Owens Corning Reports Second-Quarter 2014 Results

              Owens Corning Reports Second-Quarter 2014 Results

Progress in Insulation and Composites Expected to Drive 2014 Adjusted EBIT
Growth; Second-Quarter Results Reflect Continued Volume Weakness in Roofing

- Insulation and Composites continue to demonstrate year-over-year improvement

- First-half Roofing financial performance affected by weaker market
conditions and volume shortfall

- Full-year earnings growth in Insulation and Composites is expected to more
than offset weaker year-over-year financial performance in Roofing

- Company continues to expect full-year adjusted EBIT to be greater than the
2013 result of $416 million

PR Newswire

TOLEDO, Ohio, July 23, 2014

TOLEDO, Ohio, July 23, 2014 /PRNewswire/ --Owens Corning (NYSE: OC) today
reported consolidated net sales of $1.36 billion in the second quarter of
2014, up slightly from $1.35 billion in 2013.

Second-quarter 2014 adjusted earnings were $45 million, or $0.38 per diluted
share, down from the adjusted earnings of $68 million, or $0.56 per diluted
share, in 2013. Net earnings in the second quarter of 2014 were $21 million,
or $0.18 per share, compared to net earnings of $49 million, or $0.41 per
diluted share last year. (See Table 3 for a discussion and reconciliation of
these items.)

"Insulation and Composites delivered improvement in line with expectations
through the first half of the year. Continued momentum in these two
businesses is expected to more than offset the weaker financial performance in
the Roofing business and generate earnings growth for the full year 2014,"
said Chairman and Chief Executive Officer Mike Thaman.

Consolidated Second Quarter 2014 Results

  oOwens Corning continued to perform at a very high level of safety with a
    Recordable Incident Rate (RIR) of 0.50 for the six months ending June 30,
    2014. This is consistent with the rate in the same period in 2013.
  oAdjusted earnings before interest and taxes (adjusted EBIT) in the second
    quarter of 2014 were $96 million, down from $124 million in 2013. Reported
    EBIT for the second quarter was $73 million, compared with $118 million
    during the same period in 2013. (See Table 2.)
  oDuring the second quarter, Owens Corning repurchased 300,000 shares of the
    company's common stock for $12 million. As of June 30, 2014, 7.7 million
    shares remained available for repurchase under the company's current
    authorization.
  oThe company's Board of Directors declared a quarterly cash dividend of
    $0.16 per common share. The dividend will be payable on July 29, 2014 to
    shareholders of record as of July 14, 2014.

Outlook

The Insulation business should continue to benefit from growth in U.S.
residential new construction, improved pricing and operating leverage.

The Composites business continues to benefit from stable global economic
growth, improved operating performance and pricing. Pricing is expected to be
the primary driver of EBIT growth in 2014. Composites pricing is now expected
to be at the top end of the previous guidance range of $20 million to $30
million.

The roofing market was down through the first two quarters of this year. The
company now expects that the roofing market will be flat to slightly down for
full-year 2014 compared to prior year. Volumes in the Roofing business are
expected to more closely track the market in the second half than they did in
the first half of 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 $2.1 billion U.S. tax net
operating loss carry forward. 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 $100 million to $110
million in 2014, a $20 million cost reduction versus the previous guidance.
Capital expenditures in 2014 are expected to total approximately $370 million,
a $30 million reduction from our previous guidance. This estimate continues to
include an estimated $65 million for the start of construction of a non-wovens
facility.

For the full year 2014, the company's adjusted EBIT is expected to be greater
than the 2013 result of $416 million.

Next Earnings Announcement

Third-quarter 2014 results will be announced on Wednesday, October 22, 2014.

Conference Call and Presentation

Wednesday, July 23, 2014
11 a.m. Eastern Time

All Callers
Live dial-in telephone number: U.S. 1.888.317.6003, Canada 1.866.284.3684 or
other international +1.412.317.6061.
Entry number: 461-4761 (Please dial in 10-15 minutes before conference call
start time)

Live webcast: http://services.choruscall.com/links/owens140723.html

Telephone replay available through July 30, 2014. For U.S. and Canada, call
1.877.344.7529
or international +1.412.317.0088. Conference replay number: 100-48-200

Replay of webcast also available until July 23, 2015 at:
http://services.choruscall.com/links/owens140723.html

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 60 consecutive
years and 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; 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; labor disputes and
litigation; availability and cost of energy and raw materials; difficulties in
managing production capacity; 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 July 23, 2014, and is
subject to change. The company does not undertake any obligation to update or
revise forward-looking statements other than as required by applicable
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        Six Months Ended
                               June 30,                  June 30,
                                   2014         2013        2014        2013
NET SALES                      $   1,355     $  1,347    $  2,633    $  2,697
COST OF SALES                      1,107        1,080       2,151       2,217
          Gross margin             248          267         482         480
OPERATING EXPENSES
     Marketing and                 130          134         262         267
     administrative expenses
     Science and technology        20           20          39          38
     expenses
     Charges related to cost       -            1           12          2
     reduction actions
     Other (income)                25           (6)         (12)        (2)
     expenses, net
          Total operating          175          149         301         305
          expenses
EARNINGS BEFORE INTEREST AND       73           118         181         175
TAXES
Interest expense, net              31           29          58          58
EARNINGS BEFORE TAXES              42           89          123         117
Less: Income tax expense           21           39          (18)        45
(benefit)
Equity in net earnings of          1            -           1           -
affiliates
NET EARNINGS                       22           50          142         72
Less: Net earnings
attributable to                    1            1           1           1
noncontrolling interests
NET EARNINGS ATTRIBUTABLE TO   $   21        $  49       $  141      $  71
OWENS CORNING
EARNINGS PER COMMON SHARE
ATTRIBUTABLE TO
     OWENS CORNING COMMON
     STOCKHOLDERS
          Basic                $   0.18      $  0.41     $  1.20     $  0.60
          Diluted              $   0.18      $  0.41     $  1.19     $  0.59
          Dividend             $   0.16      $  -        $  0.32     $  -
WEIGHTED AVERAGE COMMON
SHARES
          Basic                    117.4        119.1       117.6       118.8
          Diluted                  118.3        120.4       118.5       119.9
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 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)
Adjusting items are shown in the table below (in millions):
                               Three Months Ended        Six Months Ended
                               June 30,                  June 30,
                               2014          2013        2014         2013
Impairment loss on European    $   (19)      $   -       $   (19)     $  -
Stone Business
Gain on sale of Hangzhou,          -             -           45          -
China Facility
Net loss related to Hurricane      (4)           (3)         (6)         (14)
Sandy
Charges related to cost
reduction actions and related      -             (3)         (12)        (12)
items
    Total adjusting items      $   (23)      $   (6)     $   8        $  (26)
The reconciliation from net earnings attributable to Owens Corning to Adjusted
EBIT is shown in the table below (in millions):
                               Three Months Ended        Six Months Ended
                               June 30,                  June 30,
                               2014          2013        2014         2013
NET EARNINGS ATTRIBUTABLE TO
    OWENS CORNING              $   21        $   49      $   141      $  71
         Less: Net earnings
         attributable to           1             1           1           1
         noncontrolling
         interests
NET EARNINGS                       22            50          142         72
    Equity in net earnings of      1             -           1           -
    affiliates
    Income tax expense             21            39          (18)        45
EARNINGS BEFORE TAXES              42            89          123         117
    Interest expense, net          31            29          58          58
EARNINGS BEFORE INTEREST AND       73            118         181         175
TAXES
    Less: adjusting items from     (23)          (6)         8           (26)
    above
ADJUSTED EBIT                  $   96        $   124     $   173      $  201
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.





Table 3

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 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         Six Months Ended
                                June 30,                   June 30,
                                2014            2013        2014        2013
RECONCILIATION TO
ADJUSTED EARNINGS
Net earnings
attributable to Owens        $  21          $   49        $ 141       $ 71
Corning
        Adjustment to
        remove adjusting        21              4           -           19
        items, net of
        tax
        Adjustment to
        remove
        significant tax         -               -           (74)        -
        reserve
        reversals*
        Adjustment to
        tax expense
        (benefit) to            3               15          13          13
        reflect pro
        forma tax rate*
ADJUSTED EARNINGS            $  45          $   68        $ 80        $ 103
RECONCILIATION TO
ADJUSTED DILUTED
EARNINGS PER SHARE
    ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
DILUTED EARNINGS PER
COMMON SHARE
ATTRIBUTABLE
    TO OWENS CORNING         $  0.18        $   0.41      $ 1.19      $ 0.59
    COMMON STOCKHOLDERS
        Adjustment to
        remove adjusting        0.18            0.03        -           0.16
        items, net of
        tax
        Adjustment to
        remove
        significant tax         -               -           (0.62)      -
        reserve
        reversals*
        Adjustment to
        tax expense
        (benefit) to            0.02            0.12        0.11        0.11
        reflect pro
        forma tax rate*
ADJUSTED DILUTED
EARNINGS PER SHARE
    ATTRIBUTABLE TO
    OWENS CORNING COMMON     $  0.38        $   0.56      $ 0.68      $ 0.86
    STOCKHOLDERS
RECONCILIATION TO
DILUTED SHARES
OUTSTANDING
Weighted average shares
outstanding
    used for basic              117.4           119.1       117.6       118.8
    earnings per share
        Non-vested
        restricted              0.4             0.7         0.4         0.6
        shares
        Options to
        purchase common         0.5             0.6         0.5         0.5
        stock
Diluted shares                  118.3           120.4       118.5       119.9
outstanding
* For comparability, in 2014, we have used a pro-forma effective tax rate of
29% (midpoint of guidance) that excludes the resolution of a significant
uncertain tax position and the reversal of a valuation allowance recorded in
prior years against certain European net deferred tax assets. In 2013 we have
used an effective tax rate of 27% as this was the effective tax rate of the
Company in 2013.





Table 4

Owens Corning and Subsidiaries

Consolidated Balance Sheets

(unaudited)
(in millions)
                                                  June 30,        Dec. 31,
ASSETS                                            2014            2013
CURRENT ASSETS
     Cash and cash equivalents                    $    81         $    57
     Receivables, less allowances of $13 at            848             683
     June 30, 2014, and $14 at Dec. 31, 2013
     Inventories                                       886             810
     Assets held for sale - current                    14              29
     Other current assets                              231             269
             Total current assets                      2,060           1,848
Property, plant and equipment, net                     2,913           2,932
Goodwill                                               1,166           1,166
Intangible assets                                      1,026           1,040
Deferred income taxes                                  406             436
Other non-current assets                               225             225
TOTAL ASSETS                                      $    7,796      $    7,647
LIABILITIES AND EQUITY
CURRENT LIABILITIES
     Accounts payable and accrued liabilities     $    880        $    988
     Short-term debt                                   17              1
     Liabilities held for sale - current               4               -
     Long-term debt – current portion                  4               3
             Total current liabilities                 905             992
Long-term debt, net of current portion                 2,271           2,024
Pension plan liability                                 316             336
Other employee benefits liability                      234             242
Deferred income taxes                                  28              23
Other liabilities                                      131             200
OWENS CORNING STOCKHOLDERS' EQUITY
     Preferred stock, par value $0.01 per              -               -
     share (a)
     Common stock, par value $0.01 per share           1               1
     (b)
     Additional paid in capital                        3,939           3,938
     Accumulated earnings                              758             655
     Accumulated other comprehensive deficit           (301)           (297)
     Cost of common stock in treasury (c)              (524)           (504)
             Total Owens Corning stockholders'         3,873           3,793
             equity
     Noncontrolling interests                          38              37
Total equity                                           3,911           3,830
TOTAL LIABILITIES AND EQUITY                      $    7,796      $    7,647
(a)  10 shares authorized; none issued or outstanding at June 30, 2014, and
     Dec. 31, 2013
(b)  400 shares authorized; 135.5 issued and 117.6 outstanding at June 30,
     2014; 135.5 issued and 117.8 outstanding at Dec. 31, 2013
(c)  17.9 shares at June 30, 2014, and 17.7 shares at Dec. 31, 2013





Table 5

Owens Corning and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)
(in millions)
                                                              Six Months Ended
                                                              June 30,
                                                              2014       2013
NET CASH FLOW USED FOR OPERATING ACTIVITIES
 Net earnings                                               $ 142      $ 72
 Adjustments to reconcile net earnings to cash used for
 operating activities:
         Depreciation and amortization                        154        157
         Gain on sale of fixed assets                         (47)       -
         Impairment loss on European Stone Business           19         -
         Deferred income taxes                                (29)       37
         Provision for pension and other employee benefits    9          18
         liabilities
         Stock-based compensation expense                     14         14
         Other non-cash                                       (13)       (12)
 Change in working capital                                    (336)      (254)
 Pension fund contribution                                    (24)       (20)
 Payments for other employee benefits liabilities             (12)       (11)
 Other                                                        6          (16)
         Net cash flow used for operating activities          (117)      (15)
NET CASH FLOW USED FOR INVESTING ACTIVITIES
 Additions to plant and equipment (including alloy)           (142)      (125)
 Proceeds from the sale of assets (including alloy) or        77         -
 affiliates, net
 Investment in subsidiaries and affiliates, net of cash       -          (52)
 acquired
 Proceeds from Hurricane Sandy insurance claims               -          15
         Net cash flow used for investing activities          (65)       (162)
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES
 Proceeds from senior revolving credit and receivables        769        799
 securitization facilities
 Payments on senior revolving credit and receivables          (522)      (621)
 securitization facilities
 Payments on long-term debt                                   (1)        (1)
 Net increase in short-term debt                              16         15
 Cash dividends paid                                          (19)       -
 Purchases of treasury stock                                  (44)       (9)
 Other                                                        7          14
         Net cash flow provided by financing activities       206        197
Effect of exchange rate changes on cash                       -          (3)
Net increase in cash and cash equivalents                     24         17
Cash and cash equivalents at beginning of period              57         55

                                                            $ 81       $ 72
CASH AND CASH EQUIVALENTS AT END OF PERIOD





Table 6

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 the Composites segment (in millions):
                             Three Months Ended          Six Months Ended
                             June 30,                    June 30,
                             2014            2013        2014        2013
Net sales                    $     505       $   472     $  982      $  931
      % change from            7%            -5%        5%          -4%
     prior year
EBIT                         $     37        $   32      $  64       $  41
      EBIT as a % of net       7%            7%         7%          4%
     sales
Depreciation and             $     34        $   34      $  68       $  66
amortization expense


Building Materials
The table below provides a summary of net sales, EBIT and depreciation and
amortization expense for the Building Materials segment and our businesses
within this segment (in millions):
                             Three Months Ended          Six Months Ended
                             June 30,                    June 30,
                             2014            2013        2014        2013
Net sales
     Insulation              $     447       $   415     $  802      $  745
     Roofing                       437           508        934         1,115
Total Building Materials     $     884       $   923     $  1,736    $  1,860
      % change from      -4%             -2%         -7%         0%
     prior year
EBIT
     Insulation              $     18        $   4       $  19       $  (17)
     Roofing                       62            116        142         235
Total Building Materials     $     80        $   120     $  161      $  218
      EBIT as a % of net 9%              13%         9%          12%
     sales
Depreciation and
amortization expense
     Insulation              $     26        $   27      $  51       $  53
     Roofing                       10            9          19          19

                             $     36        $   36      $  70       $  72
Total Building Materials





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        Six Months Ended
                              June 30,                   June 30,
                              2014          2013         2014         2013
Impairment loss on European   $   (19)      $   -        $   (19)     $  -
Stone Business
Net loss related to Hurricane     (4)           (3)          (6)         (14)
Sandy
Gain on sale of Hangzhou,         -             -            45          -
China facility
Charges related to cost
reduction actions and related     -             (3)          (12)        (12)
items
General corporate expense and     (21)          (28)         (52)        (58)
other
EBIT                          $   (44)      $   (34)     $   (44)     $  (84)
Depreciation and amortization $   8         $   9        $   16       $  19





SOURCE Owens Corning

Website: http://www.owenscorning.com
Contact: Media Inquiries: Matt Schroder, 419.248.8987; or Investor Inquiries:
Thierry Denis, 419.248.5748
 
Press spacebar to pause and continue. Press esc to stop.