Sherwin-Williams SHW · USD

REPORTABLE SEGMENT INFORMATIONThe Company reports its segment information in the same way that management internally organizes its business for assessing performance and making decisions regarding the allocation of resources in accordance with the Segment Reporting Topic of the ASC. The Company determined it has three reportable segments: Paint Stores Group, Consumer Brands Group and Performance Coatings Group (individually, a Reportable Segment and collectively, the Reportable Segments). Effective January 1, 2025, management realigned a nonsignificant high-performance flooring business to the Paint Stores Group from the Performance Coatings Group. Comparative segment information as of December 31, 2024 and 2023 has not been recast for this change. Factors considered in determining the three Reportable Segments of the Company include the nature of business activities, the management directly accountable to the Company’s Chief Operating Decision Maker (CODM) for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors. The Company reports all other business activities within the Administrative function. The Company’s CODM has been identified as the Chair, President and Chief Executive Officer because she has final authority over performance assessment and resource allocation decisions. Because of the diverse operations of the Company, the CODM regularly receives and uses discrete financial information about each Reportable Segment as well as select supplemental financial information about certain divisions, business units or subsidiaries of the Company. The CODM uses all such financial information for performance assessments and resource allocation decisions by comparing actual results versus forecasted and historical financial information and discussing observations with the broader leadership team responsible for managing the operations of each Reportable Segment on a monthly basis. This includes probing inquiries and consideration of relevant internal and external factors to drive meaningful insights and specific actions. The CODM evaluates the performance of and allocates resources to the Reportable Segments based on Segment profit or loss, which represents the segments’ Income before income taxes. The accounting policies of the Reportable Segments are the same as those described in Note 1.

In the reportable segment financial information that follows, Segment profit represents each segment’s Income before income taxes. Domestic intersegment transfers are primarily accounted for at the approximate fully absorbed manufactured cost, based on normal capacity volumes, plus customary distribution costs for paint products. Non-paint domestic and all international intersegment transfers are primarily accounted for at values comparable to normal unaffiliated customer sales. All intersegment transfers are eliminated within the Administrative function. In 2023, the absorbed manufactured cost standards utilized for domestic intersegment transfers were established inclusive of forecasted cost reductions from planned initiatives. Deviations from the forecasted cost reductions were recognized within the Consumer Brands Group. Due to the nature of the Company’s integrated manufacturing operations and centralized administrative and information technology support, a substantial amount of allocations are made to determine segment financial information. Expenses that are specifically identifiable to a certain Reportable Segment are allocated accordingly. For expenses that are not specifically identifiable to a certain Reportable Segment, an appropriate allocation base is identified, and expenses are allocated based on each segment’s respective share of the allocation base. The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM and include intersegment expenses within the amounts shown. Identifiable assets were those directly identified with each Reportable Segment. 2025Paint StoresGroupConsumer BrandsGroupPerformance CoatingsGroupAdministrativeConsolidatedTotalsNet sales$13,605.9$3,166.4$6,795.2$6.8$23,574.3Intersegment transfers—5,388.226.6(5,414.8)—Total net sales and intersegment transfers$13,605.9$8,554.6$6,821.8$(5,408.0)$23,574.3Cost of goods sold$5,954.5$7,128.0$4,412.3$(5,436.0)$12,058.8Selling, general and administrative expenses4,589.3895.91,446.1763.77,695.0Interest expense———465.0465.0Other segment items (1)0.621.120.7(25.1)17.3Income before income taxes$3,061.5$509.6$942.7$(1,175.6)$3,338.2Percent to Net sales22.5 %16.1 %13.9 %nm14.2 %Supplemental Information:Identifiable assets$6,378.6$8,025.5$7,859.5$3,638.1$25,901.7Capital expenditures120.2293.136.2348.1797.6Depreciation (2)90.2185.319.045.8340.3Amortization (3)5.671.8258.30.9336.

REVENUEThe Company manufactures and sells paint, stains, supplies, equipment and floor covering through company-operated stores, branded and private label products through retailers and a broad range of industrial coatings directly to global manufacturing customers through company-operated branches. A large portion of the Company’s revenue is recognized at a point in time and made to customers who are not engaged in a long-term supply agreement or any form of contract with the Company. These sales are paid for at the time of sale in cash, credit card or on account with the vast majority of customers having terms between 30 and 60 days, not to exceed one year. Many customers who purchase on account take advantage of early payment discounts offered by paying within 30 days of being invoiced. The Company estimates variable consideration for these sales on the basis of both historical information and current trends to estimate the expected amount of discounts to which customers are likely to be entitled.The remaining revenue is governed by long-term supply agreements and related purchase orders (contracts) that specify shipping terms and aspects of the transaction price including rebates, discounts and other sales incentives, such as advertising support. Contracts are at standalone pricing. The performance obligation in these contracts is determined by each of the individual purchase orders and the respective stated quantities, with revenue being recognized at a point in time when obligations under the terms of the agreement are satisfied. This generally occurs with the transfer of control of our products to the customer. Sales, value add and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. See Note 22 for the Company’s disaggregation of Net sales by Reportable Segment. As the Reportable Segments are aligned by similar economic factors, trends and customers, this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Approximately 80% of the Company’s Net sales are in the North America region (which is comprised of the United States, Canada and the Caribbean region), slightly less than 10% in the EMEAI region (Europe, Middle East, Africa and India), with the remaining global regions accounting for the residual balance. No individual country outside of the United States is individually significant.

DEBTLong-Term DebtThe table below summarizes the carrying value of the Company’s outstanding debt, net of capitalized debt issuance costs, discounts and premiums:Due Date2025202420233.45% Senior Notes 2027$1,497.5 $1,495.7 $1,493.9 4.50% Senior Notes 20471,234.5 1,233.7 1,233.0 2.95% Senior Notes2029796.5 795.5 794.6 3.80% Senior Notes2049544.0 543.7 543.6 2.30% Senior Notes 2030498.0 497.6 497.1 4.30% Senior Notes2028497.1 — — 2.20% Senior Notes2032496.1 495.5 494.8 4.50% Senior Notes2030495.5 — — 5.15% Senior Notes2035495.4 — — 3.30% Senior Notes 2050494.8 494.6 494.3 2.90% Senior Notes2052492.4 492.1 491.9 4.80% Senior Notes2031445.7 445.0 — 4.55% Senior Notes2028398.4 397.6 — 4.55% Senior Notes2045395.6 395.4 395.2 3.95% Senior Notes 2026350.1 351.6 353.1 4.00% Senior Notes2042297.3 297.2 297.0 4.40% Senior Notes 2045241.8 241.3 240.9 0.53% to 8.00% Promissory NotesThrough 20260.1 0.2 0.9 3.45% Senior Notes2025— 399.8 399.4 4.25% Senior Notes2025— 399.5 398.6 3.30% Senior Notes 2025— 250.0 249.9 4.05% Senior Notes 2024— — 598.8 3.125% Senior Notes 2024— — 499.7 Total (1)9,670.8 9,226.0 9,476.7 Less amounts due within one year350.1 1,049.2 1,098.8 Long-term debt$9,320.7 $8,176.8 $8,377.9 (1) Net of capitalized debt issuance costs of $53.6 million, $48.6 million and $49.3 million and net of discounts and premiums of $25.7 million, $26.0 million and $25.2 million at December 31, 2025, 2024 and 2023, respectively. Maturities of long-term debt are as follows for the next five years: $350.1 million in 2026; $1.5 billion in 2027; $900.0 million in 2028; $800.0 million in 2029 and $1.0 billion in 2030. Interest expense on long-term debt was $396.2 million, $354.7 million and $374.6 million for 2025, 2024 and 2023, respectively.Subsequent eventIn January 2026, the Company repaid the principal of $350 million related to the Company’s 3.95% senior notes using commercial paper.Activity in the current yearIn 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 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.

INCOME TAXESOn 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 costs, and the ability to accelerate previously capitalized domestic research and development costs beginning in 2025. Other changes, which are primarily related to U.S. international tax provisions, begin in 2026. The Tax Act did not materially change the Company’s effective tax rate for 2025. The Company has reflected the effects of the Tax Act in the consolidated financial statements for the year ending December 31, 2025, in accordance with the Income Taxes Topic of the ASC. Significant components of the provisions for income taxes were as follows:202520242023Current:Federal$374.0 $558.0 $553.4 Foreign157.3 155.1 147.6 State and local85.2 132.2 109.0 Total current616.5 845.3 810.0 Deferred:Federal170.6 (54.8)(39.9)Foreign(44.0)(15.8)(51.5)State and local26.6 (4.3)2.5 Total deferred153.2 (74.9)(88.9)Total provisions for income taxes$769.7 $770.4 $721.1 The reconciliation of the statutory federal income tax rate to the effective tax rate for the current year in accordance with the adoption of ASU 2023-09 is as follows:2025Statutory federal income tax rate$701.0 21.0 %Effect of:State and local income taxes (1)103.2 3.2 Foreign tax effects41.2 1.2 Effect of cross border tax law(6.4)(0.2)Tax credits:Investment vehicles(8.7)(0.3)Other(8.8)(0.3)Changes in valuation allowances3.6 0.1 Nontaxable or nondeductible items:Employee share-based payments(50.1)(1.5)Other1.9 0.1 Changes in unrecognized tax benefits(7.2)(0.2)Reported effective tax rate$769.7 23.1 %(1) California, Texas, Illinois, Florida, Pennsylvania, New York, Wisconsin, and New Jersey make up greater than 50% of state and local income taxes.A reconciliation of the statutory federal income tax rate to the effective tax rate for years prior to the adoption of ASU 2023-09 is as follows:20242023Statutory federal income tax rate21.0 %21.0 %Effect of:State and local income taxes3.2 3.0 Investment vehicles(0.5)(0.5)Employee share-based payments(2.1)(1.1)Research and development credits(0.3)(0.4)Amended returns and refunds(0.2)0.2 Taxes on non-U.S. earnings1.1 0.8 Other - net0.1 0.2 Reported effective tax rate22.3 %23.

STOCK-BASED COMPENSATIONAt the Annual Meeting of Shareholders on April 16, 2025, the Company’s shareholders approved The Sherwin-Williams Company 2025 Equity and Incentive Compensation Plan (the 2025 Plan). The 2025 Plan became effective as of the approval date and replaced The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan (Amended and Restated as of October 13, 2023), The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors and The Sherwin-Williams Company 2007 Executive Annual Performance Bonus Plan (Amended and Restated as of October 13, 2023). The 2025 Plan authorizes the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to the aggregate of 21,969,555 shares of common stock, plus any shares relating to awards that expire, are forfeited or canceled. The Company will issue new shares upon exercise of option rights (options) and vesting of restricted stock units (RSUs). The 2025 Plan permits the granting of options, appreciation rights, restricted stock, RSUs, performance shares and performance units to eligible employees and members of the Board of Directors who are not employees of the Company. Shares available for future grants under the 2025 Plan were 21,067,821 at December 31, 2025. Now replaced, The Sherwin-Williams Company 2006 Equity and Performance Incentive Plan and The Sherwin-Williams Company 2006 Stock Plan for Nonemployee Directors (collectively, the 2006 Plans) authorized the Board of Directors, or a committee of the Board of Directors, to issue or transfer up to an aggregate of 71,100,000 and 600,000 shares of common stock, plus any shares relating to awards that expired, were forfeited or canceled to eligible employees and members of the Board of Directors who are not employees of the Company, respectively. While the Company issued shares upon exercise of options and vesting of RSUs, the 2006 Plans permitted the granting of options, appreciation rights, restricted stock, RSUs, performance shares and performance units to eligible employees and options, appreciation rights, restricted stock and RSUs to nonemployee directors. At December 31, 2025, no appreciation rights, performance shares or performance units had been granted to eligible employees and no options or appreciation rights had been granted to nonemployee directors. No further grants may be made under the 2006 Plans and all rights granted remain to their terms.

LEASESThe Company leases retail stores, manufacturing and distribution facilities, office space and equipment under operating and finance lease agreements. Operating leases are included in Operating lease right-of-use (ROU) assets, Current portion of operating lease liabilities and Long-term operating lease liabilities and finance leases are included in Other assets, Other accruals and Other long-term liabilities on the Consolidated Balance Sheets. The majority of the operating lease ROU asset and lease liability balances are related to the retail operations of the Paint Stores Group. The majority of the finance lease ROU asset and lease liability balances are related to a distribution facility within the Consumer Brands Group. Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s discretion and is not reasonably certain at lease commencement. Operating and finance lease ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term. Most leases do not contain an incremental borrowing rate which is readily determinable from their associated contract. Therefore, the Company uses its estimated incremental borrowing rate on a collateralized basis which is derived from information available at the lease commencement date, giving consideration to publicly available credit rating data, other risk characteristics and the term of the lease in determining the present value of lease payments.The Company does not account for lease and non-lease components of contracts separately for any underlying asset class. Some leases have variable payments, however, because they are not based on an index or rate, they are excluded from ROU assets and lease liabilities. Variable payments for real estate leases relate primarily to common area maintenance, insurance, taxes and utilities associated with the properties. Variable payments for equipment leases relate primarily to hours, miles or other quantifiable usage factors which are not determinable at the time the lease agreement is entered into by the Company. The Company has made an accounting policy election by underlying asset class to not apply the recognition requirements of ASC 842 to short-term leases. As a result, certain leases with a term of 12 months or less are not recorded on the Consolidated Balance Sheets and expense is recognized on a straight-line basis over the lease term.

ACQUISITIONS AND DIVESTITURESAcquisitionsClosed in current yearIn October 2025, the Company completed the acquisition of BASF SE’s Brazilian decorative paints business (Suvinil) for approximately $1.15 billion. The purchase price is subject to revision for a contractual working capital adjustment, which is expected to be finalized in 2026. The acquired business develops, manufactures and sells a comprehensive portfolio of innovative products under the well-known Suvinil and Glasu! brand names to professional painters, designers, architects and consumers across the country. The business also operates two manufacturing facilities located in the Northeast and Southeast regions of Brazil. The acquired business is reported within the Company’s Consumer Brands Group. The following table summarizes the preliminary amounts recognized as part of the opening balance sheet as of December 31, 2025: Cash and cash equivalents$53.8 Accounts receivable, net154.1 Inventories73.7 Property, plant and equipment141.4 Indefinite-lived intangibles300.1 Finite-lived intangibles308.6 Other assets42.0 Liabilities assumed(173.5)Fair value of net assets acquired900.2 Goodwill247.8 Total purchase price$1,148.0 As of December 31, 2025, the Company is in the process of finalizing the net assets acquired in the acquisition, most notably, the valuation of property, plant and equipment, Intangible assets and Deferred income taxes. The Company expects to finalize the purchase price allocation for the acquisition within the allowable measurement period. Pro forma results of operations have not been presented as the impact on the Company’s consolidated financial results is not material.In June 2025, the Company completed the acquisition of a domestic regional floor covering provider for an immaterial purchase price. The acquired business is reported within the Company’s Paint Stores Group. The Company expects to finalize the purchase price allocation for the acquisition within the allowable measurement period. Pro forma results of operations have not been presented as the impact on the Company’s consolidated financial results is not material.In March 2025, the Company completed the acquisition of a European coil and industrial coatings company for approximately $80 million. The acquired business is reported within the Company’s Performance Coatings Group. The Company expects to finalize the purchase price allocation for the acquisition within the allowable measurement period.