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 March 31, 1995
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 March 31,
1995
47,709,978<PAGE>
<TABLE>
-2-
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Quarter Ended
March 31,
1995 1994
(In millions of dollars,
except share data)
<S> <C> <C>
NET SALES $ 844 $ 677
COST OF SALES 630 523
-------- --------
Gross margin 214 154
OPERATING EXPENSES
Marketing and administrative
expenses 113 87
Science and technology expenses 18 16
Restructuring costs (Note 4) - 89
Other (Note 4) 11 29
-------- --------
Total operating expenses 142 221
-------- --------
INCOME (LOSS) FROM OPERATIONS 72 (67)
Cost of borrowed funds 26 22
-------- --------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES 46 (89)
Provision (credit) for income taxes
(Note 7) 16 (23)
-------- --------
INCOME (LOSS) BEFORE EQUITY IN NET
INCOME OF AFFILIATES 30 (66)
Equity in net income (loss) of affiliates 3 (1)
-------- --------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGES 33 (67)
Cumulative effect of accounting changes
(Notes 5 and 6) - 85
-------- --------
NET INCOME $ 33 $ 18
======== ========
The accompanying notes are an integral part of this statement.
/TABLE
<PAGE>
-3-
<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Continued)
Quarter Ended
March 31,
1995 1994
(In millions of dollars,
except share data)
<S> <C> <C>
NET INCOME PER COMMON SHARE
Primary:
Income (loss) before cumulative
effect of accounting changes $ .71 $ (1.52)
Cumulative effect of accounting
changes - 1.93
-------- --------
Net income per share $ .71 $ .41
======== ========
Assuming full dilution:
Income (loss) before cumulative
effect of accounting changes $ .68 $ (1.30)
Cumulative effect of accounting
changes - 1.70
-------- --------
Net income per share $ .68 $ .40
======== ========
Weighted average number of common shares
outstanding and common equivalent
shares during the period (in millions)
(Note 3)
Primary 45.7 43.8
Assuming full dilution 50.8 49.6
The accompanying notes are an integral part of this statement.
/TABLE
<PAGE>
-4-
<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 10 $ 59
Receivables (Note 11) 341 329
Inventories (Note 8) 268 223
Deferred income taxes 157 156
Insurance for asbestos litigation
claims - current portion (Note 12) 125 125
Other current assets 64 38
-------- --------
Total current 965 930
-------- --------
OTHER
Goodwill (Note 3) 178 151
Investments in affiliates 77 74
Deferred income taxes 289 308
Insurance for asbestos litigation
claims (Note 12) 508 556
Other noncurrent assets 143 122
-------- --------
Total other 1,195 1,211
-------- --------
PLANT AND EQUIPMENT, at cost
Land 52 51
Buildings and leasehold improvements 563 553
Machinery and equipment 2,209 2,172
Construction in progress 161 125
-------- --------
2,985 2,901
Less--Accumulated depreciation (1,812) (1,768)
-------- --------
Net plant and equipment 1,173 1,133
-------- --------
TOTAL ASSETS $ 3,333 $ 3,274
======== =========
The accompanying notes are an integral part of this statement.
/TABLE
<PAGE>
-5-
<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Continued)
March 31, December 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued
liabilities $ 545 $ 598
Reserve for asbestos litigation
claims - current portion (Note 12) 275 300
Short-term debt 174 155
Long-term debt - current portion 4 20
-------- --------
Total current 998 1,073
-------- --------
LONG-TERM DEBT (Note 3) 1,083 1,037
-------- --------
OTHER
Reserve for asbestos litigation
claims (Note 12) 1,072 1,145
Other employee benefits liability 385 390
Pension plan liability 77 77
Other 245 232
-------- --------
Total other 1,779 1,844
-------- --------
COMMITMENTS AND CONTINGENCIES (Notes 10 and 12)
STOCKHOLDERS' EQUITY (Note 3)
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
47.7 million shares at March 31, 1995,
44.2 million shares at December 31, 1994 454 348
Deficit (979) (1,012)
Foreign currency translation adjustments 12 (1)
Other (14) (15)
-------- --------
Total stockholders' equity (527) (680)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,333 $ 3,274
======== ========
The accompanying notes are an integral part of this statement.
/TABLE
<PAGE>
-6-
<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Quarter Ended
March 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
NET CASH FLOW FROM OPERATIONS
Net income $ 33 $ 18
Reconciliation of net cash provided
by operating activities:
Noncash items:
Cumulative effect of accounting
changes - (85)
Provision for depreciation,
amortization, and rebuilding
furnaces 30 27
Provision for deferred income taxes 14 14
Other 9 4
(Increase) decrease in receivables
(Note 11) 1 (34)
(Increase) decrease in inventories (40) (39)
Increase (decrease) in accounts payable
and accrued liabilities (68) 36
Increase (decrease) in accrued income
taxes (6) (25)
Other (29) 68
-------- --------
Net cash flow from operations (56) (16)
-------- --------
NET CASH FLOW FROM INVESTING
Additions to plant and equipment (59) (40)
Other (2) 1
-------- --------
Net cash flow from investing $ (61) $ (39)
-------- --------
The accompanying notes are an integral part of this statement.
/TABLE
<PAGE>
-7-
<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Continued)
Quarter Ended
March 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
NET CASH FLOW FROM FINANCING (Note 3)
Net additions to long-term credit facilities $ 106 $ 94
Other additions to long-term debt 34 -
Other reductions to long-term debt (28) (20)
Net increase in short-term debt 13 41
Other (8) 1
-------- --------
Net cash flow from financing 117 116
-------- --------
NET CASH FLOW FROM ASBESTOS-RELATED
ACTIVITIES (Note 12)
Proceeds from insurance for asbestos
litigation claims 48 14
Payments for asbestos litigation claims (98) (73)
-------- --------
Net cash flow from asbestos-
related activities (50) (59)
-------- --------
Effect of exchange rate changes on cash 1 -
Net increase (decrease) in cash and
cash equivalents (49) 2
Cash and cash equivalents at beginning
of period 59 3
-------- --------
Cash and cash equivalents at end of
period (Note 9) $ 10 $ 5
======== ========
The accompanying notes are an integral part of this statement.
/TABLE
<PAGE>
-8-
<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Quarter Ended
March 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
Industry Segments
Building Products
United States $ 456 $ 379
Europe 65 23
Canada and other 31 23
-------- --------
Total Building Products 552 425
-------- --------
Composite Materials
United States 152 151
Europe 105 75
Canada and other 35 26
-------- --------
Total Composite Materials 292 252
-------- --------
Intersegment sales
Building Products - -
Composite Materials 26 22
Eliminations (26) (22)
-------- --------
Net sales $ 844 $ 677
======== ========
Geographic Segments
United States $ 608 $ 530
Europe 170 98
Canada and other 66 49
-------- --------
844 677
-------- --------
Intersegment sales
United States 13 10
Europe 4 8
Canada and other 20 21
Eliminations (37) (39)
-------- --------
Net sales $ 844 $ 677
-------- --------
</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 Composite Materials by $70 million and $22 million, respectively, and to
increase general corporate expense by $25 million. Geographically, income
from operations for Building Products in the United States and Canada and
other was reduced by $50 million and $20 million, respectively. Income from
operations for Composite Materials in the United States, Europe, and Canada
and other was reduced by $6 million, $13 million, and $3 million,
respectively.<PAGE>
-9-
<TABLE>
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Quarter Ended
March 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
(1) SEGMENT DATA (Continued)
INCOME (LOSS) FROM OPERATIONS
Industry Segments
Building Products
United States $ 32 $ (26)
Europe 8 4
Canada and other 7 (21)
-------- --------
Total Building Products 47 (43)
-------- --------
Composite Materials
United States 34 19
Europe 8 (13)
Canada and other 3 (1)
-------- --------
Total Composite Materials 45 5
-------- --------
General corporate expense (20) (29)
-------- --------
Income (loss) from operations 72 (67)
Cost of borrowed funds (26) (22)
-------- --------
Income (loss) before provision
for income taxes $ 46 $ (89)
======== ========
Geographic Segments
United States $ 66 $ (7)
Europe 16 (9)
Canada and other 10 (22)
General corporate expense (20) (29)
-------- --------
Income (loss) from operations 72 (67)
Cost of borrowed funds (26) (22)
-------- --------
Income (loss) before provision
for income taxes $ 46 $ (89)
======== ========
/TABLE
<PAGE>
-10-
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 1994 Annual Report on Form l0-K, as filed with
the Securities and Exchange Commission.
(3) LONG-TERM DEBT AND STOCKHOLDERS' EQUITY
During the first quarter of 1995, the Company called, prior to maturity,
approximately $150 million of its $173 million issue of 8% convertible
junior subordinated debentures. These debentures were called in two
separate tranches. The first tranche, representing the approximately $50
million issue of bearer debentures, was called in February 1995. The second
tranche, representing an additional $100 million of debentures, was called
in March 1995. (The remaining $23 million of debentures which were not
called were converted by the holders during the first quarter of 1995.)
The debentures were convertible into shares of the Company's common stock at
a conversion price of $29.75 (33.613 shares of common stock per $1,000
principal amount of debentures). Virtually all of the $50 million bearer
debentures and approximately $13 million of the $100 million tranche of
debentures were converted during March 1995. The conversion of these
debentures, along with the additional conversion of $23 million of
debentures referred to above, resulted in 2.9 million new shares of common
stock issued and outstanding as of March 31, 1995. During April 1995, all
of the remaining $87 million debentures were converted, resulting in an
additional 2.9 million shares issued and outstanding, which are not
reflected in the Company's consolidated balance sheet as of March 31, 1995.
In conjunction with the calling of the debentures, the Company paid fees of
approximately $3 million which are reflected as other expense in the
Company's consolidated statement of income for the quarter ended March 31,
1995.
<PAGE>
-11-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(3) LONG-TERM DEBT AND STOCKHOLDERS' EQUITY (Continued)
Early in the first quarter of 1995, the Company completed the acquisitions
of four privately-owned manufacturing and technology facilities in the
western United States ("the acquisitions"). The aggregate purchase price of
the acquisitions, including possible subsequent contingent consideration,
was $26 million. The acquisitions were consummated by the exchange of
582,222 shares of the Company's common stock and less than $1 million in
cash for all of the acquired assets and liabilities. The acquisitions were
accounted for under the purchase method of accounting, whereby the assets
acquired and liabilities assumed have been recorded at their fair values and
the results of operations of the acquisitions have been included in the
Company's consolidated financial statements subsequent to the acquisition
date. The purchase price allocations were based on preliminary estimates of
fair market value and are subject to revision. Goodwill of $22 million and
a non-competition agreement of $3 million were recorded in this business
combination and are being amortized over 40 years and 7 years, respectively,
on a straight-line basis. The pro forma effect of the acquisitions was not
material to net income for the three months ended March 31, 1994.
(4) RESTRUCTURING OF OPERATIONS AND OTHER INITIATIVES
During the first quarter of 1994, the Company recorded a $117 million pretax
charge 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, 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 were revised during the
first quarter of 1995 and include: $44 million for personnel reductions,
$20 million for divestiture of non-strategic businesses and facilities, $22
million for business realignments, and $3 million for other actions. The $44
million cost for personnel reductions primarily represents severance and
other personnel costs associated with the elimination of nearly 400
positions worldwide. The primary employee groups affected include science
and technology personnel, field sales personnel, corporate administrative
personnel, and commercial roofing and resin business personnel.
As of March 31, 1995, the Company has recorded approximately $60 million in
cumulative costs against its 1994 restructure reserve, of which $45 million
represents actual cash expenditures and $15 million represents the non-cash
effects of asset write-offs and business realignments. The $45 million cash
expenditure includes personnel reduction costs of $31 million, primarily
composed of severance costs for over 300 employees. The remaining $14
million cash expenditure includes $12 million for costs associated with the
divestiture or realignment of businesses and facilities and $2 million for
other actions.<PAGE>
-12-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(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 $2.47 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.
(6) POSTEMPLOYMENT AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
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 $.57
per share, net of related income taxes of $18 million.
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 $.20 per
share. (The Company adopted Statement No. 106 for its U.S. plans effective
January 1, 1991.)
<PAGE>
-13-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
<TABLE>
(7) INCOME TAXES
The reconciliation between the U.S. federal statutory rate and the Company's
consolidated effective income tax rate is:
Quarter Ended
March 31,
1995 1994
<S> <C> <C>
U. S. federal statutory rate 35% (35)%
Operating losses of foreign
subsidiaries - 14
Difference between foreign
tax rates and U.S. statutory rate - (1)
State and local income taxes 3 (2)
Other (2) (2)
------ ------
Effective tax rate 36% (26)%
====== ======
</TABLE>
<TABLE>
(8) INVENTORIES
Inventories are summarized as follows:
March 31, December 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
Finished goods $ 236 $ 192
Materials and supplies 123 118
---------- ----------
359 310
Less: reduction to LIFO basis (91) (87)
---------- ----------
$ 268 $ 223
========== ==========
</TABLE>
Approximately $113 million and $88 million of net inventories were valued
using the LIFO method at March 31, 1995 and December 31, 1994, respectively.
<PAGE>
-14-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
<TABLE>
(9) CONSOLIDATED STATEMENT OF CASH FLOWS
Cash payments, net of refunds, for income taxes and cost of borrowed funds
are summarized as follows:
Quarter Ended
March 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
Income taxes $ 1 $ (7)
Cost of borrowed funds 9 7
</TABLE>
See Note 3 for supplemental disclosure of Non-cash Investing and Financing
Activities.
(10) LEASES
The Company currently has an operating lease commitment of approximately $4
million per year for the lease of its corporate headquarters facility in
Toledo, Ohio through 1996. During the first quarter of 1995, the Company
negotiated the lease of a new headquarters facility which will result in an
operating lease beginning in late 1996. This operating lease results in
future rental commitments of approximately $14 million per year through 2006
and $5 million per year through 2015.
(11) ACCOUNTS RECEIVABLE SECURITIZATION
In January 1995, the Company sold an additional $50 million of accounts
receivable of its Building Products North American operations to a 100%
owned subsidiary, Owens-Corning Funding Corporation (OC Funding). In
December 1994, OC Funding entered into a three-year agreement whereby it can
sell, on a revolving basis, an undivided percentage ownership interest in a
designated pool of accounts receivable up to a maximum of $100 million. As
of March 31, 1995, $100 million has been sold under this agreement and the
sale has been reflected as a reduction of accounts receivable in the
Company's consolidated balance sheet. The discount recorded on the sale of
receivables is recorded as an increase in other expenses on the Company's
consolidated statement of income.
The Company maintains an allowance for doubtful accounts based upon the
expected collectibility of all consolidated trade accounts receivable,
including receivables sold by OC Funding.
<PAGE>
-15-
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 March 31, 1995, approximately 106,500 asbestos personal injury claims
were pending against the Company, 10,100 of which were received in the first
quarter of 1995. The Company received approximately 27,500 such claims in
1994, and 31,700 in 1993. Through March 31, 1995, the Company had resolved
(by settlement or otherwise) approximately 149,800 asbestos personal injury
claims. During 1993, 1994 and the first quarter of 1995, the Company
resolved approximately 51,400 such claims and incurred total indemnity
payments of $474 million (an average of less than $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.
<PAGE>
-16-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
Insurance
As of March 31, 1995, the Company had approximately $295 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 $24 million (out of the $295 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.
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:
<PAGE>
-17-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
<TABLE>
Asbestos Litigation Claims
March 31, December 31,
1995 1994
(In millions of dollars)
<S> <C> <C>
Reserve for asbestos litigation claims
Current $ 275 $ 300
Other 1,072 1,145
------- -------
Total Reserve 1,347 1,445
Insurance for asbestos litigation claims
Current 125 125
Other 508 556
------- -------
Total Insurance 633 681
------- -------
Net Asbestos Liability $ 714 $ 764
======= =======
</TABLE>
Case filing rates have continued at historically high levels with the
receipt of approximately 10,100 new claims during the first quarter of 1995,
following the receipt of approximately 31,700 claims in 1993 and
approximately 27,500 claims in 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.
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
<PAGE>
-18-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
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.
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 $295 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 $714
million, the Company's Liabilities, net of Insurance, before tax benefits.
They 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.
<PAGE>
-19-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(12) CONTINGENT LIABILITIES (Continued)
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.
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 defendants (including the Company) have entered into
an agreement to settle this lawsuit with the alleged class, which settlement
is subject to court approval after notice to the proposed class. 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.
(13) SUBSEQUENT EVENTS
On May 10, 1995, Owens-Corning Capital, L.L.C., a Delaware limited liability
company all of the common limited company interests in which are owned
indirectly by the Company, completed a private offering of 4 million shares
of Convertible Monthly Income Preferred Securities ("preferred securities").
The aggregate purchase price for the offering was $200 million.
The preferred securities are guaranteed in certain respects by the Company
and are convertible, at the option of the holders, into Company common stock
at the rate of 1.1416 shares of Company common stock for each preferred
security (equivalent to a conversion price of $43.80 per common share). The
Company cannot initiate any action relating to conversion until after June
1, 1998. Distributions on the preferred securities are cumulative and are
payable at the annual rate of 6-1/2 percent of the liquidation preference of
$50 per preferred security. The net proceeds of the offering were loaned to
-20-
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(13) SUBSEQUENT EVENTS (Continued)
the Company and used by the Company to repay the $110 million short-term
bank credit facility utilized for the 1994 U.K. acquisition, with the
balance used to reduce borrowings under the Company's revolving credit
facilities.
<PAGE>
-21-
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 first quarter of 1995 was $33 million, or $.68 per share,
an increase of 83% from net income of $18 million, or $.40 per share, in the
first quarter of 1994. The 1995 first quarter earnings growth resulted from
increased volume and more favorable pricing, as well as the benefits of the
1994 acquisitions.
Net sales were $844 million for the quarter ended March 31, 1995,
reflecting a 25% increase from the first quarter 1994 level of $677 million.
Approximately two-thirds of the 1995 sales growth resulted from volume and
pricing gains worldwide. The increase in volume was due in part to improved
weather conditions in the U.S. during the first quarter of 1995. The
balance of the sales growth reflects the benefits of the 1994 acquisitions
of the United Kingdom-based insulation and industrial supply businesses of
Pilkington plc ("the U.K. acquisition") and the United States-based UC
Industries, Inc. ("UCI") as well as the favorable impact of a weaker U.S.
dollar. Sales outside the U.S. increased 61% during the quarter, reflecting
the Company's growing presence and improving economic conditions abroad.
Gross margin for the quarter ended March 31, 1995 increased to 25%, compared
to 23% in 1994, and income from ongoing operations increased to $72 million
in the first quarter of 1995, up 44% from $50 million in 1994, largely
reflecting the 1995 volume and price increases and the benefits of the
productivity initiatives which the Company implemented in the first quarter
of 1994.
Marketing and administrative expenses increased by $26 million in the first
quarter of 1995 compared to the first quarter of 1994. This increase was
primarily due to incremental costs from acquired businesses, costs of the
Company's global brand awareness program, and additional costs of expanding
into new global markets.
Net income of $18 million for the quarter ended March 31, 1994 included the
following offsetting special items: an after-tax gain of $123 million, or
$2.47 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 $.57 per share, to reflect adoption of SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." Please see notes 4, 5 and 6 to the
Consolidated Financial Statements.
In the Building Products segment, sales increased 30% for the quarter ended
March 31, 1995 compared to the first quarter of 1994. Approximately three-
fourths of this sales growth reflects the benefits of the 1994 acquisitions
and increased demand worldwide. The balance of the sales growth resulted
from more favorable pricing as well as favorable translation gains.
-22-
Excluding the impact of the first quarter 1994 charge for restructure and
other initiatives (please see notes 1 and 4 to the Consolidated Financial
Statements), income from operations for total Building Products increased
74% in the first quarter of 1995, reflecting earnings growth in the United
States, Europe, and Canada.
Building Products sales in the United States increased 20% over the first
quarter 1994 level, supported by continued growth in the home improvement
and related markets. Approximately one-fifth of this sales increase arose
from the 1994 acquisition of UCI. The Company's roofing business showed
improved performance during the quarter, resulting from increased volume and
price, and improved weather conditions in the U.S.. The Company also
benefited from a favorable market reception to its newly introduced
PROMINENCE(TM) roofing shingle. Market reception of the Company's new
PinkPlus(R) with Miraflex(TM) fiber insulation product has also been good.
In Europe, the Company completed the technology conversion of its acquired
glass fiber insulation manufacturing facilities in the U. K. and added a
second production line at its insulation plant in Vise, Belgium. The
Company plans to open its previously announced 90%-owned joint venture
insulation manufacturing facility in Guangzhou, China in July 1995.
In the Composite Materials segment, total sales increased 16% during the
first quarter of 1995 compared to the 1994 level. Total Composite Materials
sales grew 26% during the quarter, when adjusted for the deconsolidation of
the Company's resins business which became an unconsolidated joint venture
on September 30, 1994.
In Europe, the Company continues to benefit from economic improvement.
Composite sales were up 40% over the first quarter of 1994, reflecting
increased demand and pricing, as well as a favorable currency impact.
Income from ongoing operations increased from a break-even level in the
first quarter of 1994 to 8% of sales in the first quarter of 1995. The
Company expects the European economic recovery to continue throughout 1995.
In April 1995, the Company opened its new manufacturing plant for glass-
reinforced plastic pipe in Changchun, China. The Company also announced the
formation of a pipe joint venture in Argentina and the opening of a service
center in Bogota, Colombia to support and enhance sales of composite
materials in that region.
The Company's cost of borrowed funds for the quarter ended March 31, 1995
was $4 million higher than 1994 due to increased borrowing and higher
interest rates during the first quarter of 1995. In April 1995, the Company
completed the conversion of its 8% convertible junior subordinated
debentures into shares of common stock. This conversion reduced the
Company's overall debt and will save $13.8 million in annual interest
expense in the future. Please see note 3 to the Consolidated Financial
Statements.<PAGE>
-23-
LIQUIDITY, CAPITAL RESOURCES AND OTHER RELATED MATTERS
Cash flow from operations, excluding asbestos-related activities, was
negative $56 million for the first quarter of 1995, compared to negative $16
million for the first quarter of 1994. Total receivables at March 31, 1995
were $12 million higher than the December 31, 1994 level due to an increase
in sales, offset largely by the sale of $50 million in receivables which
occurred in early January 1995. Please see note 11 to the Consolidated
Financial Statements. Net inventories increased from $223 million at
December 31, 1994 to $268 million at March 31, 1995 due to anticipated
seasonal demand for building products worldwide, while accounts payable and
accrued liabilities decreased from $598 million at December 31, 1994 to $545
million at March 31, 1995.
The Company's net working capital was negative $33 million and its current
ratio was .97 at March 31, 1995 compared to negative $143 million and .87,
respectively, at December 31, 1994. The improvement in 1995 was primarily
due to the increase in net inventories as well as the decrease in accounts
payable during the first quarter of 1995.
The Company's total borrowings at March 31, 1995 were $49 million higher
than at year-end 1994. Typically, the Company reports greater cash usage
during the first half of the year as the Company builds inventories and
other working capital. During the first quarter of 1995, the Company
increased its available line of credit under its Canadian credit facility,
which now has a commitment of 115 million Canadian dollars (82 million U.S.
dollars). As of March 31, 1995, the Company had total unused lines of
credit of $230 million available under long-term bank loan facilities and an
additional $129 million under short-term facilities, compared to $293
million and $91 million, respectively, at December 31, 1994. The net
decline in unused available lines of credit reflects the Company's higher
borrowings, partially offset by a decrease in outstanding letters of credit
supporting appeals from asbestos trials (which reduce credit availability
under the Company's long-term U.S. bank loan facility).
During the first quarter of 1995, the Company called, prior to maturity,
approximately $150 million of its $173 million issue of 8% convertible
junior subordinated debentures. The $23 million of debentures which were
not called were converted by the holders during the first quarter of 1995.
The debentures were convertible into shares of the Company's common stock at
a conversion price of $29.75 per share, representing 33.613 shares of common
stock per $1,000 principal amount. As of March 31, 1995, approximately $86
million of the $173 million issue of debentures were converted, resulting in
2.9 million new shares of common stock issued and outstanding. During April
1995, all of the remaining $87 million of debentures were converted,
resulting in an additional 2.9 million shares of common stock issued and
outstanding, which are not reflected in the Company's consolidated balance
sheet as of March 31, 1995. The conversion of these debentures into shares
of common stock has no impact on the Company's fully diluted earnings per
share as these shares have already been reflected in that calculation.
Debentures not converted were redeemed for cash at face value with a 5.6%
premium and accrued interest. Please see note 3 to the Consolidated
Financial Statements.
<PAGE>
-24-
Capital spending for property, plant and equipment was $59 million during
the first quarter of 1995. At the end of the first quarter, approved
capital projects were $139 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 first quarter of
1995, including $10 million in defense costs, were $98 million. Proceeds
from insurance were $48 million, resulting in a net pretax cash outflow of
$50 million, or $30 million after-tax. During the first quarter of 1995,
the Company received approximately 10,100 new asbestos personal injury cases
and closed approximately 10,800 cases. Over the next twelve months, total
payments for asbestos litigation claims, including defense costs, are
expected to be approximately $275 million. Proceeds from insurance of $125
million are expected to be available to cover these costs, resulting in a
net pretax cash outflow of $150 million, or $91 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.
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, including two state Superfund sites where the Company is the
primary generator. 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 first quarter of 1995, the Company was
designated as a PRP in such federal, state, local or private proceedings for
two additional sites. At March 31, 1995, a total of 37 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 a $26
million reserve for its Superfund (and similar state, local and private
action) contingent liabilities. 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 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>
-25-
FUTURE REQUIRED ACCOUNTING CHANGE
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (SFAS No.
121). The Company is required to adopt the new standard no later than
January 1, 1996. The Company does not expect the cumulative effect of the
adoption of SFAS No. 121 to be material to the consolidated financial
statements.
<PAGE>
-26-
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 March 31, 1995.
(b) None of the rights evidenced by any class of the Company's registered
securities was materially limited or qualified in the quarter ended
March 31, 1995 by the issuance or modification of any other class of
securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a) During the quarter ended March 31, 1995, 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 March 31, 1995, 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
No matter was submitted to a vote of security holders during the quarter
ended March 31, 1995.
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.
<PAGE>
-27-
(b) Reports on Form 8-K.
During the quarter ended March 31, 1995, the Company filed the
following three (3) Current Reports on Form 8-K, each under Item 5,
"Other Events":
(1) Dated January 21, 1995 -- to make publicly available the
consolidated financial statements of the Company for the year
ended December 31, 1994. The following financial statements were
filed as part of such Current Report:
Owens-Corning Fiberglas Corporation and Subsidiaries
Consolidated Financial Statements as of December 31, 1994 and
1993, together with Auditors' Report:
- Report of Independent Public Accountants
- Summary of Significant Accounting Policies
- Consolidated Statement of Income - for the years ended
December 31, 1994, 1993, and 1992
- Consolidated Balance Sheet - December 31, 1994 and 1993
- Consolidated Statement of Stockholders' Equity - for the
years ended December 31, 1994, 1993, and 1992
- Notes to Consolidated Financial Statements - Notes 1
through 22
(2) Dated February 9, 1995 -- to announce the Company's call for
redemption of the $50 million of its 8% Convertible Junior
Subordinated Debentures due 2005 held in bearer form.
(3) Dated March 14, 1995 -- to announce the Company's call for
redemption of all of its outstanding 8% Convertible Junior
Subordinated Debentures due 2005.
<PAGE>
-28-
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 By /s/David W. Devonshire
------------ -------------------------------
David W. Devonshire
Senior Vice President and Chief
Financial Officer
Date By /s/Domenico Cecere
------------ --------------------------------
Domenico Cecere
Vice President and Controller
<PAGE>
-29-
EXHIBIT INDEX
Exhibit
Number Document Description
(3) Articles of Incorporation and By-Laws.
Certificate of Incorporation of Owens-Corning Fiberglas
Corporation, as amended (incorporated herein by reference
to Exhibit (3) to the Company's annual report on Form 10-K
for 1986).
By-Laws of Owens-Corning Fiberglas Corporation, 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).
(10) Material Contracts.
The following documents are incorporated herein by reference
to Exhibit (10) to the Company's annual report on Form 10-K
for 1994:
- 1995 Corporate Incentive Plan - General Terms
- Agreement, dated as of January 1, 1995, with William
W. Colville
(11) Statement re Computation of Per Share Earnings (filed
herewith).
(27) Financial Data Schedule (filed herewith).
(99) Additional Exhibits.
Subsidiaries of Owens-Corning Fiberglas Corporation, as
amended (filed herewith).
<TABLE>
-30-
Exhibit (11)
OWENS-CORNING FIBERGLAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
Quarter Ended
March 31,
1995 1994
(In millions of dollars,
except share data)
<S> <C> <C>
Primary:
Net Income $ 33 $ 18
======= =======
Weighted average number of
shares outstanding
(thousands) 45,394 43,174
Weighted average common
equivalent shares
(thousands):
Deferred awards 15 25
Stock options using
average market price 284 591
------- -------
Primary weighted average number
of common shares outstanding
and common equivalent shares
(thousands) 45,693 43,790
======= =======
Primary per share amount $ .71 $ .41
======= =======
Fully Diluted:
Net Income $ 34 $ 20
======= =======
Weighted average number of shares
outstanding (thousands) 45,394 43,174
Weighted average common equivalent
shares (thousands):
Deferred awards 15 25
Stock options using the higher
of average market price or
market price at end of period 327 604
Shares from assumed conversion
of debt 5,078 5,798
------- -------
Fully diluted weighted average number
of common shares outstanding and
common equivalent shares
(thousands) 50,814 49,601
======= =======
Fully diluted per share amount $ .68 $ .40
======= =======
</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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 10
<SECURITIES> 0
<RECEIVABLES> 313
<ALLOWANCES> 19
<INVENTORY> 268
<CURRENT-ASSETS> 965
<PP&E> 2,985
<DEPRECIATION> 1,812
<TOTAL-ASSETS> 3,333
<CURRENT-LIABILITIES> 998
<BONDS> 1,083
<COMMON> 454
0
0
<OTHER-SE> (981)
<TOTAL-LIABILITY-AND-EQUITY> 3,333
<SALES> 844
<TOTAL-REVENUES> 844
<CGS> 630
<TOTAL-COSTS> 630
<OTHER-EXPENSES> 137
<LOSS-PROVISION> 2
<INTEREST-EXPENSE> 26
<INCOME-PRETAX> 49
<INCOME-TAX> 16
<INCOME-CONTINUING> 33
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33
<EPS-PRIMARY> .71
<EPS-DILUTED> .68
</TABLE>
<TABLE>
-31-
Exhibit (99)
<S> <C>
State or Other
Jurisdiction
Under the Laws
Subsidiaries of Owens-Corning of
Fiberglas Corporation (4/30/95) Which Organized
Barbcorp, Inc. Delaware
Dansk-Svensk Glasfiber A/S Denmark
Deutsche Owens-Corning Glasswool GmbH Germany
Eric Company Delaware
European Owens-Corning Fiberglas S.A. Belgium
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
O.C. Funding B.V. The Netherlands
O/C/SECOND CORPORATION Delaware
OC Utah Four Corporation Utah
Owens-Corning A/S Norway
Owens-Corning Building Products (U.K.) Ltd. United Kingdom
Owens-Corning Canada Inc. Canada
Owens-Corning Capital Holdings I, Inc. Delaware
Owens-Corning Capital Holdings II, Inc. Delaware
Owens-Corning Capital L.L.C. Delaware
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. Delaware
Owens-Corning Fiberglas Technology Inc. Illinois
Owens-Corning Fiberglas (U.K.) Ltd. United Kingdom
Owens-Corning Finance (U.K.) plc United Kingdom
Owens-Corning FSC, Inc. Barbados
Owens-Corning Funding Corporation Delaware
Owens-Corning (Guangzhou) Fiberglas Co. Ltd. PRC China
Owens-Corning Holdings Limited Cayman Islands
Owens-Corning Isolation France S.A. France
Owens-Corning Ontario Holdings Inc. Canada
Owens-Corning Overseas Holdings, Inc. Delaware
Owens-Corning (Overseas) Management Limited Cyprus
Owens-Corning Real Estate Corporation Ohio
Owens-Corning Trading, Ltd. British Virgin Islands
Owens-Corning Veil Netherlands B.V. The Netherlands
<PAGE>
-32-
State or Other
Jurisdiction
Subsidiaries of Owens-Corning Under the Laws of
Fiberglas Corporation (4/30/95) Which Organized
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
Western Fiberglass, Inc. Utah
Western Fiberglass of Arizona Utah
Western Fiberglass of Texas, Inc. Utah
Willcorp, Inc. Delaware
Wrexham A.R. Glass Ltd. United Kingdom
</TABLE>
