Lori A. Walker – Chief Financial Officer & Senior Vice President Gary E. Hendrickson – President, Chief Executive Officer & Director

Saul Ludwig – North Coast Research Prashant J. Guptar – Citi David Begleiter – Deutsche Bank Robert Koort – Goldman Sachs Analyst for John McNulty – Credit Suisse Don Carson – Susquehanna Financial Chris [Mozilla] – Barclays Capital Markets Steven Schwartz – First Analysis Dmitri Silversteyn– Longbow Research [Mils Walen – CSLA]

Welcome to the fourth quarter conference call. At this time all lines are in a listen only mode. Later there will be an opportunity for your question and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Chief Financial Officer, Ms. Lori Walker. Lori A. Walker: Welcome to our earnings conference call. Today we’ll be covering results for the fourth quarter and fiscal year 2011. Gary Hendrickson our President and Chief Executive Officer is with me on our call this morning. Before we begin I’ll direct your attention to the press release we issued this morning which contains much of the information that we’ll be covering in the call. This call is subject to the forward-looking statements language contained in our press release and our comments may include forward-looking statements as that term is defined by securities law. This morning I’ll start with a summary of our fourth quarter and full year results. Details are provided in the press release we issued this morning which is available under investor relations on our website at www.ValsparCorporate.com. Gary will follow with his comments including our outlook for 2012 and then we’ll respond to your questions. Fourth quarter sales totaled $1.05 billion, a 19.4% increase from the fourth quarter of 2010. Adjusted for currency and acquisitions, sales were up 5%. Adjusted net income per share for the quarter increased to $0.84 in 2011, a 50% increase from $0.56 in 2010. Our press release includes details showing the reconciliation between our reported and adjusted results. As you saw in our press release, during the quarter we reported a non-cash impairment charge of $363.4 million, that was net of tax, for goodwill and intangibles associated with our wood coatings and gelcoat product lines. The action is a result of our annual impairment analysis of goodwill. As a result of that review, we concluded that the economic outlook for the end markets served by these product lines that are closely tied to US housing starts is not likely to change in the foreseeable future. After adjusting our forecast for these dynamics, the carrying amount for these businesses exceeded their fair value. The charge is subject to finalizations of fair values which we will complete before filing Form 10K for fiscal 2011. The non-cash impairment charge has no impact on the company’s liquidity or our bank credit covenants. Both the wood and gelcoat product lines came with the acquisition of Lilly Industries in 2000 and performed well for the company when the US housing market was growing. The gelcoat product line which is reported as part of other is small and not material to our overall results. Our wood product line is part of our coatings segment. We’ve taken steps in this product line to rationalize production, lower the overall cost structure and organize the business to serve our customers well. Looking ahead, we expect the wood product line to deliver positive earnings and cash flow. For fiscal year 2011 sales totaled $3.95 billion, a 22.5% increase from fiscal year 2010. Adjusted net income per share increased 18.8% to $2.65 in 2011 from $2.23 in 2010. Again, please refer to our press release for the reconciliation to our reported results. For the fourth quarter our gross margin excluding restructuring charges in both years was 32.9% down 40 basis points from 33.3% in 2010. Margins were impacted by rising raw material costs which were partially offset by pricing actions. Excluding restructuring charges in both years and one time acquisition fees related to Wattyl in 2010, our operating expenses as a rate to revenue were 22.1% down slightly from 22.2% in the fourth quarter of 2010. Quarter-over-quarter operating expense dollars increased to $36 million due primarily to the addition of Wattyl operating expenses. Now, I’m going to talk about our tax rate for the quarter and for the full year. Both will exclude the after tax non-cash impairment charge. The tax rate for the fourth quarter was 16.3% compared with a rate of 32.5% in the fourth quarter last year. Our tax rate for the full year was 26.7% compared with 30.4% in 2010. The improved tax rate for the quarter and the full year was due to a more favorable geographic mix of earnings and a onetime non-recurring benefit from favorable tax rulings and statute lapses. These onetime events contributed approximately $0.09 per share to earnings in fiscal 2011. For fiscal 2012 we expect the effective tax rate to be approximately 30% to 31%. Average diluted shares outstanding for the fourth quarter were 95.2 million, down 5 million from last year due to repurchases which were partially offset by options. During the fourth quarter we repurchased 750,000 shares for approximately $23 million. For the full year, we repurchased 6.75 million shares for approximately $242 million and have 8.25 million shares remaining under our current authorization. We estimate average shares outstanding for the first quarter to be approximately 95 million. Recapping our sales performance for the quarter, and this is adjusted for currency and acquisitions our overall core growth was 5% driven by high single digit price increases which offset a mid single digit decline in volume. Currency was 3.1% and acquisitions added another 11.3% for total growth of 19.4% in the quarter. Turning to our segment results, this again is adjusted for currency and acquisitions, coating segment sales increased 7.9% in the quarter and were up 10.6% for the full year. Sales in this segment benefited from pricing and new business. Paint segment sales increased 1.4% for the quarter and 3.7% for the year reflecting the impact of pricing. Sales and other increased .4% for the quarter and 4.5% for the full year primarily due to pricing. I’m now going to move into a discussion of our EBIT margins and all of the numbers that I’ll be discussing exclude the non-cash impairment charge, restructuring and acquisition related fees. For the fourth quarter our coatings segment EBIT margin was 15.5%, up 70 basis points from 14.8% in the fourth quarter of 2010 due primarily to pricing. Our paint segment EBIT margin was 9.9% down 140 basis points from 11.3% in 2010 due primarily to the lag between higher raw material costs and the impact of our pricing actions. The EBIT margin for our other category was -24.6% compared with -20% in the fourth quarter last year. As a reminder, other includes our corporate expenses. The total company EBIT margin for the quarter was 10.8% compared with 11% in the fourth quarter 2010. Looking at margins for the full year, our coatings EBIT margin was 13.3% down from 14.1% in 2010. The paint segment EBIT margin for the year was 9.9% down from 13.2% last year. The EBIT margin for other was -8.9% compared with -12.9% in 2010. Total company EBIT margin for the year was 10.5% compared with 11.8% in fiscal 2010. The overall change in company and segment EBIT was due primarily to the lag between higher raw material costs and the impact of our pricing actions. Moving to the balance sheet, our net debt at the end of the year was $859 million, a decrease of $133 million from the end of the quarter and an increase of $88 million from the end of fiscal 2010. For the fourth quarter, operating cash flow was $186 million compared with $89 million in the fourth quarter of 2010. The positive change in cash flow this quarter was primarily the result of improved working capital performance. For the full year we generated $291 million of operating cash flow compared to $266 million in fiscal year 2010. Working capital as a rate to revenue improved 130 basis points to 13.6% which compares with 14.9% in fiscal 2010. On a full year basis we generated $157 million in free cash flow which we define as operating cash flow less cap ex and dividends and we estimate free cash flow in the range of $160 to $190 million in fiscal year 2012. Our net debt to capital was 41.5% and we ended our quarter with $602 million of reserve liquidity and that includes $424 million in available committed credit facilities and $178 million in cash. Capital spending in the fourth quarter was $24.1 million compared with $32.5 million in the fourth quarter of 2010. For the full year, capital spending was $66.5 million versus $67.7 million in 2010. Our forecast for 2012 capital spending is approximately $90 million. Depreciation and amortization for the quarter totaled $27.1 million up from $20.1 million in the fourth quarter 2010. Excluding $7.7 million of accelerated depreciation related to restructuring, depreciation and amortization for the full year totaled $90 million. Our full year forecast for 2012 is approximately $90 million. Just a brief comment about our restructuring actions, as we detailed on our third quarter earnings call the total cost of the overall efforts will be $0.30 to $0.35 with 60% in cash and 40% non-cash. We incurred $0.13 of the cost in Q4 for a year-to-date total of $0.24. We expect the majority of the remaining $0.06 to $0.11 of the costs to be incurred in the first half of 2012. The savings from these actions are included in our guidance. As mentioned in our release we currently expect our fiscal 2012 adjusted net income per share to be in the range of $2.87 to $3.07 which excludes restructuring. With that, I’ll turn the call over to Gary for his comments. Gary E. Hendrickson: We had a good quarter. We delivered double digit growth in both sales and earnings and we continued to perform well in all regions. We were very pleased with our acquisitions and strong new business efforts which helped us to offset soft markets in North America and Europe and inventory adjustments by our customers in North America in our paint segment. In our coatings segment we gained new business in all our product lines particularly in general industrial and coil. In the paint segment sales benefited from our Wattyl acquisition and our growth in our consumer business in China. During the quarter we continued our pricing in all geographies and product lines and on a year-over-year basis we continue to make progress in restoring our margins. However, we still need more pricing before our margins are fully restored. We also did a great job in managing our cost, lowering our inventory levels and improving productivity so overall a very good quarter. Turning to the full year, we once again delivered double digit earnings growth, $2.65 per share an 18.8% increase and our third consecutive year of double digit earnings growth. Even excluding the one-time tax benefit of $0.09 per share that Lori mentioned, our earnings per share were up nearly 15% over last year. This was a significant accomplishment by Valspar employees worldwide given the substantially higher raw material costs and challenging market conditions in the US and Europe. During the year we made solid progress on our long term growth initiatives, our investment in brands, innovative technologies and strategic acquisitions. In the US consumer awareness of the Valspar brand continues to grow and third party data indicates that we are outperforming the market. The consumer business in China performed well and delivered another strong year. Regarding Wattyl, we’re on track with the integration in our plan to bring Wattyl’s profitability in line with our corporate average. So 2011 was a good year for driving growth through our investment in brands. Throughout the year, we were successful at securing significant new business in our coatings product lines, particularly those serving industrial markets. We continued to deliver new technology and we achieved our target for net new business. We also completed the acquisition of Isocoat a Brazilian based manufacturer of powder coatings that further strengthens our presence in Latin America and broadens our range of technologies for the general industrial markets. We made good progress towards restoring our operating margin through pricing and productivity. We secured almost 10% in pricing globally in response to markedly higher raw materials costs. And as we pointed out in the past there’s a lag between raw material cost increases and the impact of our pricing actions and we still need more pricing. We also took significant action to increase our cost structure and improve productivity. Finally, we returned cash to shareholders by increasing our annual dividend per share by over 10%, the 33rd consecutive year of a dividend increase and by repurchasing 6.75 million shares. Looking ahead to fiscal 2012, our guidance is for adjusted net income per share in the range of $2.87 to $3.07 which once again represents double digit earnings growth. The assumptions behind our performance outlook include modest sales growth driven by new business in all product lines and regions, a moderating raw material environment. We do expect raw material inflation for the year but don’t anticipate the dramatic inflation that we experienced in 2010 and 2011, and a continued focus on operational and pricing discipline along with productivity improvement which includes savings from our restructuring actions. With those comments, I’ll open the call for your questions.

(Operator Instructions) Your first question comes from Saul Ludwig – North Coast Research. Saul Ludwig – North Coast Research: I have a couple of questions about your influence on 2012 outlook. To what degree are earnings being helped by lower amortization of intangibles as a result of the onetime charge that you’ve taken? Lori A. Walker: Not at all, there’s no change to amortization. Saul Ludwig – North Coast Research: With regard to price versus raw, to what degree did pricing – what was your headwind? Did price versus raw materials hurt you $20 million, $30 million, $50 million or how much and how are you thinking about that ratio in your 2012 guidance? Gary E. Hendrickson: Let me answer it in terms of the year. We had raw material inflation in the year of mid to high teens. We obviously agreed to a lot of pricing with our customers in the year and we made about 85% to 90% recovery. Net year we still have that 15% to 10% to recover which is inflation that we didn’t recover in 2011 and our expectation for raw material inflation in the guidance that we gave and in our plan is for inflation somewhere around [inaudible] raw material inflation and our working estimate is mid-single digits at this point. Saul Ludwig – North Coast Research: Do you think that 85% to 90% recovery would be better in 2012 but not reach 100%? Gary E. Hendrickson: That depends on what actual inflation occurs. We obviously don’t have a crystal ball and we don’t know what will happen. If raw material inflation were flat in the year I would say that we’d reach close to 100% recovery in 2012. If we have continuing inflation then we’ll have obviously the normal lag that we have as far as agreeing to pricing with our customers to cover that inflation and it wouldn’t be 100%. Saul Ludwig – North Coast Research: Then just finally, you’ve been very successful with the new business, could you give us some quantification to what degree new business helped your top line and is there lags to this new business pattern? Gary E. Hendrickson: I’ll answer the second question first and say that there are lags and all of our businesses have nice plans for growth next year. Much of that is based on technology innovations. In the year, it was I think I mentioned on our third quarter call that our net new business was about 3% in the year and that’s the number.

Your next question comes from Prashant J. Guptar – Citi. Prashant J. Guptar – Citi: If you exclude the Wattyl acquisition, it seems that the paint top line was up maybe 1% or maybe it was flat. Can you give us a price volume breakdown that you typically do? And then I think you said you continued to gain share in the US, does that mean at Lowes and was there any impact from PPG Olympic ONE paint? Gary E. Hendrickson: I think we were up slightly in the paint segment overall and that’s a combination of our business in China, our business in the US and several channels. You asked me to exclude Wattyl. Our business in China grew nicely. Our business in the US frankly, was soft. We think the overall market in the US, the DIY market was soft in the year. It wasn’t a great painting season, spring started late, there was unusual weather, a lot of rain during the painting season and fall came early. So we think the overall DIY market in North America was down volumetrically in the year. We’ve done well with our products in both the main channels that we serve and the third party data that I referenced indicates that Valspar was outperforming the markets. But I will say we outperformed the market in a weak market. Prashant J. Guptar – Citi: Then just a quick question on the goodwill impairment charge of $360 million, Lori it sounds like the charge was quite big compared to the total amount of goodwill which is about $1.4 billion so was a big chunk of that goodwill tied up in wood coatings alone? Lori A. Walker: Yes, and just to make it clear the charge is goodwill and intangible so if you look at the combination that was roughly $2 billion prior to the write off and yes, that is associated then primarily with the wood coatings product line. That’s the one associated with the acquisition of Lilly back in 2000.

Your next question comes from the line of David Begleiter – Deutsche Bank. David Begleiter – Deutsche Bank: Gary, just on raws for next year what are you forecasting for TiO2 to be up year-over-year? Gary E. Hendrickson: I don’t know David, I think there’s another nomination for shortly after the first of the year. It’s certainly not as significant as they have been in the past so it’s possible that we’ll see continued pricing from the TiO2 suppliers but I certainly don’t expect it to be to the extent that we’ve seen in the past. David Begleiter – Deutsche Bank: Just on your propylene based acrylics and other resins, are you yet seeing any declines in those pricing for you guys? Gary E. Hendrickson: They’ve come down some. The derivatives of propylene and ethylene have come down from their highs. I think we’re forecasting for the first quarter or two that they’re probably down [inaudible] that we’ll see some modest depreciation of those types of products. David Begleiter – Deutsche Bank: Just in Q4 the sequential increase in coatings is that all recapture of pricing here? Gary E. Hendrickson: It’s a combination of that and a fair amount of new business which is differentiated business that’s coming into particularly our GI and our coil business at nice margins. David Begleiter – Deutsche Bank: The last thing Gary, just the cap ex increase year-over-year can you highlight some of the major projects? Gary E. Hendrickson: Are you talking about 2011 to 2012? David Begleiter – Deutsche Bank: Yes. Gary E. Hendrickson: It’s about a third maintenance, a third growth and a third what we call strategic. So the strategic part is the most interesting part for us where we’re making some substantial investments in our plants in China. We’ll be building a new plant in China to support the growth of the Huarun business and we’ll be expanding two of our other plants in South China to support the growth of our industrial businesses. David Begleiter – Deutsche Bank: Gary why was Huarun up year-over-year in 2011? Gary E. Hendrickson: Well, we break it into two pieces. We break it into the consumer piece and we break it into the industrial piece. The consumer business was up high teens in terms of revenue and the industrial business was up somewhat less than that. I don’t remember the exact number. Lori A. Walker: It’s low double digits.

Your next question today comes from Robert Koort – Goldman Sachs. Robert Koort – Goldman Sachs: Can you talk a little bit about what you’re seeing generally in Australia? Is that sort of a flat market and the cost take outs are driving the results or is there some thread of growth there as well? Gary E. Hendrickson: Well, the housing market in Australia is soft. Interest rates are high and it’s not a robust housing market so the volume expectations that we had going into the year were not realized on our core business. However, we did secure the majority of the shelf space in the new Masters Store which is a between Lowes and Woolsworth. Five of those stores are open and they appear to be performing extremely well, certainly our paint sales are performing well. In our model, that’s the principle growth engine that we have for the first couple of years. Relative to the cost outs, we’re on track. That was a big part of our restructuring that we did in 2011 and relative to our plan we’re on track or maybe slightly ahead of our plan. Robert Koort – Goldman Sachs: On the resin side you guys have some vertical integration there. Can you remind us what kind of resins you make and is that a novelty in the paint space so maybe you’re seeing some quicker raw material relief than some of your competitors? Gary E. Hendrickson: We make two types of resins, solvent based and water based and the water based is the much larger component of it. That business did well this year but it was challenged with volume because we’re selling into the US architecture market which I said earlier was a weak market this year. Just in terms of recovery we would not expect to see it at a faster pace than our competitors would. It comes at more or less the same pace. Robert Koort – Goldman Sachs: The impairment charge on the wood coatings business, is that all the goodwill or what part of that will be asset consolidation, or closure, headcount reduction, or other restructuring efforts? Gary E. Hendrickson: It’s 100% goodwill and intangibles. There’s no people involved, there’s no cash involved, it’s a balance sheet adjustment. Robert Koort – Goldman Sachs: Then the last one for Lori, I’m a little confused, I don’t think I recall seeing a company that had a GAAP share count that was decidedly different from the non-GAAP. Can you just explain what that difference is. Lori A. Walker: Sure. We’re in a reported loss situation therefore GAAP requires that the basic and diluted shares are the same and that’s what you see the shares the same. But once you exclude the goodwill impairment loss then the appropriate diluted shares you should be using is 95.2 million.

Your next question comes from Analyst for John McNulty – Credit Suisse. Analyst for John McNulty – Credit Suisse: A few quick questions, overall volumes last quarter were down about 1%. Were volumes down around the same this quarter or a little bit worse? And also, what do you see by way of volumes in 2012? Lori A. Walker: The volumes were down a little bit more in the fourth quarter than they were in the third quarter. We had talked about it being more in the mid-single digits versus the 1%. And as we look into 2012 from a market growth perspective we’re expecting the US and Europe to be flat to slightly positive growth with more mid-single digit growth in the regions of Asia and Latin America. John McNulty – Credit Suisse: Another quick one on volumes, were volumes roughly consistent throughout the quarter or did you see any type of slowdown as you went through the quarter towards the end? Gary E. Hendrickson: They were roughly consistent through the quarter. John McNulty – Credit Suisse: Last quick one if I may, on raw materials could you talk a little bit about qualifications for Chinese TiO2 in terms of what progress you’ve made and the viability of this alternative? Gary E. Hendrickson: We’ve made a lot of progress. Our technical people have done a great job in substituting Chinese TiO2 for what was formerly the chloride based TiO2 source from the multinationals. We’re doing the same thing in Europe and China. It’s been a notable success for us.

Your next question comes from Don Carson – Susquehanna Financial. Don Carson – Susquehanna Financial: Gary you mentioned that some of your North American customers made inventory adjustments. Could you comment more on that? And just to review some of your comments about the market, you talk about how DIY was down for the year and obviously it’s been tough with first half comps in calendar 2011 because of the first time homebuyer credit last year. Are you saying even in calendar Q3 that the overall market was still down? I thought DIY, at least the big boxes had been taking some share from the contractors so again, maybe you can comment on some of those dynamics in the US architecture market? Gary E. Hendrickson: I’ll just say Don that all the data that we have about the US DIY market says it was down this year and it was down certainly in the painting season is the third and fourth quarter for us and it was down on a year-over-year basis in the third and fourth quarter. The inventory adjustment that we saw in our paint segment in North America I think was a normal reaction to a weak market. Don Carson – Susquehanna Financial: So you think your customers are going into year end with less inventory than they were a year ago relative to end market demand levels? Gary E. Hendrickson: This is non-material for them but for us, as the paint supplier, it was a reasonably large number. Don Carson – Susquehanna Financial: So based on that you think you’re numbers could snap back next year and grow above the market rate if your customers go to a more normal inventory pattern? Gary E. Hendrickson: I mean, the normal inventory pattern is that when the market is strong our customers tend to carry more inventory Don. And this is obvious, but when the market is weak they tend to carry less and so the answer to your question depends on what kind of a market we have next year. If we have an early spring and people are painting then I think that inventory will snap back. Don Carson – Susquehanna Financial: Final question on pricing, what kind of mix benefit are you seeing from some of your new product initiatives thinking specifically of high def in the US and obviously that carries a much higher price point than the product it replaces so is mix a material contributor to your pricing gains? Gary E. Hendrickson: You mean to our earnings improvement? Don Carson – Susquehanna Financial: Yes. Gary E. Hendrickson: I would say operating leverage has a higher impact than that. All of the restructuring activities that we’ve undergone really since 2008 have positioned us well with a cost structure that is highly leverageable so the new products, the new business that we’re bringing in, in our industrial, particularly in our industrial segment is coming in at a very satisfactory level of profitability.

Your next question comes from Chris [Mozilla] – Barclays Capital Markets. Chris [Mozilla] – Barclays Capital Markets: Just looking to next year if you could break your businesses down into sub segments industrial, packaging, coil, architectural, etc., where do you expect to see the most growth next year? Gary E. Hendrickson: Industrial. Chris [Mozilla] – Barclays Capital Markets: And that would be more globally or how do you look at that? Gary E. Hendrickson: I think we’re going to have a very good year in China. I think we’re going to have a very good year in Latin America, and I think we’ll continue to grow in the US but at a lower rate than those two geographies Chris. Chris [Mozilla] – Barclays Capital Markets: And you originally expected Wattyl to be accretive in 2011, do you know how much it was and what the expectations are for next year? Gary E. Hendrickson: I don’t have that number. It was accretive but I don’t have the specific number.

Your next question comes from Steven Schwartz – First Analysis. Steven Schwartz – First Analysis: For FY ’12 have you guys got an idea of how many basis points the restructuring in Wattyl might add to the paint segment? Lori A. Walker: The way I would answer that is even with the improvement in the Wattyl operating margins with the restructuring actions that we’ve taken it will still be lower than the overall paint segment. So it would still be depressing the paint segment margins. Steven Schwartz – First Analysis: Maybe we model in 100 to 200 basis points of improvement in that segment in paints from Wattyl. Lori A. Walker: I don’t have a specific number off the top of my head. I mean, I think you can look at it in terms that we’ve talked about the fact that when we bought that business it was about a $385 million business with 4% operating profit and we’re looking at getting that business up to the corporate average in less than five years so it’s going to be modest improvements for the next few years. Gary E. Hendrickson: But your number is too high, it’s not going to be that much. That’s a big segment. Steven Schwartz – First Analysis: Just as a follow on, with respect to Europe you mentioned it was soft there. I guess first question there is would your volumes have been positive in the quarter without the impact of Europe? Then if you could just remind us what your strongest product lines are there? I believe it’s mostly packaging but I just want to confirm that. Gary E. Hendrickson: You’re right, it’s packaging and that’s the majority of the business that we have. But, we also have a general industrial and coil business, those two businesses were fairly week. The packaging business in Europe this year was a little bit weak as well. It wasn’t a great pack season for the food pack and so unusually our packaging business, the volumes were actually down slightly in Europe last year which we think is probably not repeatable. We think that with a decent spring and a good food pack those volumes will snap back. Steven Schwartz – First Analysis: And so in the quarter if you exclude Europe – in other words the majority of your product lines in Europe are more resistant to the downturn that’s occurring there right now? Is that safe to say? Gary E. Hendrickson: Yes. Steven Schwartz – First Analysis: So without Europe your volume in the quarter would have still been negative? Gary E. Hendrickson: It probably would have been because we had a similar issue with packaging in North America in that it was a bad planting season for farmers, for the vegetable pack and our food business, which is a very significant part of our packaging business in North America also had the impact from the poor pack season. So I think it still would have been negative.

Your next question comes from Dmitri Silversteyn– Longbow Research. Dmitri Silversteyn– Longbow Research: A quick question on what you’re seeing in China both with respect to the existing Huarun paint business as well as how your new Valspar paint going into China kind of what are the goals for that premium product? Do you hope that it will get as big as the Huarun internal paint sales or how should we think about the opportunity for your premium line in the region? Gary E. Hendrickson: Well, we talk about it but I think we also said that our expectation for it were modest. We’re trying something new. We’re in the large cities not the smaller cities were the Huarun is. We’re selling it through one specific channel which is the developers channel for high end developments and we’ve been pretty successful so far. We’ve got a backlog of new business. We’ve won a bunch of business. But as to whether we’re able to translate that into a large and sustainable business I think it’s too early to tell. Huarun is a large and sustainable business and had another good year this year. We didn’t grow it frankly as fast as we did in the previous year but the market was a little bit softer in China this year than it had been in 2010, but we did grow it. Our distributors are continuing to invest. We grew our store count by about 500 stores in the year and I would say on balance it was a good year. Dmitri Silversteyn– Longbow Research: So the 500 stores what’s that in terms of percentage and how many stores do you have currently? Gary E. Hendrickson: We’ve been in the process of closing underperforming stores and adding stores that make more sense. In terms of the overall base, this is a rough number, but let’s say we grew the store base by 20%. Dmitri Silversteyn– Longbow Research: So the 500 stores was that net or without the closure? Gary E. Hendrickson: That was without the closures. The net number would be smaller. Dmitri Silversteyn– Longbow Research: Secondly, just to follow up on a similar question with the product that you’ve launched in the UK with a partner, can you talk about the successes or lack thereof you’re having in that region and whether or not that’s changing your thinking about perhaps getting into another European market with the right partner? Gary E. Hendrickson: Well, the test and it’s still a test, a limited number of stores, but the test has gone extremely well. We’ll be talking with our partner over the next several months about whether we expand the test to a larger number of stores. I think the second part of your question as to whether that changes our point of view depends on how successful we are with this first test. Dmitri Silversteyn– Longbow Research: So this will be more kind of an end of 2012 type of decision at the earliest? Gary E. Hendrickson: It’s probably early calendar 2012 that we’ll have a decision. Dmitri Silversteyn– Longbow Research: Final question, you’re restructuring your wood coatings business, you’ve taken a fairly large impairment charge from the Lilly acquisition that largely had to do with this business. How should we think about wood coatings as part of Valspar going forward? Is this a business where you’re just in the pruning mode and basically you think the market is gone forever or is this a business that you’re trying to streamline hoping to benefit if and when the furniture market and other wood coating applications come back? Can you give us a little strategic thinking on that business? Gary E. Hendrickson: First, there are two pieces to our wood coatings business. We have our China business which is a combination of Huarun and our traditional furniture business. The Huarun business has been a good business since the day we acquired it. It is, as Lori mentioned, Lori had the number and we grew it into low teens again this year after growing it in the low to mid-teens in 2010. That’s a good business. Part of our restructuring in China was to combine our historical business with the Huarun business. It’s now under one management team and we have the opportunity to supply the whole market. Whatever type of coatings our customers would like to purchase we can do. In North America our outlook on the North America housing market is that it’s not a market that will recover any time soon and so we’ve scaled back our strategic plan numbers for that business. We closed three of our five plants in North America. We only have two now and we think we’ve got the right size to have a sustainable business. But the reason that we took the impairment is that is a smaller business and the fair value of that business given our current expectations is much lower than it was when we acquired Lilly. But, as Lori said, it’s a business that is sized right for the current market, one where we can satisfy our customers well and one that is profitable and returning positive cash flow. Dmitri Silversteyn– Longbow Research: Just to finish on the strategic thinking, aside from the large acquisition of Wattyl that you’ve done you’ve also picked up a smaller business in Latin America, are there any parts of your portfolio that you may be looking to divest? Small business, or regions, or product lines that no longer fit with your vision? Gary E. Hendrickson: Possibly, but it wouldn’t be anything that’s material to the overall company results.

Your next question comes from [Mils Walen – CSLA]. [Mils Walen – CSLA]: A follow up question on China, property prices have come down significantly in Tier-1 cities and they’re also coming down in Tier-2 certainly dampening the prospect for the property market and leading to uncertainty whether China is going to have a soft landing or hard landing. What are you seeing in those businesses, particularly Huarun relative to the relative property price declines? Gary E. Hendrickson: I think that’s good for us. The lower the price of property the more people can afford apartments and the more paint we can sell. As I said earlier, our distributors are continuing to invest. The people I think that can answer that question best are the people who are on the front lines trying to sell to those apartment developers and to consumers who are buying their first, sometimes second apartments and they’re continuing to invest. So the headline story is obviously as you described it but I think on the ground our distributors still have a great deal of confidence that the market will continue to grow and we have wonderful opportunities. [Mils Walen – CSLA]: With respect to your guidance about some moderate growth in North America and Europe next year, how much of that is in general the actual economy growing versus maybe Valspar outperforming the market versus better price or mix? Gary E. Hendrickson: Lori’s comment related to our point of view on basically GDP, whether we’re going to get growth in the overall economy. We believe that in order for us to grow next year in Europe and in the US we’re going to have to do it with new business and that’s market share gains. In Latin America and Asia our growth will be a combination of new business and market growth. That’s our plan. [Mils Walen – CSLA]: Just in North America in terms of the architecture market in DIY, Lowes made some comments that it is planning on closing stores. Is there any change to your strategy within your paint segment relative to that announcement? Are you going to try and sell more through independents or how are you addressing that store growth decline? Gary E. Hendrickson: I mean we sell a number of channels in North America including Lowes. Our strategy won’t change. We want to occupy the premium price points with premium products in whatever channel that we sell in and we’re just going to keep doing what we’ve been doing. As I said, third party data indicates that we’re outperforming the market. There’s not a lot we can do about the market but there’s a lot we can do to continue to establish our brand and the premium positioning.

Your next question comes from Robert Koort – Goldman Sachs. Robert Koort – Goldman Sachs: Lori, I just wanted to follow up, I thought you said part of the depressed tax rate in the fourth quarter was the regional source of earnings. Is there something that would make that mix different in ’12? Why wouldn’t you see some greater benefit on the tax line next year? I think you gave guidance in the low 30s? Lori A. Walker: 30% to 31% is what I gave guidance for and I also mentioned in terms of some of the benefit in the tax rate when you’re looking at the full year was due to onetime non-recurring and so if you look then forward, and we’ve done a projection on our best estimate of what we think the geographic mix will be next year, it would calculate out in the 30% to 31% range. Robert Koort – Goldman Sachs: I’m wondering if we could get a little bit help on maybe Gary, what you’re seeing in terms of regional trends in the packaging markets? I seem to read different things about can demand in the US, Europe and then the rest of the world. What are you guys seeing or what are you expecting going into next year? Gary E. Hendrickson: I mentioned to a previous question, North America and Europe this year were a little bit weak. I think our customers have indicated that in their calls as well largely due to a poor planting season and vegetable pack this year. I wouldn’t expect that that would be the case again next year. I mean it might be but I would expect that that market would recover. Asia is booming, I think there are 30 plus can lines that are going into Asia Pacific today. We expect that we’ll get our fair share of that business and we’ll have nice growth in Asia next year and for many years to come, maybe for decades to come. And in Latin America it’s the same thing particular in Brazil, that’s a very strong market and we expect to grow there again next year. Robert Koort – Goldman Sachs: Is there a technology at play there that you’ve got in some of your other businesses? Is there water component or getting out certain materials that people don’t want in the packaging coatings or has that been long played out? Gary E. Hendrickson: I think I’d just answer that by saying that we’ve been the technology leader in packaging coatings in a number of segments for a long time and we’re continuing to make the investments in our R&D and our technical endeavors to make sure we keep that leadership position.

There are no further questions at this time. Gary E. Hendrickson: Thanks everyone for your questions. To summarize, we had a great year and expect to deliver double digit earnings growth in fiscal 2012. Our guidance is $2.87 to $3.07 per share. The assumptions behind our guidance are modest sales growth driven by new business, a moderating raw material environment, and continued focus on operational discipline and productivity improvement. Thanks for joining our call today and we’ll talk with you again on our first quarter conference call in February.

Ladies and gentlemen that does conclude our conference for today. Thank you for your participation and for using the AT&T Executive Teleconference. You may now disconnect.