Trian Partners Activist Presentation Deck
Accounting Irregularities
After first identifying accounting issues in April, on May 10, 2018, PPG informed investors that it
was unable to file its Form 10-Q on a timely basis and that the Company's previously filed Form
10-K could no longer be relied upon
■
On June 28, 2018, PPG announced that it was restating its financial statements and earnings
releases for the six previous quarters (Q4 '16 through Q1 '18) in order to correct various
accounting errors, including repeated failures to accrue certain expenses on a timely basis
▪ We note that in half of the six earnings reports that were affected by the accounting
"irregularities", it appears that PPG either "beat" or "met" consensus earnings expectations by
way of artificially inflated earnings:
Fiscal
Quarter
Q4 16
Q2 17
Q1 18
Adj. EPS
Originally
Reported
$1.19
$1.83
$1.39
Cons.
Estimate
$1.182
Orig.
Beat, Meet
Accounting
or Miss? Restatement
Beat
$1.819 Beat
$1.393 ~Meet
1c
3c
3c
Restated
Adj. EPS
$1.18
$1.80
$1.36
Source: Company SEC filings and press releases for PPG financials as originally reported, and as restated. Consensus estimates per Bloomberg 10/12/18.
Restated Beat,
Meet or Miss?
~Meet
Miss
Miss
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