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PPG Industries Annual Report, Year Ended Dec 31, 2004

Filing Date
Filed February 17, 2005
Period End
December 31, 2004
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 17, 2005. Cited figures are marked; the original filing is the authoritative source.

PPG Industries, Inc.'s 2004 Form 10-K reports net sales of $9.5 billiona in 2004, up from $8.8 billion in 2003.

Sales rose 7% on improved volumes across all segments and 3% from foreign currency translation, offset by a 1% decline from lower selling prices. Net income was $683 millionb, up $189 million from 2003, and diluted earnings per share were $3.95, up $1.06. Gross profit margin held steady at 36.9%, and the effective tax rate fell to 30.29% from 34.76%.

By segment, coatings sales were $5.3 billionc with operating income of $777 million, glass sales were $2.2 billion with operating income of $169 million, and chemicals sales were $2.0 billion with operating income of $291 million. Management highlighted high natural gas costs as a continuing drag, with each one-dollar change per mmbtu estimated to affect annual operating costs by $60 million to $70 million. It also flagged rising coatings raw material costs and tight chlor-alkali supply that lifted ECU prices in the second half of 2004.

Cash from operating activities was $1,018 milliond, and the ratio of total debt to total debt and equity fell to 27% from 36%. The company repaid over $350 million of debt, repurchased $100 million of stock in 2004, and announced plans to repurchase up to $500 million by year-end 2005. Ongoing legal exposures include the Pittsburgh Corning asbestos settlement, which is pending bankruptcy court approval, and a $166 million Marvin Windows judgment under appeal, along with antitrust suits in flat glass and automotive refinish.

02—Key points

Key Highlights

  1. Net sales rose 9% to $9.5 billion in 2004 from $8.8 billion in 2003, with 7% from volume growth and 3% from currency translation.
  2. Net income increased $189 million to $683 million, and diluted EPS rose $1.06 to $3.95.
  3. Coatings operating income increased to $777 million; chemicals operating income rose to $291 million; glass operating income rose to $169 million.
  4. Cash from operations was $1,018 million, and total debt to total capitalization fell to 27% from 36%.
  5. The company repaid over $350 million of debt and repurchased $100 million of common stock, with plans to repurchase up to $500 million in 2005.
  6. Each one-dollar change in natural gas price per mmbtu is estimated to affect annual operating costs by $60 million to $70 million.
  7. A $166 million Marvin Windows judgment, including interest, is under appeal, and the asbestos settlement remains subject to bankruptcy court approval.

03—Questions

Frequently Asked Questions

  1. How did PPG's profitability change in 2004?

    Net income rose to $683 million from $494 million in 2003, and diluted EPS increased to $3.95 from $2.89. Gross profit rose $279 million, and the effective tax rate fell to 30.29% from 34.76%.

  2. Which segment contributed most to operating income?

    Coatings reported the largest operating income at $777 million on $5.3 billion of sales. Chemicals reported $291 million and glass reported $169 million.

  3. What are the main cost pressures PPG identified for 2005?

    Management cited natural gas costs, coatings raw material costs, and pension and other postretirement benefit costs. Coatings raw material costs were expected to rise at least $50 million in the first quarter of 2005 year over year.

  4. What is the status of the asbestos settlement and major litigation?

    The PPG Settlement Arrangement will not take effect until 30 days after the Pittsburgh Corning reorganization plan is finally approved. PPG has no payment obligation until then. The Marvin Windows judgment totaled approximately $166 million including interest as of December 31, 2004, and PPG has appealed it.

  5. How is PPG returning cash to shareholders?

    PPG paid $307 million in dividends in 2004, marking the 33rd consecutive year of increased dividends. It repurchased $100 million of stock in 2004 and announced plans to repurchase up to $500 million in 2005.

04—Continue

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