Owens Corning

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20. INCOME TAXES

The following table summarizes our Earnings before taxes and Income tax expense (in millions):

The reconciliation between the United States federal statutory rate and the Company’s effective income tax rate from continuing operations is:

The Company continues to assert indefinite reinvestment in accordance with ASC 740 based on the laws as of enactment of the Tax Act. As of December 31, 2023, the Company has not provided for withholding or income taxes on approximately $1.5 billion of undistributed reserves of its foreign subsidiaries and affiliates as they are considered by management to be permanently reinvested. Quantification of the deferred tax liability associated with these undistributed reserves is not practicable.

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20. INCOME TAXES (continued)

The cumulative temporary differences giving rise to the deferred tax assets and liabilities are as follows (in millions):

The following table summarizes the amount and expiration dates of our deferred tax assets related to operating loss and tax credit carryforwards and foreign tax credit carryforwards at December 31, 2023 (in millions) (a):

(a)The use of certain of the Company's domestic loss carryforwards is limited pursuant to Internal Revenue Code (IRC) Section 382. IRC Section 382 imposes an annual limitation on a corporation's ability to use loss carryforwards that arose before a change in control. A change in control is generally defined as a cumulative change of more than 50% in the ownership positions of certain stockholders during a rolling three-year period. The Company believes that these limitations will not result in the loss of any of the loss carryforwards.

(b)The foreign net operating losses are related to various jurisdictions that provide for both indefinite carryforward periods and others with carryforward periods that range from the tax years 2024 to 2033.

Deferred income taxes are provided for temporary differences between amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured under enacted tax laws and regulations, as well as NOLs, tax credits and other tax carryforwards. We have a variety of deferred tax assets in numerous tax jurisdictions. These deferred tax assets are subject to periodic assessment as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recognized. In evaluating whether it is more likely than not that we would recover these deferred tax assets, future taxable income, the reversal of existing temporary differences and tax planning strategies are considered.

We believe that our estimates for the valuation allowances recorded against deferred tax assets are appropriate based on current facts and circumstances. As of December 31, 2023 we had $140 million of valuation allowances on deferred tax assets, on a

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20. INCOME TAXES (continued)

tax-effected basis, primarily related to U.S. federal foreign tax credit carryforwards and certain foreign deferred tax attributes as it is more likely than not that some portion or all of these tax attributes will not be realized.

We file a consolidated federal income tax return in the United States as well as tax returns in multiple state, local and foreign jurisdictions. In the normal course of business, the Company is subject to examination by the taxing authorities in each of the jurisdictions where we file tax returns. The Company is no longer subject to U.S. federal tax examinations for years before 2020 or state and foreign examinations for years before 2014.

We have on-going audits in various stages of completion in several state and foreign jurisdictions, one or more of which may conclude within the next 12 months. Such settlements could involve some or all of the following: the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of unrecognized tax benefits. The resolution of these matters, in combination with the expiration of certain statutes of limitations in various jurisdictions, make it reasonably possible that our unrecognized tax benefits may decrease as a result of either payment or recognition by up to $44 million in the next 12 months, excluding interest.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in millions):

If these unrecognized tax benefits were to be recognized as of December 31, 2023, the Company’s income tax expense would decrease by about $58 million.

The Company recognizes all interest and penalties related to unrecognized tax benefits as a component of income tax expense. Accrued interest and penalties, which are not presented in the rollforward table above, were $9 million, $7 million and $7 million as of December 31, 2023, 2022 and 2021, respectively. Related to interest and penalties, we recognized an income tax expense of $2 million, $1 million and $2 million, as of December 31, 2023, 2022 and 2021, respectively.