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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
  –––––––––––––––––––––––––––––––––––––––––––––––––
FORM 10-Q
  –––––––––––––––––––––––––––––––––––––––––––––––––
☑    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2024
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 1-1687
ppga01.gif
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
PPG INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
25-0730780
(I.R.S. Employer Identification No.)
Pennsylvania
(State or Other Jurisdiction of Incorporation or Organization)
One PPG Place, Pittsburgh, Pennsylvania
(Address of Principal Executive Offices)
15272
(Zip Code)
(412) 434-3131
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $1.66 2/3
PPGNew York Stock Exchange
0.875% Notes due 2025PPG 25New York Stock Exchange
1.875% Notes due 2025PPG 25ANew York Stock Exchange
1.400% Notes due 2027PPG 27New York Stock Exchange
2.750% Notes due 2029PPG 29ANew York Stock Exchange
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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☑     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☑    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☑Accelerated Filer☐
Non-accelerated Filer
☐ 
Smaller Reporting Company☐
Emerging Growth Company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes ☐    No ☑
As of September 30, 2024, 232.0 million shares of the Registrant’s common stock, par value $1.66 2/3 per share, were outstanding.


PPG INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
 
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Income (Unaudited)
 Three Months Ended
September 30		Nine Months Ended
September 30
($ in millions, except per share amounts)2024202320242023
Net sales$4,575 $4,644 $13,680 $13,896 
Cost of sales, exclusive of depreciation and amortization2,663 2,752 7,842 8,214 
Selling, general and administrative1,062 1,047 3,203 3,108 
Depreciation97 102 298 287 
Amortization32 40 106 121 
Research and development, net105 108 325 322 
Interest expense67 64 184 190 
Interest income(48)(39)(135)(96)
Pension settlement charge— — — 190 
Other (income)/charges, net(14)13 15 4 
Income before income taxes$611 $557 $1,842 $1,556 
Income tax expense137 121 422 350 
Net income attributable to controlling and noncontrolling interests$474 $436 $1,420 $1,206 
Net income attributable to noncontrolling interests(6)(10)(24)(26)
Net income (attributable to PPG)$468 $426 $1,396 $1,180 
Earnings per common share (attributable to PPG)$2.01 $1.80 $5.96 $5.00 
Earnings per common share (attributable to PPG) - assuming dilution$2.00 $1.79 $5.93 $4.97 
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
2
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
 Three Months Ended
September 30		Nine Months Ended
September 30
($ in millions)2024202320242023
Net income attributable to controlling and noncontrolling interests$474 $436 $1,420 $1,206 
Other comprehensive (loss)/income, net of tax:
Defined benefit pension and other postretirement benefits(3)(1)17 138 
Unrealized foreign currency translation adjustments(113)(174)(561)199 
Other comprehensive (loss)/income, net of tax($116)($175)($544)$337 
Total comprehensive income$358 $261 $876 $1,543 
Less: amounts attributable to noncontrolling interests:
Net income(6)(10)(24)(26)
Unrealized foreign currency translation adjustments(1)2 3 1 
Comprehensive income attributable to PPG$351 $253 $855 $1,518 
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
3
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet (Unaudited)
($ in millions)September 30, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$1,251 $1,514 
Short-term investments71 75 
Receivables, net3,653 3,279 
Inventories2,263 2,127 
Assets held for sale237 — 
Other current assets438 436 
Total current assets$7,913 $7,431 
Property, plant and equipment (net of accumulated depreciation of $4,854 and $4,963)
3,611 3,644 
Goodwill6,080 6,200 
Identifiable intangible assets, net2,203 2,424 
Deferred income taxes366 273 
Investments300 259 
Operating lease right-of-use assets805 832 
Other assets580 584 
Total$21,858 $21,647 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities$4,342 $4,467 
Restructuring reserves46 87 
Short-term debt and current portion of long-term debt339 306 
Current portion of operating lease liabilities196 194 
Liabilities held for sale73 — 
Total current liabilities$4,996 $5,054 
Long-term debt6,138 5,748 
Operating lease liabilities596 622 
Accrued pensions584 588 
Other postretirement benefits438 450 
Deferred income taxes496 508 
Other liabilities638 654 
Total liabilities$13,886 $13,624 
Commitments and contingent liabilities (Note 14)
Shareholders’ equity:
Common stock$969 $969 
Additional paid-in capital1,258 1,202 
Retained earnings22,432 21,500 
Treasury stock, at cost(14,091)(13,600)
Accumulated other comprehensive loss(2,780)(2,239)
Total PPG shareholders’ equity$7,788 $7,832 
Noncontrolling interests184 191 
Total shareholders’ equity$7,972 $8,023 
Total$21,858 $21,647 
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
4
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Shareholders' Equity (Unaudited)
($ in millions)Common StockAdditional Paid-In CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal PPGNon-controlling InterestsTotal
January 1, 2024$969 $1,202 $21,500 ($13,600)($2,239)$7,832 $191 $8,023 
Net income attributable to controlling and noncontrolling interests— — 400 — — 400 9 409 
Other comprehensive loss, net of tax— — — — (12)(12)(2)(14)
Cash dividends— — (153)— — (153)— (153)
Purchase of treasury stock— — — (152)— (152)— (152)
Issuance of treasury stock— 31 — 6 — 37 — 37 
Stock-based compensation activity— (11)— — — (11)— (11)
Dividends paid on subsidiary common stock to noncontrolling interests— — — — — — (2)(2)
Reductions in noncontrolling interests— — — — — — (11)(11)
March 31, 2024$969 $1,222 $21,747 ($13,746)($2,251)$7,941 $185 $8,126 
Net income attributable to the controlling and noncontrolling interests— — 528 — — 528 9 537 
Other comprehensive loss, net of tax— — — — (412)(412)(2)(414)
Cash dividends— — (152)— — (152)— (152)
Purchase of treasury stock— — — (152)— (152)— (152)
Issuance of treasury stock— 3 — 1 — 4 — 4 
Stock-based compensation activity— 10 — — — 10 — 10 
Dividends paid on subsidiary common stock to noncontrolling interests— — — — — — (13)(13)
Other— — — — — — (1)(1)
June 30, 2024$969 $1,235 $22,123 ($13,897)($2,663)$7,767 $178 $7,945 
Net income attributable to the controlling and noncontrolling interests— — 468 — — 468 6 474 
Other comprehensive loss, net of tax— — — — (117)(117)1 (116)
Cash dividends— — (159)— — (159)— (159)
Purchase of treasury stock— — — (202)— (202)— (202)
Issuance of treasury stock— 11 — 8 — 19 — 19 
Stock-based compensation activity— 12 — — — 12 — 12 
Dividends paid on subsidiary common stock to noncontrolling interests— — — — — — (1)(1)
September 30, 2024$969 $1,258 $22,432 ($14,091)($2,780)$7,788 $184 $7,972 
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
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($ in millions)Common StockAdditional Paid-In CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal PPGNon-controlling InterestsTotal
January 1, 2023$969 $1,130 $20,828 ($13,525)($2,810)$6,592 $117 $6,709 
Net income attributable to controlling and noncontrolling interests— — 264 — — 264 9 273 
Other comprehensive income, net of tax— — — — 402 402 1 403 
Cash dividends— — (146)— — (146)— (146)
Issuance of treasury stock— 21 — 10 — 31 — 31 
Stock-based compensation activity— (1)— — — (1)— (1)
Dividends paid on subsidiary common stock to noncontrolling interests— — — — — — (1)(1)
Reductions in noncontrolling interests— — — — — — (15)(15)
March 31, 2023$969 $1,150 $20,946 ($13,515)($2,408)$7,142 $111 $7,253 
Net income attributable to the controlling and noncontrolling interests— — 490 — — 490 7 497 
Other comprehensive income/(loss), net of tax— — — — 109 109 — 109 
Cash dividends— — (146)— — (146)— (146)
Issuance of treasury stock— 7 — 3 — 10 — 10 
Stock-based compensation activity— 9 — — — 9 — 9 
Dividends paid on subsidiary common stock to noncontrolling interests— — — — — — (10)(10)
Acquisition of noncontrolling interests— — — — — — 70 70 
June 30, 2023$969 $1,166 $21,290 ($13,512)($2,299)$7,614 $178 $7,792 
Net income attributable to the controlling and noncontrolling interests— — 426 — — 426 10 436 
Other comprehensive loss, net of tax— — — — (173)(173)(2)(175)
Cash dividends— — (153)— — (153)— (153)
Issuance of treasury stock— 18 — 10 — 28 — 28 
Stock-based compensation activity— 9 — — — 9 — 9 
Dividends paid on subsidiary common stock to noncontrolling interests— — — — — — (2)(2)
September 30, 2023$969 $1,193 $21,563 ($13,502)($2,472)$7,751 $184 $7,935 
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
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PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended
September 30
($ in millions)20242023
Operating activities:
Net income attributable to controlling and noncontrolling interests$1,420 $1,206 
Adjustments to reconcile net income to cash from operations:
Depreciation and amortization404 408 
Pension settlement charge— 190 
Stock-based compensation expense32 42 
Deferred income taxes(68)(131)
Cash used for restructuring actions(37)(44)
Change in certain asset and liability accounts (net of acquisitions):
Receivables(436)(358)
Inventories(163)70 
Other current assets(36)(70)
Accounts payable and accrued liabilities(26)72 
Taxes and interest payable2 92 
Noncurrent assets and liabilities, net20 (133)
Other(38)169 
Cash from operating activities$1,074 $1,513 
Investing activities:
Capital expenditures($523)($381)
Business acquisitions, net of cash balances acquired(29)(108)
Proceeds from asset sales— 25 
Payments for the settlement of cross currency swap contracts(107)(13)
Proceeds from the settlement of cross currency swap contracts118 60 
Other30 18 
Cash used for investing activities($511)($399)
Financing activities:
Net proceeds from commercial paper and short-term debt$408 $— 
Net change in borrowing with maturities of three months or less(1)(16)
Proceeds from Term Loan, net of fees274 550 
Repayment of Term Loan Credit Agreement— (800)
Repayment of long-term debt(300)(300)
Purchase of treasury stock(511)— 
Dividends paid on PPG common stock(464)(445)
Other(23)6 
Cash used for financing activities($617)($1,005)
Effect of currency exchange rate changes on cash and cash equivalents(209)10 
Net (decrease)/increase in cash and cash equivalents($263)$119 
Cash and cash equivalents, beginning of period1,514 1,099 
Cash and cash equivalents, end of period$1,251 $1,218 
Supplemental disclosures of cash flow information:
Interest paid, net of amount capitalized$198 $181 
Taxes paid, net of refunds$481 $378 
Supplemental disclosure of noncash investing activities:
Capital expenditures accrued within Accounts payable and accrued liabilities at period-end$89 $75 
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
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PPG INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
 
1.Basis of Presentation
The condensed consolidated financial statements included herein are unaudited and have been prepared following the requirements of the Securities and Exchange Commission (the "SEC") and accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim reporting. Under these rules, certain footnotes and other financial information that are normally required for annual financial statements can be condensed or omitted. These statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair presentation of the financial position and shareholders' equity of PPG as of September 30, 2024, the results of its operations for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023. All intercompany balances and transactions have been eliminated. Material subsequent events are evaluated through the report issuance date and disclosed where applicable. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in PPG's 2023 Annual Report on Form 10-K (the "2023 Form 10-K").
On August 29, 2024, PPG announced that it entered into a definitive agreement to sell its silicas products business for approximately $310 million. The assets and liabilities related to the silicas products business were classified as held for sale on the condensed consolidated balance sheet as of September 30, 2024. Refer to Note 3, Divestitures, for additional information.
Net sales, expenses, assets and liabilities can vary during each quarter of the year. Accordingly, the results of operations for the three and nine months ended September 30, 2024 and the trends in these unaudited condensed consolidated financial statements may not necessarily be indicative of the results to be expected for the full year.
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on our previously reported Net income, total assets, cash flows or shareholders’ equity.
2.New Accounting Standards
Recently Adopted Accounting Standards
Effective January 1, 2024, PPG adopted Accounting Standards Update ("ASU") No. 2023-02, "Investment - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." This ASU permits reporting entities to elect to account for tax equity investments under the proportional amortization method, regardless of the tax credit program from which the income tax credits are received, if certain conditions are met. Adoption of this ASU did not have a material impact on PPG's consolidated financial position, results of operations or cash flows.
Recently Issued Accounting Standards
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07 “Improvements to Reportable Segment Disclosures (Topic 280)”. This ASU updates current reportable segment disclosure requirements to require disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual or the name of the group or committee identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. This ASU will be effective for the annual period ending December 31, 2024. Adoption of this ASU will result in additional disclosure, but it will not impact PPG’s consolidated financial position, results of operations or cash flows.
In December 2023, the FASB issued ASU No. 2023-09 “Improvements to Income Tax Disclosures (Topic 740)”. This ASU updates current income tax disclosure requirements to require disclosures of specific categories of information within the effective tax rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. This ASU will be effective for the annual period ending December 31, 2025. Adoption of this ASU will result in additional disclosure, but it will not impact PPG’s consolidated financial position, results of operations or cash flows.
3.Divestitures
On August 29, 2024, PPG announced that it entered into a definitive agreement to sell its silicas products business for approximately $310 million. The transaction is expected to close in the fourth quarter 2024, subject to customary closing conditions. Upon entering into this definitive agreement, the Company determined that the assets and
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liabilities of the silicas products business met the criteria for classification as held for sale in the condensed consolidated balance sheet as of September 30, 2024. The Company determined that the pending divestiture does not meet the criteria of a discontinued operation as it would not represent a strategic shift for the Company, and therefore, its results are included in the Company's continuing operations within the Industrial Coatings reportable business segment.
The carrying amounts of the major classes of assets and liabilities of the silicas products business classified as held for sale in the condensed consolidated balance sheet were as follows:
($ in millions)September 30, 2024
Receivables, net$50 
Inventories24 
Other current assets4 
Property, plant and equipment (net of accumulated depreciation of $281)146 
Goodwill2 
Deferred income taxes1 
Operating lease right-of-use assets6 
Other assets4 
Assets held for sale$237 
Accounts payable and accrued liabilities$65 
Current portion of operating lease liabilities1 
Operating lease liabilities5 
Other liabilities2 
Liabilities held for sale$73 

4.     Inventories
($ in millions)September 30, 2024December 31, 2023
Finished products$1,247 $1,197 
Work in process272 236 
Raw materials693 640 
Supplies51 54 
Total Inventories$2,263 $2,127 
Most U.S. inventories are valued using the last-in, first-out method. These inventories represented approximately 16% and 20% of total inventories at September 30, 2024 and December 31, 2023, respectively. If the first-in, first-out ("FIFO") method of inventory valuation had been used, inventories would have been $235 million and $249 million higher as of September 30, 2024 and December 31, 2023, respectively.
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5.    Goodwill and Other Identifiable Intangible Assets
The Company tests indefinite-lived intangible assets and goodwill for impairment by performing either a qualitative evaluation or a quantitative test at least annually, or more frequently if an indication of impairment arises. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit or asset is less than its carrying amount.
The Company did not identify an indication of goodwill impairment for any of its reporting units or an indication of impairment of any of its indefinite-lived intangible assets during the nine months ended September 30, 2024.
The change in the carrying amount of goodwill attributable to each reportable segment for the nine months ended September 30, 2024 was as follows:
($ in millions)Performance
Coatings		Industrial
Coatings		Total
January 1, 2024$4,994 $1,206 $6,200 
Acquisitions, including purchase accounting adjustments2 — 2 
Reclassified to assets held for sale(a)
— (2)(2)
Foreign currency impact(115)(5)(120)
September 30, 2024$4,881 $1,199 $6,080 
(a)Amount represents the allocation of $2 million of goodwill to the silicas products business disposal group classified as held for sale. Refer to Note 3, Divestitures for further information.
As of both September 30, 2024 and December 31, 2023, accumulated goodwill impairment losses totaled $158 million, all of which relates to the Performance Coatings reportable segment.
A summary of the carrying value of the Company's identifiable intangible assets is as follows:
 September 30, 2024December 31, 2023
($ in millions)Gross
Carrying
Amount		Accumulated
Amortization		NetGross
Carrying
Amount		Accumulated
Amortization		Net
Indefinite-Lived Identifiable Intangible Assets
Trademarks$1,333 $— $1,333 $1,442 $— $1,442 
Definite-Lived Identifiable Intangible Assets
Acquired technology$841 ($696)$145 $845 ($678)$167 
Customer-related1,906 (1,308)598 1,933 (1,259)674 
Trade names313 (188)125 319 (180)139 
Other49 (47)2 50 (48)2 
Total Definite-Lived Intangible Assets$3,109 ($2,239)$870 $3,147 ($2,165)$982 
Total Identifiable Intangible Assets$4,442 ($2,239)$2,203 $4,589 ($2,165)$2,424 
The Company’s identifiable intangible assets with definite lives are being amortized over their estimated useful lives.
As of September 30, 2024, estimated future amortization expense of identifiable intangible assets is as follows:
($ in millions)Future Amortization Expense
Remaining three months of 2024$35 
2025$128 
2026$107 
2027$96 
2028$83 
2029$78 
Thereafter$343 
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6.     Business Restructuring
The Company records restructuring liabilities that represent charges incurred in connection with consolidations of certain operations, including both operations from acquisitions and headcount reduction programs. These charges consist primarily of severance costs and certain other cash costs. As a result of these programs, the Company also incurs incremental non-cash accelerated depreciation expense for certain assets due to their reduced expected useful life. These charges are not allocated to the Company’s reportable business segments. Refer to Note 16, "Reportable Business Segment Information" for additional information.
The following table summarizes restructuring reserve activity for the nine months ended September 30, 2024 and 2023:
Total Reserve
($ in millions)20242023
January 1$113 $169 
Approved restructuring actions— 12 
Release of prior reserves and other adjustments(a)
(3)(16)
Cash payments(37)(44)
Foreign currency impact— (2)
September 30$73 $119 
(a)Certain releases were recorded to reflect the current estimate of costs to complete planned business restructuring actions.
The majority of the approved business restructuring actions and associated cash outlays are expected to be completed in the next twelve months.
7.    Borrowings
Credit Agreements
In April 2023, PPG entered into a €500 million term loan credit agreement (the "Term Loan"). The Term Loan provides the Company with the ability to increase the size of the loan by an amount not to exceed €250 million. The Term Loan contains covenants that are consistent with those in the Credit Agreement discussed below and that are usual and customary restrictive covenants for facilities of its type, which include, with specified exceptions, limitations on the Company’s ability to create liens or other encumbrances, to enter into sale and leaseback transactions and to enter into consolidations, mergers or transfers of all or substantially all of its assets. The Term Loan terminates and all amounts outstanding are payable in April 2026. In April 2023, PPG borrowed €500 million under the Term Loan. In December 2023, PPG obtained lender commitments sufficient to increase the size of the Term Loan by €250 million. In January 2024, PPG borrowed the additional €250 million. The Term Loan is denominated in euro and has been designated as a hedge of the net investment in the Company’s European operations. For more information, refer to Note 12 “Financial Instruments, Hedging Activities and Fair Value Measurements.”
In March 2023, PPG amended its five-year credit agreement (the “Credit Agreement”) dated as of August 30, 2019. The amendments to the Credit Agreement replace the LIBOR-based reference interest rate option with a reference interest rate option based upon Term SOFR. The other terms of the Credit Agreement remained unchanged. In July 2023, PPG amended and restated the Credit Agreement, extending the term through July 27, 2028. The amended and restated Credit Agreement provides for a $2.3 billion unsecured revolving credit facility. The Company has the ability to increase the size of the Credit Agreement by up to an additional $750 million, subject to the receipt of lender commitments and other conditions precedent. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement. There were no amounts outstanding under the Credit Agreement as of September 30, 2024 and December 31, 2023.
Borrowings under the Credit Agreement may be made in U.S. Dollars or in euros. The Credit Agreement provides that loans will bear interest at rates based, at the Company’s option, on one of two specified base rates plus a margin based on certain formulas defined in the Credit Agreement. Additionally, the Credit Agreement contains a Commitment Fee, as defined in the Credit Agreement, on the amount of unused commitments under the Credit Agreement ranging from 0.060% to 0.125% per annum.
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The Credit Agreement also supports the Company’s commercial paper borrowings which are classified as long-term based on PPG’s intent and ability to refinance these borrowings on a long-term basis. There were $408 million commercial paper borrowings outstanding as of September 30, 2024 and no commercial paper borrowings outstanding as of December 31, 2023.
The Credit Agreement contains usual and customary restrictive covenants for facilities of its type, which include, with specified exceptions, limitations on the Company’s ability to create liens or other encumbrances, to enter into sale and leaseback transactions and to enter into consolidations, mergers or transfers of all or substantially all of its assets. The Credit Agreement also requires the Company to maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Credit Agreement, of 60% or less; provided, that for any fiscal quarter in which the Company has made an acquisition for consideration in excess of $1 billion and for the next five fiscal quarters thereafter, the ratio of Total Indebtedness to Total Capitalization may not exceed 65% at any time. As of September 30, 2024, Total Indebtedness to Total Capitalization as defined under the Credit Agreement was 44%.
The Credit Agreement contains, among other things, customary events of default that would permit the lenders to accelerate the loans, including the failure to make timely payments when due under the Credit Agreement or other material indebtedness, the failure to satisfy covenants contained in the Credit Agreement, a change in control of the Company and specified events of bankruptcy and insolvency.
Other Long-term Debt Activities
In August 2024, PPG's $300 million 2.4% notes matured, and the Company repaid this obligation using cash on hand.
In March 2023, PPG's $300 million 3.2% notes matured, and the Company repaid this obligation using cash on hand.
In May 2022, PPG completed a public offering of €300 million 1.875% Notes due 2025 and €700 million 2.750% Notes due 2029. These notes were issued pursuant to PPG’s existing shelf registration statement and pursuant to an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented (the "2022 Indenture"). The 2022 Indenture governing these notes contains covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets. The terms of these notes also require the Company to make an offer to repurchase Notes upon a Change of Control Triggering Event (as defined in the 2022 Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest. The Company may issue additional debt from time to time pursuant to the Indenture. The aggregate cash proceeds from the notes, net of discounts and fees, was $1,061 million. The notes are denominated in euro and have been designated as hedges of net investments in the Company’s European operations. Refer to Note 12 “Financial Instruments, Hedging Activities and Fair Value Measurements.” for additional information.
In March 2022, PPG privately placed a 15-year €50 million 1.95% fixed interest note. This note contains covenants materially consistent with the 1.875% notes discussed above. This debt arrangement is denominated in euros and has been designated as a net investment hedge of the Company's European operations. Refer to Note 12 "Financial Instruments, Hedging Activities and Fair Value Measurements" for additional information.
In February 2021, PPG entered into a $2.0 billion Term Loan Credit Agreement (the "Term Loan Credit Agreement") to finance the Company’s acquisition of Tikkurila, and to pay fees, costs and expenses related thereto. The Term Loan Credit Agreement provided the Company with the ability to borrow up to an aggregate principal amount of $2.0 billion on an unsecured basis. In addition to the amounts borrowed to finance the acquisition of Tikkurila, the Term Loan Credit Agreement allowed the Company to make up to eleven additional borrowings prior to December 31, 2021, to be used for working capital and general corporate purposes. The Term Loan Credit Agreement contains covenants that are consistent with those in the Credit Agreement discussed above and that are usual and customary restrictive covenants for facilities of its type, which include, with specified exceptions, limitations on the Company’s ability to create liens or other encumbrances, to enter into sale and leaseback transactions and to enter into consolidations, mergers or transfers of all or substantially all of its assets. The Term Loan Credit Agreement was scheduled to mature and all outstanding borrowings were to be due and payable on the third anniversary of the date of the initial borrowing under the Agreement. In June 2021, PPG borrowed $700 million under Term Loan Credit Agreement to finance the Company’s acquisition of Tikkurila, and to pay fees, costs and expenses related thereto. In December 2021, PPG borrowed an additional $700 million under the Term Loan Credit Agreement. In 2022 and 2023, PPG repaid $300 million and $1.1 billion, respectively, of the Term Loan Credit Agreement using cash on hand. The Term Loan Credit Agreement was fully repaid as of December 31, 2023.
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Restrictive Covenants and Cross-Default Provisions
As of September 30, 2024, PPG was in full compliance with the restrictive covenants under its various credit agreements, loan agreements and indentures.
Additionally, the Company’s Credit Agreement contains customary cross-default provisions. These provisions provide that a default on a debt service payment of $100 million or more for longer than the grace period provided under another agreement may result in an event of default under this agreement. None of the Company’s primary debt obligations are secured or guaranteed by the Company’s affiliates.
Letters of Credit and Surety Bonds
The Company had outstanding letters of credit and surety bonds of $247 million and $232 million as of September 30, 2024 and December 31, 2023, respectively.
8.    Earnings Per Common Share
The effect of dilutive securities on the weighted average common shares outstanding included in the calculation of earnings per diluted common share for the three and nine months ended September 30, 2024 and 2023 were as follows:
 Three Months Ended
September 30		Nine Months Ended
September 30
(number of shares in millions)2024202320242023
Weighted average common shares outstanding233.3 236.2 234.5 236.0 
Effect of dilutive securities:
Stock options0.3 0.6 0.4 0.5 
Other stock compensation plans0.7 0.7 0.7 0.7 
Potentially dilutive common shares1.0 1.3 1.1 1.2 
Adjusted weighted average common shares outstanding234.3 237.5 235.6 237.2 
Dividends per common share$0.68 $0.65 $1.98 $1.89 
Antidilutive securities(a):
Stock options1.6 0.4 1.3 0.9 
(a)Excluded from the computation of earnings per diluted share due to their antidilutive effect.
9.    Income Taxes
Nine Months Ended
September 30
20242023
Effective tax rate on pretax income22.9 %22.5 %
Income tax expense for the nine months ended September 30, 2024 and 2023 is based on an estimated annual effective rate, which requires management to make its best estimate of annual pretax income or loss. During the year, PPG management regularly updates forecasted annual pretax results for the various countries in which PPG operates based on changes in factors such as prices, shipments, product mix, raw material inflation and manufacturing operations. To the extent that actual 2024 pretax results for U.S. and foreign income or loss vary from estimates, the actual Income tax expense recognized in 2024 could be different from the forecasted amount used to estimate Income tax expense for the nine months ended September 30, 2024.
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10.    Pensions and Other Postretirement Benefits
In March 2023, the Company purchased group annuity contracts that transferred to third-party insurance companies pension benefit obligations for certain of the Company’s retirees in the U.S. who were receiving their monthly retirement benefit payments from the U.S. pension plan. The amount of each affected retiree’s annuity payment is equal to the amount of such individual’s pension benefit. The purchase of group annuity contracts was funded directly by the assets of the U.S. plans. By transferring the obligations and assets to the insurance companies, the Company reduced its overall pension projected benefit obligation by $309 million and recognized a non-cash Pension settlement charge of $190 million.
The service cost component of net periodic pension and other postretirement benefit cost is included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative, and Research and development, net in the accompanying condensed consolidated statement of income. Except for the Pension settlement charge in the quarter ended March 31, 2023, all other components of net periodic benefit cost are recorded in Other (income)/charges, net in the accompanying condensed consolidated statement of income.
Net periodic pension benefit cost and other postretirement benefit cost for the three and nine months ended September 30, 2024 and 2023 was as follows:
Pension
Three Months Ended
September 30		Nine Months Ended
September 30
($ in millions)2024202320242023
Service cost$2 $2 $6 $6 
Interest cost25 28 77 83 
Expected return on plan assets(28)(28)(82)(83)
Amortization of actuarial losses6 6 17 16 
Settlements1 — 9 191 
Net periodic benefit cost$6 $8 $27 $213 
 Other Postretirement Benefits
 Three Months Ended
September 30		Nine Months Ended
September 30
($ in millions)2024202320242023
Service cost$1 $1 $3 $3 
Interest cost5 7 17 20 
Amortization of actuarial gains— — (1)(1)
Amortization of prior service credit(1)(2)(3)(5)
Net periodic benefit cost$5 $6 $16 $17 
Net periodic pension cost was lower for the nine months ended September 30, 2024 compared to 2023 primarily due to the Pension settlement charge recognized in the first quarter 2023.
PPG expects 2024 full year net periodic pension expense of approximately $35 million and net periodic other postretirement expense of approximately $21 million.
Contributions to Defined Benefit Pension Plans
Three Months Ended
September 30		Nine Months Ended
September 30
($ in millions)2024202320242023
U.S. defined benefit pension plan mandatory contributions$5 $— $5 $— 
Non-U.S. defined benefit pension mandatory contributions— 1 2 3 
Total defined benefit pension mandatory contributions$5 $1 $7 $3 
PPG expects to make mandatory contributions to its defined benefit pension plans in the range of $10 million to $20 million during the remaining three months of 2024. In addition to any mandatory contributions, PPG may elect to make voluntary contributions to its defined benefit pension plans in 2024 and beyond.
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11.    Accumulated Other Comprehensive Loss (AOCL)
($ in millions)
Foreign Currency Translation Adjustments (a)
Pension and Other Postretirement Benefit Adjustments, net of tax (b)
Unrealized Gain on Derivatives, net of taxAccumulated Other Comprehensive Loss
January 1, 2023($2,254)($557)$1 ($2,810)
Current year deferrals to AOCL170 (14)— 156 
Reclassifications from AOCL to net income30 152 — 182 
September 30, 2023($2,054)($419)$1 ($2,472)
January 1, 2024($1,746)($494)$1 ($2,239)
Current year deferrals to AOCL(558)1 — (557)
Reclassifications from AOCL to net income— 16 — 16 
September 30, 2024($2,304)($477)$1 ($2,780)
(a)The tax cost related to unrealized foreign currency translation adjustments on net investment hedges was $39 million and $85 million as of September 30, 2024 and 2023, respectively.
(b)The tax benefit related to the adjustment for pension and other postretirement benefits was $8 million and $47 million for the nine months ended September 30, 2024 and 2023, respectively. Reclassifications from AOCL are included in the computation of net periodic benefit cost (See Note 10, "Pensions and Other Postretirement Benefits").
12.    Financial Instruments, Hedging Activities and Fair Value Measurements
Financial instruments include cash and cash equivalents, short-term investments, cash held in escrow, marketable equity securities, accounts receivable, company-owned life insurance, accounts payable, short-term and long-term debt instruments, and derivatives. The fair values of these financial instruments approximated their carrying values at September 30, 2024 and December 31, 2023, in the aggregate, except for long-term debt instruments.
Hedging Activities
The Company has exposure to market risk from changes in foreign currency exchange rates and interest rates. As a result, financial instruments, including derivatives, have been used to hedge a portion of these underlying economic exposures. Certain of these instruments may qualify as fair value, cash flow, and net investment hedges upon meeting the requisite criteria, including effectiveness of offsetting hedged or underlying exposures. Changes in the fair value of derivatives that do not qualify for hedge accounting are recognized in Income before income taxes in the period incurred.
PPG’s policies do not permit speculative use of derivative financial instruments. PPG enters into derivative financial instruments with high credit quality counterparties and diversifies its positions among such counterparties in order to reduce its exposure to credit losses. The Company did not realize a credit loss on derivatives during the three and nine months ended September 30, 2024 and 2023.
All of PPG's outstanding derivative instruments are subject to accelerated settlement in the event of PPG’s failure to meet its debt or payment obligations under the terms of the instruments’ contractual provisions. In addition, if the Company would be acquired and its payment obligations under its derivative instruments’ contractual arrangements are not assumed by the acquirer, or if PPG would enter into bankruptcy, receivership or reorganization proceedings, its outstanding derivative instruments would also be subject to accelerated settlement.
There were no derivative instruments de-designated or discontinued as hedging instruments during the three and nine months ended September 30, 2024 and 2023, and there were no gains or losses deferred in Accumulated other comprehensive loss on the condensed consolidated balance sheet that were reclassified to Income before income taxes in the condensed consolidated statement of income in the nine months ended September 30, 2024 and 2023 related to hedges of anticipated transactions that were no longer expected to occur.
Fair Value Hedges
The Company uses interest rate swaps from time to time to manage its exposure to changing interest rates. When outstanding, the interest rate swaps are typically designated as fair value hedges of certain outstanding debt obligations of the Company and are recorded at fair value.
PPG has interest rate swaps which converted $375 million of fixed rate debt to variable rate debt as of both September 30, 2024 and December 31, 2023. These swaps are designated as fair value hedges and are carried at
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fair value. Changes in the fair value of these swaps and changes in the fair value of the related debt are recorded in interest expense in the accompanying condensed consolidated statement of income. The fair value of these interest rate swaps were liabilities of $8 million and $14 million at September 30, 2024 and December 31, 2023, respectively.
Cash Flow Hedges
At times, PPG designates certain foreign currency forward contracts as cash flow hedges of the Company’s exposure to variability in exchange rates on third party transactions denominated in foreign currencies. There were no outstanding cash flow hedges at September 30, 2024 and December 31, 2023.
Net Investment Hedges
PPG uses cross currency swaps and foreign currency euro-denominated debt to hedge a significant portion of its net investment in its European operations, as follows:
PPG had U.S. dollar to euro cross currency swap contracts with total notional amounts of $375 million and $475 million as of September 30, 2024 and December 31, 2023, and designated these contracts as hedges of the Company's net investment in its European operations. During the term of these contracts, PPG will receive payments in U.S. dollars and make payments in euros to the counterparties. As of September 30, 2024 and December 31, 2023, the fair value of the U.S. dollar to euro cross currency swap contracts were net assets of $30 million and $33 million, respectively.
At September 30, 2024 and December 31, 2023, PPG had designated €3.2 billion and €3.0 billion, respectively, of euro-denominated borrowings as hedges of a portion of its net investment in the Company's European operations. The carrying value of these instruments were $3.6 billion and $3.3 billion as of September 30, 2024 and December 31, 2023, respectively.
Other Financial Instruments
PPG uses foreign currency forward contracts to manage certain net transaction exposures that either have not been elected, or do not qualify for hedge accounting; therefore, the change in the fair value of these instruments is recorded in Other (income)/charges, net in the condensed consolidated statement of income in the period of change. Underlying notional amounts related to these foreign currency forward contracts were $2.9 billion and $2.5 billion at September 30, 2024 and December 31, 2023, respectively. The fair values of these contracts were net liabilities of $21 million as of September 30, 2024 and net assets of $23 million as of December 31, 2023.
Gains/Losses Deferred in Accumulated Other Comprehensive Loss
The following table summarizes the amount of gains and losses deferred in Other comprehensive income ("OCI") and the amount and location of gains and losses recognized within the condensed consolidated statement of income related to derivative and debt financial instruments for the nine months ended September 30, 2024 and 2023. All amounts are shown on a pretax basis.
September 30, 2024September 30, 2023Caption In Condensed Consolidated Statement of Income
($ in millions)Loss Deferred in OCIGain/(Loss) RecognizedGain Deferred in OCIGain/(Loss) Recognized
Economic
   Foreign currency forward contracts
$— $38 $— $37 Other (income)/charges, net
Fair Value
   Interest rate swaps
— (8)— (7)Interest expense
Total forward contracts and interest rate swaps$— $30 $— $30 
Net Investment
Cross currency swaps($1)$7 $2 $10 Interest expense
Foreign denominated debt(33)— 48 — 
Total Net Investment($34)$7 $50 $10 
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Fair Value Measurements
The Company follows a fair value measurement hierarchy to measure its assets and liabilities. As of September 30, 2024 and December 31, 2023, the assets and liabilities measured at fair value on a recurring basis were cash equivalents, equity securities and derivatives. In addition, the Company measures its pension plan assets at fair value (see Note 14, "Employee Benefit Plans" under Item 8 in the 2023 Form 10-K for further details). The Company's financial assets and liabilities are measured using inputs from the following three levels:
Level 1 inputs are quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Level 1 inputs are considered to be the most reliable evidence of fair value as they are based on unadjusted quoted market prices from various financial information service providers and securities exchanges.
Level 2 inputs are directly or indirectly observable prices that are not quoted on active exchanges, which include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. The fair values of the derivative instruments reflect the instruments' contractual terms, including the period to maturity, and uses observable market-based inputs, including forward curves.
Level 3 inputs are unobservable inputs employed for measuring the fair value of assets or liabilities. The Company did not have any recurring financial assets or liabilities recorded in its condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 that were measured using Level 3 inputs.
Assets and liabilities reported at fair value on a recurring basis
September 30, 2024December 31, 2023
($ in millions)Level 1Level 2Level 3Level 1Level 2Level 3
Assets:
Other current assets:
Marketable equity securities$9 $— $— $9 $— $— 
Foreign currency forward contracts (a)
$— $9 $— $— $28 $— 
Cross currency swaps (b)
$— $— $— $— $2 $— 
Investments:
Marketable equity securities$87 $— $— $74 $— $— 
Other assets:
Cross currency swaps (b)
$— $30 $— $— $31 $— 
Liabilities:
Accounts payable and accrued liabilities:
Foreign currency forward contracts (a)
$— $30 $— $— $5 $— 
Other liabilities:
Interest rate swaps (c)
$— $8 $— $— $14 $— 
(a)Derivatives not designated as hedging instruments
(b)Net investment hedges
(c)Fair value hedges
Long-Term Debt
($ in millions)
September 30, 2024 (a)
December 31, 2023 (b)
Long-term debt - carrying value$6,466 $6,042 
Long-term debt - fair value$6,339 $5,781 
(a)Excludes finance lease obligations of $8 million and short-term borrowings of $3 million as of September 30, 2024.
(b)Excludes finance lease obligations of $8 million and short-term borrowings of $4 million as of December 31, 2023.
The fair values of the debt instruments were measured using Level 2 inputs, including discounted cash flows and interest rates then currently available to the Company for instruments of the same remaining maturities.
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13.    Stock-Based Compensation
The Company’s stock-based compensation includes stock options, restricted stock units (“RSUs”) and grants of contingent shares that are earned based on achieving targeted levels of total shareholder return ("TSR"). All current grants of stock options, RSUs and contingent shares are made under the PPG Industries, Inc. Amended and Restated Omnibus Incentive Plan (“PPG Amended Omnibus Plan”), which was amended and restated effective April 21, 2016.
Three Months Ended
September 30		Nine Months Ended
September 30
($ in millions)2024202320242023
Stock-based compensation expense$10 $8 $32 $42 
Income tax benefit recognized$3 $2 $7 $9 
Grants of stock-based compensation during the nine months ended September 30, 2024 and 2023 were as follows:
Nine Months Ended
September 30
20242023
SharesFair ValueSharesFair Value
Stock options426,389 $43.83 410,001 $38.55 
Restricted stock units243,504 $135.61 289,573 $125.79 
Contingent shares (a)
51,543 $142.65 52,389 $129.03 
(a)The number of contingent shares represents the target value of the award.
Stock options are generally exercisable 36 months after being granted and have a maximum term of 10 years. Compensation expense for stock options is recorded over the vesting period based on the fair value on the date of grant. The fair value of the stock options granted during the nine months ended September 30, 2024 was calculated with the following weighted average assumptions:
Weighted average exercise price$142.65
Risk-free interest rate4.3 %
Expected life of option in years6.5
Expected dividend yield1.7 %
Expected volatility28.4 %
The risk-free interest rate is determined by using the U.S. Treasury yield curve at the date of the grant and using a maturity equal to the expected life of the option. The expected life of options is calculated using the average of the vesting term and the maximum term, as prescribed by accounting guidance on the use of the simplified method for determining the expected term of an employee share option. The expected dividend yield and volatility are based on historical stock prices and dividend amounts over past time periods equal in length to the expected life of the options.
Time-based RSUs generally vest over the three-year period following the date of grant, unless forfeited, and will be paid out in the form of stock, cash or a combination of both at the Company’s discretion at the end of the vesting period. Performance-based RSUs vest based on achieving specific annual performance targets for adjusted earnings per share growth and cash flow return on capital over the three calendar year-end periods following the date of grant. Unless forfeited, the performance-based RSUs will be paid out in the form of stock, cash or a combination of both at the Company’s discretion at the end of the three-year performance period if PPG meets the performance targets.
The amount paid upon vesting of performance-based RSUs may range from 0% to 200% of the original grant, based upon the level of adjusted earnings per share growth achieved and frequency with which the annual cash flow return on capital performance target is met over the three calendar year periods comprising the vesting period. Performance against the earnings per share growth and the cash flow return on capital target is calculated annually, and the annual payout for each goal is weighted equally over the three-year period.
The Company also provides grants of contingent shares to selected key executives that may be earned based on PPG's TSR over the three-year period following the date of grant. Contingent share grants (referred to as “TSR awards”) are made annually and are paid out at the end of each three-year period based on the Company’s stock
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performance. Performance is measured by determining the percentile rank of the total shareholder return of PPG common stock in relation to the TSR of the S&P 500 Index for the three-year period following the date of grant. This comparison group represents the entire S&P 500 Index as it existed at the beginning of the performance period, excluding any companies that were removed from the index because they ceased to be publicly traded. The payment of awards following the three-year award period is based on performance achieved in accordance with the scale set forth in the plan agreement and may range from 0% to 200% of the initial grant. A payout of 100% is earned if target performance is achieved. Contingent share awards earn dividend equivalents for the award period, which are paid to participants or credited to the participants’ deferred compensation plan accounts with the award payout at the end of the period based on the actual number of contingent shares that are earned. Any payments made at the end of the award period may be in the form of stock, cash or a combination of both. The TSR awards are classified as liability awards, and compensation expense is recognized over the three-year award period based on the fair value of the awards (giving consideration to the Company’s percentile rank of TSR) remeasured in each reporting period until settlement of the awards.
14.    Commitments and Contingent Liabilities
PPG is involved in a number of lawsuits and claims, both actual and potential, including some that it has asserted against others, in which substantial monetary damages are sought. These lawsuits and claims may relate to contract, patent, environmental, product liability, antitrust, employment and other matters arising out of the conduct of PPG’s current and past business activities. To the extent that these lawsuits and claims involve personal injury, property damage and certain other claims, PPG believes it has adequate insurance; however, certain of PPG’s insurers are contesting coverage with respect to some of these claims, and certain insurers may contest coverage with respect to claims in the future. 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, asbestos and other matters.
The results of any current or future litigation and claims are inherently unpredictable. However, management believes that, in the aggregate, the outcome of all lawsuits and claims involving PPG will not have a material effect on PPG’s consolidated financial position or liquidity; however, such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized.
Asbestos Matters
As of September 30, 2024, the Company was aware of certain asbestos-related claims pending against the Company and certain of its subsidiaries. The Company is defending these asbestos-related claims vigorously. The asbestos-related claims consist of claims against the Company alleging:
•exposure to asbestos or asbestos-containing products manufactured, sold or distributed by the Company or its subsidiaries (“Products Claims”);
•personal injury caused by asbestos on premises presently or formerly owned, leased or occupied by the Company (“Premises Claims”); and
•asbestos-related claims against a subsidiary the Company acquired in 2013 (“Subsidiary Claims”).
The Company monitors and reviews the activity associated with its asbestos claims and evaluates, on a periodic basis, its estimated liability for such claims and all underlying assumptions to determine whether any adjustment to the reserves for these claims is required. Additionally, as a supplement to its periodic monitoring and review, the Company conducts discussions with counsel and engages valuation consultants to analyze its claims history and estimate the amount of the Company’s potential liability for asbestos-related claims. As of September 30, 2024 and December 31, 2023, the Company's asbestos-related reserves totaled $46 million and $48 million, respectively.
The Company believes that, based on presently available information, the total reserves of $46 million for asbestos-related claims will be sufficient to encompass all of the Company’s current and estimable potential future asbestos liabilities. These reserves, which are included within Other liabilities on the accompanying consolidated balance sheets, involve significant management judgment and represent the Company’s current best estimate of its liability for these claims.
The amount reserved for asbestos-related claims by its nature is subject to many uncertainties that may change over time, including (i) the ultimate number of claims filed; (ii) whether closed, dismissed or dormant claims are reinstituted, reinstated or revived; (iii) the amounts required to resolve both currently known and future unknown claims; (iv) the amount of insurance, if any, available to cover such claims; (v) the unpredictable aspects of the tort system, including a changing trial docket and the jurisdictions in which trials are scheduled; (vi) the outcome of any trials, including potential judgments or jury verdicts; (vii) the lack of specific information in many cases concerning
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exposure for which the Company is allegedly responsible, and the claimants’ alleged diseases resulting from such exposure; and (viii) potential changes in applicable federal and/or state tort liability law. All of these factors may have a material effect upon future asbestos-related liability estimates. While the ultimate outcome of the Company’s asbestos litigation cannot be predicted with certainty, the Company believes that any financial exposure resulting from its asbestos-related claims will not have a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations.
Environmental Matters
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; however, any such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized. Management anticipates that the resolution of the Company’s environmental contingencies will occur over an extended period of time.
As remediation at certain environmental sites progresses, PPG continues to refine its assumptions underlying the estimates of the expected future costs of its remediation programs. PPG’s ongoing evaluation may result in additional charges against income to adjust the reserves for these sites. In 2024 and 2023, certain charges have been recorded based on updated estimates to increase existing reserves for these sites. Certain other charges related to environmental remediation actions are expensed as incurred.