Hello, everyone, and welcome to the Owens Corning Q4 and Full Year 2023 Earnings Call. My name is Seth, and I'll be the operator for your call today. [Operator Instructions] I will now hand the floor over to Amber Wohlfarth 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 Chair and Chief Executive Officer; and Todd Fister, our Chief Financial Officer. Following our presentation this morning, we will open this 1 hour call to your questions. 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 we'll 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. 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. Please reference 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. Second, the presentation slides and 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 4. And now opening remarks from our Chair and CEO, Brian Chambers. Brian?

Thanks, Amber. Good morning, everyone, and thank you for joining us today. During our call this morning, I will begin with an overview of our results for the quarter and full year, including some of the key drivers of our high performance. Next, I will 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 are seeing in our markets and our outlook for the first quarter. 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. We continue to deliver world class safety performance in 2023. During the fourth quarter, we achieved a recordable incident rate of .4, which was our best quarterly performance in over a decade. Our full year 2023 RIR rate was .6, which is top quartile performance for the U.S manufacturing sector. 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 prior year, we were able to expand our adjusted EBIT margins to…

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. I'd now like to turn to Slide 5, to discuss the results for the fourth quarter and full year. 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 prior year. 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. 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 and reported EBIT. For the year, adjusting items totaled approximately $138 million and are excluded from our full year adjusted EBIT. They primarily include $169 million of charges associated with our ongoing cost optimization and product line rationalization actions. A $189 million gain on sale of our Santa Clara facility and $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 7, 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 and working capital…

Thank you, Todd. 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 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 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. 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. Now consistent with prior calls, I'll provide a more detailed business specific outlook for the first quarter. Starting with our Roofing business, we anticipate revenues will be up low single digits in the quarter. Based on the strength of the market and storm carryover demand, we expect ARMA market shipments could be up approximately 20% versus prior year, but would anticipate our volumes to trail ARMA 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 of our protective packaging business within components. 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. We expect to realize…

[Operator Instructions] The first question comes from Joe Ahlersmeyer from Deutsche Bank. Please go ahead.

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

Thanks, 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 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. Our Roofing team has just done an incredible work to strengthen the performance of our Roofing business, and you saw that in 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 that 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 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. 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 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 around the -- is one around our operating efficiencies overall and 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 are getting great efficiencies out of our production lines 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 are 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 to India. I've talked about the exit of our packaging business. So we continue to look at manufacturing optimization, plan optimization efforts. 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 business. So we continue to increase the products we can bring to market. And this is tied to our multi-material system sell around roofing, where hip and ridge, starter, ventilation products, all the pieces and parts to install a roof we can now provide and those increase our mix. Those are high margin products. So the expansion of that business has also added to the durability of our overall margin. So that kind of combined with now a strong market where we are seeing higher volumes that are giving us overall operating leverage good pricing environment. That's really led to the strength of the earnings that we are 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.

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

Yes. Thanks very much guys. I just wanted to follow-up on Joe's question actually regarding Roofing. Appreciate the long-term guide and that explanation as well. But from a volume perspective, this year was a surprisingly strong year. You chose to focus on debottlenecking efforts as opposed to expanding capacity in a more overt manner. And so as a result, you lost a little bit of share. As you look into 2024, if the 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 like 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 competitors increase capacity and so forth. It doesn't sound like you're sort of like announcing any new capacity expansion in Insulation. And 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've -- that you have?

Yes. Thanks, Stephen. Let me take these -- some of these pieces, and I may ask Todd to comment as well. So let me first talk about, I guess, the decision around debottlenecking 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 debottleneck, to improve line speeds and to increase capacity. And this is something that we talked about a few years ago. You would have heard Gunner speak to around opening up capacity inside our existing network in a very efficient way. And so we've been doing that. So year-on-year, in '22, we produced a lot more laminates than we did in '21. We did that again last year. We are going to continue to do that. And then we did announce a new laminator that we're adding in our Medina facility that will come onstream mid next year, and that will be another big capacity improvement. So year-on-year, we are producing significantly more laminates, and the total that I would share with you roughly equates to a new four-wide [ph] laminator when we're done with that work by the end of 2025. So over a 3-year time period, we've effectively added laminate capacity to equate to a four-wide [ph] 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 onstream. 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 in Q4, Q1, I will take us back to in Q4 of last year, 2020 -- sorry, Q4 2022 and Q1 of last year, we significantly outperformed the market. And I think that's 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. And we saw that result in an outperformance to ARMA shipments in Q4 of '22 and outperformance in Q1 of this year. And on balance through 2023, we finished the share -- or with a share position pretty consistent with our historical average. So while we are investing for growth, we are investing to add lam 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 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 in doing that going forward. So in Insulation, maybe, Todd, I'll have you comment on that.

Sure, Brian, and Stephen, thanks for the question. So I mean, if we step back a few years as to what we were trying to accomplish in Insulation, 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, but we also drive a higher return on capital. I mean that was our thesis the last few years. And in some ways, it is similar to Roofing in that the -- for Insulation, the highest return, the highest margin new capacity we had is 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. [Technical difficulty] always evaluating the market conditions. We were always looking at the future state of our business and assessing whether or not there's a right time to add capacity in the business. What I would say right now is we are very happy with our current share positions, and we are very happy with the customer and channel mix that we have in the business, and we are also very happy with the margin stability. We were able to drive in 2023 in what was down market overall for residential housing in North America.

The next question comes from Michael Rehaut from JPMorgan. Please go ahead.

Thanks. Good morning, everyone and congrats on the results. I wanted to just circle back to the Roofing and asphalt long-term guide. Not to beat a dead horse, but I think it's -- obviously, it's an encouraging statement when you talk about kind of re-rating your -- or increasing your long-term margin targets around that business. And, Brian, you kind of talked about the big driver being the structural operational improvement, manufacturing efficiencies, et cetera. I was wondering that you also kind of highlighted the improved piece of the components business. And I would assume over the last 2 or 3 years, there's been some positive price in the business as well. So I was hoping 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% to 25%. Would it be predominantly the 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?

Yes. 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 20% to 25-ish, in the 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 are 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 in the shingle side and on the component side that we think is sustainable going forward. And then the overall just value we're bringing, I think, to our contractors as we help them build their businesses. 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, a value we are bringing to a distributor with high-quality products, serviced well and the value to the innovation we are bringing in terms of the new product offering. So it gets mixed into that in terms of the commercial capabilities. But I think the durability of this is really going to be on those primary two. We could also pick up 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's always a bit of upside when we get stronger market conditions that we've seen now 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 continues as we go forward.

Our next question comes from Sam Reid at Wells Fargo. Please go ahead.

Awesome. Thanks guys. So wanted to drill down a bit more on Composite margins and perhaps break out how those looked for glass reinforcements versus say nonwoven. 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 probably had the opportunity to have perhaps a few more conversations post last week's announcement? Thanks.

Thanks. Let me start with just an overview kind of on Composites on the reinforcements and then glass reinforcements margin. So we said when we announced this, the glass reinforcements business is about $1.3 billion of the $2.3 billion roughly. So the rest of that you can safely assume is tied to our kind of a nonwovens business, our structural lumber business we talked about. And we said that the EBITDA margins in the business were relatively similar over time on this space. Now I would say that the margins in our GR business certainly have been more pressured in 2023 relative to our nonwovens business. And so if I just take a step back a little bit more in 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 out our capabilities. So it's been key to our Roofing success. We have a vertically integrated model, where we make the hybrid, we make the mat. 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 nonwoven materials to other roofing manufacturers as well as other building and construction material. So it's an important input material around gypsum, for facer [ph], for polyiso board for commercial roofing applications, in ceiling applications, particularly in Europe, and then in flooring applications. So it really fits well into our building and construction folks and supports our drive to increase in 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. So I think it fits our geographic footprint. So the…

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

Good morning guys. Thank you for taking my question. I guess it is -- when you talk about near-term Roofing margins exceeding that mid 20% range, is that a 1Q 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. If we got that right, what might be driving that? Thanks.

So let me -- I'll start and then I'll ask for a clarifying question on your revenue base. But I'd say on the long-term guide, we certainly guide a quarter at a time. So we've given that guide in the first quarter. But given my comments on the Roofing business overall, we think the first half of the year is going to be very strong. There's a lot of pent-up demand in terms of carryover from storm activity that we see driving really good demand. And again, in that strong of a market, we would expect our margins to perform at a higher level than the mid 20% on average. That was our guide. So I wouldn't say that is a 1 quarter only guide in terms of a higher outlook. I think that could continue as we go into the year on Roofing. And then I just want to maybe a clarifying question on your Roofing revenue question. Was that versus fourth quarter or year-on-year?

Quarter-over-quarter, sorry.

Quarter-over-quarter, yes. 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 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 a headwind for the exit of our packaging business, and that's about $100 million of revenue, and that's pretty ratably 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. Thank you for taking the question. 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 you just kind of remind us, what was the margin impact from some of the downtime you took? And then kind of as you're seeing that -- you're calling for volumes to improve in Roofing and 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.

Yes. Overall, I'd say the downtime we took in Q4 was really spread across all the businesses. In Composites, particularly GR, it was tied more to demand balancing and inventory management. I'd say the other parts of the company, we generally take fourth quarter maintenance downtimes to service the assets, and we did that throughout in the space. So we don’t quantify 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 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, Roofing, every facility is 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. Again, we've got those assets up and running and producing at a high-level. Our nonwovens business were 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, drive good cash flows in that business. But in our Roofing business, our Residential Insulation business, we are 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 Thompson Research Group. Please go ahead.

Hi. Thank you for taking my question today. This is more focused on your Composite business. And just understanding more on the production level and as you contemplate selling your nonwovens business, we just note from our experience in going to plants is you can have different types of products produced -- Composite products produced within a plant. Could you clarify to what extent that you're able to nonwoven production versus other products on a single plant basis? So really just helping us understand how clean that should be. And then -- and also, along that line, clearly, I understand there's different types of nonwoven versus other products. But are there any other cross-selling or other opportunities that maybe lost from selling it? Or just helping us to understand really the true differential between nonwoven and your other core products. Thank you.

Right. Thanks, Kathryn. Yes, 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 would 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, on separating glass reinforcements from our nonwovens business. So that work is done. So those 18 facilities roughly break out. There are 9 on the glass reinforcements, glass melting facilities. Then we've got about 5 -- we have 5 fabrics facilities that we weave fabrics that are used in wind energy applications. And then we have 4 alloy facilities that will support the bushings and the equipment used in the melting of the glass on our GR plants. So that's a defined perimeter. The perimeter to make our glass moments is also defined. So there are 2 glass melting facilities that make the fiber that's unique and special for our glass nonwovens production. So those 2 facilities would stay because that would then service the glass fiber to our nonwoven facilities. All those nonwoven facilities would stay. So I think we can separate that 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 are 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 applications, ceiling applications, polyiso, flooring. So that's a part of the permit of the business that we are going to continue to operate and grow and expand.

Great. Thank you very much.

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. 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 are you waiting to see to have more confidence perhaps to revise that?

Sue, why don't I take that one? I appreciate the question. And I'll cover a bit about why we are seeing this narrower range and what that could imply for the future. The narrow range really is intentional. 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 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 we structurally engineer a business that can have more stable margins over time. 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 could anticipate us talking more about what we see long-term as the new margins for Insulation. I think your guide for the first quarter, your read is correct. I mean it is more margin stability, in part, because as Brian said, we are -- 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. So 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 the macro conditions improve, but we think we've engineered the segment to deliver more consistent and higher margins over longer periods of time.

Thank you. And the next question goes to Truman Patterson of Wolfe Research. Truman, please go ahead. Your line is open.

Hi. This is Trevor Allinson on for Truman. Thank you for taking my question. I wanted to touch first on input costs 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. You've taken on 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 costs offset that? Or why are you not seeing more of those energy benefits coming through? Thanks.

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. 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 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. Energy, certainly structurally, is a good news story for us as we get into '24. But there are pockets of inflation on some chemicals, on some input materials that we continue to see on 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. The next question goes to Philip Ng of Jefferies. Philip, please go ahead. Your line is open.

Hey, guys. 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 Composite tends 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?

Yes. Thanks, Phil. So let's talk a little bit about price and mix. So -- and maybe I'll talk pricing. I mentioned this a little bit in our Q1 guide. So overall, for our glass reinforcements business, just as a reminder, it's about two-thirds contract, about one-third is spot. And we have largely completed our contract pricing, and that is going to result with pricing stepping down. Overall, our -- 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 are actually seeing some stability Q4 into Q1. And so Q1 spot pricing on a year-over-year basis, down probably closer to 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, I do think it's generally a low point in terms of volume in the business. And that's 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. 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. We would expect to see some of the benefits from our cost reduction actions, and we continue to expect to see productivity being 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. 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 shingle performance in 1Q? And then when we think about the full year, there -- 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 1Q then trailing the industry the last few quarters going into this year, kind of how -- I think Steve kind of asked around this, but how you would expect to perform versus ARMA for the full year?

Thanks, Mike. So in terms of volumes in Roofing and components, we expect those to be up modestly, I think, in the quarter. So we do see the ability to produce more shingles and more than first quarter of last year. 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 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 a headwind on the packaging exit. 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, the storm carryover, the underlying contractor demand and remodeling and reroof activity we are seeing in our contractor base would lead us to believe we're on 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. We would estimate probably incremental 40% both 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 prior year, again, I'll go back to what we saw in Q4 of '22 and Q1 of last year. As the market slow, demand for our products stayed really strong. 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. Oh, it appears Garik has disconnected. We will move over to Anthony Pettinari of Citi. Anthony, please go ahead. Your line is open.

Hi. I just had a quick follow-up on Insulation in 1Q. I think single-family starts inflected positively on a year-over-year basis in 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, assuming demand tends to lag starts by 3 months, 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. Yes, I mean, as we look at starts for the first quarter, 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 a more appropriate number. As we look at the full year, I think consensus has starts looking pretty similar on a year-over-year basis. So we pick up a bit in single-family on a year-over-year basis is a strength. Multifamily could be down a little bit on a year-over-year basis. But overall, it ends up looking pretty similar to '23. Yes, so as we look at the first quarter, we would expect sort of flattish overall results for volumes at resi.

Thank you. That's all the questions that we have time for today. I'll now hand back 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. Thanks, everyone.

Thank you. This now concludes today's call. Thank you all for joining. You may now disconnect your lines.