2Q06EarningsSlides

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2Q06EarningsSlides

  1. 1. 1 PPG Industries, Inc. Forward-Looking Statements Statements contained herein relating to matters that are not historical facts are forward-looking statements reflecting PPG’s current view with respect to future events and financial performance. These matters involve risks and uncertainties that may affect PPG’s operations, as discussed in PPG’s filings with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Accordingly, many factors may cause actual results to differ materially from the forward-looking statements contained herein. Such factors include increasing price and product competition by foreign and domestic competitors, fluctuations in cost and availability of raw materials and energy, the ability to maintain favorable supplier relationships and arrangements, economic and political conditions in international markets, foreign exchange rates and fluctuations in such rates, and the unpredictability of existing and possible future litigation, including litigation that could result if the asbestos settlement discussed in PPG's filings with the SEC does not become effective. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here 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 results compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on PPG’s consolidated financial condition, operations or liquidity. All information in this presentation speaks only as of July 20, 2006, and any distribution of this presentation after that date is not intended and will not be construed as updating or confirming such information.
  2. 2. 2 PPG Industries, Inc. Second Quarter 2006 Financial Results July 20, 2006 William H. Hernandez Sr. VP & CFO Information contained in this presentation is current as of July 20, 2006 and will not be updated.
  3. 3. 3 Business Segment Sales 2nd Quarter Year-to-Date Sales 2006 2005 Change 2006 2005 Change Coatings $ 1,579 $ 1,450 $ 129 $ 3,019 $ 2,782 $ 237 Chemicals 634 625 9 1,267 1,232 35 Glass 611 581 30 1,176 1,135 41 Total PPG $ 2,824 $ 2,656 $ 168 $ 5,462 $ 5,149 $ 313
  4. 4. 4 Second Quarter Comparisons 2006 2005 Million EPS Million EPS Net Income As Reported $ 280 $ 1.68 $ 231 $ 1.34 Net Income Includes the Following Charges (Earnings): Asbestos Settlement - Net 4 0.03 2 0.01 Net Legal and Insurance Matters (12) (0.07) - - Debt Refinancing Costs - - 12 0.07 Adjusted Net Income $ 272 $ 1.64 $ 245 $ 1.42 Adjusted Net Income is included in this presentation, together with the most directly comparable GAAP financial measure, because management uses this information in evaluating the results of the continuing operations of the Company and believes this information provides useful insight to investors.
  5. 5. 5 Business Segment Earnings 2nd Quarter Year-to-Date 2006 2005 Change 2006 2005 Change Operating Earnings Coatings $ 272 $ 210 $ 62 $ 439 $ 219 $ 220 Chemicals 137 152 (15) 265 307 (42) Glass 48 52 (4) 80 93 (13) $ 457 $ 414 $ 43 $ 784 $ 619 $ 165 Operating Margins Coatings 17.2% 14.5% 14.5% 7.8% Chemicals 21.6% 24.3% 20.9% 24.9% Glass 7.9% 9.0% 6.8% 8.2%
  6. 6. 6 Market Indicators 2Q 2006 (change from 2Q 2005) U.S. Real GDP* 3.4% U.S. Industrial Production* 4.6% EEC Real GDP* 2.4% China Real GDP* 10.9% N.A. Vehicle Production -3.9% N.A. Light Vehicle Sales -2.4% Western Europe Auto Production* -3.7% Western Europe, New Registrations* -1.0% U.S. Housing Starts* -8% U.S. Commercial Construction (Real Investment)* 8% *Estimates
  7. 7. 7 2006 Key Topics and Outlook • Economy • Inflation Energy Raw Materials
  8. 8. 8 Approx. Trends in Sales – Total PPG 2Q 2006 (change from 2Q 2005) Sales Volume/Mix Price Curr. Acq./Other 6% 2% 2% 1% 1%
  9. 9. 9 Quarterly Volume Change – Total PPG From Prior Year Quarter 10 N.A. Asia U.S. Industrial 8 Decline Hurricanes Decline 6 Percent 4 2 0 -2 -4 -6 -8 1998 1999 2000 2001 2002 2003 2004 2005 2006 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
  10. 10. 10 Quarterly Volume Change – Europe From Prior Year Quarter 20 15 10 Percent 5 0 -5 -10 -15 2006 2004 2005 2000 2001 2003 2002 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
  11. 11. 11 Quarterly Volume Change – Asia From Prior Year Quarter 25 20 15 Percent 10 5 0 -5 2000 2001 2002 2003 2005 2006 2004 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
  12. 12. 12 Approx. Trends in Sales – Coatings 2Q 2006 (change from 2Q 2005) Sales Volume/Mix Price Curr. Acq./Other COATINGS 9% 4% 3% 1% 1% Automotive OEM 3% 2% Refinish 8% 3% Industrial 11% 4% Aerospace 9% 7% Architectural 16% 5% Packaging 8% 6%
  13. 13. 13 Approx. Trends in Sales - Glass 2Q 2006 (change from 2Q 2005) Sales Volume/Mix Price Curr. Acq./Other GLASS 5% 3% 0% 0% 2% Automotive OEM -4% -2% Automotive ARG 11% 3% Insurance & Services -7% -7% Fiber Glass 3% 4% Performance Glazings 15% 10%
  14. 14. 14 Approx. Trends in Sales – Chemicals 2Q 2006 (change from 2Q 2005) Sales Volume/Mix Price Curr. Acq./Other CHEMICALS 1% -3% 3% 0% 1% Commodity -8% -13% Specialty 19% 14%
  15. 15. 15 Use of Cash • Prudently fund businesses • Dividends • Manage debt • Pension & asbestos settlement • Related acquisitions • Repurchase stock
  16. 16. 16 Conclusion Thank you for your interest in PPG Industries, Inc. For additional information contact: Investors Vincent J. Morales (412) 434-3740 Media Jeffrey A. Worden (412) 434-3046
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