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default and cross-default provisions. In the event of default under any one of these arrangements, accelera- tion of the maturity of any one or more of these bor- rowings may result. Management believes that such an event is not reasonably likely to occur. 

The Company has certain obligations and commit- ments to make future payments under contractual obli- gations and commercial commitments. The following table summarizes such obligations and commitments as of December 31, 2004: 

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1 Relates to open purchase orders for raw materials at December 31, 2004. 2 

Other contractual obligations primarily represent the Company's estimated future capital commitments to its investments in U.S. affordable housing and historic renovation real estate partnerships, non-compete agreements, information technology maintenance contracts and various other contractual obligations. 

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The Company offers product warranties for certain products. The specific terms and conditions of such war- ranties vary depending on the product or customer con- tract requirements. Management estimated and accrued the costs of unsettled product warranty claims at December 31, 2004, 2003 and 2002 based on historical results and experience. Management periodically assess- es the adequacy of the accrual for product warranty claims and adjusts the accrual as necessary. Changes in the accrual for product warranty claims during 2004, 2003 and 2002, which included customer satisfaction settlements, were as follows: 

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## RESULTS OF OPERATIONS - 2004 vs. 2003 

Shown below are net sales and the percentage change for the current period by reportable segment for 2004 and 2003: 

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Consolidated net sales for 2004 increased due primarily to volume increases from continuing strong domestic architectural paint sales to contractor and do-it-yourself (DIY) customers, improving sales and market conditions in domestic industrial maintenance and product finishes and improved international sales. Consolidated net sales include the operations of five acquisitions completed at various times after November 2003 including the operations of two larger acquisi- tions, Duron and PSB, beginning with the month of September 2004. The acquisitions increased consolidat- ed net sales $222.6 million, or 4.1 percent, in 2004. 

