PPG Industries Earnings Call Nuggets: Transitions Joint Venture and Synergy Target
Transitions Joint Venture
David Begleiter – Deutsche Bank: Chuck, can you update on your discussions with Essilor on the Transitions joint venture?
Charles E. Bunch – Chairman and CEO: David, it’s nice to hear from you. No, we have no update today on the discussions other than the disclosure that we made early in the first quarter.
David Begleiter – Deutsche Bank: And just as a follow-up, in terms of the Akzo business, talking about some profitability metrics you might look for 2013 given these initial cost savings in there?
Michael H. McGarry – EVP: David, this is Michael McGarry. In regard to that, the most challenging aspect of the Akzo business is the stores network, so that will be where we focus. Obviously, we have some synergy levels in a lot of the places; overhead as well as other locations as far as how we operate the business. First, there we have a lot more rigor that I think in our business; so that will be where we’re focused.
John McNulty – Credit Suisse: With regard to the synergy target, obviously, you’ve had some chance, I had a little bit of time to actually look at them, and obviously, it’s a pretty big increase to the $200 million. So, I was wondering if you could give us some clarity as to which of the kind of major buckets you’re seeing the biggest changes in? And then as the follow-up, if you can give us any color as to maybe any working capital opportunities you may see in the assets as well now that you’ve gotten a chance to dig into them.
Michael H. McGarry – EVP: John, this is Michael again. The West Coast is an opportunity for us. As you know, they had a nice store network on the West Coast. So we’ll be shifting volume from their plants into our Reno network. So that will be one. We have a deeper (understanding of) their logistics across both networks. That will be one. I talked already about the stores opportunity in SG&A. So, those will be the other ones.
John McNulty – Credit Suisse: And on the working capital side?
Michael H. McGarry – EVP: Working capital; I would say, they’re fairly decent, and so that’s clearly an area of focus for the entire Company and not just for Architectural.
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