Owens Corning Finishes Year Strong Delivering Record Full-Year 2021 Results

Owens Corning OC, a global building and construction materials leader, today reported fourth-quarter and full-year 2021 results.

• Reported Net Sales Increase of 20% in 2021 to $8.5 Billion
• Produced Full-Year Net Earnings of $1.0 Billion Resulting in Diluted EPS of $9.54
• Expanded 2021 Adjusted EBITDA Margins to 22% and Adjusted EBIT Margins to 17%
• Increased Operating Cash Flow to $1.5 Billion and Free Cash Flow to $1.1 Billion in 2021 with Conversion of 112%
• Returned $678 Million, or 62%, of Free Cash Flow to Shareholders through Dividends and Share Repurchases in 2021
• Board of Directors Authorized Repurchase of Up to an Additional 10 Million Shares of Common Stock

"2021 was a year of tremendous accomplishment and record results for Owens Corning. Our global teams continued to elevate their performance to support our customers and generate growth in our key products and geographies, outperforming the markets we serve," said Chair and Chief Executive Officer Brian Chambers. "As we continue to focus on delivering outstanding near-term results, we are also investing to build Owens Corning for the future through our enterprise strategy which accelerates our growth, strengthens our earnings power, and creates additional value for our shareholders."

Enterprise Performance

Capital Deployment and Liquidity

• On February 3, Owens Corning announced that its Board of Directors declared a quarterly cash dividend of $0.35 per common share, a 35% increase compared with the same period in 2020.
• On February 14, Owens Corning's Board of Directors approved a share repurchase authorization for up to 10 million shares of the company's common stock. This was in addition to its previously announced share buyback program which had 3.4 million shares available for repurchase under the prior authorization as of the end of 2021.

"Earnings expansion along with our ongoing disciplined management of working capital, operating expenses, and capital investments drove record free cash flow generation in 2021 of $1.1 billion and conversion of 112%," said Executive Vice President and Chief Financial Officer Ken Parks. "During the year, we returned 62% of free cash flow to shareholders through dividends and share repurchases. Our strong and consistent cash generation combined with our solid investment-grade balance sheet support the execution of our growth strategy and delivery of our three-year financial targets outlined during our recent Investor Day."

2021 Segment Performance

Full-Year

• Composites net sales increased 19% to $2.3 billion in 2021 compared with 2020, primarily due to the favorable impact of customer mix, higher selling prices, and higher sales volumes. EBIT increased $211 million to $376 million, with 16% EBIT margins, on improved production leverage and higher selling prices, which more than offset inflation and increased transportation costs.
• Insulation net sales increased 22% to $3.2 billion compared with 2020, given higher sales volumes and selling prices. EBIT increased $196 million to $446 million, with 14% EBIT margins, on higher selling prices, which more than offset inflation and increased transportation costs, as well as higher sales volumes and the benefit of improved production leverage.
• Roofing net sales increased 19% to $3.2 billion compared with 2020, mainly due to higher selling prices and sales volumes on higher shingle and components shipments. EBIT increased $162 million to $753 million, with 23% EBIT margins, on higher sales volumes and higher selling prices, which more than offset input cost inflation, primarily asphalt and other petroleum-based products, and increased transportation costs.

Fourth-Quarter

• Composites net sales increased 11% to $608 million in fourth-quarter 2021 compared with fourth-quarter 2020, primarily due to higher selling prices and the favorable impact of customer mix. EBIT increased $38 million to $98 million, with 16% EBIT margins, on favorable mix, improved production leverage, and higher selling prices, which more than offset inflation and increased transportation costs.
• Insulation net sales increased 19% to $863 million in fourth-quarter 2021 compared with fourth-quarter 2020, given higher selling prices and sales volumes. EBIT increased $22 million to $128 million, with 15% EBIT margins, on higher sales volumes and selling prices, which more than offset inflation and increased transportation costs.
• Roofing net sales increased 1% to $712 million in fourth-quarter 2021 compared with fourth-quarter 2020, with higher selling prices largely offset by lower sales volumes and unfavorable product mix. EBIT decreased $32 million to $151 million, with 21% EBIT margins, primarily due to lower sales volumes and unfavorable product mix with higher selling prices offsetting input cost inflation, primarily asphalt and other petroleum-based products, and increased transportation costs.

Other Key Highlights

• Owens Corning sustained a high level of safety performance in 2021, with a recordable incident rate (RIR) of 0.59, an 8% improvement over 2020. The company's average RIR is in the top quartile of the U.S. manufacturing sector's average RIR in 2020 (latest data available).
• Owens Corning continues to be recognized as a leader in environmental, social and governance matters. In November, the company earned a place on the Dow Jones Sustainability World Index (DJSI World) for the 12^th consecutive year.
• Owens Corning continued to create significant value through material science in combination with customer insights to deliver 48 product launches in 2021, up more than 30% compared with 2020.
• In November, Owens Corning hosted a virtual Investor Day during which leaders discussed the company's strategy. An archived replay of the Investor Day webcast and printable files of the slide presentations are available on the Owens Corning Investor Relations website until November 2022.

First-Quarter and Full-Year 2022 Outlook

• The key economic factors that impact the company's businesses are residential repair and remodeling activity, U.S. housing starts, global commercial construction activity, and global industrial production.
• In the near term, the company expects the U.S. residential housing market and global commercial and industrial markets to remain strong. The company continues to closely manage the ongoing impacts of inflation, supply chain disruptions, and the regional impacts of the COVID-19 pandemic on the business.
• For first-quarter 2022, the company expects overall performance to result in net sales and adjusted EBIT growth for the quarter, versus the comparable quarter in the prior year.

Current 2022 financial outlook is presented below.

Fourth-Quarter 2021 Conference Call and Presentation

Wednesday, February 16, 2022
9 a.m. Eastern Time

All Callers

• Live dial-in telephone number: U.S. 1.888.317.6003; Canada 1.866.284.3684; and other international +1.412.317.6061.
• Entry number: 6130447 (Please dial in 10-15 minutes before conference call start time)
• Live webcast: https://services.choruscall.com/links/oc220216.html

Telephone and Webcast Replay

• Telephone replay will be available one hour after the end of the call through February 23, 2022. In the U.S., call 1.877.344.7529. In Canada, call 1.855.669.9658. In other international locations, call +1.412.317.0088.
• Conference replay number: 4760332.
• Webcast replay will be available for one year using the above link.

About Owens Corning

Owens Corning is a global building and construction materials leader committed to building a sustainable future through material innovation. Our three integrated businesses – Composites, Insulation, and Roofing – provide durable, sustainable, energy-efficient solutions that leverage our unique material science, manufacturing, and market knowledge to help our customers win and grow. We are global in scope, human in scale with approximately 20,000 employees in 33 countries dedicated to generating value for our customers and shareholders, and making a difference in the communities where we work and live. Founded in 1938 and based in Toledo, Ohio, USA, Owens Corning posted 2021 sales of $8.5 billion. For more information, visit www.owenscorning.com.

Use of Non-GAAP Measures

Owens Corning uses non-GAAP measures in its earnings press release that are intended to supplement investors' understanding of the company's financial information. These non-GAAP measures include EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, adjusted earnings, adjusted diluted earnings per share attributable to Owens Corning common stockholders ("adjusted EPS"), adjusted pre-tax earnings, free cash flow and free cash flow conversion. When used to report historical financial information, reconciliations of these non-GAAP measures to the corresponding GAAP measures are included in the financial tables of this press release. Specifically, see Table 2 for EBIT, adjusted EBIT, EBITDA and adjusted EBITDA, Table 7 for adjusted earnings and adjusted EPS, and Table 8 for free cash flow.

For purposes of internal review of Owens Corning's year-over-year operational performance, management excludes from net earnings attributable to Owens Corning certain items it believes are not representative of ongoing operations. The non-GAAP financial measures resulting from these adjustments (including adjusted EBIT, adjusted EBITDA, adjusted earnings, adjusted EPS and adjusted pre-tax earnings) are used internally by Owens Corning for various purposes, including reporting results of operations to the Board of Directors, analysis of performance, and related employee compensation measures. Management believes that these adjustments result in a measure that provides a useful representation of its operational performance; however, the adjusted measures should not be considered in isolation or as a substitute for net earnings attributable to Owens Corning as prepared in accordance with GAAP.

Free cash flow is a non-GAAP liquidity measure used by investors, financial analysts and management to help evaluate the company's ability to generate cash to pursue opportunities that enhance shareholder value. Free cash flow is not a measure of residual cash flow available for discretionary expenditures due to the company's mandatory debt service requirements. As a conversion ratio, free cash flow is compared to adjusted earnings. Free cash flow and free cash flow conversion are used internally by the company for various purposes, including reporting results of operations to the Board of Directors of the company and analysis of performance.

Management believes that these measures provide a useful representation of our operational performance and liquidity; however, the measures should not be considered in isolation or as a substitute for net cash flow provided by operating activities or net earnings attributable to Owens Corning as prepared in accordance with GAAP.

When the company provides forward-looking expectations for non-GAAP measures, the most comparable GAAP measures and a reconciliation between the non-GAAP expectations and the corresponding GAAP measures are generally not available without unreasonable effort due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP measures in future periods. The variability in timing and amount of adjusting items could have significant and unpredictable effect on our future GAAP results.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to risks, uncertainties and other factors and actual results may differ materially from any results projected in the statements. These risks, uncertainties and other factors include, without limitation: the severity and duration of the current COVID-19 pandemic on our operations, customers and suppliers, as well as related actions taken by governmental authorities and other third parties in response, each of which is uncertain, rapidly changing and difficult to predict; levels of residential, commercial and industrial construction activity; levels of global industrial production; availability and cost of energy, transportation, raw materials or other inputs; issues related to acquisitions, divestitures, joint ventures or expansions; competitive and pricing factors; demand for our products; relationships with key customers; domestic and international economic and political conditions, including new legislation, policies or other governmental actions in the U.S. or elsewhere; industry and economic conditions that affect the market and operating conditions of our customers, suppliers or lenders; climate change, weather conditions and storm activity; uninsured losses, including those from natural disasters, pandemics, catastrophe, theft or sabotage; legal and regulatory proceedings, including litigation and environmental actions; changes to tariff, trade or investment policies or laws; research and development activities and intellectual property protection; issues involving implementation and protection of Information technology systems; achievement of expected synergies, cost reductions and/or productivity improvements; the level of fixed costs required to run our business; foreign exchange and commodity price fluctuations; our level of indebtedness; our liquidity and the availability and cost of credit; levels of goodwill or other indefinite-lived intangible assets; price volatility in certain wind energy markets in the U.S.; loss of key employees, labor disputes or shortages; defined benefit plan funding obligations; and factors detailed from time to time in the company's Securities and Exchange Commission filings. The information in this news release speaks as of February 16, 2022, and is subject to change. The company does not undertake any duty to update or revise forward-looking statements except as required by federal securities laws. Any distribution of this news release after that date is not intended and should not be construed as updating or confirming such information.

Owens Corning Company News / Owens Corning Investor Relations News

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