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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1994 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
Pacific Stock Exchange
Philadelphia Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Philadelphia Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
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 __X__ 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. [X]
As of January 31, 1995, 206,232,732 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 $7,234
million.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated By
Document Reference In Part No.
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Portions of PPG Industries, Inc. Annual Report to
Shareholders for the year ended December 31, 1994...................................... I, II and IV
Portions of PPG Industries, Inc. Proxy Statement
for its 1995 Annual Meeting of Shareholders............................................ III
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PPG INDUSTRIES, INC.
AND CONSOLIDATED SUBSIDIARIES
------------------------
As used in this report, the terms "PPG," "Company," and "Registrant" mean PPG
Industries, Inc. and its subsidiaries, taken as a whole, unless the context
indicates otherwise.
------------------------
TABLE OF CONTENTS
Page
----
Part I
Item 1. Business....................................................................................... 1
Item 2. Properties..................................................................................... 3
Item 3. Legal Proceedings.............................................................................. 3
Item 4. Submission of Matters to a Vote of Security Holders............................................ 3
Executive Officers of the Registrant........................................................... 4
Part II
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters...................... 5
Item 6. Selected Financial Data........................................................................ 5
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................................................ 5
Item 8. Financial Statements and Supplementary Data.................................................... 5
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure............................................................ 5
Part III
Item 10. Directors and Executive Officers of the Registrant............................................. 6
Item 11. Executive Compensation......................................................................... 6
Item 12. Security Ownership of Certain Beneficial Owners and Management................................. 6
Item 13. Certain Relationships and Related Transactions................................................. 6
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................... 7
Signatures................................................................................................... 8
Note on Incorporation by Reference
Throughout this report various information and data are incorporated by
reference to the Company's 1994 Annual Report to Shareholders (hereinafter
referred to as "the Annual Report to Shareholders"). Any reference in this
report to disclosures in the Annual Report to Shareholders shall constitute
incorporation by reference only of that specific information and data into this
Form 10-K.
Part I
Item 1. Business
PPG Industries Inc., incorporated in Pennsylvania in 1883, is comprised of three
basic business segments: coatings and resins, glass and chemicals. Within these
business segments, PPG has followed a careful program of directing its resources
of people, capital and technology in selected areas where it enjoys positions of
leadership. Primary areas in which resources have been focused are automotive,
industrial and architectural coatings, flat glass, automotive original and
replacement glass, aircraft transparencies, continuous strand fiber glass, and
industrial and specialty chemicals. Each of the business segments in which PPG
is engaged is highly competitive. However, the broad diversification of product
lines and worldwide markets served tend to minimize the impact of changes in
demand for a particular product line on total sales and earnings. Reference is
made to "Business Segment Information" on pages 26 and 27 of the Annual Report
to Shareholders, which is incorporated herein by reference, for financial
information relating to business segments.
Coatings and Resins
PPG is a major manufacturer of protective and decorative coatings. The coatings
industry is highly competitive and consists of a few large firms with global
presence, and many smaller firms serving local or regional markets. PPG competes
in its primary markets with the world's largest coatings companies, most of
which have operations in North America and Europe. Product development,
innovation, quality and customer service have been stressed by PPG and have been
significant factors in developing an important supplier position.
The industrial portion of the coatings business involves the supply of
protective and decorative finishes for autos, appliances, industrial equipment,
and packaging; factory finished aluminum extrusions and coils for architectural
uses; and other industrial and consumer products. In addition to the supply of
finishes to the automotive original equipment market, PPG supplies automotive
refinishes to the aftermarket which are primarily sold through distributors. In
the industrial portion of the coatings business, PPG sells directly to a variety
of manufacturing companies. Product performance, quality and customer service
are major competitive factors. The industrial coatings are formulated
specifically for the customer's needs and application methods. PPG also
manufactures adhesives and sealants for the auto industry and metal
pretreatments for auto and industrial applications.
The architectural finishes business consists primarily of coatings used by
painting and maintenance contractors and by consumers for decoration and
maintenance. PPG's products are sold through independent distributors, paint
dealers, mass merchandisers and home centers. Price, quality and service are key
competitive factors in the architectural finishes market.
Coatings and resins' principal production facilities are concentrated in North
America and Europe. North American production facilities consist of 13 plants in
the United States, one in Canada and two in Mexico. The three largest facilities
are the Cleveland, OH plant, which primarily produces automotive original
coatings; the Oak Creek, WI plant, which produces automotive original and other
industrial coatings; and the Delaware, OH plant, which primarily produces
automotive refinishes and certain industrial coatings. Outside North America,
PPG operates three plants in Spain; two plants each in France and Italy, and one
plant each in England, Germany and Portugal. These plants produce a variety of
industrial and architectural coatings. PPG owns a 60 percent interest in a sales
operation in Hong Kong, 50 percent interests in operations in South Korea and
Japan, and a minority interest in an operation in Taiwan. Additionally, coatings
and resins operates ten service centers in the United States, two in Canada and
one in Mexico to provide just-in-time delivery and service to selected
automotive assembly plants. Twenty training centers in the United States, five
in Europe, two in Asia and one in Canada are in operation. These centers provide
training for automotive aftermarket refinish customers. Also, four automotive
original application centers that provide testing facilities for customer paint
processes and new products are in operation. The average number of persons
employed by the coatings and resins segment during 1994 was 9,600.
Glass
PPG is one of the major producers of flat glass, fabricated glass and continuous
strand fiber glass in the world. PPG's major markets are automotive original
equipment, automotive replacement, residential and commercial construction,
aircraft transparencies, the furniture, marine and electronics industries and
other markets. Most glass products are sold directly to manufacturing and
construction companies, although in some instances products are sold directly to
independent distributors and through PPG distribution outlets. Fiber glass
products are sold directly to manufacturing companies and independent
distributors. PPG manufactures flat glass by the float process and fiber glass
by the continuous filament process.
The bases for competition are price, quality, technology, cost and customer
service. The Company competes with six other major producers of flat glass, six
other major producers of fabricated glass and two other major producers of fiber
glass throughout the world.
PPG's principal glass production facilities are concentrated in North America
and Europe. Fourteen plants operate in the United States, of which six produce
flat glass, five produce automotive glass, two produce fiber glass products and
one produces aircraft transparencies. There are three plants in Canada, two of
which produce automotive glass and one produces flat glass. Four
1
plants operate in Italy; one manufactures automotive and flat glass, one
produces automotive glass, one produces flat glass, and another produces
aircraft transparencies. Three plants are located in France; one plant
manufactures automotive and flat glass and two plants produce automotive glass.
One plant in England and one plant in the Netherlands produce fiber glass. PPG
owns equity interests in operations in the United States, Canada, France, the
People's Republic of China, Taiwan and Venezuela and a majority interest in a
glass distribution company in Japan. The average number of persons employed by
the glass segment during 1994 was 15,400.
Chemicals
PPG is a major manufacturer of chlor-alkali and specialty chemicals. The primary
chlor-alkali and derivative products are chlorine, caustic soda, vinyl chloride
monomer, chlorinated solvents and chlorinated benzenes. Most of these products
are sold directly to manufacturing companies in the chemical processing, rubber
and plastics, paper, minerals and metals, and water treatment industries. The
primary specialty chemical products are silica based compounds for the tire,
shoe and battery separator businesses; surfactants for food emulsification,
sugar processing and personal care products; CR-39 monomer for optical plastics;
photochromic lens coatings for eyeglasses; and phosgene derivatives for the
pharmaceutical, herbicide and fuel additives businesses.
PPG competes with six other major producers of clor-alkali products. Price,
product availability, product quality and customer service are the key
competitive factors. In the specialty chemicals area, PPG's market share varies
greatly by business; product performance and technical service are the most
critical competitive factors.
PPG's chemical production facilities consist of nine plants in North America,
two plants each in Taiwan and the Peoples Republic of China, and one each in
France, the Netherlands and Ireland. The two largest facilities, located in Lake
Charles, LA and in Natrium, WV, primarily produce chlor-alkali and derivative
products. PPG owns equity interests in one company each in Japan, Thailand and
the United States. The average number of persons employed by the chemicals
segment during 1994 was 4,500.
Business Divested in 1994--Biomedical Systems Division
The Company's Biomedical Systems Division was a manufacturer, supplier and
servicer of integrated medical systems for human health care on a worldwide
basis. Major markets involved cardiopulmonary applications, including cardiac
catheterization, electrocardiographs and related equipment for diagnosis of
cardiovascular diseases, patient monitoring systems and sensors for both vital
signs and respiratory monitoring functions. A large number of competitors
provided products on either a global or regional basis. PPG sold directly to
hospital and clinical customers and through distributor organizations in
selected markets, and distributed selected original equipment products for other
manufacturers.
A decision was made in the fourth quarter of 1993 to divest the Biomedical
Systems Division. The sale of the medical electronics portion of this business
was completed by the end of the third quarter of 1994 and the sale of the
sensors business was completed in January 1995.
Two production facilities in Germany and one in the United States were sold
during 1994. One remaining plant in the United States related to the sensors
business existed at the end of 1994. This plant was sold as part of the sensors
business sale in January 1995. The average number of persons employed by the
Biomedical Systems Division during 1994 was 500.
Raw Materials
The effective management of raw materials is important to PPG's continued
success. The Company's most significant raw materials are sand, soda ash,
energy, polyvinyl butyral, colemanite and boric acid in the glass segment,
titanium dioxide and epoxy resins in the coatings and resins segment, and energy
and ethylene in the chemicals segment. Most of the raw materials used in
production are purchased from outside sources, and the Company has made, and
will continue to make, supply arrangements to meet the planned operating
requirements for the future. For the significant raw material requirements
identified above, and other material, there is more than one source of supply.
Patents
Although PPG considers patent protection to be important from an overall
standpoint, the Company's business segments are not materially dependent upon
any single patent or group of related patents. PPG received $25 million, $25
million and $27 million from royalties and the sale of technical know-how during
the years 1994, 1993 and 1992, respectively.
Research and Development
Research and development costs, including depreciation of research facilities,
during 1994, 1993 and 1992 were $233 million, $218 million and $221 million,
respectively. Research and development facilities are maintained for each
business segment. Each of the facilities conducts research and development
involving new and improved products and processes, and additional process and
product development work is undertaken at many of the Company's manufacturing
plants. PPG owns and operates eight research and development facilities in the
United States and Europe.
Backlog
In general, PPG does not manufacture its products against a backlog of orders;
production and inventory
2
levels are geared primarily to projections of future
demand and the level of incoming orders.
Non-U.S. Operations
Although PPG has a significant investment in non-U.S. operations, based upon the
extent and location of investments, management believes that the risk associated
with its international operations is not significantly greater than domestic
operations.
Employees
The average number of persons employed by PPG during 1994 was 30,800.
Environmental Matters
Like other companies, PPG is subject to the existing and evolving standards
relating to the protection of the environment. Capital expenditures for
environmental control projects were approximately $19 million, $29 million and
$48 million in 1994, 1993 and 1992, respectively. It is projected that
expenditures for such projects in 1995 will approximate $40 million with similar
amounts of annual expenditures expected in the near future. Although future
capital expenditures are difficult to forecast accurately because of constantly
changing regulatory standards, it can be anticipated that environmental control
standards will become increasingly stringent and costly.
PPG is negotiating with various government agencies concerning 75 National
Priority List ("NPL") and various other cleanup sites. While PPG is not
generally a major contributor of wastes to these sites, each potentially
responsible party or contributor may face agency assertions of joint and several
liability. Generally, however, a final allocation of costs is made based on
relative contributions of wastes to the site. There is a wide range of cost
estimates for cleanup of these sites, due largely to uncertainties as to the
nature and extent of their condition and the methods which may have to be
employed for their remediation. Additionally, remediation projects have been or
may be undertaken at certain of the Company's current and former plant sites.
The Company has established reserves for those sites where it is probable a
liability exists and the amount can be reasonably estimated. As of Dec. 31, 1994
and 1993, PPG had environmental reserves totaling $90 million. Charges against
income increasing environmental remediation reserves totaled approximately $30
million in 1994, $23 million in 1993 and $16 million in 1992. Cash outlays
against these reserves were approximately $30 million, $40 million and $58
million in 1994, 1993 and 1992, respectively.
The Company's experience to date regarding environmental matters leads PPG to
believe that it will have continuing expenditures for compliance with provisions
regulating the protection of the environment and for present and future
remediation efforts at waste and plant sites. However, management anticipates
that such expenditures, which will occur over an extended period of time, will
not result in future annual charges to income that are significantly greater
than those recorded in recent years. It is possible, however, that
technological, regulatory and enforcement developments, the results of
environmental studies and other factors could alter this expectation. In
management's opinion, the Company operates in an environmentally sound manner,
is well positioned, relative to environmental matters, within the industries in
which it operates and the outcome of these environmental matters will not have a
material adverse effect on PPG's financial position or liquidity. To date,
compliance with federal, state and local requirements has not had a material
impact on PPG's financial position, results of operations or liquidity. See
Environmental Matters in Management's Discussion and Analysis for additional
information related to environmental matters.
Item 2. Properties
See "Item 1. Business" for information on PPG's production and fabrication
facilities.
Generally, the Company's plants are suitable and adequate for the purposes for
which they are intended, and overall have sufficient capacity to conduct
business in the upcoming year.
Item 3. Legal Proceedings
Securities and Exchange Commission regulations require the disclosure of any
environmental legal proceeding in which a governmental authority is a party and
which may reasonably be expected to involve monetary sanctions in excess of
$100,000. In this regard, on November 14, 1991, the Company received a penalty
notice from the Louisiana Department of Environmental Quality (DEQ) proposing a
penalty of $1,236,000 for alleged violations of hazardous waste regulations
relating to the Company's investigation of groundwater contamination at the
Company's Lake Charles, LA plant. The Company has filed an appeal of the
proposed penalty and negotiations with the DEQ continue.
Separately, the Company has voluntarily entered into an agreement with the EPA
to participate in the EPA's Toxic Substances Control Act Section 8(e) Compliance
Audit Program (the "Program"). Under the Program the Company conducted a
self-audit. On October 28, 1992, the Company submitted the first of two final
reports pursuant to the Program. Based on this submission, the Company would pay
$522,000 in stipulated penalties. To the Company's knowledge, the EPA has not
yet reviewed the report or issued any order as a result of the report. Under the
Program, the EPA has agreed that the combined potential civil penalties for both
final reports of the Company will not exceed $1,000,000.
Item 4. Submission of Matters to a Vote of Security Holders
None
3
Executive Officers of the Registrant
Name Age Title
____ ___ _____
Jerry E. Dempsey (a) 62 Chairman of the Board and Chief Executive Officer since September 1993
Russell L. Crane (b) 54 Senior Vice President, Human Resources and Administration since April 1994
Robert D. Duncan (c) 55 Executive Vice President since April 1994
Peter R. Heinze (d) 52 Senior Vice President, Chemicals since April 1994
William H. Hernandez (e) 46 Senior Vice President, Finance since January 1995
John J. Horgan (f) 52 Senior Vice President, Fiber Glass since April 1994
Raymond W. LeBoeuf (g) 48 Executive Vice President since April 1994
Guy A. Zoghby (h) 60 Senior Vice President and General Counsel since April 1994
(a) Mr. Dempsey was Senior Vice President of WMX Technologies, Inc., and
Chairman of Chemical Waste Management, Inc., prior to his present position.
(b) Mr. Crane was Vice President, Human Resources prior to his present
position.
(c) Mr. Duncan was Group Vice President, Glass prior to his present position.
(d) Dr. Heinze was Group Vice President, Chemicals of the Company and was
President of the Chemicals Division of BASF (U.S.) prior to his present
position.
(e) Mr. Hernandez was Vice President and Controller and Controller of the
Company and was Vice President, Finance and Planning and Chief Financial
Officer of Borg-Warner Automotive, Inc. prior to his present position.
(f) Mr. Horgan was Vice President, Fiber Glass Products and Vice President,
Administration prior to his present position.
(g) Mr. LeBoeuf was Vice President, Finance prior to his present position.
(h) Mr. Zoghby was Vice President and General Counsel prior to his present
position.
The executive officers of the Company are elected annually in April by the Board
of Directors.
4
Part II
Information with respect to the following Items can be found on the indicated
pages of the Annual Report to Shareholders and is incorporated herein by
reference.
Page(s)
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Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
Stock Exchange Listings................................................................................... 40
Quarterly Stock Information............................................................................... 40
Item 6. Selected Financial Data
The information required by Item 6 is reported in the Eleven-Year Digest under the captions net sales,
income before accounting changes, cumulative effect of accounting changes, net income, earnings per share
before accounting changes, cumulative effect of accounting changes on earnings per share, earnings
per share, dividends per share, total assets, and long-term debt and lease obligations
for the years 1990 through 1994............................................................................ 39
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis...................................................................... 21-25
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report.............................................................................. 17
Financial Statements:
Statement of Income for the years ended
December 31, 1994, 1993 and 1992..................................................................... 18
Balance Sheet, December 31, 1994 and 1993............................................................... 19
Statement of Cash Flows for the years ended
December 31, 1994, 1993 and 1992..................................................................... 20
Notes to the Financial Statements....................................................................... 28-37
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
5
Part III
Item 10. Directors and Executive Officers of the Registrant
The information required by Item 10 regarding Directors is contained under the
caption "Election of Directors" in the Registrant's definitive Proxy Statement
for its 1995 Annual Meeting of Shareholders (the "Proxy Statement") which will
be filed with the Securities and Exchange Commission, pursuant to Regulation
14A, not later than 120 days after the end of the fiscal year, which information
under such caption is incorporated herein by reference.
The information required by Item 10 regarding Executive Officers is set forth in
Part I of this report under the caption "Executive Officers of the Registrant."
Item 11. Executive Compensation
The information required by Item 11 is contained under the captions
"Compensation of Executive Officers" and "Election of Directors--Compensation of
Directors" in the Proxy Statement which information under such captions is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 is contained under the caption "Voting
Securities" in the Proxy Statement which information under such caption is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 is contained under the caption "Election of
Directors--Other Transactions" in the Proxy Statement which information under
such caption is incorporated herein by reference.
6
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements and Independent Auditors' Report (see Part II, Item 8
of this report (page 5) regarding incorporation by reference from the Annual
Report to Shareholders).
Financial Statement Schedules for years ended December 31, 1994, 1993 and
1992:
The following should be read in conjunction with the previously
referenced financial statements.
Page
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Independent Auditors' Report........................................................................... 9
Schedule II--Valuation and Qualifying Accounts......................................................... 10
All other schedules are omitted because they are not applicable.
(b) A Form 8-K was filed on October 21, 1994 and was reported as such in our
Form 10-Q for the quarter ended September 30, 1994.
(c) Exhibits:
(3) The Restated Articles of Incorporation as amended, were filed
as Exhibit 3 to the Registrant's Form 10-K for the year ended
December 31, 1990, which exhibit is incorporated herein by
reference. The bylaws, as amended through February 21, 1991,
were filed as Exhibit 3.1 to the Registrant's Form 10-K for the
year ended December 31, 1990, which exhibit is incorporated
herein by reference.
(4) The Shareholders' Rights Plan was filed as Exhibit 4 on the
Registrant's Form 8-K, dated May 12, 1988, which exhibit is
incorporated herein by reference.
*(10) The Nonqualified Retirement Plan was filed as Exhibit 10.1 and
the Supplemental Executive Retirement Plan II was filed as
Exhibit 10.2 to the Registrant's Form 10-K for the year ended
December 31, 1992. The 1984 Earnings Growth Plan is contained
in Exhibit A to the Registrant's definitive Proxy Statement dated
March 2, 1984. The 1984 Stock Option Plan was filed as Exhibit 10
to the Registrant's Form 10-Q for the quarter ended March 31,
1992. A Description of the Compensatory Arrangement between Mr.
Jerry E. Dempsey and the Registrant was filed as Exhibit 10 to
the Registrant's Form 10-Q for the quarter ended September 30,
1993. All exhibits referred to in this paragraph (10) are
incorporated by reference.
*(10.1) Directors' Retirement Plan as amended through December 15, 1994.
*(10.2) Deferred Compensation Plan for Directors as amended through
December 15, 1994.
*(10.3) Incentive Compensation and Deferred Income Plan for Key Employees
as amended through February 15, 1995.
*(10.4) Description of the Compensatory Arrangement between Dr. Peter R.
Heinze and the Registrant.
(11) Computation of Earnings Per Share for the Five Years Ended
December 31, 1994.
(13) Company's 1994 Annual Report to Shareholders (except for the
pages and information therein expressly incorporated by
reference in this Form 10-K, the Annual Report to Shareholders
is provided solely for the information of the Commission and is
not to be deemed "filed" as part of the Form 10-K).
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Auditors.
(24) Powers of Attorney.
(27) Financial Data Schedule.
* Items referred to in Exhibit (10) and incorporated by reference and Exhibits
(10.1), (10.2), (10.3) and (10.4) are either management contracts,
compensatory plans or arrangements required to be filed as an exhibit hereto
pursuant to Item 14(c) of Form 10-K.
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized, on February 16, 1995.
PPG INDUSTRIES, INC.
(Registrant)
By /s/ W. H. Hernandez
...................................
W.H. Hernandez,
Senior Vice President, Finance
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the Registrant and in the
capacities indicated, on February 16, 1995.
Signature Capacity
--------- --------
/s/ J. E. Dempsey
.................................... Director, Chairman of the Board and
J. E. Dempsey Chief Executive Officer
/s/ W. H. Hernandez
.................................... Senior Vice President, Finance (Principal
W. H. Hernandez Financial and Accounting Officer)
E. B. Davis, Jr. Director
S. C. Gault Director
A. J. Krowe Director
S. C. Mason Director By /s/ W. H. Hernandez
H. A. McInnes Director ....................................
R. Mehrabian Director W. H. Hernandez, Attorney-in-Fact
V. A. Sarni Director
D. G. Vice Director
D. R. Whitwam Director
8
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of PPG Industries, Inc.:
We have audited the balance sheet of PPG Industries, Inc. and subsidiaries as
of December 31, 1994 and 1993, and the related statements of income and cash
flows for each of the three years in the period ended December 31, 1994, and
have issued our report thereon dated January 19, 1995; such financial
statements and report are included in your 1994 Annual Report to Shareholders
and are incorporated herein by reference. Our audits also included financial
statement schedule II, Valuation and Qualifying Accounts, of PPG Industries,
Inc. and subsidiaries for the years ended December 31, 1994, 1993 and 1992. The
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits. In our
opinion, such financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
January 19, 1995
9
PPG Industries, Inc. and Subsidiaries
Schedule II--Valuation and Qualifying Accounts
For the Years Ended December 31, 1994, 1993 and 1992
Balance at Charged to
Beginning Costs and Balance at
Description of Year Expenses Deductions(1) End of Year
----------- ---------- ----------- -------------- ------------
(Millions)
1994
Deducted from assets to which
they apply:
Allowance for doubtful accounts $ 25.6 $ 12.6 $ 11.7 $ 26.5
========= ========= ========= =========
1993
Deducted from assets to which
they apply:
Allowance for doubtful accounts $ 33.0 $ 15.2 $ 22.6 $ 25.6
========= ========= ========= =========
1992
Deducted from assets to which
they apply:
Allowance for doubtful accounts $ 35.1 $ 16.6 $ 18.7 $ 33.0
========= ========= ========= =========
------------------------------------
(1) Notes and accounts receivable written off as uncollectible, net of
recoveries, changes attributable to foreign currency translation, and
elimination of allowances related to businesses sold.
10
PPG INDUSTRIES, INC.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
INDEX TO EXHIBITS
Exhibit Incorporated by Reference
- ------- -------------------------
3 The Restated Articles Exhibit 3 - Form 10-K for the year ended
of Incorporation December 31, 1990
3 The By-Laws Exhibit 3.1 - Form 10-K for the year ended
December 31, 1990
4 The Shareholders' Rights Exhibit 4 - Form 8-K, dated May 12, 1988
Plan
10 The Nonqualified Retire- Exhibit 10.1 - Form 10-K for the year ended
ment Plan December 31, 1992
10 The Supplemental Exhibit 10.2 - Form 10-K for the year ended
Executive Retirement December 31, 1992
Plan II
10 1984 Earnings Growth Plan Exhibit A - Proxy Statement, dated
March 2, 1984
10 1984 Stock Option Plan Exhibit 10 - Form 10-Q for the quarter
ended March 31, 1992
10 Description of Compensatory Exhibit 10 - Form 10-Q for the quarter
Arrangement between ended September 30, 1993
Jerry E. Dempsey and
the Registrant
Exhibit Description
- ------- -----------
10.1 Directors' Retirement Plan as amended through December 15, 1994
10.2 Deferred Compensation Plan for Directors as amended through
December 15, 1994
10.3 Incentive Compensation and Deferred Income Plan for Key Employees
as amended through February 15, 1995
10.4 Description of Compensatory Arrangement between Dr. Peter R. Heinze
and the Registrant.
11 Computation of Earnings Per Share for the Five Years Ended
December 31, 1994
13 Company's 1994 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
24 Powers of Attorney
27 Financial Data Schedule