Sherwin-Williams(US:SHW)2023-02-22 20:39Financial Performance - Net sales for the year ended December 31, 2022, were $22,148.9 million, an increase of 10.1% from $19,944.6 million in 2021[273]. - Gross profit for 2022 was $9,325.1 million, representing 42.1% of net sales, compared to 42.8% in 2021[273]. - Net income for 2022 was $2,020.1 million, up from $1,864.4 million in 2021, reflecting a growth of 8.4%[273]. - The company’s comprehensive income for 2022 was $2,017.9 million, compared to $1,884.3 million in 2021[275]. - Net operating cash decreased to $1,919.9 million in 2022 from $2,244.6 million in 2021, reflecting a decline in cash flow[281]. - Selling, general and administrative expenses were $6,014.5 million, accounting for 27.2% of net sales in 2022, down from 27.9% in 2021[273]. - The company reported a loss on divestiture of business amounting to $111.9 million in 2021, with no such loss reported in 2022[281]. Assets and Liabilities - The company reported a total asset value of $22,594.0 million as of December 31, 2022, an increase from $20,666.7 million in 2021[278]. - Current liabilities increased to $5,960.7 million in 2022 from $5,719.5 million in 2021[278]. - The company had short-term borrowings of $978.1 million in 2022, up from $763.5 million in 2021[278]. - The Company reported a total long-term debt of $9.591 billion as of December 31, 2022, an increase from $8.851 billion in 2021[340]. - The Company has unused capacity under its various credit agreements of $2.742 billion as of December 31, 2022[349]. Acquisitions and Investments - The company acquired businesses for $1,003.1 million in 2022, up from $210.9 million in 2021, indicating a strong focus on expansion[281]. - The Company completed acquisitions in 2022 with an aggregate purchase price of approximately $1.024 billion, including $282.8 million of intangible assets and $565.8 million of goodwill recognized from these transactions[322]. - The aggregate purchase price for acquisitions completed in 2021 was approximately $227.0 million, with $155.6 million of goodwill and $11.3 million of intangible assets recognized[325]. Internal Controls and Compliance - The Company maintained effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria[248]. - The Audit Committee meets at least quarterly to review the adequacy of financial controls and the effectiveness of the Company's internal control over financial reporting[260]. - The Company recognizes that internal control over financial reporting cannot provide absolute assurance due to inherent limitations[242]. - The Company conducted an assessment of the effectiveness of internal control over financial reporting under the 2013 Internal Control – Integrated Framework[243]. - The Company believes it has designed safeguards to reduce the risk of material misstatements in financial reporting[242]. Environmental and Legal Matters - The environmental-related accrual for the Gibbsboro site was $290.4 million, with $50.2 million as short-term and $240.2 million as long-term accruals[270]. - The majority of the environmental-related accrual, $246.6 million or 84.9%, is associated with four Major Sites as of December 31, 2022[380]. - The Gibbsboro site, a former manufacturing plant, accounts for a substantial portion of the environmental-related accrual, with ongoing investigations and remediation efforts expected to take an extended period[381]. - The New Jersey Department of Environmental Protection has filed a lawsuit against the Company seeking recovery for natural resource damages and other costs related to hazardous substance discharge at its Gibbsboro site, with a trial scheduled for September 26, 2023[414]. - The Company has been involved in multiple legal proceedings related to public nuisance claims, with most cases concluded in favor of the Company, except for ongoing proceedings in Pennsylvania[393]. Pension and Employee Benefits - The Company provided health care benefits to 30,009 active employees in 2022, with costs amounting to $347.4 million, a 3.9% increase from $336.0 million in 2021[352]. - The annual contribution for the domestic defined contribution pension plan was $88.9 million in 2022, up from $85.3 million in 2021, reflecting a 4.2% increase[353]. - The Company’s foreign defined contribution pension plans saw contributions of $19.4 million in 2022, a 8.4% increase from $17.9 million in 2021[354]. - As of December 31, 2022, the domestic defined benefit pension plan was overfunded with a projected benefit obligation of $91.7 million and fair value of plan assets at $119.4 million, resulting in excess plan assets of $27.7 million[355]. - The net pension cost for the domestic defined benefit pension plan was $1.2 million in 2022, a decrease from $1.6 million in 2021[360]. Stock and Shareholder Information - As of December 31, 2022, the Company had 900,000,000 shares of common stock and 30,000,000 shares of serial preferred stock authorized for issuance[416]. - The company reported stock-based compensation expenses of $99.7 million in 2022, with an income tax benefit recognized of $24.6 million[426]. - The total intrinsic value of options exercised in 2022 was $125.4 million, compared to $485.8 million in 2021[429]. - The weighted average grant date fair value per share for RSUs granted in 2022 was $271.75[433]. - The company purchased 3,350,000 treasury stocks in 2022, contributing to a total treasury stock balance of 14,717,347 shares[419].