What changed in this filing

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Item 1A. Risk Factors

2026-02-10 compared with 2025-02-11 · 30 added, 25 removed, 199 unchanged (22% of the section changed)

10 unchanged sentences

• consumer income and debt levels;

• consumer affordability;

• unemployment and underemployment levels;

• the availability of home equity loans and mortgages and the interest rates for and tax deductibility of such loans;

• inflationary pressures;

• inflationary pressures, including from duties and tariffs;

• changing government policies and programs;

28 unchanged sentences

Business and Operational Risks

Variability in the cost and availability of our raw materials, component and finished products could impact our results of operations and financial position.

Variability in the cost and availability of our raw materials, components and finished products could impact our results of operations and financial position.

We purchase substantial amounts of raw materials, components and finished products from outside sources, including international sources, and we manufacture certain of our products outside of the United States.

Increases in the cost of the materials we purchase, including as a result of diminished availability, increased tariffs and inflation or unfavorable fluctuations in currency exchange rates have increased and may in the future increase the prices for our products and negatively impact our results of operations and financial position.

Increases in the cost of the materials we purchase, including as a result of diminished availability, increased duties, tariffs and inflation or unfavorable fluctuations in currency exchange rates have increased and may in the future increase the prices for our products and negatively impact our results of operations and financial position.

In particular, we have experienced and may continue to experience significantly higher costs as a result of increased duties and tariffs, mainly in our Plumbing Products segment, due to duties and tariffs related to China and other international jurisdictions as well as related to materials.

Further, our production has been and may in the future be impacted if we or our suppliers are unable to procure our requirements for various raw materials, including, among others, brass, copper, resins, titanium dioxide and zinc.

5 unchanged sentences

If we are not able to sufficiently increase the prices of our products or achieve cost savings to offset increased material, production, transportation and labor costs, our results of operations and financial position could be adversely impacted.

Increased selling prices for our products have led and may in the future lead to sales declines and loss of market share, particularly if those prices are not competitive.

Increased selling prices for our products have led and may in the future lead to sales declines, a shift in the mix of products we sell and loss of market share, particularly if those prices are not competitive.

When our material costs decline, we have received and may in the future receive pressure from our customers to reduce our prices.

12 unchanged sentences

raw material shortages;

trade policies;

energy availability;

2 unchanged sentences

Any of these factors could disrupt our third parties’ operations and result in shortages of supply, assertion of force majeure and increases in the prices charged to us for the raw materials, components and finished products they produce or services they provide.

Sourcing these goods and services from alternate suppliers, including suppliers from new geographic regions, or re-engineering our products as a result of supplier disruptions, can be time-consuming and costly and could result in inefficiencies or delays in our business operations or could negatively impact the quality of our products.

Sourcing these goods and services from alternate suppliers, including suppliers from new geographic regions, or re-engineering our products as a result of supplier disruptions, is time-consuming and costly and could result in inefficiencies or delays in our business operations or could negatively impact the quality of our products.

In addition, the loss of critical suppliers, or a substantial decrease in the availability of supply, has disrupted and could in the future disrupt our business and has had and may in the future have an adverse impact on our results of operations and financial position.

17 unchanged sentences

We are also affected by domestic and international laws, regulations and government policies applicable to companies doing business outside of the U.S., or importing and exporting goods and materials.

These include laws and regulations related to anti-bribery/anti-corruption, competition, data privacy, environmental, social and governance (“ESG”) matters, sanctions, tax, trade, including duties and tariffs, and other business practices.

Compliance with these laws, regulations and government policies is costly, and future changes to these laws may require significant management attention and disrupt our operations.

These include laws and regulations related to anti-bribery/anti-corruption, competition, data privacy, environmental, sustainability matters, sanctions, tax, trade, including duties and tariffs, and other business practices.

Compliance with these laws, regulations and government policies is costly and has required significant management attention, and future changes to these laws may continue to require significant management attention and disrupt our operations.

Additionally, while it is difficult to assess what changes may occur and the relative effect on our international tax structure, significant changes in how U.S.

3 unchanged sentences

Fluctuations in currency exchange rates may also present challenges in comparing our operating performance from period to period.

The long-term performance of our businesses relies on our ability to attract, develop and retain a talented and diverse workforce.

For our businesses to be successful, we must invest significant resources to attract, develop and retain highly qualified, talented and diverse employees, who have the experience, knowledge and expertise to implement our strategic and business initiatives.

The long-term performance of our businesses relies on our ability to attract, develop and retain a talented and workforce.

For our businesses to be successful, we must invest significant resources to attract, develop and retain highly qualified and talented employees, who have the experience, knowledge and expertise to implement our strategic and business initiatives.

We compete for employees with a broad range of employers in many different industries, including large multinational firms.

We have faced and may in the future face challenges in recruiting, developing, engaging and retaining employees, particularly when the labor market is experiencing low unemployment levels, increasing compensation and increasing competition.

If we are unable to successfully implement our talent strategies, including attracting, developing, engaging and retaining key employees, building strong and diverse leadership teams, developing effective succession planning and successfully executing organizational change and leadership transition, our results of operations and financial position could be adversely impacted.

If we are unable to successfully implement our talent strategies, including attracting, developing, engaging and retaining key employees, building strong leadership teams, developing effective succession planning and successfully executing organizational change and leadership transition, our results of operations and financial position could be adversely impacted.

Extreme weather events and changes in climate could adversely impact our results of operations and financial position.

22 unchanged sentences

Our results of operations and financial position could be adversely impacted by a negative perception regarding our products or company practices, positions or public statements, even if unfounded, negative claims and comments in social media or the press or a data breach.

Furthermore, stakeholders are increasingly scrutinizing companies' ESG practices, and stakeholders’ expectations regarding ESG practices are diverse and rapidly changing.

We may not be able to align our ESG practices with such evolving expectations within the timeframes expected by stakeholders or without incurring significant costs.

In addition, we may not be able to achieve our aspirational goals related to our ESG initiatives, which are and may continue to be impacted by many complexities and variables, such as renewable energy infrastructure and availability, a challenging economic environment, changes to our operations and changes to our portfolio of businesses via acquisitions or divestitures.

Furthermore, stakeholders’ expectations regarding company practices, positions or public statements are diverse and continually changing.

We may not be able to align with such evolving expectations within the timeframes expected by stakeholders or without incurring significant costs.

In particular, we may not be able to achieve our aspirational goals related to our sustainability initiatives, which are and may continue to be impacted by many complexities and variables, such as renewable energy infrastructure and availability, a challenging economic environment, changes to our operations and changes to our portfolio of businesses via acquisitions or divestitures.

A failure or perceived failure by us in this regard may damage our reputation and adversely impact our results of operations and financial position.

2 unchanged sentences

We believe that brand reputation is an important factor affecting product selection and that we compete on the basis of product features, innovation, quality, customer service, warranty and price.

We sell our products through home center retailers, online retailers, distributors and independent dealers and rely on these customers to market and promote our products to consumers.

We sell our products through home center retailers, online retailers, distributors, wholesalers and independent dealers and rely on these customers to market and promote our products to consumers.

Our success with our customers is dependent on, among other things, our ability to provide quality products with desired features at acceptable prices with timely delivery and a high level of customer service.

5 unchanged sentences

In addition, we face competitive pricing pressure in the marketplace, including sales promotion programs, that could impact our market share or result in price reductions, which could adversely impact our results of operations and financial position.

The growing e-commerce channel brings an increased number of competitors and greater pricing transparency for consumers, as well as conflicts between our existing distribution channels and a need for different distribution methods.

The growing e-commerce channel brings an increased number of competitors and greater pricing transparency for consumers and customers, as well as conflicts between our existing distribution channels and a need for different distribution methods.

These factors have impacted and could in the future impact our results of operations and financial position.

4 unchanged sentences

These customers can significantly impact the prices we receive for our products and the terms and conditions on which we do business with them.

Additionally, these customers have reduced in the past and may in the future reduce the number of vendors from which they purchase and could make significant changes in their volume of purchases from us.

Although other retailers, dealers, distributors and homebuilders represent other channels of distribution for our products and services, we might not be able to quickly replace, or replace at all, the loss of a substantial portion of our sales to The Home Depot or the loss of all of our sales to either Ferguson or Lowe’s.

Further, these customers have reduced in the past and may in the future reduce the number of vendors from which they purchase and could make significant changes in their volume of purchases from us.

Although other retailers, dealers, distributors, wholesalers and homebuilders represent other channels of distribution for our products and services, we might not be able to quickly replace, or replace at all, the loss of a substantial portion of our sales to The Home Depot or the loss of all of our sales to either Ferguson or Lowe’s.

Any such loss would have a material adverse impact on our business, results of operations and financial position.

In addition, our Behr business grants Behr brand exclusivity in the retail sales channel in North America to The Home Depot, and from time to time, certain of our other businesses grant product and/or brand exclusivity to our customers.

In addition, our Behr business grants to The Home Depot Behr brand exclusivity in the retail sales channel in North America and exclusivity with respect to Kilz branded primer products in the home improvement big box retail sales channel and across online only mass market retail marketplaces in the United States and in the retail sales channel in Canada.

From time to time, certain of our other businesses grant product and/or brand exclusivity to our customers.

The granting of exclusivity impacts our ability to sell those products and brands to other customers and can increase the complexity of our product offerings and our costs.

1 unchanged sentence

We are subject to cybersecurity attacks, which could adversely impact our results of operations and financial position.

Global cybersecurity vulnerabilities, threats and more frequent, sophisticated and targeted attacks pose a risk to our information technology systems and to critical third-party information technology platforms we utilize.

Global cybersecurity vulnerabilities, threats and more frequent, sophisticated and targeted attacks, which may be increasingly exacerbated by the proliferation of and advance in artificial intelligence, pose a risk to our information technology systems and to critical third-party information technology platforms we utilize.

We have implemented security policies, processes and layers of defense designed to help identify and protect against misappropriation or corruption of our systems and information and disruption of our operations.

12 unchanged sentences

• theft of our assets.

In addition, we could be adversely impacted if any of our significant customers, suppliers or service providers experiences any similar events that disrupt their business operations or damage their reputation.

In addition, we could be adversely impacted if any of our significant customers, suppliers or service providers experience any similar events that disrupt their business operations or damage their reputation.

Such events could adversely impact our results of operations and financial position.

1 unchanged sentence

We rely on many on-site and cloud-based information systems and technology to process, transmit, store and manage information to support our business activities.

We may be adversely impacted if these information systems breakdown, fail, or if delays in system upgrades or replacements stretch those systems beyond support by third-party service providers, including cloud platform providers.

In addition to the consequences that may occur from interruptions in the current systems we utilize, we continue to invest in new technology systems throughout our company, including implementations of and upgrades to critical systems at our business units.

System implementations and upgrades are complex and require significant management oversight, and we have experienced, and in the future may experience, unanticipated expenses and interruptions to our operations during these implementations and upgrades.

Our results of operations and financial position, as well as the effectiveness of our internal controls over financial reporting, could be adversely impacted if we do not appropriately select, implement, maintain or upgrade our critical systems in a timely manner or if we experience significant unanticipated expenses or disruptions in connection with the implementation, upgrade or update of such systems.

We have been and may in the the future be adversely impacted if these information systems breakdown, fail, or if delays in system upgrades or replacements stretch those systems beyond support by third-party service providers, including cloud platform providers.

In addition to the consequences that may occur from interruptions in the current systems we utilize, we continue to invest in new technology systems throughout our company, including implementations and integrations of and upgrades to critical systems at our business units.

These system changes are complex and require significant management oversight, and we have experienced, and in the future may experience, unanticipated expenses and interruptions to our operations during these changes.

We may not be able to adequately protect or prevent the unauthorized use of our intellectual property.

2 unchanged sentences

There can be no assurance that our efforts to protect our intellectual property rights will prevent violations.

Our intellectual property has been and may again be challenged or infringed upon by third parties, particularly in countries where property rights are not highly developed or protected.

Our intellectual property has been and may again be challenged or infringed upon by third parties, including in countries where property rights are not highly developed or protected.

In addition, the global nature of our business increases the risk that we may be unable to obtain or maintain our intellectual property rights on reasonable terms.

1 unchanged sentence

Current and former employees, contractors, customers or suppliers have or may have had access to proprietary or confidential information regarding our business operations that could harm us if used by them, or disclosed to others, including our competitors.

In addition, we may be harmed if our proprietary or confidential information regarding our business is exposed through the unauthorized use of artificial intelligence technologies.

Protecting and preventing the unauthorized use of our intellectual property is costly, time-consuming and requires significant resources.

34 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors