PENSION PLANS

12 Months Ended

Dec. 31, 2014

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

PENSION PLANS

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 U.S. plan prior to 2013 and in all of 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. As of January 1, 2013, an increase in the number of inactive participants in our U.S. plan resulted in substantially all of the plan participants being inactive. Accordingly, the Company began amortizing the unrecognized cost of any retroactive amendments and actuarial gains and losses over the average remaining life expectancy of the inactive participants as opposed to the average remaining service period of the active participants.

The following tables provide a reconciliation of the change in the projected benefit obligation, the change in plan assets and the net amount recognized in the Consolidated Balance Sheets for the years ended December 31, 2014 and 2013 (in millions):

	December 31, 2014									December 31, 2013
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Change in Projected Benefit Obligation
Benefit obligation at beginning of period	$	1,070		$	546		$	1,616		$	1,187		$	554		$	1,741
Service cost	8			5			13			9			6			15
Interest cost	48			23			71			44			21			65
Actuarial (gain) loss	159			63			222			(91		)	3			(88		)
Currency (gain) loss	—			(44		)	(44		)	—			(8		)	(8		)
Benefits paid	(92		)	(23		)	(115		)	(79		)	(21		)	(100		)
Settlements / Curtailments	—			(2		)	(2		)	—			(7		)	(7		)
Other	—			(4		)	(4		)	—			(2		)	(2		)
Benefit obligation at end of period	$	1,193		$	564		$	1,757		$	1,070		$	546		$	1,616

	December 31, 2014									December 31, 2013
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Change in Plan Assets
Fair value of assets at beginning of period	$	858		$	422		$	1,280		$	856		$	404		$	1,260
Actual return on plan assets	82			50			132			60			35			95
Currency gain (loss)	—			(35		)	(35		)	—			(9		)	(9		)
Company contributions	36			16			52			20			20			40
Benefits paid	(92		)	(23		)	(115		)	(79		)	(21		)	(100		)
Settlements/curtailments	—			(2		)	(2		)	—			(7		)	(7		)
Other	(1		)	2			1			1			—			1
Fair value of assets at end of period	$	883		$	430		$	1,313		$	858		$	422		$	1,280
Funded status	$	(310	)	$	(134	)	$	(444	)	$	(212	)	$	(124	)	$	(336	)

	December 31, 2014									December 31, 2013
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Amounts Recognized in the Consolidated Balance Sheets
Prepaid pension cost	$	—		$	5		$	5		$	—		$	2		$	2
Accrued pension cost – current	(1		)	(1		)	(2		)	—			(2		)	(2		)
Accrued pension cost – non-current	(309		)	(138		)	(447		)	(212		)	(124		)	(336		)
Net amount recognized	$	(310	)	$	(134	)	$	(444	)	$	(212	)	$	(124	)	$	(336	)

Amounts Recorded in Accumulated OCI
Net actuarial loss	$	(415	)	$	(107	)	$	(522	)	$	(289	)	$	(78	)	$	(367	)

The following table presents information about the projected benefit obligation, accumulated benefit obligation (“ABO”) and plan assets of the Company’s pension plans (in millions):

	December 31, 2014						December 31, 2013
	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Plans with ABO in excess of fair value of plan assets:
Projected benefit obligation	$	1,193	$	457	$	1,650	$	1,070	$	414	$	1,484
Accumulated benefit obligation	$	1,193	$	441	$	1,634	$	1,070	$	400	$	1,470
Fair value of plan assets	$	883	$	321	$	1,204	$	858	$	293	$	1,151
Plans with fair value of assets in excess of ABO:
Projected benefit obligation	$	—	$	107	$	107	$	—	$	132	$	132
Accumulated benefit obligation	$	—	$	99	$	99	$	—	$	121	$	121
Fair value of plan assets	$	—	$	109	$	109	$	—	$	129	$	129
Total projected benefit obligation	$	1,193	$	564	$	1,757	$	1,070	$	546	$	1,616
Total accumulated benefit obligation	$	1,193	$	540	$	1,733	$	1,070	$	521	$	1,591
Total plan assets	$	883	$	430	$	1,313	$	858	$	422	$	1,280

Weighted-Average Assumptions Used to Determine Benefit Obligation

The following table presents weighted average assumptions used to determine benefit obligations at the measurement dates noted:

	December 31,
	2014		2013
United States Plans
Discount rate	3.85	%	4.65	%
Expected return on plan assets	7.00	%	7.00	%
Non-United States Plans
Discount rate	3.60	%	4.45	%
Expected return on plan assets	6.27	%	6.38	%
Rate of compensation increase	4.01	%	3.94	%

Components of Net Periodic Pension Cost

The following table presents the components of net periodic pension cost for the periods noted (in millions):

	Twelve Months Ended December 31,
	2014			2013			2012
Service cost	$	13		$	15		$	15
Interest cost	71			65			72
Expected return on plan assets	(84		)	(84		)	(86		)
Amortization of actuarial loss	11			20			29
Net periodic benefit cost	$	11		$	16		$	30

Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost

The following table presents weighted-average assumptions used to determine net periodic pension costs for the periods noted:

	Twelve Months Ended December 31,
	2014			2013			2012
United States Plans
Discount rate	4.65	%		3.80	%		4.60	%
Expected return on plan assets	7.00	%		7.50	%		7.25	%
Rate of compensation increase	N/A		(a)	N/A		(a)	N/A		(a)
Non-United States Plans
Discount rate	4.45	%		4.10	%		4.65	%
Expected return on plan assets	6.38	%		6.13	%		7.23	%
Rate of compensation increase	3.94	%		3.50	%		3.75	%

(a) Not applicable due to changes in plan made on August 1, 2009 that were effective beginning January 1, 2010.

The expected return on plan assets assumption is derived by taking into consideration the target plan asset allocation, historical rates of return on those assets, projected future asset class returns and net outperformance of the market by active investment managers. An asset return model is used to develop an expected range of returns on plan investments over a 20 year period, with the expected rate of return selected from a best estimate range within the total range of projected results. The result is then rounded down to the nearest 25 basis points.

Accumulated Other Comprehensive Earnings (Deficit)

For the year ended December 31, 2014, the Company recorded a debit of $94 million, net of tax, to OCI. Of the $(522) million balance in OCI, $19 million is expected to be recognized as net periodic pension cost during 2015. For the year ended December 31, 2013, the Company recorded a charge of $81 million, net of tax, to OCI.

Items Measured at Fair Value

The Company classifies and discloses pension plan assets in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Plan Assets

The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall under United States pension plan assets at December 31, 2014 and 2013 (in millions):

	2014
Asset Category	Level 1		Level 2		Level 3		Total
Equity
Domestic actively managed	$	99	$	39	$	—	$	138
Domestic passive index	—		61		—		61
International actively managed	81		34		—		115
International passive index	—		26		—		26
Fixed income and cash equivalents
Cash	2		—		—		2
Short-term debt	—		26		—		26
Corporate bonds	229		55		—		284
Government debt	98		—		—		98
Real estate investment trusts	28		—		—		28
Absolute return strategies	—		55		—		55
Real assets	—		50		—		50
Total United States plan assets	$	537	$	346	$	—	$	883

	2013
Asset Category	Level 1		Level 2		Level 3		Total
Equity
Domestic actively managed	$	100	$	38	$	—	$	138
Domestic passive index	—		58		—		58
International actively managed	85		36		—		121
International passive index	—		25		—		25
Fixed income and cash equivalents
Short-term debt	—		27		—		27
Corporate bonds	213		54		—		267
Government debt	91		—		—		91
Real estate investment trusts	26		—		—		26
Absolute return strategies	—		80		—		80
Real assets	—		25		—		25
Total United States plan assets	$	515	$	343	$	—	$	858

The following table summarizes the fair values, and levels within the fair value hierarchy in which the fair value measurements fall under non-United States pension plan assets at December 31, 2014 and 2013 (in millions):

	2014
Asset Category	Level 1		Level 2		Level 3		Total
Equity
Domestic actively managed	$	—	$	30	$	—	$	30
Domestic passive index	—		—		—		—
International actively managed	—		51		—		51
International passive index	—		35		—		35
Fixed income and cash equivalents
Cash and cash equivalents	—		28		—		28
Corporate bonds	—		193		—		193
Government Debt	—		—		—		—
Absolute return strategies	—		93		—		93
Total non-United States plan assets	$	—	$	430	$	—	$	430

	2013
Asset Category	Level 1		Level 2		Level 3		Total
Equity
Domestic actively managed	$	—	$	34	$	—	$	34
Domestic passive index	—		4		—		4
International actively managed	—		61		—		61
International passive index	—		28		—		28
Fixed income and cash equivalents
Cash and cash equivalents	3		22		—		25
Corporate bonds	—		162		—		162
Government Debt	—		7		—		7
Absolute return strategies	—		101		—		101
Total non-United States plan assets	$	3	$	419	$	—	$	422

Investment Strategy

The current investment policy for the United States pension plan is to have 38% of assets invested in equities, 3% in real estate, 6% in real assets, and 47% in intermediate and long-term fixed income securities, and 6% in absolute return strategies. Assets are rebalanced quarterly to conform to policy tolerances. The Company actively evaluates the reasonableness of its asset mix given changes in the projected benefit obligation and market dynamics.

Estimated Future Benefit Payments

The following table shows estimated future benefit payments from the Company’s pension plans (in millions):

Year	Estimated Benefit Payments
2015	$106
2016	$102
2017	$103
2018	$101
2019	$103
2020-2023	$509

Contributions

Owens Corning expects to contribute $48 million in cash to the United States pension plan during 2015 and another $14 million to non-United States plans. Actual contributions to the plans may change as a result of a variety of factors, including changes in laws that impact funding requirements.

Defined Contribution Plans

The Company sponsors two defined contribution plans which are available to substantially all United States employees. The Company matches a percentage of employee contributions up to a maximum level and contributes 2% of an employee’s wages regardless of employee contributions. The Company recognized expense of $34 million, $29 million and $30 million during the years ended December 31, 2014, 2013 and 2012, respectively, related to these plans.

POSTEMPLOYMENT AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

The Company maintains health care 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.

Employees become eligible to participate in the United States health care plans upon retirement if they have accumulated 10 years of service after age 45, 48 or 50, depending on the category of employee. For employees hired after December 31, 2005, the Company does not provide subsidized retiree health care. Some of the plans are contributory, with some retiree contributions adjusted annually. The Company has reserved the right to change or eliminate these benefit plans subject to the terms of collective bargaining agreements.

The Company implemented an Employee Group Waiver Plan (EGWP) effective January 1, 2013 to manage its prescription drug benefits for certain retiree groups. The Company also negotiated with certain unionized employees to increase the eligibility age for retiree medical benefits and to eliminate the post-65 retiree reimbursement account benefit for employees retiring on or after January 1, 2014.

The following table provides a reconciliation of the change in the projected benefit obligation and the net amount recognized in the Consolidated Balance Sheets for the years ended December 31, 2014 and 2013 (in millions):

	December 31, 2014									December 31, 2013
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Change in Projected Benefit Obligation
Benefit obligation at beginning of period	$	228		$	16		$	244		$	252		$	21		$	273
Service cost	2			—			2			2			1			3
Interest cost	9			1			10			8			1			9
Actuarial loss (gain)	17			—			17			(18		)	(2		)	(20		)
Currency loss (gain)	—			(1		)	(1		)	—			—			—
Plan amendments	—			—			—			—			—			—
Benefits paid	(18		)	(1		)	(19		)	(18		)	(2		)	(20		)
Other	—			1			1			2			(3		)	(1		)
Benefit obligation at end of period	$	238		$	16		$	254		$	228		$	16		$	244
Funded status	$	(238	)	$	(16	)	$	(254	)	$	(228	)	$	(16	)	$	(244	)

Amounts Recognized in the Consolidated Balance Sheets
Accrued benefit obligation – current	$	(18	)	$	(1	)	$	(19	)	$	(20	)	$	—		$	(20	)
Accrued benefit obligation – non-current	(220		)	(15		)	(235		)	(208		)	(16		)	(224		)
Net amount recognized	$	(238	)	$	(16	)	$	(254	)	$	(228	)	$	(16	)	$	(244	)

Amounts Recorded in Accumulated OCI
Net actuarial gain	$	(20	)	$	—		$	(20	)	$	21	$	6	$	27
Net prior service credit	(2		)	(5		)	(7		)	24		—		24
Net amount recognized	$	(22	)	$	(5	)	$	(27	)	$	45	$	6	$	51

Weighted-Average Assumptions Used to Determine Benefit Obligations

The following table presents the discount rates used to determine the benefit obligations:

	December 31,
	2014		2013
United States plans	3.70	%	4.35	%
Non-United States plans	3.70	%	4.45	%

Components of Net Periodic Postretirement Benefit Cost

The following table presents the components of net periodic postretirement benefit cost (in millions):

	Twelve Months Ended December 31,
	2014			2013			2012
Service cost	$	2		$	3		$	3
Interest cost	10			9			11
Amortization of prior service cost	(4		)	(4		)	(4		)
Amortization of actuarial gain	(2		)	(1		)	(3		)
Curtailment gain	—			—			(1		)
Net periodic postretirement benefit cost	$	6		$	7		$	6

Weighted-Average Assumptions Used to Determine Net Periodic Postretirement Benefit Cost

The following table presents the discount rates used to determine net periodic postretirement benefit cost:

	Twelve Months Ended December 31,
	2014		2013		2012
United States plans	4.35	%	3.50	%	4.35	%
Non-United States plans	4.45	%	3.80	%	4.10	%

The following table presents health care cost trend rates used to determine net periodic postretirement benefit cost, as well as information regarding the ultimate rate and the year in which their ultimate rate is reached:

	Twelve Months Ended December 31,
	2014		2013		2012
United States plans
Initial rate at end of year	7.00	%	7.00	%	7.00	%
Ultimate rate	5.00	%	5.00	%	5.00	%
Year in which ultimate rate is reached	2024		2023		2022
Non-United States plans
Initial rate at end of year	5.43	%	6.23	%	6.50	%
Ultimate rate	4.70	%	4.79	%	4.80	%
Year in which ultimate rate is reached	2019		2019		2019

The health care cost trend rate assumption can have a significant effect on the amounts reported. To illustrate, a one-percentage point change in the December 31, 2014 assumed health care cost trend rate would have the following effects (in millions):

	1-Percentage Point
	Increase		Decrease
Increase (decrease) in total service cost and interest cost components of net periodic postretirement benefit cost	$	1	$	—
Increase (decrease) of accumulated postretirement benefit obligation	$	10	$	(8	)

Accumulated Other Comprehensive Earnings (Deficit)

For the year ended December 31, 2014, the Company recorded other comprehensive loss of $(13) million, net of tax, to OCI. Approximately $4 million of the $27 million balance in accumulated OCI is expected to be recognized as net periodic postretirement benefit during 2015. For the year ended December 31, 2013, the Company recorded other comprehensive income of $7 million, net of tax, to OCI.

Estimated Future Benefit Payments

The following table shows estimated future benefit payments from the Company’s postretirement benefit plans (in millions):

Year	Estimated Benefit Payments
2015	$	19
2016	$	20
2017	$	20
2018	$	19
2019	$	19
2020-2024	$	88

Postemployment Benefits

The Company may also provide benefits to former or inactive employees after employment but before retirement under certain conditions. These benefits include continuation of benefits such as health care and life insurance coverage. The accrued postemployment benefits liability at December 31, 2014 and 2013 was $17 million and $18 million, respectively. The net periodic postemployment benefit expense was $1 million for each of the years ended December 31, 2014, 2013 and 2012.