- Fourth quarter highlights include:
- Net sales of $4.2 billion, up 5% in constant currencies driven
by higher selling prices
- Reported earnings per diluted share from continuing operations
(EPS) of $1.01 and adjusted EPS of $1.22
- Margin recovery with segment earnings growth of more than 20%
year-over-year, despite more severe commercial and supply
disruptions in China than original guidance
- Higher effective tax rate in 2022 reduced year-over-year EPS by
$0.25, primarily related to prior year discrete tax items that did
not recur
- Record full-year 2022 sales of about $17.7 billion, aided by 8%
organic growth
- Balance sheet flexibility remains
PPG (NYSE:PPG) today reported financial results for the fourth
quarter 2022 and full-year 2022.
Fourth Quarter Consolidated Results
$ in millions, except EPS
4Q
2022
4Q
2021
Y-O-Y
change
Net sales*
$4,185
$4,190
0%
Net income†
$238
$267
-11%
Adjusted net income†**
$286
$298
-4%
EPS†
$1.01
$1.12
-10%
Adjusted EPS†**
$1.22
$1.26
-3%
*Components of year-over-year net sales
change: higher selling prices (+11%), lower sales volumes (-5%),
divestiture-related sales and the wind down of Russia operations
(-1%), unfavorable foreign currency translation (-5%)
**Detailed reconciliations of reported to
adjusted figures are included below
†From continuing operations
President and CEO Comments
Tim Knavish, PPG president and chief executive officer,
commented on the quarter:
We continued to make good progress on our focus to achieve full
operating margin recovery, as year-over-year earnings improved in
both segments despite more acute pandemic-related demand
disruptions in China. This earnings improvement was driven by
aggregate selling price increases that totaled 19% on a two-year
stacked basis, as we remained focused on mitigating the significant
cumulative cost inflation incurred the past two years.
Overall sales volumes declined 5% year over year as
manufacturing activity slowed in most regions, including Asia
Pacific where volumes were down a low double-digit percentage
primarily due to the pandemic-related impacts in China. As
anticipated, demand remained soft in global architectural
do-it-yourself (DIY) coatings. In Europe, aggregate industrial
activity weakened sequentially, and sales volumes were down a
mid-single-digit percentage; however, our quarterly operating
earnings in that region were consistent with prior-year levels,
driven by strong price realization and cost management. We
delivered record net sales in our automotive refinish and PPG Comex
coatings businesses reflecting our leading products and strong
commercial relationships. Global aerospace demand continued to
recover leading to strong year-over-year organic sales growth of
about 20%, even though certain supply chain challenges
remained.
Looking ahead, we remain highly focused on building further
momentum to restore margins in line with our historical profile. In
the first quarter, we will continue to prioritize supporting our
customers through superior service and products, executing our
cost-savings initiatives, and optimizing inventory. We expect the
overall demand environment to remain consistent sequentially with
the fourth quarter with soft economic activity remaining in Europe
and China. However, as the year progresses, we anticipate several
positive catalysts that will enable earnings improvement, including
certain PPG commercial initiatives with our valued customers and
the continued rebound in demand for our technology-advantaged
aerospace products. Other catalysts include moderating raw material
costs, coatings demand stabilization in Europe beginning in the
second quarter, and strong economic recovery in China as the
pandemic reopening progresses. Finally, with fewer supply chain
disruptions we expect ample commodity raw material availability and
improved manufacturing efficiencies.
Lastly, I am looking forward to leading PPG in my new role and
want to thank our customers for selecting PPG as their supplier of
choice, our shareholders for their confidence, and our global
employees who demonstrate The PPG Way by making it happen every
day.
Fourth Quarter 2022 Reportable Segment Financial
Results
- Performance Coatings
segment
$ in millions
4Q
2022
4Q
2021
Y-O-Y
change
Net sales
$2,490
$2,507
-1%
Segment income
$272
$243
+12%
Segment income %
10.9%
9.7%
Sales volumes
-4%
Selling prices
+9%
Divestitures and wind down of Russia
-1%
Foreign currency translation
-5%
Performance Coatings net sales were down
slightly versus the prior-year fourth quarter as lower sales
volumes, the impact of divestitures, the wind down of business in
Russia, and unfavorable foreign currency translation impacts were
nearly all offset by selling price increases in all businesses.
Excluding Asia, broad supply chain
disruptions continued to moderate during the quarter, with the most
significant remaining challenges impacting the aerospace coatings
business. As expected, demand for architectural coatings DIY
products in Europe remained soft due to customer inventory
destocking and lower consumer confidence stemming from current
geopolitical issues. While softer DIY demand drove lower sales
volumes in the U.S. architectural coatings business, several new
business wins will aid growth in future quarters. PPG Comex
delivered another strong quarter and finished with over 5,100
concessionaire locations, up about 3% from last year. Automotive
refinish coatings organic sales grew by a low double-digit
percentage driven by higher selling prices and sales volumes,
despite significant impacts to demand in China due to
pandemic-related disruptions. Aerospace coatings sales volumes
remained robust and order backlogs remained at historic highs as
supply chain disruptions continued. Traffic solutions organic sales
were flat in the seasonally low fourth quarter. Organic sales in
the protective and marine coatings business declined by a low
single-digit percentage, primarily due to pandemic-related
disruptions in China.
Segment income increased by 12% versus the
prior year primarily due to higher selling prices and restructuring
cost savings which more than offset cost inflation, the impact of
lower sales volumes, unfavorable foreign currency translation, and
increased manufacturing costs. Segment operating margins improved
by 120 basis points year over year.
- Industrial Coatings
segment
$ in millions
4Q
2022
4Q
2021
Y-O-Y
change
Net sales
$1,695
$1,683
+1%
Segment income
$155
$105
+48%
Segment income %
9.1%
6.2%
Sales volumes
-5%
Selling prices
+13%
Divestitures and wind down of Russia
-1%
Foreign currency translation
-6%
Industrial Coatings net sales increased
modestly as higher selling prices across all businesses were
partially offset by lower sales volumes, unfavorable foreign
currency translation, and the wind down of business in Russia.
Automotive original equipment manufacturer
(OEM) coatings organic sales were up a low double-digit percentage
due to higher global selling prices coupled with increased
year-over-year sales volumes in Europe. Global automotive OEM
industry production continued to be impacted by certain customer
production outages due to component shortages and pandemic-related
disruptions in China, both of which are expected to improve in
2023. Industrial coatings organic sales were up a mid-single-digit
percentage driven by strong selling price realization, partially
offset by lower sales volumes in Europe and China due to softer
industrial production activity. Packaging coatings delivered
mid-single-digit percentage organic sales growth led by higher
selling prices, which were offset by lower sales volumes in most
regions.
Segment income was higher than the prior year
by $50 million mainly due to higher selling prices and
restructuring cost savings, partially offset by lower sales
volumes, increased raw material and energy costs, and unfavorable
foreign currency translation. Segment margins improved by 290 basis
points compared to the fourth quarter 2021.
Additional Financial Information
- At year end, the company had cash and short-term investments
totaling nearly $1.2 billion. Net debt was $5.7 billion, which was
comparable to the prior year end. Inventories were higher year over
year but declined sequentially in comparison to the third quarter
2022 due to destocking initiatives that are expected to continue
into 2023.
- Corporate expenses were $52 million in the fourth quarter,
including lower incentive compensation expense year over year.
- Acquisition-related synergies and business restructuring
programs delivered about $20 million of cost savings in the
quarter.
- The company’s reported and adjusted effective tax rates for the
fourth quarter 2022 were both about 23%, compared to 2021 reported
and adjusted rates of 1% and 5%, respectively. The fourth quarter
2021 reported and adjusted earnings per diluted share were both
impacted by the lower tax rates that included favorable discrete
items that did not recur in the fourth quarter of 2022.
Full-Year 2022 Financial Results
$ in millions, except EPS
2022
2021
Y-O-Y
change
Net sales*
$17,652
$16,802
+5%
Net income†
$1,028
$1,420
-28%
Adjusted net income†**
$1,436
$1,619
-11%
EPS†
$4.33
$5.93
-27%
Adjusted EPS†**
$6.05
$6.77
-11%
*Components of year-over-year net sales
change: higher selling prices (+11%), lower sales volumes (-3%),
acquisition-related sales (+3%), unfavorable foreign currency
translation (-5%); divestiture-related sales and the wind down of
Russia operations (-1%)
**Detailed reconciliations of the reported
to the adjusted figures are included below
†From continuing operations
Full-year 2022 reported net sales from continuing operations
were approximately $17.7 billion, up about 5% versus the prior
year. Organic sales were higher by 8% driven by higher selling
prices. Net income in 2022 decreased versus 2021 due to raw
material cost inflation, lower sales volumes, unfavorable
foreign-currency translation, and higher manufacturing costs
related to supply and labor disruptions, partially offset by higher
selling prices, restructuring cost savings and acquisition-related
synergies.
In 2022, the company paid $570 million in dividends. Capital
expenditures totaled about $520 million, which was higher than the
prior year due to more normalized spending. The company had about
$1 billion remaining on its current share repurchase authorization
at the end of 2022.
Outlook
The company today reported the following projections for the
first quarter 2023 based on current global economic activity and in
consideration of the near-term economic uncertainty associated with
the impacts of geopolitical issues in Europe and the continuing
pandemic, especially in China:
- Aggregate sales volumes down a mid-single-digit percentage year
over year
- Corporate expenses of between $90 million and $95 million;
higher than prior year, partially due to increasing pension costs
(non-cash) and prior-year adjustments to incentive compensation
that are not expected to recur
- Net interest expense of between $38 million and $40
million
- Effective tax rate of 22% to 24%
- Reported EPS of $0.95 to $1.05
- Adjusted EPS of $1.10 to $1.20, excluding amortization expense
of $0.13 and costs related to previously approved and communicated
business restructuring of $0.02.
The higher corporate and interest expenses are projected to
decrease reported and adjusted EPS by about $0.20 on a
year-over-year basis.
A detailed commentary and associated presentation slides related
to the fourth quarter financial information is posted on the
company’s investor relations website.
The term organic sales as used in this press release is defined
as net sales excluding the impact of currency, acquisitions,
divestitures, and the wind down of Russia operations.
PPG: WE PROTECT AND BEAUTIFY THE WORLD®
At PPG (NYSE:PPG), we work every day to develop and deliver the
paints, coatings and specialty materials that our customers have
trusted for 140 years. Through dedication and creativity, we solve
our customers’ biggest challenges, collaborating closely to find
the right path forward. With headquarters in Pittsburgh, we operate
and innovate in more than 75 countries and reported net sales of
$17.7 billion in 2022. We serve customers in construction, consumer
products, industrial and transportation markets and aftermarkets.
To learn more, visit www.ppg.com.
Additional Information
PPG will provide detailed commentary regarding its financial
performance, including presentation-slide content, on the PPG
Investor Center at www.ppg.com at about 4:30 p.m. ET today, January
19. The company will hold a conference call to review its fourth
quarter and full-year 2022 financial performance on January 20, at
8:00 a.m. ET. Participants can pre-register for the conference by
navigating to
https://www.netroadshow.com/events/login?show=273e775f&confId=45435.
The conference call also will be available in listen-only mode
via Internet broadcast from the PPG Investor Center at www.ppg.com.
A telephone replay will be available, January 20, beginning at
approximately 11:00 a.m. ET, through February 3, at 11:59 p.m. ET.
The dial-in numbers for the replay are: in the United States,
1-866-813-9403; Canada, 1-226-828-7578; UK, (Local) 0204-525-0658;
international, +44-204-525-0658; passcode 195860. A Web replay also
will be available shortly after the call on the PPG Investor Center
at www.ppg.com, and will remain through Friday, January 19,
2024.
Forward-Looking Statements
Statements contained herein relating to matters that are not
historical facts are forward-looking statements reflecting PPG’s
current view with respect to future events and financial
performance. These matters within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, involve risks and
uncertainties that may affect PPG’s operations, as discussed in the
company’s filings with the Securities and Exchange Commission
pursuant to Sections 13(a), 13(c) or 15(d) of the Exchange Act, and
the rules and regulations promulgated thereunder. Accordingly, many
factors could cause actual results to differ materially from the
forward-looking statements contained herein. Such factors include
statements related to the expected effects on our business of
COVID-19, global economic conditions, geopolitical issues in
Europe, the amount of future share repurchases, increasing price
and product competition by our competitors, fluctuations in cost
and availability of raw materials, energy, labor and logistics, the
ability to achieve selling price increases, the ability to recover
margins, customer inventory levels, PPG inventory levels, the
ability to maintain favorable supplier relationships and
arrangements, the timing of realization of anticipated cost savings
from restructuring and other initiatives, the ability to identify
additional cost savings opportunities, the timing and expected
benefits of potential future and completed acquisitions,
difficulties in integrating acquired businesses and achieving
expected synergies therefrom, economic and political conditions in
international markets, the ability to penetrate existing,
developing and emerging foreign and domestic markets, foreign
exchange rates and fluctuations in such rates, fluctuations in tax
rates, the impact of future legislation, the impact of
environmental regulations, unexpected business disruptions, the
unpredictability of existing and possible future litigation,
including asbestos litigation, and governmental investigations.
However, it is not possible to predict or identify all such
factors. Consequently, while the list of factors presented here and
in our 2021 Annual Report on Form 10-K considered representative,
no such list should be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realization of
forward-looking statements. Consequences of material differences in
results compared with those anticipated in the forward-looking
statements could include, among other things, lower sales or
earnings, business disruption, operational problems, financial
loss, legal liability to third parties and similar risks, any of
which could have a material adverse effect on PPG’s consolidated
financial condition, results of operations or liquidity.
All information in this release speaks only as of January 19,
2023, and any distribution of this release after that date is not
intended and will not be construed as updating or confirming such
information. PPG undertakes no obligation to update any
forward-looking statement, except as otherwise required by
applicable law.
Regulation G Reconciliation
PPG believes investors’ understanding of the company’s
performance is enhanced by the disclosure of net income, earnings
per diluted share from continuing operations and PPG’s effective
tax rate adjusted for certain items. PPG’s management considers
this information useful in providing insight into the company’s
ongoing performance because it excludes the impact of items that
cannot reasonably be expected to recur on a quarterly basis or that
are not attributable to our primary operations. Net income,
earnings per diluted share from continuing operations and the
effective tax rate adjusted for these items are not recognized
financial measures determined in accordance with U.S. generally
accepted accounting principles (“U.S. GAAP”) and should not be
considered a substitute for net income, earnings per diluted share,
the effective tax rate or other financial measures as computed in
accordance with U.S. GAAP. In addition, adjusted net income,
adjusted earnings per diluted share and the adjusted effective tax
rate may not be comparable to similarly titled measures as reported
by other companies.
Regulation G Reconciliation - Net Income and Earnings per
Diluted Share
($ in millions, except per-share amounts)
Fourth Quarter 2022
Fourth Quarter 2021
$
EPS(a)
$
EPS(a)
Reported net income from continuing
operations
$238
$1.01
$267
$1.12
Acquisition-related amortization
expense
31
0.13
35
0.15
Impairment and other related charges,
net(b)
11
0.05
—
—
Business restructuring-related costs,
net(c)
6
0.03
50
0.21
Pension settlement charge
—
—
36
0.15
Environmental remediation charges
—
—
7
0.03
Transaction-related costs, net(d)
—
—
4
0.02
Asbestos-related claims reserve
adjustment(e)
—
—
(101)
(0.42)
Adjusted net income from continuing
operations, excluding certain items
$286
$1.22
$298
$1.26
Full Year 2022
Full Year 2021
$
EPS(a)
$
EPS(a)
Reported net income from continuing
operations
$1,028
$4.33
$1,420
$5.93
Impairment and other related charges,
net(b)
214
0.90
12
0.05
Acquisition-related amortization
expense
126
0.53
130
0.55
Business restructuring-related costs,
net(c)
56
0.24
20
0.08
Transaction-related costs, net(d)
12
0.05
69
0.29
Pension settlement charge
—
—
36
0.15
Environmental remediation charges
—
—
26
0.11
Net tax charge related to UK statutory
rate change
—
—
22
0.09
Expenses incurred due to natural
disasters(f)
—
—
13
0.06
Decrease in allowance for doubtful
accounts related to COVID-19
—
—
(11)
(0.05)
Income from legal settlements
—
—
(17)
(0.07)
Asbestos-related claims reserve
adjustment(e)
—
—
(101)
(0.42)
Adjusted net income from continuing
operations, excluding certain items
$1,436
$6.05
$1,619
$6.77
Fourth Quarter 2022
Fourth Quarter 2021
Income Before Income
Taxes
Income Tax Expense
Effective Tax Rate
Income Before Income
Taxes
Income Tax Expense
Effective Tax Rate
Effective tax rate, continuing
operations
$319
$73
22.9
%
$282
$4
1.4
%
Acquisition-related amortization
expense
41
10
24.4
%
46
11
24.8
%
Impairment and other related charges,
net(b)
15
4
24.7
%
—
—
—
%
Business restructuring-related costs,
net(c)
8
2
29.7
%
67
17
25.3
%
Pension settlement charge
—
—
—
%
50
14
26.6
%
Environmental remediation charges
—
—
—
%
9
2
24.3
%
Transaction-related costs, net(d)
—
—
—
%
5
1
22.3
%
Asbestos-related claims reserve
adjustment(e)
—
—
—
%
(133)
(32)
24.3
%
Adjusted effective tax rate, continuing
operations, excluding certain items
$383
$89
23.2
%
$326
$17
5.2
%
Full Year 2022
Full Year 2021
Income Before Income
Taxes
Income Tax Expense
Effective Tax Rate
Income Before Income
Taxes
Income Tax Expense
Effective Tax Rate
Effective tax rate, continuing
operations
$1,381
$325
23.5
%
$1,815
$374
20.6
%
Impairment and other related charges,
net(b)
245
31
12.7
%
21
6
29.2
%
Acquisition-related amortization
expense
166
40
24.1
%
172
42
24.4
%
Business restructuring-related costs,
net(c)
75
19
25.3
%
27
7
25.9
%
Transaction-related costs, net(d)
10
(2)
(20.0)
%
86
17
19.8
%
Pension settlement charge
—
—
—
%
50
14
26.6
%
Environmental remediation charges
—
—
—
%
35
9
24.3
%
Net tax charge related to UK statutory
rate change
—
—
—
%
—
(22)
N/A
Expenses incurred due to natural
disasters(f)
—
—
—
%
17
4
24.3
%
Decrease in allowance for doubtful
accounts related to COVID-19
—
—
—
%
(14)
(3)
24.7
%
Income from legal settlements
—
—
—
%
(22)
(5)
24.3
%
Asbestos-related claims reserve
adjustment(e)
—
—
—
%
(133)
(32)
24.3
%
Adjusted effective tax rate, continuing
operations, excluding certain items
$1,877
$413
22.0
%
$2,054
$411
20.0
%
(a)
Earnings per diluted share is
calculated based on unrounded numbers. Figures in the table may not
recalculate due to rounding.
(b)
In the first quarter 2022, the
Company recorded impairment and other related charges due to the
wind down of the company’s operations in Russia. In the second
quarter 2022, the Company released a portion of the previously
established reserves due to the collection of certain trade
receivables and the realization of certain inventories. In the
fourth quarter 2022, impairment and other related charges were
recorded related to the planned sale of a non-core business and for
certain asset write downs. In 2021, an impairment charge was
recorded for the write-down of certain assets related to the
previously planned sale of certain smaller entities in
non-strategic regions. Net loss of $3 million was attributable to
noncontrolling interests.
(c)
Included in business
restructuring-related costs, net are business restructuring
charges, accelerated depreciation of certain assets and other
related costs, offset by releases related to previously approved
programs and a $34 million gain on the sale of certain assets in
the third quarter 2021 in connection with the Company’s
manufacturing footprint consolidation plans and associated
restructuring programs. This gain is included in Other
charges/(income), net in the condensed consolidated statement of
income.
(d)
Transaction-related costs, net
include advisory, legal, accounting, valuation, other professional
or consulting fees, and certain internal costs directly incurred to
effect acquisitions, as well as similar fees and other costs to
effect disposals not classified as discontinued operations. These
costs are included in Selling, general and administrative expense
in the condensed consolidated statement of income.
Transaction-related costs also include losses on the sale of
certain assets, which are included in Other charges/(income), net
in the condensed consolidated statement of income, and the impact
for the step up to fair value of inventory acquired in certain
acquisitions, which are included in Cost of sales, exclusive of
depreciation and amortization in the condensed consolidated
statement of income.
(e)
In the fourth quarter 2021, the
reserve for asbestos-related claims was reduced to reflect the
Company’s current estimate of potential liability for these
claims.
(f)
In early 2021, a winter storm
damaged a southern U.S. factory supporting the Company's specialty
coatings and materials business as well as other Company factories
in the southern U.S. Incremental expenses incurred due to this
storm included costs related to maintenance and repairs of damaged
property, freight and utility premiums and other incremental
expenses directly related to the impacted areas.
PPG INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENT OF INCOME (unaudited) (All amounts in
millions except per-share data) Three Months Ended Twelve Months
Ended December 31 December 31
2022
2021
2022
2021
Net sales
$4,185
$4,190
$17,652
$16,802
Cost of sales, exclusive of depreciation and amortization
2,623
2,692
11,096
10,286
Selling, general and administrative
955
984
3,842
3,780
Depreciation
92
103
388
389
Amortization
41
46
166
172
Research and development, net
108
116
448
439
Interest expense
53
30
167
121
Interest income
(20)
(7)
(54)
(26)
Impairment and other related charges, net
15
-
245
21
Business restructuring, net
(3)
52
33
31
Pension settlement charge
-
50
-
50
Asbestos-related claims reserve adjustment
-
(133)
-
(133)
Other charges/(income), net
2
(25)
(60)
(143)
Income before income taxes
$319
$282
$1,381
$1,815
Income tax expense
73
4
325
374
Income from continuing operations
$246
$278
$1,056
$1,441
Income/(loss) from discontinued operations, net of tax
-
19
(2)
19
Net income attributable to controlling and noncontrolling interests
$246
$297
$1,054
$1,460
Net income attributable to noncontrolling interests
(8)
(11)
(28)
(21)
Net income (attributable to PPG)
$238
$286
$1,026
$1,439
Amounts attributable to PPG: Income from continuing
operations, net of tax
$238
$267
$1,028
$1,420
Income/(loss) from discontinued operations, net of tax
-
19
(2)
19
Net income (attributable to PPG)
$238
$286
$1,026
$1,439
Earnings per common share (attributable to PPG) Income from
continuing operations, net of tax
$1.01
$1.12
$4.35
$5.98
Income/(loss) from discontinued operations, net of tax
-
0.08
(0.01)
0.08
Net income (attributable to PPG)
$1.01
$1.20
$4.34
$6.06
Earnings per common share (attributable to PPG) - assuming
dilution Income from continuing operations, net of tax
$1.01
$1.12
$4.33
$5.93
Income/(loss) from discontinued operations, net of tax
-
0.08
(0.01)
0.08
Net income (attributable to PPG)
$1.01
$1.20
$4.32
$6.01
Average shares outstanding
235.5
237.4
236.1
237.6
Average shares outstanding - assuming dilution
236.6
239.2
237.3
239.4
PPG INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS HIGHLIGHTS (unaudited) ($
in millions)
Twelve Months Ended
December 31
2022
2021
Cash from operating activities - continuing operations
$963
$1,562
Cash used for investing activities: Capital expenditures
$518
$371
Business acquisitions, net of cash balances acquired
$114
$2,137
Financing activities: Dividends paid on PPG common stock
$570
$536
PPG INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEET HIGHLIGHTS (unaudited) ($ in
millions)
December 31
December 31
2022
2021
Current assets: Cash and cash equivalents
$1,099
$1,005
Short-term investments
55
67
Receivables, net
3,303
3,152
Inventories
2,272
2,171
Other current assets
444
379
Total current assets
$7,173
$6,774
Current liabilities: Short-term debt and current portion of
long-term debt
$313
$9
Accounts payable and accrued liabilities
4,087
4,392
Current portion of operating lease liabilities
183
192
Restructuring reserves
138
173
Total current liabilities
$4,721
$4,766
Long-term debt
$6,503
$6,572
PPG OPERATING METRICS (unaudited) ($ in millions)
December 31
December 31
2022
2021
Operating Working Capital (a)
$2,830
$2,298
As a percent of quarter sales, annualized
16.9%
13.7%
(a) Operating working capital includes: (1) receivables from
customers, net of allowance for doubtful accounts, (2) FIFO
inventories and (3) trade liabilities.
PPG INDUSTRIES, INC. AND
SUBSIDIARIES CONSOLIDATED BUSINESS SEGMENT INFORMATION
(unaudited) ($ in millions)
Three Months Ended
Twelve Months Ended
December 31
December 31
2022
2021
2022
2021
Net sales Performance Coatings
$2,490
$2,507
$10,694
$10,333
Industrial Coatings
1,695
1,683
6,958
6,469
Total
$4,185
$4,190
$17,652
$16,802
Segment income Performance Coatings
$272
$243
$1,399
$1,491
Industrial Coatings
155
105
643
680
Total
$427
$348
$2,042
$2,171
Items not allocated to segments Corporate
(52)
(45)
(218)
(194)
Interest expense, net of interest income
(33)
(23)
(113)
(95)
Impairment and other related charges, net (Note A)
(15)
-
(245)
(21)
Business restructuring-related costs, net (Note B)
(8)
(67)
(75)
(27)
Transaction-related costs (Note C)
-
(5)
(10)
(86)
Environmental remediation charges
-
(9)
-
(35)
Expenses incurred due to natural disasters (Note D)
-
-
-
(17)
Pension settlement charge
-
(50)
-
(50)
Change in allowance for doubtful accounts related to COVID-19
-
-
-
14
Income from legal settlements
-
-
-
22
Asbestos-related claims reserve adjustment (Note E)
-
133
-
133
Income before income taxes
$319
$282
$1,381
$1,815
Note A: In the first quarter 2022, the Company recorded impairment
and other related charges due to the wind down of the company’s
operations in Russia. In the second quarter 2022, the Company
released a portion of the previously established reserves due to
the collection of certain trade receivables and the realization of
certain inventories. In the fourth quarter 2022, impairment and
other related charges were recorded related to the planned sale of
a non-core business and for certain asset write downs. In 2021, an
impairment charge was recorded for the write-down of certain assets
related to the previously planned sale of certain smaller entities
in non-strategic regions. Note B: Included in business
restructuring-related costs, net are business restructuring
charges, accelerated depreciation of certain assets and other
related costs, offset by releases related to previously approved
programs and a $34 million gain on the sale of certain assets
recognized in the third quarter 2021 in connection with the
Company’s manufacturing footprint consolidation plans and
associated restructuring programs. This gain is included in Other
charges/(income), net in the condensed consolidated statement of
income. Note C: Transaction-related costs include advisory,
legal, accounting, valuation, other professional or consulting
fees, and certain internal costs directly incurred to effect
acquisitions, as well as similar fees and other costs to effect
disposals not classified as discontinued operations. These costs
are included in Selling, general and administrative expense in the
condensed consolidated statement of income. Transaction-related
costs also include losses on the sale of certain assets, which are
included in Other charges/(income), net in the condensed
consolidated statement of income, and the impact for the step up to
fair value of inventory acquired in certain acquisitions, which are
included in Cost of sales, exclusive of depreciation and
amortization in the condensed consolidated statement of income.
Note D: In early 2021, a winter storm damaged a southern
U.S. factory supporting the Company's specialty coatings and
materials business as well as other Company factories in the
southern U.S. Incremental expenses incurred due to this storm
included costs related to maintenance and repairs of damaged
property, freight and utility premiums and other incremental
expenses directly related to the impacted areas. Note E: In
the fourth quarter 2021, the reserve for asbestos-related claims
was reduced to reflect the company’s current estimate of potential
liability for these claims.
CATEGORY Corporate
CATEGORY Financial
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230119005519/en/
PPG Media Contact: Mark Silvey Corporate Communications
+1-412-434-3046 silvey@ppg.com
PPG Investor Contact: John Bruno Investor Relations
+1-412-434-3466 jbruno@ppg.com investor.ppg.com
PPG Industries (NYSE:PPG)
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PPG Industries (NYSE:PPG)
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Von Mär 2022 bis Mär 2023
