Owens Corning

6. GOODWILL AND OTHER INTANGIBLE ASSETS

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.

Goodwill

The changes in the net carrying value of goodwill by segment are as follows:

First Quarter Goodwill Triggering Event

During the first quarter of 2025, our internal reporting and management structure changed, resulting in the identification ofthree new reportable segments: Roofing, Insulation and Doors. As a result of our segment reorganization, we reassigned the former Composites reportable segment assets and liabilities into the Roofing and Insulation reportable segments. As this change was considered a goodwill triggering event, we performed an interim goodwill impairment test both prior and subsequent to the reorganization using a discounted cash flow approach for each of the respective reporting units.

Prior to reorganizing the reportable segments and integrating portions of the former Composites reportable segment, but after allocating Goodwill to discontinued operations, the Company tested the Goodwill for the Roofing, Insulation and Composites reporting units. As a result of this test, we determined that no impairment existed for any of the reporting units and that the business enterprise value for the Roofing, Insulation and Composites reporting units substantially exceeded their carrying values. The remaining Composites Goodwill, after the allocation of Goodwill to discontinued operations, of $325 million was allocated between the Roofing and Insulation reporting units based on the relative fair values of the portions of the Composites business, which were integrated based on the discounted cash flows of each.

Subsequent to allocating Goodwill to the Roofing and Insulation reporting units, as part of reorganization, the Company tested the Goodwill for the Roofing and Insulation reporting units. As a result of this test, we determined that no impairment existed for either reporting unit and that the business enterprise value for the Roofing and Insulation reporting units substantially exceeded their carrying values as of the date of our assessment.

Second Quarter Goodwill Triggering Event

In the second quarter of 2025, the Company performed its ongoing assessment to consider whether events or circumstances had occurred that could more likely than not reduce the fair value of the Doors reporting unit below its carrying value. The narrow cushion on the Doors reporting unit, due to its recent acquisition, and the high level of near-term macroeconomic uncertainty caused by recently announced tariffs, triggered the Company to perform an interim goodwill impairment test as of June 30, 2025 for the Doors reporting unit. The fair value of the reporting unit was determined based on a discounted cash flow analysis, or income approach, as well as a market approach, based on market multiples of comparable companies.

As a result of this test, we determined that no impairment existed for the Doors reporting unit as the fair value exceeded the carrying value by approximately 5%. The most significant assumptions used in the fair value analysis were base year revenue, revenue growth rate, adjusted EBITDA margins, discount rate and market multiples under the market approach.

Third Quarter Goodwill Triggering Event

In the third quarter of 2025, the Company performed its ongoing assessment to consider whether events or circumstances had occurred that could more likely than not reduce the fair value of our reporting units below their carrying values. The narrow cushion on the Doors reporting unit, due to its recent acquisition, and the continuation of the previously disclosed macroeconomic uncertainty including softness in North America discretionary residential repair and remodeling activity and near-term challenges in North America residential new construction, triggered the Company to perform an interim goodwill impairment test as of September 30, 2025. The fair value of the reporting unit was determined based on a combination of the discounted cash flow analysis, or income approach, as well as the Guideline Public Company Method, or a market approach, based on market multiples of comparable companies.

Based on the results of this testing, the Company recorded a $780 million pre-tax non-cash impairment charge, equal to the excess of the Doors reporting unit's carrying value over its fair value, in the third quarter of 2025. This charge was recorded in Goodwill impairment charge on the Consolidated Statements of Earnings, and was included in the Corporate, Other and Eliminations reporting category. The reduction in fair value for the Doors reporting unit, and corresponding impairment charge, was primarily driven by a decrease in near-term revenue, including 2026, as a result of the macroeconomic uncertainty.

The most significant assumptions used in the fair value analysis were base year revenue, revenue growth rate, long-term growth rate, adjusted EBITDA margins, discount rate and market multiples under the market approach.

The remaining balance of goodwill for the Doors reporting unit of $732 million as of September 30, 2025 continues to be at risk for future impairment. Continued uncertainty surrounding the macroeconomic factors impacting this reporting unit or changes in the significant assumptions mentioned above, could increase the likelihood of an additional future impairment.

Other Intangible Assets

Other intangible assets consist of the following:

(a) Other primarily includes emissions rights.

Indefinite-Lived Intangible Assets

There aretwo indefinite-lived intangible assets that are at an increased risk of impairment, which are used by our Insulation segment and our Doors segment.

In the fourth quarter of 2022, an indefinite-lived tradename used by our Insulation segment was partially impaired. A change in the estimated long-term revenue growth rate or discount rate for our Insulation segment could increase the likelihood of a future impairment.

In the third quarter of 2025, we performed an interim impairment test for an indefinite-lived tradename used by our Doors segment, based on the macroeconomic conditions that precipitated the interim goodwill impairment test described above. As a result of this test, we determined that no impairment existed for the tradename.

Fair value used in testing for potential impairment of our tradename was calculated using the relief-from-royalty method by applying an estimated market value royalty rate to the forecasted revenues of the businesses that utilize that asset. The assumed cash flows from this calculation are discounted at a rate based on a market participant discount rate. None of the assumptions were deemed to be significant.

The following table presents the carrying values of these assets as of September 30, 2025:

Definite-Lived Intangible Assets

The Company amortizes the cost of other intangible assets over their estimated useful lives which, individually, range up to 25 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.

Amortization expense for intangible assets for the three and nine months ended September 30, 2025 was $37 million and $114 million, respectively. Amortization expense for intangible assets for the three and nine months ended September 30, 2024 was $42 million and $97 million, respectively. Amortization expense for intangible assets is estimated to be $34 million for the remainder of 2025.

The estimated amortization expense for intangible assets for the next five fiscal years ended December 31 is as follows: