PPG Annual Report and 10K 2019

Notes to the Consolidated Financial Statements 58 2019 PPG ANNUAL REPORT AND 10-K 11. Earnings Per Common Share ($ in millions, except per share amounts) 2019 2018 2017 Earnings per common share (attributable to PPG) Income from continuing operations, net of tax $1,243 $1,323 $1,369 Income from discontinued operations, net of tax — 18 225 Net income (attributable to PPG) $1,243 $1,341 $1,594 Weighted average common shares outstanding 236.9 243.9 256.1 Effect of dilutive securities: Stock options 0.6 0.8 0.9 Other stock compensation plans 0.7 0.7 0.8 Potentially dilutive common shares 1.3 1.5 1.7 Adjusted weighted average common shares outstanding 238.2 245.4 257.8 Earnings per common share (attributable to PPG): Income from continuing operations, net of tax $5.25 $5.43 $5.34 Income from discontinued operations, net of tax — 0.07 0.88 Net income (attributable to PPG) $5.25 $5.50 $6.22 Earnings per common share - assuming dilution (attributable to PPG) Income from continuing operations, net of tax $5.22 $5.40 $5.31 Income from discontinued operations, net of tax — 0.07 0.87 Net income (attributable to PPG) $5.22 $5.47 $6.18 There were 0.9 million, 1.0 million, and 0.6 million outstanding stock options excluded in 2019, 2018 and 2017, respectively, from the computation of earnings per diluted common share due to their anti-dilutive effect. 12. Income Taxes The provision for income taxes by taxing jurisdiction and by significant components consisted of the following: ($ in millions) 2019 2018 2017 Current U.S. federal $86 $7 $179 U.S. state and local 15 4 49 Foreign 296 297 349 Total current income tax expense $397 $308 $577 Deferred U.S. federal ($1) $44 $107 U.S. state and local 13 7 (16) Foreign (17) (6) (53) Total deferred income tax expense ($5) $45 $38 Total income tax expense $392 $353 $615 A reconciliation of the statutory U.S. corporate federal income tax rate to the Company’s effective tax rate follows: 2019 2018 2017 U.S. federal income tax rate 21.0% 21.0% 35.0% Changes in rate due to: U.S. tax cost/(benefit) - Tax Cuts & Jobs Act 0.3 (2.5) 11.0 U.S./foreign tax differential 2.9 3.3 (9.3) U.S. current tax benefit on foreign exchange realization — — (4.9) U.S. tax incentives (0.7) (1.0) (2.3) U.S. tax benefit on foreign dividends (0.9) (0.4) (1.9) U.S. state and local taxes 1.3 0.5 1.1 U.S. deferred tax benefit on foreign income — — (0.6) Other (0.3) — 2.6 Effective income tax rate 23.6% 20.9% 30.7%

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