Robert J. Wells - The Sherwin-Williams Co. John G. Morikis - The Sherwin-Williams Co. Allen J. Mistysyn - The Sherwin-Williams Co.

Arun Viswanathan - RBC Capital Markets LLC Matthew T. Krueger - Robert W. Baird & Co., Inc. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC Steve Byrne - Bank of America Merrill Lynch Christopher Evans - Goldman Sachs & Co. Duffy Fischer - Barclays Capital, Inc. Don Carson - Susquehanna Financial Group LLLP Matthew Gingrich - Morgan Stanley & Co. LLC Matthew DeYoe - Vertical Research Partners, LLC. Nils-Bertil Wallin - CLSA Americas LLC Scott Rednor - Zelman & Associates Charles Cerankosky - Northcoast Research Partners LLC Stephen East - Wells Fargo Securities LLC Ivan M. Marcuse - KeyBanc Capital Markets, Inc. John Roberts - UBS Securities LLC Jacob Schowalter - Seaport Global Securities LLC Benedict Shim - Wolfe Research LLC Christopher Silvio Perrella - Bloomberg LP (Research) Dmitry Silversteyn - Longbow Research LLC Eric Bosshard - Cleveland Research Co. LLC David Wang - Morningstar, Inc. (Research) Richard O'Reilly, CFA - Revere Associates

Good morning. Thank you for joining The Sherwin-Williams Company's review of Fourth Quarter and Full-Year 2016 Results and Expectations for 2017. With us on today's call are John Morikis, President and CEO; Al Mistysyn, CFO; Jane Cronin, Senior Vice President, Corporate Controller; and Bob Wells, Senior Vice President, Corporate Communications. This conference call is being webcast simultaneously in listen-only mode by Issuer Direct via the Internet at www.sherwin.com. An archived 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 Wednesday, February 15, 2017 at 5:00 PM Eastern Time. This conference call will include certain forward-looking statements as defined under US Federal Securities Laws with respect to sales, earnings and other matters. Any forward-looking statements speaks only as of the day on which such statement is made, and the company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A full declaration regarding forward-looking statements is provided in the company's earnings release transmitted earlier this morning. After the company's prepared remarks, we will open the session to questions. I will now turn the call over to Bob Wells. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Jessie. Good morning, everyone. In the interest of time, we've provided some balance sheet items and other selected financial information on our website, www.sherwin.com, under Investor Relations, January 26 Press Release. Beginning with our fourth quarter, consolidated sales increased $178 million or 6.8% to $2.78 billion due primarily to higher paint sales volumes through our paint stores and the impact of a change in revenue classification related to third-party service revenue and related costs. For the full year, consolidated sales increased $516.3 million or 4.6% to $11.86 billion. The change in revenue classification increased sales 2.2% in the fourth quarter and 1.1% for full year 2016. Unfavorable currency translation decreased consolidated net sales 0.9% in the quarter, and 1.4% for the full year. Consolidated gross profit in the fourth quarter increased $66.2 million or 5% to $1.38 billion. Gross profit for the year increased $363 million or 6.5% to $5.92 billion. Consolidated gross margin in the fourth quarter was 49.9% compared to 50.8% in the same period last year. Adjusting for the change in revenue classification, comparable gross margin in the fourth quarter would be approximately 51%. For the year, consolidated gross margin increased to 50% from 49% last year. Again, adjusting for the revenue reclassification, full year gross margin would be 50.4%. Selling, general and administrative expense increased $53.5 million or 5.4% to $1.04 billion in the fourth quarter, but decreased as a percent of sales to 37.6% from 38.1% in the same period last year. For the full year SG&A expense increased $246 million or 6.3% to $4.16 billion, an increase as a percent of sales to 35.1% from 34.5% in 2015. Without the change in revenue classification, SG&A as a percent of sales was 38.2% in the quarter and 35.4% for the year. SG&A in both the quarter and full year included acquisition-related expenses totaling $9.2 million and $58.4 million, respectively. Interest expense for the quarter increased $23.8 million to $43.3 million. For the year, interest expense increased $92.3 million to $154.1 million. The majority of this increase was acquisition-related interest expense. Consolidated profit before tax in the quarter increased $6.8 million or 2.3% to $304 million, which included approximately $34.5 million in acquisition-related expenses. For the full year, consolidated profit before tax increased $46.3 million or 3% to $1.6 billion, including approximately $133.6 million in acquisition-related expenses. Unfavorable currency translation reduced profit before tax $4.1 million in the quarter and $21.3 million for full year compared to 2015. Our effective income tax rate for the fourth quarter decreased to 33.2% from 33.4% last year and decreased to 29% for the full year compared to 32% in 2015. Comparable effective tax rate, excluding the effect of the reduction in the income tax provision, would be 34.8% in the quarter and 32.3% for full year. Diluted net income per common share for the fourth quarter increased 1.9% to $2.15 per share from $2.11 per share last year. The $2.15 included $0.03 accretion from the change in accounting standard and $0.22 dilution from acquisition-related expenses. Diluted net income per common share for 2016 increased 7.5% to $11.99 per share from $11.15 per share in 2015. The $11.99 includes $0.40 accretion from the change in accounting standard and $0.86 dilution from acquisition-related expenses. Unfavorable currency translation decreased earnings per share by $0.03 per share in the quarter and $0.14 for the full year. Our results in the quarter and full year includes individually-significant non-operating items consisting of environmental expense, a gain on the sale of assets and goodwill and trademark impairment charges. The net after-tax impact of these items increased diluted earnings per share approximately $0.03 in the quarter and had no effect on earnings per share for the full year. Let me take a few minutes now to break down our performance by segment. Sales for our Paint Stores Group in the fourth quarter increased $163.5 million, or 9.8%, to $1.84 billion. For the year, net sales increased 8.1% to $7.79 billion. Comparable store sales, sales by stores open more than 12 calendar months increased 5.5% in the quarter and 5.3% in the year. Paint Stores Group sales increase was due primarily to higher architectural paint sales volume across all customer segments, plus the impact of the change in revenue classification. The change in revenue classification is not reflected in comparable store sales. Regionally in the fourth quarter, our Southeastern division led all divisions, followed by Canada, Southwest division, Midwestern division and Eastern division. Sales and volumes were positive in every division. Fourth quarter segment profit increased $25.7 million, or 8.1%, to $341.9 million due primarily to higher year-over-year paint sales volumes. For the full year, profit increased $189.1 million, or 13.2%, to $1.62 billion. The increase in segment profit for the year resulted from higher paint sales volumes that were partially offset by higher SG&A expenses. Excluding the change in revenue classification, segment operating margin for the fourth quarter increased 30 basis points to 19.2% from 18.9% last year. Paint Stores Group operating margin for full year 2016 excluding the revenue reclassification increased 130 basis points to 21.2% from 19.9% last year. Turning now to the Consumer Group. Fourth quarter external net sales increased $1.3 million or 0.4% to $315.9 million. For the year, Consumer Group sales increased $6.4 million, also 0.4% to $1.58 billion. In both the quarter and full year, higher volume sales to most of our Consumer Group's retail accounts was partially offset by unfavorable foreign currency translation that decreased net sales 1.3% in the quarter and 1.1% in the year. Segment profit for our Consumer Group in the fourth quarter increased $4 million or 8% to $54.9 million. For the year, segment profit increased $10.4 million or 3.3% to $319.2 million. Segment profit as a percent of net sales for the quarter increased to 17.4% from 16.2% last year. For the year, segment operating margin increased to 20.1% from 19.6% last year. Most of the improvement in both fourth quarter and full-year segment profit margin was from volume-driven operating efficiencies and good SG&A expense control. For our Global Finishes Group, fourth quarter net sales in US dollars were flat to last year, at $455 million. Full year sales decreased 1.4% to $1.89 billion. Unfavorable currency translation decreased sales in US dollars by 1.7% in the quarter and 2.6% in the year. Stated in US dollars, Global Finishes Group segment profit in the fourth quarter increased $11.4 million or 22.6% to $62 million from $50.6 million last year. For the full-year, segment profit increased $37.1 million or 18.4% to $239 million, due primarily to good expense control and lower raw material costs that were partially offset by unfavorable currency translation. Unfavorable currency reduced segment profit $800,000 in the quarter and $5.8 million in the year. As a percent of net sales, segment profit improved to 13.6% in the fourth quarter compared to 11.1% in the fourth quarter last year. Operating margin for the year increased to 12.7% compared to 10.5% in 2015. For our Latin America Coatings Group, net sales in the quarter increased $13.1 million or 8.3% to $171.8 million. Full-year net sales decreased $44.1 million or 7% to $586.9 million, due primarily to unfavorable currency translation and lower volume sales, partially offset by higher year-over-year selling prices. Currency translation decreased sales in U.S. dollars by 6.7% in the quarter and 13.5% in the year. Stated in U.S. dollars, Latin America Coatings Group recorded a loss of $7.8 million in the quarter compared to a profit of $2.8 million last year. For the year, Latin America Coatings Group reported a loss of $17.4 million compared to a profit of $18.5 million in 2015. Segment profit in both the quarter and year was adversely affected by goodwill and trademark impairment charge of $10.7 million, increasing raw material costs and unfavorable currency translation that were all partially offset by selling price increases. Unfavorable currency decreased segment profit $3.2 million in the quarter and $14.2 million in the full year. As a percent of net sales, segment operating profit was negative 4.5% in the quarter compared to a profit of 1.8% last year and negative 3% for the full year compared to a profit of 2.9% in 2015. That concludes our review of our operating results for the fourth quarter and full year 2016. So, let me turn the call over to John Morikis, who will make some general comments and highlight our expectations for 2017. John? John G. Morikis - The Sherwin-Williams Co.: Thanks, Bob. Good morning, everyone. Thanks for joining us. 2016 was a momentous year for Sherwin-Williams. Against the backdrop of our 150th year in business, we transitioned the role of Chief Executive Officer at the beginning of the year and put plans in place to transition our Chief Financial Officer role at year end. In March, we announced our intent to acquire Valspar, the largest, most transformational acquisition in our company's history. And throughout the year, we worked to secure regulatory approval for the deal and to define what this new combined organization would like post integration. With change comes uncertainty and in financial markets, uncertainty often leads to volatility. 2016 was a volatile year for Sherwin-Williams' stock. We opened the year at $257 a share, saw a mid-year high of $312, and an inter-year low of $239. Some of the share price volatility was understandably caused by quarter-to-quarter volatility in our results, while some appeared to be driven by market speculation. Through all of the change, uncertainty, volatility and speculation, our confidence in our business model, our strategy and the ability of our people to execute at a high-level and generate high returns never wavered. Our full-year results for 2016 include expenses related to the Valspar acquisition, and two accounting changes adopted during the year that affected our revenues and tax rate. If you back out the impact of these items, our core results for the year met or exceeded every expectation we set back in January. Consolidated sales increased 3.5% to $11.72 billion. Consolidated gross margin was 50.5%, an increase of 150 basis points over full-year 2015. Operating profit improved 10.8% to $1.82 billion. Profit before tax grew 11.6% to $1.73 billion, an increase of more than 100 basis points as a percent of sales. EBITDA eclipsed $2 billion for the first time in our history. Net income increased 11% to $1.17 billion. And earnings per share increased 11.7% to $12.45 per share; noteworthy, considering our full-year EPS last year included $0.53 in favorable LIFO inventory adjustments, while LIFO was slightly unfavorable in 2016. Each of these results represent a new record high for the company. Architectural paint sales to our paint stores picked up momentum in the fourth quarter with every customer segment generating positive volumes. Not surprisingly, the tightness in the labor market appears to be less acute in the seasonally smaller quarters. As a result, architectural paint sales to contractors accelerated to a high-single-digit growth rate in the quarter, aided by a backlog of projects from earlier in the year. Sales to residential repaint contractors rebounded to a double-digit growth rate, marking the 11th quarter of double-digit growth in the past 13 quarters. Sales of protective and marine coatings were negative in the quarter, but the impact on Paint Stores Group sales were muted due to seasonality. In the fourth quarter, Paint Stores Group's operating margin on incremental sales was greater than 24%, a strong performance in light of the roughly $30 million LIFO benefit they received in fourth quarter last year compared to a LIFO expense of $2 million in fourth quarter this year. During the quarter, we opened 39 net new stores, bringing our full year store opening total to 94 net new locations and our total store count at year-end to 4,180 stores in the U.S., Canada, and the Caribbean. We remain confident that our next milestone of 5,000 locations in North America is realistic, and we intend to add another 90 to 100 stores this year. We anticipated a stronger sales performance from Consumer Group coming into the fourth quarter. The weakness we experienced in the third quarter in our European business, due, in part, to currency devaluation, carried over into the fourth quarter. Despite the weaker than expected sales results, Consumer Group continued to manage operating expenses well and showed good progress on margins in the quarter. For the second consecutive quarter, Latin America Coatings Group reported positive revenue growth, as stronger volumes and positive pricing overcame a currency headwind of nearly 7% in the quarter. Segment profit also showed improvement, overcoming rising raw material costs and the effect of currency devaluation. Without the $10.7 million goodwill impairment in the quarter, the segment earned $2.9 million in profit for the quarter. Our Global Finishes Group once again did a commendable job of managing both gross margin and SG&A in the quarter, resulting in a cycle-high 13.6% operating margin, a 250 basis point improvement compared to fourth quarter last year. We continue to see positive demand momentum in some of our industrial coatings businesses in Europe and Asia. 2016 was another strong year in terms of cash generation. Net operating cash for the year was $1.31 billion, well ahead of our target of 10% of net sales, with fourth quarter accounting for about $344 million of the total. Net working capital was a use of cash, finishing the year at 10.7% of sales compared to 8.6% at year-end 2015. Free cash flow, which is net operating cash less CapEx and dividends, was $757.5 million compared to $953.5 million (22:11) last year. Our capital expenditures for the year totaled $239 million. Depreciation was $172.1 million, and amortization was $25.6 million. In 2017, we anticipate capital expenditures of approximately $231 million, depreciation of $175 million to $185 million, and amortization of about $30 million. Capital spending will continue to run higher than normal in 2017 as we continue to invest in capacity, systems and new stores. Our cash balance at the close of 2016 was $889.8 million compared to $205.7 million at year-end 2015. As we indicated when we announced the Valspar acquisition, we intend to continue to build cash on our balance sheet over the course of the coming year to reduce total borrowings required to finance the deal. Therefore, we made no open market purchases of our common stock for treasury during the quarter and year, and we'll suspend share repurchase activity again in 2017. On December 31, we had remaining authorization to acquire $11.65 million shares. We're also temporarily modifying our practice of paying 30% of prior year EPS in cash dividend. This year at our February meeting of the Board of Directors, we will recommend approval of an annual dividend of $3.40 per share, an increase of $0.04 over 2016. Before I close with our outlook for 2017, let me briefly comment on our Valspar acquisition progress. Based on our ongoing discussions with the FTC, we now expect a divestiture will be required to gain approval to complete the acquisition, and we are actively working toward that objective. The expected divestiture falls well below the $650 million revenue threshold and we expect to negotiate the divesture and complete the Valspar transaction within 90 days at a price of $113 per share. Looking ahead to 2017, the demands for paint and coatings in most domestic markets continues to look positive. Growth in residential starts and existing home turnover was sufficient to drive 2% to 3% growth in US architectural industry volume throughout 2016, and the outlook for 2017 is comparable. Although contracts for new, non-residential projects slowed somewhat in 2016. It was still a solid year in absolute square footage, which bodes well for the paint demand in the segment. Outside the US, we are increasingly optimistic on demand conditions across many regions, but we remain cautious in our outlook on many currencies. Our raw material basket has many moving parts, but, in total, we believe, we are likely to see higher year-over-year input costs in 2017. The recent uptick in the price of crude oil could result in upward pressure on the petrochemical side of the raw material basket, but these commodities will not necessarily move in a linear relationship with crude. Most of the raw material basket inflation will come from TiO2. Stronger, global demand for high-grade chloride TiO2, and relatively tight inventory level has prompted most producers to announce additional price increases effective in the first and second quarters of 2017. It remains to be seen how much, if any, of these increases will actually take effect. Based on all of these factors, we expect average year-over-year raw material cost for the paint and coatings industry to be up in the low-single digits range in 2017. Our outlook for the first quarter 2017 is for consolidated net sales to increase in the mid- to high-single-digit percentage range compared to last year's first quarter. With sales at that level, we estimate diluted net income per common share in the first quarter will be in the range of $1.45 to $1.55 per share compared to a restated $1.75 per share earned in the first quarter of 2016. First quarter 2017 earnings guidance includes approximately $0.69 per share in Valspar acquisition cost, and an $0.11 increase in EPS related to the decrease in the income tax provision. As a reminder, first quarter 2016 earnings per share included $0.24 expense related to the Valspar acquisition. For the full year 2017, we expect net sales will increase in the mid-single-digit percentage range compared to full year 2016. With annual sales at that level, we estimate diluted net income per common share for 2017 will be in the range of $13 to $13.20 per share compared to $11.99 in 2016. Full year 2017 earning guidance includes approximately $0.80 in Valspar acquisition cost and an increase in EPS of approximately $0.20 per share related to the decrease in the income tax provision. Full year 2016 earnings per share included $0.86 per share in acquisition-related expense, partially offset by a $0.40 EPS increase from the reduction in income tax provision. Again, I'd like to thank you for joining us this morning. And, now, we'll be happy to take your questions.

Thank you. Ladies and gentlemen, at this time, we will be conducting the question-and-answer session. Our first question is coming from the line of Arun Viswanathan with RBC Capital Markets. Please proceed with your question. Arun Viswanathan - RBC Capital Markets LLC: Good morning. Thank you. I guess I just wanted to understand some of the guidance commentary for 2017. Maybe you can help me understand the mid-single-digit sales commentary, how that breaks out between maybe your volume expectations and your price given that you do have a price initiative that you announced on the last call and potentially new stores and the revenue recognition as well. Thank you. Allen J. Mistysyn - The Sherwin-Williams Co.: Hi, Arun. This is Allen Mistysyn. When you look at our full year sales guidance, the price we have in there, as you know, Paint Stores Group announced the 3% to 5% price increase effective December 1. We expect that to be effective similar to previous price increases, maybe even a little bit better considering the last price increase we had was first quarter 2014. So, you can expect around a 75% effectiveness there. When you look at volume, Paint Stores Group continues to take share, we believe, and we expect – you can expect our sales to roll out similar to how our 2016 sales rolled out. And what I mean by that is when we say mid-single digit, typically our Paint Stores Group is in the high end of that or maybe even a little above that. New stores, as John mentioned in his comment, being 90 to 100. You can consider that similar impact as 2016, which is roughly 1% on Paint Stores. And then one other thing I would say, on revenue reclass, because we had a half year revenue reclass in 2016 and the impact was around 1%, full year 2017 we'd have a similar impact. And then the final thing I would mention on our sales guidance is we do still believe FX will be a headwind but just not to the effect it was in 2016. Arun Viswanathan - RBC Capital Markets LLC: Thanks, Al. And just as a follow up, you've also given a range for Q1. I think there's some concerns out there just given that you are facing a pretty large comp year-over-year, given that you did 9.4% in same-store sales in Q1 of 2016. Can you just describe kind of the market environment and what's embedded in your sales guidance? Do you expect a positive comp in Q1, and if so, what gives you the confidence that you could achieve that? Thank you. John G. Morikis - The Sherwin-Williams Co.: Yeah. Arun, I'd say what gives us the confidence is the continued discussions that we have with our customers and we've talked about over the last couple of quarters the impact of the labor constraints on our contractors, and I've referenced a few times the comments that we have continuously heard about their ability to do more work if they had more labor. And I think it's clear now to see that that's most prevalent in the second and third quarter which are their busiest quarters. So, they were running at capacity. So, coming into the fourth quarter with less labor constraint and a heavy backlog of work, they clearly had a better performance and we expect that to continue as we go into the first quarter. And we're working very hard as always to continue to position ourselves to be the supplier of choice when they're making their decision on which supplier. Robert J. Wells - The Sherwin-Williams Co.: Also, as a reminder, the revenue reclassification hits stores the greatest and they will have that in the first and second quarter. Arun Viswanathan - RBC Capital Markets LLC: Right. Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Arun.

Thank you. Our next question is coming from the line of Ghansham Panjabi with Robert W. Baird. Please proceed with your question. Matthew T. Krueger - Robert W. Baird & Co., Inc.: Hi. Good morning. This is actually Matt Krueger sitting in for Ghansham. How are you doing today? Robert J. Wells - The Sherwin-Williams Co.: Hey, Matt. John G. Morikis - The Sherwin-Williams Co.: Great. How are you? Matthew T. Krueger - Robert W. Baird & Co., Inc.: Good. Good. Can you provide the same-store sales breakdown for 4Q 2016 in terms of volumes for architectural paint, volumes for non-paint end markets and then any contribution from the price increase? Allen J. Mistysyn - The Sherwin-Williams Co.: Yeah. Yes, Matt. So, when you look at the sales increase in the fourth quarter, it's really minimally impacted by the price increase as December is our smallest month in that quarter. John G. Morikis - The Sherwin-Williams Co.: Yeah. I would say that if you look at the effective day, the first of December roll in the smallest month, and as Al mentioned, we're rolling this in. So, we expect to have good effectiveness in the rollout of the price increase, but it would certainly have been negligible in the fourth quarter. Matthew T. Krueger - Robert W. Baird & Co., Inc.: Great. And then any breakdown between volumes for the non-paint end markets versus volumes for the architectural paint? Any turn in oil and gas related markets, things like that? Allen J. Mistysyn - The Sherwin-Williams Co.: John, I'll take the non-paint sales. We feel they performed fairly well throughout the year. We saw – we did see an uptick in the fourth quarter similar to what we saw in our volumes. But I think overall, we're pretty happy with the performance of the non-paint sales, which includes, by the way, spray equipment. John G. Morikis - The Sherwin-Williams Co.: Right. And on the P&M, Protective & Marine side, it continues to be a drag. Obviously, much less of a drag as we go into more seasonal period. But that's largely driven by our strong position in our petrochem. We're continuing to focus on that business. There's still a lot of opportunity for us to grow, but we're also working, I think, quite well given the efforts on the team pivoting to other segments. So, we're not waiting for that segment, the petrochem, to recover as a means of driving our performance. We're working very hard in these adjacent markets, other segments, and we're really starting to see some good penetration there. It takes some time before we can over that petrochem number though. Matthew T. Krueger - Robert W. Baird & Co., Inc.: Got it. And then switching over to the acquisition front. How should we think about the divested Valspar assets as it relates to impacting the synergy numbers that you previously outlined when the transaction was announced? John G. Morikis - The Sherwin-Williams Co.: Well, we're obviously very limited in what we can comment on regarding this. We're very pleased with the progress we're making. The business that to be divested has been identified and we're working through the FTC with that, to that process. But we're really not going to expand to much greater than that right now. We mentioned that it's well below the $650 million. But right, now we're working closely and, I think, quite well with the FTC, and we want to make sure that we respect the boundaries there. Matthew T. Krueger - Robert W. Baird & Co., Inc.: Great. That's helpful. Thank you very much. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Matt.

Thank you. The next question is coming from the line of Christopher Parkinson with Credit Suisse. Please proceed with your question. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Thank you. As we hit further into 2017 and in the context of recent housing and mortgage apps data, can you just give us a sense on the general composition and parse out the various buckets of R&R activity, and how you think this should flow into the architectural volumes of both PSG and consumer and, I guess, consequently guidance? And then also, do you have any kind of updated assumptions on labor availability as we head throughout the year? Thank you. Robert J. Wells - The Sherwin-Williams Co.: Yes, Chris, this is Bob. I'll take the first half of that, and that is our outlook for the repaint market, on both the residential and commercial side, is very positive for 2017. On the residential side, obviously, existing home turnover drives repaint activity but only about 15% to 20% of the market is driven by actual turnover, and a significant share of the market is driven by home values which, obviously, have been very positive. I just read this morning, 58 consecutive months of rising home prices. So, that is certainly driving the repaint and remodeling side of the market. We expect mid-single digit to high-single digit growth in the repaint/remodel side of the market in the coming year. And as a reminder, that's 80% of residential industry gallon volume. So, it's a significant piece of the market, and we expect very good momentum in that piece. On the non-residential side, we are seeing some pickup in property management, property maintenance activity. It's very likely, as we see more churn in office space and apartment, that we'll see that pickup but you've got to see more churn. Churn has been slow in 2015 and 2016. John G. Morikis - The Sherwin-Williams Co.: Regarding labor, I would say that this has not been the second consecutive year where our contractors has faced a challenging, if you will, Q2 and Q3 as it relates to labor. And we've been talking to them, and I do actually believe their confidence in the market is pushing them to be more aggressive in hiring additional labor. And I think there have been some questions as the business has unfolded about the stability or the firmness of the market and I think there's obviously a very growing level of confidence. And I think we'll see our customers be far more active and trying to bring more labor on as we go into the painting season this year. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Great. And just a quick follow-up on PSG as it pertains to the price increases. I think most people's understanding that obviously we'll start off in the DIY crowd and some shorter term contractors. Can you just give a little more guidance on kind of the cadence of how you think they will flow through PSG results based on the breakdown of sales? Thank you. Allen J. Mistysyn - The Sherwin-Williams Co.: Chris, if you think about past price increases, what you'll typically see and we'll see that again is a slight downtick in our gross margin. And then, as the effectiveness becomes – as we come more effective through our customers in 90 days, 180 days, you'll start seeing that turnaround and that's what I would expect in this price increase as well. John G. Morikis - The Sherwin-Williams Co.: But I'd also add that the effectiveness is going to be a little bit stronger. Given the rate of growth in our residential repaint business, there are some opportunities with mix to offset some of that as well. So, we actually have very good confidence in the fact and, again, over repeating it here, but we've not had a price increase since the first quarter of 2014. The phase-in will be mixed based on customer, type of customer, types of projects, but we're out there working hard. You don't do a price increase on December 1. It's actually we work with our customers around the year providing those solutions to them that help them be more productive in their business. And so, if we're more successful in helping them, then it's a better discussion, and that's what we've been working on for many years here. Christopher S. Parkinson - Credit Suisse Securities (USA) LLC: Great substance. Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Chris.

Thank you. Our next question is coming from the line of Steve Byrne with Bank of America Merrill Lynch. Please proceed with your question. Steve Byrne - Bank of America Merrill Lynch: Yes. John, you mentioned there's backlog of projects kind of came forward in the fourth quarter. Would you say that that drove a mix shift towards the pro market versus DIY and did you gain share from the other channels, would you say, in the PSG Group? John G. Morikis - The Sherwin-Williams Co.: Well, I think it's early to comment on gaining shares from other channels. I'd say, given information that's out available in the market right now, we're feeling good about the momentum we have. It's certainly not complacent. I mean, we're driven to get better every day. But I would say that there's clearly been some shift from DIY to the contractor-based business, if that was your question. But I'd also say that, as I mentioned, there's clearly been more demand than there was labor to be able to satisfy that, and that clearly shifted into the fourth quarter. Steve Byrne - Bank of America Merrill Lynch: And just on that last point, are your pro-contractor customers telling you that they just needed to be more aggressive in hiring or is it actually difficulty in finding that labor pool? John G. Morikis - The Sherwin-Williams Co.: I think it's a little bit of both. I think it's a little bit of both. There was a level of confidence that, I think, the teams that we're getting – we've gotten over the hill on, but there clearly is a demand or desire to hire more than what they've been successful in hiring thus far. Steve Byrne - Bank of America Merrill Lynch: Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Steve.

Thank you. Our next question is coming from the line of Robert Koort with Goldman Sachs. Please proceed with your question. Christopher Evans - Goldman Sachs & Co.: Hi, everybody. This is Chris Evans on for Bob. Robert J. Wells - The Sherwin-Williams Co.: Hi, Chris. Christopher Evans - Goldman Sachs & Co.: Just, regarding the DIY consumer, just kind of curious if the weaker results are sort of across the industry and the third quarter continued in the fourth and whether that was reflected in Paint Stores Group and Consumer? John G. Morikis - The Sherwin-Williams Co.: We actually had a nice rebound in the fourth quarter DIY. So, our sales were up in the fourth quarter, not quite as high as our – some of our contractor segments. We had really, really strong double-digit gains in res repaint. The other segments in the wholesale were strong and DIY would have been amongst them. Christopher Evans - Goldman Sachs & Co.: Got you. And then I guess in regards to your guidance for 2017, you talk about some of the pros, some of the positive that you're going to be impacted by the pricing and kind of the market share gains. What are the offsets that might be impacting you in 2017 that you guys will be concerned about? Allen J. Mistysyn - The Sherwin-Williams Co.: I wouldn't say we're concerned. I think when you look at the last two years on how our comp store sales have trended, our biggest quarters are still on second and third quarter. Although we're working hard on programs and plans with our customers to get on top of that in the second and third quarters, it still remains to be seen how effective that is and if there's other changes that occur, whether it's immigration policy or whatever that might impact us. So, that would be the only thing that would give us any pause. Christopher Evans - Goldman Sachs & Co.: Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Chris.

Thank you. Our next question is coming from the line of Duffy Fischer with Barclays. Please proceed with your question. Duffy Fischer - Barclays Capital, Inc.: Yeah. Good morning, fellows. Robert J. Wells - The Sherwin-Williams Co.: Hi, Duffy. Allen J. Mistysyn - The Sherwin-Williams Co.: Hi, Duffy. Duffy Fischer - Barclays Capital, Inc.: A question around with the deal feeling imminent, have you guys been able to narrow what you think the range will be between kind of a GAAP accretion and a cash accretion with the deal, so basically what's the step up going to be in that increased amortization? And then, along those same lines, are you planning to talk about a cash EPS or will you talk about a GAAP EPS once the deal closes and goes forward? Allen J. Mistysyn - The Sherwin-Williams Co.: We have not gotten to a narrowed-down range on the impact of the valuation. And I think, Duffy, we would make sure that it's clear. We'd give you enough information and the investors enough information to get to a cash EPS, so what the incremental impact on amortization/depreciation of the step-up accounting is, and we want to be as transparent as we can of that. Duffy Fischer - Barclays Capital, Inc.: Okay. And then, one of the arguments for architectural being so good is the argument around the footprint and it's very hard to come in without an existing base. But we did see an Asian competitor, kind of a non-incumbent in North America, buy a North American competitor here recently. Wondering if you could just comment on why that might be that they were able to do that? And with deeper pockets, would that North American base now provide the ability for them to grow more into the architectural space? John G. Morikis - The Sherwin-Williams Co.: Well, I'd say that Dunn-Edwards is a terrific company and one that we have long admired. And the reason we've admired them for such a long time is they've got quality products, quality people and a terrific, as you mentioned, footprint. They've been very good competitors. And I don't expect that any of our people on the ground there ever took Dunn-Edwards as a light competitor or someone that you didn't have to be very careful of and work hard to try to grow our business and maintain the business that we had. So, yeah, we respect that there's another competitor in the market. But we've got great confidence in our model. We've got great confidence in our strategy. And we have found that the greatest success we have is when we focus on our execution. And they've always been a good competitor out there. We expect they'll continue to be a good competitor. But while we'll watch what they do, we're going to be really focused on outstanding execution of our strategy. Robert J. Wells - The Sherwin-Williams Co.: And let me add to that, Duffy, that your point about the store base or the store concentration is well taken. But as you know from our business, it doesn't require a lot of capital to expand a store base. So, we don't view a competitor like Dunn-Edwards as ever having been capital constrained in their ability to grow their store count, so we don't necessarily see this new owner as being a tougher competitor from that regard. Duffy Fischer - Barclays Capital, Inc.: Terrific. Thanks, fellas. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Duffy.

Thank you. Our next question is coming from the line of Don Carson with Susquehanna Financial. Please proceed with your question. Don Carson - Susquehanna Financial Group LLLP: Yes. Thank you. John, as you've had time to meet with your Valspar counterparts, to the extent you can and you've gone over synergy targets, how are you feeling about that $280 million in synergies because, again, it struck me that particularly on logistics and manufacturing, that you were somewhat conservative on your outlook for synergies. John G. Morikis - The Sherwin-Williams Co.: Well, we feel great about them. We're not going to raise them here. I mean, we're still working through a number of blueprinting and kind of our approach to the combined business. We feel very good about them. We're excited about it, wonderful people, wonderful products, great customers. There's great complement to our business. We're very excited. But right now, that's our target. And as we get in it, to Al's point, transparency is important. We understand that. But right now, that's our goal, that's where we're focused on. Don Carson - Susquehanna Financial Group LLLP: I had a follow-up on PSG. You've got one price increase on the table. If you do see some of the second round, if you had two price increases, if oil continues to go up, what are the conditions that would cause you to put through a second price increase later on in the year? John G. Morikis - The Sherwin-Williams Co.: I think you should take great confidence in our previous actions when – we don't think that we're in a similar environment, but in the not too distant past here when raws were really, I'll call it, out of control, they were growing very aggressively, and we demonstrated the discipline we have to go out and put price increases in the market, not by choice, but given the ability that we have to continue to bring value to our customers and help them, we were successful in doing that. And we don't think it's anywhere near that situation here in the current environment, but if we found ourselves in that environment, I think we've demonstrated the determination to do that and, at the same time, our ability to demonstrate the value to our customers to maintain those customers through that difficult time. Don Carson - Susquehanna Financial Group LLLP: Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Don.

Thank you. Our next question is coming from the line of Vincent Andrews with Morgan Stanley. Please proceed with your question. Matthew Gingrich - Morgan Stanley & Co. LLC: Hey, guys. This is Matt Gingrich on for Vincent. I'm just curious how you think about the quarterly cadence of the expected low-single-digit increase in 2017 raw material costs. And specifically, will the headwind be any more announced in the first quarter than the balance of the year given the comp against the trough TiO2 environment? Robert J. Wells - The Sherwin-Williams Co.: Yeah. Good question, Matt. Because – I think it depends on what happens to the price increases in TiO2 nominated for the first and second quarter. If you look back at 2016, first quarter was the trough. So, we started seeing TiO2 inflate beginning in the second quarter, which means that the history is going to start to rise as we go through 2017. It remains to be seen whether TiO2 inflation rises at the same pace as the comp or stronger or less. At this point, we think that most of the low-single-digit inflation for 2017 year-over-year is going to be driven by TiO2. We suspect given inventory levels right now and the fact that fourth quarter was actually a pretty busy quarter for them, that they're going to get likely a little traction on the price increases that they've nominated. But again, that remains to be seen. And I think you can model raw material costs at a low-single-digit rate pretty much across all four quarters. Matthew Gingrich - Morgan Stanley & Co. LLC: And then on SG&A, what are your expectations there in terms of the promotional environment perhaps moderating on a year-over-year basis, 2017 versus 2016? Allen J. Mistysyn - The Sherwin-Williams Co.: I think if you look at our guidance and think about with the raw material price increases in that – let me frame it this way. Our improvement in operating margin is not going to come from as big a gross margin improvement as we've seen over the last few years. So when you look at SG&A, we're going to get SG&A leverage to hit that EPS guidance. And we set ourselves up, I think, fairly well. We did some things in the fourth quarter to get us in a position to do that. You saw that in our leverage we got in our SG&A on the fourth quarter. And I don't think the environment, promotional activity or that will be any different... John G. Morikis - The Sherwin-Williams Co.: No. That won't be affected. I mean, we're going to continue to do the right things to reach out to our customers. But to Al's point, we clearly try to remain disciplined in our approach to SG&A. So, we'll be managing the SG&A and continuing to reach out to our customers. Matthew Gingrich - Morgan Stanley & Co. LLC: Great, thanks, guys. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Matt.

Thank you. The next question is coming from the line of Kevin McCarthy with Vertical Research Partners. Please proceed with your question. Matthew DeYoe - Vertical Research Partners, LLC.: Hello, everyone. It's Matt DeYoe on for Kevin. Robert J. Wells - The Sherwin-Williams Co.: Hi, Matt. Matthew DeYoe - Vertical Research Partners, LLC.: Just wanted to ask, Paint Store contribution margins look to have moved higher sequentially, but we're kind of still below that mid-30% range that I've kind of think is more normal. I know part of that's probably due to revenue reclassifications, but can you kind of discuss what's needed to turn that back around and when do you anticipate getting back to those prior mid-30% levels. Allen J. Mistysyn - The Sherwin-Williams Co.: Matt, what I would point you to is we felt very good about Paint Stores Group year and they had a strong year. When you look at their incremental margin ex the rev reclass, it was 42% for the year, and that came through primarily gross margin expansion. In the quarter, it was a little bit over 24%. And as John commented in his opening remarks, that did include a LIFO benefit in our fourth quarter last year as a comparison. We didn't have that same benefit this year. So, I think the 42% is probably higher than we would expect going forward but certainly in line with where we would expect. Matthew DeYoe - Vertical Research Partners, LLC.: Okay. And then you touched briefly on this, but just one more on the Protective & Marine business. When do you kind of expect that business should flatten out first, I guess, and then return to growth just given the rebound we're seeing in activity? John G. Morikis - The Sherwin-Williams Co.: Yeah. We are starting to see some rebound, you're right, and that combined with the pivoting into other areas that I'd mentioned, we have high expectations of that team. And so when do we expect to see it, it can't come soon enough. We're pushing hard and we're counting on that team to deliver. So, we're working on that very hard right now. Matthew DeYoe - Vertical Research Partners, LLC.: Okay. Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Matt.

Thank you. The next question is coming from the line of Nils Wallin with CLSA. Please proceed with your question. Nils-Bertil Wallin - CLSA Americas LLC: Yes. Good morning. And thanks for taking my question. First of all is on TiO2 but little differently. Have you thought over the next two years about your sourcing requirements and how you might change those if there was a border tax adjustment and it raised the cost of imported TiO2? Robert J. Wells - The Sherwin-Williams Co.: Yeah, Nils. I think and I'm not sure how much high-grade chloride TiO2 that is sold in the United States is produced in the United States. I do believe the vast majority of our sources are domestic. I think that may not be the same in the case of sulfate TiO2. I think a lot of that is imported. But chloride, we see sufficient capacity in the U.S. market to supply U.S. demand at the current growth rate. And growth rates in 2016 in the domestic market were probably mid-single digits, and we think that supply can grow in line with that rate of demand growth. Nils-Bertil Wallin - CLSA Americas LLC: Understood. And just on the Consumer Group, I think the commentary was that you saw a volume growth in all the different distribution channels, but that seems, particularly in the big box, seems to be a little bit dissident with what you've seen reported out of the big boxes. So, was the volume growth relatively the same across those distribution channels or how would you characterize the different channels in terms of that growth rate in consumer? John G. Morikis - The Sherwin-Williams Co.: I'd say that they were very similar. We, as mentioned, had a good fourth quarter in paint. The pressure that we felt was outside of the U.S., mainly the UK stain and sealer business. So, across most of our channels here in the U.S., I'd say we had a pretty good performance on paint on the consumer side. Nils-Bertil Wallin - CLSA Americas LLC: Thanks. I'll pass it along. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Nils.

Thank you. Our next question is coming from the line of Scott Rednor with Zelman & Associates. Please proceed with your question. Scott Rednor - Zelman & Associates: Hi. Good morning. Question on the Global Finishes. I think 12% to 13% or maybe 11% to 12% was kind of the prior goal that, John, you guys have communicated at an Analyst Day fairly recently. You guys are there and it hasn't come with a lot of volume growth. So, how should we think about that business going forward now that it's not really that small piece of the portfolio anymore? John G. Morikis - The Sherwin-Williams Co.: Well, you're right, and for the past two years, the group had benefited from the successful integration of those two acquisitions that we made in Europe, the Becker and Sayerlack, as well as the acquisition that we made in Asia, Inchem. And both of those acquisitions brought along scale, technology, and talent outside of the U.S. There's a team has really been working hard at driving the synergies in those acquisitions. And by the way, it will be the same teams that are actively involved in the Valspar integration. So, they've been doing a very good job from an integration standpoint. And to your point, the focus is on driving sales and growing market share. And I actually felt very good about the momentum that we have in some markets. In Europe, we're doing quite well and in some of the segments in Asia. The scale effect that we've experienced will continue. This will also benefit greatly from Valspar as those businesses come together. We'll have additional technology and a customer base to pursue. So, while we're pleased, obviously, with the improvement on the bottom line, we also know that it's absolutely critical that we drive the top line. So, the scale has helped. There's a lot of focus on growing market share going forward, and we've got confidence in that team and the ability to do that. Scott Rednor - Zelman & Associates: And then maybe switching transitions to the domestic contractors business. Is there anything you guys can do to help alleviate shortage of contractors, whether that's from the trade school or – I know you guys are probably developing products that we don't hear about, but is there anything bigger picture, John, that you guys can help with and probably with all the other manufacturers itself what's viewed to be a broad base shortage? John G. Morikis - The Sherwin-Williams Co.: Yes, there are and we're working on it, but we don't want to talk about that. Scott Rednor - Zelman & Associates: Okay. And then maybe just lastly, I'll defer. Al, can you just give us a sense of what the tax rate will look like in 2017, maybe in 1Q in 2017, I guess, with the income tax benefit? Allen J. Mistysyn - The Sherwin-Williams Co.: Yeah. I think when you look at our fourth quarter, we had some things in it, just the timing of discrete items and our full-year at 33% is consistent with prior. I think, our first quarter, the stock comp adjustment is our largest quarter. So, our core tax rate will be around the 32%, and you got to think about how that flowed this year and there'll be a few percentage points on that. Scott Rednor - Zelman & Associates: Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Scott.

Thank you. The next question is coming from the line of Chuck Cerankosky with Northcoast Research. Please proceed with your question. Charles Cerankosky - Northcoast Research Partners LLC: Good morning, everyone, and congratulations. Robert J. Wells - The Sherwin-Williams Co.: Good morning, Chuck. Charles Cerankosky - Northcoast Research Partners LLC: Nice finish to the year. Looking at this acquisition, you mentioned with the cash you had at the end of the year that you're going to apply to funding it. What can you tell us at this point perhaps what the initial debt load-in might be and might that be offset by some short-term investments that aren't included in your cash balance at the end of the year? Allen J. Mistysyn - The Sherwin-Williams Co.: So, on the debt, certainly our cash ended a little bit better than we thought it would. We had a strong cash quarter. The debt that we'll issue similar to what we've been talking about, Chuck, we would – any proceeds we get from the divestiture would go towards the reduction of that debt. And, I think, as you know, we had the treasury lock rates in place. We'll issue the debt as we get closer to closing of the acquisition. And I think, like I said, I think we'll be around that same number we've been talking about. Charles Cerankosky - Northcoast Research Partners LLC: Okay. And then if we look at the -- how should we think about the tax rate going forward? You're backing out the benefit of the accounting change. What would you offer as the underlying run rate for Sherwin's taxes? Allen J. Mistysyn - The Sherwin-Williams Co.: On the core tax rate, it'll be around the 32% that we've been running the last few years with... Charles Cerankosky - Northcoast Research Partners LLC: 32%? Allen J. Mistysyn - The Sherwin-Williams Co.: Yes, sir. 32%. Looking forward, Valspar has a much bigger presence outside the U.S. and as you would expect, that should be lower on the weighted of the two. Charles Cerankosky - Northcoast Research Partners LLC: All right. Thank you very much. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Chuck.

Thank you. The next question is coming from the line of Stephen East with Wells Fargo. Please proceed with your question. Stephen East - Wells Fargo Securities LLC: Well, thank you. Good morning, guys. John, you all sound pretty skeptical on the TiO2 additional pricing going through. Just wondered what your thoughts were on why at least sound that way that it probably won't. And then, if we could talk on the consumer DIY, what's the promotional environment you're seeing there that the fourth quarter picked up? And would your pricing through the Paint Stores have any halo effect at all through the retail channel? Robert J. Wells - The Sherwin-Williams Co.: Yes, Stephen. This is Bob. On the TiO2 issue, they kind of had a perfect storm at the end of the year. They were running mid-single-digit growth kind of throughout the year. And then at yearend, you saw our volumes in the fourth quarter, they had kind of a spike in demand that did not allow them to build inventory at the rate they normally would coming into 2017. So, there are strained inventory levels and that will keep utilization rates high and inventory levels fairly low going through the first two quarters, because those are the strong-demand quarters. And those are actually favorable market conditions for them. However, we think there's ample capacity in the market. So, the offset to that and to that kind of good environment for them, is that they're going to raise their operating rates. And if demand coming out of the gates is not robust in 2017, it's very likely that the pricing that they've announced for the first two quarters is going to, at least, break to some degree, if not entirely. John G. Morikis - The Sherwin-Williams Co.: And, Stephen, could you clarify for me, I want to make sure I understood your question on consumer fourth quarter and the halo effect. Can you help me understand your question? Stephen East - Wells Fargo Securities LLC: Yeah. Sorry, John. Just combining those a little bit. You had a better consumer segment DIY channel in the fourth quarter. I was wanting to know, one, what was the promotional environment like. And then, as you all push through your price hikes in your Paint Stores, would you see any halo effect to allow any pricing on the retail side, on the DIY home centers, et cetera? John G. Morikis - The Sherwin-Williams Co.: I don't see the halo effect on the store to the retail side. And on the consumer side – I'm sorry, on the promotional side, I don't think there was any significant shift at all on the consumer side. That team has been working very hard and we've been open about some of the traction that we've been gaining, kind of starting a little slower than what was expected and then over the last two years working to be able to more effective. And I think we're starting to see some of that traction pay off. Stephen East - Wells Fargo Securities LLC: Okay. And then, Latin America, just quickly, what was the trademark related to? And as you look at 2017, some of those of economies have started to recover. Are you all expecting volume gallonage growth in your forecast there? Allen J. Mistysyn - The Sherwin-Williams Co.: For the impairment, if you think about our Latin America Coatings Group, the high watermark in operating margin was about 10% in 2012. And over the past few years, they've been dealing with the economies that you talked about, the currency headwinds .An quite honestly, the sales and profit haven't been up to our expectations. With that, including 2016 and building off of that base, your sales and profit projections and the cash that it generates just didn't support the goodwill we had on the balance sheet. So, that's why we took the impairment. John G. Morikis - The Sherwin-Williams Co.: Yeah. And to your question about going forward, I'd say we clearly see that the investments are starting to pay off that we've been making with improved volume, and even the pricing actions that we've been able to experience. While we expect economic conditions to improve there, we also expect that they'll be choppy from quarter to quarter. Our teams are really working hard down there to position themselves favorably in the market. And we've been really doing, I think, some heavy lifting down there. But all these comes back together to the point that I take away, not only just in Latin America, but across the entire company, where we're continuing to grow sales and market share across many of our businesses, Latin America included. I think we're demonstrating the ability to improve the mix by providing that superior solution to those customers and the discipline to offset the input cost inflation with pricing that's needed. And so when you are converting sales to profit like we are, we're improving our return on sales and focusing on cash, not only in Latin America but around the company. It gives us confidence, in Latin America, here in the U.S. and around the world. Stephen East - Wells Fargo Securities LLC: Okay. Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Steve..

Thank you. Our next question is coming from the line of Ivan Marcuse with KeyBanc. Please proceed with your question. Ivan M. Marcuse - KeyBanc Capital Markets, Inc.: Hi. Thanks for taking my questions. Just got a couple of quick ones. First, what's the change in gross profit for your consumer – for your Paint Stores Group and for Consumer Group? Allen J. Mistysyn - The Sherwin-Williams Co.: The change in gross profit for Paint Stores Group was $62 million and the gross profit change for Consumer was $2 million. Ivan M. Marcuse - KeyBanc Capital Markets, Inc.: Okay. Thanks. John G. Morikis - The Sherwin-Williams Co.: I was going to say, Ivan, the Latin America was $2.5 million and Global Finishes Group was $1.1 million. (01:07:39). Ivan M. Marcuse - KeyBanc Capital Markets, Inc.: Great. And then – thanks for that. If you were to, I guess, gauge the percentage of your volume that goes in infrastructure, they'd be all in the Protective & Marine or would there be other channels to think about in terms of if we see an increase of infrastructure going forward, how that would impact you? John G. Morikis - The Sherwin-Williams Co.: It would largely be in our Protective & Marine. You'd see some in our Product Finishes as well. We would have maybe fabricators that might be tucked in onto that business. Ivan M. Marcuse - KeyBanc Capital Markets, Inc.: Great. And then Protective & Marine, that's roughly 15% of sales in terms of your Paint Stores Group? Robert J. Wells - The Sherwin-Williams Co.: Of Paint Stores Group, yes. But there's also a component in Latin America and a component in Global Finishes. But the domestic piece here, to your question, is Paint Stores Group. Ivan M. Marcuse - KeyBanc Capital Markets, Inc.: Great. Thanks. And then my last question. In terms of the tax, if this – if we start to see the, I guess, tax rate being reduced at least in the U.S., I know the vast majority of your earnings come out of the U.S., would you appreciate a 10% reduction in the tax rate? Would that be – would we see a similar type of reduction in your overall tax rate or how should we think about the moving parts? And are your book taxes similar to your cash taxes? Allen J. Mistysyn - The Sherwin-Williams Co.: I think with the stock comp change, our book and cash taxes are more similar. I would say on our current book of business that might be the case. To your point, about a 10% reduction in tax rates, does that correlate to a 10% reduction in ours, that may be the case today. But if you look forward with Valspar, we will get a bigger chunk of our profits from outside the U.S. and that's going to change things a little bit. So, we'll model that as we go forward but that's kind of where we're at. Ivan M. Marcuse - KeyBanc Capital Markets, Inc.: Great. Thanks for taking my questions. I appreciate it. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Ivan.

Thank you. Our next question is coming from the line of John Roberts with UBS. Please proceed with your question. John Roberts - UBS Securities LLC: Thank you. I wanted to come back to the foreign acquisition on the West Coast. I think it's true that there are no other foreign-owned significant architectural competitors in North America and maybe the only significant last two were Glidden and the Comex businesses that you ended up acquiring. So, I think, the history here is that we probably shouldn't worry about that all that much, but I wanted to just check if I had the facts right there. John G. Morikis - The Sherwin-Williams Co.: I believe you're right on the past two owners. But I'd say we live a healthy life of concern, right? So, we don't want to take anything for granted. And so while there's a lot of competitors in the market right now, Dunn-Edwards has been a very good one in the past, we're not taking anything for granted. And they've done a terrific in the past. We expect that they'll continue to do a terrific job. And our job is to get better every day. John Roberts - UBS Securities LLC: Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, John.

Thank you. Our next question is coming from the line of Mike Harrison with Seaport Global Securities. Please proceed with your question. Jacob Schowalter - Seaport Global Securities LLC: Hello. This is Jacob on for Mike. Robert J. Wells - The Sherwin-Williams Co.: Hey, Jacob. Jacob Schowalter - Seaport Global Securities LLC: I was just wondering, can we get an update on the Paint Shield product, where are you guys on the launch process and maybe how it's been tracking relative to expectations? John G. Morikis - The Sherwin-Williams Co.: Yeah. I'd say that we continue to see this product in more and more test applications which is exciting for us. We've had a number of hospitals that are using the product and others that are testing it. What we're finding is that they – they, meaning our customers – want to put these through a validation process which we expected and that's what we're working through right now. So, we always want to sell more. So, while there's clearly momentum in the gallons that are going out, we want to continue to drive that at a faster rate. And that's what our teams are working on. Jacob Schowalter - Seaport Global Securities LLC: Perfect. Thank you for answering my question. Robert J. Wells - The Sherwin-Williams Co.: Thank you.

Thank you. The next question is coming from the line of Scott Mushkin with Wolfe Research. Please proceed with your question. Benedict Shim - Wolfe Research LLC: Good morning. This is Ben Shim on for Scott. Robert J. Wells - The Sherwin-Williams Co.: Hi, Ben. Benedict Shim - Wolfe Research LLC: Hi. Thanks for taking my question. Recently, you've been talking about, previously talked about what maybe a new seasonality in the third quarter, given the pent-up demand going to the fourth quarter and the strong volumes you guys had. Is there anything new that you've learned or seen from customers so far that could continue or alter that trend for 2017? John G. Morikis - The Sherwin-Williams Co.: Well, there's a few things. As I mentioned, I believe that our customers have gotten a little more comfortable in growing what might be perceived initially as their fixed cost by adding incremental labor, number one. Number two, I believe the idea of product selection has become more important. And that actually benefits us. So, when we're introducing products of higher quality to our customers, they're able to be more productive on the job and we're benefiting from that. We're seeing a positive mix shift in the choice of gallons used by many of these customers because they recognize higher-quality product. Might cost them a bit more in a gallon of paint, but helps them tremendously, not only in their cost of labor, but speed of labor. And the last thing I would add is that we're working closely with many customer groups in continuing to innovate new products that will help them. In fact, this year, 2017, we're launching 17 new architectural products into our Stores Group on top of, I think, it was 23 last year, and I believe it was 25 the year before. And so it's been a tremendous driver in our pipeline of innovation as well to try to help our customers. Benedict Shim - Wolfe Research LLC: Okay, great. Any thoughts on recent change in FTC leadership and how that might affect the timing of the Valspar acquisition? I'm assuming it doesn't change, but just wanted to see if you guys had any thoughts. John G. Morikis - The Sherwin-Williams Co.: No, I think you're right. I don't think it changes. I think we're proceeding quite well, we believe. And we're very respectful of whoever we're speaking to on the FTC side. Benedict Shim - Wolfe Research LLC: Thanks so much. John G. Morikis - The Sherwin-Williams Co.: Yeah. Thanks. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Ben.

Thank you. The next question is coming from the line of Christopher Perrella with Bloomberg. Please proceed with your question. Christopher Silvio Perrella - Bloomberg LP (Research): Hi. Good afternoon, guys. Thanks for taking the call – questions. In Latin America, is there additional restructuring to be had? Have you right-sized that business in light of the impairment charges? And then overseas, in preparation for the Valspar acquisition, are there any steps you're taking before the deal closes to right-size locations? Allen J. Mistysyn - The Sherwin-Williams Co.: So, for Latin America, what I talked about with where we were at, at the high watermark and where we're at today, I think the team has taken all the steps as far as right-sizing the organization. We're continuously looking for opportunities to improve our SG&A and to extend our margins, whether that's through our factories, distribution or whatnot. But from just a reorganizational standpoint, I think we're where we want to be. John G. Morikis - The Sherwin-Williams Co.: Yeah. We talk an awful lot about, Chris, the mindset of continuous improvement in our organization. There's not a finish line in that space. I mean, we're going to constantly be looking for those opportunities. And to your point about right-sizing in other parts of the world, as you heard when we were talking about our Global Finishes Group attacking the synergies between the two acquisitions that we've made, those have been many years in the progress, and we're still working very hard at that, and it's going to continue. So, I think you should expect us to continue to look for those but be very smart. At the same time, we're investing in other levers that can help us grow our business. Christopher Silvio Perrella - Bloomberg LP (Research): All right. Thank you. I appreciate that. And then on the petrochem end of the raw material basket, is there any lift that you have built into your guidance, maybe in the back half of the year, cost pressure there or is it just evenly flat across the board? Robert J. Wells - The Sherwin-Williams Co.: No, we are expecting mild inflation in the petrochemical side of the basket. You may have noticed that polypropylene pricing for January settled up quite a bit. We anticipated some upward pressure in propylene – I said polypropylene – it's actually propylene settled up quite a bit. That move came a little earlier than expected, but we believe it was primarily a function of higher propane demand for heating and propylene restocking, primarily amongst polypropylene customers. In our view, both of these factors are short term, and we are not convinced that the move in January is going to result in more petrochemical inflation than we anticipated in our initial forecast, which is relatively mild. Christopher Silvio Perrella - Bloomberg LP (Research): All right. And now, for housekeeping purpose, it takes about 90 days to work its way down the chain to you? Robert J. Wells - The Sherwin-Williams Co.: Give or take, yes, 90. Yes. Christopher Silvio Perrella - Bloomberg LP (Research): All right, thank you very much. I appreciate it. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Chris.

Thank you. Our next question is coming from the line of Dmitry Silversteyn with Longbow Research. Please proceed with your question. Dmitry Silversteyn - Longbow Research LLC: Thank you for your patience and actually getting to my question, guys. Congratulations on a great finish of the year. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Dmitry. Dmitry Silversteyn - Longbow Research LLC: Couple of questions leftover from all the ones that have been asked. First of all, just following up on the last question around Latin America, you put up about 15% growth, excluding FX. I understand it was mostly pricing. Is that correct? Your volume was still weaker year-over-year? John G. Morikis - The Sherwin-Williams Co.: No. That's incorrect. We had a volume increase in a number of our countries down there, the strongest being Mexico, and we had some good performance. Dmitry Silversteyn - Longbow Research LLC: Okay. So, I guess my next question on the pricing, was that actual sort of price increases to offset foreign exchange translations or was it sort of a price increase above and beyond to handle either raw materials or just mispricing in the market? Can you talk about some of the high pricing component of those revenues? Allen J. Mistysyn - The Sherwin-Williams Co.: Yeah. But it was primarily related to the continued devaluation. If you think about some of the devaluations that have taken place, it is the reais that really has turned around in this year, but it's still well devalued from where it was just a few years ago. So, the pricing actions we're taking are catching us up to that devaluation, as an example. Dmitry Silversteyn - Longbow Research LLC: Got you. Okay. Thanks. And then final question on the Paint Stores Group, the bounce back that you saw in the same-store growth to about 5.5% from what I think was about 2% last quarter. How much of that was sort of oil and gas either being less onerous or just seasonally less impactful? How much of that was, if you could, parcel it in those two buckets? And how much of that was sort of the loosening up of labor restrictions on the contractor segment? John G. Morikis - The Sherwin-Williams Co.: Well, I'd first point out that it really points to the strength of what we've seen in the market and our continued drive to get better position in the market. As we've talked about the residential repaint, this is the 11th of 13 quarters with a double-digit gain. Dmitry Silversteyn - Longbow Research LLC: Right. John G. Morikis - The Sherwin-Williams Co.: And so, the other segments, the contractor segments that we focus on were also very, very strong. You're right, to some degree, in that the Protective & Marine drag has been weighing on our results, and it was muted because of the seasonality of it. But it still speaks to the strength of those segments, our confidence in our position there and our determination to get even better. Dmitry Silversteyn - Longbow Research LLC: No, I understand that. But, I mean, 90 days doesn't change your orientation or your strategy that much. You talked about labor constraints as being one of the drivers along with the oil and gas issue the third quarter. (80:43) John G. Morikis - The Sherwin-Williams Co.: Yes. Right. Dmitry Silversteyn - Longbow Research LLC: So, I'm just trying to see how those two played out in the fourth, that's all. John G. Morikis - The Sherwin-Williams Co.: Well, I think it's a smaller quarter, so the absolute numbers improve. And our focus on the Protective & Marine during this fourth quarter is much less because of the seasonality. So, I'm not quite sure if I'm answering your question. Robert J. Wells - The Sherwin-Williams Co.: And Protective & Marine was still a drag in the quarter, just less than it has been over the last couple quarters. The majority of the rebound in the comp was from the fact that contractors do not face the same labor constraints in the fourth quarter that they do in the third. We saw a significant pickup in activity amongst new residential, residential repaint, and most of the architectural segments picked up pretty solidly. Dmitry Silversteyn - Longbow Research LLC: Perfect, Bob. That's what I was looking for. Thank you very much. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Dmitry.

Thank you. Our next question is coming from the line of Eric Bosshard with Cleveland Research Company. Please proceed with your question. Eric Bosshard - Cleveland Research Co. LLC: Two questions. First of all, the revenue guidance for the fourth quarter I think was low-single-digit and the reported revenues were up 7%. Just curious, the difference between those two numbers, what grew notably faster in 4Q relative to what you guided? That's the first question. The second question relates to what you would tell us to expect for gross margin growth in 2017? Allen J. Mistysyn - The Sherwin-Williams Co.: I would say that in the quarter, our Paint Stores Group had a much stronger finish to the year than we had in the guidance. And also, Latin America Coatings Group in the investments that John talked about that the team has been making started paying off and that also was a benefit relative to our guidance. As far as the gross margin, I think we don't give out the specific of each of them. But as I mentioned before, the margin improvement, we do expect to have a margin expansion in 2017. It will not be, as you can imagine, similar to previous few years. But with continuous improvement mindset in that, we expect to have some. And the volume gains that Paint Stores Group is getting and putting through our North American supply chain, we do expect to get some margin expansion. The key will be on the SG&A leverage that we get. Eric Bosshard - Cleveland Research Co. LLC: And then just a follow-up on the Paint Stores better than expected. What component of Paint Stores grew better than expected? John G. Morikis - The Sherwin-Williams Co.: Again, just the residential portion of our business was very, very strong. Well, I say that but many of the commercial segments were stronger than we expected as well. We have a very good momentum there. Robert J. Wells - The Sherwin-Williams Co.: Yeah. In the prepared remarks, Eric, we mentioned that contractor business grew high-single digit. So, that's across all end market, the sales – architectural paint sales to contractors grew high-single digits. Eric Bosshard - Cleveland Research Co. LLC: And that's an acceleration from third quarter then? Robert J. Wells - The Sherwin-Williams Co.: Yes. Eric Bosshard - Cleveland Research Co. LLC: Okay. Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, Eric.

Thank you. The next question is coming from the line of David Wang with Morningstar. Please proceed with your question. David Wang - Morningstar, Inc. (Research): Hi, everybody. Thanks for taking my question. I have one on your growth versus industry. So, it looks like existing home sales grew a little bit slower than what your Paint Stores Group posted, and I wonder if you could talk about what should be the difference, is it partly the shifts from DIY to pro or is it something else? Robert J. Wells - The Sherwin-Williams Co.: Yeah. First, Dave, I mentioned early on in the call that only about 15%, 20% of residential repaint activity is driven by existing home turnover and what's driving the other part, the 80% to 85%, we believe is rapid appreciation in home values. People are just more comfortable investing in remodeling and repainting activity when they're investing in an appreciating asset. So we think we've gotten a tailwind from appreciating home values that would make actual residential repaint activity in the market outpace what existing home turnover would imply the pace should be. We also think that we're gaining share in residential repaint. And that is in part due to your point that the shift from DIY to do it for me, we think that also tends to pick up pace when home values are appreciating. So, the market conditions we're seeing here and particularly driven by rapidly appreciating home values is a net benefit for repaint and remodeling activity. David Wang - Morningstar, Inc. (Research): Okay. Great. And then, just a follow-up question. I know we didn't have a particularly good year for housing starts and existing home sales, but I think we grew mid-single digits. If we continue to see rebounding in the housing market, how much operating leverage would you guys be able to see especially flowing through to the Paint Stores Group profit margins? John G. Morikis - The Sherwin-Williams Co.: We would expect to absolutely leverage the incremental volume through our stores' organization and you're starting to see some of that in the fourth quarter. It's an area of focus for us. This is an important part of our business and one where from an expense standpoint, would not require incremental expense for us to be able to pursue the incremental volume. Robert J. Wells - The Sherwin-Williams Co.: And you mentioned that housing starts are only up mid single-digits. Mid single-digits volume growth to our North America supply chain would generate a pretty substantial amount of leverage. David Wang - Morningstar, Inc. (Research): All right. Thank you. Robert J. Wells - The Sherwin-Williams Co.: Thanks, David. John G. Morikis - The Sherwin-Williams Co.: Thank you.

Thank you. Our next question is coming from the line of Richard O'Reilly with Revere Associates. Please proceed with your question. Richard O'Reilly, CFA - Revere Associates: Okay. Thank you. And good morning, gentlemen. Robert J. Wells - The Sherwin-Williams Co.: Hi, Richard. Richard O'Reilly, CFA - Revere Associates: Hi. I have a short-term question. Weather-wise, I'm in New Jersey, and we've had a mild winter, and yet when I listen to the national news there's tornadoes and blizzards somewhere else in the country. Is weather so far in January, "normal" or is it worse than usual, less than usual, is it affecting your store days to any extent than "normal"? John G. Morikis - The Sherwin-Williams Co.: So, Richard, we've sworn oath not to ever talk about weather again. There's always good weathering areas and bad weathering areas, and we don't like to point to that. We know that our shareholders are counting on us to make things better every day, and so, yeah, there's areas that have had some tough weather and if it's the ice or tornadoes, whatever, and there are other areas that are nice. And so we quite frankly insist that our people focus on how they improve their results, not report the weather, so. It's not anything I want to really comment on. Richard O'Reilly, CFA - Revere Associates: Okay. Fine. Thank you for your attempt. Robert J. Wells - The Sherwin-Williams Co.: Thank you, Richard. John G. Morikis - The Sherwin-Williams Co.: Thank you.

Thank you. It appears we have no additional questions at this time. So, I'd like to pass the floor back over to Mr. Wells for any additional concluding comments. Robert J. Wells - The Sherwin-Williams Co.: Thanks again, Jessie. And first, thanks to all of you for hanging with us this long. I'll wrap up quickly by asking you all to save the date of Thursday, May 25, on your calendars. That's the day we'll host our annual Financial Community Presentation this year in New York at the Marriott Marquis. The program will consist of brief business reviews by our segment leadership teams, followed by a more detailed update on our Valspar integration plan and progress. We'll host our customary Q&A session followed by a reception and lunch. Again, that date is Thursday, May 25. We'll be sending out invitations and related information in a link to our registration site in late March. So, please watch your e-mail. As usual, I'll be available for any follow-up questions you have today and tomorrow. Thanks for joining us today and thank you, again, for your continued interest in Sherwin-Williams.

Ladies and gentlemen, this does conclude today's teleconference. Again, we thank you for your participation, and you many disconnect your lines at this time.