Company Quick10K Filing
Owens Corning
Price60.56 EPS5
Shares110 P/E13
MCap6,662 P/FCF11
Net Debt3,145 EBIT793
TEV9,807 TEV/EBIT12
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-04-28
10-K 2020-12-31 Filed 2021-02-17
10-Q 2020-09-30 Filed 2020-10-28
10-Q 2020-06-30 Filed 2020-07-29
10-Q 2020-03-31 Filed 2020-04-29
10-K 2019-12-31 Filed 2020-02-19
10-Q 2019-09-30 Filed 2019-10-23
10-Q 2019-06-30 Filed 2019-07-24
10-Q 2019-03-31 Filed 2019-04-24
10-K 2018-12-31 Filed 2019-02-20
10-Q 2018-09-30 Filed 2018-10-24
10-Q 2018-06-30 Filed 2018-07-25
10-Q 2018-03-31 Filed 2018-04-25
10-K 2017-12-31 Filed 2018-02-21
10-Q 2017-09-30 Filed 2017-10-25
10-Q 2017-06-30 Filed 2017-07-26
10-Q 2017-03-31 Filed 2017-04-26
10-K 2016-12-31 Filed 2017-02-08
10-Q 2016-09-30 Filed 2016-10-26
10-Q 2016-06-30 Filed 2016-07-27
10-Q 2016-03-31 Filed 2016-04-27
10-K 2015-12-31 Filed 2016-02-10
10-Q 2015-09-30 Filed 2015-10-21
10-Q 2015-06-30 Filed 2015-07-22
10-Q 2015-03-31 Filed 2015-04-22
10-K 2014-12-31 Filed 2015-02-11
10-Q 2014-09-30 Filed 2014-10-22
10-Q 2014-06-30 Filed 2014-07-23
10-Q 2014-03-31 Filed 2014-04-23
10-K 2013-12-31 Filed 2014-02-12
10-Q 2013-09-30 Filed 2013-10-23
10-Q 2013-06-30 Filed 2013-07-24
10-Q 2013-03-31 Filed 2013-04-24
10-K 2012-12-31 Filed 2013-02-20
10-Q 2012-09-30 Filed 2012-10-24
10-Q 2012-06-30 Filed 2012-08-01
10-Q 2012-03-31 Filed 2012-04-25
10-K 2011-12-31 Filed 2012-02-15
10-Q 2011-09-30 Filed 2011-10-26
10-Q 2011-06-30 Filed 2011-08-03
10-Q 2011-03-31 Filed 2011-04-27
10-K 2010-12-31 Filed 2011-02-16
10-Q 2010-09-30 Filed 2010-10-27
10-Q 2010-06-30 Filed 2010-08-04
10-Q 2010-03-31 Filed 2010-04-28
10-K 2009-12-31 Filed 2010-02-17
8-K 2020-10-28
8-K 2020-09-16
8-K 2020-08-06
8-K 2020-07-29
8-K 2020-05-07
8-K 2020-04-29
8-K 2020-04-16
8-K 2020-02-19
8-K 2019-12-05
8-K 2019-10-23
8-K 2019-10-10
8-K 2019-09-18
8-K 2019-08-12
8-K 2019-07-24
8-K 2019-07-01
8-K 2019-06-19
8-K 2019-04-24
8-K 2019-04-18
8-K 2019-04-08
8-K 2019-02-20
8-K 2019-02-06
8-K 2019-01-03
8-K 2018-10-24
8-K 2018-07-30
8-K 2018-07-25
8-K 2018-05-04
8-K 2018-04-25
8-K 2018-03-28
8-K 2018-02-21
8-K 2018-02-01
8-K 2018-02-01
8-K 2018-01-25
8-K 2018-01-23

OC 10Q Quarterly Report

Part I
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 oc-2021x03x31x10qxexh311.htm
EX-31.2 oc-2021x03x31x10qxexh312.htm
EX-32.1 oc-2021x03x31x10qxexh321.htm
EX-32.2 oc-2021x03x31x10qxexh322.htm

Owens Corning Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
151296302012201420172020
Assets, Equity
2.01.61.20.70.3-0.12012201420172020
Rev, G Profit, Net Income
1.30.80.3-0.3-0.8-1.32012201420172020
Ops, Inv, Fin

oc-20210331
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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 March 31, 2021
or
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)
 
Delaware43-2109021
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
One Owens Corning Parkway,Toledo,OH 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 classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.01 per shareOCNew 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 FilerþAccelerated 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. ¨


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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes            No þ

As of April 23, 2021, 104,462,073 shares of registrant’s common stock, par value $0.01 per share, were outstanding.


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Contents
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



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- 4 -
PART I
ITEM 1. FINANCIAL STATEMENTS
OWENS CORNING AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(unaudited)
(in millions, except per share amounts)
 
Three Months Ended
March 31,
  
  
20212020
NET SALES$1,915 $1,601 
COST OF SALES1,471 1,295 
Gross margin444 306 
OPERATING EXPENSES
Marketing and administrative expenses174 179 
Science and technology expenses20 21 
Goodwill impairment charge 944 
Other (income) expenses, net(48)32 
Total operating expenses146 1,176 
OPERATING INCOME (LOSS)298 (870)
Non-operating income(3)(4)
EARNINGS (LOSS) BEFORE INTEREST AND TAXES301 (866)
Interest expense, net33 27 
EARNINGS (LOSS) BEFORE TAXES268 (893)
Income tax expense59 24 
Equity in net earnings of affiliates1 1 
NET EARNINGS (LOSS)210 (916)
Net earnings attributable to noncontrolling interests 1 
NET EARNINGS (LOSS) ATTRIBUTABLE TO OWENS CORNING$210 $(917)
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
Basic$1.99 $(8.43)
Diluted$1.98 $(8.43)
WEIGHTED AVERAGE COMMON SHARES
Basic105.4 108.8 
Diluted106.0 108.8 
The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.


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OWENS CORNING AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)
(unaudited)
(in millions)
 
  
Three Months Ended
March 31,
  
20212020
NET EARNINGS (LOSS)$210 $(916)
Currency translation adjustment (net of tax of $(1) and $(10) for the three months ended March 31, 2021 and 2020, respectively)(45)(122)
Pension and other postretirement adjustment (net of tax of $0 for both the three months ended March 31, 2021 and 2020)1 7 
Hedging adjustment (net of tax of $(4) and $1 for the three months ended March 31, 2021 and 2020, respectively)12 (1)
COMPREHENSIVE EARNINGS (LOSS)178 (1,032)
Comprehensive earnings attributable to noncontrolling interests 1 
COMPREHENSIVE EARNINGS (LOSS) ATTRIBUTABLE TO OWENS CORNING$178 $(1,033)

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


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- 6 -
OWENS CORNING AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions, except per share amounts)
ASSETSMarch 31,
2021
December 31,
2020
CURRENT ASSETS
Cash and cash equivalents$605 $717 
Receivables, less allowances of $10 at March 31, 2021 and $10 at December 31, 20201,167 919 
Inventories854 855 
Other current assets112 115 
Total current assets2,738 2,606 
Property, plant and equipment, net3,758 3,809 
Operating lease right-of-use assets145 154 
Goodwill980 989 
Intangible assets1,647 1,667 
Deferred income taxes28 28 
Other non-current assets264 228 
TOTAL ASSETS$9,560 $9,481 
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current operating lease liabilities$52 $55 
Other current liabilities1,415 1,385 
Total current liabilities1,467 1,440 
Long-term debt, net of current portion3,145 3,126 
Pension plan liability153 159 
Other employee benefits liability169 171 
Non-current operating lease liabilities92 99 
Deferred income taxes341 332 
Other liabilities226 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 capital4,056 4,059 
Accumulated earnings2,011 1,829 
Accumulated other comprehensive deficit(620)(588)
Cost of common stock in treasury (c)(1,520)(1,400)
Total Owens Corning stockholders’ equity3,928 3,901 
Noncontrolling interests39 40 
Total equity3,967 3,941 
TOTAL LIABILITIES AND EQUITY$9,560 $9,481 
 
(a)10 shares authorized; none issued or outstanding at March 31, 2021 and December 31, 2020
(b)400 shares authorized; 135.5 issued and 104.3 outstanding at March 31, 2021; 135.5 issued and 105.6 outstanding at December 31, 2020
(c)31.2 shares at March 31, 2021 and 29.9 shares at December 31, 2020
The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.


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- 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
  SharesPar ValueSharesCost
Balance at December 31, 2020105.6 $1 29.9 $(1,400)$4,059 $1,829 $(588)$40 $3,941 
Net earnings attributable to Owens Corning— — — — — 210 —  210 
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 plans0.5 — (0.5)22 (15)— — — 7 
Purchases of treasury stock(1.8)— 1.8 (142)— — — — (142)
Stock-based compensation expense — — — — 12 — — — 12 
Dividends declared (d)— — — — — (28)— — (28)
Balance at March 31, 2021104.3 $1 31.2 $(1,520)$4,056 $2,011 $(620)$39 $3,967 


 Common Stock
Outstanding
Treasury
Stock
APIC (a)Accumulated
Earnings
AOCI (b)NCI (c)Total
  SharesPar ValueSharesCost
Balance at December 31, 2019109.0 $1 26.5 $(1,130)$4,051 $2,319 $(610)$40 $4,671 
Net loss attributable to Owens Corning— — — — — (917)— — (917)
Net earnings attributable to noncontrolling interests— — — — — — — 
Currency translation adjustment— — — — — — (122)(2)(124)
Pension and other postretirement adjustment (net of tax)— — — — — — 7 — 7 
Deferred loss on hedging transactions (net of tax)— — — — — — (1)— (1)
Issuance of common stock under share-based payment plans0.4 — (0.4)16 (16)— — —  
Purchases of treasury stock(1.6)— 1.6 (96)— — — — (96)
Stock-based compensation expense — — — — 11 — — — 11 
Dividends declared (d)— — — — — (26)— — (26)
Balance at March 31, 2020107.8 $1 27.7 $(1,210)$4,046 $1,376 $(726)$39 $3,526 

(a)Additional Paid in Capital (APIC)
(b)Accumulated Other Comprehensive Earnings (Deficit) (“AOCI”)
(c)Noncontrolling Interest (“NCI”)
(d)Quarterly dividend declarations of $0.26 and $0.24 per share as of March 31, 2021 and March 31, 2020, respectively.

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



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OWENS CORNING AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in millions)
 
  
Three Months Ended
March 31,
  
20212020
NET CASH FLOW PROVIDED BY (USED FOR) OPERATING ACTIVITIES
Net earnings (loss)$210 $(916)
Adjustments to reconcile net earnings (loss) to cash provided by (used for) operating activities:
Depreciation and amortization119 116 
Deferred income taxes13 21 
Provision for pension and other employee benefits liabilities (1)
Stock-based compensation expense12 11 
Goodwill impairment charge 944 
Intangible assets impairment charge 43 
Other adjustments to reconcile net earnings (loss) to cash provided by (used for) operating activities(6)14 
Changes in operating assets and liabilities(136)(265)
Pension fund contribution(1)(11)
Payments for other employee benefits liabilities(4)(4)
Other(3)(4)
Net cash flow provided by (used for) operating activities204 (52)
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Cash paid for property, plant, and equipment(84)(92)
Proceeds from the sale of assets or affiliates 15 
Derivative settlements(35)16 
Other(2) 
Net cash flow used for investing activities(121)(61)
NET CASH FLOW (USED FOR) PROVIDED BY FINANCING ACTIVITIES
Proceeds from senior revolving credit and receivables securitization facilities 736 
Payments on senior revolving credit and receivables securitization facilities (336)
Payments on term loan borrowing (50)
Net decrease in short-term debt (11)
Dividends paid(55)(26)
Purchases of treasury stock(142)(96)
Other3 (4)
Net cash flow (used for) provided by financing activities(194)213 
Effect of exchange rate changes on cash(1)(38)
Net (decrease) increase in cash, cash equivalents, and restricted cash(112)62 
Cash, cash equivalents and restricted cash at beginning of period724 179 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD$612 $241 
 
The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.



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OWENS CORNING AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1.    GENERAL
Unless the context requires otherwise, the terms “Owens Corning,” “Company,” “we” and “our” in this report refer to Owens Corning, a Delaware corporation, and its subsidiaries.
The Consolidated Financial Statements included in this report are unaudited, pursuant to certain rules and regulations of the Securities and Exchange Commission, and include, in the opinion of the Company, normal recurring adjustments necessary for a fair statement of the results for the periods indicated, which, however, are not necessarily indicative of results which may be expected for the full year. The December 31, 2020 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States ("U.S."). In connection with the Consolidated Financial Statements and Notes included in this report, reference is made to the Consolidated Financial Statements and Notes contained in the Company’s Form 10-K for the year ended December 31, 2020 (the "2020 Form 10-K"). Certain reclassifications have been made to the periods presented for 2020 to conform to the classifications used in the periods presented for 2021.
Revenue Recognition

As of December 31, 2020, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled $66 million, of which $13 million was recognized as revenue in the first three months of 2021. As of March 31, 2021, our contract liability balances totaled $77 million.

Cash, Cash Equivalents and Restricted Cash

On the Consolidated Statements of Cash Flows, the total of Cash, cash equivalents and restricted cash includes restricted cash of $7 million as of March 31, 2021, December 31, 2020, March 31, 2020 and December 31, 2019. Restricted cash primarily represents amounts received from a counterparty related to its performance assurance on an executory contract, which is included in Other current assets on the Consolidated Balance Sheets. These amounts are contractually required to be set aside, and the counterparty can exchange the cash for another form of performance assurance at its discretion.

Related Party Transactions

In the first quarter of 2021, a related party relationship was established as a result of a member of the Company’s Board of Directors being named an executive officer of one of the Company’s preexisting suppliers. The related party transactions with this supplier consist of the purchase of raw materials. Purchases from the related party supplier for the three months ended March 31, 2021 were $20 million. As of March 31, 2021, amounts due to the related party supplier were $5 million.

Leases

During the first quarter of 2021, the Company entered into a lease for a warehouse located near our manufacturing facility in Fort Smith, Arkansas that is expected to commence in 2022. The lease is for a to-be-constructed warehouse where the Company will serve as the construction agent for the landlord. At no point during the construction period will the Company control the underlying asset as defined in ASC 842 (Leases). This lease will result in finance lease right-of-use assets and corresponding lease liabilities of approximately $35 million at the time of lease commencement.

Accounting Pronouncements

The following table summarizes recent ASU's issued by the Financial Accounting Standards Board (FASB) that could have an impact on the Company's Consolidated Financial Statements:
StandardDescriptionEffective Date for CompanyEffect on the
Consolidated Financial Statements
Recently adopted standards:
ASU 2019-12 "Income Taxes (Topic 740)"This standard simplifies accounting for income taxes including such topics as intraperiod tax allocations, franchise taxes and separate company financial statements.January 1, 2021The adoption of this standard did not have a material effect on our consolidated financial statements.



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OWENS CORNING AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
2.    SEGMENT INFORMATION
The Company has three reportable segments: Composites, Insulation and Roofing. Accounting policies for the segments are the same as those for the Company. The Company’s three reportable segments are defined as follows:
Composites – The Company manufactures, fabricates and sells glass reinforcements in the form of fiber. Glass reinforcement materials are also used downstream by the Composites segment to manufacture and sell glass fiber products in the form of fabrics, non-wovens and other specialized products.
Insulation – Within our Insulation segment, the Company manufactures and sells fiberglass insulation into residential, commercial, industrial and other markets for both thermal and acoustical applications. It also manufactures and sells glass fiber pipe insulation, flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation and foam insulation used in above- and below-grade construction applications.
Roofing – Within our Roofing segment, the Company manufactures and sells residential roofing shingles, oxidized asphalt materials, roofing components used in residential and commercial construction and specialty applications, and synthetic packaging materials.
NET SALES
The following table summarizes our Net sales by segment and geographic region (in millions). Corporate eliminations (shown below) largely reflect intercompany sales from Composites to Roofing. External customer sales are attributed to geographic region based upon the location from which the product is sold to the external customer.

For the three months ended March 31, 2021
Reportable SegmentsCompositesInsulationRoofingEliminationsConsolidated
Disaggregation Categories
U.S. residential$75 $263 $659 $(55)$942 
U.S. commercial and industrial146 162 22  330 
Total United States221 425 681 (55)1,272 
Europe159 153 3  315 
Asia-Pacific138 36 3  177 
Rest of world41 86 24  151 
NET SALES$559 $700 $711 $(55)$1,915 

For the three months ended March 31, 2020
Reportable SegmentsCompositesInsulationRoofingEliminationsConsolidated
Disaggregation Categories
U.S. residential$66 $211 $492 $(50)$719 
U.S. commercial and industrial151 162 28  341 
Total United States217 373 520 (50)1,060 
Europe141 143 4 (1)287 
Asia-Pacific105 20 3  128 
Rest of world31 67 28  126 
NET SALES$494 $603 $555 $(51)$1,601 




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OWENS CORNING AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

2.    SEGMENT INFORMATION (continued)


EARNINGS BEFORE INTEREST AND TAXES

Earnings before interest and taxes (EBIT) by segment consist of net sales less related costs and expenses and are presented on a basis that is used internally for evaluating segment performance. Certain items, such as general corporate expenses or income and certain other expense or income items, are excluded from the internal evaluation of segment performance. Accordingly, these items are not reflected in EBIT for our reportable segments and are included within Corporate, Other and Eliminations.
The following table summarizes EBIT by segment (in millions):
  
Three Months Ended
March 31,
  
20212020
Reportable Segments
Composites$79 $44 
Insulation82 39 
Roofing156 64 
Total reportable segments317 147 
Restructuring costs(1)(5)
Gains on sale of certain precious metals20 10 
Goodwill impairment charge (944)
Intangible assets impairment charge (43)
General corporate expense and other(35)(31)
Total corporate, other and eliminations(16)(1,013)
EBIT$301 $(866)


3.    INVENTORIES
Inventories consist of the following (in millions):
March 31, 2021December 31, 2020
Finished goods$511 $532 
Materials and supplies343 323 
Total inventories$854 $855 



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OWENS CORNING AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
4.    DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to, among other risks, the impact of changes in commodity prices, foreign currency exchange rates, and interest rates in the normal course of business. The Company’s risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes derivative financial instruments to offset a portion of these risks. The Company uses derivative financial instruments only to the extent necessary to hedge identified business risks, and does not enter into such transactions for trading purposes.
The Company generally does not require collateral or other security with counterparties to these financial instruments and is therefore subject to credit risk in the event of nonperformance; however, the Company monitors credit risk and currently does not anticipate nonperformance by other parties. Contracts with counterparties generally contain right of offset provisions. These provisions effectively reduce the Company’s exposure to credit risk in situations where the Company has gain and loss positions outstanding with a single counterparty. It is the Company’s policy to offset on the Consolidated Balance Sheets the amounts recognized for derivative instruments with any cash collateral arising from derivative instruments executed with the same counterparty under a master netting agreement. As of March 31, 2021 and December 31, 2020, the Company did not have any amounts on deposit with any of its counterparties, nor did any of its counterparties have any amounts on deposit with the Company.
Derivative Fair Values

Our derivatives consist of natural gas forward swaps, cross-currency swaps, foreign exchange forward contracts and U.S. treasury rate lock agreements, all of which are over-the-counter and not traded through an exchange. The Company uses widely accepted valuation tools to determine fair value, such as discounting cash flows to calculate a present value for the derivatives. The models use Level 2 inputs, such as forward curves and other commonly quoted observable transactions and prices. The fair value of our derivatives and hedging instruments are all classified as Level 2 investments within the three-tier hierarchy.

The following table presents the fair value of derivatives and hedging instruments and the respective location on the Consolidated Balance Sheets (in millions):
  Fair Value at
 LocationMarch 31, 2021December 31, 2020
Derivative assets designated as hedging instruments:
Net investment hedges:
       Cross-currency swapsOther current assets$5 $5 
Cash flow hedges:
Natural gas forward swapsOther current assets$3 $2 
Treasury interest rate lockOther non-current assets$19 $4 
Derivative liabilities designated as hedging instruments:
Net investment hedges:
       Cross-currency swapsOther liabilities$7 $11 
Derivative assets not designated as hedging instruments:
Foreign exchange forward contractsOther current assets$16 $2 
Derivative liabilities not designated as hedging instruments:
Foreign exchange forward contractsOther current liabilities$1 $45 



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OWENS CORNING AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

4.    DERIVATIVE FINANCIAL INSTRUMENTS (continued)

Consolidated Statements of Earnings (Loss) Activity
The following table presents the impact and respective location of derivative activities on the Consolidated Statements of Earnings (Loss) (in millions):
  
  
Three Months Ended
March 31,
  
Location20212020
Derivative activity designated as hedging instruments:
Natural gas cash flow hedges:
Amount of (gain)/loss reclassified from AOCI (as defined below) into earnings (a)Cost of sales$(1)$2 
Cross-currency swap net investment hedges:
Amount of gain recognized in earnings on derivative amounts excluded from effectiveness testingInterest expense, net$(1)$(3)
Derivative activity not designated as hedging instruments:
Foreign currency:
Amount of gain recognized in earnings (b)Other (income) expenses, net$(20)$(12)

(a)Accumulated Other Comprehensive Earnings (Deficit) ("AOCI")
(b)Gains related to foreign currency derivatives were substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures, which were also recorded in Other (income) expenses, net. Please refer to the "Other Derivatives" section below for additional detail.

Consolidated Statements of Comprehensive Earnings (Loss) Activity

The following table presents the impact of derivative activities on the Consolidated Statements of Comprehensive Earnings (Loss) (in millions):
Amount of (Gain) Loss Recognized in Comprehensive Earnings (Loss)
Three Months Ended
March 31,
Hedging TypeDerivative Financial Instrument20212020
Net investment hedgeCross-currency swaps$(5)$(42)
Cash flow hedgeNatural gas forward swaps$(4)$ 
Cash flow hedgeTreasury interest rate lock$(15)$1 
Cash Flow Hedges
The Company uses a combination of derivative financial instruments, which qualify as cash flow hedges, and physical contracts to manage forecasted exposure to electricity and natural gas prices. As of March 31, 2021, the notional amounts of these natural gas forward swaps was 2 million MMBtu (or MMBtu equivalent) based on European indices.
In March 2020, the Company entered into a $175 million forward U.S. Treasury rate lock agreement to manage the U.S. Treasury portion of its interest rate risk associated with the anticipated issuance of certain 10-year fixed rate senior notes before the end of 2022. The Company intends to cash settle this agreement upon a future issuance of certain senior notes thereby effectively locking in the U.S. Treasury fixed interest rate in effect at the time the agreement was initiated. The locked fixed rate of this agreement is 0.994%. The Company has designated this outstanding forward U.S. Treasury rate lock agreement, which expires on December 15, 2022, as a cash flow hedge.


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OWENS CORNING AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)

4.    DERIVATIVE FINANCIAL INSTRUMENTS (continued)

Net Investment Hedges
The Company has translation exposure resulting from translating the financial statements of foreign subsidiaries into U.S. Dollars, which is recognized in Currency translation adjustment (a component of AOCI). The Company uses cross-currency forward contracts to hedge portions of the net investment in foreign subsidiaries against fluctuations in foreign exchange rates. As of March 31, 2021, the notional amount of these derivative financial instruments was $218 million related to the U.S. Dollar and European Euro. In the second quarter of 2020, the Company unwound certain net investment hedge contracts, resulting in cash proceeds of $30 million.
Other Derivatives
The Company uses forward currency exchange contracts to manage existing exposures to foreign exchange risk related to assets and liabilities recorded on the Consolidated Balance Sheets. As of March 31, 2021, the Company had notional amounts of $606 million for non-designated derivative financial instruments related to foreign currency exposures in U.S. Dollars primarily related to Brazilian Real, Chinese Yuan, European Euro, Hong Kong Dollar, Indian Rupee, and South Korean Won. In addition, the Company had notional amounts of $105 million for non-designated derivative financial instruments related to foreign currency exposures in European Euro primarily related to the Polish Zloty and Russian Ruble.



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OWENS CORNING AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(unaudited)
5.     GOODWILL AND OTHER INTANGIBLE ASSETS