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Reportable Business Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Reportable Business Segment Information Reportable Business Segment Information
Segment Organization and Products
PPG is a multinational manufacturer with 10 operating segments (which the Company refers to as “strategic business units”) that are organized based on the Company’s major products lines. The Company’s reportable business segments include the following two segments: Performance Coatings and Industrial Coatings. The operating segments have been aggregated based on economic similarities, the nature of their products, production processes, end-use markets and methods of distribution.
The Performance Coatings reportable business segment is comprised of the automotive refinish coatings, aerospace coatings, architectural coatings – Americas and Asia Pacific, architectural coatings – EMEA, protective and marine coatings and traffic solutions operating segments. This reportable business segment primarily supplies a variety of protective and decorative coatings, adhesives, sealants and finishes, along with paint strippers, stains and related chemicals, pavement marking products, transparencies, transparent armor and paint films.
The Industrial Coatings reportable business segment is comprised of the automotive OEM coatings, industrial coatings, packaging coatings, and the specialty coatings and materials operating segments. This reportable business segment primarily supplies a variety of protective and decorative coatings and finishes along with adhesives, sealants, metal pretreatment products, optical monomers and coatings, low-friction coatings, paint films, precipitated silicas and other specialty materials.
Production facilities and sales for Performance Coatings and Industrial Coatings are global. PPG’s reportable business segments continue to pursue opportunities to further develop their global reach. Each of the reportable business segments in which PPG is engaged is highly competitive. The diversification of our product lines and the worldwide sales tend to minimize the impact on PPG’s business of changes in demand in a particular industry or in a particular geographic area.
The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies (see Note 1, “Summary of Significant Accounting Policies”). The Company allocates resources to operating segments and evaluates the performance of operating segments based upon segment income, which is income before interest expense – net, income taxes, and noncontrolling interests and excludes certain charges which are considered to be unusual or non-recurring. The Company also evaluates performance of operating segments based on working capital management and selling price and sales volume performance.
Corporate unallocated costs include the costs of corporate staff functions not directly associated with the operating segments, certain legal matters, net of related insurance recoveries, the cost of certain insurance and stock-based compensation programs and certain other unusual or non-recurring items. The service cost component of net periodic benefit cost related to current employees of each reportable business segment is allocated to that reportable business segment and the remaining portion of net periodic pension expense is included in the Corporate unallocated costs.
Product movement between Performance Coatings and Industrial Coatings is limited, is accounted for as an inventory transfer, and is recorded at cost plus a mark-up, the impact of which is not significant to the net sales or segment income of the reportable business segments.
($ in millions)202320222021
Net sales to external customers
Performance Coatings$11,164 $10,694 $10,333 
Industrial Coatings7,082 6,958 6,469 
Total Net sales$18,246 $17,652 $16,802 
Segment income
Performance Coatings$1,709 $1,399 $1,491 
Industrial Coatings966 643 680 
Total Segment income$2,675 $2,042 $2,171 
Corporate / Non-Segment Items
Corporate unallocated(340)(218)(194)
Interest expense, net of interest income(107)(113)(95)
Impairment and other related charges, net(1)
(160)(245)(21)
Business restructuring-related costs, net(2)
(43)(75)(27)
Portfolio optimization(3)
(53)(10)(86)
Pension settlement charge(4)
(190)— (50)
Environmental remediation charges, net(5)
(30)— (35)
Insurance recoveries(6)
16 — — 
Argentina currency devaluation losses(7)
(20)— — 
Expenses incurred due to natural disasters(8)
— — (17)
Change in allowance for doubtful accounts related to COVID-19— — 14 
Income from legal settlements— — 22 
Asbestos-related claims reserve adjustment(9)
— — 133 
Total Income before income taxes$1,748 $1,381 $1,815 
($ in millions)202320222021
Depreciation and amortization
Performance Coatings$279 $296 $308 
Industrial Coatings213 207 212 
Corporate / Non-Segment Items66 51 41 
Total$558 $554 $561 
Share of net earnings of equity affiliates
Performance Coatings$7 $7 $5 
Industrial Coatings1 — — 
Corporate / Non-Segment Items13 18 10 
Total $21 $25 $15 
Segment assets(10)
Performance Coatings$13,434 $13,088 $13,395 
Industrial Coatings5,643 5,802 5,807 
Corporate / Non-Segment Items2,570 1,854 2,149 
Total$21,647 $20,744 $21,351 
Investment in equity affiliates
Performance Coatings$48 $42 $33 
Industrial Coatings18 15 15 
Corporate / Non-Segment Items75 77 78 
Total $141 $134 $126 
Expenditures for property (including business acquisitions)
Performance Coatings$343 $254 $1,698 
Industrial Coatings184 313 784 
Corporate / Non-Segment Items131 65 26 
Total$658 $632 $2,508 
($ in millions)202320222021
Geographic Information
Segment income   
United States and Canada$1,048 $819 $865 
EMEA679 505 612 
Asia Pacific430 332 354 
Latin America518 386 340 
Total$2,675 $2,042 $2,171 
Property, plant and equipment — net   
United States and Canada$1,559 $1,394 $1,377 
EMEA1,010 943 1,069 
Asia Pacific718 685 702 
Latin America357 306 294 
Total$3,644 $3,328 $3,442 
(1)In the fourth quarter 2023, the company recorded impairment and other related charges due to goodwill impairment recognized for the traffic solutions reporting unit as a result of its annual goodwill impairment test. The fair value of the traffic solutions reporting unit decreased primarily due to increases in the cost of capital (discount rate assumption) and declines in the reporting unit’s long-term forecast driven by challenges at its operations in Argentina due to the highly inflationary environment and changes to the reporting unit’s global footprint, including the fourth quarter 2023 divestiture of its European and Australian businesses. In 2022, the company recorded impairment and other related charges due to the wind down of the company's operation in Russia. In 2021, impairment charges were recorded for the write-down of certain assets related to the previously planned sale of certain smaller entities in non-strategic regions.
(2)Business restructuring-related costs, net include business restructuring charges, offset by releases related to previously approved programs, which are included in Other charges/(income), 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 and Selling, general and administrative on the consolidated statement of income. Additionally, there was a $34 million gain on the sale of certain assets in 2021 in connection with the Company’s manufacturing footprint consolidation plans and associated restructuring programs. This gain is included in Other (income)/charges, net in the consolidated statement of income.
(3)Portfolio optimization includes losses on the sale of non-core assets, including the losses recognized on the sales of the Company's European and Australian traffic solutions businesses in 2023, which are included in Other charges/(income), net in the consolidated statement of income, accelerated amortization expense recognized in 2023 related to the exit of a non-core business, which is included in Amortization in the consolidated statement of income, and the impact for the step up to fair value of inventory acquired in certain acquisitions, which is included in Cost of sales, exclusive of depreciation and amortization in the consolidated statement of income. Portfolio optimization also 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 in the consolidated statement of income.
(4)In the first quarter 2023, PPG purchased group annuity contracts that transferred pension benefit obligations for certain of the company’s retirees in the U.S. to third-party insurance companies, resulting in a non-cash pension settlement charge. In 2021, the Company purchased group annuity contracts that transferred pension benefit obligations for certain of the Company’s retirees in Canada to a third-party insurance company.
(5)Environmental remediation charges represent environmental remediation costs at certain legacy PPG manufacturing sites. These charges are included in Other charges/(income), net in the consolidated statement of income.
(6)In the first quarter 2023, the company received reimbursement under its insurance policies for damages incurred at a southern U.S. factory from a winter storm in 2020. In the fourth quarter 2023, the company received reimbursement for a previously approved insurance claim under a policy covering legacy asbestos-related matters. These insurance recoveries are included in Other charges/(income), net in the consolidated statement of income.
(7)In December 2023, the central bank of Argentina adjusted the official foreign currency exchange rate for the Argentine peso, significantly devaluing the currency relative to the United States dollar. Argentina currency devaluation losses represent foreign currency translation losses recognized during December 2023 related to the devaluation of the Argentine peso, which is included in Other charges/(income), net in the consolidated statement of income.
(8)In early 2021, a winter storm damaged certain company factories in the southern U.S. Incremental expenses incurred due to these storms included costs related to maintenance and repairs of damaged property, freight and utility premiums and other incremental expenses directly related to the impacted areas. These incremental expenses are included in Other charges/(income), net in the consolidated statement of income.
(9)In 2021, the reserve for asbestos-related claims was reduced to reflect the Company’s current estimate of potential liability for these claims.
(10)Segment assets are the total assets used in the operation of each segment. Corporate assets principally include amounts recorded in Cash and cash equivalents, Deferred income taxes, and Property, plant and equipment, net on the consolidated balance sheet.