DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 17, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Owens Corning | |
Entity Central Index Key | 1,370,946 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Well Known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Amendment Flag | false | |
Entity Common Stock Shares Outstanding | 110,913,833 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
NET SALES | $ 1,824 | $ 1,597 | $ 3,515 | $ 3,075 |
COST OF SALES | 1,406 | 1,189 | 2,742 | 2,325 |
Gross margin | 418 | 408 | 773 | 750 |
OPERATING EXPENSES | ||||
Marketing and administrative expenses | 187 | 155 | 372 | 297 |
Science and technology expenses | 22 | 21 | 45 | 42 |
Other expenses, net | 6 | 13 | 26 | 24 |
Total operating expenses | 215 | 189 | 443 | 363 |
OPERATING INCOME | 203 | 219 | 330 | 387 |
Non-operating (income) expense | (3) | 29 | (7) | 27 |
EARNINGS BEFORE INTEREST AND TAXES | 206 | 190 | 337 | 360 |
Interest expense, net | 33 | 27 | 61 | 53 |
EARNINGS BEFORE TAXES | 173 | 163 | 276 | 307 |
Income tax expense | 49 | 67 | 60 | 110 |
Equity in net loss of affiliates | (2) | 0 | (2) | 0 |
NET EARNINGS | 122 | 96 | 214 | 197 |
Net earnings attributable to noncontrolling interests | 1 | 0 | 1 | 0 |
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING | $ 121 | $ 96 | $ 213 | $ 197 |
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS | ||||
Basic (in dollars per share) | $ 1.09 | $ 0.86 | $ 1.92 | $ 1.76 |
Diluted (in dollars per share) | 1.08 | 0.85 | 1.90 | 1.74 |
Dividend (in dollars per share) | $ 0.21 | $ 0.2 | $ 0.42 | $ 0.40 |
WEIGHTED AVERAGE COMMON SHARES | ||||
Basic (in shares) | 110.9 | 111.6 | 111.2 | 112 |
Diluted (in shares) | 111.9 | 113.1 | 112.2 | 113.5 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
NET EARNINGS | $ 122 | $ 96 | $ 214 | $ 197 |
Currency translation adjustment (net of tax of $(6) and $6 for the three months ended June 30, 2018 and 2017, respectively, and $0 and $6 for the six months ended June 30, 2018 and 2017, respectively) | (74) | 29 | (89) | 65 |
Pension and other postretirement adjustment (net of tax of $0 and $(7) for the three months ended June 30, 2018 and 2017, respectively, and $(2) and $(8) for the six months ended June 30, 2018 and 2017, respectively) | 4 | 14 | 2 | 14 |
Hedging adjustment (net of tax of $0 and $1 for the three months ended June 30, 2018 and 2017, respectively, and $0 and $2 for the six months ended June 30, 2018 and 2017, respectively) | 0 | (1) | 1 | (3) |
COMPREHENSIVE EARNINGS | 52 | 138 | 128 | 273 |
Comprehensive earnings attributable to noncontrolling interests | 1 | 0 | 1 | 0 |
COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING | $ 51 | $ 138 | $ 127 | $ 273 |
CONSOLIDATED STATEMENTS OF COM4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Currency translation tax | $ (6) | $ 6 | $ 0 | $ 6 |
Pension and other postretirement tax | 0 | (7) | (2) | (8) |
Hedging tax | $ 0 | $ 1 | $ 0 | $ 2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 149 | $ 246 | |
Receivables, less allowances of $19 at June 30, 2018 and $19 at December 31, 2017 | 948 | 806 | |
Inventories | 984 | 841 | |
Assets held for sale | 5 | 12 | |
Other current assets | 114 | 80 | |
Total current assets | 2,200 | 1,985 | |
Property, plant and equipment, net | 3,722 | 3,425 | |
Goodwill | 1,968 | 1,507 | |
Intangible assets, net | 1,811 | 1,360 | |
Deferred income taxes | 115 | 144 | |
Other non-current assets | 234 | 211 | |
TOTAL ASSETS | 10,050 | 8,632 | |
CURRENT LIABILITIES | |||
Accounts payable and accrued liabilities | 1,376 | 1,277 | |
Short-term debt | 1 | 1 | |
Long-term debt – current portion | 4 | 4 | |
Total current liabilities | 1,381 | 1,282 | |
Long-term debt, net of current portion | 3,636 | 2,405 | |
Pension plan liability | 249 | 256 | |
Other employee benefits liability | 219 | 225 | |
Deferred income taxes | 127 | 37 | |
Other liabilities | 271 | 223 | |
OWENS CORNING STOCKHOLDERS’ EQUITY | |||
Preferred stock, par value $0.01 per share | [1] | 0 | 0 |
Common stock, par value $0.01 per share | [2] | 1 | 1 |
Additional paid in capital | 4,009 | 4,011 | |
Accumulated earnings | 1,729 | 1,575 | |
Accumulated other comprehensive deficit | (600) | (514) | |
Cost of common stock in treasury | [3] | (1,013) | (911) |
Total Owens Corning stockholders’ equity | 4,126 | 4,162 | |
Noncontrolling interests | 41 | 42 | |
Total equity | 4,167 | 4,204 | |
TOTAL LIABILITIES AND EQUITY | $ 10,050 | $ 8,632 | |
[1] | 10 shares authorized; none issued or outstanding at June 30, 2018 and December 31, 2017 | ||
[2] | 400 shares authorized; 135.5 issued and 110.9 outstanding at June 30, 2018; 135.5 issued and 111.5 outstanding at December 31, 2017 | ||
[3] | shares at June 30, 2018, and 24.0 shares at December 31, 2017 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 19 | $ 19 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 400,000,000 | 400,000,000 |
Common stock, issued | 135,500,000 | 135,500,000 |
Common stock, outstanding | 110,900,000 | 111,500,000 |
Treasury stock shares | 24,600,000 | 24,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES | ||
NET EARNINGS | $ 214 | $ 197 |
Adjustments to reconcile net earnings to cash provided by operating activities: | ||
Depreciation and amortization | 216 | 168 |
Deferred income taxes | 33 | 73 |
Provision for pension and other employee benefits liabilities | 0 | 35 |
Stock-based compensation expense | 22 | 20 |
Other non-cash | (3) | 6 |
Changes in operating assets and liabilities | (159) | (74) |
Pension fund contributions | (7) | (16) |
Payments for other employee benefits liabilities | (10) | (9) |
Other | 0 | (8) |
Net cash flow provided by operating activities | 306 | 392 |
NET CASH FLOW USED FOR INVESTING ACTIVITIES | ||
Cash paid for property, plant and equipment | (304) | (170) |
Proceeds from the sale of assets or affiliates | 14 | 3 |
Investment in subsidiaries and affiliates, net of cash acquired | (1,143) | (561) |
Other | 3 | 3 |
Net cash flow used for investing activities | (1,430) | (725) |
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES | ||
Proceeds from long-term debt | 389 | 588 |
Proceeds from senior revolving credit and receivables securitization facilities | 958 | 337 |
Payments on senior revolving credit and receivables securitization facilities | (700) | (337) |
Proceeds from term loan borrowing | 600 | 0 |
Payments on term loan borrowing | 15 | 0 |
Dividends paid | (46) | (45) |
Purchases of treasury stock | (136) | (134) |
Other | 1 | 3 |
Net cash flow provided by financing activities | 1,051 | 412 |
Effect of exchange rate changes on cash | (24) | 9 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (97) | 88 |
Cash, cash equivalents and restricted cash at beginning of period | 253 | 118 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ 156 | $ 206 |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
GENERAL | GENERAL Unless the context requires otherwise, the terms “Owens Corning,” “Company,” “we” and “our” in this report refer to Owens Corning, a Delaware corporation, and its subsidiaries. The Consolidated Financial Statements included in this report are unaudited, pursuant to certain rules and regulations of the Securities and Exchange Commission, and include, in the opinion of the Company, normal recurring 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. The December 31, 2017 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States ("U.S."). In connection with the Consolidated Financial Statements and Notes included in this report, reference is made to the Consolidated Financial Statements and Notes contained in the Company’s Form 10-K for the year ended December 31, 2017 (the " 2017 Form 10-K"). Certain reclassifications have been made to the periods presented for 2017 to conform to the classifications used in the periods presented for 2018 . Cash, Cash Equivalents and Restricted Cash On the Consolidated Statements of Cash Flows, the total of Cash, cash equivalents and restricted cash includes restricted cash of $7 million , $7 million , $7 million and $6 million as of June 30, 2018 , December 31, 2017 , June 30, 2017 and December 31, 2016 , respectively. Restricted cash primarily represents amounts received from a counterparty related to its performance assurance on an executory contract, and is included in Other current assets on the Consolidated Balance Sheets. These amounts are contractually required to be set aside, and the counterparty can exchange the cash for another form of performance assurance at its discretion. Accounting Pronouncements The following table summarizes recent accounting standard updates (ASU) issued by the Financial Accounting Standards Board (FASB) that could have an impact on the Company's Consolidated Financial Statements: Standard Description Effective Date for Company Effect on the Consolidated Financial Statements Recently adopted standards: ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)," as amended by ASU's 2015-14, 2016-08, 2016-10, 2016-11, 2016-12, 2016-20, 2017-05 and 2017-13 and 2017-14. This standard outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Entities can adopt this standard either through a retrospective or modified-retrospective approach. January 1, 2018 The adoption of this standard did not have a material impact on our Consolidated Financial Statements. Please refer to Note 3 of the Consolidated Financial Statements for transition disclosures, as well as other ongoing disclosure requirements. ASU 2016-16 "Income Taxes (Topic 740)" This standard requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. January 1, 2018 The adoption of this standard did not have a material impact on our Consolidated Financial Statements. Please refer to Note 16 for a detailed explanation of the cumulative effect of adoption recognized on January 1, 2018. ASU 2017-07 "Compensation - Retirement Benefits (Topic 715)" This standard requires that the other components of net benefit cost be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. Entities will adopt the presentation elements of this standard on a retrospective basis. January 1, 2018 The adoption of this standard did not have a material effect on our Consolidated Financial Statements for the three and six months ended June 30, 2018. The standard's retrospective adoption, though, will result in a full-year $60 million reclassification of non-service costs from various financial statement lines to non-operating expense, primarily related to pension settlement losses that were recorded in the second and fourth quarters of 2017 (as described in Note 13 of our 2017 Form 10-K). Please refer to Note 12 of the Consolidated Financial Statements for additional detail on this adoption. ASU 2017-12 "Derivatives and Hedging (Topic 815)" This standard changes how an entity assesses effectiveness of derivative instruments, potentially resulting in less ineffectiveness and more derivatives qualifying for hedge accounting. Entities may early adopt the standard in any interim period, with the effect of adoption being applied to existing hedging relationships as of the beginning of the fiscal year of adoption. January 1, 2018 The early adoption of this standard did not have a material impact on our Consolidated Financial Statements. Please refer to Note 5 of the Consolidated Financial Statements for additional detail on this adoption. Recently issued standards: ASU 2016-02 "Leases (Topic 842)," as amended by ASU 2017-13, 2018-01 and 2018-10, and potentially subject to change through the "Targeted Improvements" Proposed ASU exposure draft released on January 5, 2018. The standard requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. The recognition and presentation of expenses will depend on classification as a finance or operating lease. Entities will adopt this standard through a retrospective approach with certain practical expedients available, the extent to which will be affected by the proposed ASU draft. January 1, 2019 We are currently assessing the potential impact of this standard adoption on our financial reporting processes and disclosures. We believe that our adoption of the standard will likely have a material impact to our Consolidated Balance Sheets for the recognition of certain operating leases as right-of-use assets and lease liabilities. (Our operating lease obligations are described in Note 8 of our 2017 Form 10-K.) We are in the process of analyzing our lease portfolio, implementing systems, developing processes and finalizing our accounting policies to comply with the standard's retrospective adoption requirements. ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326)" This standard replaces the incurred loss methodology for recognizing credit losses with a current expected credit losses model and applies to all financial assets, including trade receivables. Entities will adopt the standard using a modified-retrospective approach. January 1, 2020 We are currently assessing the impact this standard will have on our Consolidated Financial Statements. Our current accounts receivable policy (as described in Note 1 of our 2017 Form 10-K) uses historical and current information to estimate the amount of probable credit losses in our existing accounts receivable. We have not yet analyzed our current systems and methods to determine the impact of using forward-looking information to estimate expected credit losses. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has three reportable segments: Composites, Insulation and Roofing. Accounting policies for the segments are the same as those for the Company. The Company’s three reportable segments are defined as follows: Composites – The Composites segment includes vertically integrated downstream activities. The Company manufactures, fabricates and sells glass reinforcements in the form of fiber. Glass reinforcement materials are also used downstream by the Composites segment to manufacture and sell glass fiber products in the form of fabrics, non-wovens and other specialized products. Insulation – Within our Insulation segment, the Company manufactures and sells fiberglass insulation into residential, commercial, industrial and other markets for both thermal and acoustical applications. It also manufactures and sells glass fiber pipe insulation, flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation and foam insulation used in above- and below-grade construction applications. Roofing – Within our Roofing segment, the Company manufactures and sells residential roofing shingles, oxidized asphalt materials, roofing components used in residential and commercial construction and specialty applications, and synthetic packaging materials. NET SALES The following table summarizes our Net sales by segment and geographic region (in millions). Corporate eliminations (shown below) largely reflect intercompany sales from Composites to Roofing. External customer sales are attributed to geographic region based upon the location from which the product is shipped to the external customer. Three Months Ended Six Months Ended 2018 2017 2018 2017 Reportable Segments Composites $ 541 $ 537 $ 1,052 $ 1,048 Insulation 682 439 1,278 838 Roofing 659 684 1,301 1,311 Total reportable segments 1,882 1,660 3,631 3,197 Corporate eliminations (58 ) (63 ) (116 ) (122 ) NET SALES $ 1,824 $ 1,597 $ 3,515 $ 3,075 External Customer Sales by Geographic Region United States $ 1,189 $ 1,139 $ 2,317 $ 2,190 Europe 326 147 605 287 Asia-Pacific 176 185 318 338 Rest of world 133 126 275 260 NET SALES $ 1,824 $ 1,597 $ 3,515 $ 3,075 EARNINGS BEFORE INTEREST AND TAXES Earnings before interest and taxes (EBIT) by segment consist of net sales less related costs and expenses and are presented on a basis that is used internally for evaluating segment performance. Certain items, such as general corporate expenses or income and certain other expense or income items, are excluded from the internal evaluation of segment performance. Accordingly, these items are not reflected in EBIT for our reportable segments and are included within Corporate, Other and Eliminations. The following table summarizes EBIT by segment (in millions): Three Months Ended Six Months Ended 2018 2017 2018 2017 Reportable Segments Composites $ 71 $ 84 $ 131 $ 155 Insulation 49 29 81 34 Roofing 127 155 224 280 Total reportable segments 247 268 436 469 Restructuring costs (7 ) (29 ) (12 ) (29 ) Acquisition-related costs (1 ) (10 ) (15 ) (11 ) Recognition of acquisition inventory fair value step-up — — (2 ) — Litigation settlement gain, net of legal fees — 29 — 29 Pension settlement losses — (30 ) — (30 ) General corporate expense and other (33 ) (38 ) (70 ) (68 ) Total corporate, other and eliminations (41 ) (78 ) (99 ) (109 ) EBIT $ 206 $ 190 $ 337 $ 360 |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE ASU 2014-09 Adoption On January 1, 2018, we adopted ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" and the related amendments (collectively, "ASC 606"). We used the modified retrospective method of adoption, in which the cumulative effect of initially applying the new standard to existing contracts (as of January 1, 2018) was recorded as a $2 million decrease to the January 1, 2018 opening balance of Accumulated earnings. The effect of this adoption was immaterial to our Consolidated Financial Statements, and we do not expect a material effect to our Consolidated Financial Statements on an ongoing basis. Under the modified-retrospective method of adoption, the comparative information in the Consolidated Financial Statements has not been revised and continues to be reported under the previously applicable revenue accounting guidance ("ASC 605"). If ASC 605 had been applied to the first six months of 2018, Inventories and Accumulated earnings would have been $2 million higher on the Consolidated Balance Sheet with no effect to the Consolidated Statements of Earnings. Revenue Recognition Many of our customer volume commitments are short-term and our performance obligations are generally limited to single purchase orders. Substantially all of our revenue is recognized at a point-in-time when control of goods transfers to the customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms or consignment arrangements). We have elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of performance obligations. We used the practical expedients to omit the disclosure of remaining performance obligations for contracts with an original expected duration of one year or less and for contracts where we have the right to invoice for performance completed to date. We recognize revenue as the amount of consideration that we expect to receive in exchange for transferring promised goods or services to customers. We do not adjust the transaction price for the effects of a significant financing component, as the time period between control transfer of goods and services and expected payment is one year or less. At the time of sale, we estimate provisions for different forms of variable consideration (discounts, rebates, returns and other refund liabilities) based on historical experience, current conditions and contractual obligations, as applicable. The estimated transaction price is typically not subject to significant reversals. We adjust these estimates when the most likely amount of consideration we expect to receive changes, although these changes are typically minor. During the three and six months ended June 30, 2018 , the adjustments related to performance obligations satisfied in previous periods were immaterial. Sales, value-added and other similar taxes that we collect are excluded from revenue. Disaggregated Revenue The following table shows a disaggregation of Net sales (in millions): For the three months ended June 30, 2018 Reportable Segments Composites Insulation Roofing Eliminations Consolidated Disaggregation Categories U.S. residential $ 75 $ 226 $ 578 $ (54 ) $ 825 U.S. commercial and industrial 156 160 50 (2 ) 364 Europe 156 166 4 — 326 Asia-Pacific 122 51 3 — 176 Rest of world 32 79 24 (2 ) 133 NET SALES $ 541 $ 682 $ 659 $ (58 ) $ 1,824 For the six months ended June 30, 2018 Reportable Segments Composites Insulation Roofing Eliminations Consolidated Disaggregation Categories U.S. residential $ 151 $ 448 $ 1,137 $ (107 ) $ 1,629 U.S. commercial and industrial 295 307 89 (3 ) 688 Europe 313 285 7 — 605 Asia-Pacific 228 84 7 (1 ) 318 Rest of world 65 154 61 (5 ) 275 NET SALES $ 1,052 $ 1,278 $ 1,301 $ (116 ) $ 3,515 Please refer to Note 2 and Item 1 of our 2017 Form 10-K for further information on our three reportable segments (Composites, Insulation and Roofing). Our contracts with customers are broadly similar in nature throughout our reportable segments, but the amount, timing and uncertainty of revenue and cash flows may vary in each reportable segment due to geographic and end-market economic factors. In the United States, sales are primarily related to the residential housing market and commercial and industrial applications. Residential market demand is driven by housing starts and repair and remodeling activity (influenced by existing home sales, seasonal home improvement and damage from major storms). Significant portions of our residential products are used interchangeably in both new construction and repair and remodeling, and our customers typically distribute (or use) the products for both applications. U.S. commercial and industrial revenues are largely driven by U.S. industrial production growth. Outside of the United States (Europe, Asia-Pacific and Rest of world), sales are primarily related to commercial and industrial applications and, to a lesser extent, residential applications in certain countries. Throughout the international regions, demand is primarily driven by industrial production growth in each respective geographical region. Contract Balances We typically do not satisfy performance obligations without obtaining an unconditional right to payment from customers and, therefore, do not carry contract asset balances on the Consolidated Balance Sheets. Contract liability balances are recorded separately from receivables on the Consolidated Balance Sheets in either Accounts payable and accrued liabilities or Other liabilities, depending on the timing of performance obligation satisfaction. We sell separately-priced warranties that extend certain product and workmanship coverages beyond our standard product warranty, which is described in Note 9 . The up-front consideration on extended warranty contracts is deferred and recognized as revenue over time, based on the respective coverage period, ranging from 16 to 20 years. On an annual basis, we expect to recognize approximately $2 million of revenue associated with these extended warranty contracts. Additionally, in certain limited cases, we receive consideration before goods or services are transferred to the customer. These customer down payments and deposits are deferred, and typically recognized as revenue in the following quarter when we satisfy the related performance obligations. As of January 1, 2018, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled $46 million , of which $13 million was recognized as revenue in the first six months of 2018 . As of June 30, 2018 , our contract liability balances totaled $52 million . As a practical expedient, we recognize incremental costs of obtaining a contract, if any, as an expense when incurred if the amortization period of the asset would have been one year or less. We do not have any costs to obtain or fulfill a contract that are capitalized under ASC 606. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consist of the following (in millions): June 30, 2018 December 31, 2017 Finished goods $ 664 $ 562 Materials and supplies 320 279 Total inventories $ 984 $ 841 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to, among other risks, the impact of changes in commodity prices, foreign currency exchange rates, and interest rates in the normal course of business. The Company’s risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes derivative financial instruments to offset a portion of these risks. The Company uses derivative financial instruments only to the extent necessary to hedge identified business risks, and does not enter into such transactions for trading purposes. The Company generally does not require collateral or other security with counterparties to these financial instruments and is therefore subject to credit risk in the event of nonperformance; however, the Company monitors credit risk and currently does not anticipate nonperformance by other parties. Contracts with counterparties generally contain right of offset provisions. These provisions effectively reduce the Company’s exposure to credit risk in situations where the Company has gain and loss positions outstanding with a single counterparty. It is the Company’s policy to offset on the Consolidated Balance Sheets the amounts recognized for derivative instruments with any cash collateral arising from derivative instruments executed with the same counterparty under a master netting agreement. As of June 30, 2018 and December 31, 2017 , the Company did not have any amounts on deposit with any of its counterparties, nor did any of its counterparties have any amounts on deposit with the Company. During the first quarter of 2018 , the Company early adopted ASU 2017-12, "Derivatives and Hedging (Topic 815)," which was issued with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements and to make certain targeted improvements to simplify the application of previously applicable hedge accounting guidance. This adoption did not have a material effect on our Consolidated Financial Statements, and did not result in any cumulative adjustment to equity as of the date of adoption. Please refer to the Cash Flow Hedges and Net Investment Hedges paragraphs below for further information. Derivative Fair Values Our derivatives consist of natural gas forward swaps, cross-currency swaps and foreign exchange forward contracts, all of which are over-the-counter and not traded through an exchange. The Company uses widely accepted valuation tools to determine fair value, such as discounting cash flows to calculate a present value for the derivatives. The models use Level 2 inputs, such as forward curves and other commonly quoted observable transactions and prices. The fair value of our derivatives and hedging instruments are all classified as Level 2 investments within the three-tier hierarchy. The following table presents the fair value of derivatives and hedging instruments and the respective location on the Consolidated Balance Sheets (in millions): Fair Value at Location June 30, 2018 December 31, 2017 Derivative assets designated as hedging instruments: Net investment hedges: Cross-currency swaps Other current assets $ 8 $ 7 Cash flow hedges: Natural gas forward swaps Other current assets $ 2 $ 1 Foreign exchange forward contracts Other current assets $ 1 $ — Derivative liabilities designated as hedging instruments: Net investment hedges: Cross-currency swaps Other liabilities $ 36 $ 38 Cash flow hedges: Natural gas forward swaps Accounts payable and accrued liabilities $ — $ 1 Foreign exchange forward contracts Accounts payable and accrued liabilities $ 1 $ — Derivative assets not designated as hedging instruments: Foreign exchange forward contracts Other current assets $ 38 $ 1 Derivative liabilities not designated as hedging instruments: Foreign exchange forward contracts Accounts payable and accrued liabilities $ 3 $ 1 Consolidated Statements of Earnings Activity The following table presents the impact and respective location of derivative activities on the Consolidated Statements of Earnings (in millions): Three Months Ended Six Months Ended Location 2018 2017 2018 2017 Derivative activity designated as hedging instruments: Natural gas cash flow hedges: Amount of gain reclassified from AOCI (as defined below) into earnings Cost of sales $ — $ (1 ) $ — $ (2 ) Cross-currency swap net investment hedges: Amount of gain recognized in earnings on derivative amounts excluded from effectiveness testing Interest expense, net $ (3 ) $ — $ (6 ) $ — Interest rate swap fair value hedge: Amount of loss recognized in earnings Interest expense, net $ 1 $ 1 $ 1 $ 1 Derivative activity not designated as hedging instruments: Natural gas: Amount of loss recognized in earnings Other expenses, net $ — $ 1 $ — $ 1 Foreign currency: Amount of (gain)/loss recognized in earnings (a) Other expenses, net $ (40 ) $ 4 $ (44 ) $ 4 (a) (Gains)/losses related to foreign currency derivatives were substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures, which were also recorded in Other expenses, net . Please refer to the "Other Derivatives" section below for additional detail. Consolidated Statements of Comprehensive Earnings Activity The following table presents the impact of derivative activities on the Consolidated Statements of Comprehensive Earnings (in millions): Amount of (Gain) Loss Recognized in Comprehensive Earnings Hedging Type Derivative Financial Instrument Three Months Ended Six Months Ended Net investment hedge Cross-currency swaps $ (26 ) $ (1 ) Cash flow hedge Natural gas forward swaps $ (1 ) $ (2 ) Cash Flow Hedges The Company uses a combination of derivative financial instruments, which qualify as cash flow hedges, and physical contracts to manage forecasted exposure to electricity and natural gas prices. The Company's policy for electricity exposure is to hedge up to 75% of its total forecasted exposure for the current calendar year and up to 65% of its total forecasted exposure for the first calendar year forward. The Company’s policy for natural gas exposure is to hedge up to 75% of its total forecasted exposure for the next three months and up to 60% of its total forecasted exposure for the following three months, and lesser amounts for the remaining periods. Based on market conditions, approved variation from these standard policies may occur. Currently, the Company is managing risk associated with electricity prices only through physical contracts and has natural gas derivatives designated as hedging instruments that mature within 15 months . As of June 30, 2018 , the notional amounts of these natural gas forward swaps was 3 MMBtu (or MMBtu equivalent) based on U.S. and European indices. As of June 30, 2018 , the Company had notional amounts of $18 million for derivative financial instruments designated as cash flow hedges for foreign currency exposures in Polish Zloty primarily related to European Euro, and also $18 million for exposures in Swedish Krona primarily related to European Euro. The Company performs an analysis for effectiveness of its derivatives designated as hedging instruments at the end of each quarter based on the terms of the contracts and the underlying items being hedged. The change in the fair value of cash flow hedges is deferred in Accumulated other comprehensive income (deficit) ("AOCI") and is subsequently recognized in Cost of sales (for commodity and foreign currency cash flow hedges) on the Consolidated Statements of Earnings in order to mirror the location of the hedged items impacting earnings. Cash settlements for commodity and foreign currency hedges qualifying as cash flow hedges are included in Other operating activities in the Consolidated Statements of Cash Flows. As of June 30, 2018 , $1 million of gains included in AOCI on the Consolidated Balance Sheet relate to natural gas and foreign currency forward contracts that are expected to impact earnings during the next 12 months. Transactions and events that are expected to occur over the next 12 months that will necessitate recognizing these deferred amounts include the recognition of the hedged item through earnings. Net Investment Hedges The Company has translation exposure resulting from translating the financial statements of foreign subsidiaries into U.S. Dollars, which is recognized in Currency translation adjustment (a component of AOCI). The Company uses cross-currency forward contracts to hedge a portion of the net investment in foreign subsidiaries against fluctuations in foreign exchange rates. As of June 30, 2018 , the notional amount of these derivative financial instruments was $516 million related to the U.S Dollar and European Euro. In the first quarter of 2018 , we redesignated these derivative financial instruments that qualify as hedges of net investments in foreign operations using the spot method. The changes in fair values of these derivative instruments are recognized in Currency translation adjustment (a component of AOCI), with recognition of the excluded components amortized to Interest expense, net on the Consolidated Statements of Earnings. For the first six months of 2018 , the difference between the change in fair value of the excluded components and the amounts recognized to earnings was a $17 million increase to the net fair value liability. Prior to our first quarter 2018 adoption of ASU 2017-12, all settlements and changes in fair values of these derivative instruments were recognized in Currency translation adjustment (a component of AOCI), and there has been no ineffectiveness on these hedging relationships. Cash settlements are included in Other investing activities in the Consolidated Statements of Cash Flows. Other Derivatives The Company uses forward currency exchange contracts to manage existing exposures to foreign exchange risk related to assets and liabilities recorded on the Consolidated Balance Sheets. As of June 30, 2018 , the Company had notional amounts of $763 million for non-designated derivative financial instruments related to foreign currency exposures in U.S. Dollars primarily related to Brazilian Real, Chinese Yuan, European Euro, Indian Rupee, Japanese Yen, and South Korean Won. The growth in notional amounts (as compared to $109 million at December 31, 2017 ) was primarily related to new derivative financial instruments used to hedge increased European Euro balance sheet exposures following our acquisition of Paroc Group Oy ("Paroc"). In addition, the Company had notional amounts of $157 million for non-designated derivative financial instruments related to foreign currency exposures in European Euro primarily related to the Russian Ruble, Polish Zloty and Swedish Krona. Gains and losses resulting from the changes in fair value of these instruments are recorded in Other expenses, net on the Consolidated Statements of Earnings, and are substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures (which are also recorded in Other expenses, net ). |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets and goodwill consist of the following (in millions): June 30, 2018 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships 20 $ 559 $ (124 ) $ 435 Technology 17 323 (124 ) 199 Other 15 58 (28 ) 30 Indefinite-lived intangible assets: Trademarks 1,147 — 1,147 Total intangible assets $ 2,087 $ (276 ) $ 1,811 Goodwill $ 1,968 December 31, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships 20 $ 363 $ (109 ) $ 254 Technology 18 255 (116 ) 139 Other 8 47 (26 ) 21 Indefinite-lived intangible assets: Trademarks 946 — 946 Total intangible assets $ 1,611 $ (251 ) $ 1,360 Goodwill $ 1,507 Goodwill The Company tests goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of each year, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of a reporting unit below its carrying amount. No testing was deemed necessary in the first six months of 2018 . The changes in the net carrying amount of goodwill by segment are as follows (in millions): Composites Insulation Roofing Total Balance at December 31, 2017 $ 58 $ 1,049 $ 400 $ 1,507 Acquisitions (see Note 8) — 505 — 505 Foreign currency translation (1 ) (41 ) (2 ) (44 ) Balance at June 30, 2018 $ 57 $ 1,513 $ 398 $ 1,968 Other Intangible Assets The Other category below primarily includes franchise agreements and quarry and emission rights. The changes in the gross carrying amount of intangible assets by asset group are as follows (in millions): Customer Relationships Technology Trademarks Other Total Balance at December 31, 2017 $ 363 $ 255 $ 946 $ 47 $ 1,611 Acquisitions (see Note 8) 215 73 213 7 508 Other additions, net — — — 4 4 Foreign currency translation (19 ) (5 ) (12 ) — (36 ) Balance at June 30, 2018 $ 559 $ 323 $ 1,147 $ 58 $ 2,087 The estimated amortization expense for intangible assets for the next five years is as follows (in millions): Period Amortization (a) 2019 $ 51 2020 $ 51 2021 $ 50 2022 $ 46 2023 $ 43 (a) The yearly amortization amounts in the table above include approximately $24 million of aggregate amortization expense related to the purchase price allocation of the acquisition of Pittsburgh Corning Corporation and Pittsburgh Corning Europe NV (collectively, "Pittsburgh Corning") and the preliminary purchase price allocation of the Paroc acquisition. See Note 8 for more details of these acquisitions. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPTMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following (in millions): June 30, December 31, 2017 Land $ 257 $ 251 Buildings and leasehold improvements 1,025 944 Machinery and equipment 4,395 4,211 Construction in progress 488 350 6,165 5,756 Accumulated depreciation (2,443 ) (2,331 ) Property, plant and equipment, net $ 3,722 $ 3,425 Machinery and equipment includes certain precious metals used in our production tooling, which comprise approximately 12% of total machinery and equipment as of June 30, 2018 and December 31, 2017 . Precious metals used in our production tooling are depleted as they are consumed during the production process, which typically represents an annual expense of less than 3% of the outstanding carrying value. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS During the first six months of 2018 , the Company completed acquisitions with an aggregate purchase price of $1,147 million , net of cash acquired. Paroc Acquisition On February 5, 2018, the Company acquired all the outstanding equity of Paroc, a leading producer of mineral wool insulation for building and technical applications in Europe, for approximately $1,121 million (approximately 900 million Euro), net of cash acquired. The acquisition of Paroc expands the Company's mineral wool technology, grows its presence in the European insulation market, provides access to a variety of new end-use markets and will increase the Insulation segment's geographic sales mix outside of the U.S. and Canada. Paroc's operating results and a preliminary purchase price allocation have been included in the Company’s Insulation segment within the Consolidated Financial Statements. The Company is continuing to obtain information to complete its valuation of certain assets and liabilities. During the quarter ended June 30, 2018, the Company recorded certain immaterial measurement period adjustments to the purchase price allocation which are reflected in the value of goodwill noted below. The following table details the identifiable indefinite and definite-lived intangible assets acquired, their preliminary fair values and estimated weighted average useful lives (in millions): Type of Intangible Asset Preliminary Fair Value Weighted Average Useful Life Customer relationships $ 215 20 Technology - Know-how 61 15 Technology - Patented 12 5 Quarry Rights 7 45 Trademarks 213 Indefinite Total $ 508 During the first six months of 2018 , the Consolidated Statements of Earnings included $215 million in Net sales attributable to the acquisition and a $2 million charge related to inventory fair value step-up in Cost of Sales. The acquisition also included Property, plant and equipment, net with a fair value of approximately $306 million and deferred tax liabilities of $99 million . Goodwill has been initially valued at approximately $486 million , with none of the amount expected to be tax-deductible. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition. The Company has not yet assigned the goodwill acquired to a reporting unit. The acquisition also included cash of approximately $17 million . The Company expects to complete its valuations no later than one year from the acquisition date and adjustments will continue to be made to the fair value of the identifiable assets acquired and liabilities assumed. Those adjustments may or may not be material. The pro forma effect of this acquisition on Net sales and Net earnings attributable to Owens Corning was immaterial. Pittsburgh Corning Acquisition On June 27, 2017, the Company acquired all the outstanding equity of Pittsburgh Corning Corporation and Pittsburgh Corning Europe NV (collectively, "Pittsburgh Corning"), the world’s leading producer of cellular glass insulation systems for commercial and industrial markets, for approximately $563 million , net of cash acquired. This acquisition expands the Company’s position in commercial and industrial product offerings and grows its presence in Europe and Asia. Pittsburgh Corning's operating results since the date of acquisition and purchase price allocation have been included in the Company's Insulation segment in the Consolidated Financial Statements. The following table details the identifiable indefinite and definite-lived intangible assets, their fair values and estimated weighted average useful lives (in millions): Type of Intangible Asset Fair Value Weighted Average Useful Life Customer relationships $ 107 19 Technology 37 15 Trademarks 101 Indefinite Total $ 245 During the six months ended June 30, 2018 , the Consolidated Statements of Earnings included $128 million in Net sales attributable to the Pittsburgh Corning acquisition (related to the one-year post-acquisition period). Goodwill has been valued at approximately $155 million , with none of the amount expected to be tax-deductible. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition. The acquisition also included cash of approximately $52 million . The pro forma effect of this acquisition on Net sales and Net earnings attributable to Owens Corning was not material. |
WARRANTIES
WARRANTIES | 6 Months Ended |
Jun. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
WARRANTIES | WARRANTIES The Company records a liability for warranty obligations at the date the related products are sold. Adjustments are made as new information becomes available. Please refer to Note 3 for information about our separately-priced extended warranty contracts. A reconciliation of the warranty liability is as follows (in millions): Six Months Ended June 30, 2018 Beginning balance $ 55 Amounts accrued for current year 11 Settlements of warranty claims (6 ) Ending balance $ 60 |
RESTRUCTURING AND ACQUISITION-R
RESTRUCTURING AND ACQUISITION-RELATED COSTS | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING AND ACQUISITION-RELATED COSTS | RESTRUCTURING AND ACQUISITION-RELATED COSTS The Company may incur restructuring, transaction and integration costs related to acquisitions, and may incur restructuring costs in connection with its global cost reduction and productivity initiatives. Acquisition-Related Costs During the first six months of 2018 , the Company incurred $15 million of transaction and integration costs related to its announced acquisitions. Please refer to Note 8 of the Consolidated Financial Statements for further information on these acquisitions. These costs are recorded within Corporate, Other and Eliminations. See the Restructuring Costs paragraph below for detail on additional costs related to these acquisitions. The following table presents the impact and respective location of acquisition-related costs for the first six months of 2018 on the Consolidated Statements of Earnings (in millions): Location Paroc Acquisition Pittsburgh Corning Acquisition Total Marketing and administrative expenses $ 5 $ 1 $ 6 Other expenses, net 9 — 9 Total acquisition-related costs $ 14 $ 1 $ 15 Restructuring Costs Pittsburgh Corning Acquisition-Related Restructuring Following the acquisition of Pittsburgh Corning into the Company's Insulation segment, the Company took actions to realize expected synergies from the newly acquired operations. During the first six months of 2018, the Company recorded $1 million of accelerated depreciation related to these actions. The Company expects to incur an immaterial amount of incremental costs in the remainder of 2018 related to these actions. 2017 Cost Reduction Actions During the second quarter of 2017, the Company took actions to avoid future capital outlays and reduce costs in its Composites segment, mainly through decisions to close certain sub-scale manufacturing facilities in Asia Pacific (including Doudian, Peoples Republic of China and Thimmapur, India) and North America (Mexico City, Mexico and Brunswick, Maine) and to reposition assets in its Chambery, France operation. During the first six months of 2018 , the Company recorded $11 million of charges, comprised of $2 million of severance, $7 million of accelerated depreciation and $2 million from exit activities associated with these actions. The Company expects to recognize approximately $10 million of incremental costs in 2018. Consolidated Statements of Earnings Classification The following table presents the impact and respective location of total restructuring costs on the Consolidated Statements of Earnings, which are included within Corporate, Other and Eliminations (in millions): Three Months Ended June 30, Six Months Ended June 30, Type of cost Location 2018 2017 2018 2017 Accelerated depreciation Cost of sales $ 3 $ 2 $ 8 $ 2 Other exit costs Cost of sales 2 2 4 2 Severance Other expenses, net 1 25 2 25 Other exit costs/(gains) Other expenses, net 1 — (2 ) — Total restructuring costs $ 7 $ 29 $ 12 $ 29 Summary of Unpaid Liabilities The following table summarizes the status of the unpaid liabilities from the Company's restructuring activity (in millions): 2017 Cost Reduction Actions Pittsburgh Corning Acquisition-Related Restructuring Total Balance at December 31, 2017 $ 11 $ 9 $ 20 Restructuring costs 11 1 12 Payments (10 ) (2 ) (12 ) Non-cash items and reclassifications to other accounts (5 ) (1 ) (6 ) Balance at June 30, 2018 $ 7 $ 7 $ 14 Cumulative charges incurred $ 40 $ 18 $ 58 As of June 30, 2018 , the remaining liability balance is comprised of $14 million of severance, inclusive of $2 million of non-current severance and $12 million of severance the Company expects to pay over the next twelve months. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Details of the Company’s outstanding long-term debt, as well as the fair values, are as follows (in millions): June 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value 4.20% senior notes, net of discount and financing fees, due 2022 $ 597 101 % $ 597 105 % 4.20% senior notes, net of discount and financing fees, due 2024 393 100 % 392 105 % 3.40% senior notes, net of discount and financing fees, due 2026 395 91 % 395 98 % 7.00% senior notes, net of discount and financing fees, due 2036 400 116 % 400 132 % 4.30% senior notes, net of discount and financing fees, due 2047 588 82 % 588 99 % 4.40% senior notes, net of discount and financing fees, due 2048 389 83 % — n/a Receivables securitization facility, maturing in 2020 (a) 258 100 % — n/a Various capital leases, due through and beyond 2050 (a) 29 100 % 31 100 % Term loan borrowing, maturing in 2021 (a) 585 100 % — n/a Unamortized interest rate swap basis adjustment 6 n/a 6 n/a Total long-term debt 3,640 n/a 2,409 n/a Less – current portion (a) 4 100 % 4 100 % Long-term debt, net of current portion $ 3,636 n/a $ 2,405 n/a (a) The Company determined that the book value of the above noted long-term debt instruments approximates fair value. The fair values of the Company's outstanding long-term debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values. Senior Notes The Company issued $400 million of 2048 senior notes on January 25, 2018. Interest on the notes is payable semiannually in arrears on January 30 and July 30 each year, beginning on July 30, 2018. The proceeds from these notes were used, along with borrowings on a $600 million term loan commitment and borrowings on the Receivables Securitization Facility (as defined below), to fund the purchase of Paroc in the first quarter of 2018. The Company issued $600 million of 2047 senior notes on June 26, 2017. Interest on the notes is payable semiannually in arrears on January 15 and July 15 each year, beginning on January 15, 2018. A portion of the proceeds from these notes was used to fund the purchase of Pittsburgh Corning in 2017 and for general corporate purposes. The remaining proceeds were used to repay $144 million of our 2019 senior notes and $140 million of our 2036 senior notes. The Company issued $400 million of 2026 senior notes on August 8, 2016. Interest on the notes is payable semiannually in arrears on February 15 and August 15 each year, beginning on February 15, 2017. A portion of the proceeds from these notes was used to redeem $158 million of our 2016 senior notes. The remaining proceeds were used to pay down portions of our Receivables Securitization Facility and for general corporate purposes. The Company issued $400 million of 2024 senior notes on November 12, 2014. Interest on the notes is payable semiannually in arrears on June 1 and December 1 each year, beginning on June 1, 2015. A portion of the proceeds from these notes was used to repay $242 million of our 2016 senior notes and $105 million of our 2019 senior notes. The remaining proceeds were used to pay down our Senior Revolving Credit Facility (as defined below), finance general working capital needs, and for general corporate purposes. The Company issued $600 million of 2022 senior notes on October 17, 2012. Interest on the notes is payable semiannually in arrears on June 15 and December 15 each year, beginning on June 15, 2013. The proceeds of these notes were used to refinance $250 million of our 2016 senior notes and $100 million of our 2019 senior notes and pay down our Senior Revolving Credit Facility. On October 31, 2006, the Company issued $540 million of 2036 senior notes. The proceeds of these notes were used to pay certain unsecured and administrative claims, finance general working capital needs and for general corporate purposes. Collectively, the senior notes above are referred to as the “Senior Notes.” The Senior Notes are general unsecured obligations of the Company and rank pari passu with all existing and future senior unsecured indebtedness of the Company. In May 2018, the Company entered into a new agreement covering our Senior Revolving Credit Facility. This new agreement, among other things, removed all subsidiaries of the Company as guarantors under our Senior Revolving Credit Facility, unless certain conditions precedent are met that do not exist at this time, and had the effect of removing the guarantees of such subsidiaries under our Senior Notes. In addition, we elected to amend our Registration Statement on Form S-3 to eliminate the guarantees of our Senior Notes as registered securities. The Company has the option to redeem all or part of the Senior Notes at any time at a “make-whole” redemption price. The Company is subject to certain covenants in connection with the issuance of the Senior Notes that it believes are usual and customary. The Company was in compliance with these covenants as of June 30, 2018 . In the first quarter of 2016, the Company terminated interest rate swaps designated to hedge a portion of the 4.20% senior notes due 2022. The residual fair value of the swaps is recognized in Long-term debt, net of current portion on the Consolidated Balance Sheets as an unamortized interest rate swap basis adjustment. Senior Revolving Credit Facility The Company has an $800 million Senior Revolving Credit Facility with a maturity date in May 2023. In May 2018, the Company entered into a new agreement to extend its maturity to May 2023 and remove all subsidiaries of the Company as guarantors under the Senior Revolving Credit Facility, unless certain conditions precedent are met that do not exist at this time. The Senior Revolving Credit Facility includes both borrowings and letters of credit. Borrowings under the Senior Revolving Credit Facility may be used for general corporate purposes and working capital. The Company has the discretion to borrow under multiple options, which provide for varying terms and interest rates including the United States prime rate, federal funds rate plus a spread or LIBOR plus a spread. The Senior Revolving Credit Facility contains various covenants, including a maximum allowed leverage ratio and a minimum required interest expense coverage ratio, that the Company believes are usual and customary for a senior unsecured credit agreement. The Company was in compliance with these covenants as of June 30, 2018 . Please refer to the Credit Facility Utilization paragraph below for liquidity information as of June 30, 2018 . Term Loan Commitments The Company obtained two term loan commitments on October 27, 2017 for $300 million and $600 million , respectively, (collectively, the "Term Loan Commitments"). The Company entered into the Term Loan Commitments, in part, to pay a portion of the purchase price of the Paroc acquisition. In the first quarter of 2018, the Company borrowed on the $600 million term loan commitment, along with borrowings on the Receivables Securitization Facility and the proceeds of the 2048 senior notes, to fund the purchase of Paroc. The $600 million term loan borrowing (the "Term Loan Borrowing") requires partial quarterly principal repayments and full repayment by February 2021. On February 12, 2018, the Company voluntarily reduced the entire $300 million term loan commitment, thus eliminating the availability of credit under such commitment. On May 4, 2018, the Company amended the terms of the $600 million term loan, among other things, to provide for a reduction in the applicable margin used in the calculation of interest on the outstanding indebtedness and mirror the terms of the new Senior Revolving Credit Facility. Receivables Securitization Facility Included in long-term debt on the Consolidated Balance Sheets are borrowings outstanding under a Receivables Purchase Agreement (RPA) that are accounted for as secured borrowings in accordance with ASC 860, "Accounting for Transfers and Servicing." Owens Corning Sales, LLC and Owens Corning Receivables LLC, each a subsidiary of the Company, have a $280 million RPA with certain financial institutions. The securitization facility (the "Receivables Securitization Facility") has been amended from time to time, with a maturity date of May 2020. The facility was most recently amended in April 2018 to increase the borrowing limit from $250 million to $280 million . No other significant terms impacting liquidity were amended. The Company has the ability to borrow at the lenders' cost of funds, which approximates A-1/P-1 commercial paper rates vs. LIBOR, plus a fixed spread. The Receivables Securitization Facility contains various covenants, including a maximum allowed leverage ratio and a minimum required interest expense coverage ratio that the Company believes are usual and customary for a securitization facility. The Company was in compliance with these covenants as of June 30, 2018 . Please refer to the Credit Facility Utilization section below for liquidity information as of June 30, 2018 . Owens Corning Receivables LLC’s sole business consists of the purchase or acceptance through capital contributions of trade receivables and related rights from Owens Corning Sales, LLC and the subsequent retransfer of or granting of a security interest in such trade receivables and related rights to certain purchasers who are party to the RPA. Owens Corning Receivables LLC is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of Owens Corning Receivables LLC’s assets prior to any assets or value in Owens Corning Receivables LLC becoming available to Owens Corning Receivables LLC’s equity holders. The assets of Owens Corning Receivables LLC are not available to pay creditors of the Company or any other affiliates of the Company or Owens Corning Sales, LLC. Credit Facility Utilization The following table shows how the Company utilized its primary sources of liquidity (in millions): Balance at June 30, 2018 Senior Revolving Credit Facility Receivables Securitization Facility Facility size or borrowing limit $ 800 $ 280 Collateral capacity limitation on availability n/a 19 Outstanding borrowings — 258 Outstanding letters of credit 9 3 Availability on facility $ 791 $ — Short-Term Debt Short-term borrowings were $1 million as of June 30, 2018 and December 31, 2017 . The short-term borrowings for both periods consisted of various operating lines of credit and working capital facilities. Certain of these borrowings are collateralized by receivables, inventories or property. The borrowing facilities are typically for one -year renewable terms. The weighted average interest rate on all short-term borrowings was approximately 5.0% and 6.7% for June 30, 2018 and December 31, 2017 , respectively. |
PENSION PLANS AND OTHER POSTRET
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | 6 Months Ended |
Jun. 30, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS | PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS ASU 2017-07 Adoption On January 1, 2018, we adopted ASU 2017-07, "Compensation - Retirement Benefits (Topic 715)." This standard requires that the other components of net benefit cost be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. These other components of net benefit cost are now presented in Non-operating (income) expense on the Consolidated Statements of Earnings. In accordance with the standard's retrospective adoption requirement, we used an allowable practical expedient that permits the use of amounts disclosed in previous pension and other postretirement benefit plan disclosures as the estimation basis for applying the retrospective presentation requirement. Please refer to the Accounting Pronouncements section of Note 1 for more details on the impact of this adoption. The following table shows the location and impact of the adoption on certain periods of the Consolidated Statements of Earnings: Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Location Before Adoption Adoption Impact After Adoption Before Adoption Adoption Impact After Adoption Cost of sales $ 1,188 $ 1 $ 1,189 $ 2,323 $ 2 $ 2,325 Other expenses, net $ 43 $ (30 ) $ 13 $ 53 $ (29 ) $ 24 Non-operating (income) expense $ — $ 29 $ 29 $ — $ 27 $ 27 Pension Plans The Company sponsors defined benefit pension plans. Under the plans, pension benefits are based on an employee’s years of service and, for certain categories of employees, qualifying compensation. Company contributions to these pension plans are determined by an independent actuary to meet or exceed minimum funding requirements. In our non-U.S. plans, the unrecognized cost of any retroactive amendments and actuarial gains and losses are amortized over the average future service period of plan participants expected to receive benefits. In our U.S. plans, the unrecognized cost of any retroactive amendments and actuarial gains and losses are amortized over the average remaining life expectancy of the inactive participants as substantially all of the plan participants are inactive. The following tables provide information regarding pension expense recognized (in millions): Three Months Ended June 30, 2018 2017 U.S. Non-U.S. Total U.S. Non-U.S. Total Components of Net Periodic Pension Cost Service cost $ 1 $ 2 $ 3 $ 1 $ 2 $ 3 Interest cost 8 4 12 10 5 15 Expected return on plan assets (13 ) (4 ) (17 ) (15 ) (7 ) (22 ) Amortization of actuarial loss 3 — 3 4 2 6 Settlement loss — — — — 30 30 Net periodic pension (gain)/cost $ (1 ) $ 2 $ 1 $ — $ 32 $ 32 Six Months Ended June 30, 2018 2017 U.S. Non-U.S. Total U.S. Non-U.S. Total Components of Net Periodic Pension Cost Service cost $ 3 $ 3 $ 6 $ 3 $ 3 $ 6 Interest cost 17 7 24 20 8 28 Expected return on plan assets (27 ) (9 ) (36 ) (29 ) (12 ) (41 ) Amortization of actuarial loss 6 1 7 7 3 10 Settlement losses — — — — 30 30 Net periodic pension (gain)/cost $ (1 ) $ 2 $ 1 $ 1 $ 32 $ 33 The Company expects to contribute approximately $50 million in cash to the U.S. pension plans and another $13 million to non-U.S. plans during 2018 . The Company made cash contributions of $7 million to the plans during the six months ended June 30, 2018 . Postemployment and Postretirement Benefits Other than Pension Plans ("OPEB") The Company maintains healthcare and life insurance benefit plans for certain retired employees and their dependents. The health care plans in the United States are non-funded and pay either (1) stated percentages of covered medically necessary expenses, after subtracting payments by Medicare or other providers and after stated deductibles have been met, or (2) fixed amounts of medical expense reimbursement. The following table provides the components of net periodic benefit cost for aggregated U.S. and non-U.S. plans for the periods indicated (in millions): Three Months Ended Six Months Ended 2018 2017 2018 2017 Components of Net Periodic Benefit Cost Service cost $ — $ 1 $ 1 $ 2 Interest cost 1 2 3 4 Amortization of prior service cost (1 ) (1 ) (2 ) (2 ) Amortization of actuarial loss (1 ) (1 ) (3 ) (2 ) Net periodic benefit (gain)/cost $ (1 ) $ 1 $ (1 ) $ 2 |
CONTINGENT LIABILITIES AND OTHE
CONTINGENT LIABILITIES AND OTHER MATTERS | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES AND OTHER MATTERS | CONTINGENT LIABILITIES AND OTHER MATTERS The Company may be involved in various legal and regulatory proceedings relating to employment, antitrust, tax, product liability, environmental and other matters (collectively, “Proceedings”). The Company regularly reviews the status of such Proceedings along with legal counsel. Liabilities for such Proceedings are recorded when it is probable that the liability has been incurred and when the amount of the liability can be reasonably estimated. Liabilities are adjusted when additional information becomes available. Management believes that the amount of any reasonably possible losses in excess of any amounts accrued, if any, with respect to such Proceedings or any other known claim, including the matters described below under the caption Environmental Matters (the “Environmental Matters”), are not material to the Company’s financial statements. Management believes that the ultimate disposition of the Proceedings and the Environmental Matters will not have a material adverse effect on the Company’s financial condition. While the likelihood is remote, the disposition of the Proceedings and Environmental Matters could have a material impact on the results of operations, cash flows or liquidity in any given reporting period. Litigation and Regulatory Proceedings The Company is involved in litigation and regulatory proceedings from time to time in the regular course of its business. The Company believes that adequate provisions for resolution of all contingencies, claims and pending matters have been made for probable losses that are reasonably estimable. Environmental Matters The Company has established policies and procedures designed to ensure that its operations are conducted in compliance with all relevant laws and regulations and that enable the Company to meet its high standards for corporate sustainability and environmental stewardship. Our manufacturing facilities are subject to numerous foreign, federal, state and local laws and regulations relating to the presence of hazardous materials, pollution and protection of the environment, including emissions to air, discharges to water, management of hazardous materials, handling and disposal of solid wastes, and remediation of contaminated sites. All Company manufacturing facilities operate using an ISO 14001 or equivalent environmental management system. The Company’s 2020 Sustainability Goals include significant global reductions in energy use, water consumption, waste to landfill, and emissions of greenhouse gases, fine particulate matter and toxic air emissions. Owens Corning is involved in remedial response activities and is responsible for environmental remediation at a number of sites, including certain of its currently owned or formerly owned plants. These responsibilities arise under a number of laws, including, but not limited to, the Federal Resource Conservation and Recovery Act, and similar state or local laws pertaining to the management and remediation of hazardous materials and petroleum. The Company has also been named a potentially responsible party under the U.S. Federal Superfund law, or state equivalents, at a number of disposal sites. The Company became involved in these sites as a result of government action or in connection with business acquisitions. As of June 30, 2018 , the Company was involved with a total of 23 sites worldwide, including 8 Superfund and state equivalent sites and 15 owned or formerly owned sites. None of the liabilities for these sites are individually significant to the Company. Remediation activities generally involve a potential range of activities and costs related to soil and groundwater contamination. This can include pre-cleanup activities such as fact-finding and investigation, risk assessment, feasibility studies, remedial action design and implementation (where actions may range from monitoring to removal of contaminants, to installation of longer-term remediation systems). A number of factors affect the cost of environmental remediation, including the number of parties involved in a particular site, the determination of the extent of contamination, the length of time the remediation may require, the complexity of environmental regulations, variability in clean-up standards, the need for legal action, and changes in remediation technology. Taking these factors into account, Owens Corning has predicted the costs of remediation reasonably estimated to be paid over a period of years. The Company accrues an amount on an undiscounted basis, consistent with the reasonable estimates of these costs when it is probable that a liability has been incurred. Actual cost may differ from these estimates for the reasons mentioned above. At June 30, 2018 , the Company had an accrual totaling $17 million for these costs, of which the current portion is $8 million . Changes in required remediation procedures or timing of those procedures, or discovery of contamination at additional sites, could result in material increases to the Company’s environmental obligations. |
STOCK COMPENSATION
STOCK COMPENSATION | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK COMPENSATION | STOCK COMPENSATION Stock Plans 2016 Stock Plan On April 21, 2016, the Company’s stockholders approved the Owens Corning 2016 Stock Plan (the “2016 Stock Plan”) which authorizes grants of stock options, stock appreciation rights, restricted stock awards, restricted stock units, bonus stock awards and performance stock awards. At June 30, 2018 , the number of shares remaining available under the 2016 Stock Plan for all stock awards was 2.5 million . Stock Options The Company did not grant any stock options during the six months ended June 30, 2018 . The Company calculates a weighted-average grant-date fair value using a Black-Scholes valuation model for options granted. Compensation expense for options is measured based on the fair market value of the option on the date of grant, and is recognized on a straight-line basis over a four -year vesting period. In general, the exercise price of each option awarded was equal to the market price of the Company’s common stock on the date of grant, and an option’s maximum term is 10 years. During the six months ended June 30, 2018 , the Company recognized expense of less than $1 million related to the Company's stock options. The Company did not recognize any stock option expense during the three months ended June 30, 2018 . During both the three and six months ended June 30, 2017 , the Company recognized expense of less than $1 million and $1 million , respectively, related to the Company's stock options. As of June 30, 2018 , there was no unrecognized compensation cost related to stock options. The total aggregate intrinsic value of options outstanding as of June 30, 2018 was $13 million . The following table summarizes the Company’s stock option activity: Six Months Ended Number of Options Weighted- Average Exercise Price Beginning Balance 518,725 $ 37.17 Exercised (33,750 ) 36.91 Forfeited (750 ) 37.65 Ending Balance 484,225 $ 37.19 The following table summarizes information about the Company’s options outstanding and exercisable: Options Outstanding Options Exercisable Options Outstanding Weighted-Average Number Exercisable at June 30, 2018 Weighted-Average Range of Exercise Prices Remaining Contractual Life Exercise Price Remaining Contractual Life Exercise Price $13.89 - $42.16 484,225 4.51 $ 37.19 484,225 4.51 $ 37.19 Restricted Stock Awards and Restricted Stock Units The Company has granted restricted stock awards and restricted stock units (collectively referred to as “restricted stock”) as a part of its long-term incentive plan. Compensation expense for restricted stock is measured based on the market price of the stock at date of grant and is recognized on a straight-line basis over the vesting period, which is typically three or four years. The Stock Plan allows alternate vesting schedules for death, disability, and retirement. During the three and six months ended June 30, 2018 , the Company recognized expense of $5 million and $11 million , respectively, related to the Company's restricted stock. During the three and six months ended June 30, 2017 , the Company recognized expense of $5 million and $10 million , respectively, related to the Company's restricted stock. As of June 30, 2018 , there was $43 million of total unrecognized compensation cost related to restricted stock. That cost is expected to be recognized over a weighted-average period of 2.77 years. The total fair value of shares vested during the six months ended June 30, 2018 and 2017 was $22 million and $18 million , respectively. The following table summarizes the Company’s restricted stock activity: Six Months Ended June 30, 2018 Number of Shares/Units Weighted-Average Grant-Date Fair Value Beginning Balance 1,752,136 $ 42.40 Granted 278,785 91.49 Vested (515,280 ) 41.81 Forfeited (57,088 ) 48.32 Ending Balance 1,458,553 $ 51.59 Performance Stock Awards and Performance Stock Units The Company has granted performance stock awards and performance stock units (collectively referred to as “PSUs”) as a part of its long-term incentive plan. All outstanding performance grants will fully settle in stock. The amount of stock ultimately distributed from all performance shares is contingent on meeting internal company-based metrics or an external-based stock performance metric. In the six months ended June 30, 2018 , the Company granted both internal company-based and external-based metric PSUs. Internal based metrics The internal company-based metrics are based on various Company metrics and typically vest over a three-year period. The amount of stock distributed will vary from 0% to 300% of PSUs awarded depending on each award's design and performance versus the internal Company-based metrics. The initial fair value for all internal Company-based metric PSUs assumes that the performance goals will be achieved and is based on the grant date stock price. This assumption is monitored quarterly and if it becomes probable that such goals will not be achieved or will be exceeded, compensation expense recognized will be adjusted and previous surplus compensation expense recognized will be reversed or additional expense will be recognized. The expected term represents the period from the grant date to the end of the vesting period. Pro-rata vesting may be utilized in the case of death, disability or approved retirement and awards if earned will be paid at the end of the vesting period. External-based metrics The external-based metrics vest after a three -year period. Outstanding grants are based on the Company's total stockholder return relative to the performance of the companies constituting the former S&P Building & Construction Industry Index or Dow Jones Construction and Materials Index. The amount of stock distributed will vary from 0% to 200% of PSUs awarded depending on the relative stockholder return performance. The Company estimated the fair value of the external-based metric performance stock grants using a Monte Carlo simulation. The external-based metric performance stock granted in 2018 uses various assumptions that include expected volatility of 24.6% , and a risk free interest rate of 2.2% , both of which were based on an expected term of 2.92 years. Expected volatility was based on a benchmark study of our peers. The risk-free interest rate was based on zero coupon U.S. Treasury bills at the time of grant. The expected term represents the period from the grant date to the end of the three -year performance period. Compensation expense for external-based metric PSUs is measured based on the grant date fair value and is recognized on a straight-line basis over the vesting period. Pro-rata vesting may be utilized in the case of death, disability or approved retirement, and awards if earned will be paid at the end of the three -year period. During the three and six months ended June 30, 2018 , the Company recognized expense of $6 million and $9 million , respectively, related to the Company's PSUs. During the three and six months ended June 30, 2017 , the Company recognized expense of $3 million and $8 million , respectively, related to the Company's PSUs. As of June 30, 2018 , there was $23 million of total unrecognized compensation cost related to PSUs. That cost is expected to be recognized over a weighted-average period of 1.79 years. The following table summarizes the Company’s PSU activity: Six Months Ended Number of PSUs Weighted-Average Grant-Date Fair Value Beginning Balance 451,148 $ 53.96 Granted 171,725 94.14 Forfeited (48,396 ) 54.30 Ending Balance 574,477 $ 69.55 Employee Stock Purchase Plan On April 18, 2013, the Company’s stockholders approved the Owens Corning Employee Stock Purchase Plan (ESPP). The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code. The purchase price of shares purchased under the ESPP is equal to 85% of the lower of the fair market value of shares of Owens Corning common stock at the beginning or ending of the offering period, which is a six-month period ending on May 31 and November 30 of each year. At the approval date, 2.0 million shares were available for purchase under the ESPP. As of June 30, 2018 , 0.8 million shares remain available for purchase. During the three and six months ended June 30, 2018 , the Company recognized expense of $1 million and $2 million , respectively, related to the Company's ESPP. During the three and six months ended June 30, 2017 , the Company recognized expense of $1 million and $2 million , respectively, related to the Company's ESPP. As of June 30, 2018 , there was $1.6 million of total unrecognized compensation cost related to the ESPP. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table is a reconciliation of weighted-average shares for calculating basic and diluted earnings per-share (in millions, except per share amounts): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net earnings attributable to Owens Corning $ 121 $ 96 $ 213 $ 197 Weighted-average number of shares outstanding used for basic earnings per share 110.9 111.6 111.2 112.0 Non-vested restricted and performance shares 0.8 1.2 0.8 1.2 Options to purchase common stock 0.2 0.3 0.2 0.3 Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share 111.9 113.1 112.2 113.5 Earnings per common share attributable to Owens Corning common stockholders: Basic $ 1.09 $ 0.86 $ 1.92 $ 1.76 Diluted $ 1.08 $ 0.85 $ 1.90 $ 1.74 On October 24, 2016, the Board of Directors approved a share buy-back program under which the Company is authorized to repurchase up to 10 million shares of the Company’s outstanding common stock (the “Repurchase Authorization”). The Repurchase Authorization enables the Company to repurchase shares through the open market, privately negotiated, or other transactions. The actual number of shares repurchased will depend on timing, market conditions and other factors and is at the Company’s discretion. The Company repurchased 1.3 million shares of its common stock for $103 million during the six months ended June 30, 2018 , under the Repurchase Authorization. As of June 30, 2018 , 6.2 million shares remain available for repurchase under the Repurchase Authorization. For the three and six months ended June 30, 2018 , the number of shares used in the calculation of diluted earnings per share did not include 0.3 million non-vested restricted shares and 0.2 million non-vested performance shares, due to their anti-dilutive effect. For the three and six months ended June 30, 2017 , we did not have any non-vested performance shares that had an anti-dilutive effect on earnings per share. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table provides the Income tax expense (in millions) and effective tax rate for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Income tax expense $ 49 $ 67 $ 60 $ 110 Effective tax rate 28 % 41 % 22 % 36 % The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended June 30, 2018 is primarily due to U.S. state and local income tax expense, the impact of higher foreign tax rates and an increase in U.S. federal tax expense on foreign earnings. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the six months ended June 30, 2018 is primarily due to U.S. state and local income tax expense, the impact of higher foreign tax rates, an increase in U.S. federal tax expense on foreign earnings, offset by excess tax benefits related to stock compensation and other discrete adjustments. The difference between the effective tax rate and the U.S. federal statutory tax rate of 35% for the three and six months ended June 30, 2017 is primarily due to U.S. state and local income tax expense, the benefit of lower foreign tax rates and other discrete adjustments. During the first quarter of 2018, the Company adopted ASU No. 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory (Topic 740).” Under this standard, the tax effects of intra-entity sales of assets other than inventory will be recognized immediately in the seller's tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. The standard is applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the year of adoption. As of January 1, 2018, we recorded a $17 million decrease in Other non-current assets, a $7 million increase in Deferred income tax assets and a $10 million decrease to Accumulated earnings. The U.S. government enacted tax legislation commonly known as the U.S. Tax Cuts and Jobs Act of 2017 on December 22, 2017 (the "Tax Act"). The Tax Act made broad and complex changes to the U.S. tax code, including but not limited to, a reduction to the U.S. federal corporate income tax rate from 35% to 21% ; a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries (the "Transition Tax”); eliminating the corporate alternative minimum tax (AMT) and changing realization of AMT credits; changing rules related to uses and limitations of net operating loss (NOL) carryforwards created in tax years after December 31, 2017; changes to the limitations on available interest expense deductions; and changes to other existing deductions and business-related exclusions. The SEC issued Staff Accounting Bulletin No. 118, "Income Tax Accounting Implications of the Tax Cuts and Jobs Act" ("SAB 118"), which provides guidance on the accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date to complete the accounting under ASC 740, "Income Taxes." The Company's accounting for the income tax effects of the Tax Act is incomplete. In accordance with SAB 118, we were able to make reasonable estimates on certain effects of the Tax Act resulting in a total provisional charge to the financial statements as of December 31, 2017. There have been no material changes to the provisional charges as disclosed in our 2017 Form 10-K. The Company was not yet able to make a reasonable estimate of the U.S. state tax effects of the Tax Act. Therefore, no provisional adjustment was recorded with respect to this item. We are continuing to evaluate the estimates used to record and disclose the effects of the Tax Act. Effective January 1, 2018, the Tax Act creates a new requirement to include in U.S. income global intangible low-taxed income (GILTI) earned by controlled foreign corporations (CFCs). The GILTI must be included currently in the gross income of the CFCs’ U.S. shareholder. Under U.S. GAAP, we are allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). During the first quarter of 2018 , we selected the period cost method in recording the tax effects of GILTI in our financial statements. The Company's analysis of whether to change its indefinite reinvestment assertion on account of the Tax Act is incomplete. Therefore, we continue to assert indefinite reinvestment in accordance with ASC 740 based on the laws before enactment of the Tax Act. |
CHANGES IN ACCUMULATED OTHER CO
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE DEFCIT | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE DEFICIT | CHANGES IN ACCUMULATED OTHER COMPREHENSIVE DEFICIT The following table summarizes the changes in accumulated other comprehensive income (deficit) (in millions): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Currency Translation Adjustment Beginning balance $ (198 ) $ (248 ) $ (183 ) $ (284 ) Net investment hedge amounts classified into AOCI, net of tax 20 (9 ) 1 (9 ) (Loss)/gain on foreign currency translation (94 ) 38 (90 ) 74 Other comprehensive (loss)/income, net of tax (74 ) 29 (89 ) 65 Ending balance $ (272 ) $ (219 ) $ (272 ) $ (219 ) Pension and Other Postretirement Adjustment Beginning balance $ (333 ) $ (429 ) $ (331 ) $ (429 ) Amounts reclassified from AOCI to net earnings, net of tax (a) 1 17 2 18 Amounts classified into AOCI, net of tax 3 (3 ) — (4 ) Other comprehensive income, net of tax 4 14 2 14 Ending balance $ (329 ) $ (415 ) $ (329 ) $ (415 ) Hedging Adjustment Beginning balance $ 1 $ 1 $ — $ 3 Amounts reclassified from AOCI to net earnings, net of tax (b) — — — (1 ) Amounts classified into AOCI, net of tax — (1 ) 1 (2 ) Other comprehensive (loss)/income, net of tax — (1 ) 1 (3 ) Ending balance $ 1 $ — $ 1 $ — Total AOCI ending balance $ (600 ) $ (634 ) $ (600 ) $ (634 ) (a) These AOCI components are included in the computation of total Pension and OPEB expense and are recorded in Non-operating income. See Note 12 for additional information. (b) Amounts reclassified from gain/(loss) on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings and are recognized in Cost of sales. See Note 5 for additional information. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The following table summarizes our Net sales by segment and geographic region (in millions). Corporate eliminations (shown below) largely reflect intercompany sales from Composites to Roofing. External customer sales are attributed to geographic region based upon the location from which the product is shipped to the external customer. Three Months Ended Six Months Ended 2018 2017 2018 2017 Reportable Segments Composites $ 541 $ 537 $ 1,052 $ 1,048 Insulation 682 439 1,278 838 Roofing 659 684 1,301 1,311 Total reportable segments 1,882 1,660 3,631 3,197 Corporate eliminations (58 ) (63 ) (116 ) (122 ) NET SALES $ 1,824 $ 1,597 $ 3,515 $ 3,075 |
Schedule of Revenues by Geographical Areas | External Customer Sales by Geographic Region United States $ 1,189 $ 1,139 $ 2,317 $ 2,190 Europe 326 147 605 287 Asia-Pacific 176 185 318 338 Rest of world 133 126 275 260 NET SALES $ 1,824 $ 1,597 $ 3,515 $ 3,075 |
Schedule of Earnings before Interest and Taxes | The following table summarizes EBIT by segment (in millions): Three Months Ended Six Months Ended 2018 2017 2018 2017 Reportable Segments Composites $ 71 $ 84 $ 131 $ 155 Insulation 49 29 81 34 Roofing 127 155 224 280 Total reportable segments 247 268 436 469 Restructuring costs (7 ) (29 ) (12 ) (29 ) Acquisition-related costs (1 ) (10 ) (15 ) (11 ) Recognition of acquisition inventory fair value step-up — — (2 ) — Litigation settlement gain, net of legal fees — 29 — 29 Pension settlement losses — (30 ) — (30 ) General corporate expense and other (33 ) (38 ) (70 ) (68 ) Total corporate, other and eliminations (41 ) (78 ) (99 ) (109 ) EBIT $ 206 $ 190 $ 337 $ 360 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table shows a disaggregation of Net sales (in millions): For the three months ended June 30, 2018 Reportable Segments Composites Insulation Roofing Eliminations Consolidated Disaggregation Categories U.S. residential $ 75 $ 226 $ 578 $ (54 ) $ 825 U.S. commercial and industrial 156 160 50 (2 ) 364 Europe 156 166 4 — 326 Asia-Pacific 122 51 3 — 176 Rest of world 32 79 24 (2 ) 133 NET SALES $ 541 $ 682 $ 659 $ (58 ) $ 1,824 For the six months ended June 30, 2018 Reportable Segments Composites Insulation Roofing Eliminations Consolidated Disaggregation Categories U.S. residential $ 151 $ 448 $ 1,137 $ (107 ) $ 1,629 U.S. commercial and industrial 295 307 89 (3 ) 688 Europe 313 285 7 — 605 Asia-Pacific 228 84 7 (1 ) 318 Rest of world 65 154 61 (5 ) 275 NET SALES $ 1,052 $ 1,278 $ 1,301 $ (116 ) $ 3,515 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of the following (in millions): June 30, 2018 December 31, 2017 Finished goods $ 664 $ 562 Materials and supplies 320 279 Total inventories $ 984 $ 841 |
DERIVATIVE FINANCIAL INSTRUME28
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Assets and Liabilities at Fair Value | The following table presents the fair value of derivatives and hedging instruments and the respective location on the Consolidated Balance Sheets (in millions): Fair Value at Location June 30, 2018 December 31, 2017 Derivative assets designated as hedging instruments: Net investment hedges: Cross-currency swaps Other current assets $ 8 $ 7 Cash flow hedges: Natural gas forward swaps Other current assets $ 2 $ 1 Foreign exchange forward contracts Other current assets $ 1 $ — Derivative liabilities designated as hedging instruments: Net investment hedges: Cross-currency swaps Other liabilities $ 36 $ 38 Cash flow hedges: Natural gas forward swaps Accounts payable and accrued liabilities $ — $ 1 Foreign exchange forward contracts Accounts payable and accrued liabilities $ 1 $ — Derivative assets not designated as hedging instruments: Foreign exchange forward contracts Other current assets $ 38 $ 1 Derivative liabilities not designated as hedging instruments: Foreign exchange forward contracts Accounts payable and accrued liabilities $ 3 $ 1 |
Schedule of Fair Value Derivative Instruments Statements of Earnings Location | The following table presents the impact and respective location of derivative activities on the Consolidated Statements of Earnings (in millions): Three Months Ended Six Months Ended Location 2018 2017 2018 2017 Derivative activity designated as hedging instruments: Natural gas cash flow hedges: Amount of gain reclassified from AOCI (as defined below) into earnings Cost of sales $ — $ (1 ) $ — $ (2 ) Cross-currency swap net investment hedges: Amount of gain recognized in earnings on derivative amounts excluded from effectiveness testing Interest expense, net $ (3 ) $ — $ (6 ) $ — Interest rate swap fair value hedge: Amount of loss recognized in earnings Interest expense, net $ 1 $ 1 $ 1 $ 1 Derivative activity not designated as hedging instruments: Natural gas: Amount of loss recognized in earnings Other expenses, net $ — $ 1 $ — $ 1 Foreign currency: Amount of (gain)/loss recognized in earnings (a) Other expenses, net $ (40 ) $ 4 $ (44 ) $ 4 (a) (Gains)/losses related to foreign currency derivatives were substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures, which were also recorded in Other expenses, net . The following table presents the impact of derivative activities on the Consolidated Statements of Comprehensive Earnings (in millions): Amount of (Gain) Loss Recognized in Comprehensive Earnings Hedging Type Derivative Financial Instrument Three Months Ended Six Months Ended Net investment hedge Cross-currency swaps $ (26 ) $ (1 ) Cash flow hedge Natural gas forward swaps $ (1 ) $ (2 ) |
GOODWILL AND OTHER INTANGIBLE29
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-lived Intangible Assets Amortization Expense | The estimated amortization expense for intangible assets for the next five years is as follows (in millions): Period Amortization (a) 2019 $ 51 2020 $ 51 2021 $ 50 2022 $ 46 2023 $ 43 Intangible assets and goodwill consist of the following (in millions): June 30, 2018 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships 20 $ 559 $ (124 ) $ 435 Technology 17 323 (124 ) 199 Other 15 58 (28 ) 30 Indefinite-lived intangible assets: Trademarks 1,147 — 1,147 Total intangible assets $ 2,087 $ (276 ) $ 1,811 Goodwill $ 1,968 December 31, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships 20 $ 363 $ (109 ) $ 254 Technology 18 255 (116 ) 139 Other 8 47 (26 ) 21 Indefinite-lived intangible assets: Trademarks 946 — 946 Total intangible assets $ 1,611 $ (251 ) $ 1,360 Goodwill $ 1,507 The following table details the identifiable indefinite and definite-lived intangible assets, their fair values and estimated weighted average useful lives (in millions): Type of Intangible Asset Fair Value Weighted Average Useful Life Customer relationships $ 107 19 Technology 37 15 Trademarks 101 Indefinite Total $ 245 The following table details the identifiable indefinite and definite-lived intangible assets acquired, their preliminary fair values and estimated weighted average useful lives (in millions): Type of Intangible Asset Preliminary Fair Value Weighted Average Useful Life Customer relationships $ 215 20 Technology - Know-how 61 15 Technology - Patented 12 5 Quarry Rights 7 45 Trademarks 213 Indefinite Total $ 508 |
Schedule of Finite-Lived Intangible Assets | The changes in the gross carrying amount of intangible assets by asset group are as follows (in millions): Customer Relationships Technology Trademarks Other Total Balance at December 31, 2017 $ 363 $ 255 $ 946 $ 47 $ 1,611 Acquisitions (see Note 8) 215 73 213 7 508 Other additions, net — — — 4 4 Foreign currency translation (19 ) (5 ) (12 ) — (36 ) Balance at June 30, 2018 $ 559 $ 323 $ 1,147 $ 58 $ 2,087 |
Schedule of Goodwill | The changes in the net carrying amount of goodwill by segment are as follows (in millions): Composites Insulation Roofing Total Balance at December 31, 2017 $ 58 $ 1,049 $ 400 $ 1,507 Acquisitions (see Note 8) — 505 — 505 Foreign currency translation (1 ) (41 ) (2 ) (44 ) Balance at June 30, 2018 $ 57 $ 1,513 $ 398 $ 1,968 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consist of the following (in millions): June 30, December 31, 2017 Land $ 257 $ 251 Buildings and leasehold improvements 1,025 944 Machinery and equipment 4,395 4,211 Construction in progress 488 350 6,165 5,756 Accumulated depreciation (2,443 ) (2,331 ) Property, plant and equipment, net $ 3,722 $ 3,425 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Finite-lived Intangible Assets Amortization Expense | The estimated amortization expense for intangible assets for the next five years is as follows (in millions): Period Amortization (a) 2019 $ 51 2020 $ 51 2021 $ 50 2022 $ 46 2023 $ 43 Intangible assets and goodwill consist of the following (in millions): June 30, 2018 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships 20 $ 559 $ (124 ) $ 435 Technology 17 323 (124 ) 199 Other 15 58 (28 ) 30 Indefinite-lived intangible assets: Trademarks 1,147 — 1,147 Total intangible assets $ 2,087 $ (276 ) $ 1,811 Goodwill $ 1,968 December 31, 2017 Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizable intangible assets: Customer relationships 20 $ 363 $ (109 ) $ 254 Technology 18 255 (116 ) 139 Other 8 47 (26 ) 21 Indefinite-lived intangible assets: Trademarks 946 — 946 Total intangible assets $ 1,611 $ (251 ) $ 1,360 Goodwill $ 1,507 The following table details the identifiable indefinite and definite-lived intangible assets, their fair values and estimated weighted average useful lives (in millions): Type of Intangible Asset Fair Value Weighted Average Useful Life Customer relationships $ 107 19 Technology 37 15 Trademarks 101 Indefinite Total $ 245 The following table details the identifiable indefinite and definite-lived intangible assets acquired, their preliminary fair values and estimated weighted average useful lives (in millions): Type of Intangible Asset Preliminary Fair Value Weighted Average Useful Life Customer relationships $ 215 20 Technology - Know-how 61 15 Technology - Patented 12 5 Quarry Rights 7 45 Trademarks 213 Indefinite Total $ 508 |
WARRANTIES (Tables)
WARRANTIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | The Company records a liability for warranty obligations at the date the related products are sold. Adjustments are made as new information becomes available. Please refer to Note 3 for information about our separately-priced extended warranty contracts. A reconciliation of the warranty liability is as follows (in millions): Six Months Ended June 30, 2018 Beginning balance $ 55 Amounts accrued for current year 11 Settlements of warranty claims (6 ) Ending balance $ 60 |
RESTRUCTURING AND ACQUISITION33
RESTRUCTURING AND ACQUISITION-RELATED COSTS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | Acquisition-Related Costs During the first six months of 2018 , the Company incurred $15 million of transaction and integration costs related to its announced acquisitions. Please refer to Note 8 of the Consolidated Financial Statements for further information on these acquisitions. These costs are recorded within Corporate, Other and Eliminations. See the Restructuring Costs paragraph below for detail on additional costs related to these acquisitions. The following table presents the impact and respective location of acquisition-related costs for the first six months of 2018 on the Consolidated Statements of Earnings (in millions): Location Paroc Acquisition Pittsburgh Corning Acquisition Total Marketing and administrative expenses $ 5 $ 1 $ 6 Other expenses, net 9 — 9 Total acquisition-related costs $ 14 $ 1 $ 15 |
Schedule of Restructuring Costs on the Consolidated Statements of Earnings | Consolidated Statements of Earnings Classification The following table presents the impact and respective location of total restructuring costs on the Consolidated Statements of Earnings, which are included within Corporate, Other and Eliminations (in millions): Three Months Ended June 30, Six Months Ended June 30, Type of cost Location 2018 2017 2018 2017 Accelerated depreciation Cost of sales $ 3 $ 2 $ 8 $ 2 Other exit costs Cost of sales 2 2 4 2 Severance Other expenses, net 1 25 2 25 Other exit costs/(gains) Other expenses, net 1 — (2 ) — Total restructuring costs $ 7 $ 29 $ 12 $ 29 |
Schedule of Restructuring Reserve by Type of Cost | Summary of Unpaid Liabilities The following table summarizes the status of the unpaid liabilities from the Company's restructuring activity (in millions): 2017 Cost Reduction Actions Pittsburgh Corning Acquisition-Related Restructuring Total Balance at December 31, 2017 $ 11 $ 9 $ 20 Restructuring costs 11 1 12 Payments (10 ) (2 ) (12 ) Non-cash items and reclassifications to other accounts (5 ) (1 ) (6 ) Balance at June 30, 2018 $ 7 $ 7 $ 14 Cumulative charges incurred $ 40 $ 18 $ 58 As of June 30, 2018 , the remaining liability balance is comprised of $14 million of severance, inclusive of $2 million of non-current severance and $12 million of severance the Company expects to pay over the next twelve months. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Details of the Company’s outstanding long-term debt, as well as the fair values, are as follows (in millions): June 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value 4.20% senior notes, net of discount and financing fees, due 2022 $ 597 101 % $ 597 105 % 4.20% senior notes, net of discount and financing fees, due 2024 393 100 % 392 105 % 3.40% senior notes, net of discount and financing fees, due 2026 395 91 % 395 98 % 7.00% senior notes, net of discount and financing fees, due 2036 400 116 % 400 132 % 4.30% senior notes, net of discount and financing fees, due 2047 588 82 % 588 99 % 4.40% senior notes, net of discount and financing fees, due 2048 389 83 % — n/a Receivables securitization facility, maturing in 2020 (a) 258 100 % — n/a Various capital leases, due through and beyond 2050 (a) 29 100 % 31 100 % Term loan borrowing, maturing in 2021 (a) 585 100 % — n/a Unamortized interest rate swap basis adjustment 6 n/a 6 n/a Total long-term debt 3,640 n/a 2,409 n/a Less – current portion (a) 4 100 % 4 100 % Long-term debt, net of current portion $ 3,636 n/a $ 2,405 n/a (a) The Company determined that the book value of the above noted long-term debt instruments approximates fair value. |
Schedule of Line of Credit Facilities | The following table shows how the Company utilized its primary sources of liquidity (in millions): Balance at June 30, 2018 Senior Revolving Credit Facility Receivables Securitization Facility Facility size or borrowing limit $ 800 $ 280 Collateral capacity limitation on availability n/a 19 Outstanding borrowings — 258 Outstanding letters of credit 9 3 Availability on facility $ 791 $ — |
PENSION PLANS AND OTHER POSTR35
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Prospective Adoption of New Accounting Pronouncements | The following table shows the location and impact of the adoption on certain periods of the Consolidated Statements of Earnings: Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Location Before Adoption Adoption Impact After Adoption Before Adoption Adoption Impact After Adoption Cost of sales $ 1,188 $ 1 $ 1,189 $ 2,323 $ 2 $ 2,325 Other expenses, net $ 43 $ (30 ) $ 13 $ 53 $ (29 ) $ 24 Non-operating (income) expense $ — $ 29 $ 29 $ — $ 27 $ 27 |
Pension Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Net Benefit Costs | The following tables provide information regarding pension expense recognized (in millions): Three Months Ended June 30, 2018 2017 U.S. Non-U.S. Total U.S. Non-U.S. Total Components of Net Periodic Pension Cost Service cost $ 1 $ 2 $ 3 $ 1 $ 2 $ 3 Interest cost 8 4 12 10 5 15 Expected return on plan assets (13 ) (4 ) (17 ) (15 ) (7 ) (22 ) Amortization of actuarial loss 3 — 3 4 2 6 Settlement loss — — — — 30 30 Net periodic pension (gain)/cost $ (1 ) $ 2 $ 1 $ — $ 32 $ 32 Six Months Ended June 30, 2018 2017 U.S. Non-U.S. Total U.S. Non-U.S. Total Components of Net Periodic Pension Cost Service cost $ 3 $ 3 $ 6 $ 3 $ 3 $ 6 Interest cost 17 7 24 20 8 28 Expected return on plan assets (27 ) (9 ) (36 ) (29 ) (12 ) (41 ) Amortization of actuarial loss 6 1 7 7 3 10 Settlement losses — — — — 30 30 Net periodic pension (gain)/cost $ (1 ) $ 2 $ 1 $ 1 $ 32 $ 33 |
Other Postretirement Benefits Plan | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Schedule of Net Benefit Costs | The following table provides the components of net periodic benefit cost for aggregated U.S. and non-U.S. plans for the periods indicated (in millions): Three Months Ended Six Months Ended 2018 2017 2018 2017 Components of Net Periodic Benefit Cost Service cost $ — $ 1 $ 1 $ 2 Interest cost 1 2 3 4 Amortization of prior service cost (1 ) (1 ) (2 ) (2 ) Amortization of actuarial loss (1 ) (1 ) (3 ) (2 ) Net periodic benefit (gain)/cost $ (1 ) $ 1 $ (1 ) $ 2 |
STOCK COMPENSATION (Tables)
STOCK COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the Company’s stock option activity: Six Months Ended Number of Options Weighted- Average Exercise Price Beginning Balance 518,725 $ 37.17 Exercised (33,750 ) 36.91 Forfeited (750 ) 37.65 Ending Balance 484,225 $ 37.19 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable | The following table summarizes information about the Company’s options outstanding and exercisable: Options Outstanding Options Exercisable Options Outstanding Weighted-Average Number Exercisable at June 30, 2018 Weighted-Average Range of Exercise Prices Remaining Contractual Life Exercise Price Remaining Contractual Life Exercise Price $13.89 - $42.16 484,225 4.51 $ 37.19 484,225 4.51 $ 37.19 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the Company’s restricted stock activity: Six Months Ended June 30, 2018 Number of Shares/Units Weighted-Average Grant-Date Fair Value Beginning Balance 1,752,136 $ 42.40 Granted 278,785 91.49 Vested (515,280 ) 41.81 Forfeited (57,088 ) 48.32 Ending Balance 1,458,553 $ 51.59 |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Performance-Based Units, Vested and Expected to Vest | The following table summarizes the Company’s PSU activity: Six Months Ended Number of PSUs Weighted-Average Grant-Date Fair Value Beginning Balance 451,148 $ 53.96 Granted 171,725 94.14 Forfeited (48,396 ) 54.30 Ending Balance 574,477 $ 69.55 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table is a reconciliation of weighted-average shares for calculating basic and diluted earnings per-share (in millions, except per share amounts): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net earnings attributable to Owens Corning $ 121 $ 96 $ 213 $ 197 Weighted-average number of shares outstanding used for basic earnings per share 110.9 111.6 111.2 112.0 Non-vested restricted and performance shares 0.8 1.2 0.8 1.2 Options to purchase common stock 0.2 0.3 0.2 0.3 Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share 111.9 113.1 112.2 113.5 Earnings per common share attributable to Owens Corning common stockholders: Basic $ 1.09 $ 0.86 $ 1.92 $ 1.76 Diluted $ 1.08 $ 0.85 $ 1.90 $ 1.74 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides the Income tax expense (in millions) and effective tax rate for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Income tax expense $ 49 $ 67 $ 60 $ 110 Effective tax rate 28 % 41 % 22 % 36 % |
CHANGES IN ACCUMULATED OTHER 39
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE DEFCIT (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in accumulated other comprehensive income (deficit) (in millions): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Currency Translation Adjustment Beginning balance $ (198 ) $ (248 ) $ (183 ) $ (284 ) Net investment hedge amounts classified into AOCI, net of tax 20 (9 ) 1 (9 ) (Loss)/gain on foreign currency translation (94 ) 38 (90 ) 74 Other comprehensive (loss)/income, net of tax (74 ) 29 (89 ) 65 Ending balance $ (272 ) $ (219 ) $ (272 ) $ (219 ) Pension and Other Postretirement Adjustment Beginning balance $ (333 ) $ (429 ) $ (331 ) $ (429 ) Amounts reclassified from AOCI to net earnings, net of tax (a) 1 17 2 18 Amounts classified into AOCI, net of tax 3 (3 ) — (4 ) Other comprehensive income, net of tax 4 14 2 14 Ending balance $ (329 ) $ (415 ) $ (329 ) $ (415 ) Hedging Adjustment Beginning balance $ 1 $ 1 $ — $ 3 Amounts reclassified from AOCI to net earnings, net of tax (b) — — — (1 ) Amounts classified into AOCI, net of tax — (1 ) 1 (2 ) Other comprehensive (loss)/income, net of tax — (1 ) 1 (3 ) Ending balance $ 1 $ — $ 1 $ — Total AOCI ending balance $ (600 ) $ (634 ) $ (600 ) $ (634 ) (a) These AOCI components are included in the computation of total Pension and OPEB expense and are recorded in Non-operating income. See Note 12 for additional information. (b) Amounts reclassified from gain/(loss) on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings and are recognized in Cost of sales. See Note 5 for additional information. |
GENERAL (Details)
GENERAL (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Restricted cash | $ 7 | $ 7 | $ 7 | $ 6 | |
Operating Income (Loss) | Accounting Standards Update 2017-07 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Pension expense | $ (60) | ||||
Nonoperating Income (Expense) | Accounting Standards Update 2017-07 [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Pension expense | $ 60 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
NET SALES | $ 1,824 | $ 1,597 | $ 3,515 | $ 3,075 |
EBIT | 206 | 190 | 337 | 360 |
Restructuring costs | (7) | (29) | (12) | (29) |
Acquisition-related costs | (1) | (10) | (15) | (11) |
Recognition of acquisition inventory fair value step-up | 0 | 0 | 2 | 0 |
Litigation settlement gain, net of legal fees | 6 | 13 | 26 | 24 |
General corporate expense and other | (33) | (38) | (70) | (68) |
U.S. | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 1,189 | 1,139 | 2,317 | 2,190 |
Europe | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 326 | 147 | 605 | 287 |
Asia-Pacific | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 176 | 185 | 318 | 338 |
Other Geographical | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 133 | 126 | 275 | 260 |
Composites | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 541 | 537 | 1,052 | 1,048 |
EBIT | 71 | 84 | 131 | 155 |
Insulation | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 682 | 439 | 1,278 | 838 |
EBIT | 49 | 29 | 81 | 34 |
Roofing | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 659 | 684 | 1,301 | 1,311 |
EBIT | 127 | 155 | 224 | 280 |
Total Segments | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | 1,882 | 1,660 | 3,631 | 3,197 |
EBIT | 247 | 268 | 436 | 469 |
Corporate Eliminations | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
NET SALES | (58) | (63) | (116) | (122) |
EBIT | (41) | (78) | (99) | (109) |
Other expenses, net | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
Acquisition-related costs | (9) | |||
Litigation settlement gain, net of legal fees | 0 | 29 | 0 | 29 |
Pension Plan | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
Pension settlement losses | 0 | (30) | 0 | (30) |
Foreign Plan | Pension Plan | ||||
Segment Reporting, Significant Reconciling Item [Line Items] | ||||
Pension settlement losses | $ 0 | $ (30) | $ 0 | $ (30) |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Accumulated earnings | $ 1,729 | $ 1,575 | |
Inventories | 984 | $ 841 | |
Revenue, remaining performance obligation | 2 | ||
Contract liability | 52 | $ 46 | |
Contract liability, revenue recognized | $ 13 | ||
Minimum | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 16 years | ||
Maximum | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 20 years | ||
Accounting Standards Update 2014-09 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Accumulated earnings | $ 2 | ||
Calculated under Revenue Guidance in Effect before Topic 606 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Accumulated earnings | $ 2 | ||
Inventories | $ 2 |
REVENUE - Disaggregated Revenue
REVENUE - Disaggregated Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | $ 1,824 | $ 3,515 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 326 | 605 |
Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 176 | 318 |
Rest of world | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 133 | 275 |
Composites | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 541 | 1,052 |
Composites | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 156 | 313 |
Composites | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 122 | 228 |
Composites | Rest of world | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 32 | 65 |
Insulation | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 682 | 1,278 |
Insulation | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 166 | 285 |
Insulation | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 51 | 84 |
Insulation | Rest of world | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 79 | 154 |
Roofing | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 659 | 1,301 |
Roofing | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 4 | 7 |
Roofing | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 3 | 7 |
Roofing | Rest of world | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 24 | 61 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | (58) | (116) |
Eliminations | Europe | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 0 | 0 |
Eliminations | Asia-Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 0 | (1) |
Eliminations | Rest of world | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | (2) | (5) |
U.S. residential | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 825 | 1,629 |
U.S. residential | Composites | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 75 | 151 |
U.S. residential | Insulation | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 226 | 448 |
U.S. residential | Roofing | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 578 | 1,137 |
U.S. residential | Eliminations | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | (54) | (107) |
U.S. commercial and industrial | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 364 | 688 |
U.S. commercial and industrial | Composites | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 156 | 295 |
U.S. commercial and industrial | Insulation | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 160 | 307 |
U.S. commercial and industrial | Roofing | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | 50 | 89 |
U.S. commercial and industrial | Eliminations | U.S. | ||
Disaggregation of Revenue [Line Items] | ||
Disaggregated revenue | $ (2) | $ (3) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 664 | $ 562 |
Materials and supplies | 320 | 279 |
Total inventories | $ 984 | $ 841 |
DERIVATIVE FINANCIAL INSTRUME45
DERIVATIVE FINANCIAL INSTRUMENTS BALANCE SHEET (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Other Current Assets | Designated as Hedging Instrument | Net Investment Hedging | Cross Currency Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 8 | $ 7 |
Other Current Assets | Designated as Hedging Instrument | Cash Flow Hedging | Energy Related Derivative | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 2 | 1 |
Other Current Assets | Designated as Hedging Instrument | Cash Flow Hedging | Foreign exchange forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 1 | 0 |
Other Current Assets | Nondesignated as Hedging Instrument | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 38 | 1 |
Other Liabilities | Designated as Hedging Instrument | Net Investment Hedging | Cross Currency Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 36 | 38 |
Accounts Payable and Accrued Liabilities | Designated as Hedging Instrument | Cash Flow Hedging | Energy Related Derivative | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 1 |
Accounts Payable and Accrued Liabilities | Designated as Hedging Instrument | Cash Flow Hedging | Foreign exchange forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 1 | 0 |
Accounts Payable and Accrued Liabilities | Nondesignated as Hedging Instrument | Foreign Exchange Contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 3 | $ 1 |
DERIVATIVE FINANCIAL INSTRUME46
DERIVATIVE FINANCIAL INSTRUMENTS INCOME STATEMENT (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Cost of sales | Designated as Hedging Instrument | Energy Related Derivative | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Amount of gain reclassified from AOCI into earnings | $ 0 | $ (1) | $ 0 | $ (2) | |
Interest expense, net | Designated as Hedging Instrument | Interest Rate Swap | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Derivative, Gain on Derivative | (3) | 0 | (6) | 0 | |
Amount of (gain)/loss recognized in earnings | 1 | 1 | 1 | 1 | |
Other expenses, net | Nondesignated as Hedging Instrument | Foreign Exchange Contract | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Amount of (gain)/loss recognized in earnings | [1] | (40) | 4 | (44) | 4 |
Other expenses, net | Nondesignated as Hedging Instrument | Energy Related Derivative | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Amount of (gain)/loss recognized in earnings | 0 | $ 1 | 0 | $ 1 | |
Net Investment Hedging | Cross Currency Interest Rate Contract | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Amount of (gain)/loss recognized in earnings | 26 | 1 | |||
Cash Flow Hedging | Energy Related Derivative | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Amount of (gain)/loss recognized in earnings | $ 1 | $ 2 | |||
[1] | related to foreign currency derivatives were substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures, which were also recorded in Other expenses, net. |
DERIVATIVE FINANCIAL INSTRUME47
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS CASH FLOW (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018EUR (€)MMBTU | Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($)MMBTU | Dec. 31, 2017USD ($) | |
Derivative [Line Items] | ||||
Derivative, nonmonetary notional amount | MMBTU | 3 | 3 | ||
Net fair value liability | $ 17 | |||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ 1 | |||
Natural Gas Contract | ||||
Derivative [Line Items] | ||||
Derivative, remaining maturity | 15 months | |||
Two Months | ||||
Derivative [Line Items] | ||||
Percent of exposures hedged | 0.75 | 0.75 | ||
Exposure time | 3 years | |||
Four Months | ||||
Derivative [Line Items] | ||||
Percent of exposures hedged | 0.60 | 0.60 | ||
Exposure time | 3 years | |||
Twelve Months | ||||
Derivative [Line Items] | ||||
Percent of exposures hedged | 0.75 | 0.75 | ||
Derivative instruments, gain (loss) reclassification from accumulated OCI to income, estimate of time to transfer | 12 months | |||
Beyond Twelve Months | ||||
Derivative [Line Items] | ||||
Percent of exposures hedged | 0.65 | 0.65 | ||
Derivative instruments, gain (loss) reclassification from accumulated OCI to income, estimate of time to transfer | 12 months | |||
Poland | Foreign exchange forward contracts | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 18 | |||
Sweden | Foreign exchange forward contracts | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | 18 | |||
U.S. | Foreign exchange forward contracts | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | 763 | $ 109 | ||
United States of America, Dollars | Cross Currency Interest Rate Contract | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | 516 | |||
Euro Member Countries, Euro | Foreign exchange forward contracts | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 157 | |||
Euro Member Countries, Euro | Cross Currency Interest Rate Contract | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | € | € 516 |
GOODWILL AND OTHER INTANGIBLE48
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 2,087 | $ 1,611 |
Accumulated amortization | (276) | (251) |
Intangible assets, net | 1,811 | 1,360 |
Goodwill | $ 1,968 | $ 1,507 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life | 20 years | 20 years |
Gross carrying amount | $ 559 | $ 363 |
Accumulated amortization | (124) | (109) |
Net carrying amount | $ 435 | $ 254 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life | 17 years | 18 years |
Gross carrying amount | $ 323 | $ 255 |
Accumulated amortization | (124) | (116) |
Net carrying amount | $ 199 | $ 139 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average useful life | 15 years | 8 years |
Gross carrying amount | $ 58 | $ 47 |
Accumulated amortization | (28) | (26) |
Net carrying amount | 30 | 21 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,147 | 946 |
Accumulated amortization | 0 | 0 |
Indefinite-lived intangible assets | $ 1,147 | $ 946 |
GOODWILL AND OTHER INTANGIBLE49
GOODWILL AND OTHER INTANGIBLE ASSETS - GOODWILL ROLLFORWARD (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Line Items] | |
Balance at beginning of period | $ 1,507 |
Goodwill, acquired during period | 505 |
Foreign currency translation | (44) |
Balance at end of period | 1,968 |
Composites | |
Goodwill [Line Items] | |
Balance at beginning of period | 58 |
Goodwill, acquired during period | 0 |
Foreign currency translation | (1) |
Balance at end of period | 57 |
Insulation | |
Goodwill [Line Items] | |
Balance at beginning of period | 1,049 |
Goodwill, acquired during period | 505 |
Foreign currency translation | (41) |
Balance at end of period | 1,513 |
Roofing | |
Goodwill [Line Items] | |
Balance at beginning of period | 400 |
Goodwill, acquired during period | 0 |
Foreign currency translation | (2) |
Balance at end of period | $ 398 |
GOODWILL AND OTHER INTANGIBLE50
GOODWILL AND OTHER INTANGIBLE ASSETS - INTANGIBLE ASSETS ROLLFORWARD (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning of period | $ 1,611,000,000 | |
Other additions, net | $ 4,000,000 | |
Foreign currency translation | (36,000,000) | |
Balance at end of period | 2,087,000,000 | 2,087,000,000 |
Pittsburgh Corning | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | 245,000,000 | |
Pittsburgh Corning and Paroc Group | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | 24,000,000 | |
Intangible assets acquired | 508,000,000 | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning of period | 363,000,000 | |
Other additions, net | 0 | |
Foreign currency translation | (19,000,000) | |
Balance at end of period | 559,000,000 | 559,000,000 |
Customer relationships | Pittsburgh Corning | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | 215,000,000 | |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning of period | 255,000,000 | |
Other additions, net | 0 | |
Foreign currency translation | (5,000,000) | |
Balance at end of period | 323,000,000 | 323,000,000 |
Technology | Pittsburgh Corning | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | 73,000,000 | |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning of period | 946,000,000 | |
Other additions, net | 0 | |
Foreign currency translation | (12,000,000) | |
Balance at end of period | 1,147,000,000 | 1,147,000,000 |
Trademarks | Pittsburgh Corning | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | 213,000,000 | |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning of period | 47,000,000 | |
Other additions, net | 4,000,000 | |
Foreign currency translation | 0 | |
Balance at end of period | $ 58,000,000 | 58,000,000 |
Other | Pittsburgh Corning | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 7,000,000 |
GOODWILL AND OTHER INTANGIBLE51
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2018USD ($) | ||
Finite-Lived Intangible Assets [Line Items] | ||
2,019 | $ 51 | [1] |
2,020 | 51 | [1] |
2,021 | 50 | [1] |
2,022 | 46 | [1] |
2,023 | 43 | [1] |
Pittsburgh Corning and Paroc Group | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 24 | |
[1] | The yearly amortization amounts in the table above include approximately $24 million of aggregate amortization expense related to the purchase price allocation of the acquisition of Pittsburgh Corning Corporation and Pittsburgh Corning Europe NV (collectively, "Pittsburgh Corning") and the preliminary purchase price allocation of the Paroc acquisition. See Note 8 for more details of these acquisitions. |
PROPERTY, PLANT AND EQUIPMENT52
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, gross | $ 6,165 | $ 5,756 |
Accumulated depreciation | (2,443) | (2,331) |
Property, plant and equipment, net | $ 3,722 | 3,425 |
Precious metals depletion percentage | 12.00% | |
Precious metal percent of deprecation expense | 0.03 | |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, gross | $ 257 | 251 |
Buildings and leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, gross | 1,025 | 944 |
Machinery and equipment | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, gross | 4,395 | 4,211 |
Construction in progress | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, gross | $ 488 | $ 350 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) € in Millions | Feb. 05, 2018EUR (€) | Feb. 05, 2018USD ($) | Jun. 27, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) |
Business Acquisition [Line Items] | |||||||
Document Fiscal Year Focus | 2,018 | ||||||
Business combination, consideration transferred | $ 1,147,000,000 | ||||||
Purchase price, net of cash acquired | 1,143,000,000 | $ 561,000,000 | |||||
Net sales | $ 1,824,000,000 | $ 1,597,000,000 | 3,515,000,000 | 3,075,000,000 | |||
Cost of sales | 1,406,000,000 | $ 1,189,000,000 | 2,742,000,000 | $ 2,325,000,000 | |||
Goodwill, acquired during period | 505,000,000 | ||||||
Paroc Group | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price, net of cash acquired | € 900 | $ 1,121,000,000 | |||||
Net sales | 215,000,000 | ||||||
Cost of sales | 2,000,000 | ||||||
Property, plant, and equipment acquired | 306,000,000 | 306,000,000 | |||||
Deferred tax liabilities | 99,000,000 | 99,000,000 | |||||
Goodwill, acquired during period | 486,000,000 | ||||||
Cash acquired from acquisition | 17,000,000 | ||||||
Pittsburgh Corning | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price, net of cash acquired | $ 563,000,000 | ||||||
Goodwill, acquired during period | 155,000,000 | ||||||
Cash acquired from acquisition | 52,000,000 | ||||||
Net sales recognized | 128,000,000 | ||||||
Goodwill, expected tax deductible amount | $ 0 | $ 0 |
ACQUISITIONS - Intangible Asset
ACQUISITIONS - Intangible Assets Acquired (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Paroc Group | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 508 |
Pittsburgh Corning | |
Business Acquisition [Line Items] | |
Intangible assets acquired | 245 |
Customer relationships | Paroc Group | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 215 |
Weighted average useful life | 20 years |
Customer relationships | Pittsburgh Corning | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 107 |
Weighted average useful life | 19 years |
Technology | Pittsburgh Corning | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 37 |
Weighted average useful life | 15 years |
Technology - Know-how | Paroc Group | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 61 |
Weighted average useful life | 15 years |
Technology - Patented | Paroc Group | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 12 |
Weighted average useful life | 5 years |
Quarry Rights | Paroc Group | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 7 |
Weighted average useful life | 45 years |
Trademarks | Paroc Group | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 213 |
Trademarks | Pittsburgh Corning | |
Business Acquisition [Line Items] | |
Intangible assets acquired | $ 101 |
WARRANTIES (Details)
WARRANTIES (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Movement In Standard And Extended Product Warranty Increase Decrease Roll Forward | |
Product warranty accrual, beginning balance | $ 55 |
Amounts accrued for current year | 11 |
Settlements of warranty claims | (6) |
Product warranty accrual, ending balance | $ 60 |
RESTRUCTURING AND ACQUISITION56
RESTRUCTURING AND ACQUISITION-RELATED COSTS ACQUISITIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | $ 1 | $ 10 | $ 15 | $ 11 |
Marketing and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | 6 | |||
Other expenses, net | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | 9 | |||
Paroc Group | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | 14 | |||
Paroc Group | Marketing and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | 5 | |||
Paroc Group | Other expenses, net | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | 9 | |||
Pittsburgh Corning | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | 1 | |||
Pittsburgh Corning | Marketing and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | 1 | |||
Pittsburgh Corning | Other expenses, net | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Acquisition related costs | $ 0 |
RESTRUCTURING AND ACQUISITION57
RESTRUCTURING AND ACQUISITION-RELATED COSTS RESTRUCTURING (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | $ 7 | $ 29 | $ 12 | $ 29 | |
Payments | (12) | ||||
Non-cash items and reclassifications to other accounts | (6) | ||||
Restructuring reserve | 14 | 14 | $ 20 | ||
Cumulative charges incurred | 58 | 58 | |||
Pittsburgh Corning Related Restructuring | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 1 | ||||
Payments | (2) | ||||
Non-cash items and reclassifications to other accounts | (1) | ||||
Restructuring reserve | 7 | 7 | 9 | ||
Cumulative charges incurred | 18 | 18 | |||
Cost Reductions Actions 2017 | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 11 | ||||
Restructuring and related cost, accelerated depreciation | 7 | ||||
Payments | (10) | ||||
Non-cash items and reclassifications to other accounts | (5) | ||||
Restructuring reserve | 7 | 7 | $ 11 | ||
Cumulative charges incurred | 40 | 40 | |||
Employee Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring reserve | 14 | 14 | |||
Restructuring reserve, noncurrent | 2 | 2 | |||
Restructuring reserve, current | 12 | 12 | |||
Employee Severance | Pittsburgh Corning Related Restructuring | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 1 | ||||
Employee Severance | Cost Reductions Actions 2017 | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 2 | ||||
Employee Severance | Cost Reductions Actions 2017 | Other expenses, net | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 1 | 25 | 2 | 25 | |
Additional Exit Costs | Cost Reductions Actions 2017 | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 2 | ||||
Restructuring and related cost, expected cost remaining | 10 | 10 | |||
Additional Exit Costs | Cost Reductions Actions 2017 | Cost of sales | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 2 | 2 | 4 | 2 | |
Additional Exit Costs | Cost Reductions Actions 2017 | Other expenses, net | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs | 1 | 0 | (2) | 0 | |
Accelerated Depreciation | Cost Reductions Actions 2017 | Cost of sales | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, accelerated depreciation | $ 3 | $ 2 | $ 8 | $ 2 |
DEBT (Details)
DEBT (Details) | 3 Months Ended | 6 Months Ended | |||||||||||||||
Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2012USD ($) | Jun. 30, 2018USD ($) | May 04, 2018USD ($) | Apr. 01, 2018USD ($) | Jan. 25, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 27, 2017USD ($)term_loan | Jun. 26, 2017USD ($) | Aug. 08, 2016USD ($) | Mar. 31, 2016 | Dec. 31, 2015USD ($) | Nov. 12, 2014USD ($) | Oct. 17, 2012USD ($) | ||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 3,640,000,000 | $ 3,640,000,000 | $ 2,409,000,000 | ||||||||||||||
Fair value long-term debt | [1] | 100.00% | 100.00% | 100.00% | |||||||||||||
Unamortized interest rate swap basis adjustment | $ 6,000,000 | $ 6,000,000 | $ 6,000,000 | ||||||||||||||
Long-term debt, current maturities | 4,000,000 | 4,000,000 | 4,000,000 | ||||||||||||||
Long-term debt, net of current portion | 3,636,000,000 | 3,636,000,000 | 2,405,000,000 | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 800,000,000 | ||||||||||||||||
Short-term debt | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||||||||||||||
Debt instrument, term | 1 year | ||||||||||||||||
Short-term debt, weighted average interest rate, at point in time | 5.00% | 5.00% | 6.70% | ||||||||||||||
Senior Notes Due 2022 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 597,000,000 | $ 597,000,000 | $ 597,000,000 | ||||||||||||||
Fair value long-term debt | 101.00% | 101.00% | 105.00% | ||||||||||||||
Long-term debt, percentage rate | 4.20% | 4.20% | 4.20% | ||||||||||||||
Debt instrument, face amount | $ 600,000,000 | ||||||||||||||||
Debt instrument, interest rate, stated percentage | 4.20% | ||||||||||||||||
Senior Notes Due 2024 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 393,000,000 | $ 393,000,000 | $ 392,000,000 | ||||||||||||||
Fair value long-term debt | 100.00% | 100.00% | 105.00% | ||||||||||||||
Long-term debt, percentage rate | 4.20% | 4.20% | 4.20% | ||||||||||||||
Debt instrument, face amount | $ 400,000,000 | ||||||||||||||||
Senior Notes Due 2026 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 395,000,000 | $ 395,000,000 | $ 395,000,000 | ||||||||||||||
Fair value long-term debt | 91.00% | 91.00% | 98.00% | ||||||||||||||
Long-term debt, percentage rate | 3.40% | 3.40% | 3.40% | ||||||||||||||
Debt instrument, face amount | $ 400,000,000 | ||||||||||||||||
Senior Notes Due 2036 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | ||||||||||||||
Fair value long-term debt | 116.00% | 116.00% | 132.00% | ||||||||||||||
Long-term debt, percentage rate | 7.00% | 7.00% | 7.00% | ||||||||||||||
Debt instrument, face amount | $ 540,000,000 | ||||||||||||||||
Repayments of debt | $ 140,000,000 | ||||||||||||||||
Senior Notes Due 2047 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 588,000,000 | $ 588,000,000 | $ 588,000,000 | ||||||||||||||
Fair value long-term debt | 82.00% | 82.00% | 99.00% | ||||||||||||||
Long-term debt, percentage rate | 4.30% | 4.30% | |||||||||||||||
Debt instrument, face amount | $ 600,000,000 | ||||||||||||||||
Senior Notes Due 2048 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 389,000,000 | $ 389,000,000 | $ 0 | ||||||||||||||
Fair value long-term debt | 83.00% | 83.00% | |||||||||||||||
Long-term debt, percentage rate | 4.40% | 4.40% | |||||||||||||||
Debt instrument, face amount | $ 400,000,000 | ||||||||||||||||
Receivables securitization facility, maturing in 2020 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 258,000,000 | $ 258,000,000 | 0 | ||||||||||||||
Fair value long-term debt | [1] | 100.00% | 100.00% | ||||||||||||||
Term loan borrowings, maturing in 2021 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 585,000,000 | $ 585,000,000 | 0 | ||||||||||||||
Fair value long-term debt | [1] | 100.00% | 100.00% | ||||||||||||||
Capital Lease Obligations | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt | $ 29,000,000 | $ 29,000,000 | $ 31,000,000 | ||||||||||||||
Fair value long-term debt | [1] | 100.00% | 100.00% | 100.00% | |||||||||||||
Senior Notes Due 2019 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of debt | $ 144,000,000 | $ 105,000,000 | $ 100,000,000 | ||||||||||||||
Senior Notes Due 2016 | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Repayments of debt | 158,000,000 | $ 242,000,000 | $ 250,000,000 | ||||||||||||||
Term Loan Commitment | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Number of term loan commitments | term_loan | 2 | ||||||||||||||||
Term Loan Commitment One | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | ||||||||||||||||
Term Loan Commitment Two | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Line of credit facility, maximum borrowing capacity | 600,000,000 | ||||||||||||||||
Senior Revolving Credit Facility B | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Proceeds from issuance of debt | $ 600,000,000 | ||||||||||||||||
Line of credit facility, maximum borrowing capacity | 800,000,000 | $ 800,000,000 | $ 600,000,000 | $ 600,000,000 | |||||||||||||
Letter Of Credit Under Receivables Purchase Agreement | |||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||
Long-term debt, current maturities | $ 250,000,000 | $ 280,000,000 | |||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 280,000,000 | $ 280,000,000 | |||||||||||||||
[1] | The Company determined that the book value of the above noted long-term debt instruments approximates fair value. |
DEBT - Credit Facility Utilizat
DEBT - Credit Facility Utilization (Details) - USD ($) $ in Millions | Jun. 30, 2018 | May 04, 2018 | Oct. 27, 2017 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Facility size or borrowing limit | $ 800 | |||
Senior Revolving Credit Facility B | ||||
Debt Instrument [Line Items] | ||||
Facility size or borrowing limit | $ 800 | $ 600 | $ 600 | |
Outstanding borrowings | 0 | |||
Outstanding letters of credit | 9 | |||
Availability on facility | 791 | |||
Letter Of Credit Under Receivables Purchase Agreement | ||||
Debt Instrument [Line Items] | ||||
Facility size or borrowing limit | 280 | |||
Collateral capacity limitation on availability | 19 | |||
Outstanding borrowings | 258 | |||
Outstanding letters of credit | 3 | |||
Availability on facility | $ 0 |
PENSION PLANS AND OTHER POSTR60
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS - Prospective Adoption of New Accounting Policy (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Cost of sales | $ 1,406 | $ 1,189 | $ 2,742 | $ 2,325 |
Other expenses, net | 6 | 13 | 26 | 24 |
Non-operating (income) expense | $ (3) | 29 | $ (7) | 27 |
Adoption Impact | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Cost of sales | 1 | 2 | ||
Other expenses, net | (30) | (29) | ||
Non-operating (income) expense | 29 | 27 | ||
Before Adoption | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Cost of sales | 1,188 | 2,323 | ||
Other expenses, net | 43 | 53 | ||
Non-operating (income) expense | 0 | 0 | ||
After Adoption | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Cost of sales | 1,189 | 2,325 | ||
Other expenses, net | 13 | 24 | ||
Non-operating (income) expense | $ 29 | $ 27 |
PENSION PLANS AND OTHER POSTR61
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | |
Pension Plan | |||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Service cost | $ 3 | $ 3 | $ 6 | $ 6 | |
Interest cost | 12 | 15 | 24 | 28 | |
Expected return on plan assets | (17) | (22) | (36) | (41) | |
Amortization of prior service cost | 7 | 10 | |||
Amortization of actuarial loss | 3 | 6 | |||
Settlement loss | 0 | 30 | 0 | 30 | |
Net periodic pension (gain)/cost | 1 | 32 | 1 | 33 | |
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |||||
Contributions by employer | 7 | ||||
Other Postretirement Benefits Plan | |||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Service cost | 0 | 1 | 1 | 2 | |
Interest cost | 1 | 2 | 3 | 4 | |
Amortization of prior service cost | (1) | (1) | (2) | (2) | |
Amortization of actuarial loss | (1) | (1) | (3) | (2) | |
Net periodic pension (gain)/cost | (1) | 1 | (1) | 2 | |
U.S. | Pension Plan | |||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Service cost | 1 | 1 | 3 | 3 | |
Interest cost | 8 | 10 | 17 | 20 | |
Expected return on plan assets | (13) | (15) | (27) | (29) | |
Amortization of prior service cost | 6 | 7 | |||
Amortization of actuarial loss | 3 | 4 | |||
Settlement loss | 0 | 0 | 0 | 0 | |
Net periodic pension (gain)/cost | (1) | 0 | (1) | 1 | |
Foreign Plan | Pension Plan | |||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||||
Service cost | 2 | 2 | 3 | 3 | |
Interest cost | 4 | 5 | 7 | 8 | |
Expected return on plan assets | (4) | (7) | (9) | (12) | |
Amortization of prior service cost | 1 | 3 | |||
Amortization of actuarial loss | 0 | 2 | |||
Settlement loss | 0 | 30 | 0 | 30 | |
Net periodic pension (gain)/cost | $ 2 | $ 32 | $ 2 | $ 32 | |
Scenario, Forecast | U.S. | Pension Plan | |||||
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |||||
Expected future employer contributions, current fiscal year | $ 50 | ||||
Scenario, Forecast | Foreign Plan | Pension Plan | |||||
Defined Benefit Plan, Estimated Future Benefit Payments [Abstract] | |||||
Expected future employer contributions, current fiscal year | $ 13 |
CONTINGENT LIABILITIES AND OT62
CONTINGENT LIABILITIES AND OTHER MATTERS (Details) $ in Millions | Jun. 30, 2018USD ($)site |
Unusual or Infrequent Item, or Both [Line Items] | |
Environmental liability sites | 23 |
Environmental exit costs, accrual | $ | $ 17 |
Environmental exit costs, accrual, current | $ | $ 8 |
Superfund Site | |
Unusual or Infrequent Item, or Both [Line Items] | |
Environmental liability sites | 8 |
Owned or Formally Owned Sites | |
Unusual or Infrequent Item, or Both [Line Items] | |
Environmental liability sites | 15 |
STOCK COMPENSATION - Narrative
STOCK COMPENSATION - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($) | Apr. 18, 2013shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants (in shares) | shares | 0 | ||||
Vesting period | 4 years | ||||
Expected volatility rate | 24.60% | ||||
Risk free interest rate | 2.20% | ||||
Expected term (in years) | 2 years 11 months | ||||
Maximum employee subscription rate | 85.00% | ||||
Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for grant | shares | 2,000,000 | ||||
Options Maximum term (in years) | 10 years | ||||
Allocated share based compensation expense (less than) | $ 0 | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |
Compensation not yet recognized, stock options | 0 | 0 | |||
Intrinsic value | 13,000,000 | 13,000,000 | |||
Employee emergence equity program expense | 1,000,000 | 1,000,000 | 2,000,000 | 2,000,000 | |
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Allocated share based compensation expense (less than) | 5,000,000 | 5,000,000 | 11,000,000 | 10,000,000 | |
Compensation cost not yet recognized | 43,000,000 | $ 43,000,000 | |||
Expected term (in years) | 2 years 9 months 7 days | ||||
Vested in period, fair value | $ 22,000,000 | 18,000,000 | |||
Performance Stock Units (PSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Allocated share based compensation expense (less than) | 6,000,000 | $ 3,000,000 | $ 9,000,000 | $ 8,000,000 | |
Compensation cost not yet recognized | $ 23,000,000 | $ 23,000,000 | |||
Period for recognition (in years) | 1 year 9 months 15 days | ||||
Stock Plan Member, 2016 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for grant | shares | 2,500,000 | 2,500,000 | |||
Internal Based Performance Metric | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance stock payout minimum | 0 | ||||
Performance stock payout range maximum | 3 | ||||
External Based Performance Metric | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance stock payout minimum | 0 | ||||
Performance stock payout range maximum | 2 | ||||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for grant | shares | 800,000 | 800,000 | |||
Allocated share based compensation expense (less than) | $ 2,000,000 |
STOCK COMPENSATION - Stock Opti
STOCK COMPENSATION - Stock Option Activity (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Beginning Balance | shares | 518,725 |
Exercised (in shares) | shares | (33,750) |
Forfeited (in shares) | shares | (750) |
Ending Balance | shares | 484,225 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Beginning Balance | $ / shares | $ 37.17 |
Exercised, weighted average exercise price | $ / shares | 36.91 |
Forfeited, weighted average exercise price | $ / shares | 37.65 |
Ending Balance | $ / shares | $ 37.19 |
STOCK COMPENSATION - Options Ou
STOCK COMPENSATION - Options Outstanding and Exercisable (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Exercise Price Range One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, number of outstanding options | shares | 484,225 |
Weighted average remaining contractual term (in years) | 4 years 6 months 4 days |
Exercise price range, outstanding options, weighted average exercise price | $ 37.19 |
Exercise price range, number of exercisable options | shares | 484,225 |
Exercise price range, exercisable options, weighted average remaining contractual term (in years) | 4 years 6 months 4 days |
Exercise price range, exercisable options, weighted average exercise price | $ 37.19 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, exercisable options, weighted average exercise price | 13.89 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price range, exercisable options, weighted average exercise price | $ 42.16 |
STOCK COMPENSATION - Restricted
STOCK COMPENSATION - Restricted Stock Activity (Details) - Restricted Stock | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning Balance | shares | 1,752,136 |
Granted (in shares) | shares | 278,785 |
Vested (in shares) | shares | (515,280) |
Forfeited (in shares) | shares | (57,088) |
Ending Balance | shares | 1,458,553 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning Balance | $ / shares | $ 42.40 |
Granted, weighted average grant date fair value | $ / shares | 91.49 |
Vested, weighted average grant date fair value | $ / shares | 41.81 |
Forfeited, weighted average grant date fair value | $ / shares | 48.32 |
Ending Balance | $ / shares | $ 51.59 |
STOCK COMPENSATION - Performanc
STOCK COMPENSATION - Performance Stock Units (Details) - Performance Stock Units (PSUs) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning Balance | shares | 451,148 |
Granted (in shares) | shares | 171,725 |
Forfeited (in shares) | shares | (48,396) |
Ending Balance | shares | 574,477 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning Balance | $ / shares | $ 53.96 |
Granted, weighted average grant date fair value | $ / shares | 94.14 |
Forfeited, weighted average grant date fair value | $ / shares | 54.30 |
Ending Balance | $ / shares | $ 69.55 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Oct. 24, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Net earnings attributable to Owens Corning | $ 121 | $ 96 | $ 213 | $ 197 | |
Weighted-average number of shares outstanding used for basic earnings per share | 110,900,000 | 111,600,000 | 111,200,000 | 112,000,000 | |
Non-vested restricted and performance shares | 800,000 | 1,200,000 | 800,000 | 1,200,000 | |
Options to purchase common stock | 200,000 | 300,000 | 200,000 | 300,000 | |
Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share | 111,900,000 | 113,100,000 | 112,200,000 | 113,500,000 | |
Basic (in dollars per share) | $ 1.09 | $ 0.86 | $ 1.92 | $ 1.76 | |
Diluted (in dollars per share) | $ 1.08 | $ 0.85 | $ 1.90 | $ 1.74 | |
Equity Class Of Treasury Stock [Line Items] | |||||
Stock repurchased during period, shares | 1,300,000 | ||||
Payments for repurchase of equity | $ 103 | ||||
Stock repurchase program, remaining number of shares authorized to be repurchased | 6,200,000 | 6,200,000 | |||
Repurchase Program 2016 | |||||
Equity Class Of Treasury Stock [Line Items] | |||||
Stock repurchase program, number of shares authorized to be repurchased | 10,000,000 | ||||
Restricted Stock | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share amount | 300,000 | ||||
Performance Shares | |||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share amount | 0 | 200,000 | 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | Dec. 22, 2017 | Dec. 21, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jan. 01, 2018 |
Income Tax Contingency [Line Items] | |||||||
Income tax expense | $ 49 | $ 67 | $ 60 | $ 110 | |||
Effective tax rate | 28.00% | 41.00% | 22.00% | 36.00% | |||
Federal statutory tax rate | 21.00% | 35.00% | 21.00% | 35.00% | |||
Other Assets | Accounting Standards Update 2016-16 | |||||||
Income Tax Contingency [Line Items] | |||||||
Cumulative effect of new accounting principle in period of adoption | $ 17 | ||||||
Deferred Income Tax Assets | Accounting Standards Update 2016-16 | |||||||
Income Tax Contingency [Line Items] | |||||||
Cumulative effect of new accounting principle in period of adoption | 7 | ||||||
Retained Earnings | Accounting Standards Update 2016-16 | |||||||
Income Tax Contingency [Line Items] | |||||||
Cumulative effect of new accounting principle in period of adoption | $ 10 |
CHANGES IN ACCUMULATED OTHER 70
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Total AOCI beginning balance | $ (514) | ||||
Amounts classified into AOCI, net of tax | $ 0 | $ 7 | 2 | $ 8 | |
Total AOCI ending balance | (600) | (634) | (600) | (634) | |
Currency Translation Adjustment | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Total AOCI beginning balance | (198) | (248) | (183) | (284) | |
Net investment hedge amounts classified into AOCI, net of tax | 20 | (9) | 1 | (9) | |
(Loss)/gain on foreign currency translation | (94) | 38 | (90) | 74 | |
Other Comprehensive Income (Loss), Net of Tax | (74) | 29 | (89) | 65 | |
Total AOCI ending balance | (272) | (219) | (272) | (219) | |
Pension and Other Postretirement Adjustment | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Total AOCI beginning balance | (333) | (429) | (331) | (429) | |
Other Comprehensive Income (Loss), Net of Tax | 4 | 14 | 2 | 14 | |
Amounts reclassified from AOCI to net earnings, net of tax | [1] | 1 | 17 | 2 | 18 |
Amounts classified into AOCI, net of tax | 3 | (3) | 0 | (4) | |
Total AOCI ending balance | (329) | (415) | (329) | (415) | |
Hedging Adjustment | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||||
Total AOCI beginning balance | 1 | 1 | 0 | 3 | |
Other Comprehensive Income (Loss), Net of Tax | 0 | (1) | 1 | (3) | |
Amounts reclassified from AOCI to net earnings, net of tax | [2] | 0 | 0 | 0 | (1) |
Amounts classified into AOCI, net of tax | 0 | (1) | 1 | (2) | |
Total AOCI ending balance | $ 1 | $ 0 | $ 1 | $ 0 | |
[1] | These AOCI components are included in the computation of total Pension and OPEB expense and are recorded in Non-operating income. See Note 12 for additional information. | ||||
[2] | Amounts reclassified from gain/(loss) on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings and are recognized in Cost of sales. See Note 5 for additional information. |