borrowings was 2.3 percent at December 31, 2004. There were no borrowings outstanding under the Com- pany’s commercial paper program at December 31, 2003 or 2002. Effective July 19, 2004, the Company entered into a new five-year revolving credit agreement which replaced the prior agreement and which limits the commercial paper program to a maximum borrowing capability of $650.0 million. The Company uses the revolving credit agreement to satisfy its commercial paper program’s dollar for dollar liquidity requirement. Due to the seasonality of the Company’s business and the need for available cash prior to the primary selling season and collecting accounts receivable, the Company expects to continue to borrow under the commercial paper program during 2005. Long-term debt, including the current portion, decreased $14.1 million during 2004 due primarily to the payment of various promissory notes and other obli- gations during the year. See Note 8, on pages 59 and 60 of this report, for a detailed description of the Compa- ny’s long-term debt outstanding and other available financing programs. The Company’s long-term liability for postretirement benefits other than pensions increased $5.1 million to $222.0 million from $216.9 million due to the excess of the net postretirement benefit obligation over the benefit payments. The assumed discount rate used to calculate the actuarial present value of the obligation for post- retirement benefits other than pensions was decreased from 6.0 percent to 5.75 percent at December 31, 2004 due to the reduced rates of high-quality, long-term investments. The assumed health care cost trend rates for 2005 through 2014 reflect health care cost increase assumptions established in 2003. Separate assumptions are utilized for health care costs of participants of pre- 65 age and those of 65 and older age. The assumed rates used for 2004 were 9.5 percent for pre-65 age par- ticipants and 11.0 percent for those participants 65 or older, decreasing gradually to 5.0 percent in 2013. See Note 7, on pages 58 and 59 of this report, for further information on the Company’s obligation for postretire- ment benefits other than pensions. Other long-term liabilities increased $43.1 million during 2004 due primarily to current year acquisition- related non-compete liabilities of $22.0 million, increased long-term deferred taxes and taxes payable  of $18.6 million and other obligations. See Note 9, on pages 60 and 61 of this report, for further information on the Company’s long-term liabilities. Shareholders’ equity increased $188.4 million during 2004 to $1,647.2 million at December 31, 2004 from $1,458.9 million last year. The increase in shareholders’ equity resulted from increased retained earnings, increased capital accounts related primarily to stock option exercises and the reduction of cumulative other comprehensive loss. Partially offsetting these increases was the purchase of treasury stock. Retained earnings increased $296.3 million during 2004 due to net income of $393.2 million partially offset by $96.9 million in cash dividends paid. Net increases in common stock and other capital of $130.8 million were due primarily to stock option exercises and the tax impact of certain ESOP transactions. The Company purchased 6.6 million shares of its common stock during 2004 for treasury at a cost of $267.4 million. The Company acquires its common stock for general corporate purposes and, depending on its cash position and market conditions,  it may acquire additional shares in the future. The Company had remaining authorization at December 31, 2004 to purchase 10.4 million shares of its common stock. See the Statements of Consolidated Shareholders’ Equity and Comprehensive Income, on page 45 of this report, and Notes 10, 11 and 12, on pages 61 through 64 of this report, for more information concerning shareholders’ equity. The changes in Cumulative other comprehensive loss consisted mainly of favorable foreign currency transla- tion adjustments in the Consolidated Balance Sheets. The favorable foreign currency translation effect of $17.8 million in 2004 and $31.8 million in 2003 was attributable to the strengthening in most foreign opera- tions’ functional currencies versus the U.S. dollar except the Mexican peso. The foreign currency translation loss of $48.3 million in 2002 was attributable to weaknesses in several foreign operations’ functional currencies ver- sus the U.S. dollar, most notably the Argentine peso and the Brazilian real. Most significantly, the Argentine gov- ernment, beginning in January 2002, announced plans to discontinue its currency board policy of maintaining a one-to-one fixed exchange rate between the peso and U.S. dollar and attempted to implement a controlled devaluation. The change in the currency translation rate of the Argentine peso did not have a material impact on the overall results of operations of the International Coatings Segment during 2002. However, the related impact of the currency fluctuation on the Argentine economy and related economies in South America caused sales and profits of the Argentina subsidiary to 27 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS