PPG INDUSTRIES INC

Previous wording

Net sales were approximately $3.7 billion for the three months ended March 31, 2025, a decrease of 4.3% compared to the prior year, due to the unfavorable impact of foreign currency translation, the divestiture of the global silicas business and the traffic solutions business in Argentina in 2024, and the divestiture of the remaining Russia business in the first quarter 2025, partially offset by higher sales volumes.

Current wording

Net sales were approximately $4.2 billion for the three months ended June 30, 2025, a decrease of 1% compared to the prior year, primarily due to the divestiture of the global silicas business and the architectural coatings business in Russia, partially offset by increases in both sales volumes and selling prices.

Previous wording

Income before income taxes was $502 million for the three months ended March 31, 2025, a decrease of $40 million compared to the prior year, primarily due the unfavorable impact of foreign currency translation and material, wage and other cost inflation, partially offset by higher selling prices.

Current wording

Income before income taxes was $598 million for the three months ended June 30, 2025, a decrease of $53 million compared to the prior year, primarily due to the unfavorable impact of raw material, wage and other cost inflation and the impact of divestitures, partially offset by increased manufacturing productivity and cost control measures.

Previous wording

Cost of sales, exclusive of depreciation and amortization, decreased $63 million primarily due to the impact of divestitures and the favorable impact of foreign currency translation, partially offset by increases in sales volume and raw material cost inflation.

Current wording

Cost of sales, exclusive of depreciation and amortization, decreased $18 million primarily due to the impact of divestitures and increased manufacturing productivity, partially offset by raw material and other cost inflation.

Previous wording

Other (income)/charges, net increased by $36 million primarily due to an insurance reimbursement received in the first quarter 2025 related to damages incurred at a southern U.S. factory from a winter storm in 2021, a gain recognized on the sale of the Company's remaining Russia business in the first quarter 2025, income recognized in connection with transition services agreements with the buyer of PPG's recently divested U.S. and Canada architectural coatings business and higher net foreign currency translation income.

Current wording

Other charges, net decreased by $29 million primarily due to income recognized in connection with transition services agreements with the buyer of PPG's recently divested U.S. and Canada architectural coatings business, the absence of a second quarter 2024 non-cash loss on the sale of the traffic solutions business in Argentina, an insurance reimbursement received in the first quarter 2025 related to damages incurred at a southern U.S. factory from a winter storm in 2021 and a gain recognized on the sale of the Company's remaining Russia business in the first quarter 2025, partially offset by higher net foreign currency translation expense.

Previous wording

Adjusted earnings per diluted share for the three months ended March 31, 2025 decreased year-over-year primarily due the unfavorable impact of foreign currency translation and material, wage and other cost inflation, partially offset by higher selling prices.

Current wording

Adjusted earnings per diluted share for the six months ended June 30, 2025 decreased year-over-year primarily due to the unfavorable impact of raw material, wage and other cost inflation, foreign currency translation, and divestitures, partially offset by increased manufacturing productivity and cost control measures.

Previous wording

(b)Business restructuring-related costs, net include business restructuring charges, offset by releases related to previously approved programs, which are included in Other (income)/charges, net on the condensed consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the condensed consolidated statement of income and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization and Selling, general and administrative on the condensed consolidated statement of income.

Current wording

(b)Business restructuring-related costs, net include business restructuring charges, offset by releases related to previously approved programs, which are included in Other charges, net on the condensed consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the condensed consolidated statement of income and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization and Selling, general and administrative on the condensed consolidated statement of income.

Previous wording

(c)Portfolio optimization includes a $7 million gain recognized on the sale of a business in the first quarter 2025. There was no tax expense associated with that gain. Portfolio optimization also includes advisory, legal, accounting, valuation, other professional or consulting fees, and certain internal costs directly incurred to effect acquisitions, as well as similar fees and other costs to effect divestitures and other portfolio optimization exit actions. These costs are included in Selling, general and administrative expense on the condensed consolidated statement of income.

Current wording

(c)Portfolio optimization includes gains and losses on the sale of non-core assets, including a gain recognized on the sale of a business in the first quarter 2025 and a loss recognized on the sale of the Company’s traffic solutions business in Argentina in the second quarter 2024, which are included in Other charges, net in the condensed consolidated statement of income. Portfolio optimization also includes advisory, legal, accounting, valuation, other professional or consulting fees, and certain internal costs directly incurred to effect acquisitions, as well as similar fees and other costs to effect divestitures and other portfolio optimization exit actions. These costs are included in Selling, general and administrative expense on the condensed consolidated statement of income. There was no tax expense associated with the gain recognized on the sale of a business in the first quarter 2025.

Previous wording

(d)In the first quarter 2025, the Company received reimbursement under its insurance policies for damages incurred at a southern U.S. factory from a winter storm in 2021.

Current wording

(e)In the first quarter 2025, the Company received reimbursement under its insurance policies for damages incurred at a southern U.S. factory from a winter storm in 2021.

Previous wording

Architectural coatings – EMEA net sales, excluding the impact of currency, acquisitions and divestitures ("organic sales") were flat compared to the prior year with higher selling prices offset by lower sales volumes. Organic sales in Central Europe and the Nordic region improved during the quarter but were offset by Western Europe.

Current wording

Architectural coatings – EMEA net sales, excluding the impact of currency, acquisitions and divestitures ("organic sales") decreased by a low single-digit percentage compared to the prior-year quarter with lower sales volumes partially offset by higher selling prices. Overall demand for architectural coatings in Europe was lackluster with declines primarily in Eastern Europe, partially offset by organic sales growth in the Nordic region and the United Kingdom.

Previous wording

Architectural coatings - Latin America and Asia Pacific organic sales decreased by a mid-single-digit percentage compared to the prior-year quarter. In Mexico, retail sales volumes were strong in the quarter while project-related spending was lower stemming from economic uncertainty.

Current wording

Architectural coatings - Latin America and Asia Pacific decreased by a low single-digit percentage year over year with lower sales volumes, partially offset by higher selling prices. In Mexico, retail sales volumes were solid during the quarter, and while project-related spending improved sequentially, it was lower than the prior year stemming from economic uncertainty.

Previous wording

In the second quarter, consumer sentiment in Europe is expected to continue to stabilize. Project spending in Mexico is expected to resume in the coming quarters. Aggregate organic sales for the segment are expected to be in the range of flat to an increase of a low single-digit percentage compared to the second quarter 2024.

Current wording

In the second half of 2025, continued recovery of project-related spending in Mexico is expected and consumer sentiment in Europe is anticipated to be soft. Quarterly aggregate organic sales for the segment are expected to be in the range of lower by a low single digit percentage to flat compared to the third quarter 2024.

Previous wording

Aerospace coatings organic sales increased by a double-digit percentage compared to the first quarter 2024, led by higher selling prices and sales volumes. Demand remained strong, and customer order backlogs were stable, even with improved production and other productivity gains. Global international and domestic air travel have improved year over year but remain slightly below pre-pandemic levels in the aggregate. The Company remains focused on debottlenecking and further expanding manufacturing capabilities to drive further volume and earnings growth. In the second quarter 2025, demand and organic sales growth are expected to continue at a pace similar to prior quarters.

Current wording

Aerospace coatings organic sales increased by a high single-digit percentage compared to the prior-year quarter, led by higher selling prices and sales volumes. Demand remained strong, and customer order backlogs were stable, even with growth-related investments that improved our manufacturing output in the quarter. Global international and domestic air travel improved year over year and combined they are now in-line with pre-pandemic levels. The company remains focused on debottlenecking and further expanding manufacturing capabilities to drive further sales volume and earnings growth.

Previous wording

Protective and marine coatings organic sales increased a double-digit percentage compared to the prior-year first quarter driven by higher sales volumes in the U.S., Europe and the Asia Pacific region. In Europe and the Asia Pacific region, increased sales volumes were driven by share gains in marine, reflecting demand for PPG's sustainably advantaged products. The Company expects second quarter 2025 organic sales to grow driven by industry growth and share gains.

Current wording

Protective and marine coatings organic sales increased by a double-digit percentage compared to the prior-year quarter, including higher sales volumes in the Asia-Pacific region. Increased sales volumes were driven by share gains in both protective and marine, reflecting demand for PPG's sustainably-advantaged products.

Previous wording

Segment income was $274 million, an increase of 9% versus the prior year, primarily due to higher selling prices stemming from sales of advantaged products and digital technology subscriptions and higher sales volumes.

Current wording

Segment income was $356 million, an increase of 9% versus the prior year, primarily due to higher organic sales stemming from sales of technology-advantaged products and digital subscriptions.

Previous wording

In the second quarter, continued strength is anticipated in aerospace coatings and protective and marine coatings. Traffic solutions is expected to follow typical seasonal trends and is well positioned to continue to benefit in the coming years from increased U.S. infrastructure spending. Second quarter aggregate organic sales for the segment are anticipated to increase by a low single-digit percentage to a mid-single-digit percentage compared to the second quarter 2024.

Current wording

Continued strength is anticipated in aerospace coatings as well as protective and marine coatings. While automotive refinish coatings continues to gain share through demand for the Company's bundled coatings and services business model, lower organic sales are anticipated due to customer order patterns and weak industry collision claims. Traffic solutions is expected to follow typical seasonal trends and is well positioned to continue to benefit in the near term from increased U.S. infrastructure spending. Third quarter aggregate organic sales for the segment are anticipated to increase by a low single-digit percentage to a mid-single-digit percentage compared to the third quarter 2024.

Previous wording

In the industrial coatings business, organic sales were flat compared to the prior year due to higher sales volumes in all regions offset by lower indexed-based prices. Modest but broad improvement occurred across a variety of subsegments. Sales in several product categories were above prior-year levels, including solid growth in general finishes, transportation, coil and consumer electronics. The most pronounced weakness was in heavy-duty equipment and wood. Industrial coatings demand is expected to improve slightly in the second quarter 2025 compared to the prior year.

Current wording

In the industrial coatings business, organic sales decreased by a low single-digit percentage compared to the prior- year quarter due to lower index-based selling prices. Sales volumes were flat with increases in Latin America offset by decreases in the U.S. and the Asia Pacific region. Sales in several product categories were above prior-year levels, including solid growth in general finishes and coil. The most pronounced weakness was in extrusion and consumer electronics as those markets slowed due to tariff uncertainty.

Previous wording

● Higher selling prices (+1%)

Current wording

● Lower index-based selling prices (-1%)

Previous wording

Segment income was $215 million, a decrease of 14% versus the prior year, primarily due to lower organic sales, including lower index-based selling prices, partially offset by cost control actions.

Current wording

Segment income was $442 million, a decrease of 13% versus the prior year, primarily due to lower organic sales, including price decreases due to index-based contracts, and the unfavorable impact of the divestiture of the global silicas business, partially offset by cost-control actions and manufacturing efficiencies.

Previous wording

Global industrial production has exhibited signs of improvement, and continued benefit of that improvement is expected in the second quarter. Forecasted automotive OEM industry build rates were recently reduced for the second quarter, and performance of the automotive OEM coatings business is expected to follow a similar trend. Aggregate organic sales for the segment are anticipated to be in the range of a low-to-mid single-digit percentage decrease compared to the second quarter 2024.

Current wording

Global industrial production has flattened, and the macro environment in the third quarter is expected to be similar to the second quarter. The Company's share gains in packaging, industrial and automotive OEM are yielding benefits, and the automotive OEM coatings business is expected to outperform the market beginning in the third quarter. As a result, aggregate organic sales for the segment are anticipated to be in the range of flat to positive a low single-digit percentage compared to the third quarter 2024.

Previous wording

PPG is impacted by the economic and political conditions in the markets we serve, which includes effects related to the imposition and magnitude of tariffs. The current global macroeconomic environment is highly dynamic, and we continue to monitor changes to tariffs and the corresponding impacts on our business. PPG did not experience a significant decrease in customer demand, significant increase in raw material costs, or other significant adverse impacts related to tariffs during the first quarter 2025. The Company continues to monitor overall economic demand and customer order patterns and is prepared to take actions intended to mitigate adverse impacts, as necessary, through supply chain contingency plans, pricing actions, and/or self-help cost actions.

Current wording

PPG is impacted by the economic and political conditions in the markets we serve, which includes effects related to the imposition and magnitude of tariffs. The current global macroeconomic environment is highly dynamic, and we continue to monitor changes to tariffs and the corresponding impacts on our business. PPG did not experience a significant decrease in customer demand, significant increase in raw material costs, or other significant adverse impacts related to tariffs during the first six months of 2025. The Company continues to monitor overall economic demand and customer order patterns and is prepared to take actions intended to mitigate adverse impacts, as necessary, through supply chain contingency plans, pricing actions, and/or cost reduction actions.

Previous wording

PPG had cash and short-term investments totaling $1.9 billion and $1.4 billion at March 31, 2025 and December 31, 2024, respectively.

Current wording

PPG had cash and short-term investments totaling $1.6 billion and $1.4 billion at June 30, 2025 and December 31, 2024, respectively.

Previous wording

Cash (used for)/from operating activities - continuing operations

Current wording

Cash from operating activities - continuing operations

Previous wording

Cash used for operating activities - continuing operations for the three months ended March 31, 2025 was $16 million and cash from operating activities - continuing operations for the three months ended March 31, 2024 was $7 million. The $23 million increase in cash used for operating activities - continuing operations was primarily due to unfavorable changes in working capital in the first quarter 2025 compared to the prior year.

Current wording

Cash from operating activities - continuing operations for the six months ended June 30, 2025 and 2024 was $371 million and $348 million, respectively. The $23 million increase was primarily due to favorable changes in working capital for the six months ended June 30, 2025 compared to the prior year.

Previous wording

Cash used for investing activities - continuing operations for the three months ended March 31, 2025 and 2024 was $168 million and $235 million, respectively. The $67 million decrease in cash used for investing activities was primarily due to lower capital expenditures compared to the prior year.

Current wording

Cash used for investing activities - continuing operations for the six months ended June 30, 2025 and 2024 was $288 million and $363 million, respectively. The $75 million decrease in cash used for investing activities was primarily due to lower capital expenditures compared to the prior year.

Previous wording

Cash from financing activities for the three months ended March 31, 2025 was $698 million, and cash used for financing activities for the three months ended March 31, 2024 was $35 million. The $733 million increase in cash from financing activities was primarily due the proceeds from the issuance of long-term debt, partially offset by purchases of treasury stock.

Current wording

Cash from financing activities for the six months ended June 30, 2025 was $37 million, and cash used for financing activities for the six months ended June 30, 2024 was $185 million. The $222 million increase in cash from financing activities was primarily due to the proceeds from the issuance of long-term debt, partially offset by higher purchases of treasury stock.

Previous wording

The Term Loan and the Credit Agreement require the Company to maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Term Loan and 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 March 31, 2025, Total Indebtedness to Total Capitalization as defined under the Credit Agreement was 50%.

Current wording

The Term Loan and the Credit Agreement require the Company to maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Term Loan and 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 June 30, 2025, Total Indebtedness to Total Capitalization as defined under the Credit Agreement was 48%.

Previous wording

Aggregate restructuring savings were approximately $15 million in the first quarter 2025. Total restructuring savings are expected to be $75 million in 2025. In addition, the Company continues to review its cost structure to identify additional cost savings opportunities. Refer to Note 6, “Business Restructuring” in Part I, Item 1 of this Form 10-Q for further details on the Company's business restructuring programs. We expect cash outlays related to these actions of approximately $100 million in 2025.

Current wording

Aggregate restructuring savings were approximately $20 million in the second quarter 2025. Total restructuring savings are expected to be approximately $75 million in 2025. In addition, the Company continues to review its cost structure to identify additional cost savings opportunities. Refer to Note 6, “Business Restructuring” in Part I, Item 1 of this Form 10-Q for further details on the Company's business restructuring programs. We expect cash outlays related to restructuring actions of approximately $125 million in 2025.

Previous wording

Comparing spot exchange rates at March 31, 2025 and at December 31, 2024, the U.S. dollar weakened against the currencies of many countries within Europe and Asia where PPG operates, as well as against the Mexican peso. As a result, consolidated net assets at March 31, 2025 increased by $280 million compared to December 31, 2024.

Current wording

Comparing spot exchange rates at June 30, 2025 and at December 31, 2024, the U.S. dollar weakened against the currencies of many countries within the regions PPG operates, most notably the Mexican peso and the euro. As a result, consolidated net assets at June 30, 2025 increased by $773 million compared to December 31, 2024.

Previous wording

Comparing average exchange rates during the first three months of 2025 to those of the first three months of 2024, the U.S. dollar strengthened against the currencies of many countries where PPG operates, including the Mexican Peso, partially offset by weakening against the euro. This had an unfavorable impact on Income before income taxes for the three months ended March 31, 2025 of $27 million from the translation of these foreign earnings into U.S. dollars.

Current wording

Comparing average exchange rates during the first six months of 2025 to those of the first six months of 2024, the U.S. dollar strengthened against the currencies of many countries where PPG operates, including the Mexican peso. This had an unfavorable impact on Income before income taxes for the six months ended June 30, 2025 of $30 million from the translation of these foreign earnings into U.S. dollars.

Previous wording

Many factors could cause actual results to differ materially from the Company’s forward-looking statements. Such factors include statements related to global economic conditions, geopolitical issues, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, energy, labor and logistics, the ability to achieve selling price increases, the ability to recover margins, customer inventory levels, PPG inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, the timing and expected benefits of our acquisitions, difficulties in integrating acquired businesses and achieving expected synergies therefrom, the amount of future share repurchases, economic and political conditions in the markets we serve, the imposition and magnitude of tariffs, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, cybersecurity events, global human health issues, the unpredictability of existing and possible future litigation, including asbestos litigation, and government investigations. However, it is not possible to predict or identify all such factors.

Current wording

Many factors could cause actual results to differ materially from the Company’s forward-looking statements. Such factors include statements related to earnings guidance, global economic conditions, geopolitical issues, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, energy, labor and logistics, the ability to achieve selling price increases, margins, share gains, customer inventory levels, PPG inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, the timing and expected benefits of our acquisitions, difficulties in integrating acquired businesses and achieving expected synergies therefrom, the amount of future share repurchases, economic and political conditions in the markets we serve, the imposition and magnitude of tariffs, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, cybersecurity events, global human health issues, the unpredictability of existing and possible future litigation, including asbestos litigation, and government investigations. However, it is not possible to predict or identify all such factors.