BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended | ||||||||||||
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Mar. 31, 2026 | |||||||||||||
| Accounting Policies [Abstract] | |||||||||||||
| General |
Unless the context requires otherwise, the terms “Owens Corning,” “Company,” “we” and “our” in these notes refer to Owens Corning and its subsidiaries. The Consolidated Financial Statements included in this report are unaudited, pursuant to certain rules and regulations of the Securities and Exchange Commission (“SEC”), and include, in the opinion of the Company, normal recurring adjustments necessary for a fair statement of the results for the periods indicated, which, however, are not necessarily indicative of results which may be expected for the full year. The December 31, 2025 balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (“U.S.”). In connection with the Consolidated Financial Statements and Notes included in this report, reference is made to the Consolidated Financial Statements and Notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). Certain prior year amounts have been reclassified in order to conform to the current year presentation. On February 14, 2025, the Company announced the sale of its glass reinforcements ("GR") business. The transaction represented a strategic shift that has a major effect on the Company's operations and financial results and therefore, beginning with the quarterly report on Form 10-Q for the period ended March 31, 2025, and including this quarterly report on Form 10-Q for the period ended March 31, 2026, the GR financial results are reflected in the Company’s consolidated financial statements as discontinued operations for all periods presented. Unless otherwise specified, these notes to the Consolidated Financial Statements reflect continuing operations. The Consolidated Statements of Cash Flows present cash flows from both continuing and discontinued operations. Please refer to Note 2 of the Consolidated Financial Statements for further information. Revenue Recognition As of March 31, 2026, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled $133 million. As of December 31, 2025, our contract liability balances totaled $133 million, of which $17 million was recognized as revenue in the three months ended March 31, 2026. As of December 31, 2024, our contract liability balances (for extended warranties, down payments and deposits, collectively) totaled $118 million, of which $12 million was recognized as revenue in the three months ended March 31, 2025. Cash, Cash Equivalents and Restricted Cash The Company defines cash and cash equivalents as cash and time deposits with maturities of three months or less when purchased. Restricted cash primarily represents amounts received from a counterparty related to its performance assurance on an executory contract, and is included in Other current assets on the Consolidated Balance Sheets. These amounts are contractually required to be set aside, and the counterparty can exchange the cash for another form of performance assurance at its discretion. Please refer to Note 16 for additional disclosures related to Supplemental Cash Flow Information. Accounts Receivable Our customers consist mainly of distributors, home centers, contractors and retailers. Two of our largest customers accounted for approximately 20% and 16%, respectively, of accounts receivable as of March 31, 2026. Supplier Finance Programs We review supplier terms and conditions on an ongoing basis, and have negotiated payment terms extensions in recent years in connection with our efforts to reduce working capital and improve cash flow. Separate from those terms extension actions, certain of our subsidiaries have entered into paying agency agreements with third-party administrators. These voluntary supply chain finance programs (collectively, the “Programs”) generally give participating suppliers the ability to sell, or otherwise pledge as collateral, their receivables from the Company to the participating financial institutions, at the sole discretion of both the suppliers and financial institutions. The Company is not a party to the arrangements between the suppliers and the financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to sell, or otherwise pledge as collateral, amounts under these arrangements. The Company's payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. One of our Programs includes a parent guarantee to the participating financial institution for a certain U.S. subsidiary that, at the time of the respective program’s inception in 2015, was a guarantor subsidiary of the Company’s credit agreement. The obligations are presented as Accounts payable within Total current liabilities on the Consolidated Balance Sheets and all activity related to the obligations is presented within operating activities on the Consolidated Statements of Cash Flow. The Company’s confirmed outstanding obligations under the Programs totaled $168 million and $196 million as of March 31, 2026 and December 31, 2025, respectively. The amounts of invoices paid under the Programs totaled $155 million and $152 million for the three months ended March 31, 2026 and March 31, 2025, respectively. Pension and Other Postretirement Benefits The Company sponsors defined benefit pension plans. Under the plans, pension benefits are based on an employees’ 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. The Company maintains healthcare and life insurance benefit plans for certain retired employees and their dependents. The health care plans in the United States are non-funded and pay either (1) stated percentages of covered medically necessary expenses, after subtracting payments by Medicare or other providers and after stated deductibles have been met, or (2) fixed amounts of medical expense reimbursement. Accounting for pensions and other postretirement benefits involves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works. To accomplish this, extensive use is made of assumptions about investment returns, discount rates, inflation, mortality, turnover and medical costs. Derivative Financial Instruments The Company is exposed to commodity price, foreign currency exchange rate, and interest rate risks in the normal course of business. The Company’s risk management program uses derivative financial instruments to manage a portion of the volatility associated with these exposures and does not enter into derivatives for trading purposes. Derivatives designated as cash flow hedges are assessed for effectiveness quarterly. Changes in the fair value of effective cash flow hedges are recorded in Accumulated other comprehensive deficit (“AOCI”) and reclassified into Cost of sales on the Consolidated Statements of Earnings in order to mirror the location of the hedged items impacting earnings. Cash settlements related to commodity cash flow hedges are included in Operating activities in the Consolidated Statements of Cash Flows. The Company uses foreign exchange forward contracts to manage foreign currency risk associated with certain monetary assets and liabilities recorded on the Consolidated Balance Sheets. Gains and losses from the changes in the fair value of these instruments are recorded in Other (income) expense, net on the Consolidated Statements of Earnings, and are substantially offset by remeasurement impacts on the related foreign currency denominated balances. As of March 31, 2026, the Company had total notional amounts of $176 million for non-designated derivative financial instruments related to foreign currency exposures in U.S. Dollars primarily related to the Mexican Peso, Indian Rupee, Chinese Yuan, Hong Kong Dollar, South Korean Won, Brazilian Real, Chilean Peso and the Japanese Yen. In addition, the Company had notional amounts of $142 million for non-designated derivative financial instruments related to foreign currency exposures in European Euro primarily related to the Polish Złoty, Danish Krone and the Norwegian Krone. In 2020, the Company entered into a $175 million forward U.S. Treasury rate lock agreement to manage the U.S. Treasury portion of its interest rate risk associated with anticipated debt issuance. The agreement was designated as a cash flow hedge and was settled in December 2022. Upon settlement, the Company received cash proceeds of $37 million, of which $31 million was deferred into AOCI and is being amortized to interest expense over the term of the Company's 5.700% senior notes due 2034. During the three months ended March 31, 2026, less than $1 million was recognized in interest expense related to amortization. As of March 31, 2026, $26 million of unrecognized gains related to the rate lock agreement remained in AOCI. There have been no significant changes in the Company's objectives, strategies, or derivative programs since December 31, 2025. For a complete discussion of the Company's derivative instruments and hedging activities, see Note 5 of the Consolidated Financial Statements within our 2025 Form 10-K. Related Party Transactions In the first quarter of 2021, a related party relationship was established as a result of a former member of the Company’s Board of Directors being named an executive officer of one of the Company’s preexisting suppliers. The related party transactions with this supplier consist of the purchase of raw materials. Purchases from the related party supplier were $17 million and $25 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and December 31, 2025, amounts due to the related party supplier were $6 million and $2 million, respectively. Accounting Pronouncements New Pronouncements Adopted In July 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Updates (“ASU”) 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets," which provides entities with a practical expedient when estimating expected credit losses for current accounts receivable and contract assets arising from transactions accounted for under ASC 606. The guidance is effective January 1, 2026. We have adopted and determined that this guidance did not have a material effect on our Consolidated Financial Statements. New Pronouncements Issued In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements," which improves the navigability and clarity of the interim reporting guidance. The guidance is effective January 1, 2028. We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statement disclosures. We do not believe the adoption of this guidance will have a material effect on our results of operations. In December 2025, the FASB issued ASU 2025-10, "Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities," which establishes recognition, measurement, and presentation guidance for government grants received by business entities. The guidance is effective January 1, 2029. We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statement disclosures. We do not believe the adoption of this guidance will have a material effect on our results of operations. In November 2025, the FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815): Hedge Accounting Improvements," which enhances hedge accounting by aligning financial reporting more closely with actual economic risk management and introduces certain targeted refinements. The guidance is effective January 1, 2027. We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statement disclosures. We do not believe the adoption of this guidance will have a material effect on our results of operations. In September 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software," which includes targeted improvements to recognition guidance for capitalizing software costs, replacing the previous stage-based model with a principles-based framework. The guidance is effective January 1, 2028. We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statement disclosures. We do not believe the adoption of this guidance will have a material effect on our results of operations. In November 2024, the FASB issued ASU 2024‑03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220‑40)," which requires enhanced expense‑category disclosures in the notes to the financial statements. In November 2024, the FASB issued ASU 2025‑01, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)," which clarifies the effective date of ASU 2024‑03. The guidance is effective January 1, 2027 for the Company, with interim adoption beginning in 2028. The Company is currently assessing the impact adoption of this standard will have on its consolidated financial statement disclosures and does not believe adoption will have a material effect on its results of operations. In October 2023, the FASB issued ASU 2023-06, "Disclosure Improvements," which modifies the disclosure or presentation requirements for a variety of Topics. The effective date for each topic is contingent on future SEC rule setting. We are currently assessing the impact adopting this standard will have on our Consolidated Financial Statement disclosures. We do not believe the adoption of this guidance will have a material effect on our results of operations.
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