OC

Owens Corning 2026 Q2 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026, and the six months ended June 30, 2026. Owens Corning operates three reportable segments: Roofing, Insulation, and Doors. The reporting period is significantly impacted by the completion of the sale of its Glass Reinforcements (GR) business on April 30, 2026, which is now classified as discontinued operations. The company continues to execute restructuring initiatives and manage the integration of its Masonite acquisition.

Key Financial Metrics

Note: Total Debt includes $65 million in short-term debt and $5,125 million in long-term debt as of June 30, 2026.

Material Changes vs. Prior Period

• Discontinued Operations Impact: The sale of the GR business resulted in a pre-tax loss of $175 million for the six months ended June 30, 2026, due to a revised purchase price and asset transfers. This significantly reduced total Net Earnings compared to the prior year.
• Revenue Trends: Q2 2026 net sales increased slightly ($9 million) year-over-year, driven by higher Insulation volumes and favorable currency translation, offset by divestitures. YTD sales decreased $256 million due to lower volumes in Roofing and Doors and divestiture impacts.
• Margin Compression: Gross margin decreased $65 million in Q2 and $280 million YTD. Drivers included input cost inflation, higher delivery costs, production downtime, and lower selling prices in the Doors and Roofing segments.
• Restructuring Costs: Total restructuring costs for the six months ended June 30, 2026, were $69 million, compared to $21 million in the prior year period. This includes significant charges related to the Masonite acquisition integration and global corporate restructuring.
• Paroc Marine Recall: An increase in the liability for the Paroc marine recall contributed to higher "Other expense, net" in the current period.

Guidance, Outlook, and Risks

• Segment Outlook:
  • Roofing: Non-discretionary replacement activity expected to remain solid; storm demand in line with historical averages. Inventory restocking in Q2 may reduce Q3 purchases.
  • Insulation: North American new residential construction expected to remain challenged due to affordability issues. Non-residential markets expected to be stable.
  • Doors: North American residential new construction and discretionary remodeling expected to remain soft.
• Corporate Expenses: General corporate expenses for 2026 are expected to be between $245 million and $255 million.
• Tariff Refunds: Following a U.S. Supreme Court decision, the company estimates $50 million in tariff payments may be refundable. $25 million was recognized in the first six months of 2026.
• Liquidity: The company maintains a $1.5 billion Senior Revolving Credit Facility (fully available) and a $1.5 billion Commercial Paper program ($65 million outstanding). Management expects ample liquidity for the next 12 months.
• Risks: Key risks include residential construction volatility, input cost inflation, supply chain disruptions, trade policy changes, and the ongoing resolution of the Paroc marine recall.

Investor Verification Checklist

• Discontinued Operations: Verify the final post-closing adjustments for the GR business sale and the impact on future earnings.
• Restructuring Progress: Monitor the execution of the Masonite integration and the associated cash vs. non-cash charges ($37 million recorded YTD 2026).
• Paroc Recall Liability: Track updates on the Paroc marine recall liability, which increased significantly in the current period.
• Tariff Refund Realization: Confirm the timeline and certainty of the remaining $25 million in potential tariff refunds.
• Debt Maturities: Review the repayment plan for the $899 million in senior notes maturing within the next 12 months (2026 and 2027 notes).
• Volume Trends: Assess the sustainability of volume declines in the Roofing and Doors segments amidst challenging housing market conditions.