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4Q 07 EARNINGS SLIDES

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  • 1. Fourth Quarter and Full Year 2007 Financial Results Charles E. Bunch, Chairman and Chief Executive Officer William H. Hernandez, Sr. Vice President and Chief Financial Officer January 17, 2008
  • 2. 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, integration of acquisitions and achievement of expected synergies therefrom, the impact of environmental regulations, unexpected business disruptions, 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 Securities and Exchange Commission 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 January 17, 2008, and any distribution of this presentation after that date is not intended and will not be construed as updating or confirming such information.
  • 3. Opening Remarks Financial Review Strategic Update & 2008 Perspectives Question & Answer Session
  • 4. Fourth Quarter Full Year All-time record sales All-time record sales Record sales in all six coatings Record sales in all six coatings businesses businesses, Optical, Silicas, Chlor-Alkali & Derivatives and Record sales in Optical and Performance Glazings Silicas Record coatings and Best organic growth in three Optical & Specialty Materials years earnings Record earnings per share Record earnings per share $1B in cash from operations Two dividend increases !
  • 5. quot; $MM (USD) 4th Quarter Year-to-Date % % Sales 2007 2006 Change 2007 2006 Change Performance Coatings $ 1,019 $ 836 22% $ 3,811 $ 3,088 23% Industrial Coatings 933 847 10% 3,646 3,236 13% Optical & Specialty Mtls. 243 $ 214 14% 1,029 904 14% Commodity Chemicals 388 339 14% 1,539 1,483 4% Glass 291 264 10% 1,181 1,150 3% Total PPG $ 2,874 $ 2,500 15% $ 11,206 $ 9,861 14% Consistent Growth Led by Coatings and Optical & Specialty #
  • 6. $ %& ' ( From Prior Year Quarter 12 U.S. 10 Hurricanes 8 Percent 6 4 2 0 -2 -4 -6 2002 2003 2004 2005 2006 2007 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Best Organic Growth in Three Years )
  • 7. $ ' * 2007 2006 Million EPS Million EPS Income from continuing operations, as reported $ 193 $ 1.17 $ 150 $ 0.90 Net income includes the following charges: Asbestos settlement - net $ 1 $ 0.01 $ 3 $ 0.02 Adjusted income from continuing operations $ 194 $ 1.18 $ 153 $ 0.92 2007 2006 Million EPS Million EPS Income from continuing operations, as reported $ 193 $ 1.17 $ 150 $ 0.90 Income from discontinued operations, as reported $ 7 $ 0.04 $ 7 $ 0.04 Net income, as reported $ 200 $ 1.21 $ 157 $ 0.94 +
  • 8. , ' Q407 Q406 Chg % 2007 2006 Chg % $MM (USD) Sales 1,019 836 183 22% 3,811 3,088 723 23% Earnings 143 134 9 7% 563 514 49 10% Fourth Quarter Full Year Solid volume growth 5% 23% sales growth Aerospace volumes 15% ’06 & ’07 acquisitions contributing Architectural paints volumes flat Aerospace volumes 13% 7% earnings growth Architectural paints volumes 1% 10% earnings growth -
  • 9. ' Q407 Q406 Chg % 2007 2006 Chg % $MM (USD) Sales 933 847 86 10% 3,646 3,236 410 13% Earnings 77 71 6 8% 370 349 21 6% PPG OEM Coatings N.A. Volum e Grow th vs. N.A. Vehicle Production Double-digit sales growth 2003 2004 2005 2006 2007 6.0% Strong global growth more 4.0% than offsetting slower U.S. 2.0% 0.0% Diverse, expanding global -2.0% footprint -4.0% N.A. OEM Industry PPG OEM Coatings Auto OEM volumes outperform industry .
  • 10. /* 0* %1 Q407 Q406 Chg % 2007 2006 Chg % $MM (USD) Sales 243 214 29 14% 1,029 904 125 14% Earnings 46 44 2 5% 235 217 18 8% Fourth Quarter Full Year Double-digit sales growth 14% sales growth Reduction in Generation Gen VI roll-out in early V customer inventories 2008 $9MM incremental ad costs 2
  • 11. ' %' Q407 Q406 Chg % 2007 2006 Chg % $MM (USD) Sales 388 339 49 14% 1,539 1,483 56 4% Earnings 53 35 18 51% 243 285 -42 -15% Fourth Quarter Commodity Chemical Y-O-Y Earnings Change 51% Y-o-Y earnings improvement 18 12 Q1 Q2 Higher Q-o-Q gas costs ($0.50) Q3 Q4 ECU price increase announced mid-quarter $MM -29 USD -43
  • 12. Q407 Q406 Chg % 2007 2006 Chg % Sales 291 264 27 10% 1,181 1,150 31 3% Earnings 28 20 8 40% 90 99 -9 -9% Fourth Quarter Full Year Strong volume growth Solid volume results in Fiber Glass and Improved second half Performance Glazings results Improved Fiber Glass Glass Y-O-Y operating margins Earnings Change 8 Q1 Q2 3 Q3 Q4 -4 -16 $MM USD
  • 13. quot; 3 ,' 4 2 +5 2 Returned to Strengthened Shareholders Businesses Capital Dividends Spending Share Acquisitions Repurchases Consistent and Strong Cash Generation
  • 14. / 6 Segment Organic Volume Select SBU and Region Growth (2007) Volume Growth (2007) 0.0% 5.0% 10.0% -5.0% 0.0% 5.0% 10.0% 15.0% # ! $ ! quot; % !! % ! !
  • 15. 7 8 2007 2007 Sales Sales Growth 0.0% 20.0% 40.0% 60.0% & ! #
  • 16. 9 2007 Pro-forma Sales Completed acquisition on January 2, 2008 ROW 5% Final purchase price less Asia Eastern than 9x 2007 EBITDA 10% Europe 6% Q108 interest costs on U.S. & Canada interim financing are 49% incremental ~$40MM Western (USD) Europe 30% Q108 estimated intangible amortization ~$20MM (USD) Integration underway Includes Full Year of SigmaKalon )
  • 17. 1 , Thank you for your interest in PPG Industries, Inc. Investors Vince Morales (412) 434-3740 Media Jack Maurer (412) 434-2181 +
  • 18. ** : -
  • 19. * :; * 4Q 2007 (change from 4Q 2006) Sales Vol. Price Curr. Acq.Other Performance Coatings 22% 5% 1% 6% 10% Industrial Coatings 10% 3% 0% 7% 0% Optical & Specialty Materials 14% 8% 1% 5% 0% Commodity Chemicals 14% 9% 4% 1% 0% Glass 10% 8% -1% 3% 0% Year 2007 (change from 2006) Sales Vol. Price Curr. Acq.Other Performance Coatings 23% 3% 1% 4% 15% Industrial Coatings 13% 3% 0% 6% 4% Optical & Specialty Materials 14% 8% 1% 4% 1% Commodity Chemicals 4% 9% -5% 0% 0% Glass 3% 3% -2% 2% 0% .
  • 20. $ %& ' ( From Prior Year Quarter 25 20 15 Percent 10 5 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 2002 2003 2004 2005 2006 2007 2
  • 21. $ %& ' (7 * From Prior Year Quarter 10 8 6 4 Percent 2 0 -2 -4 -6 -8 -10 2002 2003 2004 2005 2006 2007 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr