What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-07-24 · 145 added, 148 removed, 207 unchanged (59% of the section changed)

5 unchanged sentences

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

• Consolidated Net sales increased 0.7% to $6.315 billion in the quarter and decreased 0.2% to $11.620 billion in the year to date period

• Consolidated Net sales increased 3.2% to $6.358 billion in the quarter and increased 1.0% to $17.978 billion in the year to date period

◦ Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 3.6% and 1.9% in the quarter and year to date period, respectively

• Increased Selling, general and administrative expenses in the quarter for broader restructuring initiative related to softer demand, sooner than anticipated building related costs and heightened growth investment related to incremental competitive opportunities

• Diluted net income per share decreased 14.3% to $3.00 per share in the quarter compared to $3.50 per share in the second quarter of 2024 and decreased 8.6% to $5.00 per share in the year to date period compared to $5.47 in the year to date period of 2024

We will continue to execute on our consistent and disciplined strategy, Success by Design.

In a softer demand market which is expected to continue, if not deteriorate in the second half of 2025, we are responding by accelerating our restructuring actions.

These actions are not at the cost of abandoning our strategy or limiting future growth prospects when markets recover.

We will continue to make investments to deepen customer relationships, capture incremental share and reward our shareholders over the long term.

• Diluted net income per share increased 5.3% to $3.35 per share in the quarter compared to $3.18 per share in the third quarter of 2024 and decreased 3.6% to $8.34 per share in the year to date period compared to $8.65 in the year to date period of 2024

• Net operating cash generated in the year to date period increased 6.3% to $2.359 billion, or 13.1% of Net sales

In a demand environment which has remained softer for longer, we have continued to serve our customers, invest for success, control costs, take advantage of a unique competitive environment and execute on enterprise priorities.

Although we face a challenging macro-environment, we will continue to execute on our differentiated strategy, Success by Design, by focusing on providing customers with differentiated solutions that make them more productive and profitable.

We remain well-positioned in each of our targeted markets and continue to execute on deliberate, disciplined and targeted 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.

1 unchanged sentence

We continue to pursue business acquisitions, transactions and investments that fit our long-term growth strategy and 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 $269.8 million in cash and $2.235 billion of unused capacity under our credit facilities at June 30, 2025.

We have a strong liquidity position, with $241.5 million in cash and $3.131 billion of unused capacity under our credit facilities at September 30, 2025.

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

1 unchanged sentence

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

The results of operations for the three and six months ended June 30, 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.

The results of operations for the three and nine months ended September 30, 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 condensed consolidated financial statements for the three and six months ended June 30, 2025 and 2024.

Three Months Ended June 30, 2025

Three Months Ended June 30,

The following discussion and analysis addresses comparisons of material changes in the condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended September 30, 2025

Three Months Ended September 30,

2025 2024 $ Change % Change Currency Impact Acquisition

5 unchanged sentences

Total $ 6,358.2 $ 6,162.5 $ 195.7 3.2 % 0.3 % 0.6 %

Consolidated Net sales increased by 0.7% in the second quarter of 2025 primarily due to higher sales in the Paint Stores Group, partially offset by lower sales in the Consumer Brands and Performance Coatings Groups.

Net sales of all consolidated foreign subsidiaries increased to $1.155 billion in the second quarter of 2025 compared to $1.143 billion in the same period last year.

Consolidated Net sales increased by 3.2% in the third quarter of 2025 primarily due to higher sales in the Paint Stores and Performance Coatings Groups, partially offset by lower sales in the Consumer Brands Group.

Net sales of all consolidated foreign subsidiaries increased to $1.135 billion in the third quarter of 2025 compared to $1.124 billion in the same period last year.

The increase in Net sales for all consolidated foreign subsidiaries was primarily due to higher Net sales in the Europe region.

Net sales of all operations other than consolidated foreign subsidiaries increased to $5.159 billion in the second quarter of 2025 compared to $5.129 billion in the same period last year.

Net sales in the Paint Stores Group increased by 2.3% in the second 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 0.8% in the second quarter of 2025 compared to last year’s comparable period.

Net sales of non-paint products decreased 0.7% in the second quarter of 2025 compared to last year’s comparable period.

Net sales of all operations other than consolidated foreign subsidiaries increased to $5.223 billion in the third quarter of 2025 compared to $5.038 billion in the same period last year.

Net sales in the Paint Stores Group increased by 5.1% in the third quarter of 2025 primarily due to selling price increases, which impacted Net sales by a low-single digit percentage, as well as low-single digit percentage sales volume growth.

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

Net sales from stores open for more than twelve calendar months increased by 3.6% in the third quarter of 2025 compared to last year’s comparable period.

Net sales of non-paint products increased 3.2% in the third 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 4.1% in the second quarter of 2025 primarily due to soft DIY demand in North America and a 1.6% unfavorable impact from foreign currency translation driven by Latin America, partially offset by higher Net sales in Europe.

Net sales in the Performance Coatings Group were effectively flat as a result of incremental sales from acquisitions being offset by selling price decreases, primarily attributable to product mix.

Performance was led by Packaging, which increased by a double digit percentage inclusive of an acquisition and Coil, offset by decreases in all other business units.

Six Months Ended June 30, 2025

Six Months Ended June 30,

Net sales in the Consumer Brands Group decreased by 2.6% in the third quarter of 2025 primarily as a result of soft DIY demand in North America and Latin America, partially offset by higher Net sales in Europe.

Net sales in PCG increased by 1.7% in the third quarter of 2025 primarily as a result of low-single digit percentage sales volume growth, incremental sales from acquisitions and favorable foreign currency translation, partially offset by unfavorable region and business sales mix.

Performance was led by Packaging, which increased by a double digit percentage inclusive of an acquisition and Automotive Refinish, offset by decreases in the other business units.

Nine Months Ended September 30, 2025

Nine Months Ended September 30,

2025 2024 $ Change % Change Currency Impact Acquisition

5 unchanged sentences

Total $ 17,978.4 $ 17,801.3 $ 177.1 1.0 % (0.4) % 0.4 %

Consolidated Net sales were effectively flat in the first six months of 2025.

Higher sales in the Paint Stores Group were offset by lower sales in the Consumer Brands and Performance Coatings Groups.

Net sales of all consolidated foreign subsidiaries decreased to $2.200 billion in the first six months of 2025 compared to $2.246 billion in the same period last year.

Consolidated Net sales increased by 1.0% in the first nine months of 2025 primarily due to higher sales in the Paint Stores Group, partially offset by lower sales in the Consumer Brands and Performance Coatings Groups.

Net sales of all consolidated foreign subsidiaries decreased to $3.335 billion in the first nine months of 2025 compared to $3.370 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 Latin America region.

Net sales of all operations other than consolidated foreign subsidiaries increased 0.3% to $9.420 billion in the first six months of 2025 compared to $9.393 billion in the same period last year.

Net sales in the Paint Stores Group increased by 2.3% in the first six months 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 of all operations other than consolidated foreign subsidiaries increased 1.5% to $14.643 billion in the first nine months of 2025 compared to $14.431 billion in the same period last year.

Net sales in the Paint Stores Group increased by 3.3% in the first nine months 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 from stores open for more than twelve calendar months increased 1.0% in the first six months of 2025 compared to last year’s comparable period.

Net sales of non-paint products decreased 0.5% in the first six months of 2025 compared to last year’s comparable period.

Net sales from stores open for more than twelve calendar months increased 1.9% in the first nine months of 2025 compared to last year’s comparable period.

Net sales of non-paint products increased 0.8% in the first nine months of 2025 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 5.1% in the first six months of 2025 primarily due to soft DIY demand in North America and a 2.4% unfavorable impact from foreign currency translation driven by Latin America, partially offset by higher Net sales in Europe.

Net sales in the Performance Coatings Group decreased by 2.4% in the first six months of 2025 largely due to selling price decreases, primarily attributable to product mix, which impacted Net sales by a low-single digit percentage and a 1.1% unfavorable impact from foreign currency translation.

These decreases were partially offset by incremental sales from acquisitions.

Net sales in the Consumer Brands Group decreased by 4.3% in the first nine months of 2025 primarily due to soft DIY demand in North America and a 1.7% unfavorable impact from foreign currency translation driven by Latin America, partially offset by higher Net sales in Europe.

Net sales in the Performance Coatings Group decreased by 1.1% in the first nine months of 2025 largely due to unfavorable business sales mix, which impacted Net sales by a low-single digit percentage, partially offset by incremental sales from acquisitions.

Performance was led by Packaging, which increased by a double digit percentage inclusive of an acquisition, offset by decreases in all other business units.

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

Three Months Ended June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

4 unchanged sentences

SG&A 1,952.8 30.7 % 1,893.7 30.7 % 5,758.2 32.0 % 5,539.2 31.1 %

Other general expense (income) - net 6.3 0.1 % (33.6) (0.5) % 15.2 0.1 % (31.6) (0.3) %

Other general (income) expense - net (4.7) (0.1) % 0.7 — % 10.5 0.1 % (30.9) (0.2) %

Interest expense 117.2 1.9 % 103.4 1.6 % 333.4 1.8 % 317.2 1.9 %

2 unchanged sentences

Income before income taxes $ 1,060.5 16.7 % $ 1,022.8 16.6 % $ 2,699.2 15.0 % $ 2,836.2 15.9 %

Three Months Ended June 30, 2025

Consolidated Cost of goods sold decreased $11.9 million, or 0.4%, in the second quarter of 2025 compared to the same period in 2024 primarily due to a low-single digit decrease in sales volume.

Consolidated gross profit increased $54.9 million in the second 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 the Paint Stores and Consumer Brands Groups.

Consolidated gross profit as a percent of consolidated Net sales increased in the second quarter of 2025 to 49.4% compared to 48.8% during the same period in 2024 for these same reasons.

The Paint Stores Group’s gross profit in the second quarter of 2025 was higher than the same period last year by $93.5 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 second quarter of 2025 compared to the same period in 2024 for this same reason.

The Consumer Brands Group’s gross profit decreased by $37.1 million in the second quarter of 2025 compared to the same period last year due primarily to lower Net sales, lower fixed cost absorption from decreased production volumes and an unfavorable foreign currency related impact.

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

The Performance Coatings Group’s gross profit decreased $17.2 million in the second quarter of 2025 compared to the same period last year due primarily to lower Net sales and product mix.

The Performance Coatings Group’s gross profit as a percent of Net sales decreased in the second quarter of 2025 compared to the same period last year for these same reasons.

Consolidated Selling, general and administrative expenses (SG&A) increased $165.9 million in the second quarter of 2025 versus the same period last year primarily due to higher employee-related costs and costs related to the new global headquarters and R&D buildings.

As a percent of Net sales, consolidated SG&A increased 250 basis points in the second quarter of 2025 compared to the same period last year.

The Paint Stores Group’s SG&A increased $82.8 million in the second quarter of 2025 compared to the same period last year primarily due to increased costs to support higher sales, including higher employee-related costs and expenses for new store openings, and marketing and advertising.

The Consumer Brands Group’s SG&A decreased $3.0 million in the second quarter of 2025 compared to the same period last year primarily due to effective cost control.

The Performance Coatings Group’s SG&A increased $13.1 million in the second quarter of 2025 compared to the same period last year primarily due to increased costs to support sales, including higher employee-related costs.

The Administrative function’s SG&A increased $73.0 million in the second quarter of 2025 compared to the same period last year due primarily to higher employee-related costs, including severance, and costs related to the new global headquarters and R&D buildings.

Other general expense (income) - net was expense of $6.3 million in the second quarter of 2025 compared to income of $33.6 million in the same period last year primarily due to higher gains on the sale or disposition of assets and insurance recoveries for environmental matters in the second quarter of 2024 which did not recur in the current period.

Three Months Ended September 30, 2025

Consolidated Cost of goods sold increased $97.7 million, or 3.1%, in the third quarter of 2025 compared to the same period in 2024 primarily due to a low-single digit increase in sales volume and unfavorable foreign currency translation.

Consolidated Gross profit increased $98.0 million in the third quarter of 2025 compared to the same period in 2024 primarily due to higher sales volumes in the Paint Stores and Performance Coatings Groups and higher selling prices in the Paint Stores Group, partially offset by lower sales volumes in the Consumer Brands Group.

Consolidated Gross profit as a percent of consolidated Net sales increased in the third quarter of 2025 to 49.2% compared to 49.1% during the same period in 2024 for these same reasons.

The Paint Stores Group’s gross profit in the third quarter of 2025 was higher than the same period last year by $103.0 million due primarily to higher Net sales as a result of increased selling prices and sales volume growth.

The Paint Stores Group’s gross profit as a percent of Net sales was essentially flat in the third quarter of 2025 compared to the same period in 2024.

The Consumer Brands Group’s gross profit decreased by $4.0 million in the third quarter of 2025 compared to the same period last year due primarily to lower Net sales, supply chain inefficiencies from decreased production volumes and restructuring expenses.

The Consumer Brands Group’s gross profit as a percent of Net sales increased in the third quarter of 2025 compared to the same period in 2024 primarily due to favorable product mix.

The Performance Coatings Group’s gross profit decreased $13.1 million in the third quarter of 2025 compared to the same period last year primarily due to unfavorable region and business sales mix, partially offset by higher Net sales.

The Performance Coatings Group’s gross profit as a percent of Net sales decreased in the third quarter of 2025 compared to the same period last year for these same reasons.

Consolidated Selling, general and administrative expenses (SG&A) increased $59.1 million in the third quarter of 2025 versus the same period last year primarily due to increased investments in long-term growth opportunities in Paint Stores Group, and costs related to the new global headquarters and R&D buildings.

As a percent of Net sales, consolidated SG&A remained flat in the third quarter of 2025 compared to the same period last year.

The Paint Stores Group’s SG&A increased $48.5 million in the third quarter of 2025 compared to the same period last year primarily due to increased investments in long-term growth opportunities such as expenses for new store openings.

As a percent of Net sales, SG&A decreased year-over-year.

The Consumer Brands Group’s SG&A decreased $0.4 million in the third quarter of 2025 compared to the same period last year primarily due to effective cost control in the core business operations.

The Performance Coatings Group’s SG&A increased $7.5 million in the third quarter of 2025 compared to the same period last year primarily due to higher employee-related costs.

The Administrative function’s SG&A increased $3.5 million in the third quarter of 2025 compared to the same period last year due primarily to costs related to the new global headquarters and R&D buildings.

Other general (income) expense - net was income of $4.7 million in the third quarter of 2025 compared to expense of $0.7 million in the same period last year primarily due to insurance recoveries related to previous asset losses at a current manufacturing site.

See Note 15 in Item 1 for further details.

Interest expense increased $1.6 million in the second quarter of 2025 compared to the same period last year.

Interest expense increased $13.8 million in the third 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 expense of $4.7 million in the second quarter of 2025 compared to income of $32.0 million in the same period last year.

The decrease is primarily due to higher foreign currency transaction related losses and lower miscellaneous income in the current period.

Other expense (income) - net decreased $7.2 million in the third quarter of 2025 compared to the same period last year primarily due to miscellaneous expenses which occurred during the third quarter of 2024 which did not recur in the current period, partially offset by a decrease in Other income.

See Note 15 in Item 1 for further details.

Six Months Ended June 30, 2025

Consolidated Cost of goods sold decreased $101.6 million, or 1.7%, in the first six months of 2025 compared to the same period in 2024 primarily due to a low-single digit decrease in sales volume and favorable foreign currency translation, which decreased Cost of goods sold by 0.9%.

Consolidated gross profit increased $83.0 million in the first six months 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.

Consolidated gross profit as a percent of consolidated Net sales increased in the first six months of 2025 to 48.9% compared to 48.1% during the same period in 2024 for these same reasons.

The Paint Stores Group’s gross profit in the first six months of 2025 was higher than the same period last year by $173.3 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 six months of 2025 compared to the same period in 2024 for this same reason.

The Consumer Brands Group’s gross profit decreased by $69.8 million in the first six months of 2025 compared to the same period last year due primarily to lower Net sales and an unfavorable foreign currency related impact.

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

The Performance Coatings Group’s gross profit decreased $43.4 million in the first six months of 2025 compared to the same period last year primarily due to lower Net sales and an unfavorable foreign currency related impact.

The Performance Coatings Group’s gross profit as a percent of Net sales decreased in the first six months of 2025 compared to the same period last year for these same reasons.

Consolidated SG&A increased $159.9 million in the first six months of 2025 versus the same period last year primarily due to higher employee-related costs and costs related to the new global headquarters and R&D buildings.

As a percent of Net sales, consolidated SG&A increased 140 basis points in the first six months of 2025 compared to the same period last year for these same reasons.

The Paint Stores Group’s SG&A increased $110.0 million in the first six months of 2025 compared to the same period last year primarily due to increased costs to support higher sales, including higher employee-related costs and expenses for new store openings, and marketing and advertising.

The Consumer Brands Group’s SG&A decreased $8.4 million in the first six months of 2025 compared to the same period last year primarily due to lower employee-related costs and foreign currency translation rate changes.

The Performance Coatings Group’s SG&A increased $6.3 million in the first six months of 2025 compared to the same period last year due primarily to increased costs to support sales, including higher employee-related costs.

The Administrative function’s SG&A increased $52.0 million in the first six months of 2025 compared to the same period last year due primarily to higher employee-related costs, including severance, and costs related to the new global headquarters and R&D buildings.

Other general expense (income) - net was expense of $15.2 million in the first six months of 2025 compared to income of $31.6 million in the same period last year primarily due to higher gains on the sale or disposition of assets, insurance recoveries for environmental matters in the first six months of 2024 which did not recur in the current period and increased miscellaneous operating expenses in the Administrative function.

Nine Months Ended September 30, 2025

Consolidated Cost of goods sold was effectively flat in the first nine months of 2025 compared to the same period in 2024 primarily due to a low-single digit decrease in sales volume and favorable foreign currency translation, offset by unfavorable business sales mix.

Consolidated gross profit increased $181.0 million in the first nine months 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 the Paint Stores and Consumer Brands Groups and lower selling prices in the Performance Coatings Group, primarily attributable to business sales mix.

Consolidated gross profit as a percent of consolidated Net sales increased in the first nine months of 2025 to 49.0% compared to 48.4% during the same period in 2024 for these same reasons.

The Paint Stores Group’s gross profit in the first nine months of 2025 was higher than the same period last year by $276.3 million due primarily to higher Net sales driven by higher selling prices, partially offset by a decrease in sales volume.

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

The Consumer Brands Group’s gross profit decreased by $73.8 million in the first nine months of 2025 compared to the same period last year due primarily to lower Net sales, supply chain inefficiencies from decreased production volumes and an unfavorable foreign currency related impact.

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

The Performance Coatings Group’s gross profit decreased $56.5 million in the first nine months of 2025 compared to the same period last year primarily due to lower Net sales and unfavorable business sales mix.

The Performance Coatings Group’s gross profit as a percent of Net sales decreased in the first nine months of 2025 compared to the same period last year for these same reasons.

Consolidated SG&A increased $219.0 million in the first nine months of 2025 versus the same period last year primarily due to higher employee-related costs, costs related to the new global headquarters and R&D buildings and increased costs to support higher sales.

As a percent of Net sales, consolidated SG&A increased 90 basis points in the first nine months of 2025 compared to the same period last year for these same reasons.

The Paint Stores Group’s SG&A increased $158.5 million in the first nine months of 2025 compared to the same period last year primarily due to increased investments in long-term growth opportunities such as expenses for new store openings.

The Consumer Brands Group’s SG&A decreased $8.8 million in the first nine months of 2025 compared to the same period last year primarily due to a favorable foreign currency related impact and effective cost control in the core business operations.

The Performance Coatings Group’s SG&A increased $13.8 million in the first nine months of 2025 compared to the same period last year due primarily to higher employee-related costs.

The Administrative function’s SG&A increased $55.5 million in the first nine months of 2025 compared to the same period last year due primarily to higher employee-related costs, including severance, and costs related to the new global headquarters and R&D buildings.

Other general (income) expense - net was expense of $10.5 million in the first nine months of 2025 compared to income of $30.9 million in the same period last year primarily due to insurance recoveries for environmental matters in the first nine months of 2024 which did not recur in the current period and increased miscellaneous operating expenses in the Administrative function.

See Note 15 in Item 1 for further details.

Interest expense increased $2.4 million in the first six months of 2025 compared to the same period last year.

Interest expense increased $16.2 million in the first nine months 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 expense of $7.6 million in the first six months of 2025 compared to income of $39.7 million in the same period last year.

Other expense (income) - net was expense of $9.9 million in the first nine months of 2025 compared to income of $30.2 million in the same period last year.

The decrease is primarily due to higher foreign currency transaction related losses and lower miscellaneous income, net of miscellaneous expenses, in the current period.

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 Reportable Segment:

Three Months Ended June 30, Six Months Ended June 30,

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

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

2025 2024 % Change 2025 2024 % Change

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Income Tax Expense

The effective tax rate was 23.4% for the second quarter of 2025 compared to 24.2% for the second quarter of 2024, and 23.2% for the first six months of 2025 compared to 23.1% for the first six months of 2024.

The decrease in the effective tax rate for the second quarter of 2025 was primarily due to a more favorable impact of tax benefits related to employee share-based payments.

The effective tax rate was essentially flat for the first six months of 2025 when compared to the same period last year.

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

The effective tax rate was 21.4% for the third quarter of 2025 compared to 21.2% for the third quarter of 2024, and 22.5% for the first nine months of 2025 compared to 22.4% for the first nine months of 2024.

The effective tax rate was essentially flat for the third quarter of 2025 and for the first nine months of 2025 when compared to the same periods last year.

The significant components of the Company’s effective tax rate were consistent in both comparable periods.

See Note 16 in Item 1 for further details.

1 unchanged sentence

tax reform legislation known as the One Big Beautiful Bill Act (the Tax Act) was signed into law.

The Tax Act includes a broad range of tax provisions affecting businesses including extending permanently, with modification, certain business and international tax provisions enacted as part of the Tax Cuts and Jobs Act of 2017 and expanding certain Inflation Reduction Act tax incentives while accelerating the phase-out of others.

Most provisions of the Tax Act take effect for tax years starting in 2026;

however, certain provisions have immediate effect impacting the 2025 tax year.

Key provisions of the Tax Act relevant to our operations include immediate expensing of certain capital expenditures and domestic research and development expense beginning in 2025 and changes to various U.S.

Key provisions of the Tax Act relevant to the Company’s operations include immediate expensing of certain domestic capital expenditures and domestic research and development expense beginning in 2025 and changes to various U.S.

international tax provisions going forward.

We do not anticipate the Tax Act will materially change our effective tax rate for 2025, however we are currently evaluating the full impact of the Tax Act on our condensed consolidated financial statements.

We expect to reflect the effects of the Tax Act in our financial statements for the quarter ending September 30, 2025, in accordance with the Income Taxes Topic of the ASC.

The Company does not anticipate the Tax Act will materially change its effective tax rate for 2025, however, the Company is continuing to evaluate the full impact of the Tax Act on the condensed consolidated financial statements as further information becomes available.

The Company has reflected the effects of the Tax Act in the condensed consolidated financial statements for the quarter ending September 30, 2025, in accordance with the Income Taxes Topic of the ASC.

Net Income Per Share

Diluted net income per share decreased 14.3% to $3.00 per share in the second quarter of 2025 compared to $3.50 per share in the second quarter of 2024.

Diluted net income per share in the second quarter of 2025 included charges for acquisition-related amortization expense of $0.20 per share and severance and other restructuring expenses of $0.18 per share.

Diluted net income per share in the second 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 $0.02 in the second quarter of 2025.

Diluted net income per share for the first six months of 2025 decreased 8.6% to $5.00 per share compared to $5.47 per share in the first six months of 2024.

Diluted net income per share for the first six months of 2025 included charges for acquisition-related amortization expense of $0.38 per share and severance and other restructuring expenses of $0.24 per share.

Diluted net income per share in the first six months of 2024 included a charge for acquisition-related amortization expense of $0.39 per share.

Foreign currency translation rate changes decreased diluted net income per share by $0.05 in the first six months of 2025.

Diluted net income per share increased 5.3% to $3.35 per share in the third quarter of 2025 compared to $3.18 per share in the third quarter of 2024.

Diluted net income per share in the third quarter of 2025 included charges for Valspar acquisition-related amortization expense of $0.20 per share and severance and other restructuring expenses of $0.04 per share.

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

Foreign currency translation rate changes had an immaterial impact on diluted net income per share in the third quarter of 2025.

Diluted net income per share for the first nine months of 2025 decreased 3.6% to $8.34 per share compared to $8.65 per share in the first nine months of 2024.

Diluted net income per share for the first nine months of 2025 included charges for Valspar acquisition-related amortization expense of $0.59 per share and severance and other restructuring expenses of $0.27 per share.

Diluted net income per share in the first nine months of 2024 included a charge for Valspar acquisition-related amortization expense of $0.59 per share.

Foreign currency translation rate changes decreased diluted net income per share by $0.05 in the first nine months of 2025.

FINANCIAL CONDITION, LIQUIDITY AND CASH FLOW

The Company’s financial condition and liquidity remained strong at June 30, 2025.

The Company generated $1.052 billion in Net operating cash during the first six months of 2025 and returned cash of $1.269 billion to its shareholders in the form of dividends and share repurchases during the first six months of 2025.

Net income decreased 9.8% to $1.259 billion and EBITDA decreased 6.7% to $2.179 billion for the first six months of 2025.

The Company’s financial condition and liquidity remained strong at September 30, 2025.

The Company generated $2.359 billion in Net operating cash during the first nine months of 2025 and returned cash of $2.132 billion to its shareholders in the form of dividends and share repurchases during the first nine months of 2025.

Net income decreased 5.0% to $2.092 billion and EBITDA decreased 2.6% to $3.523 billion for the first nine months of 2025.

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

At June 30, 2025, the Company had Cash and cash equivalents of $269.8 million and total debt outstanding of $10.686 billion.

At September 30, 2025, the Company had Cash and cash equivalents of $241.5 million and total debt outstanding of $11.516 billion.

Total debt, net of Cash and cash equivalents, was $11.274 billion.

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Net Working Capital

Net working capital, defined as Total current assets less Total current liabilities, decreased $355.1 million to a deficit of $1.771 billion at June 30, 2025 compared to a deficit of $1.416 billion at June 30, 2024.

Net working capital, defined as Total current assets less Total current liabilities, decreased $83.6 million to a deficit of $1.327 billion at September 30, 2025 compared to a deficit of $1.244 billion at September 30, 2024.

The net working capital decrease is due to an increase of $255.4 million in current liabilities partially offset by an increase in current assets of $171.8 million.

Current asset balances increased $374.7 million at June 30, 2025 compared to June 30, 2024 primarily due to an increase in Inventories of $195.5 million, an increase in Cash and cash equivalents of $69.8 million, an increase in Accounts receivable, net of $63.8 million and an increase in Other current assets of $45.6 million.

Current liability balances increased $729.8 million at June 30, 2025 compared to June 30, 2024 primarily due to an increase in Short-term borrowings of $348.4 million, an increase in the Current portion of long-term debt of $301.0 million, an increase in Other accruals of $92.4 million, primarily related to increases in accrued severance, insurance and other benefits payable, cross currency swap contracts and miscellaneous other accruals, partially offset by a decrease in short-term environmental-related liabilities, an increase in Accounts payable of $76.1 million and an increase in the Current portion of operating lease liabilities of $22.9 million.

These increases were offset by a decrease in Accrued taxes of $91.3 million.

The Company’s current ratio was 0.78, 0.79 and 0.81 at June 30, 2025, December 31, 2024 and June 30, 2024, respectively.

Current asset balances increased $171.8 million at September 30, 2025 compared to September 30, 2024 due to an increase in Accounts receivable, net of $148.9 million, an increase in Other current assets of $10.7 million, an increase in Inventories of $8.9 million, and an increase in Cash and cash equivalents of $3.3 million.

Current liability balances increased $255.4 million at September 30, 2025 compared to September 30, 2024 due to an increase in Short-term borrowings of $931.4 million, an increase in Other accruals of $78.0 million, primarily related to increases in accrued severance as well as insurance and other benefits payable, an increase in Accrued taxes of $40.1 million and an increase in the Current portion of operating lease liabilities of $17.0 million.

These increases were offset by a decrease in the Current portion of long-term debt of $698.4 million, a decrease in Accounts payable of $96.1 million and a decrease in Compensation and taxes withheld of $16.6 million.

The Company’s current ratio was 0.82, 0.79 and 0.83 at September 30, 2025, December 31, 2024 and September 30, 2024, respectively.

Property, Plant and Equipment

Net property, plant and equipment increased $272.7 million in the first six months of 2025 and $669.3 million in the twelve months since June 30, 2024.

The increase in the first six months was primarily due to capital expenditures of $363.0 million, currency translation and other adjustments of $65.1 million and assets acquired through business combinations of $12.2 million, partially offset by depreciation expense of $159.2 million, and the sale or disposition of fixed assets of $8.4 million.

Since June 30, 2024, the increase was primarily due to capital expenditures of $892.8 million, currency translation and other adjustments of $53.4 million and assets acquired through business combinations of $45.1 million, partially offset by depreciation expense of $313.7 million, and the sale or disposition of fixed assets of $8.3 million.

Buildings within Property, plant and equipment, net increased by $536.8 million and $628.1 million in the first six months of 2025 and in the twelve months since June 30, 2024, respectively, primarily due to the new research and development center (R&D Center) meeting the criteria to be placed into service during the second quarter of 2025.

An immaterial amount of capital expenditures related to finalizing the construction of the R&D Center will be placed into service during the remainder of 2025 in the Administrative function.

The R&D Center asset will be depreciated over its useful life of 60 years.

Other than the R&D Center, capital expenditures primarily represented expenditures related to construction activities associated with the new global headquarters in the Administrative function.

The global headquarters is expected to be complete in 2025.

Net property, plant and equipment increased $380.0 million in the first nine months of 2025 and $568.5 million in the twelve months since September 30, 2024.

The increase in the first nine months was due to capital expenditures of $550.7 million, currency translation and other adjustments of $68.9 million and assets acquired through business combinations of $12.3 million, partially offset by depreciation expense of $242.0 million and the sale or disposition of fixed assets of $9.9 million.

Since September 30, 2024, the increase was due to capital expenditures of $833.6 million, assets acquired through business combinations of $45.2 million and currency translation and other adjustments of $20.3 million, partially offset by depreciation expense of $322.1 million and the sale or disposition of fixed assets of $8.5 million.

Buildings within Property, plant and equipment, net increased by $1.366 billion and $1.358 billion in the first nine months of 2025 and in the twelve months since September 30, 2024, respectively, primarily due to the new global headquarters and the research and development center (R&D Center) meeting the criteria to be placed into service during the third and second quarter of 2025, respectively.

An immaterial amount of capital expenditures related to finalizing the construction of the new global headquarters and R&D Center will be placed into service during the remainder of 2025 and into 2026 in the Administrative function.

The new global headquarters and associated parking garage assets will be depreciated over their useful lives of 60 and 45 years, respectively.

Additionally, the R&D Center asset will be depreciated over its useful life of 60 years.

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 stores and renovation and improvements in existing stores in the Paint Stores Group.

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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.

Lease payments over the next twelve months are expected to be approximately $51 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.

The amount of the lease payments during the initial 30 year lease term is estimated to be approximately $1.938 billion.

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.

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Goodwill and Intangible Assets

Goodwill increased $227.5 million from December 31, 2024 and increased $200.7 million from June 30, 2024.

The increase during the first six months of 2025 was primarily due to foreign currency translation fluctuations and other adjustments of $156.7 million and purchase accounting allocations of $70.8 million.

The increase over the twelve month period from June 30, 2024 was primarily due to foreign currency translation fluctuations and other adjustments of $108.9 million and purchase accounting allocations of $91.8 million.

Intangible assets increased $10.2 million from December 31, 2024 and decreased $149.4 million from June 30, 2024.

The increase during the first six months of 2025 was primarily due to currency translation fluctuations and other adjustments of $122.0 million, purchase accounting allocations of $35.0 million and capitalized software of $17.6 million, partially offset by amortization of $164.4 million.

The decrease over the twelve month period from June 30, 2024 was primarily due to amortization of $327.5 million, partially offset by currency translation fluctuations and other adjustments of $85.1 million, purchase accounting allocations of $63.0 million, and capitalized software of $30.0 million.

Goodwill increased $214.0 million from December 31, 2024 and increased $137.1 million from September 30, 2024.

The increase during the first nine months of 2025 was due to foreign currency translation fluctuations and other adjustments of $154.7 million and purchase accounting allocations of $59.3 million.

The increase over the twelve month period from September 30, 2024 was due to purchase accounting allocations of $80.4 million and foreign currency translation fluctuations and other adjustments of $56.7 million.

Intangible assets decreased $67.0 million from December 31, 2024 and decreased $190.7 million from September 30, 2024.

The decrease during the first nine months of 2025 was due to amortization of $248.5 million, partially offset by currency translation fluctuations and other adjustments of $119.9 million, purchase accounting allocations of $34.5 million and capitalized software of $27.1 million.

The decrease over the twelve month period from September 30, 2024 was due to amortization of $330.4 million, partially offset by purchase accounting allocations of $62.4 million, currency translation fluctuations and other adjustments of $44.5 million and capitalized software of $32.8 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 $138.6 million from December 31, 2024 and $413.8 million from June 30, 2024.

The increase in the first six months 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 June 30, 2024 was primarily due to an increase in finance lease right-of-use (ROU) assets, Non-Traded Investments and assets related to cloud computing arrangements.

Other assets increased $1.266 billion from December 31, 2024 and $1.452 billion from September 30, 2024.

The increase in the first nine months of 2025 was primarily due to an increase of $1.150 billion, primarily related to the deposit held for the Suvinil acquisition, and an increase in Non-Traded investments.

The increase from September 30, 2024 was primarily due to an increase of $1.150 billion, primarily related to the deposit held for the Suvinil acquisition, an increase in finance lease right-of-use assets and an increase in Non-Traded investments.

See Notes 1 and 3 in Item 1 and Notes 1, 3 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)

June 30, December 31, June 30,

September 30, December 31, September 30,

2025 2024 2024

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The Company’s long-term debt primarily consists of senior notes as disclosed in Note 7 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

In July 2025, the Company issued $500.0 million of 4.30% senior notes due 2028, $500.0 million of 4.50% senior notes due 2030 and $500.0 million of 5.15% senior notes due 2035 in a public offering.

The net proceeds from the issuance of these senior notes were used to repay the outstanding principal of $400.0 million related to the Company’s 3.45% senior notes due August 1, 2025, the outstanding principal of $400.0 million related to the Company’s 4.25% senior notes due August 8, 2025 and a portion of the outstanding borrowings under the Company’s domestic commercial paper program.

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

The Company is in compliance with these and all other covenants related to the senior notes as of September 30, 2025.

In August 2025, the Company amended its existing revolving credit agreement dated July 31, 2024 to extend the maturity of $2.5 billion of the commitments under the agreement from July 31, 2029 to August 8, 2030, remove a credit spread adjustment and modify the pricing grid.

Also in August 2025, the Company entered into a new 364-day senior unsecured delayed draw term loan credit agreement which provided $750.0 million and €250.0 million tranches available as a single draw for general corporate purposes, including to finance working capital requirements.

The Company exercised the draw in September 2025 to fund the acquisition of Suvinil.

See Note 3 in Item 1 for additional information on the acquisition of Suvinil.

See Note 6 in Item 1 for additional information concerning debt.

In April 2025, in anticipation of a probable issuance of new long-term fixed rate debt within the next twelve months, the Company entered into interest rate lock contracts with an aggregate notional amount of $300 million.

See Notes 12 and 13 in Item 1 for additional information.

Defined Benefit Pension and Other Postretirement Benefit Plans

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

The changes from June 30, 2024 are primarily due to changes in actuarial assumptions.

The changes from September 30, 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 $46.6 million from December 31, 2024 and $81.1 million from June 30, 2024 primarily due to amortization of acquisition-related intangible assets.

Deferred income taxes increased $49.7 million from December 31, 2024 and $25.5 million from September 30, 2024.

This increase is primarily due to provisions of the Tax Act signed into law in July 2025 which allows for the immediate expensing of certain domestic capital expenditures and domestic research and development expenditures.

This increase was partially offset by 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 six months of 2025.

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 six 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.

There have been no significant changes to the Company’s contractual obligations and commercial commitments in the first nine 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 other than the amount of the lease payments during the 30 year lease term of the new global headquarters as disclosed in the Real Estate Financing section above.

See Note 9 in Item 1 for information concerning litigation.

Shareholders’ Equity

June 30, December 31, June 30,

September 30, December 31, September 30,

2025 2024 2024

Total shareholders’ equity $ 4,425.3 $ 4,051.2 $ 4,156.1

Shareholders’ equity increased $349.7 million during the first six months of 2025 primarily as a result of Net income of $1.259 billion, an increase in AOCI of $277.3 million mainly due to currency translation adjustments and an increase in Other capital of $104.0 million mainly associated with stock-based compensation expense and stock option exercises.

These increases were partially offset by $892.1 million of treasury stock activity mainly attributable to treasury stock repurchases and cash dividends paid on common stock.

Shareholders’ equity increased $649.1 million since June 30, 2024 primarily as a result of Net income of $2.545 billion, an increase in Other capital of $338.2 million mainly associated with stock-based compensation expense and stock option exercises and an increase in AOCI of $179.0 million mainly due to currency translation adjustments.

These increases were

partially offset by $1.653 billion of treasury stock activity mainly attributable to treasury stock repurchases and cash dividends paid on common stock.

During the first six months of 2025, the Company purchased 2.5 million shares of its common stock for treasury purposes through open market purchases.

Shareholders’ equity increased $374.1 million during the first nine months of 2025 primarily as a result of Net income of $2.092 billion, an increase in AOCI of $285.1 million mainly due to currency translation adjustments and an increase in Other capital of $151.5 million mainly associated with stock-based compensation expense and stock option exercises.

These increases were partially offset by $1.561 billion of treasury stock activity mainly attributable to treasury stock repurchases and cash dividends paid on common stock.

Shareholders’ equity increased $269.2 million since September 30, 2024 primarily as a result of Net income of $2.572 billion, an increase in Other capital of $256.3 million mainly associated with stock-based compensation expense and stock option exercises, and an increase in AOCI of $86.1 million mainly due to currency translation adjustments.

These increases were partially offset by $1.872 billion of treasury stock activity mainly attributable to treasury stock repurchases and cash dividends paid on common stock.

During the first nine months of 2025, the Company purchased 4.5 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 June 30, 2025 to purchase 32.0 million shares of its common stock.

The Company had remaining authorization at September 30, 2025 to purchase 30.0 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, 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.

This quarterly dividend was approved in all subsequent quarters and will 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 six months ended June 30, 2025 was a source of $1.052 billion compared to a source of $1.144 billion for the same period in 2024.

The decrease in Net operating cash was primarily due to lower net income recognized and higher cash requirements for working capital, partially offset by a decrease in cash used for long-term contract assets with customers.

Net investing cash usage decreased $24.8 million in the first six months of 2025 to a usage of $557.3 million compared to a usage of $582.1 million for the same period in 2024 primarily due to a decrease in cash used for capital expenditures, partially offset by cash used for the acquisition of businesses.

Net financing cash usage decreased $185.0 million in the first six months of 2025 to a usage of $442.8 million compared to a usage of $627.8 million for the same period in 2024 primarily due to an increase in short-term borrowings, a decrease in payments of long-term debt and a decrease in treasury stock purchases, partially offset by a decrease in proceeds from real estate financing transactions, a decrease in proceeds from stock option exercises and an increase in cash dividends.

In the twelve month period from July 1, 2024 through June 30, 2025, the Company generated Net operating cash of $3.061 billion, used $1.172 billion in investing activities and used $1.832 billion in financing activities.

Net operating cash for the nine months ended September 30, 2025 was a source of $2.359 billion compared to a source of $2.219 billion for the same period in 2024.

The improvement in Net operating cash was primarily due to a decrease in cash used for deferred income taxes, a decrease in Inventories and an increase in Accrued taxes, partially offset by a decrease in Accounts payable, an increase in Accounts receivable and a decrease in Net income.

Net investing cash usage increased $983.9 million in the first nine months of 2025 to a usage of $1.895 billion compared to a usage of $910.8 million for the same period in 2024 primarily due to cash deposited for the future acquisition of a business and cash used for the acquisition of businesses, partially offset by a decrease in cash used for capital expenditures.

Net financing cash usage decreased $910.0 million in the first nine months of 2025 to a usage of $436.3 million compared to a usage of $1.346 billion for the same period in 2024 primarily due to an increase in short-term borrowings and proceeds from long-term debt, partially offset by a decrease in proceeds from real estate financing transactions, an increase in treasury stock purchases, a decrease in proceeds from stock option exercises and an increase in payments of cash dividends.

In the twelve month period from October 1, 2024 through September 30, 2025, the Company generated Net operating cash of $3.294 billion, used $2.180 billion in investing activities and used $1.107 billion in financing activities.

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

1 unchanged sentence

In 2025 and 2024, the Company entered into foreign currency forward contracts with maturity dates of less than twelve months primarily to hedge against value changes in foreign currency.

The Company also has cross currency swap contracts to hedge its net investment in European operations and interest rate lock contracts in anticipation of a probable issuance of new long-term fixed rate debt within the next twelve months.

The Company also has cross currency swap contracts to hedge its net investment in European operations.

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

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

At June 30, 2025, the Company was in compliance with the covenant and expects to remain in compliance.

At September 30, 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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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

49 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis