The margin for each reportable segment was based upon total net sales and intersegment transfers. Domestic intersegment transfers were accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs. International intersegment transfers were accounted for at values comparable to normal unaffiliated customer sales.

(millions of dollars)	2012
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	5,410		$	1,322			$	1,961		$	836		$	5			$	9,534
Intersegment transfers				2,320				7			47			(2,374		)
Total net sales and intersegment transfers	$	5,410		$	3,642			$	1,968		$	883		$	(2,369	)		$	9,534
Segment profit	$	862		$	217		(1)	$	147		$	81						$	1,307
Interest expense														$	(43	)		(43		)
Administrative expenses and other														(357		)	(2)	(357		)
Income before income taxes	$	862		$	217			$	147		$	81		$	(400	)		$	907
Reportable segment margins	15.9		%	6.0		%		7.5		%	9.2		%
Identifiable assets	$	1,374		$	1,701			$	987		$	485		$	1,688			$	6,235
Capital expenditures	67			47				14			9			20				157
Depreciation	49			43				30			10			20				152
	2011
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	4,780		$	1,274			$	1,878		$	828		$	6			$	8,766
Intersegment transfers				2,091				9			39			(2,139		)
Total net sales and intersegment transfers	$	4,780		$	3,365			$	1,887		$	867		$	(2,133	)		$	8,766
Segment profit	$	646		$	174		(1)	$	90		$	75						$	985
Interest expense														$	(42	)		(42		)
Administrative expenses and other														(201		)		(201		)
Income before income taxes	$	646		$	174			$	90		$	75		$	(243	)		$	742
Reportable segment margins	13.5		%	5.2		%		4.8		%	8.7		%
Identifiable assets	$	1,309		$	1,682			$	939		$	469		$	830			$	5,229
Capital expenditures	50			35				14			14			41				154
Depreciation	48			43				31			11			18				151
	2010
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	4,381		$	1,298			$	1,417		$	675		$	5			$	7,776
Intersegment transfers				1,770				4			34			(1,808		)
Total net sales and intersegment transfers	$	4,381		$	3,068			$	1,421		$	709		$	(1,803	)		$	7,776
Segment profit	$	620		$	204		(1)	$	65		$	59						$	948
Interest expense														$	(71	)		(71		)
Administrative expenses and other														(199		)		(199		)
Income before income taxes	$	620		$	204			$	65		$	59		$	(270	)		$	678
Reportable segment margins	14.2		%	6.6		%		4.6		%	8.3		%
Identifiable assets	$	1,238		$	1,603			$	1,089		$	437		$	802			$	5,169
Capital expenditures	51			25				26			12			11				125
Depreciation	47			39				28			10			16				140

(1) Segment profit included $27, $24 and $22 of mark-up on intersegment transfers realized primarily as a result of external sales by the Paint Stores Group during 2012, 2011 and 2010, respectively.

(2) Includes $80 pre-tax charge related to DOL Settlement. See Note 9.

76

CAUTIONARY STATEMENT REGARDING

FORWARD-LOOKING INFORMATION

Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Letter to Shareholders” 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 current expectations, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future business plans and the costs and potential liability for environmental-related matters and the lead pigment and lead-based paint litigation. Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “expects,” “anticipates,” “believes,” “will,” “will likely result,” “will continue,” “plans to” and similar expressions.

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 and from the Company’s historical results and experience. These risks, uncertainties and other factors include such things as: (a) the duration and severity of the current negative global economic and financial conditions; (b) general business conditions, strengths of retail and manufacturing economies and the growth in the coatings industry; (c) competitive factors, including pricing pressures and product innovation and quality; (d) changes in raw material and energy supplies and pricing; (e) changes in the Company’s relationships with customers and suppliers; (f) the Company’s ability to attain cost savings from productivity initiatives; (g) the Company’s ability to successfully integrate past and future acquisitions into its existing operations, including the planned acquisition of Comex and the recent acquisitions of Leighs Paints, Geocel and Jiangsu

Pulanna, as well as the performance of the businesses acquired; (h) risks and uncertainties associated with the Company’s ownership of Life Shield Engineered Systems LLC; (i) changes in general domestic economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions, and changing government policies, laws and regulations; (j) risks and uncertainties associated with the Company’s expansion into and its operations in Asia, Europe, Mexico, South America and other foreign markets, including general economic conditions, inflation rates, recessions, foreign currency exchange rates, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest and other external economic and political factors; (k) the achievement of growth in foreign markets, such as Asia, Europe, Mexico and South America; (l) increasingly stringent domestic and foreign governmental regulations including those affecting health, safety and the environment; (m) inherent uncertainties involved in assessing the Company’s potential liability for environmental-related activities; (n) other changes in governmental policies, laws and regulations, including changes in accounting policies and standards and taxation requirements (such as new tax laws and new or revised tax law interpretations); (o) the nature, cost, quantity and outcome of pending and future litigation and other claims, including the lead pigment and lead-based paint litigation, and the effect of any legislation and administrative regulations relating thereto; and (p) unusual weather conditions.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered to be a complete list. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

77

SHAREHOLDER INFORMATION

Annual Meeting The annual meeting of shareholders will be held in the Landmark Conference Center, 927 Midland Building, 101 W. Prospect Avenue, Cleveland, Ohio on Wednesday, April 17, 2013 at 9:00 A.M., local time. Headquarters 101 W. Prospect Avenue
Cleveland, Ohio 44115-1075
(216) 566-2000
www.sherwin.com Investor Relations Robert J. Wells
Senior Vice President - Corporate Communications and Public Affairs
The Sherwin-Williams Company
101 W. Prospect Avenue
Cleveland, Ohio 44115-1075 Independent Registered Public Accounting Firm Ernst & Young LLP Cleveland, Ohio Stock Trading Sherwin-Williams Common Stock— Symbol, SHW—is traded on the New York Stock Exchange. Dividend Reinvestment Program A dividend reinvestment program is available to shareholders of common stock. For information, contact Wells Fargo Shareowner Services. Form 10-K The Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission, is available without charge. To obtain a copy, contact Investor Relations. Transfer Agent & Registrar Our transfer agent, Wells Fargo Shareowner Services, maintains the records for our registered shareholders and can help with a wide variety of shareholder related services, including the direct deposit of dividends and online access to your account. Contact: Wells Fargo Shareowner Services P.O. Box 64856 St. Paul, MN 55164-0856 www.shareowneronline.com 1-800-468-9716 Toll-free 651-450-4064 outside the United States 651-450-4144 TDD

78

SHAREHOLDER INFORMATION

COMMON STOCK TRADING STATISTICS

	2012		2011		2010		2009		2008
High	$	159.80	$	90.42	$	84.99	$	64.13	$	65.00
Low	90.21		69.47		57.86		42.19		44.51
Close December 31	153.82		89.27		83.75		61.65		59.75
Shareholders of record	7,954		8,360		8,706		9,151		9,469
Shares traded (thousands)	282,397		286,276		316,582		430,216		519,438

QUARTERLY STOCK PRICES AND DIVIDENDS

2012							2011
Quarter	High		Low		Dividend		Quarter	High		Low		Dividend
1st	$	110.79	$	90.21	$	.390	1st	$	86.77	$	79.25	$	.365
2nd	133.97		107.29		.390		2nd	87.87		80.70		.365
3rd	150.80		122.79		.390		3rd	86.50		69.47		.365
4th	159.80		138.36		.390		4th	90.42		73.06		.365

79

CORPORATE OFFICERS AND

OPERATING MANAGEMENT

Corporate Officers	Operating Management
Christopher M. Connor, 56*	Joel Baxter, 52	Timothy A. Knight, 48*
Chairman and Chief Executive Officer	President & General Manager	President
	Global Supply Chain Division	Latin America Coatings Group
John G. Morikis, 49*	Consumer Group
President and Chief Operating Officer		David B. Sewell, 44
	Robert J. Davisson, 52*	President & General Manager
Sean P. Hennessy, 55*	President	Product Finishes Division
Senior Vice President - Finance and	Paint Stores Group	Global Finishes Group
Chief Financial Officer
	Timothy J. Drouilhet, 51	Cheri M. Phyfer, 41
Thomas E. Hopkins, 55*	President & General Manager	President & General Manager
Senior Vice President -	Eastern Division	Southeastern Division
Human Resources	Paint Stores Group	Paint Stores Group
Catherine M. Kilbane, 49*	Monty J. Griffin, 52	Ronald B. Rossetto, 46
Senior Vice President, General	President & General Manager	President & General Manager
Counsel and Secretary	South Western Division	Protective & Marine Coatings Division
	Paint Stores Group	Global Finishes Group
Steven J. Oberfeld, 60*
Senior Vice President -	Thomas C. Hablitzel, 50	Harvey P. Sass, 55
Corporate Planning and Development	President & General Manager	President & General Manager
	Automotive Division	Diversified Brands Division
Robert J. Wells, 55*	Global Finishes Group	Consumer Group
Senior Vice President - Corporate
Communications and Public Affairs	George E. Heath, 47*	Thomas W. Seitz, 64*
	President	Senior Vice President -
Allen J. Mistysyn, 44*	Global Finishes Group	Strategic Excellence Initiatives
Vice President -
Corporate Controller	Peter J. Ippolito, 48
	President & General Manager
Cynthia D. Brogan, 61	Mid Western Division
Vice President and Treasurer	Paint Stores Group
Michael T. Cummins, 54
Vice President - Taxes and
Assistant Secretary
Edward C. Thompson, 45
Vice President - Corporate Audit
and Loss Prevention
Richard M. Weaver, 58
Vice President - Administration
* Executive Officer as defined by the Securities Exchange Act of 1934

80

CORPORATE OFFICERS AND

OPERATING MANAGEMENT

EX-21

EXHIBIT 21

The Sherwin-Williams Company

Subsidiaries

Domestic

SubsidiaryState of

Incorporation

Contract Transportation Systems Co.                DE            

Geocel, LLC                            IN            

Omega Specialty Products & Services LLC         OH            

Sherwin-Williams Realty Holdings, Inc.         IL            

SWIMC, Inc.                            DE             

The Sherwin-Williams Acceptance Corporation            NV    

Foreign

Country of

SubsidiaryIncorporation

Becker Acroma Limited                        UK            

Compania Sherwin-Williams, S.A. de C.V.             Mexico            

Geocel Limited                            UK            

Jiangsu Pulanna Coating Co., Ltd.                China            

Oy Sherwin-Williams Finland Ab                Finland            

Pinturas Condor S.A.                        Ecuador        

Pinturas Industriales S.A.                    Uruguay        

Productos Quimicos y Pinturas, S.A. de C.V.            Mexico            

Przedsiêbiorstwo Altax Sp. z o.o                    Poland            

Quetzal Pinturas, S.A. de C.V.                     Mexico            

Ronseal (Ireland) Limited                     Ireland            

Ronseal Limited                         UK            

Sherwin-Williams Argentina I.y C.S.A.                 Argentina        

Sherwin-Williams Aruba VBA                    Aruba            

Sherwin-Williams Automotive Mexico S. de R.L. de C.V.    Mexico            

Sherwin-Williams Balkan S.R.L.                Romania        

Sherwin-Williams Bel                        Belarus            

Sherwin-Williams (Belize) Limited                Belize            

Sherwin-Williams Benelux NV                    Belgium        

Sherwin-Williams Canada Inc.                    Canada            

Sherwin-Williams (Caribbean) N.V.                Curacao        

Sherwin-Williams Cayman Islands Limited            Grand Cayman        

Sherwin-Williams Chile S.A.                    Chile            

Sherwin-Williams Coatings S.a r.l.                Luxembourg        

Sherwin Williams Colombia S.A.S.                Colombia        

Sherwin-Williams Czech Republic spol. s r.o            Czech Republic        

Sherwin-Williams Denmark A/S                    Denmark        

Sherwin-Williams Deutschland GmbH                Germany

Sherwin-Williams do Brasil Industria e Comercio Ltda.        Brazil            

Sherwin-Williams France Finishes SAS                France            

Sherwin-Williams HK Limited                    Hong Kong        

Sherwin-Williams (Ireland) Limited                Ireland            

Sherwin-Williams Italy S.r.l.                    Italy    

Sherwin-Williams LuxembourgInvestment Management Company S.a r.l. Luxembourg

Sherwin-Williams (Malaysia) Sdn. Bhd.                Malaysia        

Sherwin-Williams Norway AS                    Norway            

Sherwin-Williams Paints India Private Limited            India            

Sherwin-Williams Paints Limited Liability Company        Russia            

Sherwin-Williams Peru S.R.L.                    Peru    

Sherwin-Williams Pinturas de Venezuela S.A.             Venezuela        

Sherwin-Williams Poland Sp. z o.o                Poland    

Sherwin-Williams Protective & Marine Coatings            UK            

Sherwin-Williams (S) Pte. Ltd.                    Singapore        

Sherwin-Williams Services (Malaysia) Sdn. Bhd.        Malaysia        

Sherwin-Williams (Shanghai) Limited                China            

Sherwin-Williams Spain Coatings S.L.                Spain            

Sherwin-Williams Sweden AB                    Sweden            

Sherwin-Williams (Thailand) Co., Ltd.                Thailand        

Sherwin-Williams UK Automotive Limited            UK            

Sherwin-Williams Uruguay S.A.         Uruguay        

Sherwin-Williams (Vietnam) Limited                Vietnam

Sherwin-Williams VI, LLC                    Virgin Islands        

Sherwin-Williams (West Indies) Limited                Jamaica            

SWIPCO - Sherwin Williams do Brasil Propriedade

Intelectual Ltda.                    Brazil            

The Sherwin-Williams Company Resources Limited         Jamaica            

TOB Becker Acroma Ukraine                    Ukraine            

UAB Sherwin-Williams Lietuva                    Lithuania        

ZAO Sherwin-Williams                        Russia            

Zhao Qing Sherwin Williams Coatings Co., Ltd.            China                

EX-23

EXHIBIT 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Annual Report (Form 10-K) of The Sherwin-Williams Company of our reports dated February 28, 2013 with respect to the consolidated financial statements of The Sherwin-Williams Company and the effectiveness of internal control over financial reporting of The Sherwin-Williams Company, included in the 2012 Annual Report to Shareholders of The Sherwin-Williams Company.

Our audits also included the financial statement schedule of The Sherwin-Williams Company listed in Item 15(a). This schedule is the responsibility of The Sherwin-Williams Company management. Our responsibility is to express an opinion based on our audits. In our opinion, as to which the date is February 28, 2013, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We consent to the incorporation by reference in the following Registration Statements of our reports dated February 28, 2013 with respect to the consolidated financial statements of The Sherwin-Williams Company and the effectiveness of internal control over financial reporting of The Sherwin-Williams Company, incorporated by reference herein, and our report included in the preceding paragraph with respect to the financial statement schedule of The Sherwin-Williams Company included in this Annual Report (Form 10-K) of The Sherwin-Williams Company:

Registration Number	Description
333-166365	The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (as Amended and Restated as of April 21, 2010) Form S-8 Registration Statement
333-163747	The Sherwin-Williams Company Form S-3ASR Registration Statement
333-152443	The Sherwin-Williams Company Employee Stock Purchase and Savings Plan Form S-8 Registration Statement
333-133419	The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan and The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors Form S-8 Registration Statement
333-129582	The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan, The Sherwin-Williams 2005 Key Management Deferred Compensation Plan and The Sherwin-Williams Company 2005 Director Deferred Fee Plan Form S-8 Registration Statement
333-105211	The Sherwin-Williams Company Employee Stock Purchase and Savings Plan Form S-8 Registration Statement
333-101229	The Sherwin-Williams Company 2003 Stock Plan Form S-8 Registration Statement
333-66295	The Sherwin-Williams Company Deferred Compensation Savings Plan, The Sherwin-Williams Company Key Management Deferred Compensation Plan and The Sherwin-Williams Company Director Deferred Fee Plan Form S-8 Registration Statement
333-25671	The Sherwin-Williams Company 1997 Stock Plan for Nonemployee Directors Form S-8 Registration Statement
333-25607	The Sherwin-Williams Company Form S-4 Registration Statement
333-01093	The Sherwin-Williams Company Form S-3 Registration Statement
333-00725	The Sherwin-Williams Company Form S-4 Registration Statement
33-22705	The Sherwin-Williams Company Form S-3 Registration Statement

Cleveland, Ohio

February 28, 2013

EX-24.A

EXHIBIT 24(a)

POWER OF ATTORNEY

THE SHERWIN-WILLIAMS COMPANY

KNOW ALL BY THESE PRESENTS, that each of the undersigned directors and/or officers of The Sherwin-Williams Company, an Ohio corporation (the “Company”), hereby constitutes and appoints each of C.M. Connor, S.P. Hennessy and C.M. Kilbane, with full power of substitution and resubstitution, as the true and lawful attorney-in-fact or attorneys-in-fact of the undersigned to execute and file with the Securities and Exchange Commission under the Securities Exchange Act of 1934 the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012, with any and all amendments, supplements and exhibits thereto, and any and all other documents in connection therewith, with full power and authority to do and perform any and all acts and things necessary, appropriate or desirable to be done in the premises, or in the name, place and stead of the undersigned, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and approving all that said attorneys-in-fact or any of them and any substitute therefor may lawfully do or cause to be done by virtue thereof.

This Power of Attorney may be executed in multiple counterparts, each of which shall be deemed an original with respect to the person executing it.

Executed as of this 12th day of February, 2013.

Signature	Title
/s/ C. M. Connor	Chairman and Chief Executive Officer, Director (Principal Executive Officer)
C. M. Connor
/s/ S. P. Hennessy	Senior Vice President - Finance and Chief Financial Officer (Principal Financial Officer)
S. P. Hennessy
/s/ A. J. Mistysyn	Vice President - Corporate Controller (Principal Accounting Officer)
A. J. Mistysyn
/s/ A. F. Anton	Director
A. F. Anton
/s/ D. F. Hodnik	Director
D. F. Hodnik
/s/ T. G. Kadien	Director
T. G. Kadien
/s/ R. J. Kramer	Director
R. J. Kramer
/s/ S. J. Kropf	Director
S. J. Kropf
/s/ A. M. Mixon, III	Director
A. M. Mixon, III
/s/ R. K. Smucker	Director
R. K. Smucker
/s/ J. M. Stropki	Director
J. M. Stropki

EX-24.B

EXHIBIT 24(b)

CERTIFICATE

I, the undersigned, Secretary of The Sherwin-Williams Company (the “Company”), hereby certify that attached hereto is a true and complete copy of a resolution of the Board of Directors of the Company, duly adopted at a meeting held on February 13, 2013, and that such resolution is in full force and effect and has not been amended, modified, revoked or rescinded as of the date hereof.

IN WITNESS WHEREOF, I have executed this certificate as of this 13th day of February, 2013.

/s/ C.M. Kilbane

C.M. Kilbane, Secretary

RESOLVED, that the appropriate officers of the Company are each hereby authorized to execute and deliver a power of attorney appointing C.M. Connor, S.P. Hennessy and C.M. Kilbane or any of them, with full power of substitution and resubstitution, to act as attorneys-in-fact for the Company and for such officers for the purpose of executing and filing with the Securities and Exchange Commission (“SEC”) and any national securities exchange, on behalf of the Company, the Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and any and all amendments, exhibits and other documents in connection therewith, and to take other action deemed necessary and appropriate to effect the filing of such Annual Report on Form 10-K and any and all such amendments, exhibits and other documents in connection therewith.

EX-31.A

EXHIBIT 31(a)

CERTIFICATION

I, Christopher M. Connor, certify that:

1. I have reviewed this annual report on Form 10-K of The Sherwin-Williams Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 28, 2013	/s/ Christopher M. Connor
		Christopher M. Connor Chairman and Chief     Executive Officer

EX-31.B

EXHIBIT 31(b)

CERTIFICATION

I, Sean P. Hennessy, certify that:

1. I have reviewed this annual report on Form 10-K of The Sherwin-Williams Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 28, 2013	/s/ Sean P. Hennessy
		Sean P. Hennessy Senior Vice President – Finance and     Chief Financial Officer

EX-32.A

EXHIBIT 32(a)

SECTION 1350 CERTIFICATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of The Sherwin-Williams Company (the “Company”) for the fiscal year ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher M. Connor, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	February 28, 2013	/s/ Christopher M. Connor
		Christopher M. Connor Chairman and Chief     Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Sherwin-Williams Company and will be retained by The Sherwin-Williams Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.B

EXHIBIT 32(b)

SECTION 1350 CERTIFICATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of The Sherwin-Williams Company (the “Company”) for the fiscal year ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sean P. Hennessy, Senior Vice President – Finance and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	February 28, 2013	/s/ Sean P. Hennessy
		Sean P. Hennessy Senior Vice President – Finance and     Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to The Sherwin-Williams Company and will be retained by The Sherwin-Williams Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Components of deferred tax assets and liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2012, 2011 and 2010 were as follows:

	2012		2011		2010
Deferred tax assets:
Exit costs, environ-mental and other similar items	$	45,403	$	53,928	$	64,773
Deferred employee benefit items	93,039		74,577		57,810
Other items (each less than 5 percent of total assets)	73,388		83,192		79,014
Total deferred tax assets	$	211,830	$	211,697	$	201,597
Deferred tax liabilities:
Depreciation and amortization	$	202,891	$	192,035	$	165,917

Components of the provisions for income taxes

Significant components of the provisions for income taxes were as follows:

	2012			2011			2010
Current:
Federal	$	207,791		$	204,284		$	127,498
Foreign	51,264			50,272			50,765
State and local	27,642			28,219			16,966
Total current	286,697			282,775			195,229
Deferred:
Federal	8,692			20,713			27,903
Foreign	(16,964		)	(3,922		)	(7,145		)
State and local	(2,150		)	122			(688		)
Total deferred	(10,422		)	16,913			20,070
Total provisions for income taxes	$	276,275		$	299,688		$	215,299

Components of income before income taxes and minority interest used for income tax purpose

Significant components of income before income taxes as used for income tax purposes, were as follows:

	2012		2011		2010
Domestic	$	712,873	$	560,395	$	539,120
Foreign	194,436		181,153		138,664
	$	907,309	$	741,548	$	677,784

Reconciliation of the statutory federal income tax rate to the effective tax rate

A reconciliation of the statutory federal income tax rate to the effective tax rate follows:

	2012		2011		2010
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Effect of:
State and local income taxes	1.8		2.1		1.6
Investment vehicles	(2.1	)	(1.9	)	(1.6	)
ESOP IRS audit settlement			10.1
Domestic production activities	(1.9	)	(2.4	)	(2.5	)
Other - net	(2.4	)	(2.5	)	(0.7	)
Effective tax rate	30.4	%	40.4	%	31.8	%

Reconciliation of unrecognized tax

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2012			2011			2010
Balance at beginning of year	$	29,666		$	31,268		$	36,963
Additions based on tax positions related to the current year	3,760			2,807			3,109
Additions for tax positions of prior years	7,392			1,354			1,841
Reductions for tax positions of prior years	(6,583		)	(3,339		)	(9,123		)
Settlements	(1,139		)	(1,089		)	(55		)
Lapses of Statutes of Limitations	(4,977		)	(1,335		)	(1,467		)
Balance at end of year	$	28,119		$	29,666		$	31,268

XML

Goodwill, Intangible and Long-Lived Assets (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Carrying value of goodwill by reportable operating segment
Goodwill, Beginning Balance	$ 1,108,008	$ 1,102,458	$ 1,014,825	[1]
Acquisitions	42,064	5,039	79,909
Currency and other adjustments	5,933	511	7,724
Goodwill, Ending Balance	1,156,005	1,108,008	1,102,458
Goodwill Impairment Loss	8,904
Paint Stores Group [Member]
Carrying value of goodwill by reportable operating segment
Goodwill, Beginning Balance	286,998	286,744	285,445	[1]
Currency and other adjustments	(214)	254	1,299
Goodwill, Ending Balance	286,784	286,998	286,744
Consumer Group [Member]
Carrying value of goodwill by reportable operating segment
Goodwill, Beginning Balance	689,279	689,388	686,612	[1]
Acquisitions	17,357
Currency and other adjustments	(344)	(109)	2,776
Goodwill, Ending Balance	706,292	689,279	689,388
Goodwill Impairment Loss	8,113
Global Finishes Group [Member]
Carrying value of goodwill by reportable operating segment
Goodwill, Beginning Balance	120,350	115,719	42,397	[1]
Acquisitions	24,707	5,039	70,594
Currency and other adjustments	7,230	(408)	2,728
Goodwill, Ending Balance	152,287	120,350	115,719
Goodwill Impairment Loss	791
Latin America Coating Group [Member]
Carrying value of goodwill by reportable operating segment
Goodwill, Beginning Balance	11,381	10,607	371	[1]
Acquisitions			9,315
Currency and other adjustments	(739)	774	921
Goodwill, Ending Balance	$ 10,642	$ 11,381	$ 10,607

[1] Net of accumulated impairment losses of $8,904 ($8,113 in the Consumer Group and $791 in the Global Finishes Group).

XML

Significant Accounting Policies (Details 3)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Amortization cost of non-compete covenants and certain intangible property rights
Useful life	11 years	11 years	11 years
Finite-lived Trademarks [Member]
Amortization cost of non-compete covenants and certain intangible property rights
Useful life	5 years
Minimum [Member] | Non-Compete Covenants [Member]
Amortization cost of non-compete covenants and certain intangible property rights
Useful life	3 years
Minimum [Member] | Certain Intangible Property Rights [Member]
Amortization cost of non-compete covenants and certain intangible property rights
Useful life	3 years
Maximum [Member] | Non-Compete Covenants [Member]
Amortization cost of non-compete covenants and certain intangible property rights
Useful life	5 years
Maximum [Member] | Certain Intangible Property Rights [Member]
Amortization cost of non-compete covenants and certain intangible property rights
Useful life	20 years

XML

Litigation Litigation (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		12 Months Ended	6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Jun. 30, 2008 Trial by Jury, State of Rhode Island [Member] jury_trial defendant
Loss Contingencies [Line Items]
Number of Jury Trials				2
Number of additional defendants				2
DOL settlement	$ 80,000		$ 80,000
After tax charge to earnings for DOL settlement	(49,163)	74,982
Cost of goods sold increase due to DOL settlement	16,000
Increase to selling, general and administratve expense due to DOL settlement	64,000
Decrease to income tax expense due to DOL settlement	$ (30,837)
Decrease in fourth quarter net income per share due to DOL settlement	$ (0.47)	$ 0.71

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Goodwill, Intangible and Long-Lived Assets (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Carrying value of intangible assets
Weighted-average amortization period	11 years	11 years	11 years
Gross	$ 444,868	$ 383,487	$ 361,603
Accumulated amortization	(260,065)	(237,736)	(228,633)
Net value	184,803	145,751	132,970
Trademarks with indefinite lives	162,750	160,122	187,534
Total intangible assets	347,553	305,873	320,504
Software [Member]
Carrying value of intangible assets
Weighted-average amortization period	8 years	7 years	8 years
Gross	107,779	109,401	107,141
Accumulated amortization	(66,106)	(60,030)	(57,480)
Net value	41,673	49,371	49,661
All Other [Member]
Carrying value of intangible assets
Weighted-average amortization period	12 years	13 years	13 years
Gross	337,089	274,086	254,462
Accumulated amortization	(193,959)	(177,706)	(171,153)
Net value	$ 143,130	$ 96,380	$ 83,309

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Other (Textual) (Details)	Dec. 31, 2012 Contract OptionPlan	Dec. 31, 2011 Contract OptionPlan	Dec. 31, 2010 OptionPlan Contract
Other Income and Expenses [Abstract]
Number of foreign currency option outstanding	0	0	0
Number of foreign forward contracts outstanding	0	0	0

XML

- Fair Value Measurements on Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Assets:
Deferred compensation plan asset	$ 19,995	[1]
Liabilities:
Deferred compensation plan liability	28,627	[2]
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets:
Deferred compensation plan asset	13,893	[1]
Liabilities:
Deferred compensation plan liability	28,627	[2]
Significant Other Observable Inputs (Level 2) [Member]
Assets:
Deferred compensation plan asset	6,102	[1]
Fair Value Measurements (Textual) [Abstract]
Cost basis of the investment funds	$ 19,764

[1] The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $19,764.

[2] The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.

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Exit or Disposal Activities (Tables)

12 Months Ended

Dec. 31, 2012

Restructuring and Related Activities [Abstract]

Summary of activity and remaining liabilities associated with qualified exit costs

The tables on the following pages summarize the activity and remaining liabilities associated with qualified exit costs:

Exit Plan	Balance at December 31, 2011		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2012
Paint Stores Group stores shutdown in 2012:
Other qualified exit costs			$	313							$	313
Global Finishes Group facility shutdown in 2012:
Severance and related costs			3,933		$	(1,697	)				2,236
Other qualified exit costs			3,430								3,430
Consumer Group manufacturing facilities shutdown in 2011:
Severance and related costs	$	197			(133		)	$	(64	)
Paint Stores Group stores shutdown in 2011:
Other qualified exit costs	156				(144		)	(12		)
Global Finishes Group branches shutdown in 2011:
Severance and related costs	129				(134		)	5
Other qualified exit costs	470				(180		)				290
Global Finishes Group branches shutdown in 2010:
Other qualified exit costs	955				(133		)				822
Other qualified exit costs for facilities shutdown prior to 2010	8,493				(2,156		)	(4,871		)	1,466
Totals	$	10,400	$	7,676	$	(4,577	)	$	(4,942	)	$	8,557

Exit Plan	Balance at December 31, 2010		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2011
Consumer Group manufacturing facilities shutdown in 2011:
Severance and related costs			$	339	$	(142	)				$	197
Paint Stores Group stores shutdown in 2011:
Other qualified exit costs			182		(26		)				156
Global Finishes Group branches shutdown in 2011:
Severance and related costs			316		(187		)				129
Other qualified exit costs			597		(127		)				470
Global Finishes Group branches shutdown in 2010:
Other qualified exit costs	$	1,114			(159		)				955
Paint Stores Group stores shutdown in 2010:
Other qualified exit costs	4							$	(4	)
Paint Stores Group stores shutdown in 2009:
Other qualified exit costs	2,022				(805		)	3			1,220
Global Finishes Group manufacturing facility and branches shutdown in 2009:
Other qualified exit costs	1,820				(918		)	262			1,164
Consumer Group manufacturing facilities shutdown in 2009:
Other qualified exit costs	721				(245		)	(74		)	402
Other qualified exit costs for facilities shutdown prior to 2009	10,366				(3,572		)	(1,087		)	5,707
Totals	$	16,047	$	1,434	$	(6,181	)	$	(900	)	$	10,400

Exit Plan	Balance at January 1, 2010		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2010
Global Finishes Group branches shutdown in 2010:
Severance and related costs			$	31	$	(31	)
Other qualified exit costs			1,283		(169		)				$	1,114
Paint Stores Group stores shutdown in 2010:
Other qualified exit costs			182		(178		)				4
Paint Stores Group stores shutdown in 2009:
Other qualified exit costs	$	3,213			(1,213		)	$	22		2,022
Consumer Group manufacturing facilities shutdown in 2009:
Severance and related costs	4,532		457		(3,534		)	(1,455		)
Other qualified exit costs	2,258				(612		)	(925		)	721
Global Finishes Group manufacturing facility and branches shutdown in 2009:
Severance and related costs	204				(78		)	(126		)
Other qualified exit costs	3,703				(1,288		)	(595		)	1,820
Paint Stores Group manufacturing and distribution facilities, administrative offices and stores shutdown in 2008:
Severance and related costs	70				(66		)	(4		)
Other qualified exit costs	5,426				(1,864		)	(504		)	3,058
Consumer Group manufacturing and distribution facilities shutdown in 2008:
Severance and related costs	311							(311		)
Other qualified exit costs	83				(60		)	219			242
Global Finishes Group administrative offices and branches shutdown in 2008:
Other qualified exit costs	88				(88		)
Other qualified exit costs for facilities shutdown prior to 2008	11,245				(2,094		)	(2,085		)	7,066
Totals	$	31,133	$	1,953	$	(11,275	)	$	(5,764	)	$	16,047

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Deferred tax assets:
Exit costs, environ-mental and other similar items	$ 45,403	$ 53,928	$ 64,773
Deferred employee benefit items	93,039	74,577	57,810
Other items (each less than 5 percent of total assets)	73,388	83,192	79,014
Total deferred tax assets	211,830	211,697	201,597
Deferred tax liabilities:
Depreciation and amortization	202,891	192,035	165,917
Current:
Federal	207,791	204,284	127,498
Foreign	51,264	50,272	50,765
State and local	27,642	28,219	16,966
Total current	286,697	282,775	195,229
Deferred:
Federal	8,692	20,713	27,903
Foreign	(16,964)	(3,922)	(7,145)
State and local	(2,150)	122	(688)
Total deferred	(10,422)	16,913	20,070
Total provisions for income taxes	$ 276,275	$ 299,688	$ 215,299

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Stock-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Option rights
Risk-free interest rate	0.78%	1.13%	1.16%
Expected life of option rights	5 years 1 month 10 days	5 years 3 months 7 days	5 years 3 months 7 days
Expected dividend yield of stock	1.43%	1.77%	1.84%
Expected volatility of stock	27.40%	30.30%	30.40%
Company's non-qualified and incentive stock option right activity for employees and nonemployee directors
Outstanding beginning of the year, Optioned Shares	9,857,695	10,009,385	10,897,652
Granted, Optioned Shares	1,089,240	1,407,259	1,586,984
Exercised, Optioned Shares	(4,140,822)	(1,480,058)	(2,436,639)
Forfeited, Optioned Shares	(57,730)	(76,354)	(34,999)
Expired, Optioned Shares	(257)	(2,537)	(3,613)
Outstanding end of the year, Optioned Shares	6,748,126	9,857,695	10,009,385
Outstanding beginning of the year, Weighted- Average Exercise Price Per Share	$ 60.31	$ 55.82	$ 50.30
Granted, Weighted- Average Exercise Price Per Share	$ 152.93	$ 78.72	$ 72.48
Exercised, Weighted- Average Exercise Price Per Share	$ 53.40	$ 47.15	$ 41.95
Forfeited, Weighted- Average Exercise Price Per Share	$ 78.01	$ 67.02	$ 58.90
Expired, Weighted- Average Exercise Price Per Share	$ 72.65	$ 53.65	$ 54.71
Outstanding end of the year, Weighted- Average Exercise Price Per Share	$ 79.39	$ 60.31	$ 55.82
Outstanding end of year, Aggregate Intrinsic Value	$ 494,699	$ 287,526	$ 281,349
Exercisable at end of year, Optioned Shares	4,245,891	6,908,116	6,655,569
Exercisable at end of year, Weighted- Average Exercise Price Per Share	$ 61.43	$ 54.24	$ 50.78
Exercisable at end of year, Aggregate Intrinsic Value	$ 386,484	$ 243,440	$ 220,647

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Exit or Disposal Activities (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance	$ 10,400	$ 16,047	$ 31,133
Provisions in Cost of goods sold or SG&A	7,676	1,434	1,953
Actual expenditures charged to accrual	(4,577)	(6,181)	(11,275)
Adjustments to prior provisions in Other general expense - net	(4,942)	(900)	(5,764)
Ending Balance	8,557	10,400	16,047
Facilities shutdown Prior to 2010 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance	8,493
Actual expenditures charged to accrual	(2,156)
Adjustments to prior provisions in Other general expense - net	(4,871)
Ending Balance	1,466
Facilities shutdown prior to 2009 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance		10,366
Actual expenditures charged to accrual		(3,572)
Adjustments to prior provisions in Other general expense - net		(1,087)
Ending Balance		5,707
Facilities shutdown prior to 2008 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			11,245
Actual expenditures charged to accrual			(2,094)
Adjustments to prior provisions in Other general expense - net			(2,085)
Ending Balance			7,066
Global Finishes Group [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A	7,363	913	1,314
Consumer Group [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A	0
Severance and related costs [Member] | Global Finishes Group [Member] | Facility shutdown in 2012 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A	3,933
Actual expenditures charged to accrual	(1,697)
Ending Balance	2,236
Severance and related costs [Member] | Global Finishes Group [Member] | Branches shutdown in 2011 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance	129
Provisions in Cost of goods sold or SG&A		316
Actual expenditures charged to accrual	(134)	(187)
Adjustments to prior provisions in Other general expense - net	5
Ending Balance		129
Severance and related costs [Member] | Global Finishes Group [Member] | Branches shutdown in 2010 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A			31
Actual expenditures charged to accrual			(31)
Severance and related costs [Member] | Global Finishes Group [Member] | Manufacturing facility and branches shutdown in 2009 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			204
Actual expenditures charged to accrual			(78)
Adjustments to prior provisions in Other general expense - net			(126)
Severance and related costs [Member] | Consumer Group [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A		339	457
Severance and related costs [Member] | Consumer Group [Member] | Manufacturing facilities shutdown in 2011 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance	197
Provisions in Cost of goods sold or SG&A		339
Actual expenditures charged to accrual	(133)	(142)
Adjustments to prior provisions in Other general expense - net	(64)
Ending Balance		197
Severance and related costs [Member] | Consumer Group [Member] | Manufacturing facilities shutdown in 2009 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			4,532
Provisions in Cost of goods sold or SG&A			457
Actual expenditures charged to accrual			(3,534)
Adjustments to prior provisions in Other general expense - net			(1,455)
Severance and related costs [Member] | Consumer Group [Member] | Manufacturing and distribution facilities shutdown in 2008 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			311
Adjustments to prior provisions in Other general expense - net			(311)
Severance and related costs [Member] | Paint Stores Group [Member] | Manufacturing and distribution facilities, administrative offices and stores shutdown in 2008 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			70
Actual expenditures charged to accrual			(66)
Adjustments to prior provisions in Other general expense - net			(4)
Other qualified exit costs [Member] | Global Finishes Group [Member] | Facility shutdown in 2012 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A	3,430
Ending Balance	3,430
Other qualified exit costs [Member] | Global Finishes Group [Member] | Branches shutdown in 2011 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance	470
Provisions in Cost of goods sold or SG&A		597
Actual expenditures charged to accrual	(180)	(127)
Ending Balance	290	470
Other qualified exit costs [Member] | Global Finishes Group [Member] | Branches shutdown in 2010 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance	955	1,114
Provisions in Cost of goods sold or SG&A			1,283
Actual expenditures charged to accrual	(133)	(159)	(169)
Ending Balance	822	955	1,114
Other qualified exit costs [Member] | Global Finishes Group [Member] | Manufacturing facility and branches shutdown in 2009 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance		1,820	3,703
Actual expenditures charged to accrual		(918)	(1,288)
Adjustments to prior provisions in Other general expense - net		262	(595)
Ending Balance		1,164	1,820
Other qualified exit costs [Member] | Global Finishes Group [Member] | Administrative offices and branches shutdown In 2008 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			88
Actual expenditures charged to accrual			(88)
Other qualified exit costs [Member] | Consumer Group [Member] | Manufacturing facilities shutdown in 2009 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance		721	2,258
Actual expenditures charged to accrual		(245)	(612)
Adjustments to prior provisions in Other general expense - net		(74)	(925)
Ending Balance		402	721
Other qualified exit costs [Member] | Consumer Group [Member] | Manufacturing and distribution facilities shutdown in 2008 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			83
Actual expenditures charged to accrual			(60)
Adjustments to prior provisions in Other general expense - net			219
Ending Balance			242
Other qualified exit costs [Member] | Paint Stores Group [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A		182	182
Other qualified exit costs [Member] | Paint Stores Group [Member] | Stores shutdown in 2012 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Provisions in Cost of goods sold or SG&A	313
Ending Balance	313
Other qualified exit costs [Member] | Paint Stores Group [Member] | Stores shutdown in 2011 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance	156
Provisions in Cost of goods sold or SG&A		182
Actual expenditures charged to accrual	(144)	(26)
Adjustments to prior provisions in Other general expense - net	(12)
Ending Balance		156
Other qualified exit costs [Member] | Paint Stores Group [Member] | Stores shutdown in 2010 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance		4
Provisions in Cost of goods sold or SG&A			182
Actual expenditures charged to accrual			(178)
Adjustments to prior provisions in Other general expense - net		(4)
Ending Balance			4
Other qualified exit costs [Member] | Paint Stores Group [Member] | Stores shutdown in 2009 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance		2,022	3,213
Actual expenditures charged to accrual		(805)	(1,213)
Adjustments to prior provisions in Other general expense - net		3	22
Ending Balance		1,220	2,022
Other qualified exit costs [Member] | Paint Stores Group [Member] | Manufacturing and distribution facilities, administrative offices and stores shutdown in 2008 [Member]
Summary of activity and remaining liabilities associated with qualified exit costs
Beginning Balance			5,426
Actual expenditures charged to accrual			(1,864)
Adjustments to prior provisions in Other general expense - net			(504)
Ending Balance			$ 3,058

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Stock- Based Compensation (Details 2)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Summary of the Company's restricted stock activity
Outstanding at beginning of year	1,304,891	1,266,201	1,304,386
Granted	301,856	300,677	348,460
Vested	(412,859)	(16,072)	(300,598)
Forfeited	(274,140)	(245,915)	(86,047)
Outstanding at end of year	919,748	1,304,891	1,266,201

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Reportable Segment Information (Details) (USD $)	3 Months Ended	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2012	Dec. 31, 2011		Dec. 31, 2010
Reportable segment information
Net external sales		$ 9,534,000,000	$ 8,766,000,000		$ 7,776,000,000
Intersegment transfers
Total net sales and intersegment transfers		9,534,000,000	8,766,000,000		7,776,000,000
Segment profit		1,307,000,000	985,000,000	[1]	948,000,000	[1]
Interest expense		(43,000,000)	(42,000,000)		(71,000,000)
Administrative expenses and other		(357,000,000)	(201,000,000)		(199,000,000)
Income before income taxes		907,309,000	741,548,000		677,784,000
Identifiable assets	6,234,737,000	6,234,737,000	5,229,252,000		5,169,235,000
Capital expenditures		157,000,000	154,000,000		125,000,000
Depreciation		152,217,000	151,212,000		140,347,000
DOL settlement	80,000,000	80,000,000
Paint Stores Group [Member]
Reportable segment information
Net external sales		5,410,000,000	4,780,000,000		4,381,000,000
Intersegment transfers
Total net sales and intersegment transfers		5,410,000,000	4,780,000,000		4,381,000,000
Segment profit		862,000,000	646,000,000		620,000,000
Income before income taxes		862,000,000	646,000,000		620,000,000
Reportable segment margins		15.90%	13.50%		14.20%
Identifiable assets	1,374,000,000	1,374,000,000	1,309,000,000		1,238,000,000
Capital expenditures		67,000,000	50,000,000		51,000,000
Depreciation		49,000,000	48,000,000		47,000,000
Consumer Group [Member]
Reportable segment information
Net external sales		1,322,000,000	1,274,000,000		1,298,000,000
Intersegment transfers		2,320,000,000	2,091,000,000		1,770,000,000
Total net sales and intersegment transfers		3,642,000,000	3,365,000,000		3,068,000,000
Segment profit		217,000,000	174,000,000		204,000,000
Income before income taxes		217,000,000	174,000,000		204,000,000
Reportable segment margins		6.00%	5.20%		6.60%
Identifiable assets	1,701,000,000	1,701,000,000	1,682,000,000		1,603,000,000
Capital expenditures		47,000,000	35,000,000		25,000,000
Depreciation		43,000,000	43,000,000		39,000,000	[1]
Mark-up on intersegment transfers realized as a result of external sales included in segment profit		27,000,000	24,000,000		22,000,000
Global Finishes Group [Member]
Reportable segment information
Net external sales		1,961,000,000	1,878,000,000		1,417,000,000
Intersegment transfers		7,000,000	9,000,000		4,000,000
Total net sales and intersegment transfers		1,968,000,000	1,887,000,000		1,421,000,000
Segment profit		147,000,000	90,000,000		65,000,000
Income before income taxes		147,000,000	90,000,000		65,000,000
Reportable segment margins		7.50%	4.80%		4.60%
Identifiable assets	987,000,000	987,000,000	939,000,000		1,089,000,000
Capital expenditures		14,000,000	14,000,000		26,000,000
Depreciation		30,000,000	31,000,000		28,000,000
Latin America Coatings Group [Member]
Reportable segment information
Net external sales		836,000,000	828,000,000		675,000,000
Intersegment transfers		47,000,000	39,000,000		34,000,000
Total net sales and intersegment transfers		883,000,000	867,000,000		709,000,000
Segment profit		81,000,000	75,000,000		59,000,000
Income before income taxes		81,000,000	75,000,000		59,000,000
Reportable segment margins		9.20%	8.70%		8.30%
Identifiable assets	485,000,000	485,000,000	469,000,000		437,000,000
Capital expenditures		9,000,000	14,000,000		12,000,000
Depreciation		10,000,000	11,000,000		10,000,000
Administrative [Member]
Reportable segment information
Net external sales		5,000,000	6,000,000		5,000,000
Intersegment transfers		(2,374,000,000)	(2,139,000,000)		(1,808,000,000)
Total net sales and intersegment transfers		(2,369,000,000)	(2,133,000,000)		(1,803,000,000)
Segment profit
Interest expense		(43,000,000)	(42,000,000)		(71,000,000)
Administrative expenses and other		(357,000,000)	(201,000,000)		(199,000,000)
Income before income taxes		(400,000,000)	(243,000,000)		(270,000,000)
Identifiable assets	1,688,000,000	1,688,000,000	830,000,000		802,000,000
Capital expenditures		20,000,000	41,000,000		11,000,000
Depreciation		$ 20,000,000	$ 18,000,000		$ 16,000,000

[1] Segment profit included $27, $24 and $22 of mark-up on intersegment transfers realized primarily as a result of external sales by the Paint Stores Group during 2012, 2011 and 2010, respectively.

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Income Taxes (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Tax Disclosure [Abstract]
Valuation reserves for other deferred tax assets	$ 11,474,000	$ 8,017,000	$ 17,756,000
Domestic net operating loss carryforward	8,650,000
Net operating loss carryforward expiration Dates	Through 2030
Foreign net operating losses carryforward	47,412,000
Effect of the repatriation provisions of the American Jobs Creation Act of 2004 and the provisions of the Income Taxes Topic of the ASC	7,572,000	(491,000)	1,885,000
Retained earnings invested by foreign subsidiaries for which provision was not made	19,274,000
Deferred Tax Liabilities, Undistributed Foreign Earnings	1,000,000
Interest related to 2008 tax year	2,000,000
Unrecognized tax benefits adjusted	25,011,000	25,569,000	27,428,000
Amount of unrecognized tax benefits where significant change is reasonably possible	6,981,000
Income tax interest and penalties	1,532,000	1,163,000	1,544,000
Accrued income tax interest and penalties	$ 6,178,000	$ 8,095,000	$ 10,197,000

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Reportable Segment Information (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012 store	Dec. 31, 2011 store	Dec. 31, 2010 store
Reportable Segment Information (Textual) [Abstract]
Number of reportable operating segments	4
Aggregate total of long lived assets	3,085,499	2,967,660	2,955,513
Assets	6,234,737	5,229,252	5,169,235
Export sales and sales to individual customer	less than 10 percent of consolidated sales to unaffiliated customers
Paint Stores Group [Member]
Reportable Segment Information (Textual) [Abstract]
Number of company-operated stores	3,520
Number of net new stores	70	60	36
New stores opened	81
Paint Stores Group [Member] | United States of America [Member]
Reportable Segment Information (Textual) [Abstract]
New stores opened	63
Number of stores closed	11
Paint Stores Group [Member] | Canada [Member]
Reportable Segment Information (Textual) [Abstract]
New stores opened	14
Paint Stores Group [Member] | Puerto Rico [Member]
Reportable Segment Information (Textual) [Abstract]
New stores opened	1
Paint Stores Group [Member] | Trinidad [Member]
Reportable Segment Information (Textual) [Abstract]
New stores opened	3
Consumer Group [Member]
Reportable Segment Information (Textual) [Abstract]
Percent of sales of one group Including Inter segment transfers represented Products sold through other stores group	64.00%
Global Finishes Group [Member]
Reportable Segment Information (Textual) [Abstract]
Number of company-operated stores	302
Net Increase (Decrease) in branches	(1)
Number of subsidiaries in foreign countries	34
Income from licensing agreements in number of foreign countries	16
Global Finishes Group [Member] | United States of America [Member]
Reportable Segment Information (Textual) [Abstract]
New stores opened	1
Number of stores closed	2
Latin America Coatings Group [Member]
Reportable Segment Information (Textual) [Abstract]
Number of company-operated stores	276
New stores opened	17
Net Increase (Decrease) in branches	11
Number of subsidiaries in foreign countries	9
Income from licensing agreements in number of foreign countries	10
Number of foreign Joint ventures	4
Latin America Coatings Group [Member] | South America [Member]
Reportable Segment Information (Textual) [Abstract]
New stores opened	9
Number of stores closed	6
Latin America Coatings Group [Member] | Mexico [Member]
Reportable Segment Information (Textual) [Abstract]
New stores opened	8
Foreign Subsidiaries [Member]
Reportable Segment Information (Textual) [Abstract]
Net external sales	2,049,814	1,982,859	1,468,116
Segment profit	158,377	122,436	86,951
Long-lived assets	718,409	650,681	664,547
Consolidated foreign subsidiaries assets	1,598,996	1,443,034	1,467,969
Percent of assets of consolidated foreign subsidiaries to Company's assets	25.60%	27.60%	28.40%

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Other (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Other general expense (income) - net
Provisions for environmental matters - net	$ 6,736	$ 9,100	$ 7,089
Loss (gain) on disposition of assets	3,454	(5,469)	2,720
Net income of exit or disposal activities	(4,942)	(900)	(6,006)
Total	5,248	2,731	3,803
Other income - net
Dividend and royalty income	(4,666)	(4,963)	(3,857)
Net expense from financing activities	9,220	8,023	9,256
Foreign currency transaction related (gains) losses	(3,071)	4,748	22
Other income	(21,074)	(22,167)	(14,059)
Other expense	9,651	9,550	7,857
Total	$ (9,940)	$ (4,809)	$ (781)

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Capital Stock (Details)					12 Months Ended			1 Months Ended	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Apr. 21, 2010	Dec. 31, 2012 Common Stock [Member]	Dec. 31, 2011 Common Stock [Member]	Dec. 31, 2010 Common Stock [Member]	Mar. 31, 2011 Treasury Stock	Dec. 31, 2012 Treasury Stock	Dec. 31, 2011 Treasury Stock	Dec. 31, 2010 Treasury Stock	Dec. 31, 2012 Cumulative Preferred Stock [Member]	Dec. 31, 2012 Convertible Preferred Stock [Member]
Capital Stock (Textual) [Abstract]
Common stock authorized	300,000,000
Preferred stock authorized	30,000,000											3,000,000	1,000,000
Increase in number of shares authorized under employee plan				9,200,000
Number of shares authorized under Employee Plan				19,200,000
Common stock reserved for future grants of restricted stock	13,558,565	18,013,429	19,835,391
Common stock held in revocable trust	484,872	475,628	475,628
Number of shares retired								(125,425,977)		(125,425,977)
Schedule of Capital Stock
Common Shares in Treasury, beginning									3,601,159	124,324,862	119,209,669
Common Shares Outstanding, beginning	103,270,067	103,854,234	107,020,728		103,854,234	107,020,728	109,436,869
Shares tendered as payment for option rights exercised					(7,766)	(2,274)	(15,752)		7,766	2,274	15,752
Shares issued for exercise of option rights					4,140,822	1,480,058	2,436,639
Shares tendered in connection with grants of restricted stock					(143,979)		(99,441)		143,979		99,441
Net shares issued for grants of restricted stock					26,756	55,722	262,413
Treasury stock purchased					(4,600,000)	(4,700,000)	(5,000,000)		4,600,000	4,700,000	5,000,000
Treasury stock retired								(125,425,977)		(125,425,977)
Common Shares in Treasury, ending									8,352,904	3,601,159	124,324,862
Common Shares Outstanding, ending	103,270,067	103,854,234	107,020,728		103,270,067	103,854,234	107,020,728

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Summary of Quarterly Results of Operations (Unaudited)

12 Months Ended

Dec. 31, 2012

Quarterly Financial Data [Abstract]

SUMMARY OF QUARTERLY RESULTS OF OPERATIONS

SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

	2012
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	2,136,344	$	2,573,022	$	2,603,226	$	2,221,870	$	9,534,462
Gross profit	909,839		1,150,597		1,150,282		995,508		4,206,226
Net income	100,216		227,813		234,953		68,052		631,034
Net income per common share - basic	.97		2.23		2.29		0.66		6.15
Net income per common share - diluted	.95		2.17		2.24		0.65		6.02

Net income in the fourth quarter was decreased by $49,163 ($.47 per share) due to the DOL Settlement (see Note 9) and increased by inventory adjustments and adjustments to compensation and benefit expenses. Gross profit increased by $28,724 ($.17 per share), primarily as a result of adjustments of $29,488 based on an annual physical inventory count performed during the fourth quarter, year-end inventory levels and related cost adjustments. Selling, general and administrative expenses decreased $5,645 ($.03 per share) related to compensation and benefit expense adjustments.

	2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	1,855,586	$	2,354,751	$	2,484,920	$	2,070,442	$	8,765,699
Gross profit	797,408		1,022,755		1,038,299		886,100		3,744,562
Net income	68,316		179,115		179,877		14,552		441,860
Net income per common share - basic	.64		1.69		1.74		.14		4.22
Net income per common share - diluted	.63		1.66		1.71		.14		4.14

Net income in the fourth quarter was decreased by $74,982 ($.71 per share) due to the settlement of the IRS' audit of the Company's ESOP. Net income in the fourth quarter was increased by physical inventory adjustments and adjustments to compensation and benefit expenses. Gross profit increased by $25,123 ($.15 per share), primarily as a result of physical inventory adjustments of $23,394 based on an annual physical inventory count performed during the fourth quarter, year-end inventory levels and related costs.

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Significant Accounting Policies (Details 4)	12 Months Ended
	Dec. 31, 2012
Buildings [Member] | Minimum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	2.50%
Buildings [Member] | Maximum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	20.00%
Machinery and equipment [Member] | Minimum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	5.00%
Machinery and equipment [Member] | Maximum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	20.00%
Furniture and fixtures [Member] | Minimum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	10.00%
Furniture and fixtures [Member] | Maximum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	33.30%
Automobiles and trucks [Member] | Minimum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	10.00%
Automobiles and trucks [Member] | Maximum [Member]
Classes of assets and ranges of annual depreciation rates
Annual depreciation rate on assets	33.30%

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Operating Leases (Table)

12 Months Ended

Dec. 31, 2012

Leases [Abstract]

Future minimum lease payments under noncancellable operating leases

The following schedule summarizes the future minimum lease payments under noncancellable operating leases having initial or remaining terms in excess of one year at December 31, 2012:

2013	$	242,360
2014	226,975
2015	192,117
2016	151,654
2017	103,573
Later years	191,844
Total minimum lease payments	$	1,108,523

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Stock- Based Compensation (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Summary of grants of restricted stock to certain officers, key employees and non-employee directors
Restricted stock granted	301,856	300,677	348,460
Restricted Stock [Member]
Summary of grants of restricted stock to certain officers, key employees and non-employee directors
Restricted stock granted	301,856	300,677	348,460
Weighted-average per share fair value of restricted stock granted during the year	99.47	84.86	64.49

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Option rights

The fair value of the Company’s option rights was estimated at the date of grant using a Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for all options granted:

	2012	2011	2010
Risk-free interest rate	.78%	1.13%	1.16%
Expected life of option rights	5.11 years	5.27 years	5.27 years
Expected dividend yield of stock	1.43%	1.77%	1.84%
Expected volatility of stock	.274	.303	.304

Company's non-qualified and incentive stock option right activity for employees and nonemployee directors

A summary of the Company’s non-qualified and incentive stock option right activity for employees and nonemployee directors, and related information for the years ended December 31 is shown in the following table:

	2012						2011						2010
	Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding beginning of year	9,857,695		$	60.31			10,009,385		$	55.82			10,897,652		$	50.30
Granted	1,089,240		152.93				1,407,259		78.72				1,586,984		72.48
Exercised	(4,140,822	)	53.40				(1,480,058	)	47.15				(2,436,639	)	41.95
Forfeited	(57,730	)	78.01				(76,354	)	67.02				(34,999	)	58.90
Expired	(257	)	72.65				(2,537	)	53.65				(3,613	)	54.71
Outstanding end of year	6,748,126		$	79.39	$	494,699	9,857,695		$	60.31	$	287,526	10,009,385		$	55.82	$	281,349
Exercisable at end of year	4,245,891		$	61.43	$	386,484	6,908,116		$	54.24	$	243,440	6,655,569		$	50.78	$	220,647

Summary of grants of restricted stock to certain officers, key employees and non-employee directors

A summary of grants of restricted stock to certain officers, key employees and nonemployee directors during each year is as follows:

	2012		2011		2010
Restricted stock granted	301,856		300,677		348,460
Weighted-average per share fair value of restricted stock granted during the year	$	99.47	$	84.86	$	64.49

Summary of the Company's restricted stock activity

A summary of the Company’s restricted stock activity for the years ended December 31 is shown in the following table:

	2012		2011		2010
Outstanding at beginning of year	1,304,891		1,266,201		1,304,386
Granted	301,856		300,677		348,460
Vested	(412,859	)	(16,072	)	(300,598	)
Forfeited	(274,140	)	(245,915	)	(86,047	)
Outstanding at end of year	919,748		1,304,891		1,266,201

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Acquisitions (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Acquisitions (Textual) [Abstract]
Aggregate consideration paid for acquisition, net of cash acquired	$ 99,242	$ 44,436	$ 298,161
Summary of pro-forma consolidated financial information
Net sales	9,589,229	8,888,661
Net income	641,090	448,751
Net income per common share:
Basic (in dollars per share)	$ 6.25	$ 4.29
Diluted (in dollars per share)	$ 6.12	$ 4.20
Acquisition of Comex [Member]
Acquisitions (Textual) [Abstract]
Aggregate consideration paid for acquisition, net of cash acquired	2,340,000
Acquisitions of Geocel and Pulanna [Member]
Acquisitions (Textual) [Abstract]
Aggregate consideration paid for acquisition, net of cash acquired	99,242
Acquisition of Leighs Paints [Member]
Acquisitions (Textual) [Abstract]
Aggregate consideration paid for acquisition, net of cash acquired		$ 41,824

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Debt (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended					12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 04, 2012 1.35% Senior notes due 2017 [Member]	Dec. 04, 2012 4.00% Senior notes due 2042 [Member]	Dec. 31, 2010 7.45% Debentures due 2097 [Member]	Jun. 30, 2010 7.45% Debentures due 2097 [Member]
Debt (Textual) [Abstract]
Issue of debt securities				$ 700,000	$ 300,000
Debt instrument, interest rate				1.35%	4.00%		7.45%
Repurchase of debentures						136,500
Costs related to the repurchase increased interest expense			24,165
Additional Debt (Textual) [Abstract]
Maturities of long-term debt 2013	3,689
Maturities of long-term debt 2014	500,488
Maturities of long-term debt 2015	325
Maturities of long-term debt 2016	(146)
Maturities of long-term debt 2017	700,149
Interest expense on long-term debt	$ 36,188	$ 31,883	$ 64,442

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Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Changes in fair value of defined benefit pension plan assets classified as level 3
Balances at end of year	$ 836,576,000		$ 732,523,000		$ 700,473,000
Significant Unobservable Inputs (Level 3) [Member]
Changes in fair value of defined benefit pension plan assets classified as level 3
Balances at beginning of year			24,687,000		22,993,000
Dispositions			(7,106,000)		(964,000)
Realized and Unrealized Gains			3,319,000		2,658,000
Balances at end of year	18,850,000		20,900,000		24,687,000
Fixed Income Investments [Member]
Changes in fair value of defined benefit pension plan assets classified as level 3
Balances at end of year	239,558,000	[1]	202,939,000	[1]	185,163,000	[1]
Fixed Income Investments [Member] | Significant Unobservable Inputs (Level 3) [Member]
Changes in fair value of defined benefit pension plan assets classified as level 3
Balances at beginning of year			5,535,000	[1]	5,265,000
Dispositions			(5,717,000)		(269,000)
Realized and Unrealized Gains			182,000		539,000
Balances at end of year					5,535,000	[1]
Other Assets [Member]
Changes in fair value of defined benefit pension plan assets classified as level 3
Balances at end of year	37,230,000	[2]	37,482,000	[2]	19,152,000	[2]
Other Assets [Member] | Significant Unobservable Inputs (Level 3) [Member]
Changes in fair value of defined benefit pension plan assets classified as level 3
Balances at beginning of year	20,900,000	[2]	19,152,000	[2]	17,728,000
Dispositions	(3,827,000)		(1,389,000)		(695,000)
Realized and Unrealized Gains	1,777,000		3,137,000		2,119,000
Balances at end of year	$ 18,850,000	[2]	$ 20,900,000	[2]	$ 19,152,000	[2]

[1] This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.

[2] This category consists of venture capital funds.

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Significant Accounting Policies (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis
Trademarks	$ 8,928
Fair Value Measurements (Textual) [Abstract]
Carrying value of trade mark	13,014
Significant Unobservable Inputs (Level 3) [Member]
Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis
Trademarks	$ 8,928	[1]

[1] .

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Statements of Consolidated Shareholders' Equity (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash dividend	$ 1.56	$ 1.46	$ 1.44
Other Capital
Reduction in Equity related to IRS Settlement		$ 51,209

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Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Plan assets:
Balances at end of year	$ 836,576,000	$ 732,523,000	$ 700,473,000
Assets and liabilities recognized in the Consolidated Balance Sheets:
Deferred pension assets	249,911,000	228,350,000	248,333,000
Other accruals	(513,717,000)	(471,761,000)	(442,030,000)
Other long-term liabilities	(614,109,000)	(612,913,000)	(551,633,000)
Domestic Defined Benefit Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Accumulated benefit obligations at end of year	460,591,000	415,163,000	371,195,000
Projected benefit obligations:
Balances at beginning of year	410,029,000	390,257,000	339,275,000
Service cost	19,061,000	17,933,000	16,906,000
Interest cost	17,442,000	18,602,000	18,028,000
Actuarial losses (gains)	48,346,000	8,428,000	41,739,000
Acquisitions of businesses and other	2,496,000	1,194,000
Benefits paid	(30,547,000)	(26,385,000)	(25,691,000)
Balances at end of year	466,827,000	410,029,000	390,257,000
Plan assets:
Balances at beginning of year	614,463,000	634,725,000	577,047,000
Actual returns on plan assets	119,647,000	6,123,000	83,369,000
Benefits paid	(30,547,000)	(26,385,000)	(25,691,000)
Balances at end of year	703,563,000	614,463,000	634,725,000
Excess (deficient) plan assets over projected benefit obligations	236,736,000	204,434,000	244,468,000
Assets and liabilities recognized in the Consolidated Balance Sheets:
Deferred pension assets	245,588,000	218,676,000	244,468,000
Other long-term liabilities	(8,852,000)	(14,242,000)
Total	236,736,000	204,434,000	244,468,000
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	(163,088,000)	(211,752,000)	(179,871,000)
Prior service costs	(6,110,000)	(5,206,000)	(5,647,000)
Total recognized in Cumulative other comprehensive loss	(169,198,000)	(216,958,000)	(185,518,000)
Weighted-average assumptions used to determine projected benefit obligations:
Discount rate	3.73%	4.40%	4.97%
Rate of compensation increase	4.00%	4.00%	4.00%
Weighted-average assumptions used to determine net pension costs:
Discount rate	4.40%	4.97%	5.50%
Expected long-term rate of return on assets	7.50%	7.50%	7.50%
Rate of compensation increase	4.00%	4.00%	4.00%
Foreign Defined Benefit Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Accumulated benefit obligations at end of year	142,769,000	121,137,000	67,964,000
Projected benefit obligations:
Balances at beginning of year	141,465,000	85,936,000	75,175,000
Service cost	3,654,000	3,055,000	2,061,000
Interest cost	6,927,000	5,954,000	4,266,000
Actuarial losses (gains)	17,532,000	11,395,000	(6,950,000)
Acquisitions of businesses and other	(975,000)	42,131,000	14,378,000
Effect of foreign exchange	6,633,000	(3,760,000)	(1,063,000)
Benefits paid	(6,478,000)	(3,246,000)	(1,931,000)
Balances at end of year	168,758,000	141,465,000	85,936,000
Plan assets:
Balances at beginning of year	118,060,000	65,748,000	55,870,000
Actual returns on plan assets	10,201,000	987,000	5,935,000
Acquisitions of businesses and other	6,205,000	57,761,000	7,085,000
Effect of foreign exchange	5,025,000	(3,190,000)	(1,211,000)
Benefits paid	(6,478,000)	(3,246,000)	(1,931,000)
Balances at end of year	133,013,000	118,060,000	65,748,000
Excess (deficient) plan assets over projected benefit obligations	(35,745,000)	(23,405,000)	(20,188,000)
Assets and liabilities recognized in the Consolidated Balance Sheets:
Deferred pension assets	4,323,000	9,674,000	3,865,000
Other accruals	(869,000)	(829,000)	(272,000)
Other long-term liabilities	(39,199,000)	(32,250,000)	(23,781,000)
Total	(35,745,000)	(23,405,000)	(20,188,000)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	(41,567,000)	(26,994,000)	(11,930,000)
Prior service costs
Total recognized in Cumulative other comprehensive loss	$ (41,567,000)	$ (26,994,000)	$ (11,930,000)
Weighted-average assumptions used to determine projected benefit obligations:
Discount rate	4.58%	4.94%	5.45%
Rate of compensation increase	4.08%	4.05%	4.06%
Weighted-average assumptions used to determine net pension costs:
Discount rate	4.94%	5.48%	5.57%
Expected long-term rate of return on assets	6.04%	6.12%	5.46%
Rate of compensation increase	4.04%	4.06%	3.74%

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Reportable Segment Information (Tables)

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Reportable segment information

(millions of dollars)	2012
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	5,410		$	1,322			$	1,961		$	836		$	5			$	9,534
Intersegment transfers				2,320				7			47			(2,374		)
Total net sales and intersegment transfers	$	5,410		$	3,642			$	1,968		$	883		$	(2,369	)		$	9,534
Segment profit	$	862		$	217		(1)	$	147		$	81						$	1,307
Interest expense														$	(43	)		(43		)
Administrative expenses and other														(357		)	(2)	(357		)
Income before income taxes	$	862		$	217			$	147		$	81		$	(400	)		$	907
Reportable segment margins	15.9		%	6.0		%		7.5		%	9.2		%
Identifiable assets	$	1,374		$	1,701			$	987		$	485		$	1,688			$	6,235
Capital expenditures	67			47				14			9			20				157
Depreciation	49			43				30			10			20				152
	2011
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	4,780		$	1,274			$	1,878		$	828		$	6			$	8,766
Intersegment transfers				2,091				9			39			(2,139		)
Total net sales and intersegment transfers	$	4,780		$	3,365			$	1,887		$	867		$	(2,133	)		$	8,766
Segment profit	$	646		$	174		(1)	$	90		$	75						$	985
Interest expense														$	(42	)		(42		)
Administrative expenses and other														(201		)		(201		)
Income before income taxes	$	646		$	174			$	90		$	75		$	(243	)		$	742
Reportable segment margins	13.5		%	5.2		%		4.8		%	8.7		%
Identifiable assets	$	1,309		$	1,682			$	939		$	469		$	830			$	5,229
Capital expenditures	50			35				14			14			41				154
Depreciation	48			43				31			11			18				151
	2010
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	4,381		$	1,298			$	1,417		$	675		$	5			$	7,776
Intersegment transfers				1,770				4			34			(1,808		)
Total net sales and intersegment transfers	$	4,381		$	3,068			$	1,421		$	709		$	(1,803	)		$	7,776
Segment profit	$	620		$	204		(1)	$	65		$	59						$	948
Interest expense														$	(71	)		(71		)
Administrative expenses and other														(199		)		(199		)
Income before income taxes	$	620		$	204			$	65		$	59		$	(270	)		$	678
Reportable segment margins	14.2		%	6.6		%		4.6		%	8.3		%
Identifiable assets	$	1,238		$	1,603			$	1,089		$	437		$	802			$	5,169
Capital expenditures	51			25				26			12			11				125
Depreciation	47			39				28			10			16				140

(1) Segment profit included $27, $24 and $22 of mark-up on intersegment transfers realized primarily as a result of external sales by the Paint Stores Group during 2012, 2011 and 2010, respectively.

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Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Carrying amount and fair value of debt

The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company's publicly traded debt and non-traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. See Note 7.

	December 31,
	2012				2011				2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Publicly traded debt	$	1,630,056	$	1,706,487	$	632,423	$	703,238	$	632,375	$	662,193
Non-traded debt	5,798		5,600		14,631		14,070		23,826		22,454

Assets and Liabilities Reported at Fair Value on a Recurring Basis

Assets and Liabilities Reported at Fair Value on a Recurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Deferred compensation plan asset (a)	$	19,995	$	13,893	$	6,102
Liabilities:
Deferred compensation plan liability (b)	$	28,627	$	28,627

(a) The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $19,764.

(b) The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.

Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis

Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Trademarks	$	8,928			$	8,928

As a result of the 2012 annual impairment test performed in accordance with the Intangibles Topic of the ASC, trademarks with a carrying value of $13,014 were written down to their calculated fair value of $8,928.

Amortized cost of non-compete covenants and certain intangible property rights

The cost of finite-lived trademarks, non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:

	Useful Life
Finite-lived trademarks	5 years
Non-compete covenants	3 – 5 years
Certain intangible property rights	3 – 20 years

Classes of assets and ranges of annual depreciation rates

The major classes of assets and ranges of annual depreciation rates are:

Buildings	2.5% – 20.0%
Machinery and equipment	5.0% – 20.0%
Furniture and fixtures	10.0% – 33.3%
Automobiles and trucks	10.0% – 33.3%

Company's accrual for product warranty claims

Changes in the Company’s accrual for product warranty claims during 2012, 2011 and 2010, including customer satisfaction settlements during the year, were as follows:

	2012			2011			2010
Balance at January 1	$	22,071		$	23,103		$	22,214
Charges to expense	28,590			29,957			23,092
Settlements	(27,951		)	(30,989		)	(22,203		)
Balance at December 31	$	22,710		$	22,071		$	23,103

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Consolidation

Consolidation. The consolidated financial statements include the accounts of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, “the Company.”) Inter-company accounts and transactions have been eliminated.

Use of estimates

Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those amounts.

Nature of operations

Nature of operations. The Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America, with additional operations in the Caribbean region, Europe and Asia.

Cash flows

Cash flows. Management considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Cash and Cash equivalents

Cash and cash equivalents: The carrying amounts reported for Cash and cash equivalents approximate fair value.

Short-term investments

Short-term investments: The carrying amounts reported for Short-term investments approximate fair value.

Investments in securities

Investments in securities: Investments classified as available-for-sale are carried at market value. See the recurring fair value measurement table on page 49.

Non-traded investments

Non-traded investments: The Company has invested in the U.S. affordable housing and historic renovation real estate markets. These non-traded investments have been identified as variable interest entities. However, because the Company does not have the power to direct the day-to-day operations of the investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary. In accordance with the Consolidation Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the investments are not consolidated. The Company uses the effective yield method to determine the carrying value of the investments. Under the effective yield method, the initial cost of the investments is amortized over the period that the tax credits are recognized.

Short-term borrowings

Short-term borrowings: The carrying amounts reported for Short-term borrowings approximate fair value.

Long-term debt (including current portion): The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

Derivative instruments

Derivative instruments: The Company utilizes derivative instruments as part of its overall financial risk management policy. The Company entered into foreign currency option and forward currency exchange contracts with maturity dates of less than twelve months in 2012, 2011 and 2010, primarily to hedge against value changes in foreign currency. See Note 13.

Fair value measurements

Fair value measurements. The following tables summarize the Company’s assets and liabilities measured on a recurring and non-recurring basis in accordance with the Fair Value Measurements and Disclosures Topic of the ASC:

Assets and Liabilities Reported at Fair Value on a Recurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Deferred compensation plan asset (a)	$	19,995	$	13,893	$	6,102
Liabilities:
Deferred compensation plan liability (b)	$	28,627	$	28,627

(a) The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $19,764.

(b) The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.

Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Trademarks	$	8,928			$	8,928

As a result of the 2012 annual impairment test performed in accordance with the Intangibles Topic of the ASC, trademarks with a carrying value of $13,014 were written down to their calculated fair value of $8,928.

Accounts receivable and allowance for doubtful accounts

Accounts receivable and allowance for doubtful accounts. Accounts receivable were recorded at the time of credit sales net of provisions for sales returns and allowances. The Company recorded an allowance for doubtful accounts of $47,667, $51,747 and $59,310 at December 31, 2012, 2011 and 2010, respectively, to reduce Accounts receivable to their estimated net realizable value. The allowance was based on an analysis of historical bad debts, a review of the aging of Accounts receivable and the current creditworthiness of customers. All provisions for allowances for doubtful collection of accounts are related to the creditworthiness of accounts and are included in Selling, general and administrative expenses.

Reserve for obsolescence

Reserve for obsolescence. The Company recorded a reserve for obsolescence of $88,356, $82,671 and $74,372 at December 31, 2012, 2011 and 2010, respectively, to reduce Inventories to their estimated net realizable value. 

Goodwill

Goodwill. Goodwill represents the cost in excess of fair value of net assets acquired in business combinations accounted for by the purchase method. In accordance with the Impairments Topic of the ASC, goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate potential impairment. See Note 4.

Intangible assets

Intangible assets. Intangible assets include trademarks, non-compete covenants and certain intangible property rights. As required by the Goodwill and Other Intangibles Topic of the ASC, indefinite-lived trademarks are not amortized, but instead are tested annually for impairment, and between annual tests whenever an event occurs or circumstances indicate potential impairment. See Note 4. The cost of finite-lived trademarks, non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:

	Useful Life
Finite-lived trademarks	5 years
Non-compete covenants	3 – 5 years
Certain intangible property rights	3 – 20 years

Impairment of long-lived assets

Impairment of long-lived assets. In accordance with the Property, Plant and Equipment Topic of the ASC, management evaluates the recoverability and estimated remaining lives of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. See Notes 4 and 5.

Property, plant and equipment

Property, plant and equipment. Property, plant and equipment is stated on the basis of cost. Depreciation is provided by the straight-line method. Depreciation and amortization are included in the appropriate Cost of goods sold or Selling, general and administrative expense caption on the Statements of Consolidated Income. Included in Property, plant and

equipment are leasehold improvements. The major classes of assets and ranges of annual depreciation rates are:

Buildings	2.5% – 20.0%
Machinery and equipment	5.0% – 20.0%
Furniture and fixtures	10.0% – 33.3%
Automobiles and trucks	10.0% – 33.3%

Standby letters of credit

Standby letters of credit. The Company occasionally enters into standby letter of credit agreements to guarantee various operating activities. These agreements provide credit availability to the various beneficiaries if certain contractual events occur.

Product warranties

Product warranties. The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience and included an amount in Other accruals. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary.

Environmental matters

Environmental matters. Capital expenditures for ongoing environmental compliance measures were recorded in Property, plant and equipment, and related expenses were included in the normal operating expenses of conducting business. The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrued for environmental-related activities for which commitments or clean-up plans have been developed and when such costs could be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms. See Notes 8 and 13.

Employee Stock Purchase and Savings Plan and preferred stock

Employee Stock Purchase and Savings Plan and preferred stock. The Company accounts for the Employee Stock Purchase and Savings Plan (ESOP) in accordance with the Employee Stock Ownership Plans Subtopic of the Compensation – Stock Ownership Topic of the ASC. The Company recognized compensation expense for amounts contributed to the ESOP, and the ESOP used dividends on unallocated preferred shares to service debt. Unallocated preferred shares held by the ESOP were not considered outstanding in calculating earnings per share of the Company. See Note 11.

Defined benefit pension and other postretirement benefit plans

Defined benefit pension and other postretirement benefit plans. The Company accounts for its defined benefit pension and other postretirement benefit plans in accordance with the Retirement Benefits Topic of the ASC, which requires the recognition of a plan’s funded status as an asset for overfunded plans and as a liability for unfunded or underfunded plans. See Note 6.

Stock-based compensation

Stock-based compensation. The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. See Note 12.

Foreign currency translation

Foreign currency translation. All consolidated non-highly inflationary foreign operations use the local currency of the country of operation as the functional currency and translated the local currency asset and liability accounts at year-end exchange rates while income and expense accounts were translated at average exchange rates. The resulting translation adjustments were included in Cumulative other comprehensive loss, a component of Shareholders’ equity.

Cumulative other comprehensive loss

Cumulative other comprehensive loss. At December 31, 2012, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $204,195, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $166,595 and unrealized net gains on marketable equity securities of $401. At December 31, 2011 and 2010, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $196,792 and $131,160, respectively, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $171,376 and $148,006, respectively, and unrealized gains on marketable equity securities and derivative instruments used in cash flow hedges of $290 and $845, respectively.

Revenue recognition

Revenue recognition. All revenues were recognized when products were shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue was reasonably assured at the time of recognition.

Customer and vendor consideration

Customer and vendor consideration. The Company offered certain customers rebate and sales incentive programs which were classified as reductions in Net sales. Such programs were in the form of volume rebates, rebates that constituted a

percentage of sales or rebates for attaining certain sales goals. The Company received consideration from certain suppliers of raw materials in the form of volume rebates or rebates that constituted a percentage of purchases. These rebates were recognized on an accrual basis by the Company as a reduction of the purchase price of the raw materials and a subsequent reduction of Cost of goods sold when the related product was sold.

Costs of goods sold

Costs of goods sold. Included in Costs of goods sold were costs for materials, manufacturing, distribution and related support. Distribution costs included all expenses related to the distribution of products including inbound freight charges, purchase and receiving costs, warehousing costs, internal transfer costs and all costs incurred to ship products. Also included in Costs of goods sold were total technical expenditures, which included research and development costs, quality control, product formulation expenditures and other similar items.

Selling, general and administrative expenses

Selling, general and administrative expenses. Selling costs included advertising expenses, marketing costs, employee and store costs and sales commissions. The cost of advertising was expensed as incurred. The Company incurred $247,469, $227,303 and $217,637 in advertising costs during 2012, 2011 and 2010, respectively. General and administrative expenses included human resources, legal, finance and other support and administrative functions.

Earnings per share

Earnings per share. Shares of preferred stock held in an unallocated account of the ESOP (see Note 11) and common stock held in a revocable trust (see Note 10) were not considered outstanding shares for basic or diluted income per common share calculations. All references to “shares” or “per share” information throughout this report relate to common shares and are stated on a diluted per common share basis, unless otherwise indicated. Basic and diluted net income per common share were calculated using the two-class method in accordance with the Earnings Per Common Share Topic of the ASC. Basic net income per common share amounts were computed based on the weighted-average number of common shares outstanding during the year. Diluted net income per common share amounts were computed based on the weighted-average number of common shares outstanding plus all dilutive securities potentially outstanding during the year. See Note 15.

Adoption of ASU No. 2011-2, 2011-5 and 2011-12

Impact of recently issued accounting standards. Effective January 1, 2012, the Company adopted Accounting Standards Update (ASU) No. 2011-5 and 2011-12, which amend the Comprehensive Income Topic of the ASC. The updated guidance requires the components of income and other comprehensive income to be presented in a single continuous statement or two consecutive statements in annual periods. The change in presentation did not have an impact on the Company's results of operations, financial condition or liquidity.

In July 2012, the FASB issued ASU No. 2012-2, which amends the Intangibles - Goodwill and Other Topic of the ASC. The updated standard gives companies the option to perform a qualitative assessment to determine whether indefinite-lived intangible assets are impaired. If the qualitative analysis shows that it is unlikely that an indefinite-lived intangible asset is impaired, then the annual fair value calculation does not need to be performed. However, if it is not unlikely that an indefinite-lived intangible asset is impaired, then the annual fair value calculation must still be performed. ASU No. 2012-2 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company will consider performing the qualitative assessment as part of its future annual impairment tests for indefinite-lived intangible assets. ASU No. 2012-2 is similar to ASU No. 2011-8, which was adopted by the Company in 2012, and amends the Intangibles - Goodwill and Other Topic of the ASC to give companies the option to perform a qualitative assessment that can potentially alleviate the need to perform the quantitative two-step test. These standards may affect the Company's disclosures, but they will not affect its results of operations, financial condition or liquidity.

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Goodwill, Intangible and Long-Lived Assets (Details 2) (USD $) In Thousands, unless otherwise specified	12 Months Ended																						12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 Acquisitions of Geocel and Pulanna [Member]	Dec. 31, 2012 Acquisitions of Geocel and Pulanna [Member] Minimum [Member]	Dec. 31, 2012 Acquisitions of Geocel and Pulanna [Member] Maximum [Member]	Dec. 31, 2011 Acquisition of Leigh Paints [Member]	Dec. 31, 2011 Acquisition of Leigh Paints [Member] Minimum [Member]	Dec. 31, 2011 Acquisition of Leigh Paints [Member] Maximum [Member]	Dec. 31, 2010 Acquisitions of Sayerlack, Acroma and Pinturas Condor [Member]	Dec. 31, 2010 Acquisitions of Sayerlack, Acroma and Pinturas Condor [Member] Minimum [Member]	Dec. 31, 2010 Acquisitions of Sayerlack, Acroma and Pinturas Condor [Member] Maximum [Member]	Dec. 31, 2012 Customer Relationships [Member] Acquisitions of Geocel and Pulanna [Member]	Dec. 31, 2011 Customer Relationships [Member] Acquisition of Leigh Paints [Member]	Dec. 31, 2010 Customer Relationships [Member] Acquisitions of Sayerlack, Acroma and Pinturas Condor [Member]	Dec. 31, 2012 Finite-lived Trademarks [Member] Acquisitions of Geocel and Pulanna [Member]	Dec. 31, 2011 Finite-lived Trademarks [Member] Acquisition of Leigh Paints [Member]	Dec. 31, 2012 Noncompete Agreements [Member] Acquisitions of Geocel and Pulanna [Member]	Dec. 31, 2011 Developed Technology Rights [Member] Acquisition of Leigh Paints [Member]	Sep. 30, 2012 Paint Stores Group [Member]	Sep. 30, 2011 Paint Stores Group [Member]	Sep. 30, 2010 Paint Stores Group [Member]	Dec. 31, 2012 Global Finishes Group [Member]	Dec. 31, 2011 Global Finishes Group [Member]	Dec. 31, 2010 Global Finishes Group [Member]	Sep. 30, 2012 Global Finishes Group [Member]	Sep. 30, 2011 Global Finishes Group [Member]
Goodwill, Intangible and Long-Lived Assets (Textual) [Abstract]
Goodwill Recognized	$ 42,064	$ 5,039	$ 79,909	$ 42,064			$ 5,039			$ 79,909													$ 24,707	$ 5,039	$ 70,594
Trademark				15,899						18,007
Finite-lived Intangible Assets													27,487	1,918	35,886	13,000	2,125	9,720	4,794
Weighted Average useful life of finite-lived intangible assets					6 years	15 years		5 years	10 years		15 years	19 years
Reduction in carrying value of finite-lived intangible assets			4,364
Reduction in carrying value of property plant and equipment			2,177
Trademark impairments																				3,400	4,669	120				686	823
Additional Goodwill Intangible and Long Lived Assets (Textual) [Abstract]
Amortization of finite-lived Intangible assets for the year 2013	33,279
Amortization of finite-lived Intangible assets for the year 2014	29,840
Amortization of finite-lived Intangible assets for the year 2015	25,866
Amortization of finite-lived Intangible assets for the year 2016	22,145
Amortization of finite-lived Intangible assets for the year 2017	$ 18,003

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Significant Accounting Policies - Non-Traded Investments (Details Textual) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Non Traded Investments (Textual) [Abstract]
Carrying amount of the investments, included in other assets	$ 223,701	$ 232,366	$ 198,023
Liability for estimated future capital contributions to the investments	$ 218,688	$ 235,355	$ 194,807

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2012

Business Combinations [Abstract]

Summary of pro-forma consolidated financial information

The following unaudited pro-forma summary presents consolidated financial information as if Pulanna, Geocel and Leighs Paints had been acquired at the beginning of 2011. The unaudited pro-forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisitions taken place on January 1, 2011 or the future results of operations of the combined companies under ownership and operation of the Company.

	2012		2011
Net sales	$	9,589,229	$	8,888,661
Net income	641,090		448,751
Net income per common share:
Basic	6.25		4.29
Diluted	6.12		4.20

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Inventories (Tables)

12 Months Ended

Dec. 31, 2012

Inventory Disclosure [Abstract]

Inventories

	2012			2011			2010
Percentage of total inventories on LIFO	75		%	77		%	76		%
Excess of FIFO over LIFO	$	357,303		$	378,986		$	277,164
Increase (decrease) in net income due to LIFO	13,365			(62,636		)	(16,394		)
Increase (decrease) in net income per common share due to LIFO	.13			(.59		)	(.15		)

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Statements of Consolidated Shareholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Preferred Stock	Unearned ESOP Compen-sation	Other Capital		Retained Earnings	Treasury Stock	Cumulative Other Comprehensive Loss
Beginning Balance at Dec. 31, 2009	$ 1,490,950	$ 228,647	$ 216,753	$ (216,753)	$ 1,068,963		$ 4,518,428	$ (4,007,633)	$ (317,455)
Shareholders' Equity [Roll Forward]
Net income	462,485						462,485
Other comprehensive (loss) income	39,134								39,134
Treasury stock purchased	(375,677)							(375,677)
Income tax effect of ESOP	(7,515)				(7,515)
Stock options exercised	94,535	2,351			99,857			(7,673)
Income tax effect of stock options exercised	19,676				19,676
Restricted stock and stock option grants (net activity)	42,276	348			41,928
Cash dividends -- $1.56, $1.46 and $1.44 per common share in December 31, 2012, 2011 and 2010, respectively	(156,424)						(156,424)
Ending Balance at Dec. 31, 2010	1,609,440	231,346	216,753	(216,753)	1,222,909		4,824,489	(4,390,983)	(278,321)
Shareholders' Equity [Roll Forward]
Net income	441,860						441,860
Other comprehensive (loss) income	(89,557)								(89,557)
Treasury stock purchased	(367,372)							(367,372)
Treasury stock retired		(125,426)					(4,356,465)	4,481,891
Redemption of preferred stock			(56,480)	56,480
Income tax effect of ESOP	(54,420)				(54,420)	[1]
Stock options exercised	69,346	1,234			68,302			(190)
Income tax effect of stock options exercised	12,958				12,958
Restricted stock and stock option grants (net activity)	48,176	300			47,876
Cash dividends -- $1.56, $1.46 and $1.44 per common share in December 31, 2012, 2011 and 2010, respectively	(153,512)						(153,512)
Ending Balance at Dec. 31, 2011	1,516,919	107,454	160,273	(160,273)	1,297,625		756,372	(276,654)	(367,878)
Shareholders' Equity [Roll Forward]
Net income	631,034						631,034
Other comprehensive (loss) income	(2,511)								(2,511)
Treasury stock purchased	(557,766)							(557,766)
Redemption of preferred stock			(59,187)	59,187
Stock options exercised	205,861	3,867			217,259			(15,265)
Income tax effect of stock options exercised	104,858				104,858
Restricted stock and stock option grants (net activity)	54,348	302			54,046
Cash dividends -- $1.56, $1.46 and $1.44 per common share in December 31, 2012, 2011 and 2010, respectively	(160,939)						(160,939)
Ending Balance at Dec. 31, 2012	$ 1,791,804	$ 111,623	$ 101,086	$ (101,086)	$ 1,673,788		$ 1,226,467	$ (849,685)	$ (370,389)

[1] Includes $51,209 reduction in Other capital related to IRS Settlement. See Note 14 for more information on the IRS Settlement.

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Goodwill, Intangible and Long-Lived Assets (Tables)

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Carrying value of goodwill by reportable segment

A summary of changes in the Company’s carrying value of goodwill by reportable segment is as follows:

Goodwill	Paint Stores Group			Consumer Group			Global Finishes Group			Latin America Coatings Group			Consolidated Totals
Balance at January 1, 2010 (a)	$	285,445		$	686,612		$	42,397		$	371		$	1,014,825
Acquisitions							70,594			9,315			79,909
Currency and other adjustments	1,299			2,776			2,728			921			7,724
Balance at December 31, 2010 (a)	286,744			689,388			115,719			10,607			1,102,458
Acquisitions							5,039						5,039
Currency and other adjustments	254			(109		)	(408		)	774			511
Balance at December 31, 2011 (a)	286,998			689,279			120,350			11,381			1,108,008
Acquisitions				17,357			24,707						42,064
Currency and other adjustments	(214		)	(344		)	7,230			(739		)	5,933
Balance at December 31, 2012 (a)	$	286,784		$	706,292		$	152,287		$	10,642		$	1,156,005

(a) Net of accumulated impairment losses of $8,904 ($8,113 in the Consumer Group and $791 in the Global Finishes Group).

Carrying value of intangible assets

A summary of the Company’s carrying value of intangible assets is as follows: 

	Finite-lived intangible assets									Trademarks with indefinite lives		Total intangible assets
	Software			All other			Subtotal
December 31, 2012
Weighted-average amortization period	8 years			12 years			11 years
Gross	$	107,779		$	337,089		$	444,868
Accumulated amortization	(66,106		)	(193,959		)	(260,065		)
Net value	$	41,673		$	143,130		$	184,803		$	162,750	$	347,553
December 31, 2011
Weighted-average amortization period	7 years			13 years			11 years
Gross	$	109,401		$	274,086		$	383,487
Accumulated amortization	(60,030		)	(177,706		)	(237,736		)
Net value	$	49,371		$	96,380		$	145,751		$	160,122	$	305,873
December 31, 2010
Weighted-average amortization period	8 years			13 years			11 years
Gross	$	107,141		$	254,462		$	361,603
Accumulated amortization	(57,480		)	(171,153		)	(228,633		)
Net value	$	49,661		$	83,309		$	132,970		$	187,534	$	320,504

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Summary of Quarterly Results of Operations (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Selected Quarterly Financial Information [Abstract]
Net sales	$ 2,221,870	$ 2,603,226	$ 2,573,022	$ 2,136,344	$ 2,070,442	$ 2,484,920	$ 2,354,751	$ 1,855,586	$ 9,534,462	$ 8,765,699	$ 7,776,424
Gross profit	995,508	1,150,282	1,150,597	909,839	886,100	1,038,299	1,022,755	797,408	4,206,226	3,744,562	3,481,078
Net income	68,052	234,953	227,813	100,216	14,552	179,877	179,115	68,316	631,034	441,860	462,485
Net income per common share - basic (in dollars per share)	$ 0.66	$ 2.29	$ 2.23	$ 0.97	$ 0.14	$ 1.74	$ 1.69	$ 0.64	$ 6.15	$ 4.22	$ 4.28
Net income per common share - diluted (in dollars per share)	$ 0.65	$ 2.24	$ 2.17	$ 0.95	$ 0.14	$ 1.71	$ 1.66	$ 0.63	$ 6.02	$ 4.14	$ 4.21
Summary of Quarterly Results of Operations (Textual) [Abstract]
Decrease in fourth quarter net income	49,163				(74,982)
Decrease in fourth quarter net income, per share	$ 0.47				$ (0.71)
Increase in gross profit	28,724				25,123
Increase in gross profit, per share	$ 0.17				$ 0.15
Annual physical inventory adjustments in fourth quarter	29,488				23,394
Decrease in Selling, general and administrative expenses	$ 5,645
Decrease in Selling, general and administrative expenses per share	$ 0.03

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Net Income Per Common Share (Tables)

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

Computation of net income per common share

	2012			2011			2010
Basic
Average common shares outstanding	101,714,901			103,471,323			107,021,624
Net income	$	631,034		$	441,860		$	462,485
Less net income allocated to unvested restricted shares	(5,114		)	(4,825		)	(4,817		)
Net income allocated to common shares	$	625,920		$	437,035		$	457,668
Net income per common share	$	6.15		$	4.22		$	4.28
Diluted
Average common shares outstanding	101,714,901			103,471,323			107,021,624
Stock options and other contingently issuable shares (a)	2,215,528			2,200,650			1,763,893
Average common shares outstanding assuming dilution	103,930,429			105,671,973			108,785,517
Net income	$	631,034		$	441,860		$	462,485
Less net income allocated to unvested restricted shares assuming dilution	(5,008		)	(4,756		)	(4,749		)
Net income allocated to common shares assuming dilution	$	626,026		$	437,104		$	457,736
Net income per common share	$	6.02		$	4.14		$	4.21

(a) Stock options and other contingently issuable shares excludes 1,047,734, 101,260 and 1,544,620 shares at December 31, 2012, 2011 and 2010, respectively, due to their anti-dilutive effect.

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Inventories (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Inventories
Percentage of total inventories on LIFO	75.00%	77.00%	76.00%
Excess of FIFO over LIFO	$ 357,303	$ 378,986	$ 277,164
Increase (decrease) in net income due to LIFO	13,365	(62,636)	(16,394)
Increase (decrease) in net income per common share due to LIFO	$ 0.13	$ (0.59)	$ (0.15)
Impact on Net income of liquidations	$ (160)	$ 1,067

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Stock Purchase Plan and Preferred Stock (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	Dec. 31, 2012 vote employee	Dec. 31, 2012 vote employee	Dec. 31, 2011	Dec. 31, 2010	Jun. 30, 2009	Aug. 01, 2006
Stock Purchase Plan and Preferred Stock (Textual) [Abstract]
Employees contributed to company's ESOP	28,256	28,256
Participants contribution on a pretax basis only of their annual compensation, maximum	20.00%	20.00%
Company matched eligible employee contributions to employee stock purchase plan ESOP prior to July 1, 2009		Prior to July 1, 2009, the Company matched one hundred percent of all contributions up to six percent of eligible employee contributions.
Percentage of matching contribution to ESOP Plan by employer		100.00%
Maximum percentage of eligible contribution plan up to which employer contributes					6.00%
Company matched eligible employee contributions to employee stock purchase plan ESOP effective July 1, 2009		Match to one-hundred percent on the first three percent of eligible employee contributions and fifty percent on the next two percent of eligible contributions.
Percentage of amended matching contribution to ESOP plan by Employer up to First Three Percentage					100.00%
Percentage of amended eligible contribution plan up to which employer contribute first					3.00%
Percentage of amended matching contribution to ESOP plan by Employer up to Next Two Percentage					50.00%
Percentage of amended eligible contribution plan up to which employer contribute second					2.00%
Company contributions to ESOP on behalf of participating employees representing amounts authorized by employees to be withheld from their earnings on pre-tax basis		$ 88,363	$ 79,266	$ 70,601
Company's matching contributions to the ESOP		142,791	48,816	37,894
DOL settlement	80,000	80,000
Employee stock ownership plan common stock shares held in ESOP	14,616,378	14,616,378
Percentage of total voting shares outstanding held by the ESOP	14.20%	14.20%
Employee stock ownership plan ESOP series 2 preferred stock contributed to ESOP						500,000
Cumulative quarterly dividends per share on convertible serial preferred stock						$ 11.25
Value of Series 2 Preferred stock issued to ESOP						500,000
Amount borrowed for acquisition of Series 2 Preferred stock						500,000
Interest rate on amount borrowed for acquisition of Series 2 Preferred stock						5.50%
Term for payment of borrowed amount for acquisition of Series 2 Preferred stock in equal quarterly payments		10 years
Number of votes for each Series 2 Preferred share under ESOP	1	1
Allocated or committed to be released shares of Series 2 Preferred stock outstanding	0	0	0	0
Redeemed share of Series 2 Preferred stock		59,187	56,480
Fair value of Series 2 Preferred stock	$ 210,773	$ 210,773	$ 328,495	$ 411,655

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Statements of Consolidated Income (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Income Statement [Abstract]
Net sales	$ 9,534,462		$ 8,765,699		$ 7,776,424
Cost of goods sold	5,328,236		5,021,137		4,295,346
Gross profit (1)	4,206,226		3,744,562		3,481,078
Percent to net sales	44.10%		42.70%		44.80%
Selling, general and administrative expenses (1)	3,259,648		2,960,814		2,728,122
Percent to net sales	34.20%		33.80%		35.10%
Other general expense - net	5,248		2,731		3,803
Impairment of trademarks	4,086		5,492		4,484
Interest expense	42,788		42,497		70,595
Interest and net investment income	(2,913)		(3,711)		(2,929)
Other income - net	(9,940)		(4,809)		(781)
Income before income taxes	907,309		741,548		677,784
Income taxes (1), (2)	276,275	[1]	299,688	[1]	215,299	[1]
Net income	$ 631,034		$ 441,860		$ 462,485
Net income per common share:
Basic (in dollars per share)	$ 6.15		$ 4.22		$ 4.28
Diluted (in dollars per share)	$ 6.02		$ 4.14		$ 4.21

[1] ncludes IRS Settlement of $74,982, or approximately $.70 per share, in the Year ended December 31, 2011. See Note 14 for more information on the IRS Settlement.

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Significant Accounting Policies - Long-term Debt (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Publicly Traded Debt [Member]
Financial Instruments
Carrying Amount	$ 1,630,056	$ 632,423	$ 632,375
Fair Value	1,706,487	703,238	662,193
Non-Traded Debt [Member]
Financial Instruments
Carrying Amount	5,798	14,631	23,826
Fair Value	$ 5,600	$ 14,070	$ 22,454

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Statement of Financial Position [Abstract]
Common stock, par value	$ 1	$ 1	$ 1
Common stock, shares outstanding	103,270,067	103,854,234	107,020,728
Preferred stock, par value	$ 0	$ 0	$ 0
Preferred stock, shares outstanding	101,086	160,273	216,753

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Pension Health Care and Postretirement Benefits Other Than Pensions (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Health Care Plans [Abstract]
Number of active employees entitled to receive benefits under health care plans	18,609	18,189	17,841
Cost of benefits includes claims incurred and claims incurred but not reported under health care plans	$ 163,011,000	$ 155,501,000	$ 144,927,000
Defined Contribution Pension Plans [Abstract]
Number of Domestic salaried defined benefit pension plan	1
Number of Domestic hourly defined benefit pension plan	1
Number of Foreign defined benefit pension plans	15
Fair value of plan assets	836,576,000	732,523,000	700,473,000
Number of foreign defined benefit pension plans unfunded or underfunded	12
Expected Cash Payments - Net 2013	17,911,000
Expected Cash Payments - Net 2014	18,967,000
Expected Cash Payments - Net 2015	19,774,000
Expected Cash Payments - Net 2016	20,313,000
Expected Cash Payments - Net 2017	22,677,000
Expected Cash Payments - Net 2018 through 2022	112,597,000
Target allocations for plan assets in equity securities, minimum	45.00%
Target allocations for plan assets in equity securities, maximum	65.00%
Target allocation percentage of assets fixed income securities, minimum	30.00%
Target allocation percentage of assets fixed income securities, maximum	40.00%
Retired employees entitled to receive postretirement benefits	4,402	4,436	4,768
Defined benefit plan ultimate health care cost trend rate and Prescription drug cost increase rate	5.00%
Year in which health care cost trend rate reaches ultimate trend rate	2019
Reduction of the accumulated postretirement benefit obligation for benefits attributed to past service due to amendment of medicare	21,400,000
Reduction in net periodic benefit cost	5,712,000	7,073,000	4,170,000
Prescription drug benefit effect of subsidy on interest cost	434,000	242,000	1,973,000
Prescription drug benefit effect of subsidy on amortization of actuarial experience gain	5,278,000	6,831,000	1,852,000
Prescription drug benefit effect of subsidy on service cost			345,000
Increase in income taxes due to elimination of tax deduction previously allowed for the Medicare Part D subsidy			11,400,000
Reduction in basic earnings per share due to elimination of tax deduction previously allowed for the medicare Part D subsidy			$ 0.11
Reduction in diluted earnings per share due to elimination of tax deduction previously allowed for the medicare part D subsidy			$ 0.10
Leighs Paints and Acroma [Member]
Defined Contribution Pension Plans [Abstract]
Number of European defined benefit pension plans	2
Domestic Defined Benefit Pension Plans [Member]
Defined Contribution Pension Plans [Abstract]
Contributions by Company	25,147,000	23,344,000	22,512,000
Projected benefit obligation	466,827,000	410,029,000	390,257,000	339,275,000
Fair value of plan assets	703,563,000	614,463,000	634,725,000	577,047,000
Equity investment in domestic defined benefit pension plan assets, shares	300,000
Market value of common shares invested in defined benefit pension plan assets	46,146,000
Share equity investments in the domestic defined benefit pension plan assets	6.60%
Dividends received on the common stock	1,334,000
Foreign Defined Benefit Pension Plans [Member]
Defined Contribution Pension Plans [Abstract]
Contributions by Company	4,621,000	3,807,000	3,968,000
Projected benefit obligation	168,758,000	141,465,000	85,936,000	75,175,000
Fair value of plan assets	133,013,000	118,060,000	65,748,000	55,870,000
Increase in combined projected benefit obligations primarily due to changes in plan assumptions	27,294,000
Domestic Salaried Plan Between January 1, 2002 and September 30, 2011 [Member]
Defined Contribution Pension Plans [Abstract]
Threshold service requirement for defined benefit pension plan eligibility	6
Domestic Salaried Plan Between January 1, 2002 and December 31, 2004 [Member]
Defined Contribution Pension Plans [Abstract]
Contribution credits as percent of eligible employee's salary	6.00%
Domestic salaried defined benefit pension plan [Member]
Defined Contribution Pension Plans [Abstract]
Projected benefit obligation	313,964,000	269,314	261,996
Fair value of plan assets	559,552,000	487,990	502,707
Excess/deficiency of plan assets	(245,588,000)	(218,676)	(240,711)
Defined Benefit Pension [Member]
Defined Contribution Pension Plans [Abstract]
Description of Defined Contribution Pension and Other Postretirement Plans	All employees who became participants on or after January 1, 2002 and before January 1, 2005 were credited with certain contribution credits equivalent to six percent of their salary. All employees who became participants on or after January 1, 2005 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised, and all employees who become participants on or after January 1, 2002 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula.
Expected Cash Payments - Net 2013	41,784,000
Expected Cash Payments - Net 2014	42,435,000
Expected Cash Payments - Net 2015	43,457,000
Expected Cash Payments - Net 2016	43,631,000
Expected Cash Payments - Net 2017	43,992,000
Expected Cash Payments - Net 2018 through 2022	225,564,000
Amortization of actuarial losses	15,111,000
Amortization of prior service credit	(310,000)
Domestic hourly defined benefit pension plan [Member]
Defined Contribution Pension Plans [Abstract]
Projected benefit obligation	152,863,000	140,715	128,261
Fair value of plan assets	144,011,000	126,473	132,018
Excess/deficiency of plan assets	8,852,000	(14,242)	(3,757)
Underfunded seven foreign defined benefit pension plan [Member]
Defined Contribution Pension Plans [Abstract]
Projected benefit obligation	105,045,000
Fair value of plan assets	65,026,000
Excess/deficiency of plan assets	40,019,000
Postretirement Benefits Other than Pensions [Member]
Defined Contribution Pension Plans [Abstract]
Projected benefit obligation	338,134,000	316,795,000	315,572,000	300,526,000
Amortization of actuarial losses	3,934,000
Amortization of prior service credit	$ (328,000)
Defined Contribution Pension [Member]
Defined Contribution Pension Plans [Abstract]
Description of Defined Contribution Pension and Other Postretirement Plans	Prior to July 1, 2009, the contribution was based on six percent of compensation for covered employees. Effective July 1, 2009, the contribution percentage was changed to a range from two percent to seven percent based on an age and service formula
Minimum [Member] | Domestic Salaried Plan After December 31, 2004 [Member]
Defined Contribution Pension Plans [Abstract]
Contribution credits as percent of eligible employee's salary	2.00%
Minimum [Member] | Revised Domestic Salaried Plan After December 31, 2001 [Member]
Defined Contribution Pension Plans [Abstract]
Contribution credits as percent of eligible employee's salary	2.00%
Minimum [Member] | Defined Contribution Pension After June 30, 2009 [Member]
Defined Contribution Pension Plans [Abstract]
Contributions by Company, percentage	2.00%
Maximum [Member] | Domestic Salaried Plan After December 31, 2004 [Member]
Defined Contribution Pension Plans [Abstract]
Contribution credits as percent of eligible employee's salary	7.00%
Maximum [Member] | Revised Domestic Salaried Plan After December 31, 2001 [Member]
Defined Contribution Pension Plans [Abstract]
Contribution credits as percent of eligible employee's salary	7.00%
Maximum [Member] | Defined Contribution Pension After June 30, 2009 [Member]
Defined Contribution Pension Plans [Abstract]
Contributions by Company, percentage	7.00%

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Debt (Tables)

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

Long-term Debt

Long-term debt

	Due Date	2012		2011		2010
1.35% Senior Notes	2017	$	699,091
3.125% Senior Notes	2014	499,912		$	499,867	$	499,822
4.00% Senior Notes	2042	298,493
7.375% Debentures	2027	129,060		129,056		129,053
7.45% Debentures	2097	3,500		3,500		3,500
2.00% to 2.02% Promissory Notes	Through 2023	2,109		6,808		15,951
		$	1,632,165	$	639,231	$	648,326

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Pension Health Care And Postretirement Benefits Other Than Pensions (Details 5) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Significant effect on amounts reported for service and interest rate component and postretirement health care benefit obligation
Effect on total of service and interest cost components, One-Percentage-Point, Increase	$ 117
Effect on total of service and interest cost components, One-Percentage-Point, Decrease	(124)
Effect on the postretirement benefit obligation One-Percentage-Point, Increase	2,938
Effect on the postretirement benefit obligation One-Percentage-Point, Decrease	(3,039)
Retiree health care benefit cash payments
Retiree Health Care Benefits, 2013	20,087
Medicare Prescription Reimbursement, 2013	(2,176)
Expected Cash Payments - Net 2013	17,911
Retiree Health Care Benefits, 2014	21,324
Medicare Prescription Reimbursement, 2014	(2,357)
Expected Cash Payments - Net 2014	18,967
Retiree Health Care Benefits, 2015	22,305
Medicare Prescription Reimbursement, 2015	(2,531)
Expected Cash Payments - Net 2015	19,774
Retiree Health Care Benefits, 2016	23,011
Medicare Prescription Reimbursement, 2016	(2,698)
Expected Cash Payments - Net 2016	20,313
Retiree Health Care Benefits, 2017	23,357
Medicare Prescription Reimbursement, 2017	(680)
Expected Cash Payments - Net 2017	22,677
Retiree Health Care Benefits, 2018 through 2022	114,784
Medicare Prescription Reimbursement, 2018 through 2022	(2,187)
Expected Cash Payments - Net 2018 through 2022	112,597
Retiree Health Care Benefits	224,868
Medicare Prescription Reimbursement	(12,629)
Expected Benefit Cash Payments	$ 212,239

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Other

12 Months Ended

Dec. 31, 2012

Other Income and Expenses [Abstract]

OTHER

OTHER

Other general expense - net. Included in Other general expense - net were the following:

	2012			2011			2010
Provisions for environmental matters - net	$	6,736		$	9,100		$	7,089
Loss (gain) on disposition of assets	3,454			(5,469		)	2,720
Net income of exit or disposal activities	(4,942		)	(900		)	(6,006		)
Total	$	5,248		$	2,731		$	3,803

Provisions for environmental matters–net represent initial provisions for site-specific estimated costs of environmental investigation or remediation and increases or decreases to environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Environmental-related accruals are not recorded net of insurance proceeds in accordance with the Offsetting Subtopic of the Balance Sheet Topic of the ASC. See Note 8 for further details on the Company’s environmental-related activities.

The loss (gain) on disposition of assets represents net realized gains and losses associated with the disposal of property, plant and equipment and intangible assets previously used in the conduct of the primary business of the Company.

The net income of exit or disposal activities includes changes to accrued qualified exit costs as information becomes available upon which more accurate amounts can be reasonably estimated, initial impairments of carrying value and additional impairments for subsequent reductions in estimated fair value of property, plant and equipment held for disposal. See Note 5 for further details on the Company’s exit or disposal activities. 

Other income - net. Included in Other income - net were the following:

	2012			2011			2010
Dividend and royalty income	$	(4,666	)	$	(4,963	)	$	(3,857	)
Net expense from financing activities	9,220			8,023			9,256
Foreign currency transaction related (gains) losses	(3,071		)	4,748			22
Other income	(21,074		)	(22,167		)	(14,059		)
Other expense	9,651			9,550			7,857
Total	$	(9,940	)	$	(4,809	)	$	(781	)

The Net expense from financing activities includes the net expense relating to changes in the Company’s financing fees.

Foreign currency transaction related (gains) losses represent net realized (gains) losses on U.S. dollar-denominated liabilities of foreign subsidiaries and net realized and unrealized (gains) losses from foreign currency option and forward contracts. There were no foreign currency option and forward contracts outstanding at December 31, 2012, 2011 and 2010.

Other income and Other expense included items of revenue, gains, expenses and losses that were unrelated to the primary business purpose of the Company. There were no items within Other income or Other expense that were individually significant.

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Capital Stock (Tables)

12 Months Ended

Dec. 31, 2012

Equity [Abstract]

Capital Stock

	Common Shares in Treasury		Common Shares Outstanding
Balance at January 1, 2010	119,209,669		109,436,869
Shares tendered as payment for option rights exercised	15,752		(15,752	)
Shares issued for exercise of option rights			2,436,639
Shares tendered in connection with grants of restricted stock	99,441		(99,441	)
Net shares issued for grants of restricted stock			262,413
Treasury stock purchased	5,000,000		(5,000,000	)
Balance at December 31, 2010	124,324,862		107,020,728
Shares tendered as payment for option rights exercised	2,274		(2,274	)
Shares issued for exercise of option rights			1,480,058
Net shares issued for grants of restricted stock			55,722
Treasury stock purchased	4,700,000		(4,700,000	)
Treasury stock retired	(125,425,977	)
Balance at December 31, 2011	3,601,159		103,854,234
Shares tendered as payment for option rights exercised	7,766		(7,766	)
Shares issued for exercise of option rights			4,140,822
Shares tendered in connection with grants of restricted stock	143,979		(143,979	)
Net shares issued for grants of restricted stock			26,756
Treasury stock purchased	4,600,000		(4,600,000	)
Balance at December 31, 2012	8,352,904		103,270,067

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Net Income Per Common Share

12 Months Ended

Dec. 31, 2012

Earnings Per Share [Abstract]

NET INCOME PER COMMON SHARE

NET INCOME PER COMMON SHARE

	2012			2011			2010
Basic
Average common shares outstanding	101,714,901			103,471,323			107,021,624
Net income	$	631,034		$	441,860		$	462,485
Less net income allocated to unvested restricted shares	(5,114		)	(4,825		)	(4,817		)
Net income allocated to common shares	$	625,920		$	437,035		$	457,668
Net income per common share	$	6.15		$	4.22		$	4.28
Diluted
Average common shares outstanding	101,714,901			103,471,323			107,021,624
Stock options and other contingently issuable shares (a)	2,215,528			2,200,650			1,763,893
Average common shares outstanding assuming dilution	103,930,429			105,671,973			108,785,517
Net income	$	631,034		$	441,860		$	462,485
Less net income allocated to unvested restricted shares assuming dilution	(5,008		)	(4,756		)	(4,749		)
Net income allocated to common shares assuming dilution	$	626,026		$	437,104		$	457,736
Net income per common share	$	6.02		$	4.14		$	4.21

(a) Stock options and other contingently issuable shares excludes 1,047,734, 101,260 and 1,544,620 shares at December 31, 2012, 2011 and 2010, respectively, due to their anti-dilutive effect.

The Company has two classes of participating securities: common shares and restricted shares, representing 99% and 1% of outstanding shares, respectively. The restricted shares are shares of unvested restricted stock granted under the Company’s restricted stock award program. Unvested restricted shares granted prior to April 21, 2010 received non-forfeitable dividends. Accordingly, the shares are considered a participating security and the two-class method of calculating basic and diluted earnings per share is required. Effective April 21, 2010, the restricted stock award program was revised and dividends on performance-based restricted shares granted after this date are deferred and payment is contingent upon the awards vesting. Only the time-based restricted shares, which continue to receive non-forfeitable dividends, are considered a participating security. Basic and diluted earnings per share are calculated using the two-class method in accordance with the Earnings Per Share Topic of the ASC.

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Debt (Details Textual 1)	1 Months Ended	0 Months Ended	1 Months Ended										12 Months Ended						3 Months Ended
	Dec. 10, 2012	May 07, 2012	Feb. 27, 2012	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2012 Domestic Commercial Paper Program [Member] USD ($)	Dec. 31, 2011 Domestic Commercial Paper Program [Member] USD ($)	Dec. 31, 2010 Domestic Commercial Paper Program [Member] USD ($)	Dec. 31, 2012 Foreign Programs [Member] USD ($)	Dec. 31, 2011 Foreign Programs [Member] USD ($)	Dec. 31, 2010 Foreign Programs [Member] USD ($)	Dec. 31, 2011 Sherwin Williams Luxembourg [Member] EUR (€)	Sep. 19, 2012 Sherwin Williams Luxembourg [Member] EUR (€)	Dec. 28, 2010 Sherwin Williams Luxembourg [Member] EUR (€)	Jul. 19, 2010 Sherwin Williams Luxembourg [Member] EUR (€)	Jun. 29, 2012 Sherwin Williams Canada Inc [Member] CAD	Jul. 19, 2010 Sherwin Williams Canada Inc [Member] CAD	Mar. 31, 2011 Unsecured Revolving Credit [Member] USD ($)	Jul. 08, 2011 Amended Senior Unsecured Revolving Credit [Member] USD ($)	Apr. 23, 2012 Five year credit agreement [Member] USD ($)	Jan. 30, 2012 Five year credit agreement [Member] USD ($)	Nov. 14, 2012 Three year credit agreement [Member] USD ($)	Jan. 08, 2010 Three year senior unsecured revolving credit agreement [Member] USD ($)	Jul. 08, 2011 Five year senior unsecured revolving credit agreement [Member] USD ($)
Debt (Textual) [Abstract]
Short-term borrowing outstanding				$ 69,035,000	$ 346,313,000	$ 388,592,000	$ 0	$ 264,902,000	$ 173,490,000	$ 69,035,000	$ 81,375,000	$ 215,102,000
Weighted average interest rate								0.20%	0.20%	2.80%	4.90%	2.90%
Maximum letter of credit facility														95,000,000	150,000,000	200,000,000	75,000,000	75,000,000		1,300,000,000	250,000,000	500,000,000	250,000,000	500,000,000	1,050,000,000
Aggregate amount of credit facility													97,000,000
Line of Credit Facility, Amount Outstanding				0	0	0
Termination of senior unsecured revolving credit agreement																			$ 845,000,000
Credit facility terms	On November 14, 2012, the Company entered into a three-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit	On April 23, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit	On January 30, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit

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Statements of Consolidated Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
OPERATING ACTIVITIES
Net income	$ 631,034	$ 441,860	$ 462,485
Adjustments to reconcile net income to net operating cash:
Depreciation	152,217	151,212	140,347
Amortization of intangible assets	26,985	29,692	34,964
Impairment of trademarks and goodwill	4,086	5,492	4,484
Provisions for environmental-related matters	6,736	9,100	7,089
Provisions for (net credit from) qualified exit costs	2,734	534	(3,811)
Deferred income taxes	(10,422)	16,913	20,070
Defined benefit pension plans net cost	20,309	12,326	18,104
Income tax effect of ESOP on other capital		(3,211)	(7,515)
Stock-based compensation expense	54,348	48,176	42,276
Net increase in postretirement liability	3,666	6,793	4,627
Decrease in non-traded investments	72,861	62,540	53,407
Loss (gain) on disposition of assets	3,454	(5,469)	2,720
Other	(18,349)	3,137	3,330
Change in working capital accounts:
(Increase) in accounts receivable	(33,578)	(93,697)	(111,113)
Decrease (increase) in inventories	19,929	(19,222)	(82,060)
(Decrease) increase in accounts payable	(51,124)	64,053	155,116
(Decrease) increase in accrued taxes	(70,264)	5,435	(19,410)
Increase (decrease) in accrued compensation and taxes withheld	63,697	(538)	75,210
(Decrease) increase in refundable income taxes	(32,967)	(572)	16,059
DOL settlement accrual	80,000
Other	11,000	36,249	(78,910)
Costs incurred for environmental-related matters	(31,689)	(30,451)	(30,880)
Costs incurred for qualified exit costs	(4,577)	(6,181)	(11,275)
Other	(12,200)	1,641	11,276
Net operating cash	887,886	735,812	706,590
INVESTING ACTIVITIES
Capital expenditures	(157,112)	(153,801)	(125,162)
Acquisitions of businesses, net of cash acquired	(99,242)	(44,436)	(298,161)
Proceeds from sale of assets	9,677	12,842	8,335
Increase in other investments	(95,778)	(92,374)	(74,961)
Net investing cash	(342,455)	(277,769)	(489,949)
FINANCING ACTIVITIES
Net (decrease) increase in short-term borrowings	(284,839)	(43,346)	357,835
Proceeds from long-term debt	999,697	40,777	14,798
Payments of long-term debt	(14,000)	(49,881)	(159,422)
Costs associated with repurchase of long-term debt			(22,192)
Payments of cash dividends	(160,939)	(153,512)	(156,424)
Proceeds from stock options exercised	221,126	69,536	102,209
Income tax effect of stock-based compensation exercises and vesting	104,858	12,958	19,676
Treasury stock purchased	(557,766)	(367,372)	(375,677)
Other	(21,559)	15,631	(4,371)
Net financing cash	286,578	(475,209)	(223,568)
Effect of exchange rate changes on cash	(2,115)	(8,723)	(3,817)
Net increase (decrease) in cash and cash equivalents	829,894	(25,889)	(10,744)
Cash and cash equivalents at beginning of year	32,696	58,585	69,329
Cash and cash equivalents at end of year	862,590	32,696	58,585
Taxes paid on income	223,329	196,147	137,872
Interest paid on debt	$ 41,551	$ 42,897	$ 78,747

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Statements of Consolidated Income Statements of Consolidated Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Statement of Other Comprehensive Income [Abstract]
Net income	$ 631,034		$ 441,860		$ 462,485
Foreign currency translation adjustments	(7,403)		(65,632)		25,131
Net actuarial losses and prior service costs arising during period	(6,192)	[1]	(36,415)	[1]	(1,335)	[1]
Less: amortization of net actuarial losses and prior service costs included in Net pension costs	10,973	[2]	13,045	[2]	14,862	[2]
Employee benefit plans	4,781		(23,370)		13,527
Unrealized holding gains (losses) arising during period	123	[3]	(623)	[3]	476	[3]
Less: reclassification adjustments for (gains) losses included in net income	(12)	[4]	68	[4]		[4]
Unrealized net gains (losses) on avaialable-for-sale securities	111		(555)		476
Other comprehensive (loss) income	(2,511)		(89,557)		39,134
Comprehensive income	$ 628,523		$ 352,303		$ 501,619

[1] Net of taxes of $2,846, $25,504 and $369, in 2012, 2011 and 2010, respectively.

[2] Net of taxes of $(13,350), $(8,183) and $(9,317), in 2012, 2011 and 2010, respectively.

[3] Net of taxes of $(77), $256 and $(183), in 2012, 2011 and 2010, respectively.

[4] Net of taxes of $7 and $(42) in 2012 and 2011, respectively.

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Other Long-term Liabilities

12 Months Ended

Dec. 31, 2012

Environmental Remediation Obligations [Abstract]

OTHER LONG-TERM LIABILITIES

OTHER LONG-TERM LIABILITIES

The operations of the Company, like those of other companies in our industry, are subject to various domestic and foreign environmental laws and regulations. These laws and regulations not only govern current operations and products, but also impose potential liability on the Company for past operations. Management expects environmental laws and regulations to impose increasingly stringent requirements upon the Company and the industry in the future. Management believes that the Company conducts its operations in compliance with applicable environmental laws and regulations and has implemented various programs designed to protect the environment and promote continued compliance.

The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites (including sites which were previously owned and/or operated by businesses acquired by the Company). In addition, the Company, together with other parties, has been designated a potentially responsible party under federal and state environmental protection laws for the investigation and remediation of environmental contamination and hazardous waste at a number of third-party sites, primarily Superfund sites. In general, these laws provide that potentially responsible parties may be held jointly and severally liable for investigation and remediation costs regardless of fault. The Company may be similarly designated with respect to additional third-party sites in the future.

The Company initially provides for estimated costs of environmental-related activities relating to its past operations and third-party sites for which commitments or clean-up plans have been developed and when such costs can be reasonably estimated based on industry standards and professional judgment. These estimated costs are determined based on currently available facts regarding each site. If the best estimate

of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is provided. The Company continuously assesses its potential liability for investigation and remediation-related activities and adjusts its environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued. Included in Other long-term liabilities at December 31, 2012, 2011, and 2010 were accruals for extended environmental-related activities of $97,220, $89,266 and $89,562, respectively. Included in Other accruals at December 31, 2012, 2011, and 2010 were accruals for estimated costs of current investigation and remediation activities of $17,101, $42,847 and $60,048, respectively.

Actual costs incurred may vary from the accrued estimates due to the inherent uncertainties involved including, among others, the number and financial condition of parties involved with respect to any given site, the volumetric contribution which may be attributed to the Company relative to that attributed to other parties, the nature and magnitude of the wastes involved, the various technologies that can be used for remediation and the determination of acceptable remediation with respect to a particular site. If the Company’s future loss contingency is ultimately determined to be at the unaccrued maximum of the estimated range of possible outcomes for every site for which costs can be reasonably estimated, the Company’s accrual for environmental-related activities would be $88,671 higher than the minimum accruals at December 31, 2012.

Two of the Company’s currently and formerly owned manufacturing sites account for the majority of the accrual for environmental-related activities and the unaccrued maximum of the estimated range of possible outcomes at December 31, 2012. At December 31, 2012, $59,132, or 51.7 percent of the total accrual, related directly to these two sites. In the aggregate unaccrued maximum of $88,671 at December 31, 2012, $56,952, or 64.2 percent, related to the two manufacturing sites. While environmental investigations and remedial actions are in different stages at these sites, additional investigations, remedial actions and monitoring will likely be required at each site.

Management cannot presently estimate the ultimate potential loss contingencies related to these sites or other less significant sites until such time as a substantial portion of the investigation at the sites is completed and remedial action plans are developed. In the event any future loss contingency significantly exceeds the current amount accrued, the recording of the ultimate liability may result in a material impact on net income for the annual or interim period during which the additional costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its environmental-related matters will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time during which environmental investigation and remediation takes place. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

Management expects these contingent environmental-related liabilities to be resolved over an extended period of time. Management is unable to provide a more specific time frame due to the indefinite amount of time to conduct investigation activities at any site, the indefinite amount of time to obtain environmental agency approval, as necessary, with respect to investigation and remediation activities, and the indefinite amount of time necessary to conduct remediation activities.

The Asset Retirement and Environmental Obligations Topic of the ASC requires a liability to be recognized for the fair value of a conditional asset retirement obligation if a settlement date and fair value can be reasonably estimated. The Company recognizes a liability for any conditional asset retirement obligation when sufficient information is available to reasonably estimate a settlement date to determine the fair value of such a liability. The Company has identified certain conditional asset retirement obligations at various current and closed manufacturing, distribution and store facilities. These obligations relate primarily to asbestos abatement, hazardous waste Resource Conservation and Recovery Act (RCRA) closures, well abandonment, transformers and used oil disposals and underground storage tank closures. Using investigative, remediation and disposal methods that are currently available to the Company, the estimated costs of these obligations were accrued and are not significant. The recording of additional liabilities for future conditional asset retirement obligations may result in a material impact on net income for the annual or interim period during which the costs are accrued. Management does not believe that any potential liability ultimately attributed to the Company for its conditional asset retirement obligations will have a material adverse effect on the Company’s financial condition, liquidity, or cash flow due to the extended period of time over which sufficient information may become available regarding the closure or modification of any one or group of the Company’s facilities. An estimate of the potential impact on the Company’s operations cannot be made due to the aforementioned uncertainties.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Jan. 31, 2013	Jun. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	SHERWIN WILLIAMS CO
Entity Central Index Key	0000089800
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 13,474,108,672
Entity Common Stock, Shares Outstanding		103,402,093

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Litigation

12 Months Ended

Dec. 31, 2012

Loss Contingency, Information about Litigation Matters [Abstract]

LITIGATION

LITIGATION

In the course of its business, the Company is subject to a variety of claims and lawsuits, including, but not limited to, litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims that are inherently subject to many uncertainties regarding the possibility of a loss to the Company. These

uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability. In accordance with the Contingencies Topic of the ASC, the Company accrues for these contingencies by a charge to income when it is both probable that one or more future events will occur confirming the fact of a loss and the amount of the loss can be reasonably estimated. In the event that the Company’s loss contingency is ultimately determined to be significantly higher than currently accrued, the recording of the additional liability may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such additional liability is accrued. In those cases where no accrual is recorded because it is not probable that a liability has been incurred and the amount of any such loss cannot be reasonably estimated, any potential liability ultimately determined to be attributable to the Company may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued. In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred.

Lead pigment and lead-based paint litigation. The Company’s past operations included the manufacture and sale of lead pigments and lead-based paints. The Company, along with other companies, is and has been a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions, and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints. The plaintiffs’ claims have been based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories. The plaintiffs seek various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others. The Company is also a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints that seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint. The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation. The Company has not settled any lead pigment or lead-based paint litigation. The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the Company ultimately may not prevail. Adverse court rulings or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings. In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful.

Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings, or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company. In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations. The Company has not accrued any amounts for such litigation. With respect to such litigation, including the public nuisance litigation, the Company does not believe that it is probable that a loss has occurred, and it is not possible to estimate the range of potential losses as there is no prior history of a loss of this nature and there is no substantive information upon which an estimate could be based. In addition, any potential liability that may result from any changes to legislation and regulations cannot reasonably be estimated. In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of the liability may result in a material impact on net income for the annual or interim period during which such liability is accrued. Additionally, due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition. An estimate of the potential impact on the Company’s results of operations, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

Public nuisance claim litigation. The Company and other companies are or were defendants in legal proceedings seeking recovery based on public nuisance liability theories, among other theories, brought by the State of Rhode Island, the City of St. Louis, Missouri, various cities and counties in the State of New Jersey, various cities in the State of Ohio and the State of Ohio, the City of Chicago, Illinois, the City of Milwaukee, Wisconsin and the County of Santa Clara, California and other public entities in the State of California. Except for the Santa Clara County, California proceeding, all of these legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings.

The proceedings initiated by the State of Rhode Island included two jury trials. At the conclusion of the second trial, the jury returned a verdict finding that (i) the cumulative presence of lead pigment in paints and coatings on buildings in the State of Rhode Island constitutes a public nuisance, (ii) the Company, along with two other defendants, caused or substantially contributed to the creation of the public nuisance, and (iii) the Company and two other defendants should be ordered to abate the public nuisance. The Company and two other defendants appealed and, on July 1, 2008, the Rhode Island Supreme Court, among other determinations, reversed the judgment of abatement with respect to the Company and two other defendants. The Rhode Island Supreme Court’s decision reversed the public nuisance liability judgment against the Company on the basis that the complaint failed to state a public nuisance claim as a matter of law.

The Santa Clara County, California proceeding was initiated in March 2000 in the Superior Court of the State of California, County of Santa Clara. In the original complaint, the plaintiffs asserted various claims including fraud and concealment, strict product liability/failure to warn, strict product liability/design defect, negligence, negligent breach of a special duty, public nuisance, private nuisance, and violations of California’s Business and Professions Code. A number of the asserted claims were resolved in favor of the defendants through pre-trial proceedings. The named plaintiffs in the Fourth Amended Complaint, filed on March 16, 2011, are the Counties of Santa Clara, Alameda, Los Angeles, Monterey, San Mateo, Solano and Ventura, and the Cities of Oakland, San Diego and San Francisco. The Fourth Amended Complaint asserts a sole claim for public nuisance, alleging that the presence of lead products for use in paint and coatings in, on and around buildings in the plaintiffs’ jurisdictions constitutes a public nuisance. The plaintiffs seek the abatement of the alleged public nuisance that exists within the plaintiffs’ jurisdictions. A trial is currently scheduled to begin in June 2013.

Litigation seeking damages from alleged personal injury. The Company and other companies are defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries. These proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint, claims for damages allegedly incurred by the children’s parents or guardians, and claims for damages allegedly incurred by professional painting contractors. These proceedings generally seek compensatory and punitive damages, and seek other relief including medical monitoring costs. These proceedings include purported claims by individuals, groups of individuals and class actions.

The plaintiff in Thomas v. Lead Industries Association, et al., initiated an action in state court against the Company, other alleged former lead pigment manufacturers and the Lead Industries Association in September 1999. The claims against the Company and the other defendants included strict liability, negligence, negligent misrepresentation and omissions, fraudulent misrepresentation and omissions, concert of action, civil conspiracy and enterprise liability. Implicit within these claims is the theory of “risk contribution” liability (Wisconsin’s theory which is similar to market share liability) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff. The case ultimately proceeded to trial and, on November 5, 2007, the jury returned a defense verdict, finding that the plaintiff had ingested white lead carbonate, but was not brain damaged or injured as a result. The plaintiff appealed and, on December 16, 2010, the Wisconsin Court of Appeals affirmed the final judgment in favor of the Company and other defendants.

Wisconsin is the only jurisdiction to date to apply a theory of liability with respect to alleged personal injury (i.e., risk contribution/market share liability) that does not require the plaintiff to identify the manufacturer of the product that allegedly injured the plaintiff in the lead pigment and lead-based paint litigation. Although the risk contribution liability theory was applied during the Thomas trial, the constitutionality of this theory as applied to the lead pigment cases has not been judicially determined by the Wisconsin state courts. However, in an unrelated action filed in the United States District Court for the Eastern District of Wisconsin, Gibson v. American Cyanamid, et al., on November 15, 2010, the District Court held that Wisconsin’s risk contribution theory as applied in that case violated the defendants’ right to substantive due process and is unconstitutionally retroactive. The District Court's decision in Gibson v. American Cyanamid, et al., has been appealed by the plaintiff.

Insurance coverage litigation. The Company and its liability insurers, including certain Underwriters at Lloyd’s of London, initiated legal proceedings against each other to primarily determine, among other things, whether the costs and liabilities associated with the abatement of lead pigment are covered under certain insurance policies issued to the Company. The Company’s action, filed on March 3, 2006 in the Common Pleas Court, Cuyahoga County, Ohio, is currently stayed and inactive.

The liability insurers’ action, which was filed on February 23, 2006 in the Supreme Court of the State of New York, County of New York, has been dismissed. An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities. The Company has not recorded any assets related to these insurance policies or otherwise assumed that proceeds from these insurance policies would be received in estimating any contingent liability accrual. Therefore, an ultimate loss in the insurance coverage litigation without a determination of liability against the Company in the lead pigment or lead-based paint litigation will have no impact on the Company’s results of operation, liquidity or financial condition. As previously stated, however, the Company has not accrued any amounts for the lead pigment or lead-based paint litigation and any significant liability ultimately determined to be attributable to the Company relating to such litigation may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued.

2012 Subsequent Event - DOL Settlement. On February 20, 2013, the Company reached a settlement with the DOL of the previously disclosed investigation of transactions related to the ESOP that were implemented on August 1, 2006 and August 27, 2003. The DOL had notified the Company, certain current and former directors of the Company and the ESOP trustee of potential enforcement claims asserting breaches of fiduciary obligations. The DOL sought compensatory and equitable remedies, including monetary damages to the ESOP for alleged losses to the ESOP relating to third-party valuation of the Company's convertible serial preferred stock. The Company believes that the DOL's claims are subject to meritorious defenses, however, the Company's management and Board of Directors have decided that it would be in the best interest of the Company and its shareholders to avoid potentially costly litigation and enter into this settlement to resolve these claims.

The Company agreed to resolve all ESOP related claims with the DOL by making a one-time payment of $80,000 to the ESOP and has recorded a $49,163 after tax charge to earnings. In accordance with U.S. generally accepted accounting principles, the Company is required to recognize this subsequent event in its 2012 fiscal year results since this subsequent event is related to conditions that existed at the balance sheet date of December 31, 2012. The Company's financial results for the quarter and year ended December 31, 2012, which were set forth in the Company's earnings release issued on January 31, 2013 and furnished on the Company's Current Report on Form 8-K dated January 31, 2013, have been revised and furnished on the Company's Current Report on Form 8-K dated February 20,2013 to reflect this subsequent event. As a result of recording this accrual in the Administrative segment, Cost of goods sold increased $16,000 and Selling, general and administrative expense increased $64,000 while income tax expense decreased $30,837 and diluted net income per common share decreased $.47 per share for both the quarter and year ended December 31, 2012.

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Income Taxes (Details 1) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Components of income before income taxes as used for income tax purposes
Domestic	$ 712,873	$ 560,395	$ 539,120
Foreign	194,436	181,153	138,664
Total	907,309	741,548	677,784
Reconciliation of the statutory federal income tax rate to the effective tax rate
Statutory federal income tax rate	35.00%	35.00%	35.00%
Effect of State and local income taxes	1.80%	2.10%	1.60%
Effect of Investment vehicles	(2.10%)	(1.90%)	(1.60%)
Effect of ESOP IRS audit settlement		10.10%
Effect of Domestic production activities	(1.90%)	(2.40%)	(2.50%)
Effect of Other - net	(2.40%)	(2.50%)	(0.70%)
Effective tax rate	30.40%	40.40%	31.80%
Reconciliation of unrecognized tax
Balance at beginning of year	29,666	31,268	36,963
Additions based on tax positions related to the current year	3,760	2,807	3,109
Additions for tax positions of prior years	7,392	1,354	1,841
Reductions for tax positions of prior years	(6,583)	(3,339)	(9,123)
Settlements	(1,139)	(1,089)	(55)
Lapses of Statutes of Limitations	(4,977)	(1,335)	(1,467)
Balance at end of year	$ 28,119	$ 29,666	$ 31,268

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Statements of Consolidated Income (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Statement [Abstract]
IRS Settlement		$ 74,982
Per share impact IRS Settlement (in dollars per share)		$ 0.70
Statement of Other Comprehensive Income [Abstract]
Net actuarial losses and prior service costs arising during period, tax	2,846	25,504	369
Amortization of net actuarial losses and prior service costs included in Net pension costs, tax	(13,350)	(8,183)	(9,317)
Unrealized holding gains (losses) arising during period, tax	(77)	256	(183)
Reclassification adjustments for (gains) losses included in net income, tax	$ 7	$ (42)

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Inventories

12 Months Ended

Dec. 31, 2012

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Inventories were stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method. The following presents the effect on inventories, net income and net income per common share had the Company used the first-in, first-out (FIFO) inventory valuation method adjusted for income taxes at the statutory rate and assuming no other adjustments. Management believes that the use of LIFO results in a better matching of costs and revenues. This information is presented to enable the reader to make comparisons with companies using the FIFO method of inventory valuation. During 2012 and 2011, certain inventories accounted for on the LIFO method were reduced, resulting in the liquidation of certain quantities carried at costs prevailing in prior years. The 2012 liquidations reduced net income by $160 and the 2011 liquidations increased net income by $1,067.

	2012			2011			2010
Percentage of total inventories on LIFO	75		%	77		%	76		%
Excess of FIFO over LIFO	$	357,303		$	378,986		$	277,164
Increase (decrease) in net income due to LIFO	13,365			(62,636		)	(16,394		)
Increase (decrease) in net income per common share due to LIFO	.13			(.59		)	(.15		)

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Acquisitions

12 Months Ended

Dec. 31, 2012

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS

On November 9, 2012, the Company entered into a definitive Stock Purchase Agreement to purchase all of the issued and outstanding shares of Consorcio Comex, S.A. de C.V. (Comex) for an aggregate purchase price of approximately $2.34 billion, including assumed debt. Comex is a leader in the paint and coatings market in Mexico with headquarters in Mexico City. Completion of the transaction is subject to certain conditions and regulatory approvals.

All completed acquisitions below have been accounted for as purchases and their results of operations have been included in the consolidated financial statements since the date of acquisition.

Effective December 18, 2012, the Company acquired Jiangsu Pulanna Coating Co., Ltd. (Pulanna). Headquartered in Changzhou, China, Pulanna is a leading automotive refinishes coatings manufacturer in China. The acquisition strengthens the Global Finishes Group's established presence in China and its ability to serve automotive customers around the world.

Effective June 1, 2012, the Company acquired Geocel Holdings Corporation. Geocel manufactures innovative caulks, sealants, and adhesives specially designed for tough construction and repair applications in commercial, residential, industrial and

transport non-automotive markets. Geocel has operations in both the United States and United Kingdom. The acquisition strengthens the Consumer Group’s sealant and adhesive market position.

The aggregate consideration paid for Pulanna and Geocel was $99,242, net of cash acquired. Both acquisitions resulted in the recognition of goodwill and intangible assets. See Note 4.

The Company acquired a controlling interest in Leighs Paints in July 2011, and the remaining interest in December 2011. Headquartered in Bolton, United Kingdom, Leighs Paints is one of the leading industrial fire protection coatings manufacturers in the world, with a growing global platform driven by technology innovation and quality products. Leighs Paints strengthens the Global Finishes Group’s growing global platform. The aggregate consideration paid for Leighs Paints was $41,824, net of cash acquired. The acquisition resulted in the recognition of goodwill and intangible assets. See Note 4.

The following unaudited pro-forma summary presents consolidated financial information as if Pulanna, Geocel and Leighs Paints had been acquired at the beginning of 2011. The unaudited pro-forma consolidated financial information does not necessarily reflect the actual results that would have occurred had the acquisitions taken place on January 1, 2011 or the future results of operations of the combined companies under ownership and operation of the Company.

	2012		2011
Net sales	$	9,589,229	$	8,888,661
Net income	641,090		448,751
Net income per common share:
Basic	6.25		4.29
Diluted	6.12		4.20

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes using the enacted tax rates and laws that are currently in effect. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2012, 2011 and 2010 were as follows:

	2012		2011		2010
Deferred tax assets:
Exit costs, environ-mental and other similar items	$	45,403	$	53,928	$	64,773
Deferred employee benefit items	93,039		74,577		57,810
Other items (each less than 5 percent of total assets)	73,388		83,192		79,014
Total deferred tax assets	$	211,830	$	211,697	$	201,597
Deferred tax liabilities:
Depreciation and amortization	$	202,891	$	192,035	$	165,917

Netted against the Company’s other deferred tax assets were valuation reserves of $11,474, $8,017 and $17,756 at December 31, 2012, 2011 and 2010, respectively, resulting from the uncertainty as to the realization of the tax benefits from certain foreign net operating losses and certain other foreign assets. The Company has $8,650 of domestic net operating loss carryforwards acquired through acquisitions that have expiration dates through the tax year 2030 and foreign net operating losses of $47,412. The foreign net operating losses are related to various jurisdictions that provide for either indefinite carryforward periods or carryforward periods with various expiration periods.

Significant components of the provisions for income taxes were as follows:

	2012			2011			2010
Current:
Federal	$	207,791		$	204,284		$	127,498
Foreign	51,264			50,272			50,765
State and local	27,642			28,219			16,966
Total current	286,697			282,775			195,229
Deferred:
Federal	8,692			20,713			27,903
Foreign	(16,964		)	(3,922		)	(7,145		)
State and local	(2,150		)	122			(688		)
Total deferred	(10,422		)	16,913			20,070
Total provisions for income taxes	$	276,275		$	299,688		$	215,299

The provisions for income taxes included estimated taxes payable on that portion of retained earnings of foreign subsidiaries expected to be received by the Company. The effect of the repatriation provisions of the American Jobs Creation Act of 2004 and the provisions of the Income Taxes Topic of the ASC, was $7,572 in 2012, $(491) in 2011 and $1,885 in 2010. A provision was not made with respect to $19,274 of retained earnings at December 31, 2012 that have been invested by foreign subsidiaries. The unrecognized deferred tax liability related to those earnings is approximately $1.0 million.

Significant components of income before income taxes as used for income tax purposes, were as follows:

	2012		2011		2010
Domestic	$	712,873	$	560,395	$	539,120
Foreign	194,436		181,153		138,664
	$	907,309	$	741,548	$	677,784

A reconciliation of the statutory federal income tax rate to the effective tax rate follows:

	2012		2011		2010
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Effect of:
State and local income taxes	1.8		2.1		1.6
Investment vehicles	(2.1	)	(1.9	)	(1.6	)
ESOP IRS audit settlement			10.1
Domestic production activities	(1.9	)	(2.4	)	(2.5	)
Other - net	(2.4	)	(2.5	)	(0.7	)
Effective tax rate	30.4	%	40.4	%	31.8	%

The 2012 state and local income tax and investment vehicles components of the effective tax rate were consistent with the 2011 tax year. The domestic production activities component of the effective tax rate decreased compared to 2011 due to the domestic taxable income limitation as set forth in the Internal Revenue Code. During the fourth quarter of 2011, the Company reached a settlement with the Internal Revenue Service (IRS) that resolved all ESOP related tax issues for the 2003 through 2009 tax years. The settlement negatively impacted the effective tax rate for 2011.

On January 2, 2013, the American Taxpayer Relief Act (ATRA) was enacted which retroactively reinstated and extended the Federal Research and Development Tax Credit from January 1, 2012 to December 31, 2013. As a result, the Company expects to recognize an immaterial discrete tax benefit during the first quarter of 2013. The other provisions of the Act will have a negligible impact on the Company's effective tax rate in 2013.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The IRS commenced an examination of the Company's U.S. income tax returns for the 2008 and 2009 tax years in the third quarter of 2011. Fieldwork is expected to be completed during 2013. At this time, the Company has determined that an insignificant refund is due for issues under review during this audit period. The Company has fully resolved all IRS issues for the 2003 through 2009 tax years relating to the matters challenging the ESOP related federal income tax deductions claimed by the Company. With the exception of $2.0 million of interest related to the 2008 tax year, all ESOP related settlement payments have been made to the IRS.

As of December 31, 2012, the Company is subject to non-U.S. income tax examinations for the tax years of 2005 through 2012. In addition, the Company is subject to state and local income tax examinations for the tax years 2002 through 2012.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2012			2011			2010
Balance at beginning of year	$	29,666		$	31,268		$	36,963
Additions based on tax positions related to the current year	3,760			2,807			3,109
Additions for tax positions of prior years	7,392			1,354			1,841
Reductions for tax positions of prior years	(6,583		)	(3,339		)	(9,123		)
Settlements	(1,139		)	(1,089		)	(55		)
Lapses of Statutes of Limitations	(4,977		)	(1,335		)	(1,467		)
Balance at end of year	$	28,119		$	29,666		$	31,268

Included in the balance of unrecognized tax benefits at December 31, 2012, 2011 and 2010 is $25,011, $25,569 and $27,428 in unrecognized tax benefits, the recognition of which would have an effect on the effective tax rate.

Included in the balance of unrecognized tax benefits at December 31, 2012 is $6,981 related to tax positions for which it is reasonably possible that the total amounts could significantly change during the next twelve months. This amount represents a decrease in unrecognized tax benefits comprised primarily of items related to federal audits of partnership investments, assessed state income tax audits, state settlement negotiations currently in progress and expiring statutes in federal, foreign and state jurisdictions.

The Company classifies all income tax related interest and penalties as income tax expense. During the years ended December 31, 2012, 2011 and 2010, the Company recognized a release of $1,532, $1,163 and $1,544, respectively, in income tax interest and penalties. At December 31, 2012, 2011 and 2010, the Company has accrued $6,178, $8,095 and $10,197, respectively, for the potential payment of interest and penalties.

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Capital Stock

12 Months Ended

Dec. 31, 2012

Equity [Abstract]

CAPITAL STOCK

CAPITAL STOCK

At December 31, 2012, there were 300,000,000 shares of common stock and 30,000,000 shares of serial preferred stock authorized for issuance. Of the authorized serial preferred stock, 3,000,000 shares are designated as cumulative redeemable serial preferred and 1,000,000 shares are designated as convertible serial preferred stock. See Note 11. Effective April 21, 2010, the 2006 Equity and Performance Incentive Plan (2006 Employee Plan) was amended and restated to increase the number of common shares that may be issued or transferred by 9,200,000 shares to 19,200,000 shares. See Note 12. An aggregate of 13,558,565, 18,013,429 and 19,835,391 shares of common stock at December 31, 2012, 2011 and 2010, respectively, were reserved for future grants of restricted stock and the exercise and future grants of option rights. See Note 12. Common shares outstanding shown in the following table included 484,872, 475,628 and 475,628 shares of common stock held in a revocable trust at December 31, 2012, 2011 and 2010, respectively. The revocable trust is used to accumulate assets for the purpose of funding the ultimate obligation of certain non-qualified benefit plans. Transactions between the Company and the trust are accounted for in accordance with the Deferred Compensation – Rabbi Trusts Subtopic of the Compensation Topic of the ASC, which requires the assets held by the trust be consolidated with the Company’s accounts. Effective March 31, 2011, the company retired 125,425,977 common shares held in treasury, which resulted in decreases in Treasury stock, common stock and retained earnings.

	Common Shares in Treasury		Common Shares Outstanding
Balance at January 1, 2010	119,209,669		109,436,869
Shares tendered as payment for option rights exercised	15,752		(15,752	)
Shares issued for exercise of option rights			2,436,639
Shares tendered in connection with grants of restricted stock	99,441		(99,441	)
Net shares issued for grants of restricted stock			262,413
Treasury stock purchased	5,000,000		(5,000,000	)
Balance at December 31, 2010	124,324,862		107,020,728
Shares tendered as payment for option rights exercised	2,274		(2,274	)
Shares issued for exercise of option rights			1,480,058
Net shares issued for grants of restricted stock			55,722
Treasury stock purchased	4,700,000		(4,700,000	)
Treasury stock retired	(125,425,977	)
Balance at December 31, 2011	3,601,159		103,854,234
Shares tendered as payment for option rights exercised	7,766		(7,766	)
Shares issued for exercise of option rights			4,140,822
Shares tendered in connection with grants of restricted stock	143,979		(143,979	)
Net shares issued for grants of restricted stock			26,756
Treasury stock purchased	4,600,000		(4,600,000	)
Balance at December 31, 2012	8,352,904		103,270,067

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Operating Leases (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Operating Leases (Textual) [Abstract]
Rental expenses	$ 310,109	$ 292,516	$ 282,309
Contingent rental included in rent expense	$ 39,340	$ 36,917	$ 37,602

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Pension, Health Care and Postretirement Benefits Other Than Pensions

12 Months Ended

Dec. 31, 2012

Compensation and Retirement Disclosure [Abstract]

PENSION, HEALTH CARE AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

PENSION, HEALTH CARE AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

The Company provides pension benefits to substantially all employees through primarily noncontributory defined contribution or defined benefit plans and certain health care and life insurance benefits to domestic active employees and eligible retirees. In accordance with the Retirement Benefits Topic of the ASC, the Company recognizes an asset for overfunded defined benefit pension or other postretirement benefit plans and a liability for unfunded or underfunded plans. In addition, actuarial gains and losses and prior service costs of such plans are recorded in Cumulative other compre- hensive loss, a component of Shareholders’ equity. The amounts recorded in Cumulative other comprehensive loss will continue to be modified as actuarial assumptions and service costs change, and all such amounts will be amortized to expense over a period of years through the net pension cost (credit) and net periodic benefit cost.

Health care plans. The Company provides certain domestic health care plans that are contributory and contain cost-sharing features such as deductibles and coinsurance. There were 18,609, 18,189 and 17,841 active employees entitled to receive benefits under these plans at December 31, 2012, 2011 and 2010, respectively. The cost of these benefits for active employees, which includes claims incurred and claims incurred but not reported, amounted to $163,011, $155,501 and $144,927 for 2012, 2011 and 2010, respectively.

Defined contribution pension plans. The Company’s annual contribution for its domestic defined contribution pension plan was $25,147, $23,344 and $22,512 for 2012, 2011 and 2010, respectively. The contribution percentage ranges from two percent to seven percent of compensation for covered employees based on an age and service formula. Assets in employee accounts of the domestic defined contribution pension plan are invested in various investment funds as directed by the participants. These investment funds did not own a significant

number of shares of the Company’s common stock for any year presented.

The Company’s annual contribution for its foreign defined contribution pension plans, which is based on various percentages of compensation for covered employees up to certain limits, was $4,621, $3,807 and $3,968 for 2012, 2011 and 2010, respectively. Assets in employee accounts of the foreign defined contribution pension plans are invested in various investment funds. These investment funds did not own a significant number of shares of the Company’s common stock for any year presented.

Defined benefit pension plans. The Company has one salaried and one hourly domestic defined benefit pension plan, and fifteen foreign defined benefit pension plans, including two European plans acquired in connection with the 2011 and 2010 acquisitions of Leighs Paints and Acroma. All participants in the domestic salaried defined benefit pension plan prior to January 1, 2002 retain the previous defined benefit formula for computing benefits with certain modifications for active employees. Eligible domestic salaried employees hired or re-hired between January 1, 2002 and September 30, 2011 became participants in the revised domestic salaried defined benefit pension plan upon completion of six months of service. All employees who became participants on or after January 1, 2002 and before January 1, 2005 were credited with certain contribution credits equivalent to six percent of their salary. All employees who became participants on or after January 1, 2005 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Effective July 1, 2009, the domestic salaried defined benefit pension plan was revised, and all employees who become participants on or after January 1, 2002 were credited with certain contribution credits that range from two percent to seven percent of compensation based on an age and service formula. Contribution credits are converted into units to account for each participant’s benefits. Participants will receive a variable annuity benefit upon retirement or a lump sum distribution upon termination (if vested). The variable annuity benefit is subject to the hypothetical returns achieved on each participant’s allocation of units from investments in various investment funds as directed by the participant. Contribution credits to the revised domestic salaried defined benefit pension plan are being funded through existing plan assets. Effective October 1, 2011, the domestic salaried defined benefit pension plan was frozen for new hires, and all newly hired U.S. non-collectively bargained employees are eligible to participate in the Company’s domestic defined contribution plan.

At December 31, 2012, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $313,964, fair value of plan assets of $559,552 and excess plan assets of $245,588. The domestic hourly defined benefit pension plan was underfunded, with a projected benefit obligation of $152,863, fair value of plan assets of $144,011 and a deficiency of plan assets of $8,852. The plans are funded in accordance with all applicable regulations at December 31, 2012 and no funding will be required in 2013. At December 31, 2011, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $269,314, fair value of plan assets of $487,990 and excess plan assets of $218,676, and the domestic hourly defined benefit pension plan was underfunded, with a projected benefit obligation of $140,715, fair value of plan assets of $126,473 and a deficiency of plan assets of $14,242. At December 31, 2010, the domestic salaried defined benefit pension plan was overfunded, with a projected benefit obligation of $261,996, fair value of plan assets of $502,707 and excess plan assets of $240,711, and the domestic hourly defined benefit pension plan was overfunded, with a projected benefit obligation of $128,261, fair value of plan assets of $132,018 and excess plan assets of $3,757.

At December 31, 2012, twelve of the Company’s foreign defined benefit pension plans were unfunded or underfunded, with combined projected benefit obligations, fair values of net assets and deficiencies of plan assets of $105,045, $65,026 and $40,019, respectively. An increase of $27,294 from 2011 in the combined projected benefit obligations of all foreign defined benefit pension plans was primarily due to changes in plan assumptions.

The Company expects to make the following benefit payments for all domestic and foreign defined benefit pension plans: $41,784 in 2013; $42,435 in 2014; $43,457 in 2015; $43,631 in 2016; $43,992 in 2017; and $225,564 in 2018 through 2022.

The estimated net actuarial losses and prior service (credits) for the defined benefit pension plans that are expected to be amortized from Cumulative other comprehensive loss into the net pension costs in 2013 are $15,111 and $(310), respectively.

The following table summarizes the components of the net pension costs and Cumulative other comprehen-sive loss related to the defined benefit pension plans:

	Domestic Defined Benefit Pension Plans									Foreign Defined Benefit Pension Plans
	2012			2011			2010			2012			2011			2010
Net pension costs:
Service costs	$	19,061		$	17,933		$	16,906		$	3,654		$	3,055		$	2,061
Interest costs	17,442			18,602			18,028			6,927			5,954			4,266
Expected returns on plan assets	(44,841		)	(46,441		)	(42,311		)	(6,799		)	(5,535		)	(2,842		)
Amortization of prior service costs	1,591			1,635			1,661									29
Amortization of actuarial losses	22,205			16,865			18,943			1,022			493			1,363
Ongoing pension costs	15,458			8,594			13,227			4,804			3,967			4,877
Settlement costs (credits)										47			(235		)
Net pension costs	15,458			8,594			13,227			4,851			3,732			4,877
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial (gains) losses arising during the year	(26,459		)	48,745			681			14,131			15,944			(10,043		)
Prior service costs during the year	2,495			1,195
Amortization of prior service costs	(1,591		)	(1,635		)	(1,661		)							(29		)
Amortization of actuarial losses	(22,205		)	(16,865		)	(18,943		)	(1,022		)	(493		)	(1,363		)
Exchange rate gain (loss) recognized during the year										1,464			(387		)	(1,536		)
Total recognized in Cumulative other comprehensive loss	(47,760		)	31,440			(19,923		)	14,573			15,064			(12,971		)
Total recognized in net pension costs and Cumulative other comprehensive loss	$	(32,302	)	$	40,034		$	(6,696	)	$	19,424		$	18,796		$	(8,094	)

The Company employs a total return investment approach for the domestic and foreign defined benefit pension plan assets. A mix of equities and fixed income investments are used to maximize the long-term return of assets for a prudent level of risk. In determining the expected long-term rate of return on defined benefit pension plan assets, management considers the historical rates of return, the nature of investments and an expectation of future investment strategies. The target allocations for plan assets are 45 – 65 percent equity securities and 30 – 40 percent fixed income securities.

The following tables summarize the fair value of the defined benefit pension plan assets at December 31, 2012, 2011 and 2010:

	Fair Value at December 31, 2012		Quoted Prices in  Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	68,795			$	68,795
Equity investments (b)	490,993		$	243,553	247,440
Fixed income investments (c)	239,558		131,276		108,282
Other assets (d)	37,230				18,380		$	18,850
	$	836,576	$	374,829	$	442,897	$	18,850
	Fair Value at December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	9,408			$	9,408
Equity investments (b)	482,694		$	268,307	214,387
Fixed income investments (c)	202,939		103,485		99,454
Other assets (d)	37,482				16,582		$	20,900
	$	732,523	$	371,792	$	339,831	$	20,900
	Fair Value at December 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	33,050			$	33,050
Equity investments (b)	463,108		$	257,616	205,492
Fixed income investments (c)	185,163		101,227		78,401		$	5,535
Other assets (d)	19,152						19,152
	$	700,473	$	358,843	$	316,943	$	24,687

(a) This category includes a full range of high quality, short-term money market securities.

(b) This category includes actively managed equity assets that track primarily to the S&P 500.

(c) This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.

(d) This category consists of venture capital funds.

The following tables summarize the changes in the fair value of the defined benefit pension plan assets classified as level 3 at December 31, 2012, 2011 and 2010: 

	Balance at December 31, 2011		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2012
Other assets	$	20,900	$	(3,827	)	$	1,777	$	18,850
	Balance at December 31, 2010		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2011
Fixed income investments	$	5,535	$	(5,717	)	$	182
Other assets	19,152		(1,389		)	3,137		$	20,900
	$	24,687	$	(7,106	)	$	3,319	$	20,900
	Balance at January 1,  2010		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2010
Fixed income investments	$	5,265	$	(269	)	$	539	$	5,535
Other assets	17,728		(695		)	2,119		19,152
	$	22,993	$	(964	)	$	2,658	$	24,687

Included as equity investments in the domestic defined benefit pension plan assets at December 31, 2012 were 300,000 shares of the Company’s common stock with a market value of $46,146, representing 6.6 percent of total domestic plan assets. Dividends received on the Company’s common stock during 2012 totaled $1,334.

The following table summarizes the obligations, plan assets and assumptions used for the defined benefit pension plans, which are all measured as of December 31:

	Domestic Defined Benefit Pension Plans									Foreign Defined Benefit Pension Plans
	2012			2011			2010			2012			2011			2010
Accumulated benefit obligations at end of year	$	460,591		$	415,163		$	371,195		$	142,769		$	121,137		$	67,964
Projected benefit obligations:
Balances at beginning of year	$	410,029		$	390,257		$	339,275		$	141,465		$	85,936		$	75,175
Service costs	19,061			17,933			16,906			3,654			3,055			2,061
Interest costs	17,442			18,602			18,028			6,927			5,954			4,266
Actuarial losses (gains)	48,346			8,428			41,739			17,532			11,395			(6,950		)
Acquisitions of businesses and other	2,496			1,194						(975		)	42,131			14,378
Effect of foreign exchange										6,633			(3,760		)	(1,063		)
Benefits paid	(30,547		)	(26,385		)	(25,691		)	(6,478		)	(3,246		)	(1,931		)
Balances at end of year	466,827			410,029			390,257			168,758			141,465			85,936
Plan assets:
Balances at beginning of year	614,463			634,725			577,047			118,060			65,748			55,870
Actual returns on plan assets	119,647			6,123			83,369			10,201			987			5,935
Acquisitions of businesses and other										6,205			57,761			7,085
Effect of foreign exchange										5,025			(3,190		)	(1,211		)
Benefits paid	(30,547		)	(26,385		)	(25,691		)	(6,478		)	(3,246		)	(1,931		)
Balances at end of year	703,563			614,463			634,725			133,013			118,060			65,748
Excess (deficient) plan assets over projected benefit obligations	$	236,736		$	204,434		$	244,468		$	(35,745	)	$	(23,405	)	$	(20,188	)
Assets and liabilities recognized in the Consolidated Balance Sheets:
Deferred pension assets	$	245,588		$	218,676		$	244,468		$	4,323		$	9,674		$	3,865
Other accruals										(869		)	(829		)	(272		)
Other long-term liabilities	(8,852		)	(14,242		)				(39,199		)	(32,250		)	(23,781		)
	$	236,736		$	204,434		$	244,468		$	(35,745	)	$	(23,405	)	$	(20,188	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(163,088	)	$	(211,752	)	$	(179,871	)	$	(41,567	)	$	(26,994	)	$	(11,930	)
Prior service costs	(6,110		)	(5,206		)	(5,647		)
	$	(169,198	)	$	(216,958	)	$	(185,518	)	$	(41,567	)	$	(26,994	)	$	(11,930	)
Weighted-average assumptions used to determine projected benefit obligations:
Discount rate	3.73		%	4.40		%	4.97		%	4.58		%	4.94		%	5.45		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%	4.08		%	4.05		%	4.06		%
Weighted-average assumptions used to determine net pension costs:
Discount rate	4.40		%	4.97		%	5.50		%	4.94		%	5.48		%	5.57		%
Expected long-term rate of return on assets	7.50		%	7.50		%	7.50		%	6.04		%	6.12		%	5.46		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%	4.04		%	4.06		%	3.74		%

Postretirement Benefits Other Than Pensions. Employees of the Company hired in the United States prior to January 1, 1993 who are not members of a collective bargaining unit, and certain groups of employees added through acquisitions, are eligible for health care and life insurance benefits upon retirement, subject to the terms of the unfunded plans. There were 4,402, 4,436 and 4,768 retired employees entitled to receive such postretirement benefits at December 31, 2012, 2011 and 2010, respectively.

The following table summarizes the obligation and the assumptions used for postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2012			2011			2010
Benefit obligation:
Balance at beginning of year - unfunded	$	316,795		$	315,572		$	300,526
Service cost	2,943			3,495			3,532
Interest cost	13,520			15,580			16,066
Actuarial loss (gain)	18,961			(3,965		)	11,067
Benefits paid	(14,085		)	(13,887		)	(15,619		)
Balance at end of year - unfunded	$	338,134		$	316,795		$	315,572
Liabilities recognized in the Consolidated Balance Sheets:
Postretirement benefits other than pensions	$	(320,223	)	$	(297,528	)	$	(295,896	)
Other accruals	(17,911		)	(19,267		)	(19,676		)
	$	(338,134	)	$	(316,795	)	$	(315,572	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(62,814	)	$	(45,567	)	$	(52,037	)
Prior service costs	328			983			1,640
	$	(62,486	)	$	(44,584	)	$	(50,397	)
Weighted-average assumptions used to determine benefit obligation:
Discount rate	3.70		%	4.40		%	5.10		%
Health care cost trend rate - pre-65	8.00		%	8.00		%	7.50		%
Health care cost trend rate - post-65	8.00		%	8.00		%	7.50		%
Prescription drug cost increases	8.00		%	8.00		%	8.00		%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	4.40		%	5.10		%	5.50		%
Health care cost trend rate - pre-65	8.00		%	7.50		%	8.00		%
Health care cost trend rate - post-65	8.00		%	7.50		%	8.00		%
Prescription drug cost increases	8.00		%	8.00		%	9.00		%

The following table summarizes the components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2012			2011			2010
Net periodic benefit cost:
Service cost	$	2,943		$	3,495		$	3,532
Interest cost	13,520			15,580			16,066
Amortization of actuarial losses	1,715			2,505			1,304
Amortization of prior service credit	(656		)	(657		)	(656		)
Net periodic benefit cost	17,522			20,923			20,246
Other changes in projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial loss (gain)	18,961			(3,965		)	11,067
Amortization of actuarial losses	(1,715		)	(2,505		)	(1,304		)
Amortization of prior service credit	656			657			656
Total recognized in Cumulative other comprehensive loss	17,902			(5,813		)	10,419
Total recognized in net periodic benefit cost and Cumulative other comprehensive loss	$	35,424		$	15,110		$	30,665

The estimated net actuarial loss and prior service credit for postretirement benefits other than pensions that are expected to be amortized from Cumulative other comprehensive loss into net periodic benefit cost in 2013 are $3,934 and $(328), respectively.

The assumed health care cost trend rate and prescription drug cost increases used to determine the net periodic benefit cost for postretirement health care benefits for 2013 both decrease in each successive year until reaching 5.0 percent in 2019.

The assumed health care and prescription drug cost trend rates have a significant effect on the amounts reported for the postretirement health care benefit obligation. A one-percentage-point change in assumed health care and prescription drug cost trend rates would have had the following effects at December 31, 2012:

	One-Percentage-Point
	Increase		(Decrease)
Effect on total of service and interest cost components	$	117	$	(124	)
Effect on the postretirement benefit obligation	$	2,938	$	(3,039	)

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Medicare Act) introduced a prescription drug benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In accordance with the accounting guidance related to the Medicare Act included in the Retirement Benefits Topic of the ASC, the effects of the federal subsidy resulted in a $21,400 reduction of the accumulated postretirement benefit obligation for benefits attributed to past service, which is being recognized prospectively beginning July 1, 2004. During 2012, this recognition resulted in a $5,712 reduction of the net periodic benefit cost, which consisted of changes in actuarial experience and reductions in interest cost of $5,278 and $434, respectively. During 2011, this recognition resulted in a $7,073 reduction of the net periodic benefit cost, which consisted of changes in actuarial experience and reductions in interest cost of $6,831 and $242, respectively. During 2010, this recognition resulted in a $4,170 reduction of the net periodic benefit cost, which consisted of reductions in interest cost, amortization of changes in actuarial experience and service cost of $1,973, $1,852 and $345, respectively. The initial effects of the federal subsidy attributable to past service have been fully recognized.

In the first quarter of 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (the “Acts”) were enacted and became U.S. law. The Acts eliminated the tax deduction previously allowed for the Medicare Part D subsidy beginning in years after December 31, 2012. The Company recognized the deferred tax effects of the reduced deductibility of the subsidy during the first quarter of 2010. The resulting one-time increase in income taxes of $11,400 reduced 2010 basic and diluted earnings per share by $.11 and $.10, respectively.

The Company expects to make retiree health care benefit cash payments and to receive Medicare Part D prescription cash reimbursements as follows:

	Retiree Health Care Benefits		Medicare Prescription Reimbursement			Expected Cash Payments - Net
2013	$	20,087	$	(2,176	)	$	17,911
2014	21,324		(2,357		)	18,967
2015	22,305		(2,531		)	19,774
2016	23,011		(2,698		)	20,313
2017	23,357		(680		)	22,677
2018 through 2022	114,784		(2,187		)	112,597
Total expected benefit cash payments	$	224,868	$	(12,629	)	$	212,239

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Pension, Health Care and Postretirement Benefits Other Than Pensions (Details) (USD $)	12 Months Ended
	Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Investments at fair value:
Fair value of plan assets	$ 836,576,000		$ 732,523,000		$ 700,473,000
Short-term Investments [Member]
Investments at fair value:
Fair value of plan assets	68,795,000	[1]	9,408,000	[1]	33,050,000	[1]
Equity investments [Member]
Investments at fair value:
Fair value of plan assets	490,993,000	[2]	482,694,000	[2]	463,108,000	[2]
Fixed Income Investments [Member]
Investments at fair value:
Fair value of plan assets	239,558,000	[3]	202,939,000	[3]	185,163,000	[3]
Other Assets [Member]
Investments at fair value:
Fair value of plan assets	37,230,000	[4]	37,482,000	[4]	19,152,000	[4]
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Investments at fair value:
Fair value of plan assets	374,829,000		371,792,000		358,843,000
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Equity investments [Member]
Investments at fair value:
Fair value of plan assets	243,553,000	[2]	268,307,000	[2]	257,616,000	[2]
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Fixed Income Investments [Member]
Investments at fair value:
Fair value of plan assets	131,276,000	[3]	103,485,000	[3]	101,227,000	[3]
Significant Other Observable Inputs (Level 2) [Member]
Investments at fair value:
Fair value of plan assets	442,897,000		339,831,000		316,943,000
Significant Other Observable Inputs (Level 2) [Member] | Short-term Investments [Member]
Investments at fair value:
Fair value of plan assets	68,795,000	[1]	9,408,000	[1]	33,050,000	[1]
Significant Other Observable Inputs (Level 2) [Member] | Equity investments [Member]
Investments at fair value:
Fair value of plan assets	247,440,000	[2]	214,387,000	[2]	205,492,000	[2]
Significant Other Observable Inputs (Level 2) [Member] | Fixed Income Investments [Member]
Investments at fair value:
Fair value of plan assets	108,282,000	[3]	99,454,000	[3]	78,401,000	[3]
Significant Other Observable Inputs (Level 2) [Member] | Other Assets [Member]
Investments at fair value:
Fair value of plan assets	18,380,000	[4]	16,582,000	[4]
Significant Unobservable Inputs (Level 3) [Member]
Investments at fair value:
Fair value of plan assets	18,850,000		20,900,000		24,687,000		22,993,000
Significant Unobservable Inputs (Level 3) [Member] | Fixed Income Investments [Member]
Investments at fair value:
Fair value of plan assets					5,535,000	[3]	5,265,000
Significant Unobservable Inputs (Level 3) [Member] | Other Assets [Member]
Investments at fair value:
Fair value of plan assets	18,850,000	[4]	20,900,000	[4]	19,152,000	[4]	17,728,000
Domestic Defined Benefit Pension Plans [Member]
Net pension costs:
Service costs	19,061,000		17,933,000		16,906,000
Interest costs	17,442,000		18,602,000		18,028,000
Expected returns on plan assets	(44,841,000)		(46,441,000)		(42,311,000)
Amortization of prior service costs	1,591,000		1,635,000		1,661,000
Amortization of actuarial losses	22,205,000		16,865,000		18,943,000
Ongoing pension costs	15,458,000		8,594,000		13,227,000
Net pension costs	15,458,000		8,594,000		13,227,000
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial (gains) losses arising during the year	(26,459,000)		48,745,000		681,000
Prior service costs during the year	2,495,000		1,195,000
Amortization of prior service costs	(1,591,000)		(1,635,000)		(1,661,000)
Amortization of actuarial losses	(22,205,000)		(16,865,000)		(18,943,000)
Total recognized in Cumulative other comprehensive loss	(47,760,000)		31,440,000		(19,923,000)
Total recognized in net pension costs and Cumulative other comprehensive loss	(32,302,000)		40,034,000		(6,696,000)
Investments at fair value:
Fair value of plan assets	703,563,000		614,463,000		634,725,000		577,047,000
Foreign Defined Benefit Pension Plans [Member]
Net pension costs:
Service costs	3,654,000		3,055,000		2,061,000
Interest costs	6,927,000		5,954,000		4,266,000
Expected returns on plan assets	(6,799,000)		(5,535,000)		(2,842,000)
Amortization of prior service costs					29,000
Amortization of actuarial losses	1,022,000		493,000		1,363,000
Ongoing pension costs	4,804,000		3,967,000		4,877,000
Settlement costs (credits)	47,000		(235,000)
Net pension costs	4,851,000		3,732,000		4,877,000
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial (gains) losses arising during the year	14,131,000		15,944,000		(10,043,000)
Amortization of prior service costs					(29,000)
Amortization of actuarial losses	(1,022,000)		(493,000)		(1,363,000)
Exchange rate gain (loss) recognized during the year	1,464,000		(387,000)		(1,536,000)
Total recognized in Cumulative other comprehensive loss	14,573,000		15,064,000		(12,971,000)
Total recognized in net pension costs and Cumulative other comprehensive loss	19,424,000		18,796,000		(8,094,000)
Investments at fair value:
Fair value of plan assets	$ 133,013,000		$ 118,060,000		$ 65,748,000		$ 55,870,000

[1] This category includes a full range of high quality, short-term money market securities.

[2] This category includes actively managed equity assets that track primarily to the S&P 500.

[3] This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.

[4] This category consists of venture capital funds.

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Goodwill, Intangible and Long-Lived Assets

12 Months Ended

Dec. 31, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS

GOODWILL, INTANGIBLE AND LONG-LIVED ASSETS

During 2012, the Company recognized $42,064 of goodwill and $15,899 of indefinite-lived trademarks in the acquisitions of Geocel and Pulanna. Acquired customer relationships, finite-lived trademarks and covenants not to compete recognized in these acquisitions valued at $27,487, $13,000 and $9,720, respectively, are being amortized over periods ranging from 6 to 15 years from the date of acquisition.

During 2011, the Company recognized $5,039 of goodwill in the acquisition of Leighs Paints. Acquired technology, trademarks and customer relationships recognized in this acquisition valued at $4,794, $2,125 and $1,918, respectively, are being amortized over periods ranging from 5 to 10 years from the date of acquisition.

During 2010, the Company recognized $79,909 of goodwill and $18,007 of trademarks in the acquisitions of Sayerlack Industrial Coatings (Sayerlack), Becker Industrial Products AB (Acroma) and Pinturas Condor S.A. (Pinturas Condor). Customer relationships valued at $35,886 recognized in the acquisitions of Acroma and Pinturas Condor are being amortized over periods of 15 and 19 years, respectively, from the date of acquisition.

In accordance with the Property, Plant and Equipment Topic of the ASC, whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable or the useful life may have changed, impairment tests are to be performed. Undiscounted cash flows are to be used to calculate the recoverable value of long-lived assets to determine if such assets are impaired. Where impairment is identified, a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets, is to be used to determine the fair value for the assets to measure any potential impairment.

In 2011, a reduction in the carrying value of property, plant and equipment associated with a facility closed during 2008 was recorded (see Note 5).

During 2010, a reduction in the carrying value of property, plant and equipment associated with one manufacturing facility closed during 2009 was recorded (see Note 5). In addition, finite-lived intangible assets and property, plant and equipment

in the Global Finishes Group had reductions in carrying value of $4,364 and $2,177, respectively, due to undiscounted cash flow projections below carrying values.

In accordance with the Goodwill and Other Intangibles Topic of the ASC, goodwill and indefinite-lived intangible assets are tested for impairment annually, and interim impairment tests are performed whenever an event occurs or circumstances change that indicate an impairment has more likely than not occurred. October 1 has been established for the annual impairment review. At the time of impairment testing, values are estimated separately for goodwill and trademarks with indefinite lives using a discounted cash flow valuation model, incorporating discount rates commensurate with the risks involved for each group of assets. An optional qualitative assessment may alleviate the need to perform the quantitative goodwill impairment test when impairment is unlikely. The Company used the qualitative assessment for each of its reporting units in 2012. Impairments of trademarks with indefinite lives have been reported as a separate line in the Statements of Consolidated Income.

The annual impairment review performed as of October 1, 2012 resulted in trademark impairments in the Paint Stores Group and Global Finishes Group of $3,400 and $686, respectively, and no goodwill impairment. The trademark impairments related primarily to the planned conversion of various acquired brands.

The annual impairment review performed as of October 1, 2011 resulted in trademark impairments in the Paint Stores Group and Global Finishes Group of $4,669 and $823, respectively, and no goodwill impairment. The trademark impairments related primarily to lower-than-anticipated sales of acquired brands.

The annual impairment review performed as of October 1, 2010 resulted in trademark impairment in the Paint Stores Group of $120 and no goodwill impairment. The trademark impairment related primarily to lower-than-anticipated sales of an acquired brand.

Amortization of finite-lived intangible assets is as follows for the next five years: $33,279 in 2013, $29,840 in 2014, $25,866 in 2015 and $22,145 in 2016 and $18,003 in 2017.

A summary of changes in the Company’s carrying value of goodwill by reportable segment is as follows:

Goodwill	Paint Stores Group			Consumer Group			Global Finishes Group			Latin America Coatings Group			Consolidated Totals
Balance at January 1, 2010 (a)	$	285,445		$	686,612		$	42,397		$	371		$	1,014,825
Acquisitions							70,594			9,315			79,909
Currency and other adjustments	1,299			2,776			2,728			921			7,724
Balance at December 31, 2010 (a)	286,744			689,388			115,719			10,607			1,102,458
Acquisitions							5,039						5,039
Currency and other adjustments	254			(109		)	(408		)	774			511
Balance at December 31, 2011 (a)	286,998			689,279			120,350			11,381			1,108,008
Acquisitions				17,357			24,707						42,064
Currency and other adjustments	(214		)	(344		)	7,230			(739		)	5,933
Balance at December 31, 2012 (a)	$	286,784		$	706,292		$	152,287		$	10,642		$	1,156,005

(a) Net of accumulated impairment losses of $8,904 ($8,113 in the Consumer Group and $791 in the Global Finishes Group).

A summary of the Company’s carrying value of intangible assets is as follows: 

	Finite-lived intangible assets									Trademarks with indefinite lives		Total intangible assets
	Software			All other			Subtotal
December 31, 2012
Weighted-average amortization period	8 years			12 years			11 years
Gross	$	107,779		$	337,089		$	444,868
Accumulated amortization	(66,106		)	(193,959		)	(260,065		)
Net value	$	41,673		$	143,130		$	184,803		$	162,750	$	347,553
December 31, 2011
Weighted-average amortization period	7 years			13 years			11 years
Gross	$	109,401		$	274,086		$	383,487
Accumulated amortization	(60,030		)	(177,706		)	(237,736		)
Net value	$	49,371		$	96,380		$	145,751		$	160,122	$	305,873
December 31, 2010
Weighted-average amortization period	8 years			13 years			11 years
Gross	$	107,141		$	254,462		$	361,603
Accumulated amortization	(57,480		)	(171,153		)	(228,633		)
Net value	$	49,661		$	83,309		$	132,970		$	187,534	$	320,504

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Exit or Disposal Activities

12 Months Ended

Dec. 31, 2012

Restructuring and Related Activities [Abstract]

EXIT OR DISPOSAL ACTIVITIES

EXIT OR DISPOSAL ACTIVITIES

Management is continually re-evaluating the Company’s operating facilities, including acquired operating facilities, against its long-term strategic goals. Liabilities associated with exit or disposal activities are recognized as incurred in accordance with the Exit or Disposal Cost Obligations Topic of the ASC. Provisions for qualified exit costs are made at the time a facility is no longer operational. Qualified exit costs primarily include post-closure rent expenses or costs to terminate the contract before the end of its term and costs of employee terminations. Adjustments may be made to liabilities accrued for qualified exit costs if information becomes available upon which more accurate amounts can be reasonably estimated. Concurrently, property, plant and equipment is tested for impairment in accordance with the Property, Plant and Equipment Topic of the ASC, and if impairment exists, the carrying value of the related assets is reduced to estimated fair value. Additional impairment may be recorded for subsequent revisions in estimated fair value. Adjustments to prior provisions and additional impairment charges for property, plant and equipment of closed sites being held for disposal are recorded in Other general expense – net.

During 2012, 19 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other qualified exit cost of $7,363 and $313 were charged to the Global Finishes Group and Paint Stores Group, respectively. There were no provisions for severance and other qualified exit costs charged to the Consumer Group or Latin America Coatings Group. Adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2012 of $(4,942) were recorded.

During 2011, 22 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other qualified exit costs of $913, $339 and $182 were charged to the Global Finishes Group, Consumer Group and Paint Stores Group, respectively. There were no provisions for severance and other qualified exit costs charged to the Latin America Coatings Group. Adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2011 of $(900) were recorded. In 2011, a reduction of $3,263 in the carrying value of property, plant and equipment associated with a facility closed in 2008 was recorded in the Paint Stores Group.

During 2010, 23 stores and branches were closed due to lower demand or redundancy. Provisions for severance and other qualified exit costs of $1,314, $457 and $182 were charged to the Global Finishes Group, Consumer Group and Paint Stores Group, respectively. Adjustments to prior provisions related to manufacturing facilities, distribution facilities, stores and branches closed prior to 2010 of $(5,764) were recorded. In 2010, a reduction of $1,164 in the carrying value of the property, plant and equipment associated with a manufacturing facility closed in 2009 was recorded.

At December 31, 2012, a portion of the remaining accrual for qualified exit costs relating to facilities shutdown prior to 2010 is expected to be incurred by the end of 2013. The remaining portion of the ending accrual for facilities shutdown prior to 2010 primarily represented post-closure contractual expenses related to certain owned facilities which are closed and being held for disposal or involved in ongoing environmental-related activities. The Company cannot reasonably estimate when such matters will be concluded to permit disposition.

The tables on the following pages summarize the activity and remaining liabilities associated with qualified exit costs:

Exit Plan	Balance at December 31, 2011		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2012
Paint Stores Group stores shutdown in 2012:
Other qualified exit costs			$	313							$	313
Global Finishes Group facility shutdown in 2012:
Severance and related costs			3,933		$	(1,697	)				2,236
Other qualified exit costs			3,430								3,430
Consumer Group manufacturing facilities shutdown in 2011:
Severance and related costs	$	197			(133		)	$	(64	)
Paint Stores Group stores shutdown in 2011:
Other qualified exit costs	156				(144		)	(12		)
Global Finishes Group branches shutdown in 2011:
Severance and related costs	129				(134		)	5
Other qualified exit costs	470				(180		)				290
Global Finishes Group branches shutdown in 2010:
Other qualified exit costs	955				(133		)				822
Other qualified exit costs for facilities shutdown prior to 2010	8,493				(2,156		)	(4,871		)	1,466
Totals	$	10,400	$	7,676	$	(4,577	)	$	(4,942	)	$	8,557

Exit Plan	Balance at December 31, 2010		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2011
Consumer Group manufacturing facilities shutdown in 2011:
Severance and related costs			$	339	$	(142	)				$	197
Paint Stores Group stores shutdown in 2011:
Other qualified exit costs			182		(26		)				156
Global Finishes Group branches shutdown in 2011:
Severance and related costs			316		(187		)				129
Other qualified exit costs			597		(127		)				470
Global Finishes Group branches shutdown in 2010:
Other qualified exit costs	$	1,114			(159		)				955
Paint Stores Group stores shutdown in 2010:
Other qualified exit costs	4							$	(4	)
Paint Stores Group stores shutdown in 2009:
Other qualified exit costs	2,022				(805		)	3			1,220
Global Finishes Group manufacturing facility and branches shutdown in 2009:
Other qualified exit costs	1,820				(918		)	262			1,164
Consumer Group manufacturing facilities shutdown in 2009:
Other qualified exit costs	721				(245		)	(74		)	402
Other qualified exit costs for facilities shutdown prior to 2009	10,366				(3,572		)	(1,087		)	5,707
Totals	$	16,047	$	1,434	$	(6,181	)	$	(900	)	$	10,400

Exit Plan	Balance at January 1, 2010		Provisions in Cost of goods sold or SG&A		Actual expenditures charged to accrual			Adjustments to prior provisions in Other general expense - net			Balance at December 31, 2010
Global Finishes Group branches shutdown in 2010:
Severance and related costs			$	31	$	(31	)
Other qualified exit costs			1,283		(169		)				$	1,114
Paint Stores Group stores shutdown in 2010:
Other qualified exit costs			182		(178		)				4
Paint Stores Group stores shutdown in 2009:
Other qualified exit costs	$	3,213			(1,213		)	$	22		2,022
Consumer Group manufacturing facilities shutdown in 2009:
Severance and related costs	4,532		457		(3,534		)	(1,455		)
Other qualified exit costs	2,258				(612		)	(925		)	721
Global Finishes Group manufacturing facility and branches shutdown in 2009:
Severance and related costs	204				(78		)	(126		)
Other qualified exit costs	3,703				(1,288		)	(595		)	1,820
Paint Stores Group manufacturing and distribution facilities, administrative offices and stores shutdown in 2008:
Severance and related costs	70				(66		)	(4		)
Other qualified exit costs	5,426				(1,864		)	(504		)	3,058
Consumer Group manufacturing and distribution facilities shutdown in 2008:
Severance and related costs	311							(311		)
Other qualified exit costs	83				(60		)	219			242
Global Finishes Group administrative offices and branches shutdown in 2008:
Other qualified exit costs	88				(88		)
Other qualified exit costs for facilities shutdown prior to 2008	11,245				(2,094		)	(2,085		)	7,066
Totals	$	31,133	$	1,953	$	(11,275	)	$	(5,764	)	$	16,047

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Debt

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

DEBT

– DEBT

Long-term debt

	Due Date	2012		2011		2010
1.35% Senior Notes	2017	$	699,091
3.125% Senior Notes	2014	499,912		$	499,867	$	499,822
4.00% Senior Notes	2042	298,493
7.375% Debentures	2027	129,060		129,056		129,053
7.45% Debentures	2097	3,500		3,500		3,500
2.00% to 2.02% Promissory Notes	Through 2023	2,109		6,808		15,951
		$	1,632,165	$	639,231	$	648,326

Maturities of long-term debt are as follows for the next five years: $3,689 in 2013; $500,488 in 2014; $325 in 2015; $146 in 2016 and $700,149 in 2017. Interest expense on long-term debt was $36,188, $31,883 and $64,442 for 2012, 2011 and 2010, respectively.

Among other restrictions, the Company’s Notes, Debentures and revolving credit agreement contain certain covenants relating to liens, ratings changes, merger and sale of assets, consolidated leverage and change of control as defined in the agreements. In the event of default under any one of these arrangements, acceleration of the maturity of any one or more of these borrowings may result. The Company was in compliance with all covenants for all years presented.

On December 4, 2012, the Company issued $700,000 of 1.35% Senior Notes due 2017 and $300,000 of 4.00% Senior

Notes due 2042. The Senior Notes are covered under a shelf registration filed with the Securities and Exchange Commission (SEC) on December 16, 2009. The proceeds will be used for general corporate purposes, including repayment of short-term borrowings and financing acquisitions.

During 2010, the Company repurchased $136,500 of its publicly traded 7.45% Debentures due 2097. Costs related to the repurchase increased interest expense by $24,165.

Short-term borrowings. At December 31, 2012, there were no borrowings outstanding under the domestic commercial paper program. At December 31, 2011 and 2010, borrowings outstanding under the domestic commercial paper program totaled $264,902 and $173,490, respectively, and were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 0.2% at December 31, 2011 and 2010. Borrowings outstanding under various foreign programs of $69,035, $81,375 and $215,102 at December 31, 2012, 2011 and 2010, respectively, were included in Short-term borrowings. The weighted-average interest rate related to these borrowings was 2.8%, 4.9% and 2.9% at December 31, 2012, 2011 and 2010, respectively.

On July 19, 2010, Sherwin-Williams Luxembourg S.à r.l., a wholly-owned subsidiary of the Company, entered into a €200,000 (Euro) credit facility. On December 28, 2010, the Company reduced the aggregate amount of this credit facility to €150,000 (Euro). During 2011, the aggregate amount of this credit facility was further reduced to €97,000 (Euro). On September 19, 2012, this credit facility was replaced by a new €95,000 (Euro) five-year revolving credit facility. On July 19, 2010, Sherwin-Williams Canada Inc., a wholly-owned subsidiary of the Company, entered into a CAD 75,000 credit facility. On June 29, 2012, this credit facility was replaced by a new CAD 75,000 five-year credit facility. These credit facilities are being used for general corporate purposes, including refinancing indebtedness and for acquisitions.

On January 30, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit of up to an aggregate availability of $500,000. On April 23, 2012, the Company entered into a five-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. On November 14, 2012, the Company entered into a three-year credit agreement, subsequently amended on multiple dates, which gives the Company the right to borrow and to obtain the issuance, renewal, extension and increase of a letter of credit up to an aggregate availability of $250,000. The three credit agreements entered into in 2012 replace prior credit facilities that matured in 2012 and 2011. At December 31, 2012, 2011 and 2010, there were no borrowings outstanding under any of these credit agreements.

The Company uses a revolving credit agreement primarily to satisfy its commercial paper program’s dollar for dollar liquidity requirement. On January 8, 2010, the Company terminated the existing $845,000 revolving credit agreement and entered into a new $500,000 revolving credit agreement. On July 8, 2011, the Company entered into a new five-year $1.05 billion revolving credit agreement, which replaced the existing three-year $500,000 credit agreement. The new credit agreement allows the Company to extend the maturity of the facility with two one-year extension options and to increase the aggregate amount of the facility to $1.30 billion, both of which are subject to the discretion of each lender.

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Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 4) (Postretirement Benefits Other than Pensions [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Postretirement Benefits Other than Pensions [Member]
Net pension costs:
Service cost	$ 2,943	$ 3,495	$ 3,532
Interest cost	13,520	15,580	16,066
Amortization of actuarial losses	1,715	2,505	1,304
Amortization of prior service credit	(656)	(657)	(656)
Net pension costs	17,522	20,923	20,246
Other changes in projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial loss (gain)	18,961	(3,965)	11,067
Amortization of actuarial losses	(1,715)	(2,505)	(1,304)
Amortization of prior service credit	656	657	656
Total recognized in Cumulative other comprehensive loss	17,902	(5,813)	10,419
Total recognized in net periodic benefit cost and Cumulative other comprehensive loss	$ 35,424	$ 15,110	$ 30,665

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Operating Leases (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Future minimum lease payments under noncancellable operating leases
2013	$ 242,360
2014	226,975
2015	192,117
2016	151,654
2017	103,573
Later years	191,844
Total minimum lease payments	$ 1,108,523

XML

Debt (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Long-term debt
Long-term debt	$ 1,632,165	$ 639,231	$ 648,326
1.35% Senior notes due 2017 [Member]
Long-term debt
Long-term debt	699,091
3.125% Senior notes due 2014 [Member]
Long-term debt
Long-term debt	499,912	499,867	499,822
4.00% Senior notes due 2042 [Member]
Long-term debt
Long-term debt	298,493
7.375% Debentures due 2027 [Member] | Subordinated Debentures Subject To Mandatory Redemption [Member]
Long-term debt
Long-term debt	129,060	129,056	129,053
7.45% Debentures due 2097 [Member] | Subordinated Debentures Subject To Mandatory Redemption [Member]
Long-term debt
Long-term debt	3,500	3,500	3,500
2.00% to 2.02% Promissory Notes Through 2023 [Member]
Long-term debt
Long-term debt	$ 2,109	$ 6,808	$ 15,951

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Pension, Health Care and Postretirement Benefits Other Than Pensions (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Liabilities recognized in the Consolidated Balance Sheets:
Postretirement benefits other than pensions	$ (320,223,000)	$ (297,528,000)	$ (295,896,000)
Other accruals	(513,717,000)	(471,761,000)	(442,030,000)
Postretirement Benefits Other than Pensions [Member]
Benefit obligation:
Balances at beginning of year	316,795,000	315,572,000	300,526,000
Service cost	2,943,000	3,495,000	3,532,000
Interest cost	13,520,000	15,580,000	16,066,000
Actuarial loss (gain)	18,961,000	(3,965,000)	11,067,000
Benefits paid	(14,085,000)	(13,887,000)	(15,619,000)
Balances at end of year	338,134,000	316,795,000	315,572,000
Liabilities recognized in the Consolidated Balance Sheets:
Postretirement benefits other than pensions	(320,223,000)	(297,528,000)	(295,896,000)
Other accruals	(17,911,000)	(19,267,000)	(19,676,000)
Total	(338,134,000)	(316,795,000)	(315,572,000)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	(62,814,000)	(45,567,000)	(52,037,000)
Prior service costs	(328,000)	(983,000)	(1,640,000)
Total recognized in Cumulative other comprehensive loss	$ (62,486,000)	$ (44,584,000)	$ (50,397,000)
Weighted-average assumptions used to determine benefit obligation:
Discount rate	3.70%	4.40%	5.10%
Health care cost trend rate - pre-65	8.00%	8.00%	7.50%
Health care cost trend rate - post-65	8.00%	8.00%	7.50%
Prescription drug cost increases	8.00%	8.00%	8.00%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	4.40%	5.10%	5.50%
Health care cost trend rate - pre-65	8.00%	7.50%	8.00%
Health care cost trend rate - post-65	8.00%	7.50%	8.00%
Prescription drug cost increases	8.00%	8.00%	9.00%

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Pension, Health Care and Postretirement Benefits Other Than Pensions (Tables)

12 Months Ended

Dec. 31, 2012

Compensation and Retirement Disclosure [Abstract]

Health care, pension and other benefits

The following table summarizes the components of the net pension costs and Cumulative other comprehen-sive loss related to the defined benefit pension plans:

	Domestic Defined Benefit Pension Plans									Foreign Defined Benefit Pension Plans
	2012			2011			2010			2012			2011			2010
Net pension costs:
Service costs	$	19,061		$	17,933		$	16,906		$	3,654		$	3,055		$	2,061
Interest costs	17,442			18,602			18,028			6,927			5,954			4,266
Expected returns on plan assets	(44,841		)	(46,441		)	(42,311		)	(6,799		)	(5,535		)	(2,842		)
Amortization of prior service costs	1,591			1,635			1,661									29
Amortization of actuarial losses	22,205			16,865			18,943			1,022			493			1,363
Ongoing pension costs	15,458			8,594			13,227			4,804			3,967			4,877
Settlement costs (credits)										47			(235		)
Net pension costs	15,458			8,594			13,227			4,851			3,732			4,877
Other changes in plan assets and projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial (gains) losses arising during the year	(26,459		)	48,745			681			14,131			15,944			(10,043		)
Prior service costs during the year	2,495			1,195
Amortization of prior service costs	(1,591		)	(1,635		)	(1,661		)							(29		)
Amortization of actuarial losses	(22,205		)	(16,865		)	(18,943		)	(1,022		)	(493		)	(1,363		)
Exchange rate gain (loss) recognized during the year										1,464			(387		)	(1,536		)
Total recognized in Cumulative other comprehensive loss	(47,760		)	31,440			(19,923		)	14,573			15,064			(12,971		)
Total recognized in net pension costs and Cumulative other comprehensive loss	$	(32,302	)	$	40,034		$	(6,696	)	$	19,424		$	18,796		$	(8,094	)

Fair value of the defined benefit pension plan assets

The following tables summarize the fair value of the defined benefit pension plan assets at December 31, 2012, 2011 and 2010:

	Fair Value at December 31, 2012		Quoted Prices in  Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	68,795			$	68,795
Equity investments (b)	490,993		$	243,553	247,440
Fixed income investments (c)	239,558		131,276		108,282
Other assets (d)	37,230				18,380		$	18,850
	$	836,576	$	374,829	$	442,897	$	18,850
	Fair Value at December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	9,408			$	9,408
Equity investments (b)	482,694		$	268,307	214,387
Fixed income investments (c)	202,939		103,485		99,454
Other assets (d)	37,482				16,582		$	20,900
	$	732,523	$	371,792	$	339,831	$	20,900
	Fair Value at December 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments at fair value:
Short-term investments (a)	$	33,050			$	33,050
Equity investments (b)	463,108		$	257,616	205,492
Fixed income investments (c)	185,163		101,227		78,401		$	5,535
Other assets (d)	19,152						19,152
	$	700,473	$	358,843	$	316,943	$	24,687

(a) This category includes a full range of high quality, short-term money market securities.

(b) This category includes actively managed equity assets that track primarily to the S&P 500.

(c) This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index.

(d) This category consists of venture capital funds.

Changes in the fair value of the defined benefit pension plan assets classified as level 3

The following tables summarize the changes in the fair value of the defined benefit pension plan assets classified as level 3 at December 31, 2012, 2011 and 2010: 

	Balance at December 31, 2011		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2012
Other assets	$	20,900	$	(3,827	)	$	1,777	$	18,850
	Balance at December 31, 2010		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2011
Fixed income investments	$	5,535	$	(5,717	)	$	182
Other assets	19,152		(1,389		)	3,137		$	20,900
	$	24,687	$	(7,106	)	$	3,319	$	20,900
	Balance at January 1,  2010		Dispositions			Realized and Unrealized Gains		Balance at December 31, 2010
Fixed income investments	$	5,265	$	(269	)	$	539	$	5,535
Other assets	17,728		(695		)	2,119		19,152
	$	22,993	$	(964	)	$	2,658	$	24,687

Obligations, plan assets and assumption used for defined benefit pension plan

The following table summarizes the obligations, plan assets and assumptions used for the defined benefit pension plans, which are all measured as of December 31:

	Domestic Defined Benefit Pension Plans									Foreign Defined Benefit Pension Plans
	2012			2011			2010			2012			2011			2010
Accumulated benefit obligations at end of year	$	460,591		$	415,163		$	371,195		$	142,769		$	121,137		$	67,964
Projected benefit obligations:
Balances at beginning of year	$	410,029		$	390,257		$	339,275		$	141,465		$	85,936		$	75,175
Service costs	19,061			17,933			16,906			3,654			3,055			2,061
Interest costs	17,442			18,602			18,028			6,927			5,954			4,266
Actuarial losses (gains)	48,346			8,428			41,739			17,532			11,395			(6,950		)
Acquisitions of businesses and other	2,496			1,194						(975		)	42,131			14,378
Effect of foreign exchange										6,633			(3,760		)	(1,063		)
Benefits paid	(30,547		)	(26,385		)	(25,691		)	(6,478		)	(3,246		)	(1,931		)
Balances at end of year	466,827			410,029			390,257			168,758			141,465			85,936
Plan assets:
Balances at beginning of year	614,463			634,725			577,047			118,060			65,748			55,870
Actual returns on plan assets	119,647			6,123			83,369			10,201			987			5,935
Acquisitions of businesses and other										6,205			57,761			7,085
Effect of foreign exchange										5,025			(3,190		)	(1,211		)
Benefits paid	(30,547		)	(26,385		)	(25,691		)	(6,478		)	(3,246		)	(1,931		)
Balances at end of year	703,563			614,463			634,725			133,013			118,060			65,748
Excess (deficient) plan assets over projected benefit obligations	$	236,736		$	204,434		$	244,468		$	(35,745	)	$	(23,405	)	$	(20,188	)
Assets and liabilities recognized in the Consolidated Balance Sheets:
Deferred pension assets	$	245,588		$	218,676		$	244,468		$	4,323		$	9,674		$	3,865
Other accruals										(869		)	(829		)	(272		)
Other long-term liabilities	(8,852		)	(14,242		)				(39,199		)	(32,250		)	(23,781		)
	$	236,736		$	204,434		$	244,468		$	(35,745	)	$	(23,405	)	$	(20,188	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(163,088	)	$	(211,752	)	$	(179,871	)	$	(41,567	)	$	(26,994	)	$	(11,930	)
Prior service costs	(6,110		)	(5,206		)	(5,647		)
	$	(169,198	)	$	(216,958	)	$	(185,518	)	$	(41,567	)	$	(26,994	)	$	(11,930	)
Weighted-average assumptions used to determine projected benefit obligations:
Discount rate	3.73		%	4.40		%	4.97		%	4.58		%	4.94		%	5.45		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%	4.08		%	4.05		%	4.06		%
Weighted-average assumptions used to determine net pension costs:
Discount rate	4.40		%	4.97		%	5.50		%	4.94		%	5.48		%	5.57		%
Expected long-term rate of return on assets	7.50		%	7.50		%	7.50		%	6.04		%	6.12		%	5.46		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%	4.04		%	4.06		%	3.74		%

Obligation and the assumptions used for postretirement benefits other than pensions

The following table summarizes the obligation and the assumptions used for postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2012			2011			2010
Benefit obligation:
Balance at beginning of year - unfunded	$	316,795		$	315,572		$	300,526
Service cost	2,943			3,495			3,532
Interest cost	13,520			15,580			16,066
Actuarial loss (gain)	18,961			(3,965		)	11,067
Benefits paid	(14,085		)	(13,887		)	(15,619		)
Balance at end of year - unfunded	$	338,134		$	316,795		$	315,572
Liabilities recognized in the Consolidated Balance Sheets:
Postretirement benefits other than pensions	$	(320,223	)	$	(297,528	)	$	(295,896	)
Other accruals	(17,911		)	(19,267		)	(19,676		)
	$	(338,134	)	$	(316,795	)	$	(315,572	)
Amounts recognized in Cumulative other comprehensive loss:
Net actuarial losses	$	(62,814	)	$	(45,567	)	$	(52,037	)
Prior service costs	328			983			1,640
	$	(62,486	)	$	(44,584	)	$	(50,397	)
Weighted-average assumptions used to determine benefit obligation:
Discount rate	3.70		%	4.40		%	5.10		%
Health care cost trend rate - pre-65	8.00		%	8.00		%	7.50		%
Health care cost trend rate - post-65	8.00		%	8.00		%	7.50		%
Prescription drug cost increases	8.00		%	8.00		%	8.00		%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	4.40		%	5.10		%	5.50		%
Health care cost trend rate - pre-65	8.00		%	7.50		%	8.00		%
Health care cost trend rate - post-65	8.00		%	7.50		%	8.00		%
Prescription drug cost increases	8.00		%	8.00		%	9.00		%

Components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions

The following table summarizes the components of the net periodic benefit cost and cumulative other comprehensive loss related to postretirement benefits other than pensions:

	Postretirement Benefits Other than Pensions
	2012			2011			2010
Net periodic benefit cost:
Service cost	$	2,943		$	3,495		$	3,532
Interest cost	13,520			15,580			16,066
Amortization of actuarial losses	1,715			2,505			1,304
Amortization of prior service credit	(656		)	(657		)	(656		)
Net periodic benefit cost	17,522			20,923			20,246
Other changes in projected benefit obligation recognized in Cumulative other comprehensive loss (before taxes):
Net actuarial loss (gain)	18,961			(3,965		)	11,067
Amortization of actuarial losses	(1,715		)	(2,505		)	(1,304		)
Amortization of prior service credit	656			657			656
Total recognized in Cumulative other comprehensive loss	17,902			(5,813		)	10,419
Total recognized in net periodic benefit cost and Cumulative other comprehensive loss	$	35,424		$	15,110		$	30,665

Significant effect on amounts reported for service and interest rate component and postretirement health care benefit obligation

A one-percentage-point change in assumed health care and prescription drug cost trend rates would have had the following effects at December 31, 2012:

	One-Percentage-Point
	Increase		(Decrease)
Effect on total of service and interest cost components	$	117	$	(124	)
Effect on the postretirement benefit obligation	$	2,938	$	(3,039	)

Retiree health care benefit cash payments

The Company expects to make retiree health care benefit cash payments and to receive Medicare Part D prescription cash reimbursements as follows:

	Retiree Health Care Benefits		Medicare Prescription Reimbursement			Expected Cash Payments - Net
2013	$	20,087	$	(2,176	)	$	17,911
2014	21,324		(2,357		)	18,967
2015	22,305		(2,531		)	19,774
2016	23,011		(2,698		)	20,313
2017	23,357		(680		)	22,677
2018 through 2022	114,784		(2,187		)	112,597
Total expected benefit cash payments	$	224,868	$	(12,629	)	$	212,239

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Significant Accounting Policies (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012 Contract	Dec. 31, 2011 Contract	Dec. 31, 2010 Contract
Significant Accounting Policies (Textual) [Abstract]
Number of Derivative Contracts Outstanding	0	0	0
Allowance for Doubtful Accounts Receivable, Current	$ 47,667	$ 51,747	$ 59,310
Inventory Valuation Reserves	88,356	82,671	74,372
Accumulated amortization of finite-lived intangible assets	260,065	237,736	228,633
Amounts outstanding under standby letter of credit agreements	22,845	18,819	22,300
Cumulative other comprehensive loss included adjustments for foreign currency translation	204,195	196,792	131,160
Prior service costs and net actuarial losses related to pension and other postretirement benefit plans	166,595	171,376	148,006
Unrealized net gains on marketable equity securities and derivative instruments used in cash flow hedges	401	290	845
Research and development costs included in technical expenditures	44,648	41,719	39,883
Advertising cost	$ 247,469	$ 227,303	$ 217,637

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Effective April 19, 2006, the shareholders approved the 2006 Employee Plan, replacing the 2003 Stock Plan and authorizing the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 10,000,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or cancelled. Effective April 21, 2010, the 2006 Employee Plan was amended and restated to increase the number of shares that may be issued or transferred by 9,200,000 shares to 19,200,000 shares. The 2006 Employee Plan permits the granting of option rights, appreciation rights, restricted stock, restricted stock units, performance shares and performance units to eligible employees. At December 31, 2012, no appreciation rights, restricted stock units, performance shares or performance units had been granted under the 2006 Employee Plan. No further grants may be made under the 2003 Stock Plan, all rights granted under that plan remain.

Effective April 19, 2006, the shareholders also approved the 2006 Stock Plan for Nonemployee Directors (Nonemployee Director Plan), replacing the 1997 Stock Plan for Nonemployee Directors and authorizing the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 200,000 shares of common stock, plus any shares relating to awards that expire, are forfeited or are cancelled. The Nonemployee Director Plan permits the granting of option rights, appreciation rights, restricted stock and restricted stock units to members of the Board of Directors who are not employees of the Company. At December 31, 2012, no option rights, appreciation rights or restricted stock units had been granted under the Nonemployee Director Plan. No further grants may be made under the 1997 Stock Plan, all rights granted under that plan remain.

The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. The tax benefits associated with these share-based payments are classified as financing activities in the Statements of Consolidated Cash Flows.

At December 31, 2012, the Company had total unrecognized stock-based compensation expense of $68,558 that is expected to be recognized over a weighted-average period of 1.30 years. Stock-based compensation expense during 2012, 2011 and 2010 was $54,348, $48,176 and $42,276, respectively. The Company recognized a total income tax benefit related to stock-based compensation expense of $20,948, $18,570 and $16,290 during 2012, 2011 and 2010, respectively. The impact of total stock-based compensation expense, net of taxes, on net income reduced Basic and Diluted net income per common share by $.33 and $.32 during 2012, respectively.

Option rights. The fair value of the Company’s option rights was estimated at the date of grant using a Black-Scholes-Merton option-pricing model with the following weighted-average assumptions for all options granted:

	2012	2011	2010
Risk-free interest rate	.78%	1.13%	1.16%
Expected life of option rights	5.11 years	5.27 years	5.27 years
Expected dividend yield of stock	1.43%	1.77%	1.84%
Expected volatility of stock	.274	.303	.304

The risk-free interest rate is based upon the U.S. Treasury yield curve at the time of grant. The expected life of option rights was calculated using a scenario analysis model. Historical data was used to aggregate the holding period from actual exercises, post-vesting cancellations and hypothetical assumed exercises on all outstanding option rights. The expected dividend yield of stock is the Company’s best estimate of the expected future dividend yield. Expected volatility of stock was calculated using historical and implied volatilities. The Company applied an estimated forfeiture rate of 2.60 percent to the 2012 grants. This rate was calculated based upon historical activity and is an estimate of granted shares not expected to vest. If actual forfeitures differ from the expected rate, the Company may be required to make additional adjustments to compensation expense in future periods.

Grants of option rights for non-qualified and incentive stock options have been awarded to certain officers, key employees and nonemployee directors under the 2006 Employee Plan, the 2003 Stock Plan, and the 1997 Plan. The option rights generally become exercisable to the extent of one-third of the optioned shares for each full year following the date of grant and generally expire ten years after the date of grant. Unrecognized compensation expense with respect to option rights granted to eligible employees amounted to $37,974 at December 31, 2012. The unrecognized compensation expense is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted average period of 1.36 years.

The weighted-average per share grant date fair value of options granted during 2012, 2011 and 2010, respectively, was $32.74, $18.47 and $16.83. The total intrinsic value of exercised option rights for employees was $298,883, $53,100 and $74,440, and for nonemployee directors was $1,412, $1,129 and $626 during 2012, 2011 and 2010, respectively. The total fair value of options vested during the year was $25,879, $25,868 and

$25,073 during 2012, 2011 and 2010, respectively. The outstanding option rights for nonemployee directors were 3,500, 17,500 and 37,500 for 2012, 2011 and 2010, respectively. The Company issues new shares upon exercise of option rights or granting of restricted stock.

A summary of the Company’s non-qualified and incentive stock option right activity for employees and nonemployee directors, and related information for the years ended December 31 is shown in the following table:

	2012						2011						2010
	Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Optioned Shares		Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding beginning of year	9,857,695		$	60.31			10,009,385		$	55.82			10,897,652		$	50.30
Granted	1,089,240		152.93				1,407,259		78.72				1,586,984		72.48
Exercised	(4,140,822	)	53.40				(1,480,058	)	47.15				(2,436,639	)	41.95
Forfeited	(57,730	)	78.01				(76,354	)	67.02				(34,999	)	58.90
Expired	(257	)	72.65				(2,537	)	53.65				(3,613	)	54.71
Outstanding end of year	6,748,126		$	79.39	$	494,699	9,857,695		$	60.31	$	287,526	10,009,385		$	55.82	$	281,349
Exercisable at end of year	4,245,891		$	61.43	$	386,484	6,908,116		$	54.24	$	243,440	6,655,569		$	50.78	$	220,647

The weighted average remaining term for options outstanding at the end of 2012, 2011 and 2010, respectively, was 6.99, 6.54 and 6.76 years. The weighted average remaining term for options exercisable at the end of 2012, 2011 and 2010, respectively, was 5.79, 5.39 and 5.58 years. Shares reserved for future grants of option rights and restricted stock were 6,810,439, 8,155,734 and 9,826,006 at December 31, 2012, 2011 and 2010, respectively.

Restricted stock. Grants of restricted stock, which generally require three years of continuous employment from the date of grant before vesting and receiving the stock without restriction, have been awarded to certain officers and key employees under the 2006 Employee Plan. Prior to 2010, all awards were performance-based, and the shares of stock to be received without restriction under these plans were based on the Company’s achievement of specified financial goals relating to average return on average equity and earnings before interest, taxes, depreciation and amortization. The February 2012, 2011 and 2010 grants consisted of approximately two-thirds performance-based awards that vest at the end of a three year period based on the Company’s achievement of specified financial goals relating to average return on average equity and earnings per share (for the February 2010 grant) and earnings per share (for the February 2011 and 2012 grants) and one-third time-based awards that vest at the end of a three year period based on continuous employment. Unrecognized compensation expense with respect to grants of restricted stock to eligible employees amounted to $29,286 at December 31, 2012 and is being amortized on a straight-line basis over the vesting period and is expected to be recognized over a weighted average period of 1.12 years.

Grants of restricted stock have been awarded to nonemployee directors under the Nonemployee Plan and the 1997 Plan. These grants generally vest and stock is received without restriction to the extent of one-third of the granted stock for each year following the date of grant. Unrecognized compensation expense with respect to grants of restricted stock to nonemployee directors amounted to $1,298 at December 31, 2012 and is being amortized on a straight-line basis over the three-year vesting period and is expected to be recognized over a weighted average period of 1.43 years.

A summary of grants of restricted stock to certain officers, key employees and nonemployee directors during each year is as follows:

	2012		2011		2010
Restricted stock granted	301,856		300,677		348,460
Weighted-average per share fair value of restricted stock granted during the year	$	99.47	$	84.86	$	64.49

A summary of the Company’s restricted stock activity for the years ended December 31 is shown in the following table:

	2012		2011		2010
Outstanding at beginning of year	1,304,891		1,266,201		1,304,386
Granted	301,856		300,677		348,460
Vested	(412,859	)	(16,072	)	(300,598	)
Forfeited	(274,140	)	(245,915	)	(86,047	)
Outstanding at end of year	919,748		1,304,891		1,266,201

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Operating Leases

12 Months Ended

Dec. 31, 2012

Leases [Abstract]

OPERATING LEASES

OPERATING LEASES

The Company leases certain stores, warehouses, manufacturing facilities, office space and equipment. Renewal options are available on the majority of leases and, under certain conditions, options exist to purchase certain properties. Rental expense for operating leases, recognized on a straight-line basis over the lease term in accordance with the Leases Topic of the ASC was $310,109, $292,516 and $282,309 for 2012, 2011 and 2010, respectively. Certain store leases require the payment of contingent rentals based on sales in excess of specified minimums. Contingent rentals included in rent expense were $39,340, $36,917 and $37,602 in 2012, 2011 and 2010, respectively. Rental income, as lessor, from real estate leasing activities and sublease rental income for all years presented was not significant. The following schedule summarizes the future minimum lease payments under noncancellable operating leases having initial or remaining terms in excess of one year at December 31, 2012:

2013	$	242,360
2014	226,975
2015	192,117
2016	151,654
2017	103,573
Later years	191,844
Total minimum lease payments	$	1,108,523

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Significant Accounting Policies Accounting Policies - Warranties (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Company's accrual for product warranty claims
Balance at January 1	$ 22,071	$ 23,103	$ 22,214
Charges to expense	28,590	29,957	23,092
Settlements	(27,951)	(30,989)	(22,203)
Balance at December 31	$ 22,710	$ 22,071	$ 23,103

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Summary of Quarterly Results of Operations (Tables)

12 Months Ended

Dec. 31, 2012

Quarterly Financial Data [Abstract]

Summary of quarterly results of operations

	2012
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	2,136,344	$	2,573,022	$	2,603,226	$	2,221,870	$	9,534,462
Gross profit	909,839		1,150,597		1,150,282		995,508		4,206,226
Net income	100,216		227,813		234,953		68,052		631,034
Net income per common share - basic	.97		2.23		2.29		0.66		6.15
Net income per common share - diluted	.95		2.17		2.24		0.65		6.02

	2011
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Full Year
Net sales	$	1,855,586	$	2,354,751	$	2,484,920	$	2,070,442	$	8,765,699
Gross profit	797,408		1,022,755		1,038,299		886,100		3,744,562
Net income	68,316		179,115		179,877		14,552		441,860
Net income per common share - basic	.64		1.69		1.74		.14		4.22
Net income per common share - diluted	.63		1.66		1.71		.14		4.14

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 862,590	$ 32,696	$ 58,585
Accounts receivable, less allowance	1,032,508	989,873	916,661
Inventories:
Finished goods	732,359	730,727	743,953
Work in process and raw materials	187,965	196,082	173,748
Total inventory	920,324	926,809	917,701
Deferred income taxes	126,730	149,207	127,348
Other current assets	207,086	163,008	193,427
Total current assets	3,149,238	2,261,593	2,213,722
Goodwill	1,156,005	1,108,008	1,102,458
Intangible assets	347,553	305,873	320,504
Deferred pension assets	249,911	228,350	248,333
Other assets	366,134	368,898	332,100
Property, plant and equipment:
Land	102,336	105,010	106,101
Buildings	677,944	668,802	668,506
Machinery and equipment	1,750,729	1,657,874	1,617,530
Construction in progress	56,582	41,264	34,038
Total gross property, plant and equipment	2,587,591	2,472,950	2,426,175
Less allowances for depreciation	1,621,695	1,516,420	1,474,057
Total net property, plant and equipment	965,896	956,530	952,118
Total Assets	6,234,737	5,229,252	5,169,235
Current liabilities:
Short-term borrowings	69,035	346,313	388,592
Accounts payable	922,999	965,149	909,649
Compensation and taxes withheld	314,892	251,060	253,247
Accrued taxes	52,104	120,555	62,547
Current portion of long-term debt	3,689	7,823	7,875
Other accruals	513,717	471,761	442,030
Total current liabilities	1,876,436	2,162,661	2,063,940
Long-term debt	1,632,165	639,231	648,326
Postretirement benefits other than pensions	320,223	297,528	295,896
Other long-term liabilities	614,109	612,913	551,633
Shareholders’ equity:
Common stock - $1.00 par value: 103,270,067, 103,854,234 and 107,020,728 shares outstanding at December 31, 2012, 2011 and 2010, respectively	111,623	107,454	231,346
Preferred stock - convertible, no par value: 101,086, 160,273 and 216,753 shares outstanding at December 31, 2012, 2011 and 2010, respectively	101,086	160,273	216,753
Unearned ESOP compensation	(101,086)	(160,273)	(216,753)
Other capital	1,673,788	1,297,625	1,222,909
Retained earnings	1,226,467	756,372	4,824,489
Treasury stock, at cost	(849,685)	(276,654)	(4,390,983)
Cumulative other comprehensive loss	(370,389)	(367,878)	(278,321)
Total shareholders’ equity	1,791,804	1,516,919	1,609,440
Total Liabilities and Shareholders’ Equity	$ 6,234,737	$ 5,229,252	$ 5,169,235

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

Consolidation. The consolidated financial statements include the accounts of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, “the Company.”) Inter-company accounts and transactions have been eliminated.

Use of estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those amounts.

Nature of operations. The Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America, with additional operations in the Caribbean region, Europe and Asia.

Reportable segments. See Note 18 for further details.

Cash flows. Management considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Fair value of financial instruments. The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amounts reported for Cash and cash equivalents approximate fair value.

Short-term investments: The carrying amounts reported for Short-term investments approximate fair value.

Investments in securities: Investments classified as available-for-sale are carried at market value. See the recurring fair value measurement table on page 49.

Non-traded investments: The Company has invested in the U.S. affordable housing and historic renovation real estate markets. These non-traded investments have been identified as variable interest entities. However, because the Company does not have the power to direct the day-to-day operations of the investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary. In accordance with the Consolidation Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), the investments are not consolidated. The Company uses the effective yield method to determine the carrying value of the investments. Under the effective yield method, the initial cost of the investments is amortized over the period that the tax credits are recognized. The carrying amounts of the investments, included in Other assets, were $223,701, $232,366 and $198,023 at December 31, 2012, 2011 and 2010, respectively. The liabilities recorded on the balance sheets for estimated future capital contributions to the investments were $218,688, $235,355 and $194,807 at December 31, 2012, 2011 and 2010, respectively.

Short-term borrowings: The carrying amounts reported for Short-term borrowings approximate fair value.

Long-term debt (including current portion): The fair values of the Company’s publicly traded debt, shown below, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown below, are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The Company's publicly traded debt and non-traded debt are classified as level 1 and level 2, respectively, in the fair value hierarchy. See Note 7.

	December 31,
	2012				2011				2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Publicly traded debt	$	1,630,056	$	1,706,487	$	632,423	$	703,238	$	632,375	$	662,193
Non-traded debt	5,798		5,600		14,631		14,070		23,826		22,454

Derivative instruments: The Company utilizes derivative instruments as part of its overall financial risk management policy. The Company entered into foreign currency option and forward currency exchange contracts with maturity dates of less than twelve months in 2012, 2011 and 2010, primarily to hedge against value changes in foreign currency. See Note 13. There were no derivative contracts outstanding at December 31, 2012, 2011 and 2010.

Fair value measurements. The following tables summarize the Company’s assets and liabilities measured on a recurring and non-recurring basis in accordance with the Fair Value Measurements and Disclosures Topic of the ASC:

Assets and Liabilities Reported at Fair Value on a Recurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Deferred compensation plan asset (a)	$	19,995	$	13,893	$	6,102
Liabilities:
Deferred compensation plan liability (b)	$	28,627	$	28,627

(a) The deferred compensation plan asset consists of the investment funds maintained for the future payments under the Company’s executive deferred compensation plan, which is structured as a rabbi trust. The investments are marketable securities accounted for under the Debt and Equity Securities Topic of the ASC. The level 1 investments are valued using quoted market prices multiplied by the number of shares. The level 2 investments are valued based on vendor or broker models. The cost basis of the investment funds is $19,764.

(b) The deferred compensation plan liability represents the value of the Company’s liability under its deferred compensation plan based on quoted market prices in active markets for identical assets.

Assets and Liabilities Reported at Fair Value on a Nonrecurring Basis

	Fair Value at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Trademarks	$	8,928			$	8,928

As a result of the 2012 annual impairment test performed in accordance with the Intangibles Topic of the ASC, trademarks with a carrying value of $13,014 were written down to their calculated fair value of $8,928.

Accounts receivable and allowance for doubtful accounts. Accounts receivable were recorded at the time of credit sales net of provisions for sales returns and allowances. The Company recorded an allowance for doubtful accounts of $47,667, $51,747 and $59,310 at December 31, 2012, 2011 and 2010, respectively, to reduce Accounts receivable to their estimated net realizable value. The allowance was based on an analysis of historical bad debts, a review of the aging of Accounts receivable and the current creditworthiness of customers. All provisions for allowances for doubtful collection of accounts are related to the creditworthiness of accounts and are included in Selling, general and administrative expenses.

Reserve for obsolescence. The Company recorded a reserve for obsolescence of $88,356, $82,671 and $74,372 at December 31, 2012, 2011 and 2010, respectively, to reduce Inventories to their estimated net realizable value. 

Goodwill. Goodwill represents the cost in excess of fair value of net assets acquired in business combinations accounted for by the purchase method. In accordance with the Impairments Topic of the ASC, goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate potential impairment. See Note 4.

Intangible assets. Intangible assets include trademarks, non-compete covenants and certain intangible property rights. As required by the Goodwill and Other Intangibles Topic of the ASC, indefinite-lived trademarks are not amortized, but instead are tested annually for impairment, and between annual tests whenever an event occurs or circumstances indicate potential impairment. See Note 4. The cost of finite-lived trademarks, non-compete covenants and certain intangible property rights are amortized on a straight-line basis over the expected period of benefit as follows:

	Useful Life
Finite-lived trademarks	5 years
Non-compete covenants	3 – 5 years
Certain intangible property rights	3 – 20 years

Accumulated amortization of finite-lived intangible assets was $260,065, $237,736 and $228,633 at December 31, 2012, 2011 and 2010, respectively. See Note 4.

Impairment of long-lived assets. In accordance with the Property, Plant and Equipment Topic of the ASC, management evaluates the recoverability and estimated remaining lives of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or the useful life has changed. See Notes 4 and 5.

Property, plant and equipment. Property, plant and equipment is stated on the basis of cost. Depreciation is provided by the straight-line method. Depreciation and amortization are included in the appropriate Cost of goods sold or Selling, general and administrative expense caption on the Statements of Consolidated Income. Included in Property, plant and

equipment are leasehold improvements. The major classes of assets and ranges of annual depreciation rates are:

Buildings	2.5% – 20.0%
Machinery and equipment	5.0% – 20.0%
Furniture and fixtures	10.0% – 33.3%
Automobiles and trucks	10.0% – 33.3%

Standby letters of credit. The Company occasionally enters into standby letter of credit agreements to guarantee various operating activities. These agreements provide credit availability to the various beneficiaries if certain contractual events occur. Amounts outstanding under these agreements totaled $22,845, $18,819 and $22,300 at December 31, 2012, 2011 and 2010, respectively.

Product warranties. The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements. Management estimated the costs of unsettled product warranty claims based on historical results and experience and included an amount in Other accruals. Management periodically assesses the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary. Changes in the Company’s accrual for product warranty claims during 2012, 2011 and 2010, including customer satisfaction settlements during the year, were as follows:

	2012			2011			2010
Balance at January 1	$	22,071		$	23,103		$	22,214
Charges to expense	28,590			29,957			23,092
Settlements	(27,951		)	(30,989		)	(22,203		)
Balance at December 31	$	22,710		$	22,071		$	23,103

Environmental matters. Capital expenditures for ongoing environmental compliance measures were recorded in Property, plant and equipment, and related expenses were included in the normal operating expenses of conducting business. The Company is involved with environmental investigation and remediation activities at some of its currently and formerly owned sites and at a number of third-party sites. The Company accrued for environmental-related activities for which commitments or clean-up plans have been developed and when such costs could be reasonably estimated based on industry standards and professional judgment. All accrued amounts were recorded on an undiscounted basis. Environmental-related expenses included direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms. See Notes 8 and 13.

Employee Stock Purchase and Savings Plan and preferred stock. The Company accounts for the Employee Stock Purchase and Savings Plan (ESOP) in accordance with the Employee Stock Ownership Plans Subtopic of the Compensation – Stock Ownership Topic of the ASC. The Company recognized compensation expense for amounts contributed to the ESOP, and the ESOP used dividends on unallocated preferred shares to service debt. Unallocated preferred shares held by the ESOP were not considered outstanding in calculating earnings per share of the Company. See Note 11.

Defined benefit pension and other postretirement benefit plans. The Company accounts for its defined benefit pension and other postretirement benefit plans in accordance with the Retirement Benefits Topic of the ASC, which requires the recognition of a plan’s funded status as an asset for overfunded plans and as a liability for unfunded or underfunded plans. See Note 6.

Stock-based compensation. The cost of the Company’s stock-based compensation is recorded in accordance with the Stock Compensation Topic of the ASC. See Note 12.

Foreign currency translation. All consolidated non-highly inflationary foreign operations use the local currency of the country of operation as the functional currency and translated the local currency asset and liability accounts at year-end exchange rates while income and expense accounts were translated at average exchange rates. The resulting translation adjustments were included in Cumulative other comprehensive loss, a component of Shareholders’ equity.

Cumulative other comprehensive loss. At December 31, 2012, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $204,195, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $166,595 and unrealized net gains on marketable equity securities of $401. At December 31, 2011 and 2010, the ending balance of Cumulative other comprehensive loss included adjustments for foreign currency translation of $196,792 and $131,160, respectively, net prior service costs and net actuarial losses related to pension and other postretirement benefit plans of $171,376 and $148,006, respectively, and unrealized gains on marketable equity securities and derivative instruments used in cash flow hedges of $290 and $845, respectively.

Revenue recognition. All revenues were recognized when products were shipped and title had passed to unaffiliated customers. Collectibility of amounts recorded as revenue was reasonably assured at the time of recognition.

Customer and vendor consideration. The Company offered certain customers rebate and sales incentive programs which were classified as reductions in Net sales. Such programs were in the form of volume rebates, rebates that constituted a

percentage of sales or rebates for attaining certain sales goals. The Company received consideration from certain suppliers of raw materials in the form of volume rebates or rebates that constituted a percentage of purchases. These rebates were recognized on an accrual basis by the Company as a reduction of the purchase price of the raw materials and a subsequent reduction of Cost of goods sold when the related product was sold.

Costs of goods sold. Included in Costs of goods sold were costs for materials, manufacturing, distribution and related support. Distribution costs included all expenses related to the distribution of products including inbound freight charges, purchase and receiving costs, warehousing costs, internal transfer costs and all costs incurred to ship products. Also included in Costs of goods sold were total technical expenditures, which included research and development costs, quality control, product formulation expenditures and other similar items. Research and development costs included in technical expenditures were $44,648, $41,719 and $39,883 for 2012, 2011 and 2010, respectively.

Selling, general and administrative expenses. Selling costs included advertising expenses, marketing costs, employee and store costs and sales commissions. The cost of advertising was expensed as incurred. The Company incurred $247,469, $227,303 and $217,637 in advertising costs during 2012, 2011 and 2010, respectively. General and administrative expenses included human resources, legal, finance and other support and administrative functions.

Earnings per share. Shares of preferred stock held in an unallocated account of the ESOP (see Note 11) and common stock held in a revocable trust (see Note 10) were not considered outstanding shares for basic or diluted income per common share calculations. All references to “shares” or “per share” information throughout this report relate to common shares and are stated on a diluted per common share basis, unless otherwise indicated. Basic and diluted net income per common share were calculated using the two-class method in accordance with the Earnings Per Common Share Topic of the ASC. Basic net income per common share amounts were computed based on the weighted-average number of common shares outstanding during the year. Diluted net income per common share amounts were computed based on the weighted-average number of common shares outstanding plus all dilutive securities potentially outstanding during the year. See Note 15.

Impact of recently issued accounting standards. Effective January 1, 2012, the Company adopted Accounting Standards Update (ASU) No. 2011-5 and 2011-12, which amend the Comprehensive Income Topic of the ASC. The updated guidance requires the components of income and other comprehensive income to be presented in a single continuous statement or two consecutive statements in annual periods. The change in presentation did not have an impact on the Company's results of operations, financial condition or liquidity.

In July 2012, the FASB issued ASU No. 2012-2, which amends the Intangibles - Goodwill and Other Topic of the ASC. The updated standard gives companies the option to perform a qualitative assessment to determine whether indefinite-lived intangible assets are impaired. If the qualitative analysis shows that it is unlikely that an indefinite-lived intangible asset is impaired, then the annual fair value calculation does not need to be performed. However, if it is not unlikely that an indefinite-lived intangible asset is impaired, then the annual fair value calculation must still be performed. ASU No. 2012-2 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company will consider performing the qualitative assessment as part of its future annual impairment tests for indefinite-lived intangible assets. ASU No. 2012-2 is similar to ASU No. 2011-8, which was adopted by the Company in 2012, and amends the Intangibles - Goodwill and Other Topic of the ASC to give companies the option to perform a qualitative assessment that can potentially alleviate the need to perform the quantitative two-step test. These standards may affect the Company's disclosures, but they will not affect its results of operations, financial condition or liquidity.

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Exit or Disposal Activities Exit or Disposal Actiivities (Textuals) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012 store	Dec. 31, 2011 store	Dec. 31, 2010 store
Exit or Disposal Activities (Textual) [Abstract]
Stores and branches closed	19	22	23
Provisions in cost of goods sold or SG&A	$ 7,676	$ 1,434	$ 1,953
Adjustments to prior provisions for qualified exit costs	(4,942)	(900)	(5,764)
Reductions in carrying value of property plant and equipment		3,263	1,164
Global Finishes Group [Member]
Exit or Disposal Activities (Textual) [Abstract]
Provisions in cost of goods sold or SG&A	7,363	913	1,314
Consumer Group [Member]
Exit or Disposal Activities (Textual) [Abstract]
Provisions in cost of goods sold or SG&A	0
Latin America Coatings Group [Member]
Exit or Disposal Activities (Textual) [Abstract]
Provisions in cost of goods sold or SG&A	0	0
Employee Severance [Member] | Consumer Group [Member]
Exit or Disposal Activities (Textual) [Abstract]
Provisions in cost of goods sold or SG&A		339	457
Other Qualified Exit Costs [Member] | Paint Stores Group [Member]
Exit or Disposal Activities (Textual) [Abstract]
Provisions in cost of goods sold or SG&A		$ 182	$ 182

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Net Income Per Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012 ParticipatingSecurities		Dec. 31, 2011		Dec. 31, 2010
Basic
Average common shares outstanding (in shares)									101,714,901		103,471,323		107,021,624
Net income	$ 68,052	$ 234,953	$ 227,813	$ 100,216	$ 14,552	$ 179,877	$ 179,115	$ 68,316	$ 631,034		$ 441,860		$ 462,485
Less net income allocated to unvested restricted shares									(5,114)		(4,825)		(4,817)
Net income allocated to common shares									625,920		437,035		457,668
Net income per common share - basic (in dollars per share)	$ 0.66	$ 2.29	$ 2.23	$ 0.97	$ 0.14	$ 1.74	$ 1.69	$ 0.64	$ 6.15		$ 4.22		$ 4.28
Diluted
Average common shares outstanding (in shares)									101,714,901		103,471,323		107,021,624
Stock options and other contingently issuable shares (in shares)									2,215,528	[1]	2,200,650	[1]	1,763,893	[1]
Average common shares outstanding assuming dilution (in shares)									103,930,429		105,671,973		108,785,517
Net income	68,052	234,953	227,813	100,216	14,552	179,877	179,115	68,316	631,034		441,860		462,485
Less net income allocated to unvested restricted shares assuming dilution									(5,008)		(4,756)		(4,749)
Net income allocated to common shares assuming dilution									$ 626,026		$ 437,104		$ 457,736
Net income per common share - diluted (in dollars per share)	$ 0.65	$ 2.24	$ 2.17	$ 0.95	$ 0.14	$ 1.71	$ 1.66	$ 0.63	$ 6.02		$ 4.14		$ 4.21
Net Income Per Common Share (Textual) [Abstract]
Common shares outstanding, anti-dilutive									1,047,734		101,260		1,544,620
Classes of participating securities									2
Percent common shares representing outstanding shares	99.00%								99.00%
Percent restricted shares representing outstanding shares	1.00%								1.00%

[1] Stock options and other contingently issuable shares excludes 1,047,734, 101,260 and 1,544,620 shares at December 31, 2012, 2011 and 2010, respectively, due to their anti-dilutive effect.

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Other Long-Term Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012 ManufacturingSite	Dec. 31, 2011	Dec. 31, 2010
Other Long-Term Liabilities (Textual) [Abstract]
Accruals for extended environmental-related activities	$ 97,220	$ 89,266	$ 89,562
Estimated costs of current investigation and remediation activities included in Other accruals	17,101	42,847	60,048
Amount by which unaccrued maximum of estimated range exceeds minimum accruals	88,671
Number of manufacturing sites accounting for the majority of the accrual for environmental-related activities	2
Accruals for environmental-related activities of sites accounting for the majority of the accrual for environmental-related activities	59,132
Percentage of accrual for environmental-related activities related to sites accounting for the majority of the accrual for environmental-related activities	51.70%
Amount by which unaccrued maximum of estimated range exceeds minimum	88,671
Amount of unaccrued maximum related to sites accounting for the majority of the accrual for environmental-related activities	$ 56,952
Percentage of aggregate unaccrued maximum related to sites accounting for the majority of the accrual for environmental-related activities	64.20%

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Reportable Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

REPORTABLE SEGMENT INFORMATION

REPORTABLE SEGMENT INFORMATION

The Company reports its segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding allocation of resources in accordance with the Segment Reporting Topic of the ASC. The Company has determined that it has four reportable operating segments: Paint Stores Group, Consumer Group, Global Finishes Group and Latin America Coatings Group (individually, a "Reportable Segment" and collectively, the “Reportable Segments”). Factors considered in determining the four Reportable Segments of the Company include the nature of business activities, the management structure directly accountable to the Company’s chief operating decision maker (CODM) for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors. The Company reports all other business activities and immaterial operating segments that are not reportable in the Administrative segment. See pages 6 through 15 of this report for more information about the Reportable Segments.

The Company’s CODM has been identified as the Chief Executive Officer because he has final authority over performance assessment and resource allocation decisions. Because of the diverse operations of the Company, the CODM regularly receives discrete financial information about each Reportable Segment as well as a significant amount of additional financial information about certain divisions, business units or subsidiaries of the Company. The CODM uses all such financial information for performance assessment and resource allocation decisions. The CODM evaluates the performance of and allocates resources to the Reportable Segments based on profit or loss before income taxes and cash generated from operations. The accounting policies of the Reportable Segments are the same as those described in Note 1 of this report.

The Paint Stores Group consisted of 3,520 company-operated specialty paint stores in the United States, Canada, Puerto Rico, Virgin Islands, Trinidad and Tobago, St. Maarten, Jamaica, Curacao and Aruba at December 31, 2012. Each store in this segment is engaged in the related business activity of selling paint, coatings and related products to end-use customers. The Paint Stores Group markets and sells Sherwin-Williams^® branded architectural paint and coatings, protective and marine products, OEM product finishes and related items. These products are produced by manufacturing facilities in the Consumer Group. In addition, each store sells selected purchased associated products. The loss of any single customer would not have a material adverse effect on the business of this segment. During 2012, this segment opened 70 net new stores, consisting of 81 new stores opened (63 in the United States, 14 in Canada, 1 in Puerto Rico and 3 in Trinidad) and 11 stores closed in the United States. In 2011 and 2010, this segment opened 60 and 36 net new stores, respectively. A map on the cover flap of this report shows the number of paint stores and their geographic location. The CODM uses discrete financial information about the Paint Stores Group, supplemented with information by geographic region, product type and customer type, to assess performance of and allocate resources to the Paint Stores Group as a whole. In accordance with ASC 280-10-50-9, the Paint Stores Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Consumer Group develops, manufactures and distributes a variety of paint, coatings and related products to third party customers primarily in the United States and Canada and the Paint Stores Group. Approximately 64 percent of the total sales of the Consumer Group in 2012 were intersegment transfers of products primarily sold through the Paint Stores Group. Sales and marketing of certain controlled brand and private labeled products is performed by a direct sales staff. The products distributed through third party customers are intended for resale to the ultimate end-user of the product. The Consumer Group had sales to certain customers that, individually, may be a significant portion of the sales of the segment. However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment. This segment incurred most of the Company’s capital expenditures related to ongoing

environmental compliance measures. The CODM uses discrete financial information about the Consumer Group, supplemented with information by product types and customer, to assess performance of and allocate resources to the Consumer Group as a whole. In accordance with ASC 280-10-50-9, the Consumer Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Global Finishes Group develops, licenses, manufactures, distributes and sells a variety of protective and marine products, automotive finishes and refinish products, OEM product finishes and related products in North and South America, Europe and Asia. This segment meets the demands of its customers for a consistent worldwide product development, manufacturing and distribution presence and approach to doing business. This segment licenses certain technology and trade names worldwide. Sherwin-Williams^® and other controlled brand products are distributed through the Paint Stores Group and this segment’s 302 company-operated branches and by a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third party distributors. During 2012, this segment opened 1 new branch in the United States and closed 2 in the United States for a net decrease of 1 branch. At December 31, 2012, the Global Finishes Group consisted of operations in the United States, subsidiaries in 34 foreign countries and income from licensing agreements in 16 foreign countries. The CODM uses discrete financial information about the Global Finishes Group reportable segment, supplemented with information about geographic divisions, business units, and subsidiaries, to assess performance of and allocate resources to the Global Finishes Group as a whole. In accordance with ASC 280-10-50-9, the Global Finishes Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover flap of this report shows the number of branches and their geographic locations.

The Latin America Coatings Group develops, licenses, manufactures, distributes and sells a variety of architectural paint and coatings, protective and marine products, OEM product finishes and related products in North and South America. This segment meets the demands of its customers for consistent regional product development, manufacturing and distribution presence and approach to doing business. Sherwin-Williams^® and other controlled brand products are distributed through this segment’s 276 company-operated stores and by a direct sales staff and outside sales representatives to retailers, dealers, licensees and other third party distributors. During 2012, this segment opened 17 new stores (9 in South America and 8 in Mexico) and closed 6 in South America for a net increase of 11 stores. At December 31, 2012, the Latin America Coatings Group consisted of operations from subsidiaries in 9 foreign countries, 4 foreign joint ventures and income from licensing agreements in 10 foreign countries. The CODM uses discrete financial information about the Latin America Coatings Group, supplemented with information about geographic divisions, business units, and subsidiaries, to assess performance of and allocate resources to the Latin America Coatings Group as a whole. In accordance with ASC 280-10-50-9, the Latin America Coatings Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment. A map on the cover flap of this report shows the number of stores and their geographic locations.

The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site. Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses which were not directly associated with the Reportable Segments. The Administrative segment did not include any significant foreign operations. Also included in the Administrative segment was a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities. Sales of this segment represented external leasing revenue of excess headquarters space or leasing of facilities no longer used by the Company in its primary businesses. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment.

Net external sales of all consolidated foreign subsidiaries were $2,049,814, $1,982,859 and $1,468,116 for 2012, 2011 and 2010, respectively. Segment profit of all consolidated foreign subsidiaries was $158,377, $122,436 and $86,951 for 2012, 2011 and 2010, respectively. Domestic operations accounted for the remaining net external sales and segment profits. Long-lived assets consisted of Property, plant and equipment, Goodwill, Intangible assets, Deferred pension assets and Other assets. The aggregate total of long-lived assets for the Company was $3,085,499, $2,967,660 and, $2,955,513 at December 31, 2012, 2011 and 2010, respectively. Long-lived assets of consolidated foreign subsidiaries totaled $718,409, $650,681 and $664,547 at December 31, 2012, 2011 and 2010, respectively. Total Assets of the Company were $6,234,737, $5,229,252 and $5,169,235 at December 31, 2012, 2011 and 2010, respectively. Total assets of consolidated foreign subsidiaries were $1,598,996, $1,443,034 and $1,467,969, which represented 25.6 percent, 27.6 percent and 28.4 percent of the Company’s total assets at December 31, 2012, 2011 and 2010, respectively. No single geographic area outside the United States was significant relative to consolidated net sales or operating profits. Export sales and sales to any individual

customer were each less than 10 percent of consolidated sales to unaffiliated customers during all years presented.

In the reportable segment financial information that follows, Segment profit was total net sales and intersegment transfers less operating costs and expenses. Identifiable assets were those directly identified with each reportable segment. The Administrative segment assets consisted primarily of cash and cash equivalents, investments, deferred pension assets, and headquarters property, plant and equipment. The margin for each reportable segment was based upon total net sales and intersegment transfers. Domestic intersegment transfers were accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs. International intersegment transfers were accounted for at values comparable to normal unaffiliated customer sales.

(millions of dollars)	2012
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	5,410		$	1,322			$	1,961		$	836		$	5			$	9,534
Intersegment transfers				2,320				7			47			(2,374		)
Total net sales and intersegment transfers	$	5,410		$	3,642			$	1,968		$	883		$	(2,369	)		$	9,534
Segment profit	$	862		$	217		(1)	$	147		$	81						$	1,307
Interest expense														$	(43	)		(43		)
Administrative expenses and other														(357		)	(2)	(357		)
Income before income taxes	$	862		$	217			$	147		$	81		$	(400	)		$	907
Reportable segment margins	15.9		%	6.0		%		7.5		%	9.2		%
Identifiable assets	$	1,374		$	1,701			$	987		$	485		$	1,688			$	6,235
Capital expenditures	67			47				14			9			20				157
Depreciation	49			43				30			10			20				152
	2011
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	4,780		$	1,274			$	1,878		$	828		$	6			$	8,766
Intersegment transfers				2,091				9			39			(2,139		)
Total net sales and intersegment transfers	$	4,780		$	3,365			$	1,887		$	867		$	(2,133	)		$	8,766
Segment profit	$	646		$	174		(1)	$	90		$	75						$	985
Interest expense														$	(42	)		(42		)
Administrative expenses and other														(201		)		(201		)
Income before income taxes	$	646		$	174			$	90		$	75		$	(243	)		$	742
Reportable segment margins	13.5		%	5.2		%		4.8		%	8.7		%
Identifiable assets	$	1,309		$	1,682			$	939		$	469		$	830			$	5,229
Capital expenditures	50			35				14			14			41				154
Depreciation	48			43				31			11			18				151
	2010
	Paint Stores Group			Consumer Group				Global Finishes Group			Latin America Coatings Group			Administrative				Consolidated Totals
Net external sales	$	4,381		$	1,298			$	1,417		$	675		$	5			$	7,776
Intersegment transfers				1,770				4			34			(1,808		)
Total net sales and intersegment transfers	$	4,381		$	3,068			$	1,421		$	709		$	(1,803	)		$	7,776
Segment profit	$	620		$	204		(1)	$	65		$	59						$	948
Interest expense														$	(71	)		(71		)
Administrative expenses and other														(199		)		(199		)
Income before income taxes	$	620		$	204			$	65		$	59		$	(270	)		$	678
Reportable segment margins	14.2		%	6.6		%		4.6		%	8.3		%
Identifiable assets	$	1,238		$	1,603			$	1,089		$	437		$	802			$	5,169
Capital expenditures	51			25				26			12			11				125
Depreciation	47			39				28			10			16				140

(1) Segment profit included $27, $24 and $22 of mark-up on intersegment transfers realized primarily as a result of external sales by the Paint Stores Group during 2012, 2011 and 2010, respectively.

(2) Includes $80 pre-tax charge related to DOL Settlement. See Note 9.

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Stock- Based Compensation (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended									12 Months Ended			12 Months Ended
	Dec. 31, 2012 right	Dec. 31, 2011	Dec. 31, 2010	Apr. 21, 2010	Dec. 31, 2009	Apr. 19, 2006 Employee Stock Option [Member]	Dec. 31, 2012 Non-employee Plan [Member] right	Dec. 31, 2011 Non-employee Plan [Member]	Dec. 31, 2010 Non-employee Plan [Member]	Dec. 31, 2012 Stock Option [Member]	Dec. 31, 2012 2006 Employee Plan [Member] right	Apr. 19, 2006 2006 Employee Plan [Member]	Dec. 31, 2012 Employees [Member]	Dec. 31, 2011 Employees [Member]	Dec. 31, 2010 Employees [Member]	Dec. 31, 2012 Employees [Member] Restricted Stock [Member]	Dec. 31, 2012 Non-Employee Directors [Member]	Dec. 31, 2011 Non-Employee Directors [Member]	Dec. 31, 2010 Non-Employee Directors [Member]	Dec. 31, 2012 Non-Employee Directors [Member] Restricted Stock [Member]
Stock-Based Compensation (Textual) [Abstract]
Number of shares authorized under 2006 Equity and Performance Incentive Plan						10,000,000						200,000
Increase in number of shares authorized under employee plan				9,200,000
Number of shares authorized under Employee Plan				19,200,000
Number of appreciation rights, restricted stock units, performance shares or performance units granted							0				0
Unrecognized stock-based compensation expense	$ 68,558									$ 37,974						$ 29,286				$ 1,298
Unrecognized stock-based compensation expense, Weighted-average period recognition	1 year 3 months 18 days									1 year 4 months 10 days						1 year 1 month 13 days				1 year 5 months 5 days
Stock-based compensation expense	54,348	48,176	42,276
Income tax benefit related to stock-based compensation expense	20,948	18,570	16,290
Reduction in Basic Net Income per common share due to stock-based compensation expense	$ 0.33
Reduction in Diluted Net Income Per Common Share Due to Stock Based Compensation Expense	$ 0.32
Estimated Forfeiture Rate										2.60%
Portion of option rights generally becoming exercisable to the extent of optioned shares	0.33
Share Based Compensation Arrangement By Share Based Payment Award Award Expiration Period	10 years
Weighted-average per share fair value of option rights granted during the year, Optioned Shares	$ 32.74	$ 18.47	$ 16.83
Intrinsic value of exercised option rights													298,883	53,100	74,440		1,412	1,129	626
Fair Value of Options Vested	$ 25,879	$ 25,868	$ 25,073
Outstanding option rights	6,748,126	9,857,695	10,009,385		10,897,652		3,500	17,500	37,500
Weighted average remaining term for options outstanding	6 years 11 months 27 days	6 years 6 months 15 days	6 years 9 months 4 days
Weighted average remaining term for options exercisable	5 years 9 months 15 days	5 years 4 months 21 days	5 years 6 months 29 days
Shares reserved for future grants of option rights restricted stock, Optioned Shares	6,810,439	8,155,734	9,826,006
Period of unrecognized compensation expense being amortized on straight line basis over vesting period	3 years

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Other (Tables)

12 Months Ended

Dec. 31, 2012

Other Income and Expenses [Abstract]

Other general expense (income) - net

Included in Other general expense - net were the following:

	2012			2011			2010
Provisions for environmental matters - net	$	6,736		$	9,100		$	7,089
Loss (gain) on disposition of assets	3,454			(5,469		)	2,720
Net income of exit or disposal activities	(4,942		)	(900		)	(6,006		)
Total	$	5,248		$	2,731		$	3,803

Other income - net

Other income - net. Included in Other income - net were the following:

	2012			2011			2010
Dividend and royalty income	$	(4,666	)	$	(4,963	)	$	(3,857	)
Net expense from financing activities	9,220			8,023			9,256
Foreign currency transaction related (gains) losses	(3,071		)	4,748			22
Other income	(21,074		)	(22,167		)	(14,059		)
Other expense	9,651			9,550			7,857
Total	$	(9,940	)	$	(4,809	)	$	(781	)

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Stock Purchase Plan and Preferred Stock

12 Months Ended

Dec. 31, 2012

Stock Purchase Plan and Preferred Stock [Abstract]

STOCK PURCHASE PLAN AND PREFERRED STOCK

STOCK PURCHASE PLAN AND PREFERRED STOCK

As of December 31, 2012, 28,256 employees contributed to the Company’s ESOP, a voluntary defined contribution plan available to all eligible salaried employees. Participants are allowed to contribute, on a pretax or after-tax basis, up to the lesser of twenty percent of their annual compensation or the maximum dollar amount allowed under the Internal Revenue Code. Prior to July 1, 2009, the Company matched one hundred percent of all contributions up to six percent of eligible employee contributions. Effective July 1, 2009, the ESOP was amended to change the Company match to one hundred percent on the first three percent of eligible employee contributions and fifty percent on the next two percent of eligible contributions. Effective July 1, 2011, the ESOP was amended to reinstate the Company match up to six percent of eligible employee contributions. Such participant contributions may be invested in a variety of investment funds or a Company common stock fund and may be exchanged between investments as directed by the participant. Participants are permitted to diversify both future and prior Company matching contributions previously allocated to the Company common stock fund into a variety of investment funds.

The Company made contributions to the ESOP on behalf of participating employees, representing amounts authorized by employees to be withheld from their earnings, of $88,363, $79,266 and $70,601 in 2012, 2011 and 2010, respectively. The Company’s matching contributions to the ESOP charged to operations were $142,791, $48,816 and $37,894 for 2012, 2011 and 2010, respectively. The 2012 Company contributions include $80,000 related to the DOL Settlement. See Note 9 for additional information on the DOL Settlement.

At December 31, 2012, there were 14,616,378 shares of the Company’s common stock being held by the ESOP, representing 14.2 percent of the total number of voting shares outstanding. Shares of Company common stock credited to each member’s account under the ESOP are voted by the trustee under instructions from each individual plan member. Shares for which no instructions are received are voted by the trustee in the same proportion as those for which instructions are received.

On August 1, 2006, the Company issued 500,000 shares of convertible serial preferred stock, no par value (Series 2 Preferred stock) with cumulative quarterly dividends of $11.25 per share, for $500,000 to the ESOP. The ESOP financed the acquisition of the Series 2 Preferred stock by borrowing $500,000 from the Company at the rate of 5.5 percent per annum. This borrowing is payable over ten years in equal quarterly installments. Each share of Series 2 Preferred stock is entitled to one vote upon all matters presented to the Company’s shareholders and generally votes with the common stock together as one class. The Series 2 Preferred stock is held by the ESOP in an unallocated account. As the value of compensation expense related to contributions to the ESOP is earned, the Company has the option of funding the ESOP by redeeming a portion of the preferred stock or with cash. Contributions are credited to the members’ accounts at the time of funding. The Series 2 Preferred stock is redeemable for cash or convertible into common stock or any combination thereof at the option of the ESOP based on the relative fair value of the Series 2 Preferred and common stock at the time of conversion. At December 31, 2012, 2011 and 2010, there were no allocated or committed-to-be released shares of Series 2 Preferred stock outstanding. In 2012, the Company redeemed 59,187 shares of the Series 2 Preferred stock for cash.

In 2011, the Company redeemed 56,480 shares of the Series 2 Preferred stock for cash. In 2010, the Company elected to fund the ESOP with cash. The fair value of the Series 2 Preferred stock is based on a conversion/redemption formula outlined in the preferred stock terms and was $210,773, $328,495 and $411,655 at December 31, 2012, 2011, and 2010 respectively.