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Reportable Segment Information (Tables)
6 Months Ended
Jun. 30, 2012
Reconciliation of Revenue and Operating Income from Segments to Consolidated

Reportable segment net sales and segment income for the three and six months ended June 30, 2012 and 2011 were as follows:

 

     Three Months Ended
June 30
    Six Months Ended
June 30
 
     2012     2011     2012     2011  
     (Millions)  

Net sales:

        

Performance Coatings

   $ 1,241      $ 1,230      $ 2,391      $ 2,282   

Industrial Coatings

     1,099        1,075        2,175        2,100   

Architectural Coatings - EMEA

     601        611        1,118        1,082   

Optical and Specialty Materials

     314        326        648        634   

Commodity Chemicals

     427        470        846        889   

Glass

     273        274        529        532   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total (a)

   $ 3,955      $ 3,986      $ 7,707      $ 7,519   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment income:

        

Performance Coatings

   $ 204      $ 204      $ 364      $ 343   

Industrial Coatings

     143        115        293        231   

Architectural Coatings - EMEA

     64        50        80        62   

Optical and Specialty Materials

     95        90        204        180   

Commodity Chemicals

     106        106        206        203   

Glass

     23        29        31        55   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     635        594        1,178        1,074   

Legacy items (b)

     (15     (11     (190     (37

Business restructuring (c)

     —          —          (208     —     

Acquisition-related (costs) gain, net (d)

     —          9        (6     9   

Costs related to the separation and merger transaction (e)

     (4     —          (4     —     

Interest expense, net of interest income

     (41     (44     (82     (87

Other unallocated corporate expense – net

     (48     (48     (110     (108
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

   $ 527      $ 500      $ 578      $ 851   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) Intersegment net sales for the three and six months ended June 30, 2012 and 2011 were not material.
(b) Legacy items include current costs related to former operations of the Company, including pension and other postretirement benefit costs, certain charges for legal matters and environmental remediation costs, and certain charges which are considered to be unusual or non-recurring including the earnings impact of the proposed asbestos settlement. Legacy items also include equity earnings from PPG’s approximate 40 percent investment in the former automotive glass and services business. The expense for the six months ended June 30, 2012 includes a pretax charge of $159 million. The charge relates to continued environmental remediation activities at legacy chemicals sites, primarily at PPG’s former Jersey City, N.J. chromium manufacturing plant and associated sites.
(c) The charge for business restructuring costs in the six months ended June 30, 2012, includes charges of $65 million related to the Performance Coatings segment, $46 million related to the Industrial Coatings segment, $63 million related to the Architectural Coatings - EMEA segment, $32 million related to the Optical and Specialty Materials segment $1 million related to the Commodity Chemicals segment and $1 million related to Corporate. These costs are considered to be unusual and non-recurring and do not reduce the segment earnings used to evaluate the performance of the operating segments.
(d) For the six months ended June 30, 2012, the expense represents the flow-through cost of sales of the step up to fair value of inventory acquired from Dyrup and Colpisa. These costs are considered to be unusual and non-recurring and do not reduce the segment earnings used to evaluate the performance of the operating segments. For the three and six months ended June 30, 2011, represents a net benefit stemming primarily from a bargain purchase gain reflecting the excess of the fair value of the net assets acquired over the price paid for the business, net of the flow-through cost of sales of the step up to fair value of acquired inventory.
(e) Represents costs incurred in connection with the announced separation and merger of the commodity chemicals business.