Fourth quarter 2014 reported net income from continuing operations was $86 million, or 62 cents per diluted share. Fourth quarter 2014 adjusted net income from continuing operations was $293 million, or $2.11 per diluted share. The adjusted figures exclude debt refinancing charges of $200 million after-tax, or $1.44 per diluted share, $36 million after-tax, or 26 cents per diluted share, for transaction-related costs primarily from the Comex acquisition, and the benefit of lower taxes of $29 million, or 21 cents per diluted share, relating to a favorable ruling on a prior-year foreign tax matter. The ongoing tax rate on the adjusted earnings excluding these adjustments was 23.5 percent for the fourth quarter and 23.9 percent for the full year, consistent with the company’s prior guidance.
Fourth quarter 2013 reported net income and earnings per diluted share were $237 million and $1.66, respectively. Adjusted fourth quarter 2013 net income from continuing operations was $240 million with earnings from continuing operations of $1.68 per diluted share, excluding transaction-related costs of $3 million, or 2 cents per diluted share.
“We established new fourth quarter and full-year milestones in sales and adjusted earnings per share from continuing operations,” said Charles Bunch, PPG chairman and CEO. “Our strong financial performance, including several consecutive years of at least 20 percent adjusted earnings growth, clearly illustrates the benefits of our active portfolio management, earnings-accretive cash deployment and persistent operational focus.
“Strategically, 2014 was another successful and eventful year as we continued to enhance our business portfolio, including completion of the Comex acquisition in the fourth quarter. We are very pleased to now have this high-quality business as part of PPG,” Bunch said. “We also continued our heritage of returning cash to shareholders, with more than $1.1 billion returned for the year through dividends and share repurchases.”
In April, the company raised the per-share dividend by 10 percent. PPG has paid annual dividends for 115 consecutive years, including 43 consecutive years of increased per-share payouts.
PPG reported cash and short-term investments totaling $1.2 billion at year-end. The company repurchased $300 million, or about 1.4 million shares, of PPG stock during the quarter. PPG also reported approximate full-year 2014 cash uses as follows: $585 million for capital spending, $360 million for dividends paid, $2.5 billion on acquisitions (including repayment of debt acquired), and $750 million on share repurchases totaling approximately 3.8 million shares.
Full-Year 2014 Financial Results
PPG’s 2014 full-year net sales from continuing operations were $15.4 billion, an increase of 8 percent versus $14.3 billion the prior year. Acquisition-related sales contributed 4 percent year-over-year, supplemented by sales volumes and pricing, which added 4 percent and 1 percent, respectively, and partly offset by unfavorable currency translation of 1 percent. The company’s 2014 full-year reported net income from continuing operations was $1.13 billion, or $8.10 per diluted share, versus $950 million, or $6.55 per diluted share, in 2013. Full-year 2014 adjusted net income from continuing operations was $1.36 billion, or $9.75 per diluted share, versus $1.11 billion, or $7.67 per diluted share, in 2013.