RULE NO. 424(b)(5)
REGISTRATION NO.333-83019
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The Information in this preliminary prospectus is not complete and may be +
+ changed. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion. Dated August 12, 1999.
Prospectus Supplement to Prospectus Dated August 3, 1999.
$800,000,000
[LOGO]
PPG Industries, Inc.
$ % Notes due
$ % Notes due
$ % Debentures due , 2019
-----------
PPG Industries, Inc. will pay interest on the Notes and the Debentures on
and of each year. The first such payment will be made on
. The Notes and the Debentures will be issued only in denominations of
$1,000 and integral multiples of $1,000.
The % Notes are not redeemable. The % Notes and the Debentures are
redeemable at the option of PPG on the terms specified herein.
-----------
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
-----------
Per Per Per
% Note Total % Note Total Debenture Total
-------- ----- -------- ----- --------- -----
Initial public offering price... % $ % $ % $
Underwriting discount........... % $ % $ % $
Proceeds, before expenses, to
PPG Industries, Inc............ % $ % $ % $
The initial public offering prices set forth above do not include accrued
interest, if any. Interest on the Notes and Debentures will accrue from
and must be paid by the purchaser if the Notes or the Debentures are
delivered after .
-----------
The underwriters expect to deliver the Notes and the Debentures in book-entry
form only through the facilities of The Depository Trust Company against
payment in New York, New York on .
Goldman, Sachs & Co.
Credit Suisse First Boston
J.P. Morgan & Co.
Chase Securities Inc.
-----------
Prospectus Supplement dated August , 1999.
PPG INDUSTRIES, INC.
PPG Industries, Inc. was incorporated in Pennsylvania in 1883 and operates
in three basic business segments: coatings, glass and chemicals. In 1998, we
had earnings of $801 million on sales of $7.5 billion.
Our business segments are highly competitive and we compete with many of
the world's premier industrial companies. We believe the diversity of our
product lines and the worldwide markets we serve tend to minimize the impact on
total sales and earnings of changes in demand for a particular product or in a
particular geographic area.
Coatings
We are among the world's leading suppliers of automotive and industrial
coatings, and we are a major supplier of architectural and packaging coatings.
Our coatings business includes:
. coatings, refinishes, pretreatment chemicals, adhesives and sealants
used in the automotive original equipment, repair and refurbishing
industries;
. industrial coatings used in factory finishing of consumer, industrial
and construction products;
. packaging coatings for food and beverage containers and cartons; and
. architectural finishes used in commercial and residential remodeling,
maintenance and construction.
We also supply other consumer and industrial products, technical expertise and
engineering and purchasing services to automotive original equipment
manufacturers and other industrial businesses.
Our principal competitors in the coatings segment include, Akzo Nobel N.V.,
BASF, DuPont, ICI, Kansai Paint, Nippon Paint, RPM and Sherwin-Williams.
Glass
We are one of the world's major producers of flat glass and fabricated
glass, and we are the world's second largest producer of continuous-strand
fiber glass. Most of our glass products are sold directly to manufacturers and
construction companies. Primary products of our glass businesses include:
. glass for the automotive and aircraft industries, including original,
replacement, ballistic resistant and fabricated aircraft transparencies;
. flat glass, including glass for residential and commercial construction,
repair and remodeling and furniture and mirrors; and
. fiber glass reinforcement and electronic and specialty materials for the
transportation, construction, electronics, recreational and industrial
markets.
Our competitors in the automotive, flat and aircraft glass markets include
Asahi Glass, Guardian Industries, Pilkington and Saint Gobain and in the fiber
glass markets include Owens Corning and Saint Gobain.
Chemicals
We also are a major producer and marketer of chlor-alkali chemicals and we
are a major supplier of specialty chemicals. Our chemicals products are sold
principally to manufacturers in a wide array of businesses, including the
chemical processing, rubber and plastics, paper, minerals and metals and water
treatment industries.
We are the world's third largest producer of chlorine and caustic soda. Our
other primary chlor-alkali products are:
. chlorinated solvents, chlorinated benzenes and calcium hypochlorite.
In our specialty chemicals businesses, our business strategy has led us to
become:
. the world's leading producer of optical monomers;
S-2
. the world's leading maker of changeable-tint lenses; and
. the world's leading producer of amorphous precipitated silicas.
The primary products of our specialty chemicals businesses are:
. optical products, including Transitions(R) changeable-tint plastic
prescription lenses and optical monomers for plastic lenses;
. precipitated silicas used in tire, footwear, battery separators, rubber
goods and durable printed material; and
. phosgene derivatives and other intermediates for the pharmaceutical,
agricultural, fuel additives and other chemical products businesses.
Principal competitors in our chemicals business include Akzo Nobel N.V., BASF,
Degussa, Dow Chemical, Occidental Petroleum, Olin, Rhodia and SNPE.
Strategy
Our strategy is to aim for profitable growth in each of our business
segments through the expansion of existing operations, new product development
and acquisitions. This strategy is based on our long-standing strengths,
including our ability to develop new products, improve manufacturing processes,
implement advances in technology and integrate acquired businesses.
Research and development is a key component of our internal growth
strategy.
. We own and operate nine research and development facilities in the
United States, Europe and Japan, and have received many industry awards
for our technical achievements.
. In 1998, 1997 and 1996, our research and development costs, including
depreciation of research facilities, were $287 million, $266 million and
$255 million, respectively.
. In 1998, approximately 35% of our sales were derived from products that
were five or fewer years old.
From year end 1996 through June 30, 1999, we made 13 strategic
acquisitions. Since June 30, 1999, we made two acquisitions totaling
approximately $1.199 billion. See "Recent Developments" for further discussion
of our more recent acquisitions.
Operations
As of June 30, 1999, we operated 82 major manufacturing facilities in 17
countries.
. Our principal production facilities for our coatings business are
concentrated in North America and Europe. North American production
facilities consist of 18 plants in the United States, two in Canada and
one in Mexico. Outside North America, PPG operates five plants in Italy,
four plants each in Germany and Spain, two plants each in Brazil and the
People's Republic of China and one plant each in Argentina, Australia,
England, France, the Netherlands, Portugal and Turkey.
. Our glass production facilities are concentrated in North America and
Europe and include 15 plants in the United States, three in Canada and
one each in Italy, England and the Netherlands.
. Our chemicals production is concentrated in North America, with five
plants in the United States and one each in Canada and Mexico. Outside
North America, PPG operates two plants each in Taiwan and the People's
Republic of China and one each in Australia, Brazil, France, Ireland and
the Netherlands.
We have over 32,000 PPG people worldwide, and we believe their performance
and determination are among the greatest contributors to our success.
S-3
Operating Segment Financial Data
Net Sales
---------------------------------------
Six Months Ended
Year Ended June 30
December 31 (unaudited)
--------------------- -----------------
1996 1997 1998 1998 1999
------ ------ ------ -------- --------
(Dollars in millions)
Coatings.............................. $2,902 $3,059 $3,459 $ 1,721 $ 1,915
Glass................................. 2,704 2,673 2,527 1,393 1,143
Chemicals............................. 1,612 1,647 1,524 803 692
------ ------ ------ -------- --------
Total Net Sales....................... $7,218 $7,379 $7,510 $ 3,917 $ 3,750
====== ====== ====== ======== ========
Operating Income (Loss)
---------------------------------------
Six Months Ended
Year Ended June 30
December 31 (unaudited)
--------------------- -----------------
1996 1997 1998 1998 1999
------ ------ ------ -------- --------
(Dollars in millions)
Coatings.............................. $ 519 $ 561 $ 546 $ 287 $ 280
Glass................................. 429 286 478 217 213
Chemicals............................. 374 428 354 207 78
Corporate............................. 3 (3) 14 5 (7)
------ ------ ------ -------- --------
Total Operating Income................ $1,325 $1,272 $1,392 $ 716 $ 564
====== ====== ====== ======== ========
RECENT DEVELOPMENTS
Since year end 1998, we have
made several strategic acquisitions,
including:
. On July 30, 1999, we completed our acquisition of a substantial portion
of the global automotive refinish and industrial coatings businesses of
Imperial Chemical Industries PLC (herein referred to as our "ICI
Acquisition") for approximately $677 million. These businesses had
combined sales of approximately $459 million in 1998.
. On July 30, 1999, we substantially completed our acquisition of the
coatings and sealants maker PRC-DeSoto International, Inc. from Akzo
Nobel N.V. (herein referred to as our "PRC Acquisition") for
approximately $522 million (including cash balances acquired). PRC-
DeSoto had sales of approximately $225 million in 1998.
FORWARD-LOOKING INFORMATION
This Prospectus Supplement contains statements that are not exclusively
statements of historical fact. These statements are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.
These statements include our statements regarding (i) the implementation of
our business strategy, including our intent to expand existing operations,
develop new products and seek acquisition opportunities, (ii) our ability to
enhance or maintain our industry leadership positions and (iii) our ability to
integrate current and future acquired businesses and assets, including the ICI
Acquisition and the PRC Acquisition. These statements reflect our intentions,
plans, expectations and beliefs about future events. In addition, we have based
many of these forward-looking statements on assumptions about future events
that may prove to be inaccurate. Accordingly, actual outcomes and results may
differ materially from what we have expressed or forecasted in the forward-
looking statements. Any differences could result from a variety of factors,
including the factors discussed in the Prospectus attached to the back of this
Prospectus Supplement.
S-4
SELECTED FINANCIAL INFORMATION
The following tables contain consolidated financial information for the
periods presented. The financial information below for each of the five years
ended December 31, 1998 has been derived from our audited financial statements
and should be read in conjunction with the financial statements, including the
related notes, which are included in our Annual Report on Form 10-K for each of
the respective years. The selected consolidated financial information as of and
for the six months ended June 30, 1998 and 1999 has been derived from our
unaudited consolidated financial statements, which in the opinion of management
reflect all adjustments (consisting only of normal recurring accruals)
necessary to present fairly, in accordance with generally accepted accounting
principles, the information contained therein. These unaudited financial
statements are included in our Quarterly Reports on Form 10-Q for the quarters
ended June 30, 1998 and 1999.
Six Months
Years Ended Ended June 30
December 31 (unaudited)
-------------------------------------- --------------
1994 1995 1996 1997 1998 1998 1999
------ ------ ------ ------ ------ ------ ------
(Dollars in millions, except per share data)
OPERATIONS:
Net sales............... $6,331 $7,058 $7,218 $7,379 $7,510 $3,917 $3,750
Cost of sales........... 3,865 4,212 4,340 4,397 4,476 2,331 2,268
------ ------ ------ ------ ------ ------ ------
Gross profit........... 2,466 2,846 2,878 2,982 3,034 1,586 1,482
------ ------ ------ ------ ------ ------ ------
Other expenses
(earnings);
Selling, general and
administrative......... 919 977 1,004 1,068 1,133 556 593
Depreciation........... 318 332 340 348 354 178 178
Research and
development........... 218 236 239 250 271 134 134
Interest............... 86 85 96 105 110 58 55
Business divestitures
and realignments...... 85 -- -- 102 31 15 24
Other charges.......... 114 143 82 96 77 34 52
Other earnings......... (130) (189) (123) (162) (236) (53) (66)
------ ------ ------ ------ ------ ------ ------
Total other expenses--
net................... 1,610 1,584 1,638 1,807 1,740 922 970
------ ------ ------ ------ ------ ------ ------
Income before income
taxes and minority
interest............... 856 1,262 1,240 1,175 1,294 664 512
Income taxes............ 325 480 471 435 466 256 195
Minority interest....... 16 14 25 26 27 17 10
------ ------ ------ ------ ------ ------ ------
Net income.............. $ 515 $ 768 $ 744 $ 714 $ 801 $ 391 $ 307
====== ====== ====== ====== ====== ====== ======
Basic Earnings Per
Share.................. $ 2.43 $ 3.80 $ 3.96 $ 3.97 $ 4.52 $ 2.21 $ 1.77
====== ====== ====== ====== ====== ====== ======
Diluted Earnings Per
Share.................. $ 2.42 $ 3.78 $ 3.93 $ 3.94 $ 4.48 $ 2.18 $ 1.75
====== ====== ====== ====== ====== ====== ======
FINANCIAL POSITION:
Current assets.......... $2,168 $2,275 $2,296 $2,584 $2,660 $2,811 $2,779
Current liabilities..... 1,425 1,629 1,769 1,662 1,912 1,792 1,989
Working capital......... 743 646 527 922 748 1,019 790
Capital
expenditures(/1/)...... 356 454 489 829 877 285 319
Property (net).......... 2,742 2,835 2,913 2,855 2,905 2,889 2,876
Total assets............ 5,894 6,194 6,441 6,868 7,387 7,224 7,513
Long-term debt.......... 773 736 834 1,257 1,081 1,223 1,051
Shareholders' equity.... 2,557 2,569 2,483 2,509 2,880 2,703 2,935
- --------
(/1/) Includes the cost of businesses acquired.
S-5
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the Notes and the
Debentures for general corporate purposes, including the repayment of short-
term indebtedness. The precise amounts and timing of the application of the net
proceeds will depend on our funding requirements.
In the past year, we financed a portion of the cost of our acquisitions and
some of our other capital expenditures with short-term debt. We intend to use
the net proceeds from the sale of the Notes and the Debentures to repay some of
this debt, including short-term borrowings under our commercial paper program
and under our extendible commercial notes program in an aggregate principle
amount of approximately $800,000,000, bearing interest rates ranging from 5.10%
to 5.20% and maturing in August, 1999. The proceeds from these short-term
borrowings were used in connection with the ICI Acquisition and the PRC
Acquisition.
CAPITALIZATION
The following table sets forth the capitalization of PPG at June 30, 1999,
pro forma for our issuance of $1.199 billion in short-term borrowings and the
cash acquired in connection with the ICI Acquisition and the PRC Acquisition
and pro forma as adjusted for the issuance of the Notes and the Debentures
offered hereby and the intended application of the proceeds thereof (without
deduction of expenses).
June 30, 1999
------------------------
Pro
Pro forma as
Actual forma adjusted
------- ------- --------
(Dollars in millions)
Cash and cash equivalents............................ $ 96 $ 105 $ 105
======= ======= =======
Short-term borrowings and current portion of long-
term debt........................................... $ 711 $ 1,910 $ 1,110
======= ======= =======
Long-term debt
Notes and Debentures to be offered.................. $ -- $ -- $ 800
Other long-term debt................................ 1,051 1,051 1,051
------- ------- -------
Total long-term debt.............................. 1,051 1,051 1,851
------- ------- -------
Minority interest in subsidiary companies............ 91 91 91
Shareholders' equity................................. 2,935 2,935 2,935
------- ------- -------
Total capitalization................................. $ 4,077 $ 4,077 $ 4,877
======= ======= =======
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
PPG for the periods indicated.
Six
Months
Year Ended December 31, Ended
------------------------ June 30,
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- --------
Ratio of earnings to fixed charges (/1/)..... 8.4 11.3 9.9 8.9 9.6 7.7
- --------
(/1/)For the purpose of this ratio, "earnings" consist of consolidated pre-tax
earnings, plus fixed charges exclusive of capitalized interest and less
undistributed income of unconsolidated affiliates that we account for on
the equity basis. Pre-tax earnings for the periods indicated were affected
by charges from business divestitures and realignments as follows (in
millions): $85, $102 and $31, for the years ended December 31, 1994, 1997
and 1998, respectively. There were no charges from business divestitures
and realignments for the years ended December 31, 1995 and 1996. Pre-tax
charges for business divestitures and realignments for the six months
ended June 30, 1999 were $24 million. "Fixed charges" consist of interest,
whether expensed or capitalized (including amortization of debt discount
and debt expense), and that portion of rentals which is representative of
interest.
S-6
DESCRIPTION OF NOTES AND DEBENTURES
Title:
% Notes due (the " % Notes")
% Notes due (the " % Notes" and together with the %
Notes, the "Notes")
% Debentures due , 2019 (the "Debentures")
General: The Notes and the Debentures will be issued as a series of Debt
Securities under the Indenture, dated August 1, 1982 as supplemented (the
"Indenture"), between PPG and Harris Trust and Savings Bank (the "Trustee"), as
trustee. For a description of the rights attaching to different series of Debt
Securities under the Indenture, see "Description of the Debt Securities" in the
Prospectus.
Ranking and Form: The Notes and the Debentures will be unsecured,
unsubordinated obligations of PPG and will be available only in book-entry form
through the facilities of The Depository Trust Company (the "Depositary"), and
sales or other Debentures in book-entry form may be effected only through a
participating member of the Depositary. See "Global Securities" below.
Total principal amount being issued:
$ of the % Notes
$ of the % Notes
$ of the Debentures
Due date for principal:
For the % Notes
For the % Notes
For the Debentures
Interest rate:
For the % Notes % per annum
For the % Notes % per annum
For the Debentures % per annum
Date interest starts accruing:
Interest payment dates:
First interest payment date:
Regular record dates for interest:
Global Securities: The Notes and the Debentures will be represented by one
or more Global Securities registered in the name of the nominee of the
Depositary, and will be available for purchase in denominations of $1,000 and
any integral multiple thereof. Each Global Security will be deposited with the
Depositary or its nominee or custodian.
Non-Redemption of the % Notes: The % Notes may not be redeemed by you,
or by PPG, prior to their maturity.
Optional Redemption of the % Notes and the Debentures: The % Notes and
the Debentures may be redeemed in whole or in part at any time at the option of
PPG at a redemption price equal to the greater of:
(a) 100% of the principal amount; and
(b)the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted, on a semiannual basis, at
the "Treasury Yield" (defined below) plus:
(i) basis points in the case of the % Notes; and
(ii)fifteen basis points (0.15%) in the case of the Debentures.
"Treasury Yield" means, with respect to any redemption date, the rate per
annum equal to the semi-annual yield to maturity of the Comparable Treasury
Issue (defined below), assuming a price for the Comparable Treasury
S-7
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price on the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable
to the remaining term of the Notes or Debentures (as the case may be) being
redeemed that would be utilized in pricing new issues of corporate debt
securities having comparable maturity to the Notes or Debentures being
redeemed.
"Independent Investment Banker" means Goldman, Sachs & Co. or if they are
unwilling or unavailable, an independent investment banking institution of
national standing appointed by the Trustee after consultation with PPG.
"Comparable Treasury Price" means, with respect to a redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue on
the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on the relevant business day,
the average of the bid and asked prices for the Comparable Treasury Issue
quoted in writing by the Referenced Treasury Dealers at 5:00 p.m. on the third
business day preceding the redemption date.
"Referenced Treasury Dealers" means each of Goldman, Sachs & Co. and Credit
Suisse First Boston Corporation and their respective successors or substitutes
for such firms made in accordance with the Indenture.
Trading in DTC: Indirect holders trading their beneficial interests in the
Global Securities through DTC must trade in DTC's same-day funds settlement
system and pay in immediately available funds.
Sinking Fund: There is no sinking fund.
Defeasance: The Notes and the Debentures are subject to our ability to
choose "Full Defeasance" and "Covenant Defeasance" as described in page 8 of
the attached Prospectus.
Definitive Securities: A permanent Global Security is exchangeable for
definitive Notes or Debentures, as the case may be, registered in the name of
any Person other than the Depositary or its nominee, only if:
(a)the Depositary notifies PPG that it is unwilling or unable to
continue as Depositary for such Global Security or if at any time the
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended;
(b)PPG in its sole discretion determines that such Global Security
shall be exchangeable for definitive Notes or Debentures, as the case may
be, in registered form; or
(c)any event shall have happened and be continuing that constitutes
or, after notice or lapse of time, or both, would constitute an Event of
Default with respect to the Notes and the Debentures.
This section summarizes the specific financial and legal terms of the Notes and
the Debentures that are more generally described under "Description of the Debt
Securities" beginning on page 4 of the Prospectus attached to the back of this
Prospectus Supplement. If anything described in this section is inconsistent
with the terms described under "Description of the Debt Securities" in the
attached Prospectus, you should consider the terms here to be the ones that
prevail.
S-8
UNDERWRITING
PPG Industries, Inc. and the underwriters for the offering named below have
entered into an underwriting agreement and a pricing agreement with respect to
the Notes and Debentures. Subject to certain conditions, each underwriter has
severally agreed to purchase the principal amount of Notes and Debentures
indicated in the following table. Goldman, Sachs & Co., Credit Suisse First
Boston Corporation, J.P. Morgan Securities Inc. and Chase Securities Inc. are
representatives of the underwriters.
Principal Principal Principal
Amount of Amount of Amount of
Underwriters % Notes % Notes Debentures
------------ --------- --------- ----------
Goldman, Sachs & Co.............................. $ $ $
Credit Suisse First Boston Corporation...........
J.P. Morgan Securities Inc.......................
Chase Securities Inc.............................
----- ----- -----
Total.......................................... $ $ $
===== ===== =====
----------------
Notes and Debentures sold by the underwriters to the public will initially
be offered at the initial public offering price set forth on the cover of this
Prospectus Supplement. Any Notes and Debentures sold by the underwriters to
securities dealers may be sold at a discount from the initial public offering
price of up to %, % and % of the principal amount of the % Notes, %
Notes and Debentures, respectively. Any such securities dealers may resell any
Notes and Debentures purchased from the underwriters to certain other brokers
or dealers at a discount from the initial public offering price of up to %,
% and % of the principal amount of the % Notes, % Notes and Debentures,
respectively. If all the Notes and the Debentures are not sold at the initial
offering prices, the underwriters may change the offering prices and the other
selling terms.
The Notes and Debentures are new issues of securities with no established
trading market. PPG has been advised by the underwriters that the underwriters
intend to make a market in the Notes and Debentures but are not obligated to do
so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Notes and
Debentures.
In connection with the offering, the underwriters may purchase and sell the
Notes and Debentures in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of Notes and Debentures than they are required to purchase in the
offering. Stabilizing transactions consist of certain bids or purchases made
for the purpose of preventing or retarding a decline in the market price of the
Notes and Debentures while the offering is in progress.
The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased Notes and
Debentures sold by or for the account of such underwriter in stabilizing or
short covering transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the Notes and Debentures. As a result, the price of
the Notes and Debentures may be higher than the price that otherwise might
exist in the open market. If these activities are commenced, they may be
discontinued by the underwriters at any time. These transactions may be
effected in the over-the-counter market or otherwise.
PPG estimates that its share of the total expenses of the offering,
excluding underwriting
S-9
discounts and commissions, will be approximately $400,000.
PPG has agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and may in the future engage, in investment
banking and/or commercial banking transactions with PPG and its affiliates.
S-10
- --------------------------------------------------------------------------------
P R O S P E C T U S
- --------------------------------------------------------------------------------
PPG Industries, Inc.
$1,300,000,000
Debt Securities
------------
This prospectus contains summaries of the general terms of the debt
securities. We will provide the specific terms of the debt securities, and the
manner in which they are being offered, in supplements to this prospectus. You
should read this prospectus and the related supplement carefully before you
invest.
------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer is not permitted.
- --------------------------------------------------------------------------------
The date of this Prospectus is August 3, 1999.
You should rely only on the information contained in this prospectus, in any
accompanying prospectus supplement and in material we file with the SEC. We
have not authorized anyone to provide you with any different information. We
are offering to sell, and seeking offers to buy, the securities described in
the prospectus only where offers and sales are permitted. The information
contained in this prospectus, any prospectus supplement and our filings with
the SEC is accurate only as of its date, regardless of the time of delivery of
this prospectus and any prospectus supplement or the time of any sale of the
securities. In this prospectus, unless we specifically say otherwise, the terms
PPG, we, us and our refer to PPG Industries, Inc. and not to any of its
subsidiaries.
TABLE OF CONTENTS
Page
----
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Forward-Looking Information................................................ 3
About PPG.................................................................. 4
Use of Proceeds............................................................ 4
Ratio of Earnings to Fixed Charges......................................... 4
Description of the Debt Securities......................................... 4
Form, Exchange, Registration And Transfer.................................. 11
Payment And Paying Agents.................................................. 12
Plan of Distribution....................................................... 12
Experts.................................................................... 13
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the SEC using a "shelf" registration process. Using this process, we may offer
the debt securities described in this prospectus in one or more offerings with
a total initial offering price of up to $1,300,000,000. This prospectus
provides you with a general description of the debt securities we may offer.
Each time we offer debt securities, we will provide a prospectus supplement.
The prospectus supplement will describe the specific terms of that offering.
The prospectus supplement may also add to, update or change the information
contained in this prospectus. Please carefully read this prospectus and the
prospectus supplement, in addition to the information contained in the
documents we file with the SEC, which are referred to under the next heading.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports and other information with the
SEC. You may access and read our SEC filings, including the complete
registration statement and all of the exhibits to it, through the SEC's
Internet site at www.sec.gov. This site contains reports, proxy and information
statements and other information regarding issuers that file electronically
with the SEC. You may also read and copy any document we file at the SEC's
public reference rooms located in Washington, D.C., New York, NY and Chicago,
IL. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our filings are also available at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, NY 10005.
As permitted by SEC rules, the registration statement contains exhibits and
other information that are not contained in this prospectus. Our descriptions
in this prospectus of the provisions of documents filed as exhibits to the
registration statement or otherwise filed with the SEC are only summaries of
the documents' material terms. If you want a complete description of the
content of the documents, you should obtain the documents yourself by following
the procedures described above.
2
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you directly to those documents. The information incorporated by
reference is an important part of this prospectus and should be read with the
same care. In addition, information we file with the SEC in the future will
automatically update and supersede information contained in this prospectus and
any accompanying prospectus supplement. We incorporate by reference the
documents listed below and any future filings made by us with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we sell all of the securities we are offering:
(1) PPG's Annual Report on Form 10-K for the fiscal year ended December 31,
1998 (which incorporates by reference portions of PPG's Proxy Statement
on Schedule 14A, filed March 8, 1999);
(2) PPG's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999 and June 30, 1999;
(3) PPG's Current Report on Form 8-K for the event dated June 2, 1999; and
(4) PPG's Employee Savings Plan's Annual Report on Form 11-K for the fiscal
year ended December 31, 1998.
You may request a free copy of these filings, other than exhibits, unless the
exhibits are specifically incorporated by reference into those documents, by
writing or telephoning us at the following address:
PPG Industries, Inc.
One PPG Place
Pittsburgh, PA 15272
Attention: Director of Investor Relations
(412) 434-3131
(800) 648-8160
FORWARD-LOOKING INFORMATION
This prospectus contains statements, some of which are incorporated by
reference from other documents that are not exclusively statements of
historical fact. These statements are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. You can
identify some forward-looking statements by the use of terms such as
"believes," "contemplates," "expects," "may," "will," "could," "should,"
"would," or "anticipates," other similar phrases, or the negatives of these
terms.
These statements, which are made on different dates, reflect our intentions,
plans, expectations and beliefs about future events as of their respective
dates. We base our forward-looking statements on current expectations,
estimates and projections about ourselves and the markets we serve. We caution
you that these statements are not guarantees of future performance and involve
risks and uncertainties. In addition, we have based many of these forward-
looking statements on assumptions about future events that may prove to be
inaccurate. Accordingly, actual outcomes and results may differ materially from
what we have expressed or forecasted in the forward-looking statements. Any
differences could result from a variety of factors, including the following:
. Fluctuations in domestic and international business cycles and in end
markets for our products such as aerospace, housing, transportation and
petrochemical processing;
. Competitive pressures, including the need for technology improvement,
successful new product development and introduction, continued cost
reductions, and any inability to pass increased costs of raw materials
to customers;
. Economic instability, currency fluctuation and other risks of doing
business outside of the U.S.;
. Our ongoing need to attract and retain highly qualified personnel and
key management;
. Our ability to successfully value and integrate acquisition candidates;
and
. Failure by us or our suppliers or customers to address successfully Year
2000 issues.
We undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or other developments.
3
ABOUT PPG
Our business is concentrated in three basic segments: glass, coatings and
chemicals. Our principal executive offices are located at One PPG Place,
Pittsburgh, Pennsylvania 15272.
USE OF PROCEEDS
We will use the net proceeds from the sale of the debt securities for our
general corporate purposes, which may include making additions to our working
capital, repaying indebtedness, financing acquisitions, and other purposes
described in an accompanying prospectus supplement. We will provide more
specific details regarding our use of the net proceeds in our prospectus
supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for PPG
for the periods indicated.
Six Months
Year Ended December 31, Ended
------------------------ June 30,
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----------
Ratio of earnings to fixed charges.......... 8.4 11.3 9.9 8.9 9.6 7.7
- --------
For the purpose of this ratio, "earnings" consist of consolidated pre-tax
earnings, plus fixed charges exclusive of capitalized interest and less
undistributed income of unconsolidated affiliates that we account for on the
equity basis. Pre-tax earnings for the periods indicated were affected by
charges from business divestitures and realignments as follows (in millions):
$85, $102 and $31, for the years ended December 31, 1994, 1997 and 1998,
respectively. There were no charges from business divestitures and realignments
for the years ended December 31, 1995 and 1996. Pre-tax charges for business
divestitures and realignments for the six months ended June 30, 1999 were $24
million. "Fixed charges" consist of interest, whether expensed or capitalized
(including amortization of debt discount and debt expense), and that portion of
rentals which is representative of interest.
DESCRIPTION OF THE DEBT SECURITIES
This section summarizes general terms of the debt securities that are common
to all series of our debt securities and summarizes the covenants we have made
with respect to our debt securities. Most of the financial terms and other
specific terms of your debt securities are described in our prospectus
supplement attached to this prospectus. Those terms may vary from the terms
described herein. Our prospectus supplement may also describe special federal
income tax consequences of the debt securities.
As required by federal law for all notes and debentures that are publically
offered, the debt securities offered under this prospectus are governed by a
document called an "indenture." The indenture is a contract between PPG and The
Harris Trust and Savings Bank, as trustee, dated August 1, 1982 and
supplemented from time to time. The trustee has two main roles. First, the
trustee can enforce your rights against us if we default. There are some
limitations on the extent to which the trustee acts on your behalf, described
on page 7 under "Remedies If an Event of Default Occurs." Second, the trustee
performs administrative duties for us.
The indenture contains the full text of the matters described in this
section. The indenture and the debt securities are governed by New York law. A
copy of the indenture has been filed with the SEC and is an exhibit to the
registration statement. See "Where You Can Find More Information" on page 2 for
information on how to obtain a copy of the indenture. The summary that follows
includes references to section numbers of the indenture so that you can more
easily locate these provisions.
Because this section is a summary, it does not describe every aspect of the
debt securities. This summary is subject to and qualified in its entirety by
reference to all the provisions of the indenture, including definitions
4
used in the indenture. For example, in this section we use capitalized words to
signify defined terms that have been given special meaning in the indenture. We
describe the meaning of these terms in detail in the indenture. In the
prospectus and prospectus supplement, we summarize the meaning for only the
more important terms. This summary also is subject to and qualified by
reference to the description of the particular terms of your debt securities in
the prospectus supplement.
General
. We may offer the debt securities from time to time in as many distinct
series as we may choose. All debt securities will be direct, unsecured
obligations of ours. The debt securities will have the same rank as all of
our other unsecured and unsubordinated debt. The indenture does not limit
the amount of debt that we may issue under the indenture, nor does the
indenture limit the amount of other unsecured debt or securities that we or
our subsidiaries may issue.
. Our sources of payment for the debt securities are revenues from our
operations and investments, and cash distributions from our subsidiaries.
Our subsidiaries are separate and distinct legal entities and have no
obligation whatsoever to pay any amounts due on the debt securities or to
make funds available to us. Our subsidiaries' ability to pay dividends or
make other payments or advances to us will depend upon their operating
results and will be subject to applicable laws and contractual restrictions.
The indenture does not restrict our subsidiaries from entering into
agreements that prohibit or limit their ability to pay dividends or make
other payments or advances to us.
. To the extent that we must rely on cash from our subsidiaries to pay amounts
due on the debt securities, the debt securities will be effectively
subordinated to all our subsidiaries' liabilities, including their trade
payables. This means that our subsidiaries may be required to pay all their
creditors in full before their assets are available to us. Even if we are
recognized as a creditor of our subsidiaries, our claims would be
effectively subordinated to any security interests in their assets and also
could be subordinated to some or all other claims on their assets and
earnings.
. Other than the restrictions on liens and sale/leaseback transactions
applicable to the debt securities described below, the indenture and the
debt securities do not contain any covenants or other provisions designed to
protect holders of the debt securities if we participate in a highly
leveraged transaction. The indenture and the debt securities also do not
contain provisions that give holders of the debt securities the right to
require us to repurchase their debt securities if our credit ratings decline
due to a takeover, recapitalization or similar restructuring or otherwise.
You should look in the prospectus supplement for the following terms of the
debt securities being offered:
. The title of the debt securities;
. The total principal amount of such debt securities;
. The price at which such debt securities will be issued;
. The date or dates on which such debt securities will mature and the
right, if any, to extend such date or dates;
. The annual rate or rates, if any, at which such debt securities will
bear interest;
. The date or dates from which the interest will accrue, the interest
payment dates on which the interest will be payable or the manner of
determination of the interest payment dates and the record dates for the
determination of holders to whom interest is payable;
. Any redemption, repayment or sinking fund provision;
. The form of debt securities, including whether we will issue the debt
securities in individual certificates to each holder or in the form of
temporary or permanent global securities held by a depositary on behalf
of holders;
. If the amount of payments of principal of, premium, if any, or interest
on the debt securities may be determined by reference to an index, the
manner in which that amount will be determined;
. Any additional restrictive covenants included for the benefit of holders
of the debt securities;
5
. Any additional events of default with respect to the debt securities;
and
. Any other terms of the debt securities that will not conflict with the
applicable indenture, including any changes or additions to the events
of default or covenants described in this prospectus, and any terms
which may be required by or advisable under applicable laws or
regulations. (Sections 201, 301, 305 and 1002)
Debt securities bearing no interest or interest at a rate that is below the
prevailing market rate may be sold at a discount below their stated principal
amount. Special federal income tax and other special considerations applicable
to any discounted debt securities, or to debt securities issued at face value
which are treated as having been issued at a discount for federal income tax
purposes, will be described in the applicable prospectus supplement.
Restrictive Covenants
We have agreed to three principal restrictions on our activities for the
benefit only of holders of the debt securities. The restrictive covenants
summarized below will apply to each series of debt securities as long as any of
those debt securities are outstanding, unless waived, amended or the prospectus
supplement states otherwise.
Restrictions on Liens. Some of our property may be subject to a mortgage or
other legal mechanism that gives some of our lenders preferential rights in
that property over other general creditors, including the direct holders of the
senior debt securities, if we fail to pay them back. We agree in the indenture
for the debt securities that, with certain exceptions described below, we will
not, and we will not permit any of our Restricted Subsidiaries to, become
obligated on any new debt that is secured by a lien on any of our or our
Restricted Subsidiaries' property, unless we or our Restricted Subsidiary grant
an equal or higher-ranking lien on the same property to the direct holders of
the debt securities and to the holders of any of our other debt that ranks
equally with the debt securities. (Section 1004)
The term "Restricted Subsidiary" means any subsidiary of PPG other than
foreign subsidiaries, subsidiaries in the territories or possessions of the
United States, or leasing, real estate investment or financing subsidiaries,
unless PPG's board of directors designates one of these types of subsidiaries
as a Restricted Subsidiary.
We do not need to comply with this restriction if the amount of all of our
debt that would be secured by liens on our property and the aggregate value of
sale and leaseback transactions involving our property, is not more than 5% of
the "shareholders' interest," meaning the aggregate of capital and surplus,
less treasury stock of PPG and its Restricted Subsidiaries at the end of our
latest fiscal year.
When we calculate the limits imposed by this restriction, we can disregard the
following types of liens:
. Liens on the property of any of our subsidiaries, if those liens existed
at the time the corporation becomes our subsidiary;
. Liens on property that existed at the time we acquired the property,
including property we may acquire through a merger or similar
transaction, or that we grant in order to purchase the property
(sometimes called "purchase money mortgages");
. Liens on property to finance the cost of exploration, development or
improvement of that property;
. Intercompany liens in favor of us or our wholly-owned subsidiaries;
. Liens in favor of federal or state governmental bodies or any other
country or political subdivision of another country, that we may grant
in order to assure our payments to such bodies that we owe by law or
because of a contract we entered into;
. Liens that extend, renew or replace any of the liens described above;
and
. Liens that arise in the ordinary course of business and that relate to
amounts that are not yet due or that we are contesting in good faith.
6
We are permitted to have as much unsecured debt as we may choose.
Restrictions on Sales and Leasebacks. We agree that we will not and will not
permit our Restricted Subsidiaries to enter into any sale and leaseback
transaction involving our property or the property of our Restricted
Subsidiaries, unless we comply with this restrictive covenant. A "sale and
leaseback transaction" generally is an arrangement between an operating company
and a bank, insurance company or other lender or investor where the operating
company leases a property which was or will be sold by the operating company to
that lender or investor, other than a lease for a period of three years or
less. (Section 1005)
We can comply with this restrictive covenant in one of two ways:
. If, at the time of the transaction, we could grant a lien on the
property to be leased in an amount equal to the value of the sale and
leaseback transaction without being required to grant an equal or
higher-ranking lien to the direct holders of the debt securities as
described under "Restrictions on Liens" on page 6; or
. If the proceeds of the sale of the property are at least equal to its
fair market value and we apply an amount equal to the proceeds either to
purchase property or to retire debt securities, or any other debt that
has a maturity of more than one year.
Restriction on Asset Transfers. Neither PPG nor its Restricted Subsidiaries
may transfer any assets constituting a major manufacturing or research
property, plant or facility to any unrestricted subsidiary of PPG. (Section
1005)
Events of Default
You will have special rights if an Event of Default occurs and is not cured,
as described later in this subsection. (Section 501) The term "Event of
Default" means any of the following:
. We do not pay interest on a debt security within 30 days of its due
date;
. We do not pay the principal of or premium on a debt security on its due
date;
. We do not pay any sinking fund installment on its due date;
. We remain in breach of any other term of the indenture for 60 days after
we receive a notice of default stating we are in breach;
. We have more than $10,000,000 in principal amount of our debt that
becomes accelerated as a result of a default and the default is not
cured within 10 days after we receive written notice;
. We file for bankruptcy or certain other events in bankruptcy, insolvency
or reorganization occur; or
. Any other Event of Default described in the prospectus supplement
occurs.
Remedies If an Event of Default Occurs. If an Event of Default has occurred
and continues, the trustee or the holders of 25% in principal amount of the
debt securities of the affected series may declare the entire principal amount
of all the debt securities of the affected series to be due and immediately
payable. This is called a "declaration of acceleration of maturity." Under some
circumstances, a declaration of acceleration of maturity may be canceled by the
holders of at least a majority in principal amount of the debt securities of
that series. (Section 502)
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indentures at the request
of any holders unless the holders offer the trustee reasonable protection from
expenses and liability. (Section 601)
If reasonable protection from expenses and liabilities is provided, the
holders of a majority in principal amount of the outstanding debt securities of
the relevant series may direct the time, method and place of conducting any
lawsuit or other formal legal action seeking any remedy available to the
trustee. The trustee may refuse to follow those directions in some
circumstances. (Section 512)
7
"Street Name" and other indirect holders who are described on page 9 should
consult their banks or brokers for information on how to give notice or
direction to or make a request of the trustee and to make or cancel a
declaration of acceleration.
We will furnish to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
indenture and the debt securities, or else specifying any default. (Section
1009)
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company. We
are also permitted to sell substantially all of our assets. However, we may not
take any of these actions unless the following conditions are met (Section
801):
. If we merge out of existence or sell our assets, the other company must
be a corporation organized under the laws of a state or the District of
Columbia or under federal law and it must agree to be legally
responsible for the debt securities; and
. The merger, sale of assets or other transaction must not cause a default
on the debt securities. For purposes of this no default test, a default
would include an Event of Default that has occurred and not been cured,
and would also include any event that would be an Event of Default if
the requirements for giving us default notice or our default having to
exist for a specific period of time were disregarded.
Defeasance
The following discussion of full defeasance and covenant defeasance will be
applicable to a series of debt securities only if we choose to have them apply
to that series. If we do so choose, we will state that in the prospectus
supplement. (Section 1301)
Full Defeasance. If there is a change in federal tax law, as described below,
we can legally release ourselves from any payment or other obligations on the
debt securities (called "full defeasance") if we put in place the following
other arrangements for you to be repaid:
. We must deposit in trust for the benefit of all direct holders of the
debt securities a combination of money and U.S. government or U.S.
government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on
their various due dates.
. There must be a change in current federal tax law or an IRS ruling that
lets us make the above deposit without causing you to be taxed on the
debt securities any differently than if we did not make the deposit and
just repaid the debt securities ourselves. (Under current federal tax
law, the deposit and our legal release from the debt securities would be
treated as though we took back the debt securities and gave you your
share of the cash and notes or bonds deposited in trust. In that event,
you could recognize gain or loss on the debt securities you give back to
us.)
. We must deliver to the trustee a legal opinion of our counsel confirming
the tax law change described above. (Sections 1302 and 1304)
. If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the debt
securities. You could not look to us for repayment in the unlikely event
of any shortfall. Conversely, the trust deposit would most likely be
protected from claims of our lenders and other creditors if we ever
become bankrupt or insolvent.
Covenant Defeasance. Under current federal tax law, we can make the same type
of deposit described above and be released from some of the restrictive
covenants in the debt securities. This is called "covenant defeasance". In that
event, you would lose the protection of those restrictive covenants but would
gain the
8
protection of having money and securities set aside in trust to repay the debt
securities. In order to achieve covenant defeasance, we must do the following:
. We must deposit in trust for the benefit of all direct holders of the
debt securities a combination of money and U.S. government or U.S.
government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on
their various due dates.
. We must deliver to the trustee a legal opinion of our counsel confirming
that under current federal income tax law we may make the above deposit
without causing you to be taxed on the debt securities any differently
than if we did not make the deposit and just repaid the debt securities
ourselves.
If we accomplish covenant defeasance, the following provisions of the
indenture and the debt securities, among other, would no longer apply:
. Our obligations described under the caption "Restrictive Covenants" of
debt securities and described in the prospectus supplement; and
. The Events of Default relating to breach of covenants and acceleration
of the maturity of other debt, described on page 7 under "Event of
Default".
If we accomplish covenant defeasance, you can still look to us for repayment
of the debt securities if there were a shortfall in the trust deposit. In fact,
if one of the remaining Events of Default occurred (such as our bankruptcy) and
the debt securities become immediately due and payable, there may be such a
shortfall. Depending on the event causing the default, you may not be able to
obtain payment of the shortfall. (Sections 1303 and 1304)
Modification and Waiver
There are three types of changes we can make to the indenture and the debt
securities.
Changes Requiring Approval of All Holders. First, there are changes that
cannot be made to your debt securities without the approval of every holder
affected by the proposed change. A list of those types of changes follows:
. Change the due date of the principal or interest on a debt security;
. Reduce any amounts due on a debt security;
. Change the currency or place of payment on a debt security;
. Impair your right to sue for payment;
. Reduce the percentage of holders of debt securities whose consent is
needed to modify or amend the indenture; and
. Reduce the percentage of holders of debt securities whose consent is
needed to waive compliance with some provisions of the indentures or to
waive some defaults. (Section 902)
Changes Requiring Approval of Less Than All Holders. The second type of
change to the indentures and the debt securities is the kind that requires the
approval of less than all holders of the affected series. This category
includes changes that require approval of holders owning either 66 2/3% or, in
some cases, a majority of the outstanding principal amount of the affected
series.
Most changes to the indenture and debt securities cannot be made without a 66
2/3% vote. The same 66 2/3% vote is required to waive compliance with all or
part of the restrictive covenants described beginning on page 6. (Section 1010)
9
A majority vote is required to waive any default under the indenture, other
than a default that results from the breach of a covenant or other provision
that cannot be amended without the consent of all the holders of the affected
series. (Section 513)
Changes Not Requiring Approval of Holders. The third type of change does not
require any vote by holders of debt securities. This type of change is limited
to clarifications and other changes that would not adversely affect holders of
the debt securities.
With respect to any vote of holders of debt securities, we will generally be
entitled to set any day as a record date for the purpose of determining the
holders of outstanding debt securities that are entitled to vote or take other
action under the indenture.
"Street Name" and other indirect holders should consult their banks or
brokers for information on how approval may be granted or denied if we seek to
change the indenture or the debt securities or request a waiver.
"Street Name" and Other Indirect Holders
Investors who hold securities in accounts at banks or brokers will generally
not be recognized by us as legal holders of debt securities. This is called
holding in "Street Name." Instead, we would recognize only the bank or broker,
or the financial institution that the bank or broker uses to hold its
securities. These intermediary banks, brokers and other financial institutions
pass along principal, interest and other payments on the debt securities,
either because they agree to do so in their customer agreements or because they
are legally required to. If you hold debt securities in "Street Name," you
should check with your own institution to find out:
. How it handles payments and notices;
. Whether it imposes fees or charges;
. How it would handle voting if applicable;
. Whether and how you can instruct it to send you debt securities
registered in your own name so you can be a direct holder as described
below; and
. If applicable, how it would pursue rights under the debt securities if
there were a default or other event triggering the need for holders to
act to protect their interests.
Direct Holders
Our obligations, as well as the obligations of the trustees under the
indenture and those of any third parties employed by us or the trustees, run
only to persons who are registered as holders of debt securities. As noted
above, we do not have obligations to you if you hold in "Street Name" or other
indirect means, either because you choose to hold debt securities in that
manner or because the debt securities are issued in the form of global
securities as described below. For example, once we make payment to the
registered holder, we have no further responsibility for the payment even if
that holder is legally required to pass the payment along to you as a "Street
Name" customer but does not do so.
Global Securities
What is a Global Security? A global security is a special type of indirectly
held debt security as described above under " "Street Name' and Other Indirect
Holders." If we choose to issue debt securities in the form of global
securities, the ultimate beneficial owners can only hold the debt securities in
"Street Name". We do this by requiring that the global security be registered
in the name of a financial institution we select and by requiring that the debt
securities included in the global security not be transferred to the name of
any other direct holder unless the special circumstances described below occur.
The financial institution that acts as the sole direct holder of the global
security is called the "depositary." Any person wishing to own a debt security
must do so indirectly by virtue of an account with a broker, bank or other
financial institution that in turn has
10
an account with the depositary. The prospectus supplement indicates whether
your series of debt securities will be issued only in the form of global
securities and, if so, describes the specific terms of the arrangement with the
depositary.
Special Investor Considerations for Global Securities. As an indirect holder,
an investor's rights relating to a global security will be governed by the
account rules of the investor's financial institution and of the depositary, as
well as general laws relating to securities transfers. We do not recognize this
type of investor as a holder of debt securities and instead deal only with the
depositary that holds the global security.
An investor should be aware that if debt securities are issued only in the form
of global securities:
. The investor cannot get debt securities registered in his or her own
name;
. The investor cannot receive physical certificates for his or her
interest in the debt securities;
. The investor will be a "Street Name" holder and must look to his or her
own bank or broker for payments on the debt securities and protection of
his or her legal rights relating to the debt securities, as described
under " "Street Name' and Other Indirect Holders" on page 9;
. The investor may not be able to sell interests in the debt securities to
some insurance companies and other institutions that are required by law
to own their securities in the form of physical certificates; and
. The depositary's policies will govern payments, transfers, exchange and
other matters relating to the investor's interest in the global
security. We and the trustee have no responsibility for any aspect of
the depositary's actions or for its records of ownership interests in
the global security. We and the trustee also do not supervise the
depositary in any way.
Special Situations When The Global Security Will be Terminated. In a few
special situations, the global security will terminate and interests in it will
be exchanged for physical certificates representing debt securities. After that
exchange, the choice of whether to hold debt securities directly or in "Street
Name" will be up to the investor. Investors must consult their own bank or
brokers to find out how to have their interests in debt securities transferred
to their own name, so that they will be direct holders. The rights of "Street
Name" investors and direct holders in the debt securities have been previously
described in subsections entitled " "Street Name' and Other Indirect Holders"
and "Direct Holders" on pages 9 and 10.
The special situations for termination of a global security are:
. When the depositary notifies us that it is unwilling, unable or no
longer qualified to continue as depositary and we do not appoint a
successor depositary;
. When an Event of Default on the debt securities has occurred and has not
been cured; and
. At any time if we decide to terminate a global security.
The prospectus supplement may also list additional situations for terminating
a global security that would apply only to the particular series of debt
securities covered by the prospectus supplement. When a global security
terminates, only the depositary is responsible for deciding the names of the
institutions that will be the initial direct holders.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
We will issue the debt securities in registered form, without interest
coupons, and, unless we inform you otherwise in the prospectus supplement, only
in denominations of $1,000 and multiples of $1,000. We will not charge a
service charge for any registration of transfer or exchange of the debt
securities. We may, however, require the payment of any tax or other
governmental charge payable for that registration.
Debt securities of any series will be exchangeable for other debt securities
of the same series, the same total principal amount and the same terms but in
different authorized denominations in accordance with the
11
indenture. Holders may present debt securities for registration of transfer at
the office of the security registrar or any transfer agent we designate. The
security registrar or transfer agent will effect the transfer or exchange when
it is satisfied with the documents of title and identity of the person making
the request.
We have appointed the trustee under the indenture as security registrar for
the debt securities issued under the indenture. If the prospectus supplement
refers to any transfer agents initially designated by us, we may at any time
rescind that designation or approve a change in the location through which any
transfer agent acts. We are required to maintain an office or agency for
transfers and exchanges in each place of payment. We may at any time designate
additional transfer agents for any series of debt securities.
In the case of any redemption, neither the security registrar nor the
transfer agent will be required to register the transfer or exchange of any
debt security during a period beginning 15 business days prior to the mailing
of the relevant notice of redemption and ending on the close of business on the
day of mailing of the notice, except the unredeemed portion of any debt
security being redeemed in part.
PAYMENT AND PAYING AGENTS
Unless we inform you otherwise in the prospectus supplement:
. Payments on the debt securities will be made in U.S. dollars by check
mailed to the holder's registered address or, with respect to global
securities, by wire transfer;
. We will make interest payments to the person in whose name the debt
security is registered at the close of business on the record date for
the interest payment; and
. The trustee under the indenture will be designated as our paying agent
for payments on debt securities issued under the indenture. We may at
any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any
paying agent acts.
Subject to the requirements of any applicable abandoned property laws, the
trustee and paying agent will pay to us upon written request any money held by
them for payments on the debt securities that remain unclaimed for two years
after the date when the payment was due. After payment to us, holders entitled
to the money must look to us for payment. In that case, all liability of the
trustee or paying agent with respect to that money will cease.
PLAN OF DISTRIBUTION
We may sell the debt securities (a) through underwriters or dealers, (b)
directly to purchasers or (c) through agents. The prospectus supplement will
include the following information, if applicable:
. The terms of the offering;
. The names of any underwriters or dealers;
. The names of any agents;
. The purchase price of the debt securities from us;
. The net proceeds to us from the sale of the debt securities;
. Any delayed delivery contracts;
. Any underwriting discounts and other items constituting underwriters'
compensation;
. The initial public offering price; and
. Any discounts or concessions allowed or reallowed or paid to dealers.
12
Sale Through Underwriters or Dealers
If we use underwriters in the sale, the underwriters will acquire the debt
securities for their own account. The underwriters may resell the debt
securities from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Underwriters may offer debt securities to the public
either through underwriting syndicates represented by one or more managing
underwriters or directly by one or more firms acting as underwriters. Unless we
inform you otherwise in the prospectus supplement, the underwriters will be
obligated to purchase all the offered debt securities if they purchase any of
them. The underwriters may change from time to time any initial public offering
price and any discounts or concessions allowed, reallowed or paid to dealers.
During and after an offering through underwriters, the underwriters may
purchase and sell the debt securities in the open market. These transactions
may include overallotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters may also impose a penalty bid, whereby selling concessions allowed
to syndicate members or other broker-dealers for the offered debt securities
sold for their account may be reclaimed by the syndicate if such offered debt
securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the offered debt securities, and may cause the open market
price to be higher than the price that might otherwise prevail. If commenced,
these activities may be discontinued at any time.
If we use dealers in the sale of debt securities, we will sell the debt
securities to them as principals. They may then resell those debt securities to
the public at varying prices determined by the dealers at the time of resale.
We will include in the prospectus supplement the names of the dealers and the
terms of the transaction.
Direct Sales and Sales Through Agents
We may sell the debt securities directly. In this case, no underwriters or
agents would be involved. We may also sell the debt securities through agents
we designate from time to time. In the prospectus supplement, we will name any
agent involved in the offer or sale of the offered debt securities, and we will
describe any commissions payable by us to the agent. Unless we inform you
otherwise in the prospectus supplement, any agent will agree to use its
reasonable best efforts to solicit purchases for the period of its appointment.
Delayed Delivery Contracts
If we so indicate in the prospectus supplement, we may authorize agents,
underwriters or dealers to solicit offers from institutions to purchase debt
securities from us at the public offering price under delayed delivery
contracts. These contracts would provide for payment and delivery on a
specified date in the future. The contracts would be subject only to those
conditions described in the prospectus supplement. The prospectus supplement
will describe the commission payable for solicitation of these contracts.
Indemnification
We may have agreements with the agents, dealers or underwriters to indemnify
them against certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribute with respect to payments that the
agents, dealers or underwriters may be required to make.
EXPERTS
The consolidated financial statements and the related financial statement
schedule as of December 31, 1998 and 1997 and for each of the three years in
the period ended December 31, 1998 incorporated in this prospectus by reference
from PPG's Annual Report on Form 10-K for the year ended December 31, 1998,
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their reports, which are also incorporated in this prospectus by reference, and
have been incorporated in reliance upon the reports of Deloitte & Touche LLP
given upon their authority as experts in accounting and auditing.
13
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely
on any unauthorized information or representations. This prospectus is an
offer to sell only the Notes and the Debentures offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
-----------
TABLE OF CONTENTS
Prospectus Supplement
Page
----
PPG Industries, Inc........................................................ S-2
Recent Developments........................................................ S-4
Forward-Looking Information................................................ S-4
Selected Financial Information............................................. S-5
Use of Proceeds............................................................ S-6
Capitalization............................................................. S-6
Ratio of Earnings to Fixed Charges......................................... S-6
Description of Notes and Debentures........................................ S-7
Underwriting............................................................... S-9
Prospectus
About this Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Forward-Looking Information................................................ 3
About PPG.................................................................. 4
Use of Proceeds............................................................ 4
Ratio of Earnings to Fixed Charges......................................... 4
Description of the Debt Securities......................................... 4
Form, Exchange, Registration and Transfer.................................. 11
Payment and Paying Agents.................................................. 12
Plan of Distribution....................................................... 12
Experts.................................................................... 13
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$800,000,000
PPG Industries, Inc.
$ % Notes due
$ % Notes due
$ % Debentures due , 2019
-----------
PROSPECTUS SUPPLEMENT
-----------
Goldman, Sachs & Co.
Credit Suisse First Boston
J.P. Morgan & Co.
Chase Securities Inc.
Representatives of the Underwriters
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------