Q4 2023 Owens Corning Earnings Call

Hello, everyone and welcome to the Owens Corning Q4, and full year 2023 earnings coal mine.

Sam: My name is Sam and I will be the operator for your call today.

Operator: If you would like to ask a question on today's call, you can do so by pressing star 1 on your telephone keypad. I will now hand the floor over to Amber Woolfoss to begin the call. Please go ahead. Good morning. Thank you for taking the time to join us for today's conference call and review of our business results for the fourth quarter and full year 2023. Joining us today are Brian Chambers, Owens Corning's Chairman and Chief Executive Officer, and Todd Pfister, our Chief Financial Officer. Following our presentation this morning, we will open this one-hour call to your questions.

Sam: If you would like to ask a question on today's call you can do safe by pressing star one on your telephone keypad.

Sam: I will now hand, the floor over to <unk> to begin Nicole. Please go ahead.

Nicole: Good morning, Thank you for taking the time to join US for today's conference call and review of our business results for the fourth quarter and full year 2023.

Nicole: Joining us today are Brian Chambers, Owens, Corning's, Chairman and Chief Executive Officer, and Todd Fister, Our Chief Financial Officer.

Nicole: Following our presentation. This morning, we will open this one hour call to your questions in order to accommodate as many call participants as possible. Please limit yourself to one question only.

Operator: In order to accommodate as many call participants as possible, please limit yourselves to one question only. Earlier this morning, we issued a news release and filed a 10-K that detailed our financial results for the fourth quarter and full year 2023. For the purposes of our discussion today, we have prepared presentation slides summarizing our performance and results and will refer to these slides during this call. You can access the earnings press release, Form 10-K, and the presentation slides at our website, owenscorning.com. Please refer to the Investors link under the corporate section of our homepage. A transcript and recording of this call, as well as the supporting slides, will be available on our website for future reference. Please refer to slide 2, where we offer a couple of reminders. First, today's remarks will include forward-looking statements that are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially. We undertake no obligation to update these statements beyond what is required under applicable securities laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail.

Nicole: Earlier. This morning, we issued a news release and filed a 10-K that detailed our financial results for the fourth quarter and full year 2023.

Nicole: For the purposes of our discussion today, we've prepared presentation slides summarizing our performance and results and we'll refer to these slides during this call.

Nicole: You can access the earnings press release Form 10-K, and the presentation slides at our website Owens Corning Dot com refer to the investors link under the corporate section of our homepage, a transcript and recording of this call and the supporting slides will be available on our website for future reference.

Nicole: Please reference slide two where we offer a couple of reminders first today's remarks will include forward looking statements that are subject to risks uncertainties and other factors that could cause our actual results to differ materially.

Nicole: We undertake no obligation to update these statements beyond what is required under applicable securities laws.

Nicole: Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail.

Operator: Second, the presentation slides in today's remarks contain non-GAAP financial measures. Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation, available on the investor section of our website, owenscorning.com. For those of you following along with our slide presentation, we will begin on slide four. And now, opening remarks from our chair and CEO, Brian Chambers.

Nicole: Second the presentation slides in today's remarks contain non-GAAP financial measures.

Nicole: Explanations and reconciliations of non-GAAP to GAAP measures, maybe found in our earnings press release and presentation available on the investors section of our website Owens Corning Dot com for.

For those of you following along with our slide presentation. We will begin on slide four and now opening remarks from our chair and CEO, Brian Chambers, Brian.

Brian D. Chambers: Thanks timber good morning, everyone and thank you for joining us today.

Brian D. Chambers: Thanks, Amber. Good morning, everyone, and thank you for joining us today. During our call this morning, I'll begin with an overview of our results for the quarter and full year, including some of the key drivers of our high performance. Owens Corning delivered outstanding results in 2023. Our performance demonstrated the strength of our team, the value of our products, and the impact of our enterprise strategy to increase the earnings power of our company in dynamic markets. Through our disciplined commercial and operational execution, we mitigated slowing demand in some segments amid higher interest rates and ongoing macro headwinds to deliver on our financial targets. I'll begin, as always, with a critical component to our success: safety.

Brian D. Chambers: Our call. This morning, I'll begin with an overview of our results for the quarter and full year, including some of the key drivers of our high performance.

Brian D. Chambers: Next I'll provide some additional comments on the two transformative moves we announced last week to significantly reshape the company and sharpen our focus on building and construction materials.

Todd will then provide more details on our fourth quarter and full year 2023 performance and I'll come back to discuss what we're seeing in our markets and our outlook for the first quarter.

Brian D. Chambers: Owens Corning delivered outstanding results in 2023.

Brian D. Chambers: Our performance demonstrated the strength of our team the value of our products and the impact of our enterprise strategy to increase the earnings power of our company and dynamic markets.

Brian D. Chambers: Through our disciplined commercial and operational execution, we mitigated slowing demand in some segments amid higher interest rates and ongoing macro headwinds to deliver on our financial targets.

Brian D. Chambers: I'll begin as always with a critical component to our success safety.

Brian D. Chambers: We will continue to deliver world-class safety performance in 2023. During the fourth quarter, we achieved a recordable incident rate of 0.4, which was our best quarterly performance in over a decade. Turning to our financial results, we finished the year strong with fourth-quarter revenues up slightly and EBIT and EBITDA margins expanding year over year. For the full year, we delivered outstanding financial performance with revenues of $9.7 billion, adjusted EBIT of $1.8 billion, and adjusted EBITDA of $2.3 billion. Despite slightly lower revenue versus the prior year, we were able to expand our adjusted EBIT margins to 19% and increase our adjusted EBITDA margins to 24%, demonstrating the value of our products and improvements in our operating efficiency. In addition, we maintained our focus on working capital and commitment to shareholder returns, generating significant free cash flow and returning 68% to investors through dividends and share repurchase.

Brian D. Chambers: We continue to deliver world class safety performance in 2023.

Brian D. Chambers: During the fourth quarter, we achieved a recordable incident rate of <unk>, four which was our best quarterly performance in over a decade.

Brian D. Chambers: Our full year 2023, our IR rate was <unk>, six which is top quartile performance for the U S manufacturing sector.

Brian D. Chambers: Turning to our financial results. We finished the year strong with fourth quarter revenues up slightly and EBIT and EBITDA margins expanded year over year.

Brian D. Chambers: For the full year, we delivered outstanding financial performance with revenues of $9 7 billion adjusted EBIT of $1 8 billion and adjusted EBITDA of $2 3 billion.

Brian D. Chambers: Despite slightly lower revenue versus prior year, we were able to expand our adjusted EBIT margins to 19% and increase our adjusted EBITDA margins to 24% demonstrating the value of our products and improvements in our operating efficiencies.

Brian D. Chambers: In addition, we maintained our focus on working capital and commitment to shareholder returns generating significant free cash flow and returning 68% to investors through dividends and share repurchases.

Brian D. Chambers: In December the company continued its streak of increasing our quarterly cash dividend, reflecting our continued confidence in strengthening the earnings power of the company and commitment to delivering long term shareholder value.

Brian D. Chambers: Through our strategic choices and strong execution of key operating initiatives, we are positioning Owens Corning for long-term success. For the past couple of years, we have been consistently deploying capital against our three strategic priorities, to strengthen our position in core products and markets, to expand our new product adjacencies that leverage our unique material science, market, and manufacturing expertise, and to develop more multi-material and prefabricated construction solutions. The execution of this strategy has led to higher operating margins and cash flows, increased innovation, stronger customer partnerships, and a more focused company. Last week, we announced both the acquisition of Masonite and the strategic review of our glass reinforcements business, representing significant steps forward in strengthening our position in building and construction materials and expanding our portfolio of branded residential products.

Brian D. Chambers: Through our strategic choices and strong execution of key operating initiatives, we are positioning to Owens Corning for long term success over.

Brian D. Chambers: Over the past couple of years, we've been consistently deploying capital against our three strategic priorities.

Brian D. Chambers: To strengthen our position in core products and markets to expand into new product adjacencies that leverage our unique material science market and manufacturing expertise and to develop more multi material and prefabricated construction solutions.

Brian D. Chambers: The execution of this strategy has led to higher operating margins and cash flows increased innovation stronger customer partnerships any more focused company.

Brian D. Chambers: Last week, we announced both the acquisition of Masonite and the strategic review of our glass reinforcements business.

Representing significant steps forward in strengthening our position in building and construction materials and expanding our portfolio of branded residential products.

Brian D. Chambers: We are very excited about entering the residential doors category with the acquisition of a market leader in this space.

Brian D. Chambers: We are very excited about entering the residential doors category with the acquisition of a market leader in this space. This creates a scalable new growth platform for our company and enhances our financial profile by growing revenue and earnings, lowering our ongoing capital intensity, and increasing our free cashflow generation. The DOORS segment provides a great opportunity to leverage our unique commercial, operational, and innovation capabilities to build out another market-leading residential building product, similar to what we've been able to accomplish in our roofing and insulation business, with a customer base we know well and work with today.

Brian D. Chambers: The addition of Masonite expands our leadership position in residential building products in a category that complements our current interior and exterior offering.

Brian D. Chambers: Creates a scalable new growth platform for our company and enhances our financial profile by growing revenue and earnings lowering our ongoing capital intensity and increasing our free cash flow generation.

Brian D. Chambers: The door segment provides a great opportunity to leverage our unique commercial operational and innovation capabilities to build out another market, leading residential building products business similar to what we've been able to accomplish in our roofing and insulation businesses with a customer base, we know well and worked with today.

Brian D. Chambers: We've built a strong operating model within Owens Corning, focused on creating value for our customers, driving continuous improvement in our operations, and developing sustainable solutions through material innovation, which has taken each of our businesses and made them significantly better. We intend to utilize this proven model as we enter the doors and door systems category, accelerating Masonite's doors that do more strategy to expand their current base of business and enhance their operating performance. We also announced a review of strategic alternatives for our glass reinforcements business.

Brian D. Chambers: We have built a strong operating model within Owens Corning focused on creating value for our customers driving continuous improvement in our operations and developing sustainable solutions through material innovation.

Brian D. Chambers: Which has taken each of our businesses and made them significantly better.

Brian D. Chambers: We intend to utilize this proven model as we entered the doors and door systems category accelerating masonite doors that do more strategy to expand our current base of business and enhanced our operating performance.

Brian D. Chambers: We also announced a review of strategic alternatives for our glass reinforcements business.

Brian D. Chambers: Like our decision to acquire Masonite, this is a choice consistent with our disciplined capital allocation approach and best owner operating philosophy. We believe each of these transformational moves will create a company that generates higher, more consistent margins and stronger free cash flows, while better positioning us for long-term growth. Before turning it over to Todd, I'd like to provide a brief update on two key differentiators for our company: innovation and sustainability. To strengthen our market leadership, we continue to invest in new product and process innovation in our core product platforms to generate additional growth. This included the launch of 39 new or refreshed products in 2023.

Brian D. Chambers: Like our decision to acquire Masonite. This is a choice consistent with our disciplined capital allocation approach and best owner operating philosophy.

Brian D. Chambers: We believe each of these transformational moves will create a company that generates higher more consistent margins and stronger free cash flows while better positioning us for long term growth.

Brian D. Chambers: Before turning it over to Todd I would like to provide a brief update on two key differentiators for our company innovation and sustainability.

Brian D. Chambers: To strengthen our market leadership, we continue to invest in new product and process innovation in our core product platforms to generate additional growth.

Brian D. Chambers: This included the launch of 39, new or refreshed products in 2023.

Brian D. Chambers: These innovations focused on increasing the performance and durability of our product offerings, which brings additional value to our customers to help them win and grow in the market. Sustainability, which is core to who we are and how we operate, is another key performance driver for our company, and our work continues to be recognized by the market and differentiate us as a company. In December, we earned a place on the Dow Jones Sustainability World Index for the 14th consecutive year.

Brian D. Chambers: These innovations focused on increasing the performance and durability of our product offerings, which brings additional value to our customers to help them win and grow in the market.

Brian D. Chambers: Sustainability, which is core to who we are and how we operate is another key performance driver for our company and our work continues to be recognized by the market and differentiate us as a company.

Brian D. Chambers: In December we earned a place on the Dow Jones sustainability World Index for the 14th consecutive year.

Brian D. Chambers: Next month, Owens Corning plans to issue its 18th annual sustainability report, which will highlight progress toward our 2030 Sustainability Goals and further demonstrate our commitment to building a sustainable future through material innovation. Following our strong results in 2021 and 2022, our performance in 2023 once again demonstrated that our agility, consistent execution, and commitment to our customers can drive outstanding performance through a variety of market conditions. We believe the actions we are taking to further strengthen our market positions, create new growth opportunities, and reshape Owens Corning to a more focused building products company will accelerate our financial performance in 2024 and beyond. With that, I will now turn it over to Todd to discuss our financial results in more detail. Okay, Todd?

Brian D. Chambers: And next month Owens Corning plans to issue its 18th annual sustainability report.

Brian D. Chambers: Well highlight progress toward our 2030 sustainability goals and further demonstrate our commitment to building a sustainable future through material innovation.

Brian D. Chambers: Following our strong results in 2021 and 2022, our performance in 2023, once again demonstrated that our agility consistent execution and commitment to our customers can drive outstanding performance through a variety of market conditions.

Brian D. Chambers: We believe the actions we are taking to further strengthen our market positions create new growth opportunities and reshape Owens Corning to a more focused building products company will accelerate our financial performance in 2024 and beyond.

Brian D. Chambers: With that I will now turn it over to Todd to discuss our financial results in more detail Todd.

Todd Fister: Thank you, Brian and good morning, everyone.

Todd Pfister: Thank you, Brian, and good morning, everyone. As Brian mentioned, we finished the year strong with our performance in the fourth quarter, which contributed to our outstanding results in 2023. Throughout the year, we remain disciplined in our commercial, operational, and capital allocation execution. We delivered another strong quarter with adjusted EBIT of $392 million, which was 18% ahead of the same quarter last year. Adjusted EBITDA was $518 million, with adjusted EBIT margins of 17% and adjusted EBITDA margins of 22%. Adjusted earnings for the fourth quarter were $287 million, or $3.21 per diluted share, compared with $235 million, or $2.49 per diluted share, in the same quarter last year.

Todd Fister: As Brian mentioned, we finished the year strong with our performance in the fourth quarter, which contributed to our outstanding results in 2023.

Todd Fister: Throughout the year, we remain disciplined in our commercial operational and capital allocation execution.

Todd Fister: I would now like to turn to slide five to discuss the results for the fourth quarter and full year.

Todd Fister: We delivered another strong quarter with adjusted EBIT of $392 million, which was 18% ahead of the same quarter last year.

Todd Fister: Adjusted EBITDA was $518 million with adjusted EBIT margins of 17% and adjusted EBITDA margins of 22%.

Todd Fister: Adjusted earnings for the fourth quarter were $287 million or $3 21 per diluted share compared with $235 million or $2 49 per diluted share in the same quarter prior year.

Todd Pfister: For the full year 2023, adjusted EBIT was $1.8 billion, and adjusted EBITDA was $2.3 billion, which are both up 2% from the prior year. Our full-year adjusted earnings were $1.3 billion, or $14.42 per diluted share, compared to $1.3 billion, or $12.88 per diluted share, in the prior year. Slide 6 shows the reconciliation between our full-year adjusted EBIT and reported EBIT. For the year, adjusting items totaled approximately $138 million and are excluded from our full-year adjusted EBIT.

Todd Fister: For the full year 2023, adjusted EBIT was $1 8 billion and adjusted EBITDA was $2 3 billion, which are both up 2% from prior year.

Todd Fister: Our full year adjusted earnings were $1 3 billion or $14 42 per diluted share compared to $1 3 billion or $12 88 per diluted share in the prior year.

Todd Fister: Slide six shows the reconciliation between our full year adjusted and reported EBIT for.

Todd Fister: For the year adjusting items totaled approximately $138 million and are excluded from our full year adjusted EBIT.

Todd Pfister: They primarily include $19 million in charges associated with our ongoing cost optimization and product line rationalization efforts, $189 million gain on the sale of our Santa Clara facility, and a $145 million loss on settlement for part of our pension liabilities, which took place in the fourth quarter of last year. Now turning to slide seven and moving on to our cash generation and capital deployment during 2023. We continue to focus on generating strong free cash flows for the enterprise. Strong earnings and continued discipline on working capital and capital investments resulted in $562 million in free cash flow in the quarter and $1.2 billion of free cash flow for the year.

Todd Fister: They primarily include 169 million of charges associated with our ongoing cost optimization and product line rationalization actions a.

Todd Fister: $189 million gain on sale of our Santa Clara facility.

Todd Fister: 145 million loss on settlement for part of our pension liabilities, which took place in the fourth quarter of last year.

Now turning to slide seven and moving onto our cash generation and capital deployment during 2023.

Todd Fister: We continue to focus on generating strong free cash flows for the enterprise.

Todd Fister: Strong earnings and continued discipline on working capital and capital investments resulted in $562 million in free cash flow in the quarter and $1 2 billion of free cash flow for the year.

Todd Pfister: Free cash conversion with 91% of adjusted earnings. Full year capital additions were $526 million, approximately 5% of revenue, up $80 million from the prior year. We remain focused on reducing capital intensity through productivity and process innovation. At year end, the company had liquidity of approximately $2.7 billion, consisting of $1.6 billion of cash and $1.1 billion of availability on our bank debt facility. During the fourth quarter of 2023, we returned $282 million to shareholders through share repurchases and dividends, bringing the year-to-day total to $812 million, approximately 68% of free cash flow. In December, the board declared a cash dividend of $0.60 per share, an increase of approximately 15%. Our capital allocation strategy remains unchanged.

Todd Fister: Free cash conversion was 91% of adjusted earnings full.

Todd Fister: Full year capital additions were $526 million, approximately 5% of revenue up $80 million from prior year.

Todd Fister: We remain focused on reducing capital intensity through productivity and process innovations as a result of strong commercial and operational execution. Our return on capital was 22% for the year.

Todd Fister: At year end the company had liquidity of approximately $2 7 billion, consisting of $1 6 billion of cash and $1 1 billion of availability on our bank debt facilities.

Todd Fister: During the fourth quarter of 2023, we returned $282 million to shareholders through share repurchases and dividends, bringing the year to date total to 812 million approximately 68% of free cash flow.

Todd Fister: In December the board declared a cash dividend of <unk> 60 per share an increase of approximately 15%.

Todd Fister: Our capital allocation strategy remains unchanged, we are focused on generating strong free cash flow returning approximately 50% to investors over time, and maintaining an investment grade balance sheet, while executing on our business strategies to grow the company.

Todd Pfister: We are focused on generating strong free cash flow, returning approximately 50% to investors over time, and maintaining an investment-grade balance sheet while executing on our business strategies to grow the company. Now turning to slide 8, I'll provide additional details on our segment results. The roofing business delivered another great quarter with revenue growth of 16% and year-over-year margin expansion. Sales in the quarter were $928 million.

Todd Fister: Now turning to slide eight I'll provide additional details on our segment results. The roofing business delivered another great quarter with revenue growth of 16% and year over year margin expansion.

Todd Fister: Sales in the quarter were $928 million overall volume was up versus last year is mild weather extended the roofing season in many regions and the attachment rate for our roofing components remains strong.

Todd Pfister: Overall volume was up versus last year as mild weather extended the roofing season in many regions and the attachment rate for our roofing components remained strong. Additionally, revenues were also positively impacted by favorable mix and continued price realization. The U.S. asphalt shingle market, on a volume basis, was up 24 percent in the quarter compared to the prior year, driven by favorable seasonality from the mild start to winter and continued storm demand. EBIT was $284 million for the quarter, up $116 million versus last year.

Todd Fister: Revenues were also positively impacted by favorable mix and continued price realization.

Todd Fister: The U S asphalt shingle market on a volume basis was up 24% in the quarter compared to the prior year driven by favorable seasonality from the mild start to winter and continued storm demand.

Todd Fister: Our U S shingle volume growth trailed the market, primarily due to our continued low levels of inventory throughout Q4 and outperformance versus the market in Q4 of 2022.

Todd Fister: EBIT was $284 million for the quarter up $116 million versus last year. The increase was primarily due to higher volumes positive price and favorable mix manufacturing costs were favorable in the quarter and input and delivery costs continue to moderate.

Todd Pfister: The increase was primarily due to higher volumes, positive price, and favorable mix. Manufacturing costs were favorable in the quarter, and input and delivery costs continued to moderate. All of this resulted in EBIT margins of 31% and EBITDA margins of 32%. For the full year, sales increased 10% to $4 billion.

All of this resulted in EBIT margins of 31% and EBITDA margins of 32%.

Todd Fister: For the full year sales increased 10% to 4 billion volume was higher about shingles and components positive price and favorable mix also contributed to the year over year increase.

Todd Pfister: Volume was higher in both shingles and components. A positive price and favorable mix also contributed to the year-over-year increase. The U.S. asphalt shingle market on a volume basis was up 6% compared to the prior year, driven by higher levels of storm activity. However, our U.S. shingle volumes trailed the market primarily due to our low inventory levels throughout the year. However, we were able to serve more roofing demand as a result of investments in debottlenecking for incremental capacity. For the full year, EBIT was $1.2 billion, up $343 million versus last year.

Todd Fister: The U S asphalt shingle market on a volume basis was up 6% compared to the prior year driven by higher levels of storm activity.

Todd Fister: Our U S shingle volumes trailed the market, primarily due to our low inventory levels throughout the year. However, we were able to serve more roofing demand as a result of investments in debottlenecking for incremental capacity.

Todd Fister: For the full year EBIT was $1 2 billion up $343 million versus last year. The EBIT increase was primarily due to positive price higher volumes and put in delivery cost that moderated throughout the year and favorable mix, the resulting EBIT margins for the year were 29% and EBITDA margins were 31%.

Todd Pfister: The EBIT increase was primarily due to positive price, higher volumes, input, and delivery costs that moderated throughout the year in a favorable mix. The resulting EBIT margins for the year were 29%, and EBITDA margins were 31%. Now please turn to slide nine for a summary of our installations. The insulation business finished the year strong with another quarter of 20 plus percent EBITDA margin. Q4 revenues were $931 million, a 3% decrease from the fourth quarter last year.

Todd Fister: Now please turn to slide nine for a summary of our insulation business.

Insulation business finished the year strong with another quarter of 20 plus percent EBITDA margins.

Todd Fister: Q4 revenues were $931 million, a 3% decrease from fourth quarter last year, and technical and global revenue was down slightly year over year positive price and favorable mix, primarily in Europe, largely offset lower volumes tied to the overall weaker macro environment.

Todd Pfister: In technical and global, revenue was down slightly year over year. However, positive price and favorable mix, primarily in Europe, largely offset lower volumes tied to the overall weaker macro environment. North American residential insulation revenue was down, as expected.

Todd Fister: North American residential insulation revenue was down as expected volumes were down as demand track closer to lagged housing starts infill.

Todd Pfister: Volumes were down as demand tracked closer to Lake Housing Start. However, inflation EBIT for the fourth quarter was $150 million, down $3 million compared to prior. The impact of lower volumes and planned maintenance downtime was largely offset by realization of previously announced pricing and favorable delivery costs. For the full year, insulation net sales decreased 1% to $3.7 billion compared to the prior year, with higher selling prices and a favorable mix offset by lower volumes in both North American residential insulation and technical and global insulation.

Todd Fister: Insulation EBIT for the fourth quarter was $150 million down $3 million compared to prior year.

Todd Fister: The impact of lower volumes and planned maintenance downtime was largely offset by realization of previously announced pricing and favorable delivery cost overall.

Todd Fister: Overall insulation delivered EBIT margins of 16% and EBITDA margins of 22% in the fourth quarter.

Todd Fister: For the full year installation net sales decreased 1% to $3 7 billion compared to prior year with higher selling prices and favorable mix offset with lower volumes in both north American residential insulation, and technical and global insulation EBIT.

Todd Pfister: EBIT increased $7 million to $619 million with EBIT margins of 17% and EBITDA margins of 23% for the full year. Slide 10 provides an overview of our composites business. In the fourth quarter, the composites business continued to experience the impact of the softer macro environment. Sales for the quarter were $514 million, down 13% compared to the prior year.

Todd Fister: EBIT increased $7 million to $619 million with EBIT margins of 17% and EBITDA margins of 23% for the full year.

Todd Fister: Slide 10 provides an overview of our composites business in the fourth quarter. The composites business continued to experience the impact of the softer macro environment.

Todd Fister: Sales for the quarter were 514 billion down 13% compared to prior year. The decrease sales resulted primarily from lower volumes and lower price as we continue to see spot price pressure for our glass reinforcements products.

Todd Pfister: The decreased sales resulted primarily from lower volumes and lower prices, as we continue to see spot price pressure for our glass reinforcements products. While overall revenue was down, we continued to see growth in our downstream nonwovens and OC structural lumber business. EBIT for the quarter was $26 million, down $38 million from the prior year.

Todd Fister: While overall revenue was down we continue to see growth in our downstream nonwovens and Oc structural lumber businesses.

Todd Fister: EBIT for the quarter was $26 million down $38 million from prior year. The EBIT decline was primarily due to lower volumes and associated production downtime as we maintained discipline to balance inventories with demand, which was partially offset by favorable manufacturing performance.

Todd Pfister: The EBIT decline was primarily due to lower volumes and associated production downtime as we maintained discipline to balance inventories with demand, which was partially offset by favorable manufacturing performance. We continued to experience price pressure in the quarter and had slightly negative price over cost as we saw input and delivery cost deflation. Overall, composites delivered 5% EBIT margins and 13% EBITDA margins for the quarter. For the full year, net sales decreased 14% to $2.3 billion compared to the prior year. The decreased sales resulted primarily from lower volumes with an additional impact from the net impact of divestitures and acquisitions. EBIT for the year was $242 million, a decrease of $256 million from last year.

Todd Fister: We continue to experience price pressure in the quarter and had slightly negative price over cost as we saw input and delivery cost deflation.

Todd Fister: Overall composites delivered 5% EBIT margins and 13% EBITDA margins for the quarter.

Todd Fister: For the full year net sales decreased 14% to $2 3 billion compared to prior year. The decrease sales resulted primarily from lower volumes with additional impact from the net impact of divestitures and acquisitions.

Todd Fister: EBIT for the year was $242 million, a decrease of $256 million from last year.

Todd Fister: The EBIT decline for the year was primarily due to lower volumes and the associated production downtime as well as the net impact of divestitures and acquisitions input costs were inflationary for the year largely offset by favorable delivery cost overall composites delivered 11% EBIT margins in the 18% EBITDA margins for 2023.

Todd Pfister: The EBIT decline for the year was primarily due to lower volumes and the associated production downtime, as well as the net impact of divestitures and acquisitions. Overall, composites delivered 11% EBIT margins and 18% EBITDA margins for 2023. Moving on to slide 11, I will discuss our full year 2024 outlook for key financial items, all of which exclude the impacts of acquisitions and divestitures, which have not yet been completed. General corporate expenses are expected to range between $240 and $250 million. Interest expense is expected to range from $70 to $80 million.

Speaker Change: Moving on to Slide 11, I will discuss our full year 2020 for outlook for key financial items, all of which exclude the impacts of acquisitions and divestitures, which have not yet been completed.

Speaker Change: General corporate expenses are expected to range between 240 and $250 million interest expense is expected to range from $70 million to $80 million.

Todd Fister: Our 2024 effective tax rate is expected to be 24% to 26% of adjusted pre tax earnings finally capital additions are expected to be approximately $550 million, which is anticipated to be in line with depreciation and amortization.

Todd Fister: Now please turn to slide 12, and I will turn the call back to Brian to further discuss our outlook Brian.

Brian D. Chambers: Thank you Todd.

Brian D. Chambers: Throughout 2023, our results demonstrated the strength of our team the value of our products and the impact of our enterprise strategy.

Brian D. Chambers: Our 2024 effective tax rate is expected to be 24 to 26% of adjusted pre-tax earnings. Finally, capital additions are expected to be approximately $550 million, which is anticipated to be in line with depreciation and amortization. Now please turn to slide 12, and I'll turn the call back to Brian to further discuss our outlook.

Brian D. Chambers: As we move into 2024, we are entering the year with a market that is fairly stable to where we exited 2023.

Brian D. Chambers: Within the U S housing market, we expect single family new construction to improve through the year based on pent up demand and the expectations for lower interest rates with.

Todd Fister: With repair and remodeling investments being more product and price dependent.

Todd Fister: We expect the macro environment in Europe to continue to be challenging while global IP is expected to grow modestly in the year.

Brian D. Chambers: Thank you, John. Throughout 2023, our results demonstrated the strength of our team, the value of our products, and the impact of our enterprise strategy. As we move into 2024, we are entering the year with a market that is fairly stable compared to where we exited 2023. Within the U.S. housing market, we expect single-family new construction to improve through the year based on pent-up demand and the expectations for lower interest rates, with repair and remodeling investments being more product and price dependent. We expect the macro environment in Europe to continue to be challenging, while global IP is expected to grow modestly in the year.

Todd Fister: Overall for the company, we expect our performance in Q1 to result in net sales slightly below prior year, while generating mid teen EBIT margins.

Todd Fister: Now consistent with prior calls I will provide a more detailed business specific outlook for the first quarter.

Todd Fister: Starting with our roofing business, we anticipate revenues will be up low single digits in the quarter.

Todd Fister: Just on the strength of the market and storm carryover demand, we expect armor market shipments could be up approximately 20% versus prior year.

Todd Fister: Anticipate our volumes to trail armor shipments in the quarter due to our very strong performance in Q1 of last year as distributors, we're rebuilding inventory of OTC products.

Todd Fister: We anticipate that our overall volume will be flat to slightly down as volume growth and shingles, and roofing components will be more than offset by the impact from the exit of our protective packaging business within components.

Brian D. Chambers: Overall, for the company, we expect our performance in Q1 to result in net sales slightly below the prior year while generating mid-teeny but high margin. Now, consistent with prior calls, I'll provide a more detailed, business-specific outlook for the first quarter. Based on the strength of the market and storm carryover demand, we expect armor market shipments could be up approximately 20% versus prior year, but we would anticipate our volumes to trail armor shipments in the quarter due to our very strong performance in Q1 of last year as distributors were rebuilding inventory of OC products. We anticipate that our overall volume will be flat to slightly down, as volume growth in shingles and roofing components will be more than offset by the impact from the exit As a reminder, we made the decision to exit this approximately $100 million business in the third quarter last year.

Todd Fister: As a reminder, we made the decision to exit this approximately $100 million business in the third quarter last year. So the impact of exiting will be a headwind to volume and revenues throughout most of the year.

Todd Fister: We expect to realize some carryover price slightly favorable mix as well as modest inflation.

Todd Fister: Compared to Q1 of last year, we anticipate favorable manufacturing cost.

Todd Fister: Overall for roofing, we anticipate EBIT margins of high 20%.

Todd Fister: Before I move on to installation I want to provide an update on the long term EBIT margin outlook for our roofing business.

Todd Fister: Each quarter, we've been updating you on the performance of the business and the investments we've been making to strengthen our contractor and distributor partnerships improve our operating efficiencies and accelerate our innovation.

Todd Fister: The result of this work has generated financial results for the business that have been running well ahead of our 20% long term guide.

Todd Fister: Demonstrating the improvements made to capitalize on strong market conditions.

Todd Fister: Based on these structural changes to improve the margin performance. We are updating the long term EBIT margin guide for roofing from approximately 20% to mid 20% on average in.

Brian D. Chambers: So the impact of exiting will be a headwind to volume and revenues throughout most of the year. We expect to realize some carryover price, slightly favorable mix, as well as modest inflation. Compared to Q1 of last year, we anticipate favorable manufacturing costs. Overall, for rooping, we anticipate EBIT margins of high 20%.

Todd Fister: In the near term with current market conditions, we would expect margins to exceed this guidance.

Todd Fister: Moving onto our installation business, we expect revenue to be down slightly versus prior year with lower demand to be largely offset by positive price and slightly favorable mix.

Todd Fister: In technical and global we expect revenue to be down slightly versus prior year.

Todd Fister: Favorable mix and price realization, resulting from previously announced increases are expected to be more than offset by lower volumes tied primarily to the market environment in Europe and slightly softer demand in North America.

Brian D. Chambers: Before I move on to installation, I want to provide an update on the long-term EBIT margin outlook for our roofing business. Each quarter, we've been updating you on the performance of the business and the investments we've been making to strengthen our contractor and distributor partnerships, improve our operating efficiencies, and accelerate our innovation. The result of this work has generated financial results for the business that have been running well ahead of our 20% long-term guide, demonstrating the improvements made to capitalize on strong market conditions. Based on these structural changes to improve margin performance, we are updating the long-term EBIT margin guide for roofing from approximately 20% to mid-20% on average. In the near term, with current market conditions, we would expect margins to exceed this guide.

Todd Fister: In our North American residential insulation business, we anticipate volumes to be relatively flat versus prior year.

Todd Fister: For the overall installation business, we expect input materials to be inflationary, partially offset by favorable deliberate cost.

Todd Fister: Overall, we anticipate positive, but narrowing price cost for the quarter.

Todd Fister: Given all this we expect to generate mid teen EBIT margins for installation in Q1 similar to the first quarter last year.

Todd Fister: And in composites for the first quarter, we expect results similar to what we delivered in Q4.

Todd Fister: From a market standpoint, we expect to start the year with demand trends in most of our glass reinforcements product lines similar to what we experienced in Q4.

Todd Fister: For Q1, we anticipate overall revenues to be down low to mid teens versus the first quarter of 2023, driven by volumes, which are expected to be down in glass reinforcements. Additionally.

Todd Fister: Additionally, we anticipate overall pricing to step down year over year with glass reinforcement contracts resetting and spot price continuing to be pressured. We also expect mix to remain a headwind.

Brian D. Chambers: Moving on to our installation business, we expect revenue to be down slightly versus the prior year, with lower demand to be largely offset by positive price and slightly favorable mix. In technical and global, we expect revenue to be down slightly versus the prior year. Favorable mix and price realization, resulting from previously announced increases, are expected to be more than offset by lower volumes, tied primarily to the market environment in Europe and slightly softer demand in North America. In our North American residential inflation business, we anticipate volumes to be relatively flat versus prior years.

Todd Fister: Within our nonwovens business, we expect volumes to be up modestly given the strength of roofing demand was slightly positive price cost as contract pricing offset anticipated inflation.

Todd Fister: Overall for the segment, we anticipate the impact of price and volume to be partially offset by favorable manufacturing costs year over year, and we will continue to be proactive in adjusting our production to demand.

Todd Fister: For the first quarter, we expect EBIT margins of mid single digits similar to what we had last quarter.

Speaker Change: With that view of our businesses I'll turn to a few enterprise items.

Speaker Change: Over the past few years, we've made several strategic choices and operational investments to increase our capabilities and consistently deliver higher more resilient earnings.

Brian D. Chambers: For the overall inflation business, we expect input materials to be inflationary, partially offset by favorable delivery costs. Overall, we anticipate positive but narrowing price costs for the quarter. Given all this, we expect to generate mid-teen event margins for insulation in Q1, similar to the first quarter last year. And in composites for the first quarter, we expect results similar to what we delivered in Q4. From a market standpoint, we expect to start the year with demand trends in most of our glass reinforcements product lines, similar to what we experienced in Q4. For Q1, we anticipate overall revenues to be down low to mid-teens versus the first quarter of 2023, driven by volumes which are expected to be down in glass reinforcement. Additionally, we anticipate overall pricing to step down year over year, with glass reinforcement contracts resetting and spot prices continuing to be pressured. We also expect mixed to remain ahead.

Speaker Change: As we look at additional opportunities to grow we will continue to be disciplined operators focusing on markets and product lines, where we can build leading positions through our customer and channel knowledge materials science, and innovation capabilities and manufacturing and process expertise.

Speaker Change: We will also look for investments that improve our position to capitalize on key secular trends around increased levels of upgrades being made in residential living spaces. The demand for more sustainable building solutions and changing construction practices, creating the need for more multi materials and prefabricated systems.

Speaker Change: In evaluating these opportunities we will remain committed to a balanced capital allocation strategy focused on organic growth and acquisitions that support our strategic priorities and leverage our unique operating capabilities.

Speaker Change: And returning approximately 50% of free cash flow to shareholders over time through a consistently increasing dividend and ongoing share repurchases.

Speaker Change: Our team delivered outstanding results in 2023, and as we start 2024, we will continue to deliver for our customers and shareholders, while making significant strides to further strengthened Owens corning's position as the market leader in building and construction materials.

Brian D. Chambers: Within our nonwovens business, we expect volumes to be up modestly, given the strength of roofing demand, with slightly positive price costs as contract pricing offsets anticipated inflation. Overall, for this segment, we anticipate the impact of price and volume to be partially offset by favorable manufacturing costs year-over-year, and we will continue to be proactive in adjusting our production to demand. For the first quarter, we expect EBIT margins of mid-single digits, similar to what we had last quarter.

Speaker Change: With that we would like to open the call up for questions.

Speaker Change: Thank you once again, if you would like to ask a question. Please press star one on your telephone keypad now we'll press star two if you would like to withdraw your question.

Speaker Change: The first question comes from Joe <unk> from Deutsche Bank. Please go ahead.

Joe: Hey, good morning, everybody. Thanks for taking my questions and congrats on the results.

Speaker Change: Thanks, Joe.

Joe: Yes, if I could just spend a minute on roofing obviously, thanks for the update on your longer term thoughts on roofing margins, maybe if you could just go into a little bit more detail on bridging.

Brian D. Chambers: With that view of our businesses, I'll turn to a few enterprise items. Over the past few years, we've made several strategic choices and operational investments to increase our capabilities and consistently deliver higher, more resilient earnings. As we look at additional opportunities to grow, we will continue to be disciplined operators, focusing on markets and product lines where we can build leading positions through our customer and channel knowledge, material science and innovation capabilities, and manufacturing and process expertise. Demand for more sustainable building solutions and changing construction practices are creating the need for more multi-material and prefabricated systems.

Joe: Where you were before to where you see things now I know you went over it a little bit in the prepared remarks, but just some additional building blocks would be great.

Speaker Change: Sure. Thanks.

Speaker Change: Our roofing team has just done an incredible work to strengthen the performance of our roofing business and you saw that in the results in the quarter and full year and we were getting a lot of questions kind of throughout last year as we saw the margins increasing around the durability of the margins and I said at that time.

Speaker Change: We were making structural improvements to the business that we felt was increasing the durability of our margins and then some of that was going to be tied to our strong market and we felt like it was important to start this year by updating the guide and moving that up from our approximately 20% that we've been working with for the last several years to our mid 20% on.

Brian D. Chambers: In evaluating these opportunities, we will remain committed to a balanced capital allocation strategy focused on organic growth and acquisitions that support our strategic priorities and leverage our unique operating capabilities, returning approximately 50% of free cash flow to shareholders over time through our consistently increasing dividend and ongoing share repurchase. Our team delivered outstanding results in 2023. And as we start 2024, we will continue to deliver for our customers and shareholders while making significant strides to further strengthen Owens Corning's position as a market leader in building and construction materials. With that, we would like to open the call to questions. Thank you. Once again, if you would like to ask a question, please press star 1 on your telephone keypad now, or press star 2 if you would like to withdraw your question. The first question comes from Joe Ahlersmeyer from Deutsche Bank. Please go ahead. Hey, good morning, everybody.

Speaker Change: Average guidance. So when we look at the structural changes we've made in the business. They really come across a few key areas. In addition to our really strong contract or pull through demand network.

Speaker Change: We've created and it's really a robust demand network I think a couple of changes that are more durable around is one around our operating efficiencies overall in our overall operational performance in the business. So we've continued to invest as Todd talked about around some debottlenecking and increasing our land capacity. So we're getting great efficiencies out of our production lines.

Speaker Change: Through productivity through automation through process technologies, and that's opening up and giving US great operating leverage on our assets that is ongoing and very durable. We're looking and have made a lot of plant optimization moves within our components business. A few years back we shipped a lot of production out of China and India.

Speaker Change: I've talked about the exit of our packaging business. So we continue to look at manufacturing optimization plant optimization efforts. So that's a big focus around our operational efficiencies in this space. The other big area has been around the growth and expansion of our roofing components business. So we continue to increase the products we can.

Joe Ahlersmeyer: Thanks for taking my questions, and congrats on the results. Thanks, Joe. Yeah, if I could just spend a minute on roofing. Obviously, thanks for the update on your longer-term thoughts on roofing margins. Maybe if you could just go into a little bit more detail on bridging where you were before to where you see things now. I know you went over it a little bit in the prepared remarks, but just some additional building blocks would be great. Sure, thanks.

Speaker Change: Bring to market and this is tied to our multi material system sell around roofing were hip enrich starter ventilation products, all the pieces and parts of two.

Speaker Change: Install a roof, we can now provide and those increase our mix those are higher margin products. So the expansion of that business is also added to the durability of our overall margins so that kind of combined with now or <unk>.

Brian D. Chambers: Our roofing team has just done incredible work to strengthen the performance of our roofing business, and you saw that in results for the quarter and full year. And we were getting a lot of questions kind of throughout last year as we saw the margins increasing around the durability of the margins. And I said at that time that we were making structural improvements to the business that we felt were increasing the durability of our margins, and then some of that was going to be tied to a strong market. And we felt like it was important to start this year by updating the guide and moving that up from our approximately 20% that we've been working with for the last several years to our mid-20% on average guide.

Speaker Change: Strong market, where we're seeing higher volumes that are giving us overall operating leverage I'm a good pricing environment. That's really led to the strength of the earnings that we're seeing in the business, but even when you set aside kind of the market dynamics. We feel these structural improvements are going to allow us to maintain these kind of operating margins in the mid 20% on average over time.

Speaker Change: Our next question is from Stephen Kim at Evercore ISI. Please go ahead.

Stephen Kim: Thanks, very much guys. Yeah, I just wanted to follow up on Joe's question actually regarding roofing I appreciate the long term guide an explanation.

Stephen Kim: As well, but.

Stephen Kim: From a from a volume perspective.

Brian D. Chambers: So when we look at the structural changes we've made to the business, they really come across a few key areas. In addition to our really strong contractor pull-through demand network that we've created, and it's really a robust demand network, I think a couple of the changes that are more durable are one around our operating efficiencies overall and our overall operational performance in the business.

Stephen Kim: This year was a surprisingly strong year.

Stephen Kim: Hugh.

Stephen Kim: Jos to focus on Debottlenecking efforts as opposed to expanding capacity and Moreover manner.

Stephen Kim: And so as a result, you lost a little bit of share.

Stephen Kim: As you look into 2024.

Stephen Kim: If the industry volumes were to normalized would you expect your share to increase back up to the level that it <unk>.

Brian D. Chambers: So we've continued to invest, as Todd talked about, in some debottlenecking and increasing our LAM capacity. So we're getting great efficiencies out of our production lines through productivity, automation, process technologies, and that's opening up and giving us great operating leverage on our assets that is ongoing and very durable. We're looking at and have made a lot of plant optimization moves within our components business. A few years ago, we shipped a lot of production out of China to India and talked about the exit of our packaging business, so we continue to look at manufacturing optimization and plant optimization efforts.

Stephen Kim: Previously was.

Stephen Kim: And if I could also just take this idea of like maybe losing a little bit of share in a strong market to the insulation business.

Stephen Kim: Taken a somewhat similar approach and installation where over the last few years, you've had competitors increase capacity and so forth.

Stephen Kim: It doesn't sound like you are sort of like announcing any new capacity expansion and installation and so again I'm just trying to understand how you think about balancing share with.

Stephen Kim: With profitability, maybe you can say in these two segments.

Stephen Kim: The outlooks that you have that you have.

Stephen Kim: Yeah. Thanks, Steven Let me take these some of these pieces and then May I ask Todd to comment as well.

Brian D. Chambers: So that's a big focus around our operational efficiencies in the space. The other big area has been around the growth and expansion of our roofing components. So we continue to increase the products we can bring to market. And this is tied to our multi-material system cell around roofing. We have hip and ridge starters, ventilation products, all the pieces and parts to install a roof we can now provide. And those add to our mix.

Todd Fister: Talk about I guess, the decision around debottlenecking versus capacity or plant expansion.

Speaker Change: This is how we are expanding capacity in a very capital efficient way, we've got the broadest roofing network.

Todd Fister: As a manufacturer and we have opportunities within each one of those facilities to debottleneck to improve line speeds and to increase capacity and this is something that we talked about a few years ago, you would've heard Gunnar speak too around opening up capacity inside our existing network and a very efficient way and so we've been doing that so yeah.

Brian D. Chambers: Those are higher-margin products, so the expansion of that business has also added to the durability of our overall margins. So that kind of combined with a strong market where we're seeing higher volumes that are giving us overall operating leverage, and a good pricing environment, that's really led to the strength of the earnings that we're seeing in the business. But even when you set aside kind of the market dynamics, we feel these structural improvements are going to allow us to maintain these kind of operating margins in the mid 20 percent on average over time. Our next question is from Stephen Kim at Evercore ISI. Please go ahead.

Todd Fister: Year on year, 2020 two we produced a lot more laminates than we did in 'twenty. One we did that again last year, we're going to continue to do that and then we did announce a new laminate or that we're adding in our Medina facility.

Todd Fister: That will come on stream mid next year and that'll be another big capacity improvements so year on year, we're producing significantly more of laminates in the total that I would share with you roughly equates to a new four wide laminate or when we're done with that work by the end of 2025, so over a three year time period, we've effectively.

Todd Fister: Added laminate capacity to equate to do full wide laminate or and again in a very capital efficient way leveraging our existing network leveraging our existing workforce and we feel thats been a really efficient way to bring new capacity on stream.

Stephen Kim: Thanks very much, guys. Yeah, I just wanted to follow up on Joe's question, actually, regarding roofing. I appreciate the long-term guide and that explanation as well, but from a volume perspective, you know, this year was a surprisingly strong year. You chose to focus on debottlenecking efforts, as opposed to expanding capacity in a more overt manner.

Todd Fister: So that's given us the opportunity to grow as we go forward and continues to position us when we think about our share position.

Brian D. Chambers: And so, as a result, you lost a little bit of share. As you look into 2024, if industry volumes were to normalize, would you expect your share to increase back up to the level that it previously was? And if I could also just take this idea of maybe losing a little bit of share in a strong market to the insulation business, you've taken a somewhat similar approach in insulation, where, over the last few years, you've had competitive increased capacity and so forth. It doesn't sound like you're sort of announcing any new capacity expansion in insulation. So, again, I'm just trying to understand how you think about balancing share with profitability, maybe you could say in these two segments, given the outlooks that you have. Yeah, thanks, Stephen. Let me take a look at some of these pieces, and I may ask Todd to comment as well.

Todd Fister: While we saw some tough comps here Q4, Q1, I will take us back to in Q4 of last year 2020, I'm sorry in Q4 2022 in Q1 of last year, we significantly outperformed the market and I think that's a little bit to your your question around our ability to gain share that was an area where demand.

Todd Fister: For our product remains incredibly strong.

Todd Fister: And distributors had to continue to buy to rebuild inventory levels and we saw that resulted in outperformance to armor shipments in Q4 'twenty to an outperformance in Q1 of this year and on balance through 2023, we finished the share with a share position pretty consistent with our historical average so while we're investing for growth we're.

Todd Fister: And to add land capacity I would say those are probably the two proof points that to your question on if the market does slow as we go through the year, we feel that our our great contractor model, our great distributor partnerships our product innovation all the things we've talked about is going to result in growth in the business and we feel good about our position.

Brian D. Chambers: So let me first talk about, I guess, the decision around de-bottlenecking versus capacity or plant expansion. This is how we are expanding capacity in a very capital-efficient way. We've got the broadest roofing network as a manufacturer, and we have opportunities within each one of those facilities to de-bottleneck, to improve line speeds, and to increase capacity. And this is something that we talked about a few years ago, you would have heard Gunnar speak about, around opening up capacity inside our existing network in a very efficient way. And so year on year, in 22, we produced a lot more laminates than we did in 21. We did that again last year.

Todd Fister: And in doing that going forward so.

Todd Fister: And inflation, maybe Todd I'll have you comment on that sure.

Todd Fister: Sure Brian It's Steven Thanks for the question. So yeah, I mean, if we step back a few years as to what we were trying to accomplish and installation we.

Todd Fister: We were really focused on how do we drive structural margin improvement in the business, how do we drive lower fixed costs through a more efficient and streamlined network and ultimately try to drive higher and more stable margins in the business. While we also drive a higher return on capital I mean that was our thesis for the last few years.

Brian D. Chambers: We're going to continue to do that. And then we did announce a new laminator that we're adding to our Medina facility that will come on stream mid-next year, and that will be another big capacity improvement. So year on year, we're producing significantly more laminates, and the total that I would share with you roughly equates to a new four-wide laminator. And we'll be done with that work by the end of 2025.

Todd Fister: And in some ways it is similar to roofing and that for.

Todd Fister: For insulation.

Todd Fister: Highest return the highest margin new capacity, we can add as debottlenecking, our existing assets and finding ways to get more production out of our existing facilities and out of our existing fixed cost and we've been very much focused on that to unlock some of that trapped capacity in our network.

Brian D. Chambers: So over a three-year time period, we've effectively added laminate capacity to equate to a new four-wide laminator, and again, in a very capital-efficient way, leveraging our existing network, leveraging our existing workforce, and we feel that's been a really efficient way to bring new capacity on stream. So that's given us the opportunity to grow as we go forward and continues to position us. When we think about our share position, while we saw some tough comps here Q4, Q1, I will take us back to Q4 of last year, 2020, I'm sorry, Q4 of 2022, and Q1 of last year, we significantly outperformed the market. And I think that answers a little bit to your question around our ability to gain share. That was an area where demand for our product remained incredibly strong, and distributors had to continue to buy to rebuild inventory levels.

Todd Fister: Always evaluated the market conditions, we were always looking at the future state of our business in assessing whether or not there is a right time to add capacity in the business. What I would say right. Now is we're very happy with our current share positions and we're very happy with the customer and channel mix that we have in the business and where else.

Todd Fister: So very happy with the margin stability, we were able to drive in 2023, and what was a down market overall for residential housing in North America.

Todd Fister: The next question comes from Michael Rehaut from J P. Morgan. Please go ahead.

Michael Jason Rehaut: Thanks, Good morning, everyone and congrats on the results.

Michael Jason Rehaut: I wanted to just circle back to the roofing and asphalt long term guide.

Michael Jason Rehaut: To beat a dead horse, but I think that obviously, it's an encouraging statement when you talked about kind of re rating your or increasing your long term margin.

Brian D. Chambers: And we saw that result in an outperformance against armor shipments in Q4 of 2022, and an outperformance in Q1 of this year. And on balance, through 2023, we finished with a share position pretty consistent with our historical average. So while we're investing for growth, and we're investing to add land capacity, I would say those are probably the two proof points to your question on if the market does slow as we go through the year, we feel that our great contractor model, our great distributor partnerships, our product innovation, all the things we've talked about are going to result in growth in the business. And we feel good about our position in doing that going forward. So in terms of red and inflation, maybe Todd, I'll have you comment on that. Sure, Brian, and Stephen, thanks for the question.

Michael Jason Rehaut: Targets around that business.

Michael Jason Rehaut: <unk>.

Michael Jason Rehaut: Brian you kind of talked about the big driver being.

Michael Jason Rehaut: The structural operational improvement.

Michael Jason Rehaut: Manufacturing efficiencies et cetera.

Todd Fister: Was wondering.

Todd Fister: But you also kind of highlighted.

Todd Fister: The improved.

Todd Fister: A piece of the components business.

Todd Fister: And.

Todd Fister: I would assume over the last two years or three years, there's been some positive pricing in the business as well.

Todd Fister: I'm going to get a sense, if it's possible on how to think about those components in terms of what's driving let's say going from 20%.

Todd Fister: At 25% would it be predominantly the manufacturing efficiencies or operational efficiencies.

Todd Fister: And how does price.

Todd Fister: Improvement in price.

Todd Fister: As well as the bigger mix of the components also.

Todd Fister: Play a factor in the margin change.

Todd Pfister: So yeah, I mean, if we step back a few years as to what we were trying to accomplish in installation, we were really focused on how do we drive structural margin improvement in the business? You know, how do we drive lower fixed costs through a more efficient and streamlined network and, ultimately, try to drive higher and more stable margins in the business? We also drive a higher return on capital. I mean, that was our thesis for the last few years.

Speaker Change: Yeah. Thanks, Mike So I think the primary drivers that I talked about around operational efficiencies our growth in our components business. Those are bigger pieces of kind of taking the guide up from from 20% to 25 ish in the mid twenties range. So you can see those are going to be big.

Todd Fister: Rivers', but youre absolutely right when we look at our product innovation, that's created products that duration shingle that carries a high margin on the products and the more we sell that mix shift has been a part of that both in the shingle side and then the component side that we think is sustainable going forward.

Todd Pfister: And in some ways, it is similar to roofing in that the, you know, for insulation, the highest return, the highest margin new capacity we can add is de-bottlenecking our existing assets and finding ways to get more production out of our existing facilities and out of our existing fixed costs. And we've been very much focused on that to unlock some of that trapped capacity in our network, but always evaluating market conditions. I mean, we're always looking at the future state of our business and assessing, you know, whether or not there's the right time to add capacity in the business.

Todd Fister: And then the overall just value, we're bringing I think to our contractors as we help them build their businesses certainly there is a durability of the price realizations, we've had around the value, we're bringing to a contractor in terms of building their business value, we're bringing to a distributor with high quality products serviced well.

Todd Pfister: What I would say right now is we're very happy with our current share positions, and we're very happy with the customer and channel mix that we have in the business. And we're also very happy with the margin stability. We were able to drive growth in 2023 in what was a down market overall for residential housing in North America. The next question comes from Michael Rehaut from J.P. Morgan. Please go ahead. Thanks. Good morning, everyone, and congratulations on the results.

Todd Fister: And the value to the innovation, we're bringing in terms of the new product offering. So it gets mixed into that in terms of the commercial capabilities, but I think that.

Todd Fister: The durability of this is really going to be on those primary too. We get also a pickup from the mix shift to laminates that we think is sustainable and the pricing and price value, we get for our offering and our services. We think that's durable I think the incremental is going to be there is always a bit of.

Michael Jason Rehaut: Um, you know, I wanted to just circle back to, you know, the roofing and asphalt long-term guide, um, not to beat a dead horse, but I think that, obviously, it's an encouraging statement when you talk about kind of re-rating your, or increasing your, uh, long-term margin, uh, targets around that business. And, you know, um, you know, Brian, you kind of talked about the big driver being, um, the, you know, structural operational improvement, um, you know, manufacturing efficiencies, et cetera. I was wondering, um, but you also kind of highlighted, um, you know, the improved piece of the components business. And, you know, I would assume that over the last two or three years, there's been some positive price movement in the business as well.

Todd Fister: Upside when we get stronger market conditions that we've seen now the last couple of years, where we get additional volume leverage but.

Todd Fister: But our ability to go gain price relative to inflation to be able to get good value for our products has been strong and we think that continues as we go forward.

Todd Fister: Our next question comes from Sam Reed at Wells Fargo. Please go ahead.

Todd Fister: Okay.

Sam Reed: Awesome. Thanks, guys. So I wanted to drill down a bit more on composite margin and perhaps break out how those looked FERC glass reinforcements versus a non woven and then thinking about your plans for glass reinforcements realize it's still early but are you at a point, where there's a particular bias towards selling this business outright or spending it.

Michael Jason Rehaut: So I was hoping to get a sense, if it's possible, of how to think about those components in terms of what's driving, let's say, you know, going from 20% to 25%. Would it be predominantly manufacturing efficiencies or operational efficiencies? And how does price, the recent improvement in price as well as the bigger mix of the components also play a factor in this margin change? Yeah, thanks, Mike.

Sam Reed: Especially now that you probably had the opportunity to have perhaps a few more conversations post last week's announcement.

Speaker Change: Thanks, So let me start with just don't overview kind of on composites on on.

Speaker Change: The reinforcements.

Sam Reed: And then glass reinforcements Martin So we said when we announced this the glass reinforcements business is about $1 3 billion of the $2 three roughly so the rest of that you can safely assume is tied to our kind of our nonwovens business, our structural lumber business, we talked about and we said that the EBITDA margins in the <unk>.

Brian D. Chambers: So I think the primary drivers that I talked about around operational efficiencies, our growth in our components business, those are bigger pieces of kind of taking the guide up from from 20 to 25 ish in the mid to mid 20s range. So you can see those are going to be big drivers. But you're absolutely right, when we look at our product innovation, that's created products that the duration shingle, that carries a high margin on the product. So the more we sell, that mix shift has been a part of that, both on the shingle side and in the component side, that we think is sustainable going forward. And then the overall good value we're bringing, I think, to our contractors as we help them build their businesses.

Sam Reed: Business were relatively similar.

Sam Reed: Overtime on the space now I would say that the margins in our <unk> business certainly had been more pressured in 2023 relative to our nonwovens business and so if I just take a step back a little bit more on the nonwovens business. It really is a great business that we've been investing in over the past few years to expand capacity and really build.

Brian D. Chambers: Certainly, there's a durability of the price realizations we've had around the value we're bringing to a contractor in terms of building their business value we're bringing to a distributor with high-quality products serviced well, and the value to the innovation we're bringing in terms of the new product offering. So it gets mixed into that in terms of the commercial capabilities. But I think that the durability of this is really going to be on those primary two; we get a pickup from the mix shift to laminates, which we think is sustainable, and the pricing and price value we get for our offering and our services. We think that's durable.

Sam Reed: Our capabilities so.

Sam Reed: It's been key to our roofing success, we have the vertically integrated model or we make the hybrid we make the math that has allowed us to design products that are cost effective and really performed very very well. So it's been a key part of our roofing success, but in addition to that we also sell novel materials to other roofing.

Sam Reed: <unk> as well as other building and construction materials. So it's a it's an important input material around gypsum for facer for Poly ISO board for commercial roofing applications.

Brian D. Chambers: I think the incremental is going to be there's always a bit of upside when we get stronger market conditions like we've seen in the last couple of years where we get additional volume leverage. But our ability to go gain price relative to inflation to be able to get good value for our products has been strong. And we think that will continue as we go forward. Our next question comes from Sam Reid at Wells Fargo. Please go ahead.

Sam Reed: Sealing applications, particularly in Europe.

Sam Reed: And then and flooring applications, so it really fits well into our building and construction focus and supports our drive to increase and product offering in that space. It's a business that is highly specified it's primarily all contracts.

Sam Reid: Awesome. Thanks, guys. So I wanted to drill down a bit more on composite margins and perhaps break out how those looked for glass reinforcements versus non-wovens. And then thinking about your plans for glass reinforcements, realize it's still early, but are you at the point where there's a particular bias towards selling this business outright or spinning it, especially now that you've probably had the opportunity to have perhaps a few more conversations post last week's announcement? Thanks. Thanks.

Sam Reed: And it's primarily in North America, and Europe, So I think it fits our geographic footprint.

Sam Reed: The business there has generated really good revenue good earnings and.

Sam Reed: And we saw that continue in 2023 and a little bit on the guy that we're trying to break out to give more visibility we see good demand as we start the year, primarily driven by by roofing and our roofing business.

Sam Reed: And then a positive price cost mix. So the contracts that we've been able to finalize in our nonwovens business have resulted in some positive pricing. So we see good price cost as we go forward. So that's that's going to be the difference in the business is a little bit but why it is also so important that we're maintaining that as part of the company going forward in terms of.

Brian D. Chambers: Let me start with just an overview kind of of composites on the reinforcements and then glass reinforcements margins. So, as we said when we announced this, the glass reinforcements business is about 1.3 billion of the 2.3, roughly. So the rest of that you can safely assume is tied to our kind of non-wovens business, our structural lumber business we talked about, and we said that the EBITDA margins in the business were relatively similar over time in the space.

Sam Reed: Our plans for <unk>. We are just early in the process. So I would say we have not made any conclusions on a sale or spin that's going to be part of our valuation, but as we go forward. We're going to we'll continue to update you as needed on that that progress, but I would say. This is we are just getting started in it. So it's gonna be a few quarters I think before we can get to some of those.

Brian D. Chambers: Now I would say that the margins in our GR business certainly have been more pressured in 2023 relative to our non-wovens business. And so if I just take a step back a little bit more in the non-wovens business, it really is a great business that we've been investing in over the past few years to expand capacity and really build out our capabilities. So it's been key to our roofing success. We have a vertically integrated model where we make the hybrid, and we make the mat.

Sam Reed: Conclusions reach out to some buyers and be able to gauge some interest.

Sam Reed: Okay.

Sam Reed: Our next question comes from John Lovallo from UBS. Please go ahead.

John Lovallo: Good morning, guys. Thank you for taking my question I.

Brian D. Chambers: That has allowed us to design products that are cost-effective and really perform very, very well. So it's been a key part of our roofing success. But in addition to that, we also sell non-woven materials to other roofing manufacturers, as well as other building and construction materials. So it's an important input material around gypsum for a facer, for poly-iso board, for commercial roofing applications, in ceiling applications, particularly in Europe, and then in flooring applications.

John Lovallo: I guess it is when you talk about near term roofing margins exceeding that mid 20% range is that a <unk> comment specifically or could that perhaps be the case through 2024, and also roofing revenue typically rises by a decent amount quarter over quarter in the first quarter the outlook seems to imply slightly down quarter over quarter.

Brian D. Chambers: So it really fits well into our building and construction focus and supports our drive to increase product offering in that space. It's a business that is highly specified. It's primarily all contracts, and it's primarily in North America and Europe.

John Lovallo: If we got that right what might be driving that thanks.

John Lovallo: Yeah.

Speaker Change: Sorry, So let me I'll start and then I'll ask for a clarifying question on your on your revenue base, but.

Speaker Change: I'd say on the long term guide, we certainly guide a quarter at a time, so we've given that guidance in the first quarter, but given given my comments on the roofing business. Overall, we think the first half of the year is going to be very strong theres a lot of pent up demand in terms of carryover from storm activity that we see driving really good demand trends.

Brian D. Chambers: So I think it fits our geographic footprint. The business there has generated really good revenue, and good earnings, and we saw that continue in 2023, and a little bit on the guide that we're trying to break out to give more visibility. We see good demand as we start the year, primarily driven by roofing and our roofing business, and then a positive price-cost mix. So the contracts that we've been able to finalize in our non-woven business have resulted in some positive pricing. So we see good price costs as we go forward. So that's going to be the difference in the businesses a little bit, but why it's also so important that we're maintaining that as part of the company going forward. In terms of our plans for GR, we're just early in the process.

Speaker Change: And again in that strong of a market, we would expect our our margins to perform.

Speaker Change: At a higher level than the mid.

Speaker Change: Mid 20% on average that that was our guide so I wouldn't say that is a one quarter only guide in terms of our higher outlook I think that could continue as we go into the year on roofing and then I just wanted to maybe a clarifying question on your roofing revenue question was that versus fourth quarter or year on year.

Brian D. Chambers: So I would say we've not yet made any conclusions on a sale or spin. That's going to be part of our evaluation, but as we go forward, we'll continue to update you as needed on that progress. But I would say we're just getting started on it, so it's going to be a few quarters, I think, before we can get to some of those conclusions, reach out to some buyers, and be able to gauge some interest. Our next question comes from John Lovallo from UBS. Please go ahead.

John Lovallo: Quarter over quarter sorry.

Speaker Change: Quarter over quarter, yes, So again ill go back to Q1 of last year, we had a significant outperformance relative to the market. Overall. So we had very strong volumes. We were shipping everything we could make last year to start the year that continue throughout the year. So a little bit of the revenue growth for us this year is going to be.

John Lovallo: Good morning, guys. Thank you for taking my question. I guess it is, you know, when you talk about near-term roofing margins exceeding that mid 20% range, is that a one-cue comment specifically? Or could that perhaps be the case through 2024? And also, you know, roofing revenue typically rises by a decent amount quarter over quarter in the first quarter. But the outlook seems to imply slightly down quarter over quarter. If we got that right, what might be driving that? Thanks.

John Lovallo: We've got a little bit of upside in volumes.

John Lovallo: But not significant and then we are seeing a little bit of a headwind for the exit of our packaging business and that's about $100 million of revenue and thats pretty ratably across evenly spread across all four quarters. So that's impacting us a little bit here in Q1 on the revenue front.

John Lovallo: Okay.

John Lovallo: The next question is from Matthew Bouley from Barclays. Please go ahead.

John Lovallo: Yeah.

Matthew Bouley: Good morning, Thank you for taking the question.

Brian D. Chambers: Quarter over quarter, sorry, Quarter over quarter. Yeah, so again, I'll go back to Q1 of last year. We had a significant outperformance relative to the market overall. So we had very strong volumes; we were shipping everything we could make last year to start the year, and that continued throughout the year. So a little bit of the revenue growth for us this year is going to be, we've got a little bit of upside in volumes, but not significant. And then we are seeing a little bit of headwind for the exit of our packaging business, which is about $100 million in revenue.

Matthew Bouley: I just wanted to ask about production I think in the fourth quarter, you were taking downtime across I don't know if it was all three segments I think the plan was for all three segments can.

Matthew Bouley: Can you just kind of remind us what what was the margin impact from some of the downtime you took and then kind of as you are seeing there you're calling for volumes to improve in roofing and maybe you've got some improvement on the residential side and installation and all of that just how are you kind of planning to run your assets here in the first half and what would that mean for your for your margins.

Speaker Change: Thank you.

Speaker Change: Yes, overall I would say the downtime we took in Q4 was really spread across all the businesses.

Brian D. Chambers: And that's pretty readily across evenly spread across all four quarters. So that's impacting us a little bit here in Q1 on the revenue front. The next question is from Matthew Bouley from Barclays. Please go ahead. Good morning.

Matthew Bouley: Composites, particularly GR was tied more to demand balancing inventory management I'd say the other parts of the company, we generally take fourth quarter maintenance downtime to service the assets and we did that throughout.

Matthew Bouley: Thank you for taking the question. I just wanted to ask about production. I think in the fourth quarter, you know, you were taking downtime across, I don't know if it was all three segments, but I think the plan was for all three segments.

Matthew Bouley: In this space, so we don't quantify it necessarily.

Matthew Bouley: Bye bye facility or by business segment, but I would say the impact was larger in our composites business glossary enforces business.

Brian D. Chambers: Can you just kind of remind us what the margin impact was from some of the downtime you took? And then kind of, you know, as you're seeing that you're calling for volumes to improve and roofing and, you know, maybe you've got some improvement on the residential side and insulation and all that. Just how are you kind of planning to run your assets here in the first half, and what would that mean for your margins? Thank you.

Matthew Bouley: And then had an impact but less so in insulation and roofing and we think again that was tied to just some temporary maintenance in terms of how we're running the assets now as we've started the year in roofing every facilities back up and running our lines are running full out producing as much product as we can to service our customers I'd say the same thing in our residential insulation business.

Brian D. Chambers: Yeah, overall, I'd say that the downtime we took in Q4 was really spread across all the businesses in composites, particularly GR, which was tied more to demand balancing and inventory management. I'd say the other parts of the company generally take fourth-quarter maintenance downtimes to service the assets, and we did that throughout this space.

Matthew Bouley: Again, we've got those assets up and running and producing.

Matthew Bouley: At a high level, our nonwovens business, where back up so I would say the the one that we continue to balance our downtime and curtailments is going to be in our classroom <unk> business. As we continue to just again balanced production to demand drive good cash flows in that business, but in our roofing business, our resin insulation business. We're.

Brian D. Chambers: So we don't quantify it necessarily by facility or by business segment, but I'd say the impact was larger in our composites business, the glass reinforcements business, and then it had an impact, but less so in insulation and roofing. And we think, again, that was tied to just some temporary maintenance. In terms of how we're running the assets now, as we start the year in roofing, every facility is back up and running. Our lines are running full out, producing as much product as we can to serve our customers. I'd say the same thing in our residential insulation business. Again, we've got those assets up and running and producing at a high level.

Matthew Bouley: We're back up and running and will continue to operate those assets full out to service demand.

Matthew Bouley: Okay.

Matthew Bouley: The next question comes from Kathryn Thompson of Thompson Research Group. Please go ahead.

Kathryn Ingram Thompson: Hi, Thank you for taking my question today. This is more focused on your composite dismiss.

Kathryn Ingram Thompson: And just understanding more on the production level and as you contemplate.

Kathryn Ingram Thompson: Selling nonwovens business, we just know from our experience in going to.

Kathryn Ingram Thompson: Since you're going to have different types of products produced composite products produced within a plant could you clarify.

Kathryn Ingram Thompson: To what extent that you're able to.

Kathryn Ingram Thompson: Non bluefin production versus other products on a.

Kathryn Ingram Thompson: A single plant basis, really just helping us understand you know.

Brian D. Chambers: Our nonwovens business is back up, so I'd say the one that we continue to balance our downtime and curtailments is going to be in our glass reinforcements business as we continue to just, again, balance production to demand and drive good cash flows in that business. But in our roofing business and our residential insulation business, we're back up and running, and we'll continue to operate those assets full out to service demand. The next question comes from Kathryn Thompson of the Thompson Research Group. Please go ahead.

Kathryn Ingram Thompson: How how clean that should be and then also along that line.

Kathryn Ingram Thompson:

Kathryn Ingram Thompson: Clearly I understand there's different types of nonwoven products, but.

Kathryn Ingram Thompson: Are there any other cross selling or are the opportunities.

Kathryn Ingram Thompson: That may be lost from selling it or just.

Matthew Bouley: Hoping to understand really the two differential between non live in your other core products. Thank you.

Speaker Change: Alright, Thanks, Kevin just to clarify so our announcement.

Speaker Change: On strategic alternatives for our glass reinforcements business, so our nonwovens business.

Kathryn Ingram Thompson: Hi, thank you for taking my question today. This is more focused on your composite business and just understanding more at the production level and, you know, as you contemplate selling your nonwovens business. We just know from our experience in going to plants that you can have different types of products produced, composite products produced within a plant. Could you clarify to what extent you're able to? Are there any other cross-selling or other opportunities that may be lost from selling it or just, you know, helping us understand, you know, really the true differential between non-live and your other core products? Thank you.

Speaker Change: And the glass melting assets needed for that are going to remain that would be part of the core bones Corning going forward. So just to step back on our glass re enforces business and we had this announcement on Friday, it's 18 manufacturing facilities as part of that.

Speaker Change: So it is something that we can put a defined perimeter around that to answer your question on separating glass reinforcements from our nonwovens business. So that work is done so those 18 facilities roughly break out there there are nine on the glass reinforcements glass melting facilities.

Brian D. Chambers: All right, thanks, Kathleen. Yeah, just to clarify, so our announcement is around strategic alternatives for our glass reinforcements business. So our nonwovens business and the glass melting assets needed for that are going to remain. That will be part of the core of Owens Corning going forward. So just to step back on our glass reinforcements business, and we had this in the announcement on Friday, it's 18 manufacturing facilities as part of that. So it is something that we can put a defined perimeter around to answer your question about separating glass reinforcements from our nonwovens business. So that work is done.

Speaker Change: We've got about five five <unk>.

Speaker Change: Fabrics facilities that we fabrics that are used in wind energy applications and then we have four alloys facilities that will support the bushings and the equipment used in the melting of the glass jar plants. So thats a defined perimeter the perimeter to make our glass nonwovens is also defined so there are two glass melting facilities.

Speaker Change: That makes a fiber that is unique and special for our glass nonwovens production. So those two facilities would stay because that would then service the glass fiber to our nonwoven facilities. All those non woven facilities would stay so I think we can we can separate those and operate those independently as we think about all.

Brian D. Chambers: So those 18 facilities roughly break out their nine on the glass reinforcements, glass melting facilities. Then we've got about five; we have five fabric facilities that we weave fabrics that are used in wind energy applications. And then we have four alloy facilities that will support the bushings and the equipment used in the melting of the glass in our GR plant. So that's a defined perimeter. The perimeter to make our glass nonwovens is also defined.

Speaker Change: Turn it is for the glass reinforcements business.

Speaker Change: Terms of your question on how that might impact the other products from our glass.

Speaker Change: Nonwovens business, we're going to continue to be able to service all of the building construction material categories that I talked about earlier. So we'll have the ability to still provide that material to gypsum application sealing applications polyol. So flooring. So that's a part of the perimeter of the business that we're going to continue to operate in.

Brian D. Chambers: So there are two glass melting facilities that make the fiber that's unique and special for our glass nonwovens production. So those two facilities would stay because that would then supply the glass fiber to our nonwoven facilities. All those nonwoven facilities would stay, so I think we can separate those and operate those independently as we think about alternatives for the glass reinforcements business. In terms of your question on how that might impact the other products from a glass nonwovens business, we're gonna continue to be able to service all of the building construction material categories that I talked about earlier. So we'll have the ability to still provide that material for gypsum applications, ceiling applications, polyiso, and flooring. So that's a part of the perimeter of the business that we're gonna continue to operate, grow, and expand. Thank you very much.

Speaker Change: And grow and expand.

Speaker Change: Yeah.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you. The next question you guys to Susan <unk> of Goldman Sachs. Susan. Please go ahead. Your line is open.

Susan: Thank you good morning, everyone.

Susan: I wanted to switch to installation for a minute and talk about the margins there they've been running in a much narrower range relative to the historical patterns that we've usually seen on a seasonal basis and when you think about the <unk> guide and the outlook for housing it would imply that there was a similar trend for this year is.

Speaker Change: Well and so when you think about that segment long term and the operations and the work that you've done on the cost do you think that you can sustainably run those margins, perhaps a bit higher than that 15% long term guide that you gave at the last Investor day, and I guess, what are you waiting to see to have more confidence perhaps to revise that.

Susan Maklari: Thank you. The next question goes to Susan Maklari of Goldman Sachs. Susan, please go ahead; your line is open. Thank you. Good morning, everyone.

Todd Pfister: I wanted to switch to insulation for a minute and talk about the margins there. They've been running in a much narrower range relative to the historical patterns that we've usually seen on a seasonal basis. And when you think about the 1Q guide and the outlook for housing, it would imply that there's a similar trend for this year as well. And so when you think about that segment long term and the operations and the work that you've done on the cost, do you think that you can sustainably run those margins perhaps a bit higher than that 15% long-term guide that you gave at the last investor day? And I guess what you are waiting to see to have more confidence, perhaps to revise that? Sue, why don't I take that one?

Speaker Change: Let's see what why don't I take that one I appreciate the question and I'll cover a bit about why we're seeing this narrower range and what that could imply for for the future.

Speaker Change: The narrow range really is intentional we've rebuilt this business in order to have higher and more stable margins.

Speaker Change: Through the actions that we've taken and those actions include really significant actions on the network of the business, including the sale of a pretty high cost high fixed cost.

Speaker Change: In Santa Clara, but also actions we've taken in other plants to Debottleneck and drive more capacity out of our existing network, but it's also commercial choices that we've made around the channels that we focus on the customers that we focus on how.

Todd Pfister: I appreciate the question, and I'll cover a bit about why we're seeing this narrower range and what that could imply for the future. The narrow range really is intentional, you know; we've rebuilt this business in order to have higher and more stable margins through the actions that we've taken. And those actions include really significant actions on the network of the business, including the sale of a pretty high-cost, high fixed cost asset in Santa Clara, but also actions we've taken in other plants to de-bottleneck and drive more capacity out of our existing network. But it's also commercial choices that we've made around the channels that we focus on, the customers that we focus on, and how we structurally engineer a business that can have more stable margins over time.

Speaker Change: How we structurally engineered business second half more stable margins over over time.

Speaker Change: We shared at Investor Day, a few years ago as you alluded to.

Speaker Change: The thought that we did have structural margin improvement embedded in the business, we have not updated that yet.

Speaker Change: But that is something we talked through around margin expectations for the business.

Speaker Change: When the time is right you can anticipate us.

Speaker Change: I'm talking more about what we see long term is the new margins for installation.

Speaker Change: Your guide for the first quarter.

Speaker Change: You read is correct I mean, it is more margin stability in part because as Brian said, where.

Todd Pfister: You know, we shared at Investor Day a few years ago, as you alluded to the thought that we did have structural margin improvement embedded in the business. We have not updated that yet, but that is something we talk through around margin expectations for the business. And when the time is right, you know, you could anticipate us talking more about what we see long-term as the new margins for insulation. You know, I think your guide for the first quarter is correct.

Speaker Change: We continue to run our assets are fairly full across our network, we continue to see stable.

Speaker Change: Market conditions, we are still.

Speaker Change: In markets, where volume is down in Europe, and in Asia and in some pockets in North America. So we feel pretty confident as we as we go forward. If we see that volume return in Europe, and in Asia and North America.

Todd Pfister: I mean, it is more margin stability in part because, as Brian said, we're, you know, we continue to run our assets fairly full across our network. We continue to see stable market conditions. We are still in markets where volume is down in Europe and in Asia and in some pockets in North America.

Speaker Change: We've got some ability to drive earnings upside even versus what we achieved in 2023 on the business. So we have to see the macro conditions improve but we think we've we've engineered the segment to.

Todd Pfister: So, you know, we feel pretty confident as we go forward. If we see that volume return in Europe and in Asia and North America, we've got some ability to drive earnings upside even versus what we achieved in 2023 on the business. So we have to see macro conditions improve, but we think we've engineered the segment to deliver, you know, more consistent and higher margins over, you know, longer periods of time. Thank you, and the next question goes to Truman Patterson of Wolf Research. Truman, please go ahead. Your line is open. Hi, this is Trevor Allenson on behalf of Truman.

Speaker Change: To deliver.

Speaker Change: More consistent and higher margins over longer periods of time.

Speaker Change: Okay.

Speaker Change: Thank you and the next question Treme minute Pack Center of Wolfe Research. Please go ahead. Your line is open.

Speaker Change: Hi, This is Trevor allinson on for trim and thank you for taking my question I wanted to touch first on input cost in composites and insulation, specifically around energy. It didn't seem like input costs had a significant impact on operating profit in the quarter for those two segments.

Trevor Allinson: You've taken a lot of energy inflation in the last couple of years. I think you had mentioned previously that peak energy for you guys was around mid 2022, so even with your hedges, we would have thought you'd be seeing some more of that here coming through in the form of deflation. So are you seeing other input cost offset that or why are you not seeing more of those energy benefits coming.

Truman Patterson: Thank you for taking my question. I wanted to touch first on input cost in composites and insulation, specifically around energy. It didn't seem like input cost had a significant impact on operating profit in the quarter for those two segments. Let me tackle that one on our hedging policy, and then we can talk a bit about the pockets of inflation.

Trevor Allinson: Thanks.

Speaker Change: So let me tackle that one on our hedging policy and then we could talk a bit about the pockets of inflation. So you're right I mean, we hedge on a five quarter rolling basis.

Todd Pfister: I mean, we hedge on a five-quarter rolling basis. The last of our higher cost hedges really roll off in the first quarter of this year, in 24. So we still had some of those hedges in place, you know, even in Q3, Q4 last year. We are seeing some input cost inflation, some of the later cycle input materials that we use in different parts of our process that are tempering some of the benefits that we would otherwise see from energy. You know, energy, certainly structurally, is a good news story for us as we get into 24.

Trevor Allinson: The last of our higher cost hedges really roll off in the first quarter of this year and 24. So we still had some of those hedges in place.

Trevor Allinson: Even in Q3 Q4 last year.

Trevor Allinson: We are seeing some input cost inflation some of the later cycle.

Trevor Allinson: Input materials that we use in different parts of our process that are temporary in some of the benefits that we would otherwise see from from energy.

Trevor Allinson: Energy certainly structurally is a.

Trevor Allinson: A good news story for us as we get into 'twenty four but there are pockets of inflation on some chemicals on some input materials that we continue to see on on our businesses.

Todd Pfister: But there are pockets of inflation on some chemicals, on some input materials that we continue to see in our businesses, and we continue to work through those. So it's a bit of a combination of those two that drove the results in the quarter. Thank you.

Trevor Allinson: We continue to work through those so it's a bit of a combination of those two that drove the results in the quarter.

Philip Ng: The next question goes to Philip Ng of Jeffreys. Philip, please go ahead; your line is open. Hey guys.

Speaker Change: Thank you. The next question Daiichi Senate and of Jefferies. Please go ahead. Your line is open.

Daiichi Senate: Hey, guys for <unk>, I believe you're guiding to low to mid teen declines in your composite business can you help us unpack the components for volume mix versus price and then appreciate the margins in composites tends to be a little lumpier and there's a fair amount of seasonality do you see <unk> trough margins and you kind of build off.

Brian D. Chambers: For 1Q, I believe you're guiding the low to mid-teen declines in your composite business. Can you help us unpack the components for volume mix versus price? And then appreciating margins in composites tend to be a little lumpier, and there's a fair amount of seasonality. Do you see 1Q as trough margins, and you kind of build off that for the full year for composites? Yeah, thanks

Daiichi Senate: With that for the full year for composites.

Speaker Change: Yes, thanks, Phil So, let's talk a little bit about price and mix and maybe I'll talk pricing.

Brian D. Chambers: So, let's talk a little bit about price and mix. So maybe I'll talk about pricing. I mentioned this a little bit in our Q1 guide.

Speaker Change: I mentioned this a little bit in our Q1 guide so overall for our glass reinforcements business.

Brian D. Chambers: So overall, for our glass reinforcements business, just as a reminder, it's about two thirds contract, about one third spot. And we have largely completed our contract pricing. And that is going to result in pricing stepping down. Overall, with that completion, we would expect probably mid single-digit price declines that would roll through in the quarter and continue as we go forward as a result of those contract negotiations. From a price, from a spot pricing standpoint, we're actually seeing some stability, Q4 into Q1. And so Q1 spot pricing, on a year over year basis, probably down probably closer to the high single digits. So a big part of that step down versus price on mix is going to be price related. But we are seeing some headwinds on overall product mix, just depending on the geographic makeup of the business overall. In terms of the mid single-digit margins for composites, how that moves up from here, you know, I do think it is generally a low point in terms of volume in the business.

Speaker Change: As a reminder, it's about two thirds contract about one third spot.

Speaker Change: And we have largely completed our contract pricing and that is going to result with pricing stepping down.

Speaker Change: Overall, our with that completion, we would expect probably mid single digit price declines.

Speaker Change: That would roll through in the quarter and continue as we go forward as a result of those those contract negotiations from a price from a spot pricing standpoint, we're actually seeing some stability Q4 into Q1.

Speaker Change: And so Q1 spot pricing on a year over year basis down probably closer to high single digits.

Speaker Change: A big part of that step down versus price on mix is going to be price related but we are seeing some headwinds on an overall product mix just depending on the geographic makeup of the business overall.

Speaker Change: In terms of the mid single digit margins for deposits, how that moves up from here.

Speaker Change: Do think it is generally a low point in terms of volume in the business and Thats something that we would expect as we go through over the next few quarters to see volumes increase and that will improve our operating leverage quite a bit. We also have taken a number of cost reduction actions in the business and that should start coming through.

Brian D. Chambers: And that's something that we would expect as we go through the next few quarters to see volumes increase, and that will improve our operating leverage quite a bit. We also have taken a number of cost reduction actions in the business, and that should start coming through. And lastly, we've seen really good manufacturing productivity start to come through. And we think that's going to be additive as we go on from here.

Speaker Change: And lastly, we've seen really good manufacturing productivity start to come through and we think that's going to be additive as we go through from here. So as we step up over the next few quarters, we would expect to see some volume growth improving our operating leverage you would expect to see some of the benefits from our cost reduction actions and we continue to expect to see productivity.

Brian D. Chambers: So as we step up over the next few quarters, we'd expect to see some volume growth, improving our operating leverage, and you would expect to see some of the benefits from our cost reduction actions. And we continue to expect productivity to be an uplift to margins as we go through the rest of the year. Thank you. The next question goes to Mike Dahl of RBC. Mike, please go ahead; your line is open. Hi, thanks for taking my questions.

Speaker Change: <unk> be an uplift to margins as we go through the rest of the year.

Speaker Change: Yeah.

Speaker Change: Thank you. The next question, Mike Dahl RBC Mike. Please go ahead your line is open.

Mike Dahl: Alright, Thanks for taking my questions back on roofing, just given the moving pieces between.

Mike Dahl: Back on roofing, just given the moving pieces between your comp differential and the business you exited, can you be more specific about what your volume expectation is for your single performance in one cue? And then, when we think about the full year. You know, in addition to inventory dynamics last year, there were some regional differentials that may kind of reverse out this year. So when you think about the moving pieces around your comps, kind of beating the industry in one quarter, then trailing the industry, the last few quarters going into this year, kind of how, like Steve kind of asked around this, but how would you expect to perform versus ARMA for the full year? Thanks, Mike.

Mike Dahl: Your comp differential in the business that you exited can you be more specific about what your volume expectation is for your single performance in <unk> and then when we think about the.

Mike Dahl: The full year.

Mike Dahl: In addition to inventory dynamics last year, there were some regional differentials.

Mike Dahl: That may kind of reversed out this year. So when you think about the moving pieces around your comps kind of beating the industry and <unk> then trailing the industry.

Mike Dahl: The last few quarters going into this year.

Mike Dahl: Steve kind of asked around this but how you would expect to perform versus arm for the full year.

Steve: Thanks, Mike So in terms of volumes in roofing and components, we expect those to be up.

Brian D. Chambers: So in terms of volumes in roofing and components, you know, we expect those to be up modestly, I think, in the quarter. And we do see the ability to produce more shingles, more than in the first quarter of last year. We also are seeing higher attachment rates on our roofing component materials that we think will continue. But again, against last year's comp, that growth rate is going to be much more moderate than we expect the overall industry to show because we were outperforming in Q4 of last year. But we are going to see some increases. And then again, we see a little bit of headwind on the packing exit.

Mike Dahl: Modest Lee I think in the quarter. So we do see the ability to produce more shingles and ship more than first quarter of last year, where we also are seeing higher attachment rates on our roofing component materials that we think continues but again against last year's comp that growth rate is going to be much more moderate than we expect the overall industry to share.

Mike Dahl: So because we are outperforming in Q4 of last year, but we are going to see some increases and then again, we see a little bit of headwind on the.

Steve: Packaging exit in terms of performance as we go through the year I would say, we expect that we're going to have another good year in roofing.

Brian D. Chambers: In terms of performance as we go through the year, I'd say we expect that we're going to have another good year in roofing. The demand trends for Q1, a storm carryover, the underlying contract demand, and the remodeling and re-roof activity we're seeing in our contractor base would lead us to believe we're on the path for another strong year. We expect, as Todd talked about, new construction housing to step up through the year, a smaller part of the roofing business, but again, another positive demand driver. So we would expect that to continue. It may not be operating at the same levels as last year, which was a historically high storm year off a 10-year average.

Steve: The demand trends for Q1 storm carryover, the underlying contracted demand and remodeling.

Steve: Re roof activity, we're seeing in our contracted base would lead us to believe we're on path for another strong year, we expect as Todd talked about new construction housing to the step up through the year, a smaller part of the roofing business, but again another positive demand drivers. So we would expect that to continue it may not be operating at the same levels as last year, which was a historically.

Steve: Hi storm year.

Brian D. Chambers: We would estimate, you know, probably an incremental 40% growth in storm demand last year versus the historic average. So if that steps back a little bit, I think that gives us opportunities in the market to continue to grow our business. So as we progress through the year, I would think we would get into easier comps on a year-over-year basis relative to our performance. And then if the market slows a bit versus the prior year, again, I'll go back to what we saw in Q4 of 22 and Q1 of last year. As the market slowed, demand for our product stayed really strong, and distributors had to replenish their inventories of our product. Contractors demanded our product, and we saw good growth and a good share position as a result. Thank you, and our final question goes to Garik Shmois of Loop Capital. It appears Garik has disconnected. We'll move over to Anthony Petronari of City.

Steve: 10 year average we would estimate.

Steve: Incremental 40% both in storm.

Steve: Manned last year versus the historic average so.

Mike Dahl: If that steps back a little bit I think that gives us opportunities in the market to continue to grow our business. So as we progress through the year I would think we would get into easier comps on a year over year basis relative to our performance and then if the if the market slows a bit versus prior year again I'll go back to what we saw in Q4 of <unk>.

Mike Dahl: Two in Q1 of last year as the market slowed demand for our product stayed really strong distributors had to replenish their inventories of our product contractors demand at our product and we saw good growth and a good share position as a result.

Mike Dahl: Yes.

Mike Dahl: Thank you and our final question Garik <unk> of late the capital.

Mike Dahl: Well it pays Garrett has disconnected.

Mike Dahl: Over to Anthony Pettinari of Citi. Please go ahead your line is open.

Garik Shmois: Anthony, please go ahead; your line is open. Hi, I just had a quick follow-up on insulation and 1Q. I think single family starts inflected positively on a year over year basis from 3Q. So I'm just wondering if you could talk about sort of the cadence of North American resi insulation shipments as 4Q progressed and into 1Q, you know, assuming demand, you know, tends to lag starts by three months. You know, could North American Resi insulation volumes potentially be positive year-over-year as you lap these easier comps? I think you talked about flattish, but just any more context there. Sure, thanks, Anthony. Yeah, I mean, as we look at starts for the first quarter, you know, we said relatively flattish. I mean, could we be up a little versus that? You know, absolutely. It could be modest, but we're talking about very, very low single-digit numbers.

Anthony Pettinari: Hi, I just had a quick follow up on installation and <unk>.

Anthony Pettinari: Single family starts inflicted positively on a year over year basis in <unk>. So I'm just wondering if you could talk about sort of the cadence of North American resi installation shipments as <unk> progressed and into one Q assuming demand tends to lag starts by three months.

Anthony Pettinari: North American resi insulation volumes potentially be positive year over year as you lap. These easier comps I think you talked about flattish, but just any more context there.

Speaker Change: Sure. Thanks Anthony.

Speaker Change: I mean, as we look at starts for for the first quarter.

Speaker Change: We said relatively flattish I mean could we be up a little versus that absolutely. It could be modestly, but we're talking very very low single digit type of numbers. We think flat is is a more appropriate number.

Anthony Petronari: You know, we think flat is a more appropriate number. As we look at the full year, I think consensus has started looking pretty similar on a year-over-year basis. So we pick up a bit in single-family, which is a strength. Multifamily could be down a little bit on a year-over-year basis, but overall, it ends up looking, you know, pretty similar to 23.

Speaker Change: As we look at the full year.

Speaker Change: Consensus has starts looking pretty similar on a year over year basis, So we pick up a bit and single family.

Speaker Change: On a year over year basis, as strength multifamily could be down a little bit on a year over year basis, but overall it ends up looking.

Speaker Change: Similar to 'twenty three.

Yeah, so as we look at the first quarter, we would expect, you know, sort of flattish overall results for volumes at rest. Thank you, that's all the questions that we have time for today. I'll now hand the call over to Brian Chambers to close. Well, I'd like to thank everyone for making time to join us on today's call and for your ongoing interest in Owens Corning, and we look forward to speaking with you again on our first quarter call. Thank you, this now concludes today's call. Thank you all for joining us; you may now disconnect your lines.

Speaker Change: So as we look at the first quarter, we would expect sort of flattish overall results for volumes at rest.

Speaker Change: Yeah.

Speaker Change: Thank you that's all the questions that we have time for today I'll now hand back to cool Aver, Chief Brian Chambers to case.

Brian D. Chambers: Well I'd like to thank everyone for making time to join US on today's call and for your ongoing interest in Owens Corning and we look forward to speaking with you again on our first quarter call. Thanks, everyone.

Brian D. Chambers: Yeah.

Speaker Change: Thank you. This now concludes today's call. Thank you for joining you may now disconnect your lines.

Brian D. Chambers: Yeah.

Brian D. Chambers: Okay.

Brian D. Chambers: Yes.

Brian D. Chambers: Yeah.

Brian D. Chambers: Yeah.

Brian D. Chambers: Okay.

Brian D. Chambers: Okay.

Brian D. Chambers: Thanks.

Brian D. Chambers: Yes.

Brian D. Chambers: Yes.

Brian D. Chambers: Okay.

Brian D. Chambers: Okay.

Brian D. Chambers: Okay.

Brian D. Chambers: Yes.

Brian D. Chambers: Yes.

Brian D. Chambers: Okay.

Brian D. Chambers: Okay.

Brian D. Chambers: Yes.

Brian D. Chambers: Okay.

Brian D. Chambers: Yes.

Brian D. Chambers: Yes.

Brian D. Chambers: Okay.

Brian D. Chambers: Okay.

Brian D. Chambers: Okay.

Brian D. Chambers: Yes.

Brian D. Chambers: Okay.

Brian D. Chambers: Yes.

Brian D. Chambers: Yes.