Pennsylvania
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25-0730780
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(State or other jurisdiction of incorporation or organization)
|
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(I.R.S. Employer Identification No.)
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|
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One PPG Place, Pittsburgh, Pennsylvania
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15272
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(Address of principal executive offices)
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(Zip code)
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Registrant’s telephone number, including area code:
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412-434-3131
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Title of each class
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Name of each exchange on
which registered
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Common Stock – Par Value $1.66
2
/
3
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New York Stock Exchange
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0.000% Notes due 2019
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New York Stock Exchange
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0.875% Notes due 2022
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New York Stock Exchange
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0.875% Notes due 2025
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New York Stock Exchange
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1.400% Notes due 2027
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New York Stock Exchange
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Emerging growth company
¨
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Document
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Incorporated By
Reference In Part No.
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Portions of PPG Industries, Inc. Proxy Statement for its 2019 Annual Meeting of Shareholders
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III
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Page
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Part I
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|
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Item 1.
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||
Item 1A.
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||
Item 1B.
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||
Item 2.
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Item 3.
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Item 4.
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||
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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||
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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||
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Part IV
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|
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Item 15.
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Item 16.
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||
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Strategic Business Unit
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Products
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Primary End-uses
|
Main Distribution Methods
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Brands
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Automotive Refinish Coatings
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Coatings, solvents, adhesives, sundries, software
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Automotive and commercial transport/fleet repair and refurbishing, light industrial coatings and specialty coatings for signs
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Independent distributors and direct to customers
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PPG®, SEM®
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Aerospace Coatings
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Coatings, sealants, transparencies, transparent armor, adhesives, packaging and chemical management services for the aerospace industry
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Commercial, military, regional jet and general aviation aircraft
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Direct to customers and company-owned distribution network
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PPG®
|
Protective and Marine Coatings
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Coatings and finishes for the protection of metals and structures
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Metal fabricators, heavy duty maintenance contractors and manufacturers of ships, bridges and rail cars
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Direct to customers, company-owned architectural coatings stores, independent distributors and concessionaires
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PPG®
|
Architectural Coatings Americas and Asia Pacific
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Paints, wood stains and purchased sundries
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Painting and maintenance contractors and consumers for decoration and maintenance of residential and commercial building structures
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Company-owned stores, home centers and other regional or national consumer retail outlets, paint dealers, concessionaires, independent distributors and direct to consumers
|
PPG®, GLIDDEN®, COMEX®, OLYMPIC®, DULUX® (in Canada), SIKKENS®, PPG PITTSBURGH PAINTS®, MULCO®, FLOOD®, LIQUID NAILS®, SICO®, RENNER®, TAUBMANS®, WHITE KNIGHT®, BRISTOL®, HOMAX® among others
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Architectural Coatings Europe, Middle East and Africa (EMEA)
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SIGMA®, HISTOR®, SEIGNEURIE®, GUITTET®, PEINTURES GAUTHIER®, RIPOLIN®, JOHNSTONE’S®, LEYLAND®, PRIMALEX®, DEKORAL®, TRILAK®, PROMINENT PAINTS®, GORI®, BONDEX®, and DANKE!® among others
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Major Competitive Factors
|
Product performance, technology, quality, technical and customer service, price, customer productivity, distribution, and brand recognition
|
Global Competitors
|
Akzo Nobel N.V., Axalta Coating Systems Ltd., BASF Corporation, Benjamin Moore, Chromology, Hempel A/S, Kansai Paints, the Jotun Group, Masco Corporation, Nippon Paint; RPM International Inc, the Sherwin-Williams Company and Tikkurila Oyj
|
2018 Strategic Acquisitions
|
SEM Products, Inc. Refer to Note 3, “Acquisitions and Divestitures” under Item 8 of this Form 10-K for more information.
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Average Number of Employees in 2018
|
27,800
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Principal Manufacturing and Distribution Facilities
|
Amsterdam, Netherlands; Birstall, United Kingdom; Budapest, Hungary; Busan; Korea; Clayton, Australia; Delaware, Ohio; Deurne, Belgium; Huntsville, Ala.; Huron, Ohio; Kunshan, China; Little Rock, Ark.; Mexico City, Mexico; Milan, Italy; Mojave, Calif.; Moreuil, France; Ontario, Canada; Ostrow Wielkopolski, Poland; Shildon, United Kingdom; Sylmar, Calif.; Soborg, Denmark; Stowmarket, United Kingdom; Tepexpan, Mexico; and Wroclaw, Poland.
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Strategic Business Unit
|
Products
|
Primary End-uses
|
Main Distribution Methods
|
Brands
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Automotive OEM Coatings
|
Specifically formulated coatings, adhesives and sealants and metal pretreaments
|
Automotive original equipment manufacturer (OEM)
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Direct to manufacturing companies and various coatings applicators
|
PPG®
|
Industrial Coatings
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Specifically formulated coatings, adhesives and sealants and metal pretreaments; Services and coatings application
|
Appliances, agricultural and construction equipment, consumer electronics, automotive parts and accessories, building products (including residential and commercial construction), transportation vehicles and numerous other finished products; On-site coatings services within several customer manufacturing locations as well as at regional service centers.
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PPG®
|
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Packaging Coatings
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Specifically formulated coatings
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Widely used for the protection, performance and decoration of metal cans, closures, plastic tubes, industrial packaging, and promotional and specialty packaging
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PPG®
|
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Specialty Coatings and Materials
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Amorphous precipitated silicas, TESLIN® substrate, Organic Light Emitting Diode (OLED) materials, optical lens materials and photochromic dyes
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SILICA - Tire, battery separator and other end-uses
TESLIN - applications such as labels, e-passports, drivers’ licenses, breathable membranes, other loyalty cards and identification cards
OLED - displays and lighting Lens materials - optical lenses and color-change products
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PPG®
TESLIN®
|
($ in millions)
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2018
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|
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2017
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|
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2016
|
|
|||
Research and development costs, including depreciation of research facilities
(a)
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|
$464
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$472
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$473
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% of annual net sales
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3.0
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%
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3.2
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%
|
|
3.3
|
%
|
($ in millions)
|
2018
|
|
|
2017
|
|
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2016
|
|
|||
Net Sales
|
|
|
|
|
|
||||||
United States, Canada, Western Europe
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$10,299
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$9,911
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$9,773
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Latin America, Central and Eastern Europe, Middle East, Africa, Asia Pacific
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5,075
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4,837
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4,497
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|||
Total
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$15,374
|
|
|
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$14,748
|
|
|
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$14,270
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($ in millions)
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2018
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|
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2017
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|
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2016
|
|
|||
Capital expenditures for environmental control projects
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$20
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$7
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$18
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|
•
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difficulties in assimilating acquired companies and products into our existing business;
|
•
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delays in realizing the benefits from the acquired companies or products;
|
•
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diversion of our management’s time and attention from other business concerns;
|
•
|
difficulties due to lack of or limited prior experience in any new markets we may enter;
|
•
|
unforeseen claims and liabilities, including unexpected environmental exposures or product liability;
|
•
|
unexpected losses of customers or suppliers of the acquired or existing business;
|
•
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difficulty in conforming the acquired business’ standards, processes, procedures and controls to those of our operations; and
|
•
|
difficulties in retaining key employees of the acquired businesses.
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United States and Canada
|
EMEA
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Asia Pacific
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Latin America
|
34 facilities
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54 facilities in 24 countries
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26 facilities in 9 countries
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14 facilities in 4 countries
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Name
|
Age
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Title
|
Michael H. McGarry
(a)
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60
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Chairman and Chief Executive Officer since September 2016
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Anne M. Foulkes
(b)
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56
|
Senior Vice President and General Counsel since September 2018
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Vincent J. Morales
(c)
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53
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Senior Vice President and Chief Financial Officer since March 2017
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Amy R. Ericson
(d)
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53
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Senior Vice President, Packaging Coatings since July 2018
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Timothy M. Knavish
(e)
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53
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Senior Vice President, Architectural Coatings and President PPG EMEA since January 2019
|
Rebecca B. Liebert
(f)
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51
|
Senior Vice President, Automotive Coatings since June 2018
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Ramaparasad Vadlamannati
(g)
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56
|
Senior Vice President, Protective and Marine Coatings since March 2016
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(a)
|
Mr. McGarry served as President and Chief Executive Officer from September 2015 through August 2016, President and Chief Operating Officer from March 2015 through August 2015; Chief Operating Officer from August 2014 through February 2015; Executive Vice President from September 2012 through July 2014; and Senior Vice President, Commodity Chemicals from July 2008 through August 2012.
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(b)
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Ms. Foulkes served as Senior Vice President, General Counsel and Secretary from August 2018 through September 2018, Vice President and Associate General Counsel and Secretary from March 2016 through July 2018 and Assistant General Counsel and Secretary from April 2011 through February 2016.
|
(c)
|
Mr. Morales served as Vice President, Finance from June 2016 through February 2017. From June 2015 through June 2016, he served as Vice President, Investor Relations and Treasurer and from October 2007 through May 2015 he served as Vice President, Investor Relations.
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(d)
|
Ms. Ericson was appointed Senior Vice President, Packaging Coatings in July 2018 when she joined PPG from SUEZ SA. She previously served as President of SUEZ Chemical Monitoring and Solutions from 2017 until 2018, President of General Electric Water Services Company from 2015 to 2017 and President and Chief Executive Officer of Alstom SA’s U.S. business from 2013 to 2015.
|
(e)
|
Mr. Knavish served as Senior Vice President, Industrial Coatings from October 2017 to January 2019, Senior Vice President, Automotive Coatings from March 2016 through September 2017, Vice President, Protective and Marine Coatings from August 2012 through February 2016 and Vice President, Automotive Coatings, Americas from March 2010 through July 2012.
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(f)
|
Ms. Liebert was appointed Senior Vice President, Automotive Coatings in June 2018 when she joined PPG from Honeywell International, Inc. She previously served as President and Chief Executive Officer of Honeywell UOP from 2016 to 2018, Senior Vice President and General Manager, Catalyst Adsorbents and Specialties of Honeywell UOP from 2015 to 2016 and Senior Vice President and General Manager, Gas Processing and Hydrogen of Honeywell UOP from 2012 to 2015.
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(g)
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Mr. Vadlamannati served as Vice President, Architectural Coatings, EMEA and Asia/Pacific from August 2014 through February 2016, Vice President, Architectural Coatings, EMEA from February 2012 through July 2014, Vice President, Architectural Coatings, EMEA for Region Western Europe from March 2011 through January 2012 and Vice President, Automotive Refinish, EMEA from September 2010 through February 2011.
|
(1)
|
In December 2017, PPG's board of directors approved a $2.5 billion share repurchase program. The remaining shares yet to be purchased under the program has been calculated using PPG’s closing stock price on the last business day of the respective month. This repurchase program has no expiration date.
|
|
|
% Change
|
|||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
United States and Canada
|
|
$6,485
|
|
|
$6,307
|
|
|
$6,254
|
|
2.8%
|
0.8%
|
Europe, Middle East and Africa (EMEA)
|
4,678
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|
4,389
|
|
4,164
|
|
6.6%
|
5.4%
|
|||
Asia Pacific
|
2,618
|
|
2,523
|
|
2,431
|
|
3.8%
|
3.8%
|
|||
Latin America
|
1,593
|
|
1,529
|
|
1,421
|
|
4.2%
|
7.6%
|
|||
Total
|
|
$15,374
|
|
|
$14,748
|
|
|
$14,270
|
|
4.2%
|
3.3%
|
2018 vs. 2017
|
2017 vs. 2016
|
|
|
% Change
|
|||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Cost of sales, exclusive of depreciation and amortization
|
|
$9,001
|
|
|
$8,209
|
|
|
$7,665
|
|
9.6%
|
7.1%
|
Cost of sales as a % of net sales
|
58.5
|
%
|
55.7
|
%
|
53.7
|
%
|
2.8%
|
2.0%
|
2018 vs. 2017
|
2017 vs. 2016
|
|
|
% Change
|
|||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Selling, general and administrative expenses
|
|
$3,573
|
|
|
$3,554
|
|
|
$3,555
|
|
0.5%
|
—%
|
Selling, general and administrative expenses as a % of net sales
|
23.2
|
%
|
24.1
|
%
|
24.9
|
%
|
(0.9)%
|
(0.8)%
|
2018 vs. 2017
|
2017 vs. 2016
|
|
|
% Change
|
|||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Interest expense, net of Interest income
|
|
$95
|
|
|
$85
|
|
|
$99
|
|
11.8%
|
(14.1)%
|
Business restructuring, net
|
|
$66
|
|
|
$—
|
|
|
$191
|
|
N/A
|
(100.0)%
|
Pension settlement charges
|
|
$—
|
|
|
$60
|
|
|
$968
|
|
(100.0)%
|
(93.8)%
|
Other charges
|
|
$122
|
|
|
$74
|
|
|
$242
|
|
64.9%
|
(69.4)%
|
Other income
|
|
($114
|
)
|
|
($150
|
)
|
|
($127
|
)
|
(24.0)%
|
18.1%
|
|
|
% Change
|
|||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Income tax expense
|
|
$353
|
|
|
$615
|
|
|
$214
|
|
(42.6)%
|
187.4%
|
Effective tax rate
|
20.9
|
%
|
30.7
|
%
|
27.5
|
%
|
(9.8)%
|
3.2%
|
|||
Adjusted effective tax rate*
|
22.1
|
%
|
24.3
|
%
|
24.5
|
%
|
(2.2)%
|
(0.2)%
|
|||
|
|
|
|
|
|
||||||
Earnings per diluted share
|
|
$5.40
|
|
|
$5.31
|
|
|
$2.04
|
|
1.7%
|
160.3%
|
Adjusted earnings per diluted share*
|
|
$5.92
|
|
|
$5.86
|
|
|
$5.64
|
|
1.0%
|
3.9%
|
*See the Regulation G reconciliations - results of operations
|
Year-ended December 31, 2018
|
|
|
|
|
|
|||||||||||||
($ in millions, except percentages and per share amounts)
|
Income Before Income Taxes
|
|
|
Tax Expense
|
|
|
Effective Tax Rate
|
|
|
Net income from continuing operations (attributable to PPG)
|
|
|
Earnings per diluted share
|
|
||||
As reported, continuing operations
|
|
$1,693
|
|
|
|
$353
|
|
|
20.9
|
%
|
|
|
$1,323
|
|
|
|
$5.40
|
|
Includes:
|
|
|
|
|
|
|
|
|
|
|||||||||
Net tax charge related to U.S. Tax Cuts and Jobs Act
|
—
|
|
|
13
|
|
|
N/A
|
|
|
(13
|
)
|
|
(0.05
|
)
|
||||
Charges related to customer assortment change
|
18
|
|
|
4
|
|
|
24.3
|
%
|
|
14
|
|
|
0.05
|
|
||||
Charges related to environmental remediation and other costs
|
77
|
|
|
19
|
|
|
24.3
|
%
|
|
58
|
|
|
0.24
|
|
||||
Net charge related to business restructuring
|
66
|
|
|
20
|
|
|
30.3
|
%
|
|
46
|
|
|
0.18
|
|
||||
Accelerated depreciation from restructuring actions
|
9
|
|
|
2
|
|
|
22.2
|
%
|
|
7
|
|
|
0.03
|
|
||||
Charge related to a legacy legal settlement
|
10
|
|
|
2
|
|
|
24.3
|
%
|
|
8
|
|
|
0.03
|
|
||||
Charges related to accounting investigation costs
|
14
|
|
|
3
|
|
|
24.3
|
%
|
|
11
|
|
|
0.05
|
|
||||
Charges related to transaction-related costs
(1)
|
6
|
|
|
2
|
|
|
25.5
|
%
|
|
4
|
|
|
0.02
|
|
||||
Charge related to brand rationalization
|
6
|
|
|
2
|
|
|
26.8
|
%
|
|
4
|
|
|
0.02
|
|
||||
Gain from the sale of a non-operating asset
|
(26
|
)
|
|
(6
|
)
|
|
24.3
|
%
|
|
(20
|
)
|
|
(0.08
|
)
|
||||
Charge related to impairment of a non-manufacturing asset
|
9
|
|
|
2
|
|
|
24.3
|
%
|
|
7
|
|
|
0.03
|
|
||||
Adjusted, continuing operations, excluding certain items
|
|
$1,882
|
|
|
|
$416
|
|
|
22.1
|
%
|
|
|
$1,449
|
|
|
|
$5.92
|
|
Year-ended December 31, 2017
|
|
|
|
|
|
|||||||||||||
($ in millions, except percentages and per share amounts)
|
Income Before Income Taxes
|
|
|
Tax Expense
|
|
|
Effective Tax Rate
|
|
|
Net income from continuing operations (attributable to PPG)
|
|
|
Earnings per diluted share
|
|
||||
As reported, continuing operations
|
|
$2,005
|
|
|
|
$615
|
|
|
30.7
|
%
|
|
|
$1,369
|
|
|
|
$5.31
|
|
Includes:
|
|
|
|
|
|
|
|
|
|
|||||||||
Net tax charge related to U.S. Tax Cuts and Jobs Act
|
—
|
|
|
(134
|
)
|
|
N/A
|
|
|
134
|
|
|
0.52
|
|
||||
Charges related to transaction-related costs
(1)
|
9
|
|
|
3
|
|
|
37.9
|
%
|
|
6
|
|
|
0.02
|
|
||||
Charges related to pension settlements
|
60
|
|
|
22
|
|
|
37.9
|
%
|
|
38
|
|
|
0.14
|
|
||||
Gain from sale of business
|
(25
|
)
|
|
(1
|
)
|
|
3.2
|
%
|
|
(24
|
)
|
|
(0.09
|
)
|
||||
Gain from a legacy legal settlement
|
(18
|
)
|
|
(7
|
)
|
|
37.9
|
%
|
|
(11
|
)
|
|
(0.04
|
)
|
||||
Gain from sale of a non-operating asset
|
(13
|
)
|
|
(5
|
)
|
|
37.9
|
%
|
|
(8
|
)
|
|
(0.03
|
)
|
||||
Charges related to asset write-downs
|
7
|
|
|
—
|
|
|
—
|
%
|
|
7
|
|
|
0.03
|
|
||||
Adjusted, continuing operations, excluding certain items
|
|
$2,025
|
|
|
|
$493
|
|
|
24.3
|
%
|
|
|
$1,511
|
|
|
|
$5.86
|
|
Year-ended December 31, 2016
|
|
|
|
|
|
|||||||||||||
($ in millions, except percentages and per share amounts)
|
Income Before Income Taxes
|
|
|
Tax Expense
|
|
|
Effective Tax Rate
|
|
|
Net income from continuing operations (attributable to PPG)
|
|
|
Earnings per diluted share
|
|
||||
As reported, continuing operations
|
|
$779
|
|
|
|
$214
|
|
|
27.5
|
%
|
|
|
$543
|
|
|
|
$2.04
|
|
Includes:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Charges related to transaction-related costs
(1)
|
8
|
|
|
3
|
|
|
37.6
|
%
|
|
5
|
|
|
0.03
|
|
||||
Charge related to pension settlement
|
968
|
|
|
352
|
|
|
36.4
|
%
|
|
616
|
|
|
2.31
|
|
||||
Charge related to business restructuring
|
191
|
|
|
50
|
|
|
26.2
|
%
|
|
141
|
|
|
0.53
|
|
||||
Charge related to environmental remediation
|
82
|
|
|
31
|
|
|
37.6
|
%
|
|
51
|
|
|
0.20
|
|
||||
Net gain from disposals of ownership interests in business affiliates
|
(46
|
)
|
|
(16
|
)
|
|
34.8
|
%
|
|
(30
|
)
|
|
(0.12
|
)
|
||||
Net tax effect of asbestos settlement funding
|
—
|
|
|
(151
|
)
|
|
N/A
|
|
|
151
|
|
|
0.57
|
|
||||
Charge related to early retirement of debt
|
8
|
|
|
3
|
|
|
37.6
|
%
|
|
5
|
|
|
0.02
|
|
||||
Charges related to asset write-downs
|
23
|
|
|
7
|
|
|
30.4
|
%
|
|
17
|
|
|
0.06
|
|
||||
Adjusted, continuing operations, excluding certain items
|
|
$2,013
|
|
|
|
$493
|
|
|
24.5
|
%
|
|
|
$1,499
|
|
|
|
$5.64
|
|
(1)
|
Transaction-related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred to effect significant acquisitions, as well as similar fees and other costs to effect divestitures not classified as discontinued operations. These costs also include the flow-through cost of sales impact for the step up to fair value of inventory acquired in certain acquisitions.
|
|
|
|
$ Change
|
|
% Change
|
||||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Net sales
|
|
$9,087
|
|
|
$8,730
|
|
|
$8,580
|
|
|
$357
|
$150
|
|
4.1%
|
1.7%
|
Segment income
|
|
$1,300
|
|
|
$1,313
|
|
|
$1,322
|
|
|
($13)
|
($9)
|
|
(1.0)%
|
(0.7)%
|
2018 vs. 2017
|
2017 vs. 2016
|
|
|
|
$ Change
|
|
% Change
|
||||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Net sales
|
|
$6,287
|
|
|
$6,018
|
|
|
$5,690
|
|
|
$269
|
$328
|
|
4.5%
|
5.8%
|
Segment income
|
|
$818
|
|
|
$979
|
|
|
$1,060
|
|
|
($161)
|
($81)
|
|
(16.4)%
|
(7.6)%
|
2018 vs. 2017
|
2017 vs. 2016
|
($ in millions)
|
2018
|
|
|
2017
|
|
||
Cash and cash equivalents
|
|
$902
|
|
|
|
$1,436
|
|
Short-term investments
|
61
|
|
|
55
|
|
||
Total
|
|
$963
|
|
|
|
$1,491
|
|
($ in millions, except percentages)
|
|
% Change
|
|||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Cash from operating activities
|
|
$1,487
|
|
|
$1,551
|
|
|
$1,218
|
|
(4.1)%
|
27.3%
|
($ in millions, except percentages)
|
2018
|
|
|
2017
|
|
||
Trade Receivables, net
|
|
$2,505
|
|
|
|
$2,559
|
|
Inventories, FIFO
|
1,896
|
|
|
1,833
|
|
||
Trade Creditor’s Liabilities
|
2,177
|
|
|
2,321
|
|
||
Operating Working Capital
|
|
$2,224
|
|
|
|
$2,071
|
|
Operating Working Capital as a % of fourth quarter sales, annualized
|
15.3
|
%
|
|
14.1
|
%
|
||
|
|
|
|
||||
Trade Receivables, net as a % of fourth quarter sales, annualized
|
17.2
|
%
|
|
17.4
|
%
|
||
Days sales outstanding
|
56
|
|
|
57
|
|
||
Inventories, FIFO as a % of fourth quarter sales, annualized
|
13.0
|
%
|
|
12.4
|
%
|
||
Inventory turnover
|
4.8
|
|
|
4.8
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
|||
Cash outlays related to environmental remediation activities
|
|
$64
|
|
|
$44
|
|
|
$47
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
|||
U.S. defined benefit pension plans
|
|
$75
|
|
|
$54
|
|
|
$134
|
|
Non-U.S. defined benefit pension plans
|
|
$24
|
|
|
$33
|
|
|
$54
|
|
($ in millions, except percentages)
|
|
% Change
|
|||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Cash (used for)/from investing activities
|
|
($764
|
)
|
|
($63
|
)
|
|
$472
|
|
1,112.7%
|
(113.3)%
|
($ in millions, except percentages)
|
|
% Change
|
|||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Capital expenditures
(1)
|
|
$411
|
|
|
$360
|
|
|
$380
|
|
14.2%
|
(5.3)%
|
Business acquisitions, net of cash acquired
(2)
|
|
$378
|
|
|
$325
|
|
|
$349
|
|
16.3%
|
(6.9)%
|
Total capital expenditures, including acquisitions
|
|
$789
|
|
|
$685
|
|
|
$729
|
|
15.2%
|
(6.0)%
|
Capital expenditures, excluding acquisitions, as a % of sales
|
2.7
|
%
|
2.4
|
%
|
2.7
|
%
|
12.5%
|
(11.1)%
|
|
|
% Change
|
|||||||||
($ in millions, except percentages)
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
2017 vs. 2016
|
|||
Cash used for financing activities
|
|
($1,205
|
)
|
|
($1,954
|
)
|
|
($1,210
|
)
|
(38.3)%
|
61.5%
|
($ in millions, except number of shares)
|
2018
|
|
2017
|
|
2016
|
|
|||
Number of shares repurchased (millions)
|
15.9
|
|
7.4
|
|
10.7
|
|
|||
Cost of shares repurchased
|
|
$1,721
|
|
|
$813
|
|
|
$1,050
|
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
|||
Dividends paid to shareholders
|
|
$453
|
|
|
$434
|
|
|
$414
|
|
Debt Issued
|
Year
|
$ in millions
|
|
|
$300 million 3.2% Note due 2023 and $700 million 3.75% Notes due 2028
|
2018
|
|
$992
|
|
€300 million 0.000% Notes due 2019 and €600 million 0.875% Notes due 2025
|
2016
|
987
|
|
Debt Repaid
|
Year
|
$ in millions
|
|
|
3-year variable rate bank loan due 2017
|
2017
|
|
$587
|
|
$125 million 6.65% notes due 2018
|
2016
|
133
|
|
|
Two $250 million Term Loan Credit Agreements
|
2016
|
500
|
|
|
$250 million 1.9% notes
|
2016
|
250
|
|
(1)
|
Includes interest on all outstanding debt.
|
(2)
|
Includes the high end of the range of the expected non-US mandatory pension contributions for 2019 only, as PPG is unable to estimate the pension contributions beyond 2019.
|
(3)
|
The unconditional purchase commitments are principally take-or-pay obligations related to the purchase of certain materials, including industrial gases and electricity, consistent with customary industry practice.
|
/s/ Michael H. McGarry
|
|
/s/ Vincent J. Morales
|
Michael H. McGarry
Chairman and Chief Executive Officer
February 21, 2019
|
|
Vincent J. Morales
Senior Vice President and Chief Financial Officer
February 21, 2019
|
|
For the Year
|
||||||||||
($ in millions, except per share amounts)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Net sales
|
|
$15,374
|
|
|
|
$14,748
|
|
|
|
$14,270
|
|
Cost of sales, exclusive of depreciation and amortization
|
9,001
|
|
|
8,209
|
|
|
7,665
|
|
|||
Selling, general and administrative
|
3,573
|
|
|
3,554
|
|
|
3,555
|
|
|||
Depreciation
|
354
|
|
|
331
|
|
|
319
|
|
|||
Amortization
|
143
|
|
|
129
|
|
|
121
|
|
|||
Research and development, net
|
441
|
|
|
451
|
|
|
453
|
|
|||
Interest expense
|
118
|
|
|
105
|
|
|
125
|
|
|||
Interest income
|
(23
|
)
|
|
(20
|
)
|
|
(26
|
)
|
|||
Business restructuring, net
|
66
|
|
|
—
|
|
|
191
|
|
|||
Pension settlement charges
|
—
|
|
|
60
|
|
|
968
|
|
|||
Asbestos settlement, net
|
—
|
|
|
—
|
|
|
5
|
|
|||
Other charges
|
122
|
|
|
74
|
|
|
242
|
|
|||
Other income
|
(114
|
)
|
|
(150
|
)
|
|
(127
|
)
|
|||
Income before income taxes
|
|
$1,693
|
|
|
|
$2,005
|
|
|
|
$779
|
|
Income tax expense
|
353
|
|
|
615
|
|
|
214
|
|
|||
Income from continuing operations
|
|
$1,340
|
|
|
|
$1,390
|
|
|
|
$565
|
|
Income from discontinued operations, net of tax
|
18
|
|
|
225
|
|
|
330
|
|
|||
Net income attributable to the controlling and noncontrolling interests
|
|
$1,358
|
|
|
|
$1,615
|
|
|
|
$895
|
|
Less: net income attributable to noncontrolling interests
|
17
|
|
|
21
|
|
|
22
|
|
|||
Net income (attributable to PPG)
|
|
$1,341
|
|
|
|
$1,594
|
|
|
|
$873
|
|
Amounts Attributable to PPG
|
|
|
|
|
|
||||||
Continuing operations
|
|
$1,323
|
|
|
|
$1,369
|
|
|
|
$543
|
|
Discontinued operations
|
18
|
|
|
225
|
|
|
330
|
|
|||
Net income
|
|
$1,341
|
|
|
|
$1,594
|
|
|
|
$873
|
|
Earnings per common share
|
|
|
|
|
|
||||||
Continuing operations
|
|
$5.43
|
|
|
|
$5.34
|
|
|
|
$2.05
|
|
Discontinued operations
|
0.07
|
|
|
0.88
|
|
|
1.24
|
|
|||
Net income (attributable to PPG)
|
|
$5.50
|
|
|
|
$6.22
|
|
|
|
$3.29
|
|
Earnings per common share - assuming dilution
|
|
|
|
|
|
||||||
Continuing operations
|
|
$5.40
|
|
|
|
$5.31
|
|
|
|
$2.04
|
|
Discontinued operations
|
0.07
|
|
|
0.87
|
|
|
1.23
|
|
|||
Net income (attributable to PPG)
|
|
$5.47
|
|
|
|
$6.18
|
|
|
|
$3.27
|
|
|
|
For the Year
|
||||||||||
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
||||
Net income attributable to the controlling and noncontrolling interests
|
|
$1,358
|
|
|
|
$1,615
|
|
|
|
$895
|
|
|
|
Unrealized foreign currency translation (losses)/gains
|
(155
|
)
|
|
248
|
|
|
(476
|
)
|
|||
|
Defined benefit pension and other postretirement benefit adjustments
|
9
|
|
|
78
|
|
|
808
|
|
|||
|
Unrealized (losses)/gains – derivative financial instruments
|
(1
|
)
|
|
(10
|
)
|
|
4
|
|
|||
Other comprehensive (loss)/income, net of tax
|
(147
|
)
|
|
316
|
|
|
336
|
|
||||
Total comprehensive income
|
|
$1,211
|
|
|
|
$1,931
|
|
|
|
$1,231
|
|
|
Less: amounts attributable to noncontrolling interests:
|
|
|
|
|
|
|||||||
|
Net income
|
(17
|
)
|
|
(21
|
)
|
|
(22
|
)
|
|||
|
Unrealized foreign currency translation gains/(losses)
|
11
|
|
|
(17
|
)
|
|
10
|
|
|||
Comprehensive income attributable to PPG
|
|
$1,205
|
|
|
|
$1,893
|
|
|
|
$1,219
|
|
|
December 31
|
||||||
($ in millions)
|
2018
|
|
|
2017
|
|
||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
|
$902
|
|
|
|
$1,436
|
|
Short-term investments
|
61
|
|
|
55
|
|
||
Receivables
|
2,845
|
|
|
2,903
|
|
||
Inventories
|
1,783
|
|
|
1,730
|
|
||
Other
|
370
|
|
|
353
|
|
||
Total current assets
|
|
$5,961
|
|
|
|
$6,477
|
|
Property, plant and equipment, net
|
2,805
|
|
|
2,824
|
|
||
Goodwill
|
4,070
|
|
|
3,942
|
|
||
Identifiable intangible assets, net
|
1,972
|
|
|
2,045
|
|
||
Deferred income taxes
|
229
|
|
|
305
|
|
||
Investments
|
251
|
|
|
268
|
|
||
Other assets
|
727
|
|
|
677
|
|
||
Total
|
|
$16,015
|
|
|
|
$16,538
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
|
$3,623
|
|
|
|
$3,781
|
|
Restructuring reserves
|
99
|
|
|
102
|
|
||
Short-term debt and current portion of long-term debt
|
651
|
|
|
12
|
|
||
Total current liabilities
|
|
$4,373
|
|
|
|
$3,895
|
|
Long-term debt
|
4,365
|
|
|
4,134
|
|
||
Accrued pensions
|
645
|
|
|
729
|
|
||
Other postretirement benefits
|
629
|
|
|
699
|
|
||
Deferred income taxes
|
429
|
|
|
442
|
|
||
Other liabilities
|
842
|
|
|
967
|
|
||
Total liabilities
|
|
$11,283
|
|
|
|
$10,866
|
|
Commitments and contingent liabilities (See Note 14)
|
|
|
|
||||
Shareholders’ equity
|
|
|
|
||||
Common stock
|
|
$969
|
|
|
|
$969
|
|
Additional paid-in capital
|
788
|
|
|
756
|
|
||
Retained earnings
|
18,131
|
|
|
17,140
|
|
||
Treasury stock, at cost
|
(12,958
|
)
|
|
(11,251
|
)
|
||
Accumulated other comprehensive loss
|
(2,300
|
)
|
|
(2,057
|
)
|
||
Total PPG shareholders’ equity
|
|
$4,630
|
|
|
|
$5,557
|
|
Noncontrolling interests
|
102
|
|
|
115
|
|
||
Total shareholders’ equity
|
|
$4,732
|
|
|
|
$5,672
|
|
Total
|
|
$16,015
|
|
|
|
$16,538
|
|
($ in millions)
|
Common Stock
|
Additional Paid-In Capital
|
Retained Earnings
|
Treasury Stock
|
Accumulated Other Comprehensive (Loss)/Income
|
Total PPG
|
Non-controlling Interests
|
Total
|
||||||||||||||||
January 1, 2016
|
|
$969
|
|
|
$635
|
|
|
$15,521
|
|
|
($9,440
|
)
|
|
($2,702
|
)
|
|
$4,983
|
|
|
$86
|
|
|
$5,069
|
|
Net income attributable to the controlling and noncontrolling interests
|
—
|
|
—
|
|
873
|
|
—
|
|
—
|
|
873
|
|
22
|
|
895
|
|
||||||||
Other comprehensive income/(loss), net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
346
|
|
346
|
|
(10
|
)
|
336
|
|
||||||||
Cash dividends
|
—
|
|
—
|
|
(414
|
)
|
—
|
|
—
|
|
(414
|
)
|
—
|
|
(414
|
)
|
||||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
(1,050
|
)
|
—
|
|
(1,050
|
)
|
—
|
|
(1,050
|
)
|
||||||||
Issuance of treasury stock
|
—
|
|
37
|
|
—
|
|
18
|
|
—
|
|
55
|
|
—
|
|
55
|
|
||||||||
Stock-based compensation activity
|
—
|
|
35
|
|
—
|
|
—
|
|
—
|
|
35
|
|
—
|
|
35
|
|
||||||||
Dividends paid on subsidiary common stock to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
(4
|
)
|
||||||||
Reductions in noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(7
|
)
|
(7
|
)
|
||||||||
December 31, 2016
|
|
$969
|
|
|
$707
|
|
|
$15,980
|
|
|
($10,472
|
)
|
|
($2,356
|
)
|
|
$4,828
|
|
|
$87
|
|
|
$4,915
|
|
Net income attributable to the controlling and noncontrolling interests
|
—
|
|
—
|
|
1,594
|
|
—
|
|
—
|
|
1,594
|
|
21
|
|
1,615
|
|
||||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
299
|
|
299
|
|
17
|
|
316
|
|
||||||||
Cash dividends
|
—
|
|
—
|
|
(434
|
)
|
—
|
|
—
|
|
(434
|
)
|
—
|
|
(434
|
)
|
||||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
(813
|
)
|
—
|
|
(813
|
)
|
—
|
|
(813
|
)
|
||||||||
Issuance of treasury stock
|
—
|
|
49
|
|
—
|
|
34
|
|
—
|
|
83
|
|
—
|
|
83
|
|
||||||||
Dividends paid on subsidiary common stock to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
(5
|
)
|
||||||||
Reductions in noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
(5
|
)
|
||||||||
December 31, 2017
|
|
$969
|
|
|
$756
|
|
|
$17,140
|
|
|
($11,251
|
)
|
|
($2,057
|
)
|
|
$5,557
|
|
|
$115
|
|
|
$5,672
|
|
Net income attributable to the controlling and noncontrolling interests
|
—
|
|
—
|
|
1,341
|
|
—
|
|
—
|
|
1,341
|
|
17
|
|
1,358
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(136
|
)
|
(136
|
)
|
(11
|
)
|
(147
|
)
|
||||||||
Cash dividends
|
—
|
|
—
|
|
(453
|
)
|
—
|
|
—
|
|
(453
|
)
|
—
|
|
(453
|
)
|
||||||||
Purchase of treasury stock
|
—
|
|
—
|
|
—
|
|
(1,721
|
)
|
—
|
|
(1,721
|
)
|
—
|
|
(1,721
|
)
|
||||||||
Issuance of treasury stock
|
—
|
|
28
|
|
—
|
|
14
|
|
—
|
|
42
|
|
—
|
|
42
|
|
||||||||
Stock-based compensation activity
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
4
|
|
—
|
|
4
|
|
||||||||
Dividends paid on subsidiary common stock to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(7
|
)
|
(7
|
)
|
||||||||
Reductions in noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(12
|
)
|
(12
|
)
|
||||||||
Reclassification from other comprehensive income to retained earnings - Adoption of ASU 2018-02
|
—
|
|
—
|
|
107
|
|
—
|
|
(107
|
)
|
—
|
|
—
|
|
—
|
|
||||||||
Adjustment to retained earnings - Adoption of ASU 2016-16
|
—
|
|
—
|
|
(4
|
)
|
—
|
|
—
|
|
(4
|
)
|
—
|
|
(4
|
)
|
||||||||
December 31, 2018
|
|
$969
|
|
|
$788
|
|
|
$18,131
|
|
|
($12,958
|
)
|
|
($2,300
|
)
|
|
$4,630
|
|
|
$102
|
|
|
$4,732
|
|
Consolidated Statement of Cash Flows
|
||||||||||||
|
|
For the Year
|
||||||||||
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
||||
Operating activities
|
|
|
|
|
|
|||||||
Net income attributable to the controlling and noncontrolling interests
|
|
$1,358
|
|
|
|
$1,615
|
|
|
|
$895
|
|
|
|
Less: Income from discontinued operations
|
18
|
|
|
225
|
|
|
330
|
|
|||
Income from continuing operations
|
|
$1,340
|
|
|
|
$1,390
|
|
|
|
$565
|
|
|
Adjustments to reconcile to cash from operations:
|
|
|
|
|
|
|||||||
|
Depreciation and amortization
|
497
|
|
|
460
|
|
|
440
|
|
|||
|
Defined benefit pension expense
|
43
|
|
|
65
|
|
|
85
|
|
|||
|
Pension settlement charge
|
—
|
|
|
60
|
|
|
968
|
|
|||
|
Business restructuring charge, net
|
66
|
|
|
—
|
|
|
191
|
|
|||
|
Environmental remediation charges and other costs
|
77
|
|
|
—
|
|
|
82
|
|
|||
|
Stock-based compensation expense
|
37
|
|
|
35
|
|
|
45
|
|
|||
|
Gain on sale of land
|
(26
|
)
|
|
—
|
|
|
—
|
|
|||
|
Net gain, from sale of businesses
|
—
|
|
|
(25
|
)
|
|
(39
|
)
|
|||
|
Equity affiliate (income)/loss, net of dividends
|
(1
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|||
|
Deferred income taxes
|
45
|
|
|
38
|
|
|
171
|
|
|||
Contributions to pension plans
|
(99
|
)
|
|
(87
|
)
|
|
(188
|
)
|
||||
Restructuring payments
|
(66
|
)
|
|
(49
|
)
|
|
(76
|
)
|
||||
Funding of asbestos settlement trust
|
—
|
|
|
—
|
|
|
(813
|
)
|
||||
Change in certain asset and liability accounts (net of acquisitions):
|
|
|
|
|||||||||
|
Receivables
|
(69
|
)
|
|
(76
|
)
|
|
(68
|
)
|
|||
|
Inventories
|
(109
|
)
|
|
(116
|
)
|
|
56
|
|
|||
|
Other current assets
|
5
|
|
|
(43
|
)
|
|
21
|
|
|||
|
Accounts payable and accrued liabilities
|
(76
|
)
|
|
188
|
|
|
169
|
|
|||
|
Noncurrent assets and liabilities, net
|
(207
|
)
|
|
(170
|
)
|
|
(53
|
)
|
|||
|
Taxes and interest payable
|
50
|
|
|
(129
|
)
|
|
(268
|
)
|
|||
Other
|
(20
|
)
|
|
14
|
|
|
(64
|
)
|
||||
|
Cash from operating activities - continuing operations
|
|
$1,487
|
|
|
|
$1,551
|
|
|
|
$1,218
|
|
|
Cash (used for)/from operating activities - discontinued operations
|
(20
|
)
|
|
17
|
|
|
133
|
|
|||
|
Cash from operating activities
|
|
$1,467
|
|
|
|
$1,568
|
|
|
|
$1,351
|
|
Investing activities
|
|
|
|
|
|
|||||||
Capital expenditures
|
|
($411
|
)
|
|
|
($360
|
)
|
|
|
($380
|
)
|
|
Business acquisitions, net of cash balances acquired
|
(378
|
)
|
|
(225
|
)
|
|
(349
|
)
|
||||
Payments for acquisition of equity investment
|
—
|
|
|
(100
|
)
|
|
—
|
|
||||
Net proceeds from the sale of businesses
|
—
|
|
|
593
|
|
|
1,094
|
|
||||
Proceeds from sale of land
|
27
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from maturity of short-term investments
|
—
|
|
|
—
|
|
|
92
|
|
||||
Payments for the settlement of cross currency swap contracts
|
(28
|
)
|
|
(34
|
)
|
|
(36
|
)
|
||||
Proceeds from the settlement of cross currency swap contracts
|
23
|
|
|
37
|
|
|
37
|
|
||||
Payments on net investment hedges
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
Other
|
3
|
|
|
26
|
|
|
27
|
|
||||
|
Cash (used for)/from investing activities - continuing operations
|
|
($764
|
)
|
|
|
($63
|
)
|
|
|
$472
|
|
|
Cash used for investing activities - discontinued operations
|
—
|
|
|
(4
|
)
|
|
(36
|
)
|
|||
|
Cash (used for)/from investing activities
|
|
($764
|
)
|
|
|
($67
|
)
|
|
|
$436
|
|
Financing activities
|
|
|
|
|
|
|||||||
Net change in borrowings with maturities of three months or less
|
|
($1
|
)
|
|
|
($7
|
)
|
|
|
($15
|
)
|
|
Net payments on commercial paper and short-term debt
|
(2
|
)
|
|
(93
|
)
|
|
(361
|
)
|
||||
Net proceeds from the issuance of long-term debt (net of discount and issuance costs)
|
992
|
|
|
—
|
|
|
988
|
|
||||
Repayment of long-term debt
|
(6
|
)
|
|
(588
|
)
|
|
(379
|
)
|
||||
Payments related to tax withholding on stock-based compensation awards
|
(15
|
)
|
|
(28
|
)
|
|
(26
|
)
|
||||
Purchase of treasury stock
|
(1,721
|
)
|
|
(813
|
)
|
|
(1,050
|
)
|
||||
Issuance of treasury stock
|
15
|
|
|
52
|
|
|
31
|
|
||||
Dividends paid on PPG common stock
|
(453
|
)
|
|
(434
|
)
|
|
(414
|
)
|
||||
Other
|
(14
|
)
|
|
(43
|
)
|
|
16
|
|
||||
|
Cash used for financing activities
|
|
($1,205
|
)
|
|
|
($1,954
|
)
|
|
|
($1,210
|
)
|
Effect of currency exchange rate changes on cash and cash equivalents
|
(32
|
)
|
|
69
|
|
|
(68
|
)
|
||||
Net (decrease)/increase in cash and cash equivalents
|
|
($534
|
)
|
|
|
($384
|
)
|
|
|
$509
|
|
|
Cash and cash equivalents, beginning of year
|
|
$1,436
|
|
|
|
$1,820
|
|
|
|
$1,311
|
|
|
Cash and cash equivalents, end of year
|
|
$902
|
|
|
|
$1,436
|
|
|
|
$1,820
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|||||||
Interest paid, net of amount capitalized
|
|
$108
|
|
|
|
$100
|
|
|
|
$118
|
|
|
Taxes paid, net of refunds
|
|
$380
|
|
|
|
$648
|
|
|
|
$349
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Research and development – total
|
|
$464
|
|
|
|
$472
|
|
|
|
$473
|
|
Less depreciation on research facilities
|
23
|
|
|
21
|
|
|
20
|
|
|||
Research and development, net
|
|
$441
|
|
|
|
$451
|
|
|
|
$453
|
|
|
For the Year Ended December 31, 2017
|
||||||||||
($ in millions)
|
As Previously Reported
|
|
|
Reclassifications
|
|
|
As Revised
|
|
|||
Cost of sales, exclusive of depreciation and amortization
|
|
$8,207
|
|
|
|
$2
|
|
|
|
$8,209
|
|
Selling, general and administrative
|
|
$3,564
|
|
|
|
($10
|
)
|
|
|
$3,554
|
|
Research and development, net
|
|
$453
|
|
|
|
($2
|
)
|
|
|
$451
|
|
Other charges
|
|
$64
|
|
|
|
$10
|
|
|
|
$74
|
|
Income before income taxes
|
|
$2,005
|
|
|
|
$—
|
|
|
|
$2,005
|
|
|
For the Year Ended December 31, 2016
|
||||||||||
($ in millions)
|
As Previously Reported
|
|
|
Reclassifications
|
|
|
As Revised
|
|
|||
Cost of sales, exclusive of depreciation and amortization
|
|
$7,693
|
|
|
|
($28
|
)
|
|
|
$7,665
|
|
Selling, general and administrative
|
|
$3,588
|
|
|
|
($33
|
)
|
|
|
$3,555
|
|
Research and development, net
|
|
$459
|
|
|
|
($6
|
)
|
|
|
$453
|
|
Other charges
|
|
$175
|
|
|
|
$67
|
|
|
|
$242
|
|
Income before income taxes
|
|
$779
|
|
|
|
$—
|
|
|
|
$779
|
|
Accounting Standard Update
|
|
2018-14
|
Compensation - Retirement Benefits - Defined Benefit Plans
|
2017-12
|
Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities
|
2017-09
|
Stock Compensation - Scope of Modification Accounting
|
2016-16
|
Intra-Entity Transfers of Assets Other Than Inventory
|
2016-15
|
Classification of Certain Cash Receipts and Cash Payments
|
2016-01
|
Recognition and Measurement of Financial Assets and Liabilities
|
|
Performance Coatings
|
|
Industrial Coatings
|
|
Total Net Sales
|
||||||||||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
|||||||||
United States and Canada
|
|
$4,062
|
|
|
$4,031
|
|
|
$4,055
|
|
|
|
$2,423
|
|
|
$2,276
|
|
|
$2,199
|
|
|
|
$6,485
|
|
|
$6,307
|
|
|
$6,254
|
|
EMEA
|
2,936
|
|
2,761
|
|
2,619
|
|
|
1,742
|
|
1,628
|
|
1,545
|
|
|
4,678
|
|
4,389
|
|
4,164
|
|
|||||||||
Asia Pacific
|
1,071
|
|
970
|
|
959
|
|
|
1,547
|
|
1,553
|
|
1,472
|
|
|
2,618
|
|
2,523
|
|
2,431
|
|
|||||||||
Latin America
|
1,018
|
|
968
|
|
947
|
|
|
575
|
|
561
|
|
474
|
|
|
1,593
|
|
1,529
|
|
1,421
|
|
|||||||||
Total
|
|
$9,087
|
|
|
$8,730
|
|
|
$8,580
|
|
|
|
$6,287
|
|
|
$6,018
|
|
|
$5,690
|
|
|
|
$15,374
|
|
|
$14,748
|
|
|
$14,270
|
|
|
Year Ended December 31, 2018
|
||||||||||
($ in millions)
|
Without adoption
|
|
|
Adjustments
|
|
|
As Reported
|
|
|||
Net sales
|
|
$15,399
|
|
|
|
($25
|
)
|
|
|
$15,374
|
|
Cost of sales, exclusive of depreciation and amortization
|
|
$8,925
|
|
|
|
$76
|
|
|
|
$9,001
|
|
Selling, general and administrative
|
|
$3,682
|
|
|
|
($109
|
)
|
|
|
$3,573
|
|
Other income
|
|
($122
|
)
|
|
|
$8
|
|
|
|
($114
|
)
|
Income before income taxes
|
|
$1,693
|
|
|
|
$—
|
|
|
|
$1,693
|
|
(a)
|
The net deferred income tax liability is included in assets due to the Company's tax jurisdictional netting.
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
|||
Net sales
|
|
$—
|
|
|
$217
|
|
|
$908
|
|
Income from operations
|
|
$21
|
|
|
$30
|
|
|
$111
|
|
Net gains on the divestitures of businesses
|
—
|
|
343
|
|
421
|
|
|||
Income tax expense
|
5
|
|
140
|
|
202
|
|
|||
Income from discontinued operations, net of tax
|
|
$16
|
|
|
$233
|
|
|
$330
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
|||
Receivables
|
|
|
|
|||||
|
Trade - net
(1)
|
|
$2,505
|
|
|
|
$2,559
|
|
|
Equity affiliates
|
4
|
|
|
5
|
|
||
|
Other - net
|
336
|
|
|
339
|
|
||
|
Total
|
|
$2,845
|
|
|
|
$2,903
|
|
Inventories
(2)
|
|
|
|
|||||
|
Finished products
|
|
$1,105
|
|
|
|
$1,083
|
|
|
Work in process
|
193
|
|
|
177
|
|
||
|
Raw materials
|
452
|
|
|
437
|
|
||
|
Supplies
|
33
|
|
|
33
|
|
||
|
Total
|
|
$1,783
|
|
|
|
$1,730
|
|
Accounts payable and accrued liabilities
|
|
|
|
|||||
|
Trade
|
|
$2,177
|
|
|
|
$2,321
|
|
|
Accrued payroll
|
424
|
|
|
441
|
|
||
|
Customer rebates
|
283
|
|
|
261
|
|
||
|
Other postretirement and pension benefits
|
80
|
|
|
78
|
|
||
|
Income taxes
|
112
|
|
|
100
|
|
||
|
Other
|
547
|
|
|
580
|
|
||
|
Total
|
|
$3,623
|
|
|
|
$3,781
|
|
(1)
|
Allowance for doubtful accounts was
$24 million
and
$25 million
as of
December 31, 2018
and
2017
, respectively.
|
(2)
|
Inventories valued using the LIFO method of inventory valuation comprised
36%
and
34%
of total gross inventory values as of
December 31, 2018
and
2017
, respectively. If the FIFO method of inventory valuation had been used, inventories would have been
$113 million
and
$103 million
higher as of
December 31, 2018
and
2017
, respectively. During the years ended
December 31, 2018
and
2017
, certain inventories accounted for on the LIFO method of accounting were reduced, which resulted in the liquidation of certain quantities carried at costs prevailing in prior years. The effect on Income before income taxes was income of
$2 million
and
zero
for the years ended
December 31, 2018
and
2017
, respectively.
|
($ in millions)
|
Useful Lives (years)
|
|
2018
|
|
|
2017
|
|
|||
|
Land and land improvements
|
1-30
|
|
|
$489
|
|
|
|
$487
|
|
|
Buildings
|
20-40
|
|
1,472
|
|
|
1,488
|
|
||
|
Machinery and equipment
|
5-25
|
|
3,387
|
|
|
3,432
|
|
||
|
Other
|
3-20
|
|
989
|
|
|
958
|
|
||
|
Construction in progress
|
|
|
296
|
|
|
229
|
|
||
|
Total
(1)
|
|
|
|
$6,633
|
|
|
|
$6,594
|
|
|
Less: accumulated depreciation
|
|
|
3,828
|
|
|
3,770
|
|
||
|
Net
|
|
|
|
$2,805
|
|
|
|
$2,824
|
|
(1)
|
Interest capitalized in
2018
,
2017
and
2016
was
$4 million
,
$7 million
and
$8 million
, respectively.
|
($ in millions)
|
2018
|
|
|
2017
|
|
||
Investments in equity affiliates
|
|
$132
|
|
|
|
$135
|
|
Marketable equity securities (See Note 10)
|
69
|
|
|
79
|
|
||
Other
|
50
|
|
|
54
|
|
||
Total
|
|
$251
|
|
|
|
$268
|
|
Goodwill
|
|||||||||
($ in millions)
|
Performance Coatings
|
|
Industrial Coatings
|
|
Total
|
|
|||
January 1, 2017
|
|
$2,870
|
|
|
$702
|
|
|
$3,572
|
|
Acquisitions, including purchase accounting adjustments
|
23
|
|
89
|
|
112
|
|
|||
Foreign currency translation
|
211
|
|
47
|
|
258
|
|
|||
December 31, 2017
|
|
$3,104
|
|
|
$838
|
|
|
$3,942
|
|
Acquisitions, including purchase accounting adjustments
|
248
|
|
(13
|
)
|
235
|
|
|||
Foreign currency translation
|
(86
|
)
|
(21
|
)
|
(107
|
)
|
|||
December 31, 2018
|
|
$3,266
|
|
|
$804
|
|
|
$4,070
|
|
Identifiable Intangible Assets
|
|||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||
($ in millions)
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
||||||
Indefinite-Lived Identifiable Intangible Assets
|
|||||||||||||||||||
Trademarks
|
|
$1,140
|
|
|
$—
|
|
|
$1,140
|
|
|
|
$1,158
|
|
|
$—
|
|
|
$1,158
|
|
Definite-Lived Identifiable Intangible Assets
|
|
|
|
|
|
|
|
||||||||||||
Acquired technology
|
|
$648
|
|
|
($515
|
)
|
|
$133
|
|
|
|
$613
|
|
|
($489
|
)
|
|
$124
|
|
Customer-related
|
1,396
|
|
(798
|
)
|
598
|
|
|
1,437
|
|
(762
|
)
|
675
|
|
||||||
Tradenames
|
190
|
|
(96
|
)
|
94
|
|
|
166
|
|
(87
|
)
|
79
|
|
||||||
Other
|
44
|
|
(37
|
)
|
7
|
|
|
44
|
|
(35
|
)
|
9
|
|
||||||
Total Definite Lived Intangible Assets
|
|
$2,278
|
|
|
($1,446
|
)
|
|
$832
|
|
|
|
$2,260
|
|
|
($1,373
|
)
|
|
$887
|
|
Total Identifiable Intangible Assets
|
|
$3,418
|
|
|
($1,446
|
)
|
|
$1,972
|
|
|
|
$3,418
|
|
|
($1,373
|
)
|
|
$2,045
|
|
($ in millions)
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
|||||
Estimated future amortization expense
|
|
$125
|
|
|
$100
|
|
|
$95
|
|
|
$85
|
|
|
$80
|
|
Restructuring Charges
|
|||||||||||
($ in millions)
|
Severance and Other Costs
|
|
|
Asset Write-offs
|
|
|
Total
|
|
|||
Performance Coatings
|
|
$77
|
|
|
|
$45
|
|
|
|
$122
|
|
Industrial Coatings
|
52
|
|
|
14
|
|
|
66
|
|
|||
Corporate
|
7
|
|
|
—
|
|
|
7
|
|
|||
Release of prior reserves
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Total 2016 restructuring charge
|
|
$132
|
|
|
|
$59
|
|
|
|
$191
|
|
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$49
|
|
|
|
$3
|
|
|
|
$52
|
|
Industrial Coatings
|
21
|
|
|
—
|
|
|
21
|
|
|||
Corporate
|
10
|
|
|
—
|
|
|
10
|
|
|||
Total 2018 restructuring charge
|
|
$80
|
|
|
|
$3
|
|
|
|
$83
|
|
Restructuring Reserve Activity
|
|||
($ in millions)
|
Total Reserve
|
|
|
December 31, 2016
|
|
$130
|
|
2017 Activity
|
3
|
|
|
Cash payments
|
(49
|
)
|
|
Foreign currency impact
|
18
|
|
|
December 31, 2017
|
|
$102
|
|
Total 2018 restructuring charge
|
83
|
|
|
Additional actions approved
|
32
|
|
|
Release of prior reserves and other adjustments
(1)
|
(49
|
)
|
|
Cash payments
|
(66
|
)
|
|
Foreign currency impact
|
(4
|
)
|
|
Other
|
12
|
|
|
December 31, 2018
|
|
$110
|
|
(1)
|
Reductions to remaining restructuring reserves to reflect the current estimate of the costs to complete the actions.
|
($ in millions)
|
Maturity Date
|
2018
|
|
|
2017
|
|
||
0.00% note (€300)
|
2019
|
|
$343
|
|
|
|
$358
|
|
2.3% notes
|
2019
|
299
|
|
|
299
|
|
||
3.6% notes
|
2020
|
498
|
|
|
497
|
|
||
9% non-callable debentures
(1)
|
2021
|
133
|
|
|
133
|
|
||
0.875% notes (€600)
|
2022
|
685
|
|
|
716
|
|
||
3.2% notes ($300)
(2)
|
2023
|
298
|
|
|
—
|
|
||
0.875% note (€600)
|
2025
|
679
|
|
|
710
|
|
||
1.4% notes (€600)
|
2027
|
679
|
|
|
711
|
|
||
3.75% notes ($700)
(3)
|
2028
|
694
|
|
|
—
|
|
||
2.5% note (€80)
|
2029
|
91
|
|
|
95
|
|
||
7.70% notes
|
2038
|
174
|
|
|
174
|
|
||
5.5% notes
|
2040
|
247
|
|
|
247
|
|
||
3% note (€120)
|
2044
|
131
|
|
|
137
|
|
||
Various other non-U.S. debt
(4)
|
Various
|
39
|
|
|
43
|
|
||
Capital lease obligations
|
Various
|
12
|
|
|
15
|
|
||
Impact of derivatives on debt
(1)(5)
|
N/A
|
10
|
|
|
3
|
|
||
Total
|
|
|
$5,012
|
|
|
|
$4,138
|
|
Less payments due within one year
|
N/A
|
647
|
|
|
4
|
|
||
Long-term debt
|
|
|
$4,365
|
|
|
|
$4,134
|
|
(1)
|
PPG entered into several interest rate swaps, which were subsequently settled in prior periods. The impact of these settlements are being amortized over the remaining life of the debentures as a reduction to interest expense. The weighted average interest rate for these borrowings was
8.4%
for the years ended
December 31, 2018
and
2017
.
|
(2)
|
In February 2018, PPG entered into interest rate swaps which converted
$150 million
of the notes from a fixed interest rate to a floating interest rate based on the three month London Interbank Offered Rate (LIBOR). The impact of the derivative on the notes represents the fair value adjustment of the debt. The average effective interest rate for the portion of the notes impacted by the swaps was
2.7%
for the period ended December 31, 2018. Refer to Note
10
, “
Financial Instruments, Hedging Activities and Fair Value Measurements
” for additional information.
|
(3)
|
In February 2018, PPG entered into interest rate swaps which converted
$375 million
of the notes from a fixed interest rate to a floating interest rate based on the three month LIBOR. The impact of the derivative on the notes represents the fair value adjustment of the debt. The average effective interest rate for the portion of the notes impacted by the swaps was
3.2%
for the period ended December 31, 2018. Refer to Note
10
, “
Financial Instruments, Hedging Activities and Fair Value Measurements
” for additional information.
|
(4)
|
Weighted average interest rate of
3.8%
and
3.7%
as of
December 31, 2018
and
2017
, respectively.
|
(5)
|
Fair value adjustment of the
3.2%
$300 million
notes and
3.75%
$700 million
notes as a result of fair value hedge accounting treatment related to the outstanding interest rate swaps as of
December 31, 2018
. Refer to Note
10
, “
Financial Instruments, Hedging Activities and Fair Value Measurements
” for additional information.
|
($ in millions)
|
Maturity per year
|
|
|
2019
|
|
$647
|
|
2020
|
497
|
|
|
2021
|
131
|
|
|
2022
|
685
|
|
|
2023
|
298
|
|
|
Thereafter
|
|
$2,754
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
||
Various, weighted average 3.4% and 1.9% as of December 31, 2018 and 2017, respectively.
|
|
$4
|
|
|
|
$8
|
|
|
2018
|
|
2017
|
|
2016
|
Caption in Consolidated Statement of Income
|
|||||||||||||||
($ in millions)
|
(Loss)/Gain Deferred in AOCL
|
|
Gain/(Loss) Recognized
|
|
|
Loss Deferred in AOCL
|
|
Gain Recognized
|
|
|
Gain/(Loss) Deferred in AOCL
|
|
(Loss)/Gain Recognized
|
|
|||||||
Fair Value
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate Swaps
|
|
|
$3
|
|
|
|
|
$—
|
|
|
|
|
$—
|
|
Interest expense
|
||||||
Total Fair Value
|
|
|
|
$3
|
|
|
|
|
|
$—
|
|
|
|
|
|
$—
|
|
|
|||
Cash Flow
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
(1)
|
|
($9
|
)
|
|
($8
|
)
|
|
|
($7
|
)
|
|
$9
|
|
|
|
$1
|
|
|
($5
|
)
|
Other charges and Cost of sales
|
Total Cash Flow
|
|
($9
|
)
|
|
($8
|
)
|
|
|
($7
|
)
|
|
$9
|
|
|
|
$1
|
|
|
($5
|
)
|
|
Net Investment
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross currency swaps
|
|
$21
|
|
|
$13
|
|
|
|
($61
|
)
|
|
$—
|
|
|
|
$25
|
|
|
$—
|
|
Interest expense
|
Foreign denominated debt
|
124
|
|
—
|
|
|
(403
|
)
|
—
|
|
|
122
|
|
—
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
(14
|
)
|
—
|
|
|
||||||
Total Net Investment
|
|
$145
|
|
|
$13
|
|
|
|
($464
|
)
|
|
$—
|
|
|
|
$133
|
|
|
$—
|
|
|
Economic
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
|
|
|
$55
|
|
|
|
|
$14
|
|
|
|
|
$14
|
|
Other charges
|
(1
)
|
For the period ended December 31, 2018, the amounts excluded from effectiveness recognized in earnings based on an amortization approach was expense of $4 million.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
($ in millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other current assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable equity securities
|
|
$4
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$4
|
|
|
|
$—
|
|
|
|
$—
|
|
Foreign currency forward contracts
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||
Foreign currency forward contracts
(b)
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cross currency swaps
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cross currency swaps
(c)
|
|
$—
|
|
|
|
$35
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
Interest rate swaps
(d)
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Marketable equity securities
|
|
$69
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$79
|
|
|
|
$—
|
|
|
|
$—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
(a)
|
|
$—
|
|
|
|
$1
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$23
|
|
|
|
$—
|
|
Foreign currency forward contracts
(b)
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(a)
|
Cash flow hedges
|
(b)
|
Derivatives not designated as hedging instruments
|
(c)
|
Net investment hedges
|
(d)
|
Fair value hedges
|
($ in millions)
|
December 31, 2018
(a)
|
|
December 31, 2017
(b)
|
Long-term debt - carrying value
|
$5,000
|
|
$4,123
|
Long-term debt - fair value
|
$5,101
|
|
$4,341
|
(a)
|
Excluding capital lease obligations of
$12 million
and short term borrowings of
$4 million
as of
December 31, 2018
.
|
(b)
|
Excluding capital lease obligations of
$15 million
and short term borrowings of
$8 million
as of
December 31, 2017
.
|
($ in millions, except per share amounts)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Earnings per common share (attributable to PPG)
|
|||||||||||
Income from continuing operations, net of tax
|
|
$1,323
|
|
|
|
$1,369
|
|
|
|
$543
|
|
Income from discontinued operations, net of tax
|
18
|
|
|
225
|
|
|
330
|
|
|||
Net income (attributable to PPG)
|
|
$1,341
|
|
|
|
$1,594
|
|
|
|
$873
|
|
Weighted average common shares outstanding
|
243.9
|
|
|
256.1
|
|
|
265.6
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|||
Stock options
|
0.8
|
|
|
0.9
|
|
|
0.8
|
|
|||
Other stock compensation plans
|
0.7
|
|
|
0.8
|
|
|
1.0
|
|
|||
Potentially dilutive common shares
|
1.5
|
|
|
1.7
|
|
|
1.8
|
|
|||
Adjusted weighted average common shares outstanding
|
245.4
|
|
|
257.8
|
|
|
267.4
|
|
|||
Earnings per common share (attributable to PPG):
|
|
|
|
|
|
||||||
Income from continuing operations, net of tax
|
|
$5.43
|
|
|
|
$5.34
|
|
|
|
$2.05
|
|
Income from discontinued operations, net of tax
|
0.07
|
|
|
0.88
|
|
|
1.24
|
|
|||
Net income (attributable to PPG)
|
|
$5.50
|
|
|
|
$6.22
|
|
|
|
$3.29
|
|
Earnings per common share - assuming dilution (attributable to PPG)
|
|||||||||||
Income from continuing operations, net of tax
|
|
$5.40
|
|
|
|
$5.31
|
|
|
|
$2.04
|
|
Income from discontinued operations, net of tax
|
0.07
|
|
|
0.87
|
|
|
1.23
|
|
|||
Net income (attributable to PPG)
|
|
$5.47
|
|
|
|
$6.18
|
|
|
|
$3.27
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Current
|
|
|
|
|
|
||||||
U.S. federal
|
|
$7
|
|
|
|
$179
|
|
|
|
($251
|
)
|
U.S. state and local
|
4
|
|
|
49
|
|
|
(12
|
)
|
|||
Foreign
|
297
|
|
|
349
|
|
|
306
|
|
|||
Total current income tax expense
|
|
$308
|
|
|
|
$577
|
|
|
|
$43
|
|
Deferred
|
|
|
|
|
|
||||||
U.S. federal
|
|
$44
|
|
|
|
$107
|
|
|
|
$173
|
|
U.S. state and local
|
7
|
|
|
(16
|
)
|
|
(10
|
)
|
|||
Foreign
|
(6
|
)
|
|
(53
|
)
|
|
8
|
|
|||
Total deferred income tax expense
|
|
$45
|
|
|
|
$38
|
|
|
|
$171
|
|
Total income tax expense
|
|
$353
|
|
|
|
$615
|
|
|
|
$214
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
U.S. federal income tax rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Changes in rate due to:
|
|
|
|
|
|
|||
U.S. tax cost - Tax Cuts & Jobs Act
|
(2.5
|
)
|
|
11.0
|
|
|
—
|
|
U.S./foreign tax differential
|
3.3
|
|
|
(9.3
|
)
|
|
(17.7
|
)
|
U.S. current tax benefit on foreign exchange realization
|
—
|
|
|
(4.9
|
)
|
|
(3.0
|
)
|
U.S. tax incentives
|
(1.0
|
)
|
|
(2.3
|
)
|
|
(3.7
|
)
|
U.S. tax (benefit) cost on foreign dividends
|
(0.4
|
)
|
|
(1.9
|
)
|
|
0.4
|
|
U.S. state and local taxes
|
0.5
|
|
|
1.1
|
|
|
(1.8
|
)
|
U.S. deferred tax benefit on foreign income
|
—
|
|
|
(0.6
|
)
|
|
(3.1
|
)
|
Asbestos charge
|
—
|
|
|
—
|
|
|
19.1
|
|
Other
|
—
|
|
|
2.6
|
|
|
2.3
|
|
Effective income tax rate
|
20.9
|
%
|
|
30.7
|
%
|
|
27.5
|
%
|
($ in millions)
|
2018
|
|
|
2017
|
|
||
Deferred income tax assets related to
|
|
|
|
||||
Employee benefits
|
|
$366
|
|
|
|
$399
|
|
Contingent and accrued liabilities
|
149
|
|
|
164
|
|
||
Operating loss and other carry-forwards
|
251
|
|
|
221
|
|
||
Inventories
|
7
|
|
|
6
|
|
||
Property
|
48
|
|
|
51
|
|
||
Other
|
82
|
|
|
135
|
|
||
Valuation allowance
|
(164
|
)
|
|
(173
|
)
|
||
Total
|
|
$739
|
|
|
|
$803
|
|
Deferred income tax liabilities related to
|
|
|
|
||||
Property
|
|
$310
|
|
|
|
$314
|
|
Intangibles
|
545
|
|
|
578
|
|
||
Employee benefits
|
46
|
|
|
11
|
|
||
Derivatives
|
1
|
|
|
1
|
|
||
Undistributed foreign earnings
|
5
|
|
|
24
|
|
||
Other
|
9
|
|
|
20
|
|
||
Total
|
|
$916
|
|
|
|
$948
|
|
Deferred income tax liabilities – net
|
|
($177
|
)
|
|
|
($145
|
)
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
Expiration
|
||
Available net operating loss carryforwards:
|
|
|
|
|
|
||||
Indefinite expiration
|
|
$462
|
|
|
|
$447
|
|
|
NA
|
Definite expiration
|
796
|
|
|
247
|
|
|
2019 - 2038
|
||
Total
|
|
$1,258
|
|
|
|
$694
|
|
|
NA
|
Net operating loss carryforwards, tax effected
|
|
$192
|
|
|
|
$210
|
|
|
NA
|
Income tax credit carryforwards
|
|
$61
|
|
|
|
$9
|
|
|
2019 - 2038
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
January 1
|
|
$148
|
|
|
|
$94
|
|
|
|
$82
|
|
Current year tax positions - additions
|
36
|
|
|
37
|
|
|
25
|
|
|||
Prior year tax positions - additions
|
17
|
|
|
26
|
|
|
8
|
|
|||
Prior year tax positions - reductions
|
(6
|
)
|
|
—
|
|
|
(11
|
)
|
|||
Statute of limitations expirations
|
(9
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|||
Settlements
|
(15
|
)
|
|
(10
|
)
|
|
—
|
|
|||
Foreign currency translation
|
(5
|
)
|
|
9
|
|
|
(2
|
)
|
|||
December 31
|
|
$166
|
|
|
|
$148
|
|
|
|
$94
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Accrued interest and penalties related to unrecognized tax benefits
|
|
$16
|
|
|
|
$15
|
|
|
|
$9
|
|
Loss recognized in income tax expense related to interest and penalties
|
|
$2
|
|
|
|
$4
|
|
|
|
$1
|
|
|
Defined Benefit Pension Plans
|
|||||||||||||||||
|
United States
|
International
|
Total PPG
|
|||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||
Projected benefit obligation, January 1
|
|
$1,706
|
|
|
$1,692
|
|
|
$1,756
|
|
|
$1,560
|
|
|
$3,462
|
|
|
$3,252
|
|
Service cost
|
17
|
|
19
|
|
11
|
|
14
|
|
28
|
|
33
|
|
||||||
Interest cost
|
57
|
|
60
|
|
40
|
|
38
|
|
97
|
|
98
|
|
||||||
Actuarial losses (gains) - net
|
(129
|
)
|
124
|
|
(117
|
)
|
61
|
|
(246
|
)
|
185
|
|
||||||
Benefits paid
|
(70
|
)
|
(104
|
)
|
(55
|
)
|
(63
|
)
|
(125
|
)
|
(167
|
)
|
||||||
Plan transfers
|
—
|
|
—
|
|
(8
|
)
|
—
|
|
(8
|
)
|
—
|
|
||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
(88
|
)
|
165
|
|
(88
|
)
|
165
|
|
||||||
Settlements and curtailments
|
—
|
|
(84
|
)
|
(24
|
)
|
(1
|
)
|
(24
|
)
|
(85
|
)
|
||||||
Former glass business changes, net
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
||||||
Other
|
1
|
|
(1
|
)
|
3
|
|
(17
|
)
|
4
|
|
(18
|
)
|
||||||
Projected benefit obligation, December 31
|
|
$1,582
|
|
|
$1,706
|
|
|
$1,518
|
|
|
$1,756
|
|
|
$3,100
|
|
|
$3,462
|
|
Market value of plan assets, January 1
|
|
$1,196
|
|
|
$1,115
|
|
|
$1,687
|
|
|
$1,446
|
|
|
$2,883
|
|
|
$2,561
|
|
Actual return on plan assets
|
(82
|
)
|
156
|
|
(53
|
)
|
133
|
|
(135
|
)
|
289
|
|
||||||
Company contributions
|
75
|
|
54
|
|
24
|
|
33
|
|
99
|
|
87
|
|
||||||
Participant contributions
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
1
|
|
||||||
Benefits paid
|
(49
|
)
|
(47
|
)
|
(53
|
)
|
(62
|
)
|
(102
|
)
|
(109
|
)
|
||||||
Plan settlements
|
—
|
|
(82
|
)
|
(24
|
)
|
(13
|
)
|
(24
|
)
|
(95
|
)
|
||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
(95
|
)
|
149
|
|
(95
|
)
|
149
|
|
||||||
Other
|
—
|
|
—
|
|
(8
|
)
|
—
|
|
(8
|
)
|
—
|
|
||||||
Market value of plan assets, December 31
|
|
$1,140
|
|
|
$1,196
|
|
|
$1,478
|
|
|
$1,687
|
|
|
$2,618
|
|
|
$2,883
|
|
Funded Status
|
|
($442
|
)
|
|
($510
|
)
|
|
($40
|
)
|
|
($69
|
)
|
|
($482
|
)
|
|
($579
|
)
|
Amounts recognized in the Consolidated Balance Sheet:
|
|
|
|
|
|
|
||||||||||||
Other assets (long-term)
|
—
|
|
—
|
|
189
|
|
173
|
|
189
|
|
173
|
|
||||||
Accounts payable and accrued liabilities
|
(18
|
)
|
(16
|
)
|
(8
|
)
|
(7
|
)
|
(26
|
)
|
(23
|
)
|
||||||
Accrued pensions
|
(424
|
)
|
(494
|
)
|
(221
|
)
|
(235
|
)
|
(645
|
)
|
(729
|
)
|
||||||
Net liability recognized
|
|
($442
|
)
|
|
($510
|
)
|
|
($40
|
)
|
|
($69
|
)
|
|
($482
|
)
|
|
($579
|
)
|
|
Other Postretirement Benefit Plans
|
|||||||||||||||||
|
United States
|
International
|
Total PPG
|
|||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||
Projected benefit obligation, January 1
|
|
$641
|
|
|
$692
|
|
|
$112
|
|
|
$100
|
|
|
$753
|
|
|
$792
|
|
Service cost
|
9
|
|
10
|
|
1
|
|
—
|
|
10
|
|
10
|
|
||||||
Interest cost
|
21
|
|
21
|
|
3
|
|
3
|
|
24
|
|
24
|
|
||||||
Actuarial losses (gains) - net
|
(38
|
)
|
(39
|
)
|
(9
|
)
|
12
|
|
(47
|
)
|
(27
|
)
|
||||||
Benefits paid
|
(45
|
)
|
(43
|
)
|
(4
|
)
|
(5
|
)
|
(49
|
)
|
(48
|
)
|
||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
(8
|
)
|
8
|
|
(8
|
)
|
8
|
|
||||||
Former glass business changes, net
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
—
|
|
(8
|
)
|
||||||
Other
|
(1
|
)
|
—
|
|
(1
|
)
|
2
|
|
(2
|
)
|
2
|
|
||||||
Projected benefit obligation, December 31
|
|
$587
|
|
|
$641
|
|
|
$94
|
|
|
$112
|
|
|
$681
|
|
|
$753
|
|
Amounts recognized in the Consolidated Balance Sheet:
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
(48
|
)
|
(48
|
)
|
(4
|
)
|
(6
|
)
|
(52
|
)
|
(54
|
)
|
||||||
Other postretirement benefits
|
(539
|
)
|
(593
|
)
|
(90
|
)
|
(106
|
)
|
(629
|
)
|
(699
|
)
|
||||||
Net liability recognized
|
|
($587
|
)
|
|
($641
|
)
|
|
($94
|
)
|
|
($112
|
)
|
|
($681
|
)
|
|
($753
|
)
|
|
Pensions
|
||||||
($ in millions)
|
2018
|
|
|
2017
|
|
||
Plans with PBO in Excess of Plan Assets:
|
|
|
|
||||
Projected benefit obligation
|
|
$1,935
|
|
|
|
$2,544
|
|
Fair value of plan assets
|
|
$1,269
|
|
|
|
$1,792
|
|
Plans with ABO in Excess of Plan Assets:
|
|
|
|
||||
Accumulated benefit obligation
|
|
$1,883
|
|
|
|
$2,434
|
|
Fair value of plan assets
|
|
$1,269
|
|
|
|
$1,749
|
|
|
Pensions
|
|
Other Postretirement Benefits
|
||||||||||
($ in millions)
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||
Accumulated net actuarial losses
|
|
$800
|
|
|
$835
|
|
|
|
$113
|
|
|
$180
|
|
Accumulated prior service cost (credit)
|
2
|
|
—
|
|
|
(178
|
)
|
(239
|
)
|
||||
Total
|
|
$802
|
|
|
$835
|
|
|
|
($65
|
)
|
|
($59
|
)
|
($ in millions)
|
Pensions
|
|
|
Other Postretirement Benefits
|
|
||
Net actuarial loss (gain) arising during the year
|
|
$39
|
|
|
|
($47
|
)
|
New prior service cost
|
2
|
|
|
1
|
|
||
Amortization of actuarial loss
|
(63
|
)
|
|
(19
|
)
|
||
Amortization of prior service credit
|
—
|
|
|
60
|
|
||
Foreign currency translation adjustments
|
(10
|
)
|
|
(1
|
)
|
||
Impact of settlements and curtailments
|
(1
|
)
|
|
—
|
|
||
Net change
|
|
($33
|
)
|
|
|
($6
|
)
|
|
Pensions
|
|
Other Postretirement Benefits
|
||||||||||||||||
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
||||||
Service cost
|
|
$28
|
|
|
$33
|
|
|
$48
|
|
|
|
$10
|
|
|
$10
|
|
|
$15
|
|
Interest cost
|
97
|
|
98
|
|
142
|
|
|
24
|
|
24
|
|
31
|
|
||||||
Expected return on plan assets
|
(150
|
)
|
(141
|
)
|
(213
|
)
|
|
—
|
|
—
|
|
—
|
|
||||||
Amortization of prior service credit
|
—
|
|
—
|
|
(1
|
)
|
|
(60
|
)
|
(59
|
)
|
(31
|
)
|
||||||
Amortization of actuarial losses
|
63
|
|
75
|
|
110
|
|
|
19
|
|
12
|
|
19
|
|
||||||
Settlements, curtailments, and special termination benefits
|
5
|
|
60
|
|
1,015
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Net periodic benefit cost/(income)
|
|
$43
|
|
|
$125
|
|
|
$1,101
|
|
|
|
($7
|
)
|
|
($13
|
)
|
|
$34
|
|
|
United States
|
|
International
|
|
Total PPG
|
|||||||||
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
Discount rate
|
4.4
|
%
|
3.7
|
%
|
|
2.9
|
%
|
2.5
|
%
|
|
3.7
|
%
|
3.2
|
%
|
Rate of compensation increase
|
1.5
|
%
|
1.5
|
%
|
|
0.9
|
%
|
1.1
|
%
|
|
1.2
|
%
|
1.3
|
%
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Discount rate
|
3.2
|
%
|
|
3.6
|
%
|
|
3.6
|
%
|
Expected return on assets
|
5.4
|
%
|
|
5.4
|
%
|
|
6.1
|
%
|
Rate of compensation increase
|
1.2
|
%
|
|
1.3
|
%
|
|
1.6
|
%
|
($ in millions)
|
2018
|
|
2017
|
|
2016
|
|
|||
U.S. defined benefit pension plans
(a)
|
|
$75
|
|
|
$54
|
|
|
$134
|
|
Non-U.S. defined benefit pension plans
(b)
|
|
$24
|
|
|
$33
|
|
|
$54
|
|
(a)
|
During 2016, U.S. contributions totaling
$12 million
associated with the former glass segment were recast as cash flows from operations - discontinued operations and are excluded from the table above.
|
(b)
|
During 2016, non-U.S. contributions totaling
$4 million
associated with the former European fiberglass business were recast as cash flows from operations - discontinued operations and are excluded from the table above.
|
($ in millions)
|
Pensions
|
|
|
Other Postretirement Benefits
|
|
||
2019
|
|
$136
|
|
|
|
$53
|
|
2020
|
|
$139
|
|
|
|
$53
|
|
2021
|
|
$145
|
|
|
|
$53
|
|
2022
|
|
$147
|
|
|
|
$52
|
|
2023
|
|
$153
|
|
|
|
$51
|
|
2024 to 2028
|
|
$826
|
|
|
|
$228
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||
($ in millions)
|
Level 1
(1)
|
|
Level 2
(1)
|
|
Level 3
(1)
|
|
Total
|
|
|
Level 1
(1)
|
|
Level 2
(1)
|
|
Level 3
(1)
|
|
Total
|
|
||||||||
Asset Category
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S.
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Large cap
|
|
$43
|
|
|
$94
|
|
|
$—
|
|
|
$137
|
|
|
|
$—
|
|
|
$83
|
|
|
$—
|
|
|
$83
|
|
Small cap
|
23
|
|
—
|
|
—
|
|
23
|
|
|
29
|
|
—
|
|
—
|
|
29
|
|
||||||||
Non-U.S.
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Developed and emerging markets
(2)
|
115
|
|
103
|
|
—
|
|
218
|
|
|
115
|
|
79
|
|
—
|
|
194
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents
|
3
|
|
19
|
|
—
|
|
22
|
|
|
—
|
|
11
|
|
—
|
|
11
|
|
||||||||
Corporate
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S.
(4)
|
—
|
|
220
|
|
77
|
|
297
|
|
|
—
|
|
201
|
|
86
|
|
287
|
|
||||||||
Developed and emerging markets
(2)
|
—
|
|
4
|
|
—
|
|
4
|
|
|
—
|
|
43
|
|
—
|
|
43
|
|
||||||||
Diversified
(5)
|
—
|
|
142
|
|
—
|
|
142
|
|
|
—
|
|
124
|
|
—
|
|
124
|
|
||||||||
Government
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S.
(4)
|
68
|
|
8
|
|
—
|
|
76
|
|
|
68
|
|
1
|
|
—
|
|
69
|
|
||||||||
Developed markets
|
—
|
|
6
|
|
—
|
|
6
|
|
|
—
|
|
101
|
|
—
|
|
101
|
|
||||||||
Other
(6)
|
—
|
|
14
|
|
359
|
|
373
|
|
|
—
|
|
14
|
|
418
|
|
432
|
|
||||||||
Real estate, hedge funds, and other
|
—
|
|
304
|
|
359
|
|
663
|
|
|
—
|
|
185
|
|
498
|
|
683
|
|
||||||||
Total assets in the fair value hierarchy
|
|
$252
|
|
|
$914
|
|
|
$795
|
|
|
$1,961
|
|
|
|
$212
|
|
|
$842
|
|
|
$1,002
|
|
|
$2,056
|
|
Common-collective trusts
(7)
|
—
|
|
—
|
|
—
|
|
657
|
|
|
—
|
|
—
|
|
—
|
|
827
|
|
||||||||
Total Investments
|
|
$252
|
|
|
$914
|
|
|
$795
|
|
|
$2,618
|
|
|
|
$212
|
|
|
$842
|
|
|
$1,002
|
|
|
$2,883
|
|
(1)
|
These levels refer to the accounting guidance on fair value measurement described in Note
10
, “
Financial Instruments, Hedging Activities and Fair Value Measurements
.”
|
(2)
|
These amounts represent holdings in investment grade debt or equity securities of issuers in both developed markets and emerging economies.
|
(3)
|
This category represents investment grade debt securities from a diverse set of industry issuers.
|
(4)
|
These investments are primarily long duration fixed income securities.
|
(5)
|
This category represents commingled funds invested in diverse portfolios of debt securities.
|
(6)
|
This category includes mortgage-backed and asset backed debt securities, municipal bonds and other debt securities including derivatives.
|
(7)
|
Certain investments that are measured at net asset value per share (or its equivalent) are not required to be classified in the fair value hierarchy.
|
($ in millions)
|
Real Estate
|
|
|
Other Debt Securities
|
|
|
Hedge Funds and Other Assets
|
|
|
Total
|
|
||||
January 1, 2017
|
|
$129
|
|
|
|
$16
|
|
|
|
$370
|
|
|
|
$515
|
|
Realized gains
|
11
|
|
|
45
|
|
|
3
|
|
|
59
|
|
||||
Unrealized losses
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||
Transfers (out)/in, net
|
(5
|
)
|
|
355
|
|
|
36
|
|
|
386
|
|
||||
Foreign currency losses
|
3
|
|
|
2
|
|
|
32
|
|
|
37
|
|
||||
December 31, 2017
|
|
$138
|
|
|
|
$418
|
|
|
|
$446
|
|
|
|
$1,002
|
|
Realized gains (losses)
|
9
|
|
|
(29
|
)
|
|
10
|
|
|
(10
|
)
|
||||
Unrealized losses
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
(28
|
)
|
||||
Transfers (out)/in, net
|
(6
|
)
|
|
(12
|
)
|
|
(119
|
)
|
|
(137
|
)
|
||||
Foreign currency loss
|
(4
|
)
|
|
(18
|
)
|
|
(10
|
)
|
|
(32
|
)
|
||||
December 31, 2018
|
|
$137
|
|
|
|
$359
|
|
|
|
$299
|
|
|
|
$795
|
|
|
Consolidated Balance Sheet
|
|
||||||||||||
|
Asbestos Settlement Liability
|
|
Equity Forward (Asset) Liability
|
|
Pre-tax Charge
|
|
||||||||
($ in millions)
|
Current
|
|
|
Long-term
|
|
|
||||||||
Balance as of and Activity for the year ended December 31, 2015
|
|
$796
|
|
|
|
$252
|
|
|
|
($223
|
)
|
|
$12
|
|
Change in fair value:
|
|
|
|
|
|
|
||||||||
PPG stock
|
34
|
|
|
—
|
|
|
—
|
|
34
|
|
||||
Equity forward instrument
|
—
|
|
|
—
|
|
|
(35
|
)
|
(35
|
)
|
||||
Accretion of asbestos liability
|
—
|
|
|
6
|
|
|
—
|
|
6
|
|
||||
Settlement of equity forward instrument with counterparty
(a)
|
—
|
|
|
—
|
|
|
(49
|
)
|
—
|
|
||||
Contribution of PCE shares and relinquishment of PC investment
|
(15
|
)
|
|
—
|
|
|
—
|
|
—
|
|
||||
Contribution of 2,777,778 shares of PPG stock to the PC Trust
|
(308
|
)
|
|
—
|
|
|
308
|
|
—
|
|
||||
Contribution of cash to the PC Trust
(a)
|
(506
|
)
|
|
(258
|
)
|
|
—
|
|
—
|
|
||||
Reclassification
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
—
|
|
||||
Balance as of and Activity for the year ended December 31, 2016
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
|
$5
|
|
(a)
|
Cash outflows related to the asbestos settlement funding totaled
$813 million
in 2016.
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
New Jersey Chrome
|
|
$62
|
|
|
|
$4
|
|
|
|
$60
|
|
Other
|
16
|
|
|
6
|
|
|
34
|
|
|||
Total
|
|
$78
|
|
|
|
$10
|
|
|
|
$94
|
|
Cash outlays for environmental spending
|
|
$64
|
|
|
|
$44
|
|
|
|
$47
|
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
Shares Outstanding
|
|
January 1, 2016
|
581,146,136
|
|
|
(314,270,127
|
)
|
|
266,876,009
|
|
Purchases
|
—
|
|
|
(10,725,869
|
)
|
|
(10,725,869
|
)
|
Issuances
|
—
|
|
|
1,180,020
|
|
|
1,180,020
|
|
December 31, 2016
|
581,146,136
|
|
|
(323,815,976
|
)
|
|
257,330,160
|
|
Purchases
|
—
|
|
|
(7,427,557
|
)
|
|
(7,427,557
|
)
|
Issuances
|
—
|
|
|
1,271,796
|
|
|
1,271,796
|
|
December 31, 2017
|
581,146,136
|
|
|
(329,971,737
|
)
|
|
251,174,399
|
|
Purchases
|
—
|
|
|
(15,877,364
|
)
|
|
(15,877,364
|
)
|
Issuances
|
—
|
|
|
564,399
|
|
|
564,399
|
|
December 31, 2018
|
581,146,136
|
|
|
(345,284,702
|
)
|
|
235,861,434
|
|
($ in millions)
|
Unrealized Foreign Currency Translation Adjustments
|
|
Pension and Other Postretirement Benefit Adjustments, net of tax (c)
|
|
Unrealized Gain (Loss) on Derivatives, net of tax (d)
|
|
Accumulated Other Comprehensive Loss
|
|
||||||||||||
January 1, 2016
|
|
|
($1,332
|
)
|
|
|
($1,379
|
)
|
|
|
$9
|
|
|
|
($2,702
|
)
|
||||
Current year deferrals to AOCI (a)
|
(299
|
)
|
|
—
|
|
|
—
|
|
|
(299
|
)
|
|
||||||||
Current year deferrals to AOCI, tax effected (b)
|
(167
|
)
|
|
29
|
|
|
3
|
|
|
(135
|
)
|
|
||||||||
Reclassifications from AOCI to net income
|
—
|
|
|
779
|
|
|
1
|
|
|
780
|
|
|
||||||||
Period change
|
|
|
($466
|
)
|
|
|
$808
|
|
|
|
$4
|
|
|
|
$346
|
|
||||
December 31, 2016
|
|
|
($1,798
|
)
|
|
|
($571
|
)
|
|
|
$13
|
|
|
|
($2,356
|
)
|
||||
Current year deferrals to AOCI (a)
|
542
|
|
|
—
|
|
|
—
|
|
|
542
|
|
|
||||||||
Current year deferrals to AOCI, tax effected (b)
|
(311
|
)
|
|
20
|
|
|
(4
|
)
|
|
(295
|
)
|
|
||||||||
Reclassifications from AOCI to net income
|
—
|
|
|
58
|
|
|
(6
|
)
|
|
52
|
|
|
||||||||
Period change
|
|
|
$231
|
|
|
|
$78
|
|
|
|
($10
|
)
|
|
|
$299
|
|
||||
December 31, 2017
|
|
|
($1,567
|
)
|
|
|
($493
|
)
|
|
|
$3
|
|
|
|
($2,057
|
)
|
||||
Current year deferrals to AOCI (a)
|
(292
|
)
|
|
—
|
|
|
—
|
|
|
(292
|
)
|
|
||||||||
Current year deferrals to AOCI, tax effected (b)
|
148
|
|
|
(12
|
)
|
|
(7
|
)
|
|
129
|
|
|
||||||||
Reclassifications from AOCI to net income
|
—
|
|
|
21
|
|
|
6
|
|
|
27
|
|
|
||||||||
Period change
|
|
|
($144
|
)
|
|
|
$9
|
|
|
|
($1
|
)
|
|
|
($136
|
)
|
||||
Reclassification from AOCI to Retained earnings - Adoption of ASU 2018-02
|
|
(23
|
)
|
|
(84
|
)
|
|
—
|
|
|
(107
|
)
|
||||||||
December 31, 2018
|
|
|
($1,734
|
)
|
|
|
($568
|
)
|
|
|
$2
|
|
|
|
($2,300
|
)
|
(a)
|
Except for income taxes of
$9 million
related to foreign currency impacts of certain unasserted earnings, unrealized foreign currency translation adjustments related to translation of foreign denominated balance sheets are not presented net of tax given that no deferred U.S. income taxes have been provided on undistributed earnings of non-U.S. subsidiaries because they are deemed to be reinvested for an indefinite period of time.
|
(b)
|
The tax benefit (cost) related to unrealized foreign currency translation adjustments on tax inter-branch transactions and net investment hedges for the years ended
December 31, 2018
,
2017
and
2016
was
$4 million
,
$141 million
and
$(34) million
, respectively.
|
(c)
|
The tax cost related to the adjustment for pension and other postretirement benefits for the years ended
December 31, 2018
,
2017
and
2016
was
$(34) million
,
$(33) million
and
$(403) million
, respectively. Reclassifications from AOCI are included in the computation of net periodic benefit costs (See Note
13
, “
Employee Benefit Plans
”). The cumulative tax benefit related to the adjustment for pension and other postretirement benefits at
December 31, 2018
and
2017
was
$209 million
and
$243 million
, respectively.
|
(d)
|
The tax cost related to the change in the unrealized loss on derivatives for the year ended
December 31, 2018
was
$2 million
. The tax cost related to the change in the unrealized gain on derivatives for the years ended December 31,
2017
and
2016
was
$5 million
and
$2 million
, respectively. Reclassifications from AOCI are included in the gain or loss recognized on cash flow hedges (See Note
10
“
Financial Instruments, Hedging Activities and Fair Value Measurements
”).
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Gain on sale of assets
(1)
|
|
$33
|
|
|
|
$28
|
|
|
|
$6
|
|
Royalty income
|
10
|
|
|
11
|
|
|
12
|
|
|||
Share of net earnings of equity affiliates (See Note 6)
|
16
|
|
|
12
|
|
|
8
|
|
|||
Gain on disposals of ownership interests in business affiliates
|
—
|
|
|
25
|
|
|
46
|
|
|||
Income from a legal settlement
|
—
|
|
|
18
|
|
|
—
|
|
|||
Other
|
55
|
|
|
56
|
|
|
55
|
|
|||
Total
|
|
$114
|
|
|
|
$150
|
|
|
|
$127
|
|
(1)
|
Includes a
$26 million
gain on the sale of land near a facility of the Company’s former commodity chemicals business in 2018.
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Total stock-based compensation
|
|
$37
|
|
|
|
$35
|
|
|
|
$45
|
|
Income tax benefit recognized
|
|
$8
|
|
|
|
$12
|
|
|
|
$17
|
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Weighted average exercise price
|
|
$115.98
|
|
|
|
$101.53
|
|
|
|
$95.29
|
|
Risk free interest rate
|
2.9
|
%
|
|
2.4
|
%
|
|
1.6
|
%
|
|||
Expected life of option in years
|
6.5
|
|
|
6.5
|
|
|
6.5
|
|
|||
Expected dividend yield
|
1.7
|
%
|
|
1.8
|
%
|
|
2.1
|
%
|
|||
Expected volatility
|
21.0
|
%
|
|
22.0
|
%
|
|
22.8
|
%
|
Stock Options Outstanding and Exercisable
|
Number of Shares
|
|
|
Weighted Average Exercise Price
|
|
|
Weighted Average Remaining Contractual Life (in years)
|
|
Intrinsic Value (in millions)
|
|
||
Outstanding, January 1, 2018
|
3,575,625
|
|
|
|
$83.34
|
|
|
6.4
|
|
|
$120
|
|
Granted
|
533,105
|
|
|
|
$115.98
|
|
|
|
|
|
||
Exercised
|
(288,760
|
)
|
|
|
$50.82
|
|
|
|
|
|
||
Forfeited/Expired
|
(58,970
|
)
|
|
|
$106.32
|
|
|
|
|
|
||
Outstanding, December 31, 2018
|
3,761,000
|
|
|
|
$90.10
|
|
|
6.1
|
|
|
$61
|
|
Vested or expected to vest, December 31, 2018
|
3,724,235
|
|
|
|
$89.89
|
|
|
6.1
|
|
|
$61
|
|
Exercisable, December 31, 2018
|
1,924,079
|
|
|
|
$77.79
|
|
|
4.3
|
|
|
$56
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Total intrinsic value of stock options exercised
|
|
$19
|
|
|
|
$40
|
|
|
|
$34
|
|
Cash received from stock option exercises
|
|
$15
|
|
|
|
$52
|
|
|
|
$32
|
|
Income tax benefit from the exercise of stock options
|
|
$4
|
|
|
|
$15
|
|
|
|
$12
|
|
Total fair value of stock options vested
|
|
$10
|
|
|
|
$13
|
|
|
|
$16
|
|
RSU Activity
|
Number of Shares
|
|
|
Weighted Average Fair Value
|
|
|
Intrinsic Value (in millions)
|
|
||
Outstanding, January 1, 2018
|
615,607
|
|
|
|
$101.73
|
|
|
|
$63
|
|
Granted
|
252,885
|
|
|
|
$112.98
|
|
|
|
||
Released from restrictions
|
(194,329
|
)
|
|
|
$99.80
|
|
|
|
||
Forfeited
|
(42,432
|
)
|
|
|
$106.15
|
|
|
|
||
Outstanding, December 31, 2018
|
631,731
|
|
|
|
$102.80
|
|
|
|
$65
|
|
Vested or expected to vest, December 31, 2018
|
616,894
|
|
|
|
$102.67
|
|
|
|
$63
|
|
|
2018 Quarter Ended
|
Full Year 2018
(1)
|
|
||||||||||||
($ in millions, except per share amounts)
|
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||||
Net sales
|
|
$3,781
|
|
|
$4,131
|
|
|
$3,817
|
|
|
$3,645
|
|
|
$15,374
|
|
Cost of sales
(2)
|
2,181
|
|
2,379
|
|
2,253
|
|
2,188
|
|
9,001
|
|
|||||
Net income attributable to PPG
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$328
|
|
|
$371
|
|
|
$368
|
|
|
$256
|
|
|
$1,323
|
|
Discontinued operations
|
6
|
|
—
|
|
10
|
|
2
|
|
18
|
|
|||||
Net income
|
|
$334
|
|
|
$371
|
|
|
$378
|
|
|
$258
|
|
|
$1,341
|
|
Earnings per common share
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$1.32
|
|
|
$1.51
|
|
|
$1.52
|
|
|
$1.07
|
|
|
$5.43
|
|
Discontinued operations
|
0.02
|
|
—
|
|
0.04
|
|
0.01
|
|
0.07
|
|
|||||
Earnings per common share
|
|
$1.34
|
|
|
$1.51
|
|
|
$1.56
|
|
|
$1.08
|
|
|
$5.50
|
|
Earnings per common share - assuming dilution
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$1.31
|
|
|
$1.51
|
|
|
$1.51
|
|
|
$1.07
|
|
|
$5.40
|
|
Discontinued operations
|
0.02
|
|
—
|
|
0.04
|
|
0.01
|
|
0.07
|
|
|||||
Earnings per common share – assuming dilution
|
|
$1.33
|
|
|
$1.51
|
|
|
$1.55
|
|
|
$1.08
|
|
|
$5.47
|
|
|
|
|
|
|
|
||||||||||
|
2017 Quarter Ended
|
Full Year 2017
(1)
|
|
||||||||||||
($ in millions except per share amounts)
|
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||||
Net sales
|
|
$3,486
|
|
|
$3,804
|
|
|
$3,776
|
|
|
$3,682
|
|
|
$14,748
|
|
Cost of sales
(2)
|
1,902
|
|
2,083
|
|
2,104
|
|
2,120
|
|
8,209
|
|
|||||
Net income attributable to PPG
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$331
|
|
|
$497
|
|
|
$393
|
|
|
$148
|
|
|
$1,369
|
|
Discontinued operations
|
6
|
|
(1
|
)
|
217
|
|
3
|
|
225
|
|
|||||
Net income
|
|
$337
|
|
|
$496
|
|
|
$610
|
|
|
$151
|
|
|
$1,594
|
|
Earnings per common share
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$1.29
|
|
|
$1.93
|
|
|
$1.53
|
|
|
$0.59
|
|
|
$5.34
|
|
Discontinued operations
|
0.02
|
|
—
|
|
0.85
|
|
0.01
|
|
0.88
|
|
|||||
Earnings per common share
|
|
$1.31
|
|
|
$1.93
|
|
|
$2.38
|
|
|
$0.60
|
|
|
$6.22
|
|
Earnings per common share - assuming dilution
|
|
|
|
|
|
||||||||||
Continuing operations
|
|
$1.28
|
|
|
$1.92
|
|
|
$1.52
|
|
|
$0.58
|
|
|
$5.31
|
|
Discontinued operations
|
0.02
|
|
—
|
|
0.84
|
|
0.01
|
|
0.87
|
|
|||||
Earnings per common share – assuming dilution
|
|
$1.30
|
|
|
$1.92
|
|
|
$2.36
|
|
|
$0.59
|
|
|
$6.18
|
|
(1)
|
Full year earnings-per-share was calculated using the full year weighted average shares outstanding. As such, the sum of the quarters may not equal the total earnings-per-share for the year.
|
(2)
|
Exclusive of depreciation and amortization.
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Net sales to external customers
(1)
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$9,087
|
|
|
|
$8,730
|
|
|
|
$8,580
|
|
Industrial Coatings
|
6,287
|
|
|
6,018
|
|
|
5,690
|
|
|||
Total Net sales
|
|
$15,374
|
|
|
|
$14,748
|
|
|
|
$14,270
|
|
Segment income
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$1,300
|
|
|
|
$1,313
|
|
|
|
$1,322
|
|
Industrial Coatings
|
818
|
|
|
979
|
|
|
1,060
|
|
|||
Total Segment income
|
|
$2,118
|
|
|
|
$2,292
|
|
|
|
$2,382
|
|
Corporate / Non-Segment Items
(1)
|
|
|
|
|
|
||||||
Legacy items
(2)
|
|
$5
|
|
|
|
($2
|
)
|
|
|
($17
|
)
|
Environmental remediation charges and other costs
|
(77
|
)
|
|
—
|
|
|
(82
|
)
|
|||
Business restructuring, net
|
(66
|
)
|
|
—
|
|
|
(191
|
)
|
|||
Accelerated depreciation related to restructuring actions
|
(9
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of a non-manufacturing asset
|
(9
|
)
|
|
—
|
|
|
—
|
|
|||
Accounting investigation costs
|
(14
|
)
|
|
—
|
|
|
—
|
|
|||
Legacy legal settlements
|
(10
|
)
|
|
—
|
|
|
—
|
|
|||
Costs related to customer assortment change
|
(18
|
)
|
|
—
|
|
|
—
|
|
|||
Transaction-related costs
(3)
|
(6
|
)
|
|
(9
|
)
|
|
(8
|
)
|
|||
Gain from sale of a non-operating asset
|
26
|
|
|
13
|
|
|
—
|
|
|||
Brand rationalization charge
|
(6
|
)
|
|
—
|
|
|
—
|
|
|||
Gain from a legal settlement
|
—
|
|
|
18
|
|
|
—
|
|
|||
Asset write-downs
|
—
|
|
|
(7
|
)
|
|
(23
|
)
|
|||
Pension settlement charges
|
—
|
|
|
(60
|
)
|
|
(968
|
)
|
|||
Gains on disposals of ownership interests in business affiliates
|
—
|
|
|
25
|
|
|
46
|
|
|||
Interest expense, net of interest income
|
(95
|
)
|
|
(85
|
)
|
|
(99
|
)
|
|||
Corporate unallocated
(1)
|
(146
|
)
|
|
(180
|
)
|
|
(261
|
)
|
|||
Total Income before income taxes
|
|
$1,693
|
|
|
|
$2,005
|
|
|
|
$779
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Depreciation and amortization
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$274
|
|
|
|
$272
|
|
|
|
$272
|
|
Industrial Coatings
|
181
|
|
|
164
|
|
|
143
|
|
|||
Corporate / Non-Segment Items
(1)
|
42
|
|
|
24
|
|
|
25
|
|
|||
Total
|
|
$497
|
|
|
|
$460
|
|
|
|
$440
|
|
Share of net earnings of equity affiliates
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$1
|
|
|
|
$2
|
|
|
|
$5
|
|
Industrial Coatings
|
—
|
|
|
—
|
|
|
1
|
|
|||
Corporate / Non-Segment Items
(1)
|
15
|
|
|
10
|
|
|
2
|
|
|||
Total
|
|
$16
|
|
|
|
$12
|
|
|
|
$8
|
|
Segment assets
(4)
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$9,846
|
|
|
|
$9,763
|
|
|
|
$9,168
|
|
Industrial Coatings
|
4,441
|
|
|
4,563
|
|
|
3,972
|
|
|||
Corporate / Non-Segment Items
(1)
|
1,728
|
|
|
2,212
|
|
|
2,631
|
|
|||
Total
|
|
$16,015
|
|
|
|
$16,538
|
|
|
|
$15,771
|
|
Investment in equity affiliates
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$33
|
|
|
|
$32
|
|
|
|
$30
|
|
Industrial Coatings
|
13
|
|
|
13
|
|
|
13
|
|
|||
Corporate / Non-Segment Items
(1)
|
86
|
|
|
89
|
|
|
3
|
|
|||
Total
|
|
$132
|
|
|
|
$134
|
|
|
|
$46
|
|
Expenditures for property (including business acquisitions)
|
|
|
|
|
|
||||||
Performance Coatings
|
|
$545
|
|
|
|
$224
|
|
|
|
$187
|
|
Industrial Coatings
|
157
|
|
|
328
|
|
|
510
|
|
|||
Corporate / Non-Segment Items
(1)
|
87
|
|
|
133
|
|
|
32
|
|
|||
Total
|
|
$789
|
|
|
|
$685
|
|
|
|
$729
|
|
($ in millions)
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Geographic Information
|
|
|
|
|
|
||||||
Net sales
(5)
|
|
|
|
|
|
||||||
United States and Canada
|
|
$6,485
|
|
|
|
$6,307
|
|
|
|
$6,254
|
|
Europe, Middle East and Africa (“EMEA”)
|
4,678
|
|
|
4,389
|
|
|
4,164
|
|
|||
Asia Pacific
|
2,618
|
|
|
2,523
|
|
|
2,431
|
|
|||
Latin America
|
1,593
|
|
|
1,529
|
|
|
1,421
|
|
|||
Total
|
|
$15,374
|
|
|
|
$14,748
|
|
|
|
$14,270
|
|
Segment income
|
|
|
|
|
|
||||||
United States and Canada
|
|
$1,022
|
|
|
|
$1,135
|
|
|
|
$1,176
|
|
EMEA
|
549
|
|
|
560
|
|
|
235
|
|
|||
Asia Pacific
|
306
|
|
|
361
|
|
|
589
|
|
|||
Latin America
|
241
|
|
|
236
|
|
|
382
|
|
|||
Total
|
|
$2,118
|
|
|
|
$2,292
|
|
|
|
$2,382
|
|
Property—net
|
|
|
|
|
|
||||||
United States and Canada
|
|
$1,254
|
|
|
|
$1,224
|
|
|
|
$1,184
|
|
EMEA
|
777
|
|
|
826
|
|
|
726
|
|
|||
Asia Pacific
|
482
|
|
|
493
|
|
|
447
|
|
|||
Latin America
|
292
|
|
|
281
|
|
|
251
|
|
|||
Total
|
|
$2,805
|
|
|
|
$2,824
|
|
|
|
$2,608
|
|
(1)
|
Corporate intersegment net sales represent intersegment net sales eliminations. Corporate unallocated costs include the costs of corporate staff functions not directly associated with the operating segments, certain legal and insurance costs and stock-based compensation expense.
|
(2)
|
Legacy items include current costs related to former operations of the Company, including pension and other postretirement benefit costs, legal costs and certain charges which are considered to be non-recurring. Legacy items also include equity earnings from PPG’s investment in TCI. Refer to Note
3
, “
Acquisitions and Divestitures
”.
|
(3)
|
Transaction-related costs include advisory, legal, accounting, valuation, and other professional or consulting fees incurred to effect significant acquisitions, as well as similar fees and other costs to effect divestitures not classified as discontinued operations. These costs also include the flow-through cost of sales for the step up to fair value of inventory acquired in acquisitions.
|
(4)
|
Segment assets are the total assets used in the operation of each segment. Corporate assets are principally cash and cash equivalents, cash held in escrow, short term investments and deferred tax assets. Non-segment items also includes the assets of businesses which have been reclassified as discontinued operations in the consolidated statement of income. Refer to Note
3
, “
Acquisitions and Divestitures
”.
|
(5)
|
Net sales to external customers are attributed to geographic regions based upon the location of the operating unit shipping the product.
|
•
|
The Company terminated the employment of the former Vice President and Controller.
|
•
|
Two employees who acted under the direction of the former Vice President and Controller were re-assigned to different positions within the Company where they do not have a Financial Reporting Oversight Role or a role in the design or operation of internal control over financial reporting, disclosure controls or accounting policy.
|
•
|
The Company appointed its former Director of Corporate Audit Services and former Assistant Controller, Financial Reporting as Acting Controller and, on July 19, 2018 appointed him the Company’s permanent Vice President and Controller.
|
•
|
The Company’s Chairman and Chief Executive Officer has emphasized to all employees, and to the Company’s finance employees specifically, the importance of acting ethically and adhering to the Company’s Global Code of Ethics.
|
•
|
The Company re-emphasized (1) its commitment to ethical standards, (2) the requirements of the Company’s Code of Ethics, (3) reporting obligations and (4) non-retaliation policy for complaints;
|
•
|
The Company enhanced its corporate finance department by adding personnel with responsibility for areas identified in the investigation and enhanced segregation of duties in the finance department;
|
•
|
The Company enhanced policies and procedures relating to the preparation, approval and entry of journal entries;
|
•
|
The Company enhanced its process to evaluate and adjust certain significant expense accruals;
|
•
|
The Company enhanced its policies and procedures relating to inventory standard cost revaluations;
|
•
|
The Company enhanced its policies and procedures concerning accounting entries related to discontinued operations;
|
•
|
The Company now requires additional annual/onboarding education for finance staff;
|
•
|
The Company will conduct additional periodic risk assessments and targeted internal audit reviews; and
|
•
|
The Company separated the financial forecasting process from financial accounting.
|
|
Page
|
($ in millions)
|
Balance at Beginning of Year
|
|
Charged to Costs and Expenses
|
|
Deductions(1)
|
|
Balance at End of Year
|
|
||||
2018
|
|
$25
|
|
|
$18
|
|
|
($19
|
)
|
|
$24
|
|
2017
|
|
$36
|
|
|
$15
|
|
|
($26
|
)
|
|
$25
|
|
2016
|
|
$43
|
|
|
$22
|
|
|
($29
|
)
|
|
$36
|
|
(1)
|
Notes and accounts receivable written off as uncollectible, net of recoveries, amounts attributable to divestitures and changes attributable to foreign currency translation.
|
|
3
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
4
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.5
|
|
|
4.6
|
|
|
4.7
|
|
|
4.8
|
|
|
4.9
|
|
|
4.10
|
|
|
4.11
|
|
*
|
10
|
|
*
|
10.1
|
|
*
|
10.2
|
|
*
|
10.3
|
|
*
|
10.4
|
|
*
|
10.5
|
|
*
|
10.6
|
*
|
10.7
|
|
*
|
10.8
|
|
*
|
10.9
|
|
*
|
10.10
|
|
*
|
10.11
|
|
*
|
10.12
|
|
*
|
10.13
|
|
*
|
10.14
|
|
*
|
10.15
|
|
*
|
10.16
|
|
*
|
10.17
|
|
*
|
10.18
|
|
*
|
10.19
|
|
*
|
10.20
|
|
*
|
10.21
|
|
*
|
10.22
|
|
*
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
*
|
10.26
|
|
*
|
10.27
|
|
*
|
10.28
|
†*
|
10.29
|
|
†*
|
10.30
|
|
†
|
13.1
|
|
†
|
13.2
|
|
†
|
21
|
|
†
|
23
|
|
†
|
24
|
|
†
|
31.1
|
|
†
|
31.2
|
|
††
|
32.1
|
|
††
|
32.2
|
|
**
|
101.INS
|
XBRL Instance Document
|
**
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
**
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
**
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
**
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
**
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
†
|
|
Filed herewith.
|
††
|
|
Furnished herewith.
|
*
|
|
Management contracts, compensatory plans or arrangements required to be filed as an exhibit hereto pursuant to Item 601 of Regulation S-K.
|
**
|
|
Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language) as of and for the year ended December 31, 2018: (i) the Consolidated Statement of Income, (ii) the Consolidated Balance Sheet, (iii) the Consolidated Statement of Shareholders’ Equity, (iv) the Consolidated Statement of Comprehensive Income (Loss), (v) the Consolidated Statement of Cash Flows, (vi) Notes to Consolidated Financial Statements and (vii) Financial Schedule of Valuation and Qualifying Accounts.
|
|
|
PPG INDUSTRIES, INC.
(Registrant)
|
|
|
|
|
|
|
|
By
|
/s/ Vincent J. Morales
|
|
|
|
Vincent J. Morales
|
|
|
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)
|
|
|
|
|
|
|
|
/s/ William E. Schaupp
|
|
|
|
William E. Schaupp
|
|
|
|
Vice President and Controller (Principal Accounting Officer and Duly Authorized Officer)
|
Signature
|
|
Capacity
|
|
|
||
|
|
|
|
|
|
|
/s/ Michael H. McGarry
|
|
Director, Chairman and Chief Executive Officer
|
|
|
||
Michael H. McGarry
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Vincent J. Morales
|
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)
|
|
|
||
Vincent J. Morales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ William E. Schaupp
|
|
Vice President and Controller (Principal Accounting Officer and Duly Authorized Officer)
|
|
|
||
William E. Schaupp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S. F. Angel
|
|
Director
|
|
|
|
|
J. G. Berges
|
|
Director
|
|
|
|
|
J. V. Faraci
|
|
Director
|
|
|
|
|
H. Grant
|
|
Director
|
|
|
|
|
V. F. Haynes
|
|
Director
|
|
|
By
|
/s/ Vincent J. Morales
|
M. L. Healey
|
|
Director
|
|
|
|
Vincent J. Morales, Attorney-in-Fact
|
G. R. Heminger
|
|
Director
|
|
|
|
|
M. J. Hooper
|
|
Director
|
|
|
|
|
M. W. Lamach
|
|
Director
|
|
|
|
|
M. H. Richenhagen
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.1
|
Administrator
means an officer or officers of the Company appointed by the Committee, and any persons designated by such Administrator to assist in the administration of the Plan.
|
1.2
|
Award
means a grant of incentive compensation under the Plan.
|
1.3
|
Board
means the Board of Directors of PPG Industries, Inc.
|
1.4
|
Change in Control
means, and shall be deemed to have occurred upon the occurrence of, any one of the following events:
|
(a)
|
The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d‑3 promulgated under the Exchange Act) of 20% or more of either (1) the then issued and outstanding shares of the Company’s voting common stock (“Outstanding Common Stock”) or (2) the combined voting power of all outstanding voting securities of the Company entitled to vote generally in the election of directors to the Board (“Outstanding Voting Securities”); provided that, for purposes of this Section 1.4(a), a Change of Control shall not include (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (4) any acquisition by any corporation pursuant to a transaction that complies with Sections 1.4(c)(1), 1.4(c)(2) and 1.4(c)(3).
|
(b)
|
Individuals who, as of April 20, 2006 (the “Reference Date”), constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Incumbent Board; provided, however, that any individual becoming a director subsequent to the Reference Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such
|
(c)
|
Approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination:
|
(1)
|
All or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be;
|
(2)
|
No Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination; and
|
(3)
|
At least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or at the time of the action taken by the Incumbent Board approving such Business Combination.
|
(d)
|
Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
|
(e)
|
A majority of the Incumbent Board otherwise determines that a Change in Control has occurred.
|
1.5
|
Code
means the Internal Revenue Code of 1986, as amended.
|
1.6
|
Committee
means the Compensation and Employee Benefits Committee of the Company (or any successor thereto).
|
1.7
|
Company
means PPG Industries, Inc.
|
1.8
|
Corporation
means the Company and any Subsidiary designated by the Committee as eligible to participate in the Plan, and which, by proper authorization of the Board or other governing body of such Subsidiary, elects to participate in the Plan.
|
1.9
|
Disability
means any disability for which a Participant is approved to receive Long‑Term Disability benefits pursuant to the PPG Industries, Inc. Long‑Term Disability Plan or other long‑term disability plan sponsored by the Corporation.
|
1.10
|
Employee
means any full‑time or permanent part‑time employee (including any officer) of the Corporation.
|
1.11
|
Participant
means an Employee who is approved by the Committee to participate in the Plan. Participants shall be limited to key Employees of the Corporation who contribute the most to the growth and profitability of the Company as determined by the Committee from time to time.
|
1.12
|
Plan Year
means each calendar year.
|
1.13
|
Subsidiary
means any corporation of which 50% or more of the outstanding voting stock or voting power is owned, directly or indirectly, by the Company and any partnership or other entity in which the Company has a 50% or more ownership interest.
|
2.1
|
Eligibility
|
(a)
|
A Participant whose employment is terminated prior to July 1 by reason of retirement, job elimination, Disability or death shall not be entitled to any Award for such Plan Year.
|
(b)
|
A Participant whose employment is terminated on or after July 1 by reason of retirement, job elimination, Disability or death may be entitled to a prorated Award for such Plan Year as determined by the Committee in its sole and absolute discretion.
|
(c)
|
A Participant who is transferred to a position that is not covered by the Plan may be entitled to a prorated Award based on the transfer date for such Plan Year.
|
(d)
|
A Participant whose employment is terminated during the Plan Year for reasons other than retirement, job elimination, Disability or death shall not be eligible to receive an Award for such Plan Year regardless of the date of such termination during such Plan Year.
|
(e)
|
If the employment of a Participant terminates after the last day of a Plan Year and before the date on which payment of the Award for such Plan Year is to be made for reasons other than retirement, job elimination, Disability or death, no Award shall be paid to such Participant for such Plan Year and, in such event, such Participant shall have no right to any payment with respect to such Award.
|
2.2
|
Awards
|
(a)
|
The Committee shall determine or approve (1) the Participants, (2) the total amount of all Awards to all Participants for each Plan Year, (3) the amount of the Award to each Participant and (4) the methodology for determining Award amounts.
|
(b)
|
The Committee may delegate to another person the authority to determine (1) the Participants and (2) the amount of Awards to each Participant.
|
(c)
|
The Committee is under no obligation to make Awards to any particular individual or class of individuals, and the grant of an Award to a Participant in any given Plan Year shall not entitle such Participant to a grant in any other Plan Year or to continued employment by the Corporation.
|
2.3
|
Payment of Awards
|
3.1
|
Nonassignability
|
3.2
|
Limited Right to Assets of the Corporation
|
3.3
|
Protective Provisions
|
3.4
|
Withholding
|
3.5
|
Forfeiture Provision
|
4.1
|
Administration
|
(a)
|
The Committee, for purposes of administering the Plan, shall meet and act as necessary to determine or approve for each Plan Year, the total amount of Awards to all Participants and the amount of Awards to Participants as the Committee deems appropriate.
|
(b)
|
Except as otherwise provided in the Plan, the Administrator shall administer the Plan and interpret, construe and apply its provisions in accordance with its terms and shall have the complete authority to (1) determine eligibility for benefits, (2) construe the terms of the Plan and (3) control and manage the operation of the Plan.
|
(c)
|
Except as otherwise provided in the Plan, the Administrator shall have the authority to establish rules for the administration and interpretation of the Plan and the transaction of its business. The determination of the Administrator as to any disputed question, including questions of fact, shall be conclusive.
|
(d)
|
The Administrator may employ counsel and other agents and may procure such clerical, accounting and other services as the Administrator may require in carrying out the provisions of the Plan.
|
(e)
|
The Administrator shall not receive any compensation from the Plan for his/her services.
|
(f)
|
The Corporation shall indemnify and save harmless the Administrator against all expenses and liabilities arising out of the Administrator’s service as such, excepting only expenses and liabilities arising from the Administrator’s own gross negligence or willful misconduct, as determined by the Committee.
|
4.2
|
Claims
|
(a)
|
Every person receiving or claiming benefits under the Plan shall be conclusively presumed to be mentally and physically competent and of age. If the Administrator determines that such person is mentally or physically incompetent or is a minor, payment shall be made to the legally appointed guardian, conservator or other person who has been appointed by a court of competent jurisdiction to care for the estate of such person, provided that proper proof of such appointment is furnished in a form and manner suitable to the Administrator. Any payment made in accordance with this Section 4.2(a) shall be a complete discharge of any liability therefore under the Plan. The Administrator shall not be required to see to the proper application of any such payment.
|
(b)
|
A Participant may not bring a claim for benefits in a court of law unless and until such Participant has made a claim for benefits with the Administrator, in accordance with procedures as the Administrator shall determine from time to time and, if such claim is denied, filed a request for a review of such denial with the Administrator, and such review is denied. The Participant or his authorized representative shall be afforded a reasonable opportunity for full and fair review by the Administrator of the decision denying his or her claim for benefits.
|
6.1
|
Successors of the Company
|
6.2
|
Trust
|
6.3
|
Employment Not Guaranteed
|
6.4
|
Gender, Singular and Plural
|
6.5
|
Headings
|
6.6
|
Validity
|
6.7
|
Waiver of Breach
|
6.8
|
Applicable Law
|
6.9
|
Notice
|
6.10
|
Interpretation
|
6.11
|
Change in Control
|
(a)
|
Upon, or in reasonable anticipation of, a Change in Control:
|
(1)
|
Awards shall be made for the Plan Year during which the Change in Control occurs and then paid immediately to a trustee on such terms as the senior human resources officer of the Corporation and the senior finance officer of the Corporation, or either of them, or their successors, shall deem appropriate (including such terms as are appropriate to cause such payment, if possible, not to be a taxable event to Participants) in order to cause the Awards so paid to be paid not later than March 15 following the end of the Plan Year to which the Awards relate.
|
(2)
|
If the Change in Control occurs during the first six months of the Plan Year, the amount of the Award payable to each Participant shall be one‑half of the greater of (1) the target Award for such Plan Year or (2) the actual Award payable for such Plan Year, based on the methodology established by the Committee with respect to such Award. If the Change in Control occurs during the second six months of the Plan Year, the amount of the Award payable to each Participant shall be the greater of (1) the target Award for such Plan Year or (2) the actual Award payable for such Plan Year, based on the methodology established by the Committee with respect to such Award.
|
(b)
|
Notwithstanding any other provision of this Section 6.11, if an Award actually payable for such Plan Year (based on the methodology established by the Committee with respect to such Award) is greater than the Award made pursuant to this Section 6.11, the Participant shall be entitled to the greater of the two amounts.
|
1.1
|
Administrator
means an officer or officers of the Company appointed by the Committee, and any person designated by such Administrator to assist in the administration of the Plan.
|
1.2
|
Award
means a grant of incentive compensation under the Plan.
|
1.3
|
Board
means the Board of Directors of the Company.
|
1.4
|
Change in Control
means, and shall be deemed to have occurred upon the occurrence of, any one of the following events:
|
(a)
|
The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d‑3 promulgated under the Exchange Act) of 20% or more of either (1) the then issued and outstanding shares of the Company’s voting common stock (“Outstanding Common Stock”) or (2) the combined voting power of all outstanding voting securities of the Company entitled to vote generally in the election of directors to the Board (“Outstanding Voting Securities”); provided that, for purposes of this Section 1.4(a), a Change in Control shall not include (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (4) any acquisition by any corporation pursuant to a transaction that complies with Sections 1.4(c)(1), 1.4(c)(2) or 1.4(c)(3).
|
(b)
|
Individuals who, as of April 20, 2006 (the “Reference Date”), constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Incumbent Board; provided, however, that any individual becoming a director subsequent to the Reference Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.
|
(c)
|
Approval by the shareholders of the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination:
|
(1)
|
All or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be;
|
(2)
|
No Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination; and
|
(3)
|
At least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or at the time of the action taken by the Incumbent Board approving such Business Combination.
|
(d)
|
Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
|
(e)
|
A majority of the Incumbent Board otherwise determines that a Change in Control has occurred.
|
1.5
|
Code
means the Internal Revenue Code of 1986, as amended.
|
1.6
|
Committee
means the Compensation and Employee Benefits Committee of the Company (or any successor thereto).
|
1.7
|
Company
means PPG Industries, Inc.
|
1.8
|
Corporation
means PPG and any Subsidiary designated by the Committee as eligible to participate in the Plan, and which, by proper authorization of the board of directors or other governing body of such Subsidiary, elects to participate in the Plan.
|
1.9
|
Disability
means any disability for which a Participant is approved to receive Long‑Term Disability benefits pursuant to the PPG Industries, Inc. Long‑Term Disability Plan or other long‑term disability plan sponsored by the Corporation.
|
1.10
|
Employee
means any full‑time or permanent part‑time employee (including any officer) of the Corporation.
|
1.11
|
Participant
means an Employee who is approved by the Committee to participate in the Plan. Participants shall be limited to a select group of management or highly compensated employees as determined by the Committee from time to time that are nominated to participate in the Plan by their respective supervisors based on significant contributions to unit, group or department goals and that are not participants in the PPG Industries, Inc. Incentive Compensation Plan for Key Employees (as amended from time to time or any successor thereto).
|
1.12
|
Plan Year
means each calendar year.
|
1.13
|
Subsidiary
means any corporation of which 50% or more of the outstanding voting stock or voting power is owned, directly or indirectly, by the Company and any partnership or other entity in which the Company has a 50% or more ownership interest.
|
2.1.
|
Eligibility
|
(a)
|
A Participant whose employment is terminated prior to July 1 by reason of retirement, job elimination, Disability or death shall not be entitled to any Award for such Plan Year.
|
(b)
|
A Participant whose employment is terminated on or after July 1 by reason of retirement, job elimination, Disability or death may be entitled to a prorated Award for such Plan Year as determined by the Committee in its sole and absolute discretion.
|
(c)
|
A Participant who is transferred to a position that is not covered by the Plan may be entitled to a prorated Award based on the transfer date for such Plan Year.
|
(d)
|
A Participant whose employment is terminated during the Plan Year for reasons other than retirement, job elimination, Disability or death shall not be eligible to receive an Award for such Plan Year regardless of the date of such termination during such Plan Year.
|
(e)
|
If the employment of a Participant terminates after the last day of a Plan Year and before the date on which payment of the Award for such Plan Year is to be made
|
2.2.
|
Awards
|
(a)
|
The Committee shall determine or approve (1) the Participants, (2) the total amount of all Awards to all Participants for each Plan Year, (3) the amount of the Award to each Participant and (4) the methodology for determining Award amounts.
|
(b)
|
The Committee may delegate to another person the authority to determine (1) the Participants and (2) the amount of Awards to each Participant.
|
(c)
|
The Committee is under no obligation to make Awards to any particular individual or class of individuals, and the grant of an Award to a Participant in any given Plan Year shall not entitle such Participant to a grant in any other Plan Year or to continued employment by the Corporation.
|
2.3.
|
Payment of Awards
|
3.1.
|
Nonassignability
|
3.2.
|
Limited Right to Assets of the Corporation
|
3.3.
|
Protective Provisions
|
3.4.
|
Withholding
|
3.5.
|
Forfeiture Provision
|
4.1.
|
Administration
|
(a)
|
The Committee, for purposes of administering the Plan, shall meet and act as necessary to determine or approve for each Plan Year, the total amount of Awards to all Participants and the amount of Awards to Participants as the Committee deems appropriate.
|
(b)
|
Except as otherwise provided in the Plan, the Administrator shall administer the Plan and interpret, construe and apply its provisions in accordance with its terms and shall have the complete authority to (1) determine eligibility for benefits, (2) construe the terms of the Plan and (3) control and manage the operation of the Plan.
|
(c)
|
Except as otherwise provided in the Plan, the Administrator shall have the authority to establish rules for the administration and interpretation of the Plan and the transaction of its business. The determination of the Administrator as to any disputed question, including questions of fact, shall be conclusive.
|
(d)
|
The Administrator may employ counsel and other agents and may procure such clerical, accounting and other services as the Administrator may require in carrying out the provisions of the Plan.
|
(e)
|
The Administrator shall not receive any compensation from the Plan for his/her services.
|
(f)
|
The Corporation shall indemnify and save harmless the Administrator against all expenses and liabilities arising out of the Administrator’s service as such, excepting only expenses and liabilities arising from the Administrator’s own gross negligence or willful misconduct, as determined by the Committee.
|
4.2.
|
Claims
|
(a)
|
Every person receiving or claiming benefits under the Plan shall be conclusively presumed to be mentally and physically competent and of age. If the Administrator determines that such person is mentally or physically incompetent or is a minor, payment shall be made to the legally appointed guardian, conservator or other person who has been appointed by a court of competent jurisdiction to care for the estate of such person, provided that proper proof of such appointment is furnished in a form and manner suitable to the Administrator. Any payment made under this Section 4.2(a) shall be a complete discharge of any liability therefore under the Plan. The Administrator shall not be required to see to the proper application of any such payment.
|
(b)
|
A Participant may not bring a claim for benefits in a court of law unless and until such Participant has made a claim for benefits with the Administrator, in accordance with procedures as the Administrator shall determine from time to time and, if such claim is denied, filed a request for a review of such denial with the Administrator, and such review is denied. The Participant or his authorized representative shall be afforded a reasonable opportunity for full and fair review by the Administrator of the decision denying his or her claim for benefits.
|
6.1.
|
Successors of the Company
|
6.2.
|
Trust
|
6.3.
|
Employment Not Guaranteed
|
6.4.
|
Gender, Singular and Plural
|
6.5.
|
Headings
|
6.6.
|
Validity
|
6.7.
|
Waiver of Breach
|
6.8.
|
Applicable Law
|
6.9.
|
Notice
|
6.10.
|
Interpretation
|
6.11.
|
Change in Control
|
(a)
|
Upon, or in reasonable anticipation of, a Change in Control:
|
(1)
|
Awards shall be made for the Plan Year during which the Change in Control occurs and then paid immediately to a trustee on such terms as the senior human resources officer of the Corporation and the senior finance officer of the Corporation, or either of them, or their successors, shall deem appropriate (including such terms as are appropriate to cause such payment, if possible, not to be a taxable event to Participants) to cause the Awards so paid to be paid not later than March 15 following the end of the Plan Year to which the Awards relate.
|
(2)
|
If the Change in Control occurs during the first six months of the Plan Year, the amount of the Award payable to each Participant shall be one‑half of the greater of (1) the target Award for such Plan Year or (2) the actual Award payable for such Plan Year, based upon the methodology established by the Committee with respect to such Award. If the Change in Control occurs during the second six months of the Plan Year, the amount of the Award payable to each Participant shall be the greater of (1) the target Award for such Plan Year or (2) the actual Award payable for such Plan Year, based upon the methodology established by the Committee with respect to such Award.
|
(b)
|
Notwithstanding any other provision of this Section 6.11, if an Award actually payable for such Plan Year (based on the methodology established by the Committee with respect to such Award) is greater than the Award made pursuant to this Section 6.11, the Participant shall be entitled to the greater of the two amounts.
|
|
2018
|
|
2017
|
||||||||||||
Quarter Ended
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
March 31
|
|
$122.07
|
|
|
|
$108.74
|
|
|
|
$113.49
|
|
|
|
$94.57
|
|
June 30
|
113.90
|
|
|
100.36
|
|
|
113.00
|
|
|
104.18
|
|
||||
September 30
|
116.73
|
|
|
101.17
|
|
|
113.67
|
|
|
100.45
|
|
||||
December 31
|
111.42
|
|
|
94.37
|
|
|
119.85
|
|
|
108.43
|
|
|
2018
|
|
2017
|
||||||||||||
Month of Payment
|
Amount (Millions)
|
|
Per Share
|
|
Amount (Millions)
|
|
Per Share
|
||||||||
March
|
|
$112
|
|
|
|
$0.45
|
|
|
|
$103
|
|
|
|
$0.40
|
|
June
|
110
|
|
|
0.45
|
|
|
102
|
|
|
0.40
|
|
||||
September
|
116
|
|
|
0.48
|
|
|
116
|
|
|
0.45
|
|
||||
December
|
115
|
|
|
0.48
|
|
|
113
|
|
|
0.45
|
|
||||
Total
|
|
$453
|
|
|
|
$1.86
|
|
|
|
$434
|
|
|
|
$1.70
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Net Sales
|
|
$15,374
|
|
|
|
$14,748
|
|
|
|
$14,270
|
|
|
|
$14,241
|
|
|
|
$14,250
|
|
Amounts Attributable to PPG
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing Operations
|
|
$1,323
|
|
|
|
$1,369
|
|
|
|
$543
|
|
|
|
$1,311
|
|
|
|
$1,067
|
|
Discontinued Operations
|
18
|
|
|
225
|
|
|
330
|
|
|
95
|
|
|
1,035
|
|
|||||
Net income (attributable to PPG)
|
|
$1,341
|
|
|
|
$1,594
|
|
|
|
$873
|
|
|
|
$1,406
|
|
|
|
$2,102
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing Operations
|
|
$5.43
|
|
|
|
$5.34
|
|
|
|
$2.05
|
|
|
|
$4.83
|
|
|
|
$3.86
|
|
Discontinued Operations
|
0.07
|
|
|
0.88
|
|
|
1.24
|
|
|
0.35
|
|
|
3.74
|
|
|||||
Net Income
|
|
$5.50
|
|
|
|
$6.22
|
|
|
|
$3.29
|
|
|
|
$5.18
|
|
|
|
$7.60
|
|
Earnings per common share - assuming dilution:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing Operations
|
|
$5.40
|
|
|
|
$5.31
|
|
|
|
$2.04
|
|
|
|
$4.79
|
|
|
|
$3.82
|
|
Discontinued Operations
|
0.07
|
|
|
0.87
|
|
|
1.23
|
|
|
0.35
|
|
|
3.70
|
|
|||||
Net Income
|
|
$5.47
|
|
|
|
$6.18
|
|
|
|
$3.27
|
|
|
|
$5.14
|
|
|
|
$7.52
|
|
Dividends per share
|
1.86
|
|
|
1.70
|
|
|
1.56
|
|
|
1.41
|
|
|
1.31
|
|
|||||
Total assets
|
16,015
|
|
|
16,538
|
|
|
15,771
|
|
|
17,076
|
|
|
17,535
|
|
|||||
Long-term debt
|
4,365
|
|
|
4,134
|
|
|
3,787
|
|
|
4,026
|
|
|
3,516
|
|
United States and Canada:
|
Jurisdiction of Incorporation or Organization
|
|
Percentage of Voting Power
|
|
|
CG Holdings Manufacturing Co.
|
Michigan
|
|
100
|
|
Cuming Microwave Corporation
|
Massachusetts
|
|
100
|
|
Electra-Finish, Inc.
|
North Carolina
|
|
100
|
|
I.V.C. Industrial Coatings, Inc.
|
Indiana
|
|
100
|
|
MetoKote Corporation
|
Delaware
|
|
100
|
|
MetoKote Mexico Holdings, Inc.
|
Ohio
|
|
100
|
|
PaintZen, Inc.
|
Delaware
|
|
100
|
|
PPG Architectural Finishes, Inc.
|
Delaware
|
|
100
|
|
PPG Holdings Argentina USA LLC
|
Delaware
|
|
100
|
|
PPG Holdings Latin America USA LLC
|
Delaware
|
|
100
|
|
PPG Industries International, Inc.
|
Delaware
|
|
100
|
|
PPG Industries Ohio, Inc.
|
Delaware
|
|
100
|
|
PPG Industries Securities, LLC
|
Delaware
|
|
100
|
|
PPG Kansai Automotive Finishes U.S., LLC
|
Delaware
|
|
60
|
|
SEM Products, Inc.
|
North Carolina
|
|
100
|
|
PRC-DeSoto International, Inc.
|
California
|
|
100
|
|
Sierracin Corporation
|
Delaware
|
|
100
|
|
Sierracin/Sylmar Corporation
|
California
|
|
100
|
|
The Crown Group Co.
|
Michigan
|
|
100
|
|
The Glidden Supply Company LLC
|
Delaware
|
|
100
|
|
Vanex, Inc.
|
Delaware
|
|
100
|
|
|
|
|
|
Latin America:
|
|
|
|
|
|
Alermac Inversiones, S.A. de C.V.
|
Mexico
|
|
100
|
|
Centro de Investigación en Polímeros, S.A. de C.V.
|
Mexico
|
|
100
|
|
Comercial Mexicana de Pinturas, S.A. de C.V.
|
Mexico
|
|
100
|
|
Comex Industrial Coatings, S.A. de C.V.
|
Mexico
|
|
100
|
|
Consorcio Comex, S.A. de C.V.
|
Mexico
|
|
100
|
|
Consorcio Latinoamericano, S.A.
|
Mexico
|
|
100
|
|
Distribuidora Kroma, S.A. de C.V.
|
Mexico
|
|
100
|
|
Empresa AGA, S.A. de C.V.
|
Mexico
|
|
100
|
|
Fábrica de Pinturas Universales, S.A. de C.V.
|
Mexico
|
|
100
|
|
Grupo Comex, S.A. de C.V.
|
Mexico
|
|
100
|
|
MetoKote Canada Limited
|
Canada
|
|
100
|
|
MetoKote de Mexico S. de RL de CV
|
Mexico
|
|
100
|
|
Pinturerias del Istmo, S.A.
|
Panama
|
|
100
|
|
Plásticos Envolventes, S.A. de C.V.
|
Mexico
|
|
100
|
|
PPG ALESCO Automotive Finishes Mexico, S. de R.L. de C.V.
|
Mexico
|
|
60
|
|
PPG AP Resinas, S.A. de C.V.
|
Mexico
|
|
100
|
|
PPG Architectural Coatings (Puerto Rico) Inc.
|
Puerto Rico
|
|
100
|
|
PPG Architectural Coatings Canada Inc.
|
Canada
|
|
100
|
|
PPG Canada Inc.
|
Canada
|
|
100
|
|
PPG Industrial do Brasil - Tintas E. Vernizes - Ltda.
|
Brazil
|
|
100
|
|
PPG Industries Argentina S.R.L.
|
Argentina
|
|
100
|
|
PPG Industries Chile S.A.
|
Chile
|
|
100
|
|
PPG Industries Colombia Ltda.
|
Colombia
|
|
100
|
|
PPG Industries de Mexico, S.A. de C.V.
|
Mexico
|
|
100
|
|
PPG Kansai Automotive Finishes Canada, LP
|
Canada
|
|
60
|
|
PPG Mexico, S.A. de C.V.
|
Mexico
|
|
100
|
|
Viasa, S.A. de C.V.
|
Mexico
|
|
100
|
|
|
|
|
|
EMEA:
|
|
|
|
|
|
Brown Brothers Distribution Limited
|
United Kingdom
|
|
100
|
|
Dyrup SAS
|
France
|
|
100
|
|
EPIC Insurance Co. Ltd.
|
Bermuda
|
|
100
|
|
Erlenbrunnen Grundstücksverwaltung GmbH
|
Germany
|
|
100
|
|
Hodij Coatings B.V.
|
The Netherlands
|
|
100
|
|
Johnstone’s Paints Limited
|
United Kingdom
|
|
100
|
|
Kalon Investment Company Limited
|
United Kingdom
|
|
100
|
|
Kalon South Africa Proprietary Limited
|
South Africa
|
|
100
|
|
Malcolm Enamellers ACP Limited
|
United Kingdom
|
|
100
|
|
MetoKote Deutschland GmbH
|
Germany
|
|
100
|
|
MetoKote UK Limited
|
United Kingdom
|
|
100
|
|
Peintures de Paris SAS
|
France
|
|
99.94
|
|
PPG AC - France SA
|
France
|
|
99.94
|
|
PPG Architectural Coatings Ireland Limited
|
Ireland
|
|
100
|
|
PPG Architectural Coatings UK Limited
|
United Kingdom
|
|
100
|
|
PPG Cameroun SA
|
Cameroon
|
|
51.5
|
|
PPG CEE Premazi (d.o.o.)
|
Slovenia
|
|
100
|
|
PPG Cieszyn S.A.
|
Poland
|
|
100
|
|
PPG Coatings B.V.
|
The Netherlands
|
|
100
|
|
PPG Coatings BVBA/SPRL
|
Belgium
|
|
100
|
|
PPG Coatings Danmark A/S
|
Denmark
|
|
100
|
|
PPG Coatings Deutschland GmbH
|
Germany
|
|
100
|
|
PPG Coatings Europe B.V.
|
The Netherlands
|
|
100
|
|
PPG Coatings Manufacturing SARL
|
France
|
|
100
|
|
PPG Coatings Nederland BV
|
The Netherlands
|
|
100
|
|
PPG Coatings S.A.
|
France
|
|
99.9
|
|
PPG Coatings South Africa (Pty) Ltd.
|
South Africa
|
|
100
|
|
PPG Deco Czech a.s.
|
Czech Republic
|
|
100
|
|
PPG Deco Polska sp. z.o.o.
|
Poland
|
|
100
|
|
PPG Deco Slovakia, s.r.o.
|
Slovakia
|
|
100
|
|
PPG Deutschland Business Support GmbH
|
Germany
|
|
100
|
|
PPG Deutschland Sales & Services GmbH
|
Germany
|
|
100
|
|
PPG Distribution S.A.S.
|
France
|
|
99.94
|
|
PPG DYRUP, S.A.
|
Portugal
|
|
100
|
|
PPG Europe B.V.
|
The Netherlands
|
|
100
|
|
PPG Finance B.V.
|
The Netherlands
|
|
100
|
|
PPG France Business Support S.A.S.
|
France
|
|
100
|
|
PPG France Manufacturing S.A.S.
|
France
|
|
100
|
|
PPG Guadeloupe SAS
|
Guadeloupe
|
|
100
|
|
PPG Holdco SAS
|
France
|
|
100
|
|
PPG Holdings (U.K.) Limited
|
United Kingdom
|
|
100
|
|
PPG Ibérica, S.A.
|
Spain
|
|
100
|
|
PPG Ibérica Sales & Services, S.L.
|
Spain
|
|
100
|
|
PPG Industrial Coatings B.V.
|
The Netherlands
|
|
100
|
|
PPG Industries (UK) Ltd
|
United Kingdom
|
|
100
|
|
PPG Industries Delfzijl B.V.
|
The Netherlands
|
|
100
|
|
PPG Industries Europe Sàrl
|
Switzerland
|
|
100
|
|
PPG Industries France S.A.S.
|
France
|
|
100
|
|
PPG Industries Italia S.r.l.
|
Italy
|
|
100
|
|
PPG Industries Kimya a Sanayi VE Ticaret AS
|
Turkey
|
|
100
|
|
PPG Industries Lackfabrik GmbH
|
Germany
|
|
100
|
|
PPG Industries Lipetsk LLC
|
Russia
|
|
100
|
|
PPG Industries LLC
|
Russia
|
|
100
|
|
PPG Industries Middle East FZE
|
U.A.E
|
|
100
|
|
PPG Industries Netherlands B.V.
|
The Netherlands
|
|
100
|
|
PPG Industries Poland Sp. Z.o.o.
|
Poland
|
|
100
|
|
PPG Italia Business Support S.r.l.
|
Italy
|
|
100
|
|
PPG Italia Sales & Services S.r.l.
|
Italy
|
|
100
|
|
PPG Kansai Automotive Finishes U.K. LLP
|
United Kingdom
|
|
60
|
|
PPG Luxembourg Finance S.àR.L.
|
Luxembourg
|
|
100
|
|
PPG Luxembourg Holdings S.àR.L.
|
Luxembourg
|
|
100
|
|
PPG Réunion SAS
|
La Reunion
|
|
51
|
|
PPG Romania S.A.
|
Romania
|
|
100
|
|
PPG Service Sud S.r.l.
|
Italy
|
|
100
|
|
PPG Switzerland GmbH
|
Switzerland
|
|
100
|
|
PPG Trilak Kft.
|
Hungary
|
|
100
|
|
PPG Univer S.P.A.
|
Italy
|
|
100
|
|
ProCoatings B.V.
|
The Netherlands
|
|
100
|
|
ProCoatings Holding B.V.
|
The Netherlands
|
|
100
|
|
Prominent Paints Proprietary Limited
|
South Africa
|
|
100
|
|
Revocoat France SAS
|
France
|
|
100
|
|
Revocoat Holding SAS
|
France
|
|
100
|
|
Revocoat Iberica SLU
|
Spain
|
|
100
|
|
Schoch Holding AG
|
Switzerland
|
|
100
|
|
Sealants Europe SAS
|
France
|
|
66
|
|
Sigma Marine & Protective Coatings Holding B.V.
|
The Netherlands
|
|
100
|
|
SigmaKalon (BC) UK Limited
|
United Kingdom
|
|
100
|
|
SigmaKalon Middle East B.V.
|
The Netherlands
|
|
63.2
|
|
SigmaKalon UK Holding Limited
|
United Kingdom
|
|
100
|
|
Société des Anciens Etablissements Peppler
|
France
|
|
99.94
|
|
|
|
|
|
Asia:
|
|
|
|
|
|
Foshan Bairun Chemicals Co., Ltd.
|
China
|
|
100
|
|
IVC Nan Sha Ltd.
|
China
|
|
100
|
|
PPG Aerospace Materials (Suzhou) Co. Ltd.
|
China
|
|
100
|
|
PPG Asian Paints Private Ltd.
|
India
|
|
50
|
|
PPG Coatings (Hong Kong) Co., Limited
|
Hong Kong
|
|
100
|
|
PPG Coatings (Kunshan) Co., Ltd.
|
China
|
|
100
|
|
PPG Coatings (Malaysia) Sdn. Bhd.
|
Malaysia
|
|
100
|
|
PPG Coatings (Shanghai) Co., Ltd.
|
China
|
|
100
|
|
PPG Coatings (Suzhou) Co., Ltd.
|
China
|
|
100
|
|
PPG Coatings (Thailand) Co., Ltd.
|
Thailand
|
|
100
|
|
PPG Coatings (Tianjin) Co., Ltd.
|
China
|
|
100
|
|
PPG Coatings (Wuhu) Company, Ltd.
|
China
|
|
100
|
|
PPG Coatings (Zhangjiagang) Co., Ltd.
|
China
|
|
100
|
|
PPG COATINGS SINGAPORE PTE. LTD.
|
Singapore
|
|
100
|
|
PPG Industries (Korea) Ltd.
|
South Korea
|
|
100
|
|
PPG Industries (Singapore) Pte., Ltd.
|
Singapore
|
|
100
|
|
PPG Industries Australia PTY Limited A.C.N. 055 500 939
|
Australia
|
|
100
|
|
PPG Industries New Zealand Limited
|
New Zealand
|
|
100
|
|
PPG Japan Ltd.
|
Japan
|
|
100
|
|
PPG Management (Shanghai) Co., Ltd.
|
China
|
|
100
|
|
PPG Packaging Coatings (Suzhou) Co., Ltd.
|
China
|
|
100
|
|
PPG Paints Trading (Shanghai) Co., Ltd.
|
China
|
|
100
|
|
PPG Performance Coatings (Hong Kong) Limited
|
Hong Kong
|
|
100
|
|
PPG Performance Coatings (Malaysia) Sdn. Bhd.
|
Malaysia
|
|
100
|
|
PPG PMC Japan Co., Ltd.
|
Japan
|
|
95
|
|
PPG SSC Co., Ltd.
|
South Korea
|
|
80.01
|
|
PRC-Desoto Australia Pty Ltd.
|
Australia
|
|
100
|
|
Protec Pty Ltd. A.C.N. 007 857 392
|
Australia
|
|
100
|
|
PT. PPG Coatings Indonesia
|
Indonesia
|
|
100
|
|
Sikar (Shanghai) Trading Co. Ltd.
|
China
|
|
100
|
|
Spraylat Coatings (Shanghai) Limited
|
China
|
|
100
|
|
|
/s/ STEPHEN F. ANGEL
|
Stephen F. Angel
|
|
|
/s/ JAMES G. BERGES
|
James G. Berges
|
|
|
/s/ JOHN V. FARACI
|
John V. Faraci
|
|
|
/s/ HUGH GRANT
|
Hugh Grant
|
|
|
/s/ VICTORIA F. HAYNES
|
Victoria F. Haynes
|
|
|
/s/ MELANIE L. HEALEY
|
Melanie L. Healey
|
|
|
/s/ GARY R. HEMINGER
|
Gary R. Heminger
|
|
|
/s/ MICHELE J. HOOPER
|
Michele J. Hooper
|
|
|
/s/ MICHAEL W. LAMACH
|
Michael W. Lamach
|
|
|
/s/ MARTIN H. RICHENHAGEN
|
Martin H. Richenhagen
|
1.
|
I have reviewed this annual report on Form 10-K of PPG Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael H. McGarry
|
|
Michael H. McGarry
|
|
Chairman and Chief Executive Officer
|
|
February 21, 2019
|
|
1.
|
I have reviewed this annual report on Form 10-K of PPG Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Vincent J. Morales
|
|
Vincent J. Morales
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
February 21, 2019
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of PPG Industries, Inc.
|
/s/ Michael H. McGarry
|
|
Michael H. McGarry
|
|
Chairman and Chief Executive Officer
|
|
February 21, 2019
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of PPG Industries, Inc.
|
/s/ Vincent J. Morales
|
|
Vincent J. Morales
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
February 21, 2019
|
|