THE SHERWIN-WILLIAMS COMPANY (dollars in millions, except as noted and per share data) Company BackgroundThe 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 inNorth and South America with additional operations in theCaribbean region and throughoutEurope ,Asia andAustralia . The Company is structured into three reportable segments -The Americas Group ,Consumer Brands Group andPerformance 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 Note 21 to the Consolidated Financial Statements in Item 8 for additional information on the Company's Reportable Segments. Outlook Beginning in early 2020, extraordinary and wide-ranging actions have been taken by international, federal, state, and local public health and governmental authorities to contain and combat the outbreak and spread of a novel strain of coronavirus (COVID-19). These actions have included, and continue to include, quarantines, physical distancing, face coverings, restrictions on public gatherings and other health and safety protocols, stay-at-home orders, travel restrictions, mandatory business closures, and other mandates that have substantially restricted individuals' daily activities and curtailed or ceased many businesses' normal operations. We have worked with government and health authorities to continue to operate our business during this crisis, including our company-operated stores, manufacturing plants and other facilities, due to the essential nature of our products. We have endeavored to follow recommended actions of government authorities and health officials in order to protect the health and well-being of our employees, customers and their families worldwide by implementing online and phone ordering of products, using curb side pickup or delivery, and implementing remote, alternate and flexible work arrangements where possible. We will continue to work with government authorities and health officials in implementing appropriate safety measures, adapting as recommendations and safety protocols evolve so that we may maintain our operations, keep our stores open and continue to return employees who work in office environments. The COVID-19 pandemic did not have a material adverse effect on our consolidated financial results for 2020. We have a strong liquidity position, with$226.6 million in cash and$3.500 billion of unused capacity under our credit facilities atDecember 31, 2020 . The Company is in compliance with bank covenants and expects to remain in compliance. During the first half of the year, we took actions to preserve liquidity and generate cash flow during the crisis. As the circumstances around the COVID-19 pandemic remain fluid, we continue to actively monitor the pandemic's impact to the Company worldwide, including our financial position, liquidity, results of operations and cash flow, while managing our response to the crisis through collaboration with employees, customers, suppliers, government authorities, health officials and other business partners. Please see Item 1A "Risk Factors" in Part I of this Annual Report on Form 10-K for further information regarding the current and potential impact of the COVID-19 pandemic on the Company. 26 -------------------------------------------------------------------------------- Table of Contents RESULTS OF OPERATIONS The following discussion and analysis addresses comparisons of material changes in the consolidated financial statements for the years endedDecember 31, 2020 and 2019. For comparisons of the years endedDecember 31, 2019 and 2018, see Management's Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year endedDecember 31, 2019 filed onFebruary 21, 2020 .Net Sales Year Ended December 31, 2020 2019 $ Change % Change Net Sales: The Americas Group$ 10,383.2 $ 10,171.9 $ 211.3 2.1 %
Consumer Brands Group 3,053.4 2,676.8 376.6 14.1 %
Performance Coatings Group 4,922.4 5,049.2 (126.8) (2.5) %
Administrative 2.7 2.9 (0.2) (6.9) %
Total $ 18,361.7 $ 17,900.8 $ 460.9 2.6 %
Consolidated net sales for 2020 increased due primarily to higher sales to most
of the Consumer Brands Group's retail customers in the U.S. and Europe , and
higher sales in residential repaint, DIY and new residential in the U.S. and
Canada paint stores in The Americas Group , partially offset by the impacts of
COVID-19 on some end markets primarily served by the Performance Coatings Group .
Currency translation rate changes decreased 2020 consolidated net sales by 1.1%.
Net sales of all consolidated foreign subsidiaries decreased 2.7% to $3.581
billion for 2020 versus $3.679 billion for 2019 due primarily to demand softness
in certain industrial end markets globally and changes in The Americas Group's
store footprint outside of the U.S. and Canada . Net sales of all operations
other than consolidated foreign subsidiaries increased 3.9% to $14.781 billion
for 2020 versus $14.222 billion for 2019.
Net sales in The Americas Group increased due primarily to higher residential
repaint, DIY and new residential paint sales in the U.S. and Canada , partially
offset by the impacts of COVID-19 on demand in some end markets served. Net
sales from stores in U.S. and Canada open for more than twelve calendar months
increased 2.7% in the year over last year's comparable period. Currency
translation rate changes reduced net sales by 1.1% compared to 2019. During
2020, The Americas Group opened 56 new stores and closed 40 redundant locations
for a net increase of 16 stores, with a net increase of 38 new stores in the
U.S. and Canada . The total number of stores in operation at December 31, 2020
was 4,774 in the United States , Canada , Latin America and the Caribbean . The
Americas Group's objective is to expand its store base an average of 2% each
year, primarily through internal growth. Sales of products other than paint
decreased approximately 2.0% over last year. 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 Brands Group increased in 2020 primarily due to higher
volume sales to most of the group's North American and European retail customers
from strong DIY demand. In 2021, the Consumer Brands Group plans to expand its
customer base and product assortment at existing customers.
The Performance Coatings Group's net sales in 2020 decreased due primarily to
softer end market demand in most businesses, mostly due to the impacts of
COVID-19, and unfavorable currency translation rate changes, partially offset by
increased sales in the packaging and coil divisions in all regions. Currency
translation rate changes decreased net sales 1.6% compared to 2019. In 2020, the
Performance Coatings Group opened 1 new location, increasing the total to 282
branches open in the United States , Canada , Mexico , South America , Europe and
Asia at December 31, 2020 . In 2021, the Performance Coatings Group plans to
continue expanding its worldwide presence, including improving its customer base
and product offering.
Net sales in the Administrative segment, which primarily consists 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 2020.
27
--------------------------------------------------------------------------------
Table of Contents
Income Before Income Taxes
The following tables presents the components of income before income taxes as a
percentage of net sales:
(millions of dollars, except % of sales
data) Year Ended December 31,
2020 2019
% of Net Sales % of Net Sales
Gross profit $ 8,682.6 47.3 % $ 8,036.1 44.9 %
Selling, general, and administrative
expenses 5,477.9 29.8 % 5,274.9 29.5 %
Other general expense - net 27.7 0.2 % 39.1 0.2 %
Amortization 313.4 1.7 % 312.8 1.7 %
Impairment of trademarks 2.3 - % 122.1 0.7 %
Interest expense 340.4 1.9 % 349.3 2.0 %
Interest and net investment income (3.6) - % (25.9) (0.1) %
California litigation expense - - % (34.7) (0.2) %
Other expense - net 5.3 - % 16.7 - %
Income before income taxes $ 2,519.2 13.7 % $ 1,981.8 11.1 %
Consolidated gross profit increased $646.5 million in 2020 compared to the same
period in 2019. Consolidated gross profit as a percent to consolidated net sales
increased to 47.3% in 2020 from 44.9% in 2019. Consolidated gross profit dollars
and percent improved as a result of favorable customer and product mix and
moderating raw material costs, partially offset by unfavorable currency
translation rate changes.
The Americas Group's gross profit for 2020 increased $388.2 million compared to
the same period in 2019. The Americas Group's gross profit dollars and margin
improved as a result of favorable customer and product mix and moderating raw
material costs. The Consumer Brands Group's gross profit increased $221.0
million in 2020 compared to the same period in 2019. The Consumer Brands Group's
gross profit dollars and margin improved due primarily to higher volume sales,
product portfolio improvements and international cost reductions. The
Performance Coatings Group's gross profit for 2020 increased $21.1 million
compared to the same period in 2019. The Performance Coatings Group's gross
profit dollars and margin improved due primarily to moderating raw material
costs, partially offset by unfavorable currency translation rate changes.
Consolidated SG&A increased by $203.0 million due primarily to increased
expenses to support higher sales levels and net new store openings, partially
offset by good cost control. SG&A increased as a percent of sales to 29.8% in
2020 from 29.5% in 2019 as a result of higher costs to support our higher sales
levels and investments in future growth initiatives.
The Americas Group's SG&A increased $159.3 million for the year due primarily to
increased spending from new store openings, additional sales reps and COVID-19
costs, partially offset by currency translation rate changes. The Consumer
Brands Group's SG&A increased by $28.3 million for the year primarily to support
higher sales levels. The Performance Coatings Group's SG&A increased by $8.7
million for the year primarily due to investments in information technology
systems and expenses related to COVID-19, partially offset by currency
translation rate changes. The Administrative segment's SG&A increased $6.7
million primarily due to higher compensation, including incentive and
stock-based compensation.
Other general expense - net decreased $11.4 million in 2020 compared to 2019.
The decrease was primarily attributable to a $25.5 million increase in gains
from the sale and disposition of fixed assets, partially offset by a $14.1
million increase in provisions for environmental matters in the Administrative
segment. See Notes 9 and 18 to the Consolidated Financial Statements in Item 8
for additional information concerning environmental matters and Other general
expense - net, respectively.
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, 2020 . During the fourth quarter of 2020, the Company
recognized non-cash pre-tax impairment charges totaling $2.3 million related to
recently acquired trademarks in the Performance Coatings Group as a direct
result of recent performance which reduced the long-term forecasted net sales in
the Asia Pacific region. During the fourth quarter of 2019, the Company
recognized non-cash pre-tax impairment charges totaling $122.1 million related
to recently acquired trademarks. These charges included impairments totaling
$117.0 million in the Performance Coatings Group and $5.1 million in the
Consumer Brands Group . In the Performance Coatings Group , $75.6 million related
to trademarks in North America directly associated with strategic decisions made
to rebrand industrial products to the Sherwin-Williams® brand name, $25.7
million related to trademarks in the Asia Pacific region as a direct result of
recent
28
--------------------------------------------------------------------------------
Table of Contents
performance which reduced the long-term forecasted net sales and $15.7 million
related to other recently acquired trademarks in various regions. See Note 5 to
the Consolidated Financial Statements in Item 8 for additional information.
Interest expense decreased $8.9 million in 2020 primarily due to lower average
debt levels. Interest and net investment income decreased $22.3 million in 2020
to $3.6 million . The decrease is primarily due to the recognition of an $18.8
million gain during the fourth quarter of 2019 after the Company received a
favorable court decision in Brazil related to the recovery of certain indirect
taxes previously paid over gross sales. See Note 18 to the Consolidated
Financial Statements in Item 8 for additional information on the Brazil indirect
tax matter.
During the third quarter of 2019, the Company recognized a benefit of $34.7
million related to the California litigation. See Note 10 to the Consolidated
Financial Statements in Item 8 for additional information related to the
litigation.
Other expense - net decreased by $11.4 million in 2020 compared to 2019
primarily due to a decrease in foreign currency transaction related losses
primarily in the Performance Coatings Group . In 2020, the Administrative segment
recognized a $21.3 million loss related to the extinguishment of the 2.75%
Senior Notes due 2022. In 2019, the Administrative segment recognized a $32.4
million charge for a domestic pension plan settlement and $14.8 million in
losses related to the extinguishment of the 2.25% Senior Notes due 2020 and
2.75% Senior Notes due 2022, partially offset by a $38.7 million gain related to
the recognition of indirect tax credits. There were no other items within Other
income or Other expense that were individually significant at December 31, 2020
or 2019. See Notes 6, 7 and 18 to the Consolidated Financial Statements in Item
8 for additional information related to debt, pensions and Other expense - net,
respectively.
The following tables presents income before income taxes by segment and as a
percentage of net sales by segment:
Year Ended December 31,
2020 2019 $ Change % Change
Income Before Income Taxes:
The Americas Group $ 2,294.1 $ 2,056.5 $ 237.6 11.6 %
Consumer Brands Group 579.6 373.2 206.4 55.3 %
Performance Coatings Group 500.1 379.1 121.0 31.9 %
Administrative (854.6) (827.0) (27.6) (3.3) %
Total $ 2,519.2 $ 1,981.8 $ 537.4 27.1 %
Income Before Income Taxes as a % of Net
Sales :
The Americas Group 22.1 % 20.2 %
Consumer Brands Group 19.0 % 13.9 %
Performance Coatings Group 10.2 % 7.5 %
Administrative nm nm
Total 13.7 % 11.1 %
nm - not meaningful
Income Tax Expense
The effective income tax rate for 2020 was 19.4% compared to 22.2% in 2019. The
decrease in the effective rate was primarily due to the recognition of a $74.3
million tax credit investment loss in 2019 related to the reversal of certain
partnership tax credits, partially offset by a reduction in research and
development credits. The tax credit investment loss negatively impacted the 2019
effective tax rate by 370 basis points. See Note 19 to the Consolidated
Financial Statements in Item 8 for additional information.
Net Income Per Share
Diluted net income per share for 2020 increased to $22.08 per share from $16.49
per share for 2019. Diluted net income per share in 2020 included charges for
acquisition-related amortization expense of $2.50 per share. Currency
translation rate changes decreased diluted net income per share in the year by
$0.07 per share.
Diluted net income per share in 2019 included charges for acquisition-related
costs of $3.21 per share and other adjustments totaling $1.42 per share.
Acquisition-related costs include integration costs (which primarily consist of
professional service
29
--------------------------------------------------------------------------------
Table of Contents
expenses, salaries and other employee-related expenses dedicated directly to the
integration effort, and severance expenses all of which are included in Selling,
general and administrative and other expenses and Cost of goods sold) and
amortization of intangible assets recognized in the June 2017 acquisition of
Valspar (included in Amortization). Total other adjustments in 2019 included
charges of $1.00 per share for non-cash trademark impairment charges, a tax
credit investment loss of $0.79 per share and pension plan settlement expense of
$0.27 per share, partially offset by a Brazil indirect tax credit of $0.36 per
share and a benefit from the resolution of the California litigation of $0.28
per share.
FINANCIAL CONDITION, LIQUIDITY AND CASH FLOW
Overview
The Company's financial condition, liquidity and cash flow continued to be
strong in 2020 as net operating cash increased to a record $3.409 billion
primarily due to improved operating results as consolidated income before income
taxes increased to $2.519 billion or 13.7% of net sales. Strong net operating
cash provided the funds necessary for the Company to invest $303.8 million in
capital expenditures, reduce total debt by $410.3 million and return $2.934
billion to shareholders in the form of cash dividends and share buybacks during
the year.
During 2020, the Company generated EBITDA of $3.441 billion . See the Non-GAAP
Financial Measures section in Item 6 for definition and calculation of EBITDA.
As of December 31, 2020 , the Company had Cash and cash equivalents of $226.6
million and total debt outstanding of $8.292 billion . Total debt, net of Cash
and cash equivalents, was $8.066 billion and was 2.4 times the Company's EBITDA
in 2020.
Net Working Capital
Total current assets less Total current liabilities (net working capital)
decreased $112.8 million to a deficit of $3.0 million at December 31, 2020 from
a surplus of $109.8 million at December 31, 2019 . The net working capital
decrease is due to both a decrease in current assets and an increase in current
liabilities. Accounts receivable decreased $10.8 million , Inventories decreased
$85.5 million , and Other current assets decreased $8.8 million primarily related
to refundable income taxes. Current liabilities excluding Short-term borrowings
and the Current portion of long-term debt increased $681.8 million primarily due
to the timing of payments and higher incentive compensation, partially offset by
a $609.3 million decrease in Short-term borrowings and the Current portion of
long-term debt.
As a result of the net effect of these changes, the Company's current ratio
decreased to 1.00 at December 31, 2020 from 1.02 at December 31, 2019 . Accounts
receivable as a percent of net sales decreased to 11.3% in 2020 from 11.7% in
2019. Accounts receivable days outstanding decreased to 57 days in 2020 from 61
days in 2019. In 2020, provisions for allowance for doubtful collection of
accounts increased $17.0 million , or 46.6%. Inventories as a percent of net
sales decreased to 9.8% in 2020 from 10.6% in 2019. Inventory days outstanding
decreased to 74 days in 2020 from 81 days in 2019. The Company has sufficient
total available borrowing capacity to fund its current operating needs.
Property, Plant and Equipment
Net property, plant and equipment decreased $0.7 million to $1.835 billion at
December 31, 2020 due primarily to depreciation expense of $268.0 million and
sale or disposition of assets with remaining net book value of $46.9 million ,
partially offset by capital expenditures of $303.8 million and currency
translation and other adjustments of $10.4 million .
Capital expenditures during 2020 in The Americas Group were primarily
attributable to the opening of new paint stores and renovation and improvements
in existing stores. In the Consumer Brands Group and the Performance Coatings
Group , capital expenditures during 2020 were primarily attributable to
improvements and normal equipment replacements in manufacturing and distribution
facilities. The Administrative segment incurred capital expenditures primarily
to acquire the land for the new global headquarters (new headquarters) in
downtown Cleveland, Ohio and a new research and development (R&D) center in the
Cleveland suburb of Brecksville . The Company expects to invest a minimum of $600
million of capital expenditures to build both the new headquarters and R&D
center. Construction on the new headquarters and R&D center is expected to
commence in 2021, with completion in 2024 at the earliest. The Company has not
made any decisions regarding the disposition of the Company's current
Cleveland -area headquarters and R&D centers, which are all owned by the Company.
In 2021, the Company expects to spend more than 2020 for capital expenditures.
The predominant share of the capital expenditures in 2021 is expected to be for
various productivity improvement and maintenance projects at existing
manufacturing, distribution and research and development facilities, new store
openings, new or upgraded information systems hardware and the new global
headquarters and R&D center in Ohio . The Company does not anticipate the need
for any specific long-term external financing to support these capital
expenditures.
30
--------------------------------------------------------------------------------
Table of Contents
Goodwill and Intangible Assets
Goodwill , which represents the excess of cost over the fair value of net assets
acquired in purchase business combinations, increased $44.3 million in 2020 due
to foreign currency translation rate fluctuations.
Intangible assets decreased $263.3 million in 2020 primarily due to amortization
of finite-lived intangible assets of $313.4 million , impairment of
indefinite-lived trademarks of $2.3 million , partially offset by foreign
currency translation rate fluctuations of $51.5 million . See Note 5 to the
Consolidated Financial Statements in Item 8 for a description of goodwill,
identifiable intangible assets and asset impairments recognized 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 $53.1 million at December 31, 2020 represent the
excess of the fair value of assets over the actuarially determined projected
benefit obligations. See Note 7 to the Consolidated Financial Statements in Item
8 and the Defined Benefit Pension and Other Postretirement Benefit Plans section
below.
Other assets increased $79.8 million to $641.2 million at December 31, 2020 . The
increase was primarily due to incremental securities purchased with the proceeds
generated from the sale of treasury shares to fund future contributions to the
Company's Qualified Replacement Plan. See Notes 7 and 11 to the Consolidated
Financial Statements in Item 8 for additional information related to the
Qualified Replacement Plan and the sale of treasury stock, respectively.
Debt
Total debt including Short-term borrowings decreased by $393.1 million to $8.292
billion in 2020. This was primarily attributable to the repayment of Short-term
borrowings and a net reduction in Long-term debt. In March 2020 , the Company
issued $500.0 million of 2.30% Senior Notes due May 2030 and $500.0 million of
3.30% Senior Notes due May 2050 in a public offering. The net proceeds from the
issuance of these notes were used to repurchase a portion of the 2.75% Senior
Notes due 2022 and redeem the 2.25% Senior Notes due May 2020 . The repurchase of
the 2.75% Senior Notes due 2022 during the first quarter of 2020 resulted in a
loss of $21.3 million recorded in Other expense - net.
On July 19, 2018 , the Company entered into a new five-year $2.000 billion credit
agreement. This credit agreement may be used for general corporate purposes,
including the financing of working capital requirements. This credit agreement
allows the Company to extend the maturity of the facility with two one-year
extension options and the Borrowers to increase the aggregate amount of the
facility to $2.750 billion , both of which are subject to the discretion of each
lender. In addition, the Borrowers may request letters of credit in an amount of
up to $250.0 million . On October 8, 2019 , the Company amended this credit
agreement to, among other things, extend the maturity date to October 8, 2024 .
At December 31, 2020 and 2019, there were no short-term borrowings under this
credit agreement.
On May 6, 2016 , the Company entered into a five-year credit agreement,
subsequently amended on multiple dates to extend the maturity of the agreement.
This credit agreement 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 $875.0 million at December 31, 2020 . In September
2017 , the Company entered into an additional five-year letter of credit
agreement, subsequently amended on multiple dates to extend the maturity of the
agreement, with an aggregate availability of $625.0 million at December 31,
2020 . Both of these credit agreements are being used for general corporate
purposes. At December 31, 2020 and 2019, there were no borrowings outstanding
under these credit agreements.
There were no borrowings outstanding under the Company's domestic commercial
paper program at December 31, 2020 . Borrowings outstanding under the Company's
domestic commercial paper program at December 31, 2019 were $191.9 million with
a weighted average interest rate of 2.1%. Borrowings outstanding under various
foreign programs were $0.1 million and $12.8 million at December 31, 2020 and
2019, respectively with a weighted average interest rate of 0.2% and 4.3%,
respectively.
At December 31, 2020 , the Company had unused capacity under its various credit
agreements of $3.500 billion .
See Note 6 to the Consolidated Financial Statements in Item 8 for a detailed
description and summary of the Company's outstanding debt and other available
financing programs.
Defined Benefit Pension and Other Postretirement Benefit Plans
In 2018, the Company terminated its domestic defined benefit pension plan for
salaried employees (Terminated Plan) and the participants were moved to a
qualified replacement plan (Qualified Replacement Plan), which is the Company's
domestic defined contribution plan. The surplus assets of the Terminated Plan
are being used, as prescribed in the applicable regulations, to fund Company
contributions to the Qualified Replacement Plan. During 2019, the Company
transferred the remaining surplus of $242.2 million to a suspense account held
within a trust for the Qualified Replacement Plan. This amount
31
--------------------------------------------------------------------------------
Table of Contents
included $131.8 million of Company common stock (300,000 shares). The shares are
treated as treasury stock in accordance with ASC 715. During 2020, the Company
sold 275,000 treasury shares from the trust in the Company's Qualified
Replacement Plan. The proceeds generated from the sale of the treasury shares
were used to fund the Company's 2020 contribution to the Qualified Replacement
Plan and purchase securities held in a suspense account to fund future
contributions to the Company's Qualified Replacement Plan. The Company's
domestic defined benefit pension plan for hourly employees continues to operate.
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 increased $17.5 million to $110.3 million primarily due to
changes in the actuarial assumptions. The Company's liability for other
postretirement benefits increased $11.1 million to $291.6 million at
December 31, 2020 due primarily to changes in the actuarial assumptions.
The assumed discount rate used to determine the projected benefit obligation for
domestic defined benefit pension plans was 2.9% at December 31, 2020 and 3.4% at
December 31, 2019 . The assumed discount rate used to determine the projected
benefit obligation for foreign defined benefit pension plans decreased to 1.6%
at December 31, 2020 from 2.2% at December 31, 2019 . The decrease in the
discount rates for both the domestic and foreign defined benefit pension plans
was primarily due to lower interest rates. The assumed discount rate used to
determine the projected benefit obligation for other postretirement benefit
obligations decreased to 2.5% at December 31, 2020 from 3.2% at December 31,
2019 for the same reason.
The rate of compensation increases used to determine the projected benefit
obligations at December 31, 2020 was 3.0% for the domestic pension plan and 2.9%
for foreign pension plans, which was comparable to the rates used in the prior
year. 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 5.0% at December 31, 2020
for the domestic pension plan and was slightly lower for most foreign plans. In
establishing the expected long-term rate of return on plan assets for 2020,
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 other
postretirement benefits for 2020 were 5.3% and 9.0%, respectively, for medical
and prescription drug cost increases, both decreasing gradually to 4.5% in 2027.
In developing the assumed health care cost trend rates, management considered
industry data, historical Company experience and expectations for future health
care costs.
For 2021 net pension cost for the ongoing domestic pension plan, the Company
will use a discount rate of 2.9%, an expected long-term rate of return on assets
of 5.0% and a rate of compensation increase of 3.0%. Lower discount rates and
expected long-term rates of return on plan assets will be used for most foreign
plans. For 2021 net periodic benefit costs for other postretirement benefits,
the Company will use a discount rate of 2.5%. Net pension cost in 2021 for the
ongoing domestic pension plan is expected to be approximately $1.7 million . Net
periodic benefit costs for other postretirement benefits in 2021 is expected to
be approximately $11.3 million . See Note 7 to the Consolidated Financial
Statements in Item 8 for additional information on the Company's obligations and
funded status of its defined benefit pension plans and other postretirement
benefits.
Deferred Income Taxes
Deferred income taxes at December 31, 2020 decreased $123.8 million from the
prior year primarily due to the change in deferred taxes as a result of the
amortization of intangible assets in the current year. See Note 19 to the
Consolidated Financial Statements in Item 8 for additional information on
deferred taxes.
Other Long-Term Liabilities
Other long-term liabilities increased $177.0 million during 2020 due primarily
to legislatively authorized tax payment deferral mechanisms available primarily
for U.S. federal payroll withholding taxes until 2021 and 2022 and the net
investment hedges being in a net loss position at December 31, 2020 . See Note 15
to the Consolidated Financial Statements in Item 8 for additional information on
the net investment hedges.
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.
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
32
--------------------------------------------------------------------------------
Table of Contents
related to ongoing environmental compliance measures were not material to the
Company's financial condition, liquidity, cash flow or results of operations
during 2020. 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 2021. See Note 9 to
the Consolidated Financial Statements in Item 8 for further information on
environmental-related long-term liabilities.
Contractual Obligations and Commercial Commitments
The Company has certain obligations and commitments to make future payments
under contractual obligations and commercial commitments. The following tables
summarize such obligations and commitments as of December 31, 2020 .
Payments Due by Period
Less Than More Than
Contractual Obligations Total 1 Year 1-3 Years 3-5 Years 5 Years
Long-term debt $ 8,359.8 $ 25.1 $ 661.3 $ 1,150.3 $ 6,523.1
Interest on Long-term debt 4,580.4 306.5 576.6 537.0 3,160.3
Operating leases 2,017.7 441.3 711.3 455.9 409.2
Short-term borrowings 0.1 0.1
California litigation accrual 64.7 12.0 24.0 28.7
Real estate financing transactions 204.4 14.0 29.0 30.5 130.9
Purchase obligations (1) 364.3 364.3
Other contractual obligations (2) 228.2 99.1 44.8 30.4 53.9
Total contractual cash obligations $ 15,819.6 $ 1,262.4 (1)Relate to open purchase orders for raw materials atDecember 31, 2020 . (2)Relate primarily to estimated future capital contributions to investments in theU.S. affordable housing and historic renovation real estate partnerships and various other contractual obligations.
Amount of Commitment Expiration Per Period
Less Than More Than
Commercial Commitments Total 1 Year 1-3 Years 3-5 Years 5 Years
Standby letters of credit $ 51.3 $ 51.3
Surety bonds 110.0 110.0
Total commercial commitments $ 161.3 $ 161.3 $ - $ - $ -
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 2020, 2019
and 2018, including customer satisfaction settlements during the year, were as
follows:
2020 2019 2018
Balance at January 1 $ 42.3 $ 57.1 $ 151.4
Charges to expense 38.1 32.5 31.7
Settlements (37.1) (47.3) (57.8)
Divestiture and other adjustments (68.2)
Balance at December 31 $ 43.3 $ 42.3 $ 57.1
Warranty accruals acquired in connection with the Valspar acquisition in 2017
include warranties for certain products under extended furniture protection
plans. The decrease in the accrual in 2018 was primarily due to the divestiture
of the furniture protection plan business during the third quarter of 2018 for
an immaterial amount that approximated net book value.
33
--------------------------------------------------------------------------------
Table of Contents
Shareholders' Equity
Shareholders' equity decreased $512.5 million to $3.611 billion at December 31,
2020 from $4.123 billion last year. The decrease was primarily attributable to
the Company repurchasing $2.446 billion in Treasury stock and declaring $488.0
million in cash dividends, partially offset by $2.030 billion of net income, an
increase of $250.8 million associated with the recognition of stock-based
compensation expense and stock option exercises, and an increase of $182.4
million from the issuance of treasury stock during the year. During the fourth
quarter of 2020, the Company retired 30.6 million common stock shares held in
treasury, which resulted in decreases of Common stock, Retained earnings and
Treasury stock of $30.6 million , $8.062 billion , and $8.092 billion ,
respectively. See the Statements of Consolidated Shareholders' Equity and
Statements of Consolidated Comprehensive Income in Item 8 for additional
information.
The Company purchased 3.9 million shares of its common stock for treasury
purposes through open market purchases during 2020. The Company acquires its
common stock for general corporate purposes, and depending on its cash position
and market conditions, it may acquire shares in the future. The Company had
remaining authorization from its Board of Directors at December 31, 2020 to
purchase 4.55 million shares of its common stock. On February 17, 2021 , the
Board of Directors authorized the Company to purchase an additional 15.0 million
shares of the Company's stock for treasury purposes.
The Company's 2020 annual cash dividend of $5.36 per share represented 32.5% of
2019 diluted net income per share. The 2020 annual dividend represented the 42nd
consecutive year of increased dividend payments since the dividend was suspended
in 1978. On February 17, 2021 , the Board of Directors increased the quarterly
cash dividend to $1.65 per share. This quarterly dividend, if approved in each
of the remaining quarters of 2021, would result in an annual dividend for 2021
of $6.60 per share or a 30% payout of 2020 diluted net income per share.
On February 3, 2021 , the Board of Directors approved and declared a
three-for-one stock split in the form of a stock dividend. Each shareholder of
record at the close of business on March 23, 2021 will receive two additional
common shares for each then-held common share, to be distributed after close of
trading on March 31, 2021 .
Net Investment Hedges
In February 2020 , the Company settled its $400.0 million U.S. Dollar to Euro
cross currency swap contract entered into in May 2019 to hedge the Company's net
investment in its European operations. At the time of the settlement, an
unrealized gain of $11.8 million , net of tax, was recognized in Accumulated
other comprehensive income (loss) (AOCI), a component of Shareholders' equity.
In February 2020 , the Company also entered into two U.S. Dollar to Euro cross
currency swap contracts to hedge the Company's net investment in its European
operations. The contracts, which were designated as net investment hedges, have
a notional value of $500.0 million and $244.0 million , respectively, and mature
on June 1, 2024 and November 15, 2021 , respectively. During the term of the
$500.0 million contract, the Company will pay fixed-rate interest in Euros and
receive fixed-rate interest in U.S. Dollars, thereby effectively converting a
portion of the Company's U.S. Dollar denominated fixed-rate debt to Euro
denominated fixed-rate debt. During the term of the $244.0 million contract, the
Company will pay floating-rate interest in Euros and receive floating-rate
interest in U.S. Dollars.
As of December 31, 2020 , the outstanding cross currency swap contracts were in a
net loss position of $85.8 million with $31.0 million included in Other accruals
and $54.8 million included in Other liabilities, respectively, on the
consolidated balance sheet. As of December 31, 2019 , the outstanding cross
currency swap contract was in a net gain position of $1.5 million . See Note 15
to the Consolidated Financial Statements in Item 8 for additional information.
Cash Flow
Net operating cash increased $1.087 billion in 2020 to a cash source of $3.409
billion from $2.321 billion in 2019 due primarily to an increase in net income
and improved working capital management, partially offset by unfavorable changes
in non-cash items when compared to 2019. Net operating cash increased as a
percent to sales to 18.6% in 2020 compared to 13.0% in 2019. During 2020, strong
net operating cash continued to provide the funds necessary to pay down total
net debt, invest in new stores and manufacturing and distribution facilities,
and return cash to shareholders through treasury stock purchases and dividends
paid.
Net investing cash usage decreased $140.2 million to a usage of $322.4 million
in 2020 from a usage of $462.6 million in 2019 due primarily to a decrease in
cash used for acquisitions and an increase in proceeds from sale of assets. See
Note 3 to the Consolidated Financial Statements in Item 8 for additional
information on the acquisitions in 2019.
Net financing cash usage increased $1.174 billion to a usage of $3.020 billion
in 2020 from a usage of $1.846 billion in 2019 due primarily to an increase in
treasury stock purchases, repayments of short-term borrowings and cash dividends
paid, partially offset by a decrease in long-term debt repayments and issuances,
as well as the issuance of 275,000 shares of treasury stock
34
--------------------------------------------------------------------------------
Table of Contents
(which were associated with the domestic defined benefit plan terminated in 2018
as disclosed in Notes 7 and 11 to the Consolidated Financial Statements in Item
8).
Litigation
See Note 10 to the Consolidated Financial Statements in Item 8 for information
concerning litigation.
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. In
2020 and 2019, the Company entered into foreign currency forward contracts with
maturity dates of less than twelve months primarily to hedge against value
changes in foreign currency and cross currency swap contracts to hedge its net
investment in European operations. See Notes 1, 15 and 18 to the Consolidated
Financial Statements in Item 8 for additional information related to the
Company's use of derivative instruments.
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.
Financial Covenant
Certain borrowings contain a consolidated leverage covenant. The covenant states
the Company's leverage ratio is not to exceed 3.75 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 "Non-GAAP
Financial Measures" section in Item 6 for a reconciliation of EBITDA to net
income. At December 31, 2020 , 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 6 to the Consolidated Financial Statements in
Item 8 for additional information.
Employee Stock Ownership Plan
Participants in the Employee Stock Purchase and Savings Plan, the Company's
employee stock ownership plan (ESOP), are allowed to contribute up to the lesser
of 50% of their annual compensation and the maximum dollar amount allowed under
the Internal Revenue Code. The Company matches 6% of eligible employee
contributions. The Company's matching contributions to the ESOP charged to
operations were $120.0 million in 2020 compared to $111.9 million in 2019. At
December 31, 2020 , there were 7,318,468 shares of the Company's common stock
being held by the ESOP, representing 8.2% of the total number of voting shares
outstanding. See Note 12 to the Consolidated Financial Statements in Item 8 for
additional information concerning the Company's ESOP.
35
--------------------------------------------------------------------------------
Table of Contents
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles (US GAAP) requires management to make estimates
and assumptions that affect amounts reported in the accompanying consolidated
financial statements. These determinations were made based upon management's
best estimates, judgments and assumptions that were believed to be reasonable
under the circumstances, giving due consideration to materiality. We do not
believe there is a great likelihood that materially different amounts would be
reported under different conditions or using different assumptions related to
the accounting policies described below. However, application of these
accounting policies involves the exercise of judgment and use of assumptions as
to future uncertainties and, as a result, actual results could differ from these
estimates.
All of the significant accounting policies that were followed in the preparation
of the consolidated financial statements are disclosed in Note 1 to the
Consolidated Financial Statements in Item 8. Management believes that the
following critical accounting policies and estimates have a significant impact
on our consolidated financial statements.
Inventories
Inventories were stated at the lower of cost or net realizable value 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, then 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. If
management estimates that the reasonable market value is below cost or
determines 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 is provided for in the reserve for
obsolescence. See Note 4 to the Consolidated Financial Statements in Item 8 for
more information regarding the impact of the LIFO inventory valuation and the
reserve for obsolescence.
Goodwill and Intangible Assets
In accordance with 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. An optional
qualitative assessment allows companies to skip the annual quantitative test if
it is not more likely than not that impairment has occurred based on monitoring
key Company financial performance metrics and macroeconomic conditions. The
qualitative assessment is performed when deemed appropriate.
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, then impairment of the reporting unit exists. 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 had seven components, some of which are aggregated due to similar
economic characteristics, to form three reporting units (also the operating
segments) with goodwill as of October 1, 2020 , the date of the annual impairment
test. The annual impairment review performed as of October 1, 2020 did not
result in any of the reporting units having impairment or deemed at risk for
impairment.
36
--------------------------------------------------------------------------------
Table of Contents
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, terminal value rates and, to a lesser extent, tax
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 2020 impairment
testing are consistent with prior years. The annual impairment review performed
as of October 1, 2020 resulted in the Company recognizing non-cash pre-tax
impairment charges totaling $2.3 million related to lower than anticipated sales
of an acquired indefinite-lived trademark.
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 Note 5 to the Consolidated Financial Statements
in Item 8 for a discussion of goodwill and intangible assets and the impairment
tests performed in accordance with the Goodwill and Other Intangibles Topic of
the ASC.
Valuation of Long-Lived Assets
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, including Operating lease right-of-use assets, may not be recoverable or
the useful life had changed, impairment tests were performed or the useful life
was adjusted. Undiscounted cash flows were used to calculate the recoverable
value of long-lived assets to determine if such assets were not recoverable. If
the carrying value of the assets was deemed to not be recoverable, the
impairment to be recognized is the amount by which the carrying value of the
assets exceeds the estimated fair value of the assets as determined in
accordance with the Fair Value Topic of the ASC. If the usefulness of an asset
was determined to be impaired, then management estimated a new useful life based
on the period of time for projected uses of the asset. Fair value approaches 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. See Note 5 to the Consolidated Financial Statements in Item 8 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.
See Note 1 to the Consolidated Financial Statements in Item 8 for the Property,
Plant and Equipment accounting policy.
Defined Benefit Pension and Other Postretirement Benefit Plans
To determine the Company's ultimate obligation under its defined benefit pension
plans and other postretirement benefit plans , 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 AOCI. The amounts recorded in
AOCI 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.
In 2021, pension costs are expected to decrease slightly and other
postretirement benefit plan costs are expected to increase slightly based on the
actuarial assumptions being applied. See Note 7 to the Consolidated Financial
Statements in Item 8 for information concerning the Company's defined benefit
pension plans and other postretirement benefit plans.
37
--------------------------------------------------------------------------------
Table of Contents
Environmental Matters
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). 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, which are mostly undiscounted, are determined
based on currently available facts regarding each site. If the reasonably
estimable 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. Actual costs
incurred may vary from the accrued estimates due to the inherent uncertainties
involved. See Note 9 to the Consolidated Financial Statements in Item 8 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, but not limited to, litigation relating to product
liability and warranty, personal injury, environmental, intellectual property,
commercial, contractual and antitrust 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 US GAAP. 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 Note 10 to the Consolidated Financial Statements in Item 8 for
information concerning litigation.
Income Taxes
The Company estimated income taxes for each jurisdiction that it operated in.
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 accrued income taxes
will be made in the period in which the changes occur.
We recognize the tax benefit from an uncertain tax position only if it is more
likely than not that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the position. The tax
benefits recognized in the consolidated financial statements from such a
position are measured based on the largest benefit that has a greater than 50%
likelihood of being realized upon ultimate resolution. These assessments of
uncertain tax positions contain judgments related to the interpretation of tax
regulations in the jurisdictions in which we transact business. The judgments
and estimates made at a point in time may change based on the outcome of tax
audits, expiration of statutes of limitations, as well as changes to, or further
interpretations of, tax laws and regulations. Income tax expense is adjusted in
our Statements of Consolidated Income in the period in which these events occur.
See Note 19 to the Consolidated Financial Statements in Item 8 for information
concerning income taxes.
38--------------------------------------------------------------------------------
Table of Contents
© Edgar Online, source
