PPG Reports Fourth Quarter and Full-Year 2016 Financial Results
-
Fourth quarter net sales of $3.5 billion and reported earnings per
diluted share from continuing operations of 29 cents
-
Fourth quarter adjusted earnings per diluted share from continuing
operations of $1.19, up approximately 3 percent including unfavorable
impact from foreign currency translation
-
Initiated new restructuring program targeting $125 million in annual
cost savings, including savings of $40 million to $50 million in 2017
-
Continued portfolio optimization with announced acquisition of two
European architectural coatings businesses along with divestitures of
several non-core glass businesses
-
Achieved top-end of cash deployment target for acquisitions and share
repurchases, deploying over $2.5 billion in 2015-2016 combined
-
Strong financial flexibility remains with cash and short-term
investments totaling approximately $1.9 billion at year-end
PITTSBURGH--(BUSINESS WIRE)--
PPG (NYSE:PPG) today reported fourth quarter 2016 net sales of $3.5
billion, down more than 1 percent versus the prior year. Sales in local
currencies increased by more than 1 percent aided by sales volume growth
approaching 2 percent year-over-year. The net impact from business
portfolio actions contributed less than 1 percent to sales growth as
acquisition-related sales increases modestly exceeded the absence of
sales from the divested European fiber glass business. These aggregate
net sales gains were more than offset by unfavorable foreign currency
translation which reduced net sales by about 3 percent, or approximately
$100 million.
Fourth quarter 2016 reported net income from continuing operations was
$77 million, or 29 cents per diluted share. Adjusted net income from
continuing operations was $313 million, or $1.19 per diluted share.
Adjusted net income excludes after-tax charges totaling $236 million, or
90 cents per diluted share. These after-tax charges include: $146
million for business restructuring; $51 million for increases to legacy
environmental reserves; $23 million for tax true-ups related to asbestos
settlement funding; $5 million for a premium on the early retirement of
debt; and $44 million for the loss on the sale of the European fiber
glass business offset by a $33 million net gain on the disposals of
ownership interests in business affiliates. For the fourth quarter 2016,
the effective tax rate was 42.1 percent and the adjusted effective tax
rate was 24.5 percent.
Fourth quarter 2015 reported net income from continuing operations was
$295 million, or $1.09 per diluted share. Fourth quarter 2015 adjusted
net income from continuing operations was $313 million, or $1.16 per
diluted share and excluded an after-tax charge for transaction-related
costs of $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 effective tax rate was 23.3 percent for the fourth quarter
2015, and the adjusted effective tax rate for the quarter was 24.2
percent.
Financial results from the divested flat glass business are presented as
discontinued operations for all periods, including a fourth quarter 2016
gain of $1.01 per diluted share from the business divestiture.
Historical financial results of the divested fiber glass businesses are
included in the Glass segment.
“We delivered fourth quarter and full-year adjusted
earnings-per-diluted-share growth despite modest and uneven global
economic growth and the impact of significant unfavorable foreign
currency translation,” said Michael H. McGarry, PPG chairman and chief
executive officer. “We achieved these milestones due to improving sales
volumes, continued aggressive cost management and ongoing
earnings-accretive focused cash deployment.
“For the fourth quarter, our adjusted earnings per diluted share
increased by 3 percent, aided by coatings volume growth of nearly 2
percent and despite significant currency translation headwinds,” McGarry
said. “We achieved our highest volume growth in emerging regions, and by
segment our Industrial Coatings grew global volumes by 5 percent with
each business unit realizing similar growth rates. Global sales volumes
declined less than 1 percent in Performance Coatings, as automotive
refinish and architectural coatings growth was more than offset by lower
protective and marine coatings demand stemming from further weakness in
marine ship builds.
“For the full year, in addition to 7 percent adjusted earnings-per-share
growth, we completed a variety of strategic actions to strengthen our
company,” McGarry said. “These actions included continued business
portfolio optimization through several acquisitions and divestitures and
further minimization of legacy risk as we fully funded the Pittsburgh
Corning asbestos trust and completed the annuitization of a large
portion of U.S. and Canadian pension obligations. Additionally, we
continued to invest in new product development and increased our
spending focused on improving our organic growth results.
“Also, we delivered on our cash deployment commitments, achieving the
upper end of our communicated two-year range,” McGarry said. “In 2015
and 2016 combined, we deployed more than $2.5 billion on acquisitions
and share repurchases, including $650 million of share repurchases
during the fourth quarter 2016. Our continued strong cash generation
supported our cash deployment and growth investments for the full year,
and our year-end cash and liquidity position provides us with continued
financial flexibility going forward.
“As we begin 2017, we are operating in an uncertain and evolving
macroeconomic and regulatory environment,” McGarry continued. “We expect
improved momentum in overall global economic growth, including gradually
improving growth rates in developed regions and continuing but uneven
growth in emerging regions,” McGarry said.
“However, the timeline for this growth improvement remains uncertain, so
we are aggressively managing all elements within our control and
recently initiated a new business restructuring program targeting $125
million in annual savings,” McGarry said. “Additionally, we will
continue our growth investments and we have announced targeted
selling-price increases to combat recent inflationary cost pressures.
Finally, we anticipate deploying an additional $2.5 billion to $3.5
billion of cash on acquisitions and share repurchases in years 2017 and
2018 combined, as we remain focused on shareholder value creation,”
McGarry concluded.
PPG reported today the following full-year 2016 approximate uses of
cash: capital spending of $400 million, dividends paid of $415 million,
acquisitions of $350 million, and share repurchases of $1.05 billion.
For the years 2015 and 2016 combined, the company deployed more than
$2.5 billion of cash for acquisitions and share repurchases, achieving
the top end of the previously communicated range. In April 2016, the
company raised the per-share dividend by 11 percent. PPG has paid annual
dividends for 117 consecutive years, including 45 consecutive years of
increased annual payouts.
For the full year 2016, the company generated over $1.2 billion in cash
from operations, a decrease versus the prior year primarily due to the
full funding of the Pittsburgh Corning asbestos trust, which exceeded
$800 million pre-tax. Operating working capital ratios improved by 120
basis points year-over-year, as the company has averaged a more than 100
basis point annual improvement in this metric the past four years. Cash
and short-term investments totaled approximately $1.9 billion, and the
company had $1.9 billion remaining on its current share-repurchase
authorization at year-end 2016.
Fourth Quarter 2016 Reportable Segment Financial Results
-
Performance Coatings segment net sales in the fourth quarter were
$1.98 billion, down $80 million, or less than 4 percent, versus the
prior year. Sales volumes were down less than 1 percent, with
acquisition-related sales providing a minimal benefit. Unfavorable
foreign currency translation reduced segment sales by about 3 percent,
or about $70 million.
Automotive refinish sales grew
organically by a low-single-digit percentage, led by increased demand
in Europe. Aerospace sales in local currencies were consistent with
the prior year, as industry demand growth remains modest. Protective
and marine coatings sales volumes declined by a low-double-digit
percentage year-over-year as growth in protective coatings was more
than offset by further weakness in shipbuilding activity in Asia
Pacific. Architectural coatings – Europe, Middle East and Africa sales
volumes were in line with the prior year, with growth in Europe offset
by lower demand in Africa. Architectural coatings – Americas and Asia
Pacific sales volumes improved by a low-single-digit percentage versus
the prior year. Sales volume growth continued in the U.S. and Canada
company-owned stores network but was offset by weakness in the
independent dealer channel and national retail accounts, and Mexican
growth continued despite strong growth in the prior-year comparable
period.
Performance Coatings segment income for the fourth
quarter 2016 was $239 million, down about 4 percent, or $11 million,
versus the prior year, including unfavorable foreign currency
translation of about $15 million driven primarily by the Mexican peso,
the euro and the British pound. The favorable impact from continued
cost management more than offset the unfavorable impact from modestly
lower sales volumes.
-
Industrial Coatings segment net sales for the fourth quarter were
$1.44 billion, up $66 million, or nearly 5 percent, compared to the
previous year, despite unfavorable foreign currency translation of
more than 2 percent, or approximately $30 million. Sales volumes grew
by about 5 percent, led by strong emerging-region growth in all
businesses. Acquisition-related sales added approximately 3 percent,
or about $40 million.
Automotive original equipment
manufacturer coatings sales volumes grew by a mid-single-digit
percentage versus the prior year, consistent with global industry
growth rates. General industrial coatings and specialty coatings and
materials aggregate sales volumes also grew by a mid-single-digit
percentage, outpacing global industrial production growth for the
fourth consecutive quarter. Packaging coatings sales volumes grew by a
mid- to high-single-digit percentage due to ongoing adoption of PPG’s
new can coating technologies and despite strong growth in the
prior-year comparable period.
Fourth quarter Industrial
Coatings segment income of $236 million was down $4 million, or less
than 2 percent, versus the prior year. Segment income benefited from
higher sales volumes and lower manufacturing costs.
Acquisition-related income also contributed to higher segment income,
but at an expected margin level that is currently below the segment’s
average margin. These increases to segment income were offset by
higher transportation and logistics costs required to meet increasing
customer demand in Asia Pacific, and unfavorable foreign currency
translation of about $10 million driven primarily by the Chinese yuan,
the euro and the Mexican peso.
-
Glass segment net sales for the fourth quarter were $80 million, down
$41 million, or 34 percent, year-over-year primarily due to the
divestiture of the European fiber glass business. Sales volumes for
the remaining North American fiber glass business were down
approximately 3 percent due to the weaker demand for
wind-energy-related products, partly offset by growth in the
construction end-use market. Segment income for the quarter was $12
million, up $1 million versus the prior-year period due to significant
cost-management efforts and despite the absence of the divested fiber
glass business and joint ventures.
Fourth quarter financial
results for the Glass segment consist only of PPG’s North American
fiber glass operations. The sale of the European fiber glass business
was finalized Oct. 1, 2016, and the sale of PPG’s ownership interest
in its two Asian fiber glass joint ventures was finalized Nov. 18,
2016.
-
Corporate expenses for the fourth quarter were $45 million, down $12
million versus the prior year reflecting lower expense for
performance-based compensation. Expenses for the quarter include $8
million pre-tax, or $5 million after-tax, for a premium on the early
retirement of debt that was included in nonrecurring items.
Full-Year 2016 Financial Results
Full-year 2016 net sales from continuing operations were $14.8 billion,
consistent with the prior year including an unfavorable foreign currency
translation impact of nearly 3 percent, or approximately $400 million.
Sales volume growth of 1 percent versus the prior year was supplemented
by acquisition-related sales growth of nearly 2 percent, net of sales
divested with the European fiber glass business.
The company’s 2016 full-year reported net income from continuing
operations was $564 million, or $2.11 per diluted share, versus $1.34
billion, or $4.89 per diluted share, in 2015. Full-year 2016 adjusted
net income from continuing operations was $1.55 billion, or $5.82 per
diluted share, versus $1.49 billion, or $5.43 per diluted share, in
2015, representing an adjusted-earnings-per-diluted-share increase of 7
percent. In 2016, foreign currency translation unfavorably impacted
pre-tax income by approximately $70 million. The effective tax rate from
continuing operations was 29.1 percent for 2016, versus 23.8 percent for
2015, and the adjusted effective tax rate from continuing operations was
24.5 percent for 2016, versus 24.1 percent for 2015.
A detailed reconciliation of the reported to adjusted figures for the
fourth quarter and the full year is included below.
PPG: WE PROTECT AND BEAUTIFY THE WORLD™
At PPG (NYSE:PPG), we work every day to develop and deliver the paints,
coatings and materials that our customers have trusted for more than 130
years. Through dedication and creativity, we solve our customers’
biggest challenges, collaborating closely to find the right path
forward. With headquarters in Pittsburgh, we operate and innovate in
more than 70 countries and reported net sales of $14.8 billion in 2016.
We serve customers in construction, consumer products, industrial and
transportation markets and aftermarkets. To learn more, visit www.ppg.com.
Forward-Looking Statements
Statements contained herein relating to matters that are not historical
facts are forward-looking statements reflecting PPG Industries’ current
view with respect to future events and financial performance, including,
the pace of share repurchase and acquisition spending and any future
restructuring actions. 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 Industries’ operations, as discussed
in the company’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 asbestos
litigation. However, it is not possible to predict or identify all such
factors. Consequently, while the list of factors presented here and in
PPG Industries’ 2015 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
Industries’ consolidated financial condition, results of operations or
liquidity. All information in this release speaks only as of Jan. 19,
2017, and any distribution of this release after that date is not
intended and will not be construed as updating or confirming such
information. PPG Industries undertakes no obligation to update any
forward-looking statement, except as otherwise required by applicable
law.
Regulation G Reconciliation
PPG believes investors’ understanding of the company’s operating
performance is enhanced by the disclosure of earnings per diluted share
from continuing operations adjusted for certain 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 or that are not attributable to our primary operations.
Earnings per diluted share from continuing operations adjusted for these
items is not a recognized financial measure determined in accordance
with U.S. generally accepted accounting principles (GAAP) and should not
be considered a substitute for earnings per diluted share or other
financial measures as computed in accordance with U.S. GAAP. In
addition, earnings per diluted share from continuing operations may not
be comparable to similarly titled measures as reported by other
companies.
| Regulation G Reconciliation - Net Income and Earnings per Diluted
Share |
($ in millions, except per-share amounts)
|
|
|
|
|
|
|
|
|
|
|
| Fourth Quarter |
|
| Fourth Quarter |
|
|
|
| 2016 |
|
| 2015 |
|
|
|
| $ |
|
| EPS |
|
| $ |
|
| EPS |
|
Reported net income from continuing operations
| | |
$
|
77
| |
|
|
$
|
0.29
| | | |
$
|
295
| |
|
|
$
|
1.09
|
|
Transaction-related costs
| | |
—
| | | |
—
| | | |
11
| | | |
0.04
|
|
Business restructuring charge
| | |
146
| | | |
0.55
| | | |
—
| | | |
—
|
|
Environmental remediation charge
| | |
51
| | | |
0.20
| | | |
—
| | | |
—
|
|
Loss on divestiture of European fiber glass business
| | |
44
| | | |
0.17
| | | |
—
| | | |
—
|
|
Net gain on disposals of ownership interests in business affiliates
| | |
(33
|
)
| | |
(0.13
|
)
| | |
—
| | | |
—
|
|
Net tax effect of asbestos settlement trust funding
| | |
23
| | | |
0.09
| | | |
—
| | | |
—
|
|
Premium on early retirement of debt
| | |
5
| | | |
0.02
| | | |
—
| | | |
—
|
|
Equity affiliate debt-refinancing charge
| | |
—
|
|
|
|
—
|
|
|
|
7
|
|
|
|
0.03
|
|
Adjusted net income from continuing operations, excluding
nonrecurring items
|
|
|
$
|
313
|
|
|
|
$
|
1.19
|
|
|
|
$
|
313
|
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
| | | Full Year | | | Full Year |
|
|
|
| 2016 |
|
| 2015 |
|
|
|
| $ |
|
| EPS |
|
| $ |
|
| EPS |
|
Reported net income from continuing operations
| | |
$
|
564
| | | |
$
|
2.11
| | | |
$
|
1,338
| | | |
$
|
4.89
|
|
Transaction-related costs
| | |
6
| | | |
0.03
| | | |
30
| | | |
0.10
|
|
Pension settlement charges
| | |
616
| | | |
2.31
| | | |
5
| | | |
0.02
|
|
Business restructuring charge
| | |
146
| | | |
0.55
| | | |
106
| | | |
0.39
|
|
Environmental remediation charge
| | |
51
| | | |
0.20
| | | |
—
| | | |
—
|
|
Loss on divestiture of European fiber glass business
| | |
44
| | | |
0.17
| | | |
—
| | | |
—
|
|
Net gain on disposals of ownership interests in business affiliates
| | |
(46
|
)
| | |
(0.18
|
)
| | |
—
| | | |
—
|
|
Net tax effect of asbestos settlement trust funding
| | |
151
| | | |
0.57
| | | |
—
| | | |
—
|
|
Premium on early retirement of debt
| | |
5
| | | |
0.02
| | | |
—
| | | |
—
|
|
Asset write-down
| | |
11
| | | |
0.04
| | | |
—
| | | |
—
|
|
Equity affiliate debt-refinancing charge
| | |
—
|
|
|
|
—
|
|
|
|
7
|
|
|
|
0.03
|
|
Adjusted net income from continuing operations, excluding
nonrecurring items
|
|
|
$
|
1,548
|
|
|
|
$
|
5.82
|
|
|
|
$
|
1,486
|
|
|
|
$
|
5.43
|
| | | | | | | | | | | | | | | | | | |
|
|
|
|
|
|
|
|
| Fourth Quarter |
| Fourth Quarter |
|
|
| 2016 |
| 2015 |
| | Income |
| |
| | | Income |
| |
| |
| | Before | | | | | | Before | | | | |
| | Income | | Tax | | Effective | | Income | | Tax | | Effective |
|
|
| Taxes |
| Expense |
| Tax Rate |
| Taxes |
| Expense |
| Tax Rate |
|
Effective tax rate, continuing operations
| |
$
|
140
| | |
$
|
59
| | |
42.1
|
%
| |
$
|
390
| | |
$
|
91
| | |
23.3
|
%
|
|
Transaction-related costs
| |
—
| | |
—
| | |
—
| | |
17
| | |
6
| | |
35.3
|
%
|
|
Business restructuring charge
| |
197
| | |
51
| | |
25.8
|
%
| |
—
| | |
—
| | |
—
| |
|
Environmental remediation charge
| |
82
| | |
31
| | |
37.6
|
%
| |
—
| | |
—
| | |
—
| |
|
Loss on divestiture of European fiber glass business
| |
42
| | |
(2
|
)
| |
(4.8
|
)%
| |
—
| | |
—
| | |
—
| |
|
Net gain on disposals of ownership interests in business affiliates
| |
(49
|
)
| |
(16
|
)
| |
33.4
|
%
| | | | | | |
|
Net tax effect of asbestos settlement trust funding
| |
—
| | |
(23
|
)
| |
N/A
| |
—
| | |
—
| | |
—
| |
|
Premium on early retirement of debt
| |
8
| | |
3
| | |
37.6
|
%
| |
—
| | |
—
| | |
—
| |
|
Equity affiliate debt-refinancing charge
| |
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
4
|
|
|
37.6
|
%
|
|
Adjusted effective tax rate, continuing operations, excluding
nonrecurring items
|
|
$
|
420
|
|
|
$
|
103
|
|
|
24.5
|
%
|
|
$
|
418
|
|
|
$
|
101
|
|
|
24.2
|
%
|
|
|
|
|
|
|
| | Full Year | | Full Year |
|
|
| 2016 |
| 2015 |
| | Income | | | | | | Income | | | | |
| | Before | | | | | | Before | | | | |
| | Income | | Tax | | Effective | | Income | | Tax | | Effective |
|
|
| Taxes |
| Expense |
| Tax Rate |
| Taxes |
| Expense |
| Tax Rate |
|
Effective tax rate, continuing operations
| |
$
|
827
| | |
$
|
241
| | |
29.1
|
%
| |
$
|
1,783
| | |
$
|
424
| | |
23.8
|
%
|
|
Transaction-related costs
| |
9
| | |
3
| | |
37.6
|
%
| |
44
| | |
14
| | |
33.3
|
%
|
|
Pension settlement charges
| |
968
| | |
352
| | |
36.4
|
%
| |
7
| | |
2
| | |
28.6
|
%
|
|
Business restructuring charge
| |
197
| | |
51
| | |
25.8
|
%
| |
140
| | |
34
| | |
24.3
|
%
|
|
Environmental remediation charge
| |
82
| | |
31
| | |
37.6
|
%
| |
—
| | |
—
| | |
—
|
%
|
|
Loss on divestiture of European fiber glass business
| |
42
| | |
(2
|
)
| |
(4.8
|
)%
| |
—
| | |
—
| | |
—
|
%
|
|
Net gain on disposals of ownership interests in business affiliates
| |
(69
|
)
| |
(23
|
)
| |
33.3
|
%
| | | | | | |
|
Net tax effect of asbestos settlement trust funding
| |
—
| | |
(151
|
)
| |
N/A
| |
—
| | |
—
| | |
—
|
%
|
|
Premium on early retirement of debt
| |
8
| | |
3
| | |
37.6
|
%
| | | | | | |
|
Asset write-down
| |
14
| | |
4
| | |
28.6
|
%
| |
—
| | |
—
| | |
—
|
%
|
|
Equity affiliate debt-refinancing charge
| |
—
|
|
|
—
|
|
|
—
|
%
|
|
11
|
|
|
4
|
|
|
37.6
|
%
|
|
Adjusted effective tax rate, continuing operations, excluding
nonrecurring items
|
|
$
|
2,078
|
|
|
$
|
509
|
|
|
24.5
|
%
|
|
$
|
1,985
|
|
|
$
|
478
|
|
|
24.1
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
|
|
| |
|
| |
|
| |
|
| |
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
|
(All amounts in millions except per-share data)
|
|
| | | | | | | |
| | | |
Three Months Ended
| | |
Twelve Months Ended
|
| | | |
December 31
| | |
December 31
|
| | | | 2016 | | | 2015 | | | 2016 | | | 2015 |
| | | | | | | | | | | | |
|
|
Net sales
| | |
$
|
3,497
| | | |
$
|
3,552
| | | |
$
|
14,751
| | | |
$
|
14,766
| |
|
Cost of sales, exclusive of depreciation and amortization
| | | |
1,968
| | | | |
1,997
| | | | |
8,063
| | | | |
8,206
| |
|
Selling, R&D and administrative expenses
| | | |
986
| | | | |
1,031
| | | | |
4,082
| | | | |
4,100
| |
|
Depreciation
| | | |
83
| | | | |
86
| | | | |
341
| | | | |
339
| |
|
Amortization
| | | |
30
| | | | |
33
| | | | |
121
| | | | |
132
| |
|
Interest expense
| | | |
29
| | | | |
31
| | | | |
125
| | | | |
125
| |
|
Interest income
| | | |
(6
|
)
| | | |
(8
|
)
| | | |
(26
|
)
| | | |
(39
|
)
|
|
Asbestos settlement - net
| | | |
-
| | | | |
3
| | | | |
5
| | | | |
12
| |
|
Pension settlement charges
| | | |
-
| | | | |
-
| | | | |
968
| | | | |
-
| |
|
Restructuring charge
| | | |
197
| | | | |
-
| | | | |
197
| | | | |
140
| |
|
Environmental remediation charge
| | | |
82
| | | | |
-
| | | | |
82
| | | | |
-
| |
|
Loss on divestiture of European fiber glass business
| | | |
42
| | | | |
-
| | | | |
42
| | | | |
-
| |
|
Net gain on disposals of ownership interests in business affiliates
| | | |
(49
|
)
| | | |
-
| | | | |
(69
|
)
| | | |
-
| |
|
Other income - net
|
|
|
|
(5
|
)
|
|
|
|
(11
|
)
|
|
|
|
(7
|
)
|
|
|
|
(32
|
)
|
|
Income from continuing operations before income taxes
| | | |
140
| | | | |
390
| | | | |
827
| | | | |
1,783
| |
|
Income tax expense
|
|
|
|
59
|
|
|
|
|
91
|
|
|
|
|
241
|
|
|
|
|
424
|
|
|
Income from continuing operations, net of income taxes
| | | |
81
| | | | |
299
| | | | |
586
| | | | |
1,359
| |
|
Income from discontinued operations, net of income taxes
|
|
|
|
267
|
|
|
|
|
19
|
|
|
|
|
313
|
|
|
|
|
68
|
|
|
Net income attributable to the controlling and noncontrolling
interests
| | | |
348
| | | | |
318
| | | | |
899
| | | | |
1,427
| |
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
|
(4
|
)
|
|
|
|
(4
|
)
|
|
|
|
(22
|
)
|
|
|
|
(21
|
)
|
|
Net income (attributable to PPG)
|
|
|
$
|
344
|
|
|
|
$
|
314
|
|
|
|
$
|
877
|
|
|
|
$
|
1,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to PPG:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
| | |
$
|
77
| | | |
$
|
295
| | | |
$
|
564
| | | |
$
|
1,338
| |
|
|
Income from discontinued operations, net of income tax
|
|
|
|
267
|
|
|
|
|
19
|
|
|
|
|
313
|
|
|
|
|
68
|
|
|
Net income (attributable to PPG)
|
|
|
$
|
344
|
|
|
|
$
|
314
|
|
|
|
$
|
877
|
|
|
|
$
|
1,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share (attributable to PPG)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
| | |
$
|
0.29
| | | |
$
|
1.10
| | | |
$
|
2.12
| | | |
$
|
4.93
| |
|
|
Income from discontinued operations, net of income tax
|
|
|
|
1.02
|
|
|
|
|
0.07
|
|
|
|
|
1.18
|
|
|
|
|
0.25
|
|
|
Net income (attributable to PPG)
|
|
|
$
|
1.31
|
|
|
|
$
|
1.17
|
|
|
|
$
|
3.30
|
|
|
|
$
|
5.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share (attributable to PPG) - assuming dilution
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
| | |
$
|
0.29
| | | |
$
|
1.09
| | | |
$
|
2.11
| | | |
$
|
4.89
| |
|
|
Income from discontinued operations, net of income tax
|
|
|
|
1.01
|
|
|
|
|
0.07
|
|
|
|
|
1.17
|
|
|
|
|
0.25
|
|
|
Net income (attributable to PPG)
|
|
|
$
|
1.30
|
|
|
|
$
|
1.16
|
|
|
|
$
|
3.28
|
|
|
|
$
|
5.14
|
|
| | | | | | | | | | | | |
|
|
Average shares outstanding
|
|
|
|
262.0
|
|
|
|
|
269.2
|
|
|
|
|
265.6
|
|
|
|
|
271.4
|
|
| | | | | | | | | | | | |
|
|
Average shares outstanding - assuming dilution
|
|
|
|
263.7
|
|
|
|
|
271.2
|
|
|
|
|
267.4
|
|
|
|
|
273.6
|
|
| | | | | | | | | | | |
|
|
| |
| |
| |
| |
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
($ in millions)
|
|
| | | | | | | | | |
|
The condensed consolidated statements of operations include the
impact of items that management does not include when evaluating the
performance of the business on a quarterly basis. Income tax expense
on pre-tax income from continuing operations includes tax (costs)
benefits related to the following:
|
| | | | | | | | |
|
| | | | | | | | |
|
| | |
Three Months Ended
| |
Twelve Months Ended
|
| | |
December 31
| |
December 31
|
| | | 2016 | | 2015 | | 2016 | | 2015 |
| | | | | | | | |
|
|
Transaction-related costs
| |
$
|
-
| | |
$
|
6
| |
$
|
3
| | |
$
|
14
|
|
Pension settlement charges
| | |
-
| | | |
-
| | |
352
| | | |
2
|
|
Business restructuring charge
| | |
51
| | | |
-
| | |
51
| | | |
34
|
|
Environmental remediation charge
| | |
31
| | | |
-
| | |
31
| | | |
-
|
|
Loss on divestiture of European fiber glass business
| | |
(2
|
)
| | |
-
| | |
(2
|
)
| | |
-
|
|
Net gain on disposals of ownership interests in business affiliates
| | |
(16
|
)
| | |
-
| | |
(23
|
)
| | |
-
|
|
Net tax effect of asbestos settlement funding
| | |
(23
|
)
| | |
-
| | |
(151
|
)
| | |
-
|
|
Premium on early retirement of debt
| | |
3
| | | |
-
| | |
3
| | | |
-
|
|
Asset write-downs
| | |
-
| | | |
-
| | |
4
| | | |
-
|
|
Equity affiliate debt-refinancing
| |
|
-
|
|
|
|
4
|
|
|
-
|
|
|
|
4
|
|
Total
| |
$
|
44
|
|
|
$
|
10
|
|
$
|
268
|
|
|
$
|
54
|
| | | | | | | | |
|
|
|
| |
|
| |
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEET HIGHLIGHTS (unaudited) |
|
($ in millions)
|
| | | | | | |
|
| | | |
December 31
| | |
December 31
|
| | | | 2016 | | | 2015 (a) |
|
Current assets:
| | | | | | |
|
Cash and cash equivalents
| | |
$
|
1,820
| | |
$
|
1,311
| |
|
Short-term investments
| | | |
43
| | | |
144
| |
|
Receivables - net
| | | |
2,692
| | | |
2,709
| |
|
Inventories
| | | |
1,546
| | | |
1,659
| |
|
Assets held for sale
| | | |
-
| | | |
285
| |
|
Other
| | |
|
321
|
|
|
|
604
|
|
|
Total current assets
| | |
$
|
6,422
|
|
|
$
|
6,712
|
|
| | | | | | |
|
|
Current liabilities:
| | | | | | |
|
Short-term debt and current portion of long-term debt
| | |
$
|
629
| | |
$
|
281
| |
|
Asbestos settlement
| | | |
-
| | | |
796
| |
|
Accounts payable and accrued liabilities
| | | |
3,554
| | | |
3,419
| |
|
Restructuring reserves
| | | |
101
| | | |
87
| |
|
Liabilities held for sale
| | |
|
-
|
|
|
|
112
|
|
|
Total current liabilities
| | |
$
|
4,284
|
|
|
$
|
4,695
|
|
| | | |
|
|
|
|
|
Long-term debt
| | |
$
|
3,787
|
|
|
$
|
4,026
|
|
| | | | | | |
|
|
(a)
|
Assets and liabilities of PPG's flat glass business were classified
as held for sale for December 31, 2015. The business was sold on
October 1, 2016.
|
| | | |
|
|
|
| |
|
| |
| PPG OPERATING METRICS (unaudited) |
|
($ in millions)
|
| | | | | | |
|
| | | |
December 31
| | |
December 31
|
| | | | 2016 | | | 2015 (b) |
| | | | | | |
|
|
Operating Working Capital (a)
| | |
$
|
2,050
| | | |
$
|
2,260
| |
|
As a percent of quarter sales, annualized
| | | |
14.7
|
%
| | | |
15.9
|
%
|
| | | | | | |
|
|
(a)
|
Operating working capital includes: (1) receivables from customers,
net of allowance for doubtful accounts, (2) FIFO inventories and (3)
trade liabilities.
|
|
(b)
|
Period excludes the working capital components of the flat glass
business which have been recast as Assets and Liabilities held for
sale.
|
|
|
|
|
| |
|
| |
|
| |
|
| |
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONSOLIDATED BUSINESS SEGMENT INFORMATION (unaudited) |
|
($ in millions)
|
|
| | | | | | | |
| | | |
Three Months Ended
| | |
Twelve Months Ended
|
| | | |
December 31
| | |
December 31
|
| | | | 2016 | | | 2015 | | | 2016 | | | 2015 |
|
Net sales
| | | | | | | | | | | | |
|
Performance Coatings
| | |
$
|
1,980
| | | |
$
|
2,060
| | | |
$
|
8,580
| | | |
$
|
8,765
| |
|
Industrial Coatings
| | | |
1,437
| | | | |
1,371
| | | | |
5,690
| | | | |
5,476
| |
|
Glass
| | |
|
80
|
|
|
|
|
121
|
|
|
|
|
481
|
|
|
|
|
525
|
|
|
Total
| | |
$
|
3,497
|
|
|
|
$
|
3,552
|
|
|
|
$
|
14,751
|
|
|
|
$
|
14,766
|
|
| | | | | | | | | | | | |
|
|
Segment income
| | | | | | | | | | | | |
|
Performance Coatings
| | |
$
|
239
| | | |
$
|
250
| | | |
$
|
1,314
| | | |
$
|
1,302
| |
|
Industrial Coatings
| | | |
236
| | | | |
240
| | | | |
1,042
| | | | |
985
| |
|
Glass
| | |
|
12
|
|
|
|
|
11
|
|
|
|
|
53
|
|
|
|
|
38
|
|
|
Total
| | | |
487
| | | | |
501
| | | | |
2,409
| | | | |
2,325
| |
| | | | | | | | | | | | |
|
|
Items not allocated to segments
| | | | | | | | | | | | |
|
Corporate (Note A)
| | | |
(45
|
)
| | | |
(57
|
)
| | | |
(207
|
)
| | | |
(221
|
)
|
|
Interest expense, net of interest income
| | | |
(23
|
)
| | | |
(23
|
)
| | | |
(99
|
)
| | | |
(86
|
)
|
|
Legacy (Note B)
| | | | | | | | | | | | |
|
Environmental remediation charge
| | | |
(82
|
)
| | | |
-
| | | | |
(82
|
)
| | | |
-
| |
|
Equity affiliate debt refinancing charge
| | | |
-
| | | | |
(11
|
)
| | | |
-
| | | | |
(11
|
)
|
|
Other legacy
| | | |
(7
|
)
| | | |
(3
|
)
| | | |
(33
|
)
| | | |
(40
|
)
|
|
Transaction-related costs
| | | |
-
| | | | |
(17
|
)
| | | |
(9
|
)
| | | |
(44
|
)
|
|
Pension settlement charges
| | | |
-
| | | | |
-
| | | | |
(968
|
)
| | | |
-
| |
|
Business restructuring charge
| | | |
(197
|
)
| | | |
-
| | | | |
(197
|
)
| | | |
(140
|
)
|
|
Loss on divestiture of European fiber glass business
| | | |
(42
|
)
| | | |
-
| | | | |
(42
|
)
| | | |
-
| |
|
Net gain on disposals of ownership interests in business affiliates
| | | |
49
| | | | |
-
| | | | |
69
| | | | |
-
| |
|
Asset write-downs
| | |
|
-
|
|
|
|
|
-
|
|
|
|
|
(14
|
)
|
|
|
|
-
|
|
Income before income taxes
|
|
|
$
|
140
|
|
|
|
$
|
390
|
|
|
|
$
|
827
|
|
|
|
$
|
1,783
|
|
|
|
Note A:
|
|
|
Corporate items include a pre-tax premium of $8 million paid on the
early retirement of debt for the three and twelve months ended
December 31, 2016.
|
|
Note 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 other charges which are not
associated with PPG's current business portfolio, including the
impact of the asbestos settlement. Until April 2016, legacy items
also include equity earnings from PPG’s minority investment in
Pittsburgh Glass Works, LLC.
|
|
|
We protect and beautify the world is a trademark and the PPG
Logo is a registered trademark of PPG Industries Ohio Inc.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170119005547/en/
PPG Media Contact:
Mark Silvey
Corporate Communications
+1-412-434-3046
silvey@ppg.com
or
PPG
Investor Contact:
Scott Minder
Investor Relations
+1-412-434-3466
sminder@ppg.com
investor.ppg.com
Source: PPG