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Letter to the Editor

PPG Reports Strong Q2 Financial Results

“PPG’s strong results this quarter benefited largely from a 10 percent increase in volumes,” said Charles E. Bunch, PPG chairman and chief executive officer. “The breadth of geographies and end-use markets that we serve is enabling us to leverage continuing positive momentum in global industrial demand. The performance of our portfolio is being elevated by this higher industrial activity and strong demand across the Asia/Pacific and Latin America regions. This is more than offsetting weak construction markets in North America and Europe.

“Our earnings this quarter were aided by an improved sales mix from some of our top-performing businesses, such as aerospace, auto refinish and our Optical and Specialty Materials segment,” Bunch continued. He added that Commodity Chemicals segment earnings have rebounded significantly versus the first quarter and that the company’s Glass segment benefited from substantially improved performance in the fiber glass business.

“Our financial performance this quarter, despite demand levels that are more than ten percent below 2008 pre-recession levels, clearly demonstrates that our global portfolio and our efforts to restructure our businesses to reduce structural costs have positioned PPG to capitalize on what we anticipate to be a continued, gradual, global economic recovery,” Bunch said. “We are beginning to utilize our strong balance sheet to accelerate growth, and in fact are in the process of reviewing several potential small to mid-size acquisitions.”

Net income for the second quarter included aftertax charges of one cent per share in 2010 and two cents per share in 2009 to reflect the net increase in the current value of the company’s obligation under its proposed asbestos settlement, which is pending court proceedings.

Performance Coatings segment sales in the second quarter 2010 increased $45 million, or 4 percent, versus last year’s second quarter as a result of higher selling prices and favorable currency conversion. Volumes were flat, with modest declines in the North American architectural coatings business offset by solid growth in automotive refinish and aerospace, two of PPG’s top-performing businesses, along with continued growth in the Asia/Pacific region. Segment earnings grew $32 million, or 20 percent, to a new quarterly record of $190 million as a result of the improved business mix, higher selling prices and lower costs, which were partially countered by higher raw material costs.

Glass segment sales increased $40 million, or 19 percent, compared with the prior year as a result of improved fiber glass volumes. Segment income was $16 million, an improvement of $23 million due to higher volumes, lower manufacturing costs and higher equity earnings and royalty income.

Founded in 1883, PPG Industries serves customers in industrial, transportation, consumer products, and construction markets and aftermarkets. With headquarters in Pittsburgh, PPG operates in more than 60 countries around the globe. Sales in 2009 were $12.2 billion.

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