Financial Instruments, Hedging Activities and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Debt Disclosure [Text Block]

Borrowings and Lines of Credit

Long-term Debt Obligations

	As of December 31,
($ in millions)	2016		2015
1.9 % notes, due 2016(1)	$	—	$	250
3-year variable rate bank loan, due 2017 (€500)	526		544
6.65% notes, due 2018	—		125
0.00% note, due 2019 (€300)	313		—
2.3% notes, due 2019	298		297
3.6% notes, due 2020	496		496
9% non-callable debentures, due 2021(1)	133		133
0.875% notes, due 2022 (€600)	626		647
0.875% note, due 2025 (€600)	621		—
1.4% notes, due 2027 (€600)	620		641
2.5% note, due 2029 (€80)	83		86
7.70% notes, due 2038	174		174
5.5% notes, due 2040	247		246
3% note, due 2044 (€120)	118		122
Commercial paper	—		459
Impact of derivatives on debt(1)	3		4
Various other non-U.S. debt, weighted average 3.8% as of December 31, 2016 and 6.1% of December 31, 2015.	41		42
Capital lease obligations	18		14
Total	$	4,317	$	4,280
Less payments due within one year	530		254
Long-term debt	$	3,787	$	4,026

(1) PPG entered into several interest rate swaps which had the effect of converting fixed rate notes to variable rates, based on the three-month London Interbank Offered Rate (LIBOR). There were no interest rate swaps outstanding related to these instruments as of December 31, 2016 and 2015. The impact of the derivatives on debt represents the fair value adjustment of the debt while the interest rate swaps were outstanding, which is being amortized as a reduction to interest expense over the remaining term of the debt. The weighted average effective interest rate for these borrowings, including the effects of the swaps, was 8.4% and 3.1% for the years ended December 31, 2016 and 2015, respectively. Refer to Note 9, “Financial Instruments, Hedging Activities, and Fair Value Measurements” for additional information.

2016 Activities

In December 2016, PPG paid $133 million to redeem its $125 million6.65% notes, due 2018, using cash on hand.

In December 2016, PPG prepaid the two $250 million Term Loan Credit Agreements which PPG entered into during May 2016. The Bank of Tokyo-Mitsubishi UFJ, Ltd. Term Loan originally terminated and all amounts outstanding were payable in March 2017. The BNP Paribas Term Loan originally terminated and all amounts outstanding were payable in May 2017.

In November 2016, PPG completed a public offering of €300 million0.000% Notes due 2019 and €600 million0.875% Notes due 2025. These notes were issued pursuant to PPG’s existing shelf registration statement and pursuant to an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented. The Indenture governing these notes contains covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets. The terms of these notes also require the Company to make an offer to repurchase Notes upon a Change of Control Triggering Event (as defined in the Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest. The Company may issue additional debt from time to time pursuant to the Indenture.

The aggregate cash proceeds from the notes, net of discounts and fees, was $987 million. The notes are denominated in euro and have been designated as hedges of net investments in the Company’s European operations. For more information, refer to Note 9 “Financial Instruments, Hedging Activities and Fair Value Measurements.”

In January 2016, PPG’s $250 million1.9% notes matured, and PPG repaid these obligations with cash on hand.

2015 Activities

In December 2015, PPG entered into a five-year credit agreement (the “Credit Agreement”) with several banks and financial institutions. The Credit Agreement replaced the Company's Five Year Credit Agreement dated as of September 12, 2012. The Credit Agreement provides for a $1.8 billion unsecured revolving credit facility. The Company has the ability to increase the size of the Credit Agreement by up to an additional $500 million, subject to the receipt of lender commitments and other conditions. The Credit Agreement will terminate on December 18, 2020. The Company has the right, subject to certain conditions set forth in the Credit Agreement, to designate certain subsidiaries of the Company as borrowers under the Credit Agreement. In connection with any such designation, the Company is required to guarantee the obligations of any such subsidiaries under the Credit Agreement. There were no amounts outstanding under the Credit Agreement during the years ended December 31, 2016 and 2015. The available borrowing rate on a one month, U.S. dollar denominated borrowing was 1.77% at December 31, 2016.

Borrowings under the Credit Agreement may be made in U.S. dollars or in euros. The Credit Agreement provides that loans will bear interest at rates based, at the Company’s option, on one of two specified base rates plus a margin based on certain formulas defined in the Credit Agreement. Additionally, the Credit Agreement contains a Commitment Fee, as defined in the Credit Agreement, on the amount of unused commitments under the Credit Agreement ranging from 0.080% to 0.225% per annum. The average Commitment Fee in 2016 was 0.09%, and PPG is committed to pay 0.09% in 2017.

The Credit Agreement also supports the Company’s commercial paper borrowings. As a result, the commercial paper borrowings as of December 31, 2015 were classified as long-term debt based on PPG’s intent and ability to refinance these borrowings on a long-term basis. There were no commercial paper borrowings outstanding as of December 31, 2016.

The Credit Agreement contains 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. The Credit Agreement maintains the same restrictive covenant as the prior credit agreement whereby the Company must maintain a ratio of Total Indebtedness to Total Capitalization, as defined in the Credit Agreement, of 60% or less. As of December 31, 2016, total indebtedness was 45% of the Company’s total capitalization.

The Credit Agreement also contains customary events of default, including the failure to make timely payments when due under the Credit Agreement or other material indebtedness, the failure to satisfy covenants contained in the Credit Agreement, a change in control of the Company and specified events of bankruptcy and insolvency that would permit the lenders to accelerate the repayment of any loans.

In June 2015, PPG’s €300 million3.875% notes matured, upon which the Company paid $336 million to settle these obligations.

In March 2015, PPG completed a public offering of €600 million0.875% notes due 2022 and €600 million1.400% Notes due 2027, or €1.2 billion ($1.26 billion) in aggregate principal amount.  These notes were issued pursuant to PPG’s existing shelf registration statement and pursuant to an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented. The Indenture governing these notes contains covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets. The terms of these notes also require the Company to make an offer to repurchase notes upon a Change of Control Triggering Event (as defined in the Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest. The Company may issue additional debt from time to time pursuant to the Indenture.

The aggregate cash proceeds from the notes, net of discounts and fees, was $1.24 billion.  The notes are denominated in euro and have been designated as hedges of net investments in the Company’s European operations. For more information, refer to Note 9 “Financial Instruments, Hedging Activities and Fair Value Measurements.”

2014 Activities

In November 2014, PPG completed a public offering of $300 million in aggregate principal amount of its 2.3% Notes due 2019. These notes were issued pursuant to its existing shelf registration statement and pursuant to an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented. The Company may issue additional debt from time to time pursuant to the Indenture. The Indenture governing these notes contains covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale-leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all the Company’s assets. The terms of these notes also require the Company to make an offer to repurchase notes upon a Change of Control Triggering Event (as defined in the Indenture) at a price equal to 101% of their principal amount plus accrued and unpaid interest.

Also in November 2014, the Company entered into three euro-denominated borrowings as follows.

3-year €500 million bank loan

Interest on this loan is variable and is based on changes to the EURIBOR interest rate. This loan contains covenants materially consistent with the five-year credit agreement. At December 31, 2016, the average interest rate on this borrowing was 0.31%.

15-year €80 million2.5% fixed interest and 30-year €120 million3.0% fixed interest notes

PPG privately placed a 15-year €80 million2.5% fixed interest note and a 30-year €120 million3.0% fixed interest note. These notes contain covenants materially consistent with the 2.3% Notes discussed above.

The cash proceeds related to these borrowings net of discounts and fees were as follows:

($ in millions)	Proceeds
3-year variable rate bank loan (1)	$	620
2.30% notes, due 2019	297
15-year 2.5% fixed rate note(1)	99
30-year 3.0% fixed rate note (1)	142
Total cash proceeds	$	1,158

(1) These debt arrangements are denominated in euro and have been designated as net investment hedges of the Company’s european operations. For more information refer to Note 9 “Financial Instruments, Hedging Activities and Fair Value Measurements.”

In December 2014, PPG completed a debt refinancing which included redeeming approximately $1.5 billion of public notes and a tender offer for any and all of its outstanding 9% debentures, due 2021 and the 7.70% notes, due 2038 (together, the “Offers”). The consideration for each $1,000 principal amount of the 2021 debentures was $1,334 and was $1,506 for the 2038 notes. After the expiration of the Offers, PPG accepted for purchase all of the securities that were validly tendered. An aggregate principal amount of $90 million was redeemed through the tender offer which required $43 million of premiums to be paid to the debt holders.

The following table is a summary of the debt instruments redeemed and the tender offers completed:

($ in millions)	Amount Paid
Public notes redeemed:
7  3/8% notes, due 2016	$	146
6 7/8% notes, due 2017	75
6.65% notes, due 2018	575
7.4% notes, due 2019	199
2.70% notes, due 2022	400
Total of make-whole premiums paid to redeem notes	179
Tender Offer:
9% debentures, due 2021	16
7.70% notes, due 2038	74
Total of premiums paid on tender offer	43
Total cash paid for debt redemption	$	1,707

The Company recorded a charge of $317 million in 2014 for the debt redemption which consists of the aggregate make-whole cash premium of $179 million for the public notes redemption, the aggregate cash premium of $43 million for the debt redeemed through the tender offer, the net realization of the unamortized interest rate swaps and forward starting swap losses of $89 million, and a balance of unamortized fees and discounts of $6 million related to the debt redeemed. Refer to Note 9, “Financial Instruments, Hedging Activity and Fair Value Measurement,” for additional detail regarding the non-cash portion of the loss on the debt redemption.

The proceeds received from the 2.3% Notes and the three euro-denominated borrowing arrangements were used to fund approximately $1.2 billion of the approximately $1.7 billion used for the 2014 debt redemption. Cash on hand was used to fund the remaining portion of the redemption payments.

Restrictive Covenants and Cross-Default Provisions

As of December 31, 2016, PPG was in full compliance with the restrictive covenants under its various credit agreements, loan agreements and indentures.

Additionally, the Company’s Credit Agreement and its 3-year €500 million bank loan contain customary cross-default provisions. These provisions provide that a default on a debt service payment of $50 million or more for longer than the grace period provided under another agreement may result in an event of default under these agreements. The Company’s 9% non-callable debentures also contain a customary cross default provision triggered by the Company’s default on a debt service payment of $10 million or more. None of the Company’s primary debt obligations are secured or guaranteed by the Company’s affiliates.

Long-term Debt Maturities

Aggregate maturities of long-term debt during the next five years excluding commercial paper are:

($ in millions)	Maturity per year
2017	$	530
2018	4
2019	614
2020	498
2021	132
Thereafter	$	2,539

Other Debt Obligations

Short-term debt outstanding as of December 31, 2016 and 2015, was as follows:

($ in millions)	2016		2015
Various, weighted average 5.8% as of December 31, 2016 and 13.2% as of December 31, 2015	$	99	$	29

Rental expense for operating leases was $275 million million, $265 million and $282 million in 2016, 2015 and 2014, respectively. The primary leased assets include paint stores, transportation equipment, warehouses and other distribution facilities, and office space, including the Company’s corporate headquarters located in Pittsburgh, Pa.

Minimum lease commitments for operating leases that have initial or remaining lease terms in excess of one year are as follows:

($ in millions)	As of December 31, 2016
2017	$	200
2018	164
2019	131
2020	97
2021	62
Beyond 2021	$	200

PPG’s non-U.S. operations have uncommitted lines of credit totaling $942 million of which $88 million was used as of December 31, 2016. These uncommitted lines of credit are subject to cancellation at any time and are generally not subject to any commitment fees.

The Company had outstanding letters of credit and surety bonds of $160 million and $165 million as of December 31, 2016 and 2015, respectively. The letters of credit secure the Company’s performance to third parties under certain self-insurance programs and other commitments made in the ordinary course of business.

As of December 31, 2016 and 2015, guarantees outstanding were $12 million and $24 million, respectively. The guarantees relate primarily to debt of certain entities in which PPG has an ownership interest and selected customers of certain PPG businesses. A portion of such debt is secured by the assets of the related entities. The carrying value of these guarantees were $1 million at December 31, 2016 and 2015 and the fair values of these guarantees were $1 million at December 31, 2016 and 2015. The fair value of each guarantee was estimated by comparing the net present value of two hypothetical cash flow streams, one based on PPG’s incremental borrowing rate and the other based on the borrower’s incremental borrowing rate, as of the effective date of the guarantee. Both streams were discounted at a risk free rate of return. The Company does not believe any loss related to these letters of credit, surety bonds or guarantees is likely.

Fair Value, Cash Flow and Net Investment Hedges

The following tables summarize the location and amount of gains (losses) related to derivative and debt financial instruments for the years ended December 31, 2016, 2015 and 2014. All dollar amounts are shown on a pre-tax basis.

	December 31, 2016
Hedge Type ($ in millions)		Gain/(Loss) Deferred in OCI			Gain/(Loss) Recognized
					Amount			Caption in Consolidated Statement of Income
Cash Flow
	Foreign currency forward contracts (a)	$	1		$	(5	)	Other charges and Cost of Sales
	Total Cash Flow	$	1		$	(5	)
Net Investment
	Cross currency swaps	$	25
	Foreign denominated debt	122
	Foreign currency forward contracts	(14		)
	Total Net Investment	$	133
Economic
	Foreign currency forward contracts				$	14		Other charges

(a) The ineffective portion related to this item was $9 million of expense.

	December 31, 2015
Hedge Type ($ in millions)		Gain Deferred in OCI		Gain/(Loss) Recognized
				Amount			Caption in Consolidated Statement of Income
Fair Value
	Foreign currency forward contracts	Not applicable		$	(2	)	Sales
	Equity forward arrangements	Not applicable		(44		)	Asbestos - net
	Total Fair Value			$	(46	)
Cash Flow
	Foreign currency forward contracts(a)	$	57	$	50		Other charges and Cost of Sales
	Total Cash Flow	$	57	$	50
Net Investment
	Cross currency swaps	$	77
	Foreign denominated debt	85
	Foreign currency forward contracts	19
	Total Net Investment	$	181
Economic
	Foreign currency forward contracts			$	18		Other charges

(a) The ineffective portion related to this item was $7 million of expense.

	December 31, 2014
Hedge Type ($ in millions)		Gain Deferred in OCI		Gain (Loss) Recognized
				Amount			Caption in Consolidated Statement of Income
Fair Value
	Foreign currency forward contracts	Not applicable		$	1		Sales
	Equity forward arrangements	Not applicable		60			Asbestos - net
	Total Fair Value			$	61
Cash Flow
	Forward starting swaps			$	(104	)	Interest expense
	Foreign currency forward contracts(a)	$	51	47			Other charges
	Total Cash Flow	$	51	$	(57	)
Net Investment
	Cross currency swaps	$	81
	Foreign denominated debt	75
	Foreign currency forward contracts	48
	Total Net Investment	$	204

Schedule of Derivative Liabilities at Fair Value [Table Text Block]

Assets and liabilities reported at fair value on a recurring basis

		December 31, 2016
($ in millions)		Level 1		Level 2		Level 3
Assets:
Other current assets:
	Marketable equity securities	$	4	—		—
	Foreign currency forward contracts	—		$	22	—
Investments:
	Marketable equity securities	$	78	—		—
Other assets:
	Cross currency swaps	—		$	65	—
Liabilities:
Accounts payable and accrued liabilities:
	Foreign currency forward contracts	—		$	9	—

		December 31, 2015
($ in millions)		Level 1		Level 2		Level 3
Assets:
Other current assets:
	Marketable equity securities	$	4	—		—
	Foreign currency forward contracts	—		$	47	—
	Equity forward arrangement	—		$	223	—
Investments:
	Marketable equity securities	$	77	—		—
Other assets:
	Cross currency swaps	—		$	41	—
Liabilities:
Accounts payable and accrued liabilities:
	Foreign currency forward contracts	—		$	4	—

Schedule of Long-term Debt Instruments [Table Text Block]

($ in millions)	December 31, 2016(a)		December 31, 2015(b)
Long-term debt - carrying value	$	4,299	$	4,265
Long-term debt - fair value	$	4,502	$	4,367