JELD-WEN Holding Inc

Note 2. Discontinued Operations

On April 17, 2023, we entered into a Share Sale Agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum Equity Advisors, LLC, to sell JW Australia, for a purchase price of approximately AUD $688 million. On July 2, 2023, we completed the sale, receiving net cash proceeds of approximately $446 million, including $3.3 million of cash received from the settlement of certain forward contracts. Refer to Note 23 -Derivative Financial Instrumentsfor more information.

In the year ended December 31, 2023, we recorded a net gain on sale of discontinued operations of $15.7 million related to the July 2, 2023, sale of JW Australia. The net gain on sale includes $30.3 million of cumulative translation adjustments losses and $1.0 million of accumulated net actuarial pension losses reclassified from other comprehensive income. The net gain on sale also includes a $10.2 million loss recorded in the fourth quarter of 2023 in estimated taxes directly related to the sale transaction and return to provision true ups for the period in which we owned JW Australia. We recorded a $1.4 million loss on sale of discontinued operations in the year ended December 31, 2024, related to settlement of an outstanding tax liability for JW Australia.

This divestiture qualified as a discontinued operation as of April 17, 2023, since it represents a strategic shift for us and has a major effect on our consolidated results of operations. Accordingly, the results of operations for the JW Australia reportable segment, together with certain costs related to the sale, have been classified as discontinued operations within the consolidated statements of operations for all periods presented.

After the completion of the sale, we entered into an agreement to provide certain transition services to JW Australia, including providing information technology post-closing services, purchases under a supply agreement, and reimbursement for certain costs to upgrade specific IT systems up to a capped amount. As of December 31, 2024, we had a liability of $3.2 million relating to these matters, which was included in accrued expenses and other current liabilities in our consolidated balance sheet. As of December 31, 2023, our liability relating to these matters was $8.2 million, of which $6.1 million was included in accrued expenses and other current liabilities, and the remaining was included in deferred credits and other liabilities in the accompanying consolidated balance sheet.

Components of amounts reflected in the consolidated statements of operations related to discontinued operations are presented in the table, as follows:

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows through the divestiture date of July 2, 2023. The following table presents cash flow and non-cash information related to discontinued operations:

Note 3. Accounts Receivable

We sell our manufactured products to a large number of customers, primarily in the residential housing construction and remodel sectors, broadly dispersed across many domestic and foreign geographic regions. We assess the credit risk relating to our accounts receivable based on quantitative and qualitative factors, including historical credit collections within each region where we have operations. We perform ongoing credit evaluations of our customers to minimize credit risk. We do not usually require collateral for accounts receivable, but do require advance payment, guarantees, a security interest in the products sold to a customer, and/or letters of credit in certain situations. Customer accounts receivable converted to notes receivable are collateralized by inventory or other collateral. Two customers, The Home Depot and Lowe’s Companies, each accounted for more than 10% of the consolidated accounts receivable, net balance as of December 31, 2024 and 2023.

The following is a roll forward of our allowance for credit losses:

Note 4. Inventories

Inventories are stated at the lower of cost or net realizable value. Finished goods and work-in-process inventories include material, labor, and manufacturing overhead costs.

Note 5. Property and Equipment, Net

We recorded accelerated depreciation of our plant and equipment of $15.0 million, $7.4 million and $0.7 million during the years ended December 31, 2024, 2023 and 2022, respectively, within restructuring and asset-related charges in the accompanying consolidated statements of operations. Refer to Note 19 - Restructuring and Asset-Related Chargesfor more information.

Additionally, we recorded accelerated depreciation of $9.1 million during the year ended December 31, 2023, from reviews of North America equipment capacity optimization. These charges were recorded within cost of sales in the accompanying consolidated statements of operations.

The effect on our carrying value of property and equipment due to currency translations for foreign property and equipment, net, was a decrease of $13.6 million and an increase of $7.9 million as of December 31, 2024 and 2023, respectively.

Depreciation expense was recorded as follows:

Note 6. Goodwill

The following table summarizes the changes in goodwill by reportable segment:

(1)During the fourth quarter of 2024, we recognized a $31.4 million impairment charge related to the court-ordered divestiture of Towanda. As of December 31, 2024, 2023 and 2022, the assets and liabilities of Towanda qualify as held for sale and are not included in the above reportable segments amount. Refer to Note 20 -Held for Sale for more information.

During the third quarter of 2022, management identified various qualitative and quantitative factors which collectively indicated a triggering event had occurred within our North America and Europe reporting units. These factors included the macroeconomic environment in each region including increasing interest rates, persistent inflation, and operational inefficiencies attributable to ongoing global supply chain disruptions, the continuing geopolitical environment in Europe associated with the conflict between Russia and Ukraine, and foreign exchange fluctuations. These factors have negatively impacted our business performance. Based upon the results of our interim impairment analysis, we concluded that the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $54.9 million, for the year ended December 31, 2022, representing a partial impairment of goodwill assigned to the Europe reporting unit. In addition, we determined our North America reporting unit was not impaired.

As previously disclosed, following our 2023 annual impairment test for our Europe reporting unit, we concluded that while no impairment existed, the fair value of our reporting unit exceeded its carrying value by approximately 3%. During the third quarter of 2024, the Company updated its financial forecast for the Europe reportable segment to reflect anticipated macroeconomic conditions of prolonged elevated interest rates leading to reduced revenue growth expectations. The end of the third fiscal quarter also marks the conclusion of our generally heavier seasonal sales period and our European net sales were negatively impacted by weaker market demand. Accordingly, the Company determined that a triggering event occurred requiring an interim goodwill impairment test for its European reporting unit as of September 28, 2024. Based upon the results of our interim impairment assessment, we concluded the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $63.4 million, representing a partial impairment of goodwill assigned to the Europe reporting unit. Following this partial impairment, the reporting unit’s carrying amount equaled the fair value.

We performed our annual impairment assessments during the fourth quarter. The Company elected to perform a qualitative analysis as of the fourth quarter for the Europe reporting unit. Our analysis did not determine that it was more likely than not that the carrying value of the Europe reporting unit exceeded the fair value. During the fourth quarter, we quantitatively determined that the fair value of our North America reporting unit exceeded its net carrying amount and no goodwill impairment existed. We determined that the fair value of our North America reporting unit would have to decline by less than 10% to be considered impaired.

Note 7. Intangible Assets, Net

The cost and accumulated amortization values of our intangible assets were as follows:

We recorded accelerated amortization of $14.1 million during the years ended December 31, 2024 and 2023, for an ERP that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement during the first quarter of 2024. The expense was recorded within SG&A expense in the accompanying consolidated statements of operations.

The effect on our carrying value of intangible assets due to currency translations for foreign intangible assets was a decrease of $1.2 million and an increase of $0.7 million as of December 31, 2024 and 2023, respectively.

Amortization expense was recorded as follows:

Estimated future amortization expense:

Note 8. Leases

We lease certain warehouses, distribution centers, office spaces, land, vehicles, and equipment.

The Company’s ROU assets and lease liabilities were as follows:

(1) Finance lease assets are recorded net of accumulated depreciation of $5.0 million and $5.1 million as of December 31, 2024 and 2023, respectively.

During the year ended December 31, 2024, we obtained $24.0 million in ROU assets in exchange for operating lease liabilities, primarily relating to real estate. We obtained $52.5 million in ROU assets in exchange for operating lease liabilities, primarily relating to real estate during the year ended December 31, 2023.

During the years ended December 31, 2024 and 2023, we obtained $5.6 million and $5.4 million in ROU assets, respectively, in exchange for finance lease liabilities.

We recorded accelerated amortization on our ROU assets of $7.2 million, $0.5 million and $0.9 million during the years ended December 31, 2024, 2023 and 2022, respectively, within restructuring and asset-related charges in the accompanying consolidated statements of operations. Refer to Note 19 - Restructuring and Asset-Related Chargesfor more information.

The components of lease expense were as follows:

As of December 31, 2024, future minimum lease payment obligations under operating and finance leases are as follows for each of the periods ending December 31:

(1) Operating lease payments include $5.7 million related to options to extend lease terms that are reasonably certain of being exercised.

Note 9. Accrued Payroll and Benefits

Accrued payroll and benefits consisted of the following:

Note 10. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

The accrued sales and advertising rebates, accrued interest payable, accrued freight, and non-income related taxes can significantly fluctuate period-over-period due to timing of payments.

Note 11. Warranty Liability

Warranty terms range fromone year to lifetime on certain window and door components. Warranties are normally limited to servicing or replacing defective components for the original customer. Product defects arising within six months of sale are classified as manufacturing defects and are not included in the current period expense below. Some warranties are transferable to subsequent owners and are either limited to 10 years from the date of manufacture or require pro rata payments from the customer. Estimated warranty costs based on historical experience are recorded as a provision at the time of sale. The provision is adjusted periodically to reflect actual experience.

An analysis of our warranty liability is as follows:

The most significant component of our warranty liability was in the North America segment. As of December 31, 2024, the warranty liability in the North America segment totaled $40.9 million, after discounting future estimated cash flows at rates between 4.60% and 4.63%. Without discounting, the liability would have increased by approximately $3.7 million.

Note 12. Long-Term Debt

Our long-term debt, net of original issue discount and unamortized debt issuance costs, consisted of the following:

(1)Term Loan B and certain finance leases and other financing arrangements are subject to variable interest rates.

Summaries of our significant changes to outstanding debt agreements as of December 31, 2024, are as follows:

Senior Secured Notes and Senior Notes

In December 2017, we issued $800.0 million of Senior Notes intwo tranches: $400.0 million bearing interest at 4.63% and maturing in December 2025, and $400.0 million bearing interest at 4.88% and maturing in December 2027 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

In May 2020, we issued $250.0 million of Senior Secured Notes bearing interest at 6.25% and maturing in May 2025 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The proceeds were net of fees and expenses associated with debt issuance, including an underwriting fee of 1.25%. Interest is payable semiannually, in arrears, each May and November.

On August 3, 2023, we redeemed all $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior Notes. The Company recognized a pre-tax loss of $6.5 million on the redemption in the third quarter of 2023, consisting of $3.9 million in call premium and $2.6 million in accelerated amortization of debt issuance costs.

In August 2024, we issued $350.0 million of Senior Notes bearing interest at 7.00% and maturing September 2032 in a private placement for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The proceeds were net of fees and expenses associated with debt issuance including an underwriting fee of 1.25%. We incurred debt issuance costs of $5.5 million which will be amortized to interest expense over the life of the notes using the effective interest method. Interest is payable semiannually, in arrears, each March and September.

In September 2024, we utilized a portion of the proceeds from the issuance of our 7.00% Senior Notes described above to redeem the remaining $200.0 million of our 4.63% Senior Notes. The Company recognized a pre-tax loss of $0.5 million on the redemption in the third quarter of 2024, consisting entirely in accelerated amortization of debt issuance costs.

Term Loan Facility

U.S. Facility - Initially executed in October 2014, we amended the Term Loan Facility in July 2021 to, among other things, extend the maturity date from December 2024 to July 2028 and provide additional covenant flexibility. Pursuant to the amendment, certain existing and new lenders advanced $550.0 million of replacement term loans, the proceeds of which were used to prepay in full the amount outstanding under the previously existing term loans. The replacement term loans originally bore interest at LIBOR (subject to a floor of 0.00%) plus a margin of 2.00% to 2.25% depending on JWI’s corporate credit ratings. In addition, the amendment also modified certain other terms and provisions of the Term Loan Facility and adds language to address the replacement of LIBOR with a SOFR basis upon the June 30, 2023, cessation of the publication of LIBOR. Voluntary prepayments of the replacement term loans are permitted at any time, in certain minimum principal amounts, but were subject to a 1.00% premium during the first six months. The amendment requires 0.25% of the initial principal to be repaid quarterly until maturity. As a result of this amendment, we recognized debt extinguishment costs of $1.3 million, which included $1.0 million of unamortized debt issuance costs and original discount fees.

In June 2023, we amended the Term Loan Facility to replace LIBOR with a Term SOFR based rate as the successor benchmark rate and made certain other technical amendments and related conforming changes. All other material terms and conditions were unchanged.

In January 2024, we amended the Term Loan Facility to lower the applicable margin for replacement term loans, remove certain provisions no longer relevant to the parties, and make certain other technical amendments and related conforming changes. Pursuant to the amendment, replacement term loans bear interest at SOFR plus a margin of 1.75% to 2.00% depending on JWI’s corporate credit ratings, compared to a margin of 2.00% to 2.25% under the previous amendment. All other material terms and conditions of the Term Loan Agreement were unchanged. As a result of this amendment, we recognized debt extinguishment and refinancing costs of $1.4 million, which included $0.8 million of unamortized debt issuance costs and original discount fees.

In August 2024, we utilized a portion of the proceeds received from our issuance of $350.0 million of Senior Notes to repay $150.0 million of the outstanding balance of our Term Loan Facility. As of December 31, 2024, the outstanding principal balance, net of original issue discount, was $380.5 million.

In May 2020, we entered into interest rate swap agreements with a weighted average fixed rate of 0.395% paid against one-month LIBOR floored at 0.00% with outstanding notional amounts aggregating to $370.0 million corresponding to that amount of the debt outstanding under our Term Loan Facility. In June 2023, the interest rate swap agreements were amended to convert to a SOFR basis on June 30, 2023, resulting in a weighted average fixed rate of 0.317% paid against one-month USD-SOFR CME Term floored at (0.10)%. The interest rate swap agreements were designated as cash flow hedges of a portion of the interest obligations on our Term Loan Facility borrowings and matured in December 2023. Refer to Note 23 -Derivative Financial Instruments for more information on our derivative assets and liabilities.

In February 2024, we entered into interest rate collar agreements with a cap rate of 4.50% paid against one-month USD-SOFR CME Term floored at 3.982% and 3.895% with outstanding notional amounts aggregating to $100.0 million corresponding to that amount of the debt outstanding under our Term Loan Facility. The interest rate collar agreements were designated as cash flow hedges of a portion of the interest obligations on our Term Loan Facility borrowings and mature in February 2026. Refer to Note 23 -Derivative Financial Instruments for more information on our derivative assets and liabilities.

Revolving Credit Facility

ABL Facility - Initially executed in 2014, extensions of credit under our ABL Facility are limited by a borrowing base calculated based on specified percentages of the value of eligible accounts receivable and inventory, subject to certain reserves and other adjustments. We pay a fee of 0.25% on the unused portion of the commitments. The ABL Facility has a minimum fixed charge coverage ratio that we are obligated to comply with under certain circumstances. The ABL Facility has various non-financial covenants, including restrictions on liens, indebtedness, dividends, customary representations and warranties, and customary events of defaults and remedies.

In July 2021, we amended the ABL Facility to, among other things, extend the maturity date from December 2022 to July 2026, increase the aggregate commitment to $500.0 million, provide additional covenant flexibility, conform certain terms and provisions to the Term Loan Facility, and amend the interest rate grid applicable to the loans thereunder by adding language to address the replacement of LIBOR with a SOFR basis upon the June 30, 2023 cessation of the publication of LIBOR. Pursuant to the amendment, the amount allocated to U.S. borrowers was increased to $465.0 million. The amount allocated to Canadian borrowers was maintained at $35.0 million. Borrowings under the ABL Facility bore, at the borrower’s option, interest at either a base rate plus a margin of 0.25% to 0.50% depending on excess availability or LIBOR (subject to a floor of 0.00%) plus a margin of 1.25% to 1.50% depending on excess availability. All other material terms and conditions were unchanged.

In June 2023, we amended the ABL Facility to replace LIBOR with a Term SOFR based rate as the successor benchmark rate and made certain other technical amendments and related conforming changes. All other material terms and conditions were unchanged.

As of December 31, 2024, we hadno outstanding borrowings, $2.8 million in letters of credit and $416.4 million available under the ABL Facility.

Mortgage Notes – In December 2007, we entered into thirty-year mortgage notes secured by land and buildings in Denmark with principal payments which began in 2018. In October 2024, we repaid the entire remaining principal balance of the mortgage notes of DKK 142.5 million ($20.7 million).

Finance leases and other financing arrangements – In addition to finance leases, we include loans secured by equipment in this category. As of December 31, 2024, we had $61.1 million outstanding in this category, with maturities ranging from 2024 to 2031.

As of December 31, 2024, we were in compliance with the terms of all our Credit Facilities and the indentures governing the Senior Notes.

The future maturities of debt, excluding unamortized debt issuance costs and original issue discounts as of December 31, 2024, are as follows:

Note 13. Deferred Credits and Other Liabilities

Included in deferred credits and other liabilities is the long-term portion of the following liabilities:

Note 14. Segment Information

We report our segment information in the same way management internally organizes the business to assess performance and make decisions regarding allocation of resources in accordance with ASC 280-10 -Segment Reporting. Management, inclusive of the CODM, reviews net revenues and Adjusted EBITDA from continuing operations to evaluate segment performance and allocate resources. We define Adjusted EBITDA from continuing operations as income (loss) from continuing operations, net of tax, adjusted for the following items: income tax expense (benefit); depreciation and amortization; interest expense (income), net; and certain special items consisting of non-recurring net legal and professional expenses and settlements; goodwill impairment; restructuring and asset-related charges; M&A related costs; net (gain) loss on sale of business, property, and equipment; loss on extinguishment and refinancing of debt; share-based compensation expense; pension settlement charges; non-cash foreign exchange transaction/translation (gain) loss; and other special items. We use Adjusted EBITDA from continuing operations because we believe this measure assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. For each of our segments, our CODM uses Adjusted EBITDA to measure operational performance by comparing historical, actual and forecasted amounts on a regular basis, and to allocate resources in the annual budget and forecasting process. Adjusted EBITDA is also a significant performance measure in our annual incentive compensation.

We havetwo reportable segments, organized and managed principally in geographic regions: North America and Europe. We report all other business activities in Corporate and unallocated costs. The Company’stwo reportable segments are defined as follows:

North America – Within our North America segment, the Company supplies windows and doors for residential and commercial markets, serving both new construction and repair & remodel projects. These products reach builders, repair and replacement contractors, architects, and homebuilders through direct and indirect channels, including dealer and distribution networks.

Europe – Within our Europe Segment, the Company manufactures and supplies to retailers, merchants, house-builders and construction companies’ interior doors, doorsets and door kits, in wood and steel, with both standard and high-performance features.

Factors considered in determining thetwo reportable segments include the nature of business activities, the management structure accountable directly to the CODM, the discrete financial information regularly provided to the CODM, and information presented to the Board of Directors and investors. The CODM is the CEO. No operating segments have been aggregated for our presentation of reportable segments.

The following tables set forth certain information relating to our segments’ operations:

Net revenues by locality are as follows:

Geographic information regarding property, plant, and equipment which exceed 10% of consolidated property, plant, and equipment is as follows:

Note 15. Income Taxes

Income before taxes, is comprised of the following:

Our foreign (loss) income is historically driven by our subsidiaries in Canada, Germany, Denmark, and United Kingdom.

Significant components of the provision for income taxes are as follows:

Reconciliation of the U.S. federal statutory income tax rate to our effective tax rate is as follows:

(1)Tax effect on sale of business during the year ended December 31, 2024, primarily relates to the sale of our business in St. Kitts.

During the year ended December 31, 2024, we recognized an expense of $24.6 million from the increase to valuation allowances on foreign and state NOL and credit carryforwards, $20.2 million of tax expense attributable to nondeductible goodwill impairment, $7.1 million of tax expense attributed to nondeductible expenses, and $4.5 million of tax expense attributed to the expiration of U.S. attributes partially offset by $2.7 million of tax benefit attributable to research and development credits.

During the year ended December 31, 2023, we recognized an expense of $32.7 million from the increase to valuation allowances on foreign and state NOL and credit carryforwards, $6.7 million of tax expense attributed to nondeductible expenses, and $7.2 million of tax expense attributed to the expiration of federal and state tax credit carryforwards partially offset by $3.8 million of tax benefit attributable to research and development credits.

During the year ended December 31, 2022, we recognized benefit of $9.9 million from the reduction to state NOL and state credits valuation allowance, and $1.9 million of tax benefit attributable to research and development tax credits, partially offset by $12.7 million tax expense attributable to nondeductible goodwill impairment.

Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of our assets, liabilities, and operating loss carryforwards. Significant deferred tax assets and liabilities are as follows:

At December 31, 2024 and 2023 the Company had NOL in various federal, state, and foreign jurisdictions of approximately $1,152.4 million and $1,130.2 million, respectively, which begin to expire in 2025. $252.6 million of such NOL carryforwards do not expire. In addition, the Company had tax credit carryforwards of $44.3 million and $40.3 million at December 31, 2024 and 2023, respectively, which begin to expire in 2025.

Valuation Allowance – The realization of deferred tax assets is based on historical tax positions and estimates of future taxable income. We evaluate both the positive and negative evidence that we believe is relevant in assessing whether we will realize the deferred tax assets. We consider historical taxable income, the scheduled reversal of deferred tax liabilities (including the effect in available carryback and carryforward periods), projected taxable income, and tax-planning strategies in making this assessment. A valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized. To fully utilize the NOLs and tax credits carryforwards, we will need to generate sufficient future taxable income in each respective jurisdiction before the expiration of the deferred tax assets governed by the applicable tax code.

Based on the level of historical taxable income and projections for future taxable income over the periods for which the deferred tax assets are deductible, management believes that it is more likely than not that we will realize the benefits of these deductible differences, net of existing valuation allowances at December 31, 2024. The amount of the deferred tax asset considered realizable, however, could be reduced or increased in the near term if estimates of future taxable income during the carryforward periods are reduced or exceeded.

Subsequently recognized tax benefits related to the valuation allowance for deferred tax assets as of December 31, 2024, will be allocated to consolidated statement of operations.

We had a valuation allowance of $78.1 million and $54.8 million as of December 31, 2024 and 2023, respectively. The increase was primarily driven by an increase of $19.2 million and an increase of $5.3 million against our foreign and state net operating loss carryforwards, respectively.

We had a valuation allowance of $54.8 million and $21.0 million as of December 31, 2023 and 2022, respectively. The increase was primarily driven by an increase of $30.0 million and $2.7 million against our foreign and state net operating loss carryforwards, respectively.

The following is the activity in our valuation allowance:

Earnings of Foreign Subsidiaries – The Company continually evaluates its global cash needs. During 2021, the Company removed its indefinite reinvestment assertion on a majority of unremitted earnings and certain other aspects of outside basis differences in its foreign subsidiaries. Deferred tax expense of $5.0 million was recorded for withholding and income taxes which would be owed if earnings were remitted to the U.S. parent. In 2023, the Company completed its sale of the Australasia business and correspondingly reduced its deferred tax liability related to the Australasia unremitted earnings in 2023. As of December 31, 2024, we have $2.3 million of deferred tax liability remaining on our balance sheet. The Company continued to make an indefinite reinvestment assertion on other aspects of the outside basis difference in foreign subsidiaries that would attract a tax cost in excess of the Company’s cost of capital.

The Company repatriated $71.3 million and $21.8 million from certain foreign jurisdictions for the years ended December 31, 2024 and 2023, respectively. The Company is asserting that its future earnings, in excess of previously taxed earnings, are permanently reinvested as of December 31, 2024. The Company continues to make an indefinite reinvestment assertion on other aspects of the outside basis differences in foreign subsidiaries that would attract a significant cost of capital. No additional deferred tax expense is recorded on prospective earnings. We hold a combined book-over-tax outside basis difference of $187.5 million and $245.1 million as of December 31, 2024 and 2023, respectively, in our investment in foreign subsidiaries on a continuing operations basis and may incur up to $22.1 million of local country income and withholding taxes in case of distribution of unremitted earnings.

Dual-Rate Jurisdiction – Estonia and Latvia tax the corporate profits of resident corporations at different rates depending upon whether the profits are distributed. The undistributed profits of resident corporations are exempt from taxation while any distributed profits are subject to a 20% -22% corporate income tax rate. The liability for the tax on distributed profits is recorded as an income tax expense in the period in which a dividend is declared. The balance of retained earnings of our Estonian subsidiary which, if distributed, would be subject to this tax was $87.3 million and $85.0 million as of December 31, 2024 and 2023, respectively. The balance of retained earnings of our Latvian subsidiary which, if distributed, would be subject to this tax was $32.6 million and $32.8 million as of December 31, 2024 and 2023, respectively.

Tax Payments and Balances – We made tax payments of $48.1 million, $48.8 million and $46.8 million during the years ended December 31, 2024, 2023 and 2022, respectively, primarily for foreign liabilities. We received tax refunds of $2.0 million, $0.7 million and $1.9 million during the years ended December 31, 2024, 2023 and 2022, respectively. Total receivables for tax refunds are recorded in other current assets in the accompanying balance sheets and totaled $15.3 million and $14.2 million at December 31, 2024 and 2023, respectively. Foreign payables for taxes are recorded in accrued income taxes payable in the accompanying balance sheets and totaled $7.4 million and $9.3 million at December 31, 2024 and 2023, respectively. We have $18.9 million of non-current taxes receivable as of December 31, 2024. We donot have any non-current taxes receivable as of December 31, 2023. We donot have any non-current taxes payable as of December 31, 2024 and 2023.

Accounting for Uncertain Tax Positions –A reconciliation of the beginning and ending amounts of unrecognized tax benefits excluding interest and penalties is as follows:

Unrecognized tax benefits were $43.8 million, $38.9 million and $29.3 million at December 31, 2024, 2023 and 2022, respectively. The increase is primarily related to management’s assessment of a potential liability as a result of ongoing tax audit discussions in Europe as well as uncertainty on prior years’ research and development tax credits in the U.S. The unrecognized tax benefit recorded in the current year is partially offset by an increase in deferred tax assets expected to be recovered should these liabilities be assessed. Interest and penalties related to UTPs are reported as a component of tax expense and included in the total UTP balance within deferred credits and other liabilities in the accompanying consolidated balance sheets. There were amounts accrued associated with interest and penalties of $3.7 million, $6.7 million and $9.8 million at December 31, 2024, 2023 and 2022, respectively.

There were benefits of $6.6 million, $12.3 million and $18.1 million included in the balance of unrecognized tax benefits as of December 31, 2024, 2023 and 2022, respectively, that would affect the effective tax rate if recognized. Such benefits, if recognized, would be subject to a realizability assessment to the extent they increase our tax attributes. We cannot reasonably estimate the conclusion of certain non-U.S. income tax examinations and its outcome at this time.

We operate in numerous U.S., state, and foreign tax jurisdictions and are generally open to examination for tax years 2012 and forward. As of December 31, 2024, the Company has subsidiaries in various state and foreign jurisdictions under audit for tax years 2011 through 2022.

Note 16. Capital Stock

Preferred Stock -Our Board of Directors is authorized to issue Preferred Stock from time to time in one or more series and with such rights, privileges, and preferences as the Board of Directors shall from time to time determine. We have not issued any shares of Preferred Stock.

Common Stock -Common Stock includes the basis of shares outstanding plus amounts recorded as additional paid-in capital. Shares outstanding exclude the shares issued to the Employee Benefit Trust that are considered similar to treasury shares and total 193,941 shares at December 31, 2024 and 2023 with a total original issuance value of $12.4 million.

We record share repurchases on their trade date and reduce shareholders’ equity and increase accounts payable. Repurchased shares are retired, and the excess of the repurchase price over the par value of the shares is charged to retained earnings.

On July 28, 2022, the Board of Directors reduced our previous repurchase authorization of $400.0 million to a total aggregate value of $200.0 million with no expiration date. As of December 31, 2024, $175.7 million was remaining under the repurchase program.

During the years ended December 31, 2024, and 2022, we repurchased 1,600,000 and 6,848,356 shares of our Common Stock at an average price of $15.18 and $19.12, respectively. We did not repurchase shares of our Common Stock during the year ended December 31, 2023.

Note 17. Earnings Per Share

The basic and diluted income per share calculations were determined based on the following share data:

For the year ended December 31, 2024, we had net losses from operations. As a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share as their inclusion would have been antidilutive.

The following table provides the securities that could potentially dilute basic earnings per share in the future but were not included in the computation of diluted income per share as their inclusion would be anti-dilutive:

Note 18. Stock Compensation

In connection with our IPO, the Board adopted, and our shareholders approved, the Omnibus Equity Plan. Under the Omnibus Equity Plan, equity awards may be made in respect of 9,900,000 shares of our Common Stock and may be granted in the form of options, restricted stock, RSUs, stock appreciation rights, dividend equivalent rights, share awards, and performance-based awards (including performance share units and performance-based restricted stock).

Share-based compensation expense included in SG&A expenses totaled $15.5 million, $17.5 million and $14.6 million in December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, there was $11.3 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements. This cost is expected to be recognized over the remaining weighted-average vesting period of 1.4 years.

Stock Options – Generally, stock option awards vest ratably each year on the anniversary date over athree-year period, have an exercise term of 10 years, and any vested options must be exercised within 90 days of the employee leaving the Company. The compensation cost of option awards is charged to expense based upon the graded-vesting method over the vesting periods applicable to the option awards. The graded-vesting method provides for vesting of portions of the overall awards at interim dates and results in greater expense in earlier years than the straight-line method.

When options are granted, we calculate the fair value of common and Class B-1 Common Stock options using multiple Black-Scholes option valuation models. Expected volatilities are based upon a selection of public guideline companies. The risk-free rate was based upon U.S. Treasury rates.

Key assumptions used in the valuation models were as follows:

The following table represents stock option activity:

RSUs– RSUs are subject to the continued service of the recipient through the vesting date, which is generally from issuance. RSUs granted vest ratably each year on the anniversary date generally over athree-year period rather than at the end of thethree-year period. Once vested, the recipient will receiveone share of Common Stock for each RSU. The grant-date fair value per share used for RSUs was determined using the closing price of our Common Stock on the NYSE on the date of the grant. We apply this grant-date fair value per share to the total number of shares that we anticipate will fully vest and amortize the fair value to compensation expense over the vesting period using the straight-line method.

The following table represents RSU activity:

PSUs– PSUs are subject to continued employment of the recipient through the vesting date, which is on the third anniversary of the grant. Once vested, the recipient will receiveone share of Common Stock for each vested PSU.

For PSUs issued prior to 2021, the number of PSUs that vest is determined by a payout factor consisting of equally weighted performance measures of Adjusted EBITDA and Free Cash Flow, each as reported over the applicable three-year performance period and is adjusted based upon a market condition measured by our TSR over the applicable three-year performance period as compared to the TSR of the Russell 3000 index. For PSUs issued in 2021 and thereafter, the number of PSUs that vest is determined by a payout factor consisting of equally weighted pre-setthree-year performance targets on ROIC and TSR. The fair value of the award is estimated using a Monte Carlo simulation approach in a risk-neutral framework to model future stock price movements based on historical volatility, risk free rates of return, and correlation matrix.

The following table represents PSU activity for the awarded shares at target performance measures:

Note 19. Restructuring and Asset-Related Charges

We engage in restructuring activities focused on improving productivity and operating margins. Restructuring costs primarily relate to costs associated with workforce reductions, plant consolidations and closures, and changes to the management structure to align with our operations. Other restructuring associated costs primarily consist of equipment relocation and facility restoration costs. Asset-related charges consist of accelerated depreciation and amortization of assets due to changes in asset useful lives.

The following table summarizes the restructuring and asset-related charges for the periods indicated:

The following is a summary of the restructuring accruals recorded and charges incurred:

Restructuring accruals are expected to be paid within the next 12 months and are included within accrued expenses and other current liabilities in the consolidated balance sheet.

On April 11, 2024, we announced plans to closetwo manufacturing facilities, located in Vista, California and Hawkins, Wisconsin in a continuing effort to simplify our footprint and drive operational efficiencies. As of December 31, 2024, the remaining restructuring accrual for these plans is $0.8 million and the remaining cash outlay is expected to be $4.4 million. We expect to substantially complete the facility closures by the first quarter of 2025.

(1)The charges incurred in the year ended December 31, 2024, were included in restructuring and asset-related charges, net in the accompanying consolidated statement of operations.

(2)$4.1 million and $1.9 million of the product-related cash charges incurred in the year ended December 31, 2024, were detrimental to net sales and cost of sales, respectively, in the accompanying consolidated statement of operations.

(3)The inventory and other product-related non-cash charges in the year ended December 31, 2024, were included in cost of sales in the accompanying consolidated statement of operations.

(4)Total cash outlays includes $5.5 million of estimated cash payments related to debt repayment for financed equipment.

During 2023, we announced plans to transform our European operations by changing the operating structure, eliminating certain roles and rationalizing our manufacturing footprint. We plan to closetwo manufacturing facilities and transfer production to other facilities within Europe. During the year ended December 31, 2024, we announced additional plans, increasing the total estimated costs by approximately $3.3 million to $24.1 million, after identifying additional opportunities to optimize our European operating structure. As of December 31, 2024, the remaining restructuring accrual for these plans is $4.0 million and the remaining cash outlay is expected to be $5.3 million. We expect to substantially complete these initiatives by the end of 2025.

(1)The charges incurred in the years ended December 31, 2024 and 2023, were included in restructuring and asset-related charges in the accompanying consolidated statements of operations.

In the third quarter of 2024, we announced plans to closetwo additional manufacturing facilities in Europe as part of our footprint rationalization activities. As of December 31, 2024, the remaining restructuring accrual for these plans is $1.2 million and the remaining cash outlay is expected to be $8.6 million. We expect to substantially complete the facility closures by the end of 2026.

(1)The charges incurred in the year ended December 31, 2024, were included in restructuring and asset-related charges in the accompanying consolidated statement of operations.

In the third quarter of 2023, we announced plans to closetwo manufacturing facilities, located in Tijuana, Mexico and Vista, California as part of our footprint rationalization activities. As of December 31, 2024, the remaining restructuring accrual for these plans is $0.4 million and the remaining cash outlay is expected to be $0.5 million. We are substantially complete with the facility closures by the end of 2024.

(1)The charges incurred in the years ended December 31, 2024 and 2023, were included in restructuring and asset-related charges in the accompanying consolidated statements of operations.

(2)The inventory and other product-related non-cash charges incurred during 2023 were included in cost of sales in the consolidated statement of operations.

In the third quarter of 2024, we announced to employees a restructuring plan to close a manufacturing facility in Wedowee, Alabama in a continuing effort to simplify our footprint and drive operational efficiencies. As of December 31, 2024, the remaining restructuring accrual for this plan is $0.1 million and the remaining cash outlay is expected to be $0.4 million. We expect to substantially complete the facility closure by the first quarter of 2025.

(1)The charges incurred in the year ended December 31, 2024, were included in restructuring and asset-related charges in the accompanying consolidated statement of operations.

(2)The inventory and other product-related non-cash charges in the year ended December 31, 2024, were included in cost of sales in the accompanying consolidated statement of operations.

In the first quarter of 2023, we announced to employees a restructuring plan to close a manufacturing facility in Atlanta, Georgia. We completed the plant closure during 2023, with total pre-tax restructuring expenses and other closure costs of approximately $17.7 million, including $1.1 million of capital expenditures, and total cash outlays of approximately $12.9 million. The primary expenses incurred were accelerated depreciation and amortization, equipment relocation costs, and restructuring severance and employee-related charges.

Note 20. Held for Sale

During 2021, the Company ceased the appeal process for its litigation with Steves further described in Note 25 -Commitments and Contingencies. As a result, we are required to divest the Company’s Towanda, PA operations. As of December 31, 2024 and 2023, the assets and liabilities associated with the court-ordered divestiture of Towanda qualify as held for sale. Since the Company will continue manufacturing door skins for its internal needs, the court-ordered divestiture decision did not represent a strategic shift thereby precluding the court-ordered divestiture as qualifying as a discontinued operation.

The Company records net assets held for sale at the lower of the carrying value or fair value less costs to sell. Effective December 13, 2024, pursuant to an order issued by the United States District Court for the Eastern District of Virginia, Richmond Division, JWI entered into an Asset Purchase Agreement to sell JWI’s Towanda, Pennsylvania business and related assets for a purchase price of approximately $115 million, subject to certain adjustments and closing conditions.

Effective January 17, 2025, pursuant to an order issued by the United States District Court for the Eastern District of Virginia, Richmond Division, and the previously announced Asset Purchase Agreement dated October 11, 2024 and effective December 13, 2024, JWI completed the sale of its Towanda, Pennsylvania business. In connection with the Asset Purchase Agreement, the Company recognized a $31.4 million goodwill impairment charge.

As of December 31, 2024 and 2023, the assets and liabilities classified as held for sale are those of Towanda.

As of December 31, 2024 and 2023, the related assets and liabilities included within the summary below were expected to be disposed of within the next twelve months and are included in assets held for sale and liabilities held for sale in the accompanying consolidated balance sheets.

(1)The accounts receivable, net and accounts payable balances of Towanda will be assumed by the Purchaser upon closing per the Asset Purchase Agreement.

Note 21. Interest Expense, Net

Interest expense, net is net of capitalized interest and interest income. Capitalized interest incurred during the construction phase of significant property and equipment additions totaled $1.9 million, $1.1 million and $0.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. In the year ended December 31, 2024, we recognized increased interest income from interest income on temporary invested cash. We recognized interest income of $19.0 million and $5.8 million in the years ended December 31, 2023 and 2022, respectively, primarily from gains on our interest rate swap agreements reclassified to interest income. Refer to Note 23 -Derivative Financial Instruments for more information. Interest expense, net also includes amortization of debt issuance costs that are amortized using the effective interest method and amortization of original issue discounts.

Note 22. Other Income, Net

The table below summarizes the amounts included in other income, net in the accompanying consolidated statements of operations:

(1)Represents the refund of deposits for antidumping and countervailing duties on wood mouldings and millwork products purchased from China from 2020 to 2023.

(2)Governmental assistance for the year ended December 31, 2024, consisted primarily of a grant received by our North America business and energy subsidies received by our European businesses. Governmental assistance for the year ended December 31, 2023, consisted primarily of energy subsidies received by our European businesses. Governmental assistance for the year ended December 31, 2022, consisted primarily of cash received from government pandemic assistance programs in Europe and North America as a result of COVID-19. During the year ended December 31, 2022, we recognized $0.6 million of government pandemic assistance within our Europe segment.

(3)Represents an ERC from the U.S. government during the year ended December 31, 2023. The ERC is a refundable tax credit to partially refund qualified wages paid to employees that were unable to work during the years ended December 31, 2020 and 2021 due to COVID-related government restrictions.

(4)Represents a settlement loss associated with our U.S. defined benefit pension plan resulting from a one-time lump sum payment offered to pension plan participants. Refer to Note 26 - Employee Retirement and Pension Benefitsfor more information.

Note 23. Derivative Financial Instruments

Foreign currency derivatives not designated as hedges – As a multinational corporation, we are exposed to the impact of foreign currency fluctuations. To the extent borrowings, sales, purchases, or other transactions are not executed in the local currency of the operating unit, we are exposed to foreign currency risk. In most of the countries in which we operate, the exposure to foreign currency movements is limited because the operating revenues and expenses of our business units are substantially denominated in the local currency. To mitigate the exposure, we may enter into a variety of foreign currency derivative contracts. To manage the effect of exchange fluctuations on certain intercompany transactions and intercompany loans and interest that are denominated in foreign currencies, we have foreign currency derivative contracts with a total notional amount of $148.4 million as of December 31, 2024. We do not use derivative financial instruments for trading or speculative purposes. We record mark-to-market changes in the values of these derivatives in other income, net. We recorded mark-to-market gains of $0.5 million, losses of $2.7 million and gains of $1.1 million relating to foreign currency derivatives in the years ended December 31, 2024, 2023 and 2022, respectively.

Foreign currency derivatives designated as cash flow hedges – At the end of 2024 we implemented a hedging program to manage the potential changes in value associated with the amounts payable on raw material purchases that are denominated in foreign currencies to minimize the impact of the changes in foreign currencies. We have foreign currency derivative contracts, which qualify as cash flow hedges, with a total notional amount of $163.3 million. We record gains and losses for these contracts in AOCL to the extent that these hedges are effective and until we recognize the underlying transactions in net earnings, at which time we recognize these gains and losses in cost of sales on our consolidated statements of operations.

Net unrealized pre-tax gains/losses related to foreign currency derivative contracts, which qualify as cash flow hedges included in other comprehensive income (loss) were a $0.3 million gain for the year ended December 31, 2024. The unrealized amount in other comprehensive income (loss) will fluctuate based on changes in the fair value of open contracts during each reporting period.

As of December 31, 2024, approximately $0.3 million in gains is expected to be reclassified to earnings over the next 12 months.

Net investment hedges – On April 18, 2023, we entered into forward contracts to sell a total of AUD 420.0 million and receive USD at exchange rates ranging from 0.6751 USD to 0.6759 USD to 1.0 AUD to mitigate the impact of the AUD currency fluctuations on our net investment in JELD-WEN Australia Pty. Ltd. We designated the forward contracts as net investment hedges. The contracts matured during the quarter ended September 30, 2023, and the gain, net of forward points, was included in the gain on the sale of JW Australia. The net proceeds are included in the proceeds (payments) related to the sale of JW Australia within our consolidated statements of cash flows. No portion of these contracts were deemed ineffective during the year ended December 31, 2023.

Interest rate derivatives – We are exposed to interest rate risk in connection with our variable rate long-term debt. In May 2020, we entered into interest rate swap agreements with notional amounts aggregating to $370.0 million to manage this risk. The interest rate swap agreements matured in December 2023. Initially, the agreements had a weighted average fixed rate of 0.395% swapped against one-month USD LIBOR floored at 0.00%. In June 2023, we amended the agreements to replace LIBOR with a Term SOFR based rate. The amended agreements had a weighted average fixed rate of 0.317% swapped against one-month USD-SOFR CME Term floored at (0.10)%. All other terms and conditions were unchanged. We designated the interest rate swap agreements as cash flow hedges, and they effectively fixed the interest rate on a corresponding portion of the aggregate debt outstanding under our Term Loan Facility.

In February 2024, we entered into interest rate collar agreements with a cap rate of 4.50% paid against one-month USD-SOFR CME Term floored at 3.982% and 3.895% with outstanding notional amounts aggregating to $100.0 million corresponding to that amount of the debt outstanding under our Term Loan Facility. The interest rate collar agreements were designated as cash flow hedges of a portion of the interest obligations on our Term Loan Facility borrowings and are set to mature in February 2026.

No portion of these interest rate contracts were deemed ineffective during the year ended December 31, 2024. In other comprehensive income (loss), we recordedpre-tax mark-to-market gains of $0.4 million, $1.2 million and $17.9 million during the years ended December 31, 2024, 2023 and 2022, respectively. We reclassified gains of $0.5 million, $17.4 million and $5.0 million previously recorded in other comprehensive income (loss) to interest income during the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, a nominal loss is expected to be reclassified to interest income over the next 12 months.

Other derivative instruments – From time to time, we enter into other types of derivative instruments immaterial to the consolidated financial statements. Unless otherwise disclosed, these instruments are not designated as hedging instruments and mark-to-market adjustments are recorded in the statement of operations each period.

The fair values of derivative instruments held are as follows:

Note 24. Fair Value of Financial Instruments

We record financial assets and liabilities at fair value based on FASB guidance related to fair value measurements. The guidance requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Three levels of inputs may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Quoted market-based inputs or unobservable inputs that are corroborated by market data.

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

The recorded carrying amounts and fair values of these instruments were as follows:

(1)Certain pension assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. These include investments in large cap equity and commingled real estate funds, which are valued using the NAV provided by the administrator of the funds. Redemption of these funds is not subject to restriction.

Derivative assets and liabilities reported in level 2 primarily include: (1) as of December 31, 2024, foreign currency derivative contracts and interest rate collar agreements; (2) as of December 31, 2023, foreign currency derivative contracts. Refer to Note 23 -Derivative Financial Instruments for more information about our derivative assets and liabilities.

Deferred compensation plan assets reported in level 2 consist of mutual funds and corporate-owned life insurance.

There are no material non-financial assets or liabilities as of December 31, 2024 or December 31, 2023.

Note 25. Commitments and Contingencies

Litigation – We are involved in various legal proceedings, claims, and government audits arising in the ordinary course of business. We record our best estimate of a loss when the loss is considered probable, and the amount of such loss can be reasonably estimated. When a loss is probable and there is a range of estimated loss with no best estimate within the range, we record the minimum estimated liability related to the lawsuit or claim. As additional information becomes available, we reassess the potential liability and revise our accruals, if necessary. Because of uncertainties related to the resolution of lawsuits and claims, the ultimate outcome may differ materially from our estimates.

Other than the matters described below, there were no proceedings or litigation matters involving the Company or its property as of December 31, 2024 that we believe would have a material adverse effect on our consolidated financial position or cash flows, although they could have a material adverse effect on our operating results for a particular reporting period.

Steves & Sons, Inc. v JELD-WEN, Inc. – We sell molded door skins to certain customers pursuant to long-term contracts, and these customers in turn use the molded door skins to manufacture interior doors and compete directly against us in the marketplace. We gave notice of termination of one of these contracts and, on June 29, 2016, the counterparty to the agreement, Steves & Sons, Inc. (“Steves”) filed a claim against JWI in the U.S. District Court for the Eastern District of Virginia, Richmond Division (the “Eastern District of Virginia”). The complaint alleged that our acquisition of CMI, a competitor in the molded door skins market, together with subsequent price increases and other alleged acts and omissions, violated antitrust laws, and constituted a breach of contract and breach of warranty. Specifically, the complaint alleged that our acquisition of CMI substantially lessened competition in the molded door skins market. The complaint sought declaratory relief, ordinary and treble damages, and injunctive relief, including divestiture of certain assets acquired in the CMI acquisition.

In February 2018, a jury in the Eastern District of Virginia returned a verdict that was unfavorable to JWI with respect to Steves’ claims that our acquisition of CMI violated Section 7 of the Clayton Act, and found that JWI breached the supply agreement between the parties (the “Original Action”). The verdict awarded Steves $12.2 million for past damages under both the Clayton Act and breach of contract claims and $46.5 million in future lost profits under the Clayton Act claim.

During the course of the proceedings in the Eastern District of Virginia, we discovered certain facts that led us to conclude that Steves, its principals, and certain former employees of the Company had misappropriated Company trade secrets, violated the terms of various agreements between the Company and those parties, and violated other laws. On May 11, 2018, a jury in the Eastern District of Virginia returned a verdict on our trade secrets claims against Steves and awarded damages in the amount of $1.2 million. The presiding judge entered a judgment in our favor for those damages, and the entire amount has been paid by Steves. On August 16, 2019, the presiding judge granted Steves’ request for an injunction, prohibiting us from pursuing certain claims against individual defendants pending in Bexar County, Texas (the “Steves Texas Trade Secret Theft Action”). On September 11, 2019, JWI filed a notice of appeal of the Eastern District of Virginia’s injunction to the Fourth Circuit Court of Appeals (the “Fourth Circuit”).

On March 13, 2019, the presiding judge entered an Amended Final Judgment Order in the Original Action, awarding $36.5 million in past damages under the Clayton Act (representing a trebling of the jury’s verdict) and granted divestiture of certain assets acquired in the CMI acquisition, subject to appeal. The judgment also conditionally awarded damages in the event the judgment was overturned on appeal. Specifically, the court awarded $139.4 million as future antitrust damages in the event the divestiture order was overturned on appeal and $9.9 million as past contract damages in the event both the divestiture and antitrust claims were overturned on appeal.

On April 12, 2019, Steves filed a petition requesting an award of its fees and a bill of costs, seeking $28.4 million in attorneys’ fees and $1.7 million in costs in connection with the Original Action. On November 19, 2019, the presiding judge entered an order for further relief awarding Steves an additional $7.1 million in damages for pricing differences from the date of the underlying jury verdict through May 31, 2019 (the “Pricing Action”). We also appealed that ruling. On April 14, 2020, Steves filed a motion for further supplemental relief for pricing differences from the date of the prior order and going forward through the end of the parties’ current supply agreement (the “Future Pricing Action”). We opposed that request for further relief.

JWI filed a supersedeas bond and notice of appeal of the judgment, which was heard by the Fourth Circuit on May 29, 2020. On February 18, 2021, the Fourth Circuit issued its decision on appeal in the Original Action, affirming the Amended Final Judgment Order in part and vacating and remanding in part. The Fourth Circuit vacated the Eastern District of Virginia’s alternative $139.4 million lost-profits award, holding that award was premature because Steves has not suffered the purported injury on which its claim for future lost profits rests. The Fourth Circuit also vacated the Eastern District of Virginia’s judgment for Sam Steves, Edward Steves, and John Pierce on JWI’s trade secrets claims. The Fourth Circuit affirmed the Eastern District of Virginia’s finding of antitrust injury and its award of $36.5 million in past antitrust damages. It also affirmed the Eastern District of Virginia’s divestiture order, while clarifying that JWI retains the right to challenge the terms of any divestiture, including whether a sale to any particular buyer will serve the public interest, and made clear that the Eastern District of Virginia may need to revisit its divestiture order if the special master who has been appointed by the presiding judge cannot locate a satisfactory buyer. JWI then filed a motion for rehearing en banc with the Fourth Circuit that was denied on March 22, 2021.

On May 1, 2024, JWI filed a motion to modify the Amended Final Judgment (the “Motion”) with the Eastern District of Virginia to vacate all court orders requiring divestiture of the Company’s Towanda operations and certain related assets (“Towanda”) in light of changed industry and market factors and conditions. The court-mandated divestiture process continued while the court reviewed the Motion. On October 25, 2024, the Special Master submitted a Report and Recommendation to the court recommending that the court approve the divestiture of Towanda to Woodgrain Inc. (“Woodgrain”) for approximately $115 million, subject to customary closing adjustments. On November 14, 2024, JWI and Steves each filed certain objections to the Report and Recommendation. On December 13, 2024, the court adopted the Special Master’s Report and Recommendation, denying JWI’s Motion, overruling JWI’s objections, and sustaining in part and overruling in part Steves’ objections. The court-ordered divestiture closed on January 17, 2025.

During the pendency of the Original Action, on February 14, 2020, Steves filed a complaint and motion for preliminary injunction in the Eastern District of Virginia alleging that we breached the long-term supply agreement between the parties, including, among other claims, by incorrectly calculating the allocation of door skins owed to Steves (the “Allocation Action”). Steves sought an additional allotment of door skins and damages for violation of antitrust laws, tortious interference, and breach of contract. On April 10, 2020, the presiding judge granted Steves’ motion for preliminary injunction, and the parties settled the issues underlying the preliminary injunction on April 30, 2020, and the Company reserved the right to appeal the ruling in the Fourth Circuit. The Company believed all the claims lacked merit and moved to dismiss the antitrust and tortious interference claims.

On June 2, 2020, we entered into a settlement agreement with Steves to resolve the Pricing Action, the Future Pricing Action, and the Allocation Action. As a result of the settlement, Steves filed a notice of satisfaction of judgment in the Pricing Action, withdrew its Future Pricing Action with prejudice, and filed a stipulated dismissal with prejudice in the Allocation Action. The Company also withdrew its appeal of the Pricing Action. The parties agreed to bear their own respective attorneys’ fees and costs in these actions. In partial consideration of the settlement, JWI and Steves entered into an amended supply agreement satisfactory to both parties that, by its terms, ended on September 10, 2021. This settlement had no effect on the Original Action between the parties except to agree that certain specific terms of the Amended Final Judgment Order in the Original Action would apply to the amended supply agreement during the pendency of the appeal of the Original Action. On April 2, 2021, JWI and Steves filed a stipulation regarding the amended supply agreement in the Original Action, stating that regardless of whether the case remains on appeal as of September 10, 2021, and absent further order of the court, the amended supply agreement would be extended until the divestiture of Towanda is complete and Steves’ new supply agreement with the company that acquires Towanda is in effect.

We continue to believe the claims in the settled actions lacked merit and made no admission of liability in these matters.

On October 7, 2021, we entered into a settlement agreement with Steves to resolve the following: (i) Steves’ past and any future claims for attorneys’ fees, expenses, and costs in connection with the Original Action, except that Steves and JWI each reserved the right to seek attorneys’ fees arising out of any challenge of the divestiture process or the final divestiture order; (ii) the Steves Texas Trade Secret Theft Action and the related Fourth Circuit appeal of the Eastern District of Virginia’s injunction in the Original Action; (iii) the past damages award in the Original Action; and (iv) any and all claims and counterclaims, known or unknown, that were asserted or could have been asserted against each other from the beginning of time through the date of the settlement agreement. As a result of the settlement, the parties filed a stipulated notice of satisfaction of the past antitrust damages judgment and a stipulated notice of settlement of Steves’ claim for attorneys’ fees, expenses, and costs against JWI in the Original Action, and Steves filed a notice of withdrawal of its motion for attorneys’ fees and expenses and bill of costs in the Original Action. The Company also filed a notice of dismissal with prejudice and agreed to take no judgment in the Steves Texas Trade Secret Theft Action, and the parties filed a joint agreement for dismissal of the injunction appeal in the Fourth Circuit. On November 3, 2021, we paid $66.4 million to Steves under the settlement agreement.

In re JELD-WEN Holding, Inc. Derivative Litigation– On February 2, 2021, Jason Aldridge, on behalf of the Company, filed a derivative action in the U.S. District Court for the District of Delaware against certain current and former executives and directors of the Company, alleging that the individual defendants breached their fiduciary duties by allowing the wrongful acts alleged in the Steves and Cambridge actions, as well as violations of Section 14(a) and 20(a) of the Exchange Act, unjust enrichment, and waste of corporate assets among other allegations (the “Aldridge Action”). The lawsuit sought compensatory damages, equitable relief, and an award of attorneys’ fees and costs. The plaintiff filed an amended complaint on May 10, 2021.

On June 21, 2021, prior to a response from the Company in the Aldridge Action, Shieta Black and the Board of Trustees of the City of Miami General Employees’ & Sanitation Employees’ Retirement Trust, on behalf of the Company, filed a derivative action in the U.S. District Court for the District of Delaware against certain current and former executives and directors of the Company and Onex Corporation (“Onex”), alleging that the defendants breached their fiduciary duties by allowing the wrongful acts alleged in the Steves and Cambridge actions, as well as insider trading, and unjust enrichment among other allegations (the “Black Action”). The lawsuit sought compensatory damages, corporate governance reforms, restitution, equitable relief, and an award of attorneys’ fees and costs. The court granted the Black and Aldridge plaintiffs in motion to consolidate the lawsuits on July 16, 2021.

On June 20, 2022, the parties entered into a settlement agreement of the consolidated matters, which was approved by the Court on approval of the December 20, 2022, and the cases were dismissed with prejudice. In January 2023, the Company, as putative plaintiff, received approximately $10.5 million after attorneys’ fees and costs were deducted as part of the settlement.

Canadian Antitrust Litigation – On May 15, 2020, Développement Émeraude Inc., on behalf of itself and others similarly situated, filed a putative class action lawsuit against the Company and Masonite in the Superior Court of the Province of Quebec, Canada, which was served on us on September 18, 2020 (“the Quebec Action”). The putative class consists of any person in Canada who, since October 2012, purchased one or more interior molded doors from the Company or Masonite. The suit alleges an illegal conspiracy between the Company and Masonite to agree on prices, the distribution of market shares and/or the production levels of interior molded doors and that the plaintiffs suffered damages in that they were charged and paid higher prices for interior molded doors than they would have had to pay but for the alleged anti-competitive conduct. The plaintiffs are seeking compensatory and punitive damages, attorneys’ fees and costs. On September 9, 2020, Kate O’Leary Swinkels, on behalf of herself and others similarly situated, filed a putative class action against the Company and Masonite in the Federal Court of Canada, which was served on us on September 29, 2020 (the “Federal Court Action”). The Federal Court Action makes substantially similar allegations to the Quebec Action and the putative class is represented by the same counsel. In February 2021, the plaintiff in the Federal Court Action issued a proposed Amended Statement of Claim that replaced the named plaintiff, Kate O’Leary Swinkels, with David Regan. The plaintiff has sought a stay of the Quebec Action while the Federal Court Action proceeds. On July 14, 2023, the Company entered into an agreement in principle with class counsel to resolve both actions for an immaterial amount, which the Company recorded in the second quarter of 2023. A formal settlement agreement was executed as of March 27, 2024, and remains subject to court approval. The Company continues to believe the plaintiffs’ claims lack merit and denies any liability or wrongdoing for the claims made against the Company.

We have evaluated the claims against us and recorded provisions based on management’s judgment about the probable outcome of the litigation and have included our estimates in accrued expenses in the accompanying balance sheets. Refer to Note 10 -Accrued Expenses and Other Current Liabilitiesfor more information. While we expect a favorable resolution to these matters, the dispute resolution process could be lengthy, and if the plaintiffs were to prevail completely or substantially in the respective matters described above, such an outcome could have a material adverse effect on our operating results, consolidated financial position, or cash flows.

Self-Insured Risk – We self-insure substantially all our domestic business liability risks including general liability, product liability, warranty, personal injury, auto liability, workers’ compensation, and employee medical benefits. Excess insurance policies from independent insurance companies generally cover exposures between $5.0 million and $200.0 million for domestic product liability risk and exposures between $3.0 million and $200.0 million for auto, general liability, personal injury, and workers’ compensation. We estimate our provision for self-insured losses based upon an evaluation of current claim exposure and historical loss experience. Actual self-insurance losses may vary significantly from these estimates. At December 31, 2024 and 2023, our accrued liability for self-insured risks was $83.3 million and $89.2 million, respectively.

Indemnifications – At December 31, 2024, we had commitments related to certain representations made in contracts for sale of businesses or property, including the divestiture of JW Australia. Our indemnity obligations under the relevant agreements may be limited in terms of time, amount or scope. These representations primarily relate to past actions such as responsibility for transfer taxes if they should be claimed, and the adequacy of recorded liabilities, warranty matters, employment benefit plans, income tax matters, or environmental exposures. As it relates to certain income tax related liabilities, the relevant agreements may not provide any cap for such liabilities, and the period in which we would be liable would lapse upon expiration of the statute of limitation for assessment of the underlying taxes. Because of the conditional nature of these obligations and the unique facts and circumstances involved in each particular agreement, we are unable to reasonably estimate the potential maximum exposure associated with these items. We are not aware of any material amounts claimed or expected to be claimed under these indemnities.

From time to time and in limited geographic areas, we have entered into agreements for the sale of our products to certain customers that provide additional indemnifications for liabilities arising from construction or product defects. We cannot estimate the potential magnitude of such exposures, but to the extent specific liabilities have been identified related to product sales, liabilities have been provided in the warranty accrual in the accompanying consolidated balance sheets.

Other Financing Arrangements – At times we are required to provide letters of credit, surety bonds, or guarantees to meet various performance, legal, warranty, environmental, workers compensation, licensing, utility, and governmental requirements. Stand-by letters of credit are provided to certain customers and counterparties in the ordinary course of business as credit support for contractual performance guarantees, advanced payments received from customers, and future funding commitments. The stated values of these letters of credit agreements, surety bonds, and guarantees were $70.3 million and $68.7 million at December 31, 2024 and 2023, respectively.

Environmental Contingencies – We periodically incur environmental liabilities associated with remediating our current and former manufacturing sites as well as penalties for not complying with environmental rules and regulations. We record a liability for remediation costs when it is probable that we will be responsible for such costs and the costs can be reasonably estimated. These environmental liabilities are estimated based on current available facts and current laws and regulations. Accordingly, it is likely that adjustments to the estimated liabilities will be necessary as additional information becomes available. Short-term environmental liabilities and settlements are recorded inaccrued expenses and other current liabilities in the accompanying consolidated balance sheets and totaled $0.1 million and $0.5 million at December 31, 2024 and 2023, respectively. Long-term environmental liabilities are recorded indeferred credits and other liabilities in the accompanying consolidated balance sheets and totaled $11.8 million and $11.5 million at December 31, 2024 and 2023, respectively.

Everett, Washington WADOE Action– In 2007, we were identified by the WADOE as a PLP with respect to our former manufacturing site in Everett, Washington. In 2008, we entered into an Agreed Order with the WADOE to assess historic environmental contamination and remediation feasibility at the site. As part of the order, we agreed to develop a CAP, arising from the feasibility assessment. In December 2020, we submitted to the WADOE a draft feasibility assessment with an array of remedial alternatives, which we considered substantially complete. During 2021, several comment rounds were completed as well as the identification of the Port of Everett and W&W Everett Investment LLC as additional PLPs, with respect to this matter with each PLP being jointly and severally liable for the cleanup costs. The WADOE received the final feasibility assessment on December 31, 2021, containing various remedial alternatives with its preferred remedial alternatives totaling $23.4 million. Based on this study, we determined our range of possible outcomes to be $11.8 million to $33.4 million. On March 1, 2022, we delivered a draft CAP consistent with the preferred alternatives which was approved by WADOE in August 2023. The existing Agreed Order of 2008 was also modified with WADOE in July 2023 to support the development of the associated CAP investigation, sampling and design components. With additional information gathered from the CAP investigation during 2024, we determined the total range of possible remediation cost outcomes to be between $17.4 million to $33.6 million. We retained a provision of $11.8 million within our financial statements which considers the range of possible outcome costs and potential allocation of the responsibility between the identified PLPs, both of which could vary materially from our estimates.

Towanda, Pennsylvania Consent Order– In December 2020, we entered into a COA with the PaDEP to remove a pile of wood fiber waste from our site in Towanda, Pennsylvania, which we acquired in connection with our acquisition of CMI in 2012, by using it as fuel for a boiler at that site. The COA replaced a 2018 Consent Decree between the Company and PaDEP. Under the COA, we are required to achieve certain periodic removal objectives and ultimately remove the entire pile by August 31, 2025. As of each of December 31, 2024 and December 31, 2023, there was $1.4 million in bonds posted in connection with these obligations. Failure to remove the pile by August 31, 2025, would have resulted in forfeiture of the bonds and penalties by PaDEP. During December 2024, we removed the wood fiber waste pile from the site and our removal obligations under the COA closed.

Purchase Obligations - As of December 31, 2024, we have purchase obligations of $73.2 million due in 2025 and $42.2 million due in 2026 and thereafter. These purchase obligations are primarily relating to software hosting services and equipment purchase agreements. Purchase obligations are defined as purchase agreements that are enforceable and legally binding and that specify all significant terms, including quantity, price, and the approximate timing of the transaction.

Note 26. Employee Retirement and Pension Benefits

U.S. Defined Benefit Pension Plan

Certain U.S. hourly employees participate in our defined benefit pension plan. The plan is not open to new employees.

In 2020, we elected to utilize the alternative method when calculating the Pension Benefit Guarantee Corporation premiums for 2020 and the succeeding four years. We use a spot rate yield curve to estimate the pension benefit obligation and net periodic benefits costs.

During the fourth quarter of 2023, we completed a balance sheet risk mitigation action related to the U.S. defined benefit pension plan by offering a one-time lump sum election option to terminated vested participants and active participants over the age of 59 1/2. As a result of lump sum elections made by participants, we settled $49.5 million of future obligations and recognized a pre-tax pension settlement charge of $4.3 million in the fourth quarter of 2023. The settlement charge, primarily comprised of the recognition of past actuarial losses, is recorded within other income, net in the consolidated statements of operations.

The components of net periodic benefit cost are summarized as follows:

In October 2019, the Society of Actuaries released the PRI-2012 Mortality Tables (update to RP-2014 mortality tables), which were adopted in 2019 and represent our best estimate of future experience for the base mortality table. The Society of Actuaries has released annual updates to the mortality improvement projection scale that was first released in 2014, with the most recent annual update being Scale MP-2020. We adopted the use of Scale MP-2020 as of December 31, 2020, as it represents our best estimate of future mortality improvement projection experience as of the measurement dates.

We developed the discount rate based on the plan’s expected benefit payments using the WTW RATE: Link 10:90 Yield Curve. Based on this analysis, we selected a 5.57% discount rate for our projected benefit obligation.

We maintain policies for investment of pension plan assets. The policies set forth stated objectives and a structure for managing assets, which includes various asset classes and investment management styles that, in the aggregate, are expected to produce a sufficient level of diversification and investment return over time and provide for the availability of funds for benefits as they become due. The policies also provide guidelines for each investment portfolio that control the level of risk assumed in the portfolio and ensure that assets are managed in accordance with stated objectives. The plan invests primarily in publicly traded equity and debt securities as directed by the plan’s investment managers. The target asset allocation is determined by reference to the plan’s funded status percentage. The target allocation of plan assets was 76.0% fixed income securities,17.7% equity securities and 6.3% other investments, as of December 31, 2024 and 2023. The pension plan’s expected return assumption is based on the weighted average aggregate long-term expected returns of various actively managed asset classes corresponding to the plan’s asset allocation. We have selected an expected return on plan assets based on a historical analysis of rates of return, our investment mix, market conditions and other factors.

The plan’s projected benefit obligation is determined by using weighted-average assumptions, as summarized below:

As of December 31, 2024, the plan’s estimated benefit payments for the next ten years are as follows (amounts in thousands):

The Company made no cash contributions to the plan for the years ended December 31, 2024 and 2023. During fiscal year 2025, no cash contributions are required to be made to the plan.

The plan’s accumulated benefit obligation of $261.5 million is determined by taking the projected benefit obligation and removing the impact of the assumed compensation increases.

The plan’s funded status is as follows:

(1)The overfunded pension liability as of December 31, 2024, is recorded in long-term other assets in the accompanying consolidated balance sheet.

Net actuarial pension losses are recorded in consolidated other comprehensive income (loss) are as follows:

Non-U.S. Defined Benefit Plans – We have several unfunded defined benefit plans located outside the U.S. that are country specific. Some of these plans remain open to participants and others are closed. The expenses related to these plans are recorded in the consolidated statements of operations and are determined by using weighted-average assumptions made on January 1 of each year as summarized below:

The projected benefit obligation for the non-U.S. plans is determined by using weighted-average assumptions as summarized below:

As of December 31, 2024, the estimated benefit payments for the non-U.S. plans over the next ten years are as follows:

The accumulated benefit obligations of $23.1 million for the non-U.S. plans are determined by taking the projected benefit obligation and removing the impact of the assumed compensation increases. We expect to contribute $1.4 million to the non-U.S. plans in 2025.

The funded status of these plans are as follows:

The current portion of the unfunded pension liability is recorded in accrued payroll and benefits in the accompanying consolidated balance sheets.

Net actuarial pension losses are recorded in consolidated other comprehensive income (loss) are as follows:

Defined Contribution Benefit Plans – We have defined contribution benefit plans covering certain U.S. and non-U.S. subsidiary employees, subject to eligibility requirements established in accordance with local statutory requirements. The total cost of these plans was $36.6 million, $36.4 million and $39.0 million in the years ended December 31, 2024, 2023 and 2022, respectively.

Note 27. Supplemental Cash Flow Information