Reportable Segment Information

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

REPORTABLE SEGMENT INFORMATION

REPORTABLE SEGMENT INFORMATION

The 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 has three reportable operating segments: Paint Stores Group, Consumer Brands Group and Performance Coatings Group (individually, a Reportable Segment and collectively, the Reportable Segments). Factors considered in determining the three Reportable Segments of the Company include the nature of business activities, the management structure 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 the 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. 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.

The Paint Stores Group consisted of 4,773 company-operated specialty paint stores in the United States, Canada and the Caribbean region at December 31, 2024. Each store in this segment is engaged in servicing the needs of architectural and industrial paint contractors and do-it-yourself homeowners. These stores market and sell Sherwin-Williams® and other controlled brand architectural paint and coatings, protective and marine products, OEM product finishes and related products. The majority of these products are produced by manufacturing facilities in the Consumer Brands Group. In addition, each store sells select purchased associated products. The loss of any single customer would not have a material adverse effect on the business of this segment. During 2024, this segment opened 79 net new stores, consisting of 84 new stores opened and 5 stores closed. In 2023 and 2022, this segment opened 70 and 75 net new stores, respectively. In accordance with ASC 280-10-50-9, the Paint Stores Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Consumer Brands Group manufactures and supplies a broad portfolio of branded and private-label architectural paint, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks and adhesives to retailers, including home centers and hardware stores, dedicated dealers and distributors throughout North America, Latin America and Europe. Sales and marketing of certain controlled brand and private-label products is performed by a direct sales staff. The products distributed through third-party customers are intended for resale to the ultimate

end-user of the product. The Consumer Brands Group also consisted of 334 company-operated specialty paint stores in Latin America at December 31, 2024. Each store in this segment is engaged in servicing the needs of home, commercial and industrial projects to contractors and do-it-yourself customers in Latin America. These stores market and sell Sherwin-Williams® and other controlled brand architectural paint and coatings, protective and marine products, OEM product finishes and related products which are branded for the Latin America market. In addition, each store sells select purchased associated products. The Consumer Brands Group had sales to certain customers that, individually, may be a significant portion of the sales and related profitability of the segment. During 2024, the segment opened 16 net new stores, consisting of 18 stores opened and 2 stores closed. In 2023 and 2022, this segment opened (closed) 11 and (3) net new stores, respectively.

The Consumer Brands Group also supports the Company’s other businesses around the world with new product research and development, manufacturing, distribution and logistics. Approximately 63% of the total sales of the Consumer Brands Group in 2024 were intersegment transfers of products primarily sold through the Paint Stores Group. This segment incurred most of the Company’s capital expenditures related to ongoing environmental compliance measures, manufacturing capacity expansion, operational efficiencies and maintenance projects at sites currently in operation. In accordance with ASC 280-10-50-9, the Consumer Brands Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Performance Coatings Group develops and sells industrial coatings for wood finishing and general industrial (metal and plastic) applications, automotive refinish, protective and marine coatings, coil coatings, packaging coatings and performance-based resins and colorants worldwide. This segment licenses certain technology and trade names worldwide, including Sherwin-Williams® and other controlled brand products which are distributed through the Paint Stores Group, this segment’s 324 company-operated branches and by a direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third-party distributors. The Performance Coatings Group had sales to certain customers that, individually, may be a significant portion of the sales of the segment. However, the loss of any single customer would not have a material adverse effect on the overall profitability of the segment. During 2024, the segment added 2 new branches (no branches were closed). In 2023 and 2022, this segment added 5 and 35 net new branches, respectively. In accordance with ASC 280-10-50-9, the Performance Coatings Group as a whole is considered the operating segment, and because it meets the criteria in ASC 280-10-50-10, it is also considered a Reportable Segment.

The Administrative function includes the administrative expenses and assets of the Company’s new global headquarters and research and development center, both currently under construction. In addition, it includes the operations of a real estate management unit that is responsible for the ownership, management and leasing of non-retail properties held primarily for use by the Company, including the Company’s current global headquarters and research and development center and disposal of idle facilities. The Administrative function’s remaining assets consist primarily of cash and cash equivalents, investments and deferred pension assets. Also included in the Administrative function was interest expense, interest and investment income, certain expenses related to closed facilities and environmental-related matters and other expenses that were not directly associated with the Reportable Segments. Sales of this function represented external leasing revenue. The Administrative function did not include any significant foreign operations. Gains and losses from the sale of property were not a significant operating factor in determining the performance of the Administrative function.

Net external sales of all consolidated foreign subsidiaries were $4.426 billion, $4.428 billion and $4.294 billion for 2024, 2023 and 2022, respectively.

Long-lived assets consisted of Property, plant and equipment, net, Goodwill, Intangible assets, net, Operating lease right-of-use assets, deferred pension assets and Other assets. The aggregate total of long-lived assets for the Company was $18.231 billion, $17.441 billion and $16.686 billion at December 31, 2024, 2023 and 2022, respectively. Long-lived assets of consolidated foreign subsidiaries totaled $3.405 billion, $3.586 billion and $3.369 billion at December 31, 2024, 2023 and 2022, respectively.

Total Assets of the Company were $23.633 billion, $22.954 billion and $22.594 billion at December 31, 2024, 2023 and 2022, respectively. Total assets of consolidated foreign subsidiaries were $5.208 billion, $5.718 billion and $5.337 billion, which represented 22.0%, 24.9% and 23.6% of the Company’s total assets at December 31, 2024, 2023 and 2022, respectively.

No single geographic area outside the United States was significant relative to consolidated Net sales or consolidated long-lived assets. Export sales and sales to any individual customer were each less than 10 percent of consolidated sales to unaffiliated customers during all years presented.

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.

	2024
	Paint Stores Group			Consumer Brands Group			Performance Coatings Group			Administrative		Consolidated Totals
Net sales	$	13,188.0		$	3,108.0		$	6,797.3		$	5.2	$	23,098.5
Intersegment transfers	—			5,304.3			56.8			(5,361.1)		—
Total net sales and intersegment transfers	$	13,188.0		$	8,412.3		$	6,854.1		$	(5,355.9)	$	23,098.5
Cost of goods sold	$	5,900.8		$	6,943.5		$	4,406.5		$	(5,347.4)	$	11,903.4
Selling, general and administrative expenses	4,405.6			863.1			1,443.0			710.4		7,422.1
Interest expense	—			1.4			—			414.3		415.7
Other segment items (1)	(21.0)			14.4			(23.3)			(64.6)		(94.5)
Income before income taxes	$	2,902.6		$	589.9		$	1,027.9		$	(1,068.6)	$	3,451.8
% to Net sales	22.0		%	19.0		%	15.1		%	nm		14.9		%
Supplemental Information:
Identifiable assets	$	5,878.0		$	6,854.7		$	7,847.4		$	3,052.5	$	23,632.6
Capital expenditures	141.3			290.3			15.2			623.2		1,070.0
Depreciation (2)	89.9			162.7			18.0			26.8		297.4
Amortization (3)	1.7			66.4			256.7			1.8		326.6
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(1)    Other segment items includes Other general (income) expense - net, Interest income and Other (income) expense - net. See Note 19.

(2)    Depreciation is recorded within Cost of goods sold and Selling, general and administrative expenses.

(3)    Amortization is recorded within Selling, general and administrative expenses.

	2023
	Paint Stores Group			Consumer Brands Group			Performance Coatings Group			Administrative		Consolidated Totals
Net sales	$	12,839.5		$	3,365.6		$	6,843.1		$	3.7	$	23,051.9
Intersegment transfers	—			5,234.0			197.8			(5,431.8)		—
Total net sales and intersegment transfers	$	12,839.5		$	8,599.6		$	7,040.9		$	(5,428.1)	$	23,051.9
Cost of goods sold	$	5,794.4		$	7,311.9		$	4,606.9		$	(5,419.4)	$	12,293.8
Selling, general and administrative expenses	4,211.5			882.3			1,415.5			556.1		7,065.4
Interest expense	—			—			—			417.5		417.5
Other segment items (1)	(27.2)			96.1			26.9			69.5		165.3
Income before income taxes	$	2,860.8		$	309.3		$	991.6		$	(1,051.8)	$	3,109.9
% to Net sales	22.3		%	9.2		%	14.5		%	nm		13.5		%
Supplemental Information:
Identifiable assets	$	5,745.3		$	6,631.8		$	8,266.6		$	2,310.7	$	22,954.4
Capital expenditures	111.4			309.6			32.6			434.8		888.4
Depreciation (2)	79.0			151.4			26.0			35.9		292.3
Amortization (3)	3.3			72.4			253.0			1.5		330.2
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(1)    Other segment items includes Other general (income) expense - net, Impairment, Interest income and Other (income) expense - net. See Notes 3 and 6 for information on Impairment and Note 19 for information on Other general (income) expense - net and Other (income) expense - net.

(2)    Depreciation is recorded within Cost of goods sold and Selling, general and administrative expenses.

(3)    Amortization is recorded within Selling, general and administrative expenses.

	2022
	Paint Stores Group			Consumer Brands Group			Performance Coatings Group			Administrative		Consolidated Totals
Net sales	$	11,963.3		$	3,388.4		$	6,793.5		$	3.7	$	22,148.9
Intersegment transfers	—			5,214.8			203.7			(5,418.5)		—
Total net sales and intersegment transfers	$	11,963.3		$	8,603.2		$	6,997.2		$	(5,414.8)	$	22,148.9
Cost of goods sold	$	5,826.8		$	7,454.8		$	4,965.4		$	(5,423.2)	$	12,823.8
Selling, general and administrative expenses	3,810.1			817.8			1,275.6			428.1		6,331.6
Interest expense	—			—			—			390.8		390.8
Other segment items (1)	(21.7)			16.4			21.3			13.6		29.6
Income before income taxes	$	2,348.1		$	314.2		$	734.9		$	(824.1)	$	2,573.1
% to Net sales	19.6		%	9.3		%	10.8		%	nm		11.6		%
Supplemental Information:
Identifiable assets	$	5,873.6		$	6,749.6		$	8,296.8		$	1,674.0	$	22,594.0
Capital expenditures	87.3			295.0			38.7			223.5		644.5
Depreciation (2)	73.9			126.2			29.1			34.8		264.0
Amortization (3)	3.3			79.8			232.0			2.0		317.1
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(1)    Other segment items includes Other general (income) expense - net, Impairment, Interest income and Other (income) expense - net. See Note 6 for information on Impairment and Note 19 for information on Other general (income) expense - net and Other (income) expense - net.

(2)    Depreciation is recorded within Cost of goods sold and Selling, general and administrative expenses.

(3)    Amortization is recorded within Selling, general and administrative expenses