oc-20230930

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-33100

Owens Corning

(Exact name of registrant as specified in its charter)

Delaware

43-2109021

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

One Owens Corning Parkway,

Toledo,

43659

(Address of principal executive offices)

(Zip Code)

(419) 248-8000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	OC	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large Accelerated Filer	þ	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No þ

As of October 20, 2023, 88,874,956 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

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			Contents

Cover Page			1

PART I – FINANCIAL INFORMATION (unaudited)

	Item 1.	Financial Statements
		Consolidated Statements of Earnings	4
		Consolidated Statements of Comprehensive Earnings	5
		Consolidated Balance Sheets	6
		Consolidated Statements of Stockholders’ Equity	7
		Consolidated Statements of Cash Flows	9
		Notes to Consolidated Financial Statements
		1. General	10
		2. Segment Information	12

		3. Inventories	14
		4. Derivative Financial Instruments	15
		5. Goodwill and Other Intangible Assets	17
		6. Property, Plant and Equipment	19

		7. Acquisitions	20

		8. Divestitures	21
		9. Warranties	21
		10. Restructuring, Acquisition and Divestiture-Related Costs	22
		11. Debt	24
		12. Pension Plans and Other Postretirement Benefits	27
		13. Contingent Liabilities and Other Matters	29
		14. Stock Compensation	31
		15. Earnings per Share	34
		16. Income Taxes	35
		17. Changes in Accumulated Other Comprehensive Deficit	36


	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50

	Item 4.	Controls and Procedures	50

PART II – OTHER INFORMATION

	Item 1.	Legal Proceedings	51

	Item 1A.	Risk Factors	51

	Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	51

	Item 3.	Defaults Upon Senior Securities	51

	Item 4.	Mine Safety Disclosures	51

	Item 5.	Other Information	51

	Item 6.	Exhibits	52

		Signatures	53

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PART I

ITEM 1. FINANCIAL STATEMENTS

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)

(in millions, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,

	2023		2022		2023		2022
NET SALES	$	2,479	$	2,529	$	7,373	$	7,476
COST OF SALES	1,752		1,836		5,305		5,430
Gross margin	727		693		2,068		2,046
OPERATING EXPENSES
Marketing and administrative expenses	201		201		612		586
Science and technology expenses	29		26		85		73


Gain on equity method investment	—		(130)		—		(130)
Gain on sale of site	—		—		(189)		—
Other expense (income), net	35		(12)		77		(18)
Total operating expenses	265		85		585		511
OPERATING INCOME	462		608		1,483		1,535
Non-operating income	(1)		(2)		(1)		(6)
EARNINGS BEFORE INTEREST AND TAXES	463		610		1,484		1,541
Interest expense, net	17		28		62		82

EARNINGS BEFORE TAXES	446		582		1,422		1,459
Income tax expense	110		114		361		340
Equity in net earnings of affiliates	1		1		2		—
NET EARNINGS	337		469		1,063		1,119
Net (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests	—		(1)		(2)		2

NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	337	$	470	$	1,065	$	1,117
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
Basic	$	3.74	$	4.88	$	11.75	$	11.42
Diluted	$	3.71	$	4.84	$	11.64	$	11.32

WEIGHTED AVERAGE COMMON SHARES
Basic	90.0		96.3		90.6		97.8
Diluted	90.9		97.1		91.5		98.7

The accompanying Notes to the Consolidated Financial Statements are an integral part of these Statements.

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited)

(in millions)


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
NET EARNINGS		$	337	$	469	$	1,063	$	1,119
Other comprehensive (loss) income, net of tax:
	Currency translation adjustment (net of tax of $(2) and $0 for the three months ended September 30, 2023 and 2022, respectively, and $(2) and $(1) for the nine months ended September 30, 2023 and 2022, respectively)	(73)		(161)		(33)		(243)
	Pension and other postretirement adjustment (net of tax of $0 and $0 for the three months ended September 30, 2023 and 2022, respectively, and $0 and $(1) for the nine months ended September 30, 2023 and 2022, respectively)	2		6		(1)		15
	Hedging adjustment (net of tax of $(2) and $(2) for the three months ended September 30, 2023 and 2022, respectively, and $(4) and $(9) for the nine months ended September 30, 2023 and 2022, respectively)	5		6		11		29
	Total other comprehensive loss, net of tax	(66)		(149)		(23)		(199)
COMPREHENSIVE EARNINGS		271		320		1,040		920
Comprehensive loss attributable to non-redeemable and redeemable noncontrolling interests		(1)		(2)		(4)		(2)

COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING		$	272	$	322	$	1,044	$	922

The accompanying Notes to the Consolidated Financial Statements are an integral part of these Statements.

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except per share amounts)


ASSETS	September 30, 2023		December 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$	1,323	$	1,099
Receivables, less allowance of $12 at September 30, 2023 and $11 at December 31, 2022	1,300		961
Inventories	1,232		1,334
Assets held for sale	—		45
Other current assets	94		117
Total current assets	3,949		3,556
Property, plant and equipment, net	3,688		3,729
Operating lease right-of-use assets	216		204
Goodwill	1,378		1,383
Intangible assets	1,526		1,602
Deferred income taxes	19		16
Other non-current assets	293		262
TOTAL ASSETS	$	11,069	$	10,752
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,161	$	1,345
Current operating lease liabilities	60		52
Other current liabilities	605		707
Total current liabilities	1,826		2,104
Long-term debt, net of current portion	3,002		2,992
Pension plan liability	73		78
Other employee benefits liability	116		118
Non-current operating lease liabilities	156		152
Deferred income taxes	430		388
Other liabilities	316		299
Total liabilities	5,919		6,131
Redeemable noncontrolling interest	25		25
OWENS CORNING STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.01 per share (a)	—		—
Common stock, par value $0.01 per share (b)	1		1
Additional paid in capital	4,152		4,139
Accumulated earnings	4,718		3,794
Accumulated other comprehensive deficit	(703)		(681)
Cost of common stock in treasury (c)	(3,063)		(2,678)
Total Owens Corning stockholders’ equity	5,105		4,575
Noncontrolling interests	20		21
Total equity	5,125		4,596
TOTAL LIABILITIES AND EQUITY	$	11,069	$	10,752

(a)10 shares authorized; none issued or outstanding at September 30, 2023 and December 31, 2022

(b)400 shares authorized; 135.5 issued and 88.9 outstanding at September 30, 2023; 135.5 issued and 91.9 outstanding at December 31, 2022

The accompanying Notes to the Consolidated Financial Statements are an integral part of these Statements.

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in millions)


	Common Stock Outstanding			Treasury Stock			APIC (a)		Accumulated Earnings		AOCI (b)		NCI (c)		Total
	Shares	Par Value		Shares	Cost
Balance at December 31, 2022	91.9	$	1	43.6	$	(2,678)	$	4,139	$	3,794	$	(681)	$	21	$	4,596
Net earnings attributable to Owens Corning	—	—		—	—		—		383		—		—		383
Net earnings attributable to non-redeemable noncontrolling interests	—	—		—	—		—		—		—		—		—
Redeemable noncontrolling interest adjustment to redemption value	—	—		—	—		(1)		—		—		—		(1)
Currency translation adjustment	—	—		—	—		—		—		31		—		31
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		(1)		—		(1)
Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		(1)		—		(1)

Issuance of common stock under share-based payment plans	0.7	—		(0.7)	23		(22)		—		—		—		1
Purchases of treasury stock	(1.8)	—		1.8	(161)		—		—		—		—		(161)
Stock-based compensation expense	—	—		—	—		13		—		—		—		13

Dividends declared (d)	—	—		—	—		—		(48)		—		—		(48)
Balance at March 31, 2023	90.8	$	1	44.7	$	(2,816)	$	4,129	$	4,129	$	(652)	$	21	$	4,812
Net earnings attributable to Owens Corning	—	—		—	—		—		345		—		—		345
Net earnings attributable to non-redeemable noncontrolling interests	—	—		—	—		—		—		—		—		—
Redeemable noncontrolling interest adjustment to redemption value	—	—		—	—		—		—		—		—		—
Currency translation adjustment	—	—		—	—		—		—		10		(1)		9
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		(2)		—		(2)
Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		7		—		7

Issuance of common stock under share-based payment plans	0.1	—		(0.1)	12		—		—		—		—		12
Purchases of treasury stock	(1.1)	—		1.1	(116)		—		—		—		—		(116)
Stock-based compensation expense	—	—		—	—		14		—		—		—		14

Dividends declared (d)	—	—		—	—		—		(47)		—		—		(47)
Balance at June 30, 2023	89.8	$	1	45.7	$	(2,920)	$	4,143	$	4,427	$	(637)	$	20	$	5,034
Net earnings attributable to Owens Corning	—	—		—	—		—		337		—		—		337
Net earnings attributable to non-redeemable noncontrolling interests	—	—		—	—		—		—		—		—		—
Redeemable noncontrolling interest adjustment to redemption value	—	—		—	—		—		—		—		—		—
Currency translation adjustment	—	—		—	—		—		—		(73)		—		(73)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		2		—		2
Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		5		—		5

Issuance of common stock under share-based payment plans	0.1	—		(0.1)	2		(2)		—		—		—		—
Purchases of treasury stock	(1.0)	—		1.0	(145)		—		—		—		—		(145)
Stock-based compensation expense	—	—		—	—		11		—		—		—		11

Dividends declared (d)	—	—		—	—		—		(46)		—		—		(46)
Balance at September 30, 2023	88.9	$	1	46.6	$	(3,063)	$	4,152	$	4,718	$	(703)	$	20	$	5,125

(a)Additional Paid in Capital (“APIC”)

(b)Accumulated Other Comprehensive Earnings (Deficit) (“AOCI”)

(c)Noncontrolling Interests (“NCI”)

(d)Quarterly dividend declaration of $0.52 per share as of September 30, 2023, June 30, 2023 and March 31, 2023

The accompanying Notes to the Consolidated Financial Statements are an integral part of these Statements.

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in millions)


	Common Stock Outstanding			Treasury Stock			APIC (a)		Accumulated Earnings		AOCI (b)		NCI (c)		Total
	Shares	Par Value		Shares	Cost
Balance at December 31, 2021	100.4	$	1	35.1	$	(1,922)	$	4,092	$	2,706	$	(581)	$	39	$	4,335
Net earnings attributable to Owens Corning	—	—		—	—		—		304		—		—		304
Net earnings attributable to noncontrolling interests	—	—		—	—		—		—		—		3		3
Currency translation adjustment	—	—		—	—		—		—		(27)		(1)		(28)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		3		—		3
Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		24		—		24
Purchases of noncontrolling interest	—	—		—	—		8		—		—		(17)		(9)
Issuance of common stock under share-based payment plans	0.4	—		(0.4)	21		(21)		—		—		—		—
Purchases of treasury stock	(2.7)	—		2.7	(243)		—		—		—		—		(243)
Stock-based compensation expense	—	—		—	—		12		—		—		—		12

Dividends declared (d)	—	—		—	—		—		(36)		—		—		(36)
Balance at March 31, 2022	98.1	$	1	37.4	$	(2,144)	$	4,091	$	2,974	$	(581)	$	24	$	4,365
Net earnings attributable to Owens Corning	—	—		—	—		—		343		—		—		343
Net loss attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Currency translation adjustment	—	—		—	—		—		—		(52)		(2)		(54)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		6		—		6
Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		(1)		—		(1)

Issuance of common stock under share-based payment plans	0.1	—		(0.1)	9		3		—		—		—		12
Purchases of treasury stock	(1.0)	—		1.0	(87)		—		—		—		—		(87)
Stock-based compensation expense	—	—		—	—		13		—		—		—		13

Dividends declared (d)	—	—		—	—		—		(35)		—		—		(35)
Balance at June 30, 2022	97.2	$	1	38.3	$	(2,222)	$	4,107	$	3,282	$	(628)	$	22	$	4,562
Net earnings attributable to Owens Corning	—	—		—	—		—		470		—		—		470
Net loss attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Redeemable noncontrolling interest adjustment to redemption value	—	—		—	—		(1)		—		—		—		(1)
Currency translation adjustment	—	—		—	—		—		—		(160)		(1)		(161)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		6		—		6
Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		6		—		6

Issuance of common stock under share-based payment plans	—	—		—	—		5		—		—		—		5
Purchases of treasury stock	(2.5)	—		2.5	(206)		—		—		—		—		(206)
Stock-based compensation expense	—	—		—	—		13		—		—		—		13

Dividends declared (d)	—	—		—	—		—		(33)		—		—		(33)
Balance at September 30, 2022	94.7	1.0		40.8	(2,428)		4,124		3,719		(776)		21		4,661

(a)Additional Paid in Capital (“APIC”)

(b)Accumulated Other Comprehensive Earnings (Deficit) (“AOCI”)

(c)Noncontrolling Interests (“NCI”)

(d)Quarterly dividend declaration of $0.35 per share as September 30, 2022, June 30, 2022 and March 31, 2022

The accompanying Notes to the Consolidated Financial Statements are an integral part of these Statements.

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in millions)


	Nine Months Ended September 30,
	2023		2022
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
Net earnings	$	1,063	$	1,119
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	446		400


Deferred income taxes	40		48
Provision for pension and other employee benefits liabilities	3		2
Stock-based compensation expense	38		38


Gains on sale of certain precious metals	(2)		(18)

Gain on equity method investment	—		(130)
Gain on sale of site	(189)		—
Other adjustments to reconcile net earnings to cash provided by operating activities	20		(1)
Changes in operating assets and liabilities	(384)		(333)
Pension fund contribution	(4)		(5)
Payments for other employee benefits liabilities	(8)		(5)
Other	(2)		(30)
Net cash flow provided by operating activities	1,021		1,085
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Cash paid for property, plant, and equipment	(390)		(306)

Proceeds from the sale of assets or affiliates	189		103
Investment in subsidiaries and affiliates, net of cash acquired	(6)		(417)

Derivative settlements	—		52


Other	(12)		(5)
Net cash flow used for investing activities	(219)		(573)
NET CASH FLOW USED FOR FINANCING ACTIVITIES






Purchases of noncontrolling interest	—		(9)
Net decrease in short-term debt	(1)		(5)
Dividends paid	(142)		(103)
Purchases of treasury stock	(419)		(536)
Finance lease payments	(24)		(23)
Other	1		1
Net cash flow used for financing activities	(585)		(675)
Effect of exchange rate changes on cash	8		(45)
Net increase (decrease) in cash, cash equivalents and restricted cash	225		(208)
Cash, cash equivalents and restricted cash at beginning of period	1,107		966
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	1,332	$	758

The accompanying Notes to the Consolidated Financial Statements are an integral part of these Statements.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. GENERAL

Unless the context requires otherwise, the terms “Owens Corning,” “Company,” “we” and “our” in this report refer to Owens Corning, a Delaware corporation, and its subsidiaries.

The Consolidated Financial Statements included in this report are unaudited, pursuant to certain rules and regulations of the Securities and Exchange Commission, and include, in the opinion of the Company, normal recurring adjustments necessary for a fair statement of the results for the periods indicated, which, however, are not necessarily indicative of results which may be expected for the full year. The December 31, 2022 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (“U.S.”). In connection with the Consolidated Financial Statements and Notes included in this report, reference is made to the Consolidated Financial Statements and Notes contained in the Company’s annual report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). Certain reclassifications have been made to the periods presented for 2022 to conform to the classifications used in the periods presented for 2023.

Revenue Recognition

As of December 31, 2022, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled $89 million, of which $17 million was recognized as revenue in the first nine months of 2023. As of September 30, 2023, our contract liability balances totaled $96 million.

As of December 31, 2021, our contract liability balances totaled $76 million, of which $16 million was recognized as revenue in the first nine months of 2022. As of September 30, 2022, our contract liability balances totaled $86 million.

Cash, Cash Equivalents and Restricted Cash

On the Consolidated Statements of Cash Flows, the total of Cash, cash equivalents and restricted cash includes restricted cash of $9 million as of September 30, 2023, $8 million as of December 31, 2022, and $7 million as of September 30, 2022 and December 31, 2021. Restricted cash primarily represents amounts received from a counterparty related to its performance assurance on an executory contract, which is included in Other current assets on the Consolidated Balance Sheets. These amounts are contractually required to be set aside, and the counterparty can exchange the cash for another form of performance assurance at its discretion.

Related Party Transactions

In the first quarter of 2021, a related party relationship was established as a result of a member of the Company’s Board of Directors being named an executive officer of one of the Company’s preexisting suppliers. The related party transactions with this supplier consist of the purchase of raw materials. Purchases from the related party supplier were $22 million and $72 million for the three and nine months ended September 30, 2023, respectively, and $42 million and $102 million for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022, amounts due to the related party supplier were $5 million and $3 million, respectively.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

1. GENERAL (continued)

Supplier Finance Programs

We review supplier terms and conditions on an ongoing basis, and have negotiated payment terms extensions in recent years in connection with our efforts to reduce working capital and improve cash flow. Separate from those terms extension actions, certain of our subsidiaries have entered into paying agency agreements with third-party administrators. These voluntary supply chain finance programs (collectively, the “Programs”) generally give participating suppliers the ability to sell, or otherwise pledge as collateral, their receivables from the Company to the participating financial institutions, at the sole discretion of both the suppliers and financial institutions. The Company is not a party to the arrangements between the suppliers and the financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to sell, or otherwise pledge as collateral, amounts under these arrangements. The Company’s payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. One of the Programs includes a parent guarantee to the participating financial institution for a certain U.S. subsidiary that, at the time of the respective program’s inception in 2015, was a guarantor subsidiary of the Company’s Credit Agreement. The obligations are presented as Accounts payable within Total current liabilities on the Consolidated Balance Sheets and all activity related to the obligations is presented within operating activities on the Consolidated Statements of Cash Flow.

The Company’s confirmed outstanding obligations under the Programs totaled $205 million and $234 million as of September 30, 2023 and December 31, 2022, respectively. The amounts of invoices paid under the Programs totaled $454 million and $481 million for the nine months ended September 30, 2023 and September 30, 2022, respectively.

Accounting Pronouncements

The following table summarizes recent Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”) that had an impact or could have an impact on the Company’s Consolidated Financial Statements:



Standard	Description	Effective Date for Company	Effect on the Consolidated Financial Statements



Recently issued standards:
ASU 2023-05 "Business Combinations - Joint Venture Formations (Subtopic 805-60)"	This standard modifies the accounting for contributions made to a joint venture, upon formation, in a joint venture's separate financial statements.	January 1, 2025	We do not believe the adoption of this guidance will have a material effect on our consolidated financial statements.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION

The Company has three reportable segments: Composites, Insulation and Roofing. Accounting policies for the segments are the same as those for the Company. The Company’s three reportable segments are defined as follows:

Composites – Within our Composites segment, the Company manufactures, fabricates and sells glass reinforcements in the form of fiber. Glass reinforcement materials are also used by the Composites segment to manufacture and sell high value applications in the form of fabrics, non-wovens and other specialized products.

Insulation – Within our Insulation segment, the Company manufactures and sells thermal and acoustical batts, loosefill insulation, spray foam insulation, foam sheathing and accessories. It also manufactures and sells glass fiber pipe insulation, energy efficient flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation, and foam insulation used in above- and below-grade construction applications.

Roofing – Within our Roofing segment, the Company manufactures and sells residential roofing shingles, oxidized asphalt materials, and roofing components used in residential and commercial construction and specialty applications.

NET SALES

The following tables show a disaggregation of our Net sales by segment and geographic region (in millions). Corporate eliminations (shown below) largely reflect intercompany sales from Composites to Roofing. External customer sales are attributed to geographic region based upon the location from which the product is sold to the external customer.


	For the three months ended September 30, 2023
Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	98	$	351	$	1,009	$	(82)	$	1,376
U.S. commercial and industrial	201		218		49		(2)		466
Total United States	299		569		1,058		(84)		1,842
Europe	115		191		5		(1)		310
Asia-Pacific	111		37		—		—		148
Rest of world	42		116		21		—		179
NET SALES	$	567	$	913	$	1,084	$	(85)	$	2,479


	For the three months ended September 30, 2022
Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	96	$	400	$	912	$	(75)	$	1,333
U.S. commercial and industrial	222		204		54		—		480
Total United States	318		604		966		(75)		1,813
Europe	141		201		5		(2)		345
Asia-Pacific	126		42		1		—		169
Rest of world	53		118		31		—		202
NET SALES	$	638	$	965	$	1,003	$	(77)	$	2,529

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION (continued)



	For the nine months ended September 30, 2023
Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	270	$	1,045	$	2,902	$	(230)	$	3,987
U.S. commercial and industrial	656		647		113		(6)		1,410
Total United States	926		1,692		3,015		(236)		5,397
Europe	387		586		13		(2)		984
Asia-Pacific	334		109		1		—		444
Rest of world	125		350		73		—		548
NET SALES	$	1,772	$	2,737	$	3,102	$	(238)	$	7,373



	For the nine months ended September 30, 2022
Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	277	$	1,125	$	2,620	$	(204)	$	3,818
U.S. commercial and industrial	657		585		125		(3)		1,364
Total United States	934		1,710		2,745		(207)		5,182
Europe	543		611		16		(5)		1,165
Asia-Pacific	422		118		5		—		545
Rest of world	172		319		93		—		584
NET SALES	$	2,071	$	2,758	$	2,859	$	(212)	$	7,476

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION (continued)

EARNINGS BEFORE INTEREST AND TAXES

Earnings before interest and taxes (“EBIT”) by segment consist of net sales less related costs and expenses, and are presented on a basis that is used internally for evaluating segment performance. Certain items, such as general corporate expenses or income and certain other expense or income items, are excluded from the internal evaluation of segment performance. Accordingly, these items are not reflected in EBIT for our reportable segments and are included within Corporate, Other and Eliminations.

The following table summarizes EBIT by segment (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Reportable Segments
Composites	$	80	$	126	$	216	$	434
Insulation	150		173		469