owens corning positioned for...

Owens CorningPositioned for Growth

Q1 2015This presentation shared at the following events:

3/17/15 Owens Corning Roadshow – New York Thierry Denis, Vice President Investor Relations

3/12/15 OC Roadshow Hosted by Longbow – Boston Brian Chambers, President Roofing & Asphalt Business

2/26/15 Barclay’s Symposium – New York Michael McMurray, Chief Financial Officer

2/24/15 OC Roadshow Hosted by SunTrust – Dallas & Houston Michael McMurray, Chief Financial Officer

2/18/15 OC Roadshow Hosted by JP Morgan – Paris, Frankfurt & Zurich Arnaud Genis, President Composites Business

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 the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as “anticipate,” “appear,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “should,” “seek,” “will,” and other terms of similar meaning or import in connection with any discussion of future operating, financial or other performance that reference future periods. We caution you against relying on these statements as they involve risks and uncertainties that are difficult to predict and the Company’s actual results may differ materially from those projected in these statements. Our future performance may be affected by risks and uncertainties including, without limitation, levels of residential and commercial construction activity; competitive and pricing factors; levels of global industrial production; demand for our products; relationships with key customers; industry and economic conditions that affect the market and operating conditions of our customers, suppliers or lenders; our level of indebtedness; weather conditions; availability and cost of credit; availability and cost of energy and raw materials; issues involving implementation and protection of information technology systems; international economic and political conditions, including new legislation or other governmental actions; our ability to utilize our net operating loss carry-forwards; research and development

Forward-Looking Statements and Non-GAAP Measures

including new legislation or other governmental actions; our ability to utilize our net operating loss carry-forwards; research and development activities and intellectual property protection; foreign exchange and commodity price fluctuations; interest rate movements; labor disputes and litigation; uninsured losses; issues related to acquisitions, divestitures and joint ventures; achievement of expected synergies, cost reductions and/or productivity improvements; defined benefit plan funding obligations; and, factors detailed from time to time in the Company’s U.S. Securities and Exchange Commission (“SEC”) filings.

For purposes of this presentation, any discussion referring to “year to date” or last twelve months (“LTM”) refers to the period ended on the last calendar day of the quarter preceding the date of the investor event referred to on the first page of this document. Otherwise the information in this presentation speaks as of the date of the investor event, and is subject to change. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by federal securities laws. Any distribution of this presentation after the date of the investor event is not intended and should not be construed as updating or confirming such information.

This presentation contains references to certain "non-GAAP financial measures" as defined by the SEC. Management uses non-GAAP measures for various purposes, including reporting results of operations to the Board of Directors, analysis of performance and related employee compensation measures. Although management believes these measures, and exclusions from GAAP therein, provide a usefulrepresentation of performance, non-GAAP measures should not be considered in isolation or as a substitute for GAAP measures. 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 Appendix A. Adjusted EBIT is earnings before interest, taxes 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.

2

Owens Corning at a Glance

� Founded in 1938, an industry leader in glass fiber insulation, roofing and glass fiber reinforcements

� 2014 net sales: $5.3 billion

� 14,000 employees in 25 countries

� Fortune 500 company for 60 consecutive years

� Component of Dow Jones Sustainability World Index for five consecutive years

3

Investment Highlights

Composites Roofing Insulation

4

Three Market-Leading Businesses

Market-leading business with improving economic

conditions and higher utilization rates

Strong market position in

consolidated industry

Progress supports confidence in return to historical profitability

Full-Year 2014 Highlights and Outlook

� Maintained a very high level of safety performance in 2014

� Board declared 6% dividend increase

� Delivered adjusted EBIT of $412 million

� Insulation delivered 14th consecutive quarter of EBIT growth; increased full-year EBIT by $68 millionincreased full-year EBIT by $68 million

� Composites delivered 6th consecutive quarter of EBIT improvement; grew 2014 earnings by 50%

� Roofing achieved commercial objectives for the second half

� Anticipate continued growth in U.S. housing starts and global industrial production in 2015

5

’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14

Insulation

Strong PortfolioPositioned for Growth

Roofing

Composites

Sources: Owens Corning’s SEC filings since 2006 . For comparability purposes, prior years have been provided based on Owens Corning’s SEC filings, internal management reports, and management estimates.

6

Margin >= 10% 0%<= Margin < 10% Margin < 0%

Insulation Business

Q4 & Full-Year 2014 Highlights� Delivered full-year EBIT of $108 million, a $68

million increase versus last year

� Achieved operating leverage of over 50% in 2014

� Expect 2015 results to benefit from growth in U.S. new construction, pricing, and operating leverage

$ (in millions) Q4 2014 Q4 2013 2014 2013

Net sales* $490 $466 $1,746 $1,642

EBIT $46 $39 $108 $40

EBIT as % of sales

9% 8% 6% 2%

D&A $25 $25 $101 $104

2014 Revenue by End Market*

7

* before inter-segment eliminations

-10%

-5%

0%

5%

10%

$0

$500

$1,000

$1,500

$2,000

2010 2011 2012 2013 2014

Five-Year Financial Performance

Sales* EBIT as % of sales*In millions

International

16%

U.S. & CanadaNew Residential

Construction

40%

U.S .& CanadaResidential Repair

& Remodeling

20%

U.S. & CanadaCommercial& Industrial

24%

*Owens Corning management estimates; estimated error margin below 5%

Source: Owens Corning management estimates and Owens Corning SEC filings; comparability may differ over time


Owens Corning Insulation EBIT Progress

039

4

18

39

1

18

43 47

$0

$20

$40

EB

IT in

Mil

lio

ns

of

Do

lla

rs

Q1 Q2 Q3 Q4

8

Consistent Quarterly EBIT Progression Since 2011

-47-38

-12

-34

-16-21

-$80

-$60

-$40

-$20

2011 Actual 2012 Actual 2013 Actual 2014 Actual

Source: Owens Corning quarterly and annual SEC filings

EB

IT in

Mil

lio

ns

of

Do

lla

rs

20%

30%

EBIT Margin Avg EBIT Margin '85-'08 (15%)

Owens Corning InsulationWell Positioned to Return to Historical Margins

-10%

0%

10%

'84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14

9Source: Owens Corning management estimates and Owens Corning SEC filings, comparability may differ over time;

Historically Delivered 15% EBIT Margins at 1.5 Million Housing Starts

2015 Industry Capacity Utilization

70%

80%

90%

60%

80%

100%

Insulation IndustryNorth American Fiberglass

0%

20%

40%

Total Capacity Operating Plants Operating Lines

10

Capacity Utilization Tightening as U.S. Housing Recovers

Source: Owens Corning management estimates as of February 2015 rounded to nearest 5%. Products sold primarily to North American residential market. Excludes heavy density and loosefill products. Based on 2015 estimate of 1.1MM unlagged U.S. housing starts and other macro assumptions.

Toronto

Edmonton

Delmar

Candiac

Owens Corning Insulation North American Fiberglass Network

Eloy

Santa Clara

NewarkKansas City

WaxahachieFairburn

Mt. Vernon

Nephi

Lakeland

Continued Discipline in OC Capacity Management

Capacity utilization based as on estimated average 2015 total insulation production using melter capacitySource: Owens Corning management estimates 11

2015 Estimated Average Utilization:

Near full capacity

Below full capacity

Not in operation

Positioned to Grow with Our Markets

Insulation End-Use Markets

% of Full-Year 2014 Revenue

Expected Market Growth Drivers

Mid-Term Growth

U.S. and CanadaResidential New Construction

40%

U.S. and CanadaRepair and Remodel

� Housing starts� Building energy code adoption� Household formation

� Aging housing stock

12Source: Owens Corning management estimates.

Repair and Remodel20%

U.S. and CanadaCommercial and Industrial

24%

Latin America and Asia Pacific

16%

� Aging housing stock� Energy efficiency policies

� Code and “green” specification driven

� Owner/operator focus

� Growing middle class � Infrastructure improvements� Urbanization of China

Targeting Double-Digit Revenue Growth as Market Recovers

Roofing Business

Q4 & Full-Year 2014 Highlights� Full-year margins declined 7% on lower volumes

and prices

� Achieved commercial objectives for the second half

� Market dynamics in the first half of 2015 will largely determine how the Roofing business performs versus last year

$ (in millions) Q4 2014 Q4 2013 2014 2013

Net sales* $340 $381 $1,748 $1,967

EBIT $32 $55 $232 $386

EBIT as % of sales

9% 14% 13% 20%

D&A $9 $10 $39 $38


13


0%

5%

10%

15%

20%

25%

30%

$0

$400

$800

$1,200

$1,600

$2,000

$2,400

2010 2011 2012 2013 2014


Sales* EBIT as % of sales*In millions


Construction

10%

U.S. & CanadaResidential Repair

& Remodeling

73%


16%

*Owens Corning management estimates; estimated error margin below 5%


International

1%

U.S. Asphalt Shingle Industry Consolidation

’70s ’80s ’90s Current

OCFRYGAFELK

CERTAINTEEDTAMKO

CELOTEXMANVILLE

IKOBIRD

ATLAS

OCGAFELK

CERTAINTEEDTAMKO

CELOTEXMANVILLE

IKOBIRD

ATLASGEORGIA PACIFIC

OCGAFELK

CERTAINTEEDTAMKO

CELOTEXIKO


GS ROOFING

OCGAF/ELK

CERTAINTEEDTAMKO

IKOATLASPABCO

MALARKEY

Source: Owens Corning management estimates and various industry sources and publications 14

Top 90% 16 13 10 4

Total 21 17 13 8


FLINTKOTEGLOBEPABCO

MALARKEY

LUNDAY THAGARDCUSTOM ROOFING

BIG CHIEFBEAR

PHILIP CAREY

PABCOMALARKEY

LUNDAY THAGARDCUSTOM ROOFING

GEORGIA PACIFICGENSTAR

GLOBEGLOBEPABCO

MALARKEY

MALARKEY

Favorable Industry Structure for the Future

New construction

Re-roof Demand

Major StormsMM Sq.

U.S. Asphalt Shingle Market

Total Existing Home Sales

MM

33

3 27

8

18

8

322

17

6

1911

6 6

7.5180

Total 143 136 143 144 154 161 173 155 129 135 120 108 122 118 111 107

15Source: Asphalt Roofing Manufacturers Association, Summary of Asphalt Roofing Industry Shipments. National Association of Realtors existing home sales and Owens Corning management estimates

33 30 31 32 34 37 39 3526

17 11 11 11 14 17 18

107103

109 110 113116 116

112

100

9693 91 93 94

8883

0.00'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

Strong Market Position in Consolidated Industry

� Track record of strong financial performance

– Delivered average operating margins in excess of 20% during 2009-2013 period

� Re-roof demand over the last few years has been sluggish

– Housing activity forecasts support some demand growth– Housing activity forecasts support some demand growth

– Glass fiber mat and laminate advancements in the 1980s and 1990s could be extending replacement cycle

� Soft demand and competitive activity put pressure on margins in 2014

� Strong market position; outlook for 2015 largely determined by competitive pricing dynamics, asphalt cost deflation, and market demand

16

Composites Business

Q4 & Full-Year 2014 Highlights� Achieved $149 million of EBIT in 2014; grew

earnings by 50% versus last year

� Delivered $32 million of price benefit in 2014, with six consecutive quarters of improvement

� In 2015, expect price to drive majority of EBIT improvement

$ (in millions) Q4 2014 Q4 2013 2014 2013

Net sales* $464 $461 $1,935 $1,845

EBIT $53 $36 $149 $98

EBIT as % of sales

11% 8% 8% 5%

D&A $30 $31 $129 $130


17


-5%

0%

5%

10%

15%

$0

$600

$1,200

$1,800

$2,400

2010 2011 2012 2013 2014


Sales* EBIT as % of sales*In millions*Owens Corning management estimates; estimated error margin below 5%



International

61%


Construction

3%

U.S. & CanadaResidential Repair

& Remodeling

8%


28%

Glass Fiber A $7.5 Billion Global Market

Construction34%

Consumer16%

Wind9%

• Residential• Commercial• Water transportation

& storage

• Appliances• Electronics• Recreation

18

Transportation28%

Industrial13%

Glass reinforcements market defined as glass fiber reinforcements and direct conversion products as consumed, excluding yarnsSource: Owens Corning management estimates as of Feb 2015

• Cars• Trucks, buses, trains• Marine

• Factories• Mining• Offshore platforms

A Key Material Enabling Solutions Essential to Everyday Life

Owens Corning Composites

� Global megatrends, continued growth in industrial production, and material substitution support glass fiber market growth at a 5-7% CAGR Price RealizationPrice Realization

Cost LeadershipCost Leadership

� Strategic focus on core building material markets with sustainable solutions

� Clear agenda to deliver improved returns

19Source: Owens Corning management estimates as of February 2015

Leader in an Industry Entering a Phase of Supply Tension

Product LeadershipProduct Leadership

Capital EfficiencyCapital Efficiency

Owens Corning CompositesPositioned to Win

#1 Position Emerging Position

25%30%

% Market

Revenue

% OC

Revenue

Europe

26%

10%

% Market

Revenue

% OC

Revenue

China

20Sources: Owens Corning management estimates

% Market Revenue = market revenue in region as % of 2014 global market size % OC Revenue = OC revenue in region as % of OC Composites global 2014 salesGlass reinforcements market defined as glass fiber reinforcements and direct conversion products as consumed, excluding yarns

#1 Position

#1 Position

Leading Market Positions and an Unrivaled Supply Network

OC glass fiber manufacturing siteOC downstream fabrication site

34%

46%

% Market

Revenue

% OC

Revenue

Americas

15% 14%

% Market

Revenue

% OC

Revenue

Rest of World

3,000

4,000

5,000

Glass Fiber Market DemandG

lass F

iber

K T

on

s

Glass Fiber Demand Has Grown at 1.6 Multiple of Industrial Production Growth

-

1,000

2,000

1981 1992 2003 2014

21

Gla

ss F

iber

K T

on

s

Glass fiber market demand excludes E-glass yarnsSources: Fiber Economics Bureau, Glass Fiber Europe, Global Trade Information Services, Inc. and Owens Corning management estimates

Historical Glass Fiber Market Growth Averaging 5%

1.1

1.7

80%

90%

100%

2004 2006 2008 2010 2012 2014 2016

Glass Fiber Industry Estimated Capacity

90% Threshold

Est

ima

ted

Ca

pa

city

Uti

liza

tio

n

China Emergence

Capacity Overbuild

Macro Adjustment

Excess Inventory

Supply Tension

Improved Returns

0.5

1.1

0.8

0.4

0.5

2005-09 2010-12 2013-16

50%

60%

70%

80%

22

Tighter Capacity Environment Expected in the Near Term

Glass fiber market demand excludes E-glass yarnsSources: Fiber Economics Bureau, Glass Fiber Europe, Global Trade Information Services, Inc. and Owens Corning management estimates as of February 2015

(high probability additions)

0.1/ yr 0.3/ yr 0.1/ yr 0.1/ yr0.4/ yr 0.2/ yr

Change in global demand (MM T)

Change in global capacity (MM T)

Est

ima

ted

Ca

pa

city

Uti

liza

tio

n

Owens Corning Composites Focused on Creating Shareholder Value

� Significant actions, including capital and cash restructuring, to achieve goal of 75% low-delivered cost

– Extensive restructuring of high-cost assets in Europe, Japan and Canada

– Successful sale and closure of a high-cost facility in China

– Constructed several new low-cost production lines, while essentially – Constructed several new low-cost production lines, while essentially maintaining flat overall capacity

– Entered into creative alliances with China-based manufacturers

� Suspended melting capacity investments since 2012

� Delivered six consecutive quarters of price improvement

23

Business Actions Have Contributed to ROC Improvement

Sustaining a Strong Balance Sheet

� Maintaining investment-grade financial strength is a pillar of Owens Corning’s strategy

� Maintained investment-grade credit ratings from Standard & Poor's and Fitch

� $800 million revolving credit facility maturing in 2018

� $250 million accounts receivable securitization facility maturing in 2018

� $1.8 billion senior notes outstanding with 2016, 2019, 2022, 2024 and 2036 maturities

� Ample liquidity to support growth

� Capital markets remain open to Owens Corning

24

Tax Position is a Significant Asset

� Benefit from $2.2 billion NOL with estimated present value of approximately $5 per share

� Delivering cash tax savings of about $60 million per year

� Expect long-term book tax rate of 30% to 32% based � Expect long-term book tax rate of 30% to 32% based on geographic mix of earnings and tax planning

� Cash tax rate of 10% to 12% over the next few years

25Source: Owens Corning management estimates

Disciplined Capital Allocation Strategy

� Drive shareholder returns by enabling organic and inorganic growth and supporting the balance sheet

– Maintain investment grade

� Capital allocation strategy

– Investing in attractive organic growth– Investing in attractive organic growth

– Returning excess cash to shareholders

– Pursuing value-creating acquisitions

� Quarterly dividend initiated in 2014 conveys confidence in long-term financial outlook and cash flow generation; 6% dividend increase announced in 2015

� As of December 31, 2014, 7.7 million shares remain available for repurchase under existing authorization

26

Key Financial Data

($ in millions, except per share data) 2014 2013 Q4 2014 Q4 2013

Net sales $5,276 $5,295 $1,261 $1,278

Net earnings attributable to Owens Corning $226 $204 $33 $82

Diluted earnings per share attributable to Owens Corning common stockholders

$1.91 $1.71 $0.28 $0.69

Earnings before interest and taxes (EBIT) $392 $385 $104 $104

27

Adjusted EBIT $412 $416 $107 $96

Adjusted Earnings $208 $221 $55 $52

Adjusted EPS (diluted) $1.76 $1.86 $0.47 $0.44

Adjusted EBIT as a % of sales 8% 8% 8% 8%

Marketing and administrative expenses $487 $530 $115 $135

Depreciation and amortization $304 $332 $75 $97

Cash flow from operating activities $441 $407 $379 $249

Total debt (excluding rate swap), net of cash $1,950 $1,955 $1,950 $1,955

2015 Corporate Environment & Guidance

Macro Environment

� Continued growth in U.S. housing starts; generally forecasted in 1,100,000-1,200,000 range

� Moderate global industrial production growth

Primary Guidance

� Insulation: should continue to benefit from growth in U.S. residential new construction, improved pricing and operating leverage

� Composites: expect majority of EBIT improvement to come from price

� Roofing: market dynamics in the first half of the year will largely determine how the business performs relative to 2014

� Corporate expenses of $120-$130MM� Interest expenses about $110MM� Capital expenditures about $355MM, including

about $55 million for the completion of construction of a non-woven facility

� Depreciation & amortization about $310MM� Cash tax rate of 10-12% and book tax rate of

30-32%* on adjusted pre-tax earnings

* Excluding significant tax reserve reversalsSource: Owens Corning management estimates as of February 2015

Other Guidance Items

28

Appendix ANon-GAAP Reconciliations

29

Appendix ANon-GAAP Reconciliations

30

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