PPG Industries Inc.

10/28/2026 | Press release | Distributed by Public on 10/28/2026 12:04

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes thereto included in the condensed consolidated financial statements in Part I, Item 1, "Financial Statements," of this report and in conjunction with the 2025 Form 10-K.
Highlights
Net sales were approximately $4.4 billion for the three months ended September 30, 2026, an increase of 7% compared to the prior year primarily due to higher selling prices, higher sales volumes and the favorable impact of foreign currency translation and acquisitions.
Income before income taxes was $631 million for the three months ended September 30, 2026, an increase of $75 million compared to the prior year. Earnings growth in the aerospace, architectural coatings Latin America, and automotive refinish coatings businesses was partially offset by lower sales volumes in automotive OEM coatings.
Results of Operations
Three Months Ended
September 30 		Percent Change Nine Months Ended
September 30 		Percent Change
($ in millions, except percentages) 2026 2025 2026 vs. 2025 2026 2025 2026 vs. 2025
Net sales $4,353 $4,082 6.6 % $12,778 $11,961 6.8 %
Cost of sales, exclusive of depreciation and amortization $2,589 $2,426 6.7 % $7,551 $7,000 7.9 %
Selling, general and administrative $876 $824 6.3 % $2,692 $2,534 6.2 %
Depreciation $108 $106 1.9 % $321 $297 8.1 %
Amortization $26 $32 (18.8) % $79 $97 (18.6) %
Research and development, net $106 $106 - % $326 $314 3.8 %
Interest expense $67 $65 3.1 % $199 $183 8.7 %
Interest income ($45) ($42) 7.1 % ($124) ($129) (3.9) %
Other (income)/charges, net ($5) $9 N/A $17 $9 88.9 %
Net Sales by Region
Three Months Ended
September 30 		Percent Change Nine Months Ended
September 30 		Percent Change
($ in millions, except percentages) 2026 2025 2026 vs. 2025 2026 2025 2026 vs. 2025
United States and Canada $1,446 $1,374 5.2 % $4,227 $4,153 1.8 %
EMEA 1,442 1,375 4.9 % 4,412 4,081 8.1 %
Asia Pacific 846 768 10.2 % 2,364 2,142 10.4 %
Latin America 619 565 9.6 % 1,775 1,585 12.0 %
Total $4,353 $4,082 6.6 % $12,778 $11,961 6.8 %
Three Months Ended September 30, 2026
Net sales increased $271 million due to the following:
● Higher selling prices (+3%)
● Higher sales volumes (+2%)
● Favorable foreign currency translation (+1%)
● Acquisitions (+1%)
For specific business results, see the Performance of Reportable Business Segments section within Item 2 of this Form 10-Q.
Cost of sales, exclusive of depreciation and amortization, increased $163 million primarily due to raw material cost inflation, higher sales volumes and the unfavorable impact of foreign currency translation.
Selling, general and administrative expense increased $52 million primarily due to overhead cost inflation and the unfavorable impact of foreign currency translation, partially offset by productivity actions.
Other (income)/charges, net changed by $14 million primarily due to a gain on the sale of a non-core business and lower environmental remediation expense in the third quarter of 2026.
Nine Months Ended September 30, 2026
Net sales increased $817 million due to the following:
● Favorable foreign currency translation (+3%)
● Higher selling prices (+2%)
● Higher sales volumes (+1%)
● Acquisitions (+1%)
For specific business results, see the Performance of Reportable Business Segments section within Item 2 of this Form 10-Q.
Cost of sales, exclusive of depreciation and amortization, increased $551 million primarily due to raw material cost inflation, higher sales volumes and the unfavorable impact of foreign currency translation.
Selling, general and administrative expense increased $158 million primarily due to overhead cost inflation and the unfavorable impact of foreign currency translation, partially offset by productivity actions.
Depreciation expense increased $24 million primarily due to higher capital spending in 2025.
Other (income)/charges, net increased by $8 million primarily due to higher environmental remediation charges and the settlement of a legal matter.
Effective Tax Rate and Earnings Per Diluted Share
Three Months Ended
September 30 		Percent Change Nine Months Ended
September 30 		Percent Change
($ in millions, except percentages and amounts per share) 2026 2025 2026 vs. 2025 2026 2025 2026 vs. 2025
Income tax expense $153 $118 29.7 % $412 $380 8.4 %
Effective tax rate 24.2 % 21.2 % 3.0 % 24.0 % 22.9 % 1.1 %
Adjusted effective tax rate, continuing operations* 24.2 % 22.1 % 2.1 % 24.0 % 23.3 % 0.7 %
Earnings per diluted share, continuing operations $2.12 $1.96 8.2 % $5.78 $5.57 3.8 %
Adjusted earnings per diluted share* $2.25 $2.13 5.6 % $6.31 $6.06 4.1 %
*See Regulation G Reconciliation below
For the three and nine months ended September 30, 2026, Earnings per diluted share, continuing operations and Adjusted earnings per diluted share increased year over year primarily due to higher net sales, excluding the impact of currency, acquisitions and divestitures ("organic sales"), the favorable impact of foreign currency translation and productivity actions, partially offset by the impact of cost inflation.
Regulation G Reconciliations - Results from Operations
PPG believes investors' understanding of the Company's performance is enhanced by the disclosure of net income from continuing operations, earnings per diluted share from continuing operations, PPG's effective tax rate and segment income adjusted for certain items along with segment income before interest, taxes, depreciation and amortization ("Segment EBITDA"). PPG's management considers this information useful in providing insight into the Company's ongoing performance because it excludes the impact of items that cannot reasonably be expected to recur on a quarterly basis or that are not attributable to our primary operations. Net income from continuing operations, earnings per diluted share from continuing operations, the effective tax rate and segment income adjusted for these items along with segment EBITDA are not recognized financial measures determined in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and should not be considered a substitute for net income from continuing operations, earnings per diluted share from continuing operations, the effective tax rate, segment income or other financial measures as computed in accordance with U.S. GAAP. In addition, adjusted net income, adjusted earnings per diluted share, the adjusted effective tax rate and segment EBITDA may not be comparable to similarly titled measures as reported by other companies.
Income before income taxes from continuing operations is reconciled to adjusted income before income taxes from continuing operations, the effective tax rate from continuing operations is reconciled to the adjusted effective tax rate from continuing operations and net income from continuing operations (attributable to PPG) and earnings per share - assuming dilution (attributable to PPG) are reconciled to adjusted net income from continuing operations (attributable to PPG) and adjusted earnings per share - assuming dilution below.
Three Months Ended September 30, 2026
($ in millions, except percentages and per share amounts) Income Before Income Taxes Income Tax Expense Effective Tax Rate Net Income (attributable to PPG)
Earnings Per Diluted Share(a)
As reported, continuing operations $631 $153 24.2 % $473 $2.12
Adjusted for:
Acquisition-related amortization expense 26 6 24.5 % 20 0.09
Business restructuring-related costs, net(b)
15 4 21.9 % 11 0.05
Resolution of tax matter(c)
3 1 30.0 % 2 0.01
Portfolio optimization(d)
(3) (1) 24.3 % (2) (0.01)
Insurance recovery(e)
(3) (1) 24.3 % (2) (0.01)
Adjusted, continuing operations, excluding certain items $669 $162 24.2 % $502 $2.25
Three Months Ended September 30, 2025
($ in millions, except percentages and per share amounts) Income Before Income Taxes Income Tax Expense Effective Tax Rate Net Income (attributable to PPG)
Earnings Per Diluted Share(a)
As reported, continuing operations $556 $118 21.2 % $444 $1.96
Adjusted for:
Acquisition-related amortization expense 32 8 24.4 % 24 0.11
Business restructuring-related costs, net(b)
11 4 38.5 % 7 0.03
Portfolio optimization(d)
2 2 94.5 % - -
Impairment and other related charges, net(f)
24 6 24.3 % 6 0.03
Adjusted, continuing operations, excluding certain items $625 $138 22.1 % $481 $2.13
Nine Months Ended September 30, 2026
($ in millions, except percentages and per share amounts) Income Before Income Taxes Income Tax Expense Effective Tax Rate Net Income (attributable to PPG)
Earnings Per Diluted Share(a)
As reported, continuing operations $1,717 $412 24.0 % $1,294 $5.78
Adjusted for:
Acquisition-related amortization expense 79 19 24.4 % 60 0.27
Business restructuring-related costs, net(b)
33 8 22.6 % 25 0.11
Resolution of tax matter(c)
3 1 30.0 % 2 0.01
Portfolio optimization(d)
9 2 24.9 % 7 0.03
Insurance recovery(e)
(3) (1) 24.3 % (2) (0.01)
Legacy environmental remediation charges(f)
25 6 24.3 % 19 0.08
Legal settlement(g)
11 3 24.3 % 8 0.04
Adjusted, continuing operations, excluding certain items $1,874 $450 24.0 % $1,413 $6.31
Nine Months Ended September 30, 2025
($ in millions, except percentages and per share amounts) Income Before Income Taxes Income Tax Expense Effective Tax Rate Net Income (attributable to PPG)
Earnings Per Diluted Share(a)
As reported, continuing operations $1,656 $380 22.9 % $1,269 $5.57
Adjusted for:
Acquisition-related amortization expense 97 24 24.4 % 73 0.32
Business restructuring-related costs, net(b)
40 11 27.5 % 29 0.13
Portfolio optimization(d)
(2) 2 N/A (4) (0.02)
Insurance recovery(e)
(6) (2) 24.3 % (4) (0.02)
Legacy environmental remediation charges(f)
16 4 24.3 % 12 0.05
Impairment and other related charges, net(h)
24 6 24.3 % 6 0.03
Adjusted, continuing operations, excluding certain items $1,825 $425 23.3 % $1,381 $6.06
(a)Earnings per diluted share is calculated based on unrounded numbers. Figures in the table may not recalculate due to rounding.
(b)Business restructuring-related costs, net include business restructuring charges, offset by releases related to previously approved programs, which are included in Other (income)/charges, net on the consolidated statement of income, accelerated depreciation of certain assets, which is included in Depreciation on the consolidated statement of income, and other restructuring-related costs, which are included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative and Other (income)/charges, net on the consolidated statement of income.
(c)In the third quarter 2026, the Company recorded a net charge related to the anticipated resolution of an outstanding tax matter that includes both income taxes and non-income taxes.
(d)Portfolio optimization includes advisory, legal, accounting, valuation, other professional or consulting fees, and certain internal costs directly incurred to effect acquisitions, as well as similar fees and other costs to effect divestitures and other portfolio optimization exit actions. These costs are included in Selling, general and administrative expense on the condensed consolidated statement of income. Portfolio optimization includes a $3 million gain recognized in the third quarter of 2026 related to the sale of a non-core business, which is included in Other (income)/charges, net on the condensed consolidated statement of income. Portfolio optimization also includes charges related to the step-up of acquired inventory. These costs are included in Cost of sales, exclusive of depreciation and amortization on the condensed consolidated statement of income. Portfolio optimization also includes a $7 million gain recognized on the sale of a business in the first quarter 2025, which is included in Other (income)/charges, net on the condensed consolidated statement of income. There was no tax expense associated with that gain.
(e)In the third quarter 2026, the Company received an insurance reimbursement under policies covering legacy asbestos-related matters. These insurance recoveries are included in Other (income)/charges, net on the consolidated statement of income.
(f)Legacy environmental remediation charges represent environmental remediation costs at certain non-operating PPG manufacturing sites. These charges are included in Other (income)/charges, net in the condensed consolidated statement of income.
(g)In the second quarter 2026, the Company settled a legal matter. The related charge is included in Other (income)/charges, net on the consolidated statement of income.
(h)In the third quarter 2025, the Company recorded net impairment and other related charges related to a consolidated joint venture in the Performance Coatings segment, which are included in Other (income)/charges, net on the condensed consolidated statement of income. Net loss of $12 million related to the impairment charge was attributable to noncontrolling interests.
Performance of Reportable Business Segments
Global Architectural Coatings
Three Months Ended
September 30 		$ Change % Change Nine Months Ended
September 30 		$ Change % Change
($ in millions, except percentages) 2026 2025 2026 vs. 2025 2026 vs. 2025 2026 2025 2026 vs. 2025 2026 vs. 2025
Net sales $1,055 $1,012 $43 4.2 % $3,118 $2,887 $ 231 8.0 %
Segment income $225 $184 $41 22.3 % $565 $462 $ 103 22.3 %
Depreciation and amortization expense $28 $29 ($1) (3.4) % $85 $82 $ 3 3.7 %
Segment income before interest, taxes, depreciation and amortization (EBITDA) $253 $213 $40 18.8 % $650 $544 $ 106 19.5 %
Three Months Ended September 30, 2026
Global Architectural Coatings net sales increased due to the following:
● Higher selling prices (+4%)
● Favorable foreign currency translation (+2%)
Partially offset by:
● Lower sales volumes (-2%)
Architectural coatings - EMEA organic sales increased by a low single-digit percentage compared to the prior year with higher selling prices partially offset by lower sales volumes. Overall demand for architectural coatings in Europe was mixed by country.
Architectural coatings - Latin America and Asia Pacific organic sales increased by a mid-single-digit percentage year over year driven by higher selling prices and volume growth in Latin America driven by strong retail sales and improved project-related sales in Mexico.
Segment income of $225 million was 22% higher than the prior year. The increase was driven by higher selling prices and productivity actions partially offset by cost of goods sold inflation.
Nine Months Ended September 30, 2026
Global Architectural Coatings net sales increased due to the following:
● Favorable foreign currency translation (+6%)
● Higher selling prices (+3%)
Partially offset by:
● Lower sales volumes (-1%)
Architectural coatings - EMEA organic sales were flat compared to the prior year with higher selling prices offset by lower sales volumes. Overall demand for architectural coatings in Europe was mixed by country.
Architectural coatings - Latin America and Asia Pacific organic sales increased by a mid-single-digit percentage year over year driven by volume growth in Latin America and higher selling prices. In Mexico, retail sales volumes were solid, reflecting strong consumer demand, and project-related spending improved with increased government and local investment.
Segment income of $565 million was 22% higher than the prior year. The increase was driven by higher selling prices, favorable foreign currency translation and productivity actions partially offset by the impact of inflation.
Looking Ahead
In the fourth quarter of 2026, the company expects further year-over-year strengthening in retail sales in Mexico. While consumer sentiment in Europe is anticipated to remain mixed, we expect higher prices and productivity actions to increase earnings. Quarterly organic sales for the segment are expected to be in the range of flat to growth of a low single-digit percentage compared to the fourth quarter 2025.
Performance Coatings
Three Months Ended
September 30 		$ Change % Change Nine Months Ended
September 30 		$ Change % Change
($ in millions, except percentages) 2026 2025 2026 vs. 2025 2026 vs. 2025 2026 2025 2026 vs. 2025 2026 vs. 2025
Net sales $1,554 $1,414 $140 9.9 % $4,507 $4,191 $316 7.5 %
Segment income $332 $272 $60 22.1 % $949 $902 $47 5.2 %
Depreciation and amortization expense $40 $35 $5 14.3 % $117 $101 $16 15.8 %
Segment EBITDA $372 $307 $65 21.2 % $1,066 $1,003 $63 6.3 %
Three Months Ended September 30, 2026
Performance Coatings net sales increased due to the following:
● Higher sales volumes (+5%)
● Higher selling prices (+3%)
● Acquisitions (+2%)
Aerospace organic sales increased by a double-digit percentage compared to the third quarter 2025, led by higher selling prices and sales volumes. Demand is robust, and customer order backlogs remained strong.
Automotive refinish coatings organic sales increased by a mid-single-digit percentage driven by higher selling prices and higher sales volumes, reflecting stabilization of customer order patterns.
Protective and marine coatings organic sales increased by a high single-digit percentage compared to the prior-year third quarter driven by higher sales volumes and selling prices.
Third quarter organic sales for the traffic solutions business decreased by a mid-single-digit percentage compared to the prior-year.
Segment income was $332 million, an increase of 22% versus the prior year, due to higher selling prices and sales volumes, partially offset by higher inflation of cost of goods sold.
Nine Months Ended September 30, 2026
Performance Coatings net sales increased due to the following:
● Higher selling prices (+3%)
● Acquisitions (+2%)
● Favorable foreign currency translation (+2%)
● Higher sales volumes (+1%)
Aerospace organic sales increased by a double-digit percentage compared to the prior year, led by higher selling prices and sales volumes. Demand is robust, and customer order backlogs remained strong even with improved manufacturing output stemming from growth-related debottlenecking investments.
Automotive refinish coatings organic sales decreased by a high single-digit percentage versus the prior year. Results were impacted by lower organic sales in the first half of 2026, reflecting a difficult comparison to the prior year when customer order patterns were heavily weighted to the first half and slower recovery in underlying industry demand.
Protective and marine coatings organic sales increased by a high single-digit percentage compared to the prior-year driven by higher sales volumes and selling prices. Increased sales volumes were driven by share gains in both protective and marine, reflecting demand for PPG's sustainably advantaged products.
Organic sales for the traffic solutions business increased by a low single-digit percentage compared to the prior-year due to higher sales volumes and selling prices.
Segment income was $949 million, an increase of 5% versus the prior year, as the impact of higher organic sales was partially offset by cost of goods sold inflation.
Looking Ahead
In the fourth quarter 2026, we anticipate continued strength in aerospace. Automotive refinish coatings organic sales are anticipated to improve in the fourth quarter due to customer order patterns that were weighted to the first half 2025. Protective and marine coatings growth is expected to normalize as we lap prior year share gains, and traffic solutions will follow typical seasonal trends. In the fourth quarter, the company expects organic sales growth for the segment in the range of a low single-digit percentage to a mid-single-digit percentage year over year.
Industrial Coatings
Three Months Ended
September 30 		$ Change % Change Nine Months Ended
September 30 		$ Change % Change
($ in millions, except percentages) 2026 2025 2026 vs. 2025 2026 vs. 2025 2026 2025 2026 vs. 2025 2026 vs. 2025
Net sales $1,744 $1,656 $88 5.3 % $5,153 $4,883 $270 5.5 %
Segment income $200 $233 ($33) (14.2) % $622 $675 ($53) (7.9) %
Depreciation and amortization expense $51 $48 $3 6.3 % $156 $144 $12 8.3 %
Segment EBITDA $251 $281 ($30) (10.7) % $778 $819 ($41) (5.0) %
Three Months Ended September 30, 2026
Industrial Coatings segment net sales increased due to the following:
● Higher selling prices (+2%)
● Higher sales volumes (+2%)
● Favorable foreign currency translation (+1%)
Automotive OEM coatings organic sales decreased a low single-digit percentage, with share gains supporting a change in sales volume that outpaced global automotive industry production by approximately 100 basis points.
Third quarter industrial coatings organic sales improved a high single-digit percentage due to sales volume and selling price growth in all regions.
Packaging coatings organic sales increased by a double-digit percentage versus the prior year period and sales volumes are up over 20% on a two-year stacked basis, driven by share gains as customers adopt our technologies.
Segment income was $200 million, a decrease of 14% versus the prior year, driven by cost of goods sold inflation partially offset by higher sales volumes and selling prices as we began to realize the benefits of the timing of our index-based pricing arrangements.
Nine Months Ended September 30, 2026
Industrial Coatings segment net sales increased due to the following:
● Higher sales volumes (+3%)
● Favorable foreign currency translation (+2%)
● Higher selling prices (+1%)
Organic sales for automotive OEM coatings were flat compared to the prior year driven by higher sales volumes offset by lower indexed-based selling prices.
Industrial coatings organic sales increased by a mid-single-digit percentage compared to the prior year driven by higher selling prices and higher sales volumes.
Organic sales in packaging coatings increased by a double-digit percentage compared to the prior year, driven by higher sales volumes. Results reflect the positive momentum from share gains in the U.S. and Canada, Asia Pacific and Europe, aided by expanding European sustainability regulations.
Segment income was $622 million, a decrease of 8% versus the prior year driven by cost of goods sold inflation partially offset by manufacturing and overhead cost savings and organic sales growth.
Looking Ahead
Our share gains in automotive OEM coatings, industrial coatings and packaging coatings are yielding benefits, and we expect to outperform the respective markets again in the fourth quarter. The company expects organic sales for
the segment in the range of a low single-digit percentage decline to growth of a low single-digit percentage year over year.
Tariff Impact and Mitigation
PPG is impacted by the economic and political conditions in the markets we serve, which includes effects related to the imposition and magnitude of tariffs. The current global macroeconomic environment is highly dynamic, and we continue to monitor changes to tariffs and the corresponding impacts on our business. PPG did not experience a significant decrease in customer demand, significant increase in raw material costs, or other significant adverse impacts related to tariffs during the first nine months of 2026. The Company continues to monitor overall economic demand and customer order patterns and is prepared to take actions intended to mitigate adverse impacts, as necessary, through supply chain contingency plans, pricing actions, and/or cost reduction actions.
Middle East Conflict and Price Increases
In the first quarter of 2026, a military conflict commenced in the Middle East. Although we do not have material operations in the Middle East, we continue to assess the impact of the conflict. Costs have risen for raw materials, energy, logistics and packaging across the coatings value chain. The company has proactively made price adjustments globally and across all our businesses, resulting in a 3% selling price increase in the third quarter, fully offsetting inflation of cost of goods sold.
Liquidity and Capital Resources
PPG had cash and short-term investments totaling $1.6 billion and $2.2 billion at September 30, 2026 and December 31, 2025, respectively.
The Company continues to believe that cash on hand and short-term investments, cash from operations and the Company's ability to access the capital markets will be sufficient to fund our operating activities, capital spending, acquisitions, dividend payments, debt service, share repurchases, contributions to pension plans and contractual obligations.
Cash from operating activities
Cash from operating activities for the nine months ended September 30, 2026 and 2025 was $1,158 million and $1,054 million, respectively. The $104 million increase was primarily due to improved working capital performance compared to the prior year.
Operating Working Capital
Operating working capital is a subset of total working capital and represents (1) trade receivables - net of the allowance for doubtful accounts (2) FIFO inventories and (3) trade liabilities. We believe operating working capital represents the key components of working capital under the operating control of our businesses. A key metric we use to measure our working capital management is operating working capital as a percentage of sales (current quarter sales annualized).
($ in millions, except percentages) September 30, 2026 December 31, 2025 September 30, 2025
Trade receivables, net $3,408 $2,783 $3,137
Inventories, FIFO 2,436 2,177 $2,363
Trade creditors' liabilities 2,521 2,212 $2,298
Operating working capital $3,323 $2,748 $3,202
Operating working capital as a % of sales 19.1 % 17.6 % 19.6 %
Days sales outstanding 64 59 63
Environmental
Three Months Ended
September 30 		Nine Months Ended
September 30
($ in millions) 2026 2025 2026 2025
Cash outlays for environmental remediation activities $9 $8 $27 $18
($ in millions) Remainder of
2026 		Annually
2027 - 2030
Projected future cash outlays for environmental remediation activities $10 - $20 $20 - $60
Cash used for investing activities
Cash used for investing activities for the nine months ended September 30, 2026 and 2025 was $653 million and $417 million, respectively. The $236 million increase in cash used for investing activities was primarily due to business acquisitions in the current year.
Total capital spending is expected to be approximately $650 million to $700 million in 2026 in support of future organic growth opportunities.
Cash used for financing activities
Cash used for financing activities for the nine months ended September 30, 2026 and 2025 was $1,099 million and $269 million, respectively. The $830 million increase in cash used for financing activities was primarily due to net debt activity, including the repayment of the $700 million 1.2% notes, which matured in the first quarter 2026.
Credit Agreements
In April 2023, PPG entered into a €500 million term loan credit agreement (the "Term Loan"). The Term Loan contains covenants that are consistent with those in the Credit Agreement discussed below and that are usual and customary restrictive covenants for facilities of its type, which include, with specified exceptions, limitations on the Company's ability to create liens or other encumbrances, to enter into sale and leaseback transactions and to enter into consolidations, mergers or transfers of all or substantially all of its assets. In April 2023, PPG borrowed €500 million under the Term Loan. In December 2023, PPG obtained lender commitments sufficient to increase the size of the Term Loan by €250 million. In January 2024, PPG borrowed the additional €250 million. In December 2024, PPG obtained lender commitments sufficient to increase the size of the Term Loan by €300 million. In January 2025, PPG borrowed the additional €300 million. In January 2026, the Term Loan was amended to extend its maturity. Based on this amendment, the Term Loan terminates and all amounts outstanding are payable in January 2029.
In October 2025, PPG amended its five-year credit agreement (the "Credit Agreement") dated as of August 30, 2019 to extend its maturity. The amended Credit Agreement provides for a $2.3 billion unsecured revolving credit facility, of which $2,148 million of the total commitment has a term through July 2029 and $152 million of the total commitment has a term through July 2028. The Company has the ability to increase the size of the Credit Agreement by up to an additional $750 million, subject to the receipt of lender commitments and other conditions precedent. In May 2026, PPG entered into a €250 million unsecured revolving credit agreement (the "Euro Credit Agreement") that expires in May 2028. The Company has the right, subject to certain conditions set forth in the Credit Agreement and the Euro Credit Agreement, to designate certain subsidiaries of the Company as borrowers. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the applicable agreement. There were no amounts outstanding under either the Credit Agreement or the Euro Credit Agreement as of September 30, 2026 and December 31, 2025.
The Term Loan, Credit Agreement and Euro Credit Agreement also require the Company to maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Credit Agreement, of 60% or less; provided, that for any fiscal quarter in which the Company has made an acquisition for consideration in excess of $1 billion and for the next five fiscal quarters thereafter, the ratio of Total Indebtedness to Total Capitalization may not exceed 65% at any time. As of September 30, 2026, Total Indebtedness to Total Capitalization as defined under the Credit Agreement was 43%.
The Credit Agreement also supports the Company's commercial paper borrowings which are classified as long-term based on PPG's intent and ability to refinance these borrowings on a long-term basis. Commercial paper borrowings outstanding under the Credit Agreement were zero as of both September 30, 2026 and December 31, 2025.
Other Debt Issued and Repaid
In June 2026, PPG completed an offering of 180 million Swiss francs 1.2175% Notes due 2030 and 140 million Swiss francs 1.6648% Notes due 2034. Refer to Note 7, "Borrowings" in Part I, Item 1 of this Form 10-Q for additional information.
In March 2026, PPG's $700 million 1.2% notes matured, and the Company repaid this obligation using cash on hand.
In March 2025, PPG completed a public offering of €900 million 3.250% Notes due 2032. Refer to Note 7, "Borrowings" in Part I, Item 1 of this Form 10-Q for additional information.
Other Liquidity Information
Restructuring
Aggregate restructuring savings were approximately $15 million in the third quarter 2026. Total restructuring savings are expected to be approximately $50 million in 2026. In addition, the Company continues to review its cost structure to identify additional cost savings opportunities. Refer to Note 6, "Business Restructuring" in Part I, Item 1 of this Form 10-Q for further details on the Company's business restructuring programs. We expect cash outlays related to restructuring actions of approximately $60 million to $80 million in 2026.
Currency
Comparing spot exchange rates at September 30, 2026 and at December 31, 2025, the U.S. dollar weakened against the currencies of many countries within the regions PPG operates, most notably the Chinese yuan, partially offset by strengthening against the Mexican peso. As a result, consolidated net assets at September 30, 2026 increased by $26 million compared to December 31, 2025.
Comparing average exchange rates during the first nine months of 2026 to those of the first nine months of 2025, the U.S. dollar weakened against the currencies of many countries where PPG operates, including the Mexican peso, partially offset by strengthening against the euro. This had a favorable impact on Income before income taxes for the nine months ended September 30, 2026 of $54 million from the translation of these foreign earnings into U.S. dollars.
New Accounting Standards
Refer to Note 2, "New Accounting Standards" in Part I, Item 1 of this Form 10-Q for further details on recently issued accounting guidance.
Commitments and Contingent Liabilities, including Environmental Matters
PPG is involved in a number of lawsuits and claims, both actual and potential, including some that it has asserted against others, in which substantial monetary damages are sought. See Part II, Item 1, "Legal Proceedings" of this Form 10-Q and Note 14, "Commitments and Contingent Liabilities" in Part I, Item 1 of this Form 10-Q for a description of certain of these lawsuits.
As discussed in Part II, Item 1 and Note 14, although the result of any future litigation of such lawsuits and claims is inherently unpredictable, management believes that, in the aggregate, the outcome of all lawsuits and claims involving PPG, including asbestos-related claims, will not have a material effect on PPG's consolidated financial position or liquidity; however, any such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized.
As also discussed in Note 14, PPG has significant reserves for environmental contingencies. Refer to the Environmental Matters section of Note 14 for details of these reserves. It is PPG's policy to accrue expenses for contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Reserves for environmental contingencies are exclusive of claims against third parties and are generally not discounted. In management's opinion, the Company operates in an environmentally sound manner and the outcome of the Company's environmental contingencies will not have a material effect on PPG's financial position or liquidity; however, any such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized. Management anticipates that the resolution of the Company's environmental contingencies will occur over an extended period of time.
Critical Accounting Estimates
Management has evaluated the accounting policies used in the preparation of the financial statements and related notes presented in this Form 10-Q and believes those policies to be reasonable and appropriate. We believe that
the most critical accounting estimates made in the preparation of our financial statements are those related to accounting for contingencies, under which we accrue a loss when it is probable that a liability has been incurred and the amount can be reasonably estimated, and to accounting for pensions, other postretirement benefits, business combinations, goodwill and other identifiable intangible assets with indefinite lives because of the importance of management judgment in making the estimates necessary to apply these policies.
For a comprehensive discussion of the Company's critical accounting estimates, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2025 Form 10-K. There were no material changes in the Company's critical accounting estimates from the 2025 Form 10-K.
Forward-Looking Statements
Management's Discussion and Analysis and other sections of this Quarterly Report contain forward-looking statements that reflect the Company's current views with respect to future events and financial performance. You can identify forward-looking statements by the fact that they do not relate strictly to current or historic facts. Forward-looking statements are identified by the use of the words "aim," "believe," "expect," "anticipate," "intend," "estimate," "project," "outlook," "forecast" and other expressions that indicate future events and trends. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our reports to the SEC. Also, note the following cautionary statements.
Many factors could cause actual results to differ materially from the Company's forward-looking statements. Such factors include statements related to global economic conditions, geopolitical issues, increasing price and product competition by our competitors, fluctuations in cost and availability of raw materials, energy, labor and logistics, the ability to achieve selling price increases, margins, share gains, customer inventory levels, PPG inventory levels, our ability to maintain favorable supplier relationships and arrangements, the timing of and the realization of anticipated cost savings from restructuring initiatives, the ability to identify additional cost savings opportunities, the timing and expected benefits of our acquisitions, difficulties in integrating acquired businesses and achieving expected synergies therefrom, the amount of future share repurchases, economic and political conditions in the markets we serve, the imposition and magnitude of tariffs, the ability to penetrate existing, developing and emerging foreign and domestic markets, foreign exchange rates and fluctuations in such rates, fluctuations in tax rates, the impact of future legislation, the impact of environmental regulations, unexpected business disruptions, cybersecurity events, global human health issues, the unpredictability of existing and possible future litigation, including asbestos litigation, and government investigations. However, it is not possible to predict or identify all such factors.
Consequently, while the list of factors presented here and in the 2025 Form 10-K under Item 1A 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 the results compared with those anticipated in the forward-looking statements could include, among other things, lower sales or income, business disruption, operational problems, financial loss, legal liability to third parties, other factors set forth in Item 1A of the 2025 Form 10-K and similar risks, any of which could have a material adverse effect on the Company's consolidated financial condition, results of operations or liquidity.
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