Owens Corning Reports Fourth-Quarter and Full-Year 2013 Results

       Owens Corning Reports Fourth-Quarter and Full-Year 2013 Results  Full-Year Adjusted EBIT Grew by More Than 40 Percent; Company Initiates Quarterly Dividend  - Grew adjusted EPS by nearly 70 percent; all three businesses improved performance  - Roofing delivered 20 percent margins  - Insulation returned to profitability  - Composites improved full-year performance on strong fourth-quarter execution  - Momentum in our businesses and current outlook for our end markets support $500 million in adjusted EBIT in 2014  PR Newswire  TOLEDO, Ohio, Feb. 12, 2014  TOLEDO, Ohio, Feb. 12, 2014 /PRNewswire/ --Owens Corning (NYSE: OC) today reported consolidated net sales of $5.3 billion in 2013, up from net sales of $5.2 billion in 2012.  Full-year 2013 adjusted earnings were $221 million, or $1.86 per diluted share compared to adjusted earnings of $131 million, or $1.10 per diluted share, in 2012. Net earnings in 2013 were $204 million, or $1.71 per share, compared to net loss of $19 million, or $0.16 per diluted share last year.  Fourth-quarter 2013 adjusted earnings were $52 million, or $0.44 per diluted share, compared with $13 million, or $0.11 per diluted share, during the same period one year ago. The company reported net earnings of $82 million, or $0.69 per diluted share, in the fourth quarter of 2013, compared with a net loss of $56 million, or $0.47 per diluted share, in 2012. (See Table 6 for a discussion and reconciliation of these items.)  "In 2013, our insulation business returned to profitability. This was an important achievement for our company," said Chairman and Chief Executive Officer Mike Thaman. "We are pleased to establish a quarterly dividend as an additional mechanism to return value to our shareholders.  "All three businesses improved in 2013, benefitting from a stable and growing global economy and a recovering U.S. housing market," Thaman added. "We expect similar growth in 2014 and we are working to maintain the momentum we established last year."  The decision to declare a dividend conveys the confidence of the Board of Directors in the company's long-term financial outlook and cash flow generation. The company will make an initial quarterly payment of 16 centsper common share on April 3, 2014, to shareholders of record as of March 14, 2014.  Consolidated Fourth-Quarter and Full-Year 2013 Results    oOwens Corning maintained a very high level of safety performance in 2013.     The company had 88 percent fewer injuries than the average manufacturing     company when measured against the rates published by the U.S. Department     of Labor.   oAdjusted earnings before interest and taxes (EBIT) in the fourth quarter     of 2013 was $96 million, compared with $52 million in 2012. EBIT for the     fourth quarter was $104 million, compared with $16 million during the same     period in 2012 (see Table 2).   oFull-year adjusted EBIT was $416 million in 2013, compared with adjusted     EBIT of $293 million in 2012. Full-year EBIT in 2013 was $385 million,     compared to $148 million in 2012. (See Table 2 for a reconciliation of     these items).  Outlook  In 2014, the company expects to deliver $500 million in adjusted EBIT based on our current outlook for an improving U.S. housing market and moderate global growth.  We expect the Roofing business to deliver another strong year in 2014 and anticipate that the market will grow on new construction with flat to potentially improving re-roofing demand.  Insulation should continue to benefit from growth in U.S. residential new construction, improved pricing and operating leverage.  In Composites, the company expects recovering market conditions to drive price improvement of $20 million to $30 million. Pricing is expected to be the primary driver of EBIT growth in 2014.  The company estimates a long-term effective tax rate of 28 percent to 30 percent, and a long-term effective cash tax rate of 10 percent to 12 percent on adjusted pre-tax earnings, due to the company's $2.2 billion U.S. tax net operating loss carryforward. The effective book tax rate for 2014 on adjusted earnings is expected to be within the long-term range.  The company expects general corporate expenses to be $120 million to $130 million in 2014. Capital expenditures in 2014 are expected to total approximately $400 million, including an estimated $65 million for the start of construction of a non-woven facility.  The cash dividend to be paid in April will mark the company's first such payment since 2000. Future dividend declarations will be made at the discretion of the Board of Directors and will be based on such factors as the company's earnings, financial condition, cash requirements, future prospects and other factors.  Next Earnings Announcement  First-quarter 2014 results will be announced on Wednesday, April 23, 2014.  Conference Call and Presentation  Wednesday, February 12, 2014 11 a.m. Eastern Time  All Callers Live dial-in telephone number: U.S. and Canada 1.877.201.0168 or international +1.647.788.4901. Entry number: 354-170-30 (Please dial in 10-15 minutes before conference call start time)  Live webcast: http://investor.owenscorning.com/investor-relations/  Telephone replay available through Feb. 19, 2014. For U.S. and Canada, call 1.855.859.2056 or international +1.404.537.3406. Conference replay number: 354-170-30  Replay of webcast also available until Feb. 12, 2015 at:http://investor.owenscorning.com/investor-relations/   Presentation To view the slide presentation during the conference call, please log on to the live webcast at: http://investor.owenscorning.com/investor-relations/  About Owens Corning  Owens Corning (NYSE: OC) is a leading global producer of residential and commercial building materials, glass-fiber reinforcements and engineered materials for composite systems. A Fortune® 500 company for 59 consecutive years, Owens Corning is committed to driving sustainability by delivering solutions, transforming markets and enhancing lives. In business for more than 75 years, Owens Corning is a market-leading innovator of glass-fiber technology with sales of $5.3 billion in 2013 and about 15,000 employees in 27 countries. Additional information is available at www.owenscorning.com.  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 that may cause actual results to differ materially from those projected in these statements. Such factors include, without limitation: economic and political conditions, including; levels of residential and commercial construction activity; competitive factors; levels of global industrial production; relationships with key customers; difficulties in managing production capacity; industry and economic conditions that affect the market and operating conditions of our customers, suppliers or lenders; availability and cost of credit; our level of indebtedness; weather conditions; pricing factors; availability and cost of energy and raw materials; issues involving implementation of new business systems; new legislation or other governmental actions; our ability to use our net operating loss carry-forwards; research and development activities; foreign exchange fluctuations; interest rate movements; labor disputes; issues related to acquisitions, divestitures and joint ventures; uninsured losses; achievement of expected synergies, cost reductions and/or productivity improvements; defined benefit plan funding obligations; 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 February 12, 2014, and is subject to change. The company does not undertake any duty to update or revise forward-looking statements. 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 (Loss)  (unaudited)  (in millions, except per share amounts)                               Three Months Ended        Twelve Months Ended                               Dec. 31,                  Dec. 31,                                   2013        2012          2013        2012 NET SALES                     $   1,278    $  1,159     $   5,295     $ 5,172 COST OF SALES                     1,045       989           4,329       4,375   Gross margin          233         170           966         797 OPERATING EXPENSES  Marketing and               135         129           530         509 administrative expenses  Science and                 20          19            77          79 technology expenses  Charges related to          -           15            8           51 cost reduction actions  Other expenses              (26)        (9)           (34)        10 (income), net   Total operating       129         154           581         649 expenses EARNINGS BEFORE INTEREST          104         16            385         148 AND TAXES Interest expense, net             25          29            112         114 Loss on extinguishment of         -           74            -           74 debt EARNINGS (LOSS) BEFORE            79          (87)          273         (40) TAXES Less: Income tax expense          (3)         (36)          68          (28) (benefit) Equity in net earnings of         -           (4)           -           (4) affiliates NET EARNINGS (LOSS)               82          (55)          205         (16) Less: Net earnings attributable to                   -           1             1           3 noncontrolling interests NET EARNINGS (LOSS) ATTRIBUTABLE TO OWENS         $   82       $  (56)      $   204       $ (19)  CORNING BASIC EARNINGS (LOSS) PER COMMON SHARE  ATTRIBUTABLE TO OWENS CORNING COMMON                $   0.70     $  (0.47)    $   1.73      $ (0.16)   STOCKHOLDERS DILUTED EARNINGS (LOSS) PER COMMON SHARE  ATTRIBUTABLE TO OWENS CORNING COMMON  STOCKHOLDERS            $   0.69     $  (0.47)    $   1.71      $ (0.16) WEIGHTED AVERAGE COMMON SHARES   Basic                 117.6       118.0         118.2       119.4   Diluted               118.5       118.0         119.1       119.4 Owens Corning follows the authoritative guidance referring to "Noncontrolling Interest in Consolidated Financial Statements," effective January 1, 2009, which, among other things, changed the presentation format and certain captions of the Consolidated Statements of Earnings (Loss) and Consolidated Balance Sheets. Owens Corning uses the captions recommended by this standard in its Consolidated Financial Statements such as net earnings attributable to Owens Corning and diluted earnings per common share attributable to Owens Corning common stockholders. However, in the preceding release Owens Corning has shortened this language to net earnings and earnings per share (or a slight variation thereof), respectively.    Table 2  Owens Corning and Subsidiaries  EBIT Reconciliation Schedules  (unaudited) 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 the result of current operations. The adjusted financial measure resulting from these adjustments is 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. Although management believes that these adjustments result in a measure that provides it a useful representation of its operational performance, the adjusted measure should not be considered in isolation or as a substitute for net earnings attributable to Owens Corning as prepared in accordance with accounting principles generally accepted in the United States. Adjusting items are shown in the table below (in millions):                                   Three Months Ended       Twelve Months Ended                                   Dec. 31,                 Dec. 31,                                   2013          2012       2013       2012 Charges related to cost reduction $   (3)       $   (27)   $  (26)    $  (136) actions and related items Net gain (loss) related to Hurricane Sandy insurance             31            (9)       15         (9) activity Accelerated depreciation related to a change in the useful life  of assets in Cordele,           (20)          -         (20)       - Georgia facility  Total adjusting items       $   8         $   (36)   $  (31)    $  (145) The reconciliation from net earnings attributable to Owens Corning to Adjusted EBIT is shown in the table below (in millions):                                   Three Months Ended       Twelve Months Ended                                   Dec. 31,                 Dec. 31,                                   2013          2012       2013       2012 NET EARNINGS (LOSS) ATTRIBUTABLE  $   82        $   (56)   $  204     $  (19) TO OWENS CORNING  Less: Net earnings attributable to noncontrolling        -             1         1          3 interests NET EARNINGS (LOSS)                   82            (55)      205        (16)  Equity in net earnings of       -             (4)       -          (4) affiliates  Income tax expense              (3)           (36)      68         (28) (benefit) EARNINGS (LOSS) BEFORE TAXES          79            (87)      273        (40)  Interest expense, net           25            29        112        114  Loss on extinguishment of       -             74        -          74 debt EARNINGS BEFORE INTEREST AND          104           16        385        148 TAXES  Less: adjusting items from      8             (36)      (31)       (145) above ADJUSTED EBIT                     $   96        $   52     $  416     $  293    Table 3  Owens Corning and Subsidiaries  Consolidated Statements of Cash Flows  (unaudited)  (in millions)                                                  Twelve Months Ended                                                  Dec. 31,                                                  2013       2012       2011 NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES   Net earnings (loss)                          $ 205      $ (16)     $ 281   Adjustments to reconcile net earnings (loss)   to cash provided by        operating activities:            Depreciation and amortization         332        349        318            Gain on sale of assets or             (6)        (17)       (30)            affiliates            Proceeds from Hurricane Sandy         (58)       (20)       -            insurance claims            Deferred income taxes                 54         (59)       55            Provision for pension and other       23         36         36            employee benefits liabilities            Stock-based compensation expense      28         24         21            Other non-cash                        (18)       (14)       (22)            Loss on extinguishment of debt        -          74         -   Change in working capital accounts:            Changes in receivables, net           (77)       24         (48)            Changes in inventories                (27)       (4)        (179)            Changes in accounts payable and       46         23         (41)            accrued liabilities            Changes in other current assets       4          (39)       (35)            Other                                 -          2          41   Pension fund contribution                      (39)       (50)       (117)   Payments for other employee benefits           (22)       (22)       (24)   liabilities   Other                                          (27)       39         33            Net cash flow provided by operating   418        330        289            activities NET CASH FLOW USED FOR INVESTING ACTIVITIES   Additions to plant and equipment (including    (353)      (332)      (442)   alloy)   Proceeds from the sale of assets (including    16         59         81   alloy) or affiliates   Investment in subsidiaries and affiliates,     (62)       -          (84)   net of cash acquired   Proceeds from Hurricane Sandy insurance        58         20         -   claims   Deposit related to sale of Hangzhou, China     34         -          -   plant            Net cash flow used for investing      (307)      (253)      (445)            activities NET CASH FLOW PROVIDED BY (USED FOR) FINANCING ACTIVITIES   Proceeds from senior revolving credit and      1,063      1,877      1,912   receivables securitization facilities   Payments on senior revolving credit and        (1,103)    (1,957)    (1,630)   receivables securitization facilities   Proceeds from long-term debt                   -          599        6   Payments on long-term debt                     (2)        (441)      (10)   Purchase of noncontrolling interest            -          (22)       -   Net increase (decrease) in short-term debt     (4)        (23)       26   Purchases of treasury stock                    (63)       (113)      (138)   Other                                          2          4          8            Net cash flow provided by (used       (107)      (76)       174            for) financing activities Effect of exchange rate changes on cash          (2)        2          (18) Net increase in cash and cash equivalents        2          3          - Cash and cash equivalents at beginning of        55         52         52 period                                                 $ 57       $ 55       $ 52 CASH AND CASH EQUIVALENTS AT END OF PERIOD DISCLOSURE OF CASH FLOW INFORMATION   Cash paid during the year for income taxes   $ 29       $ 30       $ 24   Cash paid during the year for interest       $ 126      $ 122      $ 111    Table 4  Owens Corning and Subsidiaries  Consolidated Balance Sheets  (unaudited)  (in millions)                                             Dec. 31,             Dec. 31, ASSETS                                      2013                 2012 CURRENT ASSETS     Cash and cash equivalents               $     57             $    55     Receivables, less allowances of     $14 at Dec. 31, 2013 and $17 at               683                 600     Dec. 31, 2012     Inventories                                   810                 786     Assets held for sale - current                29                  -     Other current assets                          269                 176             Total current assets                  1,848               1,617 Property, plant and equipment, net                2,932               2,903 Goodwill                                          1,166               1,143 Intangible assets                                 1,040               1,045 Deferred income taxes                             436                 604 Other non-current assets                          225                 256 TOTAL ASSETS                                $     7,647          $    7,568 LIABILITIES AND EQUITY CURRENT LIABILITIES     Accounts payable and accrued            $     988            $    907     liabilities     Short-term debt                               1                   5     Long-term debt – current portion              3                   4             Total current liabilities             992                 916 Long-term debt, net of current portion            2,024               2,076 Pension plan liability                            336                 480 Other employee benefits liability                 242                 274 Deferred income taxes                             23                  38 Other liabilities                                 200                 209 OWENS CORNING STOCKHOLDERS' EQUITY     Preferred stock, par value $0.01              -                   -     per share (a)     Common stock, par value $0.01 per             1                   1     share (b)     Additional paid in capital                    3,938               3,925     Accumulated earnings                          655                 451     Accumulated other comprehensive               (297)               (364)     deficit     Cost of common stock in treasury              (504)               (475)     (c)             Total Owens Corning                   3,793               3,538             stockholders' equity     Noncontrolling interests                      37                  37 Total equity                                      3,830               3,575 TOTAL LIABILITIES AND EQUITY                $     7,647          $    7,568 (a) 10 shares authorized; none issued or outstanding at Dec. 31, 2013 and Dec.     31, 2012 (b) 400 shares authorized; 135.5 issued and 117.8 outstanding at Dec. 31,     2013; 135.6 issued and 118.3 outstanding at Dec. 31, 2012 (c) 17.7 shares at Dec. 31, 2013 and 17.3 shares at Dec. 31, 2012    Table 5  Owens Corning and Subsidiaries  Segment and Business Information  (unaudited) Composites The table below provides a summary of net sales, EBIT and depreciation and amortization expense for our Composites segment (in millions):                             Three Months Ended         Twelve Months Ended                             Dec. 31,                   Dec. 31,                             2013           2012        2013           2012 Net sales                   $    461       $   426     $   1,845      $  1,859  % change from        8%            -7%         -1%           -6% prior year EBIT                        $    36        $   23      $   98         $  91  EBIT as a % of       8%            5%          5%            5% net sales Depreciation and            $    31        $   32      $   130        $  123 amortization expense Building Materials The table below provides a summary of net sales, EBIT and depreciation and amortization expense (in millions) for the Building Materials segment and our businesses within this segment.                             Three Months Ended         Twelve Months Ended                             Dec. 31,                   Dec. 31,                             2013           2012        2013           2012 Net sales  Insulation            $    466       $   413     $   1,642      $  1,468  Roofing                    381           350         1,967         2,014 Total Building Materials    $    847       $   763     $   3,609      $  3,482  % change from   11%            -1%         4%             -2% prior year EBIT  Insulation            $    39        $   9       $   40         $  (38)  Roofing                    55            42          386           331 Total Building Materials    $    94        $   51      $   426        $  293  EBIT as a % of  11%            7%          12%            8% net sales Depreciation and amortization expense  Insulation            $    25        $   25      $   104        $  105  Roofing                    10            10          38            38 Total Building Materials    $    35        $   35      $   142        $  143 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         Twelve Months Ended                             Dec. 31,                   Dec. 31,                             2013           2012        2013           2012 Charges related to cost reduction actions and       $    (3)       $   (27)    $   (26)       $  (136) related items Net gain (loss) related to Hurricane Sandy insurance        31            (9)         15            (9) activity Accelerated depreciation related to a change in the useful life  of assets in Cordele,      (20)          -           (20)          - Georgia facility General corporate expense        (34)          (22)        (108)         (91) EBIT                        $    (26)      $   (58)    $   (139)      $  (236) Depreciation and            $    31        $   13      $   60         $  83 amortization    Table 6  Owens Corning and Subsidiaries  EPS Reconciliation Schedules  (unaudited)  (in millions, except per share data) 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 the result of current operations. The adjusted financial measures resulting from these adjustments 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. Although management believes that these adjustments result in measures that provide it a useful representation of its operational performance, 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 accounting principles generally accepted in the United States. A reconciliation from net earnings (loss) attributable to Owens Corning to Adjusted Earnings and a reconciliation from diluted earnings (loss) per share to adjusted diluted earnings per share are shown in the tables below:                  Three Months Ended  Three Months     Three Months       Three Months Ended  Twelve Months                                      Ended            Ended                                  Ended                  March 31,          June 30,        September 30,     December 31,       December 31,                    2013      2012      2013     2012    2013     2012      2013      2012      2013     2012 RECONCILIATION TO ADJUSTED EARNINGS Net earnings (loss)           $ 22      $ (46)    $ 49     $ 39    $ 51     $ 44      $ 82      $ (56)    $ 204    $ (19) attributable to Owens Corning  Adjustment to      15        43        4        23      9        16        (11)      68        17       150 remove adjusting items net of tax  Adjustment to tax expense to     (2)       14        15       5       6        (20)      (19)      1         -        - reflect pro forma tax rate* ADJUSTED         $ 35      $ 11      $ 68     $ 67    $ 66     $ 40      $ 52      $ 13      $ 221    $ 131 EARNINGS RECONCILIATION TO ADJUSTED DILUTED  EARNINGS PER SHARE ATTRIBUTABLE TO  OWENS CORNING COMMON STOCKHOLDERS DILUTED EARNINGS PER COMMON SHARE  ATTRIBUTABLE TO OWENS CORNING  COMMON     $ 0.18    $ (0.38)  $ 0.41   $ 0.32  $ 0.43   $ 0.37    $ 0.69    $ (0.47)  $ 1.71   $ (0.16) STOCKHOLDERS  Adjustment to      0.13      0.36      0.03     0.19    0.08     0.13      (0.09)    0.58      0.15     1.26 remove adjusting items net of tax  Adjustment to tax expense to     (0.02)    0.11      0.13     0.04    0.05     (0.16)    (0.16)    -         -        - reflect pro forma tax rate* ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE  TO OWENS CORNING COMMON   $ 0.29    $ 0.09    $ 0.56   $ 0.55  $ 0.56   $ 0.34    $ 0.44    $ 0.11    $ 1.86   $ 1.10 STOCKHOLDERS RECONCILIATION TO DILUTED SHARES OUTSTANDING Weighted-average shares outstanding used for basic earnings per       118.5     121.1     119.1    120.8   118.0    117.9     117.6     118.0     118.2    119.4 share  Non-vested         0.6       -         0.7      0.4     0.4      0.6       0.5       -         0.4      - restricted shares  Options to         0.5       -         0.6      0.3     0.4      0.3       0.4       -         0.5      - purchase common stock Diluted shares     119.6     121.1     120.4    121.5   118.8    118.8     118.5     118.0     119.1    119.4 outstanding *In 2013 and 2012, the quarterly tax expense was adjusted to reflect the actual full year adjusted effective tax rate of 27 percent and 23 percent, respectively.      SOURCE Owens Corning  Website: http://www.owenscorning.com Contact: Media Inquiries: Matt Schroder, 419.248.8987; Investor Inquiries: Thierry Denis, 419.248.5748