Owens Corning
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
OC$121.31-2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001370946-24-000183
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001370946-24-000239
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 154 previous paragraphs and 167 current paragraphs.
106 unchanged; 46 reworded; 14 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
For year-to-date 2024, net sales in our Insulation segment increased $29 million compared to the same period in 2023. The increase was driven primarily by higher selling prices of $53 million and favorable product mix partially offset by lower sales volumes of approximately 2%.
Current report
CRITICAL ACCOUNTING ESTIMATES
Current report
Goodwill Impairment Indicator Assessment
Current report
The Company tests goodwill 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.
Current report
During the third quarter of 2024, the Company performed its quarterly assessment to identify potential indicators of impairment for each of its reporting units. Among qualitative and quantitative factors considered, management reviewed key assumptions and information, including updated macroeconomic indicators that impact the markets we serve, and financial forecast information for each reporting unit. The annual impairment tests performed in the fourth quarter of 2023 indicated that the business enterprise value of the Composites reporting unit exceeded its carrying value by approximately 5%. Given this narrow cushion of Composites reporting unit fair value in excess of carrying value and the ongoing strategic review of the glass reinforcements business, the Company performed an interim goodwill impairment test as of September 30, 2024 for the Composites reporting unit.
Current report
As a result of this test, we determined that no impairment existed for the reporting unit. Testing indicated that the business enterprise value for the Composites reporting unit exceeded its carrying value by less than 10%. There is uncertainty as to the outcome of the strategic review of our glass reinforcements business and the macroeconomic factors that impact this reporting unit. The likelihood of a future impairment could be increased by a sustained downturn in these macroeconomic factors, a change in the long-term revenue growth or profitability for this reporting unit, or the outcome of the strategic review. The most significant assumptions used in our analysis to determine the fair value of the Composites reporting unit are the discount rate, the long-term growth rate and profitability of the reporting unit. If all other assumptions remain constant, a 50 basis point increase in the selected discount rate of 10% would decrease the fair value of the Composites reporting unit by approximately 3%, a 50 basis point decrease in the selected long-term growth rate of 2.5% would decrease the fair value of the Composites reporting unit by approximately 2%, and a 50 basis point decrease in forecasted annual EBIT margins would decrease the fair value of Composites by approximately 2%.
Current report
The following table summarizes the segment allocation of recorded goodwill on our Consolidated Balance Sheet as of September 30, 2024 (in millions):
Current report
Indefinite-lived Intangible Asset Impairment Indicator Assessment
Current report
During the first three quarters of 2024, the Company performed its quarterly assessment to identify any potential impairment indicators for each of its indefinite-lived intangible assets. Among qualitative and quantitative factors considered, management reviewed key assumptions and information, including updated macroeconomic indicators that impact the markets we serve and financial forecast information for each reporting unit. After evaluating and weighing all relevant events and circumstances, the Company did not identify any impairment indicators for any of its indefinite-lived intangible assets and determined that it was not more likely than not that the carrying value of any of its indefinite-lived intangible assets exceeded their respective fair values. Consequently, we determined that it was not necessary to perform an interim impairment test for any indefinite-lived intangible assets..
Current report
There aretwo indefinite-lived intangible assets that are at an increased risk of impairment, both of which are used by our Insulation segment and were partially impaired in the fourth quarter of 2022. A change in the estimated long-term revenue growth rate or discount rate for the segment could increase the likelihood of a future impairment.
Current report
The following table presents the carrying values of these assets as of September 30, 2024:
Current report
Long-lived Asset Recoverability Assessment
Current report
There were no changes to the recoverability conclusions for our long-lived assets disclosed in our 2023 Form-10-K. Changes in management intentions, market conditions, operating performance and other similar circumstances could affect the assumptions used in these impairment tests. Changes in the assumptions could result in impairment charges that could be material to our Consolidated Financial Statements in any given period.
Current report
•our level of indebtedness;
Removed paragraphs (2)
Previous report
For year-to-date 2024, net sales in our Insulation segment decreased $4 million compared to the same period in 2023. The decrease was driven primarily by lower sales volumes of approximately 3% partially offset by higher selling prices of $24 million and favorable product and customer mix.
Previous report
•our level of indebtedness, including indebtedness incurred in connection with the acquisition of Masonite;
Reworded paragraphs (46)
Previous wording
Owens Corning is a global residential and commercial building products leader committed to building a sustainable future through material innovation. The Company has four reporting segments: Roofing, Insulation, Doors and Composites. Through these lines of business, the Company manufactures and sells products worldwide. We are a market leader in many of our major product categories.
Current wording
Owens Corning is a residential and commercial building products leader committed to building a sustainable future through material innovation. The Company has four reporting segments: Roofing, Insulation, Doors and Composites. Through these lines of business, the Company manufactures and sells products worldwide. We are a market leader in many of our major product categories.
Previous wording
Net earnings attributable to Owens Corning were $285 million in the second quarter of 2024, compared to $345 million in the same period of 2023. The Company generated $588 million in adjusted earnings before interest and taxes (“Adjusted EBIT”) for the second quarter of 2024, compared to $534 million in the same period of 2023. See the Adjusted Earnings Before Interest and Taxes paragraph of the MD&A for further information regarding Adjusted EBIT, including the reconciliation to net earnings attributable to Owens Corning. Second quarter of 2024 earnings before interest and taxes (“EBIT”) performance compared to the same period of 2023 increased $35 million and $20 million in our Roofing and Insulation segments, respectively, and decreased $26 million in our Composites segment. Second quarter of 2024 EBIT for our newly acquired Doors segment was $34 million. Within our Corporate, Other and Eliminations category, General corporate expense and other increased by $9 million.
Current wording
Net earnings attributable to Owens Corning were $321 million in the third quarter of 2024, compared to $337 million in the same period of 2023. The Company generated $582 million in adjusted earnings before interest and taxes (“Adjusted EBIT”) for the third quarter of 2024, compared to $518 million in the same period of 2023. See the Adjusted Earnings Before Interest and Taxes paragraph of the MD&A for further information regarding Adjusted EBIT, including the reconciliation to net earnings attributable to Owens Corning. Third quarter of 2024 earnings before interest and taxes (“EBIT”) performance compared to the same period of 2023 increased $16 million and $33 million in our Roofing and Insulation segments, respectively, and decreased $19 million in our Composites segment. Third quarter of 2024 EBIT for our Doors segment was $36 million. Within our Corporate, Other and Eliminations category, General corporate expense and other increased by $2 million.
Previous wording
Cash and cash equivalents were $254 million as of June 30, 2024, compared to $968 million as of June 30, 2023. In the six months ended June 30, 2024, the Company’s operating activities provided $517 million of cash, compared to providing $330 million of cash in the same period in 2023. In the six months ended June 30, 2024, the Company’s investing activities used $3,154 million of cash, compared to using $102 million of cash in the same period in 2023.
Current wording
Cash and cash equivalents were $499 million as of September 30, 2024, compared to $1,323 million as of September 30, 2023. In the nine months ended September 30, 2024, the Company’s operating activities provided $1,216 million of cash, compared to providing $1,021 million of cash in the same period in 2023. In the nine months ended September 30, 2024, the Company’s investing activities used $3,193 million of cash, compared to using $219 million of cash in the same period in 2023.
Previous wording
On May 15, 2024, the Company acquired all of the outstanding shares of Masonite International Corporation (“Masonite”), a leading global designer, manufacturer, marketer and distributor of interior and exterior doors and door systems, for $3.2 billion. The acquisition was funded primarily with debt proceeds from the 364-Day Credit Facility (as defined below) of $2.8 billion and cash on hand. The acquisition of Masonite's market-leading doors business creates a new growth platform for the Company, strengthening the Company's position in building and construction and expanding its offering of branded residential building products. Masonite's operating results and preliminary purchase price allocation have been included in the Company's newly established Doors reportable segment from May 15, 2024, within the Consolidated Financial Statements. Masonite contributed revenues of $311 million and EBIT of $34 million to the Company for the period from May 15, 2024 to June 30, 2024.
Current wording
On May 15, 2024, the Company acquired all of the outstanding shares of Masonite International Corporation (“Masonite”), a leading global designer, manufacturer, marketer and distributor of interior and exterior doors and door systems, for $3.2 billion. The acquisition was funded primarily with debt proceeds from the 364-Day Credit Facility (as defined below) of $2.8 billion and cash on hand. The acquisition of Masonite's market-leading doors business creates a new growth platform for the Company, strengthening the Company's position in building and construction and expanding its offering of branded residential building products. Masonite's operating results and preliminary purchase price allocation have been included in the Company's newly established Doors reportable segment from May 15, 2024, within the Consolidated Financial Statements. Masonite contributed revenues of $573 million and $884 million and EBIT of $36 million and $70 million to the Company for the three and nine months ended September 30, 2024, respectively.
Previous wording
On May 15, 2024, the Company initially borrowed $295 million under the receivables securitization facility (“Receivables Securitization Facility”) which was used to pay down a portion of the 364-Day Credit Facility. Subsequent to the May 15, 2024 borrowing, the Company repaid and re-borrowed on the Receivables Securitization Facility throughout the quarter to pay down portions of the 364-Day Credit facility. As of June 30, 2024, there was a remaining balance on the Receivables Securitization Facility of $155 million.
Current wording
On May 15, 2024, the Company initially borrowed $295 million under the receivables securitization facility (“Receivables Securitization Facility”) which was used to pay down a portion of the 364-Day Credit Facility. Subsequent to the May 15, 2024 borrowing, the Company repaid and re-borrowed on the Receivables Securitization Facility throughout the second and third quarter of 2024 to pay down portions of the 364-Day Credit facility. As of September 30, 2024, there is no outstanding balance on the Receivables Securitization Facility.
Previous wording
On February 9, 2024, the Company announced the decision to review strategic alternatives for its global glass reinforcements (“GR”) business, consistent with our strategy to focus on building and construction materials. The GR business, which operates within our Composites segment, supplies a wide variety of glass fiber products for applications in wind energy, infrastructure, industrial, transportation, and consumer markets. The GR business generates annual revenues of approximately $1.3 billion. While a range of options are under consideration, including a potential sale, spin-off or other strategic option, there can be no assurance that the strategic review will result in any transaction or other outcome. During the first six months of 2024, the Company incurred $17 million of costs related to this review.
Current wording
On February 9, 2024, the Company announced the decision to review strategic alternatives for its global glass reinforcements (“GR”) business, consistent with our strategy to focus on building and construction materials. The GR business, which operates within our Composites segment, supplies a wide variety of glass fiber products for applications in wind energy, infrastructure, industrial, transportation, and consumer markets. The GR business generates annual revenues of approximately $1.3 billion. While a range of options are under consideration, including a potential sale, spin-off or other strategic option, there can be no assurance that the strategic review will result in any transaction or other outcome. During the first nine months of 2024, the Company incurred $33 million of costs related to this review.
Previous wording
As part of its review of the Paroc insulation product portfolio, the Company discovered potential nonconformances relating to certain ventilation duct insulation products. In January 2024, Paroc suspended sales of the affected insulation products as a precautionary measure while it reviews the potential nonconformances, but has not issued recalls. We expect to incur costs associated with the resolution of this matter. The amount or range of any potential loss cannot be reasonably estimated at this time. The Company is continuing its review.
Current wording
As part of its review of the Paroc insulation product portfolio, the Company discovered potential nonconformances relating to certain ventilation duct and steel beam insulation products. In January and September 2024, Paroc suspended sales of the affected insulation products as a precautionary measure while it reviews the potential nonconformances, but has not issued recalls. We expect to incur costs associated with the resolution of this matter. The amount or range of any potential loss cannot be reasonably estimated at this time. The Company is continuing its review.
Previous wording
On December 1, 2022, the Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase up to an aggregate of 10 million shares of the Company’s outstanding common stock (the “Repurchase Authorization”). The Repurchase Authorization enables the Company to repurchase shares through the open market, privately negotiated, or other transactions. The actual number of shares repurchased will depend on timing, market conditions and other factors and will be at the Company’s discretion. The Company did not repurchase any shares of its common stock during the second quarter of 2024 under the Repurchase Authorization. As of June 30, 2024, 8.1 million shares remained available for repurchase under the Repurchase Authorization.
Current wording
On December 1, 2022, the Board of Directors approved a new share repurchase program under which the Company is authorized to repurchase up to an aggregate of 10 million shares of the Company’s outstanding common stock (the “Repurchase Authorization”). The Repurchase Authorization enables the Company to repurchase shares through the open market, privately negotiated, or other transactions. The actual number of shares repurchased will depend on timing, market conditions and other factors and will be at the Company’s discretion. The Company repurchased 1.2 million shares of its common stock for $202 million, inclusive of applicable taxes, in the third quarter of 2024 under the Repurchase Authorization. As of September 30, 2024, 6.9 million shares remained available for repurchase under the Repurchase Authorization.
Previous wording
In the second quarter and year-to-date 2024, net sales increased $226 million and increased $195 million, respectively, compared to the same periods in 2023. For the second quarter and year-to-date 2024, the increase in net sales was primarily driven by the revenues from our Doors segment as a result of the Masonite acquisition, which was partially offset by lower sales volumes across the Roofing, Insulation and Composites segments. Favorable product mix and higher selling prices within the Roofing and Insulation segments also contributed to the increase.
Current wording
In the third quarter and year-to-date 2024, net sales increased $567 million and increased $762 million, respectively, compared to the same periods in 2023. For the third quarter and year-to-date 2024, the increase in net sales was primarily driven by the revenues from our Doors segment as a result of the Masonite acquisition, higher selling prices and favorable product mix, which was partially offset by lower sales volumes.
Previous wording
In the second quarter and year-to-date 2024, gross margin increased $115 million and increased $206 million, respectively, compared to the same periods in 2023. For the second quarter and year to date 2024, the increase was primarily driven by higher selling prices within Roofing and Insulation and lower manufacturing costs in Roofing and Composites. Favorable product mix and delivery were offset by lower sales volumes across Roofing, Insulation and Composites. Also contributing to the increase were the margins from our Doors segment as a result of the Masonite acquisition.
Current wording
In the third quarter and year-to-date 2024, gross margin increased $181 million and increased $387 million, respectively, compared to the same periods in 2023. For the third quarter and year to date 2024, the increase was primarily driven by the margins from our Doors segment as a result of the Masonite acquisition. Also contributing to the increase were higher selling prices, slightly offset by lower sales volumes.
Previous wording
In the second quarter and year-to-date 2024, marketing and administrative expenses increased $42 million and increased $50 million, respectively, compared to the same periods in 2023. For the second quarter and year-to-date 2024, the increase was primarily driven by the addition of the Doors segment selling, general and administrative expenses during the quarter and ongoing inflationary pressures throughout the organization.
Current wording
In the third quarter and year-to-date 2024, marketing and administrative expenses increased $78 million and increased $128 million, respectively, compared to the same periods in 2023. For the third quarter and year-to-date 2024, the increase was primarily driven by the addition of the Doors segment selling, general and administrative expenses and ongoing inflationary pressures throughout the organization.
Previous wording
In the second quarter and year-to-date 2024, other expenses increased $97 million and increased $119 million, respectively, compared to the same periods in 2023. For the second quarter and year-to-date 2024, the increase was primarily driven by higher acquisition and strategic review-related costs.
Current wording
In the third quarter and year-to-date 2024, other expenses increased $49 million and increased $168 million, respectively, compared to the same periods in 2023. For the third quarter and year-to-date 2024, the increase was primarily driven by higher acquisition and strategic review-related costs which were slightly offset by higher gains on the sale of precious metals.
Previous wording
In the second quarter and year-to-date 2024, interest expense, net, increased $41 million and increased $36 million, respectively, compared to the same periods in 2023. For the second quarter and year-to-date, the increase was driven by higher interest on the 364-Day Credit Facility and higher long-term debt balances in connection with the Masonite acquisition, slightly offset by higher interest income.
Current wording
In the third quarter and year-to-date 2024, interest expense, net, increased $53 million and increased $89 million, respectively, compared to the same periods in 2023. For the third quarter, the increase was driven by interest on the higher long-term debt balances in connection with the Masonite acquisition and lower interest income. For year-to-date, the increase was driven by higher interest on the 364-Day Credit Facility and higher long-term debt balances in connection with the Masonite acquisition.
Previous wording
Income tax expense for the three and six months ended June 30, 2024 was $110 million and $198 million, respectively. For the second quarter of 2024 and the six months ended June 30, 2024, the Company’s effective tax rate was 28% and 25%, respectively. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended June 30, 2024 is primarily due to U.S. state and local income tax expense, foreign rate differential, U.S. federal taxes on foreign earnings and permanently non-deductible expenses both of which were related to the acquisition of Masonite. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the six months ended June 30, 2024 is primarily due to U.S. state and local income tax expense and foreign rate differential partially offset by discrete tax benefits related to valuation allowance and stock-based compensation.
Current wording
Income tax expense for the three and nine months ended September 30, 2024 was $120 million and $318 million, respectively. For the third quarter of 2024 and the nine months ended September 30, 2024, the Company’s effective tax rate was 27% and 26%, respectively. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2024 is primarily due to U.S. state and local income tax expense, foreign rate differential and U.S. federal taxes on foreign earnings.
Previous wording
Income tax expense for the three and six months ended June 30, 2023 was $121 million and $251 million, respectively. For the second quarter of 2023 and the six months ended June 30, 2023, the Company's effective tax rate was 26%. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the three months ended June 30, 2023 is primarily due to U.S. state and local income tax expense, foreign rate differential and U.S federal taxes on foreign earnings. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the six months ended June 30, 2023 is primarily due to U.S. state and local income tax expense, foreign rate differential and other discrete adjustments.
Current wording
Income tax expense for the three and nine months ended September 30, 2023 was $110 million and $361 million, respectively. For the third quarter of 2023 and the nine months ended September 30, 2023, the Company's effective tax rate was 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, 2023 is primarily due to U.S. state and local income tax expense, offset slightly by U.S. federal taxes on foreign earnings and U.S. federal income tax credits. The difference between the effective tax rate and the U.S. federal statutory tax rate of 21% for the nine months ended September 30, 2023 is primarily due to U.S. state and local income tax expense and foreign rate differential.
Previous wording
In our Roofing segment, net sales in the second quarter of 2024 decreased $18 million compared to the same period in 2023 due to lower sales volumes of approximately 9% which more than offset higher selling prices of $55 million and favorable product mix.
Current wording
In our Roofing segment, net sales in the third quarter of 2024 decreased $6 million compared to the same period in 2023 due to lower sales volumes of approximately 7% which more than offset higher selling prices of $42 million and favorable product mix.
Previous wording
For year-to-date 2024, net sales in our Roofing segment increased $44 million compared to the same period in 2023. Lower sales volumes of approximately 5% were more than offset by higher selling prices of $87 million and favorable product mix.
Current wording
For year-to-date 2024, net sales in our Roofing segment increased $38 million compared to the same period in 2023. Lower sales volumes of approximately 6% were more than offset by higher selling prices of $129 million and favorable product mix.
Previous wording
In our Roofing segment, EBIT in the second quarter of 2024 increased $35 million compared to the same period in 2023 due to higher selling prices of $55 million, favorable product mix and $3 million of lower manufacturing costs, which were slightly offset by lower sales volumes. Favorable delivery of $4 million was more than offset by input cost inflation.
Current wording
In our Roofing segment, EBIT in the third quarter of 2024 increased $16 million compared to the same period in 2023 due to higher selling prices of $42 million and favorable product mix which were slightly offset by lower sales volumes and $9 million of higher manufacturing costs. Favorable delivery of $5 million was more than offset by input cost inflation.
Previous wording
For year-to-date 2024, EBIT in our Roofing segment increased $112 million compared to the same period in 2023 due to higher selling prices of $87 million, favorable product mix and $24 million of lower manufacturing costs, which were slightly offset by lower sales volumes. Favorable delivery of $10 million was more than offset by input cost inflation.
Current wording
For year-to-date 2024, EBIT in our Roofing segment increased $128 million compared to the same period in 2023 due to higher selling prices of $129 million, favorable product mix and $15 million of lower manufacturing costs, which were slightly offset by lower sales volumes. Favorable delivery of $15 million was more than offset by input cost inflation.
Previous wording
In our Roofing segment, the Company expects residential repair and remodeling activity to remain solid and a stable North American new residential construction market. Other uncertainties that may impact Roofing demand include demand from storms and other weather-related events, competitive pricing pressure and the cost and availability of raw materials, particularly asphalt. The Company will continue to focus on managing costs, capital expenditures and working capital to best service the market demand.
Current wording
In our Roofing segment, the Company expects residential repair and remodeling activity to remain solid. Other uncertainties that may impact Roofing demand include demand from storms and other weather-related events, competitive pricing pressure and the cost and availability of raw materials, particularly asphalt. The Company will continue to focus on managing costs, capital expenditures and working capital to best service the market demand.
Previous wording
In our Insulation segment, net sales in the second quarter of 2024 increased $11 million compared to the same period in 2023. The increase was driven primarily by higher selling prices of $12 million and favorable product mix, slightly offset by lower sales volumes of approximately 1%.
Current wording
In our Insulation segment, net sales in the third quarter of 2024 increased $33 million compared to the same period in 2023. The increase was driven primarily by higher selling prices of $29 million and favorable product mix, slightly offset by unfavorable customer mix.
Previous wording
In our Insulation segment, EBIT in the second quarter of 2024 increased $20 million compared to the same period in 2023. The increase was driven by higher selling prices of $12 million, favorable delivery of $6 million, and favorable product mix. Lower start-up costs were more than offset by higher operating expenses, inclusive of incremental costs associated with evaluating manufacturing investments. The remaining variance was driven by lower sales volumes and $2 million higher manufacturing costs.
Current wording
In our Insulation segment, EBIT in the third quarter of 2024 increased $33 million compared to the same period in 2023 primarily driven by higher selling prices of $29 million. Higher manufacturing costs of $7 million were more than offset by lower production downtime of $6 million and lower start-up costs, while favorable delivery of $8 million more than offset higher operating expenses.
Previous wording
For the year-to-date 2024, EBIT in our Insulation segment increased $25 million compared to the same period in 2023. The increase was driven by higher selling prices of $24 million, $20 million of favorable delivery and input costs, and lower start-up costs which more than offset lower sales volumes, higher manufacturing costs of $9 million, and higher operating expenses, inclusive of incremental costs associated with evaluating manufacturing investments. Favorable product and customer mix were slightly offset by higher production downtime.
Current wording
For the year-to-date 2024, EBIT in our Insulation segment increased $58 million compared to the same period in 2023. The increase was driven by higher selling prices of $53 million, favorable delivery of $25 million, and lower start-up costs which more than offset higher manufacturing costs of $16 million, higher operating expenses, inclusive of incremental costs associated with evaluating manufacturing investments, and lower sales volumes. The remaining variance was driven by favorable product mix which more than offset unfavorable customer mix.
Previous wording
During the second quarter of 2024, the average Seasonally Adjusted Annual Rate (“SAAR”) of U.S. housing starts was approximately 1.348 million, down from an annual average of approximately 1.447 million starts in the second quarter of 2023.
Current wording
During the third quarter of 2024, the average Seasonally Adjusted Annual Rate (“SAAR”) of U.S. housing starts was approximately 1.326 million, down from an annual average of approximately 1.359 million starts in the third quarter of 2023.
Previous wording
The Company expects the new residential construction market in North America, as well as the commercial and industrial construction markets, to remain stable. However, due to a weaker macro-economic outlook, higher interest rates, and ongoing input cost inflation, the global commercial and industrial construction markets are expected to remain soft temporarily. The Company continues to concentrate on managing costs, capital expenditures and working capital as we evaluate options to expand capacity within our existing manufacturing network.
Current wording
The Company expects the new residential construction market in North America to be temporarily challenged as the market starts to return to a more normal seasonal pattern, while the North America commercial and industrial construction markets are expected to remain stable. However, due to a period of slow economic growth, the global commercial and industrial construction markets are expected to remain soft temporarily. The Company continues to concentrate on managing costs, capital expenditures and working capital as we evaluate options to expand capacity within our existing manufacturing network.
Previous wording
In our new Doors segment, net sales in the second quarter and year-to-date of 2024 were $311 million, due to the acquisition of Masonite, which was completed on May 15, 2024.
Current wording
In our new Doors segment, net sales in the third quarter and year-to-date of 2024 were $573 million and $884 million, respectively, due to the acquisition of Masonite, which was completed on May 15, 2024.
Previous wording
In our newly acquired Doors segment, EBIT in the second quarter and year-to-date 2024 were $34 million, due to the acquisition of Masonite, which was completed on May 15, 2024.
Current wording
In our newly acquired Doors segment, EBIT in the third quarter and year-to-date 2024 were $36 million and $70 million, respectively, due to the acquisition of Masonite, which was completed on May 15, 2024.
Previous wording
The outlook for the Doors segment is driven by the residential new construction and residential repair and remodeling markets in North America and Europe. The Company expects the North America residential new construction market to remain stable, with discretionary residential repair and remodeling activity in North America to remain soft. Due to a weaker macro-economic outlook and higher interest rates in Europe, the Company expects these markets to remain challenged. The Company will concentrate on managing costs, capital expenditures and working capital.
Current wording
The outlook for the Doors segment is driven by the residential new construction and residential repair and remodeling markets in North America and Europe. The Company expects the North America residential new construction market to be temporarily challenged, with discretionary residential repair and remodeling activity in North America to remain soft. Due to a weaker macroeconomic outlook and higher interest rates in Europe, the Company expects these markets to remain challenged. The Company will concentrate on managing costs, capital expenditures and working capital.
Previous wording
In our Composites segment, net sales in the second quarter of 2024 decreased $74 million compared to the same period in 2023. The decrease was driven primarily by lower sales volumes of approximately 6% and lower selling prices of $27 million. The remaining variance was driven by unfavorable customer mix which offset favorable product mix, and $5 million of unfavorable impact of translating sales denominated in foreign currencies into United States dollars.
Current wording
In our Composites segment, net sales in the third quarter of 2024 decreased $33 million compared to the same period in 2023. The decrease was driven primarily by lower selling prices of $20 million and lower sales volumes of approximately 1%. The remaining variance was driven by unfavorable customer mix which more than offset favorable product mix.
Previous wording
For year-to-date 2024, net sales in our Composites segment decreased $136 million compared to the same period in 2023. The decrease was driven primarily by lower sales volumes of approximately 6% and lower selling prices of $48 million. The remaining variance was driven by unfavorable customer mix which more than offset favorable product mix, and $5 million of unfavorable impact of translating sales denominated in foreign currencies into United States dollars.
Current wording
For year-to-date 2024, net sales in our Composites segment decreased $169 million compared to the same period in 2023. The decrease was driven primarily by lower sales volumes of approximately 4% and lower selling prices of $68 million. The remaining variance was driven by unfavorable customer mix which more than offset favorable product mix, and $5 million of unfavorable impact of translating sales denominated in foreign currencies into United States dollars.
Previous wording
In our Composites segment, EBIT in the second quarter of 2024 decreased $26 million compared to the same period in 2023. Lower selling prices of $27 million and higher production downtime of $15 million more than offset lower manufacturing costs of $21 million and $10 million of favorable delivery and input costs. The remaining variance was driven about equally by higher start-up costs of $5 million, lower sales volume and unfavorable customer mix. Favorable product mix was offset by the unfavorable impact of translating sales denominated in foreign currencies into United States dollars.
Current wording
In our Composites segment, EBIT in the third quarter of 2024 decreased $19 million compared to the same period in 2023 primarily driven by lower selling prices of $20 million. Higher start-up costs of $11 million and unfavorable customer mix more than offset lower manufacturing costs of $14 million.
Previous wording
For the year-to-date 2024, EBIT in our Composites segment decreased $29 million compared to the same period in 2023. Lower selling prices of $48 million, higher production downtime of $26 million and higher start-up costs of $11 million more than offset lower manufacturing costs of $51 million and $26 million of favorable delivery and input costs. The remaining variance was driven about equally by unfavorable customer mix and lower sales volume. Favorable product mix was offset by the unfavorable impact of translating sales denominated in foreign currencies into United States dollars.
Current wording
For the year-to-date 2024, EBIT in our Composites segment decreased $48 million compared to the same period in 2023. Lower selling prices of $68 million, higher production downtime of $26 million, higher start-up costs of $22 million and unfavorable customer mix more than offset lower manufacturing costs of $65 million and $26 million of favorable delivery and input costs. The remaining variance was driven by lower sales volumes and the unfavorable impact of translating sales denominated in foreign currencies into United States dollars.
Previous wording
In Corporate, Other and Eliminations, EBIT expenses for the second quarter of 2024 were higher by $92 million compared to the same period in 2023, primarily driven by higher acquisition and strategic review-related costs. For year-to-date 2024, EBIT expenses in Corporate, Other and Eliminations were higher by $302 million primarily driven by the prior-year pre-tax gain on the Santa Clara, California site, as well as higher acquisition-related and strategic review-related costs.
Current wording
In Corporate, Other and Eliminations, EBIT expenses for the third quarter of 2024 were higher by $20 million compared to the same period in 2023, primarily driven by higher acquisition-related and strategic review-related costs, partially offset by gains on sales of precious metals and lower year over year restructuring charges. For year-to-date 2024, EBIT expenses in Corporate, Other and Eliminations were higher by $322 million primarily driven by the prior-year pre-tax gain on the Santa Clara, California site, as well as higher acquisition-related and strategic review-related costs.
Previous wording
General corporate expense and other for the second quarter of 2024 were higher by $9 million compared to the same period in 2023. For year-to-date, general corporate expense and other were higher by $11 million compared to the same period in 2023.
Current wording
General corporate expense and other for the third quarter of 2024 were higher by $2 million compared to the same period in 2023.
Previous wording
In 2024, we estimate general corporate expenses to be in the range of $255 million and $265 million.
Current wording
In 2024, we estimate general corporate expenses to be approximately $250 million.
Previous wording
The Company’s primary sources of liquidity are its balance of Cash and cash equivalents of $254 million as of June 30, 2024, its Senior Revolving Credit Facility (as defined below) and its Receivables Securitization Facility.
Current wording
The Company’s primary sources of liquidity are its balance of Cash and cash equivalents of $499 million as of September 30, 2024, its Senior Revolving Credit Facility (as defined below) and its Receivables Securitization Facility.
Previous wording
As of June 30, 2024, the Company had $5.6 billion of total debt. The Company's current portion of long-term debt includes $400 million of 4.200% senior notes due in the fourth quarter of 2024. Additionally, the Company has $155 million of short term debt relating to the outstanding borrowings on the Receivables Securitization Facility.
Current wording
As of September 30, 2024, the Company had $5.5 billion of total debt. The Company's current portion of long-term debt includes $400 million of 4.200% senior notes due in the fourth quarter of 2024.
Previous wording
In the second quarter of 2024, the Company borrowed $2.8 billion using Term SOFR plus a spread on the 364-Day Credit Facility to fund a portion of the purchase of Masonite. As a result of the borrowing, the Company incurred approximately $16 million of financing fees which were amortized to Interest expense, net on the Consolidated Statements of Earnings. During the quarter, the Company completely repaid the 364-Day Credit Facility with a combination of issuance of new senior notes, borrowings on the Receivables Securitization Facility and cash on hand. Based on terms of the agreement, no further amounts can be drawn.
Current wording
In the second quarter of 2024, the Company borrowed $2.8 billion using Term SOFR plus a spread on the 364-Day Credit Facility to fund a portion of the purchase of Masonite. As a result of the borrowing, the Company incurred approximately $16 million of financing fees which were amortized to Interest expense, net on the Consolidated Statements of Earnings. During the second quarter, the Company completely repaid the 364-Day Credit Facility with a combination of issuance of new senior notes, borrowings on the Receivables Securitization Facility and cash on hand. Based on terms of the agreement, no further amounts can be drawn.
Previous wording
On May 1, 2024, in connection with the acquisition of Masonite, we commenced the Exchange Offer any and all of Masonite’s outstanding 3.50% Senior Notes due 2030 for new 3.50% Senior Notes due 2030 of Owens Corning. On May 22, 2024, 99.51% of the outstanding Masonite 2030 notes were exchanged and we issued $373 million of aggregate principal amount of Owens Corning 2030 notes. Interest on the notes is payable semiannually in arrears on February 15 and August 15 each year, beginning on August 15, 2024. Following the settlement of the Exchange Offer, approximately $2 million of the Masonite 2030 notes that were not exchanged remain outstanding, which has been recorded on the Consolidated Balance Sheets.
Current wording
On May 1, 2024, in connection with the acquisition of Masonite, we commenced the Exchange Offer, exchanging any and all of Masonite’s outstanding 3.50% Senior Notes due 2030 for new 3.50% Senior Notes due 2030 of Owens Corning. On May 22, 2024, 99.51% of the outstanding Masonite 2030 notes were exchanged and we issued $373 million of aggregate principal amount of Owens Corning 2030 notes. Interest on the notes is payable semiannually in arrears on February 15 and August 15 each year, beginning on August 15, 2024. Following the settlement of the Exchange Offer, approximately $2 million of the Masonite 2030 notes that were not exchanged remain outstanding, which has been recorded on the Consolidated Balance Sheets.
Previous wording
Cash and cash equivalents held by foreign subsidiaries may be subject to foreign withholding taxes upon repatriation to the U.S. As of June 30, 2024, and December 31, 2023, the Company had $122 million and $114 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.
Current wording
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, 2024, and December 31, 2023, the Company had $129 million and $114 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.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For year-to-date, general corporate expense and other were higher by $13 million compared to the same period in 2023.