filings.toolsItem 1. Financial Statements
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Item 1. Financial Statements
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Income (Unaudited)
| Three Months Ended March 31 | |||||||||||
| ($ in millions, except per share amounts) | 2026 | 2025 | |||||||||
| Net sales | $3,930 | $3,684 | |||||||||
| Cost of sales, exclusive of depreciation and amortization | 2,275 | 2,142 | |||||||||
| Selling, general and administrative | 885 | 838 | |||||||||
| Depreciation | 105 | 89 | |||||||||
| Amortization | 27 | 32 | |||||||||
| Research and development, net | 113 | 102 | |||||||||
| Interest expense | 61 | 56 | |||||||||
| Interest income | (37) | (43) | |||||||||
| Other income, net | (16) | (34) | |||||||||
| Income before income taxes | $517 | $502 | |||||||||
| Income tax expense | 132 | 122 | |||||||||
| Income from continuing operations | $385 | $380 | |||||||||
| Loss from discontinued operations, net of tax | — | (2) | |||||||||
| Net income attributable to controlling and noncontrolling interests | $385 | $378 | |||||||||
| Net income attributable to noncontrolling interests | (3) | (5) | |||||||||
| Net income (attributable to PPG) | $382 | $373 | |||||||||
| Amounts attributable to PPG: | |||||||||||
| Income from continuing operations, net of tax | $382 | $375 | |||||||||
| Loss from discontinued operations, net of tax | — | (2) | |||||||||
| Net income (attributable to PPG) | $382 | $373 | |||||||||
| Earnings per common share: | |||||||||||
| Income from continuing operations, net of tax | $1.71 | $1.64 | |||||||||
| Loss from discontinued operations, net of tax | — | (0.01) | |||||||||
| Earnings per common share (attributable to PPG) | $1.71 | $1.63 | |||||||||
| Earnings per common share – assuming dilution: | |||||||||||
| Income from continuing operations, net of tax | $1.70 | $1.64 | |||||||||
| Loss from discontinued operations, net of tax | — | (0.01) | |||||||||
| Earnings per common share (attributable to PPG) - assuming dilution | $1.70 | $1.63 |
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Net income attributable to controlling and noncontrolling interests | $385 | $378 | |||||||||
| Other comprehensive (loss)/income, net of tax: | |||||||||||
| Defined benefit pension and other postretirement benefits | (2) | (5) | |||||||||
| Unrealized foreign currency translation adjustments | (6) | 281 | |||||||||
| Other comprehensive (loss)/income, net of tax: | ($8) | $276 | |||||||||
| Total comprehensive income | $377 | $654 | |||||||||
| Less: amounts attributable to noncontrolling interests: | |||||||||||
| Net income | (3) | (5) | |||||||||
| Unrealized foreign currency translation adjustments | 6 | (1) | |||||||||
| Comprehensive income attributable to PPG | $380 | $648 |
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet (Unaudited)
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $1,573 | $2,163 | |||||||||
| Short-term investments | 51 | 56 | |||||||||
| Receivables, net | 3,676 | 3,336 | |||||||||
| Inventories | 2,162 | 1,996 | |||||||||
| Other current assets | 508 | 408 | |||||||||
| Total current assets | $7,970 | $7,959 | |||||||||
| Property, plant and equipment (net of accumulated depreciation of $4,777 and $4,724) | 3,995 | 4,005 | |||||||||
| Goodwill | 6,152 | 6,149 | |||||||||
| Identifiable intangible assets, net | 1,960 | 1,971 | |||||||||
| Deferred income taxes | 499 | 481 | |||||||||
| Investments | 346 | 332 | |||||||||
| Operating lease right-of-use assets | 603 | 604 | |||||||||
| Other assets | 625 | 597 | |||||||||
| Total assets | $22,150 | $22,098 | |||||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $4,001 | $3,957 | |||||||||
| Restructuring reserves | 78 | 99 | |||||||||
| Short-term debt and current portion of long-term debt | 736 | 706 | |||||||||
| Current portion of operating lease liabilities | 138 | 138 | |||||||||
| Total current liabilities | $4,953 | $4,900 | |||||||||
| Long-term debt | 6,407 | 6,602 | |||||||||
| Operating lease liabilities | 449 | 450 | |||||||||
| Accrued pensions | 550 | 550 | |||||||||
| Other postretirement benefits | 390 | 392 | |||||||||
| Deferred income taxes | 496 | 457 | |||||||||
| Other liabilities | 651 | 650 | |||||||||
| Total liabilities | $13,896 | $14,001 | |||||||||
| Commitments and contingent liabilities (Note 13) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Common stock | $969 | $969 | |||||||||
| Additional paid-in capital | 1,354 | 1,325 | |||||||||
| Retained earnings | 23,165 | 22,942 | |||||||||
| Treasury stock, at cost | (15,206) | (15,119) | |||||||||
| Accumulated other comprehensive loss | (2,178) | (2,176) | |||||||||
| Total PPG shareholders’ equity | $8,104 | $7,941 | |||||||||
| Noncontrolling interests | 150 | 156 | |||||||||
| Total shareholders’ equity | $8,254 | $8,097 | |||||||||
| Total liabilities and shareholders' equity | $22,150 | $22,098 |
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Shareholders' Equity (Unaudited)
| ($ in millions) | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total PPG | Non-controlling Interests | Total | ||||||||||||||||||
| January 1, 2026 | $969 | $1,325 | $22,942 | ($15,119) | ($2,176) | $7,941 | $156 | $8,097 | ||||||||||||||||||
| Net income attributable to controlling and noncontrolling interests | — | — | 382 | — | — | 382 | 3 | 385 | ||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | (2) | (2) | (6) | (8) | ||||||||||||||||||
| Cash dividends | — | — | (159) | — | — | (159) | — | (159) | ||||||||||||||||||
| Purchase of treasury stock | — | — | — | (101) | — | (101) | — | (101) | ||||||||||||||||||
| Issuance of treasury stock | — | 34 | — | 14 | — | 48 | — | 48 | ||||||||||||||||||
| Stock-based compensation activity | — | (5) | — | — | — | (5) | — | (5) | ||||||||||||||||||
| Dividends paid on subsidiary common stock to noncontrolling interests | — | — | — | — | — | — | (3) | (3) | ||||||||||||||||||
| March 31, 2026 | $969 | $1,354 | $23,165 | ($15,206) | ($2,178) | $8,104 | $150 | $8,254 | ||||||||||||||||||
| ($ in millions) | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total PPG | Non-controlling Interests | Total | ||||||||||||||||||
| January 1, 2025 | $969 | $1,272 | $21,994 | ($14,342) | ($3,108) | $6,785 | $177 | $6,962 | ||||||||||||||||||
| Net income attributable to controlling and noncontrolling interests | — | — | 373 | — | — | 373 | 5 | 378 | ||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | 275 | 275 | 1 | 276 | ||||||||||||||||||
| Cash dividends | — | — | (154) | — | — | (154) | — | (154) | ||||||||||||||||||
| Purchase of treasury stock | — | — | — | (385) | — | (385) | — | (385) | ||||||||||||||||||
| Issuance of treasury stock | — | 29 | — | 8 | — | 37 | — | 37 | ||||||||||||||||||
| Stock-based compensation activity | — | (4) | — | — | — | (4) | — | (4) | ||||||||||||||||||
| Dividends paid on subsidiary common stock to noncontrolling interests | — | — | — | — | — | — | (3) | (3) | ||||||||||||||||||
| Reductions in noncontrolling interests | — | — | — | — | — | — | (15) | (15) | ||||||||||||||||||
| March 31, 2025 | $969 | $1,297 | $22,213 | ($14,719) | ($2,833) | $6,927 | $165 | $7,092 | ||||||||||||||||||
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows (Unaudited)
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Operating activities: | |||||||||||
| Net income attributable to controlling and noncontrolling interests | $385 | $378 | |||||||||
| Less: Loss from discontinued operations | — | (2) | |||||||||
| Income from continuing operations | $385 | $380 | |||||||||
| Adjustments to reconcile net income to cash from operations: | |||||||||||
| Depreciation and amortization | 132 | 121 | |||||||||
| Stock-based compensation expense | 11 | 23 | |||||||||
| Deferred income taxes | 11 | (20) | |||||||||
| Cash used for restructuring actions | (16) | (18) | |||||||||
| Change in certain asset and liability accounts (net of acquisitions): | |||||||||||
| Receivables | (343) | (396) | |||||||||
| Inventories | (156) | (230) | |||||||||
| Other current assets | (103) | (34) | |||||||||
| Accounts payable and accrued liabilities | 209 | 202 | |||||||||
| Taxes and interest payable | (32) | 1 | |||||||||
| Noncurrent assets and liabilities, net | (39) | (43) | |||||||||
| Other | (26) | (2) | |||||||||
| Cash from/(used for) operating activities - continuing operations | $33 | ($16) | |||||||||
| Cash used for operating activities - discontinued operations | — | (2) | |||||||||
| Cash from/(used for) operating activities | $33 | ($18) | |||||||||
| Investing activities: | |||||||||||
| Capital expenditures | ($196) | ($209) | |||||||||
| Business acquisitions, net of cash balances acquired | (79) | — | |||||||||
| Other | (4) | 41 | |||||||||
| Cash used for investing activities | ($279) | ($168) | |||||||||
| Financing activities: | |||||||||||
| Net proceeds from commercial paper | $567 | $— | |||||||||
| Proceeds from Term Loan, net of fees | — | 309 | |||||||||
| Proceeds from the issuance of debt, net of discounts and fees | — | 940 | |||||||||
| Repayment of long-term debt | (700) | — | |||||||||
| Purchase of treasury stock | (96) | (394) | |||||||||
| Dividends paid on PPG common stock | (159) | (154) | |||||||||
| Other | 54 | (3) | |||||||||
| Cash (used for)/from financing activities | ($334) | $698 | |||||||||
| Effect of currency exchange rate changes on cash and cash equivalents | (10) | 48 | |||||||||
| Net (decrease)/increase in cash and cash equivalents | ($590) | $560 | |||||||||
| Cash and cash equivalents, beginning of period | 2,163 | 1,270 | |||||||||
| Cash and cash equivalents, end of period | $1,573 | $1,830 | |||||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Interest paid, net of amount capitalized | $105 | $55 | |||||||||
| Taxes paid, net of refunds | $144 | $123 | |||||||||
| Supplemental disclosure of noncash investing activities: | |||||||||||
| Capital expenditures accrued within Accounts payable and accrued liabilities at period-end | $52 | $63 | |||||||||
| Purchases of treasury stock transacted but not yet settled | $8 | $— |
The accompanying notes to the condensed consolidated financial statements are an integral part of this condensed consolidated statement.
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
**1.**Basis of Presentation
The condensed consolidated financial statements included herein are unaudited and have been prepared following the requirements of the Securities and Exchange Commission (the "SEC") and accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim reporting. Under these rules, certain footnotes and other financial information that are normally required for annual financial statements can be condensed or omitted. These statements include all adjustments, consisting only of normal, recurring adjustments, necessary to fairly state the financial position and shareholders' equity of PPG as of March 31, 2026 and the results of its operations and cash flows for the three months ended March 31, 2026 and 2025. All intercompany balances and transactions have been eliminated. Material subsequent events are evaluated through the report issuance date and disclosed where applicable. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in PPG's 2025 Annual Report on Form 10-K (the "2025 Form 10-K").
Net sales, expenses, assets and liabilities can vary during each quarter of the year. Accordingly, the results of operations for the three months ended March 31, 2026 and the trends in these unaudited condensed consolidated financial statements may not necessarily be indicative of the results to be expected for the full year.
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on our previously reported Net income, total assets, cash flows or shareholders’ equity.
**2.**New Accounting Standards
Recently Adopted Accounting Standards
PPG did not adopt any new accounting standards during the three months ended March 31, 2026.
Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The ASU requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. This ASU will be effective for the annual period ending December 31, 2027. Adoption of this ASU will result in additional disclosure, but will not impact PPG’s consolidated financial position, results of operations or cash flows.
In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU is intended to modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model to align the accounting rules with how software is developed today. This ASU will be effective for PPG beginning January 1, 2028. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.
3. Inventories
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| Finished products | $1,181 | $1,067 | |||||||||
| Work in process | 269 | 251 | |||||||||
| Raw materials | 656 | 624 | |||||||||
| Supplies | 56 | 54 | |||||||||
| Total Inventories | $2,162 | $1,996 |
Most U.S. inventories are valued using the last-in, first-out method. If the first-in, first-out ("FIFO") method of inventory valuation had been used, inventories would have been $182 million and $181 million higher as of March 31, 2026 and December 31, 2025, respectively.
4. Goodwill and Other Identifiable Intangible Assets
The Company tests indefinite-lived intangible assets and goodwill for impairment by performing either a qualitative evaluation or a quantitative test at least annually, or more frequently if an indication of impairment arises. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit or asset is less than its carrying amount.
The Company did not identify an indication of goodwill impairment for any of its reporting units or an indication of impairment of any of its indefinite-lived intangible assets during the three months ended March 31, 2026.
The change in the carrying amount of goodwill attributable to each reportable segment for the three months ended March 31, 2026 was as follows:
| ($ in millions) | Global Architectural Coatings | Performance Coatings | Industrial Coatings | Total | |||||||||||||||||||
| January 1, 2026 | $3,008 | $1,914 | $1,227 | $6,149 | |||||||||||||||||||
| Acquisitions, including purchase accounting adjustments | — | 44 | — | 44 | |||||||||||||||||||
| Foreign currency impact | (23) | (8) | (10) | (41) | |||||||||||||||||||
| March 31, 2026 | $2,985 | $1,950 | $1,217 | $6,152 |
As of both March 31, 2026 and December 31, 2025, accumulated goodwill impairment losses totaled $158 million, all of which relates to the Performance Coatings reportable segment.
A summary of the carrying value of the Company's identifiable intangible assets is as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||||||||||||
| Indefinite-Lived Identifiable Intangible Assets | |||||||||||||||||||||||||||||||||||
| Trademarks | $1,270 | $— | $1,270 | $1,274 | $— | $1,274 | |||||||||||||||||||||||||||||
| Definite-Lived Identifiable Intangible Assets | |||||||||||||||||||||||||||||||||||
| Acquired technology | $824 | ($725) | $99 | $819 | ($720) | $99 | |||||||||||||||||||||||||||||
| Customer-related | 1,777 | (1,297) | 480 | 1,782 | (1,293) | 489 | |||||||||||||||||||||||||||||
| Trade names | 304 | (194) | 110 | 299 | (191) | 108 | |||||||||||||||||||||||||||||
| Other | 46 | (45) | 1 | 46 | (45) | 1 | |||||||||||||||||||||||||||||
| Total Definite-Lived Intangible Assets | $2,951 | ($2,261) | $690 | $2,946 | ($2,249) | $697 | |||||||||||||||||||||||||||||
| Total Identifiable Intangible Assets | $4,221 | ($2,261) | $1,960 | $4,220 | ($2,249) | $1,971 |
The Company’s identifiable intangible assets with definite lives are being amortized over their estimated useful lives.
As of March 31, 2026, estimated future amortization expense of identifiable intangible assets is as follows:
| ($ in millions) | Future Amortization Expense | ||||
| Remaining nine months of 2026 | $79 | ||||
| 2027 | $87 | ||||
| 2028 | $80 | ||||
| 2029 | $73 | ||||
| 2030 | $64 | ||||
| 2031 | $55 | ||||
| Thereafter | $252 |
5. Business Restructuring
The Company records restructuring liabilities that represent charges incurred in connection with consolidations of certain operations, including both operations from acquisitions and headcount reduction programs. These charges consist primarily of severance costs and certain other cash costs. As a result of these programs, the Company also incurs incremental non-cash accelerated depreciation expense for certain assets due to their reduced expected useful life. These charges are not allocated to the Company’s reportable business segments. Refer to Note 15, "Reportable Business Segment Information" for additional information.
The following table summarizes restructuring reserve activity for the three months ended March 31, 2026 and 2025:
| Total Reserve | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| January 1 | $226 | $276 | |||||||||
| Approved restructuring actions | — | 14 | |||||||||
| Release of prior reserves and other adjustments(a) | (1) | (13) | |||||||||
| Cash payments | (16) | (18) | |||||||||
| Foreign currency impact | (4) | 8 | |||||||||
| March 31 | $205 | $267 |
(a)Certain releases were recorded to reflect the current estimate of costs to complete planned business restructuring actions.
The majority of the approved business restructuring actions and associated cash outlays are expected to be completed in 2026 and 2027.
6. Borrowings
Credit Agreements
In April 2023, PPG entered into a €500 million term loan credit agreement (the "Term Loan"). 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. In April 2023, PPG borrowed €500 million under the Term Loan. In December 2023, PPG obtained lender commitments sufficient to increase the size of the Term Loan by €250 million. In January 2024, PPG borrowed the additional €250 million. In December 2024, PPG obtained lender commitments sufficient to increase the size of the Term Loan by €300 million. In January 2025, PPG borrowed the additional €300 million. In January 2026, the Term Loan was amended to extend its maturity. Based on this amendment, the Term Loan terminates and all amounts outstanding are payable in January 2029. The Term Loan is denominated in euro and has been designated as a hedge of the net investment in the Company’s European operations. For more information, refer to Note 11 “Financial Instruments, Hedging Activities and Fair Value Measurements.”
In October 2025, PPG amended and restated its five-year credit agreement ("the Credit Agreement") dated as of August 30, 2019 to extend its maturity. The amended Credit Agreement provides for a $2.3 billion unsecured revolving credit facility, of which $2,148 million of the total commitment has a term through July 2029 and $152 million of the total commitment has a term through July 2028. The Company has the ability to increase the size of the Credit Agreement by up to an additional $750 million, subject to the receipt of lender commitments and other conditions precedent. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement. There were no amounts outstanding under the Credit Agreement as of March 31, 2026 and December 31, 2025.
Borrowings under the Credit Agreement may be made in U.S. Dollars or in euros. The Credit Agreement provides that loans will bear interest at rates based, at the Company’s option, on one of two specified base rates plus a margin based on certain formulas defined in the Credit Agreement. Additionally, the Credit Agreement contains a Commitment Fee, as defined in the Credit Agreement, on the amount of unused commitments under the Credit Agreement ranging from 0.060% to 0.125% per annum.
The Credit Agreement also supports the Company’s commercial paper borrowings which are classified as long-term based on PPG’s intent and ability to refinance these borrowings on a long-term basis. Commercial paper borrowings outstanding under the Credit Agreement were $567 million as of March 31, 2026 and zero as of December 31, 2025.
The Credit Agreement contains 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 Credit Agreement contains, among other things, customary events of default that would permit the lenders to accelerate the loans, including the failure to make timely payments when due under the Credit Agreement or other material indebtedness, the failure to satisfy covenants contained in the Credit Agreement, a change in control of the Company and specified events of bankruptcy and insolvency.
The Term Loan and Credit Agreement also require the Company to maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Credit Agreement, of 60% or less; provided, that for any fiscal quarter in which the Company has made an acquisition for consideration in excess of $1 billion and for the next five fiscal quarters thereafter, the ratio of Total Indebtedness to Total Capitalization may not exceed 65% at any time. As of March 31, 2026, Total Indebtedness to Total Capitalization as defined under the Credit Agreement was 45%.
Other Long-term Debt Activities
In March 2026, PPG's $700 million 1.2% notes matured, and the Company repaid this obligation using cash on hand.
In March 2025, PPG completed a public offering of €900 million 3.250% Notes due 2032. These notes were issued pursuant to PPG’s existing shelf registration statement and pursuant to an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented (the "2025 Indenture"). The 2025 Indenture governing these notes contains covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets. The terms of these notes also require the Company to make an offer to repurchase Notes upon a Change of Control Triggering Event (as defined in the 2025 Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest. The Company may issue additional debt from time to time pursuant to the Indenture. The aggregate cash proceeds from the notes, net of discounts and fees, was $940 million. The notes are denominated in euro and a portion of the notes have been designated as hedges of net investments in the Company’s European operations. Refer to Note 11 “Financial Instruments, Hedging Activities and Fair Value Measurements.” for additional information.
Restrictive Covenants and Cross-Default Provisions
As of March 31, 2026, PPG was in full compliance with the restrictive covenants under its various credit agreements, loan agreements and indentures.
Additionally, the Company’s Credit Agreement contains customary cross-default provisions. These provisions provide that a default on a debt service payment of $100 million or more for longer than the grace period provided under another agreement may result in an event of default under this agreement. None of the Company’s primary debt obligations are secured or guaranteed by the Company’s affiliates.
Letters of Credit and Surety Bonds
The Company had outstanding letters of credit and surety bonds of $271 million and $272 million as of March 31, 2026 and December 31, 2025, respectively.
7. Earnings Per Common Share
The effect of dilutive securities on the weighted average common shares outstanding included in the calculation of earnings per diluted common share for the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31 | |||||||||||
| (number of shares in millions) | 2026 | 2025 | |||||||||
| Weighted average common shares outstanding | 223.7 | 228.0 | |||||||||
| Effect of dilutive securities: | |||||||||||
| Stock options | 0.1 | 0.1 | |||||||||
| Other stock compensation plans | 0.6 | 0.8 | |||||||||
| Potentially dilutive common shares | 0.7 | 0.9 | |||||||||
| Adjusted weighted average common shares outstanding | 224.4 | 228.9 | |||||||||
| Dividends per common share | $0.71 | $0.68 | |||||||||
| Antidilutive securities(a): | |||||||||||
| Stock options | 3.2 | 3.0 |
(a)Excluded from the computation of earnings per diluted share due to their antidilutive effect.
8. Income Taxes
| Three Months Ended March 31 | |||||||||||
| 2026 | 2025 | ||||||||||
| Effective tax rate on Income before income taxes | 25.5 | % | 24.3 | % |
Income tax expense for the three months ended March 31, 2026 and 2025 is based on an estimated annual effective rate, which requires management to make its best estimate of annual Income before income taxes. During the year, PPG management regularly updates forecasted annual Income before income taxes for the various countries in which PPG operates based on changes in factors such as prices, shipments, product mix, raw material inflation and manufacturing operations. To the extent that actual 2026 results for the U.S. and foreign jurisdictions vary from estimates, the actual Income tax expense recognized in 2026 could be different from the forecasted amount used to estimate Income tax expense for the three months ended March 31, 2026.
9. Pensions and Other Postretirement Benefits
The service cost component of net periodic pension and other postretirement benefit cost is included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative, and Research and development, net in the accompanying condensed consolidated statement of income. All other components of net periodic benefit cost are recorded in Other income, net in the accompanying condensed consolidated statement of income.
Net periodic pension benefit cost and other postretirement benefit cost for the three months ended March 31, 2026 and 2025 was as follows:
| Pension | Other Postretirement Benefits | ||||||||||||||||||||||||||||||||||
| Three Months Ended March 31 | Three Months Ended March 31 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||
| Service cost | $2 | $2 | $1 | $1 | |||||||||||||||||||||||||||||||
| Interest cost | 25 | 25 | 5 | 5 | |||||||||||||||||||||||||||||||
| Expected return on plan assets | (28) | (26) | — | — | |||||||||||||||||||||||||||||||
| Amortization of actuarial losses | 7 | 6 | — | — | |||||||||||||||||||||||||||||||
| Amortization of prior service credit | — | — | (1) | (1) | |||||||||||||||||||||||||||||||
| Settlements | — | 1 | — | — | |||||||||||||||||||||||||||||||
| Net periodic benefit cost | $6 | $8 | $5 | $5 |
PPG expects 2026 full year net periodic pension expense of approximately $20 million and net periodic other postretirement expense of approximately $20 million.
Contributions to Defined Benefit Pension Plans
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Non-U.S. defined benefit pension contributions | $3 | $— |
PPG expects to make required mandatory contributions to its defined benefit pension plans in the range of $20 million to $30 million during the remaining nine months of 2026. In addition to any mandatory contributions, PPG may elect to make voluntary contributions to its defined benefit pension plans in 2026 and beyond.
10. Accumulated Other Comprehensive Loss (AOCL)
| ($ in millions) | Foreign Currency Translation Adjustments (a) | Pension and Other Postretirement Benefit Adjustments, net of tax (b) | Unrealized Gain on Derivatives, net of tax | Accumulated Other Comprehensive Loss | |||||||||||||||||||
| January 1, 2025 | ($2,651) | ($458) | $1 | ($3,108) | |||||||||||||||||||
| Current year deferrals to AOCL | 141 | (9) | — | 132 | |||||||||||||||||||
| Reclassifications from AOCL to net income | 139 | 4 | — | 143 | |||||||||||||||||||
| March 31, 2025 | ($2,371) | ($463) | $1 | ($2,833) | |||||||||||||||||||
| January 1, 2026 | ($1,702) | ($475) | $1 | ($2,176) | |||||||||||||||||||
| Current year deferrals to AOCL | — | (7) | — | (7) | |||||||||||||||||||
| Reclassifications from AOCL to net income | — | 5 | — | 5 | |||||||||||||||||||
| March 31, 2026 | ($1,702) | ($477) | $1 | ($2,178) |
(a)The tax (benefit)/cost related to unrealized foreign currency translation adjustments on net investment hedges was $(16) million and $60 million as of March 31, 2026 and 2025, respectively.
(b)The tax benefit related to the adjustment for pension and other postretirement benefits was $1 million and $2 million for the three months ended March 31, 2026 and 2025, respectively. Reclassifications from AOCL are included in the computation of net periodic benefit cost (See Note 9, "Pensions and Other Postretirement Benefits").
11. Financial Instruments, Hedging Activities and Fair Value Measurements
Financial instruments include cash and cash equivalents, short-term investments, cash held in escrow, marketable equity securities, accounts receivable, company-owned life insurance, accounts payable, short-term and long-term debt instruments, and derivatives. The fair values of these financial instruments approximated their carrying values at March 31, 2026 and December 31, 2025, in the aggregate, except for long-term debt instruments.
Hedging Activities
The Company has exposure to market risk from changes in foreign currency exchange rates and interest rates. As a result, financial instruments, including derivatives, have been used to hedge a portion of these underlying economic exposures. Certain of these instruments may qualify as fair value, cash flow, and net investment hedges upon meeting the requisite criteria, including effectiveness of offsetting hedged or underlying exposures. Changes in the fair value of derivatives that do not qualify for hedge accounting are recognized in Income before income taxes in the period incurred.
PPG’s policies do not permit speculative use of derivative financial instruments. PPG enters into derivative financial instruments with high credit quality counterparties and diversifies its positions among such counterparties in order to reduce its exposure to credit losses. The Company did not realize a credit loss on derivatives during the three months ended March 31, 2026 and 2025.
All of PPG's outstanding derivative instruments are subject to accelerated settlement in the event of PPG’s failure to meet its debt or payment obligations under the terms of the instruments’ contractual provisions. In addition, if the Company would be acquired and its payment obligations under its derivative instruments’ contractual arrangements are not assumed by the acquirer, or if PPG would enter into bankruptcy, receivership or reorganization proceedings, its outstanding derivative instruments would also be subject to accelerated settlement.
There were no derivative instruments de-designated or discontinued as hedging instruments during the three months ended March 31, 2026 and 2025, and there were no gains or losses deferred in Accumulated other comprehensive loss on the condensed consolidated balance sheet that were reclassified to Income before income taxes in the condensed consolidated statement of income in the three months ended March 31, 2026 and 2025 related to hedges of anticipated transactions that were no longer expected to occur.
Fair Value Hedges
The Company uses interest rate swaps from time to time to manage its exposure to changing interest rates. When outstanding, the interest rate swaps are typically designated as fair value hedges of certain outstanding debt obligations of the Company and are recorded at fair value.
PPG has interest rate swaps which converted $375 million of fixed rate debt to variable rate debt as of both March 31, 2026 and December 31, 2025. These swaps are designated as fair value hedges and are carried at fair value. Changes in the fair value of these swaps and changes in the fair value of the related debt are recorded in interest expense in the accompanying condensed consolidated statement of income. The fair value of these interest rate swaps were liabilities of $7 million and $6 million at March 31, 2026 and December 31, 2025, respectively.
Cash Flow Hedges
At times, PPG designates certain foreign currency forward contracts as cash flow hedges of the Company’s exposure to variability in exchange rates on third party transactions denominated in foreign currencies. There were no outstanding cash flow hedges at March 31, 2026 and December 31, 2025.
Net Investment Hedges
PPG uses cross currency swaps and foreign currency euro-denominated debt to hedge a significant portion of its net investment in its European operations, as follows:
PPG had U.S. dollar to euro cross currency swap contracts with total notional amounts of $375 million as of March 31, 2026 and December 31, 2025, respectively, and designated these contracts as hedges of the Company's net investment in its European operations. During the term of these contracts, PPG will receive payments in U.S. dollars and make payments in euros to the counterparties. As of March 31, 2026 and December 31, 2025, the fair value of the U.S. dollar to euro cross currency swap contracts were net assets of $17 million and $11 million, respectively.
At both March 31, 2026 and December 31, 2025, PPG had designated €3.5 billion of euro-denominated borrowings as hedges of a portion of its net investment in the Company's European operations. The carrying value of these instruments were $4.0 billion and $4.1 billion as of March 31, 2026 and December 31, 2025, respectively.
Other Financial Instruments
PPG uses foreign currency forward contracts to manage certain net transaction exposures that either have not been elected, or do not qualify for hedge accounting; therefore, the change in the fair value of these instruments is recorded in Other income, net in the condensed consolidated statement of income in the period of change. Underlying notional amounts related to these foreign currency forward contracts were $3.2 billion and $2.9 billion at
March 31, 2026 and December 31, 2025, respectively. The fair values of these contracts were net liabilities of $13 million and net assets of $1 million as of March 31, 2026 and December 31, 2025, respectively.
Gains/Losses Deferred in Accumulated Other Comprehensive Loss
The following table summarizes the amount of gains and losses deferred in Other comprehensive income ("OCI") and the amount and location of gains and losses recognized within the condensed consolidated statement of income related to derivative and debt financial instruments for the three months ended March 31, 2026 and 2025. All amounts are shown on a pretax basis.
| Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2026 | March 31, 2025 | Caption In Condensed Consolidated Statement of Income | |||||||||||||||||||||||||||
| ($ in millions) | Gain Deferred in OCI | Gain/(Loss) Recognized | Loss Deferred in OCI | Gain/(Loss) Recognized | |||||||||||||||||||||||||
| Economic | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | $— | $11 | $— | $16 | Other income, net | ||||||||||||||||||||||||
| Fair Value | |||||||||||||||||||||||||||||
| Interest rate swaps | — | (1) | — | (2) | Interest expense | ||||||||||||||||||||||||
| Total forward contracts and interest rate swaps | $— | $10 | $— | $14 | |||||||||||||||||||||||||
| Net Investment | |||||||||||||||||||||||||||||
| Cross currency swaps | $6 | $2 | ($11) | $2 | Interest expense | ||||||||||||||||||||||||
| Foreign denominated debt | 68 | — | (174) | — | |||||||||||||||||||||||||
| Total Net Investment | $74 | $2 | ($185) | $2 |
Fair Value Measurements
The Company follows a fair value measurement hierarchy to measure its assets and liabilities. As of March 31, 2026 and December 31, 2025, the assets and liabilities measured at fair value on a recurring basis were cash equivalents, equity securities and derivatives. In addition, the Company measures its pension plan assets at fair value (see Note 14, "Employee Benefit Plans" under Item 8 in the 2025 Form 10-K for further details). The Company's financial assets and liabilities are measured using inputs from the following three levels:
Level 1 inputs are quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Level 1 inputs are considered to be the most reliable evidence of fair value as they are based on unadjusted quoted market prices from various financial information service providers and securities exchanges.
Level 2 inputs are directly or indirectly observable prices that are not quoted on active exchanges, which include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. The fair values of the derivative instruments reflect the instruments' contractual terms, including the period to maturity, and uses observable market-based inputs, including forward curves.
Level 3 inputs are unobservable inputs employed for measuring the fair value of assets or liabilities. The Company did not have any recurring financial assets or liabilities recorded in its condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 that were measured using Level 3 inputs.
Assets and liabilities reported at fair value on a recurring basis
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Other current assets: | |||||||||||||||||||||||||||||||||||
| Marketable equity securities | $13 | $— | $— | $10 | $— | $— | |||||||||||||||||||||||||||||
| Foreign currency forward contracts (a) | $— | $5 | $— | $— | $5 | $— | |||||||||||||||||||||||||||||
| Investments: | |||||||||||||||||||||||||||||||||||
| Marketable equity securities | $72 | $— | $— | $79 | $— | $— | |||||||||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||||||||||||||
| Cross currency swaps (b) | $— | $19 | $— | $— | $15 | $— | |||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| Accounts payable and accrued liabilities: | |||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts (a) | $— | $18 | $— | $— | $4 | $— | |||||||||||||||||||||||||||||
| Other liabilities: | |||||||||||||||||||||||||||||||||||
| Cross currency swaps (b) | $— | $2 | $— | $— | $4 | $— | |||||||||||||||||||||||||||||
| Interest rate swaps (c) | $— | $7 | $— | $— | $6 | $— |
(a)Derivatives not designated as hedging instruments
(b)Net investment hedges
(c)Fair value hedges
Long-Term Debt
| ($ in millions) | March 31, 2026 (a) | December 31, 2025 (b) | |||||||||
| Long-term debt - carrying value | $7,096 | $7,297 | |||||||||
| Long-term debt - fair value | $6,956 | $7,215 |
(a)Excludes finance lease obligations of $6 million and short-term borrowings of $41 million as of March 31, 2026.
(b)Excludes finance lease obligations of $7 million and short-term borrowings of $4 million as of December 31, 2025.
The fair values of the debt instruments were measured using Level 2 inputs, including discounted cash flows and interest rates then currently available to the Company for instruments of the same remaining maturities.
12. Stock-Based Compensation
The Company’s stock-based compensation includes stock options, restricted stock units (“RSUs”) and grants of contingent shares that are earned based on achieving targeted levels of total shareholder return ("TSR"). All current grants of stock options, RSUs and contingent shares are made under the PPG Industries, Inc. Amended and Restated Omnibus Incentive Plan (“PPG Amended Omnibus Plan”), which was amended and restated effective April 21, 2016.
On April 16, 2026, the Company’s shareholders approved the PPG Industries, Inc. 2026 Omnibus Incentive Plan (the “2026 Omnibus Plan”) to replace the PPG Amended Omnibus Plan which expired by its terms on April 21, 2026. The 2026 Omnibus Incentive Plan authorizes the Company to issue 6,903,753 shares of stock in the form of equity awards to employees, including 5,403,753 shares that were previously authorized under the PPG Amended Omnibus Plan and 1,500,000 additional shares approved by shareholders for issuance under the 2026 Omnibus Plan. Any equity awards granted under the PPG Amended Omnibus Plan between December 31, 2025 and April 21, 2026, the date that the 2026 Omnibus Plan became effective, have reduced the number of shares available for issuance under the 2026 Omnibus Incentive Plan one a one-for-one basis.
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Stock-based compensation expense | $11 | $23 | |||||||||
| Income tax benefit recognized | $2 | $5 |
Grants of stock-based compensation during the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31 | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Shares | Fair Value | Shares | Fair Value | ||||||||||||||||||||
| Stock options | 278,903 | $32.75 | 541,313 | $32.93 | |||||||||||||||||||
| Restricted stock units | 316,121 | $119.26 | 254,278 | $111.50 | |||||||||||||||||||
| Contingent shares (a) | 55,195 | $125.55 | 76,925 | $114.39 |
(a)The number of contingent shares represents the target value of the award.
Stock options are generally exercisable 36 months after being granted and have a maximum term of 10 years. Compensation expense for stock options is recorded over the vesting period based on the fair value on the date of grant. The fair value of the stock options granted during the three months ended March 31, 2026 was calculated with the following weighted average assumptions:
| Weighted average exercise price | $125.55 | ||||
| Risk-free interest rate | 3.8 | % | |||
| Expected life of option in years | 5.56 | ||||
| Expected dividend yield | 1.9 | % | |||
| Expected volatility | 27.2 | % |
The risk-free interest rate is determined by using the U.S. Treasury yield curve at the date of the grant and using a maturity equal to the expected life of the option. The expected term assumption is estimated based on the weighted average term of historical stock option grants. The expected dividend yield and volatility are based on historical stock prices and dividend amounts over past time periods equal in length to the expected life of the options.
Time-based RSUs generally vest over the three-year period following the date of grant, unless forfeited, and will be paid out in the form of stock, cash or a combination of both at the Company’s discretion at the end of the vesting period.
Performance-based RSUs vest based on achieving specific annual performance targets for adjusted earnings per share growth and cash flow return on capital over the three calendar year-end periods following the date of grant. Unless forfeited, the performance-based RSUs will be paid out in the form of stock, cash or a combination of both at the Company’s discretion at the end of the three-year performance period if PPG meets the performance targets. The amount paid upon vesting of performance-based RSUs may range from 0% to 200% of the original grant, based upon the level of adjusted earnings per share growth achieved and frequency with which the annual cash flow return on capital performance target is met over the three calendar year periods comprising the vesting period. Performance against the earnings per share growth and the cash flow return on capital target is calculated annually, and the annual payout for each goal is weighted equally over the three-year period.
The Company also provides grants of contingent shares to selected key executives that may be earned based on PPG's TSR over the three-year period following the date of grant. Contingent share grants (referred to as “TSR awards”) are made annually and are paid out at the end of each three-year period based on the Company’s stock performance. Performance is measured by determining the percentile rank of the total shareholder return of PPG common stock in relation to the TSR of the S&P 500 Index for the three-year period following the date of grant. This comparison group represents the entire S&P 500 Index as it existed at the beginning of the performance period, excluding any companies that were removed from the index because they ceased to be publicly traded. The payment of awards following the three-year award period is based on performance achieved in accordance with the scale set forth in the plan agreement and may range from 0% to 200% of the initial grant. A payout of 100% is earned if target performance is achieved. Contingent share awards earn dividend equivalents for the award period, which are paid to participants or credited to the participants’ deferred compensation plan accounts with the award payout at the end of the period based on the actual number of contingent shares that are earned. Any payments made at the end of the award period may be in the form of stock, cash or a combination of both. The TSR awards are classified as liability awards, and compensation expense is recognized over the three-year award period based on the fair value of the awards (giving consideration to the Company’s percentile rank of TSR) remeasured in each reporting period until settlement of the awards.
13. Commitments and Contingent Liabilities
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 that 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 certain insurers may contest coverage with respect to claims in the future. PPG’s lawsuits and claims against others include claims against insurers and other third parties with respect to actual and contingent losses related to contract, environmental, asbestos and other matters.
The results of any current or future litigation and claims are inherently unpredictable. However, 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 any particular period in which costs, if any, are recognized.
Asbestos Matters
As of March 31, 2026, the Company was aware of certain asbestos-related claims pending against the Company and certain of its subsidiaries. The Company is defending these asbestos-related claims vigorously. The asbestos-related claims consist of claims against the Company alleging:
-
exposure to asbestos or asbestos-containing products manufactured, sold or distributed by the Company or its subsidiaries (“Products Claims”);
-
personal injury caused by asbestos on premises presently or formerly owned, leased or occupied by the Company (“Premises Claims”); and
-
asbestos-related claims against a subsidiary the Company acquired in 2013 (“Subsidiary Claims”).
The Company monitors and reviews the activity associated with its asbestos claims and evaluates, on a periodic basis, its estimated liability for such claims and all underlying assumptions to determine whether any adjustment to the reserves for these claims is required. Additionally, as a supplement to its periodic monitoring and review, the Company conducts discussions with counsel and engages valuation consultants to analyze its claims history and estimate the amount of the Company’s potential liability for asbestos-related claims. As of both March 31, 2026 and December 31, 2025, the Company's asbestos-related reserves totaled $43 million.
The Company believes that, based on presently available information, the total reserves for asbestos-related claims will be sufficient to encompass all of the Company’s current and estimable potential future asbestos liabilities. These reserves, which are included within Other liabilities on the accompanying consolidated balance sheets, involve significant management judgment and represent the Company’s current best estimate of its liability for these claims.
The amount reserved for asbestos-related claims by its nature is subject to many uncertainties that may change over time, including (i) the ultimate number of claims filed; (ii) whether closed, dismissed or dormant claims are reinstituted, reinstated or revived; (iii) the amounts required to resolve both currently known and future unknown claims; (iv) the amount of insurance, if any, available to cover such claims; (v) the unpredictable aspects of the tort system, including a changing trial docket and the jurisdictions in which trials are scheduled; (vi) the outcome of any trials, including potential judgments or jury verdicts; (vii) the lack of specific information in many cases concerning exposure for which the Company is allegedly responsible, and the claimants’ alleged diseases resulting from such exposure; and (viii) potential changes in applicable federal and/or state tort liability law. All of these factors may have a material effect upon future asbestos-related liability estimates. While the ultimate outcome of the Company’s asbestos litigation cannot be predicted with certainty, the Company believes that any financial exposure resulting from its asbestos-related claims will not have a material adverse effect on the Company’s consolidated financial position, liquidity or results of operations.
Environmental Matters
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.
As remediation at certain environmental sites progresses, PPG continues to refine its assumptions underlying the estimates of the expected future costs of its remediation programs. PPG’s ongoing evaluation may result in additional charges against income to adjust the reserves for these sites. In 2025 and 2026, certain charges have been recorded based on updated estimates to increase existing reserves for these sites. Certain other charges related to environmental remediation actions are expensed as incurred.
As of March 31, 2026 and December 31, 2025, PPG had reserves for environmental contingencies associated with PPG’s former chromium manufacturing plant in Jersey City, New Jersey (“New Jersey Chrome”), glass and chemical manufacturing sites, and for other environmental contingencies, including current manufacturing locations and National Priority List sites. These reserves are reported as Accounts payable and accrued liabilities and Other liabilities in the accompanying condensed consolidated balance sheet.
| Environmental Reserves | |||||||||||
| ($ in millions) | March 31, 2026 | December 31, 2025 | |||||||||
| New Jersey Chrome | $53 | $56 | |||||||||
| Glass and chemical | 42 | 45 | |||||||||
| Other | 100 | 105 | |||||||||
| Total environmental reserves | $195 | $206 | |||||||||
| Current portion | $54 | $57 |
Pretax charges against income for environmental remediation costs are included in Other income, net in the accompanying condensed consolidated statement of income. The pretax charges and cash outlays related to such environmental remediation for the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Environmental remediation pretax charges, net | $— | $— | |||||||||
| Cash outlays for environmental remediation activities | $11 | $3 |
Remediation: New Jersey Chrome
In June 2009, PPG entered into a settlement agreement with the New Jersey Department of Environmental Protection (“NJDEP”) and Jersey City, New Jersey (which had asserted claims against PPG for lost tax revenue) which was in the form of a Partial Consent Judgment (the "Consent"). Under the Consent, PPG accepted sole responsibility for the remediation activities at its former chromium manufacturing location in Jersey City and a number of additional surrounding sites. Remediation of the New Jersey Chrome sites requires PPG to remediate soil and groundwater contaminated by hexavalent chromium, as well as perform certain other environmental remediation activities. The most significant assumptions underlying the estimate of remediation costs for all New Jersey Chrome sites relate to the extent and concentration of chromium in the soil.
PPG regularly evaluates the assessments of costs incurred to date versus current progress and the potential cost impacts of the most recent information, including the extent of impacted soils and groundwater, and engineering, administrative and other associated costs. Based on these assessments, the reserve is adjusted accordingly. As of March 31, 2026 and December 31, 2025, PPG's reserve for remediation of all New Jersey Chrome sites was $53 million and $56 million, respectively. The major cost components of this liability are related to excavation of impacted soil as well as groundwater remediation. These components each account for approximately 70% and 10% of the amount accrued at March 31, 2026, respectively.
There are multiple, future events yet to occur, including further remedy selection and design, remedy implementation and execution and applicable governmental agency or community organization approvals. Considerable uncertainty exists regarding the timing of these future events for the New Jersey Chrome sites. Further resolution of these events is expected to occur over the next several years. As these events occur and to the extent that the cost estimates of the environmental remediation remedies change, the existing reserve for this environmental remediation matter will continue to be adjusted.
Remediation: Glass, Chemicals and Other Sites
Among other sites at which PPG is managing environmental liabilities, remedial actions are occurring at a chemical manufacturing site in Barberton, Ohio where PPG has completed a Facility Investigation and Corrective Measure
Study under the United States Environmental Protection Agency's Resource Conservation and Recovery Act Corrective Action Program. PPG has also been addressing the impacts from a legacy plate glass manufacturing site in Kokomo, Indiana under the Voluntary Remediation Program of the Indiana Department of Environmental Management and a site associated with a legacy plate glass manufacturing site near Ford City, Pennsylvania under the Pennsylvania Land Recycling Program under the oversight of the Pennsylvania Department of Environmental Protection. PPG is currently performing additional investigation and remedial activities at these locations.
With respect to certain other waste sites, the financial condition of other potentially responsible parties also contributes to the uncertainty of estimating PPG’s final costs. Although contributors of waste to sites involving other potentially responsible parties may face governmental agency assertions of joint and several liability, in general, final allocations of costs are made based on the relative contributions of wastes to such sites. PPG is generally not a major contributor to such sites.
Remediation: Reasonably Possible Matters
In addition to the amounts currently reserved for environmental remediation, the Company may be subject to loss contingencies related to environmental matters estimated to be as much as $100 million to $200 million. Such unreserved losses are reasonably possible but are not currently considered to be probable of occurrence. These reasonably possible unreserved losses relate to environmental matters at a number of sites, none of which are individually significant. The loss contingencies related to these sites include significant unresolved issues such as the nature and extent of contamination at these sites and the methods that may have to be employed to remediate them.
The impact of evolving programs, such as natural resource damage claims, industrial site re-use initiatives and domestic and international remediation programs, also adds to the present uncertainties with regard to the ultimate resolution of this unreserved exposure to future loss. The Company’s assessment of the potential impact of these environmental contingencies is subject to considerable uncertainty due to the complex, ongoing and evolving process of investigation and remediation, if necessary, of such environmental contingencies, and the potential for technological and regulatory developments.
14. Revenue Recognition
The Company recognizes revenue when control of the promised goods or services is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales. For most transactions, control passes in accordance with agreed upon delivery terms.
The Company delivers products to company-owned stores, home centers and other regional or national consumer retail outlets, paint dealers, concessionaires and independent distributors, company-owned distribution networks, and directly to manufacturing companies and retail customers. Each product delivered to a third-party customer is considered to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collection of the sales price under normal credit terms in the regions in which it operates. Accounts receivable are recognized when there is an unconditional right to consideration. Payment terms vary from customer to customer, depending on creditworthiness, prior payment history and other considerations.
The Company also provides services by applying coatings to customers' manufactured parts and assembled products and by providing technical support to certain customers. Performance obligations are satisfied over time as critical milestones are met and as services are provided. PPG is entitled to payment as the services are rendered. For the three months ended March 31, 2026 and 2025, service revenue constituted less than 5% of total revenue.
Net sales by segment and region for the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Global Architectural Coatings | |||||||||||
| Europe, Middle East and Africa ("EMEA") | $587 | $542 | |||||||||
| Asia Pacific | 50 | 46 | |||||||||
| Latin America | 328 | 269 | |||||||||
| Total | $965 | $857 | |||||||||
| Performance Coatings | |||||||||||
| United States and Canada | $714 | $737 | |||||||||
| EMEA | 362 | 313 | |||||||||
| Asia Pacific | 232 | 190 | |||||||||
| Latin America | 26 | 25 | |||||||||
| Total | $1,334 | $1,265 | |||||||||
| Industrial Coatings | |||||||||||
| United States and Canada | $548 | $547 | |||||||||
| EMEA | 474 | 417 | |||||||||
| Asia Pacific | 416 | 411 | |||||||||
| Latin America | 193 | 187 | |||||||||
| Total | $1,631 | $1,562 | |||||||||
| Total Net Sales | |||||||||||
| United States and Canada | $1,262 | $1,284 | |||||||||
| EMEA | 1,423 | 1,272 | |||||||||
| Asia Pacific | 698 | 647 | |||||||||
| Latin America | 547 | 481 | |||||||||
| Total PPG | $3,930 | $3,684 |
Allowance for Doubtful Accounts
All trade receivables are reported on the condensed consolidated balance sheet at the outstanding principal amount adjusted for any allowance for doubtful accounts and any charge-offs. PPG provides an allowance for doubtful accounts to reduce trade receivables to their estimated net realizable value equal to the amount that is expected to be collected. This allowance is estimated based on historical collection experience, current regional economic and market conditions, the aging of accounts receivable, assessments of current creditworthiness of customers and forward-looking information. The use of forward-looking information is based on certain macroeconomic and microeconomic indicators, including, but not limited to, regional business environment risk, political risk, and commercial and financing risks.
PPG reviews its allowance for doubtful accounts on a quarterly basis to ensure the estimate reflects regional risk trends as well as current and future global operating conditions.
The following table summarizes the activity for the allowance for doubtful accounts for the three months ended March 31, 2026 and 2025:
| Trade Receivables Allowance for Doubtful Accounts | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| January 1 | $22 | $23 | |||||||||
| Bad debt expense | 1 | 2 | |||||||||
| Write-offs and recoveries of previously reserved trade receivables | (3) | (6) | |||||||||
| Other | — | 1 | |||||||||
| March 31 | $20 | $20 |
15. Reportable Business Segment Information
PPG is a multinational manufacturer with nine operating segments (which the Company refers to as “strategic business units”) that are organized based on the Company’s major products lines. The operating segments are aggregated into reportable business segments based on their similar economic characteristics, including similar nature of products, production processes, end-use markets and methods of distribution.
In the first quarter 2026, the PPG operating structure was modified, resulting in the combining of the previously separate specialty products operating segment into the industrial coatings operating segment. This modification had no impact on the Company's reportable segments.
The Global Architectural Coatings reportable business segment is comprised of the architectural coatings EMEA and architectural coatings Latin America and Asia Pacific operating segments. This reportable business segment primarily supplies paints, wood stains, adhesives, sealants and purchased sundries.
The Performance Coatings reportable business segment is comprised of the automotive refinish coatings, aerospace coatings, protective and marine coatings and traffic solutions operating segments. This reportable business segment primarily supplies a variety of coatings, solvents, adhesives, sealants, foams and finishes, along with pavement marking products, transparencies and paint films.
The Industrial Coatings reportable business segment is comprised of the automotive original equipment manufacturer ("OEM") coatings, industrial coatings, and the packaging coatings operating segments. This reportable business segment primarily supplies a variety of protective and decorative coatings and finishes along with adhesives, sealants, metal pretreatment products, optical monomers and coatings, low-friction coatings, paint films and other specialty products.
Reportable business segment net sales and segment income for the three months ended March 31, 2026 and 2025 were as follows:
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Global Architectural Coatings | |||||||||||
| Net sales to external customers | $965 | $857 | |||||||||
| Cost of sales, exclusive of depreciation and amortization | 461 | 429 | |||||||||
| Selling, general and administrative | 307 | 274 | |||||||||
| Depreciation and amortization | 29 | 26 | |||||||||
| Other (a) | 13 | 10 | |||||||||
| Global Architectural Coatings segment income | $155 | $118 | |||||||||
| Performance Coatings | |||||||||||
| Net sales to external customers | $1,334 | $1,265 | |||||||||
| Cost of sales, exclusive of depreciation and amortization | 695 | 675 | |||||||||
| Selling, general and administrative | 277 | 256 | |||||||||
| Depreciation and amortization | 38 | 33 | |||||||||
| Other (a) | 36 | 27 | |||||||||
| Performance Coatings segment income | $288 | $274 | |||||||||
| Industrial Coatings | |||||||||||
| Net sales to external customers | $1,631 | $1,562 | |||||||||
| Cost of sales, exclusive of depreciation and amortization | 1,110 | 1,038 | |||||||||
| Selling, general and administrative | 212 | 200 | |||||||||
| Depreciation and amortization | 52 | 48 | |||||||||
| Other (a) | 64 | 61 | |||||||||
| Industrial Coatings segment income | $193 | $215 | |||||||||
| Total Net Sales | $3,930 | $3,684 | |||||||||
| Total Segment income | $636 | $607 | |||||||||
| Corporate / Non-Segment Items | |||||||||||
| Corporate / non-segment unallocated, exclusive of depreciation and amortization | (74) | (81) | |||||||||
| Corporate / non-segment depreciation and amortization | (9) | (14) | |||||||||
| Interest expense, net of interest income | (24) | (13) | |||||||||
| Business restructuring-related costs, net (b) | (5) | (9) | |||||||||
| Portfolio optimization (c) | (7) | 6 | |||||||||
| Insurance recovery (d) | — | 6 | |||||||||
| Total Income from continuing operations before income taxes | $517 | $502 |
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Expenditures for property, plant and equipment (including business acquisitions) | |||||||||||
| Global Architectural Coatings | $32 | $38 | |||||||||
| Performance Coatings | 161 | 51 | |||||||||
| Industrial Coatings | 52 | 85 | |||||||||
| Corporate / Non-Segment Items | 30 | 35 | |||||||||
| Total | $275 | $209 | |||||||||
| Share of net earnings of equity affiliates | |||||||||||
| Global Architectural Coatings | $1 | $1 | |||||||||
| Performance Coatings | 1 | 1 | |||||||||
| Industrial Coatings | — | — | |||||||||
| Corporate / Non-Segment Items | 4 | 3 | |||||||||
| Total | $6 | $5 |
| ($ in millions) | March 31, 2026 | March 31, 2025 | |||||||||
| Segment assets (e) | |||||||||||
| Global Architectural Coatings | $6,821 | $6,296 | |||||||||
| Performance Coatings | 6,475 | 5,911 | |||||||||
| Industrial Coatings | 5,684 | 5,457 | |||||||||
| Total segment assets | $18,980 | $17,664 | |||||||||
| Corporate / Non-Segment Items | 3,170 | 3,476 | |||||||||
| Total | $22,150 | $21,140 | |||||||||
| Investment in equity affiliates | |||||||||||
| Global Architectural Coatings | $25 | $21 | |||||||||
| Performance Coatings | 29 | 26 | |||||||||
| Industrial Coatings | 22 | 21 | |||||||||
| Total segment investment in equity affiliates | $76 | $68 | |||||||||
| Corporate / Non-Segment Items | 80 | 78 | |||||||||
| Total | $156 | $146 |
| Three Months Ended March 31 | |||||||||||
| ($ in millions) | 2026 | 2025 | |||||||||
| Geographic Information | |||||||||||
| Segment income | |||||||||||
| United States and Canada | $268 | $273 | |||||||||
| EMEA | 149 | 144 | |||||||||
| Asia Pacific | 80 | 87 | |||||||||
| Latin America | 139 | 103 | |||||||||
| Total | $636 | $607 |
(a)Other segment items for each reportable business segment includes research and development, net and other segment expense/(income), net.
(b)Business restructuring-related costs, net include business restructuring charges, offset by releases related to previously approved programs, which are included in Other income, net on the consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the consolidated statement of income, and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative and Other income, net on the consolidated statement of income.
(c)Portfolio optimization includes a $6 million charge related to the step‑up of acquired inventory in the first quarter 2026. Portfolio optimization also includes a $7 million gain recognized on the sale of a business in the first quarter 2025. There was no tax expense associated with that gain. Portfolio optimization also includes advisory, legal, accounting, valuation, other professional or consulting fees,
and certain internal costs directly incurred to effect acquisitions, as well as similar fees and other costs to effect divestitures and other portfolio optimization exit actions. These costs are included in Selling, general and administrative expense on the condensed consolidated statement of income.
(d)In the first quarter 2025, the Company received reimbursement under its insurance policies for damages incurred at a southern U.S. factory from a winter storm in 2021, which is included in Other income, net on the condensed consolidated statement of income.
(e)Segment assets are the total assets used in the operation of each segment. Corporate assets principally include amounts recorded in Cash and cash equivalents, Deferred income taxes, and Property, plant and equipment, net on the consolidated balance sheet.
16. Supplier Finance
PPG has certain voluntary supply chain finance programs with financial intermediaries which provide participating suppliers the option to be paid by the intermediary earlier than the original invoice due date. PPG’s responsibility is limited to making payments on the terms originally negotiated with the suppliers, regardless of whether the intermediary pays the supplier in advance of the original due date. The range of payment terms PPG negotiates with suppliers are consistent, regardless of whether a supplier participates in a supply chain finance program. These amounts are included within Accounts payable and accrued liabilities on the accompanying condensed consolidated balance sheet.
The rollforward of outstanding obligations confirmed as valid under the supplier finance programs for the three months ended March 31, 2026 and 2025 is as follows:
| ($ in millions) | 2026 | 2025 | |||||||||
| January 1 | $245 | $251 | |||||||||
| Invoices confirmed | 148 | 116 | |||||||||
| Confirmed invoices paid | (140) | (146) | |||||||||
| Currency impact | (6) | 9 | |||||||||
| March 31 | $247 | $230 |
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