Back to GetFilings.com
[Conformed]
===============================================================================
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, 1997 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 412-434-3131
area code:
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. [ ]
As of January 30, 1998, 177,800,420 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 $10,177
million.
DOCUMENTS INCORPORATED BY REFERENCE
INCORPORATED BY
DOCUMENT REFERENCE IN PART NO.
-------- ---------------------
Portions of PPG Industries, Inc. Annual Report to
Shareholders for the year ended December 31, 1997...... I, II and IV
Portions of PPG Industries, Inc. Proxy Statement for its
1998 Annual Meeting of Shareholders.................... III
===============================================================================
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.......... 4
Executive Officers of the Registrant......................... 5
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.......................................... 6
Item 6. Selected Financial Data...................................... 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 6
Item 7a. Quantitative and Qualitative Disclosures About Market Risk... 6
Item 8. Financial Statements and Supplementary Data.................. 6
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.......................... 6
PART III
Item 10. Directors and Executive Officers of the Registrant........... 7
Item 11. Executive Compensation....................................... 7
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................... 7
Item 13. Certain Relationships and Related Transactions............... 7
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K..................................................... 8
Signatures ............................................................. 9
NOTE ON INCORPORATION BY REFERENCE
Throughout this report, various information and data are incorporated by
reference to the Company's 1997 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, glass and chemicals. Within these
business segments, PPG has followed a program of directing its resources of
people, capital and technology in selected areas for positions of leadership.
Areas in which resources have been focused are automotive original, refinish,
industrial and architectural coatings; flat glass, automotive original and
replacement glass, aircraft transparencies, continuous-strand fiber glass; and
chlor-alkali and specialty chemicals. Each of the business segments in which
PPG is engaged is highly competitive. However, the diversification of product
lines and worldwide markets served tend to minimize the impact on total sales
and earnings of changes in demand for a particular product line or in a
particular geographic area. Reference is made to "Business Segment
Information" on pages 27 and 28 of the Annual Report to Shareholders, which is
incorporated herein by reference, for financial information relating to
business segments.
COATINGS
PPG is a major supplier 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, and many smaller
regional coatings companies. Product development, innovation, quality and
customer service have been stressed by PPG and have been significant factors
in developing an important supplier position.
The coatings business involves the supply of protective and decorative
finishes for automotive original equipment, appliances, industrial equipment
and packaging; factory-finished aluminum extrusions and coils for
architectural uses; and other industrial and consumer products. In addition to
supplying finishes to the automotive original equipment market, PPG supplies
automotive refinishes to the aftermarket, which are primarily sold through
distributors. In the automotive original and industrial portions of the
coatings business, PPG sells directly to a variety of manufacturing companies.
Product performance, technology, quality and customer service are major
competitive factors. The automotive original and industrial coatings are
formulated specifically for the customer's needs and application methods. PPG
also supplies adhesives and sealants for the automotive industry and metal
pretreatments for automotive 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, home centers and directly to some customers.
Price, quality and distribution are key competitive factors in the
architectural finishes market.
PPG grew the coatings business through several acquisitions completed during
1997. In September 1997, PPG acquired the U.S. industrial pretreatment
business of Man-Gill Chemical Company; in November 1997, PPG acquired Max
Meyer Duco S.p.A. (Max Meyer), a European supplier of automotive refinish,
fleet finish and decorative coatings, and Phillips Paint Products, a Canadian
industrial coatings manufacturer; and in December 1997, PPG acquired the
worldwide packaging coatings businesses of BASF Lacke + Farben AG, a German
company, and Keeler & Long, a U.S. manufacturer of high performance coatings
and coil coatings. During 1997, PPG also increased its ownership interest from
45% to 100% in two related automotive original coatings companies located in
Brazil and Argentina. PPG plans to sell the European decorative coatings
business of Max Meyer in 1998.
The principal production facilities of Coatings are concentrated in North
America and Europe. North American production facilities consist of 17 plants
in the United States, and two each in Canada and Mexico. The three largest
facilities are the Cleveland, Ohio, plant, which primarily produces automotive
original coatings; the Oak Creek, Wis., plant, which produces automotive
original and industrial coatings; and the Delaware, Ohio, plant, which
primarily produces automotive refinishes and certain industrial coatings.
Outside North America, PPG operates three plants each in Spain and Italy, two
plants in Germany, and one plant each in The People's Republic of China,
England, France and Portugal. These plants produce a variety of automotive
original, automotive refinish and industrial coatings. PPG owns equity
interests in operations in Hong Kong, India, South Korea, Taiwan and Thailand.
Additionally, coatings operates 10 service centers in the United States, two
each in Canada and Mexico, and one in Argentina to provide just-in-time
delivery and service to selected automotive assembly plants. Twenty training
centers in the United States, eleven in Europe, five in Asia and one in Canada
are in operation. These centers provide training for automotive aftermarket
refinish customers. Also, four automotive original coatings 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 segment during 1997 was 10,500.
1
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. 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 con- centrated in North Amer-
ica and Europe. Fifteen plants operate in the United States, of which six pro-
duce flat glass, five produce automotive glass products, three 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 plants operate in Italy; one manufactures automotive and flat
glass, one produces automotive glass products, one produces flat glass and one
produces aircraft transparencies. Three plants are located in France; one
plant manufactures automotive and flat glass and two plants produce automotive
glass products. One plant in England and one plant in the Netherlands produce
fiber glass. PPG owns equity interests in operations in France, Mexico, the
Netherlands, the People's Republic of China, Taiwan, the United States and
Venezuela and a majority interest in a glass distribution company in Japan.
Additionally, there are four satellite operations that provide limited manu-
facturing and just-in-time service to selected automotive customer locations,
and one coating facility for flat glass products. The average number of per-
sons employed by the glass segment during 1997 was 15,800.
PPG approved a program in late 1997 to restructure certain glass businesses
that were not meeting strategic and performance objectives. The principal
components of this program include the closure of the Perry, Ga., flat glass
plant, and the sale of the Company's equity interests in two Asian float glass
plants, which are expected to be completed in 1998. PPG recorded a pre-tax
charge of $102 million in 1997 to reflect the estimated cost of this program.
CHEMICALS
PPG is a major producer and marketer of chlor-alkali chemicals and a supplier
of specialty chemicals. The primary chlor-alkali products are chlorine,
caustic soda, vinyl chloride monomer, chlorinated solvents, chlorinated
benzenes and calcium hypochlorite. 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
products of PPG's specialty chemicals businesses are Transitions(R) lenses;
optical monomers; precipitated silicas for tire, shoe, and battery separator
businesses; and phosgene and other derivatives and intermediates for the
pharmaceutical, agricultural and fuel additives businesses.
In late December 1997, PPG acquired Sipsy Chimie Fine S.C.A., a French
manufacturer of pharmaceutical intermediates.
PPG's surfactants business was sold in 1997, resulting in a pre-tax gain of
$59 million.
PPG competes with six other major producers of chlor-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 quality and performance and technical
service are the most critical competitive factors.
Chemicals' principal production facilities are concentrated in North America
with five plants in the United States and one plant in Canada. The two largest
facilities, located in Lake Charles, La., and Natrium, W. Va., primarily
produce chlor-alkali products. An additional North American plant began
producing silica-based compounds in Mexico in the first half of 1997. Outside
North America, PPG operates two plants each in Taiwan and the People's
Republic of China, and one each in Australia, France, Ireland and the
Netherlands. PPG owns equity interests in operations in Japan, Thailand and
the United States. The average number of persons employed by the chemicals
segment during 1997 was 4,700.
RAW MATERIALS
The effective management of raw materials is important to PPG's continued
success. The Company's most significant raw materials are titanium dioxide and
epoxy resins in the coatings segment; sand, soda ash, energy, polyvinyl
butyral and boron-containing minerals in the glass 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 raw materials, there is more than one source of
supply.
RESEARCH AND DEVELOPMENT
Research and development costs, including depreciation of research facilities,
during 1997, 1996 and 1995 were
2
$266 million, $255 million and $252 million, respectively. PPG owns and
operates ten research and development facilities in the United States, Europe
and Japan to conduct research and development involving new and improved
products and processes. Additional process and product research and
development work is also undertaken at many of the Company's manufacturing
plants.
PATENTS
PPG considers patent protection to be important. 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 1997, 1996 and 1995,
respectively.
BACKLOG
In general, PPG does not manufacture its products against a backlog of orders.
Production and inventory 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 magnitude 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 worldwide by PPG during 1997 was
31,900.
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 $32 million, $18 million and $25 million in
1997, 1996 and 1995, respectively. It is expected that expenditures for such
projects in 1998 will approximate $30 million with similar amounts of annual
expenditures expected in the near future. Although future capital expenditures
are difficult to estimate accurately because of constantly changing regulatory
standards and policies, it can be anticipated that environmental control
standards will become increasingly stringent and costly.
PPG is negotiating with various government agencies concerning 65 cleanup
sites, including 31 sites on the National Priority List ("NPL"). While PPG is
not generally a major contributor of wastes to these sites, each potentially
responsible party or contributor may face governmental agency assertions of
joint and several liability as to each cleanup site. 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 that 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, 1997 and 1996, PPG had
reserves for environmental contingencies totaling $100 million and $91
million, respectively. Pre-tax charges against income for environmental
remediation costs totaled $34 million in 1997, $27 million in 1996 and $49
million in 1995.
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 against 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 addition, a portion of such environmental expenditures may be
recovered from insurers and other third parties. 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. See Commitments and
Contingent Liabilities, including 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
PPG is involved in a number of lawsuits and claims, both actual and potential,
including some which it has asserted against others, in which substantial
money
3
damages are sought. These lawsuits and claims relate to product liability,
contract, patent, antitrust, environmental and other matters arising out of the
conduct of PPG's business. PPG's lawsuits and claims against others include
claims against insurers and other third parties with respect to actual and
contingent losses related to environmental matters. Management believes that
the outcome of all lawsuits and claims involving PPG, in the aggregate, will
not have a material effect on PPG's consolidated financial position, results of
operations, or liquidity.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
4
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are elected annually in April by the
Board of Directors and the business experience during the past five years of
each Executive Officer is set forth below.
NAME AGE TITLE
---- --- -----
Raymond W. LeBoeuf (a) 51 Chairman of the Board and Chief Executive Officer since November 1997
Frank A. Archinaco (b) 54 Executive Vice President since April 1997
Charles E. Bunch (c) 48 Senior Vice President, Strategic Planning and Corporate Services since April 1997
Russell L. Crane (d) 57 Senior Vice President, Human Resources and Administration since April 1994
James C. Diggs (e) 49 Senior Vice President and General Counsel since July 1997
William H. Hernandez (f) 49 Senior Vice President, Finance since January 1995
E. Kears Pollock (g) 57 Executive Vice President since April 1997
Gary W. Weber (h) 54 Senior Vice President, Science and Technology since April 1997
(a) Mr. LeBoeuf was Chairman Elect and Chief Executive Officer, President and
Chief Operating Officer, Executive Vice President, Group Vice President,
Coatings and Resins and Vice President, Finance prior to his present
position.
(b) Mr. Archinaco was Senior Vice President, Glass, Vice President, Glass and
Vice President, Automotive and Aircraft Products prior to his present
position.
(c) Mr. Bunch was Vice President, Fiber Glass, Vice President, Architectural
Finishes and General Manager, Architectural Finishes prior to his present
position.
(d) Mr. Crane was Vice President, Human Resources prior to his present
position.
(e) Mr. Diggs was Senior Vice President and General Counsel Elect and was TRW
Inc.'s Vice President and Assistant General Counsel prior to joining PPG
in March 1997.
(f) Mr. Hernandez was Vice President, Finance, Vice President and Controller
and Controller prior to his present position.
(g) Mr. Pollock was Senior Vice President, Coatings and Resins, Vice
President, Coatings and Resins and Vice President, Automotive Products
prior to his present position.
(h) Dr. Weber was Vice President, Science and Technology and Vice President,
Technology, Glass prior to his present position.
5
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)
-------
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Stock Exchange Listings............................................... 41
Quarterly Stock Information........................................... 41
Directors who are not also Officers of the Company receive Common
Stock Equivalents pursuant to The Deferred Compensation Plan for
Directors and The Directors' Common Stock Plan. Common Stock
Equivalents are hypothetical shares of Common Stock having a value on
any given date equal to the value of a share of Common Stock. Common
Stock Equivalents earn dividend equivalents which are converted into
additional Common Stock Equivalents but carry no voting rights or
other rights of a holder of Common Stock. The Common Stock Equivalents
credited to Directors under both plans are exempt from registration
under Section 4(2) of the Securities Act of 1933 as private offerings
made only to Directors of the Company in accordance with the
provisions of the plans. The plans are incorporated by reference into
this Form 10-K as Exhibit 10 and 10.3.
Under the Company's Deferred Compensation Plan for Directors, each
Director must defer receipt of such compensation as the Board
mandates. Currently, the Board mandates deferral of one-third of each
payment of the basic annual retainer of each Director. Each Director
may also elect to defer the receipt of (i) an additional one-third of
each payment of the basic annual retainer, (ii) all of the basic
annual retainer, or (iii) all compensation. All deferred payments are
held in the form of Common Stock Equivalents. Payments out of the
deferred accounts are made in the form of Common Stock of the Company
(and cash as to any fractional Common Stock Equivalent). In 1997, the
Directors, as a group, were credited with 6,934 Common Stock
Equivalents under this Plan. The values of the Common Stock
Equivalents, when credited, ranged from $53.50 to $64.
Under the Directors' Common Stock Plan, each Director who neither is
nor was an employee of the Company is credited annually with Common
Stock Equivalents worth one-half of the Director's basic annual
retainer. No more than 10 years of credits may be made for the account
of any director. Upon termination of service, the Common Stock
Equivalents held in a Director's account are converted to and paid in
Common Stock of the Company (and cash as to any fractional Common
Stock Equivalent). In 1997, the Directors, as a group, received 3,162
Common Stock Equivalents under this Plan. The values of those Common
Stock Equivalents, when credited, ranged from $50.375 to $63.313.
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
common share before accounting changes, cumulative effect of
accounting changes on earnings per common share, earnings per common
share, earnings per common share-assuming dilution, dividends per
share, total assets and long-term debt for the years 1993 through
1997.................................................................. 40
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's Discussion and Analysis.................................. 21-26
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Management's Discussion and Analysis.................................. 25-26
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Independent Auditors' Report.......................................... 17
Financial Statements:
Statement of Income for the years ended December 31, 1997, 1996 and
1995................................................................ 18
Balance Sheet, December 31, 1997 and 1996............................ 19
Statement of Cash Flows for the years ended December 31, 1997, 1996
and 1995............................................................ 20
Notes to the Financial Statements.................................... 29-38
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
6
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 1998 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."
The information required by Item 405 of Regulation S-K is included under the
caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy
Statement which information under such caption is incorporated herein by
reference.
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.
7
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 6) regarding incorporation by reference from the
Annual Report to Shareholders).
Financial Statement Schedules for years ended December 31, 1997, 1996 and
1995:
The following should be read in conjunction with the previously
referenced financial statements.
PAGE
----
Independent Auditors' Report........................................... 10
Schedule II--Valuation and Qualifying Accounts......................... 11
All other schedules are omitted because they are not applicable.
(b) A Form 8-K was filed on October 29, 1997 which provided the Senior Vice
President and General Counsel's consent to being named in the Prospectus
Supplement dated October 29, 1997, which was part of the Registration
Statement No. 33-64081, as counsel in passing on the validity of the Notes
referred to in the Prospectus Supplement.
(c)Exhibits:
3 The Restated Articles of Incorporation, as amended, were filed as
Exhibit 3 to the Registrant's Form 10-Q for the quarter ended March
31, 1995, which exhibit is incorporated herein by reference.
3.1 The Bylaws.
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 as amended, was filed as Exhibit 10
to the Registrant's Form 10-Q for the quarter ended March 31, 1996.
The Supplemental Executive Retirement Plan II as amended, and the
Change in Control Employment Agreement were filed as Exhibits 10.2 and
10.5, respectively, to the Registrant's Form 10-Q for the quarter
ended September 30, 1995. The PPG Industries, Inc. Stock Plan was
filed as Exhibit 10 to the Registrant's Form 10-Q for the quarter
ended March 31, 1997. The Directors' Common Stock Plan as amended, was
filed as Exhibit 10.2 to the Registrant's Form 10-K for the year ended
December 31, 1996. All such exhibits are incorporated by reference.
10.1 PPG Industries, Inc. Incentive Compensation and Deferred Income Plan
for Key Employees.
10.2 PPG Industries, Inc. Deferred Compensation Plan.
10.3 PPG Industries, Inc. Deferred Compensation Plan for Directors.
11 Computation of Earnings Per Share for the Five Years Ended December
31, 1997.
12 Computation of Ratio of Earnings to Fixed Charges for the Five Years
Ended December 31, 1997.
13 Company's 1997 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 and 10.3 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.
8
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 24, 1998.
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 24, 1998.
SIGNATURE CAPACITY
/s/ R. W. LeBoeuf Director, Chairman of the Board and Chief
..................... Executive Officer
R. W. LeBoeuf
/s/ W. H. Hernandez Senior Vice President, Finance (Principal
..................... Financial and Accounting Officer)
W. H. Hernandez
E. B. Davis, Jr. Director
M. J. Hooper Director
A. J. Krowe Director
N. C. Lautenbach Director
By /s/ W. H. Hernandez
S. C. Mason Director ...................................
W. H. Hernandez, Attorney-in-Fact
H. A. McInnes Director
R. Mehrabian Director
V. A. Sarni Director
T. J. Usher Director
D. G. Vice Director
D. R. Whitwam Director
9
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, 1997 and
1996, and the related statements of income and cash
flows for each of the three years in the period ended
December 31, 1997, and have issued our report thereon
dated January 15, 1998; such financial statements and
report are included in your 1997 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, 1997, 1996 and 1995.
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.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
January 15, 1998
10
PPG INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
BALANCE AT CHARGED TO
BEGINNING COSTS AND BALANCE AT
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS(/1/) END OF YEAR
----------- ------- -------- --------------- -----------
(MILLIONS)
1997
Deducted from assets to
which they apply:
Allowance for doubtful
accounts ____________ $25.6 $10.2 $15.3 $20.5
===== ===== ===== =====
1996
Deducted from assets to
which they apply:
Allowance for doubtful
accounts ____________ $28.2 $12.9 $15.5 $25.6
===== ===== ===== =====
1995
Deducted from assets to
which they apply:
Allowance for doubtful
accounts ____________ $26.5 $ 8.1 $ 6.4 $28.2
===== ===== ===== =====
---------------------
(1) Notes and accounts receivable written off as uncollectible, net of
recoveries, changes attributable to foreign currency translation, and
activity related to businesses sold.
11
PPG INDUSTRIES, INC.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------
INDEX TO EXHIBITS
Exhibit Incorporated by Reference
- ------- -------------------------
3 The Restated Articles Exhibit 3 - Form 10-Q for the quarter
of Incorporation. ended March 31, 1995.
4 The Shareholders' Rights Exhibit 4 - Form 8-K, dated May 12, 1988.
Plan.
10 The Nonqualified Retire- Exhibit 10 - Form 10-Q for the quarter
ment Plan. ended March 31, 1996.
10 The Supplemental Exhibit 10.2 - Form 10-Q for the quarter
Executive Retirement ended September 30, 1995.
Plan II.
10 Change in Control Exhibit 10.5 - Form 10-Q for the quarter
Employment Agreement. ended September 30, 1995.
10 PPG Industries Stock Exhibit 10 - Form 10-Q for the quarter
Plan. ended March 31, 1997.
10 The Directors' Common Exhibit 10.2 - Form 10-K for the year ended
Stock Plan December 31, 1996.
Exhibit Description
- ------- -----------
3.1 The bylaws.
10.1 PPG Industries, Inc. Incentive Compensation and Deferred Income
Plan for Key Employees.
10.2 PPG Industries, Inc. Deferred Compensation Plan.
10.3 PPG Industries, Inc. Deferred Compensation Plan for Directors.
11 Computation of Earnings Per Share for the Five Years Ended
December 31, 1997.
12 Computation of Ratio of Earnings to Fixed Charges for the Five
Years Ended December 31, 1997.
13 Company's 1997 Annual Report to Shareholders.
21 Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
24 Powers of Attorney.
27 Financial Data Schedule.