TOLEDO, Ohio, Oct. 29 /PRNewswire-FirstCall/ - Owens Corning (NYSE: OC)
reported today that consolidated net sales increased 28 percent to $1.6
billion during the third quarter, compared with $1.3 billion in the third
quarter of 2007. Third-quarter sales were up due to strong performance in the
Roofing and Asphalt and Composites businesses.
Excluding comparability items, Owens Corning's adjusted earnings from
continuing operations were $94 million, or $0.72 per adjusted diluted share,
compared with $56 million, or $0.42 per adjusted diluted share during the
third quarter last year. See Tables 2 and 3 for a discussion and
reconciliation of items that affect comparability.
As the result of a non-cash charge of $899 million to establish an
accounting valuation allowance against net U.S. deferred tax assets related to
its net operating losses, Owens Corning's third-quarter earnings from
continuing operations were a loss of $810 million, or $6.36 per share. The
non-cash charge will have no impact on the company's ability to utilize the
net operating losses to offset future U.S. profits. The company believes its
U.S. operations will have sufficient profitability during the remaining tax-
loss carryforward period to realize substantially all of the economic value of
the net operating losses before they expire.
Consolidated Third-Quarter and Nine-Month Results
-- Earnings before interest and taxes (EBIT) from continuing operations in
the third quarter of 2008 were $98 million, compared with $83 million
during the same period in 2007, an increase of 18 percent. Excluding
comparability items (see Table 2), adjusted EBIT from continuing
operations for the third quarter of 2008 was $111 million compared with
$102 million during the same period in 2007.
-- For the first nine months, EBIT was $181 million, compared with $191
million during the same period of 2007. Excluding comparability items
(see Table 2), adjusted EBIT for the first nine months of 2008 was $242
million, compared with $253 million during the same period in 2007.
-- Gross margin as a percentage of sales for the third quarter of 2008
declined by one percentage point compared to the third quarter of 2007,
while it declined by two percentage points for the nine months ended
September 30, 2008 compared to the same period in 2007. This was a
result of margin improvements in our Composite Solutions and Roofing
and Asphalt segments and lower margins in our Insulating Systems
segment.
-- Owens Corning's organization-wide safety expectation provides a safer
work environment for employees, improves manufacturing processes and
reduces costs. For the nine-month period ending September 30, 2008, the
company reduced workplace injuries by 35 percent, compared with its
2007 year-end rate.
"I'm pleased with the quarter as the results are in line with our
objectives for the year," said Mike Thaman, chairman and chief executive
officer. "The integration of our composites acquisition is on track. We are
exceeding our year-one synergy goals. Our Roofing and Asphalt business has
improved performance with a streamlined asset base, significant productivity
and an improved product mix. Our Insulation business will be profitable for
the year in a very difficult U.S. housing market. We've maintained a strong
balance sheet and are benefiting from a solid capital structure that provides
more than adequate liquidity."
Owens Corning continues to estimate that 2008 adjusted EBIT will be at
least $265 million. The company previously announced that strength in Roofing
and Asphalt performance creates an additional upside of up to 10 percent in
that adjusted EBIT guidance. The company excludes from this estimate items
impacting comparability.
Non-Cash Charge Establishes Accounting Valuation Allowance Against U.S.
Deferred Tax Assets
Owens Corning recorded a non-cash charge of $899 million in the third
quarter of 2008 to establish an accounting valuation allowance against net
U.S. deferred tax assets related to its net operating losses. The action was
taken in accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109").
The company concluded that an accounting valuation allowance was required
based on the company's U.S. losses before income taxes in 2007 and so far in
2008, and its current estimates for near term U.S. results during the
continuing U.S. housing downturn. Owens Corning has significant non-U.S.
profitability.
The accounting valuation allowance is a non-cash charge and will have no
impact on Owens Corning's cash flow, liquidity or credit facilities. The
charge reduced Owens Corning's reported third quarter diluted earnings per
share by $7.06.
This accounting valuation allowance is necessary under U.S. GAAP
guidelines to adjust the value of the company's net U.S. deferred tax assets
based on its outlook for near-term future fiscal periods.
For federal tax purposes, the net operating losses begin to expire in
2026. For state tax purposes, the expiration period could be sooner. The
company will periodically review the accounting valuation allowance and will
reverse the charge partially or totally, when, and if, appropriate under SFAS
109.
Other Financial Items
-- During the first quarter of 2007, Owens Corning announced a share buy-
back program under which the company was authorized to repurchase up to
5 percent of Owens Corning's outstanding common stock. During the third
quarter, the company repurchased 1.9 million shares at an average price
of $22.23 per share. For the nine-month period ending September 30,
2008, the company repurchased 2.9 million shares at an average price of
$22.70 per share. On September 30, 2008, the company had 128.8 million
shares outstanding and approximately 3.6 million shares remaining
available for repurchase under the current program.
-- As part of the operational integration of its composites acquisition,
Owens Corning sold precious metals during the third quarter of 2008
that resulted in a net gain of $26 million. The sales were part of the
company's ongoing program to reduce its operational requirements for
certain precious metals and to use the proceeds to acquire other
precious metals in order to reduce metal lease obligations.
-- At the end of the third quarter of 2008, Owens Corning had net debt of
approximately $2.0 billion, comprised of $2.1 billion of short- and
long-term debt and cash-on-hand of $76 million. Net debt is currently
expected to be at about last year's level of $1.9 billion at year's
end.
-- 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 $3.0 billion at the end of the third
quarter of 2008. The company's U.S. cash tax rate is now expected to be
less than 2 percent for at least the next 10 to 15 years.
-- During the third quarter of 2008, depreciation and amortization totaled
$84 million. Owens Corning currently estimates that depreciation and
amortization from continuing operations will total approximately $315
million in 2008.
Outlook
Owens Corning expects its Composites business to have a solid fourth
quarter. Synergy achievements and improved productivity will help to offset a
somewhat weaker global market. The company now estimates that it will achieve
at least $50 million in acquisition-related synergies in 2008, up from its
prior estimate of $30 million.
Overall weakness in the U.S. housing market will continue to affect demand
for Owens Corning's residential insulation products into 2009.
Consistent with stronger performance year-to-date and the opportunity to
advance certain investments to create shareholder value, capital expenditures
in 2008 could be somewhat higher than prior guidance of $350 million. Capital
investments will be accelerated to achieve growth and synergies in the
Composites business and to fund energy-reduction programs company-wide.
Before the accounting valuation allowance, Owens Corning anticipates that
its 2008 global effective tax rate will be substantially below the U.S.
federal income tax rate. The company expects its U.S. cash taxes will be
minimal, and that its cash effective tax rate in its foreign operations will
be 15 percent or less in 2008.
Business Segment Highlights
Composite Solutions
-- Net sales for the third quarter of 2008 were $589 million, a 48-percent
increase from $397 million during the same period in 2007.
Substantially all of the increase was the result of incremental sales
from the company's composites acquisition. The effect of translating
sales from foreign currencies into U.S. dollars increased sales by $12
million during the third quarter and $72 million through the first nine
months compared with the same periods in 2007.
-- EBIT from continuing operations for the third quarter of 2008 was $54
million, compared with $26 million during the same period in 2007.
Approximately two-thirds of the increase was due to incremental
earnings associated with the company's composites acquisition, net of
divestitures. The remainder of the increase was due to improved
manufacturing productivity and the effect of translating profits from
foreign currencies into U.S. dollars.
Insulating Systems
-- Net sales for the third quarter of 2008 were $412 million, an 11-
percent decrease from $462 million during the same period in 2007.
Sales for residential insulation products continue to be significantly
impacted by the reduction in new residential construction and repair
and remodeling in the U.S.
-- EBIT from continuing operations for the third quarter of 2008 was break
even, compared with $42 million during the same period in 2007.
Approximately two-thirds of the decrease in EBIT was due to lower
selling prices and inflation in raw materials, energy and delivery
costs.
Roofing and Asphalt
-- Net sales for the third quarter of 2008 were a record $616 million, a
63-percent increase from $379 million during the same period in 2007.
The increase was the result of higher selling prices as a result of
inflation in raw material and delivery costs, and higher volumes and
improved product mix.
-- EBIT from continuing operations for the third quarter of 2008 was $95
million, compared with $15 million during the same period in 2007. The
increase was due to higher prices, improvements in manufacturing and
material efficiencies, benefits from a streamlined asset base, enhanced
product mix and increased sales volumes.
Other Building Materials and Services
-- Net sales for the third quarter of 2008 were $67 million, a 14-percent
decrease from $78 million during the same period in 2007. The decrease
was primarily the result of declines in the company's Masonry Products
business related to the lower demand from new construction and repair
and remodeling markets in the U.S.
-- EBIT from continuing operations for the third quarter of 2008 was a
loss of $3 million, compared with earnings of $7 million during the
same period in 2007. The change was primarily due to the decline in
sales volumes and higher idle facility costs in Masonry Products
related to the continued weakness in new construction and repair and
remodeling markets in the U.S.
Full-year 2008 results are currently scheduled to be announced on February
18, 2009.
Conference Call and Presentation
Wednesday, October 29, 2008
11 a.m. ET
All Callers
Live dial-in telephone number: 1-866-543-6411 or 1-617-213-8900
(Please dial in 10 minutes before conference call start time)
Passcode: 44640815
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 November 12, 2008 at 1-888-
286-8010 or 1-617-801-6888. Passcode: 35081730. 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 54 consecutive
years, Owens Corning is committed to driving sustainability through delivering
solutions, transforming markets and enhancing lives. Founded in 1938, Owens
Corning is a market-leading innovator of glass fiber technology with sales of
$5 billion in 2007 and 18,000 employees in 26 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, many of which are outside the control of the
company, which could cause actual results to differ materially from those
projected in these statements and from the company's historical results and
experience. Such factors include competitive factors, pricing pressures,
availability and cost of energy and materials, acquisitions and achievement of
expected synergies therefrom, general economic conditions, the effect of
industry and economic conditions on the market and operating conditions of our
customers and factors detailed from time to time in the company's Securities
and Exchange Commission filings. Since it is not possible to predict or
identify all of the risks, uncertainties and other factors that may affect
future results, the above list should not be considered a complete list. Any
forward-looking statement speaks only as of the date on which such statement
is made, and the company undertakes no obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
Table 1
Owens Corning and Subsidiaries
Consolidated Statements of Earnings (Loss)
(Unaudited)
(in millions, except per share data)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 30, 30, 30,
2008 2007 2008 2007
NET SALES $1,629 $1,268 $4,556 $3,674
COST OF SALES 1,373 1,055 3,861 3,036
Gross Margin 256 213 695 638
OPERATING EXPENSES
Marketing and
administrative expenses 151 102 458 365
Science and technology
expenses 16 15 52 46
Restructuring costs (credits) 2 (1) 8 (3)
Chapter 11-related
reorganization items - 1 - 4
Employee emergence equity
program expense 6 8 20 28
Gain (loss) on sale of fixed
assets and other (17) 5 (24) 7
Total operating expenses 158 130 514 447
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INTEREST AND
TAXES 98 83 181 191
Interest expense, net 29 27 90 90
EARNINGS FROM CONTINUING
OPERATIONS BEFORE TAXES 69 56 91 101
Income tax expense 880 16 884 30
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE MINORITY
INTEREST AND EQUITY IN NET
EARNINGS (LOSS) OF AFFILIATES (811) 40 (793) 71
Minority interest and equity in
net earnings (loss) of
affiliates 1 (2) (1) (4)
EARNINGS (LOSS) FROM
CONTINUING OPERATIONS (810) 38 (794) 67
Discontinued operations - - - -
Earnings from discontinued
operations, net of tax of
$3 and $5 respectively, for
each of the three months and
nine months ended September
30, 2007 - 8 - 9
Gain on sale of discontinued
operations, net of tax of $41 - 66 - 66
Total earnings from
discontinued operations - 74 - 75
NET EARNINGS (LOSS) $(810) $112 $(794) $142
BASIC EARNINGS (LOSS) PER
COMMON SHARE
Earnings (loss) from
continuing operations $(6.36) $0.30 $(6.17) $0.52
Earnings from
discontinued operations - 0.57 - 0.59
Basic net earnings
(loss) per common share $(6.36) $0.87 $(6.17) $1.11
DILUTED EARNINGS (LOSS) PER
COMMON SHARE
Earnings (loss) from
continuing operations $(6.36) $0.30 $(6.17) $0.52
Earnings from discontinued
operations - 0.57 - 0.58
Diluted net earnings
(loss) per common share $(6.36) $0.87 $(6.17) $1.10
WEIGHTED AVERAGE COMMON SHARES
Basic 127.4 128.4 128.6 128.3
Diluted 127.4 129.0 128.6 128.9
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 (loss) certain
items it believes are not the result of current operations, and therefore
affect comparability. Additionally, management views net precious metal lease
(expense) income 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
measurements that provides it a useful representation of its operational
performance, the adjusted measures should not be considered in isolation or as
a substitute for net earnings (loss) as prepared in accordance with accounting
principles generally accepted in the United States. Items affecting
comparability and a reconciliation of net earnings (loss) to adjusted earnings
from continuing operations before interest and taxes are shown in the tables
below.
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 30, 30, 30,
2008 2007 2008 2007
ITEMS AFFECTING COMPARABILITY
Chapter 11-related
reorganization items $- $(1) $- $(4)
Net precious metal lease
(expense) income (1) 3 (7) 6
Restructuring and other (costs)
credits (2) 1 (8) 3
Acquisition integration and
transaction costs (20) (3) (52) (21)
Gains (losses) on sales of
assets and other 16 - 36 (7)
Employee emergence equity
program expense (6) (8) (20) (28)
Asset impairments - (11) (10) (11)
Total items affecting
comparability $(13) $(19) $(61) $(62)
RECONCILIATION TO ADJUSTED
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INTEREST
AND TAXES
NET EARNINGS (LOSS) $(810) $112 $(794) $142
Earnings from discontinued
operations, net of tax of
$3 and $5 respectively,
for each of the three months
and nine months ended
September 30, 2007 - 8 - 9
Gain on sale of discontinued
operations - 66 - 66
Total earnings from
discontinued operations - 74 - 75
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS (810) 38 (794) 67
Minority interest and equity
in net earnings (loss) of
affiliates 1 (2) (1) (4)
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE MINORITY
INTEREST AND EQUITY IN NET
EARNINGS (LOSS) OF AFFILIATES (811) 40 (793) 71
Income tax expense 880 16 884 30
EARNINGS FROM CONTINUING
OPERATIONS BEFORE TAXES 69 56 91 101
Interest expense, net 29 27 90 90
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INTEREST AND
TAXES 98 83 181 191
Adjustment to remove items
affecting comparability 13 19 61 62
ADJUSTED EARNINGS FROM
CONTINUING OPERATIONS BEFORE
INTEREST AND TAXES $111 $102 $242 $253
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 (loss) certain
items it believes are not the result of current operations, and therefore
affect comparability. Additionally, management views net precious metal lease
(expense) income as a financing item included in net interest expense rather
than as a product cost included in cost of sales. Furthermore, management
believes the non-cash charge to establish an accounting valuation allowance
against U.S. deferred tax assets, should be excluded from adjusted earnings
from continuing operations. The adjusted financial measures resulting from
these adjustments are used internally by Owens Corning for various purposes,
including reporting results of operations to the Board of Directors, analysis
of performance and related employee compensation measures. Although management
believes that these adjustments result in measurements that provides it a
useful representation of its operational performance, the adjusted measures
should not be considered in isolation or as a substitute for net earnings
(loss) as prepared in accordance with accounting principles generally accepted
in the United States. Items affecting comparability, a reconciliation from net
earnings (loss) to adjusted earning from continuing operations, a
reconciliation from diluted earnings (loss) per share from continuing
operations 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 Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 30, 30, 30,
2008 2007 2008 2007
ITEMS AFFECTING COMPARABILITY
Chapter 11-related
reorganization items $- $(1) $- $(4)
Net precious metal lease
(expense) income (1) 3 (7) 6
Restructuring and other (costs)
credits (2) 1 (8) 3
Acquisition integration and
transaction costs (20) (3) (52) (21)
Gains (losses) on sales of
assets and other 16 - 36 (7)
Employee emergence equity
program expense (6) (8) (20) (28)
Asset impairments - (11) (10) (11)
Total items affecting
comparability $(13) $(19) $(61) $(62)
RECONCILIATION TO ADJUSTED
EARNINGS FROM CONTINUING
OPERATIONS
NET EARNINGS (LOSS) $(810) $112 $(794) $142
Earnings from discontinued
operations, net of tax of
$3 and $5 respectively, for
each of the three months and
nine months ended September
30, 2007 - - 8 -
Gain on sale of discontinued
operations - - 66 -
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS (810) 38 (794) 67
Adjustment to remove items
affecting comparability 13 19 61 62
Adjustment to classify net
metal lease (expense) income
as interest (1) 3 (7) 6
Adjustment to remove accounting
valuation for U.S. deferred tax
assets 899 - 899 -
Tax effect of adjustments of
58%*, 18%, 39% and 29%,
respectively (7) (4) (21) (20)
ADJUSTED EARNINGS FROM CONTINUING
OPERATIONS $94 $56 $138 $115
RECONCILIATION TO ADJUSTED DILUTED
EARNINGS PER SHARE FROM CONTINUING
OPERATIONS
DILUTED EARNINGS (LOSS) PER SHARE
FROM CONTINUING OPERATIONS $(6.36) $0.30 $(6.17) $0.52
Convert to diluted earnings
per share on net earnings 0.12 - 0.09 -
Adjustment to remove items
affecting comparability 0.10 0.13 0.47 0.47
Adjustment to classify net
precious metal lease (expense)
income as interest (0.01) 0.02 (0.05) 0.05
Adjustment to remove accounting
valuation for U.S. deferred
tax assets 6.92 - 6.88 -
Tax effect of adjustments of
58%*, 18%, 39% and 29%,
respectively (0.05) (0.03) (0.16) (0.15)
ADJUSTED DILUTED EARNINGS PER
SHARE FROM CONTINUING OPERATIONS $0.72 $0.42 $1.06 $0.89
RECONCILIATION TO ADJUSTED DILUTED
SHARES OUTSTANDING
Weighted-average shares
outstanding used for diluted
earnings per share 127.4 129.0 128.6 128.9
Non-vested restricted shares ** 1.5 - 1.1 -
Shares related to employee
emergence program 1.0 2.8 1.0 2.8
Adjusted diluted shares
outstanding 129.9 131.8 130.7 131.7
* The 58% tax rate on the items impacting comparability for the three
months ended September 30, 2008 is the result of gains on sales of
assets and other producing tax expense at an effective rate of 15%,
while all other items produced a net tax benefit at an effective rate
of 34%.
** For the three and nine months ending September 30, 2008, Owens Corning
reported a net loss, and therefore earnings per share was not diluted.
When management internally reviews its performance and excludes the
items impacting comparability as shown above, the result is an adjusted
earnings from continuing operations. As such, the dilutive effect of
non-vested restricted shares is now included in the computation of
adjusted diluted earnings per share from continuing operations.
Table 4
Owens Corning and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(in millions)
September 30, December 31,
2008 2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents $76 $135
Receivables, less allowances of
$22 in 2008 and $23 in 2007 957 721
Inventories 810 821
Restricted cash - disputed
distribution reserve 31 33
Assets held for sale - current 9 53
Other current assets 115 92
Total current assets 1,998 1,855
Property, plant and equipment, net 2,782 2,776
Goodwill 1,124 1,174
Intangible assets 1,204 1,210
Deferred income taxes - 484
Assets held for sale - non-current 5 174
Other non-current assets 227 199
TOTAL ASSETS $7,340 $7,872
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued
liabilities $1,294 $1,137
Accrued interest 31 12
Short-term debt 40 47
Long-term debt - current portion 5 10
Liabilities held for sale - current 6 40
Total current liabilities 1,376 1,246
Long-term debt, net of current portion 2,045 1,993
Pension plan liability 78 146
Other employee benefits liability 294 293
Deferred income taxes 291 -
Liabilities held for sale - non- current 1 8
Other liabilities 116 161
Commitments and contingencies
Minority interest 42 37
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.01 per
share 10 shares authorized; none issued
or outstanding at September 30, 2008
and December 31, 2007 - -
Common stock, par value $0.01 per
share 400 shares authorized; 131.7 and
130.8 issued and outstanding at
September 30, 2008 and December 31,
2007, respectively 1 1
Additional paid in capital 3,816 3,784
Accumulated earnings (deficit) (763) 31
Accumulated other comprehensive earnings 109 173
Cost of common stock in treasury; 2.9
shares at September 30, 2008 (66) (1)
Total stockholders' equity 3,097 3,988
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,340 $7,872
Table 5
Owens Corning and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(in millions)
Nine Months Ended Nine Months Ended
September 30, September 30,
2008 2007
NET CASH FLOW USED FOR OPERATING
ACTIVITIES
Net earnings $(794) $142
Adjustments to reconcile net
earnings to cash used for
operating activities:
Depreciation and amortization 240 239
Gain on sale of businesses and
fixed assets (49) (110)
Impairment of fixed and
intangible assets 11 22
Deferred income taxes 857 43
Provision for pension and other
employee benefits liabilities 29 31
Employee emergence equity
program expense 20 28
Stock-based compensation expense 15 6
Decrease in restricted cash -
disputed distribution reserve 2 31
Payments related to Chapter 11 filings (2) (26)
Increase in receivables (264) (161)
Increase in inventories (25) (31)
Increase in prepaid and other assets (19) (1)
Increase (decrease) in accounts
payable and accrued liabilities 54 (113)
Pension fund contribution (69) (117)
Payments for other employee
benefits liabilities (18) (20)
Other (5) (2)
Net cash flow used for
operating activities (17) (39)
NET CASH FLOW USED FOR INVESTING
ACTIVITIES
Additions to plant and equipment (294) (167)
Investment in subsidiaries and
affiliates, net of cash acquired - (31)
Proceeds from the sale of assets
or affiliates 269 437
Net cash flow used for
investing activities (25) 239
NET CASH FLOW PROVIDED BY (USED FOR)
FINANCING ACTIVITIES
Proceeds from long-term debt 12 617
Payments on long-term debt (8) (78)
Proceeds from revolving credit facility 457 383
Payments on revolving credit facility (415) (383)
Payment of note payable to 524(g) Trust - (1,390)
Net increase (decrease) in short-
term debt (7) 3
Purchases of treasury stock (62) -
Net cash flow provided by
(used for) financing activities (23) (848)
Effect of exchange rate changes on cash 6 9
NET DECREASE IN CASH AND CASH EQUIVALENTS (59) (639)
Cash and cash equivalents at beginning of
period 135 1,089
CASH AND CASH EQUIVALENTS AT END OF PERIOD $76 $450
Table 6
Owens Corning and Subsidiaries
Business Segment Information
(Unaudited)
(in millions)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
September September September September
30, 30, 30, 30,
2008 2007 2008 2007
NET SALES
Reportable Segments
Composite Solutions $589 $397 $1,915 $1,152
Insulating Systems 412 462 1,198 1,322
Roofing and Asphalt 616 379 1,397 1,099
Other Building Materials and
Services 67 78 189 234
Total reportable segments 1,684 1,316 4,699 3,807
Corporate eliminations (55) (48) (143) (133)
Consolidated net sales $1,629 $1,268 $4,556 $3,674
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE INTEREST AND
TAXES
Reportable Segments
Composite Solutions $54 $26 $189 $77
Insulating Systems - 42 23 137
Roofing and Asphalt 95 15 115 36
Other Building Materials and
Services (3) 7 (11) 18
Total reportable segments $146 $90 $316 $268
RECONCILIATION TO CONSOLIDATED
EARNINGS FROM CONTINUING
OPERATIONS BEFORE INTEREST AND
TAXES
Chapter 11-related
reorganization items $- $(1) $- $(4)
Net precious metal lease
(expense) income (1) 3 (7) 6
Restructuring and other (costs)
credits (2) 1 (8) 3
Acquisition integration and
transaction costs (20) (3) (52) (21)
Gains (losses) on sales of
assets and other 16 - 36 (7)
Employee emergence equity
program expense (6) (8) (20) (28)
Asset impairments - (11) (10) (11)
General corporate (expense)
income (35) 12 (74) (15)
CONSOLIDATED EARNINGS FROM
CONTINUING OPERATIONS BEFORE
INTEREST AND TAXES $98 $83 $181 $191
