PPG Industries 10-Q 2023-09-30

Filed 2023-10-19. 8 sections, 180K characters. Original on sec.gov · Markdown · JSON

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-Q

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☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 1-1687

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PPG INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

25-0730780

(I.R.S. Employer Identification No.)

Pennsylvania

(State or Other Jurisdiction of Incorporation or Organization)

One PPG Place, Pittsburgh, Pennsylvania

(Address of Principal Executive Offices)

15272

(Zip Code)

(412) 434-3131

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.66 2/3	PPG	New York Stock Exchange
0.875% Notes due 2025	PPG 25	New York Stock Exchange
1.875% Notes due 2025	PPG 25A	New York Stock Exchange
1.400% Notes due 2027	PPG 27	New York Stock Exchange
2.750% Notes due 2029	PPG 29A	New York Stock Exchange

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of September 30, 2023, 235.8 million shares of the Registrant’s common stock, par value $1.66 2/3 per share, were outstanding.

PPG INDUSTRIES, INC. AND SUBSIDIARIES

INDEX


		PAGE
Part I. Financial Information
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Statement of Income	2
	Condensed Consolidated Statement of Comprehensive Income	3
	Condensed Consolidated Balance Sheet	4
	Condensed Consolidated Statement of Shareholders' Equity	5
	Condensed Consolidated Statement of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
Part II. Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 5.	Other Information	35
Item 6.	Exhibits	35
Signatures		37

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PPG INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Income (Unaudited)


	Three Months Ended September 30		Nine Months Ended September 30
($ in millions, except per share amounts)	2023	2022	2023	2022
Net sales	$4,644	$4,468	$13,896	$13,467
Cost of sales, exclusive of depreciation and amortization	2,752	2,821	8,214	8,473
Selling, general and administrative	1,047	931	3,108	2,887
Depreciation	102	95	287	296
Amortization	40	40	121	125
Research and development, net	108	110	322	340
Interest expense	64	46	190	114
Interest income	(39)	(14)	(96)	(34)
Impairment and other related charges, net	—	—	—	230
Pension settlement charge	—	—	190	—

Other charges/(income), net	13	21	4	(26)

Income before income taxes	$557	$418	$1,556	$1,062
Income tax expense	121	79	350	252
Income from continuing operations	$436	$339	$1,206	$810
Loss from discontinued operations, net of tax	—	—	—	(2)
Net income attributable to controlling and noncontrolling interests	$436	$339	$1,206	$808
Net income attributable to noncontrolling interests	(10)	(10)	(26)	(20)
Net income (attributable to PPG)	$426	$329	$1,180	$788
Amounts attributable to PPG:
Income from continuing operations, net of tax	$426	$329	$1,180	$790
Loss from discontinued operations, net of tax	—	—	—	(2)
Net income (attributable to PPG)	$426	$329	$1,180	$788

Earnings per common share:
Income from continuing operations, net of tax	$1.80	$1.40	$5.00	$3.34
Loss from discontinued operations, net of tax	—	—	—	(0.01)
Earnings per common share (attributable to PPG)	$1.80	$1.40	$5.00	$3.33

Earnings per common share – assuming dilution:
Income from continuing operations, net of tax	$1.79	$1.39	$4.97	$3.33
Loss from discontinued operations, net of tax	—	—	—	(0.01)
Earnings per common share (attributable to PPG) - assuming dilution	$1.79	$1.39	$4.97	$3.32

The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.

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PPG INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Comprehensive Income (Unaudited)


	Three Months Ended September 30		Nine Months Ended September 30
($ in millions)	2023	2022	2023	2022
Net income attributable to controlling and noncontrolling interests	$436	$339	$1,206	$808
Other comprehensive (loss)/income, net of tax:
Defined benefit pension and other postretirement benefits	(1)	2	138	11
Unrealized foreign currency translation adjustments	(174)	(353)	199	(543)

Other comprehensive (loss)/income, net of tax	($175)	($351)	$337	($532)
Total comprehensive income/(loss)	$261	($12)	$1,543	$276
Less: amounts attributable to noncontrolling interests:
Net income	(10)	(10)	(26)	(20)
Unrealized foreign currency translation adjustments	2	7	1	16
Comprehensive income/(loss) attributable to PPG	$253	($15)	$1,518	$272

The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.

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PPG INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheet (Unaudited)


($ in millions)	September 30, 2023	December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$1,218	$1,099
Short-term investments	64	55
Receivables, net	3,612	3,303
Inventories	2,217	2,272
Other current assets	441	444
Total current assets	$7,552	$7,173
Property, plant and equipment (net of accumulated depreciation of $4,815 and $4,649)	3,406	3,328
Goodwill	6,181	6,078
I

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes thereto included in the condensed consolidated financial statements in Part I, Item 1, “Financial Statements,” of this report and in conjunction with the 2022 Form 10-K.

Highlights

Net sales were approximately $4.6 billion for the three months ended September 30, 2023, an increase of 3.9% compared to the prior year, driven by higher selling prices and favorable foreign currency translation, partially offset by lower sales volumes. The increase in Net sales was led by the aerospace coatings, automotive OEM coatings and PPG Comex businesses which were able to realize the benefit of strong demand. Sales volumes were negatively impacted in some businesses by soft global industrial production, including a slower than anticipated recovery in China.

Income before income taxes was $557 million for the three months ended September 30, 2023, an increase of $139 million compared to the prior year. This increase was primarily due to strong selling price realization and moderating raw material costs.

Results of Operations


	Three Months Ended September 30		Percent Change		Nine Months Ended September 30		Percent Change
($ in millions, except percentages)	2023	2022	2023 vs. 2022		2023	2022	2023 vs. 2022
Net sales	$4,644	$4,468	3.9	%	$13,896	$13,467	3.2	%
Cost of sales, exclusive of depreciation and amortization	$2,752	$2,821	(2.4)	%	$8,214	$8,473	(3.1)	%
Selling, general and administrative	$1,047	$931	12.5	%	$3,108	$2,887	7.7	%
Depreciation	$102	$95	7.4	%	$287	$296	(3.0)	%
Amortization	$40	$40	—	%	$121	$125	(3.2)	%
Research and development, net	$108	$110	(1.8)	%	$322	$340	(5.3)	%
Interest expense	$64	$46	39.1	%	$190	$114	66.7	%
Interest income	($39)	($14)	178.6	%	($96)	($34)	182.4	%
Impairment and other related charges, net	$—	$—	—	%	—	$230	(100.0)	%
Pension settlement charge	$—	$—	—	%	$190	$—	100.0	%

Other charges/(income), net	$13	$21	(38.1)	%	$4	($26)	(115.4)	%

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Net Sales by Region


	Three Months Ended September 30		Percent Change		Nine Months Ended September 30		Percent Change
($ in millions, except percentages)	2023	2022	2023 vs. 2022		2023	2022	2023 vs. 2022
United States and Canada	$1,941	$1,954	(0.7)	%	$5,776	$5,684	1.6	%
EMEA	1,393	1,286	8.3	%	4,341	4,236	2.5	%
Asia Pacific	733	734	(0.1)	%	2,116	2,120	(0.2)	%
Latin America	577	494	16.8	%	1,663	1,427	16.5	%
Total	$4,644	$4,468	3.9	%	$13,896	$13,467	3.2	%

Three Months Ended September 30, 2023

Net sales increased $176 million due to the following:

● Higher selling prices (+3%)

● Favorable foreign currency translation (+2%)

● Net acquisitions and divestitures (+1%)

Partially offset by:

● Lower sales volumes (-2%)

For specific business results, see the Performance of Reportable Business Segments section within Item 2 of this Form 10-Q.

Cost of sales, exclusive of depreciation and amortization, decreased $69 million primarily due to lower sales volumes and moderating raw material costs.

Selling, general and administrative expense increased $116 million primarily due to wage and other cost inflation and higher performance-based incentive compensation expense, partially offset by savings from previously approved restructuring actions.

Interest expense increased $18 million primarily due to the unfavorable impact of higher interest rates on PPG’s variable rate debt obligations. Interest income increased $25 million primarily due to higher interest rates.

Nine Months Ended September 30, 2023

Net sales increased $429 million due to the following:

● Higher selling prices (+5%)

Partially offset by:

● Lower sales volumes (-2%)

For specific business results, see the Performance of Reportable Business Segments section within Item 2 of this Form 10-Q.

Cost of sales, exclusive of depreciation and amortization, decreased $259 million primarily due to lower sales volumes and moderating raw material costs.

Selling, general and administrative expense increased $221 million primarily due to wage and other cost inflation and higher performance-based incentive compensation expense, partially offset by savings from previously approved restructuring actions.

Interest expense increased $76 million primarily due to the unfavorable impact of higher interest rates on PPG’s variable rate debt obligations. Interest income increased $62 million primarily due to higher interest rates.

Impairment and other related charges of $230 million were recorded in the nine months ended September 30, 2022 associated with the wind down of the Company's operations in Russia. Refer to Note 7, "Impairment and Other Related Charges, Net" in Part I, Item 1 of this Form 10-Q for additional information. There were no impairment charges recorded during 2023.

A Pension settlement charge of $190 million was recorded in the first quarter 2023 associated with the Company's purchase of group annuity contracts that transferred pension benefit obligations for certain of the Company’s

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retirees in the U.S. to third-party insurance companies. Refer to Note 10, "Pensions and Other Postretirement Benefits" in Part I, Item 1 of this Form 10-Q for additional information.

Effective Tax Rate and Earnings Per Diluted Share


	Three Months Ended September 30				Percent Change		Nine Months Ended September 30				Percent Change
($ in millions, except percentages and amounts per share)	2023		2022		2023 vs. 2022		2023		2022		2023 vs. 2022
Income tax expense	$121		$79		53.2	%	$350		$252		38.9	%
Effective tax rate	21.7	%	18.9	%	2.8	%	22.5	%	23.7	%	(1.2)	%
Adjusted effective tax rate, continuing operations*	19.5	%	19.9	%	(0.4)	%	22.0	%	21.7	%	0.3	%

Earnings per diluted share, continuing operations	$1.79		$1.39		28.8	%	$4.97		$3.33		49.2	%
Adjusted earnings per diluted share*	$2.07		$1.66		24.7	%	$6.15		$4.84		27.1	%
*See Regulation G Reconciliation below

The effective tax rate of 23.7% for the nine months ended September 30, 2022 reflected a tax benefit of $27 million on the $230 million net charges associated with PPG's operations in Russia.

Adjusted earnings per diluted share for the three and nine months ended September 30, 2023 increased year-over-year primarily due to increased selling prices and moderating raw material costs, partially offset by wage and other cost inflation and lower sales volumes.

Regulation G Reconciliations - Results from Operations

PPG believes investors’ understanding of the Company’s performance is enhanced by the disclosure of net income from continuing operations, earnings per diluted share from continuing operations, PPG’s effective tax rate and segment income adjusted for certain items. PPG’s management considers this information useful in providing insight into the Company’s ongoing performance because it excludes the impact of items that cannot reasonably be expected to recur on a quarterly basis or that are not attributable to our primary operations. Net income from continuing operations, earnings per diluted share from continuing operations, the effective tax rate and segment income adjusted for these items are not recognized financial measures determined in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and should not be considered a substitute for net income from continuing operations, earnings per diluted share from continuing operations, the effective tax rate, segment income or other financial measures as computed in accordance with U.S. GAAP. In addition, adjusted net income, adjusted earnings per diluted share and the adjusted effective tax rate may not be comparable to similarly titled measures as reported by other companies.

Income before income taxes from continuing operations is reconciled to adjusted income before income taxes from continuing operations, the effective tax rate from continuing operations is reconciled to the adjusted effective tax rate from continuing operations and net income from continuing operations (attributable to PPG) and earnings per share – assuming dilution (attributable to PPG) are reconciled to adjusted net income from continuing operations (attributable to PPG) and adjusted earnings per share – assuming dilution below.


	Three Months Ended September 30, 2023
($ in millions, except percentages and per share amounts)	Income Before Income Taxes	Income Tax Expense	Effective Tax Rate		Net Income (attributable to PPG)	Earnings Per Diluted Share(a)
As reported, continuing operations	$557	$121	21.7	%	$426	$1.79
Adjusted for:
Acquisition-related amortization expense	40	10	23.9	%	30	0.13
Business restructuring-related costs, net (b)	13	3	22.9	%	10	0.04
Transaction-related costs (c)	15	(12)	(77.2	%)	27	0.11
Adjusted, continuing operations, excluding certain items	$625	$122	19.5	%	$493	$2.07

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	Three Months Ended September 30, 2022
($ in millions, except percentages and per share amounts)	Income Before Income Taxes	Income Tax Expense	Effective Tax Rate		Net Income (attributable to PPG)	Earnings Per Diluted Share(a)
As reported, continuing operations	$418	$79	18.9	%	$329	$1.39
Adjusted for:
Acquisition-related amortization expense	40	10	24.6	%	30	0.13
Business restructuring-related costs, net (b)	45	11	25.4	%	34	0.14
Adjusted, continuing operations, excluding certain items	$503	$100	19.9	%	$393	$1.66


	Nine Months Ended September 30, 2023
($ in millions, except percentages and per share amounts)	Income Before Income Taxes	Tax Expense	Effective Tax Rate		Net Income (attributable to PPG)	Earnings per Diluted share(a)
As reported, continuing operations	$1,556	$350	22.5	%	$1,180	$4.97
Adjusted for:
Pension settlement charge (d)	190	46	24.2	%	144	0.61
Acquisition-related amortization expense	121	30	24.3	%	91	0.39
Business restructuring-related costs, net (b)	27	6	23.5	%	21	0.09
Transaction-related costs (c)	22	(10)	(45.2)	%	30	0.12
Insurance recovery of expenses incurred due to a natural disaster (e)	(9)	(2)	24.3	%	(7)	(0.03)
Adjusted, continuing operations, excluding certain items	$1,907	$420	22.0	%	$1,459	$6.15


	Nine Months Ended September 30, 2022
($ in millions, except percentages and per share amounts)	Income Before Income Taxes	Tax Expense	Effective Tax Rate		Net Income (attributable to PPG)	Earnings per Diluted share(a)
As reported, continuing operations	$1,062	$252	23.7	%	$790	$3.33
Adjusted for:
Impairment and other related (income)/charges, net (f)	230	27	11.7	%	203	0.85
Acquisition-related amortization expense	125	30	24.0	%	95	0.40
Business restructuring-related costs, net (b)	67	17	25.4	%	50	0.21
Transaction-related costs (c)	10	(2)	(20.0)	%	12	0.05
Adjusted, continuing operations, excluding certain items	$1,494	$324	21.7	%	$1,150	$4.84

(a)Earnings per diluted share is calculated based on unrounded numbers. Figures in the table may not recalculate due to rounding.

(b)Included in business restructuring-related costs, net are business restructuring charges, accelerated depreciation of certain assets and other related costs, offset by releases related to previously approved programs.

(c)Transaction-related costs include losses on the sale of certain assets, which are included in Other charges/(income), net in the condensed consolidated statement of income, including the loss recognized in the third quarter 2023 on the sale of the Company’s legacy industrial Russian operations, resulting primarily from the recognition of accumulated foreign currency translation losses upon the divestiture. Transaction-related costs also include advisory, legal, accounting, valuation, other professional or consulting fees, and certain internal costs directly incurred to effect acquisitions, which are included in Selling, general and administrative expense in the condensed consolidated statement of income, and the impact for the step up to fair value of inventory acquired in certain acquisitions, which is included in Cost of sales, exclusive of depreciation and amortization in the condensed consolidated statement of income.

(d)In the first quarter 2023, PPG purchased group annuity contracts that transferred pension benefit obligations for certain of the Company’s retirees in the U.S. to third-party insurance companies, resulting in a non-cash pension settlement charge.

(e)The Company incurred expenses due to damages at a southern U.S. factory resulting from a winter storm in 2020. In the first quarter 2023, the Company received reimbursement under its insurance policies related to the damages incurred at this factory due to this storm.

(f)In 2022, the Company recorded impairment and other related charges due to the wind down of the Company’s operations in Russia.

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Performance of Reportable Business Segments

Performance Coatings


	Three Months Ended September 30		$ Change	% Change		Nine Months Ended September 30		$ Change	% Change
($ in millions, except percentages)	2023	2022	2023 vs. 2022	2023 vs. 2022		2023	2022	2023 vs. 2022	2023 vs. 2022
Net sales	$2,880	$2,705	$175	6.5	%	$8,549	$8,204	$345	4.2	%
Segment income	$452	$362	$90	24.9	%	$1,384	$1,127	$257	22.8	%
Amortization expense	$28	$30	($2)	(6.7)	%	$87	$93	($6)	(6.5)	%
Segment income, excluding amortization expense	$480	$392	$88	22.4	%	$1,471	$1,220	$251	20.6	%

Three Months Ended September 30, 2023

Performance Coatings net sales increased due to the following:

● Higher selling prices (+3%)

● Favorable foreign currency translation (+3%)

Architectural coatings – EMEA net sales, excluding the impact of currency, acquisitions, divestitures and the wind down of Russia operations ("organic sales") increased a low single digit percentage year over year, with higher selling prices partially offset by lower sales volumes. Year-over-year sales volumes are approaching prior year levels as demand for architectural coatings products is stabilizing at lower absolute levels. While aggregate demand remains at lower levels and uneven by country, sales were robust in certain countries during the third quarter.

Automotive refinish coatings organic sales were slightly higher year over year. Price gains in all regions and sales volume growth in the EMEA and Asia-Pacific regions were partially offset by lower sales volumes in the U.S., primarily due to shifting order patterns from certain U.S. distribution customers. In the U.S., body shop activity remains solid, with backlogs in the U.S. beginning to normalize closer to historical levels as supply chain conditions improve. In Europe, sales volumes were solidly above third quarter 2022 levels as demand from distributors rebounded. In China, demand for PPG refinish products continues to recover.

Aerospace coatings organic sales were higher by a mid-teen percentage driven by increases in both price and volume. This strong organic sales growth was achieved despite global air travel remaining below pre-pandemic levels. Demand remained strong in all major product categories throughout the quarter.

Protective and marine coatings organic sales increased by a mid-single-digit percentage driven by solid selling price realization and higher sales volumes. The third quarter was the second consecutive quarter with positive year-over-year sales volume growth.

Traffic solutions organic sales decreased by a mid-single-digit percentage compared to the same quarter last year, with sales volume declines in all regions. In the U.S., the Company continues to prioritize higher margin business.

Segment income increased $90 million versus the prior year primarily due to higher selling prices and moderating year over year input costs.

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Nine Months Ended September 30, 2023

Performance Coatings net sales increased due to the following:

● Higher selling prices (+6%)

Partially offset by:

● Lower sales volumes (-2%)

Architectural coatings – EMEA organic sales were flat year over year as selling price increases were offset by lower sales volumes. Demand for architectural coatings products in many countries decreased stemming from reduced remodeling activity and lower consumer confidence due to continued geopolitical issues in Europe. However, demand for architectural coatings products is beginning to stabilize at lower absolute levels.

Architectural coatings - Americas and Asia Pacific organic sales increased by a low single-digit percentage. Solid organic growth at PPG Comex was partially offset by lower demand for DIY products in the U.S. and Canada. In Mexico, PPG Comex architectural coatings organic sales increased compared to the prior year driven by selling price increases and continued strong demand in the concessionaire network.

Automotive refinish coatings organic sales increased by a low single-digit percentage year over year as selling price increases in all regions more than offset lower sales volumes.

Aerospace coatings organic sales increased significantly year over year with strength in all regions driven by double-digit increases in both selling price and sales volume.

Protective and marine coatings organic sales increased by a mid-single-digit percentage primarily due to selling price increases in all regions and strong demand in Europe, the U.S. and Latin America.

Traffic solutions organic sales decreased by a mid-single-digit percentage as higher selling prices in all regions were more than offset by lower sales volumes.

Segment income increased $257 million versus the prior year primarily due to higher selling prices and moderating year over year input costs, which more than offset lower sales volumes.

Looking Ahead

In the fourth quarter, demand for aerospace coatings and PPG Comex products is expected to remain robust. Demand conditions in Europe and for architectural DIY globally are anticipated to remain at lower levels. Raw material and transportation availability continue to broadly improve. Aggregate organic sales for the Performance Coatings segment are anticipated to increase by a low single-digit percentage compared to the fourth quarter 2022.

Industrial Coatings


	Three Months Ended September 30		$ Change	% Change		Nine Months Ended September 30		$ Change	% Change
($ in millions, except percentages)	2023	2022	2023 vs. 2022	2023 vs. 2022		2023	2022	2023 vs. 2022	2023 vs. 2022
Net sales	$1,764	$1,763	$1	0.1	%	$5,347	$5,263	$84	1.6	%
Segment income	$246	$192	$54	28.1	%	$736	$488	$248	50.8	%
Amortization expense	$12	$10	$2	20.0	%	$34	$32	$2	6.3	%
Segment income, excluding amortization expense	$258	$202	$56	27.7	%	$770	$520	$250	48.1	%

Three Months Ended September 30, 2023

Industrial Coatings segment net sales increased due to the following:

● Higher selling prices (+2%)

● Favorable foreign currency translation (+1%)

● Net acquisitions and divestitures (+1%)

Partially offset by:

● Lower sales volumes (-4%)

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Automotive OEM coatings organic sales increased by a low single-digit percentage year over year driven by higher selling prices in all regions and strong sales volume growth in most regions. The United Auto Workers labor actions had a minor impact on the Company's third quarter net sales in the U.S.

In the industrial coatings business, organic sales decreased by a mid-single-digit percentage year over year as higher selling prices partially offset lower sales volumes in Europe and China due to softer general industrial production. Sales volumes were negatively impacted by lower demand in the wood, consumer electronics and general finishes subsegments.

Packaging coatings organic sales decreased by a high-single-digit percentage primarily due to lower demand in all regions driven by lower demand in the metal packaged food and beverage markets.

Specialty coatings and materials organic sales decreased by a mid-single-digit percentage primarily due to lower sales volumes, partially offset by higher selling prices.

Segment income increased $54 million versus the prior year primarily due to higher selling prices and moderating year over year raw material costs, partially offset by lower sales volumes.

Nine Months Ended September 30, 2023

Industrial Coatings segment net sales increased due to the following:

● Higher selling prices (+5%)

● Net acquisitions and divestitures (+1%)

Partially offset by:

● Lower sales volumes (-3%)

● Unfavorable foreign currency translation (-1%)

Automotive OEM coatings organic sales increased by a high single-digit percentage year over year driven by higher selling prices and strong sales volume growth in all regions. Sales volume growth was led by the EMEA and Asia-Pacific regions, where retail sales and industry build rates remain robust compared to a weak prior-year base.

In the industrial coatings business, organic sales decreased by a mid-single-digit percentage year over year as higher selling prices were more than offset by lower sales volumes in all regions due to softening global industrial demand.

Packaging coatings organic sales decreased by a mid-single-digit percentage year over year due to lower sales volume in all regions driven by broad demand weakness. These sales volumes decreases were partially offset by higher selling prices in most regions.

Specialty coatings and materials organic sales decreased by a mid-single-digit percentage primarily due to lower sales volumes, partially offset by higher selling prices.

Segment income increased $248 million versus the prior year primarily due to higher selling prices and moderating year over year raw material costs, which more than offset lower sales volumes.

Looking Ahead

In the fourth quarter, global industrial production is expected to remain at lower levels. Aggregate organic sales are anticipated to decrease by a low single-digit percentage compared to the fourth quarter 2022. Similar to the third quarter, automotive industry build rates and retail activity are expected to continue to be solid while other industrial production end-use markets are expected to be soft, including softness in the industrial coatings, packaging coatings, and the specialty coatings and materials businesses. The duration and scope of the automotive industry labor actions in the fourth quarter could result in incrementally higher impacts to the Company sales and earnings; although, the overall exposure for the Company is a small percentage of total revenue. In the fourth quarter 2023, the pricing gains realized in 2022 will reach their anniversary.

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Liquidity and Capital Resources

PPG had cash and short-term investments totaling $1.3 billion and $1.2 billion at September 30, 2023 and December 31, 2022, respectively.

The Company continues to believe that cash on hand and short-term investments, cash from operations and the Company's access to capital markets will be sufficient to fund our operating activities, capital spending, acquisitions, dividend payments, debt service, share repurchases, contributions to pension plans and contractual obligations.

Cash from operating activities

Cash from operating activities for the nine months ended September 30, 2023 and 2022 was $1,513 million and $376 million, respectively. The $1,137 million increase was primarily due to higher net income driven by higher selling prices and moderating raw material costs and favorable changes in working capital compared to the prior year.

Operating Working Capital

Operating working capital is a subset of total working capital and represents (1) trade receivables – net of the allowance for doubtful accounts (2) FIFO inventories and (3) trade liabilities. We believe operating working capital represents the key components of working capital under the operating control of our businesses. A key metric we use to measure our working capital management is operating working capital as a percentage of sales (current quarter sales annualized).


($ in millions, except percentages)	September 30, 2023		December 31, 2022		September 30, 2022
Trade receivables, net	$3,213		$2,824		$3,040
Inventories, FIFO	2,479		2,544		2,671
Trade creditors’ liabilities	(2,491)		(2,538)		(2,717)
Operating working capital	$3,201		$2,830		$2,994
Operating working capital as a % of sales	17.2	%	16.9	%	16.8	%
Days sales outstanding	57		56		57

Environmental


	Three Months Ended September 30		Nine Months Ended September 30
($ in millions)	2023	2022	2023	2022
Cash outlays for environmental remediation activities	$12	$18	$28	$65


($ in millions)			Remainder of 2023						Annually 2024 - 2027
Projected future cash outlays for environmental remediation activities			$10 - $20						$20 - $75

Cash used for investing activities

Cash used for investing activities for the nine months ended September 30, 2023 and 2022 was $399 million and $246 million, respectively. The $153 million increase in cash used for investing activities was primarily due to higher spending on business acquisitions and lower proceeds from asset sales.

Total capital spending in 2023 is expected to be approximately $575 million in support of future organic growth opportunities.

Cash used for financing activities

Cash used for financing activities for the nine months ended September 30, 2023 and 2022 was $1,005 million and $56 million, respectively. The $949 million increase was primarily due to repayments of long-term debt and lower proceeds from the issuance of debt, partially offset by the absence of net payments on commercial paper.

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Credit Agreements

In April 2023, PPG entered into a €500 million term loan credit agreement (the "Term Loan"). The Term Loan provides the Company with the ability to increase the size of the loan by an amount not to exceed €250 million. The Term Loan contains covenants that are consistent with those in the Credit Agreement discussed below and that are usual and customary restrictive covenants for facilities of its type, which include, with specified exceptions, limitations on the Company’s ability to create liens or other encumbrances, to enter into sale and leaseback transactions and to enter into consolidations, mergers or transfers of all or substantially all of its assets. The Term Loan terminates and all amounts outstanding are payable in April 2026. In April 2023, PPG borrowed €500 million under the Term Loan.

In February 2021, PPG entered into a $2.0 billion term loan credit agreement (the "Term Loan Credit Agreement") to finance the Company’s acquisition of Tikkurila, and to pay fees, costs and expenses related thereto. The Term Loan Credit Agreement provided the Company with the ability to borrow up to an aggregate principal amount of $2.0 billion on an unsecured basis. In addition to the amounts borrowed to finance the acquisition of Tikkurila, the Term Loan Credit Agreement allowed the Company to make up to eleven additional borrowings prior to December 31, 2021, to be used for working capital and general corporate purposes. The Term Loan Credit Agreement contains covenants that are consistent with those in the Credit Agreement discussed below and that are usual and customary restrictive covenants for facilities of its type, which include, with specified exceptions, limitations on the Company’s ability to create liens or other encumbrances, to enter into sale and leaseback transactions and to enter into consolidations, mergers or transfers of all or substantially all of its assets. The Term Loan Credit Agreement matures and all outstanding borrowings are due and payable on the third anniversary of the date of the initial borrowing under the Agreement. In March 2023, PPG amended the Term Loan Credit Agreement to replace the LIBOR-based reference interest rate option with a reference interest rate option based upon Term Secured Overnight Financing Rate ("SOFR"). The other terms of the Term Loan Credit Agreement remain unchanged. In June 2021, PPG borrowed $700 million under the Term Loan Credit Agreement to finance the Company’s acquisition of Tikkurila, and to pay fees, costs and expenses related thereto. In December 2021, PPG borrowed an additional $700 million under the Term Loan Credit Agreement. In 2022 and 2023, PPG repaid $300 million and $800 million, respectively, of the Term Loan Credit Agreement using cash on hand. Borrowings of $300 million and $1.1 billion were outstanding under the Term Loan Credit Agreement as of September 30, 2023 and December 31, 2022, respectively.

In March 2023, PPG amended its five-year credit agreement (the “Credit Agreement”) dated as of August 30, 2019. The amendments to the Credit Agreement replace the LIBOR-based reference interest rate option with a reference interest rate option based upon Term SOFR. The other terms of the Credit Agreement remain unchanged. In July 2023, PPG amended and restated the Credit Agreement, extending the term through July 27, 2028. The amended and restated Credit Agreement provides for a $2.3 billion unsecured revolving credit facility. The Company has the ability to increase the size of the Credit Agreement by up to an additional $750 million, subject to the receipt of lender commitments and other conditions precedent. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement. There were no amounts outstanding under the Credit Agreement as of September 30, 2023 and December 31, 2022.

The Term Loan, Term Loan Credit Agreement and Credit Agreement require the Company to maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Term Loan, Term Loan Credit Agreement and Credit Agreement, of 60% or less; provided, that for any fiscal quarter in which the Company has made an acquisition for consideration in excess of $1 billion and for the next five fiscal quarters thereafter, the ratio of Total Indebtedness to Total Capitalization may not exceed 65% at any time. As of September 30, 2023, Total Indebtedness to Total Capitalization as defined under the Term Loan, Term Loan Credit Agreement and Credit Agreement was 43%.

The Credit Agreement also supports the Company’s commercial paper borrowings which are classified as long-term based on PPG’s intent and ability to refinance these borrowings on a long-term basis. There were no commercial paper borrowings outstanding as of September 30, 2023 and December 31, 2022.

Other Debt Issued and Repaid

In March 2023, PPG's $300 million 3.2% notes matured, and the Company repaid this obligation using cash on hand.

In May 2022, PPG completed a public offering of €300 million 1.875% Notes due 2025 and €700 million 2.750% Notes due 2029. Refer to Note 6, “Borrowings” in Part I, Item 1 of this Form 10-Q for additional information.

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In March 2022, PPG privately placed a 15-year €50 million 1.95% fixed interest note. Refer to Note 6, “Borrowings” in Part I, Item 1 of this Form 10-Q for additional information.

Other Liquidity Information

Restructuring

Aggregate restructuring savings, including the impact of acquisition synergies, were approximately $15 million in the third quarter 2023. Total restructuring savings are expected to be at least $60 million in 2023. In addition, the Company continues to review its cost structure to identify additional cost savings opportunities. Refer to Note 5, “Business Restructuring” in Part I, Item 1 of this Form 10-Q for further details on the Company's business restructuring programs. We expect cash outlays related to these actions of $60 million to $70 million in 2023.

Currency

Comparing spot exchange rates at December 31, 2022 and at September 30, 2023, the U.S. dollar weakened against the currencies of many countries within the regions PPG operates, most notably the Mexican peso. As a result, consolidated net assets at September 30, 2023 increased by $200 million compared to December 31, 2022.

Comparing average exchange rates during the first nine months of 2023 to those of the first nine months of 2022, the U.S. dollar weakened against the currencies of certain countries where PPG operates, including the Mexican peso and the euro, partially offset by strengthening against the Chinese yuan. The weakening of the U.S. dollar had a favorable impact on Income before income taxes for the nine months ended September 30, 2023 of $11 million from the translation of these foreign earnings into U.S. dollars.

New Accounting Standards

Refer to Note 2, “New Accounting Standards” in Part I, Item 1 of this Form 10-Q for further details on recently issued accounting guidance.

Commitments and Contingent Liabilities, including Environmental Matters

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. See Part II, Item 1, “Legal Proceedings” of this Form 10-Q and Note 14, “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form 10-Q for a description of certain of these lawsuits.

As discussed in Part II, Item 1 and Note 14, although the result of any future litigation of such lawsuits and claims is inherently unpredictable, management believes that, in the aggregate, the outcome of all lawsuits and claims involving PPG, including asbestos-related claims, will not have a material effect on PPG’s consolidated financial position or liquidity; however, any such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized.

As also discussed in Note 14, PPG has significant reserves for environmental contingencies. Refer to the Environmental Matters section of Note 14 for details of these reserves. It is PPG’s policy to accrue expenses for contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Reserves for environmental contingencies are exclusive of claims against third parties and are generally not discounted. In management’s opinion, the Company operates in an environmentally sound manner and the outcome of the Company’s environmental contingencies will not have a material effect on PPG’s financial position or liquidity; however, any such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized. Management anticipates that the resolution of the Company’s environmental contingencies will occur over an extended period of time.

Critical Accounting Estimates

Management has evaluated the accounting policies used in the preparation of the financial statements and related notes presented in this Form 10-Q and believes those policies to be reasonable and appropriate. We believe that the most critical accounting estimates made in the preparation of our financial statements are those related to accounting for contingencies, under which we accrue a loss when it is probable that a liability has been incurred and the amount can be reasonably estimated, and to accounting for pensions, other postretirement benefits, business combinations, goodwill and other identifiable intangible assets with indefinite lives because of the importance of management judgment in making the estimates necessary to apply these policies.

For a comprehensive discussion of the Company’s critical accounting estimates, see Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2022 Form 10-K. There were no material changes in the Company’s critical accounting estimates from the 2022 Form 10-K.

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Forward-Looking Statements

Management’s Discussion and Analysis and other sections of this Quarterly Report contain forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. You can identify forward-looking statements by the fact that they do not relate strictly to current or historic facts. Forward-looking statements are identified by the use of the words “aim,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “outlook,” “forecast,” "looking ahead" and other expressions that indicate future events and trends. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward looking statement, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our reports to the Securities and Exchange Commission ("SEC"). Also, note the following cautionary statements.

Many factors could cause actual results to differ materially from the Company’s forward-looking statements. Such factors include statements related to the expected effects on our business of COVID-19, global economic conditions, geopolitical issues in Europe, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, energy, labor and logistics, the ability to achieve selling price increases, the ability to recover margins, customer inventory levels, PPG inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, the timing and expected benefits of our acquisitions, difficulties in integrating acquired businesses and achieving expected synergies therefrom, the amount of future share repurchases, economic and political conditions in the markets we serve, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, the unpredictability of existing and possible future litigation, including asbestos litigation, and government investigations. However, it is not possible to predict or identify all such factors.

Consequently, while the list of factors presented here and in the 2022 Form 10-K under Item 1A is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements.

Consequences of material differences in the results compared with those anticipated in the forward-looking statements could include, among other things, lower sales or income, business disruption, operational problems, financial loss, legal liability to third parties, other factors set forth in Item 1A of the 2022 Form 10-K and similar risks, any of which could have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Risk

We conduct operations in many countries around the world. Our results of operations are subject to both currency transaction risk and currency translation risk. Certain foreign currency forward contracts outstanding during 2023 and 2022 served as a hedge of a portion of PPG’s exposure to foreign currency transaction risk. The fair value of these contracts was a net liability of $18 million and a net asset $24 million as of September 30, 2023 and December 31, 2022, respectively. The potential reduction in PPG's Income before income taxes resulting from the impact of adverse changes in exchange rates on the fair value of its outstanding foreign currency hedge contracts of 10% for European and Canadian currencies and 20% for Asian and Latin American currencies was $350 million for the nine months ended September 30, 2023 and $304 million for the year ended December 31, 2022.

PPG had U.S. dollar to euro cross currency swap contracts with a total notional amount of $475 million and $775 million as of September 30, 2023 and December 31, 2022, respectively. The fair value of these contracts were net assets of $50 million and $88 million as of September 30, 2023 and December 31, 2022, respectively. A 10% increase in the value of the euro to the U.S. dollar would have had an unfavorable effect on the fair value of these swap contracts by reducing the value of these instruments by $43 million and $73 million at September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023 and December 31, 2022, PPG had non-U.S. dollar denominated borrowings outstanding of $3.1 billion and $2.6 billion, respectively. A weakening of the U.S. dollar by 10% against European currencies and by 20% against Asian and South American currencies would have resulted in unrealized translation losses on these borrowings of $350 million at September 30, 2023 and $293 million at December 31, 2022.

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Interest Rate Risk

The Company manages its interest rate risk by balancing its exposure to fixed and variable rates while attempting to minimize its interest costs. PPG has interest rate swaps which converted $375 million and $525 million of fixed rate debt to variable rate debt as of September 30, 2023 and December 31, 2022, respectively. The fair values of these contracts was a liability of $27 million and $20 million as of September 30, 2023 and December 31, 2022, respectively. An increase in variable interest rates of 10% would have lowered the fair values of these swaps and increased interest expense by $7 million for both the nine months ended September 30, 2023 and the year ended December 31, 2022. A 10% increase in interest rates in the U.S., Canada, Mexico and Europe and a 20% increase in interest rates in Asia and South America would have increased annual interest expense associated with PPG's variable rate debt obligations by $4 million for both the nine months ended September 30, 2023 and the year ended December 31, 2022. Further, a 10% reduction in interest rates would have increased the fair value of the Company's fixed rate debt by approximately $102 million and $116 million at September 30, 2023 and December 31, 2022, respectively; however, such changes would not have had an effect on PPG's Income before income taxes or cash flows.

There were no other material changes in the Company’s exposure to market risk from December 31, 2022 to September 30, 2023. Refer to Note 12, “Financial Instruments, Hedging Activities and Fair Value Measurements” in Part I, Item 1 of this Form 10-Q for a description of our instruments subject to market risk.

Item 4. Controls and Procedures

a. Evaluation of disclosure controls and procedures. Based on their evaluation as of the end of the period covered by this Form 10-Q, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

b. Changes in internal control over financial reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. 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 may relate to contract, patent, environmental, product liability, asbestos exposure, antitrust, employment, securities and other matters arising out of the conduct of PPG’s current and past business activities. To the extent these lawsuits and claims involve personal injury, property damage and certain other claims, PPG believes it has adequate insurance; however, certain of PPG’s insurers are contesting coverage with respect to some of these claims, and other insurers may contest coverage. 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.

From the late 1880’s until the early 1970’s, PPG owned property located in Cadogan and North Buffalo Townships, Pennsylvania which was used for the disposal of solid waste from PPG’s former glass manufacturing facility in Ford City, Pennsylvania. In October 2018, the Pennsylvania Department of Environmental Protection (the “DEP”) approved PPG’s cleanup plan for the Cadogan Property. In April 2019, PPG and the DEP entered into a consent order and agreement (“CO&A”) which incorporated PPG’s approved cleanup plan and a draft final permit for the collection and discharge of seeps emanating from the former disposal area. The CO&A includes a civil penalty of $1.2 million for alleged past unauthorized discharges. PPG’s former disposal area is also the subject of a citizens’ suit filed by the Sierra Club and PennEnvironment seeking remedial measures beyond the measures specified in PPG’s approved cleanup plan, a civil penalty in addition to the penalty included in the CO&A and plaintiffs’ attorneys fees. PPG and the plaintiffs settled plaintiffs’ claims for injunctive relief and PPG agreed to enhancements to the DEP approved cleanup plan and a $250,000 donation to a Pennsylvania nonprofit organization. This settlement has been memorialized by an amendment to the CO&A which was appended to a Consent Agreement between PPG and the plaintiffs which has been entered by the federal court. The remaining claims in the case for attorneys’ fees

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and a civil penalty are not affected by this settlement. PPG believes that the remaining claims are without merit and intends to defend itself against these claims vigorously.

For many years, PPG has been a defendant in lawsuits involving claims alleging personal injury from exposure to asbestos. For a description of asbestos litigation affecting the Company, see Note 14, “Commitments and Contingent Liabilities” in Part I, Item 1 of this Form 10-Q.

In the past, the Company and others have been named as defendants in several cases in various jurisdictions claiming damages related to exposure to lead and remediation of lead-based coatings applications. PPG has been dismissed as a defendant from most of these lawsuits and has never been found liable in any of these cases. After having not been named in a new lead-related lawsuit for 15 years, PPG was named as a defendant in two Pennsylvania state court lawsuits filed by the Counties of Montgomery and Lehigh on October 4, 2018 and October 12, 2018, respectively. Both suits seek declaratory relief arising out of alleged public nuisances in the counties associated with the presence of lead paint on various buildings constructed prior to 1980. By Opinion and Order dated May 5, 2023, the Pennsylvania Commonwealth Court reversed both lower trial courts, unanimously ruling the Counties failed to plead valid causes of action, and remanding both cases to their respective trial courts for dismissal. On June 5, 2023, the Counties filed Petitions for Allowance of Appeal with the Pennsylvania Supreme Court. Acceptance of such Petitions is discretionary. The Company continues to believe these actions are without merit and intends to defend itself vigorously until the Counties have exhausted their appellate options.

Item 1A. Risk Factors

There were no material changes in the Company’s risk factors from the risks disclosed in the 2022 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

No shares were repurchased in the three months ended September 30, 2023 under the current $2.5 billion share repurchase program approved in December 2017. The maximum number of shares that may yet be purchased under this program is 8,553,947 shares as of September 30, 2023. This repurchase program has no expiration date.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the three months ended September 30, 2023, none of the Company's directors or officers, as defined in Section 16 of the Securities Exchange Act of 1934, adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K of the Securities Exchange Act of 1934.

Item 6. Exhibits

See the Index to Exhibits on page 36.

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PPG INDUSTRIES, INC. AND SUBSIDIARIES

Index to Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Form 10-Q.


10.1						Five Year Credit Agreement dated as of July 27, 2023 among PPG Industries, Inc.; the several banks and financial institutions party thereto; JPMorgan Chase Bank, N.A., as administrative agent; JPMorgan Chase Bank, N.A., PNC Capital Markets LLC, BNP Paribas Securities Corp, and Citibank, N.A. as joint lead arrangers and joint bookrunners; PNC Bank, National Association, BNP Paribas, and Citibank, N.A., as co-syndication agents; and Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, Banco Santander, S.A., New York Branch, Bank of America, N.A., Goldman Sachs Bank USA, HSBC Bank USA, National Association, Intesa Sanpaolo S.P.A., New York Branch, Societe Generale, Sumitomo Mitsui Banking Corporation, The Toronto-Dominion Bank, New York Branch, Unicredit Bank AG, New York Branch, U.S. Bank National Association, and Wells Fargo Bank, National Association, as co-documentation agents, was filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on July 31, 2023.***
†31.1						Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
†31.2						Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
††32.1						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
††32.2						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						Inline XBRL Instance Document
101.SCH**						Inline XBRL Taxonomy Extension Schema Document
101.CAL**						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF**						Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**						Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**						Inline XBRL Taxonomy Extension Presentation Linkbase Document
104						Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

† Filed herewith.

†† Furnished herewith.

*The instance document does not appear in the Interactive Data File because its XBRL (Extensible Business Reporting Language) tags are embedded within the Inline XBRL document.

**Attached as Exhibit 101 to this report are the following documents formatted in Inline XBRL: (i) the Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2023 and 2022, (ii) the Condensed Consolidated Balance Sheet at September 30, 2023 and December 31, 2022, (iii) the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2023 and 2022, and (iv) Notes to Condensed Consolidated Financial Statements for the nine months ended September 30, 2023.

*** Certain schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company undertakes to furnish supplemental copies of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements 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.


			PPG INDUSTRIES, INC.
			(Registrant)

Date:	October 19, 2023	By:	/s/ Vincent J. Morales
			Vincent J. Morales
			Senior Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer)

		By:	/s/ Brian R. Williams
			Brian R. Williams
			Vice President and Controller (Principal Accounting Officer and Duly Authorized Officer)