SHERWIN WILLIAMS CO

Previous wording

◦Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 0.8% and 1.0% in the quarter and year to date period, respectively

Current wording

◦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

Previous wording

•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

Current wording

•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

Previous wording

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. 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.

Current wording

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.

Previous wording

We employ a disciplined capital deployment strategy, while maintaining a balanced approach toward driving value for our customers and returns to our shareholders. 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 are, and expect to remain, in compliance with bank covenants.

Current wording

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

Previous wording

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

Current wording

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, 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.

Previous wording

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.

Current wording

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.

Previous wording

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. 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.

Current wording

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 $5.223 billion in the third quarter of 2025 compared to $5.038 billion in the same period last year.

Previous wording

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. 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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. 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.

Current wording

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 1.5% to $14.643 billion in the first nine months of 2025 compared to $14.431 billion in the same period last year.

Previous wording

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 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 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. 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.

Current wording

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 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 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.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

Interest expense increased $1.6 million in the second 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.

Current wording

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.

Previous wording

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. See Note 15 in Item 1 for further details.

Current wording

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.

Previous wording

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%.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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. See Note 15 in Item 1 for further details.

Current wording

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.

Previous wording

Interest expense increased $2.4 million in the first six 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.

Current wording

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.

Previous wording

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. 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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

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. See Note 16 in Item 1 for further details.

Current wording

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.

Previous wording

On July 4, 2025, U.S. 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. 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.

Current wording

On July 4, 2025, U.S. tax reform legislation known as the One Big Beautiful Bill Act (the Tax Act) was signed into law. 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. 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

At June 30, 2025, the Company had Cash and cash equivalents of $269.8 million and total debt outstanding of $10.686 billion. Total debt, net of Cash and cash equivalents, was $10.417 billion. The Company continues to maintain sufficient short-term borrowing capacity at reasonable rates, and has sufficient cash on hand and total available borrowing capacity to fund its current operating requirements.

Current wording

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. The Company continues to maintain sufficient short-term borrowing capacity at reasonable rates, and has sufficient cash on hand and total available borrowing capacity to fund its current operating requirements.

Previous wording

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. The net working capital decrease is due to an increase of $729.8 million in current liabilities partially offset by an increase in current assets of $374.7 million.

Current wording

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.

Previous wording

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 wording

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.

Previous wording

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 wording

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.

Previous wording

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.

Current wording

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.