Company: OC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001370946-25-000241
Chunk: 73

Company: Owens Corning
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 73
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 impairment charge, equal to the excess of the Doors reporting unit's carrying value over its fair value, in the third quarter of 2025. This charge was recorded in Goodwill impairment charge on the Consolidated Statement of Earnings, and was included in the Corporate, Other and Eliminations reporting category. The reduction in fair value for the Doors reporting unit, and corresponding impairment charge, was primarily driven by a decrease in near-term revenue, including 2026, as a result of the macroeconomic uncertainty.

The most significant assumptions used in the fair value analysis were base year revenue, revenue growth rate, long-term growth rate, adjusted EBITDA margins, discount rate and market multiples under the market approach.

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Table of ContentsITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

If all other assumptions remain constant, a 1% decrease in the base year revenue would decrease the fair value by approximately 1%, a 1% decrease in the revenue growth rates would decrease the fair value by approximately 4%, a 1% decrease in the long-term growth rate would decrease the fair value by approximately 3%, a 0.5% decrease in forecasted adjusted EBITDA margins would decrease the fair value by approximately 4%, a 0.5% increase in the selected discount rate of 11.5% would decrease the fair value by approximately 3%, and a decrease of 1 in the selected market multiples under the market approach would decrease the fair value by approximately 5%.

The remaining balance of goodwill for the Doors reporting unit of $732 million as of September, 30, 2025 continues to be at risk for future impairment. Continued uncertainty surrounding the macroeconomic factors impacting this reporting unit or changes in the significant assumptions mentioned above, could increase the likelihood of an additional future impairment.

Also, in the third quarter of 2025, we performed an interim impairment test for an indefinite-lived tradename used by our Doors reporting unit, based on the macroeconomic conditions that precipitated the interim goodwill impairment test described above. As a result of this test, we determined that no impairment existed for the tradename.

Fair value used in testing for potential impairment of our tradename was calculated using the relief-from-royalty method by applying an estimated market value royalty rate to the forecasted revenues of the businesses that utilize that asset. The assumed cash flows from this calculation are discounted at a rate based on a market participant discount rate. None of