CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The following Condensed Consolidating Financial Statements present the financial information required with respect to those entities which guarantee certain of the Company’s debt. The Condensed Consolidating Financial Statements are presented on the equity method. Under this method, the investments in subsidiaries are recorded at cost and adjusted for the Company’s share of the subsidiaries’ cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investment in subsidiaries and intercompany balances and transactions.

Additional domestic subsidiaries were added to the Credit Agreement as Guarantor Subsidiaries as of September 30, 2016. As a result, the Condensed Consolidating Financial Statements presented for previous periods were retrospectively revised based on the guarantor structure that existed as of September 30, 2016. The impact of these revisions was not material to the periods presented.

Guarantor and Nonguarantor Financial Statements

The Senior Notes and the Senior Revolving Credit Facility are guaranteed, fully, unconditionally and jointly and severally, by certain of Owens Corning’s current and future wholly-owned material domestic subsidiaries that are borrowers or guarantors under the Credit Agreement, which permits changes to the named guarantors in certain situations (collectively, the “Guarantor Subsidiaries”). The remaining subsidiaries have not guaranteed the Senior Notes and the Senior Revolving Credit Facility (collectively, the “Non-Guarantor Subsidiaries”).

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF EARNINGS

FOR THE THREE MONTHS ENDED JUNE 30, 2017

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
NET SALES	$	—		$	1,171		$	544		$	(118	)	$	1,597
COST OF SALES	—			881			425			(118		)	1,188
Gross margin	—			290			119			—			409
OPERATING EXPENSES
Marketing and administrative expenses	38			86			31			—			155
Science and technology expenses	—			18			3			—			21
Other expenses, net	4			(39		)	78			—			43
Total operating expenses	42			65			112			—			219
EARNINGS BEFORE INTEREST AND TAXES	(42		)	225			7			—			190
Interest expense, net	24			—			3			—			27
EARNINGS BEFORE TAXES	(66		)	225			4			—			163
Income tax expense	(27		)	82			12			—			67
Equity in net earnings of subsidiaries	135			(8		)	—			(127		)	—
Equity in net earnings of affiliates	—			—			—			—			—
NET EARNINGS	96			135			(8		)	(127		)	96
Net earnings attributable to noncontrolling interests	—			—			—			—			—
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	96		$	135		$	(8	)	$	(127	)	$	96

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF EARNINGS

FOR THE THREE MONTHS ENDED JUNE 30, 2016

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
NET SALES	$	—		$	1,090		$	567		$	(112	)	$	1,545
COST OF SALES	1			821			419			(112		)	1,129
Gross margin	(1		)	269			148			—			416
OPERATING EXPENSES
Marketing and administrative expenses	35			81			35			—			151
Science and technology expenses	—			17			4			—			21
Other expenses, net	(1		)	23			(18		)	—			4
Total operating expenses	34			121			21			—			176
EARNINGS BEFORE INTEREST AND TAXES	(35		)	148			127			—			240
Interest expense, net	24			(1		)	6			—			29
EARNINGS BEFORE TAXES	(59		)	149			121			—			211
Income tax expense	(31		)	71			33			—			73
Equity in net earnings of subsidiaries	166			88			—			(254		)	—
Equity in net earnings of affiliates	—			—			1			—			1
NET EARNINGS	138			166			89			(254		)	139
Net earnings attributable to noncontrolling interests	—			—			1			—			1
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	138		$	166		$	88		$	(254	)	$	138

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF EARNINGS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
NET SALES	$	—		$	2,265		$	1,055	$	(245	)	$	3,075
COST OF SALES	1			1,747			820		(245		)	2,323
Gross margin	(1		)	518			235		—			752
OPERATING EXPENSES
Marketing and administrative expenses	74			163			60		—			297
Science and technology expenses	—			35			7		—			42
Other expenses, net	2			(30		)	81		—			53
Total operating expenses	76			168			148		—			392
EARNINGS BEFORE INTEREST AND TAXES	(77		)	350			87		—			360
Interest expense, net	47			—			6		—			53
EARNINGS BEFORE TAXES	(124		)	350			81		—			307
Income tax expense	(55		)	132			33		—			110
Equity in net earnings of subsidiaries	266			48			—		(314		)	—
Equity in net earnings of affiliates	—			—			—		—			—
NET EARNINGS	197			266			48		(314		)	197
Net earnings attributable to noncontrolling interests	—			—			—		—			—
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	197		$	266		$	48	$	(314	)	$	197

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF EARNINGS

FOR THE SIX MONTHS ENDED JUNE 30, 2016

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
NET SALES	$	—		$	1,977		$	1,025		$	(226	)	$	2,776
COST OF SALES	2			1,551			761			(226		)	2,088
Gross margin	(2		)	426			264			—			688
OPERATING EXPENSES
Marketing and administrative expenses	68			153			64			—			285
Science and technology expenses	—			33			7			—			40
Other expenses, net	(3		)	35			(25		)	—			7
Total operating expenses	65			221			46			—			332
EARNINGS BEFORE INTEREST AND TAXES	(67		)	205			218			—			356
Interest expense, net	46			(1		)	7			—			52
EARNINGS BEFORE TAXES	(113		)	206			211			—			304
Income tax expense	(50		)	95			62			—			107
Equity in net earnings of subsidiaries	258			147			—			(405		)	—
Equity in net earnings of affiliates	—			—			1			—			1
NET EARNINGS	195			258			150			(405		)	198
Net earnings attributable to noncontrolling interests	—			—			3			—			3
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	195		$	258		$	147		$	(405	)	$	195

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS

FOR THE THREE MONTHS ENDED JUNE 30, 2017

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
NET EARNINGS	$	96		$	135		$	(8	)	$	(127	)	$	96
Currency translation adjustment (net of tax)	29			—			37			(37		)	29
Pension and other postretirement adjustment (net of tax)	14			(2		)	16			(14		)	14
Hedging adjustment (net of tax)	(1		)	—			—			—			(1		)
COMPREHENSIVE EARNINGS	138			133			45			(178		)	138
Comprehensive earnings attributable to noncontrolling interests	—			—			—			—			—
COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	138		$	133		$	45		$	(178	)	$	138

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS

FOR THE THREE MONTHS ENDED JUNE 30, 2016

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
NET EARNINGS	$	138		$	166		$	89		$	(254	)	$	139
Currency translation adjustment (net of tax)	(13		)	(3		)	(17		)	20			(13		)
Pension and other postretirement adjustment (net of tax)	—			23			(2		)	(21		)	—
Hedging adjustment (net of tax)	3			—			2			(2		)	3
COMPREHENSIVE EARNINGS	128			186			72			(257		)	129
Comprehensive earnings attributable to noncontrolling interests	—			—			1			—			1
COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	128		$	186		$	71		$	(257	)	$	128

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

(in millions)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
NET EARNINGS	$	197		$	266		$	48	$	(314	)	$	197
Currency translation adjustment (net of tax)	65			1			73		(74		)	65
Pension and other postretirement adjustment (net of tax)	14			(3		)	14		(11		)	14
Hedging adjustment (net of tax)	(3		)	—			—		—			(3		)
COMPREHENSIVE EARNINGS	273			264			135		(399		)	273
Comprehensive earnings attributable to noncontrolling interests	—			—			—		—			—
COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	273		$	264		$	135	$	(399	)	$	273

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF COMPREHENSIVE EARNINGS

FOR THE SIX MONTHS ENDED JUNE 30, 2016

(in millions)

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
NET EARNINGS	$	195	$	258		$	150	$	(405	)	$	198
Currency translation adjustment (net of tax)	21		(4		)	26		(22		)	21
Pension and other postretirement adjustment (net of tax)	10		22			1		(23		)	10
Hedging adjustment (net of tax)	4		1			1		(2		)	4
COMPREHENSIVE EARNINGS	230		277			178		(452		)	233
Comprehensive earnings attributable to noncontrolling interests	—		—			3		—			3
COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	230	$	277		$	175	$	(452	)	$	230

OWENS CORNING AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2017

(in millions)

ASSETS	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS
Cash and cash equivalents	$	—		$	58	$	141	$	—		$	199
Receivables, net	—			—		915		—			915
Due from affiliates	—			2,822		—		(2,822		)	—
Inventories	—			435		357		—			792
Assets held for sale	—			—		10		—			10
Other current assets	18			29		25		—			72
Total current assets	18			3,344		1,448		(2,822		)	1,988
Investment in subsidiaries	8,460			2,135		—		(10,595		)	—
Property, plant and equipment, net	468			1,619		1,249		—			3,336
Goodwill	—			1,159		325		—			1,484
Intangible assets, net	—			1,027		413		(79		)	1,361
Deferred income taxes	(38		)	293		66		—			321
Other non-current assets	11			64		125		—			200
TOTAL ASSETS	$	8,919		$	9,641	$	3,626	$	(13,496	)	$	8,690
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	72		$	794	$	247	$	—		$	1,113
Due to affiliates	1,933			—		889		(2,822		)	—
Long-term debt – current portion	—			2		1		—			3
Total current liabilities	2,005			796		1,137		(2,822		)	1,116
Long-term debt, net of current portion	2,658			11		17		—			2,686
Pension plan liability	239			—		133		—			372
Other employee benefits liability	—			205		35		—			240
Deferred income taxes	—			—		75		—			75
Other liabilities	41			169		55		(79		)	186
Redeemable equity	—			—		—		—			—
OWENS CORNING STOCKHOLDERS’ EQUITY
Total Owens Corning stockholders’ equity	3,976			8,460		2,135		(10,595		)	3,976
Noncontrolling interests	—			—		39		—			39
Total equity	3,976			8,460		2,174		(10,595		)	4,015
TOTAL LIABILITIES AND EQUITY	$	8,919		$	9,641	$	3,626	$	(13,496	)	$	8,690

OWENS CORNING AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2016

(in millions)

ASSETS	Parent			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
CURRENT ASSETS
Cash and cash equivalents	$	—		$	55	$	57	$	—		$	112
Receivables, net	—			—		678		—			678
Due from affiliates	—			2,612		—		(2,612		)	—
Inventories	—			422		288		—			710
Assets held for sale	—			3		9		—			12
Other current assets	24			26		24		—			74
Total current assets	24			3,118		1,056		(2,612		)	1,586
Investment in subsidiaries	7,745			1,653		—		(9,398		)	—
Property, plant and equipment, net	470			1,600		1,042		—			3,112
Goodwill	—			1,159		177		—			1,336
Intangible assets, net	—			1,038		217		(117		)	1,138
Deferred income taxes	(42		)	360		57		—			375
Other non-current assets	19			64		111		—			194
TOTAL ASSETS	$	8,216		$	8,992	$	2,660	$	(12,127	)	$	7,741
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	75		$	832	$	53	$	—		$	960
Due to affiliates	1,941			—		671		(2,612		)	—
Long-term debt – current portion	—			2		1		—			3
Total current liabilities	2,016			834		725		(2,612		)	963
Long-term debt, net of current portion	2,069			12		18		—			2,099
Pension plan liability	244			—		123		—			367
Other employee benefits liability	—			208		13		—			221
Deferred income taxes	—			—		36		—			36
Other liabilities	38			193		50		(117		)	164
Redeemable equity	—			—		2		—			2
OWENS CORNING STOCKHOLDERS’ EQUITY
Total Owens Corning stockholders’ equity	3,849			7,745		1,653		(9,398		)	3,849
Noncontrolling interests	—			—		40		—			40
Total equity	3,849			7,745		1,693		(9,398		)	3,889
TOTAL LIABILITIES AND EQUITY	$	8,216		$	8,992	$	2,660	$	(12,127	)	$	7,741

OWENS CORNING AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDEDJUNE 30, 2017

(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations		Consolidated
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES	$	(55	)	$	125		$	322		$	—	$	392
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Cash paid for property, plant and equipment	(8		)	(129		)	(33		)	—		(170		)
Proceeds from the sale of assets or affiliates	—			3			—			—		3
Investment in subsidiaries and affiliates, net of cash acquired	—			(362		)	(199		)	—		(561		)
Other	3			—			—			—		3
Net cash flow used for investing activities	(5		)	(488		)	(232		)	—		(725		)
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES
Proceeds from long-term debt	588			—			—			—		588
Proceeds from senior revolving credit and receivables securitization facilities	—			—			337			—		337
Proceeds from term loan borrowing	—			—			—			—		—
Payments on senior revolving credit and receivables securitization facilities	—			—			(337		)	—		(337		)
Net decrease in short-term debt	—			—			—			—		—
Dividends paid	(45		)	—			—			—		(45		)
Purchases of treasury stock	(134		)	—			—			—		(134		)
Intercompany dividends paid	—			—			—			—		—
Other intercompany loans	(352		)	366			(14		)	—		—
Other	3			—			—			—		3
Net cash flow provided by financing activities	60			366			(14		)	—		412
Effect of exchange rate changes on cash	—			—			9			—		9
Net increase (decrease) in cash, cash equivalents and restricted cash	—			3			85			—		88
Cash, cash equivalents and restricted cash at beginning of period	6			55			57			—		118
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	6		$	58		$	142		$	—	$	206

OWENS CORNING AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDEDJUNE 30, 2016

(in millions)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES	$	(59	)	$	225		$	171		$	(11	)	$	326
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Cash paid for property, plant and equipment	(10		)	(125		)	(52		)	—			(187		)
Proceeds from the sale of assets or affiliates	—			—			—			—			—
Investment in subsidiaries and affiliates, net of cash acquired	—			—			(450		)	—			(450		)
Other	2			—			—			—			2
Net cash flow used for investing activities	(8		)	(125		)	(502		)	—			(635		)
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES
Proceeds from long-term debt	—			—			—			—			—
Proceeds from senior revolving credit and receivables securitization facilities	—			—			434			—			434
Proceeds from term loan borrowing	300			—			—			—			300
Payments on senior revolving credit and receivables securitization facilities	—			—			(326		)	—			(326		)
Net decrease in short-term debt	—			—			(6		)	—			(6		)
Dividends paid	(40		)	—			—			—			(40		)
Purchases of treasury stock	(87		)	—			—			—			(87		)
Intercompany dividends paid	—			—			(11		)	11			—
Other intercompany loans	(110		)	(148		)	258			—			—
Other	4			—			—			—			4
Net cash flow provided by financing activities	67			(148		)	349			11			279
Effect of exchange rate changes on cash	—			—			1			—			1
Net increase (decrease) in cash, cash equivalents and restricted cash	—			(48		)	19			—			(29		)
Cash, cash equivalents and restricted cash at beginning of period	—			48			48			—			96
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	—		$	—		$	67		$	—		$	67