þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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r
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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43-2109021
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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One Owens Corning Parkway,
Toledo, OH
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43659
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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New York Stock Exchange
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Page
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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ITEM 16.
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ITEM 1.
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BUSINESS
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ITEM 1A.
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RISK FACTORS
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•
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the financial stability of our customers or suppliers may be compromised, which could result in reduced demand for our products, additional bad debts for the Company or non-performance by suppliers;
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one or more of the financial institutions syndicated under the credit agreement governing our revolving credit facility may cease to be able to fulfill their funding obligations, which could materially adversely impact our liquidity;
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it may become more costly or difficult to obtain financing or refinance the Company’s debt in the future;
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the value of the Company’s assets held in pension plans may decline; and/or
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the Company’s assets may be impaired or subject to write-down or write-off.
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our ability to obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes may be limited;
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a substantial portion of our cash flow from operations could be required for the payment of principal and interest on our indebtedness, and may not be available for other business purposes;
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certain of our borrowings are at variable rates of interest, exposing us to the risk of increased interest rates;
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if due to liquidity needs we must replace any indebtedness upon maturity, we would be exposed to the risk that we may not be able to refinance such indebtedness;
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our ability to adjust to changing market conditions may be limited and place us at a competitive disadvantage compared to our competitors that have less debt; and
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we may be vulnerable in a downturn in general economic conditions or in our business, or we may be unable to carry out important capital spending.
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generally, any weather conditions that slow or limit residential or commercial construction activity can adversely impact demand for our products; and
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a portion of our annual product demand is attributable to the repair of damage caused by severe storms. In periods with below average levels of severe storms, demand for such products could be reduced.
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difficulties and costs associated with complying with a wide variety of complex and changing laws, including securities laws, tax laws, employment and pension-related laws, competition laws, U.S. and foreign export and trading laws, and laws governing improper business practices, treaties and regulations;
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limitations on our ability to enforce legal rights and remedies;
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adverse domestic or international economic and political conditions, business interruption, war and civil disturbance;
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changes to tax, currency, or other laws or policies that may adversely impact our ability to repatriate cash from non-United States subsidiaries, make cross-border investments, or engage in other intercompany transactions;
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future regulatory guidance and interpretations of the tax legislation commonly known as the U.S. Tax Cuts and Jobs Act of 2017 (the "Tax Act"), as well as assumptions that the Company makes related to the Tax Act;
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changes to tariffs or other import or export restrictions or penalties, including modification or elimination of international agreements covering trade or investment;
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costs and availability of shipping and transportation;
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nationalization or forced relocation of properties by foreign governments;
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currency exchange rate fluctuations between the United States dollar and foreign currencies; and
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uncertainty with respect to any potential changes to laws, regulations and policies that could exacerbate the risks described above.
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unforeseen difficulties in operations, technologies, products, services, accounting and personnel;
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increased cybersecurity risks;
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diversion of financial and management resources from existing operations;
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unforeseen difficulties related to entering geographic regions, markets or product lines where we do not have prior experience;
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risks relating to obtaining sufficient financing;
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difficulty in integrating the acquired business’ standards, processes, procedures and controls with our existing operations;
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potential loss of key employees;
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unanticipated competitive responses;
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potential loss of customers; and
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•
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undisclosed or undiscovered liabilities or claims, or retention of unpredictable future liabilities.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Aiken, South Carolina
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Jackson, Tennessee
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Amarillo, Texas
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Kimchon, Korea
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Anderson, South Carolina
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L’Ardoise, France
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Apeldoorn, The Netherlands
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Rio Claro, Brazil
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Chambery, France
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Taloja, India
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Gastonia, North Carolina
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Tlaxcala, Mexico
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Gous, Russia
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Yuhang, China
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Delmar, New York
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Santa Clara, California
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Edmonton, Alberta, Canada
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Sedalia, Missouri
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Fairburn, Georgia
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Tallmadge, Ohio
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Guangzhou, Guandong, China
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Tessenderlo, Belgium
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Joplin, Missouri
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Toronto, Ontario, Canada
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Kansas City, Kansas
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Trzemeszno, Poland
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Mexico City, Mexico
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Vilnius, Lithuania
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Newark, Ohio
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Wabash, Indiana
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Rockford, Illinois
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Waxahachie, Texas
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Brookville, Indiana
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Minneapolis, Minnesota
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Denver, Colorado
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Portland, Oregon
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Irving, Texas
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Qingdao, China
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Kearny, New Jersey
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Savannah, Georgia
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Medina, Ohio
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Silvassa, India
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Memphis, Tennessee
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Summit, Illinois
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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Name and Age
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Position*
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Brian D. Chambers (52)**
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President and Chief Operating Officer since August 2018; formerly President, Roofing (2014); formerly Vice President and General Manager, Roofing (2013)
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Julian Francis (52)
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President, Insulation since October 2014; formerly Vice President and General Manager, Residential Insulation (2012)
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Ava Harter (49)
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Senior Vice President, General Counsel and Secretary since May 2015; formerly General Counsel, Chief Compliance Officer and Corporate Secretary, Taleris America LLC (2012)
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Michael C. McMurray (53)
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Senior Vice President and Chief Financial Officer since August 2012
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Marcio Sandri (55)
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President, Composites since May 2018; formerly Vice President Global Strategy and Operations, Composites (2017); formerly Vice President and General Manager, Composites (2007)
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Kelly J. Schmidt (53)
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Vice President, Controller since April 2011
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Daniel T. Smith (53)
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Senior Vice President, Organization and Administration since November 2014; formerly Senior Vice President, Information Technology and Human Resources (2012)
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Gunner Smith (45)
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President, Roofing since August 2018, formerly Vice President of Distribution Sales for Roofing (2012)
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Michael H. Thaman (54)**
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Chief Executive Officer since December 2007 and Chairman of the Board since April 2002; Director since 2002
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*
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Information in parentheses indicates year during the past five years in which service in position began. The last item listed for each individual represents the position held by such individual at the beginning of the five-year period.
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**
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On January 3, 2019, the Company announced that its Board of Directors elected Brian D. Chambers to succeed Michael H. Thaman as Chief Executive Officer, effective April 18, 2019. Please refer to Exhibit 10.16 (filed herewith) for the transition agreement between Michael H. Thaman and the Company.
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ITEM 5.
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MARKET FOR OWENS CORNING’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Period
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Total Number of
Shares (or Units)
Purchased*
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Average Price
Paid per Share
(or Unit)
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Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs**
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Maximum Number of
Shares (or Units) that
May Yet Be
Purchased Under the
Plans or Programs**
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October 1-31, 2018
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2,026
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$
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50.85
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—
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4,581,726
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November 1-30, 2018
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—
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—
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—
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4,581,726
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December 1-31, 2018
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628
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56.60
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—
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4,581,726
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Total
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2,654
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$
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52.21
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—
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4,581,726
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*
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The Company retained 2,654 shares surrendered to satisfy tax withholding obligations in connection with the vesting of restricted shares granted to our employees.
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**
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On October 24, 2016, the Board of Directors approved a share buy-back program under which the Company is authorized to repurchase up to 10 million shares of the Company's outstanding common stock (the “Repurchase Authorization"). The Repurchase Authorization enables the Company to repurchase shares through open market, privately negotiated, or other transactions. The actual number of shares repurchased will depend on timing, market conditions and other factors and is at the Company's discretion. The Company did not repurchase any shares of its common stock during the three months ended December 31, 2018 under the Repurchase Authorization. As of December 31, 2018, approximately 4.6 million shares remain available for repurchase under the Repurchase Authorization.
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ITEM 5.
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MARKET FOR OWENS CORNING’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (continued)
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2013
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2014
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2015
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2016
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2017
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2018
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OC
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$
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100
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$
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90
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$
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119
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$
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133
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$
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240
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$
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116
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S&P 500
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$
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100
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$
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114
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$
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115
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$
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129
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$
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157
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$
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150
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DJ Bld. Mat.
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$
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100
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$
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111
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$
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126
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|
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$
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150
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$
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177
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$
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140
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ITEM 6.
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SELECTED FINANCIAL DATA
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Twelve Months Ended December 31,
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2018(a)
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2017(b)
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2016(c)
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2015(d)
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2014(e)
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(in millions, except per share amounts)
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Statement of Earnings Data
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Net sales
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$
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7,057
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$
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6,384
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$
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5,677
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$
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5,350
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|
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$
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5,260
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Gross margin
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$
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1,632
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|
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$
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1,569
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|
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$
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1,377
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$
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1,153
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$
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976
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Marketing and administrative expenses
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$
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700
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|
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$
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620
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|
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$
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584
|
|
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$
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525
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$
|
487
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Earnings before interest and taxes
|
$
|
821
|
|
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$
|
737
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|
|
$
|
699
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|
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$
|
548
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|
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$
|
392
|
|
Interest expense, net
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$
|
117
|
|
|
$
|
107
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|
|
$
|
108
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|
|
$
|
100
|
|
|
$
|
114
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|
Loss (gain) on extinguishment of debt
|
$
|
—
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|
|
$
|
71
|
|
|
$
|
1
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|
|
$
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(5
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)
|
|
$
|
46
|
|
Income tax expense
|
$
|
156
|
|
|
$
|
269
|
|
|
$
|
188
|
|
|
$
|
120
|
|
|
$
|
5
|
|
Net earnings
|
$
|
547
|
|
|
$
|
290
|
|
|
$
|
399
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|
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$
|
334
|
|
|
$
|
228
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|
Net earnings attributable to Owens Corning
|
$
|
545
|
|
|
$
|
289
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|
|
$
|
393
|
|
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$
|
330
|
|
|
$
|
226
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|
Earnings per common share attributable to Owens Corning common stockholders
|
|
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|
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Basic
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$
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4.94
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|
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$
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2.59
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$
|
3.44
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|
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$
|
2.82
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|
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$
|
1.92
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Diluted
|
$
|
4.89
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$
|
2.55
|
|
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$
|
3.41
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|
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$
|
2.79
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|
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$
|
1.91
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Dividend
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$
|
0.85
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|
|
$
|
0.81
|
|
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$
|
0.74
|
|
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$
|
0.68
|
|
|
$
|
0.64
|
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Weighted-average common shares
|
|
|
|
|
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||||||||||
Basic
|
110.4
|
|
|
111.5
|
|
|
114.4
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|
|
117.2
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|
|
117.5
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Diluted
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111.4
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113.2
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115.4
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118.2
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118.3
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Balance Sheet Data
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Total assets
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$
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9,771
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|
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$
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8,632
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|
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$
|
7,741
|
|
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$
|
7,326
|
|
|
$
|
7,483
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Long-term debt, net of current portion
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$
|
3,362
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|
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$
|
2,405
|
|
|
$
|
2,099
|
|
|
$
|
1,702
|
|
|
$
|
1,978
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|
Total equity
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$
|
4,324
|
|
|
$
|
4,204
|
|
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$
|
3,889
|
|
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$
|
3,779
|
|
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$
|
3,730
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(a)
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During 2018, the Company recorded $22 million of restructuring costs, comprised of $4 million of severance, $10 million of accelerated depreciation and $8 million of other exit costs. In connection with our previously announced acquisitions, mainly Paroc, we recognized $16 million of acquisition-related costs and a $2 million charge related to inventory fair value step-up. Outside of earnings before interest and taxes, the Company also recorded a $32 million gain related to the settlement of an uncertain tax position in Finland and a $9 million non-cash income tax charge related to the Tax Act.
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(b)
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During 2017, the Company recorded $48 million of restructuring costs, comprised of $27 million of severance, $17 million of accelerated depreciation and $4 million of other exit costs. In connection with our previously announced acquisitions, mainly Pittsburgh Corning, we recognized $15 million of acquisition-related costs and a $5 million charge related to inventory fair value step-up. Other significant items included $64 million of pension settlement losses from risk mitigation actions, a $15 million environmental liability charge for a closed U.S. site, partially offset by a $29 million litigation settlement gain, net of legal fees. Outside of earnings before interest and taxes, the Company also recorded a $71 million loss on debt extinguishment and an $82 million non-cash income tax charge related to the Tax Act.
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(c)
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During 2016, the Company recorded $28 million of restructuring costs, comprised of $19 million of accelerated depreciation, $6 million of facility-related charges and $3 million of personnel-related charges. In connection with our previously announced acquisitions, mainly InterWrap Holdings, Inc. ("InterWrap"), we recognized $9 million of acquisition-related costs and a $10 million charge related to inventory fair value step-up.
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(d)
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During 2015, the Company recorded $2 million of restructuring costs. This was comprised of a $6 million benefit from changes in severance estimates and pension-related adjustments, offset by $3 million in accelerated depreciation and $5 million in other exit costs. The retrospective adoption requirements of ASU 2017-07 had a de minimis effect on 2015, and was not applied to the results shown above due to immateriality.
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(e)
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During 2014, the Company recorded $36 million of restructuring costs, comprised of $34 million of severance costs, $3 million of contract termination costs, and partially offset by $1 million of other related gains. There was also a gain of $45 million related to the sale of the Hangzhou, China facility, a $20 million loss related to the sale of the European Stone Business, $3 million related to the impairment loss on Alcala, Spain facility, and $6 million related to Hurricane Sandy costs. Outside of earnings before interest and taxes, the Company recorded a $46 million loss on debt extinguishment. The retrospective adoption requirements of ASU 2017-07 had a de minimis effect on 2014, and was not applied to the results shown above due to immateriality.
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
7,057
|
|
|
$
|
6,384
|
|
|
$
|
5,677
|
|
Gross margin
|
$
|
1,632
|
|
|
$
|
1,569
|
|
|
$
|
1,377
|
|
% of net sales
|
23
|
%
|
|
25
|
%
|
|
24
|
%
|
|||
Marketing and administrative expenses
|
$
|
700
|
|
|
$
|
620
|
|
|
$
|
584
|
|
Other expenses, net
|
$
|
36
|
|
|
$
|
67
|
|
|
$
|
14
|
|
Non-operating (income) expense
|
$
|
(14
|
)
|
|
$
|
60
|
|
|
$
|
(2
|
)
|
Earnings before interest and taxes
|
$
|
821
|
|
|
$
|
737
|
|
|
$
|
699
|
|
Interest expense, net
|
$
|
117
|
|
|
$
|
107
|
|
|
$
|
108
|
|
Loss (gain) on extinguishment of debt
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
1
|
|
Income tax expense
|
$
|
156
|
|
|
$
|
269
|
|
|
$
|
188
|
|
Net earnings attributable to Owens Corning
|
$
|
545
|
|
|
$
|
289
|
|
|
$
|
393
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
Location
|
|
2018
|
|
2017
|
|
2016
|
||||||
Restructuring costs
|
Cost of sales
|
|
$
|
(17
|
)
|
|
$
|
(20
|
)
|
|
$
|
(25
|
)
|
Restructuring costs
|
Other expenses, net
|
|
(5
|
)
|
|
(28
|
)
|
|
(3
|
)
|
|||
Acquisition-related costs
|
Marketing and administrative expenses
|
|
(7
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
Acquisition-related costs
|
Other expenses, net
|
|
(9
|
)
|
|
(9
|
)
|
|
(3
|
)
|
|||
Recognition of acquisition inventory fair value step-up
|
Cost of sales
|
|
(2
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|||
Total restructuring, acquisition and integration-related costs
|
|
|
$
|
(40
|
)
|
|
$
|
(68
|
)
|
|
$
|
(47
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Restructuring costs
|
$
|
(22
|
)
|
|
$
|
(48
|
)
|
|
$
|
(28
|
)
|
Acquisition-related costs
|
(16
|
)
|
|
(15
|
)
|
|
(9
|
)
|
|||
Recognition of acquisition inventory fair value step-up
|
(2
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|||
Litigation settlement gain, net of legal fees
|
—
|
|
|
29
|
|
|
—
|
|
|||
Pension settlement losses
|
—
|
|
|
(64
|
)
|
|
—
|
|
|||
Environmental liability charges
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||
Total adjusting items
|
$
|
(40
|
)
|
|
$
|
(118
|
)
|
|
$
|
(47
|
)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING
|
$
|
545
|
|
|
$
|
289
|
|
|
$
|
393
|
|
Net earnings attributable to noncontrolling interests
|
2
|
|
|
1
|
|
|
6
|
|
|||
NET EARNINGS
|
547
|
|
|
290
|
|
|
399
|
|
|||
Equity in loss of affiliates
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Income tax expense
|
156
|
|
|
269
|
|
|
188
|
|
|||
EARNINGS BEFORE TAXES
|
704
|
|
|
559
|
|
|
590
|
|
|||
Interest expense, net
|
117
|
|
|
107
|
|
|
108
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
71
|
|
|
1
|
|
|||
EARNINGS BEFORE INTEREST AND TAXES
|
821
|
|
|
737
|
|
|
699
|
|
|||
Adjusting items from above
|
(40
|
)
|
|
(118
|
)
|
|
(47
|
)
|
|||
ADJUSTED EBIT
|
$
|
861
|
|
|
$
|
855
|
|
|
$
|
746
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
2,041
|
|
|
$
|
2,068
|
|
|
$
|
1,952
|
|
% change from prior year
|
-1
|
%
|
|
6
|
%
|
|
3
|
%
|
|||
EBIT
|
$
|
251
|
|
|
$
|
291
|
|
|
$
|
264
|
|
EBIT as a % of net sales
|
12
|
%
|
|
14
|
%
|
|
14
|
%
|
|||
Depreciation and amortization expense
|
$
|
147
|
|
|
$
|
144
|
|
|
$
|
138
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
2,720
|
|
|
$
|
2,001
|
|
|
$
|
1,748
|
|
% change from prior year
|
36
|
%
|
|
14
|
%
|
|
-6
|
%
|
|||
EBIT
|
$
|
290
|
|
|
$
|
177
|
|
|
$
|
126
|
|
EBIT as a % of net sales
|
11
|
%
|
|
9
|
%
|
|
7
|
%
|
|||
Depreciation and amortization expense
|
$
|
186
|
|
|
$
|
124
|
|
|
$
|
106
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
2,492
|
|
|
$
|
2,553
|
|
|
$
|
2,194
|
|
% change from prior year
|
-2
|
%
|
|
16
|
%
|
|
24
|
%
|
|||
EBIT
|
$
|
434
|
|
|
$
|
535
|
|
|
$
|
486
|
|
EBIT as a % of net sales
|
17
|
%
|
|
21
|
%
|
|
22
|
%
|
|||
Depreciation and amortization expense
|
$
|
51
|
|
|
$
|
50
|
|
|
$
|
46
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Restructuring costs
|
$
|
(22
|
)
|
|
$
|
(48
|
)
|
|
$
|
(28
|
)
|
Acquisition-related costs
|
(16
|
)
|
|
(15
|
)
|
|
(9
|
)
|
|||
Recognition of acquisition inventory fair value step-up
|
(2
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|||
Litigation settlement gain, net of legal fees
|
—
|
|
|
29
|
|
|
—
|
|
|||
Pension settlement losses
|
—
|
|
|
(64
|
)
|
|
—
|
|
|||
Environmental liability charges
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||
General corporate expense and other
|
(114
|
)
|
|
(148
|
)
|
|
(130
|
)
|
|||
EBIT
|
$
|
(154
|
)
|
|
$
|
(266
|
)
|
|
$
|
(177
|
)
|
Depreciation and amortization
|
$
|
49
|
|
|
$
|
53
|
|
|
$
|
53
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
As of December 31, 2018
|
|||||
|
Senior Revolving Credit Facility
|
Receivables Securitization Facility
|
||||
Facility size
|
$
|
800
|
|
$
|
280
|
|
Collateral capacity limitation on availability
|
n/a
|
|
—
|
|
||
Outstanding borrowings
|
—
|
|
75
|
|
||
Outstanding letters of credit
|
9
|
|
3
|
|
||
Availability on facility
|
$
|
791
|
|
$
|
202
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash and cash equivalents
|
$
|
78
|
|
|
$
|
246
|
|
|
$
|
112
|
|
Cash provided by operating activities
|
$
|
803
|
|
|
$
|
1,016
|
|
|
$
|
943
|
|
Cash used for investing activities
|
$
|
(1,589
|
)
|
|
$
|
(901
|
)
|
|
$
|
(815
|
)
|
Cash provided by (used for) financing activities
|
$
|
647
|
|
|
$
|
3
|
|
|
$
|
(88
|
)
|
Availability on the Senior Revolving Credit Facility
|
$
|
791
|
|
|
$
|
791
|
|
|
$
|
791
|
|
Availability on the Receivables Securitization Facility
|
$
|
202
|
|
|
$
|
221
|
|
|
$
|
248
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
|
Payments due by period
|
||||||||||||||||||||||||||
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and
Beyond
|
|
Total
|
||||||||||||||
Long-term debt obligations
|
$
|
5
|
|
|
$
|
135
|
|
|
$
|
435
|
|
|
$
|
600
|
|
|
$
|
—
|
|
|
$
|
2,210
|
|
|
$
|
3,385
|
|
Interest on variable rate debt (1), fixed rate debt, capital lease payments
|
152
|
|
|
149
|
|
|
132
|
|
|
129
|
|
|
103
|
|
|
1,482
|
|
|
2,147
|
|
|||||||
Capital lease obligations
|
4
|
|
|
5
|
|
|
5
|
|
|
4
|
|
|
3
|
|
|
6
|
|
|
27
|
|
|||||||
Operating lease obligations
|
83
|
|
|
64
|
|
|
47
|
|
|
31
|
|
|
18
|
|
|
27
|
|
|
270
|
|
|||||||
Purchase obligations (2)
|
246
|
|
|
77
|
|
|
73
|
|
|
63
|
|
|
58
|
|
|
77
|
|
|
594
|
|
|||||||
Deferred acquisition payments
|
2
|
|
|
1
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Pension contributions (3)
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|||||||
Total (4)
|
$
|
531
|
|
|
$
|
431
|
|
|
$
|
695
|
|
|
$
|
827
|
|
|
$
|
182
|
|
|
$
|
3,802
|
|
|
$
|
6,468
|
|
(1)
|
Interest on variable rate debt is calculated using LIBOR rates as of
December 31, 2018
plus a facility credit spread for all future periods.
|
(2)
|
Purchase obligations are commitments to suppliers to purchase goods or services, and include take-or-pay arrangements, capital expenditures, and contractual commitments to purchase equipment. The Company did not include ordinary course of business purchase orders in this amount as the majority of such purchase orders may be canceled and are reflected in historical operating cash flow trends. The Company does not believe such purchase orders will adversely affect our liquidity position.
|
(3)
|
Pension contributions include estimated contributions for our defined benefit pension plans. The Company is not presenting estimated payments in the table above beyond
2019
as funding can vary significantly from year to year based upon changes in the fair value of plan assets, funding regulations and actuarial assumptions.
|
(4)
|
The Company has not included its accounting for uncertainty in income taxes liability in the contractual obligation table as the timing of payment, if any, cannot be reasonably estimated. The balance of this liability at
December 31, 2018
was $29 million.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
Segment
|
December 31, 2018
|
Percent of Total
|
|||
Composites
|
$
|
57
|
|
3
|
%
|
Insulation
|
1,495
|
|
77
|
%
|
|
Roofing
|
397
|
|
20
|
%
|
|
Total goodwill
|
$
|
1,949
|
|
100
|
%
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
•
|
levels of residential and commercial construction activity;
|
•
|
relationships with key customers and customer concentration in certain areas;
|
•
|
competitive and pricing factors;
|
•
|
levels of global industrial production;
|
•
|
demand for our products;
|
•
|
industry and economic conditions that affect the market and operating conditions of our customers, suppliers or lenders;
|
•
|
domestic and international economic and political conditions, policies or other governmental actions, legislation and related regulations or interpretations, in the United States or elsewhere;
|
•
|
changes to tariff, trade or investment policies or laws;
|
•
|
foreign exchange and commodity price fluctuations;
|
•
|
our level of indebtedness;
|
•
|
weather conditions;
|
•
|
issues involving implementation and protection of information technology systems;
|
•
|
availability and cost of credit;
|
•
|
the level of fixed costs required to run our business;
|
•
|
availability and cost of energy and raw materials;
|
•
|
labor disputes or shortages, or loss of key employees;
|
•
|
environmental, product-related or other legal and regulatory liabilities, proceedings or, actions;
|
•
|
our ability to utilize our net operating loss carryforwards;
|
•
|
research and development activities and intellectual property protection;
|
•
|
interest rate movements;
|
•
|
uninsured losses;
|
•
|
issues related to acquisitions, divestitures and joint ventures;
|
•
|
achievement of expected synergies, cost reductions and/or productivity improvements;
|
•
|
levels of goodwill or other indefinite-lived intangible assets;
|
•
|
defined benefit plan funding obligations; and
|
•
|
price volatility in certain wind energy markets in the U.S;
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (continued)
|
|
Senior Notes Maturity Year
|
|||||
As of December 31, 2018:
|
2022
|
2024
|
2026
|
2036
|
2047
|
2048
|
Increase in interest rates
|
|
|
|
|
|
|
Decrease in fair value
|
4%
|
5%
|
6%
|
10%
|
13%
|
13%
|
Decrease in interest rates
|
|
|
|
|
|
|
Increase in fair value
|
4%
|
6%
|
7%
|
12%
|
16%
|
16%
|
|
|
|
|
|
|
|
|
Senior Notes Maturity Year
|
|||||
As of December 31, 2017:
|
2022
|
2024
|
2026
|
2036
|
2047
|
2048
|
Increase in interest rates
|
|
|
|
|
|
|
Decrease in fair value
|
4%
|
6%
|
7%
|
11%
|
15%
|
n/a
|
Decrease in interest rates
|
|
|
|
|
|
|
Increase in fair value
|
5%
|
6%
|
8%
|
13%
|
19%
|
n/a
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
DOCUMENTS FILED AS PART OF THIS REPORT
|
Exhibit
Number
|
|
Description
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
4.10
|
|
|
|
|
|
4.11
|
|
|
|
|
|
4.12
|
|
|
|
|
|
4.13
|
|
|
|
|
|
4.14
|
|
|
|
|
|
4.15
|
|
|
|
|
|
4.16
|
|
|
|
|
|
4.17
|
|
|
|
|
|
4.18
|
|
|
|
|
|
4.19
|
|
|
|
|
|
4.20
|
|
|
|
|
|
4.21
|
|
|
|
|
|
4.22
|
|
|
|
|
|
4.23
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
+
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Owens Corning agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule upon request.
|
*
|
Denotes management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Form 10-K.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
|
|
|
By
|
|
/s/ Michael H. Thaman
|
|
February 20, 2019
|
|
|
Michael H. Thaman,
|
|
|
|
|
Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/ Michael H. Thaman
|
|
February 20, 2019
|
|
|
Michael H. Thaman,
|
|
|
|
|
Chairman of the Board
|
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
|
|
|
|
|
|
/s/ Michael C. McMurray
|
|
February 20, 2019
|
|
|
Michael C. McMurray,
|
|
|
|
|
Senior Vice President and
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
/s/ Kelly J. Schmidt
|
|
February 20, 2019
|
|
|
Kelly J. Schmidt,
|
|
|
|
|
Vice President and Controller
|
|
|
|
|
|
|
|
|
|
/s/ Cesar Conde
|
|
February 20, 2019
|
|
|
Cesar Conde,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ Adrienne Elsner
|
|
February 20, 2019
|
|
|
Adrienne Elsner,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ J. Brian Ferguson
|
|
February 20, 2019
|
|
|
J. Brian Ferguson,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ Ralph F. Hake
|
|
February 20, 2019
|
|
|
Ralph F. Hake,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ Edward F. Lonergan
|
|
February 20, 2019
|
|
|
Edward F. Lonergan,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ Maryann T. Mannen
|
|
February 20, 2019
|
|
|
Maryann T. Mannen,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ W. Howard Morris
|
|
February 20, 2019
|
|
|
W. Howard Morris,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ Suzanne P. Nimocks
|
|
February 20, 2019
|
|
|
Suzanne P. Nimocks,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
/s/ John D. Williams
|
|
February 20, 2019
|
|
|
John D. Williams,
|
|
|
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ITEM
|
PAGE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Michael H. Thaman
|
|
February 20, 2019
|
|
|
Michael H. Thaman,
|
|
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
/s/ Michael C. McMurray
|
|
February 20, 2019
|
|
|
Michael C. McMurray,
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
/s/ PricewaterhouseCoopers LLP
|
Toledo, Ohio
|
February 20, 2019
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
NET SALES
|
$
|
7,057
|
|
|
$
|
6,384
|
|
|
$
|
5,677
|
|
COST OF SALES
|
5,425
|
|
|
4,815
|
|
|
4,300
|
|
|||
Gross margin
|
1,632
|
|
|
1,569
|
|
|
1,377
|
|
|||
OPERATING EXPENSES
|
|
|
|
|
|
||||||
Marketing and administrative expenses
|
700
|
|
|
620
|
|
|
584
|
|
|||
Science and technology expenses
|
89
|
|
|
85
|
|
|
82
|
|
|||
Other expenses, net
|
36
|
|
|
67
|
|
|
14
|
|
|||
Total operating expenses
|
825
|
|
|
772
|
|
|
680
|
|
|||
OPERATING INCOME
|
807
|
|
|
797
|
|
|
697
|
|
|||
Non-operating (income) expense
|
(14
|
)
|
|
60
|
|
|
(2
|
)
|
|||
EARNINGS BEFORE INTEREST AND TAXES
|
821
|
|
|
737
|
|
|
699
|
|
|||
Interest expense, net
|
117
|
|
|
107
|
|
|
108
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
71
|
|
|
1
|
|
|||
EARNINGS BEFORE TAXES
|
704
|
|
|
559
|
|
|
590
|
|
|||
Income tax expense
|
156
|
|
|
269
|
|
|
188
|
|
|||
Equity in loss of affiliates
|
(1
|
)
|
|
—
|
|
|
(3
|
)
|
|||
NET EARNINGS
|
547
|
|
|
290
|
|
|
399
|
|
|||
Net earnings attributable to noncontrolling interests
|
2
|
|
|
1
|
|
|
6
|
|
|||
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING
|
$
|
545
|
|
|
$
|
289
|
|
|
$
|
393
|
|
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
|
|
|
|
|
|
||||||
Basic
|
$
|
4.94
|
|
|
$
|
2.59
|
|
|
$
|
3.44
|
|
Diluted
|
$
|
4.89
|
|
|
$
|
2.55
|
|
|
$
|
3.41
|
|
Dividend
|
$
|
0.85
|
|
|
$
|
0.81
|
|
|
$
|
0.74
|
|
WEIGHTED AVERAGE COMMON SHARES
|
|
|
|
|
|
||||||
Basic
|
110.4
|
|
|
111.5
|
|
|
114.4
|
|
|||
Diluted
|
111.4
|
|
|
113.2
|
|
|
115.4
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
NET EARNINGS
|
$
|
547
|
|
|
$
|
290
|
|
|
$
|
399
|
|
Currency translation adjustment (net of tax of $(4), $15 and $(2), for the periods ended December 31, 2018, 2017 and 2016, respectively)
|
(123
|
)
|
|
101
|
|
|
(37
|
)
|
|||
Pension and other postretirement adjustment (net of tax of $6, $(32) and $15, for the periods ended December 31, 2018, 2017 and 2016, respectively)
|
(19
|
)
|
|
98
|
|
|
(10
|
)
|
|||
Hedging adjustment (net of tax of $0, $2 and $(3), for the periods ended December 31, 2018, 2017 and 2016, respectively)
|
—
|
|
|
(3
|
)
|
|
7
|
|
|||
COMPREHENSIVE EARNINGS
|
405
|
|
|
486
|
|
|
359
|
|
|||
Comprehensive earnings attributable to noncontrolling interests
|
2
|
|
|
1
|
|
|
6
|
|
|||
COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING
|
$
|
403
|
|
|
$
|
485
|
|
|
$
|
353
|
|
|
December 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
78
|
|
|
$
|
246
|
|
Receivables, less allowances of $16 at December 31, 2018 and $19 at December 31, 2017
|
794
|
|
|
806
|
|
||
Inventories
|
1,072
|
|
|
841
|
|
||
Assets held for sale
|
3
|
|
|
12
|
|
||
Other current assets
|
73
|
|
|
80
|
|
||
Total current assets
|
2,020
|
|
|
1,985
|
|
||
Property, plant and equipment, net
|
3,811
|
|
|
3,425
|
|
||
Goodwill
|
1,949
|
|
|
1,507
|
|
||
Intangible assets, net
|
1,779
|
|
|
1,360
|
|
||
Deferred income taxes
|
43
|
|
|
144
|
|
||
Other non-current assets
|
169
|
|
|
211
|
|
||
TOTAL ASSETS
|
$
|
9,771
|
|
|
$
|
8,632
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Total current liabilities
|
$
|
1,278
|
|
|
$
|
1,282
|
|
Long-term debt, net of current portion
|
3,362
|
|
|
2,405
|
|
||
Pension plan liability
|
268
|
|
|
256
|
|
||
Other employee benefits liability
|
190
|
|
|
225
|
|
||
Deferred income taxes
|
141
|
|
|
37
|
|
||
Other liabilities
|
208
|
|
|
223
|
|
||
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
|
4,028
|
|
|
4,011
|
|
||
Accumulated earnings
|
2,013
|
|
|
1,575
|
|
||
Accumulated other comprehensive deficit
|
(656
|
)
|
|
(514
|
)
|
||
Cost of common stock in treasury (c)
|
(1,103
|
)
|
|
(911
|
)
|
||
Total Owens Corning stockholders’ equity
|
4,283
|
|
|
4,162
|
|
||
Noncontrolling interests
|
41
|
|
|
42
|
|
||
Total equity
|
4,324
|
|
|
4,204
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
9,771
|
|
|
$
|
8,632
|
|
(a)
|
10 shares authorized; none issued or outstanding at
December 31, 2018
and
December 31, 2017
|
(b)
|
400 shares authorized; 135.5 issued and
109.5
outstanding at
December 31, 2018
; 135.5 issued and
111.5
outstanding at
December 31, 2017
|
(c)
|
26.0
shares at
December 31, 2018
and
24.0
shares at
December 31, 2017
|
|
Common Stock
Outstanding |
|
Treasury
Stock |
|
APIC (a)
|
|
Accumulated
Earnings |
|
AOCI (b)
|
|
NCI (c)
|
|
Total
|
||||||||||||||||||||
|
Shares
|
|
Par Value
|
|
Shares
|
|
Cost
|
|
|||||||||||||||||||||||||
Balance at December 31, 2015
|
115.9
|
|
|
$
|
1
|
|
|
19.6
|
|
|
$
|
(612
|
)
|
|
$
|
3,965
|
|
|
$
|
1,055
|
|
|
$
|
(670
|
)
|
|
$
|
40
|
|
|
$
|
3,779
|
|
Net earnings attributable to Owens Corning
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
393
|
|
|
—
|
|
|
—
|
|
|
393
|
|
|||||||
Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
(2
|
)
|
|
(39
|
)
|
|||||||
Pension and other postretirement adjustment (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||||
Deferred gain on hedging transactions (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||||
Redeemable equity issued
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Issuance of common stock under share-based payment plans
|
1.7
|
|
|
|
|
(1.7
|
)
|
|
57
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
37
|
|
|||||||||||
Purchases of treasury stock
|
(4.9
|
)
|
|
—
|
|
|
4.9
|
|
|
(248
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(248
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|||||||
Cumulative effect of accounting change (d)
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
|
|
|
14
|
|
||||||||||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
|
—
|
|
|
(4
|
)
|
|
(89
|
)
|
|||||||
Balance at December 31, 2016
|
112.7
|
|
|
$
|
1
|
|
|
22.8
|
|
|
$
|
(803
|
)
|
|
$
|
3,984
|
|
|
$
|
1,377
|
|
|
$
|
(710
|
)
|
|
$
|
40
|
|
|
$
|
3,889
|
|
Net earnings attributable to Owens Corning
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
289
|
|
|
—
|
|
|
—
|
|
|
289
|
|
|||||||
Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
|
4
|
|
|
105
|
|
|||||||
Pension and other postretirement adjustment (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|
—
|
|
|
98
|
|
|||||||
Deferred gain on hedging transactions (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||||
Redeemable equity redeemed and changes in subsidiary shares from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|||||||
Issuance of common stock under share-based payment plans
|
1.3
|
|
|
—
|
|
|
(1.3
|
)
|
|
48
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||||
Purchases of treasury stock
|
(2.5
|
)
|
|
—
|
|
|
2.5
|
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
(2
|
)
|
|
(93
|
)
|
|||||||
Balance at December 31, 2017
|
111.5
|
|
|
$
|
1
|
|
|
24.0
|
|
|
$
|
(911
|
)
|
|
$
|
4,011
|
|
|
$
|
1,575
|
|
|
$
|
(514
|
)
|
|
$
|
42
|
|
|
$
|
4,204
|
|
Net earnings attributable to Owens Corning
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
545
|
|
|
—
|
|
|
—
|
|
|
545
|
|
|||||||
Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123
|
)
|
|
(2
|
)
|
|
(125
|
)
|
|||||||
Pension and other postretirement adjustment (net of tax)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||||
Issuance of common stock under share-based payment plans
|
1.0
|
|
|
—
|
|
|
(1.0
|
)
|
|
44
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||||
Purchases of treasury stock
|
(3.0
|
)
|
|
—
|
|
|
3.0
|
|
|
(236
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|||||||
Cumulative effect of accounting change (e)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
|
—
|
|
|
(1
|
)
|
|
(96
|
)
|
|||||||
Balance at December 31, 2018
|
109.5
|
|
|
$
|
1
|
|
|
26.0
|
|
|
$
|
(1,103
|
)
|
|
$
|
4,028
|
|
|
$
|
2,013
|
|
|
$
|
(656
|
)
|
|
$
|
41
|
|
|
$
|
4,324
|
|
(a)
|
Additional Paid in Capital (APIC)
|
(b)
|
Accumulated Other Comprehensive Earnings (Deficit) (“AOCI”)
|
(c)
|
Noncontrolling Interest (“NCI”)
|
(d)
|
Cumulative effect of accounting change relates to our adoption of ASU 2016-09 "Compensation - Stock Compensation (Topic 718)."
|
(e)
|
Cumulative effect of accounting change relates to our adoption of ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" and ASU 2016-16 "Intra-Entity Transfers of Assets Other Than Inventory (Topic 740)."
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net earnings
|
$
|
547
|
|
|
$
|
290
|
|
|
$
|
399
|
|
Adjustments to reconcile net earnings to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
433
|
|
|
371
|
|
|
343
|
|
|||
Deferred income taxes
|
141
|
|
|
183
|
|
|
136
|
|
|||
Provision for pension and other employee benefits liabilities
|
—
|
|
|
74
|
|
|
11
|
|
|||
Stock-based compensation expense
|
47
|
|
|
44
|
|
|
41
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
71
|
|
|
1
|
|
|||
Other adjustments to reconcile net earnings to cash provided by operating activities
|
(49
|
)
|
|
18
|
|
|
4
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Changes in receivables, net
|
39
|
|
|
(66
|
)
|
|
55
|
|
|||
Changes in inventories
|
(216
|
)
|
|
(57
|
)
|
|
5
|
|
|||
Changes in accounts payable and accrued liabilities
|
(89
|
)
|
|
187
|
|
|
25
|
|
|||
Changes in other operating assets and liabilities
|
7
|
|
|
(10
|
)
|
|
(4
|
)
|
|||
Pension fund contributions
|
(40
|
)
|
|
(72
|
)
|
|
(63
|
)
|
|||
Payments for other employee benefits liabilities
|
(19
|
)
|
|
(18
|
)
|
|
(18
|
)
|
|||
Other
|
2
|
|
|
1
|
|
|
8
|
|
|||
Net cash flow provided by operating activities
|
803
|
|
|
1,016
|
|
|
943
|
|
|||
NET CASH FLOW USED FOR INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Cash paid for property, plant and equipment
|
(537
|
)
|
|
(337
|
)
|
|
(373
|
)
|
|||
Derivative settlements
|
64
|
|
|
3
|
|
|
4
|
|
|||
Proceeds from the sale of assets or affiliates
|
27
|
|
|
3
|
|
|
—
|
|
|||
Investment in subsidiaries and affiliates, net of cash acquired
|
(1,143
|
)
|
|
(570
|
)
|
|
(452
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
6
|
|
|||
Net cash flow used for investing activities
|
(1,589
|
)
|
|
(901
|
)
|
|
(815
|
)
|
|||
NET CASH FLOW PROVIDED BY (USED FOR) FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from senior revolving credit and receivables securitization facilities
|
1,954
|
|
|
1,133
|
|
|
669
|
|
|||
Payments on senior revolving credit and receivables securitization facilities
|
(1,879
|
)
|
|
(1,133
|
)
|
|
(669
|
)
|
|||
Proceeds from term loan borrowing
|
600
|
|
|
—
|
|
|
300
|
|
|||
Payments on term loan borrowing
|
(100
|
)
|
|
—
|
|
|
(300
|
)
|
|||
Proceeds from long-term debt
|
389
|
|
|
588
|
|
|
395
|
|
|||
Payments on long-term debt
|
—
|
|
|
(351
|
)
|
|
(163
|
)
|
|||
Dividends paid
|
(92
|
)
|
|
(89
|
)
|
|
(81
|
)
|
|||
Net increase (decrease) in short-term debt
|
16
|
|
|
1
|
|
|
(6
|
)
|
|||
Purchases of treasury stock
|
(236
|
)
|
|
(159
|
)
|
|
(247
|
)
|
|||
Other
|
(5
|
)
|
|
13
|
|
|
14
|
|
|||
Net cash flow provided by (used for) financing activities
|
647
|
|
|
3
|
|
|
(88
|
)
|
|||
Effect of exchange rate changes on cash
|
(29
|
)
|
|
17
|
|
|
(18
|
)
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(168
|
)
|
|
135
|
|
|
22
|
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
253
|
|
|
118
|
|
|
96
|
|
|||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD
|
$
|
85
|
|
|
$
|
253
|
|
|
$
|
118
|
|
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
||||||
Cash paid during the year for income taxes
|
$
|
91
|
|
|
$
|
67
|
|
|
$
|
69
|
|
Cash paid during the year for interest
|
$
|
158
|
|
|
$
|
106
|
|
|
$
|
118
|
|
Standard
|
Description
|
Effective Date for Company
|
Effect on the
Consolidated Financial Statements
|
Recently adopted standards:
|
|
|
|
ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)," as amended by ASU's 2015-14, 2016-08, 2016-10, 2016-11, 2016-12, 2016-20, 2017-05 and 2017-13 and 2017-14
|
This standard outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Entities can adopt this standard either through a retrospective or modified-retrospective approach.
|
January 1, 2018
|
The adoption of this standard did not have a material impact on our Consolidated Financial Statements. Please refer to Note 3 for transition disclosures, as well as other ongoing disclosure requirements.
|
ASU 2016-16 "Income Taxes (Topic 740)"
|
This standard requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs.
|
January 1, 2018
|
The adoption of this standard did not have a material impact on our Consolidated Financial Statements. Please refer to Note 20 of the Consolidated Financial Statements for a detailed explanation of the cumulative effect of adoption recognized on January 1, 2018.
|
ASU 2017-07 "Compensation - Retirement Benefits (Topic 715)"
|
This standard requires that the other components of net benefit cost be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Retrospective application is required upon adoption of the presentation elements of this standard.
|
January 1, 2018
|
The adoption of this standard did not have a material effect on our Consolidated Financial Statements for the year ended December 31, 2018. The standard's retrospective adoption, though, resulted in a full-year $60 million reclassification of non-service costs from various financial statement lines to non-operating expense, primarily related to pension settlement losses that were recorded in 2017. Please refer to Note 14 for additional detail on this adoption.
|
ASU 2017-12 "Derivatives and Hedging (Topic 815)"
|
This standard changes how an entity assesses effectiveness of derivative instruments, potentially resulting in less ineffectiveness and more derivatives qualifying for hedge accounting. Entities may early adopt the standard in any interim period, with the effect of adoption being applied to existing hedging relationships as of the beginning of the fiscal year of adoption.
|
January 1, 2018
|
The early adoption of this standard did not have a material impact on our Consolidated Financial Statements. Please refer to Note 5 of the Consolidated Financial Statements for additional detail on this adoption.
|
Recently issued standards:
|
|
|
|
ASU 2016-02 "Leases (Topic 842)," as amended by ASU 2017-13, 2018-01, 2018-10, and 2018-11
|
The standard requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. The recognition and presentation of expenses will depend on classification as a finance or operating lease. Entities may elect to apply the provisions of the new leasing standard on January 1, 2019, without adjusting the comparative periods presented by recognizing a cumulative-effect adjustment to the opening balance of retained earnings.
|
January 1, 2019
|
The Company will adopt the accounting standard using the optional transition method, allowing us to record the cumulative effect adjustment of adopting the standard in the period of adoption, without restating prior periods presented. We are finalizing our assessment of our lease portfolio, implementation of systems, development of processes and internal controls and our accounting policy elections to comply with the standard's adoption requirements. We anticipate adoption of the standard will add approximately $200 to $250 million in right-of-use assets and lease obligations to our consolidated balance sheet and will not significantly impact results. (Our operating lease obligations are described in Note 9 of the Consolidated Financial Statements.)
|
ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326)"
|
This standard replaces the incurred loss methodology for recognizing credit losses with a current expected credit losses model and applies to all financial assets, including trade receivables. Entities will adopt the standard using a modified-retrospective approach.
|
January 1, 2020
|
We are currently assessing the impact this standard will have on our Consolidated Financial Statements. Our current accounts receivable policy (as described in Note 1 of the Consolidated Financial Statements) uses historical and current information to estimate the amount of probable credit losses in our existing accounts receivable. We have not yet analyzed our current systems and methods to determine the impact of using forward-looking information to estimate expected credit losses.
|
ASU 2018-14 "Compensation- Retirement Benefits- Defined Benefit Plans- General (Subtopic 715-20)
|
This standard modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.
|
January 1, 2020
|
We do not believe the adoption of this guidance will have a material effect on our consolidated financial statements.
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Reportable Segments
|
|
|
|
|
|
||||||
Composites
|
$
|
2,041
|
|
|
$
|
2,068
|
|
|
$
|
1,952
|
|
Insulation
|
2,720
|
|
|
2,001
|
|
|
1,748
|
|
|||
Roofing
|
2,492
|
|
|
2,553
|
|
|
2,194
|
|
|||
Total reportable segments
|
7,253
|
|
|
6,622
|
|
|
5,894
|
|
|||
Corporate eliminations
|
(196
|
)
|
|
(238
|
)
|
|
(217
|
)
|
|||
NET SALES
|
$
|
7,057
|
|
|
$
|
6,384
|
|
|
$
|
5,677
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Reportable Segments
|
|
|
|
|
|
||||||
Composites
|
$
|
251
|
|
|
$
|
291
|
|
|
$
|
264
|
|
Insulation
|
290
|
|
|
177
|
|
126
|
|||||
Roofing
|
434
|
|
|
535
|
|
|
486
|
|
|||
Total reportable segments
|
975
|
|
|
1,003
|
|
|
876
|
|
|||
Restructuring costs
|
(22
|
)
|
|
(48
|
)
|
|
(28
|
)
|
|||
Acquisition-related costs
|
(16
|
)
|
|
(15
|
)
|
|
(9
|
)
|
|||
Recognition of acquisition inventory fair value step-up
|
(2
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|||
Litigation settlement gain, net of legal fees
|
—
|
|
|
29
|
|
|
—
|
|
|||
Pension settlement losses
|
—
|
|
|
(64
|
)
|
|
—
|
|
|||
Environmental liability charges
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||
General corporate expense and other
|
(114
|
)
|
|
(148
|
)
|
|
(130
|
)
|
|||
Total Corporate, other and eliminations
|
$
|
(154
|
)
|
|
$
|
(266
|
)
|
|
$
|
(177
|
)
|
EBIT
|
$
|
821
|
|
|
$
|
737
|
|
|
$
|
699
|
|
|
December 31,
|
||||||
TOTAL ASSETS
|
2018
|
|
2017
|
||||
Reportable Segments
|
|
|
|
||||
Composites
|
$
|
2,480
|
|
|
$
|
2,486
|
|
Insulation
|
4,907
|
|
|
3,618
|
|
||
Roofing
|
1,750
|
|
|
1,621
|
|
||
Total reportable segments
|
9,137
|
|
|
7,725
|
|
||
Cash and cash equivalents
|
78
|
|
|
246
|
|
||
Noncurrent deferred income taxes
|
43
|
|
|
144
|
|
||
Investments in affiliates
|
51
|
|
|
52
|
|
||
Assets held for sale
|
3
|
|
|
12
|
|
||
Corporate property, plant and equipment, other assets and eliminations
|
459
|
|
|
453
|
|
||
CONSOLIDATED TOTAL ASSETS
|
$
|
9,771
|
|
|
$
|
8,632
|
|
|
December 31,
|
||||||
PROPERTY, PLANT AND EQUIPMENT BY GEOGRAPHIC REGION
|
2018
|
|
2017
|
||||
United States
|
$
|
2,166
|
|
|
$
|
2,164
|
|
Europe
|
779
|
|
|
479
|
|
||
Asia Pacific
|
567
|
|
|
459
|
|
||
Canada and other
|
299
|
|
|
323
|
|
||
TOTAL PROPERTY, PLANT AND EQUIPMENT
|
$
|
3,811
|
|
|
$
|
3,425
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Reportable Segments
|
|
|
|
|
|
||||||
Composites
|
$
|
147
|
|
|
$
|
144
|
|
|
$
|
138
|
|
Insulation
|
186
|
|
|
124
|
|
|
106
|
|
|||
Roofing
|
51
|
|
|
50
|
|
|
46
|
|
|||
Total reportable segments
|
384
|
|
|
318
|
|
|
290
|
|
|||
General corporate depreciation and amortization (a)
|
49
|
|
|
53
|
|
|
53
|
|
|||
CONSOLIDATED PROVISION FOR DEPRECIATION AND AMORTIZATION
|
$
|
433
|
|
|
$
|
371
|
|
|
$
|
343
|
|
(a)
|
In
2018
,
2017
and 2016, General corporate depreciation and amortization expense included
$10 million
,
$17 million
and
$19 million
, respectively, of accelerated depreciation related to restructuring actions further explained in Note 12 to the Consolidated Financial Statements.
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Reportable Segments
|
|
|
|
|
|
||||||
Composites (a)
|
$
|
154
|
|
|
$
|
148
|
|
|
$
|
152
|
|
Insulation
|
240
|
|
|
151
|
|
|
154
|
|
|||
Roofing
|
91
|
|
|
66
|
|
|
66
|
|
|||
Total reportable segments
|
485
|
|
|
365
|
|
|
372
|
|
|||
General corporate additions
|
57
|
|
|
37
|
|
|
42
|
|
|||
CONSOLIDATED ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT
|
$
|
542
|
|
|
$
|
402
|
|
|
$
|
414
|
|
(a)
|
The 2018 figure for Composites includes $12 million of capital expenditures related to an acquired non-wovens plant, which was accounted for as an asset acquisition.
|
|
For the twelve months ended December 31, 2018
|
||||||||||||||
Reportable Segments
|
Composites
|
Insulation
|
Roofing
|
Eliminations
|
Consolidated
|
||||||||||
Disaggregation Categories
|
|
|
|
|
|
||||||||||
U.S. residential
|
$
|
263
|
|
$
|
990
|
|
$
|
2,199
|
|
$
|
(177
|
)
|
$
|
3,275
|
|
U.S. commercial and industrial
|
598
|
|
625
|
|
161
|
|
(12
|
)
|
1,372
|
|
|||||
Europe
|
590
|
|
605
|
|
14
|
|
—
|
|
1,209
|
|
|||||
Asia-Pacific
|
464
|
|
178
|
|
15
|
|
(1
|
)
|
656
|
|
|||||
Rest of world
|
126
|
|
322
|
|
103
|
|
(6
|
)
|
545
|
|
|||||
NET SALES
|
$
|
2,041
|
|
$
|
2,720
|
|
$
|
2,492
|
|
$
|
(196
|
)
|
$
|
7,057
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Finished goods
|
$
|
730
|
|
|
$
|
562
|
|
Materials and supplies
|
342
|
|
|
279
|
|
||
Total inventories
|
$
|
1,072
|
|
|
$
|
841
|
|
|
|
|
Fair Value at
|
||||||
|
Location
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Derivative assets designated as hedging instruments:
|
|
|
|
|
|
||||
Net investment hedges:
|
|
|
|
|
|
||||
Cross currency swaps
|
Other current assets
|
|
$
|
9
|
|
|
$
|
7
|
|
Cash flow hedges:
|
|
|
|
|
|
||||
Natural gas forward swaps
|
Other current assets
|
|
$
|
—
|
|
|
$
|
1
|
|
Derivative liabilities designated as hedging instruments:
|
|
|
|
|
|
||||
Net investment hedges:
|
|
|
|
|
|
||||
Cross-currency swaps
|
Other liabilities
|
|
$
|
17
|
|
|
$
|
38
|
|
Cash flow hedges:
|
|
|
|
|
|
||||
Natural gas forward swaps
|
Accounts payable and
accrued liabilities
|
|
$
|
1
|
|
|
$
|
1
|
|
Derivative assets not designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Other current assets
|
|
$
|
1
|
|
|
$
|
1
|
|
Derivative liabilities not designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
Accounts payable and
accrued liabilities
|
|
$
|
8
|
|
|
$
|
1
|
|
|
|
Twelve Months Ended
December 31, |
||||||||
|
Location
|
2018
|
2017
|
2016
|
||||||
Derivative activity designated as hedging instruments:
|
|
|
|
|
||||||
Natural gas cash flow hedges:
|
|
|
|
|
||||||
Amount of (gain)/loss reclassified from AOCI into earnings
|
Cost of sales
|
$
|
(2
|
)
|
$
|
(1
|
)
|
$
|
6
|
|
Amount of loss recognized in earnings (ineffective portion)
|
Other expenses, net
|
$
|
—
|
|
$
|
2
|
|
$
|
—
|
|
Cross-currency swap net investment hedges:
|
|
|
|
|
||||||
Amount of gain recognized in earnings on derivative amounts excluded from effectiveness testing
|
Interest expense, net
|
$
|
(12
|
)
|
$
|
—
|
|
$
|
—
|
|
Derivative activity not designated as hedging instruments:
|
|
|
|
|
||||||
Natural gas:
|
|
|
|
|
||||||
Amount of gain recognized in earnings
|
Other expenses, net
|
$
|
—
|
|
$
|
—
|
|
$
|
(2
|
)
|
Foreign currency:
|
|
|
|
|
||||||
Amount of (gain)/loss recognized in earnings (a)
|
Other expenses, net
|
$
|
(55
|
)
|
$
|
5
|
|
$
|
3
|
|
(a)
|
(Gains)/losses 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 expenses, net. Please refer to the "Other Derivatives" section below for additional detail.
|
|
|
Amount of (Gain) Loss Recognized in Comprehensive Earnings
|
|||||
|
|
Twelve Months Ended December 31,
|
|||||
Hedging Type
|
Derivative Financial Instrument
|
2018
|
2017
|
||||
Net investment hedge
|
Cross-currency swaps
|
$
|
(18
|
)
|
$
|
38
|
|
Cash flow hedge
|
Natural gas forward swaps
|
$
|
—
|
|
$
|
4
|
|
December 31, 2018
|
Weighted
Average
Useful
Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
20 years
|
|
$
|
554
|
|
|
$
|
(138
|
)
|
|
$
|
416
|
|
Technology
|
17 years
|
|
321
|
|
|
(134
|
)
|
|
187
|
|
|||
Other
|
14 years
|
|
60
|
|
|
(28
|
)
|
|
32
|
|
|||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks
|
|
|
1,144
|
|
|
—
|
|
|
1,144
|
|
|||
Total intangible assets
|
|
|
$
|
2,079
|
|
|
$
|
(300
|
)
|
|
$
|
1,779
|
|
Goodwill
|
|
|
$
|
1,949
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||
December 31, 2017
|
Weighted
Average
Useful
Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||
Customer relationships
|
20 years
|
|
$
|
363
|
|
|
$
|
(109
|
)
|
|
$
|
254
|
|
Technology
|
18 years
|
|
255
|
|
|
(116
|
)
|
|
139
|
|
|||
Other
|
8 years
|
|
47
|
|
|
(26
|
)
|
|
21
|
|
|||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks
|
|
|
946
|
|
|
—
|
|
|
946
|
|
|||
Total intangible assets
|
|
|
$
|
1,611
|
|
|
$
|
(251
|
)
|
|
$
|
1,360
|
|
Goodwill
|
|
|
$
|
1,507
|
|
|
|
|
|
|
Composites
|
|
Insulation
|
|
Roofing
|
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
58
|
|
|
1,049
|
|
|
$
|
400
|
|
|
$
|
1,507
|
|
|
Acquisitions (see Note 8)
|
—
|
|
|
494
|
|
|
—
|
|
|
494
|
|
||||
Foreign currency translation
|
(1
|
)
|
|
(48
|
)
|
|
(3
|
)
|
|
(52
|
)
|
||||
Balance at December 31, 2018
|
$
|
57
|
|
|
$
|
1,495
|
|
|
$
|
397
|
|
|
$
|
1,949
|
|
|
Customer Relationships
|
|
Technology
|
|
Trademarks
|
|
Other
|
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
363
|
|
|
$
|
255
|
|
|
$
|
946
|
|
|
$
|
47
|
|
|
$
|
1,611
|
|
Acquisitions (see Note 8)
|
215
|
|
|
73
|
|
|
213
|
|
|
7
|
|
|
508
|
|
|||||
Other additions, net
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|||||
Foreign currency translation
|
(24
|
)
|
|
(7
|
)
|
|
(15
|
)
|
|
(2
|
)
|
|
(48
|
)
|
|||||
Balance at December 31, 2018
|
$
|
554
|
|
|
$
|
321
|
|
|
$
|
1,144
|
|
|
$
|
60
|
|
|
$
|
2,079
|
|
Period
|
Amortization (a)
|
||
2019
|
$
|
51
|
|
2020
|
$
|
51
|
|
2021
|
$
|
50
|
|
2022
|
$
|
46
|
|
2023
|
$
|
42
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Land
|
$
|
224
|
|
|
$
|
251
|
|
Buildings and leasehold improvements
|
1,091
|
|
|
944
|
|
||
Machinery and equipment
|
4,628
|
|
|
4,211
|
|
||
Construction in progress
|
443
|
|
|
350
|
|
||
|
6,386
|
|
|
5,756
|
|
||
Accumulated depreciation
|
(2,575
|
)
|
|
(2,331
|
)
|
||
Property, plant and equipment, net
|
$
|
3,811
|
|
|
$
|
3,425
|
|
Type of Intangible Asset
|
Fair Value
|
Weighted Average Useful Life
|
||
Customer relationships
|
$
|
215
|
|
20
|
Technology - Know-how
|
61
|
|
15
|
|
Technology - Patented
|
12
|
|
5
|
|
Quarry Rights
|
7
|
|
45
|
|
Trademarks
|
213
|
|
Indefinite
|
|
Total
|
$
|
508
|
|
|
Type of Intangible Asset
|
Fair Value
|
Weighted Average Useful Life
|
||
Customer relationships
|
$
|
107
|
|
19
|
Technology
|
37
|
|
15
|
|
Trademarks
|
101
|
|
indefinite
|
|
Total
|
$
|
245
|
|
|
Period
|
Minimum
Future Rental
Commitments
|
||
2019
|
$
|
83
|
|
2020
|
$
|
64
|
|
2021
|
$
|
47
|
|
2022
|
$
|
31
|
|
2023
|
$
|
18
|
|
2024 and beyond
|
$
|
27
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Accounts payable
|
$
|
851
|
|
|
$
|
834
|
|
Payroll, vacation pay and incentive compensation
|
157
|
|
|
198
|
|
||
Payroll, property and other taxes
|
43
|
|
|
71
|
|
||
Other
|
227
|
|
|
179
|
|
||
Total
|
$
|
1,278
|
|
|
$
|
1,282
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Beginning balance
|
$
|
55
|
|
|
$
|
52
|
|
Amounts accrued for current year
|
20
|
|
|
18
|
|
||
Settlements of warranty claims
|
(15
|
)
|
|
(15
|
)
|
||
Ending balance
|
$
|
60
|
|
|
$
|
55
|
|
Location
|
Paroc Acquistion
|
Pittsburgh Corning Acquisition
|
Total
|
||||||
Marketing and administrative expenses
|
$
|
5
|
|
$
|
2
|
|
$
|
7
|
|
Other expenses, net
|
9
|
|
—
|
|
9
|
|
|||
Total acquisition-related costs
|
$
|
14
|
|
$
|
2
|
|
$
|
16
|
|
|
|
Twelve Months Ended December 31,
|
||||||||
Type of Cost
|
Location
|
2018
|
2017
|
2016
|
||||||
Accelerated depreciation
|
Cost of sales
|
$
|
10
|
|
$
|
17
|
|
$
|
19
|
|
Other exit costs
|
Cost of sales
|
7
|
|
3
|
|
6
|
|
|||
Severance
|
Other expenses, net
|
4
|
|
27
|
|
1
|
|
|||
Other exit costs
|
Other expenses, net
|
1
|
|
1
|
|
2
|
|
|||
Total restructuring costs
|
|
$
|
22
|
|
$
|
48
|
|
$
|
28
|
|
|
2017 Cost Reduction Actions
|
Pittsburgh Corning Acquisition-Related Restructuring
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
11
|
|
$
|
9
|
|
$
|
20
|
|
Restructuring costs
|
19
|
|
3
|
|
22
|
|
|||
Payments
|
(14
|
)
|
(4
|
)
|
(18
|
)
|
|||
Non-cash items and reclassifications to other accounts
|
(6
|
)
|
(1
|
)
|
(7
|
)
|
|||
Balance at December 31, 2018
|
$
|
10
|
|
$
|
7
|
|
$
|
17
|
|
Cumulative charges incurred
|
$
|
48
|
|
$
|
20
|
|
$
|
68
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
|
Carrying Value
|
Fair Value
|
|
Carrying Value
|
Fair Value
|
||||||
4.20% senior notes, net of discount and financing fees, due 2022
|
$
|
598
|
|
99
|
%
|
|
$
|
597
|
|
105
|
%
|
4.20% senior notes, net of discount and financing fees, due 2024
|
393
|
|
99
|
%
|
|
392
|
|
105
|
%
|
||
3.40% senior notes, net of discount and financing fees, due 2026
|
396
|
|
90
|
%
|
|
395
|
|
98
|
%
|
||
7.00% senior notes, net of discount and financing fees, due 2036
|
400
|
|
112
|
%
|
|
400
|
|
132
|
%
|
||
4.30% senior notes, net of discount and financing fees, due 2047
|
588
|
|
76
|
%
|
|
588
|
|
99
|
%
|
||
4.40% senior notes, net of discount and financing fees, due 2048
|
389
|
|
77
|
%
|
|
—
|
|
n/a
|
|
||
Accounts receivable securitization facility, maturing in 2020 (a)
|
75
|
|
100
|
%
|
|
—
|
|
n/a
|
|
||
Various capital leases, due through and beyond 2050 (a)
|
27
|
|
100
|
%
|
|
31
|
|
100
|
%
|
||
Term loan borrowing, maturing in 2021 (a)
|
500
|
|
100
|
%
|
|
—
|
|
n/a
|
|
||
Unamortized interest rate swap basis adjustment
|
5
|
|
n/a
|
|
|
6
|
|
n/a
|
|
||
Total long-term debt
|
3,371
|
|
n/a
|
|
|
2,409
|
|
n/a
|
|
||
Less – current portion (a)
|
9
|
|
100
|
%
|
|
4
|
|
100
|
%
|
||
Long-term debt, net of current portion
|
$
|
3,362
|
|
n/a
|
|
|
$
|
2,405
|
|
n/a
|
|
|
As of December 31, 2018
|
|||||
|
Senior Revolving Credit Facility
|
Receivables Securitization Facility
|
||||
Facility size
|
$
|
800
|
|
$
|
280
|
|
Collateral capacity limitation on availability
|
n/a
|
|
—
|
|
||
Outstanding borrowings
|
—
|
|
75
|
|
||
Outstanding letters of credit
|
9
|
|
3
|
|
||
Availability on facility
|
$
|
791
|
|
$
|
202
|
|
Period
|
Maturities
|
||
2019
|
$
|
11
|
|
2020
|
142
|
|
|
2021
|
441
|
|
|
2022
|
605
|
|
|
2023
|
4
|
|
|
2024 and beyond
|
2,217
|
|
|
Total
|
$
|
3,420
|
|
|
Twelve Months Ended December 31, 2017
|
||||||||
Location
|
Before Adoption
|
Adoption Impact
|
After Adoption
|
||||||
Cost of sales
|
$
|
4,812
|
|
$
|
3
|
|
$
|
4,815
|
|
Other expenses, net
|
$
|
130
|
|
$
|
(63
|
)
|
$
|
67
|
|
Non-operating (income) expense
|
$
|
—
|
|
$
|
60
|
|
$
|
60
|
|
|
Twelve Months Ended December 31, 2016
|
||||||||
Location
|
Before Adoption
|
Adoption Impact
|
After Adoption
|
||||||
Cost of sales
|
$
|
4,296
|
|
$
|
4
|
|
$
|
4,300
|
|
Other expenses, net
|
$
|
16
|
|
$
|
(2
|
)
|
$
|
14
|
|
Non-operating (income) expense
|
$
|
—
|
|
$
|
(2
|
)
|
$
|
(2
|
)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
Total
|
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||||||||
Change in Projected Benefit Obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation at beginning of period
|
$
|
993
|
|
|
$
|
457
|
|
|
$
|
1,450
|
|
|
$
|
1,066
|
|
|
$
|
512
|
|
|
$
|
1,578
|
|
Service cost
|
6
|
|
|
6
|
|
|
12
|
|
|
7
|
|
|
5
|
|
|
12
|
|
||||||
Interest cost
|
34
|
|
|
13
|
|
|
47
|
|
|
40
|
|
|
15
|
|
|
55
|
|
||||||
Actuarial loss (gain)
|
(67
|
)
|
|
(18
|
)
|
|
(85
|
)
|
|
30
|
|
|
(16
|
)
|
|
14
|
|
||||||
Currency loss (gain)
|
—
|
|
|
(26
|
)
|
|
(26
|
)
|
|
—
|
|
|
42
|
|
|
42
|
|
||||||
Benefits paid
|
(75
|
)
|
|
(17
|
)
|
|
(92
|
)
|
|
(53
|
)
|
|
(18
|
)
|
|
(71
|
)
|
||||||
Settlements/curtailments
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|
(97
|
)
|
|
(116
|
)
|
|
(213
|
)
|
||||||
Acquisition
|
—
|
|
|
11
|
|
|
11
|
|
|
—
|
|
|
21
|
|
|
21
|
|
||||||
Other
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||||
Benefit obligation at end of period
|
$
|
891
|
|
|
$
|
427
|
|
|
$
|
1,318
|
|
|
$
|
993
|
|
|
$
|
457
|
|
|
$
|
1,450
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
Total
|
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||||||||
Change in Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of assets at beginning of period
|
$
|
836
|
|
|
$
|
364
|
|
|
$
|
1,200
|
|
|
$
|
822
|
|
|
$
|
393
|
|
|
$
|
1,215
|
|
Actual return on plan assets
|
(59
|
)
|
|
(8
|
)
|
|
(67
|
)
|
|
114
|
|
|
26
|
|
|
140
|
|
||||||
Currency gain (loss)
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|
—
|
|
|
31
|
|
|
31
|
|
||||||
Company contributions
|
25
|
|
|
15
|
|
|
40
|
|
|
50
|
|
|
22
|
|
|
72
|
|
||||||
Benefits paid
|
(75
|
)
|
|
(17
|
)
|
|
(92
|
)
|
|
(53
|
)
|
|
(18
|
)
|
|
(71
|
)
|
||||||
Settlements/curtailments
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
|
(97
|
)
|
|
(116
|
)
|
|
(213
|
)
|
||||||
Acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||||
Fair value of assets at end of period
|
$
|
727
|
|
|
$
|
328
|
|
|
$
|
1,055
|
|
|
$
|
836
|
|
|
$
|
364
|
|
|
$
|
1,200
|
|
Funded status
|
$
|
(164
|
)
|
|
$
|
(99
|
)
|
|
$
|
(263
|
)
|
|
$
|
(157
|
)
|
|
$
|
(93
|
)
|
|
$
|
(250
|
)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
Total
|
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||||||||
Amounts Recognized in the Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prepaid pension cost
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Accrued pension cost – current
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Accrued pension cost – non-current
|
(164
|
)
|
|
(104
|
)
|
|
(268
|
)
|
|
(157
|
)
|
|
(99
|
)
|
|
(256
|
)
|
||||||
Net amount recognized
|
$
|
(164
|
)
|
|
$
|
(99
|
)
|
|
$
|
(263
|
)
|
|
$
|
(157
|
)
|
|
$
|
(93
|
)
|
|
$
|
(250
|
)
|
Amounts Recorded in AOCI
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss
|
$
|
(392
|
)
|
|
$
|
(92
|
)
|
|
$
|
(484
|
)
|
|
$
|
(357
|
)
|
|
$
|
(86
|
)
|
|
$
|
(443
|
)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
Total
|
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||||||||
Plans with ABO in excess of fair value of plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Projected benefit obligation
|
$
|
891
|
|
|
$
|
269
|
|
|
$
|
1,160
|
|
|
$
|
993
|
|
|
$
|
288
|
|
|
$
|
1,281
|
|
Accumulated benefit obligation
|
$
|
891
|
|
|
$
|
265
|
|
|
$
|
1,156
|
|
|
$
|
993
|
|
|
$
|
284
|
|
|
$
|
1,277
|
|
Fair value of plan assets
|
$
|
727
|
|
|
$
|
169
|
|
|
$
|
896
|
|
|
$
|
836
|
|
|
$
|
193
|
|
|
$
|
1,029
|
|
Plans with fair value of assets in excess of ABO:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Projected benefit obligation
|
$
|
—
|
|
|
$
|
158
|
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
169
|
|
|
$
|
169
|
|
Accumulated benefit obligation
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
140
|
|
|
$
|
—
|
|
|
$
|
145
|
|
|
$
|
145
|
|
Fair value of plan assets
|
$
|
—
|
|
|
$
|
159
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
$
|
171
|
|
|
$
|
171
|
|
Summary of all plans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total projected benefit obligation
|
$
|
891
|
|
|
$
|
427
|
|
|
$
|
1,318
|
|
|
$
|
993
|
|
|
$
|
457
|
|
|
$
|
1,450
|
|
Total accumulated benefit obligation
|
$
|
891
|
|
|
$
|
405
|
|
|
$
|
1,296
|
|
|
$
|
993
|
|
|
$
|
429
|
|
|
$
|
1,422
|
|
Total fair value of plan assets
|
$
|
727
|
|
|
$
|
328
|
|
|
$
|
1,055
|
|
|
$
|
836
|
|
|
$
|
364
|
|
|
$
|
1,200
|
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||
United States Plans
|
|
|
|
||
Discount rate
|
4.25
|
%
|
|
3.55
|
%
|
Expected return on plan assets
|
6.75
|
%
|
|
6.75
|
%
|
Non-United States Plans
|
|
|
|
||
Discount rate
|
3.04
|
%
|
|
2.88
|
%
|
Expected return on plan assets
|
4.91
|
%
|
|
5.22
|
%
|
Rate of compensation increase
|
4.14
|
%
|
|
4.29
|
%
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
10
|
|
Interest cost
|
47
|
|
|
55
|
|
|
62
|
|
|||
Expected return on plan assets
|
(73
|
)
|
|
(79
|
)
|
|
(81
|
)
|
|||
Amortization of actuarial loss
|
15
|
|
|
18
|
|
|
16
|
|
|||
Settlement/curtailment
|
—
|
|
|
64
|
|
|
(6
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
2
|
|
|||
Net periodic benefit cost
|
$
|
1
|
|
|
$
|
70
|
|
|
$
|
3
|
|
|
Twelve Months Ended December 31,
|
|||||||||||||
|
2018
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|||
United States Plans
|
|
|
|
|
|
|
|
|
|
|
|
|||
Discount rate
|
3.55
|
%
|
|
|
|
3.95
|
%
|
|
|
|
4.20
|
%
|
|
|
Expected return on plan assets
|
6.75
|
%
|
|
|
|
6.75
|
%
|
|
|
|
7.00
|
%
|
|
|
Rate of compensation increase
|
N/A
|
|
|
(a)
|
|
N/A
|
|
|
(a)
|
|
N/A
|
|
|
(a)
|
Non-United States Plans
|
|
|
|
|
|
|
|
|
|
|
|
|||
Discount rate
|
2.88
|
%
|
|
|
|
3.14
|
%
|
|
|
|
3.88
|
%
|
|
|
Expected return on plan assets
|
5.22
|
%
|
|
|
|
5.92
|
%
|
|
|
|
6.23
|
%
|
|
|
Rate of compensation increase
|
4.29
|
%
|
|
|
|
4.25
|
%
|
|
|
|
3.97
|
%
|
|
|
(a)
|
Not applicable due to changes in plan made on August 1, 2009 that were effective beginning January 1, 2010.
|
|
December 31, 2018
|
||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equities
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50
|
|
International
|
52
|
|
|
—
|
|
|
—
|
|
|
52
|
|
||||
Fixed income and cash equivalents
|
|
|
|
|
|
|
|
|
|||||||
Corporate bonds
|
—
|
|
|
236
|
|
|
—
|
|
|
236
|
|
||||
Government debt
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
||||
Real estate investment trusts
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||
Total United States plan assets subject to leveling
|
$
|
126
|
|
|
$
|
327
|
|
|
$
|
—
|
|
|
453
|
|
|
|
|
|
|
|
|
|
|
||||||||
Plan assets measured at NAV
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
|
|
|
|
|
123
|
|
|||||||
Real assets
|
|
|
|
|
|
|
54
|
|
|||||||
Fixed income and cash equivalents
|
|
|
|
|
|
|
53
|
|
|||||||
Absolute return strategies
|
|
|
|
|
|
|
44
|
|
|||||||
Total United States plan assets
|
|
|
|
|
|
|
$
|
727
|
|
|
December 31, 2017
|
||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equities
|
|
|
|
|
|
|
|
||||||||
Domestic
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67
|
|
International
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
||||
Fixed income and cash equivalents
|
|
|
|
|
|
|
|
|
|||||||
Corporate bonds
|
—
|
|
|
231
|
|
|
—
|
|
|
231
|
|
||||
Government debt
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
||||
Real estate investment trusts
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Total United States plan assets subject to leveling
|
$
|
171
|
|
|
$
|
319
|
|
|
$
|
—
|
|
|
490
|
|
|
|
|
|
|
|
|
|
|
||||||||
Plan assets measured at NAV
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
|
|
|
|
|
173
|
|
|||||||
Real assets
|
|
|
|
|
|
|
51
|
|
|||||||
Fixed income and cash equivalents
|
|
|
|
|
|
|
69
|
|
|||||||
Absolute return strategies
|
|
|
|
|
|
|
53
|
|
|||||||
Total United States plan assets
|
|
|
|
|
|
|
$
|
836
|
|
|
December 31, 2018
|
||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equities
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
Fixed income and cash equivalents
|
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
||||
Corporate bonds
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Total non-United States plan assets subject to leveling
|
$
|
—
|
|
|
$
|
78
|
|
|
$
|
—
|
|
|
78
|
|
|
|
|
|
|
|
|
|
|
||||||||
Plan assets measured at NAV
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
|
|
|
|
|
41
|
|
|||||||
Fixed income and cash equivalents
|
|
|
|
|
|
|
109
|
|
|||||||
Absolute return strategies
|
|
|
|
|
|
|
100
|
|
|||||||
Total non-United States plan assets
|
|
|
|
|
|
|
$
|
328
|
|
|
December 31, 2017
|
||||||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Equities
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Fixed income and cash equivalents
|
|
|
|
|
|
|
|
|
|||||||
Cash and cash equivalents
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
||||
Corporate bonds
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Total non-United States plan assets subject to leveling
|
$
|
—
|
|
|
$
|
79
|
|
|
$
|
—
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
||||||||
Plan assets measured at NAV
|
|
|
|
|
|
|
|
||||||||
Equities
|
|
|
|
|
|
|
52
|
|
|||||||
Fixed income and cash equivalents
|
|
|
|
|
|
|
123
|
|
|||||||
Absolute return strategies
|
|
|
|
|
|
|
110
|
|
|||||||
Total non-United States plan assets
|
|
|
|
|
|
|
$
|
364
|
|
Year
|
|
Estimated
Benefit
Payments
|
||
2019
|
|
$
|
87
|
|
2020
|
|
$
|
85
|
|
2021
|
|
$
|
83
|
|
2022
|
|
$
|
85
|
|
2023
|
|
$
|
83
|
|
2024-2028
|
|
$
|
398
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
Total
|
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||||||||
Change in Projected Benefit Obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation at beginning of period
|
$
|
216
|
|
|
$
|
14
|
|
|
$
|
230
|
|
|
$
|
212
|
|
|
$
|
13
|
|
|
$
|
225
|
|
Service cost
|
1
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Interest cost
|
8
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
1
|
|
|
9
|
|
||||||
Actuarial gain
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|
(13
|
)
|
|
(2
|
)
|
|
(15
|
)
|
||||||
Currency loss
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Plan amendments
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Benefits paid
|
(15
|
)
|
|
(1
|
)
|
|
(16
|
)
|
|
(12
|
)
|
|
(1
|
)
|
|
(13
|
)
|
||||||
Acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Benefit obligation at end of period
|
$
|
183
|
|
|
$
|
12
|
|
|
$
|
195
|
|
|
$
|
216
|
|
|
$
|
14
|
|
|
$
|
230
|
|
Funded status
|
$
|
(183
|
)
|
|
$
|
(12
|
)
|
|
$
|
(195
|
)
|
|
$
|
(216
|
)
|
|
$
|
(14
|
)
|
|
$
|
(230
|
)
|
Amounts Recognized in the Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accrued benefit obligation – current
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
(18
|
)
|
|
$
|
(1
|
)
|
|
$
|
(19
|
)
|
Accrued benefit obligation – non-current
|
(166
|
)
|
|
(12
|
)
|
|
(178
|
)
|
|
(198
|
)
|
|
(13
|
)
|
|
$
|
(211
|
)
|
|||||
Net amount recognized
|
$
|
(183
|
)
|
|
$
|
(12
|
)
|
|
$
|
(195
|
)
|
|
$
|
(216
|
)
|
|
$
|
(14
|
)
|
|
$
|
(230
|
)
|
Amounts Recorded in AOCI
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss (gain)
|
$
|
(49
|
)
|
|
$
|
(5
|
)
|
|
$
|
(54
|
)
|
|
$
|
(29
|
)
|
|
$
|
(6
|
)
|
|
$
|
(35
|
)
|
Net prior service cost (credit)
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
(12
|
)
|
|
1
|
|
|
(11
|
)
|
||||||
Net amount recognized
|
$
|
(58
|
)
|
|
$
|
(5
|
)
|
|
$
|
(63
|
)
|
|
$
|
(41
|
)
|
|
$
|
(5
|
)
|
|
$
|
(46
|
)
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||
United States plans
|
4.15
|
%
|
|
3.45
|
%
|
Non-United States plans
|
4.59
|
%
|
|
4.56
|
%
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
8
|
|
|
9
|
|
|
9
|
|
|||
Amortization of prior service cost
|
(4
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|||
Amortization of actuarial gain
|
(6
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|||
Other
|
—
|
|
|
—
|
|
|
1
|
|
|||
Net periodic postretirement benefit cost
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
7
|
|
|
Twelve Months Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
United States plans
|
3.45
|
%
|
|
3.80
|
%
|
|
4.00
|
%
|
Non-United States plans
|
4.56
|
%
|
|
6.78
|
%
|
|
3.80
|
%
|
|
Twelve Months Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
United States plans
|
|
|
|
|
|
|||
Initial rate at end of year
|
6.75
|
%
|
|
6.56
|
%
|
|
6.78
|
%
|
Ultimate rate
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year in which ultimate rate is reached
|
2026
|
|
|
2025
|
|
|
2025
|
|
Non-United States plans
|
|
|
|
|
|
|||
Initial rate at end of year
|
5.40
|
%
|
|
5.73
|
%
|
|
5.07
|
%
|
Ultimate rate
|
5.40
|
%
|
|
5.49
|
%
|
|
4.70
|
%
|
Year in which ultimate rate is reached
|
2019
|
|
|
2019
|
|
|
2019
|
|
|
1-Percentage Point
|
||||||
|
Increase
|
|
Decrease
|
||||
Increase (decrease) in total service cost and interest cost components of net periodic postretirement benefit cost
|
$
|
—
|
|
|
$
|
—
|
|
Increase (decrease) of accumulated postretirement benefit obligation
|
$
|
4
|
|
|
$
|
(3
|
)
|
Year
|
Estimated
Benefit
Payments
|
||
2019
|
$
|
18
|
|
2020
|
$
|
18
|
|
2021
|
$
|
17
|
|
2022
|
$
|
17
|
|
2023
|
$
|
16
|
|
2024-2028
|
$
|
70
|
|
|
Twelve Months Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Number of
Options
|
|
Weighted-
Average
Exercise Price
|
|
Number of
Options
|
|
Weighted-
Average
Exercise Price
|
|
Number of
Options
|
|
Weighted-
Average
Exercise Price
|
|||||||||
Beginning Balance
|
518,725
|
|
|
$
|
37.17
|
|
|
975,400
|
|
|
$
|
35.14
|
|
|
1,953,320
|
|
|
$
|
31.09
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
(39,100
|
)
|
|
37.05
|
|
|
(453,425
|
)
|
|
32.79
|
|
|
(960,570
|
)
|
|
26.90
|
|
|||
Forfeited
|
(750
|
)
|
|
37.65
|
|
|
(3,250
|
)
|
|
37.65
|
|
|
(11,350
|
)
|
|
38.50
|
|
|||
Expired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,000
|
)
|
|
30.00
|
|
|||
Ending Balance
|
478,875
|
|
|
$
|
37.18
|
|
|
518,725
|
|
|
$
|
37.17
|
|
|
975,400
|
|
|
$
|
35.14
|
|
|
Twelve Months Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Number of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||||
Beginning Balance
|
1,752,136
|
|
|
$
|
42.40
|
|
|
1,800,557
|
|
|
$
|
37.78
|
|
|
1,707,490
|
|
|
$
|
35.37
|
|
Granted
|
365,363
|
|
|
84.34
|
|
|
496,021
|
|
|
56.60
|
|
|
544,627
|
|
|
45.61
|
|
|||
Vested
|
(558,288
|
)
|
|
41.34
|
|
|
(477,857
|
)
|
|
38.94
|
|
|
(398,751
|
)
|
|
37.55
|
|
|||
Forfeited
|
(79,837
|
)
|
|
54.20
|
|
|
(66,585
|
)
|
|
44.90
|
|
|
(52,809
|
)
|
|
39.80
|
|
|||
Ending Balance
|
1,479,374
|
|
|
$
|
52.30
|
|
|
1,752,136
|
|
|
$
|
42.40
|
|
|
1,800,557
|
|
|
$
|
37.78
|
|
|
Twelve Months Ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Number of
PSUs
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Number of
PSUs
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Number of
PSUs
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||||
Beginning Balance
|
451,148
|
|
|
$
|
53.96
|
|
|
472,300
|
|
|
$
|
47.19
|
|
|
431,400
|
|
|
$
|
44.52
|
|
Granted
|
171,725
|
|
|
94.14
|
|
|
221,050
|
|
|
59.71
|
|
|
244,250
|
|
|
48.74
|
|
|||
Vested
|
(212,852
|
)
|
|
48.73
|
|
|
(219,050
|
)
|
|
43.83
|
|
|
(186,750
|
)
|
|
44.43
|
|
|||
Forfeited/canceled
|
(49,044
|
)
|
|
60.31
|
|
|
(23,152
|
)
|
|
49.50
|
|
|
(16,600
|
)
|
|
44.48
|
|
|||
Ending Balance
|
360,977
|
|
|
$
|
75.23
|
|
|
451,148
|
|
|
$
|
53.96
|
|
|
472,300
|
|
|
$
|
47.19
|
|
|
Twelve Months Ended December 31,
|
|||||
|
2018
|
2017
|
||||
Currency Translation Adjustment
|
|
|
||||
Beginning balance
|
$
|
(183
|
)
|
$
|
(284
|
)
|
Net investment hedge amounts classified into AOCI, net of tax
|
14
|
|
(24
|
)
|
||
(Loss) Gain on foreign currency translation
|
(137
|
)
|
125
|
|
||
Other comprehensive (loss)/income, net of tax
|
(123
|
)
|
101
|
|
||
Ending balance
|
$
|
(306
|
)
|
$
|
(183
|
)
|
Pension and Other Postretirement Adjustment
|
|
|
||||
Beginning balance
|
$
|
(331
|
)
|
$
|
(429
|
)
|
Amounts reclassified from AOCI to net earnings, net of tax (a)
|
4
|
|
53
|
|
||
Amounts classified into AOCI, net of tax
|
(23
|
)
|
45
|
|
||
Other comprehensive (loss)/income, net of tax
|
(19
|
)
|
98
|
|
||
Ending balance
|
$
|
(350
|
)
|
$
|
(331
|
)
|
Hedging Adjustment
|
|
|
||||
Beginning balance
|
$
|
—
|
|
$
|
3
|
|
Amounts reclassified from AOCI to net earnings, net of tax (b)
|
(1
|
)
|
(1
|
)
|
||
Amounts classified into AOCI, net of tax
|
1
|
|
(2
|
)
|
||
Other comprehensive (loss), net of tax
|
—
|
|
(3
|
)
|
||
Ending balance
|
$
|
—
|
|
$
|
—
|
|
Total AOCI ending balance
|
$
|
(656
|
)
|
$
|
(514
|
)
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net earnings attributable to Owens Corning
|
$
|
545
|
|
|
$
|
289
|
|
|
$
|
393
|
|
Weighted-average number of shares outstanding used for basic earnings per share
|
110.4
|
|
|
111.5
|
|
|
114.4
|
|
|||
Non-vested restricted and performance shares
|
0.8
|
|
|
1.5
|
|
|
0.8
|
|
|||
Options to purchase common stock
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|||
Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share
|
111.4
|
|
|
113.2
|
|
|
115.4
|
|
|||
Earnings per common share attributable to Owens Corning common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.94
|
|
|
$
|
2.59
|
|
|
$
|
3.44
|
|
Diluted
|
$
|
4.89
|
|
|
$
|
2.55
|
|
|
$
|
3.41
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings before taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
411
|
|
|
$
|
342
|
|
|
$
|
281
|
|
Foreign
|
293
|
|
|
217
|
|
|
309
|
|
|||
Total
|
$
|
704
|
|
|
$
|
559
|
|
|
$
|
590
|
|
Income tax expense:
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
||||||
United States
|
$
|
(10
|
)
|
|
$
|
(2
|
)
|
|
$
|
(7
|
)
|
State and local
|
6
|
|
|
5
|
|
|
4
|
|
|||
Foreign
|
19
|
|
|
83
|
|
|
55
|
|
|||
Total current
|
15
|
|
|
86
|
|
|
52
|
|
|||
Deferred
|
|
|
|
|
|
||||||
United States
|
114
|
|
|
196
|
|
|
117
|
|
|||
State and local
|
12
|
|
|
3
|
|
|
8
|
|
|||
Foreign
|
15
|
|
|
(16
|
)
|
|
11
|
|
|||
Total deferred
|
141
|
|
|
183
|
|
|
136
|
|
|||
Total income tax expense
|
$
|
156
|
|
|
$
|
269
|
|
|
$
|
188
|
|
|
Twelve Months Ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
United States federal statutory rate
|
21
|
%
|
|
35
|
%
|
|
35
|
%
|
State and local income taxes, net of federal tax benefit
|
2
|
|
|
2
|
|
|
2
|
|
Foreign tax rate differential
|
—
|
|
|
(5
|
)
|
|
(4
|
)
|
U.S. tax expense on foreign earnings
|
2
|
|
|
49
|
|
|
2
|
|
Legislative tax rate changes
|
—
|
|
|
(9
|
)
|
|
1
|
|
Foreign tax credits
|
—
|
|
|
(29
|
)
|
|
—
|
|
Valuation allowance
|
2
|
|
|
3
|
|
|
(3
|
)
|
Uncertain tax positions and settlements
|
(5
|
)
|
|
1
|
|
|
1
|
|
Excess tax benefits related to stock compensation
|
(2
|
)
|
|
(1
|
)
|
|
(1
|
)
|
Other, net
|
2
|
|
|
2
|
|
|
(1
|
)
|
Effective tax rate
|
22
|
%
|
|
48
|
%
|
|
32
|
%
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Deferred
Tax
Assets
|
|
Deferred
Tax
Liabilities
|
|
Deferred
Tax
Assets
|
|
Deferred
Tax
Liabilities
|
||||||||
Other employee benefits
|
$
|
87
|
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
—
|
|
Pension plans
|
66
|
|
|
—
|
|
|
48
|
|
|
—
|
|
||||
Operating loss and tax credit carryforwards
|
255
|
|
|
—
|
|
|
377
|
|
|
—
|
|
||||
Depreciation
|
—
|
|
|
259
|
|
|
—
|
|
|
234
|
|
||||
Amortization
|
—
|
|
|
395
|
|
|
—
|
|
|
314
|
|
||||
Foreign tax credits
|
161
|
|
|
—
|
|
|
160
|
|
|
—
|
|
||||
State and local taxes
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Other
|
61
|
|
|
—
|
|
|
69
|
|
|
—
|
|
||||
Subtotal
|
633
|
|
|
654
|
|
|
749
|
|
|
548
|
|
||||
Valuation allowances
|
(78
|
)
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
||||
Total deferred taxes
|
$
|
555
|
|
|
$
|
654
|
|
|
$
|
655
|
|
|
$
|
548
|
|
|
Expiration
Dates
|
|
Amounts
|
||
U.S. federal loss carryforwards
|
2027 – 2032
|
|
$
|
65
|
|
U.S. state loss carryforwards (a)
|
2019 – 2034
|
|
58
|
|
|
Foreign loss and tax credit carryforwards
|
Indefinite
|
|
37
|
|
|
Foreign loss and tax credit carryforwards (a)
|
2019 – 2034
|
|
65
|
|
|
Other U.S. federal and state tax credits
|
2028 – 2034
|
|
30
|
|
|
Total operating loss and tax credit carryforwards
|
|
|
$
|
255
|
|
U.S foreign tax credits
|
2027
|
|
$
|
161
|
|
(a)
|
As of
December 31, 2018
,
$8 million
of U.S. state and
$6 million
of foreign deferred tax assets related to loss carryforwards are set to expire over the next
three years
.
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of period
|
$
|
90
|
|
|
$
|
98
|
|
|
$
|
84
|
|
Tax positions related to the current year
|
|
|
|
|
|
||||||
Gross additions
|
6
|
|
|
1
|
|
|
1
|
|
|||
Tax positions related to prior years
|
|
|
|
|
|
||||||
Gross additions
|
36
|
|
|
13
|
|
|
19
|
|
|||
Gross reductions
|
(37
|
)
|
|
(11
|
)
|
|
(5
|
)
|
|||
Settlements
|
(5
|
)
|
|
(12
|
)
|
|
(1
|
)
|
|||
Expiration of statute of limitations
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Impact of currency changes
|
(2
|
)
|
|
1
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
84
|
|
|
$
|
90
|
|
|
$
|
98
|
|
|
Quarter
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,691
|
|
|
$
|
1,824
|
|
|
$
|
1,818
|
|
|
$
|
1,724
|
|
Gross margin
|
$
|
355
|
|
|
$
|
418
|
|
|
$
|
448
|
|
|
$
|
411
|
|
Income tax expense
|
$
|
11
|
|
|
$
|
49
|
|
|
$
|
67
|
|
|
$
|
29
|
|
Net earnings attributable to Owens Corning
|
$
|
92
|
|
|
$
|
121
|
|
|
$
|
161
|
|
|
$
|
171
|
|
|
|
|
|
|
|
|
|
||||||||
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
|
$
|
0.83
|
|
|
$
|
1.09
|
|
|
$
|
1.46
|
|
|
$
|
1.56
|
|
|
|
|
|
|
|
|
|
||||||||
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
|
$
|
0.82
|
|
|
$
|
1.08
|
|
|
$
|
1.45
|
|
|
$
|
1.55
|
|
|
Quarter
|
||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
1,478
|
|
|
$
|
1,597
|
|
|
$
|
1,703
|
|
|
$
|
1,606
|
|
Gross margin (a)
|
$
|
342
|
|
|
$
|
408
|
|
|
$
|
423
|
|
|
$
|
396
|
|
Income tax expense (b)
|
$
|
43
|
|
|
$
|
67
|
|
|
$
|
32
|
|
|
$
|
127
|
|
Net earnings (loss) attributable to Owens Corning
|
$
|
101
|
|
|
$
|
96
|
|
|
$
|
96
|
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
||||||||
BASIC EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
|
$
|
0.90
|
|
|
$
|
0.86
|
|
|
$
|
0.86
|
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
||||||||
DILUTED EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
|
$
|
0.89
|
|
|
$
|
0.85
|
|
|
$
|
0.85
|
|
|
$
|
(0.04
|
)
|
Number
|
|
Description
|
Page
|
II
|
|
Valuation and Qualifying Accounts and Reserves – for the years ended December 31, 2018, 2017 and 2016
|
(a)
|
Uncollectible accounts written off, net of recoveries.
|
General Description
:
|
The Executive Chairman leads the Board of Directors in its governance and oversight responsibilities with regard to the Company, collaborates with the Lead Independent Director (“LID”) on Board activity, and advises the Chief Executive Officer
|
▪
|
Overall, provides leadership to ensure the Board works effectively
|
▪
|
Serves as the principal liaison on certain Board-wide issues between directors and management
|
▪
|
Develops agendas for Board and Committee meetings, with input from the CEO and the LID; reviews and approves board meeting agendas and schedules
|
▪
|
Leads the Board meetings and, together with the CEO and LID, keeps Board members focused on the key objectives at hand
|
▪
|
As requested, represents the Board with management and the public, including shareholders, investors and other stakeholders
|
▪
|
Collaborates with the Board on CEO onboarding and succession planning, and provides input with respect to the development and evaluation of the CEO
|
▪
|
Leads the recruitment of new directors, if requested
|
▪
|
Performs such other duties as the Board may determine from time to time
|
▪
|
Transition the responsibilities for the management of the Company to the CEO by facilitating introductions and establishing relationships with customers, investors and other stakeholders
|
▪
|
At the request and direction of the CEO, advise the CEO on:
|
◦
|
Strategic matters
|
◦
|
Organizational and management systems
|
◦
|
Development of Board communication materials
|
◦
|
The development of Strategic Objectives for Board review
|
◦
|
The development of the Talent Review/succession materials for Board review
|
◦
|
Any other matter as deemed valuable, and
|
▪
|
Be available for next-day in-person meetings as needed for critical, time-sensitive issues
|
Subsidiaries of Owens Corning (12/31/2018)
|
State or Other Jurisdiction Under the Laws of Which Organized
|
0979301 B.C. ULC
|
British Columbia
|
AS Paroc
|
Estonia
|
Crown Mfg. Inc.
|
Ontario
|
Deutsche Foamglas GmbH
|
Germany
|
Dutch OC Coöperatief Invest U.A.
|
The Netherlands
|
Engineered Pipe Systems, Inc.
|
Delaware
|
Eric Company
|
Delaware
|
European Owens Corning Fiberglas SPRL
|
Belgium
|
Finefiber (Shanghai) Building Material Co. Ltd.
|
China
|
Finefiber Insulation Co. Pte. Ltd.
|
Singapore
|
Foamglas (Italia) SRL
|
Italy
|
Foamglas (Nordic) AB
|
Sweden
|
Guangde SKD Rock Wool Manufacturing Company Limited
|
China
|
IBCO SRL
|
Barbados
|
International Packaging Products Pvt. Ltd.
|
India
|
InterWrap (Hong Kong) Ltd.
|
Hong Kong
|
InterWrap (Qingdao) Trading Co., Ltd.
|
China
|
InterWrap Corp.
|
Oregon
|
InterWrap Corp. Pvt. Ltd.
|
India
|
Inversiones Owens Corning Chile Holdings Limitada
|
Chile
|
IPM Inc.
|
Delaware
|
OC Canada Finance Inc.
|
Canada
|
OC Canada Holdings General Partnership
|
Delaware
|
OC Celfortec Company
|
Nova Scotia
|
OC Latin American Holdings GmbH
|
Austria
|
OC NL Invest Coöperatief U.A.
|
The Netherlands
|
OC PRO CV
|
The Netherlands
|
OC Steklovolokno AO
|
Russia
|
OCCV1, Inc.
|
Delaware
|
OCCV2, LLC
|
Delaware
|
OCV (Thailand) Co. Limited
|
Thailand
|
OCV Chambéry France
|
France
|
OCV Chambéry International
|
France
|
OCV Finance, LLC
|
Delaware
|
OCV Intellectual Capital, LLC
|
Delaware
|
OCV Italia Srl
|
Italy
|
OCV Mexico S. de R.L. de C.V.
|
Mexico
|
OCV Servicios Mexico, S.A. de C.V.
|
Mexico
|
OOO Paroc
|
Russia
|
Owens Corning (Australia) Pty Limited
|
Australia
|
Owens Corning (China) Investment Company Limited
|
China
|
Owens Corning (Guangzhou) Fiberglas Co., Ltd.
|
China
|
Owens Corning (Nanjing) Building Materials Co., Ltd.
|
China
|
Owens Corning (Shanghai) Fiberglas Co., Ltd.
|
China
|
Owens Corning (Singapore) Pte Ltd
|
Singapore
|
Owens Corning (Tianjin) Building Materials Co., Ltd.
|
China
|
Owens Corning (Xi’an) Building Materials Co., Ltd.
|
China
|
Owens Corning Alloy Canada GP Inc.
|
Canada
|
Owens Corning Alloy Canada LP
|
Manitoba
|
Owens Corning Argentina Sociedad de Responsabilidad Limitada
|
Argentina
|
Owens Corning Automotive, LLC
|
Delaware
|
Owens Corning BM (Korea), Ltd
|
Korea
|
Owens-Corning Britinvest Limited
|
United Kingdom
|
Owens Corning Canada GP Inc.
|
Canada
|
Owens Corning Canada Holdings B.V.
|
The Netherlands
|
Owens Corning Canada Holdings ULC
|
British Columbia
|
Owens Corning Canada LP
|
Manitoba
|
Owens Corning Cayman (China) Holdings
|
Cayman Islands
|
Owens-Corning Cayman Limited
|
Cayman Islands
|
Owens Corning Celfortec Canada GP Inc.
|
Canada
|
Owens Corning Celfortec LP
|
Manitoba
|
Owens Corning Composite Materials Canada GP Inc.
|
Nova Scotia
|
Owens Corning Composite Materials Canada LP
|
Manitoba
|
Owens Corning Composite Materials, LLC
|
Delaware
|
Owens Corning Composites (Beijing) Co., Ltd.
|
China
|
Owens Corning Composites (China) Co., Ltd.
|
China
|
Owens Corning Construction Services, LLC
|
Delaware
|
Owens Corning Elaminator Insulation Systems, LLC
|
Delaware
|
Owens Corning Enterprise (India) Pvt. Ltd.
|
India
|
Owens Corning Fabrics (Changzhou) Co., Ltd.
|
China
|
Owens Corning Fiberglas (U.K.) Pension Plan Ltd.
|
United Kingdom
|
Owens Corning Fiberglas A.S. Limitada
|
Brazil
|
Owens-Corning Fiberglas Deutschland GmbH
|
Germany
|
Owens Corning Fiberglas Espana, SL
|
Spain
|
Owens Corning Fiberglas France
|
France
|
Owens Corning Financial Services ULC
|
Nova Scotia
|
Owens Corning Finland Oy
|
Finland
|
Owens Corning Foam Insulation, LLC
|
Delaware
|
Owens Corning Franchising, LLC
|
Delaware
|
Owens-Corning Funding Corporation
|
Delaware
|
Owens Corning GlassMetal Services (Suzhou) Co., Ltd.
|
China
|
Owens Corning Global Holdings LP
|
British Columbia
|
Owens Corning Holdings 1 CV
|
The Netherlands
|
Owens Corning Holdings 3 CV
|
The Netherlands
|
Owens Corning Holdings 4 CV
|
The Netherlands
|
Owens Corning Holdings 5 CV
|
The Netherlands
|
Owens Corning Holdings Holland B.V.
|
The Netherlands
|
Owens Corning HOMExperts, Inc.
|
Delaware
|
Owens Corning Hong Kong Limited
|
Hong Kong
|
Owens Corning HT, Inc.
|
Delaware
|
Owens Corning Industries (India) Private Limited
|
India
|
Owens Corning Infrastructure Solutions, LLC
|
Delaware
|
Owens Corning Insulating Systems, LLC
|
Delaware
|
Owens Corning Insulating Systems Canada GP Inc.
|
Canada
|
Owens Corning Insulating Systems Canada LP
|
Manitoba
|
Owens Corning Intellectual Capital, LLC
|
Delaware
|
Owens Corning International Holdings C.V.
|
The Netherlands
|
Owens Corning InterWrap Canada GP Inc.
|
Ontario
|
Owens Corning InterWrap Canada LP
|
Manitoba
|
Owens Corning Japan, LLC
|
Japan
|
Owens Corning Kohold B.V.
|
The Netherlands
|
Owens Corning Korea
|
Korea
|
Owens Corning Mexico, S. de R.L. de C.V.
|
Mexico
|
Owens Corning Mineral Wool, LLC
|
Delaware
|
Owens Corning Non-Woven - Blythewood, LLC
|
Delaware
|
Owens Corning Non-Woven Technology, LLC
|
Delaware
|
Owens Corning Receivables LLC
|
Delaware
|
Owens Corning Reinforcements (Hangzhou) Co., Ltd.
|
China
|
Owens Corning Remodeling Canada GP Inc.
|
Canada
|
Owens Corning Remodeling Canada LP
|
Manitoba
|
Owens Corning Remodeling Systems, LLC
|
Delaware
|
Owens Corning Roofing and Asphalt, LLC
|
Delaware
|
Owens Corning Sales, LLC
|
Delaware
|
Owens Corning Science and Technology, LLC
|
Delaware
|
Owens Corning Sunrooms Franchising, LLC
|
Delaware
|
Owens Corning Supplementary Pension Plan Limited
|
United Kingdom
|
Owens Corning Technical Fabrics, LLC
|
Delaware
|
Owens Corning U.S. Holdings, LLC
|
Delaware
|
Owens-Corning (India) Private Limited
|
India
|
Owens-Corning Veil Netherlands B.V.
|
The Netherlands
|
Owens-Corning Veil U.K. Ltd.
|
United Kingdom
|
Paroc AB
|
Sweden
|
Paroc GmbH
|
Germany
|
Paroc Group Oy
|
Finland
|
Paroc Limited
|
United Kingdom
|
Paroc Oy Ab
|
Finland
|
Paroc Polska Sp. z o.o.
|
Poland
|
Paroc Sverige AB
|
Sweden
|
Pittsburgh Corning (United Kingdom) Limited
|
United Kingdom
|
Pittsburgh Corning (Yantai) Insulation Materials Co., Ltd
|
China
|
Pittsburgh Corning Asia Limited
|
Hong Kong
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Pittsburgh Corning CR, S.R.O.
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Czech Republic
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Pittsburgh Corning Europe N.V.
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Belgium
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Pittsburgh Corning France
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France
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Pittsburgh Corning Gesellschaft m.b.h.
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Austria
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Pittsburgh Corning Nederland B.V.
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The Netherlands
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Pittsburgh Corning Singapore Pte., Ltd
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Singapore
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Pittsburgh Corning Suisse SA
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Switzerland
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Pittsburgh Corning, LLC
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Delaware
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Qingdao Novia Polymer Co., Ltd.
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China
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SIA Paroc
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Latvia
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Soltech, Inc.
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Kentucky
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TF Holding Corp.
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Delaware
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Thermafiber, Inc.
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Delaware
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Transandina de Comercio S.A.
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Chile
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UAB Paroc
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Lithuania
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1.
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I have reviewed this annual report on Form 10-K of Owens Corning;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this annual report on Form 10-K of Owens Corning;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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