SHERWIN WILLIAMS CO

Previous wording

The Company is structured into three reportable segments - Paint Stores Group, Consumer Brands Group and Performance Coatings Group (collectively, the Reportable Segments) - and an Administrative function, which is representative of the way it is internally organized for assessing performance and making decisions regarding the allocation of resources. See Note 18 in Item 1 for further details on the Company’s Reportable Segments.

Current wording

The Company is structured into three reportable segments - Paint Stores Group, Consumer Brands Group and Performance Coatings Group (collectively, the Reportable Segments) - and an Administrative function, which is representative of the way it is internally organized for assessing performance and making decisions regarding the allocation of resources. See Note 18 in Item 1 for further information on the Company’s Reportable Segments.

Previous 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

Current wording

◦Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 2.4% in the quarter

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 $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.

Current wording

We employ a disciplined capital deployment strategy, while maintaining a balanced approach toward driving value for our customers and returns for 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 $216.9 million in cash and $2.443 billion of unused capacity under our credit facilities at March 31, 2026. We are, and expect to remain, in compliance with all financing 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 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.

Current wording

The Company has historically experienced, and expects to continue to experience, variability in quarterly results. The results of operations for the three months ended March 31, 2026 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 nine months ended September 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 months ended March 31, 2026 and 2025.

Previous 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.

Current wording

Consolidated Net sales increased by 6.8% in the first quarter of 2026 primarily due to higher Net sales in all reportable segments, inclusive of the October 2025 acquisition of Suvinil and a 1.7% impact from favorable foreign currency translation. Net sales of all consolidated foreign subsidiaries increased to $1.279 billion in the first quarter of 2026 compared to $1.045 billion in the same period last year. The increase in Net sales for all consolidated foreign subsidiaries was due to higher Net sales in all regions, led by Latin America, which is inclusive of the Suvinil acquisition. Net sales of all operations other than consolidated foreign subsidiaries increased to $4.388 billion in the first quarter of 2026 compared to $4.261 billion in the same period last year.

Previous 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.

Current wording

Net sales in the Paint Stores Group increased by 3.7% in the first quarter of 2026 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 but one professional customer end market, led by a double-digit percentage increase in protective and marine and a mid-single digit percentage increase in residential repaint and commercial. New residential decreased by a low-single digit percentage. Net sales from stores open for more than twelve calendar months increased by 2.4% in the first quarter of 2026 compared to last year’s comparable period. Net sales of non-paint products increased 2.5% in the first quarter of 2026 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 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.

Current wording

Net sales in the Consumer Brands Group increased by 19.2% in the first quarter of 2026 primarily as a result of the acquisition of Suvinil, a 2.4% impact from favorable foreign currency translation and increased Net sales in Europe. These increases were partially offset by soft DIY demand in North America which decreased Net sales by a low-single digit percentage.

Previous 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.

Current wording

Consolidated Gross profit increased $221.4 million in the first quarter of 2026 compared to the same period in 2025 primarily due to higher Net sales in all reportable segments, the acquisition of Suvinil within the Consumer Brands Group, moderating raw material costs and favorable foreign currency translation. Consolidated Gross profit as a percent of consolidated Net sales increased in the first quarter of 2026 to 49.1% compared to 48.2% during the same period in 2025 for these same reasons.

Previous 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.

Current wording

The Paint Stores Group’s Gross profit in the first quarter of 2026 was higher than the same period last year by $85.8 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 increased in the first quarter of 2026 compared to the same period last year for these same reasons. The Consumer Brands Group’s Gross profit increased by $99.8 million in the first quarter of 2026 compared to the same period last year due primarily to the acquisition of Suvinil and global supply chain efficiencies. The Consumer Brands Group’s Gross profit as a percent of Net sales increased in the first quarter of 2026 compared to the same period last year for these same reasons. The Performance Coatings Group’s Gross profit increased $40.2 million in the first quarter of 2026 compared to the same period last year primarily due to favorable foreign currency translation and higher Net sales as a result of sales volume growth. The Performance Coatings Group’s Gross profit as a percent of Net sales increased modestly in the first quarter of 2026 compared to the same period last year for these same reasons.

Previous 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.

Current wording

Consolidated SG&A increased $175.8 million in the first quarter of 2026 versus the same period last year primarily due to an increase in employee-related costs and marketing and advertising to support higher Net sales, incremental SG&A expenses associated with the Suvinil acquisition, higher costs in the Administrative function related to the new global headquarters and technology center and unfavorable foreign currency translation. As a percent of Net sales, consolidated SG&A increased in the first quarter of 2026 compared to the same period last year due to these same factors.

Previous 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.

Current wording

The Paint Stores Group’s SG&A increased $64.0 million in the first quarter of 2026 compared to the same period last year primarily due to increased costs to support higher sales, including higher employee-related costs and marketing and advertising. The Consumer Brands Group’s SG&A increased $41.6 million in the first quarter of 2026 compared to the same period last year primarily due to incremental SG&A expenses associated with the Suvinil acquisition as well as higher employee-related and marketing costs to support higher sales. The Performance Coatings Group’s SG&A increased $32.5 million in the first quarter of 2026 compared to the same period last year primarily due to higher employee-related costs. The Administrative function’s SG&A increased $37.7 million in the first quarter of 2026 compared to the same period last year due primarily to costs related to the new global headquarters and technology center.

Previous 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.

Current wording

Interest expense increased $27.8 million in the first quarter of 2026 compared to the same period last year due to an increase in long-term debt and short-term borrowings as well as interest expense related to the new global headquarters and technology center. See Note 6 in Item 1 for further information on the Company’s outstanding debt.

Previous wording

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

Current wording

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

Previous 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.

Current wording

Diluted net income per share increased 7.5% to $2.15 per share in the first quarter of 2026 compared to $2.00 per share in the first quarter of 2025. Diluted net income per share in the first quarter of 2026 included Valspar acquisition-related amortization expense of $0.20 per share. Diluted net income per share in the first quarter of 2025 included charges for Valspar acquisition-related amortization expense of $0.19 per share and severance and other restructuring expenses of $0.06 per share. Foreign currency translation rate changes increased diluted net income per share by $0.03 in the first quarter of 2026.

Previous 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.

Current wording

The Company’s financial condition and liquidity remained strong at March 31, 2026. The Company generated $139.1 million in Net operating cash during the first quarter of 2026 and returned cash of $772.7 million to its shareholders in the form of dividends and share repurchases during the first quarter of 2026. Net income increased 6.1% to $534.7 million and EBITDA increased 8.8% to $998.2 million for the first three months of 2026. Refer to the Non-GAAP Financial Measures section below for the definition and calculation of EBITDA.

Previous 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.

Current wording

At March 31, 2026, the Company had Cash and cash equivalents of $216.9 million and total debt outstanding of $11.700 billion. Total debt, net of Cash and cash equivalents, was $11.483 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 $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 wording

Net working capital, defined as Total current assets less Total current liabilities, increased $802.1 million to a deficit of $1.035 billion at March 31, 2026 compared to a deficit of $1.837 billion at March 31, 2025. The net working capital increase is due to an increase in current assets of $460.0 million and a decrease of $342.1 million in current liabilities.

Previous 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.

Current wording

Current asset balances increased $460.0 million at March 31, 2026 compared to March 31, 2025 due to an increase in Accounts receivable, net of $379.0 million, an increase in Other current assets of $105.9 million, primarily related to prepaid expenses and recoverable income taxes, and an increase in Cash and cash equivalents of $17.1 million. These increases were offset by a decrease in Inventories of $42.0 million.

Previous 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.

Current wording

Current liability balances decreased $342.1 million at March 31, 2026 compared to March 31, 2025 due to a decrease in the Current portion of long-term debt of $1.151 billion. This decrease was offset by an increase in Short-term borrowings of $578.1 million, an increase in Accounts payable of $90.5 million, an increase in Other accruals of $54.3 million primarily related to customer considerations, an increase in Accrued taxes of $45.8 million, an increase in Compensation and taxes withheld of $25.3 million and an increase in the Current portion of operating lease liabilities of $14.6 million. The Company’s current ratio was 0.86, 0.87 and 0.77 at March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

Previous 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.

Current wording

Net property, plant and equipment increased $68.5 million in the first three months of 2026 and $542.5 million in the twelve months since March 31, 2025. The increase in the first three months was due to capital expenditures of $118.7 million, Suvinil purchase price allocation adjustments of $48.1 million and foreign currency translation and other adjustments of $1.5 million, offset by depreciation expense of $98.3 million and the sale or disposition of fixed assets of $1.5 million. Since March 31, 2025, the increase was due to capital expenditures of $683.7 million, assets acquired through business combinations of $193.7 million, foreign currency translation and other adjustments of $21.3 million and the sale or disposition of fixed assets of $2.5 million, offset by depreciation expense of $358.7 million.

Previous wording

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.

Current wording

Buildings within Property, plant and equipment, net increased $52.5 million in the first three months of 2026 and $1.523 billion in the twelve months since March 31, 2025. The increase in the first three months was primarily due to capital expenditures related to finalizing the construction of the new global headquarters and technology center. Since March 31, 2025, the increase was primarily due to the new global headquarters and technology center meeting the criteria to be placed into service during 2025.

Previous wording

In 2025, the Company expects to spend slightly less than 2024 for capital expenditures, which it will fund primarily through the generation of operating cash. Core capital expenditures, which exclude expenditures associated with the new global headquarters and R&D Center, are expected to be for investments in capacity, productivity improvements and maintenance projects at existing manufacturing, distribution and R&D facilities and new store openings. Refer to “Real Estate Financing” below for further information on the financing transaction for the new global headquarters.

Current wording

In 2026, the Company expects to spend less than 2025 for capital expenditures, which it will fund primarily through the generation of operating cash. Core capital expenditures are targeted to be approximately 2% of Net sales in 2026 and are expected to be for investments in various productivity improvements and maintenance projects at existing manufacturing, distribution and technology facilities and new store openings.

Previous wording

In December 2022, the Company closed a transaction to sell and subsequently lease back its partially-constructed new global headquarters. As part of the terms of the transaction, the Company is contractually obligated for completing the construction of the building and related improvements at the new global headquarters. This transaction did not meet the criteria for recognition as an asset sale under U.S. generally accepted accounting principles (US GAAP) and as such, was accounted for as a real estate financing transaction. The Company received the final proceeds for the new global headquarters in the first quarter of 2025 for a total of $800 million. The initial lease term includes the construction period and extends for 30 years thereafter, and the Company has the right and option to extend the lease term. 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 is estimated to be approximately $1.938 billion.

Current wording

In December 2022, the Company closed a transaction to sell and subsequently lease back its new global headquarters. This transaction did not meet the criteria for recognition as an asset sale under U.S. generally accepted accounting principles (US GAAP) and as such, was accounted for as a real estate financing transaction. The Company received the final proceeds for the new global headquarters in 2025 for a total of $800 million. The initial lease term includes the construction period and extends for 30 years thereafter, and the Company has the right and option to extend the lease term.

Previous wording

The net proceeds from this transaction and other real estate financing transactions are recognized as Proceeds from real estate financing transactions within the Financing Activities section of the Statements of Condensed Consolidated Cash Flows. The Company will continue to recognize the related assets within Property, plant and equipment, net on the Consolidated Balance Sheets under US GAAP. These assets will be subject to depreciation over their useful lives in accordance with the Company’s accounting policies. The Company will also allocate payments between interest and repayment of the financing liability over the life of the agreement. See Note 8 in Item 1 and Note 10 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for more information concerning real estate financing.

Current wording

The net proceeds from this transaction and other real estate financing transactions are recognized as Proceeds from real estate financing transactions within the Financing Activities section of the Statements of Condensed Consolidated Cash Flows. The Company will continue to recognize the related assets, including any capitalized interest, within Property, plant and equipment, net on the Consolidated Balance Sheets. These assets are subject to depreciation over their useful lives in accordance with the Company’s accounting policies. The Company also allocates payments between interest and repayment of the financing liability over the life of the agreement. See Note 8 in Item 1 and Note 10 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for further information concerning real estate financing.

Previous wording

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.

Current wording

Goodwill decreased $33.2 million from December 31, 2025 and increased $295.0 million from March 31, 2025. The decrease during the first three months of 2026 was due to Suvinil purchase price allocation adjustments of $29.7 million and foreign currency translation fluctuations and other adjustments of $3.5 million. The increase over the twelve month period from March 31, 2025 was due to purchase price allocation adjustments of $202.3 million, primarily related to the Suvinil acquisition, and foreign currency translation fluctuations and other adjustments of $92.7 million.

Previous wording

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.

Current wording

Intangible assets decreased $80.5 million from December 31, 2025 and increased $392.2 million from March 31, 2025. The decrease during the first three months of 2026 was due to amortization of $88.5 million and Suvinil purchase price allocation adjustments of $17.1 million, offset by foreign currency translation fluctuations and other adjustments of $23.6 million and capitalized software of $1.5 million. The increase over the twelve month period from March 31, 2025 was due to purchase price allocations of $626.0 million, primarily related to the Suvinil acquisition, foreign currency translation fluctuations and other adjustments of $90.1 million and capitalized software of $38.0 million, offset by amortization of $344.1 million and trademark impairment of $17.8 million.

Previous wording

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.

Current wording

See Note 5 in Item 1 and Note 6 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for further information concerning the Company’s Goodwill and Intangible assets.

Previous wording

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.

Current wording

Other assets increased $17.7 million from December 31, 2025 and $18.4 million from March 31, 2025. The increase in the first three months of 2026 was primarily due to an increase in non-traded investments partially offset by a decrease in customer considerations. The increase from March 31, 2025 was primarily due to an increase in assets related to cloud computing arrangements, deferred income tax assets and pension plan assets, partially offset by a decrease in customer considerations and non-traded investments. See Notes 1 and 14 in Item 1 and Notes 1, 8, 18 and 20 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 in for further information.

Previous wording

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

Current wording

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

Previous wording

Long-term liabilities for defined benefit pension and other postretirement benefit plans did not change significantly from December 31, 2024. The changes from September 30, 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.

Current wording

Long-term liabilities for defined benefit pension and other postretirement benefit plans did not change significantly from December 31, 2025. The changes from March 31, 2025 are primarily due to changes in actuarial assumptions and the acquisition of Suvinil. See Note 8 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for further information concerning the Company’s liabilities for defined benefit pension and other postretirement benefit plans.

Previous wording

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.

Current wording

Deferred income taxes were effectively flat from December 31, 2025 and increased $179.4 million from March 31, 2025. The changes from March 31, 2025 are primarily due to accelerated domestic research and development deductions recognized as a result of U.S. tax reform legislation known as the One Big Beautiful Bill Act. This increase was partially offset by amortization of acquisition-related intangible assets.

Previous wording

Depreciation of capital expenditures and other expenses related to ongoing environmental compliance measures were included in the normal operating expenses of conducting business. The Company’s capital expenditures, depreciation and other expenses related to ongoing environmental compliance measures were not material to the Company’s financial condition, liquidity, cash flow or results of operations during the first nine months of 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. See Notes 8 and 15 in Item 1 for further information on environmental-related long-term liabilities.

Current wording

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 three months of 2026. Management also 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 for the remainder of 2026. See Notes 8 and 15 in Item 1 for further information on environmental-related long-term liabilities.

Previous wording

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.

Current wording

There have been no significant changes to the Company’s contractual obligations and commercial commitments in the first three months of 2026 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, 2025.

Previous wording

See Note 9 in Item 1 for information concerning litigation.

Current wording

See Note 9 in Item 1 for further information concerning litigation.

Previous wording

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.

Current wording

Shareholders’ equity decreased $167.2 million during the first three months of 2026 primarily as a result of $623.5 million of treasury stock activity mainly attributable to treasury stock repurchases and the payment of $197.1 million in cash dividends, partially offset by Net income of $534.7 million, an increase in Other capital of $71.0 million mainly associated with stock-based compensation expense and stock option exercises and an increase in Other comprehensive income, net of tax of $47.6 million mainly due to foreign currency translation adjustments.

Previous wording

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.

Current wording

Shareholders’ equity increased $301.0 million since March 31, 2025 primarily as a result of Net income of $2.599 billion, an increase in Other comprehensive income, net of tax of $186.1 million mainly due to foreign currency translation adjustments and an increase in Other capital of $182.4 million mainly associated with stock-based compensation expense and stock option exercises. The increase in Shareholders’ equity was partially offset by treasury stock activity mainly attributable to treasury stock repurchases of $1.880 billion and the payment of $786.5 million in cash dividends. Additionally, during the fourth quarter of 2025, the Company retired 29.5 million common stock shares held in treasury stock, which resulted in decreases of Common stock, Other capital, Retained earnings and Treasury stock. See Note 10 in Item 1 for further information concerning Shareholders’ Equity. See the Statements of Consolidated Shareholders’ Equity in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for further information concerning the treasury stock retirement.

Previous wording

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 September 30, 2025 to purchase 30.0 million shares of its common stock.

Current wording

During the first three months of 2026, the Company purchased 1.6 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 shares in the future. The Company had remaining authorization from its Board of Directors at March 31, 2026 to purchase 28.0 million shares of its common stock.

Previous wording

In February 2025, the Company’s Board of Directors increased the quarterly cash dividend from $0.715 per share to $0.79 per share. This quarterly dividend was approved in all subsequent quarters and will result in an annual dividend for 2025 of $3.16 per share, or a 30% payout of 2024 diluted net income per share.

Current wording

In February 2026, the Company’s Board of Directors increased the quarterly cash dividend from $0.79 per share to $0.80 per share. This quarterly dividend, if approved in each of the remaining quarters of 2026, would result in an annual dividend for 2026 of $3.20 per share, or a 31% payout of 2025 diluted net income per share.

Previous wording

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.

Current wording

Net operating cash for the three months ended March 31, 2026 was a source of $139.1 million compared to a usage of $61.1 million for the same period in 2025. The improvement in Net operating cash was primarily due to lower cash requirements for working capital and deferred taxes, higher Net income and an increase in depreciation and amortization.