TOLEDO, Ohio, Oct. 28 /PRNewswire-FirstCall/ -- Owens Corning (NYSE: OC) today reported consolidated net sales of $1.3 billion during the third quarter of 2009, compared with $1.6 billion in the third quarter of 2008.
The third quarter was highlighted by continued outstanding performance in the Company's Roofing business. Composites returned to profitability due to successful cost-reduction actions and steadily improving Composites demand.
Owens Corning's third-quarter 2009 adjusted earnings were $78 million, or $0.61 per adjusted diluted share, compared with $73 million, or $0.57 per adjusted diluted share, in 2008. The Company reported third-quarter 2009 net earnings of $80 million, or $0.63 per diluted share, compared with a loss of $807 million, or a loss of $6.35 per diluted share, in 2008, which included a non-cash charge of $901 million to establish an accounting valuation allowance against net U.S. deferred tax assets related to net operating losses. See Tables 1 through 3 for a discussion and reconciliation of these items.
Consolidated Third-Quarter 2009 Results
- Earnings Before Interest and Taxes (EBIT) for the third quarter ended Sept. 30, 2009, were $120 million, compared with EBIT of $113 million during the same period in 2008. Adjusted EBIT for the third quarter of 2009 was $135 million, compared with $126 million in the third quarter of 2008. See Table 2.
- EBIT was $190 million for the first nine months of 2009, compared with EBIT of $208 million during the same period of 2008. Adjusted EBIT for the first nine months of 2009 was $275 million, compared with $269 million during the same period of 2008.
- The Company generated $332 million in free cash flow during the third quarter of 2009, compared with $8 million during the same quarter in 2008. See Table 7.
- Gross margin as a percentage of sales was 21 percent in the third quarter of 2009, compared with 17 percent in the same period of 2008.
- Third-quarter 2009 Marketing and Administrative expenses were $16 million less than the same period in 2008.
- In the nine months ended Sept. 30, 2009, the Company's safety performance improved approximately 8 percent compared with performance throughout 2008.
"I'm pleased with our excellent third-quarter results," said Mike Thaman, chairman and chief executive officer. "The aggressive actions we've taken to reduce our costs and inventory are paying off. We sustained strong financial performance and generated significant cash flow driven by our outstanding results in Roofing. Our Composites segment returned to profitability. Our balance sheet remains strong. We will maintain our focus on cash generation and finish the year well-positioned to enter 2010."
Outlook
Owens Corning is on track to surpass $160 million in cost savings during 2009. The Company is also on track to meet its capital spending target of $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.
Given the Company's strong cash generation in the third quarter, free cash flow in 2009 could be as much as $300 million. This represents a strengthening from the Company's prior guidance. Free cash flow for the period is calculated as the change in debt less cash on hand from the beginning of the period to the end of the period. This calculation includes adjustments to exclude the cash impact of issuing new stock, repurchasing treasury stock and paying stockholder dividends.
In the Composites segment, the Company believes demand will generally continue to trend upward as global industrial demand improves. Owens Corning has begun increasing production, although production still remains below demand. The Composites segment will continue to realize the benefits of synergies from the 2007 acquisition and the cost-reduction actions taken in 2008 and 2009.
Demand in the Company's Building Materials segment is expected to be affected through the remainder of 2009 by weakness in the U.S. housing industry. Roofing performance is expected to more than offset weakness in Insulation for the remainder of the year.
Cash taxes in 2009 are expected to be less than the $33 million paid in 2008. The Company estimates a long-term effective tax rate of 25 percent based on the blend of its U.S. and non-U.S. operations.
Fourth-quarter and full-year 2009 results are scheduled to be announced on Wednesday, Feb. 17, 2010.
Other Financial Items
- In the third quarter and first nine months of 2009, actions were taken that will result in significant cost savings during the year. Costs related to these actions were $4 million in the third quarter of 2009 and total $45 million for the first nine months of the year.
- At the end of the third quarter of this year, Owens Corning had net debt of $1.8 billion, comprised of $2.2 billion of short- and long-term debt and cash on hand of $387 million. See Table 7.
- 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 with the financial covenants in its senior revolving credit facility and senior term-loan facility.
- Owens Corning's federal tax net operating loss carryforward was $2.6 billion at the end of the third quarter of 2009.
- On Oct. 8, 2009, Standard & Poor's Ratings Services affirmed its BBB- rating on Owens Corning and improved the outlook to stable from negative.
Business Segment Highlights
Composites
NET SALES
The rapid and significant global economic slowdown in the fourth quarter of 2008 dramatically reduced overall demand for composite materials. Demand for the Company's Reinforcements products was approximately 45-percent lower in December 2008, compared to the average monthly demand in 2008 through November. Demand has been steadily trending upward since that time, but it has not yet recovered to levels seen in the first nine months of 2008. These declines represented approximately one-half, and approximately two-thirds, of the decrease in net sales for each of the three and nine months ended Sept. 30, 2009, respectively, as compared to the same periods in the prior year.
Third-quarter 2009 sales were negatively impacted by unfavorable product mix, lower selling prices and unfavorable currency translation, compared to the same period in 2008. Year-to-date 2009 sales, compared with the first nine months of 2008, were negatively impacted by unfavorable currency translation and the May 2008 divestiture of two composite manufacturing plants in Battice, Belgium, and Birkeland, Norway.
EBIT
Composites segment EBIT was significantly lower in the three and nine months ended Sept. 30, 2009, as compared to the same periods in 2008. Lower sales volumes, including the impact of underutilization of production capacity and lower selling prices, drove these declines.
In response to market conditions, the Company took aggressive actions in this segment in the first half of 2009 to reduce inventories and operating costs focusing on cash generation. Headcount was reduced and production levels were decreased by idling and shutting down production lines. The Company managed production capacity below demand beginning in the first quarter of 2009 and continuing through the third quarter. The EBIT margin improved in this segment from the second quarter of 2009 to the third quarter of 2009 as a result of cost-reduction actions and improved demand.
Building Materials
NET SALES
This segment includes the Insulation, Roofing and Other businesses.
Net sales in Owens Corning's Building Materials segment were lower in the three and nine months ended Sept. 30, 2009, as compared to the same periods of 2008, primarily driven by demand weakness resulting from lower U.S. housing starts.
In the Roofing business, lower sales volumes decreased net sales by approximately 10 percent in the 2009 periods as compared to 2008. These volume declines were a result of lower demand associated with storm activity and new residential construction. Offsetting the impact of lower sales volumes was the impact of higher selling prices. Selling prices had been increasing to recover inflation in raw material costs, particularly asphalt, leading up to the fourth quarter of 2008. Selling prices have been generally stable since that time.
In Insulation, declines in demand drove the decreases in net sales, representing approximately three-fourths and substantially all of the decline for the three month and the year-to-date comparison, respectively. Owens Corning's experience is that the Company's residential insulation demand lags residential housing starts by approximately three months. Second-quarter 2009 U.S. housing starts were 46-percent lower than those in the second quarter of 2008, according to data reported by the U.S. Census Bureau. The Company's Insulation business includes a diverse portfolio with a geographic mix of U.S., Canada, Asia-Pacific and Latin America; a market mix of residential, commercial, industrial, and other markets; and a channel mix of retail, contractor and distribution. Weakness seen in many of these sectors has become more pronounced in the last two quarters.
EBIT
Building Materials segment EBIT improved substantially during the current year. This improvement was driven by unit margin improvements in the Company's Roofing business, partially offset by lower margins in the Insulation business.
In Owens Corning's Roofing business, unit margin improvements accounted for substantially all of the increase in EBIT for the three and nine months ended Sept. 30, 2009, as compared to the same periods in 2008. Roofing unit margins began improving in the second quarter of 2008 as selling price increases outpaced inflation. For the three-month comparison, the Company also experienced lower raw material costs in 2009 than in 2008. Additional factors impacting the third-quarter comparison were improvements in material efficiencies and lower sales volumes.
In the Insulation business, lower sales volumes, including the impact of underutilization of production capacity, accounted for substantially all of the decrease in EBIT.
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 Company's cost structure with market demand in response to the continued weak U.S. housing market. The Company will continue to manage production capacity relative to seasonal demand.
Conference Call and Presentation
Wednesday, Oct. 28, 2009
11 a.m. ET
All Callers
Live dial-in telephone number: U.S. 1-866-356-4281 or 1-617-597-5395
(Please dial in 10 minutes before conference call start time)
Passcode: 89627367
Presentation
To view the slide presentation during the conference call, please log on
to the live webcast at www.owenscorning.com/investors.
A telephone replay will be available through Nov. 4, 2009, at 1-888-286-
8010 or 1-617-801-6888. Passcode: 34480300. A replay of the webcast will
also be available at 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 16,000 employees in 30 countries on five continents. 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 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 Oct. 28, 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 (Loss)
(unaudited)
(in millions, except per share data)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
NET SALES $1,348 $1,629 $3,641 $4,556
COST OF SALES 1,068 1,358 2,953 3,834
Gross margin 280 271 688 722
OPERATING EXPENSES
Marketing and administrative
expenses 135 151 387 458
Science and technology expenses 15 16 45 52
Charges related to cost reduction
actions 3 2 33 8
Chapter 11-related reorganization
items 1 - 1 -
Employee emergence equity program
expense 5 6 17 20
Other (income) expenses 1 (17) 15 (24)
Total operating expenses 160 158 498 514
EARNINGS BEFORE INTEREST AND TAXES 120 113 190 208
Interest expense, net 30 29 81 90
EARNINGS BEFORE TAXES 90 84 109 118
Income tax expense 8 892 23 896
EARNINGS (LOSS) BEFORE EQUITY IN NET
EARNINGS (LOSS) OF AFFILIATES 82 (808) 86 (778)
Equity in net earnings (loss) of
affiliates (1) 2 - 1
NET EARNINGS (LOSS) 81 (806) 86 (777)
Less: Net earnings attributable to
noncontrolling interests 1 1 1 2
NET EARNINGS (LOSS) ATTRIBUTABLE TO
OWENS CORNING $80 $(807) $85 $(779)
EARNINGS (LOSS) PER COMMON SHARE
ATTRIBUTABLE TO OWENS CORNING
COMMON STOCKHOLDERS
Basic $0.64 $(6.35) $0.68 $(6.08)
Diluted $0.63 $(6.35) $0.67 $(6.08)
WEIGHTED AVERAGE COMMON SHARES
Basic 124.5 127.0 124.5 128.2
Diluted 127.1 127.0 126.8 128.2
Owens Corning follows the authoritative guidance referring to
"Noncontrolling Interest in Consolidated Financial Statements," effective
January 1, 2009, which, among other things, changed the presentation
format and certain captions of the Consolidated Statements of Earnings
(Loss) and Consolidated Balance Sheets. Owens Corning uses the captions
recommended by this standard in its Consolidated Financial Statements such
as net earnings attributable to Owens Corning and diluted earnings per
common share attributable to Owens Corning common stockholders. However,
in the preceding release Owens Corning has shortened this language to net
earnings and earnings per share (or a slight variation thereof),
respectively.
Table 2
Owens Corning and Subsidiaries
EBIT Reconciliation Schedules
(unaudited)
(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 Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
Chapter 11-related reorganization
items $(1) $- $(1) $-
Net precious metal lease income
(expense) 1 (1) - (7)
Charges related to cost reduction
actions and related items (4) (2) (45) (8)
Acquisition integration and
transaction costs (7) (20) (21) (62)
Gains (losses) on sales of assets
and other 1 16 (1) 36
Employee emergence equity program
expense (5) (6) (17) (20)
Total adjusting items $(15) $(13) $(85) $(61)
The reconciliation from net earnings (loss) attributable to Owens Corning
to Adjusted EBIT is shown in the table below (in millions):
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
NET EARNINGS (LOSS) ATTRIBUTABLE TO
OWENS CORNING $80 $(807) $85 $(779)
Less: Net earnings attributable
to noncontrolling interests 1 1 1 2
NET EARNINGS (LOSS) 81 (806) 86 (777)
Equity in net earnings (loss) of
affiliates (1) 2 - 1
EARNINGS (LOSS) BEFORE EQUITY IN NET
EARNINGS (LOSS) OF AFFILIATES 82 (808) 86 (778)
Income tax expense 8 892 23 896
EARNINGS BEFORE TAXES 90 84 109 118
Interest expense, net 30 29 81 90
EARNINGS BEFORE INTEREST AND TAXES 120 113 190 208
Less: adjusting items from above (15) (13) (85) (61)
ADJUSTED EBIT $135 $126 $275 $269
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 Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
RECONCILIATION TO ADJUSTED EARNINGS
Net earnings attributable to Owens
Corning $80 $(807) $85 $(779)
Adjustment to remove adjusting
items 15 13 85 61
Adjustment to classify net
precious metal lease expense as
interest 1 (1) - (7)
Adjustment to tax expense to
reflect an expected long-term
rate of 25%* (18) 868 (26) 853
ADJUSTED EARNINGS $78 $73 $144 $128
RECONCILIATION TO ADJUSTED DILUTED
EARNINGS PER SHARE ATTRIBUTABLE TO
OWENS CORNING COMMON STOCKHOLDERS
DILUTED LOSS PER COMMON SHARE
ATTRIBUTABLE TO OWENS CORNING
COMMON STOCKHOLDERS $0.63 $(6.35) $0.67 $(6.08)
Convert to adjusted diluted
earnings (loss) per share - 0.10 - 0.11
Adjustment to remove adjusting
items 0.12 0.10 0.67 0.47
Adjustment to classify net
precious metal lease expense
as interest 0.01 (0.01) - (0.05)
Adjustment to tax expense to
reflect an expected long-term
rate of 25%* (0.15) 6.73 (0.21) 6.53
ADJUSTED DILUTED EARNINGS PER SHARE
ATTRIBUTABLE TO OWENS CORNING
COMMON STOCKHOLDERS $0.61 $0.57 $1.13 $0.98
RECONCILIATION TO ADJUSTED DILUTED
SHARES OUTSTANDING
Weighted-average shares outstanding
used for basic earnings per share 124.5 127.0 124.5 128.2
Non-vested restricted shares 2.3 1.3 2.1 1.2
Stock options 0.3 - 0.2 -
Shares related to employee
emergence program 0.1 0.9 0.1 1.0
Adjusted diluted shares
outstanding ** 127.2 129.2 126.9 130.4
*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)
ASSETS Sept. 30, Dec. 31,
2009 2008
CURRENT ASSETS
Cash and cash equivalents $387 $236
Receivables, less allowances of $22 at
Sept. 30, 2009 and $21 at Dec. 31, 2008 729 576
Inventories 695 899
Restricted cash - disputed distribution
reserve 30 31
Assets held for sale - current - 13
Other current assets 109 102
Total current assets 1,950 1,857
Property, plant and equipment, net 2,790 2,819
Goodwill 1,125 1,124
Intangible assets 1,176 1,190
Deferred income taxes 38 42
Assets held for sale - non-current - 3
Other non-current assets 192 187
TOTAL ASSETS $7,271 $7,222
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $931 $1,112
Accrued interest 38 9
Short-term debt 12 30
Long-term debt - current portion 10 16
Liabilities held for sale - current - 8
Total current liabilities 991 1,175
Long-term debt, net of current portion 2,192 2,172
Pension plan liability 338 308
Other employee benefits liability 272 270
Deferred income taxes 424 400
Other liabilities 142 117
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 3,833 3,824
Accumulated deficit (718) (803)
Accumulated other comprehensive deficit (165) (183)
Cost of common stock in treasury (c) (101) (101)
Total Owens Corning stockholders'
equity 2,850 2,738
Noncontrolling interest 32 42
Total Equity 2,882 2,780
TOTAL LIABILITIES AND EQUITY $7,271 $7,222
(a) 10 shares authorized; none issued or outstanding at Sept. 30, 2009 and
Dec. 31, 2008
(b) 400 shares authorized; 132.5 issued and 127.8 outstanding at Sept. 30,
2009; 131.7 issued and 127.0 outstanding at Dec. 31, 2008
(c) 4.7 shares at Sept. 30, 2009 and Dec. 31, 2008
Table 5
Owens Corning and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
(in millions)
Nine Months Ended
Sept. 30,
2009 2008
NET CASH FLOW PROVIDED BY (USED FOR) OPERATING
ACTIVITIES
Net earnings (loss) $86 $(777)
Adjustments to reconcile net earnings (loss) to
cash provided by (used for) operating activities:
Depreciation and amortization 238 240
Gain on sale of businesses and fixed assets (10) (49)
Impairment of long-lived assets 3 11
Deferred income taxes 15 869
Provision for pension and other employee
benefits liabilities 26 29
Employee emergence equity program expense 17 20
Stock-based compensation expense 18 15
Increase in receivables (151) (264)
(Increase) decrease in inventories 240 (52)
(Increase) decrease in prepaid assets 7 (27)
Increase (decrease) in accounts payable and
accrued liabilities (147) 54
Pension fund contribution (34) (69)
Payments for other employee benefits liabilities (19) (18)
Other (20) 1
Net cash flow provided by (used for)
operating activities 269 (17)
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Additions to plant and equipment (151) (294)
Proceeds from the sale of assets or affiliates 39 269
Net cash flow used for investing activities (112) (25)
NET CASH FLOW USED FOR FINANCING ACTIVITIES
Proceeds from issuance of senior notes 344 -
Proceeds from senior revolving credit facility 260 457
Payments on senior revolving credit facility (586) (415)
Proceeds from long-term debt 1 12
Payments on long-term debt (13) (8)
Net decrease in short-term debt (18) (7)
Purchase of treasury stock - (62)
Net cash flow used for financing activities (12) (23)
Effect of exchange rate changes on cash 6 6
Net increase (decrease) in cash and cash equivalents 151 (59)
Cash and cash equivalents at beginning of period 236 135
CASH AND CASH EQUIVALENTS AT END OF PERIOD $387 $76
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 Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
Net sales $451 $589 $1,187 $1,915
% change from prior year -23% 48% -38% 66%
EBIT $2 $54 $(35) $189
EBIT as a % of net sales 0% 9% -3% 10%
Depreciation and amortization
expense $29 $33 $90 $97
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 Nine Months Ended
Sept. 30, Sept. 30,
2009 2008 2009 2008
Net sales
Insulation $340 $412 $906 $1,198
Roofing 561 616 1,560 1,397
Other 38 67 110 189
Eliminations (2) (4) (8) (11)
Total Building Materials $937 $1,091 $2,568 $2,773
% change from prior year -14% 19% -7% 4%
EBIT
Insulation $(9) $- $(76) $23
Roofing 177 95 458 115
Other (12) (3) (30) (11)
Total Building Materials $156 $92 $352 $127
EBIT as a % of net sales 17% 8% 14% 5%
Depreciation and amortization expense
Insulation $31 $31 $90 $89
Roofing 9 11 31 30
Other 4 3 11 9
Total Building Materials $44 $45 $132 $128
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 nine months ended September 30, 2009 and
2008, respectively (in millions):
Three Months Ended
September 30,
Balance as of September 30: 2009 2008
Short-term debt $12 $40
Long-term debt -- current portion 10 5
Long-term debt, net of current portion 2,192 2,045
Total debt 2,214 2,090
Less: Cash and cash equivalents 387 76
Net debt $1,827 $2,014
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
Change in net debt 332 (35)
Less: Purchases of treasury stock for the three
months ended September 30, 2008 - (43)
Free cash flow generated $332 $8
Nine Months Ended
September 30,
Balance as of September 30: 2009 2008
Short-term debt $12 $40
Long-term debt -- current portion 10 5
Long-term debt, net of current portion 2,192 2,045
Total debt 2,214 2,090
Less: Cash and cash equivalents 387 76
Net debt $1,827 $2,014
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 155 (99)
Less: Purchases of treasury stock for the nine
months ended September 30, 2008 - (62)
Free cash flow generated (used) $155 $(37)
