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

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value, Cash Flow and Net Investment Hedges

The following table summarizes the location within the consolidated financial statements and amount of gains/(losses) related to derivative and debt financial instruments for the years ended December 31, 2019, 2018 and 2017. All dollar amounts are shown on a pretax basis.

	2019					2018						2017					Caption in Consolidated Statement of Income
($ in millions)	Gain Deferred in AOCL		Gain/(Loss) Recognized			(Loss)/Gain Deferred in AOCL			Gain/(Loss) Recognized			Loss Deferred in AOCL			Gain Recognized
Fair Value
Interest rate Swaps				$3						$3						$—	Interest expense
Total Fair Value				$3						$3						$—
Cash Flow
Foreign currency forward contracts		$2		($3	)		($9	)		($8	)		($7	)		$9	Other charges and Cost of sales
Total Cash Flow		$2		($3	)		($9	)		($8	)		($7	)		$9
Net Investment
Cross currency swaps		$13		$18			$21			$13			($61	)		$—	Interest expense
Foreign denominated debt	61		—			124			—			(403		)	—
Total Net Investment		$74		$18			$145			$13			($464	)		$—
Economic
Foreign currency forward contracts				$55						$55						$14	Other charges

Schedule of Derivative Liabilities at Fair Value

Assets and liabilities reported at fair value on a recurring basis

	December 31, 2019						December 31, 2018
($ in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets:
Other current assets:
Marketable equity securities		$5		$—		$—		$4		$—		$—
Foreign currency forward contracts(a)	—		14		—		—		45		—
Other assets:
Cross currency swaps(b)		$—		$52		$—		$—		$35		$—
Interest rate swaps(c)	—		35		—		—		8		—
Investments:
Marketable equity securities		$80		$—		$—		$69		$—		$—
Liabilities:
Accounts payable and accrued liabilities:
Foreign currency forward contracts(d)		$—		$1		$—		$—		$1		$—
Foreign currency forward contracts(a)	—		20		—		—		9		—
Other liabilities:
Cross currency swap(b)		$—		$4		$—		$—		$—		$—

Schedule of Long-term Debt Instruments

Long-term Debt Obligations

($ in millions)	Maturity Date	2019		2018
0.00% note (€300)	2019		$—		$343
2.3% notes	2019	—		299
3.6% notes	2020	499		498
9% non-callable debentures(1)	2021	134		133
0.875% notes (€600)	2022	671		685
3.2% notes ($300)(2)	2023	298		298
2.4% notes ($300)	2024	297		—
0.875% note (€600)	2025	665		679
1.4% notes (€600)	2027	665		679
3.75% notes ($700)(3)	2028	695		694
2.5% note (€80)	2029	88		91
2.8% notes ($300)	2029	297		—
7.70% notes	2038	174		174
5.5% notes	2040	247		247
3% note (€120)	2044	127		131
Commercial paper	Various	100		—
Various other non-U.S. debt(4)	Various	38		39
Finance lease obligations	Various	11		12
Impact of derivatives on debt(1)(5)	N/A	36		10
Total			$5,042		$5,012
Less payments due within one year	N/A	503		647
Long-term debt			$4,539		$4,365

(1) PPG entered into several interest rate swaps, which were subsequently settled in prior periods. The impact of these settlements are being amortized over the remaining life of the debentures as a reduction to interest expense. The weighted average interest rate for these borrowings was 8.4% for the years ended December 31, 2019 and 2018.

(2) In February 2018, PPG entered into interest rate swaps which converted $150 million of the notes from a fixed interest rate to a floating interest rate based on the three month London Interbank Offered Rate (LIBOR). The impact of the derivative on the notes represents the fair value adjustment of the debt. The average effective interest rate for the portion of the notes impacted by the swaps was 2.9% and 2.7% as of December 31, 2019 and 2018, respectively. Refer to Note 10, “Financial Instruments, Hedging Activities and Fair Value Measurements” for additional information.

(3) In February 2018, PPG entered into interest rate swaps which converted $375 million of the notes from a fixed interest rate to a floating interest rate based on the three month LIBOR. The impact of the derivative on the notes represents the fair value adjustment of the debt. The average effective interest rate for the portion of the notes impacted by the swaps was 3.3% and 3.2% as of December 31, 2019 and 2018, respectively. Refer to Note 10, “Financial Instruments, Hedging Activities and Fair Value Measurements” for additional information.

(4)

Weighted average interest rate of 3.7% and 3.8% as of December 31, 2019 and 2018, respectively.

Long-Term Debt

($ in millions)	December 31, 2019(a)	December 31, 2018(b)
Long-term debt - carrying value	$5,031	$5,000
Long-term debt - fair value	$5,363	$5,101

(a) Excluding finance lease obligations of $11 million and short term borrowings of $10 million as of December 31, 2019.

(b)

Excluding capital lease obligations of $12 million and short term borrowings of $4 million as of December 31, 2018.