Owens Corning [OC] Filings

10-Q 1 oc-20220930.htm 10-Q oc-20220930

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-33100

Owens Corning

(Exact name of registrant as specified in its charter)

Delaware

43-2109021

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

One Owens Corning Parkway,

Toledo,

43659

(Address of principal executive offices)

(Zip Code)

(419) 248-8000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	OC	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large Accelerated Filer	þ	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Table of Contents

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No þ

As of October 21, 2022, 93,456,304 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

Table of Contents


			Contents

Cover Page			1

PART I – FINANCIAL INFORMATION (unaudited)

	Item 1.	Financial Statements
		Consolidated Statements of Earnings	4
		Consolidated Statements of Comprehensive Earnings	5
		Consolidated Balance Sheets	6
		Consolidated Statements of Stockholders' Equity	7
		Consolidated Statements of Cash Flows	9
		Notes to Consolidated Financial Statements
		1. General	10
		2. Segment Information	11

		3. Inventories	13
		4. Derivative Financial Instruments	14
		5. Goodwill and Other Intangible Assets	17
		6. Property, Plant and Equipment	18

		7. Acquisitions	19

		8. Divestitures	20
		9. Warranties	20
		10. Restructuring, Acquisition and Divestiture-Related Costs	21
		11. Debt	23
		12. Pension Plans and Other Postretirement Benefits	26
		13. Contingent Liabilities and Other Matters	28
		14. Stock Compensation	29
		15. Earnings per Share	32
		16. Income Taxes	33
		17. Changes in Accumulated Other Comprehensive Deficit	34


	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49

	Item 4.	Controls and Procedures	49

PART II – OTHER INFORMATION

	Item 1.	Legal Proceedings	50

	Item 1A.	Risk Factors	50

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50

	Item 3.	Defaults Upon Senior Securities	50

	Item 4.	Mine Safety Disclosures	50

	Item 5.	Other Information	50

	Item 6.	Exhibits	51

		Signatures	52

Table of Contents

- 4 -

PART I

ITEM 1. FINANCIAL STATEMENTS

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)

(in millions, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,

	2022		2021		2022		2021
NET SALES	$	2,529	$	2,213	$	7,476	$	6,367
COST OF SALES	1,836		1,617		5,430		4,709
Gross margin	693		596		2,046		1,658
OPERATING EXPENSES
Marketing and administrative expenses	201		186		586		548
Science and technology expenses	26		21		73		63


Gain on equity method investment	(130)		—		(130)		—
Other income, net	(12)		(3)		(18)		(68)
Total operating expenses	85		204		511		543
OPERATING INCOME	608		392		1,535		1,115
Non-operating income	(2)		(2)		(6)		(8)
EARNINGS BEFORE INTEREST AND TAXES	610		394		1,541		1,123
Interest expense, net	28		31		82		97
Loss on extinguishment of debt	—		9		—		9
EARNINGS BEFORE TAXES	582		354		1,459		1,017
Income tax expense	114		94		340		250
Equity in net earnings (loss) of affiliates	1		(1)		—		—
NET EARNINGS	469		259		1,119		767
Net (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests	(1)		(1)		2		(1)

NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	470	$	260	$	1,117	$	768
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
Basic	$	4.88	$	2.52	$	11.42	$	7.36
Diluted	$	4.84	$	2.50	$	11.32	$	7.30

WEIGHTED AVERAGE COMMON SHARES
Basic	96.3		103.1		97.8		104.4
Diluted	97.1		103.9		98.7		105.2

The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.

Table of Contents

- 5 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited)

(in millions)


		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
NET EARNINGS		$	469	$	259	$	1,119	$	767
Other comprehensive (loss) income, net of tax:
	Currency translation adjustment (net of tax of $0 and $(1) for the three months ended September 30, 2022 and 2021, respectively, and $(1) and $(2) for the nine months ended September 30, 2022 and 2021, respectively)	(161)		(35)		(243)		(48)
	Pension and other postretirement adjustment (net of tax of $0 and $(10) for the three months ended September 30, 2022 and 2021, and $(1) and $(10) for the nine months ended September 30, 2022 and 2021, respectively)	6		33		15		31
	Hedging adjustment (net of tax of $(2) and $(5) for the three months ended September 30, 2022 and 2021, respectively, and $(9) and $(8) for the nine months ended September 30, 2022 and 2021, respectively)	6		12		29		22
	Total other comprehensive (loss) income, net of tax	(149)		10		(199)		5
COMPREHENSIVE EARNINGS		320		269		920		772
Comprehensive (loss) attributable to non-redeemable and redeemable noncontrolling interests		(2)		(1)		(2)		(1)

COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING		$	322	$	270	$	922	$	773

The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.

Table of Contents

- 6 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except per share amounts)


ASSETS	September 30, 2022		December 31, 2021
CURRENT ASSETS
Cash and cash equivalents	$	751	$	959
Receivables, less allowance of $10 at September 30, 2022 and $9 at December 31, 2021	1,304		939
Inventories	1,322		1,078

Other current assets	190		121
Total current assets	3,567		3,097
Property, plant and equipment, net	3,660		3,873
Operating lease right-of-use assets	182		158
Goodwill	1,367		990
Intangible assets	1,677		1,617
Deferred income taxes	17		31
Other non-current assets	251		249
TOTAL ASSETS	$	10,721	$	10,015
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,320	$	1,095
Current operating lease liabilities	51		49
Other current liabilities	643		553
Total current liabilities	2,014		1,697
Long-term debt, net of current portion	2,988		2,960
Pension plan liability	56		77
Other employee benefits liability	152		157
Non-current operating lease liabilities	132		109
Deferred income taxes	398		376
Other liabilities	295		304
Total liabilities	6,035		5,680
Redeemable noncontrolling interest	25		—
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	4,124		4,092
Accumulated earnings	3,719		2,706
Accumulated other comprehensive deficit	(776)		(581)
Cost of common stock in treasury (c)	(2,428)		(1,922)
Total Owens Corning stockholders’ equity	4,640		4,296
Noncontrolling interests	21		39
Total equity	4,661		4,335
TOTAL LIABILITIES AND EQUITY	$	10,721	$	10,015

(a)10 shares authorized; none issued or outstanding at September 30, 2022 and December 31, 2021

(b)400 shares authorized; 135.5 issued and 94.7 outstanding at September 30, 2022; 135.5 issued and 100.4 outstanding at December 31, 2021

The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.

Table of Contents

- 7 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in millions)


	Common Stock Outstanding			Treasury Stock			APIC (a)		Accumulated Earnings		AOCI (b)		NCI (c)		Total
	Shares	Par Value		Shares	Cost
Balance at December 31, 2021	100.4	$	1	35.1	$	(1,922)	$	4,092	$	2,706	$	(581)	$	39	$	4,335
Net earnings attributable to Owens Corning	—	—		—	—		—		304		—		—		304
Net earnings attributable to noncontrolling interests	—	—		—	—		—		—		—		3		3
Currency translation adjustment	—	—		—	—		—		—		(27)		(1)		(28)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		3		—		3
Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		24		—		24
Purchases of noncontrolling interest	—	—		—	—		8		—		—		(17)		(9)
Issuance of common stock under share-based payment plans	0.4	—		(0.4)	21		(21)		—		—		—		—
Purchases of treasury stock	(2.7)	—		2.7	(243)		—		—		—		—		(243)
Stock-based compensation expense	—	—		—	—		12		—		—		—		12

Dividends declared (d)	—	—		—	—		—		(36)		—		—		(36)
Balance at March 31, 2022	98.1	$	1	37.4	$	(2,144)	$	4,091	$	2,974	$	(581)	$	24	$	4,365
Net earnings attributable to Owens Corning	—	—		—	—		—		343		—		—		343
Net earnings attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Redeemable noncontrolling interest adjustment to redemption value	—	—		—	—		—		—		—		—		—
Currency translation adjustment	—	—		—	—		—		—		(52)		(2)		(54)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		6		—		6
Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		(1)		—		(1)

Issuance of common stock under share-based payment plans	0.1	—		(0.1)	9		3		—		—		—		12
Purchases of treasury stock	(1.0)	—		1.0	(87)		—		—		—		—		(87)
Stock-based compensation expense	—	—		—	—		13		—		—		—		13

Dividends declared (d)	—	—		—	—		—		(35)		—		—		(35)
Balance at June 30, 2022	97.2	$	1	38.3	$	(2,222)	$	4,107	$	3,282	$	(628)	$	22	$	4,562
Net earnings attributable to Owens Corning	—	—		—	—		—		470		—		—		470
Net loss attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Redeemable noncontrolling interest adjustment to redemption value	—	—		—	—		(1)		—		—		—		(1)
Currency translation adjustment	—	—		—	—		—		—		(160)		(1)		(161)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		6		—		6
Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		6		—		6

Issuance of common stock under share-based payment plans	—	—		—	—		5		—		—		—		5
Purchases of treasury stock	(2.5)	—		2.5	(206)		—		—		—		—		(206)
Stock-based compensation expense	—	—		—	—		13		—		—		—		13

Dividends declared (d)	—	—		—	—		—		(33)		—		—		(33)
Balance at September 30, 2022	94.7	$	1	40.8	$	(2,428)	$	4,124	$	3,719	$	(776)	$	21	$	4,661

(a)Additional Paid in Capital ("APIC")

(b)Accumulated Other Comprehensive Earnings (Deficit) (“AOCI”)

(c)Noncontrolling Interest (“NCI”)

(d)Quarterly dividend declarations of $0.35 per share as of September 30, 2022, June 30, 2022 and March 31, 2022

The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.

Table of Contents

- 8 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in millions)


	Common Stock Outstanding			Treasury Stock			APIC (a)		Accumulated Earnings		AOCI (b)		NCI (c)		Total
	Shares	Par Value		Shares	Cost
Balance at December 31, 2020	105.6	$	1	29.9	$	(1,400)	$	4,059	$	1,829	$	(588)	$	40	$	3,941
Net earnings attributable to Owens Corning	—	—		—	—		—		210		—		—		210
Net earnings attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Currency translation adjustment	—	—		—	—		—		—		(45)		(1)		(46)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		1		—		1
Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		12		—		12

Issuance of common stock under share-based payment plans	0.5	—		(0.5)	22		(15)		—		—		—		7
Purchases of treasury stock	(1.8)	—		1.8	(142)		—		—		—		—		(142)
Stock-based compensation expense	—	—		—	—		12		—		—		—		12
Cumulative effect of accounting change	—	—		—	—		—		—		—		—		—
Dividends declared (d)	—	—		—	—		—		(28)		—		—		(28)
Balance at March 31, 2021	104.3	$	1	31.2	$	(1,520)	$	4,056	$	2,011	$	(620)	$	39	$	3,967
Net earnings attributable to Owens Corning	—	—		—	—		—		298		—		—		298
Net loss attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Currency translation adjustment	—	—		—	—		—		—		32		—		32
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		(3)		—		(3)
Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		(2)		—		(2)

Issuance of common stock under share-based payment plans	0.3	—		(0.3)	14		(4)		—		—		—		10
Purchases of treasury stock	(1.3)	—		1.3	(131)		—		—		—		—		(131)
Stock-based compensation expense	—	—		—	—		12		—		—		—		12
Cumulative effect of accounting change (d)	—	—		—	—		—		—		—		—		—
Dividends declared (d)	—	—		—	—		—		(27)		—		—		(27)
Balance at June 30, 2021	103.3	$	1	32.2	$	(1,637)	$	4,064	$	2,282	$	(593)	$	39	$	4,156
Net earnings attributable to Owens Corning	—	—		—	—		—		260		—		—		260
Net loss attributable to noncontrolling interests	—	—		—	—		—		—		—		(1)		(1)

Currency translation adjustment	—	—		—	—		—		—		(35)		1		(34)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		33		—		33
Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		12		—

Owens Corning [OC] Filings
10-Q	[2022-10-26]
10-Q	[2022-07-27]
10-Q	[2022-04-27]
10-K	[2022-02-16]
10-Q	[2021-10-27]
10-Q	[2021-07-28]
10-Q	[2021-04-28]
10-K	[2021-02-17]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-29]
10-K	[2020-02-19]
10-Q	[2019-10-23]
10-Q	[2019-07-24]
10-Q	[2019-04-24]
10-K	[2019-02-20]
10-Q	[2018-10-24]
10-Q	[2018-07-25]
10-Q	[2018-04-25]
10-K	[2018-02-21]
10-Q	[2017-10-25]
10-Q	[2017-07-26]
10-Q	[2017-04-26]
10-K	[2017-02-08]
10-Q	[2016-10-26]
10-Q	[2016-07-27]
10-Q	[2016-04-27]
10-K	[2016-02-10]
10-Q	[2015-10-21]
10-Q	[2015-07-22]
10-Q	[2015-04-22]
10-K	[2015-02-11]
10-Q	[2014-10-22]
10-Q	[2014-07-23]
10-Q	[2014-04-23]
10-K	[2014-02-12]
10-Q	[2013-10-23]
10-Q	[2013-07-24]
10-Q	[2013-04-24]
10-K	[2013-02-20]
10-Q	[2012-10-24]
10-Q	[2012-08-01]
10-Q	[2012-04-25]
10-K	[2012-02-15]