<PAGE>
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 March 31, 1996 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 (I.R.S. Employer
incorporation or organization) Identification No.)
One PPG Place, Pittsburgh, Pennsylvania 15272
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 434-3131
As of April 30, 1996, 189,061,639 shares of the Registrant's common stock, par
value $1.66-2/3 per share, were outstanding.
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
<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
=====================================
Index
Part I. Financial Information Page(s)
Item 1. Financial Statements:
Condensed Statement of Income.................................... 2
Condensed Balance Sheet.......................................... 3
Condensed Statement of Cash Flows................................ 4
Notes to Condensed Financial Statements.......................... 5-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 8-11
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders....... 12
Item 6. Exhibits and Reports on Form 8-K.......................... 13
Signature............................................................ 14
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<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Condensed Statement of Income (Unaudited)
(Millions, except per share amounts)
<CAPTION>
Three Months Ended March 31
1996 1995
<S> <C> <C>
Net sales.................................... $1,748.8 $1,740.8
Cost of sales................................ 1,067.2 1,028.1
Gross profit............................... 681.6 712.7
Other expenses:
Selling, general and administrative........ 238.9 231.5
Depreciation............................... 83.2 80.0
Research and development................... 58.6 56.9
Interest................................... 22.0 20.5
Other charges.............................. 16.8 38.0
Total other expenses..................... 419.5 426.9
Other earnings............................... 25.6 73.1
Income before income taxes
and minority interest...................... 287.7 358.9
Income taxes................................. 109.3 136.4
Minority interest............................ 6.1 3.3
Net income................................... $ 172.3 $ 219.2
Earnings per share........................... $ 0.90 $ 1.06
Dividends per share.......................... $ 0.30 $ 0.29
Average shares outstanding................... 192.4 206.5
</TABLE>
The accompanying notes to the condensed financial statements are an integral
part of this statement.
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Condensed Balance Sheet (Unaudited)
<CAPTION>
March 31 Dec. 31
1996 1995
(Millions)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents.................. $ 89.0 $ 105.6
Receivables-net............................ 1,339.2 1,245.1
Inventories (Note 2)....................... 779.8 737.5
Other...................................... 193.7 187.3
Total current assets..................... 2,401.7 2,275.5
Property (less accumulated depreciation of
$3,683.1 million and $3,629.2 million)..... 2,850.0 2,834.8
Investments.................................. 219.1 223.8
Other assets................................. 876.1 860.2
Total.................................... $6,346.9 $6,194.3
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings and current
portion of long-term debt................ $ 689.4 $ 485.3
Accounts payable and accrued liabilities... 1,066.8 1,103.5
Income taxes............................... 97.2 40.6
Total current liabilities................ 1,853.4 1,629.4
Long-term debt............................... 712.4 735.5
Deferred income taxes........................ 346.0 354.9
Accumulated provisions....................... 342.9 319.7
Other postretirement benefits ............... 518.9 517.4
Minority interest............................ 73.5 68.2
Total liabilities........................ 3,847.1 3,625.1
Shareholders' equity:
Common stock............................... 484.3 484.3
Additional paid-in capital................. 88.7 81.3
Retained earnings.......................... 4,364.2 4,249.0
Treasury stock............................. (2,250.2) (2,059.6)
Unearned compensation...................... (172.5) (179.2)
Minimum pension liability adjustment....... (9.8) (10.4)
Currency translation adjustment............ (4.9) 3.8
Total shareholders' equity............... 2,499.8 2,569.2
Total.................................... $6,346.9 $6,194.3
</TABLE>
The accompanying notes to the condensed financial statements are an integral
part of this statement.
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Condensed Statement of Cash Flows (Unaudited)
<CAPTION>
Three Months Ended March 31
1996 1995
(Millions)
<S> <C> <C>
Cash from operating activities .............. $ 139.7 $ 181.4
Investing activities:
Capital spending.......................... (116.6) (75.0)
Reduction of investments.................. 10.4 98.7
Other..................................... .3 6.0
Cash (used for) from
investing activities............... (105.9) 29.7
Financing activities:
Net change in borrowings with
maturities of three months or less...... 283.2 (78.9)
Proceeds from other short-term debt....... 17.1 10.9
Repayment of other short-term debt........ (14.1) (35.0)
Proceeds from long-term debt.............. 2.7 6.8
Repayment of long-term debt............... (95.2) (25.8)
Repayment of loans by employee stock
ownership plan.......................... 5.6 10.1
Purchase of treasury stock, net........... (191.4) (29.8)
Dividends paid............................ (57.8) (59.8)
Cash used for financing activities... (49.9) (201.5)
Effect of currency exchange rate changes
on cash and cash equivalents............... (.5) 1.5
Net (decrease) increase in
cash and cash equivalents.................. (16.6) 11.1
Cash and cash equivalents,
beginning of period..... ................... 105.6 62.1
Cash and cash equivalents,
end of period.............................. $ 89.0 $ 73.2
</TABLE>
The accompanying notes to the condensed financial statements are an integral
part of this statement.
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (Unaudited)
1. Financial Statements
The condensed 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) at March 31, 1996, and the results of
their operations and their cash flows for the three months ended March
31, 1996 and 1995. These condensed financial statements should be read
in conjunction with the financial statements and notes thereto
incorporated by reference in PPG's Annual Report on Form 10-K for the
year ended December 31, 1995.
The results of operations for the three months ended March 31, 1996 are
not necessarily indicative of the results to be expected for the full
year.
2. Inventories
Inventories at March 31, 1996 and December 31, 1995 are detailed below.
<TABLE>
<CAPTION>
March 31 Dec. 31
1996 1995
(Millions)
<S> <C> <C>
Finished products and work in process............. $530.6 $504.5
Raw materials..................................... 134.7 120.5
Supplies.......................................... 114.5 112.5
Total.......................................... $779.8 $737.5
</TABLE>
Most domestic and certain foreign inventories are valued using the
last-in, first-out method. If the first-in, first-out method had been used,
inventories would have been $202.1 million and $202.9 million higher at
March 31, 1996 and December 31, 1995 respectively.
3. Cash Flow Information
Cash payments for interest were $20.6 million and $15.3 million for
the three months ended March 31, 1996 and 1995, respectively. Net cash
payments for income taxes for the three months ended March 31, 1996 and
1995 were $43.8 million and $22.5 million, respectively.
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<PAGE>
4. Business Segment Information
<TABLE>
<CAPTION>
Three Months Ended March 31
1996 1995
(Millions)
<S> <C> <C>
Net sales:
Coatings and Resins................. $ 692 $ 684
Glass............................... 666 661
Chemicals........................... 391 396
Total.......................... $1,749 $1,741
Operating income:
Coatings and Resins................. $ 115 $ 129
Glass............................... 103 155
Chemicals........................... 91 93
Total operating income......... 309 377
Interest expense - net................... (20) (18)
Other unallocated
corporate expense - net.............. (1) --
Income before income taxes and
minority interest...................... $ 288 $ 359
</TABLE>
5. Environmental Matters
It is PPG's policy to accrue expenses for environmental contingencies
when it is probable that a liability exists and the amount of loss can
be reasonably estimated. As of March 31, 1996 and December 31, 1995,
PPG had reserves for environmental contingencies totaling $98 million
and $100 million, respectively. Charges against income for
environmental remediation costs for the three months ended March 31,
1996 and 1995 were $7 million and $9 million, respectively. Related
cash outlays aggregated $9 million and $10 million for the three months
ended March 31, 1996 and 1995, respectively.
Management anticipates that the resolution of the Company's
environmental contingencies, which will occur over an extended period of
time, will not result in future annual charges against income that are
significantly greater than those recorded in 1995. It is possible,
however, that technological, regulatory and enforcement developments,
the results of environmental studies and other factors could alter this
expectation. In management's opinion, the Company operates in an
environmentally sound manner and the outcome of these environmental
matters will not have a material effect on PPG's financial position or
liquidity.
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<PAGE>
In addition to the amounts currently reserved, the Company may be
subject to loss contingencies related to environmental matters estimated
at the high end to be as much as $200 million to $400 million. Such
aggregate losses are reasonably possible but not currently considered to
be probable of occurrence. The Company's environmental contingencies
are expected to be resolved over a period of 20 years or more. These
loss contingencies include significant unresolved issues such as the
nature and extent of contamination, if any, at sites and the methods
that may have to be employed should remediation be required. Although
insurance may cover a portion of these costs, to the extent they are
incurred, any potential recovery is not included in this unrecorded
exposure to future loss. 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. Although the unrecorded exposure to future loss relates to all
sites, a significant portion of such unrecorded exposure involves three
operating plant sites and one closed plant site. Two of the sites are in
the early stages of study, while the remaining two are further into the
study phase. All four sites require additional study to assess the
magnitude of contamination, if any, and the remediation alternatives.
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.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Performance Overview
Sales for the first quarter of 1996 and 1995 were $1.75 billion and $1.74
billion, respectively. The benefits of increased volumes in our chemicals
segment, higher sales prices for our coatings and resins and glass segments,
and the favorable effects of foreign currency translation were substantially
offset by a decrease in sales prices for our chemicals segment, the absence of
sales from our divested European architectural coatings business, and lower
volumes in our glass segment. Sales volumes and operating income for our
North American automotive original coatings and resins and glass segments were
unfavorably impacted by reduced production at the North American manufacturing
operations of General Motors caused by a seventeen day strike at two of its
parts plants during March 1996.
The gross profit percentage decreased to 39.0% from 40.9% in the prior year's
quarter due to the negative effects of inflation and unfavorable sales mix
changes which were not fully recovered through slightly higher overall sales
prices and the benefits from manufacturing efficiencies.
Net income and earnings per share for the first quarter of 1996 were $172.3
million and $0.90, respectively. In the first quarter of 1995, net income and
earnings per share were $219.2 million and $1.06, respectively, which included
a $24.2 million ($0.12 per share) after-tax gain from the settlement of a
glass technology dispute with Pilkington plc of England. Current quarter net
income was unfavorably impacted by lower other earnings, attributable to gains
from legal settlements in the prior year's first quarter, the factors that
contributed to the gross profit percentage decrease described above, and the
effect of the General Motors strike, partially offset by lower income tax
expense and decreased other charges. Lower other charges were due in part to
a charge for a legal dispute in the prior year's quarter.
Performance of Business Segments
Coatings and resins sales increased to $692 million from $684 million in 1995.
Operating earnings for the corresponding periods were $115 million and $129
million, respectively. Sales increased as a result of higher sales prices in
most of the segment's major businesses, improved volumes for European and
Asia/Pacific automotive original and refinish products, the favorable effects
of foreign currency translation, and sales from several minor
acquisitions. The absence of sales from our European architectural coatings
business divested in the fourth quarter of 1995 and lower North American
automotive original and refinish volumes substantially offset these
increases. Operating income declined due to the negative effects of inflation
on raw material and overhead costs and unfavorable sales mix changes in our
automotive original and refinish businesses. These negative factors were only
partially offset by higher overall prices and improved manufacturing
efficiencies. Operating income in the first quarter of 1995 also included a
gain from the settlement of an industrial coatings dispute.
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<PAGE>
Glass sales increased to $666 million in the first quarter of 1996 from $661
million in the prior year's quarter. Operating income decreased to $103
million from $155 million in the corresponding 1995 period. Sales were
relatively flat as the benefits of increased fiber glass sales prices and
volumes as well as higher North American automotive replacement glass volumes
were countered by lower flat glass and automotive original glass volumes and
sales prices. Operating income in the first quarter of 1995 included the gain
from the legal settlement with Pilkington. Also contributing to the decline
in operating income were the lower flat glass and automotive original glass
volumes and sales prices combined with the negative effects of inflation on
our costs and unfavorable sales mix changes, particularly in our flat and
automotive replacement glass businesses. Increased prices for fiber glass
products, improved manufacturing efficiencies, and higher North American
automotive replacement glass volumes only slightly offset these negative
factors.
Chemicals sales decreased to $391 million in the first quarter of 1996 from
$396 million in the prior year's quarter. Operating income for the
corresponding periods were $91 million and $93 million, respectively. The
benefit of volume improvements for specialty products, particularly
Transitions optical lenses and silica products, was more than offset by the
effect of lower prices and volumes for chlor-alkali products and the absence
of sales from our sodium chlorate business divested late in the fourth quarter
of 1995. Relatively flat operating income was attributable to the factors
that contributed to the overall sales decline and increased manufacturing
costs, substantially offset by a charge for a legal dispute which occurred in
the first quarter of 1995.
Other Factors
The decrease in income tax expense was due to lower pre-tax earnings as the
effective tax rate for both periods remained constant at 38%. The increase in
income taxes payable was principally the result of the timing of estimated tax
payments in the first quarter of 1996 versus the fourth quarter of 1995.
The increase in short-term borrowings and current portion of long-term debt
was principally due to borrowings used to fund our repurchase of PPG common
stock.
Environmental Matters
It is PPG's policy to accrue expenses for environmental contingencies when it
is probable that a liability exists and the amount of loss can be reasonably
estimated. As of March 31, 1996 and December 31, 1995, PPG had reserves for
environmental contingencies totaling $98 million and $100 million,
respectively. Charges against income for environmental remediation costs for
the three months ended March 31, 1996 and 1995 were $7 million and $9 million,
respectively. Related cash outlays aggregated $9 million and $10 million for
the three months ended March 31, 1996 and 1995, respectively.
- 9 -
<PAGE>
Management anticipates that the resolution of the Company's environmental
contingencies, which will occur over an extended period of time, will not
result in future annual charges against income that are significantly greater
than those recorded in 1995. It is possible, however, that technological,
regulatory and enforcement developments, the results of environmental studies
and other factors could alter this expectation. In management's opinion, the
Company operates in an environmentally sound manner and the outcome of these
environmental matters will not have a material effect on PPG's financial
position or liquidity.
In addition to the amounts currently reserved, the Company may be subject to
loss contingencies related to environmental matters estimated at the high end
to be as much as $200 million to $400 million. Such aggregate losses are
reasonably possible but not currently considered to be probable of occurrence.
The Company's environmental contingencies are expected to be resolved over a
period of 20 years or more. These loss contingencies include significant
unresolved issues such as the nature and extent of contamination, if any, at
sites and the methods that may have to be employed should remediation be
required. Although insurance may cover a portion of these costs, to the
extent they are incurred, any potential recovery is not included in this
unrecorded exposure to future loss. 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. Although the unrecorded exposure to future loss
relates to all sites, a significant portion of such unrecorded exposure
involves three operating plant sites and one closed plant site. Two of the
sites are in the early stages of study, while the remaining two are further
into the study phase. All four sites require additional study to assess the
magnitude of contamination, if any, and the remediation alternatives.
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.
Foreign Currency and Interest Rate Risk
As a multinational company, PPG manages its transaction exposure to foreign
currency risk to minimize the volatility of cash flows caused by currency
fluctuations. The Company manages its foreign currency transaction exposures
principally through the purchase of forward and option contracts. It does not
manage its exposure to translation gains and losses; however, by borrowing in
local currencies it reduces such exposure. The fair value of the forward and
option contracts purchased and outstanding as of March 31, 1996 and Dec. 31,
1995, was not material.
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<PAGE>
The Company manages its interest rate risk in order to balance its exposure
between fixed and variable rates while attempting to minimize its interest
costs. PPG principally manages its interest rate risk by retiring and issuing
debt from time to time. To a limited extent, PPG manages its interest rate
risk through the purchase of interest rate swaps. As of March 31, 1996 and
December 31, 1995, the notional principal amount and fair value of interest
rate swaps held were not material.
The Company also uses commodity swap contracts to reduce its exposure to
fluctuations in prices for natural gas. The fair value of such swap contracts
purchased and outstanding as of March 31, 1996 and December 31, 1995, was not
material.
PPG's policies do not permit active trading of, or speculation in, derivative
instruments.
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<PAGE>
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Shareholders held on April 18, 1996 (the
"Annual Meeting"), the shareholders voted on the following matters with the
results shown below. There were no broker nonvotes with respect to any of
these matters.
1. On the matter of the election of five directors to serve for the terms
indicated in the proxy statement relating to the Annual Meeting, the vote
was as follows:
Nominees Votes For Votes Withheld
Michele J. Hooper 154,373,473 2,710,223
Raymond W. LeBoeuf 155,617,545 1,466,151
Harold A. McInnes 155,804,294 1,279,402
Vincent A. Sarni 155,133,584 1,950,112
David G. Vice 155,861,901 1,221,795
Each of the nominees was therefore elected a director to serve for the
terms indicated in the proxy statement relating to the Annual Meeting.
2. On the matter of the election of Deloitte & Touche LLP as auditors for
the Company for the year 1996, the vote was as follows:
For: 155,683,159 Against: 753,717 Abstain: 640,667
Therefore, Deloitte & Touche LLP were elected auditors for the Company
for 1996.
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10) Nonqualified Retirement Plan as amended through
January 1, 1996
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the quarter for which this
report is filed.
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<PAGE>
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: May 9, 1996 /s/ W. H. Hernandez
W. H. Hernandez
Senior Vice President, Finance
(Principal Financial and
Accounting Officer and
Duly Authorized Officer)
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<PAGE>
PPG INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit
No. Description
(10) Nonqualified Retirement Plan as amended through January 1, 1996
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
PPG INDUSTRIES, INC.
NONQUALIFIED RETIREMENT PLAN
Effective: January 1, 1989
As amended effective January 1, 1996
<PAGE>
ARTICLE I
Effective Date
1.1 This Plan shall be effective for retirements and terminations which
occur on and after January 1, 1989.
<PAGE>
ARTICLE II
Definitions
2.1 Wherever used herein, the following words and phrases shall have the
meanings set forth below unless a different meaning is plainly required
by context:
(a) "Act" shall mean the Employee Retirement Income Security Act of
1974 and amendments thereto.
(b) (1) "Administrative Committee" shall mean the Compensation
and Executive Development Committee appointed by the Board of
Directors of the Company.
(2) "Administrative Subcommittee" shall mean a committee
adopted by the Administrative Committee which shall have the
authority set forth in Section 7.2.
(c) "Administrator" shall mean the Director, Compensation and
Benefits.
(d) "Awards" shall mean a grant of incentive compensation under the
Incentive Compensation or the Management Award Plan which is paid
or deferred on or after January 1, 1989.
(e) "Company" shall mean PPG Industries, Inc. and its Subsidiaries.
(f) "Early Retirement Reduction Factor" shall mean the factor
applied to the benefit payable under the Qualified Plan reducing the
benefit for early retirement.
(g) "Eligible Spouse" shall mean:
(1) For purposes of the payment of an REP/SSB, a spouse
who was legally married to a Participant, Former Participant or
Terminated Vested Participant on his Benefit Commencement
Date; and
(2) For purposes of the payment of an AEP/SSB, a spouse
who was legally married to a Participant during the one year period
immediately prior to the Participant's death.
(h) "Employee" shall mean any full-time employee (including any
officer) of the Company or any of its Subsidiaries.
(i) "Excess FAMI" shall mean the amount by which a Participant's
FAMI exceeds Covered Compensation.
<PAGE>
(j) "Final Average Monthly Incentive" or "FAMI" shall mean the
sum of a Participant's five highest Awards paid or deferred within the
ten years immediately preceding such Participant's termination of
employment, divided by 60.
(k) "Former Participant" shall mean a Vested Participant who ceases
to be a Participant prior to his Normal or Deferred Retirement Date
for a reason other than retirement or termination of employment.
(l) "Incentive Compensation Plan" shall mean the PPG Industries,
Inc. Incentive Compensation and Deferred Income Plan for Key Employees,
as amended from time to time.
(l) "Management Award Plan" shall mean the PPG Industries, Inc.
Management Award and Deferred Income Plan, as amended from time to
time.
(m) "Participant" shall mean an Employee of the Company who is
eligible to participate, in accordance with ARTICLE III.
(n) "Plan" shall mean the PPG Industries, Inc. Nonqualified
Retirement Plan.
(o) "Prior Employer Benefit" shall mean the amount of any benefit
payable at Normal Retirement Age from any qualified or
nonqualified retirement plan or profit sharing plan to which a
Participant is entitled as a result of prior employment with any
employer other than the Company. In the event such amount is
payable in any manner other than a monthly straight-life annuity,
such amount will be converted to a monthly straight-life annuity,
using acceptable actuarial assumptions, as determined by the
Administrative Committee and consistent with the procedures of the
Qualified Plan.
(p) "Qualified Plan" shall mean the PPG Industries, Inc. Retirement
Income Plan, as amended from time to time, and any successor plan.
(q) "Subsidiary" shall mean any corporation, fifty percent or
more of the outstanding voting stock or voting power of which is owned,
directly or indirectly, by the Company and any partnership or
other entity in which the Company has a fifty percent or more
ownership interest.
(r) "Terminated Vested Participant" shall mean a Vested
Participant who terminates employment prior to his Early Retirement Date.
(s) "Vested Participant" shall mean a Participant who has
satisfied the vesting requirements of the Qualified Plan.
<PAGE>
2.2 Wherever used herein, the following words and phrases shall have the
meaning set forth in the Qualified Plan:
"Active Employees' Pension Surviving Spouse Benefit (AEP/SSB)"
"Benefit Commencement Date"
"Covered Compensation"
"Credited Service"
"Deferred Retirement Date"
"Early Retirement Date"
"Normal Retirement Date"
"Retired Employees' Pension Surviving Spouse Benefit (REP/SSB)"
"Social Security Early Retirement Age"
"Social Security Normal Retirement Age"
2.3 Wherever used herein, the masculine shall include the feminine and
the singular shall include the plural unless a different meaning is clearly
indicated by the context.
<PAGE>
ARTICLE III
Requirements for Participation
3.1 An Employee shall be a Participant in this Plan if he is a participant
in either the Incentive Compensation Plan or the Management Award Plan.
3.2 A Participant shall cease to be a Participant under this Plan at any
time he ceases to be a participant in the Incentive Compensation Plan or
the Management Award Plan, unless otherwise designated by the
Administrative Committee to remain as a Participant.
3.3 A Participant shall cease to be a Participant under this Plan at any
time he ceases to be an active participant under the Qualified Plan.
<PAGE>
ARTICLE IV
Eligibility for Benefits
4.1 Standard Benefit
Subject to Section 4.4, any Participant or Former Participant whose
Normal Retirement Date, Early Retirement Date, Deferred Retirement Date,
or any Terminated Vested Participant whose termination date occurs on or
after January 1, 1989, shall be eligible to receive the Standard Benefit
as provided in Section 5.1, unless specifically designated by the
Administrative Committee to receive the Special Short Service Benefit as
provided in Section 5.2.
4.2 Special Short Service Benefit
Subject to Section 4.4:
(a) Any Participant whose Normal Retirement Date or Deferred
Retirement Date occurs on or after January 1, 1989, and who meets
all of the following criteria shall be eligible to receive the
Special Short Service Benefit as provided in Section 5.2:
(1) He has been specifically designated by the
Administrative Committee to receive the Special Short Service Benefit; and
(2) He has less than thirty (30) years of Credited Service
on his Retirement Date.
(b) Any Participant whose Early Retirement Date occurs on or
after January 1, 1989, and who meets all of the following criteria shall
be eligible to receive the Special Short Service Benefit as
provided in Section 5.2:
(1) He has been specifically designated by the
Administrative Committee to receive the Special Short Service Benefit; and
(2) He has less than thirty (30) years of Credited
Service on his Retirement Date; and
(3) He has been specifically approved by the Administrative
Committee to retire prior to his Normal Retirement Date.
<PAGE>
4.3 Subject to Section 4.4, any Participant or Former Participant whose
Normal Retirement Date, Early Retirement Date, Deferred Retirement Date,
or any Terminated Vested Participant whose termination date occurs:
(a) On or after January 1, 1989, and
( i) Whose benefit under the Qualified Plan is limited or
reduced as a result of section 415 and/or section 401(a)(17) of the
Internal Revenue Code; or
(ii) Who was eligible to receive a benefit in accordance
with Section 5.5 of the PPG Industries, Inc. Supplemental
Retirement Plan II but whose benefit under this Plan is
greater than such benefit, and whose benefit under the
Qualified Plan is limited or reduced as a result of having
deferred salary under the terms of the Capital Enhancement
Account provision of the Incentive Compensation Plan; or
(b) On or after January 1, 1996, and whose benefit under the
Qualified Plan is limited or reduced as a result of having deferred salary
under the terms of the PPG Industries, Inc. Deferred Compensation
Plan,
shall be eligible to receive the Excess Benefit as provided in
Section 5.6.
4.4 A Participant who is entitled to receive a benefit in accordance with
Section 5.5 of the PPG Industries, Inc. Supplemental Retirement Plan II
shall not be entitled to receive a benefit under this Plan.
<PAGE>
ARTICLE V
Amounts of Benefits
5.1 Standard Benefit
(a) Subject to the provisions of Sections 5.3, 5.4 and 5.7, for a
Participant or Former Participant who retires on his Normal
Retirement Date or Deferred Retirement Date or for a Terminated
Vested Participant whose Benefit Commencement Date is his Normal
Retirement Date, the monthly benefit shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Credited Service
LESS
Other payments specifically designated by the Administrative
Committee to be deducted which are made pursuant to an
individual employee contract to provide retirement income or
deferred compensation regardless of whether the contract is
made with the Company, a Subsidiary, or other employer.
(b) Subject to the provisions of Sections 5.3, 5.4 and 5.7, for a
Participant or Former Participant who retires on his Early
Retirement Date or for a Terminated Vested Participant whose
Benefit Commencement Date is prior to his Normal Retirement Date,
the monthly benefit shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Credited Service
MULTIPLIED BY
The Early Retirement Reduction Factor
LESS
Other payments specifically designated by the Administrative
Committee to be deducted which are made pursuant to an
individual employee contract to provide retirement income or
deferred compensation regardless of whether the contract is
made with the Company, a Subsidiary, or other employer.
<PAGE>
5.2 Special Short Service Benefit
(a) For purposes of this Section 5.2 only, "Plan Service"
shall mean one and one-half (1 1/2) times Credited Service, with any
half (1/2) month rounded up to the next full month, up to a maximum of thirty
(30) years.
(b) Subject to Section 5.7, for a Participant who retires on his
Normal Retirement Date or Deferred Retirement Date, the monthly
benefit shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Plan Service
LESS
Any Prior Employer Benefit plus other payments, if
specifically designated by the Administrative Committee to
be deducted, which are made pursuant to an individual
employee contract to provide retirement income, regardless
of whether the contract is made by the Company, a
Subsidiary, or any other employer.
(c) Subject to Section 5.7, for a Participant who retires
on his Early Retirement Date, Plan Service shall be reduced by one month for
each month the Participant's Benefit Commencement Date precedes
his Normal Retirement Date; provided, however, that the
Administrative Committee may approve a lesser reduction.
(d) The monthly benefit for a Participant described in
subparagraph (c) of this section 5.2 shall be:
.0095 times FAMI
plus .0065 times Excess FAMI
Total times Plan Service, as adjusted in accordance with
paragraph (c) above.
MULTIPLIED BY
The Early Retirement Reduction Factor
LESS
Any Prior Employer Benefit plus other payments, if
specifically designated by the Administrative Committee to
be deducted, which are made pursuant to an individual
employee contract to provide retirement income, regardless
<PAGE>
of whether the contract is made by the Company, a
Subsidiary, or any other employer.
5.3 Terminated Vested Participant
In the case of a Terminated Vested Participant, the benefit amount
payable under this Plan shall be calculated on his termination date
using his Credited Service, Final Average Monthly Incentive, and Covered
Compensation as of the date of termination.
5.4 Former Participant
In the case of a Former Participant, the benefit amount payable under
this Plan shall be calculated as if his employment had terminated on the
date his participation in the Plan ceased, using his Credited Service,
Final Average Monthly Incentive, and Covered Compensation as of the date
of cessation of participation.
Where a Former Participant subsequently retires or becomes a Terminated
Vested Participant, the benefit amount payable under this Plan shall be
calculated in accordance with this Section 5.4.
5.5 Supplemental Early Retirement
(a) A Participant or Former Participant who is eligible for a
Supplemental Early Retirement Benefit under the Qualified Plan
shall be eligible to have his benefit under this Plan calculated
in a manner similar to the calculation of the Qualified Plan
benefit.
(b) The Administrator shall adopt rules for the calculation
of the benefit pursuant to this Section 5.5. Such rules shall be applied
in a uniform and nondiscriminatory manner.
5.6 Excess Benefit
(a) In the event a Participant's benefit under the Qualified Plan
is limited or reduced as a result of Section 415 and/or Section 401(a)(17) of
the Internal Revenue Code, or, in the case of a Participant described
in either subparagraph (a)(ii) or paragraph (b) of Section 4.3,
whose benefit under the Qualified Plan is limited or reduced as a
result of his having deferred salary under the terms of the
Capital Enhancement Account provision of the Incentive
Compensation Plan, and/or as a result of his having deferred
salary under the terms of the PPG Industries, Inc. Deferred
Compensation Plan, this Plan shall provide a benefit equal to the
amount of such limitation or reduction.
(b) The Administrator shall adopt rules for the calculation of
the benefit pursuant to this Section 5.6. Such rules shall be applied
in a uniform and nondiscriminatory manner.
<PAGE>
(c) Any benefit payable in accordance with this Section 5.6 shall be
in addition to any other benefit which may be payable hereunder.
5.7 Lump-Sum Benefit
(a) A Participant who is also eligible to participate in the PPG
Industries, Inc. 1984 Earnings Growth Plan at the time of his
Normal, Early or Deferred Retirement Date, and whose Normal, Early
or Deferred Retirement Date is on or after January 1, 1991, may
elect to receive any benefits payable hereunder in a lump sum, in
lieu of a monthly annuity in accordance with this Section 5.7.
(b) The following conditions apply to all elections pursuant to
this Section 5.7:
(1) A Participant may elect a lump sum benefit only if
such Participant elects his Benefit Commencement Date under the
Qualified Plan to be his Retirement Date.
(2) For Participants who elect to receive a lump-sum
benefit on and after January 1, 1993, and who are married on the date
their lump-sum benefit is payable, the election to receive a
lump sum must contain a consent to and acknowledgment of the
effect of such lump-sum election by the Participant's
spouse.
(3) Any election made pursuant to this Section 5.7
shall be irrevocable after the Latest Election Date; provided,
however, that, in the event of a Participant's death on or
after the Latest Election Date and prior to payment of the
lump-sum benefit, such election shall be deemed to be null
and void on the date of such Participant's death.
For purposes of this Section 5.7, "Latest Election
Date" shall mean:
In the case of a Participant who voluntarily retires, the
latest date which is both at least 6 months and 10 days
prior to his Retirement Date and in the calendar year
preceding the calendar year of his Retirement Date; or
In the case of a Participant who is involuntarily retired,
such Participant's Retirement Date.
(c) Calculation of Lump-Sum Benefit
(1) Any lump-sum benefit payable under this Section 5.7
shall be calculated using mortality assumptions according to the
current actuarial valuation prepared for the Plan, and the
PBGC immediate interest rate.
<PAGE>
(2) The PBGC immediate interest rate used to calculate the
lump-sum benefit of a Participant:
Who voluntarily retires, shall be either the rate in effect
on such Participant's Latest Election Date or the rate in
effect on the Participant's Benefit Commencement Date,
whichever produces the higher benefit; or
Who is involuntarily retired, shall be the rate in effect on
the Participant's Retirement Date.
(d) Payment of Lump-Sum Benefit
Any Lump-Sum Benefit payable pursuant to this Section 5.7, shall
be paid:
(1) In the case of a Participant who voluntarily retires,
on such Participant's Retirement Date; or
(2) In the case of a Participant who is involuntarily
retired, on the date which is 6 months and 10 days following such
Participant's Retirement Date. Such Participant's benefit
shall not accrue interest from the Participant's Retirement
Date through the date the lump-sum benefit is paid.
(e) The Administrative Committee shall have full discretion to
deny a Participant's request to receive a lump sum. Such decisions by
the Committee shall be made in a uniform and nondiscriminatory
manner.
(f) See Attachment 1 for special Lump-Sum payments approved by
the Officers-Directors Compensation Committee.
<PAGE>
ARTICLE VI
Payment of Benefits (Including REP/SSB and AEP/SSB)
6.1 For a Participant, Former Participant, or Terminated Vested
Participant, the following shall apply:
(a) An application for benefits under the Qualified Plan shall be
deemed to be an application for benefits under this Plan.
(b) Benefits under this Plan shall begin on the Benefit
Commencement Date.
(c) Except as otherwise provided in Section 5.7, benefits under
this Plan shall be paid in the same method or form of payment as
benefits are paid under the Qualified Plan and shall be subject to
the same rules and regulations of the Qualified Plan.
(d) Except as otherwise provided in Section 5.7, benefits under
this Plan shall be paid at the same time and for the same duration as
payments under the Qualified Plan.
(e) Except as otherwise provided in Section 5.7, in no event
may a Participant select a method or form of payment of benefits under
this Plan which is different in any way from the method or form of
payment of benefits selected under the Qualified Plan.
(f) Except as otherwise provided in Section 5.7, eligibility for
and payment of the REP/SSB to an Eligible Spouse under this Plan shall
be governed by the same rules and regulations as the Qualified
Plan.
6.2 For a Participant only, the following shall apply:
(a) Eligibility for and payment of the AEP/SSB under this Plan
shall be governed by the same rules and regulations as the Qualified
Plan.
(b) The amount of benefit payable to an Eligible Spouse under the
AEP/SSB shall always be determined under the Standard Benefit
formula, as provided in Section 5.1 of this Plan.
(c) The amount of benefit payable to an Eligible Spouse under the
AEP/SSB of a Participant eligible for the Special Short Service
Benefit shall not be based on the Special Short Service Benefit
formula.
<PAGE>
(d) Notwithstanding any other provision of this Section 6.2, the
amount of benefit payable to an Eligible Spouse of a Participant
who:
(l) is eligible for the Special Short Service Benefit; and
(2) has retired on his Early Retirement Date; and
(3) dies prior to his Benefit Commencement Date;
shall be based on the Special Short Service Benefit formula.
<PAGE>
ARTICLE VII
Forfeiture of Benefits
7.1 In the event a Participant ceases participation under this Plan prior
to becoming vested in the Qualified Plan, no benefit shall be payable under
this Plan.
7.2 (a) Any benefit payable under this Plan to a Participant, Former
Participant, or Terminated Vested Participant on or after
retirement or commencement of benefits, shall be forfeitable in
the event it is found that such Participant is engaged or employed
as a business owner, employee, or consultant in any activity which
is in competition with any line of business of the Company or its
Subsidiaries existing as of the date of termination of employment
or retirement.
(b) All determinations under this Section 7.2 shall be made by
the Administrative Subcommittee at its sole discretion. As the
Administrative Subcommittee finds appropriate, it may suspend
benefits to such Participant and furnish due notice thereof. The
Administrative Subcommittee may thereafter terminate benefits
under this Plan unless such Participant discontinues the
competitive activity and affords written notice to the
Administrative Subcommittee of such discontinuance within ninety
(90) calendar days following the giving of notice of suspension of
benefits.
7.3 If any benefit under the Plan has been payable to and has been
unclaimed by any Participant, Former Participant, Terminated Vested Participant
for a reasonable period of time, as determined by the Administrative
Committee, the Administrative Committee may direct that all rights of
such Participant to payments accrued and to future payments be
terminated absolutely, provided that if such Participant subsequently
appears and identifies himself to the satisfaction of the Administrative
Committee, then the liability will be reinstated.
<PAGE>
ARTICLE VIII
General Provisions
8.1 The entire cost of benefits and administrative expenses for this Plan
shall be paid by the Company.
8.2 The administration of this Plan shall be the responsibility of the
Administrative Committee, which shall interpret the provisions of this
Plan and decide all questions arising in its administration. The
decisions of the Administrative Committee shall be conclusive and
binding for all purposes. The Administrator will administer this Plan
at the direction of the Administrative Committee.
8.3 Nothing contained in this Plan shall be construed as a contract of
employment between the Company and any Participant, and the Plan shall
not afford any Participant a right of continued service with the
Company.
8.4 This Plan is purely voluntary on the part of the Company. The
Company, by action of the Officers-Director Compensation Committee (or any
successor) of the Board of Directors or by such other person or
committee acting in accordance with a procedure adopted and approved by
the Officers-Directors Compensation Committee (or any successor) of the
Board of Directors, may amend, suspend, or terminate the Plan, in whole
or in part at any time.
8.5 (a) Except as provided in paragraph (b) below, no benefits
payable under this Plan may be assigned or alienated or transferred in
whole or in part. No benefits payable under the Plan shall be
subject to legal process or attachment for the payment of any
claim against any person entitled to receive the same.
(b) Paragraph (a) above does not apply to the extent that a
Participant's interest under the Plan is alienated pursuant to a
"Qualified Domestic Relations Order" (QDRO) as defined in Section 414(p)
of the Internal Revenue Code. The Administrator is authorized to
adopt such procedural and substantive rules and to take such
procedural and substantive actions as the Administrator may deem
necessary or advisable to provide for the payment of amounts from
the Plan to an Alternate Payee as provided in a QDRO.
8.6 The Plan is intended to conform to the applicable requirements of the
Act and the Internal Revenue Code. Except to the extent otherwise
provided in the Act and the Code, this Plan shall be construed,
regulated and administered under the laws of the Commonwealth of
Pennsylvania.
<PAGE>
ARTICLE IX
Change in Control
9.1 Notwithstanding any other provisions of this Plan, upon a Change in
Control, as defined in Section 9.2:
(a) All Participants shall be deemed to be Vested Participants;
(b) Any Participant, including Participants described in paragraph
(a) of this Section 9.1, shall be eligible to receive the Special
Short Service Benefit as provided in Section 5.2 if, as of the
date a Change in Control occurs, he has been so designated by the
Administrative Committee.
(c) Paragraph (c) of Section 5.2 shall be revised in its entirety
to read:
(c) For a Participant who retires on his Early Retirement
Date, for purposes of computing his benefit, Plan Service shall be
reduced by the lesser of:
(1) One month for each month the Participant's
Benefit Commencement Date precedes his Normal Retirement Date;
or
(2) 36 months.
9.2 For purposes of this Plan, a "Change in Control" shall mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either
(i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or
(ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change in Control:
(i) any acquisition directly from the Company,
(ii) any acquisition by the Company,
<PAGE>
(iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or
(iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) of this Section 9.2; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination,
(i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined
<PAGE>
voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership
existed prior to the Business Combination, and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Board, providing for such Business Combination;
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) A majority of the Board otherwise determines that a Change in
Control shall have occurred.
9.3 Upon, or in reasonable anticipation of, a Change in Control, an amount
sufficient to fund the benefits of all Vested Participants, including
those vested pursuant to Section 9.1, Former Participants, and
Terminated Vested Participants, including an amount sufficient to fund
additional benefits anticipated to accrue during the twenty-four (24)
month period immediately following a Change in Control and including an
amount sufficient to fund the Active Employees' Pension Surviving Spouse
Benefit and the survivor annuity payable to the joint annuitant
designated by any such Participant on his Benefit Commencement Date
shall be paid immediately by the Company to a Trustee. Selection of the
Trustee, the amounts to be paid by the Company and the terms of such
payment (including such terms as are appropriate to cause such payment,
if possible, not to be a taxable event) in order to give effect to the
payment of benefits as provided in Sections 9.4 and 9.5 shall be
determined by the Vice President, Human Resources, and/or the Vice
President, Finance. Notwithstanding such funding, the Company shall be
obligated to pay such benefits to such Vested Participants, Former
Participants and Terminated Vested Participants to the extent such
funding proves to be insufficient. To the extent such funding proves to
be more than sufficient, such excess shall revert to the Company.
Except as regards paragraph (d) of Section 9.2, the Officers-
Directors Compensation Committee shall have the duty and the authority to make
the determination as to whether a Change in Control has occurred, or is
reasonably to be anticipated, and, concomitantly, to direct the making
of the payment contemplated herein.
9.4 The Trustee shall provide for the payment of benefits to Vested
Participants, Former Participants, Terminated Vested Participants,
Eligible Spouses and joint annuitants in accordance with the provisions
of this Plan as in effect on the date of the Change in Control. Any
subsequent attempts to suspend or terminate this Plan or to amend this
Plan in any way which reduces future benefits shall have no effect on
payments made or to be made by the Trustee.
<PAGE>
9.5 Notwithstanding any provision of this Plan, including without
limitation, Section 8.4, this Plan may not be:
(a) Amended such that future benefits would be reduced; or
(b) Suspended; or
(c) Terminated;
(1) As to the future accrual of benefits, at any time
during the twenty-four (24) month period following a Change in Control;
or
(2) As to the payment of benefits, at any time prior
to the last payment, determined in accordance with the provisions of
this Plan, to each Vested Participant, Former Participant,
Terminated Vested Participant, Eligible Spouse and joint
annuitant.
<PAGE>
Exhibit 11
PPG INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
Computation of Earnings Per Share
<CAPTION>
Three Months Ended March 31
1996 1995
<S> <C> <C>
Net income.................................... $ 172.3 $ 219.2
Weighted average number of shares
of common stock outstanding................. 192.4 206.5
Weighted average number of shares
of common stock outstanding and common
stock equivalents........................... 194.8 209.2
Primary earnings per share.................... $ 0.90 $ 1.06
Fully diluted earnings per share.............. $ 0.88 $ 1.05
</TABLE>
NOTES:
The common stock equivalents consist of the shares reserved for issuance under
PPG's stock option plan and deferred under PPG's incentive compensation,
management award, and earnings growth plans.
The fully diluted earnings per share calculations are submitted in accordance
with Regulation S-K item 601(b)(11) although not required by footnote 2 to
paragraph 14 of APB Opinion No. 15 because they result in dilution of less than
three percent.
All amounts are in millions except per share data.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. $
<S> <C>
<PERIOD-TYPE> 3-MOS
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 89
<SECURITIES> 0
<RECEIVABLES> 1,339
<ALLOWANCES> 0
<INVENTORY> 780
<CURRENT-ASSETS> 2,402
<PP&E> 6,533
<DEPRECIATION> 3,683
<TOTAL-ASSETS> 6,347
<CURRENT-LIABILITIES> 1,853
<BONDS> 712
0
0
<COMMON> 484
<OTHER-SE> 2,016
<TOTAL-LIABILITY-AND-EQUITY> 6,347
<SALES> 1,749
<TOTAL-REVENUES> 1,749
<CGS> 1,067
<TOTAL-COSTS> 1,067
<OTHER-EXPENSES> 159
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22
<INCOME-PRETAX> 288
<INCOME-TAX> 109
<INCOME-CONTINUING> 172
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 172
<EPS-PRIMARY> 0.90
<EPS-DILUTED> 0.90
</TABLE>
