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~~September 30, 2022

☐ 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~~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. ¨

Table of Contents

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 ~~July 22,~~October 21, 2022, ~~96,238,504~~93,456,304 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	4
		Consolidated Statements of Comprehensive Earnings	5
		Consolidated Balance Sheets	6
		Consolidated Statements of Stockholders' Equity	87
		Consolidated Statements of Cash Flows	79
		Notes to Consolidated Financial Statements
		1. General	10
		2. Segment Information	1211

		3. Inventories	1413
		4. Derivative Financial Instruments	1514
		5. Goodwill and Other Intangible Assets	1817
		6. Property, Plant and Equipment	1918

		7. Acquisitions	2019

		8. ~~Assets Held for Sale~~Divestitures	20
		9. Warranties	2120
		10. Restructuring, Acquisition and Divestiture-Related Costs	21
		11. Debt	2423
		12. Pension Plans and Other Postretirement Benefits	2726
		13. Contingent Liabilities and Other Matters	2928
		14. Stock Compensation	3029
		15. Earnings per Share	3332
		16. Income Taxes	3433
		17. Changes in Accumulated Other Comprehensive Deficit	3534


	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3635

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4849

	Item 4.	Controls and Procedures	4849

PART II – OTHER INFORMATION

	Item 1.	Legal Proceedings	4950

	Item 1A.	Risk Factors	4950

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4950

	Item 3.	Defaults Upon Senior Securities	4950

	Item 4.	Mine Safety Disclosures	4950

	Item 5.	Other Information	4950

	Item 6.	Exhibits	5051

		Signatures	5152

Table of Contents

- 4 -

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

		2022		2021		2022		2021			2022		2021		2022		2021
NET SALES	NET SALES	$	2,601	$	2,239	$	4,947	$	4,154	NET SALES	$	2,529	$	2,213	$	7,476	$	6,367
COST OF SALES	COST OF SALES	1,867		1,621		3,594		3,092		COST OF SALES	1,836		1,617		5,430		4,709
Gross margin	Gross margin	734		618		1,353		1,062		Gross margin	693		596		2,046		1,658
OPERATING EXPENSES	OPERATING EXPENSES									OPERATING EXPENSES
Marketing and administrative expenses	Marketing and administrative expenses	201		188		385		362		Marketing and administrative expenses	201		186		586		548
Science and technology expenses	Science and technology expenses	24		22		47		42		Science and technology expenses	26		21		73		63

Other expense (income), net		22		(17)		(6)		(65)
Gain on equity method investment										Gain on equity method investment	(130)		—		(130)		—
Other income, net										Other income, net	(12)		(3)		(18)		(68)
Total operating expenses	Total operating expenses	247		193		426		339		Total operating expenses	85		204		511		543
OPERATING INCOME	OPERATING INCOME	487		425		927		723		OPERATING INCOME	608		392		1,535		1,115
Non-operating income	Non-operating income	(2)		(3)		(4)		(6)		Non-operating income	(2)		(2)		(6)		(8)
EARNINGS BEFORE INTEREST AND TAXES	EARNINGS BEFORE INTEREST AND TAXES	489		428		931		729		EARNINGS BEFORE INTEREST AND TAXES	610		394		1,541		1,123
Interest expense, net	Interest expense, net	26		33		54		66		Interest expense, net	28		31		82		97

Loss on extinguishment of debt										Loss on extinguishment of debt	—		9		—		9
EARNINGS BEFORE TAXES	EARNINGS BEFORE TAXES	463		395		877		663		EARNINGS BEFORE TAXES	582		354		1,459		1,017
Income tax expense	Income tax expense	119		97		226		156		Income tax expense	114		94		340		250
Equity in net (loss) earnings of affiliates		(1)		—		(1)		1
Equity in net earnings (loss) of affiliates										Equity in net earnings (loss) of affiliates	1		(1)		—		—
NET EARNINGS	NET EARNINGS	343		298		650		508		NET EARNINGS	469		259		1,119		767
Net earnings attributable to non-redeemable and redeemable noncontrolling interests		—		—		3		—
Net (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests										Net (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests	(1)		(1)		2		(1)

NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	343	$	298	$	647	$	508	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	470	$	260	$	1,117	$	768
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS	EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS									EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS
Basic	Basic	$	3.51	$	2.85	$	6.56	$	4.84	Basic	$	4.88	$	2.52	$	11.42	$	7.36
Diluted	Diluted	$	3.49	$	2.82	$	6.52	$	4.80	Diluted	$	4.84	$	2.50	$	11.32	$	7.30

WEIGHTED AVERAGE COMMON SHARES	WEIGHTED AVERAGE COMMON SHARES									WEIGHTED AVERAGE COMMON SHARES
Basic	Basic	97.6		104.6		98.6		105.0		Basic	96.3		103.1		97.8		104.4
Diluted	Diluted	98.4		105.5		99.3		105.9		Diluted	97.1		103.9		98.7		105.2

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

Table of Contents

- 5 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited)

(in millions)


			Three Months Ended June 30,				Six Months Ended June 30,						Three Months Ended September 30,				Nine Months Ended September 30,
			2022		2021		2022		2021				2022		2021		2022		2021
NET EARNINGS	NET EARNINGS		$	343	$	298	$	650	$	508	NET EARNINGS		$	469	$	259	$	1,119	$	767
Other comprehensive income (loss), net of tax:
Other comprehensive (loss) income, net of tax:											Other comprehensive (loss) income, net of tax:
		Currency translation adjustment (net of tax of $(1) and $0 for the three months ended June 30, 2022 and 2021, respectively, and $(1) and $(1) for the six months ended June 30, 2022 and 2021, respectively)	(54)		32		(82)		(13)			Currency translation adjustment (net of tax of $0 and $(1) for the three months ended September 30, 2022 and 2021, respectively, and $(1) and $(2) for the nine months ended September 30, 2022 and 2021, respectively)	(161)		(35)		(243)		(48)
		Pension and other postretirement adjustment (net of tax of $0 and $0 for the three months ended June 30, 2022 and 2021, and $(1) and $0 for the six months ended June 30, 2022 and 2021, respectively)	6		(3)		9		(2)			Pension and other postretirement adjustment (net of tax of $0 and $(10) for the three months ended September 30, 2022 and 2021, and $(1) and $(10) for the nine months ended September 30, 2022 and 2021, respectively)	6		33		15		31
		Hedging adjustment (net of tax of $1 and $1 for the three months ended June 30, 2022 and 2021, respectively, and $(7) and $(3) for the six months ended June 30, 2022 and 2021, respectively)	(1)		(2)		23		10			Hedging adjustment (net of tax of $(2) and $(5) for the three months ended September 30, 2022 and 2021, respectively, and $(9) and $(8) for the nine months ended September 30, 2022 and 2021, respectively)	6		12		29		22
		Total other comprehensive income (loss), net of tax	(49)		27		(50)		(5)			Total other comprehensive (loss) income, net of tax	(149)		10		(199)		5
COMPREHENSIVE EARNINGS	COMPREHENSIVE EARNINGS		294		325		600		503		COMPREHENSIVE EARNINGS		320		269		920		772
Comprehensive (loss) attributable to non-redeemable and redeemable noncontrolling interests	Comprehensive (loss) attributable to non-redeemable and redeemable noncontrolling interests		(2)		—		—		—		Comprehensive (loss) attributable to non-redeemable and redeemable noncontrolling interests		(2)		(1)		(2)		(1)

COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING	COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING		$	296	$	325	$	600	$	503	COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING		$	322	$	270	$	922	$	773

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

Table of Contents

- 6 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except per share amounts)


ASSETS	ASSETS	June 30, 2022		December 31, 2021		ASSETS	September 30, 2022		December 31, 2021
CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	810	$	959	Cash and cash equivalents	$	751	$	959
Receivables, less allowance of $10 at June 30, 2022 and $9 at December 31, 2021, respectively		1,358		939
Receivables, less allowance of $10 at September 30, 2022 and $9 at December 31, 2021						Receivables, less allowance of $10 at September 30, 2022 and $9 at December 31, 2021	1,304		939
Inventories	Inventories	1,254		1,078		Inventories	1,322		1,078
Assets held for sale		81		—

Other current assets	Other current assets	186		121		Other current assets	190		121
Total current assets	Total current assets	3,689		3,097		Total current assets	3,567		3,097
Property, plant and equipment, net	Property, plant and equipment, net	3,684		3,873		Property, plant and equipment, net	3,660		3,873
Operating lease right-of-use assets	Operating lease right-of-use assets	189		158		Operating lease right-of-use assets	182		158
Goodwill	Goodwill	1,079		990		Goodwill	1,367		990
Intangible assets	Intangible assets	1,614		1,617		Intangible assets	1,677		1,617
Deferred income taxes	Deferred income taxes	21		31		Deferred income taxes	17		31
Other non-current assets	Other non-current assets	267		249		Other non-current assets	251		249
TOTAL ASSETS	TOTAL ASSETS	$	10,543	$	10,015	TOTAL ASSETS	$	10,721	$	10,015
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
CURRENT LIABILITIES	CURRENT LIABILITIES					CURRENT LIABILITIES
Accounts payable	Accounts payable	$	1,327	$	1,095	Accounts payable	$	1,320	$	1,095
Current operating lease liabilities	Current operating lease liabilities	54		49		Current operating lease liabilities	51		49
Other current liabilities	Other current liabilities	593		553		Other current liabilities	643		553
Total current liabilities	Total current liabilities	1,974		1,697		Total current liabilities	2,014		1,697
Long-term debt, net of current portion	Long-term debt, net of current portion	2,989		2,960		Long-term debt, net of current portion	2,988		2,960
Pension plan liability	Pension plan liability	62		77		Pension plan liability	56		77
Other employee benefits liability	Other employee benefits liability	154		157		Other employee benefits liability	152		157
Non-current operating lease liabilities	Non-current operating lease liabilities	135		109		Non-current operating lease liabilities	132		109
Deferred income taxes	Deferred income taxes	376		376		Deferred income taxes	398		376
Other liabilities	Other liabilities	266		304		Other liabilities	295		304
Total liabilities	Total liabilities	5,956		5,680		Total liabilities	6,035		5,680
Redeemable noncontrolling interest	Redeemable noncontrolling interest	25		—		Redeemable noncontrolling interest	25		—
OWENS CORNING STOCKHOLDERS’ EQUITY	OWENS CORNING STOCKHOLDERS’ EQUITY					OWENS CORNING STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.01 per share (a)	Preferred stock, par value $0.01 per share (a)	—		—		Preferred stock, par value $0.01 per share (a)	—		—
Common stock, par value $0.01 per share (b)	Common stock, par value $0.01 per share (b)	1		1		Common stock, par value $0.01 per share (b)	1		1
Additional paid in capital	Additional paid in capital	4,107		4,092		Additional paid in capital	4,124		4,092
Accumulated earnings	Accumulated earnings	3,282		2,706		Accumulated earnings	3,719		2,706
Accumulated other comprehensive deficit	Accumulated other comprehensive deficit	(628)		(581)		Accumulated other comprehensive deficit	(776)		(581)
Cost of common stock in treasury (c)	Cost of common stock in treasury (c)	(2,222)		(1,922)		Cost of common stock in treasury (c)	(2,428)		(1,922)
Total Owens Corning stockholders’ equity	Total Owens Corning stockholders’ equity	4,540		4,296		Total Owens Corning stockholders’ equity	4,640		4,296
Noncontrolling interests	Noncontrolling interests	22		39		Noncontrolling interests	21		39
Total equity	Total equity	4,562		4,335		Total equity	4,661		4,335
TOTAL LIABILITIES AND EQUITY	TOTAL LIABILITIES AND EQUITY	$	10,543	$	10,015	TOTAL LIABILITIES AND EQUITY	$	10,721	$	10,015

(a)10 shares authorized; none issued or outstanding at ~~June~~September 30, 2022 and December 31, 2021

(b)400 shares authorized; 135.5 issued and ~~97.2~~94.7 outstanding at ~~June~~September 30, 2022; 135.5 issued and 100.4 outstanding at December 31, 2021

(c)~~38.3~~40.8 shares at ~~June~~September 30, 2022 and 35.1 shares at December 31, 2021

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

Table of Contents

- 7 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~

~~(unaudited)~~

~~(in millions)~~

Six Months Ended
June 30,

2022 2021
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
Net earnings $ 650 $ 508
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization 270 241
Deferred income taxes 16 35
Provision for pension and other employee benefits liabilities 1 —
Stock-based compensation expense 25 24
Gains on sale of certain precious metals (11) (41)
Other adjustments to reconcile net earnings to cash provided by operating activities 22 9
Changes in operating assets and liabilities (330) (62)
Pension fund contribution (2) (3)
Payments for other employee benefits liabilities (5) (6)
Other (12) (3)
Net cash flow provided by operating activities 624 702
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Cash paid for property, plant, and equipment (212) (177)
Proceeds from the sale of assets or affiliates 27 1
Investment in subsidiaries and affiliates, net of cash acquired (173) —
Derivative settlements 20 (32)
Other (2) (5)
Net cash flow used for investing activities (340) (213)
NET CASH FLOW USED FOR FINANCING ACTIVITIES
Purchases of noncontrolling interest (9) —
Net decrease in short-term debt (5) —
Dividends paid (70) (55)
Purchases of treasury stock (330) (263)
Other (15) (2)
Net cash flow used for financing activities (429) (320)
Effect of exchange rate changes on cash (4) 2
Net (decrease) increase in cash, cash equivalents, and restricted cash (149) 171
Cash, cash equivalents and restricted cash at beginning of period 966 724
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD $ 817 $ 895

~~The accompanying Notes to the Consolidated Financial Statements are an integral part of this Statement.~~

~~Table of Contents~~

~~- 8 -~~

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

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

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

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

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

Dividends declared (d)																		Dividends declared (d)	—	—		—	—		—		(33)		—		—		(33)
Balance at September 30, 2022																		Balance at September 30, 2022	94.7	$	1	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 Interest (“NCI”)

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

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

Table of Contents

- 98 -

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			Common Stock Outstanding			Treasury Stock			APIC (a)		Accumulated Earnings		AOCI (b)		NCI (c)		Total
		Shares	Par Value		Shares	Cost													Shares	Par Value		Shares	Cost
Balance at December 31, 2020	Balance at December 31, 2020	105.6	$	1	29.9	$	(1,400)	$	4,059	$	1,829	$	(588)	$	40	$	3,941	Balance at December 31, 2020	105.6	$	1	29.9	$	(1,400)	$	4,059	$	1,829	$	(588)	$	40	$	3,941
Net earnings attributable to Owens Corning	Net earnings attributable to Owens Corning	—	—		—	—		—		210		—		—		210		Net earnings attributable to Owens Corning	—	—		—	—		—		210		—		—		210

Net earnings attributable to noncontrolling interests																		Net earnings attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Currency translation adjustment	Currency translation adjustment	—	—		—	—		—		—		(45)		(1)		(46)		Currency translation adjustment	—	—		—	—		—		—		(45)		(1)		(46)
Pension and other postretirement adjustment (net of tax)	Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		1		—		1		Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		1		—		1
Deferred gain on hedging transactions (net of tax)	Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		12		—		12		Deferred gain on hedging transactions (net of tax)	—	—		—	—		—		—		12		—		12

Issuance of common stock under share-based payment plans	Issuance of common stock under share-based payment plans	0.5	—		(0.5)	22		(15)		—		—		—		7		Issuance of common stock under share-based payment plans	0.5	—		(0.5)	22		(15)		—		—		—		7
Purchases of treasury stock	Purchases of treasury stock	(1.8)	—		1.8	(142)		—		—		—		—		(142)		Purchases of treasury stock	(1.8)	—		1.8	(142)		—		—		—		—		(142)
Stock-based compensation expense	Stock-based compensation expense	—	—		—	—		12		—		—		—		12		Stock-based compensation expense	—	—		—	—		12		—		—		—		12

Cumulative effect of accounting change																		Cumulative effect of accounting change	—	—		—	—		—		—		—		—		—
Dividends declared (d)	Dividends declared (d)	—	—		—	—		—		(28)		—		—		(28)		Dividends declared (d)	—	—		—	—		—		(28)		—		—		(28)
Balance at March 31, 2021	Balance at March 31, 2021	104.3	$	1	31.2	$	(1,520)	$	4,056	$	2,011	$	(620)	$	39	$	3,967	Balance at March 31, 2021	104.3	$	1	31.2	$	(1,520)	$	4,056	$	2,011	$	(620)	$	39	$	3,967
Net earnings attributable to Owens Corning	Net earnings attributable to Owens Corning	—	—		—	—		—		298		—		—		298		Net earnings attributable to Owens Corning	—	—		—	—		—		298		—		—		298

Net loss attributable to noncontrolling interests																		Net loss attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—
Currency translation adjustment	Currency translation adjustment	—	—		—	—		—		—		32		—		32		Currency translation adjustment	—	—		—	—		—		—		32		—		32
Pension and other postretirement adjustment (net of tax)	Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		(3)		—		(3)		Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		(3)		—		(3)
Deferred loss on hedging transactions (net of tax)	Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		(2)		—		(2)		Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		(2)		—		(2)

Issuance of common stock under share-based payment plans	Issuance of common stock under share-based payment plans	0.3	—		(0.3)	14		(4)		—		—		—		10		Issuance of common stock under share-based payment plans	0.3	—		(0.3)	14		(4)		—		—		—		10
Purchases of treasury stock	Purchases of treasury stock	(1.3)	—		1.3	(131)		—		—		—		—		(131)		Purchases of treasury stock	(1.3)	—		1.3	(131)		—		—		—		—		(131)
Stock-based compensation expense	Stock-based compensation expense	—	—		—	—		12		—		—		—		12		Stock-based compensation expense	—	—		—	—		12		—		—		—		12
Cumulative effect of accounting change (d)																		Cumulative effect of accounting change (d)	—	—		—	—		—		—		—		—		—
Dividends declared (d)																		Dividends declared (d)	—	—		—	—		—		(27)		—		—		(27)
Balance at June 30, 2021																		Balance at June 30, 2021	103.3	$	1	32.2	$	(1,637)	$	4,064	$	2,282	$	(593)	$	39	$	4,156
Net earnings attributable to Owens Corning																		Net earnings attributable to Owens Corning	—	—		—	—		—		260		—		—		260
Net loss attributable to noncontrolling interests																		Net loss attributable to noncontrolling interests	—	—		—	—		—		—		—		(1)		(1)

Currency translation adjustment																		Currency translation adjustment	—	—		—	—		—		—		(35)		1		(34)
Pension and other postretirement adjustment (net of tax)																		Pension and other postretirement adjustment (net of tax)	—	—		—	—		—		—		33		—		33
Deferred loss on hedging transactions (net of tax)																		Deferred loss on hedging transactions (net of tax)	—	—		—	—		—		—		12		—		12

Purchases of treasury stock																		Purchases of treasury stock	(1.7)	—		1.7	(162)		—		—		—		—		(162)
Stock-based compensation expense																		Stock-based compensation expense	—	—		—	—		12		—		—		—		12

Dividends declared (d)	Dividends declared (d)	—	—		—	—		—		(27)		—		—		(27)		Dividends declared (d)	—	—		—	—		—		(27)		—		—		(27)
Balance at June 30, 2021		103.3	$	1	32.2	$	(1,637)	$	4,064	$	2,282	$	(593)	$	39	$	4,156

Balance at September 30, 2021																		Balance at September 30, 2021	101.6	1.0		33.9	(1,799)		4,076		2,515		(583)		39		4,249

(a)Additional Paid in Capital ("APIC")

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

(c)Noncontrolling Interest (“NCI”)

(d)Quarterly dividend declarations of $0.26 per share as of September 30, 2021, June 30, 2021 and March 31, 2021

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

Table of Contents

- 9 -

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in millions)


	Nine Months Ended September 30,
	2022		2021
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
Net earnings	$	1,119	$	767
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	400		370


Deferred income taxes	48		54
Provision for pension and other employee benefits liabilities	2		2
Stock-based compensation expense	38		36


Gains on sale of certain precious metals	(18)		(41)
Loss on extinguishment of debt	—		9
Gain on equity method investment	(130)		—
Other adjustments to reconcile net earnings to cash provided by operating activities	(1)		14
Changes in operating assets and liabilities	(333)		(26)
Pension fund contribution	(5)		(5)
Payments for other employee benefits liabilities	(5)		(9)
Other	(30)		(3)
Net cash flow provided by operating activities	1,085		1,168
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Cash paid for property, plant, and equipment	(306)		(243)

Proceeds from the sale of assets or affiliates	103		70
Investment in subsidiaries and affiliates, net of cash acquired	(417)		(42)

Derivative settlements	52		(23)


Other	(5)		(4)
Net cash flow used for investing activities	(573)		(242)
NET CASH FLOW USED FOR FINANCING ACTIVITIES

Payments on long-term debt	—		(193)




Purchases of noncontrolling interest	(9)		—
Net decrease in short-term debt	(5)		1
Dividends paid	(103)		(81)
Purchases of treasury stock	(536)		(435)
Other	(22)		(8)
Net cash flow used for financing activities	(675)		(716)
Effect of exchange rate changes on cash	(45)		(7)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(208)		203
Cash, cash equivalents and restricted cash at beginning of period	966		724
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	758	$	927

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

Table of Contents

- 10 -

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, 2021 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, 2021 (the "2021 Form 10-K"). Certain reclassifications have been made to the periods presented for 2021 to conform to the classifications used in the periods presented for 2022.

Revenue Recognition

As of December 31, 2021, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled $76 million, of which ~~$15~~$16 million was recognized as revenue in the first ~~six~~nine months of 2022. As of ~~June~~September 30, 2022, our contract liability balances totaled ~~$82~~$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 $7 million as of ~~June~~September 30, 2022, December 31, 2021, ~~June~~September 30, 2021 and December 31, 2020. 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 ~~$39~~$42 million and ~~$60~~$102 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, and ~~$27~~$23 million and ~~$47~~$70 million for the three and ~~six~~nine months ended ~~June~~September 30, 2021, ~~respectively..~~respectively. As of ~~June~~September 30, 2022 and December 31, 2021, amounts due to the related party supplier were ~~$10~~$9 million and $1 million, respectively.

~~Leases~~

During the first quarter of 2021, the Company entered into a lease for a to-be-constructed warehouse located near our manufacturing facility in Fort Smith, Arkansas. During the second quarter of 2022, construction was completed, and the lease period commenced, resulting in a finance lease right-of-use asset and corresponding lease liability of $35 million being recognized. At no point during the construction period did the Company control the underlying asset as defined in Accounting Standards Codification (ASC) 842 (Leases).

~~Table of Contents~~

~~- 11 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~1. GENERAL (continued)~~

Accounting Pronouncements

The following table summarizes recent Accounting Standards Updates (ASU's) 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 2021-10 "Government Assistance (Topic 832)"	This standard modifies the annual disclosure requirements for business entities that receive government assistance and use a grant or contribution accounting model by analogy to other account guidance.	January 1, 2022	We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statements. The Company ~~will adopt~~has adopted ASU 2021-10 for the year ending December 31, 2022 and will provide the required disclosures, if material.
ASU 2022-04 "Liabilities—Supplier Finance Programs (Subtopic 405-50)"	This standard modifies the annual and interim disclosure requirements for entities which participate in a supplier finance program.	January 1, 2023	We are currently assessing the impact which the adoption of this standard will have on our Consolidated Financial Statements.The Company will adopt this ASU for interim periods beginning January 1, 2023.

Table of Contents

- 1211 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION

The Company has 3three reportable segments: Composites, Insulation and Roofing. Accounting policies for the segments are the same as those for the Company. The Company’s 3three reportable segments are defined as follows:

Composites – ~~The~~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, roofing components used in residential and commercial construction and specialty applications, and synthetic packaging materials.

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, 2022											For the three months ended September 30, 2022
Reportable Segments	Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated		Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories	Disaggregation Categories											Disaggregation Categories
U.S. residential	U.S. residential	$	94	$	374	$	932	$	(69)	$	1,331	U.S. residential	$	96	$	400	$	912	$	(75)	$	1,333
U.S. commercial and industrial	U.S. commercial and industrial	225		202		44		—		471		U.S. commercial and industrial	222		204		54		—		480
Total United States	Total United States	319		576		976		(69)		1,802		Total United States	318		604		966		(75)		1,813
Europe	Europe	197		213		5		(1)		414		Europe	141		201		5		(2)		345
Asia-Pacific	Asia-Pacific	145		41		2		—		188		Asia-Pacific	126		42		1		—		169
Rest of world	Rest of world	58		104		35		—		197		Rest of world	53		118		31		—		202
NET SALES	NET SALES	$	719	$	934	$	1,018	$	(70)	$	2,601	NET SALES	$	638	$	965	$	1,003	$	(77)	$	2,529


		For the three months ended June 30, 2021											For the three months ended September 30, 2021
Reportable Segments	Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated		Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories	Disaggregation Categories											Disaggregation Categories
U.S. residential	U.S. residential	$	83	$	285	$	847	$	(66)	$	1,149	U.S. residential	$	83	$	312	$	796	$	(60)	$	1,131
U.S. commercial and industrial	U.S. commercial and industrial	162		177		33		—		372		U.S. commercial and industrial	163		181		38		—		382
Total United States	Total United States	245		462		880		(66)		1,521		Total United States	246		493		834		(60)		1,513
Europe	Europe	164		194		5		(1)		362		Europe	161		179		5		(2)		343
Asia-Pacific	Asia-Pacific	129		53		2		—		184		Asia-Pacific	136		48		1		—		185
Rest of world	Rest of world	45		97		30		—		172		Rest of world	48		95		29		—		172
NET SALES	NET SALES	$	583	$	806	$	917	$	(67)	$	2,239	NET SALES	$	591	$	815	$	869	$	(62)	$	2,213

Table of Contents

- 1312 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION (continued)


		For the six months ended June 30, 2022											For the nine months ended September 30, 2022
Reportable Segments	Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated		Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories	Disaggregation Categories											Disaggregation Categories
U.S. residential	U.S. residential	$	181	$	725	$	1,708	$	(129)	$	2,485	U.S. residential	$	277	$	1,125	$	2,620	$	(204)	$	3,818
U.S. commercial and industrial	U.S. commercial and industrial	435		381		71		(3)		884		U.S. commercial and industrial	657		585		125		(3)		1,364
Total United States	Total United States	616		1,106		1,779		(132)		3,369		Total United States	934		1,710		2,745		(207)		5,182
Europe	Europe	402		410		11		(3)		820		Europe	543		611		16		(5)		1,165
Asia-Pacific	Asia-Pacific	296		76		4		—		376		Asia-Pacific	422		118		5		—		545
Rest of world	Rest of world	119		201		62		—		382		Rest of world	172		319		93		—		584
NET SALES	NET SALES	$	1,433	$	1,793	$	1,856	$	(135)	$	4,947	NET SALES	$	2,071	$	2,758	$	2,859	$	(212)	$	7,476


		For the six months ended June 30, 2021											For the nine months ended September 30, 2021
Reportable Segments	Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated		Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories	Disaggregation Categories											Disaggregation Categories
U.S. residential	U.S. residential	$	158	$	548	$	1,506	$	(121)	$	2,091	U.S. residential	$	241	$	860	$	2,302	$	(181)	$	3,222
U.S. commercial and industrial	U.S. commercial and industrial	308		339		55		—		702		U.S. commercial and industrial	471		520		93		—		1,084
Total United States	Total United States	466		887		1,561		(121)		2,793		Total United States	712		1,380		2,395		(181)		4,306
Europe	Europe	323		347		8		(1)		677		Europe	484		526		13		(3)		1,020
Asia-Pacific	Asia-Pacific	267		89		5		—		361		Asia-Pacific	403		137		6		—		546
Rest of world	Rest of world	86		183		54		—		323		Rest of world	134		278		83		—		495
NET SALES	NET SALES	$	1,142	$	1,506	$	1,628	$	(122)	$	4,154	NET SALES	$	1,733	$	2,321	$	2,497	$	(184)	$	6,367

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.

Table of Contents

- 1413 -

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,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Reportable Segments	Reportable Segments									Reportable Segments
Composites	Composites	$	154	$	98	$	308	$	177	Composites	$	126	$	101	$	434	$	278
Insulation	Insulation	157		112		286		194		Insulation	173		124		459		318
Roofing	Roofing	258		234		434		390		Roofing	229		212		663		602
Total reportable segments	Total reportable segments	569		444		1,028		761		Total reportable segments	528		437		1,556		1,198
Restructuring costs	Restructuring costs	(11)		(1)		(17)		(2)		Restructuring costs	(12)		(20)		(29)		(22)
Gain on sale of Shanghai, China facility	Gain on sale of Shanghai, China facility	—		—		27		—		Gain on sale of Shanghai, China facility	—		—		27		—

Gain on sale of land in India										Gain on sale of land in India	—		15		—		15
Gains on sale of certain precious metals	Gains on sale of certain precious metals	7		21		11		41		Gains on sale of certain precious metals	7		—		18		41

Recognition of acquisition inventory fair value step-up										Recognition of acquisition inventory fair value step-up	—		(1)		—		(1)
Acquisition-related costs	Acquisition-related costs	(3)		—		(3)		—		Acquisition-related costs	(2)		—		(5)		—
Impairment loss on Chambery, France assets held for sale	Impairment loss on Chambery, France assets held for sale	(29)		—		(29)		—		Impairment loss on Chambery, France assets held for sale	—		—		(29)		—
Gain on remeasurement of Fiberteq equity investment										Gain on remeasurement of Fiberteq equity investment	130		—		130		—
General corporate expense and other	General corporate expense and other	(44)		(36)		(86)		(71)		General corporate expense and other	(41)		(37)		(127)		(108)
Total corporate, other and eliminations	Total corporate, other and eliminations	(80)		(16)		(97)		(32)		Total corporate, other and eliminations	82		(43)		(15)		(75)
EBIT	EBIT	$	489	$	428	$	931	$	729	EBIT	$	610	$	394	$	1,541	$	1,123

3. INVENTORIES

Inventories consist of the following (in millions):


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Finished goods	Finished goods	$	779	$	672	Finished goods	$	833	$	672
Materials and supplies	Materials and supplies	475		406		Materials and supplies	489		406
Total inventories	Total inventories	$	1,254	$	1,078	Total inventories	$	1,322	$	1,078

Table of Contents

- 1514 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

4. DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to, among other risks, the impact of changes in commodity prices, foreign currency exchange rates, and interest rates in the normal course of business. The Company’s risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes derivative financial instruments to offset a portion of these risks. The Company uses derivative financial instruments only to the extent necessary to hedge identified business risks, and does not enter into such transactions for trading purposes.

The Company generally does not require collateral or other security with counterparties to these financial instruments and is therefore subject to credit risk in the event of nonperformance; however, the Company monitors credit risk and currently does not anticipate nonperformance by other parties. Contracts with counterparties generally contain right of offset provisions. These provisions effectively reduce the Company’s exposure to credit risk in situations where the Company has gain and loss positions outstanding with a single counterparty. It is the Company’s policy to offset on the Consolidated Balance Sheets the amounts recognized for derivative instruments with any cash collateral arising from derivative instruments executed with the same counterparty under a master netting agreement. As of ~~June~~September 30, 2022 and December 31, 2021, the Company did not have any amounts on deposit with any of its counterparties, nor did any of its counterparties have any amounts on deposit with the Company.

Derivative Fair Values

Our derivatives consist of natural gas forward swaps, cross-currency swaps, foreign exchange forward contracts and U.S. treasury rate lock agreements, all of which are over-the-counter and not traded through an exchange. The Company uses widely accepted valuation tools to determine fair value, such as discounting cash flows to calculate a present value for the derivatives. The models use Level 2 inputs, such as forward curves and other commonly quoted observable transactions and prices. The fair value of our derivatives and hedging instruments are all classified as Level 2 investments within the three-tier hierarchy.

The following table presents the fair value of derivatives and hedging instruments and the respective location on the Consolidated Balance Sheets (in millions):


			Fair Value at						Fair Value at
		Location	June 30, 2022		December 31, 2021			Location	September 30, 2022		December 31, 2021
Derivative assets designated as hedging instruments:	Derivative assets designated as hedging instruments:						Derivative assets designated as hedging instruments:
Net investment hedges:	Net investment hedges:						Net investment hedges:
Cross-currency swaps	Cross-currency swaps	Other current assets	$	—	$	5	Cross-currency swaps	Other current assets	$	—	$	5
Cross-currency swaps	Cross-currency swaps	Other non-current assets	$	—	$	1	Cross-currency swaps	Other non-current assets	$	—	$	1

Cash flow hedges:	Cash flow hedges:						Cash flow hedges:
Natural gas forward swaps	Natural gas forward swaps	Other current assets	$	30	$	16	Natural gas forward swaps	Other current assets	$	38	$	16

Treasury interest rate lock	Treasury interest rate lock	Other current assets	$	29	$	11	Treasury interest rate lock	Other current assets	$	32	$	11
Derivative liabilities designated as hedging instruments:	Derivative liabilities designated as hedging instruments:						Derivative liabilities designated as hedging instruments:
Net investment hedges:	Net investment hedges:						Net investment hedges:

Cross-currency swaps	Cross-currency swaps	Other liabilities	$	—	$	1	Cross-currency swaps	Other liabilities	$	—	$	1

Cash flow hedges:	Cash flow hedges:						Cash flow hedges:
Natural gas forward swaps	Natural gas forward swaps	Other current liabilities	$	6	$	5	Natural gas forward swaps	Other current liabilities	$	9	$	5

Foreign exchange forward contracts	Foreign exchange forward contracts	Other current liabilities	$	1	$	2	Foreign exchange forward contracts	Other current liabilities	$	1	$	2
Derivative assets not designated as hedging instruments:	Derivative assets not designated as hedging instruments:						Derivative assets not designated as hedging instruments:

Foreign exchange forward contracts	Foreign exchange forward contracts	Other current assets	$	21	$	1	Foreign exchange forward contracts	Other current assets	$	11	$	1
Treasury interest rate lock							Treasury interest rate lock	Other current assets	$	6	$	—
Derivative liabilities not designated as hedging instruments:	Derivative liabilities not designated as hedging instruments:						Derivative liabilities not designated as hedging instruments:

Foreign exchange forward contracts	Foreign exchange forward contracts	Other current liabilities	$	—	$	6	Foreign exchange forward contracts	Other current liabilities	$	1	$	6

Table of Contents

- 15 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

4. DERIVATIVE FINANCIAL INSTRUMENTS (continued)

Consolidated Statements of Earnings Activity

The following table presents the impact and respective location of derivative activities on the Consolidated Statements of Earnings (in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,
	Location	2022		2021		2022		2021
Derivative activity designated as hedging instruments:
Natural gas cash flow hedges:
Amount of gain reclassified from AOCI (as defined below) into earnings (a)	Cost of sales	$	(21)	$	(4)	$	(47)	$	(6)


Cross-currency swap net investment hedges:
Amount of gain recognized in earnings on derivative amounts excluded from effectiveness testing	Interest expense, net	$	—	$	(1)	$	(1)	$	(4)


Derivative activity not designated as hedging instruments:


Foreign currency:
Amount of gain recognized in earnings (b)	Other income, net	$	(26)	$	(14)	$	(54)	$	(30)
Treasury interest rate lock:
Amount of gain recognized in earnings	Other income, net	$	(6)	$	—	$	(6)	$	—

(a)Accumulated Other Comprehensive Earnings (Deficit) ("AOCI")

(b)Gains related to foreign currency derivatives were substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures, which were also recorded in Other income, net. Please refer to the "Other Derivatives" section below for additional detail.

Consolidated Statements of Comprehensive Earnings Activity

The following table presents the impact of derivative activities on the Consolidated Statements of Comprehensive Earnings (in millions):


		Amount of (Gain) Loss Recognized in Comprehensive Earnings
		Three Months Ended September 30,				Nine Months Ended September 30,
Hedging Type	Derivative Financial Instrument	2022		2021		2022		2021
Net investment hedge	Cross-currency swaps	$	—	$	(5)	$	(5)	$	(9)
Cash flow hedge	Natural gas forward swaps	$	(4)	$	(17)	$	(17)	$	(23)
Cash flow hedge	Treasury interest rate lock	$	(2)	$	—	$	(21)	$	(8)
Cash flow hedge	Foreign exchange forward contracts	$	—	$	—	$	—	$	1

Cash Flow Hedges

The Company uses a combination of derivative financial instruments, which qualify as cash flow hedges, and physical contracts to manage forecasted exposure to electricity and natural gas prices. As of September 30, 2022, the notional amounts of these natural gas forward swaps was 9 million MMBtu (or MMBtu equivalent) based on U.S. and European indices.

Table of Contents

- 16 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

4. DERIVATIVE FINANCIAL INSTRUMENTS (continued)

~~Consolidated Statements of Earnings Activity~~

~~The following table presents the impact and respective location of derivative activities on the Consolidated Statements of Earnings (in millions):~~

Three Months Ended
June 30, Six Months Ended
June 30,

Location 2022 2021 2022 2021
Derivative activity designated as hedging instruments:
Natural gas cash flow hedges:
Amount of gain reclassified from AOCI (as defined below) into earnings (a) Cost of sales $ (16) $ (1) $ (26) $ (2)
Cross-currency swap net investment hedges:
Amount of gain recognized in earnings on derivative amounts excluded from effectiveness testing Interest expense, net $ — $ (2) $ (1) $ (3)
Derivative activity not designated as hedging instruments:
Foreign currency:
Amount of gain recognized in earnings (b) Other expense (income), net $ (23) $ 4 $ (28) $ (16)

~~(a)Accumulated Other Comprehensive Earnings (Deficit) ("AOCI")~~

~~(b)~~Gains related to foreign currency derivatives were substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures, which were also recorded in Other expense (income), net. Please refer to the "Other Derivatives" section below for additional detail.

~~Consolidated Statements of Comprehensive Earnings Activity~~

~~The following table presents the impact of derivative activities on the Consolidated Statements of Comprehensive Earnings (in millions):~~

Amount of (Gain) Loss Recognized in Comprehensive Earnings
Three Months Ended
June 30, Six Months Ended
June 30,
Hedging Type Derivative Financial Instrument 2022 2021 2022 2021
Net investment hedge Cross-currency swaps $ (3) $ 1 $ (5) $ (4)
Cash flow hedge Natural gas forward swaps $ 10 $ (2) $ (13) $ (6)
Cash flow hedge Treasury interest rate lock $ (9) $ 7 $ (19) $ (8)
Cash flow hedge Foreign exchange forward contracts $ — $ 1 $ — $ 1

~~Cash Flow Hedges~~

The Company uses a combination of derivative financial instruments, which qualify as cash flow hedges, and physical contracts to manage forecasted exposure to electricity and natural gas prices. As of June 30, 2022, the notional amounts of these natural gas forward swaps was 9 million MMBtu (or MMBtu equivalent) based on U.S. and European indices.

~~Table of Contents~~

~~- 17 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~4. DERIVATIVE FINANCIAL INSTRUMENTS (continued)~~

In March 2020, the Company entered into a $175 million forward U.S. Treasury rate lock agreement to manage the U.S. Treasury portion of its interest rate risk associated with the anticipated issuance of certain 10-year fixed rate senior notes before the end of 2022. The Company intends to cash settle this agreement upon a future issuance of certain senior notes thereby effectively locking in the U.S. Treasury fixed interest rate in effect at the time the agreement was initiated. The locked fixed rate of this agreement is 0.994%.notes. The Company has designated this outstanding forward U.S. Treasury rate lock agreement, which expires on December 15, 2022, as a cash flow hedge. The locked fixed rate of this agreement is 0.994%. In September 2022, the Company de-designated the instrument due to a change in the forecasted issuance of certain senior notes and re-designated the effective portion of the instrument which resulted in the recognition of a $6 million gain in the third quarter 2022.

In June 2021, the Company entered into five currency forward contracts with unrelated counterparties totaling $23 million to mitigate against unwanted or anticipated moves in the European Euro exchange rate against the U.S. Dollar, pertaining to forecasted Euro denominated invoices for capital expenditures. The Company has designated each of the individual contracts as cash flow hedges, with the last hedge maturing no later than December 2023.

Net Investment Hedges

The Company has translation exposure resulting from translating the financial statements of foreign subsidiaries into U.S. Dollars, which is recognized in Currency translation adjustment (a component of AOCI). In the second quarter of 2022, the Company terminated the remaining cross-currency forward contracts related to the hedged portions of the net investment in foreign subsidiaries, resulting in cash proceeds of $11 million.

Other Derivatives

The Company uses forward currency exchange contracts to manage existing exposures to foreign exchange risk related to assets and liabilities recorded on the Consolidated Balance Sheets. As of ~~June~~September 30, 2022, the Company had notional amounts of ~~$705~~$551 million for non-designated derivative financial instruments related to foreign currency exposures in U.S. Dollars primarily related to European Euro, Indian Rupee, Brazilian Real, South Korean Won, Chinese Yuan, ~~European Euro,~~and Hong Kong ~~Dollar, Indian Rupee, and South Korean Won.~~Dollar. In addition, the Company had notional amounts of $7$19 million for non-designated derivative financial instruments related to foreign currency exposures in European Euro primarily related to the ~~Norwegian Krone and~~Russian Ruble, Polish Zł~~oty.~~oty, and Norwegian Krone.

Table of Contents

- 1817 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The Company tests goodwill and indefinite-lived intangible assets for impairment during the fourth quarter of each year, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of a reporting unit below its carrying value.

No testing was deemed necessary in the first ~~six~~nine months of 2022. The changes in the net carrying value of goodwill by segment are as follows (in millions):


		Composites		Insulation		Roofing		Total			Composites		Insulation		Roofing		Total
Gross carrying amount at December 31, 2021	Gross carrying amount at December 31, 2021	$	75	$	1,481	$	397	$	1,953	Gross carrying amount at December 31, 2021	$	75	$	1,481	$	397	$	1,953

Acquisitions (see Note 7)		112		—		—		112
Acquisitions and Divestitures										Acquisitions and Divestitures	356		60		—		416

Foreign Currency Translation	Foreign Currency Translation	(3)		(47)		(4)		(54)		Foreign Currency Translation	(3)		(64)		(7)		(74)
Gross carrying amount at June 30, 2022		184		1,434		393		2,011
Gross carrying amount at September 30, 2022										Gross carrying amount at September 30, 2022	428		1,477		390		2,295

Accumulated impairment losses at December 31, 2021	Accumulated impairment losses at December 31, 2021	—		(963)		—		(963)		Accumulated impairment losses at December 31, 2021	—		(963)		—		(963)
Foreign Currency Translation	Foreign Currency Translation	—		31		—		31		Foreign Currency Translation	—		35		—		35
Accumulated impairment losses at June 30, 2022		—		(932)		—		(932)
Accumulated impairment losses at September 30, 2022										Accumulated impairment losses at September 30, 2022	—		(928)		—		(928)

Balance, net of impairment, at June 30, 2022		$	184	$	502	$	393	$	1,079
Balance, net of impairment, at September 30, 2022										Balance, net of impairment, at September 30, 2022	$	428	$	549	$	390	$	1,367

Other Intangible Assets

The Company amortizes the cost of other intangible assets over their estimated useful lives which, individually, range up to 45 years. The Company's future cash flows are not materially impacted by its ability to extend or renew agreements related to its amortizable intangible assets.

There is one trade name used by our European building and technical insulation business within our Insulation segment that is at an increased risk of impairment. If assumptions or estimates with respect to the Company's future performance vary from what is expected, including those assumptions relating to interest rates and economic and geopolitical uncertainty in Europe, future impairment analyses could result in a decline in fair value that may trigger a future impairment charge. The affected asset had a carrying value of $139 million as of September 30, 2022.

Other intangible assets consist of the following (in millions):


		June 30, 2022						December 31, 2021							September 30, 2022						December 31, 2021
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and trade names	Trademarks and trade names	$	1,090	$	—	$	1,090	$	1,096	$	—	$	1,096	Trademarks and trade names	$	1,085	$	—	$	1,085	$	1,096	$	—	$	1,096
Customer relationships	Customer relationships	560		(226)		334		559		(218)		341		Customer relationships	629		(230)		399		559		(218)		341
Technology	Technology	316		(175)		141		298		(168)		130		Technology	323		(179)		144		298		(168)		130
Other (a)	Other (a)	54		(5)		49		53		(3)		50		Other (a)	53		(4)		49		53		(3)		50
Total other intangible assets	Total other intangible assets	$	2,020	$	(406)	$	1,614	$	2,006	$	(389)	$	1,617	Total other intangible assets	$	2,090	$	(413)	$	1,677	$	2,006	$	(389)	$	1,617

(a)Other primarily includes emissions and quarry rights.

Amortization expense for intangible assets for the three and six months ended June 30, 2022 was $12 million and $23 million, respectively. Amortization expense for intangible assets for the three and six months ended June 30, 2021 was $13 million and $25 million, respectively. Amortization expense for intangible assets is estimated to be $24 million for the remainder of 2022.

Table of Contents

- 1918 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

5. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

Amortization expense for intangible assets for the three and nine months ended September 30, 2022 was $14 million and $37 million, respectively. Amortization expense for intangible assets for the three and nine months ended September 30, 2021 was $12 million and $37 million, respectively. Amortization expense for intangible assets is estimated to be $17 million for the remainder of 2022.

The estimated amortization expense for intangible assets for the next five fiscal years ended December 31 is as follows (in millions):


Period	Period	Amortization		Period	Amortization
2023	2023	$	45	2023	$	66
2024	2024	$	42	2024	$	63
2025	2025	$	42	2025	$	56
2026	2026	$	40	2026	$	40
2027	2027	$	31	2027	$	32

6. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following (in millions):


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Land	Land	$	211	$	219	Land	$	205	$	219
Buildings and leasehold improvements	Buildings and leasehold improvements	1,231		1,265		Buildings and leasehold improvements	1,225		1,265
Machinery and equipment	Machinery and equipment	5,259		5,343		Machinery and equipment	5,240		5,343
Construction in progress	Construction in progress	356		387		Construction in progress	387		387
		7,057		7,214			7,057		7,214
Accumulated depreciation	Accumulated depreciation	(3,373)		(3,341)		Accumulated depreciation	(3,397)		(3,341)
Property, plant and equipment, net	Property, plant and equipment, net	$	3,684	$	3,873	Property, plant and equipment, net	$	3,660	$	3,873

Machinery and equipment includes certain precious metals used in our production tooling, which comprise approximately 10% of total machinery and equipment as of both ~~June~~September 30, 2022 and December 31, 2021. Precious metals used in our production tooling are depleted as they are consumed during the production process, which typically represents an annual expense of about 3% of the outstanding carrying value.

Our production tooling needs in our Composites segment are changing in response to economic and technological factors. As a result, we exchanged certain precious metals used in production tooling for certain other precious metals to be used in production tooling. These non-cash investing activities are not included in Net cash flow used for investing activities in the Consolidated Statements of Cash Flows. During the three and ~~six~~nine months ended ~~June~~September 30, 2022, these non-cash exchanges resulted in a net increase to Machinery and equipment of $7 million and ~~$11~~$18 million, respectively, and gains totaling $7 million and ~~$11~~$18 million, respectively. During the three and ~~six~~nine months ended ~~June~~September 30, 2021, these non-cash exchanges resulted in a net increase to Machinery and equipment of ~~$21~~less than $1 million and $41 million, respectively, and gains totaling ~~$21~~less than $1 million and $41 million, respectively. The gains are included in Other ~~expense (income),~~income, net on the Consolidated Statements of Earnings and are reflected in the Corporate, Other and Eliminations reporting category. We do not expect these exchanges to materially impact our current or future capital expenditure requirements or rate of depletion.

Table of Contents

- 2019 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

7. ACQUISITIONS

On May 23, 2022, Owens Corning and Pultron Composites ("Pultron") formed a joint venture ("JV") to manufacture and sell fiberglass rebar. The Company contributed approximately $47 million to acquire a 65.5% controlling interest and has established a redeemable noncontrolling interest related to Pultron, the minority holder. The JV expands Owens Corning’s capability to produce high-value material solutions by combining the Company’s glass-fiber material technology, channel access and extensive industry experience with Pultron’s manufacturing expertise and process efficiency. The fully consolidated operating results and a preliminary purchase price allocation for the JV have been included in the Company’s Composites segment within the Consolidated Financial Statements since the date of the formation of the JV. Subsequent to the JV formation, the JV acquired assets and technology from Pultron for approximately $65 ~~million~~. million. The purchase price allocation is preliminary and resulted in the recognition of $15 million in intangible assets, consisting of technology, with an estimated weighted average life of 15 years and $42 million in goodwill. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition. The pro-forma effect of this acquisition on revenues and earnings was not material.

On June 1, 2022, the Company acquired all of the outstanding assets of WearDeck®, a premium producer of composite weather-resistant decking for commercial and residential applications, for approximately $133 million, net of cash acquired. The acquisition advances the Composites business growth strategy to focus on high-value material solutions within the building and construction industry. The operating results and a preliminary purchase price allocation for WearDeck® have been included in the Composites segment within the Consolidated Financial Statements since the date of the acquisition. The purchase price allocation is preliminary and resulted in the recognition of $38 million in intangible assets and ~~$70~~$68 million in goodwill. The intangible assets consist of indefinite-lived trademarks of $7 million, technology of $10 million with an estimated weighted average life of 11 years and customer relationships of $21 million with an estimated weighted average life of 15 years. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition. The pro-forma effect of this acquisition on revenues and earnings was not material.

On ~~June 15,~~August 1, 2022, ~~Owens Corning signed an agreement to acquire~~the Company acquired Natural Polymers, LLC ("Natural Polymers"), an innovative manufacturer of spray polyurethane foam insulation for building and construction ~~applications.~~applications for $111 million, net of cash acquired. The ~~transaction has cleared regulatory approvals~~acquisition advances the Owens Corning strategy to strengthen the Company's core building and ~~other customary conditions~~construction products and ~~is anticipated to close~~expand its addressable markets into higher-growth segments. The operating results and a preliminary purchase price allocation for Natural Polymers have been included in the ~~third quarter~~Insulation segment within the Consolidated Financial Statements since the date of ~~2022.~~the acquisition. The purchase price allocation is preliminary and resulted in the recognition of $44 million in intangible assets and $60 million in goodwill. The intangible assets consist of indefinite-lived trademarks of $5 million, technology of $12 million with an estimated weighted average life of 6 years and customer relationships of $27 million with an estimated weighted average life of 17 years. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition.The pro-forma effect of this acquisition on revenues and earnings was not material.

On ~~July 15,~~September 1, 2022, ~~Owens Corning entered into a legally binding agreement to acquire~~the Company acquired the remaining 50% interest in Fiberteq, ~~LLC.~~LLC ("Fiberteq"), the joint venture between Owens Corning and IKO Industries, Ltd, which produces high-quality wet-formed fiberglass mat for roofing applications for $140 million, net of cash acquired. The acquisition ~~is anticipated~~advances the Composites strategy to ~~close~~focus on high-value material solutions and expands Owens Corning's capacity to produce non-woven mat. The Company's 50% interest in Fiberteq was accounted for as an equity-method investment and had a carrying value of $17 million at the acquisition date. The Company used the discounted cash flow method to remeasure the previously held equity method investment to its fair value of $147 million, resulting in the ~~third quarter~~recognition of ~~2022, subject~~a gain of $130 million, which is recorded in Gain on equity method investment on the Consolidated Statements of Earnings. The operating results and a preliminary purchase price allocation for Fiberteq have been included in the Composites segment within the Consolidated Financial Statements since the date of the acquisition. The purchase price allocation is preliminary and resulted in the recognition of $62 million in intangible assets, which primarily consists of customer relationships with an estimated weighted average life of 3 years, a $62 million unfavorable contract liability and $247 million in goodwill. The factors contributing to ~~customary closing conditions.~~the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition. The pro-forma effect of this acquisition on revenues and earnings was not material.

Table of Contents

- 20 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

8. ~~ASSETS HELD FOR SALE~~DIVESTITURES

On ~~May 16,~~July 1, 2022, the Company ~~exercised the put option for~~finalized the sale of the European portion of the dry-use chopped strands ("DUCS") product line located in Chambéry, France, within the Composite's segment. ~~The~~As a result of this sale, the Company received $75 million, net of cash sold, in consideration. In the second quarter of 2022, the Company recorded a pre-tax charge of $29 million in Other ~~expense (income),~~income, net on the Consolidated Statements of Earnings to reflect fair value less cost to sell of these assets. ~~Assets held for sale as of June 30, 2022 were $81 million and primarily consisted of property, plant and equipment.~~

On ~~July 1,~~September 13, 2022, the Company ~~closed on~~entered into an agreement to sell the ~~sale~~Russian operations. The regulatory approval process, which is not considered perfunctory, is ongoing and could result in significant changes to key terms of the ~~European portion~~agreement. As a result of ~~the DUCS product line located in Chambéry, France.~~this uncertainty, management determined assets held for sale treatment had not been triggered as of September 30, 2022. Net sales from our Russian operations and its associated assets represent approximately 1% of annual consolidated net sales and consolidated assets, respectively.

~~Table of Contents~~

~~- 21 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

9. WARRANTIES

The Company records a liability for warranty obligations at the date the related products are sold. Adjustments are made as new information becomes available. Please refer to Note 1 of our 2021 Form 10-K for information about our separately-priced extended warranty contracts. A reconciliation of the warranty liability is as follows (in millions):


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Beginning balance	Beginning balance	$	81	$	72	Beginning balance	$	81	$	72
Amounts accrued for current year	Amounts accrued for current year	10		11		Amounts accrued for current year	16		17
Settlements of warranty claims	Settlements of warranty claims	(5)		(7)		Settlements of warranty claims	(9)		(10)
Ending balance	Ending balance	$	86	$	76	Ending balance	$	88	$	79

Table of Contents

- 21 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

10. RESTRUCTURING, ACQUISITION AND DIVESTITURE-RELATED COSTS

The Company may incur restructuring, transaction and integration costs related to acquisitions and divestitures, and may incur restructuring and other exit costs in connection with its global cost reduction, productivity initiatives and the Company's growth strategy.

~~ACQUISTION-RELATED~~ACQUISITION AND DIVESTITURE-RELATED COSTS

InDuring the ~~second quarter~~first nine months of 2022, the Company incurred $3$5 million of transaction costs related to its announced ~~acquisitions.~~acquisitions and divestitures. Please refer to Note 7 and Note 8 of the Consolidated Financial Statements for further information regarding these ~~acquisitions.~~actions.

RESTRUCTURING RELATED-COSTS

Exit of DUCS Product Line

~~In May~~On July 1, 2022, the Company ~~exercised the put option for~~finalized the sale of the European portion of the ~~DUCS~~dry-use chopped strands ("DUCS") product line located in Chambéry, France, within the Composite's segment. ~~As a result, the~~The Company recorded a pre-tax charge of $29 million in Other ~~expense (income),~~income, net on the Consolidated Statements of Earnings in the second quarter to reflect the fair value less cost to sell of the assets. Please refer to Note 8 of the Consolidated Financial Statements for further information. The Company also took decisions to convert the DUCS manufacturing facilities located in Anderson, South Carolina and Kimchon, Korea to produce other glass fiber products needed to support our growth strategy in building and construction applications. As a result, the Company recorded $2$3 million ~~of non-cash charges~~associated with these actions in ~~the second quarter, primarily related to accelerated depreciation for equipment at the Anderson, South Carolina facility and $1 million of cash charges primarily related to retention.~~2022. The Company does not expect to recognize significant incremental costs related to these actions.

Roofing Restructuring Actions

In December 2021, the Company took actions to restructure operations within the Roofing segment's components product line by relocating production assets from China to India which will allow the business to optimize its manufacturing network and support a tariff mitigation strategy. During the first ~~six~~nine months of 2022, the Company recorded ~~less than $1~~$2 million of charges primarily related to ~~accelerated depreciation and severance.~~other exit costs. The Company expects to recognize $7$4 million of incremental charges related to these ~~actions in 2022.~~actions.

~~Table of Contents~~

~~- 22 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~10. RESTRUCTURING, ACQUISITION AND DIVESTITURE-RELATED COSTS (continued)~~

Santa Clara Insulation Site

During the third quarter of 2021, the Company entered into a purchase and sale agreement for the Company's Insulation site in Santa Clara, California. The Company expects to continue operations at this facility through early fourth quarter of 2022 and complete the transaction in the first quarter of 2023. This action is part of the Company's on-going strategy to operate a flexible, cost-efficient manufacturing network and geographically locate its assets to better service its customers. Cumulative cash pre-tax charges associated with the transaction are expected to be in the range of $30 million to $40 million, primarily related to severance and one-time employee termination benefits, demolition costs, and other closing costs. In addition, cumulative non-cash charges are expected to be in the range of $75 million to $85 million, primarily consisting of accelerated depreciation of property, plant and equipment and derecognition of the carrying value of land, which will offset the gross proceeds at closing.

During the first ~~six~~nine months of 2022, the Company recorded ~~$13~~$22 million of charges, primarily related to accelerated depreciation, associated with this agreement.

2020 Insulation Restructuring Actions

During the fourth quarter of 2020, the Company took actions to avoid future capital outlays and reduce costs in its global Insulation segment, mainly through decisions to close certain manufacturing facilities in Shanghai, China and Fresno, Texas, and optimize a facility in Parainen, Finland. During the first ~~six~~nine months of 2022, the Company recorded $1$2 million of charges primarily related to accelerated depreciation. The Company does not expect to recognize significant incremental costs related to these actions.

In the first quarter of 2022, the Company recognized a gain of $27 million in Other ~~expense (income),~~income, net on the Consolidated Statements of Earnings, associated with the sale of the manufacturing facility in Shanghai, China.

Table of Contents

- 22 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

10. RESTRUCTURING, ACQUISITION AND DIVESTITURE-RELATED COSTS (continued)

Acquisition-Related Restructuring

Following the acquisitions of Paroc Group Oy ("Paroc") and Pittsburgh Corning Corporation and Pittsburgh Corning Europe NV (collectively, "Pittsburgh Corning") into the Company's Insulation segment, the Company took actions to realize expected synergies from the newly acquired operations. The Company does not expect to recognize significant incremental costs related to these actions.

Consolidated Statements of Earnings Classification

The following table presents the impact and respective location of total restructuring, acquisition and divestiture-related costs on the Consolidated Statements of Earnings, which are included within Corporate, Other and Eliminations (in millions):


			Three Months Ended June 30,				Six Months Ended June 30,						Three Months Ended September 30,				Nine Months Ended September 30,
Type of cost	Type of cost	Location	2022		2021		2022		2021		Type of cost	Location	2022		2021		2022		2021
Accelerated depreciation	Accelerated depreciation	Cost of sales	$	7	1		$	13	$	2	Accelerated depreciation	Cost of sales	$	9	$	6	$	22	$	8

Other exit costs											Other exit costs	Cost of sales	1		—		4		—
Other exit costs	Other exit costs	Marketing and administrative expenses	3		1		3		1		Other exit costs	Marketing and administrative expenses	—		—		—		1
Severance	Severance	Other expense (income), net	1		(2)		1		(2)		Severance	Other income, net	—		12		1		10
Other exit gains/costs		Other expense (income), net	29		1		2		1
Other exit costs (gains)											Other exit costs (gains)	Other income, net	2		(15)		4		(14)
Acquisition-related costs	Acquisition-related costs	Marketing and administrative expenses	3		—		3		—		Acquisition-related costs	Gain on equity method investment	(130)		—		(130)		—

Total restructuring, acquisition and divestiture-related costs			$	43	$	1	$	22	$	2
Acquisition-related costs											Acquisition-related costs	Marketing and administrative expenses	2		—		5		—
Other exit costs											Other exit costs	Non-operating income	—		2		—		2
Total restructuring, acquisition and divestiture-related (gains) costs											Total restructuring, acquisition and divestiture-related (gains) costs		$	(116)	$	5	$	(94)	$	7

~~Table of Contents~~

~~- 23 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~10. RESTRUCTURING, ACQUISITION AND DIVESTITURE-RELATED COSTS (continued)~~

Summary of Unpaid Liabilities

The following table summarizes the status of the unpaid liabilities from the Company's restructuring activities (in millions):


		Exit of DUCS Product Line		Roofing Components Restructuring Actions		Santa Clara Insulation Site		2020 Insulation Restructuring Actions		Acquisition Related Restructuring			Exit DUCS Product Line		Roofing Components Restructuring Actions		Santa Clara Insulation Site		2020 Insulation Restructuring Actions		Acquisition- Related Restructuring
Balance at December 31, 2021	Balance at December 31, 2021	$	—	$	1	$	13	$	1	$	5	Balance at December 31, 2021	$	—	$	1	$	13	$	1	$	5
Restructuring costs	Restructuring costs	3		—		13		1		—		Restructuring costs	3		2		22		2		—
Payments	Payments	—		—		(4)		(1)		(2)		Payments	—		(1)		(4)		(1)		(2)
Accelerated depreciation and other non-cash items	Accelerated depreciation and other non-cash items	(2)		—		(10)		(1)		—		Accelerated depreciation and other non-cash items	(2)		(2)		(19)		(1)		—

Balance at June 30, 2022		$	1	$	1	$	12	$	—	3
Balance at September 30, 2022												Balance at September 30, 2022	$	1	$	—	$	12	$	1	3
Cumulative charges incurred	Cumulative charges incurred	$	3	$	5	$	38	$	28	$	27	Cumulative charges incurred	$	3	$	7	$	47	$	29	$	27

As of ~~June~~September 30, 2022, the remaining liability balance is comprised of ~~$17~~$16 million of severance, ~~inclusive of $1 million of non-current severance and $16 million of severance~~which the Company expects to pay over the next twelve months.

Table of Contents

- 2423 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

11. DEBT

Details of the Company’s outstanding long-term debt, as well as the fair values, are as follows (in millions):


		June 30, 2022				December 31, 2021				September 30, 2022						December 31, 2021
		Carrying Value		Fair Value		Carrying Value		Fair Value				Carrying Value		Fair Value			Carrying Value		Fair Value
4.200% senior notes, net of discount and financing fees, due 2024	4.200% senior notes, net of discount and financing fees, due 2024	$	397	100	%	$	397	107	%		4.200% senior notes, net of discount and financing fees, due 2024	$	398	98	%		$	397	107	%
3.400% senior notes, net of discount and financing fees, due 2026	3.400% senior notes, net of discount and financing fees, due 2026	397		96	%	397		106	%		3.400% senior notes, net of discount and financing fees, due 2026	397		92	%		397		106	%
3.950% senior notes, net of discount and financing fees, due 2029	3.950% senior notes, net of discount and financing fees, due 2029	446		93	%	446		110	%		3.950% senior notes, net of discount and financing fees, due 2029	446		89	%		446		110	%
3.875% senior notes, net of discount and financing fees, due 2030	3.875% senior notes, net of discount and financing fees, due 2030	298		92	%	297		109	%		3.875% senior notes, net of discount and financing fees, due 2030	298		87	%		297		109	%
7.000% senior notes, net of discount and financing fees, due 2036	7.000% senior notes, net of discount and financing fees, due 2036	368		110	%	368		141	%		7.000% senior notes, net of discount and financing fees, due 2036	368		103	%		368		141	%
4.300% senior notes, net of discount and financing fees, due 2047	4.300% senior notes, net of discount and financing fees, due 2047	589		82	%	589		115	%		4.300% senior notes, net of discount and financing fees, due 2047	589		75	%		589		115	%
4.400% senior notes, net of discount and financing fees, due 2048	4.400% senior notes, net of discount and financing fees, due 2048	390		83	%	390		118	%		4.400% senior notes, net of discount and financing fees, due 2048	390		75	%		390		118	%

Various finance leases, due through 2050 (a)	Various finance leases, due through 2050 (a)	127		100	%	99		100	%		Various finance leases, due through 2050 (a)	125		100	%		99		100	%
Other	Other	2		N/A		2		N/A			Other	2		N/A			2		N/A
Total long-term debt	Total long-term debt	3,014		N/A		2,985		N/A			Total long-term debt	3,013		N/A			2,985		N/A
Less – current portion (a)	Less – current portion (a)	25		100	%	25		100	%		Less – current portion (a)	25		100	%		25		100	%
Long-term debt, net of current portion	Long-term debt, net of current portion	$	2,989	N/A		$	2,960	N/A			Long-term debt, net of current portion	$	2,988	N/A			$	2,960	N/A

(a)The Company determined that the book value of the above noted long-term debt instruments approximates fair value.

The fair values of the Company's outstanding long-term debt instruments were estimated using market observable inputs, including quoted prices in active markets, market indices and interest rate measurements. Within the hierarchy of fair value measurements, these are Level 2 fair values.

Senior Notes

The Company issued $300 million of 2030 senior notes on May 12, 2020. Interest on the notes is payable semiannually in arrears on June 1 and December 1 each year, beginning on December 1, 2020. The proceeds from these notes were used for general corporate purposes.

The Company issued $450 million of 2029 senior notes on August 12, 2019. Interest on the notes is payable semiannually in arrears on February 15 and August 15 each year, beginning on February 15, 2020. The proceeds from these notes were used to repay $416 million of our 2022 senior notes and $34 million of our 2036 senior notes.

The Company issued $400 million of 2048 senior notes on January 25, 2018. Interest on the notes is payable semiannually in arrears on January 30 and July 30 each year, beginning on July 30, 2018. The proceeds from these notes were used, along with borrowings on a $600 million term loan commitment and borrowings on the Receivables Securitization Facility (as defined below), to fund the purchase of Paroc in the first quarter of 2018.

The Company issued $600 million of 2047 senior notes on June 26, 2017. Interest on the notes is payable semiannually in arrears on January 15 and July 15 each year, beginning on January 15, 2018. A portion of the proceeds from these notes was used to fund the purchase of Pittsburgh Corning in 2017 and for general corporate purposes. The remaining proceeds were used to repay $144 million of our 2019 senior notes and $140 million of our 2036 senior notes.

The Company issued $400 million of 2026 senior notes on August 8, 2016. Interest on the notes is payable semiannually in arrears on February 15 and August 15 each year, beginning on February 15, 2017. A portion of the proceeds from these notes was used to repay $158 million of our 2016 senior notes. The remaining proceeds were used to pay down portions of our Receivables Securitization Facility and for general corporate purposes.

Table of Contents

- 2524 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

11. DEBT (continued)

The Company issued $400 million of 2024 senior notes on November 12, 2014. Interest on the notes is payable semiannually in arrears on June 1 and December 1 each year, beginning on June 1, 2015. A portion of the proceeds from these notes was used to repay $242 million of our 2016 senior notes and $105 million of our 2019 senior notes. The remaining proceeds were used to pay down our Senior Revolving Credit Facility (as defined below), finance general working capital needs, and for general corporate purposes.

On October 31, 2006, the Company issued $550 million of 2036 senior notes. The proceeds of these notes were used to pay certain unsecured and administrative claims, finance general working capital needs and for general corporate purposes.

Collectively, the senior notes above are referred to as the “Senior Notes.” The Senior Notes are general unsecured obligations of the Company and rank pari passu with all existing and future senior unsecured indebtedness of the Company.

The Company has the option to redeem all or part of the Senior Notes at any time at a “make-whole” redemption price. The Company is subject to certain covenants in connection with the issuance of the Senior Notes that it believes are usual and customary. The Company was in compliance with these covenants as of ~~June~~September 30, 2022.

Senior Revolving Credit Facility

The Company has an $800 million senior revolving credit facility (the "Senior Revolving Credit Facility") with a maturity date in July 2026 that includes both borrowings and letters of credit. Borrowings under the Senior Revolving Credit Facility may be used for general corporate purposes and working capital. The Company has the discretion to borrow under multiple options, which provide for varying terms and interest rates including the United States prime rate, federal funds rate plus a spread or LIBOR plus a spread. The current agreement also includes fallback language related to a benchmark reference rate replacement, when a LIBOR transition occurs.

In June 2022, the Senior Revolving Credit Facility was amended to allow the Company to continue to operate in comprehensively sanctioned countries so long as it is not violating any sanctions.

The Senior Revolving Credit Facility contains various covenants, including a maximum allowed leverage ratio, that the Company believes are usual and customary for a senior unsecured credit agreement. The Company was in compliance with these covenants as of ~~June~~September 30, 2022. Please refer to the Credit Facility Utilization section below for liquidity information as of ~~June~~September 30, 2022.

Receivables Securitization Facility

The Company has a Receivables Purchase Agreement ~~(RPA)~~("RPA") that is accounted for as secured borrowings in accordance with ASC 860, "Accounting for Transfers and Servicing." Owens Corning Sales, LLC and Owens Corning Receivables LLC, each a subsidiary of the Company, have a $280 million RPA with certain financial institutions. The Company has the ability to borrow at the lenders' cost of funds, which approximates A-1/P-1 commercial paper rates vs. LIBOR, plus a fixed spread. The current agreement also includes fallback language related to a benchmark reference rate replacement, when a LIBOR transition occurs. The RPA has been amended from time to time, with a maturity date in April 2024.

The RPA contains various covenants, including a maximum allowed leverage ratio that the Company believes are usual and customary for a securitization facility. The Company was in compliance with these covenants as of ~~June~~September 30, 2022. Please refer to the Credit Facility Utilization section below for liquidity information as of ~~June~~September 30, 2022.

Owens Corning Receivables LLC’s sole business consists of the purchase or acceptance through capital contributions of trade receivables and related rights from Owens Corning Sales, LLC and the subsequent retransfer of or granting of a security interest in such trade receivables and related rights to certain purchasers who are party to the RPA. Owens Corning Receivables LLC is a separate legal entity with its own separate creditors who will be entitled, upon its liquidation, to be satisfied out of Owens Corning Receivables LLC’s assets prior to any assets or value in Owens Corning Receivables LLC becoming available to Owens Corning Receivables LLC’s equity holders. The assets of Owens Corning Receivables LLC are not available to pay creditors of the Company or any other affiliates of the Company or Owens Corning Sales, LLC.

Table of Contents

- 2625 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

11. DEBT (continued)

Credit Facility Utilization

The following table shows how the Company utilized its primary sources of liquidity (in millions):


		Balance at June 30, 2022					Balance at September 30, 2022
		Senior Revolving Credit Facility		Receivables Securitization Facility			Senior Revolving Credit Facility		Receivables Securitization Facility
Facility size or borrowing limit	Facility size or borrowing limit	$	800	$	280	Facility size or borrowing limit	$	800	$	280
Collateral capacity limitation on availability	Collateral capacity limitation on availability	N/A		—		Collateral capacity limitation on availability	N/A		—
Outstanding borrowings	Outstanding borrowings	—		—		Outstanding borrowings	—		—
Outstanding letters of credit	Outstanding letters of credit	4		1		Outstanding letters of credit	4		1
Availability on facility	Availability on facility	$	796	$	279	Availability on facility	$	796	$	279

Short-Term Debt

Short-term borrowings were less than $1 million and $6 million as of ~~June~~September 30, 2022 and December 31, 2021, respectively. The short-term borrowings consisted of various operating lines of credit. The weighted average interest rate on all short-term borrowings was approximately ~~5.7%~~1.6% and 1.5% as of ~~June~~September 30, 2022 and December 31, 2021, respectively.

Table of Contents

- 2726 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

12. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

Pension Plans

The Company sponsors defined benefit pension plans. Under the plans, pension benefits are based on an employees' years of service and, for certain categories of employees, qualifying compensation. Company contributions to these pension plans are determined by an independent actuary to meet or exceed minimum funding requirements. In our U.S. plans, the unrecognized cost of any retroactive amendments and actuarial gains and losses are amortized over the average remaining life expectancy of the inactive participants as substantially all of the plan participants are inactive. In our non-U.S. plans, the unrecognized cost of any retroactive amendments and actuarial gains and losses are amortized over the average future service period of plan participants expected to receive benefits.

The following table provides information regarding pension expense recognized (in millions):


		Three Months Ended June 30,													Three Months Ended September 30,
		2022						2021							2022						2021
		U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total			U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Components of Net Periodic Pension Cost	Components of Net Periodic Pension Cost													Components of Net Periodic Pension Cost
Service cost	Service cost	$	1	$	1	$	2	$	2	$	1	$	3	Service cost	$	3	$	1	$	4	$	1	$	1	$	2
Interest cost	Interest cost	6		2		8		5		2		7		Interest cost	6		3		9		6		3		9
Expected return on plan assets	Expected return on plan assets	(9)		(4)		(13)		(9)		(4)		(13)		Expected return on plan assets	(9)		(4)		(13)		(9)		(5)		(14)

Amortization of actuarial loss	Amortization of actuarial loss	3		1		4		3		1		4		Amortization of actuarial loss	2		—		2		3		1		4

Contractual termination benefit														Contractual termination benefit	—		—		—		2		—		2

Net periodic pension cost	Net periodic pension cost	$	1	$	—	$	1	$	1	$	—	$	1	Net periodic pension cost	$	2	$	—	$	2	$	3	$	—	$	3


		Six Months Ended June 30,													Nine Months Ended September 30,
		2022						2021							2022						2021
		U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total			U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Components of Net Periodic Pension Cost	Components of Net Periodic Pension Cost													Components of Net Periodic Pension Cost
Service cost	Service cost	$	2	$	2	$	4	$	3	$	3	$	6	Service cost	$	5	$	3	$	8	$	4	$	4	$	8
Interest cost	Interest cost	12		5		17		11		4		15		Interest cost	18		8		26		17		7		24
Expected return on plan assets	Expected return on plan assets	(18)		(8)		(26)		(18)		(9)		(27)		Expected return on plan assets	(27)		(12)		(39)		(27)		(14)		(41)

Amortization of actuarial loss	Amortization of actuarial loss	6		1		7		6		2		8		Amortization of actuarial loss	8		1		9		9		3		12

Contractual termination benefit														Contractual termination benefit	—		—		—		2		—		2

Net periodic pension cost	Net periodic pension cost	$	2	$	—	$	2	$	2	$	—	$	2	Net periodic pension cost	$	4	$	—	$	4	$	5	$	—	$	5

The Company does not expect to contribute to the U.S. pension plans during 2022. The Company expects to contribute ~~$25~~$20 million in cash to non-U.S. plans during 2022. The Company made cash contributions of $2$5 million to the non-U.S. plans during the ~~six~~nine months ended ~~June~~September 30, 2022.

Postemployment and Postretirement Benefits Other than Pensions ("OPEB")

The Company maintains healthcare and life insurance benefit plans for certain retired employees and their dependents. The health care plans in the United States are non-funded and pay either (1) stated percentages of covered medically necessary expenses, after subtracting payments by Medicare or other providers and after stated deductibles have been met, or (2) fixed amounts of medical expense reimbursement.

Table of Contents

- 2827 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

12. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (continued)

The following table provides the components of net periodic benefit cost for aggregated U.S. and non-U.S. plans for the periods indicated (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Components of Net Periodic Benefit Cost	Components of Net Periodic Benefit Cost									Components of Net Periodic Benefit Cost
Service cost	Service cost	$	—	$	1	$	1	$	1	Service cost	$	—	$	—	$	1	$	1
Interest cost	Interest cost	1		1		2		2		Interest cost	1		1		3		3
Amortization of prior service credit	Amortization of prior service credit	—		(1)		—		(1)		Amortization of prior service credit	—		—		—		(1)
Amortization of actuarial gain	Amortization of actuarial gain	(2)		(2)		(4)		(4)		Amortization of actuarial gain	(2)		(2)		(6)		(6)
Net periodic benefit income	Net periodic benefit income	$	(1)	$	(1)	$	(1)	$	(2)	Net periodic benefit income	$	(1)	$	(1)	$	(2)	$	(3)

Table of Contents

- 2928 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

13. CONTINGENT LIABILITIES AND OTHER MATTERS

The Company may be involved in various legal and regulatory proceedings relating to employment, antitrust, tax, product liability, environmental, contracts, intellectual property and other matters (collectively, “Proceedings”). The Company regularly reviews the status of such Proceedings along with legal counsel. Liabilities for such Proceedings are recorded when it is probable that the liability has been incurred and when the amount of the liability can be reasonably estimated. Liabilities are adjusted when additional information becomes available. Management believes that the amount of any reasonably possible losses in excess of any amounts accrued, if any, with respect to such Proceedings or any other known claim, including the matters described below under the caption Environmental Matters (the “Environmental Matters”), are not material to the Company’s financial statements. Management believes that the ultimate disposition of the Proceedings and the Environmental Matters will not have a material adverse effect on the Company’s financial condition. While the likelihood is remote, the disposition of the Proceedings and Environmental Matters could have a material impact on the results of operations, cash flows or liquidity in any given reporting period.

Litigation and Regulatory Proceedings

The Company is involved in litigation and regulatory proceedings from time to time in the regular course of its business. The Company believes that adequate provisions for resolution of all contingencies, claims and pending matters have been made for probable losses that are reasonably estimable.

Environmental Matters

The Company has established policies and procedures designed to ensure that its operations are conducted in compliance with all relevant laws and regulations and that enable the Company to meet its high standards for corporate sustainability and environmental stewardship. Our manufacturing facilities are subject to numerous foreign, federal, state and local laws and regulations relating to the presence of hazardous materials, pollution and protection of the environment, including emissions to air, reductions of greenhouse gases, discharges to water, management of hazardous materials, handling and disposal of solid wastes, use of chemicals in our manufacturing processes, and remediation of contaminated sites. All Company manufacturing facilities operate using an ISO 14001 or equivalent environmental management system. The Company’s 2030 Sustainability Goals include significant global reductions in energy use, water consumption, waste to landfill, and emissions of greenhouse gases, fine particulate matter, and volatile organic air emissions, and protection of biodiversity.

Owens Corning is involved in remedial response activities and is responsible for environmental remediation at a number of sites, including certain of its currently owned or formerly owned plants. These responsibilities arise under a number of laws, including, but not limited to, the Federal Resource Conservation and Recovery Act, and similar state or local laws pertaining to the management and remediation of hazardous materials and petroleum. The Company has also been named a potentially responsible party under the U.S. Federal Superfund law, or state equivalents, at a number of disposal sites. The Company became involved in these sites as a result of government action or in connection with business acquisitions. As of ~~June~~September 30, 2022, the Company was involved with a total of 23 sites worldwide, including 10 Superfund and state equivalent sites and 13 owned or formerly owned sites. None of the liabilities for these sites are individually significant to the Company.

Remediation activities generally involve a potential range of activities and costs related to soil, groundwater, and sediment contamination. This can include pre-cleanup activities such as fact-finding and investigation, risk assessment, feasibility studies, remedial action design and implementation (where actions may range from monitoring to removal of contaminants, to installation of longer-term remediation systems). A number of factors affect the cost of environmental remediation, including the number of parties involved in a particular site, the determination of the extent of contamination, the length of time the remediation may require, the complexity of environmental regulations, variability in clean-up standards, the need for legal action, and changes in remediation technology. Taking these factors into account, Owens Corning reasonably estimates the costs of remediation to be paid over a period of years. The Company accrues an amount on an undiscounted basis, when a liability is probable and reasonably estimable. Actual cost may differ from these estimates for the reasons mentioned above. At ~~June~~September 30, 2022, the Company had an accrual totaling $6$5 million for these costs, of which the current portion is $1 million. Changes in required remediation procedures or timing of those procedures, or discovery of contamination at additional sites, could result in material increases to the Company’s environmental obligations.

Table of Contents

- 3029 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

14. STOCK COMPENSATION

Description of the Plan

On April 18, 2019, the Company’s stockholders approved the Owens Corning 2019 Stock Plan (the “2019 Stock Plan”), which authorizes grants of stock options, stock appreciation rights, restricted stock awards, restricted stock units, bonus stock awards and performance share awards. At ~~June~~September 30, 2022, the number of shares remaining available under the 2019 Stock Plan for all stock awards was approximately 2.7 million.

Prior to 2019, employees were eligible to receive stock awards under the Owens Corning 2016 Stock Plan and the Owens Corning 2013 Stock Plan.

Total Stock-Based Compensation Expense

Stock-based compensation expense included in Marketing and administrative expenses in the accompanying Consolidated Statements of Earnings is as follows (in millions):

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Total stock-based compensation expense $ 13 $ 12 $ 25 $ 24


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Total stock-based compensation expense	$	13	$	12	$	38	$	36

Stock Options

The Company has granted stock options under its stockholder approved stock plans. The Company calculates a weighted-average grant-date fair value using a Black-Scholes valuation model for options granted. Compensation expense for options is measured based on the fair market value of the option on the date of grant, and is recognized on a straight-line basis over a four year vesting period. In general, the exercise price of each option awarded was equal to the closing market price of the Company’s common stock on the date of grant and an option’s maximum term is 10 years. The volatility assumption was based on a benchmark study of our peers prior to 2014. Starting with the options granted in 2014, the volatility was based on the Company’s historic volatility.

The Company has not granted stock options since the year ended December 31, 2014. As of ~~June~~September 30, 2022, there was no unrecognized compensation cost related to stock options and the range of exercise prices on outstanding stock options was $37.65 - $42.16.

The following table summarizes the Company’s stock option activity:


			Weighted-Average							Weighted-Average
		Number of Options	Exercise Price		Remaining Contractual Life (in years)	Intrinsic Value (in millions)			Number of Options	Exercise Price		Remaining Contractual Life (in years)	Intrinsic Value (in millions)
Outstanding, December 31, 2021	Outstanding, December 31, 2021	55,900	$	39.34	1.71	$	3	Outstanding, December 31, 2021	55,900	$	39.34	1.71	$	3

Exercised	Exercised	(4,800)	41.03					Exercised	(22,100)	41.20

Outstanding, June 30, 2022		51,100	$	39.19	1.26	$	2
Exercisable, June 30, 2022		51,100	$	39.19	1.26	$	2
Outstanding, September 30, 2022								Outstanding, September 30, 2022	33,800	$	38.13	1.24	$	1
Exercisable, September 30, 2022								Exercisable, September 30, 2022	33,800	$	38.13	1.24	$	1

~~Table of Contents~~

~~- 31 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~14. STOCK COMPENSATION (continued)~~

Restricted Stock Units

The Company has granted restricted stock units ~~(RSUs)~~("RSUs") under its stockholder approved stock plans. Compensation expense for RSUs is measured based on the closing market price of the stock at date of grant and is recognized on a straight-line basis over the vesting period, which is typically three or four years. The Stock ~~Plan allows~~Plans allow alternate vesting schedules for death, disability, and retirement. The weighted average grant date fair value of RSUs granted in 2022 was ~~$91.12.~~$90.71.

Table of Contents

- 30 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

14. STOCK COMPENSATION (continued)

The following table summarizes the Company’s RSU plans:


		Number of RSUs	Weighted-Average Fair Value			Number of RSUs	Weighted-Average Fair Value
Balance at December 31, 2021	Balance at December 31, 2021	1,268,993	$	62.25	Balance at December 31, 2021	1,268,993	$	62.25
Granted	Granted	340,927	91.12		Granted	360,856	90.71
Vested	Vested	(299,440)	67.70		Vested	(305,056)	67.49
Forfeited	Forfeited	(35,582)	74.48		Forfeited	(53,804)	75.11
Balance at June 30, 2022		1,274,898	$	68.23
Balance at September 30, 2022					Balance at September 30, 2022	1,270,989	$	68.35

As of ~~June~~September 30, 2022, there was ~~$45~~$39 million of total unrecognized compensation cost related to RSUs. That cost is expected to be recognized over a weighted-average period of ~~2.52~~2.42 years. The total grant date fair value of shares vested during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 was ~~$20~~$21 million and ~~$24~~$25 million, respectively.

Performance Share Units

The Company has granted performance share units ~~(PSUs)~~("PSUs") as a part of its long-term incentive ~~plan.~~plan program. All outstanding performance grants will fully settle in stock. The amount of stock ultimately distributed from all performance shares is contingent on meeting internal ~~company-based~~Company-based metrics or an external-based stock performance metric.

In the ~~six~~nine months ended ~~June~~September 30, 2022, the Company granted both internal ~~company-based~~Company-based and external-based metric PSUs.

Internal Company-based metrics

The internal ~~company-based~~Company-based metrics are based on various Company metrics and typically vest over a three-year period. The amount of stock distributed will vary from 0% to 300% of PSUs awarded depending on each award's design and performance versus the internal Company-based metrics.

The initial fair value for all internal Company-based metric PSUs assumes that the performance goals will be achieved and is based on the grant date stock price. This assumption is monitored quarterly and if it becomes probable that such goals will not be achieved or will be exceeded, compensation expense recognized will be adjusted and previous surplus compensation expense recognized will be reversed or additional expense will be recognized. The expected term represents the period from the grant date to the end of the vesting period. Pro-rata vesting may be utilized in the case of death, disability or approved retirement and awards, if earned, will be paid at the end of the vesting period.

External-based metrics

The external-based metrics vest after a three-year period. Outstanding grants are based on the Company's total stockholder return relative to the performance of the Dow Jones U.S. Construction & Materials Index. The amount of stock distributed will vary from 0% to 200% of PSUs awarded depending on the relative stockholder return performance. The fair value of external-based metric PSUs has been estimated at the grant date using a Monte Carlo simulation that uses various assumptions.

~~Table of Contents~~

~~- 32 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(unaudited)~~

~~14. STOCK COMPENSATION (continued)~~

The following table provides a summary of the assumptions for ~~units~~PSUs granted in 2022:




Expected volatility	41.65%
Risk free interest rate	1.36%
Expected term (in years)	2.91
Grant date fair value of units granted	$	122.69

The risk-free interest rate was based on zero-coupon United States Treasury bills at the grant date. The expected term represents the period from the grant date to the end of the three-year performance period.

Table of Contents

- 31 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

14. STOCK COMPENSATION (continued)

PSU Summary

As of ~~June~~September 30, 2022, there was ~~$27~~$23 million total unrecognized compensation cost related to PSUs. That cost is expected to be recognized over a weighted-average period of ~~1.90~~1.75 years.

The following table summarizes the Company’s PSU activity:


		Number of PSUs	Weighted-Average Grant-Date Fair Value			Number of PSUs	Weighted-Average Grant-Date Fair Value
Balance at December 31, 2021	Balance at December 31, 2021	309,971	$	74.78	Balance at December 31, 2021	309,971	$	74.78
Granted	Granted	146,784	98.94		Granted	146,784	98.94

Forfeited	Forfeited	(7,459)	80.43		Forfeited	(12,051)	80.07
Balance at June 30, 2022		449,296	$	82.56
Balance at September 30, 2022					Balance at September 30, 2022	444,704	$	82.59

Employee Stock Purchase Plan

The Owens Corning Employee Stock Purchase Plan ("ESPP") is a tax-qualified plan under Section 423 of the Internal Revenue Code. The purchase price of shares purchased under the ESPP is equal to 85% of the lower of the fair market value of shares of Owens Corning common stock at the beginning or ending of the offering period, which is a six-month period ending on May 31 and November 30 of each year. On April 16, 2020, the Company's stockholders approved the Amended and Restated Owens Corning Employee Stock Purchase Plan, which increased the number of shares available for issuance under the plan by 4.2 million shares. As of ~~June~~September 30, 2022, 3.7 million shares remain available for purchase.

Included in total stock-based compensation expense is $2$1 million and $3$4 million of expense related to the Company's ESPP recognized during the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively. During the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recognized expense of $2$1 million and $3$4 million, respectively, related to the Company's ESPP. As of ~~June~~September 30, 2022, there was $2$1 million of total unrecognized compensation cost related to the ESPP.

Table of Contents

- 3332 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

15. EARNINGS PER SHARE

The following table is a reconciliation of weighted-average shares for calculating basic and diluted earnings per share (in millions, except per share amounts):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Net earnings attributable to Owens Corning	Net earnings attributable to Owens Corning	$	343	$	298	$	647	$	508	Net earnings attributable to Owens Corning	$	470	$	260	$	1,117	$	768
Weighted-average number of shares outstanding used for basic earnings per share	Weighted-average number of shares outstanding used for basic earnings per share	97.6		104.6		98.6		105.0		Weighted-average number of shares outstanding used for basic earnings per share	96.3		103.1		97.8		104.4
Non-vested restricted and performance shares	Non-vested restricted and performance shares	0.8		0.8		0.7		0.8		Non-vested restricted and performance shares	0.8		0.7		0.9		0.7
Options to purchase common stock	Options to purchase common stock	—		0.1		—		0.1		Options to purchase common stock	—		0.1		—		0.1
Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share	Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share	98.4		105.5		99.3		105.9		Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share	97.1		103.9		98.7		105.2
Earnings per common share attributable to Owens Corning common stockholders:	Earnings per common share attributable to Owens Corning common stockholders:									Earnings per common share attributable to Owens Corning common stockholders:
Basic	Basic	$	3.51	$	2.85	$	6.56	$	4.84	Basic	$	4.88	$	2.52	$	11.42	$	7.36
Diluted	Diluted	$	3.49	$	2.82	$	6.52	$	4.80	Diluted	$	4.84	$	2.50	$	11.32	$	7.30

For the three and ~~six~~nine months ended ~~June~~September 30, 2022 and ~~June~~September 30, 2021, there were no non-vested ~~restricted~~RSUs or ~~performance shares~~PSUs that had an anti-dilutive effect on earnings per share.

On February 14, 2022, the Board of Directors approved a new share buy-back program under which the Company is authorized to repurchase up to 10 million shares of the Company’s outstanding common stock (the "Repurchase Authorization"). The Repurchase Authorization enables the Company to repurchase shares through the open market, privately negotiated, or other transactions. The actual number of shares repurchased will depend on timing, market conditions and other factors and will be at the Company's discretion. The Company repurchased ~~3.5~~6.0 million shares of its common stock for ~~$315~~$521 million during the ~~six~~nine months ended ~~June~~September 30, 2022, under the Repurchase Authorization. As of ~~June~~September 30, 2022, ~~9.9~~7.4 million shares remain available for repurchase under the Repurchase Authorization.

Table of Contents

- 3433 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

16. INCOME TAXES

The following table provides the Income tax expense (in millions) and effective tax rate for the periods indicated:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021				2022			2021			2022			2021
Income tax expense	Income tax expense	$	119		$	97		$	226		$	156		Income tax expense	$	114		$	94		$	340		$	250
Effective tax rate	Effective tax rate	26		%	25		%	26		%	24		%	Effective tax rate	20		%	27		%	23		%	25		%

The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~June~~September 30, 2022 is primarily due to U.S. state and local income tax expense, ~~U.S. federal taxes~~non-taxable gain on ~~foreign earnings,~~acquisition, foreign rate differential and other discrete adjustments. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the ~~six~~nine months ended ~~June~~September 30, 2022 is primarily due to U.S. state and local income tax expense, non-taxable gain on acquisition, U.S. federal taxes on foreign earnings, adjustments to valuation allowances against certain deferred tax assets, excess tax benefits related to stock compensation, and other discrete adjustments.

On August 16, 2022, President Biden signed into law the “Inflation Reduction Act.” The company continues to evaluate the impact of the new law and awaits further guidance from the government.

The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~June~~September 30, 2021 is primarily due to U.S. state and local income tax expense, U.S. federal taxes on foreign earnings, ~~excess tax benefits related to stock compensation,~~ and other discrete adjustments. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the ~~six~~nine months ended ~~June~~September 30, 2021 is primarily due to U.S. state and local income tax expense, U.S. federal taxes on foreign earnings, adjustments to valuation allowances against certain deferred tax assets, excess tax benefits related to stock compensation, and other discrete adjustments.

The Company continues ~~its current practice of asserting~~to assert indefinite reinvestment in accordance with ~~ASC~~Accounting Standards Codification ("ASC") 740 ~~by applying current~~based on the laws as of enactment of the tax legislation commonly known as the U.S. Tax Cuts and ~~foreign tax legislation.~~Jobs Act of 2017.

Table of Contents

- 3534 -

OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

17. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table summarizes the changes in accumulated other comprehensive income (deficit) (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,

		2022		2021		2022		2021			2022		2021		2022		2021
Currency Translation Adjustment	Currency Translation Adjustment									Currency Translation Adjustment
Beginning balance	Beginning balance	$	(306)	$	(265)	$	(279)	$	(220)	Beginning balance	$	(358)	$	(233)	$	(279)	$	(220)
Net investment hedge amounts classified into AOCI, net of tax	Net investment hedge amounts classified into AOCI, net of tax	2		(1)		4		3		Net investment hedge amounts classified into AOCI, net of tax	—		4		4		7

Loss on foreign currency translation	Loss on foreign currency translation	(54)		33		(83)		(16)		Loss on foreign currency translation	(160)		(39)		(243)		(55)
Other comprehensive income (loss), net of tax		(52)		32		(79)		(13)
Other comprehensive (loss), net of tax										Other comprehensive (loss), net of tax	(160)		(35)		(239)		(48)
Ending balance	Ending balance	$	(358)	$	(233)	$	(358)	$	(233)	Ending balance	$	(518)	$	(268)	$	(518)	$	(268)
Pension and Other Postretirement Adjustment	Pension and Other Postretirement Adjustment									Pension and Other Postretirement Adjustment
Beginning balance	Beginning balance	$	(315)	$	(371)	$	(318)	$	(372)	Beginning balance	$	(309)	$	(374)	$	(318)	$	(372)
Amounts reclassified from AOCI to net earnings, net of tax (a)	Amounts reclassified from AOCI to net earnings, net of tax (a)	2		—		2		2		Amounts reclassified from AOCI to net earnings, net of tax (a)	—		2		2		4
Amounts classified into AOCI, net of tax	Amounts classified into AOCI, net of tax	4		(3)		7		(4)		Amounts classified into AOCI, net of tax	6		31		13		27

Other comprehensive income (loss), net of tax		6		(3)		9		(2)
Other comprehensive income, net of tax										Other comprehensive income, net of tax	6		33		15		31
Ending balance	Ending balance	$	(309)	$	(374)	$	(309)	$	(374)	Ending balance	$	(303)	$	(341)	$	(303)	$	(341)
Hedging Adjustment	Hedging Adjustment									Hedging Adjustment
Beginning balance	Beginning balance	$	40	$	16	$	16	$	4	Beginning balance	$	39	$	14	$	16	$	4

Amounts reclassified from AOCI to net earnings, net of tax (b)	Amounts reclassified from AOCI to net earnings, net of tax (b)	(12)		(1)		(20)		(2)		Amounts reclassified from AOCI to net earnings, net of tax (b)	(16)		(3)		(35)		(5)
Amounts classified into AOCI, net of tax	Amounts classified into AOCI, net of tax	11		(1)		43		12		Amounts classified into AOCI, net of tax	22		15		64		27

Other comprehensive income (loss), net of tax		(1)		(2)		23		10
Other comprehensive income, net of tax										Other comprehensive income, net of tax	6		12		29		22
Ending balance	Ending balance	$	39	$	14	$	39	$	14	Ending balance	$	45	$	26	$	45	$	26
Total AOCI ending balance	Total AOCI ending balance	$	(628)	$	(593)	$	(628)	$	(593)	Total AOCI ending balance	$	(776)	$	(583)	$	(776)	$	(583)

(a)These AOCI components are included in the computation of total Pension and Other postretirement expense and are recorded in Non-operating income. See Note 12 for additional information.

(b)Amounts reclassified from (loss) gain on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings and is recognized in Cost of sales or Interest expense, net depending on the hedged item. See Note 4 for additional information.

Table of Contents

- 3635 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis ("MD&A") is intended to help investors understand Owens Corning, our operations and our present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying Notes thereto contained in this report. Unless the context requires otherwise, the terms “Owens Corning,” “Company,” “we” and “our” in this report refer to Owens Corning and its subsidiaries.

GENERAL

Owens Corning is a global building and construction materials leader helping customers win in the market by providing innovative and sustainable solutions. The Company has three reporting segments: Composites, Insulation and Roofing. Through these lines of business, the Company manufactures and sells products worldwide. We maintain leading market positions in many of our major product categories.

EXECUTIVE OVERVIEW

Net earnings attributable to Owens Corning were ~~$343~~$470 million in the ~~second~~third quarter of 2022, compared to ~~$298~~$260 million in the same period of 2021. The Company reported ~~$489~~$610 million in earnings before interest and taxes ("EBIT") for the ~~second~~third quarter of 2022 compared to ~~$428~~$394 million in the same period of 2021. The Company generated ~~$525~~$487 million in adjusted earnings before interest and taxes (“Adjusted EBIT”) for the ~~second~~third quarter of 2022 compared to ~~$408~~$400 million in the same period of 2021. See the Adjusted Earnings Before Interest and Taxes paragraph of the MD&A for further information regarding EBIT and Adjusted EBIT, including the reconciliation to net earnings attributable to Owens Corning. ~~Second~~Third quarter of 2022 EBIT performance compared to the same period of 2021 increased ~~$56~~$25 million, ~~$45~~$49 million, and ~~$24~~$17 million in our Composites, Insulation, and Roofing segments, respectively. Within our Corporate, Other and Eliminations category, General corporate expense and other increased by $8$4 million.

Cash and cash equivalents were ~~$810~~$751 million as of ~~June~~September 30, 2022, compared to ~~$888~~$920 million as of ~~June~~September 30, 2021 as a result of increased cash outflows from investing ~~and financing~~ activities, partially offset by higher earnings. In the ~~six~~nine months ended ~~June~~September 30, 2022, the Company's operating activities provided ~~$624~~$1,085 million of cash flow, compared to ~~$702~~$1,168 million in the same period in 2021 due to an increase in operating assets, specifically receivables and inventory, in 2022 compared to the same period of 2021.

As the Russian invasion of Ukraine evolves, we continue to closely monitor the potential impact on our businesses and our people. We believe that we have taken the necessary steps to ensure compliance with applicable regulatory restrictions on international trade and financial transactions associated with our Russian businesses. ~~In late March, we announced our intent~~On September 13, 2022, the Company entered into an agreement to ~~exit Russia through~~sell its Russian operations. The regulatory approval process, which is not considered perfunctory, is ongoing and could result in significant changes to key terms of the agreement. As a ~~transfer or~~result of this uncertainty, management determined assets held for sale treatment had not been triggered as of ~~our facilities.~~September 30, 2022. We are working to expedite our exit, while remaining committed to the safety and security of our employees in the region. Net sales from our Russian operations and its associated assets represent approximately 1% of annual consolidated net sales and consolidated assets, respectively.

On ~~July 15,~~September 1, 2022, ~~Owens Corning entered into a legally binding agreement to acquire~~the Company acquired the remaining 50% interest in ~~Fiberteq.~~Fiberteq, LLC ("Fiberteq"), the joint venture between Owens Corning and IKO Industries, Ltd, which produces high-quality wet-formed fiberglass mat for roofing applications for $140 million, net of cash acquired. The acquisition ~~is anticipated~~advances the Composites strategy to ~~close~~focus on high-value material solutions and expands Owens Corning's capacity to produce non-woven mat. The Company's 50% interest in Fiberteq was accounted for as an equity-method investment and had a carrying value of $17 million at the acquisition date. The Company used the discounted cash flow method to remeasure the previously held equity method investment to its fair value of $147 million, resulting in the ~~third quarter~~recognition of ~~2022.~~a gain of $130 million, which is recorded in Gain on equity method investment on the Consolidated Statements of Earnings. The operating results and a preliminary purchase price allocation for Fiberteq have been included in the Composites segment within the Consolidated Financial Statements since the date of the acquisition. The purchase price allocation is preliminary and resulted in the recognition of $247 million in goodwill. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition. The pro-forma effect of this acquisition on revenues and earnings was not material.

Table of Contents

- 36 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

On ~~June 15,~~August 1, 2022, ~~Owens Corning signed an agreement to acquire~~the Company acquired Natural Polymers, LLC ("Natural Polymers"), an innovative manufacturer of spray polyurethane foam insulation for building and construction ~~applications.~~applications for $111 million, net of cash acquired. The ~~transaction has cleared regulatory approvals~~acquisition advances the Owens Corning strategy to strengthen the Company's core building and ~~other customary conditions~~construction products and ~~is anticipated to close~~expand its addressable markets into higher-growth segments. The operating results and a preliminary purchase price allocation for Natural Polymers have been included in the ~~third~~Insulation segment within the Consolidated Financial Statements since the date of the acquisition. The purchase price allocation is preliminary and resulted in the recognition of $44 million in intangible assets and $60 million in goodwill. The intangible assets consist of indefinite-lived trademarks of $5 million, technology of $12 million with an estimated weighted average life of 6 years and customer relationships of $27 million with an estimated weighted average life of 17 years. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition.The pro-forma effect of this acquisition on revenues and earnings was not material.

On July 1, 2022, the Company finalized the sale of the European portion of the dry-use chopped strands ("DUCS") product line located in Chambéry, France, within the Composite's segment. As a result of this sale, the Company received consideration of $75 million, net of cash sold. In the second quarter of ~~2022.~~2022, the Company recorded a pre-tax charge of $29 million in Other income, net on the Consolidated Statements of Earnings to reflect fair value less cost to sell of these assets.

~~Table~~ The factors contributing to the recognition of ~~Contents~~

~~- 37 -~~the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition. The pro-forma effect of this acquisition on revenues and earnings was not material.

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

On May 23, 2022, Owens Corning and Pultron Composites ("Pultron") formed a JVjoint venture ("JV") to manufacture and sell fiberglass rebar. The Company contributed approximately $47 million to acquire a 65.5% controlling interest and has established a redeemable noncontrolling interest related to Pultron, the minority holder. The JV expands Owens Corning’s capability to produce high-value material solutions by combining the Company’s glass-fiber material technology, channel access and extensive industry experience with Pultron’s manufacturing expertise and process efficiency. The fully consolidated operating results and a preliminary purchase price allocation for the JV have been included in the Company’s Composites segment within the Consolidated Financial Statements since the date of the formation of the JV. Subsequent to the JV formation, the JV acquired assets and technology from Pultron for approximately $65 ~~million~~. million. The purchase price allocation is preliminary and resulted in the recognition of $15 million in intangible assets, consisting of technology, with an estimated weighted average life of 15 years and $42 million in goodwill.

~~On May 16, 2022,~~ The factors contributing to the ~~Company exercised the put option for the sale~~recognition of the ~~European portion~~amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the ~~DUCS product line located in Chambéry, France, within the Composite's segment.~~acquisition. The ~~Company recorded a pre-tax charge~~pro-forma effect of ~~$29 million in Other expense (income), net~~this acquisition on ~~the Consolidated Statements of Earnings to reflect fair value less cost to sell of these assets. Assets held for sale as of June 30, 2022 were $81 million~~revenues and ~~primarily consisted of property, plant and equipment. On July 1, 2022, the Company closed on the sale of the European portion of the DUCS product line located in Chambéry, France.~~earnings was not material.

On February 14, 2022, the Board of Directors approved a new share buy-back program under which the Company is authorized to repurchase up to 10 million shares of the Company’s outstanding common stock (the "Repurchase Authorization"). The Company repurchased ~~1.0~~2.5 million shares of its common stock for ~~$86~~$206 million in the ~~second~~third quarter of 2022 under the Repurchase Authorization. As of ~~June~~September 30, 2022, ~~9.9~~7.4 million shares remained available for repurchase under the Repurchase Authorization.

Table of Contents

- 37 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

RESULTS OF OPERATIONS

Consolidated Results (in millions)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021				2022			2021			2022			2021
Net sales	Net sales	$	2,601		$	2,239		$	4,947		$	4,154		Net sales	$	2,529		$	2,213		$	7,476		$	6,367
Gross margin	Gross margin	$	734		$	618		$	1,353		$	1,062		Gross margin	$	693		$	596		$	2,046		$	1,658
% of net sales	% of net sales	28		%	28		%	27		%	26		%	% of net sales	27		%	27		%	27		%	26		%
Marketing and administrative expenses	Marketing and administrative expenses	$	201		$	188		$	385		$	362		Marketing and administrative expenses	$	201		$	186		$	586		$	548

Other expense (income), net		$	22		$	(17)		$	(6)		$	(65)
Gain on equity method investment														Gain on equity method investment	$	(130)		$	—		$	(130)		$	—
Other income, net														Other income, net	$	(12)		$	(3)		$	(18)		$	(68)
Earnings before interest and taxes	Earnings before interest and taxes	$	489		$	428		$	931		$	729		Earnings before interest and taxes	$	610		$	394		$	1,541		$	1,123
Interest expense, net	Interest expense, net	$	26		$	33		$	54		$	66		Interest expense, net	$	28		$	31		$	82		$	97

Loss on extinguishment of debt														Loss on extinguishment of debt	$	—		$	9		$	—		$	9
Income tax expense	Income tax expense	$	119		$	97		$	226		$	156		Income tax expense	$	114		$	94		$	340		$	250
Net earnings attributable to Owens Corning	Net earnings attributable to Owens Corning	$	343		$	298		$	647		$	508		Net earnings attributable to Owens Corning	$	470		$	260		$	1,117		$	768

The Consolidated Results discussion below provides a summary of our results and the trends affecting our business, and should be read in conjunction with the more detailed Segment Results discussion that follows.

NET SALES

In the ~~second~~third quarter and year-to-date 2022, net sales increased ~~$362~~$316 million and increased ~~$793~~$1,109 million, respectively, compared to the same periods in 2021. For the ~~second~~third quarter and year-to-date, the increase in net sales was driven by higher selling prices and favorable customer mix which were partially offset by lower sales volumes and the unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

GROSS MARGIN

In the ~~second~~third quarter and year-to-date 2022, gross margin increased ~~$116~~$97 million and increased ~~$291~~$388 million, respectively, compared to the same periods in 2021 driven by higher selling prices, partially offset by higher input cost inflation and transportation costs in all three segments.

MARKETING AND ADMINISTRATIVE EXPENSES

In the third quarter and year-to-date 2022, marketing and administrative expenses increased $15 million and increased $38 million, respectively, compared to the same periods in 2021 driven primarily by higher general corporate expenses as business activities return to a more typical, post-pandemic level.

GAIN ON EQUITY METHOD INVESTMENT

In the third quarter and year-to-date 2022, the Company remeasured the previously held equity method investment to its fair value of $147 million, resulting in the recognition of a non-cash gain of $130 million.

OTHER INCOME, NET

In the third quarter and year-to-date 2022, other income increased $9 million and decreased $50 million, respectively, compared to the same periods in 2021. For the third quarter, the increase was driven primarily by higher gains of the sale of certain precious metals. For year-to-date, the decrease was primarily driven by the $29 million impairment loss on the sale of our DUCS product line located in Chambery, France and $23 million in lower gains on sale of certain precious metals compared to the same period in 2021.

Table of Contents

- 38 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

~~MARKETING AND ADMINISTRATIVE EXPENSES~~INTEREST EXPENSE, NET

In the ~~second~~third quarter and year-to-date 2022, ~~marketing and administrative expenses increased $13~~interest expense, net, decreased $3 million and ~~increased $23 million, respectively, compared to the same periods in 2021 driven primarily by higher general corporate expenses as business activities return to a more typical, post-pandemic level.~~

~~OTHER EXPENSE (INCOME), NET~~

~~In the second quarter and year-to-date 2022, other expenses increased $39 million and increased $59~~decreased $15 million, respectively, compared to the same periods in 2021. For the ~~second~~third quarter, the ~~increase was~~decrease is mainly driven ~~primarily~~ by ~~the $29 million impairment loss on the Chambéry, France assets held for sale.~~higher interest income. For year-to-date the increase was primarily driven by the $29 million impairment loss on the Chambéry, France assets held for sale and lower gains on sale of certain precious metals of $30 million. The $27 million gain on sale of the Shanghai, China facility was offset by the comparison year-over-year to the $27 million of gains on settlements from contracts to purchase and sell wind-generated electricity in the same period in 2021.

~~INTEREST EXPENSE, NET~~

~~In the second quarter and year-to-date~~ 2022, ~~interest expense, net, decreased $7 million and decreased $12 million, respectively, compared to~~ the ~~same periods in 2021. The~~ decrease was driven by lower long-term debt balances year over year due to the repayment of the senior notes due in 2022 and higher interest income.

LOSS ON EXTINGUISHMENT OF DEBT

During the third quarter of 2021, the Company recognized a $9 million loss on extinguishment of debt in connection with the make-whole call to repay the remaining portion of its outstanding 2022 senior notes.

INCOME TAX EXPENSE

Income tax expense for the three and ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$119~~$114 million and ~~$226~~$340 million, respectively. For the ~~second~~third quarter of 2022, the Company's effective tax rate was ~~26%~~20% and for the ~~six~~nine months ended ~~June~~September 30, 2022, the Company's effective tax rate was ~~26%~~23%. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~June~~September 30, 2022 is primarily due to U.S. state and local income tax expense, ~~U.S. federal taxes~~non-taxable gain on ~~foreign earnings,~~acquisition, foreign rate differential and other discrete adjustments. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the ~~six~~nine months ended ~~June~~September 30, 2022 is primarily due to U.S. state and local income tax expense, non-taxable gain on acquisition, U.S. federal taxes on foreign earnings, foreign rate differential and other discrete adjustments.

The realization of deferred tax assets depends on achieving a certain minimum level of future taxable income. Management currently believes that it is not reasonably possible that the minimum level of taxable income will be met within the next 12 months to reduce the valuation allowances of certain foreign jurisdictions.

On August 16, 2022, President Biden signed into law the “Inflation Reduction Act.” The company continues to evaluate the impact of the new law and awaits further guidance from the government.

Income tax expense for the three and ~~six~~nine months ended ~~June~~September 30, 2021 was ~~$97~~$94 million and ~~$156 million.~~$250 million, respectively. For the ~~second~~third quarter of 2021, the Company's effective tax rate was ~~25%~~27% and for the ~~six~~nine months ended ~~June~~September 30, 2021 the Company's effective tax rate was ~~24%~~25%. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~June~~September 30, 2021 is primarily due to U.S. state and local income tax expense, U.S. federal taxes on foreign earnings ~~excess tax benefits related to stock compensation,~~ and other discrete adjustments. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the ~~six~~nine months ended ~~June~~September 30, 2021 is primarily due to U.S. state and local income tax expense, U.S. federal taxes on foreign earnings, adjustments to valuation allowances against certain deferred tax assets, excess tax benefits related to stock compensation and other discrete adjustments.

Table of Contents

- 39 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Restructuring, Acquisition and Divestiture-Related Costs

The Company has incurred restructuring, transaction and integration costs related to acquisitions and divestitures, along with restructuring and other exit costs in connection with its global cost reduction and productivity initiatives and the Company's growth strategy. These costs are recorded within Corporate, Other and Eliminations. Please refer to Note 10 of the Consolidated Financial Statements for further information on the nature of these costs.

~~Table of Contents~~

~~- 39 -~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

The following table presents the impact and respective location of these income (expense) items on the Consolidated Statements of Earnings (in millions):


			Three Months Ended June 30,				Six Months Ended June 30,						Three Months Ended September 30,				Nine Months Ended September 30,
		Location	2022		2021		2022		2021			Location	2022		2021		2022		2021
Restructuring costs	Restructuring costs	Cost of sales	$	(7)	$	(1)	$	(13)	$	(2)	Restructuring costs	Cost of sales	$	(10)	$	(6)	$	(26)	$	(8)
Restructuring costs	Restructuring costs	Marketing and administrative expenses	(3)		(1)		(3)		(1)		Restructuring costs	Marketing and administrative expenses	—		—		—		(1)
Severance	Severance	Other expense (income), net	(1)		2		(1)		2		Severance	Other income, net	—		(12)		(1)		(10)
Other exit costs	Other exit costs	Other expense (income), net	(29)		1		(29)		1		Other exit costs	Other income, net	(2)		—		(2)		(1)

Gain on sale of land in India											Gain on sale of land in India	Other income, net	—		15		—		15
Restructuring costs											Restructuring costs	Non-operating income	—		(2)		—		(2)
Acquisition-related costs	Acquisition-related costs	Marketing and administrative expenses	(3)		—		(3)		—		Acquisition-related costs	Marketing and administrative expenses	(2)		—		(5)		—
Gain on sale of Shanghai, China facility	Gain on sale of Shanghai, China facility	Other expense (income), net	—		—		27		—		Gain on sale of Shanghai, China facility	Other income, net	—		—		27		—

Impairment loss on Chambery, France assets held for sale											Impairment loss on Chambery, France assets held for sale	Other income, net	—		—		(29)		—
Gain on remeasurement of Fiberteq equity investment											Gain on remeasurement of Fiberteq equity investment	Gain on equity method investment	130		—		130		—
Recognition of acquisition inventory fair value step-up											Recognition of acquisition inventory fair value step-up	Cost of sales	—		(1)		—		(1)
Total restructuring, acquisition and divestiture-related costs	Total restructuring, acquisition and divestiture-related costs		$	(43)	$	(1)	$	(22)	$	(2)	Total restructuring, acquisition and divestiture-related costs		$	116	$	(6)	$	94	$	(8)

Table of Contents

- 40 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Adjusted Earnings Before Interest and Taxes

Adjusted EBIT is a non-GAAP measure that excludes certain items that management does not allocate to our segment results because it believes they are not representative of the Company's ongoing operations. Adjusted EBIT is used internally by the Company for various purposes, including reporting results of operations to the Board of Directors of the Company, analysis of performance and related employee compensation measures. Although management believes that these adjustments result in a measure that provides a useful representation of our operational performance, the adjusted measure should not be considered in isolation or as a substitute for Net earnings attributable to Owens Corning as prepared in accordance with accounting principles generally accepted in the United States.

Adjusting income (expense) items to EBIT are shown in the table below (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Restructuring costs	Restructuring costs	$	(11)	$	(1)	$	(17)	$	(2)	Restructuring costs	$	(12)	$	(20)	$	(29)	$	(22)
Gain on sale of Shanghai, China facility	Gain on sale of Shanghai, China facility	—		—		27		—		Gain on sale of Shanghai, China facility	—		—		27		—

Gain on sale of land in India										Gain on sale of land in India	—		15		—		15
Gains on sale of certain precious metals	Gains on sale of certain precious metals	7		21		11		41		Gains on sale of certain precious metals	7		—		18		41

Gain on remeasurement of Fiberteq equity investment										Gain on remeasurement of Fiberteq equity investment	130		—		130		—
Acquisition-related costs	Acquisition-related costs	(3)		—		(3)		—		Acquisition-related costs	(2)		—		(5)		—
Impairment loss on Chambery, France assets held for sale	Impairment loss on Chambery, France assets held for sale	(29)		—		(29)		—		Impairment loss on Chambery, France assets held for sale	—		—		(29)		—

Recognition of acquisition inventory fair value step-up										Recognition of acquisition inventory fair value step-up	—		(1)		—		(1)

Total adjusting items	Total adjusting items	$	(36)	$	20	$	(11)	$	39	Total adjusting items	$	123	$	(6)	$	112	$	33

~~Table of Contents~~

~~- 40 -~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

The reconciliation from Net earnings attributable to Owens Corning to EBIT and to Adjusted EBIT is shown in the table below (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	343	$	298	$	647	$	508	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	470	$	260	$	1,117	$	768
Net earnings attributable to non-redeemable and redeemable noncontrolling interests		—		—		3		—
Net (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests										Net (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests	(1)		(1)		2		(1)

NET EARNINGS	NET EARNINGS	343		298		650		508		NET EARNINGS	469		259		1,119		767
Equity in net (loss) earnings of affiliates		(1)		—		(1)		1
Equity in net earnings (loss) of affiliates										Equity in net earnings (loss) of affiliates	1		(1)		—		—
Income tax expense	Income tax expense	119		97		226		156		Income tax expense	114		94		340		250
EARNINGS BEFORE TAXES	EARNINGS BEFORE TAXES	463		395		877		663		EARNINGS BEFORE TAXES	582		354		1,459		1,017
Interest expense, net	Interest expense, net	26		33		54		66		Interest expense, net	28		31		82		97

Loss on extinguishment of debt										Loss on extinguishment of debt	—		9		—		9
EARNINGS BEFORE INTEREST AND TAXES	EARNINGS BEFORE INTEREST AND TAXES	489		428		931		729		EARNINGS BEFORE INTEREST AND TAXES	610		394		1,541		1,123
Less: Adjusting items from above	Less: Adjusting items from above	(36)		20		(11)		39		Less: Adjusting items from above	123		(6)		112		33
ADJUSTED EBIT	ADJUSTED EBIT	$	525	$	408	$	942	$	690	ADJUSTED EBIT	$	487	$	400	$	1,429	$	1,090

Table of Contents

- 41 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Segment Results

EBIT by segment consists of net sales less related costs and expenses and is 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 in the Corporate, Other and Eliminations category, which is presented following the discussion of our reportable segments.

Composites

The table below provides a summary of net sales, EBIT and depreciation and amortization expense for the Composites segment (in millions):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021				2022			2021			2022			2021
Net sales	Net sales	$	719		$	583		$	1,433		$	1,142		Net sales	$	638		$	591		$	2,071		$	1,733
% change from prior year	% change from prior year	23		%	46		%	25		%	28		%	% change from prior year	8		%	13		%	20		%	23		%
EBIT	EBIT	$	154		$	98		$	308		$	177		EBIT	$	126		$	101		$	434		$	278
EBIT as a % of net sales	EBIT as a % of net sales	21		%	17		%	21		%	15		%	EBIT as a % of net sales	20		%	17		%	21		%	16		%
Depreciation and amortization expense	Depreciation and amortization expense	$	48		$	39		$	91		$	77		Depreciation and amortization expense	$	40		$	42		$	131		$	119

NET SALES

In our Composites segment, net sales in the ~~second~~third quarter of 2022 increased $136 million compared to the same period in 2021. The increase was primarily driven by higher selling prices of $131 million. Favorable customer mix of $14 million and the $13 million impact of the acquisition of vliepa GmbH in July 2021 were partially offset by ~~the $18 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars.~~

~~For year-to-date~~ ~~2022, net sales in our Composites segment increased $291~~$47 million compared to the same period in 2021. The increase was driven by higher selling prices of ~~$261 million.~~ $100 million, partially offset by lower sales volumes of approximately 7%.Favorable customer mix of ~~$42~~$15 million ~~and~~was more than offset by the ~~acquisition of vliepa GmbH in July 2021 were partially offset by~~ ~~the $34~~$19 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

~~Table~~ The remaining variance was driven by the net impact of ~~Contents~~divestitures and acquisitions.

~~- 41 -~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

For year-to-date 2022, net sales in our Composites segment increased $338 million compared to the same period in 2021. The increase was driven by higher selling prices of $361 million, partially offset by slightly lower sales volumes. Favorable customer mix of $57 million was largely offset by the $53 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

The remaining variance was driven by the net impact of divestitures and acquisitions.

EBIT

In our Composites segment, EBIT in the ~~second~~third quarter of 2022 increased ~~$56~~$25 million compared to the same period in 2021. Higher selling prices of ~~$131~~$100 million more than offset $60 million of input cost inflation and $11 million in higher transportation costs. Favorable customer mix was more than offset by the unfavorable impact of slightly lower sales volumes and the net impact of divestitures and acquisitions.

For the year-to-date 2022, EBIT in our Composites segment increased $156 million compared to the same period in 2021. Higher selling prices of $361 million and favorable customer mix more than offset ~~$50~~$163 million of input cost inflation and ~~$14~~$35 million in higher transportation costs. The remaining variance was driven by unfavorable manufacturing performance, ~~and~~ other one-time ~~charges.~~

~~For~~charges and the ~~year-to-date 2022, EBIT in our Composites segment increased $131 million compared to the same period in 2021. Higher selling prices~~impact of $261 million and favorable customer mix more than offset $103 million of input cost inflation and $24 million in higher transportation costs. The remaining variance was driven by unfavorable manufacturing performance and other one-time charges.slightly lower sales volumes.

OUTLOOK

Global glass reinforcements market demand has several economic indicators including residential, non-residential construction and manufacturing production indices, as well as global wind installations. The Company anticipates relatively stable market conditions, with increased economic uncertainty, continued input cost inflation ~~supply chain uncertainties~~ and primary labor availability. The ~~Russian invasion of Ukraine is creating uncertainty in global markets and putting further pressure on already-fragile global supply chains. The~~ Company ~~is closely monitoring the evolving situation and~~ remains focused on managing costs, capital expenditures, and working capital.

~~Insulation~~

~~The table below provides a summary of net sales, EBIT and depreciation and amortization expense for the Insulation segment (in millions):~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net sales $ 934 $ 806 $ 1,793 $ 1,506
% change from prior year 16 % 35 % 19 % 26 %
EBIT $ 157 $ 112 $ 286 $ 194
EBIT as a % of net sales 17 % 14 % 16 % 13 %
Depreciation and amortization expense $ 51 $ 53 $ 104 $ 104

~~NET SALES~~

In our Insulation segment, net sales in the second quarter of 2022 increased $128 million compared to the same period in 2021. The increase was driven by higher selling prices of $142 million partially offset by slightly lower sales volumes. Favorable customer and product mix were offset by the $31 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars

For year-to-date 2022, net sales in our Insulation segment increased $287 million compared to the same period in 2021. The increase was driven by higher selling prices of $259 million and slightly higher sales volumes. Favorable customer and product mix were offset by the $46 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

~~EBIT~~

In our Insulation segment, EBIT in the second quarter of 2022 increased $45 million compared to the same period in 2021. Higher selling prices of $142 million and favorable customer mix more than offset $82 million of input cost inflation, $15 million in higher transportation costs and higher selling, general and administrative expenses.

Table of Contents

- 42 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Insulation

The table below provides a summary of net sales, EBIT and depreciation and amortization expense for the Insulation segment (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net sales	$	965		$	815		$	2,758		$	2,321
% change from prior year	18		%	20		%	19		%	24		%
EBIT	$	173		$	124		$	459		$	318
EBIT as a % of net sales	18		%	15		%	17		%	14		%
Depreciation and amortization expense	$	52		$	52		$	156		$	156

NET SALES

In our Insulation segment, net sales in the third quarter of 2022 increased $150 million compared to the same period in 2021. The increase was driven by higher selling prices of $179 million. Favorable customer and product mix were offset by approximately 2% lower sales volumes. The acquisition of Natural Polymers contributed $13 million to the increase. The remaining variance was driven by the $39 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

For year-to-date 2022, net sales in our Insulation segment increased $437 million compared to the same period in 2021. The increase was driven by higher selling prices of $438 million. Favorable customer and product mix and the contribution from the acquisition of Natural Polymers were more than offset by the $85 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

EBIT

In our Insulation segment, EBIT in the third quarter of 2022 increased $49 million compared to the same period in 2021. Higher selling prices of $179 million more than offset $89 million of input cost inflation and $17 million in higher transportation costs. The remaining variance was driven by higher selling, general and administrative expenses, unfavorable manufacturing performance, slightly lower sales volumes and the negative impact of translating profits denominated in foreign currencies into United States dollars.

For the year-to-date 2022, EBIT in our Insulation segment increased ~~$92~~$141 million compared to the same period in 2021. Higher selling prices of ~~$259~~$438 million ~~higher sales volumes and favorable customer mix~~ more than offset ~~$157~~$246 million of input cost inflation ~~$29~~and $46 million in higher transportation ~~costs and higher~~costs. Higher selling, general and administrative ~~expenses.~~expenses and the negative impact of translating profits denominated in foreign currencies into United States dollars more than offset favorable customer and product mix.

OUTLOOK

The outlook for Insulation demand is driven by North American new residential construction, remodeling and repair activity, as well as commercial and industrial construction activity in the United States, Canada, Europe, Asia-Pacific and Latin America. Demand in commercial and industrial insulation markets is most closely correlated to industrial production growth and overall economic activity in the global markets we serve. Demand for residential insulation is most closely correlated to U.S. housing starts.

During the ~~second~~third quarter of 2022, the average Seasonally Adjusted Annual Rate (SAAR) of U.S. housing starts was approximately ~~1.652~~1.461 million, updown from an annual average of approximately ~~1.568~~1.566 million starts in the ~~second~~third quarter of 2021.

The Company expects both the North American new residential construction market and global commercial and industrial construction markets to remain ~~positive,~~stable, with increased economic uncertainty, continued input cost inflation ~~supply chain uncertainties~~ and primary labor availability. The ~~Russian invasion of Ukraine is creating uncertainty in global markets and putting further pressure on already-fragile global supply chains. The~~ Company ~~is closely monitoring the evolving situation and~~ remains focused on managing costs, capital expenditures, and working capital.

~~Roofing~~

~~The table below provides a summary of net sales, EBIT and depreciation and amortization expense for the Roofing segment (in millions):~~
Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net sales $ 1,018 $ 917 $ 1,856 $ 1,628
% change from prior year 11 % 35 % 14 % 32 %
EBIT $ 258 $ 234 $ 434 $ 390
EBIT as a % of net sales 25 % 26 % 23 % 24 %
Depreciation and amortization expense $ 17 $ 14 $ 31 $ 29

~~NET SALES~~

In our Roofing segment, net sales in the second quarter of 2022 increased $101 million compared to the same period in 2021. Higher selling prices of $153 million and higher-third party asphalt sales of $18 million were partially offset by lower sales volumes of approximately 6% and unfavorable product mix.

For year to date 2022, net sales in our Roofing segment increased $228 million compared to the same period in 2021. Higher selling prices of $273 million and higher-third party asphalt sales of $25 million were partially offset by lower sales volumes of approximately 3% and unfavorable product mix.

~~EBIT~~

~~In our Roofing segment, EBIT in the second quarter of 2022 increased $24 million compared to the same period in 2021. Higher selling prices of $153 million more than offset input cost inflation, primarily asphalt, of $92 million, $11 million of higher transportation costs and the impact of lower sales volumes.~~

Table of Contents

- 43 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Roofing

~~For year-to-date~~ ~~2022,~~The table below provides a summary of net sales, EBIT inand depreciation and amortization expense for the Roofing segment (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net sales	$	1,003		$	869		$	2,859		$	2,497
% change from prior year	15		%	14		%	14		%	25		%
EBIT	$	229		$	212		$	663		$	602
EBIT as a % of net sales	23		%	24		%	23		%	24		%
Depreciation and amortization expense	$	15		$	15		$	46		$	44

NET SALES

In our Roofing segment, net sales in the third quarter of 2022 increased ~~$44~~$134 million compared to the same period in 2021. Higher selling p~~rices~~prices of ~~$273~~$145 million and higher third-party asphalt sales of $32 million were partially offset by lower sales volumes of approximately 4% and unfavorable customer and product mix.

For year to date 2022, net sales in our Roofing segment increased $362 million compared to the same period in 2021. Higher selling prices of $418 million and higher-third party asphalt sales of $57 million were partially offset by lower sales volumes of 3.5% and unfavorable customer and product mix.

EBIT

In our Roofing segment, EBIT in the third quarter of 2022 increased $17 million compared to the same period in 2021. Higher selling prices of $145 million more than offset input cost inflation, primarily asphalt, of ~~$161~~$94 million and ~~$19~~$8 million of higher transportation costs. The impact of selling higher cost inventory, resulting from planned maintenance downtime taken in the fourth quarter of 2021, negatively impacted EBIT by approximately $17 million compared to the same period last year, as significantly less downtime was taken in the fourth quarter of 2020. The remaining variance was driven by the impact of lower sales volumes and unfavorable customer and product mix, as well as, unfavorable manufacturing performance and higher selling, general and administrative ~~expenses,~~expenses.

For year-to-date 2022, EBIT in our Roofing segment increased $61 million compared to the same period in 2021. Higher selling prices of $418 million more than offset input cost inflation, primarily asphalt, of $255 million and $27 million of higher transportation costs. The remaining variance was driven by the impact of lower sales volumes and unfavorable manufacturing performance, as ~~the business returns to more normal post-COVID activities.~~well as, unfavorable customer and product mix and higher selling, general and administrative expenses.

OUTLOOK

In our Roofing segment, we expect the factors that have driven strong margins in recent years, such as ~~growth from~~stable remodeling demand, along with ~~higher~~ sales of roofing components, to continue to deliver profitability. Uncertainties that may impact our Roofing margins include demand from storm and other weather events, demand from new construction, competitive pricing pressure and the cost and availability of raw materials.

Despite strength in the U.S. asphalt shingle market, the Company will continue to evaluate economic factors such as input cost inflation, supply chain uncertainties and primary labor availability. The Company ~~will continue to focus~~remains focused on managing costs, capital expenditures, and working capital.

~~Corporate, Other and Eliminations~~

~~The table below provides a summary of EBIT and depreciation and amortization expense for the Corporate, Other and Eliminations category (in millions):~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Restructuring costs $ (11) $ (1) $ (17) $ (2)
Gain on sale of Shanghai, China facility — — 27 —
Gains on sale of certain precious metals 7 21 11 41
Acquisition-related costs (3) — (3) —
Impairment loss on Chambery, France assets held for sale (29) — (29) —
General corporate expense and other (44) (36) (86) (71)
EBIT $ (80) $ (16) $ (97) $ (32)
Depreciation and amortization $ 22 $ 16 $ 44 $ 31

~~EBIT~~

In Corporate, Other and Eliminations, EBIT expenses for the second quarter of 2022 were higher by $64 million compared to the same period in 2021, primarily driven by the impairment loss on Chambéry, France assets held for sale, higher restructuring charges and lower gains on sale of certain precious metals. For the year-to-date 2022, EBIT expenses in Corporate, Other and Eliminations were higher by $65 million, primarily driven by the impairment loss on Chambéry, France assets held for sale, higher restructuring charges and lower gains on sale of certain precious metals offset by the gain on the sale of the Shanghai, China facility.

General corporate expense and other for the second quarter 2022 were higher by $8 million compared to the same period in 2021. For year-to-date, general corporate expense and other were higher by $15 million compared to the same period in 2021. For the quarter and year-to-date, the increase was primarily driven by higher general corporate expenses as business activities return to a more typical, post-pandemic level.

~~OUTLOOK~~

~~In 2022, we estimate general corporate expenses to be in the range of~~ ~~$170 million and $180 million.~~

Table of Contents

- 44 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Corporate, Other and Eliminations

The table below provides a summary of EBIT and depreciation and amortization expense for the Corporate, Other and Eliminations category (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Restructuring costs	$	(12)	$	(20)	$	(29)	$	(22)
Gain on sale of land in India	—		15		—		15
Gain on sale of Shanghai, China facility	—		—		27		—
Gains on sale of certain precious metals	7		—		18		41


Acquisition-related costs	(2)		—		(5)		—
Impairment loss on Chambery, France assets held for sale	—		—		(29)		—
Gain on remeasurement of Fiberteq equity investment	130		—		130		—
Recognition of acquisition inventory fair value step-up	—		(1)		—		(1)


General corporate expense and other	(41)		(37)		(127)		(108)
EBIT	$	82	$	(43)	$	(15)	$	(75)
Depreciation and amortization	$	23	$	20	$	67	$	51

EBIT

In Corporate, Other and Eliminations, EBIT expenses for the third quarter of 2022 were lower by $125 million compared to the same period in 2021, primarily driven by the gain on remeasurement of the Fiberteq equity investment. For the year-to-date 2022, EBIT expenses in Corporate, Other and Eliminations were lower by $60 million. The gain on remeasurement of the Fiberteq equity investment and the gain on the sale of the Shanghai, China facility were partially offset by the impairment loss on Chambéry, France assets held for sale, and the year over year increase of restructuring charges, general corporate expenses, and lower gains on sale of certain precious metals offset.

General corporate expense and other for the third quarter 2022 were higher by $4 million compared to the same period in 2021. For year-to-date, general corporate expense and other were higher by $19 million compared to the same period in 2021. For the quarter and year-to-date, the increase was primarily driven by higher general corporate expenses as business activities return to a more typical, post-pandemic level.

OUTLOOK

In 2022, we estimate general corporate expenses to be in the range of $170 million and $180 million.

LIQUIDITY, CAPITAL RESOURCES AND OTHER RELATED MATTERS

Liquidity

The Company's primary sources of liquidity are its balance of Cash and cash equivalents of ~~$810~~$751 million as of ~~June~~September 30, 2022, its Senior Revolving Credit Facility and its Receivables Securitization Facility (each as defined below).

The Company has an $800 million senior revolving credit facility (the "Senior Revolving Credit Facility") that has been amended from time to time, which matures in July 2026.

The Company has a $280 million receivables securitization facility (the "Receivables Securitization Facility") that has been amended from time to time, which matures in April 2024.

Table of Contents

- 45 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

The following table shows how the Company utilized its primary sources of liquidity (in millions):


		Balance at June 30, 2022					Balance at September 30, 2022
		Senior Revolving Credit Facility		Receivables Securitization Facility			Senior Revolving Credit Facility		Receivables Securitization Facility
Facility size or borrowing limit	Facility size or borrowing limit	$	800	$	280	Facility size or borrowing limit	$	800	$	280
Collateral capacity limitation on availability	Collateral capacity limitation on availability	N/A		—		Collateral capacity limitation on availability	N/A		—
Outstanding borrowings	Outstanding borrowings	—		—		Outstanding borrowings	—		—
Outstanding letters of credit	Outstanding letters of credit	4		1		Outstanding letters of credit	4		1
Availability on facility	Availability on facility	$	796	$	279	Availability on facility	$	796	$	279

The Receivables Securitization Facility and Senior Revolving Credit Facility mature in 2024 and 2026, respectively. The Company has no significant debt maturities of senior notes before the fourth quarter of 2024. As of ~~June~~September 30, 2022, the Company had $3.0 billion of total debt and cash and cash equivalents of ~~$810~~$751 million. The agreements governing our Senior Revolving Credit Facility and Receivables Securitization Facility contain various covenants that we believe are usual and customary. These covenants include a maximum allowed leverage ratio. We were in compliance with these covenants as of ~~June~~September 30, 2022.

In June 2022, the Senior Revolving Credit Facility was amended to allow the Company to continue to operate in comprehensively sanctioned countries so long as it is not violating any sanctions.

Cash and cash equivalents held by foreign subsidiaries may be subject to foreign withholding taxes upon repatriation to the U.S. As of ~~June~~September 30, 2022, and December 31, 2021, the Company had ~~$227~~$296 million and $156 million, respectively, in cash and cash equivalents in certain of our foreign subsidiaries. The Company continues to assert indefinite reinvestment in accordance with Accounting Standards Codification (ASC) 740 based on the laws as of enactment of the tax legislation commonly known as the U.S. Tax Cuts and Jobs Act of 2017.

As a holding company, we have no operations of our own and most of our assets are held by our direct and indirect subsidiaries. Dividends and other payments or distributions from our subsidiaries will be used to meet our debt service and other obligations and to enable us to pay dividends to our stockholders. Please refer to page 16 of the Risk Factors disclosed in Item 1A of the Company's annual report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K") for details on the factors that could inhibit our subsidiaries' ability to pay dividends or make other distributions to the parent company.

Material Cash Requirements

Our anticipated uses of cash include capital expenditures, working capital needs, share repurchases, meeting financial obligations, payments of any dividends authorized by our Board of Directors, acquisitions, restructuring actions and pension contributions. We expect that our cash on hand, coupled with future cash flows from operations and other available sources of liquidity, including our Senior Revolving Credit Facility and our Receivables Securitization Facility, will provide ample liquidity to enable us to meet our cash requirements.

Please refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our 2021 Form 10-K for more details on these material cash requirements. During the ~~second~~third quarter of 2022, there have been no material changes to our expected uses of cash and contractual obligations.

~~Table of Contents~~

~~- 45 -~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (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. One of our Programs

Table of Contents

- 46 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

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 Senior Revolving Credit Facility.

The payables associated with suppliers choosing to voluntarily participate in the Programs were presented within Accounts payable on the Consolidated Balance Sheets, and totaled ~~$258~~$246 million and $226 million as of ~~June~~September 30, 2022 and December 31, 2021, respectively. The amounts paid which are associated with suppliers once they chose to voluntarily participate in the Programs for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 were ~~$304~~$481 million and ~~$235~~$373 million, respectively, with all activity related to the obligations presented within operating activities on the Consolidated Statements of Cash Flows.

The desire of suppliers and financial institutions to participate in the Programs could be negatively impacted by, among other factors, the availability of capital committed by the participating financial institutions, the cost and availability of our suppliers’ capital, a credit rating downgrade or deteriorating financial performance of the Company or its participating subsidiaries, or other changes in financial markets beyond our control. We do not expect these risks, or potential long-term growth of our Programs, to materially affect our overall financial condition, as we expect a significant portion of our payments to continue to be made outside of the Programs. Accordingly, we do not believe the Programs have materially impacted our current period liquidity, and do not believe that the Programs are reasonably likely to materially affect liquidity in the future.

Cash Flows

The following table presents a summary of our cash balance, cash flows, and availability on credit facilities (in millions):


		Six Months Ended June 30,						Nine Months Ended September 30,
			2022		2021				2022		2021
Cash and cash equivalents	Cash and cash equivalents		$	810	$	888	Cash and cash equivalents		$	751	$	920
Net cash flow provided by operating activities	Net cash flow provided by operating activities		$	624	$	702	Net cash flow provided by operating activities		$	1,085	$	1,168
Net cash flow used for investing activities	Net cash flow used for investing activities		$	(340)	$	(213)	Net cash flow used for investing activities		$	(573)	$	(242)
Net cash flow used for financing activities	Net cash flow used for financing activities		$	(429)	$	(320)	Net cash flow used for financing activities		$	(675)	$	(716)
Availability on the Senior Revolving Credit Facility	Availability on the Senior Revolving Credit Facility		$	796	$	796	Availability on the Senior Revolving Credit Facility		$	796	$	796
Availability on the Receivables Securitization Facility	Availability on the Receivables Securitization Facility		$	279	$	279	Availability on the Receivables Securitization Facility		$	279	$	279

Cash and cash equivalents: Cash and cash equivalents as of ~~June~~September 30, 2022 decreased ~~$78~~$169 million compared to ~~June~~September 30, 2021, primarily driven by increased cash outflows from investing ~~and financing activities, offset by higher earnings.~~activities.

Operating activities: For the ~~six~~nine months ended ~~June~~September 30, 2022, the Company's operating activities provided ~~$624~~$1,085 million of cash compared to ~~$702~~$1,168 million provided in the same period in 2021. The change in cash provided by operating activities was due to an increase in operating assets, specifically receivables and inventory, in 2022 compared to the same period of 2021.

Investing activities: Net cash flow used for investing activities increased ~~$127~~$331 million for the ~~six~~nine months ended ~~June~~September 30, 2022 compared to the same period of 2021, ~~primarily driven by~~resulting from higher year-over-year spending on acquisitions.

Financing activities: Net cash used for financing activities was ~~$429~~$675 million for the ~~six~~nine months ended ~~June~~September 30, 2022, compared to net cash used for financing activities of ~~$320~~$716 million in the same period in 2021. The change was primarily due to ~~higher purchases of~~increased treasury stock ~~and increase~~purchases in ~~dividends paid.~~2022 compared to 2021, which more than offset payments on long-term debt that occurred in 2021.

~~Table of Contents~~

~~- 46 -~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

Derivatives

Please refer to Note 4 of the Consolidated Financial Statements.

Fair Value Measurement

Please refer to Notes 4, 11, and 12 of the Consolidated Financial Statements.

Table of Contents

- 47 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

SAFETY

Working safely is a condition of employment at Owens Corning. We believe this organization-wide expectation provides for a safer work environment for employees, improves our manufacturing processes, reduces our costs and enhances our reputation. Furthermore, striving to be a world-class leader in safety provides a platform for all employees to understand and apply the resolve necessary to be a high-performing global organization. We measure our progress on safety based on Recordable Incident Rate (“RIR”) as defined by the United States Department of Labor, Bureau of Labor Statistics. For the three months ended ~~June~~September 30, 2022, our RIR was ~~0.81 as compared to 0.51 in~~0.64, consistent with the same period a year ago. For the ~~six~~nine months ended ~~June~~September 30, 2022, our RIR was ~~0.70~~0.72 compared to ~~0.58~~0.61 in the same period a year ago.

ACCOUNTING PRONOUNCEMENTS

Please refer to Note 1 of the Consolidated Financial Statements.

ENVIRONMENTAL MATTERS

Please refer to Note 13 of the Consolidated Financial Statements.

Table of Contents

- 4748 -

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

Our disclosures and analysis in this report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements present our current forecasts and estimates of future events. These statements do not strictly relate to historical or current results and can be identified by words such as “anticipate,” "appear," "assume," “believe,” “estimate,” “expect,” "forecast," “intend,” “likely,” “may,” “plan,” “project,” "seek," "should," “strategy,” "will" and other terms of similar meaning or import in connection with any discussion of future operating, financial or other performance. These forward-looking statements are subject to risks, uncertainties and other factors and actual results may differ materially from those results projected in the statements. These risks, uncertainties and other factors include, without limitation:

•industry and economic conditions including, but not limited to, supply chain disruptions, recessionary conditions, inflationary pressures and interest rate volatility, that affect the market and operating conditions of our customers, suppliers or lenders;

•supply constraints and increases in the cost of energy, particularly natural gas, as a result of the ongoing conflict in Ukraine;

•availability and cost of ~~energy and~~ raw materials;

•levels of residential and commercial or industrial construction activity;

•levels of global industrial production;

•competitive and pricing factors;

•demand for our products;

•relationships with key customers and customer concentration in certain areas;

•issues related to acquisitions, divestitures and joint ventures or expansions, including our proposed exit from operations in Russia;

•climate change, weather conditions and storm activity;

•regional impact of ~~the~~ COVID-19 ~~pandemic~~ on our operations, customers and suppliers, as well as related actions taken by governmental authorities and other third parties in response, each of which is uncertain, frequently changing and difficult to predict;

•~~issues related to acquisitions, divestitures and joint ventures or expansions, including our proposed exit from operations in Russia;~~

•~~climate change, weather conditions and storm activity;~~

•legislation and related regulations or interpretations, in the United States or elsewhere;

•domestic and international economic and political conditions, policies or other governmental actions, as well as war and civil disturbance (such as Russia's invasion of Ukraine);

•changes to tariff, trade or investment policies or laws;

•uninsured losses, including those from natural disasters, catastrophes, pandemics, theft or sabotage;

•environmental, product-related or other legal and regulatory liabilities, proceedings or actions;

•research and development activities and intellectual property protection;

•issues involving implementation and protection of information technology systems;

•our level of indebtedness;

•our liquidity and the availability and cost of credit;

•~~achievement of~~our ability to achieve expected synergies, cost reductions and/or productivity improvements;

•the level of fixed costs required to run our business;

•foreign exchange and commodity price fluctuations;

•levels of goodwill or other indefinite-lived intangible assets;

•price volatility in certain wind energy markets in the U.S.;

•loss of key employees and labor disputes or shortages; and

•defined benefit plan funding obligations.

All forward-looking statements in this report should be considered in the context of the risks and other factors described herein, and in Item 1A - Risk Factors in Part I of our 2021 Form 10-K. Users of this report should not interpret the disclosure of any risk factor to imply that the risk has not already materialized. Any forward-looking statements speak only as of the date the statement is made and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by federal securities laws. It is not possible to identify all of the risks, uncertainties and other factors that may affect future results. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not occur and actual results may differ materially from those anticipated or implied in the forward-looking statements. Accordingly, users of this report are cautioned not to place undue reliance on the forward-looking statements.

Table of Contents

- 4849 -

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in our exposure to market risk during the ~~six~~nine months ended ~~June~~September 30, 2022. Please refer to "Quantitative and Qualitative Disclosures about Market Risk" contained in Part II, Item 7A of our 2021 Form 10-K for a discussion of our exposure to market risk.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains (a) disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), and (b) internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective.

There has been no change in the Company's internal control over financial reporting during the quarter ended ~~June~~September 30, 2022 that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Table of Contents

- 4950 -

PART II

ITEM 1. LEGAL PROCEEDINGS

Information required by this item is incorporated by reference to Note 13 of the Consolidated Financial Statements, Contingent Liabilities and Other Matters.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in Item 1A of the Company’s 2021 Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

None.

Issuer Purchases of Equity Securities

The following table provides information about Owens Corning’s purchases of its common stock for each month during the quarterly period covered by this report:

Period Total Number of
Shares (or
Units)
Purchased Average
Price Paid
per Share
(or Unit) Total Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs** Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs**
April 1-30, 2022 1,000,795 $ 86.31 1,000,000 9,897,220
May 1-31, 2022 1,981 93.34 — 9,897,220
June 1-30, 2022 — — — 9,897,220
Total 1,002,776 * $ 86.32 1,000,000 9,897,220


Period	Total Number of Shares (or Units) Purchased		Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs**	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs**
July 1-31, 2022	1,002,088		$	79.03	1,000,000	8,897,220
August 1-31, 2022	786,553		85.97		786,553	8,110,667
September 1-30, 2022	713,901		83.58		713,447	7,397,220
Total	2,502,542	*	$	82.51	2,500,000	7,397,220

* The Company retained an aggregate of ~~2,776~~2,542 shares surrendered to satisfy tax withholding obligations in connection with the vesting of restricted shares granted to our employees.

** On February 14, 2022, the Board of Directors approved a new share buy-back program under which the Company is authorized to repurchase up to 10 million shares of the Company’s outstanding common stock (the "Repurchase Authorization"). The Repurchase Authorization enables the Company to repurchase shares through the open market, privately negotiated, or other transactions. The actual number of shares repurchased will depend on timing, market conditions and other factors and will be at the Company's discretion. The Company repurchased ~~1.0~~2.5 million shares of its common stock for ~~$86~~$206 million during the three months ended ~~June~~September 30, 2022 under the Repurchase Authorization. As of ~~June~~September 30, 2022, ~~9.9~~7.4 million shares remain available for repurchase under the Repurchase Authorization.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

Table of Contents

- 5051 -

ITEM 6. EXHIBITS


Exhibit Number			Description





























~~10.1~~			~~First Amendment to Amended and Restated Credit Agreement, dated as of June 13, 2022, by and among Owens Corning and Wells Fargo Bank, National Association (filed herewith).~~



31.1			Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) (filed herewith).

31.2			Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) (filed herewith).

32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).

32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).

101			The following materials from the Quarterly Report on Form 10-Q for Owens Corning for the period ended ~~June~~September 30, 2022, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Earnings; (iii) Consolidated Balance Sheets (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, (vi) related notes to these financial statements and (vii) document and entity information.












104			The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL.

Owens Corning agrees to furnish to the U.S. Securities and Exchange Commission, upon request, copies of all instruments defining the rights of holders of long-term debt of Owens Corning where the total amount of securities authorized under each issue does not exceed 10% of the total assets of Owens Corning and its subsidiaries on a consolidated basis.

Table of Contents

- 5152 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Owens Corning has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

OWENS CORNING

Registrant

Date:

~~July 27,~~October 26, 2022

By:

/s/ Kenneth S. Parks

Kenneth S. Parks

Chief Financial Officer

Date:

~~July 27,~~October 26, 2022

By:

/s/ Kelly J. Schmidt

Kelly J. Schmidt

Vice President and

Controller