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Owens Corning's Strong 1st Qtr Drives Improved Outlook

Owens Corning recently reported that its consolidated net sales increased 18% to $1.3 billion in the first quarter of 2010, compared with $1.1 billion in the first quarter of 2009. First quarter 2010 adjusted earnings were $53 million, or $0.42 per adjusted diluted share, compared with $5 million, or $0.04 per adjusted diluted share, in the first quarter of 2009. The company’s first quarter 2010 net earnings were $48 million, or $0.38 per diluted share, compared with a net loss of $28 million, or a loss of $0.23 per diluted share, in the first quarter of 2009.

The Composites segment increased profits in the first quarter, demonstrating strong operating leverage. In the Roofing business, the strong momentum continued into the first quarter of 2010 with an increase in earnings before interest and taxes (EBIT) of nearly one-third over the same period a year ago. The Insulation business performed as expected, narrowing its losses despite continued weakness in the U.S. housing market.

“Owens Corning is off to a strong start in 2010,” said Mike Thaman, chairman and CEO. “We demonstrated leverage in our Composites business, driving a return to healthy profit levels. We continued our strong momentum in Roofing, generating first quarter margins of 24%. Based on these results, we have raised our 2010 adjusted EBIT outlook to as much as $450 million, which is $100 million higher than our previous estimate.”

Based on continued strong margins in the Roofing business and improved results for the Composites segment, Owens Corning expects that its 2010 adjusted EBIT could be as high as $450 million, which equates to an adjusted earnings per share of about $2.00. In the Composites segment, the company believes that overall demand will continue to trend upward as global industrial activity improves. The rate of market recovery remains uncertain. The company expects to increase production to meet improved market demand, which will result in higher capacity utilization during the year, compared to 2009. In addition, the Composites segment will continue to realize the benefit of various cost-reduction actions and prior price increases.

Owens Corning expects strong momentum to continue in the Roofing business, as actions taken to increase margins in 2008 and 2009 will drive profitability in 2010. The company believes that margins in excess of 20% will be achieved in 2010. The company also estimates that the Insulation business will narrow its losses in 2010, despite continued U.S. residential construction market weakness.

For additional details, visit www.owenscorning.com.

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