CEO Letter Series: USG

July 14, 2010

Dear Colleagues and Partners,

As the flooring industry moves forward through this challenging economy, our team at USG finds that fundamentals are more important than ever. Distributors, retailers, contractors and consumers are looking for products that perform, that will last and that provide good value. Our company’s commitment for more than 100 years has been to supply the building industry with high-quality materials our customers can rely on.

When consumers are selecting flooring, they typically focus on the appearance of the finished product. They may not be aware of the long-term impact of what goes under and supports that beautiful new floor. This is where we all have the responsibility to help them purchase the best substrate possible. The USG underlayment portfolio provides strength beneath the surface and will ensure superior long-lasting performance.

During the downturn, USG, like many companies in the industry, has prepared for the impending recovery by enhancing our product offerings. Last fall, USG completed its national rollout of the Next Generation of Durock® cement board. Durock cement board has been the industry standard since its introduction in 1983. Durock cement board Next Gen keeps all the positive qualities of its predecessor – strength, hardness, water durability and mold resistance – while improving ease of use. The new product is 25 percent lighter and can be installed 20 percent faster because it scores and snaps easily. Launching this product required a multimillion-dollar investment in our Durock manufacturing lines.

Fiberock® Aqua-Tough™ Underlayment is another example of USG’s leadership in research and development. Our fiber-reinforced gypsum product provides a smooth, durable, easy-to-install, water-resistant surface for all types of flooring, including ceramic tile, vinyl, laminate, hardwood, and carpet.

Durock™ Tile Membrane, introduced four years ago, also is a unique technology. Unlike other membranes, USG’s product consists of fabric with a cementitious coating that provides superior bonding with ceramic tile. It is strong, can be cut with scissors and, when installed with Durock™ Tile Membrane Adhesive, provides crack isolation without adding floor height.

All three are great choices for different applications. They are also great choices for sustainable construction.

• Fiberock panels contain 95 percent recycled material.

• Durock tile membrane is manufactured with nearly 60 percent recycled material.

• Durock cement board Next Gen is made with 40 percent more recycled content than the previous version. It weighs less, and that means more boards per truck and fewer trucks on the road.

We have developed underlayment products for the future, products that we are proud of and that you can count on for quality, performance and value. Thank you for making USG part of your business.

Sincerely,