SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1998 Commission File Number 1-1687
------------------- ----------
PPG INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-0730780
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
One PPG Place, Pittsburgh, Pennsylvania 15272
(Address of principal executive offices) (Zip Code)
(412) 434-3131
(Registrant's telephone number, including area code)
As of March 31, 1998, 177,363,906 shares of the Registrant's common stock, par
value $1.66-2/3 per share, were outstanding.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--------- -------
PPG INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
PAGE(S)
Part I. Financial Information
Item 1. Financial Statements:
Condensed Statement of Income.................................... 2
Condensed Balance Sheet.......................................... 3
Condensed Statement of Cash Flows................................ 4
Notes to Condensed Financial Statements.......................... 5-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 9-12
Part II. Other Information
Item 2. Change in Securities and Use of Proceeds................... 13
Item 4. Submission of Matters to a Vote of Security Holders........13-14
Item 6. Exhibits and Reports on Form 8-K........................... 14
Signature............................................................. 15
- 1 -
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- ------------------------------
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Statement of Income (Unaudited)
-----------------------------------------
(Millions, except per share amounts)
Three Months Ended March 31
------------------------------------------
1998 1997
-------------------- --------------------
Net sales.......................................................... $1,913 $1,777
Cost of sales...................................................... 1,145 1,087
------ ------
Gross profit.................................................... 768 690
------ ------
Other expenses (earnings):
Selling, general and administrative............................. 263 248
Depreciation.................................................... 89 85
Research and development........................................ 67 58
Interest........................................................ 30 25
Other charges................................................... 18 20
Other earnings.................................................. (27) (25)
------ ------
Total other expenses - net.................................. 440 411
------ ------
Income before income taxes and minority interest................... 328 279
Income taxes....................................................... 126 106
Minority interest.................................................. 10 7
------ ------
Net income......................................................... $ 192 $ 166
====== ======
Earnings per share (Note 2)........................................ $ 1.08 $ 0.91
====== ======
Earnings per share - assuming dilution (Note 2).................... $ 1.07 $ 0.90
====== ======
Dividends per share................................................ $ 0.34 $ 0.33
====== ======
The accompanying notes to the condensed financial statements are an integral
part of this statement.
- 2 -
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Balance Sheet (Unaudited)
-----------------------------------
March 31 Dec. 31
1998 1997
------------------- -------------------
Assets (Millions)
- ------
Current Assets:
Cash and cash equivalents....................................... $ 141 $ 129
Receivables-net................................................. 1,443 1,353
Inventories (Note 3)............................................ 898 863
Other........................................................... 247 239
-------- --------
Total current assets........................................ 2,729 2,584
Property (less accumulated depreciation of
$3,938 million and $3,903 million).............................. 2,878 2,855
Investments........................................................ 249 219
Other assets....................................................... 1,250 1,210
-------- --------
Total....................................................... $ 7,106 $ 6,868
======== ========
Liabilities and Shareholders' Equity
- ------------------------------------
Current liabilities:
Short-term borrowings and current
portion of long-term debt................................... $ 522 $ 444
Accounts payable and accrued liabilities........................ 1,212 1,210
Income taxes.................................................... 84 8
-------- --------
Total current liabilities................................... 1,818 1,662
Long-term debt..................................................... 1,230 1,257
Deferred income taxes.............................................. 409 406
Accumulated provisions............................................. 421 421
Other postretirement benefits...................................... 534 531
-------- --------
Total liabilities........................................... 4,412 4,277
-------- --------
Commitments and contingent liabilities (Note 7)...................
Minority interest.................................................. 87 82
-------- --------
Shareholders' equity:
Common stock.................................................... 484 484
Additional paid-in capital...................................... 103 99
Retained earnings............................................... 5,371 5,239
Treasury stock.................................................. (3,029) (2,990)
Unearned compensation........................................... (150) (162)
Accumulated other comprehensive loss (Note 4)................... (172) (161)
-------- --------
Total shareholders' equity.................................. 2,607 2,509
-------- --------
Total....................................................... $ 7,106 $ 6,868
======== ========
The accompanying notes to the condensed financial statements are an integral
part of this statement.
- 3 -
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Statement of Cash Flows (Unaudited)
---------------------------------------------
Three Months Ended March 31
-------------------------------------------
1998 1997
-------------------- ---------------------
(Millions)
Cash from operating activities.................................... $ 219 $ 163
------ ------
Investing activities:
Capital spending............................................... (180) (103)
Reduction of investments....................................... 1 3
Other.......................................................... 1 1
------ ------
Cash used for investing activities......................... (178) (99)
------ ------
Financing activities:
Net change in borrowings with
maturities of three months or less......................... 78 (63)
Proceeds from other short-term debt............................ 40 26
Repayment of other short-term debt............................. (31) (23)
Proceeds from long-term debt................................... 4 203
Repayment of long-term debt.................................... (32) (24)
Repayment of loans by employee stock
ownership plan............................................. 13 12
Purchase of treasury stock, net................................ (41) (94)
Dividends paid................................................. (60) (60)
------ ------
Cash used for financing activities......................... (29) (23)
------ ------
Effect of currency exchange rate changes
on cash and cash equivalents................................... - (1)
------ ------
Net increase in cash and cash equivalents......................... 12 40
Cash and cash equivalents, beginning of period.................... 129 70
------ ------
Cash and cash equivalents, end of period.......................... $ 141 $ 110
====== ======
The accompanying notes to the condensed financial statements are an integral
part of this statement.
- 4 -
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (Unaudited)
---------------------------------------------------
1. Financial Statements
--------------------
The condensed 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) at March 31, 1998, and the results of their operations and
their cash flows for the three months ended March 31, 1998 and 1997. These
condensed financial statements should be read in conjunction with the
financial statements and notes thereto incorporated by reference in PPG's
Annual Report on Form 10-K for the year ended December 31, 1997.
The results of operations for the three months ended March 31, 1998 are not
necessarily indicative of the results to be expected for the full year.
2. Earnings Per Share
------------------
The following table reflects the earnings per share calculations for the
three months ended March 31, 1998 and 1997.
March 31
(Millions, except per share amounts) 1998 1997
------------------- --------------------
Earnings per common share
Net income.............................................. $ 192 $ 166
------ ------
Weighted average common shares outstanding.............. 177.5 182.3
------ ------
Earnings per common share............................... $ 1.08 $ 0.91
====== ======
Earnings per common share - assuming dilution
Net income.............................................. $ 192 $ 166
------ ------
Weighted average common shares outstanding.............. 177.5 182.3
Effect of dilutive securities
Stock options......................................... 0.9 0.9
Other stock compensation plans........................ 1.0 1.0
------ ------
Potentially dilutive common shares...................... 1.9 1.9
------ ------
Adjusted common shares outstanding...................... 179.4 184.2
------ ------
Earnings per common share - assuming dilution........... $ 1.07 $ 0.90
====== ======
- 5 -
3. Inventories
-----------
Inventories at March 31, 1998 and December 31, 1997 are detailed below.
March 31 Dec. 31
1998 1997
------------------- --------------------
(Millions)
Finished products and work in process...................... $ 625 $ 608
Raw materials.............................................. 159 141
Supplies................................................... 114 114
----- -----
Total.................................................. $ 898 $ 863
===== =====
Most domestic and certain foreign inventories are valued using the last-in,
first-out method. If the first-in, first-out method had been used,
inventories would have been $187 million and $191 million higher at March
31, 1998 and December 31, 1997, respectively.
4. Comprehensive Income
--------------------
During the three months ended March 31, 1998, the Company adopted the
provisions of Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income." Total comprehensive income for the three
months ended March 31, 1998 and 1997 was as follows:
Three Months Ended March 31
-------------------------------------------
1998 1997
-------------------- ---------------------
(Millions)
Net income................................................. $ 192 $ 166
Other comprehensive income
Unrealized currency translation loss.................... (11) (58)
----- -----
Total comprehensive income............................. $ 181 $ 108
===== =====
As of March 31, 1998 and December 31, 1997, accumulated other comprehensive
loss, as reflected on the condensed balance sheet, was comprised of the
following:
March 31 Dec. 31
1998 1997
-------------------- ---------------------
(Millions)
Minimum pension liability adjustment....................... $ (25) $ (25)
Currency translation adjustment............................ (147) (136)
----- -----
Accumulated other comprehensive loss................... $(172) $(161)
===== =====
- 6 -
5. Cash Flow Information
---------------------
Cash payments for interest were $23 million and $19 million for the three
months ended March 31, 1998 and 1997, respectively. Net cash payments for
income taxes for the three months ended March 31, 1998 and 1997 were $44
million and $46 million, respectively.
6. Business Segment Information
----------------------------
Three Months Ended March 31
------------------------------------------
1998 1997
-------------------- --------------------
(Millions)
Net sales:
Coatings.................................................... $ 821 $ 713
Glass....................................................... 687 659
Chemicals................................................... 405 405
------ ------
Total.................................................... $1,913 $1,777
====== ======
Operating income:
Coatings.................................................... $ 130 $ 124
Glass....................................................... 109 89
Chemicals................................................... 111 89
------ ------
Total.................................................... 350 302
Interest expense - net........................................ (27) (23)
Other unallocated corporate income - net...................... 5 -
------ ------
Income before income taxes and minority interest.............. $ 328 $ 279
====== ======
7. Commitments and Contingent Liabilities
--------------------------------------
PPG is involved in a number of lawsuits and claims, both actual and
potential, including some which it has asserted against others, in which
substantial money damages are sought. These lawsuits and claims relate to
product liability, contract, patent, antitrust, environmental and other
matters arising out of the conduct of PPG's business. PPG's lawsuits and
claims against others include claims against insurers and other third
parties with respect to actual and contingent losses related to
environmental matters. Management believes that the outcome of all
lawsuits and claims involving PPG, in the aggregate, will not have a
material effect on PPG's consolidated financial position, results of
operations or liquidity.
It is PPG's policy to accrue expenses for environmental contingencies when
it is probable that a liability has been incurred and the amount of loss
can be reasonably estimated. Reserves for environmental contingencies are
exclusive of claims against third parties and are not discounted. As of
March 31, 1998 and December
- 7 -
31, 1997, PPG had reserves for environmental contingencies totaling $98
million and $100 million. Pre-tax charges against income for environmental
remediation costs for the three months ended March 31, 1998 and 1997
totaled $3 million and $7 million, respectively. Cash outlays related to
such charges aggregated $5 million and $7 million for the three months
ended March 31, 1998 and 1997, respectively.
Management anticipates that the resolution of the Company's environmental
contingencies, which will occur over an extended period of time, will not
result in future annual charges against income that are significantly
greater than those recorded in recent years. It is possible, however, that
technological, regulatory and enforcement developments, the results of
environmental studies and other factors could alter this expectation. In
management's opinion, the Company operates in an environmentally sound
manner and the outcome of the Company's environmental contingencies will
not have a material effect on PPG's financial position or liquidity.
In addition to the amounts currently reserved, the Company may be subject
to loss contingencies related to environmental matters estimated to be as
much as $200 million to $400 million, which range is unchanged from
December 31, 1997. Such unreserved losses are reasonably possible but are
not currently considered to be probable of occurrence. Although insurers
and other third parties may cover a portion of these costs, to the extent
they are incurred, any potential recovery is not included in this
unreserved exposure to future loss. The Company's environmental
contingencies are expected to be resolved over an extended period of time.
Although the unreserved exposure to future loss relates to all sites, a
significant portion of such exposure involves three operating plant sites
and one closed plant site. Initial remedial actions are occurring at these
sites. Studies to determine the nature of the contamination are reaching
completion and the need for additional remedial actions, if any, is
presently being evaluated. The loss contingencies related to the remaining
portion of such unreserved exposure include significant unresolved issues
such as the nature and extent of contamination, if any, at sites and the
methods that may have to be employed should remediation be required.
With respect to certain waste sites, the financial condition of any other
potentially responsible parties also contributes to the uncertainty of
estimating PPG's final costs. Although contributors of waste to sites
involving other potentially responsible parties may face governmental
agency assertions of joint and several liability, in general, final
allocations of costs are made based on the relative contributions of
wastes to such sites. PPG is generally not a major contributor to such
sites.
The impact of evolving programs, such as natural resource damage claims,
industrial site reuse initiatives and state voluntary remediation
programs, also adds to the present uncertainties with regard to the
ultimate resolution of this unreserved exposure to future loss. The
Company's assessment of the potential impact of these environmental
contingencies is subject to considerable uncertainty due to the complex,
ongoing and evolving process of investigation and remediation, if
necessary, of such environmental contingencies.
- 8 -
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
-------------
Performance Overview
Sales increased 8% during the first quarter of 1998 to $1.91 billion compared to
$1.78 billion in the first quarter of 1997. Overall, sales increased as a
result of a 12% improvement in volumes, including sales related to several
acquisitions made in late 1997 and early 1998, primarily in our coatings
segment. These improvements were partially offset by a 3% decline from foreign
currency translation due to the strong U.S. dollar and a 1% decline due to the
absence of sales from our surfactants business which was divested late in 1997.
The gross profit percentage increased to 40.1% compared to 38.8% in the prior
year's quarter. The benefits realized from favorable sales mix changes in all
our segments, improved manufacturing efficiencies within the glass segment, and
lower raw materials and energy costs in our chemicals segment were partially
offset by lower sales prices within our glass segment, and the negative effects
of inflation.
Net income and earnings per share for the first quarter of 1998 were $192
million and $1.08, respectively, compared to net income and earnings per share
of $166 million and $0.91, respectively, for the first quarter of 1997. The
increase in net income in the current quarter is attributable to the same
factors that contributed to the gross profit percentage increase described
above, offset in part by higher selling, general and administrative expenses in
our coatings segment as a result of increased sales volume, the negative effects
of inflation on overhead costs in all our segments, increased interest costs due
to higher outstanding indebtedness, and higher income tax expense. Reduced
average shares outstanding, due to repurchases of PPG's common stock by the
Company, favorably impacted earnings per share in the current quarter.
Performance of Business Segments
Coatings sales increased 15% to $821 million in the first quarter of 1998
compared to $713 million in the same quarter of 1997. A 19% sales volume
increase, including sales from recent acquisitions, was partially offset by a 4%
decline from foreign currency translation. Sales generated from several
acquisitions in late 1997 and early 1998 contributed substantially to the
segment's sales growth in the quarter. Sales also increased due to the impact
of worldwide volume gains for industrial coatings and automotive refinish
products, volume increases in the North American architectural coatings
business, and improved European and North American automotive products volumes.
These sales improvements were partially offset by the unfavorable effects of
foreign currency translation. Operating income increased to $130 million from
$124 million when comparing the first quarter of 1998 and 1997. The improvement
in operating income was due to the improved worldwide volumes for automotive
refinish products, volume increases for our North American architectural
coatings, industrial coatings and automotive products businesses, and the
favorable impact of recent acquisitions. Partially offsetting these positive
factors were higher selling, general and administrative expenses principally
associated with the increased sales levels in our North American industrial
coatings, automotive products, and architectural coatings businesses, and higher
legal expenses.
- 9 -
Glass sales increased 4% to $687 million in the first quarter of 1998 compared
to $659 million in the first quarter of 1997. An 8% sales volume increase,
including sales associated with an acquisition, was partially offset by a 1%
decline in sales prices in certain businesses, and a 3% decline due to foreign
currency translation. Volume increases for our North American automotive
replacement and automotive original glass products, European glass products, and
worldwide fiber glass products were partially offset by lower selling prices for
our North American automotive replacement glass and flat glass products.
Operating income increased to $109 million in the first quarter of 1998 compared
to $89 million in the prior year's quarter. The increase in operating income was
due to the same factors that contributed to the higher sales levels, improved
manufacturing efficiencies, and increased equity earnings. The negative effects
of inflation and foreign currency translation only partially offset these
favorable factors.
Chemicals sales remained constant at $405 million when comparing the first
quarter of 1998 and the first quarter of 1997. A 7% sales volume increase was
fully offset by a 6% reduction associated with the divestiture of the
surfactants business in late 1997 and a 1% decline from foreign currency
translation. Sales volume increases were principally related to our optical
products business and, to a lesser degree, chlor-alkali and derivative products.
Operating income increased to $111 million in the current quarter versus $89
million in the comparable quarter of the prior year. The improvement in
operating income was due to the favorable volume increases in our optical
products business previously discussed, lower raw material and energy costs
within our chlor-alkali and derivatives business, and lower environmental costs.
Other Factors
The increase in accounts receivable principally results from higher sales in the
first quarter of 1998 compared with the fourth quarter of 1997.
The increase in short-term borrowings principally results from the issuance of
commercial paper in the first quarter of 1998.
The increase in income tax expense in the current quarter is the result of
higher pre-tax earnings as well as an increased effective tax rate, which
increased to 38.5% during the first quarter of 1998 compared to 38.0% in the
first quarter of 1997, due to higher anticipated taxes on foreign earnings. The
increase in income taxes payable was principally the result of the timing of
estimated tax payments.
Acquisitions and Divestitures
In January, 1998, the Company completed the purchase of the automotive coatings
business of Helios-Lacke Bollig & Kemper GmbH & Co. KG of Cologne, Germany, and
the purchase from Chrysler Corporation of certain assets of an automotive glass
plant in Evart, Michigan. The Company has performed preliminary purchase price
allocations as of March 31, 1998 and the operating activity associated with
these acquisitions has been reflected in the Company's operations from the
acquisition dates.
PPG's European flat and automotive glass businesses are not performing at levels
that meet the Company's strategic and performance objectives. Therefore, the
Company is actively engaged in discussions to sell these businesses. The annual
sales generated by these businesses total approximately $450 million.
- 10 -
Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 130, "Reporting Comprehensive Income." The
adoption of this standard by the Company during the three months ended March 31,
1998 had no impact on the Company's financial position, results of operations or
cash flows.
On March 4, 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," which is effective for fiscal years beginning after December 15,
1998. The Company is currently in the process of evaluating the impact of this
new standard on its financial position and results of operations.
Commitments and Contingent Liabilities, including Environmental Matters
PPG is involved in a number of lawsuits and claims, both actual and potential,
including some which it has asserted against others, in which substantial money
damages are sought. These lawsuits and claims relate to product liability,
contract, patent, antitrust, environmental and other matters arising out of the
conduct of PPG's business. PPG's lawsuits and claims against others include
claims against insurers and other third parties with respect to actual and
contingent losses related to environmental matters. Management believes that the
outcome of all lawsuits and claims involving PPG, in the aggregate, will not
have a material effect on PPG's consolidated financial position, results of
operations or liquidity.
It is PPG's policy to accrue expenses for environmental contingencies when it is
probable that a liability has been incurred and the amount of loss can be
reasonably estimated. Reserves for environmental contingencies are exclusive of
claims against third parties and are not discounted. As of March 31, 1998 and
December 31, 1997, PPG had reserves for environmental contingencies totaling $98
million and $100 million. Pre-tax charges against income for environmental
remediation costs for the three months ended March 31, 1998 and 1997 totaled $3
million and $7 million, respectively. Cash outlays related to such charges
aggregated $5 million and $7 million for the three months ended March 31, 1998
and 1997, respectively.
Management anticipates that the resolution of the Company's environmental
contingencies, which will occur over an extended period of time, will not result
in future annual charges against income that are significantly greater than
those recorded in recent years. It is possible, however, that technological,
regulatory and enforcement developments, the results of environmental studies
and other factors could alter this expectation. In management's opinion, the
Company operates in an environmentally sound manner and the outcome of the
Company's environmental contingencies will not have a material effect on PPG's
financial position or liquidity.
In addition to the amounts currently reserved, the Company may be subject to
loss contingencies related to environmental matters estimated to be as much as
$200 million to $400 million, which range is unchanged from December 31, 1997.
Such unreserved losses are reasonably possible but are not currently considered
to be probable of occurrence. Although insurers and other third parties may
cover a portion of these costs, to the extent they are incurred, any potential
recovery is not included in this unreserved
- 11 -
exposure to future loss. The Company's environmental contingencies are expected
to be resolved over an extended period of time.
Although the unreserved exposure to future loss relates to all sites, a
significant portion of such exposure involves three operating plant sites and
one closed plant site. Initial remedial actions are occurring at these sites.
Studies to determine the nature of the contamination are reaching completion and
the need for additional remedial actions, if any, is presently being evaluated.
The loss contingencies related to the remaining portion of such unreserved
exposure include significant unresolved issues such as the nature and extent of
contamination, if any, at sites and the methods that may have to be employed
should remediation be required.
With respect to certain waste sites, the financial condition of any other
potentially responsible parties also contributes to the uncertainty of
estimating PPG's final costs. Although contributors of waste to sites involving
other potentially responsible parties may face governmental agency assertions of
joint and several liability, in general, final allocations of costs are made
based on the relative contributions of wastes to such sites. PPG is generally
not a major contributor to such sites.
The impact of evolving programs, such as natural resource damage claims,
industrial site reuse initiatives and state voluntary remediation programs, also
adds to the present uncertainties with regard to the ultimate resolution of this
unreserved exposure to future loss. The Company's assessment of the potential
impact of these environmental contingencies is subject to considerable
uncertainty due to the complex, ongoing and evolving process of investigation
and remediation, if necessary, of such environmental contingencies.
Market Risk
There were no material changes in the Company's exposure to market risk from
December 31, 1997.
- 12 -
PART II. OTHER INFORMATION
Item 2. Change in Securities and Use of Proceeds
- --------------------------------------------------
Directors who are not also Officers of the Company receive Common Stock
Equivalents pursuant to The Deferred Compensation Plan for Directors and The
Directors' Common Stock Plan. Common Stock Equivalents are hypothetical shares
of Common Stock having a value on any given date equal to the value of a share
of Common Stock. Common Stock Equivalents earn dividend equivalents which are
converted into additional Common Stock Equivalents but carry no voting rights or
other rights of a holder of Common Stock. The Common Stock Equivalents credited
to Directors under both plans are exempt from registration under Section 4(2) of
the Securities Act of 1933 as private offerings made only to Directors of the
Company in accordance with the provisions of the plans.
Under the Company's Deferred Compensation Plan for Directors, each Director must
defer receipt of such compensation as the Board mandates. Currently, the Board
mandates deferral of one-third of each payment of the basic annual retainer of
each Director. Each Director may also elect to defer the receipt of (i) an
additional one-third of each payment of the basic annual retainer, (ii) all of
the basic annual retainer, or (iii) all compensation. All deferred payments are
held in the form of Common Stock Equivalents. Payments out of the deferred
accounts are made in the form of Common Stock of the Company (and cash as to any
fractional Common Stock Equivalent). In the first quarter of 1998, the
Directors, as a group, were credited with 1,826 Common Stock Equivalents under
this Plan. The values of the Common Stock Equivalents, when credited, ranged
from $53.375 to $67.938.
Under the Directors' Common Stock Plan, each Director who neither is nor was an
employee of the Company is credited annually with Common Stock Equivalents worth
one-half of the Director's basic annual retainer. No more than 10 years of
credits may be made for the account of any director. Upon termination of
service, the Common Stock Equivalents held in a Director's account are converted
to and paid in Common Stock of the Company (and cash as to any fractional Common
Stock Equivalent). In the first quarter of 1998, the Directors, as a group,
received 200 Common Stock Equivalents under this Plan. The value of each Common
Stock Equivalent, when credited, was $65.438.
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
At the Company's Annual Meeting of Shareholders held on April 16, 1998 (the
"Annual Meeting"), the shareholders voted on the following matters with the
results shown below.
1. On the matter of the election of four directors to serve for the terms
indicated in the proxy statement relating to the Annual Meeting, the vote
was as follows:
Nominees Votes For Votes Withheld
------------------------- ----------------------- -----------------------
Erroll B. Davis, Jr. 142,104,178 3,232,008
Allen J. Krowe 142,076,695 3,259,491
Robert Mehrabian 142,112,295 3,223,891
Ned C. Lautenbach 142,111,862 3,224,324
- 13 -
There were no broker nonvotes with respect to this matter.
Each of the nominees was therefore elected a director to serve for the
terms indicated in the proxy statement relating to the Annual Meeting.
2. On the matter of the election of Deloitte & Touche LLP as auditors for the
Company for the year 1998, the vote was as follows:
For: 144,125,857 Against: 633,500 Abstain: 564,918
There were no broker nonvotes with respect to this matter.
Therefore, Deloitte & Touche LLP were elected auditors for the Company for
1998.
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
(a) Exhibits
(3) PPG Industries, Inc. By-Laws
(12) Computation of Ratio of Earnings to Fixed Charges
(27) Financial Data Schedule
(b) Reports on Form 8-K
(1) The Company filed a Form 8-K on January 16, 1998, dated January
15, 1998, whereby the Company's press release reporting fourth
quarter 1997 earnings was filed as an exhibit.
(2) The Company filed a Form 8-K on March 4, 1998, dated February 19,
1998, to report the declaration of a dividend of preferred share
purchase rights to stockholders of record on April 6, 1998 and to
file the related exhibits.
- 14 -
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PPG INDUSTRIES, INC.
------------------------------------
(Registrant)
Date: April 28, 1998 By /s/ W. H. Hernandez
-------------------------------
W. H. Hernandez
Senior Vice President, Finance
(Principal Financial and
Accounting Officer and
Duly Authorized Officer)
- 15 -
PPG INDUSTRIES, INC. AND SUBSIDIARIES
-------------------------------------
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
(3) PPG Industries, Inc. By-Laws
(12) Statements Re Computation of Ratios
(27) Financial Data Schedule