PPG Industries, Inc.

    Fourth Quarter and Full Year 2008
            Financial Results

         Charles E. Bunch, Chai...
Forward-Looking Statement
Statements contained herein relating to matters that are not historical facts are forward-lookin...
Agenda

 Opening Remarks

 Financial Review

 2008 Recap & 2009 Perspectives

 Question & Answer Session
 Q   ti     A    ...
Highlights – Fourth Quarter
Rapid deterioration in end-use markets (30% of portfolio)
  Industrial end-use markets
  Autom...
Highlights – Full Year 2008
All-time record sales
  Sales in coatings segments up nearly 50%
  Double-digit percent growth...
Fourth Quarter PPG Sales
    3,500
                                                        663         230

              ...
Full Year PPG Sales
    17,000

                                                          3,418        230      15,849
   ...
Adjusted Earnings-Per-Share *
                                                                $6.00
  $1.50

             ...
Volume Performance
                   Total PPG Volumes            Regional / Business Unit Volumes
                      ...
2008 Inflation & Selling Price
                                                          Coatings Raw Materials Inflation
...
Industrial Coatings
     $MM (USD)   Q408   Q407   Chg     %      2008    2007    Chg     %

     Sales        767    933 ...
Performance Coatings
      $MM (USD)   Q408   Q407   Chg   %      2008    2007    Chg   %

      Sales       1,104 1,019  ...
Architectural EMEA
       $MM (USD)    Q408   Q407    Chg    %      2008    2007    Chg    %

       Sales         414    ...
Optical & Specialty Materials
    $MM (USD)   Q408   Q407   Chg    %        2008   2007   Chg   %

    Sales        239   ...
Commodity Chemicals
    $MM (USD)   Q408   Q407   Chg   %       2008   2007   Chg   %

    Sales        419    388    31  ...
Glass
                       Q408    Q407      Chg     %      2008    2007    Chg    %

Sales                    245     5...
First Quarter 2009 Key Topics

 Global demand and currency rates

 PPG tax rate

 Pension & OPEB inflation

 Lower i
 L   ...
Cash Generation
                 Quarterly                               Annual
                                          ...
Cash Deployment
                                  Acquisitions *,
                                      $100
             ...
Cash and Liquidity
              Cash on Hand                        Term Debt Profile
                                   ...
For More Information


Thank you for your interest in PPG Industries, Inc.

                   Investors
          Vince M...
Appendix




 PPG 2007 and 2008 Fourth Quarter
                           Q
  and Full Year Financial Results
   Regulatio...
Adjusted EPS Reconciliation
   Fourth Quarter
                                                  2008                  2007...
Adjusted EPS Reconciliation
   Full Year - 2008

                                                         $$         EPS
 ...
Adjusted EPS Reconciliation
   Full Year - 2007
                                    Continuing       Discontinued         ...
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4Q 2008 EARNINGS SLIDESFINAL

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4Q 2008 EARNINGS SLIDESFINAL

  1. 1. PPG Industries, Inc. Fourth Quarter and Full Year 2008 Financial Results Charles E. Bunch, Chairman and Chief Executive Officer William H. Hernandez, Sr. Vice President and Chief Financial Officer Information current as of January 16, 2009 1
  2. 2. Forward-Looking Statement 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 13(a), 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 global economic conditions, 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 PPG s 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 res lts compared with those anticipated in the for ard looking statements co ld incl de results ith forward-looking 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 16, 2009, and any distribution of this presentation after that date is not intended and will not be construed as updating y p p g or confirming such information. 2
  3. 3. Agenda Opening Remarks Financial Review 2008 Recap & 2009 Perspectives Question & Answer Session Q ti A S i 3
  4. 4. Highlights – Fourth Quarter Rapid deterioration in end-use markets (30% of portfolio) Industrial end-use markets Automotive OEM Stable/growing results in other segments (70% of portfolio) Executing on restructuring program Strong cash performance 4
  5. 5. Highlights – Full Year 2008 All-time record sales Sales in coatings segments up nearly 50% Double-digit percent growth in Optical & Specialty Materials 40% increase in cash generation Improved liquidity; debt repayment ahead of schedule SigmaKalon acquisition exceeding targets g q gg Dividend increased for 37th consecutive year 5
  6. 6. Fourth Quarter PPG Sales 3,500 663 230 169 389 3,250 3,188 3,104 3,000 129 2,750 2,500 Q407 Price Volume Currency Acquisitions Divest. Q408 Volume decline was major factor in the quarter 6 Millions of USD
  7. 7. Full Year PPG Sales 17,000 3,418 230 15,849 16,000 16 000 15,000 14,000 13,000 495 327 273 12,220 12,000 , 11,000 2007 Price Volume Currency Acquisitions Divest. 2008 Increase of 30% in full year sales 7 Millions of USD
  8. 8. Adjusted Earnings-Per-Share * $6.00 $1.50 $1.22 $5.34 $5.50 $5 50 $1.25 $1 25 $5.00 $4.59 $1.00 $4.50 $4 50 $0.75 $4.00 $0.41 $0 41 $0.50 $0 50 $3.50 $0.25 $3.00 $2.50 $0.00 Q4, 2007 Q4, 2008 YTD 2007 YTD 2008 Solid performance in difficult economic environment 8 * Adjusted EPS from continuing operations – see presentation appendix for reconciliation to reported EPS
  9. 9. Volume Performance Total PPG Volumes Regional / Business Unit Volumes Q4, 2008 200 U.S. U S & Canada 100 0 Europe -100 Asia -200 -300 Industrial -400 Coatings Auto OEM -500 Coatings Sept Q4, Full YTD 2008 Year -30% -20% -10% 0% Millions of USD Q4 – YOY change Severe and broad Q4 declines resulted in negative full year 9
  10. 10. 2008 Inflation & Selling Price Coatings Raw Materials Inflation C f Selling price gains exceed inflation Expected Range & Actual 200 Q1 2% 4% Q2 100 +495 Q3 6% 4% -465 0 Q4 5% 8% % change Y-O-Y -100 Natural Gas Cost ($$ per MMBTU) (p ) -200 12.0 10.50 11.0 -300 9.50 9 50 10.0 10 0 8.50 9.0 -400 8.00 7.75 7.50 7.50 8.0 7.00 7.0 70 -500 6.0 Cost Inflation Selling Price Q1 Q2 Q3 Q4 10 2007 2008 Millions of USD
  11. 11. Industrial Coatings $MM (USD) Q408 Q407 Chg % 2008 2007 Chg % Sales 767 933 -166 -18% 3,999 3,646 353 10% Earnings -40 40 77 -117 117 -152% 152% 212 370 -158 158 -43% 43% Fourth Quarter Full Year Severe drop (>20%) in Majority of volume and global end-market demand earnings erosion occurred in Q4 Automotive OEM Consumer Electronics 2008 Segment Volume Trend General industrial Q1 Impactful to all regions Q2 Raw material inflation Q3 Restructuring ti iti R t t i activities Q4 underway -25% -20% -15% -10% -5% 0% 5% 11
  12. 12. Performance Coatings $MM (USD) Q408 Q407 Chg % 2008 2007 Chg % Sales 1,104 1,019 85 8% 4,716 3,811 905 24% Earnings 143 143 0 0% 582 563 19 3% Fourth Quarter Full Year Flat earnings in difficult Sales/earnings growth environment despite weaker economy Lower auto refinish (miles Solid pricing gains driven ↓) and architectural Acquisition results paint volumes exceeded targets Aerospace affected by Aerospace and P t ti A d Protective Boeing employee strike & Marine organic growth Tight cost controls 12
  13. 13. Architectural EMEA $MM (USD) Q408 Q407 Chg % 2008 2007 Chg % Sales 414 -- -- -- 2,249 -- -- -- Earnings 0 -- -- -- 141 -- -- -- Fourth Quarter Full Year Q4 - seasonally slowest period Earnings include $120MM non-cash amortization & Eastern Europe grew, Western depreciation Europe (U.K.) slowed SigmaKalon Acquisition ‘07 & ‘08 Sales Seasonality Significant strategic milestone and success Exceeded financial targets Strong cash generation Q1 Q2 Q3 Q4 13
  14. 14. Optical & Specialty Materials $MM (USD) Q408 Q407 Chg % 2008 2007 Chg % Sales 239 243 -4 -2% 1,134 1,029 105 10% Earnings 33 46 -13 -28% 244 235 9 4% Fourth Quarter Full Year Optical volumes up in all Continued optical sales regions growth in key markets Gen VI roll-out in Europe roll out Results confirm Gen VI underway roll-out successful Silicas volumes down Brand building and sales ~20% ( t end-market) 20% (auto d k t) aided b hi h selling & id d by higher lli marketing 14
  15. 15. Commodity Chemicals $MM (USD) Q408 Q407 Chg % 2008 2007 Chg % Sales 419 388 31 8% 1,837 1,539 298 19% Earnings 88 53 35 66% 340 243 97 40% Fourth Quarter Full Year Very solid quarter Excellent performance ECU pricing stable Average natural gas throughout quarter costs ~$9.00/MMBTU $9 00/MMBTU Industrial demand dropped Stellar cash generation each month Inventory levels low 15
  16. 16. Glass Q408 Q407 Chg % 2008 2007 Chg % Sales 245 521 -276 -53% 1,914 2,195 -281 -13% Earnings E i -7 33 -40 40 -121% 121% 70 0 138 -68 68 -49% 49% Pro-forma (excluding Auto Glass): Sales 245 291 -46 -16% 1,190 1,181 9 1% Earnings -7 28 -35 -125% 54 90 -36 -40% Fourth Quarter Full Year Fiber Glass weaker due to Auto Glass sale complete lower industrial demand Earnings decline all Performance Glazings occurred in Q4 results solid Manufacturing costs Restructuring actions reduced by $25MM underway 16
  17. 17. First Quarter 2009 Key Topics Global demand and currency rates PPG tax rate Pension & OPEB inflation Lower i L input costs t t Benefit from PPG cost reductions 17
  18. 18. Cash Generation Quarterly Annual 1,600 700 ~ 40% 600 1,400 increase 500 1,200 400 1,000 1 000 300 800 200 600 100 400 0 Q1 Q2 Q3 Q4 200 -100 0 -200 2007 2008 2007 2008 Significant step change in cash generation Millions of USD – Cash from operations 18
  19. 19. Cash Deployment Acquisitions *, $100 Pension Contr. Capital (Pre tax), (Pre-tax) $125 Spending, $375 Debt Repayment, Dividends, $650 $343 Well ahead on debt repayment commitments Approx. MM of USD – * Excludes SigmaKalon Acquisition ($1.6B, plus $1.5B assumed debt) 19
  20. 20. Cash and Liquidity Cash on Hand Term Debt Profile 800 600 1,200 600 400 1,000 116 200 71 800 0 2009 2010 2011 2012 2013 600 Other 400 $200MM – Commercial paper $550MM – Euro facilities 200 $0 drawn on U.S. $1B revolver 0 Q2, 2008 Q3, 2008 Q4, 2008 Well below debt covenant level Considerable financial flexibility Millions of USD 20
  21. 21. For More Information Thank you for your interest in PPG Industries, Inc. Investors Vince Morales (412) 434-3740 Media Jeremy Neuhart (412) 434-3046 21
  22. 22. Appendix PPG 2007 and 2008 Fourth Quarter Q and Full Year Financial Results Regulation G Reconciliation 22
  23. 23. Adjusted EPS Reconciliation Fourth Quarter 2008 2007 $$ EPS $$ EPS Net Income as Reported e co e epo ed 71 $0 3 $0.43 $ 00 $200 $ $1.21 Net Charge for Asbestos Settlement (3) (0.02) 1 0.01 Adjusted Net Income 68 $0.41 201 $1.22 Amounts in Millions of USD except EPS 23
  24. 24. Adjusted EPS Reconciliation Full Year - 2008 $$ EPS Net Income as Reported 538 $3.25 Business Restructuring Charge 110 0.67 Acquisition-Related Costs 89 0.54 Depreciation Catch-up Charge 11 0.07 Divestiture-Related Benefit Costs 12 0.07 Net Charge for Asbestos Settlement 2 0.01 Gain on Divestiture (Auto Glass & Services Business) (3) (0.02) Adjusted Net Income 759 $4.59 Amounts in Millions of USD except EPS 24
  25. 25. Adjusted EPS Reconciliation Full Year - 2007 Continuing Discontinued Total $$ EPS $$ EPS $$ EPS Net Income as Reported e co e epo ed 856 $5 6 $5.16 () (22) $(0 3) $(0.13) 83 834 $5 03 $5.03 Acquisition-Related Costs 4 0.03 4 0.03 Glass Pension Curtailment 11 0.06 11 0.06 Losses Fine Chemical Divestiture 19 0.11 19 0.11 Charge Net Charge for Asbestos 15 0.09 15 0.09 Settlement Adjusted Net Income 886 $5.34 (3) $(0.02) 883 $5.32 Amounts in Millions of USD except EPS 25
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