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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 5.
|
||
Item 6.
|
||
Signature
|
|
|
Three Months
Ended March 31 |
||||||
|
2015
|
|
2014
|
||||
Net sales
|
$
|
3,662
|
|
|
$
|
3,636
|
|
Cost of sales, exclusive of depreciation and amortization
|
2,065
|
|
|
2,091
|
|
||
Selling, general and administrative
|
914
|
|
|
900
|
|
||
Depreciation
|
87
|
|
|
89
|
|
||
Amortization
|
33
|
|
|
30
|
|
||
Research and development, net
|
119
|
|
|
120
|
|
||
Interest expense
|
29
|
|
|
47
|
|
||
Interest income
|
(11
|
)
|
|
(12
|
)
|
||
Asbestos settlement, net
|
3
|
|
|
3
|
|
||
Other charges
|
24
|
|
|
21
|
|
||
Other income
|
(31
|
)
|
|
(25
|
)
|
||
Income from continuing operations before income taxes
|
430
|
|
|
372
|
|
||
Income tax expense
|
104
|
|
|
89
|
|
||
Income from continuing operations
|
326
|
|
|
283
|
|
||
Income from discontinued operations, net of tax
|
1
|
|
|
1,018
|
|
||
Net income attributable to the controlling and noncontrolling interests
|
327
|
|
|
1,301
|
|
||
Less: Net income attributable to noncontrolling interests
|
(5
|
)
|
|
(39
|
)
|
||
Net income (attributable to PPG)
|
$
|
322
|
|
|
$
|
1,262
|
|
Amounts attributable to PPG:
|
|
|
|
||||
Income from continuing operations, net of tax
|
$
|
321
|
|
|
$
|
277
|
|
Income from discontinued operations, net of tax
|
1
|
|
|
985
|
|
||
Net income (attributable to PPG)
|
$
|
322
|
|
|
$
|
1,262
|
|
|
|
|
|
||||
Earnings per common share:
|
|
|
|
||||
Income from continuing operations, net of tax
|
$
|
2.35
|
|
|
$
|
1.99
|
|
Income from discontinued operations, net of tax
|
0.01
|
|
|
7.08
|
|
||
Net income (attributable to PPG)
|
$
|
2.36
|
|
|
$
|
9.07
|
|
Earnings per common share – assuming dilution:
|
|
|
|
||||
Income from continuing operations, net of tax
|
$
|
2.33
|
|
|
$
|
1.97
|
|
Income from discontinued operations, net of tax
|
0.01
|
|
|
7.00
|
|
||
Net income (attributable to PPG)
|
$
|
2.34
|
|
|
$
|
8.97
|
|
|
|
|
|
||||
Dividends per common share
|
$
|
0.67
|
|
|
$
|
0.61
|
|
|
Three Months
Ended March 31 |
||||||
|
2015
|
|
2014
|
||||
Net income attributable to the controlling and noncontrolling interests
|
$
|
327
|
|
|
$
|
1,301
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||
Defined benefit pension and other postretirement benefits
|
68
|
|
|
11
|
|
||
Unrealized foreign currency translation adjustments
|
(272
|
)
|
|
17
|
|
||
Derivative financial instruments
|
6
|
|
|
3
|
|
||
Other comprehensive (loss) income, net of tax
|
(198
|
)
|
|
31
|
|
||
Total comprehensive income
|
$
|
129
|
|
|
$
|
1,332
|
|
Less: amounts attributable to noncontrolling interests:
|
|
|
|
||||
Net income
|
(5
|
)
|
|
(39
|
)
|
||
Unrealized foreign currency translation adjustments
|
5
|
|
|
(1
|
)
|
||
Comprehensive income attributable to PPG
|
$
|
129
|
|
|
$
|
1,292
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
735
|
|
|
$
|
686
|
|
Short-term investments
|
435
|
|
|
497
|
|
||
Receivables (less allowance for doubtful accounts of
$76 and $87)
|
2,961
|
|
|
2,815
|
|
||
Inventories
|
1,881
|
|
|
1,825
|
|
||
Deferred income taxes
|
373
|
|
|
406
|
|
||
Other
|
699
|
|
|
621
|
|
||
Total current assets
|
7,084
|
|
|
6,850
|
|
||
Property, plant and equipment (net of accumulated depreciation of $4,275 and $4,378)
|
2,965
|
|
|
3,092
|
|
||
Goodwill
|
3,541
|
|
|
3,801
|
|
||
Identifiable intangible assets, net
|
2,277
|
|
|
2,411
|
|
||
Deferred income taxes
|
450
|
|
|
505
|
|
||
Investments
|
449
|
|
|
443
|
|
||
Other assets
|
602
|
|
|
481
|
|
||
Total
|
$
|
17,368
|
|
|
$
|
17,583
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
3,329
|
|
|
$
|
3,548
|
|
Asbestos settlement
|
813
|
|
|
821
|
|
||
Restructuring reserves
|
10
|
|
|
26
|
|
||
Short-term debt and current portion of long-term debt
|
621
|
|
|
481
|
|
||
Total current liabilities
|
4,773
|
|
|
4,876
|
|
||
Long-term debt
|
4,023
|
|
|
3,544
|
|
||
Accrued pensions
|
663
|
|
|
995
|
|
||
Other postretirement benefits
|
1,118
|
|
|
1,132
|
|
||
Asbestos settlement
|
263
|
|
|
259
|
|
||
Deferred income taxes
|
624
|
|
|
702
|
|
||
Other liabilities
|
746
|
|
|
810
|
|
||
Total liabilities
|
12,210
|
|
|
12,318
|
|
||
Commitments and contingent liabilities (Note 15)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Common stock
|
484
|
|
|
484
|
|
||
Additional paid-in capital
|
1,073
|
|
|
1,028
|
|
||
Retained earnings
|
14,728
|
|
|
14,498
|
|
||
Treasury stock, at cost
|
(8,898
|
)
|
|
(8,714
|
)
|
||
Accumulated other comprehensive loss
|
(2,309
|
)
|
|
(2,116
|
)
|
||
Total PPG shareholders’ equity
|
5,078
|
|
|
5,180
|
|
||
Noncontrolling interests
|
80
|
|
|
85
|
|
||
Total shareholders’ equity
|
5,158
|
|
|
5,265
|
|
||
Total
|
$
|
17,368
|
|
|
$
|
17,583
|
|
($ in millions)
|
Three Months
Ended March 31 |
||||||
|
2015
|
|
2014
|
||||
Operating activities:
|
|
|
|
||||
Net income attributable to controlling and noncontrolling interests
|
$
|
327
|
|
|
$
|
1,301
|
|
Less: Income from discontinued operations
|
(1
|
)
|
|
(1,018
|
)
|
||
Income from continuing operations
|
326
|
|
|
283
|
|
||
Adjustments to reconcile net income to cash (used for) / from operations:
|
|
|
|
||||
Depreciation and amortization
|
120
|
|
|
119
|
|
||
Pension expense
|
24
|
|
|
18
|
|
||
Stock-based compensation expense
|
15
|
|
|
18
|
|
||
Equity affiliate (earnings) losses, net of distributions received
|
(6
|
)
|
|
7
|
|
||
Deferred income taxes
|
12
|
|
|
(1
|
)
|
||
Gains on derivative instruments
|
(55
|
)
|
|
(5
|
)
|
||
Cash contributions to pension plans
|
(276
|
)
|
|
(5
|
)
|
||
Restructuring cash spending
|
(13
|
)
|
|
(20
|
)
|
||
Change in certain asset and liability accounts:
|
|
|
|
||||
Receivables
|
(327
|
)
|
|
(363
|
)
|
||
Inventories
|
(136
|
)
|
|
(178
|
)
|
||
Other current assets
|
(66
|
)
|
|
(33
|
)
|
||
Accounts payable and accrued liabilities
|
(63
|
)
|
|
235
|
|
||
Noncurrent assets
|
(37
|
)
|
|
(24
|
)
|
||
Noncurrent liabilities
|
4
|
|
|
(29
|
)
|
||
Taxes and interest payable
|
67
|
|
|
12
|
|
||
Other
|
(18
|
)
|
|
96
|
|
||
Cash (used for) / from operating activities - continuing operations
|
(429
|
)
|
|
130
|
|
||
Cash from operating activities - discontinued operations
|
—
|
|
|
33
|
|
||
Cash (used for) / from operating activities
|
(429
|
)
|
|
163
|
|
||
Investing activities:
|
|
|
|
||||
Capital expenditures
|
(72
|
)
|
|
(103
|
)
|
||
Business acquisitions, net of cash balances acquired
|
(9
|
)
|
|
(22
|
)
|
||
Proceeds from the disposition of PPG's interest in the Transitions Optical joint venture and sunlens business
|
47
|
|
|
1,625
|
|
||
Purchase of short-term investments
|
—
|
|
|
(132
|
)
|
||
Proceeds from maturity of short-term investments
|
51
|
|
|
250
|
|
||
Payments on cross currency swap contracts
|
(34
|
)
|
|
(45
|
)
|
||
Proceeds from cross currency swap contracts
|
19
|
|
|
19
|
|
||
Proceeds from net investment hedges
|
19
|
|
|
—
|
|
||
Other
|
14
|
|
|
4
|
|
||
Cash from investing activities - continuing operations
|
35
|
|
|
1,596
|
|
||
Cash used for investing activities - discontinued operations
|
—
|
|
|
(1
|
)
|
||
Cash from investing activities
|
35
|
|
|
1,595
|
|
||
Financing activities:
|
|
|
|
||||
Net change in borrowing with maturities of three months or less
|
(20
|
)
|
|
(10
|
)
|
||
Net payments on commercial paper and short-term debt
|
(497
|
)
|
|
(3
|
)
|
||
Proceeds from the issuance of debt
|
1,242
|
|
|
2
|
|
||
Repayment of long-term debt
|
(1
|
)
|
|
(2
|
)
|
||
Purchase of treasury stock
|
(200
|
)
|
|
(200
|
)
|
||
Issuance of treasury stock
|
44
|
|
|
35
|
|
||
Dividends paid on PPG common stock
|
(91
|
)
|
|
(85
|
)
|
||
Other
|
(19
|
)
|
|
—
|
|
||
Cash from / (used for) financing activities - continuing operations
|
458
|
|
|
(263
|
)
|
||
Cash used for financing activities - discontinued operations
|
—
|
|
|
(40
|
)
|
||
Cash from / (used for) financing activities
|
458
|
|
|
(303
|
)
|
||
Effect of currency exchange rate changes on cash and cash equivalents
|
(15
|
)
|
|
(12
|
)
|
||
Net increase in cash and cash equivalents
|
49
|
|
|
1,443
|
|
||
Cash and cash equivalents, beginning of period
|
686
|
|
|
1,116
|
|
||
Cash and cash equivalents, end of period
|
$
|
735
|
|
|
$
|
2,559
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Interest paid, net of amount capitalized
|
$
|
17
|
|
|
$
|
53
|
|
Taxes paid, net of refunds
|
$
|
83
|
|
|
$
|
59
|
|
1.
|
Basis of Presentation
|
2.
|
New Accounting Standards
|
3.
|
Acquisitions and Dispositions
|
($ in millions)
|
|
||
Current assets
|
$
|
379
|
|
Property, plant, and equipment
|
312
|
|
|
Trademarks with indefinite lives
|
1,022
|
|
|
Identifiable intangible assets with finite lives
|
282
|
|
|
Goodwill
|
1,030
|
|
|
Other non-current assets
|
35
|
|
|
Total assets
|
$
|
3,060
|
|
Current liabilities
|
(368
|
)
|
|
Non-current deferred tax liabilities
|
(387
|
)
|
|
Long-term debt
|
(280
|
)
|
|
Accrued pensions
|
(20
|
)
|
|
Other long-term liabilities
|
(29
|
)
|
|
Total liabilities
|
$
|
(1,084
|
)
|
Total purchase price, net of cash acquired
|
$
|
1,976
|
|
Condensed Consolidated Pro Forma information (unaudited)
|
|
|
Three months-ended March 31
|
($ in millions)
|
2014
|
Net sales
|
$3,810
|
|
Three Months
Ended March 31 |
||||||
($ in millions)
|
2015
|
|
2014
|
||||
Net sales
|
$
|
—
|
|
|
$
|
247
|
|
Income from operations
|
$
|
—
|
|
|
$
|
104
|
|
Net gain from divestiture of PPG's interest in the Transitions Optical joint venture and sunlens business
|
—
|
|
|
1,468
|
|
||
Income tax benefit (expense)
|
1
|
|
|
(554
|
)
|
||
Income from discontinued operations, net of tax
|
1
|
|
|
1,018
|
|
||
Less: Net income attributable to non-controlling interests, discontinued operations
|
—
|
|
|
(33
|
)
|
||
Net income from discontinued operations (attributable to PPG)
|
$
|
1
|
|
|
$
|
985
|
|
4.
|
Inventories
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
($ in millions)
|
|
||||||
Finished products
|
$
|
1,225
|
|
|
$
|
1,169
|
|
Work in process
|
156
|
|
|
157
|
|
||
Raw materials
|
444
|
|
|
439
|
|
||
Supplies
|
56
|
|
|
60
|
|
||
Total
|
$
|
1,881
|
|
|
$
|
1,825
|
|
5.
|
Goodwill and Other Identifiable Intangible Assets
|
|
Performance
Coatings
|
|
Industrial
Coatings
|
|
Glass
|
|
Total
|
||||||||
($ in millions)
|
|
||||||||||||||
Balance, December 31, 2014
|
$
|
3,267
|
|
|
$
|
486
|
|
|
$
|
48
|
|
|
$
|
3,801
|
|
Acquisitions
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||
Currency
|
(162
|
)
|
|
(38
|
)
|
|
(5
|
)
|
|
(205
|
)
|
||||
Balance, March 31, 2015
|
$
|
3,050
|
|
|
$
|
448
|
|
|
$
|
43
|
|
|
$
|
3,541
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
($ in millions)
|
|
||||||||||||||||||||||
Acquired technology
|
$
|
547
|
|
|
$
|
(394
|
)
|
|
$
|
153
|
|
|
$
|
560
|
|
|
$
|
(394
|
)
|
|
$
|
166
|
|
Customer-related intangibles
|
1,216
|
|
|
(543
|
)
|
|
673
|
|
|
1,302
|
|
|
(570
|
)
|
|
732
|
|
||||||
Trade names
|
132
|
|
|
(55
|
)
|
|
77
|
|
|
134
|
|
|
(60
|
)
|
|
74
|
|
||||||
Other
|
41
|
|
|
(24
|
)
|
|
17
|
|
|
42
|
|
|
(24
|
)
|
|
18
|
|
||||||
Balance
|
$
|
1,936
|
|
|
$
|
(1,016
|
)
|
|
$
|
920
|
|
|
$
|
2,038
|
|
|
$
|
(1,048
|
)
|
|
$
|
990
|
|
6.
|
Business Restructuring
|
7.
|
Borrowings
|
8.
|
Earnings Per Common Share
|
|
Three Months
Ended March 31 |
||||
(in millions)
|
2015
|
|
2014
|
||
Weighted average common shares outstanding
|
136.6
|
|
|
139.1
|
|
Effect of dilutive securities:
|
|
|
|
||
Stock options
|
0.6
|
|
|
0.8
|
|
Other stock compensation plans
|
0.6
|
|
|
0.8
|
|
Potentially dilutive common shares
|
1.2
|
|
|
1.6
|
|
Adjusted weighted average common shares outstanding
|
137.8
|
|
|
140.7
|
|
|
|
Three Months Ended March 31
|
|
|
|
2015
|
2014
|
Effective tax rate
|
|
24.2%
|
23.9%
|
10.
|
Pensions and Other Postretirement Benefits
|
|
Pensions
|
|
Other Postretirement Benefits
|
||||||||||||
|
Three Months
Ended March 31 |
|
Three Months
Ended March 31 |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
($ in millions)
|
|
||||||||||||||
Service cost
|
$
|
15
|
|
|
$
|
13
|
|
|
$
|
5
|
|
|
$
|
4
|
|
Interest cost
|
50
|
|
|
59
|
|
|
12
|
|
|
12
|
|
||||
Expected return on plan assets
|
(70
|
)
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of actuarial losses (gains)
|
30
|
|
|
20
|
|
|
8
|
|
|
(2
|
)
|
||||
Amortization of prior service (credit) cost
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|
4
|
|
||||
Net periodic cost
|
$
|
24
|
|
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
18
|
|
11.
|
Shareholders’ Equity
|
($ in millions)
|
Total PPG
Shareholders’
Equity
|
|
Non-
controlling
Interests
|
|
Total
|
||||||
Balance, January 1, 2015
|
$
|
5,180
|
|
|
$
|
85
|
|
|
$
|
5,265
|
|
Net income
|
322
|
|
|
5
|
|
|
327
|
|
|||
Other comprehensive income, net of tax
|
(193
|
)
|
|
(5
|
)
|
|
(198
|
)
|
|||
Cash dividends
|
(91
|
)
|
|
—
|
|
|
(91
|
)
|
|||
Issuance of treasury stock
|
58
|
|
|
—
|
|
|
58
|
|
|||
Stock repurchase program
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
|||
Stock-based compensation activity
|
2
|
|
|
—
|
|
|
2
|
|
|||
Other
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||
Balance, March 31, 2015
|
$
|
5,078
|
|
|
$
|
80
|
|
|
$
|
5,158
|
|
($ 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 noncontrolling interests (Note 3)
|
—
|
|
|
(169
|
)
|
|
(169
|
)
|
|||
Distribution to noncontrolling interests
|
—
|
|
|
(40
|
)
|
|
(40
|
)
|
|||
Balance, March 31, 2014
|
$
|
5,992
|
|
|
$
|
97
|
|
|
$
|
6,089
|
|
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, 2014
|
|
|
$
|
(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
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, January 1, 2015
|
|
|
$
|
(628
|
)
|
|
|
|
$
|
(1,492
|
)
|
|
|
|
$
|
4
|
|
|
|
|
$
|
(2,116
|
)
|
||||
Current year deferrals to AOCI
|
(429
|
)
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
(429
|
)
|
|
|
||||||||
Current year deferrals to AOCI, tax effected
|
162
|
|
(b)
|
|
|
45
|
|
(c)
|
|
|
(33
|
)
|
(d)
|
|
|
174
|
|
|
|
||||||||
Reclassifications from AOCI to net income
|
|
|
|
|
|
23
|
|
(c)
|
|
|
39
|
|
(d)
|
|
|
62
|
|
|
|
||||||||
Net change
|
|
|
(267
|
)
|
|
|
|
68
|
|
|
|
|
6
|
|
|
|
|
(193
|
)
|
||||||||
Balance, March 31, 2015
|
|
|
$
|
(895
|
)
|
|
|
|
$
|
(1,424
|
)
|
|
|
|
$
|
10
|
|
|
|
|
$
|
(2,309
|
)
|
13.
|
Financial Instruments, Hedging Activities and Fair Value Measurements
|
($ in millions)
|
March 31, 2015
|
||||||||
Hedge Type
|
Gain
Deferred in
OCI
|
|
Gain (Loss) Recognized
|
||||||
Amount
|
|
Caption
|
|||||||
Fair Value
|
|
|
|
|
|
||||
Equity forward arrangements
|
Not applicable
|
|
(7
|
)
|
|
Asbestos - net
|
|||
Total Fair Value
|
|
|
$
|
(7
|
)
|
|
|
||
Cash Flow
|
|
|
|
|
|
||||
Foreign currency forward contracts
(a)
|
$
|
57
|
|
|
$
|
49
|
|
|
Other charges
|
Total Cash Flow
|
$
|
57
|
|
|
$
|
49
|
|
|
|
Net Investment
|
|
|
|
|
|
||||
Cross currency swaps
|
$
|
82
|
|
|
|
|
|
|
|
Foreign currency forward contracts
|
18
|
|
|
|
|
|
|
||
Foreign denominated debt
|
113
|
|
|
|
|
|
|||
Total Net Investment
|
$
|
213
|
|
|
|
|
|
|
($ in millions)
|
March 31, 2014
|
||||||||
Hedge Type
|
Gain (Loss)
Deferred in OCI
|
|
Gain (Loss) Recognized
|
||||||
Amount
|
|
Caption
|
|||||||
Fair Value
|
|
|
|
|
|
||||
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
|
)
|
|
|
|
|
|
|
Foreign denominated debt
|
(1
|
)
|
|
|
|
|
|||
Total Net Investment
|
$
|
(7
|
)
|
|
|
|
|
|
|
March 31, 2015
|
||||||||||
($ in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
||||||
Other current assets:
|
|
|
|
|
|
||||||
Marketable equity securities
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
—
|
|
|
103
|
|
|
—
|
|
|||
Equity forward arrangement
|
—
|
|
|
261
|
|
|
—
|
|
|||
Investments:
|
|
|
|
|
|
||||||
Marketable equity securities
|
78
|
|
|
—
|
|
|
—
|
|
|||
Other Assets:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
33
|
|
|
—
|
|
|||
Cross currency swaps
|
—
|
|
|
65
|
|
|
—
|
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
3
|
|
|
—
|
|
|||
Other liabilities:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
1
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
|
|
||||||||||
|
December 31, 2014
|
||||||||||
($ in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Assets:
|
|
|
|
|
|
||||||
Other current assets:
|
|
|
|
|
|
||||||
Marketable equity securities
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward contracts
|
—
|
|
|
52
|
|
|
—
|
|
|||
Equity forward arrangement
|
—
|
|
|
268
|
|
|
—
|
|
|||
Investments:
|
|
|
|
|
|
||||||
Marketable equity securities
|
74
|
|
|
—
|
|
|
—
|
|
|||
Other assets:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
16
|
|
|
—
|
|
|||
Liabilities:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
—
|
|
|
23
|
|
|
—
|
|
|||
Other liabilities:
|
|
|
|
|
|
||||||
Cross currency swaps
|
—
|
|
|
32
|
|
|
—
|
|
14.
|
Stock-Based Compensation
|
|
|
2015
|
|
2014
|
||||
Grant Details
|
|
Shares
|
Fair Value
|
|
Shares
|
Fair Value
|
||
Stock options
|
|
291,586
|
|
$53.96
|
|
357,781
|
|
$43.05
|
Restricted stock units
|
|
91,075
|
|
$228.08
|
|
116,989
|
|
$179.21
|
Contingent shares (a)
|
|
31,654
|
|
$236.24
|
|
38,756
|
|
$187.06
|
Weighted average exercise price
|
$236.24
|
|
Risk-free interest rate
|
1.9
|
%
|
Expected life of option in years
|
6.5
|
|
Expected dividend yield
|
2.7
|
%
|
Expected volatility
|
29.2
|
%
|
15.
|
Commitments and Contingent Liabilities
|
Remainder of 2015
|
$
|
11
|
|
2016
|
14
|
|
|
2017 – 2023
|
53
|
|
|
Total
|
$
|
78
|
|
($ in millions)
|
Three Months
Ended March 31 |
||||||
Increase (decrease) in expense
|
2015
|
|
2014
|
||||
|
|
||||||
Change in fair value:
|
|
|
|
||||
PPG stock
|
$
|
(8
|
)
|
|
$
|
5
|
|
Equity forward instrument
|
7
|
|
|
(6
|
)
|
||
Accretion of asbestos liability
|
4
|
|
|
4
|
|
||
Asbestos settlement – net expense
|
$
|
3
|
|
|
$
|
3
|
|
Environmental Reserves
|
||||||||
($ in Millions)
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
New Jersey Chrome
|
|
$
|
179
|
|
|
$
|
211
|
|
Other contingencies
|
|
108
|
|
|
106
|
|
||
Total
|
|
$
|
287
|
|
|
$
|
317
|
|
Current portion
|
|
$
|
133
|
|
|
$
|
141
|
|
Pre-tax charges against income for environmental remediation
|
||||||||
|
|
Three Months Ended March 31
|
||||||
($ in Millions)
|
|
2015
|
|
2014
|
||||
Legacy glass, chemical and coatings sites
|
|
$
|
4
|
|
|
$
|
2
|
|
Total
|
|
$
|
4
|
|
|
$
|
2
|
|
Cash outlays for environmental spending
|
|
$
|
36
|
|
|
$
|
27
|
|
16.
|
Reportable Business Segment Information
|
|
Three Months
Ended March 31 |
||||||
|
2015
|
|
2014
|
||||
($ in millions)
|
|
||||||
Net sales:
|
|
|
|
||||
Performance Coatings
|
$
|
2,055
|
|
|
$
|
2,007
|
|
Industrial Coatings
|
1,340
|
|
|
1,363
|
|
||
Glass
|
267
|
|
|
266
|
|
||
Total (a)
|
$
|
3,662
|
|
|
$
|
3,636
|
|
Segment income:
|
|
|
|
||||
Performance Coatings
|
$
|
262
|
|
|
$
|
248
|
|
Industrial Coatings
|
244
|
|
|
231
|
|
||
Glass
|
30
|
|
|
4
|
|
||
Total
|
536
|
|
|
483
|
|
||
Legacy items (b)
|
(12
|
)
|
|
(10
|
)
|
||
Transaction-related costs (c)
|
(9
|
)
|
|
(3
|
)
|
||
Interest expense, net of interest income
|
(18
|
)
|
|
(35
|
)
|
||
Other corporate expense
|
(67
|
)
|
|
(63
|
)
|
||
Income from continuing operations before income taxes
|
$
|
430
|
|
|
$
|
372
|
|
(a)
|
Intersegment net sales for the three months ended March 31, 2015 and 2014 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
38%
investment in the former automotive glass and services business.
|
(c)
|
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 disposals not classified as discontinued operations. These costs also include the flow-through cost of sales of the step up to fair value of inventory acquired in acquisitions.
|
17.
|
Subsequent Event
|
|
|
For the three months ended March 31,
|
||||||||||||
|
|
2015
|
2014
|
|
2015
|
2014
|
||||||||
($ in millions, except per share amounts)
|
|
Basic
|
|
Diluted
|
||||||||||
Amounts attributable to PPG:
|
|
|
|
|
|
|
||||||||
Income from continuing operations, net of tax
|
|
$
|
321
|
|
$
|
277
|
|
|
$
|
321
|
|
$
|
277
|
|
Income from discontinued operations, net of tax
|
|
1
|
|
985
|
|
|
1
|
|
985
|
|
||||
Net income (attributable to PPG)
|
|
$
|
322
|
|
$
|
1,262
|
|
|
$
|
322
|
|
$
|
1,262
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding, as reported
|
|
136.6
|
|
139.1
|
|
|
137.8
|
|
140.7
|
|
||||
Weighted-average shares outstanding, pro forma
|
|
273.2
|
|
278.2
|
|
|
275.6
|
|
281.4
|
|
||||
|
|
|
|
|
|
|
||||||||
Earnings per common share - as reported:
|
|
|
|
|
|
|
||||||||
Income from continuing operations, net of tax
|
|
$
|
2.35
|
|
$
|
1.99
|
|
|
$
|
2.33
|
|
$
|
1.97
|
|
Income from discontinued operations, net of tax
|
|
0.01
|
|
7.08
|
|
|
0.01
|
|
7.00
|
|
||||
Net income (attributable to PPG)
|
|
$
|
2.36
|
|
$
|
9.07
|
|
|
$
|
2.34
|
|
$
|
8.97
|
|
Earnings per common share – pro forma:
|
|
|
|
|
|
|
||||||||
Income from continuing operations, net of tax
|
|
$
|
1.17
|
|
$
|
1.00
|
|
|
$
|
1.16
|
|
$
|
0.98
|
|
Income from discontinued operations, net of tax
|
|
0.01
|
|
3.54
|
|
|
0.01
|
|
3.50
|
|
||||
Net income (attributable to PPG)
|
|
$
|
1.18
|
|
$
|
4.54
|
|
|
$
|
1.17
|
|
$
|
4.48
|
|
|
|
|
|
|
|
|
||||||||
Dividends per common share:
|
|
|
|
|
|
|
||||||||
As reported
|
|
$
|
0.67
|
|
$
|
0.61
|
|
|
|
|
||||
Pro forma
|
|
$
|
0.33
|
|
$
|
0.31
|
|
|
|
|
Three months ended March 31, 2015
|
|
|||||||||
($ in millions, except percentages)
|
Income Before Income Taxes
|
|
Tax Expense
|
|
Effective Tax Rate
|
|||||
Effective tax rate, continuing operations
|
$
|
430
|
|
|
$
|
104
|
|
|
24.2
|
%
|
Includes:
|
|
|
|
|
|
|||||
Transaction-related costs
|
9
|
|
|
3
|
|
|
33.3
|
%
|
||
Adjusted effective tax rate, continuing operations
|
$
|
439
|
|
|
$
|
107
|
|
|
24.4
|
%
|
Three months ended March 31, 2014
|
|
|||||||||
($ in millions, except percentages)
|
Income Before Income Taxes
|
|
Tax Expense
|
|
Effective Tax Rate
|
|||||
Effective tax rate, continuing operations
|
$
|
372
|
|
|
$
|
89
|
|
|
23.9
|
%
|
Includes:
|
|
|
|
|
|
|||||
Transaction-related costs
|
3
|
|
|
1
|
|
|
37.6
|
%
|
||
Adjusted effective tax rate, continuing operations
|
$
|
375
|
|
|
$
|
90
|
|
|
24.0
|
%
|
|
|
|
|
||||
Three Months ended March 31, 2015
|
Continuing Operations
|
||||||
($ in millions, except per share amounts)
|
Net Income
|
|
EPS
|
||||
Net income (attributable to PPG)
|
|
$321
|
|
|
|
$2.33
|
|
Net income (attributable to PPG) includes (after-tax):
|
|
|
|
||||
Transaction-related costs
|
6
|
|
|
0.04
|
|
||
Adjusted net income
|
|
$327
|
|
|
|
$2.37
|
|
|
|
|
|
||||
Three Months ended March 31, 2014
|
Continuing Operations
|
||||||
($ in millions, except per share amounts)
|
Net Income
|
|
EPS
|
||||
Net income (attributable to PPG)
|
|
$277
|
|
|
|
$1.97
|
|
Net income (attributable to PPG) includes (after-tax):
|
|
|
|
||||
Transaction-related costs
|
2
|
|
|
0.01
|
|
||
Adjusted net income
|
|
$279
|
|
|
|
$1.98
|
|
•
|
Capital expenditures, excluding acquisitions, of
$72 million
, or about
2%
of sales.
|
•
|
Voluntary contributions to PPG's U.S. and non-U.S. pension plans of $250 million and $26 million, respectively.
|
•
|
Cash dividends paid totaled
$91 million
.
|
•
|
Cash spent on share repurchases totaled $200 million.
|
(Millions, except percentages)
|
March 31, 2015
|
|
December 31,
2014 |
|
March 31, 2014
|
|
||||||
Trade Receivables, Net
|
|
$2,625
|
|
|
|
$2,366
|
|
|
|
$2,669
|
|
|
Inventories, FIFO
|
2,059
|
|
|
2,007
|
|
|
2,114
|
|
|
|||
Trade Creditors’ Liabilities
|
1,966
|
|
|
1,919
|
|
|
2,029
|
|
|
|||
Operating Working Capital
|
|
$2,718
|
|
|
|
$2,454
|
|
|
|
$2,754
|
|
|
Operating Working Capital as a % of Sales
|
18.6
|
%
|
|
16.5
|
%
|
|
18.9
|
%
|
|
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 (1) |
|||||
January 2015
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
5,658,286
|
|
February 2015
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
455,646
|
|
|
$
|
235.61
|
|
|
455,646
|
|
|
5,202,640
|
|
March 2015
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
407,200
|
|
|
$
|
228.81
|
|
|
407,200
|
|
|
4,795,440
|
|
Total quarter ended March 31, 2015
|
|
|
|
|
|
|
|
|||||
Repurchase program
|
862,846
|
|
|
$
|
232.40
|
|
|
862,846
|
|
|
4,795,440
|
|
(1)
|
These shares were repurchased under a $2 billion share repurchase program approved in April 2014. The remaining shares that may be purchased under the $2 billion repurchase program have been calculated based upon PPG's closing stock price on the last business day of the respective month. This repurchase program has no expiration date.
|
|
PPG INDUSTRIES, INC.
|
|||
(Registrant)
|
||||
|
||||
Date:
|
April 27, 2015
|
By
|
|
/s/ Frank S. Sklarsky
|
|
Frank S. Sklarsky
Executive Vice President and Chief Financial Officer
(Principal Financial and
Accounting Officer and
Duly Authorized Officer)
|
4.1
|
|
Fifth Supplemental Indenture, dated as of March 13, 2015, between PPG Industries, Inc. and The Bank of New York Mellon Trust Company, N.A., was filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed on March 13, 2015.
|
†12
|
|
Computation of Ratio of Earnings to Fixed Charges for the Three Months Ended March 31, 2015 and for the Five Years Ended December 31, 2014.
|
†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, 2015 and 2014, (ii) the Condensed Consolidated Balance Sheet at March 31, 2015 and December 31, 2014, (iii) the Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2015 and 2014, and (iv) Notes to Condensed Consolidated Financial Statements for the three months ended March 31, 2015.
|
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 |
---|