EX-99.1 2 dex991.htm INVESTOR PRESENTATION Investor Presentation
Owens Corning
Fiscal Q4 and 2006 Year in Review
February 28, 2007
Exhibit 99.1
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2
Forward-looking Statement and Non-GAAP Measures
This presentation contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are subject to risks and uncertainties that could cause actual results to differ
materially from those projected in these statements.  The forward-looking
statements speak only to the dates hereof and are subject to change.  The
Company does not undertake any duty to update or revise forward-looking
statements.
Further information on factors that could affect the company's financial and other
results is included in the company's Forms 10-Q and 10-K, filed with the Securities
and Exchange Commission.  Additional company information is available on the
Owens Corning Website: www.owenscorning.com.
Certain data included within this presentation contains "non-GAAP financial
measures"
as
defined
by
the
Securities
and
Exchange
Commission.
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
Form
8-K,
dated
February 21, 2007 and on our website referenced above.

3
Management Representatives
David Brown
President and Chief
Executive Officer
Michael Thaman
Chairman of the Board and
Chief Financial Officer
Scott Deitz
Vice President, Investor
Relations
•
President & CEO since 2002
•
Joined Owens Corning in 1978
•
Chairman of the Board since 2002
•
Chief Financial Officer since 2000
•
Joined Owens Corning in 1992
•
VP, Investor Relations since 2006
•
Joined Owens Corning in 2005

4
Owens Corning Today
•
Fiscal 2006 sales of $6.5 billion, 19,000 employees in 26 countries
•
Leader in building materials systems and high-performance glass
composites
•
Best
known
for
PINK
FIBERGLAS
®
home
insulation
•
Four business segments
–
Insulating Systems
–
Composite Solutions
–
Roofing & Asphalt
–
Other Building Materials & Services
2006
Fortune
Magazine
Most
Admired
Company
in
the
building
materials
category;
50+ consecutive years on the Fortune 500

5
Market Leadership &
Our Strong Brand Equity
Leading North America Market
Positions
•
Residential Insulation
•
Commercial & Industrial Insulation
•
Manufactured Stone Veneer
•
Residential Shingles
•
Roofing Asphalts
Global Leader
•
Glass Fiber Reinforcement
Materials used for Composites

6
Fiscal 2006 In Review
•
Record sales of $6.461 billion, up 2.2% over 2005
•
Adjusted Income from Operations of $569 million, up
4.6% compared with $544 million in 2005
•
Gross margin as a percent of sales, excluding Fresh-
Start Accounting and other restructuring charges,
17.5%, compared with 18.3% in 2005
•
SG&A 8.3%, compared with 8.9% in 2005

7
2006 Income from Operations (IFO)
$433
Provision for Asbestos Litigation
($13)
C-11 Related Reorganization Items
$55
Other Items
(1)
$94
Total Adjustments
$136
2006 Adjusted Income from Operations
$569
2006 Depreciation and Amortization
(2)
$278
Adjustments to remove items
impacting comparability
Reconciliation of 2006 Adjusted to Reported IFO
($MM)
(1)
Includes the impact
of inventory write-up of  $44MM; write-off of in-process R&D of $21MM; restructuring activities of  $55MM;
gain on sale of  metals of ($45MM); and other of  $19MM
(2)
Includes $21MM
write-off of in-process R&D

8
Fiscal Q4 & Fiscal 2006 Dynamics
Q4
•
Downturn in U.S housing starts
impacted performance, especially
Insulating Systems
•
Below trend-line storm demand, high
asphalt prices and inventories
depressed Roofing & Asphalt results
•
Exit of HOMExperts business;
improved productivity within
manufactured stone veneer
•
Performance improvement in
Composite
Solutions Business,
especially reinforcements, continues
2006
•
Emergence from asbestos-related
Chapter 11, with finality
•
Investment-grade credit ratings
achieved
•
Global Composites JV with Saint-
Gobain announced
•
Strong cash generation
•
R’s on Us™
introduced
•
Innovative
Duration™
Series
roofing
shingle
with
SureNail®
technology introduced

9
Balanced Portfolio of Varied End Markets
Revenue by End Market
2006 Revenue: $6.5 billion
U.S. & Canada
New Residential
Construction
36.0 %
U.S. & Canada
Residential
Repair &
Remodeling
34.0 %
U.S. & Canada
Commercial &
Industrial
18.0 %
International
12.0 %
Source: Management Estimates

10
Business Segment Overview
(1)
Percentages by segment based on revenue of $6.6B before corporate eliminations
(2)
Percentages based on segment results before reconciliation to income (loss) before income tax expense
2006
Income
Before
Income
Tax
Expense:
$711
million
(2)
Insulating
Systems
32%
Roofing and
Asphalt
26%
Composite
Solutions
23%
Other Building
Materials & Services
19%
Insulating
Systems
66%
Roofing and
Asphalt
10%
Composite
Solutions
22%
Other Building Materials & Services
2%
2006
Revenue:
$6.5
billion
(1)

11
Insulating Systems
2006 Revenue by End Market
U.S. & Canada
New
Residential
Construction
60%
U.S. & Canada
Repair &
Remodeling
13%
U.S. & Canada
Commercial &
Industrial
19%
International
8%
Financial performance ($MM)
500
1,000
1,500
2,000
$2,500
2003
2004
2005
2006
0%
5%
10%
15%
20%
25%
Sales
IFO Margin
Management Estimates Based on Channel and Product Mix

12
Roofing & Asphalt
2006 Revenue by End Market
U.S. & Canada
Commercial & Industrial
12%
U.S. & Canada
New
Residential
Construction
21%
U.S. & Canada
Residential
Repair & Remodeling
67%
500
1,000
1,500
2,000
2003
2004
2005
2006
0%
2%
4%
6%
8%
10%
Financial performance ($MM)
Sales
IFO Margin
Management Estimates Based on Channel and Product Mix

13
Other Building Materials & Services
2006 Revenue by End Market
U.S. & Canada
New
Residential
Construction
55%
U.S. & Canada
Residential Repair
& Remodeling
42%
U.S. & Canada
Commercial & Industrial
3%
200
400
600
800
1,000
1,200
$1,400
2003
2004
2005
2006
0%
2%
4%
6%
8%
10%
•
Manufactured Stone Veneer
•
Vinyl Siding, Norandex/Reynolds
Distribution (Exploring Strategic alternatives)
•
Franchising/Construction Services
Financial performance ($MM)
Sales
IFO Margin
Management Estimates Based on Channel and Product Mix

14
Composite Solutions
2006 Revenue by End Market
U.S. & Canada
Commercial
& Industrial
36%
U.S. & Canada
Residential Repair
& Remodeling
13%
U.S. & Canada
New Residential
Construction
4%
International
47%
200
400
600
800
1,000
1,200
1,400
1,600
$1,800
2003
2004
2005
2006
0%
4%
8%
12%
Financial performance ($MM)
Sales
IFO Margin
Management Estimates Based on Channel and Product Mix

15
Strategic Actions
•
Signed JV agreement to merge OC’s composites and
reinforcements business with Saint-Gobain’s
–
Estimated world-wide revenues of $1.8 billion, 10,000 employees
–
Strengthened presence in developed and emerging markets
–
Owens Corning 60% ownership; Saint-Gobain 40%
–
OC option to purchase after 4 years
•
Exploring strategic alternatives for Siding Solutions Business &
Fabwel unit; mid-year completion
•
Owens Corning share buy-back program
–
Authorized to purchase up to 5% of Owens Corning’s outstanding
common stock
–
At current share price, represents approximately $200 million
–
Promote total return and value to shareholders

16
2007 Outlook
•
Housing start slow down continues well into 2007
•
First quarter weak, results improving through the year
•
Insulating Systems Business to lag starts by 90 days
•
Roofing & Asphalt improvement expected through the year
•
JV completed with continued improvement in composites results
through the year
•
As a result of emergence, NOL of $2.8 billion resulting in estimated
cash taxes to
be 10% to 15% of pre-tax income for the next five to
seven years
•
Owens Corning’s Adjusted Income from Operations estimated to
exceed $415 million in 2007, based on current NAHB forecasts for
2007
US. housing starts

17
Owens Corning Financial Strategies
•
Financial performance & discipline
–
Strong operational Cash Flow to foster growth and innovation
–
Continued focus on Return on Net Assets in excess of
Cost of Capital
•
Balanced use of Free Cash Flow
–
Maintain strong balance sheet and sustain investment-grade credit
profile
–
Invest maintenance capital –
estimated at 80% of depreciation
–
Invest remainder of depreciation to improve and grow operations
–
Focused and disciplined organic growth and acquisitions
–
Support shareholder returns

Questions & Discussion
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