Owens Corning

Good day and welcome to the Owens Corning fourth quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Amber Woolforth. Please go ahead.

Thank you and good morning, everyone. Thank you for taking the time to join us for today's conference call and review of our business results for the fourth quarter and full year 2021. Joining us today are Brian Chambers, Owens Corning's chair and chief executive officer, and Ken Parks, our chief financial officer. Following our presentation this morning, we will open this one-hour call to your questions. In order to accommodate as many call participants as possible, please limit yourselves to one question only. Earlier this morning, we issued a news release and filed a 10-K that detailed our financial results for the fourth quarter and full year 2021. For the purposes of our discussion today, we have prepared presentation slides that summarize our performance and results, and we'll refer to these slides during this call. You can access the earnings press release, Form 10-K, and the presentation slides at our website, owenscoring.com. refer to the Investors link on our homepage. A transcript and recording of this call and the supporting slides will be available on our website for future reference. Please reference slide two before we begin, where we offer a couple of reminders. First, today's remarks will include forward-looking statements based on our current forecasts and estimates of future events. These statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially. We undertake no obligation to update these statements beyond what is required under applicable securities laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for a more detailed explanation of the inherent risks and uncertainties affecting such forward-looking statements. Second, the presentation slides and today's remarks contain non-GAAP financial measures. Explanations and reconciliations of non-gap-to-gap measures may be found in the text and financial tables of our earnings press release and presentation, both of which are available on owenscorning.com. Adjusted EBIT is our primary measure of period-over-period comparisons, and we believe it is a meaningful measure for investors to compare our results. Consistent with our historical practice, we have excluded certain items that we believe are not representative of our ongoing operations when calculating adjusted EBIT, adjusted EBITDA, and adjusted earnings. We adjust our effective tax rate to remove the effect of quarter-to-quarter fluctuations, which have the potential to be significant in arriving at adjusted earnings and adjusted earnings per share. We also use free cash flow and free cash flow conversion of adjusted earnings as measures helpful to investors to evaluate the company's ability to generate cash and utilize that cash to pursue opportunities that enhance shareholder value. The tables in today's news release in the Form 10-K include more detailed financial information. For those of you following along with our slide presentation, we will begin on slide four. And now, opening remarks from our chair and CEO, Brian Chambers. Brian?

Thanks, Amber. Good morning, everyone, and thank you for joining us for today's call. I hope all of you are continuing to stay healthy and safe. During the call this morning, I will start with a broad overview of our performance and how we are investing in key areas to grow our company and deliver additional value to our shareholders. Ken will provide additional details on our fourth quarter and full-year financial results, and then I'll come back to talk about our outlook for the first quarter and business trends. 2021 was a year of tremendous accomplishment and record results for Owens Corning. Like most companies around the world, we faced several challenges throughout the year. The continuing pandemic, supply chain disruptions, significant inflation, and other regional events, all requiring creativity and adaptability for our company to succeed. Through it all, our global teams continued to elevate their performance, overcoming these challenges that impacted our businesses and markets, to consistently deliver on our financial targets, generate growth in our key products and geographies, and outperform the markets we serve. A critical component to our success is our commitment to safety, where we continue to deliver world-class performance. During the fourth quarter, we achieved a recordable incident rate of 0.53. This lowered our full year 2021 RIR to 0.59, which is an 8% improvement over the prior year. Over the past two years, COVID has added another dimension to our unconditional commitment to safety. I greatly appreciate the focus and dedication of our teams to improving our safety performance despite the pandemic-related disruptions and extremely high production at virtually all of our manufacturing sites. While COVID case rates remain higher than any of us would like, we are encouraged by recent decreases in the severity and number of cases. and will continue to operate our facilities with a strong focus on keeping each other, our customers, and our suppliers healthy and safe. Our performance in the fourth quarter continued to demonstrate our market and financial strength as we closed out an outstanding year. Overall demand for our market-leading products remained strong as we finished the year, especially for our US residential products, which account for about half of our enterprise revenues, and our global commercial and construction materials. Against this backdrop, we outperformed the market, driven by a combination of strong commercial and operational execution across the company, with each business growing volumes, staying in front of inflation to deliver a positive price-cost mix, and overcoming supply disruptions to generate great manufacturing performance. For the full year, we delivered record financial performance, with revenues of $8.5 billion, a 20% increase over 2020, adjusted EBIT of 1.4 billion, up 61% from the prior year, and adjusted EBITDA of 1.9 billion. This resulted in an adjusted EBIT margin of 17% and adjusted EBITDA margin of 22% for the year. In addition, we generated free cash flow of 1.1 billion and returned a significant amount of cash to shareholders consistent with our long-term capital allocation strategy. Throughout the year, we demonstrated that our agility, strong execution, and commitment to each other and our customers can drive outstanding performance through a variety of market conditions. As we continue to focus on delivering near-term results, we're also investing to build Owens Corning for the future. During our investor day in November, we laid out a strategy which further accelerates our growth and strengthens the earnings power of the company by redefining where we play and dramatically expanding our current addressable markets. all in service of our mission to build a sustainable future through material innovation. Moving forward, we are investing in three key areas. First, to strengthen the company's position in core building and construction products as we continue to pivot our composites business into higher value building and construction materials and expand our insulation and roofing product solutions. Second, to provide more multi-material solutions which leverages our unique material science, strong brand, and common channels to market. And third, and more longer term, to develop prefabricated building envelope solutions for residential and commercial applications that are more energy efficient, more sustainable, and more cost effective than those built on site. This strategy creates a significant growth opportunities by utilizing our unique material science capabilities, manufacturing expertise, and leading market positions to expand into new product categories and develop new building and construction material solutions. Key to this strategy is leveraging our core innovation strengths and sustainability leadership, where we continue to make investments and progress. As material innovators, product and process development is key to how we drive growth, improve our operating performance, and create additional value for our customers. In 2021, we increased the number of new product launches by more than 30% creating material solutions that are more durable, more sustainable, and more energy efficient, including new roofing components, our redesigned FOMULAR NGX, our pink next-generation fiberglass insulation, and several new glass nonwoven materials used in a variety of building material applications. In 2022, we are planning to increase our R&D investments by 15% to further enhance our material science expertise and accelerate our new product innovations. Framing this work is our commitment to sustainability, which is core to who we are and how we operate. Currently, approximately 60% of our revenue comes from products that save energy or reduce emissions. Our product solutions play a major role in energy efficiency projects, housing construction and renovation, and supporting renewable energy growth. Through our work, we continue 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 for the 12th consecutive year. In March, we will publish our 16th Annual Sustainability Report, providing insights into our long-term goals and approach, the progress we've made today, and our work ahead. The 2021 report covers our efforts to double our product's handprint and halve our environmental footprint, while at the same time working to eliminate injuries and lifestyle-induced diseases advance inclusion and diversity, and collaborate to make a positive difference in the communities where we work and live. Sharing our results and aspirations is an important part of our commitment to all our stakeholders, and we are grateful for many people who have inspired our work and pushed us to continually do more. With that view of our performance and priorities, I will now turn it over to Ken to discuss our financial results in more detail. Ken?