| Statement Of Income Alternative (USD $) | ||||
| In Millions, except Per Share data | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Net sales | $3,115 | $4,474 | $5,898 | $8,436 |
| Cost of sales, exclusive of depreciation and amortization (Note 5) | 1,898 | 2,829 | 3,616 | 5,425 |
| Selling, general and administrative (Note 6) | 731 | 936 | 1,447 | 1,805 |
| Depreciation (Note 6) | 88 | 128 | 176 | 235 |
| Research and development | 97 | 118 | 191 | 230 |
| Interest expense | 49 | 65 | 97 | 131 |
| Amortization (Note 9) | 31 | 37 | 61 | 71 |
| Asbestos settlement - net (Note 20) | 3 | 4 | 7 | 4 |
| In-process research and development (Note 5) | 0 | 0 | 0 | 23 |
| Business restructuring (Note 7) | 0 | 0 | 186 | 0 |
| Other charges | 12 | 10 | 29 | 16 |
| Other earnings | (47) | (47) | (54) | (81) |
| Income before income taxes | 253 | 394 | 142 | 577 |
| Income tax expense | 84 | 116 | 64 | 173 |
| Net income attributable to the controlling and noncontrolling interests (Note 2) | 169 | 278 | 78 | 404 |
| Less: net income attributable to noncontrolling interests (Note 2) | (23) | (28) | (43) | (54) |
| Net income (attributable to PPG) | $146 | $250 | $35 | $350 |
| Earnings per common share (Note 11) | 0.89 | 1.52 | 0.21 | 2.13 |
| Earnings per common share - assuming dilution (Note 11) | 0.89 | 1.51 | 0.21 | 2.12 |
| Dividends per common share | 0.53 | 0.52 | 1.06 | 1.04 |
| Statement Of Financial Position Classified (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| Current assets: | ||
| Cash and cash equivalents | $1,052 | $1,021 |
| Receivables (less allowance for doubtful accounts of $121 million and $103 million) | 2,847 | 2,804 |
| Inventories (Note 8) | 1,672 | 1,702 |
| Other | 851 | 821 |
| Total current assets | 6,422 | 6,348 |
| Property (less accumulated depreciation of $5,411 million and $5,245 million) | 2,745 | 2,798 |
| Investments | 499 | 509 |
| Goodwill (Note 9) | 2,696 | 2,641 |
| Identifiable intangible assets (Note 9) | 1,446 | 1,472 |
| Other assets | 757 | 930 |
| Total | 14,565 | 14,698 |
| Current liabilities: | ||
| Short-term debt and current portion of long-term debt (Note 10) | 896 | 903 |
| Asbestos settlement (Note 20) | 514 | 491 |
| Accounts payable and accrued liabilities | 2,513 | 2,724 |
| Restructuring (Note 7) | 179 | 92 |
| Total current liabilities | 4,102 | 4,210 |
| Long-term debt (Note 10) | 3,306 | 3,009 |
| Asbestos settlement (Note 20) | 231 | 244 |
| Deferred income taxes | 293 | 425 |
| Accrued pensions | 1,086 | 1,250 |
| Other postretirement benefits | 1,088 | 1,072 |
| Other liabilities | 1,091 | 999 |
| Total liabilities | 11,197 | 11,209 |
| Commitments and contingent liabilities (Note 20) | 0 | 0 |
| Shareholders' equity (Note 15): | ||
| Common stock | 484 | 484 |
| Additional paid-in capital | 522 | 580 |
| Retained earnings | 8,017 | 8,156 |
| Treasury stock | (4,235) | (4,259) |
| Accumulated other comprehensive loss | (1,613) | (1,628) |
| Total PPG shareholders' equity | 3,175 | 3,333 |
| Noncontrolling interests (Note 2) | 193 | 156 |
| Total shareholders' equity | 3,368 | 3,489 |
| Total | $14,565 | $14,698 |
| Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| Receivables, allowance for doubtful accounts | $121 | $103 |
| Property, accumulated depreciation | $5,411 | $5,245 |
| Statement Of Cash Flows Indirect (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Cash from operating activities | $106 | $402 |
| Capital spending | ||
| Additions to property and long-term investments | (103) | (146) |
| Business acquisitions, net of cash balances acquired (2008 - $136) (Note 5) | (21) | (1,584) |
| Reductions of other property and investments | 17 | 29 |
| Deposits of cash into escrow | 0 | (3) |
| Release of cash held in escrow (Note 5) | 19 | 1,700 |
| Payments on cross currency swap contracts (Note 18) | (44) | 0 |
| Cash used for investing activities | (132) | (4) |
| Debt: | ||
| Proceeds from bridge loan and revolving credit facility (Note 10) | 0 | 1,143 |
| Repayment of debt assumed in acquisitions (Notes 5 and 10) | 0 | (1,259) |
| Proceeds from Notes (net of discount and issuance costs) (Note 10) | 0 | 1,538 |
| Repayment of bridge loan and revolving credit facility (Note 10) | 0 | (1,557) |
| Net change in borrowings with maturities of three months or less | (5) | (386) |
| Proceeds from term loan | 400 | 0 |
| Proceeds from other short-term debt | 0 | 287 |
| Repayments of other short-term debt | (169) | (279) |
| Other long-term debt activity | 21 | 7 |
| Other financing activities: | ||
| Proceeds from termination of interest rate swaps (Note 18) | 0 | 40 |
| Purchase of treasury stock | 0 | (6) |
| Issuance of treasury stock | 0 | 8 |
| Dividends paid on subsidiary common stock to noncontrolling interests (Note 2) | (10) | (43) |
| Dividends paid | (174) | (171) |
| Cash from (used for) financing activities | 63 | (678) |
| Effect of currency exchange rate changes on cash and cash equivalents | (6) | 20 |
| Net increase (decrease) in cash and cash equivalents | 31 | (260) |
| Cash and cash equivalents, beginning of period | 1,021 | 526 |
| Cash and cash equivalents, end of period | $1,052 | $266 |
| Statement Of Cash Flows Indirect (Parenthetical) (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Business acquisitions, cash balances acquired | $0 | $136 |
| Notes to Financial Statements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Notes to Financial Statements [Abstract] | |
| 1.Basis of Presentation | 1. Basis of Presentation The condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair presentation of the financial position of PPG Industries, Inc. and subsidiaries (the Company or PPG) as of June30, 2009, and the results of their operations for the three and six months ended June30, 2009 and 2008 and their cash flows for the six months then ended. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in PPGs Annual Report on Form 10-K for the year ended December31, 2008. Certain amounts in the 2008 financial statements have been reclassified to be consistent with the 2009 presentation. This reclassification had no impact on our previously reported net income, total assets, cash flows or shareholders equity. PPG has determined that there were no subsequent events that would require disclosure or adjustments to the accompanying condensed consolidated financial statements through July27, 2009, the date the financial statements were issued. The results of operations for the six months ended June30, 2009 are not necessarily indicative of the results to be expected for the full year. |
| 2.Newly Adopted Accounting Standards | 2. Newly Adopted Accounting Standards In May 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No.165, Subsequent Events (SFAS No.165). The objective of this Statement is to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This statement is effective for PPG for interim and annual financial periods beginning on June30, 2009. The impact of adopting SFAS No.165 had no effect on the accompanying condensed consolidated financial statements. In April 2009, the FASB issued three new FASB Staff Positions (FSP) relating to fair value accounting; FAS 157-4, Determining Fair Value When Market Activity Has Decreased, FSP FAS 115-2 and FAS 124-2, Other-Than-Temporary Impairment and FSP FAS 107-1/APB 28-1, Interim Fair Value Disclosures for Financial Instruments. These FSPs impact certain aspects of fair value measurement and related disclosures. The provisions of these FSPs were effective beginning in the second quarter of 2009. The impact of adopting these FSPs did not have a material effect on PPGs consolidated results of operations or financial position. In December 2007, the FASB issued SFAS No.141 (revised 2007), Business Combinations (SFAS No.141(R)), which replaces SFAS No.141, Business Combinations. SFAS No.141(R) retains the underlying concepts of SFAS No.141 in that all business combinations are still required to be accounted for at fair value under the acquisition method of accounting (formerly known as the purchase method of accounting), but SFAS No.141(R) changes the method of applying the acquisition method in a number of significant aspects. Under SFAS No.141(R), acquisition costs are generally to be expensed as incurred; noncontrolling interests are valued at fair value at the acquisition date; in-process research and development is recorded at fair value as an indefinite-lived intangible asset at the acquisition date; restructuring costs associated with a business combination are generally expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect income tax expense. SFAS No.141(R) is effective on a prospective basis for all business combinations for which the acquisition date is on or after January1, 2009, with an exception related to the accounting for valuation allowances on deferred taxes and acquired tax contingencies related to acquisitions completed before that date. SFAS No.141(R) amends SFAS No.109 to require adjustments, made after the effective date of this statement, to valuation allowances for acquired deferred tax assets and uncertain income tax positions to be recognized as income tax expense. The adoption of SFAS No.141(R) as of January1, 2009 did not have an effect on the accompanying condensed consolidated financial statements. In December 2007, the FASB issued SFAS No.160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No.51 (SFAS No.160). This statement is effect |
| 3.Other New Accounting Standards | 3. Other New Accounting Standards In June 2009, the FASB issued SFAS No.168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No.162, which identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). This statement is effective for financial statements issued for interim and annual periods ending after September15, 2009. The adoption of this standard will change how we reference various elements of GAAP when preparing our financial statement disclosures, but will have no impact on PPGs financial position, results of operation or cash flows. In June 2009, the FASB issued SFAS No.167, Amendments to FASB Interpretation No.46(R), (SFAS No 167) which amendments include: (1)the elimination of the exemption for qualifying special purpose entities, (2)a new approach for determining who should consolidate a variable-interest entity, and (3)changes to when it is necessary to reassess who should consolidate a variable-interest entity. This statement is effective for fiscal years beginning after November15, 2009, and for interim periods within that first annual reporting period. PPG is currently evaluating the effects that SFAS No.167 may have on our consolidated financial statements. |
| 4.Fair Value Measurement | 4. Fair Value Measurement SFAS No.157 defines fair value, establishes a framework in generally accepted accounting principles for measuring fair value and expands disclosures about fair value measurements. The standard establishes a hierarchy of inputs employed to determine fair value measurements, with three levels. Level 1 inputs are quoted prices in active markets for identical assets and liabilities, are considered to be the most reliable evidence of fair value, and should be used whenever available. Level 2 inputs are observable prices that are not quoted on active exchanges. Level 3 inputs are unobservable inputs employed for measuring the fair value of assets or liabilities. The fair values of outstanding derivative instruments were determined using quoted market prices. The fair value of interest rate swaps was determined using discounted cash flows and current interest rates. The Companys financial assets and liabilities that are reported at fair value on a recurring basis in the accompanying condensed consolidated balance sheet, as of June30, 2009, were as follows: (Millions) Level1 Level2 Level3 Total Other current assets: Foreign currency contracts (1) $ $ 2 $ $ 2 Interest rate swaps (1) 2 2 Marketable equity securities 4 4 Investments: Marketable equity securities 51 1 52 Other assets: Interest rate swaps (1) 4 4 Cross currency swaps (1) 8 8 Accounts payable and accrued liabilities: Foreign currency contracts (1) 13 13 Equity forward arrangement (1) 3 3 Natural gas swap contracts (1) 72 72 Other liabilities: Foreign currency contracts (1) 3 3 Cross currency swaps (1) 212 212 Natural gas swap contracts (1) 20 20 (1) This entire balance is designated as a hedging instrument under U.S. generally accepted accounting principles. The Companys financial assets and liabilities that are reported at fair value on a recurring basis in the accompanying condensed consolidated balance sheet, as of December31, 2008, were as follows: (Millions) Level1 Level2 Level3 Total Other current assets: Foreign currency contracts $ $ 7 $ $ 7 Marketable equity securities 4 4 Investments: Marketable equity securities 48 2 50 Other assets: Natural gas swap contracts 1 1 Interest rate swaps 3 3 Cross currency swaps 21 21 Accounts payable and accrued liabilities: Foreign currency contracts 16 16 Equity forward arrangement 6 6 Natural gas swap contracts 62 62 Other liabilities: Foreign currency contracts 6 6 Na |
| 5.Acquisitions | 5. Acquisitions During the six months ended June30, 2009, PPG spent $21 million on acquisitions, including purchase price adjustments related to 2008 acquisitions and $11 million related to earn-out and holdback payments on acquisitions that were completed prior to December31, 2008. During the six months ended June30, 2008, PPG spent $1,584 million on acquisitions (net of cash acquired of $136 million), including purchase price adjustments related to 2007 acquisitions. Most of this spending was related to the January2, 2008 acquisition of SigmaKalon, a worldwide coatings producer based in Uithoorn, Netherlands, from global private investment firm Bain Capital (the seller). SigmaKalon produces architectural, protective and marine and industrial coatings and is a leading coatings supplier in Europe and other key markets across the globe, with an increasing presence in Africa and Asia. SigmaKalon sells coatings through a combination of approximately 500 company-owned stores, home centers, paint dealers, independent distributors, and directly to customers. The results of SigmaKalon have been included in PPGs consolidated results of operations from January2, 2008 onward. The total transaction value was approximately $3.2 billion, consisting of cash paid to the seller of $1,673 million and debt assumed of $1,517 million. The cash paid to the seller consisted of 717million ($1,056 million) and $617 million. In 2007, PPG issued $617 million of commercial paper and borrowed $1,056 million (717 million) under the 1 billion bridge loan agreement established in December 2007 in anticipation of completing the SigmaKalon acquisition. The proceeds from these borrowings were deposited into escrow in December 2007. Upon closing of the transaction on January2, 2008, these amounts were released from escrow and paid to the seller. The following table summarizes the final purchase price allocation for the SigmaKalon acquisition. (Millions) Current assets (including cash of $136) $ 1,415 Property, plant, and equipment 635 Customer-related intangibles 685 Trade names 277 Acquired technology 122 Goodwill (non-deductible) 1,353 Other 172 Total assets 4,659 Short-term debt (1,507 ) Current liabilities (798 ) Long-term debt (10 ) Deferred taxes (389 ) Other long-term liabilities (305 ) Net assets 1,650 In-process research and development 23 Total purchase price $ 1,673 The step up to fair value of acquired inventory as part of the purchase price allocation totaled $94 million. This amount was included in cost of sales, exclusive of depreciation and amortization, in the accompanying condensed consolidated statement of income for the six months ended June30, 2008 as the related inventory was sold to customers in the first quarter of 2008. The amount allocated to in-process research and development was charged to expense in the first quarter of 2008. |
| 6.Divestiture of Automotive Glass and Services Business | 6. Divestiture of Automotive Glass and Services Business During the third quarter of 2007, the Company entered into an agreement to sell its automotive glass and services business to Platinum Equity, (Platinum) for approximately $500 million. In the fourth quarter of 2007, PPG was notified that affiliates of Platinum had filed suit in the Supreme Court of the State of New York, County of New York, alleging that Platinum was not obligated to consummate the agreement. Platinum also terminated the agreement. PPG has sued Platinum and certain of its affiliates for damages, including the $25 million breakup fee stipulated by the terms of the agreement, based on various alleged actions of the Platinum parties. In July 2008, PPG entered into an agreement with affiliates of Kohlberg Company, LLC, under which PPG would divest the automotive glass and services business to a new company formed by affiliates of Kohlberg. The transaction with affiliates of Kohlberg was completed on September30, 2008, with PPG receiving total proceeds of $315 million, including $225 million in cash and two 6-year notes totaling $90 million ($60 million at 8.5% interest and $30 million at 10% interest). Both notes, which may be prepaid at any time without penalty, are senior to the equity of the new company. In addition, PPG received a minority interest of approximately 40 percent in the new company, Pittsburgh Glass Works LLC. PPG will account for its interest in Pittsburgh Glass Works LLC under the equity method of accounting from October1, 2008 onward. PPG has retained certain liabilities for pension and post-employment benefits earned for service up to September30, 2008. As of December31, 2008, these liabilities included approximately $280 million for employees who were active as of the divestiture date and approximately $520 million for individuals who were retirees of the business as of the divestiture date. In 2009, PPG expects to recognize expense totaling $40 million related to these obligations. In addition, PPG is providing certain transition services, including information technology and accounting services, to Pittsburgh Glass Works LLC for a period of up to two years. In the second quarter of 2008, as a result of the reclassification of the automotive glass and services business to continuing operations, PPG recorded a one-time, non-cash charge of $17 million ($11 million aftertax) to reflect a catch-up of depreciation expense, which was suspended when the business was classified as a discontinued operation. Additionally, in the second quarter of 2008, PPG recorded a charge of $19 million ($12 million aftertax) for special termination benefits and a pension curtailment loss relating to the impact of benefit changes, including accelerated vesting, negotiated as part of the sale. This charge is included in selling, general and administrative expenses in the accompanying condensed consolidated statement of income for the three and six months ended June30, 2008. In the second quarter of 2009, Pittsburgh Glass Works LLC made the full $2 million interest payment that was due; however, the first quarter of 2009, interest payment due to PPG of $2 mill |
| 7.Business Restructuring | 7. Business Restructuring In March of 2009, the Company finalized a restructuring plan focused on further reducing its global cost structure, driven by global economic conditions, low-end market demand and acceleration of cost-savings from the integration of the 2008 acquisition of SigmaKalon. As part of the restructuring, PPG will close its paints coatings manufacturing facility in Saultain, France, by the end of 2009, as well as several smaller production, laboratory, warehouse and distribution facilities across PPGs businesses and regions and will reduce staffing across the company globally. As a result of this restructuring plan, in March of 2009, the Company recorded a charge of $186 million for business restructuring, including severance and other costs of $154 million and asset write-offs of $32 million. The Company also expects to incur additional costs of approximately $12million directly associated with the restructuring actions for demolition, dismantling, relocation and training that will be charged to expense as incurred. The Company expects to incur these additional expenses in the second half of 2009. The following table summarizes the activity in the first quarter 2009 restructuring reserve through June30, 2009: (Millions, except no. of employees) Severance andOther Costs Asset Write-offs Total Reserve Employees Impacted Industrial Coatings $ 77 $ 16 $ 93 935 Performance Coatings 37 4 41 764 Architectural Coatings - EMEA 13 13 130 Glass 11 2 13 247 Optical Specialty Materials 3 9 12 219 Commodity Chemicals 6 6 42 Corporate 7 1 8 91 Total $ 154 $ 32 $ 186 2,428 Activity to date (30 ) (32 ) (62 ) (1,142 ) Currency impact 6 6 Balance as of June30, 2009 $ 130 $ $ 130 1,286 During the third quarter of 2008, the Company finalized a restructuring plan that is part of implementing PPGs global transformation strategy and the integration of its 2008 acquisition of SigmaKalon. As part of the restructuring, PPG closed its coatings manufacturing facility in Clarkson, Ont., Canada and will close the coatings manufacturing facility in Geldermalsen, Netherlands in the third quarter 2009. The consultation with the applicable works council at Geldermalsen has been completed. Other staffing reductions will occur in PPGs coatings businesses in North America and Europe. PPG also closed its Owen Sound, Ont., Canada, glass manufacturing facility, and idled one float glass production line at its Mt. Zion, Ill., facility in the fourth quarter of 2008. Other actions included writing off idle production assets in PPGs fiber glass and chemicals businesses. In the third quarter of 2008, the Company recorded a charge of $163 million for business restructuring, including severance and other costs of $73 million, pension curtailments of $21 million and asset write-off |
| 8.Inventories | 8. Inventories Inventories as of June30, 2009 and December31, 2008 are detailed below. June30, 2009 Dec.31, 2008 (Millions) Finished products $ 1,022 $ 1,045 Work in process 139 134 Raw materials 398 412 Supplies 113 111 Total $ 1,672 $ 1,702 Most domestic and certain foreign inventories are valued using the last-in, first-out method. If the first-in, first-out method of inventory valuation had been used, inventories would have been $236 million and $213 million higher as of June30, 2009 and December31, 2008, respectively. |
| 9.Goodwill and Other Identifiable Intangible Assets | 9. Goodwill and Other Identifiable Intangible Assets The change in the carrying amount of goodwill attributable to each reportable segment for the six months ended June30, 2009 was as follows: Performance Coatings Industrial Coatings Architectural Coatings - EMEA Optical and Specialty Materials Glass Total (Millions) Balance, December 31, 2008 $ 1,078 $ 482 $ 976 $ 50 $ 55 $ 2,641 Currency translation 32 2 19 1 1 55 Balance, June 30, 2009 $ 1,110 $ 484 $ 995 $ 51 $ 56 $ 2,696 The carrying amount of acquired trademarks with indefinite lives as of June30, 2009 and December31, 2008 totaled $339 million. The Companys identifiable intangible assets with finite lives are being amortized over their estimated useful lives and are detailed below. June30, 2009 December31, 2008 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (Millions) Acquired technology $ 524 $ (223 ) $ 301 $ 520 $ (201 ) $ 319 Customer-related intangibles 960 (239 ) 721 927 (195 ) 732 Trade names 107 (29 ) 78 97 (23 ) 74 Other 27 (20 ) 7 26 (18 ) 8 Balance $ 1,618 $ (511 ) $ 1,107 $ 1,570 $ (437 ) $ 1,133 Aggregate amortization expense related to these identifiable intangible assets for the three and six months ended June30, 2009 was $31 million and $61 million, respectively, and for the three and six months ended June30, 2008 was $37 million and $71 million, respectively. As of June30, 2009, estimated future amortization expense of identifiable intangible assets is as follows: $60million for the remaining quarters of 2009 and $120 million in each of the next five years. |
| 10.Debt | 10. Debt In June 2009, PPG entered into a $400 million three year unsecured term loan. The proceeds will be used to repay outstanding debt. During the second quarter $165 million of the proceeds from this term loan were used to retire outstanding amounts under our 650million revolving credit facility; the remainder of the loan proceeds will be used to retire our 7.05% bonds, which are to mature in August of 2009 and to repay additional amounts under our 650million revolving credit facility. The principal amount of this loan is due in three years. The interest rate on borrowings under this facility is variable based on a spread over LIBOR. In December 2007, PPG issued $617 million of commercial paper and borrowed $1,056 million (717 million) under a 1 billion bridge loan agreement with multiple lenders and Credit Suisse as administrative agent for those lenders. The proceeds from these borrowings were deposited into escrow in December 2007. Upon closing of the SigmaKalon acquisition on January2, 2008, these amounts were released from escrow and paid to the seller. Also, in January 2008, PPG borrowed $1,143 million, representing the remaining $417 million (283 million) available under the 1 billion bridge loan agreement and $726 million (493 million) under its three year 650million revolving credit facility. The proceeds from these borrowings and cash on hand of $116 million were used to refinance $1,259 million of the $1,517 million of SigmaKalon debt outstanding on the date of acquisition. On March18, 2008, PPG completed a public offering of $600 million in aggregate principal amount of its 5.75% Notes due 2013 (the 2013 Notes), $700 million in aggregate principal amount of its 6.65% Notes due 2018 (the 2018 Notes) and $250 million in aggregate principal amount of its 7.70% Notes due 2038 (the 2038 Notes and, together with the 2013 Notes and the 2018 Notes, the Notes). The Notes were offered by the Company pursuant to its existing shelf registration. The proceeds of this offering of $1,538 million (net of discount and issuance costs) and additional borrowings of $195 million under the 650million revolving credit facility were used to repay existing debt, including certain short-term debt and the amounts outstanding under the 1 billion bridge loan. No further amounts can be borrowed under the 1 billion bridge loan. The discount and issuance costs related to the Notes, which totaled $12 million, will be amortized to interest expense over the respective lives of the Notes. |
| 11.Earnings Per Common Share | 11. Earnings Per Common Share The following table presents the earnings per common share calculations for the three and six months ended June30, 2009 and 2008. Three Months Ended June30 Six Months Ended June30 (Millions, except per share amounts) 2009 2008 2009 2008 Earnings per common share (attributable to PPG) Net income (attributable to PPG) $ 146 $ 250 $ 35 $ 350 Weighted average common shares outstanding 163.8 164.6 163.9 164.5 Earnings per common share (attributable to PPG) $ 0.89 $ 1.52 $ 0.21 $ 2.13 Earnings per common share - assuming dilution (attributable to PPG) Net income (attributable to PPG) $ 146 $ 250 $ 35 $ 350 Weighted average common shares outstanding 163.8 164.6 163.9 164.5 Effect of dilutive securities: Stock options 0.0 0.5 0.0 0.6 Other stock compensation plans 0.6 0.5 0.6 0.6 Potentially dilutive common shares 0.6 1.0 0.6 1.2 Adjusted weighted average common shares outstanding 164.4 165.6 164.5 165.7 Earnings per common share - assuming dilution (attributable to PPG) $ 0.89 $ 1.51 $ 0.21 $ 2.12 Excluded from the computation of diluted earnings per share due to their antidilutive effect were 7.0million and 7.1million outstanding stock options for the three and six months ended June30, 2009, respectively, and 3.2million and 3.0million outstanding stock options for the three and six months ended June30, 2008, respectively. |
| 12.Income Taxes | 12. Income Taxes The Company files federal, state and local income tax returns in numerous domestic and foreign jurisdictions. In most tax jurisdictions, returns are subject to examination by the relevant tax authorities for a number of years after the returns have been filed. The Company is no longer subject to examinations by tax authorities in any major tax jurisdiction for years before 2003. Additionally, the Internal Revenue Service (IRS) has completed its examination of the Companys U.S. federal income tax returns filed for years through 2006. The IRS is currently conducting its examination of the Companys U.S. federal income tax return for 2007. This examination is expected to be completed in the fourth quarter of 2009 or early 2010 and is not expected to result in a significant adjustment to the Companys income tax expense. |
| 13.Pensions and Other Postretirement Benefits | 13. Pensions and Other Postretirement Benefits The net periodic benefit costs for the three and six months ended June30, 2009 and 2008 were as follows: Pensions ThreeMonths EndedJune30 Six Months Ended June30 2009 2008 2009 2008 (Millions) Service cost $ 17 $ 19 $ 34 $ 40 Interest cost 61 66 122 131 Expected return on plan assets (57 ) (74 ) (113 ) (148 ) Amortization of prior service cost 2 2 3 5 Amortization of actuarial losses 32 18 64 33 Special termination benefits and curtailment (Note 6) 18 18 Net periodic pension cost $ 55 $ 49 $ 110 $ 79 PPG does not have a mandatory contribution to make to its U.S. defined benefit pension plans in 2009; however, due in large part to the negative investment return on pension plan assets in 2008, PPG made a voluntary contribution in the amount of $160 million to these plans in January 2009, and will make an additional voluntary contribution to these plans in 2009 in an amount of $55 million, which the Company expects will be in the form of PPG stock. PPG expects to make mandatory contributions to its non-U.S. plans in 2009 of approximately $60 million, of which approximately $50 million was made as of June30, 2009. Of this $50 million, approximately $18 million was made in the form of PPG stock. The net periodic other postretirement benefit costs for the three and six months ended June30, 2009 and 2008 were as follows: Other Postretirement Benefits ThreeMonths EndedJune30 Six Months EndedJune30 2009 2008 2009 2008 (Millions) Service cost $ 7 $ 5 $ 13 $ 12 Interest cost 17 16 34 33 Amortization of prior service cost (4 ) (4 ) (7 ) (9 ) Amortization of actuarial losses 9 8 17 15 Special termination benefits (Note 6) 1 1 Net periodic other postretirement benefit cost $ 29 $ 26 $ 57 $ 52 |
| 14.Comprehensive Income | 14. Comprehensive Income Total comprehensive income for the three and six months ended June30, 2009 and 2008 was as follows: Three Months EndedJune30 Six Months EndedJune30 2009 2008 2009 2008 (Millions) Net income attributable to the controlling and noncontrolling interests $ 169 $ 278 $ 78 $ 404 Other comprehensive income (loss), net of tax: Pension and other postretirement benefits (Note 13) 56 (19 ) 36 (1 ) Unrealized currency translation adjustment 195 49 (15 ) 206 Unrealized losses on marketable securities (1 ) (2 ) Net change derivatives (Note 17) 19 50 (3 ) 83 Other comprehensive income, net of tax 270 79 18 286 Total comprehensive income 439 357 96 690 Less: amounts attributable to noncontrolling interests: Net income (23 ) (28 ) (43 ) (54 ) Unrealized currency translation adjustment (6 ) (1 ) (3 ) (4 ) Comprehensive income attributable to PPG $ 410 $ 328 $ 50 $ 632 |
| 15.Shareholders' Equity | 15. Shareholders Equity The following table presents the change in total shareholders equity for the six months ended June30, 2009 and 2008, respectively. (Millions) Total PPG Shareholders Equity Non-controlling Interests Total Balance, January1, 2009 $ 3,333 $ 156 $ 3,489 Net income 35 43 78 Other comprehensive income, net of tax 15 3 18 Cash dividends (174 ) (174 ) Issuance of treasury stock 34 34 Stock option activity (9 ) (9 ) Other changes in noncontrolling interests 1 1 Dividends paid on subsidiary common stock to noncontrolling interests (10 ) (10 ) Equity forward agreement (1) (59 ) (59 ) Balance, June30, 2009 $ 3,175 $ 193 $ 3,368 (1)- In December of 2008, the Company entered into an agreement with a counterparty to repurchase 1.5million shares of the Companys stock. Under the terms of the agreement, the counterparty purchased the shares in the open market in January of 2009 and is now holding the shares until such time as the Company pays the agreed upon price of $39.53 per share and takes possession of these shares. These shares are not considered outstanding for basic and diluted earnings per share calculation, and total shareholders equity at June30, 2009 has been reduced by approximately $59 million, representing the amount that will be paid by PPG to the counterparty upon settlement. (Millions) Total PPG Shareholders Equity Non-controlling Interests Total Balance, January1, 2008 $ 4,151 $ 161 $ 4,312 Net income 350 54 404 Other comprehensive income, net of tax 282 4 286 Cash dividends (171 ) (171 ) Purchase of treasury stock (7 ) (7 ) Issuance of treasury stock 28 28 Stock option activity (7 ) (7 ) Increase of noncontrolling interests through acquisition 19 19 Other changes in noncontrolling interests (1 ) (1 ) Dividends paid to subsidiary common stock to noncontrolling interests (43 ) (43 ) Transition adjustment for adoption of EITF No.06-10 (2 ) (2 ) Balance, June30, 2008 $ 4,624 $ 194 $ 4,818 |
| 16.Financial Instruments, Excluding Derivative Financial Instruments | 16. Financial Instruments, Excluding Derivative Financial Instruments Included in PPGs financial instrument portfolio are cash and cash equivalents, cash held in escrow, marketable equity securities, company-owned life insurance and short- and long-term debt instruments. The fair values of the financial instruments approximated their carrying values, in the aggregate, except for long-term debt. Long-term debt (excluding capital lease obligations) had carrying and fair values totaling $3,395 million and $3,549 million, respectively, as of June30, 2009. Long-term debt (excluding capital lease obligations) had carrying and fair values totaling $3,122 million and $3,035 million, respectively, as of December31, 2008. The fair values of the debt instruments were based on discounted cash flows and interest rates currently available to the Company for instruments of the same remaining maturities. |
| 17.Derivative Financial Instruments and Hedge Activities | 17. Derivative Financial Instruments and Hedge Activities The Company recognizes all derivative instruments as either assets or liabilities at fair value on the balance sheet. The accounting for changes in the fair value of a derivative depends on the use of the instrument. To the extent that a derivative is effective as a cash flow hedge of an exposure to future changes in value, the change in fair value of the instrument is deferred in accumulated other comprehensive (loss) income (AOCI). Any portion considered to be ineffective is reported in earnings immediately, including changes in value related to credit risk. To the extent that a derivative is effective as a hedge of an exposure to future changes in fair value, the change in the derivatives fair value is offset in the consolidated statement of income by the change in fair value of the item being hedged. To the extent that a derivative or a financial instrument is effective as a hedge of a net investment in a foreign operation, the change in the derivatives fair value is deferred as an unrealized currency translation adjustment in AOCI. PPGs policies do not permit speculative use of derivative financial instruments. PPG uses derivative instruments to manage its exposure to fluctuating natural gas prices through the use of natural gas swap contracts. PPG also uses forward currency and option contracts as hedges against its exposure to variability in exchange rates on short-term intercompany borrowings, unrecognized firm sales commitments, and cash flows denominated in foreign currencies. PPG uses foreign denominated debt and cross currency swap contracts to hedge investments in foreign operations. Interest rate swaps are used to manage the Companys exposure to changing interest rates as such rate changes effect the fair value of fixed rate borrowings. PPG also uses an equity forward arrangement to hedge the Companys exposure to changes in the fair value of PPG stock that is to be contributed to the asbestos settlement trust as discussed in Note 20, Commitments and Contingent Liabilities. PPG enters into derivative financial instruments with high credit quality counterparties and diversifies its positions among such counterparties in order to reduce its exposure to credit losses. The Company did not realize a credit loss on derivatives during the six month periods ended June30, 2009 or 2008. PPG centrally manages its foreign currency transaction risk to minimize the volatility in cash flows caused by currency fluctuations. Decisions on whether to use derivative financial instruments to hedge the net transaction exposures, related to all regions of the world, are made based on the amount of those exposures, by currency, and, in certain situations, an assessment of the near-term outlook for certain currencies. This net hedging strategy does not qualify for hedge accounting under the provisions of SFAS No.133, Accounting for Derivative Instruments and Hedging Activities; therefore, the change in the fair value of these instruments is recorded in Other charges in the accompanying condensed consolidated statement of income in the period of change. As of June30, 2009, the fair |
| 18.Cash Flow Information | 18. Cash Flow Information Cash from operating activities for the six months ended June30, 2009 was $106 million versus $402 million for the comparable period of 2008. Cash from operating activities in 2009 includes the negative impact of pension contributions of approximately $190 million, including a $160 million voluntary contribution that we made to our U.S. pension plans during the first quarter 2009. Pension contributions in the first two quarters of 2008 totaled $50 million. Cash payments for interest were $110 million, and the net cash payment under the cross currency swaps that effectively convert U.S. dollar borrowings to euro borrowings totaled $44 million for the six months ended June30, 2009. Cash payments for interest were $110 million for the six months ended June30, 2008. Net cash payments for income taxes for the six months ended June30, 2009 and 2008 were $111 million and $137 million, respectively. In the first quarter of 2008, PPG terminated two interest rate swaps, including one that was acquired in the SigmaKalon transaction. PPG received proceeds of $40 million in terminating these swaps, which amount is included as cash from financing activities in the accompanying condensed consolidated statement of cash flows for the six months ended June30, 2008. |
| 19.Stock-Based Compensation | 19. Stock-Based Compensation The Companys stock-based compensation includes stock options, restricted stock units (RSUs) and grants of contingent shares that are earned based on achieving targeted levels of total shareholder return. All current grants of stock options, RSUs and contingent shares are made under the PPG Industries, Inc. Omnibus Incentive Plan (PPG Omnibus Plan). Shares available for future grants under the PPG Omnibus Plan were 5.8million as of June30, 2009. Total stock-based compensation cost was $6 million and $13 million for the three and six months ended June30, 2009, respectively, and $6 million and $15 million for the three and six months ended June30, 2008, respectively. The total income tax benefit recognized in the accompanying condensed consolidated statement of income related to the stock-based compensation was $3 million and $5 million for the three and six months ended June30, 2009, respectively, and $3 million and $6 million for the three and six months ended June30, 2008, respectively. Stock Options PPG has outstanding stock option awards that have been granted under two stock option plans: the PPG Industries, Inc. Stock Plan (PPG Stock Plan) and the PPG Omnibus Plan. Under the PPG Omnibus Plan and the PPG Stock Plan, certain employees of the Company have been granted options to purchase shares of common stock at prices equal to the fair market value of the shares on the date the options were granted. The options are generally exercisable beginning from six to 48 months after being granted and have a maximum term of 10 years. Upon exercise of a stock option, shares of Company stock are issued from treasury stock. The PPG Stock Plan includes a restored option provision for options originally granted prior to January1, 2003 that allows an optionee to exercise options and satisfy the option price by certifying ownership of mature shares of PPG common stock with equivalent market value. In the first half of 2009, PPG granted 926,380 stock options from the PPG Omnibus Plan, at a weighted average exercise price of $34.19 per share. The weighted average fair value of options granted was $6.79 per share. The fair value of stock options issued to employees is measured on the date of grant and is recognized as expense over the requisite service period. PPG estimates the fair value of stock options using the Black-Scholes option pricing model. The risk-free interest rate is determined by using the U.S. Treasury yield curve at the date of the grant and using a maturity equal to the expected life of the option. The expected life of options is calculated using the average of the vesting term and the maximum term, as prescribed by SEC Staff Accounting Bulletin (SAB) No.107, Share-Based Payment, as amended by SAB No.110. This method is used as the vesting terms of stock options were changed in 2004 to a three year vesting term, and as a result, the historical exercise data does not provide a reasonable basis upon which to estimate the expected life of options. The expected dividend yield and volatility are based on historical stock prices and dividend amounts over past time periods equal in length to the expe |
| 20.Commitments and Contingent Liabilities | 20. Commitments and Contingent Liabilities PPG is involved in a number of lawsuits and claims, both actual and potential, including some that it has asserted against others, in which substantial monetary damages are sought. These lawsuits and claims, the most significant of which are described below, relate to contract, patent, environmental, product liability, antitrust and other matters arising out of the conduct of PPGs current and past business activities. To the extent that these lawsuits and claims involve personal injury and property damage, PPG believes it has adequate insurance; however, certain of PPGs insurers are contesting coverage with respect to some of these claims, and other insurers, as they had prior to the asbestos settlement described below, may contest coverage with respect to some of the asbestos claims if the settlement is not implemented. PPGs lawsuits and claims against others include claims against insurers and other third parties with respect to actual and contingent losses related to environmental, asbestos and other matters. The result of any future litigation of such lawsuits and claims is inherently unpredictable. However, management believes that, in the aggregate, the outcome of all lawsuits and claims involving PPG, including asbestos-related claims in the event the settlement described below does not become effective, will not have a material effect on PPGs consolidated financial position or liquidity; however, such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized. Antitrust Matters Several complaints were filed in late 2007 and early 2008 in different federal courts naming PPG and other flat glass producers as defendants in purported antitrust class actions. The complaints allege that the defendants conspired to fix, raise, maintain and stabilize the price and the terms and conditions of sale of flat glass in the United States in violation of federal antitrust laws. In June 2008, these cases were consolidated into one federal court class action in Pittsburgh, Pa. Many allegations in the complaints are similar to those raised in ongoing proceedings by the European Commission in which fines were levied against other flat glass producers arising out of alleged antitrust violations. PPG is not involved in any of the proceedings in Europe. PPG divested its European flat glass business in 1998. A complaint containing allegations substantially similar to the U.S. litigation was filed in the Superior Court in Windsor, Ontario, Canada in August 2008 regarding the sale of flat glass in Canada. PPG is aware of no wrongdoing or conduct on its part in the operation of its flat glass businesses that violated any antitrust laws, and it intends to vigorously defend its position. Asbestos Matters For over 30 years, PPG has been a defendant in lawsuits involving claims alleging personal injury from exposure to asbestos. Most of PPGs potential exposure relates to allegations by plaintiffs that PPG should be liable for injuries involving asbestos-containing thermal insulation products, known as Unibestos, manufactured and distributed by Pi |
| 21.Reportable Segment Information | 21. Reportable Segment Information PPG is a multinational manufacturer with 13 operating segments that are organized based on the Companys major products lines. These operating segments are also the Companys reporting units for purposes of testing goodwill for impairment. The operating segments have been aggregated based on economic similarities, the nature of their products, production processes, end-use markets and methods of distribution into six reportable business segments. The Performance Coatings reportable segment is comprised of the refinish, aerospace, architectural coatings Americas and Asia Pacific and protective and marine coatings operating segments. This reportable segment primarily supplies a variety of protective and decorative coatings, sealants and finishes along with paint strippers, stains and related chemicals, as well as transparencies and transparent armor. The Industrial Coatings reportable segment is comprised of the automotive, industrial and packaging coatings operating segments. This reportable segment primarily supplies a variety of protective and decorative coatings and finishes along with adhesives, sealants, inks and metal pretreatment products. The Architectural Coatings EMEA reportable segment is comprised of the architectural coatings EMEA operating segment. This reportable segment primarily supplies a variety of coatings under a number of brands and purchased sundries to painting contractors and consumers in Europe, the Middle East and Africa. The Optical and Specialty Materials reportable segment is comprised of the optical products and silicas operating segments. The primary Optical and Specialty Materials products are Transitions lenses, sunlenses, optical materials, polarized film and amorphous precipitated silica products. Transitions lenses are processed and distributed by PPGs 51%-owned joint venture with Essilor International. The Commodity Chemicals reportable segment is comprised of the chlor-alkali and derivatives operating segment. The primary chlor-alkali and derivative products are chlorine, caustic soda, vinyl chloride monomer, chlorinated solvents, calcium hypochlorite, ethylene dichloride and phosgene derivatives. The Glass reportable segment is comprised of the performance glazings and fiber glass operating segments. This reportable segment primarily supplies flat glass and continuous-strand fiber glass products. Reportable segment net sales and segment income (loss) for the three and six months ended June30, 2009 and 2008 were as follows: ThreeMonths EndedJune30 SixMonths EndedJune30 2009 2008 2009 2008 (Millions) Net sales: Performance Coatings $ 1,066 $ 1,269 $ 1,994 $ 2,383 Industrial Coatings 741 1,152 1,385 2,210 Architectural Coatings - EMEA 527 667 936 1,203 Optical and Specialty Materials 255 310 500 605 Commodity Chemicals 319 495 680 918 Glass (a) 207 581 403 1,117 Total (b) $ 3, |
| Document Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Document Information [Text Block] | |
| Document Type | 10-Q |
| Amendment Flag | false |
| Amendment Description | N.A. |
| Document Period End Date | 2009-06-30 |
| Entity Information (USD $) | ||
| 6 Months Ended
Jun. 30, 2009 | Jun. 30, 2008
| |
| Entity [Text Block] | ||
| Trading Symbol | PPG | |
| Entity Registrant Name | PPG INDUSTRIES INC | |
| Entity Central Index Key | 0000079879 | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Well-known Seasoned Issuer | Yes | |
| Entity Current Reporting Status | Yes | |
| Entity Voluntary Filers | No | |
| Entity Filer Category | Large Accelerated Filer | |
| Entity Common Stock, Shares Outstanding | 164,910,177 | |
| Entity Public Float | $9,400,000,000 |
