INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Income before Income Tax, Domestic and Foreign

The following table summarizes our Earnings before taxes and Income tax expense:


	Twelve Months Ended December 31,
(In millions)	2025		2024		2023
Earnings before taxes:
United States	$	(138)	$	1,259	$	1,250
Foreign	242		16		172
Total	$	104	$	1,275	$	1,422

Schedule of Components of Income Tax Expense (Benefit), By Jurisdiction


	Twelve Months Ended December 31,
(In millions)	2025		2024		2023
Income tax expense:
Current
Federal	$	144	$	206	$	269
State and local	38		37		50
Foreign	84		80		56
Total current	266		323		375
Deferred
Federal	44		49		(3)
State and local	(7)		3		5
Foreign	(10)		(41)		(13)
Total deferred	27		11		(11)
Total income tax expense	$	293	$	334	$	364

Schedule of Effective Income Tax Rate Reconciliation

The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company's effective rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09:


	Twelve Months Ended December 31,
(In millions)	2025
United states federal statutory income tax rate	$	22	21	%
Domestic state and local income tax, net of federal income tax effect (a)	32		31
Foreign tax effects	22		21
Effects of cross-border tax law:
Subpart F	9		9
Other	(7)		(7)
Non-taxable or non-deductible items:
Non-deductible goodwill impairment	223		214
Other	(3)		(3)
Other	(5)		(4)
Effective tax rate	$	293	282	%

(a)State and Local Taxes in California, Florida, Illinois, Texas, Minnesota and Toledo, OH made up the majority (greater than 50 percent) of the tax effect in this category.

The following table is a reconciliation of the United States federal statutory rate of 21% to the Company's effective rate for the years ended December 31, 2024 and December 31, 2023 in accordance with the guidance prior to the adoption of ASU 2023-09:


	Twelve Months Ended December 31,
(In millions)	2024		2023
United States federal statutory rate	21	%	21	%
State and local income taxes, net of federal tax benefit	3		4




Valuation allowance	2		—





UTP/Audit and Provision to Return	(2)		—
Other, net	2		1
Effective tax rate	26	%	26	%

Schedule of Deferred Tax Assets and Liabilities

The cumulative temporary differences giving rise to the deferred tax assets and liabilities are as follows:


	Twelve Months Ended December 31,
(In millions)	2025		2024
Deferred Tax Assets
Other employee benefits	$	47	$	48
Operating carryforwards	95		77
Capitalized R&D	43		74
Lease - liabilities	153		134
Tax credits	56		57
Interest limitation	36		32
Loss from discontinued operations	42		—
Other	103		107



Subtotal	575		529
Less: Valuation allowances	(127)		(117)
Total deferred tax assets	$	448	$	412
Deferred Tax Liabilities



Depreciation	$	(538)	$	(462)

Leases - right of use assets	(147)		(134)

Amortization	(489)		(529)



Total deferred tax liabilities	(1,174)		(1,125)
Total Net Deferred Tax Liabilities	$	(726)	$	(713)

Summary of Operating Loss and Tax Credit Carryforwards

The following table summarizes the amount and expiration dates of our deferred tax assets related to operating loss and tax credit carryforwards and foreign tax credit carryforwards at December 31, 2025:


(In millions)	Expiration Dates	Amounts
Domestic loss and tax credit carryforwards (a)	2026 - 2043	$	111

Foreign loss and tax credit carryforwards (b)	2026 - Indefinite	40




Total loss and tax credit carryforwards		$	151

(a)The use of certain of the Company's domestic loss carryforwards is limited pursuant to Internal Revenue Code (IRC) Section 382. IRC Section 382 imposes an annual limitation on a corporation's ability to use loss carryforwards that arose before a change in control. A change in control is generally defined as a cumulative change of more than 50% in the ownership positions of certain stockholders during a rolling three-year period. The Company believes that these limitations will not result in the loss of any of the loss carryforwards.

(b)The foreign net operating losses ("NOLs") are related to various jurisdictions that provide for both indefinite carryforward periods and others with carryforward periods that range from the tax years 2026 to 2036.

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:


	Twelve Months Ended December 31,
(In millions)	2025		2024		2023
Balance at beginning of period	$	26	$	66	$	67
Tax positions related to the current year
Gross additions	1		—		—
Tax positions related to prior years
Gross additions	9		—		—

Additions from Acquisitions	—		7		—

Expiration of statute of limitations	(7)		(47)		(1)

Balance at end of period	$	29	$	26	$	66

Summary of Valuation Allowance

The following is a rollforward of the valuation allowances for deferred taxes:


	December 31,
(In millions)	2025		2024		2023
Balance at beginning of period	$	117	$	102	$	97
Additions charged to expense	5		13		5
Additions charged to other	5		—		2
Deductions	—		(1)		(2)
Acquisitions and divestitures	—		3		—
Balance at end of period	$	127	$	117	$	102

Schedule of Cash Flow, Supplemental Disclosures

The amount of income taxes paid (net of refunds received) by the Company for the year ended December 31, 2025 — including amounts related to discontinued operations—is summarized below. Income taxes paid (net of refunds) in each of the jurisdictions presented exceeded 5 percent of the Company’s total income taxes paid (net of refunds) for the year.


	Twelve Months Ended December 31,
(In millions)	2025
Federal	$	131
State	34
Foreign
Canada	18
Mexico	38
Other	43
Total foreign	99
Total	$	264

Certain cash and non-cash transactions were as follows for the periods indicated:


	Twelve Months Ended December 31,
(In millions)	2025		2024		2023
Transactions involving cash:
Cash paid during the year for income taxes	$	264	$	423	$	428
Cash paid during the year for interest	$	271	$	226	$	135
Cash paid for operating leases	$	120	$	102	$	76
Cash paid for finance leases for financing activities	$	45	$	41	$	33
Cash paid for finance leases for operating activities	$	17	$	10	$	6
Non-cash transactions from operating activities
Right-of-use assets acquired under operating leases	$	223	$	84	$	104
Right-of-use assets acquired under finance leases	$	85	$	196	$	61

The following reconciles total cash, cash equivalents and restricted cash as of the dates indicated:


	December 31,
(In millions)	2025		2024		2023
Cash and cash equivalents from continuing operations	$	345	$	321	$	1,560
Restricted cash from continuing operations	8		8		8
Cash, cash equivalents and restricted cash from discontinued operations	54		40		55
Total cash, cash equivalents and restricted cash	$	407	$	369	$	1,623

Owens Corning 10-K