Q3 2019 Standard Industries Financial Statements

Standard Industries Inc.
Consolidated Financial Statements

For the Quarterly Periods Ended September 29, 2019 and September 30, 2018
STANDARD INDUSTRIES INC.
CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
Page
Consolidated Statements of Income for the Third Quarter and Nine Month Periods Ended
September 29, 2019 and September 30, 2018 (Unaudited)............................................................. 2
Consolidated Statements of Comprehensive Income for the Third Quarter and Nine Month
Periods Ended September 29, 2019 and September 30, 2018 (Unaudited)..................................... 3
Consolidated Balance Sheets as of September 29, 2019 and December 31, 2018 (Unaudited) ..... 4
Consolidated Statements of Cash Flows for the Nine Month Periods Ended September 29, 2019
and September 30, 2018 (Unaudited) .............................................................................................. 5
Notes to Consolidated Financial Statements (Unaudited)............................................................... 7
Management's Discussion and Analysis of Results of Operations and Liquidity and Financial
Condition (Unaudited)..................................................................................................................... 19
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Third Quarter Ended Nine Months Ended

September 29, September 30, September 29, September 30,
2019 2018 2019 2018
(Thousands)
Net revenues........................................ $ 1,613,922 $ 1,602,636 $ 4,751,726 $ 4,709,704
Costs and expenses:

Cost of goods sold ........................... 951,339 960,206 2,805,516 2,811,308
Selling, general and administrative . 375,660 355,090 1,161,681 1,076,262
Amortization of intangible assets.... 19,565 19,157 58,924 60,874
Restructuring and other expenses.... 24,659 29,283 73,160 66,189
Other expense, net ........................... 45,935 7,352 120,185 36,464
Total costs and expenses ............. 1,417,158 1,371,088 4,219,466 4,051,097
Income before interest expense and
income taxes.................................... 196,764 231,548 532,260 658,607
Interest expense ................................... (62,772) (58,104) (189,618) (193,222)
Income before income taxes................ 133,992 173,444 342,642 465,385
Income tax expense ............................. (54,054) (44,752) (105,176) (109,738)
Net income .......................................... $ 79,938 $ 128,692 $ 237,466 $ 355,647
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

2019 2018 2019 2018
(Thousands)
Net income ............................................. $ 79,938 $ 128,692 $ 237,466 $ 355,647

Investment adjustment (net of tax of
($5,183) and $668 during the third
quarter periods ended September 29,
2019 and September 30, 2018,
respectively, and ($5,813) and $1,640
during the nine month periods ended
September 29, 2019 and September
30, 2018, respectively) ......................... 16,411 (2,115) 18,407 (1,222)
Pension plan adjustment (net of tax of
($153) and $1,367 during the third
respectively, and $267 and $1,978
30, 2018, respectively) ......................... 528 (4,446) (972) (6,011)
Postretirement plan adjustment (net of
tax of ($7) and ($7) during the third
respectively, and ($21) and ($55)
30, 2018, respectively) ......................... 22 23 66 35
Cumulative translation adjustment (net
of tax of $0 and ($1,176) during the
third quarter periods ended September
29, 2019 and September 30, 2018,
respectively, and $0 and $15,028
30, 2018, respectively) ......................... (85,276) 9,991 (99,951) (60,435)
Comprehensive income .......................... $ 11,623 $ 132,145 $ 155,016 $ 288,014
3
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 29, December 31,

2019 2018
(Thousands)
Assets
Current Assets:
Cash and cash equivalents.................................................................................................................... $ 725,593 $ 1,416,244
Investments........................................................................................................................................... 237,872 139,468
Accounts receivable, trade, net ............................................................................................................ 884,541 566,746
Other receivables.................................................................................................................................. 22,713 29,452
Receivables from related parties .......................................................................................................... 12,570 46,303
Inventories, net ..................................................................................................................................... 879,692 895,721
Other current assets .............................................................................................................................. 61,306 56,658
Total Current Assets ........................................................................................................................ 2,824,287 3,150,592
Property, plant and equipment, net............................................................................................................ 1,938,669 1,969,429
Goodwill.................................................................................................................................................... 1,984,173 2,035,738
Intangible assets, net ................................................................................................................................. 927,513 1,011,713
Deferred income tax benefits .................................................................................................................... 77,220 84,888
Noncurrent receivables from related parties ............................................................................................. 130,455 116,235
Other noncurrent assets ............................................................................................................................. 227,098 213,973
Total Assets ............................................................................................................................................... $ 8,109,415 $ 8,582,568
Liabilities and Stockholder's Equity
Current Liabilities:
Current maturities of long-term debt.................................................................................................... $ 3,818 $ 4,213
Accounts payable ................................................................................................................................. 324,169 404,439
Accrued liabilities ................................................................................................................................ 689,211 647,329
Product warranty claims....................................................................................................................... 22,644 23,665
Total Current Liabilities................................................................................................................... 1,039,842 1,079,646
Long-term debt.......................................................................................................................................... 4,677,677 4,705,851
Product warranty claims............................................................................................................................ 107,398 119,564
Deferred income tax liabilities .................................................................................................................. 274,085 292,035
Other liabilities.......................................................................................................................................... 730,851 756,750
Commitments and Contingencies - Note 10
Stockholder's Equity:
Series A Cumulative Redeemable Convertible Preferred Stock, $0.01 par value per share; 400,000
shares authorized; no shares issued .................................................................................................. — —
Class A Common Stock, $0.001 par value per share; 1,300,000 shares authorized; 1,015,010
shares issued and outstanding........................................................................................................... 1 1
Class B Common Stock, $0.001 par value per share; 100,000 shares authorized; no shares issued ... — —
Additional paid-in capital..................................................................................................................... 474,295 474,295
Retained earnings ................................................................................................................................. 894,833 1,161,543
Accumulated other comprehensive loss ............................................................................................... (89,567) (7,117)
Total Stockholder's Equity............................................................................................................... 1,279,562 1,628,722
Total Liabilities and Stockholder's Equity ................................................................................................ $ 8,109,415 $ 8,582,568
4
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended

September 29, September 30,
2019 2018
(Thousands)
Cash and cash equivalents, beginning of period ................................................................................. $ 1,416,244 $ 1,274,747

Cash flows from operating activities:
Net income ........................................................................................................................................ 237,466 355,647
Adjustments to reconcile net income to net cash flows used in operating activities:
Depreciation ................................................................................................................................. 164,714 160,147
Amortization of intangible and other assets ................................................................................. 83,991 77,403
Restructuring and other expenses................................................................................................. 73,160 66,189
Deferred income taxes.................................................................................................................. (10,304) (70,069)
Noncash interest expense ............................................................................................................. 1,257 (244)
Unrealized loss on marketable securities ..................................................................................... 104,310 —
Change in working capital items....................................................................................................... (424,528) (598,797)
Decrease in product warranty claims ................................................................................................ (10,430) (3,190)
Increase in other noncurrent assets ................................................................................................... (33,421) (22,301)
Increase in other liabilities ................................................................................................................ 5,202 10,854
Change in net receivables from/payables to related parties .............................................................. 31,663 48,868
Other, net........................................................................................................................................... 1,189 3,679
Net cash provided by operating activities ........................................................................................... 224,269 28,186
Cash flows from investing activities:

Capital expenditures, net of disposals............................................................................................... (183,656) (154,025)
Purchase of investments.................................................................................................................... (208,363) (58,623)
Issuance of related party loans .......................................................................................................... (12,150) (18,361)
Repayment of related party loans...................................................................................................... — 10,000
Net cash used in investing activities.................................................................................................... (404,169) (221,009)
Cash flows from financing activities:

Proceeds from issuance of long-term debt ........................................................................................ — 100,000
Repayments of long-term debt .......................................................................................................... (3,283) (182,486)
Dividend to parent corporation ......................................................................................................... (500,000) —
Financing fees and expenses ............................................................................................................. — (982)
Principal repayments of capital leases .............................................................................................. (2,109) (2,665)
Net cash used in financing activities ................................................................................................... (505,392) (86,133)
Effect of exchange rate on cash........................................................................................................... (5,359) (3,769)
Net change in cash and cash equivalents............................................................................................. (690,651) (282,725)
Cash and cash equivalents, end of period............................................................................................ $ 725,593 $ 992,022
(Continued on the following page)
5
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - (Continued)
Nine Months Ended

September 29, September 30,
2019 2018
(Thousands)
Supplemental Cash Flow Information:

Effect on cash from changes in working capital items:
Increase in accounts receivable, trade, net and other receivables ....................... $ (327,965) $ (495,935)
Increase in inventories, net.................................................................................. (6,018) (122,840)
(Increase) decrease in other current assets .......................................................... (10,910) 3,907
(Decrease) increase in accounts payable............................................................. (70,414) 8,083
Increase in accrued liabilities .............................................................................. 58,601 61,212
Payments for restructuring and other expenses................................................... (67,822) (53,224)
Net effect of change in working capital items................................................... $ (424,528) $ (598,797)
Cash paid during the period for:

Interest (net of amounts capitalized of $617 and $1,288 in 2019 and 2018,
respectively) ........................................................................................................ $ 166,507 $ 159,099
Income taxes (including federal income taxes paid pursuant to a tax sharing
agreement of $58,760 and $96,100 in 2019 and 2018, respectively).................. $ 79,750 $ 129,821
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Description of the Company
Standard Industries Inc. ("Standard Industries" or the "Company") is a privately-held, global, diversified
holding company with interests in the building materials and aggregates industries. The Company is a wholly-
owned subsidiary of Standard Industries Holdings Inc. ("SIH"), which is a wholly-owned subsidiary of G-I Holdings
Inc. ("G-I Holdings"). G-I Holdings is an indirect subsidiary of G Holdings Inc. ("G Holdings").
Standard Industries conducts its business of manufacturing and selling residential and commercial roofing
and waterproofing products, insulation products, aggregates, specialty construction and other products through
four primary operating entities: GAF Materials LLC ("GAF"), GAF Energy LLC ("GAF Energy"), Specialty
Granules LLC ("SGI") and BMI Group Holdings UK Limited ("BMI"). GAF is a leading roofing manufacturer in
North America and has 30 strategically located manufacturing facilities. GAF's product lines include a
comprehensive portfolio of residential and commercial roofing systems, insulation, specialty construction and
other products with a reputation for advanced technology and customer-focused service. GAF, through its wholly-
owned subsidiary Siplast Inc. ("Siplast"), is also a leader in developing and manufacturing high-end advanced
roofing and waterproofing systems for the commercial roofing market and is renowned for its modified bitumen
membranes and liquid-applied roofing solutions. GAF Energy provides integrated, affordable and aesthetically-
pleasing residential rooftop solar solutions, leveraging GAF's established distribution network in North America.
SGI is a leading aggregates and mining company supplying specialized aggregates and other products to the North
American building materials industry with four manufacturing facilities located throughout the United States. SGI's
primary products are colored roofing granules, which provide key functionality to roofing products including
aesthetic appeal, protection from ultraviolet rays, durability and weather resistance. BMI is a leading global
manufacturer and supplier of high-end flat and pitched roofing systems and waterproofing solutions with 146
strategically located manufacturing facilities primarily serving the European residential and non-residential
markets. BMI's product portfolio focuses on concrete, clay and steel tiles, bitumen and synthetic membranes,
liquid-applied roofing products as well as roofing components with a reputation of superior quality and unparalleled
distribution networks.
The consolidated financial statements of the Company reflect, in the opinion of management, all adjustments
necessary to present fairly the financial position of the Company at September 29, 2019 and December 31, 2018,
the results of its operations for the third quarter and nine month periods ended September 29, 2019 and September
30, 2018 and its cash flows for the nine month periods ended September 29, 2019 and September 30, 2018. All
adjustments are of a normal recurring nature, except for the restructuring and other expenses recorded in the
Company's statements of income for the third quarter and nine month periods ended September 29, 2019 and
September 30, 2018. See Note 4. Net sales of roofing products and specialty construction products are generally
seasonal in nature. Accordingly, the results of operations and cash flows in the respective quarterly ended periods
will vary depending on the time of the year. These financial statements should be read in conjunction with the
annual audited financial statements and notes thereto for the year ended December 31, 2018.
Note 2. Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update
("ASU") 2014-09, "Revenue from Contracts with Customers." ASU 2014-09, along with subsequent amendments,
requires that revenue be recognized upon the transfer of goods or services to customers and the amount of revenue
recognized will reflect the consideration to which a reporting entity expects to be entitled in exchange for those
goods or services. The Company adopted this guidance during the first quarter of 2019 which did not have a material
impact on its consolidated financial statements.
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

In January 2016, the FASB issued ASU 2016-01, "Recognition and Measurement of Financial Assets and
Financial Liabilities." ASU 2016-01, along with subsequent amendments, modifies certain aspects of the
recognition, measurement, presentation and disclosure of financial instruments. The update requires changes in
the fair value of equity instruments with readily determinable fair values to be recorded in net income, eliminates
certain disclosure requirements for financial instruments measured at amortized cost, requires that disclosure of
financial instruments be based on an exit price notion and requires separate presentation of financial assets and
liabilities by measurement category and form of financial asset. The Company adopted this guidance during the
first quarter of 2019, which resulted in a reclassification of $4.2 million, net of tax impact of $1.3 million, of
cumulative losses on equity investments with readily determinable fair values from accumulated other
comprehensive income (loss) to retained earnings.
In February 2016, the FASB issued ASU 2016-02, "Leases." ASU 2016-02, along with subsequent
amendments, amends accounting for leases requiring that a lessee recognize assets and liabilities for most leases
and recognize expenses similar to current lease accounting. The guidance is effective for fiscal years beginning
after December 15, 2019 and interim periods within fiscal years beginning after December 15, 2020. Early adoption
is permitted. The new guidance must be adopted using a modified retrospective transition and provides for certain
practical expedients. The Company is currently evaluating the impact of this guidance on its consolidated financial
statements.
In March 2016, the FASB issued ASU 2016-05, "Derivatives and Hedging: Effect of Derivative Contract
Novations on Existing Hedge Accounting Relationships." ASU 2016-05 clarifies that for purposes of applying the
guidance, a change in the counterparty to a derivative instrument that has been designated as the hedging instrument
in an existing hedging relationship would not, in and of itself, be considered a termination of the hedging relationship.
ASU 2016-05 can be applied on either a prospective or modified retrospective basis. The Company adopted this
guidance in the first quarter of 2019 which did not have a material impact on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments."
ASU 2016-13, along with subsequent amendments, replaces the incurred loss methodology for recognizing credit
losses with a current expected credit losses model and applies to all financial assets, including trade receivables.
The guidance must be adopted using a modified retrospective approach. ASU 2016-13 is effective for all entities
for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is currently
evaluating the impact of this guidance on its consolidated financial statements.
In August 2016, the FASB issued ASU 2016-15, "Statements of Cash Flows: Classification of Certain Cash
Receipts and Cash Payments." ASU 2016-15 provides guidance to reduce diversity in practice surrounding the
classification of certain cash receipts and payments in the statement of cash flows. The Company adopted this
guidance in the first quarter of 2019 which did not have a material impact on its consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." ASU
2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation.
A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value,
not to exceed the carrying amount of goodwill. ASU 2017-04 will be effective for fiscal years beginning after
December 15, 2021. The Company does not expect this guidance to have a material impact to its consolidated
financial statements.
8

In March 2017, the FASB issued ASU 2017-07, "Compensation-Retirement Benefits (Topic 715):
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." The
amendments in this ASU require that an employer report the service cost component of net periodic pension cost
and net periodic postretirement benefit cost in the same line items as other compensation costs arising from services
rendered by the pertinent employees during the period. Additionally, the other components of net benefit cost are
required to be presented in the income statement separately from the service cost component and outside a subtotal
of income from operations, if one is presented. The Company adopted this guidance in the first quarter of 2019
which did not have a material impact on its consolidated financial statements.
In August 2017, the FASB issued ASU 2017-12, "Targeted Improvements to Accounting for Hedging
Activities." ASU 2017-12, along with subsequent amendments, improves the transparency and understandability
of information conveyed to financial statement users about an entity's risk management activities by better aligning
the entity's financial reporting for hedging relationships with those risk management activities; and reduces the
complexity of the application of hedge accounting by preparers. ASU 2017-12 is effective for fiscal years beginning
after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of this
guidance on its consolidated financial statements.
In August 2018, the FASB issued ASU 2018-14, "Changes to the Disclosure Requirements for Defined
Benefit Plans." The amendments in this ASU remove disclosures that are no longer considered cost beneficial,
clarify the specific requirements of disclosures, and add certain disclosure requirements. ASU 2018-14 is effective
for all entities for fiscal years ending after December 15, 2021. Early adoption is permitted. The Company does
not expect this guidance to have a material impact to its consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, "Customer's Accounting for Implementation Costs Incurred
in a Cloud Computing Arrangement that is a Service Contract." The amendments in this ASU align the requirements
for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the
requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU
2018-15 is effective for all entities for fiscal years beginning after December 15, 2020. Early adoption is permitted.
The Company does not expect this guidance to have a material impact to its consolidated financial statements.
Note 3. Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) ("AOCI") and its components in the Company's
consolidated financial statements include investment adjustments, pension plan adjustments, postretirement plan
adjustments and cumulative translation adjustments, all of which are net of tax.
9

Changes in the components of AOCI, net of related taxes, for the nine months ended September 29, 2019
are as follows:
Accumulated
Postretirement Cumulative Other
Investment Pension Plan Plan Translation Comprehensive
Adjustments Adjustments Adjustments Adjustments Income (Loss)
(Thousands)
Balance, December 31, 2018 ................ $ (42,041) $ (21,804) $ 1,513 $ 55,215 $ (7,117)
Other comprehensive income (loss)

before reclassifications to net
income, net of related taxes................ 18,407 (2,284) — (99,951) (83,828)
Amounts reclassified from AOCI to

net income, net of related taxes .......... — 1,312 66 — 1,378
Net other comprehensive income
(loss) ................................................... 18,407 (972) 66 (99,951) (82,450)
Balance, September 29, 2019 ............... $ (23,634) $ (22,776) $ 1,579 $ (44,736) $ (89,567)
Note 4. Restructuring and Other Expenses
Restructuring and other expenses primarily relate to costs associated with the closure of certain
manufacturing facilities, the relocation of offices and past acquisitions including the integration of acquired
businesses into BMI. The nature of the costs incurred may include, but are not limited to, the write-down of
inventory, intangible assets, property, plant and equipment, construction costs as well as related operating costs,
such as employee severance, lease termination, integration implementation costs and utilities.
During the third quarter periods ended September 29, 2019 and September 30, 2018, the Company recorded
$24.7 and $29.3 million of restructuring and other expenses, respectively, and during the nine month periods ended
September 29, 2019 and September 30, 2018, the Company recorded $73.2 and $66.2 million of restructuring and
other expenses, respectively, in its consolidated statements of income.
Note 5. Inventories
Inventories consist of the following:

2019 2018
(Thousands)
Finished goods ....................................................................... $ 524,568 $ 565,621
Work in process...................................................................... 37,822 28,051
Raw materials and supplies .................................................... 366,038 343,985
Total.................................................................................... 928,428 937,657
Less: LIFO reserve ................................................................. (48,736) (41,936)
Inventories, net ................................................................... $ 879,692 $ 895,721
10

Note 6. Long-Term Debt
Long-term debt consists of the following:

2019 2018
(Thousands)
Borrowings under the Senior Secured Revolving

Credit Facility.................................................................... $ — $ —
5 3/8% Senior Unsecured Notes due 2024........................... 1,100,000 1,100,000
6% Senior Unsecured Notes due 2025................................. 1,100,000 1,100,000
4 3/4% Senior Unsecured Notes due 2028........................... 1,000,000 1,000,000
5 1/2% Senior Unsecured Notes due 2023........................... 500,000 500,000
5% Senior Unsecured Notes due 2027................................. 500,000 500,000
3% Senior Secured Notes due 2021 ..................................... 481,583 507,164
Obligations under capital leases........................................... 25,929 29,899
Other..................................................................................... 3,354 6,661
Less: deferred financing fees................................................ (29,371) (33,660)
Total debt.......................................................................... 4,681,495 4,710,064
Less: current maturities ........................................................ (3,818) (4,213)
Long-term debt................................................................. $ 4,677,677 $ 4,705,851
Debt Summary
As of September 29, 2019, the Company had total outstanding consolidated indebtedness of $4,681.5
million, including $3.8 million that matures prior to September 29, 2020. The Company anticipates funding these
obligations due prior to September 29, 2020 principally from its cash and cash equivalents on hand, cash flow
from operations and/or borrowings under its $650.0 million senior secured revolving credit facility (the "Senior
Secured Revolving Credit Facility"). There were no amounts outstanding under the Senior Secured Revolving
Credit Facility as of September 29, 2019. As of September 29, 2019, the Company was in compliance with all debt
covenants and the net book value of the collateral securing the Senior Secured Revolving Credit Facility and the
3% 2021 Notes was $1,690.1 and $647.6 million, respectively.
As of September 29, 2019, the Company had available sources of liquidity of $1,345.5 million (including
its cash and cash equivalents on hand of $725.6 million), which is net of the Company's outstanding letters of
credit of approximately $34.0 million, of which $10.5 million was issued in support of its affiliates (see Note 9),
subject to borrowing base availability as defined in the Senior Secured Revolving Credit Facility agreement.
As of September 29, 2019 and December 31, 2018, the Company had $86.2 and $76.0 million, respectively,
of accrued interest payable related to its debt, which is included in accrued liabilities in the Company's consolidated
balance sheets.
Guarantor Financial Information
All of the Company's wholly-owned U.S. subsidiaries, other than a certain investment subsidiary, are
guarantors under the Company's Senior Secured Revolving Credit Facility and the indentures governing the 5 3/8%
11

2024 Notes, the 6% 2025 Notes, the 4 3/4% 2028 Notes, the 5 1/2% 2023 Notes and the 5% 2027 Notes. The assets
of the Company and its guarantor subsidiaries are subject to the collateral requirements of the Senior Secured
Revolving Credit Facility. As of September 29, 2019, the total assets of the Company and its guarantor subsidiaries
was $4,003.7 million.
Note 7. Financial Instruments
Fair Value Measurements
At September 29, 2019 and December 31, 2018, the Company's financial assets and liabilities measured at
fair value on a recurring basis are summarized below:
September 29, 2019
(Thousands)
Level 1 Level 2 Level 3
Assets:
Marketable equity investments.................. $ 237,872 $ — $ —
Liabilities:
Foreign currency contract.......................... $ — $ 31,100 $ —
December 31, 2018

(Thousands)
Level 1 Level 2 Level 3
Assets:
Marketable equity investments.................. $ 139,468 $ — $ —
Liabilities:
Foreign currency contract.......................... $ — $ 49,826 $ —
Marketable Equity Investments
Equity investments that have readily determinable fair values are recorded at fair value and are included
in investments in the Company's consolidated balance sheets. For the third quarter ended September 29, 2019, the
Company recorded gross unrealized losses of $49.0 million related to these marketable equity investments, which
is included in other expense, net in the consolidated statements of income. For the third quarter ended September
30, 2018, the Company recorded gross unrealized losses of $2.9 million related to these marketable equity
investments, which is included in other comprehensive income (loss) ("OCI"). For the nine months ended
September 29, 2019, the Company recorded gross unrealized losses of $104.3 million related to these marketable
equity investments, which is included in other expense, net in the consolidated statements of income. For the nine
months ended September 30, 2018, the Company recorded gross unrealized losses of $8.7 million related to these
marketable equity investments, which is included in OCI.
Foreign Currency Contract
During the year ended December 31, 2017, the Company entered into a foreign exchange swap agreement,
as a hedge of its net investment in its European operations, in which $500.0 million at a fixed rate of 5.0% was
exchanged for €467.3 million at a fixed rate of 3.49%, with interest payments settled between the parties in February
12

and August of each year. The foreign exchange swap agreement meets the criteria for hedge accounting under ASC
815, "Accounting for Derivative Instruments and Hedging Activities" and is included in other liabilities in the
Company's consolidated balance sheets. During the third quarter periods ended September 29, 2019 and September
30, 2018, the Company recorded gross gains of $21.6 million and $0.1 million, respectively, and during the nine
month periods ended September 29, 2019 and September 30, 2018, the Company recorded gross gains of $18.7
million and $5.8 million, respectively, which is included in OCI, relating to the foreign currency contract.
Equity-Method and Non-Marketable Equity Investments
Equity investments that give the Company the ability to influence but not control the operating or financial
decisions of the investee are accounted for using the equity method of accounting. Under the equity method, the
Company recognizes a proportionate share of the investee's gains or losses through an adjustment to the carrying
value of the investment. As of September 29, 2019 and December 31, 2018, the Company had $18.4 and $18.5
million, respectively, in equity-method investments, which are included in other noncurrent assets in the Company's
consolidated balance sheets.
Equity investments without readily determinable fair values and for which the Company does not have the
ability to exercise significant influence are carried at cost less impairment, adjusted for observable price changes
in orderly transactions for identical or similar investments of the same issuer. As of September 29, 2019 and
December 31, 2018, the Company had $22.3 and $16.5 million, respectively, in non-marketable equity investments,
which are included in other noncurrent assets in the Company's consolidated balance sheets.
The Company's equity-method and non-marketable equity investments are assessed for impairment when
observable events or changes in circumstances have occurred that may have a significant other-than-temporary
adverse effect on the fair value of the investments. No impairment losses on equity-method or non-marketable
equity investments were recorded during the nine month periods ended September 29, 2019 and September 30,
2018.
Note 8. Warranty Claims
The Company provides certain limited warranties covering most of its residential and commercial roofing
products. The Company believes that the liability established for estimated probable future product warranty claims
is adequate. If actual claims differ from these estimates, adjustments to this reserve may be required.
The activity in the liability for product warranty claims consists of the following:
2019 2018 2019 2018
(Thousands)
Beginning balance ..................................... $ 139,152 $ 163,617 $ 143,229 $ 163,709
Charged to cost of goods sold ................. 3,848 2,564 13,005 15,582
Payments/deductions............................... (10,474) (7,114) (23,262) (17,620)
Impact of foreign currency translation .... (2,484) (205) (2,930) (2,809)
Ending balance .......................................... $ 130,042 $ 158,862 $ 130,042 $ 158,862
13

Any fluctuation in product warranty claims associated with the captive insurance program will result in a
similar change in the receivable from insurance captive. See Note 9.
Deferred Revenue and Extended Product Warranty
The Company offers enhanced warranties on certain of its residential and commercial roofing products.
All revenue from the sale of these warranty programs is deferred and amortized on a straight-line basis over the
life of these warranty programs. Incremental direct costs associated with the acquisition of the extended warranty
contracts are capitalized and amortized on a straight-line basis over the average life of these warranty programs.
Current costs of services performed related to claims paid under these warranty programs are expensed as incurred.
A loss would be recognized if the total expected costs of providing services under these warranty programs exceed
deferred revenues less deferred costs.
At September 29, 2019 and December 31, 2018, the Company had deferred revenue of $165.0 and $154.3
million, of which $22.4 and $22.4 million is included in the consolidated balance sheets in accrued liabilities and
$142.6 and $131.9 million is included in other liabilities, respectively. At September 29, 2019 and December 31,
2018, the Company also had deferred costs of $100.1 and $95.3 million, of which $12.1 and $12.1 million is
included in the consolidated balance sheets in other current assets and $88.0 and $83.2 million is included in other
noncurrent assets, respectively.
Note 9. Related Party Transactions
The consolidated balance sheets include the following balances with related parties, which arose from
operating and investing transactions between the Company and its affiliates:
2019 2018
(Thousands)
Assets:
Receivables from related parties............................ $ 4,428 $ 7,723
Income tax receivable from parent corporation ..... 8,142 38,580
Receivables from related parties.............................. $ 12,570 $ 46,303
Loan receivable from related party ........................ $ 20,801 $ 8,410

Receivable from insurance captive ........................ 109,654 107,825
Noncurrent receivables from related parties ............ $ 130,455 $ 116,235
Insurance Captive
The Company's indirect parent formed First General Insurance Company Inc. (the "Captive") to provide
insurance coverage to the Company and its subsidiaries and other affiliated entities. The Captive provides insurance
for the deductible portion of certain of the Company's general insurance and certain of the Company's residential
and specialty construction product warranty obligations. At September 29, 2019 and December 31, 2018, the
Company recorded an aggregate long-term receivable from the Captive of $109.7 and $107.8 million, respectively,
which is included in noncurrent receivables from related parties in its consolidated balance sheets. The receivable
from the Captive represents an amount similar to the general insurance and warranty liabilities expected to be
14

recovered. Such reserves were actuarially determined, in the aggregate, based on a reasonable estimation of insured
events expected to occur. The Company believes there could be uncertainty associated with the loss estimates and
actual results may differ from estimates.
Affiliate Loans
The Company makes loans to, borrows from, and extends payment terms on receivables from its parent
corporation and affiliates from time to time at prevailing market rates. During the year ended December 31, 2018,
the Company acquired from its parent company SIH a promissory note due from the Company's affiliate Linden
Property Holdings LLC ("LPH") that had an outstanding balance of $12.0 million (the "Note"). The Note was
purchased at par and had a stated maturity of September 30, 2018. Prior to September 30, 2018, LPH repaid a
portion of the outstanding balance and the maturity date of the Note was extended to September 30, 2023. The
amended Note bears interest at the Applicable Federal Rate ("AFR") and allows LPH to borrow up to $30.0 million.
As of September 29, 2019 and December 31, 2018, the Note had an outstanding balance of $20.8 and $8.4 million,
respectively, which is included in noncurrent receivables from related parties in the Company's consolidated balance
sheets.
Affiliate Lease Arrangements
The Company leases land and buildings from subsidiaries of LPH. The Company believes the terms of
these leases taken as a whole are no less favorable to the Company than could be obtained from an unaffiliated
third party.
Sales and Purchases
The Company makes sales to/purchases from certain related parties in the normal course of its business
operations. The Company believes the terms of these sales and purchases taken as a whole are no less favorable
to the Company than could be obtained from an unrelated third party.
Affiliate Management and Services Agreements
The Company provides certain administrative, legal, information technology and other support services to
two of its affiliates, LPH and G-I Holdings. Pursuant to the arrangements with these entities, the Company was
paid a fee for reimbursement of expenses attributable to or incurred by the Company for the benefit of such affiliates.
The Company provides the Captive certain cash management and warranty claims administrative services.
Pursuant to the arrangement with the Captive, the Company was paid a fee for reimbursement of expenses
attributable to or incurred by the Company for the benefit of the Captive.
The Company receives services from G-I Holdings including (i) corporate development and strategic
planning, (ii) risk management, (iii) tax planning, consultation and advice, (iv) corporate finance, financial planning
and fiduciary services, (v) general management services and (vi) other services as agreed upon by the parties.
Pursuant to the services agreement with G-I Holdings, the Company was charged a total of $10.0 and $9.2 million
during the third quarter periods ended September 29, 2019 and September 30, 2018, respectively, and $28.9 and
$27.6 million during the nine month periods ended September 29, 2019 and September 30, 2018, respectively,
which is included in other expense, net in the consolidated statements of income.
15

The Company provides certain administrative, legal and other support services to its affiliate, G-I Energy
Investments LLC ("G-I Energy") including (i) corporate development and strategic planning, (ii) risk management,
(iii) tax planning, consultation and advice, (iv) corporate finance, financial planning and fiduciary services, (v)
legal services, including, without limitation, advice relating to acquisitions, litigation and legal compliance, (vi)
general management services, including, without limitation, services related to the operation of the business and
personnel management and (vii) any other services as may be agreed upon by the parties. Pursuant to the service
agreement with G-I Energy, the Company was paid a fee for the reimbursement of expenses attributable to or
incurred by the Company for the benefit of G-I Energy.
Due to the unique nature of the services provided under the services agreements listed above (collectively,
the "Services Agreements"), comparisons to third-party arrangements are difficult. However, the Company believes
that the terms of the Services Agreements taken as a whole are no less favorable to the Company than could be
obtained from an unaffiliated third party.
Affiliate Letters of Credit
The Company has outstanding letters of credit under its Senior Secured Revolving Credit Facility for the
benefit of LPH and G-I Holdings. LPH and G-I Holdings have entered into letters of credit reimbursement
agreements with the Company whereby they have agreed to reimburse the Company for fees and other costs
incurred by the Company relating to the letters of credit issued on their behalf. See Note 6.
Income Taxes
Income tax receivable from parent corporation was $8.1 and $38.6 million at September 29, 2019 and
December 31, 2018, respectively, which represents federal tax amounts due from G-I Holdings under a tax sharing
agreement. At September 29, 2019 and December 31, 2018, these amounts are included in receivables from related
parties in the consolidated balance sheets and change in net receivables from/payables to related parties in the
consolidated statements of cash flows.
Dividends
On January 2, 2019, the Company declared and paid a cash dividend of $500.0 million to its parent
corporation. No dividends were declared or paid during the nine months ended September 30, 2018.
Note 10. Commitments and Contingencies
Litigation
In November 2014, prior to the Company's acquisition of Icopal Holding ApS ("Icopal"), the Danish
Competition and Consumer Authority ("DCCA") initiated an investigation of potentially anticompetitive conduct
involving Icopal in Denmark. The investigation relates to the participation of Icopal's Danish subsidiary in an
industry council that issues standards and specifications for certain roofing materials which are widely used by
other participants in the Danish roofing market. The DCCA has alleged that these standards and specifications
were developed and applied in a manner that restricts competition in the market for the applicable roofing materials.
On May 31, 2017, the Danish Competition Council ("DCC") rendered a decision finding that Icopal engaged in
anticompetitive conduct in Denmark based on its participation in an industry council that issues standards and
16

specifications for certain roofing materials which were developed and applied in a manner that restricts competition.
The Company appealed the DCC's decision. In addition, certain competitors of Icopal in Denmark asserted claims
for losses based upon the same allegations of anticompetitive conduct that serve as the basis for the DCCA matter.
On September 12, 2018, the Danish Competition Appeal Tribunal reversed the DCC's May 31, 2017 decision and
sent the matter back to the DCC. It is currently unknown whether the DCC will reopen or close the matter with or
without a settlement agreement with the Company. The Company intends to vigorously defend against any
outstanding claims. The Company does not believe that the impact of the foregoing matters will have a material
adverse effect on the Company's liquidity, financial position or results of operations.
Environmental
The Company, and its subsidiaries, are a party to a variety of administrative and legal proceedings involving
environmental matters under federal, state, local and foreign laws and regulations governing the investigation and
cleanup of property contaminated with hazardous substances, a number of which are in the early stages or have
been dormant for protracted periods. Most of these environmental claims do not seek to recover an amount of
specific damages. In respect to these claims, the Company estimates its liability as of September 29, 2019 and
December 31, 2018 was $24.1 and $24.5 million, respectively, which is included in other liabilities in the Company's
consolidated balance sheets.
While the Company cannot predict whether adverse decisions or events can occur in the future, the Company
believes that the ultimate disposition of such matters will not have a material adverse effect on its liquidity, results
of operations, cash flows or financial position. However, adverse decisions or events, particularly as to increases
in remedial costs, discovery of new contamination, assertion of natural resource damages, the liability and the
financial responsibility of the other parties at multi-party sites and the number and financial viability of other
potentially responsible parties and their insurers, could cause the Company to increase its estimate of its liability
in respect to those matters. It is not currently possible to estimate the amount or range of any additional liability.
Other Contingencies
In May 2018, the Company was awarded $72.3 million, net of associated fees, as part of a confidential
class action settlement. Under the terms of the settlement agreement, the Company is due payments of $18.1,
$27.1 and $27.1 million in 2018, 2019 and 2020, respectively, starting in July of 2018. During the third quarter
periods ended September 29, 2019 and September 30, 2018, the Company received $18.1 and $9.1 million related
to the settlement, respectively, and during the nine month periods ended September 29, 2019 and September 30,
2018, the Company received $27.1 and $9.1 million related to the settlement, respectively, which was recognized
as a component of other expense, net in the consolidated statements of income. The remaining $27.1 million will
be recognized as received as a component of other expense, net in the consolidated statements of income.
The Company is, from time to time, a party to litigation that arises in the normal course of its business
operations. Although litigation is inherently unpredictable, the Company is not presently a party to any such
litigation that the Company believes could reasonably be expected to have a material adverse effect on its liquidity,
financial position or results of operations.
17

Note 11. Subsequent Events
The Company evaluated subsequent events through the date its consolidated financial statements were
available to be issued on November 5, 2019, and noted there was no impact on its September 29, 2019 consolidated
financial statements.
18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND

LIQUIDITY AND FINANCIAL CONDITION (UNAUDITED)
Our Company
Standard Industries Inc., which we refer to as Standard Industries, is a privately-held, global, diversified
holding company with interests in the building materials and aggregates industries. We are a wholly-owned
subsidiary of Standard Industries Holdings Inc., which we refer to as SIH, which is a wholly-owned subsidiary of
G-I Holdings Inc., which we refer to as G-I Holdings. G-I Holdings is an indirect subsidiary of G Holdings Inc.,
which we refer to as G Holdings. Unless otherwise indicated by the context, "we," "us" and "our" refer to Standard
Industries and its consolidated subsidiaries.
We conduct our business of manufacturing and selling residential and commercial roofing and waterproofing
products, insulation products, aggregates, specialty construction and other products through four primary operating
entities: GAF Materials LLC, which we refer to as GAF, GAF Energy LLC, which we refer to as GAF Energy,
Specialty Granules LLC, which we refer to as SGI, and BMI Group Holdings UK Limited, which we refer to as
BMI. GAF is the largest roofing manufacturer in North America and has 30 strategically located manufacturing
facilities. GAF's product lines include a comprehensive portfolio of residential and commercial roofing systems,
insulation, specialty construction and other products with a reputation for advanced technology and customer-
focused service. GAF, through its wholly-owned subsidiary Siplast Inc., which we refer to as Siplast, is also a
leader in developing and manufacturing high-end advanced roofing and waterproofing systems for the commercial
roofing market and is renowned for its modified bitumen membranes and liquid-applied roofing solutions. GAF
Energy provides integrated, affordable and aesthetically-pleasing residential rooftop solar solutions, leveraging
GAF's established distribution network in North America. SGI is a leading aggregates and mining company
supplying specialized aggregates and other products to the North American building materials industry with four
manufacturing facilities located throughout the United States. SGI's primary products are colored roofing granules,
which provide key functionality to roofing products including aesthetic appeal, protection from ultraviolet rays,
durability and weather resistance. BMI is a leading global manufacturer and supplier of high-end flat and pitched
roofing systems and waterproofing solutions with 146 strategically located manufacturing facilities primarily
serving the European residential and non-residential markets. BMI's product portfolio focuses on concrete, clay
and steel tiles, bitumen and synthetic membranes, liquid-applied roofing products as well as roofing components
with a reputation of superior quality and unparalleled distribution networks.
We believe that, based on net revenues, we are the world's largest manufacturer of roofing products. We
categorize our products into three groups: residential roofing and waterproofing products; commercial roofing,
waterproofing and insulation products; and aggregates, specialty construction and other products. For the nine
months ended September 29, 2019, our residential roofing and waterproofing products; commercial roofing,
waterproofing and insulation products; and aggregates and specialty construction and other products net revenues
represented 67%, 25% and 8%, respectively, of total net revenues. In addition, for the nine months ended September
29, 2019, net revenues generated in North America, Europe and regions outside North America and Europe,
including Asia and Africa, amounted to 62%, 35% and 3%, respectively, of total net revenues.
Our residential roofing and waterproofing revenues are primarily driven by the repair/replacement or re-
roofing market, which we believe is less cyclical than the new construction market. We believe approximately
75% of roofing demand in the markets we serve is attributable to the repair/replacement roofing market as a result
of the aging of the existing housing stock. We also believe that future demand for residential re-roofing will continue
to increase. We believe that, over time, demand for commercial roofing, waterproofing and insulation products
will rise as construction of new commercial facilities increases and existing buildings age. We also manufacture
19

LIQUIDITY AND FINANCIAL CONDITION (UNAUDITED) - (Continued)
and market aggregates and specialty construction and other products, which include civil engineering products as
well as specialty construction products for the professional and do-it-yourself remodeling and residential
construction industries.
We market our products through multiple distribution channels. We have focused on developing a sales
and marketing platform that we believe is among the best in the roofing industry. For our residential roofing
products, we have strong distribution capabilities with wholesale distributors, big-box retailers, lumberyards and
custom and mass production homebuilders. Our commercial roofing products are marketed through multiple
distribution channels including wholesale distributors, national specifiers, property owners, leading contractors
and architects. We offer both our residential and commercial customers extensive training, which fosters growth
in customer loyalty and enables our customers to act as an extension of our sales force when discussing roofing
products with the ultimate consumer.
With our unparalleled manufacturing network consisting of 180 manufacturing facilities operating in 30
countries, we believe that we are a low-cost provider of our products to our customers. We believe that our plants
and facilities have been well maintained, are in good condition, are suitable for their respective operations and
generally provide sufficient capacity to meet production requirements. Due to the seasonality of our business, our
production facilities generally run at full capacity during the months necessary to meet our peak seasonal operating
demands. Each plant has adequate transportation facilities for both raw materials and finished products. We believe
our plants are strategically located, which allows us to provide superior service to our customers.
Summary Financial Results
Our net revenues in the third quarter periods ended September 29, 2019 and September 30, 2018 were
$1,613.9 million and $1,602.6 million, respectively, and our net revenues in the nine month periods ended September
29, 2019 and September 30, 2018 were $4,751.7 million and $4,709.7 million, respectively. In the third quarter
periods ended September 29, 2019 and September 30, 2018, we had income before interest expense and income
taxes of $196.8 million and $231.5 million, which included $24.7 million and $29.3 million of restructuring and
other expenses, respectively. In the nine month periods ended September 29, 2019 and September 30, 2018, we
had income before interest expense and income taxes of $532.3 million and $658.6 million, which included $73.2
million and $66.2 million of restructuring and other expenses, respectively. See Results of Operations below.
Our Product Lines
We categorize our products into three groups: residential roofing and waterproofing products; commercial
roofing, waterproofing and insulation products; and aggregates, specialty construction and other products.
Residential Roofing and Waterproofing
North America
In North America, we are a leading manufacturer of a complete line of residential roofing products, including
architectural laminated asphalt roofing shingles, asphalt strip shingles and roofing accessories. Our principal
residential roofing products consist of asphalt-based laminated shingles and 3-tab strip shingles. Because of their
superior aesthetics, quality, durability and cost effectiveness, we believe asphalt-based roofing shingles continue
20

to be the product of choice among contractors and property owners. Made from multiple layers of fiberglass, the
laminated shingle offers many benefits to consumers, including the appearance of natural materials, such as slate
or wood shakes, as well as increased durability and product performance. We believe we have among the most
advanced and efficient manufacturing network within the industry.
Our two principal lines of residential asphalt roofing shingles are the Timberline® series, a laminated shingle,
and the Royal Sovereign® series, a standard 3-tab strip shingle. We also produce a wide array of designer shingles.
We believe that, based on net revenues and unit sales, we are the largest manufacturer of residential roofing products
in North America.
In addition to shingles, we supply a wide range of accessory products necessary to install a complete roofing
system. Our GAF Lifetime Roofing System begins with WeatherWatch® and StormGuard® waterproof leak barriers
for eaves, valleys and flashings to protect against water seepage between the roof deck and the shingles caused by
ice build-up and wind-driven rain. Our GAF Lifetime Roofing System also includes roof deck protection and ridge
cap shingles (certain of which are thicker and typically larger than standard ridge cap shingles and provide dramatic
accents to the slopes and planes of a finished roof), attic ventilation products and starter strips.
Through GAF Energy, we also market integrated, affordable and aesthetically-pleasing residential rooftop
solar solutions. Our principal residential solar solution, the DecoTech® System, is a high-output, low-profile
photovoltaic solar system that is integrated into the customer's roofing system. We believe that such integrated
solutions offer a superior option because of their elegant design and reduced risk of leaks compared to typical rack-
mounted systems installed above the roofing shingles.
Europe
In Europe, we are a leading manufacturer of a comprehensive range of roofing products and waterproofing
solutions. We offer a wide variety of high-end roofing systems for pitched roofs including clay, concrete and steel
tiles, a line of bitumen shingles in varying shapes and colors, a high-end roofing system of granulated or coated
galvanized steel tile panels available for roofs with a pitch as low as ten degrees and designer bitumen membranes
with a visual effect resembling shingles, ceramic tiles or long-run steel roofs.
In addition to our roof tiles and shingles, we manufacture and market other components used in residential
roofing applications, including roof underlays and other accessories. Roof underlays consist of a layer of material
placed under the exterior roof to protect the building structure from the effects of weather. Our accessories include
plastic and steel rainwater systems, chimney pipe systems, flashings, insulations and primers. We market our
residential roofing product lines in Europe under the Braas®, Bramac®, Cobert®, Coverland®, Decra®, Icopal®,
Klober®, Monier®, Redland®, Villas® and Wierer® brand names.
Commercial Roofing, Waterproofing and Insulation
North America
In North America, we manufacture a wide range of roofing and waterproofing solutions including polymer-
based synthetic single-ply membranes, modified bitumen and asphalt built-up roofing products and accessories.
In addition, we provide insulation products including polyisocyanurate ("ISO") products along with insulation-
related accessories. We also offer a complete line of liquid-applied solutions and roofing accessories for use in the
21

application of commercial roofing and waterproofing systems. We believe that based on combined unit sales we
are a leading manufacturer of commercial roofing, waterproofing and insulation products in the United States.
We have improved our sales mix of commercial roofing and waterproofing products by increasing our
emphasis on the growing single-ply segment of the commercial roofing and waterproofing market. We sell
thermoplastic polyolefin ("TPO") synthetic single-ply commercial roofing membranes under the EverGuard®
trademark. The EverGuard® brand also includes heat welded and self-adhered membranes, both of which offer
building owners ENERGY STAR® qualified roofing systems. We also market EverGuard Extreme® TPO, which
delivers next-generation performance against heat aging and UV degradation. We also sell polyvinyl chloride
("PVC") synthetic single-ply commercial roofing products under the EverGuard® trademark. PVC synthetic
membranes offer flexibility, reflectivity and higher chemical resistance to property owners.
We manufacture fiberglass-based felts, which are made from asphalt impregnated glass fiber mats for use
as a component in asphalt built-up roofing systems under the GAFGLAS® trademark. Most of our fiberglass-based
roofing systems are assembled on the roof by applying successive layers of roofing with asphalt and topped, in
some applications, with gravel or mineral surfaced sheets. Thermal insulation may also be applied beneath the
membrane. We manufacture base sheets, flashings and roofing accessories for use in these systems.
We manufacture modified bitumen products under the Ruberoid® trademark. Modified bitumen products
are used in new and replacement roofing applications. These products consist of a roofing membrane utilizing
polymer modified asphalt, which strengthens and increases flexibility and is reinforced with a polyester nonwoven
mat or a glass mat. Modified bitumen systems provide an alternative to conventional built-up roofing systems,
including ease of installation and maintenance.
We manufacture and market insulation products under the EnergyGuard™ brand name, including ISO
products and accessories. In addition, we manufacture and market roofing accessories such as vent stacks, drains,
fasteners and cements and coatings. These products allow us to provide customers with a complete roofing system
and the ability to market and sell extended guarantees.
We manufacture and market liquid-applied solutions for roofs, walls, pavements and other surfaces under
the HydroStop® family of liquid membrane products, United Coatings™ line of coating solutions, and StreetBond®
coatings for pavement. We believe these products are increasingly popular in the marketplace due to their reflectivity,
ease of application and energy efficiency.
We manufacture and market certain high-end modified bitumen products and liquid-applied roofing
solutions serving the North American market under the Siplast® brand name. We believe these products offer
superior quality and are one of the world's most advanced roofing and waterproofing systems.
Europe
In Europe, we are a leading manufacturer of roofing and waterproofing products for commercial roofs,
providing a comprehensive range of products, including bitumen membranes, synthetic single-ply membranes and
liquid-applied waterproofing. Supplementing these products, we also supply a wide range of accessories.
We provide bitumen membranes for customers in all market segments, from standard products to high-end
solutions, although we focus on the high-end and mid-market segments in most of our geographical markets. Our
22

bitumen-based products range from traditional felts and underlays to innovative energy-efficient and flame retardant
products. Bitumen membranes, which we believe are the dominant commercial roofing technology in Europe, are
used in building construction activities on a wide range of commercial roofing surfaces, including metal decking,
timber and concrete substrates. The key brands under which we manufacture or market our bitumen membranes
include Icopal®, Siplast®, Vedag® and Villas®.
We provide customers with a range of synthetic single-ply membranes, from standard products to high-
end solutions. With our Wolfin® brand in Europe, we cover the high-end segment of the market for synthetic single-
ply membranes. In addition, our Icopal® product range addresses the mid-market segment.
We market liquid-applied solutions in Europe including waterproofing, primers and adhesives, under a
family of brands including, among others, the EnduroflexTM, Elastoflex®, Profi-Dicht® and Sealoflex® brand names.
We believe these products are increasingly popular in the marketplace due to their reflectivity, ease of application
and energy efficiency.
Our commercial roofing accessories include skylights and smoke ventilation products, water outlets, metal
profiles, plastic components, fasteners and thermal insulation. The accessories are sold throughout Europe and are
either produced by us or purchased from external suppliers.
Aggregates, Specialty Construction and Other Products
Aggregates - North America
Through SGI, we produce mineral-based granules ("granules") and aggregate products, primarily supplied
to the residential and commercial roofing markets, from four leading-edge manufacturing facilities strategically
located across the United States. The granules are produced from rock products that are mined, crushed and then
colored using a proprietary semi-ceramic coating process. The granules provide weather resistance, aesthetic appeal,
protection from ultraviolet light, reflectivity and algae resistance.
Specialty Construction and Other Products - North America
In North America, we manufacture and market a variety of specialty construction products for the
professional and do-it-yourself remodeling and residential construction industries and other industries. These
products primarily consist of metal and fiberglass air distribution products for the HVAC (heating, ventilating and
air conditioning) industry and specialty glass products. We also manufacture a line of specialty coatings for various
industrial applications.
Specialty Construction and Other Products - Europe
In Europe, our civil engineering solutions include three fields: civil works, geomembranes and polymer
modified bitumen ("PMB"), and emulsions. Civil works provides waterproofing systems to prevent corrosion and
to protect the structure of roads, railways and bridges. Geomembranes can be used in civil engineering projects to
separate different layers of materials to prevent fluids such as water and chemicals from affecting the project's
structure. Geomembranes are also used to protect the groundwater from percolation from landfills or to seal water
reservoirs or wastewater lakes. Geomembranes are either bituminous or synthetic and include liners for concrete
and earthen canals. PMB and emulsions are used in road construction and maintenance. We market our civil
engineering services under Icopal®, Siplast®, Villas® and Vedag® brand names.
23

We also manufacture and supply ceramic and steel chimneys as well as energy systems in Europe. Our
ceramic chimneys are generally used for new residential construction, while our steel chimneys are typically used
in residential renovation and in some countries also for new residential construction. Our energy systems comprise
a range of ventilation, stoves and heating products, including chimney integrated stoves. These products are
marketed under the Schiedel® brand name.
Significant Accounting Policies
For a discussion of any changes to our significant accounting policies during the nine months ended
September 29, 2019, see Note 2, "Recent Accounting Pronouncements" in the Consolidated Financial Statements.
For a further discussion on our significant accounting policies, see Note 2, "Summary of Significant Accounting
Policies" in our annual audited financial statements for the year ended December 31, 2018.
Results of Operations
Roofing and waterproofing product sales is our dominant business, accounting for approximately 92% of
our consolidated net revenues for the nine months ended September 29, 2019. The main drivers of our roofing
business include:
• the aging housing stock;
• existing home sales;
• new home construction;
• larger new homes;
• home ownership rates;
• extreme weather; and
• energy efficiency concerns.
Our roofing and waterproofing business is also affected by raw material costs, including asphalt and other
petroleum-based raw materials, as well as energy, and transportation and distribution costs.
Third Quarter 2019 compared with

Third Quarter 2018
Net income in the third quarter of 2019 was $79.9 million compared to $128.7 million in the third quarter
of 2018. Net income in the third quarter of 2019 included $14.7 million after-tax ($24.7 million pre-tax) of
restructuring and other expenses and $29.2 million after-tax ($49.0 million pre-tax) of unrealized losses on
marketable securities compared to $21.7 million after-tax ($29.3 million pre-tax) of restructuring and other expenses
in the third quarter of 2018. Included in restructuring and other expenses for the third quarter of 2019 and 2018
were expenses primarily related to the closure of certain manufacturing facilities, the relocation of offices and past
acquisitions including the integration of acquired businesses into BMI. Excluding the impact of these items, net
24

income in the third quarter of 2019 was $123.8 million compared to $150.4 million in the third quarter of 2018.
The decrease in 2019 was primarily attributable to higher income tax expense, partially offset by higher income
before interest expense and income taxes.
Net revenues in the third quarter of 2019 were $1,613.9 million compared to $1,602.6 million in the third
quarter of 2018. The increase in 2019 was primarily due to higher average selling prices of roofing products,
partially offset by a decrease in impact from foreign currency translation.
Income before interest expense and income taxes in the third quarter of 2019 was $196.8 million compared
to $231.5 million in the third quarter of 2018. Excluding the impact of restructuring and other expenses and
unrealized losses on marketable securities, income before interest expense and income taxes in the third quarter
of 2019 was $270.5 million compared to $260.8 million in the third quarter of 2018. The increase in 2019 was
primarily due to higher average selling prices of roofing products and lower raw material costs, partially offset by
higher expenses.
Interest expense in the third quarter of 2019 was $62.8 million compared to $58.1 million in the third quarter
of 2018.
Nine Months 2019 compared with

Nine Months 2018
Net income in the first nine months of 2019 was $237.5 million compared to $355.6 million in the first
nine months of 2018. Net income in the first nine months of 2019 included $50.7 million after-tax ($73.2 million
pre-tax) of restructuring and other expenses and $72.3 million after-tax ($104.3 million pre-tax) of unrealized
losses on marketable securities compared to $50.6 million after-tax ($66.2 million pre-tax) of restructuring and
other expenses in the first nine months of 2018. Included in restructuring and other expenses for the first nine
months of 2019 and 2018 were expenses primarily related to the closure of certain manufacturing facilities, the
relocation of offices and past acquisitions including the integration of acquired businesses into BMI. Excluding
the impact of these items, net income in the first nine months of 2019 was $360.5 million compared to $406.2
million in the first nine months of 2018. The decrease in 2019 was primarily attributable to lower income before
interest expense and income taxes, partially offset by lower income tax expense.
Net revenues in the first nine months of 2019 were $4,751.7 million compared to $4,709.7 million in the
first nine months of 2018. The increase in 2019 was primarily due to higher average selling prices of roofing
products, partially offset by a decrease in impact from foreign currency translation.
Income before interest expense and income taxes in the first nine months of 2019 was $532.3 million
compared to $658.6 million in the first nine months of 2018. Excluding the impact of restructuring and other
expenses and unrealized losses on marketable securities, income before interest expense and income taxes in the
first nine months of 2019 was $709.8 million compared to $724.8 million in the first nine months of 2018. The
decrease in 2019 was primarily due to higher expenses and raw material costs, mostly offset by higher average
selling prices of roofing products.
Interest expense in the first nine months of 2019 was $189.6 million compared to $193.2 million in the
first nine months of 2018. Interest expense in the first nine months of 2018 included $6.4 million of debt
25

extinguishment costs related to a call premium and the write-off of the deferred financing costs associated with
the redemption of $182.1 million aggregate principal amount of 5 1/8% 2021 Notes in January 2018. Excluding
the impact of these debt extinguishment costs, interest expense in the first nine months of 2019 was $189.6 million
compared to $186.8 million in the first nine months of 2018.
Liquidity and Financial Condition
Liquidity and Seasonality
Sales of roofing and waterproofing products and specialty construction products in the northern regions of
North America and certain regions of Europe generally decline in the late fall and winter months due to cold
weather. In addition, extreme weather conditions can result in higher customer demand during our peak operating
season depending on the extent and severity of the damage from these weather conditions. Due to the seasonal
demands of our business, together with extreme weather conditions, we generally have negative cash flows from
operations during the first several months of our fiscal year, which are primarily driven by our cash invested in
both accounts receivable and inventories to meet these seasonal operating demands. Generally, late in the second
quarter and in the third and fourth quarters of our fiscal year, our cash flows from operations become positive, as
our investment in inventories and accounts receivable no longer continues to increase, as is customary in the first
several months of our fiscal year. Our seasonal working capital needs, together with our debt service obligations,
capital expenditure requirements and other contracted arrangements, adversely impact our liquidity during this
period. We rely on our cash and cash equivalents on hand and our $650.0 million senior secured revolving credit
facility due October 2020, which we refer to as our Senior Secured Revolving Credit Facility (see Note 6 to the
Consolidated Financial Statements), to support our overall cash flow requirements during these periods. We expect
to continue to rely on our cash and cash equivalents on hand and external financings to maintain operations over
the short and long term and to continue to have access to the financing markets, subject to the then-prevailing
market terms and conditions.
Cash Flows and Cash Position
Net cash outflow from operating and investing activities was $179.9 million during the nine months ended
September 29, 2019, including $208.4 million used for the purchase of investments, the investment of $183.7
million for capital programs, including maintenance, compliance and expansion capital, and $12.2 million for
related party loans, partially offset by $224.3 million provided by operating activities.
Cash invested in additional working capital totaled $424.5 million during the nine months ended September
29, 2019, reflecting increases in total accounts receivable of $328.0 million and inventories of $6.0 million due to
the seasonality of our business, $67.8 million in payments for restructuring and other expenses, a decrease of $11.8
million in accounts payable and accrued liabilities and a $10.9 million increase in other current assets. The net
cash flow provided by operating activities also included $73.2 million in restructuring and other expenses and a
$31.7 million increase in net receivables from related parties, partially offset by a $33.4 million increase in
noncurrent assets and a $4.0 million decrease in other operating items.
Net cash used in financing activities totaled $505.4 million during the nine months ended September 29,
2019, consisting of a dividend to parent corporation of $500.0 million and the repayment of long-term debt and
capital lease obligations of $5.4 million.
26

As a result of the factors described above, cash and cash equivalents decreased by $690.7 million during
the nine months ended September 29, 2019 to $725.6 million.
Debt Instruments, Financial Covenants and Restrictions
As of September 29, 2019, we had total outstanding consolidated indebtedness of $4,681.5 million, net of
$29.4 million of deferred financing fees, including $3.8 million that matures prior to September 29, 2020. We
anticipate funding the obligations due prior to September 29, 2020 principally from our cash and cash equivalents
on hand, cash flow from operations and/or borrowings under our Senior Secured Revolving Credit Facility. There
were no amounts outstanding under our Senior Secured Revolving Credit Facility as of September 29, 2019. As
of September 29, 2019, we were in compliance with all debt covenants and the net book value of the collateral
securing the Senior Secured Revolving Credit Facility and the 3% 2021 Notes was $1,690.1 and $647.6 million,
respectively.
As of September 29, 2019, we had available sources of liquidity of $1,345.5 million (including our cash
and cash equivalents on hand of $725.6 million), which is net of our outstanding letters of credit of approximately
$34.0 million, of which $10.5 million was issued in support of two of our affiliates (see Note 9 to the Consolidated
Financial Statements), subject to borrowing base availability as defined in our Senior Secured Revolving Credit
Facility agreement.
As of September 29, 2019 and December 31, 2018, we had $86.2 and $76.0 million, respectively, of accrued
interest payable related to our debt, which is included in accrued liabilities in our consolidated balance sheets.
Financial Instruments
See Note 7 to the Consolidated Financial Statements for a description of our financial instruments.
Related Party Transactions
See Note 9 to the Consolidated Financial Statements for a description of our related party transactions.
Commitments and Contingencies
See Note 10 to the Consolidated Financial Statements for information regarding commitments and
contingencies.
Subsequent Events
See Note 11 to the Consolidated Financial Statements for a description of our subsequent events.
Contractual Obligations
There have been no significant changes to our contractual obligations presented at December 31, 2018
during the third quarter and nine month periods ended September 29, 2019. For a further discussion on our
contractual obligations and our minimum purchase obligations, see Management's Discussion and Analysis of
27

Financial Condition and Results of Operations "Contractual Obligations and Commercial Commitments" in our
annual audited financial statements for the year ending December 31, 2018.
Recent Accounting Pronouncements
See Note 2 to the Consolidated Financial Statements for a discussion regarding accounting standards adopted
and not yet adopted.
***
Forward-Looking Statements
These quarterly unaudited Consolidated Financial Statements and notes thereto contain both historical and
forward-looking statements. These forward-looking statements are only predictions and generally can be identified
by use of statements that include phrases such as "believe," "estimate," "expect," "anticipate," "intend," "plan," "foresee"
or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-
looking statements. Our operations are subject to certain risks and uncertainties that could cause actual results to differ
materially from those contemplated by the relevant forward-looking statements. The forward-looking statements
included herein are made only as of the date of these quarterly unaudited Consolidated Financial Statements and notes
thereto, and we undertake no obligation to publicly update any forward-looking statements to reflect subsequent events
or circumstances. We cannot assure you that projected results or events will be achieved.
28

Q3 2019 Standard Industries Financial Statements

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Standard Industries Inc.

Consolidated Financial Statements

CONSOLIDATED FINANCIAL STATEMENTS

Notes to Consolidated Financial Statements (Unaudited)............................................................... 7

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Third Quarter Ended Nine Months Ended

Net revenues........................................ $ 1,613,922 $ 1,602,636 $ 4,751,726 $ 4,709,704

Costs and expenses:

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Third Quarter Ended Nine Months Ended

Net income ............................................. $ 79,938 $ 128,692 $ 237,466 $ 355,647

Comprehensive income .......................... $ 11,623 $ 132,145 $ 155,016 $ 288,014

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

September 29, December 31,

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended

Cash and cash equivalents, beginning of period ................................................................................. $ 1,416,244 $ 1,274,747

Cash flows from investing activities:

Cash flows from financing activities:

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - (Continued)

Nine Months Ended

Supplemental Cash Flow Information:

Cash paid during the period for:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 2. Recent Accounting Pronouncements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Note 3. Accumulated Other Comprehensive Income (Loss)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Other comprehensive income (loss)

Amounts reclassified from AOCI to

Note 4. Restructuring and Other Expenses

Inventories consist of the following:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Long-term debt consists of the following:

Borrowings under the Senior Secured Revolving

Guarantor Financial Information

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Note 7. Financial Instruments

Fair Value Measurements

December 31, 2018

Marketable Equity Investments

Foreign Currency Contract

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Equity-Method and Non-Marketable Equity Investments

Note 8. Warranty Claims

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Deferred Revenue and Extended Product Warranty

Note 9. Related Party Transactions

Loan receivable from related party ........................ $ 20,801 $ 8,410

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Affiliate Lease Arrangements

Sales and Purchases

Affiliate Management and Services Agreements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

Affiliate Letters of Credit

Note 10. Commitments and Contingencies

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (Continued)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND