UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~September 30, 2022~~March 31, 2023

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

For the transition period from to

Commission File Number: 1-33100

Owens Corning

(Exact name of registrant as specified in its charter)

Delaware

43-2109021

(State or other jurisdiction of incorporation or organization)

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

One Owens Corning Parkway,

Toledo,

43659

(Address of principal executive offices)

(Zip Code)

(419) 248-8000

(Registrant’s telephone number, including area code)

N/A

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

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


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

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

Yes þ No ¨

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

Yes þ No ¨

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

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No þ

As of ~~October~~April 21, ~~2022, 93,456,304~~2023, 90,109,351 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

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			Contents

Cover Page			1

PART I – FINANCIAL INFORMATION (unaudited)

	Item 1.	Financial Statements
		Consolidated Statements of Earnings	4
		Consolidated Statements of Comprehensive Earnings	5
		Consolidated Balance Sheets	6
		Consolidated Statements of ~~Stockholders'~~Stockholders’ Equity	7
		Consolidated Statements of Cash Flows	98
		Notes to Consolidated Financial Statements
		1. General	109
		2. Segment Information	11

		3. Inventories	1312
		4. Derivative Financial Instruments	1413
		5. Goodwill and Other Intangible Assets	1715
		6. Property, Plant and Equipment	1817

		7. Acquisitions	1918

		8. Divestitures	2019
		9. Warranties	2019
		10. Restructuring, Acquisition and Divestiture-Related Costs	2120
		11. Debt	2322
		12. Pension Plans and Other Postretirement Benefits	2625
		13. Contingent Liabilities and Other Matters	2826
		14. Stock Compensation	2927
		15. Earnings per Share	3230
		16. Income Taxes	3331
		17. Changes in Accumulated Other Comprehensive Deficit	3432


	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3533

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4945

	Item 4.	Controls and Procedures	4945

PART II – OTHER INFORMATION

	Item 1.	Legal Proceedings	5046

	Item 1A.	Risk Factors	5046

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5046

	Item 3.	Defaults Upon Senior Securities	5046

	Item 4.	Mine Safety Disclosures	5046

	Item 5.	Other Information	5047

	Item 6.	Exhibits	5150

		Signatures	5251

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PART I

ITEM 1. FINANCIAL STATEMENTS

OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(unaudited)

(in millions, except per share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,

		2022		2021		2022		2021			2023		2022
NET SALES	NET SALES	$	2,529	$	2,213	$	7,476	$	6,367	NET SALES	$	2,331	$	2,346
COST OF SALES	COST OF SALES	1,836		1,617		5,430		4,709		COST OF SALES	1,742		1,727
Gross margin	Gross margin	693		596		2,046		1,658		Gross margin	589		619
OPERATING EXPENSES	OPERATING EXPENSES									OPERATING EXPENSES
Marketing and administrative expenses	Marketing and administrative expenses	201		186		586		548		Marketing and administrative expenses	204		184
Science and technology expenses	Science and technology expenses	26		21		73		63		Science and technology expenses	28		23

Gain on equity method investment		(130)		—		(130)		—
Other income, net		(12)		(3)		(18)		(68)

Gain on sale of site										Gain on sale of site	(189)		—
Other expense (income), net										Other expense (income), net	12		(28)
Total operating expenses	Total operating expenses	85		204		511		543		Total operating expenses	55		179
OPERATING INCOME	OPERATING INCOME	608		392		1,535		1,115		OPERATING INCOME	534		440
Non-operating income	Non-operating income	(2)		(2)		(6)		(8)		Non-operating income	—		(2)
EARNINGS BEFORE INTEREST AND TAXES	EARNINGS BEFORE INTEREST AND TAXES	610		394		1,541		1,123		EARNINGS BEFORE INTEREST AND TAXES	534		442
Interest expense, net	Interest expense, net	28		31		82		97		Interest expense, net	22		28
Loss on extinguishment of debt		—		9		—		9

EARNINGS BEFORE TAXES	EARNINGS BEFORE TAXES	582		354		1,459		1,017		EARNINGS BEFORE TAXES	512		414
Income tax expense	Income tax expense	114		94		340		250		Income tax expense	130		107
Equity in net earnings (loss) of affiliates		1		(1)		—		—

NET EARNINGS	NET EARNINGS	469		259		1,119		767		NET EARNINGS	382		307
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 (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests	(1)		3

NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	470	$	260	$	1,117	$	768	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	383	$	304
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	$	4.88	$	2.52	$	11.42	$	7.36	Basic	$	4.19	$	3.06
Diluted	Diluted	$	4.84	$	2.50	$	11.32	$	7.30	Diluted	$	4.17	$	3.03

WEIGHTED AVERAGE COMMON SHARES	WEIGHTED AVERAGE COMMON SHARES									WEIGHTED AVERAGE COMMON SHARES
Basic	Basic	96.3		103.1		97.8		104.4		Basic	91.3		99.5
Diluted	Diluted	97.1		103.9		98.7		105.2		Diluted	91.9		100.2

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

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited)

(in millions)


			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
			2022		2021		2022		2021				2023		2022
NET EARNINGS	NET EARNINGS		$	469	$	259	$	1,119	$	767	NET EARNINGS		$	382	$	307
Other comprehensive (loss) income, net of tax:
Other comprehensive income (loss), net of tax:											Other comprehensive income (loss), net of tax:
		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)			Currency translation adjustment (net of tax of $0 and $0 for the three months ended March 31, 2023 and 2022, respectively)	31		(28)
		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			Pension and other postretirement adjustment (net of tax of $0 and $(1) for the three months ended March 31, 2023 and 2022, respectively)	(1)		3
		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			Hedging adjustment (net of tax of $0 and $(8) for the three months ended March 31, 2023 and 2022, respectively)	(1)		24
		Total other comprehensive (loss) income, net of tax	(149)		10		(199)		5			Total other comprehensive income (loss), net of tax	29		(1)
COMPREHENSIVE EARNINGS	COMPREHENSIVE EARNINGS		320		269		920		772		COMPREHENSIVE EARNINGS		411		306
Comprehensive (loss) attributable to non-redeemable and redeemable noncontrolling interests			(2)		(1)		(2)		(1)
Comprehensive (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests											Comprehensive (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests		(1)		2

COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING	COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING		$	322	$	270	$	922	$	773	COMPREHENSIVE EARNINGS ATTRIBUTABLE TO OWENS CORNING		$	412	$	304

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

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except per share amounts)


ASSETS	ASSETS	September 30, 2022		December 31, 2021		ASSETS	March 31, 2023		December 31, 2022
CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	751	$	959	Cash and cash equivalents	$	757	$	1,099
Receivables, less allowance of $10 at September 30, 2022 and $9 at December 31, 2021		1,304		939
Receivables, less allowance of $12 at March 31, 2023 and $11 at December 31, 2022						Receivables, less allowance of $12 at March 31, 2023 and $11 at December 31, 2022	1,388		961
Inventories	Inventories	1,322		1,078		Inventories	1,340		1,334

Assets held for sale						Assets held for sale	—		45
Other current assets	Other current assets	190		121		Other current assets	108		117
Total current assets	Total current assets	3,567		3,097		Total current assets	3,593		3,556
Property, plant and equipment, net	Property, plant and equipment, net	3,660		3,873		Property, plant and equipment, net	3,745		3,729
Operating lease right-of-use assets	Operating lease right-of-use assets	182		158		Operating lease right-of-use assets	212		204
Goodwill	Goodwill	1,367		990		Goodwill	1,387		1,383
Intangible assets	Intangible assets	1,677		1,617		Intangible assets	1,610		1,602
Deferred income taxes	Deferred income taxes	17		31		Deferred income taxes	18		16
Other non-current assets	Other non-current assets	251		249		Other non-current assets	275		262
TOTAL ASSETS	TOTAL ASSETS	$	10,721	$	10,015	TOTAL ASSETS	$	10,840	$	10,752
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
CURRENT LIABILITIES	CURRENT LIABILITIES					CURRENT LIABILITIES
Accounts payable	Accounts payable	$	1,320	$	1,095	Accounts payable	$	1,243	$	1,345
Current operating lease liabilities	Current operating lease liabilities	51		49		Current operating lease liabilities	55		52
Other current liabilities	Other current liabilities	643		553		Other current liabilities	635		707
Total current liabilities	Total current liabilities	2,014		1,697		Total current liabilities	1,933		2,104
Long-term debt, net of current portion	Long-term debt, net of current portion	2,988		2,960		Long-term debt, net of current portion	2,999		2,992
Pension plan liability	Pension plan liability	56		77		Pension plan liability	78		78
Other employee benefits liability	Other employee benefits liability	152		157		Other employee benefits liability	117		118
Non-current operating lease liabilities	Non-current operating lease liabilities	132		109		Non-current operating lease liabilities	157		152
Deferred income taxes	Deferred income taxes	398		376		Deferred income taxes	411		388
Other liabilities	Other liabilities	295		304		Other liabilities	308		299
Total liabilities	Total liabilities	6,035		5,680		Total liabilities	6,003		6,131
Redeemable noncontrolling interest	Redeemable noncontrolling interest	25		—		Redeemable noncontrolling interest	25		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	4,124		4,092		Additional paid in capital	4,129		4,139
Accumulated earnings	Accumulated earnings	3,719		2,706		Accumulated earnings	4,129		3,794
Accumulated other comprehensive deficit	Accumulated other comprehensive deficit	(776)		(581)		Accumulated other comprehensive deficit	(652)		(681)
Cost of common stock in treasury (c)	Cost of common stock in treasury (c)	(2,428)		(1,922)		Cost of common stock in treasury (c)	(2,816)		(2,678)
Total Owens Corning stockholders’ equity	Total Owens Corning stockholders’ equity	4,640		4,296		Total Owens Corning stockholders’ equity	4,791		4,575
Noncontrolling interests	Noncontrolling interests	21		39		Noncontrolling interests	21		21
Total equity	Total equity	4,661		4,335		Total equity	4,812		4,596
TOTAL LIABILITIES AND EQUITY	TOTAL LIABILITIES AND EQUITY	$	10,721	$	10,015	TOTAL LIABILITIES AND EQUITY	$	10,840	$	10,752

(a)10 shares authorized; none issued or outstanding at ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022

(b)400 shares authorized; 135.5 issued and ~~94.7~~90.8 outstanding at ~~September 30, 2022;~~March 31, 2023; 135.5 issued and ~~100.4~~91.9 outstanding at December 31, ~~2021~~2022

(c)~~40.8~~44.7 shares at ~~September 30, 2022~~March 31, 2023 and ~~35.1~~43.6 shares at December 31, ~~2021~~2022

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

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited)

(in millions)

Common Stock
Outstanding Treasury
Stock APIC (a) Accumulated
Earnings AOCI (b) NCI (c) Total
Shares Par Value Shares Cost
Balance at December 31, 2021 100.4 $ 1 35.1 $ (1,922) $ 4,092 $ 2,706 $ (581) $ 39 $ 4,335
Net earnings attributable to Owens Corning — — — — — 304 — — 304
Net earnings attributable to noncontrolling interests — — — — — — — 3 3
Currency translation adjustment — — — — — — (27) (1) (28)
Pension and other postretirement adjustment (net of tax) — — — — — — 3 — 3
Deferred gain on hedging transactions (net of tax) — — — — — — 24 — 24
Purchases of noncontrolling interest — — — — 8 — — (17) (9)
Issuance of common stock under share-based payment plans 0.4 — (0.4) 21 (21) — — — —
Purchases of treasury stock (2.7) — 2.7 (243) — — — — (243)
Stock-based compensation expense — — — — 12 — — — 12
Dividends declared (d) — — — — — (36) — — (36)
Balance at March 31, 2022 98.1 $ 1 37.4 $ (2,144) $ 4,091 $ 2,974 $ (581) $ 24 $ 4,365
Net earnings attributable to Owens Corning — — — — — 343 — — 343
Net earnings attributable to noncontrolling interests — — — — — — — — —
Redeemable noncontrolling interest adjustment to redemption value — — — — — — — — —
Currency translation adjustment — — — — — — (52) (2) (54)
Pension and other postretirement adjustment (net of tax) — — — — — — 6 — 6
Deferred loss on hedging transactions (net of tax) — — — — — — (1) — (1)
Issuance of common stock under share-based payment plans 0.1 — (0.1) 9 3 — — — 12
Purchases of treasury stock (1.0) — 1.0 (87) — — — — (87)
Stock-based compensation expense — — — — 13 — — — 13
Dividends declared (d) — — — — — (35) — — (35)
Balance at June 30, 2022 97.2 $ 1 38.3 $ (2,222) $ 4,107 $ 3,282 $ (628) $ 22 $ 4,562
Net earnings attributable to Owens Corning — — — — — 470 — — 470
Net loss attributable to noncontrolling interests — — — — — — — — —
Redeemable noncontrolling interest adjustment to redemption value — — — — (1) — — — (1)
Currency translation adjustment — — — — — — (160) (1) (161)
Pension and other postretirement adjustment (net of tax) — — — — — — 6 — 6
Deferred gain on hedging transactions (net of tax) — — — — — — 6 — 6
Issuance of common stock under share-based payment plans — — — — 5 — — — 5
Purchases of treasury stock (2.5) — 2.5 (206) — — — — (206)
Stock-based compensation expense — — — — 13 — — — 13
Dividends declared (d) — — — — — (33) — — (33)
Balance at September 30, 2022 94.7 $ 1 40.8 $ (2,428) $ 4,124 $ 3,719 $ (776) $ 21 $ 4,661


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

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

Dividends declared (d)	—	—		—	—		—		(48)		—		—		(48)
Balance at March 31, 2023	90.8	$	1	44.7	$	(2,816)	$	4,129	$	4,129	$	(652)	$	21	$	4,812

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

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

(c)Noncontrolling Interest (“NCI”)

(d)Quarterly dividend ~~declarations~~declaration of ~~$0.35~~$0.52 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.~~

2023

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~~OWENS CORNING AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY~~

~~(unaudited)~~

~~(in millions)~~


		Common Stock Outstanding			Treasury Stock			APIC (a)		Accumulated Earnings		AOCI (b)		NCI (c)		Total			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		105.6	$	1	29.9	$	(1,400)	$	4,059	$	1,829	$	(588)	$	40	$	3,941
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
Net earnings attributable to Owens Corning	Net earnings attributable to Owens Corning	—	—		—	—		—		210		—		—		210		Net earnings attributable to Owens Corning	—	—		—	—		—		304		—		—		304
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests	—	—		—	—		—		—		—		—		—		Net earnings attributable to noncontrolling interests	—	—		—	—		—		—		—		3		3
Currency translation adjustment	Currency translation adjustment	—	—		—	—		—		—		(45)		(1)		(46)		Currency translation adjustment	—	—		—	—		—		—		(27)		(1)		(28)
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)	—	—		—	—		—		—		3		—		3
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)	—	—		—	—		—		—		24		—		24

Purchases of noncontrolling interest																		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	0.5	—		(0.5)	22		(15)		—		—		—		7		Issuance of common stock under share-based payment plans	0.4	—		(0.4)	21		(21)		—		—		—		—
Purchases of treasury stock	Purchases of treasury stock	(1.8)	—		1.8	(142)		—		—		—		—		(142)		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
Cumulative effect of accounting change	Cumulative effect of accounting change	—	—		—	—		—		—		—		—		—		Cumulative effect of accounting change	—	—		—	—		—		—		—		—		—
Dividends declared (d)	Dividends declared (d)	—	—		—	—		—		(28)		—		—		(28)		Dividends declared (d)	—	—		—	—		—		(36)		—		—		(36)
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		—	—		—	—		—		298		—		—		298
Net loss attributable to noncontrolling interests		—	—		—	—		—		—		—		—		—
Currency translation adjustment		—	—		—	—		—		—		32		—		32
Pension and other postretirement adjustment (net of tax)		—	—		—	—		—		—		(3)		—		(3)
Deferred loss on hedging transactions (net of tax)		—	—		—	—		—		—		(2)		—		(2)

Issuance of common stock under share-based payment plans		0.3	—		(0.3)	14		(4)		—		—		—		10
Purchases of treasury stock		(1.3)	—		1.3	(131)		—		—		—		—		(131)
Stock-based compensation expense		—	—		—	—		12		—		—		—		12
Cumulative effect of accounting change (d)		—	—		—	—		—		—		—		—		—
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
Net earnings attributable to Owens Corning		—	—		—	—		—		260		—		—		260
Net loss attributable to noncontrolling interests		—	—		—	—		—		—		—		(1)		(1)

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

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

Dividends declared (d)		—	—		—	—		—		(27)		—		—		(27)
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"~~(“APIC”)

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

(c)Noncontrolling Interest (“NCI”)

(d)Quarterly dividend ~~declarations~~declaration of ~~$0.26~~$0.35 per share as of ~~September 30, 2021, June 30, 2021 and~~ March 31, ~~2021~~2022

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

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OWENS CORNING AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in millions)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
NET CASH FLOW (USED FOR) PROVIDED BY OPERATING ACTIVITIES						NET CASH FLOW (USED FOR) PROVIDED BY OPERATING ACTIVITIES
Net earnings	Net earnings	$	1,119	$	767	Net earnings	$	382	$	307
Adjustments to reconcile net earnings to cash provided by operating activities:	Adjustments to reconcile net earnings to cash provided by operating activities:					Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	400		370		Depreciation and amortization	127		132

Deferred income taxes	Deferred income taxes	48		54		Deferred income taxes	20		3
Provision for pension and other employee benefits liabilities	Provision for pension and other employee benefits liabilities	2		2		Provision for pension and other employee benefits liabilities	1		1
Stock-based compensation expense	Stock-based compensation expense	38		36		Stock-based compensation expense	13		12

Gains on sale of certain precious metals	Gains on sale of certain precious metals	(18)		(41)		Gains on sale of certain precious metals	(2)		(4)
Loss on extinguishment of debt		—		9
Gain on equity method investment		(130)		—

Gain on sale of site						Gain on sale of site	(189)		—
Other adjustments to reconcile net earnings to cash provided by operating activities	Other adjustments to reconcile net earnings to cash provided by operating activities	(1)		14		Other adjustments to reconcile net earnings to cash provided by operating activities	(4)		26
Changes in operating assets and liabilities	Changes in operating assets and liabilities	(333)		(26)		Changes in operating assets and liabilities	(506)		(301)
Pension fund contribution	Pension fund contribution	(5)		(5)		Pension fund contribution	(1)		(1)
Payments for other employee benefits liabilities	Payments for other employee benefits liabilities	(5)		(9)		Payments for other employee benefits liabilities	(3)		(3)
Other	Other	(30)		(3)		Other	(2)		(14)
Net cash flow provided by operating activities		1,085		1,168
NET CASH FLOW USED FOR INVESTING ACTIVITIES
Net cash flow (used for) provided by operating activities						Net cash flow (used for) provided by operating activities	(164)		158
NET CASH FLOW PROVIDED BY (USED FOR) INVESTING ACTIVITIES						NET CASH FLOW PROVIDED BY (USED FOR) INVESTING ACTIVITIES
Cash paid for property, plant, and equipment	Cash paid for property, plant, and equipment	(306)		(243)		Cash paid for property, plant, and equipment	(158)		(107)

Proceeds from the sale of assets or affiliates	Proceeds from the sale of assets or affiliates	103		70		Proceeds from the sale of assets or affiliates	189		10
Investment in subsidiaries and affiliates, net of cash acquired		(417)		(42)

Derivative settlements	Derivative settlements	52		(23)		Derivative settlements	—		11

Other	Other	(5)		(4)		Other	(7)		(2)
Net cash flow used for investing activities		(573)		(242)
Net cash flow provided by (used for) investing activities						Net cash flow provided by (used for) investing activities	24		(88)
NET CASH FLOW USED FOR FINANCING ACTIVITIES	NET CASH FLOW USED FOR FINANCING ACTIVITIES					NET CASH FLOW USED FOR FINANCING ACTIVITIES

Payments on long-term debt		—		(193)

Purchases of noncontrolling interest	Purchases of noncontrolling interest	(9)		—		Purchases of noncontrolling interest	—		(9)
Net decrease in short-term debt	Net decrease in short-term debt	(5)		1		Net decrease in short-term debt	—		(5)
Dividends paid	Dividends paid	(103)		(81)		Dividends paid	(48)		(35)
Purchases of treasury stock	Purchases of treasury stock	(536)		(435)		Purchases of treasury stock	(160)		(229)
Other		(22)		(8)
Finance lease payments						Finance lease payments	(8)		(7)

Net cash flow used for financing activities	Net cash flow used for financing activities	(675)		(716)		Net cash flow used for financing activities	(216)		(285)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	(45)		(7)		Effect of exchange rate changes on cash	14		4
Net (decrease) increase in cash, cash equivalents, and restricted cash		(208)		203
Net decrease in cash, cash equivalents, and restricted cash						Net decrease in cash, cash equivalents, and restricted cash	(342)		(211)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	966		724		Cash, cash equivalents and restricted cash at beginning of period	1,107		966
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	758	$	927	CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	765	$	755

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

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. GENERAL

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

The Consolidated Financial Statements included in this report are unaudited, pursuant to certain rules and regulations of the Securities and Exchange Commission, and include, in the opinion of the Company, normal recurring adjustments necessary for a fair statement of the results for the periods indicated, which, however, are not necessarily indicative of results which may be expected for the full year. The December 31, ~~2021~~2022 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States ("(“U.S."”). In connection with the Consolidated Financial Statements and Notes included in this report, reference is made to the Consolidated Financial Statements and Notes contained in the Company’s annual report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~"2021~~“2022 Form ~~10-K"~~10-K”). Certain reclassifications have been made to the periods presented for ~~2021~~2022 to conform to the classifications used in the periods presented for ~~2022.~~2023.

Revenue Recognition

As of December 31, ~~2021,~~2022, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled ~~$76~~$89 million, of which ~~$16~~$14 million was recognized as revenue in the first ~~nine~~three months of 2023. As of March 31, 2023, our contract liability balances totaled $89 million.

As of December 31, 2021, our contract liability balances totaled $76 million, of which $13 million was recognized as revenue in the first three months of 2022. As of ~~September 30,~~March 31, 2022, our contract liability balances totaled ~~$86~~$78 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 $8 million as of March 31, 2023 and December 31, 2022, and $7 million as of ~~September 30,~~March 31, 2022 ~~December 31, 2021, September 30, 2021~~ and December 31, ~~2020.~~2021. Restricted cash primarily represents amounts received from a counterparty related to its performance assurance on an executory contract, which is included in Other current assets on the Consolidated Balance Sheets. These amounts are contractually required to be set aside, and the counterparty can exchange the cash for another form of performance assurance at its discretion.

Related Party Transactions

In the first quarter of 2021, a related party relationship was established as a result of a member of the Company’s Board of Directors being named an executive officer of one of the Company’s preexisting suppliers. The related party transactions with this supplier consist of the purchase of raw materials. Purchases from the related party supplier were ~~$42 million and $102~~$21 million for the three ~~and nine~~ months ended ~~September 30, 2022, respectively,~~March 31, 2023 and ~~$23 million and $70 million for the three and nine months ended September 30, 2021, respectively.~~2022. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, amounts due to the related party supplier were $9$6 million and $1$3 million, respectively.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

1. GENERAL (continued)

Supplier Finance Programs

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

The Company’s confirmed outstanding obligations under the programs totaled $229 million and $234 million as of March 31, 2023 and December 31, 2022, respectively. The amounts of invoices paid under the programs totaled $158 million and $150 million for the three months ended March 31, 2023 and March 31, 2022.

Accounting Pronouncements

~~The following table summarizes recent~~All Accounting Standards Updates ~~(ASU's)~~("ASUs") recently issued by the Financial Accounting Standards Board ~~(FASB) that had an impact~~("FASB") were either not applicable to the Company or ~~could~~their adoption did not have ana material impact on the ~~Company's~~Company’s Consolidated Financial ~~Statements:~~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 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.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION

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

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

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

Roofing – Within our Roofing segment, the Company manufactures and sells residential roofing shingles, oxidized asphalt materials, 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 September 30, 2022											For the three months ended March 31, 2023
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	$	96	$	400	$	912	$	(75)	$	1,333	U.S. residential	$	85	$	370	$	839	$	(65)	$	1,229
U.S. commercial and industrial	U.S. commercial and industrial	222		204		54		—		480		U.S. commercial and industrial	218		206		24		(2)		446
Total United States	Total United States	318		604		966		(75)		1,813		Total United States	303		576		863		(67)		1,675
Europe	Europe	141		201		5		(2)		345		Europe	137		194		4		(1)		334
Asia-Pacific	Asia-Pacific	126		42		1		—		169		Asia-Pacific	107		31		—		—		138
Rest of world	Rest of world	53		118		31		—		202		Rest of world	38		118		28		—		184
NET SALES	NET SALES	$	638	$	965	$	1,003	$	(77)	$	2,529	NET SALES	$	585	$	919	$	895	$	(68)	$	2,331

For the three months ended September 30, 2021
Reportable Segments Composites Insulation Roofing Eliminations Consolidated
Disaggregation Categories
U.S. residential $ 83 $ 312 $ 796 $ (60) $ 1,131
U.S. commercial and industrial 163 181 38 — 382
Total United States 246 493 834 (60) 1,513
Europe 161 179 5 (2) 343
Asia-Pacific 136 48 1 — 185
Rest of world 48 95 29 — 172
NET SALES $ 591 $ 815 $ 869 $ (62) $ 2,213


	For the three months ended March 31, 2022
Reportable Segments	Composites		Insulation		Roofing		Eliminations		Consolidated
Disaggregation Categories
U.S. residential	$	87	$	351	$	776	$	(60)	$	1,154
U.S. commercial and industrial	210		179		27		(3)		413
Total United States	297		530		803		(63)		1,567
Europe	205		197		6		(2)		406
Asia-Pacific	151		35		2		—		188
Rest of world	61		97		27		—		185
NET SALES	$	714	$	859	$	838	$	(65)	$	2,346

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

2. SEGMENT INFORMATION (continued)

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

For the nine months ended September 30, 2021
Reportable Segments Composites Insulation Roofing Eliminations Consolidated
Disaggregation Categories
U.S. residential $ 241 $ 860 $ 2,302 $ (181) $ 3,222
U.S. commercial and industrial 471 520 93 — 1,084
Total United States 712 1,380 2,395 (181) 4,306
Europe 484 526 13 (3) 1,020
Asia-Pacific 403 137 6 — 546
Rest of world 134 278 83 — 495
NET SALES $ 1,733 $ 2,321 $ 2,497 $ (184) $ 6,367

EARNINGS BEFORE INTEREST AND TAXES

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

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~~- 13 -~~

~~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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Reportable Segments	Reportable Segments									Reportable Segments
Composites	Composites	$	126	$	101	$	434	$	278	Composites	$	49	$	154
Insulation	Insulation	173		124		459		318		Insulation	156		129
Roofing	Roofing	229		212		663		602		Roofing	209		176
Total reportable segments	Total reportable segments	528		437		1,556		1,198		Total reportable segments	414		459
Restructuring costs	Restructuring costs	(12)		(20)		(29)		(22)		Restructuring costs	(18)		(6)
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		—		15		—		15

Gain on sale of Santa Clara, California site										Gain on sale of Santa Clara, California site	189		—
Gains on sale of certain precious metals	Gains on sale of certain precious metals	7		—		18		41		Gains on sale of certain precious metals	2		4

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

General corporate expense and other	General corporate expense and other	(41)		(37)		(127)		(108)		General corporate expense and other	(53)		(42)
Total corporate, other and eliminations	Total corporate, other and eliminations	82		(43)		(15)		(75)		Total corporate, other and eliminations	120		(17)
EBIT	EBIT	$	610	$	394	$	1,541	$	1,123	EBIT	$	534	$	442

3. INVENTORIES

Inventories consist of the following (in millions):


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Finished goods	Finished goods	$	833	$	672	Finished goods	$	843	$	843
Materials and supplies	Materials and supplies	489		406		Materials and supplies	497		491
Total inventories	Total inventories	$	1,322	$	1,078	Total inventories	$	1,340	$	1,334

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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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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,~~and 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	September 30, 2022		December 31, 2021			Location	March 31, 2023		December 31, 2022
Derivative assets designated as hedging instruments:	Derivative assets designated as hedging instruments:						Derivative assets designated as hedging instruments:
Net investment hedges:
Cross-currency swaps		Other current assets	$	—	$	5
Cross-currency swaps		Other non-current assets	$	—	$	1

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

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

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	$	9	$	5	Natural gas forward swaps	Other current assets	$	1	$	2

Foreign exchange forward contracts		Other current liabilities	$	1	$	2

Derivative liabilities designated as hedging instruments:							Derivative liabilities designated as hedging instruments:

Cash flow hedges:							Cash flow hedges:
Natural gas forward swaps							Natural gas forward swaps	Other current liabilities	$	31	$	32

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	$	11	$	1	Foreign exchange forward contracts	Other current assets	$	—	$	1
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	$	1	$	6	Foreign exchange forward contracts	Other current liabilities	$	5	$	2

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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,						Three Months Ended March 31,
		Location	2022		2021		2022		2021			Location	2023		2022
Derivative activity designated as hedging instruments:	Derivative activity designated as hedging instruments:										Derivative activity designated as hedging instruments:
Natural gas cash flow hedges:	Natural gas cash flow hedges:										Natural gas cash flow hedges:
Amount of gain reclassified from AOCI (as defined below) into earnings (a)		Cost of sales	$	(21)	$	(4)	$	(47)	$	(6)
Amount of loss (gain) reclassified from AOCI (as defined below) into earnings (a)											Amount of loss (gain) reclassified from AOCI (as defined below) into earnings (a)	Cost of sales	$	18	$	(10)

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

Derivative activity not designated as hedging instruments:	Derivative activity not designated as hedging instruments:										Derivative activity not designated as hedging instruments:

Foreign currency:	Foreign currency:										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)	$	—
Amount of loss (gain) recognized in earnings (b)											Amount of loss (gain) recognized in earnings (b)	Other expense (income), net	$	6	$	(5)

(a)Accumulated Other Comprehensive Earnings (Deficit) ~~("AOCI"~~(“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,~~expense (income), net. Please refer to the ~~"Other Derivatives"~~“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										Amount of (Gain) Loss Recognized in Comprehensive Earnings
			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
Hedging Type	Hedging Type	Derivative Financial Instrument	2022		2021		2022		2021		Hedging Type	Derivative Financial Instrument	2023		2022
Net investment hedge	Net investment hedge	Cross-currency swaps	$	—	$	(5)	$	(5)	$	(9)	Net investment hedge	Cross-currency swaps	$	—	$	(2)
Cash flow hedge	Cash flow hedge	Natural gas forward swaps	$	(4)	$	(17)	$	(17)	$	(23)	Cash flow hedge	Natural gas forward swaps	$	1	$	(23)
Cash flow hedge	Cash flow hedge	Treasury interest rate lock	$	(2)	$	—	$	(21)	$	(8)	Cash flow hedge	Treasury interest rate lock	$	—	$	(10)
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,~~March 31, 2023, the notional amounts of these natural gas forward swaps was 98 million MMBtu (or MMBtu equivalent) based on U.S. and European indices. The Company has designated these natural gas forward swaps as cash flow hedges, with the last hedge maturing no later than June 2024. A net unrecognized loss of $30 million related to these natural gas forward swaps was included in AOCI as of March 31, 2023, $27 million of which is expected to be reclassified into earning within the next twelve months.

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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. The Company ~~has~~ designated this ~~outstanding~~ forward U.S. Treasury rate lock agreement, which ~~expires~~expired on December 15, 2022, as a cash flow hedge. The locked fixed rate of this agreement iswas 0.994%. In September 2022, ~~the Company de-designated the instrument due to~~a gain of $6 million was recognized as a result of a change in the forecasted issuance of certain senior ~~notes and re-designated~~notes. In December 2022, the ~~effective portion~~Company received cash of $37 million upon the settlement of the ~~instrument~~rate lock agreement, of which ~~resulted~~$31 million will be amortized as a component of interest expense upon the future issuance of senior notes. This unrecognized gain of $31 million was included in ~~the recognition~~AOCI as 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 DecemberMarch 31, 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 ~~September 30, 2022,~~March 31, 2023, the Company had notional amounts of ~~$551~~$361 million for non-designated derivative financial instruments related to foreign currency exposures in U.S. Dollars primarily related to the European Euro, Indian Rupee, Chinese Yuan, Brazilian Real, South Korean Won, ~~Chinese Yuan,~~ and Hong Kong Dollar. In addition, the Company had notional amounts of ~~$19~~$34 million for non-designated derivative financial instruments related to foreign currency exposures in European Euro primarily related to the ~~Russian Ruble,~~ Polish Złoty and Norwegian Krone.

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~~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 ~~nine~~three months of ~~2022.~~2023. The changes in the net carrying value of goodwill by segment are as follows (in millions):

Composites Insulation Roofing Total
Gross carrying amount at December 31, 2021 $ 75 $ 1,481 $ 397 $ 1,953
Acquisitions and Divestitures 356 60 — 416
Foreign Currency Translation (3) (64) (7) (74)
Gross carrying amount at September 30, 2022 428 1,477 390 2,295
Accumulated impairment losses at December 31, 2021 — (963) — (963)
Foreign Currency Translation — 35 — 35
Accumulated impairment losses at September 30, 2022 — (928) — (928)
Balance, net of impairment, at September 30, 2022 $ 428 $ 549 $ 390 $ 1,367

~~Other Intangible Assets~~


	Composites		Insulation		Roofing		Total
Gross carrying amount at December 31, 2022	$	425	$	1,499	$	394	$	2,318


Acquisitions and Divestitures	—		—		—		—

Foreign Currency Translation	1		7		—		8
Gross carrying amount at March 31, 2023	426		1,506		394		2,326

Accumulated impairment losses at December 31, 2022	—		(935)		—		(935)
Foreign Currency Translation	—		(4)		—		(4)
Accumulated impairment losses at March 31, 2023	—		(939)		—		(939)

Balance, net of impairment, at March 31, 2023	$	426	$	567	$	394	$	1,387

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):~~

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

~~(a)Other primarily includes emissions and quarry rights.~~

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

5. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

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.

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


	March 31, 2023						December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks and trade names	$	1,001	$	—	$	1,001	$	1,001	$	—	$	1,001
Customer relationships	641		(256)		385		638		(243)		395
Technology	331		(193)		138		330		(187)		143
Other (a)	88		(2)		86		66		(3)		63
Total other intangible assets	$	2,061	$	(451)	$	1,610	$	2,035	$	(433)	$	1,602

(a)Other primarily includes emissions.

There are three indefinite-lived intangible assets that are at an increased risk of impairment. These intangible assets were partially impaired in the fourth quarter of 2022. If assumptions or estimates with respect to the Company’s future performance vary from what is expected, including those assumptions relating to interest rates, forecasted revenue, 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 following table presents the carrying values of these assets as of March 31, 2023:


Trade names and trademarks	March 31, 2023
European building and technical insulation trade name	$	88
Global cellular glass insulation trademark	$	80
Components branded roofing trademark	$	42

Amortization expense for intangible assets for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 was ~~$14~~$18 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~~$11 million, respectively. Amortization expense for intangible assets is estimated to be ~~$17~~$50 million for the remainder of ~~2022.~~2023.

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		$	66
2024	2024	$	63	2024	$	64
2025	2025	$	56	2025	$	58
2026	2026	$	40	2026	$	43
2027	2027	$	32	2027	$	34
2028				2028	$	34

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

6. PROPERTY, PLANT AND EQUIPMENT

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


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Land	Land	$	205	$	219	Land	$	167	$	166
Buildings and leasehold improvements	Buildings and leasehold improvements	1,225		1,265		Buildings and leasehold improvements	1,222		1,221
Machinery and equipment	Machinery and equipment	5,240		5,343		Machinery and equipment	5,267		5,220
Construction in progress	Construction in progress	387		387		Construction in progress	538		522
		7,057		7,214			7,194		7,129
Accumulated depreciation	Accumulated depreciation	(3,397)		(3,341)		Accumulated depreciation	(3,449)		(3,400)
Property, plant and equipment, net	Property, plant and equipment, net	$	3,660	$	3,873	Property, plant and equipment, net	$	3,745	$	3,729

Machinery and equipment includes certain precious metals used in our production tooling, which comprise approximately 10% of total machinery and equipment as of both ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. 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~~provided by (used for) investing activities in the Consolidated Statements of Cash Flows. There were no non-cash exchanges during the three months ended March 31, 2023. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, ~~these~~ non-cash exchanges resulted in a net increase to Machinery and equipment of $7$4 million ~~and $18 million, respectively,~~ and gains totaling $7 million and $18 million, respectively. During the three and nine months ended September 30, 2021, these non-cash exchanges resulted in a net increase to Machinery and equipment of less than $1 million and $41 million, respectively, and gains totaling less than $1 million and $41 million, respectively.$4 million. The gains are included in Other ~~income,~~expense (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.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

7. ACQUISITIONS

On September 1, 2022, the Company acquired the remaining 50% interest in 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 advances the Composites strategy to 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 recognition of a gain of $130 million, which was recorded in Gain on equity method investment on the 2022 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 Company is continuing to obtain information to complete its valuation of certain assets and liabilities. The preliminary purchase price allocation included $58 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 $243 million in goodwill, of which 50% is tax deductible. 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 August 1, 2022, the Company acquired Natural Polymers, LLC (“Natural Polymers”), an innovative manufacturer of spray polyurethane foam insulation for building and construction applications for $111 million, net of cash acquired. The acquisition advances the Owens Corning strategy to strengthen the Company’s core building and construction products and 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 Insulation segment within the Consolidated Financial Statements since the date of the acquisition. The Company is continuing to obtain information to complete its valuation of certain assets and liabilities. The preliminary purchase price allocation included $44 million in intangible assets and $62 million in goodwill, all of which is tax deductible. The intangible assets consist of definite-lived trademarks of $5 million with an estimated weighted average life of 10 years, 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 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 Company is continuing to obtain information to complete its valuation of certain assets and liabilities. The preliminary purchase price allocation included $38 million in intangible assets and $68 million in goodwill, of which $61 million is tax deductible. The intangible assets consist of definite-lived trademarks of $7 million with an estimated average life of 10 years, 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.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

7. ACQUISITIONS (continued)

On May 23, 2022, Owens Corning and Pultron Composites ~~("Pultron"~~(“Pultron”) formed a joint venture ~~("JV"~~(“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 of $25 million 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. The Company is continuing to obtain information to complete its valuation of certain assets and liabilities. The preliminary purchase price allocation ~~is preliminary and resulted in the recognition of~~included $15 million in intangible assets, consisting of technology, with an estimated weighted average life of 15 years and $42 million in ~~goodwill.~~ goodwill, of which $37 million is tax deductible. 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.

8. DIVESTITURES

On ~~June 1, 2022,~~March 3, 2023, the Company ~~acquired all~~finalized the sale of the ~~outstanding assets~~Company’s Insulation site in Santa Clara, California for total proceeds of ~~WearDeck®, a premium producer of composite weather-resistant decking for commercial and residential applications, for approximately $133~~$234 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~~transaction fees. Total proceeds included a ~~preliminary purchase price allocation for WearDeck® have been included~~non-refundable deposit of $50 million received in the ~~Composites segment within the Consolidated Financial Statements since the date~~third quarter of the acquisition. The purchase price allocation is preliminary and resulted in the recognition of $38 million in intangible assets and $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~~2021. As a result of this ~~acquisition on revenues and earnings was not material.~~

~~On August 1, 2022,~~sale, the Company acquired Natural Polymers, LLC ("Natural Polymers"), an innovative manufacturer of spray polyurethane foam insulation for building and construction applications for $111 million, net of cash acquired. The acquisition advances the Owens Corning strategy to strengthen the Company's core building and construction products and expand its addressable markets into higher-growth segments. The operating results andrecognized a preliminary purchase price allocation for Natural Polymers have been included in the 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 September 1, 2022, the Company acquired the remaining 50% interest in 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 advances the Composites strategy to 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 recognition of apre-tax gain of ~~$130~~$189 million which is recorded in Gain on ~~equity method investment~~sale of site 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 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~~On November 24, 2022, the Company finalized the sale of ~~Contents~~

~~- 20 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

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

~~(unaudited)~~

~~8. DIVESTITURES~~its Russian operations within the Composites and Insulation segments. As a result of this sale, the Company received $104 million, net of cash sold, in consideration and recorded a pre-tax loss of $33 million in Other expense (income), net on the 2022 Consolidated Statements of Earnings.

On July 1, 2022, the Company finalized the sale of the European portion of the dry-use chopped strands ~~("DUCS"~~(“DUCS”) product line located in Chambéry, France, within the ~~Composite's~~Composites segment. As a result of this sale, the Company received ~~$75~~$80 million, net of cash sold, in ~~consideration. In the second quarter of 2022, the Company~~consideration and recorded a pre-tax ~~charge~~loss of ~~$29~~$30 million in Other ~~income,~~expense (income), net on the 2022 Consolidated Statements of ~~Earnings to reflect fair value less cost to sell of these assets.~~

On September 13, 2022, the Company entered into an agreement to sell the 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 result of 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.Earnings.

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~~2022 Form 10-K for information about our separately-priced extended warranty contracts. A reconciliation of the warranty liability is as follows (in millions):


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Beginning balance	Beginning balance	$	81	$	72	Beginning balance	$	88	$	81
Amounts accrued for current year	Amounts accrued for current year	16		17		Amounts accrued for current year	5		4
Settlements of warranty claims	Settlements of warranty claims	(9)		(10)		Settlements of warranty claims	(2)		(2)
Ending balance	Ending balance	$	88	$	79	Ending balance	$	91	$	83

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- 2120 -

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~~Company’s growth strategy.

~~ACQUISITION AND DIVESTITURE-RELATED COSTS~~European Operating Structure Optimization

In March 2023, the Company took actions to optimize the operating structure of its segments across Europe to increase its competitiveness. These actions are expected to result in cumulative incremental costs of approximately $20 million, primarily related to severance and other exit costs, and generate savings of approximately $20 million annually by 2024. During the first ~~nine~~three months of ~~2022,~~2023, the Company ~~incurred $5~~recorded $11 million of ~~transaction costs~~charges primarily related to ~~its announced acquisitions and divestitures. Please refer to Note 7 and Note 8 of the Consolidated Financial Statements for further information regarding these actions.~~

~~RESTRUCTURING RELATED-COSTS~~severance costs.

Exit of DUCS Product Line

On July 1, 2022, the Company finalized the sale of the European portion of the ~~dry-use chopped strands ("DUCS")~~DUCS product line located in Chambéry, France, within the ~~Composite's~~Composite’s segment. The Company recorded a pre-tax charge of ~~$29~~$30 million in Other ~~income,~~expense (income), net on the Consolidated Statements of Earnings in ~~the second quarter~~2022 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~~actions 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, during the first three months of 2023, the Company recorded $3 million ~~associated with these actions in 2022.~~primarily related to accelerated depreciation and other exit costs. 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~~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 ~~nine~~three months of ~~2022,~~2023, the Company recorded $2$1 million of charges primarily related to other exit costs. The Company ~~expects~~does not expect to recognize ~~$4 million of~~significant incremental ~~charges~~costs related to these actions.

Santa Clara Insulation Site

During the third quarter of 2021, the Company entered into a ~~purchase and sale~~sales agreement for the ~~Company's~~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~~Company’s ongoing strategy to operate a flexible, cost-efficient manufacturing network and geographically locate its assets to better ~~service~~serve its customers. ~~Cumulative cash pre-tax charges associated with~~On March 3, 2023, the Company finalized the sale of this site for total proceeds of $234 million, net of transaction ~~are expected to be~~fees. Total proceeds included a non-refundable deposit of $50 million received in the ~~range~~third quarter 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.2021.

During the first ~~nine~~three months of ~~2022,~~2023, the Company recorded ~~$22~~$3 million of charges, primarily related to ~~accelerated depreciation,~~other exit costs, 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 nine months of 2022, the Company recorded $2 million of charges primarily related to accelerated depreciation.action. 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 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.this action.

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 September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
Type of cost	Type of cost	Location	2022		2021		2022		2021		Type of cost	Location	2023		2022
Accelerated depreciation	Accelerated depreciation	Cost of sales	$	9	$	6	$	22	$	8	Accelerated depreciation	Cost of sales	$	1	$	6
Other exit costs	Other exit costs	Cost of sales	1		—		4		—		Other exit costs	Cost of sales	7		—
Other exit costs		Marketing and administrative expenses	—		—		—		1

Severance	Severance	Other income, net	—		12		1		10		Severance	Other expense (income), net	9		—
Other exit costs (gains)	Other exit costs (gains)	Other income, net	2		(15)		4		(14)		Other exit costs (gains)	Other expense (income), net	1		(27)
Acquisition-related costs		Gain on equity method investment	(130)		—		(130)		—
Acquisition-related costs		Marketing and administrative expenses	2		—		5		—
Other exit costs		Non-operating income	—		2		—		2
Gain on sale of Santa Clara, California site											Gain on sale of Santa Clara, California site	Gain on sale of site	(189)		—

Total restructuring, acquisition and divestiture-related (gains) costs	Total restructuring, acquisition and divestiture-related (gains) costs		$	(116)	$	5	$	(94)	$	7	Total restructuring, acquisition and divestiture-related (gains) costs		$	(171)	$	(21)

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- 21 -

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~~Company’s restructuring activities (in millions):


		Exit DUCS Product Line		Roofing Components Restructuring Actions		Santa Clara Insulation Site		2020 Insulation Restructuring Actions		Acquisition- Related Restructuring			European Operating Structure Optimization		Composites Strategic Realignment Actions		Roofing Components Restructuring Actions		Santa Clara Insulation Site
Balance at December 31, 2021		$	—	$	1	$	13	$	1	$	5
Balance at December 31, 2022												Balance at December 31, 2022	$	—	$	1	$	—	$	7
Restructuring costs	Restructuring costs	3		2		22		2		—		Restructuring costs	11		3		1		3
Payments	Payments	—		(1)		(4)		(1)		(2)		Payments	—		(3)		(1)		(9)
Accelerated depreciation and other non-cash items	Accelerated depreciation and other non-cash items	(2)		(2)		(19)		(1)		—		Accelerated depreciation and other non-cash items	—		1		—		—

Balance at September 30, 2022		$	1	$	—	$	12	$	1	3
Balance at March 31, 2023												Balance at March 31, 2023	$	11	$	2	$	—	$	1
Cumulative charges incurred	Cumulative charges incurred	$	3	$	7	$	47	$	29	$	27	Cumulative charges incurred	$	11	$	12	$	9	$	63

As of ~~September 30, 2022,~~March 31, 2023, the remaining liability balance is comprised of ~~$16~~$14 million of severance, ~~which~~inclusive of $2 million of non-current severance and $12 million of severance the Company expects to pay over the next twelve months.

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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):


		September 30, 2022				December 31, 2021				March 31, 2023						December 31, 2022
		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	$	398	98	%	$	397	107	%		4.200% senior notes, net of discount and financing fees, due 2024	$	398	99	%		$	398	99	%
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		92	%	397		106	%		3.400% senior notes, net of discount and financing fees, due 2026	398		95	%		398		94	%
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		89	%	446		110	%		3.950% senior notes, net of discount and financing fees, due 2029	446		94	%		446		90	%
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		87	%	297		109	%		3.875% senior notes, net of discount and financing fees, due 2030	298		93	%		298		89	%
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		103	%	368		141	%		7.000% senior notes, net of discount and financing fees, due 2036	368		113	%		368		107	%
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		75	%	589		115	%		4.300% senior notes, net of discount and financing fees, due 2047	589		83	%		589		78	%
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		75	%	390		118	%		4.400% senior notes, net of discount and financing fees, due 2048	391		84	%		390		78	%

Various finance leases, due through 2050 (a)	Various finance leases, due through 2050 (a)	125		100	%	99		100	%		Various finance leases, due through 2050 (a)	138		100	%		131		100	%
Other	Other	2		N/A		2		N/A			Other	2		N/A			2		N/A
Total long-term debt	Total long-term debt	3,013		N/A		2,985		N/A			Total long-term debt	3,028		N/A			3,020		N/A
Less – current portion (a)	Less – current portion (a)	25		100	%	25		100	%		Less – current portion (a)	29		100	%		28		100	%
Long-term debt, net of current portion	Long-term debt, net of current portion	$	2,988	N/A		$	2,960	N/A			Long-term debt, net of current portion	$	2,999	N/A			$	2,992	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~~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.

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- 2423 -

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 ~~September 30, 2022.~~March 31, 2023.

Senior Revolving Credit Facility

The Company has an $800 million senior revolving credit facility (the ~~"Senior~~“Senior Revolving Credit ~~Facility"~~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 ~~September 30, 2022.~~March 31, 2023. Please refer to the Credit Facility Utilization section below for liquidity information as of ~~September 30, 2022.~~March 31, 2023.

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~~“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'~~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 ~~September 30, 2022.~~March 31, 2023. Please refer to the Credit Facility Utilization section below for liquidity information as of ~~September 30, 2022.~~March 31, 2023.

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.

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- 2524 -

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 September 30, 2022					Balance at March 31, 2023
		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$1 million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The short-term borrowings consisted of various operating lines of credit. The weighted average interest rate on all short-term borrowings was approximately ~~1.6%~~3.7% and ~~1.5%~~2.8% as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively.

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- 2625 -

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'~~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 September 30,
2022 2021

U.S. Non-U.S. Total U.S. Non-U.S. Total
Components of Net Periodic Pension Cost
Service cost $ 3 $ 1 $ 4 $ 1 $ 1 $ 2
Interest cost 6 3 9 6 3 9
Expected return on plan assets (9) (4) (13) (9) (5) (14)
Amortization of actuarial loss 2 — 2 3 1 4
Contractual termination benefit — — — 2 — 2
Net periodic pension cost $ 2 $ — $ 2 $ 3 $ — $ 3

Nine Months Ended September 30,
2022 2021

U.S. Non-U.S. Total U.S. Non-U.S. Total
Components of Net Periodic Pension Cost
Service cost $ 5 $ 3 $ 8 $ 4 $ 4 $ 8
Interest cost 18 8 26 17 7 24
Expected return on plan assets (27) (12) (39) (27) (14) (41)
Amortization of actuarial loss 8 1 9 9 3 12
Contractual termination benefit — — — 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.~~


	Three Months Ended March 31,
	2023						2022
	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Components of Net Periodic Pension Cost
Service cost	$	1	$	1	$	2	$	1	$	1	$	2
Interest cost	8		4		12		6		3		9
Expected return on plan assets	(10)		(4)		(14)		(9)		(4)		(13)

Amortization of actuarial loss	1		1		2		3		—		3


Contractual termination benefit	—		—		—		—		—		—

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

The Company expects to contribute ~~$20~~$25 million in cash to ~~non-U.S.~~its defined benefit pension plans during ~~2022.~~2023. Actual contributions to the plans may change as a result of a variety of factors, including changes in laws that impact funding requirements. The Company made cash contributions of $5$1 million to ~~the non-U.S.~~its defined benefit pension plans during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

Postemployment and Postretirement Benefits Other than Pensions ~~("OPEB"~~(“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~~

~~- 27 -~~

~~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~~income for ~~aggregated~~ U.S. ~~and non-U.S.~~ plans for the periods indicated (in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Components of Net Periodic Benefit Cost
Components of Net Periodic Benefit Income										Components of Net Periodic Benefit Income
Service cost	Service cost	$	—	$	—	$	1	$	1	Service cost	$	—	$	1
Interest cost	Interest cost	1		1		3		3		Interest cost	1		1
Amortization of prior service credit		—		—		—		(1)

Amortization of actuarial gain	Amortization of actuarial gain	(2)		(2)		(6)		(6)		Amortization of actuarial gain	(2)		(2)
Net periodic benefit income	Net periodic benefit income	$	(1)	$	(1)	$	(2)	$	(3)	Net periodic benefit income	$	(1)	$	—

There was no significant net periodic postretirement income attributable to non-U.S. plans.

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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~~are required to use 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 ~~September 30, 2022,~~March 31, 2023, the Company was involved with a total of 2322 sites worldwide, including 10 Superfund and state or country equivalent sites and 1312 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 ~~September 30, 2022,~~March 31, 2023, the Company had an accrual totaling $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.

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- 2927 -

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 ~~September 30, 2022,~~March 31, 2023, the number of shares remaining available under the 2019 Stock Plan for all stock awards was approximately ~~2.7~~2.0 million.

~~Prior to 2019, employees were eligible to receive stock awards under~~On April 20, 2023, the Company’s stockholders approved the Owens Corning ~~2016~~2023 Stock Plan (the “2023 Stock Plan”), which authorizes grants of stock options, stock appreciation rights, stock awards (including restricted stock awards, restricted stock units and bonus stock awards), performance share awards and performance share units. Under the ~~Owens Corning 2013~~2023 Stock Plan, 1.37 million shares of common stock may be granted in addition to the approximately 2.0 million shares of Company common stock that rolled over from the 2019 Stock Plan as of April 20, 2023. Such shares of common stock include shares that were available but not granted, or which were granted but not issued or delivered due to expiration, termination, cancellation or forfeiture of such awards. There will be no future grants made under the 2019 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
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Total stock-based compensation expense $ 13 $ 12 $ 38 $ 36


	Three Months Ended March 31,
	2023		2022
Total stock-based compensation expense	$	13	$	12

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 ~~September 30, 2022,~~March 31, 2023, there was no unrecognized compensation cost related to stock options and the ~~range of~~ exercise ~~prices~~price on outstanding stock options was ~~$37.65 - $42.16.~~$37.65.

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

Weighted-Average

Number of
Options
Exercise Price Remaining
Contractual Life
(in years) Intrinsic Value (in millions)
Outstanding, December 31, 2021 55,900 $ 39.34 1.71 $ 3
Exercised (22,100) 41.20
Outstanding, September 30, 2022 33,800 $ 38.13 1.24 $ 1
Exercisable, September 30, 2022 33,800 $ 38.13 1.24 $ 1


		Weighted-Average
	Number of Options	Exercise Price		Remaining Contractual Life (in years)	Intrinsic Value (in millions)
Outstanding, December 31, 2022	27,000	$	37.65	1.10	$	1

Exercised	(800)	37.65


Outstanding, March 31, 2023	26,200	$	37.65	0.85	$	2
Exercisable, March 31, 2023	26,200	$	37.65	0.85	$	2

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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 Plans~~stock plans allow alternate vesting schedules for death, disability, and retirement. The weighted average grant date fair value of RSUs granted in ~~2022~~2023 was ~~$90.71.~~

~~Table of Contents~~

~~- 30 -~~

~~OWENS CORNING AND SUBSIDIARIES~~

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

~~(unaudited)~~

~~14. STOCK COMPENSATION (continued)~~

$98.80.

The following table summarizes the Company’s RSU ~~plans:~~activity:


		Number of RSUs	Weighted-Average Fair Value			Number of RSUs	Weighted-Average Fair Value
Balance at December 31, 2021		1,268,993	$	62.25
Balance at December 31, 2022					Balance at December 31, 2022	1,276,160	$	69.16
Granted	Granted	360,856	90.71		Granted	321,238	98.80
Vested	Vested	(305,056)	67.49		Vested	(306,214)	71.33
Forfeited	Forfeited	(53,804)	75.11		Forfeited	(8,245)	85.76
Balance at September 30, 2022		1,270,989	$	68.35
Balance at March 31, 2023					Balance at March 31, 2023	1,282,939	$	75.83

As of ~~September 30, 2022,~~March 31, 2023, there was ~~$39~~$57 million of total unrecognized compensation cost related to RSUs. That cost is expected to be recognized over a weighted-average period of ~~2.42~~2.65 years. The total grant date fair value of shares vested during the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was ~~$21~~$22 million and ~~$25~~$20 million, respectively.

Performance Share Units

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

In the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the Company granted both internal Company-based and external-based metric PSUs.

Internal Company-based metrics

The internal 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%~~200% of PSUs awarded depending on each ~~award's~~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~~issued in or after 2018 until 2022 were based on the ~~Company's~~Company’s total stockholder return relative to the performance of the Dow Jones U.S. Construction & Materials Index. Outstanding grants issued in 2023 are based on the Company’s total stockholder return relative to a peer group. 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.

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- 29 -

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 PSUs granted in 2023 and 2022:


				Three Months Ended March 31,
						2023		2022
Expected volatility	Expected volatility	41.65%			Expected volatility	44.66%		41.65%
Risk free interest rate	Risk free interest rate	1.36%			Risk free interest rate	3.75%		1.36%
Expected term (in years)	Expected term (in years)	2.91			Expected term (in years)	2.91
Grant date fair value of units granted	Grant date fair value of units granted	$	122.69		Grant date fair value of units granted	$	119.33	$	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 ~~September 30, 2022,~~March 31, 2023, there was ~~$23~~$31 million total unrecognized compensation cost related to PSUs. That cost is expected to be recognized over a weighted-average period of ~~1.75~~2.07 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		309,971	$	74.78
Balance at December 31, 2022					Balance at December 31, 2022	303,716	$	91.47

Granted	Granted	146,784	98.94		Granted	155,469	101.76

Forfeited	Forfeited	(12,051)	80.07		Forfeited	(4,284)	91.53
Balance at September 30, 2022		444,704	$	82.59
Balance at March 31, 2023					Balance at March 31, 2023	454,901	$	94.65

Employee Stock Purchase Plan

The Owens Corning Employee Stock Purchase Plan ~~("ESPP"~~(“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~~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 ~~September 30, 2022, 3.7~~March 31, 2023, 3.5 million shares remain available for purchase.

Included in total stock-based compensation expense is ~~$1 million and $4~~$2 million of expense related to the ~~Company's~~Company’s ESPP recognized during the three ~~and nine~~ months ended ~~September 30, 2022, respectively.~~March 31, 2023. During the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, the Company recognized expense of $1 million ~~and $4 million, respectively,~~ related to the ~~Company's~~Company’s ESPP. As of ~~September 30, 2022,~~March 31, 2023, there was $1 million of total unrecognized compensation cost related to the ESPP.

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- 3230 -

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Net earnings attributable to Owens Corning	Net earnings attributable to Owens Corning	$	470	$	260	$	1,117	$	768	Net earnings attributable to Owens Corning	$	383	$	304
Weighted-average number of shares outstanding used for basic earnings per share	Weighted-average number of shares outstanding used for basic earnings per share	96.3		103.1		97.8		104.4		Weighted-average number of shares outstanding used for basic earnings per share	91.3		99.5
Non-vested restricted and performance shares		0.8		0.7		0.9		0.7
Non-vested restricted stock units and performance share units										Non-vested restricted stock units and performance share units	0.6		0.7
Options to purchase common stock	Options to purchase common stock	—		0.1		—		0.1		Options to purchase common stock	—		—
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	97.1		103.9		98.7		105.2		Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share	91.9		100.2
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	$	4.88	$	2.52	$	11.42	$	7.36	Basic	$	4.19	$	3.06
Diluted	Diluted	$	4.84	$	2.50	$	11.32	$	7.30	Diluted	$	4.17	$	3.03

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and March 31, 2022, ~~and September 30, 2021,~~ there were no non-vested RSUs or PSUs that had an anti-dilutive effect on earnings per share.

On February 14, 2022, the Board of Directors approved a 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 “February 2022 Repurchase Authorization”).

On December 1, 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"~~“December 2022 Repurchase Authorization”). The December 2022 Repurchase Authorization is in addition to the February 2022 Repurchase Authorization (together, 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~~Company’s discretion. The Company repurchased ~~6.0~~1.5 million shares of its common stock for ~~$521~~$136 million, inclusive of applicable taxes, during the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, under the Repurchase Authorization. As of ~~September 30, 2022, 7.4~~March 31, 2023, 12.9 million shares remain available for repurchase under the Repurchase Authorization.

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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 September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2022			2021			2022			2021				2023			2022
Income tax expense	Income tax expense	$	114		$	94		$	340		$	250		Income tax expense	$	130		$	107
Effective tax rate	Effective tax rate	20		%	27		%	23		%	25		%	Effective tax rate	25		%	26		%

The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~September 30, 2022~~March 31, 2023 is primarily due to U.S. state and local income tax expense, ~~non-taxable gain on 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 nine months ended 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~~the U.S. government enacted the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) into law, which includes a new corporate alternative minimum tax and an excise tax of 1% on the ~~“Inflation Reduction Act.”~~fair market value of net stock repurchases. Both provisions are effective for years after December 31, 2022. The ~~company continues~~Company does not anticipate being subject to ~~evaluate~~ the ~~impact of the new law and awaits further guidance from the government.~~

corporate alternative minimum tax in 2023.

The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~September 30, 2021~~March 31, 2022 is primarily due to U.S. state and local income tax expense, U.S. federal taxes on foreign earnings, 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 nine months ended 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 to assert indefinite reinvestment in accordance with Accounting Standards Codification ~~("ASC"~~(“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.~~legislation.

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OWENS CORNING AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

17. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE ~~INCOME~~DEFICIT

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,

		2022		2021		2022		2021			2023		2022
Currency Translation Adjustment	Currency Translation Adjustment									Currency Translation Adjustment
Beginning balance	Beginning balance	$	(358)	$	(233)	$	(279)	$	(220)	Beginning balance	$	(380)	$	(279)
Net investment hedge amounts classified into AOCI, net of tax	Net investment hedge amounts classified into AOCI, net of tax	—		4		4		7		Net investment hedge amounts classified into AOCI, net of tax	—		2

Loss on foreign currency translation		(160)		(39)		(243)		(55)
Other comprehensive (loss), net of tax		(160)		(35)		(239)		(48)
Gain (loss) on foreign currency translation										Gain (loss) on foreign currency translation	31		(29)
Other comprehensive income (loss), net of tax										Other comprehensive income (loss), net of tax	31		(27)
Ending balance	Ending balance	$	(518)	$	(268)	$	(518)	$	(268)	Ending balance	$	(349)	$	(306)
Pension and Other Postretirement Adjustment	Pension and Other Postretirement Adjustment									Pension and Other Postretirement Adjustment
Beginning balance	Beginning balance	$	(309)	$	(374)	$	(318)	$	(372)	Beginning balance	$	(301)	$	(318)
Amounts reclassified from AOCI to net earnings, net of tax (a)	Amounts reclassified from AOCI to net earnings, net of tax (a)	—		2		2		4		Amounts reclassified from AOCI to net earnings, net of tax (a)	—		1
Amounts classified into AOCI, net of tax	Amounts classified into AOCI, net of tax	6		31		13		27		Amounts classified into AOCI, net of tax	(1)		2

Other comprehensive income, net of tax		6		33		15		31
Other comprehensive (loss) income, net of tax										Other comprehensive (loss) income, net of tax	(1)		3
Ending balance	Ending balance	$	(303)	$	(341)	$	(303)	$	(341)	Ending balance	$	(302)	$	(315)
Hedging Adjustment	Hedging Adjustment									Hedging Adjustment
Beginning balance	Beginning balance	$	39	$	14	$	16	$	4	Beginning balance	$	—	$	16

Amounts reclassified from AOCI to net earnings, net of tax (b)	Amounts reclassified from AOCI to net earnings, net of tax (b)	(16)		(3)		(35)		(5)		Amounts reclassified from AOCI to net earnings, net of tax (b)	14		(8)
Amounts classified into AOCI, net of tax	Amounts classified into AOCI, net of tax	22		15		64		27		Amounts classified into AOCI, net of tax	(15)		32

Other comprehensive income, net of tax		6		12		29		22
Other comprehensive (loss) income, net of tax										Other comprehensive (loss) income, net of tax	(1)		24
Ending balance	Ending balance	$	45	$	26	$	45	$	26	Ending balance	$	(1)	$	40
Total AOCI ending balance	Total AOCI ending balance	$	(776)	$	(583)	$	(776)	$	(583)	Total AOCI ending balance	$	(652)	$	(581)

(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.

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- 3533 -

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

This Management’s Discussion and Analysis ("(“MD~~&A"~~&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~~committed to building a sustainable ~~solutions.~~future through material innovation. 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 ~~$470~~$383 million in the ~~third~~first quarter of ~~2022,~~2023, compared to ~~$260~~$304 million in the same period of ~~2021.~~2022. The Company reported ~~$610~~$534 million in earnings before interest and taxes ~~("EBIT"~~(“EBIT”) for the ~~third~~first quarter of ~~2022~~2023 compared to ~~$394~~$442 million in the same period of ~~2021.~~2022. The Company generated ~~$487~~$361 million in adjusted earnings before interest and taxes (“Adjusted EBIT”) for the ~~third~~first quarter of ~~2022~~2023 compared to ~~$400~~$417 million in the same period of ~~2021.~~2022. 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. ~~Third~~First quarter of ~~2022~~2023 EBIT performance compared to the same period of ~~2021 increased $25 million, $49 million, and $17~~2022 decreased $105 million in our Composites segment, and increased $27 million and $33 million in our Insulation and Roofing segments, respectively. Within our Corporate, Other and Eliminations category, General corporate expense and other increased by $4$11 million.

Cash and cash equivalents were ~~$751~~$757 million as of ~~September 30, 2022,~~March 31, 2023, compared to ~~$920~~$748 million as of ~~September 30, 2021~~March 31, 2022 as a result of ~~increased~~higher cash ~~outflows from~~flow provided by investing activities, partially offset by ~~higher earnings.~~increased usage of cash from operations. In the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the ~~Company's~~Company’s operating activities ~~provided $1,085~~used $164 million of cash, ~~flow,~~ compared to ~~$1,168~~providing $158 million of cash in the same period in ~~2021~~2022 due to ~~an increase~~decreases in operating ~~assets, specifically receivables and inventory,~~liabilities, mostly accounts payable, in ~~2022~~2023 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. On September 13, 2022, the Company entered into an agreement to 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 result of this uncertainty, management determined assets held for sale treatment had not been triggered as of 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 September 1, 2022, the Company acquired the remaining 50% interest in 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 advances the Composites strategy to 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 recognition of 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 August 1, 2022, the Company acquired Natural Polymers, LLC ("Natural Polymers"), an innovative manufacturer of spray polyurethane foam insulation for building and construction applications for $111 million, net of cash acquired. The acquisition advances the Owens Corning strategy to strengthen the Company's core building and construction products and 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 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,~~March 3, 2023, the Company finalized the sale of the ~~European portion~~Company’s Insulation site in Santa Clara, California for total proceeds of $234 million, net of transaction fees. Total proceeds included a non-refundable deposit of $50 million received in the ~~dry-use chopped strands ("DUCS") product line located in Chambéry, France, within the Composite's segment.~~third quarter 2021. As a result, ~~of this sale,~~ the Company ~~received consideration of $75 million, net of cash sold. In the second quarter of 2022, the Company recorded~~recognized a pre-tax ~~charge~~gain of ~~$29~~$189 million in ~~Other income, net~~the first quarter 2023, which is recorded in Gain on sale of site on the Consolidated Statements of ~~Earnings to reflect fair value less cost to sell of these assets.~~

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 $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 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. 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.Earnings.

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- 3734 -

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 September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2022			2021			2022			2021				2023			2022
Net sales	Net sales	$	2,529		$	2,213		$	7,476		$	6,367		Net sales	$	2,331		$	2,346
Gross margin	Gross margin	$	693		$	596		$	2,046		$	1,658		Gross margin	$	589		$	619
% of net sales	% of net sales	27		%	27		%	27		%	26		%	% of net sales	25		%	26		%
Marketing and administrative expenses	Marketing and administrative expenses	$	201		$	186		$	586		$	548		Marketing and administrative expenses	$	204		$	184

Gain on equity method investment		$	(130)		$	—		$	(130)		$	—
Other income, net		$	(12)		$	(3)		$	(18)		$	(68)

Gain on sale of site														Gain on sale of site	$	(189)		—
Other expense (income), net														Other expense (income), net	$	12		$	(28)
Earnings before interest and taxes	Earnings before interest and taxes	$	610		$	394		$	1,541		$	1,123		Earnings before interest and taxes	$	534		$	442
Interest expense, net	Interest expense, net	$	28		$	31		$	82		$	97		Interest expense, net	$	22		$	28
Loss on extinguishment of debt		$	—		$	9		$	—		$	9

Income tax expense	Income tax expense	$	114		$	94		$	340		$	250		Income tax expense	$	130		$	107
Net earnings attributable to Owens Corning	Net earnings attributable to Owens Corning	$	470		$	260		$	1,117		$	768		Net earnings attributable to Owens Corning	$	383		$	304

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 ~~third~~first quarter ~~and year-to-date 2022,~~2023, net sales ~~increased $316~~decreased $15 million ~~and increased $1,109 million, respectively,~~ compared to the same ~~periods~~period in ~~2021. For the third quarter and year-to-date, the increase in net sales was driven by higher~~2022. Higher selling prices ~~and favorable customer mix which~~ were ~~partially~~ offset by lower sales ~~volumes~~volumes. Favorable customer and product mix was more than offset by the unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

GROSS MARGIN

In the ~~third~~first quarter ~~and year-to-date 2022,~~2023, gross margin ~~increased $97~~decreased $30 million ~~and increased $388 million, respectively,~~ compared to the same ~~periods~~period in ~~2021 driven by higher~~2022. Higher selling prices ~~partially~~were more than offset by higher input cost inflation, lower sales volumes and ~~transportation costs in all three segments.~~higher manufacturing costs.

MARKETING AND ADMINISTRATIVE EXPENSES

In the ~~third~~first quarter ~~and year-to-date 2022,~~2023, marketing and administrative expenses increased ~~$15~~$20 million ~~and increased $38 million, respectively,~~ compared to the same ~~periods~~period in ~~2021~~2022. The increase was driven primarily by ongoing inflationary pressures throughout the organization as well as higher general corporate ~~expenses as business activities return to a more typical, post-pandemic level.~~expenses.

GAIN ON ~~EQUITY METHOD INVESTMENT~~SALE OF SITE

In the ~~third~~first quarter ~~and year-to-date 2022,~~2023, the Company ~~remeasured~~finalized the ~~previously held equity method investment to its fair value~~sale of ~~$147 million,~~the Company’s Insulation site in Santa Clara, California resulting in the recognition of a ~~non-cash~~pre-tax gain of ~~$130~~$189 million.

OTHER ~~INCOME,~~EXPENSE (INCOME), NET

In the ~~third~~first quarter ~~and year-to-date 2022,~~2023, other ~~income~~expense increased $9$40 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.~~2022 driven primarily by a $27 million gain on the sale of the Shanghai, China facility recognized in the first quarter 2022 and higher amortization expense compared to the same period in 2022.

INTEREST EXPENSE, NET

In the first quarter 2023, interest expense, net, decreased $6 million compared to the same period in 2022 mainly driven by higher interest income and capitalized interest.

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

~~INTEREST EXPENSE, NET~~

In the third quarter and year-to-date 2022, interest expense, net, decreased $3 million and decreased $15 million, respectively, compared to the same periods in 2021. For the third quarter, the decrease is mainly driven by higher interest income. For year-to-date 2022, 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 nine~~ months ended ~~September 30, 2022~~March 31, 2023 was ~~$114 million and $340 million, respectively.~~$130 million. For the ~~third~~first quarter of ~~2022,~~2023, the ~~Company's~~Company’s effective tax rate was ~~20% and for the nine months ended September 30, 2022, the Company's effective tax rate was 23%~~25%. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~September 30, 2022~~March 31, 2023 is primarily due to U.S. state and local income tax expense, non-taxable gain on 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 nine months ended 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.

Income tax expense for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 was ~~$94 million and $250 million, respectively.~~$107 million. For the ~~third~~first quarter of ~~2021,~~2022, the ~~Company's~~Company’s effective tax rate was ~~27% and for the nine months ended September 30, 2021 the Company's effective tax rate was 25%~~26%. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended ~~September 30, 2021~~March 31, 2022 is primarily due to U.S. state and local income tax expense, U.S. federal taxes on foreign earnings, ~~and other discrete adjustments. The difference between the effective tax~~foreign rate and the U.S. federal statutory tax rate of 21% for the nine months ended 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 compensationdifferential 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.

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 September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
		Location	2022		2021		2022		2021			Location	2023		2022
Restructuring costs	Restructuring costs	Cost of sales	$	(10)	$	(6)	$	(26)	$	(8)	Restructuring costs	Cost of sales	$	(8)	$	(6)
Restructuring costs		Marketing and administrative expenses	—		—		—		(1)

Severance	Severance	Other income, net	—		(12)		(1)		(10)		Severance	Other expense (income), net	(9)		—
Other exit costs	Other exit costs	Other income, net	(2)		—		(2)		(1)		Other exit costs	Other expense (income), net	(1)		—
Gain on sale of land in India		Other income, net	—		15		—		15
Restructuring costs		Non-operating income	—		(2)		—		(2)
Acquisition-related costs		Marketing and administrative expenses	(2)		—		(5)		—

Gain on sale of Santa Clara, California site											Gain on sale of Santa Clara, California site	Gain on sale of site	189		—

Gain on sale of Shanghai, China facility	Gain on sale of Shanghai, China facility	Other income, net	—		—		27		—		Gain on sale of Shanghai, China facility	Other expense (income), net	—		27
Impairment loss on Chambery, France assets held for sale		Other income, net	—		—		(29)		—
Gain on remeasurement of Fiberteq equity investment		Gain on equity method investment	130		—		130		—
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		$	116	$	(6)	$	94	$	(8)	Total restructuring, acquisition and divestiture-related costs		$	171	$	21

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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~~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
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Restructuring costs $ (12) $ (20) $ (29) $ (22)
Gain on sale of Shanghai, China facility — — 27 —
Gain on sale of land in India — 15 — 15
Gains on sale of certain precious metals 7 — 18 41
Gain on remeasurement of Fiberteq equity investment 130 — 130 —
Acquisition-related costs (2) — (5) —
Impairment loss on Chambery, France assets held for sale — — (29) —
Recognition of acquisition inventory fair value step-up — (1) — (1)
Total adjusting items $ 123 $ (6) $ 112 $ 33


	Three Months Ended March 31,
	2023		2022
Restructuring costs	$	(18)	$	(6)
Gain on sale of Shanghai, China facility	—		27

Gain on sale of Santa Clara, California site	189		—
Gains on sale of certain precious metals	2		4








Total adjusting items	$	173	$	25

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	470	$	260	$	1,117	$	768	NET EARNINGS ATTRIBUTABLE TO OWENS CORNING	$	383	$	304
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 (loss) earnings attributable to non-redeemable and redeemable noncontrolling interests	(1)		3

NET EARNINGS	NET EARNINGS	469		259		1,119		767		NET EARNINGS	382		307
Equity in net earnings (loss) of affiliates		1		(1)		—		—

Income tax expense	Income tax expense	114		94		340		250		Income tax expense	130		107
EARNINGS BEFORE TAXES	EARNINGS BEFORE TAXES	582		354		1,459		1,017		EARNINGS BEFORE TAXES	512		414
Interest expense, net	Interest expense, net	28		31		82		97		Interest expense, net	22		28
Loss on extinguishment of debt		—		9		—		9

EARNINGS BEFORE INTEREST AND TAXES	EARNINGS BEFORE INTEREST AND TAXES	610		394		1,541		1,123		EARNINGS BEFORE INTEREST AND TAXES	534		442
Less: Adjusting items from above	Less: Adjusting items from above	123		(6)		112		33		Less: Adjusting items from above	173		25
ADJUSTED EBIT	ADJUSTED EBIT	$	487	$	400	$	1,429	$	1,090	ADJUSTED EBIT	$	361	$	417

~~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.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") by segment is a non-GAAP measure that consists of EBIT plus depreciation and amortization. Segment EBITDA is used internally by the Company for analysis of performance.

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

Composites

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


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2022			2021			2022			2021				2023			2022
Net sales	Net sales	$	638		$	591		$	2,071		$	1,733		Net sales	$	585		$	714
% change from prior year	% change from prior year	8		%	13		%	20		%	23		%	% change from prior year	-18		%	28		%
EBIT	EBIT	$	126		$	101		$	434		$	278		EBIT	$	49		$	154
EBIT as a % of net sales	EBIT as a % of net sales	20		%	17		%	21		%	16		%	EBIT as a % of net sales	8		%	22		%
Depreciation and amortization expense	Depreciation and amortization expense	$	40		$	42		$	131		$	119		Depreciation and amortization expense	$	44		$	43
EBITDA														EBITDA	$	93		$	197
EBITDA as a % of net sales														EBITDA as a % of net sales	16		%	28		%

NET SALES

In our Composites segment, net sales in the ~~third~~first quarter of ~~2022 increased $47~~2023 decreased $129 million compared to the same period in ~~2021.~~2022. The ~~increase~~decrease was driven ~~by higher selling prices of $100 million, partially offset~~primarily by lower sales volumes of approximately 7%18%.~~Favorable customer mix~~ Higher selling prices of ~~$15~~$30 million ~~was more than~~were offset by the ~~$19 million~~net impact of divestitures and acquisitions and the 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.~~

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 ~~third~~first quarter of ~~2022 increased $25~~2023 decreased $105 million compared to the same period in ~~2021.~~2022. The decrease was driven by lower sales volumes and $20 million of higher production downtime. Higher selling prices of ~~$100~~$30 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 $163 million of input cost inflation and $35 million in higher transportation costs.inflation. The remaining variance was driven by ~~unfavorable~~higher manufacturing ~~performance, other one-time charges~~costs and the net unfavorable impact of ~~slightly lower sales volumes.~~divestitures and acquisitions of $14 million.

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 to continue tosoften temporarily with ~~increased~~ economic uncertainty, continued input cost inflation and primary labor availability. The Company remains focused on managing costs, capital expenditures, and working capital.

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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 and EBITDA for the Insulation segment (in millions):


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2022			2021			2022			2021				2023			2022
Net sales	Net sales	$	965		$	815		$	2,758		$	2,321		Net sales	$	919		$	859
% change from prior year	% change from prior year	18		%	20		%	19		%	24		%	% change from prior year	7		%	23		%
EBIT	EBIT	$	173		$	124		$	459		$	318		EBIT	$	156		$	129
EBIT as a % of net sales	EBIT as a % of net sales	18		%	15		%	17		%	14		%	EBIT as a % of net sales	17		%	15		%
Depreciation and amortization expense	Depreciation and amortization expense	$	52		$	52		$	156		$	156		Depreciation and amortization expense	$	51		$	53
EBITDA														EBITDA	$	207		$	182
EBITDA as a % of net sales														EBITDA as a % of net sales	23		%	21		%

NET SALES

In our Insulation segment, net sales in the ~~third~~first quarter of ~~2022~~2023 increased ~~$150~~$60 million compared to the same period in ~~2021.~~2022. The increase was driven by higher selling prices of ~~$179 million. Favorable customer and product mix were~~$112 million, partially offset by approximately 2%8% 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~~net impact of $11 million from ~~the acquisition of Natural Polymers were~~acquisitions and divestitures more than offset by the ~~$85~~$16 million unfavorable impact of translating sales denominated in foreign currencies into United States dollars.

EBIT

In our Insulation segment, EBIT in the ~~third~~first quarter of ~~2022~~2023 increased ~~$49~~$27 million compared to the same period in ~~2021.~~2022. Higher selling prices of ~~$179~~$112 million and positive customer and product mix more than offset ~~$89~~$42 million of input cost inflation, lower sales volumes and ~~$17~~$13 million inof higher ~~transportation~~manufacturing costs. The remaining variance was driven about equally by higher ~~selling, general and administrative expenses, unfavorable manufacturing performance, slightly lower sales volumes~~production downtime, increased start-up costs 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 $141 million compared to the same period in 2021. Higher selling prices of $438 million more than offset $246 million of input cost inflation and $46 million in higher transportation costs. Higher selling, general and administrative expenses and the negative impact of translating profits denominated in foreign currencies into United States dollars more than offset favorable customer and product mix.dollar.

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 ~~third~~first quarter of ~~2022,~~2023, the average Seasonally Adjusted Annual Rate (SAAR) of U.S. housing starts was approximately ~~1.461~~1.395 million, down from an annual average of approximately ~~1.566~~1.753 million starts in the ~~third~~first quarter of ~~2021.~~2022.

The Company expects both the North American new residential construction market and global commercial and industrial construction markets to ~~remain stable,~~continue tosoften temporarily with ~~increased~~the weaker macro economic ~~uncertainty,~~outlook, higher interest ratesand continued input cost ~~inflation and primary labor availability.~~inflation. The Company remains focused on managing costs, capital expenditures, and working capital.

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

Roofing

The table below provides a summary of net sales, EBIT, ~~and~~ depreciation and amortization expense and EBITDA 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


	Three Months Ended March 31,
	2023			2022
Net sales	$	895		$	838
% change from prior year	7		%	18		%
EBIT	$	209		$	176
EBIT as a % of net sales	23		%	21		%
Depreciation and amortization expense	$	16		$	14
EBITDA	$	225		$	190
EBITDA as a % of net sales	25		%	23		%

NET SALES

In our Roofing segment, net sales in the ~~third~~first quarter of ~~2022~~2023 increased ~~$134~~$57 million compared to the same period in ~~2021.~~2022. Higher selling prices of ~~$145 million and higher third-party asphalt sales of $32~~$86 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.about 3%.

EBIT

In our Roofing segment, EBIT in the ~~third~~first quarter of ~~2022~~2023 increased ~~$17~~$33 million compared to the same period in ~~2021.~~2022. Higher selling prices of ~~$145~~$86 million more than offset input cost inflation ~~primarily asphalt,~~ of ~~$94 million and $8 million of higher transportation costs.~~$18 million. The remaining variance was driven by ~~the impact of~~higher manufacturing costs and lower sales ~~volumes and unfavorable customer and product mix, as well as, unfavorable manufacturing performance and higher selling, general and administrative expenses.~~volumes.

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 well as, unfavorable customer and product mix and higher selling, general and administrative expenses.OUTLOOK

~~OUTLOOK~~

In our Roofing segment, ~~we expect~~ the ~~factors that have driven strong margins~~Company expects a deceleration in ~~recent years, such as stable remodeling demand, along with sales of roofing components, to continue to deliver profitability. Uncertainties~~the North American new residential construction market. Other uncertainties that may impact ~~our~~ Roofing ~~margins~~demand include demand from ~~storm~~storms and other ~~weather~~weather-related events, demand from ~~new construction,~~repair and remodeling activity, competitive pricing pressure and the cost and availability of raw ~~materials.~~

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

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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,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Restructuring costs	Restructuring costs	$	(12)	$	(20)	$	(29)	$	(22)	Restructuring costs	$	(18)	$	(6)
Gain on sale of land in India		—		15		—		15

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 Santa Clara, California site										Gain on sale of Santa Clara, California site	189		—
Gains on sale of certain precious metals	Gains on sale of certain precious metals	7		—		18		41		Gains on sale of certain precious metals	2		4

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	General corporate expense and other	(41)		(37)		(127)		(108)		General corporate expense and other	(53)		(42)
EBIT	EBIT	$	82	$	(43)	$	(15)	$	(75)	EBIT	$	120	$	(17)
Depreciation and amortization	Depreciation and amortization	$	23	$	20	$	67	$	51	Depreciation and amortization	$	16	$	22

EBIT

In Corporate, Other and Eliminations, EBIT expenses for the ~~third~~first quarter of ~~2022~~2023 were lower by ~~$125~~$137 million compared to the same period in ~~2021,~~2022. EBIT improvement was 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 thepre-tax gain on the ~~sale of the Shanghai, China facility were~~Santa Clara, California site partially offset by ~~the impairment loss on Chambéry, France assets held for sale, and~~ the year over year increase of restructuring charges and general corporate ~~expenses, and lower gains on sale of certain precious metals offset.~~expenses.

General corporate expense and other for the ~~third~~first quarter ~~2022~~2023 were higher by $4$11 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.2022.

OUTLOOK

In ~~2022,~~2023, we estimate general corporate expenses to be in the range of ~~$170~~$195 million and ~~$180~~$205 million.

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- 41 -

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

LIQUIDITY, CAPITAL RESOURCES AND OTHER RELATED MATTERS

Liquidity

The ~~Company's~~Company’s primary sources of liquidity are its balance of Cash and cash equivalents of ~~$751~~$757 million as of ~~September 30, 2022,~~March 31, 2023, 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~~“Senior Revolving Credit ~~Facility"~~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~~“Receivables Securitization ~~Facility"~~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 September 30, 2022					Balance at March 31, 2023
		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 ~~September 30, 2022,~~March 31, 2023, the Company had $3.0 billion of total debt and cash and cash equivalents of ~~$751~~$757 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 ~~September 30, 2022.~~March 31, 2023.

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 ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, the Company had ~~$296~~$55 million and ~~$156~~$188 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.~~legislation.

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~~Company’s annual report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~"2021~~“2022 Form ~~10-K"~~10-K”) for details on the factors that could inhibit our ~~subsidiaries'~~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.

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

Please refer to Item 7, ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our ~~2021~~2022 Form 10-K for more details on these material cash requirements. During the ~~third~~first quarter of ~~2022,~~2023, there have been no material changes to our expected uses of cash and contractual obligations.

Supplier Finance Programs

We review supplier terms and conditions on an ongoing basis, and have negotiated payment terms extensions in recent years in connection with our efforts to reduce working capital and improve cash flow. Separate from those terms extension actions, certain of our subsidiaries have entered into paying agency agreements with third-party administrators.These voluntary supply chain finance programs (collectively, the “Programs”) generally give participating suppliers the ability to sell, or otherwise pledge as collateral, their receivables from the Company to the participating financial institutions, at the sole discretion of both the suppliers and financial institutions.The Company is not a party to the arrangements between the suppliers and the financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to sell, or otherwise pledge as collateral, amounts under these arrangements. The Company’s payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. One of our ~~Programs~~

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

programs includes a parent guarantee to the participating financial institution for a certain U.S. subsidiary that, at the time of the respective ~~Program’s~~program’s inception in 2015, was a guarantor subsidiary of the Company’s ~~Senior Revolving~~ Credit ~~Facility.~~

Agreement. The ~~payables associated with suppliers choosing to voluntarily participate in the Programs were~~obligations are presented ~~within~~as Accounts payable within Total current liabilities on the Consolidated Balance Sheets and totaled $246 million and $226 million as of 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 nine months ended September 30, 2022 and 2021 were $481 million and $373 million, respectively, with all activity related to the obligations is presented within operating activities on the Consolidated Statements of Cash ~~Flows.~~ Flow.

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.

Please refer to the Supplier Finance Programs section in Note 1 of the Consolidated Financial Statements for a description of outstanding obligations and payments under the supplier finance programs.

Cash Flows

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


		Nine Months Ended September 30,						Three Months Ended March 31,
			2022		2021				2023		2022
Cash and cash equivalents	Cash and cash equivalents		$	751	$	920	Cash and cash equivalents		$	757	$	748
Net cash flow provided by operating activities			$	1,085	$	1,168
Net cash flow used for investing activities			$	(573)	$	(242)
Net cash flow (used for) provided by operating activities							Net cash flow (used for) provided by operating activities		$	(164)	$	158
Net cash flow provided by (used for) investing activities							Net cash flow provided by (used for) investing activities		$	24	$	(88)
Net cash flow used for financing activities	Net cash flow used for financing activities		$	(675)	$	(716)	Net cash flow used for financing activities		$	(216)	$	(285)
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 ~~September 30, 2022 decreased $169~~March 31, 2023 increased $9 million compared to ~~September 30, 2021,~~March 31, 2022, primarily ~~driven~~due to higher cash flow provided by investing activities, partially offset by increased usage of cash ~~outflows~~ from ~~investing activities.~~operations.

Operating activities: For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the ~~Company's~~Company’s operating activities ~~provided $1,085~~used $164 million of cash compared to ~~$1,168~~providing $158 million ~~provided~~ in the same period in ~~2021.~~2022. The change in cash ~~provided~~used by operating activities was primarily due to ~~an increase in operating assets, specifically receivables and inventory, in 2022~~significant decreases of accounts payable during the quarter compared to the same period of ~~2021.~~2022.

Investing activities: For the three months ended March 31, 2023, the Company’s investing activities provided $24 million of cash compared to $88 million used in the same period in 2022. The increase was due to the proceeds received from the sale of the Santa Clara site, partially offset by higher year-over-year spending on property, plant, and equipment.

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

Financing activities: Net cash flow used for ~~investing~~financing activities ~~increased $331~~decreased by $69 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the same period of ~~2021,~~2022, resulting from ~~higher year-over-year spending on acquisitions.~~

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

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.

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

SAFETY

One of our primary objectives is the safety and well-being of our employees. Working safely is ~~a condition of employment~~an unconditional, organization-wide expectation at Owens ~~Corning. We~~Corning, which we believe ~~this organization-wide expectation provides for a safer work environment for employees,~~directly benefits employees’ lives, improves our manufacturing processes and reduces our ~~costs~~costs. The Company maintains comprehensive safety programs focused on identifying hazards and ~~enhances~~eliminating risks that can lead to severe injuries. One of our ~~reputation. Furthermore, striving to be a world-class leader in~~primary safety ~~provides a platform for all employees to understand and apply~~measures is 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 ~~September 30, 2022,~~March 31, 2023, our RIR was 0.64, ~~consistent with the same period a year ago. For the nine months ended September 30, 2022, our RIR was 0.72~~ compared to ~~0.61~~0.51 as reported 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.

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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"~~“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,"~~“appear,” “assume,” “believe,” “estimate,” “expect,” ~~"forecast,"~~“forecast,” “intend,” “likely,” “may,” “plan,” “project,” ~~"seek," "should,"~~“seek,” “should,” “strategy,” ~~"will"~~“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:

•levels of residential and commercial or industrial construction activity;

•demand for our products;

•industry and economic conditions including, but not limited to, supply chain disruptions, recessionary conditions, inflationary pressures, ~~and~~ interest rate and financial markets volatility, ~~that affect~~and the ~~market~~viability of banks 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;~~other financial institutions;

•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;~~expansions;

•climate change, weather conditions and storm activity;

•regional impact of COVID-19 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;

•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~~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;

•foreign exchange and commodity price fluctuations;

•our level of indebtedness;

•our liquidity and the availability and cost of credit;

•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~~2022 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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in our exposure to market risk during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. Please refer to ~~"Quantitative~~“Quantitative and Qualitative Disclosures about Market ~~Risk"~~Risk” contained in Part II, Item 7A of our ~~2021~~2022 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~~Company’s internal control over financial reporting during the quarter ended ~~September 30, 2022~~March 31, 2023 that materially affected, or is reasonably likely to materially affect, the ~~Company's~~Company’s internal control over financial reporting.

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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~~2022 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**
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


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**
January 1-31, 2023	1,500,963		$	90.66	1,500,000	12,897,220
February 1-28, 2023	251,140		101.93		—	12,897,220
March 1-31, 2023	603		98.42		—	12,897,220
Total	1,752,706	*	$	92.28	1,500,000	12,897,220

* The Company retained an aggregate of ~~2,542~~252,706 shares surrendered to satisfy tax withholding obligations in connection with the vesting of restricted ~~shares~~share units granted to our employees.

** On February 14, 2022, the Board of Directors approved a 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 “February 2022 Repurchase Authorization”).

On December 1, 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"~~“December 2022 Repurchase Authorization”). The December 2022 Repurchase Authorization is in addition to the February 2022 Repurchase Authorization (together, 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~~Company’s discretion. The Company repurchased ~~2.5~~1.5 million shares of its common stock for ~~$206~~$136 million, inclusive of applicable taxes, during the three months ended ~~September 30, 2022~~March 31, 2023, under the Repurchase Authorization. As of ~~September 30, 2022, 7.4~~March 31, 2023, 12.9 million shares remain available for repurchase under the Repurchase Authorization.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

~~None.~~Amendments to our Bylaws

At the 2023 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company held on April 20, 2023, the Company’s stockholders approved an amendment to the Company’s Third Amended and Restated Bylaws (the “Bylaws”) to update the existing exclusive forum provision (the “Federal Forum Amendment”). The Federal Forum Amendment amends Section 8.8 of the Bylaws to provide that, unless the Company consents in writing to the selection of an alternative forum, the U.S. federal district courts shall be, to the fullest extent permitted by law, the sole and exclusive forum for any action asserting a claim arising under the Securities Act of 1933. The Federal Forum Amendment became effective immediately upon approval by the stockholders at the Annual Meeting.

The foregoing description of the Federal Forum Amendment is not complete and is qualified in its entirety by reference to the full text of the Bylaws, which is attached as an exhibit to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Approval of Owens Corning 2023 Stock Plan

At the Annual Meeting, the stockholders of the Company approved the Owens Corning 2023 Stock Plan (the “2023 Stock Plan”). In general, the 2023 Stock Plan will be administered by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors (the “Board”). The 2023 Stock Plan provides for participation by non-employee directors of the Company and officers and other employees of the Company and its subsidiaries and certain affiliates, and permits grants of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, performance shares, performance share units and dividend equivalents, as determined by the Compensation Committee in accordance with the terms of the 2023 Stock Plan. The 2023 Stock Plan succeeds the Owens Corning 2019 Stock Plan (the “2019 Stock Plan”).

The number of shares of common stock available under the 2023 Stock Plan is 1,370,000 shares plus the number of shares that as of April 20, 2023 were available under the 2019 Stock Plan, subject to adjustment as provided in the 2023 Stock Plan and to the 2023 Stock Plan’s share counting rules. These shares may be shares of original issuance or treasury shares, or a combination of both. Shares underlying certain awards under the 2023 Stock Plan and the 2019 Stock Plan that expire, are terminated, cancelled, forfeited, unearned, or settled in cash, will again be available under the 2023 Stock Plan, as further described in the 2023 Stock Plan. The Compensation Committee may provide for continued vesting or accelerated vesting for awards under the 2023 Stock Plan upon certain events, including in connection with or following a participant’s death, disability, retirement, other termination of service or a change in control of the Company, as described in the 2023 Stock Plan.The 2023 Stock Plan generally has a minimum one-year vesting or performance period requirement for awards other than non-employee director awards, subject to a limited exception as described in the 2023 Stock Plan.

The 2023 Stock Plan provides that, subject to adjustment as described in the 2023 Stock Plan: (1) the maximum number of shares of common stock available for incentive stock options will not exceed 1,370,000 shares; and (2) in no event will any non-employee director of the Company in any one calendar year be granted compensation for such service having an aggregate maximum value (measured at the date of grant as applicable, and calculating the value of any awards based on the grant date fair value for financial reporting purposes) in excess of $650,000. The 2023 Stock Plan generally has a term of ten years but may be terminated prior to the expiration of the term by the Board. The Compensation Committee generally will be able to amend the 2023 Stock Plan, subject to stockholder approval in certain circumstances as described in the 2023 Stock Plan.

The 2023 Stock Plan permits the Compensation Committee to make certain performance-based awards to participants, which awards will be earned based upon the achievement of one or more performance measures. A non-exhaustive list of performance measures that could be used for such performance-based awards includes the following: total stockholder return (based on the change in the price of a share of the Company’s common stock and dividends paid); brand recognition or acceptance; cost savings or waste elimination; earnings before interest, taxes and amortization; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; operating income before interest and taxes; operating income before interest, taxes, depreciation and amortization; earnings per share; income; operating income; market share or market segment share; net income; new product innovation; operating profit or net operating profit; operating margins or profit margins; profits or gross profits; product cost reductions; product release schedules; return on stockholder’s equity; return on assets; return on capital employed; return on invested capital; return on operating revenue; revenue or revenue growth; sales or segment sales; share price performance; strategic corporate objectives relating to: increase in revenue with certain customers, customer groups, or customer types; revenues, synergies or savings related to corporate transactions; safety performance; sustainability or

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environmental performance); economic value added; cash flows (including, but not limited to, operating cash flow, free cash flow, free cash flow conversion, cash flow return on equity and cash flow return on investment); and working capital or changes in working capital over any time period.

The foregoing description of the 2023 Stock Plan is not complete and is qualified in its entirety by reference to the 2023 Stock Plan, a copy of which is attached as an exhibit to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Submission of Matters to a Vote of Security Holders

At the Annual Meeting, the Company’s stockholders cast their votes as described below on seven proposals described in the Company’s definitive proxy statement filed with the U.S. Securities and Exchange Commission on March 9, 2023.

Proposal 1

The Company’s stockholders elected the following directors to serve until the 2024 Annual Meeting of Stockholders and until their successors are elected and qualified pursuant to the following vote:


Name	Votes For	Votes Against	Abstentions	Broker Non-Votes
Brian D. Chambers	70,639,668	7,792,087	358,196	2,983,861
Eduardo E. Cordeiro	77,987,136	724,488	78,327	2,983,861
Adrienne D. Elsner	78,407,302	302,814	79,835	2,983,861
Alfred E. Festa	77,995,379	716,028	78,544	2,983,861
Edward F. Lonergan	74,629,522	4,081,977	78,452	2,983,861
Maryann T. Mannen	73,168,219	5,537,008	84,724	2,983,861
Paul E. Martin	78,116,559	595,513	77,879	2,983,861
W. Howard Morris	74,788,581	2,961,089	1,040,281	2,983,861
Suzanne P. Nimocks	73,914,961	4,792,087	82,903	2,983,861
John D. Williams	73,746,567	4,957,572	85,812	2,983,861

Proposal 2

The Company’s stockholders ratified the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2023 pursuant to the following vote:


Votes For	Votes Against	Abstentions
73,378,787	8,318,506	75,032

Proposal 3

The Company’s stockholders approved, on an advisory basis, the 2022 compensation paid to the Company’s named executive officers pursuant to the following vote:


Votes For	Votes Against	Abstentions	Broker Non-Votes
70,246,280	7,301,359	1,242,312	2,983,861

Proposal 4

The Company’s stockholders recommended, on a non-binding advisory basis, the frequency of future advisory votes on the compensation of the Company’s named executive officers pursuant to the following vote:


One Year	Two Years	Three Years	Abstentions	Broker Non-Votes
75,318,780	30,953	3,378,118	62,100	2,983,861

In light of the voting results on Proposal 4, the Company has decided to include the advisory stockholder vote on the compensation of the Company’s named executive officers in its proxy materials on an annual basis until the next required

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advisory vote on the frequency of the advisory stockholder vote on compensation paid to the Company’s named executive officers.

Proposal 5

The Company’s stockholders approved the Company’s 2023 Stock Plan pursuant to the following vote:


Votes For	Votes Against	Abstentions	Broker Non-Votes
70,092,211	8,491,269	206,471	2,983,861

Proposal 6

The Company’s stockholders did not approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to reflect new Delaware law provisions regarding officer exculpation pursuant to the following vote:


Votes For	Votes Against	Abstentions	Broker Non-Votes
64,521,561	13,957,319	311,071	2,983,861

Proposal 7

The Company’s stockholders approvedan amendment to the Company’s exclusive forum provision in its Bylaws pursuant to the following vote:


Votes For	Votes Against	Abstentions	Broker Non-Votes
66,268,952	12,426,794	94,205	2,983,861

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ITEM 6. EXHIBITS


Exhibit Number			Description




























3.1			T hird Amended and Restated Bylaws (as amended on April 20, 2023) (fil ed herewith).

10.1			O wens Corning 2023 Stock Plan (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 ~~September 30, 2022,~~March 31, 2023, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive ~~Earnings;~~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.

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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:

~~October~~April 26, ~~2022~~2023

By:

/s/ Kenneth S. Parks

Kenneth S. Parks

Chief Financial Officer

Date:

~~October~~April 26, ~~2022~~2023

By:

/s/ ~~Kelly J. Schmidt~~Mari K. Doerfler

~~Kelly J. Schmidt~~Mari K. Doerfler

Vice President and

Controller