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 Quarterly Period Ended June 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
July 31, 1994
43,662,236
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<TABLE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars, except share data)
<S> <C> <C> <C> <C>
NET SALES $ 852 $ 754 $ 1,529 $ 1,405
COST OF SALES 644 578 1,167 1,090
------- ------- ------- -------
Gross margin 208 176 362 315
OPERATING EXPENSES
Marketing and administrative
expenses 91 81 178 159
Science and technology expenses 17 17 33 33
Restructuring costs (Note 4) - - 89 23
Other (Note 4) 5 5 34 7
------- ------- ------- -------
Total operating expenses 113 103 334 222
------- ------- ------- -------
INCOME FROM OPERATIONS 95 73 28 93
Cost of borrowed funds (23) (22) (45) (45)
------- ------- ------- -------
INCOME (LOSS) BEFORE PROVISION FOR INCOME
TAXES 72 51 (17) 48
Provision for income taxes (Note 8) 26 19 3 26
------- ------- ------- -------
INCOME (LOSS) BEFORE EQUITY IN NET INCOME
OF AFFILIATES 46 32 (20) 22
Equity in net income (loss) of affiliates (1) 1 (2) 2
------- ------- ------- ------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGES 45 33 (22) 24
Cumulative effect of accounting changes
(Notes 5, 6, 7, and 8) - - 85 26
------- ------- ------- -------
NET INCOME $ 45 $ 33 $ 63 $ 50
======= ======= ======= =======
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Continued)
Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars, except share data)
<S> <C> <C> <C> <C>
NET INCOME PER COMMON SHARE
Primary:
Income (loss) before cumulative
effect of accounting changes $ 1.03 $ .76 $ (.49) $ .56
Cumulative effect of accounting
changes - - 1.93 .60
------- ------- ------- ------
Net income per share $ 1.03 $ .76 $ 1.44 $ 1.16
======= ======= ======= =======
Assuming full dilution:
Income (loss) before cumulative
effect of accounting changes $ .95 $ .71 $ (.35)$ .58
Cumulative effect of accounting
changes - - 1.70 .53
------- ------- ------- ------
Net income per share $ .95 $ .71 $ 1.35 $ 1.11
======= ======= ======= =======
Weighted average number of common
shares outstanding and common
equivalent shares during the
period (in millions)
Primary 44.1 43.5 44.0 43.4
Assuming full dilution 49.9 49.3 49.8 49.3
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30, December 31,
1994 1993
-------- ------------
(In millions of dollars)
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 15 $ 3
Receivables 447 324
Inventories (Note 10) 259 221
Deferred income taxes 141 136
Insurance for asbestos litigation
claims - current portion (Note 12) 175 125
Other current assets 30 18
------- -------
Total current 1,067 827
------- -------
OTHER
Goodwill (Note 3) 155 77
Investments in affiliates 59 63
Deferred income taxes 352 428
Insurance for asbestos litigation
claims (Note 12) 565 643
Other noncurrent assets 106 81
------- -------
Total other 1,237 1,292
------- -------
PLANT AND EQUIPMENT, at cost
Land 48 44
Buildings and leasehold improvements 578 559
Machinery and equipment 2,126 1,978
Construction in progress 132 88
------- -------
2,884 2,669
Less--Accumulated depreciation
(Notes 5 and 9) (1,800) (1,775)
------- -------
Net plant and equipment 1,084 894
------- -------
TOTAL ASSETS $ 3,388 $ 3,013
======= =======
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Continued)
June 30, December 31,
1994 1993
-------- ------------
(In millions of dollars)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued
liabilities (Note 4) $ 568 $ 495
Reserve for asbestos litigation
claims - current portion (Note 12) 300 275
Short-term debt (Note 3) 186 77
Long-term debt - current portion 28 29
------- -------
Total current 1,082 876
------- -------
LONG-TERM DEBT (Note 3) 1,122 898
------- -------
OTHER
Reserve for asbestos litigation
claims (Note 12) 1,248 1,385
Other employee benefits liability
(Notes 6 and 7) 386 346
Reserve for rebuilding furnaces
(Note 5) - 124
Pension plan liability 78 78
Other (Note 4) 250 175
------- -------
Total other 1,962 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
43.7 million shares at June 30, 1994,
43.2 million shares at December
31, 1993 346 315
Deficit (1,109) (1,171)
Foreign currency translation adjustments 1 5
Other (16) (18)
------- -------
Total stockholders' equity (778) (869)
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,388 $ 3,013
======= =======
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars, except share data)
<S> <C> <C> <C> <C>
NET CASH FLOW FROM OPERATIONS
Net income $ 45 $ 33 $ 63 $ 50
Reconciliation of net cash provided
by operating activities:
Noncash items:
Cumulative effect of accounting
changes - - (85) (26)
Provision for depreciation,
amortization, and rebuilding
furnaces (Notes 5 and 9) 28 21 55 57
Provision for deferred income taxes 7 - 21 2
Other 1 2 5 5
(Increase) decrease in receivables (46) (51) (80) (86)
(Increase) decrease in inventories 24 23 (15) (6)
Increase (decrease) in accounts payable
and accrued liabilities (29) (8) 7 64
Proceeds from insurance for asbestos
litigation claims 14 89 28 167
Payments for asbestos litigation claims (39) (90) (112) (197)
Increase (decrease) in accrued income
taxes 15 (5) (10) (9)
Other (26) (2) 42 9
------- ------- ------- -------
Net cash flow from operations (6) 12 (81) 30
------- ------- ------- -------
NET CASH FLOW FROM INVESTING
Additions to plant and equipment (64) (43) (104) (65)
Investment in subsidiaries, net of
cash acquired (Note 3) (107) - (107) -
Other 1 (1) 2 1
------- ------- ------- -------
Net cash flow from investing (170) (44) (209) (64)
------- ------- ------- -------
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
PAGE
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued)
Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions of dollars, except share data)
<S> <C> <C> <C> <C>
NET CASH FLOW FROM FINANCING
Net additions to long-term credit
facilities $ 129 $ 20 $ 223 $ 20
Other reductions to long-term debt (6) (4) (26) (7)
Net increase in short-term debt
(Note 3) 60 14 101 14
Other 3 3 4 7
------- ------- ------- -------
Net cash flow from financing 186 33 302 34
------- ------- ------- -------
Net increase in cash and cash
equivalents 10 1 12 -
Cash and cash equivalents at
beginning of period 5 1 3 2
------- ------- ------- -------
Cash and cash equivalents at end
of period $ 15 $ 2 $ 15 $ 2
======= ======= ======= =======
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SEGMENTS Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
BUSINESS SEGMENTS: (In millions of dollars)
<S> <C> <C> <C> <C>
NET SALES
Building Products $ 572 $ 496 $ 997 $ 907
Industrial Materials 280 258 532 498
------- ------- ------- -------
852 754 1,529 1,405
------- ------- ------- -------
Intersegment sales
Building Products - - - -
Industrial Materials 28 23 50 44
Eliminations (28) (23) (50) (44)
------- ------- ------- -------
- - - -
------- ------- ------- -------
Consolidated net sales $ 852 $ 754 $ 1,529 $ 1,405
======= ======= ======= =======
INCOME FROM OPERATIONS
Building Products 68 46 25 64
Industrial Materials 37 35 42 40
General corporate expense (10) (8) (39) (11)
------- ------- ------- -------
Income from operations 95 73 28 93
------- ------- ------- -------
Cost of borrowed funds (23) (22) (45) (45)
------- ------- ------- -------
Income (loss) before provision
for income taxes $ 72 $ 51 $ (17) $ 48
======= ======= ======= =======
</TABLE>
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<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(1) SEGMENTS (Continued) Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
GEOGRAPHIC SEGMENTS: (In millions of dollars)
<S> <C> <C> <C> <C>
NET SALES
United States $ 660 $ 576 $ 1,190 $ 1,059
Europe and other 134 128 243 253
Canada 58 50 96 93
------- ------- ------- -------
852 754 1,529 1,405
------- ------- ------- -------
Intersegment sales
United States 9 11 19 23
Europe and other 7 2 15 3
Canada 28 14 47 26
Eliminations (44) (27) (81) (52)
------- ------- ------- -------
- - - -
------- ------- ------- -------
Consolidated net sales $ 852 $ 754 $ 1,529 $ 1,405
======= ======= ======= =======
INCOME FROM OPERATIONS
United States $ 86 $ 75 $ 79 $ 117
Europe and other 3 4 (7) (14)
Canada 16 2 (5) 1
General corporate expense (10) (8) (39) (11)
------- ------- ------- -------
Income from operations 95 73 28 93
Cost of borrowed funds (23) (22) (45) (45)
------- ------- ------- -------
Income (loss) before provision
for income taxes $ 72 $ 51 $ (17) $ 48
======= ======= ======= =======
</TABLE>
During the first quarter of 1994, the Company recorded a $117 million pretax
charge for productivity initiatives and other actions (Note 4). 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 4).
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, including possible subsequent contingent cash
payments, was $44 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. Included in the $44 million purchase
price was a $6 million cash payment to acquire the cash of UCI. The
fair market value of the Company's shares on the date of acquisition
was $27 million. Pursuant to the terms of the purchase agreement,
additional cash consideration may be paid to UCI to the extent that
the Company's stock has not achieved a certain market value for ten
days during a specified period following the date of acquisition.
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 5.125% at June 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 purchase price allocations were based on preliminary estimates of
fair market value and are subject to revision. The estimated fair
value of assets acquired from UCI, including goodwill of $29 million,
was $68 million, and liabilities assumed, including $14 million in
debt, totalled $24 million. The estimated fair value of assets
acquired from Pilkington, including goodwill of $51 million, was $174
million, and liabilities assumed, including $7 million in debt,
totalled $64 million. Goodwill is being amortized over 40 years 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 six months ended June 30, 1994 or
1993.
(4) 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.
(5) 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 six months ended June 30, 1993.
PAGE
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-12-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(6) 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.
(7) 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.)
(8) 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.
The reconciliation between the U.S. federal statutory rate and the
Company's consolidated effective income tax rate is:
<TABLE>
Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
U. S. federal statutory rate 35% 34% (35)% 34%
Operating losses of foreign
subsidiaries (3) (1) 63 21
Difference between foreign
tax rates and U.S. statutory
rate 2 2 4 1
Provision for taxes on
undistributed earnings of
foreign subsidiaries - - - (6)
State and local income taxes 3 3 2 5
Adjustment to valuation allowance (7) - (28) -
Other 6 - 11 -
------- ------- ------- -------
Effective tax rate 36% 38% 17% 55%
======= ======= ======= =======
</TABLE>
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OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(9) DEPRECIATION OF PLANT AND EQUIPMENT
Effective April 1, 1993, the Company extended the estimated useful lives
of certain categories of plant and equipment. The effect of this
change in estimate was to reduce depreciation expense for the six
months ended June 30, 1994 by $5 million compared to the prior year's
first six months and to increase income before cumulative effect of
accounting changes by $3 million, or $.07 per share.
(10) INVENTORIES
Inventories are summarized as follows:
<TABLE>
June 30, December 31,
1994 1993
-------- ------------
(In millions of dollars)
<S> <C> <C>
Finished goods $ 236 $ 195
Materials and supplies 117 117
------- -------
353 312
------- -------
Less: reduction to LIFO basis (94) (91)
------- -------
$ 259 $ 221
======= =======
</TABLE>
Approximately $104 million and $87 million of net inventories were valued
using the LIFO method at June 30, 1994 and December 31, 1993,
respectively.
(11) CONSOLIDATED STATEMENT OF CASH FLOWS
Cash payments, net of refunds, for income taxes and cost of borrowed
funds are summarized as follows:
<TABLE>
Quarter Ended Six Months Ended
June 30, June 30,
------------- ---------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income taxes $ 1 $ 19 $ (6) $ 27
Cost of borrowed funds 36 36 43 44
</TABLE>
Supplemental Disclosure of Non-cash Investing Activities
During the second quarter of 1994, the Company acquired UC Industries,
Inc. for $44 million, including possible subsequent contingent cash
payments. This acquisition was consummated by the exchange of 855,556
shares of the Company's common stock for all of the capital stock of
UC Industries.
Please see Note 3 to the Consolidated Financial Statements for further
information on this acquisition.
PAGE
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-14-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(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 June 30, 1994, approximately 98,300 asbestos personal injury
claims were pending against the Company, 5,300 of which were
received in the second quarter of 1994. The Company received
approximately 31,700 such claims in 1993, and 26,600 in 1992.
Through June 30, 1994, the Company had resolved (by settlement or
otherwise) approximately 131,100 asbestos personal injury claims.
During 1992, 1993 and the first two quarters of 1994, the Company
resolved approximately 58,500 such claims and incurred total
indemnity payments of $560 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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-15-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Insurance
As of June 30, 1994, the Company had approximately $401 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 $48 million (out of the $401 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, and the arbitration agreement contemplates a
schedule that would result in resolution (subject to appeal) in
1994. 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.
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:
<TABLE>
Asbestos Litigation Claims
--------------------------
June 30, December 31,
1994 1993
-------- ------------
(In millions of dollars)
<S> <C> <C>
Reserve for asbestos litigation claims
--------------------------------------
Current $ 300 $ 275
Other 1,248 1,385
------- -------
Total Reserve 1,548 1,660
Insurance for asbestos litigation claims
----------------------------------------
Current 175 125
Other 565 643
------- -------
Total Insurance 740 768
Net Asbestos Liability $ 808 $ 892
======= =======
</TABLE>
PAGE
<PAGE>
-16-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
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 10,700 new claims were received
during the first two 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.
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 $401 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 $808 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>
-17-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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>
-18-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the second quarter of 1994 was $45 million, or $.95 per share,
an increase of 34% compared to net income of $33 million, or $.71 per share,
in the second quarter of 1993. (All per share information in this Item 2 is
on a fully diluted basis.) Net sales were $852 million, a 13% increase
compared to $754 million a year ago.
For the first six months of 1994, Owens-Corning reported net income before
special items of $63 million, or $1.35 per share, compared to net income of
$47 million, or $1.04 per share, for the first six months of 1993. The 1994
special items include 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" (SFAS No. 106), 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" (SFAS No. 112). The 1993 special
items included an after-tax credit of $26 million, or $.54 per share, for the
cumulative effect of adopting the new 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 4, 5, 6, 7 and 8 to the Consolidated
Financial Statements.
Net sales were $1.529 billion in the first six months of 1994, compared to
$1.405 billion in the year earlier period. Gross margin for the second
quarter of 1994 increased to 24%, compared to 23% for the prior year's
period, reflecting improved pricing in many of the Company's worldwide
markets.
In North America, the Building Products segment benefitted from a 30%
increase in insulation sales compared to the second quarter of 1993. In
Europe, insulation sales continued to exceed the Company's manufacturing
capacity in the region. In order to meet the demand in Europe, the Company
acquired the United Kingdom based insulation business and the Kitsons
distribution business of Pilkington plc (Pilkington) in June 1994. The
Company is also adding a second production line at its insulation plant in
Vise, Belgium. The purchase price of Pilkington was $110 million and was
financed with borrowings from the Company's newly established $110 million
short-term bank credit facility. In addition, the Company acquired UC
Industries (UCI), a privately held United States producer of pink extruded
polystyrene foam products for $44 million, consummated by the exchange of
855,556 shares of the Company's common stock for all the capital stock of
UCI. This purchase extends the Company's line of building products. During
the second quarter of 1994, the Company also established a joint venture to
manufacture insulation products in Guangzhou, China. Please see note 3 to
the Consolidated Financial Statements.
In the composites business, North American sales grew 10%, driven by the
automotive sector and an increase in activity across a broad range of the
Company's industrial markets. The Company activated its Jackson, Tennessee
plant in April 1994 to assist in meeting the demand for reinforcements. The
Company continues to import products from other worldwide operations, at an
added cost, as North American demand for the Company's reinforcements exceeds
capacity in its North American facilities. Volume held steady and pricing
stabilized in the Company's European composites business late in the quarter.
During the second quarter 1994, the Company dedicated a new joint-venture
manufacturing plant for glass-reinforced plastic pipe in Mochau, Germany.
The Company's cost of borrowed funds for the second quarter of 1994 was $1
million higher than during the corresponding quarter of the prior year
because of increased borrowing and higher interest rates during the quarter
compared to a year ago.
PAGE
<PAGE>
-19-
LIQUIDITY, CAPITAL RESOURCES AND OTHER RELATED MATTERS
Cash flow from operations was a negative $6 million for the second quarter,
compared to $12 million for the second quarter of 1993. The decrease in cash
flow is primarily due to a $24 million increase in payments (net of insurance
proceeds) for uninsured asbestos litigation claims and increased working
capital needs compared to the prior year's quarter. Net inventories
increased from $221 million at year-end 1993 to $259 million at the end of
the second quarter primarily due to anticipated seasonal demand for building
products and the purchase of inventories from the above mentioned
acquisitions. Total receivables at June 30, 1994 were $447 million, $123
million higher than at year-end 1993 because of acquisitions and high sales
levels for building products worldwide and composites in North America in the
second quarter.
At June 30, 1994, the Company's working capital was a negative $15 million
and its current ratio was .99, compared to a negative $49 million and .94,
respectively, at December 31, 1993.
Total borrowings at June 30, 1994 were $332 million higher than at year-end
1993, primarily due to the Pilkington acquisition, capital expenditures, and
asbestos payments (net of tax). In connection with the 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 addition, effective July 18, 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. In July 1994, the Company 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
(69 million U.S. dollars) and expires in October 1997. As of July 31, 1994,
the Company had unused lines of credit of $186 million available under long-
term bank loan facilities and an additional $96 million under short-term
facilities, compared to $376 million and $64 million, respectively, at year-
end 1993. The decline in unused available lines of credit reflects the
Company's higher borrowings and an increase of outstanding letters of credit,
supporting appeals from asbestos trials, counted against the Company's long-
term U.S. loan facility.
Capital spending for property, plant and equipment, excluding acquisitions,
was $64 million during the second quarter. At the end of the quarter,
approved capital projects, including furnace rebuilds, were $125 million.
The Company expects that funding for these expenditures will be from the
Company's operations and external sources as required.
Payments for asbestos litigation claims during the second quarter 1994,
including $15 million in defense costs, were $39 million. Proceeds from
insurance were $14 million. In the second quarter 1994, the Company received
about 5,300 new asbestos personal injury cases and closed approximately 5,900
cases. Over the next twelve months, the Company's payments for asbestos
litigation claims, including defense costs, are expected to be approximately
$300 million and proceeds from insurance of $175 million are expected to be
available to cover these costs. 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.
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 second quarter of 1994, the Company was designated as
a PRP in such federal, state, local or private proceedings for no additional
sites. At June 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
PAGE
<PAGE>
-20-
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 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>
-21-
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.
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 June 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 June
30, 1994 by the issuance or modification of any other class of
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a) During the quarter ended June 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 June 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.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company's annual meeting of stockholders was held April 21, 1994.
(c) The matters voted upon at the meeting, and the votes cast with respect to
each, were:
1. Election of three directors for a term expiring in 1997: Norman P.
Blake - 35,647,432 shares cast for election and 458,310 shares
withheld; Jon M. Huntsman, Jr. - 35,510,400 shares cast for election
and 595,342 shares withheld; and W. Ann Reynolds - 35,567,309 shares
cast for election and 538,433 shares withheld.
2. Approval of the action of the Board of Directors in selecting Arthur
Andersen & Co. as independent public accountants for the Company for
the year 1994: 35,453,061 shares cast for the proposal; 437,958
shares cast against; and 214,723 shares abstained.
There were no broker nonvotes.
PAGE
<PAGE>
-22-
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 June 30, 1994.
PAGE
<PAGE>
-23-
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 August 12, 1994 By /s/David W. Devonshire
--------------- -------------------------------
David W. Devonshire
Senior Vice President and Chief
Financial Officer
Date August 12, 1994 /s/Domenico Cecere
--------------- -------------------------------
Domenico Cecere
Vice President and Controller
PAGE
<PAGE>
-24-
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 (filed herewith).
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).
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).
PAGE
<PAGE>
-25-
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).
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).
(99) Additional Exhibits.
Subsidiaries of Owens-Corning Fiberglas Corporation, as
amended (filed herewith).
EXHIBIT 10
AMENDMENT NO. 1
dated as of July 18, 1994
to
CREDIT AGREEMENT
dated as of November 2, 1993
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of
July 18, 1994, among OWENS-CORNING FIBERGLAS CORPORATION, a
Delaware corporation (the "Borrower"), the banks listed on the
signature pages hereof (the "Banks"), and CREDIT SUISSE, as Agent
(the "Agent") (with capitalized terms used herein and not
otherwise defined having the meaning ascribed thereto in the
Credit Agreement hereinafter referred to),
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks and the Agent have
entered into a Credit Agreement dated as of November 2, 1993 (the
"Credit Agreement");
WHEREAS, the Borrower has requested, and the Banks and
the Agent have agreed to, the amendments to the Credit Agreement
more fully set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Borrower, the
Banks and the Agent agree as follows:
1. Amendments. Upon and after this Amendment becomes
effective, the Credit Agreement shall be amended as follows:
(a) Section 1.01(a) shall be amended (i) by deleting
the words "on the Agreement Date" and (ii) by deleting
"$375,000,000" and inserting in lieu thereof "$475,000,000".
(b) Section 1.02(a) shall be amended by deleting
"$275,000,000" and inserting "$375,000,000" in lieu thereof.
(c) Section 1.07(b) shall be amended by deleting
"$50,000,000" in each instance where it appears and
inserting in lieu thereof "$100,000,000".
(d) Section 4.06 shall be amended by inserting the
following after the end of clause (e) thereof and prior to
the word "and":
", (f) Debt, designated by the Borrower from time to
time, of the Borrower or of any Subsidiary in an
aggregate amount not to exceed $110,000,000 in
connection with and for the purpose of financing the
acquisition or continued ownership by the Borrower or
any Subsidiary of Pilkington Insulation Limited,
Kitsons Insulation Products Limited and certain real
property related thereto".
(e) Section 4.06 shall be further amended by re-
lettering the last clause thereof, presently clause (f), as
clause (g).
(f) The Credit Agreement shall be further amended by
replacing all references therein to Section 4.06(f) with
references to 4.06(g).
(g) Section 4.08 shall be amended by inserting the
following after the end of clause (h) thereof and prior to
the word "and":
", (i) Investments made by the Borrower or any
Subsidiary in Pilkington Insulation Limited and Kitsons
Insulation Products Limited, each thereafter a Wholly
Owned Subsidiary of Owens-Corning U.K. Limited, (j)
Investments made by the Borrower, to the extent that
consideration therefor consists of the Borrower's
common stock".
(h) Section 4.08 shall be further amended by re-
lettering the last clause thereof, presently clause (i), as
clause (k).
(i) The Credit Agreement shall be further amended by
replacing all references therein to Section 4.08(i) with
references to 4.08(k).
(j) Section 4.10 shall be amended by inserting the
following after the end of clause (f) thereof and prior to
the word "and":
", (g) the Guaranty by the Borrower, the obligations
under which are subordinate and junior in right of
payment to the Debt of the Borrower hereunder,
providing for Guarantee Payments as defined and
substantially as described in Schedule 4.10(g), with
respect to certain obligations (not exceeding
$230,000,000 in aggregate amount) of a Delaware limited
liability company (the "LLC") in which all of the
limited liability interests (other than certain
preferred interests (the "MIPS") ordinarily having no
voting or management rights) are owned directly or
indirectly by the Borrower, (h) the Guaranty by the
Borrower of the obligations of the Industrial
Development Board of the City of Jackson, Tennessee
(the "Board"), pursuant to the terms of the Undertaking
Agreement, dated as of December 29, 1993, from the
Borrower to each of The Prudential Insurance Company of
America, BOT Financial Corporation and Morgan, Keegan &
Company, Inc. of (A) the principal of the Notes (as
defined in Appendix I to the Note Purchase Agreement,
dated as of December 29, 1993, between the Board and
The Prudential Insurance Company of America ("Appendix
I")) in a maximum aggregate amount of $40,000,000 and
(B) interest and Reinvestment Premium (as defined in
said Appendix I), in each case in accordance with the
terms and provisions of such Notes as in effect on the
Amendment Effective Date of Amendment 1 to the Credit
Agreement,".
(k) Section 4.10 shall be further amended by re-
lettering the last clause thereof, presently clause (g), as
clause (i).
(l) The Credit Agreement shall be further amended by
replacing all references therein to Section 4.10(g) with
references to 4.10(i).
(m) Section 10.01 shall be amended by amending the
definition of "Cash EBIT" to read in its entirety as
follows:
"'Cash EBIT' means, for any period, EBIT for such
period plus (a) any amount deducted in the computation
of EBIT for such period for (i) depreciation and
amortization expense, (ii) additions to reserves
accrued in connection with furnace rebuilding, (iii)
additions to reserves with respect to actions, suits or
proceedings against the Borrower or any Subsidiary with
respect to claims arising out of the use of or exposure
to asbestos products and (iv) additions to reserves
relating to the restructuring charge accrued by the
Borrower and its Subsidiaries during March 1994 minus
(b) any amount added in the computation of EBIT for
such period for reductions in reserves referred to in
clause (a)(ii) or (iii) minus (c) to the extent not
deducted or added, as appropriate, in the computation
of EBIT for such period, the net after-tax amount of
(i) actual cash disbursements during such period made
with respect to claims arising out of the use of or
exposure to asbestos products minus (ii) actual cash
payments (including under insurance policies) received
during such period with respect to claims arising out
of the use of or exposure to asbestos products minus
(d) to the extent not deducted in the computation of
EBIT for such period, the amount of actual cash
disbursements to the extent that such payments are
charged against the restructuring reserves referred to
in clause (a)(iv)."
(n) Section 10.01 shall be further amended by
inserting the following in the definition of "Permitted
Subordinated Refinancing Debt" after the words "so repaid or
repurchased" and before the period:
"; it being understood that, Permitted Subordinated
Refinancing Debt does not include any subordinated Debt
of the Borrower that is incurred after the conversion
into equity of existing Permitted Borrower Subordinated
Debt, notwithstanding that the amount of such
subordinated Debt, when issued, does not exceed the
amount of such Permitted Borrower Subordinated Debt
previously converted".
(o) The Credit Agreement shall be further amended by
deleting Annex A thereto and replacing it with Annex A
hereto.
(p) Schedule 4.06(b) shall be amended by amending
Section 1(b)(6) thereof to read in its entirety as follows:
"(6) for all principal of and interest on all loans and
other extensions of credit under any lines of credit,
credit agreements or promissory notes from a bank or
other financial institution (including, without
limitation, any letters of credit, bankers'
acceptances, performance bonds and other credit
facilities under such borrowing arrangements), and all
fees, expenses, reimbursements, indemnities, premiums
and other amounts payable under such borrowing
arrangements;".
(q) The Credit Agreement shall be further amended by
inserting after Schedule 4.10, a new Schedule 4.10(g), which
Schedule is attached to this Amendment as Annex B.
(r) The Credit Agreement shall be further amended by
inserting in place of Exhibits A-1 and A-2 thereof, the
attached replacement Exhibits A-1 and A-2.
2. Amendment Effective Date; Conditions to Borrowing
Increased Commitment Amounts.
(a) This Amendment shall become effective as of the
date first written above, but shall not become effective as of
such date until this Amendment has been executed by the Borrower,
the Banks and the Agent, and the Agent shall have received for
the account of the Banks whose Commitments have been increased
the upfront fees payable pursuant to the Letter Agreement dated
June 22, 1994.
(b) In the case of the initial Credit Extension which
is a Utilization of the Increased Commitment Amounts (hereinafter
defined), the obligation of each Bank to make its Loan on the
occasion of such Credit Extension and the obligation of the
Issuing Bank to issue a Letter of Credit on such occasion is
subject to the fulfillment of each of the conditions listed in
the attached Annex C, in addition to the conditions applicable
thereto pursuant to Section 2.02 of the Credit Agreement. As
used herein, the term "Utilization of the Increased Commitment
Amounts" means (i) a Credit Extension constituting the issuance
of a Letter of Credit which causes the aggregate amount available
to be drawn under all outstanding Letters of Credit to exceed the
limitation thereon contained in the proviso to the first sentence
of Section 1.02(a) of the Credit Agreement without giving effect
to the provisions of Section 1(b) of this Amendment, or (ii) a
Credit Extension constituting a Loan by a Bank which would cause
the aggregate unpaid principal amount of all Loans by such Bank
to exceed the limitation thereon contained in Section 1.01(a) of
the Credit Agreement, without giving effect to the provisions of
Section 1(a) of this Amendment.
3. Representations and Warranties. The Borrower
represents and warrants to the Agent and the Banks as follows:
(a) Power; Authorization. The Borrower has the
corporate power, and has taken all necessary corporate
action to authorize it, to execute, deliver and perform in
accordance with its terms this Amendment and to perform in
accordance with its terms the Credit Agreement as amended by
this Amendment. This Amendment has been duly executed and
delivered by the Borrower and is, and the Credit Agreement
as amended by this Amendment is, a legal, valid and binding
obligation of the Borrower enforceable in accordance with
its terms.
(b) Required Approvals; Compliance with Law, etc. The
execution, delivery and performance in accordance with its
terms of this Amendment, and the performance in accordance
with its terms of the Credit Agreement as amended by this
Amendment, do not and will not (i) require any Governmental
Approval or any consent or approval of the stockholders of
the Borrower or of any Subsidiary other than consents and
approvals that have been obtained and are listed on Schedule
3.02 to the Credit Agreement, (ii) violate or conflict with,
result in a breach of, or constitute a default under, (A)
any Contract to which the Borrower or any Subsidiary is a
party or by which any of them or any of their respective
properties may be bound or (B) any Applicable Law or (iii)
result in or require the creation of any Lien upon any
assets of the Borrower or any Consolidated Subsidiary except
for Liens, if any, in favor of the Agent and the Banks
arising under Sections 1.12 and 8.06 of the Credit
Agreement.
4. Survival. Each of the foregoing representations
and warranties shall be made at and as of the date this Amendment
becomes effective. Each of the representations and warranties
made under the Credit Agreement as amended by this Amendment (and
including those made herein) shall survive to the extent provided
in the Credit Agreement and not be waived by the execution and
delivery of this Amendment, or any investigation by the Agent or
the Banks or any of them.
5. Governing Law. This Amendment shall be construed
in accordance with and governed by the law of the State of New
York (without giving effect to its choice of laws principles).
6. Counterparts. This Amendment may be signed in any
number of counterparts, each of which shall be deemed to be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
7. Reference to Agreement. From and after the
Amendment Effective Date, each reference in the Credit Agreement
to "this Agreement", "hereof", "hereunder" or words of like
import, and all references to the Credit Agreement in any and all
agreements, instruments, documents, notes, certificates and other
writings of every kind and nature shall be deemed to mean the
Credit Agreement as modified and amended by this Amendment.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective
authorized officers as of the date first above written.
OWENS-CORNING FIBERGLAS CORPORATION
By _______________________________
Name:
Title:
By _______________________________
Name:
Title:
CREDIT SUISSE, as Agent and as a
Bank
By ________________________________
Name:
Title:
ABN AMRO BANK, N.V.
By ________________________________
Name:
Title:
THE BANK OF NEW YORK
By ________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By ________________________________
Name:
Title:
BARCLAYS BANK PLC
By ________________________________
Name:
Title:
CHEMICAL BANK
By _______________________________
Name:
Title:
CITIBANK, N.A.
By _______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By _______________________________
Name:
Title:
THE FUJI BANK, LIMITED
By ______________________________
Name:
Title:
MELLON BANK, N.A.
By ______________________________
Name:
Title:
THE MITSUBISHI BANK, LTD.
(CHICAGO BRANCH)
By _____________________________
Name:
Title:
THE NORTHERN TRUST COMPANY
By _____________________________
Name:
Title:
ROYAL BANK OF CANADA
By ____________________________
Name:
Title:
THE TORONTO-DOMINION BANK
By ___________________________
Name:
Title:
TRUST COMPANY BANK
By __________________________
Name:
Title:
By __________________________
Name:
Title:
<PAGE>
KREDIETBANK, N.V.
By __________________________
Name:
Title:<PAGE>
Annex A
Banks, Lending Offices
and Notice Addresses Commitment
CREDIT SUISSE $53,666,666.66
Domestic Lending Office:
Credit Suisse
Cayman Island Branch
c/o Credit Suisse
New York Branch
Tower 49
12 East 49th Street
New York, New York 10017
LIBOR Lending Office:
Credit Suisse
Cayman Island Branch
c/o Credit Suisse
New York Branch
Tower 49
12 East 49th Street
New York, New York 10017
Notice Address:
Credit Suisse
Tower 49
12 East 49th Street
New York, New York 10017
Telex No.: 420149 CRESWIS
Telecopy No.: (212) 238-5073
Telephone No.:(212) 238-5082
Attention: Barry Zamore
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
THE BANK OF NEW YORK $41,666,666.67
Domestic Lending Office:
The Bank of New York
One Wall Street
New York, New York 10286
Eurodollar Lending Office:
The Bank of New York
One Wall Street
New York, New York 10286
Notice Address:
One Wall Street, 22nd Floor
New York, New York 10286
Telex No.: 62763UW
Telecopy No.: (212) 635-6397
Telephone No.: (212) 635-6725
Attention: Susan Baratta/Madlyn Myrick
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
THE BANK OF NOVA SCOTIA $44,333,333.33
Domestic Lending Office:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Eurodollar Lending Office:
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Notice Address:
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Telex No.: 542319 (Scotia A&L)
Telecopy No.: (404) 888-8988
Telephone No.: (404) 877-8552
Attention: Phyllis Walker
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
BARCLAYS BANK PLC $19,000,000
Domestic Lending Office:
Barclays Bank plc
75 Wall Street
New York, New York 10265
Eurodollar Lending Office:
Barclays Bank plc
75 Wall Street
New York, New York 10265
Notice Address:
222 Broadway, 12th Floor
New York, New York 10038
Telex No.: 126946
Telecopy No.: (212) 412-4090
Telephone No.: (212) 412-5876
Attention: Nitin Sangle
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
ROYAL BANK OF CANADA $44,333,333.33
Domestic Lending Office:
Royal Bank of Canada
Pierrepont Plaza
300 Cadman Plaza, 15th Floor
Brooklyn, New York 11201-2701
Eurodollar Lending Office:
Royal Bank of Canada
Pierrepont Plaza
300 Cadman Plaza, 15th Floor
Brooklyn, New York 11201-2701
Notice Address:
Royal Bank of Canada
Pierrepont Plaza
300 Cadman Plaza, 15th Floor
Brooklyn, New York 11201-2701
Telex No.: 62519 ROYBAN or 420464 RBOC UI
Telecopy No.: (718) 522-6292
Telephone No.: (212) 858-7183
Attention: Elizabeth Gonzalez
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
CHEMICAL BANK $44,333,333.33
Domestic Lending Office:
Chemical Bank
270 Park Avenue
New York, New York 10017
Eurodollar Lending Office:
Chemical Bank
270 Park Avenue
New York, New York 10017
Notice Address:
270 Park Avenue
New York, New York 10017
Telex No.:
Telecopy No.: (212) 682-8937
Telephone No.: (212) 270-4812
Attention: Linda Hill
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
ABN AMRO BANK, N.V. $12,666,666.67
Domestic Lending Office:
ABN AMRO Bank,
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, Pennsylvania 15222
Eurodollar Lending Office:
ABN AMRO Bank,
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, Pennsylvania 15222
Notice Address:
One PPG Place, Suite 2950
Pittsburgh, Pennsylvania 15222
Telex No.: 199162
Telecopy No.: (412) 566-2266
Telephone No.: (412) 566-2250
Attention: Michelle Guza/Monica Meis
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
CITIBANK, N.A. $25,333,333.33
Domestic Lending Office:
Citibank, N.A.
399 Park Avenue
New York, New York
Eurodollar Lending Office:
Citibank, N.A.
399 Park Avenue
New York, New York
Notice Address:
200 South Wacker Drive
31st Floor
Chicago, Illinois 60606
Telex No.:
Telecopy No.: (312) 993-6706
Telephone No.: (312) 993-3094
Attention: Steven Niceforo
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
THE FIRST NATIONAL BANK OF CHICAGO $25,333,333.33
Domestic Lending Office:
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
Eurodollar Lending Office:
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
Notice Address:
One First National Plaza
Suite 0634
Chicago, IL 60670
Telex No.: 4330253 FNBCUI
Telecopy No.: (312) 732-4840
Telephone No.: (312) 732-7659/6294
Attention: Ernest Mesidera/Charlene Hicks
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
THE FUJI BANK, LIMITED $31,666,666.67
Domestic Lending Office:
The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Eurodollar Lending Office:
The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Notice Address:
The Fuji Bank, Limited
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Telex No.: 253114 FUJI CGO
Telecopy No.: (312) 621-0539/419-3677
Telephone No.: (312) 621-0538
Attention: Cely Tanghal
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
MELLON BANK, N.A. $29,000,000
Domestic Lending Office:
Mellon Bank, N.A.
Three Mellon Bank Center
Pittsburgh, PA 15259
Eurodollar Lending Office:
Mellon Bank, N.A.
Three Mellon Bank Center
Pittsburgh, PA 15259
Notice Address:
Mellon Bank, N.A.
Three Mellon Bank Center
Pittsburgh, PA 15259
Telex No.: 199103 or 199151
Telecopy No.: (412) 234-5049/236-2027
Telephone No.: (412) 234-4749
Attention: Rose Covel
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
THE MITSUBISHI BANK, LTD. $19,000,000
(CHICAGO BRANCH)
Domestic Lending Office:
115 S. LaSalle St., Suite 2100
Chicago, IL 60603
Eurodollar Lending Office:
115 S. LaSalle St., Suite 2100
Chicago, IL 60603
Notice Address:
The Mitsubishi Bank, Ltd.
(Chicago Branch)
115 S. LaSalle St., Suite 2100
Chicago, IL 60603
Telex No.: 255267 or 284339 BISHIBANK CGO
Telecopy No.: (312) 263-2555
Telephone No.: (312) 269-0473
Attention: Manager, Loan Administration
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
THE NORTHERN TRUST COMPANY $25,333,333.33
Domestic Lending Office:
The Northern Trust Co.
50 S. LaSalle St.
Chicago, IL 60675
Eurodollar Lending Office:
The Northern Trust Co.
50 S. LaSalle St.
Chicago, IL 60675
Notice Address:
The Northern Trust Company
50 S. LaSalle Street
Chicago, IL 60675
Telex No.: 254419 or 270514 NORTRUST CGO
Telecopy No.: (312) 444-3508
Telephone No.: (312) 444-4567
Attention: Paul Beierwaltes
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
THE TORONTO-DOMINION BANK $31,666,666.67
Domestic Lending Office:
The Toronto-Dominion Bank
909 Fannin, Suite 1700
Houston, TX 77010
Eurodollar Lending Office:
The Toronto-Dominion Bank
909 Fannin, Suite 1700
Houston, TX 77010
Notice Address:
The Toronto-Dominion Bank
909 Fannin, Suite 1700
Houston, TX 77010
Telex No.: 177047 TORDOM FXNY
Telecopy No.: (713) 951-9921
Telephone No.: (713) 653-8281
Attention: Frederic B. Hawley
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
TRUST COMPANY BANK $15,000,000
Domestic Lending Office:
Trust Company Bank
25 Park Place
Atlanta, GA 30303
Eurodollar Lending Office:
Trust Company Bank
25 Park Place
Atlanta, GA 30303
Notice Address:
Trust Company Bank
25 Park Place
Atlanta, GA 30303
Telex No.: 542210
Telecopy No.: (404) 588-8505
Telephone No.: (404) 588-7077
Attention: Dereka G. Binns
<PAGE>
Banks, Lending Offices
and Notice Addresses Commitment
KREDIETBANK $12,666,666.67
Domestic Lending Office:
Kredietbank
125 West 55th Street
New York, New York 10019
Eurodollar Lending Office:
Kredietbank
125 West 55th Street
New York, New York 10019
Notice Address:
Kredietbank
125 West 55th Street
New York, New York 10019
Telex No.:
Telecopy No.: (212) 956-5580
Telephone No.: (212) 541-0727
Attention: John Thierfelder
<PAGE>
Annex B
Schedule 4.10(g)
DESCRIPTION OF MIPS GUARANTY
Owens-Corning Fiberglas Corporation (the "Guarantor")
will irrevocably and unconditionally agree, to the extent set
forth below, to pay in full to the holders of the MIPS (as
defined in Section 4.10), or otherwise fulfill obligations to
such holders with respect to, the below-defined Guarantee
Payments (except to the extent paid by the LLC (as defined in
Section 4.10, hereinafter the "Company")), as and when due,
regardless of any defense, right of set-off or counterclaim which
the Company may have or assert. The following payments and
obligations, to the extent not paid or fulfilled, as the case may
be, by the Company (the "Guarantee Payments") will be subject to
the guarantee (without duplication): (i) any accumulated arrears
and accruals of unpaid dividends which have been theretofore
declared on the MIPS of moneys legally available therefor, (ii)
the redemption price (including all accumulated arrears and
accruals of unpaid dividends) payable with respect to MIPS called
for redemption by the Company as an optional redemption or
otherwise out of funds available to the Company, (iii) the lesser
of (a) the aggregate of the liquidation preference and all
accumulated arrears and accruals of unpaid dividends (whether or
not declared) to the date of payment and (b) the amount of
remaining assets of the Company, (iv) conversion or exchange of
the MIPS for shares of the capital stock of the Guarantor and (v)
any Additional Amounts payable by the Company. The Guarantor's
obligation to make a Guarantee Payment that constitutes a payment
may be satisfied by direct payment of the required amounts by the
Guarantor to the holders of MIPS or by causing the Company to pay
such amounts to such holders. The Guarantor's obligation to make
a Guarantee Payment that constitutes a conversion may be
satisfied by the issuance of shares of the capital stock of the
Guarantor to the holders of MIPS. For purposes of this
paragraph, "Additional Amounts" means any amounts to be paid by
the Guarantor so that the net amounts received by the holders of
the MIPS, after any withholding or deduction of taxes, duties,
assessments or governmental charges required by law, will equal
the amount which would have been receivable in respect of the
MIPS in the absence of such withholding or deduction, except that
no such Additional Amounts will be payable to a holder of MIPS
(or a third party on his behalf) with respect to any of the MIPS
(a) if such holder is liable for such taxes, duties, assessments
or governmental charges in respect of the MIPS by reason of such
holder's having some connection with the United States, any State
thereof or any other jurisdiction through which or from which
such payment is made, other than being a holder of the MIPS, or
(b) if the Company or the Guarantor has notified such holder of
the obligation to withhold taxes and requested but not received
from such holder a declaration of non-residence or other similar
claim for exemption, and such withholding or deduction would not
have been required had such declaration or similar claim been
received.
<PAGE>
Annex C
CONDITIONS TO UTILIZATION OF INCREASED COMMITMENT AMOUNTS
(1) Each Bank shall have received a duly prepared and executed
replacement Domestic Note and replacement LIBOR Note, reflecting
in each case the Commitment of such Bank as reflected on said
revised Annex A;
(2) The Agent shall have received, with sufficient copies for
each Bank, each of the following, in form and substance
satisfactory to the Agent:
(a) a certificate of the Secretary or an Assistant
Secretary of the Borrower, dated the date of such Credit
Extension, substantially in the form of Annex C-1 attached
hereto, to which shall be attached the copies of the
resolutions referred to in such certificate;
(b) a good standing certificate with respect to the
Borrower, issued as of a recent date by the Secretary of
State or other appropriate official of the jurisdiction of
the Borrower's incorporation, together with a telegram from
such Secretary of State or other official, updating the
information in such certificate;
(c) an opinion of the General Counsel of the Borrower,
dated the date of such Credit Extension, substantially in
the form attached hereto as Annex C-2, and acceptable to the
Agent; and
(d) Subsidiary Confirmations from each of the
Borrower's Wholly-Owned Domestic Subsidiaries, in the form
attached hereto as Annex C-3.
<TABLE>
<CAPTION>
Exhibit (11)
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
For the
Quarter Ended Six Months Ended
June 30, June 30,
1993 1992 1993 1992
---- ---- ---- ----
<C> <C> <C> <C>
<S>
Primary:
- --------
Net Income $ 45 $ 33 $ 63 $ 50
======= ======= ======= =======
Weighted average number of shares
outstanding (thousands) 43,423 42,626 43,314 42,573
Weighted average common equivalent
shares (thousands):
Deferred awards 22 307 24 310
Stock options using average
market price 611 588 618 562
------- ------- ------- -------
Primary weighted average number of
common shares outstanding and
common equivalent shares (thousands) 44,056 43,521 43,956 43,445
======= ======= ======= =======
Primary per share amount $ 1.03 $ .76 $ 1.44 $ 1.16
======= ======= ======= =======
Fully Diluted:
- --------------
Net Income $ 47 $ 35 $ 67 $ 54
======= ======= ======= =======
Weighted average number of shares
outstanding (thousands) 43,423 42,626 43,314 42,573
Weighted average common equivalent
shares (thousands):
Deferred awards 22 307 24 310
Stock options using the higher
of average market price or
market price at end of period 613 603 627 587
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) 49,856 49,334 49,763 49,268
======= ======= ======= =======
Fully diluted per share amount $ .95 $ .71 $ 1.35 $ 1.11
======= ======= ======= =======
</TABLE>
Exhibit (99)
State or Other
Jurisdiction
Subsidiaries of Owens-Corning Under the Laws of
Fiberglas Corporation (06/30/94) Which Organized
- -------------------------------------------- ---------------
Barbcorp, Inc. Delaware
Dansk-Svensk Glasfiber A/S Denmark
Deutsche Owens-Corning Glasswool GmbH Germany
Eric Company Delaware
European Owens-Corning Fiberglas Belgium
Fiberglas Canada Inc. Canada
Fiberglas Comercial Exportadora Brazil
e Importadora Ltda.
IPM Inc. Delaware
Kitsons Insulation Products Ltd. United Kingdom
Matcorp, Inc. Delaware
N. V. Owens-Corning S.A. Belgium
O/C/FIRST CORPORATION Ohio
OCFOGO, Inc. Delaware
OCFSC, Inc. U.S. Virgin Islands
O.C. Funding B.V. The Netherlands
O/C/SECOND CORPORATION Delaware
Owens-Corning A/S Norway
Owens-Corning Building Products (U.K.) Ltd. United Kingdom
Owens-Corning Cayman Limited Cayman Islands
Owens-Corning Changchun Guan Dao Company Ltd. PRC China
Owens-Corning Fiberglas A.S. Limitada Brazil
Owens-Corning Fiberglas Deutschland GmbH Germany
Owens-Corning Fiberglas Espana, S.A. Spain
Owens-Corning Fiberglas France, S.A. France
Owens-Corning Fiberglas (G.B.) Ltd. United Kingdom
Owens-Corning Fiberglas (Italy) S.r.l. Italy
Owens-Corning Fiberglas Norway A/S Norway
Owens-Corning Fiberglas S.A. Uruguay
Owens-Corning Fiberglas Sweden AB Sweden
Owens-Corning Fiberglas Sweden Inc. Sweden
Owens-Corning Fiberglas Technology Inc. Illinois
Owens-Corning Fiberglas (U.K.) Ltd. United Kingdom
Owens-Corning Fiberglas (Guangzhou) Fiberglas
Co. Ltd. PRC China
Owens-Corning Holdings Limited Cayman Islands
Owens-Corning Isolation France S.A. France
Owens-Corning Overseas Holdings, Ltd. Delaware
Owens-Corning (Overseas) Management Limited Cyprus
Owens-Corning Real Estate Corporation Ohio
Owens-Corning Veil Netherlands B.V. The Netherlands
Owens-Corning Veil U.K., Ltd. United Kingdom
Owens-Corning Vertriebs GmbH Germany
Palmetto Products, Inc. Delaware
Scanglas Ltd. United Kingdom
THB Development, Inc. Delaware
UC Industries, Inc. Delaware
Willcorp, Inc. Delaware
Wrexham A.R. Glass Ltd. United Kingdom
