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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, 2001 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)
Regitrant's telephone number, including area code:s 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. [ ]
As of January 31, 2002, 168,533,645 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 $8,174
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, 2001....... I, II and IV
Portions of PPG Industries, Inc. Proxy Statement for its
2002 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.......... 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.................. 7
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.......................... 7
Part III
Item 10. Directors and Executive Officers of the Registrant........... 8
Item 11. Executive Compensation....................................... 8
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................... 8
Item 13. Certain Relationships and Related Transactions............... 8
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K.......................................................... 9
Signatures ............................................................. 11
Note on Incorporation by Reference
Throughout this report, various information and data are incorporated by
reference to the Company's 2001 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 into selected areas to build upon positions of
leadership. Areas in which resources have been focused are automotive
original, refinish, industrial, aerospace, packaging, and architectural
coatings; flat glass, automotive original and replacement glass, continuous-
strand fiber glass; and chlor-alkali and specialty chemicals. Each of the
businesses 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 20 through 22 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 global operations, 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; aircraft; 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 addition to specific products, PPG supplies
technical expertise, engineering and purchasing services to the automotive
original and industrial portions of the business. In the automotive original
and industrial portions of the coatings business, PPG sells directly to a
variety of manufacturing companies. 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 and related chemicals for automotive and industrial
applications. The packaging portion of the coatings business supplies finishes
for aerosol, food and beverage containers for consumer products. Product
performance, technology, quality and customer service are major competitive
factors.
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, PPG-operated outlets and directly
to some customers. Price, quality and distribution are key competitive factors
in the architectural finishes market.
The aerospace business primarily supplies coatings, sealants and
transparencies for aircraft serving the commercial, military and general
aviation industries as well as sealants for architectural insulating glass
units. The aerospace business distributes products directly to aircraft
maintenance and aftermarket customers around the world.
The principal production facilities of the coatings business are in North
America and Europe. North American production facilities consist of 25 plants
in the United States, two in Canada and one in Mexico. The three largest
facilities in the United States are the Cleveland, Ohio, plant, which
primarily produces automotive original coatings; the Oak Creek, Wis., plant,
which primarily produces industrial coatings and certain automotive original
coatings; and the Delaware, Ohio, plant, which primarily produces automotive
refinishes and certain automotive original and industrial coatings. Outside
North America, PPG operates six plants in Italy, four plants in Germany, three
plants each in England and Spain, two plants each in Brazil, China and France,
and one plant each in Argentina, Australia, Malaysia, the Netherlands,
Thailand and Turkey. PPG owns equity interests in operations in Canada, India,
South Korea and Taiwan. Additionally, the automotive coatings business
operates eight service centers in the United States, two each in Mexico and
Poland, and one each in Argentina, Brazil, Canada, France and Portugal to
provide just-in-time delivery and service to selected automotive assembly
plants. Twenty-one training centers in Europe, 18 in the United States, 10 in
Asia, four in South America, three in Canada and one in Mexico are
in operation. These centers provide training for automotive aftermarket
refinish customers. The aerospace business operates a global network of 14
application support centers that provide customer technical support, on-time
delivery of products, and improvements to customer efficiency and
productivity. Also, four automotive original coatings application centers
throughout the world 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 2001 was 17,100.
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, the furniture and electronics industries, insurance services,
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. PPG also provides services to insurance companies
and glass installers through its auto glass claims processor,
LYNX Services(R).
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
automotive original and replacement glass products, five produce flat glass,
and three produce fiber glass products. There are three plants in Canada, two
of which produce automotive original and replacement glass products and one
produces flat glass. One plant each in England and the Netherlands produce
fiber glass. PPG owns equity interests in operations in China, Hong Kong,
Mexico, the Netherlands, Taiwan, the United States and Venezuela and a
majority interest in a glass distribution company in Japan. Additionally,
there are four satellite operations in the United States, two satellite
operations in Canada and one in Mexico that provide limited fabricating or
assembly and just-in-time service to selected automotive customer locations,
one satellite coating facility in the United States for flat glass products
and one satellite tempering and fabrication facility in the United States for
flat glass products. There are also two insurance claim management centers
that serve the LYNX Services(R) business. The average number of persons
employed by the glass segment during 2001 was 12,000.
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, 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, battery separator, and other
industrial businesses and phosgene derivatives and other intermediates for the
pharmaceutical and agricultural businesses.
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 each in Canada and Mexico. The
two largest facilities, located in Lake Charles, La., and Natrium, W. Va.,
primarily produce chlor-alkali products. Outside North America, PPG operates
two plants each in China, France and Taiwan, and one each in Australia, Bra-
zil, Ireland, the Netherlands and the Philippines. PPG owns equity interests
in operations in Japan, Thailand and the United States. The average number of
persons employed by the chemicals segment during 2001 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 and other resins in the coatings segment; sand, soda ash, energy and
polyvinyl butyral 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.
Supply of critical raw materials is managed by establishing contracts,
multiple sources, and identifying alternative materials or technology,
whenever possible.
Research and Development
Research and development costs, including depreciation of research facilities,
during 2001, 2000 and 1999 were $283 million in 2001, and $301 million in 2000
and 1999. PPG owns and operates several research and development facilities 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 $26 million in 2001, $27 million in 2000 and $26
million in 1999 from royalties and the sale of technical know-how.
2
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
that of domestic operations.
Employee Relations
The average number of persons employed worldwide by PPG during 2001 was
34,900. The Company has numerous collective bargaining agreements throughout
the world and believes it will be able to renegotiate any such agreements on
satisfactory terms. The Company believes it has good relationships with its
employees.
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 $22 million, $22 million and $19 million
in 2001, 2000 and 1999, respectively. It is expected that expenditures for
such projects in 2002 will approximate $25 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 98 current and
former manufacturing sites, and offsite waste disposal locations, including 27
sites on the National Priority List (NPL). While PPG is not generally a major
contributor of wastes to these offsite waste disposal locations, each
potentially responsible party may face governmental 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 that may have to
be employed for their remediation. The Company has established reserves for
those sites where it is probable that a liability has been incurred and the
amount can be reasonably estimated. As of December 31, 2001 and 2000, PPG had
reserves for environmental contingencies totaling $94 million and $84 million,
respectively. Pretax charges against income for environmental remediation
costs totaled $29 million in 2001, $18 million in 2000, and $10 million in
1999.
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. Management anticipates
that such expenditures will occur over an extended period of time and could
result in charges against income of up to $50 million in 2002. 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 that it has asserted against others, in which substantial
monetary damages are sought. These lawsuits and claims relate to product
liability, contract, patent, environmental, antitrust and other matters
arising out of the conduct of PPG's business. Except with respect to any PPG
contribution arising out of a possible voluntary settlement of asbestos claims
as discussed below, the amount of which cannot be predicted, management
believes that, in the aggregate, the outcome of all lawsuits and claims
involving PPG will not have a material effect on PPG's consolidated financial
position or liquidity; however, such outcome may be material to the results of
operations of the period in which the costs, if any, are recognized. Included
among PPG's legal proceedings are the following:
The Company has been named as a defendant in a number of antitrust lawsuits
filed in federal and state courts by various plaintiffs. These suits allege
PPG was involved with competitors in fixing prices and allocating markets for
the automotive refinish industry and for certain glass products. Twenty-nine
glass anti-trust cases were
3
filed in federal courts, all of which have been consolidated in a single
federal district court, and the court has ruled that the case may proceed as a
class action. All of the initial defendants in the glass anti-trust actions,
except PPG, have entered into settlement agreements with the plaintiffs. In
addition, over 65 cases alleging anti-trust violations in the automotive
refinish industry have been filed in various state and federal jurisdictions,
and have been consolidated. The plaintiffs in these cases are seeking economic
and treble damages and injunctive relief. The Company believes it has
meritorious defenses in these lawsuits.
The Company has been a defendant since April 1994 in a suit filed in the
Federal District Court in St. Paul, Minnesota, by Marvin Windows and Doors
(Marvin) alleging numerous claims, including breach of warranty. The district
court dismissed the plaintiff's claims in 1999, but certain of the claims were
reinstated on appeal. The Eighth Circuit U.S. Court of Appeals dismissed 12 of
13 claims, but allowed the plaintiff to proceed to trial on a breach of
warranty claim. On Feb. 14, 2002, the federal jury awarded Marvin $136 million
on the remaining claim. PPG believes it has meritorious defenses to the
plaintiff's claims and intends to appeal the jury's decision.
For over thirty years, PPG has been a defendant in lawsuits involving claims
alleging personal injury from exposure to asbestos. Aggregate settlements by
PPG to date have been immaterial. At December 31, 2001, PPG was one of many
defendants in numerous asbestos-related lawsuits involving about 116,000
claims. In many of the cases, the plaintiffs allege that PPG should be liable
for injuries involving asbestos-containing thermal insulation products
manufactured and distributed by Pittsburgh Corning Corporation ("PC"). PPG and
Corning Incorporated are each 50% shareholders in PC. PPG believes that it is
not responsible for any injuries caused by PC products and intends to defend
against such claims. Prior to 2000, PPG had never been found liable for any
such claims, and in numerous cases PPG had been dismissed on motions prior to
trial. In January 2000, in a trial in a state court in Texas involving six
plaintiffs, the jury found PPG not liable. However, a week later in a separate
trial also in state court in Texas, another jury found PPG, for the first
time, partly responsible for injuries to five plaintiffs alleged to be caused
by PC products. PPG intends to appeal the adverse verdict.
On April 16, 2000, PC filed for Chapter 11 Bankruptcy in the Federal
Bankruptcy Court in Pittsburgh, Pennsylvania. Accordingly, in the first
quarter of 2000, PPG recorded an after-tax charge of $35 million for the
write-off of all of its investment in PC. As a consequence of the bankruptcy
filing and the various motions and orders in that proceeding, the asbestos
litigation against PPG (and against PC and Corning Incorporated) related to PC
products has been stayed and the filing of additional asbestos suits against
them has been enjoined, until March 1, 2002. During the pendency of the stay,
interested parties, including PC and PPG, among others, have been engaged in
discussions to determine whether a settlement of current and potential
asbestos claims can be agreed on within the context of the PC bankruptcy
proceeding. The court has extended the stay several times with the parties'
consent in order to facilitate settlement discussions. These settlement
discussions involve numerous, complex issues. Accordingly, it is impossible to
predict whether, when, or on what terms a voluntary settlement, if any, on the
part of PPG might be reached.
Over the past ten years, the Company and others have been named as defendants
in several cases claiming damages related to exposure to lead. PPG has been
dismissed as a defendant from most of those lawsuits and has never been found
liable in any of those cases.
Although PPG believes it has adequate insurance for the personal injury and
property damage claims against PPG described above, certain of PPG's insurers
are contesting coverage with respect to some of these claims. 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,
asbestos and other matters.
Securities and Exchange Commission regulations require the disclosure of any
environmental legal proceedings in which a governmental authority is party and
which may reasonably be expected to involve monetary sanctions in excess of
$100,000. In this regard, PPG received a notice of violation from the U.S.
Environmental Protection Agency with respect to PPG's facilities in Lexington
and Shelby, North Carolina. In February 2002, PPG entered into a consent
decree providing for a final penalty of $250,000 to resolve this matter.
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. The business experience during the past five years of each
Executive Officer is set forth below.
Name Age Title
---- --- -----
Raymond W. LeBoeuf (a) 55 Chairman of the Board and Chief Executive Officer since November 1997
Frank A. Archinaco (b) 58 Executive Vice President since April 1997
Charles E. Bunch (c) 52 Executive Vice President since March 2000
James C. Diggs (d) 53 Senior Vice President and General Counsel since July 1997
William H. Hernandez 53 Senior Vice President, Finance since January 1995
(a) Mr. LeBoeuf was Chairman Elect and Chief Executive Officer and President
and Chief Operating Officer, prior to his present position.
(b) Mr. Archinaco was Senior Vice President, Glass, prior to his present
position.
(c) Mr. Bunch was Senior Vice President, Strategic Planning and Corporate
Services and Vice President, Fiber Glass, prior to his present position.
(d) 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.
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)
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Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
Stock Exchange Listings............................................... 37
Quarterly Stock Information........................................... 37
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 that 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 Exhibits 10 and 10.1.
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). The
Directors, as a group, were credited with 8,545, 7,584 and 10,811
Common Stock Equivalents in 2001, 2000 and 1999, respectively, under
this plan. The values of the Common Stock Equivalents, when credited,
ranged from $45.10 to $54.95 in 2001, $39.69 to $55.06 in 2000 and
$51.25 to $64.94 in 1999.
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. Upon termination of service and attaining 70 years of age,
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). The Directors, as a group,
received 3,820, 3,603 and 3,746 Common Stock Equivalents in 2001, 2000
and 1999, respectively, under this plan. The values of those Common
Stock Equivalents, when credited, ranged from $45.10 to $54.70 in
2001, $40.00 to $52.25 in 2000 and $52.21 to $64.13 in 1999.
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 1997 through
2001.................................................................. 36
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Management's Discussion and Analysis.................................. 14-20
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
Management's Discussion and Analysis.................................. 19-20
6
Page(s)
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Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report.......................................... 9
Consolidated Financial Statements:
Statement of Income for the years ended December 31, 2001, 2000 and
1999................................................................ 10
Balance Sheet, December 31, 2001 and 2000............................ 11
Statement of Shareholders' Equity for the years ended December 31,
2001, 2000 and 1999................................................. 12
Statement of Comprehensive Income for the years ended December 31,
2001, 2000 and 1999................................................. 12
Statement of Cash Flows for the years ended December 31, 2001, 2000
and 1999............................................................ 13
Notes to the Financial Statements.................................... 23-35
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
7
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 2002 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.
8
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 7) regarding incorporation by reference from the
Annual Report to Shareholders).
Financial Statement Schedules for years ended December 31, 2001, 2000 and
1999:
The following should be read in conjunction with the previously
referenced financial statements.
Page
----
Independent Auditors' Report........................................... 12
Schedule II--Valuation and Qualifying Accounts......................... 13
All other schedules are omitted because they are not applicable.
(b) No reports were filed on Form 8-K during the last quarter of the period
covered by this report.
(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 Statement with Respect to Shares, amending the Restated Articles of
Incorporation effective April 21, 1998 was filed as Exhibit 3.1 to
the Registrant's Form 10-K for the year ended December 31, 1998,
which exhibit is incorporated herein by reference.
3.2 The Bylaws, as amended, were filed as Exhibit 3 to the Registrant's
Form 10-Q for the quarter ended March 31, 2000, 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 February 19, 1998, which exhibit is
incorporated herein by reference.
4.1 Indenture, dated as of August 1, 1982, was filed as Exhibit 4.1 to
PPG's Registration Statement on Form S-3 (No. 333-44397) dated
January 16, 1998 (the "1998 Form S-3"), which exhibit is
incorporated herein by reference.
4.2 First Supplemental Indenture, dated as of April 1, 1986, was filed
as Exhibit 4.2 to the 1998 Form S-3, which exhibit is incorporated
herein by reference.
4.3 Second Supplemental Indenture, dated as of October 1, 1989, was
filed as Exhibit 4.3 to the 1998 Form S-3, which exhibit is
incorporated herein by reference.
4.4 Third Supplemental Indenture, dated as of November 1, 1995, was
filed as Exhibit 4.4 to the 1998 Form S-3, which exhibit is
incorporated herein by reference.
*10 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, which exhibit is incorporated
herein by reference. PPG Industries, Inc. Deferred Compensation Plan
for Directors was filed as Exhibit 10.3 to the Registrant's Form 10-
K for the year ended December 31, 1997, which exhibit is
incorporated herein by reference. PPG Industries, Inc. Incentive
Compensation and Deferred Income Plan for Key Employees, as amended,
was filed as Exhibit 10.1 to the Registrant's Form 10-Q for the
quarter ended March 31, 2000, which exhibit is incorporated herein
by reference. PPG Industries, Inc. Directors' Common Stock Plan, as
amended April 19, 2000, was filed as Exhibit 10.1 to the
Registrant's Form 10-K for the year ended December 31, 2000, which
exhibit is incorporated herein by reference. PPG Industries, Inc.
Executive Officers Annual Incentive Compensation Plan, dated as of
April 19, 2001, was filed as Exhibit 10.3 to the Registrant's Form
10-K for the year ended December 31, 2000, which exhibit is
incorporated herein by reference.
*10.1 PPG Industries, Inc. Nonqualified Retirement Plan dated as of
January 1, 1989, as amended February 21, 2002, was filed as Exhibit
10.1 to the Registrant's Form 10-K for the year ended December 31,
2001, which exhibit is incorporated herein by reference.
9
*10.2 PPG Industries, Inc. Deferred Compensation Plan, as amended
effective February 21, 2002, was filed as Exhibit 10.2 to the
Registrant's Form 10-K for the year ended December 31, 2001, which
exhibit is incorporated herein by reference.
*10.3 PPG Industries, Inc. Stock Plan, dated as of April 17, 1997, as
amended April 18, 2002, was filed as Exhibit 10.3 to the
Registrant's Form 10-K for the year ended December 31, 2001, which
exhibit is incorporated herein by reference.
*10.4 PPG Industries, Inc. Total Shareholder Return Plan for Key
Employees, as amended effective April 18, 2002, was filed as Exhibit
10.4 to the Registrant's Form 10-K for the year ended December 31,
2001, which exhibit is incorporated herein by reference.
*10.5 PPG Industries, Inc. Executive Officers' Total Shareholder Return
Plan, as amended effective April 18, 2002, was filed as Exhibit 10.5
to the Registrant's Form 10-K for the year ended December 31, 2001,
which exhibit is incorporated herein by reference.
12 Computation of Ratio of Earnings to Fixed Charges for the Five Years
Ended December 31, 2001.
13 Company's 2001 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 Independent Auditors' Consent.
24 Powers of Attorney.
* Items referred to in Exhibit 10, 10.1, 10.2, 10.3, 10.4 and 10.5 and
incorporated by reference are either management contracts, compensatory
plans or arrangements required to be filed as an exhibit hereto pursuant to
Item 601 of Regulation S-K.
10
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 21, 2002.
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 21, 2002.
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
J. G. Berges Director
E. B. Davis, Jr. Director
M. J. Hooper Director
A. J. Krowe Director
By /s/ W. H. Hernandez
S. C. Mason Director ...................................
W. H. Hernandez, Attorney-in-Fact
R. Mehrabian Director
T. J. Usher Director
D. G. Vice Director
D. R. Whitwam Director
11
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of PPG
Industries, Inc.:
We have audited the consolidated balance sheet of PPG
Industries, Inc. and subsidiaries as of December 31,
2001 and 2000, and the related consolidated
statements of income, comprehensive income,
shareholders' equity and cash flows for each of the
three years in the period ended December 31, 2001,
and have issued our report thereon dated January 17,
2002; such consolidated financial statements and
report are included in your 2001 Annual Report to
Shareholders and are incorporated herein by
reference. Our audits also included consolidated
financial statement schedule II, Valuation and
Qualifying Accounts, of PPG Industries, Inc. and
subsidiaries for the years ended December 31, 2001,
2000 and 1999. The consolidated 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
consolidated financial statement schedule, when
considered in relation to the basic consolidated
financial statements taken as a whole, presents
fairly in all material respects the information set
forth therein.
/s/ DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
January 17, 2002
12
PPG Industries, Inc. and Subsidiaries
Schedule II--Valuation and Qualifying Accounts
For the Years Ended December 31, 2001, 2000 and 1999
Balance at Charged to
Beginning Costs and Balance at
Description of Year Expenses Deductions(/1/) End of Year
----------- ---------- ---------- --------------- -----------
(Millions)
2001
Deducted from assets to
which they apply:
Allowance for doubtful
accounts _____________ $37.4 $29.6 $22.7 $44.3
===== ===== ===== =====
2000
Deducted from assets to
which they apply:
Allowance for doubtful
accounts _____________ $25.7 $26.7 $15.0 $37.4
===== ===== ===== =====
1999
Deducted from assets to
which they apply:
Allowance for doubtful
accounts _____________ $20.6 $20.5 $15.4 $25.7
===== ===== ===== =====
---------------------
(/1/)Notes and accounts receivable written off as uncollectible, net of
recoveries, and changes attributable to foreign currency translation.
13
PPG Industries Inc.
and Consolidated Subsidiaries
Index to Exhibits
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 Statement with Respect to Shares, amending the Restated Articles of
Incorporation effective April 21, 1998 was filed as Exhibit 3.1 to
the Registrant's Form 10-K for the year ended December 31, 1998,
which exhibit is incorporated herein by reference.
3.2 The Bylaws, as amended, were filed as Exhibit 3 to the Registrant's
Form 10-Q for the quarter ended March 31, 2000, 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 February 19, 1998, which exhibit is
incorporated herein by reference.
4.1 Indenture, dated as of August 1, 1982, was filed as Exhibit 4.1 to
PPG's Registration Statement on Form S-3 (No. 333-44397) dated
January 16, 1998 (the "1998 Form S-3"), which exhibit is
incorporated herein by reference.
4.2 First Supplemental Indenture, dated as of April 1, 1986, was filed
as Exhibit 4.2 to the 1998 Form S-3, which exhibit is incorporated
herein by reference.
4.3 Second Supplemental Indenture, dated as of October 1, 1989, was
filed as Exhibit 4.3 to the 1998 Form S-3, which exhibit is
incorporated herein by reference.
4.4 Third Supplemental Indenture, dated as of November 1, 1995, was
filed as Exhibit 4.4 to the 1998 Form S-3, which exhibit is
incorporated herein by reference.
*10 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, which exhibit is incorporated
herein by reference. PPG Industries, Inc. Deferred Compensation Plan
for Directors was filed as Exhibit 10.3 to the Registrant's Form 10-
K for the year ended December 31, 1997, which exhibit is
incorporated herein by reference. PPG Industries, Inc. Incentive
Compensation and Deferred Income Plan for Key Employees, as amended,
was filed as Exhibit 10.1 to the Registrant's Form 10-Q for the
quarter ended March 31, 2000, which exhibit is incorporated herein
by reference. PPG Industries, Inc. Directors' Common Stock Plan, as
amended April 19, 2000, was filed as Exhibit 10.1 to the
Registrant's Form 10-K for the year ended December 31, 2000, which
exhibit is incorporated herein by reference. PPG Industries, Inc.
Executive Officers Annual Incentive Compensation Plan, dated as of
April 19, 2001, was filed as Exhibit 10.3 to the Registrant's Form
10-K for the year ended December 31, 2000, which exhibit is
incorporated herein by reference.
*10.1 PPG Industries, Inc. Nonqualified Retirement Plan dated as of
January 1, 1989, as amended February 21, 2002, was filed as Exhibit
10.1 to the Registrant's Form 10-K for the year ended December 31,
2001, which exhibit is incorporated herein by reference.
*10.2 PPG Industries, Inc. Deferred Compensation Plan, as amended
effective February 21, 2002, was filed as Exhibit 10.2 to the
Registrant's Form 10-K for the year ended December 31, 2001, which
exhibit is incorporated herein by reference.
*10.3 PPG Industries, Inc. Stock Plan, dated as of April 17, 1997, as
amended April 18, 2002, was filed as Exhibit 10.3 to the
Registrant's Form 10-K for the year ended December 31, 2001, which
exhibit is incorporated herein by reference.
*10.4 PPG Industries, Inc. Total Shareholder Return Plan for Key
Employees, as amended effective April 18, 2002, was filed as Exhibit
10.4 to the Registrant's Form 10-K for the year ended December 31,
2001, which exhibit is incorporated herein by reference.
*10.5 PPG Industries, Inc. Executive Officers' Total Shareholder Return
Plan, as amended effective April 18, 2002, was filed as Exhibit 10.5
to the Registrant's Form 10-K for the year ended December 31, 2001,
which exhibit is incorporated herein by reference.
12 Computation of Ratio of Earnings to Fixed Charges for the Five Years
Ended December 31, 2001.
13 Company's 2001 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 Independent Auditors' Consent.
24 Powers of Attorney.
* Items referred to in Exhibit 10, 10.1, 10.2, 10.3, 10.4 and 10.5 and
incorporated by reference are either management contracts, compensatory
plans or arrangements required to be filed as an exhibit hereto pursuant to
Item 601 of Regulation S-K.