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PPG Industries Annual Report, Year Ended Dec 31, 2001

Filing Date
Filed February 22, 2002
Period End
December 31, 2001
Security
PPG
In the record · 2016–202610-K1210-Q338-K141

PPG filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 141 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed February 22, 2002. Cited figures are marked; the original filing is the authoritative source.

PPG Industries, Inc. reported 2001 net sales of $8.17 billiona, down from $8.63 billion in 2000, with the decline driven mainly by lower volumes across all three segments (coatings, glass and chemicals) and a stronger U.S. dollar.

Net income fell to $387 millionb, or $2.29 per diluted share, from $620 million, or $3.57, in 2000. Results absorbed a $101 million pretax restructuring charge taken in the first quarter of 2001, and the company said the North American recession and weak global economy continued into early 2002. The company plans a further restructuring charge of $60 million to $90 million before taxes in the first quarter of 2002.

It expects pension and other postretirement benefit costs to rise by about $130 millionc in 2002, reducing earnings per share by about $0.49, and it expects SFAS No. 142 to add roughly $30 million, or $0.18 per share, to 2002 net income. Natural gas costs were a major pressure on the glass and chemicals segments, with each one-dollar change per mmbtu estimated to affect annual operating costs by about $60 million. Legal exposure is a notable investor concern.

On February 14, 2002, a federal jury awarded Marvin Windows and Doors $136 milliond on a breach of warranty claim, which PPG intends to appeal. PPG also faces about 116,000 asbestos-related claims tied to Pittsburgh Corning Corporation, which filed for Chapter 11 in April 2000, and it is named in antitrust suits in the glass and automotive refinish industries. The company states that, aside from any voluntary asbestos settlement, these matters should not materially affect its consolidated financial position or liquidity, though results of a particular period could be affected.

02—Key points

Key Highlights

  1. Net sales fell 5% to $8.17 billion in 2001 from $8.63 billion, mainly from lower volumes across all business segments.
  2. Net income declined to $387 million ($2.29 per diluted share) from $620 million ($3.57) in 2000, after a $101 million pretax restructuring charge in Q1 2001.
  3. Gross profit percentage decreased to 37.1% from 38.2%, reflecting higher raw material costs including natural gas and unfavorable sales mix in glass and chemicals.
  4. Segment operating income: coatings $495 million, glass $255 million, chemicals $91 million, versus $685 million, $377 million and $174 million in 2000.
  5. Cash from operating activities rose to $1.06 billion in 2001 from $870 million in 2000; dividends paid totaled $283 million.
  6. Marvin Windows and Doors jury verdict of $136 million (February 14, 2002) on a breach of warranty claim; PPG plans to appeal.
  7. Pension and other postretirement benefit costs expected to rise by about $130 million in 2002, reducing EPS by about $0.49.

03—Questions

Frequently Asked Questions

  1. How did PPG perform financially in 2001?

    Net sales were $8.17 billion, down 5% from $8.63 billion in 2000. Net income was $387 million, or $2.29 per diluted share, compared with $620 million, or $3.57, a year earlier. Results were affected by lower volumes, a weaker gross profit percentage and a $101 million pretax restructuring charge in the first quarter.

  2. What is the outlook for 2002?

    PPG said the North American recession and general global economic weakness continued as 2002 began, and the timing of recovery was uncertain. It planned a restructuring charge of $60 million to $90 million before taxes in the first quarter of 2002. It expected pension and benefit costs to rise by about $130 million, and it expected goodwill amortization elimination under SFAS No. 142 to add about $30 million, or $0.18 per share, to net income.

  3. What are the main legal risks facing PPG?

    The most significant item is the $136 million Marvin Windows and Doors jury award, which PPG intends to appeal. PPG is also a defendant in roughly 116,000 asbestos-related claims linked to Pittsburgh Corning Corporation, which is in Chapter 11 bankruptcy, and in antitrust suits in the glass and automotive refinish industries. The company believes these matters will not materially affect its consolidated financial position or liquidity.

  4. How exposed is PPG to natural gas prices?

    The filing says each one-dollar change in the price of natural gas per mmbtu could have a direct impact of approximately $60 million on annual operating costs. The average monthly market price was $4.38 per mmbtu in 2001, compared with $3.91 in 2000, and ended 2001 at $2.54. PPG uses hedging, manufacturing improvements and fuel switching to manage this risk.

  5. How strong is PPG's balance sheet?

    Total debt, including capital leases, was 44% of total debt and equity at December 31, 2001, down from 49% a year earlier. Short-term and long-term debt declined during 2001, and shareholders' equity was $3.08 billion. Management stated that cash from operations and debt capacity are expected to remain sufficient to fund capital spending, dividends and operating needs.

04—Continue

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