-
Fourth quarter net sales increased 7 percent in local currencies
-
Quarterly sales volumes up nearly 2 percent, led by gains in Europe
and Asia
-
Record fourth quarter adjusted earnings per diluted share of $1.23, up
17 percent year-over-year despite unfavorable impact from foreign
currency translation
-
Full-year cash deployment of $1.15 billion including business
acquisitions of over $400 million and share repurchases of $750 million
-
Full-year net sales of $15.3 billion; sales up more than 7 percent
year-over-year in local currencies
-
Record full-year adjusted earnings per diluted share from continuing
operations of $5.69, up 17 percent year-over-year
-
Cash and short-term investments totaling $1.5 billion at year-end
PITTSBURGH--(BUSINESS WIRE)--Jan. 21, 2016--
PPG Industries (NYSE:PPG) today reported fourth quarter 2015 net sales
from continuing operations of $3.7 billion, consistent with the prior
year. Net sales in local currencies grew 7 percent year-over-year, with
acquisition-related sales adding 5 percent and sales volume growth
contributing nearly 2 percent. Unfavorable foreign currency translation
impacted net sales by 7 percent, or about $250 million.
Fourth quarter 2015 reported net income from continuing operations was
$314 million, or $1.16 per diluted share. Fourth quarter 2015 adjusted
net income from continuing operations was $332 million, or $1.23 per
diluted share. Adjusted net income excludes an after-tax charge for
transaction-related costs totaling $11 million, or 4 cents per diluted
share, and an equity affiliate debt-refinancing charge of $7 million, or
3 cents per diluted share. The adjusted effective tax rate for the
quarter was 24.5 percent.
Fourth quarter 2014 reported net income and earnings per diluted share
from continuing operations were $86 million and 31 cents, respectively.
Fourth quarter 2014 adjusted net income from continuing operations of
$293 million, or $1.05 per diluted share, excluded after-tax charges of
$200 million, or 72 cents per diluted share, for debt refinancing, and
$36 million or 13 cents per diluted share, for transaction-related
costs, primarily for the Comex acquisition, partially offset by a tax
benefit of $29 million, or 11 cents per diluted share, from a favorable
ruling on a prior-year tax matter. The adjusted effective tax rate for
the prior-year quarter was 23.5 percent.
“We once again delivered strong financial performance in the fourth
quarter and for the full year of 2015,” said Michael H. McGarry, PPG
president and chief executive officer. “Results improved despite the
persistent, unfavorable impact of weaker foreign currencies, which were
more than offset by benefits from our earnings-accretive cash
deployment, improving sales volumes and our unwavering focus on costs.
“For the fourth quarter, our adjusted earnings per diluted share from
continuing operations increased 17 percent, supported by higher earnings
in each reporting segment,” McGarry said. “While overall global economic
demand remained mixed in the quarter, our sales volumes grew about 2
percent, which is our highest year-over-year volume growth in any
quarter of 2015.
“This solid volume growth stemmed from our ability to continue to grow
share of wallet through customers’ adoption of new or leading PPG
technologies. In addition, we benefited from broadening improvement in
European demand, as our volumes in this region steadily improved each
quarter during the year. We also returned to a solid mid-single-digit
percentage growth rate in Asia, while in the Americas results were mixed
by country but consistent with the prior year,” McGarry said.
“Our Industrial Coatings segment led the sales volume growth with a
mid-single-digit percentage improvement. This included continued
above-market performance in automotive OEM and packaging coatings,
supplemented by gains in our general industrial and our specialty
coatings and materials businesses, which had experienced volume declines
in the previous two quarters. In the Performance Coatings segment, sales
volumes grew in automotive refinish, protective and marine coatings, and
architectural coatings EMEA, while we experienced weaker architectural
coatings demand in Canada and lower aerospace coatings volumes in
relation to strong growth in the prior-year period,” McGarry said.
“Over the course of the year, we continued to execute on our strategic
objectives, including accretive expansion of our coatings portfolio with
synergies realized from the successful integration of our Comex
acquisition, along with the completion of six other acquisitions,”
McGarry said. “Additionally, we maintained our heritage of returning
cash to shareholders, with $1.1 billion returned during the year through
dividends and share repurchases.”
In April, the company raised the per-share dividend by 7 percent. PPG
has paid annual dividends for 116 consecutive years, including 44
consecutive years of increased annual per-share payouts.
“As we enter 2016, we anticipate global economic growth will continue,
but at a varied pace and mixed by major economy. In the Asia Pacific
region, growth will likely remain uneven through the year but solid on a
full-year basis. The primary driver for this growth is increased
consumer spending, which is beneficial to PPG as this affects the
majority of our products sold in the region,” McGarry said.
“Economic expansion in North America is likely to continue at a modest
pace, comparable to this past year, supported by multiple sectors,”
McGarry said. “Also, we expect the European economies to build on the
broadening growth rates achieved in 2015, which will be favorable to PPG
given about 30 percent of our sales are in that region and we have
substantially reduced our cost structure there.
“From a PPG perspective, we remain focused on delivering higher organic
growth, including continued commercialization of our innovative,
industry-leading coatings technologies. Also, we will continue to be
aggressive on cost and productivity initiatives. Finally, our balance
sheet remains strong, and we intend to continue to create shareholder
value through earnings-accretive cash deployment,” McGarry concluded.
PPG reiterated today that it is on pace to deploy $2.0 billion to $2.5
billion of cash, in years 2015 and 2016 combined, on acquisitions and
share repurchases. The company reported that it generated over $1.8
billion of cash from continuing operations in 2015 and that its cash and
short-term investments totaled $1.5 billion at year-end. PPG also
reported approximate full-year 2015 cash uses as follows: $475 million
for capital spending, $385 million for dividends paid, over $400 million
for acquisitions (purchase price), and $750 million for share
repurchases totaling approximately 7.0 million shares.
Fourth Quarter 2015 Reportable Segment Financial Results
-
Performance Coatings segment fourth quarter net sales were $2.06
billion, down $31 million, or about 2 percent, versus the prior-year
period. Sales in local currencies were up 6 percent, excluding an
unfavorable foreign currency translation impact of 8 percent.
Acquisition-related sales totaled about $120 million, including one
month of Comex sales stemming from the November 2014 acquisition.
Organic growth continued in automotive refinish coatings, reflecting
increased end-use market demand, particularly in Asia. Excluding the
impact of foreign currency translation and acquisitions, architectural
coatings Americas and Asia Pacific sales were flat, with higher
organic sales in Mexico and the U.S. offset by weaker demand in
Canada, Brazil and China. Architectural coatings EMEA (Europe, Middle
East and Africa) sales volumes increased by a low-single-digit
percentage versus the prior-year period, as demand in the region
continued to improve but remained uneven by country. Aggregate
protective and marine coatings sales volumes improved by a
mid-single-digit percentage, aided by protective coatings, which
included the benefit of Comex-related sales synergies. Aerospace
coatings sales volumes declined primarily due to strong growth in the
prior-year period and customer order patterns. Segment income of $250
million was up $11 million, or 5 percent. Segment income benefited
from acquisition-related earnings, primarily from Comex, and lower
costs, including benefits from acquisition-related synergies.
Unfavorable foreign currency translation impacted segment income by
about $15 million.
-
Industrial Coatings segment fourth quarter net sales were $1.37
billion, increasing $27 million, or 2 percent, over the prior year.
Results included sales volume growth of 4 percent and
acquisition-related sales growth of 6 percent partially offset by an
unfavorable foreign currency translation impact of 7 percent.
Automotive original equipment manufacturer (OEM) coatings delivered
higher sales volumes, growing in aggregate by a mid-single-digit
percentage, which exceeded the global industry growth rate of about 4
percent. The industrial coatings and specialty coatings and materials
businesses delivered higher year-over-year growth following two
consecutive quarters of sales volume declines, with contributions
across all major regions led by Europe and Asia. Packaging coatings
sales volumes grew by a mid-single-digit percentage, aided by
new-technology-related customer conversions. Total segment income for
the quarter was $240 million, up $17 million, or 8 percent,
year-over-year as a result of the increased sales and lower costs,
including initial benefits from business restructuring. Unfavorable
foreign currency translation impacted segment income by approximately
$10 million.
-
Glass segment net sales were $265 million for the quarter, down $7
million, or 3 percent, year-over-year as higher sales volumes and
improved selling prices were offset by unfavorable foreign currency
translation and reduced sales stemming from the 2014 sale of a flat
glass production facility. Solid flat glass demand continued for
value-added products serving residential and non-residential end-use
markets. Fiber glass sales volumes also increased, as higher U.S.
demand offset lower activity in Europe. Segment income was $38
million, up $5 million versus the prior year, driven by improved
organic sales that were partially offset by weak manufacturing cost
performance related to the Fresno, California, flat glass facility,
which is scheduled to undergo a major repair project in the first
quarter 2016.
Full-Year 2015 Financial Results
Full-year 2015 net sales from continuing operations were $15.3 billion,
consistent with the prior year. Acquisition-related sales contributed 6
percent year-over-year, supplementing sales volume growth of 1 percent,
which offset an unfavorable foreign currency translation impact of 7
percent. The company’s 2015 full-year reported net income from
continuing operations was $1.41 billion, or $5.14 per diluted share,
versus $1.13 billion, or $4.05 per diluted share, in 2014. Full-year
2015 adjusted net income from continuing operations was $1.56 billion,
or $5.69 per diluted share, versus $1.36 billion, or $4.88 per diluted
share, in 2014, representing an adjusted earnings per diluted share
increase of 17 percent. In 2015, foreign currency translation
unfavorably impacted sales by $1.1 billion and pre-tax income by
approximately $120 million. The adjusted effective tax rate for 2015 was
24.5 percent, versus 23.9 percent for 2014.
A detailed reconciliation of the reported adjusted figures for the
fourth quarter and full year is included below.
PPG: BRINGING INNOVATION TO THE SURFACE.™
PPG Industries' vision is to be the world’s leading coatings company by
consistently delivering high-quality, innovative and sustainable
solutions that customers trust to protect and beautify their products
and surroundings. Through leadership in innovation, sustainability and
color, PPG provides added value to customers in construction, consumer
products, industrial and transportation markets and aftermarkets to
enhance more surfaces in more ways than does any other company. Founded
in 1883, PPG has global headquarters in Pittsburgh and operates in more
than 70 countries around the world. Reported net sales in 2015 were
$15.3 billion. PPG shares are traded on the New York Stock Exchange
(symbol: PPG). For more information, visit www.ppg.com
and follow @PPGIndustries
on Twitter.
Additional Information
PPG will provide detailed commentary regarding its financial
performance, including presentation-slide content, on the PPG
Investor Center at www.ppg.com at 1 p.m. ET today, Jan. 21. The
company will hold a conference call to review its fourth quarter and
full-year 2015 financial performance today at 2 p.m. ET. Participants
can ask to join the PPG Industries earnings call at these dial-in
numbers: in the United States, 866-777-2509; international,
+1-412-317-5413. The conference call also will be available in
listen-only mode via Internet broadcast from the PPG
Investor Center at www.ppg.com (Windows Media Player). A telephone
replay will be available today, Jan. 21, beginning at approximately 4:30
p.m. ET, through Feb. 5, at 11:59 p.m. ET. The dial-in numbers for the
replay are: in the United States, 877-344-7529; international,
+1-412-317-0088; passcode 10078386. A Web replay also will be available
on the PPG
Investor Center at www.ppg.com, beginning at approximately 4:30 p.m.
ET today, Jan. 21, 2016, through Thursday, Jan. 19, 2017.
Forward-Looking Statements
Statements contained herein relating to matters that are not historical
facts are forward-looking statements reflecting PPG’s current view with
respect to future events and financial performance. These matters within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
involve risks and uncertainties that may affect PPG’s operations, as
discussed in PPG’s filings with the Securities and Exchange Commission
pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act, and the
rules and regulations promulgated thereunder. Accordingly, many factors
could cause actual results to differ materially from the forward-looking
statements contained herein. Such factors include global economic
conditions, increasing price and product competition by foreign and
domestic competitors, fluctuations in cost and availability of raw
materials, the ability to maintain favorable supplier relationships and
arrangements, the timing of realization of anticipated cost savings from
restructuring initiatives, difficulties in integrating acquired
businesses and achieving expected synergies therefrom, economic and
political conditions in international markets, the ability to penetrate
existing, developing and emerging foreign and domestic markets, foreign
exchange rates and fluctuations in such rates, fluctuations in tax
rates, the impact of future legislation, the impact of environmental
regulations, unexpected business disruptions, and the unpredictability
of existing and possible future litigation, including litigation that
could result if the asbestos settlement discussed in PPG’s filings with
the Securities and Exchange Commission does not become effective.
However, it is not possible to predict or identify all such factors.
Consequently, while the list of factors presented here and in PPG’s 2014
Form 10-K are considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements. Consequences
of material differences in results compared with those anticipated in
the forward-looking statements could include, among other things, lower
sales or earnings, business disruption, operational problems, financial
loss, legal liability to third parties and similar risks, any of which
could have a material adverse effect on PPG’s consolidated financial
condition, results of operations or liquidity. All information in this
presentation speaks only as of January 21, 2016, and any distribution of
this presentation after that date is not intended and will not be
construed as updating or confirming such information. PPG undertakes no
obligation to update any forward-looking statement, except as otherwise
required by applicable law.
Regulation G Reconciliation
PPG Industries believes investors' understanding of the company's
operating performance is enhanced by the disclosure of net income and
earnings per diluted share adjusted for nonrecurring charges. PPG's
management considers this information useful in providing insight into
the company’s ongoing operating performance because it excludes the
impact of items that cannot reasonably be expected to recur on a
quarterly basis. Net income and earnings per diluted share adjusted for
these items are not recognized financial measures determined in
accordance with U.S. generally accepted accounting principles (GAAP) and
should not be considered a substitute for net income or earnings per
diluted share or other financial measures as computed in accordance with
U.S. GAAP. In addition, adjusted net income and earnings per diluted
share may not be comparable to similarly titled measures as reported by
other companies.
The following is a reconciliation of reported and adjusted net income
and earnings per diluted share for the fourth quarter and full year and
a reconciliation of the tax rate for the full year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulation G Reconciliation – Net Income and Earnings per Diluted
Share
|
|
($ in millions, except per-share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
|
|
Fourth Quarter
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
EPS
|
|
|
|
|
$
|
|
|
|
EPS
|
|
Reported net income from continuing operations
|
|
|
|
|
|
|
|
$
|
314
|
|
|
|
$
|
1.16
|
|
|
|
|
$
|
86
|
|
|
|
$
|
0.31
|
|
|
Debt-refinancing charge
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
200
|
|
|
|
|
0.72
|
|
|
Transaction-related costs
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
0.04
|
|
|
|
|
|
36
|
|
|
|
|
0.13
|
|
|
Equity affiliate debt-refinancing charge
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
0.03
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Favorable foreign-tax ruling
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(29
|
)
|
|
|
|
(0.11
|
)
|
|
Adjusted, excluding nonrecurring items
|
|
|
|
|
|
|
|
$
|
332
|
|
|
|
$
|
1.23
|
|
|
|
|
$
|
293
|
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-Year
|
|
|
|
Full-Year
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
EPS
|
|
|
|
|
$
|
|
|
|
EPS
|
|
Reported net income from continuing operations
|
|
|
|
|
|
|
|
$
|
1,405
|
|
|
|
$
|
5.14
|
|
|
|
|
$
|
1,133
|
|
|
|
$
|
4.05
|
|
|
Debt-refinancing charge
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
200
|
|
|
|
|
0.72
|
|
|
Increase to legacy environmental reserves
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
86
|
|
|
|
|
0.30
|
|
|
Business-restructuring charge
|
|
|
|
|
|
|
|
|
106
|
|
|
|
|
0.39
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Transaction-related costs
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
0.11
|
|
|
|
|
|
42
|
|
|
|
|
0.16
|
|
|
Pension settlement costs
|
|
|
|
|
|
|
|
|
5
|
|
|
|
|
0.02
|
|
|
|
|
|
5
|
|
|
|
|
0.02
|
|
|
Equity affiliate debt-refinancing charge
|
|
|
|
|
|
|
|
|
7
|
|
|
|
|
0.03
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Favorable foreign-tax ruling
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(29
|
)
|
|
|
|
(0.11
|
)
|
|
Gain on asset dispositions
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(73
|
)
|
|
|
|
(0.26
|
)
|
|
Adjusted, excluding nonrecurring items
|
|
|
|
|
|
|
|
$
|
1,555
|
|
|
|
$
|
5.69
|
|
|
|
|
$
|
1,364
|
|
|
|
$
|
4.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter
|
|
Fourth Quarter
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Income
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
Before
|
|
|
|
|
|
Before
|
|
|
|
|
|
|
|
Income
|
|
Tax
|
|
Effective
|
|
Income
|
|
Tax
|
|
Effective
|
|
|
|
Taxes
|
|
Expense
|
|
Tax Rate
|
|
Taxes
|
|
Expense
|
|
Tax Rate
|
|
Effective tax rate, continuing operations
|
|
$
|
419
|
|
$
|
100
|
|
23.9
|
%
|
|
$
|
21
|
|
|
($71
|
)
|
|
(338.1
|
)
|
%
|
|
Debt-refinancing charge
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
317
|
|
|
117
|
|
|
36.9
|
|
%
|
|
Transaction-related costs
|
|
|
17
|
|
|
6
|
|
35.3
|
%
|
|
|
52
|
|
|
16
|
|
|
30.8
|
|
%
|
|
Equity affiliate debt-refinancing charge
|
|
|
11
|
|
|
4
|
|
37.6
|
%
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
Favorable foreign-tax ruling
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
-
|
|
|
29
|
|
|
-
|
|
|
|
Adjusted effective tax rate, continuing operations
|
|
$
|
447
|
|
$
|
110
|
|
24.5
|
%
|
|
$
|
390
|
|
$
|
91
|
|
|
23.5
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-Year
|
|
Full-Year
|
|
|
|
2015
|
|
2014
|
|
|
|
Income
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
Before
|
|
|
|
|
|
Before
|
|
|
|
|
|
|
|
Income
|
|
Tax
|
|
Effective
|
|
Income
|
|
Tax
|
|
Effective
|
|
|
|
Taxes
|
|
Expense
|
|
Tax Rate
|
|
Taxes
|
|
Expense
|
|
Tax Rate
|
|
Effective tax rate, continuing operations
|
|
$
|
1,882
|
|
$
|
456
|
|
24.2
|
%
|
|
$
|
1,416
|
|
|
$
|
259
|
|
|
18.3
|
%
|
|
Debt-refinancing charge
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
317
|
|
|
|
117
|
|
|
36.9
|
%
|
|
Increase to legacy environmental reserves
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
138
|
|
|
|
52
|
|
|
37.7
|
%
|
|
Business-restructuring charge
|
|
|
140
|
|
|
34
|
|
24.3
|
%
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
Transaction-related costs
|
|
|
48
|
|
|
16
|
|
33.3
|
%
|
|
|
62
|
|
|
|
20
|
|
|
32.3
|
%
|
|
Pension settlement costs
|
|
|
7
|
|
|
2
|
|
28.6
|
%
|
|
|
7
|
|
|
|
2
|
|
|
28.6
|
%
|
|
Equity affiliate debt-refinancing charge
|
|
|
11
|
|
|
4
|
|
37.6
|
%
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
Favorable foreign-tax ruling
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
-
|
|
|
|
29
|
|
|
-
|
|
|
Gain on asset dispositions
|
|
|
-
|
|
|
-
|
|
-
|
|
|
|
(116
|
)
|
|
|
(43
|
)
|
|
37.1
|
%
|
|
Adjusted effective tax rate, continuing operations
|
|
$
|
2,088
|
|
$
|
512
|
|
24.5
|
%
|
|
$
|
1,824
|
|
|
$
|
436
|
|
|
23.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPG INDUSTRIES AND CONSOLIDATED SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
CONDENSED STATEMENTS OF OPERATIONS (unaudited)
|
|
|
|
|
|
|
|
|
|
(All amounts in millions except per-share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
|
|
December 31
|
|
December 31
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,696
|
|
|
$
|
3,707
|
|
|
$
|
15,330
|
|
|
$
|
15,360
|
|
|
Cost of sales, exclusive of depreciation and amortization
|
|
|
2,093
|
|
|
|
2,165
|
|
|
|
8,591
|
|
|
|
8,791
|
|
|
Selling, R&D and administrative expenses
|
|
|
1,047
|
|
|
|
1,058
|
|
|
|
4,165
|
|
|
|
4,250
|
|
|
Depreciation
|
|
|
92
|
|
|
|
90
|
|
|
|
363
|
|
|
|
350
|
|
|
Amortization
|
|
|
33
|
|
|
|
33
|
|
|
|
132
|
|
|
|
126
|
|
|
Interest expense (Note A)
|
|
|
32
|
|
|
|
45
|
|
|
|
126
|
|
|
|
187
|
|
|
Interest income
|
|
|
(9
|
)
|
|
|
(12
|
)
|
|
|
(40
|
)
|
|
|
(50
|
)
|
|
Restructuring charge
|
|
|
-
|
|
|
|
-
|
|
|
|
140
|
|
|
|
-
|
|
|
Gain on asset dispositions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(116
|
)
|
|
Debt refinancing charge
|
|
|
-
|
|
|
|
317
|
|
|
|
-
|
|
|
|
317
|
|
|
Environmental remediation charge
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
138
|
|
|
Asbestos settlement - net
|
|
|
3
|
|
|
|
3
|
|
|
|
12
|
|
|
|
12
|
|
|
Other income - net
|
|
|
(14
|
)
|
|
|
(13
|
)
|
|
|
(41
|
)
|
|
|
(61
|
)
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
|
419
|
|
|
|
21
|
|
|
|
1,882
|
|
|
|
1,416
|
|
|
Income tax expense/(benefit)
|
|
|
100
|
|
|
|
(71
|
)
|
|
|
456
|
|
|
|
259
|
|
|
Income from continuing operations, net of income taxes
|
|
|
319
|
|
|
|
92
|
|
|
|
1,426
|
|
|
|
1,157
|
|
|
(Loss)/Income from discontinued operations, net of income taxes
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
1,002
|
|
|
Net income attributable to the controlling and noncontrolling
interests
|
|
|
319
|
|
|
|
89
|
|
|
|
1,427
|
|
|
|
2,159
|
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
|
(21
|
)
|
|
|
(57
|
)
|
|
NET INCOME (ATTRIBUTABLE TO PPG)
|
|
$
|
314
|
|
|
$
|
83
|
|
|
$
|
1,406
|
|
|
$
|
2,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to PPG:
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
|
|
$
|
314
|
|
|
$
|
86
|
|
|
$
|
1,405
|
|
|
$
|
1,133
|
|
|
|
(Loss)/Income from discontinued operations, net of income tax (Note
B)
|
|
|
-
|
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
969
|
|
|
Net income (attributable to PPG)
|
|
$
|
314
|
|
|
$
|
83
|
|
|
$
|
1,406
|
|
|
$
|
2,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share (attributable to PPG)
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
|
|
$
|
1.17
|
|
|
$
|
0.32
|
|
|
$
|
5.18
|
|
|
$
|
4.10
|
|
|
|
(Loss)/Income from discontinued operations, net of income tax
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
-
|
|
|
|
3.50
|
|
|
Net income (attributable to PPG)
|
|
$
|
1.17
|
|
|
$
|
0.31
|
|
|
$
|
5.18
|
|
|
$
|
7.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share (attributable to PPG) - assuming dilution
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
|
|
$
|
1.16
|
|
|
$
|
0.31
|
|
|
$
|
5.14
|
|
|
$
|
4.05
|
|
|
|
(Loss)/Income from discontinued operations, net of income tax
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
-
|
|
|
|
3.47
|
|
|
Net income (attributable to PPG)
|
|
$
|
1.16
|
|
|
$
|
0.30
|
|
|
$
|
5.14
|
|
|
$
|
7.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding
|
|
|
269.2
|
|
|
|
274.6
|
|
|
|
271.4
|
|
|
|
276.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding - assuming dilution
|
|
|
271.2
|
|
|
|
277.6
|
|
|
|
273.6
|
|
|
|
279.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note A:
|
|
|
|
|
|
|
|
|
|
|
Interest expense for the year ended December 31, 2015 is lower than
the comparable prior year period, principally as a result of the
debt refinancing completed in the 4th quarter of 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
Note B:
|
|
|
|
|
|
|
|
|
|
|
(Loss)/Income from discontinued operations, net of tax includes the
historical operating results of PPG's former interest in the
Transitions Optical joint venture and sunlens business that were
sold March 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPG INDUSTRIES AND CONSOLIDATED SUBSIDIARIES
|
|
CONDENSED STATEMENTS OF OPERATIONS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
The condensed statements of operations include the impact of items
that are not expected to recur ("non-recurring items") on a
quarterly basis. The tax benefit related to these items are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
($ in millions)
|
|
December 31
|
|
December 31
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Income tax expense on pre-tax income from continuing operations
includes tax benefits related to the following:
|
|
|
|
|
Transaction-related costs
|
|
$
|
6
|
|
$
|
16
|
|
$
|
16
|
|
$
|
20
|
|
|
|
Business restructuring charge
|
|
|
-
|
|
|
-
|
|
|
34
|
|
|
-
|
|
|
|
Equity affiliate debt refinancing charge
|
|
|
4
|
|
|
-
|
|
|
4
|
|
|
-
|
|
|
|
Pension settlement losses
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
2
|
|
|
|
Gain on asset dispositions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(43
|
)
|
|
|
Increase to legacy environmental reserves
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
52
|
|
|
|
Debt refinancing charge
|
|
|
-
|
|
|
117
|
|
|
-
|
|
|
117
|
|
|
|
Benefit from favorable ruling on prior year tax matter
|
|
|
-
|
|
|
29
|
|
|
-
|
|
|
29
|
|
|
|
Total
|
|
$
|
10
|
|
$
|
162
|
|
$
|
56
|
|
$
|
177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PPG INDUSTRIES AND CONSOLIDATED SUBSIDIARIES
|
|
|
|
|
|
BALANCE SHEET HIGHLIGHTS (unaudited)
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
December 31
|
|
December 31
|
|
|
|
|
|
2015
|
|
2014 (a)
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,311
|
|
|
$
|
686
|
|
|
|
|
Short-term investments
|
|
|
144
|
|
|
|
497
|
|
|
|
|
Receivables - net
|
|
|
2,788
|
|
|
|
2,815
|
|
|
|
|
Inventories
|
|
|
1,705
|
|
|
|
1,825
|
|
|
|
|
Other
|
|
|
606
|
|
|
|
620
|
|
|
|
|
Total current assets
|
|
$
|
6,554
|
|
|
$
|
6,443
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Short-term debt and current portion of long-term debt
|
|
$
|
283
|
|
|
$
|
481
|
|
|
|
|
Asbestos settlement
|
|
|
796
|
|
|
|
821
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
3,527
|
|
|
|
3,573
|
|
|
|
|
Total current liabilities
|
|
$
|
4,606
|
|
|
$
|
4,875
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
$
|
4,042
|
|
|
$
|
3,533
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Certain reclassifications of prior year data have been made to
conform to the current year presentation to reflect the adoption of
accounting standard updates issued in 2015.
|
|
|
|
|
|
|
|
|
|
PPG OPERATING METRICS (unaudited)
|
|
|
|
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
December 31
|
|
December 31
|
|
|
|
|
|
2015
|
|
2014
|
|
Operating Working Capital (a)
|
|
|
|
|
|
|
|
Amount
|
|
$
|
2,341
|
|
|
$
|
2,454
|
|
|
|
|
As a percent of quarter sales, annualized
|
|
|
15.8
|
%
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Operating working capital includes: (1) receivables from customers,
net of allowance for doubtful accounts, (2) inventories and (3)
trade liabilities.
|
|
|
|
|
|
|
|
|
|
|
|
BUSINESS SEGMENT INFORMATION (unaudited)
|
|
|
|
|
|
($ in millions)
|
Three Months Ended
|
Year Ended
|
|
|
|
December 31
|
December 31
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
Performance Coatings
|
$
|
2,060
|
|
$
|
2,091
|
|
$
|
8,765
|
|
$
|
8,698
|
|
|
|
Industrial Coatings
|
|
1,371
|
|
|
1,344
|
|
|
5,476
|
|
|
5,552
|
|
|
|
Glass
|
|
265
|
|
|
272
|
|
|
1,089
|
|
|
1,110
|
|
|
|
TOTAL
|
$
|
3,696
|
|
$
|
3,707
|
|
$
|
15,330
|
|
$
|
15,360
|
|
|
|
|
|
|
|
|
|
Segment income
|
|
|
|
|
|
|
Performance Coatings
|
|
250
|
|
|
239
|
|
|
1,302
|
|
|
1,205
|
|
|
|
Industrial Coatings
|
|
240
|
|
|
223
|
|
|
985
|
|
|
951
|
|
|
|
Glass
|
|
38
|
|
|
33
|
|
|
137
|
|
|
81
|
|
|
|
TOTAL
|
|
528
|
|
|
495
|
|
|
2,424
|
|
|
2,237
|
|
|
|
|
|
|
|
|
|
Items not allocated to segments
|
|
|
|
|
|
|
Interest expense, net of interest income
|
|
(23
|
)
|
|
(33
|
)
|
|
(86
|
)
|
|
(137
|
)
|
|
|
Transaction-related costs
|
|
(17
|
)
|
|
(52
|
)
|
|
(48
|
)
|
|
(62
|
)
|
|
|
Business restructuring charge
|
|
-
|
|
|
-
|
|
|
(140
|
)
|
|
-
|
|
|
|
Debt refinancing charge
|
|
-
|
|
|
(317
|
)
|
|
-
|
|
|
(317
|
)
|
|
|
Legacy (Note A):
|
|
|
|
|
|
|
Environmental remediation charge
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(138
|
)
|
|
|
Gain on asset dispositions
|
|
-
|
|
|
-
|
|
|
-
|
|
|
116
|
|
|
|
Equity affiliate debt refinancing charge
|
|
(11
|
)
|
|
-
|
|
|
(11
|
)
|
|
-
|
|
|
|
Other legacy
|
|
(2
|
)
|
|
(5
|
)
|
|
(34
|
)
|
|
(27
|
)
|
|
|
Corporate
|
|
(56
|
)
|
|
(67
|
)
|
|
(223
|
)
|
|
(256
|
)
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES
|
$
|
419
|
|
$
|
21
|
|
$
|
1,882
|
|
$
|
1,416
|
|
|
|
|
|
|
|
|
|
Note A:
|
|
|
|
|
|
|
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 that are considered to be
unusual or nonrecurring including the earnings impact of the
proposed asbestos settlement. Legacy items also include equity
earnings from PPG's approximately 40 percent investment in the
former automotive glass and services business.
|
|
|
|
Bringing innovation to the surface is a trademark of PPG
Industries Ohio, Inc.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160121005305/en/
Source: PPG Industries
Media:
PPG Corporate Communications
Mark Silvey
412-434-3046
silvey@ppg.com
or
Investors:
PPG
Investor Relations
Scott Minder
412-434-3466
sminder@ppg.com