Chris Connor – Chairman and Chief Executive Officer Sean Hennessey – Senior VP of Finance and Chief Financial Officer John Ault – Vice President Corporate Controller Bob Wells – Vice President Corporate Communications

Saul Ludwig – Keybanc Capital Markets [Mark] – Cleveland Research Company John Roberts – Buckingham Research Group Chuck Cerankosky – Northcoast Research Jeffrey Zekauskas – JP Morgan Chase Amy Zhang – Goldman Sachs Dmitry Silverstein – Longbow Research Greg Melich – Morgan Stanley PJ Juvekar – Citigroup Sergey Vasnetsov – Barclays Capital Dennis McGill – Zelman & Associates Jay McCanless – FTN Equities Steve O'Neil – Hilliard Lyons Don Carson – UBS

Good morning and thank you for joining the Sherwin-Williams Company's review of the second quarter 2009 financial results and expectations for the third quarter and full year. With us on today's call are Chris Conner, Chairman and CEO, Sean Hennessey, Senior Vice President of Finance and CFO. We also have John Ault, Vice President Corporate Controller and Bob Wells, Senior Vice President Corporate Communications. This conference call is being webcast simultaneously in listen-only mode by VCall via the Internet at www.sherwin.com. An archive replay of this webcast will be available at www.sherwin.com beginning approximately two hours after this conference call concludes, and will be available until Monday, August 10, 2009 at 5 pm Eastern Standard Time. This conference call will include certain forward-looking statements as defined under U.S. federal securities laws with respect to sales, earnings and other matters. Any forward-looking statement speaks only as the date on which such statement is made. And the company takes no obligation to update or revise any forward-looking statement whether as a result of new information, future events or otherwise. A full declaration regarding forward-looking statements is provided in the company's earnings release transmitted earlier this morning. After the review of second quarter results we will open the session to questions. I will now turn the call over to Bob Wells.

In order to allow more time for questions we provided balance sheet items and other selected items on our website at www.sherwin.com under Investor Relations second quarter press release. Summarizing overall company performance for second quarter 2009 verses second quarter 2008, consolidated net sales decreased $281.7 million or 12.6% to $1.95 billion, due primarily to weak paint sales volume by all divisions and unfavorable currency translation rates. Unfavorable currency translation reduced consolidated net sales 2.2% in the quarter, and acquisitions completed since June 30, 2008 increased net sales in the quarter by less than 1%. Consolidated gross profit dollars decreased $77.6 billion for the quarter to $895.3 million. Gross margin increased to 46.0% of sales from 43.6% in the second quarter last year. Selling, general and administrative expenses decreased $24 million in the quarter to $653 million, but increased as a percent of sales to 33.5% from 30.4% last year. Interest expense, net of interest and investment income, decreased $7.6 million compared to second quarter last year. Consolidated profit before taxes in the quarter decreased $24 million or 9.4% compared to second quarter 2008, to $232.1 million. Our tax rate in the second quarter was 31.9% compared to 33% in the second quarter of 2008. For the full year 2009 we expect our effective tax rate will be slightly lower than last year's rate of 33.3%. Consolidated net income decreased by $13.7 million to $158 million from $171.7 million in the second quarter of 2008. Net income as a percent of sales was 8.1% up from 7.7% in the second quarter last year. Diluted net income per common share for the quarter decreased $0.10 or 6.9% to $1.35 per share. Looking at our results by operating segment, sales for our paint stores group in the second quarter 2009 decreased 13.7% to $1.17 billion. Comparable store sales or sales by stores open more than 12 calendar months declined 13.5%. The decrease in paint stores group sales was the result of weak demand for architectural and industrial paint and non-paint items across most end user segments. Regionally in the second quarter of '09, our Southwest Division led the sales performance followed by Easter Division, Midwestern Division and Southeastern Division. Sales in all four divisions declined in the quarter compared to second quarter 2008. Segment profit for the group decreased $17 million or 8.1% to $193.5 million in the second quarter 2009 due primarily to lower volume sales that were partially offset by higher year-over-year selling prices, reduced SG&A expenses and a second quarter 2008 impairment charge totaling $20.4 million. Segment margin increased to 16.5% in the quarter from 15.5% in the second quarter last year. Paint stores group opened six new stores and closed five stores in the second quarter. In the consumer group for the second quarter 2009 sales decreased 4.5% to $366.5 million due primarily to lower volume sales to most of the group's retail customers. Segment profits for the consumer group increased $7.3 million or 12.3% in the quarter to $66.1 million. Segment profit as a percent of external sales increased to 18% in the quarter, from 15.3% in the same period last year, due primarily to favorable sales mix, reduced operating costs from facility consolidation, lower freight and other distribution costs, and a second quarter 2008 impairment charge of $2.7 million. Turning now to our global finishes group for the second quarter '09, sales in U.S. dollars decreased $79.2 million, or 16.2% to $409.7 million, due primarily to lower paint sales volume and unfavorable currency translation rates that were partially offset by acquisitions and higher selling prices. Sales in local currencies decreased 7.7% in the quarter and acquisitions added to group's net sales by 1.6%. Segment profit for the global finishes group in U.S. dollars was $31.2 million in the second quarter of '09, compared to $48 million for the same period last year. The decrease in segment profit was due primarily to lower sales, poor fixed cost absorption related to lower manufacturing volumes, and unfavorable currency translation rates. Segment profit as a percent of net external sales was 7.6% in the second quarter of 2009, compared to 9.8% for the second quarter last year. Global finishes group opened one new branch and closed nine n the second quarter. All facility closures were in North America. I'd now like to comment briefly on some of our balance sheet items. Our total debt on June 30, 2009 was $800.7 million including short-term borrowings of $499.2 million. Total debt on June 30, 2008 was $1.24 billion. Our cash balance at the end of the quarter was $49.3 million. Total borrowings-to-capitalization were 31.6% at the end of the quarter, versus 42.7% at the end of second quarter 2008. Long-term debt-to-capitalization was 14.8% at the end of the second quarter this year, compared to 15.5% last year. In the second quarter 2009, the company purchased 500,000 shares of its common stock in the open market, bringing our total year-to-date purchases to 1 million shares. At June 30, 2009, the company had remaining authorization to purchase 18.75 million shares. In second quarter 2009, we spent $18.5 million on capital expenditures. Depreciation expense was $37.3 million and amortization expense was $6 million. For the full year '09, we anticipate capital expenditures for the year will be approximately $80 million to $90 million, depreciation will be about $145 million to $150 million, and amortization will be about $24 million. I'll conclude this review with a brief update on the status of our lead pigment litigation. In Wisconsin, the plaintiffs in the Thomas case have appealed the 2007 jury verdict. Briefing has been completed and we are waiting for a hearing date, although the case has been stayed indefinitely, due to the bankruptcy filing of co-defendant Millennium Holdings. Another individual plaintiff case in Wisconsin, the Godoy case, was heard on plaintiff's appeal by the Wisconsin Supreme Court on the sole question of whether white lead carbonate pigment is defectively designed because it contains lead. On Tuesday, July 14, 2009, a unanimous Supreme Court rejected the plaintiff's claim. The court held that the complaint failed to state a claim for defective design because lead pigments necessarily contain lead. The case will now be remanded back to the trial court, where it will proceed on the defendant's alleged failure to adequately warn of the dangers of white lead carbonate pigment. In California, the State Supreme Court will decide whether it is permissible for cities and counties to retain contingent fee counsel to aid them in their suit against the former manufacturers of lead pigments. Briefing is completed; oral arguments should not take place until at least third quarter of this year, with the decision most likely coming in early 2010. And finally in Mississippi, the Gaines case, a single plaintiff lawsuit was tried to a jury in Jefferson County beginning on June 16, 2009. On June 25, the jury returned a verdict in favor of the plaintiff, awarding $7 million in damages. The company is in the process of filing post-trial motions seeking a judgment in its favor, or failing that, a new trial. If the trial judge denies both motions, the company will appeal to the Mississippi Supreme Court, as we believe a number of significant errors were committed during the trial. This process will likely take 15 to 24 months. Two other suits, brought by minors, are pending in Mississippi, although neither is in Jefferson County, which is notorious for large plaintiff's verdicts. That concludes my review of the results for second quarter 2009, so I'll turn the call over to Chris Connor who will make some general comments and highlight our expectations for the remainder of the year.

Our second quarter results were largely in line with our expectations; however, they were below last year's performance. In this sense we were disappointed. It's always difficult to find much satisfaction in declining numbers regardless of the economic environment. We are obviously not immune to the effects of this global recession, but we are pleased with the progress we're making in many important areas of our business in this environment. These improvements will provide significant earnings leverage when buy-ins begin to stabilize. For example, in our paint stores group, we continue to strengthen our control distribution platform by opening new stores and consolidating redundant store locations. Our paint store count in the U.S. and Canada now stands at 3,340 locations, compared to 3,302 one year ago. We expect our paint stores group will open approximately 40 to 50 new store locations during 2009 and slow the rate of redundant store consolidation to finish the year with about 25 additional stores in operations over our current store count today. We continue to see growing strength and positive mix change towards our premium product lines, and we are confident that we continue to register market share gains in many of our important professional painter market segments. Our consumer group continues the important work of right sizing our asset base in-line with the contracting market value, and we closed 14 facilities in the past six quarters. We believe we are in good position with these changes to capitalize on the eventual uptick in gallon demand. Additionally, we've been pleased with the sales efforts, positive mix shift, and shelf expansion from this group, with a number of our key retailing partners. And finally, our global finishes group continued to expand into new markets, bringing the group's total branch count to 533 locations at the end of last quarter. Our ongoing efforts to manage our fixed asset base in line with declining sales volume, increase our productivity, and protect the price increases we implemented during 2008, will help to move our consolidated gross margin back toward our more normalized levels as the year progresses. SG&A expense decreased $24 million in the second quarter, compared to the second quarter of 2008. A particularly noteworthy achievement, considering we've supported three new acquisitions, covered incremental store closing costs and added 40 net new stores since the second quarter of last year. Our progress in gross margin improvement, and in reducing SG&A expense, interest expense, and our effective tax rate resulted in a 40 basis point improvement in second quarter net income as a percent of sales. Our working capital ratio also improved to 13% of sales at June 30, from 14.1% at the end of the first half of last year. Through a combination of response to production planning that held inventories in line with sales volume, and prudent management of receivables and payables, we reduced our working capital funding requirements by $57.3 million in the first half of 2009, compared to the same period of 2008. Net operating cash in the first six months increased by $3.6 million to $266.4 million. Reduction in working capital requirements more than offset the $54 million decline in first half earnings. Free cash flow, operating cash minus CapEx and dividends, increased $33.6 million as we appropriately pared back our CapEx in the first half of this year. In the 12 month period from July 1, 2008 to June 30, 2009, we've generated $880 million in net operating cash. We've invested $68 million to complete three acquisitions, $87 million in capital additions and improvements. We've reduced our total debt by $431 million and purchased $105 million in treasury stocks as well as paying $165 million in cash dividends. We believe the significant challenges that we faced in the first half of 2009 will certainly continue into the second half. Based on industry estimates for full-year 2009, the past three years have erased a decade of buy-in growth in the U.S. architectural market. Although we do not believe industry volumes are sustainable at this low level over the long-term, any significant impetus for recovery has not yet materialized and we believe the recovery itself will be slow once it begins. Our outlook for the third quarter 2009 is for consolidated net sales to be down in the range of 10% to 13%, compared to last year's third quarter. With sales at this level, we expect diluted net income per common share to be in the range of $1.15 to $1.45 per share, compared to $1.52 per share for the third quarter of last year. For the full-year 2009, we have again revised our sales expectations and now believe net sales will decline in the range of 11% to 12.5%, compared to full-year 2008. With annual sales of that level, we are updating and narrowing our diluted net income per common share expectation to be in the range of $3.30 to $3.80 per share, compared to $4.00 per share last year. Finally last week, our board of directors declared a regular quarterly dividend of $0.355 cents per share, up from $0.35 last year, keeping us on track to achieve our 31st consecutive year of increased dividends Again, I'd like to thank you for joining us this morning and now we'd be happy to take your questions.

(Operator Instructions). Your first question comes from Saul Ludwig – Keybanc Capital Markets. Saul Ludwig – Keybanc Capital Markets: This question is related to the consumer division in your facilities, a couple parts, how much did you incur in expenses related to closing facilities in the quarter, and I assume they would be included in the consumer group? And then excluding whatever that number is, were your fixed costs in the consumer group down and, if so, by how much?

Saul, it's $6 million in the six months, $2.8 million in the three months and I don't think we've ever divulged what our conversion costs are. Saul Ludwig – Keybanc Capital Markets: Were they lower?

Yes. I don't think we're ready to start giving that kind of metric out. Saul Ludwig – Keybanc Capital Markets: Then a question on the administrative line, Sean, your interest cost was down sharply. I guess I was a little surprised that your administrative number wasn't off more sharply than it was. I wonder if you could provide a little color on that administrative number and what we might expect, as we look out to the balance of the year

Yes, when you sit there and take a look at the six months, Saul, we're about $17 million, $17.5 million lower; of that, interest expense is $13 million. And just the admin spending and reductions that we've taken here are almost $9 million. So when you take a look at what it has actually cost us, it's really the first six months of an environmental and the timing of environmental. We think for the full year, environmental will be fine, but just in that first quarter and second quarter, our environmental expenses were a little higher than what we expected and that's what dampened that difference between the first and second quarter. Going out, we think we're still going to control SG&A expenses. I think that our interest expense is – we think we're in pretty good shape. The interest rates that we're paying for short-term right now are around 60 to 65 basis points, so when you take a look at where we are with interest right now, we think we're going to have a nice year for interest expense savings. Saul Ludwig – Keybanc Capital Markets: So the administrative numbers should continue to trend lower?

Yes.

Your next question comes from Eric Bossard – Cleveland Research Company. [Mark] – Cleveland Research Company: Good morning, guys, it's actually [Mark] stepping in for Eric. First on the gross margin line, you talked about normalization in the second half. Any sense for if it can stay around the 46% that you posted this quarter, and how should we think about gross margin going forward and into 2010?

Yes, I think what Chris had said is we've done a lot of work over the last couple of years to just recover our gross margins and, when you take a look at the first six months, it's 45%. If you look at the last four to five years, if you look at where our gross margin was at the end of the second quarter, it's been within one or two-tenths of that at the year-end, for the full year, because a lot of the pricing activities have already occurred and a lot of the activities are when you take a look at the production of paint and so forth. When you take a look at the full year, I'll just say I think, in the full year, when you compare it to that 45%, I would expect that our gross margin would be in that 45% to 45.5% range for the full year. [Mark] – Cleveland Research Company: Secondly, on the SG&A, less progress this quarter versus the first quarter; should we assume that SG&A can run down 5% in the second half, similar to what you saw ex-items in the first quarter?

I think when you take a look at it, we don't give out every line of the P&L here, but when you take a look at it what we've said is we did a lot of actions throughout 2008 and as we continue to anniversary those, you're going to see a lower and lower reduction in the SG&A. In the first quarter, we were down 43, second quarter we were down 24 so I would tell you we're just going to continue to annualize that. I don't know how to answer the 5% number, because we've got a forecast of our SG&A and I don't want to give that number out, but I would tell you that I think as we anniversary more, you're going to see that reduce. [Mark] – Cleveland Research Company: And quickly on the comp within the quarter, breakout roughly of price and volumes relative to what that number looked like in the first quarter?

First quarter or second quarter, I would tell you that it was fairly relatively stable. I would tell you that you're going to – our gallonage was down in the high teens, just like it was in the first quarter, and our comp store was different by four-tenths, 13.5 versus 13.1. So the price mix really didn't change between the first and second quarter.

Your next question comes from John Roberts – Buckingham Research Group. John Roberts – Buckingham Research Group: I would have expected the consumer group sales to be up modestly, I guess, given PPG reported up DIY sales last week. Is there a market share shift issue here? I know it's not just you and them, there are lots of players here, but can you maybe explain why your consumer segment underperformed on sales relative to the DIY sales reported last week by PPG?

I can't comment specifically on PPG's customer mix. I think, when we looked at the architectural data from the federal government output, that our DIY sales for the consumer group were somewhat in line there. Beyond that, John, I don't have much to comment on. John Roberts – Buckingham Research Group: Do you think there's a substantial different mix of retailers I guess in regions in the business, that that would account possibly for it?

Well, we've commented about the customer mix, PPG DIY base is predominantly with one of the major big box retailers and those retailing partners tend to align with manufacturers. We've been a strong partner with Wal-Mart which has been doing well in this segment. I'm not quite sure how their order pattern versus sales out the door went through that quarter, but as we commented in the call, we think that our consumer group's actually doing fine.

Your next question comes from Chuck Cerankosky – Northcoast Research. Chuck Cerankosky – Northcoast Research: [Audio gap] – looking at the consumer group and you mentioned some impacts on the mix, can you talk about – [audio gap].

[Audio Gap] – materials that remain pretty stable over the past few quarters, but in some cases we're seeing some upward pressure on these, too. So we came over a camel's hump in the middle of 2008 and we're comparing against that hump now, so year-over-year they look somewhat favorable, but in an absolute sense there's upward pressure. Chuck Cerankosky – Northcoast Research: Turning to an ugly subject, the lead pigment litigation, in the Wisconsin win where you had the unanimous decision in the Wisconsin Supreme Court, they bring up this, which seems to me to be a new concept, that the product was not defectively designed just because it contains a toxic chemical. What kind of import does that have going forward to some of these cases against Sherwin and your co-defendants?

Chuck, in these cases, we have always argued successfully that lead pigment when intact on the wall doesn't pose a hazard to children, and the courts and, in fact, the scientific community has agreed, and we believe that the effort by the plaintiffs to have lead pigments declared a defective product was an attempt to circumvent that argument that intact lead paint, well maintained, is not a hazard, so today that argument remains intact. Chuck Cerankosky – Northcoast Research: And this ruling, the way the court ruled affirmed that argument?

Correct.

Your next question comes from Jeffrey Zekauskas – JP Morgan Chase. Jeffrey Zekauskas – JP Morgan Chase: A few short questions, can you talk about your sequential pricing? Was it flat or up or down versus the first quarter for the company as a whole?

Yes, I think we'd said just earlier on the question is it's basically flat for the first quarter. Jeffrey Zekauskas – JP Morgan Chase: And are your average prices up more than 5% year-over-year in the second quarter, which I guess would be about consistent with the first quarter?

Yes, and in fact what we've said is that comp stores were down 13 1/2%. When you take a look at the volume, it's down teens so that puts you in that same ballpark. Jeffrey Zekauskas – JP Morgan Chase: And are your raw material spreads narrowing or widening out right now?

Spreads versus what, Jeff? Jeffrey Zekauskas – JP Morgan Chase: In other words your raw materials versus your paint prices as we go into the third – [audio gap] Amy Zhang – Goldman Sachs: My first question is your pricing strategy. I think on your [inaudible] today you're fairly convinced that now you've adopted a little bit more flexible pricing strategy for your DIY customers, essentially I think you're saying that the margin neutral strategy to bring down your listed prices and at the same time reduce discount levels. I'm wondering how that strategy has played out? That strategy help you guys get a little bit more volumes or just any positive impact in quarter-to-date have you guys already seen from that strategy?

Yes that pricing change, Amy, was effective July 8 so we're really in our infancy. And just to clarify for all of listeners as a reminder, 85% of the volume that goes through our stores aimed at our professional contractors, had no impact or changes in our pricing strategy. And the remainder 15% through our DIY, we've left the high end, higher premium quality product lines unchanged. We simply introduced a lower, in the $20 range, entry level price point product and widened the gaps a little bit in the low to mid-point at the price points. So those are just going into effect right now. We'll be able to comment on that after the third quarter. Amy Zhang – Goldman Sachs: My second question is regarding your full-year sales guidance. Now in fact overall total sales is down 11 to 12.5%. And if I look at the first six months, your sales down almost 13%, so given that the easy comp from last year on your fourth quarter this year sales number, I'm just a little bit surprised on why you guidance couldn't be a little bit more optimistic with the guidance suggesting a further deterioration in the sales numbers in the third quarter?

I think we're commenting based on the environment that we're seeing in the domestic U.S. market for professional painting contractors which is our largest segment. And we've commented a little bit about two of those segments specifically, commercial and new residential construction, which continue to look like they're going to struggle. I think as we said in the call there's really no impetus that we're seeing right now for this rebound. And while some pundits have talked about a second half, we think it's more likely to be out into 2010 at this point in time. So our guidance is giving you the best look that we have right now of what we're likely to see on the top line.

Your next question comes from Dmitry Silverstein – Longbow Research. Dmitry Silverstein – Longbow Research: I just want to clarify a couple of questions or maybe ask them a little bit differently the questions that were asked before. First of all, in terms of your seasonality, revenue seasonality in the third quarter, the last couple of years we've seen third quarter revenues being stronger than the second quarter. Is that what we should expect this year as well? I'm talking about the third versus the second?

The sequential year-over-year or month-over-month as we've gone through this year have been very much consistent with past practices. And we'd expect that to be the case again this year. There's no change in that, Dmitry. Dmitry Silverstein – Longbow Research: So we're still looking for modest sequential growth in third quarter revenues?

Yes. Dmitry Silverstein – Longbow Research: Now you talked about pricing obviously being flat sequentially, but year-over-year did I hear Jeff's comment correctly that it was up about 5%?

That's correct.

He used the 5% and we said that's not materially off. We didn't use the 5%, but yes we – Dmitry Silverstein – Longbow Research: But put it somewhere in the lower to middle single digits let's say.

Right. Dmitry Silverstein – Longbow Research: Right, just wanted to confirm that. Secondly another follow-up on Jeff's question, when you talk about raw materials with all the moving parts that you have sequentially obviously there's some seasonal bounce back off of the February-March lows. But on year-over-year basis if you look at your basket of raw materials was it lower costs and therefore a benefit to you? And if you care to quantify what that benefit is? And as you look at the trajectory of raw material price increases last year, assuming normal seasonality this year, do you expect that positive benefit to actually help you more in the second half of the year?

Well the first half of the question, Dmitry, there was a modest year-over-year benefit in raw materials in the second quarter. Going forward it's hard to say, given the volatility in the energy market and that pressure we're seeing now whether that benefit is likely to continue to increase or decrease. Dmitry Silverstein – Longbow Research: I'm just looking at a very sharp increase in the slope of raw materials in 2008 and what looks like a more benign slope to the extent that you can extrapolate it.

I think that's a fair assessment, Dmitry. Dmitry Silverstein – Longbow Research: Okay, so these things should get more positive for you in the second half of the year?

Possibly correct, as Bob said, given the volatility doesn't go crazy on us, that's possible. Dmitry Silverstein – Longbow Research: And then final question on the restructuring benefits that you talked about that the consolidation of assets and some distribution costing taken out and freight being lower, can you quantify, and maybe not in absolute dollars, but at least where you are in percentage terms in completing your restructuring program? How much more is left to do in 2009, and if you care to comment on the benefit that you saw in the quarter from these restructuring programs?

Yes I'll comment briefly on kind of where I think we are in the process and I'll let Sean give you a sense of whether we're feeling any of that benefit yet or what part of that we'd be willing to share with you. This has been an aggressive approach to get these facilities down. I will also comment that the store closings have also been part of that as well. As a quick reminder, Dmitry, we closed 79 locations last year. We're probably going to be in the 30 plus or minus a few store locations this year. And so applying simple math, we're about half of what we did a year ago. And my guess is that as we head into 2010 there may be half again as much as we did this year in stores. So we're nearing the end of the need to really kind of get this redundant store closing in place, pretty much on the backs of all the acquisitions that we made throughout the last six, seven years. That feels like it's in pretty good shape. The assets in terms of the production capabilities also are in pretty good shape as well for us. So I would say most of that heavy lifting is behind us as we go forward.

I would tell you that we still, I don't have – I'd have to work up a work up a percentage or even to give you some type of a range, but I would tell you that we do – we will start – we will continue to feel more benefit from that, Dmitry. I don't have a percentage for you. Dmitry Silverstein – Longbow Research: And just maybe this will help you out a little bit. If you can look at the year-over-year margins which you have been able to deliver in the businesses, particularly the consumer group where you get margins up and the store group where margins were down because of sufficient negative volumes, but it looks like apples-to-apples costs were taken out of that business. How much of that was related to restructuring and how much of that was related to raw materials?

And that goes back to when Saul asked that question, I don't think we're prepared to give that metric.

Your next question comes from Gregory Melich – Morgan Stanley. Greg Melich – Morgan Stanley: Two questions, one on volume and then a follow-up on another one, if you look at your change in your implied back half assumption, it looks like it's around 400 or 500 basis points from where we were before, and it sounds like from an earlier question that the bulk of that is in how the swing commercial is coming through and little bit different on the residential. Is that a fair assessment that I'm making?

Yes. Greg Melich – Morgan Stanley: Is industrial actually running better than you would have thought or in line?

No, I think we're seeing the same kind of softness there as well. If you just think about the CapEx spending that's being curtailed by most corporations it would have impacted maintenance projects. This is the time when typically plants would shut down for summer maintenance. We're not seeing those kinds of work. Some of the stimulus money that should be flowing in is also taking longer to reach quote "shovel-ready projects" so that's being deterred a little bit as well. So there's definitely softness in the protective and marine segment of our revenue side as well. Greg Melich – Morgan Stanley: So if we were to look at the second quarter in that volume was still running down high teens incrementally versus the first quarter, or just – was residential down high-single-digit and the commercial was down 30% to 40%? Is that – am I thinking the right way?

See, Greg, sequentially, obviously first quarter's a small quarter. If you're looking year-over-year, residential was down, and we look at it in square footage. You're talking about the market? Greg Melich – Morgan Stanley: Yes.

Yes, in square footage residential was down in the mid-40s and commercial was down in the range of 50, and that is in square footage put in place. Greg Melich – Morgan Stanley: For new construction?

For new construction. Greg Melich – Morgan Stanley: For repair or model?

That's a little harder to get at. I mean, commercial repair is down, the property maintenance, mainly because of a large component of that is apartments, and apartment occupancy rates are down. So commercial repaint has been very weak and as Chris mentioned, not a lot of CapEx spending or maintenance spending on existing buildings. In residential, probably the segment of the market's that's held up the best is the DIY portion of the residential repaint market. Greg Melich – Morgan Stanley: Okay. And then just to confirm, is it fair to assume then that in the third quarter you're running within the sales range that you gave out?

Yes, that's our guidance for the third quarter.

Thank you. Our next question is from PJ Juvekar – Citigroup. PJ Juvekar – Citigroup: Quickly, I want to go back to consumer group or DIY channels. Can you talk a little bit about prices versus volume, and my specific question is that is there discounting going on in hard goods like brushes and rollers to move paint volume in the DIY channel that's impacting you negatively?

I don't think there's been a lot of change in year over year discounting through our retailing partners, certainly through our own stores as well. This is the time of year where discounts for paint and associated products including brushes and roller, which you mentioned, would be going on. We're not seeing them any more aggressive or specific than they might have been in the past. And I don't think as a result then that we're being negatively impacted by that one way or the other. PJ Juvekar – Citigroup: Okay, And then secondly, on the industrial paint demand, you talked about architectural, you talked about commercial. Can you give us a little bit feel for where you are in the industrial cycle and relative to the other cycles because does it bottom out typically six to 12 months later?

Yes, maybe Bob, you can comment on just some of the industry data that we're seeing on projects in this industrial sector?

Yes, and PJ, are you talking specifically – industrial, obviously is a broad category – are you talking specifically about protective and marine, or - PJ Juvekar – Citigroup: I'm talking about general industrial, and you have some profitable stores that sell industrial paint.

Right, okay. Primarily our stores group is industrial – is protective marine. There's a couple issues that are really – a couple areas where we're seeing significant drag on protective and marine. The protective coating side, structural seal that goes into new commercial construction is off easily to the extent that commercial construction in general is. So that market's down 50%, which means structural steel coatings are down easily by half. The non-building construction is down. That's a category that we normally see plus or minus low-single digits at worse, is off in the double-digit range, in the mid-teens year-to-date. So that would be construction like bridges, water, wastewater treatment plants, things like that. So a lot of infrastructure is not coming out of the ground because it is driven by growth in residential and non-residential building construction. Does that get to your – PJ Juvekar – Citigroup: No, yes, it does. It does. And one quick question for Sean. Sean, I know you have a financing book with contractors. Can you just make comment on what trends have you seen there, and any bad loan losses, etc.? Thank you.

Thank you. Our next question's coming from Sergey Vasnetsov – Barclays Capital. Sergey Vasnetsov – Barclays Capital: A couple questions about maybe towards 2010 rather than this year, you particularly have – dividend payout was 30% of previous year EPS, hence EPS [inaudible] has been growing. What are your early thoughts on keeping that number, or keeping that range for 2010?

Well, I think, Sergey, this year our payout has crept up more into the 35%, 36% of previous years' EPS and that's been part of previous years in the 31-year cycle as well, too. Obviously this is a board of director's decision that management recommends to them. I think you should take great comfort in the fact that after 31 years of consecutive dividends that we place a high importance on continuing to pay dividends and continue that trend. We've also commented on this call and others that the company's cash performance continues to be strong even in this difficult economic environment. So there's nothing that you should read into any of our comments that would indicate that we won't do anything but continue that policy. Sergey Vasnetsov – Barclays Capital: Continue policy of increasing dividends or –

Yes. Sergey Vasnetsov – Barclays Capital: Continue policy of keeping the range?

Increasing dividends. Sergey Vasnetsov – Barclays Capital: Good, okay. And so speaking of cash, I agree in total with your point about a very strong free cash flow generation even in the worst conditions. What are your thoughts on share buybacks, again, maybe not imminently for the third quarter, but for next year?

Yes, I think that what we've commented is we continue to buy stock opportunistically. When you take a look at where our debt is right now, what we have consistently said is we don't believe our shareholders are paying us to manage cash. I could see the debt coming in slightly below and we'll use that cash to increase shareholder value, and – which means that I'm sure that we'll continue to buy the stock opportunistically. Sergey Vasnetsov – Barclays Capital: Okay, and lastly, just a question on tax rates. What's your expectation for the rest of this year and next year?

Yes, last year was, we finished the year at 33.3, and I would tell you that we still think that for the full year we'll be down slightly. We're actually down for the first six months, 31.9 versus 32.4 last year, but we still think that for the full year we'll be slightly below 33. And looking at 2010 is really – haven't really taken a look at that, but long term we think if you look at the last four, five years, our stock, our tax rate's been in that low 30s and we can still see it in that range.

Thank you. Our next question is from Dennis McGill – Zelman & Associates. Dennis McGill – Zelman & Associates: Just really had a big picture question for you, Chris, In your comment earlier you had said that you guys haven't seen any signs that a recovery's imminent, but you also I think you that you expect the recovery when it does come to be slow. Realizing this could be difficult to peg the bottom, is there any reason why you couldn't foresee a stronger recovery given the fact that you had said the last three years have wiped out a decade of volume growth. So is there any reason why you think the recovery's going to be more muted than maybe we've seen in the past?

I think it's just in our nature to be a little conservative on this guidance, Dennis. As economies and some of the leading indicators start to talk about more positive performance, we've even seen some of those recently, where we've had a couple sustained months of better results. Don't forget that painters are using the last guys in for these projects to finish them off, and so I think that kind of mutes the bounce-back that, while some sectors might start to come back a little bit quicker than painters will, I think that's all that you should read into that comment. Dennis McGill – Zelman & Associates: Okay, and fair to say that the – that they are – the biggest headwind over the next year and a half or two years is really the projects being build out on the non-res side that you talked about?

I think that's fair. Dennis McGill – Zelman & Associates: Okay, and then just a couple quick ones. Sean, can you talk about the capacity or the short-term split between the commercial paper and the revolver?

When you take a look at our debt at the end of the second quarter, I would tell you that we were actually in the commercial paper. A majority of our debt was in commercial paper. Dennis McGill – Zelman & Associates: And that's the end of the quarter number?

Yes. Dennis McGill – Zelman & Associates: Okay, can you give any specific funding outstandings?

The outstanding – our total debt was $800 million, our long-term was $300 and our short-term was $464 million. I would tell you that the majority of that was commercial paper. Dennis McGill – Zelman & Associates: Okay. And then on the corporate line or the administrative line, if we look at that excluding the environmental and the interest, the number that we should be thinking about in the back half of the year would be similar to the front half. Is that how you kind of got it earlier?

Yes. We don't really give guidance by the segments and so forth, but I would say that the run rate of our administration and costs and so forth probably should run around the same kind of run rate that we've had in the first half of the year, which was down compared to last year.

Your next question comes from Jay McCanless – FTN Equities. Jay McCanless – FTN Equity: Question about the paint stores first, with the changes you've made to bring more DIY folks in, can you give us any sense as to what DIY transactions did on a sequential basis and then year-over-year in the second quarter?

Yes. I think you need to be careful here about, you know, all the changes we're making to bring more DIY in and this is a business that has historically generated about 15% of its revenue from our DIY customer base. We've had a longstanding marketing effort towards DIY and continue to do so. The mix is not changing dramatically. I think sequentially to your point when we've look at our DIY performance, Bob made the comment that that's been one of the better performing or least retreating areas of the architectural paint market. And we're seeing that through our stores as well. We've seen some nice weekends on our DIY business, and its performance is a little bit better than the group's numbers overall. So we don't think this is something that moves the needle dramatically for the company, but it's important business and we're continuing to pay attention to it. Jay McCanless – FTN Equity: Should we expect a pickup or an increase potentially in SG&A in the back half of the year as you all roll out some promotions related to these different offerings that you're doing for DIY at the paint stores?

No you shouldn't, Jay. Our SG&A expenses will continue to track in the general direction they've been in the first half. And again, I think we commented earlier in the call that the kind of promotional activities that we're doing are very consistent with what we've done in past years and there's no significant uptick in this plan for this year. Jay McCanless – FTN Equity: Okay. And then one other question, I believe you said that the Southwest stores were I guess, less negative than everyone else on a year-over-year basis. Does that have anything to do with the foreclosure turnover we're seeing in that area or could you give some other commentary behind it?

We've commented in the past, Jay, that most of the – or I think a significant portion of these foreclosure sales are that the purchaser are investors who are sitting on the properties trying to turn them out into the rental market and making minimal investment in them. And to the extent that they are, you know, replacing floor covering, doing a little painting, a little electric or plumbing maintenance, we think that probably the big box stores are the primary beneficiary of that business. Once those homes are put out for sale against – when the market turns and those homes go back on the market to be flipped for a profit, that's when we think more investment will probably go into them. That's when we'll see the benefit. It's likely that our Southwestern division outperformed just because there are some stronger markets down there. The Texas markets have held up well.

Your next question comes from Steve O'Neil – Hilliard Lyons. Steve O'Neil – Hilliard Lyons: The only thing that hasn't really been talked about is the international side and I just wondered if you could just comment on the performance of some of your selected international markets?

Yes, I'd be happy to do that, Steve. As you know, primarily Latin America is where the company's non-domestic revenues are generated. This year we are facing currency headwinds. I think about half of the revenue decline in the quarter was attributable to currency. That leaves us with still a significant single digit decline in those businesses. And not unlike the United States, we're seeing a softness in a number of those different segments down there. Starting with Brazil, which is the majority of our Latin American business, plus that largest country down there and it's a country that's been slowing down their rapid growth. We've seen, as Bob mentioned in some of the earlier questions, the whole gambit of issues, whether it's our industrial coatings to our protective and marine segment down there, some architectural businesses, pretty much across the board. We sell through our own stores as you know, as well as independent dealers and some of the regions home center chains and pretty consistent performance across all of them in the negative. Again, don't see a lot of incidents for change in the near term down there. Company continues to do the same kinds of things we do domestically to pull on levers to try to gain share, get cost out and increase cash performance and all those things are happening. Steve O'Neil – Hilliard Lyons: Any other markets to comment on?

No, we're a – we have a slight presence in Asia Pacific through our global group. Most of our business over there is industrial[OEM coatings. And our market share is de minimis in that part of the world. I know that's soft for others but we're just basically getting started. We've opened architectural paint stores as we've commented on past calls in India. Those are continuing to generate nice sales gains month-over-month, but again, such a small part of the business, not really enough to move the needle.

Your next question comes from Saul Ludwig – Keybanc Capital Markets. Saul Ludwig – Keybanc Capital Markets: I just have one follow-up. You know, earlier you commented that as is normal your third quarter revenues are somewhat higher than your second quarter and that is even with the outlook for commercial construction and new housing that you alluded to. Do you think that other variances as we go from the second quarter to the third quarter, we should have less FX expense? We're not going to have the plant closing costs. Sean talked about lower interest expense and much lower environmental cost. All of those would seem to imply that with higher revenues and lower of these special expenses, if you will, that your earnings should be higher in your third quarter than in your second quarter. What is it that could come about that could cause you to be in the 115 to 135, which would be lower than your second quarter in the third quarter? What are the other variables that maybe we're not thinking about if we're going to get higher revenues and lower other expenses?

Well, Saul when you take a look at it, the question was do you thing that your sales – is the seasonality changing? I think that if you look at our sales forecast when you take a look at the ranges, the low end of the range actually is below the second quarter. You can do the math and see that. So we do – when you take a look at it there's the sales – the seasonality hasn't changed. You sit there and we probably shouldn't have answered that question because that sort of moves the lower end of the range up at the sales fork in our sales forecast. So we still see uncertainty in the sales. We still have different things we're working on in the margins. And to go down there in the SG&A – to go down I'd have to answer that question. I don't know how to answer that question without getting very detailed of what our forecasts are and on the every single line. Saul Ludwig – Keybanc Capital Markets: The thrust of my logic isn't out in left field.

No, it's not in left field. I can see what you're talking about. But when you sit there and take a look at it – Saul Ludwig – Keybanc Capital Markets: Well we must be missing something big because we're talking about a lot of items here with no plant closing costs, no lower environmental, lower interest costs?

Well first of all, we have plant closing costs that'll definitely go into the third quarter. The 14 facilities that we've talked about in the last six quarters that have been either shut down or announced to close are still going forward, so we'll have some of that yet to do. We have some store closing costs to get through in the third quarter as well, Saul. Saul Ludwig – Keybanc Capital Markets: Oh, good. That's additional clarification, thank you. And then finally, usually you generate $300 million, $400 million of cash in the back end of the year. Would you expect that to be any different this year, Sean?

Yes. I think we probably, when you take a look at it from last year to this year, you're taking a look at -we really did a nice job of the working capital. We're probably not going to have the same type of positive working capital, so it'll be muted compared to last year. But it's going to be very good cash flow for the next six months.

Your next question comes from Don Carson – UBS. Don Carson – UBS: Two questions. Just a clarification on raw materials, Bob, you talked about how they're going up and certainly the comps get tougher in Q4 if you look at the benchmark pricing for acrylic and things like that. What kind of a lag is there before you would see that flow through? Does that hit you in the fourth quarter, or is there lag into the first quarter? Just wondering when the significant year-over-year increase in [raws] that might composite a lot of these comparisons?

My understanding, Don, is that it depends on the commodity. I mean the solvents tend to move pretty much in lockstep with movement in the crude market in propylene-naphthalene. The resins tend to lag. And plastic packaging tends to move a little quicker. But it really, it also depends on market dynamics, on - Don Carson – UBS: I'm looking at the specific question being acrylics where we've seen propylene move up because tight supplies which, acrylic suppliers are trying to raise pricing. Just wondering when you're going to see that because as you get into fourth quarter a year ago comparison is pretty difficult.

Right, it depends. Typically, historically pricing in the acrylics have lagged, but we're in uncharted territory. Don Carson – UBS: And finally a question, first you mentioned of how we've wiped out ten years of growth in the paint market several years ago when we had the housing boom people used to talk about the coating season in the East and Midwest. It's extremely wet this year. Does that cost you much in the way of volume? And if so is that just kind of deferred to the second half or is that sort of gone?

We rarely, Don, give weather reports on here, but I think you're accurate. It's been a little bit of a wetter, colder period throughout much of the northern markets. And that's had much impact on the early exterior house painting season. Whether that gets deferred to the second half and get caught up in that time will tell. There's certainly enough painters available to do these homes. So if people are planning to get it done they'll be able to find a painter. Don Carson – UBS: But no discernable impact on volumes that you can ascribe due to that?

We'll see what happens in the third quarter but I wouldn't expect it would be a big mover for us.

Thank you. Our next question is from Amy Zhang from Goldman Sachs. Amy Zhang – Goldman Sachs: Thank you. Just a few quick follow-up questions and first the questions on the consumer segment, I'm just wondering, have you guys already seen the home centers just within the DIY channel, home centers taking a share from mass merchants and also hardware stores because I remember PPG, last week they commented the home centers actual volume growth pretty meaningful for the quarter. I'm just wondering. Your consumer business is a little bit weaker than expected, actually weaker than expected for the quarter. Is that because some market share shifted to the home centers from the mass merchants?

Yeah, we shared that information with you in the past, Amy, when we look at the DIY share for those channels and I think the last time we had a look at it was at the end of 2008. And the home centers did continue to A, be the dominant share of that market, and B, had improved slightly, maybe one or two basis points in that period. So I think there's some movement to them for sure. Amy Zhang – Goldman Sachs: Okay. Even within the DIY Channel?

Yes. Amy Zhang – Goldman Sachs: Okay. And my second question, for the paint stores, if we think about year over year trends in the third quarter would you say the comp – because second quarter the paint stores sales down 13.7% and then adding to the third quarter of this year would you say does the year-over-year trend just stabilized at that level or maybe there's just a modest improvement or there's some further erosion? How do we think about the trend?

I think the guidance we gave for the third quarter would indicate that we're looking at a pretty flat performance second and third quarter.

Our last question is coming from Chuck Cerankosky – Northcoast Research Chuck Cerankosky – Northcoast Research: Sean, as you're looking at the credit markets right now how do you feel about stock buyback in the second half of the year?

I think it's pretty good. I think that our liquidity sources are in a good situation. Our credit facility we're getting close to having less than 12 months, so we are on a short-term there. I think that you'll see us do some type of multi-year there. And once we do I think we'll feel pretty good about buying stock then.

Thank you. Then with no further questions I'd like to hand the floor back over to management for any closing comments.

Well thanks again for joining us this morning. As usual, we'll be available over the course of the day to answer any follow-up questions we didn't get to on the call. We appreciate your participation on the call this morning, and as always we appreciate your interest in Sherwin-Williams.

This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time.