58-Percent Increase in Adjusted EPS Driven by Strong Roofing
Performance TOLEDO, Ohio, Aug. 5 /PRNewswire-FirstCall/ -- Owens
Corning (NYSE:OC) today reported consolidated net sales of $1.2
billion during the second quarter of 2009, compared with $1.6
billion in the second quarter of 2008. The quarter was highlighted
by continued strong performance in Roofing sales, which were up 14
percent compared with the second quarter of 2008. The prolonged
downturn in the U.S. housing market led to lower sales of
insulation and other building materials. Composites sales were
lower because of global economic weakness, which began in the
fourth quarter of 2008. Led by record Roofing earnings, Owens
Corning's second-quarter 2009 adjusted earnings were $62 million,
or $0.49 per adjusted diluted share, compared with $40 million, or
$0.31 per adjusted diluted share, in 2008. The Company reported
second-quarter 2009 net earnings of $33 million, or $0.26 per
diluted share, compared with $41 million, or $0.32 per diluted
share, in 2008. See Tables 1 through 3 for a discussion and
reconciliation of these items. Consolidated Second-Quarter 2009
Results -- Earnings Before Interest and Taxes (EBIT) for the second
quarter ended June 30, 2009, were $88 million, compared with EBIT
of $74 million during the same period in 2008. Adjusted EBIT for
the second quarter of 2009 was $108 million, compared with $87
million in the second quarter of 2008. See Table 2. -- EBIT was $70
million for the first six months of 2009, compared with EBIT of $95
million during the same period of 2008. Adjusted EBIT for the first
six months of 2009 was $140 million, compared with $143 million
during the same period of 2008. -- Gross margin as a percentage of
sales was 21 percent in the second quarter of 2009, compared with
16 percent in the same period of 2008. -- Second-quarter 2009
Marketing and Administrative expenses were $37 million less than
the second quarter of 2008. -- In the six months ended June 30,
2009, the Company's recordable incidence rate improved
approximately 15 percent over performance throughout 2008. "Owens
Corning achieved outstanding second-quarter results led by record
earnings in our Roofing business," said Mike Thaman, chairman and
chief executive officer. "We have delivered strong financial
performance and strengthened our balance sheet while responding to
continued weakness in our other markets. On the strength of the
first half of 2009, we are pleased to increase our outlook for free
cash flow to $200 million or more for the year, implying free cash
flow generation of at least $377 million during the second half of
2009." Outlook The business environment is expected to remain
challenging through the second half of 2009. Capacity will remain
curtailed; costs and capital spending will be lower compared to
2008. The Company is on track to deliver $160 million in cost
savings during 2009. Capital expenditures will be approximately
$225 million, which is a reduction of about $140 million compared
with 2008, in each case excluding precious metal purchases.
Depreciation and Amortization is estimated to be $320 million for
the year. Actions taken position the Company to achieve more than
$200 million in free cash flow in 2009. Free cash flow for the
period is calculated by the change in debt less cash on hand. This
calculation includes adjustments to exclude the cash impact of
issuing new stock and repurchasing treasury stock. In the
Composites segment, Owens Corning will continue to realize the
benefits of additional synergies from the 2007 acquisition of
Saint-Gobain's reinforcements and composite fabrics businesses and
various cost-reduction actions taken in 2008 and 2009. Based on
demand improvement in the Reinforcements business during the first
and second quarters of 2009, the Company believes that incremental
demand improvement will continue through the remainder of the year.
Production is expected to be maintained near current levels to
reduce inventories. Considerable uncertainties remain in global
markets, including the pace of any demand improvement and
competitive pressures. The continued weakness in the U.S. housing
industry is expected to negatively affect demand in Owens Corning's
Building Materials segment throughout the remainder of 2009. In the
Insulation business, despite significant cost and capacity actions,
cost savings are not expected to offset the impact of continued
demand-driven weakness. Assuming sustained gross margins in the
Roofing business, Roofing performance will continue to more than
offset weakness in the Insulation and Other businesses.
Uncertainties that may impact Roofing gross margins include
competitive pricing pressure and the cost and availability of raw
materials, particularly asphalt. In the Insulation and Other
businesses, Owens Corning is prepared to take further actions to
reduce capacity and lower the businesses' cost structure if further
weakening occurs. Conversely, the Company is prepared to respond to
increased demand by bringing additional production capacity back on
line. Cash taxes in 2009 are expected to be less than the $33
million paid in 2008. The Company estimates a long-term effective
book tax rate of 25 percent based on the blend of its U.S. and
non-U.S. operations. A tax rate of 25 percent will be applied to
the Company's quarterly and annual calculation of its adjusted
earnings per share to provide better comparability from period to
period. Other Financial Items -- In the second quarter and first
half of 2009, actions were taken that will result in significant
cost savings during the year. Costs related to these actions were
$11 million in the second quarter of 2009 and total $41 million for
the first six months of the year. Owens Corning expects to incur an
additional $8 million in charges throughout the remainder of 2009.
-- The Company generated $149 million in free cash flow during the
second quarter of 2009. At the end of the second quarter of 2009,
Owens Corning had net debt of $2.2 billion, comprised of $2.3
billion of short- and long-term debt and cash on hand of $110
million. See Table 7. -- During the second quarter of 2009, Owens
Corning issued $350 million of 9.0 percent senior notes maturing in
2019 and used the proceeds to reduce outstanding amounts under the
Company's senior revolving credit facility. -- Current cash on hand
coupled with future cash flows and other sources of liquidity will
provide sufficient liquidity to meet the Company's cash
requirements. Owens Corning has no significant debt maturities
until the fourth quarter of 2011 and remains well within compliance
of the financial covenants in its senior revolving credit facility
and senior term-loan facility. -- Owens Corning's federal tax net
operating loss carryforward, primarily resulting from the
distribution of cash and stock to settle its prior Chapter 11 case
in 2006, was $2.6 billion at the end of the second quarter of 2009.
Third-quarter results are currently scheduled to be announced on
Wednesday, Oct. 28, 2009. Business Segment Highlights Composites
NET SALES This segment includes the Reinforcements business, which
manufactures, fabricates and sells glass reinforcements in the form
of fiber; and the Downstream business, which manufactures and sells
glass-fiber products in the form of fabrics, mat, veil, and other
specialized products. The rapid and significant global economic
slowdown that began in the fourth quarter of 2008 has reduced
overall demand for composite materials. This has led to lower sales
volumes in both the Reinforcements and Downstream businesses for
the three- and six-month periods ended June 30, 2009, as compared
to the same periods in the prior year. These declines represented
approximately two-thirds of the decrease in net sales for each of
the three and six months ended June 30, 2009, as compared to the
same period in the prior year. The favorable trend in demand for
Reinforcements that began in the first quarter of 2009 continued
throughout the second quarter. For each comparative period, the
remainder of the decrease in net sales was primarily a result of an
unfavorable currency impact ($48 million for the second-quarter
comparison and $89 million for the first-half comparison) and of
the May 2008 divestiture of two composite manufacturing plants in
Battice, Belgium, and Birkeland, Norway. EBIT EBIT was
significantly lower in the second quarter and first half of 2009,
compared to the same periods in 2008. Substantially all of the
segment's decrease in EBIT was the result of lower sales volumes,
including the impact of underutilization of production capacity.
The Company took aggressive actions in this segment beginning in
the first quarter of 2009 and continuing through the second quarter
to reduce inventories and operating costs by decreasing production
to levels below current demand. These lower production levels,
achieved through idling and shutting down production lines, coupled
with headcount reductions, have reduced operating costs in this
segment. Also impacting EBIT comparability for the six months ended
June 30, 2009, was the inclusion in 2008 of EBIT from the
manufacturing plants divested in May 2008. Building Materials NET
SALES This segment includes the Insulation, Roofing and Other
businesses. Despite the significant and continued downturn in the
U.S. housing market, net sales in the Building Materials segment
have decreased only 9 percent and 3 percent for the three and six
months ended June 30, 2009, respectively, compared to the same
periods in 2008. Within the Building Materials segment, net sales
decreased in the Insulation business, while net sales increased in
the Roofing business. In Roofing, selling prices have been stable
since the beginning of the fourth quarter of 2008. Leading up to
the fourth quarter of 2008, selling prices had been increasing to
recover inflation in raw material costs, particularly asphalt. The
2009 level of selling prices led to increased net sales of more
than 25 percent in the second quarter and the first half compared
to the same periods in 2008. These increases were partially offset
by lower sales volumes, which were a result of lower residential
construction activity in the U.S. and reduced storm-related demand.
In Insulation, declining demand, primarily related to the lower
level of U.S. housing starts, drove the decreases in net sales. The
Company estimates that residential insulation demand lags the start
of new residential construction by approximately three months.
First-quarter 2009 U.S. housing starts were 50 percent lower than
those in the first quarter of 2008 according to data reported by
the U.S. Census Bureau. The Insulation business includes a
diversified portfolio that softened the impact of the U.S. housing
decline on sales. This portfolio includes a geographic mix with
Canada, Asia-Pacific and Latin America as well as a market mix that
includes commercial, industrial and other non-residential markets.
Weakness has been seen in many of these markets, which became more
pronounced in the second quarter of 2009. EBIT The significant
increase in EBIT for each year-over-year period was driven by unit
margin improvements in the Roofing business. Roofing unit margins
began improving in the second quarter of 2008 as selling price
increases outpaced inflation. These improvements accounted for
substantially all of the increase in Roofing EBIT for the three and
six months ended June 30, 2009, compared to the same periods in
2008. Partially offsetting the EBIT improvements was the impact of
lower sales volumes, including the impact of underutilization of
the Company's production capacity in the Insulation business. These
lower sales volumes accounted for substantially all of the decrease
in Insulation EBIT for the three and six months ended June 30,
2009, compared to the same periods in 2008. In response to the
continued weak U.S. housing market, Owens Corning took actions
across the Building Materials segment throughout 2008 and into the
first half of 2009 to reduce production capacity and align the cost
structure with market demand. Conference Call and Presentation
Wednesday, Aug. 5, 2009 11 a.m. ET All Callers Live dial-in
telephone number: U.S. 1-800-573-4840 or 1-617-224-4326 (Please
dial in 10 minutes before conference call start time) Passcode:
87370141 Presentation To view the slide presentation during the
conference call, please log on to the live webcast at
http://www.owenscorning.com/investors. A telephone replay will be
available through Aug. 12, 2009, at 1-888-286-8010 or
1-617-801-6888. Passcode: 64843445. A replay of the webcast will
also be available at http://www.owenscorning.com/investors. 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 55 consecutive years, Owens Corning is
committed to driving sustainability by delivering solutions,
transforming markets and enhancing lives. Founded in 1938, Owens
Corning is a market-leading innovator of glass-fiber technology
with sales of $6 billion in 2008 and about 16,500 employees in 30
countries on five continents. Additional information is available
at http://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 could cause actual results to
differ materially from those projected in these statements. Such
factors include, without limitation: economic and political
conditions, including new legislation or other governmental
actions; levels of residential and commercial construction
activity; competitive factors; pricing pressures; weather
conditions; our level of indebtedness; industry and economic
conditions that adversely affect the market and operating
conditions of our customers, suppliers or lenders; availability and
cost of energy and materials; availability and cost of credit;
interest rate movements; issues involving implementation of
acquisitions, divestitures and joint ventures; our ability to use
our net operating loss carryforwards; achievement of expected
synergies, cost reductions and/or productivity improvements; issues
involving implementation of new business systems; foreign exchange
fluctuations; the success of research and development activities;
difficulties in managing production capacity; labor disputes; 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 the date Aug. 5, 2009, 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 will not be construed as
updating or confirming such information. Table 1 Owens Corning and
Subsidiaries Consolidated Statements of Earnings (unaudited) (in
millions, except per share data) Three Months Ended Six Months
Ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ----
---- ---- ---- NET SALES $1,219 $1,574 $2,293 $2,927 COST OF SALES
969 1,317 1,885 2,476 ------------- --- ----- ----- ----- Gross
margin 250 257 408 451 OPERATING EXPENSES Marketing and
administrative expenses 128 165 252 307 Science and technology
expenses 15 17 30 36 Charges related to cost reduction actions 8 4
30 6 Employee emergence equity program expense 6 7 12 14 Other
(income) expenses 5 (10) 14 (7) ----------------------- -- --- --
-- Total operating expenses 162 183 338 356
------------------------ --- --- --- --- EARNINGS BEFORE INTEREST
AND TAXES 88 74 70 95 Interest expense, net 26 29 51 61
--------------------- -- -- -- -- EARNINGS BEFORE TAXES 62 45 19 34
Income tax expense 29 2 15 4 ------------------ -- -- -- --
EARNINGS BEFORE EQUITY IN NET EARNINGS (LOSS) OF AFFILIATES 33 43 4
30 Equity in net earnings (loss) of affiliates - (1) 1 (1)
-------------------------------- -- -- -- -- NET EARNINGS 33 42 5
29 Less: Net earnings attributable to noncontrolling interests - 1
- 1 ------------------------------- -- -- -- -- NET EARNINGS
ATTRIBUTABLE TO OWENS CORNING $33 $41 $5 $28
============================ === === == === EARNINGS PER COMMON
SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS Basic $0.27
$0.32 $0.04 $0.22 Diluted $0.26 $0.32 $0.04 $0.22 WEIGHTED AVERAGE
COMMON SHARES Basic 124.5 128.8 124.4 128.8 Diluted 126.1 129.8
125.9 129.7 Owens Corning adopted SFAS No. 160 "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) (in millions) 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.
Additionally, management views net precious metal lease expense as
a financing item included in net interest expense rather than as a
product cost included in cost of sales. 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 Six Months Ended June
30, June 30,
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
Net precious metal lease expense $- $(2) $(1) $(6) Charges related
to cost reduction actions and related items (11) (4) (41) (6)
Acquisition integration and transaction costs (8) (20) (14) (32)
Gains (losses) on sales of assets and other 5 20 (2) 20 Employee
emergence equity program expense (6) (7) (12) (14) Asset
impairments - - - (10)
-------------------------------------------------------------------------
Total adjusting items $(20) $(13) $(70) $(48)
=========================================================================
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,
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING $33 $41 $5 $28 Less: Net
earnings attributable to noncontrolling interests - 1 - 1
-------------------------------------------------------------------------
NET EARNINGS 33 42 5 29 Equity in net earnings (loss) of affiliates
- (1) 1 (1)
-------------------------------------------------------------------------
EARNINGS BEFORE EQUITY IN NET EARNINGS (LOSS) OF AFFILIATES 33 43 4
30 Income tax expense 29 2 15 4 ------------------ -- -- -- --
EARNINGS BEFORE TAXES 62 45 19 34 Interest expense, net 26 29 51 61
-------------------------------------------------------------------------
EARNINGS BEFORE INTEREST AND TAXES 88 74 70 95 Less: adjusting
items from above (20) (13) (70) (48)
-------------------------------------------------------------------------
ADJUSTED EBIT $108 $87 $140 $143
=========================================================================
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. Additionally, management views net precious
metal lease expense as a financing item included in net interest
expense rather than as a product cost included in cost of sales.
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, a reconciliation from diluted
earnings per share to adjusted diluted earnings per share and a
reconciliation from weighted-average shares outstanding used for
diluted earnings per share to adjusted diluted shares outstanding
are shown in the tables below. Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
RECONCILIATION TO ADJUSTED EARNINGS Net earnings attributable to
Owens Corning $33 $41 $5 $28 Adjustment to remove adjusting items
20 13 70 48 Adjustment to classify net precious metal lease expense
as interest - (2) (1) (6) Adjustment to tax expense to reflect an
expected long-term rate of 25%* 9 (12) (7) (15)
-------------------------------------------------------------------------
ADJUSTED EARNINGS $62 $40 $67 $55
=========================================================================
RECONCILIATION TO ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE
TO OWENS CORNING COMMON STOCKHOLDERS DILUTED LOSS PER COMMON SHARE
ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS $0.27 $0.32 $0.04
$0.22 Adjustment to remove adjusting items 0.16 0.10 0.56 0.36
Adjustment to classify net precious metal lease expense as interest
- (0.02) (0.01) (0.05) Adjustment to tax expense to reflect an
expected long-term rate of 25%* 0.06 (0.09) (0.06) (0.11)
-------------------------------------------------------------------------
ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWENS CORNING
COMMON STOCKHOLDERS $0.49 $0.31 $0.53 $0.42
=========================================================================
RECONCILIATION TO ADJUSTED DILUTED SHARES OUTSTANDING
Weighted-average shares outstanding used for basic earnings per
share 124.5 128.8 124.4 128.8 Non-vested restricted shares 1.6 1.0
1.5 0.9 Shares related to employee emergence program 0.4 1.2 0.4
1.3
-------------------------------------------------------------------------
Adjusted diluted shares outstanding** 126.5 131.0 126.3 131.0
=========================================================================
*The company estimates a long-term sustainable effective tax rate
of 25% based upon the projected blend of its U.S. and non-U.S.
operations. **The employee emergence shares are reflected as
outstanding because the employee emergence equity expense has been
removed from adjusted earnings. Table 4 Owens Corning and
Subsidiaries Consolidated Balance Sheets (unaudited) (in millions)
June 30, December 31, ASSETS 2009 2008
-------------------------------------------------------------------------
CURRENT ASSETS Cash and cash equivalents $110 $236 Receivables,
less allowances of $22 at June 30, 2009 and $21 at December 31,
2008 684 576 Inventories 827 899 Restricted cash - disputed
distribution reserve 30 31 Assets held for sale - current - 13
Other current assets 105 102
-------------------------------------------------------------------------
Total current assets 1,756 1,857 Property, plant and equipment, net
2,781 2,819 Goodwill 1,124 1,124 Intangible assets 1,181 1,190
Deferred income taxes 28 42 Assets held for sale - non-current - 3
Other non-current assets 195 187
-------------------------------------------------------------------------
TOTAL ASSETS $7,065 $7,222
=========================================================================
LIABILITIES AND EQUITY
-------------------------------------------------------------------------
CURRENT LIABILITIES Accounts payable and accrued liabilities $876
$1,112 Accrued interest 10 9 Short-term debt 9 30 Long-term debt -
current portion 11 16 Liabilities held for sale - current - 8
-------------------------------------------------------------------------
Total current liabilities 906 1,175 Long-term debt, net of current
portion 2,249 2,172 Pension plan liability 300 308 Other employee
benefits liability 271 270 Deferred income taxes 406 400 Other
liabilities 121 117 Commitments and contingencies Mandatorily
redeemable noncontrolling interest 30 - 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
3,820 3,824 Accumulated deficit (798) (803) Accumulated other
comprehensive deficit (172) (183) Cost of common stock in treasury
(c) (101) (101)
-------------------------------------------------------------------------
Total Owens Corning stockholders' equity 2,750 2,738 Noncontrolling
interest 32 42
-------------------------------------------------------------------------
Total Equity 2,782 2,780
-------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $7,065 $7,222
=========================================================================
(a) 10 shares authorized; none issued or outstanding at June 30,
2009 and December 31, 2008 (b) 400 shares authorized; 132.5 issued
and 127.8 outstanding at June 30, 2009; 131.7 issued and 127.0
outstanding at December 31, 2008 (c) 4.7 shares at June 30, 2009
and December 31, 2008, respectively Table 5 Owens Corning and
Subsidiaries Consolidated Statements of Cash Flows (unaudited) (in
millions) Six Months Ended June 30,
-------------------------------------------------------------------------
2009 2008
-------------------------------------------------------------------------
NET CASH FLOW USED FOR OPERATING ACTIVITIES Net earnings $5 $29
Adjustments to reconcile net earnings to cash used for operating
activities: Depreciation and amortization 158 156 Gain on sale of
businesses and fixed assets (5) (22) Impairment of long-term assets
2 11 Deferred income taxes 13 (26) Provision for pension and other
employee benefits liabilities 22 22 Employee emergence equity
program expense 12 14 Stock-based compensation expense 6 11
Increase in receivables (108) (246) (Increase) decrease in
inventories 90 (24) Increase in prepaid assets (1) (25) Increase
(decrease) in accounts payable and accrued liabilities (235) 13
Pension fund contribution (23) (37) Payments for other employee
benefits liabilities (14) (14) Other (20) 13
-------------------------------------------------------------------------
Net cash flow used for operating activities (98) (125)
-------------------------------------------------------------------------
NET CASH FLOW PROVIDED BY (USED FOR) INVESTING ACTIVITIES Additions
to plant and equipment (95) (147) Proceeds from the sale of assets
or affiliates 20 225
-------------------------------------------------------------------------
Net cash flow provided by (used for) investing activities (75) 78
-------------------------------------------------------------------------
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES Proceeds from
issuance of senior notes 344 - Proceeds from senior revolving
credit facility 259 275 Payments on senior revolving credit
facility (527) (230) Proceeds from long-term debt 1 12 Payments on
long-term debt (11) (6) Net decrease in short-term debt (21) (5)
Purchase of treasury stock - (19)
-------------------------------------------------------------------------
Net cash flow provided by financing activities 45 27
-------------------------------------------------------------------------
Effect of exchange rate changes on cash 2 6 Net decrease in cash
and cash equivalents (126) (14) Cash and cash equivalents at
beginning of period 236 135
-------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $110 $121
=========================================================================
Table 6 Owens Corning and Subsidiaries Segment Data and Additional
Business Information (unaudited) (in millions) Composites The table
below provides a summary of net sales, EBIT and depreciation and
amortization expense for the Composites segment (in millions).
Prior periods have been adjusted to reflect the change to two
reportable segments. Three Months Ended Six Months Ended June 30,
June 30,
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
Net sales $391 $660 $736 $1,326 % change from prior year -41% 70%
-44% 76% EBIT $(19) $71 $(37) $135 EBIT as a % of net sales -5% 11%
-5% 10% Depreciation and amortization expense $26 $34 $61 $64
-------------------------------------------------------------------------
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). Prior periods have been adjusted to reflect the change
to two reportable segments. Three Months Ended Six Months Ended
June 30, June 30,
-------------------------------------------------------------------------
2009 2008 2009 2008
-------------------------------------------------------------------------
Net sales Insulation $284 $413 $566 $786 Roofing 542 475 999 782
Other 42 69 72 122 Eliminations (3) (4) (6) (8)
-------------------------------------------------------------------------
Total Building Materials $865 $953 $1,631 $1,682 % change from
prior year -9% 1% -3% -3% EBIT Insulation $(28) $7 $(67) $23
Roofing 182 37 281 20 Other (11) (5) (18) (8)
-------------------------------------------------------------------------
Total Building Materials $143 $39 $196 $35 EBIT as a % of net sales
17% 4% 12% 2% Depreciation and amortization expense Insulation $29
$28 $59 $58 Roofing 11 9 22 19 Other 4 3 7 6
-------------------------------------------------------------------------
Total Building Materials $44 $40 $88 $83
-------------------------------------------------------------------------
Table 7 Owens Corning and Subsidiaries Free Cash Flow (unaudited)
(in millions) The following table presents the free cash flow, or
change in total debt less cash on hand including adjustments to
exclude the cash impact of issuing new stock, repurchasing treasury
stock and paying stockholder dividends, for the three and six
months ended June 30, 2009 and 2008, respectively (in millions):
Three Months Ended June 30,
-------------------------------------------------------------------------
Balance as of June 30: 2009 2008
-------------------------------------------------------------------------
Short-term debt $9 $44 Long-term debt -- current portion 11 7
Long-term debt, net of current portion 2,249 2,049
-------------------------------------------------------------------------
Total debt 2,269 2,100 Less: Cash and cash equivalents 110 121
-------------------------------------------------------------------------
Net debt 2,159 1,979
-------------------------------------------------------------------------
Balance as of March 31: 2009 2008
-------------------------------------------------------------------------
Short-term debt 18 32 Long-term debt -- current portion 14 13
Long-term debt, net of current portion 2,366 2,138
-------------------------------------------------------------------------
Total debt 2,398 2,183 Less: Cash and cash equivalents 90 118
-------------------------------------------------------------------------
Net debt 2,308 2,065
-------------------------------------------------------------------------
Change in net debt 149 86 Less: Purchases of treasury stock for the
three months ended June 30, 2008 - (19)
-------------------------------------------------------------------------
Free cash flow generated $149 $105
=========================================================================
Six Months Ended June 30,
-------------------------------------------------------------------------
Balance as of June 30: 2009 2008
-------------------------------------------------------------------------
Short-term debt $9 $44 Long-term debt -- current portion 11 7
Long-term debt, net of current portion 2,249 2,049
-------------------------------------------------------------------------
Total debt 2,269 2,100 Less: Cash and cash equivalents 110 121
-------------------------------------------------------------------------
Net debt 2,159 1,979
-------------------------------------------------------------------------
Balance as of December 31: 2008 2007
-------------------------------------------------------------------------
Short-term debt 30 47 Long-term debt -- current portion 16 10
Long-term debt, net of current portion 2,172 1,993
-------------------------------------------------------------------------
Total debt 2,218 2,050 Less: Cash and cash equivalents 236 135
-------------------------------------------------------------------------
Net debt 1,982 1,915
-------------------------------------------------------------------------
Change in net debt (177) (64) Less: Purchases of treasury stock for
the six months ended June 30, 2008 - (19)
-------------------------------------------------------------------------
Free cash flow used $(177) $(45)
=========================================================================
DATASOURCE: Owens Corning CONTACT: Scott Deitz, Investor &
Media Relations, Owens Corning, +1-419-248-8935 Web Site:
http://www.owenscorning.com/
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