UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended June 30, 2006

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 incorporation or organization)	(I.R.S. Employer Identification No.)
One PPG Place, Pittsburgh, Pennsylvania	15272
(Address of principal executive offices)	(Zip Code)

(412) 434-3131

(Registrant’s telephone number, including area code)

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 whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 31, 2006, 165,173,901 shares of the Registrant’s common stock, par value $1.66-2/3 per share, were outstanding.

PPG INDUSTRIES, INC. AND SUBSIDIARIES

INDEX

	PAGE(S)
Part I. Financial Information
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Statement of Income	2
Condensed Consolidated Balance Sheet	3
Condensed Consolidated Statement of Cash Flows	4
Notes to Condensed Consolidated Financial Statements	5-23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24-30
Item 3. Quantitative and Qualitative Disclosures About Market Risk	31
Item 4. Controls and Procedures	31
Part II. Other Information
Item 1. Legal Proceedings	32-33
Item 1a. Risk Factors	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33-34
Item 4. Submission of Matters to a Vote of Security Holders	35
Item 6. Exhibits	35-37
Signature	38

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PPG INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Income (Unaudited)

(Millions, except per share amounts)

	Three Months Ended June 30						Six Months Ended June 30
	2006			2005			2006			2005
Net sales	$	2,824		$	2,656		$	5,462		$	5,149
Cost of sales		1,747			1,650			3,438			3,208
Gross profit		1,077			1,006			2,024			1,941
Other expenses (earnings):
Selling, general and administrative		495			461			955			911
Depreciation		84			85			166			172
Research and development		78			76			153			153
Interest		21			20			41			41
Amortization (Note 8)		10			8			19			16
Asbestos settlement – net (Note 16)		8			3			17			12
Business restructuring (Note 6)		2			—			37			—
Other (earnings) charges – net (Note16)		(26	)		(7	)		(38	)		131
Total other expenses – net		672			646			1,350			1,436
Income before income taxes and minority interest		405			360			674			505
Income tax expense		107			111			173			145
Minority interest		18			18			37			34
Net income	$	280		$	231		$	464		$	326
Earnings per common share (Note 4)	$	1.69		$	1.35		$	2.80		$	1.90
Earnings per common share – assuming dilution (Note 4)	$	1.68		$	1.34		$	2.79		$	1.89
Dividends per common share	$	0.48		$	0.47		$	0.95		$	0.92

The accompanying notes to the condensed consolidated financial statements are an integral part of this consolidated statement.

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PPG INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheet (Unaudited)

	June 30 2006			Dec. 31 2005
	(Millions)
Assets
Current assets:
Cash and cash equivalents	$	419		$	466
Receivables-net		2,248			1,871
Inventories (Note 7)		1,273			1,119
Other		577			563
Total current assets		4,517			4,019
Property (less accumulated depreciation of $5,694 million and $5,498 million)		2,364			2,304
Investments		341			311
Goodwill (Note 8)		1,244			1,166
Identifiable intangible assets (Note 8)		553			488
Other assets		483			393
Total	$	9,502		$	8,681
Liabilities and Shareholders’ Equity
Current liabilities:
Short-term debt and current portion of long-term debt	$	139		$	101
Asbestos settlement (Note 16)		560			472
Accounts payable and accrued liabilities		1,939			1,776
Total current liabilities		2,638			2,349
Long-term debt		1,196			1,169
Asbestos settlement (Note 16)		321			385
Deferred income taxes		122			90
Other postretirement benefits		608			587
Other liabilities		1,011			940
Total liabilities		5,896			5,520
Commitments and contingent liabilities (Note 16)
Minority interest		129			108
Shareholders’ equity:
Common stock		484			484
Additional paid-in capital		380			352
Retained earnings		7,364			7,057
Treasury stock		(4,013	)		(3,984	)
Unearned compensation		(32	)		(37	)
Accumulated other comprehensive loss (Note 11)		(706	)		(819	)
Total shareholders’ equity		3,477			3,053
Total	$	9,502		$	8,681

The accompanying notes to the condensed consolidated financial statements are an integral part of this consolidated statement.

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PPG INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Cash Flows (Unaudited)

	Six Months Ended June 30
	2006			2005
	(Millions)
Cash from operating activities	$	333		$	270
Investing activities:
Purchases of short-term investments		(516	)		(1,872	)
Proceeds from sales of short-term investments		516			1,922
Release of deposits held in escrow		67			—
Capital spending
Additions to property and long-term investments		(151	)		(130	)
Business acquisitions, net of cash balances acquired		(138	)		(25	)
Reductions of other property and investments		33			20
Cash used for investing activities		(189	)		(85	)
Financing activities:
Net change in borrowings with maturities of three months or less		(5	)		(3	)
Proceeds from other short-term debt		78			28
Repayment of other short-term debt		(90	)		(22	)
Proceeds from long-term debt		—			360
Repayment of long-term debt		(18	)		(374	)
Repayment of loans by employee stock ownership plan		5			5
Purchase of treasury stock		(48	)		(312	)
Issuance of treasury stock		29			136
Dividends paid		(157	)		(159	)
Cash used for financing activities		(206	)		(341	)
Effect of currency exchange rate changes on cash and cash equivalents		15			(33	)
Net decrease in cash and cash equivalents		(47	)		(189	)
Cash and cash equivalents, beginning of period		466			659
Cash and cash equivalents, end of period	$	419		$	470

The accompanying notes to the condensed consolidated financial statements are an integral part of this consolidated statement.

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PPG INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Financial Statements

The condensed consolidated financial statements included herein are unaudited. In the opinion of management, these statements include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair presentation of the financial position of PPG Industries, Inc. and subsidiaries (the “Company” or “PPG”) as of June 30, 2006, and the results of their operations for the three and six months ended June 30, 2006 and 2005, and their cash flows for the six months then ended. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in PPG’s Annual Report on Form 10-K for the year ended December 31, 2005.

The results of operations for the six months ended June 30, 2006 are not necessarily indicative of the results to be expected for the full year.

2. Newly Adopted Accounting Standards

In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs, an Amendment of ARB No. 43, Chapter 4.” SFAS No. 151 requires the exclusion of certain costs from inventories and the allocation of fixed production overheads to inventories to be based on the normal capacity of the production facilities. The provisions of this Statement are effective for costs incurred after December 31, 2005. Effective January 1, 2006, PPG adopted the provisions of SFAS No. 151. Our adoption of this standard did not have a material effect on PPG’s consolidated results of operations, financial position or liquidity.

In December 2004, the FASB issued a revision to SFAS No. 123, “Share-Based Payment,” (“SFAS No. 123R”) which became effective January 1, 2006, and now requires that all stock-based compensation awards be expensed based on their fair value. PPG began expensing stock options effective January 1, 2004, and effective January 1, 2006, we adopted SFAS No. 123R using the modified prospective application transition method. Because the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, and SFAS No. 123R are materially consistent as they relate to our equity plans, the adoption of SFAS No. 123R did not have a material impact on PPG’s consolidated results of operations, financial position or liquidity. Prior to our adoption of SFAS No. 123R, the benefits of tax deductions in excess of recognized compensation costs were reported as an operating cash flow. SFAS No. 123R requires such excess tax benefits to be reported as a financing cash inflow. The adoption of SFAS No. 123R did not have a material impact on PPG’s operating or financing cash flows for the six months ended June 30, 2006. See Note 15, “Stock-Based Compensation” for additional information.

3. Other New Accounting Standards

In June 2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109”. FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. We are currently in

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the process of evaluating the effect the adoption of this interpretation will have on PPG; however we do not expect it to have a material effect on PPG’s consolidated results of operations or financial position.

4. Earnings Per Common Share

The following table presents the earnings per common share calculations for the three and six months ended June 30, 2006 and 2005.

	Three Months Ended June 30				Six Months Ended June 30
(Millions, except per share amounts)	2006		2005		2006		2005
Earnings per common share
Net income	$	280	$	231	$	464	$	326
Weighted average common shares outstanding		165.9		171.1		165.9		171.7
Earnings per common share	$	1.69	$	1.35	$	2.80	$	1.90
Earnings per common share - assuming dilution
Net income	$	280	$	231	$	464	$	326
Weighted average common shares outstanding		165.9		171.1		165.9		171.7
Effect of dilutive securities:
Stock options		0.8		0.9		0.6		0.9
Other stock compensation plans		0.2		0.6		0.2		0.6
Potentially dilutive common shares		1.0		1.5		0.8		1.5
Adjusted weighted average common shares outstanding		166.9		172.6		166.7		173.2
Earnings per common share - assuming dilution	$	1.68	$	1.34	$	2.79	$	1.89

There were 3.7 million and 4.1 million outstanding stock options for the three and six months ended June 30, 2006, and 3.6 million and 3.3 million outstanding stock options for the three and six months ended June 30, 2005, respectively, that were excluded from the computation of diluted earnings per share due to their antidilutive effect.

5. Acquisitions

During the six months ended June 30, 2006, the Company made several acquisitions, primarily in our coatings and optical products businesses. The total cost of these acquisitions was $210 million, consisting of $138 million of cash and the assumption of $72 million of debt. In addition, certain of these acquisitions also provide for contingent payments and escrowed holdbacks that could result in future adjustments to the cost of the acquisitions.

During the second quarter of 2006, the Company acquired Intercast Europe, S.p.A., a manufacturer of nonprescription hard resin sunlenses with manufacturing and distribution operations in Italy, Thailand and Hong Kong. PPG also acquired certain assets of Shanghai

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Sunpool Building Material Co., Ltd. and its associated companies, including Shanghai IDI International Co., Ltd., and a group of Shanghai-based businesses that manufacture and distribute architectural coatings. In addition, the Company acquired certain assets of Eldorado Chemical Co., Inc., a U.S. manufacturer of paint strippers and technical cleaners for the aerospace industry. Also, the Company acquired the remaining 50% share of Dongju Industrial Co., Ltd., a South Korean coatings manufacturer. The Company has owned 50% of Dongju since 1985 and has accounted for this investment under the equity method of accounting. Preliminary purchase price allocation related to these acquisitions resulted in an excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, which has been recorded as an addition to goodwill.

During the first quarter of 2006, the Company purchased certain assets of Independent Glass Distributors, a wholesale distributor of automotive replacement glass and related products based in Cedar Rapids, Iowa. The preliminary purchase price allocation resulted in an excess of purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, which has been recorded as an addition to goodwill.

On August 1, 2006, the Company acquired the Performance Coatings and Finishes business of Ameron International Corporation at a purchase price of $115 million, subject to certain working capital adjustments. The preliminary purchase price allocation for this acquisition will be recorded in the third quarter of 2006.

During 2005, the Company made acquisitions at a cost totaling $91 million. The amount in 2005 relates primarily to four acquisitions. In the second quarter, the Company acquired the business of International Polarizer Holdings Trust, a privately held polarized film manufacturer for sun lens applications based in Marlborough, Massachusetts. In the third quarter, the Company acquired the business of Crown Coatings Industries, a privately held manufacturer of specialty wood coatings based in Singapore. In the fourth quarter, the Company acquired a network of 42 architectural coatings service centers from Iowa Paint Manufacturing. Also in the fourth quarter, the Company purchased the 30% minority interest in PPG Coatings (Hong Kong), which wholly owned a Chinese manufacturer of automotive and industrial coatings.

6. Business Restructuring

During the first quarter of 2006, the Company finalized plans for certain actions to reduce its workforce and consolidate facilities. In the first quarter, the Company recorded a charge of $35 million for restructuring and other related activities, including severance costs of $33 million and loss on asset impairments of $2 million. In the second quarter of 2006, the remaining approvals were received related to additional severance actions and a cost of $4 million was accrued. In addition, $2 million of the cost accrued in the first quarter was reversed in the second quarter as a result of actions being completed at a cost that was less than the estimated amount accrued. It is expected that these restructuring actions will be completed by December 2006.

The following table summarizes the details through June 30, 2006.

	Severance Costs			Asset Impairments		Total Charge			Employees Covered
	(Millions, except no. of employees)
Coatings	$	33		$	2	$	35		537
Glass		2			—		2		117
Total	$	35		$	2	$	37		654
Activity		(16	)		—		(16	)	(362	)
Balance	$	19		$	2	$	21		292

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7. Inventories

Inventories as of June 30, 2006 and December 31, 2005 are detailed below.

	June 30 2006		Dec. 31 2005
	(Millions)
Finished products	$	760	$	667
Work in process		131		111
Raw materials		249		213
Supplies		133		128
Total	$	1,273	$	1,119

Most domestic and certain foreign inventories are valued using the last-in, first-out method. If the first-in, first-out method of inventory valuation had been used, inventories would have been $252 million and $203 million higher as of June 30, 2006 and December 31, 2005, respectively.

8. Goodwill and Other Identifiable Intangible Assets

The change in the carrying amount of goodwill attributable to each business segment for the six months ended June 30, 2006 was as follows:

	Coatings		Glass		Chemicals		Total
	(Millions)
Balance, December 31, 2005	$	1,051	$	84	$	31	$	1,166
Goodwill from acquisitions		34		—		3		37
Currency translation		35		4		2		41
Balance, June 30, 2006	$	1,120	$	88	$	36	$	1,244

The carrying amount of acquired trademarks with indefinite lives as of June 30, 2006 and December 31, 2005 totaled $144 million.

The Company’s identifiable intangible assets with finite lives are being amortized over their estimated useful lives and are detailed below.

	June 30, 2006							December 31, 2005
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
	(Millions)
Acquired technology	$	384	$	(152	)	$	232	$	362	$	(142	)	$	220
Other		291		(114	)		177		225		(101	)		124
Balance	$	675	$	(266	)	$	409	$	587	$	(243	)	$	344

Aggregate amortization expense for the three and six months ended June 30, 2006 related to these identifiable intangible assets, was $10 million and $19 million, respectively, and $8 million and $16 million, respectively for the three and six months ended June 30, 2005. As of June 30, 2006, estimated future amortization expense of identifiable intangible assets is as follows: $22 million for the remaining two quarters of 2006 and $46 million, $42 million, $40 million, $39 million and $35 million in 2007, 2008, 2009, 2010 and 2011, respectively.

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9. Debt

In June 2005, the Company issued €300 million of 3.875% Senior Notes due 2015 (the “Euro Notes”). The proceeds from the Euro Notes were used to repay short-term commercial paper obligations incurred in June 2005 in connection with the purchase of $100 million of 6.5% notes due 2007, $159 million of 7.05% notes due 2009 and $16 million of 6.875% notes due 2012, as well as for general corporate purposes. In the second quarter of 2005, the Company recorded a pre-tax charge of $19 million ($12 million aftertax or 7 cents per share) for debt refinancing costs which is included in “Other (earnings) charges – net” in the accompanying condensed consolidated statement of income for the three and six months ended June 30, 2005.

The fixed rate notes that were retired had been converted to variable rate notes using interest rate swaps. As a result, the debt was reflected in the balance sheet at fair value through the inclusion of the impact of these derivatives on the debt. As a result of the early retirement of these debt instruments, $8 million of these fair value adjustments were recognized and included as a net reduction in the debt refinancing costs described above.

As of June 30, 2006, PPG held interest rate swaps that effectively convert $175 million of fixed rate notes to variable rates.

The Company had outstanding letters of credit of $68 million and guarantees of $64 million as of June 30, 2006. The Company does not believe any loss related to such guarantees is likely.

10. Pensions and Other Postretirement Benefits

The net periodic benefit costs for the three and six months ended June 30, 2006 and 2005 were as follows:

	Pensions
	Three Months Ended June 30						Six Months Ended June 30
	2006			2005			2006			2005
	(Millions)
Service cost	$	17		$	16		$	36		$	33
Interest cost		48			48			98			95
Expected return on plan assets		(56	)		(56	)		(114	)		(112	)
Amortization of prior service cost		4			5			8			10
Amortization of actuarial losses		27			20			53			39
Net periodic pension cost	$	40		$	33		$	81		$	65

The funding requirements for our U.S. defined benefit pension plans are expected to change as a result of pending legislation currently being considered by the U.S. Congress. Despite the current uncertainty concerning these funding requirements, we do not expect to have a mandatory contribution to the U.S. defined benefit plans in 2006 or 2007. However, we are likely to make voluntary contributions between $100 million and $200 million to our U.S. defined pension plans in the second half of 2006. We expect to make mandatory contributions to our non-U.S. plans in 2006 of approximately $20 million, of which approximately $10 million was contributed as of June 30, 2006.

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The net periodic other postretirement benefit costs for the three and six months ended June 30, 2006 and 2005 were as follows:

	Other Postretirement Benefits
	Three Months Ended June 30						Six Months Ended June 30
	2006			2005			2006			2005
	(Millions)
Service cost	$	6		$	5		$	13		$	11
Interest cost		15			16			31			32
Amortization of prior service cost		(3	)		(4	)		(7	)		(8	)
Amortization of actuarial losses		10			9			19			18
Net periodic other postretirement benefit cost	$	28		$	26		$	56		$	53

The net periodic costs for other postretirement benefits in the table above include the benefit of the subsidy under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 for all periods presented.

11. Comprehensive Income

Total comprehensive income for the three and six months ended June 30, 2006 and 2005 was as follows:

	Three Months Ended June 30						Six Months Ended June 30
	2006			2005			2006			2005
	(Millions)
Net income	$	280		$	231		$	464		$	326
Other comprehensive income, net of tax:
Currency translation adjustment		86			(110	)		117			(190	)
Unrealized (losses) gains on marketable securities		(1	)		3			1			1
Net change – derivatives (Note 12)		(5	)		1			(5	)		4
		80			(106	)		113			(185	)
Total comprehensive income	$	360		$	125		$	577		$	141

12. Derivative Financial Instruments

PPG’s policies do not permit speculative use of derivative financial instruments. PPG uses derivative instruments to manage its exposure to fluctuating natural gas prices through the use of natural gas swap contracts. PPG also uses forward currency and option contracts as hedges against its exposure to variability in exchange rates on short-term intercompany borrowings and cash flows denominated in foreign currencies and to translation risk. PPG uses foreign denominated debt to hedge investments in foreign operations. Interest rate swaps are used to manage the Company’s exposure to changing interest rates. We also use an equity forward arrangement to hedge a portion of our exposure to changes in the fair value of PPG stock that is to be contributed to the asbestos settlement trust as discussed in Note 16, “Commitments and Contingent Liabilities.”

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During the first six months of 2006, other comprehensive income included a net loss due to derivatives of $5 million, net of tax. This loss was comprised of realized losses of $12 million and unrealized losses of $17 million. The realized losses related to the settlement during the period of natural gas contracts and interest rate swaps owned by one of the Company’s investees accounted for under the equity method of accounting. These losses were offset in part by realized gains related to the settlement of foreign currency contracts. The unrealized losses related primarily to the change in fair value of the natural gas contracts. These unrealized losses were partially offset by unrealized gains on foreign currency contracts and interest rate swaps owned by one of the Company’s investees accounted for under the equity method of accounting.

During the first six months of 2005, other comprehensive income included a net gain due to derivatives of $4 million, net of tax. This gain was comprised of realized losses of $2 million and unrealized gains of $2 million. The realized losses primarily related to the settlement during the period of natural gas and foreign currency contracts and the settlement of interest rate swaps owned by one of the Company’s investees accounted for under the equity method of accounting. The unrealized gains related primarily to the change in fair value of the natural gas contracts and foreign currency contracts. These unrealized gains were partially offset by unrealized losses on interest rate swaps owned by the equity investee.

In November 2002, PPG entered into a one-year renewable equity forward arrangement with a bank in order to partially mitigate the impact of changes in the fair value of PPG stock that is to be contributed to the asbestos settlement trust as discussed in Note 16. This instrument, which has been renewed annually, is recorded at fair value as an asset or liability and changes in the fair value of this instrument are reflected in “Asbestos settlement – net” in the condensed consolidated statement of income. The fair value of this instrument as of June 30, 2006 and December 31, 2005 was a current asset of $17 million and $10 million, respectively. PPG recorded income of $2 million and $7 million for the three and six months ended June 30, 2006, respectively, and expense of $8 million and $5 million for the three and six months ended June 30, 2005, respectively, for the change in fair value of this instrument.

13. Cash Flow Information

Cash payments for interest were $52 million and $44 million for the six months ended June 30, 2006 and 2005, respectively. Net cash payments for income taxes for the six months ended June 30, 2006 and 2005 were $161 million and $202 million, respectively.

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14. Business Segment Information

Business segment net sales and operating income for the three and six months ended June 30, 2006 and 2005 were as follows:

	Three Months Ended June 30						Six Months Ended June 30
	2006			2005			2006			2005
	(Millions)
Net sales:
Coatings	$	1,579		$	1,450		$	3,019		$	2,782
Glass		611			581			1,176			1,135
Chemicals		634			625			1,267			1,232
Total (a)	$	2,824		$	2,656		$	5,462		$	5,149
Operating income:
Coatings (b)	$	272		$	210		$	439		$	219
Glass (c)		48			52			80			93
Chemicals		137			152			265			307
Total		457			414			784			619
Interest expense – net		(18	)		(17	)		(35	)		(34	)
Asbestos settlement – net		(8	)		(3	)		(17	)		(12	)
Compensation cost associated with stock options (Note 15)		(8	)		(8	)		(15	)		(15	)
Other unallocated corporate expense – net (d)		(18	)		(26	)		(43	)		(53	)
Income before income taxes and minority interest	$	405		$	360		$	674		$	505

(a) Intersegment net sales for the three and six months ended June 30, 2006 and 2005 were not material.

(b) Coatings operating income for the three months ended June 30, 2006 included pretax earnings of $28 million for insurance recoveries and pretax charges of $2 million for business restructuring, consisting of severance costs. Coatings operating income for the six months ended June 30, 2006 included pretax earnings of $28 million for insurance recoveries and pretax charges of $35 million for business restructuring, including severance costs of $33 million and loss on asset impairments of $2 million. Coatings operating income for the six months ended June 30, 2005, included a pretax charge of $150 million related to the legal settlement with Marvin Windows & Doors (“Marvin”) discussed in Note 16, “Commitments and Contingent Liabilities.”

(c) Glass operating income for the six months ended June 30, 2006 included pretax charges of $2 million for business restructuring, consisting of severance costs.

(d) Other unallocated corporate expense – net for the three and six months ended June 30, 2005 included a pretax charge of $19 million for debt refinancing costs.

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15. Stock-Based Compensation

The Company’s stock-based compensation includes stock options, restricted stock units (“RSUs”) and annual grants of contingent shares that are earned based on achieving targeted levels of total shareholder return. On April 20, 2006, the PPG Industries, Inc. Omnibus Incentive Plan (“PPG Omnibus Plan”) was approved by shareholders of the Company. The PPG Omnibus Plan consolidated into one plan several of the Company’s previously existing compensatory plans providing for equity-based and cash incentive awards to certain of the Company’s employees, directors and consultants. Effective April 20, 2006, all grants of stock options, RSUs and contingent shares are made under the PPG Omnibus Plan. The provisions of the PPG Omnibus Plan do not modify the terms of awards that were granted under the Company’s previously existing compensatory plans.

Total stock-based compensation cost was $10 million and $18 million for the three and six months ended June 30, 2006, respectively, and $23 million and $46 million for the three and six months ended June 30, 2005, respectively. Stock-based compensation cost for the three and six months ended June 30, 2005 includes $14 million and $28 million, respectively, for amounts paid under the Company’s incentive compensation and management award plans, which allowed for payment partially in PPG common stock in 2005. These plans no longer allow for payment in PPG common stock, and therefore are not included in the amount of total stock-based compensation cost in 2006. The total income tax benefit recognized in the income statement related to the stock-based compensation was $3 million and $6 million for the three and six months ended June 30, 2006, respectively, and $9 million and $18 million for the three and six months ended June 30, 2005, respectively.

Stock Options

PPG has outstanding stock option awards that have been granted under two stock option plans, the PPG Industries, Inc. Stock Plan (“PPG Stock Plan”) and the PPG Industries, Inc. Challenge 2000 Stock Plan (“PPG Challenge 2000 Stock Plan”). Under the PPG Stock Plan, certain employees of the Company have been granted options to purchase shares of common stock at prices equal to the fair market value of the shares on the date the options were granted. The options are generally exercisable beginning from six to 48 months after being granted and have a maximum term of 10 years. Upon exercise of a stock option, shares of Company stock are issued from treasury stock. The PPG Stock Plan includes a restored option provision for options granted prior to January 1, 2003 that allows an optionee to exercise options and satisfy the option price by certifying ownership of mature shares of PPG common stock with equivalent market value. Shares available for future grants under the PPG Stock Plan were 8,561,989 and 9,557,678 as of June 30, 2006 and December 31, 2005, respectively.

On July 1, 1998, under the PPG Challenge 2000 Stock Plan, the Company granted to substantially all active employees of the Company and its majority owned subsidiaries the option to purchase 100 shares of common stock at its then fair market value of $70 per share. The options became exercisable on July 1, 2003 and expire on June 30, 2008.

The fair value of stock options issued to employees is measured on the date of grant and is recognized as expense over the requisite service period. PPG estimates the fair value of stock options using the Black-Scholes option pricing model. The risk-free interest rate is determined by using the U.S. Treasury yield curve at the date of the grant and using a maturity equal to the expected life of the option. The expected life of options is calculated using the average of the vesting term and the maximum term, as prescribed by SEC Staff Accounting Bulletin No. 107, “Share-Based Payment”. The expected dividend yield and volatility are based on historical stock prices and dividend amounts over past time periods equal in length to the expected life of

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the options. The fair value of each grant was calculated with the following weighted average assumptions:

	Three Months Ended June 30				Six Months Ended June 30
	2006		2005		2006		2005
Risk free interest rate	5.0	%	3.6	%	4.7	%	3.8	%
Expected life of option in years	3.5		3.1		5.6		4.4
Expected dividend yield	3.0	%	3.1	%	3.1	%	3.1	%
Expected volatility	19.0	%	24.1	%	25.4	%	26.9	%

The weighted average fair value of options granted was $13.64 per share and $14.21 per share during the six months ended June 30, 2006 and 2005, respectively.

A summary of stock options outstanding and exercisable as of June 30, 2006 and activity for the three and six months then ended is presented below:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Intrinsic Value (in millions)
Outstanding, January 1, 2006	11,738,018		$	59.91	4.8	$	31
Granted	811,229		$	59.98
Exercised	(257,343	)	$	52.22
Forfeited/Expired	(331,712	)	$	66.30
Outstanding, March 31, 2006	11,960,192		$	59.91	5.0	$	65
Granted	210,510		$	67.70
Exercised	(596,629	)	$	56.40
Forfeited/Expired	(40,900	)	$	64.84
Outstanding, June 30, 2006	11,533,173		$	60.21	4.8	$	81
Exercisable, June 30, 2006	8,101,334		$	59.36	3.7	$	64

At June 30, 2006, there was $21 million of total unrecognized compensation cost related to outstanding stock options that have not yet vested. This cost is expected to be recognized as expense over a weighted average period of 1.1 years.

The following table presents stock option activity for the three and six months ended June 30, 2006 and 2005:

	Three Months Ended June 30				Six Months Ended June 30
	2006		2005		2006		2005
	(Millions)
Total intrinsic value of stock options exercised	$	7	$	7	$	9	$	41
Cash received from stock option exercises		21		13		29		136
Income tax benefit from the exercise of stock options		1		2		1		4
Total fair value of stock options vested		—		5		1		6

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Restricted Stock Units

Beginning in 2005, comparable long-term incentive value has been delivered to selected key management employees by reducing reliance on stock options and incorporating RSUs, which have either time or performance-based vesting features. The fair value of an RSU is equal to the market value of a share of stock on the date of grant. Time-based RSUs vest over the three-year period following the date of grant, unless forfeited, and will be paid out in the form of stock, cash or a combination of both at the end of the three-year vesting period. Performance-based RSUs vest based on achieving specific annual performance targets for earnings per share growth and cash flow return on capital over the three-year period following the date of grant. Unless forfeited, the performance-based RSUs will be paid out in the form of stock, cash or a combination of both at the end of the three-year vesting period if PPG meets the performance targets. The actual award for performance-based vesting may range from 0% to 150% of the original grant, as 50% of the grant vests in each year that targets are met during the three-year period. If the designated performance targets are not met in any of the three years in an award period, no payout will be made on the performance-based RSUs. For the purposes of expense recognition, we have assumed that the performance-based RSUs granted in 2005 and 2006 will vest at the 100% level. The performance target for 2005 for the 2005-2007 grant was achieved.

The following table summarizes RSU activity under the long-term incentive plan for the three and six months ended June 30, 2006:

	Number of Shares		Weighted Average Fair Value		Intrinsic Value (in millions)
Outstanding, January 1, 2006	236,100		$	71.46	$	14
Granted	250,623		$	59.63
Forfeited	(990	)	$	71.88
Outstanding, March 31, 2006	485,733		$	65.36	$	31
Granted	—			—
Forfeited	(2,550	)	$	66.40
Outstanding, June 30, 2006	483,183		$	65.36	$	32

There was $20 million of total unrecognized compensation cost related to nonvested RSUs outstanding as of June 30, 2006. This cost is expected to be recognized as expense over a weighted average period of 1.7 years.

Contingent Share Grants

The Company also provides grants of contingent shares that will be earned based on PPG total shareholder return over the three-year term following the date of grant. Contingent share grants (“TSR”) are made annually and are paid out at the end of each three-year period if the company achieves target performance. Performance is measured by determining the percentile rank of the total shareholder return of PPG Common Stock (stock price plus accumulated dividends) in relation to the total shareholder return of the S&P 500 and of the Basic Materials sector of the S&P 500. Compensation expense is recognized over the three-year award period based on fair value, giving consideration to the Company’s percentile rank of total shareholder return. The payment of awards following the three-year award period will be based in accordance with the scale set forth in the plan agreement and may range from 0% to 220% of the initial grant. A payout of 100% is earned if the target performance is achieved. Contingent share awards earn dividend equivalents during the three-year award period, which are credited to participants in the form of Common Stock Equivalents. Any payments made at

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the end of the award period may be in the form of stock, cash or a combination of both. The TSR awards qualify as liability awards, and expense will be recognized over the award period based on the fair value of the awards as remeasured in each reporting period until settlement of the awards.

As of June 30, 2006, there was $6 million of total unrecognized compensation cost related to outstanding TSR awards based on the current estimate of fair value. This cost is expected to be recognized as expense over a weighted average period of 2.0 years.

16. Commitments and Contingent Liabilities

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. These lawsuits and claims, the most significant of which are described below, relate to product liability, contract, patent, environmental, antitrust and other matters arising out of the conduct of PPG’s business. To the extent that these lawsuits and claims involve personal injury and property damage, PPG believes it has adequate insurance; however, certain of PPG’s insurers are contesting coverage with respect to some of these claims, and other insurers, as they had prior to the asbestos settlement described below, may contest coverage with respect to some of the asbestos claims if the settlement is not implemented. PPG’s lawsuits and claims against others include claims against insurers and other third parties with respect to actual and contingent losses related to environmental, asbestos and other matters.

The result of any future litigation of such lawsuits and claims is inherently unpredictable. However, management believes that, in the aggregate, the outcome of all lawsuits and claims involving PPG, including asbestos-related claims in the event the settlement described below does not become effective, will not have a material effect on PPG’s consolidated financial position or liquidity; however, such outcome may be material to the results of operations of any particular period in which costs, if any, are recognized.

The Company has been named as a defendant, along with various other co-defendants, in a number of antitrust lawsuits filed in federal and state courts. These suits allege that PPG acted with competitors to fix prices and allocate markets in the flat glass and automotive refinish industries. The plaintiffs in these cases are seeking economic and, in certain cases, treble damages and injunctive relief.

Twenty-nine glass antitrust cases were filed in federal courts, all of which were consolidated as a class action in the U.S. District Court for the Western District of Pennsylvania located in Pittsburgh, Pa. All of the other defendants in the glass class action antitrust case previously settled with the plaintiffs and were dismissed from the case. On May 29, 2003, the Court granted PPG’s motion for summary judgment dismissing the claims against PPG in the glass class action antitrust case. The plaintiffs in that case appealed that order to the U.S. Third Circuit Court of Appeals. On September 30, 2004, the U.S. Third Circuit Court of Appeals affirmed in part and reversed in part the dismissal of PPG and remanded the case for further proceedings. PPG petitioned the U.S. Supreme Court for permission to appeal the decision of the U.S. Third Circuit Court of Appeals, however, the U.S. Supreme Court rejected PPG’s petition for review.

On October 19, 2005, PPG entered into a settlement agreement to settle the federal glass class action antitrust case in order to avoid the ongoing expense of this protracted case, as well as the risks and uncertainties associated with complex litigation involving jury trials. Pursuant to the settlement agreement, PPG agreed to pay $60 million, which was deposited in escrow, and agreed to bear up to $500,000 in settlement administration costs. The U.S. District Court

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entered an order on February 7, 2006, approving the settlement, and the funds were released from escrow. This order is no longer appealable. As a result of the settlement, PPG also paid $900,000 pursuant to a preexisting contractual obligation to a plaintiff that did not participate in the federal glass class action antitrust case. Finally, independent state court cases remain pending in California and Tennessee involving claims that are not included in the settlement of the federal glass class action antitrust case. Notwithstanding that PPG settled the federal glass class action antitrust case, PPG’s management continues to believe that there was no wrongdoing on the part of the Company and also believes that PPG has meritorious defenses to the independent state court cases. PPG is currently engaged in discussions concerning potential settlement of the California and Tennessee cases.

Approximately 60 cases alleging antitrust violations in the automotive refinish industry have been filed in various state and federal jurisdictions. The plaintiffs in these cases have not yet specified an amount of alleged damages. The approximately 55 federal cases have been consolidated as a class action in the U.S. District Court for the Eastern District of Pennsylvania located in Philadelphia, Pa. Certain of the defendants in the federal automotive refinish case have settled. This case is still at an early stage and discovery is continuing with the remaining defendants. The automotive refinish cases in state courts have either been stayed pending resolution of the federal proceedings or have been dismissed. Neither PPG’s investigation conducted through its counsel of the allegations in these cases nor the discovery conducted to date has identified a basis for the plaintiffs’ allegations that PPG participated in a price-fixing conspiracy in the U.S. automotive refinish industry. PPG’s management continues to believe that there was no wrongdoing on the part of the Company and also believes it has meritorious defenses in these automotive refinish antitrust cases. As discovery in the federal class action antitrust case is ongoing, we will continue to evaluate any additional information that becomes available in developing our conclusion on the outcome of this contingent liability. While currently not expected, if future developments in the case are adverse to the company, we could consider a settlement of the automotive refinish antitrust case. We have no present intention of settling any of the automotive refinish antitrust cases.

Beginning in April 1994, the Company was a defendant in a suit filed by Marvin alleging numerous claims, including breach of warranty. All of the plaintiff’s claims, other than breach of warranty, were dismissed. However, on February 14, 2002, a federal jury awarded Marvin $136 million on the remaining claim. Subsequently, the court added $20 million for interest bringing the total judgment to $156 million. PPG appealed that judgment and the appeals court heard the parties’ arguments on June 9, 2003. On March 23, 2005, the appeals court ruled against PPG. Subsequent to the ruling by the court, PPG and Marvin agreed to settle this matter for $150 million and PPG recorded a charge for that amount in the first quarter of 2005, which is included in “Other (earnings) charges – net” in the accompanying condensed consolidated statement of income for the six months ended June 30, 2005. PPG paid the settlement on April 28, 2005. PPG subsequently received $51 million in insurance recoveries related to this settlement; of which $28 million and $33 million is included in “Other (earnings) charges – net” for the three and six months ended June 30, 2006, respectively, and the remainder was received in the third quarter of 2005.

For over thirty years, PPG has been a defendant in lawsuits involving claims alleging personal injury from exposure to asbestos. As of June 30, 2006, PPG was one of many defendants in numerous asbestos-related lawsuits involving approximately 116,000 claims. Most of PPG’s potential exposure relates to allegations by plaintiffs that PPG should be liable for injuries involving asbestos-containing thermal insulation products manufactured and distributed by Pittsburgh Corning Corporation (“PC”). PPG and Corning Incorporated are each 50% shareholders of PC. PPG has denied responsibility for, and has defended, all claims for any injuries caused by PC products.

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On April 16, 2000, PC filed for Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the Western District of Pennsylvania located in Pittsburgh, Pa. Accordingly, in the first quarter of 2000, PPG recorded an aftertax charge of $35 million for the write-off of all of its investment in PC. As a consequence of the bankruptcy filing and various motions and orders in that proceeding, the asbestos litigation against PPG (as well as against PC) has been stayed and the filing of additional asbestos suits against them has been enjoined, until thirty days after the effective date of a confirmed plan of reorganization for PC substantially in accordance with the settlement arrangement among PPG and several other parties discussed below. The stay may be terminated if the Bankruptcy Court determines that such a plan will not be confirmed, or the settlement arrangement set forth below is not likely to be consummated.

On May 14, 2002, PPG announced that it had agreed with several other parties, including certain of its insurance carriers, the official committee representing asbestos claimants in the PC bankruptcy, and the legal representatives of future asbestos claimants appointed in the PC bankruptcy, on the terms of a settlement arrangement relating to asbestos claims against PPG and PC (the “PPG Settlement Arrangement”).

On March 28, 2003, Corning Incorporated announced that it had separately reached its own arrangement with the representatives of asbestos claimants for the settlement of certain asbestos claims that might arise from PC products or operations (the “Corning Settlement Arrangement”).

The terms of the PPG Settlement Arrangement and the Corning Settlement Arrangement have been incorporated into a bankruptcy reorganization plan for PC along with a disclosure statement describing the plan, which PC filed with the Bankruptcy Court on April 30, 2003. Amendments to the plan and disclosure statement were filed on August 18 and November 20, 2003. Creditors and other parties with an interest in the bankruptcy proceeding were entitled to file objections to the disclosure statement and the plan of reorganization, and a few parties filed objections. On November 26, 2003, after considering objections to the second amended disclosure statement and plan of reorganization, the Bankruptcy Court entered an order approving such disclosure statement and directing that it be sent to creditors, including asbestos claimants, for voting. The Bankruptcy Court established March 2, 2004 as the deadline for receipt of votes. In order to approve the plan, at least two-thirds in amount and more than one-half in number of the allowed creditors in a given class must vote in favor of the plan, and for a plan to contain a channeling injunction for present and future asbestos claims under §524(g) of the Bankruptcy Code, as described below, seventy-five percent of the asbestos claimants voting must vote in favor of the plan. On March 16, 2004, notice was received that the plan of reorganization received the required votes to approve the plan with a channeling injunction. From May 3-7, 2004, the Bankruptcy Court judge conducted a hearing regarding the fairness of the settlement, including whether the plan would be fair with respect to present and future claimants, whether such claimants would be treated in substantially the same manner, and whether the protection provided to PPG and its participating insurers would be fair in view of the assets they would convey to the asbestos settlement trust (the “Trust”) to be established as part of the plan. At that hearing, certain creditors and other parties in interest raised objections to the PC plan of reorganization. Following that hearing, the Bankruptcy Court set deadlines for the parties to develop agreed-upon and contested Findings of Fact and Conclusions of Law and scheduled oral argument for contested items on November 9, 2004. Subsequently, the Bankruptcy Court rescheduled such oral argument for November 17, 2004.

The Bankruptcy Court heard oral arguments on the contested items on November 17-18, 2004. At the conclusion of the hearing, the Bankruptcy Court agreed to consider certain post-hearing written submissions. In a further development, on February 2, 2005, the Bankruptcy Court

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established a briefing schedule to address whether certain aspects of a decision of the U.S. Third Circuit Court of Appeals in an unrelated case have any applicability to the PC plan of reorganization. The Bankruptcy Court heard oral arguments on the briefs on March 16, 2005, but has yet to render any decision. At the status conference on April 15, 2005, the Bankruptcy Court judge stated her intention to rule on the confirmability of the current PC plan of reorganization. Subsequently, at the December 13, 2005, omnibus hearing, the Bankruptcy Court judge indicated that she intended to rule on the confirmability of the PC plan of reorganization prior to the omnibus hearing that was scheduled for February 28, 2006. The Bankruptcy Court did not rule on the confirmability of the PC plan of reorganization at that hearing, but stated that she was prepared to rule in the near future provided certain amendments were made to the plan. Those amendments were filed, as directed, on March 17, 2006. Objections to the amendments were filed by certain parties on or before the April 7, 2006 deadline set by the Bankruptcy Court. Responses to the objections were filed by PPG and Corning on April 13, 2006. The Bankruptcy Court judge considered the amendments at a status conference held on April 25, 2006, and stated that the amendments filed by the plan proponents were in compliance with her request at the February 28, 2006 hearing, and that the Court was prepared to rule on the confirmability of the plan. In response to their request, the parties that objected to the amendments were given until May 31 to file supplemental briefs, with the plan proponents and plan supporters given until June 30 to respond. These briefs were filed, and argument on these briefs was heard at the July 21, 2006 omnibus hearing. After hearing such argument, the Bankruptcy Court judge indicated that a ruling on the confirmability of the PC plan of reorganization might be issued by the September 26, 2006 omnibus hearing, or sometime thereafter. PPG currently believes the Third Circuit Court of Appeals’ decision should not adversely affect the eventual confirmability of a plan of reorganization for PC incorporating the terms of the PPG Settlement Arrangement.

If the Bankruptcy Court ultimately determines that all requirements to confirm a plan of reorganization for PC have been satisfied, the Bankruptcy Court would enter a confirmation order of the PC plan of reorganization. That order may be appealed to the U.S. District Court located in Pittsburgh, Pa. Assuming that the District Court approves the confirmation order following any such appeal, interested parties could further appeal the District Court’s order to the U.S. Third Circuit Court of Appeals and subsequently seek review of any decision of the Third Circuit Court of Appeals by the U. S. Supreme Court. The PPG Settlement Arrangement will not become effective until 30 days after the PC plan of reorganization is finally approved by an appropriate court order that is no longer subject to appellate review (the “Effective Date”).

If the PC plan of reorganization incorporating the terms of the PPG Settlement Arrangement and the Corning Settlement Arrangement is approved by the Bankruptcy Court, the Court would enter a channeling injunction under §524(g) and other provisions of the Bankruptcy Code, prohibiting present and future claimants from asserting bodily injury claims after the Effective Date against PPG or its subsidiaries or PC relating to the manufacture, distribution or sale of asbestos-containing products by PC or PPG or its subsidiaries. The injunction would also prohibit co-defendants in those cases from asserting claims against PPG or its subsidiaries for contribution, indemnification or other recovery. All such claims would be filed with the Trust and only paid from the assets of the Trust.

The channeling injunction would not extend to claims against PPG alleging injury caused by asbestos on premises owned, leased or occupied by PPG (so called “premises claims”), or claims alleging property damage resulting from asbestos. There are no property damage claims pending against PPG or its subsidiaries. Approximately 7,000 of the 116,000 claims currently pending against PPG and its subsidiaries are premises claims. PPG believes that it has adequate insurance for the asbestos claims that would not be covered by any channeling injunction and that any financial exposure resulting from such claims will not have a material

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effect on PPG’s consolidated financial position, liquidity or results of operations. Historically, many of PPG’s premises claims had been resolved without payment from PPG. Prior to the entry of the stay of asbestos litigation entered by the Bankruptcy Court in connection with PC’s Chapter 11 Bankruptcy filing, PPG had paid in the aggregate about $7 million to settle approximately 1,100 premises claims, virtually all of which had been covered by PPG’s insurers. Certain claimants that have alleged premises claims currently pending against PPG have recently moved the Bankruptcy Court for an order lifting the stay as to their claims. The Bankruptcy Court has not granted these creditors’ motions, but did direct PPG and the claimants to engage in good faith negotiations toward the potential settlement of the premises claims at issue. As a result of those negotiations, PPG and its primary insurers have agreed to settle approximately 80 premises claims, and remain in settlement negotiations in connection with another approximately 350 claims. PPG’s insurers have agreed to provide insurance coverage for a major portion of the payments made in connection with these settlements. PPG has accrued the portion of the settlement and proposed settlement amounts not covered by insurance in the quarter ended June 30, 2006. Premises claims that have not been resolved remain subject to the stay.

PPG has no obligation to pay any amounts under the PPG Settlement Arrangement until the Effective Date. PPG and certain of its insurers (along with PC) would then make payments to the Trust, which would provide the sole source of payment for all present and future asbestos bodily injury claims against PPG, its subsidiaries or PC alleged to be caused by the manufacture, distribution or sale of asbestos products by these companies. PPG would convey the following assets to the Trust. First, PPG would convey the stock it owns in PC and Pittsburgh Corning Europe. Second, PPG would transfer 1,388,889 shares of PPG’s common stock. Third, PPG would make aggregate cash payments to the Trust of approximately $998 million, payable according to a fixed payment schedule over 21 years, beginning on June 30, 2003, or, if later, the Effective Date. PPG would have the right, in its sole discretion, to prepay these cash payments to the Trust at any time at a discount rate of 5.5% per annum as of the prepayment date. Under the payment schedule, the amount due June 30, 2003 was $75 million. In addition to the conveyance of these assets, PPG would pay $30 million in legal fees and expenses on behalf of the Trust to recover proceeds from certain historical insurance assets, including policies issued by certain insurance carriers that are not participating in the settlement, the rights to which would be assigned to the Trust by PPG.

PPG’s participating historical insurance carriers would make cash payments to the Trust of approximately $1.7 billion between the Effective Date and 2023. These payments could also be prepaid to the Trust at any time at a discount rate of 5.5% per annum as of the prepayment date. In addition, as referenced above, PPG would assign to the Trust its rights, insofar as they relate to the asbestos claims to be resolved by the Trust, to the proceeds of policies issued by certain insurance carriers that are not participating in the PPG Settlement Arrangement and from the estates of insolvent insurers and state insurance guaranty funds.

PPG would grant asbestos releases to all participating insurers, subject to a coverage-in-place agreement with certain insurers for the continuing coverage of premises claims (discussed above). PPG would grant certain participating insurers full policy releases on primary policies and full product liability releases on excess coverage policies. PPG would also grant certain other participating excess insurers credit against their product liability coverage limits.

In the second quarter of 2002, an initial charge of $772 million was recorded for the estimated cost of the PPG Settlement Arrangement which included the net present value as of December 31, 2002, using a discount rate of 5.5% of the aggregate cash payments of approximately $998 million to be made by PPG to the Trust. That amount also included the carrying value of PPG’s stock in Pittsburgh Corning Europe, the fair value as of June 30, 2002 of 1,388,889 shares of

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PPG common stock and $30 million in legal fees of the Trust to be paid by PPG, which together with the first payment originally scheduled to be made to the Trust on June 30, 2003, were reflected in the current liability for PPG’s asbestos settlement in the balance sheet as of June 30, 2002. The net present value at that date of the remaining payments of $566 million was recorded in the noncurrent liability for asbestos settlement. The following table summarizes the impact on our income statement for the three and six months ended June 30, 2006 and 2005 resulting from the PPG Settlement Arrangement including the change in fair value of the stock to be transferred to the asbestos settlement trust and the equity forward instrument (see Note 12, “Derivative Financial Instruments”) and the increase in the net present value of the future payments to be made to the Trust.

	Three Months Ended June 30						Six Months Ended June 30
Increase (decrease) in expense:	2006			2005			2006			2005
	(Millions)
Change in fair value:
PPG stock	$	4		$	(12	)	$	12		$	(7	)
Equity forward instrument		(2	)		8			(7	)		5
Accretion of asbestos liability		6			7			12			14
Asbestos settlement – net expense	$	8		$	3		$	17		$	12

The fair value of the equity forward instrument was $17 million and $10 million as of June 30, 2006 and December 31, 2005, respectively, and was included as an other current asset in the accompanying condensed consolidated balance sheet. Payments under the fixed payment schedule require annual payments that are due each June. The current portion of the asbestos settlement liability included in the accompanying condensed consolidated balance sheet as of June 30, 2006, consists of all such payments required through June 2007, the fair value of PPG’s common stock and the carrying value of PPG’s stock in Pittsburgh Corning Europe to be contributed to the Trust and legal fees and expenses. The amount due June 30, 2008, of $28 million and the net present value of the remaining payments is included in the long-term asbestos settlement liability in the accompanying condensed consolidated balance sheet. For 2006, accretion expense associated with the asbestos liability will be approximately $6 million per quarter.

Because the filing of asbestos claims against the Company has been enjoined since April 2000, a significant number of additional claims may be filed against the Company if the Bankruptcy Court stay were to expire. If the PPG Settlement Arrangement is not implemented, for any reason, and the Bankruptcy Court stay expires, the Company intends to vigorously defend the pending and any future asbestos claims against it and its subsidiaries. The Company believes that it is not responsible for any injuries caused by PC products, which represent the preponderance of the pending bodily injury claims against it. Prior to 2000, PPG had never been found liable for any such claims, in numerous cases PPG had been dismissed on motions prior to trial, and aggregate settlements by PPG to date have been immaterial. In January 2000, in a trial in a state court in Texas involving six plaintiffs, the jury found PPG not liable. However, a week later in a separate trial also in a state court in Texas, another jury found PPG, for the first time, partly responsible for injuries to five plaintiffs alleged to be caused by PC products. PPG intends to appeal the adverse verdict in the event the settlement does not become effective. Although PPG has successfully defended asbestos claims brought against it in the past, in view of the number of claims, and the questionable verdicts and awards that other companies have experienced in asbestos litigation, the result of any future litigation of such claims is inherently unpredictable.

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It is PPG’s policy to accrue expenses for environmental 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. As of June 30, 2006 and December 31, 2005, PPG had reserves for environmental contingencies totaling $108 million and $94 million, respectively. Pretax charges against income for environmental remediation costs for the three and six months ended June 30, 2006 totaled $13 million and $27 million, respectively, and $3 million and $7 million, respectively, for the three and six months ended June 30, 2005, and are included in “Other (earnings) charges – net” in the accompanying condensed consolidated statement of income. Cash outlays related to such environmental remediation aggregated $3 million and $13 million, respectively, for the three and six months ended June 30, 2006 and $4 million and $7 million, respectively, for the three and six months ended June 30, 2005.

Management anticipates that the resolution of the Company’s environmental contingencies will occur over an extended period of time. Over the past 15 years the pretax charges against income have ranged between $10 million and $49 million per year. It is reasonably possible that technological, regulatory and enforcement developments, the results of environmental studies and other factors, particularly as the work at a former chromium manufacturing plant site located in Jersey City, NJ and at the Calcasieu River estuary located near our Lake Charles, LA chemicals plant continues to progress, could result in higher charges against income for environmental remediation in the remainder of 2006. 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 operation of any particular period in which costs, if any, are recognized.

In addition to the amounts currently reserved, the Company may be subject to loss contingencies related to environmental matters estimated to be as much as $200 million to $400 million, which range is unchanged from the prior year end. Such unreserved losses are reasonably possible but are not currently considered to be probable of occurrence. This range of reasonably possible unreserved loss relates to environmental matters at a number of sites; however, the vast majority relates to three operating PPG plant sites in our chemicals segment; a former chromium manufacturing plant site located in Jersey City, NJ; and the Calcasieu River estuary, located near our Lake Charles, LA chemicals plant. The loss contingencies related to these sites include significant unresolved issues such as the nature and extent of contamination, if any, at these sites and the methods that may have to be employed should remediation be required.

Initial remedial actions are occurring at the three operating plant sites in our chemicals segment. Studies to determine the nature of the contamination are reaching completion and the need for additional remedial actions, if any, is presently being evaluated.

In New Jersey, PPG continues to perform its obligations under an Administrative Consent Order (“ACO”) with the New Jersey Department of Environmental Protection (“NJDEP”) including an active, ongoing remedial investigation/feasibility study of its former chromium manufacturing location in Jersey City, which is expected to be completed in 2007. In the second half of 2006, PPG expects to submit to the NJDEP a feasibility study work plan which will address certain interim remedial measures for its former chromium manufacturing location in Jersey City that would be undertaken to evaluate available remediation technology alternatives and to remediate a portion of the site. Since 1990, PPG has remediated 47 of 61 residential and nonresidential sites under the ACO. It will take several more years to complete remediation activity on the 14 remaining ACO sites, including the former chromium plant site. In May 2005, the NJDEP filed a complaint against PPG and two other former chromium producers seeking to charge the three companies with the cleanup costs for an additional 53 sites where the source of chromium contamination is not known. This case is in its early stages.

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In Lake Charles, the U.S. Environmental Protection Agency has completed investigation of contamination levels in the Calcasieu River estuary and issued a Final Remedial Investigation Report in September 2003, which incorporates the Human Health and Ecological Risk Assessments, indicating that elevated levels of risk exist in the estuary. PPG and other potentially responsible parties are performing a feasibility study under the authority of the Louisiana Department of Environmental Quality (“LDEQ”). A report describing the process by which preliminary remedial action goals will be determined was submitted on March 1, 2005 and approved by LDEQ on August 10, 2005. These goals more fully define the nature and extent of any potentially required remedial actions. When the results of the feasibility study are known, an evaluation will be made to determine what role PPG would have with respect to future remedial actions. It is expected that submittal of a draft feasibility study to the LDEQ will occur in the second half of 2006.

As a result of these activities in New Jersey and Louisiana, it is reasonably possible that pretax charges against income for environmental remediation costs may be taken in the third or fourth quarter of 2006 that could be material to the results of operations for the period in which the charge is taken.

With respect to certain waste sites, the financial condition of any other potentially responsible parties also contributes to the uncertainty of estimating PPG’s final costs. Although contributors of waste to sites involving other potentially responsible parties may face governmental agency assertions of joint and several liability, in general, final allocations of costs are made based on the relative contributions of wastes to such sites. PPG is generally not a major contributor to such sites.

The impact of evolving programs, such as natural resource damage claims, industrial site reuse initiatives and state remediation programs, also adds to the present uncertainties with regard to the ultimate resolution of this unreserved exposure to future loss. The Company’s assessment of the potential impact of these environmental contingencies is subject to considerable uncertainty due to the complex, ongoing and evolving process of investigation and remediation, if necessary, of such environmental contingencies, and the potential for technological and regulatory developments.

In June 2003, our partner in a fiber glass joint venture in South America filed for bankruptcy. Upon resolution of the bankruptcy proceedings, the partner’s ownership interest may transfer to one of its senior secured creditors or be sold. While PPG expects operations at the joint venture to continue, the Company continues to evaluate its options with respect to this venture, which may include the sale or liquidation of the venture. Should liquidation occur, PPG’s exposure to loss would be limited to $10 million, which includes a combination of the Company’s investment and outstanding receivables related to this venture.

The Company accrues for product warranties at the time the products are sold based on historical claims experience. As of June 30, 2006 and December 31, 2005, the reserve for product warranties was $4 million. Pretax charges against income for product warranties and the related cash outlays were not material for the three and six months ended June 30, 2006 and 2005.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Performance in Second Quarter of 2006 Compared to Second Quarter of 2005

Performance Overview

Sales increased 6% for the second quarter of 2006 to $2,824 million compared to $2,656 million for the second quarter of 2005. Increases in selling prices, primarily in our coatings and chemicals business segments, increased sales by 2% and increases in volumes, primarily in our coatings and glass business segments which more than offset volume declines in our chlor-alkali products, accounted for an increase in sales of 2%. Sales of acquired businesses resulted in a 1% increase and the positive effects of foreign currency translation accounted for an additional 1% increase.

Gross profit in the second quarter 2006 increased $71 million due principally to higher sales. The gross profit percentage increased to 38.1% for the second quarter of 2006 compared to 37.9% for the second quarter of 2005. The benefits realized from higher selling prices, the favorable mix of sales volume growth and improved manufacturing efficiencies, primarily in our glass and coatings segments, increased our gross profit percentage. Inflation, primarily higher raw material costs, lowered our gross profit percentage.

Net income and earnings per share – assuming dilution for the second quarter of 2006 were $280 million and $1.68, respectively, compared to $231 million and $1.34, respectively, for the second quarter of 2005. Net income for the second quarter of 2006 included aftertax earnings of $12 million, or 7 cents a share, for litigation related insurance recoveries in excess of litigation related costs, and an aftertax charge of $4 million, or 3 cents a share, to reflect the net increase in the current value of the Company’s obligation under the asbestos settlement agreement. Net income for the second quarter of 2005 included aftertax charges of $12 million, or 7 cents a share, for debt refinancing costs and $2 million, or 1 cent a share, to reflect the net increase in the current value of the Company’s obligation under the asbestos settlement agreement.

Net income for the second quarter of 2006 compared to the second quarter of 2005 was $49 million higher. The increase in net income was due to increased selling prices, the favorable mix of sales volume growth, the lower effective tax rate, litigation related insurance recoveries in excess of litigation related costs and the absence of the negative impact of the debt refinancing costs recorded in 2005. The negative impact of inflation, primarily raw material costs; higher overhead expenses, primarily related to growth initiatives and higher advertising expense; and higher environmental expense decreased net income for the second quarter of 2006.

Performance of Business Segments

Coatings sales increased 9% to $1,579 million for the second quarter of 2006 compared to $1,450 million for the second quarter of 2005. Sales increased 4% due to improved sales volumes, especially in Europe and Asia and in architectural coatings, and 3% due to increased selling prices across all of our coatings businesses. Sales from acquisitions added 1%, and the positive impact of foreign currency translation increased sales 1%. Operating income was $272 million for the second quarter of 2006 compared to $210 million for the same quarter in 2005. Factors increasing operating income were the higher selling prices and improved volumes mentioned above, as well as lower manufacturing costs and higher other income, due primarily to the favorable impact of litigation related insurance recoveries. These increases were partially offset by the negative impact of inflation, primarily higher raw material costs, and higher overhead expenses, mostly related to growth initiatives in architectural coatings.

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Glass sales increased 5% to $611 million for the second quarter of 2006 compared to $581 million for the second quarter of 2005. The sales increase was due to improved volumes across most of our glass businesses resulting from a combination of organic growth and acquisitions. Operating income was $48 million for the second quarter of 2006 compared to $52 million for the same quarter of 2005. Operating income decreased due to the negative impact of inflation, largely higher raw material costs, lower equity earnings and litigation related costs. These reductions were substantially offset by the benefits of higher sales volumes, improved manufacturing efficiencies and lower overhead costs.

Chemicals sales increased 1% to $634 million for the second quarter of 2006 compared to $625 million for the second quarter of 2005. Sales increased 3% due to higher selling prices, primarily for chlor-alkali products, and 1% due to acquisitions. Sales decreased 3% due to lower volumes, as improved volumes in our optical business were more than offset by reduced volumes in chlor-alkali products. Operating income was $137 million for the second quarter of 2006 compared to $152 million for the same quarter in 2005. Factors decreasing operating income were inflation, higher environmental charges, increased optical advertising expense and higher manufacturing costs. These decreases were partially offset by the impact of the higher selling prices discussed above and improvements in the margin mix of sales.

Performance in the First Six Months of 2006 Compared to First Six Months of 2005

Performance Overview

Sales increased 6% for the first six months of 2006 to $5,462 million compared to $5,149 million for the first six months of 2005. Increases in selling prices, primarily in our coatings and chemicals business segments, increased sales by 3%, and increases in volumes, primarily in our coatings and glass business segments which more than offset volume declines in our chlor-alkali products, accounted for an increase in sales of 2%. Additionally a 1% increase is due to sales from acquisitions.

Gross profit in the first six months of 2006 increased $83 million due to higher sales. The gross profit percentage decreased to 37.1% for the first six months of 2006 compared to 37.7% for the first six months of 2005. Inflation, primarily higher raw material and energy costs, lowered our gross profit percentage. The benefits realized from higher selling prices, the favorable mix of sales volume growth and improved manufacturing efficiencies across all of our business segments, increased our gross profit percentage.

Net income and earnings per share – assuming dilution for the first six months of 2006 were $464 million and $2.79, respectively, compared to $326 million and $1.89, respectively, for the first six months of 2005. Net income for the first six months of 2006 included aftertax earnings of $12 million, or 7 cents a share, for litigation related insurance recoveries in excess of litigation related costs and aftertax charges of $23 million, or 14 cents a share, for business restructuring and $10 million, or 6 cents a share, to reflect the net increase in the current value of the Company’s obligation under the asbestos settlement agreement. Net income for the first six months of 2005 included aftertax charges of $91 million, or 52 cents a share, for a legal settlement; $12 million, or 7 cents a share, for debt refinancing costs; and $7 million, or 4 cents a share, to reflect the net increase in the current value of the Company’s obligation under the asbestos settlement agreement.

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Net income for the first six months of 2006 compared to the first six months of 2005 was $138 million higher. The increase in net income was due to the favorable impact of the 2006 litigation related insurance recoveries in excess of litigation related costs, increased selling prices, improved manufacturing efficiencies, the favorable mix of sales volume growth and the absence of the 2005 legal settlement and debt refinancing costs. Factors which decreased net income for the second quarter of 2006 included the negative impact of inflation, primarily raw material and energy costs; restructuring charges; higher environmental expense; and increased overhead expenses, primarily related to growth initiatives in architectural coatings and higher advertising expense in optical products.

Performance of Business Segments

Coatings sales increased 9% to $3,019 million for the first six months of 2006 compared to $2,782 million for the first six months of 2005. Sales increased 5% due to improved sales volumes, especially in Europe and Asia and in architectural coatings; 3% due to increased selling prices across all of our coatings businesses; and 1% due to acquisitions. Operating income was $439 million for the first six months of 2006 compared to $219 million for the same period in 2005. Factors increasing operating income include the absence of the $150 million legal settlement recorded in 2005 net of the related insurance recoveries in 2006, higher selling prices and improved volumes. Factors decreasing operating income were inflation, primarily higher raw material costs, and the impact of business restructuring.

Glass sales increased 4% to $1,176 million for the first six months of 2006 compared to $1,135 million for the first six months of 2005. This sales increase was due to improved volumes across most glass businesses resulting from a combination of organic growth and acquisitions. Pricing and foreign currency translation remained relatively flat. Operating income was $80 million for the first six months of 2006 compared to $93 million for the same period of 2005. Operating income decreased due to the negative impact of inflation, including higher energy costs, and weaker margin sales mix. These reductions were only partially offset by the benefits of improved manufacturing efficiencies.

Chemicals sales increased 3% to $1,267 million for the first six months of 2006 compared to $1,232 million for the first six months of 2005. Sales increased 5% due to higher selling prices, primarily for chlor-alkali products, and 1% due to acquisitions. Sales decreased 3% due to lower volumes, as improved volumes in our optical business were more than offset by reduced volumes in chlor-alkali products. Operating income was $265 million for the first six months of 2006 compared to $307 million for the same period in 2005. Factors decreasing operating income were inflation, including higher energy and ethylene costs, increased environmental charges, higher optical advertising expense and lower sales volume. These decreases were partially offset by the impact of the higher selling prices discussed above.

Other Factors

The increase in “Other (earnings) charges – net” in the accompanying condensed consolidated statement of income for the three months ended June 30, 2006 as compared to the three months ended June 30, 2005 is principally due to the impact of the litigation related insurance recoveries in excess of litigation related costs recorded in the quarter. The increase in “Other (earnings) charges – net” in the accompanying condensed consolidated statement of income for the six months ended June 30, 2006 as compared to the six months ended June 30, 2005 is principally related to the net impact of the absence of the $150 million legal settlement recorded in 2005 and the litigation related insurance recoveries in excess of litigation related costs recorded in 2006.

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The tax rate on earnings for the three months ended June 30, 2006 was 26.4%, which includes a one-time benefit relating to the settlement with the Internal Revenue Service (“IRS”) of our tax returns for the years 2001-2003. This favorable benefit equates to about 13 cents a share. Our effective tax rate includes a tax cost of 39% on the litigation related insurance recoveries in excess of litigation related costs and a tax benefit of 39% on the adjustment to increase the current value of the Company’s obligation under the asbestos settlement agreement. Income tax expense of 31.5% was recognized on the remaining pretax earnings. The tax rate on earnings for the second quarter of 2005 was 31%.

The tax rate on earnings for the six months June 30, 2006 was 25.6%, which includes the benefit of a tax refund from Canada resulting from the favorable resolution in the first quarter of 2006 of a tax dispute dating back to 1997 and a tax benefit related to the settlement with the IRS of our tax returns for the years 2001-2003. Our effective tax rate includes tax benefits of 36% on the charge for business restructuring, a tax cost of 39% on the litigation related insurance recoveries in excess of litigation related costs and a tax benefit of 39% on the adjustment to increase the current value of the Company’s obligation under the asbestos settlement agreement. Income tax expense of 31.5% was recognized on the remaining pretax earnings. The tax rate on earnings for the first six months of 2005 was 28.8% comprised of tax benefits of 39% on the $150 million charge for a legal settlement, debt refinancing costs and the adjustment to increase the current value of the Company’s obligation under the asbestos settlement agreement. Income tax expense of 31.5% was recognized on the remaining pretax earnings in 2005.

Liquidity and Capital Resources

Cash from operating activities for the six months ended June 30, 2006 was $333 million compared with $270 million for the comparable period of 2005. Cash from operations and the Company’s debt capacity have been and are expected to continue to be sufficient to meet our operating requirements, to fund our capital spending including acquisitions, share repurchases and contributions to pension plans, to pay dividends to our shareholders and to pay amounts due under the asbestos settlement.

The funding requirements for our U.S. defined benefit pension plans are expected to change as a result of pending legislation currently being considered by the U.S. Congress. Despite the current uncertainty concerning these funding requirements, we do not expect to have a mandatory contribution to the U.S. defined benefit plans in 2006 or 2007. However, we are likely to make voluntary contributions between $100 million and $200 million to our U.S. defined benefit plans in the second half of 2006. We expect to make mandatory contributions to our non-U.S. plans in 2006 of approximately $20 million, of which approximately $10 million was contributed as of June 30, 2006.

New Accounting Standards

Note 2, “Newly Adopted Accounting Standards,” to the accompanying condensed consolidated financial statements describes the Company’s adoption of the revision to SFAS No. 123, “Share-Based Payment” and adoption of SFAS No. 151, “Inventory Costs, an Amendment of ARB No. 43, Chapter 4.” Note 3, “Other New Accounting Standards,” to the accompanying condensed consolidated financial statements describes the Company’s expected impact of adopting FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109.”

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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 16, “Commitments and Contingent Liabilities,” to the accompanying condensed consolidated financial statements for a description of certain of these lawsuits, including a description of the proposed PPG Settlement Arrangement for asbestos claims announced on May 14, 2002. As discussed in Item 1 and Note 16, 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 in the event the PPG Settlement Arrangement described in Note 16 does not become effective, 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 the costs, if any, are recognized.

The Company has been named as a defendant, along with various other co-defendants, in a number of antitrust lawsuits filed in federal and state courts. These suits allege that PPG acted with competitors to fix prices and allocate markets in the flat glass and automotive refinish industries. The plaintiffs in these cases are seeking economic and, in certain cases, treble damages and injunctive relief.

Twenty-nine glass antitrust cases were filed in federal courts, all of which were consolidated as a class action in the U.S. District Court for the Western District of Pennsylvania located in Pittsburgh, Pa. All of the other defendants in the glass class action antitrust case previously settled with the plaintiffs and were dismissed from the case. On May 29, 2003, the Court granted PPG’s motion for summary judgment dismissing the claims against PPG in the glass class action antitrust case. The plaintiffs in that case appealed that order to the U.S. Third Circuit Court of Appeals. On September 30, 2004, the U.S. Third Circuit Court of Appeals affirmed in part and reversed in part the dismissal of PPG and remanded the case for further proceedings. PPG petitioned the U.S. Supreme Court for permission to appeal the decision of the U.S. Third Circuit Court of Appeals, however, the U.S. Supreme Court rejected PPG’s petition for review.

On October 19, 2005, PPG entered into a settlement agreement to settle the federal glass class action antitrust case in order to avoid the ongoing expense of this protracted case, as well as the risks and uncertainties associated with complex litigation involving jury trials. Pursuant to the settlement agreement, PPG agreed to pay $60 million, which was deposited in escrow, and agreed to bear up to $500,000 in settlement administration costs. The U.S. District Court entered an order on February 7, 2006, approving the settlement, and the funds were released from escrow. This order is no longer appealable. As a result of the settlement, PPG also paid $900,000 pursuant to a preexisting contractual obligation to a plaintiff that did not participate in the federal glass class action antitrust case. Finally, independent state court cases remain pending in California and Tennessee involving claims that are not included in the settlement of the federal glass class action antitrust case. Notwithstanding that PPG settled the federal glass class action antitrust case, PPG’s management continues to believe that there was no wrongdoing on the part of the Company and also believes that PPG has meritorious defenses to the independent state court cases. PPG is currently engaged in discussions concerning potential settlement of the California and Tennessee cases.

Approximately 60 cases alleging antitrust violations in the automotive refinish industry have been filed in various state and federal jurisdictions. The plaintiffs in these cases have not yet specified an amount of alleged damages. The approximately 55 federal cases have been consolidated as a class action in the U.S. District Court for the Eastern District of Pennsylvania

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located in Philadelphia, Pa. Certain of the defendants in the federal automotive refinish case have settled. This case is still at an early stage and discovery is continuing with the remaining defendants. The automotive refinish cases in state courts have either been stayed pending resolution of the federal proceedings or have been dismissed. Neither PPG’s investigation conducted through its counsel of the allegations in these cases nor the discovery conducted to date has identified a basis for the plaintiffs’ allegations that PPG participated in a price-fixing conspiracy in the U.S. automotive refinish industry. PPG’s management continues to believe that there was no wrongdoing on the part of the Company and also believes it has meritorious defenses in these automotive refinish antitrust cases. As discovery in the federal class action antitrust case is ongoing, we will continue to evaluate any additional information that becomes available in developing our conclusion on the outcome of this contingent liability. While currently not expected, if future developments in the case are adverse to the company, we could consider a settlement of the automotive refinish antitrust case. We have no present intention of settling any of the automotive refinish antitrust cases.

Beginning in April 1994, the Company was a defendant in a suit filed by Marvin Windows and Doors (“Marvin”) alleging numerous claims, including breach of warranty. All of the plaintiff’s claims, other than breach of warranty, were dismissed. However, on February 14, 2002, a federal jury awarded Marvin $136 million on the remaining claim. Subsequently, the court added $20 million for interest bringing the total judgment to $156 million. PPG appealed that judgment and the appeals court heard the parties’ arguments on June 9, 2003. On March 23, 2005, the appeals court ruled against PPG. Subsequent to the ruling by the court, PPG and Marvin agreed to settle this matter for $150 million and PPG recorded a charge for that amount in the first quarter of 2005, which is included in “Other (earnings) charges - net” in the accompanying condensed consolidated statement of income. PPG paid the settlement on April 28, 2005. PPG subsequently received $51 million in insurance recoveries related to this settlement; of which $28 million and $33 million is included in “Other (earnings) charges - net” for the three and six months ended June 30, 2006, respectively, and the remainder was received in the third quarter of 2005.

It is PPG’s policy to accrue expenses for environmental 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. As of June 30, 2006 and December 31, 2005, PPG had reserves for environmental contingencies totaling $108 million and $94 million, respectively. Pretax charges against income for environmental remediation costs for the three and six months ended June 30, 2006 totaled $13 million and $27 million, respectively, and $3 million and $7 million, respectively, for the three and six months ended June 30, 2005, and are included in “Other (earnings) charges - net” in the accompanying condensed consolidated statement of income. Cash outlays related to such environmental remediation aggregated $3 million and $13 million, respectively, for the three and six months ended June 30, 2006 and $4 million and $7 million, respectively, for the three and six months ended June 30, 2005.

In addition to the amounts currently reserved, the Company may be subject to loss contingencies related to environmental matters estimated to be as much as $200 million to $400 million, which range is unchanged from the prior year end. Such unreserved losses are reasonably possible but are not currently considered to be probable of occurrence. Management anticipates that the resolution of the Company’s environmental contingencies will occur over an extended period of time. Over the past 15 years the pretax charges against income have ranged between $10 million and $49 million per year. It is reasonably possible that technological, regulatory and enforcement developments, the results of environmental studies and other factors, particularly as the work at a former chromium manufacturing plant site located in Jersey City, NJ and at the Calcasieu River estuary located near our Lake Charles, LA chemicals plant continues to progress, could

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result in higher charges against income for environmental remediation in the remainder of 2006. As a result of these activities in New Jersey and Louisiana, it is reasonably possible that pretax charges against income for environmental remediation costs may be taken in the third or fourth quarter of 2006 that could be material to the results of operations for the period in which the charge is taken. See Note 16, for an expanded description of certain of these environmental contingencies. 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.

Currency

During the first six months of 2006, the U.S. dollar weakened against certain of the currencies in the countries in which PPG operates, most notably against the euro, the British pound sterling and the Canadian dollar. The effects of translating the net assets of our operations denominated in non-U.S. currencies to the U.S. dollar increased consolidated net assets by $117 million from December 31, 2005 to June 30, 2006.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. Management’s Discussion and Analysis and other sections of this Form 10-Q contain forward-looking statements that reflect the Company’s current views with respect to future events and financial performance.

Forward-looking statements are identified by the use of the words “aim,” “believe,” “expect,” “anticipate,” “intend,” “estimate” 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 Securities and Exchange Commission. 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 increasing price and product competition by foreign and domestic competitors, fluctuations in the cost and availability of raw materials, the ability to maintain favorable supplier relationships and arrangements, economic and political conditions in international markets, foreign exchange rates and fluctuations in those rates, and the unpredictability of existing and possible future litigation, including litigation that could result if PPG’s Settlement Arrangement for asbestos claims does not become effective. However, it is not possible to predict or identify all such factors. Consequently, while the list of factors presented here and in the Company’s Form 10-K for the year ended December 31, 2005 under the caption “Item 1a. Risk Factors” are considered representative, these lists should not 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 as compared to those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties 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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Item 3. Quantitative and Qualitative Disclosures About Market Risk

PPG had non-U.S. dollar denominated debt of $508 million as of June 30, 2006 and $433 million as of December 31, 2005. The increase in these borrowings was principally due to the assumption of debt related to several businesses acquired during the second quarter of 2006 and the unfavorable effects of currency translation. A hypothetical weakening of the U.S. dollar by 10% against European currencies and by 20% against Asian and South American currencies would have resulted in unrealized translation losses of approximately $73 million as of June 30, 2006. Other than the item described above, there are no other material changes in the Company’s exposure to market risk from December 31, 2005.

Item 4. Controls and Procedures

a. Evaluation of disclosure controls and procedures. Based on their evaluation as of the end of the period covered by this
Form 10-Q, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

b. Changes in internal control. There were no significant changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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. These lawsuits and claims, the most significant of which are described below, relate to product liability, contract, patent, environmental, antitrust and other matters arising out of the conduct of PPG’s business. To the extent that these lawsuits and claims involve personal injury and property damage, PPG believes it has adequate insurance; however, certain of PPG’s insurers are contesting coverage with respect to some of these claims, and other insurers, as they had prior to the asbestos settlement described below, may contest coverage with respect to some of the asbestos claims if the settlement is not implemented. PPG’s lawsuits and claims against others include claims against insurers and other third parties with respect to actual and contingent losses related to environmental, asbestos and other matters.

The result of any future litigation of such lawsuits and claims is inherently unpredictable. However, management believes that, in the aggregate, the outcome of all lawsuits and claims involving PPG, including asbestos-related claims in the event the settlement described below does not become effective, 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.

The Company has been named as a defendant, along with various other co-defendants, in a number of antitrust lawsuits filed in federal and state courts. These suits allege that PPG acted with competitors to fix prices and allocate markets in the flat glass and automotive refinish industries. The plaintiffs in these cases are seeking economic and, in certain cases, treble damages and injunctive relief.

Twenty-nine glass antitrust cases were filed in federal courts, all of which were consolidated in the U.S. District Court for the Western District of Pennsylvania located in Pittsburgh, Pa. All of the other defendants in the glass class action antitrust case previously settled with the plaintiffs and were dismissed from the case. On May 29, 2003, the Court granted PPG’s motion for summary judgment dismissing the claims against PPG in the glass class action antitrust case. The plaintiffs in that case appealed that order to the U.S. Third Circuit Court of Appeals. On September 30, 2004, the U.S. Third Circuit Court of Appeals affirmed in part and reversed in part the dismissal of PPG and remanded the case for further proceedings. PPG petitioned the U.S. Supreme Court for permission to appeal the decision of the U.S. Third Circuit Court of Appeals, however, the U.S. Supreme Court rejected PPG’s petition for review.

On October 19, 2005, PPG entered into a settlement agreement to settle the federal glass class action antitrust case in order to avoid the ongoing expense of this protracted case, as well as the risks and uncertainties associated with complex litigation involving jury trials. Pursuant to the settlement agreement, PPG agreed to pay $60 million, which was deposited in escrow, and agreed to bear up to $500,000 in settlement administration costs. The U.S. District Court entered an order on February 7, 2006, approving the settlement, and the funds were released from escrow. This order is no longer appealable. As a result of the settlement, PPG also paid $900,000 pursuant to a preexisting contractual obligation to a plaintiff that did not participate in the federal glass class action antitrust case. Finally, independent state court cases remain pending in California and Tennessee involving claims that are not included in the settlement of the federal glass class action antitrust case. Notwithstanding that PPG settled the federal glass class action antitrust case, PPG’s management continues to believe that there was no wrongdoing on the part of the Company and also believes that PPG has meritorious defenses to the independent state court cases. PPG is currently engaged in discussions concerning potential settlement of the California and Tennessee cases.

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Approximately 60 cases alleging antitrust violations in the automotive refinish industry have been filed in various state and federal jurisdictions. The plaintiffs in these cases have not yet specified an amount of alleged damages. The approximately 55 federal cases have been consolidated as a class action in the U.S. District Court for the Eastern District of Pennsylvania located in Philadelphia, Pa. Certain of the defendants in the federal automotive refinish case have settled. This case is still at an early stage and discovery is continuing with the remaining defendants. The automotive refinish cases in state courts have either been stayed pending resolution of the federal proceedings or have been dismissed. Neither PPG’s investigation conducted through its counsel of the allegations in these cases nor the discovery conducted to date has identified a basis for the plaintiffs’ allegations that PPG participated in a price-fixing conspiracy in the U.S. automotive refinish industry. PPG’s management continues to believe that there was no wrongdoing on the part of the Company and also believes it has meritorious defenses in these automotive refinish antitrust cases. As discovery in the federal class action antitrust case is ongoing, we will continue to evaluate any additional information that becomes available in developing our conclusion on the outcome of this contingent liability. While currently not expected, if future developments in the case are adverse to the Company, we could consider a settlement of the automotive refinish antitrust case. We have no present intention of settling any of the automotive refinish antitrust cases.

For over thirty years, PPG has been a defendant in lawsuits involving claims alleging personal injury from exposure to asbestos. For a description of asbestos litigation affecting the Company and the terms and status of the proposed PPG Settlement Arrangement announced May 14, 2002, see Note 16, “Commitments and Contingent Liabilities.”

Over the past several years, the Company and others have been named as defendants in several cases in various jurisdictions claiming damages related to exposure to lead and remediation of lead-based coatings applications. PPG has been dismissed as a defendant from most of these lawsuits and has never been found liable in any of these cases.

A Notice of Violation (“NOV”) and notice of intent to issue a further NOV have been received from the State of North Carolina Department of Environment and Natural Resources by PPG’s Shelby, North Carolina fiber glass plant. The NOVs relate to non-compliant stack air emissions tests in 2005 conducted under the requirements of the Clean Air Act Title V Regulations. In PPG’s experience, matters such as these often can be resolved with penalty amounts below $100,000. However, PPG cannot predict the amount, if any, of any civil penalty that may be assessed for either of these matters.

Item 1a. Risk Factors

There were no material changes in the Company’s risk factors from the risks disclosed in the Company’s Form 10-K for the year ended December 31, 2005.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Directors who are not also Officers of the Company receive Common Stock Equivalents pursuant to the PPG Industries, Inc. Deferred Compensation Plan for Directors (“PPG Deferred Compensation Plan for Directors”). Retired Directors receive dividend equivalents in the form of Common Stock Equivalents pursuant to the PPG Industries, Inc. Directors’ Common Stock Plan (“PPG Directors’ Common Stock Plan”). Common Stock Equivalents are hypothetical shares of Common Stock having a value on any given date equal to the value of a share of

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Common Stock. Common Stock Equivalents earn dividend equivalents that are converted into additional Common Stock Equivalents but carry no voting rights or other rights afforded to a holder of Common Stock. The Common Stock Equivalents credited to Directors under both plans are exempt from registration under Section 4(2) of the Securities Act of 1933 as private offerings made only to Directors of the Company in accordance with the provisions of the plans.

Under the PPG Deferred Compensation Plan for Directors, each Director may elect to defer the receipt of all or any portion of the compensation paid to such Director for serving as a PPG Director. All deferred payments are held in the form of Common Stock Equivalents. Payments out of the deferred accounts are made in the form of Common Stock of the Company (and cash as to any fractional Common Stock Equivalent). In the second quarter of 2006, the Directors, as a group, were credited with 741 Common Stock Equivalents under this plan. The value of each Common Stock Equivalent, when credited, was $63.42.

The PPG Directors’ Common Stock Plan is now only applicable to two retired Directors. For one retired Director, the Common Stock Equivalents are converted to cash at the fair market value of the common stock and paid in cash. For the other retired Director, the Common Stock Equivalents are converted into and paid in Common Stock of the Company (and cash as to any fractional Common Stock Equivalent). In the second quarter of 2006, those two retired Directors received dividend equivalents in the form of 4 Common Stock Equivalents under this plan. The value of each Common Stock Equivalent, when credited, was $63.42.

The following table summarizes the Company’s stock repurchase activity for the three months in the period ended June 30, 2006:

Issuer Purchases of Equity Securities

Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Maximum Number of Shares that May Yet Be Purchased Under the Programs
April 2006
Repurchase program	—			—	10,004,615
Other transactions(1)	39,191	$	66.50	—	—
May 2006
Repurchase program	405,515		64.93	405,515	9,599,100
Other transactions(1)	174,593		68.08	—	—
June 2006
Repurchase program	340,500		63.87	340,500	9,258,600
Other transactions(1)	10,642		65.02	—	—
Total quarter ended June 30, 2006
Repurchase program	746,015	$	64.46	746,015	9,258,600
Other transactions(1)	224,426	$	67.66	—	—

⁽¹⁾ Includes shares withheld or certified to in satisfaction of the exercise price and/or tax withholding obligation by holders of employee stock options who exercised options granted under the PPG Industries, Inc. Stock Plan.

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Item 4. Submission of Matters to a Vote of Security Holders

The information set forth under “Item 4. Submission of Matters to a Vote of Security Holders” of the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2006, is incorporated herein by reference in its entirety.

Item 6. Exhibits

The following exhibits are filed as a part of, or incorporated by reference into, this Form 10-Q.

3	PPG Industries, Inc. Restated Articles of Incorporation, as amended, were filed as Exhibit 3 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 1995.
3.1	Statement with Respect to Shares, amending the Restated Articles of Incorporation effective April 21, 1998, was filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 1998.
3.2	PPG Industries, Inc. Bylaws, as amended and restated effective July 20, 2006, were filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 21, 2006.
4	Rights Agreement, dated as of February 19, 1998, was filed as Exhibit 4 to the Registrant’s Current Report on Form 8-K dated February 19, 1998.
4.1	Indenture, dated as of August 1, 1982, was filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.2	First Supplemental Indenture, dated as of April 1, 1986, was filed as Exhibit 4.2 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.3	Second Supplemental Indenture, dated as of October 1, 1989, was filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.4	Third Supplemental Indenture, dated as of November 1, 1995, was filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.5	Indenture, dated as of June 24, 2005, was filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 20, 2005.
*10	PPG Industries, Inc. Nonqualified Retirement Plan dated as of January 1, 1989, as amended February 21, 2002, was filed as Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2001.
*10.1	PPG Industries, Inc. Supplemental Executive Retirement Plan II, as amended, was filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 1995.

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*10.2	Form of Change in Control Employment Agreement was filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 1995.
*10.3	PPG Industries, Inc. Directors’ Common Stock Plan, as amended February 20, 2002, was filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2003.
*10.4	PPG Industries, Inc. Deferred Compensation Plan for Directors, as amended and restated as of April 20, 2006, was filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2006.
*10.5	PPG Industries, Inc. Deferred Compensation Plan, as amended February 15, 2006, was filed as Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2005.
*10.6	PPG Industries, Inc. Executive Officers’ Long Term Incentive Plan was filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated February 16, 2005.
*10.7	PPG Industries, Inc. Long Term Incentive Plan for Key Employees was filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated February 16, 2005.
*10.8	Form of TSR Share Award Agreement was filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated February 16, 2005.
*10.9	Form of Restricted Stock Unit Award Agreement was filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated February 15, 2005.
*10.10	PPG Industries, Inc. Executive Officers’ Annual Incentive Compensation Plan, as amended effective February 18, 2004, was filed as Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2003.
*10.11	PPG Industries, Inc. Incentive Compensation and Deferred Income Plan for Key Employees, as amended February 15, 2006 was filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2005.
*10.12	PPG Industries, Inc. Management Award and Deferred Income Plan was filed as Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2002.
*10.13	PPG Industries, Inc. Stock Plan, dated as of April 17, 1997, as amended July 20, 2005, was filed as Exhibit 10.13 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2005.
*10.14	Form of Non-Qualified Option Agreement was filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated February 15, 2005.
*10.15	Form of Non-Qualified Option Agreement for Directors was filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K dated February 15, 2005.

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*10.16	Summary of Non-Employee Director Compensation and Benefits was filed as Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2005.
*10.17	PPG Industries, Inc. Challenge 2000 Stock Plan was filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2003.
*10.18	PPG Industries, Inc. Omnibus Incentive Plan was filed as Exhibit 10.18 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2006.
†12	Computation of Ratio of Earnings to Fixed Charges for the Six Months Ended June 30, 2006 and for the Five Years Ended December 31, 2005.
†31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
†31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
†32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
†32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

† Filed herewith.

* Management contracts, compensatory plans or arrangements required to be filed as an exhibit hereto pursuant to Item 601 of Regulation S-K.

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SIGNATURE

Pursuant to the requirements 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.

			PPG INDUSTRIES, INC. (Registrant)
Date:	August 1, 2006	By	/s/ W. H. Hernandez
			W. H. Hernandez Senior Vice President, Finance (Principal Financial and Accounting Officer and Duly Authorized Officer)

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PPG Industries Inc. and Consolidated Subsidiaries

Index to Exhibits

Exhibits

3	PPG Industries, Inc. Restated Articles of Incorporation, as amended, were filed as Exhibit 3 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 1995.
3.1	Statement with Respect to Shares, amending the Restated Articles of Incorporation effective April 21, 1998, was filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 1998.
3.2	PPG Industries, Inc. Bylaws, as amended and restated effective July 20, 2006, were filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on July 21, 2006.
4	Rights Agreement, dated as of February 19, 1998, was filed as Exhibit 4 to the Registrant’s Current Report on Form 8-K dated February 19, 1998.
4.1	Indenture, dated as of August 1, 1982, was filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.2	First Supplemental Indenture, dated as of April 1, 1986, was filed as Exhibit 4.2 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.3	Second Supplemental Indenture, dated as of October 1, 1989, was filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.4	Third Supplemental Indenture, dated as of November 1, 1995, was filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (No. 333-44397) dated January 16, 1998.
4.5	Indenture, dated as of June 24, 2005, was filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 20, 2005.
*10	PPG Industries, Inc. Nonqualified Retirement Plan dated as of January 1, 1989, as amended February 21, 2002, was filed as Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2001.
*10.1	PPG Industries, Inc. Supplemental Executive Retirement Plan II, as amended, was filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 1995.
*10.2	Form of Change in Control Employment Agreement was filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 1995.

*10.3	PPG Industries, Inc. Directors’ Common Stock Plan, as amended February 20, 2002, was filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2003.
*10.4	PPG Industries, Inc. Deferred Compensation Plan for Directors, as amended and restated as of April 20, 2006, was filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2006.
*10.5	PPG Industries, Inc. Deferred Compensation Plan, as amended February 15, 2006, was filed as Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2005.
*10.6	PPG Industries, Inc. Executive Officers’ Long Term Incentive Plan was filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated February 16, 2005.
*10.7	PPG Industries, Inc. Long Term Incentive Plan for Key Employees was filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated February 16, 2005.
*10.8	Form of TSR Share Award Agreement was filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated February 16, 2005.
*10.9	Form of Restricted Stock Unit Award Agreement was filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated February 15, 2005.
*10.10	PPG Industries, Inc. Executive Officers’ Annual Incentive Compensation Plan, as amended effective February 18, 2004, was filed as Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2003.
*10.11	PPG Industries, Inc. Incentive Compensation and Deferred Income Plan for Key Employees, as amended February 15, 2006 was filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2005.
*10.12	PPG Industries, Inc. Management Award and Deferred Income Plan was filed as Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2002.
*10.13	PPG Industries, Inc. Stock Plan, dated as of April 17, 1997, as amended July 20, 2005, was filed as Exhibit 10.13 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2005.
*10.14	Form of Non-Qualified Option Agreement was filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K dated February 15, 2005.
*10.15	Form of Non-Qualified Option Agreement for Directors was filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K dated February 15, 2005.
*10.16	Summary of Non-Employee Director Compensation and Benefits was filed as Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2005.

*10.17	PPG Industries, Inc. Challenge 2000 Stock Plan was filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2003.
*10.18	PPG Industries, Inc. Omnibus Incentive Plan was filed as Exhibit 10.18 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2006.
†12	Computation of Ratio of Earnings to Fixed Charges for the Six Months Ended June 30, 2006 and for the Five Years Ended December 31, 2005.
†31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
†31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
†32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
†32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

† Filed herewith.

* Management contracts, compensatory plans or arrangements required to be filed as an exhibit hereto pursuant to Item 601 of Regulation S-K.