THE f irst DECADE 1902-1911

B. W. McCausland, first president of United States Gypsum Company 1902-1904

The quarry crew of the Alabaster, Michigan mine 1903

“We know what we are doing, and we do it right.”

THE RED BOOK FOR BUILDERS AND PLASTERERS 1905 EDITION

South Chicago plaster plant’s watchdog, “Prince,” was also a company product logo CIRCA. 1908

Six ships of the Gypsum Royal Fleet transported raw “rock” Pyrobar, a fireproof building from Nova Scotia to the U.S. block invented at the company in 1903 RESPONSIBILITY

RESPONSIBILITY MEANS LIVING UP TO YOUR PROMISES. That includes promises to customers, employees, shareholders, the industry and the community.

United States Gypsum Company was founded in 1902 to: –Provide customers with better, safer building products. – Give employees opportunity and keep them safe. – Earn money for shareholders. – Serve a broader market of builders with economies of scale.

For a century, this company has worked hard to honor our basic responsibilities. Our future success holds much promise, as it is built on a rock solid foundation.

X2671A/2-02 © 2002, USG Corporation Printed in U.S.A. THE second DECADE 1912-1921 The Oakfield, NY plant was among the first three to manufacture Sackett board, precursor to SHEETROCK.

Integrity is the cornerstone of our business… because how we work is based on trust. INTEGRITY MEANS ALWAYS BEING HONEST AND STRAIGHTFORWARD IN EVERY ASPECT OF OUR BUSINESS, from our business dealings to our products. Long-time CEO Sewell Avery said of our early salespeople, “These traveling representatives of our company have been selected and trained with careful regard to their integrity.”

The U.S. Gypsum Company Product Guarantee in The 1916 Red Book for Architects and Contractors promised “No guesswork, no carelessness, no weakness at any point.”

Integrity continues to be a bedrock principle of our company. INTEGRITY “We tell the truth to customers, to suppliers, to employees.”

THE RED BOOK FOR BUILDERS AND PLASTERERS 1905 EDITION

SHEETROCK Brand Gypsum Panels were introduced to market in 1916.

Early on, the company name and advertising positioned United States Gypsum Company as a national leader. (CIRCA. 1914)

X2671B/2-02 © 2002, USG Corporation Printed in U.S.A. THE third DECADE 1922-1931 Safety encompassed all aspects of U.S. Gypsum’s operations, from manu- facturing to mining to material transportation.

The Mine Safety and Health Administration has named USG the winner of its “Sentinel of Safety” award 15 times— more than any other single manufacturer.

RIGHT: U.S. Gypsum was one of the first companies to use “lock-out” switches to protect employees from accidental equipment start-ups during mainte- nance or trouble-shooting.

BELOW: U.S. Gypsum’s employee safety program helped keep our miners out of danger.

ABOVE: Following proper safety procedures and wearing safety goggles was a part of everyday life for employees.

LEFT: U.S. Gypsum Company was a founding member of the National Safety Council, established in 1913.

Sewell Lee Avery, president of U.S. Gypsum Company, 1905-1936; SAFETY chairman, 1936-1951

AT USG, SAFETY ISN’T JUST A MOTTO—IT’S A WAY OF LIFE. By the 1920s, U.S. Gypsum was one of the few companies that held itself 100 percent accountable for employee safety. At a time when workplace safety regulations and workers compensation did not even exist, U.S. Gypsum took care of its own.

Why? Because we realized that safe working conditions are essential for continued growth. And, more to the point, we viewed employees not just as workers, but as members of the U.S. Gypsum family.

Our commitment to safety has only grown through the years. Today, U.S. Gypsum’s safety record is two times better than the average for the rest of the gypsum industry. In the past year alone, three of our plants—Hagersville, Cloquet and Sweetwater— have set industry records for hours worked with no lost-time injuries.

The U.S. Gypsum “polliwog” served as the company logo for more than 60 years.

X2671C/4-02 © 2002, USG Corporation Printed in U.S.A. THE fourth DECADE 1932-1941 ABOVE: This sign, which was prominently displayed for decades at the Greenville, Miss., plant says it all.

BELOW: This graph shows the results of a gypsum calcination test conducted in 1943. It was part of U.S. Gypsum’s ongoing research efforts to improve wallboard performance. WHEN THE GOING GETS TOUGH, U.S. GYPSUM COMPANY STANDS BY ITS EMPLOYEES. Few times have been tougher than the Great Depression of the 1930s… and few companies showed more compassion for their employees during that time than U.S. Gypsum Company.

The company kept as many people as possible employed by reducing work schedules and creating facility improvement and maintenance projects. U.S. Gypsum Company extended credit and provided interest-free loans to employees to help them purchase goods and pay rent. Management even acted as advocates for employees with landlords and other creditors.

In the 1940s and in the decades that followed, it was the character and commitment that U.S. Gypsum showed its employees— New literature was created to support the company’s growing family of products. and the character and commitment that employees showed in return— that saw the company through hard times. RELATIONSHIPS WITH EMPLOYEES

“In the present depressed state of business, there is another responsibility: to alleviate the distress incident to unemployment.”

O.M. KNODE, EXECUTIVE VICE PRESIDENT, U.S. GYPSUM COMPANY, 1931-1935; PRESIDENT, 1936-1941

U.S. Gypsum helped keep America working throughout the Great Depression.

X2671D/4-02 © 2002, USG Corporation Printed in U.S.A. THE f ifth DECADE 1942-1951 U.S. Gypsum products were used to build factories support- ing the World War II effort.

LEFT: New 1940s literature promoted the new benefits of SHEETROCK Brand Gypsum Panels.

BELOW: George Catalano, seen here in 1946, was a principal of Boston-based Catalano Brothers, a long- time U.S. Gypsum distributor. “We have always expanded to take care of our customers’ needs.”

C.H. SHAVER, CHAIRMAN, U.S. GYPSUM COMPANY, 1951-1967

A sales team discusses regional strategies for improving customer satisfaction. RELATIONSHIPS WITH CUSTOMERS A HALLMARK OF U.S. GYPSUM’S REMARKABLE SUCCESS LIES IN OUR ABILITY TO MEET EVOLVING CUSTOMER NEEDS.

In the 1940s, the needs of our customers changed dramatically… and U.S. Gypsum literally reinvented itself to meet those needs.

As soldiers returned home following World War II, the housing market of the 1940s boomed. GI’s and their families needed low-cost homes to begin their lives anew.

® U.S. Gypsum’s SHEETROCK Brand Gypsum Panels provided a perfect low-cost method for building those homes. The demand for drywall skyrocketed.

U.S. Gypsum added four wallboard plants, two paper mills, a modern ship-loading facility and two gypsum ships. This increased capacity met the growing market demand and helped “Build America.”

The U.S. Gypsum booth at the 1947 NAHB Conference, held at the Stevens Hotel located on Michigan Avenue in Chicago.

X2671E/4-02 © 2002, USG Corporation Printed in U.S.A. THE sixth DECADE 1952-1961 A new state-of-the-art USG Research Center (ABOVE & FAR RIGHT) was opened in Des Plaines, Ill., in 1961.

THROUGHOUT THE 1950s, U.S. GYPSUM COMPANY TURNED OUT INNOVATION AFTER INNOVATION, dramatically improving the performance and application ease of drywall, joint compound and dozens of other building products. U.S. Gypsum’s Research Village promoted the development of innovative, affordable housing. Among the myriad of new product introductions, U.S. Gypsum developed the first ready-mixed joint compound and the first tapered-edge gypsum panel, featuring recessed edges for easier, smoother joint finishing.

In 1955, the company unveiled its Research Village, a collection of futuristic homes designed by leading architects featuring extensive use of U.S. Gypsum products. The village was the “highlight” of the 10th annual National Association of Home Builders convention and received prominent national media coverage.

“Builders of medium- and low-cost homes must be offered more comfort…more livability… more safety…more value.”

THE STORY OF RESEARCH VILLAGE, PUBLISHED BY U.S. GYPSUM COMPANY, 1954 INNOVATION

Tooling for this streamlined General Motors LeSabre test car was created using HYDROCAL® Gypsum Cement.

U.S. Gypsum’s Popular Home magazine provided home- owners with the latest design and remodeling ideas.

X2671F/4-02 © 2002, USG Corporation Printed in U.S.A. THE seventh DECADE 1962-1971 U.S. Gypsum’s hardboard products were used in home furnishings during the 1960s.

“In order to improve its share of available volume, USG has moved to meet the shifting demands of the marketplace, with products and marketing strategy related to new needs.”

W.R. WEIDMAN, GROUP VICE PRESIDENT, CONSTRUCTION PRODUCTS (1969 ANNUAL REPORT)

A whimsical USG literature piece opened new marketing opportunities circa 1963.

BELOW RIGHT: U.S. Gypsum exhibited new products at the 1964 World’s Fair in New York City.

U.S. Gypsum’s Cavity Shaft Wall System revolutionized high-rise construction around the world. OPPORTUNITY Diversification was a major theme of the 1960s, as U.S. Gypsum

This Chicago Corporate took full advantage of a wide range of business opportunities— Headquarters building, located on Wacker Drive, was built in 1963. both domestically and abroad. THE COMPANY CAPITALIZED ON EXISTING STRENGTHS, EXPLORED NEW MARKETS AND ACQUIRED BUSINESSES to offer an array of new product lines from paints to construction adhesives.

U.S. Gypsum’s proprietary metal-framed drywall system revolutionized commercial wall construction practices in the 1960s. And our new Cavity Shaft Wall System proved to be the choice for high-rises worldwide including, Chicago’s Sears Tower and later, the Petronis Towers in Kuala Lumpur, Malaysia.

During this decade the company also expanded geographically, acquiring a Mexican subsidiary operation—Yeso Panamericano— and established an International Division.

X2671A/2-02 © 2002, USG Corporation Printed in U.S.A. THE eighth DECADE 1972-1981 President’s Club Award winners with U.S. Gypsum President Edward W. Duffy (center). 1974

ABOVE: Safety billboard outside the East Chicago plant

RIGHT: Cover for an employee recruitment brochure. 1978

BELOW RIGHT: Ready for delivery: SHEETROCK remains one of the world’s most recognized brands. PRIDE IN OUR COMPANY AND PRODUCT QUALITY

ASK ANYONE WHAT MAKES U.S. GYPSUM COMPANY THE KIND OF PLACE THEY LIKE TO WORK, AND YOU’LL GET THE SAME ANSWER…THE PEOPLE.

By the 1970s, U.S. Gypsum’s reputation was unparalleled— with employees who were the envy of the entire building industry. And employees felt the pride that comes from working for the undisputed industry leader.

Pride has been an important characteristic of our past, infusing the company with a healthy dose of confidence and an ability to see new possibilities. That confidence, coupled with hard work and commitment, drove extraordinary successes for the company during our eighth decade. U.S. Gypsum introduced the Area Separation Wall System, which effectively prevented fire spread between adjoining townhome units.

Our pride, confidence, commitment and people enabled U.S. Gypsum to continue expanding, acquiring companies and building new and better facilities throughout the 1970s.

Not only men, but several hard-hatted women assumed leadership roles at U.S. Gypsum Company. 1974

X2671H/2-02 © 2002, USG Corporation Printed in U.S.A. THE ninth DECADE 1982-1991 ABOVE: Strong brand name products helped U.S. Gypsum maintain a leadership position during the challenging economic environment of the early 1980s.

RIGHT: The company’s new Research Center, located in Libertyville, Ill., featured state- of-the-art technologies. 1982

“Thanks to the continuous focus, commitment, adaptability, During the 1980s, U.S. Gypsum led the industry in terms of production and manufacturing perseverance and heart of USG’s employees, efficiencies. we have withstood tumultuous times and remain a strong, viable, industry-leading enterprise.”

EUGENE B. CONNOLLY, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, 1991 ANNUAL REPORT

DUROCK Brand Cement Board was developed for use on both exterior (shown above) LEADERSHIPand interior walls. THE 1980s POSED CHALLENGING TIMES FOR USG.

During the early part of the decade, an economic recession and a sluggish housing market made for a difficult business environment. Nonetheless, U.S. Gypsum Company continued its run of new product developments, including the 1983 introduction of DUROCK® Brand Cement Board. The company also acquired Donn Incorporated, enabling USG to become the industry’s only source of pre-designed, fully integrated ceiling systems.

During the 1980s, U.S. Gypsum Company also battled two takeover attempts. Both challenges were successfully met, but the price was high— $3.1 billion in debt was accumulated. Through it all, the combination of strong leadership and dedicated employees kept the company strong…and an industry leader.

Dedicated company leader- ship helped steer U.S. Gypsum through challenging times in the 1980s.

X2671I/4-02 © 2002, USG Corporation Printed in U.S.A. THE tenth DECADE 1992-2001 ABOVE: In 1997, USG estab- lished diversity as a core value. Today it remains an essential focus for the com- pany. Pictured here (far left) Tom Marshall, human resources manager, Santa Fe Springs, Calif., encourages a diverse workforce to gain different and necessary perspectives.

BELOW, RIGHT: The USG FAR LEFT: U.S. Gypsum’s Drywall Suspension System FIBEROCK Brand Panels offer facilitates the design and superior performance installation of drywall ceiling benefits. systems. LEFT: The “SHEETROCK Rock Tour ’99” placed the strips of tape 1 22 /2˚ company’s brand names in applied to floor front of millions of NASCAR fans—a key customer base.

BELOW: U.S. Gypsum’s high- speed wallboard plants now produce the drywall needed to build an average-sized 45˚ home in only five minutes.

hanger wire locations for B secondary spokes

hanger wire locations for primary spokes

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“A defining characteristic of USG is staying power— we overcome every obstacle we face with integrity, courage and an unyielding commitment to serving our customers.”

BILL FOOTE, CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT STAYING POWER OUR MISSION: WE GO THE DISTANCE TO PROVIDE THE BETTER WAY. DELIVERING BUILDING SOLUTIONS FOR CUSTOMERS WORLDWIDE IS OUR GOAL. RELATIONSHIPS ARE OUR FOUNDATION. INTEGRITY, DEPENDABILITY AND INNOVATION ARE THE STANDARDS BY WHICH WE LIVE.

USG BEGAN THE 1990s WITH A BLUEPRINT FOR RESTORING FINANCIAL HEALTH.

To restructure the debt incurred to block earlier takeover attempts, USG filed bankruptcy in 1993 and began a slow, steady process of debt reduction and growth.

As construction growth drove demand, USG launched an unprecedented initiative to modernize plants and build several new high-speed wallboard lines. USG also expanded L&W Supply Corporation and introduced several innovative products, including FIBEROCK® Brand Panels and Next Generation SHEETROCK® Brand Gypsum Panels.

Then another serious threat emerged—asbestos litigation. As many corporate co-defendants filed Chapter 11, USG was forced to assume an ever-increasing financial burden. In June 2001, the company also filed Chapter 11 to manage its growing asbestos litigation costs.

Our diverse employee community, high-quality products and commitment to our customers and stakeholders launch USG into a second century A symbol of strength: USG built its new Chicago poised to overcome any challenges and continue our long history corporate headquarters at 125 S. Franklin Street in 1992. of innovation and growth.

X2671J/4-02 © 2002, USG Corporation Printed in U.S.A.