Sherwin-Williams (SHW) 10-K risk factor changes: FY2018 vs FY2017

The risks described below and in other documents [removed: that] we file from time to time with the Securities and Exchange Commission could materially and adversely affect our business, 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 also adversely affect demand for some of our products and our results of operations, cash flow, liquidity or financial condition and that of our customers, [removed: vendors,] [added: vendors] and suppliers.

[added: A continuation or worsening 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.

If any of the banks in these credit and financing facilities are unable to perform on their commitments, [removed: which] [added: such inability] could adversely [removed: affect] [added: impact] our [added: cash flow, liquidity or financial condition, including our] ability to [removed: fund seasonal] [added: obtain funding for] working capital needs and [removed: obtain funding for] other general corporate [removed: purposes, our cash flow, liquidity or financial condition could be adversely impacted.][added: purposes.]

Although we currently have available credit facilities to fund our current operating needs, we cannot be certain [removed: that] we will be able to replace our existing credit facilities or refinance our existing or future debt when necessary.

We periodically evaluate the recoverability of the carrying value of our goodwill and intangible assets whenever events or changes in circumstances indicate [removed: that] such value may not be recoverable.

An impairment assessment involves judgment as to assumptions regarding future sales and cash [removed: flows] [added: flow] and the impact of market conditions on those assumptions.

Future events and changing market conditions may impact our assumptions and [removed: may result in changes in] [added: change] our estimates of future sales and cash [removed: flows that may result] [added: flow, resulting] in us incurring substantial impairment charges, which would adversely affect our results of operations or financial condition.

Although interest rates remain low by historical standards, this increase may adversely affect the demand for new residential homes, existing home [removed: turnover,] [added: turnover] and new non-residential construction.

In the U.S. construction and housing segments, the recent demand for new construction has caused contractors to experience a shortage of skilled workers, resulting in project backlogs and an adverse effect on the [removed: rate of] growth [added: rate] of demand for our products.

Factors such as [added: political instability, higher tariffs and] adverse weather conditions, including hurricanes, and other [added: natural] disasters can disrupt raw material and fuel supplies and increase our costs.

[removed: Recently,] [added: In recent years,] some raw material and energy prices have increased, particularly titanium dioxide and petrochemical feedstock sources, such as propylene and [removed: ethylene.][added: ethylene, as well as metal and plastic packaging.]

During [removed: 2017,] [added: 2018,] no individual customer accounted for sales totaling more than ten percent of our sales.

The benefits that are expected to result from the acquisition of Valspar will depend, in part, on our ability to realize the anticipated growth opportunities and [added: additional] cost synergies as a result of the acquisition.

Our success in realizing these growth opportunities and [added: additional] cost synergies, and the timing of this realization, depends on the successful integration of Valspar.

Members of our senior management may be required to devote considerable amounts of time to this integration process, which will decrease the time [removed: they will have] [added: available] to manage our company, service existing customers, attract new customers, and [removed: develop new products or strategies.]

There can be no assurance [removed: that] we will successfully or cost-effectively integrate Valspar.

Even if we are able to integrate Valspar successfully, this integration may not result in the realization of the full benefits of the growth opportunities and [added: additional] cost synergies [removed: that] we currently expect from this [removed: integration, and we cannot guarantee that these benefits will be achieved within anticipated time frames or at all.][added: integration.]

For example, we may not be able to eliminate all duplicative [removed: costs.][added: costs, and we may incur substantial, unanticipated expenses in connection with the Valspar integration.]

While [removed: it is anticipated that] [added: we expect] certain expenses will be incurred to achieve cost synergies, such expenses are difficult to estimate accurately, and may exceed current estimates.

At December 31, [removed: 2017,] [added: 2018,] we had total debt of approximately [removed: $10.5] [added: $9.3] billion, which is [removed: an increase] [added: a decrease] of [removed: $8.6] [added: $1.2] billion since December 31, [removed: 2016, including] [added: 2017 and includes] indebtedness incurred to complete the [removed: acquisition of Valspar.][added: Valspar acquisition.]

Our historical financial results have been, and we anticipate [removed: 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 [removed: that are] beyond our control.

We cannot guarantee [removed: that] our business will generate sufficient cash flow from our operations or [removed: that] future borrowings will be available to us in an amount sufficient to enable us to make payments of our debt, fund other liquidity needs and make planned capital expenditures.

The success of future acquisitions depends in large part on our ability to integrate the operations and personnel of the acquired companies and manage challenges that may arise as [removed: a result of the acquisitions, particularly when the acquired businesses operate in new or foreign markets.]

In the event [removed: that] we do not successfully integrate such future 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.

Net external sales of our consolidated foreign subsidiaries totaled approximately [removed: 19.8%, 14.5%] [added: 23.0%, 19.8%] and [removed: 15.8%] [added: 14.5%] of our total consolidated net sales in [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively.

Our results of operations, cash flow, liquidity or financial condition could be adversely affected by a variety of [added: domestic and] international factors, including general economic conditions, [added: political instability,] inflation rates, recessions, [added: tariffs,] 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.

In many foreign countries, it is acceptable to engage in certain business practices [removed: that] we are prohibited from engaging in because of regulations [removed: 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 [removed: that] our policies and procedures will prevent a violation of these regulations.

[removed: We are affected by new laws and] regulations, and changes to existing laws and regulations, including interpretations by courts and regulators.

Although we believe [removed: that] we have adopted appropriate risk management and compliance programs to mitigate these risks, the global and diverse nature of our operations means [removed: that] compliance risks will continue to exist.

In the ordinary course of our business, we are subject to examinations and investigations by various tax [removed: authorities.][added: authorities and other regulators.]

The Tax Act [removed: makes] [added: made] substantial changes to [added: then-current] U.S. tax law, including a reduction in the corporate tax rate, a limitation on deductibility of interest expense, a limitation on the use of net operating losses to offset future taxable income, the allowance of immediate expensing of capital expenditures, deemed repatriation of foreign earnings and significant changes to the taxation of foreign earnings going forward.

The Tax Act contains numerous, complex provisions impacting U.S. multinational companies, and we continue to review and assess the legislative language and [removed: its potential] [added: guidance promulgated by regulators to determine the Tax Act's full] impact on us.

The full extent of the impact remains uncertain at this time, and our current interpretations of, and assumptions regarding, the Tax Act are subject to additional regulatory or administrative developments, including any regulations or [removed: other] [added: additional] guidance promulgated by the U.S. Internal Revenue [removed: Service.][added: Service or other regulators.]

As a result, the Tax Act, including any regulations or other guidance promulgated by the U.S. Internal Revenue [removed: Service,] [added: Service or other regulators,] and other tax laws could have significant effects on us, some of which [removed: may be adverse and] could materially and adversely impact our financial condition, results of operations and cash [removed: flows.][added: flow.]

In those cases where no accrual is recorded because it is not probable [removed: 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 those income tax positions where we [removed: assess that] [added: determine] there is not a greater than 50% likelihood [removed: that] such tax benefits will be sustained, we do not recognize a tax benefit in our financial statements.

We discuss risks and uncertainties with regard to taxes in more detail in Note [removed: 14] [added: 15] of the Notes to Consolidated Financial Statements on pages [removed: 70] [added: 71] through [removed: 72] [added: 73] of our [removed: 2017] [added: 2018] Annual Report.

Throughout 2018, interest rates, including mortgage rates, rose and may continue to rise in 2019.

develop new products or strategies.

We also cannot guarantee these benefits will be achieved within anticipated time frames or at all.

We require a significant amount of cash to service the substantial amount of debt we have outstanding.

a result of the acquisitions, particularly when the acquired businesses operate in new or foreign markets.

Recent years have seen a substantial increase in anti-bribery law enforcement activity, with more frequent and aggressive investigations and enforcement proceedings by both U.S. and non-U.S. regulators, and an increase in criminal and civil proceedings brought against companies and individuals.

Policy changes affecting international trade could adversely impact the demand for our products and our competitive position.

Due to the international scope of our operations, changes in government policies on foreign trade and investment may affect the demand for our products and services, impact the competitive position of our products or prevent us from being able to sell products in certain countries.

Our business benefits from free trade agreements, such as the North American Free Trade Agreement and successor agreements, which may include the United States-Mexico-Canada Agreement, and efforts to withdraw from, or substantially modify such agreements, in addition to the implementation of more restrictive trade policies, such as more detailed inspections, higher tariffs, import or export licensing requirements, exchange controls or new barriers to entry, could have a material adverse effect on our results of operations, financial condition or cash flow and that of our customers, vendors and suppliers.

Additionally, the results of the United Kingdom’s referendum on European Union membership, advising for the exit from the European Union, has caused and may continue to cause significant volatility in global stock markets, currency exchange rate fluctuations and global economic uncertainty.

Although it is unknown what the terms of the United Kingdom’s future relationship with the European Union will be, it is possible there will be greater restrictions on imports and exports between the United Kingdom and the European Union and increased regulatory complexities.

Any of these factors could adversely impact customer demand, our relationships with customers and suppliers and our results of operations.

We are affected by new laws and

Further, we can provide no assurance our current interpretations of, and assumptions regarding, the Tax Act and any related regulations or guidance will not be reviewed or investigated by regulators in the future.

Security breaches and other disruptions to our information technology infrastructure could interfere with our operations, compromise our information and the information of our customers and suppliers and severely harm our business.

Compliance with these requirements, including the European Union's General Data Protection Regulation and other domestic and international regulations, could result in additional costs and changes to our business practices.

Moreover, we rely heavily on computer systems to manage and operate our business, record and process transactions, and manage, support and communicate with our employees, customers, suppliers and other vendors.

Computer systems are important to production planning, finance, company operations and customer service, among other business-critical processes.

Despite efforts to prevent disruptions to our computer systems, our systems may be affected by damage or interruption from, among other causes, power outages, system failures, computer viruses and other intrusions, including cyber attacks.

Computer hardware and storage equipment that is integral to efficient operations, such as email, telephone and other functionality, is concentrated in certain physical locations in the various continents in which we operate.

Additionally, we rely on software applications, enterprise cloud storage systems and cloud computing services provided by third-party vendors, and our business may be adversely affected by service disruptions in or security breaches to such third-party systems.

In the event any significant liability is determined to be attributable to us relating to such litigation, or any such liability is higher than any amount currently accrued for such litigation,

A continuation or worsening of these conditions

In recent months, interest rates, including mortgage rates, have risen and are expected to continue to rise in 2018.

Moreover, we may incur substantial expenses in connection with the integration of Valspar.

We incurred a substantial amount of debt to complete the acquisition of Valspar.

To service our debt, we will require a significant amount of cash.

For example, during 2017 the impact of Hurricanes Harvey, Irma and Maria on our operations in Texas, Florida, the Caribbean and neighboring areas, as well as two earthquakes in Mexico, resulted in a

Unauthorized disclosure of sensitive or confidential customer, employee, supplier or Company information, whether through a breach of our computer systems, including cyber attacks, or otherwise, could severely harm our business.

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.

We have not accrued any amounts for such litigation.

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.

A trial commenced in the Santa Clara County, California proceeding on July 15, 2013 and ended on August 22, 2013.

The court entered final judgment on January 27, 2014, finding in favor of the plaintiffs and against the Company and two other defendants (ConAgra Grocery Products Company and NL Industries, Inc.).

The final judgment held the Company jointly and severally liable with the other two defendants to pay $1.15 billion into a fund to abate the public nuisance.

The Company strongly disagrees with the judgment.

On February 18, 2014, the Company filed a motion for a new trial and a motion to vacate the judgment.

The court denied these motions on March 24, 2014.

On March 28, 2014, the Company filed a notice of appeal to the Sixth District Court of Appeal for the State of California.

The filing of the notice of appeal effects an automatic stay of the judgment without the requirement to post a bond.

Oral argument before the Sixth District Court of Appeal was held on August 24, 2017.

On November 14, 2017, the Sixth District Court of Appeal entered its decision, which affirmed the trial court’s judgment of liability with respect to residences built before 1951 and reversed and vacated the trial court’s judgment with respect to residences built after 1950.

The Sixth District Court of Appeal directed the trial court to: (i) recalculate the amount of the abatement fund to limit the fund to the amount necessary to cover the cost of inspecting and remediating pre-1951 residences; and (ii) hold an evidentiary hearing to appoint a suitable receiver.

On November 29, 2017, the Company and the two other defendants filed separate Petitions for Rehearing, which the Sixth District Court of Appeal denied on December 6, 2017.

The Sixth District Court of Appeal’s decision became final on December 14, 2017.

On December 22, 2017, the Company and the two other defendants submitted separate Petitions for Review to the California Supreme Court.

On February 14, 2018, the California Supreme Court issued an order denying the Petitions for Review.

The Company believes that the judgment conflicts with established principles of law and is unsupported by the evidence.

The Company intends to file a Petition for Writ of Certiorari with the Supreme Court of the United States seeking discretionary review.

The Company also intends to file a motion to stay the Santa Clara County, California proceeding while the Petition for Writ of Certiorari is pending.

Although the Company believes it is probable that a loss has occurred, the Company has concluded that it is not possible to reasonably estimate the range of potential loss due to the numerous possible outcomes and uncertainties, including, but not limited to, (i) the final amount of the abatement fund necessary to cover the cost of inspecting and remediating pre-1951 residences, as recalculated by the trial court, and (ii) the portion of the abatement fund for which the Company, the two other defendants and others are determined to be responsible.

If the Company concludes that it is possible to reasonably estimate the range of potential loss once more definitive information becomes available, the Company will recognize the loss and disclose such information.

Because of joint and several liability, it is possible the Company could ultimately be liable for the total amount of the abatement fund.

In the event any significant liability is determined to be attributable to the Company relating to such litigation, the recording of any 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 liability is accrued.

The information required by this item is set forth on pages 19 through [removed: 34] [added: 35] of our [removed: 2017] [added: 2018] Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is incorporated herein by reference.

The Company entered into foreign currency [removed: option and] forward currency exchange contracts during [removed: 2017] [added: 2018] to hedge against value changes in foreign currency.

There were no material contracts outstanding at December 31, [removed: 2017.][added: 2018.]

Foreign currency [removed: option and] forward contracts are described in Note [removed: 13] [added: 14] of the Notes to Consolidated Financial Statements on page [removed: 70] [added: 71] of our [removed: 2017] [added: 2018] Annual Report.

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 [removed: flows.The interest rate lock agreements entered into in 2016 were settled during 2017.][added: flows.]

See Note [removed: 7] [added: 8] of the Notes to Consolidated Financial Statements on pages 61 through 62 of our [removed: 2017] [added: 2018] Annual Report.

The interest rate lock agreements entered into in 2016 were settled during 2017.

[removed: Upon completion of the Valspar acquisition in the second quarter of 2017, the] [added: The] Company [removed: made important changes to its organizational and reporting structure that resulted in establishing] [added: has] three reportable operating segments: The Americas Group, Consumer Brands Group and Performance Coatings Group (individually, a "Reportable Segment" and collectively, the “Reportable Segments”).

For more information about the Reportable Segments, see pages 8 through 15 of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

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 [removed: 46] [added: 45] through [removed: 50] [added: 49] of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

The Americas Group consisted of [removed: 4,620] [added: 4,696] company-operated specialty paint stores in the United States, Canada, Latin America and the Caribbean region at December 31, [removed: 2017.][added: 2018.]

The loss of any single customer would not have a material adverse effect on [removed: he] [added: the] business of this segment.

At December 31, [removed: 2017,] [added: 2018,] The Americas Group consisted of operations from subsidiaries in [removed: 9] [added: 10] foreign countries.

[removed: During 2017,] [added: In 2017 and 2016,] this segment opened 101 [added: and 142] net new stores, [removed: consisting of 114 new stores opened (76 in the][added: respectively.]

[added: During 2018, this segment opened 76 net new stores, consisting of 91 new stores opened (74 in the] United States, [removed: 15] [added: 16] in Canada, [added: and] 1 in [removed: Curacao, 14 in] South [removed: America and 8 in Mexico)] [added: America)] and [removed: 13] [added: 15] stores closed [removed: (4] [added: (1] in the United States, [removed: 1] [added: 2] in Canada, [removed: 6] [added: 11] in South America and [removed: 2] [added: 1] in Mexico).

A map on the cover flap of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference, shows the number of paint stores and their geographic location.

The [removed: CODM uses discrete financial information about The] Americas Group, supplemented with information by geographic region, product type and customer type, to assess performance of and allocate resources to The Americas Group as a whole.

The Consumer Brands Group supplies a broad portfolio of branded and private-label architectural [removed: paints,] [added: paint,] stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks and adhesives to retailers and distributors throughout North America, as well as in Australia, [added: New Zealand,] China and Europe.

The Consumer Brands Group also supports the Company's other businesses around the world with new product research and development, manufacturing, distribution and [removed: logistics Approximately 59.47% of the total sales of the Consumer Brands Group in 2017 were intersegment transfers of products primarily sold through The Americas Group.][added: logistics.]

At December 31, [removed: 2017,] [added: 2018,] the [removed: Consumer Brands] [added: Performance Coatings] Group consisted of operations in the United States and subsidiaries in [removed: 6] [added: 45] foreign countries.

Sales and marketing of certain controlled brand and [removed: private labeled] [added: private-label] products is performed by a direct sales staff.

Sherwin-Williams® and other controlled brand products are distributed through The Americas Group and this segment’s [removed: 290] [added: 282] company-operated branches and by a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third-party distributors.

During [removed: 2017,] [added: 2018,] this segment opened [removed: 4] [added: 3] new branches and closed [removed: 2] [added: 11] branches for a net [removed: increase] [added: decrease] of [removed: 2] [added: 8] branches.

At December 31, [removed: 2017,] [added: 2018,] the [removed: Performance Coatings] [added: Consumer Brands] Group consisted of operations in the United States and subsidiaries in [removed: 44] [added: 6] foreign [removed: countries.][added: countries, including company-operated outlets in Australia and New Zealand.]

A map on the cover flap of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference, shows the number of branches and their geographic locations.

Also included in the Administrative segment is a real estate management unit that is responsible for the ownership, management, and leasing of non-retail [added: properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities.]

Sales of this segment [removed: represents] [added: represent] external leasing revenue of excess headquarters space or leasing of facilities no longer used by the Company in its primary businesses.

[removed: Financial and other] [added: For additional] information regarding [removed: domestic] [added: environmental-related matters, see page 28 of our 2018 Annual Report under the caption “Environmental-Related Liabilities” of “Management’s Discussion] and [removed: foreign operations is set forth in Note 18] [added: Analysis] of [added: Financial Condition and Results of Operations” and Notes 1, 9 and 14 of] the Notes to Consolidated Financial Statements on [removed: page 76] [added: pages 47, 62 through 63 and 70, respectively,] of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

[removed: Additional information regarding risks attendant to foreign operations is set forth on page 29] [added: For a description] of [added: the Company’s liquidity and capital resources, see pages 25 through 30 of] our [removed: 2017] [added: 2018] Annual Report under the caption [removed: “Market Risk”] [added: “Financial Condition, Liquidity and Cash Flow”] of “Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operation,”] [added: Operations,”] which is incorporated herein by reference.

For additional information regarding our business and business developments, see pages 8 through 15 of our [removed: 2017] [added: 2018] Annual Report and the “Letter to Shareholders” on pages 2 through [removed: 6] [added: 7] of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

There are sufficient suppliers of each product purchased for resale that none of the Reportable Segments anticipate any significant sourcing problems during [removed: 2018.][added: 2019.]

| • | The Americas Group: Sherwin-Williams®, A-100®, Cashmere®, Colorgin®, Condor®, Duracraft®, Duration Home®, Duration®, Emerald®, Harmony®, HGTV Home® by Sherwin- Williams, Kem Pro®, Kem Tone®, Krylon®, Loxon®, Marson®, [removed: Martin Senour®,] Metalatex®, Minwax®, Novacor®, Paint Shield®, PrepRite®, ProClassic®, ProCraft ®, ProConstructor®, ProIndustrial™, ProMar®, ProPark®, Solo®, Sumaré®, SuperDeck®, SuperPaint®, Ultra Proteccion®, Woodscapes® |

| • | Consumer Brands Group: Accurate Dispersions™, Altax™, Bestt Liebco®, Cabot®, Conco®, Duckback®, Dupli-Color®, DuraSeal®, Dutch Boy®, Geocel®, Granosite®, H&C®, HGTV HOME® by Sherwin-Williams, Huarun™, Kool Seal®, Krylon®, [removed: Martin Senour®, Mason’s Select®,] Minwax®, Pratt & Lambert®, Purdy®, Ronseal™, Rubberset®, [removed: Snow Roof®,] Solver®, Sprayon®, SuperDeck®, Thompson’s® WaterSeal®, Tri-Flow®, Uniflex®, Valspar®, VHT®, Wattyl®, White Lightning® |

| • | Performance Coatings Group: Sherwin-Williams®, Acrolon®, [removed: AcromaPro®,Arti™,] [added: AcromaPro®, Arti™,] ATX™, AWX Performance Plus™, Baco®, Conely®, DeBeer®, DFL™, Dimension®, Duraspar™, Envirolastic®, Euronavy®, Excelo®, Fastline®, Finish 1™, Firetex®, Fluropon®, Genesis®, Heat-Flex®, House of Kolor®, Huarun™, Inchem®, Inver®, Kem Aqua®, Lanet™, Lazzuril®, Macropoxy®, Magnalux™, Martin Senour®, Matrix®, ML Campbell®, Oece™, [added: PermaClad®, Planet Color®, Polane®, Powdura®, Prospray®, Sayerlack®, Sher-Wood®, Ultra-Cure®, Ultra™, USC®, ValPure® V70, Valspar®, Wattyl®] |

We believe that sufficient productive capacity currently exists to fulfill our needs for paint, coatings and related products through [removed: 2018.][added: 2019.]

In the Consumer Brands Group, domestic and foreign competitors include manufacturers and distributors of branded and [removed: private labeled] [added: private-label] paint and coatings products.

We employed [removed: 52,695] [added: 53,368] persons at December 31, [removed: 2017.][added: 2018.]

Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside our control, that could cause actual [added: results to differ materially from such statements and from our historical results and experience.]

| • | general business conditions, strengths of retail and manufacturing economies and [removed: the] growth in the coatings industry; |

| • | risks inherent in the achievement of [added: additional] anticipated cost synergies resulting from the acquisition of Valspar and the timing thereof; |

| • | other changes in governmental policies, laws and regulations, including changes in [added: tariff policies, as well as changes in] accounting policies and standards and taxation requirements (such as new tax laws and new or revised tax law interpretations); |

The CODM uses discrete financial information about

Approximately 55.82% of the total sales of the Consumer Brands Group in 2018 were intersegment transfers of products primarily sold through The Americas Group.

A map on the cover flap of our 2018 Annual Report, which is incorporated herein by reference, shows the number of company-operated outlets and their location.

Prior period reporting has been adjusted to reflect the updated reportable segments.

The Americas Group Reportable Segment includes the Company's previous Paint Stores Group and Latin America Coatings Group, along with a specialty retail business of Valspar.

In 2016 and 2015, this segment opened 142 and 98 net new stores, respectively.

The Consumer Brands Group Reportable Segment includes the Company's previous Consumer Group along with Valspar's previous Consumer Paints segment, excluding Valspar's automotive refinishes products business.

The Performance Coatings Group Reportable Segment includes the Company's previous Global Finishes Group and Valspar's previous Coatings Group segment.

The Performance Coatings Group also includes Valspar's automotive refinishes products business, which was previously reported under Valspar's Consumer Paints segment.

Valspar’s North American industrial wood coatings business, which was previously reported under the Valspar's Coatings Group segment, was divested.

In addition, a specialty coatings business previously in the Company's Consumer Group is now included in the Performance Coatings Group.

properties held primarily for use by the Company, including the Company’s headquarters site, and disposal of idle facilities.

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 77 of our 2017 Annual Report, which is incorporated herein by reference.

Domestic and Foreign Operations

For a description of the Company’s liquidity and capital resources, see pages 24 through 29 of our 2017 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.

PermaClad®, Planet Color®, Polane®, Powdura®, Prospray®, Sayerlack®, Sher-Wood®, Ultra-Cure®, Ultra™, USC®, ValPure® V70, Valspar®, Wattyl®

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 49 of our 2017 Annual Report, which is incorporated herein by reference.

For additional information regarding environmental-related matters, see page 27 of our 2017 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 48, 62 through 63 and 69 through 70, respectively, of our 2017 Annual Report, which is incorporated herein by reference.

results to differ materially from such statements and from our historical results and experience.

For information regarding environmental-related matters and other legal proceedings, see pages [removed: 27] [added: 28] and [removed: 29] [added: 30] of our [removed: 2017] [added: 2018] 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, [removed: 8, 9] [added: 9, 10] and [removed: 13] [added: 14] of the Notes to Consolidated Financial Statements on pages [removed: 48,] [added: 47,] 62 through 63, 63 through [removed: 66] [added: 67] and [removed: 69 through] 70, respectively, of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

On September 14, 2018, the California Air Resources Board (“CARB”) issued a Notice of Violation to the Company for several aerosol coatings products that were allegedly labeled incorrectly or otherwise violated CARB rules.

The Company entered into settlement negotiations with CARB in an attempt to resolve the alleged violations.

On January 15, 2019, a settlement conference was held, and an agreement to resolve the alleged violations was reached pursuant to which the Company has agreed to pay a penalty of $220,000 to resolve the matter.

As previously disclosed in the Company’s Form 10-Q for the quarterly period ended September 30, 2018, the Company received a letter dated September 26, 2018 from the South Coast Air Quality Management District (“SCAQMD”) in California alleging excess emissions from non-compliant coatings and seeking a proposed penalty of approximately $1.5 million.

Settlement discussions regarding this matter have been unsuccessful to date, and SCAQMD filed a civil Complaint against the Company on November 30, 2018 in the Superior Court of California seeking civil penalties, costs and injunctive relief including an initial demand of $30 million.

The Company disputes the allegations in the Complaint and intends to vigorously defend this matter.

For the fiscal year ended December 31, [removed: 2017][added: 2018]

Indicate by check mark whether the Registrant has submitted electronically [removed: and posted on its corporate website, if any,] every Interactive Data File required to be submitted [removed: 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 [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K [added: (§ 229.405 of this chapter)] 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

| Non-accelerated filer | o | [removed: (Do not check if a smaller reporting company)] | Smaller reporting company | o |

At January 31, [removed: 2018, 93,993,791] [added: 2019, 92,718,270] 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 30, [removed: 2017] [added: 2018] was [removed: $32,731,587,330] [added: $37,995,087,928] (computed by reference to the price at which the common stock was last sold on such date).

Portions of our Annual Report to Shareholders for the fiscal year ended December 31, [removed: 2017 (“2017] [added: 2018 (“2018] Annual Report”) are incorporated by reference into Parts I, II and IV of this report.

Portions of our Proxy Statement for the [removed: 2018] [added: 2019] 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, [removed: 2017] [added: 2018] are incorporated by reference into Part III of this report.

| Item 1. | [removed: [Business](#sC8399F96B4F452F2B411B87132AFDBDB)] [added: [Business](#sC746D0B5D1845BBDA28CD163F7BF096C)] | [removed: [1](#sC8399F96B4F452F2B411B87132AFDBDB)] [added: [1](#sC746D0B5D1845BBDA28CD163F7BF096C)] |

| | [Cautionary Statement Regarding Forward-Looking [removed: Information](#s9A35A4ADF11150CE852CA507D319D291)] [added: Information](#s549EEDB557AC5BCEAB38484051386F59)] | [removed: [4](#s9A35A4ADF11150CE852CA507D319D291)] [added: [4](#s549EEDB557AC5BCEAB38484051386F59)] |

| Item 1A. | [Risk [removed: Factors](#s6ECA0F9A4BC350E8B5B3D79CCC550BD0)] [added: Factors](#s5535B10EC6D65C04B63EEB496C2B8F21)] | [removed: [5](#s6ECA0F9A4BC350E8B5B3D79CCC550BD0)] [added: [5](#s5535B10EC6D65C04B63EEB496C2B8F21)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s37FE4449CEAC554B951180035C487B55)] [added: Comments](#sD7E5A1CBCF0F5482AD230A74E345AA13)] | [removed: [12](#s37FE4449CEAC554B951180035C487B55)] [added: [12](#sD7E5A1CBCF0F5482AD230A74E345AA13)] |

| Item 2. | [removed: [Properties](#sA3E50C0C241D5A8E9B2111C4DDABF56A)] [added: [Properties](#s5DC65C4432FF5F728F883A91D6E169BE)] | [removed: [13](#sA3E50C0C241D5A8E9B2111C4DDABF56A)] [added: [13](#s5DC65C4432FF5F728F883A91D6E169BE)] |

| Item 3. | [Legal [removed: Proceedings](#s489B8CD046C25EBCAECDDA237FBA4550)] [added: Proceedings](#s9937C31B2CE551DB87B9C3A63B36A2DD)] | [removed: [14](#s489B8CD046C25EBCAECDDA237FBA4550)] [added: [14](#s9937C31B2CE551DB87B9C3A63B36A2DD)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s00DE7036E04E5D70B109CB28891EA7FD)] [added: Disclosures](#s7796A4DB36795C15AA54955E22F338DF)] | [removed: [14](#s00DE7036E04E5D70B109CB28891EA7FD)] [added: [14](#s7796A4DB36795C15AA54955E22F338DF)] |

| | [Executive Officers of the [removed: Registrant](#s906AFAEE89775BE9BC0747AD5739A18E)] [added: Registrant](#s472C4E38C49B57EEB4617834C614E9F5)] | [removed: [14](#s906AFAEE89775BE9BC0747AD5739A18E)] [added: [14](#s472C4E38C49B57EEB4617834C614E9F5)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sC809F75938E15BB8B30FB5E0626292AA)] [added: Securities](#sDA5968BD117D5374BF8CA30DE92AD5F4)] | [removed: [16](#sC809F75938E15BB8B30FB5E0626292AA)] [added: [16](#sDA5968BD117D5374BF8CA30DE92AD5F4)] |

| Item 6. | [Selected Financial [removed: Data](#s0F30B8FEAA155E30899E2F66F5421FC5)] [added: Data](#sC601116249CB5EDA8FF7F891F52B017E)] | [removed: [17](#s0F30B8FEAA155E30899E2F66F5421FC5)] [added: [17](#sC601116249CB5EDA8FF7F891F52B017E)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD0119A1257AC57AEB47DBA760061C5A2)] [added: Operations](#s0F13F388E452516DB7FC8B9FDA07FDC0)] | [removed: [17](#sD0119A1257AC57AEB47DBA760061C5A2)] [added: [17](#s0F13F388E452516DB7FC8B9FDA07FDC0)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s8B931D642A0251EA82D3DEE7EAA237F1)] [added: Risk](#s3B0C57EDE9555B3E9F7FC19F8D175018)] | [removed: [17](#s8B931D642A0251EA82D3DEE7EAA237F1)] [added: [17](#s3B0C57EDE9555B3E9F7FC19F8D175018)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#sA46D1DF33DE75F708AF1226758549653)] [added: Data](#s1294283BBCB35D12B0DC1E9016195D39)] | [removed: [18](#sA46D1DF33DE75F708AF1226758549653)] [added: [18](#s1294283BBCB35D12B0DC1E9016195D39)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s1FC2AB1985225EC18DB63FDF7630BC5D)] [added: Disclosure](#s200D3168A0D357FD9BC43CE9F9DAE8C2)] | [removed: [18](#s1FC2AB1985225EC18DB63FDF7630BC5D)] [added: [18](#s200D3168A0D357FD9BC43CE9F9DAE8C2)] |

| Item 9A. | [Controls and [removed: Procedures](#s6060A025E0F45806B7095815C0FA9769)] [added: Procedures](#s470D7E04F6AD578899F3FA9136457E97)] | [removed: [18](#s6060A025E0F45806B7095815C0FA9769)] [added: [18](#s470D7E04F6AD578899F3FA9136457E97)] |

| Item 9B. | [Other [removed: Information](#sC8E80795EA8C5F4FAC9E664577078BFB)] [added: Information](#sF126325763C1500399A3DCA48D4643DB)] | [removed: [18](#sC8E80795EA8C5F4FAC9E664577078BFB)] [added: [18](#sF126325763C1500399A3DCA48D4643DB)] |

| [PART [removed: III](#sC59BA423AD20525FBABC351DB3817A0E)] [added: III](#s3EF72B326D1554C0825B2E9ABB5CCBA8)] | | |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#sF10C4B717E55545099DF65FBF3DC06C0)] [added: Governance](#s953E437E2ACC5A7BA3B6C9359E03F599)] | [removed: [19](#sF10C4B717E55545099DF65FBF3DC06C0)] [added: [19](#s953E437E2ACC5A7BA3B6C9359E03F599)] |

| Item 11. | [Executive [removed: Compensation](#s06BF3A8688545E36A4C65433998E8DC6)] [added: Compensation](#s1473B1D116EE5FCF8F0B8D0224BDCA0B)] | [removed: [19](#s06BF3A8688545E36A4C65433998E8DC6)] [added: [19](#s1473B1D116EE5FCF8F0B8D0224BDCA0B)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s7992931251195A82985646433914D8CB)] [added: Matters](#sE0B728BFFCBC5DBDAE74090896EA734F)] | [removed: [20](#s7992931251195A82985646433914D8CB)] [added: [20](#sE0B728BFFCBC5DBDAE74090896EA734F)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s11411A1EDC035185A18FF611926DE0AE)] [added: Independence](#s665889DEFFFA55DAB5B23A97DCAFB930)] | [removed: [20](#s11411A1EDC035185A18FF611926DE0AE)] [added: [20](#s665889DEFFFA55DAB5B23A97DCAFB930)] |

| Item 14. | [Principal Accountant Fees and [removed: Services](#sB3B7FCD5A4A156A0A1C6EEF30A87869F)] [added: Services](#sADE1147ED8775400A8702C0D353F5A5F)] | [removed: [20](#sB3B7FCD5A4A156A0A1C6EEF30A87869F)] [added: [20](#sADE1147ED8775400A8702C0D353F5A5F)] |

| Item 15. | [Exhibits and Financial Statement [removed: Schedules](#sE83106C3D3E05563A030D57E6B046D12)] [added: Schedules](#sF2D2F4A899425DFC8FBDE793DB429A4B)] | [removed: [21](#sE83106C3D3E05563A030D57E6B046D12)] [added: [21](#sF2D2F4A899425DFC8FBDE793DB429A4B)] |

| Item 16. | [Form 10-K [removed: Summary](#s7ECE379A7D9555EC81BD0EFEF90C153D)] [added: Summary](#sF552FAA98A375F91B1E1EE6469D70F4F)] | [removed: [25](#s7ECE379A7D9555EC81BD0EFEF90C153D)] [added: [27](#sF552FAA98A375F91B1E1EE6469D70F4F)] |

10-K 1 shw-12312018x10k.htm 10-K

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| [PART I](#sF89E411E91A05D3ABE755FBC4CFC590E) | | |

| [PART II](#s11BD1096FC5E51FF866CE2D0F0D058FD) | | |

| [PART IV](#s4AFBD85184A359E08FB756F0EA9571E9) | | |

| | [Signatures](#s547255BD626E5DD695C7B4F83C8562EB) | [28](#s547255BD626E5DD695C7B4F83C8562EB) |

10-K 1 shw-12312017x10k.htm 10-K

| [PART I](#s11466FFCBF1558BC8ABA3C3F47D7C97F) | | |

| [PART II](#sBB7086D1561D5CACA397B23D13A85130) | | |

| [PART IV](#s0194A9AD8080523398D5AD3CFA4E5C71) | | |

| | [Signatures](#s24CDE84907A55C888A9ACA1CF41A7826) | [26](#s24CDE84907A55C888A9ACA1CF41A7826) |

| Canada | | | 3 | 3 | | [added: 1] | | [added: 1] |

| United States | | [removed: 4] [added: 5] | 27 | [removed: 31] [added: 32] | | [removed: 6] [added: 8] | 3 | [removed: 9] [added: 11] |

| Total | | [removed: 9] [added: 10] | [removed: 49] [added: 50] | [removed: 58] [added: 60] | | [removed: 13] [added: 17] | [removed: 18] [added: 20] | [removed: 31] [added: 37] |

| Asia | | 2 | [removed: 4] [added: 5] | [removed: 6] [added: 7] | | 2 | 4 | 6 |

| Europe | | 4 | [removed: 21] [added: 19] | [removed: 25] [added: 23] | | 5 | 13 | 18 |

| United States | | 1 | [removed: 10] [added: 12] | [removed: 11] [added: 13] | | 1 | [removed: 10] [added: 12] | [removed: 11] [added: 13] |

| Total | | 7 | [removed: 42] [added: 43] | [removed: 49] [added: 50] | | 9 | [removed: 35] [added: 37] | [removed: 44] [added: 46] |

The operations of The Americas Group included one manufacturing and distribution facility in Uruguay and [removed: 4,620] [added: 4,696] company-operated specialty paint stores, of which [removed: 218] [added: 217] were owned, in the United States, Canada, Puerto Rico, Virgin Islands, Grenada, Trinidad and Tobago, St. Maarten, Jamaica, Curacao, Aruba, St. Lucia, Uruguay, Brazil, Chile, Peru, Mexico, Ecuador and Barbados at December 31, [removed: 2017.][added: 2018.]

At the end of [removed: 2017:][added: 2018:]

| • | the Mid Western Division operated [removed: 1,088] [added: 1,105] paint stores primarily located in the midwestern and upper west coast states; |

| • | the Eastern Division operated [removed: 856] [added: 868] paint stores along the upper east coast and New England states; |

| • | the Canada Division operated [removed: 227] [added: 241] paint stores throughout Canada; |

| • | the Southeastern Division operated [removed: 1,095] [added: 1,117] paint stores principally covering the lower east and gulf coast states, Puerto Rico, Virgin Islands, Grenada, Trinidad and Tobago, St. Maarten, Jamaica, Curacao, Aruba, St. Lucia and Barbados; |

| • | the South Western Division operated [removed: 1,001] [added: 1,023] paint stores in the central plains and the lower west coast states; and |

| • | the Latin America Division operated [removed: 353] [added: 342] paint stores in Uruguay, Brazil, Chile, Peru, Mexico and Ecuador. |

During [removed: 2017,] [added: 2018,] The Americas Group opened [removed: 101] [added: 76] net new stores, consisting of [removed: 114] [added: 91] new stores opened [removed: (76] [added: (74] in the United States, [removed: 15] [added: 16] in Canada, [added: and] 1 in [removed: Curacao, 14 in] South [removed: America and 8 in Mexico)] [added: America)] and [removed: 13] [added: 15] stores closed [removed: (4] [added: (1] in the United States, [removed: 1] [added: 2] in Canada, [removed: 6] [added: 11] in South America and [removed: 2] [added: 1] in Mexico).

The Performance Coatings Group operated [removed: 229] [added: 223] branches in the United States, of which 8 were owned, at December 31, [removed: 2017.][added: 2018.]

The Performance Coatings Group also operated [removed: 61] [added: 59] branches internationally, of which 6 were owned, at December 31,

[removed: 2017,] [added: 2018,] consisting of branches in Canada [removed: (26),] [added: (21),] Europe (16), Chile (11), Mexico (4), Peru [removed: (1)] [added: (4)] and Vietnam (3).

During [removed: 2017,] [added: 2018,] this segment opened [removed: 4] [added: 3] new branches and closed [removed: 2] [added: 11] branches for a net [removed: increase] [added: decrease] of [removed: 2] [added: (8)] branches.

For additional information regarding real property leases, see Note [removed: 17] [added: 18] of the Notes to Consolidated Financial Statements on page 74 of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

| Australia and New Zealand | | | 4 | 4 | | 1 | 5 | 6 |

| Australia | | | 3 | 3 | | | 3 | 3 |

The following is the name, age and present position of each of our executive officers [removed: at February 14, 2018,] [added: and all persons chosen to become executive officers,] as well as all prior positions held by each during the last five [removed: years and the date when each was first elected or appointed as an executive officer.][added: years.]

| Name | Age | Present Position | [removed: Date When First Elected or Appointed |]

| John G. Morikis | [removed: 54] [added: 55] | Chairman, President and Chief Executive Officer, Director | [removed: 1999 |]

| Allen J. Mistysyn | [removed: 49] [added: 50] | Senior Vice President - Finance and Chief Financial Officer | [removed: 2010 |]

| Jane M. Cronin | [removed: 50] [added: 51] | Senior Vice President - Corporate Controller | [removed: 2016 |]

| Mary L. Garceau | [removed: 45] [added: 46] | Senior Vice President, General Counsel and Secretary | [removed: 2017 |]

| Thomas P. Gilligan | [removed: 57] [added: 58] | Senior Vice President - Human Resources | [removed: 2016 |]

| Robert J. Wells | [removed: 60] [added: 61] | Senior Vice President - Corporate Communications and Public Affairs | [removed: 2006 |]

| Joel D. Baxter | [removed: 57] [added: 58] | President & General Manager, Global Supply Chain Division, Consumer Brands Group | [removed: 2016 |]

| Aaron M. Erter | [removed: 44] [added: 45] | President, Consumer Brands Group | [removed: 2017 |]

| Peter J. Ippolito | [removed: 53] [added: 54] | President, The Americas Group | [removed: 2018 |]

| David B. Sewell | [removed: 49] [added: 50] | President, Performance Coatings Group | [removed: 2014 |]

Ms. Cronin served as Vice President - Corporate Audit and Loss Prevention from September 2013 to October [removed: 2016 and Vice President - Controller, Diversified Brands Division, Consumer Group from July 2005 to September 2013.][added: 2016.]

Mr. [removed: Hennessy] [added: Lynch] has been employed with the Company since [removed: September 1984.][added: October 2000.]

| | | |

| --- | --- | --- |

| | | |

| Robert F. Lynch | 58 | President & General Manager, Retail - North America, Consumer Brands Group |

Effective March 1, 2019, Mr. Morikis will serve as Chairman and Chief Executive Officer.

Mr. Erter was named President, Performance Coatings Group effective March 1, 2019.

Mr. Sewell was named President and Chief Operating Officer of the Company effective March 1, 2019.

Mr. Lynch has served as President & General Manager, Retail - North America, Consumer Brands Group since August 2017.

Mr. Lynch served as Senior Vice President, Sales, Automotive Finishes Division, Global Finishes Group from August 2012 to July 2017.

Mr. Lynch was named President, Consumer Brands Group effective March 1, 2019 and will become an executive officer at that time.

| | | | |

| --- | --- | --- | --- |

| Sean P. Hennessy | 60 | Senior Vice President - Corporate Planning, Development and Administration | 2001 |

Mr. Hennessy has served as Senior Vice President - Corporate Planning, Development and Administration since January 2017.

Mr. Hennessy served as Senior Vice President - Finance and Chief Financial Officer from August 2001 to January 2017.

The number of shareholders of record at January 31, [removed: 2018] [added: 2019] was [removed: 6,470.][added: 6,219.]

The performance graph set forth on page 16 of our [removed: 2017] [added: 2018] Annual Report is incorporated herein by reference.

The following table sets forth a summary of the Company’s purchases of common stock during the fourth quarter of [removed: 2017.][added: 2018.]

| Period | | Total Number of Shares Purchased | | | Average Price Paid per Share | | | [added: |] Total Number of Shares Purchased as Part of a Publicly Announced Plan | | [added: |] Maximum Number of Shares that May Yet Be Purchased Under the Plan | |

| October 1 – October 31 | | | | | | | | | | | | [added: | |]

| Share repurchase program (1) | | [added: 600,000] | | | [added: $] | [added: 408.30] | | | [added: 600,000] | [removed: 11,650,000] | | [added: 10,125,000 | |]

| Employee transactions (2) | | [removed: 752] [added: 38] | | | [removed: $378.20] [added: $] | [added: 389.54] | | | | [added: | |] N/A | |

| November 1 – November 30 | | | | | | | | | | | | [added: | |]

| December 1 – December 31 | | | | | | | | | | | | [added: | |]

| Total | | | | | | | | | | | | [added: | |]

| (1) | All shares are purchased through the Company’s publicly announced share repurchase program. There is no expiration date specified for the program. The Company had remaining authorization at December 31, [removed: 2017] [added: 2018] to purchase [removed: 11,650,000] [added: 10,125,000] shares. |

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| | | | | | | | | | | | | | |

| Employee transactions (2) | | 181 | | | $ | 417.12 | | | | | | N/A | |

| | | | | | | | | | | | | | |

| | | | | | | | | | | | | | |

| Employee transactions (2) | | 130 | | | $ | 389.51 | | | | | | N/A | |

| Share repurchase program (1) | | 600,000 | | | $ | 408.30 | | | 600,000 | | | 10,125,000 | |

| Employee transactions (2) | | 349 | | | $ | 403.83 | | | | | | N/A | |

| | | | | | | | | | | | | | |

Information regarding market prices and dividend information with respect to our common stock is set forth on page 79 of our 2017 Annual Report, which is incorporated herein by reference.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Employee transactions (2) | | 1,043 | | | 389.63 | | | | | N/A | |

| Employee transactions (2) | | 10,859 | | | 404.54 | | | | | N/A | |

| Employee transactions (2) | | 12,654 | | | $401.75 | | | | | N/A | |

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | |

| Net sales | | $ | [removed: 14,984] [added: 17,534] | | | $ | [removed: 11,856] [added: 14,984] | | | $ | [removed: 11,339] [added: 11,856] | | | $ | [removed: 11,130] [added: 11,339] | | | $ | [removed: 10,186] [added: 11,130] | | |

| Net income [added: from continuing operations] | | [removed: 1,814] [added: 1,109] | | | | [removed: 1,133] [added: 1,769] | | | | [removed: 1,054] [added: 1,133] | | | | [removed: 866] [added: 1,054] | | | | [removed: 753] [added: 866] | | | |

| Total assets | | $ | [removed: 19,958] [added: 19,134] | | | $ | [removed: 6,753] [added: 19,900] | | | $ | [removed: 5,779] [added: 6,753] | | | $ | [removed: 5,699] [added: 5,779] | | | $ | [removed: 6,383] [added: 5,699] | | |

| Long-term debt | | [removed: 9,886] [added: 8,708] | | | | [removed: 1,211] [added: 9,886] | | | | [removed: 1,907] [added: 1,211] | | | | [removed: 1,116] [added: 1,907] | | | | [removed: 1,122] [added: 1,116] | | | |

| Ratio of earnings to fixed charges (1) | | [removed: 4.7x] [added: 3.6x] | | | | [removed: 6.5x] [added: 4.5x] | | | | [removed: 9.1x] [added: 6.5x] | | | | [removed: 7.7x] [added: 9.1x] | | | | [removed: 7.4x] [added: 7.7x] | | | |

| Net income from continuing operations — diluted (2) | | [removed: 19.11] [added: 11.67] | | | | [removed: 11.99] [added: 18.64] | | | | [removed: 11.15] [added: 11.99] | | | | [removed: 8.77] [added: 11.15] | | | | [removed: 7.25] [added: 8.77] | | | |

| Cash dividends | | [removed: 3.40] [added: 3.44] | | | | [removed: 3.36] [added: 3.40] | | | | [removed: 2.68] [added: 3.36] | | | | [removed: 2.20] [added: 2.68] | | | | [removed: 2.00] [added: 2.20] | | | |

| Income before income taxes | | $ | [removed: 1,528] [added: 1,360] | | | $ | [removed: 1,595] [added: 1,469] | | | $ | [removed: 1,549] [added: 1,595] | | | $ | [removed: 1,258] [added: 1,549] | | | $ | [removed: 1,086] [added: 1,258] | | |

| Interest expense, net | | [removed: 263] [added: 367] | | | | [removed: 154] [added: 263] | | | | [removed: 62] [added: 154] | | | | [removed: 64] [added: 62] | | | | [removed: 63] [added: 64] | | | |

| Interest component of rent expense | | [removed: 153] [added: 165] | | | | [removed: 138] [added: 153] | | | | [removed: 130] [added: 138] | | | | [removed: 125] [added: 130] | | | | [removed: 108] [added: 125] | | | |

| Total fixed charges | | [removed: 416] [added: 532] | | | | [removed: 292] [added: 416] | | | | [removed: 192] [added: 292] | | | | [removed: 189] [added: 192] | | | | [removed: 171] [added: 189] | | | |

| Earnings | | $ | [removed: 1,944] [added: 1,892] | | | $ | [removed: 1,887] [added: 1,885] | | | $ | [removed: 1,741] [added: 1,887] | | | $ | [removed: 1,447] [added: 1,741] | | | $ | [removed: 1,257] [added: 1,447] | | |

| | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | | | 2014 | | | |

| Net income from continuing operations — basic (2) | | $ | 19.52 | | | $ | 12.33 | | | $ | 11.43 | | | $ | 9.00 | | | $ | 7.46 | | |

Information required by this item is set forth on pages 38 through 77 of our [removed: 2017] [added: 2018] 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 [removed: 16] [added: 17] of the Notes to Consolidated Financial Statements on page 74 of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

The “Report of Management on Internal Control over Financial Reporting” is set forth on page 36 of our [removed: 2017] [added: 2018] 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 37 of our [removed: 2017] [added: 2018] Annual Report, which is incorporated herein by reference.

The information regarding our directors [added: and director nominees] is set forth under the captions “Proposal 1 – Election of Directors” and “Experiences, Qualifications, Attributes and Skills of Director 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 [removed: 2017.][added: 2018.]

We intend to disclose on our website [added: at www.sherwin.com] 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.

The information required by this item is set forth under the captions “Compensation Committee Report,” “Compensation Risk Assessment,” [removed: “2017] [added: “2018] Director Compensation Table” and “Director Compensation Program” in our Proxy Statement, and under the [removed: Executive Compensation] [added: "Executive Compensation"] section of our Proxy Statement commencing with the information under the caption “Compensation Discussion and Analysis (CD&A)” and continuing through the information under the caption [removed: “2017] [added: “2018] CEO Pay Ratio,” which is incorporated herein by reference.

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

The following consolidated financial statements of the Company included in our [removed: 2017] [added: 2018] Annual Report are incorporated by reference in Item 8.

| (i) | Report of Management on the Consolidated Financial Statements (page 38 of our [removed: 2017] [added: 2018] Annual Report); |

| (ii) | Report of the Independent Registered Public Accounting Firm on the Consolidated Financial Statements (page 39 of our [removed: 2017] [added: 2018] Annual Report); |

| (iii) | Statements of Consolidated Income and Comprehensive Income for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] (page 40 and 41 of our [removed: 2017] [added: 2018] Annual Report); |

| (iv) | Consolidated Balance Sheets at December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] (page 42 of our [removed: 2017] [added: 2018] Annual Report); |

| (v) | Statements of Consolidated Cash Flows for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] (page 43 of our [removed: 2017] [added: 2018] Annual Report); |

| (vi) | Statements of Consolidated Shareholders’ Equity for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] (page 44 of our [removed: 2017] [added: 2018] Annual Report); and |

| (vii) | Notes to Consolidated Financial Statements for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] (pages [removed: 46] [added: 45] through 77 of our [removed: 2017] [added: 2018] Annual Report). |

Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] is set forth below.

| (thousands of dollars) | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Beginning balance | $ | [removed: 40,450] [added: 52,997] | | | $ | [removed: 49,420] [added: 40,450] | | | $ | [removed: 53,770] [added: 49,420] | |

| Bad debt expense | [removed: 42,716] [added: 38,240] | | | | [removed: 29,869] [added: 42,716] | | | | [removed: 30,393] [added: 29,869] | | |

| Uncollectible accounts written off, net of recoveries | [removed: (30,169] [added: (45,354] | | ) | | [removed: (38,839] [added: (30,169] | | ) | | [removed: (34,743] [added: (38,839] | | ) |

| Ending balance | $ | [removed: 52,997] [added: 45,883] | | | $ | [removed: 40,450] [added: 52,997] | | | $ | [removed: 49,420] [added: 40,450] | |

| | (b) | [Regulations of the Company, as amended and restated [removed: April 20, 2011,] [added: October 17, 2018,] filed as Exhibit [removed: 3] [added: 3.1] to the Company's Current Report on Form 8-K dated [removed: April 20, 2011,] [added: October 17, 2018,] and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000095012311038503/l42478exv3.htm) |

| | (r) | [Credit Agreement, dated as of July [removed: 16, 2015,] [added: 19, 2018,] by and among the Company, Sherwin-Williams Canada Inc., Sherwin-Williams Luxembourg S.à r.l. and Sherwin-Williams UK Holding Limited, as borrowers, the lenders party thereto, [removed: Bank of America,] [added: the issuing lenders party thereto and Citibank,] N.A., as [removed: domestic] administrative agent, [removed: Bank of America, National Association, as Canadian administrative agent, JPMorgan Chase Bank, N.A., Citibank, N.A. and U.S. Bank National Association, as co-documentation agents, and Wells Fargo Bank, National Association, as syndication agent,] filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated July [removed: 15, 2015,] [added: 19, 2018,] and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312515256549/d58960dex41.htm) |

| | [removed: (s)] [added: (u)] | [Amendment No. 1 to [added: the] Credit Agreement, dated as of [removed: April 13,] [added: May 12,] 2016, by and among the Company, [removed: Sherwin-Williams Canada] [added: Citicorp USA,] Inc., [removed: Sherwin-Williams Luxembourg S.à r.l. and Sherwin-Williams UK Holding Limited,] as [removed: borrowers,] [added: administrative agent and issuing bank, and] the lenders party thereto, [removed: Bank of America, N.A., as domestic administrative agent, and Bank of America, National Association, as Canadian administrative agent,] filed as Exhibit [removed: 4.3] [added: 4.1] to the Company’s Current Report on Form 8-K dated [removed: April 13,] [added: May 12,] 2016, and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516542735/d179142dex43.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516588294/d165099dex41.htm)] |

| | [removed: (t)] [added: (s)] | [Credit Agreement, dated as of May 9, 2016, 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 May 9, 2016, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516583086/d193656dex41.htm) |

| | [removed: (u)] [added: (t)] | [Agreement for Letter of Credit, dated as of May 9, 2016, 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 May 9, 2016, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516583086/d193656dex42.htm) |

| | (v) | [Amendment No. [removed: 1] [added: 2] to the Credit Agreement, dated as of [removed: May 12,] [added: June 20,] 2016, 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 [removed: May 12,] [added: June 20,] 2016, and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516588294/d165099dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516625987/d176864dex41.htm)] |

| | (w) | [Amendment No. [removed: 2] [added: 3] to the Credit Agreement, dated as of [removed: June 20,] [added: August 1,] 2016, 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 [removed: June 20,] [added: August 1,] 2016, and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516625987/d176864dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516665989/d233122dex41.htm)] |

| | (x) | [Amendment No. [removed: 3] [added: 4] to the Credit Agreement, dated as of [removed: August 1, 2016,] [added: January 31, 2017,] 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 [removed: August 1, 2016,] [added: January 31, 2017,] and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516665989/d233122dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517025101/d278235dex41.htm)] |

| | (y) | [Amendment No. [removed: 4] [added: 5] to the Credit Agreement, dated as of [removed: January 31,] [added: February 13,] 2017, 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 [removed: January 31,] [added: February 13,] 2017, and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517025101/d278235dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517039530/d266583dex41.htm)] |

| | (z) | [Amendment No. [removed: 5] [added: 6] to the Credit Agreement, dated as of February [removed: 13,] [added: 27,] 2017, 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 February [removed: 13,] [added: 27,] 2017, and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517039530/d266583dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517057833/d348558dex41.htm)] |

| | (aa) | [Amendment No. [removed: 6] [added: 7] to the Credit Agreement, dated as of [removed: February 27,] [added: May 8,] 2017, 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 [removed: February 27,] [added: May 8,] 2017, and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517057833/d348558dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517162069/d360190dex41.htm)] |

| | (bb) | [Amendment No. [removed: 7] [added: 8] to the Credit Agreement, dated as of May [removed: 8,] [added: 11,] 2017, 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 May [removed: 8,] [added: 11,] 2017, and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517162069/d360190dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517166751/d357103dex41.htm)] |

| | (cc) | [Amendment No. [removed: 8] [added: 9] to the Credit Agreement, dated as of [removed: May 11, 2017,] [added: February 27, 2018,] 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 [removed: May 11, 2017,] [added: February 27, 2018,] and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517166751/d357103dex41.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312518059964/d514833dex41.htm)] |

| | (dd) | [removed: [Term Loan] [added: [Amendment No. 10 to the] Credit Agreement, dated as of [removed: April 13, 2016,] [added: July 26, 2018,] by and among the Company, [removed: the lenders party thereto, Citibank, N.A.,] [added: Citicorp USA, Inc.,] as administrative [removed: agent,] [added: agent] and [removed: Wells Fargo Bank, National Association, Morgan Stanley Senior Funding, Inc.] [added: issuing bank,] and [removed: PNC Bank, National Association, as co-syndication agents,] [added: the lenders party thereto,] filed as Exhibit [removed: 4.2] [added: 4.1] to the Company’s Current Report on Form 8-K dated [removed: April 13, 2016,] [added: July 26, 2018,] and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312516542735/d179142dex42.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312518227030/d569324dex41.htm)] |

| | [removed: (ee)] [added: (ff)] | [Assignable Loan Agreement, dated as of August 17, 2017, relating to a Floating Rate Loan by and among Sherwin-Williams Coatings S.à r.l., as Borrower, the Company, as Guarantor, and Citibank Europe plc, UK Branch, as Lender, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated August 17, 2017, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517265673/d360472dex41.htm) |

| | [removed: (ff)] [added: (gg)] | [Assignable Loan Agreement, dated as of August 17, 2017, relating to a Fixed Rate Loan by and among Sherwin-Williams Coatings S.à r.l., as Borrower, the Company, as Guarantor, and Citibank Europe plc, UK Branch, as Lender, filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated August 17, 2017, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517265673/d360472dex42.htm) |

| | [removed: (gg)] [added: (hh)] | [Credit Agreement, dated as of September 11, 2017, by and among the Company, Goldman Sachs Bank USA, as administrative agent and Goldman Sachs Mortgage Company, as issuing bank, and the lenders party thereto, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 11, 2017, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517281687/d427415dex41.htm) |

| | [removed: (hh)] [added: (ii)] | [Continuing Agreement for Standby Letters of Credit, dated as of September 11, 2017, by and among the Company and Goldman Sachs Bank USA, filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K dated September 11, 2017, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517281687/d427415dex42.htm) |

| | [removed: (ii)] [added: (jj)] | [First Amendment to Credit Agreement, dated as of October 30, 2017, by and among the Company, Goldman Sachs Bank USA, as administrative agent, Goldman Sachs Mortgage Company, as issuing bank, and the lenders party thereto, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated October 30, 2017, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312517324229/d485992dex41.htm) |

| | (b) | [Schedule of Executive Officers who are Parties to the Amended and Restated Severance Agreements in the forms referred to in Exhibit 10(a) above [removed: (filed herewith).](https://www.sec.gov/Archives/edgar/data/89800/000008980018000004/shw-12312017xex10b.htm)] [added: filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980018000008/shw-2018331x10qxexh101.htm)] |

| | [removed: (c)] [added: (d)] | [Retention Agreement between the Company and Catherine M. Kilbane, dated June 12, 2017, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980017000019/shw-2017630x10qxex102.htm) |

| | [removed: (d)] [added: (g)] | [The Sherwin-Williams Company 2005 Deferred Compensation Savings and Pension Equalization Plan (Amended and Restated Effective as of January 1, 2016) filed as Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980016000026/shw-12312015xex10e.htm) |

| | [removed: (e)] [added: (h)] | [The Sherwin-Williams Company 2005 Key Management Deferred Compensation Plan (Amended and Restated Effective as of January 1, 2016) filed as Exhibit 10(f) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980016000026/shw-12312015xex10f.htm) |

| | [removed: (f)] [added: (bb)] | [The Sherwin-Williams Company [removed: 2005 Director Deferred Fee] [added: 2006 Stock] Plan [added: for Nonemployee Directors] (Amended and Restated [removed: Effective] as of April [removed: 18, 2017)] [added: 20, 2016)] filed as Exhibit 10.1 to the [removed: Company’s] [added: Company's] Quarterly Report on Form 10-Q for the quarterly period ended March 31, [removed: 2017,] [added: 2016,] and incorporated herein by [removed: reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980017000009/shw-2017331x10qxex101.htm)] [added: reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980016000030/shw2016331_10qexh10-1.htm)] |

| | [removed: (g)] [added: (m)] | 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 (SEC File Number 001-04851), and incorporated herein by reference. |

| | [removed: (h)] [added: (n)] | [Amendment Number One to The Sherwin-Williams Company Executive Disability Income Plan filed as Exhibit 10(l) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000095012310016198/l38063exv10wl.htm) |

Changes in deferred tax asset valuation allowances were as follows:

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| (thousands of dollars) | 2018 | | | | 2017 | | | | 2016 | | |

| Beginning balance | $ | 44,101 | | | $ | 17,292 | | | $ | 12,595 | |

| Additions (deductions) (1) | 10,660 | | | | (489 | | ) | | 4,697 | | |

| Acquired balances | 18,782 | | | | 27,298 | | | | — | | |

| Ending balance | $ | 73,543 | | | $ | 44,101 | | | $ | 17,292 | |

(1) Additions (deductions) did not have a material impact on the Income Statement in 2018, 2017 or 2016.

| | (ee) | [Amendment No. 1 to the Agreement for Letter of Credit, dated as of July 26, 2018, by and between the Company and Citibank, N.A., filed as Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980018000017/shw-2018930x10qxexh44.htm) |

| | (kk) | [Second Amendment to Credit Agreement, dated as of September 6, 2018, by and among the Company, Goldman Sachs Bank USA, as administrative agent, Goldman Sachs Mortgage Company, as issuing bank, and the lenders party thereto, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 6, 2018, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000119312518267845/d620676dex41.htm) |

| | (ll) | [First Amendment to Continuing Agreement for Standby Letters of Credit, dated as of September 6, 2018, by and among the Company and Goldman Sachs Bank USA, filed as Exhibit 4.6 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/89800/000008980018000017/shw-2018930x10qxexh46.htm) |

| | (c) | [Aircraft Time Sharing Agreement between the Company and John G. Morikis, dated February 14, 2019 (filed herewith).](https://www.sec.gov/Archives/edgar/data/89800/000008980019000004/shw-12312018xex10c.htm) |

| | (e) | [Amended and Restated Employment Agreement between the Company and Aaron M. Erter, dated August 1, 2017 (filed herewith).](https://www.sec.gov/Archives/edgar/data/89800/000008980019000004/shw-12312018xex10e.htm) |

| | (f) | [Amendment to the Amended and Restated Employment Agreement between the Company and Aaron M. Erter, dated February 13, 2019 (filed herewith).](https://www.sec.gov/Archives/edgar/data/89800/000008980019000004/shw-12312018xex10f.htm) |

| | (i) | [Adoption Agreement for The Valspar Corporation Nonqualified Deferred Compensation Plan filed as Exhibit 10.1 to The Valspar Corporation’s Current Report on Form 8-K dated May 15, 2014, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/102741/000089710114000680/valspar141837_ex10-1.htm) |

| | (k) | [Amendment to Valspar Corporation Nonqualified Deferred Compensation Plan and Adoption Agreement filed as Exhibit 10.1 to The Valspar Corporation’s Current Report on Form 8-K dated September 27, 2016, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/102741/000119312516725661/d278289dex101.htm) |

| | (l) | [The Sherwin-Williams Company 2005 Director Deferred Fee Plan (Amended and Restated Effective as of January 1, 2019) (filed herewith).](https://www.sec.gov/Archives/edgar/data/89800/000008980019000004/shw-12312018xex10l.htm) |

| | (q) | [Amended and Restated The Valspar Corporation Employee Health Plan filed as Exhibit 10.24 to The Valspar Corporation’s Annual Report on Form 10-K for the fiscal year ended October 28, 2016, and incorporated herein by reference.](http://www.sec.gov/Archives/edgar/data/102741/000010274116000024/a10282016_ex10-24.htm) |

| 18. | | [Preferability Letter of Ernst & Young LLP, Independent Registered Public Accounting Firm, regarding change in accounting principles (filed herewith).](https://www.sec.gov/Archives/edgar/data/89800/000008980019000004/shw-12312018xex18.htm) |

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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 [removed: 23, 2018.][added: 22, 2019.]

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 [removed: 23, 2018.][added: 22, 2019.]

| By: | /S/ | MARY L. GARCEAU | | February [removed: 23, 2018] [added: 22, 2019] |