SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1994
Commission File No. 1-3660
Owens-Corning Fiberglas Corporation
Fiberglas Tower, Toledo, Ohio 43659
Telephone No. (419)248-8000
A Delaware Corporation
I.R.S. Employer Identification No. 34-4323452
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Shares of common stock, par value $.10 per share, outstanding at
October 31, 1994
44,224,101
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<TABLE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Quarter Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars,
except share data)
<S> <C> <C> <C> <C>
NET SALES $ 936 $ 785 $2,465 $2,190
COST OF SALES 705 606 1,872 1,696
------ ------ ------ ------
Gross margin 231 179 593 494
OPERATING EXPENSES
Marketing and administrative
expenses 98 80 276 239
Science and technology expenses 18 18 51 51
Restructuring costs (Note 5) - - 89 23
Writedown of hydrocarbon ventures - 8 - 8
Other (Note 5) 7 3 41 10
------ ------ ------ ------
Total operating expenses 123 109 457 331
------ ------ ------ ------
INCOME FROM OPERATIONS 108 70 136 163
Cost of borrowed funds (24) (23) (69) (68)
------ ------ ------ ------
INCOME BEFORE PROVISION FOR INCOME TAXES 84 47 67 95
Provision for income taxes (Note 9) 31 3 34 29
------ ------ ------ ------
INCOME BEFORE EQUITY IN NET INCOME OF
AFFILIATES 53 44 33 66
Equity in net income (loss) of affiliates - 4 (2) 6
------ ------ ------ ------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGES 53 48 31 72
Cumulative effect of accounting changes
(Notes 6, 7, 8 and 9) - - 85 26
------ ------ ------ ------
NET INCOME $ 53 $ 48 $ 116 $ 98
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Continued)
Quarter Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars,
except share data)
<S> <C> <C> <C> <C>
NET INCOME PER COMMON SHARE
Primary:
Income before cumulative effect
of accounting changes $ 1.19 $ 1.09 $ .71 $ 1.65
Cumulative effect of accounting
changes - - 1.92 .60
------ ------ ------ ------
Net income per share $ 1.19 $ 1.09 $ 2.63 $ 2.25
====== ====== ====== ======
Assuming full dilution:
Income before cumulative effect
of accounting changes $ 1.09 $ 1.01 $ .75 $ 1.58
Cumulative effect of accounting
changes - - 1.70 .53
------ ------ ------ ------
Net income per share $ 1.09 $ 1.01 $ 2.45 $ 2.11
====== ====== ====== ======
Weighted average number of common
shares outstanding and common
equivalent shares during the
period (in millions)
Primary 44.5 43.7 44.1 43.5
Assuming full dilution 50.3 49.5 49.9 49.3
</TABLE>
The accompanying notes are an integral part of this statement.
PAGE
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
September 30, December 31,
1994 1993
------------- ------------
(In millions of dollars)
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 10 $ 3
Receivables 462 324
Inventories (Note 10) 252 221
Deferred income taxes 137 136
Insurance for asbestos litigation
claims - current portion (Note 12) 150 125
Other current assets 28 18
------ ------
Total current 1,039 827
------ ------
OTHER
Goodwill (Note 3) 174 77
Investments in affiliates (Note 4) 69 63
Deferred income taxes 341 428
Insurance for asbestos litigation
claims (Note 12) 554 643
Other noncurrent assets 108 81
------ ------
Total other 1,246 1,292
------ ------
PLANT AND EQUIPMENT, at cost
Land 49 44
Buildings and leasehold improvements 573 559
Machinery and equipment (Note 6) 2,152 1,978
Construction in progress 126 88
------ ------
2,900 2,669
Less--Accumulated depreciation
(Note 6) (1,809) (1,775)
------ ------
Net plant and equipment 1,091 894
------ ------
TOTAL ASSETS $3,376 $3,013
====== ======
</TABLE>
The accompanying notes are an integral part of this statement.
PAGE
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Continued)
September 30, December 31,
1994 1993
------------- ------------
(In millions of dollars)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued
liabilities (Notes 3 and 5) $ 569 $ 495
Reserve for asbestos litigation
claims - current portion (Note 12) 300 275
Short-term debt (Note 3) 222 77
Long-term debt - current portion 28 29
------ ------
Total current 1,119 876
------ ------
LONG-TERM DEBT (Note 3) 1,050 898
------ ------
OTHER
Reserve for asbestos litigation
claims (Note 12) 1,205 1,385
Other employee benefits liability
(Notes 7 and 8) 382 346
Reserve for rebuilding furnaces
(Note 6) - 124
Pension plan liability 80 78
Other (Note 5) 253 175
------ ------
Total other 1,920 2,108
------ ------
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS' EQUITY
Preferred stock, no par value; authorized
8,000,000 shares, none outstanding
Common stock, par value $.10 per share;
authorized 100,000,000 shares; issued
44.2 million shares at September 30,
1994, and 43.2 million shares at
December 31, 1993 (Note 3) 349 315
Deficit (1,056) (1,171)
Foreign currency translation adjustments 9 5
Other (15) (18)
------ ------
Total stockholders' equity (713) (869)
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $3,376 $3,013
====== ======
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Quarter Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars)
<S> <C> <C> <C> <C>
NET CASH FLOW FROM OPERATIONS
Net income $ 53 $ 48 $ 116 $ 98
Reconciliation of net cash provided
by operating activities:
Noncash items:
Cumulative effect of accounting
changes - - (85) (26)
Provision for depreciation,
amortization, and rebuilding
furnaces (Note 6) 30 29 85 86
Provision (credit) for deferred
income taxes 23 (9) 44 (7)
Other 2 8 7 13
(Increase) decrease in receivables (24) (7) (104) (93)
(Increase) decrease in inventories 5 2 (10) (4)
Increase (decrease) in accounts
payable and accrued liabilities - 35 7 98
Proceeds from insurance for asbestos
litigation claims 36 20 64 187
Payments for asbestos litigation
claims (43) (41) (155) (238)
Increase (decrease) in accrued
income taxes 7 (4) (3) (13)
Other (6) (17) 36 (7)
------ ------ ------ ------
Net cash flow from operations 83 64 2 94
------ ------ ------ ------
NET CASH FLOW FROM INVESTING
Additions to plant and equipment (61) (51) (165) (116)
Investment in subsidiaries, net of
cash acquired (Note 3) (1) - (108) -
Other (Note 4) 14 1 16 2
------ ------ ------ ------
Net cash flow from investing (48) (50) (257) (114)
------ ------ ------ ------
</TABLE>
The accompanying notes are an integral part of this statement.
PAGE
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued)
Quarter Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars)
<S> <C> <C> <C> <C>
NET CASH FLOW FROM FINANCING
Net additions (reductions) to
long-term credit facilities $ (73) $ (13) $ 150 $ 7
Other reductions to long-term debt (1) (5) (27) (12)
Net increase in short-term debt
(Note 3) 34 6 135 20
Other - 3 4 10
------ ------ ------ ------
Net cash flow from financing (40) (9) 262 25
------ ------ ------ ------
Net increase (decrease) in cash
and cash equivalents (5) 5 7 5
Cash and cash equivalents at
beginning of period 15 2 3 2
------ ------ ------ ------
Cash and cash equivalents at end
of period $ 10 $ 7 $ 10 $ 7
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of this statement.
PAGE
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Quarter Nine Months
Ended Ended
September 30, September 30,
(1) SEGMENTS ------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars)
<S> <C> <C> <C> <C>
BUSINESS SEGMENTS:
NET SALES
Building Products $ 660 $ 533 $1,657 $1,440
Industrial Materials 276 252 808 750
------ ------ ------ ------
936 785 2,465 2,190
------ ------ ------ ------
Intersegment sales
Building Products - - - -
Industrial Materials 30 24 80 68
Eliminations (30) (24) (80) (68)
------ ------ ------ ------
- - - -
------ ------ ------ ------
Consolidated net sales $ 936 $ 785 $2,465 $2,190
====== ====== ====== ======
INCOME FROM OPERATIONS
Building Products 90 54 115 118
Industrial Materials 35 32 77 72
General corporate expense (17) (16) (56) (27)
------ ------ ------ ------
Income from operations 108 70 136 163
Cost of borrowed funds (24) (23) (69) (68)
------ ------ ------ ------
Income before provision for
income taxes $ 84 $ 47 $ 67 $ 95
====== ====== ====== ======
</TABLE>
<PAGE>
<PAGE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Quarter Nine Months
Ended Ended
September 30, September 30,
(1) SEGMENTS (Continued) ------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars)
<S> <C> <C> <C> <C>
GEOGRAPHIC SEGMENTS:
NET SALES
United States $ 713 $ 602 $1,903 $1,661
Europe and other 164 125 407 378
Canada 59 58 155 151
------ ------ ------ ------
936 785 2,465 2,190
------ ------ ------ ------
Intersegment sales
United States 12 12 31 35
Europe and other 9 5 28 8
Canada 25 12 72 38
Eliminations (46) (29) (131) (81)
------ ------ ------ ------
- - - -
------ ------ ------ ------
Consolidated net sales $ 936 $ 785 $2,465 $2,190
====== ====== ====== ======
INCOME FROM OPERATIONS
United States $ 98 $ 69 $ 177 $ 186
Europe and other 10 8 3 (6)
Canada 17 9 12 10
General corporate expense (17) (16) (56) (27)
------ ------ ------ ------
Income from operations 108 70 136 163
Cost of borrowed funds (24) (23) (69) (68)
------ ------ ------ ------
Income before provision for
income taxes $ 84 $ 47 $ 67 $ 95
====== ====== ======= =======
</TABLE>
During the first quarter of 1994, the Company recorded a $117 million pretax
charge for productivity initiatives and other actions (Note 5). The impact
of this charge was to reduce income from operations for Building Products
and Industrial Materials by $70 million and $22 million, respectively, and
to increase general corporate expense by $25 million. Geographically,
income from operations in the United States, Canada, and Europe and Other
was reduced by $56 million, $23 million, and $13 million, respectively.
During the first quarter of 1993, the Company recorded a $23 million charge
to reorganize its European operations, the full impact of which was
reflected as a reduction to income from operations for the Industrial
Materials segment (Note 5).
PAGE
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(2) GENERAL
The financial statements included in this Report are condensed and
unaudited, pursuant to certain Rules and Regulations of the Securities
and Exchange Commission, but include, in the opinion of the Company,
adjustments necessary for a fair statement of the results for the
periods indicated, which, however, are not necessarily indicative of
results which may be expected for the full year.
In connection with the condensed financial statements and notes included
in this Report, reference is made to the financial statements and
notes thereto contained in the Company's 1993 Annual Report on Form
l0-K, as filed with the Securities and Exchange Commission.
(3) ACQUISITIONS
On May 31, 1994, the Company acquired UC Industries, Inc. ("UCI"), a
privately held foam board insulation manufacturer based in New Jersey.
UCI began operations in 1977 and currently has two manufacturing
facilities which are located in Ohio and Illinois.
The purchase price of UCI was $45 million. This business combination
was consummated by the exchange of 855,556 shares of the Company's
common stock for all of the capital stock of UCI, as well as an $18
million cash payment, $6 million of which was paid to acquire the cash
of UCI. The remaining $12 million cash payment represents a stock
value settlement and was paid during the fourth quarter of 1994.
On June 2, 1994, the Company acquired Pilkington Insulation Limited and
Kitsons Insulation Products Limited (collectively, "Pilkington"), the
United Kingdom-based insulation manufacturing and distribution
businesses of the Pilkington Group. With two fiber glass insulation
manufacturing facilities and one rock wool manufacturing facility,
Pilkington Insulation Limited is the United Kingdom's largest
manufacturer of fiber glass and rock wool insulation. Kitsons
Insulation Products Limited is a major supplier of thermal and
insulation products to the United Kingdom construction industry and is
comprised of 14 distribution centers.
The purchase price of Pilkington was $110 million and was financed with
borrowings from the Company's newly established short-term bank credit
facility. This credit facility has a 364-day term and carries an
interest rate of 1/2 of 1 percent over the London Interbank Offered
Rate (LIBOR). The rate of interest on borrowings under this facility
was 5.50% at September 30, 1994.
These acquisitions were accounted for using the purchase method of
accounting. Accordingly, the assets acquired and liabilities assumed
have been recorded at their fair values and the results of operations
of UCI and Pilkington have been included in the Company's consolidated
financial statements subsequent to May 31, 1994 and June 2, 1994,
respectively.
PAGE
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(3) ACQUISITIONS (Continued)
The fair value of assets acquired from UCI, including goodwill and a
non-competition agreement, was $72 million, and liabilities assumed,
including $14 million in debt, totalled $27 million. The fair value
of assets acquired from Pilkington, including goodwill, was $170
million, and liabilities assumed, including $7 million in debt,
totalled $60 million. Goodwill of $95 million and the non-competition
agreement of $6 million are being amortized over 40 years and 7 years,
respectively, on a straight-line basis.
Based upon historical performance, UCI and Pilkington are expected to
add approximately $125 million in post-acquisition sales for the
Company during 1994. The pro forma effect of these acquisitions was
not material to net income for the nine months ended September 30,
1994 or 1993.
(4) JOINT VENTURES
On September 30, 1994, the Company entered into a joint venture with
Alpha Corporation of Tennessee, whereby the two companies combined
their existing resin businesses to form Alpha/Owens-Corning, L.L.C.,
the largest manufacturer of polyester resins in North America. The
Company contributed two manufacturing plants (Valparaiso, Indiana and
Guelph, Ontario) and owns a fifty percent interest in the joint
venture. The Company will account for this investment under the
equity method. Immediately following its establishment, Alpha/Owens-
Corning, L.L.C. provided a distribution to each investor, the
Company's share of which was $16.5 million.
(5) RESTRUCTURING OF OPERATIONS AND OTHER INITIATIVES
During the first quarter of 1994, the Company recorded a $117 million
pretax charge, or $1.93 per share, for productivity initiatives and
other actions aimed at reducing costs and enhancing the Company's
speed, focus, and efficiency. This $117 million pretax charge is
comprised of an $89 million charge associated with the restructuring
of the Company's business segments during the first quarter, as well
as a $28 million charge, primarily composed of final costs associated
with the administration of the Company's former commercial roofing
business. The components of the $89 million restructure charge
include: $48 million for personnel reductions, $22 million for
divestiture of non-strategic businesses and facilities, $16 million
for business realignments, and $3 million for other actions.
In the first quarter of 1993, the Company recorded a $23 million charge
to reorganize its European operations. This charge included $17
million for personnel reductions and $6 million for the writedown of
fixed assets.
<PAGE>
<PAGE>
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(6) GLASS-MELTING FURNACE REBUILDS
Effective January 1, 1994, the Company adopted the capital method of
accounting for the cost of rebuilding glass-melting furnaces. Under
this method, costs are capitalized when incurred and depreciated over
the estimated useful lives of the rebuilt furnaces. Previously, the
Company established a reserve for the future rebuilding costs of its
glass-melting furnaces through a charge to earnings between dates of
rebuilds. The change to the capital method provides a more
appropriate measure of the Company's capital investment and is
consistent with industry practice. The cumulative effect of this
change in accounting method was an increase to earnings of $123
million, or $2.80 per share, net of related income taxes of $54
million. The effect of this change in accounting method was to
increase depreciation expense and eliminate furnace rebuild provision.
The pro forma effect of this change was not material to net income for
the nine months ended September 30, 1993.
(7) POSTEMPLOYMENT BENEFITS
Effective January 1, 1994, the Company adopted Financial Accounting
Standards Board Statement No. 112, "Employers' Accounting for
Postemployment Benefits." This standard requires the Company to
recognize the obligation to provide benefits to former or inactive
employees after employment but before retirement under certain
conditions. The cumulative effect of the adoption of this standard
was an undiscounted charge of $28 million, or $.64 per share, net of
related income taxes of $18 million.
(8) POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Effective January 1, 1994, the Company adopted Financial Accounting
Standards Board Statement No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" for its non-U.S. plans.
The cumulative effect of the adoption of this standard was a charge of
$10 million, or $.23 per share. (The Company adopted Statement No.
106 for its U.S. plans effective January 1, 1991.)
(9) INCOME TAXES
Effective January 1, 1993, the Company adopted Financial Accounting
Standards Board Statement No. 109, "Accounting for Income Taxes."
Statement No. 109 changes the criteria for measuring the provision for
income taxes and recognizing deferred tax assets and liabilities. The
cumulative effect of adopting the standard increased earnings by $26
million as of January 1, 1993.
PAGE
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(9) INCOME TAXES (Continued)
The reconciliation between the U.S. federal statutory rate and the
Company's consolidated effective income tax rate is:
<TABLE>
Quarter Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
U. S. federal statutory rate 35% 35% 35% 35%
Increase in U.S. federal statutory
rate - (30) - (15)
Utilization of losses of foreign
subsidiaries (7) (5) (4) (1)
Operating losses of foreign
subsidiaries 3 8 14 13
Difference between foreign
tax rates and U.S. statutory
rate 2 (1) 3 -
Provision for taxes on
undistributed earnings of
foreign subsidiaries - - - (3)
State and local income taxes 2 3 4 4
Adjustment to valuation allowance - - (7) -
Other 2 (3) 5 (2)
------- ------- ------- -------
Effective tax rate 37% 7% 50% 31%
======= ======= ======= =======
</TABLE>
(10) INVENTORIES
<TABLE>
Inventories are summarized as follows:
September 30, December 31,
1994 1993
------------- ------------
(In millions of dollars)
<S> <C> <C>
Finished goods $ 219 $ 195
Materials and supplies 128 117
------- -------
347 312
------- -------
Less: reduction to LIFO basis (95) (91)
------- -------
$ 252 $ 221
======= =======
</TABLE>
Approximately $103 million and $87 million of net inventories were
valued using the LIFO method at September 30, 1994 and December 31,
1993, respectively.
<PAGE>
<PAGE>
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(11) CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
Cash payments, net of refunds, for income taxes and cost of borrowed
funds are summarized as follows:
Quarter Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars)
<S> <C> <C> <C> <C>
Income taxes $ (5) $ 14 $ (11) $ 41
Cost of borrowed funds 11 7 54 51
</TABLE>
Supplemental Disclosure of Non-cash Investing and Financing Activities
(See Note 3)
(12) CONTINGENT LIABILITIES
ASBESTOS LIABILITIES
--------------------
The Company is a co-defendant with other former manufacturers,
distributors and installers of products containing asbestos and
with miners and suppliers of asbestos fibers (collectively, the
Producers) in personal injury and property damage litigation. The
personal injury claimants generally allege injuries to their health
caused by inhalation of asbestos fibers from the Company's
products. Most of the claimants seek punitive damages as well as
compensatory damages. The property damage claims generally allege
property damage to school, public and commercial buildings
resulting from the presence of products containing asbestos.
Virtually all of the asbestos-related lawsuits against the Company
arise out of its manufacture, distribution, sale or installation of
an asbestos-containing calcium silicate, high temperature
insulation product, the manufacture of which was discontinued in
1972.
Status
------
As of September 30, 1994, approximately 102,100 asbestos personal
injury claims were pending against the Company, 6,200 of which were
received in the third quarter of 1994. The Company received
approximately 31,700 such claims in 1993, and 26,600 in 1992.
PAGE
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
Through September 30, 1994, the Company had resolved (by settlement or
otherwise) approximately 133,500 asbestos personal injury claims.
During 1992, 1993 and the first three quarters of 1994, the Company
resolved approximately 60,900 such claims and incurred total
indemnity payments of $590 million (an average of about $10,000 per
case). The Company's indemnity payments have varied considerably
over time and from case to case, and are affected by a multitude of
factors. These include the type and severity of the disease
sustained by the claimant (i.e., mesothelioma, lung cancer, other
types of cancer, asbestosis or pleural changes); the occupation of
the claimant; the extent of the claimant's exposure to asbestos-
containing products manufactured, sold or installed by the Company;
the extent of the claimant's exposure to asbestos-containing
products manufactured, sold or installed by other Producers; the
number and financial resources of other Producer defendants; the
jurisdiction of suit; the presence or absence of other possible
causes of the claimant's illness; the availability or not of legal
defenses such as the statute of limitations or state of the art;
whether the claim was resolved on an individual basis or as part of
a group settlement; and whether the claim proceeded to an adverse
verdict or judgment.
Certain of the Company's principal co-defendants, the 20 members of
the Center for Claims Resolution, have entered into a proposed
"global" settlement which would require future claimants to satisfy
certain medical criteria indicative of significant asbestos-related
impairment as a pre-condition to their eligibility for settlement
payments. The Company is using similar criteria in the
implementation of its own settlement and litigation strategy and is
also seeking to require more careful proof than in the past that
claimants had significant exposure to the Company's asbestos-
containing product or operations. The Company believes that this
strategy will reduce the overall cost of asbestos personal injury
claims in the long run by channeling indemnity payments to
claimants who can establish significant asbestos-related impairment
and exposure to the Company's asbestos-containing product or
operations and by substantially reducing indemnity payments to
individuals who are unimpaired or who did not have significant such
exposure. The Company's strategy has resulted in an increased
level of trial activity and an increase in the number and amount of
compensatory and punitive damage verdicts and judgments against the
Company. This strategy may have the effect of increasing average
per-case indemnity costs for claims resolved with payment, while
also increasing the number of claims dismissed without payment.
PAGE
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
Insurance
---------
As of September 30, 1994, the Company had approximately $364 million
in unexhausted products hazard coverage (net of deductibles and
self-insured retentions and excluding coverage issued by insolvent
carriers) under its liability insurance policies applicable to
asbestos personal injury claims. Of this amount, $144 million will
not be available until the years 1996 through 2000 under an
agreement with the carrier confirming such insurance. An
additional $34 million (out of the $364 million coverage) is
presently the subject of coverage litigation or alternate dispute
resolution procedures. All of the Company's liability insurance
policies cover indemnity payments and defense fees and expenses
subject to applicable policy limits.
In addition, the Company has substantial unexhausted non-products
coverage under such liability insurance policies; an as yet
undetermined amount of such non-products coverage is expected to be
available for payment of asbestos personal injury claims and
associated defense fees and expenses. The Company has commenced
arbitration with its primary level insurance carrier seeking to
confirm the availability of certain of its non-products coverage
for payment of certain asbestos personal injury liabilities,
involving the activities of the Company's former insulation
contracting business. The Company is seeking prompt rulings on the
issues presented. For purposes of calculating the amount of
insurance applicable to asbestos liabilities, the Company has
estimated its recoveries in respect of non-products coverage for
claims received through 1999 at approximately $310 million, which
represents the Company's best estimate of such recoveries for such
claims. The Company cautions, however, that this coverage is
unconfirmed and that the actual amounts recovered by the Company
could, depending upon the outcome of the arbitration, be much
higher or much lower.
PAGE
<PAGE>
-17-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
<TABLE>
Reserve
-------
The Company's estimated total liabilities in respect of indemnity and
defense costs associated with pending and unasserted asbestos
personal injury claims that may be received through the year 1999
(the "Liabilities"), and its estimated insurance recoveries in
respect of such claims (the "Insurance"), are reported separately
as follows:
Asbestos Litigation Claims
----------------------------
September 30, December 31,
1994 1993
------------- ------------
(In millions of dollars)
<S> <C> <C>
Reserve for asbestos litigation claims
--------------------------------------
Current $ 300 $ 275
Other 1,205 1,385
------- -------
Total Reserve 1,505 1,660
Insurance for asbestos litigation claims
----------------------------------------
Current 150 125
Other 554 643
------- -------
Total Insurance 704 768
Net Asbestos Liability $ 801 $ 892
======= =======
</TABLE>
Case filing rates were at historically high levels in 1992 and 1993
(approximately 26,600 new claims in 1992 and approximately 31,700
claims in 1993) and an additional 16,900 new claims were received
during the first three quarters of 1994. Many of these new claims
appear to be the product of mass screening programs and not to involve
significant asbestos-related impairment. The large number of recent
filings and the uncertain value of these claims have added to the
uncertainties involved in estimating the Company's asbestos
Liabilities.
PAGE
<PAGE>
-18-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
The Company cautions that such factors as the number of future asbestos
personal injury claims received by it, the rate of receipt of such
claims, and the indemnity and defense costs associated with asbestos
personal injury claims, as well as the prospects for confirming
additional, applicable insurance coverage beyond the $364 million
referenced above, are influenced by numerous variables that are
difficult to predict, and that estimates, such as the Company's, which
attempt to take account of such variables, are subject to considerable
uncertainty. Depending upon the outcome of the various uncertainties
described above, particularly as they relate to unimpaired claims, it
may be necessary at some point in the future for the Company to make
additional provision for the uninsured costs of asbestos personal
injury claims received through the year 1999 (although no such amounts
are reasonably estimable at this time). The Company remains confident
that its estimate of Liabilities and Insurance will be sufficient to
provide for the costs of all such claims that involve malignancies or
significant asbestos-related functional impairment. The Company has
reviewed and will continue to review the adequacy of its estimate of
Liabilities and Insurance on a periodic basis and make such
adjustments as may be appropriate.
The Company cannot estimate and is not providing for the cost of
unasserted claims which may be received by the Company after the year
1999 because management is unable to predict the number of claims to
be received after 1999, the severity of disease which may be involved
and other factors which would affect the cost of such claims.
Cash Expenditures
-----------------
The Company's anticipated cash expenditures for uninsured asbestos-
related costs of claims received through 1999 are expected to
approximate $801 million, the Company's Liabilities, net of Insurance.
Cash payments will vary annually depending upon a number of factors,
including the pace of the Company's resolution of claims and the
timing of payment of its Insurance.
Management Opinion
------------------
Although any opinion is necessarily judgmental and must be based on
information now known to the Company, in the opinion of management,
the additional uninsured and unreserved costs which may arise out of
pending personal injury and property damage asbestos claims and
additional similar asbestos claims filed in the future will not have
a materially adverse effect on the Company's financial position.
While such additional uninsured and unreserved costs incurred in and
after the year 2000 may be substantial over time, management believes
that any such additional costs will not impair the ability of the
Company to meet its obligations, to reinvest in its businesses or to
take advantage of attractive opportunities for growth.
PAGE
<PAGE>
-19-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
NON-ASBESTOS LIABILITIES
------------------------
In October 1991, the Company and certain of its officers and directors
were named as defendants in a lawsuit captioned Gaetana Lavalle v.
Owens-Corning Fiberglas Corporation, et al. in the United States
District Court for the Northern District of Ohio. Lavalle purports to
be a securities class action on behalf of all purchasers of the
Company's common stock during the period November 1, 1988 through
October 18, 1991. The complaint alleges that the Company's
disclosures during the alleged class period contained material
misstatements and omissions concerning its contingent liabilities for
asbestos claims. The complaint seeks an unspecified amount of damages
(including punitive damages) on the theory that such alleged
misstatements and omissions artificially inflated the price of the
Company's stock. Various other lawsuits and claims arising in the
normal course of business are pending against the Company, some of
which allege substantial damages. Management believes that the
outcome of these lawsuits and claims will not have a materially
adverse effect on the Company's financial position or results of
operations.
PAGE
<PAGE>
-20-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(All per share information in Item 2 is on a fully diluted basis.)
RESULTS OF OPERATIONS
Net income for the third quarter of 1994 was $53 million, or $1.09 per share,
compared to net income of $48 million, or $1.01 per share, in the third
quarter of 1993. Excluding special items, net income for the third quarter
of 1993 was $38 million, or $.82 per share. The third quarter 1993 special
items included a one-time gain of $14 million, or $.29 per share, reflecting
a tax benefit resulting from a revaluation of deferred taxes, offset, in
part, by an increase in the Company's corporate tax liability, necessitated
by the increase in the federal statutory tax rate, and an after-tax charge of
$5 million, or $.10 per share, for the write-down of the Company's
hydrocarbon ventures to their net realizable value.
Net sales were $936 million during the third quarter of 1994, reflecting a
19% increase from the 1993 level of $785 million. Approximately one third of
the sales increase resulted from the second quarter 1994 acquisitions of UC
Industries, Inc. (UCI) and the United Kingdom-based insulation business and
the Kitsons distribution business of Pilkington plc (Pilkington), while the
balance of the sales increase came from volume and price gains. Please see
note 3 to the Consolidated Financial Statements. Gross margin for the third
quarter of 1994 increased to 25%, compared to 23% for the prior year's
period, reflecting improved pricing and productivity in many of the Company's
worldwide businesses.
For the nine months ended September 30, 1994, the Company reported net income
of $116 million, or $2.45 per share, compared to net income of $98 million,
or $2.11 per share, for the nine months ended September 30, 1993. Excluding
special items, net income for the nine months ended September 30, 1993 was
$85 million, or $1.86 per share. This 1994 earnings growth reflects volume,
price, and productivity gains, as well as the benefits of acquisitions. Net
income of $116 million for the nine months ended September 30, 1994 includes
the following offsetting special items from the first quarter: an after-tax
gain of $123 million, or $2.46 per share, reflecting a change to the capital
method of accounting for the rebuilding of glass melting facilities; an
after-tax charge of $85 million, or $1.70 per share, for productivity
initiatives and other actions; a non-cash, after-tax charge of $10 million,
or $.20 per share, to reflect adoption of Statement of Financial Accounting
Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," for plans outside the United States; and a non-cash,
after-tax charge of $28 million, or $.56 per share, to reflect adoption of
SFAS No. 112, "Employers' Accounting for Postemployment Benefits." In
addition to the third quarter items discussed in the first paragraph above,
the 1993 special items included an after-tax credit of $26 million, or $.53
per share, for the cumulative effect of adopting the accounting standard for
income taxes (SFAS No. 109), offset by an after-tax charge of $23 million, or
$.47 per share, for actions taken to improve the competitive position of the
Company's European businesses. Please see notes 5, 6, 7, 8 and 9 to the
Consolidated Financial Statements.
Net sales were $2.465 billion for the nine months ended September 30, 1994,
marking a 13% increase from $2.190 billion in the same period of the prior
year. This growth in sales resulted from volume and pricing gains, as well
as acquisitions. Gross margin for the nine months ended September 30, 1994
increased to 24%, compared to 23% for the prior year's period. This growth
in gross margin also reflects volume and pricing gains, as well as
productivity improvements.
PAGE
<PAGE>
-21-
In the Building Products segment, sales increased 24% in the third quarter of
1994 compared to the same period of 1993. This growth reflects increased
demand and pricing, as well as increased sales arising from the second
quarter 1994 acquisitions of UCI and Pilkington. In North America, Building
Products benefitted from a 14% increase in total insulation sales compared to
the third quarter of 1993, led by an increase in the Company's retail and
commercial insulation businesses. Although roofing sales volume increased,
earnings continue to be a disappointment due to price weakness in that
market. While the window business reported improved sales during the
quarter, that business has not yet reached break-even. In Europe, the
Company is completing the integration of its June 1994 acquisition of
Pilkington and is adding a second production line at its insulation plant in
Vise, Belgium, which is scheduled for completion during the first half of
1995.
In the Industrial Materials segment, sales increased 10% during the quarter
compared to the third quarter of 1993. In North America, composites sales
growth was driven by continued demand in the automotive sector and a broad
range of the Company's industrial markets. While the April 1994 reactivation
of the Company's Jackson, Tennessee plant increased the Company's capacity,
the Company continues to import products into the U.S. from other worldwide
operations, at an added cost, in order to meet North American demand for the
Company's reinforcements. During the third quarter of 1994, the Company
entered into a joint venture with Alpha Corporation of Tennessee, whereby the
two companies combined their existing resin businesses to form Alpha/Owens-
Corning, L.L.C., the largest manufacturer of polyester resins in North
America. The Company contributed two manufacturing plants (Valparaiso,
Indiana and Guelph, Ontario) and owns a fifty percent interest in the joint
venture. Please see note 4 to the Consolidated Financial Statements.
In Europe, where economic conditions are beginning to improve, demand
continues to grow. Pricing has stabilized, but is still slightly lower
compared to the third quarter of 1993. September marked the first month of
positive income from operations for the Company's European composites
business this year. The Company also announced the formation of a new joint-
venture manufacturing plant for glass-reinforced plastic pipe in Camarles,
Spain.
The Company's cost of borrowed funds for the third quarter of 1994 was $1
million higher than during the corresponding quarter of the prior year due to
increased borrowing and higher interest rates during the quarter compared to
a year ago.
In September 1994, the Company announced the development of MIRAFLEX(TM)
fiber, a new form of glass fiber composed of two different forms of glass
fused together in a single filament. MIRAFLEX fibers are randomly twisted,
flexible, soft to the touch, virtually itch-free and resilient. The first
application of MIRAFLEX fiber will be a home attic insulation to be
introduced in select North American markets.
LIQUIDITY, CAPITAL RESOURCES AND OTHER RELATED MATTERS
Cash flow from operations was $83 million for the third quarter of 1994,
compared to $64 million for the third quarter of 1993. Net inventories
increased from $221 million at year-end 1993 to $252 million at the end of
the third quarter of 1994, reflecting the acquisition of inventories from UCI
and Pilkington. Total receivables at September 30, 1994 were $462 million,
$138 million higher than at year-end 1993 because of the acquisitions and
high sales levels for building products and composites worldwide in the third
quarter.
PAGE
<PAGE>
-22-
At September 30, 1994, the Company's net working capital was a negative $80
million and its current ratio was .93, compared to a negative $49 million and
.94, respectively, at December 31, 1993.
Total borrowings at September 30, 1994 were $296 million higher than at year-
end 1993, primarily due to the Pilkington acquisition, capital expenditures,
and asbestos payments (net of insurance proceeds and taxes). In connection
with the second quarter 1994 Pilkington acquisition, the Company established,
effective June 1, 1994, a $110 million 364-day credit facility with a
syndicate of banks led by the Bank of New York. In the third quarter of
1994, the Company amended its long-term U.S. loan facility, led by Credit
Suisse, to increase the available lines of credit by $100 million and also
established a Canadian credit facility with a syndicate of banks, led by
Credit Suisse Canada, serving as agent, replacing the previous facility which
expired in July 1994. The new facility has a commitment of 95 million
Canadian dollars (71 million U.S. dollars) and expires in October 1997. As
of September 30, 1994, the Company had unused lines of credit of $187 million
available under long-term bank loan facilities and an additional $103 million
under short-term facilities, compared to $376 million and $64 million,
respectively, at year-end 1993. The net decline in unused available lines of
credit reflects the Company's higher borrowings and an increase in
outstanding letters of credit, supporting appeals from asbestos trials, which
reduce credit availability under the Company's long-term U.S. loan facility.
Capital spending for property, plant and equipment, excluding acquisitions,
was $61 million during the third quarter of 1994. At the end of the quarter,
approved capital projects, including furnace rebuilds, were $106 million.
The Company expects that funding for these expenditures will be from the
Company's operations and external sources as required.
Gross payments for asbestos litigation claims during the third quarter of
1994, including $13 million in defense costs, were $43 million. Proceeds
from insurance were $36 million, resulting in a net pretax cash outflow of $7
million, or $4 million after-tax. In the third quarter of 1994, the Company
received about 6,200 new asbestos personal injury cases and closed
approximately 2,400 cases. Over the next twelve months, the Company's total
payments for asbestos litigation claims, including defense costs, are
expected to be approximately $300 million. Proceeds from insurance of $150
million are expected to be available to cover these costs, resulting in a net
pretax cash outflow of $150 million, or $90 million after-tax. Please see
note 12 to the Consolidated Financial Statements
The Company expects funds generated from operations, together with funds
available under long and short term bank loan facilities, to be sufficient to
satisfy its debt service obligations under its existing indebtedness, as well
as its contingent liabilities for uninsured asbestos personal injury claims.
On June 30, 1994, the Company's 8% Convertible Junior Subordinated Debentures
became redeemable, at a premium, at the Company's option. The Company will
consider on an ongoing basis whether to call the debentures, which are
currently convertible at any time prior to redemption for approximately 5.8
million shares of Common Stock in the aggregate. As part of this
consideration, the Company is evaluating sources of funding for the
redemption costs of debentures that are not converted, including the issuance
of debt or equity securities.
PAGE
<PAGE>
-23-
The Company has been deemed by the Environmental Protection Agency (EPA) to
be a potentially responsible party (PRP) with respect to certain sites under
the Comprehensive Environmental Response, Compensation and Liability Act
(Superfund). The Company has also been deemed a PRP under similar state or
local laws. In other instances, other PRPs have brought suits or claims
against the Company as a PRP for contribution under such federal, state or
local laws. During the third quarter of 1994, the Company was not named as
a PRP in any new sites. At September 30, 1994, a total of 38 such PRP
designations remained unresolved by the Company, some of which designations
the Company believes to be erroneous. The Company is also involved with
environmental investigation or remediation at a number of other sites at
which it has not been designated a PRP. The Company has established reserves
for its Superfund (and similar state, local and private action) contingent
liabilities which are reflected in the financial statements. The Company
believes these reserves are adequate to cover these liabilities and are not
material to the financial position or results of operations of the Company.
In addition, based upon information presently available to the Company, and
without regard to the application of insurance, the Company believes that,
considered in the aggregate, the additional costs associated with such
contingent liabilities, including any related litigation costs, will not have
a materially adverse effect on the Company's financial position or results of
operations.
The 1990 Clean Air Act Amendments (Act) provide that the EPA will issue
regulations on a number of air pollutants over a period of years. Until
these regulations are developed, the Company cannot determine the extent to
which the Act will affect it. The Company anticipates that its sources to be
regulated will include glass fiber manufacturing, resin manufacturing and
asphalt processing activities. The Company currently expects glass fiber
manufacturing to be regulated by 1997. Based on information now known to the
Company, including the nature and limited number of regulated materials it
emits, the Company does not expect the Act to have a material adverse effect
on the Company's results of operations, financial condition, or long-term
liquidity.
PAGE
<PAGE>
-24-
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See the paragraphs in note 12, Contingent Liabilities, to the Consolidated
Financial Statements above, which are incorporated here by reference.
Securities and Exchange Commission rules require the Company to describe
certain governmental proceedings arising under federal, state or local
environmental provisions unless the Company reasonably believes that the
proceeding will result in monetary sanctions of less than $100,000. The
following proceeding is reported in response to this requirement. Based on
the information presently available to it, however, the Company believes that
the costs which may be associated with this matter will not have a materially
adverse effect on the Company's financial position or results of operations.
In the third quarter of 1994, the Company reported to the Texas
Natural Resource Conservation Commission (TNRCC) that it had
discovered that the glass forming areas of its Amarillo, Texas
plant were operating without certain required air permits. The
TNRCC and the Company are working together to resolve this matter.
The Company is unable at this time to determine the amount of
penalties that may be sought by the TNRCC.
ITEM 2. CHANGES IN SECURITIES
(a) None of the constituent instruments defining the rights of the holders
of any class of the Company's registered securities was materially
modified in the quarter ended September 30, 1994.
(b) None of the rights evidenced by any class of the Company's registered
securities was materially limited or qualified in the quarter ended
September 30, 1994 by the issuance or modification of any other class of
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a) During the quarter ended September 30, 1994, there was no material
default in the payment of principal, interest, sinking or purchase fund
installments, or any other material default not cured within 30 days,
with respect to any indebtedness of the Company or any of its
significant subsidiaries exceeding 5 percent of the total assets of the
Company and its consolidated subsidiaries.
(b) During the quarter ended September 30, 1994, no material arrearage in
the payment of dividends occurred, and there was no other material
delinquency not cured within 30 days, with respect to any class of
preferred stock of the Company which is registered or which ranks prior
to any class of registered securities, or with respect to any class of
preferred stock of any significant subsidiary of the Company.
PAGE
<PAGE>
-25-
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the quarter
ended September 30, 1994.
ITEM 5. OTHER INFORMATION
The Company does not elect to report any information under this item.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
See Exhibit Index below, which is incorporated here by reference.
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the quarter
ended September 30, 1994.
PAGE
<PAGE>
-26-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OWENS-CORNING FIBERGLAS CORPORATION
Registrant
Date November 10, 1994 By /s/David W. Devonshire
------------------- -----------------------------
David W. Devonshire
Senior Vice President and Chief
Financial Officer
Date November 10, 1994 /s/Domenico Cecere
------------------- -----------------------------
Domenico Cecere
Vice President and Controller
PAGE
<PAGE>
-27-
EXHIBIT INDEX
-------------
Exhibit
Number Document Description
- ------- --------------------
(10) Material Contracts.
Credit Agreement, dated as of November 2, 1993, among
Owens-Corning Fiberglas Corporation, the Banks listed on
Annex A thereto, and Credit Suisse, as Agent for the Banks
(incorporated herein by reference to Exhibit (4) to the
Company's quarterly report on Form 10-Q for the quarter
ended September 30, 1993), as amended by Amendment No. 1
thereto (incorporated herein by reference to Exhibit (10)
to the Company's quarterly report on Form 10-Q for the
quarter ended June 30, 1994).
Rights Agreement, dated as of December 18, 1986, between
Owens-Corning Fiberglas Corporation and Manufacturers
Hanover Trust Company, as Rights Agent, including, as
Exhibit B of such Rights Agreement, the form of Right
Certificate (incorporated herein by reference to Exhibits
1 and 2 to the Company's Registration Statement on Form 8-
A, dated December 23, 1986).
The following documents are incorporated herein by
reference to Exhibit (10) to the Company's annual report on
Form 10-K for 1993:
- 1994 Corporate Incentive Plan - General Terms
- Agreement, dated February 11, 1994, with Larry T.
Solari.
Owens-Corning Fiberglas Corporation Director's Charitable
Award Program (incorporated herein by reference to Exhibit
(10) to the Company's quarterly report on Form 10-Q for
the quarter ended September 30, 1993).
Owens-Corning Fiberglas Corporation Executive
Supplemental Benefit Plan, as amended (incorporated
herein by reference to Exhibit (10) to the Company's
quarterly report on Form 10-Q for the quarter ended March
31, 1993).
PAGE
<PAGE>
-28-
Employment Agreement, dated as of December 15, 1991, with
Glen H. Hiner (incorporated herein by reference to
Exhibit (10) to the Company's annual report on Form 10-K
for 1991), as amended by First Amending Agreement made as
of April 1, 1992 (incorporated herein by reference to
Exhibit (19) to the Company's quarterly report on Form
10-Q for the quarter ended June 30, 1992).
Owens-Corning Fiberglas Corporation Stock Performance
Incentive Plan (incorporated herein by reference to
Exhibit (19) to the Company's quarterly report on Form
10-Q for the quarter ended June 30, 1992).
Owens-Corning Fiberglas Corporation 1987 Stock Plan for
Directors, as amended (incorporated herein by reference
to Exhibit (19) to the Company's quarterly report on Form
10-Q for the quarter ended March 31, 1992).
Form of Key Management Severance Benefits Agreement
(incorporated herein by reference to Exhibit (10) to the
Company's annual report on Form 10-K for 1991).
Consulting Agreement, dated September 27, 1990, with
William W. Boeschenstein (incorporated herein by
reference to Exhibit (10) to the Company's annual report
on Form 10-K for 1990).
Owens-Corning Fiberglas Corporation 1986 Equity
Partnership Plan, as amended (incorporated herein by
reference to Exhibit (19) to the Company's quarterly
report on Form 10-Q for the quarter ended March 31,
1988), as amended by Amendment 1 thereto (incorporated
herein by reference to Exhibit (19) to the Company's
quarterly report on Form 10-Q for the quarter ended March
31, 1989), by Amendment 2 thereto (incorporated herein by
reference to Exhibit (10) to the Company's annual report
on Form 10-K for 1989) and by Amendment 3 thereto
(incorporated herein by reference to Exhibit (10) to the
Company's annual report on Form 10-K for 1990).
PAGE
<PAGE>
-29-
The following documents are incorporated herein by
reference to Exhibit (10) to the Company's annual report
on Form 10-K for 1989:
- Pension Agreement, dated April 16, 1984, with
William W. Colville.
- Form of Directors' Indemnification Agreement.
The following documents are incorporated herein by
reference to Exhibit (10) to the Company's annual report
on Form 10-K for 1987:
- Owens-Corning Fiberglas Corporation Officers
Deferred Compensation Plan.
- Owens-Corning Fiberglas Corporation Deferred
Compensation Plan for Directors, as amended.
(11) Statement re Computation of Per Share Earnings (filed
herewith).
(27) Financial Data Schedule (filed herewith).
<TABLE>
<CAPTION>
Exhibit (11)
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
Quarter Nine Months
Ended Ended
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars,
except share data)
<S> <C> <C> <C> <C>
Primary:
- --------
Net Income $ 53 $ 48 $ 116 $ 98
======= ======= ======= =======
Weighted average number of shares
outstanding (thousands) 43,799 42,767 43,474 42,637
Weighted average common equivalent
shares (thousands):
Deferred awards 19 303 22 308
Stock options using average
market price 709 603 638 577
------- ------- ------- -------
Primary weighted average number of
common shares outstanding and
common equivalent shares (thousands) 44,527 43,673 44,134 43,522
======= ======= ======= =======
Primary per share amount $ 1.19 $ 1.09 $ 2.63 $ 2.25
======= ======= ======= =======
Fully Diluted:
- --------------
Net Income $ 55 $ 50 $ 122 $ 104
======= ======= ======= =======
Weighted average number of shares
outstanding (thousands) 43,799 42,767 43,474 42,637
Weighted average common equivalent
shares (thousands):
Deferred awards 19 303 22 308
Stock options using the higher
of average market price or
market price at end of period 729 617 652 598
Shares from assumed conversion of debt 5,798 5,798 5,798 5,798
------- ------- ------- -------
Fully diluted weighted average number
of common shares outstanding and
common equivalent shares (thousands) 50,345 49,485 49,946 49,341
======= ======= ======= =======
Fully diluted per share amount $ 1.09 $ 1.01 $ 2.45 $ 2.11
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
SEC form 10-Q and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 450
<ALLOWANCES> 20
<INVENTORY> 252
<CURRENT-ASSETS> 1,039
<PP&E> 2,900
<DEPRECIATION> 1,809
<TOTAL-ASSETS> 3,376
<CURRENT-LIABILITIES> 1,119
<BONDS> 1,050
<COMMON> 349
0
0
<OTHER-SE> (1,062)
<TOTAL-LIABILITY-AND-EQUITY> 3,376
<SALES> 2,465
<TOTAL-REVENUES> 2,465
<CGS> 1,872
<TOTAL-COSTS> 1,872
<OTHER-EXPENSES> 453
<LOSS-PROVISION> 6
<INTEREST-EXPENSE> 69
<INCOME-PRETAX> 65
<INCOME-TAX> 34
<INCOME-CONTINUING> 31
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 85
<NET-INCOME> 116
<EPS-PRIMARY> 2.63
<EPS-DILUTED> 2.45
</TABLE>
