1. Differentiate Through Innovation
Anticipate, Innovate, Execute Transformational and sustainable technologies leader
CONFIDENTIAL AND OPERATIONALLY SENSITIVE MATERIAL
This presentation contains non-public, proprietary information that must remain confidential 1 1

2. 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 
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3. INNOVATION CENTER OVERVIEW
Moved in 1983
200,000 sq.ft. facility
Lab bench to pilot plant capability
In-house testing capabilities (acoustical, structural, fire)

4. ORGANIZATION Laboratories Gypsum Panels Ceilings Performance Surfaces
Performance Substrates
Analytical
Construction Systems
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5. Innovation Through Collaboration
FOCUS AREAS P
eople
Invest in people, not just products I
People creating value through the implementation of new ideas
nnovation C
Internal – Manufacturing & Marketing
External
ustomers
Jim Intro
Innovation Through Collaboration
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6. PEOPLE Over 1,200+ years of cumulative experience
More than 50% of the staff have advanced degrees
Physics
Chemistry
Coatings
Materials Engineering
Chemical Engineering
Mechanical Engineering
Civil Engineering
Architecture
Metallurgical Engineering
Bio-engineering
Physical Chemistry
Over 1,200+ years of cumulative experience
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7. 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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8. 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 Industry
UL & UL Environment
Life safety, structural performance & sustainability
ASTM International
Standard specifications & test methods for the construction industry
Board of Directors
ASHRAE
Building science, building energy & sustainability
Gypsum Association
ANSI Decide whether to keep on list
US Green Building Council – founding member
ACI – American Concrete Institute
TAPPI – Technical Association of Pulp and Paper Industry
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9. DECADES OF INNOVATION Inventors in Building Science
1900
Sheetrock®
Sheetrock Gypsum Panels
Pyrobar Gypsum Partition Tile
1960
Ultrawall®
Structocore
Structocore™ Wall System
First Metal Stud Drywall System
RC-1 Channel
Sheetrock WR Gypsum Panels
Chemically Hardening Joint Compound
SW Gypsum Panels
Blendtex Gypsum Panels
Exterior Ceiling Board
Ultrawall Relocatable Wall System
USG Shaft Wall System
Textone SW Gypsum Panels
Area Separation Wall System
Light Steel Framing
2000
HUMITEK®
Levelrock®
Next Generation Gypsum Panels
Levelrock Floor Underlayment System
USG™ Decorative Interior Finish System
Geometrix™ Metal Ceiling Panels
Astro™ ClimaPlus™ Ceiling Panels
Translucents™ Luminous Panels
Topo™ 3-D Ceiling Panels
HUMITEK Gypsum Panels
SECUROCK® Roof Board
Sheetrock® All Purpose Joint Compound with Dust Control
Sheetrock® Mold-Tough panels
Zero-emitting ceiling tiles
High Recycled Content Suspension Systems
True Wood Ceiling Panels
SECUROCK® Glass-Mat Sheathing
SECUROCK® Glass-Mat Liner Panels
1920
ACOUSTONE®
Rocklath®
Gyplap® Gypsum Sheathing
Rocklath Gypsum Lath
ACOUSTONE Ceiling Tiles
Perf-A-Tape® Joint Reinforcement
1980
DUROCK®
FIBEROCK®
Structocore Security System
DUROCK® Cement Board
SHEETROCK® Plus 3™ Joint Compound
X-Technology Ceiling Panels
Firecode® Compound
3/4" Ultracode® Core Gypsum Panels
Compässo™ Suspension Trim
Quick Release II Clip
Cuvatura™3-D System
Radar™ ClimaPlus™ Ceiling Panels
FIBEROCK® Panels
USG Drywall Suspension System
1940
Pyrofill®
Firecode®
Structo-Gauge® Gauging Plaster
Pyrofill® Poured Gypsum Roof Deck
Water Repellent Wallboard
Structo-Lite Perlited Plaster
Sheetrock Firecode Core (Type X)
Tapered Edge Panels
Ready-Mixed Joint Compound
2" Solid Gypsum Wall Board System
2010
Sheetrock® Brand UltraLight Panel
SECUROCK® Glass-Mat
Roof Board
2000 – 2009
1000+ Patents

10. INNOVATION CATEGORIES
Category Category Category 3
Supporting Operations / Heritage
BU Initiatives
Exploratory
Essential Support Of Existing Products & Operations
Product & Process Extensions
Platform Technology Development
Exploratory Projects
Transitioning to the work done by CIC & OI (you all have seen this before)
3 categories: Heritage (Activities that supports ongoing business), Business Unit initiatives on new product and process extensions, and work being done on big ideas that lay the groundwork for our future growth.
The 2011 allocation of the $10 MM spend on these categories is shown here. Note that the total spend of $13MM includes the overhead cost of maintaining Libertyville.
As you know there are robust processes within the company (Single point of contact for mfg, PPMT, and Business Teams) that manage and ensure alignment of the first two categories..
The return on this investment is ….
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11. Universities and National Labs Engineering and Tech Services
The lab is our world
The world is our lab
OPEN INNOVATION
Plants
Customers
Research
Universities and National Labs
INNOVATION
Engineering and Tech Services
Suppliers
Marketing
Innovation Brokers
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12. INNOVATION METRICS R&D Yield Patents Filed Value Of Project Portfolio
(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