Owens Corning Files Q3 2024 10-Q

TL;DR

OC's Q3 10-Q is in. Check financials for 9 months and 3 months ending Sep 30, 2024.

AI Summary

Owens Corning filed its 10-Q for the period ending September 30, 2024. The company reported financial results for the third quarter of 2024, detailing its performance across various segments. Key financial data and operational updates are provided in the filing, which covers the nine months and three months ended September 30, 2024, and comparative periods in 2023.

Why It Matters

This filing provides investors with the latest financial performance data for Owens Corning, crucial for understanding the company's current health and future prospects in the building materials sector.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the end of the fiscal quarter being reported.)
• 2024-11-06 — Filing Date (The date the 10-Q was officially submitted to the SEC.)
• 2024 Q3 — Fiscal Quarter (Specifies the quarter for which financial results are presented.)

Key Players & Entities

• Owens Corning (company) — Filer of the 10-Q
• 20240930 (date) — End of the reporting period
• 20241106 (date) — Filing date
• Toledo, OH (location) — Company headquarters

FAQ

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share OC New York Stock Exchange

Filing Documents

• oc-20240930.htm (10-Q) — 2277KB
• oc-2024x09x30x10qxexh101.htm (EX-10.1) — 38KB
• oc-2024x09x30x10qxexh311.htm (EX-31.1) — 9KB
• oc-2024x09x30x10qxexh312.htm (EX-31.2) — 9KB
• oc-2024x09x30x10qxexh321.htm (EX-32.1) — 3KB
• oc-2024x09x30x10qxexh322.htm (EX-32.2) — 3KB
• 0001370946-24-000239.txt ( ) — 12261KB
• oc-20240930.xsd (EX-101.SCH) — 74KB
• oc-20240930_cal.xml (EX-101.CAL) — 102KB
• oc-20240930_def.xml (EX-101.DEF) — 443KB
• oc-20240930_lab.xml (EX-101.LAB) — 914KB
• oc-20240930_pre.xml (EX-101.PRE) — 671KB
• oc-20240930_htm.xml (XML) — 2152KB

– FINANCIAL INFORMATION (unaudited)

PART I – FINANCIAL INFORMATION (unaudited)

Financial Statements

Item 1. Financial Statements Consolidated Statements of Earning s 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

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 25 9. Warranties 25 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 18. Subsequent Events 42

Management's Discussion and Analysis of Financial Condition and Results of Operations

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

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 59

Controls and Procedures

Item 4. Controls and Procedures 59

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 60

Risk Factors

Item 1A. Risk Factors 60

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 60

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 60

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 60

Other Information

Item 5. Other Information 61

Exhibits

Item 6. Exhibits 62

Signatures

Signatures 63 Table of Contents - 3 - PART I

FINANCIAL STATEMENTS

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, 2024 2023 2024 2023 NET SALES $ 3,046 $ 2,479 $ 8,135 $ 7,373 COST OF SALES 2,138 1,752 5,680 5,305 Gross margin 908 727 2,455 2,068 OPERATING EXPENSES Marketing and administrative expenses 279 201 740 612 Science and technology expenses 36 29 101 85 Gain on sale of site — — — ( 189 ) Other expense, net 84 35 245 77 Total operating expenses 399 265 1,086 585 OPERATING INCOME 509 462 1,369 1,483 Non-operating income — ( 1 ) ( 1 ) ( 1 ) EARNINGS BEFORE INTEREST AND TAXES 509 463 1,370 1,484 Interest expense, net 70 17 151 62 EARNINGS BEFORE TAXES 439 446 1,219 1,422 Income tax expense 120 110 318 361 Equity in net earnings of affiliates 2 1 4 2 NET EARNINGS 321 337 905 1,063 Net loss attributable to non-redeemable and redeemable noncontrolling interests — — — ( 2 ) NET EARNINGS ATTRIBUTABLE TO OWENS CORNING $ 321 $ 337 $ 905 $ 1,065 EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS Basic $ 3.69 $ 3.74 $ 10.38 $ 11.75 Diluted $ 3.65 $ 3.71 $ 10.28 $ 11.64 WEIGHTED AVERAGE COMMON SHARES Basic 87.0 90.0 87.2 90.6 Diluted 87.9 90.9 88.0 91.5 The accompanying Notes to the Consolidated Financial Statements are an integral part of these Statements. Table of Contents - 4 - OWENS CORNING AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (unaudited) (in millions) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 NET EARNINGS $ 321 $ 337 $ 905 $ 1,063 Other comprehensive income (loss), net of tax: Currency translation adjustment (net of tax of $ 0 and $( 2 ) for the three months ended September 30, 2024 and 2023, respectively, and $ 0 and $( 2 ) for the nine months ended September 30, 2024 and 2023, respectively) 68 ( 73 ) ( 37 ) ( 33 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 an

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 $ 20 million and $ 85 million for the three and nine months ended September 30, 2024, respectively, and $ 22 million and $ 72 million for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024 and December 31, 2023, amounts due to the related party supplier were $ 3 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 1. GENERAL (continued) 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, as well as the measurement period adjustments to the purchase price allocation. Goodwill Impairment Assessment — When it is determined necessary for the Company to perform the quantitative impairment process for goodwill, we estimate fair value using a discounted cash flow approach from the perspective of a market participant, as well as the market approach. For the market approach, we use market multiples derived from a set of similar companies. Accounting Pronouncements The following table summarizes recent Accounting Standard Updates ("ASU") issued by the Financial Accounting Standards Board ("FASB") that could h

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