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Differentiate Through Innovation

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Anticipate, Innovate, ExecuteTransformational and sustainable technologies leader

CONFIDENTIAL AND OPERATIONALLY SENSITIVE MATERIALThis presentation contains non-public, proprietary information that must remain confidential

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CORPORATE INNOVATION CENTER (CIC)

Vision• Make USG the leader in construction

product and system solutions through transformational and sustainable technologies.

Mission• Align with USG corporate strategy to

deliver science and technology based building solutions that create value and ensure USG leadership.

− Optimize current products− Drive cost reduction efforts− Anticipate, adapt to and act on building trends− Pursue transformational research leading to

innovative and profitable building solutions USG CONFIDENTIAL

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INNOVATION CENTER OVERVIEW

Moved in 1983

200,000 sq.ft. facility

Lab bench to pilot plant capability

In-house testing capabilities (acoustical, structural, fire)

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ORGANIZATION

Laboratories

• Gypsum Panels

• Ceilings

• Performance Surfaces

• Performance Substrates

• Analytical

• Construction SystemsUSG CONFIDENTIAL

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FOCUS AREAS

Innovation Through Collaboration

Invest in people, not just productseopleP People creating value through the

implementation of new ideasI nnovation

Internal – Manufacturing & Marketing ExternalCustomers

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PEOPLE

Over 1,200+ years of cumulative experience

Physics

Chemistry

Coatings

Materials Engineering

Chemical Engineering

Mechanical Engineering

More than 50% of the staff have advanced degrees

Civil Engineering

Architecture

Metallurgical Engineering

Bio-engineering

Physical Chemistry

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COMPETENCIES AND CAPABILITIES

• Cement & Gypsum Chemistry

• Admixture Formulation

• Paper Chemistry

• Materials Science & Analysis

• Calcination Technology

• Computational Fluid Dynamics

• Building Science

• Industry Codes & Standards

• Fire Design & Test

• Acoustical Design & Test

• Structural Design & Test

• Life Cycle Analysis

• Building Moisture Management

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LEADING AND SHAPING INDUSTRY STANDARDS

• Underwriters Labs

• ASTM International

• ASHRAE

• Gypsum Association

• American National Standards Institute

• US Green Building Council

• American Concrete Institute

• Technical Association of Pulp and Paper IndustryUSG CONFIDENTIAL

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2010Sheetrock® Brand UltraLight Panel SECUROCK® Glass-MatRoof Board

DECADES OF INNOVATIONInventors in Building Science

1900Sheetrock®Sheetrock Gypsum PanelsPyrobar Gypsum Partition Tile

1940Pyrofill®Firecode®Structo-Gauge® Gauging PlasterPyrofill® Poured Gypsum Roof DeckWater Repellent WallboardStructo-Lite Perlited PlasterSheetrock Firecode Core (Type X)Tapered Edge PanelsReady-Mixed Joint Compound2" Solid Gypsum Wall Board System

1960Ultrawall®StructocoreStructocore™ Wall SystemFirst Metal Stud Drywall SystemRC-1 ChannelSheetrock WR Gypsum PanelsChemically Hardening Joint CompoundSW Gypsum PanelsBlendtex Gypsum PanelsExterior Ceiling BoardUltrawall Relocatable Wall SystemUSG Shaft Wall SystemTextone SW Gypsum PanelsArea Separation Wall SystemLight Steel Framing

2000HUMITEK®Levelrock®Next Generation Gypsum PanelsLevelrock Floor Underlayment SystemUSG™ Decorative Interior Finish SystemGeometrix™ Metal Ceiling PanelsAstro™ ClimaPlus™ Ceiling PanelsTranslucents™ Luminous PanelsTopo™ 3-D Ceiling PanelsHUMITEK Gypsum PanelsSECUROCK® Roof BoardSheetrock® All Purpose Joint Compound with Dust ControlSheetrock® Mold-Tough panelsZero-emitting ceiling tiles High Recycled Content Suspension SystemsTrue Wood Ceiling PanelsSECUROCK® Glass-Mat SheathingSECUROCK® Glass-Mat Liner Panels

1980DUROCK®FIBEROCK®Structocore Security SystemDUROCK® Cement BoardSHEETROCK® Plus 3™ Joint CompoundX-Technology Ceiling PanelsFirecode® Compound3/4" Ultracode® Core Gypsum PanelsCompässo™ Suspension TrimQuick Release II ClipCuvatura™3-D SystemRadar™ ClimaPlus™ Ceiling PanelsFIBEROCK® PanelsUSG Drywall Suspension System

1920ACOUSTONE®Rocklath®Gyplap® Gypsum SheathingRocklath Gypsum LathACOUSTONE Ceiling TilesPerf-A-Tape® Joint Reinforcement

2000 – 2009 1000+ Patents

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• Essential Support Of Existing Products & Operations

• Platform Technology Development

• Exploratory Projects

INNOVATION CATEGORIES

Supporting Operations / Heritage

BU Initiatives

• Product & Process Extensions

Exploratory

Category 1 Category 2 Category 3

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INNOVATION

Customers

Innovation Brokers

Universities and

National Labs

Suppliers

Plants

Marketing

Research

Engineering and Tech

Services

The world is our lab OPEN INNOVATIONThe lab is our world

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INNOVATION METRICS

R&D Yield (Total Cost Savings & Total Gross Profit) / R&D Budget

Patents Filed Annualized Number Of Patent Filings From R&D

Value Of Project Portfolio Total 5 Year Estimated Gross Profit & Costs Savings For Projects On The Portfolio

Number Of New Platforms Number Of Cross-product Development Initiatives Funded For Exploration

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