CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial statements include all of our majority-owned and controlled
subsidiaries. Investments in less-than-majority-owned joint ventures over which
we have the ability to exercise significant influence are accounted for under
the equity method. Preparation of our financial statements requires the use of
estimates and assumptions that affect the reported amounts of our assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. We continually evaluate these
estimates, including those related to our allowances for doubtful accounts;
reserves for excess and obsolete inventories; allowances for recoverable sales
and/or value-added taxes; uncertain tax positions; useful lives of property,
plant and equipment; goodwill and other intangible assets; environmental,
warranties and other contingent liabilities; income tax valuation allowances;
pension plans; and the fair value of financial instruments. We base our
estimates on historical experience, our most recent facts, and other assumptions
that we believe to be reasonable under the circumstances. These estimates form
the basis for making judgments about the carrying values of our assets and
liabilities. Actual results, which are shaped by actual market conditions, may
differ materially from our estimates.

A comprehensive discussion of the accounting policies and estimates that are the
most critical to our financial statements are set forth in our Annual Report on
Form 10-K for the year ended May 31, 2021.

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SEGMENT INFORMATION

The following tables reflect the results of our reportable segments consistent
with our management philosophy, and represent the information we utilize, in
conjunction with various strategic, operational and other financial performance
criteria, in evaluating the performance of our portfolio of businesses.

                                    Three Months Ended                     Nine Months Ended
                              February 28,       February 28,       February 28,       February 28,
(In thousands)                    2022               2021               2022               2021
Net Sales
CPG Segment                  $      482,026     $      395,969     $    1,740,578     $    1,447,179
PCG Segment                         270,865            226,523            858,987            745,145
Consumer Segment                    491,617            477,742          1,559,223          1,666,418
SPG Segment                         189,371            169,161            565,050            503,239
Consolidated                 $    1,433,879     $    1,269,395     $    4,723,838     $    4,361,981
Income Before Income Taxes
(a)
CPG Segment
Income Before Income Taxes
(a)                          $       31,498     $       14,431     $      276,223     $      184,613
Interest (Expense), Net
(b)                                  (1,735 )           (2,074 )           (5,254 )           (6,325 )
EBIT (c)                     $       33,233     $       16,505     $      281,477     $      190,938
PCG Segment
Income Before Income Taxes
(a)                          $       24,917     $       12,158     $       97,849     $       64,719
Interest Income (Expense),
Net (b)                                  76                 75                407                 53
EBIT (c)                     $       24,841     $       12,083     $       97,442     $       64,666
Consumer Segment
Income Before Income Taxes
(a)                          $       16,893     $       42,724     $       95,912     $      263,813
Interest Income (Expense),
Net (b)                                  62                (60 )              211               (187 )
EBIT (c)                     $       16,831     $       42,784     $       95,701     $      264,000
SPG Segment
Income Before Income Taxes
(a)                          $       25,881     $       24,560     $       71,028     $       73,415
Interest (Expense), Net
(b)                                     (18 )              (64 )              (82 )             (219 )
EBIT (c)                     $       25,899     $       24,624     $       71,110     $       73,634
Corporate/Other
(Loss) Before Income Taxes
(a)                          $      (58,692 )   $      (38,013 )   $     (155,890 )   $     (122,375 )
Interest (Expense), Net
(b)                                 (24,756 )           (7,387 )          (60,830 )          (23,562 )
EBIT (c)                     $      (33,936 )   $      (30,626 )   $      (95,060 )   $      (98,813 )
Consolidated
Net Income                   $       33,249     $       38,466     $      293,160     $      347,136
Add: Provision for Income
Taxes                                 7,248             17,394             91,962            117,049
Income Before Income Taxes
(a)                                  40,497             55,860            385,122            464,185
Interest (Expense)                  (22,016 )          (20,964 )          (64,127 )          (63,975 )
Investment Income
(Expense), Net                       (4,355 )           11,454             (1,421 )           33,735
EBIT (c)                     $       66,868     $       65,370     $      450,670     $      494,425



(a) The presentation includes a reconciliation of Income (Loss) Before Income
Taxes, a measure defined by generally accepted accounting principles ("GAAP") in
the U.S., to EBIT.
(b) Interest Income (Expense), Net includes the combination of Interest
(Expense) and Investment Income, Net.
(c) EBIT is a non-GAAP measure, and is defined as Earnings (Loss) Before
Interest and Taxes. We evaluate the profit performance of our segments based on
income before income taxes, but also look to EBIT, as a performance evaluation
measure because Interest (Income) Expense, Net is essentially related to
corporate functions, as opposed to segment operations. We believe EBIT is useful
to investors for this purpose as well, using EBIT as a metric in their
investment decisions. EBIT should not be considered an alternative to, or more
meaningful than, income before income taxes as determined in accordance with
GAAP, since EBIT omits the impact of interest in determining operating
performance, which represent items necessary to our continued operations, given
our level of indebtedness. Nonetheless, EBIT is a key measure expected by and
useful to our fixed income investors, rating agencies and the banking community
all of whom believe, and we concur, that this measure is critical to the capital
markets' analysis of our segments' core operating performance. We also evaluate
EBIT because it is clear that movements in EBIT impact our ability to attract
financing. Our underwriters and bankers consistently require inclusion of this
measure in offering memoranda in conjunction with any debt underwriting or bank
financing. EBIT may not be indicative of our historical operating results, nor
is it meant to be predictive of potential future results.

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RESULTS OF OPERATIONS

Three months completed February 28, 2022

Net Sales

                          Three months ended
(in millions,          February        February         Total       Organic      Acquisition     Foreign Currency
except percentages)    28, 2022        28, 2021        Growth     
Growth(1)       Growth        Exchange Impact
CPG Segment           $     482.0     $     396.0          21.7 %        23.2 %           2.2 %               -3.7 %
PCG Segment                 270.9           226.5          19.6 %        17.8 %           3.4 %               -1.6 %
Consumer Segment            491.6           477.7           2.9 %         3.6 %           0.0 %               -0.7 %
SPG Segment                 189.4           169.2          11.9 %        11.9 %           0.8 %               -0.8 %
Consolidated          $   1,433.9     $   1,269.4          13.0 %        13.4 %           1.4 %               -1.8 %
(1) Organic growth includes the impact of price
and volume.




Our CPG segment experienced significant organic growth during the third quarter
of fiscal 2022 in nearly all business units in the segment when compared to the
same quarter in the prior year. The increase is primarily driven by strong
demand in North America for its construction and maintenance products, including
insulated concrete forms, roofing systems, concrete admixtures and repair
products, and commercial sealants. Performance in most international markets
also generated strong top-line growth.

Our PCG segment experienced significant sales growth during the third quarter of
fiscal 2022 in nearly all the major business units in the segment when compared
to the same quarter in the prior year, particularly businesses that provide
polymer flooring systems, corrosion control coatings and raised flooring
systems. Driving the strong top-line were increased industrial maintenance
spending, recovery in energy markets and price increases.

Our Consumer segment experienced organic growth in comparison to the prior year,
which benefitted from unprecedented demand worldwide for its "do-it-yourself"
home improvement and cleaning products, as a result of the Covid pandemic.
Current quarter sales continued to be impacted by raw material shortages and
supply chain disruptions. Despite these disruptions, underlying demand for these
products remains strong, which resulted in fiscal 2022 third quarter sales that
were still above the pre-pandemic levels of the third quarter in fiscal 2020.

Our SPG segment experienced significant sales growth due to strong demand for
nearly all its businesses, especially those serving the OEM and food additives
markets. Additionally, the segment's disaster restoration equipment business
rebounded after securing a supply of semiconductor chips and reconfiguring its
products to accommodate them.

Gross Profit Margin Our consolidated gross profit margin of 34.8% of net sales
for the third quarter of fiscal 2022 compares to a consolidated gross profit
margin of 37.2% for the comparable period a year ago. The current quarter gross
profit margin decrease of approximately 2.4%, or 240 basis points ("bps"),
resulted primarily from lower absorption, inflationary pressures on raw
materials versus the same period a year ago, higher freight costs, and
production inefficiencies as a result of labor shortages due to the Omicron
variant and supply chain disruptions. Partially offsetting these decreases were
the impact of selling price increases and MAP to Growth savings.

Overall, we experienced inflation in raw materials, freight and wages during the
third quarter of fiscal 2022. As indicated previously, several macroeconomic
factors resulted in inflation, beginning in the fourth quarter of fiscal 2021.
We expect that these increased costs will continue to be reflected in our
results throughout the remainder of fiscal 2022 and into fiscal 2023. We plan to
continue working to offset these increased costs with commensurate increases in
selling prices. Furthermore, "force majeures" remain in effect from some of our
material suppliers, which may impact our ability to timely meet customer demand
in certain of our businesses and across certain product categories.

The macroeconomic factors identified above include, but are not limited to, the
following: (i) strained supply chains as inventories have not fully recovered
from Winter Storm Uri in February 2021; (ii) intermittent supplier plant
shutdowns due to the Covid pandemic; (iii) significant worldwide demand during
the Covid pandemic for key items such as packaging, solvents, and chemicals;
(iv) availability of transportation and elevated costs to transport products,
which has been exacerbated as a result of increased Covid infections and
associated restrictions and (v) high global demand as markets reopen and
economic stimulus drives growth.

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SG&A Our consolidated SG&A expense during the period was $31.4 million higher
versus the same period last year but decreased to 30.2% of net sales from 31.7%
of net sales for the prior year quarter. Additional SG&A expense recognized by
companies we recently acquired approximated $6.9 million during the third
quarter of fiscal 2022.

Our CPG segment SG&A was approximately $15.5 million higher for the third
quarter of fiscal 2022 versus the comparable prior year period but decreased as
a percentage of net sales. The increase in expense was mainly due to higher
variable costs as a result of higher sales volumes, continued investment in
growth initiatives, restoration of travel expenses, and higher incentive
compensation accruals directly related to performance. Additionally, companies
recently acquired generated approximately $4.1 million of additional SG&A
expense.

Our PCG segment SG&A was approximately $10.9 million higher for the third
quarter of fiscal 2022 versus the comparable prior year period but decreased as
a percentage of net sales. The increase in expense as compared to the prior year
period is mainly due to increased variable expenses as a result of higher sales
volumes, higher distribution costs, as well as restoration of travel expenses.
Additionally, companies recently acquired generated approximately $2.3 million
of additional SG&A expense.

Our Consumer segment SG&A decreased by approximately $5.7 million during the
third quarter of fiscal 2022 versus the same period last year, and decreased as
a percentage of net sales. The quarter-over-quarter decrease in SG&A was
attributable to decreases in advertising and promotional expense, as well as
reduced incentives when compared to the prior year quarter. These decreases were
partially offset by merit increases and the restoration of travel expenses.

Our SPG segment SG&A was approximately $3.6 million higher during the third
quarter of fiscal 2022 versus the comparable prior year period but decreased as
a percentage of net sales. The increase in SG&A expense is attributable to
investments in growth initiatives and restoring travel spending curtailed in the
prior year. Additionally, companies recently acquired generated approximately
$0.5 million of additional SG&A expense.

SG&A expenses in our corporate/other category increased by $7.1 million during
the third quarter of fiscal 2022 as compared to last year's third quarter mainly
due to higher hospitalization, insurance and consulting expenses.

The following table summarizes the retirement-related benefit plans' impact on
income before income taxes for the three months ended February 28, 2022 and
2021, as the service cost component has a significant impact on our SG&A
expense:

                                                         Three months ended
                                                February 28,      February 28, 2021        Change
(in millions)                                       2022
Service cost                                    $        13.7    $              13.0     $       0.7
Interest cost                                             5.4                    5.2             0.2
Expected return on plan assets                          (12.4 )                 (9.9 )          (2.5 )
Amortization of:
Prior service (credit)                                   (0.1 )                 (0.1 )             -
Net actuarial losses recognized                           4.4                    8.2            (3.8 )
Total Net Periodic Pension & Postretirement
Benefit Costs                                   $        11.0    $              16.4     $      (5.4 )




We expect that pension expense will fluctuate on a year-to-year basis, depending
upon the investment performance of plan assets and potential changes in interest
rates, both of which are difficult to predict, but which may have a material
impact on our consolidated financial results in the future.

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Restructuring Charges
                                                                    Three months ended
(in millions)                                            February 28, 2022      February 28, 2021
Severance and benefit costs                             $               0.1    $               0.6
Facility closure and other related costs                                1.0                    2.6
Other restructuring (credits)                                             -                   (0.1 )
Total Restructuring Costs                               $               1.1    $               3.1




These charges are associated with closures of certain facilities as well as the
elimination of duplicative headcount and infrastructure associated with certain
of our businesses and are the result of our MAP to Growth, which focuses upon
strategic shifts in operations across our entire business.

Our current expectation of future additional restructuring costs is summarized
in the table below.

                                            As of February 28,
(in millions)                                      2022
Severance and benefit costs                $                1.2
Facility closure and other related costs                    1.5
Other restructuring costs                                     -
Future Expected Restructuring Costs        $                2.7




We previously expected these charges to be incurred by the end of calendar year
2020, upon which we expected to achieve an annualized pretax savings of
approximately $290 million per year. However, the disruption caused by the
outbreak of the Covid pandemic delayed the finalization of our MAP to Growth
past the original target completion date of December 31, 2020. We utilized the
remainder of fiscal 2021 to drive toward achieving the goals originally set
forth in our MAP to Growth. On May 31, 2021, we formally concluded our MAP to
Growth. However, certain projects identified prior to May 31, 2021 are not yet
complete. Accordingly, we expect to incur restructuring expense throughout
fiscal 2022, as projects related to our MAP to Growth are executed and
completed.

See Note 3, “Restructuring”, to the consolidated financial statements, for further details regarding our growth plan.

Interest charges

                                                Three months ended
(in millions, except percentages)    February 28, 2022      February 28, 2021
Interest expense                    $              22.0    $              21.0
Average interest rate (a)                          3.20 %                 3.32 %

(a) The decrease in interest rates stems from the decrease in market rates on variable cost borrowings.

                                              Change in interest
(in millions)                                      expense
Acquisition-related borrowings               $                0.6
Non-acquisition-related average borrowings                    0.4
Total Change in Interest Expense             $                1.0




Investment expenses (income), net

See Note 6, “(Revenue) Capital expenditures, net”, to the consolidated financial statements for further details.

(Gain) on sale of assets, net

See Note 7, “(Gain) on sale of assets, net”, to the consolidated financial statements for further details.

Other (income) Expenses, net

See Note 8, “Other (income) expense, net”, to the consolidated financial statements for further details.

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Profit (loss) before income taxes (“IBT”)

                                                                   Three months ended
(in millions, except percentages)    February 28, 2022     % of net sales       February 28, 2021     % of net sales
CPG Segment                         $              31.5                6.5 %   $              14.4                3.6 %
PCG Segment                                        24.9                9.2 %                  12.2                5.4 %
Consumer Segment                                   16.9                3.4 %                  42.7                8.9 %
SPG Segment                                        25.9               13.7 %                  24.6               14.5 %
Non-Op Segment                                    (58.7 )                -                   (38.0 )                -
Consolidated                        $              40.5                        $              55.9




Our CPG segment results reflect market share gains, operational improvements,
proactive cost controls, and selling price increases, which more than offset
production inefficiencies due to supply chain disruptions and material cost
inflation. Our PCG segment results reflect improved pricing, incremental savings
from operating improvement initiatives and recent acquisitions. Our Consumer
segment results reflect inflation in materials, freight and labor, as well as
the unfavorable impact of supply shortages on productivity. Our SPG segment
results reflect higher sales and operational improvements, partially offset by
raw material inflation, inefficiencies due to supply chain disruption, and
investments in future growth initiatives. Our Non-Op segment results reflect the
unfavorable swing in investment income.

Income Tax Rate The effective income tax rate of 17.9% for the three months
ended February 28, 2022 compares to the effective income tax rate of 31.1% for
the three months ended February 28, 2021. The effective income tax rates for the
presented periods reflect variances from the 21% statutory rate due primarily to
the impact of state and local income taxes, non-deductible business expenses and
the net tax on foreign subsidiary income resulting from the global intangible
low-taxed income provisions, and the impact of tax benefits related to equity
compensation. Additionally, the effective income tax rate for the three month
period ended February 28, 2022 reflects net favorable period-over-period changes
in foreign tax credit valuation allowances. Further, the effective tax rate for
the three-month period ended February 28, 2021, includes a $5.3 million discrete
charge for an increase to the deferred tax liability for withholding taxes on
additional foreign earnings that were no longer considered to be permanently
reinvested.


Net Income
                                                              Three months ended
(in millions, except percentages and per    February 28,    % of net      February 28,    % of net
share amounts)                                  2022          sales           2021          sales
Net income                                  $        33.2         2.3 %   $        38.5         3.0 %
Net income attributable to RPM
International Inc. stockholders                      33.0         2.3 %            38.2         3.0 %
Diluted earnings per share                           0.25                          0.29




Nine month period ended February 28, 2022

Net sales

                           Nine Months Ended
(in millions,          February        February         Total        Organic      Acquisition     Foreign Currency
except percentages)    28, 2022        28, 2021         Growth      Growth(1)       Growth        Exchange Impact
CPG Segment           $   1,740.6     $   1,447.2           20.3 %        19.0 %           1.4 %               -0.1 %
PCG Segment                 859.0           745.2           15.3 %        11.0 %           3.6 %                0.7 %
Consumer Segment          1,559.2         1,666.4           -6.4 %        -7.9 %           1.3 %                0.2 %
SPG Segment                 565.0           503.2           12.3 %        11.4 %           0.6 %                0.3 %
Consolidated          $   4,723.8     $   4,362.0            8.3 %         6.5 %           1.6 %                0.2 %
(1) Organic growth includes the impact of price
and volume.


Our CPG segment experienced significant organic growth during the first nine
months of fiscal 2022 in nearly all business units in the segment when compared
to the same period in the prior year. Business units performing particularly
well during the period were providers of commercial roofing systems, concrete
admixtures and repair products, and our insulated concrete forms business.
Additionally, European operations generated strong sales growth, due in part to
an easier comparison to the prior year period, when shelter-in-place
requirements were most severe.

Our PCG segment experienced sales growth during the first nine months of fiscal
2022 in nearly all the major business units in the segment when compared to the
same period in the prior year. This growth was partially aided by the prior year
comparison, where there was a significant number of deferrals of flooring and
coating projects as a result of restrictions associated with Covid, which
impacted the ability of contractors to gain access to the facilities of our end
customers. Sales growth was also facilitated by price increases and more
favorable product mix.

                                       33
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Our Consumer segment experienced significant organic declines in comparison to
the prior year, which benefitted from unprecedented demand worldwide for its
"do-it-yourself" home improvement and cleaning products, as a result of the
Covid pandemic. Current period sales were also impacted by the lack of
availability of raw materials, due to supply chain disruptions. Despite these
disruptions, underlying demand for these products remains strong, which resulted
in fiscal 2022 first nine-month sales that were still above the pre-pandemic
levels in the comparable period of fiscal 2020.

Our SPG segment experienced strong demand for our businesses serving the marine,
powder coatings and wood stains & sealers markets. Additionally, our new
business development efforts have accelerated as a result of a number of recent
management changes. The sales growth in this segment was slowed by disruptions
in the disaster restoration equipment business, which struggled to meet customer
demand due to the global semiconductor chip shortage.

Gross Profit Margin Our consolidated gross profit margin of 35.9% of net sales
for the first nine months of fiscal 2022 compares to a consolidated gross profit
margin of 39.2% for the comparable period a year ago. The current period gross
profit margin decrease of approximately 3.3%, or 330 bps, resulted primarily
from inflationary pressures on raw materials, freight and labor versus the same
period a year ago, and production inefficiencies as a result of supply chain
disruption and availability of raw materials. Partially offsetting these
decreases were the impact of selling price increases and MAP to Growth savings.

Overall, raw material costs were inflationary during the first nine months of
fiscal 2022. As indicated previously, several macroeconomic factors resulted in
inflation, beginning in the fourth quarter of fiscal 2021. We expect that these
increased costs will continue to be reflected in our results throughout the
remainder of fiscal 2022 and into fiscal 2023. We plan to continue working to
offset these increased costs with commensurate increases in selling prices.
Furthermore, "force majeures" remain in effect from some of our material
suppliers, which may impact our ability to timely meet customer demand in
certain of our businesses and across certain product categories.

SG&A Our consolidated SG&A expense during the period was $92.7 million higher
versus the same period last year but decreased slightly to 27.3% of net sales
from 27.4% of net sales for the prior year period. Additional SG&A expense
recognized by companies we recently acquired approximated $19.8 million during
the first nine months of fiscal 2022.

Our CPG segment SG&A was approximately $55.2 million higher for the first nine
months of fiscal 2022 versus the comparable prior year period but decreased as a
percentage of net sales. The increase was mainly due to higher variable expense
as a result of higher sales volumes, continued investment in growth and
operating improvement initiatives, and restoring travel spending and salaries
which were reduced in the prior year in response to the impact of the Covid
pandemic. Additionally, companies recently acquired generated approximately $7.1
million of additional SG&A expense.

Our PCG segment SG&A was approximately $26.0 million higher for the first nine
months of fiscal 2022 versus the comparable prior year period but decreased as a
percentage of net sales. The period over period increase is mainly due to
increases in commissions resulting from higher sales volume, restored travel
expenses, and higher distribution costs. Additionally, companies recently
acquired generated approximately $7.6 million of additional SG&A expense.

Our Consumer segment SG&A decreased by approximately $11.0 million during the
first nine months of fiscal 2022 versus the same period last year, but increased
as a percentage of net sales. The period over period decrease in SG&A was
attributable to lower advertising and promotional costs and reduced incentives.
Partially offsetting these decreases was approximately $4.3 million of
additional SG&A expense generated from the company recently acquired.

Our SPG segment SG&A was approximately $13.6 million higher during the first
nine months of fiscal 2022 versus the comparable prior year period but decreased
slightly as a percentage of net sales. The increase in SG&A expense is
attributable to investments in growth initiatives, merit increases, as well as a
charge recorded during the second quarter of fiscal 2022 related to the legal
matter described above in Note 15, "Contingencies and Accrued Losses," to the
Consolidated Financial Statements. Additionally, companies recently acquired
generated approximately $0.8 million of additional SG&A expense.

SG&A expenses in our corporate/other category increased by $8.9 million during
the first nine months of fiscal 2022 as compared to last year's first nine
months mainly due to higher hospitalization, insurance, legal and consulting
expenses.

                                       34
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The following table summarizes the retirement-related benefit plans' impact on
income before income taxes for the nine months ended February 28, 2022 and 2021,
as the service cost component has a significant impact on our SG&A expense:

                                                         Nine Months Ended
                                                 February 28, 2022     February 28,        Change
(in millions)                                                              2021
Service cost                                    $              41.1    $        38.9     $      2.2
Interest cost                                                  16.3             15.7            0.6
Expected return on plan assets                                (37.4 )          (29.7 )         (7.7 )
Amortization of:
Prior service (credit)                                         (0.2 )           (0.2 )            -
Net actuarial losses recognized                                13.1             24.5          (11.4 )
Total Net Periodic Pension & Postretirement
Benefit Costs                                   $              32.9    $    

49.2 $(16.3)


We expect that pension expense will fluctuate on a year-to-year basis, depending
upon the investment performance of plan assets and potential changes in interest
rates, both of which are difficult to predict, but which may have a material
impact on our consolidated financial results in the future.



Restructuring Charges
                                                                    Nine Months Ended
(in millions)                                            February 28, 2022      February 28, 2021
Severance and benefit costs                             $               1.6    $               5.2
Facility closure and other related costs                                3.5                    6.4
Other restructuring costs                                                 -                    0.7
Total Restructuring Costs                               $               5.1    $              12.3


For further information and detail about our MAP to Growth, see "Restructuring
Charges" in Results of Operations - Three Months Ended February 28, 2022, and
Note 3, "Restructuring" to the Consolidated Financial Statements.

Interest charges

                                                Nine Months Ended
(in millions, except percentages)    February 28, 2022      February 28, 2021
Interest expense                    $              64.1    $              64.0
Average interest rate (a)                          3.14 %                 3.34 %

(a) The decrease in interest rates stems from the decrease in market rates on variable cost borrowings.

                                              Change in interest
(in millions)                                      expense
Acquisition-related borrowings               $                1.7
Non-acquisition-related average borrowings                   (0.2 )
Change in average interest rate                              (1.4 )
Total Change in Interest Expense             $                0.1




Investment expenses (income), net

See Note 6, “(Revenue) Capital expenditures, net”, to the consolidated financial statements for further details.

(Gain) on sale of assets, net

See Note 7, “(Gain) on sale of assets, net”, to the consolidated financial statements for further details.

Other (income) Expenses, net

See Note 8, “Other (income) expense, net”, to the consolidated financial statements for further details.

                                       35
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Profit (loss) before income taxes (“IBT”)

                                                              Nine Months 

Ended

                                            February 28,    % of net       February     % of net
(in millions, except percentages)               2022         sales         28, 2021       sales
CPG Segment                                 $      276.2         15.9 %   $     184.6        12.8 %
PCG Segment                                         97.8         11.4 %          64.7         8.7 %
Consumer Segment                                    95.9          6.2 %         263.8        15.8 %
SPG Segment                                         71.0         12.6 %          73.4        14.6 %
Non-Op Segment                                    (155.8 )          -          (122.3 )         -
Consolidated                                $      385.1                  $     464.2


Our CPG segment results reflect market share gains, operational improvements,
proactive cost controls, selling price increases and the $41.9 million gain on
the sale of certain real property assets for the Toronto, Ontario location,
which more than offset production inefficiencies due to supply chain disruptions
and material cost inflation. Our PCG segment results reflect improved pricing,
incremental savings from operating improvement initiatives and recent
acquisitions. Our Consumer segment results reflect the decrease in sales,
inflation in materials, freight and labor, as well as the unfavorable impact of
supply shortages on productivity. Our SPG segment results reflect raw material
inflation, inefficiencies due to supply chain disruption and investments in
future growth initiatives, somewhat offset by higher sales volume and
incremental operating improvement program savings. Our Non-Op segment results
reflect the unfavorable swing in investment income.

Income Tax Rate The effective income tax rate of 23.9% for the nine months ended
February 28, 2022 compares to the effective income tax rate of 25.2% for the
nine months ended February 28, 2021. The effective income tax rates for the
nine-month periods ended February 28, 2022 and 2021 reflect variances from the
21% statutory rate due primarily to the unfavorable impact of state and local
income taxes, non-deductible business expenses and the net tax on foreign
subsidiary income resulting from the global intangible low-taxed income
provisions, partially offset by tax benefits related to equity compensation.
Additionally, the nine month period ended February 28, 2022 reflects net
favorable period-over-period changes in foreign tax credit valuation allowances.
The nine month period ended February 28, 2021 includes, as noted above, a charge
related to an increase in the deferred tax liability for withholding taxes on
foreign earnings not considered permanently reinvested.

Net revenue

                                                              Nine Months 

Ended

(in millions, except percentages and per    February 28,   % of net      February 28,   % of net
share amounts)                                  2022         sales           2021         sales
Net income                                  $      293.2         6.2 %   $      347.1         8.0 %
Net income attributable to RPM
International Inc. stockholders                    292.5         6.2 %          346.5         7.9 %
Diluted earnings per share                          2.26                         2.66



CASH AND CAPITAL RESOURCES

Fiscal 2022 vs. Fiscal 2021

Operational activities

Approximately $156.0 million of cash was provided by operating activities during
the first nine months of fiscal 2022, compared with $651.9 million of cash
provided by operating activities during the same period last year. The net
change in cash from operations includes the change in net income, which
decreased by $54.0 million during the first nine months of fiscal 2022 versus
the same period during fiscal 2021. Cash provided from operations, along with
the use of available credit lines, as required, remain our primary sources of
liquidity.

During the first nine months of fiscal 2022, the change in inventory used
approximately $215.8 million more cash compared to our spending during the same
period a year ago, which resulted primarily from the response to supply chain
constraints. Days of inventory outstanding ("DIO") was approximately 114.7 and
103.1 days at February 28, 2022 and 2021, respectively. The increase in DIO was
driven mainly by material price inflation and build-up of raw material inventory
in order to mitigate supply chain disruptions.

The change in accounts payable during the first nine months of fiscal 2022 used
approximately $41.7 million more cash than during the first nine months of
fiscal 2021 due principally to the timing of purchases, which were restrained at
the end of fiscal 2020 due to the sharp business downturn caused by pandemic
lockdown restrictions. Days payables outstanding ("DPO") decreased by
approximately 3.5 days to 95.6 days at February 28, 2022 from 99.1 days at
February 28, 2021.


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The change in accrued compensation and benefits during the first nine months of
fiscal 2022 used approximately $46.3 million more cash than during the first
nine months of fiscal 2021 due to higher incentive compensation earned during
fiscal 2021 (which was paid out in the first quarter of fiscal 2022) as compared
to fiscal 2020 (which was paid out in the first quarter of fiscal 2021). The
change in other accrued liabilities during the first nine months of fiscal 2022
used approximately $61.2 million more cash than during the first nine months of
fiscal 2021 due to changes in pension, advertising, and customer rebate accruals
and most notably due to the Coronavirus Aid, Relief, and Economic Security
("CARES") Act deferral that was paid out during the period. Certain government
entities located where we have operations have enacted various pieces of
legislation designed to help businesses weather the economic impact of Covid and
ultimately preserve jobs. Some of this legislation, such as the CARES Act in the
United States, enables employers to defer the payment of various types of taxes
over varying time horizons. As of May 31, 2021, we had a remaining deferral of
$27.1 million of such government payments that would have normally been paid
during fiscal 2020 and fiscal 2021, but which will be paid in future periods.
During the first nine months of fiscal 2022, we did not defer any additional
government payments that would have normally been paid during the first nine
months of fiscal 2022. During the first nine months of fiscal 2021, we deferred
$12.1 million of such government payments that would have normally been paid
during the first nine months of fiscal 2021. During the third quarter of fiscal
2022, we paid approximately $13.5 million, which reduced the deferred government
payments balance to $13.6 million at February 28, 2022. We expect to pay off the
remaining balance during the third quarter of fiscal 2023.

Investing activities

For the first nine months of fiscal 2022, cash used for investing activities
increased by $3.8 million to $221.7 million as compared to $217.9 million in the
prior year period. This year-over-year increase in cash used for investing
activities was mainly driven by the sales of assets, whose proceeds provided
$51.9 million in the current year, which was almost completely offset by the
increase in capital expenditures.

We paid for capital expenditures of $152.4 million and $103.2 million during the
first nine months of fiscal 2022 and fiscal 2021, respectively. Our capital
expenditures accommodate our continued growth to achieve production and
distribution efficiencies, expand capacity, introduce new technology, improve
environmental health and safety capabilities, improve information systems, and
enhance our administration capabilities. We have increased capital spending in
fiscal 2022, to expand capacity to respond to brisk product demand and to
continue our growth initiatives.

Our captive insurance companies invest their excess cash in marketable
securities in the ordinary course of conducting their operations, and this
activity will continue. Differences in the amounts related to these activities
on a year-over-year basis are primarily attributable to differences in the
timing and performance of their investments balanced against amounts required to
satisfy claims. At February 28, 2022 and May 31, 2021, the fair value of our
investments in available-for-sale debt securities and marketable equity
securities, which includes captive insurance-related assets, totaled $163.9
million and $168.8 million, respectively. The fair value of our portfolio of
marketable securities is based on quoted market prices for identical, or
similar, instruments in active or non-active markets or model-derived-valuations
with observable inputs. We have no marketable securities whose fair value is
subject to unobservable inputs.

As of February 28, 2022, approximately $175.5 million of our consolidated cash
and cash equivalents were held at various foreign subsidiaries, compared with
$221.1 million at May 31, 2021. Undistributed earnings held at our foreign
subsidiaries that are considered permanently reinvested will be used, for
instance, to expand operations organically or for acquisitions in foreign
jurisdictions. Further, our operations in the U.S. generate sufficient cash flow
to satisfy U.S. operating requirements. Refer to Note 9, "Income Taxes," to the
Consolidated Financial Statements for additional information regarding
unremitted foreign earnings.

Fundraising activities

For the first nine months of fiscal 2022, financing activities provided $27.9
million cash, which compares to cash used for financing activities of $439.7
million during the first nine months of fiscal 2021. The overall decrease in
cash used for financing activities was driven principally by debt-related
activities. During the first nine months of fiscal 2022, we used approximately
$177.0 million less cash to paydown existing debt and provided approximately
$301.0 million more cash from additions to short and long-term debt, as a result
of the issuance of our 2.95% Notes due 2032. See below for further details on
the significant components of our debt.

Our available liquidity, including our cash and cash equivalents and amounts
available under our committed credit facilities, stood at $1.46 billion as of
both February 28, 2022 and May 31, 2021.


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2.95% Notes Due 2032

On January 25, 2022, we closed an offering for $300 million aggregate principal
amount of 2.95% Notes due 2032. The proceeds from the 2032 notes were used to
repay a portion of the outstanding borrowings under our revolving credit
facility and for general corporate purposes. Interest on the Notes accrues from
January 25, 2022 and will be payable semiannually in arrears on January 15 and
July 15 of each year, beginning July 15, 2022, at a rate of 2.95% per year. The
notes mature on January 15, 2032. The indenture governing this indebtedness
includes cross-acceleration provisions. Under certain circumstances, where an
event of default under our other instruments results in acceleration of the
indebtedness under such instruments, holders of the indebtedness under the
indenture are entitled to declare amounts outstanding immediately due and
payable.

Revolving credit agreement

During the quarter ended November 30, 2018, we replaced our previous $800.0
million revolving credit agreement, which was set to expire on December 5, 2019,
with a $1.3 billion unsecured syndicated revolving credit facility (the
"Revolving Credit Facility"), which expires on October 31, 2023. The Revolving
Credit Facility includes sublimits for the issuance of swingline loans, which
are comparatively short-term loans used for working capital purposes and letters
of credit. The aggregate maximum principal amount of the commitments under the
Revolving Credit Facility may be expanded upon our request, subject to certain
conditions, up to $1.5 billion. The Revolving Credit Facility is available to
refinance existing indebtedness, to finance working capital and capital
expenditures, and for general corporate purposes.

The Revolving Credit Facility requires us to comply with various customary
affirmative and negative covenants, including a leverage covenant (i.e., Net
Leverage Ratio) and interest coverage ratio, which are calculated in accordance
with the terms as defined by the Revolving Credit Facility. Under the terms of
the leverage covenant, we may not permit our leverage ratio for total
indebtedness to consolidated EBITDA for the four most recent fiscal quarters to
exceed 3.75 to 1.00. During certain periods and per the terms of the Revolving
Credit Facility, this ratio may be increased to 4.25 to 1.00 in connection with
certain "material acquisitions." The minimum required consolidated interest
coverage ratio for EBITDA to interest expense is 3.50 to 1.00. The interest
coverage ratio is calculated at the end of each fiscal quarter for the four
fiscal quarters then ended using EBITDA as defined in the Revolving Credit
Facility.

As of February 28, 2022, we were in compliance with all financial covenants
contained in our Revolving Credit Facility, including the Net Leverage Ratio and
Interest Coverage Ratio covenants. At that date, our Net Leverage Ratio was 2.78
to 1.00, while our Interest Coverage Ratio was 10.64 to 1.00. As of February 28,
2022, we had $1.06 billion of borrowing availability on our Revolving Credit
Facility.

Our access to funds under our Revolving Credit Facility is dependent on the
ability of the financial institutions that are parties to the Revolving Credit
Facility to meet their funding commitments. Those financial institutions may not
be able to meet their funding commitments if they experience shortages of
capital and liquidity or if they experience excessive volumes of borrowing
requests within a short period of time. Moreover, the obligations of the
financial institutions under our Revolving Credit Facility are several and not
joint and, as a result, a funding default by one or more institutions does not
need to be made up by the others.

Accounts Receivable Securitization Program

As of February 28, 2022, we did not have an outstanding balance under our AR
Program, which compares with the maximum availability of $215.0 million on that
date. The maximum availability under the AR Program is $250.0 million, but
availability is further subject to changes in the credit ratings of our
customers, customer concentration levels or certain characteristics of the
accounts receivable being transferred and, therefore, at certain times, we may
not be able to fully access the $250.0 million of funding available under the AR
Program.

The AR Program contains various customary affirmative and negative covenants, as
well as customary default and termination provisions. Our failure to comply with
the covenants described above and other covenants contained in the Revolving
Credit Facility could result in an event of default under that agreement,
entitling the lenders to, among other things, declare the entire amount
outstanding under the Revolving Credit Facility to be due and payable
immediately. The instruments governing our other outstanding indebtedness
generally include cross-default provisions that provide that, under certain
circumstances, an event of default that results in acceleration of our
indebtedness under the Revolving Credit Facility will entitle the holders of
such other indebtedness to declare amounts outstanding immediately due and
payable.


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Term Loan Facility Credit Agreement

On February 21, 2020, we and our subsidiary, RPM Europe Holdco B.V. (formerly
"RPM New Horizons Netherlands, B.V.") (the "Foreign Borrower"), entered into an
unsecured syndicated term loan facility credit agreement (the "New Credit
Facility") with the lenders party thereto and PNC Bank, National Association, as
administrative agent for the lenders. The New Credit Facility provides for a
$300 million term loan to us and a $100 million term loan to the Foreign
Borrower (together, the "Term Loans"), each of which was fully advanced on the
closing date. The Term Loans mature on February 21, 2023, with no scheduled
amortization before that date, and the Term Loans may be prepaid at any time
without penalty or premium. We agreed to guarantee all obligations of the
Foreign Borrower under the New Credit Facility. The proceeds of the Term Loans
were used to repay a portion of the outstanding borrowings under our Revolving
Credit Facility. See "Revolving Credit Agreement" above for further details.

The Term Loans will bear interest at either the base rate or the Eurodollar
Rate, at our option, plus a spread determined by our debt rating. We, and the
Foreign Borrower, have entered into multicurrency floating to fixed interest
rate swap agreements that effectively fix interest payment obligations on the
entire principal amount of the Term Loans through their maturity at (a) 0.612%
per annum on our Term Loan, and (b) 0.558% per annum on the Foreign Borrower's
Term Loan.

The New Credit Facility contains customary covenants, including but not limited
to, limitations on our ability, and in certain instances, our subsidiaries'
ability, to incur liens, make certain investments, or sell or transfer assets.
Additionally, we may not permit (i) our consolidated interest coverage ratio to
be less than 3.50 to 1.00, or (ii) our leverage ratio (defined as the ratio of
total indebtedness, less unencumbered cash and cash equivalents in excess of $50
million, to consolidated EBITDA for the four most recent fiscal quarters) to
exceed 3.75 to 1.00. Upon notification to the lenders, however, the maximum
permitted leverage ratio can be relaxed to 4.25 to 1.00 for a one-year period in
connection with certain material acquisitions. In addition, the agreement was
amended on April 30, 2020 to allow the maximum permitted Net Leverage Ratio to
be increased to 4.25 to 1.00 during certain periods (refer to the "Revolving
Credit Agreement" section above). The covenants contained in the New Credit
Facility are substantially similar to those contained in our Revolving Credit
Facility. See "Revolving Credit Agreement" above for details on our compliance
with all significant financial covenants at February 28, 2022.

See Note G, “Borrowings”, to the consolidated financial statements, in our Annual Report on Form 10-K for the year ended May 31, 2021 for more details on the material components of our debt.

Share buyback program

See Note 12, “Share buyback program” to the consolidated financial statements, for further details regarding our share buyback program.

Off-Balance Sheet Arrangements
We do not have any off-balance sheet financings. We have no subsidiaries that
are not included in our financial statements, nor do we have any interests in,
or relationships with, any special purpose entities that are not reflected in
our financial statements.

OTHER MATTERS

Environmental Matters

Environmental obligations continue to be appropriately addressed and, based upon
the latest available information, it is not anticipated that the outcome of such
matters will materially affect our results of operations or financial condition.
Our critical accounting policies and estimates set forth above describe our
method of establishing and adjusting environmental-related accruals and should
be read in conjunction with this disclosure. For additional information, refer
to "Part II, Item 1. Legal Proceedings."


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FORWARD-LOOKING STATEMENTS

The foregoing discussion includes forward-looking statements relating to our
business. These forward-looking statements, or other statements made by us, are
made based on our expectations and beliefs concerning future events impacting us
and are subject to uncertainties and factors (including those specified below),
which are difficult to predict and, in many instances, are beyond our control.
As a result, our actual results could differ materially from those expressed in
or implied by any such forward-looking statements. These uncertainties and
factors include (a) global markets and general economic conditions, including
uncertainties surrounding the volatility in financial markets, the availability
of capital and the effect of changes in interest rates, and the viability of
banks and other financial institutions; (b) the prices, supply and capacity of
raw materials, including assorted pigments, resins, solvents, and other natural
gas- and oil-based materials; packaging, including plastic and metal containers;
and transportation services, including fuel surcharges; (c) continued growth in
demand for our products; (d) legal, environmental and litigation risks inherent
in our construction and chemicals businesses and risks related to the adequacy
of our insurance coverage for such matters; (e) the effect of changes in
interest rates; (f) the effect of fluctuations in currency exchange rates upon
our foreign operations; (g) the effect of non-currency risks of investing in and
conducting operations in foreign countries, including those relating to domestic
and international political, social, economic and regulatory factors; (h) risks
and uncertainties associated with our ongoing acquisition and divestiture
activities; (i) the timing of and the realization of anticipated cost savings
from restructuring initiatives and the ability to identify additional cost
savings opportunities; (j) risks related to the adequacy of our contingent
liability reserves; (k) risks relating to the Covid pandemic; (l) risks related
to adverse weather conditions or the impacts of climate change and natural
disasters; and (m) other risks detailed in our filings with the Securities and
Exchange Commission, including the risk factors set forth in our Annual Report
on Form 10-K for the year ended May 31, 2021, as the same may be updated from
time to time. We do not undertake any obligation to publicly update or revise
any forward-looking statements to reflect future events, information or
circumstances that arise after the filing date of this document.

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