Owens Corning

13. 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 our global cost reduction, product line and productivity initiatives and the Company’s growth strategy.

ACQUISITION-RELATED TRANSACTION COSTS

During 2024, the Company incurred $49 million of transaction costs related to its acquisition of Masonite. Please refer to Note 7 of the Consolidated Financial Statements for further information.

ACQUISITION-RELATED INTEGRATION COSTS

During 2024, the Company incurred $83 million of integration costs related to its acquisition of Masonite.

Please refer to Note 7 of the Consolidated Financial Statements for further information.

RESTRUCTURING RELATED COSTS

Building Materials Business Exit Restructuring

On November 4, 2024, the Company entered into a related party agreement to sell its Insulation segment's building materials business in China and Korea to a member of the business’ management team. The Company recorded the assets at the fair value less cost to sell, which was less than the carrying value and resulted in an impairment of $91 million related primarily to Property, Plant and Equipment and Goodwill.

Following the signing of the agreement, the Company took actions to reduce headcount and implement cost savings initiatives. These actions are expected to result in cumulative costs of approximately $15 million, primarily related to severance and other exit costs. During 2024, the Company recorded $6 million of cash charges, primarily related to severance.

Acquisition-Related Restructuring

Following the acquisition of Masonite, within the Company's Doors segment, the Company took actions to realize expected synergies from the newly acquired operations. These actions include the decision to exit the Santiago, Chile facility within the segment.

During 2024, the Company recorded $55 million of charges, of which $28 million were non-cash charges, primarily related to the accelerated vesting of equity awards and $27 million of cash charges, primarily related to severance. The Company is continuing to review synergies as a result of this acquisition and expects to incur a material amount of incremental costs into future years.

Global Composites Restructuring

In December 2023, the Company took actions to reduce costs throughout our global Composites segment given current market conditions, primarily through global workforce reductions, as well as streamlining manufacturing and supply chain operations. These actions primarily include salaried workforce reductions and the relocation of the Changzhou, China operations to Hangzhou, China.

In connection with these actions, the Company estimates it will incur cash charges in the range of $20 million to $30 million, primarily related to severance and other exit costs, including termination costs, and non-cash charges in the range of $15 million to $20 million, primarily related to accelerated depreciation.

During 2024, the Company recorded $17 million of charges, of which $10 million were non-cash charges, primarily related to accelerated depreciation and $7 million of cash charges, primarily related to severance and other exit costs.

Building Materials Asia-Pacific Optimization

In December 2023, the Company took actions to further its ongoing cost optimization strategy for the Insulation segment by permanently closing the Xi'an, China facility, which had previously ceased operations, and permanently closing one idled production line at the Guangde, China facility. These actions resulted in cumulative costs of approximately $20 million, primarily related to accelerated depreciation. During 2024, the Company did not incur any charges relating to this project and does not expect any future charges.

Protective Packaging Exit

In May 2023, the Company made the decision to exit the Protective Packaging business within the Roofing segment, including the production and sale of wood packaging, metal packaging and custom products. Exiting Protective Packaging will allow the Company to focus resources on the growth of its building materials products, which supports the future growth aspirations of the enterprise. With the exit of the Protective Packaging business, the Company closed its plants in Dorval, Quebec and Mission, British Columbia, Canada. The Company also ceased operations at its Qingdao, China facility.

In connection with the exit of the Protective Packaging business, the Company estimated that it would incur cash charges of approximately $15 million, primarily related to severance and other exit costs. Additionally, the Company estimated that it would incur total non-cash charges in the range of $70 to $75 million, primarily related to accelerated depreciation of property, plant and equipment and accelerated amortization of definite-lived intangibles.

During 2024, the Company recorded $5 million of cash charges, primarily related to other exit costs. The Company does not expect to recognize significant incremental costs related to these actions.

Wabash Facility Closure

In April 2023, the Company took actions to support its strategy to operate a flexible and cost-efficient manufacturing network through decisions to relocate the Wabash, Indiana mineral wool operations to Joplin, Missouri and to exit the U.S. granulated mineral wool market. These actions resulted in cumulative costs of approximately $30 million, primarily related to severance and accelerated depreciation.

During 2024, the Company did not incur any charges relating to this project and does not expect to incur any future charges.

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 costs of approximately $20 million, primarily related to severance and other exit costs. During 2024, the Company recorded $3 million of charges primarily related to severance costs. The Company does not expect to recognize significant incremental costs related to these actions.

Composites Strategic Realignment Actions

On July 1, 2022, the Company finalized the sale of the European portion of the DUCS product line located in Chambéry, France, within the Company's Composites segment. The Company recorded a pre-tax charge of $30 million in Other expense, net on the Consolidated Statements of Earnings in 2022 to reflect the fair value less cost to sell the assets. The Company also took 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. During 2023, the Company recorded $2 million of charges primarily related to other exit costs. During 2024, the Company did not incur any charges relating to this project and does not expect any future charges.

Roofing Restructuring Actions

In December 2021, the Company took actions to restructure operations within the Roofing segment's components product line by relocating production assets from China to India, which allowed the business to optimize its manufacturing network and support a tariff mitigation strategy. During 2022, the Company recorded $3 million of charges primarily related to severance and other exit costs. During 2023, the Company recorded $2 million of charges primarily related to other exit costs. During 2024, the Company did not incur any charges relating to this project and does not expect any further charges.

Santa Clara Insulation Site

During the third quarter of 2021, the Company entered into a sales agreement for the Company's Insulation site in Santa Clara, California as part of the Company's on-going strategy to operate a flexible, cost-efficient manufacturing network and geographically locate its assets to better serve its customers. On March 3, 2023, the Company finalized the sale of this site for total proceeds of $234 million, net of transaction fees. Total proceeds included a non-refundable deposit of $50 million received in the third quarter of 2021. During 2024, the Company did not incur any charges relating to this project and does not expect any further charges.

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:

Summary of Unpaid Liabilities

The following tables summarize the status of the unpaid liabilities from the Company’s restructuring activities:

As of December 31, 2024, the remaining liability balance is primarily comprised of $25 million related to severance, which the Company expects to pay over the next twelve months.

As previously stated, we have engaged in restructuring programs over the past several years. For the purposes of this table, the Building Materials Asia-Pacific Optimization, Composites Strategic Realignment Actions, Roofing Restructuring Actions and Santa Clara Insulation Site restructuring programs have been aggregated as "Other Programs" for this note. As of December 31, 2024, we do not expect to incur any material future charges related to the Other Programs.