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2010annualreport*HuarunRedeemableStockaccrualreducedbasicanddilutednetincomepercommonshareby$0.10in2009and$0.12in2008.TheaccrualwasrelatedtotheminorityinterestsharesofHuarunPaintsHoldingCompanyLimitedasfurtherdescribedinNote2inNotestoConsolidatedFinancialStatements.In2010,2009and2008,netincomepercommonsharebasicanddilutedincluded$0.08,$0.18and$0.16pershareinrestructuringcharges,respectively.SeeNote15inNotestoConsolidatedFinancialStatementsformoreinformation.Netincomepercommonsharebasicanddilutedfor2010includedanet$0.05after-taxgain(fromthesaleofcertainassetspartiallyoffsetbyWattylacquisitionfees).Netincomepercommonsharebasicanddilutedfor2008includedagainonthesaleofcertainassetsof$0.09.Adjustednetincomepercommonsharediluted,fortheitemmentionedabove,was$2.23for2010,$1.77for2009and$1.57for2008.Seerelatedreconciliationin“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations—Overview—EarningsperShare”formoreinformation.Financialhighlights%Change%Change(Dollarsinthousands,exceptpershareamounts)2010from20092009from2008NetSales$3,226,68712.1%$2,879,042(17.3)%IncomeBeforeTaxes$319,19733.9$238,3284.2NetIncome$222,05638.7$160,1536.2ReturnonAverageShareholders’Equity14.2%—10.8%—DilutedNetIncomePerCommonShare$2.20*47.7$1.49*8.0CashDividendsPerShare$0.646.7$0.607.1TotalAssets$3,867,93610.2$3,511,024(0.3)TotalDebt$951,3048.1$880,373(4.6)Stockholders’Equity$1,630,3658.4$1,504,5073.6Stockholders’EquityPerShare$16.6310.0$15.124.1NumberofSharesOutstanding(Year-End)98,027,290(1.5)99,482,214(0.5)Netsales(Dollarsinmillions)$2.2320082008$3,482.4$1.7720092009$2,879.0$1.5720102010$3,226.7Adjustedearningspershareexcludingcertainitems*(Dollars)Valspar’s strategy is built on investments in strong brands, leading technologies and expanding our global presence.Pursuing our strategy and mission to become the best coatings company in the world is driven by our theme, “if it matters, we’re on it.” It communicates how we do business. We operate with a sense of urgency and always with integrity. We work to solve problems, invent solutions and consistently deliver value to our customers, employees, investors and communities.acquisitions, share repurchases, dividends and capital investments. In December 2010, the Board of Directors raised the quarterly dividend by 12.5 percent to $0.18 a share.During the year, we continued our focus on sup-porting employees and communities. We improved our world-class safety record and for the fi rst time achieved a recordable injury rate of less than one per 200,000 hours worked, a performance level attained by very few manufacturing companies. We reduced emissions from our facilities and helped our customers meet their environmental objectives by expanding our portfolio of water-based products. We continued as National Paint Partner for Habitat for Humanity International and in September, celebrated the donation of our one-millionth gallon of paint to the organization.GlobalExpansionandGrowthWe continue to invest in strategic acquisitions that improve the geographic diversity of our portfolio and further extend our business in fast-growing coatings markets.In June, we completed a transaction with DIC Corporation of Japan that included the purchase of a manufacturing site and business entity in Bangalore, India. This strategic acquisition provides us with an immediate platform for growth in an emerging market for packaging and other coatings.In September, we completed the acquisition of Wattyl Limited, a market-leading paint manufac-turer with excellent brands, high-quality products and broad distribution across do-it-yourself, To our shareholders2010 was a year of outstanding performance for Valspar. We delivered double-digit growth in both sales and earnings. We continued our investments in building strong brands and leading-edge technologies. We further expanded our global presence in fast-growing coatings markets and made strategic acquisitions that will contribute to the long-term growth of the company. The dividend to shareholders was increased for the 33rd consecutive year.2010ResultsNet sales for the year increased 12.1 percent to $3.227 billion, driven primarily by new business gains and the continued global economic recovery. In response to higher raw material costs, which increased throughout the year, we increased our selling prices in all businesses and geographies. In our Coatings segment, sales increased 14.7 percent. Our Packaging product line continued to perform well on a global basis, with growth in all regions. Our investments in technology resulted in signifi cant new business in our General Industrial, Coil and Wood product lines. Sales in our Paints segment increased 9