PPG Reports Second Quarter 2017 Financial Results
-
Net sales of $3.8 billion, up about 1 percent versus prior year
-
Reported earnings per diluted share from continuing operations of $1.95
-
Adjusted earnings per diluted share from continuing operations of
$1.83, up 6 percent versus prior year including unfavorable impact
from foreign currency
-
Initial selling price increases underway to address raw material cost
inflation
-
Aggressive cost management; further benefits from 2016 restructuring
program
-
Minimum of $3.5 billion of earnings-accretive focused cash deployment
targeted in 2017 and 2018 combined
PITTSBURGH--(BUSINESS WIRE)--
PPG (NYSE:PPG) today reported second quarter 2017 net sales of $3.8
billion, up about 1 percent versus the prior year. Net sales in local
currencies grew nearly 2 percent year-over-year, aided by acquisitions.
Selling prices improved slightly versus the prior year and in comparison
to recent sequential quarters, reflecting initial efforts to offset raw
material cost inflation. Aggregate sales volumes were flat
year-over-year with variation by region and business unit. Unfavorable
foreign currency translation impacted net sales by nearly 2 percent, or
about $65 million.
Second quarter 2017 net income from continuing operations was $504
million, or $1.95 per diluted share. Second quarter 2017 adjusted net
income from continuing operations was $472 million, or $1.83 per diluted
share. Adjusted net income excludes an after-tax gain from the sale of
the Mexican Plaka wallboard business of $24 million, or 9 cents per
diluted share; a benefit from a legal settlement of $11 million, or 4
cents per diluted share; and after-tax transaction-related costs of $3
million, or 1 cent per diluted share. The effective tax rate for the
quarter was 24.1 percent, and the adjusted effective tax rate for the
quarter was 24.6 percent.
Second quarter 2016 reported net income from continuing operations was
$339 million, or $1.25 per diluted share. Second quarter 2016 adjusted
net income from continuing operations was $466 million, or $1.73 per
diluted share. Adjusted net income excluded net after-tax charges
totaling $127 million, or 48 cents per diluted share, including: net tax
effect of asbestos settlement funding of $128 million, or 48 cents per
diluted share; an asset write-down of $8 million, or 3 cents per diluted
share; transaction-related costs of $4 million, or 2 cents per diluted
share; and a gain from the sale of the company’s minority ownership
interest in an equity affiliate of $13 million, or 5 cents per diluted
share. The effective tax rate for the quarter was 45.2 percent, and the
adjusted effective tax rate for the quarter was 24.8 percent.
All figures presented for the current and prior year have been recast to
reflect PPG’s former Glass segment as discontinued operations. In the
second half of 2016, PPG sold its flat glass and European fiber glass
businesses and divested its interests in two Asian fiber glass joint
ventures. PPG anticipates the pending sale of its North American fiber
glass business will be finalized in the second half of 2017.
Accordingly, the company expects its effective tax rate on ongoing
earnings from continuing operations will be lower than its prior
forecast and will be between 24.5 and 25.0 percent.
“We achieved higher adjusted earnings per diluted share, increasing 6
percent year-over-year,” said Michael McGarry, PPG chairman and chief
executive officer. “This improvement was despite significant raw
material cost inflation and continued unfavorable foreign currency
translation. We worked to offset these headwinds through aggressive cost
management, including accelerated execution of our restructuring program
announced in 2016, and benefits from our ongoing cash deployment.”
“We are continuing to work on a variety of actions to improve our
organic volume growth rate and are delivering results on various
initiatives. Some highlights include the Industrial Coatings segment
where volumes grew well above industry rates, and in PPG’s company-owned
architectural coatings stores in the U.S., which have posted six
consecutive quarters of improved same store sales. However, aggregate
Performance Coatings segment volumes declined year-over-year. Also,
overall company volumes were flat in the second quarter, which included
the effect of our efforts to raise selling prices resulting in us
turning away certain business. Year-to-date volume growth is about one
percent which is well below our target. This remains a key focus area
which we will continue to address,” McGarry said.
“Looking ahead, overall global economic growth is expected to remain
consistent but modest. Our highest growth rates continue to be in
emerging regions, although these economies have moderated in recent
quarters. We have seen evidence of broadening early economic-cycle
activity in Europe; however, in the U.S. and Canada, growth has become
more industry-specific. Notable and specific to PPG is that we will
reach the anniversary of the significant declines in the marine
new-build industry, which have had an unfavorable impact on our organic
growth rate the past two years. Also, given the significant inflation in
coatings raw material costs, we continue to work with our customers on
selling prices,” McGarry said.
“We expect a higher level of earnings-accretive cash deployment in the
second half of 2017 versus the first half,” McGarry continued. “This
deployment will likely include both acquisitions and share repurchases
and we are resuming share repurchases in the third quarter. We
previously communicated an intent to deploy $2.5 billion to $3.5 billion
of cash on acquisitions and share repurchases in years 2017 and 2018,
and are now targeting the upper-end of that range at a minimum,” McGarry
concluded.
PPG reported today that on June 30, 2017, cash and short-term
investments totaled approximately $1.6 billion and that the company had
approximately $1.7 billion remaining under its current share-repurchase
authorization.
Second Quarter 2017 Reportable Segment Financial Results
-
Performance Coatings segment second quarter net sales were $2.3
billion, down $37 million, or less than 2 percent, versus the
prior-year period. Sales in local currencies increased less than 1
percent year-over-year, primarily due to higher selling prices along
with acquisition-related sales of approximately $20 million. Sales
volumes declined 2 percent versus the prior year, including a modest
unfavorable impact from the Easter holiday shift year-over-year
between the first and second quarters, which affected some businesses
and regions. Unfavorable foreign currency translation reduced net
sales by approximately $40 million, or about 2 percent.
Organic
sales expanded in automotive refinish, led by improved results in
developed regions. Aerospace sales volumes grew slightly
year-over-year marking an improvement versus recent quarters due to
customer demand for PPG products. Quarterly sales volumes declined a
low single-digit percentage in architectural coatings – EMEA (Europe,
Middle East, and Africa) due to fewer selling days in the current year
quarter; however, average sales per available selling day were higher
versus the prior year. Architectural coatings – Americas and Asia
Pacific sales volumes declined a low single-digit percentage. U.S. and
Canada company-owned stores sales volumes grew by a mid-single-digit
percentage, but this growth was countered by continued sluggishness in
the independent dealer channel and mixed demand with national retail
(DIY) customers. Aggregate emerging region (Latin America and
Asia-Pacific) architectural coatings organic sales improved
year-over-year. Marine coatings sales volumes decreased by a
low-double-digit percentage versus the prior year stemming from
significantly lower end-use market demand, which was partially offset
by global protective coatings growth.
Segment income for
the second quarter was $413 million, down $15 million, or about 4
percent, year-over-year, including unfavorable foreign currency
translation of about $10 million primarily due to the Mexican peso,
British pound and euro. Segment income benefited from selling-price
increases and aggressive overhead and manufacturing cost management,
including benefits from business restructuring. These favorable
impacts to segment income were more than offset by significant
inflation in raw material costs and lower sales volumes.
-
Industrial Coatings segment second quarter net sales were $1.51
billion, up $61 million, or more than 4 percent, versus the prior-year
period. Sales volumes increased by about 3 percent and
acquisition-related sales added approximately $65 million, or about 4
percent, versus the prior year. Selling prices were modestly lower
year-over-year despite the effect of initial selling price actions to
address raw material cost inflation. Unfavorable foreign currency
translation of nearly 2 percent reduced net sales by about $25 million.
Automotive
original equipment manufacturer (OEM) coatings sales volumes increased
by a low-single-digit percentage year-over-year, and exceeded global
auto industry production rates which declined slightly versus the
prior year. Aggregate industrial coatings and specialty coatings and
materials sales volumes increased by a mid-single-digit percentage
versus the prior year and outpaced global industrial production growth
rates for the sixth consecutive quarter, as higher sales volumes were
achieved in each major region and in many end-use markets. Packaging
coatings sales volumes were flat year-over-year, reflecting a
comparison to strong high single-digit percentage growth in the
prior-year period.
Segment income for the second quarter
was $264 million, down $28 million, or about 10 percent,
year-over-year. Segment income benefited from the impact of higher
sales volumes, strong cost management, including the benefits from
business restructuring actions, and acquisition-related income and
related synergies. These improvements were more than offset by
increased raw material costs and lower selling prices. Unfavorable
foreign currency translation reduced segment income by $5 million.
-
Corporate costs were $27 million, down $33 million year-over-year
primarily due to lower incentive-related compensation expense. Legacy
income was $5 million versus a $10 million expense in the previous
year due to lower post-employment benefit expense, higher equity
affiliate income, and the absence of Pittsburgh Corning
asbestos-related costs as a result of the final settlement of that
obligation in the prior-year quarter.
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 $14.3 billion in 2016.
We serve customers in construction, consumer products, industrial and
transportation markets and aftermarkets. To learn more, visit www.ppg.com.
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, July 20. The
company will hold a conference call to review its second quarter 2017
financial performance today at 2 p.m. ET. Participants can pre-register
for the conference by navigating to http://dpregister.com/10109461.
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, July 20, beginning at approximately 4:30
p.m. ET, through August 3 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 10109461. 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, July 20, 2017, through July 19, 2018.
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 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’ 2016 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 July 20,
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 and PPG’s effective tax rate 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 and the effective tax rate from continuing
operations 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 earnings per diluted share, the effective tax rate or other
financial measures as computed in accordance with U.S. GAAP. In
addition, earnings per diluted share from continuing operations and the
adjusted effective tax rate 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)
|
|
|
|
|
|
|
|
| Second Quarter
2017 |
| Second Quarter
2016 |
|
|
| $ |
| EPS |
| $ |
| EPS |
|
Reported net income from continuing operations
|
|
$
|
504
| |
|
$
|
1.95
| |
|
$
|
339
| |
|
$
|
1.25
|
|
Transaction-related costs
| |
3
| | |
0.01
| | |
4
| | |
0.02
|
|
Gain from the sale of the Plaka business
| |
(24)
| | |
(0.09)
| | |
—
| | |
—
|
|
Income from a legal settlement
| |
(11)
| | |
(0.04)
| | |
—
| | |
—
|
|
Gain from the sale of an equity affiliate
| |
—
| | |
—
| | |
(13)
| | |
(0.05)
|
|
Net tax effect of asbestos settlement funding
| |
—
| | |
—
| | |
128
| | |
0.48
|
|
Asset write-down
| |
—
|
|
|
—
| | |
8
|
|
|
0.03
|
|
Adjusted net income from continuing operations, excluding
nonrecurring items
|
|
$
|
472
|
|
|
$
|
1.83
|
|
|
$
|
466
|
|
|
$
|
1.73
|
|
|
|
|
|
|
|
|
| Second Quarter
2017 |
| Second Quarter
2016 |
|
|
| Income
Before
Income
Taxes |
| Tax
Expense |
| Effective
Tax Rate |
| Income
Before
Income
Taxes |
| Tax
Expense |
| Effective
Tax Rate |
|
Effective tax rate, continuing operations
|
|
$
|
671
| |
|
$
|
162
| |
|
24.1
|
%
|
|
$
|
630
| |
|
$
|
285
| |
|
45.2
|
%
|
|
Transaction-related costs
| |
5
| | |
2
| | |
37.9
|
%
| |
6
| | |
2
| | |
37.6
|
%
|
|
Gain from the sale of the Plaka business
| |
(25)
| | |
(1)
| | |
3.2
|
%
| |
—
| | |
—
| | |
—
| |
|
Income from a legal settlement
| |
(18)
| | |
(7)
| | |
37.9
|
%
| |
—
| | |
—
| | |
—
| |
|
Gain from the sale of an equity affiliate
| |
—
| | |
—
| | |
—
| | |
(20)
| | |
(7)
| | |
37.6
|
%
|
|
Net tax effect of asbestos settlement funding
| |
—
| | |
—
| | |
—
| | |
—
| | |
(128)
| | |
N/A
| |
|
Asset write-down
| |
—
|
|
|
—
|
|
|
—
|
| |
10
|
|
|
3
|
|
|
25.0
|
%
|
|
Adjusted effective tax rate, continuing operations, excluding
nonrecurring items
|
|
$
|
633
|
|
|
$
|
156
|
|
|
24.6
|
%
|
|
$
|
626
|
|
|
$
|
155
|
|
|
24.8
|
%
|
| | | | | | | | | | | | | | | | | | | | | |
|
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
|
(All amounts in millions except per-share data)
|
|
| |
| |
| |
| | |
Three Months Ended
| |
Six Months Ended
|
| | |
June 30
| |
June 30
|
| | | 2017 |
| 2016 | | 2017 |
| 2016 |
|
Net sales
| |
$
|
3,806
| | |
$
|
3,782
| | |
$
|
7,292
| | |
$
|
7,193
| |
|
Cost of sales, exclusive of depreciation and amortization
| | |
2,082
| | | |
1,988
| | | |
3,987
| | | |
3,805
| |
|
Selling, general and administrative
| | |
865
| | | |
930
| | | |
1,753
| | | |
1,827
| |
|
Research and development - net
| | |
113
| | | |
115
| | | |
223
| | | |
229
| |
|
Depreciation
| | |
81
| | | |
79
| | | |
160
| | | |
158
| |
|
Amortization
| | |
32
| | | |
30
| | | |
63
| | | |
60
| |
|
Interest expense
| | |
26
| | | |
31
| | | |
51
| | | |
62
| |
|
Interest income
| | |
(4
|
)
| | |
(7
|
)
| | |
(8
|
)
| | |
(14
|
)
|
|
Asbestos settlement - net
| | |
-
| | | |
2
| | | |
-
| | | |
5
| |
|
Pension settlement charge
| | |
-
| | | |
-
| | | |
22
| | | |
-
| |
|
Other income - net (Note A)
|
|
|
(60
|
)
|
|
|
(16
|
)
|
|
|
(70
|
)
|
|
|
(13
|
)
|
|
Income from continuing operations before income taxes
| | |
671
| | | |
630
| | | |
1,111
| | | |
1,074
| |
|
Income tax expense
|
|
|
162
|
|
|
|
285
|
|
|
|
269
|
|
|
|
394
|
|
|
Income from continuing operations, net of income taxes
| | |
509
| | | |
345
| | | |
842
| | | |
680
| |
|
(Loss)/Income from discontinued operations, net of income taxes
|
|
|
(3
|
)
|
|
|
31
|
|
|
|
3
|
|
|
|
50
|
|
|
Net income attributable to the controlling and noncontrolling
interests
| | |
506
| | | |
376
| | | |
845
| | | |
730
| |
|
|
Less: Net income attributable to noncontrolling interests
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
|
(10
|
)
|
|
|
(13
|
)
|
|
Net income (attributable to PPG)
|
|
$
|
501
|
|
|
$
|
370
|
|
|
$
|
835
|
|
|
$
|
717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to PPG:
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
| |
$
|
504
| | |
$
|
339
| | |
$
|
832
| | |
$
|
667
| |
|
|
(Loss)/Income from discontinued operations, net of income tax
|
|
|
(3
|
)
|
|
|
31
|
|
|
|
3
|
|
|
|
50
|
|
|
Net income (attributable to PPG)
|
|
$
|
501
|
|
|
$
|
370
|
|
|
$
|
835
|
|
|
$
|
717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share (attributable to PPG)
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of income tax
| |
$
|
1.96
| | |
$
|
1.26
| | |
$
|
3.23
| | |
$
|
2.49
| |
|
|
(Loss)/Income from discontinued operations, net of income tax
|
|
|
(0.01
|
)
|
|
|
0.12
|
|
|
|
0.01
|
|
|
|
0.19
|
|
|
Net income (attributable to PPG)
|
|
$
|
1.95
|
|
|
$
|
1.38
|
|
|
$
|
3.24
|
|
|
$
|
2.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share (attributable to PPG) - assuming dilution
|
|
|
|
|
|
Income from continuing operations, net of income tax
| |
$
|
1.95
| | |
$
|
1.25
| | |
$
|
3.21
| | |
$
|
2.47
| |
|
|
(Loss)/Income from discontinued operations, net of income tax
|
|
|
(0.01
|
)
|
|
|
0.12
|
|
|
|
0.01
|
|
|
|
0.19
|
|
|
Net income (attributable to PPG)
|
|
$
|
1.94
|
|
|
$
|
1.37
|
|
|
$
|
3.22
|
|
|
$
|
2.66
|
|
| | | | | | | | |
|
|
Average shares outstanding
|
|
|
257.1
|
|
|
|
267.2
|
|
|
|
257.4
|
|
|
|
267.4
|
|
| | | | | | | | |
|
|
Average shares outstanding - assuming dilution
|
|
|
259.0
|
|
|
|
269.1
|
|
|
|
259.3
|
|
|
|
269.2
|
|
|
Note A:
|
|
|
Other income during the three and six months ended June 30, 2017
includes a pre-tax gain of $25 million on the sale of the Mexican
Plaka business and income of $18 million from a legal settlement.
|
|
|
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
|
($ 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
(expense)/benefits related to the following:
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
| |
June 30
| |
June 30
|
| | 2017 |
| 2016 | | 2017 |
| 2016 |
|
Transaction-related costs
| |
$
|
2
| | |
$
|
2
| | |
$
|
3
| | |
$
|
3
| |
|
Pension settlement charge
| | |
-
| | | |
-
| | | |
8
| | | |
-
| |
|
Gain from the sale of the Plaka business
| | |
(1
|
)
| | |
-
| | | |
(1
|
)
| | |
-
| |
|
Gain from the sale of an equity affiliate
| | |
-
| | | |
(7
|
)
| | |
-
| | | |
(7
|
)
|
|
Income from a legal settlement
| | |
(7
|
)
| | |
-
| | | |
(7
|
)
| | |
-
| |
|
Asset write-down
| | |
-
| | | |
3
| | | |
-
| | | |
3
| |
|
Net tax effect of asbestos settlement funding
| |
|
-
|
|
|
|
(128
|
)
|
|
|
-
|
|
|
|
(128
|
)
|
|
Total
| |
$
|
(6
|
)
|
|
$
|
(130
|
)
|
|
$
|
3
|
|
|
$
|
(129
|
)
|
| | | | | | | | | | | | | | | |
|
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEET HIGHLIGHTS (unaudited) |
|
($ in millions)
|
|
| |
| |
| |
| |
| | |
June 30
| |
December 31
| |
June 30
|
| | | 2017 (a) | | 2016 (a) | | 2016 (b) |
|
Current assets:
| | | | | | |
|
Cash and cash equivalents
| |
$
|
1,569
| | |
$
|
1,820
| | |
$
|
1,605
| |
|
Short-term investments
| | |
48
| | | |
43
| | | |
64
| |
|
Receivables - net
| | |
3,191
| | | |
2,654
| | | |
2,978
| |
|
Inventories
| | |
1,766
| | | |
1,514
| | | |
1,722
| |
|
Assets held for sale
| | |
177
| | | |
223
| | | |
773
| |
|
Other
| |
|
394
|
|
|
|
320
|
|
|
|
376
|
|
|
Total current assets
| |
$
|
7,145
|
|
|
$
|
6,574
|
|
|
$
|
7,518
|
|
| | | | | | |
|
|
Current liabilities:
| | | | | | |
|
Short-term debt and current portion of long-term debt
| |
$
|
619
| | |
$
|
629
| | |
$
|
684
| |
|
Accounts payable and accrued liabilities
| | |
3,653
| | | |
3,460
| | | |
3,452
| |
|
Restructuring reserves
| | |
115
| | | |
100
| | | |
55
| |
|
Liabilities held for sale
| |
|
54
|
|
|
|
64
|
|
|
|
230
|
|
|
Total current liabilities
| |
$
|
4,441
|
|
|
$
|
4,253
|
|
|
$
|
4,421
|
|
| | |
|
|
|
|
|
|
Long-term debt
| |
$
|
3,998
|
|
|
$
|
3,787
|
|
|
$
|
4,410
|
|
|
(a)
|
|
Assets and liabilities of PPG's North American fiber glass business
are classified as held for sale for all periods presented. The sale
of the North American fiber glass business is expected to close in
the second half of 2017.
|
|
(b)
| |
Assets and liabilities of PPG's former Glass segment are classified
as held for sale as of June 30, 2016. The European fiber glass and
flat glass business were sold on October 1, 2016.
|
| |
|
| PPG OPERATING METRICS (unaudited) |
|
($ in millions)
|
|
| |
|
|
June 30
|
|
|
December 31
|
|
|
June 30
|
| | | | 2017 (b) | | | 2016 (b) | | | 2016 (b) |
|
Operating Working Capital (a)
| | |
$
|
2,467
| | |
$
|
2,001
| | |
$
|
2,464
|
|
As a percent of quarter sales, annualized
| | | |
16.2%
| | | |
14.6%
| | | |
16.3%
|
|
(a)
|
|
Operating working capital includes: (1) receivables from customers,
net of allowance for doubtful accounts, (2) FIFO inventories and (3)
trade liabilities.
|
|
(b)
| |
Assets and Liabilities held for sale have been excluded for all
periods presented.
|
| |
|
| PPG INDUSTRIES, INC. AND SUBSIDIARIES |
| CONSOLIDATED BUSINESS SEGMENT INFORMATION (unaudited) |
|
($ in millions)
|
|
| |
| |
| |
| | |
Three Months Ended
| |
Six Months Ended
|
| | |
June 30
| |
June 30
|
| | | 2017 |
| 2016 | | 2017 |
| 2016 |
|
Net sales
| | | | | | | | |
|
Performance Coatings
| |
$
|
2,301
| | |
$
|
2,338
| | |
$
|
4,318
| | |
$
|
4,377
| |
|
Industrial Coatings
| |
|
1,505
|
|
|
|
1,444
|
|
|
|
2,974
|
|
|
|
2,816
|
|
|
Total
| |
$
|
3,806
|
|
|
$
|
3,782
|
|
|
$
|
7,292
|
|
|
$
|
7,193
|
|
| | | | | | | | |
|
|
Segment income
| | | | | | | | |
|
Performance Coatings
| |
$
|
413
| | |
$
|
428
| | |
$
|
698
| | |
$
|
707
| |
|
Industrial Coatings
| |
|
264
|
|
|
|
292
|
|
|
|
537
|
|
|
|
557
|
|
|
Total
| |
$
|
677
| | |
$
|
720
| | |
$
|
1,235
| | |
$
|
1,264
| |
| | | | | | | | |
|
|
Items not allocated to segments
| | | | | | | | |
|
Corporate
| | |
(27
|
)
| | |
(60
|
)
| | |
(90
|
)
| | |
(123
|
)
|
|
Interest expense, net of interest income
| | |
(22
|
)
| | |
(24
|
)
| | |
(43
|
)
| | |
(48
|
)
|
|
Legacy (Note A)
| | |
5
| | | |
(10
|
)
| | |
(3
|
)
| | |
(21
|
)
|
|
Pension settlement charge
| | |
-
| | | |
-
| | | |
(22
|
)
| | |
-
| |
|
Gain from the sale of the Plaka business
| | |
25
| | | |
-
| | | |
25
| | | |
-
| |
|
Transaction-related costs
| | |
(5
|
)
| | |
(6
|
)
| | |
(9
|
)
| | |
(8
|
)
|
|
Gain from the sale of an equity affiliate
| | |
-
| | | |
20
| | | |
-
| | | |
20
| |
|
Income from a legal settlement
| | |
18
| | | |
-
| | | |
18
| | | |
-
| |
|
Asset write-down
| |
|
-
|
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
(10
|
)
|
|
Income before income taxes
|
|
$
|
671
|
|
|
$
|
630
|
|
|
$
|
1,111
|
|
|
$
|
1,074
|
|
|
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 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/20170720005234/en/
PPG Media Contact:
Mark Silvey, +1-412-434-3046
Corporate
Communications
silvey@ppg.com
or
PPG
Investor Contact:
John Bruno, +1-412-434-3466
Investor
Relations
jbruno@ppg.com
investor.ppg.com
Source: PPG