Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF

# THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	December	31,	2012

Commission	File	Number	1-1687

# 	PPG	INDUSTRIES,	INC.

(Exact	name	of	registrant	as	specified	in	its	charter)

Pennsylvania

(State	or	other	jurisdiction	of incorporation	or	organization)

One	PPG	Place,	Pittsburgh,	Pennsylvania (Address	of	principal	executive	offices)

(I.R.S.	Employer Identification	No.)

(Zip	code)

# 	Securities	Registered	Pursuant	to	Section	12(b)	of	the	Act:

Securities	Registered	Pursuant	to	Section	12(g)	of	the	Act:	None

Indicate	by	check	mark	if	the	Registrant	is	a	well-known	seasoned	issuer	as	defined	in	Rule	405	of	the	Securities	Act.		YES		x				NO		¨

Indicate	by	check	mark	if	the	Registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.		YES		¨				NO		x

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	checkmark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	web	site,	if	any,	every	Interactive	Date	File	required	to	be	submitted	and	posted pursuant	to	Rule	405	of	Regulation	S-T	(§232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such files).		YES		x				NO		¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	Registrant's knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.		¨

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the	definitions	of	"large accelerated	filer,"	"accelerated	filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.	(Check	one):

Large	accelerated	filer		x

Non-accelerated	filer		o

Smaller	reporting	company		o

(Do	not	check	if	a	smaller

reporting	company)

	Indicate	by	check	mark	whether	the	Registrant	is	a	shell	company	(as	defined	by	Rule	12b-2	of	the	Act).		YES		 o				NO		ý

	The	aggregate	market	value	of	common	stock	held	by	non-affiliates	as	of	June	30,	2012,	was	$16,150	million.

As	of	January	31,	2013,	142,846,149	shares	of	the	Registrant's	common	stock,	with	a	par	value	of	$1.66 	2/3	per	share,	were	outstanding.	As	of	that	date,	the	aggregate	market	value	of common	stock	held	by	non-affiliates	was	$19,627	million.

# 	DOCUMENTS	INCORPORATED	BY	REFERENCE

# AND	CONSOLIDATED	SUBSIDIARIES

As	used	in	this	report,	the	terms	"PPG,"	"Company,"	"Registrant,"	"we,"	"us"	and	"our"	refer	to	PPG	Industries,	Inc.,	and	its	subsidiaries,	taken	as	a	whole,	unless	the context	indicates	otherwise.

# Part	I

# Part	IV

# Note	on	Incorporation	by	Reference

Throughout	this	report,	various	information	and	data	are	incorporated	by	reference	from	the	Company's	2012	Annual	Report	(hereinafter	referred	to	as	"the	Annual Report").	Any	reference	in	this	report	to	disclosures	in	the	Annual	Report	shall	constitute	incorporation	by	reference	only	of	that	specific	information	and	data	into	this Form	10-K.

# Item	1.	Business

	PPG	Industries,	Inc.,	incorporated	in	Pennsylvania	in	1883,	is	comprised	of six	reportable	business	segments:	Performance	Coatings,	Industrial	Coatings, Architectural	Coatings	–	EMEA	(Europe,	Middle	East	and	Africa),	Optical	and Specialty	Materials,	Commodity	Chemicals	and	Glass.	Each	of	the	business segments	in	which	PPG	is	engaged	is	highly	competitive.	The	diversification	of product	lines	and	worldwide	markets	served	tend	to	minimize	the	impact	on PPG's	total	sales	and	earnings	from	changes	in	demand	for	a	particular	product line	or	in	a	particular	geographic	area.	Refer	to	Note	24,	"Reportable	Business Segment	Information"	under	Item	8	of	this	Form	10-K	for	financial	information relating	to	our	reportable	business	segments.

On	January	28,	2013,	PPG	completed	the	separation	of	its	commodity chemicals	business	and	the	merger	of	the	subsidiary	holding	the	PPG	commodity chemicals	business	with	a	subsidiary	of	the	Georgia	Gulf	Corporation	("Georgia Gulf").	The	combined	company	formed	by	uniting	Georgia	Gulf	with	PPG's former	commodity	chemicals	business	is	named	Axiall	Corporation.	PPG	holds no	ownership	interest	in	Axiall	Corporation.	Refer	to	Note	25,	"Separation	and Merger	Transaction"	under	Item	8	of	this	Form	10-K	for	financial	information relating	to	this	transaction.

# Performance	Coatings,	Industrial	Coatings	and	Architectural	Coatings	– EMEA

	PPG	is	a	major	global	supplier	of	coatings.	The	Performance	Coatings, Industrial	Coatings	and	Architectural	Coatings	–	EMEA	reportable	segments supply	coatings	for	customers	in	a	wide	array	of	end	use	markets,	including industrial	equipment,	appliances	and	packaging;	factory-finished	aluminum extrusions	and	steel	and	aluminum	coils;	marine	and	aircraft	equipment; automotive	original	equipment;	and	other	industrial	and	consumer	products.	In addition	to	supplying	coatings	to	the	automotive	original	equipment	market ("OEM"),	PPG	supplies	refinishes	to	the	automotive	aftermarket.	PPG	also serves	commercial	and	residential	new	build	and	maintenance	markets	by supplying	coatings	to	painting	and	maintenance	contractors	and	directly	to consumers	for	decoration	and	maintenance.	The	coatings	industry	is	highly competitive	and	consists	of	a	few	large	firms	with	global	presence	and	many smaller	firms	serving	local	or	regional	markets.	PPG	competes	in	its	primary markets	with	the	world's	largest	coatings	companies,	most	of	which	have	global operations,	and	many	smaller	regional	coatings	companies.	Product development,	innovation,	distribution,	quality	and	technical	and	customer	service have	been	stressed	by	PPG	and	have	been	significant	factors	in	developing	an important	supplier	position	by	PPG's	coatings	businesses	comprising	the Performance	Coatings,	Industrial	Coatings	and	Architectural	Coatings	–	EMEA reportable	segments.

The	Performance	Coatings	reportable	segment	is	comprised	of	the	refinish, aerospace,	protective	and	marine	and	architectural	–	Americas	and	Asia	Pacific coatings	businesses.

The	refinish	coatings	business	supplies	coatings	products	for	automotive and	commercial	transport/fleet	repair	and	refurbishing,	light	industrial	coatings for	a	wide	array	of	markets	and	specialty	coatings	for	signs.	These	products	are sold	primarily	through	independent	distributors.

The	aerospace	coatings	business	supplies	sealants,	coatings,	technical cleaners	and	transparencies	for	commercial,	military,	regional	jet	and	general aviation	aircraft	and	transparent	armor	for	military	land	vehicles.	PPG	supplies products	to	aircraft	manufacturers	and	maintenance	and	aftermarket	customers around	the	world	both	on	a	direct	basis	and	through	a	company-owned distribution	network.

The	protective	and	marine	coatings	business	supplies	coatings	and	finishes for	the	protection	of	metals	and	structures	to	metal	fabricators,	heavy	duty maintenance	contractors	and	manufacturers	of	ships,	bridges,	rail	cars	and shipping	containers.	These	products	are	sold	through	the	company-owned architectural	coatings	stores,	independent	distributors	and	directly	to	customers.

Product	performance,	technology,	quality,	distribution	and	technical	and customer	service	are	major	competitive	factors	in	these	three	coatings businesses.

The	architectural	coatings-Americas	and	Asia	Pacific	business	primarily produces	coatings	used	by	painting	and	maintenance	contractors	and	by consumers	for	decoration	and	maintenance	of	residential	and	commercial building	structures.	These	coatings	are	sold	under	a	number	of	brands. Architectural	coatings	–	Americas	and	Asia	Pacific	products	are	sold	through	a combination	of	company-owned	stores,	home	centers,	paint	dealers,	and independent	distributors	and	directly	to	customers.	Price,	product	performance, quality,	distribution	and	brand	recognition	are	key	competitive	factors	for	these architectural	coatings	businesses.	In	2012,	the	architectural	coatings-Americas and	Asia	Pacific	business	operated	about	400	company-owned	stores	in	North America	and	about	40	company-owned	stores	in	Australia.

On	December	13,	2012,	PPG	entered	into	an	agreement	to	acquire	the	North American	architectural	coatings	business	of	Akzo	Nobel	N.V.	in	a	deal	valued	at $1.05	billion.	The	acquisition,	which	is	currently	expected	to	close	in	the	first half	of	2013,	includes	the	acquisition	of	a	number	of	leading	brands	and approximately	600	paint	stores	in	the	United	States,	Canada	and	the	Caribbean. With	regard	to	this	pending	acquisition,	the	statutory	waiting	period	prescribed by	the	Hart-Scott-Rodino	Antitrust	Improvements	Act	of	1976,	as	amended, expired	on	February	1,	2013.		Canadian	competition	clearance	and	Investment Canada	Act	approval	remain	pending.

The	major	global	competitors	of	the	Performance	Coatings	reportable segment	are	Akzo	Nobel	N.V.,	Axalta	Coating	Systems	(former	DuPont performance	coatings	business),	BASF	Corporation,	Hempel	A/S,	the	Jotun Group,	Masco	Corporation,	the	Sherwin-Williams	Company,	Valspar Corporation	and	GKN	plc.	The	average	number	of	persons	employed	by	the Performance	Coatings	reportable	segment	during	2012	was	about	12,100.

The	Industrial	Coatings	reportable	segment	is	comprised	of	the	automotive OEM,	industrial	and	packaging	coatings	businesses.	Industrial,	automotive	OEM and	packaging	coatings	are	formulated	specifically	for	the	customers'	needs	and application	methods.

The	industrial	and	automotive	OEM	coatings	businesses	sell	directly	to	a variety	of	manufacturing	companies.	PPG	also	supplies	adhesives	and	sealants for	the	automotive	industry	and	metal	pretreatments	and	related	chemicals	for industrial	and	automotive	applications.	PPG	has	established	alliances	with Kansai	Paints	and	Helios	Group	to	serve	certain	automotive	original	equipment manufacturers	in	various	regions	of	the	world.	PPG	owns	a	60%	interest	in	PPG Kansai	Finishes	to	serve	Japanese-based	automotive	OEM	customers	in	North America	and	Europe	and	PPG	owns	a	60%	interest	in	PPG	Helios	Ltd.	to	serve Russian-based	automotive	OEM	customers	in	Russia	and	the	Ukraine.

The	packaging	coatings	business	supplies	coatings	and	inks	to	the manufacturers	of	aerosol,	food	and	beverage	containers.

Product	performance,	technology,	cost	effectiveness,	quality	and	technical and	customer	service	are	major	competitive	factors	in	the	industrial	coatings businesses.	The	major	global	competitors	of	the	Industrial	Coatings	reportable segment	are	Akzo	Nobel	N.V.,	Axalta	Coating	Systems,	BASF	Corporation, Valspar	Corporation	and	Nippon	Paint.	The	average	number	of	persons employed	by	the	Industrial	Coatings	reportable	segment	during	2012	was	about 8,600.

PPG	has	established	an	alliance	with	Asian	Paints	Ltd.	to	serve	customers in	India.	PPG	and	Asian	Paints	Ltd.	each	own	a	50%	interest	in	Asian	PPG Paints	to	serve	global	and	domestic-based	automotive	OEM	and	aftermarket customers	in	India.	In	July	2012,	PPG	expanded	the	current	Asian	Paints	joint venture	and	also	created	a	second	50-50	joint	venture	with	Asian	Paints.	As	part of	these	changes,	PPG	gained	effective	management	control	of	the	existing	joint venture,	while	Asian	Paints	has	effective	management	control	of	the	newly formed	joint	venture.	The	existing	joint	venture	expanded	its	scope	to	serve India's	industrial	liquid,	marine,	consumer	packaging	and	transportation coatings	markets.	The	newly	formed	venture	serves	the	protective,	industrial powder,	industrial	containers	and	light	industrial	coatings	markets.

The	Architectural	Coatings	–	EMEA	business	supplies	a	variety	of	coatings under	a	number	of	brands	and	purchased	sundries	to	painting	contractors	and consumers	in	Europe,	the	Middle	East	and	Africa.	Architectural	Coatings	– EMEA	products	are	sold	through	a	combination	of	nearly	700	company-owned stores,	home	centers,	paint	dealers,	and	independent	distributors	and	directly	to customers.	Price,	product	performance,	quality,	distribution	and	brand recognition	are	key	competitive	factors	for	this	business.	The	major	competitors of	the	Architectural	Coatings	–	EMEA	reportable	segment	are	Akzo	Nobel	N.V. and	Materis	Paints.	The	average	number	of	persons	employed	by	the Architectural	Coatings	–	EMEA	reportable	segment	during	2012	was	about 8,000.

# Optical	and	Specialty	Materials

PPG's	Optical	and	Specialty	Materials	reportable	segment	is	comprised	of the	optical	products	and	silicas	businesses.	The	primary	Optical	and	Specialty Materials	products	are	Transitions®	lenses,	optical	lens	materials	and	high performance	sunlenses;	amorphous	precipitated	silicas	for	tire,	battery	separator and	other	end-use	markets;	and	Teslin®	substrate	used	in	such	applications	as radio	frequency	identification	(RFID)	tags	and	labels,	e-passports,	drivers' licenses	and	identification	cards.	Transitions®	lenses	are	processed	and distributed	by	PPG's	51%-owned	joint	venture	with	Essilor	International ("Essilor").	In	the	Optical	and	Specialty	Materials	businesses,	product	quality and	performance,	branding,	distribution	and	technical	service	are	the	most critical	competitive	factors.	The	major	global	competitors	of	the	Optical	and Specialty	Materials	reportable	segment	are	Vision-Ease	Lens,	Carl	Zeiss	AG, Corning,	Inc.,	Hoya	Corporation,	Mitsui	Chemicals,	Inc.,	Solvay	Group,	J.M. Huber	and	Evonik	Industries,	A.G.	The	average	number	of	persons	employed	by the	Optical	and	Specialty	Materials	reportable	business	segment	during	2012	was about	2,900.

# Commodity	Chemicals

	Until	January	28,	2013,	PPG	was	a	producer	and	supplier	of	basic chemicals.	The	Commodity	Chemicals	reportable	segment	produced	chlor-alkali and	derivative	products,	including	chlorine,	caustic	soda,	vinyl	chloride monomer,	chlorinated	solvents,	calcium	hypochlorite,	ethylene	dichloride, hydrochloric	acid	and	phosgene	derivatives.	Most	of	these	products	were	sold directly	to	manufacturing	companies	in	the	chemical	processing,	plastics, including	polyvinyl	chloride	("PVC"),	paper,	minerals,	metals,	agricultural products	and	water	treatment	industries.	The	segment	competed	with	the following	other	major	domestic	producers	of	chlor-alkali	products,	including	The Dow	Chemical	Company,	Formosa	Plastics	Corporation,	U.S.A.,	Occidental Chemical	Corporation,	Olin	Corporation,	Shintech,	Inc.	and	Westlake	Chemical Corporation.	Price,	product	availability,	product	quality	and	customer	service	are the	key	competitive	factors.	The	average	number	of	persons	employed	by	the Commodity	Chemicals	reportable	business	segment	during	2012	was	about 2,000.	On	January	28,	2013,	PPG	completed	the	separation	of	its	commodity chemicals	business	and	merged	the	subsidiary	holding	this	business	with	a subsidiary	of	Georgia	Gulf.

# Glass

The	Glass	reportable	business	segment	is	comprised	of	the	flat	glass	and fiber	glass	businesses.	PPG	is	a	producer	of	flat	glass	in	North	America	and	a global	producer	of	continuous-strand	fiber	glass.	PPG's	major	markets	are commercial	and	residential	construction	and	the	wind	energy,	energy infrastructure,	transportation	and	electronics	industries.	Most	glass	products	are sold	directly	to	manufacturing	companies.	PPG	manufactures	flat	glass	by	the float	process	and	fiber	glass	by	the	continuous-strand	process.

The	bases	for	competition	in	the	Glass	businesses	are	price,	quality, technology	and	customer	service.	The	Company	competes	with	four	major producers	of	flat	glass,	including	Asahi	Glass	Company,	Cardinal	Glass Industries,	Guardian

Industries	and	NSG	Pilkington,	and	eight	major	producers	of	fiber	glass throughout	the	world,	including	Owens	Corning-Vetrotex,	Jushi	Group,	Johns Manville	Corporation,	CPIC	Fiberglass,	AGY,	NEG,	3B	and	Taishan	Fiberglass. The	average	number	of	persons	employed	by	the	Glass	reportable	business segment	during	2012	was	about	3,200.

# Raw	Materials	and	Energy

The	effective	management	of	raw	materials	and	energy	is	important	to PPG's	continued	success.	The	Company's	most	significant	raw	materials	are epoxy	and	other	resins,	titanium	dioxide	and	other	pigments,	and	solvents	in	the coatings	businesses;	lenses,	sand	and	soda	ash	in	the	Optical	and	Specialty Materials	segment;	brine	and	ethylene	in	the	Commodity	Chemicals	segment; and	sand,	clay	and	soda	ash	in	the	Glass	segment.	Many	raw	material	prices began	to	inflate	during	2010,	continued	through	2011	and	into	2012,	reflecting recovering	economic	demand	and	decreased	supply	stemming	from	capacity idled	or	closed	during	the	recession.	Also,	adverse	effects	of	supplier	disruptions due	to	natural	disasters	placed	additional	pressure	on	some	of	our	supply	chains leading	to	higher	prices.	Raw	material	prices	began	to	moderate	in	the	second half	of	2012	due	to	lower	global	demand,	including	the	effect	of	lower	economic activity	in	Europe.

Coatings	raw	materials	include	both	organic,	primarily	petroleum	based, materials	and	inorganic	materials,	including	titanium	dioxide,	and	generally comprise	70-to-80%	of	cost	of	goods	sold	in	most	coatings	formulations	and represent	PPG's	single	largest	production	cost	component.	PPG	input	prices inflated	further	in	the	first	half	of	2012,	and	then,	in	the	second	half	of	the	year, moderated	modestly	from	the	year's	peak	levels.	The	largest	inflationary	impact was	from	titanium	dioxide	pigments,	with	year-over-year	reductions	in	the	cost of	various	petrochemical-based	materials	partially	offsetting	those	increases. Raw	material	costs	for	our	coatings	businesses	increased	nearly	$725	million due	to	inflation	during	the	three	year	period	ended	December	31,	2012.	The inflation	rate	for	2012	was	low	single-digit	percentages.

Energy	is	a	significant	production	cost	in	the	Commodity	Chemicals	and Glass	segments,	and	our	primary	energy	cost	is	natural	gas.	PPG	has	historically purchased	60-to-70	trillion	British	Thermal	Units	(BTUs)	of	natural	gas	each year.	Inclusive	of	the	impact	of	PPG's	natural	gas	hedging	activities,	PPG's	2012 natural	gas	unit	cost	decreased	35%	in	the	U.S.	compared	to	2011,	reflecting continued	higher	natural	gas	supply	stemming	from	the	success	of	shale	gas drilling.	The	separation	of	PPG's	commodity	chemicals	business	greatly	reduced PPG's	natural	gas	exposure,	with	annual	purchases	now	expected	to	range	from 10-to-20	trillion	BTUs	per	year.	In	our	Commodity	Chemicals	segment,	we	also experienced	lower	average	ethylene	unit	costs,	compared	to	2011.	Lower	ethane feedstock	values,	partially	due	to	the	expansion	of	shale	gas	production,	was	the main	driver	of	an	approximate	13%	decline	in	our	average	unit	cost	of	ethylene. The	separation	of	PPG's	commodity	chemicals	business	also	eliminated	PPG's direct	exposure	with	respect	to	the	volatility	of	ethylene	prices.

Most	of	the	raw	materials	and	energy	used	in	production	are	purchased from	outside	sources,	and	the	Company	has	made,	and	plans	to	continue	to make,	supply	arrangements	to	meet	the	planned	operating	requirements	for	the future.	Supply	of	critical	raw	materials	and	energy	is	managed	by	establishing contracts,	multiple	sources,	and	identifying	alternative	materials	or	technology whenever	possible.	The	Company	is	continuing	its	aggressive	sourcing initiatives	to	support	its	continuous	efforts	to	find	the	lowest	raw	material	costs. These	initiatives	include	reformulation	of	our	products	using	both	petroleum- derived	and	bio-based	materials	as	part	of	a	product	renewal	strategy,	qualifying multiple	and	local	sources	of	supply,	including	suppliers	from	Asia	and	other lower	cost	regions	of	the	world.	The	Company	also	has	undertaken	a	strategic initiative	with	multiple	global	suppliers	to	secure	and	enhance	PPG's	supply	of titanium	dioxide,	as	well	as	to	add	to	the	global	supply	of	this	raw	material.	PPG possesses	intellectual	property	and	expertise	in	the	production	and	finishing	of titanium	dioxide	pigment	and	we	have	and	intend	to	continue	to	leverage	this	and engage	potential	partners	to	develop	innovative	supply	solutions	through technical	collaborations,	joint	ventures,	licensing	or	other	commercial	initiatives. In	2012,	PPG	signed	a	memorandum	of	understanding	with	Henan	Billions Chemicals	Co.,	Ltd.	("Billions"),	by	which	PPG	will	license	certain	chloride- based	titanium	dioxide	technologies	to	Billions	for	use	at	Billions'	titanium dioxide	refinement	facilities	in	China.	In	addition,	PPG	has	signed	a	long-term purchase	agreement	for	titanium	dioxide	with	Billions.	PPG	intends	to	use	the chloride-based	titanium	dioxide	manufactured	by	Billions	for	various	end-use applications,	including	paints	and	other	coatings.	Billions	is	also	able	to	sell	the chloride-based	titanium	dioxide	to	third	parties.	Our	efforts	to	reduce	titanium dioxide	consumption	resulted	in	a	4%	reduction	in	titanium	dioxide	usage	during 2012.

We	are	subject	to	existing	and	evolving	standards	relating	to	the	registration of	chemicals	that	impact	or	could	potentially	impact	the	availability	and	viability of	some	of	the	raw	materials	we	use	in	our	production	processes.	Our	ongoing global	product	stewardship	efforts	are	directed	at	maintaining	our	compliance with	these	standards.

In	2006,	the	European	Union	("EU")	member	states	adopted	new comprehensive	chemical	registration	legislation	known	as	"REACH" (Registration,	Evaluation,	and	Authorization	of	Chemicals).	REACH	applies	to all	chemical	substances	manufactured	or	imported	into	the	EU	in	quantities	of one	metric	ton	or	more	annually	and	will	require	the	registration	of approximately	30,000	chemical	substances	with	the	European	Chemicals Agency.	REACH	requires	the	registration	of	these	substances,	entailing	the	filing of	extensive	data	on	their	potential	risks	to	human	health	and	the	environment. Registration	activities	are	occurring	in	three	phases	over	an	11-year	period, based	on	tonnage	and	level	of	concern.	The	first	registration	deadline	was	in 2010	with	subsequent	phases	ending	in	2013	and	2018.	In	the	case	of	chemicals with	a	high	level	of	concern,	the	regulation	calls	for	progressive	substitution unless	no	alternative	can	be	found;	in	these	cases,	authorization	of	the	chemicals will	be	required.

PPG	established	a	dedicated	organization	to	manage	REACH implementation.	We	have	continued	to	review	our	product	portfolio,	worked closely	with	our	suppliers	to	assure	their	commitment	to	register	substances	in our	key	raw	materials	and	started	registration	of	substances	that	PPG manufactures	or	imports	as	raw	materials.	We	will	continue	to	work	with	our suppliers	to	understand	the	future	availability	and	viability	of	the	raw	materials we	use	in	our	production	processes.

Compliance	with	the	REACH	legislation	will	result	in	increased	costs related	to	the	registration	process,	product	testing	and	reformulation,	risk characterization	and	participation	in	Substance	Information	Exchange	Forums ("SIEFs")	required	to	coordinate	registration	dossier	preparation.	PPG	identified 10	substances	that	required	registration	in	2010	and	engaged	with	other	key companies	through	SIEFs	to	develop	the	required	registration	dossiers.	Actual costs	for	substance	registration	were	not	significant	in	2010	through	2012,	due primarily	to	fewer	substances	requiring	registration	than	originally	anticipated. The	costs	for	2013	and	2018	registrations	and	potential	additional	future	testing in	support	of	2010	registrations	are	currently	unclear;	however,	our	current estimate	of	the	total	spend	during	2013-2018	has	been	lowered	to	a	range	of	$5 million	to	$10	million.	We	anticipate	that	some	current	raw	materials	and products	will	be	subject	to	the	REACH	authorization	process	and	believe	that	we will	be	able	to	demonstrate	adequate	risk	management	for	the	use	and application	of	the	majority	of	such	substances.

Changes	to	chemical	control	regulations	have	been	proposed	or implemented	in	many	countries	beyond	the	EU,	including	China,	Canada,	the United	States,	and	Korea.	Because	implementation	of	many	of	these	programs has	not	been	finalized,	the	financial	impact	cannot	be	estimated	at	this	time.	We anticipate	chemical	control	regulations	will	continue	to	increase	globally,	and	we have	implemented	programs	to	track	and	comply	with	the	regulations.

# Research	and	Development

Technology	innovation	has	been	a	hallmark	of	PPG's	success	throughout	its history.	Research	and	development	costs,	including	depreciation	of	research facilities,	were	$470	million,	$445	million	and	$408	million	during	2012,	2011 and	2010,	respectively.	These	costs	totaled	approximately	3%	of	sales	in	each year	of	the	period	from	2010	to	2012.	PPG	owns	and	operates	several	facilities to	conduct	research	and	development	relating	to	new	and	improved	products	and processes.	Additional	process	and	product	research	and	development	work	is also	undertaken	at	many	of	the	Company's	manufacturing	plants.	As	part	of	our ongoing	efforts	to	manage	our	formulations	and	raw	material	costs	effectively, we	operate	a	global	competitive	sourcing	laboratory	in	China.	We	have	obtained government	funding	of	a	small	portion	of	the	Company's	research	efforts,	and we	will	continue	to	pursue	government	funding.	Because	of	the	Company's broad	array	of	products	and	customers,	PPG	is	not	materially	dependent	upon any	single	technology	platform.

The	Company	seeks	to	optimize	its	investment	in	research	and	development to	create	new	products	to	drive	profitable	growth.	We	align	our	product development	with	the	macro	trends	in	the	end-use	markets	we	serve	and	leverage core	technology	platforms	to	develop	products	for	unmet	market	needs.	Our history	of	successful	technology	introductions	is	based	on	a	commitment	to	an efficient	and	effective	innovation	process	and	disciplined	portfolio	management.

# 	Patents

PPG	considers	patent	protection	to	be	important.	The	Company's	reportable business	segments	are	not	materially	dependent	upon	any	single	patent	or	group of	related	patents.	PPG	earned	$51	million	in	2012,	$55	million	in	2011	and	$58 million	in	2010	from	royalties	and	the	sale	of	technical	know-how.

# Backlog

In	general,	PPG	does	not	manufacture	its	products	against	a	backlog	of orders.	Production	and	inventory	levels	are	geared	primarily	to	projections	of future	demand	and	the	level	of	incoming	orders.

# Non-U.S.	Operations

PPG	has	a	significant	investment	in	non-U.S.	operations.	This	broad geographic	footprint	serves	to	lessen	the	significance	of	economic	impacts occurring	in	any	one	region.	As	a	result	of	our	expansion	outside	the	U.S.,	we are	subject	to	certain	inherent	risks,	including	economic	and	political	conditions in	international	markets	and	fluctuations	in	foreign	currency	exchange	rates.

Our	sales	generated	by	products	sold	in	the	developed	and	emerging	regions of	the	world	over	the	past	three	years	are	summarized	below:

| (millions) |  | Sales |  |
| :--- | :--- | :--- | :--- |
|  | 2012 | 2011 | 2010 |
| United\tStates,\tCanada,\tWestern\tEurope | $11,031 | $10,844 | $9,837 |
| Latin\tAmerica,\tEastern\tEurope,\tMiddle\tEast, |  |  |  |
| Africa,\tAsia\tPacific | 4,169 | 4,041 | 3,586 |
| Total | $15,200 | $14,885 | $13,423 |

# Seasonality

PPG's	earnings	are	typically	greater	in	the	second	and	third	quarters	and cash	flow	from	operations	is	greatest	in	the	fourth	quarter	due	to	end-use	market seasonality,	primarily	in	PPG's	architectural	coatings	businesses.	Demand	for PPG's	architectural	coatings	products	is	typically	strongest	in	the	second	and third	quarters	due	to	higher	home	improvement,	maintenance	and	construction activity	during	the	spring	and	summer	months	in	North	America	and	Europe. This	higher	activity	level	results	in	higher	outstanding	receivables	that	are collected	in	the	fourth	quarter	generating	higher	fourth	quarter	cash	flow.

# Employee	Relations

The	average	number	of	persons	employed	worldwide	by	PPG	at December	31,	2012	was	39,200.	The	Company	has	numerous	collective bargaining	agreements	throughout	the	world.	While	we	have	experienced occasional	work	stoppages	as	a	result	of	the	collective	bargaining	process	and may	experience	some	work	stoppages	in	the	future,	we	believe	we	will	be	able	to negotiate	all	labor	agreements	on	satisfactory	terms.	To	date,	these	work stoppages	have	not	had	a	significant	impact	on	PPG's	operating	results.	Overall, the	Company	believes	it	has	good	relationships	with	its	employees.

# Environmental	Matters

PPG	is	subject	to	existing	and	evolving	standards	relating	to	protection	of the	environment.	Capital	expenditures	for	environmental	control	projects	were $12	million,	$15	million	and	$16	million	in	2012,	2011	and	2010,	respectively. It	is	expected	that	expenditures	for	such	projects	in	2013	will	be	in	the	range	of $10-$15	million,	excluding	the	recently	separated	commodity	chemicals business.	Although	future	capital	expenditures	are	difficult	to	estimate	accurately because	of	constantly	changing	regulatory	standards	and	policies,	it	can	be anticipated	that	environmental	control	standards	will	become	increasingly stringent	and	the	cost	of	compliance	will	increase.

In	March	of	2011,	the	United	States	Environmental	Protection	Agency ("USEPA")	proposed	amendments	to	the	national	emission	standards	for hazardous	air	pollutants	for	mercury	emissions	from	mercury	cell	chlor-alkali plants	known	as	Mercury	Maximum	Achievable	Control	Technology	("Mercury MACT").	USEPA's	proposed	amendments	would	require	improvements	in	work practices	to	reduce	fugitive	emissions	and	would	result	in	reduced	levels	of mercury	emissions	while	still	allowing	the	mercury	cell	facilities	to	continue	to operate.	Prior	to	the	separation	of	its	commodity	chemicals	business,	PPG operated	a	200	ton-per-day	mercury	cell	production	unit	at	the	Natrium,	W.Va. facility.	This	unit	constituted	approximately	4%	of	PPG's	total	chlor-alkali production	capacity.	The	Mercury	MACT	has	no	impact	on	any	other	PPG facility.

Separately,	the	Natrium,	W.Va	facility	discharges	its	wastewater	into	the Ohio	River	pursuant	to	a	National	Pollution	Discharge	Elimination	System ("NPDES")	permit	issued	by	the	West	Virginia	Department	of	Environmental Protection	("WVDEP").	Because	it	discharges	into	the	Ohio	River,	the	NPDES permit	terms	must	conform	to	pollution	control	standards	for	the	Ohio	River	set by	the	Ohio	River	Valley	Water	Sanitation	Commission	("ORSANCO").	On October	12,	2012,	ORSANCO	granted	PPG's	request	for	a	variance	which	will allow	the	Natrium,	W.Va.	facility	to	continue	to	have	a	mixing	zone	for	its discharge	of	mercury	for	a	five-year	period	after	ORSANCO's	prohibition	on mixing	zones	takes	effect	on	October	16,	2013.

PPG	is	negotiating	with	various	government	agencies	concerning	108 current	and	former	manufacturing	sites	and	offsite	waste	disposal	locations, including	20	sites	on	the	National	Priority	List.	While	PPG	is	not	generally	a major	contributor	of	wastes	to	these	offsite	waste	disposal	locations,

each	potentially	responsible	party	may	face	governmental	agency	assertions	of joint	and	several	liability.	Generally,	however,	a	final	allocation	of	costs	is	made based	on	relative	contributions	of	wastes	to	the	site.	There	is	a	wide	range	of cost	estimates	for	cleanup	of	these	sites,	due	largely	to	uncertainties	as	to	the nature	and	extent	of	their	condition	and	the	methods	that	may	have	to	be employed	for	their	remediation.	The	Company	has	established	reserves	for	onsite and	offsite	remediation	of	those	sites	where	it	is	probable	that	a	liability	has	been incurred	and	the	amount	can	be	reasonably	estimated.

As	of	December	31,	2012	and	2011,	PPG	had	reserves	for	estimated environmental	remediation	costs	totaling	$332	million	and	$226	million, respectively,	of	which	$101	million	and	$59	million,	respectively,	were classified	as	current	liabilities.	Pretax	charges	against	income	for	environmental remediation	costs	in	2012,	2011	and	2010	totaled	$167	million,	$16	million	and $21	million,	respectively.	Cash	outlays	related	to	such	environmental remediation	aggregated	$66	million,	$59	million	and	$34	million	in	2012,	2011 and	2010,	respectively.	The	impact	of	foreign	currency	translation	increased	the liability	by	$2	million	in	2012	and	decreased	the	liability	by	$3	million	in	2011. As	a	result	of	the	allocation	of	the	purchase	price	of	acquisitions	to	assets acquired	and	liabilities	assumed,	the	liability	for	environmental	contingencies was	increased	by	$3	million	in	2012.	Environmental	remediation	of	a	former chromium	manufacturing	plant	site	and	associated	sites	in	Jersey	City,	N.J. (which	we	refer	to	as	"New	Jersey	Chrome")	represents	the	major	part	of	our existing	reserves.	Included	in	the	amounts	mentioned	above	were	$221	million and	$129	million	in	reserves	at	December	31,	2012	and	2011,	respectively, associated	with	all	New	Jersey	chromium	sites.

The	Company's	experience	to	date	regarding	environmental	matters	leads	it to	believe	that	it	will	have	continuing	expenditures	for	compliance	with provisions	regulating	the	protection	of	the	environment	and	for	present	and future	remediation	efforts	at	waste	and	plant	sites.	Management	anticipates	that such	expenditures	will	occur	over	an	extended	period	of	time.

The	Company	continues	to	analyze,	assess	and	remediate	the	environmental issues	associated	with	New	Jersey	Chrome.	In	connection	with	the	preparation	of a	final	draft	soil	remedial	action	work	plan	and	cost	estimate	that	was	initially required	to	be	submitted	to	the	NJDEP	in	May	2012	but	now	will	be	submitted in	2013,	the	Company	compiled	updated	information	about	the	sites	that	was used	to	develop	a	new	estimate	of	the	cost	to	remediate	these	sites	which	resulted in	a	charge	against	earnings	of	$145	million	in	the	first	quarter	of	2012.	A	charge of	$165	million	for	the	estimated	costs	of	remediating	these	sites	was	recorded	in the	third	quarter	of	2006.	Information	will	continue	to	be	generated	from	the ongoing	groundwater	remedial	investigation	activities	related	to	New	Jersey Chrome	and	will	be	incorporated	into	a	final	draft	remedial	action	work	plan	for groundwater	expected	to	be	submitted	to	NJDEP	in	the	second	quarter	of	2014.

These	charges	for	estimated	environmental	remediation	costs	in	2006	and 2012	were	significantly	higher	than	PPG's	historical	range.	Excluding	2006	and 2012,	pre-tax	charges

against	income	for	environmental	remediation	have	ranged	between	$10	million and	$35	million	per	year	for	the	past	16	years.	Charges	in	2013	are	expected	to again	be	within	this	historical	range.	In	addition	to	the	amounts	currently reserved,	we	may	be	subject	to	loss	contingencies	related	to	environmental matters	estimated	to	be	as	much	as	$100	million	to	$275	million.	This	range	of reasonably	possible	unreserved	loss	relates	to	environmental	matters	at	a	number of	sites	including	each	of	the	following;	i)	additional	costs	at	New	Jersey Chrome,	which	represent	about	one	third	of	this	potential	range,	ii)	a	number	of other	locations,	including	legacy	glass	and	chemical	manufacturing	sites	and	iii) the	Calcasieu	River	Estuary	and	two	operating	plant	sites	in	the	Company's former	commodity	chemicals	business.	The	loss	contingencies	related	to	these sites	include	significant	unresolved	issues	such	as	the	nature	and	extent	of contamination	at	these	sites	and	the	methods	that	may	have	to	be	employed	to remediate	them.

All	known	and	currently	reserved	environmental	liabilities	associated	with the	commodity	chemicals	business	were	transferred	with	the	separation	of	this business	from	PPG	and	subsequent	merger	of	the	subsidiary	holding	the	PPG commodity	chemicals	business	with	a	subsidiary	of	Georgia	Gulf.	The	newly merged	company,	Axiall,	will	assume	responsibility	for	these	liabilities.	As	a result	of	this	transaction,	PPG	will	retain	responsibility	for	potential environmental	liabilities	that	may	result	from	future	Natural	Resource	Damage claims	and	any	potential	tort	claims	at	the	Calcasieu	River	Estuary	associated with	activities	and	historical	operations	of	the	Lake	Charles,	La.	facility.	PPG will	additionally	retain	responsibility	for	all	liabilities	relating	to,	arising	out	of or	resulting	from	sediment	contamination	in	the	Ohio	River	resulting	from historical	activities	and	operations	at	the	Natrium,	W.Va.	facility.

In	management's	opinion,	the	Company	operates	in	an	environmentally sound	manner,	is	well	positioned,	relative	to	environmental	matters,	within	the industries	in	which	it	operates	and	the	outcome	of	these	environmental contingencies	will	not	have	a	material	adverse	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.	See Note	15,	"Commitments	and	Contingent	Liabilities,"	under	Item	8	of	this	Form 10-K	for	additional	information	related	to	environmental	matters	and	our	accrued liability	for	estimated	environmental	remediation	costs.

Public	and	governmental	concerns	related	to	climate	change	continue	to grow,	leading	to	efforts	to	limit	the	greenhouse	gas	("GHG")	emissions	believed to	be	responsible.	While	PPG	has	operations	in	many	countries,	a	substantial portion	of	PPG's	GHG	emissions	are	generated	by	locations	in	the	U.S.,	where considerable	legislative	and	regulatory	activity	has	been	taking	place.

As	a	result	of	a	U.S.	Supreme	Court	ruling	in	April	2007	declaring	that GHGs	are	air	pollutants	covered	by	the	Clean	Air	Act,	USEPA	proposed	and later	finalized	in	December	2009	an	Endangerment	Finding	that	GHG	emissions "threaten	public	health	and	welfare	of	current	and	future	generations".	Based	on the	Endangerment	Finding,	the	USEPA	proposed

then	finalized	new,	"tailored"	thresholds	for	GHG	emissions	that	define	when Clean	Air	Act	New	Source	Review	and	Title	V	operating	permit	programs would	be	required	for	new	or	existing	industrial	facilities.	These	rules	impose new	permit	requirements	on	PPG	facilities	emitting	more	than	100,000	tons	of GHGs	per	year	as	well	as	on	new	equipment	installations	that	will	emit	more than	75,000	tons	of	GHGs	per	year.	The	U.S.	federal	government	has	committed to	a	17%	economy-wide	emission	reduction	target	below	2005	levels	by	2020. These	rules	were	upheld	by	a	Federal	Appeals	court	in	2012	in	a	challenge	filed by	industry.	To	date,	no	PPG	facility	in	the	U.S.	has	triggered	either	the	100,000 ton	or	75,000	ton	per	year	permit	requirement	thresholds.	PPG	has,	and	will continue	to,	annually	report	our	global	GHG	emissions	to	the	voluntary	Carbon Disclosure	project.

Energy	prices	and	availability	of	supply	continue	to	be	a	concern	for	major energy	users.	Since	PPG's	GHG	emissions	arise	principally	from	combustion	of fossil	fuels,	PPG	has	for	some	time	recognized	the	desirability	of	reducing energy	consumption	and	GHG	generation.	In	2007,	PPG	announced	corporate targets,	namely	(i)	a	reduction	in	energy	intensity	by	25%	from	2006	to	2016	and (ii)	a	10%	absolute	reduction	in	GHG	emissions	from	2006	to	2011.	Effective energy	management	practices	led	to	a	10%	reduction	in	PPG's	GHG	emissions	at the	end	of	2011.	PPG	estimates	a	50%	to	70%	reduction	in	its	total	annual energy	consumption	and	GHG	emissions	as	a	result	of	the	separation	of	its commodity	chemicals	business	on	January	28,	2013.	New	energy	intensity	and GHG	emissions	intensity	targets	have	been	established	to	better	reflect	what	will be	possible	given	the	portfolio	of	businesses	that	remain	with	PPG.	With	the	base year	of	2012	and	a	termination	year	of	2020,	the	company	has	established several	new	key	sustainability	metrics;	1)	an	annual	energy	intensity	reduction target	of	1.5%,	2)	an	annual	GHG	emission	intensity	reduction	of	1.5%,	3)	a hazardous	waste	to	landfill	reduction	of	20%,	4)	a	non-hazardous	waste	to landfill	reduction	of	10%,	5)	a	10%	reduction	in	reportable	spills,	6)	a	5% reduction	in	serious	employee	injuries,	and	7)	a	target	of	30%	of	product	sales from	sustainable	technology.	These	new	sustainability	goals	represent opportunities	to	reduce	costs,	improve	operational	efficiencies	and	support customer	needs.

PPG	participates	in	the	U.S.	Department	of	Energy	("DOE")	Save	Energy Now	LEADER	Program	reinforcing	the	company's	voluntary	efforts	to significantly	reduce	its	industrial	energy	intensity.	In	September	2011,	the	DOE changed	its	approach	to	energy	efficiency	in	the	industrial	sector	and	initiated	the Better	Buildings,	Better	Plants	program.	PPG	is	currently	participating	in	this new	program,	which	sets	energy	savings	targets	and	provides	a	suite	of educational,	training,	and	technical	resources	to	help	meet	those	targets. Recognizing	the	continuing	importance	of	this	matter,	PPG	has	a	senior management	group	with	a	mandate	to	guide	the	Company's	progress	in	this	area.

In	December	2012,	after	lengthy	challenges	and	re-proposals,	the	USEPA issued	its	final	Clean	Air	Act	emissions	standards	for	large	and	small	boilers	and incinerators	that	burn	fossil	fuels	known	as	the	Boiler	Maximum	Achievable Control	Technology	("Boiler	MACT")	regulations.	These	regulations

are	aimed	at	controlling	emissions	of	air	toxics	and	will	regulate	emissions	of particulate	matter,	carbon	monoxide,	mercury,	dioxin	and	hydrogen	chloride from	boilers,	requiring	that	covered	facilities	achieve	compliance	within	three years.	There	are	13	PPG	facilities	that	are	subject	to	these	regulations.	The facility	most	impacted	by	these	regulations	is	the	115	megawatt	coal	fired	power plant	at	the	Natrium,	W.	Va.	chlor-alkali	facility	that	was	part	of	the	commodity chemicals	business	that	was	separated	as	of	January	28,	2013.	The	other	12 facilities	have	natural	gas-fired	boilers	which	are	subject	to	minimal	regulatory oversight	in	the	final	rule,	requiring	only	routine	and	reasonable	maintenance and	recordkeeping	and	need	no	add-on	pollution	control	equipment.	Facilities must	achieve	compliance	with	these	regulations	by	early	2016.	The	cost	impact for	PPG's	remaining	affected	facilities	is	not	expected	to	be	significant.

PPG's	public	disclosure	on	energy	security	and	climate	change	can	be viewed	in	our	Sustainability	Report	at	www.ppg.com/sustainability	or	at	the Carbon	Disclosure	Project	www.cdproject.net.

# Available	Information

The	Company's	website	address	is	www.ppg.com.	The	Company	posts,	and shareholders	may	access	without	charge,	the	Company's	recent	filings	and	any amendments	thereto	of	its	annual	reports	on	Form	10-K,	quarterly	reports	on Form	10-Q	and	its	proxy	statements	as	soon	as	reasonably	practicable	after	such reports	are	filed	with	the	Securities	and	Exchange	Commission	("SEC").	The Company	also	posts	all	financial	press	releases,	including	earnings	releases,	to its	website.	All	other	reports	filed	or	furnished	to	the	SEC,	including	reports	on Form	8-K,	are	available	via	direct	link	on	PPG's	website	to	the	SEC's	website, www.sec.gov.	Reference	to	the	Company's	and	SEC's	websites	herein	does	not incorporate	by	reference	any	information	contained	on	those	websites	and	such information	should	not	be	considered	part	of	this	Form	10-K.

# Item	1A.	Risk	Factors

As	a	global	manufacturer	of	coatings,	optical	and	specialty	materials	and glass	products,	we	operate	in	a	business	environment	that	includes	risks.	These risks	are	not	unlike	the	risks	we	have	faced	in	the	recent	past	nor	are	they	unlike risks	faced	by	our	competitors.	Each	of	the	risks	described	in	this	section	could adversely	affect	our	operating	results,	financial	position	and	liquidity.	While	the factors	listed	here	are	considered	to	be	the	more	significant	factors,	no	such	list should	be	considered	to	be	a	complete	statement	of	all	potential	risks	and uncertainties.	Unlisted	factors	may	present	significant	additional	obstacles	which may	adversely	affect	our	businesses	and	our	results	of	operations.

# Increases	in	prices	and	declines	in	the	availability	of	raw	materials	could negatively	impact	our	financial	results.

Our	financial	results	are	significantly	affected	by	the	cost	of	raw	materials. Coatings	raw	materials	both	organic,	primarily	petroleum	based,	materials	and inorganic	materials,	including	titanium	dioxide,	generally	comprise	between	70- to-80%	of	cost	of	goods	sold	in	most	coatings	formulations	and	represent	PPG's single	largest	production	cost	component.	PPG	input	prices	inflated	further	in	the first	half	of	2012	continuing	the	trend	of	2010	and	2011,	and	then,	in	the	second half	of	the	year,	moderated	modestly	from	the	year's	peak	levels.	The	largest inflationary	impact	related	to	the	cost	of	titanium	dioxide	pigments,	with	year- over-year	reductions	in	the	costs	for	various	petrochemical-based	materials countering	those	increases.	Raw	material	costs	for	our	coatings	businesses increased	nearly	$725	million	due	to	inflation	during	the	three	year	period	ended December	31,	2012.	The	inflation	rate	for	2012	was	low	single-digit percentages.

We	also	import	raw	materials	and	intermediates,	particularly	for	use	at	our manufacturing	facilities	in	the	emerging	regions	of	the	world.	In	most	cases, those	imports	are	priced	in	the	currency	of	the	supplier	and,	therefore,	if	that currency	strengthens	against	the	currency	of	our	manufacturing	facility,	our margins	are	at	risk	of	being	lowered.

Most	of	the	raw	materials	used	in	production	are	purchased	from	outside sources,	and	the	Company	has	made,	and	plans	to	continue	to	make,	supply arrangements	to	meet	the	planned	operating	requirements	for	the	future.	Supply of	critical	raw	materials	is	managed	by	establishing	contracts,	procuring	from multiple	sources,	and	identifying	alternative	materials	or	technology	whenever possible.	The	Company	is	continuing	its	aggressive	sourcing	initiatives	to support	its	continuous	efforts	to	find	the	lowest	raw	material	costs.	These initiatives	include	reformulation	of	our	products	using	both	petroleum-derived and	bio-based	materials	as	part	of	a	product	renewal	strategy,	qualifying multiple	and	local	sources	of	supply,	including	suppliers	from	Asia	and	other lower	cost	regions	of	the	world,	and	strategic	initiatives	with	multiple	global suppliers	to	secure	and	enhance	PPG's	supply	of	titanium	dioxide	and	other materials.

An	inability	to	obtain	critical	raw	materials	would	adversely	impact	our ability	to	produce	products.	Increases	in	the	cost	of	raw	materials	may	have	an adverse	effect	on	our	earnings	or	cash	flow	in	the	event	we	are	unable	to	offset these	higher	costs	in	a	timely	manner.

# The	pace	of	economic	growth	and	level	of	uncertainty	could	have	a	negative impact	on	our	results	of	operations	and	cash	flows.

During	2010,	the	global	economy	began	to	mend	from	the	economic downturn	of	2008	and	2009;	however,	the	pace	of	recovery	was	uneven. Beginning	in	2011,	overall	activity	levels	in	most	major	global	economies	and	in most	end-use	markets	exhibited	year-over-year	growth.	During	2012,	overall activity	levels	varied	greatly	among	the	major	global	economies,	with	similar differences	experienced	among	the	various	coatings	end-use	markets.	Because	of this	variation,	overall	aggregate	PPG	global	volume	grew	modestly	for	the	year, with	some	deviation	from	quarter-to-quarter.	Entering

2013,	the	disparity	of	economic	activity	by	region	and	end	use	market	is anticipated	to	continue.	Of	the	major	regions,	growth	prospects	remain	in	North America,	bolstered	by	further	anticipated	recovery	in	construction	activity	and continued	strength	in	various	industrial	markets,	including	automotive production	and	increased	investment	related	to	the	energy	and	chemical industries.	However,	concerns	over	fiscal	uncertainty	and	unemployment	temper these	prospects	somewhat.	The	2013	growth	rate	in	emerging	regions	is	expected to	remain	mixed,	but	improve	somewhat	based	on	increases	in	local consumption,	less	inventory	destocking	associated	with	lower	exports,	and government	stimulus	actions.	The	Eurozone	is	expected	to	remain	subdued	with very	few	end-use	markets	expected	to	deliver	growth,	and	downside	risk	to regional	economic	conditions	remains.

PPG	provides	products	and	services	to	a	variety	of	end-use	markets	and	in many	geographies.	This	broad	end-use	market	exposure	and	expanded geographic	presence	lessens	the	significance	of	any	significant	or	rapid	decrease in	activity	levels;	nonetheless,	lower	demand	levels	may	result	in	lower	sales, which	would	result	in	reduced	earnings	and	cash	flows.

# We	are	subject	to	existing	and	evolving	standards	relating	to	the	protection	of the	environment.

Environmental	laws	and	regulations	control,	among	other	things,	the discharge	of	pollutants	into	the	air	and	water,	the	handling,	use,	treatment, storage	and	clean-up	of	hazardous	and	non-hazardous	wastes,	the	investigation and	remediation	of	soil	and	groundwater	affected	by	hazardous	substances,	and regulate	various	health	and	safety	matters.	The	environmental	laws	and regulations	we	are	subject	to,	including	those	in	the	United	States	as	well	as	in other	countries	in	which	we	operate,	impose	liability	for	the	costs	of,	and damages	resulting	from,	cleaning	up	current	sites,	past	spills,	disposals	and	other releases	of	hazardous	substances.	Violations	of	these	laws	and	regulations	can also	result	in	fines	and	penalties.	Future	environmental	laws	and	regulations	may require	substantial	capital	expenditures	or	may	require	or	cause	us	to	modify	or curtail	our	operations,	which	may	have	a	material	adverse	impact	on	our business,	financial	condition	and	results	of	operations.

As	described	in	Note	15,	"Commitments	and	Contingent	Liabilities,"	under Item	8	of	this	Form	10-K,	we	are	currently	undertaking	environmental remediation	activities	at	a	number	of	our	facilities	and	properties,	the	cost	of which	is	substantial.	We	have	accrued	a	$332	million	liability	for	estimated environmental	remediation	costs	at	December	31,	2012.	Our	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.	As	such,	in	addition	to the	amounts	currently	reserved,	we	may	be	subject	to	loss	contingencies	related to	environmental	matters	estimated	to	be	as	much	as	$100	million	to	$275 million.	Such	unreserved	losses	are	reasonably	possible	but	are	not	currently considered	to	be	probable	of	occurrence.

# We	are	involved	in	a	number	of	lawsuits	and	claims,	and	we	may	be	involved in	future	lawsuits	and	claims,	in	which	substantial	monetary	damages	are sought.

PPG	is	involved	in	a	number	of	lawsuits	and	claims,	both	actual	and potential	in	which	substantial	monetary	damages	are	sought.	Those	lawsuits	and claims	relate	to	contract,	patent,	environmental,	product	liability,	antitrust	and other	matters	arising	out	of	the	conduct	of	PPG's	current	and	past	business activities.	Any	such	claims,	whether	with	or	without	merit,	could	be	time consuming,	expensive	to	defend	and	could	divert	management's	attention	and resources.	We	maintain	insurance	against	some,	but	not	all,	of	these	potential claims,	and	the	levels	of	insurance	we	do	maintain	may	not	be	adequate	to	fully cover	any	and	all	losses.	We	believe	that,	in	the	aggregate,	the	outcome	of	all current	lawsuits	and	claims	involving	PPG,	including	asbestos-related	claims	in the	event	the	settlement	described	in	Note	15,	"Commitments	and	Contingent Liabilities"	under	Item	8	of	this	Form	10-K	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.	Nonetheless,	the	results of	any	future	litigation	or	claims	are	inherently	unpredictable,	but	such	outcomes could	have	a	material	adverse	effect	on	our	results	of	operations,	cash	flow	or financial	condition.

# For	over	30	years,	we	have	been	a	defendant	in	lawsuits	involving	claims alleging	personal	injury	from	exposure	to	asbestos.

Most	of	our	potential	exposure	relates	to	allegations	by	plaintiffs	that	PPG should	be	liable	for	injuries	involving	asbestos	containing	thermal	insulation products	manufactured	by	Pittsburgh	Corning	Corporation	("PC").	PPG	is	a 50%	shareholder	of	PC.	Although	we	have	entered	into	a	settlement	arrangement with	several	parties	concerning	these	asbestos	claims	as	discussed	in	Note	15, "Commitments	and	Contingent	Liabilities,"	under	Item	8	of	this	Form	10-K,	the arrangement	remains	subject	to	court	proceedings	and,	if	not	approved,	the outcome	could	be	material	to	the	results	of	operations	of	any	particular	period.

# We	are	subject	to	a	variety	of	complex	U.S.	and	non-U.S.	laws	and	regulations which	could	increase	our	compliance	costs.

We	are	subject	to	a	wide	variety	of	complex	U.S.	and	non-U.S.	laws	and regulations,	and	legal	compliance	risks,	including	securities	laws,	tax	laws, environmental	laws,	employment	and	pension-related	laws,	competition	laws, U.S.	and	foreign	export	and	trading	laws,	and	laws	governing	improper	business practices,	including	bribery.	We	are	affected	by	new	laws	and	regulations	and changes	to	existing	laws	and	regulations,	including	interpretations	by	courts	and regulators.	These	laws	and	regulations	effectively	expand	our	compliance obligations	and	potential	enforcement	actions	by	governmental	authorities	or litigation	related	to	them.

New	laws	and	regulations	or	changes	in	existing	laws	or	regulations	or	their interpretation	could	increase	our	compliance	costs.	For	example,	regulations concerning	the	composition,	use	and	transport	of	chemical	products	continue	to evolve.	Developments	concerning	these	regulations	could

potentially	impact	(i)	the	availability	or	viability	of	some	of	the	raw	materials we	use	in	our	product	formulations	and/or	(ii)	our	ability	to	supply	certain products	to	some	customers	or	markets.	Import/export	regulations	also	continue to	evolve	and	could	result	in	increased	compliance	costs,	slower	product movements	or	additional	complexity	in	our	supply	chains.

# Our	international	operations	expose	us	to	additional	risks	and	uncertainties that	could	affect	our	financial	results.

PPG	has	a	significant	investment	in	non-U.S.	operations.	This	broad geographic	footprint	serves	to	lessen	the	significance	of	economic	impacts occurring	in	any	one	region.	Notwithstanding	the	benefits	of	geographic diversification,	our	ability	to	achieve	and	maintain	profitable	growth	in international	markets	is	subject	to	risks	related	to	the	differing	legal,	political, social	and	regulatory	requirements	and	economic	conditions	of	many	countries. As	a	result	of	our	expansion	outside	the	U.S.,	we	are	subject	to	certain	inherent risks,	including	political	and	economic	uncertainty,	inflation	rates,	exchange rates,	trade	protection	measures,	local	labor	conditions	and	laws,	restrictions	on foreign	investments	and	repatriation	of	earnings,	and	weak	intellectual	property protection.	Our	percentage	of	sales	generated	in	2012	by	products	sold	outside the	U.S.	was	approximately	57%.

# Fluctuations	in	foreign	currency	exchange	rates	could	affect	our	financial results.

We	earn	revenues,	pay	expenses,	own	assets	and	incur	liabilities	in countries	using	currencies	other	than	the	U.S.	dollar.	Because	our	consolidated financial	statements	are	presented	in	U.S.	dollars,	we	must	translate	revenues	and expenses	into	U.S.	dollars	at	the	average	exchange	rate	during	each	reporting period,	as	well	as	assets	and	liabilities	into	U.S.	dollars	at	exchange	rates	in effect	at	the	end	of	each	reporting	period.	Therefore,	increases	or	decreases	in the	value	of	the	U.S.	dollar	against	other	major	currencies	will	affect	our	net revenues,	operating	income	and	the	value	of	balance	sheet	items	denominated	in foreign	currencies.	We	use	derivative	financial	instruments	to	reduce	our	net exposure	to	currency	exchange	rate	fluctuations	related	to	foreign	currency transactions.	However,	fluctuations	in	foreign	currency	exchange	rates, particularly	the	strengthening	of	the	U.S.	dollar	against	major	currencies,	could materially	affect	our	financial	results.

# As	a	producer	of	coatings	and	specialty	materials,	we	manufacture	and transport	certain	materials	that	are	inherently	hazardous	due	to	their	toxic nature.

We	have	significant	experience	in	handling	these	materials	and	take precautions	to	handle	and	transport	them	in	a	safe	manner.	However,	these materials,	if	mishandled	or	released	into	the	environment,	could	cause	substantial property	damage	or	personal	injuries	resulting	in	significant	legal	claims	against us.	The	separation	of	the	commodity	chemicals	business	on	January	28,	2013, significantly	reduces	the	volumes	of	these	materials	that	we	handle	and transport.

# Business	disruptions	could	have	a	negative	impact	on	our	results	of	operations and	financial	condition.

Unexpected	events,	including	supply	disruptions,	temporary	plant	and/or power	outages,	work	stoppages,	natural	disasters	and	severe	weather	events, computer	system	disruptions,	fires,	war	or	terrorist	activities,	could	increase	the

cost	of	doing	business	or	otherwise	harm	the	operations	of	PPG,	our	customers and	our	suppliers.	It	is	not	possible	for	us	to	predict	the	occurrence	or consequence	of	any	such	events.	However,	such	events	could	reduce	demand	for our	products	or	make	it	difficult	or	impossible	for	us	to	receive	raw	materials from	suppliers	or	to	deliver	products	to	customers.

# We	may	have	difficulty	integrating	acquired	businesses.

In	the	past	15	years,	PPG	has	completed	over	50	acquisitions	to	further	the growth	of	the	Company,	and	we	will	likely	acquire	additional	businesses	and enter	into	additional	joint	ventures	in	the	future	as	part	of	our	growth	strategy.	Of particular	note,	PPG	agreed	in	December	2012	to	purchase	the	North	American architectural	coatings	business	of	Akzo	Nobel	N.V.	Upon	closing,	this acquisition	will	add	approximately	600	stores	and	eight	manufacturing	facilities to	PPG's	North	American	coatings	operations.	Growth	through	acquisitions	and the	formation	of	joint	ventures	involve	risks,	including:

•difficulties	in	assimilating	acquired	companies	and	products	into	our existing	business;

•delays	in	realizing	the	benefits	from	the	acquired	companies	or products;

•diversion	of	our	management's	time	and	attention	from	other	business concerns;

•difficulties	due	to	lack	of	or	limited	prior	experience	in	any	new	markets we	may	enter;

•unforeseen	claims	and	liabilities,	including	unexpected	environmental exposures	or	product	liability;

•unexpected	losses	of	customers	or	suppliers	of	the	acquired	or	existing business;

•difficulty	in	conforming	the	acquired	business'	standards,	processes,

procedures	and	controls	to	those	of	our	operations;	and

•difficulties	in	retaining	key	employees	of	the	acquired	businesses.

Our	failure	to	address	these	risks	or	other	problems	encountered	in connection	with	our	past	or	future	acquisitions	and	joint	ventures	could	cause	us to	fail	to	realize	the	anticipated	benefits	of	such	acquisitions	or	joint	ventures	and could	adversely	affect	our	results	of	operations,	cash	flow	or	financial	condition.

# Item	1B.	Unresolved	Staff	Comments

None.

# Item	2.	Properties

The	Company's	corporate	headquarters	is	located	in	Pittsburgh,	Pa.	The Company's	manufacturing	facilities,	sales	offices,	research	and	development centers	and	distribution	centers	are	located	throughout	the	world.	As	of	February 21,	2013,	the	Company	operated	124	manufacturing	facilities	in	44	countries, and	the	principal	manufacturing	and	distribution	facilities	were	as	follows:

Including	the	principal	manufacturing	facilities	noted	above,	the	Company has	manufacturing	facilities	in	the	following	geographic	areas:

The	Company's	principal	research	and	development	centers	are	located	in Allison	Park,	Pa.;	Harmarville,	Pa.;	and	Monroeville,	Pa.

The	Company's	headquarters	and	substantially	all	company-owned	paint stores	are	located	in	facilities	that	are	leased	while	the	Company's	other	facilities are	generally	owned.	Our	facilities	are	considered	to	be	suitable	and	adequate	for the	purposes	for	which	they	are	intended	and	overall	have	sufficient	capacity	to conduct	business	in	the	upcoming	year.

# Item	3.	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	contract,	patent,	environmental,	product liability,	antitrust	and	other	matters	arising	out	of	the	conduct	of	PPG's	current and	past	business	activities.	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	results	of	any	future	litigation	and	the	above	lawsuits	and	claims	are 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.

For	over	30	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 asbestos	settlement	arrangement,	see	Note	15,	"Commitments	and	Contingent Liabilities"	under	Item	8	of	this	Form	10-K.

In	the	past,	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.

PPG	received	a	Consolidated	Compliance	Order	and	Notice	of	Proposed Penalty	("CO/NOPP")	from	the	Louisiana	Department	of	Environmental	Quality ("LDEQ")	in	February	2006	alleging	violation	of	various	requirements	of	its Lake	Charles,	La.	facility's	air	permit	based	largely	upon	permit	deviations	self- reported	by	PPG.	The	CO/NOPP	did	not	contain	a	proposed	civil	penalty.	PPG filed	a	request	for	hearing	and	has	engaged	LDEQ	in	settlement	discussions. Since	2006,	PPG	has	held	discussions	with	LDEQ	to	try	to	resolve	the CO/NOPP.	In	late	2012,	PPG	increased	the	offer	to	settle	the	CO/NOPP	for	a total	of	$400,000,	plus	the	performance	of	two	Beneficial	Environmental Projects	with	an	expenditure	for	those	projects	to	be	at	least	$220,000.	This increased	offer	was	accepted	by	the	LDEQ	in	the	fourth	quarter	of	2012.	All known	and	currently	reserved	environmental	liabilities	associated	with	the commodity	chemicals	business	were	transferred	with	the	separation	of	this business	from	PPG	and	subsequent	merger	of	the	subsidiary	holding	the	PPG commodity	chemicals	business	with	a	subsidiary	of	Georgia	Gulf.	The	newly merged	company,	Axiall,	will	assume	responsibility	for	these	liabilities.

# Executive	Officers	of	the	Company

Set	forth	below	is	information	related	to	the	Company's	executive	officers as	of	February	21,	2013.

Cynthia	A.	Niekamp	(f) 53 Senior	Vice	President,	Automotive	Coatings	since August	2010

(a) In	February	2013,	Mr.	McGarry	became	responsible	for	leading	the	Architectural Coatings	EMEA	(Europe,	Middle	East	and	Africa)	segment,	the	architectural	coatings Americas	and	Asia	Pacific	businesses,	the	flat	glass	business	and	the	Europe,	Middle	East and	Africa	(EMEA)	region.	His	responsibilities	will	continue	to	include	the	global Information	Technology,	Environmental	Health	and	Safety	and	Corporate	Quality functions.	From	September	2012	until	February	2013,	he	was	responsible	for	the	global aerospace	and	automotive	refinish	businesses.	Mr.	McGarry	led	the	Commodity Chemicals	segment	from	July	2008	until	the	separation	of	that	business	on	January	28, 2013.	He	was	appointed	Executive	Vice	President	in	September	2012	and	held	the position	of	Senior	Vice	President,	Commodity	Chemicals	from	July	2008	until	August 2012.	Mr.	McGarry	previously	served	as	Vice	President,	coatings,	Europe	and	Managing Director,	PPG	Europe	from	July	2006	through	June	2008.

(b) Mr.	Sekmakas	is	responsible	for	leading	the	industrial	coatings,	packaging	coatings	and protective	and	marine	coatings	businesses.	In	February	2013,	he	became	responsible	for the	fiber	glass	business,	the	Asia	Pacific	region	and	the	Purchasing	and	Logistics function.	From	September	2012	until	February	2013,	he	was	responsible	for	the	EMEA region.	He	was	appointed	Executive	Vice	President	in	September	2012.	Previously,	he held	the	following	leadership	positions:	Senior	Vice	President,	industrial	coatings	and President,	Europe	from	September	2011	until	August	2012;	Senior	Vice	President, industrial	coatings	and	President,	Asia	Pacific	coatings	from	August	2010	until September	2011;	Vice	President	industrial	coatings	and	President,	Asia	Pacific	coatings from	March	2010	until	August	2010;	President	PPG	Asia	Pacific	from	July	2008	until March	2010;	and	Vice	President	and	Managing	Director	Asia	Pacific	from	July	2006 until	July	2008.

(c) Mr.	Bost	held	the	position	of	Vice	President	and	Associate	General	Counsel	from	July 2006	through	June	2010.

(d) Mr.	Navikas	held	the	position	of	Vice	President	and	Controller	from	March	2000	until June	2011.

(e) Mr.	Elias	held	the	position	of	Vice	President,	Optical	Products	from	April	2000	until June	2008.

(f) Ms.	Niekamp	is	responsible	for	the	automotive	OEM	coatings	business	and	the	Latin America	regions.	Ms.	Niekamp	was	appointed	Vice	President,	Automotive	Coatings	in January	2009	when	she	joined	PPG	from	BorgWarner,	Inc.	She	previously	served	as President	of	BorgWarner's	TorqTransfer	Systems	business	from	2004	until	2008.

# Item	4.	Mine	Safety	Disclosures

Not	Applicable.

# Part	II

# Item	5.	Market	for	the	Registrant's	Common	Equity,	Related

# Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities

The	information	required	by	Item	5	regarding	market	information,	including stock	exchange	listings	and	quarterly	stock	market	prices,	dividends	and	holders of	common	stock	is	included	in	Exhibit	13.1	filed	with	this	Form	10-K	and	is incorporated	herein	by	reference.	This	information	is	also	included	in	the	PPG Shareholder	Information	on	page	3	of	the	Annual	Report	to	shareholders.

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").	Common	stock equivalents	are	hypothetical	shares	of	common	stock	having	a	value	on	any	given date	equal	to	the	value	of	a	share	of	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	this plan	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	plan.

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).	The	directors,	as	a	group,	were	credited	with	30,491;	20,575; and	15,647	common	stock	equivalents	in	2012,	2011	and	2010,	respectively, under	this	plan.	The	values	of	the	common	stock	equivalents,	when	credited, ranged	from	$85.12	to	$124.55	in	2012,	$68.68	to	$94.64	in	2011	and	$60.36	to $80.90	in	2010.

# Issuer	Purchases	of	Equity	Securities

No	shares	were	repurchased	in	the	quarter	ended	December	31,	2012	under the	current	10	million	share	repurchase	program	approved	in	October	2011.	The maximum	number	of	shares	that	may	yet	be	purchased	under	this	program	is 7,988,694	shares.	This	repurchase	program	has	no	expiration	date.

No	shares	were	withheld	or	certified	in	satisfaction	of	the	exercise	price and/or	tax	withholding	obligation	by	holders	of	employee	stock	options	who exercised	options	granted	under	the	Company's	equity	compensation	plans	in	the fourth	quarter	of	2012.

# Item	6.	Selected	Financial	Data

The	information	required	by	Item	6	regarding	the	selected	financial	data	for the	five	years	ended	December	31,	2012	is	included	in	Exhibit	13.2	filed	with	this Form	10-K	and	is	incorporated	herein	by	reference.	This	information	is	also reported	in	the	Five-Year	Digest	on	page	86	of	the	Annual	Report	to	shareholders.

# Item	7.	Management's	Discussion	and	Analysis	of

# Financial	Condition	and	Results	of	Operations

# Separation	of	PPG's	commodity	chemicals	business	and	merger	of	that	business with	Georgia	Gulf	Corporation	and	agreement	to	acquire	the	North	American architectural	coatings	business	of	Akzo	Nobel	N.V.

Recently	PPG	took	two	major	steps	in	its	strategic	transformation	into	a	more focused	coatings	and	specialty	materials	company.

In	addition,	in	December	2012	PPG	entered	into	an	agreement	to	acquire	the North	American	architectural	coatings	business	of	Akzo	Nobel	N.V.	in	a	deal valued	at	$1.05	billion.	The	acquisition,	which	is	currently	expected	to	close	in	the first	half	of	2013,	includes	the	acquisition	of	a	number	of	leading	brands	and approximately	600	paint	stores	in	the	United	States,	Canada	and	the	Caribbean. With	regard	to	this	pending	acquisition,	the	statutory	waiting	period	prescribed	by the	Hart-Scott-Rodino	Antitrust	Improvements	Act	of	1976,	as	amended,	expired on	February	1,	2013.		Canadian	competition	clearance	and	Investment	Canada	Act approval	remain	pending.

# Performance	in	2012	compared	with	2011

# Performance	Overview

Net	sales	in	2012	totaled	$15,200	million	compared	to	$14,885	million	in 2011,	an	increase	of	2%.	Higher	selling	prices	increased	sales	2%,	higher	volumes increased	sales	1%	and	acquisitions	contributed	2%	to	sales.	These	increases	were partially	offset	by	3%	from	negative	foreign	currency	impact.	Sales	volumes varied	significantly	by	region,	with	volume	growth	in	North	America	of	nearly	5% and	modest	growth	in	emerging	regions.	European	volumes	declined	4%	versus the	prior	year	period	with	every	coatings	business	except	aerospace	experiencing sluggish	end-use	market	conditions.	Improved	selling	prices	were	achieved	in	each of	the	three	coatings	segments	and	Optical	and	Specialty	Materials.	In	our coatings	segments,	higher	selling	prices	were	in	response	to	persistent	raw	material and	other	cost	inflation.	The	unfavorable	currency	impact	was	primarily	driven	by the	U.S.	dollar	strengthening	against	the	Euro	and	Latin	American	currencies.

Increased	demand	was	driven	by	stronger	industrial	production	activity,	which aided	many	of	our	businesses.	The	global	industrial	recovery	varied	by	region	and end	use	market	in	2012.	North	American	growth	was	led	by	strength	in	the automotive	OEM,	aerospace	and	architectural	coatings	businesses.	Automotive OEM	coatings	volumes	were	up	year	over	year	outpacing	growth	in	industry demand.	Aerospace	coatings	end-use	market	growth	has	remained	strong.	U.S. architectural	coatings	growth	has	been	supported	by

improvement	in	construction	spending,	as	U.S.	residential	construction	improved throughout	the	year	following	several	anemic	years.	Mild	weather	early	in	2012 also	aided	U.S.	architectural	coatings	volumes.	Sluggish	end-use	market conditions	in	Europe	were	largely	offset	by	incremental	sales	from	acquired businesses	in	the	region.	Growth	rates	in	Asia	in	2012	were	reduced	by	the	low level	of	marine	original-equipment	new	ship	builds;	however,	aiding	growth	in Asia	was	strength	in	China	auto	production	and	the	packaging	business	as	well	as the	absence	of	the	Thailand	floods,	which	particularly	impacted	optical	products	in late	2011.	Higher	selling	prices	in	every	coatings	reportable	segment	and	the Optical	and	Specialty	Materials	segment	in	2012	were	somewhat	offset	by	pricing declines	in	Commodity	Chemicals	and	Glass	reportable	segments.	In	our	coatings segments,	prices	were	increased	in	response	to	persistent	raw	material	cost inflation.	The	Commodity	Chemicals	segment's	pricing	declines	reflect	lower chlorine	pricing,	offset	partially	by	higher	caustic	pricing	reflecting	solid	demand and	low	caustic	inventory	levels	throughout	the	year.	The	Glass	segment's	pricing was	down,	reflecting	weaker	global	fiber	glass	demand.

Cost	of	sales,	exclusive	of	depreciation	and	amortization,	decreased	by	$12 million	in	2012	to	$9,069	million	compared	to	$9,081	million	for	2011.	The decrease	was	due	to	the	impact	of	currency	translation	and	lower	manufacturing costs.	These	decreases	were	largely	offset	by	the	cost	of	sales	of	acquired businesses,	the	cost	of	sales	associated	with	the	sales	volume	growth	and	the negative	impact	of	inflation.	Cost	of	sales	as	a	percentage	of	sales	for	2012	was 59.7%	down	from	61.0%	in	2011.	The	pricing	for	the	Company's	input	costs varied,	as	coatings	input	costs	increased;	however,	lower	natural	gas	and	ethylene pricing	aided	our	Commodity	Chemicals	segment.

Selling,	general	and	administrative	expenses	increased	by	$101	million	in 2012	to	$3,335	million	as	compared	to	2011.	The	increase	was	due	to	increases from	acquisitions,	overhead	inflation	and	higher	costs	to	support	the	sales	volume growth	offset	partially	by	the	reduction	in	costs	due	to	the	impact	of	currency translation	and	the	benefit	of	our	restructuring	actions.	These	expenses	remained relatively	flat	as	a	percent	of	sales	at	21.9%	in	2012	and	21.7%	in	2011	reflecting the	benefits	of	our	continuing	effort	to	aggressively	manage	our	costs	even	as	our sales	volume	increases.

The	business	restructuring	charge	of	$208	million	in	2012	represents	the	costs associated	with	a	restructuring	plan	focused	on	further	reducing	PPG's	global	cost structure.	The	actions	included	in	the	restructuring	plan	delivered	pretax	cost savings	in	the	second	half	of	2012	of	approximately	$50	million	and	an	additional savings	of	$80	million	expected	in	2013.	The	savings	are	expected	to	grow	to	an annual	run	rate	of	about	$140	million	following	completion	of	these	actions	in 2013.

Other	charges	increased	to	$232	million	in	2012	as	compared	to	$73	million in	2011,	due	largely	to	the	$159	million	environmental	remediation	charge recorded	in	the	first	quarter	of	2012	related	primarily	to	costs	at	a	former chromium	manufacturing	plant	and	associated	sites	in	Jersey	City,	New	Jersey.

Other	earnings	decreased	to	$149	million	in	2012	as	compared	to	$177	million in	2011.	This	decrease	was	primarily

due	to	$26	million	of	lower	equity	earnings,	primarily	from	our	Asian	fiber	glass joint	ventures,	reflecting	demand	decline	in	the	consumer	electronics	market.

The	effective	tax	rate	on	pretax	earnings	was	approximately	24%	in	2012	and 2011.	The	effective	tax	rate	for	the	year	ended	December	31,	2012	includes	tax benefits	of	$60	million	or	approximately	38%	on	the	$159	million	charge	for environmental	remediation	costs,	$45	million	or	approximately	21%	on	the	$208 million	business	restructuring	charge,	$2	million	or	approximately	29%	for expenses	of	$6	million	stemming	from	the	acquisition	of	Dyrup	A/S	in	Europe	and Colpisa	in	Latin	America,	and	$3	million	or	11%	on	certain	business	separation and	acquisition	related	costs	of	$26	million.	The	2011	rate	includes	a	benefit	of $12	million	resulting	from	a	favorable	tax	audit	settlement.	The	2011	rate	also includes	the	impact	of	the	non-taxable	bargain	purchase	gain	resulting	from	the Equa-Chlor	acquisition.	The	effective	tax	rate	on	the	remaining	pre-tax	earnings was	25%	in	2012	and	2011.

Diluted	earnings-per-share	for	2012	were	$6.06.	Excluding	the	charges related	to	business	restructuring	and	environmental	remediation,	acquisition- related	costs	and	the	costs	related	to	the	separation	and	merger	transaction, adjusted	diluted	earnings-per	share	for	2012	were	$7.94.	This	compares	to	the 2011	diluted	earnings-per-share	of	$6.87.	The	increase	in	diluted	earnings-per- share	resulted	primarily	from	higher	adjusted	income	before	income	taxes	and	a reduction	in	the	shares	outstanding	as	a	result	of	share	repurchases	in	the	second half	of	2011	and	first	quarter	of	2012.	Average	shares	used	to	calculate	earnings per	share	–	assuming	dilution	were	155.1	million	in	2012	and	159.3	million	in 2011.

# Regulation	G	Reconciliation	-	Results	from	Operations

PPG	Industries	believes	investors'	understanding	of	the	Company's	operating performance	is	enhanced	by	the	disclosure	of	income	before	income	taxes,	net income	and	earnings	per	diluted	share	adjusted	for	nonrecurring	charges.	PPG's management	considers	this	information	useful	in	providing	insight	into	the company's	ongoing	operating	performance	because	it	excludes	the	impact	of	items that	cannot	reasonably	be	expected	to	recur	on	an	ongoing	basis.	Income	before income	taxes,	net	income	and	earnings	per	diluted	share	adjusted	for	these	items are	not	recognized	financial	measures	determined	in	accordance	with	U.S. generally	accepted	accounting	principles	("GAAP")	and	should	not	be	considered a	substitute	for	income	before	income	taxes,	net	income	or	earnings	per	diluted share	or	other	financial	measures	as	computed	in	accordance	with	U.S.	GAAP.	In addition,	adjusted	income	before	income	taxes,	adjusted	net	income	and	adjusted earnings	per	diluted	share	may	not	be	comparable	to	similarly	titled	measures	as reported	by	other	companies.

Income	before	income	taxes	is	reconciled	to	adjusted	income	before	income taxes	below:

| Year-ended	December	31,	2012 | Income	Before |
| :--- | :--- |
| (Millions,\texcept\tper\tshare\tamounts) | Income\tTaxes |
| Income\tbefore\tincome\ttaxes | $1,402 |
| Income\tbefore\tincome\ttaxes\tincludes: |  |
| Pretax\tcharges\trelated\tto\tbusiness\trestructuring | 208 |
| Pretax\tcharges\trelated\tto\tenvironmental\tremediation | 159 |
| Pretax\tcharges\trelated\tto\tthe\tbusiness\tseparation-\tand\tacquisition-related\ncosts | 26 |
| Pretax\tcharges\trelated\tto\tthe\tacquisition\tof\tDyrup\tand\tColpisa | 6 |
| Adjusted\tincome\tbefore\tincome\ttaxes | $1,801 |

Net	income	(attributable	to	PPG)	and	earnings	per	share	–	assuming	dilution (attributable	to	PPG)	are	reconciled	to	adjusted	net	income	(attributable	to	PPG) and	adjusted	earnings	per	share	–	assuming	dilution	below:

| Year-ended	December	31,	2012 | Net	Income | Net	Income |
| :--- | :--- | :--- |
| \t\t(Millions,\texcept\tper\tshare\tamounts) | $EPS | $EPS |
| Net\tincome\t(attributable\tto\tPPG) | $941 | $6.06 |
| Net\tincome\t(attributable\tto\tPPG)\tincludes: |  |  |
| Charges\trelated\tto\tbusiness\trestructuring | 163 | 1.06 |
| Charges\trelated\tto\tenvironmental\tremediation | 99 | 0.64 |
| Charges\trelated\tto\tthe\tbusiness\tseparation-\tand\tacquisition-related\ncosts | 23 | 0.15 |
| Charges\trelated\tto\tthe\tacquisition\tof\tDyrup\tand\tColpisa | 4 | 0.03 |
| Adjusted\tnet\tincome | $1,230 | $7.94 |

# Results	of	Reportable	Business	Segments

|  | Net	sales |  | Segment	income | Segment	income |
| :--- | :--- | :--- | :--- | :--- |
| (Millions) | 2012 | 2011 | 2012 | 2011 |
| Performance\tCoatings | $4,752 | $4,626 | $744 | $673 |
| Industrial\tCoatings | 4,379 | 4,158 | 590 | 438 |
| Architectural\tCoatings\t–EMEA | 2,147 | 2,104 | 145 | 123 |
| Optical\tand\tSpecialty\tMaterials | 1,202 | 1,204 | 348 | 326 |
| Commodity\tChemicals | 1,688 | 1,732 | 372 | 370 |
| Glass | 1,032 | 1,061 | 63 | 97 |

For	Performance	Coatings,	2012	sales	were	$4.8	billion,	$126	million,	or	3%, higher	than	2011.	The	sales	increase	was	comprised	of	4%	due	to	price,	partially offset	by	a	2%	decline	due	to	the	impact	of	foreign	currency	translation.	Sales from	acquired	businesses	contributed	1%	to	growth.	Higher	pricing	was	achieved by	all	the	businesses	in	the	segment	reflecting	continuing	efforts	to	offset significant	inflationary	impacts	over	the	past	two	years.	Year-over-year	segment sales	volumes	were	nearly	flat	in	2012	with	aerospace	and	architectural	coatings business	volume	growth	being	offset	by	automotive	refinish	and	protective	and marine	coatings	business	volume	declines.	Sales	volume	in	the	aerospace	business continued	to	benefit	from	excellent	end-use	market	growth	despite	increasingly difficult	prior	year	comparable	periods.	U.S.	architectural	coatings	were	aided	by early	signs	of	a	construction	market	recovery	in	the	U.S.	and	mild	weather	early	in 2012,	offset	by	the	absence	of	elevated	sales	in	the	prior	year	from	the introduction	of	a	new

product	in	the	national	account	channel.	Volumes	declined	in	the	automotive refinish	coatings	business,	particularly	in	Europe,	and	in	the	protective	and	marine coatings	business	as	lower	marine	new	build	volume	was	somewhat	offset	by higher	volume	in	protective	coatings.	Segment	earnings	grew	to	$744	million,	a $71	million,	or	11%,	improvement	over	prior	year.	Earnings	improved	as	lower costs,	relating	to	benefits	from	PPG's	restructuring	and	other	cost	management actions,	coupled	with	the	effect	from	the	higher	sales	were	partly	offset	by inflation,	higher	selling	costs	and	the	negative	impact	of	foreign	currency.

Looking	ahead	to	the	first	quarter	2013,	aerospace	sales	growth	is	expected	to continue,	despite	more	difficult	comparison	periods	due	to	consecutive	years	of good	industry	growth.	Challenging	marine	new-build	conditions	remain,	and favorable	weather	conditions	during	the	first	quarter	2012	present	a	difficult comparable	period	for	U.S.	architectural	coatings.	Lastly,	the	segment	is	expected to	benefit	from	incremental	savings	from	the	previously	announced	restructuring program	and	currency-translation	impacts	are	expected	to	be	minimal	given current	exchange	rates.

The	Industrial	Coatings	segment's	sales	increased	to	$4.4	billion,	up	5%	from the	prior	year.	The	sales	increase	was	comprised	of	3%	due	to	price	and	4%	due	to volume	offset	by	a	3%	decrease	due	to	currency	translation.	Sales	from acquisitions	contributed	1%	to	the	increase.	The	segment	sales	volume	growth	of 4%	was	driven	by	automotive	OEM	coatings	growth	especially	in	North	America, due	in	part	to	the	recovery	from	the	2011	Japanese	tsunami	as	well	as	continued strength	in	China,	offset	by	European	economic	weakness.	The	current	year volume	gains	by	our	automotive	OEM	coatings	business	outpaced	industry growth.	Industrial	and	packaging	coatings	volumes	were	mixed	by	region.	Europe was	weaker	in	both	businesses.	U.S.	industrial	coatings	improved	while	emerging region	demand	varied	by	end-use	with	markets	aligned	with	construction	activity being	down	in	Asia	and	Argentina	being	impacted	by	import	restrictions.	The consumer	electronics	market	in	Asia	was	slower,	but	packaging	volumes	in	Asia improved.	Emerging	region	sales	were	supplemented	by	sales	from	acquired businesses	and	the	reorganization	of	our	joint	venture	in	India.	Segment	earnings of	$590	million	increased	$152	million	as	the	impact	of	higher	pricing,	sales volume	growth	and	manufacturing	cost	savings	overcame	the	adverse	impact	of inflation	and	higher	overhead	costs	incurred	to	support	growth.	Restructuring related	cost	savings	also	aided	earnings	in	2012.

Looking	ahead	to	the	first	quarter	2013,	higher	year-over-year	general industrial	activity	is	expected	globally,	aided	by	modest	anticipated	improvement in	Asia.	Global	automotive	OEM	vehicle	production	is	expected	to	be	flat	versus robust	2012	results,	reflecting	less	global	inventory	build	and	a	more	severe negative	impact	from	lower	European	auto	builds.	However,	PPG	share	gains	are expected	to	continue	in	this	business.	Ongoing	PPG	cost-management	actions	are expected	to	continue,	including	incremental	benefits	from	the	2012	restructuring program.	Lastly,	currency	translation	impact	is	expected	to	be	muted	based	on current	exchange	rates.

acquisition	of	Dyrup	in	January	2012	contributed	8%	sales	growth;	however,	sales were	negatively	impacted	by	7%	due	to	the	impact	of	foreign	currency	translation. Pricing	increased	sales	mid-single	digit	percents	which	was	substantially	offset	by volume	declines	due	to	market	weakness	throughout	the	region.	Segment	earnings increased	$22	million,	to	$145	million,	due	to	lower	costs	stemming	from aggressive	ongoing	cost	management	and	supplemented	by	the	cost	benefits	from PPG's	restructuring	actions	and	higher	pricing.		These	earnings	improvements were	reduced	by	the	impact	of	lower	sales	volumes	and	cost	inflation.		In	addition, negative	currency	translation	impact	of	$13	million	was	largely	offset	by	the absence	of	a	$9	million	charge	in	the	prior	year	related	to	a	customer	bankruptcy.

Looking	ahead,	we	expect	overall	market	conditions	to	remain	challenging	in the	region	as	we	begin	2013.	Implementation	of	previously	announced restructuring	actions	continues,	with	expanded	benefits	expected	in	the	first	quarter and	full	year	2013.	Currency	translation	impacts,	which	have	been	a	significant headwind	for	the	segment,	are	expected	to	be	minimal	in	the	first	quarter.

Optical	and	Specialty	Materials	segment	2012	sales	were	$1.2	billion, essentially	flat	with	sales	in	2011.	A	3%	unfavorable	impact	of	foreign	currency translation	was	offset	by	a	1%	price	increase	and	2%	volume	growth.	Optical products	achieved	sales	volume	growth	with	the	majority	due	to	higher Transitions®	lens	market	penetration.	Volumes	were	also	aided	by	the	absence	of the	prior	year	negative	impacts	from	extensive	Thailand	flooding	that	disrupted optical	customers	and	supply	chains	in	the	fourth	quarter	2011.	Silicas	volumes were	down	modestly	year	over	year.	Segment	earnings	grew	by	7%	to	$348 million	as	earnings	improved	in	both	businesses.	The	increase	in	earnings	is primarily	due	to	higher	sales	volumes,	overhead	and	manufacturing	cost improvements,	including	restructuring	cost	savings,	and	higher	pricing.	Earnings were	reduced	by	the	negative	impact	of	foreign	currency	translation	and	inflation.

Looking	ahead,	the	absence	of	a	segment	sales	recovery	stemming	from	the 2011	Thailand	flooding	is	expected	to	be	somewhat	offset	in	the	first	quarter	2013 with	the	favorable	impact	from	the	new	Generation	VII	Transitions	product introduction.	Modest	silica	demand	growth	is	expected	to	continue.	Currency impacts	are	expected	to	be	negligible	based	on	current	exchange	rates.

As	previously	disclosed,	PPG	is	currently	in	discussions	with	Essilor	relating to	the	future	of	PPG's	and	Essilor's	joint	venture,	Transitions	Optical.	PPG	cannot predict	the	outcome	of	the	discussions	with	Essilor	with	respect	to	the	future	of Transitions	Optical;	however,	PPG	believes	that	possible	outcomes	may	include (1)	a	modification	of	the	current	joint	venture	structure,	(2)	a	sale	of	all	or	a portion	of	PPG's	interests	in	Transitions	Optical	to	Essilor,	or	(3)	a	sale	of	all	or	a portion	of	Essilor's	interests	in	Transitions	Optical	to	PPG.	PPG	cannot	predict	the timing	of	its	discussions	with	Essilor	but	expects	that	these	discussions	are	likely to	continue	over	the	next	several	months.

Commodity	Chemicals	segment	sales	in	2012	versus	the	prior	year	declined by	$44	million	to	$1,688	million	while	earnings	increased	$2	million	to	$372 million.	Sales	decreased

due	to	lower	chlorine	selling	prices	in	each	quarter,	outpacing	higher	year-over- year	caustic	pricing	achieved	in	each	quarter	this	year.	These	price	declines	were offset	partially	by	higher	year	over	year	chlorine	and	caustic	volumes,	as	well	as by	the	favorable	sales	impact	of	the	May	2011	acquisition	of	Equa-Chlor.	Segment income	was	up	slightly	as	the	impact	on	earnings	of	lower	pricing	was	offset	by lower	energy,	primarily	natural	gas,	and	raw	material	costs.	Lower	manufacturing costs	also	benefited	earnings.	Segment	earnings	were	negatively	affected	by approximately	$5	million	stemming	from	the	two	unplanned	production	outages late	in	2012.

Looking	forward,	PPG	will	report	results	for	the	Commodity	Chemicals segment	in	discontinued	operations	in	2013,	following	the	completion	of	the separation	of	its	commodity	chemicals	business	and	the	merger	of	the	subsidiary holding	the	PPG	commodity	chemicals	business	with	a	subsidiary	of	Georgia	Gulf Corporation,	which	occurred	on	January	28,	2013.

Glass	segment	2012	sales	were	$1.0	billion,	down	$29	million,	or	3%.	The sales	decrease	was	comprised	of	3%	due	to	price	and	1%	due	to	currency,	offset	by higher	sales	volumes	of	1%.	Improved	flat	glass	volumes	as	a	result	of	increased demand	in	the	commercial	and	solar	markets	were	substantially	offset	by	lower fiber	glass	volume.	Fiber	glass	volumes	have	declined	due	to	weak	demand	in Europe	versus	a	strong	prior	year	comparable	period.	Lower	pricing	in	both businesses	and	the	negative	impact	of	currency	translation	drove	the	sales	decline. Segment	earnings	declined	to	$63	million	compared	to	$97	million	a	year	ago. Lower	pricing,	cost	inflation,	as	well	as	lower	equity	earnings,	primarily	related	to our	fiber	glass	joint	venture	selling	to	the	consumer	electronics	industry, contributed	to	the	earnings	decline.	These	factors	were	only	partially	offset	with improved	flat	glass	volumes	and	improved	manufacturing	cost	performance	in fiber	glass.

Looking	ahead	to	the	first	quarter	2013,	fiber	glass	volumes	are	expected	to remain	consistent	with	lower	2012	results.	Recent	positive	flat	glass	volume	trends are	expected	to	continue.	Equity	earnings	are	expected	to	remain	at	lower	levels, compared	with	stronger	comparable	levels	in	the	beginning	of	2012.	Both businesses	remain	focused	on	cost	management.

# Outlook

During	2012,	overall	activity	levels	varied	greatly	among	the	major	global economies,	with	similar	variations	in	activity	level	experienced	by	the	major coatings	end-use	markets.	Because	of	these	variations,	overall	aggregate	PPG global	volume	grew	modestly	for	the	year.

For	PPG,	North	American	demand	was	the	most	stable,	with	growth	occurring across	most	end-use	markets.	Overall	industrial	growth	continued,	aided	by declining	natural	gas	costs	and	further	expansion	in	industries	such	as	aerospace, where	growth	continued.	Also,	further	strengthening	occurred	throughout	the	year in	automotive	OEM	production,	as	the	industry	continues	to	recover,	but	activity still	remains	below	pre-recession	production	levels.	Regional	growth	was	also supported	by	a	long-awaited	improvement	in	construction	spending,	as	U.S. residential	construction	improved	throughout	the	year	following	several	anemic years.	Moderating	growth	in	the	region	was	continued	uncertainty	relating	to	the long-term

fiscal	direction	of	the	federal	and	state	governments.	Despite	these	limitations	and persistently	high	U.S.	unemployment	rates,	the	region	delivered	solid	growth during	the	year,	and	remains	the	region	with	the	most	promising	growth	prospects for	PPG	heading	into	2013.

During	2012,	the	European	economy	continued	to	underperform	versus	most other	major	economies	as	elevated	regional	concerns	continued	regarding government	budget	deficits	and	refinancing	of	government	debt	loads.	Anxiety rose	in	the	middle	of	year	due	to	several	political	elections	and	associated	concerns over	the	implementation	of	austerity	programs	to	address	fiscal	deficits.	Export growth	from	the	region,	which	had	been	one	of	the	few	positive	economic	factors, began	to	erode	reflecting	a	slowdown	in	emerging	regions'	growth	rates,	and placing	further	economic	restraint	on	the	Eurozone.	Year-over-year	activity	levels in	the	region	remained	negative	throughout	the	year,	and	demonstrated	no meaningful	signs	of	improvement	as	2012	came	to	conclusion.

In	the	aggregate,	emerging	region	economies	continued	to	expand	during 2012,	but	at	a	much	lower	level	than	recent	history	and	with	considerable	variation by	individual	country,	and	also	by	industry	within	countries.	PPG's	largest emerging	region	exposure	remains	Asia,	where	annual	sales	are	approaching	$3.0 billion.	Approximately	40%	of	the	company's	Asian	sales	are	in	China,	which	now represents	PPG's	third	largest	individual	country	in	terms	of	sales.	Activity	in China,	and	more	broadly	Asia,	moderated	in	2012,	with	solid	growth	realized	in certain	industrial	markets	including	increased	automotive	production.	These advances	were	partly	offset	by	considerable	declines	in	other	markets	due,	in	large part,	to	decreased	global	demand	in	such	markets	as	consumer	electronics	and marine	new-build,	as	the	majority	of	the	global	production	in	these	markets	occurs in	Asia.	Demand	in	the	Latin	American	economies	was	also	erratic	reflecting,	in part,	heavy	annual	inflation	rates	the	past	few	years	and	lower	demand	for commodities.	PPG's	Latin	American	volumes	fell	reflecting	the	weaker	regional performance	and	certain	company	specific	actions	to	reduce	our	operations	in certain	markets	and	countries	based	on	lower	profitability	expectations.

As	a	proactive	response	to	the	mixed	global	end-use	market	conditions	and particularly	the	lower	European	demand,	PPG	initiated	a	restructuring	program	in early	2012	to	reduce	its	cost	structure.	The	earnings	charge	associated	with	the program,	which	was	focused	on	our	European	operations,	was	just	over	$200 million,	including	about	$160	million	in	cash	costs.	Resultant	program	savings	of $140	million	annually	are	expected,	including	approximately	$50	million	achieved during	2012.	The	remainder	of	the	savings	are	anticipated	to	be	achieved	in	2013.

Since	mid-2010,	commodity	and	oil	prices	have	experienced	inflation	due	to tight	supply	stemming	from	manufacturing	capacity	remaining	idled	or	removed from	service	during	the	recession	and	improving	demand	for	commodities.	PPG typically	experiences	fluctuating	prices	for	energy	and	raw	materials	used	in	many of	our	businesses.	Factors	which	impact	our	input	prices	are	supply/demand imbalances,	global	industrial	activity	levels	and	changes	in	supplier	feedstock costs	and	inventories.	PPG	input	prices	inflated	further	in	the	first	half	of	2012, and	then,	in	the	second	half	of	the	year,	moderated

modestly	from	the	year's	peak	levels.	Our	current	forecast	for	the	early	portion	of 2013	is	for	overall	coatings	raw	material	prices	to	be	flat	with	year-end	2012,	but results	will	be	mixed	based	on	the	respective	commodity.	Given	the	volatility	in supply/demand,	energy	cost	and	the	currency	environment,	it	is	not	feasible	to project	full-year	2013	raw	material	pricing.

Changes	in	natural	gas	pricing	have	a	significant	impact	on	the	financial performance	of	our	Commodity	Chemicals	and	Glass	segments.	Our	2012	U.S. natural	gas	costs	averaged	approximately	$3.00	per	mmbtu	for	the	year,	while	our 2011	costs	averaged	about	$4.65	per	unit.	Through	2012,	each	one-dollar	change in	our	unit	cost	of	natural	gas	per	million	British	Thermal	Units	had	a	direct impact	of	approximately	$60	million	to	$70	million	on	our	annual	operating	costs. The	separation	of	PPG's	commodity	chemical	business	in	January	2013	greatly reduced	PPG's	natural	gas	exposure,	reducing	the	impact	of	each	one-dollar change	in	input	cost	to	about	$10	million	to	$20	million	in	annual	costs.	Despite the	reduced	annual	requirement,	we	will	continue	to	use	a	variety	of	techniques	to manage	these	costs,	which	include	reducing	consumption	through	improved manufacturing	processes,	switching	to	alternative	fuels	and	hedging.

In	an	effort	to	offset	the	adverse	impact	of	cost	inflation	on	earnings	during 2011	and	2012,	higher	coatings	selling	prices	were	implemented.	In	2012,	the higher	selling	prices	reflected	efforts	to	counteract	2012	inflation,	as	well	as absorb	2011	inflation	which	was	not	fully	offset	by	higher	pricing	in	that	year.	In 2013,	additional,	targeted	pricing	is	expected	to	be	implemented	in	our	businesses which	remain	impacted	by	the	cost	inflation.	Selling	prices	in	Commodity Chemicals	and	Glass	declined	modestly	during	2012.

Pension	and	postretirement	benefit	costs	were	$260	million	in	2012.	These costs	included	about	$25	million	associated	with	the	Commodity	Chemicals segment.	In	2013,	pension	and	other	postretirement	benefit	costs	are	expected	to decline	roughly	$40	million	due	to	strong	pension	asset	performance	in	2012	and because	PPG	will	no	longer	bear	the	costs	associated	with	the	Commodity Chemicals	segment	as	a	result	of	the	separation	of	that	business.	During	2012, PPG's	cash	contributions	to	pension	plans	totaled	$81	million,	following	cash contributions	of	$121	and	$340	million,	in	2011	and	2010,	respectively	we anticipate	2013	contributions	will	be	in	the	range	of	$75	million	to	$100	million.

We	expect	our	ongoing	tax	rate	in	2013	to	be	in	the	range	of	23.5%	to	24.5%, lower	than	the	2012	rate,	due	to	the	absence	of	Commodity	Chemical	segment earnings	which	were	primarily	U.S.	based.	The	U.S.	remains	one	of	the	company's highest	taxed	countries.	Because	of	the	differences	in	country	tax	rates,	a	shift	in the	geographic	mix	of	earnings	will	impact	our	overall	ongoing	tax	rate.

The	Company	generated	cash	from	operations	during	2012	of	about	$1.8 billion,	a	record	level	of	performance	for	the	company.	The	Company	entered 2013	with	about	$2.4	billion	in	cash	and	short-term	investments,	which	is	an historically	high	level	for	the	Company.	During	2012,	PPG	completed	the acquisitions	of	Dyrup,	Colpisa	and	Spraylat,	with	the	annual	sales	of	these businesses	approximating	$400	million.	PPG	also	announced	the	acquisition	of Akzo	Nobel's	North	American

Architectural	Coatings	business	in	December	2012,	which	is	expected	to	close	in the	first	half	of	2013.	Over	the	past	three	years,	the	Company	has	repurchased about	19	million	shares	of	stock	at	a	cost	of	$1.5	billion,	and	the	Company	ended the	year	with	approximately	8	million	shares	available	for	repurchase	under	the current	authorization	from	the	Board	of	Directors.	We	anticipate	making additional	acquisitions	and	share	repurchases	in	2013,	as	we	target	earnings accretive	deployment	of	our	strong	cash	position.

Entering	2013,	the	disparity	of	economic	activity	by	region	is	anticipated	to continue.	Of	the	major	regions,	growth	prospects	remain	in	North	America, bolstered	by	further	anticipated	recovery	in	construction	activity	and	continued strength	in	various	industrial	markets,	including	automotive	production	and increased	investment	related	to	the	energy	and	chemical	industries.	However, concerns	over	fiscal	uncertainty	and	unemployment	temper	these	prospects somewhat.	The	2013	growth	rate	in	emerging	regions	is	expected	to	remain	mixed, but	improve	somewhat	based	on	increases	in	local	consumption,	less	inventory destocking	associated	with	lower	exports,	and	government	stimulus	actions. Economic	activity	in	the	Eurozone	is	expected	to	remain	subdued	with	very	few end-use	markets	expected	to	deliver	growth,	with	downside	risk	from	regional economic	conditions	continuing.

PPG	intends	to	remain	proactive	in	managing	our	businesses	to	address	these varied	market	conditions	and	economic	uncertainty	by	maintaining	strict	operating cost	management	policies,	which	coupled	with	the	anticipated	restructuring savings,	are	expected	to	temper	the	impact	of	any	negative	market	conditions	on our	business	margins.

# Accounting	Standards	Adopted	in	2012

Note	1,	"Summary	of	Significant	Accounting	Policies,"	under	Item	8 describes	the	Company's	recently	adopted	accounting	pronouncements.

# Accounting	Standards	to	be	Adopted	in	Future	Years

Note	1,	"Summary	of	Significant	Accounting	Policies,"	under	Item	8 describes	accounting	pronouncements	that	have	been	promulgated	prior	to December	31,	2012	but	are	not	effective	until	a	future	date.

# Performance	in	2011	compared	with	2010

Net	sales	in	2011	totaled	$14,885	million	compared	to	$13,423	million	in 2010,	an	increase	of	11%.	Higher	volumes	contributed	just	over	2%	and	higher selling	prices	increased	sales	by	5%.	The	remainder	of	the	sales	increase	was	due to	the	impact	of	foreign	currency	translation	and	acquisitions.	The	higher	sales volumes	were	achieved	in	all	major	geographic	regions,	while	four	reportable segments	had	increased	volume	levels	and	the	other	two	had	level	year-over-year volumes.

Increased	demand	was	driven	by	stronger	global	industrial	production activity,	which	aided	many	of	our	businesses.	The	global	industrial	recovery continued	in	2011	with	solid	growth	in	emerging	regions	and	North	America	and with	modest	improvement	in	Europe	despite	a	slight	decline	in	volume	in	the second	half	of	2011	due	to	reduced	end-use	market	demand	for	fiber	glass	and automotive	refinish	based	on	softness	in	the

region.	Growth	rates	in	Asia	in	2011	were	reduced	by	the	shrinking	level	of	marine original-equipment	new	ship	builds.	Growth	was	impacted	early	in	the	year	due	to the	effects	of	the	Japanese	earthquake	and	tsunami	and	was	also	tempered	late	in the	year	by	the	negative	sales	impact	stemming	from	the	Thailand	floods, particularly	in	optical	products.	North	American	growth	was	impacted	by unscheduled	production	outages	in	the	Commodity	Chemicals	segment	earlier	in 2011	as	well	as	decreased	chlorine	industry	demand	in	the	fourth	quarter.	Activity in	construction	markets	in	the	developed	regions	of	the	world	remained	at	low levels	and	has	not	demonstrated	any	consistent	improvement.	Our	volume	growth for	2011	versus	the	prior	year	growth	which	benefited	from	increasing	demand	as the	global	industrial	economy	began	to	recover	from	the	recession.	Also,	volumes were	flat	in	the	fourth	quarter	of	2011	as	customers	curtailed	their	inventory	and were	cautious	with	their	order	patterns,	reflecting	economic	uncertainty.	The improved	selling	prices	in	2011	were	achieved	in	every	reporting	segment,	led	by Commodity	Chemicals	and	each	of	the	three	coatings	segments.	The	Commodity Chemicals	segment	achieved	pricing	gains	due	to	continued	strong	demand	and tightening	supply	of	caustic	soda.	In	our	coatings	segments,	prices	were	raised	in response	to	persistent	raw	material	cost	inflation.	The	higher	coatings	selling prices	significantly,	but	did	not	fully,	offset	the	impact	of	raw	material	inflation rates	that	began	to	flatten	in	the	fourth	quarter.	The	favorable	currency	impact	was primarily	driven	by	strengthening	European,	Asian	and	Latin	American	currencies against	the	U.S.	dollar	compared	to	2010,	despite	a	decline	in	the	value	of	the	Euro in	the	second	half	of	2011.

Cost	of	sales,	exclusive	of	depreciation	and	amortization,	increased	by	$867 million	in	2011	to	$9,081	million	compared	to	$8,214	million	in	2010.	About	55% of	the	increase	was	driven	by	inflation,	particularly	increases	in	raw	material	costs, primarily	in	our	coatings	businesses.	Manufacturing	costs	were	again	positive	in 2011.	Additionally,	about	20%	of	the	increase	in	cost	of	sales	was	due	to	sales growth	from	volume	and	acquisitions.	The	effect	of	foreign	currency	accounts	for about	25%	of	the	increase	in	cost	of	sales	for	the	year.	Cost	of	sales	as	a percentage	of	sales	was	61.0%	in	2011	compared	to	61.2%	in	2010.	This improvement	reflects	a	combination	of	slightly	higher	margins	on	the	sales	volume growth	in	2011	due	to	improved	product	mix	and	the	benefit	of	selling	price increases,	particularly	in	Commodity	Chemicals,	net	of	the	impact	of	inflation	on cost	of	sales.	For	the	coatings	businesses,	higher	pricing	significantly	offset inflation,	as	raw	material	costs	escalated	throughout	2011.	However,	the	coatings businesses	did	not	fully	offset	raw	material	cost	inflation	with	higher	pricing	in 2011,	and	additional	pricing	actions	are	underway	in	2012	in	several	businesses	to further	counter	inflation	absorbed	in	2011.	For	the	Company	in	total,	inflation	was more	than	offset	by	higher	pricing	aided	by	Commodity	Chemicals.

Selling,	general	and	administrative	expenses	increased	by	$255	million	to $3,234	million	in	2011	compared	to	$2,979	million	in	2010.	The	effects	of	foreign currency,	inflation,	and	growth	in	costs	to	support	the	increased	sales	volumes	and acquisitions	were	approximately	equal.	Selling,	general	and	administrative	costs	as a	percentage	of	sales	were	21.7%	in	2011,	down	from	22.2%	in	2010	reflecting	the benefit	of	our

continuing	effort	to	aggressively	manage	our	cost	growth	as	our	sales	volume increases.

Interest	expense	increased	$21	million	to	$210	million	in	2011	from	$189 million	in	2010.	This	increase	was	driven	by	the	Company's	$1	billion	debt issuance	in	November	of	2010	partially	offset	by	an	early	repayment	of	$400 million	in	term	loans	in	June	2011.	Interest	income	increased	$8	million	to	$42 million	in	2011	from	$34	million	in	2010	due	to	higher	average	short	term investment	balances	in	2011	compared	to	2010.

Other	charges	decreased	$11	million	to	$73	million	in	2011	from	$84	million in	2010	due	principally	to	the	absence	of	a	$6	million	antitrust	litigation	settlement charge	which	occurred	in	2010	and	lower	environmental	remediation	expense	in 2011	of	$5	million.

The	effective	tax	rate	on	pretax	earnings	in	2011	was	approximately	24% compared	to	approximately	32%	in	2010.	The	2011	rate	includes	a	benefit	of	$12 million	resulting	from	a	favorable	tax	audit	settlement.	The	2011	rate	also	includes the	impact	of	the	non-taxable	bargain	purchase	gain	resulting	from	the	Equa-Chlor acquisition.	The	effective	rate	was	25%	on	the	remaining	pretax	earnings	in	2011.

The	2010	tax	rate	includes	expense	of	$85	million	resulting	from	the reduction	of	our	previously	provided	deferred	tax	asset	related	to	our	liability	for retiree	medical	costs.	The	deferred	tax	asset	needed	to	be	reduced	because	the healthcare	legislation	enacted	in	March	2010	included	a	provision	that	reduced	the amount	of	retiree	medical	costs	that	will	be	deductible	after	December	31,	2012. The	2010	rate	also	included	a	$5	million	benefit	as	a	result	of	enacted	changes	in statutory	tax	rates	outside	the	U.S.	The	effective	rate	was	26%	on	the	remaining pretax	earnings	in	2010.	The	decrease	in	the	tax	rate	on	the	remaining	pretax earnings	in	2011	is	mainly	the	result	of	tax	planning	initiatives	in	the	fourth quarter.

Net	income	(attributable	to	PPG)	and	earnings	per	share	–	assuming	dilution (attributable	to	PPG)	for	2011	and	2010	are	summarized	below:

(Millions,	except	per	share	amounts)

| Net	income	(attributable	to	PPG) | $769 | $4.63 |
| :--- | :--- | :--- |
| Net\tincome\t(attributable\tto\tPPG)\tincludes: |  |  |
| Charge\trelated\tto\tchange\tin\tU.S.\ttax\tlaw | $85 | $0.51 |

Average	shares	used	to	calculate	earnings	per	share	–	assuming	dilution	were 157.3	million	in	2011	and	164.5	million	in	2010.	The	reduction	is	the	result	of share	buyback	activity	in	2011.

|  | Net	sales |  | Segment	income | Segment	income |
| :--- | :--- | :--- | :--- | :--- |
| (Millions) | 2011 | 2010 | 2011 | 2010 |
| Performance\tCoatings | $4,626 | $4,281 | $673 | $661 |
| Industrial\tCoatings | 4,158 | 3,708 | 438 | 378 |
| Architectural\tCoatings\t–EMEA | 2,104 | 1,874 | 123 | 113 |
| Optical\tand\tSpecialty\tMaterials | 1,204 | 1,141 | 326 | 307 |
| Commodity\tChemicals | 1,732 | 1,434 | 370 | 189 |
| Glass | 1,061 | 985 | 97 | 74 |

Performance	Coatings	sales	increased	$345	million,	or	8%,	to	$4,626	million in	2011.	The	sales	increase	was	comprised	of	5%	due	to	price	and	3%	due	to currency.	Volumes	for	the	segment	were	slightly	favorable	as	volume	increases	in automotive	refinish	and	aerospace	were	offset	by	low-single	digit	percentage volume	declines	in	the	protective	and	marine	coatings	and	the	architectural- Americas	and	Asia	Pacific	coatings	businesses.	Aerospace	volumes	continued	to grow	reflecting	robust	industry	demand	and	PPG	share	gains.	Automotive	refinish volume	increased,	but	growth	was	impacted	by	customer	inventory	management at	year-end	and	weaker	European	activity	levels	in	the	second	half	of	the	year. Marine	coatings	volumes	were	down	reflecting	the	decline	in	ship	build	activity and	reduced	global	shipping	during	the	last	quarter	of	2011.	Improved	protective coatings	volumes	in	most	regions,	reflecting	higher	energy	and	infrastructure demand,	partly	offset	the	sales	decline	in	marine.	U.S.	architectural	coatings volumes	were	relatively	flat.	This	included	the	severely	negative	volume	trends	in the	U.S.	early	in	2011	due	to	weather	conditions.	Architectural	volumes	in	the emerging	regions	declined	low	single	digit	percentages,	including	the	negative impacts	from	lower	demand	near	the	end	of	2011.	Segment	income	in	2011 increased	$12	million	to	$673	million.	The	impacts	of	improved	volumes	in automotive	refinish	and	aerospace,	manufacturing	cost	reductions	and	favorable currency	impacts	more	than	offset	the	negative	impact	of	inflation	net	of	price	to result	in	the	earnings	improvement	in	2011	compared	to	2010.	Pricing	improved	in all	businesses	reflecting	our	continuing	efforts	to	address	persistent	input	cost inflation.

Industrial	Coatings	sales	increased	$450	million,	or	12%	compared	to	2010,	to $4,158	million.	The	sales	increase	was	comprised	of	5%	due	to	volume,	4%	due	to price	and	3%	due	to	currency.	Segment	income	improved	16%	versus	2010	to $438	million	in	2011.	This	increase	was	primarily	due	to	increased	volumes,	lower manufacturing	costs	and	currency,	partially	offset	by	the	negative	impact	of inflation	net	of	increases	in	selling	prices	and	growth-driven	increases	in	overhead costs.	Segment	volume	grew	by	5%	on	solid	global	industrial	demand,	with positive	results	in	all	three	business	units.	Growth	rates	were	robust	in	Asia	as	a result	of	continued	growth	in	the	region	for	all	three	businesses.	The	automotive OEM	business	delivered	strong	single-digit	percentage	growth	reflecting	high growth	rates	due	to	the	automotive	industry	recovery	with	continued	growth	in North	America,	Asia	Pacific	and	Latin	America,	and	low	growth	in	Europe	where volumes	were	positive	for	the	full	year	but	weakened	in	the	second	half	of	the	year. Global	volumes	in	the	industrial	and	packaging	businesses	were	also	favorable with	Asia	Pacific	the	strongest	region	delivering	the	majority	of	the	growth,	with somewhat	lower	or	even	declining

volumes	in	Europe	and	North	America	due,	in	part,	to	late	year	customer destocking.

Architectural	Coatings	-	EMEA	sales	increased	$230	million,	or	12%,	to $2,104	million	in	2011.	The	sales	increase	was	comprised	of	5%	due	to	the positive	impact	of	foreign	currency	translation,	a	1%	increase	from	acquired business	and	the	remainder	from	an	increase	in	selling	prices	and	volume	gains. Segment	earnings	were	up	$10	million	compared	to	the	prior	year.	Positive	year- over-year	earnings	resulted	from	the	earnings	impact	of	volume	growth	and currency	translation.	Earnings	in	2011	were	reduced	by	a	$9	million	charge	related to	a	U.K.-based	retail	do-it-yourself	customer	who	filed	for	bankruptcy	during	the second	quarter	of	2011	and	the	adverse	impact	of	inflation	net	of	price	increases.

Optical	and	Specialty	Materials	sales	for	2011	increased	$63	million,	or	6%, compared	to	2010,	to	$1,204	million	due	to	a	2%	increase	in	volumes,	pricing	and the	favorable	impact	of	currency.	Earnings	grew	by	6%	to	$326	million.	Both optical	products	and	silicas	achieved	sales	growth	coming	from	higher	volumes, pricing	and	the	impact	of	currency.	The	silicas	business'	volumes	benefited	from the	higher	automotive	OEM	production	resulting	in	increased	demand	for	our products	sold	into	the	tire	and	battery	markets.	Segment	results	were	tempered	by the	negative	impact	from	the	serious	flooding	in	Thailand	that	disrupted	optical customers	and	supply	chains.	The	flooding	also	impacted	production	of	PPG's optical	materials,	resulting	in	a	declaration	of	force	majeure	during	the	fourth quarter.	Segment	earnings	increased	due	to	the	factors	increasing	sales,	which exceeded	the	impact	of	inflation,	higher	manufacturing	costs	and	volume	driven growth	in	overhead	cost.

Commodity	Chemicals	sales	in	2011	versus	the	prior	year	increased	$298 million,	or	21%,	to	$1,732	million.	Higher	pricing	and	the	impact	of	the EquaChlor	acquisition	were	the	key	factors	producing	the	improved	sales	and earnings.	Segment	earnings	increased	$181	million	to	$370	million	in	2011. Capacity	utilization	was	lower	in	the	second,	third	and	fourth	quarters	due	to planned	and	unplanned	production	outages,	as	well	as	lower	chlorine	industry demand	in	the	fourth	quarter	due	to	customer	inventory	management	and	lower chlorine	derivative	exports,	resulting	in	higher	manufacturing	and	maintenance expenses.	Natural	gas	unit	costs	were	lower	year-over-year,	but	ethylene	costs were	higher.	An	increase	in	overhead	costs	was	substantially	offset	by	gains	from asset	sales,	primarily	related	to	the	lease	of	Marcellus	Shale	natural	gas	drilling rights	on	PPG	owned	property,	and	lower	environmental	expense.

Glass	sales	increased	$76	million,	or	8%,	compared	to	2010	to	$1,061	million in	2011.	Sales	increased	4%	due	to	pricing,	2%	due	to	volume	growth	with	the remainder	attributable	to	favorable	foreign	currency	impacts.	Solid	fiber	glass pricing	gains	drove	the	sales	growth,	together	with	improved	flat	glass	volumes. Fiber	glass	volumes	were	also	up	over	2010,	but	were	lower	in	the	fourth	quarter of	2011	due	to	lower	European	demand.	Segment	earnings	grew	to	$97	million, compared	to	$74	million	a	year	ago.	Higher	sales	prices	and	volumes	were	the primary	drivers	of	the	earnings	improvement.	The	earnings	results	were	tempered somewhat	by	raw	material	cost	inflation,	higher	fiber	glass	maintenance	costs	and higher	overhead	costs.

See	Note	24,	"Reportable	Business	Segment	Information,"	under	Item	8	of this	Form	10-K	for	further	information	related	to	the	Company's	operating segments	and	reportable	business	segments.

# 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	Item	3,	"Legal	Proceedings"	and	Note	15, "Commitments	and	Contingent	Liabilities,"	under	Item	8	of	this	Form	10-K	for	a description	of	certain	of	these	lawsuits,	including	a	description	of	the	proposed asbestos	settlement.

As	discussed	in	Item	3	and	Note	15,	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	proposed	asbestos settlement	described	in	Note	15	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.

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.	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.	Management	anticipates	that	the	resolution	of	the	Company's environmental	contingencies	will	occur	over	an	extended	period	of	time.

	As	of	December	31,	2012	and	2011,	PPG	had	reserves	for	environmental contingencies	totaling	$332	million	and	$226	million,	respectively,	of	which	$101 million	and	$59	million,	respectively,	were	classified	as	current	liabilities.	Pretax charges	against	income	for	environmental	remediation	costs	in	2012,	2011	and 2010	totaled	$167	million,	$16	million	and	$21	million,	respectively,	and	are included	in	"Other	charges"	in	the	accompanying	consolidated	statement	of income.	Cash	outlays	related	to	such	environmental	remediation	aggregated	$66 million,	$59	million,	and	$34	million	in	2012,	2011	and	2010,	respectively.	The impact	of	foreign	currency	increased	the	liability	by	$2	million	in	2012	and decreased	the	liability	by	$3	million	in	2011.	As	a	result	of	the	allocation	of	the purchase	price	of	acquisitions	to	assets	acquired	and	liabilities	assumed,	the liability	for	environmental	contingencies	was	increased	by	$3	million	during	2012.

	In	addition	to	the	amounts	currently	reserved	for	environmental	remediation, the	Company	may	be	subject	to	loss	contingencies	related	to	environmental matters	estimated	to	be	as	much	as	$100	million	to	$275	million.	This	range	is	less than	the	comparable	amount	reported	at	the	end	of	2011	as	a	result	of

the	additional	environmental	remediation	charge	recorded	in	the	first	quarter	2012. 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	including	each	of	the following;	i)	additional	costs	at	New	Jersey	Chrome,	which	represents	about	one third	of	this	potential	range,	ii)	a	number	of	other	sites,	including	legacy	glass	and chemical	manufacturing	sites	and	iii)	the	Calcasieu	River	Estuary	and	two operating	plant	sites	in	the	Company's	former	commodity	chemicals	business.	The loss	contingencies	related	to	these	sites	include	significant	unresolved	issues	such as	the	nature	and	extent	of	contamination	at	these	sites	and	the	methods	that	may have	to	be	employed	to	remediate	them.

The	Company	continues	to	analyze,	assess	and	remediate	the	environmental issues	associated	with	New	Jersey	Chrome.	In	connection	with	the	preparation	of	a final	draft	soil	remedial	action	work	plan	and	cost	estimate	that	was	initially required	to	be	submitted	to	the	NJDEP	in	May	2012	but	now	will	be	submitted	in 2013,	the	Company	compiled	updated	information	about	the	sites	that	was	used	to develop	a	new	estimate	of	the	cost	to	remediate	these	sites	which	resulted	in	a charge	against	earnings	of	$145	million	in	the	first	quarter	of	2012.	A	charge	of $165	million	for	the	estimated	costs	of	remediating	these	sites	was	recorded	in	the third	quarter	of	2006.	Information	will	continue	to	be	generated	from	the	ongoing groundwater	remedial	investigation	activities	related	to	New	Jersey	Chrome	and will	be	incorporated	into	a	final	draft	remedial	action	work	plan	for	groundwater expected	to	be	submitted	to	NJDEP	in	the	second	quarter	of	2014.	There	are currently	no	amounts	reserved	for	groundwater	remediation.	These	charges	for estimated	environmental	remediation	costs	in	2006	and	2012	were	significantly higher	than	PPG's	historical	range.	Excluding	2006	and	2012,	pre-tax	charges against	income	for	environmental	remediation	have	ranged	between	$10	million and	$35	million	per	year	for	the	past	16	years.	Charges	in	2013	are	expected	to again	be	within	this	historical	range.

# Impact	of	Inflation

Coatings	raw	materials	both	organic,	primarily	petroleum	based,	and inorganic	materials,	including	titanium	dioxide,	generally	comprise	70-to-80%	of coatings	cost	of	goods	sold	in	most	coatings	formulations	and	represent	PPG's single	largest	production	cost	component.	PPG	input	prices	inflated	further	in	the first	half	of	2012,	and	then,	in	the	second	half	of	the	year,	moderated	modestly from	the	year's	peak	levels.	In	2012,	PPG	experienced	a	reduction	in	the	price	of natural	gas,	its	primary	energy	cost,	and	also	in	ethylene,	a	Commodity	Chemical raw	material,	and	experienced	low	single	digit	percentage	inflation	in	coatings	raw material	prices.

In	2011,	PPG	experienced	a	reduction	in	the	price	of	natural	gas,	its	primary energy	cost,	but	experienced	a	significant	rise	in	both	ethylene,	a	Commodity Chemical	raw	material	and	in	coatings	raw	material	prices.	In	2011,	overall coatings	raw	material	costs	inflated	by	approximately10-to-12%	for	the	Company. The	largest	inflation	impacts	were	from	titanium	dioxide	pigments	and	certain propylene-based	resins.	This	impact	was	not	entirely	offset	by	higher	selling	prices in	our	Performance	Coatings	and	Architectural	Coatings	–	EMEA

reportable	segments.	There	was	also	a	coverage	gap	in	our	Industrial	Coatings reportable	segment	even	with	this	segment	using	product	reformulations	to attempt	to	counter	this	impact.	Our	Commodity	Chemicals	and	Glass	reportable segments	were	able	to	more	than	fully	offset	the	impact	of	inflation	with	price increases,	while	inflation	was	not	significant	for	our	Optical	and	Specialty Materials	reportable	segment.

In	2010,	PPG	experienced	a	reduction	in	its	primary	energy	costs	but	a	steady increase	in	its	coatings	raw	material	costs,	most	notably	in	the	second	half	of	the year.	This	was	driven	by	higher	global	demand	as	a	result	of	the	gradual	recovery in	the	global	economy	and	tightness	of	supply	as	suppliers	have	not	increased	their capacities.	This	impact	was	offset	by	higher	selling	prices	in	our	Performance Coatings	and	Architectural	Coatings	–	EMEA	reportable	segments	and	partially offset	in	our	Industrial	Coatings	reportable	segment.	Industrial	Coatings	partially addressed	the	remaining	impact	of	raw	material	inflation	with	further	cost reductions	in	2010.	The	impact	of	inflation	net	of	price	was	positive	in	the	Optical and	Specialty	Materials	reportable	segment	and	negative	in	the	Commodity Chemicals	and	Glass	reportable	segments.

Our	current	forecast	for	the	early	portion	of	2013	is	for	overall	coatings	raw material	prices	to	be	flat	with	year-end	2012,	but	results	will	vary	by	commodity. Given	the	volatility	in	supply/demand,	energy	costs	and	the	currency	environment, it	is	not	feasible	to	project	full-year	2013	raw	material	pricing.	The	Company	is continuing	its	aggressive	sourcing	initiatives	to	support	its	continuous	efforts	to find	the	lowest	raw	material	costs.	These	initiatives	include	reformulation	of	our products	using	both	petroleum-derived	and	bio-based	materials	as	part	of	a	product renewal	strategy,	qualifying	multiple	and	local	sources	of	supply,	including suppliers	from	Asia	and	other	lower	cost	regions	of	the	world,	and	strategic initiatives	with	multiple	global	suppliers	to	secure	and	enhance	PPG's	supply	of titanium	dioxide	and	other	materials.	We	expect	these	efforts,	combined	with increases	in	our	selling	prices,	will	offset	the	negative	impact	of	inflation	on	our coatings	businesses	in	2013	and	recover	margin	lost	from	inflation	absorbed	over the	last	three	years.	The	separation	of	PPG's	commodity	chemical	business	in January	2013	greatly	reduced	PPG's	natural	gas	exposure,	with	each	one-dollar change	in	unit	cost	per	million	BTUs	now	accounting	for	about	$10	million	to	$20 million,	instead	of	$60	million	to	$70	million,	in	annual	costs,	and	removed	PPG's direct	exposure	with	respect	to	the	volatility	of	ethylene	prices.	Despite	the reduced	annual	requirement,	we	will	continue	to	use	a	variety	of	techniques	to manage	our	natural	gas	costs,	which	include	reducing	consumption	through improved	manufacturing	processes,	switching	to	alternative	fuels	and	hedging.

# Liquidity	and	Capital	Resources

During	the	past	three	years,	we	had	sufficient	financial	resources	to	meet	our operating	requirements,	to	fund	our	capital	spending,	share	repurchases	and pension	plans	and	to	pay	increasing	dividends	to	our	shareholders.

Cash	from	operating	activities	was	$1,787	million,	$1,436	million,	and	$1,310 million	in	2012,	2011,	and	2010,	respectively.	Cash	from	operations	in	2012 compared	to	2011	was	aided	by	cash	received	from	a	decrease	in	working	capital of	$113	million.	Higher	earnings	increased	cash	from

operations	in	2011	compared	to	2010,	but	the	increase	was	reduced	by	cash	used	to fund	an	increase	in	working	capital	of	$212	million	driven	by	our	sales	growth	in 2011.

Operating	Working	Capital	is	a	subset	of	total	working	capital	and	represents (1)	trade	receivables-net	of	the	allowance	for	doubtful	accounts,	plus (2)	inventories	on	a	first-in,	first-out	("FIFO")	basis,	less	(3)	trade	creditors' liabilities.	See	Note	3,	"Working	Capital	Detail"	under	Item	8	of	this	Form	10-K for	further	information	related	to	the	components	of	the	Company's	Operating Working	Capital.	We	believe	Operating	Working	Capital	represents	the	key components	of	working	capital	under	the	operating	control	of	our	businesses. Operating	Working	Capital	at	December	31,	2012	and	2011	was	$2.9	billion	and $2.7	billion,	respectively.	A	key	metric	we	use	to	measure	our	working	capital management	is	Operating	Working	Capital	as	a	percentage	of	sales	(fourth quarter	sales	annualized).

| (Millions,	except	percentages) | 2012 | 2011 |
| :--- | :--- | :--- |
| Trade\tReceivables,\tnet | $2,568 | $2,512 |
| Inventories,\tFIFO | 1,930 | 1,839 |
| Trade\tCreditor's\tLiabilities | 1,620 | 1,612 |
| Operating\tWorking\tCapital | $2,878 | $2,739 |
| Operating\tWorking\tCapital\tas\t%\tof\tSales | 19.7% | 19.5% |

Operating	working	capital	at	December	31,	2012	increased	$139	million compared	with	the	prior	year	end	level;	however,	excluding	the	impact	of currency	and	acquisitions,	the	change	was	a	decrease	of	$21	million	during	the year	ended	December	31,	2012.	This	decrease	was	the	net	result	of	decreases	in	all components	of	operating	working	capital.	Trade	receivables	from	customers,	net, as	a	percentage	of	fourth	quarter	sales,	annualized,	for	2012	was	17.6%,	down slightly	from	17.9%	for	2011.	Days	sales	outstanding	was	61	days	in	2012,	a	one day	improvement	from	2011.	Inventories	on	a	FIFO	basis	as	a	percentage	of fourth	quarter	sales,	annualized,	for	2012	was	13.2%	up	slightly	from	13.1%	in 2011.	Inventory	turnover	was	4.8	times	in	2012	and	5.0	times	in	2011.

Total	capital	spending,	including	acquisitions,	was	$533	million,	$446	million and	$341	million	in	2012,	2011,	and	2010,	respectively.	Spending	related	to modernization	and	productivity	improvements,	expansion	of	existing	businesses and	environmental	control	projects	was	$411	million,	$390	million	and $307	million	in	2012,	2011,	and	2010,	respectively,	and	is	expected	to	be	in	the range	of	$350-$450	million	during	2013.	Capital	spending,	excluding acquisitions,	as	a	percentage	of	sales	was	2.7%,	2.6%	and	2.3%	in	2012,	2011	and 2010,	respectively.	Capital	spending	related	to	business	acquisitions	amounted	to $122	million,	$56	million,	and	$34	million	in	2012,	2011	and	2010,	respectively. A	primary	focus	for	the	Corporation	in	2013	will	continue	to	be	prudent	cash deployment	focused	on	profitable	earnings	growth	including	pursuing opportunities	for	additional	strategic	acquisitions.

In	January	2013,	PPG	received	$900	million	in	cash	proceeds	in	connection with	the	closing	of	the	separation	of	its

commodity	chemicals	business	and	subsequent	merger	of	the	subsidiary	holding the	PPG	commodity	chemicals	business	with	a	subsidiary	of	Georgia	Gulf.	Refer to	Note	25,	"Separation	and	Merger	Transaction"	for	financial	information regarding	the	separation	of	the	commodity	chemicals	business.

In	December	2012,	the	Company	reached	a	definitive	agreement	to	acquire the	North	American	architectural	coatings	business	of	Akzo	Nobel,	N.V., Amsterdam,	in	a	deal	valued	at	$1.05	billion.	The	transaction	has	been	approved by	the	boards	of	directors	of	both	companies	and	is	expected	to	close	in	the	first half	of	2013,	subject	to	regulatory	approvals.

In	December	2012,	the	Company	acquired	Spraylat	Corp.,	a	privately-owned industrial	coatings	company	based	in	Pelham,	N.Y.	In	January	2012,	the	Company completed	the	previously	announced	acquisitions	of	Colpisa,	a	Colombian producer	of	automotive	OEM	and	refinish	coatings,	and	Dyrup,	a	European architectural	coatings	company.	The	total	cost	of	2012	acquisitions,	including assumed	debt,	was	$288	million.

Dividends	paid	to	shareholders	totaled	$358	million,	$355	million	and	$360 million	in	2012,	2011	and	2010,	respectively.	PPG	has	paid	uninterrupted	annual dividends	since	1899,	and	2012	marked	the	41st	consecutive	year	of	increased annual	dividend	payments	to	shareholders.

We	did	not	have	a	mandatory	contribution	to	our	U.S.	defined	benefit	pension plans	in	2012	and	we	did	not	make	a	voluntary	contribution	to	these	plans.	In	2011 and	2010,	we	made	voluntary	contributions	to	our	U.S.	defined	benefit	pension plans	of	$50	million	and	$250	million,	respectively.	We	do	not	expect	to	make	a contribution	to	our	U.S.	defined	benefit	pension	plans	in	2013.	Contributions	were made	to	our	non-U.S.	defined	benefit	pension	plans	of	$81	million,	$71	million and	$87	million	for	2012,	2011	and	2010,	respectively,	some	of	which	were required	by	local	funding	requirements.	We	expect	to	make	mandatory contributions	to	our	non-U.S.	plans	in	2013	in	the	range	of	approximately	$75 million	to	$100	million.

The	Company's	share	repurchase	activity	in	2012,	2011	and	2010	was 1	million	shares	at	a	cost	of	$92	million,	10.2	million	shares	at	a	cost	of	$858 million	and	8.1	million	shares	at	a	cost	of	$586	million,	respectively.	No	PPG stock	was	purchased	in	the	last	nine	months	of	2012	during	the	completion	of	the separation	of	its	commodity	chemicals	business	and	subsequent	merger	of	the subsidiary	holding	the	PPG	commodity	chemicals	business	with	a	subsidiary	of Georgia	Gulf.	The	Company	reinitiated	our	share	repurchase	activity	in	the	first quarter	of	2013.	We	anticipate	spending	between	$500	million	and	$750	million for	share	repurchases	during	2013.	We	can	repurchase	nearly	8	million	shares under	the	current	authorization	from	the	Board	of	Directors.

In	September	2012,	PPG	entered	into	a	five-year	credit	agreement	(the	"Credit Agreement")	with	several	banks	and	financial	institutions	as	further	discussed	in Note	8,	"Debt	and	Bank	Credit	Agreements	and	Leases".	The	Credit	Agreement provides	for	a	$1.2	billion	unsecured	revolving	credit	facility.	In	connection	with entering	into	this	Credit	Agreement,	the

Company	terminated	its	$1.2	billion	credit	facility	that	was	scheduled	to	expire	in August	2013.	There	was	no	outstanding	amount	due	under	the	revolving	facility	at the	time	of	its	termination.	The	Company	has	the	ability	to	increase	the	size	of	the Credit	Agreement	by	up	to	an	additional	$300	million,	subject	to	the	receipt	of lender	commitments	and	other	conditions.	The	Credit	Agreement	will	terminate and	all	amounts	outstanding	thereunder	will	be	due	and	payable	on	September	12, 2017.

On	July	31,	2012,	PPG	completed	a	public	offering	of	$400	million	in aggregate	principal	amount	of	its	2.70%	Notes	due	2022	(the	"2022	Notes").	The 2022	Notes	were	offered	by	the	Company	pursuant	to	its	existing	shelf	registration statement.	The	proceeds	of	this	offering	of	$397	million,	net	of	discount	and issuance	costs,	are	expected	to	be	used	to	repay	a	portion	of	the	$600	million	of 5.75%	notes	due	in	March	2013	(the	"2013	Notes").	The	discount	and	issuance costs	related	to	the	2022	Notes,	which	totaled	$3	million,	will	be	amortized	to interest	expense	over	the	life	of	the	2022	Notes.

In	April	2012,	the	Company	reclassified	the	$600	million	of	the	2013	Notes to	"Short-term	debt	and	current	portion	of	long-term	debt"	in	the	accompanying consolidated	balance	sheet	as	these	notes	are	due	to	be	repaid	in	March	2013.	Also during	the	year-ended	December	31,	2012,	the	Company	assumed	$120	million	of debt	in	the	Dyrup	acquisition;	repaid	$119	million	of	that	debt,	and	repaid	the	$71 million	of	6.875%	notes	upon	their	maturity.

    In	June	2011,	the	Company	repaid	a	$400	million	three	year	unsecured	term loan,	which	had	a	scheduled	maturity	date	of	June	2012.	There	was	no	prepayment penalty.	This	$400	million	three	year	unsecured	loan	was	entered	into	in	June	2009 with	a	variable	interest	rate	based	on	a	spread	over	the	LIBOR.	This	term	loan	was repaid	using	a	portion	of	the	proceeds	from	the	$1	billion	debt	we	issued	in November	2010.

    On	November	12,	2010,	PPG	completed	a	public	offering	of	$250	million	in aggregate	principal	amount	of	its	1.900%	Notes	due	2016,	$500	million	in aggregate	principal	amount	of	its	3.600%	Notes	due	2020	and	$250	million	in aggregate	principal	amount	of	its	5.500%	Notes	due	2040.	These	notes	were offered	by	the	Company	pursuant	to	its	existing	shelf	registration	statement.	The proceeds	of	this	offering	were	$983	million	(net	of	discount	and	issuance	costs). We	used	the	proceeds	to	repay	$400	million	in	term	debt	and	to	contribute	to employee	pension	plans	and	we	intend	to	use	the	remainder	of	the	proceeds	to fund	certain	asbestos	claims	and	for	other	general	corporate	purposes	of	the Company.

The	Company	has	$3,476	million	and	$2,920	million	of	undistributed earnings	of	non-U.S.	subsidiaries	as	of	December	31,	2012	and	December	31, 2011,	respectively.	These	amounts	relate	to	approximately	300	subsidiaries	in more	than	70	taxable	jurisdictions.	No	deferred	U.S.	income	taxes	have	been provided	on	these	earnings	as	they	are	considered	to	be

reinvested	for	an	indefinite	period	of	time	or	will	be	repatriated	when	it	is	tax effective	to	do	so.	We	estimate	that	of	these	amounts,	$2,865	million	as	of December	31,	2012	and	$2,454	million	as	of	December	31,	2011	of	the Company's	undistributed	earnings,	could	be	repatriated	at	little	to	no	U.S.	tax	cost due	in	part	to	the	benefit	of	U.S.	foreign	tax	credits	that	would	be	available	if	these earnings	were	repatriated.	The	repatriation	of	undistributed	earnings	of	non-U.S. subsidiaries	of	approximately	$611	million	as	of	December	31,	2012	and	$466 million	as	of	December	31,	2011	would	have	resulted	in	a	U.S.	tax	cost	of approximately	$110	million	and	$85	million,	respectively.

We	continue	to	believe	that	our	cash	and	short	term	investments	on	hand,	cash from	operations	and	the	Company's	available	debt	capacity	will	continue	to	be sufficient	to	fund	our	operating	activities,	capital	spending,	including	acquisitions, dividend	payments,	debt	service,	amounts	due	under	the	proposed	asbestos settlement,	share	repurchases,	contributions	to	pension	plans,	and	PPG's significant	contractual	obligations.	These	significant	contractual	obligations,	along with	amounts	due	under	the	proposed	asbestos	settlement	are	presented	in	the following	table.

| during	the	year-ended	December	31,	2012,	the	Company	assumed	$120	million	of |  |  |  | Obligations	Due	In: | Obligations	Due	In: |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| debt\tin\tthe\tDyrup\tacquisition;\trepaid\t$119\tmillion\tof\tthat\tdebt,\tand\trepaid\tthe\t$71\nmillion\tof\t6.875%\tnotes\tupon\ttheir\tmaturity. | (Millions) | Total | 2013 | 2014-\n2015 | 2016-\n2017 | Thereafter |
| In\tJune\t2011,\tthe\tCompany\trepaid\ta\t$400\tmillion\tthree\tyear\tunsecured\tterm | Contractual\tObligations |  |  |  |  |  |
|  | \t Long-term\tdebt | $3,939 | $600 | $409 | $472 | $2,458 |
|  | \t Short-term\tdebt | 39 | 39 | — | — | — |
| repaid\tusing\ta\tportion\tof\tthe\tproceeds\tfrom\tthe\t$1\tbillion\tdebt\twe\tissued\tin | \t Capital\tlease\tobligations | 32 | 3 | 5 | 5 | 19 |
| November\t2010. | \t Operating\tleases | 695 | 171 | 242 | 147 | 135 |
| On\tNovember\t12,\t2010,\tPPG\tcompleted\ta\tpublic\toffering\tof\t$250\tmillion\tin | Interest\tpayments(1) | 1,604 | 173 | 322 | 269 | 840 |
|  | \t Pension\tcontributions(2) | 77 | 77 | — | — | — |
|  | Unconditional\tpurchase |  |  |  |  |  |
|  | commitments | 648 | 212 | 174 | 82 | 180 |
|  | Total | $7,034 | $1,275 | $1,152 | $975 | $3,632 |
| We\tused\tthe\tproceeds\tto\trepay\t$400\tmillion\tin\tterm\tdebt\tand\tto\tcontribute\tto |  |  |  |  |  |  |
| employee\tpension\tplans\tand\twe\tintend\tto\tuse\tthe\tremainder\tof\tthe\tproceeds\tto |  |  |  |  |  |  |
| fund\tcertain\tasbestos\tclaims\tand\tfor\tother\tgeneral\tcorporate\tpurposes\tof\tthe | Asbestos\tSettlement(3) |  |  |  |  |  |
| Company. | \t Aggregate\tcash\tpayments | $825 | $479 | $5 | $67 | $274 |
| The\tratio\tof\ttotal\tdebt,\tincluding\tcapital\tleases,\tto\ttotal\tdebt\tand\tequity\twas | \t PPG\tstock\tand\tother | 204 | 204 | — | — | — |
| 50%\tat\tDecember\t31,\t2012\tdown\tfrom\t53%\tin\t2011. | Total | $1,029 | $683 | $5 | $67 | $274 |

(1) Includes	interest	on	all	outstanding	debt.	Interest	for	variable-rate	debt	instruments	is based	on	effective	rates	at	December	31,	2012.	Interest	for	fixed-rate	debt	instruments	have been	adjusted	for	the	impact	of	interest	rate	swaps	using	the	effective	rate	at	December	31, 2012.

(2) Includes	the	estimated	pension	contribution	for	2013	only,	as	PPG	is	unable	to	estimate	the pension	contributions	beyond	2013.

(3) We	have	recorded	an	obligation	equal	to	the	net	present	value	of	the	aggregate	cash payments,	along	with	the	PPG	stock	and	other	assets	to	be	contributed	to	a	trust	under	the proposed	asbestos	settlement.	However,	PPG	has	no	obligation	to	pay	any	amounts	under this	settlement	until	the	Funding	Effective	Date,	as	more	fully	discussed	in	Note	15, "Commitments	and	Contingent	Liabilities,"	under	Item	8	of	this	Form	10-K.

The	unconditional	purchase	commitments	are	principally	take-or-pay obligations	related	to	the	purchase	of	certain	materials,	including	industrial	gases, natural	gas,	coal	and	electricity,	consistent	with	customary	industry	practice.	These amounts	also	include	PPG's	commitment	to	purchase	electricity	and	steam	from our	RS	Cogen	joint	venture	discussed	in	Note	5,	"Investments,"	under	Item	8	of this	Form	10-K.

PPG's	interest	in	RS	Cogen	including	the	commitment	to	purchase	electricity of	$234	million,	future	minimum	operating	lease	payments	of	$32	million,	as	well as	$67	million	of	other	unconditional	purchase	obligations	listed	in	the	contractual obligations	table	above	were	transferred	in	the	separation	of	its	commodity chemicals	business	and	subsequent	merger	of	the	subsidiary	holding	the	PPG commodity	chemicals	business	with	a	subsidiary	of	Georgia	Gulf	completed	on January	28,	2013.

See	Note	8,	"Debt	and	Bank	Credit	Agreements	and	Leases,"	under	Item	8	of this	Form	10-K	for	details	regarding	the	use	and	availability	of	committed	and uncommitted	lines	of	credit,	letters	of	credit,	guarantees	and	debt	covenants.

In	addition	to	the	amounts	available	under	the	lines	of	credit,	the	Company has	an	automatic	shelf	registration	statement	on	file	with	the	SEC	pursuant	to which	it	may	issue,	offer	and	sell	from	time	to	time	on	a	continuous	or	delayed basis	any	combination	of	securities	in	one	or	more	offerings.

# Off-Balance	Sheet	Arrangements

The	Company's	off-balance	sheet	arrangements	include	the	operating	leases and	unconditional	purchase	commitments	disclosed	in	the	"Liquidity	and	Capital Resources"	section	in	the	contractual	obligations	table	as	well	as	letters	of	credit and	guarantees	as	discussed	in	Note	8,	"Debt	and	Bank	Credit	Agreements	and Leases,"	under	Item	8	of	this	Form	10-K.

# Critical	Accounting	Estimates

Management	has	evaluated	the	accounting	policies	used	in	the	preparation	of the	financial	statements	and	related	notes	presented	under	Item	8	of	this	Form	10- K	and	believes	those	policies	to	be	reasonable	and	appropriate.	We	believe	that the	most	critical	accounting	estimates	made	in	the	preparation	of	our	financial statements	are	those	related	to	accounting	for	contingencies,	under	which	we accrue	a	loss	when	it	is	probable	that	a	liability	has	been	incurred	and	the	amount can	be	reasonably	estimated,	and	to	accounting	for	pensions,	other	postretirement benefits,	goodwill	and	other	identifiable	intangible	assets	with	indefinite	lives because	of	the	importance	of	management	judgment	in	making	the	estimates necessary	to	apply	these	policies.

Contingencies,	by	their	nature,	relate	to	uncertainties	that	require management	to	exercise	judgment	both	in	assessing	the	likelihood	that	a	liability has	been	incurred	as	well	as	in	estimating	the	amount	of	potential	loss.	The	most important	contingencies	impacting	our	financial	statements	are	those	related	to	the collectability	of	accounts	receivable,	to	environmental	remediation,	to	pending, impending	or	overtly	threatened	litigation	against	the	Company	and	to	the resolution

of	matters	related	to	open	tax	years.	For	more	information	on	these	matters,	see Note	3,	"Working	Capital	Detail,"	Note	13,	"Income	Taxes"	and	Note	15, "Commitments	and	Contingent	Liabilities"	under	Item	8	of	this	Form	10-K.

Accounting	for	pensions	and	other	postretirement	benefits	involves	estimating the	cost	of	benefits	to	be	provided	well	into	the	future	and	attributing	that	cost	over the	time	period	each	employee	works.	To	accomplish	this,	extensive	use	is	made of	assumptions	about	inflation,	investment	returns,	mortality,	turnover,	medical costs	and	discount	rates.	The	Company	has	established	a	process	by	which management	reviews	and	selects	these	assumptions	annually.	See	Note	14, "Pensions	and	Other	Postretirement	Benefits,"	under	Item	8	for	information	on these	plans	and	the	assumptions	used.

The	discount	rate	used	in	accounting	for	pensions	and	other	postretirement benefits	is	determined	by	reference	to	a	current	yield	curve	and	by	considering	the timing	and	amount	of	projected	future	benefit	payments.	The	discount	rate assumption	at	December	31,	2012	and	for	2013	is	4.05%	for	our	U.S.	defined benefit	pension	and	other	postretirement	benefit	plans.	A	change	in	the	discount rate	of	75	basis	points,	with	all	other	assumptions	held	constant,	would	impact 2012	net	periodic	benefit	expense	for	our	defined	benefit	pension	and	other postretirement	benefit	plans	by	approximately	$19	million	and	$9	million, respectively.

The	expected	return	on	plan	assets	assumption	used	in	accounting	for	our pension	plans	is	determined	by	evaluating	the	mix	of	investments	that	comprise plan	assets	and	external	forecasts	of	future	long-term	investment	returns.	For 2012,	the	return	on	plan	assets	assumption	for	our	U.S.	defined	benefit	pension plans	was	7.5%.	This	assumption	will	be	lowered	to	7.25%	for	2013.	A	change	in the	rate	of	return	of	75	basis	points,	with	other	assumptions	held	constant,	would impact	2013	net	periodic	pension	expense	by	approximately	$24	million.

As	discussed	in	Note	1,	"Summary	of	Significant	Accounting	Policies,"	under Item	8	of	this	Form	10-K,	the	Company	tests	goodwill	and	identifiable	intangible assets	with	indefinite	lives	for	impairment	at	least	annually	by	comparing	the	fair value	of	the	reporting	units	to	their	carrying	values.	Fair	values	are	estimated	using discounted	cash	flow	methodologies	that	are	based	on	projections	of	the	amounts and	timing	of	future	revenues	and	cash	flows.	Based	on	this	testing,	none	of	our goodwill	or	identifiable	intangible	assets	with	indefinite	lives	was	impaired	as	of December	31,	2012.

As	part	of	our	ongoing	financial	reporting	process,	a	collaborative	effort	is undertaken	involving	PPG	managers	with	functional	responsibility	for	financial, credit,	environmental,	legal,	tax	and	benefit	matters.	The	results	of	these	efforts provide	management	with	the	necessary	information	on	which	to	base	their judgments	on	these	contingencies	and	to	develop	the	estimates	and	assumptions used	to	prepare	the	financial	statements.

We	believe	that	the	amounts	recorded	in	the	financial	statements	under	Item	8 of	this	Form	10-K	related	to	these	contingencies,	pensions,	other	postretirement benefits,	goodwill

and	other	identifiable	intangible	assets	with	indefinite	lives	are	based	on	the	best estimates	and	judgments	of	the	appropriate	PPG	management,	although	actual outcomes	could	differ	from	our	estimates.

# Currency

The	U.S.	dollar	weakened	from	year-end	December	31,	2011	to	year-end December	31,	2012,	against	certain	currencies	of	the	countries	in	which	PPG operates,	most	notably	against	the	Euro,	the	British	pound	sterling,	Polish	zloty, and	the	South	Korean	won.	A	$141	million	increase	in	PPG	consolidated	net assets	and	shareholders	equity	resulted	from	translating	PPG's	foreign denominated	net	assets	to	U.S.	dollars	at	December	31,	2012,	compared	to December	31,	2011.	Comparing	exchange	rates	during	2012	to	those	of	2011,	in the	countries	in	which	PPG	operates,	the	U.S.	dollar	was	generally	stronger, particularly	against	the	Euro,	which	had	an	unfavorable	impact	on	full	year	2012 pretax	earnings	of	approximately	$40	million	from	the	translation	of	these	foreign earnings	into	U.S.	dollars.

From	December	31,	2010	to	December	31,	2011,	the	U.S.	dollar	strengthened against	the	currencies	of	most	of	the	countries	in	which	PPG	operates,	most notably	against	the	Euro,	the	Brazilian	real,	and	the	Polish	zloty.	A	$188	million decrease	in	PPG	consolidated	net	assets	and	shareholders	equity	resulted	from translating	PPG's	foreign	denominated	net	assets	to	U.S.	dollars	at	December	31, 2011,	compared	to	December	31,	2010.	However,	during	much	of	2011,	the	U.S. dollar	was	weaker	against	the	currencies	of	many	countries	in	which	PPG	operates than	it	was	in	2010,	which	had	a	favorable	impact	on	2011	pretax	earnings	of approximately	$40	million	from	the	translation	of	these	foreign	earnings	into	U.S. dollars.

From	December	31,	2009	to	December	31,	2010,	the	U.S.	dollar	strengthened against	the	Euro,	the	Polish	zloty,	and	the	British	pound	sterling	while	at	the	same time	it	weakened	against	the	Canadian	and	Australian	dollar,	the	Chinese	yuan,	the South	Korean	won,	and	the	Brazilian	real,	which	had	a	nearly	offsetting	effect	on the	translation	of	the	net	assets	of	PPG's	operations	denominated	in	non-U.S. currencies	to	the	U.S.	dollar.	A	$13	million	decrease	resulted	from	translating PPG's	foreign	denominated	net	assets	at	December	31,	2010,	compared	to December	31,	2009.	The	impact	of	translating	foreign	pretax	earnings	into	U.S. dollars	was	insignificant.

# 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	Annual	Report contain	forward-looking	statements	that	reflect	the	Company's	current	views	with respect	to	future	events	and	financial	performance.

You	can	identify	forward-looking	statements	by	the	fact	that	they	do	not relate	strictly	to	current	or	historic	facts.	Forward-looking	statements	are	identified by	the	use	of	the	words	"aim,"	"believe,"	"expect,"	"anticipate,"	"intend," "estimate,"	"project,"	"outlook,"	"forecast"	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,	except	as	otherwise	required	by	applicable	law.	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	global	economic conditions,	increasing	price	and	product	competition	by	foreign	and	domestic competitors,	fluctuations	in	cost	and	availability	of	raw	materials,	the	ability	to maintain	favorable	supplier	relationships	and	arrangements,	difficulties	in integrating	acquired	businesses	and	achieving	expected	synergies	therefrom, economic	and	political	conditions	in	international	markets,	the	ability	to	penetrate existing,	developing	and	emerging	foreign	and	domestic	markets,	foreign exchange	rates	and	fluctuations	in	such	rates,	fluctuations	in	tax	rates,	the	impact of	future	legislation,	the	impact	of	environmental	regulations,	unexpected	business disruptions,	the	unpredictability	of	existing	and	possible	future	litigation,	including litigation	that	could	result	if	the	proposed	asbestos	settlement	does	not	become effective	and	the	effect	of	the	disposition	of	the	Company's	commodity	chemical business.	However,	it	is	not	possible	to	predict	or	identify	all	such	factors. Consequently,	while	the	list	of	factors	presented	here	and	under	Item	1A	is considered	representative,	no	such	list	should	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.

This	Annual	Report	also	contains	statements	about	PPG's	agreement	to purchase	the	North	American	architectural	coatings	business	of	Akzo	Nobel	N.V. (the	"Transaction").	Many	factors	could	cause	actual	results	to	differ	materially from	the	company's	forward-looking	statements	with	respect	to	the	Transaction, including	the	parties'	ability	to	satisfy	the	conditions	to	the	closing	of	the Transaction;	the	parties'	ability	to	complete	the	Transaction	on	anticipated	terms and	schedule;	risks	relating	to	the	ability	of	the	parties	to	obtain	regulatory approvals	for	the	Transaction,	any	unforeseen	liabilities,	future	capital expenditures,	revenues,	expenses,	earnings,	synergies,	economic	performance, indebtedness,	financial	condition,	losses	and	future	prospects;	business	and management	strategies	for	the	management,	expansion	and	growth	of	PPG's coatings	operations;	PPG's	ability	to	integrate	the	North	American	architectural coatings	business	of	Akzo	Nobel	N.V.	after	the	closing	and	to	achieve	anticipated synergies;	and	the	risk	that	disruptions	from	the	Transaction	will	harm	PPG's business.

Consequences	of	material	differences	in	the	results	compared	with	those anticipated	in	the	forward-looking	statements	could	include,	among	other	things, business	disruption,	operational	problems,	financial	loss,	legal	liability	to	third parties,	other	factors	set	forth	in	Item	1A	of	this	Form	10-K	and	similar	risks,	any of	which	could	have	a	material	adverse	effect	on	the	Company's	consolidated financial	condition,	results	of	operations	or	liquidity.

# Item	7A.	Quantitative	and	Qualitative	Disclosures	About	Market	Risk

PPG	is	exposed	to	market	risks	related	to	changes	in	foreign	currency exchange	rates,	interest	rates,	and	natural	gas	prices

and	to	changes	in	PPG's	stock	price.	The	Company	may	enter	into	derivative financial	instrument	transactions	in	order	to	manage	or	reduce	these	market	risks. A	detailed	description	of	these	exposures	and	the	Company's	risk	management policies	are	provided	in	Note	11,	"Derivative	Financial	Instruments	and	Hedge Activities,"	under	Item	8	of	this	Form	10-K.

The	following	disclosures	summarize	PPG's	exposure	to	market	risks	and information	regarding	the	use	of	and	fair	value	of	derivatives	employed	to	manage its	exposure	to	such	risks.	Quantitative	sensitivity	analyses	have	been	provided	to reflect	how	reasonably	possible,	unfavorable	changes	in	market	rates	can	impact PPG's	consolidated	results	of	operations,	cash	flows	and	financial	position.

Foreign	currency	forward	and	option	contracts	outstanding	during	2012	and 2011	were	used	to	hedge	PPG's	exposure	to	foreign	currency	transaction	risk.	The fair	value	of	these	contracts	as	of	December	31,	2012	and	2011	were	assets	of	$3 million	and	liabilities	of	$1	million,	respectively.	The	potential	reduction	in	PPG's earnings	resulting	from	the	impact	of	adverse	changes	in	exchange	rates	on	the	fair value	of	its	outstanding	foreign	currency	hedge	contracts	of	10%	for	European currencies	and	20%	for	Asian	and	South	American	currencies	for	the	years	ended December	31,	2012	and	2011	would	have	been	$14	million	and	$23	million, respectively.

As	of	January	1,	2012,	PPG	had	nine	U.S.	dollar	to	euro	cross	currency	swap contracts	with	a	total	notional	amount	of	$1.16	billion,	of	which	$600	million	were to	settle	on	March	15,	2013	and	$560	million	were	to	settle	on	March	15,	2018.	In June	2012,	$600	million	of	the	swaps,	with	a	settlement	date	of	March	15,	2013, were	settled	with	PPG	receiving	$1	million	in	cash.	On	settlement	of	the remaining	outstanding	contracts,	PPG	will	receive	$560	million	U.S.	dollars	and pay	euros	to	the	counterparties	to	the	contracts.	During	the	term	of	these	contracts, PPG	will	receive	semiannual	payments	in	March	and	September	of	each	year based	on	U.S.	dollar,	long-term	fixed	interest	rates,	and	PPG	will	make	annual payments	in	March	of	each	year	to	the	counterparties	based	on	euro,	long-term fixed	interest	rates.	The	Company	designated	all	of	the	cross	currency	swaps	as hedges	of	its	net	investment	in	the	acquired	SigmaKalon	businesses	and,	as	a result,	the	mark	to	fair	value	adjustments	of	the	swaps	outstanding	have	been	and will	be	recorded	as	a	component	of	Accumulated	Other	Comprehensive	Loss (Income)	("AOCI"),	and	the	cash	flow	impact	of	these	swaps	has	been	and	will	be classified	as	investing	activities	in	the	consolidated	statement	of	cash	flows.	As	of December	31,	2012	and	December	31,	2011,	the	fair	value	of	these	contracts	was	a net	liability	of	$95	million	and	$120	million,	respectively.	A	10%	increase	in	the value	of	the	euro	to	the	U.S.	dollar	would	have	had	an	unfavorable	effect	on	the fair	value	of	these	swap	contracts	and	increased	the	liability	by	$84	million	and $153	million	at	December	31,	2012	and	2011,	respectively.

PPG	had	non-U.S.	dollar	denominated	debt	outstanding	of	$449	million	as	of December	31,	2012	and	$441	million	as	of	December	31,	2011.	A	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	$51	million	and	$50	million	as	of	December	31,	2012	and	2011, respectively.

The	Company	manages	its	interest	rate	risk	by	balancing	its	exposure	to	fixed and	variable	rates	while	attempting	to	minimize	its	interest	costs.	At	December	31, 2011,	the	notional	value	of	interest	rate	swaps	converted	$445	million	of	fixed	rate debt	to	variable	rate	debt.	During	2012,	PPG	settled	these	swaps,	receiving	$29 million	from	such	settlements.	The	fair	value	of	these	swaps	was	an	asset	of	$26 million,	as	of	December	31,	2011.	The	fair	value	of	these	swaps	would	have changed	unfavorably	by	$1	million	as	of	December	31,	2011,	if	variable	interest rates	increased	by	10%.	A	10%	increase	in	interest	rates	in	the	U.S.,	Canada, Mexico	and	Europe	and	a	20%	increase	in	interest	rates	in	Asia	and	South America	would	have	affected	PPG's	variable	rate	debt	obligations	by	increasing interest	expense	approximately	$0.1	million	and	$1	million	for	the	years	ended December	31,	2012	and	2011,	respectively.	Further,	a	10%	reduction	in	interest rates	would	have	increased	the	present	value	of	the	Company's	fixed	rate	debt	by approximately	$81	million	and	$90	million	as	of	December	31,	2012	and	2011, respectively;	however,	such	changes	would	not	have	had	an	effect	on	PPG's annual	earnings	or	cash	flows.

	The	Company	entered	into	forward	starting	swaps	in	2009	and	in	the	second quarter	of	2010	to	effectively	lock-in	a	fixed	interest	rate	for	future	debt refinancings	with	an	anticipated	term	of	ten	years	based	on	the	ten	year	swap	rate, to	which	was	added	a	corporate	spread.	The	notional	amount	of	these	swaps	was $400	million.	All	of	the	swap	contracts	were	settled	on	July	30,	2012,	resulting	in a	cash	payment	of	$121	million.	As	of	December	31,	2011,	the	fair	value	of	these swaps	was	a	liability	of	$92	million.	A	10%	decline	in	interest	rates	would	have unfavorably	affected	the	fair	value	of	these	swaps	by	$9	million	as	of December	31,	2011.

The	Company	used	derivative	instruments	to	manage	its	exposure	to fluctuating	natural	gas	prices	through	the	use	of	natural	gas	swap	contracts.	There were	no	natural	gas	swap	contracts	outstanding	as	of	December	31,	2012	as	the price	of	natural	gas	declined	for	the	past	four	years	and	is	not	expected	to	be	as volatile	over	the	next	12	to	18	months	as	continued	development	of	shale	oil	and gas	reserves	is	expected	to	maintain	downward	pressure	on	the	price	of	natural gas.	As	of	December	31,	2011,	the	fair	value	of	the	contracts	was	a	liability	of	$9 million.	A	10%	reduction	in	the	price	of	natural	gas	would	have	had	an unfavorable	effect	on	the	fair	value	of	these	contracts	by	increasing	the	liability	by $2	million	at	December	31,	2011.

An	equity	forward	arrangement	was	entered	into	to	hedge	the	Company's exposure	to	changes	in	fair	value	of	its	future	obligation	to	contribute	PPG	stock into	an	asbestos	settlement	trust	(see	Note	11	"Derivative	Financial	Instruments and	Hedge	Activities"	and	Note	15,	"Commitments	and	Contingent	Liabilities," under	Item	8	of	this	Form	10-K).	The	fair	value	of	this	instrument	as	of December	31,	2012	and	2011	was	an	asset	of	$130	million	and	$56	million, respectively.	A	10%	decrease	in	PPG's	stock	price	would	have	had	an	unfavorable effect	on	the	fair	value	of	this	instrument	of	$19	million	and	$12	million	at December	31,	2012	and	2011,	respectively.

# Item	8.	Financial	Statements	and	Supplementary	Data

# Internal	Controls	–	Report	of	Independent	Registered	Public	Accounting	Firm

# To	the	Board	of	Directors	and	Shareholders	of	PPG	Industries,	Inc.

We	have	audited	the	internal	control	over	financial	reporting	of	PPG	Industries,	Inc.	and	subsidiaries	(the	"Company")	as	of	December	31,	2012,	based	on	criteria established	in	Internal	Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	The	Company's management	is	responsible	for	maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial reporting,	included	in	the	accompanying	Management	Report.	Our	responsibility	is	to	express	an	opinion	on	the	Company's	internal	control	over	financial	reporting based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the	design	and operating	effectiveness	of	internal	control	based	on	the	assessed	risk,	and	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We	believe that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	by,	or	under	the	supervision	of,	the	company's	principal	executive	and	principal financial	officers,	or	persons	performing	similar	functions,	and	effected	by	the	company's	board	of	directors,	management,	and	other	personnel	to	provide	reasonable assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted accounting	principles.	A	company's	internal	control	over	financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the company	are	being	made	only	in	accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(3)	provide	reasonable	assurance	regarding prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	the	inherent	limitations	of	internal	control	over	financial	reporting,	including	the	possibility	of	collusion	or	improper	management	override	of	controls, material	misstatements	due	to	error	or	fraud	may	not	be	prevented	or	detected	on	a	timely	basis.	Also,	projections	of	any	evaluation	of	the	effectiveness	of	the	internal control	over	financial	reporting	to	future	periods	are	subject	to	the	risk	that	the	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of compliance	with	the	policies	or	procedures	may	deteriorate.

In	our	opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2012,	based	on	the	criteria established	in	Internal	Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.

We	have	also	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	financial	statements and	financial	statement	schedule	as	of	and	for	the	year	ended	December	31,	2012	of	the	Company	and	our	report	dated	February	21,	2013	expressed	an	unqualified opinion	on	those	financial	statements	and	financial	statement	schedule.

# /s/	Deloitte	&	Touche	LLP

# Deloitte	&	Touche	LLP

Pittsburgh,	Pennsylvania February	21,	2013

# Management	Report

# Responsibility	for	Preparation	of	the	Financial	Statements	and	Establishing	and	Maintaining	Adequate	Internal	Control	Over	Financial	Reporting

We	are	responsible	for	the	preparation	of	the	financial	statements	included	in	this	Annual	Report.	The	financial	statements	were	prepared	in	accordance	with accounting	principles	generally	accepted	in	the	United	States	of	America	and	include	amounts	that	are	based	on	the	best	estimates	and	judgments	of	management.

We	are	also	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting	as	defined	in	Rules	13a-15(f)	and	15d-15(f)	under	the Securities	Exchange	Act	of	1934,	as	amended.	All	internal	control	systems,	no	matter	how	well	designed,	have	inherent	limitations.	Therefore,	a	system	of	internal control	over	financial	reporting	can	provide	only	reasonable	assurance	and	may	not	prevent	or	detect	misstatements.	In	addition,	because	of	changing	conditions,	there	is risk	in	projecting	any	evaluation	of	internal	controls	to	future	periods.

We	conducted	an	evaluation	of	the	effectiveness	of	the	Company's	internal	control	over	financial	reporting	as	of	December	31,	2012.	In	making	this	evaluation,	we used	the	criteria	set	forth	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO)	in	Internal	Control	-	Integrated	Framework.	Our evaluation	included	reviewing	the	documentation	of	our	controls,	evaluating	the	design	effectiveness	of	our	controls	and	testing	their	operating	effectiveness.	Based	on this	evaluation	we	believe	that,	as	of	December	31,	2012,	the	Company's	internal	controls	over	financial	reporting	were	effective.

Deloitte	&	Touche	LLP,	an	independent	registered	public	accounting	firm,	has	issued	their	report,	included	on	page	32	of	this	Form	10-K,	regarding	the	Company's internal	control	over	financial	reporting.

# /s/	Charles	E.	Bunch

# Charles	E.	Bunch

Chairman and	Chief	Executive	Officer

# /s/	David	B.	Navikas

# David	B.	Navikas

Senior	Vice	President,	Finance	and Chief	Financial	Officer February	21,	2013

# Consolidated	Financial	Statements	–	Report	of	Independent	Registered	Public	Accounting	Firm

We	have	audited	the	accompanying	consolidated	balance	sheets	of	PPG	Industries,	Inc.	and	subsidiaries	(the	"Company")	as	of	December	31,	2012	and	2011,	and the	related	consolidated	statements	of	income,	comprehensive	income,	shareholders'	equity,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31, 2012.	Our	audits	also	included	the	financial	statement	schedule	listed	in	the	Index	at	Item	15(a)(2).	These	financial	statements	and	the	financial	statement	schedule	are the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	the	financial	statements	and	the	financial	statement	schedule	based	on our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we plan	and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a test	basis,	evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant estimates	made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	such	consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	financial	position	of	PPG	Industries,	Inc.	and	subsidiaries	as	of December	31,	2012	and	2011,	and	the	results	of	their	operations	and	their	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2012,	in	conformity with	accounting	principles	generally	accepted	in	the	United	States	of	America.	Also,	in	our	opinion,	such	financial	statement	schedule,	when	considered	in	relation	to	the basic	consolidated	financial	statements	taken	as	a	whole,	presents	fairly,	in	all	material	respects,	the	information	set	forth	therein.

We	have	also	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	Company's	internal	control	over financial	reporting	as	of	December	31,	2012,	based	on	the	criteria	established	in	Internal	Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring Organizations	of	the	Treadway	Commission	and	our	report	dated	February	21,	2013	expressed	an	unqualified	opinion	on	the	Company's	internal	control	over	financial reporting.

Pittsburgh,	Pennsylvania

# Consolidated	Statement	of	Income

| (Millions,	except	per	share	amounts) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tsales | $15,200 | $14,885 | $13,423 |
| Cost\tof\tsales,\texclusive\tof\tdepreciation\tand\tamortization | 9,069 | 9,081 | 8,214 |
| Selling,\tgeneral\tand\tadministrative | 3,335 | 3,234 | 2,979 |
| Depreciation | 355 | 346 | 346 |
| Amortization\t(See\tNote\t6) | 110 | 121 | 124 |
| Research\tand\tdevelopment\t–\tnet\t(See\tNote\t22) | 455 | 430 | 394 |
| Interest\texpense | 210 | 210 | 189 |
| Interest\tincome | (39) | (42) | (34) |
| Asbestos\tsettlement\t–\tnet\t(See\tNotes\t11\tand\t15) | 12 | 12 | 12 |
| Business\trestructuring\t(See\tNote\t7) | 208 | — | — |
| Other\tcharges\t(See\tNote\t15) | 232 | 73 | 84 |
| Other\tearnings\t(See\tNote\t19) | (149) | (177) | (180) |
| Income\tbefore\tincome\ttaxes | 1,402 | 1,597 | 1,295 |
| Income\ttax\texpense\t(See\tNote\t13) | 338 | 385 | 415 |
| Net\tincome\tattributable\tto\tthe\tcontrolling\tand\tnoncontrolling\tinterests | 1,064 | 1,212 | 880 |
| Less:\tnet\tincome\tattributable\tto\tnoncontrolling\tinterests | 123 | 117 | 111 |
| Net\tincome\t(attributable\tto\tPPG) | $941 | $1,095 | $769 |
| Earnings\tper\tcommon\tshare\t(See\tNote\t12) |  |  |  |
| Net\tincome\t(attributable\tto\tPPG) | $6.13 | $6.96 | $4.67 |
| Earnings\tper\tcommon\tshare\t–\tassuming\tdilution\t(See\tNote\t12) |  |  |  |
| Net\tIncome\t(attributable\tto\tPPG) | $6.06 | $6.87 | $4.63 |

# Consolidated	Statement	of	Comprehensive	Income

| (Millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tincome\tattributable\tto\tthe\tcontrolling\tand\tnoncontrolling\tinterests | $1,064 | $1,212 | $880 |
| Other\tcomprehensive\tincome\t/\t(loss),\tnet\tof\ttax\t(See\tNote\t17) |  |  |  |
| Unrealized\tcurrency\ttranslation\tadjustment | 146 | (197) | (11) |
| Defined\tbenefit\tpension\tand\tother\tpostretirement\tbenefit\tadjustments\t(See\tNote\t14) | — | (169) | (136) |
| Unrealized\tgains\ton\tmarketable\tequity\tsecurities | — | — | 1 |
| Net\tchange\t–\tderivatives\t(See\tNote\t11) | (7) | (32) | (2) |
| Other\tcomprehensive\tincome\t/\t(loss),\tnet\tof\ttax | 139 | (398) | (148) |
| Total\tcomprehensive\tincome | $1,203 | $814 | $732 |
| Less:\tamounts\tattributable\tto\tnoncontrolling\tinterests: |  |  |  |
| Net\tincome | (123) | (117) | (111) |
| Unrealized\tcurrency\ttranslation\tadjustment | (5) | 9 | (2) |
| Comprehensive\tincome\tattributable\tto\tPPG | $1,075 | $706 | $619 |

The	accompanying	notes	to	the	consolidated	financial	statements	are	an	integral	part	of	these	consolidated	statements.

# Consolidated	Balance	Sheet

| (Millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Assets |  |  |
| Current\tassets |  |  |
| Cash\tand\tcash\tequivalents | $1,306 | $1,457 |
| Short-term\tinvestments\t(See\tNote\t9) | 1,087 | 25 |
| Receivables\t(See\tNote\t3) | 2,813 | 2,830 |
| Inventories\t(See\tNote\t3) | 1,687 | 1,607 |
| Deferred\tincome\ttaxes\t(See\tNote\t13) | 430 | 473 |
| Other | 392 | 302 |
| Total\tcurrent\tassets | 7,715 | 6,694 |
| Property\t(See\tNote\t4) | 9,030 | 8,614 |
| Less\taccumulated\tdepreciation | 6,142 | 5,893 |
| Property\t–\tnet | 2,888 | 2,721 |
| Investments\t(See\tNote\t5) | 422 | 387 |
| Goodwill\t(See\tNote\t6) | 2,761 | 2,660 |
| Identifiable\tintangible\tassets\t–\tnet\t(See\tNote\t6) | 1,085 | 1,125 |
| Other\tassets | 1,007 | 795 |
| Total | $15,878 | $14,382 |
| Liabilities\tand\tShareholders'\tEquity |  |  |
| Current\tliabilities |  |  |
| Short-term\tdebt\tand\tcurrent\tportion\tof\tlong-term\tdebt\t(See\tNote\t8) | $642 | $108 |
| Asbestos\tsettlement\t(See\tNote\t15) | 683 | 593 |
| Accounts\tpayable\tand\taccrued\tliabilities\t(See\tNote\t3) | 3,061 | 2,996 |
| Business\trestructuring\t(See\tNote\t7) | 75 | 5 |
| Total\tcurrent\tliabilities | 4,461 | 3,702 |
| Long-term\tdebt\t(See\tNote\t8) | 3,368 | 3,574 |
| Asbestos\tsettlement\t(See\tNote\t15) | 237 | 241 |
| Deferred\tincome\ttaxes\t(See\tNote\t13) | 231 | 272 |
| Accrued\tpensions\t(See\tNote\t14) | 1,057 | 968 |
| Other\tpostretirement\tbenefits\t(See\tNote\t14) | 1,287 | 1,307 |
| Other\tliabilities | 915 | 872 |
| Total\tliabilities | 11,556 | 10,936 |
| Commitments\tand\tcontingent\tliabilities\t(See\tNote\t15) |  |  |
| Shareholders'\tequity\t(See\tNote\t16) |  |  |
| Common\tstock | 484 | 484 |
| Additional\tpaid-in\tcapital | 870 | 783 |
| Retained\tearnings | 9,871 | 9,288 |
| Treasury\tstock,\tat\tcost | (5,496) | (5,506) |
| Accumulated\tother\tcomprehensive\tloss\t(See\tNote\t17) | (1,666) | (1,800) |
| Total\tPPG\tshareholders'\tequity | 4,063 | 3,249 |
| Noncontrolling\tinterests | 259 | 197 |
| Total\tshareholders'\tequity | 4,322 | 3,446 |
| Total | $15,878 | $14,382 |

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

# Consolidated	Statement	of	Shareholders'	Equity

| (Millions) | Common<br>Stock | Additional<br>Paid-In<br>Capital | Retained<br>Earnings | Treasury<br>Stock | Comprehensive<br>Loss<br>(See	Note	17) | Total<br>PPG | Non-<br>controlling<br>Interests | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Balance,\tJanuary\t1,\t2010 | $484 | $609 | $8,139 | $(4,218) | $(1,261) | $3,753 | $169 | $3,922 |
| Net\tincome\tattributable\tto\tthe\tcontrolling\tand\tnoncontrolling |  |  |  |  |  |  |  |  |
| interests | — | — | 769 | — | — | 769 | 111 | 880 |
| Other\tcomprehensive\tincome,\tnet\tof\ttax | — | — | — | — | (150) | (150) | 2 | (148) |
| Cash\tdividends | — | — | (360) | — | — | (360) | — | (360) |
| Purchase\tof\ttreasury\tstock | — | — | — | (521) | — | (521) | — | (521) |
| Issuance\tof\ttreasury\tstock | — | 77 | — | 96 | — | 173 | — | 173 |
| Stock-based\tcompensation\tactivity | — | 12 | — | — | — | 12 | — | 12 |
| Equity\tforward\tarrangement | — | 27 | — | (65) | — | (38) | — | (38) |
| Dividends\tpaid\ton\tsubsidiary\tcommon\tstock\tto\tnoncontrolling\ninterests | — | — | — | — | — | — | (87) | (87) |
| Balance,\tDecember\t31,\t2010 | $484 | $725 | $8,548 | $(4,708) | $(1,411) | $3,638 | $195 | $3,833 |
| Net\tincome\tattributable\tto\tthe\tcontrolling\tand\tnoncontrolling |  |  |  |  |  |  |  |  |
| interests | — | — | 1,095 | — | — | 1,095 | 117 | 1,212 |
| Other\tcomprehensive\t(loss)\tincome,\tnet\tof\ttax | — | — | — | — | (389) | (389) | (9) | (398) |
| Cash\tdividends | — | — | (355) | — | — | (355) | — | (355) |
| Purchase\tof\ttreasury\tstock | — | — | — | (858) | — | (858) | — | (858) |
| Issuance\tof\ttreasury\tstock | — | 47 | — | 60 | — | 107 | — | 107 |
| Stock-based\tcompensation\tactivity | — | 11 | — | — | — | 11 | — | 11 |
| Dividends\tpaid\ton\tsubsidiary\tcommon\tstock\tto\tnoncontrolling\ninterests | — | — | — | — | — | — | (106) | (106) |
| Balance,\tDecember\t31,\t2011 | $484 | $783 | $9,288 | $(5,506) | $(1,800) | $3,249 | $197 | $3,446 |
| Net\tincome\tattributable\tto\tthe\tcontrolling\tand\tnoncontrolling\ninterests | — | — | 941 | — | — | 941 | 123 | 1,064 |
| Other\tcomprehensive\tloss,\tnet\tof\ttax | — | — | — | — | 134 | 134 | 5 | 139 |
| Cash\tdividends | — | — | (358) | — | — | (358) | — | (358) |
| Purchase\tof\ttreasury\tstock | — | — | — | (92) | — | (92) | — | (92) |
| Issuance\tof\ttreasury\tstock | — | 35 | — | 102 | — | 137 | — | 137 |
| Stock-based\tcompensation\tactivity | — | 55 | — | — | — | 55 | — | 55 |
| Dividends\tpaid\ton\tsubsidiary\tcommon\tstock\tto\tnoncontrolling\ninterests | — | — | — | — | — | — | (111) | (111) |
| Joint\tventure\tformation\tand\tconsolidation\t(See\tNote\t5) | — | (3) | — | — | — | (3) | 45 | 42 |
| Balance,\tDecember\t31,\t2012 | $484 | $870 | $9,871 | $(5,496) | $(1,666) | $4,063 | $259 | $4,322 |

# Consolidated	Statement	of	Cash	Flows

| (Millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Operating\tactivities |  |  |  |
| Net\tincome\tattributable\tto\tthe\tcontrolling\tand\tnoncontrolling\tinterests | $1,064 | $1,212 | $880 |
| Adjustments\tto\treconcile\tto\tcash\tfrom\toperations: |  |  |  |
| Depreciation\tand\tamortization | 465 | 467 | 470 |
| Pension\texpense | 159 | 131 | 161 |
| Business\trestructuring\t(See\tNote\t7) | 208 | — | — |
| Environmental\tremediation\tcharge\t(See\tNote\t15) | 159 | — | — |
|  | — | — | 85 |
| Equity\taffiliate\t(earnings),\tnet\tof\tdividends | 1 | (18) | (39) |
| Asbestos\tsettlement,\tnet\tof\ttax | 7 | 7 | 7 |
| Cash\tcontributions\tto\tpension\tplans | (81) | (121) | (340) |
| Restructuring\tcash\tspending | (88) | (18) | (103) |
| Change\tin\tcertain\tasset\tand\tliability\taccounts: |  |  |  |
| Decrease\t/\t(increase)\tin\treceivables | 90 | (129) | (188) |
| Decrease\t/\t(increase)\tin\tinventories | 29 | (73) | (34) |
| Decrease\t/\t(increase)\tin\tother\tcurrent\tassets | 4 | (32) | 16 |
| (Decrease)\t/\tincrease\tin\taccounts\tpayable\tand\taccrued\tliabilities | (10) | 22 | 306 |
| Increase\tin\tnoncurrent\tassets | (30) | (3) | (9) |
| Decrease\tin\tnoncurrent\tliabilities | (45) | (12) | (22) |
| Change\tin\taccrued\ttax\tand\tinterest\taccounts | (158) | 39 | 170 |
| Other | 13 | (36) | (50) |
| Cash\tfrom\toperating\tactivities | 1,787 | 1,436 | 1,310 |
| Investing\tactivities |  |  |  |
| Capital\tspending: |  |  |  |
| Additions\tto\tproperty\tand\tinvestments | (411) | (390) | (307) |
| Business\tacquisitions,\tnet\tof\tcash\tbalances\tacquired\t(See\tNote\t2) | (122) | (56) | (34) |
| Deposit\tof\tcash\tinto\tescrow\t(See\tNote\t2) | (35) | (16) | (7) |
| Release\tof\tcash\theld\tin\tescrow | 19 | — | 1 |
| Proceeds\tfrom\tmaturity\tof\tshort-term\tinvestments | 250 | 749 | — |
| Purchase\tof\tshort-term\tinvestments | (1,332) | (125) | (624) |
| Payments\ton\tcross\tcurrency\tswap\tcontracts\t(See\tNote\t11) | (23) | (10) | (9) |
| Proceeds\tfrom\ttermination\tof\tcross\tcurrency\tswap\tcontracts\t(See\tNote\t11) | 1 | — | 5 |
| Collection\tof\tnotes\treceivable,\tequity\taffiliate\t(See\tNote\t5) | — | 90 | — |
| Return\tof\tcapital,\tequity\taffiliate\t(See\tNote\t5) | — | 78 | — |
| Reductions\tof\tother\tproperty\tand\tinvestments | 42 | 33 | 26 |
| Cash\tfrom/(used\tfor)\tinvesting\tactivities | (1,611) | 353 | (949) |
| Financing\tactivities |  |  |  |
| Debt: |  |  |  |
| Net\tchange\tin\tborrowings\twith\tmaturities\tof\tthree\tmonths\tor\tless | (1) | 9 | (23) |
| Proceeds\tfrom\tlong\tterm\tdebt\t(net\tof\tdiscount\tand\tissuance\tcosts)\t(See\tNote\t8) | 397 | — | 983 |
| Proceeds\tfrom\tother\tdebt | — | 7 | 15 |
| Repayment\tof\tlong-term\tdebt\t(See\tNote\t8) | (71) | (400) | — |
| Repayment\tof\tacquired\tdebt\t(See\tNote\t8) | (119) | — | — |
| Repayment\tof\tother\tdebt | (13) | (7) | (239) |
| Settlement\tof\tforward\tstarting\tswaps\t(Note\t11) | (121) | — | — |
| Proceeds\tfrom\ttermination\tof\tinterest\trate\tswaps | 29 | 19 | — |
| Other\tfinancing\tactivities: |  |  |  |
| Purchase\tof\ttreasury\tstock | (92) | (858) | (586) |
| Issuance\tof\ttreasury\tstock | 122 | 81 | 146 |
| Dividends\tpaid\ton\tsubsidiary\tcommon\tstock\tto\tnoncontrolling\tinterests | (111) | (106) | (87) |
| Dividends\tpaid\ton\tPPG\tcommon\tstock | (358) | (355) | (360) |
| Other | (13) | (22) | 47 |
| Cash\tused\tfor\tfinancing\tactivities | (351) | (1,632) | (104) |
| Effect\tof\tcurrency\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | 24 | (41) | 27 |
| Net\t(decrease)\t/\tincrease\tin\tcash\tand\tcash\tequivalents | (151) | 116 | 284 |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tyear | 1,457 | 1,341 | 1,057 |
| Cash\tand\tcash\tequivalents,\tend\tof\tyear | $1,306 | $1,457 | $1,341 |

# Notes	to	the	Consolidated	Financial	Statements

# 1.	Summary	of	Significant	Accounting	Policies

# Principles	of	Consolidation

The	accompanying	consolidated	financial	statements	include	the	accounts	of PPG	Industries,	Inc.	("PPG"	or	the	"Company")	and	all	subsidiaries,	both	U.S.	and non-U.S.,	that	it	controls.	PPG	owns	more	than	50%	of	the	voting	stock	of	most	of the	subsidiaries	that	it	controls.	For	those	consolidated	subsidiaries	in	which	the Company's	ownership	is	less	than	100%,	the	outside	shareholders'	interests	are shown	as	noncontrolling	interests.	Investments	in	companies	in	which	PPG	owns 20%	to	50%	of	the	voting	stock	and	has	the	ability	to	exercise	significant	influence over	operating	and	financial	policies	of	the	investee	are	accounted	for	using	the equity	method	of	accounting.	As	a	result,	PPG's	share	of	the	earnings	or	losses	of such	equity	affiliates	is	included	in	the	accompanying	consolidated	statement	of income	and	PPG's	share	of	these	companies'	shareholders'	equity	is	included	in "Investments"	in	the	accompanying	consolidated	balance	sheet.	Transactions between	PPG	and	its	subsidiaries	are	eliminated	in	consolidation.

# Use	of	Estimates	in	the	Preparation	of	Financial	Statements

The	preparation	of	financial	statements	in	conformity	with	U.S.	generally accepted	accounting	principles	requires	management	to	make	estimates	and assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities	and	the disclosure	of	contingent	assets	and	liabilities	at	the	date	of	the	financial statements,	as	well	as	the	reported	amounts	of	income	and	expenses	during	the reporting	period.	Actual	outcomes	could	differ	from	those	estimates.

# Revenue	Recognition

Revenue	from	sales	is	recognized	by	all	operating	segments	when	goods	are shipped	and	title	to	inventory	and	risk	of	loss	passes	to	the	customer	or	when services	have	been	rendered.

# Shipping	and	Handling	Costs

Amounts	billed	to	customers	for	shipping	and	handling	are	reported	in	"Net sales"	in	the	accompanying	consolidated	statement	of	income.	Shipping	and handling	costs	incurred	by	the	Company	for	the	delivery	of	goods	to	customers	are included	in	"Cost	of	sales,	exclusive	of	depreciation	and	amortization"	in	the accompanying	consolidated	statement	of	income.

# Selling,	General	and	Administrative	Costs

Amounts	presented	as	"Selling,	general	and	administrative"	in	the accompanying	consolidated	statement	of	income	are	comprised	of	selling, customer	service,	distribution	and	advertising	costs,	as	well	as	the	costs	of providing	corporate-wide	functional	support	in	such	areas	as	finance,	law,	human resources	and	planning.	Distribution	costs	pertain	to	the	movement	and	storage	of finished	goods	inventory	at	company-owned	and	leased	warehouses,	terminals	and other	distribution	facilities.	Certain	of	these	costs	may	be	included	in	cost	of	sales by	other	companies,	resulting	in	a	lack	of	comparability	with	other	companies.

# Legal	Costs

Legal	costs	are	expensed	as	incurred.

# Foreign	Currency	Translation

The	functional	currency	of	most	significant	non-U.S.	operations	is	their	local currency.	Assets	and	liabilities	of	those	operations	are	translated	into	U.S.	dollars using	year-end	exchange	rates;	income	and	expenses	are	translated	using	the average	exchange	rates	for	the	reporting	period.	Unrealized	currency	translation adjustments	are	deferred	in	accumulated	other	comprehensive	loss,	a	separate component	of	shareholders'	equity.

# Cash	Equivalents

Cash	equivalents	are	highly	liquid	investments	(valued	at	cost,	which approximates	fair	value)	acquired	with	an	original	maturity	of	three	months	or less.

# Short-term	Investments

Short-term	investments	are	highly	liquid,	high	credit	quality	investments (valued	at	cost	plus	accrued	interest)	that	have	stated	maturities	of	greater	than three	months	to	one	year.	The	purchases	and	sales	of	these	investments	are classified	as	investing	activities	in	the	consolidated	statement	of	cash	flows.

# Marketable	Equity	Securities

The	Company's	investment	in	marketable	equity	securities	is	recorded	at	fair market	value	and	reported	in	"Other	current	assets"	and	"Investments"	in	the accompanying	consolidated	balance	sheet	with	changes	in	fair	market	value recorded	in	income	for	those	securities	designated	as	trading	securities	and	in	other comprehensive	income,	net	of	tax,	for	those	designated	as	available	for	sale securities.

# Inventories

Most	U.S.	inventories	are	stated	at	cost,	using	the	last-in,	first-out	("LIFO") method	of	accounting,	which	does	not	exceed	market.	All	other	inventories	are stated	at	cost,	using	the	first-in,	first-out	("FIFO")	method	of	accounting,	which does	not	exceed	market.	PPG	determines	cost	using	either	average	or	standard factory	costs,	which	approximate	actual	costs,	excluding	certain	fixed	costs	such as	depreciation	and	property	taxes.

# Property

Property	is	recorded	at	cost.	PPG	computes	depreciation	by	the	straight-line method	based	on	the	estimated	useful	lives	of	depreciable	assets.	Additional expense	is	recorded	when	facilities	or	equipment	are	subject	to	abnormal economic	conditions	or	obsolescence.

Significant	improvements	that	add	to	productive	capacity	or	extend	the	lives of	properties	are	capitalized.	Costs	for	repairs	and	maintenance	are	charged	to expense	as	incurred.	When	property	is	retired	or	otherwise	disposed	of,	the original	cost	and	related	accumulated	depreciation	balance	are	removed	from	the accounts	and	any	related	gain	or	loss	is	included	in	income.	Amortization	of	the cost	of	capitalized	leased	assets	is	included	in	depreciation	expense.	Property	and other	long-lived	assets	are	reviewed	for	impairment	whenever	events	or circumstances	indicate	that	their	carrying	amounts	may	not	be	recoverable.

# Goodwill	and	Identifiable	Intangible	Assets

Goodwill	represents	the	excess	of	the	cost	over	the	fair	value	of	acquired identifiable	tangible	and	intangible	assets	less	liabilities	assumed	from	acquired businesses.	Identifiable	intangible	assets	acquired	in	business	combinations	are recorded	based	upon	their	fair	value	at	the	date	of	acquisition.

The	Company	tests	goodwill	of	each	reporting	unit	for	impairment	at	least annually	in	connection	with	PPG's	strategic	planning	process.	The	goodwill impairment	test	is	performed	by	comparing	the	estimated	fair	value	of	the associated	reporting	unit	as	of	September	30	to	its	carrying	value.	The	Company's reporting	units	are	its	operating	segments.	(See	Note	24,	"Reportable	Business Segment	Information"	for	further	information	concerning	the	Company's operating	segments.)	Fair	value	is	estimated	using	discounted	cash	flow methodologies.

The	Company	has	determined	that	certain	acquired	trademarks	have indefinite	useful	lives.	The	Company	tests	the	carrying	value	of	these	trademarks for	impairment	at	least	annually,	as	of	September	30,	by	comparing	the	fair	value of	each	trademark	to	its	carrying	value.	Fair	value	is	estimated	by	using	the	relief from	royalty	method	(a	discounted	cash	flow	methodology).

Identifiable	intangible	assets	with	finite	lives	are	amortized	on	a	straight-line basis	over	their	estimated	useful	lives	(2	to	25	years)	and	are	reviewed	for impairment	whenever	events	or	circumstances	indicate	that	their	carrying	amount may	not	be	recoverable.

# Allowance	for	Doubtful	Accounts

The	Company	provides	an	allowance	for	doubtful	accounts	to	reduce receivables	to	their	estimated	net	realizable	value	when	it	is	probable	that	a	loss will	be	incurred.	Those	estimates	are	based	on	historical	collection	experience, current	economic	and	market	conditions,	a	review	of	the	aging	of	accounts receivable	and	the	assessments	of	current	creditworthiness	of	customers.

# Product	Warranties

The	Company	accrues	for	product	warranties	at	the	time	the	associated products	are	sold	based	on	historical	claims	experience.	As	of	December	31,	2012 and	2011,	the	reserve	for	product	warranties	was	$14	million	and	$11	million, respectively.	Pretax	charges	against	income	for	product	warranties	in	2012,	2011 and	2010	totaled	$15	million,	$14	million	and	$7	million,	respectively.	Cash outlays	related	to	product	warranties	were	$12	million,	$10	million;	$7	million	in 2012,	2011	and	2010	respectively.

# Asset	Retirement	Obligations

An	asset	retirement	obligation	represents	a	legal	obligation	associated	with the	retirement	of	a	tangible	long-lived	asset	that	is	incurred	upon	the	acquisition, construction,	development	or	normal	operation	of	that	long-lived	asset.	PPG recognizes	asset	retirement	obligations	in	the	period	in	which	they	are	incurred,	if

a	reasonable	estimate	of	fair	value	can	be	made.	The	asset	retirement	obligation	is subsequently	adjusted	for	changes	in	fair	value.	The	associated	estimated	asset retirement	costs	are	capitalized	as	part	of	the	carrying	amount	of	the	long-lived asset	and	depreciated	over	its	useful	life.	PPG's	asset	retirement	obligations	are primarily	associated	with	closure	of	certain	assets	used	in	the	chemicals manufacturing	process.

The	accrued	asset	retirement	obligation	was	$13	million	and	$12	million	as	of December	31,	2012	and	2011,	respectively.

PPG's	only	conditional	asset	retirement	obligation	relates	to	the	possible future	abatement	of	asbestos	contained	in	certain	PPG	production	facilities.	The asbestos	in	PPG's	production	facilities	arises	from	the	application	of	normal	and customary	building	practices	in	the	past	when	the	facilities	were	constructed.	This asbestos	is	encapsulated	in	place	and,	as	a	result,	there	is	no	current	legal requirement	to	abate	it.	Inasmuch	as	there	is	no	requirement	to	abate,	the Company	does	not	have	any	current	plans	or	an	intention	to	abate	and	therefore the	timing,	method	and	cost	of	future	abatement,	if	any,	are	not	known.	The Company	has	not	recorded	an	asset	retirement	obligation	associated	with	asbestos abatement,	given	the	uncertainty	concerning	the	timing	of	future	abatement,	if	any.

In	May	2011,	the	Financial	Accounting	Standards	Board	("FASB")	issued	an amendment	to	the	fair	value	measurement	guidance	and	disclosure	requirements that	established	common	U.S.	Generally	Accepted	Accounting	Principles ("GAAP")	and	International	Financial	Reporting	Standards	("IFRS") measurement	and	reporting	requirements.	The	new	requirements	were	effective	for the	first	interim	or	annual	period	beginning	after	December	15,	2011	and	were	to be	applied	prospectively.	PPG	adopted	the	new	requirements	in	the	first	quarter	of 2012;	however,	the	adoption	of	this	guidance	did	not	have	a	material	effect	on	its consolidated	financial	position,	results	of	operations	or	cash	flows.

In	June	2011,	the	FASB	issued	an	amendment	to	the	requirements	for presenting	comprehensive	income.	The	new	requirements	were	effective	for	the first	interim	or	annual	period	beginning	after	December	15,	2011	and	were	to	be applied	retrospectively.	The	standard	requires	other	comprehensive	income	to	be presented	in	a	continuous	statement	of	comprehensive	income	that	would	combine the	components	of	net	income	and	other	comprehensive	income,	or	in	a	separate, but	consecutive,	statement	following	the	statement	of	income.	PPG	adopted	these new	requirements	in	the	first	quarter	of	2012.

On	February	5,	2013,	the	FASB	issued	an	amendment	to	the	disclosure requirements	for	reporting	reclassifications	out	of	accumulated	other comprehensive	income	("AOCI").	The	update	is	effective	for	the	first	interim	or annual	period	beginning	after	December	15,	2012.	The	new	amendments	require presentation,	either	on	the	statement	of	income	or	in	the	notes,	of	the	effect	on	the line	items	of	the	statement	of	income

of	significant	amounts	reclassified	out	of	AOCI	directly	to	net	income	in	their entirety	in	the	same	reporting	period.	The	update	also	requires	the	new	disclosure to	be	cross	referenced	to	other	financial	statement	disclosures	required	for	other reclassification	items	that	are	not	reclassified	directly	to	net	income	in	their entirety	in	the	same	reporting	period.	PPG	will	adopt	the	new	requirements	in	the first	quarter	of	2013;	however,	the	adoption	of	this	guidance	will	not	have	an effect	on	its	consolidated	financial	position,	results	of	operations	or	cash	flows.

# 2.	Acquisitions

During	2012,	the	Company	completed	four	acquisitions	related	to	its	coatings businesses.	The	total	cost	of	acquisitions	was	$288	million,	including	debt assumed	of	$122	million.	These	acquisitions	also	provide	for	contingent	payments and	escrowed	holdbacks	of	a	portion	of	the	acquisition	cost.	Substantially	all	of	the acquisition	activity	relates	to	the	three	acquisitions	described	below.

In	December	2012,	the	Company	completed	the	acquisition	of	the	business	of Spraylat	Corp.,	a	privately-owned	industrial	coatings	company	based	in	Pelham, N.Y.	Spraylat	had	annual	sales	of	approximately	$125	million	in	2011.	The company	operates	production	facilities	in	the	U.S.,	Europe	and	China.	Spraylat specializes	in	high-quality	industrial	liquid	and	powder	coatings	with	excellent performance	characteristics	that	are	applied	to	metal,	glass	and	plastic	substrates.

In	early	January	2012,	PPG	completed	the	purchase	of	European	coatings company	Dyrup	A/S	("Dyrup"),	based	in	Copenhagen,	Denmark,	from	its	owner, Monberg	&	Thorsen,	a	public	holding	company,	for	$44	million	of	which	$26 million	is	currently	being	held	in	escrow,	and	assumed	debt	of	$120	million	and acquired	cash	of	$6	million.	Dyrup,	a	producer	of	architectural	coatings	and woodcare	products,	operates	six	manufacturing	facilities	throughout	Europe,	and its	products	are	sold	primarily	in	Denmark,	France,	Germany,	Portugal,	Poland, and	Spain	through	professional	and	do-it-yourself	channels.

Also	in	early	January	2012,	PPG	completed	the	purchase	of	the	coatings businesses	of	Colpisa	Colombiana	de	Pinturas	and	its	affiliate,	Colpisa	Equador ("Colpisa"),	for	$38	million,	of	which	$2	million	is	currently	being	held	back	as contingent	payments.	Colpisa	manufactures	and	distributes	coatings	for automotive	OEM,	automotive	refinish	and	industrial	customers	in	Colombia	and Ecuador.

The	purchase	price	allocations	related	to	the	acquisitions	made	in	2012 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."	The	Dyrup	and	Colpisa	acquisitions included	an	$8	million	flow-through	cost	of	sales,	primarily	in	the	first	quarter	of 2012,	of	the	step	up	to	fair	value	of	inventory	acquired.

The	following	table	summarizes	the	fair	value	of	assets	acquired	and liabilities	assumed	as	reflected	in	the	purchase

price	allocations	for	the	Dyrup	and	Colpisa	acquisitions	and	the	preliminary purchase	price	allocation	for	the	Spraylat	acquisition	recorded	as	of	December	31, 2012.

|  | (Millions) |
| :--- | :--- |
| Cash | $6 |
| Current\tassets | 165 |
| Property,\tplant,\tand\tequipment | 89 |
| Goodwill | 30 |
| Intangible\tAssets | 60 |
| Other\tnon-current\tassets | 20 |
| Total\tassets | $370 |
| Short-term\tdebt | (110) |
| Current\tliabilities | (72) |
| Long-term\tdebt | (10) |
| Other\tlong-term\tliabilities | (19) |
| Net\tassets | $159 |
| Total\tpurchase\tprice\tincluding\tcash\tin\tescrow\tand\tcontingent\tpayments | $159 |

The	Company	spent	$56	million	on	acquisitions	in	2011,	including	purchase price	adjustments	related	to	acquisitions	that	were	completed	prior	to	December 31,	2010.	In	May	2011,	PPG	acquired	the	assets	of	Equa-Chlor,	Inc.	for	$28 million,	of	which	$3	million	is	held	in	escrow	until	May	2013.	Equa-Chlor,	Inc.	is part	of	the	Commodity	Chemicals	reportable	segment.	PPG	assessed	the	fair	value of	the	assets	acquired	and	liabilities	assumed,	which	consisted	principally	of property	and	operating	working	capital.	PPG	recorded	a	net	benefit	of	$9	million stemming	from	a	bargain	purchase	gain	of	$10	million	reflecting	the	excess	of	the fair	value	of	the	net	assets	acquired	over	the	price	paid	for	the	business	and	a	$1 million	loss	related	to	the	flow-through	cost	of	sales	of	the	step	up	to	fair	value	of acquired	inventory.	The	gain	is	reported	in	"Other	earnings"	in	the	accompanying consolidated	statement	of	income	for	the	year-ended	December	31,	2011.	The remaining	amounts	spent	on	acquisitions	during	the	year-ended	December	31, 2011	represent	other	acquisitions	in	the	coatings	businesses,	including	the acquisition	of	a	South	African	automotive	refinish	distributor.

The	Company	spent	$34	million	on	acquisitions	(net	of	cash	acquired	of	$6 million)	in	2010,	including	purchase	price	adjustments	related	to	acquisitions	that were	completed	prior	to	January	1,	2010.

# 3.	Working	Capital	Detail

| (Millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Receivables |  |  |
| Trade\t-\tnet(1) | $2,568 | $2,512 |
| Equity\taffiliates | 22 | 28 |
| Other\t-\tnet | 223 | 290 |
| Total | $2,813 | $2,830 |
| Inventories(2) |  |  |
| Finished\tproducts | $980 | $935 |
| Work\tin\tprocess | 144 | 144 |
| Raw\tmaterials | 443 | 414 |
| Supplies | 120 | 114 |
| Total | $1,687 | $1,607 |
| Accounts\tpayable\tand\taccrued\tliabilities |  |  |
| Trade\tcreditors | $1,620 | $1,612 |
| Accrued\tpayroll | 459 | 414 |
| Customer\trebates | 212 | 201 |
| Other\tpostretirement\tand\tpension\tbenefits | 103 | 108 |
| Income\ttaxes | 71 | 51 |
| Other | 596 | 610 |
| Total | $3,061 | $2,996 |

(1) Allowance	for	Doubtful	Accounts	equaled	$77	million	and	$71	million	as	of	December	31, 2012	and	2011,	respectively.

(2) Inventories	valued	using	the	LIFO	method	of	inventory	valuation	comprised	36%	and	35% of	total	gross	inventory	values	as	of	December	31,	2012	and	2011,	respectively.	If	the FIFO	method	of	inventory	valuation	had	been	used,	inventories	would	have	been	$243 million	and	$232	million	higher	as	of	December	31,	2012	and	2011,	respectively.	During the	year	ended	December	31,	2012	and	2011,	certain	inventories	accounted	for	on	the LIFO	method	of	accounting	were	reduced,	which	resulted	in	the	liquidation	of	certain quantities	carried	at	costs	prevailing	in	prior	years.	The	effect	on	earnings	was	income	of $3.0	million	and	$0.9	million	for	the	years	ended	December	31,	2012	and	2011, respectively.

| (Millions) | (years) | 2012 | 2011 |
| :--- | :--- | :--- | :--- |
| \t Land\tand\tland\timprovements | 5-30 | $504 | $482 |
| \t Buildings | 20-40 | 1,568 | 1,482 |
| \t Machinery\tand\tequipment | 5-25 | 5,952 | 5,736 |
| \t Other | 3-20 | 735 | 694 |
| \t Construction\tin\tprogress |  | 271 | 220 |
| Total(1) |  | $9,030 | $8,614 |

# 5.	Investments

| (Millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Investments\tin\tand\tadvances\tto\tequity\taffiliates | $262 | $261 |
| Marketable\tequity\tsecurities\t-\tTrading\t(See\tNote\t14) | 60 | 56 |
| Other | 100 | 70 |
| Total | $422 | $387 |

The	Company's	investments	in	and	advances	to	equity	affiliates	are comprised	principally	of	50%	ownership	interests	in	a	number	of	joint	ventures that	manufacture	and	sell	coatings,	glass	and	chemicals	products,	the	most significant	of	which	produce	fiber	glass	products	and	are	located	in	Asia.	The Company's	investments	in	and	advances	to	equity	affiliates	also	include	its approximate	40%	interest	in	Pittsburgh	Glass	Works	L.L.C.	("PGW"),	which	had a	carrying	value	of	$33	million	and	$29	million	at	December	31,	2012	and December	31,	2011,	respectively.	In	April	2011,	the	Company	received	$168 million	from	PGW,	which	was	comprised	of	the	repayment	of	$90	million	of	notes receivable	from	PGW	and	a	$78	million	return	of	capital.

In	July	2012,	PPG	and	Asian	Paints	Ltd.	("Asian	Paints"),	expanded	their coatings	operations	in	India	through	the	creation	of	a	new	joint	venture	and	the expansion	of	the	operations	of	an	existing	joint	venture.	PPG	gained	effective management	control	of	the	existing	joint	venture,	with	Asian	Paints	obtaining effective	management	control	of	the	newly	formed	joint	venture.	The	accounting for	the	changes	to	the	existing	joint	venture	resulted	in	recording	assets	at	their	fair values,	including	"Goodwill"	of	$22	million	and	"Identifiable	intangible	assets"	of $12	million.	Also,	as	PPG	now	consolidates	the	existing	joint	venture	that	is	under its	control,	an	amount	has	been	recorded	within	"Noncontrolling	interests"	of	$49 million	for	the	portion	of	the	net	assets	of	this	entity	owned	by	Asian	Paints.

In	addition,	PPG	has	a	50%	ownership	interest	in	RS	Cogen,	L.L.C.,	which toll	produces	electricity	and	steam	primarily	for	PPG's	former	Lake	Charles,	La. commodity	chemicals	facility	and	its	joint	venture	partner.	The	joint	venture	was formed	with	a	wholly-owned	subsidiary	of	Entergy	Corporation	in	2000	for	the construction	and	operation	of	a	$300	million	process	steam,	natural	gas-fired cogeneration	facility	in	Lake	Charles,	La.,	the	majority	of	which	was	financed	by	a syndicate	of	banks.	As	of	December	31,	2012,	PPG's	future	commitment	to purchase	electricity	and	steam	from	the	joint	venture	approximated	$23	million per	year	subject	to	contractually	defined	inflation	adjustments	for	the	next	10 years.	The	purchases	for	the	years	ended	December	31,	2012,	2011	and	2010	were $25	million,	$23	million	and	$23	million,	respectively.	On	January	28,	2013, PPG's	investment	in	R.S.	Cogen	was	transferred	with	the	separation	of	its commodity	chemicals	business	and	the	merger	of	the	subsidiary	holding	the	PPG commodity	chemicals	business	with	a	subsidiary	of	Georgia	Gulf.	Refer	to	Note 25,	"Separation	and	Merger	Transaction."

					RS	Cogen	is	a	variable	interest	entity	under	U.S.	accounting	guidance.	The	joint venture's	critical	operations	are	overseen	by

a	management	committee,	which	had	equal	representation	by	PPG	and	Entergy. With	the	power	to	direct	the	activities	of	RS	Cogen	equally	shared	between	RS Cogen's	two	owners,	PPG	did	not	consider	itself	to	be	the	joint	venture's	primary beneficiary.	Accordingly,	PPG	accounted	for	its	investment	in	RS	Cogen	as	an equity	method	investment.

The	following	table	summarizes	the	Company's	maximum	exposure	to	loss associated	with	RS	Cogen	as	of	December	31,	2012:

Summarized	financial	information	of	PPG's	equity	affiliates	on	a	100%	basis, in	the	aggregate,	is	as	follows:

PPG's	share	of	undistributed	net	earnings	of	equity	affiliates	was	$79	million and	$101	million	as	of	December	31,	2012	and	2011,	respectively.	Dividends received	from	equity	affiliates	were	$12	million,	$19	million	and	$6	million	in 2012,	2011	and	2010,	respectively.	The	decline	in	2012	equity	earnings	compared to	2011	was	primarily	due	to	lower	results	from	Asian	fiber	glass	joint	ventures.

As	of	December	31,	2012	and	2011,	there	were	no	unrealized	pretax	gains	or losses	related	to	marketable	equity	securities	available	for	sale.	In	2012,	there	were no	pretax	gains	or	losses	realized	and	no	cash	proceeds	from	the	sale	of	these investments.	PPG	sold	certain	of	these	investments	resulting	in	recognition	of pretax	gains	of	$3	million	and	$2	million	in	2011	and	2010,	respectively.	Cash proceeds	of	$9	million,	and	$3	million	were	received	in	2011	and	2010, respectively.

# 6.	Goodwill	and	Other	Identifiable	Intangible	Assets

The	change	in	the	carrying	amount	of	goodwill	attributable	to	each	reportable business	segment	for	the	years	ended	December	31,	2012	and	2011	was	as follows:

| (Millions) | Perform-ance<br>Coatings | Industrial<br>Coatings | Architectural<br>Coatings—<br>EMEA | Optical<br>and<br>Specialty<br>Materials | Glass | Commodity<br>Chemicals | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Balance,\nJan.\t1,\t2011 | $1,151 | $495 | $966 | $49 | $52 | $6 | $2,719 |
| Goodwill\tfrom\nacquisitions | 4 | — | 1 | — | — | — | 5 |
| Currency\ntranslation | (16) | (11) | (34) | (1) | (2) | — | (64) |
| Balance,\nDec.\t31,\t2011 | $1,139 | $484 | $933 | $48 | $50 | $6 | $2,660 |
| Goodwill\tfrom\nacquisitions | 22 | 18 | 18 | — | — | — | 58 |
| Currency\ntranslation | 12 | 10 | 19 | — | 2 | — | 43 |
| Balance,\nDec.\t31,\t2012 | $1,173 | $512 | $970 | $48 | $52 | $6 | $2,761 |

The	carrying	amount	of	acquired	trademarks	with	indefinite	lives	as	of December	31,	2012	and	2011	totaled	$324	million	and	$316	million,	respectively.

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

|  |  | Dec.	31,	2012 |  |  | Dec.	31,	2011 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Gross |  |  | Gross |  |  |
|  | Carrying | Accumulated |  | Carrying | Accumulated |  |
| (Millions) | Amount | Amortization | Net | Amount | Amortization | Net |
| Acquired\ntechnology | $516 | $(342) | $174 | $511 | $(308) | $203 |
| Customer- |  |  |  |  |  |  |
| related |  |  |  |  |  |  |
| intangibles | 1,010 | (491) | 519 | 945 | (412) | 533 |
| Tradenames | 120 | (57) | 63 | 116 | (50) | 66 |
| Other | 34 | (29) | 5 | 32 | (25) | 7 |
| Balance | $1,680 | $(919) | $761 | $1,604 | $(795) | $809 |

Aggregate	amortization	expense	was	$110	million,	$121	million	and	$124 million	in	2012,	2011	and	2010,	respectively.	The	estimated	future	amortization expense	of	identifiable	intangible	assets	per	year	is	approximately	$102	million during	2013,	approximately	$100	million	during	2014	and	2015,	approximately $80	million	in	2016	and	approximately	$70	million	in	2017.

# 7.	Business	Restructuring

In	March	2012,	the	Company	finalized	a	restructuring	plan	to	reduce	its	cost structure,	primarily	due	to	continuing	weak	economic	conditions	in	Europe	and	in the	commercial	and	residential	construction	markets	in	the	U.S.	and	Europe.	As part	of	this	restructuring	plan,	PPG	will	close	several	laboratory,	warehouse	and distribution	facilities	and	small	production	units	and	will	reduce	staffing.	The restructuring	will	impact	a	number	of	businesses	globally,	primarily	the	global architectural	businesses	and	general	and	administrative	functions	in	Europe.

As	a	result	of	this	restructuring	plan,	in	March	2012	the	Company	recorded	a charge	of	$208	million,	including	severance	and	other	costs	of	$160	million,	asset write-offs	of	$53	million,	and	a	net	pension	curtailment	gain	of	$5	million.	The Company	expects	to	incur	additional	costs	of	approximately	$5	million	directly associated	with	the	restructuring	actions	for	demolition,	dismantling,	relocation and	training	that	will	be	charged	to	expense	as	incurred.	To	date,	approximately	$4 million	of	these	expenses	have	been	recognized.	The	Company	expects	to	incur the	remainder	of	these	additional	expenses	in	the	first	half	of	2013.

In	the	fourth	quarter	of	2012,	adjustments	of	approximately	$12	million	were recorded	to	reduce	the	restructuring	reserve	established	in	the	first	quarter	of	2012 to	reflect	the	current	estimate	of	the	costs	to	complete	these	actions.	Also	in	the fourth	quarter	of	2012,	some	additional	restructuring	actions	were	approved	and charges	of	approximately	$12	million	for	the	cost	of	these	actions	were	recorded. The	additional	actions	increased	the	number	of	employees	impacted	by	273.

The	following	table	summarizes	the	restructuring	plan	and	the	activity	in	the restructuring	reserve	during	the	year	ended	December	31,	2012:

|  | Severance | Pension | Asset |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Millions,\texcept\tno.\tof\nemployees) | and\tOther\nCosts | Curtailment\n(Gains)/Losses | Write-\noffs | Total\nReserve | Employees\nImpacted |  |
| Performance\tCoatings | $55 | $1 | $12 | $68 | 867 |  |
| Industrial\tCoatings | 38 | (1) | 8 | 45 | 394 |  |
| Architectural\tCoatings\t-\nEMEA | 61 | (5) | 3 | 59 | 881 |  |
| Optical\t&amp;\tSpecialty\tMaterials | 2 | — | 30 | 32 | 50 |  |
| Glass | 3 | — | — | 3 | 36 |  |
| Corporate | 1 | — | — | 1 | 4 |  |
| Total | $160 | $(5) | $53 | $208 | 2,232 | (1) |
| 2012\tactivity | (83) | $5 | (53) | (131) | (1,631) |  |
| Currency\timpact | $(2) | $— | $— | $(2) | — |  |
| Balance\tas\tof\nDecember\t31,\t2012 | $75 | $— | $— | $75 | 601 |  |
| At\tDecember\t31,\t2011,\tthere\twas\ta\tremaining\treserve\tof\t$4\tmillion\tand\t$1 | At\tDecember\t31,\t2011,\tthere\twas\ta\tremaining\treserve\tof\t$4\tmillion\tand\t$1 | At\tDecember\t31,\t2011,\tthere\twas\ta\tremaining\treserve\tof\t$4\tmillion\tand\t$1 | At\tDecember\t31,\t2011,\tthere\twas\ta\tremaining\treserve\tof\t$4\tmillion\tand\t$1 | At\tDecember\t31,\t2011,\tthere\twas\ta\tremaining\treserve\tof\t$4\tmillion\tand\t$1 |  | (2) |

    At	December	31,	2011,	there	was	a	remaining	reserve	of	$4	million	and	$1 million,	respectively	related	to	2009	and	2008	restructuring	plans.	All	accrued amounts	have	been	paid	during	2012.

# 8.	Debt	and	Bank	Credit	Agreements	and	Leases

| (Millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| 6\t\t7/8%\tnotes,\tdue\t2012(1) | $— | $71 |
| 5.75%\tnotes,\tdue\t2013(1) | 600 | 600 |
| 3\t\t\t7/8%\tnotes,\tdue\t2015\t(€300) | 395 | 388 |
| 1.9\t%\tnotes,\tdue\t2016(1) | 249 | 248 |
| 7\t\t3/8%\tnotes,\tdue\t2016(1) | 146 | 146 |
| 6\t\t7/8%\tnotes,\tdue\t2017 | 74 | 74 |
| 6.65%\tnotes,\tdue\t2018 | 700 | 700 |
| 7.4%\tnotes,\tdue\t2019 | 198 | 198 |
| 3.6%\tnotes,\tdue\t2020 | 495 | 495 |
| 9%\tnon-callable\tdebentures,\tdue\t2021 | 149 | 149 |
| 2.70%\tnotes,\tdue\t2022\t(2) | 400 | — |
| 7.70%\tnotes,\tdue\t2038 | 249 | 249 |
| 5.5%\tnotes,\tdue\t2040 | 248 | 248 |
| Impact\tof\tderivatives\ton\tdebt(1) | 31 | 42 |
| 2012\tand\t2.3%\tof\tDecember\t31,\t2011. | 5 | 9 |
| Capital\tlease\tobligations | 32 | 32 |
| Total | 3,971 | 3,649 |
| Less\tpayments\tdue\twithin\tone\tyear | 603 | 75 |
| Long-term\tdebt | $3,368 | $3,574 |

(1) PPG	entered	into	several	interest	rate	swaps	which	as	of	 December	31,	2011	had	the	effect of	converting	$445	million,	of	these	fixed	rate	notes	to	variable	rates,	based	on	the	three- month	London	Interbank	Offered	Rate	(LIBOR).	There	were	no	interest	rate	swaps outstanding	at	December	31,	2012.	The	fair	values	of	these	interest	rate	swaps	were	based on	Level	2	inputs	as	described	in	Note	9.	The	weighted	average	effective	interest	rate	for these	borrowings,	including	the	effects	of	the	swaps,	was	2.7%	and	3.1%	for	the	years ended	December	31,	2012	and	2011,	respectively.	Refer	to	Note	11	for	additional information.

(2) In	2012,	the	$400	million	notes	were	issued	at	a	discount.	Concurrently,	PPG	settled forward	starting	swaps	with	a	payment	of	$121	million.	This	loss	will	be	amortized	to interest	expense	over	the	life	of	the	debt.	The	effective	interest	rate	on	the	$400	million notes	was	5.8%	at	December	31,	2012.

In	July	2012,	PPG	entered	into	a	five-year	credit	agreement	with	several	banks and	financial	institutions	(the	"Credit	Agreement").	The	Credit	Agreement provides	for	a	$1.2	billion	unsecured	revolving	credit	facility.	In	connection	with entering	into	this	Credit	Agreement,	the	Company	terminated	its	existing	$1.2 billion	revolving	credit	facility	that	was	scheduled	to	expire	in	August	2013.	There was	no	outstanding	amount	due	under	this	revolving	facility	at	the	time	of	its termination.	The	Company	has	the	ability	to	increase	the	size	of	the	Credit Agreement	by	up	to	an	additional	$300	million,	subject	to	the	receipt	of	lender commitments	and	other	conditions.	The	Credit	Agreement	will	terminate	and	all amounts	outstanding	thereunder	will	be	due	and	payable	on	September	12,	2017, although	under	circumstances	specified	in	the	Credit	Agreement	and	subject	to	the lenders'	approval,	the	Company	may	make	one	request	to	extend	such	termination date	by	one	year	with	respect	to	the	approving	lenders.	The	Company	has	the right,	subject	to

certain	conditions	set	forth	in	the	Credit	Agreement,	to	designate	certain subsidiaries	of	the	Company	as	borrowers	under	the	Credit	Agreement.	In connection	with	any	such	designation,	the	Company	is	required	to	guarantee	the obligations	of	any	such	subsidiaries	under	the	Credit	Agreement.	There	were	no amounts	outstanding	under	the	credit	agreement	at	December	31,	2012;	however, the	available	borrowing	rate	on	a	one	month,	U.S.	dollar	denominated	borrowing would	have	been	0.84%.

Borrowings	under	the	Credit	Agreement	may	be	made	in	U.S.	dollars	or	in euros.	The	Credit	Agreement	provides	that	loans	will	bear	interest	at	rates	based, at	the	Company's	option,	on	one	of	two	specified	base	rates	plus	a	margin	based	on certain	formulas	defined	in	the	Credit	Agreement.	Additionally,	the	Credit Agreement	contains	a	Commitment	Fee,	as	defined	in	the	Credit	Agreement,	on the	amount	of	unused	commitments	under	the	Credit	Agreement	ranging	from 0.080%	to	0.225%	per	annum.	The	applicable	date	and	the	Commitment	Fee	will be	determined	with	reference	to	the	pricing	grid	set	forth	in	the	Credit	Agreement referencing	the	ratings	established	by	Standard	&	Poor's	Financial	Services	LLC and	Moody's	Investor	Service	Inc.	for	the	Company's	non-credit	enhanced,	long- term,	senior,	unsecured	debt.	The	average	Commitment	Fee	in	2012	was	0.175% and	PPG	is	committed	to	pay	0.125%	in	2013.	There	were	no	amounts	outstanding under	the	Credit	Agreement	at	December	31,	2012.

The	Credit	Agreement	contains	usual	and	customary	restrictive	covenants	for facilities	of	its	type,	which	include,	with	specified	exceptions,	limitations	on	the Company's	ability	to	create	liens	or	other	encumbrances,	to	enter	into	sale	and leaseback	transactions	and	to	enter	into	consolidations,	mergers	or	transfers	of	all or	substantially	all	of	its	assets.	The	Credit	Agreement	maintains	the	same restrictive	covenant	as	the	prior	revolving	credit	facility	whereby	the	Company must	maintain	a	ratio	of	Total	Indebtedness	to	Total	Capitalization,	as	defined	in the	Credit	Agreement,	of	60%	or	less.

The	Credit	Agreement	contains	customary	events	of	default,	including	the failure	to	make	timely	payments	when	due	under	the	Credit	Agreement	or	other material	indebtedness,	the	failure	to	satisfy	covenants	contained	in	the	Credit Agreement,	a	change	in	control	of	the	Company	and	specified	events	of bankruptcy	and	insolvency	that	would	permit	the	lenders	to	accelerate	the repayment	of	any	loans.

On	July	31,	2012,	PPG	completed	a	public	offering	of	$400	million	in aggregate	principal	amount	of	its	2.70%	Notes	due	2022	(the	"2022	Notes").	The 2022	Notes	were	offered	by	the	Company	pursuant	to	its	existing	shelf	registration statement	and	pursuant	to	an	indenture	dated	as	of	March	18,	2008	(the	"Original Indenture")	between	the	Company	and	The	Bank	of	New	York	Mellon	Trust Company,	N.A.,	as	trustee	(the	"Trustee"),	as	supplemented	by	a	first supplemental	indenture	dated	as	of	March	18,	2008	between	the	Company	and	the Trustee	(the	"First	Supplemental	Indenture"),	a	second	supplemental	indenture dated	as	of	November	12,	2010	between	the	Company	and	the	Trustee	(the "Second	Supplemental	Indenture")	and	a	third	supplemental	indenture	dated	as	of

August	3,	2011	between	the	Company	and	the	Trustee	(the	"Third	Supplemental Indenture"	and,	together	with	the	Original	Indenture,	the	First	Supplemental Indenture	and	the	Second	Supplemental	Indenture,	the	"Indenture").	The Company	may	issue	additional	debt	from	time	to	time	pursuant	to	the	Original Indenture.	The	Indenture	governing	these	notes	contains	covenants	that	limit	the Company's	ability	to,	among	other	things,	incur	certain	liens	securing indebtedness,	engage	in	certain	sale-leaseback	transactions,	and	enter	into	certain consolidations,	mergers,	conveyances,	transfers	or	leases	of	all	or	substantially	all the	Company's	assets.	The	terms	of	these	notes	also	require	the	Company	to	make an	offer	to	repurchase	the	Notes	upon	a	Change	of	Control	Triggering	Event	(as defined	in	the	Second	Supplemental	Indenture)	at	a	price	equal	to	101%	of	their principal	amount	plus	accrued	and	unpaid	interest.

The	proceeds	from	this	offering	of	$397	million,	net	of	discount	and	issuance costs,	are	expected	to	be	used	to	repay	a	portion	of	the	$600	million	of	5.75% notes	due	in	March	2013	(the	"2013	Notes").	The	discount	and	issuance	costs related	to	the	2022	Notes,	which	totaled	$3	million,	will	be	amortized	to	interest expense	over	the	life	of	the	2022	Notes.	Concurrently	with	the	issuance	of	the 2022	Notes,	PPG	settled	forward	starting	swaps	with	a	payment	of	$121	million	on July	30,	2012.	This	loss	will	be	amortized	to	interest	expense	over	the	term	of	the notes,	resulting	in	an	effective	interest	rate	of	5.8%.	(Refer	to	Note	11,	"Derivative Financial	Instruments	and	Hedge	Activities"	for	additional	information).

In	April	2012,	the	Company	reclassified	the	$600	million	of	the	2013	Notes to	Short-term	debt	and	current	portion	of	long-term	debt	in	the	accompanying consolidated	balance	sheet	as	these	notes	are	due	to	be	repaid	in	March	2013.	Also during	the	year-ended	December	31,	2012,	the	Company	assumed	$120	million	of debt	in	the	Dyrup	acquisition	and	repaid	$119	million	of	that	debt,	and	repaid	the $71	million	of	6.875%	notes	upon	their	maturity.

In	June	2011,	the	Company	repaid	a	$400	million	three	year,	unsecured	term loan,	which	had	a	scheduled	maturity	date	of	June	2012.	There	was	no	prepayment penalty.	The	interest	rate	was	variable	based	on	a	spread	over	LIBOR.	This	term loan	was	repaid	using	a	portion	of	the	proceeds	from	our	November	2010	$1 billion	debt	issuance.

On	November	12,	2010,	PPG	completed	a	public	offering	of	$250	million	in aggregate	principal	amount	of	its	1.900%	Notes	due	2016,	$500	million	in aggregate	principal	amount	of	its	3.600%	Notes	due	2020	and	$250	million	in aggregate	principal	amount	of	its	5.500%	Notes	due	2040.	These	notes	were issued	pursuant	to	the	Original	Indenture	as	supplemented	by	the	First Supplemental	Indenture	and	Second	Supplemental	Indenture.	The	indentures governing	these	notes	contains	covenants	substantially	similar	those	in	the indentures	governing	the	2022	Notes.

Cash	proceeds	from	the	sale	of	these	notes	was	$983	million	(net	of	discount and	issuance	costs).	The	discount	and	issuance

costs	related	to	these	notes,	which	totaled	$17	million,	will	be	amortized	to	interest expense	over	the	respective	terms	of	the	notes.

In	August	2010,	PPG	entered	into	a	three-year	credit	agreement	with	several banks	and	financial	institutions	(the	"2010	Credit	Agreement")	which	was subsequently	terminated	in	July	2012.	The	2010	Credit	Agreement	provided	for	a $1.2	billion	unsecured	revolving	credit	facility.	In	connection	with	entering	into the	2010	Credit	Agreement,	the	Company	terminated	its	€650	million	and	its	$1 billion	revolving	credit	facilities	that	were	each	set	to	expire	in	2011.	There	were no	outstanding	amounts	due	under	either	revolving	facility	at	the	times	of	their termination.	The	2010	Credit	Agreement	was	set	to	terminate	on	August	5,	2013.

PPG's	non-U.S.	operations	have	uncommitted	lines	of	credit	totaling	$705 million	of	which	$34	million	was	used	as	of	December	31,	2012.	These uncommitted	lines	of	credit	are	subject	to	cancellation	at	any	time	and	are generally	not	subject	to	any	commitment	fees.

Short-term	debt	outstanding	as	of	December	31,	2012	and	2011,	was	as follows:

PPG	is	in	compliance	with	the	restrictive	covenants	under	its	various	credit agreements,	loan	agreements	and	indentures.	The	Company's	revolving	credit agreements	include	a	financial	ratio	covenant.	The	covenant	requires	that	the amount	of	total	indebtedness	not	exceed	60%	of	the	Company's	total	capitalization excluding	the	portion	of	accumulated	other	comprehensive	income	(loss)	related to	pensions	and	other	postretirement	benefit	adjustments.	As	of	December	31, 2012,	total	indebtedness	was	42%	of	the	Company's	total	capitalization	excluding the	portion	of	accumulated	other	comprehensive	income	(loss)	related	to	pensions and	other	postretirement	benefit	adjustments.	Additionally,	substantially	all	of	the Company's	debt	agreements	contain	customary	cross-default	provisions.	Those provisions	generally	provide	that	a	default	on	a	debt	service	payment	of	$10 million	or	more	for	longer	than	the	grace	period	provided	(usually	10	days)	under one	agreement	may	result	in	an	event	of	default	under	other	agreements.	None	of the	Company's	primary	debt	obligations	are	secured	or	guaranteed	by	the Company's	affiliates.

In	October	2009,	the	Company	entered	into	an	agreement	with	a	counterparty to	repurchase	up	to	1.2	million	shares	of	the	Company's	stock	of	which	1.1	million shares	were	purchased	in	the	open	market	(465,006	of	these	shares	were	purchased as	of	December	31,	2009	at	a	weighted	average	price	of	$56.66	per	share).	The counterparty	held	the	shares	until	September	of	2010

when	the	Company	paid	$65	million	and	took	possession	of	these	shares.

Rental	expense	for	operating	leases	was	$233	million,	$249	million	and	$233 million	in	2012,	2011	and	2010,	respectively.	The	primary	leased	assets	include paint	stores,	transportation	equipment,	warehouses	and	other	distribution	facilities, and	office	space,	including	the	Company's	corporate	headquarters	located	in Pittsburgh,	Pa.	Minimum	lease	commitments	for	operating	leases	that	have	initial or	remaining	lease	terms	in	excess	of	one	year	as	of	December	31,	2012,	are	(in millions)	$171	in	2013,	$135	in	2014,	$107	in	2015,	$83	in	2016,	$64	in	2017	and $135	thereafter.

The	Company	had	outstanding	letters	of	credit	and	surety	bonds	of	$119 million	as	of	December	31,	2012.	The	letters	of	credit	secure	the	Company's performance	to	third	parties	under	certain	self-insurance	programs	and	other commitments	made	in	the	ordinary	course	of	business.	As	of	December	31,	2012 and	2011,	guarantees	outstanding	were	$96	million	and	$90	million,	respectively. The	guarantees	relate	primarily	to	debt	of	certain	entities	in	which	PPG	has	an ownership	interest	and	selected	customers	of	certain	of	the	Company's	businesses. A	portion	of	such	debt	is	secured	by	the	assets	of	the	related	entities.	The	carrying values	of	these	guarantees	were	$11	million	and	$13	million	as	of	December	31, 2012	and	2011,	respectively,	and	the	fair	values	were	$11	million	and	$21	million, as	of	December	31,	2012	and	2011,	respectively.	The	fair	value	of	each	guarantee was	estimated	by	comparing	the	net	present	value	of	two	hypothetical	cash	flow streams,	one	based	on	PPG's	incremental	borrowing	rate	and	the	other	based	on the	borrower's	incremental	borrowing	rate,	as	of	the	effective	date	of	the guarantee.	Both	streams	were	discounted	at	a	risk	free	rate	of	return.	The Company	does	not	believe	any	loss	related	to	these	letters	of	credit,	surety	bonds or	guarantees	is	likely.

# 9.	Fair	Value	Measurement

The	accounting	guidance	on	fair	value	measurements	establishes	a	hierarchy with	three	levels	of	inputs	used	to	determine	fair	value.	Level	1	inputs	are	quoted prices	(unadjusted)	in	active	markets	for	identical	assets	and	liabilities,	are considered	to	be	the	most	reliable	evidence	of	fair	value,	and	should	be	used whenever	available.	Level	2	inputs	are	observable	prices	that	are	not	quoted	on active	exchanges.	Level	3	inputs	are	unobservable	inputs	employed	for	measuring the	fair	value	of	assets	or	liabilities.

# Assets	and	liabilities	reported	at	fair	value	on	a	recurring	basis:

| deposit | $— | $455 | $— | $455 |
| :--- | :--- | :--- | :--- | :--- |
| Other\tcurrent\tassets: |  |  |  |  |
| \t Marketable\tequity\tsecurities | 5 | — | — | 5 |
| \t Foreign\tcurrency\tcontracts(1) | — | 3 | — | 3 |
| \t Equity\tforward\tarrangement(1) | — | 130 | — | 130 |
| Investments: |  |  |  |  |
| \t Marketable\tequity\tsecurities | 60 | — | — | 60 |
| Accounts\tpayable\tand\taccrued\nliabilities: |  |  |  |  |
| \t Foreign\tcurrency\tcontracts(1) | — | 1 | — | 1 |
| Other\tliabilities: |  |  |  |  |
| \t Cross\tcurrency\tswaps(1) | — | 95 | — | 95 |
| (1) |  |  |  |  |

(1) This	entire	balance	is	designated	as	a	hedging	instrument	under	GAAP.

| cash | $— | $21 | $— | $21 |
| :--- | :--- | :--- | :--- | :--- |
| \t Marketable\tequity\tsecurities | 4 | — | — | 4 |
| Other\tcurrent\tassets: |  |  |  |  |
| \t Foreign\tcurrency\tcontracts(1) | — | 1 | — | 1 |
| Interest\trate\tswaps(1) | — | 1 | — | 1 |
| \t Equity\tforward\tarrangement(1) | — | 56 | — | 56 |
| Investments: |  |  |  |  |
| \t Marketable\tequity\tsecurities | 56 | — | — | 56 |
| Other\tassets: |  |  |  |  |
| Interest\trate\tswaps(1) | — | 25 | — | 25 |
| Accounts\tpayable\tand\taccrued\nliabilities: |  |  |  |  |
| \t Foreign\tcurrency\tcontracts(1) | — | 6 | — | 6 |
| \t Forward\tstarting\tswaps(1) | — | 92 | — | 92 |
| \t Natural\tgas\tswap\tcontracts (1) | — | 9 | — | 9 |
| Other\tliabilities: |  |  |  |  |
| \t Cross\tcurrency\tswaps(1) | — | 120 | — | 120 |
| \t Foreign\tcurrency\tcontracts(1) | — | 1 | — | 1 |
| (1) |  |  |  |  |

# Assets	and	liabilities	reported	at	fair	value	on	a	nonrecurring	basis:

As	a	result	of	finalizing	a	restructuring	plan,	as	discussed	in	Note	7,	"Business Restructuring",	long-lived	assets	with	a	carrying	amount	of	$10	million	were written-down	to	their	fair	value	of	$7	million,	resulting	in	a	charge	of	$3	million, which	was	included	in	the	business	restructuring	expense	reported	in	the	year- ended	December	31,	2012.	These	long-lived	assets	were	valued	using	Level	3 inputs.

There	were	no	nonmonetary	assets	or	liabilities	written	down	to	fair	value	on a	nonrecurring	basis	during	2010	or	2011.

# 10.	Financial	Instruments,	Excluding	Derivative	Financial	Instruments

Included	in	PPG's	financial	instrument	portfolio	are	cash	and	cash equivalents,	short-term	investments,	cash	held	in	escrow,	marketable	equity securities,	company-owned	life	insurance	and	short	and	long-term	debt instruments.	The	fair	values	of	these	financial	instruments	approximated	their carrying	values	at	December	31,	2012	and	2011,	in	the	aggregate,	except	for	long- term	debt.

Long-term	debt	(excluding	capital	lease	obligations),	had	carrying	and	fair values	totaling	$3,939	million	and	$4,484	million,	respectively,	as	of December	31,	2012.	Long-term	debt	(excluding	capital	lease	obligations),	had carrying	and	fair	values	totaling	$3,617	million	and	$4,154	million,	respectively, as	of	December	31,	2011.	The	fair	values	of	the	debt	instruments	were	based on	discounted	cash	flows	and	interest	rates	then	currently	available	to	the Company	for	instruments	of	the	same	remaining	maturities.

# 11.	Derivative	Financial	Instruments	and	Hedge	Activities

The	Company	recognizes	all	derivative	financial	instruments	as	either	assets or	liabilities	at	fair	value	on	the	balance	sheet.	The	accounting	for	changes	in	the fair	value	of	a	derivative	depends	on	the	use	of	the	instrument.	To	the	extent	that	a derivative	is	effective	as	a	hedge	of	an	exposure	to	future	changes	in	cash	flows, the	change	in	fair	value	of	the	instrument	is	deferred	in	AOCI.	Any	portion considered	to	be	ineffective	is	reported	in	earnings	immediately,	including	changes in	value	related	to	credit	risk.	To	the	extent	that	a	derivative	is	effective	as	a	hedge of	an	exposure	to	future	changes	in	fair	value,	the	change	in	the	derivative's	fair value	is	offset	in	the	consolidated	statement	of	income	by	the	change	in	fair	value of	the	item	being	hedged.	To	the	extent	that	a	derivative	or	a	financial	instrument is	effective	as	a	hedge	of	a	net	investment	in	a	foreign	operation,	the	change	in	the derivative's	fair	value	is	deferred	as	an	unrealized	currency	translation	adjustment in	AOCI.

PPG's	policies	do	not	permit	speculative	use	of	derivative	financial instruments.	PPG	uses	forward	currency	and	option	contracts	as	hedges	against	its exposure	to	variability	in	exchange	rates	on	short-term	intercompany	transactions, unrecognized	firm	sales	commitments	and	cash	flows	denominated	in	foreign currencies.	PPG	uses	foreign	denominated	debt	and	cross	currency	swap	contracts to	hedge	net	investments	in	foreign	operations.	PPG	also	uses	an	equity	forward arrangement	to	hedge	the	Company's	exposure	to	changes	in	the	fair	value	of	PPG stock	that	is	to	be	contributed	to	the	asbestos	settlement	trust	as	discussed	in	Note 15,	"Commitments	and	Contingent	Liabilities."	In	2011	and	2010,	interest	rate swaps	were	used	to	manage	the	Company's	exposure	to	changing	interest	rates	as such	rate	changes	affected	the	fair	value	of	fixed	rate	borrowings.	Forward	starting swaps

were	used	to	lock-in	a	fixed	interest	rate,	to	which	was	added	a	corporate	spread, related	to	future	long-term	debt	refinancings.	PPG	also	used	derivative	instruments to	manage	its	exposure	to	fluctuating	natural	gas	prices	through	the	use	of	natural gas	swap	contracts.

PPG	enters	into	derivative	financial	instruments	with	high	credit	quality counterparties	and	diversifies	its	positions	among	such	counterparties	in	order	to reduce	its	exposure	to	credit	losses.	The	Company	did	not	realize	a	credit	loss	on derivatives	during	the	three-year	period	ended	December	31,	2012.

PPG	centrally	manages	certain	of	its	foreign	currency	transaction	risks	to minimize	the	volatility	in	cash	flows	caused	by	currency	fluctuations.	Decisions	on whether	to	use	derivative	financial	instruments	to	hedge	the	net	transaction exposures	related	to	all	regions	of	the	world	are	made	based	on	the	amount	of those	exposures	by	currency	and,	in	certain	situations,	an	assessment	of	the	near- term	outlook	for	certain	currencies.	This	net	hedging	strategy	does	not	qualify	for hedge	accounting;	therefore,	the	change	in	the	fair	value	of	these	instruments	is recorded	in	"Other	charges"	in	the	accompanying	consolidated	statement	of income	in	the	period	of	change.	As	of	December	31,	2012	and	2011,	the	fair	value of	these	contracts	were	assets	of	less	than	$0.1	million	and	$0.4	million, respectively.

PPG	designates	forward	currency	contracts	as	hedges	against	the	Company's exposure	to	variability	in	exchange	rates	on	short-term	intercompany	borrowings and	transactions	denominated	in	foreign	currencies.	To	the	extent	effective, changes	in	the	fair	value	of	these	instruments	are	deferred	in	AOCI	and subsequently	reclassified	to	"Other	charges"	in	the	accompanying	consolidated statement	of	income	as	foreign	exchange	gains	and	losses	are	recognized	on	the related	intercompany	and	other	transactions.	The	portion	of	the	change	in	fair value	considered	to	be	ineffective	is	recognized	immediately	in	"Other	charges"	in the	accompanying	consolidated	statement	of	income.	All	amounts	related	to	these instruments	deferred	in	AOCI	as	of	December	31,	2012	will	be	reclassified	to earnings	within	the	next	twelve	months.	As	of	December	31,	2012	and	2011,	the fair	value	of	these	instruments	was	a	net	liability	of	$1	million	and	$5	million, respectively.

PPG	designates	forward	currency	contracts	as	hedges	against	the	Company's exposure	to	future	changes	in	fair	value	related	to	certain	firm	sales	commitments denominated	in	foreign	currencies.	These	contracts	are	designated	as	fair	value hedges.	As	such,	they	are	reported	at	fair	value	in	the	Company's	consolidated balance	sheet,	with	changes	in	the	fair	value	of	these	contracts	and	that	of	the related	firm	sales	commitments	reported	in	net	sales.	As	of	December	31,	2012, these	contracts	converted	$56	million	to	the	South	Korean	won	over	the	21	month period	ending	September	30,	2014.	As	of	December	31,	2011,	contracts	converted $91	million	to	the	South	Korean	won	over	the	30	month	period	ending	June	30, 2014.	As	of	December	31,	2012	and	2011,	the	fair	value	of	the	contracts	was

a	net	asset	of	$3	million	and	a	net	liability	of	$1	million,	respectively.

As	of	January	1,	2012,	PPG	had	nine	U.S.	dollar	to	euro	cross	currency	swap contracts	with	a	total	notional	amount	of	$1.16	billion,	of	which	$600	million	were to	settle	on	March	15,	2013	and	$560	million	were	to	settle	on	March	15,	2018.	In June	2012,	$600	million	of	swaps,	with	a	settlement	date	of	March	15,	2013,	were settled	with	PPG	receiving	$1	million	in	cash.	On	settlement	of	the	remaining outstanding	contracts,	PPG	will	receive	$560	million	U.S.	dollars	and	pay	euros	to the	counterparties	to	the	contracts.	During	the	term	of	these	contracts,	PPG	will receive	semiannual	payments	in	March	and	September	of	each	year	based	on	U.S. dollar,	long-term	fixed	interest	rates,	and	PPG	will	make	annual	payments	in March	of	each	year	to	the	counterparties	based	on	euro,	long-term	fixed	interest rates.	The	Company	designated	all	of	the	cross	currency	swaps	as	hedges	of	its	net investment	in	the	acquired	SigmaKalon	businesses	and,	as	a	result,	the	mark	to market	fair	value	adjustments	of	the	swaps	outstanding	have	been	and	will	be recorded	as	a	component	of	AOCI,	and	the	cash	flow	impact	of	these	swaps	has been	and	will	be	classified	as	investing	activities	in	the	consolidated	statement	of cash	flows.	As	of	December	31,	2012	and	December	31,	2011,	the	fair	value	of these	contracts	was	a	net	liability	of	$95	million	and	$120	million,	respectively.

As	of	December	31,	2012	and	2011,	PPG	designated	€300	million	euro- denominated	borrowings	as	a	hedge	of	a	portion	of	PPG's	net	investment	in	the Company's	European	operations.	Also,	during	2010,	certain	portions	of	PPG's various	other	euro-denominated	borrowings	were	designated	as	hedges	of	PPG's investments	in	its	European	operations.	As	a	result,	the	change	in	book	value	from adjusting	these	foreign-denominated	borrowings	to	current	spot	rates	was	deferred in	AOCI.

As	of	December	31,	2012	and	December	31,	2011,	the	Company	had accumulated	pretax	unrealized	translation	gains	in	AOCI	of	$9	million	and	$14 million,	respectively,	related	to	both	the	euro-denominated	borrowings	and	the cross	currency	swaps	that	have	been	designated	as	hedges	of	net	investments.

Deferrals	in	AOCI	related	to	hedges	of	the	Company's	net	investments	in European	operations	would	be	reclassified	and	recognized	in	earnings	upon	a substantial	liquidation,	sale	or	partial	sale	of	such	investments	or	upon	impairment of	all	or	a	portion	of	such	investments.

The	Company	manages	its	interest	rate	risk	by	balancing	its	exposure	to	fixed and	variable	rates	while	attempting	to	minimize	its	interest	costs.	Generally,	the Company	maintains	variable	interest	rate	debt	at	a	level	of	approximately	25 percent	to	50	percent	of	total	borrowings.	PPG	principally	manages	its	fixed	and variable	interest	rate	risk	by	retiring	and	issuing	debt	from	time	to	time	and through	the	use	of	interest	rate	swaps.	As	of	December	31,	2011,	interest	rate swaps	converted	$445	million	of	fixed	rate	debt	to	variable	rate	debt.	During	the year

ended	December	31,	2012,	PPG	settled	these	swaps	and	received	$29	million from	such	settlements.	When	outstanding,	the	swaps	were	designated	as	fair	value hedges.	As	such,	they	were	carried	at	fair	value.	Changes	in	the	fair	value	of	these swaps	and	that	of	the	related	debt	were	recorded	in	"Interest	expense"	in	the accompanying	consolidated	statement	of	income.	As	of	December	31,	2011,	the fair	value	of	these	contracts	was	a	net	asset	of	$26	million.

The	Company	entered	into	forward	starting	swaps	in	2009	and	in	the	second quarter	of	2010	to	effectively	lock-in	a	fixed	interest	rate	for	future	debt refinancings	with	an	anticipated	term	of	ten	years	based	on	the	ten	year	swap	rate, to	which	was	added	a	corporate	spread.	The	notional	amount	of	the	swaps outstanding	totaled	$400	million.	To	the	extent	that	the	swaps	were	effective, changes	in	the	fair	values	of	the	swap	contracts	were	deferred	in	AOCI.	The portion	of	the	change	in	fair	value	considered	to	be	ineffective	was	recognized immediately	in	Other	charges	in	the	accompanying	consolidated	statement	of income.	All	of	the	swap	contracts	were	settled	on	July	30,	2012,	resulting	in	a	cash payment	of	$121	million.	As	of	December	31,	2012,	the	amount	of	loss	recorded in	AOCI	was	$116	million.	The	remaining	balance	will	be	amortized	to	interest expense	over	the	remaining	term	of	the	ten-year	debt	that	was	issued	on	July	31, 2012.	(See	Note	8,	"Debt	and	Bank	Credit	Agreements	and	Leases"	for	further discussion	regarding	this	debt	issuance.)	As	of	December	31,	2011,	the	fair	value of	these	swaps	was	a	liability	of	$92	million.

Derivative	instruments	have	been	used	to	manage	the	Company's	exposure	to fluctuating	natural	gas	prices	through	the	use	of	natural	gas	swap	contracts.	There were	no	natural	gas	swap	contracts	outstanding	as	of	December	31,	2012	as	the price	of	natural	gas	has	declined	for	the	past	four	years	and	is	not	expected	to	be	as volatile	over	the	next	12	to	18	months	as	continued	development	of	shale	oil	and gas	reserves	will	maintain	downward	pressure	on	the	price	of	natural	gas.	To	the extent	that	these	instruments	were	effective	in	hedging	PPG's	exposure	to	price changes,	changes	in	the	fair	values	of	the	hedge	contracts	were	deferred	in	AOCI and	reclassified	to	"Cost	of	sales,	exclusive	of	depreciation	and	amortization"	as the	natural	gas	was	purchased.	The	amount	of	ineffectiveness	was	reported	in "Other	charges"	in	the	accompanying	consolidated	statement	of	income immediately.	As	of	December	31,	2011,	the	fair	value	of	these	contracts	was	a liability	of	$9	million.	There	was	no	balance	in	AOCI	as	of	December	31,	2012 related	to	the	contracts.

PPG	entered	into	a	one-year	renewable	equity	forward	arrangement	with	a bank	in	2003	in	order	to	mitigate	the	impact	on	PPG	earnings	of	changes	in	the	fair value	of	1,388,889	shares	of	PPG	stock	that	are	to	be	contributed	to	the	asbestos settlement	trust	as	discussed	in	Note	15,	"Commitments	and	Contingent Liabilities."	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	the	"Asbestos	settlement	–	net"	caption	of	the	accompanying consolidated

statement	of	income.	The	total	principal	amount	payable	for	these	shares	is	$62 million.	PPG	will	pay	to	the	bank	interest	based	on	the	principal	amount	and	the bank	will	pay	to	PPG	an	amount	equal	to	the	dividends	paid	on	these	shares	during the	period	this	instrument	is	outstanding.	The	difference	between	the	principal amount	and	any	amounts	related	to	unpaid	interest	or	dividends	and	the	current market	price	for	these	shares,	adjusted	for	credit	risk,	represents	the	fair	value	of the	instrument	as	well	as	the	amount	that	PPG	would	pay	or	receive	if	the	bank chose	to	net	settle	the	instrument.	Alternatively,	the	bank	may,	at	its	option, require	PPG	to	purchase	the	shares	covered	by	the	arrangement	at	the	principal amount	adjusted	for	unpaid	interest	and	dividends	as	of	the	date	of	settlement.	As of	December	31,	2012	and	2011,	the	fair	value	of	this	contract	was	an	asset	of $130	million	and	$56	million,	respectively.

No	derivative	instrument	initially	designated	as	a	hedge	instrument	was undesignated	or	discontinued	as	a	hedging	instrument	during	2012	or	2011.	Nor were	any	amounts	deferred	in	AOCI	reclassified	to	earnings	during	the	three-year period	ended	December	31,	2012	related	to	hedges	of	anticipated	transactions	that were	no	longer	expected	to	occur.

All	of	the	outstanding	derivative	instruments	are	subject	to	accelerated settlement	in	the	event	of	PPG's	failure	to	meet	its	debt	obligations	or	payment obligations	under	the	terms	of	the	instruments'	contractual	provisions.	In	addition, should	the	Company	be	acquired	and	its	payment	obligations	under	the	derivative instruments'	contractual	arrangements	not	be	assumed	by	the	acquirer,	or	should PPG	enter	into	bankruptcy,	receivership	or	reorganization	proceedings,	the instruments	would	also	be	subject	to	accelerated	settlement.

For	the	year	ended	December	31,	2012,	Other	comprehensive	income included	a	net	pretax	loss	due	to	cash	flow	hedge	derivatives	of	$11	million	($7 million,	net	of	tax).	This	loss	was	comprised	of	realized	losses	of	$27	million	and unrealized	losses	of	$38	million.	The	realized	losses	related	to	the	settlement during	the	period	of	natural	gas	swap	contracts	and	interest	rate	swaps	owned	by RS	Cogen	(Refer	to	Note	5,	"Investments"	for	a	discussion	regarding	this	equity method	investment.),	amortization	of	a	portion	of	the	loss	on	the	forward	starting swaps	that	was	deferred	in	AOCI,	and	realized	losses	on	foreign	currency contracts.	The	unrealized	losses	related	to	the	change	in	fair	value	of	the	natural gas	swap	contracts,	forward	starting	swaps,	interest	rate	swaps	owned	by	RS Cogen,	and	the	change	in	fair	value	of	the	foreign	currency	contracts.

For	the	year	ended	December	31,	2011,	Other	comprehensive	loss	included	a net	pretax	loss	due	to	cash	flow	hedge	derivatives	of	$51	million	($32	million,	net of	tax).	This	loss	was	comprised	of	realized	losses	of	$28	million	and	unrealized losses	of	$79	million.	The	realized	losses	related	to	the	settlement	during	the period	of	natural	gas	swap	contracts	and	interest	rate	swaps	owned	by	RS	Cogen (Refer	to	Note	5,	"Investments"	for	a	discussion	regarding	this	equity	method investment.),	offset	in	part	by	realized	gains	on	foreign	currency	contracts.	The unrealized	losses	related	to	the	change	in	fair

value	of	the	natural	gas	swap	contracts,	forward	starting	swaps	and	interest	rate swaps	owned	by	RS	Cogen,	offset	in	part	by	the	change	in	fair	value	of	the	foreign currency	contracts.

For	the	year	ended	December	31,	2010,	Other	comprehensive	loss	included	a net	pretax	loss	due	to	cash	flow	hedge	derivatives	of	$3	million	($2	million,	net	of tax).	This	loss	was	comprised	of	realized	losses	of	$93	million	and	unrealized losses	of	$96	million.	The	realized	losses	related	to	the	settlement	during	the period	of	natural	gas	swap	contracts,	interest	rate	swaps	owned	by	RS	Cogen (Refer	to	Note	5,	"Investments"	for	a	discussion	regarding	this	equity	method investment.)	and	foreign	currency	contracts.	The	unrealized	losses	related	to	the change	in	fair	value	of	the	natural	gas	swap	contracts,	forward	starting	swaps, foreign	currency	contracts	and	interest	rate	swaps	owned	by	RS	Cogen.

Refer	to	Note	9,	"Fair	Value	Measurement,"	for	additional	disclosures	related to	the	Company's	derivative	instruments	outstanding	as	of	December	31,	2012	and 2011.

The	following	tables	provide	details	for	the	years	ended	December	31,	2012 and	2011	related	to	fair	value,	cash	flow	and	net	investment	hedges,	by	type	of derivative	and	financial	instrument.	All	dollar	amounts	are	pretax.

(a) The	ineffective	portion	related	to	each	of	the	items	was	less	than	$ 0.1	million	of	expense.

(b) The	ineffective	portion	related	to	this	item	was	$0.5	million	of	income.

(c) The	ineffective	portion	related	to	this	item	was	$4	million	of	expense.

(d) The	ineffective	portion	related	to	this	item	was	$8	million	of	expense.

(a) The	ineffective	portion	related	to	each	of	the	items	was	less	than	 $0.1	million	of	either income	or	expense.

(c) The	ineffective	portion	related	to	this	item	was	$3	million	of	income.

(e) The	ineffective	portion	related	to	this	item	was	$2	million	of	expense.

# 12.	Earnings	Per	Common	Share

The	earnings	per	common	share	calculations	for	the	three	years	ended December	31,	2012,	are	as	follows:

| (Millions,	except	per	share	amounts) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Earnings\tper\tcommon\tshare\t(attributable\tto\tPPG) |  |  |  |
| \t Net\tincome\t(attributable\tto\tPPG) | $941 | $1,095 | $769 |
| \t Weighted\taverage\tcommon\tshares\toutstanding | 153.4 | 157.3 | 164.5 |
| \t Earnings\tper\tcommon\tshare\t(attributable\tto\tPPG): |  |  |  |
| Net\tincome\t(attributable\tto\tPPG) | $6.13 | $6.96 | $4.67 |
| Earnings\tper\tcommon\tshare\t-\tassuming\tdilution\t(attributable\tto\tPPG) |  |  |  |
| \t Net\tincome\t(attributable\tto\tPPG) | $941 | $1,095 | $769 |
| \t Weighted\taverage\tcommon\tshares\toutstanding | 153.4 | 157.3 | 164.5 |
| \t Effect\tof\tdilutive\tsecurities: |  |  |  |
| Stock\toptions | 0.8 | 1.1 | 0.8 |
| Other\tstock\tcompensation\tplans | 0.9 | 0.9 | 0.6 |
| \t Potentially\tdilutive\tcommon\tshares | 1.7 | 2.0 | 1.4 |
| Adjusted\tweighted\taverage\tcommon\tshares\noutstanding | 155.1 | 159.3 | 165.9 |
| Earnings\tper\tcommon\tshare\t-\tassuming\tdilution\t(attributable\tto\tPPG) |  |  |  |
| Net\tincome\t(attributable\tto\tPPG) | $6.06 | $6.87 | $4.63 |

There	were	no	outstanding	stock	options	excluded	in	2012	and	0.6	million	and 1.2	million	outstanding	stock	options	excluded	in	2011	and	2010,	respectively, from	the	computation	of	diluted	earnings	per	common	share	due	to	their	anti- dilutive	effect.

# 13.	Income	Taxes

The	following	table	presents	a	reconciliation	of	the	statutory	U.S.	corporate federal	income	tax	rate	to	the	Company's	effective	income	tax	rate:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| U.S.\tfederal\tincome\ttax\trate | 35.00\t% | 35.00\t% | 35.00\t% |
| Changes\tin\trate\tdue\tto: |  |  |  |
| \t U.S.\tState\tand\tlocal\ttaxes | 1.04 | 1.03 | 1.31 |
| \t U.S.\ttax\tbenefit\ton\tforeign\tdividends | (1.43) | (1.04) | 0.05 |
| \t Taxes\ton\tnon-U.S.\tearnings | (7.99) | (8.03) | (8.11) |
| \t PPG\tdividends\tpaid\tto\tthe\tESOP | (0.44) | (0.43) | (0.67) |
| \t U.S.\ttax\tincentives | (2.08) | (1.67) | (1.83) |
| \t Significant\taudit\tsettlements | — | (1.09) | — |
| \t Other | 0.03 | 0.34 | (0.28) |
| \t One-time\tcharge,\ttax\tlaw\tchange | — | — | 6.57 |
| Effective\tincome\ttax\trate | 24.13\t% | 24.11\t% | 32.04\t% |

The	effective	tax	rate	for	2012	includes	tax	benefits	of	$60	million,	or	37.7%, on	the	$159	million	charge	for	environmental	remediation	costs,	$45	million,	or 21.4%,	on	the	$208	million	business	restructuring	charge,	$2	million,	or	28.6%,	on the	acquisition-related	expenses	of	$6	million,	$3	million,	or	11.0%,	on	the commodity	chemicals	separation	and	merger	and	acquisition-related	costs	of	$26 million.	The	separation	of	PPG's	commodity	chemicals	business	and	subsequent merger	of	the	subsidiary	holding	that	business	with	a	subsidiary	of	Georgia

Gulf	(Refer	to	Note	25,	"Separation	and	Merger	Transaction")	is	expected	to	be generally	tax	free	to	PPG,	as	a	result	of	this,	the	deductibility	for	U.S.	federal	tax purposes	of	the	costs	associated	with	the	transaction	is	expected	to	be	limited.	We currently	estimate	that	approximately	20%	of	the	separation	and	merger	costs incurred	to	date	will	be	tax	deductible.

U.S.	tax	incentives	include	the	R&D	credit,	the	U.S.	manufacturing	deduction and	the	tax	free	Medicare	Part	D	subsidy.	The	increase	of	the	impact	of	U.S.	tax incentives	in	2012	can	be	explained	by	an	increase	in	the	manufacturing	deduction which	more	than	offset	the	absence	of	the	R&D	credit	in	2012.

The	2012	and	2011	increase	in	the	U.S.	tax	benefit	on	foreign	dividends	was mainly	due	to	the	tax	efficient	repatriation	of	high	taxed	foreign	earnings	resulting from	tax	planning.

The	2010	effective	tax	rate	was	increased	because	PPG	recorded	a	one-time, aftertax	charge	in	the	first	quarter	of	2010	of	$85	million,	or	51	cents	per	share,	as a	result	of	a	change	in	U.S.	tax	law	included	in	the	U.S.	Patient	Protection	and Affordable	Care	Act	enacted	in	March	2010.	Under	the	prior	tax	law,	the	total amount	paid	for	prescription	drug	costs	for	retirees	over	the	age	of	65	was	tax deductible.	Beginning	in	2013,	however,	these	costs	will	only	be	deductible	to	the extent	they	exceed	the	amount	of	the	annual	subsidy	PPG	receives	from	the	U.S. government	under	Medicare	Part	D.	As	a	result	of	this	change,	the	Company's deferred	tax	asset,	which	reflects	the	future	tax	deductibility	of	these	post retirement	costs,	had	to	be	reduced	in	the	first	quarter	of	2010,	the	period	that	the change	in	the	tax	law	was	enacted,	as	required	by	the	accounting	guidance	for income	taxes.

The	following	table	gives	details	of	income	tax	expense	reported	in	the accompanying	consolidated	statement	of	income.

| (Millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Current\tincome\ttax\texpense |  |  |  |
| U.S.\tfederal | $332 | $193 | $62 |
| Non-U.S. | 203 | 176 | 170 |
| U.S.\tState\tand\tlocal | 28 | 20 | 15 |
| Total\tcurrent\tincome\ttax | 563 | 389 | 247 |
| Deferred\tincome\ttax\texpense |  |  |  |
| U.S.\tfederal | (162) | 11 | 70 |
| Non-U.S. | (48) | (17) | 2 |
| U.S.\tState\tand\tlocal | (15) | 2 | 11 |
| One-time\tcharge,\ttax\tlaw\tchange | — | — | 85 |
| Total\tdeferred\tincome\ttax | (225) | (4) | 168 |
| Total | $338 | $385 | $415 |

Net	deferred	income	tax	assets	and	liabilities	as	of	December	31,	2012	and 2011,	were	as	follows:

| (Millions) | 2012 | 2011 |
| :--- | :--- | :--- |
| Deferred\tincome\ttax\tassets\trelated\tto |  |  |
| Employee\tbenefits | $1,000 | $963 |
| Contingent\tand\taccrued\tliabilities | 598 | 524 |
| Operating\tloss\tand\tother\tcarry-forwards | 223 | 183 |
| Inventories | 21 | 29 |
| Property | 5 | 3 |
| Derivatives | 38 | 95 |
| Other | 41 | 97 |
| Valuation\tallowance | (138) | (134) |
| Total | 1,788 | 1,760 |
| Deferred\tincome\ttax\tliabilities\trelated\tto |  |  |
| Property | 405 | 500 |
| Intangibles | 452 | 460 |
| Employee\tbenefits | 69 | 64 |
| Other | 3 | 63 |
| Total | 929 | 1,087 |
| Deferred\tincome\ttax\tassets\t–\tnet | $859 | $673 |

As	of	December	31,	2012,	subsidiaries	of	the	Company	had	available	net operating	loss	carryforwards	of	approximately	$611	million	for	income	tax purposes,	of	which	approximately	$529	million	has	an	indefinite	expiration.	The remaining	$82	million	expires	between	the	years	2013	and	2027.	The	tax	effected amount	of	the	net	operating	loss	carryforwards	is	$177	million.	A	valuation allowance	has	been	established	for	carry-forwards	at	December	31,	2012,	when the	ability	to	utilize	them	is	not	likely.

The	Company	has	$3,476	million	and	$2,920	million	of	undistributed earnings	of	non-U.S.	subsidiaries	as	of	December	31,	2012	and	December	31, 2011,	respectively.		These	amounts	relate	to	approximately	300	subsidiaries	in more	than	70	taxable	jurisdictions.	No	deferred	U.S.	income	taxes	have	been provided	on	these	earnings	as	they	are	considered	to	be	reinvested	for	an	indefinite period	of	time	or	will	be	repatriated	when	it	is	tax	effective	to	do	so.	The	Company estimates	that	of	these	amounts,	$2,865	million	as	of	December	31,	2012	and $2,454	million	as	of	December	31,	2011	of	the	undistributed	earnings,	could	be repatriated	at	little	to	no	U.S.	tax	cost	due	in	part	to	the	benefit	of	U.S.	foreign	tax credits	that	would	be	available	if	these	earnings	were	repatriated.	The	repatriation of	undistributed	earnings	of	non-U.S.	subsidiaries	of	approximately	$611	million as	of	December	31,	2012	and	$466	million	as	of	December	31,	2011	would	have resulted	in	a	U.S.	tax	cost	of	approximately	$110	million	and	$85	million, respectively.

The	Company	files	federal,	state	and	local	income	tax	returns	in	numerous domestic	and	foreign	jurisdictions.	In	most	tax	jurisdictions,	returns	are	subject	to examination	by	the	relevant	tax	authorities	for	a	number	of	years	after	the	returns have	been	filed.	The	Company	is	no	longer	subject	to	examinations	by	tax authorities	in	any	major	tax	jurisdiction	for	years	before	2003.	Additionally,	the Internal	Revenue	Service

has	completed	its	examination	of	the	Company's	U.S.	federal	income	tax	returns filed	for	years	through	2009.	The	examination	of	the	Company's	U.S.	federal income	tax	return	for	2010	is	currently	underway	and	is	expected	to	be	finalized during	2013.

The	activity	in	the	accrued	liability	for	unrecognized	tax	benefits	for	the	three years	ended	December	31,	2012	is	as	follows:

| (Millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tJanuary\t1 | $107 | $111 | $108 |
| Additions\tbased\ton\ttax\tpositions\trelated\tto\tthe\tcurrent |  |  |  |
| year | 12 | 15 | 7 |
| Additions\tfor\ttax\tpositions\tof\tprior\tyears | 2 | 17 | 15 |
| Reductions\tfor\ttax\tpositions\tof\tprior\tyears | (12) | (19) | (5) |
| Pre-acquisition\tunrecognized\ttax\tbenefits | 2 | — | — |
| Reductions\tfor\texpiration\tof\tthe\tapplicable\tstatute\tof\nlimitations | (6) | (7) | (6) |
| Settlements | (23) | (8) | (2) |
| Currency | — | (2) | (6) |
| Balance\tat\tDecember\t31 | $82 | $107 | $111 |

The	amount	of	unrecognized	tax	benefits	was	$82	million,	$107	million	and $111	million	as	of	December	31,	2012,	2011	and	2010,	respectively.	If	recognized, $79	million,	$100	million	and	$103	million	would	impact	the	effective	rate	as	of December	31,	2012,	2011	and	2010,	respectively.	The	Company	recognizes accrued	interest	and	penalties	related	to	unrecognized	tax	benefits	in	income	tax expense.	The	Company	had	accrued	as	of	December	31,	2012,	2011	and	2010,	$10 million,	$15	million	and	$15	million,	respectively,	for	estimated	interest	and penalties	on	unrecognized	tax	benefits.	The	Company	recognized	$5	million	of income	in	2012	related	to	the	reduction	of	estimated	interest	and	penalties.	The Company	recognized	no	expense	and	$2	million	of	expense	for	estimated	interest and	penalties	during	the	years	ended	December	31,	2011	and	2010,	respectively.

While	it	is	expected	that	the	amount	of	unrecognized	tax	benefits	will	change in	the	next	12	months,	quantification	of	an	estimated	range	cannot	be	made	at	this time.	The	Company	does	not	expect	this	change	to	have	a	significant	impact	on	the results	of	operations	or	financial	position	of	the	Company,	however,	actual settlements	may	differ	from	amounts	accrued.

# 14.	Pensions	and	Other	Postretirement	Benefits

# Defined	Benefit	Plans

PPG	has	defined	benefit	pension	plans	that	cover	certain	employees worldwide.	The	principal	defined	benefit	pension	plans	are	those	in	the	U.S., Canada,	the	Netherlands	and	the	U.K.	which,	in	the	aggregate,	represent	99%	of the	market	value	of	plan	assets	at	December	31,	2012.	PPG	also	sponsors	welfare benefit	plans	that	provide	postretirement	medical	and	life	insurance	benefits	for certain	U.S.	and	Canadian	employees	and	their	dependents.	These	programs require	retiree	contributions	based	on	retiree-selected	coverage	levels	for	certain retirees	and

their	dependents	and	provide	for	sharing	of	future	benefit	cost	increases	between PPG	and	participants	based	on	management	discretion.	The	Company	has	the right	to	modify	or	terminate	certain	of	these	benefit	plans	in	the	future.	Salaried and	certain	hourly	employees	hired	on	or	after	October	1,	2004,	are	not	eligible	for postretirement	medical	benefits.	Salaried	employees	hired,	rehired	or	transferred to	salaried	status	on	or	after	January	1,	2006,	and	certain	hourly	employees	hired in	2006	or	thereafter	are	eligible	to	participate	in	a	defined	contribution	retirement plan.	These	employees	are	not	eligible	for	defined	benefit	pension	plan	benefits.

# Plan	Design	Changes

	In	January	2011,	the	Company	approved	an	amendment	to	one	of	its	U.S. defined	benefit	pension	plans	that	represents	about	77%	of	the	total	U.S.	projected benefit	obligation	at	December	31,	2012,	2011	and	2010.	Depending	upon	the affected	employee's	combined	age	and	years	of	service	to	PPG,	this	change resulted	in	certain	employees	no	longer	accruing	benefits	under	this	plan	as	of December	31,	2011,	while	the	remaining	employees	will	no	longer	accrue	benefits under	this	plan	as	of	December	31,	2020.	The	affected	employees	will	participate in	the	Company's	defined	contribution	retirement	plan	from	the	date	their	benefit under	the	defined	benefit	plan	is	frozen.	The	Company	remeasured	the	projected benefit	obligation	of	this	amended	plan,	which	resulted	in	an	approximate	$65 million	reduction	in	the	liability	and	lowered	2011	pension	expense	by approximately	$12	million.	The	Company	made	similar	changes	to	certain	other U.S.	defined	benefit	pension	plans	in	2011.	The	Company	recognized	a curtailment	loss	and	special	termination	benefits	associated	with	these	plan amendments	of	$5	million	in	2011.	During	2010,	PPG	made	changes	to	certain	of its	defined	benefit	pension	plans	to	shift	benefits	for	future	service	to	defined contribution	plans.	The	Company	plans	to	continue	reviewing	and	potentially changing	other	PPG	defined	benefit	plans	in	the	future.

# Separation	and	Merger	of	Commodity	Chemicals	Business

On	January	28,	2013,	PPG	completed	the	separation	of	its	commodity chemicals	business	and	the	merger	of	the	subsidiary	holding	the	PPG	commodity chemicals	business	with	a	subsidiary	of	Georgia	Gulf,	as	discussed	in	Note	25, "Separation	and	Merger	Transaction".	PPG	transferred	the	defined	benefit	pension plan	and	other	postretirement	benefit	liabilities	for	the	affected	employees	in	the U.S.,	Canada,	and	Taiwan	in	the	separation	resulting	in	net	settlement	and curtailment	charges	of	approximately	$30	million	that	will	be	recorded	in	the	first quarter	of	2013.	This	transaction	will	lower	the	projected	benefit	obligation	of PPG's	defined	benefit	pension	plans	by	approximately	$550	million	and	the accumulated	benefit	obligation	of	the	other	postretirement	benefit	plans	by approximately	$165	million.	PPG	will	also	transfer	pension	assets	of approximately	$480	million.	Pension	and	other	postretirement	benefit	expense	of approximately	$25	million	was	incurred	by	the	Commodity	Chemicals	business	in 2012.

# Postretirement	medical

Beginning	in	2004,	PPG's	other	postretirement	benefit	plan	provided	a	retiree prescription	drug	benefit	which	was	at	least	actuarially	equivalent	to	Medicare	Part D.	Therefore,	PPG	received	the	federal	subsidy	provided	for	under	the	Medicare Act	of	2003.	The	federal	subsidy	is	not	subject	to	U.S.	federal	income	tax	and	is recorded	as	a	reduction	in	annual	net	periodic	benefit	cost	of	other	postretirement benefits.	Since	2004,	PPG	has	made	periodic	amendments	to	its	U.S.	other postretirement	benefit	plan;	however,	from	January	1,	2010	to	December	31,	2012 the	Company	has	provided	a	self-insured	plan	for	certain	retirees	and	their dependents	that	was	at	least	actuarially	equivalent	to	Medicare	Part	D	and	has received	the	subsidy	under	the	Medicare	Act	of	2003	for	those	retirees	and	their dependents.

In	October	2012,	the	Company	decided,	effective	January	1,	2013,	to	move	to an	Employee	Group	Waiver	Plan	("EGWP")	for	certain	Medicare-eligible	retirees and	their	dependents.	The	EGWP	includes	a	fully-insured	Medicare	Part	D prescription	drug	plan.	As	such,	beginning	in	2013	PPG	is	no	longer	eligible	to receive	the	federal	subsidy	provided	under	the	Medicare	Act	of	2003	for	these retirees	and	their	dependents.

The	following	table	sets	forth	the	changes	in	projected	benefit	obligations ("PBO")	(as	calculated	as	of	December	31),	plan	assets,	the	funded	status	and	the amounts	recognized	in	the	accompanying	consolidated	balance	sheet	for	the Company's	defined	benefit	pension	and	other	postretirement	benefit	plans:

| (Millions) | 2012 | 2011 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- |
| Projected\tbenefit\nobligation,\tJanuary\t1 | $5,333 | $4,952 | $1,394 | $1,235 |
| Service\tcost | 61 | 63 | 22 | 19 |
| Interest\tcost | 239 | 254 | 57 | 63 |
| Plan\tamendments | (2) | — | (19) | 22 |
| Actuarial\tlosses\t/\t(gains)\t-\tnet | 443 | 444 | (33) | 126 |
| Benefits\tpaid | (347) | (281) | (62) | (64) |
| Foreign\tcurrency\ttranslation\tadjustments | 59 | (37) | 3 | (3) |
| Curtailment\tand\tspecial\ttermination |  |  |  |  |
| benefits | (6) | (58) | — | — |
| Other | 4 | (4) | — | (4) |
| Projected\tbenefit\nobligation,\tDecember\t31 | $5,784 | $5,333 | $1,362 | $1,394 |
| Market\tvalue\tof\tplan\nassets,\tJanuary\t1 | $4,382 | $4,127 |  |  |
| Actual\treturn\ton\tplan\tassets | 571 | 426 |  |  |
| Company\tcontributions | 81 | 121 |  |  |
| Participant\tcontributions | 2 | 2 |  |  |
| Benefits\tpaid | (335) | (262) |  |  |
| Plan\texpenses\tand\tother-net | (1) | (2) |  |  |
| Foreign\tcurrency\ttranslation\tadjustments | 50 | (30) |  |  |
| Market\tvalue\tof\tplan\nassets,\tDecember\t31 | $4,750 | $4,382 |  |  |
| Funded\tStatus | $(1,034) | $(951) | $(1,362) | $(1,394) |
| Amounts\trecognized\tin\tthe\tConsolidated\tBalance\tSheet: |  |  |  |  |
| Other\tassets\t(long-term) | 27 | 23 | — | — |
| Accounts\tpayable\tand\taccrued\tliabilities | (20) | (13) | (75) | (87) |
| Accrued\tpensions | (1,041) | (961) | — | — |
| Other\tpostretirement\tbenefits | — | — | (1,287) | (1,307) |
| Net\tliability\trecognized | $(1,034) | $(951) | $(1,362) | $(1,394) |

The	PBO	is	the	actuarial	present	value	of	benefits	attributable	to	employee service	rendered	to	date,	including	the	effects	of	estimated	future	pay	increases. The	accumulated	benefit	obligation	("ABO")	is	the	actuarial	present	value	of benefits	attributable	to	employee	service	rendered	to	date,	but	does	not	include	the effects	of	estimated	future	pay	increases.	The	ABO	for	all	defined	benefit	pension plans	as	of	December	31,	2012	and	2011	was	$5,517	million	and	$5,117	million, respectively.

The	aggregate	PBO	and	fair	value	of	plan	assets	(in	millions)	for	the	pension plans	with	PBO	in	excess	of	plan	assets	were	$5,588	and	$4,534,	respectively,	as of	December	31,	2012,	and	$5,164	and	$4,196,	respectively,	as	of	December	31, 2011.	The	aggregate	ABO	and	fair	value	of	plan	assets	(in	millions)	for

Amounts	(pretax)	not	yet	reflected	in	net	periodic	benefit	cost	and	included	in accumulated	other	comprehensive	loss	include	the	following:

| (Millions) | Pensions |  | Other<br>Postretirement<br>Benefits | Other<br>Postretirement<br>Benefits |
| :--- | :--- | :--- | :--- | :--- |
|  | 2012 | 2011 | 2012 | 2011 |
| Accumulated\tnet\tactuarial\tlosses | $2,097 | $2,052 | $505 | $571 |
| Accumulated\tprior\tservice\tcredit | (3) | (2) | (45) | (37) |
| Total | $2,094 | $2,050 | $460 | $534 |

The	accumulated	net	actuarial	losses	for	pensions	relate	primarily	to	the	actual return	on	plan	assets	being	less	than	the	expected	return	on	plan	assets	in	2000- 2002,	and	2008	and	a	decline	in	the	discount	rate	since	1999.	The	accumulated	net actuarial	losses	for	other	postretirement	benefits	relate	primarily	to	actual healthcare	costs	increasing	at	a	higher	rate	than	assumed	during	the	2001-2003 period	and	the	decline	in	the	discount	rate.	Since	the	accumulated	net	actuarial losses	exceed	10%	of	the	higher	of	the	market	value	of	plan	assets	or	the	PBO	at the	beginning	of	the	year,	amortization	of	such	excess	over	the	average	remaining service	period	of	active	employees	expected	to	receive	benefits	has	been	included in	net	periodic	benefit	costs	for	pension	and	other	postretirement	benefits	in	each of	the	last	three	years.	The	decrease	in	2012	of	the	accumulated	prior	service	credit for	other	postretirement	benefits	relates	to	several	amendments	to	these	plans approved	by	the	Company	during	2011.	Accumulated	prior	service	cost	(credit)	is amortized	over	the	future	service	periods	of	those	employees	who	are	active	at	the dates	of	the	plan	amendments	and	who	are	expected	to	receive	benefits.

The	decrease	in	accumulated	other	comprehensive	loss	(pretax)	in	2012 relating	to	defined	benefit	pension	and	other	postretirement	benefits	consists	of:

| (Millions) | Pensions | Benefits |
| :--- | :--- | :--- |
| Net\tactuarial\tloss\t(gain)\tarising\tduring\tthe\tyear | $177 | $(33) |
| New\tprior\tservice\tcredit | (1) | (19) |
| Amortization\tof\tactuarial\tloss | (150) | (34) |
| Amortization\tof\tprior\tservice\tcost | — | 12 |
| Foreign\tcurrency\ttranslation\tadjustments\tand\tother | 18 | — |
| Net\tchange | $44 | $(74) |

The	net	actuarial	loss	arising	during	2012	related	to	the	Company's	pension plans	was	primarily	due	to	a	decrease	in	the	discount	rate,	partially	offset	by	actual plan	asset	returns	greater	than	expected	plan	asset	returns.	The	net	actuarial	gain arising	during	2012	related	to	the	Company's	other	postretirement	benefit	plans was	primarily	due	to	demographic	changes	and

updated	claim	costs,	partially	offset	by	a	decrease	in	the	discount	rate.

The	estimated	amounts	of	accumulated	net	actuarial	loss	and	prior	service cost	for	the	defined	benefit	pension	plans	that	will	be	amortized	from	accumulated other	comprehensive	income	into	net	periodic	benefit	cost	in	2013	are	$139 million	and	$(1)	million,	respectively.	The	estimated	amounts	of	accumulated	net actuarial	loss	and	prior	service	(credit)	for	the	other	postretirement	benefit	plans that	will	be	amortized	from	accumulated	other	comprehensive	(loss)	income	into net	periodic	benefit	cost	in	2013	are	$34	million	and	$(11)	million,	respectively.

Net	periodic	benefit	cost	for	the	three	years	ended	December	31,	2012, included	the	following:

|  |  | Pensions |  |  | Other<br>Postretirement<br>Benefits |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Millions) | 2012 | 2011 | 2010 | 2012 | 2011 | 2010 |
| Service\tcost | $61 | $63 | $64 | $22 | $19 | $19 |
| Interest\tcost | 239 | 254 | 249 | 57 | 63 | 64 |
| Expected\treturn\ton\tplan\tassets | (292) | (312) | (278) | — | — | — |
| Amortization\tof\tprior\tservice\ncost\t(credit) | — | 1 | 5 | (12) | (12) | (5) |
| Amortization\tof\tactuarial\nlosses | 151 | 120 | 121 | 34 | 30 | 19 |
| Curtailments\tand\tspecial\ntermination\tbenefits | — | 5 | — | — | — | — |
| Net\tperiodic\tbenefit\tcost | $159 | $131 | $161 | $101 | $100 | $97 |

Net	periodic	benefit	cost	is	included	in	Cost	of	sales,	exclusive	of	depreciation and	amortization,	Selling,	general	and	administrative	and	Research	and development	in	the	accompanying	consolidated	statement	of	income.

# Assumptions

The	following	weighted	average	assumptions	were	used	to	determine	the benefit	obligation	for	the	Company's	defined	benefit	pension	and	other postretirement	plans	as	of	December	31,	2012	and	2011:

The	following	weighted	average	assumptions	were	used	to	determine	the	net periodic	benefit	cost	for	the	Company's	defined	benefit	pension	and	other postretirement	benefit	plans	for	the	three	years	in	the	period	ended	December	31, 2012:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Discount\trate | 4.6% | 5.3% | 5.7% |
| Expected\treturn\ton\tassets | 7.0% | 7.6% | 7.8% |
| Rate\tof\tcompensation\tincrease | 3.9% | 3.8% | 3.9% |

These	assumptions	for	each	plan	are	reviewed	on	an	annual	basis.	In determining	the	expected	return	on	plan	asset	assumption,	the	Company	evaluates the	mix	of	investments	that	comprise	each	plan's	assets	and	external	forecasts	of future	long-term	investment	returns.	The	Company	compares	the	expected	return on	plan	assets	assumption	to	actual	historic	returns	to	ensure	reasonability.	The expected	return	on	plan	assets	assumption	to	be	used	in	determining	2013	net periodic	pension	expense	will	be	6.8%	(7.3%	for	the	U.S.	plans).

At	December	31,	2010,	the	Company	updated	the	mortality	table	used	to calculate	its	U.S.	defined	benefit	pension	and	other	postretirement	benefit liabilities.	Previously,	the	Company	had	used	the	mortality	table	known	as	RP 2000,	projected	to	2006	and	now	uses	the	RP	2000	table	projected	to	2017.	This updated	table	reflects	improvements	in	mortality	rates.

The	weighted-average	healthcare	cost	trend	rate	(inflation)	used	for	2012	was 6.3%	declining	to	4.5%	in	the	year	2024.	For	2013,	the	assumed	weighted-average healthcare	cost	trend	rate	used	will	be	6.4%	declining	to	4.5%	in	the	year	2024. These	assumptions	are	reviewed	on	an	annual	basis.	In	selecting	rates	for	current and	long-term	health	care	cost	assumptions,	the	Company	takes	into	consideration a	number	of	factors	including	the	Company's	actual	health	care	cost	increases,	the design	of	the	Company's	benefit	programs,	the	demographics	of	the	Company's active	and	retiree	populations	and	external	expectations	of	future	medical	cost inflation	rates.	If	these	2013	health	care	cost	trend	rates	were	increased	or decreased	by	one	percentage	point	per	year,	such	increase	or	decrease	would	have the	following	effects:

|  | One-Percentage	Point | One-Percentage	Point |
| :--- | :--- | :--- |
| (Millions) | Increase | Decrease |
| Increase\t(decrease)\tin\tthe\taggregate\tof\tservice\tand\tinterest\tcost\ncomponents\tof\tannual\texpense | $10 | $(8) |
| Increase\t(decrease)\tin\tthe\tbenefit\tobligation | $155 | $(91) |

# 	Contributions

On	August	17,	2006,	the	Pension	Protection	Act	of	2006	("PPA")	was	signed into	law,	changing	the	funding	requirements	for	the	Company's	U.S.	defined benefit	pension	plans	beginning	in	2008.	In	July	2012,	the	Moving	Ahead	for Progress	in	the	21st	Century	Act	("MAP-21")	was	signed	into	law.	MAP-21 included	discount-rate	stabilization	rules	that	reduce	the	funding	targets	required on	an	ERISA	basis	for	the	U.S.	defined	benefit	pension	plans.	As	a	result,	PPG	did not	have	to	make	a	mandatory	contribution	to	these	plans	in	2012	and	does	not expect	to	have	to	make	a	mandatory	contribution	in	2013.	PPG	did	not	make	a voluntary	contribution	to	these	plans	in	2012.	PPG	made	a	voluntary	contribution to	its	U.S.	defined	benefit	plans	of	$50	million	and	$250	million	in	2011	and	2010, respectively.	PPG	made	contributions	to	its	non-U.S.	defined	benefit	pension	plans of	$81	million	in	2012,	$71	million	in	2011	and	approximately	$85	million	in 2010,	some	of	which	were	required	by	local	funding	requirements.	PPG	expects	to make	no	voluntary	contributions	to	its	U.S.	plans	and

mandatory	contributions	to	its	non-U.S.	plans	of	approximately	$77	million	in 2013.

# Benefit	Payments

During	2012,	the	Company	initiated	a	lump	sum	payout	program	that	gave certain	terminated	vested	participants	in	certain	U.S.	defined	benefit	pension	plans the	option	to	take	a	one-time	lump	sum	cash	payment	in	lieu	of	receiving	a	future monthly	annuity.		PPG	paid	$70	million	in	2012	in	lump	sum	benefits	to terminated	vested	participants	who	elected	to	participate	in	the	program.

# Plan	Assets

Each	PPG	sponsored	defined	benefit	pension	plan	is	managed	in	accordance with	the	requirements	of	local	laws	and	regulations	governing	defined	benefit pension	plans	for	the	exclusive	purpose	of	providing	pension	benefits	to participants	and	their	beneficiaries.	Investment	committees	comprised	of	PPG managers	have	fiduciary	responsibility	to	oversee	the	management	of	pension	plan assets	by	third	party	asset	managers.	Pension	plan	assets	are	held	in	trust	by financial	institutions	and	managed	on	a	day-to-day	basis	by	the	asset	managers. The	asset	managers	receive	a	mandate	from	each	investment	committee	that	is aligned	with	the	asset	allocation	targets	established	by	each	investment	committee to	achieve	the	plan's	investment	strategies.	The	performance	of	the	asset	managers is	monitored	and	evaluated	by	the	investment	committees	throughout	the	year.

Pension	plan	assets	are	invested	to	generate	investment	earnings	over	an extended	time	horizon	to	help	fund	the	cost	of	benefits	promised	under	the	plans while	mitigating	investment	risk.	The	asset	allocation	targets	established	for	each pension	plan	are	intended	to	diversify	the	investments	among	a	variety	of	asset categories	and	among	a	variety	of	individual	securities	within	each	asset	category to	mitigate	investment	risk	and	provide	each	plan	with	sufficient	liquidity	to	fund the	payment	of	pension	benefits	to	retirees.

The	following	summarizes	the	weighted	average	target	pension	plan	asset allocation	as	of	December	31,	2012	and	2011	for	all	PPG	defined	benefit	plans:

The	fair	values	of	the	Company's	pension	plan	assets	at	December	31,	2012, by	asset	category,	are	as	follows:

| (Millions) | Level	1(1) | Level	2(1) | Level	3(1) | Total |
| :--- | :--- | :--- | :--- | :--- |
| Asset\tCategory |  |  |  |  |
| Equity\tsecurities: |  |  |  |  |
| \t U.S. |  |  |  |  |
| Large\tcap | $1 | $172 | $— | $173 |
| Small\tcap | — | 146 | — | 146 |
| PPG\tcommon\tstock | 244 | — | — | 244 |
| \t Non-U.S. |  |  |  |  |
| Developed\tand\nemerging\tmarkets(2) | — | 578 | — | 578 |
| Debt\tsecurities: |  |  |  |  |
| \t Cash\tand\tcash\tequivalents | — | 499 | — | 499 |
| \t Corporate(3) |  |  |  |  |
| \t U.S.(4) | — | 922 | 76 | 998 |
| Developed\tand\nemerging\tmarkets(2) | — | 185 | — | 185 |
| \t Diversified(5) | — | 635 | 4 | 639 |
| \t Government |  |  |  |  |
| \t U.S.(4) | 196 | 69 | — | 265 |
| \t Developed\tmarkets | — | 301 | — | 301 |
| \t Other(6) | — | 155 | 27 | 182 |
| Real\testate,\thedge\tfunds,\tand\nother | — | 128 | 412 | 540 |
| \t Total | $441 | $3,790 | $519 | $4,750 |

(1) These	levels	refer	to	the	accounting	guidance	on	fair	value	measurement	described	in	Note 9,	"Fair	Value	Measurement."

(2) These	amounts	represent	holdings	in	investment	grade	debt	or	equity	securities	of	issuers	in both	developed	markets	and	emerging	economies.

(3) This	category	represents	investment	grade	debt	securities	from	a	diverse	set	of	industry issuers.

(4) These	investments	are	primarily	long	duration	fixed	income	securities.

(5) This	category	represents	commingled	funds	invested	in	diverse	portfolios	of	debt	securities.

(6) This	category	includes	mortgage-backed	and	asset	backed	debt	securities,	municipal	bonds and	other	debt	securities	including	derivatives.

| (Millions) | Level	1(1) | Level	2(1) | Level	3(1) | Total |
| :--- | :--- | :--- | :--- | :--- |
| Asset\tCategory |  |  |  |  |
| Equity\tsecurities: |  |  |  |  |
| \t U.S. |  |  |  |  |
| Large\tcap | $— | $342 | $— | $342 |
| Small\tcap | 125 | 80 | — | 205 |
| PPG\tcommon\tstock | 151 | — | — | 151 |
| \t Non-U.S. |  |  |  |  |
| Developed\tand\nemerging\tmarkets(2) | — | 640 | — | 640 |
| Debt\tsecurities: |  |  |  |  |
| \t Cash\tand\tcash\tequivalents | — | 270 | — | 270 |
| \t Corporate(3) |  |  |  |  |
| \t U.S.(4) | — | 672 | 68 | 740 |
| Developed\tand\nemerging\tmarkets(2) | — | 338 | — | 338 |
| \t Diversified(5) | — | 339 | — | 339 |
| \t Government |  |  |  |  |
| \t U.S.(4) | 397 | 113 | — | 510 |
| \t Developed\tmarkets | — | 267 | — | 267 |
| \t Other(6) | 5 | 188 | 28 | 221 |
| Real\testate,\thedge\tfunds,\tand\nother | 41 | 73 | 245 | 359 |
| \t Total | $719 | $3,322 | $341 | $4,382 |
| (1)\nThese\tlevels\trefer\tto\tthe\taccounting\tguidance\ton\tfair\tvalue\tmeasurement\tdescribed\tin\tNote |  |  |  |  |

(6) This	category	includes	mortgage-backed	and	asset	backed	debt	securities,	municipal	bonds and	other	debt	securities.

During	2012,	the	Company	determined	that	certain	pension	assets	at December	31,	2011	were	previously	presented	in	the	Level	1	category	and	should have	been	presented	in	the	Level	2	category	and	certain	pension	assets	presented in	Level	2	should	have	been	presented	in	the	Level	3	category	based	on	the	inputs used	to	value	the	securities.		Accordingly,	the	2011	presentation	of	pension	assets has	been	revised	in	the	table	above	and	in	the	Level	3	table	below.	This	revision had	no	impact	on	the	Company's	consolidated	balance	sheet,	statement	of	income or	statement	of	cash	flows.

The	change	in	the	fair	value	of	the	Company's	Level	3	pension	assets	for	the years	ended	December	31,	2012	and	2011	was	as	follows:

|  | Real | Other	Debt | &amp; |  |
| :--- | :--- | :--- | :--- | :--- |
| (Millions) | Estate | Securities | Other\tassets | Total |
| Balance,\tJanuary\t1,\t2011 | $117 | $39 | $22 | $178 |
| Realized\tgain/(loss) | (1) | — | (9) | (10) |
| Unrealized\tgain/(loss)\tfor\npositions\tstill\theld | 15 | — | 6 | 21 |
| Transfers\tin/(out) | 25 | (11) | 138 | 152 |
| Currency | — | — | — | — |
| Balance,\tDecember\t31,\t2011 | $156 | $28 | $157 | $341 |
| Realized\tgain/(loss) | 8 | — | 13 | 21 |
| Unrealized\tgain/(loss)\tfor |  |  |  |  |
| positions\tstill\theld | 8 | — | (1) | 7 |
| Transfers\tin/(out) | 4 | (1) | 148 | 151 |
| Currency | — | — | (1) | (1) |
| Balance,\tDecember\t31,\n2012 | $176 | $27 | $316 | $519 |

Real	Estate	properties	are	externally	appraised	at	least	annually	by	reputable, independent	appraisal	firms.	Property	valuations	are	also	reviewed	on	a	regular basis	and	are	adjusted	if	there	has	been	a	significant	change	in	circumstances related	to	the	property	since	the	last	valuation.

Other	debt	securities	consist	of	insurance	contracts,	which	are	externally valued	by	insurance	companies	based	on	the	present	value	of	the	expected	future cash	flows.	Hedge	funds	consist	of	a	wide	range	of	investments	which	target	a relatively	stable	investment	return.	The	underlying	funds	are	valued	at	different frequencies,	some	monthly	and	some	quarterly,	based	on	the	value	of	the underlying	investments.	Other	assets	consist	primarily	of	small	investments	in private	equity	funds	and	senior	secured	debt	obligations	of	non-investment	grade borrowers.

# Other	Plans

PPG	has	retained	certain	liabilities	for	pension	and	post-employment	benefits earned	for	service	up	to	the	2008	date	of	sale	of	its	former	automotive	glass	and service	business,	totaling	approximately	$1,047	million	and	$1,011	million	at December	31,	2012	and	2011,	respectively,	for	employees	who	were	active	as	of the	divestiture	date	and	for	individuals	who	were	retirees	of	the	business	as	of	the divestiture	date.	PPG	recognized	expense	of	approximately	$35	million	and	$35 million	related	to	these	obligations	in	2012	and	2011,	respectively.

Pittsburgh	Glass	Works	LLC	ceased	production	at	its	Oshawa,	Canada	plant in	2009	and	closed	its	Hawkesbury,	Canada	plant	in	2010.	Under	Canadian pension	regulations,	these	plant	closures	will	result	in	partial	wind-ups	of	the pension	plans	for	former	employees	at	these	plants,	the	liability	for	which	was retained	by	PPG.	Each	of	these	partial	windups	will	result	in	settlement	charges against	PPG	earnings	and	require	cash	contributions	to	the	plans.	The	final settlement	charge	and

cash	amounts	will	be	determined	following	the	required	review	of	the	partial wind-ups	by	the	Canadian	pension	authorities.	The	amount	of	each	pretax	charge and	the	cash	contribution	is	currently	estimated	to	be	in	the	range	of	$20-30 million	and	$10-15	million,	respectively.	The	proposed	effective	dates	of	the partial	windups	related	to	the	Oshawa	and	Hawkesbury	plant	closures	are February	27,	2009	and	August	31,	2010,	respectively.	Cash	contributions	are currently	being	made	to	the	plans	based	on	estimated	cash	requirements	and	must be	completed	by	the	end	of	the	five	year	period	following	the	proposed	effective dates	of	the	partial	windups.	The	settlement	charges	will	be	recorded	following	the approval	of	the	partial	windups	by	the	Canadian	pension	authorities	and	when	the related	cash	contributions	are	completed.

The	Company	recognized	expense	for	defined	contribution	pension	plans	in 2012,	2011	and	2010	of	$42	million,	$38	million	and	$31	million,	respectively.	As of	December	31,	2012	and	2011,	the	Company's	liability	for	contributions	to	be made	to	the	defined	contribution	pension	plans	was	$13	million	and	$13	million, respectively.

The	Company	has	a	deferred	compensation	plan	for	certain	key	managers which	allows	them	to	defer	a	portion	of	their	compensation	in	a	phantom	PPG stock	account	or	other	phantom	investment	accounts.	The	amount	deferred	earns	a return	based	on	the	investment	options	selected	by	the	participant.	The	amount owed	to	participants	is	an	unfunded	and	unsecured	general	obligation	of	the Company.	Upon	retirement,	death,	disability,	termination	of	employment, scheduled	payment	or	unforeseen	emergency,	the	compensation	deferred	and related	accumulated	earnings	are	distributed	in	accordance	with	the	participant's election	in	cash	or	in	PPG	stock,	based	on	the	accounts	selected	by	the	participant.

The	plan	provides	participants	with	investment	alternatives	and	the	ability	to transfer	amounts	between	the	phantom	non-PPG	stock	investment	accounts.	To mitigate	the	impact	on	compensation	expense	of	changes	in	the	market	value	of	the liability,	the	Company	has	purchased	a	portfolio	of	marketable	securities	that mirror	the	phantom	non-PPG	stock	investment	accounts	selected	by	the participants,	except	the	money	market	accounts.	These	investments	are	carried	by PPG	at	fair	market	value,	and	the	changes	in	market	value	of	these	securities	are also	included	in	earnings.	Trading	occurs	in	this	portfolio	to	align	the	securities held	with	the	participant's	phantom	non-PPG	stock	investment	accounts,	except the	money	market	accounts.

The	cost	of	the	deferred	compensation	plan,	comprised	of	dividend equivalents	accrued	on	the	phantom	PPG	stock	account,	investment	income	and the	change	in	market	value	of	the	liability,	was	expense	in	2012,	2011	and	2010	of $10	million,	$2	million	and	$10	million,	respectively.	These	amounts	are	included in	"Selling,	general	and	administrative"	in	the	accompanying	consolidated statement	of	income.	The	change	in	market	value	of	the	investment	portfolio	was income	of	$8	million,	$1	million,	and	$9	million	in	2012,	2011	and	2010, respectively,	of	which	$0.9	million,	$0.8	million	and	$0.4

million	was	realized	gains,	and	is	also	included	in	"Selling,	general	and administrative."

The	Company's	obligations	under	this	plan,	which	are	included	in	"Accounts payable	and	accrued	liabilities"	and	"Other	liabilities"	in	the	accompanying consolidated	balance	sheet,	totaled	$102	million	and	$95	million	as	of December	31,	2012	and	2011,	respectively,	and	the	investments	in	marketable securities,	which	are	included	in	"Investments"	and	"Other	current	assets"	in	the accompanying	consolidated	balance	sheet,	were	$64	million	and	$59	million	as	of December	31,	2012	and	2011,	respectively.

# 15.	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	contract,	patent,	environmental,	product	liability, antitrust	and	other	matters	arising	out	of	the	conduct	of	PPG's	current	and	past business	activities.	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.

# Antitrust	Matters

As	previously	disclosed,	in	2010	PPG	reached	agreements	to	resolve	flat	glass antitrust	matters	in	which	PPG	was	a	defendant,	for	approximately	$6	million.	The court	approved	the	settlements	and	distribution	of	the	funds	occurred	in	the	first quarter	2012.

In	2010,	Transitions	Optical,	Inc.	("TOI"),	a	consolidated	subsidiary	of	the Company,	entered	into	a	settlement	agreement,	without	admitting	liability,	with the	Federal	Trade	Commission,	which	had	alleged	that	TOI	violated	Section	5	of the	Federal	Trade	Commission	Act.	Following	the	announcement	of	the	settlement with	the	Federal	Trade	Commission,	30	private	putative	class	cases	were	filed against	TOI,	alleging	that	it	has	monopolized	and/or	conspired	to	monopolize	the market	for	photochromic	lenses.	All	of	the	federal	actions	have	been	transferred and	centralized	in	the	Middle	District	of	Florida	(the	"MDL	Action").	Amended complaints	in	the	MDL	Action	were

filed	in	November	and	December	2010.	In	late	2011,	the	court	ruled	on	TOI's motion	to	dismiss	and	allowed	the	plaintiffs	to	file	new	or	further	amended complaints.	Plaintiffs	in	the	MDL	Action	include	Insight	Equity	A.P.	X,	LP,	d/b/a Vision-Ease	Lens	Worldwide,	Inc.,	which	has	sued	on	its	own	behalf,	and	putative classes	of	"direct	purchasers,"	including	laboratories	and	retailers	(the "Lab/Retailer	Plaintiffs"),	and	"indirect	purchasers,"	consisting	of	end-user consumers.	Plaintiffs	in	the	MDL	Action	generally	allege	that	TOI's	exclusive dealing	arrangements	resulted	in	higher	prices	and	seek	lost	profits	and	damages determined	by	the	price	premium	attributable	to	wrongful	exclusive	deals.	The damages	sought	are	subject	to	trebling.	The	Lab/Retailer	Plaintiffs	also	allege	that TOI	and	certain	affiliates	of	Essilor	International	SA	conspired	with	respect	to	the wrongful	exclusive	dealing	arrangements.	Briefing	with	respect	to	class certification	is	expected	to	be	completed	in	2013.	TOI	believes	it	has	meritorious defenses	and	continues	to	defend	all	of	the	above-described	actions	vigorously.

# Asbestos	Matters

For	over	30	years,	PPG	has	been	a	defendant	in	lawsuits	involving	claims alleging	personal	injury	from	exposure	to	asbestos.	Most	of	PPG's	potential exposure	relates	to	allegations	by	plaintiffs	that	PPG	should	be	liable	for	injuries involving	asbestos-containing	thermal	insulation	products,	known	as	Unibestos, 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.	As	of	the	April	16,	2000	order	which	stayed	and	enjoined	asbestos claims	against	PPG	(as	discussed	below),	PPG	was	one	of	many	defendants	in numerous	asbestos-related	lawsuits	involving	approximately	114,000	claims served	on	PPG.	During	the	period	of	the	stay,	PPG	generally	has	not	been	aware	of the	dispositions,	if	any,	of	these	asbestos	claims.

# Background	of	PC	Bankruptcy	Plan	of	Reorganization

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	after-tax	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	30	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	certain	asbestos	claims	against	PPG	and	PC	(the	"2002 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	against	Corning	Incorporated	and	PC	(the "2003	Corning	Settlement	Arrangement").

The	terms	of	the	2002	PPG	Settlement	Arrangement	and	the	2003	Corning Settlement	Arrangement	were	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	subsequently	filed.	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.	In March	2004,	the	second	amended	PC	plan	of	reorganization	(the	"second	amended PC	plan	of	reorganization")	received	the	required	votes	to	approve	the	plan	with	a channeling	injunction	for	present	and	future	asbestos	claimants	under	§524(g)	of the	Bankruptcy	Code.	After	voting	results	for	the	second	amended	PC	plan	of reorganization	were	received,	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 second	amended	PC	plan	of	reorganization.	At	that	hearing,	creditors	and	other parties	in	interest	raised	objections	to	the	second	amended	PC	plan	of reorganization.	Following	that	hearing,	the	Bankruptcy	Court	scheduled	oral arguments	for	the	contested	items.

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	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	had	any	applicability	to	the	second	amended PC	plan	of	reorganization.	Oral	arguments	on	these	matters	were	subsequently held	in	March	2005.	During	an	omnibus	hearing	on	February	28,	2006,	the Bankruptcy	Court	judge	stated	that	she	was	prepared	to	rule	on	the	PC	plan	of reorganization	in	the	near	future,	provided	certain	amendments	were	made	to	the plan.	Those	amendments	were	filed,	as	directed,	on	March	17,	2006.	After	further conferences	and	supplemental	briefings,	in	December	2006,	the	court	denied confirmation	of	the	second	amended	PC	plan	of	reorganization,	on	the	basis	that the	plan	was	too	broad	in	the	treatment	of	allegedly	independent	asbestos	claims not	associated	with	PC.

# Terms	of	2002	PPG	Settlement	Arrangement

PPG	had	no	obligation	to	pay	any	amounts	under	the	2002	PPG	Settlement Arrangement	until	30	days	after	the	second	amended	PC	plan	of	reorganization was	finally	approved	by	an	appropriate	court	order	that	was	no	longer	subject	to appellate	review	(the	"Effective	Date").	If	the	second	amended	PC	plan	of reorganization	had	been	approved	as	proposed,	PPG	and	certain	of	its	insurers (along	with	PC)	would	have	made	payments	on	the	Effective	Date	to	the	Trust, which	would	have	provided	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	have	conveyed	the	following	assets	to	the	Trust:	(i)	the stock	it	owns	in	PC	and	Pittsburgh	Corning	Europe,	(ii)	1,388,889	shares	of	PPG's common	stock	and	(iii)	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	had 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.	In	addition	to the	conveyance	of	these	assets,	PPG	would	have	paid	$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	were not	participating	in	the	settlement,	the	rights	to	which	would	have	been	assigned	to the	Trust	by	PPG.

Under	the	proposed	2002	PPG	Settlement	Arrangement,	PPG's	participating historical	insurance	carriers	would	have	made	cash	payments	to	the	Trust	of approximately	$1.7	billion	between	the	Effective	Date	and	2023.	These	payments could	also	have	been	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 have	assigned	to	the	Trust	its	rights,	insofar	as	they	related	to	the	asbestos	claims to	have	been	resolved	by	the	Trust,	to	the	proceeds	of	policies	issued	by	certain insurance	carriers	that	were	not	participating	in	the	2002	PPG	Settlement Arrangement	and	from	the	estates	of	insolvent	insurers	and	state	insurance guaranty	funds.

Under	the	proposed	2002	PPG	Settlement	Arrangement,	PPG	would	have granted	asbestos	releases	to	all	participating	insurers,	subject	to	a	coverage-in- place	agreement	with	certain	insurers	for	the	continuing	coverage	of	premises claims	(discussed	below).	PPG	would	have	granted	certain	participating	insurers full	policy	releases	on	primary	policies	and	full	product	liability	releases	on	excess coverage	policies.	PPG	would	have	also	granted	certain	other	participating	excess insurers	credit	against	their	product	liability	coverage	limits.

If	the	second	amended	PC	plan	of	reorganization	incorporating	the	terms	of the	2002	PPG	Settlement	Arrangement	and	the	2003	Corning	Settlement Arrangement	had	been	approved	by	the	Bankruptcy	Court,	the	Court	would	have entered	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	have	also	prohibited	codefendants	in those	cases	from	asserting	claims	against	PPG	for	contribution,	indemnification	or other	recovery.	All	such	claims	would	have	been	filed	with	the	Trust	and	only paid	from	the	assets	of	the	Trust.

# Modified	Third	Amended	PC	Plan	of	Reorganization

To	address	the	issues	raised	by	the	Bankruptcy	Court	in	its	December	2006 ruling,	the	interested	parties	engaged	in	extensive	negotiations	regarding	the	terms of	a	third	amended	PC	plan	of	reorganization,	including	modifications	to	the	2002 PPG	Settlement	Arrangement.	A	modified	third	amended	PC	plan	of reorganization	(the	"third	amended	PC	plan	of	reorganization"),	including	a modified	PPG	settlement	arrangement	(the	"2009	PPG	Settlement	Arrangement"), was	filed	with	the	Bankruptcy	Court	on	January	29,	2009.	The	parties	also	filed	a disclosure	statement	describing	the	third	amended	PC	plan	of	reorganization	with the	court.	The	third	amended	PC	plan	of	reorganization	also	includes	a	modified settlement	arrangement	of	Corning	Incorporated.

Several	creditors	and	other	interested	parties	filed	objections	to	the	disclosure statement.	Those	objections	were	overruled	by	the	Bankruptcy	Court	by	order dated	July	6,	2009	approving	the	disclosure	statement.	The	third	amended	PC	plan of	reorganization	and	disclosure	statement	were	then	sent	to	creditors,	including asbestos	claimants,	for	voting.	The	report	of	the	voting	agent,	filed	on	February	18, 2010,	revealed	that	all	voting	classes,	including	asbestos	claimants,	voted overwhelmingly	in	favor	of	the	third	amended	PC	plan	of	reorganization,	which included	the	2009	PPG	Settlement	Arrangement.	In	light	of	the	favorable	vote	on the	third	amended	PC	plan	of	reorganization,	the	Bankruptcy	Court	conducted	a hearing	regarding	the	fairness	of	the	proposed	plan,	including	whether	(i)	the	plan would	be	fair	with	respect	to	present	and	future	claimants,	(ii)	such	claimants would	be	treated	in	substantially	the	same	manner,	and	(iii)	the	protection provided	to	PPG	and	its	participating	insurers	would	be	fair	in	view	of	the	assets they	would	convey	to	the	Trust	to	be	established	as	part	of	the	third	amended	PC plan	of	reorganization.	The	hearing	was	held	in	June	of	2010.	The	remaining objecting	parties	(a	number	of	objections	were	resolved	through	plan	amendments and	stipulations	filed	before	the	hearing)	appeared	at	the	hearing	and	presented their	cases.	At	the	conclusion	of	the	hearing,	the	Bankruptcy	Court	established	a briefing	schedule	for	its	consideration	of	confirmation	of	the	plan	and	the objections	to	confirmation.	That	briefing	was	completed	and	final	oral	arguments held	in	October	2010.	On	June	16,	2011	the	Bankruptcy	Court	issued	a	decision denying	confirmation	of	the

third	amended	PC	plan	of	reorganization.	Although	denying	confirmation,	PPG believes	that	the	decision	viewed	favorably	many	features	of	that	plan.

Since	the	June	16,	2011	ruling,	the	third	amended	plan	of	reorganization	has been	the	subject	of	negotiations	among	the	parties	in	interest,	amendments, proposed	amendments	and	hearings.	On	April	20,	2012,	PC	filed	plan	materials with	proposed	amendments	to	the	third	amended	PC	plan	of	reorganization,	which PPG	believed	would,	upon	adoption	as	a	final	amended	plan,	resolve	all	of	the issues	raised	by	the	Bankruptcy	Court	in	its	June	16,	2011	ruling.	On	June	21, 2012,	the	Bankruptcy	Court	heard	argument	regarding	whether	the	remaining insurer	objectors	had	standing	to	continue	to	prosecute	their	objections	to	the	plan materials.	The	Bankruptcy	Court	did	not	rule	at	that	time	on	the	question	of	the remaining	insurer	objectors'	standing,	but	took	the	matter	under	advisement.	On July	17,	2012,	the	Bankruptcy	Court	issued	an	order	setting	forth	the	schedule	for finalizing	an	amended	plan	and	moving	the	PC	bankruptcy	reorganization proceedings	forward.	Specifically,	the	Bankruptcy	Court	ordered	that	an	amended plan	of	reorganization	be	filed	on	or	before	August	20,	2012.	Consistent	with	that order,	PC	filed	an	amended	PC	plan	of	reorganization	on	August	17,	2012,	along with	a	certification	advising	the	Bankruptcy	Court	that	the	August	17,	2012 amended	PC	plan	of	reorganization	was	identical	to	the	plan	materials	filed	on April	20,	2012.	The	July	17	order	contemplated	further	proceedings	in	connection with	potential	objections	to	that	plan	and	set	a	hearing	for	October	10,	2012	for arguments	on	any	objections.	Objections	were	filed	by	three	entities	on	or	before the	deadline	prescribed	by	the	Bankruptcy	Court.	One	set	of	objections	was resolved	by	PC	and	another	set	merely	restated	for	appellate	purposes	objections filed	by	a	party	that	the	Bankruptcy	Court	previously	overruled.	The	Bankruptcy Court	heard	oral	argument	on	the	one	remaining	set	of	objections	filed	by	the remaining	insurer	objectors	on	October	10,	2012.	At	the	conclusion	of	that argument,	the	Bankruptcy	Court	set	forth	a	schedule	for	negotiating	and	filing language	that	would	resolve	some,	but	not	all,	of	the	objections	to	confirmation advanced	by	the	insurer	objectors.	On	October	25,	2012,	PC	filed	a	notice regarding	proposed	confirmation	order	language	that	resolved	those	specific objections.	The	Bankruptcy	Court	has	taken	the	remaining	objections	under advisement.

If	the	Bankruptcy	Court	ultimately	finds	the	amended	PC	plan	of reorganization	to	be	acceptable,	the	Bankruptcy	Court	will	enter	a	confirmation order	if	all	requirements	to	confirm	a	plan	of	reorganization	under	the	Bankruptcy Code	have	been	satisfied.	Such	an	order	could	be	appealed	to	the	U.S.	District Court	for	the	Western	District	of	Pennsylvania	by	any	remaining	insurer	or	other objectors	to	the	amended	and	confirmed	PC	plan	of	reorganization.	Assuming	that the	District	Court	approves	a	confirmation	order,	any	remaining	insurer	or	other objectors	could	appeal	the	order	to	the	U.S.	Third	Circuit	Court	of	Appeals	and subsequently	could	seek	review	by	the	U.S.	Supreme	Court.

The	2009	PPG	Settlement	Arrangement	will	not	become	effective	until	an amended	PC	plan	of	reorganization	is	finally

approved	by	an	appropriate	court	order	that	is	no	longer	subject	to	appellate review,	and	PPG's	initial	contributions	will	not	be	due	until	30	business	days thereafter	(the	"Funding	Effective	Date").

# Asbestos	Claims	Subject	to	Bankruptcy	Court's	Channeling	Injunction

If	an	amended	PC	plan	of	reorganization	is	approved	by	the	Bankruptcy Court	and	becomes	effective,	a	channeling	injunction	will	be	entered	under §524(g)	of	the	Bankruptcy	Code	prohibiting	present	and	future	claimants	from asserting	asbestos	claims	against	PC.	With	regard	to	PPG,	the	channeling injunction	by	its	terms	will	prohibit	present	and	future	claimants	from	asserting claims	against	PPG	that	arise,	in	whole	or	in	part,	out	of	exposure	to	Unibestos,	or any	other	asbestos	or	asbestos-containing	products	manufactured,	sold	and/or distributed	by	PC,	or	asbestos	on	or	emanating	from	any	PC	premises.	The injunction	by	its	terms	will	also	prohibit	codefendants	in	these	cases	that	are subject	to	the	channeling	injunction	from	asserting	claims	against	PPG	for contribution,	indemnification	or	other	recovery.	Such	injunction	will	also	preclude the	prosecution	of	claims	against	PPG	arising	from	alleged	exposure	to	asbestos	or asbestos-containing	products	to	the	extent	that	a	claimant	is	alleging	or	seeking	to impose	liability,	directly	or	indirectly,	for	the	conduct	of,	claims	against	or demands	on	PC	by	reason	of	PPG's:	(i)	ownership	of	a	financial	interest	in	PC;	(ii) involvement	in	the	management	of	PC,	or	service	as	an	officer,	director	or employee	of	PC	or	a	related	party;	(iii)	provision	of	insurance	to	PC	or	a	related party;	or	(iv)	involvement	in	a	financial	transaction	affecting	the	financial condition	of	PC	or	a	related	party.	The	foregoing	PC	related	claims	are	referred	to as	"PC	Relationship	Claims"	and	constitute,	in	PPG	management's	opinion,	the vast	majority	of	the	pending	asbestos	personal	injury	claims	against	PPG.	All claims	channeled	to	the	Trust	will	be	paid	only	from	the	assets	of	the	Trust.

# Asbestos	Claims	Retained	by	PPG

The	channeling	injunction	provided	for	under	the	third	amended	PC	plan	of reorganization,	as	amended,	will	not	extend	to	any	claim	against	PPG	that	arises out	of	exposure	to	any	asbestos	or	asbestos-containing	products	manufactured, sold	and/or	distributed	by	PPG	or	its	subsidiaries	that	is	not	a	PC	Relationship Claim,	and	in	this	respect	differs	from	the	channeling	injunction	contemplated	by the	second	amended	PC	plan	of	reorganization	filed	in	2003.	While	management believes	that	the	vast	majority	of	the	approximately	114,000	claims	against	PPG alleging	personal	injury	from	exposure	to	asbestos	relate	to	products manufactured,	distributed	or	sold	by	PC,	the	potential	liability	for	any	non-PC Relationship	Claims	will	be	retained	by	PPG.	Because	a	determination	of	whether an	asbestos	claim	is	a	non-PC	Relationship	Claim	would	typically	not	be	known until	shortly	before	trial	and	because	the	filing	and	prosecution	of	asbestos	claims (other	than	certain	premises	claims)	against	PPG	has	been	enjoined	since	April 2000,	the	actual	number	of	non-PC	Relationship	Claims	that	may	be	pending	at the	expiration	of	the	stay	or	the	number	of	additional	claims	that	may	be	filed against	PPG	in	the	future	cannot	be	determined	at	this	time.	PPG	does	not	expect the	Bankruptcy	Court	to	lift	the	stay	until	after	confirmation	or	rejection	of	the third	amended	PC	plan	of	reorganization,	as	amended,	although	the	bankruptcy court	may	entertain	motions	to	lift	the	stay	as	to	specific	claims.	PPG	intends	to defend	against	all	such	claims	vigorously	and	their	ultimate	resolution	in	the	court system	is	expected	to	occur	over	a	period	of	years.

In	addition,	similar	to	what	was	contemplated	by	the	second	amended	PC	plan of	reorganization,	the	channeling	injunction	will	not	extend	to	claims	against	PPG alleging	personal	injury	caused	by	asbestos	on	premises	owned,	leased	or	occupied by	PPG	(so	called	"premises	claims"),	which	generally	have	been	subject	to	the stay	imposed	by	the	Bankruptcy	Court.	Historically,	a	small	proportion	of	the claims	against	PPG	and	its	subsidiaries	have	been	premises	claims,	and	based upon	review	and	analysis,	PPG	believes	that	the	number	of	premises	claims currently	comprises	less	than	2%	of	the	total	asbestos	related	claims	against	PPG. Beginning	in	late	2006,	the	Bankruptcy	Court	lifted	the	stay	with	respect	to	certain premises	claims	against	PPG.	As	a	result,	PPG	and	its	primary	insurers	have settled	approximately	500	premises	claims.	PPG's	insurers	agreed	to	provide insurance	coverage	for	a	major	portion	of	the	payments	made	in	connection	with the	settled	claims,	and	PPG	accrued	the	portion	of	the	settlement	amounts	not covered	by	insurance.	PPG,	in	conjunction	with	its	primary	insurers	as	appropriate, evaluates	the	factual,	medical,	and	other	relevant	information	pertaining	to additional	claims	as	they	are	being	considered	for	potential	settlement.	The number	of	such	claims	under	consideration	for	potential	settlement,	currently approximately	380,	varies	from	time	to	time.	Premises	claims	remain	subject	to	the stay,	as	outlined	above,	although	certain	claimants	have	requested	the	Court	to	lift the	stay	with	respect	to	these	claims	and	the	stay	has	been	lifted	as	to	some	claims. PPG	believes	that	any	financial	exposure	resulting	from	such	premises	claims, taking	into	account	available	insurance

coverage,	will	not	have	a	material	adverse	effect	on	PPG's	consolidated	financial position,	liquidity	or	results	of	operations.

# PPG's	Funding	Obligations

PPG	has	no	obligation	to	pay	any	amounts	under	the	third	amended	PC	plan of	reorganization,	as	amended,	until	the	Funding	Effective	Date.	If	the	third amended	PC	plan	of	reorganization,	as	amended,	is	approved,	PPG	and	certain	of its	insurers	will	make	the	following	contributions	to	the	Trust.	On	the	Funding Effective	Date,	PPG	will	relinquish	any	claim	to	its	equity	interest	in	PC,	convey the	stock	it	owns	in	Pittsburgh	Corning	Europe	and	transfer	1,388,889	shares	of PPG's	common	stock	or	cash	equal	to	the	fair	value	of	such	shares	as	defined	in the	2009	PPG	Settlement	Arrangement.	PPG	will	make	aggregate	cash	payments to	the	Trust	of	approximately	$825	million,	payable	according	to	a	fixed	payment schedule	over	a	period	ending	in	2023.	The	first	payment	is	due	on	the	Funding 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.	PPG's	historical	insurance	carriers	participating	in	the	third amended	PC	plan	of	reorganization	will	also	make	cash	payments	to	the	Trust	of approximately	$1.7	billion	between	the	Funding	Effective	Date	and	2027.	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.	PPG	will	grant	asbestos	releases	and indemnifications	to	all	participating	insurers,	subject	to	amended	coverage-in-place arrangements	with	certain	insurers	for	remaining	coverage	of	premises	claims. PPG	will	grant	certain	participating	insurers	full	policy	releases	on	primary policies	and	full	product	liability	releases	on	excess	coverage	policies.	PPG	will also	grant	certain	other	participating	excess	insurers	credit	against	their	product liability	coverage	limits.

PPG's	obligation	under	the	2009	PPG	Settlement	Arrangement	at	December 31,	2008	was	$162	million	less	than	the	amount	that	would	have	been	due	under the	2002	PPG	Settlement	Arrangement.	This	reduction	is	attributable	to	a	number of	negotiated	provisions	in	the	2009	PPG	Settlement	Arrangement,	including	the provisions	relating	to	the	channeling	injunction	under	which	PPG	retains	liability for	any	non-PC	Relationship	Claims.	PPG	will	retain	such	amount	as	a	reserve	for asbestos-related	claims	that	will	not	be	channeled	to	the	Trust,	as	this	amount represents	PPG's	best	estimate	of	its	liability	for	these	claims.	PPG	does	not	have sufficient	current	claim	information	or	settlement	history	on	which	to	base	a	better estimate	of	this	liability,	in	light	of	the	fact	that	the	Bankruptcy	Court's	stay	has been	in	effect	since	2000.	As	a	result,	PPG's	reserve	at	December	31,	2012	and December	31,	2011	for	asbestos-related	claims	that	will	not	be	channeled	to	the Trust	is	$162	million.	This	amount	is	included	within	"Other	liabilities"	on	the accompanying	consolidated	balance	sheets.	In	addition,	under	the	2009	PPG Settlement	Arrangement,	PPG	will	retain	for	its	own	account	rights	to	recover proceeds	from	certain	historical	insurance	assets,	including	policies	issued	by	non- participating	insurers.	Rights	to	recover	these	proceeds	would

have	been	assigned	to	the	Trust	by	PPG	under	the	2002	PPG	Settlement Arrangement.

Following	the	effective	date	of	the	third	amended	PC	plan	of	reorganization, as	amended,	and	the	lifting	of	the	Bankruptcy	Court	stay,	PPG	will	monitor	the activity	associated	with	asbestos	claims	which	are	not	channeled	to	the	Trust pursuant	to	the	third	amended	PC	plan	of	reorganization,	and	evaluate	its estimated	liability	for	such	claims	and	related	insurance	assets	then	available	to the	Company	as	well	as	underlying	assumptions	on	a	periodic	basis	to	determine whether	any	adjustment	to	its	reserve	for	these	claims	is	required.

Of	the	total	obligation	of	$920	million	and	$834	million	under	the	2009	PPG Settlement	Arrangement	at	December	31,	2012	and	2011,	respectively,	$683 million	and	$593	million	are	reported	as	a	current	liabilities	and	the	present	value of	the	payments	due	in	the	years	2014	to	2023	totaling	$237	million	and	2013	to 2023	totaling	$241	million	are	reported	as	a	non-current	liability	in	the accompanying	consolidated	balance	sheet	as	of	December	31,	2012	and	2011.	The future	accretion	of	the	non-current	portion	of	the	liability	totals	$109	million	at December	31,	2012,	and	will	be	reported	as	expense	in	the	consolidated	statement of	income	over	the	period	through	2023,	as	follows	(in	millions):

The	following	table	summarizes	the	impact	on	PPG's	financial	statements	for the	three	years	ended	December	31,	2012	resulting	from	the	2009	PPG	Settlement Arrangement	including	the	change	in	fair	value	of	the	stock	to	be	transferred	to	the Trust	and	the	related	equity	forward	instrument	(see	Note	11,	"Derivative Financial	Instruments	and	Hedge	Activities")	and	the	increase	in	the	net	present value	of	the	future	payments	to	be	made	to	the	Trust.

|  | Asbestos	Settlement	Liability | Asbestos	Settlement	Liability | Equity |  |
| :--- | :--- | :--- | :--- | :--- |
| (Millions) | Current | Long-term | Forward\n(Asset)\nLiability | Pretax\nCharge |
| Balance\tas\tof\tJanuary\t1,\t2010 | $534 | $238 | $(18) | $13 |
| Change\tin\tfair\tvalue: |  |  |  |  |
| \t PPG\tstock | 35 | — | — | 35 |
| \t Equity\tforward\tinstrument | — | — | (37) | (37) |
| Accretion\tof\tasbestos\tliability | — | 14 | — | 14 |
| Reclassification | 9 | (9) | — | — |
| Balance\tas\tof\tand\tActivity\tfor |  |  |  |  |
| the\tyear\tended\tDecember\t31, |  |  |  |  |
| 2010 | $578 | $243 | $(55) | $12 |
| Change\tin\tfair\tvalue: |  |  |  |  |
| \t PPG\tstock | (1) | — | — | (1) |
| \t Equity\tforward\tinstrument | — | — | (1) | (1) |
| Accretion\tof\tasbestos\tliability | — | 14 | — | 14 |
| Reclassification | 16 | (16) | — | — |
| Balance\tas\tof\tand\tActivity\tfor |  |  |  |  |
| the\tyear\tended\tDecember\t31, |  |  |  |  |
| 2011 | $593 | $241 | $(56) | $12 |
| Change\tin\tfair\tvalue: |  |  |  |  |
| \t PPG\tstock | 72 | — | — | 72 |
| \t Equity\tforward\tinstrument | — | — | (74) | (74) |
| Accretion\tof\tasbestos\tliability | — | 14 | — | 14 |
| Reclassification | 18 | (18) | — | — |
| Balance\tas\tof\tand\tActivity\tfor |  |  |  |  |
| the\tyear\tended\tDecember\t31, |  |  |  |  |
| 2012 | $683 | $237 | $(130) | $12 |

The	fair	value	of	the	equity	forward	instrument	is	included	as	an	"Other current	asset"	as	of	December	31,	2012	and	2011	in	the	accompanying 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	consolidated	balance	sheet	as	of December	31,	2012,	consists	of	all	such	payments	required	through	June	2013,	the fair	value	of	PPG's	common	stock	and	the	value	of	PPG's	investment	in	Pittsburgh Corning	Europe.	The	amount	due	June	30,	2014	of	$5	million	and	the	net	present value	of	the	remaining	payments	is	included	in	the	long-term	asbestos	settlement liability	in	the	accompanying	consolidated	balance	sheet	as	of	December	31,	2012.

# Enjoined	Claims

If	the	2009	PPG	Settlement	Arrangement	is	not	implemented,	for	any	reason, and	the	Bankruptcy	Court	stay	expires,	PPG	intends	to	defend	vigorously	the pending	and	any	future	asbestos	claims,	including	PC	Relationship	Claims,

asserted	against	it	and	its	subsidiaries.	PPG	continues	to	assert	that	it	is	not responsible	for	any	injuries	caused	by	PC	products,	which	it	believes	account	for the	vast	majority	of	the	pending	claims	against	PPG.	Prior	to	2000,	PPG	had	never been	found	liable	for	any	PC-related	claims.	In	numerous	cases,	PPG	was dismissed	on	motions	prior	to	trial,	and	in	others	PPG	was	released	as	part	of settlements	by	PC.	PPG	was	found	not	responsible	for	PC-related	claims	at	trial	in two	cases.	In	January	2000,	one	jury	found	PPG,	for	the	first	time,	partly responsible	for	injuries	to	five	plaintiffs	alleged	to	be	caused	by	PC	products.	The plaintiffs	holding	the	judgment	on	that	verdict	moved	to	lift	the	injunction	as applied	to	their	claims.	Before	the	hearing	on	that	motion,	PPG	entered	into	a settlement	with	those	claimants	in	the	second	quarter	of	2010	to	avoid	the	costs and	risks	associated	with	the	possible	lifting	of	the	stay	and	appeal	of	the	adverse 2000	verdict.	The	settlement	resolved	both	the	motion	to	lift	the	injunction	and	the judgment	against	PPG.	The	cost	of	this	settlement	was	not	significant	to	PPG's results	of	operations	for	the	second	quarter	of	2010	and	was	fully	offset	by	prior insurance	recoveries.	Although	PPG	has	successfully	defended	asbestos	claims brought	against	it	in	the	past,	in	view	of	the	number	of	claims,	and	the	significant verdicts	that	other	companies	have	experienced	in	asbestos	litigation,	the	result	of any	future	litigation	of	such	claims	is	inherently	unpredictable.

As	of	December	31,	2012	and	2011,	PPG	had	reserves	for	environmental contingencies	totaling	$332	million	and	$226	million,	respectively,	of	which	$101 million	and	$59	million,	respectively,	were	classified	as	current	liabilities.	The reserve	at	December	31,	2012	included	$221	million	for	environmental contingencies	associated	with	PPG's	former	chromium	manufacturing	plant	in Jersey	City,	N.J.	("New	Jersey	Chrome"),	$80	million	for	other	environmental contingencies,	including	National	Priority	List	sites	and	legacy	glass	and	chemical manufacturing	sites,	and	$31	million	for	environmental	contingencies	associated with	the	Calcasieu	River	estuary	located	near	the	Lake	Charles,	La.	chlor-alkali plant	and	two	operating	plant	sites	in	PPG's	former	commodity	chemicals business.	The	reserve	at	December	31,	2011	included	$129	million	for environmental	contingencies	associated	with	the	former	chromium	manufacturing plant	in	Jersey	City,	$63

million	for	other	environmental	contingencies,	including	National	Priority	List sites	and	legacy	glass	and	chemical	manufacturing	sites,	and	$34	million	for environmental	contingencies	associated	with	the	Calcasieu	River	Estuary	and	two operating	plant	sites	in	PPG's	former	commodity	chemicals	business.	Pretax charges	against	income	for	environmental	remediation	costs	in	2012,	2011	and 2010	totaled	$167	million,	$16	million	and	$21	million,	respectively,	and	are included	in	"Other	charges"	in	the	accompanying	consolidated	statement	of income.	Cash	outlays	related	to	such	environmental	remediation	aggregated	$66 million,	$59	million,	and	$34	million	in	2012,	2011	and	2010,	respectively.	The impact	of	foreign	currency	increased	the	liability	by	$2	million	in	2012	and decreased	the	liability	by	$3	million	in	2011.	As	a	result	of	the	allocation	of	the purchase	price	of	acquisitions	to	assets	acquired	and	liabilities	assumed,	the liability	for	environmental	contingencies	was	increased	by	$3	million	during	2012.

The	Company	continues	to	analyze,	assess	and	remediate	the	environmental issues	associated	with	New	Jersey	Chrome.	In	connection	with	the	preparation	of	a final	draft	soil	remedial	action	work	plan	and	cost	estimate	that	was	originally required	to	be	submitted	to	the	NJDEP	in	May	2012,	which	has	been	delayed while	PPG	is	working	with	NJDEP	and	the	City	of	Jersey	City	to	address	issues related	to	PPG's	proposed	approach	to	obtaining	use	limitations	for	the	properties that	will	be	remediated,	the	Company	compiled	updated	information	about	the sites	that	was	used	to	develop	a	new	estimate	of	the	cost	to	remediate	these	sites which	resulted	in	a	charge	against	earnings	of	$145	million	in	the	first	quarter	of 2012.	A	pretax	charge	of	$165	million	for	the	estimated	costs	of	remediating	these sites	was	recorded	in	the	third	quarter	of	2006.	These	charges	for	estimated environmental	remediation	costs	in	2006	and	2012	were	significantly	higher	than PPG's	historical	range.	Excluding	2006	and	2012,	pre-tax	charges	against	income for	environmental	remediation	have	ranged	between	$10	million	and	$35	million per	year	for	the	past	16	years.	Charges	in	2013	are	expected	to	again	be	within	this historical	range.

Management	expects	cash	outlays	for	environmental	remediation	costs	to	be approximately	$100	million	annually	through	2015	and	to	range	from	$10	million to	$30	million	annually	in	2016	and	2017.	It	is	possible	that	technological, regulatory	and	enforcement	developments,	the	results	of	environmental	studies	and other	factors	could	alter	the	Company's	expectations	with	respect	to	future	charges against	income	and	future	cash	outlays.	Specifically,	the	level	of	expected	future remediation	costs	and	cash	outlays	is	highly	dependent	upon	activity	related	to New	Jersey	Chrome	as	discussed	below.

# Remediation:	New	Jersey	Chrome

Since	1990,	PPG	has	remediated	47	of	61	residential	and	nonresidential	sites under	the	1990	Administrative	Consent	Order	("ACO")	with	the	New	Jersey Department	of	Environmental	Protection	("NJDEP").	The	most	significant	of	the 14	remaining	sites	is	the	former	chromium	manufacturing	location	in	Jersey	City, New	Jersey.	The	principal	contaminant	of

concern	is	hexavalent	chromium.	The	Company	submitted	a	feasibility	study	work plan	to	the	NJDEP	in	October	2006	that	included	a	review	of	the	available remediation	technology	alternatives	for	the	former	chromium	manufacturing location.	As	a	result	of	the	extensive	analysis	undertaken	in	connection	with	the preparation	and	submission	of	that	feasibility	study	work	plan,	the	Company recorded	a	pretax	charge	of	$165	million	in	the	third	quarter	of	2006.	This	charge included	estimated	costs	for	remediation	at	the	14	remaining	ACO	sites,	including the	former	manufacturing	site,	and	for	the	resolution	of	litigation	filed	by	NJDEP in	May	2005	as	discussed	below.	The	principal	estimated	cost	elements	of	the	third quarter	2006	charge	were	based	on	competitively	derived	or	readily	available remediation	industry	cost	data.	The	major	cost	components	of	this	charge	were	(i) transportation	and	disposal	of	excavated	soil	and	in	place	soil	treatment	and	(ii) construction	services	(related	to	soil	excavation,	groundwater	management	and site	security).

In	May	2005,	the	NJDEP	filed	a	complaint	against	PPG	and	two	other	former chromium	producers	seeking	to	hold	the	parties	responsible	for	a	further	53	sites where	the	source	of	chromium	contamination	is	not	known	and	to	recover	costs incurred	by	the	agency	in	connection	with	its	response	activities	at	certain	of	those sites.	During	the	third	quarter	of	2008,	the	parties	reached	an	agreement	in principle	on	all	claims	relating	to	these	53	sites	(the	"Orphan	Sites	Settlement"). Under	the	terms	of	this	Orphan	Sites	Settlement,	PPG	accepted	responsibility	for remediation	of	6	of	the	53	sites,	one	half	of	the	cost	for	remediating	ten	sites	where chrome	ore	processing	residue	was	used	as	fill	in	connection	with	the	installation or	repair	of	sewer	lines	owned	by	Jersey	City,	reimburse	the	NJDEP	for	a	portion of	past	costs	in	the	amount	of	$5	million	and	be	responsible	for	the	NJDEP's oversight	costs	associated	with	the	sites	for	which	PPG	is	wholly	or	partially responsible.	This	settlement	was	finalized	and	issued	for	public	comment	in	June 2011.	After	the	close	of	the	public	comment	period,	NJDEP	determined	that	no changes	to	the	settlement	were	necessary	and	a	motion	was	filed	with	the	court	to enter	the	settlement	as	a	final	order.	In	September	2011,	the	court	entered	the Orphan	Sites	Settlement	as	a	final	order.	PPG	paid	its	share	of	past	costs	in October	2011.	This	Orphan	Sites	Settlement	did	not	affect	PPG's	responsibilities for	the	14	remaining	unremediated	sites	covered	by	PPG's	ACO.	The	investigation and	remediation	of	the	soils	and	sources	of	contamination	of	the	ten	sewer	sites will	occur	over	an	extended	period	of	time	to	allow	for	investigation	and determination	of	impacts	associated	with	these	sites,	and	coordination	of remediation	with	the	maintenance	and	repair	of	the	sewers	by	Jersey	City.

A	settlement	agreement	among	PPG,	NJDEP	and	Jersey	City	(which	had asserted	claims	against	PPG	for	lost	tax	revenue)	has	been	reached	and memorialized	in	the	form	of	a	Judicial	Consent	Order	(the	"JCO")	that	was	entered by	the	court	on	June	26,	2009.	PPG's	remedial	obligations	under	the	ACO	with NJDEP	have	been	incorporated	into	the	JCO.	Pursuant	to	the	JCO,	a	new	process has	been	established	for	the	review	of	the	technical	reports	PPG	must	submit	for the	investigation	and	remedy	selection	for	the	14	ACO	sites	and	the	six	sites	for which

PPG	has	accepted	sole	responsibility	under	the	terms	of	the	Orphan	Sites Settlement	("20	PPG	sites").	The	JCO	also	provided	for	the	appointment	of	a court-approved	Site	Administrator	who	is	responsible	for	establishing	a	master schedule	for	the	remediation	of	the	20	PPG	sites.	The	JCO	established	a	goal, based	on	currently	applicable	remedial	provisions,	to	remediate	soils	and	sources of	contamination	at	the	20	PPG	sites	as	expeditiously	as	possible	for	completion	at the	end	of	2014	in	accordance	with	the	master	schedule	developed	by	the	Site Administrator.	On	July	6,	2009,	former	United	States	Environmental	Protection Agency	Deputy	Administrator,	Michael	McCabe,	was	appointed	as	Site Administrator	under	the	JCO.	The	JCO	also	resolved	the	claims	for	reparations	for lost	tax	revenues	by	Jersey	City	with	the	payment	of	$1.5	million	over	a	five	year time	period.	The	JCO	did	not	otherwise	affect	PPG's	responsibility	for	the remediation	of	the	14	ACO	sites.	PPG's	estimated	costs	under	the	JCO,	including amounts	related	to	site	administration,	are	included	in	the	December	31,	2012 reserve	for	New	Jersey	Chrome	environmental	remediation	matters.

In	the	first	quarter	of	2012,	an	additional	site	was	identified	for	which	PPG has	assumed	responsibility	for	hexavalent	chromium	contamination.	PPG	learned that	chromate	waste	from	its	former	plant	site	was	transported	and	used	as construction	fill	at	this	location.	PPG	is	working	cooperatively	with	the	property owner	to	support	his	cleanup	of	the	site.	A	preliminary	estimate	of	the	cost	to investigate	and	remediate	hexavalent	chromium	contamination	has	been	included in	the	accrued	liability	balance	at	December	31,	2012.

Since	October	2006,	activities	contained	in	the	feasibility	study	work	plan have	been	undertaken	and	remedial	alternatives	were	assessed	which	included,	but were	not	limited	to,	soil	excavation	and	offsite	disposal	in	a	licensed	disposal facility,	in	situ	chemical	stabilization	of	soil	and	groundwater,	and	in	situ solidification	of	soils.	The	feasibility	study	work	plan	for	the	former	chromium manufacturing	site	previously	submitted	in	2006	was	incorporated	into	a	remedial action	work	plan.	PPG	submitted	a	preliminary	draft	soil	remedial	action	work plan	for	the	former	chromium	manufacturing	and	adjacent	sites	to	NJDEP	in	June 2011.	PPG	received	commentary	from	the	NJDEP	in	connection	with	their	review. The	work	plans	for	interim	remedial	measures	at	the	chromium	manufacturing site,	which	consisted	of	the	removal	and	off-site	disposal	of	approximately	70,000 tons	of	chromium	impacted	soil	and	concrete	foundations,	was	approved	by NJDEP	and	the	associated	work	was	completed	in	the	third	quarter	2011.	The submission	of	a	final	draft	soil	remedial	action	work	plan	for	the	former	chromium manufacturing	and	adjacent	sites	was	initially	required	to	be	submitted	to	NJDEP in	May	2012.	However,	this	submission	has	been	delayed	while	PPG	is	working with	NJDEP	and	Jersey	City	to	address	issues	related	to	PPG's	proposed	approach to	obtaining	use	limitations	for	the	properties	that	will	be	remediated.	Property owners	must	accept	use	limitations	before	NJDEP	may	approve	a	remedial	action work	plan.	In	the	meantime,	NJDEP	has	completed	a	review	of	the	technical aspects	of	PPG's	proposed	soil	remedial	action	work	plan	and

has	expressed	their	support	of	the	remediation	activities	identified	therein	which PPG	continues	to	perform	while	the	issues	related	to	use	limitations	for	these properties	are	being	addressed.	PPG	has	submitted	a	final	draft	remedial	action work	plan	for	one	other	remaining	site	under	the	ACO	which	has	been conditionally	approved	by	the	NJDEP.	Remedial	activities	are	expected	to	begin	at this	site	in	early	2013.	In	addition,	during	2012	PPG	completed	remedial	activities at	three	sites	for	which	PPG	has	accepted	sole	responsibility	under	the	terms	of	the Orphan	Sites	Settlement	and	has	received	"No	Further	Action"	determination	from the	NJDEP	for	these	sites.	Soil	investigation	activities	for	all	remaining	sites covered	by	the	ACO	are	also	expected	to	be	completed	in	2013,	and	PPG	believes the	results	of	the	work	performed	in	connection	with	the	preparation	of	the	plan,	as described	above	provides	the	Company	with	relevant	information	concerning remediation	alternatives	and	estimated	costs	at	these	sites.

As	work	continued	at	all	of	the	New	Jersey	Chrome	sites	and	the	final	draft soil	remedial	action	work	plan	for	the	former	chromium	manufacturing	and adjacent	sites	was	being	developed,	the	estimated	remediation	costs	were	refined for	all	New	Jersey	Chrome	sites	and	the	updated	information	was	used	to	compile a	new	estimate	of	the	remediation	costs,	which	resulted	in	a	charge	of	$145	million in	the	first	quarter	of	2012.	The	liability	for	remediation	of	the	New	Jersey Chrome	sites	totals	$221	million	at	December	31,	2012.	The	major	cost components	of	this	liability	continue	to	be	related	to	transportation	and	disposal	of impacted	soil	as	well	as	construction	services.	These	components	account	for approximately	55%	and	30%	of	the	accrued	amount,	respectively,	as	of	December 31,	2012.	The	accrued	liability	also	includes	estimated	costs	for	water	treatment, engineering	and	project	management.	The	final	draft	soil	remedial	action	work plan	is	based	upon	plans	for	PPG	to	obtain	use	limitations	for	the	properties	that will	be	remediated	by	various	means	including	the	purchase	of	certain	sites.	Based on	our	recently	completed	and	on	going	investigations,	approximately	one	million tons	of	soil	may	be	potentially	impacted	for	all	New	Jersey	Chrome	sites.	The most	significant	assumptions	underlying	the	current	cost	estimate	are	those	related to	the	extent	and	concentration	of	chromium	impacts	in	the	soil,	as	these	determine the	quantity	of	soil	that	must	be	treated	in	place,	the	quantity	that	will	have	to	be excavated	and	transported	for	offsite	disposal,	and	the	nature	of	disposal	required. The	charges	taken	for	the	estimated	cost	to	remediate	the	New	Jersey	Chrome	sites are	exclusive	of	any	third	party	indemnification,	as	the	recovery	of	any	such amounts	is	uncertain.	Information	will	continue	to	be	generated	from	the	ongoing groundwater	remedial	investigation	activities	related	to	New	Jersey	Chrome	and will	be	incorporated	into	a	final	draft	remedial	action	work	plan	for	groundwater expected	to	be	submitted	to	NJDEP	in	the	second	quarter	of	2014.

As	described	above,	there	are	multiple	future	events	yet	to	occur,	including further	remedy	selection	and	design,	remedy	implementation	and	execution,	the obtaining	of	required	approvals	from	applicable	governmental	agencies	or community	organizations	and	the	final	draft	remedial	action	work	plan	for

groundwater	to	be	submitted	to	NJDEP	in	2014.	Considerable	uncertainty	exists regarding	the	timing	of	these	future	events	for	the	New	Jersey	Chrome	sites.	Final resolution	of	these	events	is	expected	to	occur	over	the	next	two	to	three	years.	As these	events	occur	and	to	the	extent	that	the	cost	estimates	of	the	environmental remediation	remedies	change,	the	existing	reserve	for	this	environmental remediation	will	be	adjusted.

# Remediation:	Calcasieu	River	Estuary

In	Lake	Charles,	La.	the	U.S.	Environmental	Protection	Agency	("USEPA") completed	an	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	have	completed	a	feasibility	study	under	the	authority	of	the	Louisiana Department	of	Environmental	Quality	("LDEQ").	PPG's	exposure	with	respect	to the	Calcasieu	Estuary	is	focused	on	the	lower	few	miles	of	Bayou	d'Inde,	a	small tributary	to	the	Calcasieu	Estuary	near	PPG's	Lake	Charles	facility,	and	about	150 to	200	acres	of	adjacent	marshes.	The	Company	and	three	other	potentially responsible	parties	submitted	a	draft	remediation	feasibility	study	report	to	the LDEQ	in	October	2006.	The	proposed	remedial	alternatives	include	sediment dredging,	sediment	capping,	and	biomonitoring	of	fish	and	shellfish.	Principal contaminants	of	concern	which	may	require	remediation	include	various	metals, dioxins	and	furans,	and	polychlorinated	biphenyls.	In	response	to	agency comments	on	the	draft	study,	the	companies	conducted	additional	investigations and	submitted	a	revised	feasibility	report	to	the	agencies	in	the	third	quarter	of 2008.	Government	officials	have	indicated	that	a	U.S.	Army	Corps	of	Engineers' study	has	concluded	that	the	proposed	remedy	will	not	adversely	affect	drainage	in communities	adjacent	to	Bayou	d'Inde.	In	response	to	the	revised	feasibility	study, LDEQ	issued	a	draft	decision	document	for	the	Bayou	d'Inde	area	in	February 2010.	The	decision	document	includes	LDEQ's	selection	of	remedial	alternatives for	the	Bayou	d'Inde	area	and	is	in	accordance	with	those	recommended	in	the revised	feasibility	study.	LDEQ	held	a	public	hearing	on	March	23,	2010	and subsequently	issued	its	final	decision	document	in	March	2011.	As	in	its	draft document,	LDEQ's	selection	of	remedial	approaches	is	in	accordance	with	those proposed	in	the	feasibility	study.

In	June	2011,	the	agency	proposed	entering	into	a	new	Cooperative Agreement	with	the	four	companies	to	implement	the	remedy	for	Bayou	d'Inde based	on	the	final	decision	document,	and	transmitted	a	draft	document	for	the companies'	consideration.	At	the	same	time,	the	companies	initiated	discussions among	themselves	on	allocation	of	costs	associated	with	remedy	implementation. In	October	2011,	one	of	the	three	other	potentially	responsible	parties	that	had participated	in	funding	the	feasibility	study	withdrew	from	further	discussions	with LDEQ	regarding	implementation	of	the	remedy.	The	withdrawal	of	this	party	did not	have	an	effect	on	the	cost	to	PPG	to	complete	this	remedy	implementation.	On November	5,	2012,	PPG	and	the	two	remaining	parties	submitted	a	revised

Cooperative	Agreement	to	LDEQ	and	are	awaiting	LDEQ's	response.	The estimated	costs	associated	with	PPG's	responsibility	with	respect	to	this Cooperative	Agreement	are	consistent	with	the	amounts	currently	reserved	by	PPG for	this	project.

Multiple	future	events,	such	as	remedy	design	and	remedy	implementation involving	agency	action	or	approvals	related	to	the	Calcasieu	River	Estuary	will be	required	and	considerable	uncertainty	exists	regarding	the	timing	of	these future	events.	Final	resolution	of	these	events	is	expected	to	occur	over	an extended	period	of	time.	However,	LDEQ	approved	the	remedial	design	submittal in	late	2012,	and	the	remedy	implementation	could	occur	during	2013	to	2015, with	some	period	of	long-term	monitoring	for	remedy	effectiveness	to	follow.

# Remediation:	Reasonably	Possible	Matters

In	addition	to	the	amounts	currently	reserved	for	environmental	remediation, the	Company	may	be	subject	to	loss	contingencies	related	to	environmental matters	estimated	to	be	as	much	as	$100	million	to	$275	million.	This	range	is	less than	the	comparable	amount	reported	at	the	end	of	2011	as	a	result	of	the additional	environmental	remediation	charge	recorded	in	the	first	quarter	2012. 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	including	each	of	the following;	i)	additional	costs	at	New	Jersey	Chrome,	which	represents	about	one third	of	this	potential	range,	ii)	a	number	of	other	sites,	including	legacy	glass	and chemical	manufacturing	sites	and	iii)	the	Calcasieu	River	Estuary	and	two operating	plant	sites	in	the	Company's	former	commodity	chemicals	business.	The loss	contingencies	related	to	these	sites	include	significant	unresolved	issues	such as	the	nature	and	extent	of	contamination	at	these	sites	and	the	methods	that	may have	to	be	employed	to	remediate	them.

The	status	of	the	remediation	activity	at	New	Jersey	Chrome	and	at	the Calcasieu	River	Estuary	and	the	factors	that	could	result	in	the	need	for	additional environmental	remediation	reserves	at	those	sites	are	described	above.	Certain remedial	actions	are	occurring	at	a	legacy	chemical	site	in	Barberton,	Ohio	and	the two	operating	plant	sites	in	the	former	commodity	chemicals	business.	The operating	plant	sites	are	in	Lake	Charles,	Louisiana	and	Natrium,	West	Virginia. At	Barberton,	PPG	has	completed	a	Facility	Investigation	and	Corrective	Measure Study	("CMS")	under	USEPA's	Resource	Conservation	and	Recycling	Act ("RCRA")	Corrective	Action	Program.	PPG	has	been	implementing	the remediation	alternatives	recommended	in	the	CMS	using	a	performance-based approach	with	USEPA	Region	V	oversight.	However,	USEPA	Region	V transferred	its	oversight	authority	to	the	Ohio	Environmental	Protection	Agency ("OEPA")	in	2010.	The	Barberton	Corrective	Action	Permit	was	issued	by	OEPA on	September	24,	2010.	As	part	of	this	permit,	PPG	is	responsible	for	filing engineering	remedies	for	various	issues	at	this	site.	Several	of	these	remedies	have not	yet	been	filed	with	the	OEPA.	Similarly,	the	Company

has	completed	a	Facility	Investigation	and	CMS	for	the	Lake	Charles	facility under	the	oversight	of	the	LDEQ.	The	LDEQ	has	accepted	the	proposed	remedial alternatives.	PPG	received	notice	of	LDEQ	issuance	of	the	final	Hazardous	Waste Post-Closure/HSWA	Permit	on	June	28,	2010.	The	Permit	was	issued	in	final form	on	September	23,	2010.	Planning	for	or	implementation	of	these	proposed alternatives	is	in	progress.	At	Natrium,	a	facility	investigation	has	been	completed and	initial	interim	remedial	measures	have	been	implemented	to	mitigate	soil impacts.	There	is	additional	investigation	of	groundwater	contamination	ongoing, including	Ohio	River	sediment	and	sediment	pore-water	sampling.	If	it	is	found that	contamination	from	the	plant	site	is	contaminating	the	river,	this	may	indicate the	need	for	further	onsite	remedial	actions	to	address	specific	areas	of	the	facility. Installation	of	a	groundwater	treatment	system	has	been	completed.	PPG	has	been addressing	impacts	from	a	legacy	plate	glass	manufacturing	site	in	Kokomo, Indiana	under	the	Voluntary	Remediation	Program	of	the	Indiana	Department	of Environmental	Management.	PPG	is	currently	performing	additional	investigation activities.

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.

# Separation	and	Merger	of	the	Commodity	Chemicals	Business

# Other	Matters

PPG	is	a	defendant	in	a	matter	in	the	California	State	Court	in	San	Francisco in	which	the	City	of	Modesto	and	its	Redevelopment	Authority	claim	that	PPG and	other	defendants	manufactured	a	defective	product,	the	dry	cleaning	solvent perchloroethylene	("PCE"),	and	failed	to	provide	adequate	warnings	regarding	the environmental	risks	associated	with	the	use	of	PCE.	The	plaintiffs	claimed	the defendants	are	responsible	for	remediation	of	soil	and	groundwater	contamination at	numerous	dry	cleaner	sites	in	Modesto,	California.	In	2006,	a	Phase	1	trial	was conducted	as	to	four	sites.	The	jury	returned	a	verdict	in	the	amount	of	$3.1 million	against	PPG,	The	Dow	Chemical	Company,	Vulcan,	Oxy,	and	R.R.	Street. The	verdict	was	not	apportioned.

Subsequent	to	the	Phase	1	verdict,	Vulcan	and	Oxy	settled.	In	2008,	trial commenced	on	18	Phase	2	Sites.	Prior	to	submission	of	the	case	to	the	jury,	the Court	granted	motions	that	limited	PPG's	potential	liability	to	one	of	the	18	sites. The	damages	sought	at	this	one	site	totaled	$27	million.	A	jury	verdict	in	the amount	of	$18	million	was	returned	against	PPG	and	The	Dow	Chemical Company	on	May	18,	2009.	The	verdict	was	not	apportioned.	The	jury	was	not able	to	reach	a	verdict	on	the	statute	of	limitations	issue	on	the	site	in	question. However,	on	August	24,	2009,	the	trial	court	issued	an	opinion	finding	that	the City's	claims	were	barred	by	the	statute	of	limitations.	The	effect	of	the	ruling	was to	nullify	the	jury's	Phase	2	damage	award.	In	October	2009,	the	trial	court	held	a non-jury	trial	of	the	Redevelopment	Authority's	damage	claims	under	the "Polanco	Act".	On	November	11,	2011,	the	court	entered	a	final	judgment consistent	with	all	of	the	above	results	finding	that	prior	settlements	offset	the	$3.1 million	verdict	against	PPG	and	others.	Requests	for	costs	and	fees	based	on whether	the	City	or	defendants	were	"prevailing	parties"	have	been	resolved	in PPG's	favor.	On	September	24,	2012,	the	Court	ordered	the	City	to	pay	PPG	$0.3 million.	Appeals	are	expected.	On	January	28,	2013,	the	responsibility	for	this pending	legal	matter	was	transferred	as	part	of	separation	of	its	commodity chemicals	business	and	the	merger	of	the	subsidiary	holding	the	PPG	commodity chemicals	business	with	a	subsidiary	of	Georgia	Gulf.	See	Note	25,	"Separation and	Merger	Transaction"	for	financial	information	relating	to	this	transaction.

# 16.	Shareholders'	Equity

A	class	of	10	million	shares	of	preferred	stock,	without	par	value,	is authorized	but	unissued.	Common	stock	has	a	par	value	of	$1.66		2/3	per	share; 600	million	shares	are	authorized.

The	following	table	summarizes	the	shares	outstanding	for	the	three	years ended	December	31,	2012:

|  | Common<br>Stock | Treasury<br>Stock | Shares<br>Outstanding |
| :--- | :--- | :--- | :--- |
| Balance,\tJan.\t1,\t2010 | 290,573,068 | (124,905,409) | 165,667,659 |
| Purchases | — | (8,124,621) | (8,124,621) |
| Issuances | — | 2,838,777 | 2,838,777 |
| Balance,\tDec.\t31,\t2010 | 290,573,068 | (130,191,253) | 160,381,815 |
| Purchases | — | (10,236,694) | (10,236,694) |
| Issuances | — | 1,743,659 | 1,743,659 |
| Balance,\tDec.\t31,\t2011 | 290,573,068 | (138,684,288) | 151,888,780 |
| Purchases | — | (1,000,000) | (1,000,000) |
| Issuances | — | 2,677,517 | 2,677,517 |
| Balance,\tDec.\t31,\t2012 | 290,573,068 | (137,006,771) | 153,566,297 |

# 17.	Accumulated	Other	Comprehensive	Loss

| (Millions) | Unrealized<br>Currency<br>Translation<br>Adjustments | and<br>Other<br>Post<br>retire-<br>ment<br>Benefit<br>Adjust-ments | Unrealized<br>Gain	(Loss)<br>on<br>Marketable<br>Securities | Unrealized<br>Gain	(Loss)<br>on<br>Derivatives | Accum-<br>ulated<br>Other<br>Comp-<br>rehensive<br>(Loss)<br>Income |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance, |  |  |  |  |  |
| January\t1, |  |  |  |  |  |
| 2010 | $66 | $(1,292) | $(1) | $(34) | $(1,261) |
| Net\tchange | (13) | (136) | 1 | (2) | (150) |
| Balance,\nDecember\t31,\t2010 | $53 | $(1,428) | $— | $(36) | $(1,411) |
| Net\tchange | (188) | (169) | — | (32) | (389) |
| Balance,\nDecember\t31,\t2011 | $(135) | $(1,597) | $— | $(68) | $(1,800) |
| Net\tchange | 141 | — | — | (7) | 134 |
| Balance,\nDecember\t31,\t2012 | $6 | $(1,597) | $— | $(75) | $(1,666) |

With	the	exception	of	unrealized	currency	translation	adjustments,	all	other components	of	accumulated	other	comprehensive	loss	are	reported	net	of	tax.

Unrealized	currency	translation	adjustments	related	to	translation	of	foreign denominated	balance	sheets	are	not	presented	net	of	tax	given	that	no	deferred U.S.	income	taxes	have	been	provided	on	undistributed	earnings	of	non-U.S. subsidiaries	because	they	are	deemed	to	be	reinvested	for	an	indefinite	period	of time.

The	tax	(cost)	benefit	related	to	unrealized	currency	translation	adjustments other	than	translation	of	foreign	denominated	balance	sheets,	for	the	years	ended December	31,	2012,	2011	and	2010	was	$(1)	million,	$(7)	million	and	$8	million, respectively.

The	tax	(cost)	benefit	related	to	the	adjustment	for	pension	and	other postretirement	benefits	for	the	years	ended

December	31,	2012,	2011	and	2010	was	$(30)	million,	$98	million	and	$65 million,	respectively.	The	cumulative	tax	benefit	related	to	the	adjustment	for pension	and	other	postretirement	benefits	at	December	31,	2012	and	2011	was approximately	$960	million	and	$990	million,	respectively.	There	was	no	tax (cost)	benefit	related	to	the	change	in	the	unrealized	gain	(loss)	on	marketable securities	for	the	year	ended	December	31,	2012.	The	tax	(cost)	benefit	related	to the	change	in	the	unrealized	gain	(loss)	on	marketable	securities	for	the	years ended	December	31,	2011	and	2010	was	$(0.2)	million	and	$0.6	million, respectively.	The	tax	benefit	related	to	the	change	in	the	unrealized	gain	(loss)	on derivatives	for	the	years	ended	December	31,	2012,	2011	and	2010	was	$4	million, $19	million	and	$1	million,	respectively.

# 18.	Employee	Savings	Plan

PPG's	Employee	Savings	Plan	("Savings	Plan")	covers	substantially	all	U.S. employees.	The	Company	makes	matching	contributions	to	the	Savings	Plan,	at management's	discretion,	based	upon	participants'	savings,	subject	to	certain limitations.	For	most	participants	not	covered	by	a	collective	bargaining agreement,	Company-matching	contributions	are	established	each	year	at	the discretion	of	the	Company	and	are	applied	to	participant	savings	up	to	a	maximum of	6%	of	eligible	participant	compensation.	For	those	participants	whose employment	is	covered	by	a	collective	bargaining	agreement,	the	level	of Company-matching	contribution,	if	any,	is	determined	by	the	relevant	collective bargaining	agreement.

The	Company-matching	contribution	was	suspended	from	March	2009 through	June	2010	as	a	cost	savings	measure	in	recognition	of	the	adverse	impact of	the	global	recession.	Effective	July	1,	2010,	the	Company	match	was	reinstated at	50%	on	the	first	6%	of	compensation	contributed	for	most	employees	eligible for	the	Company-matching	contribution	feature.	This	included	the	union represented	employees	in	accordance	with	their	collective	bargaining	agreements. On	January	1,	2011,	the	Company	match	was	increased	to	75%	on	the	first	6%	of compensation	contributed	by	these	eligible	employees	and	this	level	was maintained	throughout	2012.

Compensation	expense	and	cash	contributions	related	to	the	Company	match of	participant	contributions	to	the	Savings	Plan	for	2012,	2011	and	2010	totaled $28	million,	$26	million	and	$9	million,	respectively.	A	portion	of	the	Savings Plan	qualifies	under	the	Internal	Revenue	Code	as	an	Employee	Stock	Ownership Plan.	As	a	result,	the	dividends	on	PPG	shares	held	by	that	portion	of	the	Savings Plan	totaling	$18	million,	$20	million	and	$24	million	for	2012,	2011	and	2010, respectively,	were	tax	deductible	to	the	Company	for	U.S.	Federal	tax	purposes.

# 19.	Other	Earnings

| (Millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Royalty\tincome | $51 | $55 | $58 |
| Share\tof\tnet\tearnings\tof\tequity\taffiliates\t(See\tNote\t5) | 11 | 37 | 45 |
| Gain\ton\tsale\tof\tassets | 4 | 12 | 8 |
| Other | 83 | 73 | 69 |
| Total | $149 | $177 | $180 |

# 20.	Stock-Based	Compensation

The	Company's	stock-based	compensation	includes	stock	options,	restricted stock	units	("RSUs")	and	grants	of	contingent	shares	that	are	earned	based	on achieving	targeted	levels	of	total	shareholder	return.	All	current	grants	of	stock options,	RSUs	and	contingent	shares	are	made	under	the	PPG	Industries,	Inc. Amended	and	Restated	Omnibus	Incentive	Plan	("PPG	Amended	Omnibus Plan"),	which	was	amended	and	restated	effective	April	21,	2011.	Shares	available for	future	grants	under	the	PPG	Amended	Omnibus	Plan	were	8.5	million	as	of December	31,	2012.

Total	stock-based	compensation	cost	was	$73	million,	$36	million	and	$52 million	in	2012,	2011	and	2010,	respectively.	Stock-based	compensation	expense increased	year	over	year	due	to	the	increase	in	the	expected	payout	percentage	of the	2010	performance-based	RSU	grants	and	PPG's	total	shareholder	return performance	in	2012	in	comparison	with	the	Standard	&	Poors	(S&P)	500	index, which	has	increased	the	expense	related	to	outstanding	grants	of	contingent	shares. The	total	income	tax	benefit	recognized	in	the	accompanying	consolidated statement	of	income	related	to	the	stock-based	compensation	was	$25	million,	$13 million	and	$18	million	in	2012,	2011	and	2010,	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	Amended	Omnibus	Plan.	Under	the	PPG	Amended	Omnibus	Plan	and	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	originally	granted	prior	to	January	1,	2003	that	allows	an	optionee	to exercise	options	and	satisfy	the	option	cost	by	certifying	ownership	of	mature shares	of	PPG	common	stock	with	a	market	value	equal	to	the	option	cost.

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	accounting	guidance	on	the	use	of the	simplified	method	for	determining	the	expected	term	of	an	employee	share option.	This	method	is	used	as	the	vesting	term	of	stock	options	was	changed	to three	years	in	2004	and,	as	a	result,	the	historical	exercise	data	does	not	provide	a reasonable	basis	upon	which	to	estimate	the	expected	life	of	options.	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	the	options.

The	following	weighted	average	assumptions	were	used	to	calculate	the	fair values	of	stock	option	grants	in	each	year:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Risk\tfree\tinterest\trate | 1.3% | 2.9% | 2.8% |
| Expected\tlife\tof\toption\tin\tyears | 6.5 | 6.4 | 5.9 |
| Expected\tdividend\tyield | 3.3% | 3.3% | 3.4% |
| Expected\tvolatility | 29.4% | 28.0% | 28.5% |

A	summary	of	stock	options	outstanding	and	exercisable	and	activity	for	the year	ended	December	31,	2012	is	presented	below:

|  | Number	of<br>Shares | Weighted<br>Average<br>Exercise<br>Price | Average<br>Remaining<br>Contractual<br>Life<br>(in	years) | Intrinsic<br>Value<br>(in	millions) |
| :--- | :--- | :--- | :--- | :--- |
| Outstanding,\nJanuary\t1,\t2012 | 4,907,885 | $60.52 | 5.6 | $116 |
| Granted | 792,957 | $90.28 |  |  |
| Exercised | (2,251,975) | $54.10 |  |  |
| Forfeited/Expired | (40,168) | $88.94 |  |  |
| Outstanding,\nDecember\t31,\t2012 | 3,408,699 | $71.34 | 6.6 | $218 |
| Vested\tor\texpected\tto |  |  |  |  |
| vest, |  |  |  |  |
| December\t31,\t2012 | 3,341,323 | $71.05 | 6.6 | $215 |
| Exercisable,\nDecember\t31,\t2012 | 1,271,875 | $57.78 | 4.0 | $99 |

At	December	31,	2012,	unrecognized	compensation	cost	related	to outstanding	stock	options	that	have	not	yet	vested	totaled	$7	million.	This	cost	is expected	to	be	recognized	as	expense	over	a	weighted	average	period	of	1.5	years.

The	following	table	presents	stock	option	activity	for	the	years	ended December	31,	2012,	2011	and	2010:

| (Millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Total\tintrinsic\tvalue\tof\tstock\toptions\texercised | $110 | $40 | $37 |
| Cash\treceived\tfrom\tstock\toption\texercises | 122 | 81 | 146 |
| Income\ttax\tbenefit\tfrom\tthe\texercise\tof\tstock\noptions | 35 | 9 | 9 |
| Total\tfair\tvalue\tof\tstock\toptions\tvested | 6 | 10 | 13 |

# Restricted	Stock	Units	("RSUs")

Long-term	incentive	value	is	delivered	to	selected	key	management employees	by	granting	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	PPG	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	Company's	discretion	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	calendar	year-end	periods	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	Company's	discretion	at	the end	of	the	three-year	performance	period	if	PPG	meets	the	performance	targets. The	amount	paid	for	performance-based	awards	may	range	from	0%	to	180%	of the	original	grant,	based	upon	the	frequency	with	which	the	annual	earnings	per share	growth	and	cash	flow	return	on	capital	performance	targets	are	met	over	the three	calendar	year	periods	comprising	the	vesting	period.	For	the	purposes	of expense	recognition,	PPG	has	assumed	that	performance-based	RSUs	granted	in 2010	will	vest	at	the	180%	level	and	those	granted	in	2011	and	2012	will	vest	at the	100%	level.	As	of	December	31,	2012,	four	of	the	four	possible	performance targets	had	been	met	for	the	2011	grant	and	two	of	the	two	possible	performance targets	had	been	met	for	the	2012	grant.

The	following	table	summarizes	RSU	activity	for	the	year	ended December	31,	2012:

|  | Number	of<br>Shares | Weighted<br>Average<br>Fair	Value | Intrinsic<br>Value<br>(in	millions) |
| :--- | :--- | :--- | :--- |
| Outstanding,\tJanuary\t1,\t2012 | 1,005,757 | $46.98 | $84 |
| Granted | 248,732 | $83.48 |  |
| Additional\tshares\tvested | 208,228 | $55.30 |  |
| Released\tfrom\trestrictions | (465,879) | $28.37 |  |
| Forfeited | (42,902) | $53.68 |  |
| Outstanding,\tDecember\t31,\t2012 | 953,936 | $67.11 | $129 |
| Vested\tor\texpected\tto\tvest,\nDecember\t31,\t2012 | 945,429 | $66.97 | $128 |

There	was	$11	million	of	total	unrecognized	compensation	cost	related	to unvested	RSUs	outstanding	as	of	December	31,	2012.	This	cost	is	expected	to	be recognized	as	expense	over	a	weighted	average	period	of	1.5	years.

# Contingent	Share	Grants

The	Company	also	provides	grants	of	contingent	shares	to	selected	key executives	that	may	be	earned	based	on	PPG	total	shareholder	return	("TSR")	over the	three-year	period	following	the	date	of	grant.	Contingent	share	grants	(referred to	as	"TSR	awards")	are	made	annually	and	are	paid	out	at	the	end	of	each	three- year	period	based	on	the	Company's	performance.	Performance	is	measured	by determining	the	percentile	rank	of	the	total	shareholder	return	of	PPG	common stock	in	relation	to	the	total	shareholder	return	of	the	S&P	500	for	the	three-year period	following	the	date	of	grant.	This	comparison	group	represents	the	entire S&P	500	Index	as	it	existed	at	the	beginning	of	the	performance	period.	The payment	of	awards	following	the	three-year	award	period	will	be	based	on performance	achieved	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	for	the	2010-2012, 2011-2013,	and	2012-2014	periods	earn	dividend	equivalents	for	the	award period,	which	will	be	paid	to	participants	with	the	award	payout	at	the	end	of	the period	based	on	the	actual	number	of	contingent	shares	that	are	earned.	Any payments	made	at	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 compensation	expense	is	recognized	over	the	three-year	award	period	based	on	the fair	value	of	the	awards	(giving	consideration	to	the	Company's	percentile	rank	of total	shareholder	return)	remeasured	in	each	reporting	period	until	settlement	of the	awards.

As	of	December	31,	2012,	there	was	$10.2	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	1.4	years.

# 21.	Advertising	Costs

Advertising	costs	are	expensed	in	the	year	incurred	and	totaled	$288	million, $245	million	and	$288	million	in	2012,	2011	and	2010,	respectively.

| (Millions) | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Research\tand\tdevelopment\t–\ttotal | $470 | $445 | $408 |
| Less\tdepreciation\ton\tresearch\tfacilities | 15 | 15 | 14 |
| Research\tand\tdevelopment\t–\tnet | $455 | $430 | $394 |

# 23.	Quarterly	Financial	Information	(unaudited)

# 2012	Quarter	Ended

| amounts) | March	31 | June	30 | Sept.	30 | Dec.	31 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tsales | $3,752 | $3,955 | $3,845 | $3,648 | $15,200 |
| Cost\tof\tSales(1) | 2,229 | 2,352 | 2,288 | 2,200 | 9,069 |
| Net\tincome\t(attributable\nto\tPPG)(2) | 13 | 362 | 339 | 227 | 941 |
| Earnings\tper\tcommon\nshare | 0.08 | 2.37 | 2.21 | 1.47 | 6.13 |
| Earnings\tper\tcommon |  |  |  |  |  |
| share\t–\tassuming |  |  |  |  |  |
| dilution\t(2) | $0.08 | $2.34 | $2.18 | $1.46 | $6.06 |

| amounts) | March	31 | June	30 | Sept.	30 | Dec.	31 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tsales | $3,533 | $3,986 | $3,849 | $3,517 | $14,885 |
| Cost\tof\tSales(1) | 2,127 | 2,417 | 2,353 | 2,184 | 9,081 |
| Net\tincome\t(attributable\nto\tPPG) | 228 | 340 | 311 | 216 | 1,095 |
| Earnings\tper\tcommon\nshare | 1.42 | 2.15 | 1.98 | 1.41 | 6.96 |
| Earnings\tper\tcommon |  |  |  |  |  |
| share\t–\tassuming |  |  |  |  |  |
| dilution | $1.40 | $2.12 | $1.96 | $1.39 | $6.87 |
| (1) | Exclusive\tof\tdepreciation\tand\tamortization. | Exclusive\tof\tdepreciation\tand\tamortization. |  |  |  |
| (2) |  |  |  |  |  |

(1) Exclusive	of	depreciation	and	amortization.

(2) First	quarter	2012	includes	charge	of	 $163	million	or	$1.06	per	diluted	share	related	to restructuring	(See	Note	7,	"Business	Restructuring")	and	charge	of	$99	million	or	$0.64 per	diluted	share	related	to	environmental	remediation	(See	Note	15,	"Commitments	and Contingent	Liabilities").

# 24.	Reportable	Business	Segment	Information

# Segment	Organization	and	Products

PPG	is	a	multinational	manufacturer	with	13	operating	segments	that	are organized	based	on	the	Company's	major	products	lines.	These	operating segments	are	also	the	Company's	reporting	units	for	purposes	of	testing	goodwill for	impairment	(see	Note	1,	"Summary	of	Significant	Accounting	Policies").	The operating	segments	have	been	aggregated	based	on	economic	similarities,	the nature	of	their	products,	production	processes,	end-use	markets	and	methods	of distribution	into	six	reportable	business	segments.

The	Performance	Coatings	reportable	segment	is	comprised	of	the	refinish, aerospace,	architectural	coatings	–	Americas	and	Asia	Pacific	and	protective	and marine	coatings	operating	segments.	This	reportable	segment	primarily	supplies	a variety	of	decorative	and	functional	coatings,	sealants	and	finishes	along	with paint	strippers,	stains	and	related	chemicals,	as	well	as	transparencies	and transparent	armor.

The	Industrial	Coatings	reportable	segment	is	comprised	of	the	automotive OEM,	industrial	coatings	and	packaging	coatings	operating	segments.	This reportable	segment	primarily	supplies	a	variety	of	protective	and	decorative coatings	and	finishes	along	with	adhesives,	sealants,	inks	and	metal	pretreatment products.

The	Architectural	Coatings	–	EMEA	reportable	segment	is	comprised	of	the architectural	coatings	–	EMEA	operating	segment.	This	reportable	segment primarily	supplies	a	variety	of	coatings	under	a	number	of	brands	and	purchased sundries	to	painting	contractors	and	consumers	in	Europe,	the	Middle	East	and Africa.

The	Optical	and	Specialty	Materials	reportable	segment	is	comprised	of	the optical	products	and	silicas	businesses.	The	primary	Optical	and	Specialty Materials	products	are	Transitions®	lenses,	optical	lens	materials	and	high performance	sunlenses;	amorphous	precipitated	silicas	for	tire,	battery	separator and	other	end-use	markets;	and	Teslin®	substrate	used	in	such	applications	as	radio frequency	identification	(RFID)	tags	and	labels,	e-passports,	drivers'	licenses	and identification	cards.	Transitions®	lenses	are	processed	and	distributed	by	PPG's	51 percent-owned	joint	venture	with	Essilor	International.

The	Commodity	Chemicals	reportable	segment	is	comprised	of	the	chlor- alkali	and	derivatives	operating	segment.	The	primary	chlor-alkali	and	derivative products	are	chlorine,	caustic	soda,	vinyl	chloride	monomer,	chlorinated	solvents, calcium	hypochlorite,	ethylene	dichloride,	hydrochloric	acid	and	phosgene derivatives.	On	January	28,	2013,	PPG	completed	the	separation	of	its	commodity chemicals	business	and	merger	of	the	subsidiary	holding	the	PPG	commodity chemicals	business	with	a	subsidiary	of	Georgia	Gulf.	Refer	to	Note	25, "Separation	and	Merger	Transaction"	for	financial	information	relating	to	this transaction.

The	Glass	reportable	segment	is	comprised	of	the	flat	glass	and	fiber	glass operating	segments.	This	reportable	segment

primarily	supplies	flat	glass	and	continuous-strand	fiber	glass	products.

Production	facilities	and	markets	for	Performance	Coatings,	Industrial Coatings,	Architectural	Coatings	–	EMEA,	Optical	and	Specialty	Materials, Commodity	Chemicals	and	Glass	are	global.	PPG's	reportable	segments	continue to	pursue	opportunities	to	further	develop	their	global	markets,	including	efforts	in Asia,	Eastern	Europe	and	Latin	America.	Each	of	the	reportable	segments	in which	PPG	is	engaged	is	highly	competitive.	The	diversification	of	our	product lines	and	the	worldwide	markets	served	tend	to	minimize	the	impact	on	PPG's total	sales	and	earnings	of	changes	in	demand	in	a	particular	market	or	in	a particular	geographic	area.

The	accounting	policies	of	the	operating	segments	are	the	same	as	those described	in	the	summary	of	significant	accounting	policies	(See	Note	1, "Summary	of	Significant	Accounting	Policies").	The	Company	allocates	resources to	operating	segments	and	evaluates	the	performance	of	operating	segments	based upon	segment	income,	which	is	earnings	before	interest	expense	–	net,	income taxes	and	noncontrolling	interests	and	excludes	certain	charges	which	are considered	to	be	unusual	or	non-recurring.	The	Company	also	evaluates performance	of	operating	segments	based	on	working	capital	reduction,	margin growth	and	sales	volume	growth.	Legacy	items	include	current	costs	related	to former	operations	of	the	Company,	including	certain	environmental	remediation, pension	and	other	postretirement	benefit	costs,	and	certain	charges	for	legal	and other	matters	which	are	considered	to	be	unusual	or	non-recurring.	These	legacy costs	are	excluded	from	the	segment	income	that	is	used	to	evaluate	the performance	of	the	operating	segments.	Legacy	items	also	include	equity	earnings from	PPG's	approximate	40%	investment	in	its	former	automotive	glass	and services	business	and	$35	million,	$35	million	and	$30	million	of	costs	in	2012, 2011	and	2010,	respectively,	related	to	the	pension	and	other	postemployment benefit	liabilities	of	the	divested	business	retained	by	PPG.	Corporate	unallocated costs	include	the	costs	of	corporate	staff	functions	not	directly	associated	with	the operating	segments,	the	cost	of	corporate	legal	cases,	net	of	related	insurance recoveries,	and	the	cost	of	certain	insurance,	variable	pay,	stock-based compensation	and	employee	benefit	programs.	Net	periodic	pension	expense	is allocated	to	the	operating	segments	and	the	portion	of	net	periodic	pension expense	related	to	the	corporate	staff	functions	is	included	in	the	Corporate unallocated	costs.

For	Optical	and	Specialty	Materials,	Commodity	Chemicals	and	Glass, intersegment	sales	and	transfers	are	recorded	at	selling	prices	that	approximate market	prices.	Product	movement	between	Performance	Coatings,	Industrial Coatings	and	Architectural	Coatings	–	EMEA	is	limited,	is	accounted	for	as	an inventory	transfer	and	is	recorded	at	cost	plus	a	mark-up,	the	impact	of	which	is not	significant	to	the	segment	income	of	the	three	coatings	reportable	segments.

| (Millions)<br>Reportable	Business	Segments | Performance<br>Coatings | Industrial<br>Coatings | Architectural<br>Coatings	–<br>EMEA | Optical<br>and<br>Specialty<br>Materials | Commodity<br>Chemicals | Glass | Eliminations	/<br>Non-<br>Segment<br>Items(1) | Consolidated<br>Totals |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2012 |  |  |  |  |  |  |  |  |
| Net\tsales\tto\texternal\tcustomers | $4,752 | $4,379 | $2,147 | $1,202 | $1,688 | $1,032 | $— | $15,200 |
| Intersegment\tnet\tsales | — | — | — | 3 | 12 | — | (15) | — |
| Total\tnet\tsales | $4,752 | $4,379 | $2,147 | $1,205 | $1,700 | $1,032 | $(15) | $15,200 |
| Segment\tincome | $744 | $590 | $145 | $348 | $372 | $63 | $— | $2,262 |
| Legacy\titems(2) |  |  |  |  |  |  |  | (219) |
| Business\trestructuring\t(See\tNote\t7) |  |  |  |  |  |  |  | (208) |
| Business\tseparation\tand\tcertain\tacquisition-related\ncosts(5)\t(See\tNote\t25) |  |  |  |  |  |  |  | (26) |
| Charges\trelated\tto\tacquisition\tof\tDyrup\tand\tColpisa\n(See\tNote\t2) |  |  |  |  |  |  |  | (6) |
| Interest\texpense,\tnet\tof\tinterest\tincome |  |  |  |  |  |  |  | (171) |
| Corporate\tunallocated(1) |  |  |  |  |  |  |  | (230) |
| Income\tbefore\tincome\ttaxes |  |  |  |  |  |  |  | $1,402 |
| Depreciation\tand\tamortization\t(See\tNote\t1) | $112 | $87 | $115 | $32 | $43 | $53 | $23 | $465 |
| Share\tof\tnet\tearnings\t(loss)\tof\tequity\taffiliates | 1 | (1) | 2 | — | 2 | 4 | 3 | 11 |
| Segment\tassets(3) | 3,993 | 2,886 | 2,727 | 646 | 738 | 914 | 3,974 | 15,878 |
| Investment\tin\tequity\taffiliates | 10 | 15 | 19 | — | 1 | 166 | 51 | 262 |
| Expenditures\tfor\tproperty | 103 | 184 | 52 | 65 | 48 | 46 | 22 | 520 |
| 2011 |  |  |  |  |  |  |  |  |
| Net\tsales\tto\texternal\tcustomers | $4,626 | $4,158 | $2,104 | $1,204 | $1,732 | $1,061 | $— | $14,885 |
| Intersegment\tnet\tsales | — | — | — | 3 | 9 | — | (12) | — |
| Total\tnet\tsales | $4,626 | $4,158 | $2,104 | $1,207 | $1,741 | $1,061 | $(12) | $14,885 |
| Segment\tincome | $673 | $438 | $123 | $326 | $370 | $97 | $— | $2,027 |
| Legacy\titems(2) |  |  |  |  |  |  |  | (66) |
| Interest\texpense,\tnet\tof\tinterest\tincome |  |  |  |  |  |  |  | (168) |
| Acquisition-related\tgain,\tnet\t(See\tNote\t2) |  |  |  |  |  |  |  | 9 |
| Corporate\tunallocated(1) |  |  |  |  |  |  |  | (205) |
| Income\tbefore\tincome\ttaxes |  |  |  |  |  |  |  | $1,597 |
| Depreciation\tand\tamortization\t(See\tNote\t1) | $115 | $90 | $113 | $36 | $41 | $52 | $20 | $467 |
| Share\tof\tnet\tearnings\tof\tequity\taffiliates | 2 | 1 | 2 | — | 1 | 24 | 7 | 37 |
| Segment\tassets(3) | 4,017 | 2,614 | 2,626 | 610 | 690 | 919 | 2,906 | 14,382 |
| Investment\tin\tequity\taffiliates | 12 | 12 | 20 | — | — | 170 | 47 | 261 |
| Expenditures\tfor\tproperty | 79 | 73 | 48 | 54 | 89 | 56 | 41 | 440 |

(1) Corporate	intersegment	net	sales	represent	intersegment	net	sales	eliminations.	Corporate	unallocated	costs	include	the	costs	of	corporate	staff	functions	not	directly	associated	with	the	operating	segments	and	certain	legal,	variable pay,	stock-based	compensation	and	benefit	costs.

(2) Legacy	items	include	current	costs	related	to	former	operations	of	the	Company,	including	certain	environmental	remediation,	pension	and	other	postretirement	benefit	costs,	legal	costs	and	certain	charges	which	are	considered	to	be non-recurring,	including	a	charge	related	to	flat	glass	antitrust	matters	in	the	third	quarter	of	2010.	The	Legacy	items	for	2012	include	an	environmental	remediation	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	(See	Note	15).	Legacy	items	also	include	equity	earnings	from	PPG's approximate	40%	investment	in	the	former	automotive	glass	and	services	business.

(3) Segment	assets	are	the	total	assets	used	in	the	operation	of	each	segment.	Corporate	assets	are	principally	cash	and	cash	equivalents,	cash	held	in	escrow,	short	term	investments,	deferred	tax	assets	and	the	approximate 40%	investment in	the	former	automotive	glass	and	services	business.

(4) Net	sales	to	external	customers	are	attributed	to	geographic	regions	based	upon	the	location	of	the	operating	unit	shipping	the product.

(5) Acquisition-related	costs	include	advisory,	legal,	accounting,	valuation,	and	other	professional	or	consulting	fees	incurred	to	effect	significant	acquisitions.	PPG	expects	to	incur	additional	acquisition-related	costs	in 2013.

# 25.	Separation	and	Merger	Transaction

On	January,	28,	2013,	the	Company	completed	the	previously	announced separation	of	its	commodity	chemicals	business	and	merger	of	its	wholly-owned subsidiary,	Eagle	Spinco	Inc.,	with	a	subsidiary	of	Georgia	Gulf	Corporation	in	a tax	efficient	Reverse	Morris	Trust	transaction	(the	"Transaction").	Pursuant	to	the merger,	Eagle	Spinco,	the	entity	holding	PPG's	former	commodity	chemicals business,	is	now	a	wholly-owned	subsidiary	of	Georgia	Gulf.	The	closing	of	the merger	followed	the	expiration	of	the	related	exchange	offer	and	the	satisfaction	of certain	other	conditions.	The	combined	company	formed	by	uniting	Georgia	Gulf with	PPG's	former	commodity	chemicals	business	is	named	Axiall	Corporation ("Axiall").	PPG	holds	no	ownership	interest	in	Axiall.	PPG	received	the	necessary ruling	from	the	Internal	Revenue	Service	and	as	a	result	this	Transaction	was generally	tax	free	to	PPG	and	its	shareholders.

Under	the	terms	of	the	exchange	offer,	35,249,104	shares	of	Eagle	Spinco common	stock	were	available	for	distribution	in	exchange	for	shares	of	PPG common	stock	accepted	in	the	offer.	Following	the	merger,	each	share	of	Eagle Spinco	common	stock	automatically	converted	into	the	right	to	receive	one	share of	Axiall	Corporation	common	stock.	Accordingly,	PPG	shareholders	who tendered	their	shares	of	PPG	common	stock	as	part	of	this	offer	received	3.2562 shares	of	Axiall	common	stock	for	each	share	of	PPG	common	stock	accepted	for exchange.	PPG	was	able	to	accept	the	maximum	of	10,825,227	shares	of	PPG common	stock	for	exchange	in	the	offer,	and	thereby,	reduced	its	outstanding shares	by	approximately	7%.

Under	the	terms	of	the	Transaction,	PPG	received	$900	million	of	cash	and 35.2	million	shares	of	Axiall	common	stock	(market	value	of	$1.8	billion	on January	25,	2013)	which	was	distributed	to	PPG	shareholders	by	the	exchange offer	as	described	above.	The	cash	consideration	is	subject	to	customary	post- closing	adjustment,	including	a	working	capital	adjustment.	In	the	Transaction, PPG	transferred	environmental	remediation	liabilities,	defined	benefit	pension plan	assets	and	liabilities	and	other	post-employment	benefit	liabilities	related	to the	commodity	chemicals	business	to	Axiall.	PPG	will	report	a	gain	on	the Transaction	reflecting	the	excess	of	the	sum	of	the	cash	proceeds	received	and	the cost	(closing	stock	price	on	January	25,	2013)	of	the	PPG	shares	tendered	and accepted	in	the	exchange	for	the	35.2	million	shares	of	Axiall	common	stock	over the	net	book	value	of	the	net	assets	of	PPG's	former	commodity	chemicals business.	The	Transaction	will	also	result	in	a	net	partial	settlement	loss	associated with	the	spin	out	and	termination	of	defined	benefit	pension	liabilities	and	the transfer	of	other	post-retirement	benefit	liabilities	under	the	terms	of	the Transaction.	During	2012,	the	Company	incurred	$21	million	of	pretax	expense, primarily	for	professional	services,	related	to	the	Transaction.	Additional Transaction-related	expenses	will	be	incurred	in	2013.

PPG	will	report	the	results	of	its	commodity	chemicals	business	for	January 2013	and	a	net	gain	on	the	Transaction	as	results	from	discontinued	operations when	it	reports	its	results

for	the	quarter	ending	March	31,	2013.	In	the	PPG	results	for	prior	periods, presented	for	comparative	purposes	beginning	with	the	first	quarter	2013,	the results	of	its	former	commodity	chemicals	business	will	be	reclassified	from continuing	operations	and	presented	as	the	results	from	discontinued	operations. The	net	sales	and	income	before	income	taxes	of	the	commodity	chemicals business	that	will	be	reclassified	and	reported	as	discontinued	operations	are presented	in	the	table	below	for	the	years	ended	December	31,	2012,	2011	and 2010:

| Millions | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tsales | $1,700 | $1,741 | $1,441 |
| Income\tbefore\tincome\ttaxes | $368 | $376 | $187 |

Income	before	income	taxes	for	the	year	ended	December	31,	2012,	2011	and 2010	is	$4	million	lower,	$6	million	higher	and	$2	million	lower,	respectively, than	segment	earnings	for	the	PPG	Commodity	Chemicals	segment	reported	for these	periods.	These	differences	are	due	to	the	inclusion	of	certain	gains,	losses and	expenses	associated	with	the	chlor-alkali	and	derivatives	business	that	were not	reported	in	the	PPG	Commodity	Chemicals	segment	earnings	in	accordance with	the	accounting	guidance	on	segment	reporting.

# Item	9.	Changes	in	and	Disagreements	With	Accountants	on

# Accounting	and	Financial	Disclosure

# Item	9A.	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- K,	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	and	to	ensure	that information	required	to	be	disclosed	by	the	Company	in	the	reports	that	it	files	or submits	under	the	Exchange	Act	is	accumulated	and	communicated	to	the Company's	management,	including	its	principal	executive	and	principal	financial officers,	as	appropriate,	to	allow	timely	decisions	regarding	required	disclosure.

# (b) Changes	in	internal	control.

There	were	no	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.

See	Management	Report	on	page	33	for	management's	annual	report	on internal	control	over	financial	reporting.	See	Report	of	Independent	Registered Public	Accounting	Firm	on	page	32	for	Deloitte	&	Touche	LLP's	attestation	report on	the	Company's	internal	control	over	financial	reporting.

# Item	9B.	Other	Information

# Part	III

# Item	10.	Directors,	Executive	Officers	and	Corporate	Governance

The	information	about	the	Company's	directors	required	by	Item	10	and	not otherwise	set	forth	below	is	contained	under	the	caption	"Proposal	1:	Election	of Directors"	in	PPG's	definitive	Proxy	Statement	for	the	2012	Annual	Meeting	of Shareholders	(the	"Proxy	Statement")	which	the	Company	anticipates	filing	with the	Securities	and	Exchange	Commission,	pursuant	to	Regulation	14A,	not	later than	120	days	after	the	end	of	the	Company's	fiscal	year,	and	is	incorporated herein	by	reference.

The	executive	officers	of	the	Company	are	elected	by	the	Board	of	Directors. The	information	required	by	this	item	concerning	the	Company's	executive officers	is	incorporated	by	reference	herein	from	Part	I	of	this	report	under	the caption	"Executive	Officers	of	the	Company."

Information	regarding	the	Company's	Audit	Committee	is	included	in	the Proxy	Statement	under	the	caption	"Corporate	Governance	–	Audit	Committee" and	is	incorporated	herein	by	reference.

Information	regarding	the	Company's	codes	of	ethics	is	included	in	the	Proxy Statement	under	the	caption	"Corporate	Governance	–	Codes	of	Ethics"	and	is incorporated	herein	by	reference.

Information	about	compliance	with	Section	16(a)	of	the	Exchange	Act	is included	in	the	Proxy	Statement	under	the	caption	"Beneficial	Ownership	– Section	16(a)	Beneficial	Ownership	Reporting	Compliance"	and	is	incorporated herein	by	reference.

# Item	11.	Executive	Compensation

The	information	required	by	Item	11	is	contained	in	the	Proxy	Statement under	the	captions	"Compensation	of	Directors,"	"Compensation	Discussion	and Analysis,"	"Compensation	of	Executive	Officers,"	"Potential	Payments	upon Termination	or	Change	in	Control,"	"Corporate	Governance	–	Compensation Committee	Interlocks	and	Insider	Participation,"	and	"Corporate	Governance	– Officers-Directors	Compensation	Committee	Report	to	Shareholders"	and	is incorporated	herein	by	reference.

# Item	12.	Security	Ownership	of	Certain	Beneficial	Owners	and Management	and	Related	Stockholder	Matters

The	information	required	by	Item	12	is	contained	in	the	Proxy	Statement under	the	captions	"Beneficial	Ownership"	and	"Equity	Compensation	Plan Information"	and	is	incorporated	herein	by	reference.

# Item	13.	Certain	Relationships	and	Related	Transactions,	and	Director Independence

The	information	required	by	Item	13	is	contained	in	the	Proxy	Statement under	the	captions	"Corporate	Governance	–	Director	Independence,"	"Corporate Governance	–	Review	and	Approval	or	Ratification	of	Transactions	with	Related Persons"

and	"Corporate	Governance	–	Certain	Relationships	and	Related	Transactions" and	is	incorporated	herein	by	reference.

# Item	14.	Principal	Accounting	Fees	and	Services

The	information	required	by	Item	14	is	contained	in	the	Proxy	Statement under	the	caption	"Independent	Registered	Public	Accounting	Firm"	and	is incorporated	herein	by	reference.

# Item	15.	Exhibits,	Financial	Statement	Schedules

(a)(1)				Consolidated	Financial	Statements	and	Reports	of	Independent	Registered Public	Accounting	Firm	(see	Part	II,	Item	8	of	this	Form	10-K).

The	following	information	is	filed	as	part	of	this	Form	10-K:

| Internal	Controls	–	Report	of	Independent	Registered<br>Public	Accounting	Firm | 32 |
| :--- | :--- |
| Management\tReport | 33 |
| Consolidated\tFinancial\tStatements\t–\tReport\tof\nIndependent\tRegistered\tPublic\tAccounting\tFirm | 33 |
| Consolidated\tStatement\tof\tIncome\tfor\tthe\tYears\tEnded\nDecember\t31,\t2012,\t2011\tand\t2010 | 34 |
| Consolidated\tStatement\tof\tComprehensive\tIncome\tfor\nthe\tYears\tEnded\tDecember\t31,\t2012,\t2011\tand\t2010 | 34 |
| Consolidated\tBalance\tSheet\tas\tof\tDecember\t31,\t2012\nand\t2011 | 35 |
| Consolidated\tStatement\tof\tShareholders'\tEquity\tfor\tthe\nYears\tEnded\tDecember\t31,\t2012,\t2011\tand\t2010 | 36 |
| Consolidated\tStatement\tof\tCash\tFlows\tfor\tthe\tYears\nEnded\tDecember\t31,\t2012,\t2011\tand\t2010 | 37 |
| Notes\tto\tthe\tConsolidated\tFinancial\tStatements | 38 |

The	following	Consolidated	Financial	Statement	Schedule	should	be	read	in conjunction	with	the	previously	referenced	financial	statements:

# Schedule	II	–	Valuation	and	Qualifying	Accounts

Allowance	for	Doubtful	Accounts	for	the	Years	Ended	December	31,	2012,	2011 and	2010

| (Millions) | Balance	at<br>Beginning<br>of	Year | Charged	to<br>Costs	and<br>Expenses | Deductions(1) | Balance	at<br>End	of<br>Year |
| :--- | :--- | :--- | :--- | :--- |
| 2012 $ | 71 | $24 | $(18) | $77 |
| 2011 | $91 | $31 | $(51) | $71 |
| 2010 | $122 | $18 | $(49) | $91 |

(1) Notes	and	accounts	receivable	written	off	as	uncollectible,	net	of	recoveries,	amounts attributable	to	divestitures	and	changes	attributable	to	foreign	currency	translation.

(2) Expenses	and	deductions	during	2011	were	elevated	by	 $9	million	due	to	a	U.K.	based retail	do-it-yourself	customer	who	filed	for	bankruptcy	during	the	second	quarter	of	2011.

All	other	schedules	are	omitted	because	they	are	not	applicable.

(a)(3)				Exhibits.	The	following	exhibits	are	filed	as	a	part	of,	or	incorporated	by reference	into,	this	Form	10-K.

2.1 Agreement	and	Plan	of	Merger,	dated	as	of	July 18,	2012,	by	and	among	PPG	Industries,	Inc., Eagle	Spinco	Inc.,	Georgia	Gulf	Corporation	and Grizzly	Acquisition	Sub,	Inc.,	was	filed	as	Exhibit 2.1	to	the	Registrant's	Current	Report	on	Form	8-K filed	on	July	19,	2012.

2.2 Amendment	No.	1	to	the	Agreement	and	Plan	of Merger,	dated	as	of	August	31,	2012,	by	and	PPG Industries,	Inc.,	Eagle	Spinco	Inc.,	Georgia	Gulf Corporation	and	Grizzly	Acquisition	Sub,	Inc., was	filed	as	Exhibit	2.1	to	the	Registrant's	Current Report	on	Form	8-K	filed	on	September	5,	2012.

† 2.3 Sale	and	Purchase	Agreement,	dated	December	13, 2012,	between	Akzo	Nobel	N.V.	and	PPG Industries,	Inc.

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	September	30,	2012.

4.6 Supplemental	Indenture,	dated	as	of	March	18, 2008,	was	filed	as	Exhibit	4.2	to	the	Registrant's Current	Report	on	Form	8-K	filed	on	March	18, 2008.

4.7 Second	Supplemental	Indenture,	dated	as	of November	12,	2010,	was	filed	as	Exhibit	4.3	to	the Registrant's	Current	Report	on	Form	8-K	filed	on November	12,	2010.

* 10.10 PPG	Industries,	Inc.	Deferred	Compensation	Plan related	to	compensation	deferred	on	or	after	to January	1,	2005,	as	amended	and	restated	effective January	1,	2011,	was	filed	as	Exhibit	10.5	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for the	period	ended	June	30,	2012.

* 10.11 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.

* 10.12 PPG	Industries,	Inc.	Incentive	Compensation	Plan for	Key	Employees,	as	amended	April	20,	2006, was	filed	as	Exhibit	10.8	to	the	Registrant's Annual	Report	on	Form	10-K	for	the	period	ended December	31,	2008.

* 10.13 PPG	Industries,	Inc.	Management	Award	Plan,	as amended	April	20,	2006,	was	filed	as	Exhibit	10.9 to	the	Registrant's	Annual	Report	on	Form	10-K for	the	period	ended	December	31,	2008.

* 10.15 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.

* 10.16 PPG	Industries,	Inc.	Amended	and	Restated Omnibus	Incentive	Plan,	was	filed	as	Annex	A	to the	Registrant's	Definitive	Proxy	Statement	for	its 2011	Annual	Meeting	of	Shareholders	filed	on March	10,	2011.

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.

* 10.18 Form	of	Time-Vested	Restricted	Stock	Unit Award	Agreement,	was	filed	as	Exhibit	10.13	to the	Registrant's	Annual	Report	on	Form	10-K	for the	period	ended	December	31,	2008.

* 10.19 Form	of	Time-Vested	Restricted	Stock	Unit Award	Agreement	for	Directors,	was	filed	as Exhibit	10.8	to	the	Registrant's	Quarterly	Report on	Form	10-Q	for	the	period	ended	June	30,	2011. * 10.20 Form	of	Non-Qualified	Stock	Option	Award Agreement,	was	filed	as	Exhibit	10.14	to	the Registrant's	Annual	Report	on	Form	10-K	for	the period	ended	December	31,	2008. * 10.21 Form	of	Non-Qualified	Stock	Option	Award Agreement,	was	filed	as	Exhibit	10.3	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for the	period	ended	September	30,	2009.

* 10.22 Form	of	Non-Qualified	Stock	Option	Award Agreement,	was	filed	as	Exhibit	10.4	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for the	period	ended	June	30,	2011.

| 10.37 | Three-Year	Credit	Agreement,	dated	August	2, | † | 23 | Consent	of	Independent	Registered	Public |
| :--- | :--- | :--- | :--- | :--- |
|  | 2010,\tamong\tPPG\tIndustries,\tInc.;\tthe\tseveral |  |  | Accounting\tFirm. |
|  | banks\tand\tfinancial\tinstitutions\tparty\tthereto; | † | 24 | Powers\tof\tAttorney. |
|  | JPMorgan\tChase\tBank,\tN.A.,\tas\tadministrative |  |  |  |
|  | agent;\tJ.P.\tMorgan\tSecurities,\tInc.,\tThe\tBank\tof | † | 31.1 | Certification\tof\tPrincipal\tExecutive\tOfficer |
|  | Tokyo-Mitsubishi\tUFJ,\tLtd.\tand\tBNP\tParibas |  |  | Pursuant\tto\tRule\t13a-14(a)\tor\t15d-14(a)\tof\tthe |
|  | Securities\tCorp.,\tas\tco-lead\tarrangers\tand\tco- |  |  | Exchange\tAct,\tas\tAdopted\tPursuant\tto\tSection |
|  | bookrunners;\tand\tThe\tBank\tof\tTokyo-Mitsubishi |  |  | 302\tof\tthe\tSarbanes-Oxley\tAct\tof\t2002. |
|  | UFJ,\tLtd.\tand\tBNP\tParibas,\tas\tco-syndication | † | 31.2 | Certification\tof\tPrincipal\tFinancial\tOfficer |
|  | agents\twas\tfiled\tExhibit\t10\tto\tthe\tRegistrant's |  |  | Pursuant\tto\tRule\t13a-14(a)\tor\t15d-14(a)\tof\tthe |
|  | Current\tReport\ton\tForm\t8-K\tfiled\ton\tAugust\t6, |  |  | Exchange\tAct,\tas\tAdopted\tPursuant\tto\tSection |
|  | 2010. |  |  | 302\tof\tthe\tSarbanes-Oxley\tAct\tof\t2002. |
| 10.38 | Five-Year\tCredit\tAgreement\tamong\tPPG | † | 32.1 | Certification\tof\tChief\tExecutive\tOfficer |
|  | Industries,\tInc.;\tthe\tseveral\tbanks\tand\tfinancial |  |  | Pursuant\tto\t18\tU.S.C.\tSection\t1350,\tas\tAdopted |
|  | institutions\tparty\tthereto;\tJPMorgan\tChase\tBank, |  |  | Pursuant\tto\tSection\t906\tof\tthe\tSarbanes-Oxley |
|  | N.A.,\tas\tadministrative\tagent;\tThe\tBank\tof\tTokyo- |  |  | Act\tof\t2002. |
|  | Mitsubishi\tUFJ,\tLtd.,\tBNP\tParibas,\tCitigroup | † | 32.2 | Certification\tof\tChief\tFinancial\tOfficer |
|  | Global\tMarkets\tInc.\tand\tPNC\tBank,\tNational |  |  | Pursuant\tto\t18\tU.S.C.\tSection\t1350,\tas\tAdopted |
|  | Association,\tas\tco-syndication\tagents;\tand\tJ.P. |  |  | Pursuant\tto\tSection\t906\tof\tthe\tSarbanes-Oxley |
|  | Morgan\tSecurities\tLLC,\tThe\tBank\tof\tTokyo- |  |  | Act\tof\t2002. |
|  | Mitsubishi\tUFJ,\tLtd.,\tBNP\tParibas\tSecurities | ** | 101.INS | XBRL\tInstance\tDocument |

Mitsubishi	UFJ,	Ltd.,	BNP	Paribas	Securities

Corp.,	Citigroup	Global	Markets	Inc.,	and	PNC Capital	Markets	LLC,	as	co-lead	arrangers	and	co- bookrunners,	was	filed	as	Exhibit	10	to	the Registrant's	Current	Report	on	Form	8-K	filed	on September	13,	2012.

* 10.39 Employment	Agreement	between	PPG	Industries Europe	Sàrl,	Rolle	and	Pierre-Marie	DeLeener, was	filed	as	Exhibit	10.2	to	the	Registrant's Quarterly	Report	on	Form	10-Q	for	the	period ended	September	30,	2009.

* 10.40 Employment	Agreement,	dated	September	12, 2011,	between	PPG	Industries,	Inc.	and	Pierre- Marie	De	Leener,	was	filed	as	Exhibit	10.1	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for the	period	ended	September	30,	2011.

Agreement,	dated	September	12,	2011,	between PPG	Industries	Europe	Sárl	and	Pierre-Marie	De Leener	terminating	the	Employment	Agreement, between	PPG	Industries	Europe	Sárl	and	Pierre- Marie	De	Leener,	was	filed	as	Exhibit	10.2	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for the	period	ended	September	30,	2011.

* 10.42 Separation	Agreement,	dated	August	22,	2012, between	PPG	Industries,	Inc.	and	Pierre-Marie	De Leener,	was	filed	as	Exhibit	10.1	to	the Registrant's	Quarterly	Report	on	Form	10-Q	for the	period	ended	September	30,	2012.

† 21 Subsidiaries	of	the	Registrant.

** 101.INS XBRL	Instance	Document

** 101.SCH XBRL	Taxonomy	Extension	Schema	Document

** XBRL	Taxonomy	Extension	Calculation

101.CAL Linkbase	Document

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

** 	 Attached	as	Exhibit	101	to	this	report	are	the	following	documents formatted	in	XBRL	(Extensible	Business	Reporting	Language)	as	of and	for	the	year	ended	December	31,	2012:	(i)	the	Consolidated Statement	of	Income,	(ii)	the	Consolidated	Balance	Sheet,	(iii)	the Consolidated	Statement	of	Shareholders'	Equity,	(iv)	the Consolidated	Statement	of	Comprehensive	Income	(Loss),	(v)	the Consolidated	Statement	of	Cash	Flows,	(vi)	Notes	to	Consolidated Financial	Statements	and	(vii)	Financial	Schedule	of	Valuation	and Qualifying	Accounts.

# Signatures

Pursuant	to	the	requirements	of	Section	13	or	15(d)	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	on	February	21,	2013.

(Registrant)

By /s/	David	B.	Navikas

David	B.	Navikas,	Senior	Vice	President,	Finance

				and	Chief	Financial	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	by	the	following	persons	on	behalf	of	the	Registrant	and	in	the capacities	indicated	on	February	21,	2013.

# PPG	Industries	Inc.	and	Consolidated	Subsidiaries

# Index	to	Exhibits

** 101.LAB XBRL	Taxonomy	Extension	Label	Linkbase	Document

** 101.PRE XBRL	Taxonomy	Extension	Presentation	Linkbase	Document

† Filed	herewith.



Question: what are cumulative three year dividends in millions?
Calculation:    dividends_2012 = 358
 dividends_2011 = 355
 dividends_2010 = 360
 total_dividends = dividends_2012 + dividends_2011 + dividends_2010
 answer = total_dividends
Answer: 1073