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Pennsylvania
|
|
25-0730780
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
One PPG Place, Pittsburgh, Pennsylvania
|
|
15272
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
ý
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
o
|
|
|
|
PAGE(S)
|
|
||
Item 1.
|
|
|
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
Signature
|
|
|
Three Months
Ended March 31 |
||||||
|
2014
|
|
2013
|
||||
Net sales
|
$
|
3,636
|
|
|
$
|
3,108
|
|
Cost of sales, exclusive of depreciation and amortization
|
2,091
|
|
|
1,862
|
|
||
Selling, general and administrative
|
900
|
|
|
746
|
|
||
Depreciation
|
89
|
|
|
75
|
|
||
Amortization
|
30
|
|
|
26
|
|
||
Research and development, net
|
120
|
|
|
109
|
|
||
Interest expense
|
47
|
|
|
53
|
|
||
Interest income
|
(12
|
)
|
|
(10
|
)
|
||
Asbestos settlement – net
|
3
|
|
|
3
|
|
||
Other charges
|
21
|
|
|
25
|
|
||
Other income
|
(25
|
)
|
|
(22
|
)
|
||
Income before income taxes
|
372
|
|
|
241
|
|
||
Income tax expense
|
89
|
|
|
44
|
|
||
Income from continuing operations
|
283
|
|
|
197
|
|
||
Income from discontinued operations, net of tax
|
1,018
|
|
|
2,248
|
|
||
Net income attributable to the controlling and noncontrolling interests
|
1,301
|
|
|
2,445
|
|
||
Less: Net income attributable to noncontrolling interests
|
(39
|
)
|
|
(35
|
)
|
||
Net income (attributable to PPG)
|
$
|
1,262
|
|
|
$
|
2,410
|
|
|
|
|
|
||||
Amounts attributable to PPG:
|
|
|
|
||||
Income from continuing operations, net of tax
|
$
|
277
|
|
|
$
|
191
|
|
Income from discontinued operations, net of tax
|
985
|
|
|
2,219
|
|
||
Net income (attributable to PPG)
|
$
|
1,262
|
|
|
$
|
2,410
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
||||
Income from continuing operations, net of tax
|
$
|
1.99
|
|
|
$
|
1.31
|
|
Income from discontinued operations, net of tax
|
7.08
|
|
|
15.18
|
|
||
Net income (attributable to PPG)
|
$
|
9.07
|
|
|
$
|
16.49
|
|
Earnings per common share – assuming dilution:
|
|
|
|
||||
Income from continuing operations, net of tax
|
$
|
1.97
|
|
|
$
|
1.29
|
|
Income from discontinued operations, net of tax
|
7.00
|
|
|
15.02
|
|
||
Net income (attributable to PPG)
|
$
|
8.97
|
|
|
$
|
16.31
|
|
|
|
|
|
||||
Dividends per common share
|
$
|
0.61
|
|
|
$
|
0.59
|
|
|
Three Months
Ended March 31 |
||||||
|
2014
|
|
2013
|
||||
Net income attributable to the controlling and noncontrolling interests
|
$
|
1,301
|
|
|
$
|
2,445
|
|
Other comprehensive income, net of tax:
|
|
|
|
||||
Defined benefit pension and other postretirement benefits
|
11
|
|
|
181
|
|
||
Unrealized foreign currency translation adjustment
|
17
|
|
|
(131
|
)
|
||
Net change – derivative financial instruments
|
3
|
|
|
5
|
|
||
Other comprehensive income, net of tax
|
$
|
31
|
|
|
$
|
55
|
|
Total comprehensive income
|
1,332
|
|
|
2,500
|
|
||
Less: amounts attributable to noncontrolling interests:
|
|
|
|
||||
Net income
|
(39
|
)
|
|
(35
|
)
|
||
Unrealized foreign currency translation adjustment
|
(1
|
)
|
|
3
|
|
||
Comprehensive income attributable to PPG
|
$
|
1,292
|
|
|
$
|
2,468
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,559
|
|
|
$
|
1,116
|
|
Short-term investments
|
480
|
|
|
629
|
|
||
Receivables (less allowance for doubtful accounts of
$73 and $74)
|
3,016
|
|
|
2,736
|
|
||
Inventories
|
1,929
|
|
|
1,824
|
|
||
Deferred income taxes
|
433
|
|
|
425
|
|
||
Other
|
471
|
|
|
484
|
|
||
Total current assets
|
8,888
|
|
|
7,214
|
|
||
Property, plant and equipment (net of accumulated depreciation of $4,696 and $4,805)
|
2,724
|
|
|
2,876
|
|
||
Goodwill
|
2,969
|
|
|
3,008
|
|
||
Identifiable intangible assets, net
|
1,326
|
|
|
1,339
|
|
||
Deferred income taxes
|
270
|
|
|
491
|
|
||
Investments
|
380
|
|
|
393
|
|
||
Other assets
|
560
|
|
|
542
|
|
||
Total
|
$
|
17,117
|
|
|
$
|
15,863
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
3,712
|
|
|
$
|
3,265
|
|
Asbestos settlement
|
769
|
|
|
763
|
|
||
Restructuring reserves
|
66
|
|
|
73
|
|
||
Short-term debt and current portion of long-term debt
|
19
|
|
|
34
|
|
||
Total current liabilities
|
4,566
|
|
|
4,135
|
|
||
Long-term debt
|
3,373
|
|
|
3,372
|
|
||
Accrued pensions
|
718
|
|
|
728
|
|
||
Other postretirement benefits
|
1,006
|
|
|
1,007
|
|
||
Asbestos settlement
|
249
|
|
|
245
|
|
||
Deferred income taxes
|
281
|
|
|
249
|
|
||
Other liabilities
|
835
|
|
|
929
|
|
||
Total liabilities
|
11,028
|
|
|
10,665
|
|
||
Commitments and contingent liabilities (Note 16)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock
|
484
|
|
|
484
|
|
||
Additional paid-in capital
|
989
|
|
|
953
|
|
||
Retained earnings
|
13,934
|
|
|
12,757
|
|
||
Treasury stock, at cost
|
(8,185
|
)
|
|
(8,002
|
)
|
||
Accumulated other comprehensive loss
|
(1,230
|
)
|
|
(1,260
|
)
|
||
Total PPG shareholders’ equity
|
5,992
|
|
|
4,932
|
|
||
Noncontrolling interests
|
97
|
|
|
266
|
|
||
Total shareholders’ equity
|
6,089
|
|
|
5,198
|
|
||
Total
|
$
|
17,117
|
|
|
$
|
15,863
|
|
|
Three Months
Ended March 31 |
||||||
|
2014
|
|
2013
|
||||
Operating activities:
|
|
|
|
||||
Net income attributable to controlling and noncontrolling interests
|
$
|
1,301
|
|
|
$
|
2,445
|
|
Less: Income from discontinued operations
|
(1,018
|
)
|
|
(2,248
|
)
|
||
Income from continuing operations
|
283
|
|
|
197
|
|
||
Adjustments to reconcile to cash from operations:
|
|
|
|
||||
Depreciation and amortization
|
119
|
|
|
101
|
|
||
Pension expense
|
18
|
|
|
31
|
|
||
Environmental remediation charge
|
—
|
|
|
12
|
|
||
Canadian pension settlement charge
|
—
|
|
|
18
|
|
||
Stock-based compensation expense
|
18
|
|
|
15
|
|
||
Equity affiliate losses, net of dividends
|
7
|
|
|
6
|
|
||
Deferred income taxes
|
(1
|
)
|
|
(66
|
)
|
||
Cash contributions to pension plans
|
(5
|
)
|
|
(15
|
)
|
||
Restructuring cash spending
|
(20
|
)
|
|
(22
|
)
|
||
Change in certain asset and liability accounts (net of acquisitions):
|
|
|
|
||||
Receivables
|
(363
|
)
|
|
(273
|
)
|
||
Inventories
|
(178
|
)
|
|
(109
|
)
|
||
Other current assets
|
(33
|
)
|
|
(33
|
)
|
||
Accounts payable and accrued liabilities
|
235
|
|
|
(39
|
)
|
||
Noncurrent assets
|
(24
|
)
|
|
(45
|
)
|
||
Noncurrent liabilities
|
(29
|
)
|
|
14
|
|
||
Taxes and interest payable
|
91
|
|
|
74
|
|
||
Other
|
12
|
|
|
2
|
|
||
Cash from (used for) operating activities - continuing operations
|
130
|
|
|
(132
|
)
|
||
Cash from operating activities - discontinued operations
|
33
|
|
|
43
|
|
||
Cash from (used for) operating activities
|
163
|
|
|
(89
|
)
|
||
Investing activities:
|
|
|
|
||||
Capital expenditures
|
(103
|
)
|
|
(63
|
)
|
||
Business acquisitions, net of cash balances acquired
|
(22
|
)
|
|
—
|
|
||
Proceeds from separation and merger of commodity chemicals business, net
|
—
|
|
|
940
|
|
||
Proceeds from the disposition of PPG's interest in the Transitions Optical joint venture and sunlens businesses (proceeds of $1,735, net of $110 cash divested)
|
1,625
|
|
|
—
|
|
||
Proceeds from maturity of short-term investments
|
250
|
|
|
987
|
|
||
Purchase of short-term investments
|
(132
|
)
|
|
(225
|
)
|
||
Payments on cross currency swap contracts
|
(45
|
)
|
|
(42
|
)
|
||
Proceeds from cross currency swap contracts
|
19
|
|
|
19
|
|
||
Other
|
4
|
|
|
—
|
|
||
Cash from investing activities - continuing operations
|
1,596
|
|
|
1,616
|
|
||
Cash used for investing activities - discontinued operations
|
(1
|
)
|
|
(2
|
)
|
||
Cash from investing activities
|
1,595
|
|
|
1,614
|
|
||
Financing activities:
|
|
|
|
||||
Net change in borrowing with maturities of three months or less
|
(10
|
)
|
|
6
|
|
||
Proceeds from the issuance of debt
|
2
|
|
|
—
|
|
||
Repayment of debt
|
(2
|
)
|
|
(600
|
)
|
||
Settlement of forward starting swaps
|
—
|
|
|
(1
|
)
|
||
Purchase of treasury stock
|
(200
|
)
|
|
(140
|
)
|
||
Issuance of treasury stock
|
35
|
|
|
32
|
|
||
Dividends paid on PPG common stock
|
(85
|
)
|
|
(84
|
)
|
||
Other
|
(3
|
)
|
|
4
|
|
||
Cash used for financing activities - continuing operations
|
(263
|
)
|
|
(783
|
)
|
||
Cash used for financing activities - discontinued operations
|
(40
|
)
|
|
(17
|
)
|
||
Cash used for financing activities
|
(303
|
)
|
|
(800
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(12
|
)
|
|
(10
|
)
|
||
Net increase in cash and cash equivalents
|
1,443
|
|
|
715
|
|
||
Cash and cash equivalents, beginning of period
|
1,116
|
|
|
1,306
|
|
||
Cash and cash equivalents, end of period
|
$
|
2,559
|
|
|
$
|
2,021
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Interest paid, net of amount capitalized
|
$
|
53
|
|
|
$
|
66
|
|
Taxes paid, net of refunds
|
$
|
59
|
|
|
$
|
57
|
|
1.
|
Basis of Presentation
|
2.
|
New Accounting Standards
|
3.
|
Acquisitions
|
($ in millions)
|
|
||
Current assets
|
$
|
558
|
|
Property, plant, and equipment
|
184
|
|
|
Trademarks with indefinite lives
|
174
|
|
|
Identifiable intangible assets with finite lives
|
196
|
|
|
Goodwill
|
228
|
|
|
Other non-current assets
|
49
|
|
|
Total assets
|
$
|
1,389
|
|
Current liabilities
|
(322
|
)
|
|
Accrued pensions
|
(29
|
)
|
|
Other post-retirement benefits
|
(40
|
)
|
|
Other long-term liabilities
|
(44
|
)
|
|
Total liabilities
|
$
|
(435
|
)
|
Total purchase price, net of cash acquired
|
$
|
954
|
|
Condensed Consolidated Pro Forma information (unaudited)
|
|
|
Three months ended
|
($ in millions)
|
March 31, 2013
|
|
|
Net sales
|
$3,480
|
4.
|
Discontinued Operations
|
|
Three Months
Ended March 31
|
||||||
($ in millions)
|
2014
|
|
2013
|
||||
Net sales
|
$
|
247
|
|
|
$
|
231
|
|
|
|
|
|
||||
Income from operations
|
$
|
104
|
|
|
$
|
77
|
|
Net gain from divestiture of the Transitions Optical and sunlens businesses
|
1,468
|
|
|
—
|
|
||
Income tax expense
|
(554
|
)
|
|
(20
|
)
|
||
Income from discontinued operations, net of tax
|
$
|
1,018
|
|
|
$
|
57
|
|
Less: Net income attributable to non-controlling interests, discontinued operations
|
(33
|
)
|
|
(29
|
)
|
||
Net income from discontinued operations (attributable to PPG)
|
$
|
985
|
|
|
$
|
28
|
|
|
December 31,
|
||
($ in millions)
|
2013
|
||
Cash
|
$
|
154
|
|
Receivables
|
225
|
|
|
Inventory
|
68
|
|
|
Other current assets
|
13
|
|
|
Property, plant, and equipment
|
158
|
|
|
Goodwill
|
47
|
|
|
Other non-current assets
|
3
|
|
|
Total assets
|
$
|
668
|
|
Accounts payable and accrued liabilities
|
(199
|
)
|
|
Short-term debt and current portion of long-term debt
|
(24
|
)
|
|
Accrued pensions
|
(1
|
)
|
|
Other long-term liabilities
|
(10
|
)
|
|
Noncontrolling interests
|
$
|
(167
|
)
|
Net assets
|
$
|
267
|
|
|
Three Months
Ended March 31
|
||
($ in millions)
|
2013
|
||
Net sales
|
$
|
108
|
|
|
|
||
Income from operations
|
$
|
—
|
|
Net gain from separation and merger of commodity chemicals business
|
2,192
|
|
|
Income tax expense
|
(1
|
)
|
|
Income from discontinued operations, net of tax
|
$
|
2,191
|
|
Less: Net income attributable to non-controlling interests, discontinued operations
|
—
|
|
|
Net income from discontinued operations (attributable to PPG)
|
$
|
2,191
|
|
5.
|
Inventories
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
($ in millions)
|
|
||||||
Finished products
|
$
|
1,245
|
|
|
$
|
1,156
|
|
Work in process
|
168
|
|
|
160
|
|
||
Raw materials
|
454
|
|
|
440
|
|
||
Supplies
|
62
|
|
|
68
|
|
||
Total
|
$
|
1,929
|
|
|
$
|
1,824
|
|
6.
|
Goodwill and Other Identifiable Intangible Assets
|
|
Performance
Coatings
|
|
Industrial
Coatings
|
|
Glass
|
|
Total
|
||||||||
($ in millions)
|
|
||||||||||||||
Balance, December 31, 2013
|
$
|
2,381
|
|
|
$
|
575
|
|
|
$
|
52
|
|
|
$
|
3,008
|
|
Acquisitions
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Divestitures
|
—
|
|
|
(47
|
)
|
|
—
|
|
|
(47
|
)
|
||||
Currency
|
4
|
|
|
(2
|
)
|
|
3
|
|
|
5
|
|
||||
Balance, March 31, 2014
|
$
|
2,388
|
|
|
$
|
526
|
|
|
$
|
55
|
|
|
$
|
2,969
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
($ in millions)
|
|
||||||||||||||||||||||
Acquired technology
|
$
|
527
|
|
|
$
|
(379
|
)
|
|
$
|
148
|
|
|
$
|
522
|
|
|
$
|
(372
|
)
|
|
$
|
150
|
|
Customer-related intangibles
|
1,172
|
|
|
(565
|
)
|
|
607
|
|
|
1,177
|
|
|
(557
|
)
|
|
620
|
|
||||||
Trade names
|
127
|
|
|
(61
|
)
|
|
66
|
|
|
127
|
|
|
(61
|
)
|
|
66
|
|
||||||
Other
|
31
|
|
|
(24
|
)
|
|
7
|
|
|
30
|
|
|
(26
|
)
|
|
4
|
|
||||||
Balance
|
$
|
1,857
|
|
|
$
|
(1,029
|
)
|
|
$
|
828
|
|
|
$
|
1,856
|
|
|
$
|
(1,016
|
)
|
|
$
|
840
|
|
7.
|
Business Restructuring
|
($ in millions, except no. of employees)
|
Severance
and Other
Costs
|
|
Asset
Write-offs
|
|
Total
Reserve
|
|
Employees
Impacted
|
|||||||
Performance Coatings
|
$
|
74
|
|
|
$
|
5
|
|
|
$
|
79
|
|
|
1,253
|
|
Industrial Coatings
|
14
|
|
|
—
|
|
|
14
|
|
|
165
|
|
|||
Glass
|
4
|
|
|
—
|
|
|
4
|
|
|
14
|
|
|||
Corporate
|
1
|
|
|
—
|
|
|
1
|
|
|
4
|
|
|||
Total third quarter 2013 restructuring charge
|
$
|
93
|
|
|
$
|
5
|
|
|
$
|
98
|
|
|
1,436
|
|
2013 activity
|
(27
|
)
|
|
(5
|
)
|
|
(32
|
)
|
|
(645
|
)
|
|||
Foreign currency impact
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|||
Balance as of December 31, 2013
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
70
|
|
|
791
|
|
2014 activity to date
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
(147
|
)
|
|||
Foreign currency impact
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||
Balance as of March 31, 2014
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
644
|
|
8.
|
Earnings Per Common Share
|
|
Three Months
Ended March 31 |
|
||||
($ in millions, except per share amounts)
|
2014
|
|
2013
|
|
||
Weighted average common shares outstanding
|
139.1
|
|
|
146.1
|
|
|
Effect of dilutive securities:
|
|
|
|
|
||
Stock options
|
0.8
|
|
|
0.9
|
|
|
Other stock compensation plans
|
0.8
|
|
|
0.7
|
|
|
Potentially dilutive common shares
|
1.6
|
|
|
1.6
|
|
|
Adjusted weighted average common shares outstanding
|
140.7
|
|
|
147.7
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2014
|
2013
|
Effective tax rate
|
|
24%
|
18%
|
10.
|
Pensions and Other Postretirement Benefits
|
|
Pensions
|
|
Other Postretirement Benefits
|
||||||||||||
|
Three Months
Ended March 31 |
|
Three Months
Ended March 31 |
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
($ in millions)
|
|
|
|
||||||||||||
Service cost
|
$
|
13
|
|
|
$
|
15
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Interest cost
|
59
|
|
|
52
|
|
|
12
|
|
|
12
|
|
||||
Expected return on plan assets
|
(74
|
)
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Amortization of actuarial losses
|
20
|
|
|
28
|
|
|
4
|
|
|
7
|
|
||||
Settlement losses
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
||||
Net periodic pension cost
|
$
|
18
|
|
|
$
|
49
|
|
|
$
|
18
|
|
|
$
|
22
|
|
11.
|
Shareholders’ Equity
|
($ in millions)
|
Total PPG
Shareholders’
Equity
|
|
Non-
controlling
Interests
|
|
Total
|
||||||
Balance, January 1, 2014
|
$
|
4,932
|
|
|
$
|
266
|
|
|
$
|
5,198
|
|
Net income
|
1,262
|
|
|
39
|
|
|
1,301
|
|
|||
Other comprehensive income, net of tax
|
30
|
|
|
1
|
|
|
31
|
|
|||
Cash dividends
|
(85
|
)
|
|
—
|
|
|
(85
|
)
|
|||
Issuance of treasury stock
|
46
|
|
|
—
|
|
|
46
|
|
|||
Stock repurchase program
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
|||
Stock-based compensation activity
|
7
|
|
|
—
|
|
|
7
|
|
|||
Reduction in non-controlling interests (Note 4)
|
—
|
|
|
(169
|
)
|
|
(169
|
)
|
|||
Distribution to noncontrolling interests
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
|||
Balance, March 31, 2014
|
$
|
5,992
|
|
|
$
|
97
|
|
|
$
|
6,089
|
|
($ in millions)
|
Total PPG
Shareholders’
Equity
|
|
Non-
controlling
Interests
|
|
Total
|
||||||
Balance, January 1, 2013
|
$
|
4,063
|
|
|
$
|
259
|
|
|
$
|
4,322
|
|
Net income
|
2,410
|
|
|
35
|
|
|
2,445
|
|
|||
Other comprehensive income, net of tax
|
58
|
|
|
(3
|
)
|
|
55
|
|
|||
Cash dividends
|
(84
|
)
|
|
—
|
|
|
(84
|
)
|
|||
Issuance of treasury stock
|
44
|
|
|
—
|
|
|
44
|
|
|||
Stock repurchase program
|
(140
|
)
|
|
—
|
|
|
(140
|
)
|
|||
Stock-based compensation activity
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Increase in treasury stock (Note 4)
|
(1,562
|
)
|
|
—
|
|
|
(1,562
|
)
|
|||
Reduction in noncontrolling interests (Note 4)
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|||
Distribution to noncontrolling interests
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|||
Balance, March 31, 2013
|
$
|
4,787
|
|
|
$
|
254
|
|
|
$
|
5,041
|
|
12.
|
Accumulated Other Comprehensive Loss
|
($ in millions)
|
Unrealized Foreign
Currency
Translation Adjustments
|
|
Pension and Other Postretirement Benefit Adjustments, net of tax
|
|
Unrealized Gain (Loss) on Derivatives, net of tax
|
|
Accumulated
Other Comprehensive
(Loss) Income
|
|||||||||||||||||||
Balance, January 1, 2013
|
|
|
$
|
6
|
|
|
|
|
$
|
(1,597
|
)
|
|
|
|
$
|
(75
|
)
|
|
|
$
|
(1,666
|
)
|
||||
Current year deferrals to AOCI
|
36
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
36
|
|
|
||||||||
Current year deferrals to AOCI, tax effected
|
(80
|
)
|
|
|
|
330
|
|
|
|
|
19
|
|
|
|
|
269
|
|
|
||||||||
Separation & Merger Transaction
|
—
|
|
|
|
|
33
|
|
|
|
|
4
|
|
|
|
|
37
|
|
|
||||||||
Reclassifications from AOCI to net income
|
—
|
|
|
|
|
77
|
|
|
|
|
(13
|
)
|
|
|
|
64
|
|
|
||||||||
Net change
|
|
|
(44
|
)
|
|
|
|
440
|
|
|
|
|
10
|
|
|
|
406
|
|
||||||||
Balance, December 31, 2013
|
|
|
$
|
(38
|
)
|
|
|
|
$
|
(1,157
|
)
|
|
|
|
$
|
(65
|
)
|
|
|
$
|
(1,260
|
)
|
||||
Current year deferrals to AOCI
|
(17
|
)
|
(a)
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(17
|
)
|
|
||||||||
Current year deferrals to AOCI, tax effected
|
33
|
|
(b)
|
|
|
(4
|
)
|
(c)
|
|
|
4
|
|
(d)
|
|
|
33
|
|
|
||||||||
Reclassifications from AOCI to net income
|
—
|
|
|
|
|
15
|
|
(c)
|
|
|
(1
|
)
|
(d)
|
|
|
14
|
|
|
||||||||
Net change
|
|
|
16
|
|
|
|
|
11
|
|
|
|
|
3
|
|
|
|
30
|
|
||||||||
Balance, March 31, 2014
|
|
|
$
|
(22
|
)
|
|
|
|
$
|
(1,146
|
)
|
|
|
|
$
|
(62
|
)
|
|
|
$
|
(1,230
|
)
|
13.
|
Fair Value Measurement
|
|
March 31, 2014
|
||||||||||
($ in Millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
||||||
Short-term investments:
|
|
|
|
|
|
||||||
Marketable equity securities
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other current assets:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
3
|
|
|
—
|
|
|||
Equity forward arrangement
|
—
|
|
|
214
|
|
|
—
|
|
|||
Investments:
|
|
|
|
|
|
||||||
Marketable equity securities
|
73
|
|
|
—
|
|
|
—
|
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
9
|
|
|
—
|
|
|||
Other liabilities:
|
|
|
|
|
|
||||||
Cross currency swaps
|
—
|
|
|
101
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
|
|
10
|
|
|
|
|||||
|
|
|
|
|
|
||||||
|
December 31, 2013
|
||||||||||
($ in Millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
||||||
Short-term investments:
|
|
|
|
|
|
||||||
Commercial paper and certificates of deposit
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
—
|
|
Other current assets:
|
|
|
|
|
|
||||||
Marketable equity securities
|
5
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
—
|
|
|
25
|
|
|
—
|
|
|||
Equity forward arrangement
|
—
|
|
|
207
|
|
|
—
|
|
|||
Investments:
|
|
|
|
|
|
||||||
Marketable equity securities
|
70
|
|
|
—
|
|
|
—
|
|
|||
Other assets:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
2
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
7
|
|
|
—
|
|
|||
Other liabilities:
|
|
|
|
|
|
||||||
Cross currency swaps
|
—
|
|
|
120
|
|
|
—
|
|
|||
Foreign currency forward contracts
|
—
|
|
|
11
|
|
|
—
|
|
14.
|
Financial Instruments and Hedging Activities
|
($ in Millions)
|
March 31, 2014
|
||||||||
Hedge Type
|
Gain (Loss)
Deferred in
OCI
|
|
Gain (Loss) Recognized
|
||||||
Amount
|
|
Caption
|
|||||||
Fair Value
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Not applicable
|
|
$
|
—
|
|
|
Sales
|
||
Equity forward arrangements
|
Not applicable
|
|
7
|
|
|
Asbestos - net
|
|||
Total Fair Value
|
|
|
$
|
7
|
|
|
|
||
Cash Flow
|
|
|
|
|
|
||||
Forward starting swaps
|
—
|
|
|
$
|
(3
|
)
|
|
Interest expense
|
|
Foreign currency forward contracts
|
5
|
|
|
5
|
|
|
Other charges
|
||
Total Cash Flow
|
$
|
5
|
|
|
$
|
2
|
|
|
|
Net Investment
|
|
|
|
|
|
||||
Cross currency swaps
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
Other charges
|
Foreign denominated debt
|
(1
|
)
|
|
Not applicable
|
|
|
|||
Total Net Investment
|
$
|
(7
|
)
|
|
|
|
|
($ in Millions)
|
March 31, 2013
|
||||||||
Hedge Type
|
Gain (Loss)
Deferred in OCI
|
|
Gain (Loss) Recognized
|
||||||
Amount
|
|
Caption
|
|||||||
Fair Value
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Not applicable
|
|
—
|
|
|
Sales
|
|||
Equity forward arrangements
|
Not applicable
|
|
(1
|
)
|
|
Asbestos - net
|
|||
Total Fair Value
|
|
|
$
|
(1
|
)
|
|
|
||
Cash Flow
|
|
|
|
|
|
||||
Forward starting swaps
|
|
|
(3
|
)
|
|
Interest expense
|
|||
Foreign currency forward contracts
|
(3
|
)
|
|
(3
|
)
|
|
Other charges
|
||
Total Cash Flow
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
|
Net Investment
|
|
|
|
|
|
||||
Cross currency swaps
|
$
|
28
|
|
|
$
|
—
|
|
|
|
Foreign denominated debt
|
11
|
|
|
Not applicable
|
|
|
|||
Total Net Investment
|
$
|
39
|
|
|
|
|
|
15.
|
Stock-Based Compensation
|
|
|
Three Months Ended March 31, 2014
|
|
Three Months Ended March 31, 2013
|
||||
Grant Details
|
|
Shares
|
Fair Value
|
|
Shares
|
Fair Value
|
||
Stock options
|
|
357,781
|
|
$43.05
|
|
497,711
|
|
$27.37
|
Restricted stock units
|
|
116,989
|
|
$179.21
|
|
152,875
|
|
$124.80
|
Contingent shares (a)
|
|
38,756
|
|
$187.06
|
|
45,388
|
|
$131.51
|
Weighted average exercise price
|
$187.06
|
|
Risk free interest rate
|
2.1
|
%
|
Expected life of option in years
|
6.5
|
|
Expected dividend yield
|
3.0
|
%
|
Expected volatility
|
30.1
|
%
|
16.
|
Commitments and Contingent Liabilities
|
Remainder of 2014
|
$
|
10
|
|
2015
|
14
|
|
|
2016 – 2023
|
67
|
|
|
Total
|
$
|
91
|
|
($ in Millions)
|
Three Months
Ended March 31 |
||||||
Increase (decrease) in expense
|
2014
|
|
2013
|
||||
|
|
||||||
Change in fair value:
|
|
|
|
||||
PPG stock
|
$
|
5
|
|
|
$
|
(2
|
)
|
Equity forward instrument
|
(6
|
)
|
|
2
|
|
||
Accretion of asbestos liability
|
4
|
|
|
3
|
|
||
Asbestos settlement – net expense
|
$
|
3
|
|
|
$
|
3
|
|
17.
|
Reportable Business Segment Information
|
|
Three Months
Ended March 31 |
||||||
($ in Millions)
|
2014
|
|
2013
|
||||
|
|
||||||
Net sales:
|
|
|
|
||||
Performance Coatings
|
$
|
2,007
|
|
|
$
|
1,578
|
|
Industrial Coatings
|
1,363
|
|
|
1,274
|
|
||
Glass
|
266
|
|
|
256
|
|
||
Total (a)
|
$
|
3,636
|
|
|
$
|
3,108
|
|
Segment income:
|
|
|
|
||||
Performance Coatings
|
$
|
248
|
|
|
$
|
192
|
|
Industrial Coatings
|
231
|
|
|
198
|
|
||
Glass
|
4
|
|
|
5
|
|
||
Total
|
483
|
|
|
395
|
|
||
Legacy items (b)
|
(10
|
)
|
|
(46
|
)
|
||
Acquisition-related costs (c)
|
(3
|
)
|
|
(6
|
)
|
||
Interest expense, net of interest income
|
(35
|
)
|
|
(43
|
)
|
||
Other corporate expense – net
|
(63
|
)
|
|
(59
|
)
|
||
Income from continuing operations before income taxes
|
$
|
372
|
|
|
$
|
241
|
|
(a)
|
Intersegment net sales for the
three
months ended
March 31, 2014
and 2013 were not material.
|
(b)
|
Legacy items include current costs related to former operations of the Company, including pension and other postretirement benefit costs, certain charges for legal matters and environmental remediation costs, and certain charges which are considered to be unusual or non-recurring including the earnings impact of the proposed asbestos settlement. Legacy items also include equity earnings from PPG’s approximate
40%
investment in the former automotive glass and services business. The expense for the
three
months ended March 31, 2013 includes nonrecurring environmental remediation pre-tax charges of
$12 million
. The expense for the three months ended March 31, 2013 also includes a pre-tax charge of
$18 million
for the settlement losses related to certain legacy Canadian glass pension plans.
|
(c)
|
Includes advisory, legal, accounting, valuation and other professional or consulting fees incurred in connection with acquisition activity. In addition, for the three months ended March 31, 2013, includes the flow-through cost of sales of the step up to fair value of inventory of acquired from Spraylat of
$3 million
.
|
Three months ended March 31, 2014
|
|
|||||||||
(Millions, except per share amounts)
|
Income Before Income Taxes
|
|
Tax Expense
|
|
Effective Tax Rate
|
|||||
Effective tax rate, continuing operations
|
$
|
372
|
|
|
$
|
89
|
|
|
23.9
|
%
|
Includes:
|
|
|
|
|
|
|||||
Charges related to business acquisitions
|
3
|
|
|
1
|
|
|
37.6
|
%
|
||
Adjusted effective tax rate, continuing operations, excluding certain charges
|
$
|
375
|
|
|
$
|
90
|
|
|
24.0
|
%
|
Three months ended March 31, 2013
|
|
|||||||||
(Millions, except per share amounts)
|
Income Before Income Taxes
|
|
Tax Expense
|
|
Effective Tax Rate
|
|||||
Effective tax rate, continuing operations
|
$
|
241
|
|
|
$
|
44
|
|
|
18.3
|
%
|
Includes:
|
|
|
|
|
|
|||||
Legacy pension costs
|
18
|
|
|
5
|
|
|
26.7
|
%
|
||
Environmental remediation costs
|
12
|
|
|
4
|
|
|
37.4
|
%
|
||
Charges related to business acquisitions
|
6
|
|
|
1
|
|
|
26.0
|
%
|
||
Retroactive benefit of U.S. tax law change
|
|
|
10
|
|
|
|
||||
Adjusted effective tax rate, continuing operations, excluding certain charges
|
$
|
277
|
|
|
$
|
64
|
|
|
23.1
|
%
|
|
|
|
|
||||
Three Months ended March 31, 2014
|
Continuing Operations
|
||||||
(Millions, except per share amounts)
|
Net Income
|
|
EPS
|
||||
Net income (attributable to PPG)
|
|
$277
|
|
|
|
$1.97
|
|
Net income (attributable to PPG) includes:
|
|
|
|
||||
Acquisition-related costs
|
2
|
|
|
0.01
|
|
||
Adjusted net income
|
|
$279
|
|
|
|
$1.98
|
|
|
|
|
|
||||
Three Months ended March 31, 2013
|
Continuing Operations
|
||||||
(Millions, except per share amounts)
|
Net Income
|
|
EPS
|
||||
Net income (attributable to PPG)
|
|
$191
|
|
|
|
$1.29
|
|
Net income (attributable to PPG) includes:
|
|
|
|
||||
Legacy pension and environmental costs
|
21
|
|
|
0.14
|
|
||
Acquisition-related costs
|
5
|
|
|
0.03
|
|
||
Retroactive benefit of U.S. tax law change
|
(10
|
)
|
|
(0.07
|
)
|
||
Adjusted net income
|
|
$207
|
|
|
|
$1.39
|
|
•
|
Performance Coatings - aerospace, architectural coatings Americas and Asia-Pacific, architectural coatings - EMEA, automotive refinish, and protective and marine coatings
|
•
|
Industrial Coatings - automotive OEM coatings, industrial coatings, packaging coatings, and specialty coatings and materials
|
•
|
Glass - fiber glass and flat glass
|
•
|
Capital expenditures from continuing operations, excluding acquisitions, were $103 million, or about
3%
of sales. Anticipated 2014 capital spending is expected to be in the range of $500 million to $600 million.
|
•
|
Cash dividends paid totaled $85 million.
|
•
|
Cash paid for share repurchases totaled $200 million.
|
(Millions, except percentages)
|
March 31, 2014
|
|
Dec. 31
2013 |
|
March 31, 2013
|
|
||||||
Trade Receivables, Net
|
|
$2,669
|
|
|
|
$2,449
|
|
|
|
$2,594
|
|
|
Inventories, FIFO
|
2,114
|
|
|
2,019
|
|
|
1,895
|
|
|
|||
Trade Creditors’ Liabilities
|
2,029
|
|
|
1,790
|
|
|
1,652
|
|
|
|||
Operating Working Capital
|
|
$2,754
|
|
|
|
$2,678
|
|
(a)
|
|
$2,837
|
|
(a)
|
Operating Working Capital as a % of Sales
|
18.9
|
%
|
|
18.1
|
%
|
|
21.3
|
%
|
|
|||
(a) Inclusive of amounts related to PPG's interest in the Transitions Optical joint venture and sunlens businesses that were sold on March 31, 2014.
|
Month
|
Total Number
of Shares Purchased |
|
Average
Price Paid per Share |
|
Total Number
of Shares Purchased as Part of Publicly Announced Programs (1) |
|
Maximum
Number of Shares That May Yet Be Purchased Under the Programs |
|||||
January 2014
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
103,708
|
|
|
$
|
183.55
|
|
|
103,708
|
|
|
2,139,458
|
|
February 2014
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
457,782
|
|
|
$
|
186.24
|
|
|
457,782
|
|
|
1,681,676
|
|
March 2014
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
490,271
|
|
|
$
|
196.17
|
|
|
490,271
|
|
|
1,191,405
|
|
Total quarter ended March 31, 2014
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
1,051,761
|
|
|
$
|
188.65
|
|
|
1,051,761
|
|
|
1,191,405
|
|
(1)
|
These shares were repurchased under a 10 million share repurchase program approved in October 2011. This repurchase program has no expiration date.
|
|
PPG INDUSTRIES, INC.
|
|||
(Registrant)
|
||||
|
||||
Date:
|
April 24, 2014
|
By
|
|
/s/ Frank S. Sklarsky
|
|
Frank S. Sklarsky
Executive Vice President and Chief Financial Officer
(Principal Financial and
Accounting Officer and
Duly Authorized Officer)
|
†10.1
|
|
Separation Agreement and Release between PPG Industries, Inc. and Richard C. Elias.
|
†10.2
|
|
Form of Change in Control Employment Agreement entered into with executives on or after January 1, 2014.
|
†12
|
|
Computation of Ratio of Earnings to Fixed Charges for the Three Months Ended March 31, 2014 and for the Five Years Ended December 31, 2013.
|
†31.1
|
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
†31.2
|
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
†32.1
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
†32.2
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
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.
|
||
* Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statement of Income for the three months ended March 31, 2014 and 2013, (ii) the Condensed Consolidated Balance Sheet at March 31, 2014 and December 31, 2013, (iii) the Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2014 and 2013, and (iv) Notes to Condensed Consolidated Financial Statements for the three months ended March 31, 2014.
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|