What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-20 · 453 added, 399 removed, 1291 unchanged (40% of the section changed)

19 unchanged sentences

However, we believe we have designed into the process safeguards to reduce, though not eliminate, this risk.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In order to ensure that the Company’s internal control over financial reporting was effective as of December 31, 2024, we conducted an assessment of its effectiveness under the supervision and with the participation of our management group, including our principal executive officer and principal financial officer.

This assessment was based on the criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As permitted by SEC rules, we have excluded the operations and related assets of the 2023 acquisition of SIC Holding GmbH from the scope of our assessment of the effectiveness of internal control over financial reporting as of December 31, 2023.

The Total assets and Net sales of the 2023 acquisition of SIC Holding GmbH represented approximately 1.3% and 0.1% of the Company's respective consolidated Total assets and Net sales as of and for the year ended December 31, 2023.

Based on our assessment of internal control over financial reporting under the criteria established in Internal Control – Integrated Framework, we have concluded that, as of December 31, 2024, the Company’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

1 unchanged sentence

Our internal control over financial reporting as of December 31, 2024 has been audited by Ernst & Young LLP , an independent registered public accounting firm, and their report on the effectiveness of our internal control over financial reporting is included on page 43 of this report.

President and Chief Executive Officer

Chair, President and Chief Executive Officer

Senior Vice President - Finance and Chief Financial Officer

Senior Vice President - Enterprise Finance

Senior Vice President - Enterprise Finance and Chief Accounting Officer

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Opinion on Internal Control Over Financial Reporting

We have audited The Sherwin-Williams Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, The Sherwin-Williams Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.

As indicated in the accompanying Report of Management On Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of SIC Holding GmbH, which is included in the 2023 consolidated financial statements of the Company and constituted 1.3% of Total assets as of December 31, 2023 and 0.1% of Net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the 2023 acquisition excluded from the scope of management’s assessment.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of The Sherwin-Williams Company as of December 31, 2023, 2022 and 2021, the related statements of consolidated income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2023, and the related notes and the financial statement schedule listed in Item 15(a) and our report dated February 20, 2024 expressed an unqualified opinion thereon.

We have audited The Sherwin-Williams Company and subsidiaries internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, The Sherwin-Williams Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024, 2023 and 2022, the related statements of consolidated income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the index at Item 15(a) and our report dated February 20, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

25 unchanged sentences

As discussed in the Report of Management on Internal Control Over Financial Reporting on page 42 of this report, we concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.

The Board of Directors pursues its responsibility for the oversight of the Company’s accounting policies and procedures, financial statement preparation and internal control over financial reporting through the Audit Committee, comprised exclusively of independent directors.

The Board of Directors fulfills its responsibility for the oversight of the Company’s accounting policies and procedures, financial statement preparation and internal control over financial reporting through the Audit Committee, comprised exclusively of independent directors.

The Audit Committee is responsible for the appointment and compensation of the independent registered public accounting firm.

2 unchanged sentences

We believe that the consolidated financial statements, accompanying notes and related financial information included in this report fairly reflect the form and substance of all material financial transactions and fairly present, in all material respects, the consolidated financial position, results of operations and cash flows as of and for the periods presented.

President and Chief Executive Officer

Chair, President and Chief Executive Officer

Senior Vice President - Finance and Chief Financial Officer

Senior Vice President - Enterprise Finance

Senior Vice President - Enterprise Finance and Chief Accounting Officer

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Sherwin-Williams Company (the Company) as of December 31, 2023, 2022 and 2021, the related statements of consolidated income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2023, and the related notes and the financial statement schedule listed in Item 15(a) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of The Sherwin-Williams Company and subsidiaries (the Company) as of December 31, 2024, 2023 and 2022, the related statements of consolidated income, comprehensive income, cash flows and shareholders’ equity for each of the three years in the period ended December 31, 2024, and the related notes and the financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

44 unchanged sentences

Percent to Net sales 32.1 % 30.6 % 28.6 %

Other general expense (income) - net 67.1 ( 24.9 ) 101.8

Other general (income) expense - net ( 38.8 ) 67.1 ( 24.9 )

Impairment — 57.9 15.5

1 unchanged sentence

Interest income ( 11.0 ) ( 25.2 ) ( 8.0 )

Other expense (income) - net 65.5 47.0 ( 19.5 )

Other (income) expense - net ( 44.7 ) 65.5 47.0

Income before income taxes 3,451.8 3,109.9 2,573.1

Income tax expense 721.1 553.0 384.2

Income taxes 770.4 721.1 553.0

Net income $ 2,681.4 $ 2,388.8 $ 2,020.1

Net income per share:

Net income per common share:

Basic $ 10.68 $ 9.35 $ 7.83

10 unchanged sentences

Net income $ 2,681.4 $ 2,388.8 $ 2,020.1

Other comprehensive income, net of tax:

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments (1)

9 unchanged sentences

( 3.7 ) ( 3.6 ) ( 4.0 )

Other comprehensive income (loss), net of tax 76.3 ( 2.2 ) 19.9

Other comprehensive (loss) income, net of tax ( 250.9 ) 76.3 ( 2.2 )

Comprehensive income $ 2,430.5 $ 2,465.1 $ 2,017.9

(1) The years ended December 31, 2023, 2022 and 2021 include unrealized (losses) gains, net of taxes, of $( 24.9 ) million, $ 34.1 million and $ 37.1 million, respectively, related to net investment hedges.

(2) Net of taxes of $( 2.8 ) million, $( 33.8 ) million and $( 12.6 ) million in 2023, 2022 and 2021, respectively.

(1) The years ended December 31, 2024, 2023 and 2022 include unrealized gains (losses), net of taxes, of $ 53.6 million, $( 24.9 ) million and $ 34.1 million, respectively, related to net investment hedges.

(2) Net of taxes of $( 6.6 ) million, $( 2.8 ) million and $( 33.8 ) million in 2024, 2023 and 2022, respectively.

(3) Net of taxes of $ 4.6 million, $ 5.9 million and $( 1.2 ) million in 2024, 2023 and 2022, respectively .

(4) Net of taxes of $ 1.2 million in 2024 and 2023 and $ 1.1 million in 2022.

See notes to consolidated financial statements.

5 unchanged sentences

Cash and cash equivalents $ 210.4 $ 276.8 $ 198.8

Accounts receivable, less allowance 2,467.9 2,563.6 2,352.4

Accounts receivable, net 2,388.8 2,467.9 2,563.6

Inventories 2,288.1 2,329.8 2,626.5

3 unchanged sentences

Goodwill 7,580.1 7,626.0 7,583.2

Intangible assets, net 3,880.5 4,002.0 4,001.5

Intangible assets 3,533.2 3,880.5 4,002.0

Operating lease right-of-use assets 1,953.8 1,887.4 1,866.8

38 unchanged sentences

Amortization of intangible assets 326.6 330.2 317.1

(Gain) loss on divestiture of business ( 20.1 ) — 111.9

Loss (gain) on extinguishment of debt 12.8 — ( 1.4 )

Gain on divestiture of business — ( 20.1 ) —

Loss on extinguishment of debt — 12.8 —

Impairment — 57.9 15.5

Provisions for environmental-related matters 80.7 ( 7.1 ) ( 4.0 )

Provisions for environmental-related matters - net ( 1.3 ) 80.7 ( 7.1 )

Provisions for restructuring — 15.3 47.3

3 unchanged sentences

Amortization of non-traded investments 75.0 65.4 38.5

Loss (gain) on sale or disposition of assets 0.9 ( 10.7 ) ( 6.1 )

(Gain) loss on sale or disposition of assets ( 49.9 ) 0.9 ( 10.7 )

Other 6.1 7.0 43.9

Change in working capital accounts:

Decrease (increase) in accounts receivable 85.6 ( 200.2 ) ( 287.8 )

Decrease (increase) in inventories 323.4 ( 666.7 ) ( 228.1 )

(Decrease) increase in accounts payable ( 241.1 ) 46.6 346.1

(Increase) decrease in accounts receivable ( 10.7 ) 85.6 ( 200.2 )

(Increase) decrease in inventories ( 32.9 ) 323.4 ( 666.7 )

Increase (decrease) in accounts payable 21.8 ( 241.1 ) 46.6

Decrease in accrued taxes ( 14.3 ) ( 8.9 ) ( 38.1 )

Increase (decrease) in accrued compensation and taxes withheld 75.7 65.8 ( 10.9 )

Decrease (increase) in refundable income taxes 25.8 47.6 ( 38.5 )

(Decrease) increase in accrued compensation and taxes withheld ( 7.9 ) 75.7 65.8

Decrease in refundable income taxes 0.8 25.8 47.6

Other ( 20.7 ) 306.7 32.5

11 unchanged sentences

Financing Activities

Net (decrease) increase in short-term borrowings ( 603.9 ) 214.4 763.9

Net increase (decrease) in short-term borrowings 288.6 ( 603.9 ) 214.4

Proceeds from long-term debt 848.7 — 999.7

9 unchanged sentences

Effect of exchange rate changes on cash ( 6.2 ) 20.0 3.2

Net increase (decrease) in cash and cash equivalents 78.0 33.1 ( 60.9 )

Net (decrease) increase in cash and cash equivalents ( 66.4 ) 78.0 33.1

Cash and cash equivalents at beginning of year 276.8 198.8 165.7

13 unchanged sentences

2,020.1 2,020.1

Other comprehensive income 19.9 19.9

Other comprehensive loss ( 2.2 ) ( 2.2 )

Treasury stock purchased ( 883.2 ) ( 883.2 )

6 unchanged sentences

Net income 2,388.8 2,388.8

Other comprehensive loss ( 2.2 ) ( 2.2 )

Other comprehensive income 76.3 76.3

Treasury stock purchased ( 1,432.0 ) ( 1,432.0 )

Treasury stock issued 11.0 11.0 22.0

Stock-based compensation activity 0.6 229.3 ( 26.0 ) 203.9

4 unchanged sentences

Net income 2,681.4 2,681.4

Other comprehensive income 76.3 76.3

Other comprehensive loss ( 250.9 ) ( 250.9 )

Treasury stock purchased ( 1,738.8 ) ( 1,738.8 )

10 unchanged sentences

Consolidation

The consolidated financial statements include the accounts of The Sherwin-Williams Company and its wholly owned subsidiaries (collectively, the Company).

Inter-company accounts and transactions have been eliminated.

The consolidated financial statements included in this report have been prepared by management of The Sherwin-Williams Company (herein referred to as the Company).

These statements include the accounts of the Company and all consolidated subsidiaries.

Intercompany accounts and transactions have been eliminated.

The Company’s share of earnings or losses from nonconsolidated affiliates is included in the consolidated financial statements using the equity method of accounting when the Company is able to exercise significant influence over the operating and financial decisions of the affiliate.

Use of Estimates

4 unchanged sentences

The Company is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America, with additional operations in the Caribbean region, Europe, Asia and Australia.

Reportable Segments

During the first quarter of 2023, the Company realigned its organizational structure to manage the Latin America architectural paint business within the Consumer Brands Group.

Previously, the Latin America architectural paint business was managed within The Americas Group;

however, Latin America architectural demand and service model trends are shifting to align more closely with the Consumer Brand Group’s strategy.

As a result of the change, The Americas Group has been renamed the Paint Stores Group which now focuses on the core U.S., Canada and Caribbean region stores business.

All reported segment information herein, including comparable prior periods, include the Latin America architectural paint business within the Consumer Brands Group.

See Note 23 for further details on this change and other information on the Company’s reportable segments.

Cash Equivalents

2 unchanged sentences

Accounts receivable are recorded at the time of credit sales, net of an allowance for current expected credit losses.

The Company records an allowance for current expected credit losses to reduce Accounts receivable to the net amount expected to be collected (estimated net realizable value).

Under ASC 326, the Company reviews the collectibility of the Accounts receivable balance each reporting period and estimates the allowance for current expected credit losses based on historical bad debt experience, aging of accounts receivable, current creditworthiness of customers, current economic factors, as well as reasonable and supportable forward-looking information.

The Company records an allowance for current expected credit losses to reduce Accounts receivable to the net amount expected to be collected.

Under Accounting Standards Codification (ASC) 326, the Company reviews the collectibility of the Accounts receivable balance each reporting period and estimates the allowance for current expected credit losses based on historical bad debt experience, aging of accounts receivable, current creditworthiness of customers, current economic factors, as well as reasonable and supportable forward-looking information.

Accounts receivable balances are written-off against the allowance for current expected credit losses if a final determination of uncollectibility is made.

1 unchanged sentence

See Note 18 for further details.

Inventories are stated at the lower of cost or net realizable value with cost determined principally on the last-in, first-out (LIFO) method.

Inventories are stated at the lower of cost or market with cost determined principally on the last-in, first-out (LIFO) method.

Market represents current replacement cost, which is the cost to purchase or reproduce the inventory.

If inventories accounted for on the LIFO method are reduced on a year-over-year basis, then liquidation of certain quantities carried at costs prevailing in prior years occurs.

Management records an estimate of net realizable value for obsolete and discontinued inventories based on historical experience and current trends through reductions to inventory cost by recording a provision included in Cost of goods sold.

If management estimates that the reasonable market value is below cost or determines that future demand was lower than current inventory levels, based on historical experience, current and projected market demand, current and projected volume trends and other relevant current and projected factors associated with the current economic conditions, a reduction in inventory cost to estimated net realizable value is provided for in the reserve for obsolescence.

Management records an estimate of the lower of cost or market whenever the utility of inventory is impaired by damage, deterioration, obsolescence, changes in price levels, or other causes based on historical experience and current trends through reductions to inventory cost by recording a provision included in Cost of goods sold.

If management estimates that the reasonable market value is below cost or determines that future demand was lower than current inventory levels, based on historical experience, current and projected market demand, current and projected volume trends and other relevant current and projected factors associated with the current economic conditions, a reduction in inventory cost to current market price is provided for in the reserve for obsolescence.

See Note 4 for further details.

3 unchanged sentences

Depreciation and amortization are included in the appropriate Cost of goods sold or Selling, general and administrative expenses caption on the Statements of Consolidated Income.

See Note 5 for further details.

Goodwill and Intangible Assets

1 unchanged sentence

Intangible assets include software, customer relationships, intellectual property and trademarks.

In accordance with the Goodwill and Other Intangibles Topic of the Financial Accounting Standards Board (FASB) ASC, goodwill and indefinite-lived trademarks are not amortized, but instead are tested for impairment on an annual basis, as well as whenever an event occurs or circumstances change that indicate impairment has occurred on a more likely than not basis.

In accordance with the Goodwill and Other Intangibles Topic of the ASC, goodwill and indefinite-lived trademarks are not amortized, but instead are tested for impairment on an annual basis, as well as whenever an event occurs or circumstances change that indicate impairment has occurred on a more likely than not basis.

Finite-lived intangible assets are amortized on a straight-line basis over the expected period of benefit, which ranges primarily from 3 to 29 years.

16 unchanged sentences

Non-Traded Investments

The Company has investments in the U.S.

affordable housing and historic renovation real estate markets and certain other investments that have been identified as variable interest entities which qualify for certain tax credits.

However, because the Company does not have the power to direct the day-to-day operations of the investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary.

In accordance with the Consolidation Topic of the ASC, the investments are not consolidated.

For affordable housing investments entered into prior to the January 1, 2015 adoption of Accounting Standards Update (ASU) 2014-01, the Company uses the effective yield method to determine the carrying value of the investments.

Under the effective yield method, the initial cost of the investments is amortized to income tax expense over the period that the tax credits are recognized.

For affordable housing investments entered into on or after the January 1, 2015 adoption of ASU 2014-01, the Company uses the proportional amortization method.

Under the proportional amortization method, the initial cost of the investments is amortized to income tax expense in proportion to the tax credits and other tax benefits received.

The carrying value of the investments are recorded in Other assets.

The liabilities for the estimated future capital contributions are recorded in Other accruals and Other long-term liabilities.

The following table summarizes the balances related to the investments.

The Company has invested in U.S.

affordable housing, historic renovation and other real estate investments (Non-Traded Investments) that have been identified as variable interest entities which qualify for certain tax credits and other tax benefits.

Since the Company does not have the power to direct the day-to-day operations of the Non-Traded Investments and the risk of loss is limited to the amount of contributed capital, the Company is not considered the primary beneficiary.

Therefore, in accordance with the Consolidation Topic of the ASC, the Non-Traded Investments are not consolidated.

Under the Investments - Equity Method and Joint Ventures Topic of the ASC, the Company uses the proportional amortization method, whereby the initial cost and any subsequent changes in the level of investment of Non-Traded Investments are amortized in proportion to the receipt of related tax credits.

The Company reasonably expects amortization based on the receipt of tax credits would produce a measurement substantially similar to amortization based on the receipt of tax credits and other tax benefits.

Both the amortization and related tax credits and other tax benefits are recognized in Income tax expense on the Statements of Consolidated Income.

2024 2023 2022

Amortization of Non-Traded Investments $ 75.0 $ 65.4 $ 38.5

Tax credits and other tax benefits received 104.9 94.8 67.2

The carrying value of Non-Traded Investments is recorded in Other assets.

The liabilities for estimated future capital contributions are recorded in Other accruals and Other long-term liabilities.

In addition, the associated impact of related tax credits and other tax benefits are recorded as a reduction of Accrued taxes and a net deferred income tax asset within Deferred income taxes.

On the Statements of Consolidated Cash Flows, the tax credits and other tax benefits are presented as a change in Accrued taxes and in Deferred income taxes within Operating activities.

Tax credits and other tax benefits reduced Accrued taxes by $ 104.9 million, $ 94.8 million and $ 67.2 million at December 31, 2024, 2023 and 2022, respectively.

The following table summarizes the balances related to Non-Traded Investments and related tax credits and other tax benefits on the Consolidated Balance Sheets:

2024 2023 2022

Other assets $ 744.0 $ 675.0 $ 587.0

1 unchanged sentence

Other long-term liabilities 600.3 568.2 476.5

Net deferred income tax asset 7.6 19.4 23.4

Standby Letters of Credit

26 unchanged sentences

Accrued amounts are primarily recorded on an undiscounted basis and have not been recorded net of insurance proceeds in accordance with the Offsetting Subtopic of the Balance Sheet Topic of the ASC.

Environmental-related expenses include direct costs of investigation and remediation and indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms.

Environmental-related expenses include direct costs of investigation and remediation and

indirect costs such as compensation and benefits for employees directly involved in the investigation and remediation activities and fees paid to outside engineering, consulting and law firms.

See Notes 10 and 19 for further details.

31 unchanged sentences

Also included in Cost of goods sold are research and development costs, quality control, product formulation expenditures and other similar items.

Research and development costs were $ 196.6 million, $ 119.3 million and $ 115.9 million for 2023, 2022 and 2021, respectively.

Research and development costs were $ 217.3 million, $ 196.6 million and $ 119.3 million during 2024, 2023 and 2022, respectively.

Selling, General and Administrative Expenses

6 unchanged sentences

These incentives typically require that the Company maintain specified spending levels and other operational metrics and may be subject to reimbursement if conditions are not met or maintained.

Government incentives are recorded in the Company’s consolidated financial statements in accordance with their purpose as a reduction of expense, a reduction of the cost of the capital investment or other income.

Government incentives are recorded in the Company’s consolidated financial statements in accordance with their purpose as a reduction of expense, a reduction of the cost of the

capital investment or other income.

The benefit of these incentives is recorded when received and all conditions as specified in the agreement are fulfilled.

There were $ 86.6 million of government incentives received as cash payments related to the construction of the Company’s new headquarters and research and development center in 2022.

There were $ 86.6 million of government incentives received as cash payments related to the construction of the Company’s new global headquarters and research and development center in 2022.

These government incentives were recorded as a reduction in the carrying amount of the respective assets under construction within Property, plant and equipment, net on the Consolidated Balance Sheets and within Other as an investing activity on the Statements of Consolidated Cash Flows.

6 unchanged sentences

On the invoice due date, the Company settles the outstanding amount with the respective financial institution.

Liabilities associated with these

arrangements are recorded in Accounts payable on the Consolidated Balance Sheets and amounted to $ 213.1 million, $ 258.1 million and $ 221.7 million at December 31, 2023, 2022 and 2021, respectively.

Liabilities associated with these arrangements are recorded in Accounts payable on the Consolidated Balance Sheets and amounted to $ 215.7 million, $ 213.1 million and $ 258.1 million at December 31, 2024, 2023 and 2022, respectively.

The following table presents a rollforward of the Company’s outstanding obligations under its supplier finance programs for year ended December 31, 2024.

Balance at January 1 $ 213.1

Invoices confirmed during the year 988.8

Confirmed invoices paid during the year ( 986.2 )

Balance at December 31 $ 215.7

Earnings Per Share

4 unchanged sentences

See Note 21 for further details.

Reclassifications

Certain amounts in the consolidated financial statements and notes to the consolidated financial statements for 2022 and 2021 have been reclassified to conform to the 2023 presentation.

NOTE 2 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2023, the Company adopted ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.” This ASU requires disclosure about an entity’s use of supplier finance programs, including the key terms of the programs and the obligations outstanding at the end of the reporting period.

The adoption of ASU 2022-04 did not affect the Company’s financial position, results of operations or cash flows as the standard only impacts financial statement footnote disclosures.

See Note 1 for additional information.

In addition, a required rollforward of activity within the programs will be disclosed prospectively beginning with the annual period ending December 31, 2024.

Effective January 1, 2023, the Company adopted ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Liabilities from Contracts with Customers.” This ASU requires an acquiring entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

The adoption of ASU 2021-08 did not have a material impact on the Company’s financial position, results of operations, cash flows or financial statement footnote disclosures.

Not Yet Adopted

In March 2023, the FASB issued ASU 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323):

Effective January 1, 2024, the Company adopted Accounting Standards Update (ASU) 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for investments in tax credit structures using the proportional amortization method.” This ASU allows entities to apply the proportional amortization method to all tax equity investments if certain conditions are met.

In addition, the ASU requires certain disclosures about the nature and financial implications of tax equity investments on an entity’s financial position, results of operations and cash flows, including the impact of transition on the periods presented, if any.

This ASU is effective for fiscal years and interim periods beginning after December 15, 2023, with early adoption permitted.

The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial position, results of operations or cash flows and the Company will provide required disclosures, as applicable, in accordance will the provisions of the ASU.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

The adoption of the ASU did not materially affect the Company’s financial position, results of operations or cash flows since the Company has historically applied the proportional amortization method to its Non-Traded Investments, however, certain disclosures have been added based on the requirements of the ASU.

See Note 1 for further details.

Effective December 31, 2024, the Company adopted ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” This ASU enhances reportable segment disclosures on both an annual and interim basis primarily in regards to the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within the reported measure(s) of segment profit or loss.

1 unchanged sentence

The ASU also expands disclosure requirements related to the CODM, including how the reported measure(s) of segment profit or loss are used to assess segment performance and allocate resources, the method used to allocate overhead for significant segment expenses and others.

Lastly, all current required annual segment reporting disclosures under Topic 280 are now effective for interim periods.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is evaluating the impact of adopting this ASU.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Lastly, all current required annual segment

reporting disclosures under Topic 280 are now effective for interim periods.

The adoption of the ASU has only impacted the Company’s segment disclosures with no impact to the consolidated financial statements.

See Note 22 for further details.

Effective January 1, 2023, the Company adopted ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.” This ASU includes a requirement to present a rollforward of supply chain financing activity prospectively, beginning with the annual period ending December 31, 2024.

The adoption of ASU 2022-04 did not affect the Company’s financial position, results of operations or cash flows as the standard only impacts financial statement footnote disclosures.

See Note 1 for additional information.

Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” This ASU enhances income tax disclosures by providing information to better assess how an entity’s operations, related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

1 unchanged sentence

Additionally, the ASU requires disclosures relating to income tax expense and payments made to federal, state, local and foreign jurisdictions.

This ASU is effective for fiscal years and interim periods beginning after December 15, 2024.

This ASU is effective for fiscal years beginning after December 15, 2024.

The Company is evaluating the impact of adopting this ASU.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.” This ASU enhances expense disclosures on both an annual and interim basis by requiring public business entities to disclose additional information about specific expense categories in the notes to the consolidated financial statements.

This ASU requires public entities to disclose, in a tabular format, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion, as applicable, for each income statement line item that contains those expenses.

Specific expenses, gains and losses that are already disclosed under existing US GAAP are also required to be included in the disaggregated income statement expense line-item disclosures, and any remaining amounts will need to be described qualitatively.

Additionally, the ASU requires disclosure of the total amount of selling expenses and the entity’s definition of selling expenses.

This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027.

The Company is evaluating the impact of adopting this ASU.

NOTE 3 – ACQUISITIONS AND DIVESTITURES

Subsequent Event

In February 2025, the Company signed an agreement to acquire the Brazilian decorative paints business of BASF SE (BASF), which is a leading provider of architectural paints in Brazil with annual sales of approximately $ 525.0 million.

The business develops, manufactures and sells a comprehensive portfolio of innovative products under the Suvinil and Glasu!

brand names to professional painters, designers, architects, general contractors and consumers across the country.

The business also operates two production facilities located in the Northeast and Southeast regions of Brazil.

The closing of the transaction is subject to receipt of Brazilian antitrust approval, satisfaction or waiver of certain other customary closing conditions, as well as BASF’s completion of its carve-out of all relevant assets, properties, contracts, permits, rights and employees of the decorative paints business into a separate entity.

The Company will acquire all issued and outstanding equity interests in this separate entity for an agreed-upon cash purchase price of $ 1.15 billion, subject to customary post-closing adjustments.

The Company intends to finance the transaction through a combination of cash on hand, liquidity available under existing facilities and new debt.

The acquired business is expected to be reported within the Company’s Consumer Brands Group.

In December 2024, the Company signed an agreement to acquire a European coil and industrial coatings company.

The transaction is subject to customary closing conditions and is expected to close in 2025.

The acquired business will be reported within the Company’s Performance Coatings Group.

Closed in Current Year

In October 2023, the Company completed the acquisition of German-based SIC Holding GmbH, a Peter Möhrle Holding venture comprised of Oskar Nolte GmbH and Klumpp Coatings GmbH (SIC Holding).

This business specializes in foil coatings as well as radiation-cured and waterbased industrial wood coatings for the board, furniture and flooring industry.

The Company funded the acquisition with approximately $ 265 million in cash.

The purchase price is subject to certain closing conditions which are expected to be finalized in 2024.

As of December 31, 2023, $ 110.8 million of finite-lived intangible assets, $ 154.2 million of goodwill, $ 46.1 million of other assets, net of cash and $ 46.7 million of liabilities were recognized from this transaction.

In October 2024, the Company completed the acquisition of a metal packaging coatings business for approximately $ 80 million.

The acquired business develops, manufactures and sells coatings for the food and household product markets and is reported within the Company’s Performance Coatings Group.

As of December 31, 2024, $ 33.0 million of Property, plant and equipment, net, $ 27.9 million of finite-lived intangibles and $ 21.1 million of Goodwill were recognized from this transaction.

The Company expects to finalize the purchase price allocation for the acquisition within the allowable measurement period.

SIC Holding is reported within the Company’s Performance Coatings Group and the results of operations for the acquisition have been included in the consolidated financial statements since the acquisition date.

Pro forma results of operations have not been presented as the impact on the Company’s consolidated financial results is not material.

Closed in 2023

In October 2023, the Company completed the acquisition of German-based SIC Holding GmbH, a Peter Möhrle Holding venture comprised of Oskar Nolte GmbH and Klumpp Coatings GmbH (SIC Holding).

The acquired business specializes in foil coatings as well as radiation-cured and waterbased industrial wood coatings for the board, furniture and flooring industry.

The total purchase price for the acquisition was approximately $ 290 million, including an immaterial amount paid in 2024 to finalize certain representations, warranties and closing conditions.

The Company finalized the purchase price allocation within the allowable measurement period, and $ 110.8 million of finite-lived intangible assets, $ 181.3 million of goodwill, $ 46.0 million of other assets, net of cash and $ 47.5 million of liabilities were recognized from this transaction.

Closed in 2022

In April 2022, the Company completed the acquisition of the European industrial coatings business of Sika AG.

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The aggregate purchase price for the acquisitions completed in 2022 was approximately $ 1.024 billion, including amounts withheld as security for certain representations, warranties and obligations of the sellers.

The purchase price for each acquisition was preliminarily allocated to identifiable assets and liabilities based on information available at the date of acquisition.

As of December 31, 2022, $ 282.8 million of intangible assets and $ 565.8 million of goodwill were recognized from these transactions.

During 2023, the Company revised the purchase price allocation from Goodwill to the various net assets acquired through its 2022 acquisition of ICA.

Goodwill decreased $ 145.9 million and deferred tax liabilities increased $ 57.4 million, partially offset by an increase in finite-lived intangible assets of $ 195.9 million, with the remaining purchase price allocated to various other assets acquired and liabilities assumed in the transaction.

There was no material impact on previously reported financial results from these adjustments.

Furthermore, in accordance with certain purchase agreements, the Company paid $ 29.2 million in 2023 related to holdbacks for acquisitions completed in prior years.

The Company finalized the purchase price allocation for Sika AG, Gross & Perthun GmbH, Dur-A-Flex, Inc., Powdertech Oy Ltd.

and ICA within the allowable measurement period.

These businesses are reported within the Company’s Performance Coatings Group and the results of operations for these acquisitions have been included in the consolidated financial statements since the respective acquisition dates.

Pro forma results of operations have not been presented as the impact on the Company’s consolidated financial results is not material.

Based on the preliminary purchase price allocations for these transactions, as of December 31, 2022, the Company recognized intangible assets and goodwill of $ 282.8 million and $ 565.8 million, respectively, with the remaining purchase price for each transaction allocated to various other assets acquired and liabilities assumed.

In June 2023, purchase price allocation adjustments were made to ICA which decreased goodwill by $ 145.9 million, increased finite-lived intangible assets by $ 195.9 million and increased deferred tax liabilities by $ 57.4 million.

There were no material adjustments related to the other acquisitions that closed in 2022 and the Company finalized the purchase price allocations for these transactions in the allowable measurement period.

In accordance with certain purchase agreements, the Company paid $ 29.2 million in 2023 related to holdbacks for acquisitions completed in prior years.

Closed in 2023

In February 2021, the Company completed the acquisition of a domestic coatings company.

The acquisition expanded the Company’s platform for growth and portfolio of brands and technologies.

In December 2021, the Company completed the acquisition of Specialty Polymers, Inc.

(Specialty Polymers), a leading manufacturer and developer of water-based polymers used in architectural and industrial coatings and other applications.

The acquisition added to the Company’s existing internal resin manufacturing capabilities.

The aggregate purchase price for acquisitions completed in 2021 was approximately $ 227.0 million, including amounts withheld as security for certain representations, warranties and obligations of the sellers.

The purchase price for each acquisition was preliminarily allocated to identifiable assets and liabilities based on information available at the date of acquisition.

As of December 31, 2021, $ 155.6 million of goodwill and $ 11.3 million of intangible assets were recognized from these transactions.

During 2022, the Company made certain adjustments to the preliminary purchase accounting adjustments associated with the net assets acquired in its 2021 acquisition of Specialty Polymers.

The fair value of finite-lived intangible assets increased by $ 61.3 million and property, plant and equipment assets acquired increased by $ 11.0 million, offset by a corresponding net decrease in goodwill.

There was no material impact on previously reported financial results from these adjustments.

The Company completed the preliminary purchase price allocation for the acquisitions completed in 2021 within the allowable measurement period.

Pro forma results of operations have not been presented as the impact on the Company’s consolidated financial results is not material.

Closed in Current Year

The Company completed the divestiture of a non-core domestic aerosol business within the Consumer Brands Group in April 2023.

This transaction resulted in the recognition of a $ 20.1 million gain within the Administrative segment.

This gain was recorded within Other general expense (income) - net (see Note 20).

In April 2023, the Company signed a definitive agreement to divest the China architectural business within the Consumer Brands Group, with annual revenue of approximately $ 100 million and 300 employees.

This transaction resulted in the recognition of a $ 20.1 million gain in 2023 within the Administrative function.

This gain was recorded within Other general (income) expense - net (see Note 19).

During the third quarter of 2023, the Company completed the divestiture of the China architectural business within the Consumer Brands Group.

An immaterial working capital adjustment was finalized during the first quarter of 2024.

The associated net assets were classified as held for sale at June 30, 2023 in accordance with the Property, Plant and Equipment Topic of the ASC.

Following the prescribed order of impairment testing, the Company first reviewed individual tangible and intangible assets under their applicable Topic of the ASC to determine if their carrying value was higher than their respective fair value.

As a result, the Company recorded an impairment charge of $ 6.9 million within the Consumer Brands Group related to China architectural trademarks.

As a result, the Company recorded an impairment charge of $ 6.9 million within the Consumer Brands Group related to China architectural trademarks during 2023.

The Company then compared the updated carrying value of the assets and liabilities comprising the disposal group as a whole to its respective fair value which was determined to be equal to the selling price, less costs to sell.

As a result of this comparison, the Company recorded an additional impairment charge of $ 27.1 million within the Administrative function in the second quarter of 2023.

The fair value of the disposal group was classified as level 2 in the fair value hierarchy as it was based on a specific price and other observable inputs for similar items with no active market.

As a result of this comparison, the Company recorded an additional impairment charge of $ 27.1 million within the Administrative segment.

During the third quarter of 2023, the Company completed the divestiture of the China architectural business.

The Company expects to finalize an immaterial working capital adjustment during 2024.

These divestitures did not meet the criteria to be reported as discontinued operations in the consolidated financial statements as the Company’s decision to divest these businesses did not represent a strategic shift that will have a major effect on the Company’s operations and financial results.

Closed in 2021

In March 2021, the Company divested Wattyl within the Consumer Brands Group, an Australian and New Zealand manufacturer and seller of architectural and protective paint and coatings with annual revenue of approximately $ 200 million.

In connection with this transaction, the Company recognized a loss of $ 111.9 million within the Administrative segment.

This loss was recorded within Other general expense (income) - net (see Note 20).

The Wattyl divestiture did not meet the criteria to be reported as discontinued operations in the consolidated financial statements as the Company’s decision to divest this business did not represent a strategic shift that will have a major effect on the Company’s operations and financial results.

NOTE 4 – RESTRUCTURING

In the fourth quarter of 2022, the Company announced a business restructuring plan (Restructuring Plan) to simplify the Company’s operating model and portfolio of brands within the Consumer Brands Group and to reduce costs in all regions in the Consumer Brands Group, Performance Coatings Group and the Administrative segment.

The actions taken under the Restructuring Plan better position the Company to continue to add long-term shareholder value.

Key focus areas within the Consumer Brands Group included the China architectural business, aerosol portfolio and optimization of the overall retail portfolio.

Multiple alternatives were considered to determine the course of action related to the focus areas.

The Company ultimately determined that divestiture, rather than restructuring, of a non-core domestic aerosol business and the China architectural business was the highest and best use of resources to drive long-term shareholder value.

For more information on these divestitures, see Note 3.

As of December 31, 2023, the Restructuring Plan is complete and no further expense will be incurred.

The following table summarizes the activity associated with the Restructuring Plan:

Consumer Brands

Group Performance

Group Administrative Total

Balance at January 1, 2022 $ — $ — $ — $ —

Severance and related costs 14.5 19.5 — 34.0

Other qualified costs 11.1 2.7 — 13.8

Total 25.6 22.2 — 47.8

Payments, currency, and other adjustments — ( 6.1 ) — ( 6.1 )

Balance at December 31, 2022 25.6 16.1 — 41.7

Severance and related costs 3.6 ( 0.2 ) 1.3 4.7

Other qualified costs 10.6 — — 10.6

Total 14.2 ( 0.2 ) 1.3 15.3

Payments, currency, and other adjustments ( 39.8 ) ( 15.9 ) ( 1.3 ) ( 57.0 )

Balance at December 31, 2023

$ — $ — $ — $ —

Total expense incurred $ 39.8 $ 22.0 $ 1.3 $ 63.1

In addition to the provisions above, which were primarily recorded in Cost of goods sold and Selling, general and administrative expense, trademark impairment related to the Restructuring Plan of $ 15.5 million was also recorded in the Consumer Brands Group in 2022.

See Note 7 for further information.

NOTE 4 – INVENTORIES

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Inventories $ 2,288.1 $ 2,329.8 $ 2,626.5

Inventories were stated at the lower of cost or net realizable value, with cost primarily determined on the LIFO method.

Inventories were stated at the lower of cost or market, with cost primarily determined on the LIFO method.

Management believes that the use of LIFO results in a better matching of costs and revenues.

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During 2024 and 2023, certain inventories accounted for on the LIFO method were reduced, resulting in the liquidation of certain quantities carried at costs prevailing in prior years.

The 2023 and 2021 liquidations increased Net income in those years by $ 1.2 million and $ 25.8 million, respectively.

The Company recorded a reserve for obsolescence of $ 170.8 million, $ 139.0 million and $ 118.6 million at December 31, 2023, 2022 and 2021, respectively, to reduce Inventories to their estimated net realizable value.

The 2024 and 2023 liquidations increased Net income by $ 4.8 million and $ 1.2 million, respectively.

There were no liquidations in 2022.

The Company recorded a reserve for obsolescence of $ 137.7 million, $ 170.8 million and $ 139.0 million at December 31, 2024, 2023 and 2022, respectively, to reduce Inventories to their estimated current market price.

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

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Property, plant and equipment, net $ 3,533.2 $ 2,836.8 $ 2,207.0

In accordance with the Property, Plant and Equipment Topic of the ASC, whenever events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable or the useful life may have changed, impairment tests are to be performed.

The Company capitalizes interest costs incurred in the construction of certain property, plant and equipment.

In 2024 and 2023, the Company capitalized interest of $ 59.6 million and $ 30.7 million, respectively.

There was no interest capitalized in 2022.

Undiscounted cash flows are used to calculate the recoverable value of long-lived assets to determine if such assets are not recoverable.

If the carrying value of the assets is deemed to not be recoverable, the impairment to be recognized is the amount by which the carrying value of the assets exceeds the estimated fair value of the assets as determined in accordance with the Fair Value Topic of the ASC.

See Note 3 for information on the impairment tests performed in the second quarter of 2023 for the assets held for sale prior to the divestiture of the China architectural business.

See Note 3 for information on the impairment tests performed in 2023 for the assets held for sale prior to the divestiture of the China architectural business.

No other material impairments of Property, plant and equipment were recorded in 2024, 2023 or 2022.

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS

In October 2023, the Company completed the acquisition of SIC Holding, which resulted in the recognition of goodwill of $ 154.2 million and finite-lived intangibles of $ 110.8 million.

In 2024, the Company completed the acquisition of a metal packaging coatings business, which resulted in the recognition of goodwill of $ 21.1 million and finite-lived intangibles of $ 27.9 million.

The acquired intangibles are being amortized over a weighted-average useful life of approximately 15 years.

In addition, during 2023, the Company divested a non-core domestic aerosol business and its China architectural business.

During 2023, the Company completed the acquisition of SIC Holding, which resulted in the recognition of goodwill of $ 181.3 million and finite-lived intangibles of $ 110.8 million.

The acquired intangibles are being amortized over a weighted-average useful life of approximately 15 years.

During 2022, the Company acquired five companies which resulted in the recognition of goodwill of $ 419.9 million and finite-lived intangibles of $ 478.6 million.

As a result of certain adjustments to the preliminary purchase price accounting during 2023, goodwill decreased $ 145.9 million and the fair value of finite-lived intangible assets increased by $ 195.9 million.

The acquired intangibles are being amortized over a weighted-average useful life of approximately 14 years.

During 2021, the Company acquired two companies which resulted in the recognition of goodwill of $ 155.6 million and finite-lived intangibles of $ 11.3 million.

As a result of certain adjustments to the preliminary purchase accounting during 2022, goodwill decreased by $ 72.3 million and the fair value of finite-lived intangibles assets increased by $ 61.3 million.

In addition, during 2021, the Company divested its Wattyl business in Australia and New Zealand.

See Note 3 for additional information related to the acquisitions and divestitures.

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Should a quantitative impairment test be performed, values are estimated separately for goodwill and indefinite-lived intangible assets using applicable valuation models, incorporating discount rates commensurate with the risks involved for each group of assets.

The annual impairment review performed as of October 1, 2024 did not result in any trademark or goodwill impairment.

As a result of the Latin America architectural paint business moving to the Consumer Brands Group reportable segment effective January 1, 2023, the Company performed a quantitative impairment analysis for the impacted reporting units and determined both before and after the change, there was no indication of impairment.

The annual impairment review performed as of October 1, 2023 resulted in no goodwill impairment and trademark impairment of $ 23.9 million in the Consumer Brands Group primarily related to a trademark in Europe.

The annual impairment review performed as of October 1, 2022, which incorporated the impact of the Restructuring Plan, resulted in trademark impairments totaling $ 15.5 million in the Consumer Brands Group related to the discontinuation of an architectural paint brand and lower

than anticipated sales of an acquired brand and no goodwill impairment.

The annual impairment review performed as of October 1, 2021 did not result in any trademark or goodwill impairment.

The annual impairment review performed as of October 1, 2022 resulted in trademark impairments totaling $ 15.5 million in the Consumer Brands Group related to the discontinuation of an architectural paint brand and lower than anticipated sales of an acquired brand and no goodwill impairment.

A summary of changes in the Company’s carrying value of Goodwill by Reportable Segment is as follows:

4 unchanged sentences

$ 2,182.1 $ 1,783.4 $ 3,169.1 $ 7,134.6

Reclassification related to segment change (2)

( 74.5 ) 74.5 —

Acquisitions 155.6 155.6

Acquisitions and acquisition adjustments 49.7 21.3 422.5 493.5

Currency and other adjustments ( 2.8 ) ( 42.1 ) ( 44.9 )

10 unchanged sentences

(1) Net of accumulated impairment losses of $ 19.4 million ($ 10.2 million in Paint Stores Group, $ 8.4 million in Consumer Brands Group and $ 0.8 million in Performance Coatings Group).

(2) Effective January 1, 2023, the Company realigned its organizational structure to manage the Latin America architectural paint business within the Consumer Brands Group.

Goodwill balances have been retrospectively adjusted to reflect the change.

A summary of the Company’s carrying value of Intangible assets is as follows:

15 unchanged sentences

Net value $ 32.1 $ 1,989.1 $ 1,255.1 $ 169.5 $ 3,445.8 $ 556.2 $ 4,002.0

(1) Trademarks are net of accumulated impairment losses of $ 163.8 million , $ 139.9 million, and $ 124.4 million as of December 31, 2023, 2022 and 2021, respectively.

(1) Trademarks are net of accumulated impairment losses of $ 163.8 million as of December 31, 2024 and 2023 and $ 139.9 million as of December 31, 2022.

Amortization of finite-lived intangible assets is estimated as follows for the next five years:

$ 317.2 million in 2025, $ 315.3 million in 2026, $ 310.5 million in 2027, $ 307.5 million in 2028 and $ 305.9 million in 2029.

Although the Company believes its estimates of fair value related to reporting units and indefinite-lived intangible assets are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such

Although the Company believes its estimates of fair value related to reporting units and indefinite-lived intangible assets are reasonable, actual financial results could differ from these estimates due to the inherent uncertainty involved in making such estimates.

Changes in assumptions concerning future financial results or other underlying assumptions could have a significant impact and future impairment charges may be required.

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Long-Term Debt

The table below summarizes the carrying value of the Company’s outstanding debt, net of capitalized debt issuance costs and discounts:

The table below summarizes the carrying value of the Company’s outstanding debt, net of capitalized debt issuance costs, discounts and premiums:

Due Date 2024 2023 2022

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Through 2026 0.2 0.9 1.6

7.375 % Debentures

2027 — 119.2 119.2

7.45 % Debentures

4.05 % Senior Notes

2024 — 598.8 596.9

1 unchanged sentence

2024 — 499.7 499.0

7.375 % Debentures

2027 — — 119.2

7.45 % Debentures

9,226.0 9,476.7 9,591.6

Less amounts due within one year 1,049.2 1,098.8 0.6

Long-term debt $ 8,176.8 $ 8,377.9 $ 9,591.0

(1) Net of capitalized debt issuance costs of $ 49.3 million, $ 57.3 million and $ 57.6 million and net of discounts of $ 25.2 million, $ 25.7 million, and $ 26.0 million at December 31, 2023, 2022 and 2021, respectively.

(1) Net of capitalized debt issuance costs of $ 48.6 million, $ 49.3 million and $ 57.3 million and net of discounts and premiums of $ 26.0 million, $ 25.2 million and $ 25.7 million at December 31, 2024, 2023 and 2022, respectively.

Maturities of long-term debt are as follows for the next five years:

$ 1.050 billion in 2025;

$ 1.051 billion in 2025;

$ 350.2 million in 2026;

$ 1.500 billion in 2027 and none in 2028.

$ 1.500 billion in 2027;

$ 400.0 million in 2028 and $ 800.0 million in 2029.

Interest expense on long-term debt was $ 354.7 million, $ 374.6 million and $ 348.4 million for 2024, 2023 and 2022, respectively.

In August 2024, the Company repaid principal of $ 600.0 million related to the Company’s 4.05 % senior notes due August 8, 2024 using commercial paper and subsequently issued $ 400.0 million of 4.55 % senior notes due 2028 and $ 450.0 million of 4.80 % senior notes due 2031 in a public offering.

The net proceeds from the issuance of these notes were used to repay outstanding borrowings under the Company’s domestic commercial paper program and for general corporate purposes.

The newly issued senior notes contain customary qualitative covenants as defined in their respective agreements.

During the second quarter of 2024, the Company repaid the principal of $ 500.0 million related to its 3.125 % senior notes due June 1, 2024 using commercial paper.

In December 2023, the Company exercised its call provision to make-whole the entire outstanding $ 119.4 million aggregate principal amount of its 7.38 % Debentures due 2027 and the entire outstanding $ 3.5 million aggregate principal amount of its 7.45 % Debentures due 2097.

The retirement of the Debentures resulted in a loss of $ 12.8 million recorded in Other general expense (income) - net.

The retirement of the Debentures resulted in a loss of $ 12.8 million recorded in Other general (income) expense - net.

In August 2022, the Company issued $ 600.0 million of 4.05 % Senior Notes due August 2024 and $ 400.0 million of 4.25 % Senior Notes due August 2025 in a public offering.

The net proceeds from the issuance of these notes were used to repay borrowings outstanding under the Company’s credit agreement dated May 9, 2016, as amended, and the domestic commercial paper program.

In November 2021, the Company issued $ 500.0 million of 2.20 % Senior Notes due March 2032 and $ 500.0 million of 2.90 % Senior Notes due March 2052 in a public offering.

The net proceeds from the issuance of these notes were used to repay outstanding borrowings under the Company’s domestic commercial paper program.

In October 2021, the Company exercised its optional redemption rights to redeem the entire outstanding $ 400.0 million aggregate principal amount of its 4.20 % Senior Notes due 2022 and its 4.20 % Notes due 2022 initially issued by The Valspar Corporation (collectively, the 4.20 % Senior Notes).

The 4.20 % Senior Notes were redeemed at a redemption price equal to 100 % of the principal amount, plus accrued interest, and resulted in a gain of $ 1.4 million recorded in Other expense (income) - net .

Among other restrictions, the Company’s notes, debentures and revolving credit agreement contain certain covenants relating to liens, ratings changes, merger and sale of assets, consolidated leverage and change of control, as defined in the agreements.

In the event of default under any one of these arrangements, acceleration of the maturity of any one or more of these borrowings may result.

The Company was in compliance with all covenants for all years presented.

The net proceeds from the issuance of these notes were used to repay

borrowings outstanding under the Company’s credit agreement dated May 9, 2016, as amended, and the domestic commercial paper program.

Short-Term Borrowings

On August 30, 2022, the Company and two of its wholly-owned subsidiaries, Sherwin-Williams Canada Inc.

(SW Canada) and Sherwin-Williams Luxembourg S.à r.l.

(SW Luxembourg, together with the Company and SW Canada, the Borrowers), entered into a new five-year $ 2.250 billion credit agreement (2022 Credit Agreement).

The 2022 Credit Agreement may be used for general corporate purposes, including the financing of working capital requirements.

The 2022 Credit Agreement replaced the $ 2.000 billion credit agreement dated June 29, 2021, as amended, which was terminated effective August 30, 2022.

The 2022 Credit Agreement will mature on August 30, 2027 and provides that the Company may request to extend the maturity date of the facility for two additional one-year periods.

In addition, the 2022 Credit Agreement provides that the Borrowers may increase the aggregate size of the facility up to an additional amount of $ 750.0 million, subject to the discretion of each lender to participate in the increase, and the Borrowers may request letters of credit in an amount of up to $ 250.0 million.

On August 2, 2021, the Company entered into an amended and restated $ 625.0 million credit agreement (2021 Credit Agreement), which amends and restates the five-year credit agreement entered into in September 2017.

In November 2024, the Company amended its credit agreement dated May 9, 2016, as amended, to extend the maturity of $ 75.0 million of the commitments available for borrowing and obtaining the issuance, renewal, extension and increase of a letter of credit under the credit agreement from June 20, 2025 to December 20, 2029.

In July 2024, the Company entered into a new $ 2.500 billion revolving credit agreement maturing on July 31, 2029 (2024 Credit Agreement), which replaced the the 2022 Credit Agreement.

Under the terms of the 2024 Credit Agreement, the Company may request to extend the maturity date for two additional one-year periods, request an uncommitted increase up to $ 750.0 million and issue letters of credit under a $ 250.0 million subfacility.

In August 2022, the Company entered into a five-year credit agreement (2022 Credit Agreement), which replaced the $ 2.000 billion credit agreement dated June 29, 2021.

The 2022 Credit Agreement gave the Company the right to borrow $ 2.250 billion and to obtain letters of credit in an amount of up to $ 250.0 million.

In August 2021, the Company entered into an amended and restated $ 625.0 million credit agreement (2021 Credit Agreement), which amends and restates the five-year credit agreement entered into in September 2017.

The 2021 Credit Agreement was subsequently amended on multiple dates to extend the maturity of commitments available for borrowing or letters of credit under the agreement.

On May 9, 2016, the Company entered into a five-year credit agreement (2016 Credit Agreement), subsequently amended on multiple dates to extend the maturity of commitments available for borrowing or letters of credit under the agreement.

In May 2016, the Company entered into a five-year credit agreement (2016 Credit Agreement), subsequently amended on multiple dates to extend the maturity of commitments available for borrowing or letters of credit under the agreement.

The 2016 credit agreement gives the Company the right to borrow and obtain letters of credit up to an aggregate availability of $ 875.0 million.

These credit agreements are being used for general corporate purposes.

These credit agreements are/were used for general corporate purposes, including the financing of working capital requirements.

At December 31, 2024, 2023 and 2022, there were no borrowings outstanding under these credit agreements.

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Interest expense on Short-term borrowings was $ 61.0 million, $ 42.9 million and $ 42.4 million for 2024, 2023 and 2022, respectively.

In the event of default under any one of these arrangements, acceleration of the maturity of any one or more of these borrowings may result.

The Company was in compliance with all covenants for all years presented.

NOTE 8 – PENSION, HEALTH CARE AND OTHER POSTRETIREMENT BENEFITS

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The plan was funded in accordance with all applicable regulations at December 31, 2024.

The Company has thirty-three foreign defined benefit pension plans.

At December 31, 2023, twenty-six of the Company’s foreign defined benefit pension plans were unfunded or underfunded, with combined accumulated benefit obligations, projected benefit obligations, fair values of net assets and deficiencies of plan assets of $ 76.0 million, $ 89.4 million, $ 20.4 million and $ 69.0 million, respectively.

The Company has thirty-six foreign defined benefit pension plans.

At December 31, 2024, twenty-nine of the Company’s foreign defined benefit pension plans were unfunded or underfunded, with combined accumulated benefit obligations, projected benefit obligations, fair values of net assets and deficiencies of plan assets of $ 73.9 million, $ 88.3 million, $ 20.5 million and $ 67.8 million, respectively.

The Company expects to make the following benefit payments for all domestic and foreign defined benefit pension plans:

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Ongoing pension cost 0.9 1.6 1.2 3.9 2.2 4.2

Settlement (credits) costs ( 1.1 ) ( 0.3 ) 0.3

Settlement credits ( 1.1 ) ( 0.3 )

Curtailment cost 7.1

Net pension cost 0.9 1.6 1.2 11.0 1.1 3.9

5 unchanged sentences

Amortization of prior service (cost) credit ( 1.9 ) ( 1.3 ) ( 1.0 ) ( 7.0 ) 0.2 0.2

Loss (gain) recognized for settlement 1.1 0.3 ( 0.3 )

Exchange rate (loss) recognized during the year ( 1.5 ) ( 0.4 ) ( 0.6 )

Loss recognized for settlement 1.1 0.3

Exchange rate loss (gain) recognized during the year 1.6 ( 1.5 ) ( 0.4 )

Total recognized in AOCI ( 21.3 ) ( 6.9 ) 5.6 ( 5.2 ) 8.2 ( 30.0 )

1 unchanged sentence

$ ( 20.4 ) $ ( 5.3 ) $ 6.8 $ 5.8 $ 9.3 $ ( 26.1 )

Service cost is recorded in Cost of goods sold and Selling, general and administrative expense.

All other components of Net pension costs are recorded in Other expense (income) - net.

Service cost is recorded in Cost of goods sold and Selling, general and administrative expenses.

All other components of Net pension costs are recorded in Other (income) expense - net.

In December 2024, the Company amended one of its foreign defined benefit plans to freeze future benefit accruals as of December 31, 2024.

As a result of the amendment, the Company recognized a non-cash pre-tax curtailment charge of $ 7.1 million primarily related to the acceleration of amounts previously recorded within AOCI in the Statements of Consolidated Comprehensive Income.

The Company employs a total return investment approach for the domestic and foreign defined benefit pension plan assets.

1 unchanged sentence

In determining the expected long-term rate of return on defined benefit pension plan assets, management considers the historical rates of return, the nature of investments and an expectation of future investment strategies.

The target allocations for plan assets are 30 % – 65 % equity securities, 35 % – 70 % fixed income securities and 0 % – 5 % other (including alternative investments and cash).

The target allocations for the domestic defined benefit pension plan assets are 35 % – 65 % equity securities, 35 % – 65 % fixed income securities and 0 % – 5 % other (including alternative investments and cash).

The target allocations for the foreign defined benefit pension plan assets vary by plan, but are generally within the following ranges:

0 % – 20 % equity securities, 75 % – 100 % fixed income securities and 0 % – 10 % other (including alternative investments and cash).

The following tables summarize the fair value of the defined benefit pension plan assets at December 31, 2024, 2023 and 2022.

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Investments at fair value:

Cash and cash equivalents $ 8.7 $ 8.7 $ —

Equity investments (1)

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Fixed income investments (2)

188.9 36.8 152.1

Other assets (3)

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(1) This category includes actively managed equity assets that track primarily to the S&P 500 or an international equity index.

(2) This category includes government and corporate bonds that track primarily to the Barclays Capital Aggregate Bond Index or an international bond index.

(3) This category includes real estate and pooled investment funds.

(2) This category includes government and corporate bonds that track primarily to a domestic or an international bond index.

(3) This category primarily includes insurance contracts and real estate.

(4) This category includes pooled investment funds and private equity funds that are measured at NAV or its equivalent using the practical expedient.

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Interest cost 4.9 4.6 3.2 11.8 11.8 7.3

Actuarial losses (gains) 2.8 ( 32.6 ) ( 2.8 ) 8.8 ( 112.4 ) ( 26.0 )

Contributions and other 3.0 1.6 1.4 2.0 3.2 ( 4.6 )

Actuarial (gains) losses ( 11.1 ) 2.8 ( 32.6 ) ( 19.8 ) 8.8 ( 112.4 )

Plan amendments and other 1.0 3.0 1.6 13.5 2.0 3.2

Settlements ( 2.2 ) ( 3.7 ) ( 2.4 )

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Amounts recognized in AOCI:

Net actuarial gains (losses) $ 12.9 $ 4.7 $ ( 54.0 )

Net actuarial gains $ 21.0 $ 12.9 $ 4.7

Prior service credits 16.2 40.0 64.0

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Prescription drug cost increases 11.75 % 9.00 % 8.25 %

Employer Group Waiver Plan (EGWP) trend rate N/A N/A 8.25 %

Weighted-average assumptions used to determine net periodic benefit cost:

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2024 2023 2022

Net periodic benefit cost:

Net periodic benefit (credit) cost:

Service cost $ 0.5 $ 0.6 $ 1.2

Interest cost 6.8 7.4 6.0

Amortization of actuarial losses 0.1 4.2 4.7

Amortization of prior service (credit) cost ( 23.9 ) ( 0.4 ) 0.3

Net periodic benefit cost ( 15.8 ) 11.0 11.3

Amortization of actuarial (gains) losses ( 0.4 ) 0.1 4.2

Amortization of prior service credit ( 23.9 ) ( 23.9 ) ( 0.4 )

Net periodic benefit (credit) cost ( 17.0 ) ( 15.8 ) 11.0

Other changes in projected benefit obligation recognized in

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Prior service credit arising during the year ( 62.8 )

Amortization of actuarial losses ( 0.1 ) ( 4.2 ) ( 4.7 )

Amortization of prior service credit (cost) 23.9 0.4 ( 0.3 )

Amortization of actuarial gains (losses) 0.4 ( 0.1 ) ( 4.2 )

Amortization of prior service credit 23.9 23.9 0.4

Total recognized in AOCI 15.7 15.8 ( 121.1 )

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NOTE 9 – LEASES

The Company leases retail stores, manufacturing and distribution facilities, office space and equipment under operating lease agreements.

Operating lease right-of-use (ROU) assets and lease liabilities are recognized based on the present value of lease payments over the lease term.

The majority of the ROU asset and lease liability balances relate to the retail operations of the Paint Stores Group.

The Company leases retail stores, manufacturing and distribution facilities, office space and equipment under operating and finance lease agreements.

Operating leases are included in Operating lease right-of-use (ROU) assets, Current portion of operating lease liabilities and Long-term operating lease liabilities on the Consolidated Balance Sheets.

Finance leases are included in Other assets, Other accruals and Other long-term liabilities on the Consolidated Balance Sheets.

The finance lease related asset and liability as of December 31, 2024 was $ 187.5 million and $ 189.3 million , respectively.

Operating and finance lease ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term.

The majority of the operating lease ROU asset and lease liability balances are related to the retail operations of the Paint Stores Group.

The majority of the finance lease ROU asset and lease liability balances are related to a distribution facility within the Consumer Brands Group.

Most leases include one or more options to renew.

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2024 2023 2022

Components of Lease Expense

Operating lease cost

$ 562.4 $ 528.5 $ 498.0

Finance lease cost:

Amortization of right-of-use assets $ 0.7

Interest on lease liabilities 1.5

Total $ 2.2 $ — $ —

Short-term lease cost $ 69.6 $ 58.5 $ 47.1

Variable lease cost $ 132.1 $ 104.1 $ 89.9

Supplemental Cash Flow Information

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflows from operating leases $ 545.5 $ 513.8 $ 480.1

Leased assets obtained in exchange for new operating lease liabilities $ 473.3 $ 463.1 $ 505.2

Weighted average remaining lease term 5.5 years 5.6 years 5.8 years

Weighted average discount rate

Operating cash outflows from finance leases 0.2

Financing cash outflows from finance leases 0.2

Leased assets obtained in exchange for new lease liabilities:

Operating leases $ 526.9 $ 473.3 $ 463.1

Finance leases 188.2

2024 2023 2022

The following table reconciles the undiscounted cash flows for each of the next five years and thereafter to the operating lease liabilities recognized on the Consolidated Balance Sheets as of December 31, 2023.

Supplemental Balance Sheet Information

Operating Leases:

Operating lease right-of-use assets $ 1,953.8 $ 1,887.4 $ 1,866.8

Current portion of operating lease liabilities 466.6 449.3 425.3

Long-term operating lease liabilities 1,558.3 1,509.5 1,512.9

Finance Leases:

Other assets $ 187.5

Other accruals 3.7

Other long-term liabilities 185.6

Other Supplemental Information

Weighted average remaining lease term:

Operating leases 5.5 years 5.5 years 5.6 years

Finance leases 43.4 years

Weighted average discount rate:

Operating leases 4.2 % 3.8 % 3.3 %

Finance leases 5.5 %

The following table reconciles the undiscounted cash flows for each of the next five years and thereafter to the operating and finance lease liabilities recognized on the Consolidated Balance Sheets as of December 31, 2024.

The reconciliation excludes short-term leases that are not recorded on the Consolidated Balance Sheets.

Operating Leases Finance Leases

Year Ending December 31,

2025 $ 540.4 $ 9.1

2026 466.9 8.2

2027 378.7 8.4

2028 289.3 8.6

2029 200.5 8.8

Thereafter 413.3 586.6

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Amount representing interest ( 264.2 ) ( 440.4 )

Present value of operating lease liabilities $ 1,958.8

Present value of lease liabilities $ 2,024.9 $ 189.3

NOTE 10 – OTHER LONG-TERM LIABILITIES

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The Company routinely assesses its potential liability for investigation and remediation-related activities and adjusts its environmental-related accruals as information becomes available, including as a result of sites progressing through investigation and remediation-related activities, upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued.

At December 31, 2023, 2022 and 2021, the Company had accruals reported on the balance sheet as Other long-term liabilities of $ 230.8 million, $ 240.2 million and $ 277.4 million, respectively.

Estimated costs of current investigation and remediation activities of $ 88.1 million, $ 50.2 million and $ 45.9 million are included in Other accruals at December 31, 2023, 2022 and 2021, respectively.

At December 31, 2024, 2023 and 2022, the Company had accruals reported on the Consolidated Balance Sheets as Other long-term liabilities of $ 230.3 million, $ 230.8 million and $ 240.2 million, respectively.

Estimated costs of current investigation and remediation activities of $ 66.4 million, $ 88.1 million and $ 50.2 million are included in Other accruals on the Consolidated Balance Sheets at December 31, 2024, 2023 and 2022, respectively.

Actual costs incurred may vary from the accrued estimates due to the inherent uncertainties involved including, among others, the number and financial condition of parties involved with respect to any given site, the volumetric contribution which may be attributed to the Company relative to that attributed to other parties, the nature and magnitude of the wastes involved, the various technologies that can be used for remediation and the determination of acceptable remediation with respect to a particular site.

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Real Estate Financing

The Company has entered into certain sale-leaseback agreements that do not qualify as asset sales and were accounted for as real estate financing transactions.

These arrangements primarily consist of the new headquarters currently under construction, for which the Company expects to receive total proceeds approximating $ 800 million to $ 850 million on an incremental basis until the completion of construction.

In 2023 and 2022, the Company received $ 305.0 million and $ 210.0 million, respectively.

The net proceeds from this transaction and other real estate financing transactions are recognized within the Financing Activities section of the Statements of Consolidated Cash Flows.

The corresponding financing obligation for the new headquarters was $ 515.8 million and $ 207.0 million at December 31, 2023 and 2022, respectively, on the Consolidated Balance Sheets.

The short-term portion of the liability recorded in Other accruals was $ 39.9 million and $ 20.0 million at December 31, 2023 and 2022, respectively.

During 2023, $ 23.8 million of interest was capitalized with the long-term portion of the liability in Other long-term liabilities.

Future payments are estimated to be $ 40 million during the next twelve months, which is the remaining estimated construction period.

At the completion of construction, the Company will calculate the remaining obligation under the terms of lease.

In December 2022, the Company closed a transaction to sell and subsequently lease back its partially-constructed new global headquarters.

As a result of this transaction, the Company has entered into certain sale-leaseback agreements that do not qualify as asset sales and were accounted for as real estate financing transactions.

Net proceeds are recognized within the Financing Activities section in the Statements of Consolidated Cash Flows.

The Company expects to receive total proceeds approximating $ 800 million to $ 850 million on an incremental basis until the completion of construction of the new global headquarters.

The Company expects to receive the final proceeds for the new global headquarters in the first quarter of 2025, at which point the Company will calculate the remaining obligation under the terms of the lease.

The following table summarizes the activity related to this transaction and the corresponding balances recognized in the Consolidated Balance Sheets.

2024 2023 2022

Proceeds received $ 244.2 $ 305.0 $ 210.0

Capitalized interest (1)

Short-term liability (2)

$ 49.7 $ 39.9 $ 20.0

Long-term liability (3)

715.9 475.9 187.0

Total liability $ 765.6 $ 515.8 $ 207.0

(1) Interest is capitalized within construction in progress in Property, plant and equipment, net.

(2) The short-term portion of the liability is recorded in Other accruals.

(3) The long-term portion of the liability is recorded in Other long-term liabilities.

NOTE 11 – LITIGATION

In the course of its business, the Company is subject to a variety of claims and lawsuits, including, but not limited to, litigation relating to product liability and warranty, personal injury, environmental, intellectual property, commercial, contractual and antitrust claims, that are inherently subject to many uncertainties regarding the possibility of a loss to the Company.

Uncertainties to which litigation is inherently subject include, among other things, costs, unpredictable court or jury decisions that could affect other litigation against the Company and encourage an increase in the number and nature of future claims and proceedings and differing laws and regulations in jurisdictions where the Company operates.

These uncertainties will ultimately be resolved when one or more future events occur or fail to occur confirming the incurrence of a liability or the reduction of a liability.

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In those cases where no accrual is recorded or exposure to loss exists in excess of the amount accrued, the Contingencies Topic of the ASC requires disclosure of the contingency when there is a reasonable possibility that a loss or additional loss may have been incurred.

Due to the uncertainties involved in litigation, management is unable to predict the outcome of the litigation identified below, the number or nature of possible future claims and proceedings or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company.

In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation, or resulting from any such legislation and regulations.

With respect to the litigation identified below, the Company has only accrued for the court-approved agreement related to the California Proceedings, identified in the Public Nuisance Claim Litigation section.

For the remaining litigation identified below, the Company does not believe it is probable that a loss has occurred, or the Company believes it is not possible to estimate the range of potential losses.

In addition, any potential liability that may result from any changes to legislation and regulations cannot reasonably be estimated.

Due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity, or financial condition.

An estimate of the potential impact on the Company’s results of operations, cash flow, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

Lead pigment and lead-based paint litigation.

The Company’s past operations included the manufacture and sale of lead pigments and lead-based paints.

The Company, along with other companies, is and has been a defendant in a number of legal proceedings, including individual personal injury actions, purported class actions, and actions brought by various counties, cities, school districts and other government-related entities, arising from the manufacture and sale of lead pigments and lead-based paints.

The Company, along with other companies, is and has been a defendant in a number of legal proceedings arising from the manufacture and sale of lead pigments and lead-based paints.

The plaintiffs’ claims have been based upon various legal theories, including negligence, strict liability, breach of warranty, negligent misrepresentations and omissions, fraudulent misrepresentations and omissions, concert of action, civil conspiracy, violations of unfair trade practice and consumer protection laws, enterprise liability, market share liability, public nuisance, unjust enrichment and other theories.

The plaintiffs have sought various damages and relief, including personal injury and property damage, costs relating to the detection and abatement of lead-based paint from buildings, costs associated with a public education campaign, medical monitoring costs and others.

The Company has also been a defendant in legal proceedings arising from the manufacture and sale of non-lead-based paints that seek recovery based upon various legal theories, including the failure to adequately warn of potential exposure to lead during surface preparation when using non-lead-based paint on surfaces previously painted with lead-based paint.

The Company believes that the litigation brought to date is without merit or subject to meritorious defenses and is vigorously defending such litigation.

The Company expects that additional lead pigment and lead-based paint litigation may be filed against the Company in the future asserting similar or different legal theories and seeking similar or different types of damages and relief.

The Company will continue to vigorously defend against any additional lead pigment and lead-based paint litigation that may be filed, including utilizing all avenues of appeal, if necessary.

Notwithstanding the Company’s views on the merits, litigation is inherently subject to many uncertainties, and the Company ultimately may not prevail.

Adverse court rulings or determinations of liability, among other factors, could affect the lead pigment and lead-based paint litigation against the Company and encourage an increase in the number and nature of future claims and proceedings.

Other than the California Proceedings and currently pending cases, all of these legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings.

In addition, from time to time, various legislation and administrative regulations have been enacted, promulgated or proposed to impose obligations on present and former manufacturers of lead pigments and lead-based paints respecting asserted health concerns associated with such products or to overturn the effect of court decisions in which the Company and other manufacturers have been successful.

Due to the uncertainties involved, management is unable to predict the outcome of the lead pigment and lead-based paint litigation, the number or nature of possible future claims and proceedings or the effect that any legislation and/or administrative regulations may have on the litigation or against the Company.

In addition, management cannot reasonably determine the scope or amount of the potential costs and liabilities related to such litigation or resulting from any such legislation and regulations.

Except with respect to the litigation in the California Proceedings, discussed below, the Company has not accrued any amounts for such litigation because the Company does not believe it is probable that a loss has occurred, or the Company believes it is not possible to estimate the range of potential losses as there is no substantive information upon which an estimate could be based.

In addition, any potential liability that may result from any changes to legislation and regulations cannot reasonably be estimated.

Due to the uncertainties associated with the amount of any such liability and/or the nature of any other remedy which may be imposed in such litigation, any potential liability determined to be attributable to the Company arising out of such litigation may have a material adverse effect on the Company’s results of operations, liquidity or financial condition.

An estimate of the potential impact on the Company’s results of operations, cash flow, liquidity or financial condition cannot be made due to the aforementioned uncertainties.

The Company is vigorously defending all lead pigment and lead-based paint litigation.

The Company will continue to vigorously defend against any additional litigation that may be filed, including utilizing all avenues of appeal, if necessary.

Public Nuisance Claim Litigation .

The Company and other companies are or were defendants in legal proceedings seeking recovery based on public nuisance liability theories, among other theories, brought by the State of Rhode Island;

The Company and other companies have been defendants in legal proceedings seeking recovery based on public nuisance liability theories, among other theories, brought by various states, cities and counties, including by the State of Rhode Island;

the City of St.

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the County of Santa Clara, California and other public entities in the State of California (the California Proceedings);

and Lehigh and Montgomery Counties in Pennsylvania (together, the Pennsylvania Proceedings).

Except for the California Proceedings in which the Company reached a court-approved agreement in 2019 after nearly twenty years of litigation, all of the legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings.

Pennsylvania Proceedings .

The Pennsylvania Proceedings were initiated in October 2018.

The Pennsylvania counties of Montgomery and Lehigh filed complaints against the Company and several other former lead-based paint and lead pigment manufacturers in the Courts of Common Pleas of Montgomery County and Lehigh County, respectively.

In both actions, the counties requested declaratory relief establishing the existence of a public nuisance and the defendants’ contribution to it, the abatement of an ongoing public nuisance arising from the presence of lead-based paint in housing throughout the applicable county, an injunction against future illicit conduct, and the costs of litigation and attorneys’ fees.

After the defendants removed both actions to federal court and the actions were remanded to state court, the defendants filed preliminary objections on December 21, 2020, seeking to dismiss both complaints with prejudice.

The trial courts in both actions denied the defendants’ preliminary objections, and the defendants filed petitions for permission to appeal the trial courts’ orders to the Commonwealth Court, one of Pennsylvania’s intermediate appellate courts.

The Commonwealth Court granted the defendants’ petitions for permission to appeal in both actions on February 18, 2022, and stayed all proceedings in the trial courts pending the appellate court proceedings.

The parties filed their respective briefs in both actions, and oral argument occurred on December 14, 2022.

On May 5, 2023, the Commonwealth Court reversed both trial courts’ orders denying the defendants’ preliminary objections and remanded both actions to the trial courts for entry of orders dismissing both actions.

Montgomery and Lehigh Counties each filed a petition for allowance to appeal with the Supreme Court of Pennsylvania, both of which the Supreme Court of Pennsylvania denied on November 20, 2023.

Subsequently, the trial courts dismissed both the Montgomery County and the Lehigh County actions on January 9, 2024 and January 30, 2024, respectively.

Litigation seeking damages from alleged personal injury.

and Lehigh and Montgomery Counties in Pennsylvania.

Except for the California Proceedings in which the Company reached a court-approved agreement in 2019 after nearly twenty years of litigation, all of those legal proceedings have been concluded in favor of the Company and other defendants at various stages in the proceedings.

Most recently, on May 7, 2024, as further described below in Wisconsin Litigation, three plaintiffs filed amended complaints alleging, in part, public nuisance claims.

Wisconsin Litigation .

The Company and other companies are or have been defendants in a number of legal proceedings seeking monetary damages and other relief from alleged personal injuries.

The current proceedings include claims by children allegedly injured from ingestion of lead pigment or lead-containing paint.

The current proceedings consist of two federal court cases pending in the United States District Court for the Eastern District of Wisconsin (Ernest Gibson v.

American Cyanamid, et al.

and Deziree and Detareion Valoe v.

American Cyanamid, et.

al.) and one case pending in Milwaukee County Circuit Court in Wisconsin (Arrieona Beal v.

Hattie and Jerry Mitchell, et al.).

Those matters include claims by four individuals allegedly injured from ingestion of lead pigment or lead-containing paint while they were minors.

The plaintiffs generally seek compensatory damages and have invoked Wisconsin’s risk contribution theory (which is similar to market share liability, except that liability can be joint and several) due to the plaintiff’s inability to identify the manufacturer of any product that allegedly injured the plaintiff.

Wisconsin Proceedings .

The United States District Court for the Eastern District of Wisconsin consolidated three cases (Ravon Owens v.

On May 20, 2021, as a result of a decision in favor of the Company by United States Court of Appeals for the Seventh Circuit in the Ravon Owens v.

American Cyanamid, et al., Cesar Sifuentes v.

American Cyanamid, et al., and Glenn Burton, Jr.

American Cyanamid, et al.) for purposes of trial.

A trial was held in May 2019 and resulted in a jury verdict for the three plaintiffs in the amount of $ 2.0 million each for a total of $ 6.0 million against the Company and two other defendants (Armstrong Containers Inc.

du Pont de Nemours).

Post-trial motions resulted in a reduced damages award to one plaintiff.

Subsequently, the Company filed a notice of appeal with the Seventh Circuit with respect to each of the Owens, Sifuentes and Burton cases.

On April 15, 2021, the Seventh Circuit reversed the judgments and held that the Company was entitled to judgment as a matter of law on all claims filed by the three plaintiffs .

The plaintiffs filed a petition with the Seventh Circuit on April 27, 2021, seeking a

rehearing en banc and, in the alternative, a request for certification of questions to the Wisconsin Supreme Court.

The plaintiffs’ petition was denied.

On May 20, 2021, as a result of the Seventh Circuit’s decision in favor of the Company in the Owens, Sifuentes and Burton cases, the Company and the three other defendants filed motions for summary judgment to dismiss all claims of the approximately 150+ plaintiffs then pending in the Eastern District of Wisconsin.

On March 3, 2022, the district court granted summary judgment in favor of the Company and the other defendants on all claims then pending in the district court.

American Cyanamid, et al.

and Glenn Burton, Jr.

American Cyanamid, et al.

cases, the Company and the three other defendants filed motions for summary judgment to dismiss all claims of the approximately 150 plaintiffs then pending in the Eastern District of Wisconsin, including the claims of Gibson and the Valoes.

On March 3, 2022, the district court granted summary judgment in favor of the Company and the other defendants.

On September 15, 2022, the plaintiffs filed notices of appeal with the Seventh Circuit, seeking to appeal the district court’s summary judgment in favor of the Company and the other defendants.

As part of the plaintiffs’ appellate reply brief to the Seventh Circuit, the plaintiffs included a motion to certify issues to the Wisconsin Supreme Court.

On February 9, 2024, the Seventh Circuit declined to certify any issues to the Wisconsin Supreme Court and affirmed the district court’s summary judgment in favor of the Company and the other defendants in all claims except involving those filed by three plaintiffs, whose cases were remanded to the district court for further proceedings.

On August 24, 2021, the plaintiff in Arrieona Beal v.

Armstrong Containers, Inc., et al.

filed an amended complaint in Milwaukee County Circuit Court, naming the Company and other alleged former lead pigment manufacturers as defendants pursuant to the risk contribution liability theory.

Plaintiff also sued her landlords.

In March 2022, the Company removed the case to the Eastern District of Wisconsin.

The plaintiff filed a motion to remand the case to the state circuit court, and on September 30, 2023, the case was remanded to state court.

On January 3, 2024, the Company and some of the other manufacturing defendants filed a third-party complaint against NL Industries, Inc., and cross-claims against the landlord defendants.

On February 9, 2024, the Seventh Circuit affirmed the district court’s summary judgment in favor of the Company and the other defendants in all cases except those filed by Gibson and the Valoes, which cases were remanded to the district court for further proceedings.

Following remand of the Gibson and Valoe cases, the three remaining plaintiffs filed amended complaints on May 7, 2024, alleging strict liability, negligence and public nuisance claims.

The defendants filed motions to dismiss the plaintiffs’ amended complaints on June 20, 2024.

On November 8, 2024, the district court granted in part and denied in part defendants’ motions to dismiss the amended complaints, dismissing the second cause of action for general negligence and plaintiffs’ abatement allegations, but otherwise permitting the case to proceed.

On December 6, 2024, the Company and some of the other defendants filed a third-party complaint against NL Industries, Inc.

(NL) and the owners and landlords of the properties where plaintiffs resided.

Some of the owners and landlords filed a motion to dismiss the third-party complaints;

that motion remains pending.

On January 30, 2025, the district court entered a stipulated order dismissing NL pursuant to the execution of a Pierringer release between plaintiffs and NL.

In the separate state court proceeding, on August 24, 2021, Arrieona Beal filed an amended complaint in Milwaukee County Circuit Court, naming the Company and other alleged former lead pigment manufacturers as defendants pursuant to the risk contribution liability theory.

The plaintiff previously had sued her landlords.

On January 3, 2024, the Company and some of the other manufacturing defendants filed a third-party complaint against NL and cross-claims against the landlord defendants.

On January 10, 2024, one of the landlord defendants filed a counterclaim and cross-claim against all parties.

On May 15, 2024, the plaintiff filed a motion for partial judgment on the pleadings to strike the Company and other manufacturing defendants’ affirmative defenses, and on August 6, 2024, the circuit court granted defendants’ motion to strike the plaintiff’s motion.

On December 6, 2024, plaintiff filed a notice of voluntary dismissal as to landlords Hattie and Jerry Mitchell pursuant to the execution of a Pierringer release.

Insurance Coverage Litigation.

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The Company’s action, filed on March 3, 2006, in the Common Pleas Court, Cuyahoga County, Ohio, previously was stayed and inactive.

On January 9, 2019, the Company filed an unopposed motion to lift the stay with the trial court, which was granted, allowing the case to proceed.

On January 9, 2019, the Company filed an unopposed motion to lift the stay with the trial court, which was granted, allowing the case to proceed to determine whether the insurers were required to indemnify the Company following the California Proceedings.

On June 28, 2019, the Company and its liability insurers each filed separate motions for summary judgment seeking various forms of relief.

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Oral argument was held on October 24, 2023.

An ultimate loss in the insurance coverage litigation would mean that insurance proceeds could be unavailable under the policies at issue to mitigate any ultimate abatement related costs and liabilities.

The Company has not recorded any assets related to these insurance policies or otherwise assumed that proceeds from these insurance policies would be received in estimating any contingent liability accrual.

Therefore, an ultimate loss in the insurance coverage litigation without a determination of liability against the Company in the lead pigment or lead-based paint litigation will have no impact on the Company’s results of operation, liquidity or financial condition.

As previously stated, however, except with respect to the litigation in California discussed above, the Company has not accrued any amounts for the lead pigment or lead-based paint litigation and any significant liability ultimately determined to be attributable to the Company relating to such litigation may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued.

Other litigation.

On December 10, 2024, the Ohio Supreme Court reversed the Court of Appeals and mandated judgment in favor of the insurers, holding that because the abatement-fund payment was made to prevent future harm rather than compensate for past harm, payment was not “damages” covered under the insurance policies.

This decision means that insurance proceeds could be unavailable under the policies at issue to mitigate past or future abatement related liabilities.

The Company has not recorded a receivable related to these insurance policies or otherwise assumed that proceeds from these insurance policies would be received in estimating any contingent liability accrual within the consolidated financial statements.

Therefore, this decision, without a determination of liability against the Company in the lead pigment or lead-based paint litigation will have no impact on the Company’s results of operation, liquidity or financial condition.

As previously stated, except with respect to the litigation in the California Proceedings, the Company has not accrued any amounts for the lead pigment or lead-based paint litigation and any significant liability ultimately determined to be attributable to the Company relating to such litigation may result in a material impact on the Company’s results of operations, liquidity or financial condition for the annual or interim period during which such liability is accrued.

Other matters.

On December 18, 2019, the New Jersey Department of Environmental Protection, the Commissioner of the New Jersey Department of Environmental Protection and the Administrator of the New Jersey Spill Compensation Fund (collectively, the NJ DEP) filed a lawsuit against the Company in the Superior Court of New Jersey Law Division in Camden County, New Jersey.

The NJ DEP seeks to recover natural resource damages, punitive damages and litigation fees and costs, as well as other costs, damages, declaratory relief and penalties pursuant to New Jersey state statutes and common law theories in connection with the alleged discharge of hazardous substances and pollutants at the Company’s Gibbsboro, New Jersey site, a former manufacturing plant and related facilities.

The court has scheduled a new trial date of October 15, 2024.

Following expert discovery, on November 20, 2024, the Company filed a motion in the United States District Court for the District of New Jersey seeking to enforce the terms of an April 2019 Remedial Design/Remedial Action Consent Decree between the Company and the United States Environmental Protection Agency (the Consent Decree) that is being attacked by the NJ DEP’s state court lawsuit.

On December 21, 2024, the United States filed a brief in opposition to the Company’s motion, to which the Company filed a reply brief.

The Company’s motion regarding the Consent Decree remains pending in federal court.

Meanwhile, on November 20, 2024, the Company filed a motion to stay the state court proceedings pending resolution of the Company’s motion regarding the Consent Decree.

On December 19, 2024, the state court denied the Company’s stay motion, but suspended all then-pending dates in the court’s schedule, including the previous trial date of March 10, 2025, until an ongoing discovery dispute between the Company and the NJ DEP is resolved.

On December 20, 2024, the NJ DEP filed a motion for partial summary judgment seeking to find the Company liable under the Spill Act and Solid Waste Management Act.

On January 31, 2025, the state court denied the NJ DEP’s motion for partial summary judgment.

On February 6, 2025, the state court sent an automated notice re-setting the trial for March 10, 2025.

Upon the parties’ request seeking clarification regarding the schedule, there is a status conference with the state court set for February 18, 2025.

In July 2024, a third-party assurance, testing, inspection and certification provider changed its listing for one of the Company’s protective coatings products, an intumescent coating used for fire protection of steel beam assemblies.

The Company has received claims regarding this matter and is working with its customers and end users to assist in understanding the potential impacts of the listing change, including the extent of potential remedial action that may involve the application of additional product.

The Company’s review of this matter is ongoing.

Except for an immaterial product warranty liability which remains recorded on the Consolidated Balance Sheets as of December 31, 2024, any additional amount or range of potential loss cannot be reasonably estimated at this time.

NOTE 12 – SHAREHOLDERS’ EQUITY

2 unchanged sentences

Of the authorized serial preferred stock, 3,000,000 shares are designated as cumulative redeemable serial preferred stock.

There we no shares of serial preferred stock issued during 2024, 2023 or 2022.

Under the 2006 Equity and Performance Incentive Plan (2006 Employee Plan), 71,100,000 shares may be issued or transferred.

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Treasury stock purchased 3,350,000 ( 3,350,000 )

Treasury stock sold (1)

( 75,000 ) 75,000

Balance at December 31, 2022 14,717,347 258,875,999

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Treasury stock purchased 5,600,000 ( 5,600,000 )

Treasury stock sold (1)

( 75,000 ) 75,000

Balance at December 31, 2023 20,434,584 254,543,290

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The Company matches one hundred percent of all contributions up to six percent of eligible employee contributions.

Such participant contributions may be invested in a variety of investment funds or a Company common stock fund and may be exchanged between investments as directed by the participant.

Such participant contributions may be invested in a variety of investment funds or a Company common stock

fund and may be exchanged between investments as directed by the participant.

Participants are permitted to diversify both future and prior Company matching contributions previously allocated to the Company common stock fund into a variety of investment funds.

12 unchanged sentences

The Nonemployee Director Plan permits the granting of options, appreciation rights, restricted stock and RSUs to members of the Board of Directors who are not employees of the Company.

December 31, 2023, no options or appreciation rights had been granted under the Nonemployee Director Plan.

At December 31, 2024, no options or appreciation rights had been granted under the Nonemployee Director Plan.

Shares available for future grants under the Nonemployee Director Plan were 210,675 at December 31, 2024.

69 unchanged sentences

Balance at January 1, 2022

$ ( 702.1 ) $ ( 32.2 ) $ 35.9 $ ( 698.4 )

Amounts recognized in AOCI ( 108.7 ) 106.8 ( 1.9 )

1 unchanged sentence

Balance at December 31, 2022

( 810.8 ) 78.3 31.9 ( 700.6 )

Amounts recognized in AOCI 93.9 3.9 97.8

1 unchanged sentence

Balance at December 31, 2023

( 716.9 ) 64.3 28.3 ( 624.3 )

Amounts recognized in AOCI ( 256.0 ) 23.0 ( 233.0 )

1 unchanged sentence

Balance at December 31, 2024

(1) Includes changes in the fair value of cross currency swap contracts of $( 24.9 ) million, $ 34.1 million, $ 37.1 million in 2023, 2022 and 2021, respectively.

(2) Net of taxes of $ 3.1 million, $( 35.0 ) million, $( 14.7 ) million in 2023, 2022 and 2021, respectively.

$ ( 972.9 ) $ 73.1 $ 24.6 $ ( 875.2 )

(1) Includes changes in the fair value of cross currency swap contracts of $ 53.6 million, $( 24.9 ) million and $ 34.1 million in 2024, 2023 and 2022, respectively.

(2) Net of taxes of $( 2.0 ) million, $ 3.1 million and $( 35.0 ) million in 2024, 2023 and 2022, respectively.

(3) Net of taxes of $ 1.2 million in 2024 and 2023 and $ 1.1 million in 2022.

See Statements of Consolidated Comprehensive Income.

NOTE 16 – DERIVATIVES AND HEDGING

Net Investment Hedges

The Company has entered into U.S.

3 unchanged sentences

dollar denominated fixed-rate debt to euro denominated fixed-rate debt.

The outstanding contracts as of December 31, 2023 are summarized in the table below.

Contract Date Notional Value Maturity Date

February 13, 2020 $ 500.0 June 1, 2024

November 8, 2021 162.7 June 1, 2027

March 28, 2023 150.0 August 8, 2024

June 28, 2023 200.0 August 8, 2025

December 7, 2023 150.0 August 15, 2029

The outstanding contracts as of December 31, 2024 are summarized by maturity date in the table below.

Notional Value Maturity Date

$ 200.0 August 8, 2025

687.7 June 1, 2027

100.0 March 1, 2028

525.0 August 15, 2029

100.0 September 1, 2031

In August 2024, the Company settled its $ 150.0 million U.S.

dollar to euro cross currency swap contract entered into on March 28, 2023.

In May 2024, the Company settled its $ 500.0 million U.S.

dollar to euro cross currency swap contract entered into on February 13, 2020.

At the time of both of these settlements, an immaterial unrealized loss was recognized in AOCI.

In December 2023, the Company settled its $ 100.0 million U.S.

5 unchanged sentences

2024 2023 2022

Other current assets $ 9.4 $ — $ —

Other assets 39.5 — 9.1

2 unchanged sentences

The changes in fair value of the cross currency swap contracts are recognized in the foreign currency translation adjustments component of AOCI.

The following table summarizes the unrealized (losses) gains for the years ended December 31:

The following table summarizes the unrealized gains (losses) for the years ended December 31:

2024 2023 2022

(Losses) gains $ ( 33.1 ) $ 45.2 $ 49.3

Gains (losses) $ 71.2 $ ( 33.1 ) $ 45.2

Tax effect ( 17.6 ) 8.2 ( 11.1 )

(Losses) gains, net of taxes $ ( 24.9 ) $ 34.1 $ 37.1

Gains (losses), net of taxes $ 53.6 $ ( 24.9 ) $ 34.1

Derivatives Not Designated as Hedging Instruments

The Company enters into foreign currency option and forward contracts with maturity dates less than twelve months primarily to hedge against value changes in foreign currency.

The related gains and losses are recorded in Other (income) expense - net.

See Note 19 for further details.

NOTE 17 – FAIR VALUE MEASUREMENTS

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There were no assets and liabilities measured at fair value on a recurring basis classified as Level 3 at December 31, 2024, 2023 and 2022.

Except for the acquisition-related fair value measurements and assets held for sale prior to divestiture described in Note 3 and the reporting unit impairment analysis and trademark quantitative impairment test described in Note 7, there were no assets and liabilities measured at fair value on a nonrecurring basis.

Except for the acquisition-related fair value measurements and assets held for sale prior to divestiture of the China architectural business described in Note 3 and the reporting unit impairment analysis and trademark quantitative impairment test described in Note 6, there were no assets and liabilities measured at fair value on a nonrecurring basis.

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis, categorized using the fair value hierarchy.

10 unchanged sentences

The level 2 investments are valued based on vendor or broker models.

As of December 31, 2023, $ 6.4 million of deferred compensation plan assets were held in partnership funds measured using NAV (or its equivalent) as a practical expedient.

There was $ 7.0 million and $ 6.4 million of deferred compensation plan assets held in partnership funds measured using NAV (or its equivalent) as a practical expedient as of December 31, 2024 and 2023, respectively.

These investments are not classified in the fair value hierarchy.

1 unchanged sentence

The qualified replacement plan assets consisted of investment funds maintained for future contributions to the Company’s domestic defined contribution pension plan.

During the first quarter of 2023, the remaining balance was fully utilized to fund the Company’s domestic defined contribution pension plan.

The cost basis of the investment funds was $ 29.8 million and $ 86.9 million at December 31, 2022 and 2021, respectively.

During 2023, the remaining balance was fully utilized to fund the Company’s domestic defined contribution pension plan.

The cost basis of the investment funds was $ 29.8 million at December 31, 2022.

The net investment hedge asset and liability represent the fair value of the cross currency swaps.

21 unchanged sentences

Sales, value add and other taxes we collect concurrent with revenue-producing activities are excluded from revenue.

Refer to Note 23 for the Company’s disaggregation of Net sales by Reportable Segment.

See Note 22 for the Company’s disaggregation of Net sales by Reportable Segment.

As the Reportable Segments are aligned by similar economic factors, trends and customers, this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

3 unchanged sentences

Under these circumstances, the Company recognizes a contract asset and amortizes these prepayments over the expected benefit life of the long-term contract, typically on a straight-line basis.

The majority of variable consideration in the Company’s contracts include a form of volume rebate, discounts, and other incentives, where the customer receives a retrospective percentage rebate based on the amount of their purchases.

The majority of variable consideration in the Company’s contracts include volume rebates, discounts and other incentives, where the customer receives a retrospective percentage rebate based on the amount of their purchases.

In these situations, the rebates are accrued as a fixed percentage of sales and recorded as a reduction of Net sales until paid to the customer per the terms of the contract.

Forms of variable consideration such as tiered rebates, whereby a customer receives a retrospective price decrease dependent on the volume of their purchases, are calculated using a forecasted percentage to determine the most likely amount to accrue.

Management creates a baseline calculation using historical sales and then utilizing forecast information, estimates the anticipated sales volume each quarter to calculate the expected reduction to sales.

The remainder of the transaction price is fixed as agreed upon with the customer, limiting estimation of revenues, including constraints.

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Ending balance $ 60.4 $ 59.6 $ 56.6

NOTE 20 – OTHER EXPENSE (INCOME)

Other General Expense (Income) - Net

Included in Other general expense (income) - net were the following:

NOTE 19 – OTHER (INCOME) EXPENSE

Other General (Income) Expense - Net

Included in Other general (income) expense - net were the following:

2024 2023 2022

Provisions for environmental matters - net $ ( 1.3 ) $ 80.7 $ ( 7.1 )

(Gain) loss on divestiture of businesses (see Note 3) ( 20.1 ) — 111.9

Loss (gain) on sale or disposition of assets 0.9 ( 17.8 ) ( 6.1 )

Gain on divestiture of business (see Note 3) — ( 20.1 ) —

(Gain) loss on sale or disposition of assets ( 49.9 ) 0.9 ( 17.8 )

Other 12.4 5.6 —

Total $ ( 38.8 ) $ 67.1 $ ( 24.9 )

These provisions are recorded or adjusted as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued.

During 2023, provisions for environmental matters - net increased primarily due to new information which impacted the estimate of required remediation at certain Major Sites and other Company locations.

Provisions for environmental matters – net represent initial provisions for site-specific estimated costs of environmental investigation or remediation and increases or decreases to environmental-related accruals as information becomes available upon which more accurate costs can be reasonably estimated and as additional accounting guidelines are issued.

Provisions for environmental matters - net for the year ended December 31, 2024 included an immaterial amount of insurance proceeds related to environmental cleanup at a current manufacturing site.

See Note 10 for further details on the Company’s environmental-related activities.

The loss (gain) on sale or disposition of assets represents the net realized loss (gain) associated with the sale or disposal of property, plant and equipment and intangible assets previously used in the conduct of the primary business of the Company.

Other Expense (Income) - Net

Included in Other expense (income) - net were the following:

The (gain) loss on sale or disposition of assets represents the net realized (gain) loss associated with the sale or disposal of property, plant and equipment and intangible assets previously used in the conduct of the primary business of the Company.

(Gain) loss on sale or disposition of assets for the year ended December 31, 2024 included an immaterial amount of insurance proceeds related to a current manufacturing site.

Other (Income) Expense - Net

Included in Other (income) expense - net were the following:

2024 2023 2022

Investment (gains) losses $ ( 16.9 ) $ ( 22.9 ) $ 9.7

Loss (gain) on extinguishment of debt (see Note 8) 12.8 — ( 1.4 )

Loss on extinguishment of debt (see Note 7) — 12.8 —

Net expense from banking activities 15.7 15.0 12.2

4 unchanged sentences

Total $ ( 44.7 ) $ 65.5 $ 47.0

Investment (gains) losses primarily relate to the change in market value of the investments held in the deferred compensation plan and qualified replacement plan.

Investment (gains) losses primarily relate to the change in market value of the investments held in the deferred compensation plan.

See Note 17 for additional information on the fair value of these investments.

Foreign currency transaction related losses - net include the impact from foreign currency transactions, including from highly inflationary economies such as Argentina, and net realized losses from foreign currency option and forward contracts.

During 2023, foreign currency transaction related losses - net increased primarily as a result of the significant devaluation of the Argentine Peso in December 2023 as part of economic reforms implemented by the government of Argentina.

As a result of these actions in Argentina, the Company incurred a loss of $ 41.8 million.

There were no material foreign currency option and forward contracts outstanding at December 31, 2023, 2022 and 2021.

Miscellaneous pension and benefit (income) expense consists of the non-service components of net periodic pension and benefit cost.

See Note 16 for further details regarding these foreign currency contracts.

Miscellaneous pension and benefit (income) expense consists of the non-service components of net periodic pension and benefit cost (credit).

Other income and other expense included items of revenue, gains, expenses and losses that were unrelated to the primary business purpose of the Company.

24 unchanged sentences

Reported effective tax rate 22.3 % 23.2 % 21.5 %

The increase in the effective tax rate for 2023 compared to 2022 was primarily related to an unfavorable change in the jurisdictional mix of earnings.

The decrease in the effective tax rate for 2024 compared to 2023 was primarily related to a more favorable impact from tax benefits related to employee share-based payments.

The other significant components of the Company’s effective tax rate were consistent year-over-year.

Significant components of income before income taxes as used for income tax purposes, were as follows:

21 unchanged sentences

$ 540.0 $ 606.1 $ 604.6

As of December 31, 2023, the Company’s net deferred income tax liability relates primarily to deferred tax liabilities recorded for intangible assets acquired through the Valspar acquisition.

Netted against the Company’s other deferred tax assets were valuation allowances of $ 124.5 million, $ 106.6 million and $ 97.5 million at December 31, 2024, 2023 and 2022, respectively.

The Company has $ 14.6 million of domestic net operating loss

carryforwards acquired through acquisitions that have expiration dates through tax year 2037, foreign tax credits of $ 26.5 million that expire in calendar years 2028 through 2033 and foreign net operating losses of $ 361.7 million.

The foreign net operating losses are related to various jurisdictions that provide for both indefinite carryforward periods and others with carryforward periods that expire between tax years 2023 to 2043.

The Company has $ 13.5 million of domestic net operating loss carryforwards acquired through acquisitions that have expiration dates through tax year 2037, foreign tax credits of $ 34.9 million that expire in calendar years 2028 through 2034 and foreign net operating losses of $ 339.1 million.

The foreign net

operating losses are related to various jurisdictions that provide for both indefinite carryforward periods and others with carryforward periods that expire between tax years 2024 to 2034.

The Company and its subsidiaries file income tax returns in the U.S.

federal jurisdiction and various state and foreign jurisdictions.

The Company finalized the IRS audit for the 2011 and 2013 through 2016 income tax returns and paid the tax assessment for 2013 through 2016 in the fourth quarter.

The Company expects to pay the remaining assessment related to tax and interest in 2024.

The IRS is currently auditing the Company’s 2017, 2018 and 2019 income tax returns.

As of December 31, 2023, the U.S.

federal statute of limitations has not expired for the 2013 through 2023 tax years.

The Company finalized the IRS audit for the 2013 through 2016 income tax returns in 2023 and paid the related assessments in the fourth quarter of 2023 and first quarter of 2024.

The Company finalized the IRS audit for the 2011 income tax return in 2023 and paid the tax assessment in the second quarter of 2024 and the interest assessment in the third quarter of 2024.

The Company finalized the IRS audit for the 2017 through 2019 income tax returns in the fourth quarter of 2024 and expects to pay the tax and interest assessment in the first quarter of 2025.

The IRS plans to start its next audit cycle of the Company’s 2020 through 2022 income tax returns in 2025.

As of December 31, 2024, the federal statute of limitations has not expired for the 2017 through 2024 tax years.

As of December 31, 2024, the Company is subject to non-U.S.

10 unchanged sentences

Balance at end of year $ 99.3 $ 121.8 $ 242.4

The decrease in unrecognized tax benefits was primarily settlements related to federal renewable energy tax credit funds with DC Solar Solutions, Inc.

and certain of its affiliates and other adjustments with the IRS in each of the tax years 2011 and 2013 through 2016.

The decrease in unrecognized tax benefits was primarily related to settlements of federal adjustments with the IRS in the tax years 2017 through 2019.

There were also additions in unrecognized tax benefits related to the reversal of benefits recognized from certain positions taken on current and prior year income tax returns filed in U.S.

federal and various state jurisdictions.

These additions were primarily offset by various positions taken on prior year income tax returns filed in U.S.

These additions were partially offset by various positions taken on prior year income tax returns filed in U.S.

and various foreign jurisdictions that were no longer deemed to be at risk.

4 unchanged sentences

During the year ended December 31, 2024, there was an increase in income tax interest and penalties of $ 7.8 million.

During the years ended December 31, 2022 and 2021, there was a increase (decrease) in income tax interest and penalties of $ 10.3 million and $( 2.7 ) million, respectively.

During the years ended December 31, 2023 and 2022, there was an increase in income tax interest and penalties of $ 5.9 million and $ 10.3 million, respectively.

The Company accrued $ 18.8 million, $ 20.4 million and $ 36.6 million at December 31, 2024, 2023 and 2022, respectively, for the potential payment of interest and penalties.

14 unchanged sentences

The Company reports its segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding the allocation of resources in accordance with the Segment Reporting Topic of the ASC.

During 2023, the Company realigned its organizational structure to manage the Latin America architectural paint business within the Consumer Brands Group due to the Latin America architectural demand and service models shifting to align more closely with the Consumer Brands Group’s strategy.

Previously, the Latin America architectural paint business was managed within The Americas Group.

As a result of this change, The Americas Group was renamed the Paint Stores Group.

All reported segment results have been adjusted retrospectively to reflect this change.

The Company has three reportable operating segments:

Paint Stores Group, Consumer Brands Group and Performance Coatings Group (individually, a Reportable Segment and collectively, the Reportable Segments).

Factors considered in determining the three Reportable Segments of the Company include the nature of business activities, the management structure directly accountable to the Company’s CODM for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors.

The Company reports all other business activities and immaterial operating segments that are not reportable in the Administrative segment.

The Company’s CODM has been identified as the Chief Executive Officer because they have the final authority over performance assessment and resource allocation decisions.

Because of the diverse operations of the Company, the CODM regularly receives discrete financial information about each Reportable Segment as well as a significant amount of additional financial information about certain divisions, business units or subsidiaries of the Company.

Factors considered in determining the three Reportable Segments of the Company include the nature of business activities, the management structure directly accountable to the Company’s Chief Operating Decision Maker (CODM) for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors.

The Company reports all other business activities within the Administrative function.

The Company’s CODM has been identified as the Chair, President and Chief Executive Officer because she has the final authority over performance assessment and resource allocation decisions.

Because of the diverse operations of the Company, the CODM regularly receives and uses discrete financial information about each Reportable Segment as well as select supplemental financial information about certain divisions, business units or subsidiaries of the Company.

The CODM uses all such financial information for performance assessments and resource allocation decisions.

The CODM evaluates the performance of and allocates resources to the Reportable Segments based on segment profit or loss and cash generated from operations.

The CODM evaluates the performance of and allocates resources to the Reportable Segments based on Segment profit or loss, which represents the segments’ Income before income taxes.

The accounting policies of the Reportable Segments are the same as those described in Note 1.

7 unchanged sentences

In 2023 and 2022, this segment opened 70 and 75 net new stores, respectively.

The CODM uses discrete financial information about the Paint Stores Group, supplemented with information by geographic region, product type and customer type, to assess the performance of and allocate resources to the Paint Stores Group as a whole.

In accordance with ASC

280-10-50-9, the Paint Stores Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

In accordance with ASC 280-10-50-9, the Paint Stores Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Consumer Brands Group manufactures and supplies a broad portfolio of branded and private-label architectural paint, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks and adhesives to retailers, including home centers and hardware stores, dedicated dealers and distributors throughout North America, Latin America and Europe.

During 2023, the Company divested a non-core domestic aerosol business and the China architectural business, both part of the Consumer Brands Group (see Note 3).

In 2022, the Consumer Brands Group had a $ 15.5 million pre-tax loss for trademark impairments related to the Restructuring Plan (see Note 7).

Sales and marketing of certain controlled brand and private-label products is performed by a direct sales staff.

The products distributed through third-party customers are intended for resale to the ultimate end-user of the product.

The products distributed through third-party customers are intended for resale to the ultimate

end-user of the product.

The Consumer Brands Group also consisted of 334 company-operated specialty paint stores in Latin America at December 31, 2024.

4 unchanged sentences

During 2024, the segment opened 16 net new stores, consisting of 18 stores opened and 2 stores closed.

In 2022 and 2021, this segment (closed) opened ( 3 ) and 12 net new stores, respectively.

In 2023 and 2022, this segment opened (closed) 11 and ( 3 ) net new stores, respectively.

The Consumer Brands Group also supports the Company’s other businesses around the world with new product research and development, manufacturing, distribution and logistics.

1 unchanged sentence

This segment incurred most of the Company’s capital expenditures related to ongoing environmental compliance measures, manufacturing capacity expansion, operational efficiencies and maintenance projects at sites currently in operation.

The CODM uses discrete financial information about the Consumer Brands Group, supplemented with information by geographic region, product type and customer type, to assess the performance of and allocate resources to the Consumer Brands Group as a whole.

In accordance with ASC 280-10-50-9, the Consumer Brands Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

3 unchanged sentences

However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment.

During 2023, the segment added 5 net new branches, consisting of 8 opened or acquired branches and 3 branches closed.

The CODM uses discrete financial information about the Performance Coatings Group, supplemented with information about geographic divisions, business units and subsidiaries, to assess the performance of and allocate resources to the Performance Coatings Group as a whole.

During 2024, the segment added 2 new branches ( no branches were closed).

In 2023 and 2022, this segment added 5 and 35 net new branches, respectively.

In accordance with ASC 280-10-50-9, the Performance Coatings Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Administrative segment includes the administrative expenses of the Company’s corporate headquarters site and the operations of a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s current global headquarters, and disposal of idle facilities.

Also included in the Administrative segment was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters, and other expenses that were not directly associated with the Reportable Segments.

The Administrative segment included a $ 20.1 million pre-tax gain on the divestiture of a non-core domestic aerosol business and a $ 27.1 million pre-tax loss for the impairment of assets related to the divestiture of China architectural business in 2023 and a $ 111.9 million pre-tax loss on the Wattyl divestiture in 2021.

See Notes 3, 4 and 20 for additional information.

Sales of this segment represented external leasing revenue.

The Administrative segment did not include any significant foreign operations.

Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative segment.

The Administrative function includes the administrative expenses and assets of the Company’s new global headquarters and research and development center, both currently under construction.

In addition, it includes the operations of a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s current global headquarters and research and development center and disposal of idle facilities.

The Administrative function’s remaining assets consist primarily of cash and cash equivalents, investments and deferred pension assets.

Also included in the Administrative function was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters and other expenses that were not directly associated with the Reportable Segments.

Sales of this function represented external leasing revenue.

The Administrative function did not include any significant foreign operations.

Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative function.

Net external sales of all consolidated foreign subsidiaries were $ 4.426 billion, $ 4.428 billion and $ 4.294 billion for 2024, 2023 and 2022, respectively.

7 unchanged sentences

In the reportable segment financial information that follows, Segment profit represents each segment’s Income before income taxes.

Due to the nature of the Company’s integrated manufacturing operations and centralized administrative and information technology support, a substantial amount of allocations are made to determine segment financial information.

Domestic intersegment transfers are primarily accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs for paint products.

Non-paint domestic and all international intersegment transfers are primarily accounted for at values comparable to normal unaffiliated customer sales.

All intersegment transfers are eliminated within the Administrative segment.

All intersegment

transfers are eliminated within the Administrative function.

In 2023, the absorbed manufactured cost standards utilized for domestic intersegment transfers were established inclusive of forecasted cost reductions from planned initiatives.

Deviations from the forecasted cost reductions were recognized within the Consumer Brands Group.

Expenses that are specifically identifiable to a certain Reportable Segment are allocated accordingly.

For expenses that are not specifically identifiable to a certain Reportable Segment, an appropriate allocation base is identified, and expenses are allocated based on each segment’s respective share of the allocation base.

The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM and include intersegment expenses within the amounts shown.

Identifiable assets were those directly identified with each Reportable Segment.

The Administrative segment assets consisted primarily of cash and cash equivalents, investments, deferred pension assets and property, plant and equipment related to the new global headquarters currently under construction.

The segment results in the tables below reflect the segment change described above.

Group Consumer Brands

4 unchanged sentences

Total net sales and intersegment transfers $ 13,188.0 $ 8,412.3 $ 6,854.1 $ ( 5,355.9 ) $ 23,098.5

Segment profit $ 2,860.8 $ 309.3 $ 991.6 $ 4,161.7

Cost of goods sold $ 5,900.8 $ 6,943.5 $ 4,406.5 $ ( 5,347.4 ) $ 11,903.4

Selling, general and administrative expenses 4,405.6 863.1 1,443.0 710.4 7,422.1

Interest expense — 1.4 — 414.3 415.7

Administrative expenses and other ( 634.3 ) ( 634.3 )

Other segment items (1)

( 21.0 ) 14.4 ( 23.3 ) ( 64.6 ) ( 94.5 )

Income before income taxes $ 2,902.6 $ 589.9 $ 1,027.9 $ ( 1,068.6 ) $ 3,451.8

% to net sales 22.3 % 9.2 % 14.5 % 13.5 %

% to Net sales 22.0 % 19.0 % 15.1 % nm 14.9 %

Supplemental Information:

Identifiable assets $ 5,878.0 $ 6,854.7 $ 7,847.4 $ 3,052.5 $ 23,632.6

1 unchanged sentence

Depreciation (2)

89.9 162.7 18.0 26.8 297.4

Amortization (3)

1.7 66.4 256.7 1.8 326.6

nm - not meaningful

(1) Other segment items includes Other general (income) expense - net, Interest income and Other (income) expense - net.

(2) Depreciation is recorded within Cost of goods sold and Selling, general and administrative expenses.

(3) Amortization is recorded within Selling, general and administrative expenses.

Group Consumer Brands

4 unchanged sentences

Total net sales and intersegment transfers $ 12,839.5 $ 8,599.6 $ 7,040.9 $ ( 5,428.1 ) $ 23,051.9

Segment profit $ 2,348.1 $ 314.2 $ 734.9 $ 3,397.2

Cost of goods sold $ 5,794.4 $ 7,311.9 $ 4,606.9 $ ( 5,419.4 ) $ 12,293.8

Selling, general and administrative expenses 4,211.5 882.3 1,415.5 556.1 7,065.4

Interest expense — — — 417.5 417.5

Administrative expenses and other ( 433.3 ) ( 433.3 )

Other segment items (1)

( 27.2 ) 96.1 26.9 69.5 165.3

Income before income taxes $ 2,860.8 $ 309.3 $ 991.6 $ ( 1,051.8 ) $ 3,109.9

% to net sales 19.6 % 9.3 % 10.8 % 11.6 %

% to Net sales 22.3 % 9.2 % 14.5 % nm 13.5 %

Supplemental Information:

Identifiable assets $ 5,745.3 $ 6,631.8 $ 8,266.6 $ 2,310.7 $ 22,954.4

1 unchanged sentence

Depreciation (2)

79.0 151.4 26.0 35.9 292.3

Amortization (3)

3.3 72.4 253.0 1.5 330.2

nm - not meaningful

(1) Other segment items includes Other general (income) expense - net, Impairment, Interest income and Other (income) expense - net.

See Notes 3 and 6 for information on Impairment and Note 19 for information on Other general (income) expense - net and Other (income) expense - net.

(2) Depreciation is recorded within Cost of goods sold and Selling, general and administrative expenses.

(3) Amortization is recorded within Selling, general and administrative expenses.

Group Consumer Brands

4 unchanged sentences

Total net sales and intersegment transfers $ 11,963.3 $ 8,603.2 $ 6,997.2 $ ( 5,414.8 ) $ 22,148.9

Segment profit $ 2,182.2 $ 415.3 $ 486.2 $ 3,083.7

Cost of goods sold $ 5,826.8 $ 7,454.8 $ 4,965.4 $ ( 5,423.2 ) $ 12,823.8

Selling, general and administrative expenses 3,810.1 817.8 1,275.6 428.1 6,331.6

Interest expense — — — 390.8 390.8

Administrative expenses and other ( 500.4 ) ( 500.4 )

Other segment items (1)

( 21.7 ) 16.4 21.3 13.6 29.6

Income before income taxes $ 2,348.1 $ 314.2 $ 734.9 $ ( 824.1 ) $ 2,573.1

% to net sales 20.6 % 12.5 % 8.1 % 11.3 %

% to Net sales 19.6 % 9.3 % 10.8 % nm 11.6 %

Supplemental Information:

Identifiable assets $ 5,873.6 $ 6,749.6 $ 8,296.8 $ 1,674.0 $ 22,594.0

1 unchanged sentence

Depreciation (2)

73.9 126.2 29.1 34.8 264.0

Amortization (3)

3.3 79.8 232.0 2.0 317.1

nm - not meaningful

(1) Other segment items includes Other general (income) expense - net, Impairment, Interest income and Other (income) expense - net.

See Note 6 for information on Impairment and Note 19 for information on Other general (income) expense - net and Other (income) expense - net.

(2) Depreciation is recorded within Cost of goods sold and Selling, general and administrative expenses.

(3) Amortization is recorded within Selling, general and administrative expenses .

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data