Document J3N2Oqb36R9Q4g5dKodJQ9RN2

Consolidated Statement of Income {$ Millions) 1993 2,967 1994 3,140 1995 3,360 J99 3~57 654 759 835 89 22.0% 24.2% 24.8% 25J 5 Operating Expense % Sales 364 12.3% 360 12.1% 39G 11.8% 41; 11,5/ Other (tnc.)/Exp. % Sates EBIT 41 1.4% 249 37 1.2% 343 32 1.0% 407 3< QM 453 Cost of Borrowed Funds 90 85 70 62 Pretax income Tax Provision Accounting Change-Taxes & Affiliate inc. Neiincome E.P.S11, i i ~rn_--_n_~i__m _i___i 159 70 34 123 2.80 258 101 3 160 3.38 337 130 3 210 4.42 391 150 3 __244_ 5.09 S 00001 WV-03472 ZOGGO S to was 8 ri;oo (D > aj'HjW g- S-isri- a 0 go a<9 O m *is cr CD o 0) =1 c ?T jcb OjS JtXL jPC > <cnr <D c/3 & c SC(D n. _ 8 8 c 2 u> 3 5o 3 3CL 3 Sss*C` 9IA to GJ O S G !9 cairn ms > 31 8m o> .9' 8 ia 9 8 c 23 9 (/> IQ. 9 is* CO 2 9 O. ET |D ) 9 icr 0c CD 5 Cft 1 3 CD V> Balance Sheet ($ Millions) 19 9 3 1994 1995 ro w>A CD --<DUo- cn CO 4 CO -ro*iOro CD --\o U SfO >1 c&iw o *4 ro CO 03103 *5IN E03 COcDn) 'iiOocot^'r--oo> ro--o. wu-4> cn l 2m i- ro 1Ic0o3t1c*o4 O -*;CDl0> -- jg ioin CD 4* 45* O ^'4|<0 CD I CD 03 CO O) ICO 103 -ccvonj --0co.:o**44.:c --0o r--4o* of5>t> cn I ujn! }foi0>icr> 03 -4lO> * CJ> I S!Ccn3 ;c0o!0r>o CO CO cn CD -MOJ-* ^4 cn co 03 co -4 :cn o ro tio io> cn co *4 -- io o> ;ro.o co *4 ^ o> co . ro-4 --< .4*. o> co ^ cn HTO 'trot: t ro -- ?cma> 4* :0>1C3 * -* . -- J CD 03 03 fO to !0 co:ro cn -- co i cd 'O'--* *0J- -- Ook o fen cn o .cd -- ro 4* ; o *4 -4.0 cn o> -* o> . co cd -- cn --^ -- co cn j.1, ::ro to ro w itCO ;r\j A'4 N :0 O ;CO N> -- O CD--- -- :co.cn cn 4* a cd:o *4 --. cn --*. ---- co 4*. -- -- ro "*4 to .a,"--'----, 03 on O CJ ro 4* ro 4J*" Ca> W CD ro -- -4 cn co 1996 .1997 Gash Flow Statement ($ Millions) Net Income Add: Depreciation Rebuild Provision Accounting Change-Taxes Net Income Plus Non-Cash CASH !NCR/(DECR) DUE TO CHANGE IN: Working Capital Other Current Assets/i-iabilities Other OPERATING CASH FLOW Capital Spending FREE CASH FROM OPERATIONS Equity Financing Acquisition Spending Asset Disposition Dividends Lease Financing Effect Asbestos Utiaation Payment (after taxi 1993 123 105 19 (26).... 221 Ml * "`^n 1994 160 111 29 0 301 1995 210 117 31 0 358 * 51 (43) 35 264 (138) 125 0 (30) 0 0 Q (24) (24) (20) 3 (12) (2Q) 260 (29) 288 (17?) (200) 81 88 50 50 (50) (50) 38 0 (4) (9) 37 0 _i115L ........ (51).. FREE CASH FLOW 71 38 27 1996 243 123 33 0 399 (24) (0) (21) 347 (200) 146 50 (50) 0 (17) 0 (21) 108 1997 276 130 35 0 440 o ----n (if) O) 46 466 (200) 266 50 (50) 0 (17) 0 (87) TS mmmm n m 1ZL Hi .1 162 00003 \ Owens-Coming Fibergfas Corporation Assumptions Supporting 1993'1997 Financial Projections Protection Methodoiocv: The estimate for 1993 is based upon the most current '`bottom-up" forecast from the operating units. The estimates for 1994 and beyond are based upon long-term business expectations provided by the operating units which were then compiled using a traditional spreadsheet model. Growth in Sales: The sales volumes shown are reflective of assumptions as to both volume and piles growth. Unit volume for the core businesses (without acquisitions) is assumed to grow each year at percentages ranging from a low of 3.0% to a high of 4.1%. Pricing, which has generally improved since the third quarter of 1992, is projected to continue to improve at modest rates. The assumed price increase rates range from 1.0% to a high of 2.0% in 1997. The margins for 1994 are estimated to be up from those of 1993 as economic conditions continue to improve in North America and as Europe begins recovery. European Revitalization: The European revitalization plan, announced earlier In the year, has been reflected in the numbers in that (a) the 1993 restructuring charge is included within the 1993 estimate; (b) product cost Improvements for years 1994 through 1996 have been reflected in such years' with the annual benefit reaching a total of approximately $38 million in 1996; and (c) the increased investment required has been included wiihin projected capital expenditures. Acquisitions: The Company's announced growth agenda which includes the goal of reaching safes of $5 billion by 2000 will undoubtedlynecessitate incremental acquisition or investment expenditures. We believe that any such acquisitions wilt be email in size, generally $S0 million or less, and related to our core businesses. The only transaction being presently considered is the acquisition of an European insulation manufacturer which, If consummated, would involve a purchase price of about $30 million. Nevertheless, given the growth agenda, it seems appropriate that some additional transactions, although of unknown character, be reflected in the projections. We haw done so to the extent of transactions of $50 million in each of years 1994 through 1997. co S 00004 Financing: The Comoany stiff intends to finance growth-oriented transactions with the issuance of equity, These new equity offerings will likely be in the form of convertible preferred stock. Accordingly, for purposes of these projections, it is assumed that the acquisitions enumerated above are separately financed with issues of convertible preferred stock. The felated dividends are shown on the Cash Flow Statement. The debt structure as shown on the Balance Sheet reflects the assumption that the Compan/s existing convertible debt securities, convertible at a price of $29.75, are converted in June 1994 through the use of a call for redemption. The Term Debt component of the projected debt structure reflects existing debt affected only by scheduled debt repayments. Free cashflow is assumed applied to reduce the Bank Debt component; any residual cash is assumed to result in increased balances of the Cash asset account (e.g., 1996 and 1997). The interest expose calculation is based upon the Company's existing term debt portfolio and upon the assumption that floating debt interest rates increase slightly during the time period. Working Capital Accounts: In general, the model assumes that the relationshipsbetween sales levels and the various working capilal accounts remain constant. Asbestos Litigation: The projected after-tax cash outflow for asbestos litigation is shown on the Cash Flow Statement. Periodically, during this time frame, the payment of such amounts by the Company will create the right to receive future reimbursement from an insurer; in general, in order4o preserve tax benefits, we have assumed that insurer accounts receivable will not be established and that such payments, will be charged entirely against the asbestos reserve. s 00005 ettoc.ooij5* "C6 pnfsiotm AHQ May 17. 1993 CONFIDENTIAL The Royal Bank of Canada 33 No. Dearborn Suite 2300 Chicago, II. 60602 Attn: Ms. Shelley Browne Dear Shelley: As you know, it continues to be our intention to establish a new U.3, credit facifity before the end of this July that would replace our existing credit facility. In connection with that effort ! am enclosing a set of financial projections covering 1993 through 1996. A statement of the assumptions underlying the numbers is also I have also included a copy of our new Fart Book. Feei free to cati me if you have any questions on this material. MIM:m CONFIDENTIAL s 00006 OWCNS-OfttttNa WORLD HEAOUAfl7tRS e'56*GlAS *CWft "oa&a OHtohes* MfCHAEfc I, MilUft VIC? OB{StNt AND ra*SuRJ*' May 17, 19S3 Owens Corning Trust Company Bank 25 Park Place. 16th Floor Atlanta, Ga. 30303 Attn: Ms. Deborah Armsirong Dear Debbie: As you know, it continues to be our intention to establish a new U.S. credit fectfity before the end of this July that would replace our existing credit facility. In connection with that effort, f am enclosing a set of financial projections covering 1993 through 1996. A statement of the assumptions underlying the numbers is also enclosed. I have also included a copy of our new Fact Book. Feel free to call me if you have any questions on this material. Best regards. 'Enclosure S 00007 QWEftft-ecattIMQ WOLO HEADQUARTERS *'gus rowis *:uaa C>0 ^3659 MICHAEL L MILLER -"Cl ?nfSt*|sr AND ?nt*See May 17. 1993 Credit Suisse 12 East 49 Street Tower 49, 23rd Floor New York, NY 10017 Attn; Chris Sdin Dear Chris: As you know, it continues to be our intention to establish a new U.S. credit facility before the end of this July that would replace our existing credit facility. In connection with that effort, I am enclosing a set of financial projections covering 1993 through 1996. A statement of tire assumptions undertying the numbers is also endosed. I have also included a copy of our new Fact Book. Feel free to call me if you have any questions on this material. Best regards. Enclosure s 00008 OWtNS-eOftNfMO WOKLO MCA0QUA*rfr*9 `SEROUS TOWER *"t!OG Ohio JM58 MICHAEL I. MILLER J<t ?06S!0CNr -no THgASUSeft May 17. 1993 Commerzbank AG 311 So. Wacker Dr. Suite 5800 Chicago, II. 60606 Attn: Mr. Mark Monson Dear Mark: As you know, it continues to be our intention to establish a new U.S. credit facility before the end of this July that would replace our existing credit facility. in connection with that effort. 1 am enclosing a set of financial projections covering 1993 through 1996. A statement of the assumptions underlying the numbers is also enclosed. I have also included a copy of our new Fact Book. Feel free to call me if you have any questions on this material. Best regards. MIMrm Enclosure s 00009 QWCM^OANIMO WOP*U3 HCAOQUAATCRS MICMACLI. MiUCft VICE 0*EStDEt A0 TCASU*Ca May 17. 1993 The Bank of Nova Scotra 181 W, Madison Suite 3700 Chicago, II. 60602^514 Attn: Ms. Pamela Brown Dear Pam: As you know, it continues to be our intention to establish a new U.S. credit facility before the end of this July that would replace our existing credit facility, In connection with that effort. I am enclosing a set of financial projections covering 1993 through 1996. A statement of the assumptions underlying the numbers is also enclosed. i have also included a copy of our new Fact Book. Feel free to call me if you have any questions on tills material. Best regards. MIM:m Enclosure CONFIDENTIAL S 00010 OWEMSCOflMIMS WOAIO J3gftGLAS row --CONFiDENTIAl*3UDQ Cni ajfiSS MICHAEL I. MILUn vkC6 FSiWHr 4NO TBpA$u6a May 17. 1993 Barclays Bank 200 W. Madison Suite 3700 Chicago, II. 60606-3442 Attn: Mr Michael Stallard Dear Mike: As you know, it continues to be our intention to establish a new U.S. credit facility before the end of this July that would replace our existing credit facility. In connection with that effort. I am enclosing a set of financial projections covering 1993 through 1996. A statement of the assumptions underlying the numbers is also enclosed. I have also included a copy of our new Fact Book. Feel free to call me if you have any questions 6n this material. Best regards. MIM:m Enclosure CONFIDENTIAL S 00011 WOO poesfccsr *xq 'ae*sue* May 17, 1993 CONFIDENTS Credit Lyonnais 227 W. Monroe Chicago, U. 0603 Attn: Ms. Sandra Horwiiz. VP Dear Sandra: As you know, it continues to be our intention to establish a new U.S. credit fadiity before the end of this July that would replace our existing credit facility. in connection with that effort, i am enclosing a set of financial prelections covering 1993 through 1996. A statement of the assumptions underlying the numbers is also I have also included a copy of our new Fact Book. Feei free to call me if you have any questions on this material. MlM:m Enclosure CONFIDENTIAL S 00012 Consolidated Statement of Income ($ Millions) 1992 1993 1994 1995 1996 Sales 2,878 3,044 3,221 3,452 3,661. Gross Margin 617 679 738 830 892 % Sales 2i .4% 22.3% 22.9% 24.0% 24.4% Operating Expense 372 358 374 390 406 % Sales 12.9% 11.8 % 11,6% 11.3% 11.1% Other (lnc.)/Exp. 31 50 38 33 35 % Sales 1.1% 1.6% 1.2% 1.0% 1.0% EBIT 2`14 271 327 407 452 Cost of Borrowed Funds 110 90 90 88 80 Pretax 104 181 236 319 372 Tax Provision 33 76 96 129 150 Net Income 73 134 142 192 224 ; Ef.S. 1.70 3.05 3.17 4.18 4.78 00034 3alance Sheev ($ Millions) Cash Fteceivables-Net Inventories-Net Other Current Assets Total Current Assets Net Fixed Assets Other Assets TOTAL ASSETS Account Payable & Accr'd Liab. Acc'd Income Taxes Asbestos Liability-Current Short Term Debt LT Debt-Current Portion Total Current Liabilities Long Term Debt Reserve For Rebuilds Special Litigation Reserve Other Deferred TOTAL LIABILITIES STOCKHOLDER EQUITY TOTAL LIABILITIES & stockholder EQUITY 1992 2 310 233 113 658 846 622 2,126 390 14 50 56 25 535 1,018 124 900 558 3,135 (1,009) 2,126 1993 5 360 202 81 648 904 681 2,233 465 8 50 5 31 559 983 130 850 566 3,088 (855) 2,233 1994 1995 55 377 404 222 245 97 104 701 758 925 975 755 765 2,381 2,498 488 533 13 17 40 75 14 25 24 , 27 579 677 973 870 92 70 819 710 585 606 3,048 2,933 (667) (434) 2,381 4,298 1996 182 428267 110 987 1,009 708 2,704 566 18 87 20 10 701 870 67 611 633 2,882 (178) 2,704 Cash Flow Statement ($ Millions) Net Income Add*. Depreciation & Amortization Rebuild Provision Deferred income Taxes Other Non-Cash Net income Plus Non-Cash CASH INCR/(DECR) DUE TO CHANGE IN: Working Capital Other Current Assets/Liabilities Other OPERATING CASH FLOW Capital Spending FREE CASH FROM OPERATIONS Equity Financing Acquisition Spending Dividends Litigation Payment (after tax) FREE CASH FLOW - .IMS. 73 123 27 (25) 8 206 (22) (13) 24 195 (133) 62 0 0 0 (4) 1341993 125 29 (31) 0 257 1291 142 127 (350) 0 294 (ID56 (14) 7 (27) 6 293 275 (159) (166) 134 109 30 50 (D (4)(30) (50) (50) (97) i( 8 1995 192 131 (351) 1996 224 133 (353) 00 349 385 (5) (14) (3) (5) 0 15 341 381 (185) (153) 156 228 50 . 50 (50) (50) (9) (17) (58) (12) 89 . ____199 OWENS-CORNING FIBERGX-AS CORPORATION ASSUMPTIONS SUPPORTING 1993 - 1996 FINANCIAL PROJECTIONS Projection Methodology: The estimate for 1993 is based upon the nose current "bottom-up" forecast from the operating units. The estimates for 1994 and beyond are based upon long-term business expectations provided by the operating units which were then compiled using a traditional spreadsheet model. asaatfr..in saHs; The sales volumes shown are reflective of assumptions as to both volume and price growth, unit volume for the core businesses (without acquisitions) is assumed to grow each year at percentages ranging from a low of 3.0% to a high of 4.3%. Pricing, which has generally improved in recent months, is expected to improve modestly, but at less than expected inflation rates. The assumed price increase rates range from 1.1% to a high of 1.6% in 1995. European Revitalization: The recently-announced European revitalization plan has been reflected within the numbers in that (a) the 1993 restructuring charge in included within the 1993 estimate? (b) product cost improvements for* years 1994 through 1996 have been reflected in such years with the annual benefit reaching a total of approximately $38 million in 1996? and (c) the increased investment required has been included within projected capital expenditures. Acsruisitions: The Company's announced growth agenda which includes the goal of reaching sales of $5 billion by 2000 will doubtlessly necessitate incremental acquisition or investment expenditures. However, the Company is not presently pursuing any such transactions other than the possible acquisition of additional insulation capacity in Europe? such acquisition, if consummated, would involve a purchase price of less than $30 million. Nevertheless, given the growth agenda, it seems appropriate that some transactions, although of unknown character, be reflected in the projections. We have done so to the extent of transactions in the magnitude of $30 million in 1993, and $50 million in each of years 1994 through 1996. Financing; The company still intends to finance growth-oriented transactions with the issuance of equity. However, the failure of the recent common stock offering suggests that pre-funding of such c nnnifi transactions may be difficult to achieve. The disappointment of the common stock issue say increase the probability of such new equity being in the fora of convertible preferred stock. Accordingly, for purposes of these projections, it is assumed that the acquisitions enumerated above are separately financed with issues of convertible preferred stock. The related dividends are shown on the Cash flow Statement. The debt structure as shown on the Balance Sheet reflects the assumptions that the Company's convertible debt securities, convertible at a price of $29.73, are not converted during the time period. The interest expense calculation is based upon the Company's existing term debt portfolio and upon the assumption that floating debt interest rates increase slightly during the time period. WorkingCapitalAccounts: In general, the model assumes that the relationships between sales levels and the various working capital accounts remain constant. AsbestosLitigation: The projected after-tax cash outflows for asbestos litigation is shewn on the Cash Flow Statement. Periodically, during this time frame, the payment of such amounts by the Company will create the right to receive future reimbursement from an insurer; such amounts, when applicable, have been reflected as increases in Other Assets. CONFIDENTIAL November 15,1993 To: Senior Lenders under the Owens-Coming Fibergias Corporation Credit Agreement, dated as of November 2, 1993 Gentlemen: Pursuant to Section 5.01 "Information to be Famished* under the terms of the Credit Agreement dated as of November 2,1993, between Owens-Coming Fibergtas Corporation and you, we are enclosing for the quarter ending September 30,1993: 1. Consolidated Balance Sheet 2. Consolidated Statement of Income 3. Consolidated Statement of Cash Flows 4. Certificate as*to Financial Statements 5. Certificate as to Compliance with Financial Covenants 6. Quarterly Report for Third Quarter Sincerely, Thomas J. Lagos Senior Financial Specialist Corporate Treasury Department TJL/dfp Enclosures c nnmo OWENS-CCRNING FtBERGLAS CORPORATION CERTIFICATE AS TO FINANCIAL'STATEMENTS I, David W. Devonshire, of Owens-Coming Fibergfas Corporation, a Delaware corporation (the "Borrowed), hereby certify, pursuant to Section 5.01(a) of the Credit Agreement dated as of November 2,1993 (the "Credit Agreement"), among the Borrower, the Banks listed on Annex A thereto and Credit Suisse, as Agent, that: 1. (i) The accompanying unaudited consolidated financial statements of the Borrower and the Consolidated Subsidiaries as at September 30,1993 ami for the quarterly period ending September 30,1993, are complete and correct and present fairly, in accordance with Generally Accepted Accounting Principles, (except for changes (described below) that have been approved in writing by Arthur Andersen & Co., the Borrower's current independent certified public accountants), the consolidated financial position of the Borrower and the Consolidated Subsidiaries as at the end of such quarterly period, and the consolidated results of operations and the changes in the financial position for such quarterly period, in each case on the basis presented and subject only to normal year-end auditing adjustments. s oooia CONFIDENTIAL {> Except as disclosed or reflected in such financial statements, as at September 30, 1993, neither the Borrower nor any Subsidiary had any liabilities, contingent or otherwise, and there were no ursreafoea or anticipated losses of the Borrower or any Subsidiary, that, singly or in the aggregate, have had or are reasonably likely to haw a Materially Adverse Effect on the Borrower and the Consolidated Subsidiaries taken as a whole. 2. The changes from Generally Accepted Accounting Principles are as follows: None An such changes have been approved in writing by ArthurAndersen & Co. Dated: November IS, 1993 CONFIDENTIAL s non9n CERTIFICATE AS TO COMPLIANCE WITH FINANCIAL COVENANTS, DEFAULTS David W. Devonshire, of Owens-Corning Fiberglas Corporation, a Delaware corporation (the "Borrower"), hereby certify, pursuant to Section 5.01(c) of the Credit Agreement, dated as of Novembers 1993 (the "Credit Agreement"), among the Borrower, the Banks listed on Annex A thereto and Credit Suisse, as Agent, that: 1. There follow the calculations required to establish whether or not the Borrower and the Consolidated Subsidiaries were in compliance with the following Sections of the Credit Agreement: (a) Section ^,17, Curreot Ratio, Numerator *$ 803.565,000 Denominator * $ 446,369.000 Actual 1.8 Minimum required 1.2 2. Based on an examination sufficient to enable me to make an informed statement, no Default exists, including, in particular, any such arising under the provisions of Article 4, except the following: None Dated: November 15.1993 Senior Vice President & Chief Financial Officer November 15. 1993 Owens GOHNtNO To: Credit Suisse Canada (As Agent) under the Owens-Coming Fiberglas Corporation Credit Agreement, dated as of August 16,1989 Gentlemen: Pursuant to Section 5.1 "information to be Fumished,` under the terms of the Credit Agreement dated as of August 16, 1989, between Owens-Coming Fiberglas Corporation and you. we are enclosing for the quarter ending September 30,1993: 1. ConsolidatedBalance Sheet 2. Consolidated Statement of Income 3. ConsolidatedStatement of Cash Flows 4. Certificate asto Financial Statements 5. Certificate as to Compliance with Financial Covenants 6. Quarterly Report for Third Quarter Sincerely, Thomas J. Lagos Senior financial Specialist Corporate Treasury Department TJLMp Enclosures <* nnn<>9 OWENS-CORNING FIBERGLAS CORPORATION CERTIFICATE AS TO FINANCIAL STATEMENTS I, David W. Devonshire, of Owens-Coming Ffbergfas Corporation, a Delaware corporation (the Guarantor), hereby certify, pursuant to paragraph 5.1(a) of the Guarantee Agreement dated as of August 16,1989 between the Guarantor and Credit Suisse Canada, as agent, as amended from time to time up to the date hereof (the "Guarantee Agreement"), that: 1. (i) The accompanying unaudited Consolidated financial statements of the Guarantor and the Consolidated Subsidiaries as at September 30.1992 and for the quarterly period ending September 30,1993, are complete and correct and present fairly, in accordance with Generally Accepted Accounting Principles, the consolidated financial position-of the Guarantor and Consolidated Subsidiaries as at the end of such quarterly period, and the consolidated results of operations and tee cash flows for such quarterly period, in each case on the basis presented and subject only to normal year-end auditing adjustments. (ti) Except as disclosed or reflected in such financial statements, as at September 30.1993. neither the Guarantor nor any Subsidiary had any liabilities. Guarantor or any Subsidiary, that. Singly or in the aggregate, have had or are reasonably likely to have a Materially Adverse Effect crj the Guarantor and the Consolidated Subsidiaries taken as a whole. 2. AH capitalized terms used herein without definition have the respective meanings attributed thereto in the Guarantee Agreement Dated: November 15, 1993 W. Devonshire Senior Vice President & Chief Financial Officer <? nnn?jj CERTIFICATE AS TO COMPLIANCE WITH FINANCIAL COVENANTS, DEFAULTS i, David W. Devonshire, of Owens-Coming Fiberglas Corporation, a Delaware corporation {the ''Guarantor''), hereby certify, pursuant to paragraph 5.1(a) of the Guarantee Agreement dated as of August 16.1989 between the Guarantor and Credit Suisse Canada, as agent, as amended from time to time up to the date hereof (the "Guarantee Agreement*) that: 1. There follow the calculations required to establish whether or not the Guarantor was in compliance with the following provisions of the Guarantee Agreement: (a) ParagraghASte),.CurrsntBalia Numerator - $ 803,565,000 Denominator $ 446,369,000 Actual =1.8 Minimum required =1.2 (b) Paragraph 4,2(b), Wording Capital Actual S 357,196,000 Minimum required = $ 160.000,000 S 00025 2. Based on an examination sufficient to enable me to make an informed statement, no Default exists, including, in particular, any such arising under the provisions of Article 4. except the following: None 3. AH capitalized terms used herein without definition have the respective meanings attributed thereto in the Guarantee Agreement. Dated: November 15,1993 Senior Vice Presklent & Chief Financial Officer S 00026 OWCN$/COfti*C FlBERGlAS OWENS-CORNJNG FIBERCLAS CORPORATION -I0ERGLA$ TCwe*. TOLEDO OHiO 43653 {419) 24*4000 November 16, 199Q To: Holders of Owens-Corning Flberglas Extendable Notes due December 15. 2005 (CUS1P #690 734-AD-O): Effective December 15* 1990. Owens-Coming Rbergias wM reset the interest rale and establish a new reset date on its Extendable Notes due December IS, 2005. This letter is for informational purposes only; registered holders of the Notes win receive official notice from the trustee. Bankers Trust Co.T as to the reset information set forth below. The reset w& include the following terms and conditions: o The new interest raxe. effective December 15. 1990, wiR be a rate equal to 300 basis points above the yield on three*year Treasury Notes for November 30.1990, as reported In tiie "Composite 3:30 PM. Quotations for U.S. Government Securities" published by the Federal Reserve Sank of New York. As an example, applying this formula to yields reported for November I4tn would result in a new coupon interest rate of 10.63% (7.68% plus 3.00%). o The next reset date is specified to be December 15,1993. At that time, holders wHi again have the right to demand payment of the Notes by the Company at par. o The Notes wai be norrcaliabie by the Company untB December 15,1993. To assist you. we are enclosing copies of the Company's 1989 Annual Report, the 1989 Form 10-K and the Quarterly Report and Form 10-Q both tor the third quarter of 1990. In addition, the following comments may be helpful. 198S.Rggapftalgatig2o: In November of 1986, in response to a hostile takeover attempt, the Company completed a leveraged recapitalization which involved the payment of a large cash distribution to its. shareholders. As part of the recapitalization, the Corrpany implemented a major restructuring of its business for the purpose of maximizfrig cash flow to repay debt s nnnt>7 Capital Structure: The Company's capital structures, following the recapitalization on November 6,1986, and at September 30. 1990. were as follows (S millions): Bank Faeries Extendable Notes Other Senior Debt Senior Subordinated Deb. Junior Sub. Discount Deb. Total Debt ttoL&jaaa 31,222 100 374 300 505 S2f501 sgfiLausap S 312 100 504 240 244 SI .400 Shareholder's Equity siioasi 3(2121 The capital structure at September 30, 1990 reflects indebtedness relating to the Company'sSISS million acquisition of full ownership of its Canadian affiliate, Fiberglas Canada, Inc., during 1989. 8anK..CrgcHEatfM8.a; The Company has two unsecured, committed, bank credit facilities. The two facilities have present commitments totaling approximately 3771 miton of which approximately S459 miiOon was unused at September 30, i960. Interest rates under eaehlacSity are Boating rates; for example, at current utlizatron levels funds can be borrowed under the larger of the two facilities at a rate of UBOR plus 3/8 of 1%. Subordinated Pctifurchases; Shea 1986, the Company has made open-market purchases of Senior Subordinated and Junior Subordinated Discount Debentures. The cumulative amounts purchased, through September 30,1990, shown in face amount {$ millions), are as follows: Senior Subordinated Debentures S60 Junior Sub, Discount Debentures $721 QrttPfilfagft. The ratings for the Company's senior debt, including these Extendable Notes, are as follows: Standard & Poor's Duff & Phelps Moody's Investor Services BBBBBBSa2 The NASC has rated these Extendable Notes as *sr. s r>on?ft 3IID and Interest Expense: The Company's EBITD (earnings before interest, taxes and depreciation) and interest expense since 1987 have been as shown in the iollowina chan: Earnfncs Before intersst, -axes, sna Decree! ai t on >50,.......... sno $ nterest. Hxoense .................................. ....... .................. . h__it " is_m_ am me t&se tem __ mm am HteiiMm Ita, ( ixnn, V--. ww M * ** <MMMi M* MTM. IMinil >M1 in order to retain these Notes in your investment portfolio, it is not necessary for you to take any action. You will automatically receive the higher interest rate, effective December 15, 1990. In the event you decide not to retain any Extendable Notes, you may instruct the Company to repay the Notes pursuant to the procedure set forth in the Indenture, it may also be possible to sell the securities in existing securities markets. We look forward to having you as a continuing investor in Owens-Coming Rberglas. Should you have any questions that this information does not address, please call meat 419/248-8465 or Terry L. Priestap, Director of Corporate Finance, at 419/248-8113.. Michael I. MSJer Vice President & Treasurer S 00029 CONFIDENTIAL ( Owens-Coming Fiberglas Corporation Asbestos Litigation Status Case Receipts m 10 2Q U M 18 20 30 4 19 20 19 ( two i imi \ tnx > OCF Monthly Case Receipts NunMr or Ciui ReeelvM o 1961 1662 c CONFIDENTIAL Owens-Corning FIbergias Corporation Asbestos Litigation Status ClMl Case Settlement 2 5 00031 I CONFIDENTIAL Owens-Corning Fibergias Corporation Asbestos Litigation Status Average Settlement Cost per Case o m SJUg BUg Defense Costs (Other than <3 policy reimbursement) $ Millions 3 . r- o cv<\rv^ev CONF5DENT16L Owens-Coming Fibergias Corporation Asbestos Litigation Status o om Financial Statement Data {$ millions) Net Asbestos Expense (pre-tax) Balance Sheet Reserves Cash Flow Effect: Non-reimbursable payments to claimants Net Increase (decrease) In insurer receivables 4 1*92 YTD 0 950 6 24 30 S 00033 CONFIDENTIAL Owens-Coming Fiberglas Corporation Asbestos Litigation Status Case Receipts oo OCF Monthly Case Receipts NvmiMf of Cam Reetfrotf Average Monthly Case Receipts August 12,12 tM? i*a tM IMS int im YTB s CONFIDENTIAL Owens-Corning Fibergias Corporation Asbestos Litigation Status Average Settlement Cost per Case A* 8*89 90 91 92 YTD 92 ProL awa 8Mg Defense Costs (Other than G policy reimbursement) $ Million* 1990 1991 1992 YTD 3 o CONFIDENTIAL Owens-Corning Fibergias Corporation Asbestos Litigation Status Remaining insurance -n 12/31/90 12/31`91 6/30/92 Financial Statement Data (S millions) Net Asbestos Expense (pre-tax) Balance Sheet Reserves Cash Flow Effect: Non-reimbursable payments toclaimants Net increase (decrease) in insurer receivables August 12.12 4 1992 YTD 0 951.3 4.9 35.5 40.4 <; rmnas CONFIDENTIAL i Owens-Corning Fibergias Corporation Asbestos Litigation Status Case Recasts CONFIDENTIAL CONFIDENTIAL i Owens-Corning Fibergias Corporation Asbestos Litigation Status OCF MONTHLY CASE RECEIPTS Number of Cases Received CONFIDENTIAL CONFIDENTIAL 1991 J 1992 AVERAGE MDNTHLY CASE RECEIPTS Annual Totals: 490A TT9 CONFIDENTIAL Owens-Coming FJberglas Corporation Asbestos Litigation Status Average Sexx - ement ^a^e- r-- Defense Costs (Other than G policy reimbursement} twiner* 4CU9* 1*90 IS** 1992 rro CONFIDENTIAL s Owens-Co/ning FibergJas Corporation Asbestos Litigation Status Sernainrng 1nsurance nrdential ($ millions) Net Asbestos Expense (pre-tax) Balance Sheet Reserves Cash Bow Effect nonreimbursable payments to claimants Net Increase (decrease) In insurer receivables 4 1992 Q1 0 955.9 JS 25.3 253 CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Owens-Corning Fibergias Corporation Asbestos Litigation Status Case Settlement 2 s onnit