oc-20240630

Table of Contents

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 June 30, 2024

☐ 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, OH 43659

(Address of principal executive offices)

(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. ¨

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 August 1, 2024, 86,948,360 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

Table of Contents


			Contents

Cover Page			1

PART I – FINANCIAL INFORMATION (unaudited)

	Item 1.	Financial Statements
		Consolidated Statements of Earnings	3
		Consolidated Statements of Comprehensive Earnings	4
		Consolidated Balance Sheets	5
		Consolidated Statements of Stockholders’ Equity	6
		Consolidated Statements of Cash Flows	8
		Notes to Consolidated Financial Statements
		1. General	9
		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	24
		9. Warranties	24
		10. Restructuring, Acquisition and Divestiture-Related Costs	25
		11. Debt	29
		12. Pension Plans and Other Postretirement Benefits	33
		13. Contingent Liabilities and Other Matters	35
		14. Stock Compensation	37
		15. Earnings per Share	40
		16. Income Taxes	41
		17. Changes in Accumulated Other Comprehensive Deficit	42


	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	58

	Item 4.	Controls and Procedures	58

PART II – OTHER INFORMATION

	Item 1.	Legal Proceedings	59

	Item 1A.	Risk Factors	59

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59

	Item 3.	Defaults Upon Senior Securities	59

	Item 4.	Mine Safety Disclosures	59

	Item 5.	Other Information	60

	Item 6.	Exhibits	61

		Signatures	62

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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 June 30,				Six Months Ended June 30,

	2024		2023		2024		2023
NET SALES	$	2,789	$	2,563	$	5,089	$	4,894
COST OF SALES	1,922		1,811		3,542		3,553
Gross margin	867		752		1,547		1,341
OPERATING EXPENSES
Marketing and administrative expenses	249		207		461		411
Science and technology expenses	34		28		65		56



Gain on sale of site	—		—		—		(189)
Other expense, net	127		30		161		42
Total operating expenses	410		265		687		320
OPERATING INCOME	457		487		860		1,021
Non-operating income	(1)		—		(1)		—
EARNINGS BEFORE INTEREST AND TAXES	458		487		861		1,021
Interest expense, net	64		23		81		45

EARNINGS BEFORE TAXES	394		464		780		976
Income tax expense	110		121		198		251
Equity in net earnings of affiliates	2		1		2		1
NET EARNINGS	286		344		584		726
Net earnings (loss) attributable to non-redeemable and redeemable noncontrolling interests	1		(1)		—		(2)

NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	285	$	345	$	584	$	728
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
Basic	$	3.27	$	3.81	$	6.69	$	8.01
Diluted	$	3.24	$	3.78	$	6.63	$	7.94

WEIGHTED AVERAGE COMMON SHARES
Basic	87.2		90.5		87.3		90.9
Diluted	88.0		91.3		88.1		91.7

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 June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
NET EARNINGS		$	286	$	344	$	584	$	726
Other comprehensive (loss) income, net of tax:
	Currency translation adjustment (net of tax of $0 and $0 for the three months ended June 30, 2024 and 2023, respectively, and $0 and $0 for the six months ended June 30, 2024 and 2023, respectively)	(63)		9		(105)		40
	Pension and other postretirement adjustment (net of tax of $0 and $0 for the three months ended June 30, 2024 and 2023, respectively, and $0 and $0 for the six months ended June 30, 2024 and 2023, respectively)	(1)		(2)		(1)		(3)
	Hedging adjustment (net of tax of $(1) and $(2) for the three months ended June 30, 2024 and 2023, respectively, and $(3) and $(2) for the six months ended June 30, 2024 and 2023, respectively)	5		7		10		6
	Total other comprehensive (loss) income, net of tax	(59)		14		(96)		43
COMPREHENSIVE EARNINGS		227		358		488		769
Comprehensive loss attributable to non-redeemable and redeemable noncontrolling interests		—		(2)		(2)		(3)

COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING		$	227	$	360	$	490	$	772

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	June 30, 2024		December 31, 2023
CURRENT ASSETS
Cash and cash equivalents	$	254	$	1,615
Receivables, less allowance of $4 at June 30, 2024 and $11 at December 31, 2023	1,680		987
Inventories	1,576		1,198

Other current assets	209		117
Total current assets	3,719		3,917
Property, plant and equipment, net	4,640		3,841
Operating lease right-of-use assets	456		222
Goodwill	2,683		1,392
Intangible assets, net	3,006		1,528
Deferred income taxes	39		24
Other non-current assets	448		313
TOTAL ASSETS	$	14,991	$	11,237
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,403	$	1,216
Current operating lease liabilities	87		62
Short-term debt	155		1
Long-term debt - current portion	435		431
Other current liabilities	642		614
Total current liabilities	2,722		2,324
Long-term debt, net of current portion	5,020		2,615
Pension plan liability	66		69
Other employee benefits liability	110		112
Non-current operating lease liabilities	386		165
Deferred income taxes	811		427
Other liabilities	351		315
Total liabilities	9,466		6,027
Redeemable noncontrolling interest	—		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	4,186		4,166
Accumulated earnings	5,273		4,794
Accumulated other comprehensive deficit	(597)		(503)
Cost of common stock in treasury (c)	(3,391)		(3,292)
Total Owens Corning stockholders’ equity	5,472		5,166
Noncontrolling interests	53		19
Total equity	5,525		5,185
TOTAL LIABILITIES AND EQUITY	$	14,991	$	11,237

(a)10 shares authorized; none issued or outstanding at June 30, 2024 and December 31, 2023

(b)400 shares authorized; 135.5 issued and 86.9 outstanding at June 30, 2024; 135.5 issued and 87.2 outstanding at December 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, 2023	87.2	$	1	48.3	$	(3,292)	$	4,166	$	4,794	$	(503)	$	19	$	5,185
Net earnings attributable to Owens Corning	—	—		—	—		—		299		—		—		299

Redeemable noncontrolling interest adjustment to redemption value	—	—		—	—		(1)		—		—		—		(1)
Currency translation adjustment	—	—		—	—		—		—		(41)		(1)		(42)

Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		5		—		5

Issuance of common stock under share-based payment plans	0.6	—		(0.6)	21		(20)		—		—		—		1
Purchases of treasury stock	(1.1)	—		1.1	(162)		—		—		—		—		(162)
Stock-based compensation expense	—	—		—	—		14		—		—		—		14

Dividends declared (d)	—	—		—	—		—		(52)		—		—		(52)
Balance at March 31, 2024	86.7	$	1	48.8	$	(3,433)	$	4,159	$	5,041	$	(539)	$	18	$	5,247
Net earnings attributable to Owens Corning	—	—		—	—		—		285		—		—		285

Net earnings attributable to non-redeemable noncontrolling interests	—	—		—	—		—		—		—		1		1
Currency translation adjustment	—	—		—	—		—		—		(62)		(1)		(63)
Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		(1)		—		(1)
Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		5		—		5

Purchases of non-controlling interest	—	—		—	—		—		—		—		35		35
Issuance of common stock under share-based payment plans	0.3	—		(0.3)	60		(47)		—		—		—		13
Purchases of treasury stock	(0.1)	—		0.1	(18)		—		—		—		—		(18)
Stock-based compensation expense	—	—		—	—		39		—		—		—		39
Fair value of awards included in transaction consideration	—	—		—	—		35		—		—		—		35

Dividends declared (d)	—	—		—	—		—		(53)		—		—		(53)
Balance at June 30, 2024	86.9	$	1	48.6	$	(3,391)	$	4,186	$	5,273	$	(597)	$	53	$	5,525

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

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

(c)Noncontrolling Interests (“NCI”)

(d)Quarterly dividend declaration of $0.60 per share as of June 30, 2024 and March 31, 2024

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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

(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 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 CASH FLOWS

(unaudited)

(in millions)


	Six Months Ended June 30,
	2024		2023
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
Net earnings	$	584	$	726
Adjustments to reconcile net earnings to cash from operating activities:
Depreciation and amortization	298		286


Deferred income taxes	(26)		43

Stock-based compensation expense	53		27





Gain on sale of site	—		(189)
Other adjustments to reconcile net earnings to cash from operating activities	(8)		2
Changes in operating assets and liabilities	(376)		(559)
Pension fund contribution	(3)		(3)
Payments for other employee benefits liabilities	(6)		(6)
Other	1		3
Net cash flow provided by operating activities	517		330
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Cash paid for property, plant, and equipment	(309)		(280)

Proceeds from the sale of assets or affiliates	12		189
Investment in subsidiaries and affiliates, net of cash acquired	(2,857)		—




Other	—		(11)
Net cash flow used for investing activities	(3,154)		(102)
NET CASH FLOW PROVIDED BY (USED FOR) FINANCING ACTIVITIES
Proceeds from long-term debt	1,968		—
Payments on long-term debt	(473)		—
Proceeds from senior revolving credit and receivables securitization facilities	470		—
Payments on senior revolving credit and receivables securitization facilities	(315)		—
Proceeds from term loan borrowing	2,784		—
Payments on term loan borrowing	(2,800)		—


Dividends paid	(104)		(95)
Purchases of treasury stock	(185)		(275)
Finance lease payments	(19)		(16)
Other	(5)		1
Net cash flow provided by (used for) financing activities	1,321		(385)
Effect of exchange rate changes on cash	(33)		27
Net decrease in cash, cash equivalents and restricted cash	(1,349)		(130)
Cash, cash equivalents and restricted cash at beginning of period	1,623		1,107
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	274	$	977

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 (“SEC”), 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, 2023 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, 2023 (the “2023 Form 10-K”). Certain reclassifications have been made to the periods presented for 2023 to conform to the classifications used in the periods presented for 2024.

Acquisition of Masonite International Corporation

On May 15, 2024, the Company acquired all of the outstanding shares of Masonite International Corporation (“Masonite”) at a purchase price of $133.00 per share (the "Arrangement"). Masonite is a leading global designer, manufacturer, marketer and distributor of interior and exterior doors and door systems for residential new construction and residential repair and remodeling. The addition of Masonite's market-leading doors business creates a new growth platform for the Company, strengthening the Company's position in building and construction and expanding its offering of branded residential building products.

Masonite's operating results and preliminary purchase price allocation have been included in the Company's newly established Doors reportable segment from May 15, 2024, the effective date of the Arrangement, within the Consolidated Financial Statements. Please refer to Note 7 of the Consolidated Financial Statements for further information.

Revenue Recognition

As of December 31, 2023, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled $101 million, of which $17 million was recognized as revenue in the first six months of 2024. As of June 30, 2024, our contract liability balances totaled $112 million.

As of December 31, 2022, our contract liability balances totaled $89 million, of which $15 million was recognized as revenue in the first six months of 2023. As of June 30, 2023, our contract liability balances totaled $92 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 $20 million as of June 30, 2024, $9 million as of June 30, 2023 and $8 million as of December 31, 2023 and December 31, 2022. Restricted cash primarily represents cash we have placed as collateral for standby letters of credit and amounts received from a counterparty related to its performance assurance on an executory contract. The letters of credit guarantee payment to third parties in the event the Company is in breach of contract terms as detailed in each letter of credit. The amounts received from a counterparty are contractually required to be set aside, and the counterparty can exchange the cash for another form of performance assurance at its discretion. These amounts are included in Other current assets on the Consolidated Balance Sheets.

Accounts Receivable

Our customers consist mainly of distributors, home centers, contractors and retailers. Two of our largest customers accounted for 21% and 16%, respectively, of consolidated accounts receivable as of June 30, 2024 and 11% and 11%, respectively, of consolidated accounts receivable as of December 31, 2023.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

1. GENERAL (continued)

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 $33 million and $65 million for the three and six months ended June 30, 2024, respectively and $29 million and $50 million for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and December 31, 2023, amounts due to the related party supplier were $7 million and $5 million, respectively.

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 $188 million and $211 million as of June 30, 2024 and December 31, 2023, respectively. The amounts of invoices paid under the Programs totaled $257 million and $307 million for the six months ended June 30, 2024 and June 30, 2023, respectively.

Strategic Actions

On February 9, 2024, the Company announced the decision to review strategic alternatives for its global glass reinforcements (“GR”) business, consistent with our strategy to focus on building and construction materials. The GR business, which operates within our Composites segment, supplies a wide variety of glass fiber products for applications in wind energy, infrastructure, industrial, transportation, and consumer markets. The GR business generates annual revenues of approximately $1.3 billion. While a range of options are under consideration, including a potential sale, spin-off or other strategic option, there can be no assurance that the strategic review will result in any transaction or other outcome. During the first six months of 2024, the Company incurred $17 million of costs related to this review.

Accounting Policies

There have been no changes in the significant accounting policies from those that were disclosed in the 2023 Form 10-K.

Critical Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from such estimates. Accounting estimates and assumptions discussed in this section are those considered to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties. There have been no material changes to our critical accounting

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

1. GENERAL (continued)

estimates previously disclosed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, except as follows:

Fair values of assets acquired and liabilities assumed in acquisitions — Assets acquired and liabilities assumed in a business combination are recorded at their estimated fair values on the date of acquisition. The difference between the purchase price amount and the net fair value of assets acquired and liabilities assumed is recognized as goodwill on the balance sheet if the purchase price exceeds the estimated net fair value or as a bargain purchase gain on the income statement if the purchase price is less than the estimated net fair value. We apply significant judgment in estimating the fair value of assets acquired and liabilities assumed, which involves the use of significant estimates and assumptions. Changes in these judgments or estimates can have a material impact on the valuation of the respective assets and liabilities acquired and our results of operations in periods after acquisition. The allocation of the purchase price is preliminary for up to one year after the acquisition date as more information is obtained about the fair value of assets acquired and liabilities assumed. See Note 7 of the Consolidated Financial Statements for further information on the fair values of assets acquired and liabilities assumed in recent business combinations.

Accounting Pronouncements

The following table summarizes recent Accounting Standard Updates ("ASU") issued by the Financial Accounting Standards Board ("FASB") that 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 2024-01 "Compensation - Stock Compensation" (Topic 718): Scope Application of Profits Interest and Similar Awards	This amendment adds an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards should be accounted for in accordance with Topic 718.	Fiscal years beginning after December 15, 2024	We do not believe the adoption of this guidance will have a material effect on our Consolidated Financial Statements.
ASU 2024-02 "Codification Improvements - Amendments to Remove References to the Concepts Statements"	Amendments in this update remove references to various FASB Concepts Statements.	Fiscal years beginning after December 15, 2024	We do not believe the adoption of this guidance will have a material effect on our Consolidated Financial Statements.
ASU 2023-06 “Disclosure Improvements”	The amendments in this update modify the disclosure or presentation requirements of a variety of Topics	The effective date for each topic is contingent on future SEC rule setting.	We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statement disclosures. We do not believe the adoption of this guidance will have a material effect on our results of operations.
ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”	The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.	Fiscal years beginning after December 15, 2023	We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statement disclosures. We do not believe the adoption of this guidance will have a material effect on our results of operations.
ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”	This standard modifies the rate reconciliation and income taxes paid disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, as well as requiring income taxes paid to be disaggregated by jurisdiction.	Fiscal years beginning after December 15, 2024	We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statements.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION

As a result of our acquisition of Masonite International Corporation, which was completed on May 15, 2024, the Company now has four reportable segments: Roofing, Insulation, Doors and Composites. Accounting policies for the segments are the same as those for the Company. The Company’s four reportable segments are defined as follows:

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

Insulation – Within our Insulation segment, the Company manufactures and sells thermal and acoustical batts, loose fill 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 stone wool insulation, cellular glass insulation, and foam insulation used in above- and below-grade construction applications.

Doors – Within our new Doors segment, the Company manufactures and sells interior and exterior doors and door systems.

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 non-wovens, fabrics and composite lumber.

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 June 30, 2024
Reportable Segments	Roofing		Insulation		Doors		Composites		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	1,049	$	382	$	244	$	121	$	(87)	$	1,709
U.S. commercial and industrial	37		209		—		187		(2)		431
Total United States	1,086		591		244		308		(89)		2,140
Europe	—		184		30		119		—		333
Asia-Pacific	—		37		1		87		—		125
Rest of world	19		104		36		32		—		191
NET SALES	$	1,105	$	916	$	311	$	546	$	(89)	$	2,789


	For the three months ended June 30, 2023
Reportable Segments	Roofing		Insulation		Doors		Composites		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	1,054	$	324	$	—	$	87	$	(83)	$	1,382
U.S. commercial and industrial	40		223		—		237		(2)		498
Total United States	1,094		547		—		324		(85)		1,880
Europe	4		201		—		135		—		340
Asia-Pacific	1		41		—		116		—		158
Rest of world	24		116		—		45		—		185
NET SALES	$	1,123	$	905	$	—	$	620	$	(85)	$	2,563

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION (continued)




	For the six months ended June 30, 2024
Reportable Segments	Roofing		Insulation		Doors		Composites		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	1,972	$	761	$	244	$	238	$	(167)	$	3,048
U.S. commercial and industrial	57		411		—		355		(5)		818
Total United States	2,029		1,172		244		593		(172)		3,866
Europe	—		360		30		240		(1)		629
Asia-Pacific	—		64		1		171		—		236
Rest of world	33		224		36		65		—		358
NET SALES	$	2,062	$	1,820	$	311	$	1,069	$	(173)	$	5,089




	For the six months ended June 30, 2023
Reportable Segments	Roofing		Insulation		Doors		Composites		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	1,893	$	694	$	—	$	172	$	(148)	$	2,611
U.S. commercial and industrial	64		429		—		455		(4)		944
Total United States	1,957		1,123		—		627		(152)		3,555
Europe	8		395		—		272		(1)		674
Asia-Pacific	1		72		—		223		—		296
Rest of world	52		234		—		83		—		369
NET SALES	$	2,018	$	1,824	$	—	$	1,205	$	(153)	$	4,894

Sales to major customers - The Company had two customers that exceeded 10% of consolidated net sales for the six months ended June 30, 2024. The first customer, which is a customer of both the Roofing and Insulation segments, accounted for approximately 12% of the Company's consolidated net sales for the six months ended June 30, 2024. The second customer, which is a customer of the Roofing, Insulation and Doors segments, accounted for approximately 11% of the Company's consolidated net sales for the six months ended June 30, 2024.

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.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION (continued)

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Reportable Segments
Roofing	$	373	$	338	$	659	$	547
Insulation	183		163		344		319
Doors	34		—		34		—
Composites	61		87		107		136
Total reportable segments	651		588		1,144		1,002
Restructuring costs	(47)		(47)		(61)		(65)
Gain on sale of Santa Clara, California site	—		—		—		189

Gains on sale of certain precious metals	—		—		—		2
Paroc marine recall	(6)		—		(7)		—
Strategic review-related charges	(15)		—		(17)		—
Acquisition-related transaction costs	(29)		—		(47)		—
Acquisition-related integration costs	(21)		—		(21)		—

Recognition of acquisition inventory fair value step-up	(12)		—		(12)		—
General corporate expense and other	(63)		(54)<