SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year ended December 30, 1999
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
OWENS CORNING
One Owens Corning Parkway
Toledo, Ohio 43659
Commission File No. 1-3660
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REQUIRED INFORMATION
(a) Financial Statements.
1. Report of Independent Public Accountants
2. Statements of Assets Available for Benefits - as of
December 30, 1999 and December 30, 1998
3. Statements of Changes in Assets Available for Benefits - for
the years ended December 30, 1999 and December 30, 1998
4. Notes to Financial Statements
(b) Exhibit.
Consent of Arthur Andersen LLP
In accordance with the instructions to this Form 11-K, "plans subject to the
Employee Retirement Income Security Act of 1974 ("ERISA") may file plan
financial statements and schedules prepared in accordance with the financial
reporting requirements of ERISA." As the Plan is subject to the filing
requirements of ERISA, the aforementioned financial statements and schedules of
the Plan have been prepared in accordance with such requirements.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
By: /s/ Steven J. Strobel
--------------------------------
Steven J. Strobel
Chairman, Investment Review Committee
Dated:
June 27, 2000
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator
of the Owens Corning
Savings and Profit Sharing Plan:
We have audited the accompanying statements of assets available for benefits of
the OWENS CORNING SAVINGS AND PROFIT SHARING PLAN as of December 30, 1999 and
1998, and the related statements of changes in assets available for benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Plan's management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Owens Corning
Savings and Profit Sharing Plan as of December 30, 1999 and 1998, and the
changes in its assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States.
/s/ Arthur Andersen LLP
------------------------
ARTHUR ANDERSEN LLP
Toledo, Ohio,
April 28, 2000
<PAGE>
- 1 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 30, 1999 AND DECEMBER 30, 1998
<TABLE>
<S> <C> <C>
December 30, 1999 December 30, 1998
----------------- -----------------
ASSETS:
Investment in master trust (Notes 1, 2,
3 and 7) $ 387,566,528 $ 332,385,344
Due from Owens Corning (Note 1) 12,873,403 4,653,651
----------------- ----------------
ASSETS AVAILABLE FOR BENEFITS $ 400,439,931 $ 337,038,995
================= ================
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
- 2 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 30, 1999 AND DECEMBER 30, 1998
<TABLE>
<S> <C> <C>
December 30, 1999 December 30, 1998
----------------- -----------------
INVESTMENT INCOME (Note 2):
Net interest in master trust investment
income $ 2,103,172 $ 30,104,968
CONTRIBUTIONS (Notes 1, 5 and 7):
Participants 29,576,257 18,563,551
Owens Corning 27,026,658 10,586,052
------------- -------------
56,602,915 29,149,603
------------- -------------
OTHER:
Distributions to participants (Note 5) (46,923,197) (71,741,767)
Transfer from Predecessor Trustee (Note 6) 51,954,036 686,311
Administrative expenses (Note 1) (338,036) (231,128)
Other 2,046 1,853,625
------------- -------------
4,694,849 (69,432,959)
------------- -------------
Net increase (decrease) (Note 3) 63,400,936 (10,178,388)
------------- -------------
ASSETS AVAILABLE FOR BENEFITS - beginning of year
337,038,995 347,217,383
------------- -------------
ASSETS AVAILABLE FOR BENEFITS - end of year $ 400,439,931 $ 337,038,995
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
- 3 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT PROVISIONS OF THE PLAN AND ACCOUNTING
POLICIES
Operations of the Plan
----------------------
The Owens Corning Savings and Profit Sharing Plan (the Plan) principally
benefits salaried employees of Owens Corning and certain designated subsidiaries
(the Company). An eligible employee may elect to enroll in the Plan at any time.
Administrative expenses of the Plan are charged to the Plan and include
professional fees, accounting and other administrative expenses.
Certain Plan investments, included in a master trust (Note 2), are shares of
mutual funds managed by Fidelity Investments and Company stock. Fidelity
Investments is the trustee (the Trustee) as defined by the Plan and the Company
is the plan sponsor. Therefore, these transactions qualify as party-in-interest
transactions.
The following descriptions of the Plan provide only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
Plan Contributions
------------------
Participants may contribute up to 15% of their base pay to the Plan. All or a
portion of the participants' contributions may be designated at the
participants' option as deferred income which, pursuant to Section 401(k) of the
Internal Revenue Code, is not subject to Federal income tax until such amounts
are distributed to the participants. The Plan requires remittance of participant
contributions to the Trustee as soon as deducted from the participants'
paychecks.
The Plan provides a retirement contribution equal to a specified percentage of
eligible pay (which percentage varies by employee group) for participants who
work at a plant or business unit where a defined benefit pension plan is not
available. Company contributions relating to the retirement contribution are
invested as participants direct among the Plan's investment options.
<PAGE>
- 4 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(1) SUMMARY OF SIGNIFICANT PROVISIONS OF THE PLAN AND ACCOUNTING
POLICIES (continued)
Plan Contributions (continued)
------------------
The Company matches 35% of participants' contributions up to 10% of monthly
compensation. The Company may, at its discretion, make an annual profit sharing
contribution to the Plan. The Company made a profit sharing contribution of
approximately $13 million and $5 million in 1999 and 1998, respectively,
included as Due from Owens Corning in the accompanying financial statements.
One-half of the Company's annual profit sharing contribution and 100% of the
matching contributions are invested exclusively in Company stock, held by a
master trust (Note 2).
The Company may, at its option, make Company contributions in the form of cash
or an equivalent number of shares of common stock of the Company. For 1999 and
1998, the Company primarily contributed shares of stock to satisfy the portion
of the annual profit sharing contribution invested exclusively in Company stock,
held by a master trust (Note 2).
Included in 1999 participant contributions in the accompanying financial
statements is approximately $4,300,000 of rollovers from other plans, including
an hourly savings plan maintained by the Company.
Plan Investment Options
-----------------------
Participants elect to have their contributions invested in 1% increments among
the investment funds made available under the Plan, which are collectively held
in a master trust (Note 2). In 1999, the Acorn Fund and the Templeton Foreign
Fund were eliminated as investment options. In 1998, the Dodge & Cox Balanced
Fund was eliminated as an investment option and the Low-Priced Stock Fund was
added. Currently, the following ten investment options are available to
participants:
Company Stock Fund
------------------
Consists primarily of investments in Owens Corning common stock.
<PAGE>
- 5 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(1) SUMMARY OF SIGNIFICANT PROVISIONS OF THE PLAN AND ACCOUNTING
POLICIES (continued)
Spartan U.S. Equity Index Fund
------------------------------
Primarily invested in the companies whose securities are the basis for the
value of the Standard & Poor's 500 Index.
Retirement Money Market Fund
----------------------------
Primarily invests in high-quality short-term U.S. dollar denominated money
market securities of domestic and foreign issuers. Investments include
short-term corporate obligations, U.S. government obligations and
certificates of deposit.
Low-Priced Stock Fund
---------------------
Primarily invests in stocks of smaller, less well-known companies that are
considered undervalued or out of favor with other investors.
Puritan Fund
------------
Primarily invests in high-yielding U.S. and foreign securities, common and
preferred stocks, and bonds of any quality or maturity.
Growth and Income Portfolio
---------------------------
Primarily invests in U.S. and foreign stocks.
<PAGE>
- 6 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(1) SUMMARY OF SIGNIFICANT PROVISIONS OF THE PLAN AND ACCOUNTING
POLICIES (continued)
Blue Chip Growth Fund
---------------------
Primarily invests in common stocks of well-known and established companies
and companies with strong earnings and future growth potential.
Aggressive Growth Fund
----------------------
Primarily invests in stocks of small and medium-sized companies in the
developing stages of their life cycle that have the potential for
accelerated earnings or revenue growth.
Diversified International Fund
------------------------------
Primarily invests in stocks of companies located outside the U.S. that are
included in the Morgan Stanley EAFE Index.
Investment Grade Bond Fund
--------------------------
Invests in a broad variety of fixed-income obligations of any maturity that
are primarily rated medium to high quality.
The Trustee, at its sole discretion subject to the provisions in the trust
agreement, may hold any portion of any contributions in cash which it considers
necessary to meet anticipated disbursements.
Participants may change their investment options and contribution rate on a
daily basis and redistribute their account balances daily. Participants may
discontinue their contributions to the Plan at any time.
<PAGE>
- 7 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(1) SUMMARY OF SIGNIFICANT PROVISIONS OF THE PLAN AND ACCOUNTING
POLICIES (continued)
Basis of Accounting
-------------------
The accompanying financial statements have been prepared on the accrual basis.
Investments are reported at quoted market value. Participant withdrawal requests
received by the plan administrator before year end but not yet distributed to
the participants at year end are included in assets available for benefits.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Future
events could alter such estimates.
Reclassifications
-----------------
Certain amounts in the 1998 financial statements have been reclassified to
conform with the 1999 presentation.
Income Taxes
------------
The Internal Revenue Service (IRS) has issued a determination letter dated March
27, 1996, stating that the Plan meets the requirements of Section 401(a) of the
Internal Revenue Code (the Code) and that the trust is exempt from taxation
under Section 501(a) of the Code. Participants generally are not subject to
Federal income tax on Company contributions or fund earnings until those amounts
are distributed to them. Participants may elect to designate all or a portion of
their contributions to the Plan as deferred income pursuant to Section 401(k) of
the Code. This election permits the participants to exclude from gross taxable
income for Federal tax purposes that portion of their contributions so
designated, subject to certain limitations, until such time as they are
withdrawn from the Plan. The Plan had several amendments throughout 1999 and
1998; however, no new tax determination letter has been issued. Management
believes that the amendments do not change the Plan's status for meeting the
<PAGE>
- 8 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(1) SUMMARY OF SIGNIFICANT PROVISIONS OF THE PLAN AND ACCOUNTING
POLICIES (continued)
Income Taxes (continued)
------------
requirements of Section 401(a) of the Internal Revenue Code and that the trust
is still exempt from taxation.
Proceedings in the Event of Plan Termination
--------------------------------------------
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan. In the event of termination or upon a permanent
discontinuance of Company contributions, the Plan accounts of each participant
not previously vested would fully vest. Participants would, in accordance with
the terms of the Plan, receive their contributions to the Plan as well as
Company contributions to the Plan on their behalf and the earnings on those
contributions.
(2) INVESTMENTS
The Owens Corning Savings Plans Master Trust (the Master Trust) was established
for the investment of the assets of the Plan and another savings plan of the
Company. Each participating plan has an undivided interest in the Master Trust,
which is based on beginning of year plan interest adjusted for transactions
attributable to each plan and a proportionate share of income and expenses
attributable to the Master Trust as a whole. Quoted market prices are used to
value investments in the Master Trust. A summary of the net assets of the Master
Trust as of December 30, 1999 and 1998 is as follows:
<TABLE>
<S> <C> <C>
1999 1998
---- ----
ASSETS:
Investments:
Common Stock* $ 116,012,854 $ 154,873,515
Mutual Funds 358,124,204 244,617,866
Loans to Participants (Note 4) 12,923,914 11,665,663
------------- -------------
Total Assets $ 487,060,972 $ 411,157,044
PLAN INTEREST .796 .808
============= =============
* Nonparticipant-directed
</TABLE>
<PAGE>
- 9 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(2) INVESTMENTS (continued)
A summary of investment income for the Master Trust for the years ended December
30, 1999 and 1998, is as follows:
<TABLE>
<S> <C> <C>
1999 1998
---- ----
Investment (Loss) Income:
Net (depreciation) appreciation in
fair value of investments:
Common Stock $ (68,861,570) $ 8,843,733
Mutual Funds 43,711,008 10,859,683
-------------- ---------------
(25,150,562) $ 19,703,416
Interest 876,577 350,651
Dividends 20,235,160 15,205,828
-------------- ---------------
Total investment (loss) income $ (4,038,825) $ 35,259,895
============== ===============
</TABLE>
Changes in unrealized appreciation (depreciation) are reflected currently as a
change in assets available for benefits. Purchases and sales are recorded on the
trade date basis. Realized gain or loss on sale of investments is computed using
average cost.
(3) NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the significant components of the assets and changes in assets
available for benefits relating to the nonparticipant-directed investment option
within the Master Trust (the Company Stock Fund) is as follows:
<PAGE>
- 10 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(3) NONPARTICIPANT-DIRECTED INVESTMENTS (continued)
<TABLE>
<S> <C> <C>
1999 1998
---- ----
Assets Available for Benefits:
Plan interest in Company Stock Fund $ 86,713,391 $120,078,725
Contribution Receivable 7,330,583 763,156
------------- ------------
$ 94,043,974 $120,841,881
============= ============
Changes in Assets Available for Benefits:
Plan interest in:
Interest $ (30,625) $ (40,281)
Dividends 1,072,790 1,321,201
Net (depreciation) appreciation (52,736,215) 7,511,670
------------- ------------
(51,694,050) 8,792,590
Contributions 22,263,610 9,666,563
Transfers from (to)
participant-directed investments 14,565,552 (12,512,045)
Distributions and other (11,933,019) (29,344,580)
------------- ------------
$ (26,797,907) $(23,397,472)
============= ============
</TABLE>
(4) LOANS
Loans may be made from the Plan to active participants. The total amount a
participant may borrow is the lesser of $50,000 or 50% of their total vested
account balance, limited to the total of contributions designated as deferrals
and related earnings. The minimum amount available for a loan is $1,000. The
loan limit is reduced by the highest loan balance outstanding in the prior 12
months.
Loans advanced are repaid through regular payroll deductions with interest equal
to the prime rate in effect on the last business day of the month prior to the
employee's loan application.
A loan can be requested for any reason. A borrower has from one to five years to
repay the loan. Repayments of principal and interest are invested in one of the
ten investment funds in accordance with the borrower's election.
<PAGE>
- 11 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(5) VESTING, FORFEITURES AND DISTRIBUTIONS
Participants become 100% vested in Company contributions and earnings thereon
after three years of completed service. Such amounts also become fully vested
upon the participant attaining 65 years of age with five years of service,
attaining 55 years of age with 10 years of service, termination of the
participant's employment due to retirement, disability or death, involuntary
termination of the participant's employment (other than for cause), termination
of the Plan, or permanent discontinuance of the prescribed Company contributions
to the Plan.
Such vested contributions and earnings thereon are automatically distributable
after termination and upon attaining 65 years of age or death, whichever is
earlier. If termination of employment occurs for any reason other than attaining
65 years of age or death, the participant's account will become distributable at
65 years of age or death unless an election for immediate distribution is filed
within 90 days of termination with the plan administrator.
Participants may at any time withdraw all or any part of the value of their
contributions, excluding contributions designated as deferrals. Participants may
elect to receive their distribution from the Company Stock Fund in the form of
cash or Company stock. Participants aged 59-1/2, or older, may withdraw all or a
portion of their before-tax contributions and earnings. Otherwise, before-tax
contributions may be withdrawn only under serious financial hardship. Earnings
credited to the before-tax contributions before 1989, if any, are not available
for withdrawal.
Company contributions and earnings thereon subsequent to December 31, 1989,
cannot be withdrawn by Participants, even if vested, unless terminated, retired,
65 years of age or deceased. Participants who voluntarily terminate or are
terminated for cause will forfeit the non-vested portion of the Company
contributions and related earnings which are applicable. Forfeitures are applied
to reduce subsequent Company contributions to the Plan. The market value
forfeited by employees withdrawing from the Plan was approximately $115,000 in
1999, and $103,000 in 1998.
<PAGE>
- 12 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(6) PLAN MERGERS AND TRANSFERS
Effective January 1, 1999, the following subsidiaries' plans merged into the
Plan: Employees' Savings Plan for AmeriMark Building Products, Inc. and
Subsidiaries; Fabwel, Inc. 401(k) Plan; Fibreboard Corporation 401(k) Retirement
Plan; and the Falcon Foam Corporation Retirement Savings Plan (Falcon of
California only). During 1999, in connection with these mergers, assets totaling
approximately $52,000,000 were transferred into the Plan. Employees were 100%
vested in the amounts transferred under the prior plans.
In 1998, two subsidiary plans merged into the Plan. Effective January 1, 1998,
the Partek Insulations, Inc. 401(k) Plan merged into the Plan. The OCFL Money
Purchase Pension Plan merged into the Plan effective July 1, 1998. On each of
the effective dates, all amounts were transferred, and each employee was 100%
vested in the amounts under the prior plan.
Effective September 30, 1998, the Plan was revised in connection with the
transfer of Owens Corning's business of manufacturing and selling glass fiber
yarns and specialty materials to Advanced Glassfiber Yarns LLC ("AGY"). Those
eligible, salaried employees in the Plan as of September 30, 1998, that were
transferred to AGY are fully vested in their accounts under the Plan. Matching
contributions received after September 30, 1998, are made in cash rather than
Owens Corning stock.
(7) SUBSEQUENT EVENT
Effective January 1, 2000, the Company's match will increase from 35% to 50% of
the participants' contributions up to 10% of eligible compensation. Beginning
January 1, 2000, participants may transfer all prospective Company match and
profit sharing contributions to the investment option of their choice, and
beginning February 1, 2000 can redirect 1/3 of such contributions made prior to
December 31, 1999. As of January 1, 2001, 1/2 of the remaining restricted
Company match and profit sharing contributions may be redirected with the
balance becoming unrestricted January 1, 2002.
<PAGE>
- 13 -
OWENS CORNING
SAVINGS AND PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
(7) SUBSEQUENT EVENT (continued)
During 1998, the Company sold its business of manufacturing and selling glass
fiber yarns and specialty materials to AGY. As a result, effective January 1,
2000, employees of AGY will no longer participate in the Plan. AGY employee
account balances totaling approximately $19 million were transferred into a new
plan, which is administered by the management of AGY.
