Owens Corning

15. PENSION PLANS

Pension Plans

The Company sponsors defined benefit pension plans. Under the plans, pension benefits are based on an employee’s years of service and, for certain categories of employees, qualifying compensation. Company contributions to these pension plans are determined by an independent actuary to meet or exceed minimum funding requirements. In our U.S. plan, the unrecognized cost of any retroactive amendments and actuarial gains and losses are amortized over the average remaining life expectancy of inactive participants. In all of our Non-U.S. plans, the unrecognized cost of any retroactive amendments and actuarial gains and losses are amortized over the average future service period of plan participants expected to receive benefits.

During the fourth quarter of 2023, the Company entered intotwo agreements to purchase non-participating annuity contracts from insurance companies to transfer $291 million of the Company's outstanding pension projected benefit obligation (“PBO”) related to certain U.S. and non-U.S. pension plans. These transactions were funded with pension plan assets of $268 million. As a result of these transactions, the Company recognized a pre-tax settlement charge of $145 million in the fourth quarter of 2023 from the accelerated recognition of a pro rata portion of plan actuarial losses. This charge was recorded in Non-operating (income) expense, net on the Consolidated Statements of (Loss) Earnings. These transactions did not have a material effect on the plans' funded statuses.

On February 13, 2025, the Company entered into the GR Agreement for the sale of our GR business. In connection with the GR Agreement, some plans will be transferring at the time of sale. The related portions of assets and liabilities are identified as discontinued operations as shown below.

The following tables provide a reconciliation of the change in the projected benefit obligation, the change in plan assets and the net amount recognized in the Consolidated Balance Sheets:

The following table presents the amount recorded and respective location in the Consolidated Balance sheets:

The following table represents the amounts recorded to Accumulated Other Comprehensive Income:

For the twelve months ended December 31, 2025, the actuarial loss of $2 million was largely the result of increased discount rates. In the U.S. plan, the actuarial loss was primarily driven by the increase in the discount rate along with a small gain due to the impact of differences between expected and actual pension experience. In the Non-U.S. plans, no actuarial gain or loss was recognized.

For the twelve months ended December 31, 2024, the actuarial gain of $34 million was largely the result of increased discount rates. In the U.S. plan, the actuarial gain was primarily driven by the increase in the discount rate along with a small gain due to the impact of differences between expected and actual pension experience. In the Non-U.S. plans, the actuarial gain was primarily driven by an increase in discount rates across a majority of the plans offset by an actuarial loss due to the impact of differences between expected and actual pension experience in Canada.

The following table presents information about the PBO, accumulated benefit obligation (“ABO”) and plan assets of the Company’s pension plans:

Weighted-Average Assumptions Used to Determine Benefit Obligation

The following table presents weighted average assumptions used to determine benefit obligations at the measurement dates:

Components of Net Periodic Pension Cost

The following table presents the components of net periodic pension cost:

Weighted-Average Assumptions Used to Determine Net Periodic Pension Cost

The following table presents weighted-average assumptions used to determine net periodic pension costs for the periods noted:

(a) Not applicable due to changes in plan made on August 1, 2009 that were effective beginning January 1, 2010.

The expected return on plan assets assumption is derived by taking into consideration the target plan asset allocation, historical rates of return on those assets, projected future asset class returns and net outperformance of the market by active investment managers. An asset return model is used to develop an expected range of returns on plan investments over a 30 year period, with the expected rate of return selected from a best estimate range within the total range of projected results. The result is then rounded down to the nearest 25 basis points.

Items Measured at Fair Value

The Company classifies and discloses pension plan assets in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Plan Assets

The tables in this section show pension plan asset fair values and fair value leveling information. The assets are categorized into one of the three levels of the fair value hierarchy or are not subject to leveling, in the case of investments that are valued using the net asset value per share (or its equivalent) practical expedient (“NAV”).

The following tables summarize the fair values and applicable fair value hierarchy levels of United States pension plan assets:

The following tables summarize the fair values and applicable fair value hierarchy levels of non-United States pension plan assets:

Investment Strategy

The current targeted asset allocation for the United States pension plan is to have 34% of assets invested in equities, real estate, credit strategies, and hedge funds and 66% of assets primarily invested corporate bonds, U.S. Treasuries and agency securities and money market instruments. Assets are rebalanced to conform to policy tolerances. The Company actively evaluates the reasonableness of its asset mix given changes in the projected benefit obligation and market dynamics. Our investment policy and asset mix for the non-United States pension plans varies by location and is based on projected benefit obligation and market dynamics.

Estimated Future Benefit Payments

The following table shows estimated future benefit payments from the Company’s pension plans:

Contributions

The Company expects to contribute $20 million in cash to its defined benefit pension plans during 2026. Actual contributions to the plans may change as a result of a variety of factors, including changes in laws that impact funding requirements.

Defined Contribution Plans

The Company sponsors five defined contribution plans which are available to substantially all United States employees. The Company matches a percentage of employee contributions up to a maximum level. The Company recognized expense of $78 million, $73 million and $65 million during the years ended December 31, 2025, 2024 and 2023, respectively, related to these plans.