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Owens Corning Reports Operating Results (10-K)

February 15, 2012 | About:
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10qk

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Owens Corning (OC) filed Annual Report for the period ended 2011-12-31.

Owens Corning has a market cap of $4.09 billion; its shares were traded at around $32.48 with a P/E ratio of 17.5 and P/S ratio of 0.8.

Highlight of Business Operations:

In 2011, we generated $461 million in earnings before interest and taxes (EBIT), which were 21 percent higher than adjusted EBIT in 2010 of $381 million. All of our businesses contributed to the increase in EBIT. The improvement was driven by increased sales volumes, favorable manufacturing productivity and pricing strategies implemented to offset, or minimize, the impact of inflation. Net earnings attributable to Owens Corning in 2011 were $276 million compared to $933 million in 2010. In 2010, net earnings attributable to Owens Corning were driven by the reversal of a valuation allowance against certain of the Companys United States deferred tax assets. See below for further information regarding adjusted EBIT, including the reconciliation to net earnings attributable to Owens Corning.

In our Insulation business, 2011 net sales were up $59 million from 2010. Substantially all of the increase in net sales was driven by higher sales volumes. Our experience shows that our residential insulation demand lags United States housing starts by approximately three months. Lagged United States housing starts were down two percent for 2011. Strength in our United States retail and contractor channels and growth in some of our international markets in 2011 as compared to 2010 offset the impact of the decline in lagged United States housing starts. In addition, the increase in net sales from our July 2011 acquisitions of two FiberTEK facilities was offset by unfavorable customer mix.

In our Insulation business, we reduced EBIT losses by $5 million in 2011 as compared to 2010. Higher sales volumes drove substantially all of the improvement in EBIT. Favorable manufacturing productivity offset raw material and delivery inflation. In addition, the launch of EcoTouch was completed during 2011.

In our Insulation business, EBIT was relatively flat in 2010 compared to 2009. Higher selling prices and favorable product mix increased EBIT by more than $40 million from 2009. This impact was offset by lower sales volumes, including underutilization of our production capacity, and material inflation.

In addition to the United States net operating losses described above, we have net operating losses in various state and foreign jurisdictions, which totaled $3.3 billion and $633 million as of December 31, 2011, respectively. Our ability to utilize these net operating losses may be limited as a result of certain events, such as insufficient future taxable income prior to expiration of the net operating losses or changes in tax legislation. Should we determine that it is likely that our recorded net operating loss benefits are not realizable, we would be required to reduce the net operating loss tax benefits reflected on our Consolidated Financial Statements to the net realizable amount by establishing an accounting valuation allowance and recording a corresponding charge to current earnings. To date, we have recorded valuation allowances against certain of these deferred tax assets.

Read the The complete Report

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