United States.
PPG has announced that its board of directors approved significant and comprehensive restructuring measures to reduce its overall cost structure. Actions focus on certain regions and end-user markets when business conditions are weaker, and are aimed at structurally reducing operational, functional and administrative costs.
PPG will record a pre-tax restructuring charge of $190 million to $200 million, or 53-58 cents per diluted share, in the fourth quarter of 2016, of which approximately $140 million represents cash costs and $50 million to $60 million relates to amortization of certain assets and other non-cash costs. Of the approximately $140 million of total cash disbursement, about $110 million is expected in 2017, with the balance occurring in 2018.
In addition to the above charges and cash costs, approximately $15 million of incremental costs related to the cash restructuring are expected during 2017 for certain items that are required to be accounted for as incurred.
When completed, the company expects the restructuring actions to generate annual savings of $120 million to $130 million, with savings of $40 million to $50 million projected in 2017 and the remainder of the expected annual savings projected to materialize substantially by the end of 2018.
Source: PPG.
