~~(Former name, former address and former fiscal year, if changed since last report)~~Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒.

As of ~~April 5, 2019 131,075,271 Shares~~January 3, 2020, the registrant had 129,766,609 shares of ~~RPM International Inc. Common Stock were~~common stock, $0.01 par value per share, outstanding.

	February 28, 2019			May 31, 2018			November 30, 2019			May 31, 2019
Assets
Current Assets
Cash and cash equivalents	$	195,169		$	244,422		$	208,173		$	223,168
Trade accounts receivable (less allowances of
$54,460 and $46,344, respectively)		961,628			1,113,818
Trade accounts receivable (less allowances of $59,824 and $54,748, respectively)								1,047,813			1,232,350
Inventories		916,361			834,461			883,722			841,873
Prepaid expenses and other current assets		226,553			278,230			220,557			220,701
Total current assets		2,299,711			2,470,931			2,360,265			2,518,092
Property, Plant and Equipment, at Cost		1,652,071			1,575,875			1,712,511			1,662,859
Allowance for depreciation		(850,019	)		(795,569	)		(890,736	)		(843,648	)
Property, plant and equipment, net		802,052			780,306			821,775			819,211
Other Assets
Goodwill		1,262,326			1,192,174			1,259,556			1,245,762
Other intangible assets, net of amortization		620,453			584,272			595,311			601,082
Operating lease right-of-use assets								284,852			-
Deferred income taxes		21,098			21,897			34,719			34,908
Other		213,796			222,242			224,520			222,300
Total other assets		2,117,673			2,020,585			2,398,958			2,104,052
Total Assets	$	5,219,436		$	5,271,822		$	5,580,998		$	5,441,355
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	425,170		$	592,281		$	475,288		$	556,696
Current portion of long-term debt		453,501			3,501			102,136			552,446
Accrued compensation and benefits		143,160			177,106			139,403			193,345
Accrued losses		23,424			22,132			21,646			19,899
Other accrued liabilities		224,956			211,706			245,595			217,019
Total current liabilities		1,270,211			1,006,726			984,068			1,539,405
Long-Term Liabilities
Long-term debt, less current maturities		2,070,717			2,170,643			2,421,339			1,973,462
Operating lease liabilities								243,863			-
Other long-term liabilities		318,969			356,892			415,838			405,040
Deferred income taxes		117,272			104,023			112,590			114,843
Total long-term liabilities		2,506,958			2,631,558			3,193,630			2,493,345
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 15)
Stockholders' Equity
Preferred stock, par value $0.01; authorized 50,000 shares; none issued		-			-
Common stock, par value $0.01; authorized 300,000 shares; issued 142,433 and outstanding 131,544 as of February 28, 2019; issued 141,716 and outstanding 133,647 as of May 31, 2018		1,315			1,336
Preferred stock, par value $0.01; authorized 50,000 shares; NaN issued								-			-
Common stock, par value $0.01; authorized 300,000 shares; issued 143,021 and outstanding 129,767 as of November 30, 2019; issued 142,439 and outstanding 130,995 as of May 31, 2019								1,298			1,310
Paid-in capital		984,358			982,067			1,007,554			994,508
Treasury stock, at cost		(406,367	)		(236,318	)		(547,683	)		(437,290	)
Accumulated other comprehensive (loss)		(477,657	)		(459,048	)		(576,707	)		(577,628	)
Retained earnings		1,337,545			1,342,736			1,516,230			1,425,052
Total RPM International Inc. stockholders' equity		1,439,194			1,630,773			1,400,692			1,405,952
Noncontrolling Interest		3,073			2,765			2,608			2,653
Total equity		1,442,267			1,633,538			1,403,300			1,408,605
Total Liabilities and Stockholders' Equity	$	5,219,436		$	5,271,822		$	5,580,998		$	5,441,355

The accompanying ~~notes~~Notes to ~~consolidated financial statements~~Consolidated Financial Statements are an integral part of these statements.

	Three Months Ended						Six Months Ended
	November 30,			November 30,			November 30,			November 30,
	2019			2018			2019			2018
Net Sales	$	1,401,292		$	1,362,531		$	2,874,056		$	2,822,520
Cost of Sales		871,894			868,800			1,769,904			1,779,436
Gross Profit		529,398			493,731			1,104,152			1,043,084
Selling, General and Administrative Expenses		403,357			385,842			803,923			800,895
Restructuring Charges		4,801			7,724			11,423			27,800
Interest Expense		26,341			23,127			54,658			47,533
Investment (Income) Expense, Net		(8,805	)		7,033			(14,190	)		4,600
Other Expense, Net		1,951			3,412			3,736			3,725
Income Before Income Taxes		101,753			66,593			244,602			158,531
Provision for Income Taxes		24,431			17,420			60,784			39,172
Net Income		77,322			49,173			183,818			119,359
Less: Net Income (Loss) Attributable to Noncontrolling Interests		292			(51	)		600			371
Net Income Attributable to RPM International Inc. Stockholders	$	77,030		$	49,224		$	183,218		$	118,988
Average Number of Shares of Common Stock Outstanding:
Basic		128,393			131,058			128,639			131,467
Diluted		129,079			131,667			129,294			133,278
Earnings per Share of Common Stock Attributable to RPM International Inc. Stockholders:
Basic	$	0.60		$	0.37		$	1.42		$	0.90
Diluted	$	0.59		$	0.37		$	1.41		$	0.89

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Three Months Ended

Nine Months Ended

February 28,

February 28,

February 28,

February 28,

2019

2018

2019

2018

Net Sales

$
1,140,630

$
1,102,677

$
3,963,150

$
3,763,487

Cost of Sales

694,490

663,184

2,384,999

2,200,971

Gross Profit

446,140

439,493

1,578,151

1,562,516

Selling, General and Administrative Expenses

410,871

382,972

1,300,693

1,196,980

Restructuring Charges

8,679

-

36,479

-

Interest Expense

26,525

27,459

74,058

80,628

Investment (Income), Net

(4,726
)

(5,471
)

(126
)

(13,663
)
Other Expense (Income), Net

327

(165
)

4,052

(592
)
Income Before Income Taxes

4,464

34,698

162,995

299,163

(Benefit) Provision for Income Taxes

(10,032
)

(5,890
)

29,140

45,814

Net Income

14,496

40,588

133,855

253,349

Less:  Net Income Attributable to Noncontrolling Interests

306

361

677

1,243

Net Income Attributable to RPM International Inc.
   Stockholders

$
14,190

$
40,227

$
133,178

$
252,106

Average Number of Shares of Common Stock Outstanding:

Basic

130,105

131,178

131,019

131,195

Diluted

131,889

131,178

132,829

135,657

Earnings per Share of Common Stock Attributable to
   RPM International Inc. Stockholders:

Basic

$
0.11

$
0.30

$
1.01

$
1.90

Diluted

$
0.11

$
0.30

$
1.00

$
1.87

	Three Months Ended						Six Months Ended
	November 30,			November 30,			November 30,			November 30,
	2019			2018				2019			2018
Net Income	$	77,322		$	49,173		$	183,818		$	119,359
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		20,967			(12,245	)		(7,467	)		(52,935	)
Pension and other postretirement benefit liability adjustments (net of tax of $1,015; $1,108; $2,119 and $2,090, respectively)		3,404			3,428			7,027			6,483
Unrealized (loss) gain on securities and other (net of tax of $0; $124; $1 and $543, respectively)		(155	)		(1,515	)		216			962
Unrealized gain on derivatives (net of tax of $305; $234; $274 and $249, respectively)		381			2,349			1,165			3,271
Total other comprehensive income (loss)		24,597			(7,983	)		941			(42,219	)
Total Comprehensive Income		101,919			41,190			184,759			77,140
Less: Comprehensive Income Attributable to Noncontrolling Interests		343			40			620			204
Comprehensive Income Attributable to RPM International Inc. Stockholders	$	101,576		$	41,150		$	184,139		$	76,936

The accompanying ~~notes~~Notes to ~~consolidated financial statements~~Consolidated Financial Statements are an integral part of these statements.

Three Months Ended

Nine Months Ended

February 28,

February 28,

February 28,

February 28,

2019

2018

2019

2018

Net Income

$
14,496

$
40,588

$
133,855

$
253,349

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

20,823

31,133

(32,111
)

67,453

Pension and other postretirement benefit liability adjustments
(net of tax of $711; $1,319; $2,801 and $3,576, respectively)

2,479

2,279

8,962

5,974

Unrealized gain (loss) on securities and other (net of tax of $0; $(1,070); $543 and $43, respectively)

221

(2,380
)

1,183

91

Unrealized (loss) gain on derivatives

(604
)

(2,137
)

2,667

(5,277
)
Total other comprehensive income (loss)

22,919

28,895

(19,299
)

68,241

Total Comprehensive Income

37,415

69,483

114,556

321,590

Less: Comprehensive (Loss) Income Attributable to Noncontrolling Interests

(219
)

393

(14
)

1,234

Comprehensive Income Attributable to RPM International Inc. Stockholders

$
37,634

$
69,090

$
114,570

$
320,356

	Six Months Ended
	November 30,			November 30,
	2019			2018
Cash Flows From Operating Activities:
Net income	$	183,818		$	119,359
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization		77,572			73,025
Restructuring charges, net of payments		(1,713	)		7,464
Payments of contingent earnout obligations in excess of fair value		-			1,558
Deferred income taxes		(5,426	)		(1,400	)
Stock-based compensation expense		13,034			12,896
Other non-cash interest expense		-			1,552
Realized/unrealized (gains) losses on marketable securities		(8,741	)		7,496
Loss on extinguishment of debt		-			3,051
Other		(705	)		2,349
Changes in assets and liabilities, net of effect from purchases and sales of businesses:
Decrease in receivables		183,782			92,398
(Increase) in inventory		(41,129	)		(49,020	)
Decrease (increase) in prepaid expenses and other current and long-term assets		8,524			(942	)
(Decrease) in accounts payable		(70,712	)		(117,678	)
(Decrease) in accrued compensation and benefits		(53,589	)		(41,470	)
Increase in accrued losses		1,894			1,131
Increase in other accrued liabilities		13,644			33,422
Other		(90	)		3,098
Cash Provided By Operating Activities		300,163			148,289
Cash Flows From Investing Activities:
Capital expenditures		(71,393	)		(57,775	)
Acquisition of businesses, net of cash acquired		(36,281	)		(127,848	)
Purchase of marketable securities		(14,332	)		(13,276	)
Proceeds from sales of marketable securities		13,100			35,426
Other		2,183			(2,394	)
Cash (Used For) Investing Activities		(106,723	)		(165,867	)
Cash Flows From Financing Activities:
Additions to long-term and short-term debt		539,277			447,843
Reductions of long-term and short-term debt		(542,744	)		(247,440	)
Cash dividends		(92,040	)		(89,196	)
Shares repurchased		(100,000	)		(81,992	)
Shares returned for taxes		(10,155	)		(16,466	)
Payments of acquisition-related contingent consideration		(187	)		(3,531	)
Other		(664	)		(391	)
Cash (Used For) Provided By Financing Activities		(206,513	)		8,827
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(1,922	)		(8,757	)
Net Change in Cash and Cash Equivalents		(14,995	)		(17,508	)
Cash and Cash Equivalents at Beginning of Period		223,168			244,422
Cash and Cash Equivalents at End of Period	$	208,173		$	226,914
Supplemental Disclosures of Cash Flows Information:
Cash paid during the period for:
Interest	$	58,953		$	49,687
Income Taxes, net of refunds	$	73,322		$	25,311
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Conversion of Debt to Equity	$	-		$	38,239

The accompanying ~~notes~~Notes to ~~consolidated financial statements~~Consolidated Financial Statements are an integral part of these statements.

Nine Months Ended

February 28,

February 28,

2019

2018

Cash Flows From Operating Activities:

Net income

$
133,855

$
253,349

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

Depreciation

71,869

61,078

Amortization

35,677

35,123

Restructuring charges, net of payments

9,296

-

Fair value adjustments to contingent earnout obligations

1,558

-

Deferred income taxes

(8,747
)

(42,885
)
Stock-based compensation expense

20,892

17,698

Other non-cash interest expense

1,552

4,275

Realized/unrealized losses (gains) on marketable securities

5,906

(6,833
)
Loss on extinguishment of debt

3,051

-

Other

179

(71
)
Changes in assets and liabilities, net of effect from purchases and sales of businesses:

Decrease in receivables

152,622

138,942

(Increase) in inventory

(80,686
)

(121,095
)
Decrease in prepaid expenses and other current and long-term assets

11,593

14,307

(Decrease) in accounts payable

(166,951
)

(112,888
)
(Decrease) in accrued compensation and benefits

(32,503
)

(45,873
)
Increase (decrease) in accrued losses

1,578

(11,001
)
(Decrease) in other accrued liabilities

(20,952
)

(42,895
)
Other

5,716

(483
)
Cash Provided By Operating Activities

145,505

140,748

Cash Flows From Investing Activities:

Capital expenditures

(84,491
)

(72,769
)
Acquisition of businesses, net of cash acquired

(167,712
)

(59,991
)
Purchase of marketable securities

(16,644
)

(139,641
)
Proceeds from sales of marketable securities

67,550

97,624

Other

1,294

6,766

Cash (Used For) Investing Activities

(200,003
)

(168,011
)
Cash Flows From Financing Activities:

Additions to long-term and short-term debt

596,222

340,106

Reductions of long-term and short-term debt

(253,343
)

(264,051
)
Cash dividends

(135,535
)

(125,672
)
Shares repurchased and shares returned for taxes

(191,056
)

(15,065
)
Payments of acquisition-related contingent consideration

(3,598
)

(3,825
)
Other

(640
)

(1,911
)
Cash Provided By (Used For) Financing Activities

12,050

(70,418
)
Effect of Exchange Rate Changes on Cash and Cash Equivalents

(6,805
)

11,570

Net Change in Cash and Cash Equivalents

(49,253
)

(86,111
)
Cash and Cash Equivalents at Beginning of Period

244,422

350,497

Cash and Cash Equivalents at End of Period

$
195,169

$
264,386

Supplemental Disclosures of Cash Flows Information:

Cash paid during the period for:

Interest

$
70,548

$
69,239

Income Taxes, net of refunds

$
33,859

$
79,441

Supplemental Disclosures of Non-Cash Investing and Financing Activities:

Conversion of Debt to Equity

$
38,239

$
-

	Common Stock											Accumulated
	Number											Other						Total RPM
	of			Par/Stated			Paid-In		Treasury			Comprehensive			Retained			International			Noncontrolling			Total
	Shares			Value			Capital		Stock			Income (Loss)			Earnings			Inc. Equity			Interests			Equity
Balance at June 1, 2019		130,995		$	1,310		$	994,508	$	(437,290	)	$	(577,628	)	$	1,425,052		$	1,405,952		$	2,653		$	1,408,605
Net income		-			-			-		-			-			106,188			106,188			308			106,496
Other comprehensive (loss)		-			-			-		-			(23,625	)		-			(23,625	)		(31	)		(23,656	)
Dividends declared and paid ($0.35 per share)		-			-			-		-			-			(45,323	)		(45,323	)		-			(45,323	)
Other noncontrolling interest activity		-			-			-		-			-			-			-			(297	)		(297	)
Share repurchases under repurchase program		(1,656	)		(16	)		16		(100,000	)		-			-			(100,000	)		-			(100,000	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		330			3			6,557		(6,360	)		-			-			200			-			200
Balance at August 31, 2019		129,669		$	1,297		$	1,001,081	$	(543,650	)	$	(601,253	)	$	1,485,917		$	1,343,392		$	2,633		$	1,346,025
Net income		-			-			-		-			-			77,030			77,030			292			77,322
Other comprehensive (loss) income		-			-			-		-			24,546			-			24,546			51			24,597
Dividends declared and paid ($0.36 per share)		-			-			-		-			-			(46,717	)		(46,717	)		-			(46,717	)
Other noncontrolling interest activity		-			-			-		-			-			-			-			(368	)		(368	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		97			1			6,473		(4,033	)		-			-			2,441			-			2,441
Balance at November 30, 2019		129,766		$	1,298		$	1,007,554	$	(547,683	)	$	(576,707	)	$	1,516,230		$	1,400,692		$	2,608		$	1,403,300

	Common Stock												Accumulated
	Number												Other						Total RPM
	of			Par/Stated			Paid-In			Treasury			Comprehensive			Retained			International			Noncontrolling			Total
	Shares			Value			Capital			Stock			Income (Loss)			Earnings			Inc. Equity			Interests			Equity
Balance at June 1, 2018		133,647		$	1,336		$	982,067		$	(236,318	)	$	(459,048	)	$	1,342,736		$	1,630,773		$	2,765		$	1,633,538
Cumulative-effect adjustment upon adoption of ASU 2014-09		-			-			-			-			-			(2,833	)		(2,833	)		-			(2,833	)
Net income		-			-			-			-			-			69,764			69,764			422			70,186
Other comprehensive (loss)		-			-			-			-			(33,978	)		-			(33,978	)		(258	)		(34,236	)
Dividends declared and paid ($0.32 per share)		-			-			-			-			-			(42,715	)		(42,715	)		-			(42,715	)
Other noncontrolling interest activity		-			-			-			-			-			-			-			3			3
Share repurchases under repurchase program		(103	)		(1	)		1			(6,994	)		-			-			(6,994	)		-			(6,994	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		(136	)		(1	)		10,018			(13,587	)		-			-			(3,570	)		-			(3,570	)
Balance at August 31, 2018		133,408		$	1,334		$	992,086		$	(256,899	)	$	(493,026	)	$	1,366,952		$	1,610,447		$	2,932		$	1,613,379
Net income (loss)		-			-			-			-			-			49,224			49,224			(51	)		49,173
Other comprehensive (loss)		-			-			-			-			(8,074	)		-			(8,074	)		91			(7,983	)
Dividends declared and paid ($0.35 per share)		-			-			-			-			-			(46,481	)		(46,481	)		-			(46,481	)
Other noncontrolling interest activity		-			-			-			-			-			-			-			567			567
Share repurchases under repurchase program		(1,145	)		(11	)		11			(74,998	)		-			-			(74,998	)		-			(74,998	)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes		274			2			7,277			(2,082	)		-			-			5,197			-			5,197
Convertible bond redemption		599			6			(23,029	)		20,215			-			-			(2,808	)		-			(2,808	)
Balance at November 30, 2018		133,136		$	1,331		$	976,345		$	(313,764	)	$	(501,100	)	$	1,369,695		$	1,532,507		$	3,539		$	1,536,046

The accompanying ~~notes~~Notes to ~~consolidated financial statements~~Consolidated Financial Statements are an integral part of these statements.

Common Stock

Accumulated

Number

Other

Total RPM

of

Par/Stated

Paid-In

Treasury

Comprehensive

Retained

International

Noncontrolling

Total

Shares

Value

Capital

Stock

Income (Loss)

Earnings

Inc. Equity

Interests

Equity

Balance at June 1, 2018

133,647

$
1,336

$
982,067

$
(236,318
)

$
(459,048
)

$
1,342,736

$
1,630,773

$
2,765

$
1,633,538

Cumulative-effect adjustment upon adoption of ASU 2014-09

-

-

-

-

-

(2,834
)

(2,834
)

-

(2,834
)
Net income

-

-

-

-

-

69,764

69,764

422

70,186

Other comprehensive (loss)

-

-

-

-

(33,978
)

-

(33,978
)

(258
)

(34,236
)
Dividends paid ($0.32 per share)

-

-

-

-

-

(42,714
)

(42,714
)

-

(42,714
)
Other noncontrolling interest activity

-

-

-

-

-

-

-

3

3

Share repurchases under repurchase program

(103
)

(1
)

1

(6,994
)

-

-

(6,994
)

-

(6,994
)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes

(136
)

(1
)

10,018

(13,587
)

-

-

(3,570
)

-

(3,570
)
Balance at August 31, 2018

133,408

1,334

992,086

(256,899
)

(493,026
)

1,366,952

1,610,447

2,932

1,613,379

Net income (loss)

-

-

-

-

-

49,224

49,224

(51
)

49,173

Other comprehensive (loss) income

-

-

-

-

(8,074
)

-

(8,074
)

91

(7,983
)
Dividends paid ($0.35 per share)

-

-

-

-

-

(46,481
)

(46,481
)

-

(46,481
)
Other noncontrolling interest activity

-

-

-

-

-

-

-

567

567

Share repurchases under repurchase program

(1,145
)

(11
)

11

(74,998
)

-

-

(74,998
)

-

(74,998
)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes

274

2

7,277

(2,082
)

-

-

5,197

-

5,197

Convertible bond redemption

599

6

(23,029
)

20,215

-

-

(2,808
)

-

(2,808
)
Balance at November 30, 2018

133,136

1,331

976,345

(313,764
)

(501,100
)

1,369,695

1,532,507

3,539

1,536,046

Net income

-

-

-

-

-

14,190

14,190

306

14,496

Other comprehensive income (loss)

-

-

-

-

23,443

-

23,443

(524
)

22,919

Dividends paid ($0.35 per share)

-

-

-

-

-

(46,340
)

(46,340
)

-

(46,340
)
Other noncontrolling interest activity

-

-

-

-

-

-

-

(248
)

(248
)
Share repurchases under repurchase program

(1,571
)

(16
)

16

(91,230
)

-

-

(91,230
)

-

(91,230
)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes

(21
)

-

7,997

(1,373
)

-

-

6,624

-

6,624

Balance at February 28, 2019

131,544

$
1,315

$
984,358

$
(406,367
)

$
(477,657
)

$
1,337,545

$
1,439,194

$
3,073

$
1,442,267

Common Stock

Accumulated

Number

Other

Total RPM

of

Par/Stated

Paid-In

Treasury

Comprehensive

Retained

International

Noncontrolling

Total

Shares

Value

Capital

Stock

Income (Loss)

Earnings

Inc. Equity

Interests

Equity

Balance at June 1, 2017

133,563

$
1,336

$
954,491

$
(218,222
)

$
(473,986
)

$
1,172,442

$
1,436,061

$
2,639

$
1,438,700

Net income

-

-

-

-

-

116,416

116,416

487

116,903

Other comprehensive income

-

-

-

-

44,604

-

44,604

31

44,635

Dividends paid ($0.30 per share)

-

-

-

-

-

(40,089
)

(40,089
)

-

(40,089
)
Other noncontrolling interest activity

-

-

-

-

-

-

-

(65
)

(65
)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes

(26
)

(1
)

7,465

(5,345
)

-

-

2,119

-

2,119

Balance at August 31, 2017

133,537

1,335

961,956

(223,567
)

(429,382
)

1,248,769

1,559,111

3,092

1,562,203

Net income

-

-

-

-

-

95,463

95,463

395

95,858

Other comprehensive (loss)

-

-

-

-

(5,216
)

-

(5,216
)

(72
)

(5,288
)
Dividends paid ($0.32 per share)

-

-

-

-

-

(42,790
)

(42,790
)

-

(42,790
)
Other noncontrolling interest activity

-

-

-

-

-

-

-

(647
)

(647
)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes

129

2

6,963

(6,780
)

-

-

185

-

185

Balance at November 30, 2017

133,666

1,337

968,919

(230,347
)

(434,598
)

1,301,442

1,606,753

2,768

1,609,521

Net income

-

-

-

-

-

40,227

40,227

361

40,588

Other comprehensive income

-

-

-

-

28,864

-

28,864

31

28,895

Dividends paid ($0.32 per share)

-

-

-

-

-

(42,793
)

(42,793
)

-

(42,793
)
Other noncontrolling interest activity

-

-

-

-

-

-

-

(516
)

(516
)
Stock compensation expense and other deferred compensation, shares granted less shares returned for taxes

64

-

3,268

(2,941
)

-

-

327

-

327

Balance at February 28, 2018

133,730

$
1,337

$
972,187

$
(233,288
)

$
(405,734
)

$
1,298,876

$
1,633,378

$
2,644

$
1,636,022

The accompanying unaudited ~~consolidated financial statements~~Consolidated Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles in the U.S. (“GAAP”) for interim financial information and the instructions to Form 10-Q. In our opinion, all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation have been included for the ~~three~~three- and ~~nine month~~six-month periods ended ~~February 28,~~November 30, 2019 and 2018. For further information, refer to the ~~consolidated financial statements~~Consolidated Financial Statements and ~~notes~~Notes included in our Annual Report on Form 10-K for the year ended May 31, ~~2018.~~2019.

Our financial statements include all of our majority-owned subsidiaries. We account for our investments in less-than-majority-owned joint ventures, for which we have the ability to exercise significant influence, under the equity method. Effects of transactions between related companies are eliminated in consolidation.

Noncontrolling interests are presented in our ~~consolidated financial statements~~Consolidated Financial Statements as if parent company investors (controlling interests) and other minority investors (noncontrolling interests) in partially-owned subsidiaries have similar economic interests in a single entity. As a result, investments in noncontrolling interests are reported as equity in our ~~consolidated financial statements.~~Consolidated Financial Statements. Additionally, our ~~consolidated financial statements~~Consolidated Financial Statements include 100% of a controlled subsidiary’s earnings, rather than only our share. Transactions between the parent company and noncontrolling interests are reported in equity as transactions between stockholders, provided that these transactions do not create a change in control.

Our business is dependent on external weather factors. Historically, we have experienced strong sales and net income in our first, second and fourth fiscal quarters comprising the ~~three month~~three-month periods ending August 31, November 30 and May 31, respectively, with weaker performance in our third fiscal quarter (December through February).

Effective June 1, 2018, we adopted Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” and all the related amendments included within Accounting Standards Codification 606 (“ASC 606”), using the modified retrospective method of adoption. Under the modified retrospective method, comparative periods are not restated. The new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. As a result of our adoption procedures, we determined that revenue recognition for our broad portfolio of products and services will remain largely unchanged. Accordingly, our adoption of the new standard did not have a material impact on our overall Consolidated Financial Statements. Refer to Note 15, “Revenue,” and Note 16, “Segment Information,” for additional information.

In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which provides amended guidance for certain aspects of recognition, measurement and disclosure of financial instruments. The main provisions of the standard impact how we account for changes in the fair value of our marketable securities currently classified as available-for-sale. Unrealized gains and losses on available-for-sale equity securities are required to be recognized in earnings rather than in other comprehensive income. Our adoption of the new standard during fiscal 2019 did not have a material effect on our overall Consolidated Financial Statements. See Note 4, “Marketable Securities,” and Note 7, “Investment Expense (Income), Net,” for additional information.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which increases lease transparency and comparability among organizations. Under the new standard, lessees ~~will be~~are required to recognize ~~all assets~~a right-of-use (“ROU”) asset representing our right to use an underlying asset and ~~liabilities arising from leases on~~a lease liability representing our obligation to make lease payments over the ~~balance sheet,~~lease term, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period financial statements and requires the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption.

We have ~~selected~~adopted the new leasing standard on the required effective date of June 1, 2019 using the alternative transition method as described above. Results for ~~adoption, which we will adopt~~reporting periods beginning on June 1, 2019 are presented under Topic 842, while prior period amounts continue to be reported and disclosed in accordance with our historical accounting treatment under Accounting Standards Codification (“ASC”) 840, “Leases (ASC 840).” We elected to apply the package of practical expedients permitted under the ASC 842 transition guidance. Accordingly, we did not reassess whether any expired or expiring contracts contain leases, lease classification between finance and operating leases, and the recognition of initial direct costs of leases commencing before the effective date. We also applied the practical expedient to not separate lease and non-lease components to existing leases, as well as new leases through transition. However, we did not elect the hindsight practical expedient to determine the lease term for existing leases. As a result of our adoption procedures, we have determined that the new guidance had a material impact on our Consolidated Balance Sheets and did not have a material effect on our Consolidated Statements of Income, Consolidated Statements of Cash Flows or our debt covenants. The effects of our transition to ASC 842 resulted in 0 cumulative adjustment to retained earnings in the period of adoption. Refer to Note 13, “Leases,” for additional information.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses,” which requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Additionally, the standard amends the current available-for-sale security other-than-temporary impairment model for debt securities. The guidance is effective for fiscal years beginning after December 15, 2019 and for interim periods therein. Early adoption is permitted beginning after December 15, 2018. We are ~~still evaluating~~currently reviewing the ~~impact~~provisions of this new pronouncement, but do not expect our adoption of this guidance ~~will~~to have a material impact on our Consolidated Financial Statements. ~~At a minimum, total assets and total liabilities will increase in the period the ASU is adopted.~~

In August 2018, the SEC issued Final Rule Release No. 33-10532, “Disclosure Update and Simplification,” which makes a number of changes meant to simplify interim disclosures. The new rule requires a presentation of changes in stockholders’ equity and noncontrolling interest in the form of a reconciliation, either as a separate financial statement or in the notes to the financial statements, for the current and comparative year-to-date interim periods. In July 2019, the FASB issued ASU 2019-07, “Codification Updates to SEC Sections – Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization and Miscellaneous Updates (SEC Update).” ASU 2019-07 codifies Final Rule Release No. 33-10532. The additional elements of this release did not have a material impact on our overall Consolidated Financial Statements. We adopted the new disclosure requirements in our Form 10-Q for the period ended February 28, 2019.

In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which makes a number of changes meant to add or clarify guidance on the classification of certain cash receipts and payments in the statement of cash flows. Our June 1, 2018 adoption of the new guidance, which we applied retrospectively to all periods presented, did not have a material impact on our Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations: Clarifying the Definition of a Business,” with the objective of adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (disposals) of assets or of businesses. We adopted the new guidance as of June 1, 2018 and do not expect this revised guidance to have a material impact on our Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” to eliminate step two from the goodwill impairment test in order to simplify the subsequent measurement of goodwill. The guidance is effective for fiscal years beginning after December 15, 2019. Early application is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Adoption of this guidance is not expected to have a material impact on our Consolidated Financial Statements.

In ~~March 2017,~~February 2018, the FASB issued ASU ~~2017-07, “Improving~~2018-02, “Income Statement (Topic 220), Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” which allows for an entity to reclassify the ~~Presentation~~tax effects of ~~Net Periodic Pension Cost~~the U.S. Tax Cuts and ~~Net Periodic Postretirement Benefit Cost,” which requires~~Jobs Act of 2017 (“Tax Act”) that ~~an employer report the service cost component~~were previously recorded in ~~the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period.~~accumulated comprehensive income to retained earnings. The ~~other components~~adoption of ~~net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Our~~this new guidance, effective June 1, ~~2018 adoption of the new guidance~~2019, did not have a material ~~impact~~effect on our Consolidated Financial ~~Statements.~~Statements as we did not elect the option to reclassify to retained earnings the tax effects resulting from the Tax Act that were previously recorded in accumulated other comprehensive income.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted upon issuance of the update. We do not expect our adoption of this guidance to have a material impact on our Consolidated Financial Statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20), Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans,” which makes a number of changes meant to add, modify or remove certain disclosure requirements associated with employers that sponsor defined benefit or other postretirement plans. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted for all entities and the amendments in this update are required to be applied on a retrospective basis to all periods presented. We are currently reviewing the provisions of this new pronouncement, but do not expect our adoption of this guidance ~~is not expected~~ to have a material impact on our Consolidated Financial Statements.

In ~~August 2018,~~December 2019, the FASB issued ASU ~~2018-15, “Intangible—Goodwill and Other- Internal-Use Software (Subtopic 350-40)~~2019-12, “Income Taxes (Topic 740), ~~Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.~~” ~~The update makes a number of changes meant to help entities evaluate~~which simplifies the accounting for ~~fees paid~~income taxes by ~~a customer~~removing certain exceptions to the general principles in ~~a cloud computing arrangement (hosting arrangement),~~Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by ~~providing guidance in determining when the arrangement includes a software license.~~clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2019. Our early~~2020. Early adoption of the amendments is permitted, including adoption in any interim period for which financial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective or prospective basis. We are currently reviewing the provisions of this new pronouncement, but do not expect our adoption of this ~~revised~~ guidance ~~as of June 1, 2018 did not~~to have a material impact on our Consolidated Financial Statements.

During the first quarter of fiscal 2020, we changed our method of accounting for shipping and handling costs, which we have identified as costs paid to third-party shippers for transporting products to customers. Under the new method of accounting, we include shipping costs in cost of sales, whereas previously, they were included in SG&A expense.

We believe that including these expenses in cost of sales is preferable, as it better aligns these costs with the related revenue in the gross profit calculation and is consistent with the practices of other industry peers. This change in accounting principle has been applied retrospectively, and the consolidated statements of income reflect the effect of this accounting principle change for all periods presented. This reclassification had no impact on income before income taxes, net income attributable to RPM International Inc. Stockholders, net income or earnings per share. The consolidated balance sheets, statements of comprehensive income, statements of stockholders’ equity, and statements of cash flows were not impacted by this accounting principle change.

The consolidated statements of income for the three and six months ended November 30, 2018 have been adjusted to reflect this change in accounting principle. The impact of the adjustment for the three and six months ended November 30, 2018 was an increase of $44.2 million and $88.9 million, respectively, to cost of sales and a corresponding decrease to SG&A expense.

We record restructuring charges associated with management-approved restructuring plans to either reorganize one or more of our business segments, or to remove duplicative headcount and infrastructure associated with our businesses. Restructuring charges can include severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities and consolidate operations, contract cancellation costs and other costs. Restructuring charges are recorded based upon planned employee termination dates and site closure and consolidation plans. The timing of associated cash payments is dependent upon the type of restructuring charge and can extend over a multi-year period. We record the short-term portion of our restructuring liability in Other Accrued Liabilities and the long-term portion, if any, in Other Long-Term Liabilities in our Consolidated Balance Sheets.

Between May and August 2018, we approved and implemented the initial phases of a multi-year restructuring plan, the 2020 Margin Acceleration Plan (“2020 MAP to Growth”). The initial phases of our 2020 MAP to Growth affected all of our reportable segments, as well as our corporate/nonoperating segment, and focused on margin improvement by simplifying business processes; reducing inventory categories and rationalizing SKUs; eliminating underperforming businesses; reducing headcount and working capital; and improving operating efficiency. The majority of the activities included in the initial phases of the restructuring activities have been completed.

During the second quarter ended November 30, 2018, we formally announced the final phases of our 2020 MAP to Growth. This multi-year restructuring is expected to increase operational efficiency while maintaining our entrepreneurial growth culture and will include three additional phases between September 2018 and December 2020. Our execution of the 2020 MAP to Growth will continue to drive the de-layering and simplification of management and businesses associated with group realignment. We will implement four center-led functional areas including manufacturing and operations; procurement and supply chain; information technology; and accounting and finance.

Our 2020 MAP to Growth will optimize our manufacturing facilities and will ultimately provide more efficient plant and distribution facilities. InTo date, in association with our 2020 MAP to Growth initiative, we have completed, or are in the ~~first phase~~process of ~~the restructuring we are implementing~~completing, the planned closure of ~~twelve~~18 plants and ~~seven~~23 warehouses. We also expect to incur additional severance and benefit costs as part of our planned closure of these facilities.

Throughout the additional phases of our 2020 MAP to Growth initiative, we will continue to assess and find areas of improvement and cost savings. As such, the final implementation of the aforementioned phases and total expected costs are subject to change. In addition to the announced plan, we have continued to broaden the scope of our 2020 MAP to Growth initiative, specifically in consolidation of the general and administrative areas, potential outsourcing, as well as additional future plant closures and consolidations; the estimated costs of which have not yet been finalized. The current total expected costs associated with this plan are outlined in the table below and ~~decreased~~increased by approximately ~~$10.9~~$4.6 million compared to our previous estimate, primarily attributable to ~~a reduction~~increases in expected ~~facility closure~~severance and ~~other related costs within our industrial, consumer, and specialty segments. These decreases were partially offset by increases in the expected severance~~benefit charges ~~within our industrial and specialty segments.~~of $4.6 million. Most activities under our 2020 MAP to Growth are anticipated to be completed by the end of calendar year 2020.

AFollowing is a summary of the charges recorded in connection with restructuring by reportable ~~segment during fiscal 2019 is as follows:~~segment:

	Three Months Ended			Nine Months Ended		Cumulative Costs		Total Expected		Three Months Ended		Six Months Ended		Cumulative Costs		Total Expected
(in thousands)	February 28, 2019			February 28, 2019		to Date		Costs		November 30, 2019		November 30, 2019		to Date		Costs

Industrial Segment:
Construction Products Group (“CPG”) Segment:
Severance and benefit costs (a)	$	1,263		$	11,035	$	13,204	$	15,783	$	1,447	$	1,607	$	12,836	$	22,146
Facility closure and other related costs		3,228			4,531		5,576		9,815		110		798		3,767		4,597
Other asset write-offs		(79	)		648		2,021		3,012		39		39		1,629		2,151
Total Charges	$	4,412		$	16,214	$	20,801	$	28,610	$	1,596	$	2,444	$	18,232	$	28,894

Consumer Segment:
Performance Coatings Group (“PCG”) Segment:
Severance and benefit costs (b)	$	620		$	2,450	$	8,102	$	8,102	$	431	$	2,931	$	9,344	$	14,765
Facility closure and other related costs		1,078			1,248		6,387		8,817		636		745		4,219		6,638
Other asset write-offs		996			998		998		1,279		172		172		523		528
Total Charges	$	2,694		$	4,696	$	15,487	$	18,198	$	1,239	$	3,848	$	14,086	$	21,931

Specialty Segment:
Consumer Group (“Consumer”) Segment:
Severance and benefit costs (c)	$	1,512		$	5,445	$	5,445	$	6,351	$	780	$	1,547	$	8,925	$	12,424
Facility closure and other related costs		31			31		31		2,280		344		860		7,552		9,352
Other asset write-offs		5			8		8		256		-		-		25		25
Total Charges	$	1,548		$	5,484	$	5,484	$	8,887	$	1,124	$	2,407	$	16,502	$	21,801

Specialty Products Group (“Specialty”) Segment:
Severance and benefit costs (d)										$	48	$	414	$	5,750	$	10,640
Facility closure and other related costs											731		2,190		3,434		6,697
Other asset write-offs											40		104		1,107		1,334
Total Charges										$	819	$	2,708	$	10,291	$	18,671

Corporate/Other Segment:
Severance and benefit costs (d)	$	25		$	10,085	$	12,221	$	12,657
Severance and benefit costs										$	23	$	16	$	12,136	$	12,136
Total Charges	$	25		$	10,085	$	12,221	$	12,657	$	23	$	16	$	12,136	$	12,136

Consolidated:
Severance and benefit costs	$	3,420		$	29,015	$	38,972	$	42,893	$	2,729	$	6,515	$	48,991	$	72,111
Facility closure and other related costs		4,337			5,810		11,994		20,912		1,821		4,593		18,972		27,284
Other asset write-offs		922			1,654		3,027		4,547		251		315		3,284		4,038
Total Charges	$	8,679		$	36,479	$	53,993	$	68,352	$	4,801	$	11,423	$	71,247	$	103,433

A summary of the activity in the restructuring reserves related to our 2020 MAP to Growth is as follows:

(in thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total			Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total
Balance at November 30, 2018	$	10,427		$	2,535		$	-			12,962
Balance at August 31, 2019													$	2,946		$	9,430		$	-		$	12,376
Additions charged to expense		3,420			4,337			922			8,679			2,729			1,821			251			4,801
Cash payments charged against reserve		(4,975	)		(1,872	)		-			(6,847	)		(2,109	)		(5,016	)		-			(7,125	)
Non-cash charges included above (e)		-			(6	)		(922	)		(928	)
Balance at February 28, 2019	$	8,872		$	4,994		$	-		$	13,866
Non-cash charges included above (j)														-			(155	)		(251	)		(406	)
Balance at November 30, 2019													$	3,566		$	6,080		$	-		$	9,646

(in thousands)													Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total
Balance at June 1, 2019													$	4,837		$	7,857		$	-			12,694
Additions charged to expense														6,515			4,593			315			11,423
Cash payments charged against reserve														(7,786	)		(5,350	)		-			(13,136	)
Non-cash charges included above (j)														-			(1,020	)		(315	)		(1,335	)
Balance at November 30, 2019													$	3,566		$	6,080		$	-		$	9,646

(in thousands)													Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total
Balance at August 31, 2018													$	10,960		$	5,364		$	-		$	16,324
Additions charged to expense														6,533			1,037			154			7,724
Cash payments charged against reserve														(6,013	)		(1,330	)		-			(7,343	)
Non-cash charges included above (j)														(1,053	)		(2,536	)		(154	)		(3,743	)
Balance at November 30, 2018													$	10,427		$	2,535		$	-		$	12,962

(in thousands)	Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total			Severance and Benefits Costs			Facility Closure and Other Related Costs			Other Asset Write-Offs			Total
Balance at June 1, 2018	$	9,957		$	6,184		$	1,373		$	17,514		$	9,957		$	6,184		$	1,373		$	17,514
Additions charged to expense		29,015			5,810			1,654			36,479			25,595			1,473			732			27,800
Cash payments charged against reserve		(23,563	)		(3,620	)					(27,183	)		(18,588	)		(1,748	)		-			(20,336	)
Non-cash charges included above (e)		(6,537	)		(3,380	)		(3,027	)		(12,944	)
Balance at February 28, 2019	$	8,872		$	4,994		$	-		$	13,866
Non-cash charges included above (j)														(6,537	)		(3,374	)		(2,105	)		(12,016	)
Balance at November 30, 2018													$	10,427		$	2,535		$	-		$	12,962

In connection with our 2020 MAP to Growth, during the ~~third~~second quarter of fiscal 2020, we incurred approximately $6.3 million and $1.0 million of inventory-related charges at our Consumer and PCG segments, respectively. During the first half of fiscal 2020, we incurred $7.2 million, $3.1 million and $0.3 million of inventory-related charges at our Consumer, PCG, and CPG segments, respectively. During the second quarter of fiscal 2019, we incurred approximately ~~$1.1~~$2.3 million, $1.0 million and ~~$0.8~~$0.3 million of inventory-related charges at our ~~industrial~~PCG, Consumer and ~~consumer~~CPG segments, respectively. During the first ~~nine months~~half of fiscal 2019, we incurred ~~approximately $8.2~~$6.6 million, $1.3 million and ~~$2.1~~$0.5 million of inventory-related charges at our ~~industrial~~PCG, Consumer and ~~consumer~~CPG segments, respectively. The fiscal 2019 inventory-related charges ~~are~~were partially offset by a favorable adjustment of approximately $0.2 million to the ~~previous~~fiscal 2018 inventory write-off at our ~~consumer~~Consumer segment. All of the aforementioned inventory-related charges are recorded in cost of sales in our Consolidated Statements of Income. These inventory charges were the result of product line and SKU rationalization initiatives in connection with our overall plan of restructuring.

~~The following tables summarize available-for-sale marketable securities held at February 28, 2019 and May 31, 2018 by asset type:~~

Marketable securities, included in other current and long-term assets totaling $7.6 million and $16.2 million at February 28, 2019, respectively, and included in other current and long-term assets totaling $97.4 million and $70.7 million at May 31, 2018, respectively, are composed of available-for-sale securities and are reported at fair value. We carry a portion of our marketable securities portfolio in long-term assets since they are generally held for the settlement of our general and product liability insurance claims processed through our wholly owned captive insurance subsidiaries.

Marketable securities are composed of available-for-sale debt securities and are reported at fair value. Realized gains and losses on sales of investments are recognized in net income on the specific identification basis. Changes in the fair values of securities that are considered temporary are recorded as unrealized gains and losses, net of applicable taxes, in accumulated other comprehensive (loss) within stockholders’ equity. Other-than-temporary declines in market value from original cost are reflected in investment income, net in the period in which the unrealized losses are deemed other than temporary. In order to determine whether other-than-temporary declines in market value have occurred, the duration of the decline in value and our ability to hold the investment are considered in conjunction with an evaluation of the strength of the underlying collateral and the extent to which the investment’s amortized cost or cost, as appropriate, exceeds its related market value.

During fiscal 2019, we adopted ASU 2016-01, “Recognition and Measurement of Financial Assets and Liabilities,” which requires gains and losses on marketable equity securities to be recognized in earnings rather than in other comprehensive income. Prior to adoption, equity securities were included in our available-for-sale portfolio and unrealized changes in fair value were recognized through other comprehensive (loss) income until realized, at which point we recorded a gain or loss on sale. As of February 28, 2019, we held approximately $89.2 million in equity securities. Additionally, as of February 28, 2019 and May 31, 2018, we held approximately $12.4 million and $9.9 million, respectively, in trading securities in relation to our deferred compensation plan.

Gross realized gains and losses on sales of marketable securities are included in investment (income), net in the Consolidated Statements of Income. Refer to Note 7, “Investment Expense (Income), Net,” for further details.

Summarized below are the available-for-sale securities we held at February 28, 2019 and May 31, 2018 that were in an unrealized loss position and that were included in accumulated other comprehensive (loss), aggregated by the length of time the investments had been in that position:

We have reviewed all of the securities included in the table above and have concluded that we have the ability and intent to hold these investments until their cost can be recovered, based upon the severity and duration of the decline. Therefore, we did not recognize any other-than-temporary impairment losses on these investments. The unrealized losses generally relate to investments whose fair values at February 28, 2019 were less than 15% below their original cost. From time to time, we may experience significant volatility in general economic and market conditions. If we were to experience unrealized losses that were to continue for longer periods of time, or arise to more significant levels of unrealized losses within our portfolio of investments in marketable securities in the future, we may recognize additional other-than-temporary impairment losses. As such, we continue to closely evaluate the status of our investments and our ability and intent to hold these investments.

The net carrying values of debt securities at February 28, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.

Financial instruments recorded in the balance sheet include cash and cash equivalents, trade accounts receivable, marketable securities, notes and accounts payable, and debt.

An allowance for anticipated uncollectible trade receivable amounts is established using a combination of specifically identified accounts to be reserved, and a reserve covering trends in collectibility. These estimates are based on an analysis of trends in collectibility and past experience, but are primarily made up of individual account balances identified as doubtful based on specific facts and conditions. Receivable losses are charged against the allowance when we confirm uncollectibility.

All derivative instruments are recognized in our Consolidated Balance Sheets and measured at fair value. Changes in the fair values of derivative instruments that do not qualify as hedges and/or any ineffective portion of hedges are recognized as a gain or (loss) in our Consolidated Statements of Income in the current period. Changes in the fair value of derivative instruments used effectively as cash flow hedges are recognized in other comprehensive income (loss), along with the change in the value of the hedged item. We do not hold or issue derivative instruments for speculative purposes.

The valuation techniques utilized for establishing the fair values of assets and liabilities are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect management’s market assumptions. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value, as follows:

Level 2 Inputs — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

The following tables present our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.

(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at February 28, 2019			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at November 30, 2019
Available-for-sale debt securities:
U.S. Treasury and other government	$	-	$	23,335	$	-		$	23,335		$	-	$	24,209	$	-		$	24,209
Corporate bonds				449					449					471					471
Total available-for-sale debt securities		-		23,784		-			23,784			-		24,680		-			24,680
Trading and other equity securities:
Mutual funds - foreign				32,844					32,844					36,251					36,251
Mutual funds - domestic				68,754					68,754					75,037					75,037
Total trading and other equity securities		-		101,598		-			101,598			-		111,288		-			111,288
Contingent consideration						(21,815	)		(21,815	)						(15,748	)		(15,748	)
Total	$	-	$	125,382	$	(21,815	)	$	103,567		$	-	$	135,968	$	(15,748	)	$	120,220

(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at May 31, 2018			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Fair Value at May 31, 2019
Available-for-sale debt securities:
U.S. Treasury and other government	$	-	$	23,049	$	-		$	23,049		$	-	$	24,547	$	-		$	24,547
Corporate bonds				467					467					462					462
Total available-for-sale debt securities												-		25,009		-			25,009
Trading and other equity securities:
Mutual funds - foreign				47,410					47,410					32,082					32,082
Mutual funds - domestic				107,017					107,017					67,739					67,739
Total trading and other equity securities												-		99,821		-			99,821
Contingent consideration						(17,998	)		(17,998	)						(21,551	)		(21,551	)
Total	$	-	$	177,943	$	(17,998	)	$	159,945		$	-	$	124,830	$	(21,551	)	$	103,279

Our investments in available-for-sale debt securities and trading and other equity securities ~~and~~ are valued using a market approach. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors, including the type of instrument, whether the instrument is actively traded and other characteristics particular to the transaction. For most of our financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment.

The contingent consideration represents the estimated fair value of the additional variable cash consideration payable in connection with recent acquisitions that is contingent upon the achievement of certain performance milestones. We estimated the fair value using expected future cash flows over the period in which the obligation is expected to be settled, and applied a discount rate that appropriately captures a market participant's view of the risk associated with the obligation, which are considered to be Level 3 inputs. During the first ~~nine months~~half of fiscal 2020, we paid approximately $5.9 million for settlements of contingent consideration obligations relating to certain performance milestones that were established in prior periods and achieved during the current period. During the first half of fiscal 2019, we paid approximately $4.7 million for settlements of contingent consideration obligations relating to certain performance milestones that were established in prior periods and achieved during ~~the current period,~~last year’s first half and recorded an increase in the accrual for approximately $2.7 million ~~and $5.8 million~~ related to fair value ~~adjustments and new acquisitions, respectively. During~~adjustments. In the ~~first nine months~~Consolidated Statements of fiscal 2018, we paid approximately $3.8 million for settlements of contingent consideration obligations relating to certain performance milestones that were established in prior periods and achieved during last year’s first nine months, and we increased our accrual by $0.5 million for fair value adjustments. These amounts are reported inCash Flows, payments of acquisition-related contingent consideration for the amount recognized at fair value as of the acquisition date are reported in cash flows from ~~operations and from~~ financing activities, while payments of contingent consideration in ~~the Consolidated Statements~~excess of ~~Cash Flows.~~fair value are reported in cash flows from operating activities.

The carrying value of our current financial instruments, which include cash and cash equivalents, marketable securities, trade accounts receivable, accounts payable and short-term debt approximates fair value because of the short-term maturity of these financial instruments. At ~~February 28,~~November 30, 2019 and May 31, ~~2018,~~2019, the fair value of our long-term debt was estimated using active market quotes, based on our current incremental borrowing rates for similar types of borrowing arrangements, which are ~~considered to be~~ Level 2 inputs. Based on the analysis performed, the fair value and the carrying value of our financial instruments and long-term debt as of ~~February 28,~~November 30, 2019 and May 31, ~~2018~~2019 are as follows:

	At February 28, 2019				At November 30, 2019
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	195,169	$	195,169	$	208,173	$	208,173
Marketable equity securities		89,234		89,234		97,798		97,798
Marketable debt securities		23,784		23,784		24,680		24,680
Long-term debt, including current portion		2,524,218		2,464,343		2,523,475		2,616,790

	At May 31, 2018				At May 31, 2019
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	244,422	$	244,422	$	223,168	$	223,168
Marketable equity securities		144,555		144,555		87,525		87,525
Marketable debt securities		23,516		23,516		25,009		25,009
Long-term debt, including current portion		2,174,144		2,215,458		2,525,908		2,526,817

We are exposed to market risks, such as changes in foreign currency exchange rates and interest rates. To manage the volatility related to these exposures, from time to time, we enter into various derivative transactions. We use various types of derivative instruments including forward contracts and swaps. We formally assess, designate and document, as a hedge of an underlying exposure, each qualifying derivative instrument that will be accounted for as an accounting hedge at inception. Additionally, we assess, both at inception and at least quarterly thereafter, whether the financial instruments used in the hedging transaction are effective at offsetting changes in either the fair values or cash flows of the underlying exposures.

In October 2017, as a means of mitigating the impact of currency fluctuations on our Euro investments in foreign entities, we executed a fair value hedge and ~~two~~2 cross currency swaps, in which we will pay variable rate interest in Euros and receive fixed rate interest in U.S. Dollars with a combined notional amount of approximately €85.25 million ($100 million U.S. Dollar equivalent), and which have a maturity date of November 2022. This effectively converts a portion of our U.S. Dollar denominated fixed-rate debt to Euro denominated variable rate debt. The fair value hedge is recognized at fair value in our Consolidated Balance Sheets, while changes in the fair value of the hedge are recognized in interest expense in our Consolidated Statements of Income. We designated the swaps as net investment hedges of our net investment in our European operations under ASU 2017-12 and applied the spot method to these hedges. The changes in fair value of the derivative instruments that are designated and qualify as hedges of net investments in foreign operations are recognized in accumulated other comprehensive income (“AOCI”) to offset the changes in the values of the net investments being hedged. Amounts released from AOCI and reclassified into interest expense did not have a material impact on our Consolidated Financial Statements for any period presented.

We have designated certain forward contracts as hedging instruments pursuant to ASC No. 815 (“ASC 815”), “Derivatives and Hedging.” Changes in the fair value of these highly effective hedges are recorded as a component of AOCI. During the period in which a forecasted transaction affects earnings, amounts previously recorded as a component of AOCI are reclassified into earnings as a component of cost of sales. Amounts released from AOCI and reclassified into earnings did not have a material impact on our Consolidated Financial Statements for any period presented. As of May 31, 2018 the notional amount of the forward contracts held to sell international currencies was $8.7 million, while there was no amount held at February 28, 2019.

At ~~February 28,~~November 30, 2019, and May 31, 2019, we held ~~one~~1 foreign currency forward contract designed to reduce our exposure to changes in the cash flows of intercompany foreign-currency-denominated loans related to changes in foreign currency exchange rates by fixing the functional currency cash flows. The contract has not been designated as a hedge; therefore, the changes in fair value of the derivative are recognized in earnings as a component of ~~other (income) expense.~~selling, general and administrative expenses (“SG&A”). Amounts recognized in earnings did not have a material impact on our Consolidated Financial Statements for any period presented. As of ~~February 28,~~November 30, 2019 and May 31, ~~2018,~~2019, the notional amounts of the forward contract held to purchase foreign currencies was ~~$33.6~~$61.0 million and ~~$147.4~~$38.7 million, respectively.

All of our derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy. We determine the fair value of our derivatives based on valuation methods, which project future cash flows and discount the future amounts to present value using market based observable inputs, including interest rate curves, foreign currency rates, as well as future and basis point spreads, as applicable.

The fair values of qualifying and non-qualifying instruments used in hedging transactions as of ~~February 28,~~November 30, 2019 and May 31, ~~2018~~2019 are as follows:

(in thousands)		Fair Value					Fair Value
Derivatives Designated as Hedging Instruments	Balance Sheet Location	February 28, 2019		May 31, 2018		Balance Sheet Location	November 30, 2019		May 31, 2019
Assets:
Foreign Currency Exchange (Cash Flow)	Other Current Assets	$	-	$	133
Interest Rate Swap (Fair Value)						Other Current Assets	$	239	$	513
Cross Currency Swap (Net Investment)	Other Current Assets		2,099		2,580	Other Current Assets		2,198		2,482
Cross Currency Swap (Net Investment)	Other Assets (Long-Term)		3,771		1,986	Other Assets (Long-Term)		5,136		6,163
Interest Rate Swap (Fair Value)						Other Assets (Long-Term)		882		-
Liabilities:
Interest Rate Swap (Fair Value)	Other Accrued Liabilities		459		441	Other Accrued Liabilities		-		230
Cross Currency Swap (Net Investment)	Other Long-Term Liabilities		3,201		5,293	Other Accrued Liabilities		82		-
Interest Rate Swap (Fair Value)	Other Long-Term Liabilities		1,377		2,634
Cross Currency Swap (Net Investment)						Other Long-Term Liabilities		1,445		4,276

(in thousands)

Fair Value

Derivatives Not Designated as Hedging Instruments

Balance Sheet Location

February 28, 2019

May 31, 2018

Balance Sheet Location

November 30, 2019

May 31, 2019

Assets:

Foreign Currency Exchange

Other Current Assets

114

Liabilities:

Foreign Currency Exchange

Other Accrued Liabilities

2,985

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
(In thousands)	2019			2018			2019			2018			2019			2018			2019			2018
Interest (income)	$	(1,076	)	$	(1,454	)	$	(2,808	)	$	(3,645	)	$	(1,429	)	$	(828	)	$	(2,776	)	$	(1,732	)
Net (gain) loss on marketable securities		(1,683	)		(1,935	)		6,451			(6,833	)		(6,939	)		8,520			(10,479	)		8,134
Dividend (income)		(1,967	)		(2,082	)		(3,769	)		(3,185	)		(437	)		(659	)		(935	)		(1,802	)
Investment (income), net	$	(4,726	)	$	(5,471	)	$	(126	)	$	(13,663	)
Investment (income) expense, net													$	(8,805	)	$	7,033		$	(14,190	)	$	4,600

Of the $6.9 million in net gains on marketable securities recognized during the second quarter of fiscal 2020, approximately $6.0 million related to unrealized gains on marketable equity securities and approximately $1.0 million was related to unrealized gains on trading securities. Additionally, of the $10.5 million in net gains on marketable securities recognized during the first half of fiscal 2020, approximately $8.9 million related to unrealized gains on marketable equity securities and $1.7 million in unrealized gains on trading securities.

During the ~~third~~second quarter of fiscal 2019, we recognized gross realized ~~gains and~~ losses on sales of ~~available-for-sale~~marketable securities of ~~$0.1 million and $2.2 million, respectively. Also during the current quarter, we recognized gross realized gains on sales of trading securities of $0.2~~$1.0 million and unrealized losses on trading securities of ~~$0.1~~$1.0 million. For the first ~~nine months~~half of fiscal 2019, we recognized realized gains and losses on sales of ~~available-for-sale securities of $0.3 million and $3.4 million, respectively, realized gains on trading~~ securities of $0.2 million and $1.2 million, respectively, and unrealized gains and losses on trading securities of ~~$0.7 million.~~$0.5 million and $1.1 million, respectively. During the three and ~~nine-month~~six-month periods ended ~~February 28, 2019, we recognized unrealized gains of $3.7 million and unrealized losses of $2.9 million marketable equity securities.~~

~~During the third quarter of fiscal~~November 30, 2018, we recognized ~~gross realized gains and~~$6.5 million in unrealized losses on ~~sales of~~ marketable securities of $2.6 million and $0.7 million, respectively. For the first nine months of fiscal 2018, we recognized gross realized gains and losses on sales of marketable securities of $8.6 million and $1.8 million, respectively. equity securities.

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
(In thousands)	2019			2018			2019			2018			2019			2018			2019			2018
Royalty expense, net	$	88		$	148		$	154		$	238
(Income) related to unconsolidated equity affiliates		(133	)		(313	)		(299	)		(830	)
Royalty (income) expense, net													$	(360	)	$	63		$	(94	)	$	66
(Income) loss related to unconsolidated equity affiliates														(65	)		(48	)		25			(166	)
Pension non-service costs		372			-			1,146			-			1,550			346			2,979			774
Loss on extinguishment of debt (a)					-			3,051			-			-			3,051			-			3,051
Other expense (income), net	$	327		$	(165	)	$	4,052		$	(592	)
Loss on divestiture (b)														826			-			826			-
Other expense, net													$	1,951		$	3,412		$	3,736		$	3,725

On December 22, 2017 the Tax Cuts and Jobs Act (“Act”) was enacted into law. The income tax effects of changes in tax laws are recognized in the period when enacted. The Act provides for numerous significant tax law changes and modifications with varying effective dates. Generally, the more significant provisions of the Act that impacted us for the year ended May 31, 2018 included the reduction in the corporate income tax rate from 35% to 21%, the creation of a territorial tax system (with a one-time mandatory tax on previously deferred foreign earnings) and allowance for immediate capital expensing of certain qualified property. The corporate tax rate reduction was effective for RPM as of January 1, 2018 and, accordingly, reduced our fiscal year 2018 federal statutory rate to a blended rate of approximately 29.2%. The significant provisions of the Act which impact us for fiscal 2019 include the full federal statutory rate reduction to 21% and the repeal of the domestic production activities deduction. Also effective for fiscal 2019 are provisions of the Act that subject us to current U.S. tax ~~on global intangible low-taxed income (“GILTI”) earned by certain foreign subsidiaries and allows a benefit for foreign-derived intangible income (“FDII”).~~

Subsequent to the enactment of the Act, the SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act’s enactment date for companies to complete the applicable accounting under ASC 740. In accordance with SAB 118 and based on the information available as of May 31, 2018, we recorded a net provisional income tax expense of $7.3 million in accordance with the applicable provisions of the Act. The net provisional income tax expense was comprised of a benefit of $15.7 million related to the provisional re-measurement of our U.S. deferred tax assets and liabilities at the reduced U.S. corporate tax rates, a provisional expense of $67.9 million for the transition tax on unremitted earnings from foreign subsidiaries, and a provisional benefit of $44.9 million for the partial reversal of existing deferred tax liabilities recorded for the estimated tax cost associated with unremitted foreign earnings not considered permanently reinvested.

During our fiscal 2019 third quarter, we completed our assessment of the accounting for the impact of Act, which included analysis based on related legislative updates and technical interpretations of the Act. As a result, and consistent with SAB 118, during the three months ended February 28, 2019 we recorded a net discrete income tax benefit of $8.1 million, which was comprised of a $6.3 million benefit for the re-measurement of certain U.S. deferred tax assets and liabilities and a $1.8 million benefit resulting from the reduction of the transition tax on unremitted earnings from foreign subsidiaries. No other SAB 118 adjustments for the impact of the Act were recorded this fiscal year.

We have estimated the tax impact related to GILTI and FDII for the year ended May 31, 2019 and included such impact in the estimated annual effective tax rate. The impact of GILTI and FDII was not material for the nine months ended February 28, 2019.

The effective income tax ~~benefit~~ rate of ~~224.7%~~24.0% for the three months ended ~~February 28,~~November 30, 2019 compares to the effective income tax ~~benefit~~ rate of ~~17.0%~~26.2% for the three months ended ~~February 28,~~November 30, 2018. The effective income tax ~~benefit rate of 224.7%~~rates for the three months ended ~~February 28,~~November 30, 2019 ~~reflects~~and 2018 reflect variances from the 21% statutory rate due primarily to the ~~favorable~~unfavorable impact of ~~$12.7 million of~~state and local income taxes and the net ~~discrete~~tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits ~~recorded during~~related to equity compensation. Additionally, the quarter and the amplified impact of those tax benefits on the relatively low level of pre-tax earnings. The $12.7 million net discrete benefits recorded are primarily comprised of the net $8.1 million benefit resulting from completion of our SAB 118 accounting for the impact of the Act and the release certain income tax reserves for uncertain tax positions. The 17.0% effective income tax ~~benefit~~ rate for the three months ended ~~February 28, 2018~~November 30, 2019 reflects ~~variances from the blended fiscal year 2018 statutory rate of 29.2% due primarily to the cumulative~~ favorable ~~impact of the statutory rate reduction from 35% to 29.2% which occurred during that prior period. Additionally, the 17.0% effective income tax benefit rate reflects a $1.4 million discrete tax benefit~~adjustments related to ~~an adjustment to the net provisional estimate of the Act as recorded in the prior period~~certain valuation allowances and ~~consistent with SAB 118.~~reserves for uncertain tax positions.

The effective income tax rate of ~~17.8%~~24.8% for the ~~nine~~six months ended ~~February 28,~~November 30, 2019 compares to the effective income tax rate of ~~15.3%~~24.7% for the ~~nine~~six months ended ~~February 28,~~November 30, 2018. The effective income tax ~~rate~~rates for the ~~nine~~six months ended ~~February 28,~~November 30, 2019 ~~reflects~~and 2018 reflect variances from the 21% statutory rate due primarily to $16.5 million of net discrete tax benefits, which are comprised of the $12.7 million net tax benefit described above with the remaining balance being recorded in the prior quarters of this fiscal year. These discrete tax benefits were partially offset primarily by the unfavorable impact of state and local income taxes and ~~incremental valuation allowances associated with certain~~the net tax on foreign ~~net operating losses. The effective~~subsidiary income ~~tax rate for the nine months ended February 28, 2018 reflects variances~~resulting from the ~~29.2% statutory rate primarily due to $27.0 million in discrete~~global intangible low-taxed income provisions, partially offset by tax benefits ~~recorded in connection with foreign tax credit planning and the implementation of a foreign legal entity restructuring and corresponding planning strategy.~~related to equity compensation.

Our deferred tax liability for unremitted foreign earnings was ~~adjusted to $19.9~~$18.8 million as of ~~May 31, 2018. The $19.9 million deferred tax liability represented~~November 30, 2019, which represents our estimate of the foreign tax cost associated with the deemed remittance of ~~$549.8~~$414.7 million of foreign earnings that are not considered to be permanently reinvested. As of February 28, 2019, the amount of these earnings have been modified to approximately $423.4 million and the related deferred tax liability, which represents the estimated tax cost to repatriate these earnings, was adjusted to $19.2 million to reflect the impact of foreign exchange. The reduction to the earnings amounts no longer permanently reinvested is due principally to distributions made during this fiscal year, which were not subject to foreign withholding taxes.

We have not provided for foreign withholding or income taxes on the remaining foreign subsidiaries’ undistributed earnings because such earnings have been retained and reinvested by the subsidiaries as of ~~February 28,~~November 30, 2019. Accordingly, no0 provision has been made for foreign withholding or income taxes, which may become payable if the remaining undistributed earnings of foreign subsidiaries were remitted to us as dividends.

	February 28, 2019		May 31, 2018
(In thousands)					November 30, 2019		May 31, 2019
Raw material and supplies	$	309,108	$	288,201	$	294,212	$	296,493
Finished goods		607,253		546,260		589,510		545,380
Total Inventory, Net of Reserves	$	916,361	$	834,461	$	883,722	$	841,873

On January 8, 2008, we announced our authorization of a stock repurchase program under which we may repurchase shares of RPM International Inc. common stock at management’s discretion for general corporate purposes. As announced on November 28, 2018, our goal is to return ~~$1.5~~$1.0 billion in capital to stockholders by May 31, 2021 through ~~dividends and~~ share repurchases. On April 16, 2019, after taking into account share repurchases under our existing stock repurchase program to date, our Board of Directors authorized the repurchase of the remaining $600.0 million in value of RPM International Inc. common stock by May 31, 2021. As a result, we may repurchase shares from time to time in the open market or in private transactions at various times and in amounts and for prices that our management deems appropriate, subject to insider trading rules and other securities law restrictions. The timing of our purchases will depend upon prevailing market conditions, alternative uses of capital and other factors. We may limit or terminate the repurchase program at any time. During the three months ended ~~February 28,~~November 30, 2019, we did 0t repurchase any shares of our common stock under this program. During the three months ended November 30, 2018, we repurchased ~~1,570,647~~1,144,952 shares of our common stock at a cost of approximately ~~$91.2~~$75.0 million, or an average cost of ~~$58.08~~$65.50 per share, under this program. During the ~~nine~~six months ended ~~February 28,~~November 30, 2019, we repurchased ~~2,819,045~~1,655,616 shares of our common stock at a cost of approximately ~~$173.2~~$100.0 million, or an average cost of ~~$61.45~~$60.40 per share, under this program. During the six months ended November 30, 2018, we repurchased 1,248,398 shares of our common stock at a cost of approximately $82.0 million, or an average cost of $65.68 per share, under this program.

The following table sets forth the reconciliation of the numerator and denominator of basic and diluted earnings per share for the ~~three~~three- and ~~nine-month~~six-month periods ended ~~February 28,~~November 30, 2019 and 2018. For the three and ~~nine~~six months ended ~~February 28,~~November 30, 2019, and the three months ended November 30, 2018, basic and diluted earnings per share ~~were~~was calculated using the two-class method. For the ~~three and nine~~six months ended ~~February 28, 2019,~~November 30, 2018, basic earnings per share was calculated using the two-class method and diluted earnings per share was calculated using the treasury method. For the three months ended February 28, 2018, basic weighted-average shares outstanding and basic net income available to common shareholders and basic weighted average common shares were used in calculating diluted earnings per share under the two-class method, as that method resulted in the most-dilutive earnings per share. For the nine months ended February 28, 2018, diluted earnings per share was calculated using the two-class method.

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
(In thousands, except per share amounts)	2019			2018			2019			2018			2019			2018			2019			2018
Numerator for earnings per share:
Net income attributable to RPM International Inc. stockholders	$	14,190		$	40,227		$	133,178		$	252,106		$	77,030		$	49,224		$	183,218		$	118,988
Less: Allocation of earnings and dividends to participating securities		(109	)		(530	)		(996	)		(3,373	)		(548	)		(460	)		(1,167	)		(936	)
Net income available to common shareholders - basic		14,081			39,697			132,182			248,733			76,482			48,764			182,051			118,052
Add: Undistributed earnings reallocated to unvested shareholders											7			1			-			3			-
Add: Allocation of earnings and dividends to participating securities		109						996						-			-			-			936
Add: Income effect of contingently issuable shares											4,351
Net income available to common shareholders - diluted	$	14,190		$	39,697		$	133,178		$	253,091		$	76,483		$	48,764		$	182,054		$	118,988
Denominator for basic and diluted earnings per share:
Basic weighted average common shares		130,105			131,178			131,019			131,195			128,393			131,058			128,639			131,467
Average diluted options and awards		1,784						1,810			540			686			609			655			1,811
Additional shares issuable assuming conversion of convertible securities (1)											3,922
Total shares for diluted earnings per share (2)		131,889			131,178			132,829			135,657
Total shares for diluted earnings per share (1)														129,079			131,667			129,294			133,278
Earnings Per Share of Common Stock Attributable to
RPM International Inc. Stockholders:
Basic Earnings Per Share of Common Stock	$	0.11		$	0.30		$	1.01		$	1.90		$	0.60		$	0.37		$	1.42		$	0.90
Diluted Earnings Per Share of Common Stock	$	0.11		$	0.30		$	1.00		$	1.87		$	0.59		$	0.37		$	1.41		$	0.89

We have leases for manufacturing facilities, warehouses, office facilities, equipment, and vehicles, which are primarily classified and accounted for as operating leases. We have a small portfolio of finance leases, which are not material to our Consolidated Financial Statements. Some leases include one or more options to renew, generally at our sole discretion, with renewal terms that can extend the lease term from one to five years or more. In addition, certain leases contain termination options, where the rights to terminate are held by either us, the lessor, or both parties. These options to extend or terminate a lease are included in the lease terms when it is reasonably certain that we will exercise that option. We have made an accounting policy election not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less, with no purchase option that we are reasonably certain to exercise. ROU assets and lease liabilities are recognized based on the present value of the fixed and in-substance fixed lease payments over the lease term at the commencement date. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by lease incentives. We use our incremental borrowing rate as the discount rate to determine the present value of the lease payments for leases, as our leases do not have readily determinable implicit discount rates. Our incremental borrowing rate is the rate of interest that we would have to borrow on a collateralized basis over a similar term and amount in a similar economic environment. We determine the incremental borrowing rates for our leases by adjusting the local risk-free interest rate with a credit risk premium corresponding to our credit rating.

Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the ROU assets and interest expense for the outstanding lease liabilities using the discount rate discussed above. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain vendors have the right to declare that we are in default of our agreements if any such vendor, including the lessors under its vehicle leases, determines that a change in our financial condition poses a substantially increased credit risk. Our lease agreements do not contain any significant residual value guarantees or material restrictive covenants. Income from subleases was not significant for any period presented.

During the three months ended November 30, 2019, we incurred lease costs of $21.5 million, which is primarily comprised of operating lease cost of $17.8 million and other costs of $3.7 million which include costs for our finance leases, short-term leases, and variable lease payments.

During the six months ended November 30, 2019, we incurred lease costs of $42.2 million, which is primarily comprised of operating lease costs of $35.9 million and other costs of $6.3 million, which include costs for our finance leases, short-term leases and variable lease payments.

For the three and six months ended November 30, 2019, we paid approximately $17.1 million and $34.0 million, respectively, for operating lease obligations. These payments are included in operating cash flows. In addition, during the six months ended November 30, 2019, we recognized ROU assets for $41.1 million in exchange for new operating lease obligations. At November 30, 2019, the weighted-average remaining lease term under our operating leases was 9.2 years, while the weighted-average discount rate for our operating leases was approximately 3.8%.

The following represents our future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities, as of November 30, 2019:

As of November 30, 2019, our current lease liability balance was $51.0 million and recorded within Other Accrued Liabilities on our Consolidated Balance Sheet.

Following is a summary of our future minimum lease commitments, as determined under ASC 840, for all non-cancelable lease agreements, for each of the next five years and in the aggregate, as of May 31, 2019:

Related party leases and subleases were not significant during any period presented, and therefore are not disclosed. Further, we do not have leases that have not yet commenced, which would create significant rights and obligations for us, including any involvement with the construction or design of the underlying asset.

We offer defined benefit pension plans, defined contribution pension plans, and various postretirement benefit plans. The following tables provide the retirement-related benefit plans’ impact on income before income taxes for the three and ~~nine~~six months ended ~~February 28,~~November 30, 2019 and 2018:

	U.S. Plans						Non-U.S. Plans
	Three Months Ended						Three Months Ended						U.S. Plans						Non-U.S. Plans
	February 28,			February 28,			February 28,			February 28,			Three Months Ended						Three Months Ended
Pension Benefits	2019			2018			2019			2018			November 30,			November 30,			November 30,			November 30,
(In thousands)													2019			2018			2019			2018
Service cost	$	9,382		$	9,465		$	1,219		$	1,175		$	9,856		$	9,382		$	1,391		$	1,219
Interest cost		5,497			4,379			1,399			1,145			5,104			5,497			1,193			1,399
Expected return on plan assets		(8,467	)		(8,086	)		(2,051	)		(1,978	)		(8,573	)		(8,467	)		(1,834	)		(2,051	)
Amortization of:
Prior service cost (credit)		29			29			(8	)		(6	)		2			29			(9	)		(8	)
Net actuarial losses recognized		3,272			3,618			319			451			4,629			3,272			523			319
Net Periodic Benefit Cost	$	9,713		$	9,405		$	878		$	787		$	11,018		$	9,713		$	1,264		$	878

	U.S. Plans						Non-U.S. Plans
	Three Months Ended						Three Months Ended				U.S. Plans						Non-U.S. Plans
	February 28,			February 28,			February 28,		February 28,		Three Months Ended						Three Months Ended
Postretirement Benefits	2019			2018			2019		2018		November 30,			November 30,			November 30,		November 30,
(In thousands)											2019			2018			2019		2018
Service cost	$	-		$	-		$	392	$	311	$	-		$	-		$	429	$	392
Interest cost		48			43			291		224		37			48			282		291
Amortization of:
Prior service (credit)		(55	)		(55	)						(55	)		(55	)		-		-
Net actuarial (gains) losses recognized		(6	)		6			115		79		(16	)		(6	)		158		115
Net Periodic Benefit (Credit) Cost	$	(13	)	$	(6	)	$	798	$	614	$	(34	)	$	(13	)	$	869	$	798

	U.S. Plans						Non-U.S. Plans						U.S. Plans						Non-U.S. Plans
	Nine Months Ended						Nine Months Ended						Six Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,				November 30,
Pension Benefits	2019			2018			2019			2018			2019			2018			2019				2018
(In thousands)																						��
Service cost	$	28,146		$	28,395		$	3,657		$	3,525		$	19,712		$	18,764		$	2,782			$	2,438
Interest cost		16,491			13,137			4,197			3,435			10,208			10,994			2,386				2,798
Expected return on plan assets		(25,401	)		(24,258	)		(6,153	)		(5,934	)		(17,146	)		(16,934	)		(3,668	)			(4,102	)
Amortization of:
Prior service cost (credit)		87			87			(24	)		(18	)		4			58			(18	)			(16	)
Net actuarial losses recognized		9,816			10,854			957			1,353			9,258			6,544			1,046				638
Net Periodic Benefit Cost	$	29,139		$	28,215		$	2,634		$	2,361		$	22,036		$	19,426		$	2,528			$	1,756

Due to slightly ~~higher~~lower discount ~~rates and increased asset values, offset by higher interest cost and lump sum mortality~~ rates, net periodic pension and postretirement cost for fiscal ~~2019~~2020 is ~~slightly~~ higher than to our fiscal ~~2018 expense level.~~2019 expense. 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, but such changes are not expected to be material to our consolidated financial results. We previously disclosed in our financial statements for the fiscal year ended May 31, ~~2018~~2019 that we expected to contribute approximately ~~$1.3~~$0.9 million to our retirement plans in the U.S. and approximately ~~$8.1~~$6.4 million to plans outside the U.S. during the current fiscal ~~year. However, during February~~year, and as of November 30, 2019, ~~we contributed an additional $56.5 million to the RPM Retirement Plan in the U.S., which increases our total expected U.S. contributions to $57.8 million for the current fiscal year.~~those amounts remain unchanged.

We provide, through our wholly owned insurance subsidiaries, certain insurance coverage, primarily product liability coverage, to our other subsidiaries. Excess coverage is provided by third-party insurers. Our product liability accruals provide for these potential losses as well as other uninsured claims. Product liability accruals are established based upon actuarial calculations of potential liability using industry experience, actual historical experience and actuarial assumptions developed for similar types of product liability claims, including development factors and lag times. To the extent there is a reasonable possibility that potential losses could exceed the amounts already accrued, we believe that the amount of any such additional loss would be immaterial to our results of operations, liquidity and consolidated financial position.

We also offer warranties on many of our products, as well as long-term warranty programs at certain of our businesses, and have established product warranty liabilities. We review these liabilities for adequacy on a quarterly basis and adjust them as necessary. The primary factors that could affect these liabilities may include changes in performance rates as well as costs of replacement. Provision for estimated warranty costs is recorded at the time of sale and periodically adjusted, as required, to reflect actual experience. It is probable that we will incur future losses related to warranty claims we have received but that have not been fully investigated and related to claims not yet received. While our warranty liabilities represent our best estimates at ~~February 28,~~November 30, 2019, we can provide no assurances that we will not experience material claims in the future or that we will not incur significant costs to resolve such claims beyond the amounts accrued or beyond what we may recover from our suppliers. Based upon the nature of the expense, product warranty expense is recorded as a reduction of sales, as a component of cost of sales, or within ~~selling, general and administrative expense.~~SG&A.

Also, due to the nature of our businesses, the amount of claims paid can fluctuate from one period to the next. While our warranty liabilities represent our best estimates of our expected losses at any given time, from time-to-time we may revise our estimates based on our experience relating to factors such as weather conditions, specific circumstances surrounding product installations and other factors.

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
	2019			2018			2019			2018			2019			2018			2019			2018
	(In thousands)												(In thousands)
Beginning Balance	$	9,863		$	14,457		$	11,721		$	19,149		$	10,069		$	10,585		$	10,414		$	11,721
Deductions (1)		(4,283	)		(5,776	)		(17,557	)		(20,447	)		(5,721	)		(6,660	)		(11,380	)		(13,274	)
Provision charged to expense		4,091			2,540			15,507			12,519			6,207			5,938			11,521			11,416
Ending Balance	$	9,671		$	11,221		$	9,671		$	11,221		$	10,555		$	9,863		$	10,555		$	9,863

In addition, like other companies participating in similar lines of business, some of our subsidiaries are involved in several proceedings relating to environmental matters. It is our policy to accrue remediation costs when it is probable that such efforts will be required and the related costs can be reasonably estimated. In general, our environmental accruals are undiscounted liabilities, which are exclusive of claims against third parties, and are not material to our financial statements during any of the periods presented.

Carboline Company previously was identified as a potentially responsible party in connection with a matter filed on behalf of the U.S. EPA claiming that Carboline Company, among other potentially responsible parties, violated Section 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and seeking reimbursement for response costs incurred in connection with the release or threatened release of hazardous substances at the Lammers Barrel Superfund Site in Beavercreek, Ohio. Subsequent to the end of the current quarter, Carboline Company agreed in principle to settle this matter for $1.3 million, which amount is subject to final approval and court entry of the proposed consent decree relating to this matter.

We were notified by the SEC on June 24, 2014, that we are the subject of a formal investigation pertaining to the timing of our disclosure and accrual of loss reserves in fiscal 2013 with respect to the previously disclosed U.S. Department Of Justice (the “DOJ”) and the U.S. General Services Administration (the “GSA”) Office of Inspector General investigation into compliance issues relating to Tremco Roofing Division’s GSA contracts. As previously disclosed, our Audit Committee completed an investigation into the facts and circumstances surrounding the timing of our disclosure and accrual of loss reserves with respect to the GSA and DOJ investigation, and determined that it was appropriate to restate our financial results for the first, second and third quarters of fiscal 2013. These restatements had no impact on our audited financial statements for the fiscal years ended May 31, 2013 or 2014. The Audit Committee’s investigation concluded that there was no intentional misconduct on the part of any of our officers.

In connection with the foregoing, on September 9, 2016, the SEC filed an enforcement action against us and our General Counsel. We have cooperated with the SEC’s investigation and believe the allegations in the complaint mischaracterize both our and our General Counsel’s actions in connection with the matters related to our quarterly results in fiscal 2013 and are without merit. Both we and our General Counsel filed motions to dismiss the complaint on February 24, 2017. Those motions to dismiss the complaint were denied by the Court on September 29, 2017. We and our General Counsel filed answers to the complaint on October 16, 2017. Formal discovery commenced in January 2018 and ~~is ongoing.~~closed as of June 3, 2019, other than one remaining discovery dispute. The parties ~~have~~ engaged in written discovery, and ~~depositions of~~several fact witnesses ~~began in September 2018. Further depositions scheduled in January~~were deposed. The dispositive motion briefing schedule was vacated by the Court on July 2, 2019, ~~were put on hold~~ due to the ~~U.S. government shutdown. The Court recently granted a joint motion to modify the case schedule in light of the delay resulting from the U.S. government shutdown,~~remaining discovery dispute, and set deadlines including May 10, 2019 for discovery, July 19, 2019 for our and our General Counsel’s dispositive motions, September 13, 2019 for the SEC’s oppositions and cross-dispositive motions, October 11, 2019 for our and our General Counsel’s reply briefs and cross-oppositions, and November 8, 2019 for the SEC’s cross-reply brief.will be reset once this dispute is fully resolved. We intend to continue to contest the allegations in the complaint vigorously.

Also in connection with the foregoing, a stockholder derivative action was filed in the United States District Court, Northern District of Ohio, Eastern Division, against certain of our directors and officers. The court has stayed this stockholder derivative action pending the completion of the SEC enforcement action.

The action by the SEC could result in sanctions against us and/or our General Counsel and could impose substantial additional costs and distractions, regardless of its outcome. We have determined that it is probable that we will incur a loss relating to this matter and have estimated a range of potential loss. We have accrued at the low end of the range of loss, as no amount within the range is more likely to occur, and no amount within the estimated range of loss would have a material impact on our consolidated financial condition, results of operations or cash flows.

With respect to a previously disclosed case pending against one of our subsidiaries in which both trade secret and trademark infringement had been alleged, during the quarter ended November 30, 2018, we agreed to settle the case for $6.5 million.

We operate a portfolio of businesses and product lines that manufacture and sell a variety of specialty paints, protective coatings and roofing systems, sealants and adhesives. We disaggregate revenues from the sales of our products and services based upon geographical location by each of our reportable segments, which are aligned by similar economic factors, trends and customers, which best depict the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. See Note ~~16,~~17, “Segment Information,” for further details regarding our disaggregated revenues as well as a description of each of the unique revenue streams related to each of our ~~three~~4 reportable segments.

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. The majority of our revenue is recognized at a point in time. However, we also record revenues generated under construction contracts, mainly in connection with the installation of specialized roofing and flooring systems and related services. For certain polymer flooring installation projects, we account for our revenue using the output method, as we consider square footage of completed flooring to be the best measure of progress toward the complete satisfaction of the performance obligation. In contrast, for certain of our roofing installation projects, we account for our revenue using the input method, as that method was the best measure of performance as it considers costs incurred in relation to total expected project costs, which essentially represents the transfer of control for roofing systems to the customer. In general, for our construction contracts, we record contract revenues and related costs as our contracts progress on an over-time model.

We have elected to apply the practical expedient to recognize revenue net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Payment terms and conditions vary by contract type, although our customers’ payment terms generally include a requirement to pay within 30 to 60 days of fulfilling our performance obligations. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined that our contracts generally do not include a significant financing component. We have elected to apply the practical expedient to treat all shipping and handling costs as fulfillment costs as a significant portion of these costs are incurred prior to control transfer.

Our contracts with customers may include promises to transfer multiple products and/or services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For example, judgment is required to determine whether products sold in connection with the sale of installation services are considered distinct and accounted for separately, or not distinct and accounted for together with installation services and recognized over time.

We provide customer rebate programs and incentive offerings, including special pricing and co-operative advertising arrangements, promotions and other volume-based incentives. These customer programs and incentives are considered variable consideration. We include in revenue variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the variable consideration is resolved. In general, this determination is made based upon known customer program and incentive offerings at the time of sale, and expected sales volume forecasts as it relates to our volume-based incentives. This determination is updated each reporting period. Certain of our contracts include contingent consideration that is receivable only upon the final inspection and acceptance of a project. We include estimates of such variable consideration in our transaction price. Based on historical experience, we consider the probability-based expected value method appropriate to estimate the amount of such variable consideration.

Our products are generally sold with a right of return and we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period as additional information becomes available. We record a right of return liability to accrue for expected customer returns. Historical actual returns are used to estimate future returns as a percentage of current sales. Obligations for returns and refunds were not material individually or in the aggregate.

We offer assurance type warranties on our products as well as separately sold warranty contracts. Revenue related to warranty contracts that are sold separately is recognized over the life of the warranty term. Warranty liabilities for our assurance type warranties are discussed further in Note ~~14.~~15, “Contingencies and Other Accrued Losses.”

Timing of revenue recognition may differ from the timing of invoicing customers. Our contract assets are recorded for products and services that have been provided to our customer but have not yet been billed, and are included in prepaid expenses and other current assets in our consolidated balance sheets. Our short-term contract liabilities consist of advance payments, or deferred revenue, and are included in other accrued liabilities in our consolidated balance sheets.

Accounts receivable, net of allowances, and net contract assets (liabilities) consisted of the following:

	February 28, 2019			November 30, 2018			$ Change			% Change			November 30, 2019			August 31, 2019			$ Change			% Change
(In thousands, except percents)
Accounts receivable, less allowance	$	961,628		$	1,013,030		$	(51,402	)		-5.1	%	$	1,047,813		$	1,109,259		$	(61,446	)		-5.5	%

Contract assets	$	11,204		$	15,955		$	(4,751	)		-29.8	%	$	18,959		$	26,434		$	(7,475	)		-28.3	%
Contract liabilities - short-term		(24,697	)		(23,454	)		(1,243	)		5.3	%		(25,205	)		(27,402	)		2,197			-8.0	%
Net Contract Liabilities	$	(13,493	)	$	(7,499	)	$	(5,994	)		79.9	%	$	(6,246	)	$	(968	)	$	(5,278	)		545.2	%

(In thousands, except percents)													November 30, 2019			May 31, 2019			$ Change			% Change
	February 28, 2019			May 31, 2018			$ Change			% Change
(In thousands, except percents)
Accounts receivable, less allowance	$	961,628		$	1,113,818		$	(152,190	)		-13.7	%	$	1,047,813		$	1,232,350		$	(184,537	)		-15.0	%

Contract assets	$	11,204		$	18,212		$	(7,008	)		-38.5	%	$	18,959		$	21,628		$	(2,669	)		-12.3	%
Contract liabilities - short-term		(24,697	)		(23,335	)		(1,362	)		5.8	%		(25,205	)		(25,896	)		691			-2.7	%
Net Contract Liabilities	$	(13,493	)	$	(5,123	)	$	(8,370	)		163.4	%	$	(6,246	)	$	(4,268	)	$	(1,978	)		46.3	%

The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. The ~~$6.0~~$5.3 million change in our net contract liabilities from August 31, 2019 to November 30, ~~2018 to February 28,~~ 2019 and the ~~$8.4~~$2.0 million change in our net contract liabilities from May 31, ~~2018~~2019 to ~~February 28,~~November 30, 2019 resulted primarily from the ~~seasonality associated with~~timing of construction jobs in ~~progress during peak summer months versus later in~~progress. During the ~~calendar year,~~first quarter of fiscal 2020, we performed a substantial amount of work on construction projects and as ~~well~~such, our unbilled

revenue was higher at August 31, 2019 than it was at May 31, 2019. During the second quarter of fiscal 2020, our unbilled revenues declined as ~~the timing of revenue recognition under the new standard.~~projects and billings were completed. We also record long-term deferred revenue, which amounted to ~~$64.7~~$67.1 million, $65.6 million and ~~$64.1~~$66.5 million as of ~~February 28,~~November 30, 2019, August 31, 2019 and May 31, ~~2018,~~2019, respectively. The long-term portion of deferred revenue is related to ~~assurance type~~ warranty contracts and is included in other long-term liabilities in our consolidated balance sheets.

We have elected to adopt the practical expedient to not disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied as of the end of the reporting period for performance obligations that are part of a contract with an original expected duration of one year or less.

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. As our contract terms are primarily one year or less in duration, we have elected to apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include our internal sales force compensation program and certain incentive programs as we have determined annual compensation is commensurate with annual sales activities.

~~During the quarter ended August 31, 2018,~~Effective June 1, 2019, we ~~made the determination to streamline~~realigned certain businesses and management ~~structures within~~structure to recognize how we allocate resources and analyze the operating performance of our ~~industrial reportable segment. As~~businesses. Among other things, the realignment of certain businesses occurred as a result of the 2020 MAP to Growth plan that was approved and initiated between May and August 2018. As we began to execute on our ~~former tremco illbruck Group, Tremco Group~~operating improvement initiatives, we identified ways to realign certain businesses, and ~~several components from~~concluded that moving to an expanded reporting structure could help us to better manage our ~~Performance Coatings Group, including our Euclid~~assets and ~~Flowcrete businesses, were combined to form a new Construction Products Group. There were no changes in~~improve synergies across the ~~composition of any of~~enterprise.

This realignment changed our reportable segments beginning with our first quarter of fiscal 2020. As such we now report under 4 reportable segments instead of our 3 previous reportable segments. Our four reporting segments are: the CPG reportable segment, PCG reportable segment, Consumer reportable segment and ~~therefore, previously reported~~Specialty reportable segment. In connection with the realignment, we shifted our Kirker business ~~segment information remains unchanged.~~out of Consumer into Specialty, and also shifted our Dryvit and Nudura businesses out of Specialty into CPG. The newly formed CPG also includes our Tremco, Tremco illbruck, Euclid Chemical, Viapol, Vandex and Flowcrete businesses. PCG includes Stonhard, Carboline, USL and Fibergrate businesses, while Consumer comprises the Rust-Oleum and DAP businesses.

We operate a portfolio of businesses and product lines that manufacture and sell a variety of specialty paints, protective coatings and roofing systems, sealants and adhesives. We manage our portfolio by organizing our businesses and product lines into ~~three~~four reportable ~~segments: the industrial reportable segment, the consumer reportable segment and the specialty reportable segment.~~segments as outlined above, which also represent our operating segments. Within each ~~reportable~~operating segment, we ~~aggregate operating segments or~~manage product lines ~~that consist of individual companies or groups of companies~~ and ~~product lines,~~businesses which generally address common markets, share similar economic characteristics, utilize similar technologies and can share manufacturing or distribution capabilities. Our ~~six~~4 operating segments represent components of our business for which separate financial information is available that is utilized on a regular basis by our chief operating decision maker in determining how to allocate the assets of the company and evaluate performance. These ~~six~~four operating segments are each managed by an operating segment manager, who is responsible for the day-to-day operating decisions and performance evaluation of the operating segment’s underlying businesses. We evaluate the profit performance of our segments primarily based on income before income taxes, but also look to earnings (loss) before interest and taxes (“EBIT”), and/or adjusted EBIT, as a performance evaluation measure because interest expense is essentially related to acquisitions, as opposed to segment operations.

Our ~~industrial~~CPG reportable segment products are sold throughout North America and also account for the majority of our international sales. Our ~~industrial~~construction product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. ~~The industrial reportable segment comprises two separate operating segments — Construction Products Group and Performance Coatings Group.~~ Products and services within this reportable segment include construction sealants and adhesives, coatings and chemicals, roofing systems, concrete admixture and repair products, building envelope solutions, insulated cladding, flooring systems, and weatherproofing solutions.

Our PCG reportable segment products are sold throughout North America, as well as internationally, and are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other ~~sealants,~~commercial customers. Products and ~~polymer flooring.~~services within this reportable segment include high-performance flooring solutions, corrosion control and fireproofing coatings, infrastructure repair systems, fiberglass reinforced plastic gratings and drainage systems.

Our ~~consumer~~Consumer reportable segment manufactures and markets professional use and do-it-yourself (“DIY”) products for a variety of mainly consumer applications, including home improvement and personal leisure activities. Our ~~consumer~~Consumer segment’s major manufacturing and distribution operations are located primarily in North America, along with a few locations in Europe and other parts of the world. Our consumer reportable segment products are primarily sold directly to mass merchandisers, home improvement centers, hardware stores, paint stores, craft shops ~~cosmetic companies~~ and through distributors. ~~This~~The Consumer reportable segment ~~comprises three operating segments — Rust-Oleum Group, DAP Group and SPG-Consumer Group. Products within this reportable segment~~offers products that include specialty, hobby and professional paints; ~~nail enamels;~~ caulks; adhesives; silicone sealants and wood stains.

Our ~~specialty~~Specialty reportable segment products are sold throughout North America and a few international locations, primarily in Europe. Our specialty product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The ~~specialty~~Specialty reportable segment ~~is a single operating segment, which~~ offers products that include industrial cleaners, restoration services equipment, colorants, nail enamels, exterior finishes, edible coatings and specialty glazes for pharmaceutical and food industries, and other specialty ~~OEM~~original equipment manufacturer (“OEM”) coatings.

In addition to our ~~three~~four reportable segments, there is a category of certain business activities and expenses, referred to as corporate/other, that does not constitute an operating segment. This category includes our corporate headquarters and related administrative expenses, results of our captive insurance companies, gains or losses on the sales of certain assets and other expenses not directly associated with any reportable segment. Assets related to the corporate/other category consist primarily of investments, prepaid expenses and headquarters’ property and equipment. These corporate and other assets and expenses reconcile reportable segment data to total consolidated income before income taxes and identifiable assets.

We reflect income from our joint ventures on the equity method, and receive royalties from our licensees.

The following tables present a disaggregation of revenues by geography, and reflect the results of our reportable segments consistent with our management philosophy, by representing the information we utilize, in conjunction with various strategic, operational and other financial performance criteria, in evaluating the performance of our portfolio of businesses. Information for all periods presented has been recast to reflect the current year change in reportable segments.

Three Months Ended February 28, 2019	Industrial Segment		Consumer Segment		Specialty Segment		Consolidated
Three Months Ended November 30, 2019									CPG Segment			PCG Segment		Consumer Segment		Specialty Segment			Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	299,442	$	304,184	$	137,181	$	740,807	$	270,908		$	173,747	$	358,500	$	124,560		$	927,715
Foreign
Canada		40,378		21,404		8,211		69,993		46,199			19,309		27,075		2,555			95,138
Europe		154,753		43,888		21,060		219,701		117,548			69,999		48,741		20,946			257,234
Latin America		44,420		6,781		306		51,507		43,084			8,842		7,327		349			59,602
Asia Pacific		28,415		6,904		7,987		43,306		19,468			6,670		6,874		9,760			42,772
Other Foreign		13,481		1,835		-		15,316		2,303			14,145		2,383					18,831
Total Foreign		281,447		80,812		37,564		399,823		228,602			118,965		92,400		33,610			473,577
Total	$	580,889	$	384,996	$	174,745	$	1,140,630	$	499,510		$	292,712	$	450,900	$	158,170		$	1,401,292

Three Months Ended February 28, 2018	Industrial Segment		Consumer Segment		Specialty Segment		Consolidated
Three Months Ended November 30, 2018									CPG Segment			PCG Segment		Consumer Segment		Specialty Segment			Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	277,374	$	280,422	$	137,863	$	695,659	$	229,385		$	169,518	$	329,934	$	142,549		$	871,386
Foreign
Canada		40,006		19,421		3,144		62,571		53,734			22,671		23,403		2,434			102,242
Europe		155,127		46,997		20,929		223,053		128,628			64,156		54,478		22,580			269,842
Latin America		50,763		6,946		332		58,041		36,308			8,550		7,281		364			52,503
Asia Pacific		29,021		7,643		7,829		44,493		19,397			9,312		7,919		10,091			46,719
Other Foreign		16,919		1,941		-		18,860		(154	)		17,753		2,240		-			19,839
Total Foreign		291,836		82,948		32,234		407,018		237,913			122,442		95,321		35,469			491,145
Total	$	569,210	$	363,370	$	170,097	$	1,102,677	$	467,298		$	291,960	$	425,255	$	178,018		$	1,362,531

Nine Months Ended February 28, 2019	Industrial Segment		Consumer Segment		Specialty Segment		Consolidated
Six Months Ended November 30, 2019									CPG Segment			PCG Segment		Consumer Segment		Specialty Segment			Consolidated
(In thousands)
Net Sales (based on shipping location)																		��
United States	$	1,118,016	$	1,021,933	$	452,918	$	2,592,867	$	578,567		$	355,653	$	739,729	$	256,291		$	1,930,240
Foreign
Canada		163,141		73,813		32,058		269,012		96,642			40,282		59,580		4,783			201,287
Europe		526,962		159,118		70,041		756,121		231,850			134,458		99,750		41,785			507,843
Latin America		136,905		20,183		976		158,064		85,931			17,283		13,642		781			117,637
Asia Pacific		87,626		21,735		23,559		132,920		39,864			14,094		13,055		14,618			81,631
Other Foreign		48,180		5,986		-		54,166		2,761			28,183		4,474					35,418
Total Foreign		962,814		280,835		126,634		1,370,283		457,048			234,300		190,501		61,967			943,816
Total	$	2,080,830	$	1,302,768	$	579,552	$	3,963,150	$	1,035,615		$	589,953	$	930,230	$	318,258		$	2,874,056

Nine Months Ended February 28, 2018	Industrial Segment		Consumer Segment		Specialty Segment		Consolidated
Six Months Ended November 30, 2018									CPG Segment			PCG Segment		Consumer Segment		Specialty Segment			Consolidated
(In thousands)
Net Sales (based on shipping location)
United States	$	1,038,594	$	920,714	$	444,424	$	2,403,732	$	519,184		$	346,975	$	705,470	$	280,430		$	1,852,059
Foreign
Canada		166,056		69,658		16,253		251,967		97,072			44,859		52,408		4,680			199,019
Europe		517,303		164,678		69,553		751,534		253,915			124,769		112,354		45,380			536,418
Latin America		145,315		20,582		1,085		166,982		74,293			18,190		13,403		671			106,557
Asia Pacific		84,087		24,251		24,344		132,682		39,687			19,525		14,831		15,572			89,615
Other Foreign		50,528		6,062		-		56,590		639			34,061		4,152		-			38,852
Total Foreign		963,289		285,231		111,235		1,359,755		465,606			241,404		197,148		66,303			970,461
Total	$	2,001,883	$	1,205,945	$	555,659	$	3,763,487	$	984,790		$	588,379	$	902,618	$	346,733		$	2,822,520

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,			February 28,			November 30,			November 30,			November 30,			November 30,
	2019			2018			2019			2018			2019			2018			2019			2018
	(In thousands)												(In thousands)
Income (Loss) Before Income Taxes
Industrial Segment	$	11,368		$	17,804		$	134,818		$	174,402
CPG Segment													$	57,123		$	35,357		$	139,803		$	100,401
PCG Segment														33,320			22,299			61,377		$	30,624
Consumer Segment		23,212			29,123			115,747			146,576			34,456			41,836			93,614			92,805
Specialty Segment		17,147			22,792			74,927			90,398			18,762			26,119			42,089			49,935
Corporate/Other		(47,263	)		(35,021	)		(162,497	)		(112,213	)		(41,908	)		(59,018	)		(92,281	)		(115,234	)
Consolidated	$	4,464		$	34,698		$	162,995		$	299,163		$	101,753		$	66,593		$	244,602		$	158,531

We account for goodwill and other intangible assets in accordance with the provisions of ~~April 8, 2019, we~~ASC 350 and account for business combinations using the acquisition method of accounting and, accordingly, the assets and liabilities of the entities acquired are recorded at their estimated fair values at the acquisition date. Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets.

We assess goodwill for impairment annually during the fourth quarter, or more frequently, if events and circumstances indicate impairment may have ~~repurchased 467,862 shares~~occurred. We test goodwill for impairment at the reporting unit level. Goodwill is assigned to reporting units that are expected to benefit from the synergies of ~~RPM common stock since February 28, 2019, at~~the business combination as of the acquisition date. Once goodwill has been allocated to the reporting units, it no longer retains its identification with a ~~cost~~particular acquisition and becomes identified with the reporting unit in its entirety. Accordingly, the fair value of ~~approximately $27.0 million, or an average~~the reporting unit as a whole is available to support the recoverability of ~~$57.71, under~~its goodwill. We evaluate our reporting units when changes in our operating structure occur, and if necessary, reassign goodwill using a relative fair value allocation approach.

Subsequent to our prior annual impairment test as of the ~~stock repurchase program described~~first day of our fourth fiscal quarter, the composition of our reportable segments was revised, as further discussed in Note ~~11.~~17, “Segment Information.” Prior to implementing the revised segment reporting structure beginning in fiscal 2020, our previously disclosed Industrial Segment comprised 2 operating segments, the CPG operating segment and the PCG operating segment. Each of these operating segments comprised several reporting units, all of which were tested during our last annual goodwill impairment test during the fourth quarter of fiscal 2019.

Also, in connection with our 2020 Map to Growth initiative, we realigned certain businesses and management structure within our Specialty segment. As such, our former Wood Finishes Group reporting unit was split into 2 separate reporting units: Guardian and Wood Finishes Group. Additionally, our former Kop-Coat Group reporting unit was split into 2 reporting units: Kop-Coat Industrial Protection Products and Kop-Coat Group. We performed a goodwill impairment test for each of the new reporting units upon the change in reportable segments, business realignment and management structure using a quantitative assessment. We concluded that the estimated fair values exceeded the carrying values for these new reporting units, and accordingly, no indications of impairment were identified as a result of these changes during the first quarter of fiscal 2020.

The following table summarizes the changes in the carrying amount of goodwill, by reportable segment, for the periods presented:

Our financial statements include all of our majority-owned subsidiaries. Investments in less-than-majority-owned joint ventures for which we have the ability to exercise significant influence over 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; inventories; allowances for recoverable taxes; uncertain tax positions; useful lives of property, plant and equipment; goodwill and other intangible assets; environmental, warranties and other contingent liabilities; ~~derivative and hedging;~~ 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.

Our annual goodwill impairment analysis for fiscal 2018 did not result in any indicators of impairment. Should the future earnings and cash flows at our reporting units decline and/or discount rates increase, future impairment charges to goodwill and other intangible assets may be required.

In connection with our 2020 MAP to Growth initiatives, during the current quarter ended February 28, 2019, we changed the composition of certain of our reporting units that are included in our industrial reportable segment. Accordingly, we performed an interim impairment test for each reporting unit that changed in accordance with ASC 350, “Intangibles – Goodwill and Other.” Our assessment for the quarter ended February 28, 2019 did not indicate the presence of any goodwill impairment for any of the reporting units tested. However, the interim impairment test for our Construction Products Group – Europe, which has approximately $125.0 million of goodwill, resulted in an excess of fair value over carrying value of approximately 9% using the income approach. We will continue to monitor the performance of this reporting unit in fiscal 2019. If the timing of projected economic recovery in Europe and planned improvements in operational efficiencies for these businesses are not achieved, impairment of intangible assets, including goodwill, and other long-lived assets, could result.

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, 2018. Other than our June 1, 2018 adoption of ASC 606, which is more fully described in Note 15, “Revenue,” and changes outlined in Note 2, “New Accounting Pronouncements,” there have been no significant changes in critical accounting policies or estimates since May 31, 2018.2019.

This realignment changed our reportable segments ~~and, therefore, previously reported business segment information remains unchanged.~~

~~We operate a portfolio~~beginning with our first quarter of ~~businesses and product lines that manufacture and sell a variety~~fiscal 2020. As such, as of ~~specialty paints, protective coatings and roofing systems, sealants and adhesives. We manage our portfolio by organizing our businesses and product lines into three~~June 1, 2019, we began reporting under four reportable ~~segments: the industrial reportable segment, the consumer reportable segment and the specialty reportable segment. Within each reportable segment, we aggregate operating~~ segments or product lines that consist of individual companies or groups of companies and product lines, which generally address common markets, share similar economic characteristics, utilize similar technologies and can share manufacturing or distribution capabilities. Our six operating segments represent componentsinstead of our ~~business~~three previous reportable segments. See Note 17, “Segment Information,” to the Consolidated Financial Statements for which separate financial information is available that is utilized on a regular basis by our chief operating decision maker in determining how to allocate the assets of the company and evaluate performance. These six operating segments are each managed by an operating segment manager, who is responsible for the day-to-day operating decisions and performance evaluation of the operating segment’s underlying businesses. We evaluate the profit performance of our segments primarily based on income before income taxes, but also look to earnings (loss) before interest and taxes (“EBIT”) as a performance evaluation measure because interest expense is essentially related to acquisitions, as opposed to segment operations.

Our industrial reportable segment products are sold throughout North America and also account for the majority of our international sales. Our industrial product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The industrial reportable segment comprises two separate operatingfurther detail.

segments — Construction Products Group and Performance Coatings Group. Products and services within this reportable segment include construction chemicals, roofing systems, weatherproofing and other sealants, and polymer flooring.

Our consumer reportable segment manufactures and markets professional use and do-it-yourself (“DIY”) products for a variety of mainly consumer applications, including home improvement and personal leisure activities. Our consumer segment’s major manufacturing and distribution operations are located primarily in North America, along with a few locations in Europe and other parts of the world. Our consumer reportable segment products are primarily sold directly to mass merchandisers, home improvement centers, hardware stores, paint stores, craft shops, cosmetic companies and through distributors. This reportable segment comprises three operating segments — Rust-Oleum Group, DAP Group and SPG-Consumer Group. Products within this reportable segment include specialty, hobby and professional paints; nail enamels; caulks; adhesives; silicone sealants and wood stains.

Our specialty reportable segment products are sold throughout North America and a few international locations, primarily in Europe. Our specialty product lines are sold directly to contractors, distributors and end-users, such as industrial manufacturing facilities, public institutions and other commercial customers. The specialty reportable segment is a single operating segment, which offers products that include industrial cleaners, restoration services equipment, colorants, exterior finishes, edible coatings and specialty glazes for pharmaceutical and food industries, and other specialty OEM coatings.

In addition to our three reportable segments, there is a category of certain business activities and expenses, referred to as corporate/other, that does not constitute an operating segment. This category includes our corporate headquarters and related administrative expenses, results of our captive insurance companies, gains or losses on the sales of certain assets and other expenses not directly associated with any reportable segment. Assets related to the corporate/other category consist primarily of investments, prepaid expenses and headquarters’ property and equipment. These corporate and other assets and expenses reconcile reportable segment data to total consolidated income before income taxes, interest expense and earnings before interest and taxes.

~~We reflect income from our joint ventures on the equity method, and receive royalties from our licensees.~~

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. Information for all periods presented has been recast to reflect the current year change in reportable segments.

	Three Months Ended						Nine Months Ended							Three Months Ended						Six Months Ended
	February 28,			February 28,			February 28,				February 28,			November 30,			November 30,			November 30,			November 30,
	2019			2018			2019				2018			2019			2018			2019			2018
	(In thousands)													(In thousands)
Net Sales
Industrial Segment	$	580,889		$	569,210		$	2,080,830			$	2,001,883
CPG Segment														$	499,510		$	467,298		$	1,035,615		$	984,790
PCG Segment															292,712			291,960			589,953			588,379
Consumer Segment		384,996			363,370			1,302,768				1,205,945			450,900			425,255			930,230			902,618
Specialty Segment		174,745			170,097			579,552				555,659			158,170			178,018			318,258			346,733
Consolidated	$	1,140,630		$	1,102,677		$	3,963,150			$	3,763,487		$	1,401,292		$	1,362,531		$	2,874,056		$	2,822,520
Income Before Income Taxes (a)
Industrial Segment
CPG Segment
Income Before Income Taxes (a)														$	57,123		$	35,357		$	139,803		$	100,401
Interest (Expense), Net (b)															(2,074	)		(2,189	)		(4,101	)		(4,479	)
EBIT (c)														$	59,197		$	37,546		$	143,904		$	104,880
PCG Segment
Income Before Income Taxes (a)	$	11,368		$	17,804		$	134,818			$	174,402		$	33,320		$	22,299		$	61,377		$	30,624
Interest (Expense), Net (b)		(2,556	)		(2,505	)		(7,366	)	��		(7,572	)		25			(223	)		(104	)		(341	)
EBIT (c)	$	13,924		$	20,309		$	142,184			$	181,974		$	33,295		$	22,522		$	61,481		$	30,965
Consumer Segment
Income Before Income Taxes (a)	$	23,212		$	29,123		$	115,747			$	146,576		$	34,456		$	41,836		$	93,614		$	92,805
Interest (Expense), Net (b)		(102	)		(154	)		(374	)			(493	)		(56	)		(123	)		(161	)		(297	)
EBIT (c)	$	23,314		$	29,277		$	116,121			$	147,069		$	34,512		$	41,959		$	93,775		$	93,102
Specialty Segment
Income Before Income Taxes (a)	$	17,147		$	22,792		$	74,927			$	90,398		$	18,762		$	26,119		$	42,089		$	49,935
Interest Income, Net (b)		123			86			286				284			(7	)		105			19			198
EBIT (c)	$	17,024		$	22,706		$	74,641			$	90,114		$	18,769		$	26,014		$	42,070		$	49,737
Corporate/Other
(Expense) Before Income Taxes (a)	$	(47,263	)	$	(35,021	)	$	(162,497	)		$	(112,213	)	$	(41,908	)	$	(59,018	)	$	(92,281	)	$	(115,234	)
Interest (Expense), Net (b)		(19,264	)		(19,415	)		(66,478	)			(59,184	)		(15,424	)		(27,730	)		(36,121	)		(47,214	)
EBIT (c)	$	(27,999	)	$	(15,606	)	$	(96,019	)		$	(53,029	)	$	(26,484	)	$	(31,288	)	$	(56,160	)	$	(68,020	)
Consolidated
Net Income	$	14,496		$	40,588		$	133,855			$	253,349		$	77,322		$	49,173		$	183,818		$	119,359
Add: (Benefit) Provision for Income Taxes		(10,032	)		(5,890	)		29,140				45,814
Add: (Provision) for Income Taxes															(24,431	)		(17,420	)		(60,784	)		(39,172	)
Income Before Income Taxes (a)		4,464			34,698			162,995				299,163			101,753			66,593			244,602			158,531
Interest (Expense), Net (b)		(21,799	)		(21,988	)		(73,932	)			(66,965	)
Interest (Expense)															(26,341	)		(23,127	)		(54,658	)		(47,533	)
Investment Income (Expense), Net															8,805			(7,033	)		14,190			(4,600	)
EBIT (c)	$	26,263		$	56,686		$	236,927			$	366,128		$	119,289		$	96,753		$	285,070		$	210,664

Net Sales Consolidated net sales of ~~$1,140.6~~$1,401.3 million for the ~~third~~second quarter of fiscal ~~2019~~2020 grew by approximately ~~3.4%~~2.8% from net sales of ~~$1,102.7~~$1,362.5 million for last year’s ~~third~~second quarter. ~~Acquisitions added 2.1%, while organic~~Organic sales, which include the impact of price and volume, ~~improved by 4.3%. Consolidated~~contributed 3.5% to consolidated net sales ~~for the quarter also reflect an unfavorable~~while acquisitions added 0.6%. Unfavorable foreign exchange ~~impact of 3.0%~~impacted consolidated net sales during the current quarter by 1.3%.

~~Industrial~~CPG segment net sales for the current quarter grew by ~~2.1%~~6.9% to ~~$580.9~~$499.5 million, from net sales of ~~$569.2~~$467.3 million during the same period a year ago. ~~The improvement resulted from~~Organic growth contributed 7.4% during the quarter, mainly driven by volume, while recent acquisitions ~~which~~ contributed ~~1.3%~~1.2% to net sales during the current quarter. Unfavorable foreign exchange impacted CPG segment net sales by 1.7% during the current quarter. Construction activity picked up due to favorable weather early in this year’s second quarter, reducing some of the backlog that grew during the rainy spring and early summer months. Partially offsetting this segment’s 7.4% organic growth ~~which contributed 4.8%~~during the quarter was the impact of strategic decisions to exit low-margin and/or high-risk working capital operations within certain international product offerings. Discontinued product lines reduced sales by approximately 0.7%. Significant top-line growth was recognized at our roofing and concrete admixture businesses as well as our business in Latin America.

PCG segment net sales for the current quarter grew by 0.3% to $292.7 million, from net sales of $292.0 million during the same period a year ago. Organic growth was 1.7% during the quarter, driven mainly by selling price increases over the ~~recovery of our industrial coatings business.~~comparable period last year while recent acquisitions contributed 0.1% to net sales during the current quarter. Unfavorable foreign exchange impacted ~~industrial~~the PCG segment net sales by ~~4.0%~~1.5% during the current quarter. Strong growth was recognized at our industrial coatings business, both in North America and Europe, but was offset by sales declines at other units. Our expansion joint and highway maintenance sales were soft in the U.K due to Brexit uncertainty and also in key North American regions stemming from government budget constraints. While polymer flooring sales were fairly flat in North America, they grew by double digits in Europe. Organic growth has slowed due to recent strategic decisions to exit certain international businesses and discontinued product lines reduced sales by approximately 1.0%.

Consumer segment net sales for the quarter grew by 6.0% to ~~$385.0~~$450.9 million, from ~~$363.4~~$425.3 million during last year’s ~~third~~second quarter. ~~Recent~~Organic growth provided 6.4% during the current quarter while recent acquisitions provided ~~2.7%~~0.6% of the growth in net ~~sales, while organic growth provided 5.3%, during the current quarter, driven primarily by new accounts and market share gains.~~sales. Unfavorable foreign currency impacted net sales in the ~~consumer~~Consumer segment by ~~2.0%~~1.0% during the current quarter versus the same period a year ago. Increased sales volume resulting from more favorable weather early in this year’s second quarter were slightly dampened due to the soft economy in the U.K. related to Brexit.

Specialty segment net sales for the quarter ~~grew~~decreased by ~~2.7%~~11.1% to ~~$174.7~~$158.2 million, from ~~$170.1~~$178.0 million during last year’s ~~third~~second quarter. ~~Recent acquisitions provided 3.4% of the growth in net~~Organic sales ~~while organic growth provided 0.6%~~declined 10.5% during the current quarter. ~~Organic growth~~Nearly all of the decline can be traced to natural disasters which elevated sales in ~~net sales was driven by increases~~the prior year at our water damage restoration business, due to the heavier hurricane activity in the prior year, and in our fluorescent pigments, which are used in fire retardant tracer dyes and ~~marine coatings businesses. Foreign~~experienced more rampant wild fires last year. Our OEM-related businesses have experienced soft sales in line with declining global industrial production. Additionally, foreign currency had an unfavorable impact on ~~specialty~~Specialty segment net sales for the quarter ~~by 1.3%~~of 0.6%.

Gross Profit Margin Our consolidated gross profit margin of ~~39.1%~~37.8% of net sales for the ~~third~~second quarter of fiscal ~~2019~~2020 compares to a consolidated gross profit margin of ~~39.9%~~36.2% for the comparable period a year ~~ago. This~~ago, after giving effect to the change in classification of shipping and handling costs. Last year’s reported gross profit ~~decline~~margin of 39.5% has been recast to 36.2% in order to reflect the current year change in accounting principle related to shipping costs, which were previously recognized in SG&A expenses and are now recognized in cost of sales. The current quarter gross profit margin increase of approximately ~~0.8%~~1.6% of net sales, ~~primarily reflects current-quarter margins that were burdened by the impact of overall higher raw material costs for approximately 120~~or 160 basis points (“bps”), ~~which partially offset~~resulted primarily from a combination of increases in selling ~~price increases. Additionally, in relation~~prices and 2020 MAP to ~~our restructuring initiatives undertaken during fiscal 2018 and continuing into~~Growth savings, along with higher sales volume versus the third quarter of fiscal 2019, as further described in Note 3, “Restructuring,” inventory-related charges totaling 20 bps impacted the current-quarter gross profit margin, which mainly included product line rationalization at our industrial segment. The remainder of the decline in gross profit margin of approximately 50 bps, resulted from an unfavorable mix of product sold versus last year.same period a year ago. Recent changes in international trade duties, tariffs, and policies could materially impact the cost of our raw materials. Specifically, recently imposed tariffs, including tariffs on steel imports into the U.S., ~~will likely~~ have had an unfavorable impact on the cost of our cans and packaging.

~~Selling, General and Administrative Expenses (“~~SG~~&A”)~~&A Our consolidated SG&A expense during the current period was ~~$27.9~~$17.5 million higher versus the same period last year, and increased to ~~36.0%~~28.8% of net sales from ~~34.8%~~28.3% of net sales for the prior year quarter. Last year’s reported SG&A percentage of net sales of 31.6% has been recast to 28.3% in order to reflect the current year change in accounting principle related to shipping and handling costs, which were previously recognized in SG&A expenses and are now recognized in cost of sales. During the ~~third~~second quarter of fiscal ~~2019,~~2020, we continued our 2020 MAP to ~~Growth. In connection with this plan, we incurred~~Growth initiatives and have generated incremental savings of approximately $5.1 million, which is net of implementation costs for ERP ~~implementation and~~systems, consolidation expenses and professional fees in connection with implementing our 2020 MAP to Growth ~~initiative totaling approximately $9.0 million.~~initiative. Additional SG&A expense incurred from companies we acquired during the ~~previous~~last 12 months approximated ~~$8.2~~$2.1 million during the ~~third~~second quarter of fiscal ~~2019. There was also higher advertising and distribution expense on higher sales volume during the third quarter of fiscal 2019.~~2020.

Our ~~industrial~~CPG segment SG&A was approximately ~~$5.2~~$7.6 million higher for the ~~third~~second quarter of fiscal ~~2019~~2020 versus the comparable prior year period but decreased as a percentage of net sales, mainly due to additional commissions directly associated with higher sales volume. Additionally, companies acquired during the past 12 months contributed approximately $1.6 million of additional SG&A expense.

Our PCG segment SG&A was approximately $0.2 million higher for the second quarter of fiscal 2020 versus the comparable prior year period and increased as a percentage of net sales, mainly due to transactional FX, as well as increases in ~~warranty~~bonus and commission expense ~~as well as an unfavorable swing in transactional foreign exchange, slightly~~versus the prior year. These increases were partially offset by ~~a decrease as a result in a reduction in workforce. Further contributing~~2020 MAP to ~~these increases was approximately $0.9 million of additional SG&A expense generated from companies acquired during the past 12 months.~~Growth savings.

Our ~~consumer~~Consumer segment SG&A increased by approximately ~~$9.2~~$10.1 million during the ~~third~~second quarter of fiscal ~~2019~~2020 versus the same period last year and increased as a percentage of net sales. This was primarily attributable to ~~higher~~increases in commissions, distribution and ~~advertising~~interplant freight expenses ~~when compared~~as a result of higher volume. In addition, during the current quarter, we decided to no longer pursue a product line targeted for OEM markets. We performed a recoverability assessment for certain prepaid assets associated with this product line, which resulted in the ~~prior year quarter, as well as approximately $3.8~~recognition of a $6.9 million ~~of additional SG&A expense generated from~~charge this quarter. Lastly, companies acquired during the past 12 ~~months.~~ months contributed approximately $0.4 million of additional SG&A expense.

Our ~~specialty~~Specialty segment SG&A was approximately ~~$1.5~~$1.2 million higher during the ~~third~~second quarter of fiscal ~~2019~~2020 versus the comparable prior year period ~~but remained fairly flat~~and increased as a percentage of net sales. The increase in SG&A expense is mainly attributable to ~~the $3.5 million of~~ additional ~~SG&A expense generated from recent acquisitions,~~costs associated with the ERP consolidation plan associated with our 2020 MAP to Growth, ~~and increased promotional expenses related to new product initiatives.~~ partially offset by cost control measures.

SG&A expenses in our corporate/other category of ~~$27.6~~$25.3 million during the ~~third~~second quarter of fiscal ~~2019 increased~~2020 decreased by ~~$12.0~~$1.5 million from ~~$15.6~~$26.8 million recorded during last year’s ~~third~~second quarter, resulting primarily from a decrease in professional fees in connection with our 2020 MAP to Growth, ~~initiative,~~ which approximated ~~$7.4 million. Additionally,~~$3.3 million, compared to $5.2 million in ~~last year’s third quarter, we reversed $3.4 million of long-term incentive compensation when it became clear that~~ the ~~targeted goals would not be reached.~~ prior comparable quarter.

We recorded total net periodic pension and postretirement benefit costs of ~~$11.4~~$13.1 million and ~~$10.8~~$11.4 million for the ~~third~~second quarter of fiscal ~~2019~~2020 and ~~2018,~~2019, respectively. The ~~$0.6~~$1.7 million increase in pension expense resulted from ~~an approximate $1.4 million increase in interest cost, partially offset by~~ the combination of ~~lower~~higher net actuarial losses recognized during the current quarter versus last year’s ~~third~~second quarter for approximately ~~$0.4~~$1.6 million and a higher ~~expected return on increased plan assets~~service costs of approximately $0.7 million during the current quarter versus the same period ~~last~~a year ~~for~~ago. These increases were partially offset by a decrease of approximately ~~$0.4 million.~~$0.6 million in interest costs during the current quarter, when compared to the same period a year ago. 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, but such changes are not expected to be material to our consolidated financial results.

Restructuring Charges We recorded restructuring charges of ~~$8.7~~$4.8 million during the ~~third~~second quarter of fiscal ~~2019,~~2020, which compares with $7.7 million during the second quarter of fiscal 2019. These charges were the result of our continued implementation of ~~a multi-year restructuring plan,~~ our 2020 MAP to Growth, which focuses upon strategic shifts in operations across our entire business. On a consolidated basis, we incurred ~~$3.4~~$2.7 million of severance and benefit costs ~~$4.3~~during the second quarter of fiscal 2020 compared with $6.5 million ~~of facility~~during the same period a year ago. Facility closure and other related costs ~~and $0.9~~totaled $1.8 million during the second quarter of fiscal 2020 versus $1.0 million during the second quarter of fiscal 2019. Finally, $0.3 million of other asset write-offs during the ~~period.~~period compared with $0.2 million during the same period a year ago. These charges were associated with closures of certain facilities as well as the elimination of duplicative headcount and infrastructure associated with certain of our businesses.

We currently expect to incur approximately ~~$14.4~~$32.2 million of future additional charges in relation to this initiative. These additional charges include approximately ~~$8.9~~$23.1 million of severance and benefit costs, $8.3 million of facility closure and other related charges, ~~$3.9 million of severance and benefit costs,~~ as well as ~~$1.6~~$0.8 million of other asset write-offs. We expect these charges to be incurred by the end of calendar year 2020, upon which we expect to achieve an annualized pretax savings of approximately $290 million per year. Additionally, upon the completion of this initiative, we have targeted ~~$30.0~~$230.0 million of improvement of working capital, and believe that, assuming 3% organic growth and approximately $150 million to $200 million annually in acquisitions of businesses, our fiscal year 2021 cash flow from operations will improve to approximately $872.0 million. In addition, we have continued to assess and find areas of improvement and cost savings as part of our 2020 MAP to ~~Growth restructuring plan.~~Growth. As such, the final implementation and expected costs of our plan are subject to change. Most notably, we have broadened the scope of our announced plan to include the consolidation of the general and administrative areas, potential outsourcing, as well as additional future plant closures and ~~consolidations;~~consolidations, the estimated future costs of which have not yet been established. See Note 3,4, “Restructuring,” to the ~~consolidated financial statements,~~Consolidated Financial Statements, for further detail surrounding our 2020 MAP to ~~Growth restructuring plan.~~ Growth.

Interest Expense Interest expense was ~~$26.5~~$26.3 million for the ~~third~~second quarter of fiscal ~~2019~~2020 versus ~~$27.5~~$23.1 million for the same period a year ago. Excluding acquisition-related borrowings, ~~which carried~~ higher ~~average interest financing costs, lower~~ average borrowings quarter over quarter ~~decreased~~increased interest expense by approximately ~~$4.7~~$1.1 million during the ~~third~~second quarter of fiscal ~~2019~~2020 when compared to the prior year quarter. The reversal of the convertible bond interest accrual during the second quarter of fiscal 2019 increased interest expense by approximately $2.1 million versus the same period a year ago. Higher average borrowings, related to recent acquisitions, increased interest expense during this year’s ~~third~~second quarter by approximately ~~$1.8~~$0.6 million versus the same period a year ago. ~~Higher~~Lower interest rates, which averaged ~~4.61%~~3.88% overall for the ~~third~~second quarter of fiscal ~~2019~~2020 compared with ~~4.37%~~3.99% for the same period of fiscal ~~2018, increased~~2019, decreased interest expense by approximately ~~$1.9~~$0.6 million during the current quarter versus the same period last year.

Investment (Income), Net Net investment income of approximately ~~$4.7~~$8.8 million for the ~~third~~second quarter of fiscal ~~2019~~2020 compares to net investment ~~income~~loss of ~~$5.5~~$7.0 million during the same period last year. Dividend and interest income totaled ~~$3.0~~$1.9 million and ~~$3.6~~$1.5 million for the ~~third~~second quarter of fiscal ~~2019~~2020 and ~~2018,~~2019, respectively. Net gains on marketable securities totaled ~~$1.7~~$6.9 million during the ~~third~~second quarter of fiscal ~~2019,~~2020, while there were net realized ~~gains~~losses of ~~$1.9~~$8.5 million during the same period a year ago.

Income Before Income Taxes (“IBT”) Our consolidated pretax income for the ~~third~~second quarter of fiscal ~~2019~~2020 of ~~$4.5~~$101.8 million compares with pretax income of ~~$34.7~~$66.6 million for the same period a year ago.

Our ~~industrial~~CPG segment had IBT of ~~$11.4~~$57.1 million, or ~~2.0%~~11.4% of net sales, for the quarter ended ~~February 28,~~November 30, 2019, versus IBT of ~~$17.8~~$35.4 million, or ~~3.1%~~7.6% of net sales, for the same period a year ago. Our ~~industrial~~CPG segment results reflect 2020 MAP to Growth savings, selling price increases and increased ~~sales volume, which were offset by the impact~~earnings from ~~higher raw material costs, warranty expense, and restructuring charges.~~recent acquisitions. Our ~~consumer~~PCG segment had IBT ~~approximated $23.2~~of $33.3 million, or 6.0% of net sales, for the third quarter of fiscal 2019, versus the prior year third quarter pretax income of $29.1 million, or 8.1% of net sales. The current quarter result includes market share gains, as demonstrated by the increase in sales volume, which were more than offset by rising raw material costs, advertising, distribution and restructuring charges. Our specialty segment had pretax income of $17.1 million, or 9.8%11.4% of net sales, for the quarter ended ~~February 28,~~November 30, 2019, versus IBT of $22.3 million, or 7.6% of net sales, for the same period a year ago. Our PCG segment results reflect 2020 MAP to Growth savings, selling price increases and improved product mix. Our Consumer segment IBT approximated $34.5 million, or 7.6% of net sales, for the second quarter of fiscal 2020, versus the prior year second quarter pretax income of $41.8 million, or 9.8% of net sales. Our Consumer segment results reflect the cost incurred to shut down a product line and inventory-related charges, partially offset by selling price increases as well as 2020 MAP to Growth savings. Our Specialty segment had pretax income of $18.8 million, or 11.9% of net sales for the quarter ended November 30, 2019, versus pretax income of ~~$22.8~~$26.1 million, or ~~13.4%~~14.7% of net sales, for the same period a year ago, reflecting ~~rising raw material costs~~declines in sales volume in our fluorescent pigment, restoration equipment and ~~the costs associated with restructuring, the ERP consolidation plan and new product initiatives.~~OEM businesses.

Income Tax Rate On December 22, 2017 the Act was enacted into law. The income tax effects of changes in tax laws are recognized in the period when enacted. The Act provides for numerous significant tax law changes and modifications with varying effective dates. Generally, the more significant provisions of the Act that impacted us for the year ended May 31, 2018 included the reduction in the corporate income tax rate from 35% to 21%, the creation of a territorial tax system (with a one-time mandatory tax on previously deferred foreign earnings) and allowance for immediate capital expensing of certain qualified property. The corporate tax rate reduction was effective for RPM as of January 1, 2018 and, accordingly, reduced our fiscal year 2018 federal statutory rate to a blended rate of approximately 29.2%. The significant provisions of the Act which impact us for fiscal 2019 include the full federal statutory rate reduction to 21% and the repeal of the domestic production activities deduction. Also effective for our fiscal 2019 are provisions of the Act that subject us to current U.S. tax on GILTI earned by certain foreign subsidiaries and allows a benefit for FDII.

During the three months ended February 28, 2019 we recorded a net discrete income tax benefit of $8.1 million. Refer to Note 9, “Income Taxes,” to the Consolidated Financial Statements for additional disclosures and discussion regarding the Act, the provisional income tax expense recorded as of May 31, 2018 and our completion of the SAB 118 accounting for the Act during this fiscal 2019 third quarter.

The effective income tax ~~benefit~~ rate of ~~224.7%~~24.0% for the three months ended ~~February 28,~~November 30, 2019 compares to the effective income tax ~~benefit~~ rate of ~~17.0%~~26.2% for the three months ended ~~February 28,~~November 30, 2018. The effective income tax ~~benefit rate of 224.7%~~rates for the three months ended ~~February 28,~~November 30, 2019 ~~reflects~~and 2018 reflect variances from the 21% statutory rate due primarily to the ~~favorable~~unfavorable impact of ~~$12.7 million of~~state and local income taxes and the net ~~discrete~~tax on foreign subsidiary income resulting from the global intangible low-taxed income provisions, partially offset by tax benefits ~~recorded during~~related to equity compensation. Additionally, the ~~quarter and the amplified impact of those~~effective income tax benefits on the relatively low level of pre-tax earnings. The $12.7 million net discrete tax benefits recorded are primarily comprised of the net $8.1 million benefit resulting from completion of our SAB 118 accountingrate for the ~~impact of the Act~~three months ended November 30, 2019 reflects favorable adjustments related to certain valuation allowances and ~~the release of certain income tax~~ reserves for uncertain tax positions. The effective income tax benefit rate of 17.0% for the three months ended February 28, 2018 reflects variances from the blended fiscal year 2018 statutory rate of 29.2% due primarily to the cumulative favorable impact of the statutory rate reduction from 35% to 29.2% which occurred during that prior period. Additionally, the 17.0% effective income tax benefit rate reflects a $1.4 million discrete tax benefit related to an adjustment to the net provisional estimate of the Act as recorded in the prior period and consistent with SAB 118.

Net Income Net income of ~~$14.5~~$77.3 million for the quarter ended ~~February 28,~~November 30, 2019 compares to net income of ~~$40.6~~$49.2 million for the comparable prior year period. Net loss attributable to noncontrolling interests approximated $0.3 million for the third quarter of fiscal 2019, which compared to net income attributable to noncontrolling interests of $0.4 million for the same period in fiscal 2018. Net income attributable to RPM International Inc. stockholders for the ~~third~~second quarter of fiscal ~~2019~~2020 was ~~$14.2~~$77.0 million, or ~~1.2%~~5.5% of consolidated net sales, which compared to net income of ~~$40.2~~$49.2 million, or ~~36%~~3.6% of consolidated net sales for the comparable prior year period.

Diluted earnings per share of common stock for the quarter ended ~~February 28,~~November 30, 2019 of ~~$0.11~~$0.59 compares with diluted earnings per share of common stock of ~~$0.30~~$0.37 for the quarter ended ~~February 28,~~November 30, 2018.

Net Sales Consolidated net sales of ~~$3,963.2~~$2,874.1 million for the first ~~nine months~~half of fiscal ~~2019~~2020 grew by approximately ~~5.3%~~1.8% from net sales of ~~$3,763.5~~$2,822.5 million for last year’s first ~~nine months.~~half. Acquisitions added ~~2.1%~~1.5%, while organic sales, which include the impact of price and volume, ~~improved~~reduced consolidated net sales by ~~5.1%~~1.6%. Consolidated net sales for ~~this year’s first nine months~~the period also ~~reflects~~reflect an unfavorable foreign exchange impact of ~~1.9%~~1.3%.

~~Industrial~~CPG segment net sales for ~~this year’s~~the first ~~nine months~~half of fiscal 2020 grew by ~~3.9%~~5.2% to ~~$2,080.8~~$1,035.6 million, from net sales of ~~$2,001.9~~$984.8 million during the same period a year ago. The improvement resulted from recent acquisitions, which contributed ~~1.5%~~2.9% to net sales during ~~this year’s first nine months,~~the current period, and organic growth, which contributed ~~5.0%~~3.9% during the period, driven mainly by increases in selling prices. Unfavorable foreign exchange impacted construction segment net sales by 1.6% during the current period. Sales growth was highest in our roofing and Brazilian businesses, but was partially offset by weakening sales in Europe.

PCG segment net sales for the first half of fiscal 2020 grew by 0.3% to $590.0 million, from net sales of $588.4 million during the same period a year ago. The improvement resulted from recent acquisitions, which contributed 1.0% to net sales during the current period, and organic growth, which contributed 1.0% during the period, driven mainly by ~~our North American commercial sealants and concrete admixture businesses, in addition to~~ the ~~recovery~~increases of ~~our industrial coatings business.~~selling prices over the comparable period last year. Unfavorable foreign exchange impacted ~~industrial~~PCG segment net sales by ~~2.6%~~1.7% during the current period. Sales growth was dampened by strategic decisions to exit low-margin businesses.

Consumer segment net sales for ~~this year’s~~the first ~~nine months~~half of fiscal 2020 grew by ~~8.0%~~3.1% to ~~$1,302.7~~$930.2 million, from ~~$1,205.9~~$902.6 million during ~~last year’s first nine months.~~the same period a year ago. Recent acquisitions provided ~~2.4%~~1.0% of the growth in net sales, while organic growth provided ~~7.0%~~3.1%, during the current period, driven primarily by ~~new accounts and market share gains.~~price increases. Unfavorable foreign currency impacted net sales in the ~~consumer~~Consumer segment by ~~1.4%~~1.0% during ~~this year’s first nine months~~the current period versus the same period a year ago. Sales improved in the U.S. but were slightly offset due to soft economy in the U.K. related to Brexit.

Specialty segment net sales for ~~this year’s~~the first ~~nine months grew~~half of fiscal 2020 decreased by ~~4.3%~~8.2% to ~~$579.7~~$318.3 million, from ~~$555.7~~$346.7 million during last year’s first ~~nine months. Recent acquisitions provided 4.3%~~half. Organic sales declines of ~~the growth in net sales, while organic growth provided 1.7%~~7.5%, during the current period, ~~despite the decrease~~resulted from decreases in ~~our~~fluorescent pigments and restoration equipment businesses, ~~serving the water damage restoration and equipment markets, which came~~ as a result of ~~more damaging hurricane~~elevated natural disaster activity ~~during~~in the first nine months of fiscal 2018. Organic growth in net sales was driven by our businesses providing fluorescent colorants, marine coatings, and decorative and protective wood coatings businesses. Foreignprior year. Additionally, foreign currency had an unfavorable impact on ~~specialty~~Specialty segment net sales for the period byof 0.7%.

Gross Profit Margin Our consolidated gross profit margin of ~~39.8%~~38.4% of net sales for the first ~~nine months~~half of fiscal ~~2019~~2020 compares to a consolidated gross profit margin of ~~41.5%~~37.0% for the comparable period a year ~~ago.~~ago, after giving effect to the change in classification of shipping and handling costs. Last year’s reported gross profit margin of 40.1% has been recast to 37.0% in order to reflect the current year change in accounting principle related to shipping and handling costs, which were previously recognized in SG&A expenses and are now recognized in cost of sales. This gross profit ~~decline~~increase of approximately ~~1.7%~~1.4% of net sales ~~primarily~~ reflects ~~current-period margins that were burdened~~an improvement of approximately 340 bps resulting from a combination of increases in selling prices and 2020 MAP to Growth savings, partially offset by the impact of ~~overall~~labor cost inflation and unfavorable mix of product sold versus last year for approximately 40 bps, in addition to higher raw material costs for approximately ~~140~~40 bps ~~which partially offset selling price increases. Additionally, in relation to our restructuring initiatives undertaken during~~and supply chain challenges throughout the fourth quarter of fiscal 2018 and continuing into the first nine months of fiscal 2019, as further described in Note 3, “Restructuring,” inventory-related charges totaling 30 bps impacted the current-year gross profit margin, which mainly included product line rationalization at our industrial segment. We anticipate that rising raw material prices will continue to trend upward due to higher petrochemical costs, rising global demand and recentperiod for approximately 40 bps. Recent changes in international trade duties and policies ~~which~~ could materially impact the cost of our raw materials. Specifically, recently imposed tariffs, including tariffs on steel imports into the U.S., ~~will likely~~ have had an unfavorable impact on the cost of our cans and packaging.

SG&A Our consolidated SG&A expense during the first ~~nine months~~half of fiscal ~~2019~~2020 was ~~$103.7~~$3.0 million higher versus the same period last year, ~~and increased~~but decreased to ~~32.8%~~28.0% of net sales from ~~31.8%~~28.4% of net sales for the comparable ~~prior~~ period. Last year’s first half reported SG&A percentage of net sales of 31.5% has been recast to 28.4% in order to reflect the current year change in accounting principle related to shipping and handling costs, which were previously recognized in SG&A expenses and are now recognized in cost of sales. During the first ~~nine months~~half of fiscal ~~2019,~~2020, we continued our 2020 MAP to ~~Growth. In connection with this plan, we incurred~~Growth and have generated $11.4 million of incremental savings, which is net of implementation costs for ERP ~~implementation and~~systems, consolidation expenses ~~increases in allowances for doubtful accounts,~~ and professional fees in connection with implementing our 2020 MAP to Growth initiative and the negotiation of a cooperation agreement with an activist stockholder totaling approximately $27.4 million. Also, during the first nine months of fiscal 2019, we incurred higher costs of approximately $10.0 million related to unfavorable legal settlements and associated legal fees when compared to the prior year period.initiative. Additional SG&A expense incurred from companies acquired during the previous 12 months approximated ~~$22.0~~$7.5 million during the first ~~nine months~~half of fiscal 2019. There was also higher distribution and commission expense on higher sales volume during the first nine months of fiscal 2019, in addition to higher bad debt and advertising expense when compared to the prior year period. Finally, transactional foreign exchange resulted in an unfavorable variance of approximately $2.4 million compared to the prior year period.2020.

Our ~~industrial~~CPG segment SG&A was approximately ~~$26.8~~$6.1 million higher for the first ~~nine months~~half of fiscal ~~2019~~2020 versus the comparable prior year period ~~and increased~~but decreased as a percentage of net sales, mainly due to increased commissions directly associated with higher sales volume, partially offset by 2020 MAP to Growth savings in the ~~increased~~current period. Additionally, companies acquired during the past 12 months contributed approximately $5.3 million of additional SG&A expense.

Our PCG segment SG&A was approximately $8.2 million lower for the first half of fiscal 2020 versus the comparable prior year period and decreased as a percentage of net sales, mainly due to 2020 MAP to Growth savings in the current period, decreased allowance for doubtful accounts associated with accounts deemed uncollectible as a result of changes in our market and leadership strategy ~~which approximated $6.7 million. Additionally, there was also higher distribution expense~~ and unfavorable transactional foreign ~~exchange.~~exchange that occurred in the prior comparable period. These decreases were slightly offset by approximately $0.4 million of additional SG&A expense generated from companies acquired during the past 12 ~~months approximated $5.8 million.~~months.

Our ~~consumer~~Consumer segment SG&A increased by approximately ~~$39.3~~$4.3 million during the first ~~nine months~~half of fiscal ~~2019~~2020 versus the same period last year ~~and increased~~but decreased as a percentage of net sales. This was primarily attributable to the combined impact of unfavorable legal settlements and associated legal fees incurred during the first nine months of fiscal 2019, which totaled approximately $10.0 million. Additional SG&A expense from recent acquisitions approximated $9.4 millionincreases in distribution costs. In addition, during the current ~~year~~period, we decided to no longer pursue a product line targeted for OEM markets. We performed a recoverability assessment for certain prepaid assets associated with this product line, which resulted in the recognition of a $6.9 million charge this period. ~~Additionally, there was higher distribution expense on higher sales volume, as well as higher advertising expense when compared~~These increases were partially offset by 2020 MAP to Growth savings. Lastly, companies acquired during the ~~prior year.~~ past 12 months contributed approximately $1.8 million of additional SG&A expense.

Our ~~specialty~~Specialty segment SG&A was approximately ~~$8.8~~$1.1 million higher during the first ~~nine months~~half of fiscal ~~2019~~2020 versus the comparable prior year period, and increased ~~slightly~~ as a percentage of net sales. The increase in SG&A expense is mainly attributable to ~~$6.7 million of~~ additional ~~SG&A from recent acquisitions,~~costs associated with the ERP consolidation plan associated with our 2020 MAP to Growth ~~increased distribution costs and increased expenses related to new product initiatives.~~ partially offset by cost control measures.

SG&A expenses in our corporate/other category of ~~$81.8~~$53.8 million during the first ~~nine months~~half of fiscal ~~2019 increased~~2020 decreased by ~~$28.8~~$0.4 million from ~~$53.0~~$54.2 million recorded during last year’s first ~~nine months, resulting primarily from~~half, as higher professional fees in connection with our 2020 MAP to Growth ~~initiative and the negotiation of an activist shareholder cooperation agreement, which approximated $16.9 million. Additionally, there~~ were ~~increases in pension expense,~~offset by lower hospitalization ~~costs and legal fees. Finally, in the prior year, we reversed out $3.4 million of long-term incentive compensation when it became clear that the targeted goals would not be reached.~~costs.

We recorded total net periodic pension and postretirement benefit costs of ~~$34.1~~$26.2 million and ~~$32.4~~$22.8 million for the first ~~nine months~~half of fiscal ~~2019~~2020 and ~~2018,~~2019, respectively. The ~~$1.7~~$3.5 million increase in pension expense resulted from ~~an approximate $4.4 million increase in interest cost, partially offset by~~ the combination of ~~lower~~higher net actuarial losses recognized during the current first half versus last year’s first half for approximately $3.2 million and a higher service costs of approximately $1.4 million during the current period versus the same period ~~last~~a year ~~for~~ago. These increases were partially offset by a decrease of approximately ~~$1.3~~$1.2 million ~~and a higher expected return on increased plan assets~~in interest costs during the current period, ~~versus~~when compared to the same period ~~last~~a year ~~for approximately $1.4 million.~~ago. 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, but such changes are not expected to be material to our consolidated financial results.

Restructuring Charges We recorded restructuring charges of ~~$36.5~~$11.4 million during the first ~~nine months~~half of fiscal ~~2019,~~2020, which compares with $27.8 million during the first half of fiscal 2019. These charges were the result of our continued implementation of our 2020 MAP to Growth, which focuses upon strategic shifts in operations across our entire business. On a consolidated basis, we incurred ~~$29.0~~$6.5 million of severance and benefit costs ~~$5.8~~during the first half of fiscal 2020 compared with $25.6 million ~~of facility~~during the same period a year ago. Facility closure and other related costs ~~and $1.7~~totaled $4.6 million during the first half of fiscal 2020 versus $1.5 million during the first half of fiscal 2019. Finally, $0.3 million of other asset ~~write-offs.~~write-offs during the period compared with $0.7 million during the same period a year ago. These charges were associated with closures of certain facilities as well as the elimination of duplicative headcount and infrastructure associated with certain of our businesses.

For further information and detail about the 2020 MAP to Growth restructuring plan, see “Restructuring Charges” in Results of Operations – Three Months Ended ~~February 28,~~November 30, 2019, and Note 3,4, “Restructuring,” to the ~~Condensed~~Consolidated Financial Statements.

Interest Expense Interest expense was ~~$74.1~~$54.7 million for the first ~~nine months~~half of fiscal 2020 versus $47.5 million for the same period a year ago. The reversal of the convertible bond interest accrual during the first half of fiscal 2019 ~~versus $80.6~~increased interest expense by approximately $2.1 million ~~for~~versus the same period a year ago. Excluding acquisition-related borrowings, higher average borrowings period over period increased interest expense by approximately $3.4 million during the first half of fiscal 2020 versus the comparable period a year ago. Higher average borrowings, related to recent acquisitions, increased interest expense during this year’s first ~~nine months~~half by approximately ~~$4.1~~$1.3 million versus the same period a year ago. The reversal of the convertible bond interest accrual decreased interest expense by approximately $2.1 million during this year’s first nine months versus the comparable prior year period. Excluding acquisition-related borrowings, which carried higher average interest financing costs, lower average borrowings period over period decreased interest expense by approximately $8.1 million during the first nine months of fiscal 2019 when compared to the prior comparable period. LowerHigher interest rates, which averaged ~~4.24%~~4.00% overall for the first ~~nine months~~half of fiscal ~~2019~~2020 compared with ~~4.35%~~3.99% for the same period of fiscal ~~2018, decreased~~2019, increased interest expense by approximately ~~$0.5~~$0.3 million during the current period versus the same period last year.

Investment (Income), Net Net investment income of approximately ~~$0.1~~$14.2 million for the first ~~nine months~~half of fiscal ~~2019~~2020 compares to net investment losses of $4.6 million during the same period last year. Dividend and interest income totaled $3.7 million and $3.5 million for the first half of ~~$13.7~~fiscal 2020 and 2019, respectively. Net gains on marketable securities totaled $10.5 million during the first half of fiscal 2020, while there were net realized losses of $8.1 million during the same period a year ago. Dividend and interest income totaled $6.6 million and $6.9 million for the first nine months of fiscal 2019 and 2018, respectively. Net losses on marketable securities totaled $6.5 million during the first nine months of fiscal 2019, compared to net realized gains on the sales of investments of $6.8 million during the same period a year ago.

~~Other Expense (Income), Net~~ Other expense of $4.1 million for the nine months ended February 28, 2019 compares with other income of $0.6 million for the corresponding period a year ago. The current period expense includes a loss on extinguishment of debt of $3.1 million, which related to the fair value measurement of our 2.25% convertible senior notes due 2020 on their conversion date of November 27, 2018.

IBT Our consolidated pretax income for the first ~~nine months~~half of fiscal ~~2019~~2020 of ~~$163.0~~$244.6 million compares with pretax income of ~~$299.2~~$158.5 million for the same period a year ago.

Our ~~industrial~~CPG segment had IBT of ~~$134.8~~$139.8 million, or ~~6.5%~~13.5% of net sales, for the ~~nine~~six months ended ~~February 28,~~November 30, 2019, versus IBT of ~~$174.4~~$100.4 million, or ~~8.7%~~10.2% of net sales, for the same period a year ago. Our ~~industrial~~CPG segment results reflect 2020 MAP to Growth savings, selling price increases and increased earnings from recent acquisitions. Our PCG segment had IBT of $61.4 million, or 10.4% of net sales, ~~volume, which were offset by~~for the ~~impact from higher raw material costs, restructuring~~six months ended November 30, 2019, versus IBT of $30.6 million, or 5.2% of net sales, for the same period a year ago. Our PCG segment results reflect 2020 MAP to Growth savings and ~~unfavorable transactional foreign exchange expense.~~selling price increases. Our ~~consumer~~Consumer segment IBT approximated ~~$115.7~~$93.6 million, or ~~8.9%~~10.1% of net sales, for the first ~~nine months~~half of fiscal ~~2019,~~2020, versus the prior ~~year’s~~year first ~~nine months~~half pretax income of ~~$146.6~~$92.8 million, or ~~12.2%~~10.3% of net sales. The ~~current~~prior period results ~~include market share gains, as demonstrated by~~reflect the ~~increase in sales volume, which were more than offset by rising raw material costs,~~ unfavorable legal settlements ~~higher advertising~~ and ~~distribution costs, as well as restructuring charges.~~related legal fees of approximately $10.0 million. Our ~~specialty~~Specialty segment had pretax income of ~~$74.9~~$42.1 million, or ~~12.9%~~13.2% of net sales for the ~~nine~~six months ended ~~February 28,~~November 30, 2019, versus pretax income of ~~$90.4~~$49.9 million, or ~~16.3%~~14.4% of net sales, for the same period a year ago, reflecting ~~rising raw material costs, higher distribution costs, restructuring charges~~declines in sales volume in our fluorescent pigment, restoration equipment and ~~the costs associated with the ERP consolidation plan.~~specialty coatings businesses.

Income Tax RateOn December 22, 2017 the Act was enacted into law. The income tax effects of changes in tax laws are recognized in the period when enacted. The Act provides for numerous significant tax law changes and modifications with varying effective dates. Generally, the more significant provisions of the Act that impacted us for the year ended May 31, 2018 included the reduction in the corporate income tax rate from 35% to 21%, the creation of a territorial tax system (with a one-time mandatory tax on previously deferred foreign earnings) and allowance for immediate capital expensing of certain qualified property. The corporate tax rate reduction was effective for RPM as of January 1, 2018 and, accordingly, reduced our fiscal year 2018 federal statutory rate to a blended rate of approximately 29.2%. The significant provisions of the Act which impact us for fiscal 2019 include the full federal statutory rate reduction to 21% and the repeal of the domestic production activities deduction. Also effective for our fiscal 2019 are provisions of the Act that subject us to current U.S. tax on GILTI earned by certain foreign subsidiaries and allows a benefit for FDII.

Subsequent to the enactment of the Act, the SEC issued SAB 118, which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act’s enactment date for companies to complete the applicable accounting under ASC 740. In accordance with SAB 118 and based on the information available as of May 31, 2018, we recorded a net provisional income tax expense of $7.3 million in accordance with the applicable provisions of the Act.

The effective income tax rate of ~~17.8%~~24.9% for the ~~nine~~six months ended ~~February 28,~~November 30, 2019 compares to the effective income tax rate of ~~15.3%~~24.7% for the ~~nine~~six months ended ~~February 28,~~November 30, 2018. The effective income tax ~~rate~~rates for the ~~nine~~six months ended ~~February 28,~~November 30, 2019 ~~reflects~~and 2018 reflect variances from the 21% statutory rate due primarily to $16.5 million of net discrete tax benefits, which are comprised of a $12.7 million net tax benefit recorded in the current quarter, with the remaining balance being recorded in the prior quarters of this fiscal year. The $12.7 million net discrete benefits recorded in the current quarter are primarily comprised of the net $8.1 million benefit resulting from completion of our SAB 118 accounting for the impact of the Act and the release of certain income tax reserves for uncertain tax positions. These discrete tax benefits were partially offset primarily by the unfavorable impact of state and local income taxes and ~~incremental valuation allowances associated with certain~~the net tax on foreign ~~net operating losses. The effective~~subsidiary income ~~tax rate for the nine months ended February 28, 2018 reflects variances~~resulting from the ~~29.2% statutory rate due primarily to $27.0 million in discrete~~global intangible low-taxed income provisions, partially offset by tax benefits ~~recorded in connection with the implementation of a foreign legal entity restructuring and corresponding planning strategy.~~related to equity compensation.

Net Income Net income of ~~$133.9~~$183.8 million for the ~~nine~~six months ended ~~February 28,~~November 30, 2019 compares to net income of ~~$253.3~~$119.4 million for the comparable prior year period. Net income attributable to ~~noncontrolling interests approximated $0.7 million and $1.2 million for the first nine months of fiscal 2019 and 2018, respectively. Net income attributable to~~ RPM International Inc. stockholders for the first ~~nine months~~half of fiscal ~~2019~~2020 was ~~$133.2~~$183.2 million, or ~~3.4%~~6.4% of consolidated net sales, which compared to net income of ~~$252.1~~$119.0 million, or ~~6.7%~~4.2% of consolidated net sales for the comparable prior year period.

Diluted earnings per share of common stock for the ~~nine~~six months ended ~~February 28,~~November 30, 2019 of ~~$1.00~~$1.41 compares with diluted earnings per share of common stock of ~~$1.87~~$0.89 for the ~~nine~~six months ended ~~February 28,~~November 30, 2018.

Approximately ~~$145.5~~$300.2 million of cash was provided by operating activities during the first ~~nine months~~half of fiscal ~~2019,~~2020, compared with ~~$140.7~~$148.3 million of cash provided by operating activities during the same period last year.

includes the change in net income, which ~~decreased~~increased by ~~$119.5~~$64.5 million during the first ~~nine months~~half of fiscal ~~2019~~2020 versus the same period during fiscal ~~2018.~~2019. During the first ~~nine months~~half of fiscal ~~2019,~~2020, we recorded ~~$36.5~~$11.4 million in restructuring charges and made cash payments of ~~$27.2~~$13.1 million related to our 2020 MAP to Growth, as further described in Note 3,4, “Restructuring.” Changes in working capital accounts ~~and~~accounted for an improvement of approximately $146.2 million period over period, while all other accruals ~~provided~~and adjustments to reconcile net income used approximately ~~$51.4~~$58.8 million more cash flow during the first ~~nine months~~half of fiscal ~~2019~~2020 versus the same period last ~~year, which included additional contributions of $56.5 million made to the RPM Retirement Plan in the U.S. during February 2019.~~ year.

The change in accounts receivable during the first ~~nine months~~half of fiscal ~~2019~~2020 provided approximately ~~$13.7~~$91.4 million more cash than during the same period a year ago. This resulted from improved margin initiatives that shifted approximately $100.0 million in receipts from the fourth quarter of fiscal 2019 to the first quarter of fiscal 2020. Days sales outstanding (“DSO”) at ~~February 28,~~November 30, 2019 and 2018 was 62.8 days. While many of our businesses achieved decreases in DSO during the current period versus last year, those improvements were more than offset by increased DSO at our Consumer segment resulting from a reduction of the volume of cash collections subject to ~~71.0 days from 68.2 days at February 28, 2018.~~ early payment discounts.

During the first ~~nine months~~half of fiscal ~~2019,~~2020, we spent approximately ~~$40.4~~$7.9 million less cash for inventory compared to our spending during the same period a year ~~ago. This~~ago, which resulted primarily from the ~~combination of~~ timing of purchases by retail ~~customers and a systematic reduction of inventory levels at certain businesses in our consumer segment in connection with product rationalization initiatives.~~customers. Days of inventory outstanding (“DIO”) ~~at February 28, 2019 decreased to 118.8 days from 126.3~~was approximately 91.2 and 91.1 days at ~~February 28, 2018.~~November 30, 2019 and 2018, respectively. While many of our businesses improved their DIO by several days during the current quarter versus last year, those improvements were more than offset by inventory increases at certain of our other businesses in order to accommodate and maintain customer service levels, which are the result of plant consolidations occurring as part of our 2020 MAP to Growth.

The change in accounts payable during the first ~~nine months~~half of fiscal ~~2019~~2020 used approximately ~~$54.1~~$47.0 million ~~more~~less cash than during the first ~~nine months~~half of fiscal ~~2018,~~2019, resulting principally from the timing of certain ~~payments.~~payments as we continue to move toward a center-led procurement process that includes negotiating modified payment terms. Cash provided from operations, along with the use of available credit lines, as required, remain our primary sources of liquidity.

Capital expenditures, other than for ordinary repairs and replacements, are made to 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. During the first ~~nine months~~half of fiscal ~~2019,~~2020, we paid ~~$167.7~~$36.3 million for acquisitions, net of cash acquired, versus ~~$60.0~~$127.8 million during the comparable prior year period. Capital expenditures of ~~$84.5~~$71.4 million during the first ~~nine months~~half of fiscal ~~2019~~2020 compare with depreciation of ~~$71.9~~$53.1 million. In the comparable prior year period, capital expenditures were ~~$72.8~~$57.8 million, which compared with depreciation of ~~$61.1~~$49.6 million. We have been increasing, and will continue to increase, our capital spending in fiscal ~~2019~~2020, in an effort to ~~more aggressively invest in~~consolidate ERP systems and our ~~internal growth initiatives, especially in overseas markets, and consolidate production resulting from~~ plant ~~closings.~~footprint, as part of 2020 MAP to Growth. We anticipate that additional shifts at our production facilities, coupled with the capacity added through acquisition activity and our planned increase in future capital spending levels, will enable us to meet increased demand throughout fiscal ~~2019~~2020 and beyond.

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,~~November 30, 2019 and May 31, ~~2018,~~2019, the fair value of our investments in marketable securities totaled ~~$113.0~~$122.5 million and ~~$168.1~~$112.5 million, respectively. During the third quarter ended February 28, 2019, we liquidated $60.0 million of our captives’ investment portfolio, as a result of good claims experience and favorable investment performance. We used the $60.0 million in proceeds from the sale of investments to pay down a portion of our outstanding balance on our Revolving Credit Agreement. 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.

At February 28, 2019 and May 31, 2018, the fair value of our available-for-sale debt securities totaled $23.8 million and $23.5 million, respectively. Total pretax unrealized losses recorded in accumulated other comprehensive income at February 28, 2019 and May 31, 2018 were $0.4 million and $0.6 million, respectively. We regularly review our available-for-sale debt securities in unrealized loss positions in order to determine whether or not we have the ability and intent to hold these investments. That determination is based upon the severity and duration of the decline, in addition to our evaluation of the cash flow requirements of our businesses. Unrealized losses at February 28, 2019 were generally related to the normal volatility in valuations over the past several months for a portion of our portfolio of investments in marketable securities. The unrealized losses generally relate to investments whose fair values at February 28, 2019 were less than 15% below their original cost or that have been in a loss position for less than six consecutive months. From time to time, we may experience significant volatility in general economic and market conditions. If we were to experience unrealized losses that were to continue for longer periods of time, or arise to more significant levels of unrealized losses within our portfolio of investments in marketable securities in the future, we may recognize additional other-than-temporary impairment losses. As such, we continue to closely evaluate the status of our investments and our ability and intent to hold these investments.

As of ~~February 28,~~November 30, 2019, approximately ~~$176.0~~$190.5 million of our consolidated cash and cash equivalents were held at various foreign subsidiaries, compared with ~~$214.1~~$205.8 million at May 31, ~~2018.~~2019. 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.

Our available liquidity, including our cash and cash equivalents and amounts available under our committed credit facilities, stood at ~~$1.2 billion~~$822.0 million at ~~February 28,~~November 30, 2019, compared with ~~$1.01~~$1.28 billion at May 31, ~~2018. Our debt-to-capital ratio was 63.7% at February 28, 2019, compared with 57.1% at May 31, 2018.~~2019. During the current quarter, we used funds from our revolving credit facility to pay off our $450 million, 6.125% notes due in October 2019.

On February 27, 2019, we closed an offering for $350.0 million aggregate principal amount of 4.550% Notes due 2029 (the “2029 Notes”). The proceeds from the 2029 Notes were used to repay a portion of the outstanding borrowings under our revolving credit facility and for general corporate purposes. Interest on the 2029 Notes accrues from February 27, 2019 and is payable semiannually in arrears on March 1^st and September 1^st of each year ~~beginning September 1, 2019,~~ at a rate of 4.550% per year. The 2029 Notes mature on March 1, 2029. 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.

On December 20, 2017, we closed an offering for $300.0 million aggregate principal amount of 4.250% Notes due 2048 (the “2048 Notes”). The proceeds from the 2048 Notes were used to repay $250.0 million in principal amount of unsecured 6.50% senior notes due February 15, 2018, and for general corporate purposes. Interest on the 2048 Notes accrues from December 20, 2017 and is payable semiannually in arrears on January 15^th and July 15^th of each year ~~beginning July 15, 2018,~~ at a rate of 4.250% per year. The 2048 Notes mature on January 15, 2048. 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.

On March 2, 2017, we issued $50.0 million aggregate principal amount of 5.250% Notes due 2045 (the “2045 Notes”) and $400.0 million aggregate principal amount of 3.750% Notes due 2027 (the “2027 Notes”). The 2045 Notes are a further issuance of the $250 million aggregate principal amount of 5.250% Notes due 2045 initially issued by us on May 29, 2015. Interest on the 2045 Notes ~~accrues from December 1, 2016 and~~ is payable semiannually in arrears on June 1st and December 1st of each year ~~beginning June 1, 2017,~~ at a rate of 5.250% per year. The 2045 Notes mature on June 1, 2045. Interest on the 2027 Notes ~~accrues from March 2, 2017 and~~ is payable semiannually in arrears on March 15th and September 15th of each year, ~~beginning September 15, 2017,~~ at a rate of 3.750% per year. The 2027 Notes mature on March 15, 2027. 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.

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. Accordingly, during October 2019, we ~~intend to utilize~~utilized available funds from our Revolving Credit Facility to repay our $450 million unsecured 6.125% senior notes, which ~~mature~~matured on October 15, 2019. At ~~February 28,~~May 31, 2019, the outstanding balance on our 6.125% senior notes approximated ~~$451.1~~$450.5 million, which is included in the current portion of long-term debt on our consolidated balance sheets.

The Revolving Credit Facility requires us to comply with various customary affirmative and negative covenants, including a leverage covenant and interest coverage ratio, which are calculated in accordance with the terms as defined by the credit agreement. 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 1.0. During certain periods and per the terms of the Revolving Credit Facility, this ratio ismay be increased to 4.25 to ~~1.0.~~ 1.0 in the event of an acquisition for which the aggregate consideration is $100.0 million or greater. The minimum required consolidated interest coverage ratio for EBITDA to interest expense is 3.50 to 1. The interest coverage ratio is calculated at the end of each fiscal quarter for the four fiscal quarters then ~~ended using an~~ended. For purposes of these computations, EBITDA asis defined in the ~~credit agreement.~~Revolving Credit Facility.

As of ~~February 28,~~November 30, 2019, we were in compliance with all financial covenants contained in our Revolving Credit Facility, including the leverage and interest coverage ratio covenants. At that date, our leverage ratio was ~~3.36~~2.93 to 1, while our interest coverage ratio was ~~7.55~~7.59 to 1. Our available liquidity under our Revolving Credit Facility stood at ~~$949.4~~$513.8 million at ~~February 28,~~November 30, 2019.

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.

On May 9, ~~2017,~~2014, we entered into a ~~new, three-year,~~ $200.0 million accounts receivable securitization facility (the “AR Program”). The AR Program, which expires on May 8, 2020, was entered into pursuant to (1) a second amended and restated receivables sales agreement, dated as of May 9, 2014, and subsequently amended on August 29, 2014; November 3, 2015; December 31, 2016; and March 31, 2017 (the “Sale Agreement”), among certain of our subsidiaries (the “Originators”), and RPM Funding Corporation, a special purpose entity (the “SPE”) whose voting interests are wholly owned by us, and (2) an amended and restated receivables purchase agreement, dated as of May 9, 2014 and subsequently amended on February 25, 2015 and May 2, 2017 (the “Purchase Agreement”), among the SPE, certain purchasers from time to time party thereto (the “Purchasers”), and PNC Bank, National Association as administrative agent.

Under the Sale Agreement, the Originators may, during the term thereof, sell specified accounts receivable to the SPE, which may in turn, pursuant to the Purchase Agreement, transfer an undivided interest in such accounts receivable to the Purchasers. Once transferred to the SPE, such receivables are owned in their entirety by the SPE and are not available to satisfy claims of our creditors or creditors of the originating subsidiaries until the obligations owing to the participating banks have been paid in full. We indirectly hold a 100% economic interest in the SPE and will, along with our subsidiaries, receive the economic benefit of the AR Program. The transactions contemplated by the AR Program do not constitute a form of off-balance sheet financing, and will be fully reflected in our financial statements.

The maximum availability under the AR Program is $200.0 million. 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 $200.0 million of funding available under the AR Program.

As of ~~February 28,~~November 30, 2019, the outstanding balance under the AR Program was ~~$90.0~~$100.0 million, which compares with the maximum availability on that date of ~~$150.0~~$200.0 million.

The interest rate under the Purchase Agreement is based on the Alternate Base Rate, LIBOR Market Index Rate, one-month LIBOR or LIBOR for a specified tranche period, as selected by us, plus in each case a margin of 0.80%. In addition, ~~we are~~as set forth in an Amended and Restated Fee Letter, dated May 2, 2017 (the “Fee Letter”), the SPE is obligated to pay a monthly unused commitment fee to the Purchasers based on the daily amount of unused commitments under the Agreement, which ~~fee~~ ranges from 0.30% to 0.50% based on usage. The AR Program contains various customary affirmative and negative covenants, ~~and also contains~~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.~~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.

On December 9, 2013, we issued $205 million of 2.25% ~~convertible senior notes~~Convertible Senior Notes due 2020 (the “Convertible Notes”). We paid interest on the Convertible Notes semi-annually on June 15^th and December 15^th of each year.

We completed the redemption of all $205.0 million aggregate principal amount of our outstanding Convertible Notes on November 27, 2018 (the “Redemption Date”). The redemption price for the Convertible Notes was equal to 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest until, but excluding, the Redemption Date. As a result of the issuance of the notice of redemption, the Convertible Notes became convertible at any time prior to the close of business on November 26, 2018. The conversion rate was 19.221062 shares of RPM common stock per $1,000 original principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $52.12 per share (subject to adjustment in accordance with the terms of the Indenture). In accordance with the provisions of the indenture for the Convertible Notes, we elected to settle the Convertible Notes surrendered for conversion through a combination settlement of cash and shares of RPM common stock. In settlement of those conversions, we paid an aggregate of approximately $204.6 million in cash, including cash in lieu of fractional shares, and issued 598,601 shares of RPM common stock in the aggregate.

~~Under the terms~~On January 9, 2008, we announced our authorization of ~~our current~~a stock repurchase program under which we may repurchase shares of RPM International Inc. common stock at management’s ~~discretion for general corporate purposes.~~discretion. As announced on November 28, 2018, our goal is to return $1.0 billion in capital to stockholders by May 31, 2021 through share repurchases. On April 16, 2019, after taking into account share repurchases under our existing stock repurchase program to date, our Board of Directors authorized the repurchase of the remaining $600.0 million in value of RPM International Inc. common stock by May 31, 2021. As a result, we may repurchase shares from time to time in the open market or in private transactions at various times and in amounts and for prices that our management deems appropriate, subject to insider trading rules and other securities law restrictions. The timing of our purchases will depend upon prevailing market conditions, alternative uses of capital and other factors. We may limit or terminate the repurchase program at any time.

~~As announced on November 28, 2018, our goal is to return $1.5 billion in capital to stockholders by May 31, 2021 through dividends and share repurchases.~~ During the three months ended ~~February 28,~~November 30, 2019, we did not repurchase any shares of our common stock under this program. During the three months ended November 30, 2018, we repurchased ~~1,570,647~~1,144,952 shares of our common stock at a cost of approximately ~~$91.2~~$75.0 million, or an average cost of ~~$58.08~~$65.50 per share, under this program. During the ~~nine~~six months ended ~~February 28,~~November 30, 2019, we repurchased ~~2,819,045~~1,655,616 shares of our common stock at a cost of approximately ~~$173.2~~$100.0 million, or an average cost of ~~$61.45~~$60.40 per share, under this program. During the six months ended November 30, 2018, we repurchased 1,248,398 shares of our common stock at a cost of approximately $82.0 million, or an average cost of $65.68 per share, under this program.

We do not have any off-balance sheet financings for the year ended May 31, 2019, other than the minimum operating lease commitments as previously disclosed in our Form 10-K for the year ended May 31, ~~2018.~~2019. As of June 1, 2019, upon adoption of ASC 842, the minimum operating lease commitments are no longer off-balance sheet. 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.

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.”

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 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; and (k) 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, ~~2018,~~2019, 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.

We are exposed to market risk from changes in raw materials costs, interest rates and foreign exchange rates since we fund our operations through long- and short-term borrowings and conduct our business in a variety of foreign currencies. There were no material potential changes in our exposure to these market risks since May 31, ~~2018.~~2019.

Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of ~~February 28,~~November 30, 2019 (the “Evaluation Date”), have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports we file or submit under the Exchange Act (1) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (2) is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended ~~February 28,~~November 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As previously disclosed, we were notified by the SEC on June 24, 2014, that we are the subject of a formal investigation pertaining to the timing of our disclosure and accrual of loss reserves in fiscal 2013 with respect to the previously disclosed DOJ and GSA Office of Inspector General investigation into compliance issues relating to Tremco Roofing Division’s GSA contracts. As previously disclosed, our audit committee completed an investigation into the facts and circumstances surrounding the timing of our disclosure and accrual of loss reserves with respect to the GSA and DOJ investigations, and determined that it was appropriate to restate our financial results for the first, second and third quarters of fiscal 2013. These restatements had no impact on our audited financial statements for the fiscal years ended May 31, 2013 or 2014. The audit committee’s investigation concluded that there was no intentional misconduct on the part of any of our officers.

In connection with the foregoing, on September 9, 2016, the SEC filed an enforcement action in the U.S. District Court for the District of Columbia against us and our General Counsel. We have cooperated with the SEC’s investigation and believe the allegations in the complaint mischaracterize both our and our General Counsel’s actions in connection with the matters related to our quarterly results in fiscal 2013 and are without merit. The complaint seeks disgorgement of gains that may have resulted from the conduct alleged in the complaint, and payment of unspecified monetary penalties from us and our General Counsel pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act. Further, the complaint seeks to permanently enjoin us from violations of Sections 17(a)(2) and (a)(3) of the Securities Act, Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Exchange Act Rules 12b-20, 13a-1, 13a-11 and 13a-13, and to permanently enjoin our General Counsel from violations of Sections 17(a)(2) and (a)(3) of the Securities Act and Exchange Act Rules 13b2-1 and 13b2-2(a). Both we and our General Counsel filed motions to dismiss the complaint on February 24, 2017. Those motions to dismiss the complaint were denied by the Court on September 29, 2017. We and our General Counsel filed answers to the complaint on October 16, 2017. Formal discovery commenced in January 2018 and ~~is ongoing.~~closed as of June 3, 2019, other than one remaining discovery dispute. The parties ~~have~~ engaged in written discovery, and ~~depositions of~~several fact witnesses ~~began in September 2018. Further depositions scheduled in January~~were deposed. The dispositive motion briefing schedule was vacated by the Court on July 2, 2019, ~~were put on hold~~ due to the ~~U.S. government shutdown. The Court recently granted a joint motion to modify the case schedule in light of the delay resulting from the U.S. government shutdown,~~remaining discovery dispute, and set deadlines including May 10, 2019 for discovery, July 19, 2019 for our and our General Counsel’s dispositive motions, September 13, 2019 for the SEC’s oppositions and cross-dispositive motions, October 11, 2019 for our and our General Counsel’s reply briefs and cross-oppositions, and November 8, 2019 for the SEC’s cross-reply brief.will be reset once this dispute is fully resolved. We intend to continue to contest the allegations in the complaint vigorously.

In June 2017, the U.S. EPA visited a Kop-Coat facility and then issued a notice of potential non-compliance with Toxic Release Inventory reporting requirements under the Emergency Planning and Community Right-to-Know Act in September 2018. On March 21, 2019, Kop-Coat and U.S. EPA signed a Consent Agreement and Final Order with regard to this matter that includes a penalty of $154,220.

As previously reported, several of our subsidiaries are, from time to time, identified as a “potentially responsible party” under the federal Comprehensive Environmental Response, Compensation and Liability Act and similar local environmental statutes. In some cases, our subsidiaries are participating in the cost of certain clean-up efforts or other remedial actions. Our share of such costs to date, however, has not been material and management believes that these environmental proceedings will not have a material adverse effect on our consolidated financial condition or results of operations. See “Item ~~2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~1 — ~~Other~~Business — Environmental Matters,” in ~~Part I of~~ this ~~Quarterly~~Annual Report on Form ~~10-Q.~~10-K.

On August 13, 2019, Kirker Enterprises Inc. received an Administrative Order and Civil Administrative Penalty Assessment letter from the State of New Jersey Department of Environmental Protection Division of Air Enforcement formally notifying it of alleged failures to fulfill all conditions of an air permit applicable to its Patterson, New Jersey facility. The letter includes a proposed penalty of approximately $192,000.

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2018.~~2019.

(c) The following table presents information about repurchases of common stock we made during the ~~third~~second quarter of fiscal ~~2019:~~2020:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~DELAWARE~~Delaware		02-0642224
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

P.O. BOX 777; 2628 PEARL ROAD; MEDINA, ~~OHIO~~Ohio (Address of principal executive offices)		44258 (Zip Code)
		44258 (Zip Code)

		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements:
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Stockholders’ Equity	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3031
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4241
Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	44
Item 6.	Exhibits	45
Signatures		46

	Available-For-Sale Securities
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Net Carrying Amount)
February 28, 2019
Fixed maturity:
U.S. treasury and other government	$	23,642	$	68	$	(375	)	$	23,335
Corporate bonds		422		35		(8	)		449
Total available-for-sale securities	$	24,064	$	103	$	(383	)	$	23,784

	Available-For-Sale Securities
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Net Carrying Amount)
May 31, 2018
Equity securities:
Mutual funds - foreign	$	46,123	$	1,839	$	(1,197	)	$	46,765
Mutual funds - domestic		99,833		727		(2,770	)		97,790
Total equity securities		145,956		2,566		(3,967	)		144,555
Fixed maturity:
U.S. treasury and other government		23,562		39		(552	)		23,049
Corporate bonds		432		43		(8	)		467
Total fixed maturity securities		23,994		82		(560	)		23,516
Total	$	169,950	$	2,648	$	(4,527	)	$	168,071

	February 28, 2019					May 31, 2018
(In thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Total investments with unrealized losses	$	16,582	$	(383	)	$	106,253	$	(4,527	)
Unrealized losses with a loss position for less than 12 months		822		(4	)		68,376		(1,570	)
Unrealized losses with a loss position for more than 12 months		15,760		(379	)		37,877		(2,957	)

(In thousands)	Amortized Cost		Fair Value
Due:
Less than one year	$	7,646	$	7,604
One year through five years		10,718		10,522
Six years through ten years		4,749		4,684
After ten years		951		974
	$	24,064	$	23,784

Year ending May 31,	Operating Leases
(In thousands)
2020 (excluding the six months ended November 30)	$	31,980
2021		55,648
2022		44,471
2023		34,573
2024		28,663
Thereafter		162,830
Total lease payments	$	358,165
Less imputed interest		63,300
Total present value of lease liabilities	$	294,865

	November 30,		May 31,
	2019		2019
	(In thousands)
Identifiable Assets
CPG Segment	$	1,581,862	$	1,573,329
PCG Segment		975,423		951,644
Consumer Segment		2,001,829		1,953,279
Specialty Segment		716,471		689,133
Corporate/Other		305,413		273,970
Consolidated	$	5,580,998	$	5,441,355

	CPG			PCG			Industrial			Consumer			Specialty
(In thousands)	Segment			Segment			Segment			Segment			Segment			Total
Balance as of May 31, 2019	$	-		$	-		$	526,419		$	499,387		$	219,956		$	1,245,762
Allocation to new segments		407,429			185,259			(526,419	)					(66,269	)		-
Acquisitions		14,689															14,689
Translation adjustments		(3,578	)		(2,577	)					(3,568	)		(910	)		(10,633	)
Balance as of August 31, 2019		418,540			182,682			-			495,819			152,777			1,249,818
Acquisitions					3,023												3,023
Translation adjustments		1,198			2,683						2,235			599			6,715
Balance as of November 30, 2019	$	419,738		$	188,388		$	-		$	498,054		$	153,376		$	1,259,556

Exhibit Number		Description

~~4.1~~		Officers’ Certificate and Authentication Order dated February 27, 2019 for the 4.550% Notes due 2029 (which includes the form of Note) issued pursuant to the Indenture dated as of April 8, 2014 between the company and Wells Fargo Bank, National Association, which is incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on February 28, 2019 (File No. 1-14187).
31.1		Rule 13a-14(a) Certification of the Company’s Chief Executive Officer.(x)

31.2		Rule 13a-14(a) Certification of the Company’s Chief Financial Officer.(x)

32.1		Section 1350 Certification of the Company’s Chief Executive Officer.(x)

32.2		Section 1350 Certification of the Company’s Chief Financial Officer.(x)

101.INS		Inline XBRL Instance ~~Document.~~Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2019, has been formatted in Inline XBRL

	RPM International Inc.

	By:		/s/ Frank C. Sullivan
			Frank C. Sullivan
			Chairman and Chief Executive Officer

	By:		/s/ Russell L. Gordon
			Russell L. Gordon
			Vice President and
			Chief Financial Officer

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company