2. COMPANY PROFILE
PPG Industries’ vision is to continue to be the world’s leading coatings and specialty products company. Founded
in 1883, the company serves customers in industrial, transportation, consumer products, and construction markets
and aftermarkets. With headquarters in Pittsburgh, Pa., PPG operates in more than 60 countries around the globe.
PERFORMANCE COATINGS 2009 Segment Net Sales
AEROSPACE. Leading supplier of transparencies, sealants, coatings and
surface solutions, packaging, and chemical management services, serving Performance Coatings (34%)
original equipment manufacturers and maintenance providers for the
commercial, military, regional jet and general aviation industries. Also Industrial Coatings (25%)
supplies transparent armor for military markets.
Architectural Coatings – EMEA (16%)
ARCHITECTURAL COATINGS AMERICAS AND ASIA/PACIFIC. Produces Optical and Specialty Materials (8%)
paints, stains and specialty coatings for the commercial, maintenance and
residential markets under brands such as Pittsburgh®, PPG, Renner®, Lucite®, Commodity Chemicals (10%)
Olympic®, Taubmans® and Ivy®. Glass (7%)
AUTOMOTIVE REFINISH. Produces and markets a full line of coatings
products and related services for automotive and commercial transport/fleet
repair and refurbishing, light industrial coatings and specialty coatings for signs.
ARCHITECTURAL COATINGS – EMEA
PROTECTIVE AND MARINE COATINGS. Leading supplier of corrosion- ARCHITECTURAL COATINGS – EMEA (Europe, Middle East and Africa).
resistant, appearance-enhancing coatings for the marine, infrastructure, Supplier of market-leading paint brands for the trade and retail markets such
petrochemical, offshore and power industries. Produces the Amercoat®, as Sigma Coatings®, Histor®, Seigneurie®, Ripolin®, Johnstone’s®, Leyland®,
Freitag®, PPG High Performance Coatings and Sigma Coatings® brands. Dekoral®, Trilak®, Primalex®, Prominent Paints® and Freitag®.
INDUSTRIAL COATINGS OPTICAL AND SPECIALTY MATERIALS
AUTOMOTIVE COATINGS. Leading supplier of automotive coatings and OPTICAL PRODUCTS. Produces optical monomers, including CR-39®
services to auto and truck manufacturers. Products include electrocoats, and Trivex® lens materials, photochromic dyes and Transitions® photochromic
primer surfacers, base coats, clearcoats, bedliner, pretreatment chemicals, ophthalmic plastic lenses.
adhesives and sealants.
SILICAS. Produces amorphous precipitated silicas for tire, battery separator
INDUSTRIAL COATINGS. Produces coatings for appliances, agricultural and and other end-use applications and Teslin® synthetic printing sheet used in
construction equipment, consumer products, electronics, automotive parts, applications such as radio frequency identification (RFID) tags and labels,
residential and commercial construction, wood flooring, joinery (windows and e-passports, driver’s licenses and identification cards.
doors) and other finished products.
COMMODITY CHEMICALS
PACKAGING COATINGS. Supplier of coatings, inks, compounds, pretreatment CHLOR-ALKALI AND DERIVATIVES. Producer of chlorine, caustic soda
chemicals and lubricants for metal, glass and plastic containers for the and related chemicals for use in chemical manufacturing, pulp and paper
beverage, food, general line and specialty packaging industries. production, water treatment, plastics production, agricultural products and
many other applications.
GLASS
Contents FIBER GLASS. Manufacturer of fiber glass reinforcement materials for
thermoset and thermoplastic composite applications, serving markets such
Financial Highlights ......................................................1
as wind energy, energy infrastructure and transportation. Produces fiber glass
Letter From the Chairman ............................................2 yarns for electronic printed circuit boards and other specialty applications.
Management’s Discussion and Analysis .....................15 PERFORMANCE GLAZINGS. Produces glass that is fabricated into products
primarily for commercial construction and residential markets, as well as the
Financial and Operating Review .................................28
solar energy, appliance, mirror and transportation industries.
Five-Year Digest.........................................................80
PPG Shareholder Information ....................................81
2009 Annual Report
3. 2009 Financial Highlights
Average shares outstanding and all dollar amounts except per share data are in millions.
10,126 10,938 12,220 15,849 12,239 596 711 834 538 336 3.49 4.27 5.03 3.25 2.03 1.86 1.91 2.04 2.09 2.13
05 06 07 08 09 05 06 07 08 09 05 06 07 08 09 05 06 07 08 09
FOR THE YEAR 2009 CHANGE 2008 AT YEAR END 2009 CHANGE 2008
Net Sales $ 12,239 -23 % $ 15,849 PPG Shareholders’ Equity $ 3,753 13 % $ 3,333
Net Income* $ 336 -38 % $ 538
*Includes in 2009 aftertax charges of $149 million, or 91 cents per share, representing business
Earnings Per Share*‡ $ 2.03 -38 % $ 3.25 restructuring and the net increase in the value of the company’s obligation under its asbestos
Dividends Per Share $ 2.13 2% $ 2.09 settlement agreement. Includes in 2008 aftertax charges of $224 million, or $1.36 per share,
representing business restructuring, acquisition-related costs, catch-up of depreciation, divestiture-
Return on Average Capital 6.6 % -23 % 8.6 %
related benefit costs and the net increase in the value of the company’s obligations under its asbestos
Operating Cash Flow $ 1,345 -6 % $ 1,437 settlement agreement, and aftertax earnings of $3 million, or 2 cents per share, for the gain on
Capital Spending $ 265 -87 % $ 2,056 divestiture of a majority interest in the automotive glass and services business.
Research and Development $ 403 -14 % $ 468 ‡Assumes dilution.
Average Shares Outstanding‡ 165.5 —% 165.4
Average Number of Employees 39,900 -11 % 44,900
Board of Directors Operating Committee
Charles E. Bunch Robert Mehrabian Charles E. Bunch Michael H. McGarry
Chairman and Chief Executive Officer, Chairman, President and CEO, Chairman and Chief Executive Officer Sr. Vice President, Commodity Chemicals
PPG Industries Teledyne Technologies Incorporated
Officers-Directors Compensation Committee;
Robert J. Dellinger William A. Wulfsohn
James G. Berges Technology and Environment Committee Sr. Vice President, Finance, and Chief Financial Officer Sr. Vice President, Industrial Coatings
Partner, Clayton, Dubilier & Rice, and
Martin H. Richenhagen James C. Diggs Aziz S. Giga
retired President, Emerson Electric Co.
Chairman, President and Chief Executive Officer, Sr. Vice President and General Counsel Vice President, Strategic Planning and Treasurer
Audit Committee; Nominating and
Governance Committee AGCO Corporation J. Rich Alexander Charles F. Kahle
Audit Committee; Technology and Sr. Vice President, Performance Coatings Chief Technology Officer and Vice President,
Hugh Grant Environment Committee Research & Development, Coatings
Chairman, President and Chief Executive Pierre-Marie De Leener
Officer, Monsanto Company Robert Ripp Sr. Vice President, Architectural Coatings – EMEA, David B. Navikas
Nominating and Governance Committee; Chairman, Lightpath Technologies, and and President, PPG Europe Vice President and Controller
Technology and Environment Committee former Chairman and CEO, AMP Inc.
Audit Committee; Officers-Directors Richard C. Elias Charles W. Wise
Victoria F. Haynes Compensation Committee Sr. Vice President, Optical and Specialty Materials Vice President, Human Resources
President and Chief Executive Officer,
RTI International Thomas J. Usher Victoria M. Holt
Nominating and Governance Committee; Non-executive Chairman of the Board, Sr. Vice President, Glass and Fiber Glass
Technology and Environment Committee Marathon Oil Corporation
Officers-Directors Compensation Committee;
Michele J. Hooper Technology and Environment Committee
President and Chief Executive Officer, This sheet is printed on
The Directors’ Council David R. Whitwam Teslin® SP1000 Blue
Audit Committee; Nominating and Retired Chairman and CEO, Whirlpool Corporation
Governance Committee Nominating and Governance Committee;
Officers-Directors Compensation Committee
2009 Annual Report | 1
4. Letter from the Chairman
Clearly, the state of the global economy in 2009 created uncertainty and
posed significant challenges for many companies. PPG was not immune to the
global recession, which was both steep and broad. What’s more, many of our
end-use markets, such as automotive and construction, were significantly and
adversely affected by the deterioration of the economy and the global financial
crisis that began at the end of 2008 and continued through the year in 2009.
At PPG, we responded to this heavy turbulence quickly and decisively. And,
as our 2009 financial results confirm, we responded correctly.
First, we shifted our priorities to respond to the difficult economic conditions.
We placed greater emphasis on operating discipline. We worked to leverage
our global technological and manufacturing capabilities to the most efficient
use of the entire company. And, we keyed in on costs, margins, working
capital and cash flow.
Second, we embarked on several aggressive restructuring initiatives
to reshape our business to be more aligned with fundamental structural
changes occurring in the marketplace. PPG announced two programs – one
in September 2008 and one in March 2009 – that combined are expected
to result in approximately $250 million in annual cost savings. These initiatives
included the closure of several PPG manufacturing and distribution facilities and
the elimination of approximately 3,800 positions. We also accelerated some of
the integration activities identified upon the acquisition of SigmaKalon in 2008.
Third, PPG implemented other interim cost-saving measures to cope
with the downturn. We traveled less, made temporary reductions in certain
compensation and benefits costs and focused only on essential spending in
our businesses and staff functions. In addition, we reined in capital spending
for 2009 across all of our businesses, while ensuring that projects critical to
sustaining production capability were funded.
In all, by implementing these steps, PPG is now a leaner, more efficient
company that is not only better able to weather difficult circumstances, but We entered 2009 with just over $1 billion of cash, and we delivered near-
is also positioned to succeed in more favorable conditions. As such, we are record cash flow from operations in 2009 of over $1.3 billion. As a result,
poised to benefit from recoveries – regardless of how large or small – in we ended the year with a strong cash position of just over $1 billion to support
world economies. future earnings growth opportunities, which could include bolt-on acquisitions
In 2009, PPG posted sales of $12.2 billion and net income of $336 or share repurchases.
million. And while both sales and earnings were down versus the prior year, PPG paid down about $650 million of debt in 2009. More importantly, we
I believe these results are admirable given the circumstances. In addition, again raised our annual dividend payout for the 38th consecutive year, even in
these results exceeded our early year expectations. More importantly, this these challenging times. This increase not only demonstrates the confidence
performance validates the soundness of our strategic direction and the quality we have in PPG’s business portfolio to consistently generate cash, but it also
of our execution. underscores the value we place on returning cash to our shareholders.
PPG benefitted from actions it has taken over the past several years to Going into 2010, we know that this year will not provide us with a quick
broaden the geographic reach of our business and grow the coatings and return to more favorable economic conditions. But at PPG, we will remain
optical and specialty materials components of our portfolio. These businesses vigilant in maintaining the operating discipline we displayed in 2009 in order
saw continuously improving positive momentum throughout the year, and to capitalize on gradual demand improvements as they occur this year. That
by the end of 2009 were delivering higher year-over-year earnings. This said, we will also stay the course and continue to implement key strategies
performance was aided by our expanding footprint in the Asia / Pacific to transform our company into a more focused enterprise with strong
region, which posted record earnings for the year and now represents geographic and end-use market diversity. Supported by PPG’s longstanding
about 18 percent of our coatings portfolio. Overall, our efforts to transform fiscal prudence and proven track record of cash generation, I believe that PPG
our company have served us well in this downturn. remains well-positioned for success in 2010 and the years to follow.
Charles E. Bunch
Chairman and Chief Executive Officer
2009 Annual Report | 2
5. UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009 Commission File Number 1-1687
PPG INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-0730780
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One PPG Place, Pittsburgh, Pennsylvania 15272
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: 412-434-3131
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock – Par Value $1.66 2⁄ 3 New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities
Act. YES È NO ‘
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. YES ‘ NO È
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. YES È NO ‘
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate web site, if any,
every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post
such files). YES È NO ‘
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. È
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer È Accelerated filer ‘
Non-accelerated filer ‘ Smaller reporting company ‘
(Do not check if a smaller
reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the
Act). YES ‘ NO È
The aggregate market value of common stock held by non-affiliates as of June 30, 2009, was $7,224 million.
As of January 31, 2010, 165,857,383 shares of the Registrant’s common stock, with a par value of $1.66 2⁄ 3 per share, were
outstanding. As of that date, the aggregate market value of common stock held by non-affiliates was $9,716 million.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated By
Document Reference In Part No.
Portions of PPG Industries, Inc. Proxy Statement for its 2010
Annual Meeting of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III
2009 PPG ANNUAL REPORT AND FORM 10-K 3
7. Part I Europe, the Middle East and Africa was reported as a
separate reportable business segment known as
Item 1. Business Architectural Coatings – EMEA beginning in 2008. This
PPG Industries, Inc., incorporated in Pennsylvania in business represented about 70% of SigmaKalon’s
1883, is comprised of six reportable business segments: preacquisition sales.
Performance Coatings, Industrial Coatings, Architectural
The Performance Coatings reportable segment is
Coatings – EMEA (Europe, Middle East and Africa),
comprised of the refinish, aerospace, protective and
Optical and Specialty Materials, Commodity Chemicals
marine and architectural – Americas and Asia Pacific
and Glass. Each of the business segments in which PPG is
coatings businesses.
engaged is highly competitive. However, the
diversification of product lines and worldwide markets The refinish coatings business supplies coatings
served tend to minimize the impact on PPG’s total sales products for automotive and commercial transport/fleet
and earnings from changes in demand for a particular repair and refurbishing, light industrial coatings for a
product line or in a particular geographic area. Refer to wide array of markets and specialty coatings for signs.
Note 25, “Reportable Business Segment Information” These products are sold primarily through distributors.
under Item 8 of this Form 10-K for financial information
relating to our reportable business segments. The aerospace coatings business supplies sealants,
coatings, technical cleaners and transparencies for
Performance Coatings, Industrial Coatings and commercial, military, regional jet and general aviation
Architectural Coatings - EMEA aircraft and transparent armor for military land vehicles.
PPG is a major global supplier of protective and PPG supplies products to aircraft manufacturers,
decorative coatings. The Performance Coatings, Industrial maintenance and aftermarket customers around the world
Coatings and Architectural Coatings – EMEA reportable both on a direct basis and through a company-owned
segments supply protective and decorative finishes for distribution network.
customers in a wide array of end use markets, including
The protective and marine coatings business supplies
industrial equipment, appliances and packaging; factory-
coatings and finishes for the protection of metals and
finished aluminum extrusions and steel and aluminum
structures to metal fabricators, heavy duty maintenance
coils; marine and aircraft equipment; automotive original
contractors and manufacturers of ships, bridges, rail cars
equipment; and other industrial and consumer products.
and shipping containers. These products are sold through
In addition to supplying finishes to the automotive
the company-owned architectural coatings stores,
original equipment market, PPG supplies refinishes to the
independent distributors and directly to customers.
automotive aftermarket. PPG also supplies coatings to
painting and maintenance contractors and directly to Product performance, technology, quality,
consumers for decoration and maintenance. The coatings distribution and technical and customer service are major
industry is highly competitive and consists of a few large competitive factors in these three coatings businesses.
firms with global presence and many smaller firms serving
local or regional markets. PPG competes in its primary The architectural coatings-Americas and Asia Pacific
markets with the world’s largest coatings companies, most business primarily produces coatings used by painting
of which have global operations, and many smaller and maintenance contractors and by consumers for
regional coatings companies. Product development, decoration and maintenance. These coatings are sold
innovation, quality and technical and customer service under a number of brands. Architectural coatings –
have been stressed by PPG and have been significant Americas and Asia Pacific products are sold through a
factors in developing an important supplier position by combination of company-owned stores, home centers,
PPG’s coatings businesses comprising the Performance paint dealers, independent distributors and directly to
Coatings, Industrial Coatings and Architectural Coatings customers. Price, product performance, quality,
– EMEA reportable segments. distribution and brand recognition are key competitive
factors for the architectural coatings business. The
On January 2, 2008, PPG completed the acquisition architectural coatings-Americas and Asia Pacific business
of SigmaKalon Group (“SigmaKalon”), a worldwide operates about 400 company-owned stores in North
coatings producer based in Uithoorn, Netherlands. The America and about 50 company-owned stores in
results of operations of SigmaKalon are included in PPG’s Australia.
consolidated financial statements from the acquisition
date onward. The businesses acquired from SigmaKalon The major global competitors of the Performance
produce architectural, protective and marine and Coatings reportable segment are Akzo Nobel NV, BASF
industrial coatings. The protective and marine and Corporation, the DuPont Company, the Sherwin-Williams
industrial coatings businesses of SigmaKalon are managed Company and Valspar Corporation. The average number
as part of PPG’s previously existing coatings businesses. of persons employed by the Performance Coatings
The SigmaKalon architectural coatings business in reportable segment during 2009 was 12,700.
2009 PPG ANNUAL REPORT AND FORM 10-K 5
8. The Industrial Coatings reportable segment is waterproof labels, e-passports, drivers’ licenses and
comprised of the automotive, industrial and packaging identification cards. Transitions® lenses are processed and
coatings businesses. Industrial, automotive and packaging distributed by PPG’s 51%-owned joint venture with
coatings are formulated specifically for the customers’ Essilor International. In the Optical and Specialty
needs and application methods. Materials businesses, product quality and performance,
branding, distribution and technical service are the most
The industrial and automotive coatings businesses
critical competitive factors. The average number of
sell directly to a variety of manufacturing companies. PPG
persons employed by the Optical and Specialty Materials
also supplies adhesives and sealants for the automotive
reportable business segment during 2009 was 3,000.
industry and metal pretreatments and related chemicals
for industrial and automotive applications. PPG has Historically, the Optical and Specialty Materials
established alliances with Kansai Paint, Helios Group and reportable segment included the fine chemicals business.
Asian Paints Ltd. to serve certain automotive original PPG sold the fine chemicals business in the fourth quarter
equipment manufacturers in various regions of the world. of 2007. As such, the results of operations and cash flows
PPG owns a 60% interest in PPG Kansai Finishes to serve of this business have been classified as discontinued
Japanese-based automotive customers in North America operations in the consolidated financial statements under
and Europe. PPG owns a 60% interest in PPG Helios Ltd. Item 8 of this Form 10-K. Refer to Note 1, “Summary of
to serve Russian-based automotive customers in Russia Significant Accounting Policies” under Item 8 for further
and the Ukraine. PPG owns a 50% interest in Asian PPG information.
Paints to serve global and domestic-based automotive
customers in India. Commodity Chemicals
PPG is a producer and supplier of basic chemicals.
The packaging coatings business supplies coatings The Commodity Chemicals reportable segment produces
and inks to the manufacturers of aerosol, food and chlor-alkali and derivative products including chlorine,
beverage containers. caustic soda, vinyl chloride monomer, chlorinated
Product performance, technology, quality and solvents, calcium hypochlorite, ethylene dichloride,
technical and customer service are major competitive hydrochloric acid and phosgene derivatives. Most of these
factors in the industrial coatings businesses. The major products are sold directly to manufacturing companies in
global competitors of the Industrial Coatings reportable the chemical processing, rubber and plastics, paper,
segment are Akzo Nobel NV, BASF Corporation, the minerals, metals and water treatment industries. PPG
DuPont Company, Valspar Corporation and Nippon competes with six other major producers of chlor-alkali
Paint. The average number of persons employed by the products, including The Dow Chemical Company,
Industrial Coatings reportable segment during 2009 was Formosa Plastics Corporation, U.S.A., Georgia Gulf
8,900. Corporation, Olin Corporation, Occidental Chemical
Corporation and Shintech. Price, product availability,
The Architectural Coatings – EMEA business supplies
product quality and customer service are the key
a variety of coatings under a number of brands and
competitive factors. The average number of persons
purchased sundries to painting contractors and
employed by the Commodity Chemicals reportable
consumers in Europe, the Middle East and Africa.
business segment during 2009 was 2,000.
Architectural Coatings – EMEA products are sold through
a combination of about 560 company-owned stores, home Glass
centers, paint dealers, independent distributors and PPG is a producer of flat glass in North America and a
directly to customers. Price, product performance, global producer of continuous-strand fiber glass. The
quality, distribution and brand recognition are key Glass reportable business segment is comprised of the
competitive factors for this business. The major performance glazings and fiber glass businesses. PPG’s
competitors of the Architectural Coatings – EMEA major markets are commercial and residential
reportable segment are Akzo Nobel NV and Materis construction and the wind energy, energy infrastructure,
Paints. The average number of persons employed by the transportation and electronics industries. Most glass
Architectural Coatings – EMEA reportable segment products are sold directly to manufacturing companies.
during 2009 was 8,500. PPG manufactures flat glass by the float process and fiber
Optical and Specialty Materials glass by the continuous-strand process.
PPG’s Optical and Specialty Materials reportable The bases for competition in the Glass businesses are
segment is comprised of the optical products and silicas price, quality, technology and customer service. The
businesses. The primary Optical and Specialty Materials Company competes with four major producers of flat
products are Transitions® lenses, sunlenses and optical glass including Asahi Glass Company, Cardinal Glass
lens materials; amorphous precipitated silicas for tire, Industries, Guardian Industries and NSG Pilkington, and
battery separator and other end-use markets; and Teslin® six major producers of fiber glass throughout the world,
synthetic printing sheet used in such applications as including Owens Corning-Vetrotex, Jushi Group, Johns
6 2009 PPG ANNUAL REPORT AND FORM 10-K
9. Manville Corporation, CPIC Fiberglass, AGY and Taishan The Company has aggressive sourcing initiatives
Fiberglass. The average number of persons employed by underway to support its continuous efforts to find the
the Glass reportable business segment during 2009 was lowest total material costs. These initiatives include
3,100. reformulation of certain of our products using both
petroleum derived and bio-based materials as part of a
Historically, the Glass reportable segment included
product renewal strategy. Another initiative is to qualify
the automotive glass and services business. In September
multiple sources of supply, including suppliers from Asia
2008, PPG completed a transaction by which it divested a
and other lower cost regions of the world.
majority interest in the automotive glass and services
business. The results of this business through September We are subject to existing and evolving standards
30, 2008 are reported as part of the Glass reportable relating to the registration of chemicals that impact or
segment in the consolidated financial statements under could potentially impact the availability and viability of
Item 8 of this Form 10-K. See Note 3, “Divestiture of some of the raw materials we use in our production
Automotive Glass and Services Business” under Item 8 for processes. Our ongoing global product stewardship efforts
additional information. are directed at maintaining our compliance with these
standards.
Raw Materials and Energy
In December 2006, the European Union (“EU”)
The effective management of raw materials and
member states adopted a new comprehensive chemical
energy is important to PPG’s continued success. Our
management legislation known as “REACH”
primary energy cost is natural gas used in our Commodity
(Registration, Evaluation, and Authorization of
Chemicals and Glass businesses. In 2009, our natural gas
Chemicals). REACH applies to all chemical substances
costs continued to be volatile and on average decreased
manufactured or imported into the EU in quantities of
almost 33 percent in the U.S. compared to 2008 levels.
one metric ton or more annually and will require the
The decrease can be linked to year-over-year weak
registration of approximately 30,000 chemical substances
consumption, favorable weather and inflated inventories.
with the European Chemicals Agency. PPG met the
During 2009, the benefit of lower coatings raw requirements for pre-registration of such chemicals that
material costs totaled $150 million globally, recovering a ended on December 1, 2008. Additionally, REACH
portion of the raw material cost increases that occurred requires the registration of these substances, entailing the
over the prior three years of $150 million in 2008, $40 filing of extensive data on their potential risks to human
million in 2007 and $75 million in 2006. Many of our health and the environment. Registration activities will
coatings raw materials are petroleum based and changes occur in three phases over an 11-year period, based on
in pricing for these raw materials traditionally lag oil price tonnage and level of concern, with the first registration
fluctuations by several months. Our costs are also deadline set for December 1, 2010. Subsequent phases
dependent on global supply and demand for these end in 2013 and 2018. In the case of chemicals with a
materials, which can vary by geographic region. Sluggish high level of concern, the regulation calls for progressive
global demand resulting from the economic recession substitution unless no alternative can be found; in these
combined with overcapacity and high inventory levels cases, authorization of the chemicals will be required.
caused our raw material costs to decline in 2009, PPG has established a dedicated organization to
particularly in the first half of the year. During the fourth manage REACH implementation. We have continued
quarter of 2009, we experienced some cost increases as review of our product portfolio, worked closely with our
demand improved gradually and supplier inventories suppliers to assure their commitment to register
contracted. substances in our key raw materials and begun
The Company’s most significant raw materials are preparation for registration of substances in PPG
titanium dioxide and epoxy and other resins in the manufactured or imported raw materials. We will
Coatings businesses; lenses, sand and soda ash in the continue to work with our suppliers to understand the
Optical and Specialty Materials businesses; brine and future availability and viability of the raw materials we
ethylene in the Commodity Chemicals business; and sand use in our production processes.
and soda ash in the Glass businesses. Energy is a Compliance with the REACH legislation will result in
significant production cost in the Commodity Chemicals increased costs due to registration costs, product testing
and Glass businesses. Most of the raw materials and and reformulation, risk characterization and participation
energy used in production are purchased from outside in Substance Information Exchange Forums (“SIEFs”)
sources, and the Company has made, and plans to required to coordinate registration dossier preparation.
continue to make, supply arrangements to meet the PPG has identified a number of substances that may
planned operating requirements for the future. Supply of require 2010 registration and is engaged with other key
critical raw materials and energy is managed by companies through SIEFs to develop the required
establishing contracts, multiple sources, and identifying registration dossiers. The costs for 2013 and 2018
alternative materials or technology, whenever possible. registrations and potential additional future testing in
2009 PPG ANNUAL REPORT AND FORM 10-K 7
10. support of 2010 registrations are currently unclear; Non-U.S. Operations
however, our preliminary estimate, in total, is in the range PPG has a significant investment in non-U.S.
of $30 million to $45 million. We anticipate that some operations, and as a result we are subject to certain
current raw materials and products will be subject to the inherent risks, including economic and political
REACH authorization process and believe that we will be conditions in international markets and fluctuations in
able to demonstrate adequate risk management for the use foreign currency exchange rates. While approximately
and application of the majority of such substances. 75% of sales and operating income is generated by
The U.S. Environmental Protection Agency products sold in the United States, Canada and Western
(“USEPA”) has formally withdrawn their previously- Europe, our remaining sales and operating income are
announced program called “ChAMP” (Chemical generated in developing regions, such as Asia, Eastern
Assessment and Management Program). This program Europe and Latin America.
had been intended to address hazard and risk
Employee Relations
characterization of chemicals imported or manufactured
The average number of persons employed worldwide
in the U.S. in quantities above 25,000 pounds annually.
by PPG during 2009 was 39,900. The Company has
Further, the USEPA announced that ChAMP will be
numerous collective bargaining agreements throughout
superseded by a comprehensive approach to enhancing
the world. While we have experienced occasional work
the Agency’s current chemicals management program.
stoppages as a result of the collective bargaining process
At this time, it is not possible to quantify the financial and may experience some work stoppages in the future,
impact of these regulatory initiatives on PPG’s businesses. we believe we will be able to negotiate all labor
agreements on satisfactory terms. To date, these work
Research and Development stoppages have not had a significant impact on PPG’s
Technology innovation has been a hallmark of PPG’s operating results. Overall, the Company believes it has
success throughout its history. Research and development good relationships with its employees.
costs, including depreciation of research facilities, were
$403 million, $468 million and $363 million during 2009, Environmental Matters
2008 and 2007, respectively. These costs totaled PPG is subject to existing and evolving standards
approximately 3% of sales in each of these years, relating to protection of the environment. Capital
representing a level of expenditure that is expected to expenditures for environmental control projects were $27
continue in 2010. PPG owns and operates several facilities million, $15 million and $16 million in 2009, 2008 and
to conduct research and development relating to new and 2007, respectively. It is expected that expenditures for
improved products and processes. Additional process and such projects in 2010 will be in the range of $20-$25
product research and development work is also million. Although future capital expenditures are difficult
undertaken at many of the Company’s manufacturing to estimate accurately because of constantly changing
plants. As part of our ongoing efforts to manage our costs regulatory standards and policies, it can be anticipated
effectively, we operate a global competitive sourcing that environmental control standards will become
laboratory in China, have outsourcing arrangements with increasingly stringent and the cost of compliance will
several laboratories and have been actively pursuing increase.
government funding of a small, but growing portion of PPG completed the conversion of its Lake Charles,
the Company’s research efforts. Because of the Company’s La., mercury cell chlor-alkali unit to membrane cell
broad array of products and customers, PPG is not technology in 2007. PPG currently operates one
materially dependent upon any single technology remaining mercury cell production unit located in
platform. Natrium, W.Va. This unit constitutes approximately 4%
Patents of PPG’s total chlor-alkali production capacity.
PPG considers patent protection to be important. The PPG is negotiating with various government agencies
Company’s reportable business segments are not concerning 104 current and former manufacturing sites
materially dependent upon any single patent or group of and offsite waste disposal locations, including 22 sites on
related patents. PPG earned $45 million in 2009, $52 the National Priority List. While PPG is not generally a
million in 2008 and $48 million in 2007 from royalties major contributor of wastes to these offsite waste disposal
and the sale of technical know-how. locations, each potentially responsible party may face
governmental agency assertions of joint and several
Backlog liability. Generally, however, a final allocation of costs is
In general, PPG does not manufacture its products made based on relative contributions of wastes to the site.
against a backlog of orders. Production and inventory There is a wide range of cost estimates for cleanup of
levels are geared primarily to projections of future these sites, due largely to uncertainties as to the nature
demand and the level of incoming orders. and extent of their condition and the methods that may
have to be employed for their remediation. The Company
8 2009 PPG ANNUAL REPORT AND FORM 10-K
11. has established reserves for onsite and offsite remediation Contingent Liabilities,” under Item 8 of this Form 10-K
of those sites where it is probable that a liability has been for additional information related to environmental
incurred and the amount can be reasonably estimated. As matters.
of December 31, 2009 and 2008, PPG had reserves for
Public and governmental concerns related to climate
environmental contingencies totaling $287 million and
change continue to grow, leading to efforts to limit the
$299 million, respectively, of which $59 million and $44
greenhouse gas (“GHG”) emissions believed to be
million, respectively, were classified as current liabilities.
responsible. These concerns were reflected in the 2005
Pretax charges against income for environmental
framework for GHG reduction under the Kyoto Protocol
remediation costs in 2009, 2008 and 2007 totaled $11
to the United Nations Framework Convention on Climate
million, $15 million and $12 million, respectively. Cash
Change (“UNFCCC”). The Kyoto Protocol was adopted
outlays related to such environmental remediation
by many countries where PPG operates, including the
aggregated $24 million, $24 million and $19 million in
European Union and Canada, though not in the U.S. The
2009, 2008 and 2007, respectively. As part of the
European Union implemented a cap and trade approach
allocation of the SigmaKalon purchase price to the assets
with a mandatory emissions trading scheme for GHGs. In
acquired and liabilities assumed, the reserve for
December 2007, delegates to the UNFCCC reached
environmental contingencies was increased by $37
agreement on development of a plan for the second phase
million in 2008. The impact of foreign currency
of Kyoto, which culminated in the Copenhagen Accord in
translation increased the liability by $1 million in 2009
December 2009. The Copenhagen Accord requires Annex
and decreased the liability by $5 million in 2008.
I Parties (economically developed countries) to further
Environmental remediation of a former chromium
strengthen the emission reductions initiated by the Kyoto
manufacturing plant site and associated sites in Jersey
Protocol by submitting economy-wide emission targets
City, N.J., represents the major part of our existing
for 2020. PPG has operations in many of these countries.
reserves. Included in the amounts mentioned above were
However, there are indications that some influential
$188 million and $193 million in reserves at
Annex 1 and Non-Annex 1 countries may decide to
December 31, 2009 and 2008, respectively, associated
reduce their emission targets or forego signing the Accord
with all New Jersey chromium sites.
thereby putting the future of the entire Climate Change
The Company’s experience to date regarding Convention into question.
environmental matters leads PPG to believe that it will
A substantial portion of PPG’s GHG emissions are
have continuing expenditures for compliance with
generated by locations in the U.S., where considerable
provisions regulating the protection of the environment
legislative and regulatory activity has taken place during
and for present and future remediation efforts at waste
2009. As a result of a U.S. Supreme Court ruling in April
and plant sites. Management anticipates that such
2007 declaring that GHGs are air pollutants covered by
expenditures will occur over an extended period of time.
the Clean Air Act, the USEPA proposed and later finalized
Our continuing efforts to analyze and assess the in December 2009 an Endangerment Finding that GHG
environmental issues associated with a former chromium emissions “threaten public health and welfare of current
manufacturing plant site located in Jersey City, N.J., and and future generations.” Based on the Endangerment
the Calcasieu River Estuary located near our Lake Finding, the USEPA proposed new, “tailored” thresholds
Charles, La. chlor-alkali plant resulted in a pre-tax charge for GHG emissions that define when Clean Air Act New
of $173 million in the third quarter of 2006 for the Source Review and title V operating permit programs
estimated costs of remediating these sites. These charges would be required for new or existing industrial facilities.
for estimated environmental remediation costs in 2006 As proposed, the rules would impose new permit
were significantly higher than PPG’s historical range. requirements on PPG facilities emitting more than 25,000
Excluding 2006, pre-tax charges against income have tons of GHGs per year. The U.S. federal government has
ranged between $10 million and $49 million per year for committed to a 17% economy-wide emission reduction
the past 15 years. We anticipate that charges against target below 2005 levels by 2020. The potential impact of
income in 2010 for environmental remediation costs will these proposed regulations on PPG will not be known
be within this historical range. until they are finalized.
In management’s opinion, the Company operates in PPG is a member of the U.S.-based Climate Registry,
an environmentally sound manner, is well positioned, an organization that sets standards to calculate, verify and
relative to environmental matters, within the industries in publicly report greenhouse gas emissions into a single
which it operates, and the outcome of these registry. The Registry assists in verification of current and
environmental contingencies will not have a material future PPG GHG reduction achievements in preparation
adverse effect on PPG’s financial position or liquidity; for potential imposition in the U.S. of GHG reduction
however, any such outcome may be material to the results goals. PPG is also a member of the USEPA’s Climate
of operations of any particular period in which costs, if Leaders program, which works with companies to develop
any, are recognized. See Note 16, “Commitments and comprehensive climate-change strategies. In addition,
2009 PPG ANNUAL REPORT AND FORM 10-K 9
12. PPG has been recognized by the Climate Disclosure The global recession and credit crisis could continue to
Project as a leader in emissions disclosure and reduction. have negative impact on our results of operations and cash
flows.
Energy prices and supply continue to be a concern for
major energy users. Since PPG’s GHG emissions arise During the fourth quarter of 2008, the demand for
principally from combustion of fossil fuels, PPG has for many of our products in Europe, Asia and Latin America
some time recognized the desirability of reducing energy declined significantly as the impact of the recession,
consumption and GHG generation. We committed under which had impacted demand throughout 2008 in the U.S.
the Business Roundtable’s Climate RESOLVE program to and U.K. economies, spread globally. Many global
reduce our GHG intensity (GHGs produced per million industrial end-markets remained depressed for most of
dollars of revenue) by 18% between 2002 and 2012. PPG 2009. The impact of the recession was felt by all of our
achieved this target in 2006, six years ahead of schedule. businesses but most noticeably by those businesses
Additionally, in 2007 PPG announced new corporate serving the automotive original equipment, construction,
targets, namely (i) a reduction in energy intensity by 25% housing and general industrial markets. Entering 2010,
from 2006 to 2016 and (ii) a 10% absolute reduction in the global economic outlook reflects expectations of
GHG emissions from 2006 to 2011. PPG has joined the gradual year-over-year improvement in many industrial
U.S. Department of Energy Save Energy Now LEADER sectors, but the breadth and pace of the recovery is
Program reinforcing the company’s voluntary efforts to uncertain. Anticipation is for growth to continue in most
significantly reduce its industrial energy intensity. Asian economies driven by these global demand
Recognizing the continuing importance of this matter, improvements. Modest recovery is expected to continue
PPG has a senior management group with a mandate to in the North American economy, with some offsets due to
guide the Company’s progress in this area. later economic cycle sectors such as commercial
construction, which is projected to continue to decline.
PPG’s public disclosure on energy security and The recovery rate of the European economy is expected to
climate change can be viewed in our Sustainability Report lag both Asia and North America. A source of concern is
http://corporateportal.ppg.com/ppg/csr or at the Carbon the anticipation that various government stimulus
Disclosure Project www.cdproject.net. programs will gradually be removed without a consensus
conviction that consumer spending in these countries will
Available Information
provide an offset to support the recovery. Continued
The Company’s website address is www.ppg.com. The weakness in the global economy would be expected to
Company posts, and shareholders may access without result in lower demand for many of our products and
charge, the Company’s recent filings and any amendments increase our exposure to credit risk from customers in the
thereto of its annual reports on Form 10-K, quarterly industries most impacted by the weak economy. How
reports on Form 10-Q and its proxy statements as soon as strongly the rebound of the global economy takes hold or
reasonably practicable after such reports are filed with the if the signs of recovery will last is not known.
Securities and Exchange Commission (“SEC”). The
Company also posts all financial press releases and Increases in prices and declines in the availability of raw
earnings releases to its website. All other reports filed or materials could negatively impact our financial results.
furnished to the SEC, including reports on Form 8-K, are Our operating results are significantly affected by the
available via direct link on PPG’s website to the SEC’s cost of raw materials and energy, including natural gas.
website, www.sec.gov. Reference to the Company’s and Changes in natural gas prices have a significant impact on
SEC’s websites herein does not incorporate by reference the operating performance of our Commodity Chemicals
any information contained on those websites and such and Glass businesses. Each one-dollar change in our unit
information should not be considered part of this cost of natural gas per million British Thermal Units
Form 10-K. (“mmbtu”) has a direct impact of approximately $60
Item 1A. Risk Factors million to $70 million on our annual operating costs. In
2009, our natural gas costs on average decreased almost
As a global manufacturer of coatings, glass and
33% in the U.S. compared to 2008 levels. Year-over-year
chemicals products, we operate in a business environment
coatings raw material costs declined by approximately
that includes risks. These risks are not unlike the risks we
$150 million in 2009 following a rise of approximately
have faced in the recent past. Each of the risks described
$150 million in 2008. This increase in costs, which was
in this section could adversely affect our operating results,
partially linked to increased oil prices, occurred in all
financial position and liquidity. While the factors listed
regions of the world, with the most significant impact in
here are considered to be the more significant factors, no
the U.S. Whether oil prices and our raw material costs
such list should be considered to be a complete statement
will increase in 2010 is not known.
of all potential risks and uncertainties. Unlisted factors
may present significant additional obstacles which may We also import raw materials, particularly for use at
adversely affect our business. our manufacturing facilities in the emerging regions of the
world. In most cases, those imports are priced in the
10 2009 PPG ANNUAL REPORT AND FORM 10-K
13. currency of the supplier and, therefore, our margins are at “Commitments and Contingent Liabilities,” under Item 8
risk of being lowered if those foreign currencies of this Form 10-K, the arrangement remains subject to
strengthen against the local currencies of our court proceedings and, if not approved, the outcome
manufacturing facilities. could be material to the results of operations of any
particular period.
Additionally, certain raw materials are critical to our
production processes. These include titanium dioxide and Our products are subject to existing and evolving
epoxy and other resins in the Coatings businesses; lenses, regulations.
photochromic dye, sand and soda ash in the Optical and Regulations concerning the composition and use of
Specialty Materials businesses; brine and ethylene in the chemical products continue to evolve. Developments
Commodity Chemicals business; and sand and soda ash in concerning these regulations could potentially impact
the Glass businesses. We have made, and plan to continue (i) the availability or viability of some of the raw materials
to make, supply arrangements to meet the planned we use in our product formulations and/or (ii) our ability
operating requirements for the future. However, an to supply certain products to some customers or markets.
inability to obtain these critical raw materials would
Our international operations expose us to additional risks
adversely impact our ability to produce products.
and uncertainties that could affect our financial results.
We experience substantial competition from certain low- Because we are a global company, our results are
cost regions. subject to certain inherent risks, including economic and
Growing competition from companies in certain political conditions in international markets and
regions of the world, including Asia, Eastern Europe and fluctuations in foreign currency exchange rates. While
Latin America, where energy and labor costs are lower approximately 75% of sales and operating income in 2009
than those in the U.S., could result in lower selling prices was generated by products sold in the United States,
or reduced demand for some of our glass and fiber glass Canada and Western Europe, our remaining sales and
products. operating income are generated in developing regions,
We are subject to existing and evolving standards relating such as Asia, Eastern Europe and Latin America.
to the protection of the environment. As a producer of chemicals, we manufacture and transport
We have accrued $287 million for estimated certain materials that are inherently hazardous due to
environmental remediation costs that are probable at their toxic nature.
December 31, 2009. Our assessment of the potential We have significant experience in handling these
impact of these environmental contingencies is subject to materials and take precautions to handle and transport
considerable uncertainty due to the complex, ongoing and them in a safe manner. However, these materials, if
evolving process of investigation and remediation, if mishandled or released into the environment, could cause
necessary, of such environmental contingencies, and the substantial property damage or personal injuries resulting
potential for technological and regulatory developments. in significant legal claims against us. In addition, evolving
As such, in addition to the amounts currently reserved, regulations concerning the security of chemical
we may be subject to loss contingencies related to production facilities and the transportation of hazardous
environmental matters estimated to be as much as $200 chemicals could result in increased future capital or
million to $300 million. Such unreserved losses are operating costs.
reasonably possible but are not currently considered to be
We sell products to global and regional automotive
probable of occurrence.
original equipment manufacturers and their suppliers.
We are involved in a number of lawsuits and claims, both The economic downturn caused declines in global
actual and potential, in which substantial monetary production of automobiles and light trucks, which
damages are sought. adversely impacted our sales volumes. While the
The results of any future litigation or settlement of automotive market experienced higher and more
such lawsuits and claims are inherently unpredictable, but consistent production and sales levels in the second half
such outcomes could be adverse and material in amount. of 2009, the overall market still remained at a very low
For over 30 years, we have been a defendant in lawsuits activity level.
involving claims alleging personal injury from exposure to The North American automotive industry continues
asbestos. to experience structural change, including the loss of U.S.
Most of our potential exposure relates to allegations market share by General Motors and Chrysler. During
by plaintiffs that PPG should be liable for injuries 2009, both companies emerged from bankruptcy with the
involving asbestos containing thermal insulation products assistance of equity infusions by the U.S. government.
manufactured by Pittsburgh Corning Corporation (“PC”). These developments have mitigated any potential credit
PPG is a 50% shareholder of PC. Although we have exposure we may face. However, we remain focused on
entered into a settlement arrangement with several parties the continual management of automotive customer credit
concerning these asbestos claims as discussed in Note 16, risk as further deterioration of market conditions could
2009 PPG ANNUAL REPORT AND FORM 10-K 11
14. cause additional liquidity problems, potentially resulting Including the principal manufacturing facilities noted
in the write-off of amounts due from these customers and above, the Company has manufacturing facilities in the
cost impacts of changing suppliers. following geographic areas:
Additionally, the same economic conditions that are United States: 35 manufacturing facilities in 21 states.
impacting our continuing businesses that serve the Other Americas: 10 manufacturing facilities in 6 countries.
automotive original equipment manufacturer (“OEM”) EMEA: 51 manufacturing facilities in 25 countries.
market are affecting the divested automotive glass and Asia: 25 manufacturing facilities in 9 countries.
services business, in which PPG maintains an
approximate 40 percent interest. The Company’s principal research and development
centers are located in Allison Park, Pa.; Harmarville, Pa.;
Business disruptions could have a negative impact on our and Monroeville, Pa.
results of operations and financial condition.
The Company’s headquarters and company-owned
Unexpected events, including supply disruptions, paint stores are located in facilities that are leased while
temporary plant and/or power outages, natural disasters the Company’s other facilities are generally owned. Our
and severe weather events, fires, war or terrorist activities, facilities are considered to be suitable and adequate for
could increase the cost of doing business or otherwise the purposes for which they are intended and overall have
harm the operations of PPG, our customers and our sufficient capacity to conduct business in the upcoming
suppliers. It is not possible for us to predict the year.
occurrence or consequence of any such events. However,
such events could reduce demand for our products or Item 3. Legal Proceedings
make it difficult or impossible for us to receive raw PPG is involved in a number of lawsuits and claims,
materials from suppliers or to deliver products to both actual and potential, including some that it has
customers. asserted against others, in which substantial monetary
Item 1B. Unresolved Staff Comments damages are sought. These lawsuits and claims, the most
None. significant of which are described below, relate to
contract, patent, environmental, product liability,
Item 2. Properties antitrust and other matters arising out of the conduct of
The Company’s corporate headquarters is located in PPG’s current and past business activities. To the extent
Pittsburgh, Pa. The Company’s manufacturing facilities, that these lawsuits and claims involve personal injury and
sales offices, research and development centers and property damage, PPG believes it has adequate insurance;
distribution centers are located throughout the world. The however, certain of PPG’s insurers are contesting coverage
Company operates 121 manufacturing facilities in 41 with respect to some of these claims, and other insurers,
countries. The Company’s principal manufacturing and as they had prior to the asbestos settlement described
distribution facilities are as follows: below, may contest coverage with respect to some of the
asbestos claims if the settlement is not implemented.
Performance Coatings: Clayton, Australia; Delaware, Ohio;
PPG’s lawsuits and claims against others include claims
Dover, Del.; Huntsville, Ala.; Kunshan,
China; Stowmarket, United Kingdom; against insurers and other third parties with respect to
Sylmar, Calif.; about 400 company- actual and contingent losses related to environmental,
owned stores in the United States and asbestos and other matters.
about 50 company-owned stores in
Australia The result of any future litigation of such lawsuits
Industrial Coatings: Cieszyn, Poland; Cleveland, Ohio; Oak
and claims is inherently unpredictable. However,
Creek, Wis.; Tianjin, China; management believes that, in the aggregate, the outcome
Quattordio, Italy; San Juan del Rio, of all lawsuits and claims involving PPG, including
Mexico and Busan, South Korea asbestos-related claims in the event the settlement
Architectural Coatings—EMEA: Ruitz, France; Budapest, Hungary; described below does not become effective, will not have a
Amsterdam, Netherlands; Wroclaw, material effect on PPG’s consolidated financial position or
Poland; Birstall, United Kingdom and liquidity; however, such outcome may be material to the
about 560 company-owned stores,
results of operations of any particular period in which
including 175 stores each in France
and the United Kingdom costs, if any, are recognized.
Optical and Specialty Materials: Barberton, Ohio; Bangkok, Thailand; For over 30 years, PPG has been a defendant in
Lake Charles, La.; and Manila, lawsuits involving claims alleging personal injury from
Philippines
exposure to asbestos. For a description of asbestos
Commodity Chemicals: Lake Charles, La. and Natrium, W. Va. litigation affecting the Company and the terms and status
Glass: Carlisle, Pa.; Hoogezand, Netherlands; of the proposed asbestos settlement arrangement, see
Shelby, N.C. and Wichita Falls, Texas Note 16, “Commitments and Contingent Liabilities”
under Item 8 of this Form 10-K.
12 2009 PPG ANNUAL REPORT AND FORM 10-K
15. Over the past several years, the Company and others Item 4. Submission of Matters to a Vote of
have been named as defendants in several cases in various Security Holders
jurisdictions claiming damages related to exposure to lead None.
and remediation of lead-based coatings applications. PPG
has been dismissed as a defendant from most of these Executive Officers of the Company
lawsuits and has never been found liable in any of these Set forth below is information related to the
cases. Company’s executive officers as of February 18, 2010.
A Notice of Intent (“NOI”) to file a Citizen Suit under Name Age Title
the federal Clean Water Act has been received by PPG Charles E. Bunch (a) 60 Chairman of the Board and Chief
from the West Virginia Rivers Coalition and Oceana. The Executive Officer since July 2005
NOI alleges that PPG exceeded permitted discharge limits James C. Diggs (b) 61 Senior Vice President and General
at its Natrium, West Virginia plant. The West Virginia Counsel since July 1997
Department of Environmental Protection filed suit in Robert J. Dellinger (c) 49 Senior Vice President, Finance and
State Court for the permit exceedances covered by the Chief Financial Officer since
NOI and informed PPG that it intended to seek a civil October 2009
penalty. Prior to the expiration of the 60-day notice J. Rich Alexander (d) 54 Senior Vice President, Performance
Coatings since May 2005
period, a lawsuit was filed in state court by the West
Virginia Department of Environmental Protection Pierre-Marie De Leener (e) 52 Senior Vice President, Architectural
Coatings, Europe, Middle East and
(“WVDEP”) for the same alleged violations described in
Africa since January 2008 and
the Citizen Suit NOI, blocking the Citizen Suit for the President, PPG Europe since July 2008
time being. PPG is in the process of negotiating with Richard C. Elias (f) 56 Senior Vice President, Optical and
WVDEP in an attempt to settle this matter. In PPG’s Specialty Materials since July 2008
experience, resolution of matters such as these is difficult Victoria M. Holt (g) 52 Senior Vice President, Glass and Fiber
to predict. Glass since May 2005
PPG has received a Consolidated Compliance Order Michael H. McGarry (h) 51 Senior Vice President, Commodity
Chemicals since July 2008
and Notice of Proposed Penalty (“CO/NOPP”) from the
Louisiana Department of Environmental Quality (“DEQ”) William A. Wulfsohn (i) 47 Senior Vice President, Industrial
Coatings since May 2005
alleging violation of various requirements of its Lake
Charles, La. facility’s air permit based largely upon permit (a) Mr. Bunch held the position of President and Chief Operating Officer
from July 2002 until July 2005.
deviations self-reported by PPG. The CO/NOPP did not (b) Mr. Diggs also held the position of Secretary from September 2004
contain a proposed civil penalty. PPG filed a request for through July 16, 2009.
hearing and has engaged DEQ in settlement discussions. (c) Mr. Dellinger held the position of Senior Vice President, Finance and
Chief Financial Officer Designate from September 2009 through
In PPG’s experience, resolution of such matters is difficult October 2009. Prior to joining PPG, he held the position of Executive
to predict. Vice President and Chief Financial Officer from October 2005 to
September 2008 at Delphi Corporation and Executive Vice President
and Chief Financial Officer from June 2002 through September 2005 at
Sprint Corporation.
(d) Mr. Alexander held the position of Vice President, Industrial Coatings
from July 2002 until April 2005.
(e) Mr. De Leener was appointed to Senior Vice President, Architectural
Coatings, Europe, Middle East and Africa upon PPG’s acquisition of
SigmaKalon Group on January 2, 2008. He previously served as Chief
Executive Officer of SigmaKalon Group from 1999 until January 2008.
(f) Mr. Elias held the position of Vice President, Optical Products from
April 2000 until June 2008.
(g) Ms. Holt held the position of Vice President, Fiber Glass from February
2003 until April 2005.
(h) Mr. McGarry held the positions of Vice President, Coatings, Europe and
Managing Director, PPG Europe from July 2006 through June 2008;
and the position of Vice President, Chlor-Alkali and Derivatives from
March 2004 through June 2006.
(i) Mr. Wulfsohn also held the position of Managing Director, PPG Europe
from May 2005 until June 2006; and the position of Vice President,
Coatings, Europe, and Managing Director, PPG Europe from February
2003 until April 2005.
2009 PPG ANNUAL REPORT AND FORM 10-K 13
