PPG INDUSTRIES INC

Previous wording

Net sales were approximately $3.9 billion for the three months ended March 31, 2026, an increase of 7% compared to the prior year primarily due to the favorable impact of foreign currency translation and higher selling prices.

Current wording

Net sales were approximately $4.5 billion for the three months ended June 30, 2026, an increase of 7% compared to the prior year primarily due to higher selling prices, higher sales volumes and the favorable impact of foreign currency translation.

Previous wording

Selling, general and administrative expense increased $47 million primarily due to overhead cost inflation and the unfavorable impact of foreign currency translation, partially offset by cost-control measures.

Current wording

Selling, general and administrative expense increased $59 million primarily due to overhead cost inflation and the unfavorable impact of foreign currency translation, partially offset by cost-control measures.

Previous wording

Depreciation expense increased $16 million primarily due to higher capital spending in 2025.

Current wording

Depreciation expense increased $22 million primarily due to higher capital spending in 2025.

Previous wording

Both Earnings per diluted share, continuing operations and Adjusted earnings per diluted share for the three months ended March 31, 2026 increased year over year due to higher selling prices, the favorable impact of foreign currency translation, cost-control actions and lower adjusted weighted average common shares outstanding due to share repurchases.

Current wording

Earnings per diluted share, continuing operations and Adjusted earnings per diluted share for the six months ended June 30, 2026 increased year over year due to higher organic sales, the favorable impact of foreign currency translation, cost-control actions and lower adjusted weighted average common shares outstanding due to share repurchases, partially offset by the impact of cost inflation.

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, net on the consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the consolidated statement of income, and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative and Other income, net on the 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 consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the consolidated statement of income, and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative and Other charges, net on the consolidated statement of income.

Previous wording

(c)Portfolio optimization includes a $6 million charge related to the step‑up of acquired inventory in the first quarter 2026. Portfolio optimization also 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 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. Portfolio optimization also includes charges related to the step-up of acquired inventory. These costs are included in Cost of sales, exclusive of depreciation and amortization on the condensed consolidated statement of income. Portfolio optimization also includes a $7 million gain recognized on the sale of a business in the first quarter 2025, which is included in Other charges, net on the condensed consolidated statement of income. There was no tax expense associated with that gain.

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, which is included in Other income, net on the condensed consolidated statement of income.

Current wording

(f)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, which is included in Other charges, net on the condensed consolidated statement of income.

Previous 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 with higher selling prices more than offset by lower sales volumes. Overall demand for architectural coatings in Europe was mixed by country.

Current wording

Architectural coatings – EMEA net sales, excluding the impact of currency, acquisitions and divestitures ("organic sales") increased by a low single-digit percentage compared to the prior year with higher selling prices partially offset by lower sales volumes. Overall demand for architectural coatings in Europe was mixed by country.

Previous wording

Segment income of $155 million was 31% higher than the prior year. The increase was driven by higher selling prices, favorable foreign currency translation and the positive impact of cost-control actions.

Current wording

Segment income of $185 million was 16% higher than the prior year. The increase was driven by higher selling prices, favorable foreign currency translation and the positive impact of cost-control actions, partially offset by the impact of inflation.

Previous wording

Architectural coatings - Latin America and Asia Pacific organic sales increased by a mid-single-digit percentage compared to the prior-year quarter driven by strength in Latin America. In Mexico, retail sales volumes were solid in the quarter, reflecting strong consumer demand, while project-related spending recovered somewhat with increased government and local investment. Economic uncertainty continues to temper foreign direct business investment.

Current wording

Architectural coatings - Latin America and Asia Pacific organic sales increased by a mid-single-digit percentage year over year driven by volume growth in Latin America and higher selling prices. In Mexico, retail sales volumes were solid, reflecting strong consumer demand, while project-related spending improved with increased government and local investment.

Previous wording

In the second quarter of 2026, the company expects further year-over-year strengthening in retail sales and a modest recovery of project-related spending in Mexico, while consumer sentiment in Europe is anticipated to remain mixed. Quarterly aggregate organic sales for the segment are expected to be in the range of flat to a positive low single-digit percentage compared to the second quarter 2025.

Current wording

In the third quarter of 2026, the company expects further year-over-year strengthening in retail sales and a modest recovery of project-related spending in Mexico. While consumer sentiment in Europe is anticipated to remain mixed, we expect higher prices and self-help actions to increase earnings. Quarterly aggregate organic sales for the segment are expected to be in the range of flat to growth of a low single-digit percentage compared to the third quarter 2025.

Previous wording

First quarter organic sales for the traffic solutions business increased by a high single-digit percentage compared to the prior-year, outpacing the industry. The first quarter was the eighth consecutive quarter with year-over-year sales volume increases. Seasonally, first and fourth quarter sales in the business are typically lower, at about half of the second and third quarter levels, due to the difficulty of applying traffic markings in colder temperatures.

Current wording

Second quarter organic sales for the traffic solutions business increased by a mid-single-digit percentage compared to the prior-year.

Previous wording

Automotive refinish coatings organic sales decreased by a double-digit percentage versus the prior year. As expected, results were impacted by lower organic sales, reflecting a difficult comparison to the prior year when customer order patterns were heavily weighted to the first half of 2025. Automotive refinish coatings organic sales are anticipated to improve for PPG in the second half of the year, and we are already seeing early signs of demand improvement in the U.S. refinish market. Automotive insurance claims have been down a low single digit percentage in February and March, which reflects a more normalized level for the industry.

Current wording

Automotive refinish coatings organic sales decreased by a double-digit percentage versus the prior year. As expected, results were impacted by lower organic sales, reflecting a difficult comparison to the prior year when customer order patterns were heavily weighted to the first half of 2025 and slower recovery in underlying industry demand.

Previous wording

Aerospace coatings organic sales increased by a double-digit percentage compared to the first quarter 2025, led by higher selling prices and sales volumes. Demand is robust, and customer order backlogs remained strong, even with improved manufacturing output stemming from growth-related debottlenecking investments. Global international and domestic air travel improved year over year, and combined are above pre-pandemic levels. As demand for our technology-advantaged products grows, the company is focused on further manufacturing debottlenecking and capacity expansion through greenfield investment to drive additional volume growth in this resilient business.

Current wording

Aerospace organic sales increased by a double-digit percentage compared to the prior year, led by higher selling prices and sales volumes. Demand is robust, and customer order backlogs remained strong even with improved manufacturing output stemming from growth-related debottlenecking investments.

Previous wording

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

Current wording

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

Previous wording

We anticipate continued strength 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 digital services business model, we expect lower organic sales year over year in the second quarter due to customer order patterns in 2025. Automotive refinish coatings organic sales are anticipated to improve for PPG in the second half of the year. Traffic solutions is expected to follow typical seasonal trends. Second quarter organic sales for the segment are anticipated to be within the range of flat to a positive low single-digit percentage compared to the second quarter 2025.

Current wording

We anticipate continued strength in aerospace. Automotive refinish coatings organic sales are anticipated to improve in the second half of the year due to customer order patterns in 2025. Protective and marine coatings growth is expected to normalize as we lap prior year share gains, and traffic solutions will follow typical seasonal trends. In the third quarter, the company expects organic sales growth for the segment in the range of a mid-single-digit percentage to a high single-digit percentage year over year.

Previous wording

Organic sales for automotive OEM coatings decreased by a low single-digit percentage compared to the first quarter 2025 driven by lower indexed-based selling prices. Sales volumes were flat, including share gains, which outpaced the decline in global automotive industry production by about 300 basis points. Margins in the first quarter were negatively impacted by regional mix as China automotive production dropped in comparison to a particularly high level in the first quarter of last year. Global auto industry production in the second quarter is expected to be flat compared to the prior-year quarter with year over year declines in Europe and North America offset by growth in Asia Pacific and Latin America.

Current wording

Organic sales for automotive OEM coatings increased by a low single-digit percentage compared to the prior year driven by higher sales volumes partially offset by lower indexed-based selling prices.

Previous wording

First quarter organic sales in packaging coatings increased by a double-digit percentage compared to the prior year, with higher sales volumes partially offset by lower index-based prices. Results reflect the positive momentum from share gains in the U.S. and Canada, Asia Pacific and Europe, aided by expanding European regulations. Globally, beverage and food packaging demand is solid, and PPG sales volume growth is expected to outpace the market.

Current wording

Organic sales in packaging coatings increased by a double-digit percentage compared to the prior year, driven by higher sales volumes. Results reflect the positive momentum from share gains in the U.S. and Canada, Asia Pacific and Europe, aided by expanding European regulations.

Previous wording

Our share gains in automotive OEM coatings and packaging coatings are yielding benefits, and we expect to outperform the respective markets again in the second quarter. As a result, aggregate organic sales for the segment are anticipated to be in the range of flat to a positive low single-digit percentage compared to the second quarter 2025 driven by flat selling prices and higher sales volumes.

Current wording

Our share gains in automotive OEM coatings, industrial coatings and packaging coatings are yielding benefits, and we expect to outperform the respective markets again in the third quarter. In the third quarter, the company expects organic sales for the segment in the range of flat to growth of a low single-digit percentage year over year.

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 three months of 2026. 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.

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 2026. 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

In the first quarter 2026, a military conflict commenced in the Middle East involving the United States, Israel and Iran. Although we do not have material operations in the Middle East, we continue to assess the impact of the conflict. In recent weeks, the global petrochemical, energy and transportation markets have experienced significant volatility and supply constraints, driven by factors outside the control of individual suppliers or manufacturers. This is resulting in higher costs for raw materials, energy, logistics and packaging across the coatings value chain. Considering our capabilities and assuming a macro environment with petrochemical feedstock prices at the spot price during April and May, the impact to PPG is expected to be a mid-single-digit percentage increase in the cost of goods sold for the remainder of the year. To ensure continuity of supply and service for customers worldwide, PPG has begun implementing a price increase of up to 20% across all product lines and services on a customer-by-customer basis or as existing contracts allow. Certain product categories, technologies and regions may require higher price adjustments to fully offset current cost inflation, and additional price increases may occur in the future as market conditions continue to evolve.

Current wording

In the first quarter of 2026, a military conflict commenced in the Middle East involving the United States, Israel and Iran. Although we do not have material operations in the Middle East, we continue to assess the impact of the conflict. Costs have risen for raw materials, energy, logistics and packaging across the coatings value chain. The company has proactively made price adjustments globally and across all our businesses, resulting in a 2% selling price improvement in the second quarter. In the second quarter, this selling price improvement offset approximately 90% of the cost of goods sold inflation, and we currently anticipate that 100% of cost of goods sold inflation will be offset by higher selling prices and productivity initiatives by the fourth quarter.

Previous wording

Cash from operating activities for the three months ended March 31, 2026 was $33 million and cash used for operating activities for the three months ended March 31, 2025 was $18 million. The $51 million increase was primarily due to higher income from continuing operations and lower increases in working capital compared to the prior year.

Current wording

Cash from operating activities for the six months ended June 30, 2026 and 2025 was $592 million and $369 million, respectively. The $223 million increase was primarily due to improved working capital performance compared to the prior year.

Previous wording

Cash used for investing activities for the three months ended March 31, 2026 and 2025 was $279 million and $168 million, respectively. The $111 million increase in cash used for investing activities was primarily due to business acquisitions in the current year.

Current wording

Cash used for investing activities for the six months ended June 30, 2026 and 2025 was $458 million and $288 million, respectively. The $170 million increase in cash used for investing activities was primarily due to business acquisitions in the current year.

Previous wording

Cash used for financing activities for the three months ended March 31, 2026 was $334 million and cash from financing activities for the three months ended March 31, 2025 was $698 million. The $1,032 million increase in cash used for financing activities was primarily due to net debt activity, including the repayment of the $700 million 1.2% notes, which matured in the quarter.

Current wording

Cash used for financing activities for the six months ended June 30, 2026 and 2025 was $778 million and cash from financing activities for the six months ended June 30, 2025 was $37 million. The $815 million increase in cash used for financing activities was primarily due to net debt activity, including the repayment of the $700 million 1.2% notes, which matured in the first quarter 2026.

Previous wording

In October 2025, PPG amended its five-year credit agreement (the "Credit Agreement") dated as of August 30, 2019 to extend its maturity. The amended Credit Agreement provides for a $2.3 billion unsecured revolving credit facility, of which $2,148 million of the total commitment has a term through July 2029 and $152 million of the total commitment has a term through July 2028. The Company has the ability to increase the size of the Credit Agreement by up to an additional $750 million, subject to the receipt of lender commitments and other conditions precedent. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement. There were no amounts outstanding under the Credit Agreement as of March 31, 2026 and December 31, 2025.

Current wording

In October 2025, PPG amended its five-year credit agreement (the "Credit Agreement") dated as of August 30, 2019 to extend its maturity. The amended Credit Agreement provides for a $2.3 billion unsecured revolving credit facility, of which $2,148 million of the total commitment has a term through July 2029 and $152 million of the total commitment has a term through July 2028. The Company has the ability to increase the size of the Credit Agreement by up to an additional $750 million, subject to the receipt of lender commitments and other conditions precedent. In May 2026, PPG entered into a €250 million unsecured revolving credit agreement (the “Euro Credit Agreement”) that expires in May 2028. The Company has the right, subject to certain conditions set forth in the Credit Agreement and the Euro Credit Agreement, to designate certain subsidiaries of the Company as borrowers. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the applicable agreement. There were no amounts outstanding under either the Credit Agreement or the Euro Credit Agreement as of June 30, 2026 and December 31, 2025.

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, 2026, Total Indebtedness to Total Capitalization as defined under the Credit Agreement was 45%.

Current wording

The Term Loan, Credit Agreement and Euro Credit Agreement also require the Company to maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Credit Agreement, of 60% or less; provided, that for any fiscal quarter in which the Company has made an acquisition for consideration in excess of $1 billion and for the next five fiscal quarters thereafter, the ratio of Total Indebtedness to Total Capitalization may not exceed 65% at any time. As of June 30, 2026, Total Indebtedness to Total Capitalization as defined under the Credit Agreement was 44%.

Previous wording

The Credit Agreement also supports the Company’s commercial paper borrowings which are classified as long-term based on PPG’s intent and ability to refinance these borrowings on a long-term basis. Commercial paper borrowings outstanding under the Credit Agreement were $567 million as of March 31, 2026 and zero as of December 31, 2025.

Current wording

The Credit Agreement also supports the Company’s commercial paper borrowings which are classified as long-term based on PPG’s intent and ability to refinance these borrowings on a long-term basis. Commercial paper borrowings outstanding under the Credit Agreement were zero as of both June 30, 2026 and December 31, 2025.

Previous wording

Aggregate restructuring savings were approximately $20 million in the first quarter 2026. Total restructuring savings are expected to be approximately $60 million in 2026. In addition, the Company continues to review its cost structure to identify additional cost savings opportunities. Refer to Note 5, “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 $80 million to $100 million in 2026.

Current wording

Aggregate restructuring savings were approximately $15 million in the second quarter 2026. Total restructuring savings are expected to be approximately $50 million in 2026. In addition, the Company continues to review its cost structure to identify additional cost savings opportunities. Refer to Note 5, “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 $80 million to $100 million in 2026.

Previous wording

Comparing spot exchange rates at March 31, 2026 and at December 31, 2025, the U.S. dollar was relatively stable against the currencies of many countries within the regions PPG operates, resulting in no impact to consolidated net assets at March 31, 2026 compared to December 31, 2025.

Current wording

Comparing spot exchange rates at June 30, 2026 and at December 31, 2025, the U.S. dollar weakened against the currencies of many countries within the regions PPG operates, most notably the Mexican peso. As a result, consolidated net assets at June 30, 2026 increased by $127 million compared to December 31, 2025.

Previous wording

Comparing average exchange rates during the first three months of 2026 to those of the first three months of 2025, the U.S. dollar weakened against the currencies of many countries where PPG operates, including the Mexican peso, partially offset by strengthening against the euro. This had an favorable impact on Income before income taxes for the three months ended March 31, 2026 of $29 million from the translation of these foreign earnings into U.S. dollars.

Current wording

Comparing average exchange rates during the first six months of 2026 to those of the first six months of 2025, the U.S. dollar weakened against the currencies of many countries where PPG operates, including the Mexican peso, partially offset by strengthening against the euro. This had a favorable impact on Income before income taxes for the six months ended June 30, 2026 of $43 million from the translation of these foreign earnings into U.S. dollars.