Welcome to Investor Day November 11, 2010

Transcription

1 Welcome to Investor Day 2010 November 11,

2 Investor Day 2010 Michael McMurray Vice President, Investor Relations & Treasurer November 11,

3 Forward-Looking Statements and Non-GAAP Measures This presentation consists of this slide deck and the associated remarks and comments all of which are integrally related and are intended to be presented and understood together. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of Forward-looking statements are any statements that are not historical facts, and they are based upon the Company s current expectations. Because forward-looking statements involve risks and uncertainties, the Company s actual results could differ materially from those projected in these statements. Information regarding some of the risks and uncertainties that could cause such differences can be found in the Company s Securities and Exchange Commission ( SEC ) filings, including under Item 1A of the Company s Quarterly Report on Form 10-Q for the quarterly period ended June 30, For purposes of this presentation, any discussion referring to year to date or last twelve months ( LTM ) refers to the period ended September 30, Otherwise, the information in this presentation speaks as of November 11, 2010, and is subject to change. The Company does not undertake any duty to update or revise forward-looking statements. Any distribution of this presentation after November 11, 2010, is not intended and will not be construed as updating or confirming such information. This presentation contains references to certain non-gaap financial measures as defined by the SEC. A reconciliation of these non-gaap financial measures to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles can be found in our Current Report on Form 8-K furnished to the SEC on October 27, This Form 8-K and additional Company information is available on the Owens Corning website at Free cash flow is the change in net debt excluding the cash impact of issuing new stock, repurchasing treasury stock, and paying stockholder dividends. Net debt is total debt excluding the impact of the interest rate swap, less cash and cash equivalents. Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, net precious metal lease expense, and other items that management does not allocate to our segment results because it believes they are not a result of the Company s current operations. THE PINK PANTHER Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The color PINK is a registered trademark of Owens Corning Owens Corning. 3

4 Owens Corning Investor Day Delivering Earnings Growth Mike Thaman Chairman & Chief Executive Officer November 11,

5 Owens Corning at a Glance Founded in 1938, an industry leader in glass fiber insulation, roofing, asphalt, and glass fiber reinforcements LTM* 2010 sales: $5 billion 16,000 employees in 28 countries Senior debt ratings: BBB-, BBB- and Ba1 FORTUNE 500 company for 56 consecutive years NYSE: OC Component of the Dow Jones Sustainability World Index Leading North American Market Positions Residential Insulation Commercial & Industrial Insulation Manufactured Stone Veneer Residential Shingles Roofing Asphalts Global Leader Composites *As of Q

6 Three Years of Achievement Established a safer workplace a 49 percent improvement in the recordable incident rate Transformed our business portfolio divesting away from U.S. new residential construction and acquiring into global industrial markets Demonstrated the strength of our portfolio with earnings stability during a historically difficult economic cycle Managed headcount, costs and capital spending aggressively Reduced net debt by $500 million and completed $100 million share buyback over the past five quarters 6

7 Outlook for Growth U.S. growth expected to be slow Global GDP will be stronger, driven largely by developing economies Insulation revenue growth of 10+ percent annually is expected with a modest recovery in U.S. housing U.S. housing starts expected to reach 1 million or more by 2013 Roofing shingle market expected to grow 5 to 8 percent annually Remains below the 15-year average Composites revenues anticipated to grow 5 to 7 percent annually driven by global industrial production, especially in developing markets Source: Economy.com, Global Insights, HIRI, McGraw Hill, Moody s, U.S. Fiber Economic Bureau, Glass Fibre Europe and Owens Corning management estimates 7

8 What You Will Hear Today The Insulation business is a proven franchise that will return to profitability The Roofing business has been transformed The Composites business has entered a strong profitability cycle Owens Corning is positioned to deliver in excess of $1 billion of adjusted EBITDA in 2013 On the basis of strong earnings growth, free cash flow of $1 billion over the next three years is achievable 8

9 Building Materials Group Achieving Sustainable Improvements Karel Czanderna Group President, Building Materials November 11,

10 Building Materials Business Platform Attractive building materials businesses Aligned with winning customers across diverse channels Powerful brand Strong market positions 54 manufacturing sites 7,600 employees worldwide 10

11 Building Materials Group $5,000 Financial Performance Sales - Millions $ EBIT as % of Sales 25% $4,000 20% $3,000 15% $2,000 10% $1,000 5% $ LTM* Sustained operating performance in difficult markets 0% Source: Owens Corning SEC filings * As of Q

12 Building Materials Group Performance 2009 Investor Day Commitments Roofing Accomplishments Sustain strong margin performance Sustained margins over 20% Enhance product mix Grew laminate shingle mix Drive productivity Aggressive cost and capacity management Insulation Delivered $150 million of sustainable improvement since 2007 Operating at about 50 percent capacity utilization Capture value from channel strength Continue growth from regional diversity Built value with customers retail, contractor, and distribution channels Delivered record top-line growth and operating performance in Asia 12

13 Building Materials Group Strategic Direction Sustain strong Roofing performance Three-step plan for Insulation 1. Return to break-even 2. Demonstrate operating leverage with potential of $100 million or more of EBIT in 2013 on U.S. housing starts of 1 million+ 3. Achieve historical levels of profitability through the cycle Innovate to enhance the value we provide to our customers Managing the business for near- and long-term performance 13

14 Insulation Accelerating Return to Profitability Tom Quigley Vice President and General Manager, Residential Insulation November 11,

15 Whole-Home Energy Efficiency Solutions ProPink Loosefill Insulation PINK FIBERGLAS Insulation for Cathedral Ceilings PINK FIBERGLAS Batts EnergyComplete System with FIBERGLAS Insulation FOAMULAR Insulating Sheathing and PinkWrap House Wrap QuietR Ductboard Flexible Duct Media for HVAC Systems InsulDrain XPS Drainage Board QuietZone Noise Control Solutions FOAMULAR 250 Under Slab Rigid XPS Foam Fold-Form XPS Insulated Concrete Forming Systems InsulPink Basement Wall XPS Foam Insulation Complete solutions for energy and comfort 15

16 Commercial Building Envelope Solutions FOAMULAR THERMAPINK Roof and Roof Deck Insulation OptiLiner Banded Liner Metal Building Insulation Flame Spread 25 FIBERGLAS Insulation FOAMULAR Exterior Wall System FOAMULAR XPS Foundation Insulation Evolution Paper-Free Pipe Insulation Mechanical Systems QuietR Ductboard Flexible Duct Media Air Handling Systems FOAMULAR 600 Board Floor and Ceilings Insulating solutions for commercial markets 16

17 North American Insulation Industry Structure North American fiberglass insulation is a $2 billion market Three manufacturers represent 80 percent of the market Owens Corning is the No.1 producer North American extruded polystyrene (XPS) foam is a $600 million market Two manufacturers represent 85 percent of the market Owens Corning is the No. 2 producer Critical success factors Building science Largest national manufacturing footprint Channel access / diversity Commercial capability Owens Corning is the North American market share leader in insulation Source: Owens Corning management estimates; Principia Partners 2009 &

18 Owens Corning Insulation A Proven Franchise (% EBIT) 30% 20% 10% 0% -10% % EBIT Avg. % EBIT (15%) EBIT Margin Range Demonstrated average 15% EBIT margin performance Source: Owens Corning management estimates and Owens Corning SEC filings, comparability may differ over time 18

19 Insulation Markets End Use Markets Percent of Portfolio* U.S. & Canada Residential New Construction (60% 36%) Market Attributes Cyclical business Multiple distribution channels Strong contractor customer base Expected Market Growth Drivers Housing starts Building energy code adoption Household formation Revenue CAGR % U.S. & Canada Repair & Remodel (13% 22%) Diverse contractor & DIY customer base Project focused Big Box retail Aging housing stock Energy efficiency policies Existing home sales > 5% U.S. & Canada Commercial & Industrial (19% 25%) Broad end-market applications Engineered product solutions Total building system focused Code and green specification driven Owner operator focus Accessible financing 5-10% International (8% 17%) Focus: Latin America and Asia Pacific Strong long-term economic growth Emerging building code development Growing middle class Infrastructure improvements Urbanization of China 5-10% 10% annual revenue growth achievable with 1 million+ U.S. starts by 2013 Source: Economy.com, Global insights, HIRI, McGraw Hill, Moody s, Owens Corning management estimates * By sales revenue 19

20 Insulation Performance Priorities Deliver customer inspired innovation Manage our capacity with demand regionally Drive operating leverage Accelerate our return to profitability 20

21 Customer Inspired Innovation Home Innovations Whole-Home Insulation & Air Sealing System High-Yield Loosefill Insulation for Attics and Walls Energy Efficiency Accessories High-Performance Wall Insulation Solutions Commercial Innovations Metal Building OptiLiner System Evolution Paper-Free Pipe Insulation Commercial Roofing Solutions FEWEIS Wall System Green Product Innovations Certified 50% Recycled Content Certified 30% Post-Consumer (PINK Fiberglas Insulation) New Zero Ozone- Depletion Formula Continuous Technology Development 21

22 Owens Corning North American Fiberglass Insulation Network All lines operating Some lines down Facility mothballed Edmonton Toronto Candiac Network Management Optimize capacity footprint for low cost / best service Santa Clara Salt Lake City Eloy 11% capacity - mothballed 26% capacity - lines down 11% capacity - reduced production rates Quick start-up capability Kansas City Waxahachie Readiness to serve as markets return back to their potential Delmar Mt. Vernon Newark Fairburn Approximately 50% capacity utilization 2010 YTD Source: Owens Corning management estimates based on 2010 year-end configuration 22

23 Demonstrating Operating Leverage 70 percent negative operating leverage from 2006 to LTM 2010* Net sales declined $788 million EBIT declined $553 million 50 percent positive operating leverage expected to 2013 and beyond: Residential market and volume recovery Cost and capacity discipline Price realization Recovery of non-residential businesses Positioned to capitalize on growth opportunities Source: Owens Corning management estimates and Owens Corning SEC filings, comparability may differ over time * As of Q

24 Roofing Sustaining Growth Through Any Cycle Sheree Bargabos President, Roofing and Asphalt November 11,

25 Roofing Products a Premium Roofing Shingles b Hip & Ridge Shingles b a f c d e f Starter Shingle Products WeatherLock Ice and Water Barrier Underlayment VentSure Ventilation Products d e g h Undereave Ventilation Products RapidFlow Gutter Drainage i AttiCat Expanding Blown-in PINK Fiberglas Insulation i h c Trumbull Asphalt g 25

26 Roofing $3,000 Financial Performance Sales - Millions $ EBIT as % of Sales 30% $2,500 $2,000 25% 20% $1,500 $1,000 15% 10% $500 $ LTM* Outstanding performance in a down market 5% 0% Source: Owens Corning SEC filings * As of Q

27 U.S. Steep-Slope Roofing Market Composite Wood Tile Slate Installed Cost of a Typical Roof Metal $35,000 $30,000 $30,000 $25,000 $20,000 $15,000 $12,000 $15,000 $17,000 $19,000 Asphalt Shingles $10,000 $5,000 $8,000 $8 Billion Market $0 (excludes roofing accessories) Asphalt Tile Metal Wood Composite Slate Asphalt shingles the product of choice Source: Owens Corning management estimates based upon Principia Partners, 2010 study Average roof size of 30 squares 27

28 U.S. Asphalt Shingle Industry is Attractive Large market $7 billion including accessories Steady growth driven by aging housing stock 130 million units Reroof represents 75 to 85 percent of demand with volatility from storm activity and new construction Materials represent majority of delivered product cost Industry is well structured Source: Owens Corning management estimates based upon historical ARMA data, and Ducker Worldwide study commissioned by Owens Corning in

29 U.S. Asphalt Shingle Industry Consolidation 70s 80s 90s Current OC OC OC OC FRY GAF GAF GAF GAF/ELK ELK ELK ELK CERTAINTEED CERTAINTEED CERTAINTEED CERTAINTEED TAMKO TAMKO TAMKO TAMKO CELOTEX CELOTEX CELOTEX MANVILLE MANVILLE IKO IKO IKO IKO BIRD BIRD ATLAS ATLAS ATLAS GEORGIA PACIFIC GEORGIA PACIFIC GEORGIA PACIFIC ATLAS FLINTKOTE GENSTAR GS ROOFING GLOBE GLOBE GLOBE PABCO PABCO PABCO PABCO MALARKEY MALARKEY MALARKEY MALARKEY LUNDAY THAGARD LUNDAY THAGARD CUSTOM ROOFING BIG CHIEF BEAR PHILIP CAREY CUSTOM ROOFING 90% Total A favorable industry structure for the future Source: Owens Corning management estimates and various industry sources and publications 29

30 U.S. Asphalt Shingle Market Demand CAGR +3% -9% MM Sqs Re-roof New Construction Major Storms yr '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10F Avg Total Industry volume for 2010 at historic low Source: ARMA data through Q2 2010, Owens Corning SEC filings 30

31 Competitive Advantage Passionate focus on customers Strong brand recognition across homeowners and contractors Strong product offering in the heart of the market National, flexible asset base Vertical integration glass and asphalt Winning with our customers and delivering sustainable shareholder value 31

32 Roofing Manufacturing Network Portland Minneapolis Denver Danville Granite City Summit Brookville Toledo Medina Granville Kearny Roofing Compton Roofing Asphalt World Headquarters Science and Technology Amarillo Oklahoma City Irving Ft. Smith Houston Memphis Jackson Atlanta Savannah Aiken Jacksonville Glass Reinforcements Glass Fiber Glass Mat A national network to win with our customers 32

33 Roofing s Sustainable Margin Improvement 46% 27% 27% Product Mix: New product lines Accessory products Shingle Technology: Redesign of shingle Stronger and lighter product 28% Productivity: Material/process efficiency Fixed cost reduction Energy efficiency $150 million of sustainable improvement since 2007 $50 million more than original goal Source: Owens Corning management estimates 33

34 Roofing Profitability Annual EBIT Margin 35% 30% 25% 20% 15% 10% 5% 0% Base Margin 13% 5% '99-'07 Avg Avg Current LTM* EBIT Margin 24% 8% Sustainable Improvements Average margin of 5 percent from 1999 to 2007 $150 million in sustainable improvements since annual margin guidance remains greater than 20 percent Market growth supports $2 billion revenue outlook A great business in a great industry that supports long-term annual margins of mid-teens or better The Roofing business has been transformed Source: Owens Corning SEC filings and management estimates, comparability may differ over time * As of Q

35 Roofing s Strategic Priorities Delivering innovative roofing solutions Driving cost improvements Maintaining margin discipline Capitalizing on market recovery 35

36 Q & A Karel Czanderna Group President, Building Materials Tom Quigley Vice President and General Manager, Residential Insulation Sheree Bargabos President, Roofing and Asphalt 36

37 Investor Day

38 Composites Business Leverage and Growth Chuck Dana Group President, Composite Solutions November 11,

39 Current State Recovered from historic downturn Leverage and growth through 2010 and beyond Increasing capacity utilization, fully leveraging our existing manufacturing network Continuing pricing actions Growing in BRIC countries Expecting double-digit margins in Q Targeting mid-teen margins over the medium term (3 to 5 years) Source: Owens Corning management estimates 39

40 Business Priorities Drive cost and operational efficiency Grow through China and Russia expansions Build on integrated platform for downstream businesses Differentiate product offering for our customers Innovate to transform markets Positioned to win with customers and grow profitability 40

41 Composites Business Positioned for Growth Bob Krakowiak Vice President, Finance, Composite Solutions November 11,

42 Composites Essential to Everyday Life Applications Properties Products Lightweight Energy efficient Durable (non-corrosive) High strength Reduces emissions Fatigue resistant Safe (non-conductive) Design flexibility Specialty Woven Roving Assembled Roving Direct Roving Chopped Strands High Performance Mat Non-Woven 42

43 Composites Group Portfolio Glass Reinforcements Technical Fabrics Specialty Glass Mats Americas Europe Asia Downstream businesses operating globally Leading share position in composites glass market 43

44 Only Provider With a Global Footprint Revenue YTD Q International 64% U.S. and Canada 36% 7,500 employees worldwide 37 plants in 15 countries Brazil (3), Russia (2), India (3), China (5) Mexico (2) 5 R&D centers on three continents Incredible footprint Source: Owens Corning management estimates 44

45 Reinforcements Manufacturing Process Raw Materials Furnace Forehearth Channel Batch House Tooling (Bushings) Forming & Coating Chopping & Winding Fabrication 45

46 What is a Composite? An engineered material system Reinforcements + Other Materials Glass 95%* Other Resins Additives Filler resulting in unique attributes replacing traditional materials *Owens Corning management estimates 46

47 Competitive Reinforcements in Key Markets Aerospace & Defense Carbon Kevlar Performance Index Energy & Construction OC Advantex Ballistics OC S-glass OC R-glass OC Carbon-Enhanced Reinforcements Under Development S2-glass OC H-glass 0 E-glass Marine & Roofing Price Index Owens Corning products Competitive products Source: Owens Corning management estimates Kevlar is a registered trademark of E.I. du Pont de Nemours and Company or its affiliates 47

48 Industry*-Leading Technology Material Cost/Ton Energy/Ton Asset Efficiency 30% 30% 50% Industry* OC Best-in- Class Industry* OC Best-in- Class Industry* OC Best-in- Class Capital efficiency drives higher margins Source: Owens Corning management estimates * Industry represents Owens Corning management estimates of other industry technology based on the two largest glass producers in the world as of November

49 Composites $750 Three-Year Financial Performance Sales - Millions $ EBIT as % of Sales 15% $650 10% $550 5% $450 0% $350-5% $250 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Leverage and grow to mid-teen operating margins -10% Source: Owens Corning SEC filings 49

50 Leading Indicators of Composites Demand Short-term indicators (short-cycle business) Customer inventory Backlog Regional demand profile Order book Longer-term indicators Industrial production indices WTI crude prices Automotive and light-vehicle production U.S. existing home sales 50

51 A Strong Outlook for Glass Reinforcements +7% CAGR +5% CAGR +5% CAGR +5-7% CAGR Past Downturns -12% Global Reinforcements Volume -2% -7% Forecast Asia Pacific Rest of the world Demand now exceeds levels seen prior to Q economic downturn Source: U.S. Fiber Economic Bureau, Glass Fibre Europe, Owens Corning management estimates 51

52 Owens Corning s Market Position Markets Key Applications The Owens Corning Advantage Energy Solutions Transportation & Consumer Construction Wind Blades Pipe Repair Building Interiors Mufflers CNG Tanks Water & Chemical Piping Under-the-Hood & Body Panels Battery Separators & Electronics Invention and Innovation Product Breadth and Quality Roofing Systems Oil & Gas Pipelines Boat Hulls, Bus & Truck Panels Appliances, Leisure Equipment Global Footprint Global leader serving diverse and growing customers 52

53 Composites Business Leverage and Growth Arnaud Genis Vice President and Managing Director, Europe November 11,

54 Leverage and Growth Leveraging regional strengths BRIC country expansion European anti-dumping response Accelerating our wind strategy Ultrablade high-performance fabric for wind applications Developing the next big applications Pipe repair Concrete reinforcements 54

55 Uniquely Positioned in Emerging Markets Strong position in BRIC countries: First-mover advantage in key regions Consolidated market structure Higher EBIT margins than average of our composites business High market growth in BRIC countries Positioned to capitalize on growth in emerging markets Source: Owens Corning management estimates 55

56 China Capacity Expansion Fastest-growing market for composites materials growing at 10 percent per year OC is No. 1 in wind, No. 4 overall Represents 5 to 10 percent increase in Owens Corning s global capacity Four benefits: Top-line growth Low-cost capacity Releases capacity in N.A. / Europe Reduces logistics cost On-track for startup at year-end 2010 Source: Owens Corning management estimates 56

57 U.S., Brazil, India, Russia U.S. Brazil India Russia Market Position #1 #1 #1 #1 GDP (billion USD) 14,630 1,998 1,604 1,477 Population (million) , Reinforcements Growth Rate ( ) Glass Fiber Reinforcement Composites Demand Per Capita (40% glass, 60% resin) 4-5% 8-10% 18-22% 15-20% 4.5 kg 1.3 kg 0.2 kg 0.9 kg Brazil, India and Russia will provide substantial growth Source: IHS Global Insight, Owens Corning management estimates 57

58 EU Anti-Dumping Status Share of Chinese competitors in Europe peaked at 21 percent The EU Commission ruled favorably with respect to establishing provisional dumping duties (43 percent) on Chinese fibers Final ruling expected in March 2011 Owens Corning is responding by: Leveraging the EU asset base even further Exporting to Europe from other regions to ensure customer demand is met Source: Owens Corning management estimates 58

59 Wind Energy: Leveraging Our Unique Position GW* GW* North America 5.6 Brazil 0.2 India 1.6 China 3.3 ROW 1.5 North America 5.0 Brazil 0.3 India 2.0 ROW 0.3 EU 8.3 EU 7.0 China 15.0 Global wind energy continues to grow at a fast pace BRIC countries now account for more than 50 percent of the market Owens Corning is the only integrated manufacturer (glass and fabrics) with presence in all BRIC countries *Gigawatt Source: 2007 chart is based on Emerging Energy Research and the 2010 chart is based on Owens Corning management estimates 59

60 Vertical Integration Provides Unique Competitive Advantage Glass Producer Fabrics Blade Production Turbine / Design Assembly Blade Design By leveraging materials science, Owens Corning developed a new standard for the industry: longer, thinner, lighter blades Vertical integration enables six sigma solutions that improve competitiveness of blade producers Owens Corning is the only global integrated manufacturer with glass and fabrics plants 60

61 Pipe Renovation Market World s infrastructure is in dire need of investment: 10 to 25% of all pipes in the developed world (sewer & water) are leaking* Legislation is forcing repair of the aging infrastructure In situ pipe repairs are more cost effective and cause less disruption Dig No Dig- For Sewer No Dig- For Sewer & Water Pipes Current Solutions Future Solutions * Ducker market survey for Insituform Europe (2010) 61

62 Reinforced Concrete Market Fibers are used to reinforce concrete and prevent cracks Cemfil alkali-resistant (AR) glass fiber reduces time and labor compared to steel Cement Walls Soccer City Stadium Industrial Flooring Residential Flooring Poles Tunnels Cemfil provides a large opportunity during the next five years 62

63 Leverage and Growth Leveraging regional strengths Developing the next big applications Accelerating our strategy on specialties 63

64 Composites Business Leverage and Growth Chuck Dana Group President, Composite Solutions November 11,

65 Leverage and Growth Exiting 2010 with strong run-rate 2011 Leverage existing capacity through performance and price Execute on current capacity additions in China and Russia 2012 and beyond Deliver high-return capacity additions in developing markets Leverage margins on top-of-the-pyramid value-added products Targeting mid-teen operating margins 65

66 Q & A Chuck Dana Group President, Composite Solutions Bob Krakowiak Vice President, Finance, Composite Solutions Arnaud Genis Vice President and Managing Director, Europe 66

67 Financial Strategy Disciplined Financial Management Duncan Palmer Chief Financial Officer November 11,

68 2010 Guidance Owens Corning is on track to deliver adjusted EBIT of $360 to $390 million in 2010 Depreciation and amortization expense will be approximately $325 million Capital spending estimated to be less than depreciation and amortization expense Cash taxes expected to be below $25 million in 2010 General corporate expense expected to be $80 to $90 million 68

69 Sustained Focus on Shareholder Value Growing operating earnings Driving free cash flow Sustaining strong balance sheet Maintaining a disciplined capital allocation strategy Optimizing value of tax net operating losses 69

70 Sustaining a Strong Balance Sheet Maintaining investment grade financial policy is a pillar of Owens Corning s strategy Reduced net debt by $500 million since Q Refinanced bank facilities in Q Repaid $600 million bank term note Sustaining ample liquidity to support growth No significant debt maturity until Q Plenty of headroom with respect to covenants Ensuring capital markets remain open to Owens Corning 70

71 Disciplined Capital Allocation Strategy Drive shareholder returns by enabling organic growth and supporting the balance sheet Sustain disciplined approach to capital investment Sustain readiness to serve markets at their full potential Pursue organic growth opportunities (especially in composites) CapEx in line with depreciation and amortization over the long term Return capital to shareholders through share buybacks Expect to complete existing authorization by 2012 Seek M&A opportunities that enhance shareholder value Owens Corning has a successful track record 71

72 M&A Disciplined Acquirer Focused on proprietary situations Acquisition criteria include: Owens Corning is a better owner Strong businesses that operate in well-structured industries Attractive return on capital 72

73 Tax Position is a Significant Asset Will deliver cash tax savings of approximately $75 million per year for 2009 and 2010 Estimated net present value of U.S. NOL is $650 million or approximately $5 per share Expect long-term book tax rate of 25 to 28 percent based on mix of earnings and tax planning Expect cash tax rate below 10 percent until NOL is fully utilized 73

74 $1 Billion Free Cash Flow Over 2011 to 2013 Current 2010 adjusted EBIT guidance of $360 to $390 million translates to about $700 million in adjusted EBITDA Outlook for market recovery and business performance supports adjusted EBITDA of $1 billion or more in 2013 Based on this earnings outlook, $1 billion free cash flow is achievable over the period from 2011 to 2013 Capable of supporting growth plans across the portfolio with CapEx at 110 percent of depreciation and amortization over the period Project cash taxes to be no more than 10 percent as a result of our tax position Continue disciplined cost and working capital management 74

75 Q & A Mike Thaman Chairman & Chief Executive Officer Duncan Palmer Chief Financial Officer 75

76 Owens Corning Investor Day Mike Thaman Chairman & Chief Executive Officer November 11,

77 What You Heard Today The Insulation business is a proven franchise that will return to profitability The Roofing business has been transformed The Composites segment has entered a strong profitability cycle Owens Corning is positioned to deliver in excess of $1 billion of adjusted EBITDA in 2013 On the basis of strong earnings growth, free cash flow of $1 billion over the next three years is achievable 77

78 Investor Day