Good day, ladies and gentlemen, and welcome to the Q1 2015 PPG Industries Earnings Conference Call. My name is Tawanda and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Vince Morales, Vice President, Investor Relations. Please proceed, sir.

Thank you, Tawanda, and good afternoon, everyone. Once again, this is Vince Morales, Vice President of Investor Relations for PPG Industries. We appreciate your continued interest in PPG and welcome you to our first quarter 2015 financial results overview. Joining me on the call today from PPG is Chuck Bunch, Chairman and Chief Executive Officer; Michael McGarry, President and Chief Operating Officer and Frank Sklarsky, Executive Vice President and Chief Financial Officer. Our comments relate to the financial information we released today, Thursday, April 16, 2015. I will also remind everyone that we posted detailed commentary in the accompanying presentation slides on our investor center at ppg.com. These slides are also available on the webcast site for this call and provide additional support to the opening comments Chuck will make momentarily. Following Chuck's perspective on the company financial results for the quarter, we will move to the Q&A session. Both the prepared commentary, the presentation slides and discussion during the call may contain forward-looking statements reflecting the company's current view of future events and their potential effect on PPG's operating and financial performance. These statements involve uncertainties and risks which may cause actual results to differ. The company is under no obligation to provide subsequent updates to these forward-looking statements. The presentation also contains certain non-GAAP financial measures the company has provided in the appendix materials which are available again on our website reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information, please refer to PPG's filings with the SEC. And now let me introduce PPG's Chairman and CEO, Chuck Bunch.

Thank you, Vince and good afternoon everyone. I want to thank you for your interest in PPG. Today, we reported record first quarter 2015 financial results from continuing operations. We achieved record first quarter net sales of 3.7 billion and record first quarter adjusted earnings per diluted share from continuing operations of $2.37. Overall, we continue to deliver strong financial results and I'm pleased with our sales and earnings per share growth in the quarter. Our adjusted earnings per share were up 20% versus the first quarter record established last year with each of our reporting segments growing earnings by at least 10% in local currencies. As I will discuss in a few minutes, our strong performance was despite the fact that we faced some difficult prior year sales comparisons. As a global company, we were also impacted by unfavorable currency translation and continue to see variation in economic conditions among the major global regions. Contributing to our record first quarter results were the benefits from our recent strategic actions and cash deployment. This included both acquisition related earnings and a reduction in our share count stemming from cash deployed on share repurchases. We have also continued to work diligently on other company specific actions. This included a debt refinancing we recently completely which reduced our net interest expense in the quarter by nearly 50% versus the prior year. In addition, we have continued our strong legacy of cost and productivity improvements which you have come to expect from PPG. Finally, several of our businesses have continued to deliver strong and above industry growth rates as we benefited from our leading technologies and excellent customer service. Again, we achieved excellent quarterly results that were aided by specific actions we have taken strategically, operationally and financially. Now I will discuss some…

[Operator Instructions] Your first question comes from the line of John McNulty with Credit Suisse. Please proceed.

A quick question on Comex. I guess you had indicated that you saw volume growth, it was about 10% year-over-year organically. And I guess I'm wondering what's driving that, because it certainly seems a stronger than the general end markets down there would imply.

John, this is Michael. The Comex business has been performing on all levels, they have – the GDP down there is around little bit around 3% and we have been growing. We expect it, we told you in the last call we grow probably 1.5 to 2 times that, we have outperformed that, that's been both government sales as well as the cohesion with our other PPG products. So all in all, I would tell you they’re doing a very good job and they had a early Easter promotion as well at segment augmented sales.

Great, thanks. And then maybe a question with regard to the restructuring plan and where the $100 million to $105 million of savings are coming from, can you give us a little bit of clarity as to where you do see the biggest buckets in terms of opportunities there?

John this is Frank. So a little more than half of the actions are focused on some of the markets that have seen some subdued economic conditions so that will focus on Europe and some other areas of challenging economics. So some of that savings will be in area of administrative backoffice, increased shared services, parts of the supply chain in terms of manufacturing productivity, warehousing efficiencies things like that. But if you look across the spectrum of the 100 to 105 savings, it really does run across all regions, all businesses, and all functions. The other thing that we are focusing too as we stated in that release is that part of the restructuring is focused on the acquisition, synergies, achievement and that was we always plan to do that. So that's also part of it.

Great, thanks very much.

Your next question comes from the line of David Begleiter with Deutsche bank. Please proceed.

Thank you. Chuck, on raw materials, did you see any material benefit in Q1? And what's your expectation in terms of Q2 for gross margin expansion, given lower raws?

We saw very modest improvement in raw material pricing David, in fact if you look across all the corporation in both our fixed and variable cost, we had inflation that was just slightly negative less than 1% and so we still have not seen the full benefits of the raw material price reductions that we anticipate later this year. We think the second half of the year, we will be able to pull through some of these raw material price reductions in a more meaningful way. I think we’ve talked about first quarter working through higher cost, inventory levels as an example and getting those savings pull through from our suppliers, we don’t have index prices as a rule with either our suppliers or customers. So we focused on that and we think as we go through the year but certainly in the second half, we are going to see more raw material benefits from our raw materials.

Very good. And just in Asia and China, you noted some acceleration in China. That's perhaps against what we're seeing in terms of growth slowing. So what are you doing well in China and Asia overall?

I think for PPG we’ve been well positioned with several of the more consumer oriented markets not as focused on exports or construction, we have exposure to those businesses. And I think our strongest of markets in China were automotive OEM which is a domestic market in China, those sales have continued to grow above - slightly above the what their overall GDP growth has been stated as so high single digits for automotive growth. And we’ve been well positioned there with some of our new technologies, compact processes, we have done well in that sector, packaging coating would be another example of a consumer oriented end used market that has grown faster than some of the export oriented or construction related business.

Thank you very much.

Your next question comes from the line of Ghansham Panjabi with Robert W. Baird. Please proceed.

First off, Chuck, are you sensing a new level of optimism from your customers in Europe correctly? Or are your comments on lower energy costs and the pickup in exports from the region more your expectation on a go-forward basis? And also, any early cycle businesses in the region that are starting to improve that you are particularly excited about?

Yes Ghansham it’s good to hear from you, I would say in Europe we have been probably waiting for recovery for several years and we remain cautious on how the markets are trending. But I have been encouraged and this is not just a personal view, it is our team and they have been pessimistic or as cautious as I’ve been but especially on the automotive side of the business, you had seen sales growth accelerate here in the first quarter especially in Southern Europe. So we’re talking now about kind of high single digit sales growth that we haven’t yet seen translated into production, production increases or production growth which is where we have our sales and earnings. And our team feels that if these sales levels continue that we’re going to see higher growth rates in automotive as we go through the year. If you look at consumer confidence indicators they have also turned up in Europe and I think they’re combination of yes we’re facing some weaker currencies there but the combination of some of the central bank actions with some of the earlier cycle markets like automotive is starting to move I am a little more optimistic in the recovery here after the 2008, 2009 recession automotive was one of the early movers after it really went down quite drastically. And then it was the construction markets here in North America that took a little longer to recover and I would say that seems to be the case a little bit with us at least in France and Southern Europe we’re not seeing the construction markets bounce back yet. But automotive we’re all more optimistic and that I think bodes well not only for that end used market but for a number of other industrial production end used markets. So I’m a little more optimistic even with the weaker currencies and in fact that is probably going to be one of the contributing factors as we go through this recovery in the overall economies there.

And then just as a follow-on on North American architectural, is it your view that pricing is sort of stable in the market? Just curious on what you are seeing from a competitive standpoint, just given all the promotional activity in the channel.

The pricing is flat in the marketplace.

Is that your expectation that it stays flat for the year?

Take the expectation is that it will remain flat.

Okay, thanks so much.

Your next question comes from the line of Kevin McCarthy with Bank of America. Please proceed.

Yes, good afternoon. Chuck, it looks like we have some nascent momentum in vehicle miles driven. Are you seeing any benefit in your refinish business yet, related to that? Or would you expect any as the year progresses?

Hi, Kevin. I would expect, it’s a little early, if you looked some of the winter activity last year we ended up having a pretty good year even though of the automotive refinish market started off quite slowly last year as well. And so, I think you were going to see some improvement in automotive refinish as we go through the year but the first quarter is a little too soon to get the benefit from what was pretty sharply cold winter here in the early months. We saw obviously some improvement in the second half of March when things finally got a little better but we won’t see that yet in refinish it’s probably as we go through the second quarter and into the second half of the year.

Okay, great. And then the second question, if I may, on the glass business -- or a two-part question. Can you comment on how much of the cost relief there was fixed versus variable? Just trying to get a sense of how durable it could be through the year. And then second piece, does the improved profitability influence your thinking on potential monetization of that business

Well, I would say that there has been improvement in our flat glass business in a number of let’s call it P&L areas, so fixed cost obviously we got helped by the lack of a big cold repair that we had last year in our Wichita Falls, Texas plant. We also completed the sale of Mount Zion facility in Illinois in the third quarter, so the absence of those two elements helped, so those were fixed cost improvements. We also saw pricing and demand improvement too. So I would say that, the numbers that you’re looking at are sustainable of these are not one-offs and I think we have changed the direction of the business, we’re at little bit of an inflection point, as you know this is a commercial construction business and that market has improved. Glass supply and demand is much more imbalanced, we’ve gotten some pricing, we’ve done well in the marketplace, natural gas cost and others have been under control. So I think we have some elements here for a sustained performance at this level and I think for us as always with this business, we are – we will listen if there are opportunities to create value for the shareholders in any transactions and at this point I think we’re – we are just continuing to execute on opportunities in front of us in the marketplace for the business and we’re optimistic that this can continue.

Fair enough. Thank you, Chuck.

Okay, Kevin.

Your next question comes from the line of Frank Mitsch with Wells Fargo. Please proceed.

Congrats on a nice start to the year. I wanted to come back on the raw material question. I know that one of your competitors was talking about seeing a roughly mid-single-digit type of improvement here in the middle of the year, and actually accelerating towards year-end. Are those the sort of figures that folks should think about with PPG, as well?

I’m not sure, I haven’t listened or seen any of the reports on any other industry or competitive activity. I would say as I indicated we do expect more help as we go through the year and in the second half, I would say my comments would be that sounds a little on the aggressive side. We’ve seen the oil prices move back up a little bit here and I would say that we expect some help but it not to the magnitude that you mentioned.

All right. That's helpful. And I noticed that packaging was a nice mid-single-digit type of improvement there. What portion of that would you ascribe to BPA-NI? And what's your sense of the competitive balance there? And how should we think about that part of your portfolio?

I think for us, it is certainly a good sign and some of those volume gains were in BPA non-intent or BPA-free coating. So I think it should give you some confidence as an investor that, we’re performing and delivering on the technology challenges for the BPA-free material, we feel pretty confident that we’re well positioned and I think you’re going to continue to see conversions in the food and beverage industry overall on the this technology. So I think it bodes well for us although I would say, we see other competitors active in this basis, well but I think we feel positive with volume growth that you’ve seen and I think it’s an indication that our technology is going to be, is going to deliver growth in the market.

Thank you so much.

Your next question comes from the line of Bob Koort with Goldman Sachs. Please proceed.

I was wondering if you could talk on the North American architectural about -- do you have the confidence that there was no underlying issues around the big box distribution channel? And have you seen any changes in DIY versus contractors? That's my first. And then second, can you talk a little bit about how your PPG-owned stores and Akzo -- or Glidden stores, with the rebranding -- if there's any changes in what you've seen in dynamics there. Thanks.

Bob, this is Michael starting with the company owned stores, we merge that the network together so you can’t really pull out legacy Akzo versus the old PPG and as we said in our opening remarks, they were up mid single digits. So we were happy with that and when we look at the big boxes, we had some pipeline fill last year especially with the stain side we have nice stain position and that’s an early win there, we did not have that pipeline fill in this year. Overall we think, when we look at the sell out from the big boxes it is progressing at a normal rate obviously the slow start to the paint season given the weather but we saw acceleration starting in mid March.

More your second question Bob that we covered.

Yeah, that was the…

It was just around whether or not you've seen any variation in DIY versus contractor trends. And then in your own big box business, whether there's any regional -- or of any underlying trends, or it was really just an inventory management and tough comp issue.

No, I think it was all – I think the inventory is a one-time and we’re seeing no material differences and how it goes out in the marketplace. So we’re happy with what we’re seeing and the dealers and the contractors all performing what I would say as a reasonable marketplace.

Your next question comes from the line of Laurence Alexander with Jefferies. Please proceed.

Can you give a little bit more detail on how much of a lift you should have next year from not having the pipeline adjustments in the North American architectural?

Hi Laurence, this is Vince. Pipeline adjustments for last year, so it is just not recur so we actually have pipeline fills or higher levels of activity in the first quarter of 2014 and that’s what created the difficult comp.

And then the price mix, can you give a little bit of regional flavor, how that was doing in Europe and Asia?

Prices generally for the company in all regions were basically flat, the only favorable mix I’d say we had from an overall perspective was in our flat glass business where we moved up, as commercial construction glass is more a value added product versus residential glass. So, we are moving up the spectrum as we saw more commercial construction into the market based on demand.

Thank you.

Your next question comes from the line of Jeff Zekauskas with JP Morgan. Please proceed.

Can you talk about the progress of your titanium dioxide chloride technology in China -- whether it's being well commercialized or well developed, or whether it isn't?

Hey Jeff, this is Michael. The plant is in the startup mode. We expect to get commercial quality product in the second half of the second quarter and we will be looking at that. So far what we have seen, we have been pleased with everything and we’re happy so far.

Okay. And as my follow-up question, when you think about the changes in suppliers at Lowe's, where they've gone from two paint suppliers to three, do you think that that's a one-off event at Lowe's? Or do you think it's part of -- or it could be part of a larger industry trend as the coatings industry consolidates?

Jeff, I don’t know that we want to get into specific customers on this. Certainly Lowe’s made decision and we would expect the other folks to try their own business. So, we will wait and see how that works out.

And just as a reminder, as we said on the first in January, you know, with respect to our own center customers for calendar year 2015, we picked up a little bit more product.

Okay great. Thanks so much.

Your next question comes from the line of Vincent Andrews with Morgan Stanley. Please proceed.

Just a question on Comex. Just looking at your comments on exceeding your net sales range from January, I guess that's in the face of probably some challenging FX there. Could you just talk about what the dynamics are that allowed you to exceed the range?

Hi, Michael again. I think we have a strong market share down there. We have increased the number of concessionaires and when we bought the business from 3740, we are up at 3,900. We are adding a concessionaire every other day and that gives us additional penetration to the marketplace. We also have the strongest brand in Mexico and the government there some election spending or actually some elections later in the year and the local governments are spending some money to help beautify their local areas. So, that’s also positive. I think there are number of factors that are driving this.

Okay. Thanks very much. I’ll leave it there.

Let me just add to what Michael said. So we – our anticipation in Comex as we are going to have a total opening of concessionaires this year somewhere between 116 to 119 new locations. Again as Michael said, one every other day.

Your next question comes from the line of Don Carson with Susquehanna financials. Please proceed.

Thank you. Chuck, a question on the trade-off between FX and raws. You outlined that FX will be almost twice what you thought it would be on the January call. You are a little more optimistic on the raw material outlook, perhaps not as much as one of your competitors. But do those two largely balance each other off? That is, more raw material cost reductions offsetting that increased FX headwind?

Well, if you look we were down 7% in currency at least at the top line and we were down much less than that on raw material side. Although not all the currency impacts our bottom line. So, certainly I think they are offsetting to a certain extent and we think that unfortunately currency is going to be more of a headwind here in the second quarter if these currency trends continue and in the second half it’s a little early to say what we’re going to see on currency but we think we will get little more help on raw materials. So, we’ve got some, let’s call them countervailing trends here. They didn’t offset indirectly the same ways in the first quarter and it’s going to be how we see this thing play out both on currencies and very unpredictable. We think there is a broader trend in raw materials, but not in a relatively moderate way.

And Don, just one. This is Frank. Keep in mind that on the cost savings side, I think we do get in our cost structure – including those savings we anticipate to get now through 2017 due to restructuring program that’s real economic benefit and structural benefit to our structure whereas on the currency side only about 10% of that goes to the bottom line, because of the natural hedge we have by making our product generally where we sell it. And that’s a not really an economic exposure as much as it’s just a translation exposure from the foreign currency into U.S. dollars. The transaction exposure, which would be the real economic impact is very limited and we do hedge a portion of that transaction exposure where we buy in one currency and sell in another currency. But that’s very, very limited. So we just want to clarify that.

Okay. Thank you.

Your next question comes from the line of P.J. Juvekar with Citi. Please proceed.

Yes, hi good afternoon. I have a question on automotive refinish. Can you talk about the dynamics there, as one of your new competitors seems to be gaining some share? So just talk about what the dynamics there, and what kind of organic growth are you seeing in refinish?

P. J. automotive refinish in the developed markets is a relatively mature market. And we have I would say a very incomplete industry growth data in terms of the actual refinish market. But I would say that for us in terms of the market trends this has always been a competitive market there are few large global players we feel that as PPG, we’re holding our own in the developed market regions and we’re continuing to grow in the developing markets like China and India where these are the fastest growing car parks and automotive refinish markets. So yes it’s a competitive market, we got a few large global players, we don’t see that competitive intensity decreasing, but we feel as PPG we’re well positioned and certainly maintaining our leadership in the industry.

If I can add just Chuck’s comments if you look at the technology in the marketplace everything is moving toward a water based technology. I think from our observations we’re the leader in that technology both in the U.S. and in Europe. So I think we’re well positioned from a technology perspective as well.

Thank you. And then I want to go back to Lowe's and just Lowe’s introduced this new HGTV brand. And I know Olympic is at a lower price point. But what is the risk that a person who walks into a Lowe store to buy Olympic paint could trade up to buy HGTV. I mean do you see any possible impact there?

P. J. I think it’s too early to speculate and I think Lowe’s would like to be the one comment on that.

Thank you.

Your next question comes from the line of James Sheehan with SunTrust Robinson Humphrey. Please proceed.

Thank you. On your architectural coatings sales in the US, if you exclude the impact of the pipeline fills, what would sales have done in percentage terms in the first quarter?

James this is Vince. So if you look we had good volume growth as Michael mentioned in the company owned stores and comparable growth in the independent distribution market and that was just offset with the – I will call it the negative year-over-year comps with respect to the pipeline fill. The store – the sales in DIY were positive and at the door and we feel good about that going forward. The other thing that was impactful for that business from a sales perspective was currency in Canada was negative, we have a big Canadian business. Volumes in Canada were positive, but currency was negative. So again we’re pleased with our performance to-date early in the seasons as Michael mentioned and we did our kind of a different weather pattern, weaker in February, stronger in March.

Okay. And on your commercial construction comments on the glass business, you have often talked about that flowing through into the coatings business over time. Are you starting to see that pick up in coatings on the commercial construction side?

Yes Jim, this is Michael. We’re starting to see that it's a little early, because as you know glass goes in the building it’s generally can be anywhere from 12 to 18 months before the paint goes in and upon the size of the building. So it's a little early, but we certainly expect that to flow through as well.

Thank you very much.

Your next question comes from the line of John Roberts with UBS. Please proceed.

Good afternoon. Frank, does free cash flow get as impacted by foreign exchange as earnings? Or are there things you can do with working capital and capital spending, some of the offsets in the free cash flow, to sort of dampen out the foreign exchange on free cash?

Yes, we were irrespective of FX, we're always looking at ways to improve working capital obviously Q1 is usually the weakest from a cash flow perspective as you build a little bit of working capital, perhaps some of the payables from fourth quarter and build up over the working capital and where receivable as things pull up for second quarter. But we do have initiatives underway and we've made a lot of progress in terms of reducing pass to receivables, we have aggressive targets and try to streamline our inventory levels as well as complexity in each of our businesses during the year we’ll see progress more progress in the latter half of the year. And then payables are in pretty good shape. Yes, you do see some impact on the translation, but actually I think we're going to have adequate initiatives to offset and make some progress on the working capital and move through the year.

Okay. And then just secondly, is your strength in automotive OEM new wins as strong as the strength that you're currently seeing in the existing business?

It's balanced between what you have in some markets where we did well such as Europe these are - I think - we’re seeing a ramp up of some of the customers that have been maybe most affected by this kind of long recession in Europe so that we’re customer based in Europe you don’t have as many new plants there. So these are your traditional customers that are now starting to do a little better as we see this pick up in sales, especially in some markets like Southern Europe where Fiat is starting to grow faster. And in Asia and in China and India for example that's a combination of new wins, but primarily these are new plants that are going in with global and domestic competitors both there and in India. So I’d say that’s more of a combination of new plants and existing market growth.

Thank you.

Your next question comes from the line of Arun Viswanathan with RBC Capital Markets. Please proceed.

I guess I just wanted to clarify, first, if you can give us some guidance on what interest expense would look like for the rest of the year with the euro refinancing.

Sure. The interest expense was down and of course the numbers we gave was on a net basis went from $35 million to about $18 million in the first quarter as we look out through the rest of the year interest expense will be down between the $20 million to $25 million per quarter. Our weighted average interest rate in our portfolio right now, we've got debt about $4.6 million weighted average interest rate about 2.5%.

And Arun, so we did refinance as we said on our press release and Chuck's comments in the fourth quarter we also did put in a $1.3 billion of debt in March. So we had no interest cost for that in January, February so there will be a step up in Q2 of $4 million to $5 million verse Q1 partially rated to that. So mid-20s – mid to low 20s would be a good number on a go forward basis.

And that’s a net interest expense offset against interest income and the cash balances.

Okay. Great, thanks. And then just taking that a step further, you guys obviously have quite a bit of balance sheet flexibility here. Can you give us a little update on the M&A pipeline? I know you completed two in the first quarter. Anything else look interesting, maybe in industrial coatings in Europe, right now?

We have an active M&A pipeline, we don’t have any mega deals out there those don’t come along very often, but we have some good discussions going on. We announced the agreement although we have not closed yet on the French aerospace acquisition Le Joint Français or LJF from Total so that’s one that we are continuing to work and we hope to be able to close that in the second half of the year. And we have some other deals that we’re currently discussing and we hope that we’ll be able to announce some things as we go through the year, but it’s an active pipeline still we think good opportunities.

Great, thanks. And if I may, just one more on the Comex opportunity. Is there any way you could quantify the revenue opportunity, now selling some of those legacy PPG products? Thanks.

Arun, Vince, again. We’re suddenly working closely with the concessionaires on what products they like, what products we’re actually selling in the market. We really need to go through a paint season to fully understand the acceptance of the products and its different obviously by geographic region in Mexico so we do want to give some sidelines for you guys. At some point it’s just too premature right now to do that.

Okay. Thanks.

Your next question comes from the line of Nils Wallin with CLSA. Please proceed.

Yes. Good afternoon and thanks for taking my question. Industrial coatings revenues were down, but profitability was up year-over-year. Would you help us understand what happened there? Did you take some low-margin business out, or did you take some costs out? Just curious as to how you achieved such a solid result.

This was productivity and we continued to perform well in the businesses that are in industrial coating so lot of cost down restructuring benefits from prior years and good growth of profitable business in our automotive OEM industrial coating segments.

And then Nils, the 2% decline I think in sales revenue really was 7% negative currency, 5% positive OEMs for the segment so that 5% volume dragging along nice incremental margin as we’ve talked about in the past for the reason Chuck just mentioned. So I think that really hastened our improvement.

Yes, understood. Understood. I guess last year, Europe saw something like a 20% earnings growth on volumes that were starting to improve. Now it sounds like, in general, you are becoming incrementally positive on the region, some recovery. Should we expect that type of -- or better type of earnings growth in Europe on a constant currency basis for 2015?

Well, I would say that remember we should still see earnings growth improvement in Europe primarily related to our industrial coating segment. So we have not yet seen strong improvement on the construction side of or the performance coating side of the business. But we think there will be some modest growth there and we’re obviously working on these restructuring actions that should help us late in the year.

And keep in mind too that any incremental volume should accretive to at a pretty nice margin closer to the PC margin than the EBIT margin because the fact that we’re still 15 to 20 percentage points below peak volumes so we don’t have to add much of anything in terms of fixed supply chain cost to get that volume and in fact we continue to find streamlining opportunities on the administrative side. So any volume we do get – when we get in the commercial spaces on should accrue good margin.

Understood. And just one more, if I may. I noticed in the commentary the $1.5 billion to $2.5 billion of potential cash deployment over the next 12 to 18 months was removed. Was that deliberate? Although you had obviously highlighted continued cash deployment issues or goals -- so was that deliberate? Have you changed your view about how much cash will be deployed?

The cash flow is still working as it did when we made that disclosure and that disclosure and guidance still does apply.

Great. Thanks so much.

Thanks Nils.

Ladies and gentlemen, we do have time for one final question. Your final question comes from the line of Kevin Hocevar with Northcoast Research. Please proceed.

Hey, good afternoon, everybody. On the auto OEM side of things, you continue to really significantly outperform the industry, which seems to be the norm at this point. So I'm wondering if you could comment on what's driving that. I know technology has something to do with it. Is the gap not closing between the competitors? Do you continue to innovate, and they are not keeping up? Are you are aligned with the right customers? Wondered if you could just comment on that.

I think we’ve been – it’s a combination of both of those. I think technology and service our performance with existing customers has gone extremely well with the new technologies. We are the largest automotive OEM competitor in the space. We have a broad geographic or global footprint. So we’re able to I think deliver a value around the world whether you’re talking about North America or Europe or Asia or China any of those markets. So I think we’ve been very well positioned both from a technology service and we have a very broad based customer – customer array. And in China as an example we’ve seen both the global OEMs as well as the Chinese domestic players growing and we’ve been positioned on both sides of that so I think it’s a combination.

Okay. And then just quickly on the US architectural paint business. I noticed the independent dealer channel was up to mid-single-digits, which is kind of strong for that channel. So just wondering if you had any new business wins, or it just happened to have a good quarter.

No, we had no significant new business wins, but I do think we got a fast start to the year.

Okay. Thank you very much.

Thank you, Kevin.

I would now like to turn the conference over to Mr. Morales for closing remarks.

Thank you. Once again I want to like to thank everybody for all of their interest in PPG and their time and attention. If there is any further questions on financials please call me in Investor Relations function. Thank you.