Company Grew First-Half Net Sales by 11% on Strong Contribution from
all Three Businesses
-
Roofing produced EBIT of $155 million in the quarter, with EBIT
margins of 23%
-
Composites delivered record quarterly EBIT of $84 million, with EBIT
margins of 16%
-
Insulation increased net sales by 6% and generated EBIT of $29 million
in the quarter
-
Pittsburgh Corning acquisition closed at quarter-end for approximately
$560 million
-
Company expects 2017 adjusted EBIT of at least $825 million
TOLEDO, Ohio--(BUSINESS WIRE)--
Owens Corning (NYSE: OC) today reported consolidated net sales of $1.60
billion in second-quarter 2017, compared with net sales of $1.55 billion
in second-quarter 2016, an increase of 3%.
Second-quarter 2017 net earnings attributable to Owens Corning were $96
million, or $0.85 per diluted share, compared with $138 million, or
$1.19 per diluted share, during the comparable quarter in 2016. For
first-half 2017, net earnings were $197 million. Second-quarter 2017
adjusted earnings were $136 million, or $1.20 per diluted share,
compared with $151 million, or $1.30 per diluted share, during the same
period one year ago (See Use of Non-GAAP Measures, See Table 3).
“Owens Corning built upon the performance achieved in the first quarter
and delivered strong second-quarter results. Through the first half, the
company produced adjusted EBIT of $401 million and continues to generate
strong operating cash flow,” said Chairman and Chief Executive Officer
Mike Thaman. “In addition, we were pleased to complete the acquisition
of Pittsburgh Corning and its well-recognized FOAMGLAS®
product line, which expands the geographic footprint and product
portfolio of our Insulation business.”
Consolidated Second-Quarter 2017 Results
-
Owens Corning sustained a high level of safety performance in the
second quarter, with a recordable incident rate of 0.48, compared with
0.54 in second-quarter 2016, representing an 11% improvement.
-
Reported earnings before interest and taxes (EBIT) for second-quarter
2017 were $190 million, compared with $240 million during the same
period in 2016. Adjusted EBIT in second-quarter 2017 was $230 million,
compared with $253 million in 2016 (See Table 2).
-
During the quarter, the company incurred $40 million of net expenses
which were excluded from adjusted EBIT. Charges associated with
pension risk mitigation, the acquisition of Pittsburgh Corning, and
the decisions not to rebuild sub-scale furnaces in the Composites
business were partially offset by income from a legal settlement.
-
During second-quarter 2017, Owens Corning repurchased 1.0 million
shares of its common stock for $61 million. As of the end of the
quarter, 7.8 million shares were available for repurchase under the
current authorization.
Senior Notes Offering
-
On June 26, 2017, the company issued a new 30-year bond of $600
million at 4.3% and launched a tender offer for all of the outstanding
bonds maturing in 2019, and up to $140 million of bonds maturing in
2036. The new debt structure improves the company’s debt maturity
profile and liquidity. In association with the tender offer, the
company expects to incur a loss on debt extinguishment of
approximately $70 million in third-quarter 2017.
2017 Outlook
-
The company continues to expect an environment consistent with
consensus expectations for U.S. housing starts and moderate global
industrial production growth.
-
In Roofing, second-quarter volumes remained strong and first-half
shingle shipments were up mid-single digits. The company now expects
that continued growth in new construction and reroof demand will
offset potential declines from storm activity, resulting in a
relatively flat market for 2017.
-
In Composites, the business has experienced strong volume performance
during the first half of the year. The company now expects EBIT growth
of about $30 million, with the improved outlook primarily driven by
stronger volume expectations.
-
In Insulation, the company now expects to deliver revenue growth of
more than $250 million and EBIT of about $185 million. This improved
outlook is driven by successful pricing actions in the U.S.
residential Insulation business and the benefit of the Pittsburgh
Corning acquisition, partially offset by the greater than expected
start-up impact of the recently commissioned mineral wool facility.
-
The company estimates an effective tax rate of 32% to 34%, and a cash
tax rate of 10% to 12% on adjusted pre-tax earnings, due to the
company’s $1.8 billion U.S. tax net operating loss carryforward.
-
The company expects general corporate expenses to be between $135
million and $140 million in 2017. Capital additions in 2017 are
expected to total approximately $385 million. Interest expense is
expected to be about $110 million.
-
For full-year 2017, the company expects adjusted EBIT of at least $825
million, as growth accelerates in the second half of the year.
Next Earnings Announcement
Third-quarter 2017 results will be announced on Wednesday, October 25,
2017.
Second-Quarter 2017 Conference Call and
Presentation
Wednesday, July 26, 2017
11 a.m. Eastern Daylight Time
All Callers
Live dial-in telephone number: U.S. 1.888.317.6003; Canada
1.866.284.3684; and other international +1.412.317.6061.
Entry
number: 480-9731 (Please dial in 10-15 minutes before conference call
start time)
Live webcast: http://services.choruscall.com/links/oc170726.html
Telephone and Webcast Replay
Telephone replay will be available one hour after the end of the call
through August 2, 2017. In the U.S., call 1.877.344.7529. In Canada,
call 1.855.669.9658. In other international locations, call
+1.412.317.0088.
Conference replay number: 101-095-83
Replay
available at http://services.choruscall.com/links/oc170726.html
Webcast
replay available until July 26, 2018
About Owens Corning
Owens Corning (NYSE: OC) develops, manufactures, and markets insulation,
roofing, and fiberglass composites. Global in scope and human in scale,
the company’s market-leading businesses use their deep expertise in
materials, manufacturing and building science to develop products and
systems that save energy and improve comfort in commercial and
residential buildings. Through its glass reinforcements business, the
company makes thousands of products lighter, stronger and more durable.
Ultimately, Owens Corning people and products make the world a better
place. Based in Toledo, Ohio, Owens Corning posted 2016 sales of $5.7
billion and employs 17,000 people in 33 countries. It has been a Fortune
500® company for 63 consecutive years. For more information,
please visit www.owenscorning.com.
Use of Non-GAAP Measures
Owens Corning uses non-GAAP measures in its earnings press release that
are intended to supplement investors’ understanding of the company’s
financial information. These non-GAAP measures include EBIT, adjusted
EBIT, adjusted earnings, adjusted diluted earnings per share
attributable to Owens Corning common stockholders (“adjusted EPS”),
adjusted pre-tax earnings, and free cash flow. When used to report
historical financial information, reconciliations of these non-GAAP
measures to the corresponding GAAP measures are included in the
financial tables of this press release. Specifically see Table 2 for
EBIT and adjusted EBIT, Table 3 for adjusted earnings and adjusted EPS,
and Table 8 for free cash flow.
For purposes of internal review of Owens Corning’s year-over-year
operational performance, management excludes from net earnings
attributable to Owens Corning certain items it believes are not
representative of ongoing operations. The non-GAAP financial measures
resulting from these adjustments (including adjusted EBIT, adjusted
earnings, adjusted EPS and adjusted pre-tax earnings) are used
internally by Owens Corning for various purposes, including reporting
results of operations to the Board of Directors, analysis of
performance, and related employee compensation measures. Management
believes that these adjustments result in a measure that provides a
useful representation of its operational performance; however the
adjusted measures should not be considered in isolation or as a
substitute for net earnings attributable to Owens Corning as prepared in
accordance with GAAP.
Free cash flow is a non-GAAP liquidity measure used by investors,
financial analysts and management to help evaluate the company's ability
to generate cash to pursue opportunities that enhance shareholder value.
Free cash flow is not a measure of residual cash flow available for
discretionary expenditures due to the company’s mandatory debt service
requirements. Free cash flow is used internally by the company for
various purposes, including reporting results of operations to the Board
of Directors of the company and analysis of performance. Management
believes that this measure provides a useful representation of our
operational performance and liquidity; however the measure should not be
considered in isolation or as a substitute for net cash flow provided by
operating activities as prepared in accordance with GAAP.
When the company provides forward-looking expectations for non-GAAP
measures (adjusted EBIT and adjusted pre-tax earnings), the most
comparable GAAP measures and a reconciliation between the non-GAAP
expectations and the corresponding GAAP measures are generally not
available without unreasonable effort due to the variability, complexity
and limited visibility of the adjusting items that would be excluded
from the non-GAAP measures in future periods. The variability in timing
and amount of adjusting items could have significant and unpredictable
effect on our future GAAP results.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. These forward-looking
statements are subject to risks, uncertainties and other factors and
actual results may differ materially from those results projected in the
statements. These risks, uncertainties and other factors include,
without limitation: relationships with key customers; levels of
residential and commercial construction activity; competitive and
pricing factors; levels of global industrial production; demand for our
products; industry and economic conditions that affect the market and
operating conditions of our customers, suppliers or lenders; domestic
and international economic and political conditions, including new
legislation, policies or other governmental actions by the U.S.
Presidential administration and Congress; foreign exchange and commodity
price fluctuations, our level of indebtedness; weather conditions;
availability and cost of credit; availability and cost of energy and raw
materials; issues involving implementation and protection of information
technology systems; labor disputes; legal and regulatory proceedings,
including litigation and environmental actions; our ability to utilize
net operating loss carry-forwards; research and development activities
and intellectual property protection; interest rate movements; uninsured
losses; issues related to acquisitions, divestitures and joint ventures;
achievement of expected synergies, cost reductions and/or productivity
improvements; defined benefit plan funding obligations; price volatility
in certain wind energy markets in the U.S.; and factors detailed from
time to time in the company’s Securities and Exchange Commission
filings. The information in this news release speaks as of July 26,
2017, and is subject to change. The company does not undertake any duty
to update or revise forward-looking statements except as required by
federal securities laws. Any distribution of this news release after
that date is not intended and should not be construed as updating or
confirming such information.
Owens Corning Investor Relations News
Table 1 Owens Corning and Subsidiaries Consolidated
Statements of Earnings (unaudited) (in
millions, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
NET SALES
|
|
$
|
1,597
|
|
|
$
|
1,545
|
|
|
$
|
3,075
|
|
|
$
|
2,776
|
COST OF SALES
|
|
1,188
|
|
|
1,129
|
|
|
2,323
|
|
|
2,088
|
Gross margin
|
|
409
|
|
|
416
|
|
|
752
|
|
|
688
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
Marketing and administrative expenses
|
|
155
|
|
|
151
|
|
|
297
|
|
|
285
|
Science and technology expenses
|
|
21
|
|
|
21
|
|
|
42
|
|
|
40
|
Other expenses, net
|
|
43
|
|
|
4
|
|
|
53
|
|
|
7
|
Total operating expenses
|
|
219
|
|
|
176
|
|
|
392
|
|
|
332
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
190
|
|
|
240
|
|
|
360
|
|
|
356
|
Interest expense, net
|
|
27
|
|
|
29
|
|
|
53
|
|
|
52
|
EARNINGS BEFORE TAXES
|
|
163
|
|
|
211
|
|
|
307
|
|
|
304
|
Income tax expense
|
|
67
|
|
|
73
|
|
|
110
|
|
|
107
|
Equity in net earnings of affiliates
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
NET EARNINGS
|
|
96
|
|
|
139
|
|
|
197
|
|
|
198
|
Net earnings attributable to noncontrolling interests
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING
|
|
$
|
96
|
|
|
$
|
138
|
|
|
$
|
197
|
|
|
$
|
195
|
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON
STOCKHOLDERS
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.86
|
|
|
$
|
1.20
|
|
|
$
|
1.76
|
|
|
$
|
1.69
|
Diluted
|
|
$
|
0.85
|
|
|
$
|
1.19
|
|
|
$
|
1.74
|
|
|
$
|
1.67
|
Dividend
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
$
|
0.40
|
|
|
$
|
0.36
|
WEIGHTED AVERAGE COMMON SHARES
|
|
|
|
|
|
|
|
|
Basic
|
|
111.6
|
|
|
115.1
|
|
|
112.0
|
|
|
115.3
|
Diluted
|
|
113.1
|
|
|
116.4
|
|
|
113.5
|
|
|
116.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2 Owens Corning and Subsidiaries EBIT
Reconciliation Schedules (unaudited)
|
|
|
|
|
|
Adjusting income (expense) items are shown in the table below (in
millions):
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Restructuring costs
|
|
$
|
(29
|
)
|
|
$
|
(3
|
)
|
|
$
|
(29
|
)
|
|
$
|
(3
|
)
|
Acquisition-related costs
|
|
(10
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|
(4
|
)
|
Recognition of InterWrap inventory fair value step-up
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
Litigation settlement gain, net of legal fees
|
|
29
|
|
|
—
|
|
|
29
|
|
|
—
|
|
Pension settlement losses
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
Total adjusting items
|
|
$
|
(40
|
)
|
|
$
|
(13
|
)
|
|
$
|
(41
|
)
|
|
$
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
The reconciliation from net earnings attributable to Owens Corning
to EBIT and Adjusted EBIT is shown in the table below (in
millions):
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING
|
|
$
|
96
|
|
|
$
|
138
|
|
|
$
|
197
|
|
|
$
|
195
|
|
Net earnings attributable to noncontrolling interests
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
NET EARNINGS
|
|
96
|
|
|
139
|
|
|
197
|
|
|
198
|
|
Equity in net earnings of affiliates
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Income tax expense
|
|
67
|
|
|
73
|
|
|
110
|
|
|
107
|
|
EARNINGS BEFORE TAXES
|
|
163
|
|
|
211
|
|
|
307
|
|
|
304
|
|
Interest expense, net
|
|
27
|
|
|
29
|
|
|
53
|
|
|
52
|
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
190
|
|
|
240
|
|
|
360
|
|
|
356
|
|
Adjusting items from above
|
|
(40
|
)
|
|
(13
|
)
|
|
(41
|
)
|
|
(15
|
)
|
ADJUSTED EBIT
|
|
$
|
230
|
|
|
$
|
253
|
|
|
$
|
401
|
|
|
$
|
371
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3 Owens Corning and Subsidiaries EPS
Reconciliation Schedules (unaudited) (in
millions, except per share data)
|
|
|
|
|
|
A reconciliation from net earnings attributable to Owens Corning
to adjusted earnings and a reconciliation from diluted earnings
per share to adjusted diluted earnings per share are shown in the
tables below:
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
RECONCILIATION TO ADJUSTED EARNINGS
|
|
|
|
|
|
|
|
|
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING
|
|
$
|
96
|
|
|
$
|
138
|
|
|
$
|
197
|
|
|
$
|
195
|
|
Adjustment to remove adjusting items (a)
|
|
40
|
|
|
13
|
|
|
41
|
|
|
15
|
|
Adjustment to remove tax benefit on adjusting items (b)
|
|
(9
|
)
|
|
(4
|
)
|
|
(9
|
)
|
|
(5
|
)
|
Adjustment to tax expense to reflect pro forma tax rate (c)
|
|
9
|
|
|
4
|
|
|
4
|
|
|
8
|
|
ADJUSTED EARNINGS
|
|
$
|
136
|
|
|
$
|
151
|
|
|
$
|
233
|
|
|
$
|
213
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION TO ADJUSTED DILUTED EARNINGS PER SHARE
ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING
COMMON STOCKHOLDERS
|
|
$
|
0.85
|
|
|
$
|
1.19
|
|
|
$
|
1.74
|
|
|
$
|
1.67
|
|
Adjustment to remove adjusting items (a)
|
|
0.35
|
|
|
0.11
|
|
|
0.36
|
|
|
0.13
|
|
Adjustment to remove tax benefit on adjusting items (b)
|
|
(0.08
|
)
|
|
(0.03
|
)
|
|
(0.08
|
)
|
|
(0.04
|
)
|
Adjustment to tax expense to reflect pro forma tax rate (c)
|
|
0.08
|
|
|
0.03
|
|
|
0.03
|
|
|
0.07
|
|
ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWENS CORNING
COMMON STOCKHOLDERS
|
|
$
|
1.20
|
|
|
$
|
1.30
|
|
|
$
|
2.05
|
|
|
$
|
1.83
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION TO DILUTED SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding used for basic
earnings per share
|
|
111.6
|
|
|
115.1
|
|
|
112.0
|
|
|
115.3
|
|
Non-vested restricted and performance shares
|
|
1.2
|
|
|
0.8
|
|
|
1.2
|
|
|
0.8
|
|
Options to purchase common stock
|
|
0.3
|
|
|
0.5
|
|
|
0.3
|
|
|
0.4
|
|
Weighted-average number of shares outstanding and common equivalent
shares used for diluted earnings per share
|
|
113.1
|
|
|
116.4
|
|
|
113.5
|
|
|
116.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Please refer to Table 2 "EBIT Reconciliation Schedules" for
additional information on adjusting items.
|
(b)
|
|
The tax impact of adjusting items is based on our expected tax
accounting treatment and rate for the jurisdiction of each adjusting
item.
|
(c)
|
|
To compute adjusted earnings, we apply a full year pro forma
effective tax rate to each quarter presented. For 2017, we have used
a full year pro forma effective tax rate of 33%, which is the
mid-point of our 2017 effective tax rate guidance of 32% to 34%. For
comparability, in 2016, we have used an effective tax rate of 33%,
which was our 2016 effective tax rate excluding the reversal of a
valuation allowance against certain European net deferred tax assets.
|
|
|
|
Table 4 Owens Corning and Subsidiaries Consolidated
Balance Sheets (unaudited) (in millions,
except per share data)
|
|
|
|
|
|
ASSETS
|
|
June 30, 2017
|
|
December 31, 2016
|
CURRENT ASSETS
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
199
|
|
|
$
|
112
|
|
Receivables, less allowances of $12 at June 30, 2017 and $9 at
December 31, 2016
|
|
915
|
|
|
678
|
|
Inventories
|
|
792
|
|
|
710
|
|
Assets held for sale
|
|
10
|
|
|
12
|
|
Other current assets
|
|
72
|
|
|
74
|
|
Total current assets
|
|
1,988
|
|
|
1,586
|
|
Property, plant and equipment, net
|
|
3,336
|
|
|
3,112
|
|
Goodwill
|
|
1,484
|
|
|
1,336
|
|
Intangible assets, net
|
|
1,361
|
|
|
1,138
|
|
Deferred income taxes
|
|
321
|
|
|
375
|
|
Other non-current assets
|
|
200
|
|
|
194
|
|
TOTAL ASSETS
|
|
$
|
8,690
|
|
|
$
|
7,741
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
1,113
|
|
|
$
|
960
|
|
Long-term debt – current portion
|
|
3
|
|
|
3
|
|
Total current liabilities
|
|
1,116
|
|
|
963
|
|
Long-term debt, net of current portion
|
|
2,686
|
|
|
2,099
|
|
Pension plan liability
|
|
372
|
|
|
367
|
|
Other employee benefits liability
|
|
240
|
|
|
221
|
|
Deferred income taxes
|
|
75
|
|
|
36
|
|
Other liabilities
|
|
186
|
|
|
164
|
|
Redeemable equity
|
|
—
|
|
|
2
|
|
OWENS CORNING STOCKHOLDERS’ EQUITY
|
|
|
|
|
Preferred stock, par value $0.01 per share (a)
|
|
—
|
|
|
—
|
|
Common stock, par value $0.01 per share (b)
|
|
1
|
|
|
1
|
|
Additional paid in capital
|
|
3,988
|
|
|
3,984
|
|
Accumulated earnings
|
|
1,529
|
|
|
1,377
|
|
Accumulated other comprehensive deficit
|
|
(634
|
)
|
|
(710
|
)
|
Cost of common stock in treasury (c)
|
|
(908
|
)
|
|
(803
|
)
|
Total Owens Corning stockholders’ equity
|
|
3,976
|
|
|
3,849
|
|
Noncontrolling interests
|
|
39
|
|
|
40
|
|
Total equity
|
|
4,015
|
|
|
3,889
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
8,690
|
|
|
$
|
7,741
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
10 shares authorized; none issued or outstanding at June 30, 2017,
and December 31, 2016
|
(b)
|
|
400 shares authorized; 135.5 issued and 111.3 outstanding at June
30, 2017; 135.5 issued and 112.7 outstanding at December 31, 2016
|
(c)
|
|
24.2 shares at June 30, 2017, and 22.8 shares at December 31, 2016
|
|
|
|
Table 5 Owens Corning and Subsidiaries Consolidated
Statements of Cash Flows (unaudited) (in
millions)
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
|
Net earnings
|
|
$
|
197
|
|
|
$
|
198
|
|
Adjustments to reconcile net earnings to cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
168
|
|
|
158
|
|
Deferred income taxes
|
|
73
|
|
|
83
|
|
Provision for pension and other employee benefits liabilities
|
|
39
|
|
|
3
|
|
Stock-based compensation expense
|
|
20
|
|
|
17
|
|
Other non-cash
|
|
2
|
|
|
(5
|
)
|
Changes in operating assets and liabilities
|
|
(74
|
)
|
|
(117
|
)
|
Pension fund contributions
|
|
(16
|
)
|
|
(9
|
)
|
Payments for other employee benefits liabilities
|
|
(9
|
)
|
|
(9
|
)
|
Other
|
|
(8
|
)
|
|
7
|
|
Net cash flow provided by operating activities
|
|
392
|
|
|
326
|
|
NET CASH FLOW USED FOR INVESTING ACTIVITIES
|
|
|
|
|
Cash paid for property, plant and equipment
|
|
(170
|
)
|
|
(187
|
)
|
Proceeds from the sale of assets or affiliates
|
|
3
|
|
|
—
|
|
Investment in subsidiaries and affiliates, net of cash acquired
|
|
(561
|
)
|
|
(450
|
)
|
Other
|
|
3
|
|
|
2
|
|
Net cash flow used for investing activities
|
|
(725
|
)
|
|
(635
|
)
|
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES
|
|
|
|
|
Proceeds from long-term debt
|
|
588
|
|
|
—
|
|
Proceeds from senior revolving credit and receivables securitization
facilities
|
|
337
|
|
|
434
|
|
Proceeds from term loan borrowing
|
|
—
|
|
|
300
|
|
Payments on senior revolving credit and receivables securitization
facilities
|
|
(337
|
)
|
|
(326
|
)
|
Net decrease in short-term debt
|
|
—
|
|
|
(6
|
)
|
Dividends paid
|
|
(45
|
)
|
|
(40
|
)
|
Purchases of treasury stock
|
|
(134
|
)
|
|
(87
|
)
|
Other
|
|
3
|
|
|
4
|
|
Net cash flow provided by financing activities
|
|
412
|
|
|
279
|
|
Effect of exchange rate changes on cash
|
|
9
|
|
|
1
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
88
|
|
|
(29
|
)
|
Cash, cash equivalents and restricted cash at beginning of period
|
|
118
|
|
|
96
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD
|
|
$
|
206
|
|
|
$
|
67
|
|
|
|
|
|
|
|
|
|
|
Table 6 Owens Corning and Subsidiaries Segment
Information (unaudited)
|
|
Composites
|
The table below provides a summary of net sales, EBIT and
depreciation and amortization expense for the Composites segment (in
millions):
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
|
$
|
537
|
|
|
$
|
517
|
|
|
$
|
1,048
|
|
|
$
|
990
|
|
% change from prior year
|
|
4
|
%
|
|
4
|
%
|
|
6
|
%
|
|
2
|
%
|
EBIT
|
|
$
|
84
|
|
|
$
|
74
|
|
|
$
|
155
|
|
|
$
|
138
|
|
EBIT as a % of net sales
|
|
16
|
%
|
|
14
|
%
|
|
15
|
%
|
|
14
|
%
|
Depreciation and amortization expense
|
|
$
|
35
|
|
|
$
|
33
|
|
|
$
|
71
|
|
|
$
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insulation
|
The table below provides a summary of net sales, EBIT and
depreciation and amortization expense for the Insulation segment (in
millions):
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
|
$
|
439
|
|
|
$
|
414
|
|
|
$
|
838
|
|
|
$
|
799
|
|
% change from prior year
|
|
6
|
%
|
|
-8
|
%
|
|
5
|
%
|
|
-4
|
%
|
EBIT
|
|
$
|
29
|
|
|
$
|
32
|
|
|
$
|
34
|
|
|
$
|
45
|
|
EBIT as a % of net sales
|
|
7
|
%
|
|
8
|
%
|
|
4
|
%
|
|
6
|
%
|
Depreciation and amortization expense
|
|
$
|
27
|
|
|
$
|
27
|
|
|
$
|
53
|
|
|
$
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Roofing
|
The table below provides a summary of net sales, EBIT and
depreciation and amortization expense for the Roofing segment (in
millions):
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net sales
|
|
$
|
684
|
|
|
$
|
679
|
|
|
$
|
1,311
|
|
|
$
|
1,108
|
|
% change from prior year
|
|
1
|
%
|
|
35
|
%
|
|
18
|
%
|
|
24
|
%
|
EBIT
|
|
$
|
155
|
|
|
$
|
169
|
|
|
$
|
280
|
|
|
$
|
242
|
|
EBIT as a % of net sales
|
|
23
|
%
|
|
25
|
%
|
|
21
|
%
|
|
22
|
%
|
Depreciation and amortization expense
|
|
$
|
12
|
|
|
$
|
11
|
|
|
$
|
24
|
|
|
$
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 7 Owens Corning and Subsidiaries Corporate,
Other and Eliminations (unaudited)
|
|
|
|
|
|
Corporate, Other and Eliminations
|
The table below provides a summary of EBIT and depreciation and
amortization expense for the Corporate, Other and Eliminations
category (in millions):
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Restructuring costs
|
|
$
|
(29
|
)
|
|
$
|
(3
|
)
|
|
$
|
(29
|
)
|
|
$
|
(3
|
)
|
Acquisition-related costs
|
|
(10
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|
(4
|
)
|
Recognition of InterWrap inventory fair value step-up
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
Litigation settlement gain, net of legal fees
|
|
29
|
|
|
—
|
|
|
29
|
|
|
—
|
|
Pension settlement losses
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
General corporate expense and other
|
|
(38
|
)
|
|
(22
|
)
|
|
(68
|
)
|
|
(54
|
)
|
EBIT
|
|
$
|
(78
|
)
|
|
$
|
(35
|
)
|
|
$
|
(109
|
)
|
|
$
|
(69
|
)
|
Depreciation and amortization
|
|
$
|
10
|
|
|
$
|
11
|
|
|
$
|
20
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 8 Owens Corning and Subsidiaries Free
Cash Flow Reconciliation Schedule (unaudited)
|
|
|
|
|
|
The reconciliation from net cash flow provided by operating
activities to free cash flow is shown in the table below (in
millions):
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
|
|
$
|
385
|
|
|
$
|
263
|
|
|
$
|
392
|
|
|
$
|
326
|
|
Less: Cash paid for property, plant and equipment
|
|
(103
|
)
|
|
(89
|
)
|
|
(170
|
)
|
|
(187
|
)
|
FREE CASH FLOW
|
|
$
|
282
|
|
|
$
|
174
|
|
|
$
|
222
|
|
|
$
|
139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170726005189/en/
Source: Owens Corning