PPG Industries
PPG
#1019
Rank
NZ$41.56 B
Marketcap
NZ$187.00
Share price
0.46%
Change (1 day)
4.12%
Change (1 year)
PPG Industries is an American manufacturer of synthetic glass and chemical products, with headquarters in Pittsburgh, Pennsylvania.
Text size:
[Conformed]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1996 Commission File Number 1-1687
PPG INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Pennsylvania 25-0730780
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

One PPG Place, Pittsburgh, 15272
Pennsylvania (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)

Registrant's telephone number, 412-434-3131
including area code:

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ------------------------
<S> <C>
Common Stock--Par Value $1.66 2/3 New York Stock Exchange
Pacific Stock Exchange
Philadelphia Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Philadelphia Stock Exchange
</TABLE>

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]

As of January 31, 1997, 182,268,407 shares of the Registrant's common stock,
with a par value of $1.66 2/3 per share, were outstanding. As of that date,
the aggregate market value of common stock held by non-affiliates was $9,697
million.

DOCUMENTS INCORPORATED BY REFERENCE

<TABLE>
<CAPTION>
INCORPORATED BY
DOCUMENT REFERENCE IN PART NO.
-------- ---------------------
<S> <C>
Portions of PPG Industries, Inc. Annual Report to
Shareholders
for the year ended December 31, 1996................... I, II and IV
Portions of PPG Industries, Inc. Proxy Statement for its
1997
Annual Meeting of Shareholders......................... III
</TABLE>
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PPG INDUSTRIES, INC.
AND CONSOLIDATED SUBSIDIARIES
---------------

As used in this report, the terms "PPG," "Company," and "Registrant" mean PPG
Industries, Inc. and its subsidiaries, taken as a whole, unless the context
indicates otherwise.
---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
PART I
Item 1. Business..................................................... 1
Item 2. Properties................................................... 3
Item 3. Legal Proceedings............................................ 3
Item 4. Submission of Matters to a Vote of Security Holders.......... 3

Executive Officers of the Registrant......................... 4
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.......................................... 5
Item 6. Selected Financial Data...................................... 5
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 5
Item 8. Financial Statements and Supplementary Data.................. 5
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.......................... 5
PART III
Item 10. Directors and Executive Officers of the Registrant........... 6
Item 11. Executive Compensation....................................... 6
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................... 6
Item 13. Certain Relationships and Related Transactions............... 6

PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.......................................................... 7

Signatures ............................................................. 8
</TABLE>

NOTE ON INCORPORATION BY REFERENCE

Throughout this report, various information and data are incorporated by
reference to the Company's 1996 Annual Report to Shareholders (hereinafter
referred to as "the Annual Report to Shareholders"). Any reference in this
report to disclosures in the Annual Report to Shareholders shall constitute
incorporation by reference only of that specific information and data into
this Form 10-K.
PART I

ITEM 1. BUSINESS

PPG Industries, Inc., incorporated in Pennsylvania in 1883, is comprised of
three basic business segments: coatings and resins, glass and chemicals.
Within these business segments, PPG has followed a program of directing its
resources of people, capital and technology in selected areas where it enjoys
positions of leadership. Areas in which resources have been focused are
automotive original, refinish, industrial and architectural coatings; flat
glass, automotive original and replacement glass, aircraft transparencies,
continuous-strand fiber glass; and chlor-alkali and specialty chemicals. Each
of the business segments in which PPG is engaged is highly competitive.
However, the diversification of product lines and worldwide markets served
tend to minimize the impact on total sales and earnings of changes in demand
for a particular product line or in a particular geographic area. Reference is
made to "Business Segment Information" on pages 26 and 27 of the Annual Report
to Shareholders, which is incorporated herein by reference, for financial
information relating to business segments.

COATINGS AND RESINS

PPG is a major manufacturer of protective and decorative coatings. The
coatings industry is highly competitive and consists of a few large firms with
global presence and many smaller firms serving local or regional markets. PPG
competes in its primary markets with the world's largest coatings companies,
most of which have operations in North America and Europe. Product
development, innovation, quality and customer service have been stressed by
PPG and have been significant factors in developing an important supplier
position.

The coatings business involves the supply of protective and decorative
finishes for automotive original equipment, appliances, industrial equipment
and packaging; factory-finished aluminum extrusions and coils for
architectural uses; and other industrial and consumer products. In addition to
supplying finishes to the automotive original-equipment market, PPG supplies
automotive refinishes to the aftermarket, which are primarily sold through
distributors. In the automotive original and industrial portions of the
coatings business, PPG sells directly to a variety of manufacturing companies.
Product performance, technology, quality and customer service are major
competitive factors. The automotive original and industrial coatings are
formulated specifically for the customer's needs and application methods. PPG
also manufactures adhesives and sealants for the automotive industry and metal
pretreatments for automotive and industrial applications.

The architectural finishes business consists primarily of coatings used by
painting and maintenance contractors and by consumers for decoration and
maintenance. PPG's products are sold through independent distributors, paint
dealers, mass merchandisers and home centers. Price, quality and service are
key competitive factors in the architectural finishes market.

Coatings and resins' principal production facilities are concentrated in North
America and Europe. North American production facilities consist of 15 plants
in the United States, one in Canada and two in Mexico. The three largest
facilities are the Cleveland, Ohio, plant, which primarily produces automotive
original coatings; the Oak Creek, Wis., plant, which produces automotive
original and other industrial coatings, and the Delaware, Ohio, plant, which
primarily produces automotive refinishes and certain industrial coatings.
Outside North America, PPG operates three plants in Spain, two plants in
Germany and Italy, and one plant each in China, England, France and Portugal.
These plants produce a variety of automotive and industrial coatings. PPG owns
equity interests in operations in Argentina, Brazil, Hong Kong, South Korea
and Taiwan. Additionally, coatings and resins operates 10 service centers in
the United States, two each in Canada and Mexico, and one in Argentina to
provide just-in-time delivery and service to selected automotive assembly
plants. Nineteen training centers in the United States, six in Europe, five in
Asia and one in Canada are in operation. These centers provide training for
automotive aftermarket refinish customers. Also, four automotive original
coatings application centers that provide testing facilities for customer
paint processes and new products are in operation. The average number of
persons employed by the coatings and resins segment during 1996 was 9,900.

GLASS

PPG is one of the major producers of flat glass, fabricated glass and
continuous-strand fiber glass in the world. PPG's major markets are automotive
original equipment, automotive replacement, residential and commercial
construction, aircraft transparencies, the furniture, marine and electronics
industries, and other markets. Most glass products are sold directly to
manufacturing and construction companies, although in some instances products
are sold directly to independent distributors and through PPG distribution
outlets. Fiber glass products are sold directly to manufacturing companies and
independent distributors. PPG manufactures flat glass by the float process and
fiber glass by the continuous-filament process.

The bases for competition are price, quality, technology, cost and customer
service. The Company competes with

1
six other major producers of flat glass, six other major producers of
fabricated glass and two other major producers of fiber glass throughout the
world.

PPG's principal glass production facilities are concentrated in North America
and Europe. Fifteen plants operate in the United States, of which six produce
flat glass, five produce automotive glass, three produce fiber glass products
and one produces aircraft transparencies. There are three plants in Canada,
two of which produce automotive glass and one produces flat glass. Four plants
operate in Italy; one manufactures automotive and flat glass, one produces
automotive glass, one produces flat glass and another produces aircraft
transparencies. Three plants are located in France; one plant manufactures
automotive and flat glass and two plants produce automotive glass. One plant
in England and one plant in the Netherlands produce fiber glass. PPG owns
equity interests in operations in Canada, France, Mexico, the Netherlands, the
People's Republic of China, Taiwan, the United States and Venezuela and a
majority interest in a glass distribution company in Japan. Additionally,
three satellite operations provide limited manufacturing and just-in-time
service to selected automotive customer locations. The average number of
persons employed by the glass segment during 1996 was 15,900.

CHEMICALS

PPG is a major producer of chlor-alkali and specialty chemicals. The primary
chlor-alkali products are chlorine, caustic soda, vinyl chloride monomer,
chlorinated solvents and chlorinated benzenes. Most of these products are sold
directly to manufacturing companies in the chemical processing, rubber and
plastics, paper, minerals and metals, and water treatment industries. The
primary specialty chemical products are Transitions(registered trademark)
lenses; optical monomers; precipitated silicas for the tire, shoe and battery
separator businesses; surfactants for food emulsification, sugar processing and
personal care products; and phosgene derivatives for the pharmaceutical,
agricultural and fuel additives businesses.

PPG competes with six other major producers of chlor-alkali products. Price,
product availability, product quality and customer service are the key
competitive factors. In the specialty chemicals area, PPG's market share
varies greatly by business; product quality and performance and technical
service are the most critical competitive factors.

Chemicals' principal production facilities are concentrated in North America
with nine plants in the United States and one plant in Canada. The two largest
facilities, located in Lake Charles, La., and Natrium, W. Va., primarily
produce chlor-alkali products. An additional North American plant is expected
to begin producing silica-based compounds in Mexico in March 1997. Outside
North America, PPG operates two plants each in Taiwan and the People's
Republic of China, and one each in Australia, France, Ireland and the
Netherlands. PPG owns equity interests in operations in Japan, Thailand and
the United States. The average number of persons employed by the chemicals
segment during 1996 was 4,600.

RAW MATERIALS

The effective management of raw materials is important to PPG's continued
success. The Company's most significant raw materials are sand, soda ash,
energy, polyvinyl butyral and boron-containing minerals in the glass segment;
titanium dioxide and epoxy resins in the coatings and resins segment; and
energy and ethylene in the chemicals segment. Most of the raw materials used
in production are purchased from outside sources, and the Company has made,
and will continue to make, supply arrangements to meet the planned operating
requirements for the future. For the significant raw material requirements
identified above, and other material, there is more than one source of supply.

RESEARCH AND DEVELOPMENT

Research and development costs, including depreciation of research facilities,
during 1996, 1995 and 1994 were $255 million, $252 million and $233 million,
respectively. Research and development facilities are maintained for each
business segment and each of the facilities conducts research and development
involving new and improved products and processes. PPG owns and operates nine
research and development facilities in the United States, Europe and Japan.
Additional process and product research and development work is also
undertaken at many of the Company's manufacturing plants.

PATENTS

PPG considers patent protection to be important from an overall standpoint.
The Company's business segments are not materially dependent upon any single
patent or group of related patents. PPG received $25 million, $27 million and
$25 million from royalties and the sale of technical know-how during the years
1996, 1995 and 1994, respectively.

BACKLOG

In general, PPG does not manufacture its products against a backlog of orders.
Production and inventory levels are geared primarily to projections of future
demand and the level of incoming orders.

NON-U.S. OPERATIONS

Although PPG has a significant investment in non-U.S. operations, based upon
the extent and location of

2
investments, management believes that the risk associated with its
international operations is not significantly greater than domestic
operations.

EMPLOYEES

The average number of persons employed worldwide by PPG during 1996 was
31,300.

ENVIRONMENTAL MATTERS

Like other companies, PPG is subject to the existing and evolving standards
relating to the protection of the environment. Capital expenditures for
environmental control projects were $18 million, $25 million and $19 million
in 1996, 1995 and 1994, respectively. It is expected that expenditures for
such projects in 1997 will approximate $40 million with similar amounts of
annual expenditures expected in the near future. Although future capital
expenditures are difficult to estimate accurately because of constantly
changing regulatory standards and policies, it can be anticipated that
environmental control standards will become increasingly stringent and costly.

PPG is negotiating with various government agencies concerning 74 National
Priority List ("NPL") and various other cleanup sites. While PPG is not
generally a major contributor of wastes to these sites, each potentially
responsible party or contributor may face governmental agency assertions of
joint and several liability. Generally, however, a final allocation of costs
is made based on relative contributions of wastes to the site. There is a wide
range of cost estimates for cleanup of these sites, due largely to
uncertainties as to the nature and extent of their condition and the methods
that may have to be employed for their remediation. Additionally, remediation
projects have been or may be undertaken at certain of the Company's current
and former plant sites. The Company has established reserves for those sites
where it is probable a liability exists and the amount can be reasonably
estimated. As of Dec. 31, 1996 and 1995, PPG had reserves for environmental
contingencies totaling $91 million and $100 million, respectively. Pretax
charges against income for environmental remediation costs totaled $27 million
in 1996, $49 million in 1995 and $36 million in 1994.

The Company's experience to date regarding environmental matters leads PPG to
believe that it will have continuing expenditures for compliance with
provisions regulating the protection of the environment and for present and
future remediation efforts at waste and plant sites. However, management
anticipates that such expenditures, which will occur over an extended period
of time, will not result in future annual charges against income that are
significantly greater than those recorded in recent years. It is possible,
however, that technological, regulatory and enforcement developments, the
results of environmental studies and other factors could alter this
expectation. In management's opinion, the Company operates in an
environmentally sound manner, is well positioned, relative to environmental
matters, within the industries in which it operates, and the outcome of these
environmental matters will not have a material adverse effect on PPG's
financial position or liquidity. See Commitments and Contingent Liabilities,
including Environmental Matters in Management's Discussion and Analysis for
additional information related to environmental matters.

ITEM 2. PROPERTIES

See "Item 1. Business" for information on PPG's production and fabrication
facilities.

Generally, the Company's plants are suitable and adequate for the purposes for
which they are intended, and overall have sufficient capacity to conduct
business in the upcoming year.

ITEM 3. LEGAL PROCEEDINGS

Securities and Exchange Commission regulations require the disclosure of any
environmental legal proceeding in which a governmental authority is a party
and which may reasonably be expected to involve monetary sanctions in excess
of $100,000. In this regard, the Company voluntarily entered into an agreement
with the U.S. Environmental Protection Agency ("EPA") to participate in the
EPA's Toxic Substances Control Act Section 8(e) Compliance Audit Program (the
"Program"). Under the Program, the Company conducted a self-audit. On Oct. 28,
1992, the Company submitted the first of two final reports pursuant to the
first of two phases of the Program as it then existed. In May 1996, the EPA
eliminated the second phase of the Program. A Consent Agreement and Consent
Order settling the first phase was signed by the Company in September 1996. In
December 1996, the Company paid the EPA $522,000 in final settlement of this
matter.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

3
EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Jerry E. Dempsey (a) 64 Chairman of the Board and Chief Executive Officer since September 1993
Raymond W. LeBoeuf (b) 50 President and Chief Operating Officer since December 1995
Frank A. Archinaco (c) 53 Senior Vice President, Glass since December 1995
Russell L. Crane (d) 56 Senior Vice President, Human Resources and Administration since April 1994
William H. Hernandez (e) 48 Senior Vice President, Finance since January 1995
E. Kears Pollock (f) 56 Senior Vice President, Coatings and Resins since December 1995
Guy A. Zoghby (g) 62 Senior Vice President and General Counsel since April 1994
</TABLE>

(a) Mr. Dempsey was Senior Vice President of WMX Technologies, Inc., and
Chairman of Chemical Waste Management, Inc., prior to his present
position.
(b) Mr. LeBoeuf was Executive Vice President, Group Vice President, Coatings
and Resins and Vice President, Finance prior to his present position.
(c) Mr. Archinaco was Vice President, Glass and Vice President, Automotive and
Aircraft Products prior to his present position.
(d) Mr. Crane was Vice President, Human Resources prior to his present
position.
(e) Mr. Hernandez was Vice President, Finance, Vice President and Controller
and Controller prior to his present position.
(f) Mr. Pollock was Vice President, Coatings and Resins and Vice President,
Automotive Products prior to his present position.
(g) Mr. Zoghby was Vice President and General Counsel prior to his present
position.

The executive officers of the Company are elected annually in April by the
Board of Directors.

4
PART II

Information with respect to the following Items can be found on the indicated
pages of the Annual Report to Shareholders and is incorporated herein by
reference.

<TABLE>
<CAPTION>
PAGE(S)
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<S> <C>
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

Stock Exchange Listings................................................ 40
Quarterly Stock Information............................................ 40

ITEM 6. SELECTED FINANCIAL DATA

The information required by Item 6 is reported in the Eleven-Year
Digest under the captions net sales, income before accounting changes,
cumulative effect of accounting changes, net income, earnings per share
before accounting changes, cumulative effect of accounting changes on
earnings per share, earnings per share, dividends per share, total
assets and long-term debt for the years 1992 through 1996.............. 39

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Management's Discussion and Analysis................................... 21-25

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Independent Auditors' Report........................................... 17
Financial Statements:
Statement of Income for the years ended
December 31, 1996, 1995 and 1994..................................... 18
Balance Sheet, December 31, 1996 and 1995............................. 19
Statement of Cash Flows for the years ended
December 31, 1996, 1995 and 1994..................................... 20
Notes to the Financial Statements..................................... 28-37
</TABLE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

5
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by Item 10 regarding Directors is contained under the
caption "Election of Directors" in the Registrant's definitive Proxy Statement
for its 1997 Annual Meeting of Shareholders (the "Proxy Statement") which will
be filed with the Securities and Exchange Commission, pursuant to Regulation
14A, not later than 120 days after the end of the fiscal year, which
information under such caption is incorporated herein by reference.

The information required by Item 10 regarding Executive Officers is set forth
in Part I of this report under the caption "Executive Officers of the
Registrant."

The information required by Item 405 of Regulation S-K is included under the
caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy
Statement which information under such caption is incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is contained under the captions
"Compensation of Executive Officers" and "Election of Directors--Compensation
of Directors" in the Proxy Statement which information under such captions is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 12 is contained under the caption "Voting
Securities" in the Proxy Statement which information under such caption is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 13 is contained under the caption "Election
of Directors--Other Transactions" in the Proxy Statement which information
under such caption is incorporated herein by reference.

6
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) Financial Statements and Independent Auditors' Report (see Part II, Item 8
of this report (page 5) regarding incorporation by reference from the
Annual Report to Shareholders).

Financial Statement Schedules for years ended December 31, 1996, 1995 and
1994:

The following should be read in conjunction with the previously
referenced financial statements.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report........................................... 9
Schedule II--Valuation and Qualifying Accounts......................... 10
</TABLE>

All other schedules are omitted because they are not applicable.

(b) No reports were filed on Form 8-K during the last quarter of the period
covered by this report.

(c)Exhibits:

3 The Restated Articles of Incorporation as amended, were filed as
Exhibit 3 to the Registrant's Form 10-Q for the quarter ended March
31, 1995, which exhibit is incorporated herein by reference. The
bylaws as amended, were filed as Exhibit 3(ii) to the Registrant's
Form 10-Q for the quarter ended September 30, 1996, which exhibit is
incorporated herein by reference.

4 The Shareholders' Rights Plan was filed as Exhibit 4 on the
Registrant's Form 8-K, dated May 12, 1988, which exhibit is
incorporated herein by reference.

10 The Nonqualified Retirement Plan as amended, was filed as Exhibit 10
to the Registrant's Form 10-Q for the quarter ended March 31, 1996.
The Incentive Compensation and Deferred Income Plan for Key
Employees as amended, was filed as Exhibit 10.4 to the Registrant's
Form 10-K for the year ended December 31, 1995. The Supplemental
Executive Retirement Plan II as amended, and the Change in Control
Employment Agreement were filed as Exhibits 10.2 and 10.5,
respectively, to the Registrant's Form 10-Q for the quarter ended
September 30, 1995. The 1984 Stock Option Plan was filed as Exhibit
10 to the Registrant's Form 10-Q for the quarter ended March 31,
1992. All such exhibits are incorporated by reference.

*10.1 Deferred Compensation Plan for Directors as amended through November
1, 1996.

*10.2 Directors' Common Stock Plan as amended through November 1, 1996.

*10.3 Deferred Compensation Plan as amended through November 1, 1996.

11 Computation of Earnings Per Share for the Five Years Ended December
31, 1996.

13 Company's 1996 Annual Report to Shareholders. (Except for the pages
and information therein expressly incorporated by reference in this
Form 10-K, the Annual Report to Shareholders is provided solely for
the information of the Commission and is not to be deemed "filed" as
part of the Form 10-K.)

21 Subsidiaries of the Registrant.

23 Consent of Independent Auditors.

24 Powers of Attorney.

27 Financial Data Schedule.

* Items referred to in Exhibit 10 and incorporated by reference and Exhibits
10.1, 10.2 and 10.3 are either management contracts, compensatory plans or
arrangements required to be filed as an exhibit hereto pursuant to Item
14(c) of Form 10-K.

7
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized, on February 20, 1997.

PPG INDUSTRIES, INC.
(Registrant)
By /s/ W. H. Hernandez
...............................................
W. H. Hernandez, Senior Vice President,
Finance

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant
and in the capacities indicated, on February 20, 1997.

SIGNATURE CAPACITY

/s/ J. E. Dempsey Director, Chairman of the Board and Chief
..................... Executive Officer
J. E. Dempsey

/s/ W. H. Hernandez Senior Vice President, Finance (Principal
..................... Financial and Accounting Officer)
W. H. Hernandez

E. B. Davis, Jr.
Director

M. J. Hooper
Director

A. J. Krowe
Director


R. W. LeBoeuf
Director


By /s/ W. H. Hernandez
S. C. Mason ...................................
Director W. H. Hernandez, Attorney-in-Fact

H. A. McInnes
Director

R. Mehrabian
Director

V. A. Sarni
Director

T. J. Usher
Director

D. G. Vice
Director

D. R. Whitwam
Director

8
INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of PPG
Industries, Inc.:

We have audited the balance sheet of PPG Industries,
Inc. and subsidiaries as of December 31, 1996 and
1995, and the related statements of income and cash
flows for each of the three years in the period ended
December 31, 1996, and have issued our report thereon
dated January 16, 1997; such financial statements and
report are included in your 1996 Annual Report to
Shareholders and are incorporated herein by
reference. Our audits also included financial
statement schedule II, Valuation and Qualifying
Accounts, of PPG Industries, Inc. and subsidiaries
for the years ended December 31, 1996, 1995 and 1994.
The financial statement schedule is the
responsibility of the Company's management. Our
responsibility is to express an opinion based on our
audits. In our opinion, such financial statement
schedule, when considered in relation to the basic
financial statements taken as a whole, presents
fairly in all material respects the information set
forth therein.

DELOITTE & TOUCHE LLP

Pittsburgh, Pennsylvania
January 16, 1997

9
PPG INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO
BEGINNING COSTS AND BALANCE AT
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS(/1/) END OF YEAR
---------- ---------- --------------- -----------
(MILLIONS)
<S> <C> <C> <C> <C>
1996
Deducted from assets to
which they apply:
Allowance for doubtful
accounts ____________ $28.2 $12.9 $15.5 $25.6
===== ===== ===== =====
1995
Deducted from assets to
which they apply:
Allowance for doubtful
accounts ____________ $26.5 $ 8.1 $ 6.4 $28.2
===== ===== ===== =====
1994
Deducted from assets to
which they apply:
Allowance for doubtful
accounts ____________ $25.6 $12.6 $11.7 $26.5
===== ===== ===== =====
</TABLE>
---------------------

(/1/) Notes and accounts receivable written off as uncollectible, net of
recoveries, changes attributable to foreign currency translation, and
activity related to businesses sold.

10
PPG INDUSTRIES, INC.PPG INDUSTRIES, INC.
AND CONSOLIDATED SUBSIDIARIES
-----------------------------

INDEX TO EXHIBITS

Exhibit Incorporated by Reference
- ------- -------------------------

3 The Restated Articles Exhibit 3 - Form 10-Q for the quarter
of Incorporation. ended March 31, 1995.

3 The Bylaws, as amended. Exhibit 3(ii) - Form 10-Q for the quarter
ended September 30, 1996.

4 The Shareholders' Rights Exhibit 4 - Form 8-K, dated May 12, 1988.
Plan.

10 The Nonqualified Retire- Exhibit 10 - Form 10-Q for the quarter
ment Plan. ended March 31, 1996.

10 The Incentive Compen- Exhibit 10.4 - Form 10-K for the year ended
sation and Deferred December 31, 1995.
Income Plan For Key
Employees, as amended.

10 The Supplemental Exhibit 10.2 - Form 10-Q for the quarter
Executive Retirement ended September 30, 1995.
Plan II.

10 Change in Control Exhibit 10.5 - Form 10-Q for the quarter
Employment Agreement. ended September 30, 1995.

10 1984 Stock Option Plan. Exhibit 10 - Form 10-Q for the quarter
ended March 31, 1992.
Exhibit                        Description
- ------- -----------

10.1 Deferred Compensation Plan for Directors as amended through
November 1, 1996.

10.2 Directors' Common Stock Plan as amended through November 1, 1996.

10.3 Deferred Compensation Plan as amended through November 1, 1996.

11 Computation of Earnings Per Share for the Five Years Ended
December 31, 1996.

13 Company's 1996 Annual Report to Shareholders.

21 Subsidiaries of the Registrant.

23 Consent of Independent Auditors.

24 Powers of Attorney.

27 Financial Data Schedule.