Business Wire | Jul 28, 2021 06:03AM EDT

Owens Corning Reports Second-Quarter 2021 Results

Jul. 28, 2021

TOLEDO, Ohio--(BUSINESS WIRE)--Jul. 28, 2021--Owens Corning (NYSE: OC) today reported consolidated net sales of $2.2 billion in second-quarter 2021, compared with $1.6 billion in second-quarter 2020, an increase of 38%.

Second-quarter 2021 net earnings attributable to Owens Corning were $298 million, or $2.82 per diluted share, compared with $96 million, or $0.88 per diluted share, in second-quarter 2020.

Second-quarter 2021 adjusted earnings were $274 million, or $2.60 per diluted share, compared with $99 million, or $0.91 per diluted share, during the same period one year ago. Second-quarter 2021 adjusted EBIT was $408 million, compared with $167 million in the same period in 2020. (See Use of Non-GAAP Measures, See Tables 2 and 3.)

"Owens Corning delivered another outstanding quarter generating record results with all three businesses continuing to perform well in a dynamic market environment," said Chair and Chief Executive Officer Brian Chambers. "These results were driven by strong, consistent commercial and operational execution and demonstrate the exceptional capability of our global team and earnings power of our company."

Return of Capital and Liquidity

* In June, Owens Corning announced that its Board of Directors declared a quarterly cash dividend of $0.26 per common share. The dividend will be payable on August 6 to shareholders of record as of July 16. In second-quarter 2021, the company repurchased 1.3 million shares of common stock for $131 million. Through June 30, 2021, the company returned $318 million to shareholders in share repurchases and dividends. As of the end of the quarter, 6.6 million shares were available for repurchase under the current authorization.

* Owens Corning maintains a strong balance sheet, access to liquidity, and a well-structured debt maturity profile. The company finished second-quarter 2021 with $2.0 billion of available liquidity, inclusive of $888 million in cash and cash equivalents.

"In the first half of the year, we generated $702 million of operating cash flow and $525 million of free cash flow," said Executive Vice President and Chief Financial Officer Ken Parks. "We remain committed to maintaining our investment-grade balance sheet and to returning at least 50% of free cash flow to shareholders through dividends and share repurchases. Our strong and consistent cash generation combined with our solid financial position provide us the flexibility to execute on our business strategies."

Other Highlights

* Owens Corning sustained a high level of safety performance in second-quarter 2021, with a recordable incident rate of 0.51, a 36% improvement over second-quarter 2020.

* In May, Owens Corning ranked No. 1 on the 100 Best Corporate Citizens list for 2021, which recognizes outstanding environmental, social and governance (ESG) transparency and performance among the largest, publicly traded U.S. companies. The company was also No. 1 in 2020 and 2019, making it the first to earn the top ranking for three consecutive years.

* On July 13, the company announced the acquisition of vliepa GmbH, which specializes in the coating, printing and finishing of nonwovens, paper and film for the building materials industry. The acquisition broadens Owens Corning's significant global nonwovens portfolio to better serve European customers and accelerate growth of building and construction market applications in the region.

* On July 28, Owens Corning entered into an agreement to sell the company's Insulation site in Santa Clara, California, to commercial real estate developer Panattoni. The company expects to continue operations at this facility through third-quarter 2022 and complete the transaction in first-quarter 2023. This action is part of the company's ongoing strategy to operate a flexible, cost-efficient manufacturing network and geographically locate its assets to better service its customers. The company continues to invest in capacity to serve the market, including in its Nephi, Utah, and Eloy, Arizona, facilities.

* Owens Corning will host an Investor Day at its world headquarters in Toledo, Ohio, on Wednesday, November 10th. The company will also provide a live webcast. More details will be given in the coming months.

2021 Outlook

* The key economic factors that impact the company's businesses are residential repair and remodeling activity, U.S. housing starts, global commercial construction activity, and global industrial production.

* In the near term, the company expects the U.S. residential housing market to remain robust and global commercial and industrial markets to continue to strengthen. The company continues to closely monitor and manage the regional impacts of the COVID-19 pandemic on its businesses.

* General corporate expenses are now estimated to be between $150 million and $155 million, compared with its previous estimate of $135 million and $145 million.

* Capital additions are expected to be approximately $460 million. Depreciation and amortization is now estimated to be approximately $500 million, up from $480 million.

* Interest expense is estimated to be between $120 million and $130 million.

* The company estimates an effective tax rate of 26% to 28%, and a cash tax rate of 18% to 20%, both on adjusted pre-tax earnings.

Second-Quarter 2021 Conference Call and Presentation

Wednesday, July 28, 2021 9 a.m. Eastern 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: 1186698 (Please dial in 10-15 minutes before conference call start time) * Live webcast: https://services.choruscall.com/links/oc210728.html

Telephone and Webcast Replay

* Telephone replay will be available one hour after the end of the call through August 4, 2021. 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: 10157724. * Webcast replay will be available for one year using the above link.

About Owens Corning

Owens Corning is a global building and industrial materials leader. The company's three integrated businesses are dedicated to the manufacture and advancement of a broad range of insulation, roofing and fiberglass composite materials. Leveraging the talents of 19,000 employees in 33 countries, Owens Corning provides innovative products and sustainable solutions that address energy efficiency, product safety, renewable energy, durable infrastructure, and labor productivity. These solutions provide a material difference to the company's customers and make the world a better place. Based in Toledo, Ohio, USA, the company posted 2020 sales of $7.1 billion. Founded in 1938, it has been a Fortune 500(r) company for 67 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, free cash flow and free cash flow conversion. 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. As a conversion ratio, free cash flow is compared to adjusted earnings. Free cash flow and free cash flow conversion are 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 these measures provide a useful representation of our operational performance and liquidity; however, the measures should not be considered in isolation or as a substitute for net cash flow provided by operating activities or net earnings attributable to Owens Corning as prepared in accordance with GAAP.

When the company provides forward-looking expectations for non-GAAP measures, 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 any results projected in the statements. These risks, uncertainties and other factors include, without limitation: the severity and duration of the current COVID-19 pandemic on our operations, customers and suppliers, as well as related actions taken by governmental authorities and other third parties in response, each of which is uncertain, rapidly changing and difficult to predict; levels of residential, commercial and industrial construction activity; levels of global industrial production; competitive and pricing factors; demand for our products; relationships with key customers; availability and cost of energy, transportation, raw materials or other inputs; issues related to acquisitions, divestitures, joint ventures or expansions; domestic and international economic and political conditions, including new legislation, policies or other governmental actions in the U.S. or elsewhere; industry and economic conditions that affect the market and operating conditions of our customers, suppliers or lenders; climate change, weather conditions and storm activity; changes to tariff, trade or investment policies or laws; uninsured losses, including those from natural disasters, pandemics, catastrophe, theft or sabotage; legal and regulatory proceedings, including litigation and environmental actions; research and development activities and intellectual property protection; issues involving implementation and protection of Information technology systems; achievement of expected synergies, cost reductions and/or productivity improvements; the level of fixed costs required to run our business; foreign exchange and commodity price fluctuations; our level of indebtedness; our liquidity and the availability and cost of credit; levels of goodwill or other indefinite-lived intangible assets; price volatility in certain wind energy markets in the U.S.; loss of key employees, labor disputes or shortages; 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 28, 2021, 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 Company News / 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 Six Months Ended June 30, June 30,

2021 2020 2021 2020

NET SALES $ 2,239 $ 1,625 $ 4,154 $ 3,226

COST OF SALES 1,621 1,282 3,092 2,577

Gross margin 618 343 1,062 649

OPERATING EXPENSES

Marketing and administrative 188 151 362 330 expenses

Science and technology expenses 22 18 42 39

Goodwill impairment charge - - - 944

Other (income) expenses, net (17 ) 6 (65 ) 38

Total operating expenses 193 175 339 1,351

OPERATING INCOME (LOSS) 425 168 723 (702 )

Non-operating income (3 ) (3 ) (6 ) (7 )

EARNINGS (LOSS) BEFORE INTEREST 428 171 729 (695 )AND TAXES

Interest expense, net 33 36 66 63

EARNINGS (LOSS) BEFORE TAXES 395 135 663 (758 )

Income tax expense 97 39 156 63

Equity in net (loss) earnings of - (1 ) 1 - affiliates

NET EARNINGS (LOSS) 298 95 508 (821 )

Net loss attributable to - (1 ) - - noncontrolling interests

NET EARNINGS (LOSS) ATTRIBUTABLE $ 298 $ 96 $ 508 $ (821 )TO OWENS CORNING

EARNINGS (LOSS) PER COMMON SHAREATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS

Basic $ 2.85 $ 0.88 $ 4.84 $ (7.55 )

Diluted $ 2.82 $ 0.88 $ 4.80 $ (7.55 )

WEIGHTED AVERAGE COMMON SHARES

Basic 104.6 108.6 105.0 108.7

Diluted 105.5 108.9 105.9 108.7

Table 2

Owens Corning and Subsidiaries

EBIT Reconciliation Schedules

(unaudited)

Adjusting income (expense) items to EBIT are shown in the table below (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Restructuring costs

$

(1

)

$

(5

)

$

(2

)

$

(10

)

Gains on sale of certain precious metals

21

9

41

19

Goodwill impairment charge

-

-

-

(944

)

Intangible assets impairment charge

-

-

-

(43

)

Total adjusting items

$

20

$

4

$

39

$

(978

)

The reconciliation from Net earnings (loss) attributable to Owens Corning to EBIT and to Adjusted EBIT is shown in the table below (in millions):

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

NET EARNINGS (LOSS) ATTRIBUTABLE TO OWENS CORNING

$

298

$

96

$

508

$

(821

)

Net loss attributable to noncontrolling interests

-

(1

)

-

-

NET EARNINGS (LOSS)

298

95

508

(821

)

Equity in net (loss) earnings of affiliates

-

(1

)

1

-

Income tax expense

97

39

156

63

EARNINGS (LOSS) BEFORE TAXES

395

135

663

(758

)

Interest expense, net

33

36

66

63

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

428

171

729

(695

)

Adjusting items from above

20

4

39

(978

)

ADJUSTED EBIT

$

408

$

167

$

690

$

283





Table 2

Owens Corning and Subsidiaries

EBIT Reconciliation Schedules

(unaudited)



Adjusting income (expense) items to EBIT are shown in the table below (inmillions):

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Restructuring costs $ (1 ) $ (5 ) $ (2 ) $ (10 )

Gains on sale of certain precious 21 9 41 19 metals

Goodwill impairment charge - - - (944 )

Intangible assets impairment charge - - - (43 )

Total adjusting items $ 20 $ 4 $ 39 $ (978 )

The reconciliation from Net earnings (loss) attributable to Owens Corning toEBIT and to Adjusted EBIT is shown in the table below (in millions):

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

NET EARNINGS (LOSS) ATTRIBUTABLE TO $ 298 $ 96 $ 508 $ (821 )OWENS CORNING

Net loss attributable to - (1 ) - - noncontrolling interests

NET EARNINGS (LOSS) 298 95 508 (821 )

Equity in net (loss) earnings of - (1 ) 1 - affiliates

Income tax expense 97 39 156 63

EARNINGS (LOSS) BEFORE TAXES 395 135 663 (758 )

Interest expense, net 33 36 66 63

EARNINGS (LOSS) BEFORE INTEREST AND 428 171 729 (695 )TAXES

Adjusting items from above 20 4 39 (978 )

ADJUSTED EBIT $ 408 $ 167 $ 690 $ 283

Table 3

Owens Corning and Subsidiaries

EPS Reconciliation Schedules

(unaudited)

(in millions, except per share data)

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 June 30,

Six Months Ended June 30,

2021

2020

2021

2020

RECONCILIATION TO ADJUSTED EARNINGS

NET EARNINGS (LOSS) ATTRIBUTABLE TO OWENS CORNING

$

298

$

96

$

508

$

(821

)

Adjustment to remove adjusting items (a)

(20

)

(4

)

(39

)

978

Adjustment to remove tax expense/(benefit) on adjusting items (b)

4

2

9

(16

)

Adjustment to remove significant tax items (c)

-

-

-

18

Adjustment to tax expense to reflect pro forma tax rate (d)

(8

)

5

(21

)

7

ADJUSTED EARNINGS

$

274

$

99

$

457

$

166

RECONCILIATION TO ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS

DILUTED EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS

$

2.82

$

0.88

$

4.80

$

(7.55

)

Adjustment to remove adjusting items (a)

(0.19

)

(0.04

)

(0.37

)

9.00

Adjustment to remove tax expense/(benefit) on adjusting items (b)

0.04

0.02

0.08

(0.15

)

Adjustment to remove significant tax items (c)

-

-

-

0.17

Adjustment to tax expense to reflect pro forma tax rate (d)

(0.07

)

0.05

(0.19

)

0.06

ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS

$

2.60

$

0.91

$

4.32

$

1.53

RECONCILIATION TO DILUTED SHARES OUTSTANDING

Weighted-average number of shares outstanding used for basic earnings per share

104.6

108.6

105.0

108.7

Non-vested restricted and performance shares

0.8

0.2

0.8

-

Options to purchase common stock

0.1

0.1

0.1

-

Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings (loss) per share

105.5

108.9

105.9

108.7





Table 3

Owens Corning and Subsidiaries

EPS Reconciliation Schedules

(unaudited)

(in millions, except per share data)



A reconciliation from Net earnings (loss) attributable to Owens Corning toadjusted earnings and a reconciliation from diluted earnings (loss) per shareto adjusted diluted earnings per share are shown in the tables below:

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

RECONCILIATION TO ADJUSTED EARNINGS

NET EARNINGS (LOSS) ATTRIBUTABLE $ 298 $ 96 $ 508 $ (821 )TO OWENS CORNING

Adjustment to remove adjusting (20 ) (4 ) (39 ) 978 items (a)

Adjustment to remove tax expense/(benefit) on adjusting items 4 2 9 (16 )(b)

Adjustment to remove significant - - - 18 tax items (c)

Adjustment to tax expense to (8 ) 5 (21 ) 7 reflect pro forma tax rate (d)

ADJUSTED EARNINGS $ 274 $ 99 $ 457 $ 166



RECONCILIATION TO ADJUSTEDDILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWENS CORNINGCOMMON STOCKHOLDERS

DILUTED EARNINGS (LOSS) PERCOMMON SHARE ATTRIBUTABLE TO $ 2.82 $ 0.88 $ 4.80 $ (7.55 )OWENS CORNING COMMONSTOCKHOLDERS

Adjustment to remove adjusting (0.19 ) (0.04 ) (0.37 ) 9.00 items (a)

Adjustment to remove tax expense/(benefit) on adjusting items 0.04 0.02 0.08 (0.15 )(b)

Adjustment to remove significant - - - 0.17 tax items (c)

Adjustment to tax expense to (0.07 ) 0.05 (0.19 ) 0.06 reflect pro forma tax rate (d)

ADJUSTED DILUTED EARNINGS PERSHARE ATTRIBUTABLE TO OWENS $ 2.60 $ 0.91 $ 4.32 $ 1.53 CORNING COMMON STOCKHOLDERS



RECONCILIATION TO DILUTED SHARES OUTSTANDING

Weighted-average number ofshares outstanding used for 104.6 108.6 105.0 108.7 basic earnings per share

Non-vested restricted and 0.8 0.2 0.8 - performance shares

Options to purchase common stock 0.1 0.1 0.1 -

Weighted-average number ofshares outstanding and commonequivalent shares used for 105.5 108.9 105.9 108.7 diluted earnings (loss) pershare

(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)

There were no significant tax items in the first six months of 2021. For comparability, significant tax items in 2020 include the impact of a change in valuation allowances recorded against certain deferred tax assets.

(d)

To compute adjusted earnings, we apply a full year pro forma effective tax rate to each quarter presented. For 2021, we have used a full year pro forma effective tax rate of 27%, which is the mid-point of our 2021 effective tax rate guidance of 26% to 28%, excluding the adjusting items referenced in (a), (b) and (c). For comparability, in 2020, we have used an effective tax rate of 24%, which was our 2020 effective tax rate, excluding the adjusting items referenced in (a), (b) and (c).

(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.

There were no significant tax items in the first six months of 2021. For(c) comparability, significant tax items in 2020 include the impact of a change in valuation allowances recorded against certain deferred tax assets.

To compute adjusted earnings, we apply a full year pro forma effective tax rate to each quarter presented. For 2021, we have used a full year pro forma effective tax rate of 27%, which is the mid-point of our 2021(d) effective tax rate guidance of 26% to 28%, excluding the adjusting items referenced in (a), (b) and (c). For comparability, in 2020, we have used an effective tax rate of 24%, which was our 2020 effective tax rate, excluding the adjusting items referenced in (a), (b) and (c).

Table 4

Owens Corning and Subsidiaries

Consolidated Balance Sheets

(unaudited)

(in millions, except per share data)

ASSETS

June 30,2021

December 31,2020

CURRENT ASSETS

Cash and cash equivalents

$

888

$

717

Receivables, less allowance of $10 at both June 30, 2021 and December 31, 2020

1,226

919

Inventories

887

855

Other current assets

123

115

Total current assets

3,124

2,606

Property, plant and equipment, net

3,791

3,809

Operating lease right-of-use assets

145

154

Goodwill

985

989

Intangible assets

1,634

1,667

Deferred income taxes

33

28

Other non-current assets

265

228

TOTAL ASSETS

$

9,977

$

9,481

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Current operating lease liabilities

$

53

$

55

Other current liabilities

1,584

1,385

Total current liabilities

1,637

1,440

Long-term debt, net of current portion

3,144

3,126

Pension plan liability

153

159

Other employee benefits liability

169

171

Non-current operating lease liabilities

92

99

Deferred income taxes

370

332

Other liabilities

256

213

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

4,064

4,059

Accumulated earnings

2,282

1,829

Accumulated other comprehensive deficit

(593

)

(588

)

Cost of common stock in treasury (c)

(1,637

)

(1,400

)

Total Owens Corning stockholders' equity

4,117

3,901

Noncontrolling interests

39

40

Total equity

4,156

3,941

TOTAL LIABILITIES AND EQUITY

$

9,977

$

9,481





Table 4

Owens Corning and Subsidiaries

Consolidated Balance Sheets

(unaudited)

(in millions, except per share data)

June 30, DecemberASSETS 2021 31, 2020

CURRENT ASSETS

Cash and cash equivalents $ 888 $ 717

Receivables, less allowance of $10 at both June 30, 1,226 919 2021 and December 31, 2020

Inventories 887 855

Other current assets 123 115

Total current assets 3,124 2,606

Property, plant and equipment, net 3,791 3,809

Operating lease right-of-use assets 145 154

Goodwill 985 989

Intangible assets 1,634 1,667

Deferred income taxes 33 28

Other non-current assets 265 228

TOTAL ASSETS $ 9,977 $ 9,481

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Current operating lease liabilities $ 53 $ 55

Other current liabilities 1,584 1,385

Total current liabilities 1,637 1,440

Long-term debt, net of current portion 3,144 3,126

Pension plan liability 153 159

Other employee benefits liability 169 171

Non-current operating lease liabilities 92 99

Deferred income taxes 370 332

Other liabilities 256 213

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 4,064 4,059

Accumulated earnings 2,282 1,829

Accumulated other comprehensive deficit (593 ) (588 )

Cost of common stock in treasury (c) (1,637 ) (1,400 )

Total Owens Corning stockholders' equity 4,117 3,901

Noncontrolling interests 39 40

Total equity 4,156 3,941

TOTAL LIABILITIES AND EQUITY $ 9,977 $ 9,481

(a)

10 shares authorized; none issued or outstanding at June 30, 2021, and December 31, 2020

(b)

400 shares authorized; 135,500,000 issued and 103.3 outstanding at June 30, 2021; 135,500,000.0 issued and 105.6 outstanding at December 31, 2020

(c)

32.2 shares at June 30, 2021, and 29.9 shares at December 31, 2020

(a) 10 shares authorized; none issued or outstanding at June 30, 2021, and December 31, 2020

(b) 400 shares authorized; 135,500,000 issued and 103.3 outstanding at June 30, 2021; 135,500,000.0 issued and 105.6 outstanding at December 31, 2020

(c) 32.2 shares at June 30, 2021, and 29.9 shares at December 31, 2020

Table 5

Owens Corning and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

(in millions)

Six Months Ended June 30,

2021

2020

NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES

Net earnings (loss)

$

508

$

(821

)

Adjustments to reconcile net earnings (loss) to cash provided by operating activities:

Depreciation and amortization

241

232

Deferred income taxes

35

48

Provision for pension and other employee benefits liabilities

-

(1

)

Stock-based compensation expense

24

20

Goodwill impairment charge

-

944

Intangible assets impairment charge

-

43

Other adjustments to reconcile net earnings (loss) to cash provided by operating activities

(32

)

(20

)

Changes in operating assets and liabilities

(62

)

(191

)

Pension fund contribution

(3

)

(12

)

Payments for other employee benefits liabilities

(6

)

(7

)

Other

(3

)

(6

)

Net cash flow provided by operating activities

702

229

NET CASH FLOW USED FOR INVESTING ACTIVITIES

Cash paid for property, plant, and equipment

(177

)

(140

)

Proceeds from the sale of assets or affiliates

1

38

Derivative settlements

(32

)

48

Other

(5

)

-

Net cash flow used for investing activities

(213

)

(54

)

NET CASH FLOW (USED FOR) PROVIDED BY FINANCING ACTIVITIES

Proceeds from long-term debt

-

297

Proceeds from senior revolving credit and receivables securitization facilities

-

736

Payments on senior revolving credit and receivables securitization facilities

-

(546

)

Payments on term loan borrowing

-

(50

)

Net decrease in short-term debt

-

(17

)

Dividends paid

(55

)

(52

)

Purchases of treasury stock

(263

)

(96

)

Other

(2

)

(7

)

Net cash flow (used for) provided by financing activities

(320

)

265

Effect of exchange rate changes on cash

2

(30

)

Net increase in cash, cash equivalents, and restricted cash

171

410

Cash, cash equivalents and restricted cash at beginning of period

724

179

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD

$

895

$

589





Table 5

Owens Corning and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

(in millions)

Six Months Ended June 30,

2021 2020

NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES

Net earnings (loss) $ 508 $ (821 )

Adjustments to reconcile net earnings (loss) to cash provided by operating activities:

Depreciation and amortization 241 232

Deferred income taxes 35 48

Provision for pension and other employee benefits - (1 )liabilities

Stock-based compensation expense 24 20

Goodwill impairment charge - 944

Intangible assets impairment charge - 43

Other adjustments to reconcile net earnings (loss) to cash (32 ) (20 )provided by operating activities

Changes in operating assets and liabilities (62 ) (191 )

Pension fund contribution (3 ) (12 )

Payments for other employee benefits liabilities (6 ) (7 )

Other (3 ) (6 )

Net cash flow provided by operating activities 702 229

NET CASH FLOW USED FOR INVESTING ACTIVITIES

Cash paid for property, plant, and equipment (177 ) (140 )

Proceeds from the sale of assets or affiliates 1 38

Derivative settlements (32 ) 48

Other (5 ) -

Net cash flow used for investing activities (213 ) (54 )

NET CASH FLOW (USED FOR) PROVIDED BY FINANCING ACTIVITIES

Proceeds from long-term debt - 297

Proceeds from senior revolving credit and receivables - 736 securitization facilities

Payments on senior revolving credit and receivables - (546 )securitization facilities

Payments on term loan borrowing - (50 )

Net decrease in short-term debt - (17 )

Dividends paid (55 ) (52 )

Purchases of treasury stock (263 ) (96 )

Other (2 ) (7 )

Net cash flow (used for) provided by financing activities (320 ) 265

Effect of exchange rate changes on cash 2 (30 )

Net increase in cash, cash equivalents, and restricted cash 171 410

Cash, cash equivalents and restricted cash at beginning of 724 179 period

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 895 $ 589

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,

2021

2020

2021

2020

Net sales

$

583

$

398

$

1,142

$

892

% change from prior year

46

%

-26

%

28

%

-15

%

EBIT

$

98

$

6

$

177

$

50

EBIT as a % of net sales

17

%

2

%

15

%

6

%

Depreciation and amortization expense

$

39

$

39

$

77

$

77

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,

2021

2020

2021

2020

Net sales

$

806

$

595

$

1,506

$

1,198

% change from prior year

35

%

-10

%

26

%

-4

%

EBIT

$

112

$

32

$

194

$

71

EBIT as a % of net sales

14

%

5

%

13

%

6

%

Depreciation and amortization expense

$

53

$

49

$

104

$

98

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,

2021

2020

2021

2020

Net sales

$

917

$

677

$

1,628

$

1,232

% change from prior year

35

%

-13

%

32

%

-11

%

EBIT

$

234

$

148

$

390

$

212

EBIT as a % of net sales

26

%

22

%

24

%

17

%

Depreciation and amortization expense

$

14

$

15

$

29

$

29





Table 6

Owens Corning and Subsidiaries

Segment Information

(unaudited)

Composites

The table below provides a summary of net sales, EBIT and depreciation andamortization expense for the Composites segment (in millions):

Three Months Six Months Ended Ended June 30, June 30,

2021 2020 2021 2020

Net sales $ 583 $ 398 $ 1,142 $ 892

% change from prior year 46 % -26 % 28 % -15 %

EBIT $ 98 $ 6 $ 177 $ 50

EBIT as a % of net sales 17 % 2 % 15 % 6 %

Depreciation and amortization $ 39 $ 39 $ 77 $ 77 expense

Insulation

The table below provides a summary of net sales, EBIT and depreciation andamortization expense for the Insulation segment (in millions):

Three Months Six Months Ended Ended June 30, June 30,

2021 2020 2021 2020

Net sales $ 806 $ 595 $ 1,506 $ 1,198

% change from prior year 35 % -10 % 26 % -4 %

EBIT $ 112 $ 32 $ 194 $ 71

EBIT as a % of net sales 14 % 5 % 13 % 6 %

Depreciation and amortization $ 53 $ 49 $ 104 $ 98 expense

Roofing

The table below provides a summary of net sales, EBIT and depreciation andamortization expense for the Roofing segment (in millions):

Three Months Six Months Ended Ended June 30, June 30,

2021 2020 2021 2020

Net sales $ 917 $ 677 $ 1,628 $ 1,232

% change from prior year 35 % -13 % 32 % -11 %

EBIT $ 234 $ 148 $ 390 $ 212

EBIT as a % of net sales 26 % 22 % 24 % 17 %

Depreciation and amortization $ 14 $ 15 $ 29 $ 29 expense

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,

2021

2020

2021

2020

Restructuring costs

$

(1

)

$

(5

)

$

(2

)

$

(10

)

Gains on sale of certain precious metals

21

9

41

19

Goodwill impairment charge

-

-

-

(944

)

Intangible assets impairment charge

-

-

-

(43

)

General corporate expense and other

(36

)

(19

)

(71

)

(50

)

EBIT

$

(16

)

$

(15

)

$

(32

)

$

(1,028

)

Depreciation and amortization

$

16

$

13

$

31

$

28





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 amortizationexpense for the Corporate, Other and Eliminations category (in millions):

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Restructuring costs $ (1 ) $ (5 ) $ (2 ) $ (10 )

Gains on sale of certain precious 21 9 41 19 metals

Goodwill impairment charge - - - (944 )

Intangible assets impairment charge - - - (43 )

General corporate expense and other (36 ) (19 ) (71 ) (50 )

EBIT $ (16 ) $ (15 ) $ (32 ) $ (1,028 )

Depreciation and amortization $ 16 $ 13 $ 31 $ 28

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,

2021

2020

2021

2020

NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES

$

498

$

281

$

702

$

229

Less: Cash paid for property, plant and equipment

(93

)

(48

)

(177

)

(140

)

FREE CASH FLOW

$

405

$

233

$

525

$

89

View source version on businesswire.com: https://www.businesswire.com/news/home/20210728005310/en/

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