Trian Partners Activist Presentation Deck slide image

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 - 11 -
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