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Item 2. Management’s Discussion and Analysis

2025-04-29 compared with 2024-10-22 · 151 added, 203 removed, 136 unchanged (72% of the section changed)

2 unchanged sentences

(dollars in millions, except as noted and per share data)

The Sherwin-Williams Company, founded in 1866, and its consolidated wholly owned subsidiaries (collectively, the Company) are 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 and throughout Europe, Asia and Australia.

The Company is structured into three reportable segments - Paint Stores Group, Consumer Brands Group and Performance Coatings Group (collectively, the Reportable Segments) - and an Administrative function in the same way it is internally organized for assessing performance and making decisions regarding the allocation of resources.

The Sherwin-Williams Company, founded in 1866, and its consolidated subsidiaries (collectively, the Company) are 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 and throughout Europe, Asia and Australia.

The Company is structured into three reportable segments - Paint Stores Group, Consumer Brands Group and Performance Coatings Group (collectively, the Reportable Segments) - and an Administrative function, which is representative of the way it is internally organized for assessing performance and making decisions regarding the allocation of resources.

See Note 18 in Item 1 for further details on the Company’s Reportable Segments.

• Consolidated Net sales increased 0.7% in the quarter to $6.163 billion

• Consolidated Net sales decreased 1.1% to $5.306 billion in the quarter

◦ Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 1.2% in the quarter

• Diluted net income per share increased 7.8% to $3.18 per share in the quarter compared to $2.95 per share in the third quarter 2023

• Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in the quarter increased 1.2% to $1.282 billion in the quarter, or 20.8% of Net sales

We remain focused on navigating choppy macroeconomic conditions by purposefully executing our differentiated strategy to provide our customers with solutions that make them more productive and profitable.

We remain well-positioned in each of our targeted markets and continue to prioritize investments in new stores, sales and technical personnel, innovation, digital and other growth initiatives that will allow us to generate sustained and profitable above-market growth in an increasingly uncertain and competitive landscape.

• Diluted net income per share increased 1.5% to $2.00 per share in the quarter compared to $1.97 per share in the first quarter of 2024

• Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) in the quarter increased 4.6% to $937.0 million, or 17.7% of Net sales

In a macro-economic environment that remains turbulent, we are focused on being a source of stability and reliability for our customers.

Our differentiated strategy, Success by Design, has not changed as we seek to provide our customers with solutions that increase their productivity and profitability.

We remain well-positioned in each of our targeted markets and continue to prioritize initiatives such as new stores and digital technologies that we believe will allow us to generate sustained and profitable above-market growth in an increasingly uncertain and competitive landscape.

We employ a disciplined capital deployment strategy, while maintaining a balanced approach toward driving value for our customers and returns to our shareholders.

1 unchanged sentence

We will return value to our shareholders through the payment of dividends and the reinvestment of excess cash for share repurchases of Company stock.

We have a strong liquidity position, with $238.2 million in cash and $3.026 billion of unused capacity under our credit facilities at September 30, 2024.

We have a strong liquidity position, with $199.8 million in cash and $2.148 billion of unused capacity under our credit facilities at March 31, 2025.

We are, and expect to remain, in compliance with bank covenants.

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The Company has historically experienced, and expects to continue to experience, variability in quarterly results.

The results of operations for the three and nine months ended September 30, 2024 are not indicative of the results to be expected for the full year as our business is seasonal in nature, with the majority of Net sales for the Reportable Segments traditionally occurring during the second and third quarters.

The results of operations for the three months ended March 31, 2025 are not indicative of the results to be expected for the full year as our business is seasonal in nature, with the majority of Net sales for the Reportable Segments traditionally occurring during the second and third quarters.

However, periods of economic uncertainty can alter the Company’s seasonal patterns.

The following discussion and analysis addresses comparisons of material changes in the consolidated financial statements for the three and nine months ended September 30, 2024 and 2023.

Three Months Ended September 30, 2024

Three Months Ended September 30,

The following discussion and analysis addresses comparisons of material changes in the condensed consolidated financial statements for the three months ended March 31, 2025 and 2024.

Three Months Ended March 31, 2025

Three Months Ended March 31,

2025 2024 $ Change % Change Currency Impact Acquisition

5 unchanged sentences

Total $ 5,305.7 $ 5,367.3 $ (61.6) (1.1) % (1.4) % 0.2 %

Consolidated Net sales increased by 0.7% in the third quarter of 2024 primarily due to higher sales in the Paint Stores Group and the impact from the acquisition of SIC Holding GmbH in 2023.

These increases were partially offset by lower sales in the Consumer Brands and Performance Coatings Groups as well as unfavorable foreign currency translation.

Net sales of all consolidated foreign subsidiaries increased to $1.124 billion in the third quarter of 2024 compared to $1.105 billion in the same period last year.

The increase in Net sales for all consolidated foreign subsidiaries was due to higher Net sales in the Europe and Asia regions.

Net sales of all operations other than consolidated foreign subsidiaries increased to $5.038 billion in the third quarter of 2024 compared to $5.012 billion in the same period last year.

Net sales in the Paint Stores Group increased by 3.2% in the third quarter of 2024 primarily due to low-single digit sales volume growth and continued realization of higher selling prices implemented earlier in the year.

Net sales increased in most professional customer end markets, led by protective and marine, residential repaint and new residential.

Net sales from stores open for more than twelve calendar months increased by 2.2% in the third quarter of 2024 compared to last year’s comparable period.

Net sales of non-paint products increased 1.0% in the third quarter of 2024 compared to last year’s comparable period.

Consolidated Net sales decreased by 1.1% in the first quarter of 2025 primarily due to unfavorable foreign currency translation.

Lower sales in the Performance Coatings and Consumer Brands Groups were partially offset by higher sales in the Paint Stores Group.

Net sales of all consolidated foreign subsidiaries decreased to $1.045 billion in the first quarter of 2025 compared to $1.103 billion in the same period last year.

The decrease in Net sales for all consolidated foreign subsidiaries was primarily due to lower Net sales in the Europe and Latin America regions.

Net sales of all operations other than consolidated foreign subsidiaries decreased to $4.261 billion in the first quarter of 2025 compared to $4.264 billion in the same period last year.

Net sales in the Paint Stores Group increased by 2.3% in the first quarter of 2025 primarily due to selling price increases, which impacted Net sales by a mid-single digit percentage, partially offset by a low-single digit percentage decrease in sales volume.

Net sales increased in certain professional customer end markets, led by a high-single digit percentage increase in protective and marine and a mid-single digit percentage increase in residential repaint.

Net sales from stores open for more than twelve calendar months increased by 1.2% in the first quarter of 2025 compared to last year’s comparable period.

Net sales of non-paint products decreased 0.4% in the first quarter of 2025 compared to last year’s comparable period.

A discussion of changes in volume versus pricing for sales of non-paint products is not pertinent due to the wide assortment of general merchandise sold.

Net sales in the Consumer Brands Group decreased by 7.5% in the third quarter of 2024 primarily due to soft DIY demand in North America and a 3.6% impact from unfavorable foreign currency translation driven by Latin America.

These decreases were partially offset by selling price increases in Latin America, which impacted Net sales by a low-single digit percentage and a low-single digit percentage sales volume increase in Latin America and Europe.

Net sales in the Performance Coatings Group was effectively flat as sales volume growth, inclusive of the impact of the 2023 acquisition of SIC Holding GmbH, was fully offset by unfavorable foreign currency translation.

Performance was led by Packaging, which increased in all regions, Coil and Industrial Wood.

Nine Months Ended September 30, 2024

Nine Months Ended September 30,

2024 2023 $ Change % Change Currency Impact Acquisition

Divestiture Impact

Paint Stores Group $ 10,143.1 $ 9,894.9 $ 248.2 2.5 % — % — %

Consumer Brands Group 2,445.8 2,673.3 (227.5) (8.5) % (2.2) % (1.8) %

Performance Coatings Group 5,208.3 5,228.9 (20.6) (0.4) % (0.6) % 1.4 %

Administrative 4.1 2.6 1.5 57.7 % — % — %

Total $ 17,801.3 $ 17,799.7 $ 1.6 — % (0.5) % 0.2 %

Consolidated Net sales were essentially flat in the first nine months of 2024.

Sales volume growth in the Paint Stores and Performance Coatings Groups was offset by lower sales volume in the Consumer Brands Group, inclusive of the impact from the divestiture of the China architectural business and a non-core domestic aerosol business in the prior period.

Net sales of all consolidated foreign subsidiaries increased to $3.370 billion in the first nine months of 2024 compared to $3.342 billion in the same period last year.

The increase in Net sales for all consolidated foreign subsidiaries was due to growth in the Europe region, partially offset by lower Net sales in the Latin America and Asia regions.

Net sales of all operations other than consolidated foreign subsidiaries decreased 0.2% to $14.431 billion in the first nine months of 2024 compared to $14.458 billion in the same period last year.

Net sales in the Paint Stores Group increased by 2.5% in the first nine months of 2024 primarily due to low-single digit sales volume growth and realization of higher selling prices that were implemented earlier in the year.

Net sales from stores open for more than twelve calendar months increased 1.6% in the first nine months of 2024 compared to last year’s comparable period.

Net sales of non-paint products increased 0.5% in the first nine months of 2024 compared to last year’s comparable period.

A discussion of changes in volume versus pricing for sales of products other than paint is not pertinent due to the wide assortment of general merchandise sold.

Net sales in the Consumer Brands Group decreased by 8.5% in the first nine months of 2024 primarily due to a mid-single digit percentage sales volume decline primarily due to soft DIY demand in North America and the impact from the divestiture of the China architectural business and a non-core domestic aerosol business in the prior period.

In addition, Net sales were unfavorably impacted by foreign currency translation.

Net sales in the Performance Coatings Group decreased by 0.4% in the first nine months of 2024 primarily due to selling price decreases, which impacted Net sales by a low-single digit percentage and unfavorable foreign currency translation, partially offset by mid-single digit sales volume growth, inclusive of the acquisition of SIC Holding GmbH in 2023.

Performance was led by Industrial Wood and Coil, but was offset by a decrease in General Industrial and Automotive Refinish.

Net sales in the Consumer Brands Group decreased by 6.0% in the first quarter of 2025 primarily due to soft DIY demand in North America and a 3.3% impact from unfavorable currency translation driven by Latin America.

Net sales in the Performance Coatings Group decreased 4.8% primarily due to a 2.6% impact from unfavorable currency translation driven by Latin America.

A high-single digit increase in Packaging Net sales, inclusive of an acquisition, was offset by decreases in all other business units.

Income Before Income Taxes

The following table presents the components of Income before income taxes as a percentage of Net sales:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

% of Net Sales % of Net Sales % of Net Sales % of Net Sales

Three Months Ended March 31,

% of Net Sales % of Net Sales

Net sales $ 5,305.7 100.0 % $ 5,367.3 100.0 %

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SG&A 1,793.8 33.8 % 1,799.8 33.5 %

Other general expense (income) - net 0.7 — % 61.9 1.0 % (30.9) (0.2) % 39.9 0.2 %

Impairment — — % — — % — — % 34.0 0.2 %

Other general expense - net 8.9 0.2 % 2.0 — %

Interest expense 103.8 1.9 % 103.0 1.9 %

2 unchanged sentences

Income before income taxes $ 653.0 12.3 % $ 640.0 11.9 %

Three Months Ended September 30, 2024

Consolidated Cost of goods sold decreased $65.5 million, or 2.0%, in the third quarter of 2024 compared to the same period in 2023 primarily due to improved efficiencies in manufacturing and distribution operations and foreign currency translation rate changes, which decreased Cost of goods sold by approximately 1%.

These decreases were partially offset by a low single-digit increase in sales volume.

Consolidated gross profit increased $111.3 million in the third quarter of 2024 compared to the same period in 2023 primarily due to higher Net sales in the Paint Stores Group and improved efficiencies in manufacturing and distribution operations.

Consolidated gross profit as a percent of consolidated Net sales increased in the third quarter of 2024 to 49.1% compared to 47.7% during the same period in 2023 for these same reasons.

The Paint Stores Group’s gross profit in the third quarter of 2024 was higher than the same period last year by $59.6 million due primarily to higher Net sales.

The Paint Stores Group’s gross profit as a percent of Net sales was effectively flat in the third quarter of 2024 compared to the same period in 2023.

The Consumer Brands Group’s gross profit increased by $55.1 million in the third quarter of 2024 compared to the same period last year due primarily to higher fixed cost absorption in the manufacturing and distribution operations within the segment, partially offset by lower Net sales.

The Consumer Brands Group’s gross profit as a percent of Net sales increased in the third quarter of 2024 compared to the same period in 2023 for these same reasons.

The Performance Coatings Group’s gross profit decreased $14.1 million in the third quarter of 2024 compared to the same period last year due primarily to lower sales in North America and unfavorable foreign currency related impacts.

The Performance Coatings Group’s gross profit as a percent of Net sales decreased in the third quarter of 2024 compared to the same period last year for these same reasons.

Consolidated Selling, general and administrative expenses (SG&A) increased $137.2 million in the third quarter of 2024 versus the same period last year primarily due to investments in long-term growth strategies, including expenses to support net new store openings and digital technologies, and higher employee-related costs.

As a percent of Net sales, consolidated SG&A increased 200 basis points in the third quarter of 2024 compared to the same period last year for these same reasons.

The Paint Stores Group’s SG&A increased $75.0 million in the third quarter of 2024 compared to the same period last year due primarily due to investments in long-term growth initiatives, including increased spending from new store openings, and higher employee-related costs.

The Consumer Brands Group’s SG&A decreased $5.4 million in the third quarter of 2024 compared to the same period last year primarily due to effective cost control in managing the operations of the business, partially offset by higher employee-related costs.

The Performance Coatings Group’s SG&A decreased $0.5 million in the third quarter of 2024 compared to the same period last year primarily due to lower employee-related costs.

The Administrative function’s SG&A increased $68.1 million in the third quarter of 2024 compared to the same period last year due primarily to higher employee-related costs and increased expenses related to digital technologies and systems.

Other general expense (income) - net decreased $61.2 million in the third quarter of 2024 compared to the same period last year primarily due to a decrease in provisions for environmental matters, net in the Administrative function and increased net gains on sale or disposition of assets.

See Note 15 in Item 1 for further details.

Interest expense increased $1.5 million in the third quarter of 2024 compared to the same period last year primarily due to an increase in short-term borrowings.

See Note 6 in Item 1 for additional information on the Company’s outstanding debt.

Other expense (income) - net was expense of $9.5 million in the third quarter of 2024 compared to income of $8.0 million in the same period last year primarily due to higher foreign currency transaction losses in the current year and an increase in miscellaneous expenses, partially offset by an increase in miscellaneous income.

See Note 15 in Item 1 for further details.

Nine Months Ended September 30, 2024

Consolidated Cost of goods sold decreased $410.9 million, or 4.3%, in the first nine months of 2024 compared to the same period in 2023 due primarily to moderating raw material costs, partially offset by a low single-digit increase in sales volume.

Consolidated gross profit increased $412.5 million in the first nine months of 2024 compared to the same period in 2023 primarily due to moderating raw material costs and higher Net sales.

Consolidated gross profit as a percent of consolidated Net sales increased in the first nine months of 2024 to 48.4% compared to 46.1% during the same period in 2023 for these same reasons.

The Paint Stores Group’s gross profit in the first nine months of 2024 was higher than the same period last year by $181.8 million due primarily to higher Net sales and moderating raw material costs.

The Paint Stores Group’s gross profit as a percent of Net sales increased in the first nine months of 2024 compared to the same period in 2023 for these same reasons.

The Consumer Brands Group’s gross profit increased by $206.2 million in the first nine months of 2024 compared to the same period last year due primarily to higher fixed cost absorption in the manufacturing and distribution operations within the segment and moderating raw material costs, partially offset by lower Net sales.

The Consumer Brands Group’s gross profit as a percent of Net sales increased in the first nine months of 2024 compared to the same period last year for these same reasons.

The Performance Coatings Group’s gross profit increased $11.6 million in the first nine months of 2024 compared to the same period last year primarily due to moderating raw material costs, partially offset by lower Net sales.

The Performance Coatings Group’s gross profit as a percent of Net sales increased in the first nine months of 2024 compared to the same period last year for these same reasons.

Consolidated SG&A increased $329.7 million in the first nine months of 2024 versus the same period last year primarily due to investments in long-term growth strategies, including expenses to support net new store openings and digital technologies, and higher employee-related costs.

As a percent of Net sales, consolidated SG&A increased 180 basis points in the first nine months of 2024 compared to the same period last year for these same reasons.

The Paint Stores Group’s SG&A increased $166.9 million in the first nine months of 2024 compared to the same period last year primarily due to investments in long-term growth initiatives, including increased spending from new store openings, costs to support higher sales and higher employee-related costs.

The Consumer Brands Group’s SG&A increased $1.0 million in the first nine months of 2024 compared to the same period last year due to higher employee-related costs, partially offset by effective cost control in managing the operations of the business.

The Performance Coatings Group’s SG&A increased $15.7 million in the first nine months of 2024 compared to the same period last year due primarily to investments in long-term initiatives.

The Administrative function’s SG&A increased $146.1 million in the first nine months of 2024 compared to the same period last year due primarily to higher employee-related costs and increased expenses related to digital technologies and systems.

Other general expense (income) - net was income of $30.9 million in the third quarter of 2024 compared to expense of $39.9 million in the same period last year primarily due to a decrease in provisions for environmental matters, net in the Administrative function, increased net gains on sale or disposition of assets and a decrease in miscellaneous expenses.

This activity was partially offset by the gain recognized in the prior period related to the divestiture of a business.

Three Months Ended March 31, 2025

Consolidated Cost of goods sold decreased $89.7 million, or 3.2%, in the first quarter of 2025 compared to the same period in 2024 primarily due to a low-single digit decrease in volume and currency translation rate changes, which decreased Cost of goods sold by 1.7%.

Consolidated gross profit increased $28.1 million in the first quarter of 2025 compared to the same period in 2024 primarily due to higher selling prices in the Paint Stores Group, partially offset by lower sales volumes in all segments and currency translation rate changes.

Consolidated gross profit as a percent of consolidated Net sales increased in the first quarter of 2025 to 48.2% compared to 47.2% during the same period in 2024 for these same reasons.

The Paint Stores Group’s gross profit in the first quarter of 2025 was higher than the same period last year by $79.8 million due primarily to higher Net sales driven by higher selling prices.

The Paint Stores Group’s gross profit as a percent of Net sales increased in the first quarter of 2025 compared to the same period in 2024 for these same reasons.

The Consumer Brands Group’s gross profit decreased by $32.7 million in the first quarter of 2025 compared to the same period last year due primarily to lower Net sales and unfavorable currency related impacts.

The Consumer Brands Group’s gross profit as a percent of Net sales decreased in the first quarter of 2025 compared to the same period in 2024 for these same reasons.

The Performance Coatings Group’s gross profit decreased $26.2 million in the first quarter of 2025 compared to the same period last year due primarily to lower Net sales and unfavorable currency related impacts.

The Performance Coatings Group’s gross profit as a percent of Net sales increased slightly in the first quarter of 2025 compared to the same period last year.

Consolidated Selling, general and administrative expenses (SG&A) decreased $6.0 million in the first quarter of 2025 versus the same period last year primarily due to effective cost control in managing the operations of the business and currency translation rate changes, partially offset by modestly higher employee-related costs.

As a percent of Net sales, consolidated SG&A increased 30 basis points in the first quarter of 2025 compared to the same period last year.

The Paint Stores Group’s SG&A increased $27.2 million in the first quarter of 2025 compared to the same period last year due primarily due to higher employee-related costs.

The Consumer Brands Group’s SG&A decreased $5.4 million in the first quarter of 2025 compared to the same period last year primarily due to lower employee-related costs and currency translation rate changes.

The Performance Coatings Group’s SG&A decreased $6.8 million in the first quarter of 2025 compared to the same period last year primarily due to effective cost control in managing the operations of the business and currency translation rate changes.

The Administrative function’s SG&A decreased $21.0 million in the first quarter of 2025 compared to the same period last year due primarily to effective cost control in managing the operations of the business, including spending on digital project investments and lower employee-related costs.

Other general expense - net increased $6.9 million in the first quarter of 2025 compared to the same period last year primarily due to increased miscellaneous operating expenses in the Administrative function.

See Note 15 in Item 1 for further details.

For information on impairment recognized in prior periods as a result of the divestiture of the China architectural business, see Notes 3 and 5 in Item 1 and Note 3 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Interest expense decreased $5.7 million in the first nine months of 2024 compared to the same period last year primarily due to a decrease in long-term debt outstanding during the first nine months of 2024 compared to the same period last year, partially offset by higher interest expense on short-term borrowings.

Interest expense increased $0.8 million in the first quarter of 2025 compared to the same period last year.

See Note 6 in Item 1 for additional information on the Company’s outstanding debt.

Other expense (income) - net was income of $30.2 million in the first nine months of 2024 compared to income of $17.0 million in the same period last year.

The increase is primarily due to lower foreign currency transaction related losses in the current year compared to the prior period and an increase in miscellaneous income, partially offset by a decrease in investment gains.

Other expense (income) - net was expense of $2.9 million in the first quarter of 2025 compared to income of $7.7 million in the same period last year primarily due to higher currency transaction losses in the current year, a decrease in net investment gains and an increase in miscellaneous expenses.

See Note 15 in Item 1 for further details.

The following table presents Income before income taxes by segment and as a percentage of Net sales by segment:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 % Change 2024 2023 % Change

Three Months Ended March 31,

2025 2024 % Change

Income Before Income Taxes:

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Income Before Income Taxes

as a % of Net Sales:

as a Percent of Net Sales:

Paint Stores Group 18.4 % 17.2 %

1 unchanged sentence

Performance Coatings Group 13.3 % 14.1 %

Administrative nm nm nm nm

Administrative nm nm

Total 12.3 % 11.9 %

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Income Tax Expense

The effective tax rate was 21.2% for the third quarter of 2024 compared to 24.5% for the third quarter of 2023, and 22.4% for the first nine months of 2024 compared to 22.9% for the first nine months of 2023.

The decrease in the effective tax rate for both periods was primarily due to a more favorable impact of tax benefits related to employee share-based payments.

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

The effective tax rate was 22.8% for the first quarter of 2025 compared to 21.1% for the first quarter of 2024.

The increase in the effective tax rate was primarily due to a less favorable impact of tax benefits related to employee share-based payments.

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

See Note 16 in Item 1 for further details.

Net Income Per Share

Diluted net income per share in the third quarter of 2024 increased 7.8% to $3.18 per share compared to $2.95 per share in the third quarter of 2023.

Diluted net income per share included a $0.19 per share charge for acquisition-related amortization expense in both the third quarter of 2024 and 2023.

In the third quarter of 2023, diluted net income per share also included a charge of $0.06 per share related to activities associated with the Company’s restructuring plan.

Foreign currency translation rate changes decreased diluted net income per share by $0.04 in the third quarter of 2024.

Diluted net income per share for the first nine months of 2024 increased 10.2% to $8.65 per share compared to $7.85 per share in the first nine months of 2023.

Diluted net income per share included a $0.59 and $0.60 per share charge for acquisition-related amortization expense for the first nine months of 2024 and 2023, respectively.

In the first nine months of 2023, diluted net income per share included a net charge of $0.09 per share related to activities associated with the Company’s restructuring plan.

Foreign currency translation rate changes decreased diluted net income per share by $0.06 in the first nine months of 2024.

For information on the Company’s restructuring plan, see Note 4 in Item 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Diluted net income per share increased 1.5% to $2.00 per share in the first quarter of 2025 compared to $1.97 per share in the first quarter of 2024.

Diluted net income per share in the first quarter of 2025 included charges for for acquisition-related amortization expense of $0.19 per share and severance and other restructuring expenses of $0.06 per share.

Diluted net income per share in the first quarter of 2024 included a charge for acquisition-related amortization expense of $0.20 per share.

Foreign currency translation rate changes decreased diluted net income per share by $0.03 in the first quarter of 2025.

FINANCIAL CONDITION, LIQUIDITY AND CASH FLOW

The Company’s financial condition and liquidity remained strong at September 30, 2024.

The Company generated $2.219 billion in Net operating cash during the first nine months of 2024.

The Company returned cash of $1.972 billion to its shareholders in the form of dividends and share repurchases during the first nine months of 2024.

The Company’s EBITDA increased 5.5% to $3.616 billion for the first nine months of 2024.

The Company’s financial condition and liquidity remained strong at March 31, 2025.

The Company used $61.1 million in Net operating cash during the first quarter of 2025 primarily as a result of seasonal increases in working capital requirements, partially offset by Net income.

This Net operating cash usage was funded through an increase in Short-term borrowings.

The Company returned cash of $552.1 million to its shareholders in the form of dividends and share repurchases during the first quarter of 2025.

The Company’s EBITDA increased 2.4% to $917.7 million for the first three months of 2025.

Refer to the Non-GAAP Financial Measures section below for the definition and calculation of EBITDA.

At September 30, 2024, the Company had Cash and cash equivalents of $238.2 million and total debt outstanding of $10.140 billion.

At March 31, 2025, the Company had Cash and cash equivalents of $199.8 million and total debt outstanding of $10.776 billion.

Total debt, net of Cash and cash equivalents, was $10.577 billion.

1 unchanged sentence

Net Working Capital

Net working capital, defined as Total current assets less Total current liabilities, decreased $819.4 million to a deficit of $1.244 billion at September 30, 2024 compared to a deficit of $424.4 million at September 30, 2023.

The net working capital decrease is due to an increase in current liabilities and a decrease in current assets.

Current asset balances decreased $224.5 million at September 30, 2024 compared to September 30, 2023 primarily due to a decrease in Cash and cash equivalents of $265.2 million primarily due to the timing of the SIC Holding acquisition in October 2023 and a decrease of $14.9 million in Other current assets, partially offset by an increase of $32.5 million in Accounts receivable, net and an increase in Inventories of $23.1 million.

Current liability balances increased $594.9 million at September 30, 2024 compared to September 30, 2023 primarily due to an increase in Short-term borrowings of $576.9 million, an increase in Other accruals of $140.3 million, primarily related to environmental liabilities, liabilities from contracts with customers, commitments related to Non-Traded Investments and miscellaneous other current liabilities, an increase in Accounts payable of $112.9 million and an increase in the Current portion of operating lease liabilities of $21.7 million, partially offset by a decrease in Accrued taxes of $165.3 million, a decrease in the Current portion of long-term debt of $49.3 million and a decrease of $42.3 million in compensation and taxes withheld.

At September 30, 2024 and 2023, the Company’s current ratio was 0.83 and 0.94, respectively, compared to 0.83 at December 31, 2023.

Net working capital, defined as Total current assets less Total current liabilities, decreased $195.9 million to a deficit of $1.837 billion at March 31, 2025 compared to a deficit of $1.641 billion at March 31, 2024.

The net working capital decrease is due to an increase of $393.2 million in current liabilities partially offset by an increase in current assets of $197.3 million.

Current asset balances increased $197.3 million at March 31, 2025 compared to March 31, 2024 primarily due to an increase in Inventories of $137.2 million, an increase in Other current assets of $36.2 million and an increase in Cash and cash equivalents of $19.9 million.

Current liability balances increased $393.2 million at March 31, 2025 compared to March 31, 2024 primarily due to an increase in Short-term borrowings of $542.2 million, an increase in Accounts payable of $59.0 million and an increase in the Current portion of operating lease liabilities of $16.1 million, partially offset by a decrease in the Current portion of long-term debt of $198.3 million and a decrease in Other accruals of $18.2 million, primarily related to decreases in environmental liabilities and miscellaneous other current liabilities, partially offset by an increase in commitments related to Non-Traded Investments.

The Company’s current ratio was 0.77, 0.79 and 0.78 at March 31, 2025, December 31, 2024 and March 31, 2024, respectively.

Property, Plant and Equipment

Net property, plant and equipment increased $507.9 million in the first nine months of 2024 and $764.1 million in the twelve months since September 30, 2023.

The increase in the first nine months was primarily due to capital expenditures of $730.6 million, partially offset by depreciation expense of $217.3 million and foreign currency translation and other adjustments of $5.4 million.

Since September 30, 2023, the increase was primarily due to capital expenditures of $1.080 billion and foreign currency translation and other adjustments of $5.6 million, partially offset by depreciation expense of $291.6 million and the sale or disposition of fixed assets of $29.9 million.

Capital expenditures primarily represented expenditures related to construction activities associated with the new headquarters and research and development (R&D) center in the Administrative function.

Construction of the new headquarters and R&D center is expected to be complete in 2025.

In addition, capital expenditures were related to manufacturing capacity expansion, operational efficiencies and maintenance projects in the Consumer Brands and Performance Coatings Groups and the opening of new paint stores and renovation and improvements in existing stores in the Paint Stores Group.

In 2024, the Company expects to spend approximately the same as 2023 for capital expenditures, which it will fund primarily through the generation of operating cash.

Core capital expenditures are targeted to be approximately 2% of Net sales in 2024 and are expected to be for investments in various productivity improvement and maintenance projects at existing manufacturing, distribution and R&D facilities and new store openings.

Additionally, the Company will continue to construct its new headquarters and R&D center.

Refer to “Real Estate Financing” below for further information on the financing transaction for the new headquarters.

Net property, plant and equipment increased $130.2 million in the first three months of 2025 and $654.6 million in the twelve months since March 31, 2024.

The increase in the first three months was primarily due to capital expenditures of $180.9 million and currency translation and other adjustments of $29.2 million, partially offset by depreciation expense of $79.9 million.

Since March 31, 2024, the increase was primarily due to capital expenditures of $935.9 million and assets acquired through business combinations of $41.0 million, partially offset by depreciation expense of $306.2 million, the sale or disposition of fixed assets of $10.7 million and currency translation and other adjustments of $5.4 million.

Capital expenditures primarily represented expenditures related to construction activities associated with the new global headquarters and research and development (R&D) center in the Administrative function.

Construction of the new global headquarters and R&D center is expected to be complete in 2025.

Also included in 2025 capital expenditures were expenditures related to manufacturing capacity expansion, operational efficiencies and maintenance projects in the Consumer Brands and Performance Coatings Groups and the opening of new paint stores and renovation and improvements in existing stores in the Paint Stores Group.

In 2025, the Company expects to spend slightly less than 2024 for capital expenditures, which it will fund primarily through the generation of operating cash.

Core capital expenditures, which exclude expenditures associated with the new global headquarters and R&D center, are expected to be for investments in various productivity improvement and maintenance projects at existing manufacturing, distribution and R&D facilities and new store openings.

Refer to “Real Estate Financing” below for further information on the financing transaction for the new global headquarters.

Real Estate Financing

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

As part of the terms of the transaction, the Company is contractually obligated for completing the construction of the building and related improvements at the new headquarters.

This transaction did not meet the criteria for recognition as an

asset sale under U.S.

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

As part of the terms of the transaction, the Company is contractually obligated for completing the construction of the building and related improvements at the new global headquarters.

This transaction did not meet the criteria for recognition as an asset sale under U.S.

generally accepted accounting principles (US GAAP) and as such, was accounted for as a real estate financing transaction.

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

The Company received the final proceeds for the new global headquarters in the first quarter of 2025 for

a total of $800 million.

The initial lease term includes the construction period and extends for 30 years thereafter, and the Company has the right and option to extend the lease term.

The lease payment amounts during the construction period are dependent upon the timing and amount of total reimbursement of construction and other costs received by the Company.

The amount of the lease payments during the initial 30 year lease term will be calculated upon completion of the construction period and receipt of total reimbursement of construction and other costs.

Lease payments over the next twelve months are expected to be approximately $50 million.

The amount of the lease payments during the initial 30 year lease term will be calculated upon completion of the construction period.

Once determinable, this is expected to result in a significant increase in the Company’s long-term contractual obligations.

See Note 8 in Item 1 and Notes 8 and 11 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for more information concerning real estate financing.

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

The Company will continue to recognize the related assets within Property, plant and equipment, net on the Consolidated Balance Sheets under US GAAP.

These assets will be subject to depreciation over their useful lives in accordance with the Company’s accounting policies.

The Company will also allocate payments between interest and repayment of the financing liability over the life of the agreement.

See Note 8 in Item 1 and Note 10 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for more information concerning real estate financing.

Goodwill and Intangible Assets

Goodwill increased $31.0 million from December 31, 2023 and increased $244.7 million from September 30, 2023.

The increase during the first nine months of 2024 was primarily due to purchase accounting allocations of $27.1 million and foreign currency translation fluctuations of $3.9 million.

The increase over the twelve month period from September 30, 2023 was primarily due to purchase accounting allocations of $181.3 million and foreign currency translation fluctuations and other adjustments of $63.4 million.

Intangible assets decreased $223.6 million from December 31, 2023 and $167.1 million from September 30, 2023.

The decrease during the first nine months of 2024 was primarily due to amortization of $244.8 million and foreign currency translation fluctuations and other adjustments of $0.4 million, partially offset by capitalized software of $21.6 million.

The decrease over the twelve month period from September 30, 2023 was primarily due to amortization of $319.6 million and trademark impairment of $24.0 million, partially offset by purchase accounting allocations of $110.7 million, capitalized software of $21.6 million, and foreign currency translation fluctuations and other adjustments of $44.2 million.

See Note 5 in Item 1 for further details concerning the Company’s Goodwill and Intangible assets and Note 3 in Item 1 for information on the impairment test performed as a result of the China architectural business divestiture in in the third quarter of 2023.

In addition, see Note 7 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for more information concerning the Company’s Goodwill and Intangible assets.

Other assets increased $234.6 million from December 31, 2023 and $331.3 million from September 30, 2023.

The increase in the first nine months of 2024 and from September 30, 2023 was primarily due to an increase in Non-Traded Investments and other assets related to contracts with customers, deposits, including the deposit related to the acquisition that closed in October 2024 (see Note 3 in Item 1), and assets related to cloud computing arrangements.

See Note 1 in Item 1 for further details on the Company’s Non-Traded Investments.

Goodwill increased $128.3 million from December 31, 2024 and increased $87.0 million from March 31, 2024.

The increase during the first three months of 2025 was primarily due to purchase accounting allocations of $74.8 million and foreign currency translation fluctuations of $53.5 million.

The increase over the twelve month period from March 31, 2024 was primarily due to purchase accounting allocations of $95.8 million, partially offset by foreign currency translation fluctuations and other adjustments of $8.8 million.

Intangible assets decreased $39.8 million from December 31, 2024 and $284.1 million from March 31, 2024.

The decrease during the first three months of 2025 was primarily due to amortization of $81.0 million, partially offset by currency translation fluctuations and other adjustments of $41.2 million.

The decrease over the twelve month period from March 31, 2024 was primarily due to amortization of $325.6 million and currency translation fluctuations and other adjustments of $17.5 million, partially offset by capitalized software of $30.7 million and purchase accounting allocations of $28.3 million.

See Note 5 in Item 1 and Note 6 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for more information concerning the Company’s Goodwill and Intangible assets.

Other assets increased $126.8 million from December 31, 2024 and $459.2 million from March 31, 2024.

The increase in the first quarter of 2025 was primarily due to an increase in Non-Traded Investments, partially offset by a decrease in assets related to cross currency swap contracts.

The increase from March 31, 2024 was primarily due to an increase in Non-Traded Investments, finance lease right-of-use (ROU) assets and assets related to cloud computing arrangements.

See Notes 1 and 12 in Item 1 and Notes 1 and 9 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 in for further information.

Debt (including Short-term borrowings)

September 30, December 31, September 30,

March 31, December 31, March 31,

2025 2024 2024

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Long-term liabilities for defined benefit pension and other postretirement benefit plans did not change significantly from December 31, 2024.

The changes from September 30, 2023 are primarily due to changes in actuarial assumptions.

The changes from March 31, 2024 are primarily due to changes in actuarial assumptions.

See Note 8 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for more information concerning the Company’s liabilities for defined benefit pension and other postretirement benefit plans.

Deferred Income Taxes

Deferred income taxes decreased $51.4 million from December 31, 2023 and $16.7 million from September 30, 2023 primarily due to amortization of acquisition-related intangible assets.

Deferred income taxes decreased $21.5 million from December 31, 2024 and $80.3 million from March 31, 2024 primarily due to amortization of acquisition-related intangible assets.

Environmental-Related Liabilities

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Depreciation of capital expenditures and other expenses related to ongoing environmental compliance measures were included in the normal operating expenses of conducting business.

The Company’s capital expenditures, depreciation and other expenses related to ongoing environmental compliance measures were not material to the Company’s financial condition, liquidity, cash flow or results of operations during the first nine months of 2024.

Management does not expect that such capital expenditures, depreciation and other expenses will be material to the Company’s financial condition, liquidity, cash flow or results of operations in 2025.

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Contractual Obligations, Commercial Commitments and Warranties

There have been no significant changes to the Company’s contractual obligations and commercial commitments in the first nine months of 2024 as summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

There have been no significant changes to the Company’s contractual obligations and commercial commitments in the first three months of 2025 as summarized in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

See Note 9 in Item 1 for information concerning litigation.

Shareholders’ Equity

September 30, December 31, September 30,

March 31, December 31, March 31,

2025 2024 2024

Total shareholders’ equity $ 4,130.1 $ 4,051.2 $ 3,503.7

Shareholders’ equity increased $440.3 million during the first nine months of 2024 primarily as a result of Net income of $2.201 billion and an increase in Other capital of $277.8 million mainly associated with stock-based compensation expense and stock option exercises.

These increases were partially offset by $1.444 billion of treasury stock activity mainly attributable to treasury stock repurchases, cash dividends paid on common stock of $543.6 million and a decrease in AOCI of $51.9 million mainly due to foreign currency translation adjustments.

Shareholders’ equity increased $376.1 million since September 30, 2023 primarily as a result of Net income of $2.558 billion and an increase in Other capital of $367.5 million mainly associated with stock-based compensation expense and stock option exercises.

These increases were partially offset by $1.931 billion of treasury stock activity mainly attributable to treasury stock repurchases, cash dividends paid on common stock of $698.9 million and an increase in AOCI of $80.2 million mainly due to foreign currency translation adjustments.

During the first nine months of 2024, the Company purchased 4.4 million shares of its common stock for treasury purposes through open market purchases.

Shareholders’ equity increased $78.9 million during the first three months of 2025 primarily as a result of Net income of $503.9 million, an increase in AOCI of $102.3 million mainly due to currency translation adjustments and an increase in Other capital of $46.2 million mainly associated with stock-based compensation expense and stock option exercises.

These increases were partially offset by $373.2 million of treasury stock activity mainly attributable to treasury stock repurchases and cash dividends paid on common stock of $200.4 million.

Shareholders’ equity increased $626.4 million since March 31, 2024 primarily as a result of Net income of $2.680 billion and an increase in Other capital of $323.6 million mainly associated with stock-based compensation expense and stock option exercises.

These increases were partially offset by $1.569 billion of treasury stock activity mainly attributable to treasury stock repurchases, cash dividends paid on common stock of $741.3 million and a decrease in AOCI of $67.9 million mainly due to currency translation adjustments.

During the first three months of 2025, the Company purchased 1.0 million shares of its common stock for treasury purposes through open market purchases.

The Company acquires its common stock for general corporate purposes, and depending on its cash position and market conditions, it may acquire additional shares in the future.

The Company had remaining authorization at September 30, 2024 to purchase 35.3 million shares of its common stock.

The Company had remaining authorization at March 31, 2025 to purchase 33.4 million shares of its common stock.

In February 2025, the Company’s Board of Directors increased the quarterly cash dividend from $0.715 per share to $0.79 per share.

This quarterly dividend was approved in all subsequent quarters and will result in an annual dividend for 2024 of $2.86 per share, or a 31% payout of 2023 diluted net income per share.

Net operating cash for the nine months ended September 30, 2024 was a source of $2.219 billion compared to a source of $2.603 billion for the same period in 2023.

The decrease in Net operating cash was primarily due to higher cash requirements for working capital, partially offset by higher Net income.

Net investing cash usage increased $401.8 million in the first nine months of 2024 to a usage of $910.8 million compared to a usage of $509.0 million for the same period in 2023 primarily due to an increase in cash used for capital expenditures, cash on deposit for a pending acquisition in the current year and reduced proceeds from the sale of assets, partially offset by proceeds from the divestiture of a business in the prior period.

Net financing cash usage decreased $438.8 million in the first nine months of 2024 to a usage of $1.346 billion compared to a usage of $1.785 billion for the same period in 2023 primarily due to an increase in short-term borrowings, proceeds from long-term debt in the current year and higher proceeds from stock options exercised, partially offset by an increase in payments of long-term debt, treasury stock purchases and cash dividends.

In the twelve month period from October 1, 2023 through September 30, 2024, the Company generated net operating cash of $3.137 billion, used $1.441 billion in investing activities and used $1.986 billion in financing activities.

This quarterly dividend, if approved in each of the remaining quarters of 2025, would result in an annual dividend for 2025 of $3.16 per share, or a 30% payout of 2024 diluted net income per share.

Effective April 16, 2025, the Company’s shareholders approved The Sherwin-Williams Company 2025 Equity and Incentive Compensation Plan.

See Note 10 in Item 1 for additional information.

Net operating cash for the three months ended March 31, 2025 was a usage of $61.1 million compared to a usage of $58.9 million for the same period in 2024.

The decrease in Net operating cash was primarily due to higher cash requirements for working capital.

Net investing cash usage decreased $5.1 million in the first three months of 2025 to a usage of $316.2 million compared to a usage of $321.3 million for the same period in 2024 primarily due to a decrease in cash used for capital expenditures, partially offset by cash used for acquisitions.

Net financing cash source increased $77.6 million in the first three months of 2025 to a source of $367.2 million compared to a source of $289.6 million for the same period in 2024 primarily due to an increase in short-term borrowings and a decrease in treasury stock purchases, partially offset by an increase in payments of long-term debt, a decrease in proceeds from stock option exercises and real estate financing transactions and an increase in cash dividends.

In the twelve month period from April 1, 2024 through March 31, 2025, the Company generated Net operating cash of $3.151 billion, used $1.191 billion in investing activities and used $1.940 billion in financing activities.

The Company is exposed to market risk associated with interest rate, foreign currency and commodity fluctuations.

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See Notes 12 and 15 in Item 1 for additional information related to the Company’s use of derivative instruments.

The Company believes it may be exposed to continuing market risk from foreign currency exchange rate and commodity price fluctuations.

However, the Company does not expect that foreign currency exchange rate and commodity price fluctuations or hedging contract losses will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

The Company believes it may be exposed to continuing market risk from interest rate, foreign currency exchange rate and commodity price fluctuations.

However, the Company does not expect that interest rate, foreign currency exchange rate and commodity price fluctuations or hedging contract losses will have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Financial Covenant

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Refer to the “Non-GAAP Financial Measures” section below for a reconciliation of EBITDA to Net income.

At September 30, 2024, the Company was in compliance with the covenant and expects to remain in compliance.

At March 31, 2025, the Company was in compliance with the covenant and expects to remain in compliance.

The Company’s notes, debentures and revolving credit agreements contain various default and cross-default provisions.

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Non-GAAP Financial Measures

Management utilizes certain financial measures that are not in accordance with US GAAP to analyze and manage the performance of the business.

Management of the Company utilizes certain financial measures that are not in accordance with US GAAP to analyze and manage the performance of the business.

The required disclosures for these non-GAAP measures are shown below.

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income $ 503.9 $ 505.2

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EBITDA $ 917.7 $ 896.2

Restructuring expense — — — 9.6

Impairment of assets related to China divestiture — — — 34.0

Gain on divestiture of domestic aerosol business — — — (20.1)

Severance and other restructuring expenses 19.3 —

Adjusted EBITDA $ 937.0 $ 896.2

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Certain statements contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report constitute “forward-looking statements” within the meaning of federal securities laws.

These forward-looking statements are based upon management’s current expectations, predictions, estimates, assumptions and beliefs concerning future events and conditions and may discuss, among other things, anticipated future performance (including sales and earnings), expected growth, future business plans and the costs and potential liability for environmental-related matters and the lead pigment and lead-based paint litigation.

Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “believe,” “expect,” “estimate,” “project,” “plan,” “goal,” “target,” “potential,” “intend,” “aspire,” “strive,” “may,” “will,” “should,” “could,” “would,” “seek,” or “anticipate” or the negative thereof or comparable terminology.

Any statement that is not historical in nature is a forward-looking statement and may be identified by the use of words and phrases such as “anticipate,” “aspire,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “strive,” “target,” “will,” or “would” or the negative thereof or comparable terminology.

Readers are cautioned not to place undue reliance on any forward-looking statements.

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These risks, uncertainties and other factors include such things as:

• general business conditions, including the strength of retail and manufacturing economies and growth in the coatings industry;

• changes in general domestic and international economic conditions, including due to changes in inflation rates, interest rates, tax rates, unemployment rates, labor costs, healthcare costs, recessionary conditions, geopolitical conditions, government policies, laws and regulations;

• weakening of global credit markets and our ability to generate cash to service our indebtedness;

• fluctuations in foreign currency exchange rates, including as a result of inflation, central bank monetary policies, currency controls and other exchange restrictions;

• any disruption in the availability of, or increases in the price of, raw material and energy supplies;

• disruptions in the supply chain, including those related to industry capacity constraints, raw material availability, transportation and logistics delays and constraints, political instability or civil unrest;

• catastrophic events, adverse weather conditions and natural disasters, including those that may be related to climate change or otherwise;

• losses of or changes in our relationships with customers and suppliers;

• competitive factors, including pricing pressures and product innovation and quality;

• our ability to successfully integrate past and future acquisitions into our existing operations, as well as the performance of the businesses acquired;

• risks and uncertainties associated with our expansion into and our operations in Asia, Europe, South America and other foreign markets, including general economic conditions, policy changes affecting international trade, political instability, inflation rates, recessions, sanctions, foreign currency exchange rates and controls, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest, armed conflicts and wars (including the ongoing conflict between Russia and Ukraine and the Israel-Hamas war) and other economic and political factors;

• cybersecurity incidents and other disruptions to our information technology systems, and our reliance on information technology systems;

• general business and economic conditions in the United States and worldwide;

• inflation rates, interest rates, unemployment rates, labor costs, healthcare costs, recessionary conditions, geopolitical conditions, terrorist activity, armed conflicts and wars, public health crises, pandemics, outbreaks of disease and supply chain disruptions;

• shifts in consumer behavior driven by economic downturns in cyclical segments of the economy;

• shortages and increases in the cost of raw materials and energy;

• catastrophic events, adverse weather conditions and natural disasters (including those that may be related to climate change);

• the loss of any of our largest customers;

• increased competition or failure to keep pace with developments in key competitive areas of our business;

• disruptions to our information technology systems, including due to digitization efforts or cybersecurity incidents;

• our ability to attract, retain, develop and progress a qualified global workforce;

• our ability to execute on our business strategies related to sustainability matters, and achieve related expectations, including as a result of evolving regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing, and changes in carbon markets;

• our ability to successfully integrate past and future acquisitions into our existing operations;

• risks and uncertainties associated with our expansion into and our operations in South America, Asia, Europe and other foreign markets;

• policy changes affecting international trade, including import/export restrictions and tariffs;

• our ability to achieve our strategies or expectations relating to sustainability considerations, including as a result of evolving legal, regulatory and other standards, processes and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite suppliers, energy sources, or financing and changes in carbon markets;

• damage to our business, reputation, image or brands due to negative publicity;

• our ability to protect or enforce our material trademarks and other intellectual property rights;

• our ability to comply with numerous and evolving U.S.

laws, rules, and regulations and the effectiveness of our compliance efforts;

• adverse changes to our tax positions in U.S.

jurisdictions, including as a result of new or revised tax laws or interpretations;

• increasingly stringent domestic and foreign governmental regulations, including those affecting health, safety and the environment;

• inherent uncertainties involved in assessing our potential liability for environmental-related activities;

• other changes in governmental policies, laws and regulations, including changes in tariff policies, accounting policies and standards;

• the nature, cost, quantity and outcome of pending and future litigation and other claims, including the lead pigment and lead-based paint litigation, and the effect of any legislation and administrative regulations relating thereto.

• the infringement or loss of our intellectual property rights or the theft or unauthorized use of our trade secrets or other confidential business information;

• a weakening of global credit markets or changes to our credit ratings;

• our ability to generate cash to service our indebtedness;

• fluctuations in foreign currency exchange rates and changing monetary policies;

• our ability to comply with a variety of complex U.S.

laws, rules and regulations;

• increases in tax rates, or changes in tax laws or regulations;

• our ability to comply with numerous, complex and increasingly stringent domestic and foreign health, safety and environmental laws, regulations and requirements;

• our liability related to environmental investigation and remediation activities at some of our currently- and formerly-owned sites;

• the nature, cost, quantity and outcome of pending and future litigation, including lead pigment and lead-based paint litigation;

• the other risk factors discussed in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and our other reports filed with the SEC.

Readers are cautioned that it is not possible to predict or identify all of the risks, uncertainties and other factors that may affect future results and that the above list should not be considered a complete list.

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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-Q

Item 2. Management’s Discussion and Analysis