I. DEFINITIONS

II. ADMINISTRATION

III. ELIGIBILITY TO PARTICIPATE

IV. INCENTIVE UNITS

V. BENEFICIARY DESIGNATION

VI. MISCELLANEOUS PROVISIONS

VII. AMENDMENT OR TERMINATION OF PLAN

GENERAL CONDITIONS

(a) “Affiliate” shall mean any member of the group of corporations, trades or businesses or other organizations comprising the “controlled group” with the Corporation. For purposes of the foregoing, whether an entity is affiliated shall be determined pursuant to the controlled group rules of Code Section 414; however, a 50% minimum ownership threshold shall be used when applying the applicable provisions of (A) Code Section 1563 for determining a controlled group of corporations under Code Section 414(b), and (B) Treasury Regulation Section 1.414(c)-2 for determining the trades or businesses that are under common control under Code Section 414(c).

(b) “Beneficiary” shall mean one or more persons, trusts, estates or other entities designated by the Employee in accordance with Section V that are entitled to receive payment of a Gain under this Plan upon the death of an Employee.

(c) “Board of Directors” or “Board” shall mean the Board of Directors of the Corporation. All determinations by the Board shall be made in good faith in its sole discretion and shall be binding and conclusive.

(d) “Book Value” shall mean, as of any Valuation Date, the sum of (i) $268,542,680, (ii) the cumulative consolidated net income or loss of the Corporation for the period January 1, 2001 through the date of determination and (iii) $2,480,625 multiplied by

the number of full fiscal quarters of the Corporation that have ended after December 31, 2000 but on or before the date of determination (such product representing a 15% per annum credit on the aggregate dividends or distributions made by the Corporation to its stockholders during the period of October 1, 1997 through December 31, 2000), and excluding, to the extent occurring after December 31, 2000, the impact of (A) nonrecurring operating losses, nonrecurring operating gains and extraordinary items, each as determined in accordance with generally accepted accounting principles, (B) any charge incurred after December 31, 2000 relating to asbestos-related liabilities, (C) net after-tax gains or losses in respect of dispositions of assets by the Corporation other than in the ordinary course of business, (D) any charges relating to amortization of goodwill and other intangibles arising from the management buy-out of GAF Corporation in March 1989, and (E) such other items as the Board of Directors may determine to be extraordinary or unusual and the impact of which should not be included in consolidated net income or loss, as the case may be, for the purposes of computing Book Value. There shall be deducted from Book Value an amount equal to a 15% per annum charge on the aggregate capital contributions made to the Corporation by its stockholders during the period commencing January 1, 2001 and ending with the date of determination (the “Period”), amounts actually received by the Corporation during the Period for shares of its capital stock and, to the extent not actually charged against the net income of the Corporation, on the outstanding principal amount of loans and other advances made to the Corporation by affiliates (excluding Subsidiaries of the Corporation) during the Period. There shall be added to Book Value a 15% per annum credit on the aggregate dividends or distributions (including redemption of shares of its capital stock) made by the Corporation to its stockholders during the Period and, to the extent interest is not actually imputed to the Corporation in respect of such amounts, on the outstanding principal amount of loans and other advances made by the Corporation to affiliates (excluding Subsidiaries of the Corporation) during the Period. Any adjustments to Book Value (including the 15% charge and credit referred to in the preceding two sentences) shall take into account the tax effect, if any, associated therewith. If the Corporation’s common stock is converted into or exchanged for other securities or property pursuant to a recapitalization, stock split, combination, reorganization, merger, exchange or similar transaction, or if a sale of all or substantially all of, the common stock of the Corporation shall occur or be pending, Book Value, the Incentive Units and the terms hereof shall be modified by the Board of Directors in such manner as is reasonable under the circumstances. All determinations by the Board of Directors hereunder shall be made in good faith and shall be binding and conclusive.

(e) “Change in Control of the Corporation” shall mean (i) the sale or disposition, in one or a series of related transactions during a twelve-month period ending on the date of the most recent transaction, of all or substantially all of the assets of the Corporation (with assets sold or disposed having a total gross fair market value equal to or more than 75% of the total gross fair market value of all assets owned directly and indirectly by such entity immediately prior to such acquisition or acquisitions), to any “person” or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of The Securities Exchange Act of 1934, as amended (the “Act”)) other than the Corporation or its Subsidiaries, or (ii) any person or group, other than an Affiliate, is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Act), directly or indirectly, of more than 50% of the total voting power of the voting stock of the

Corporation, including by way of merger, consolidation or otherwise, and an Affiliate of the Corporation ceases to control the Board.

(f) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(g) “Corporation” shall have the meaning set forth in the Introduction.

(h) “Committee” shall have the meaning set forth in Section II(a) hereof.

(i) “Default Fixed Exercise Date” shall mean the Incentive Unit award Expiration Date.

(j) “Deferral Agreement” shall mean the agreement entered into by an Employee in accordance with Section IV(h) below. The Deferral Agreement may be in the form of one or more documents or electronic media, as prescribed by the Committee.

(k) “Deferred Compensation Plan” shall mean the GAF Deferred Compensation Plan, as may be amended from time to time.

(l) “Effective Date” shall have the meaning set forth in the Introduction.

(m) “Elected Fixed Exercise Date” shall mean the fixed date an Employee specifies to exercise his or her Incentive Units pursuant to Section IV(d)(ii). An Elected Fixed Exercise Date must be on or after the date the Incentive Units vest and on or prior to the award Expiration Date.

(n) “Employee” shall mean a common-law employee of the Corporation or of any Affiliate at a salary grade of 12 (or its equivalent) or above.

(o) “Exercise and Payment Agreement” shall mean the agreement entered into by an Employee in accordance with Section IV(d)(ii). The Exercise and Payment Agreement may be in the form of one or more documents or electronic media, as prescribed by the Committee.

(p) “Expiration Date” shall mean the date the Incentive Unit award expires in accordance with Section IV(g).

(q) “Final Value” shall have the meaning set forth in Section IV(e) hereof.

(r) “Gain” shall mean the excess, if any, of the Final Value of each Incentive Unit over the Initial Value of such Incentive Unit, reduced by any withholding taxes under Section VI(b).

(s) “Good Cause” shall, with respect to any Employee, mean (i) the Employee’s willful or gross misconduct or willful or gross negligence in the performance of his duties for the Corporation or for any Affiliate, (ii) the Employee’s intentional or habitual neglect of his duties for the Corporation or for any Affiliate, (iii) the Employee’s theft or misappropriation of funds of the Corporation or of any Affiliate, fraud, criminal misconduct,

3 breach of fiduciary duty or dishonesty in the performance of his duties on behalf of the Corporation or any Affiliate or commission of a felony, or crime of moral turpitude or any other conduct reflecting adversely upon the Corporation or any Affiliate or (iv) the Employee’s violation of any covenant not to compete or not to disclose confidential information with respect to the Corporation or any Affiliate.

(t) “Good Reason” shall, with respect to any Employee, mean a change or changes in the terms of such Employee’s employment that are materially adverse to such Employee, including changes relating to salary and bonus, level of responsibility or location of employment.

(u) “Incentive Unit” shall mean a bookkeeping item equal in value, as of any Valuation Date, to (i) the Corporation’s Book Value determined as of such Valuation Date divided by (ii) 1,000,010. The value of each Incentive Unit as of a Valuation Date and the determination of accumulated comprehensive income and losses as of a Valuation Date shall each be determined by the Board and may be adjusted by the Board if the number of outstanding shares of the Corporation’s common stock increases or decreases at any time after the Effective Date.

(v) “Initial Value” shall have the meaning set forth in Section IV(a) hereof.

(w) “Plan” shall have the meaning set forth in the Introduction.

(x) “Retirement” shall mean an Employee’s Separation from Service after (i) he attains age fifty-five (55) and (ii) the sum of his age and the number of his years of service with the Corporation and/or any Affiliate equals sixty (60) or more. For purposes of determining years of service, service with predecessors to the Corporation and/or Affiliates shall be considered.

(y) “Section 409A” shall have the meaning set forth in the Introduction.

(z) “Separation from Service” shall mean the Employee’s termination of employment with the Corporation and all Affiliates, voluntarily or involuntarily, for any reason other than on account of death, or as otherwise provided by Treasury Regulation Section 1.409A-1(h). However, the Employee’s employment relationship shall be treated as continuing intact while the individual is on a military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months (or longer, if required by statute or contract). If the period of the leave exceeds six months and the Employee’s right to reemployment is not provided either by statute or contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period for purposes of this Plan only.

(aa) “Subsidiary” shall mean a corporation or other entity of which more than fifty percent (50%) of the aggregate of its outstanding voting securities are owned directly or indirectly by the Corporation.

(bb) “Valuation Date” shall mean the last day of business of each fiscal quarter of the Corporation.

4 (cc) “Value” shall mean the value of each Incentive Unit as of a specified date, as determined on a consistent basis by the Committee in its sole discretion.

(a) Administration; Term of Office; Appointment of Chairperson. The Plan shall be administered by a committee (the “Committee”) appointed by the Board from among the Employees. The Committee shall be comprised, unless otherwise determined by the Board, of the individuals serving as the Corporation’s Chief Executive Officer, Chief Financial Officer and Vice President-Human Resources. Each member of the Committee shall hold office until the date that he or she resigns from the Committee or is removed from membership on the Committee by action of the Board. In the event an individual for any reason ceases to be a member of the Committee, the Board shall appoint another qualified individual to serve on the Committee. The members of the Committee shall choose from among themselves one such member to serve as chairperson of the Committee.

(b) Quorum and Manner of Acting. Except as hereinafter provided, a majority of the members of the entire Committee shall constitute a quorum for the transaction of business and the vote of a majority of the Committee members present at the time of the vote shall be the act of the Committee. In the absence of a quorum at any meeting of the Committee, a majority of the Committee members present thereat may adjourn such meeting to another time and place. Notice of the time and place of any such adjourned meeting shall be given to the Committee members who were not present at the time of the adjournment and, unless such time and place were announced at the meeting at which the adjournment was taken, to the other Committee members. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. In the event any Committee member is disqualified from acting on a specific matter pursuant to Section II(f) hereof, such individual shall not be taken into account in determining whether a quorum of the Committee exists for taking action with respect to such matter. The Committee members shall act only as a Committee and the individual Committee members shall have no power as such. All decisions of the Committee or the Board in the interpretation and administration of the Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Employees and their Beneficiaries or successors).

(c) Action Without a Meeting. Any action required or permitted to be taken by the Committee at a meeting may be taken without a meeting if all members of the Committee consent in writing to the adoption of a resolution authorizing such action. The resolution and written consents thereto by the members of the Committee shall be filed with the minutes of the proceedings of the Committee.

(d) Telephonic Participation. Any one or more members of the Committee may participate in a meeting of the Committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at the meeting.

5 (e) Compensation. Members of the Committee shall not be compensated for service as a Committee member.

(f) Disqualification. Each member of the Committee shall be disqualified from acting as such with respect to all matters that concern such person individually other than to the extent all Employees holding Incentive Units are affected uniformly.

(g) Responsibilities of the Committee. Except to the extent specifically reserved herein for the Board, the Committee shall have all powers, responsibilities and duties for controlling and administering the Plan, including, but not limited to, the following:

(h) Indemnification. The Corporation shall indemnify each Committee member against any liability or loss sustained by reason of any act or failure to act made in good faith, including, but not limited to, those in reliance on certificates, reports, tables, opinions or other communications from any company or agents chosen by the Committee in good faith, but excluding the gross negligence or willful misconduct of any member. Such indemnification shall include attorneys’ fees and other costs and expenses reasonably incurred in defense of any action brought by reason of any such act or failure to act.

(a) Grant of Incentive Units. The Committee may, in its sole discretion, grant Incentive Units to any one or more Employees. The number of Incentive Units granted to each Employee shall be determined by the Committee in its sole discretion. Incentive Units may only be granted as of a Valuation Date. Unless otherwise determined by the Committee, in its sole discretion, subject to adjustment as provided in Section IV(b), the “Initial Value” of any Incentive Unit granted under this Plan shall be equal to the value of such Incentive Unit determined as of the Valuation Date on which such Incentive Unit is granted.

(b) Recapitalization, Etc. In the event there is any change in the outstanding common stock of the Corporation by reason of any merger, reorganization, recapitalization, stock split, stock dividend, combination of shares, increase or decrease in the number of outstanding shares or otherwise (including that a sale of all or substantially all of the assets of its common stock shall occur or be pending), there shall be substituted for, added to or subtracted from each Incentive Unit then outstanding under the Plan, the number of additional or partial Incentive Units that the Board determines accurately reflects the effect of such merger, reorganization, recapitalization, stock split, stock dividend, share combination or other such event. Likewise, the Initial Value of each Incentive Unit shall also be adjusted by the Board if it determines in its sole discretion that such adjustment is appropriate. In the event that the Corporation enters into a transaction with an Affiliate of the Corporation, the Board may make an equitable adjustment to the Incentive Units if, in its sole discretion, the Board determines that such adjustment is appropriate.

(c) Vesting in Incentive Units. The Incentive Units granted to an Employee shall vest as determined by the Committee, in its sole discretion. In the absence of any action by the Committee to select a different vesting schedule, Incentive Units shall vest cumulatively, in twenty percent (20%) increments annually and such vesting shall end upon the Employee’s (i) Separation from Service for any reason whatsoever or (ii) transfer from the employer to whom he was providing services as of the date he received an Incentive Unit award to an Affiliate (other than a Subsidiary). Notwithstanding the foregoing, to the extent not previously canceled or forfeited, Incentive Units shall become immediately vested if, within twelve (12) months after a Change in Control of the Corporation, an Employee’s employment is terminated (x) by the Corporation or Affiliate for any reason other than Good Cause, (y) as a result of death or permanent disability, or (z) by the Employee for Good Reason. Notwithstanding any Plan provision to the contrary, if an Employee separates from service for Good Cause, all Incentive Units shall be immediately forfeited on the date of the Employee’s Separation from Service.

(d) Exercise of Incentive Units; Fixed Payment Date.

(e) Value of Incentive Unit Upon Exercise. Upon the exercise or deemed exercise of an Incentive Unit, the Employee (or his Beneficiary in the event of the Employee’s death) shall receive from the Corporation a cash payment equal to the Gain.

(f) Investment of Transferred Employees’ Gains. Upon the deemed exercise of an Employee’s Incentive Unit pursuant to Section IV(d)(vii), the Committee, in its sole discretion, may permit the Employee to make a written election to notionally invest his Gain in investment funds selected by the Committee. The Committee may promulgate rules and procedures governing investment elections under this Section IV(f). If such an election is made, the Committee shall establish a bookkeeping account for the Employee to reflect earnings and losses allocable thereto at such times and in such manner as shall be determined by the Committee. Notwithstanding any provision in the Plan to the contrary, earnings and losses based on an Employee’s investment elections shall begin to accrue only as of the date such Employee’s Gain is credited to his account.

(g) Expiration Date. Outstanding Incentive Units shall expire at 5:00 p.m. New York City time on the sixth (6th) anniversary of the grant date.

(h) Deferral Election. Employees eligible to participate in the Deferred Compensation Plan may elect to contribute up to 100% of the Gain, if any, into the Deferred Compensation Plan on a pre-tax basis. To make a deferral election, the Employee must complete and submit a Deferral Agreement to the Corporation no later than the end of the calendar year prior to the year in which an Incentive Unit is granted, or such earlier date specified by the

Committee. The Deferral Agreement shall become irrevocable as of the end of such calendar year, or such earlier date as specified by the Committee. Notwithstanding the foregoing, at the discretion of the Committee, an Employee may complete and submit a Deferral Agreement within thirty (30) days after the date the Incentive Unit is granted, provided that the Deferral Agreement is submitted at least twelve (12) months in advance of the Incentive Unit’s first vesting date. In such case, the Deferral Agreement shall become irrevocable as of the end of such thirty (30) day period.

(a) Beneficiary. Each Employee may, at any time, designate one or more Beneficiaries (both primary as well as contingent) to receive any benefits payable under the Plan upon his death. The Beneficiary designated under this Plan may be the same or different from the Beneficiary designation under any other plan of the Corporation or Subsidiary in which the Employee participates.

(b) Beneficiary Designation; Change. An Employee shall designate his Beneficiary by completing and signing a beneficiary designation form established by the Committee or its delegate, and returning it to the Committee or its designated agent. An Employee may change his Beneficiary designation by completing, signing and otherwise complying with the terms of the beneficiary designation form and the Committee’s rules and procedures, as in effect from time to time. Upon the acceptance by the Committee of a new beneficiary designation form, all Beneficiary designations previously filed shall be canceled. The Committee shall rely on the last completed beneficiary designation form filed by the Employee and accepted by the Committee before his death.

(c) Acknowledgment. No Beneficiary designation or change in Beneficiary designation shall be effective until accepted by the Committee or a Plan representative.

(d) No Beneficiary Designation. If an Employee fails to designate a Beneficiary as provided in this Section V or, if all designated Beneficiaries predecease the Employee, then the Employee’s designated Beneficiary shall be deemed to be his surviving spouse. If the Employee leaves no surviving spouse, payment shall be made to the Employee’s estate.

(e) Discharge of Obligations. The complete payment under the Plan to a Beneficiary shall fully and completely discharge the Corporation and its Subsidiaries from all further obligations under this Plan with respect to the Employee.

(a) Assignment or Transfer. No right to any accrued but unpaid Incentive Unit shall be sold, assigned, redeemed, pledged, transferred or otherwise encumbered by an Employee except by will or the laws of descent and distribution.

(b) Withholding Taxes. The Corporation or the appropriate Subsidiary shall have the right to deduct from all cash payments hereunder any federal, state, local or foreign income and employment taxes required by law to be withheld with respect to such payments.

(c) Costs and Expenses. The costs and expenses of administering the Plan shall be borne by the Corporation and shall not be charged against any particular award nor to any Employee receiving an Incentive Unit but shall be included in the Corporation’s computation of consolidated net income or loss.

(d) Funding of Plan. The Plan shall be unfunded. The Corporation shall not be required to segregate any of its assets to assure the payment of any Incentive Unit under the Plan. Neither the Employees nor any other persons shall have any interest in any fund or in any specific asset or assets of the Corporation or any other entity by reason of any accrued but unpaid Incentive Unit. The interests of each Employee hereunder are unsecured and shall be subject to the general creditors of the Corporation and the applicable Subsidiaries.

(e) Other Incentive Plans. The adoption of the Plan does not preclude the adoption by appropriate means of any other incentive plan for Employees of the Corporation or any Subsidiary.

(f) Plurals and Gender. Where appearing in this Plan, masculine gender shall include the feminine and neuter genders, and the singular shall include the plural, and vice versa, unless the context clearly indicates a different meaning.

(g) Headings. The headings and sub-headings in this Plan are inserted for the convenience of reference only and are to be ignored in any construction of the provisions hereof.

(h) Severability. In case any provision of this Plan shall be held illegal or void, such illegality or invalidity shall not affect the remaining provisions of this Plan, but shall be fully severable, and the Plan shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein.

(i) Limitations on Liability. Neither the Corporation nor any Subsidiary shall be responsible in any way for any action or omission of the Board, the Committee, or any other fiduciaries in the performance of their duties and obligations as set forth in this Plan. Furthermore, neither the Corporation nor any Subsidiary shall be responsible for any act or omission of any of their agents, or with respect to reliance upon advice of their counsel, provided that the Corporation and/or the appropriate Subsidiary relied in good faith upon the action of such agent or the advice of such counsel. Neither the Corporation, any Subsidiary, the Board, the Committee, nor any agents, employees, officers, directors or stockholders of any of them, nor any other person, shall have any liability or responsibility with respect to this Plan, except as expressly provided herein.

(j) Incapacity. If the Committee shall receive evidence satisfactory to it that a person entitled to receive payment of, or exercise, any Incentive Unit is, at the time when such benefit becomes payable, a minor, or is physically or mentally incompetent to receive such Incentive Unit and to give a valid release thereof, and that another person or an institution is then maintaining or has custody of such person and that no guardian, committee or other representative of the estate of such person shall have been duly appointed, the Committee may make payment of such Incentive Unit otherwise payable to

such person to such other person or institution, including a custodian under a Uniform Gifts to Minors Act, or corresponding legislation (who shall be an adult, a guardian of the minor or a trust company), and the release by such other person or institution shall be a valid and complete discharge for the payment or exercise of such Incentive Unit.

(k) Cooperation of Parties. All parties to this Plan and any person claiming any interest hereunder agree to perform any and all acts and execute any and all documents and papers which are necessary or desirable for carrying out this Plan or any of its provisions.

(l) Governing Law. All questions pertaining to the validity, construction and administration of the Plan shall be determined in accordance with the laws of the State of New Jersey, without giving effect to conflict of law principles.

(m) Nonguarantee of Employment. Nothing contained in this Plan shall be construed as a contract of employment between the Corporation or any Subsidiary and any Employee, as a right of any Employee to be continued in the employment of the Corporation or any Subsidiary, or as a limitation on the right of the Corporation or any Subsidiary to discharge any of its Employees, at any time, with or without cause.

(n) Notices. Each notice relating to this Plan shall be in writing and delivered in person, by recognized overnight courier or by certified mail to the proper address. Except as otherwise provided in any Incentive Unit award agreement with respect to the exercise thereunder, all notices to the Corporation or the Committee shall be addressed to it at GAF-Elk Corporation, 14911 Quorum Drive, Suite 600, Dallas, TX 75254, Attn: Senior Vice President-Human Resources. All notices to Employees, former Employees, beneficiaries or other persons acting for or on behalf of such persons shall be addressed to such person at the last address for such person maintained in the Corporation’s records.

(i) to establish, amend and enforce certain rules, regulations, and procedures as it deems necessary or proper for the efficient administration of the Plan;

(ii) to interpret the Plan, with its interpretations made in good faith to be final and conclusive, and to decide all questions concerning the Plan and correct any defect or omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable;

(iii) to determine the ongoing eligibility of any individual to participate in the Plan, and to require any person to furnish any information as it may request to properly administer the Plan as a condition to that person receiving any benefit under the Plan;

(iv) to compute the amount of benefits that are payable to any Employee or Beneficiary in accordance with the provisions of the Plan, and to determine the person or persons to whom those benefits will be paid; and

(v) to authorize the payment of benefits from the Plan in compliance with Section 409A.

(i) Default Fixed Exercise Date. Subject to Sections IV(d)(ii)-(v), an Employee’s vested Incentive Units shall be deemed to be exercised on the Default Fixed Exercise Date. Resulting Gains shall be paid in a lump sum in the next fiscal quarter. Notwithstanding the foregoing, with respect to any exercise occurring in the last fiscal month of any fiscal year, related Gains shall be paid

during the first fifteen (15) days of the second fiscal quarter following the Default Fixed Exercise Date.

(ii) Elected Fixed Exercise Date. Notwithstanding Section IV(d)(i), the Committee, in its sole discretion, may permit an Employee to elect an Elected Fixed Exercise Date on which Incentive Units shall be exercised. Gains resulting from such exercise shall be paid in a lump sum in the next fiscal quarter. Notwithstanding the foregoing, with respect to any exercise occurring in the last fiscal month of any fiscal year, related Gains shall be paid during the first fifteen (15) days of the second fiscal quarter following the Elected Fixed Exercise Date. An Elected Fixed Exercise Date must be on or after the date an Incentive Unit vests and prior to the Default Fixed Exercise Date.

(iii) Separation from Service. Notwithstanding Sections IV(d)(i) and IV(d)(ii) and subject to Section IV(d)(iv), a deemed exercise shall occur with respect to vested Incentive Units on the date an Employee experiences a Separation from Service. Resulting Gains shall be paid in a lump sum in the fiscal quarter following the Employee’s Separation from Service. Notwithstanding the foregoing, with respect to any deemed exercise occurring in the last fiscal month of any fiscal year, related Gains shall be paid during the first fifteen (15) days of the second fiscal quarter following the Employee’s Separation from Service. If

an Employee separates from service for Good Cause, all vested and unvested Incentive Units shall be immediately forfeited on the date of the Employee’s Separation from Service.

(iv) Retirement. Notwithstanding Section IV(d)(iii), in the event of an Employee’s Retirement, a deemed exercise shall occur with respect to vested Incentive Units on a date which is the earliest of: (1) the first anniversary of the Employee’s Separation from Service, (2) the Employee’s Elected Fixed Exercise Date or (3) the Default Fixed Exercise Date. Resulting Gains shall be paid in a lump sum in the fiscal quarter following the deemed exercise date. Notwithstanding the foregoing, with respect to any deemed exercise occurring in the last fiscal month of any fiscal year, related Gains shall be paid during the first fifteen (15) days of the second fiscal quarter following the deemed exercise date.

(v) Death. In the event of an Employee’s death, a deemed exercise shall occur with respect to vested Incentive Units on the date of the Employee’s death. Resulting Gains shall be paid to the Employee’s Beneficiary in a lump sum in the first fiscal quarter following the Employee’s death. Notwithstanding the foregoing, with respect to any deemed exercise occurring in the last fiscal month of any fiscal year, related Gains shall be paid to the Employee’s Beneficiary during the first fifteen (15) days of the second fiscal quarter following the Employee’s death.

(vi) Forfeiture of Unvested Incentive Units. Subject to Section IV(c), in the event of an Employee’s Separation from Service, death or transfer to an Affiliate (other than a Subsidiary), all unvested Incentive Units shall be forfeited immediately on the date of such Separation from Service, death or transfer.

(vii) Transfer to an Affiliate (other than a Subsidiary). Effective with respect to Incentive Units awarded on or after January 1, 2009, in the event that an Employee transfers from the employer to whom he was providing services as of the date he received an Incentive Unit Award to an Affiliate (other than a Subsidiary), a deemed exercise shall occur with respect to vested Incentive Units on the Employee’s transfer date. Resulting Gains (including any earnings or losses, as described below) shall be paid in a lump sum at the earliest time payment would otherwise have occurred, applying the provisions of Sections IV(d)(i)-(v). Until such time as the Gains are paid, the Committee, in its sole discretion, may permit an Employee to notionally invest such Gains in accordance with Section IV(f).

(i) “Final Value” Generally. For purposes of calculating the Gain, the “Final Value” shall equal the Incentive Unit Value as of the Valuation Date immediately preceding the exercise date or, if applicable, the Value on the Valuation Date

coinciding with the date of such exercise; provided that if the date of such exercise or deemed exercise is within thirty (30) days of the end of the Corporation’s fiscal quarter, then the “Final Value” shall equal the Incentive Unit Value as of the Valuation Date immediately following the date of such exercise or deemed exercise.

(ii) “Final Value” for Employees Transferred to An Affiliate. Notwithstanding any provision to the contrary, for purposes of calculating the Gain in relation to the deemed exercise of Incentive Units pursuant to Section IV(d)(vii), the “Final Value” shall equal the Incentive Unit Value as of the Valuation Date immediately preceding the Employee’s transfer date or, if applicable, the Value on the Valuation Date coinciding with the Employee’s transfer date; provided that if the date of such transfer is within thirty (30) days of the end of the Corporation’s fiscal quarter, then the “Final Value” shall equal the Incentive Unit Value as of the Valuation Date immediately following the Employee’s transfer date.

(iii) “Final Value” Upon Certain Terminations Following a Change in Control. Notwithstanding Section IV(e)(i), in the event an Employee experiences an involuntary termination of employment other than for Good Cause or a termination of employment for Good Reason within twelve (12) months following a Change in Control, for purposes of calculating the Gain resulting from a deemed exercise, the “Final Value” shall equal the Value of the Incentive Unit as of the fiscal month ended immediately preceding the Change in Control, provided that, notwithstanding the foregoing, in determining such “Final Value”, the Corporation shall exclude any non-cash charges incurred in connection with the Change in Control which would otherwise have been included in such calculation.

(A) Process and Timing. To select an Elected Fixed Exercise Date, the Employee must complete and submit an Exercise and Payment Agreement to the Corporation no later than the end of the calendar year prior to the year in which an Incentive Unit is granted, or such earlier date specified by the Committee. The Exercise and Payment Agreement shall become irrevocable as of the end of such calendar year, or such earlier date as specified by the Committee. Notwithstanding the foregoing, at the discretion of the Committee, an Employee may select an Elected Fixed Exercise Date within thirty (30) days after the Incentive Unit is granted, provided that the Exercise and Payment Agreement is submitted at least twelve (12) months in advance of the Incentive Unit’s first vesting date. In such case, the Exercise and Payment Agreement shall become irrevocable as of the end of such thirty (30) day period.

(B) Section 409A Transition Relief. Notwithstanding paragraph (A), on or before December 31, 2008, the Committee, in its sole discretion, may permit Employees to select or change an Elected Fixed Exercise Date for previously awarded Incentive Units by submitting an Exercise and Payment Agreement to the Corporation consistent with transition relief provided by the Department of the Treasury in Notice 2006-79, Notice 2007-86 and proposed regulations promulgated under Section 409A. If an Employee submits or changes an Exercise and Payment Agreement pursuant to this paragraph (B), then the last Exercise and Payment Agreement validly in effect as of December 31, 2008 shall control and be irrevocable.

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M8+uo7sIvflXcozd36P6lZXSsV1ZLfN9LPoEo/yFCMGaELMZpqRhzT8a4qH6LLVM F3xhL7RLMF2S+J/ullARWw== 0001047469-09-003525.txt : 20090331 0001047469-09-003525.hdr.sgml : 20090331 20090331160940 ACCESSION NUMBER: 0001047469-09-003525 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20081231 FILED AS OF DATE: 20090331 DATE AS OF CHANGE: 20090331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUILDING MATERIALS MANUFACTURING CORP CENTRAL INDEX KEY: 0001078706 STANDARD INDUSTRIAL CLASSIFICATION: ASPHALT PAVING & ROOFING MATERIALS [2950] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-69749-01 FILM NUMBER: 09719003 BUSINESS ADDRESS: STREET 1: 1361 ALPS ROAD CITY: WAYNE STATE: NJ ZIP: 07470 BUSINESS PHONE: 9736283000 MAIL ADDRESS: STREET 1: 1361 ALPS ROAD CITY: WAYNE STATE: NJ ZIP: 07470 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BUILDING MATERIALS CORP OF AMERICA CENTRAL INDEX KEY: 0000927314 STANDARD INDUSTRIAL CLASSIFICATION: ASPHALT PAVING & ROOFING MATERIALS [2950] IRS NUMBER: 223276290 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-81808 FILM NUMBER: 09719002 BUSINESS ADDRESS: STREET 1: 1361 ALPS RD CITY: WAYNE STATE: NJ ZIP: 07470 BUSINESS PHONE: 2016283000 MAIL ADDRESS: STREET 1: 1361 ALPS ROAD CITY: WAYNE STATE: NJ ZIP: 07470 10-K 1 a2191887z10-k.htm 10-K

Use these links to rapidly review the document
TABLE OF CONTENTS
BUILDING MATERIALS CORPORATION OF AMERICA

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K


ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number 33-81808

BUILDING MATERIALS CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)		22-3276290 (IRS Employer Identification No.)
1361 Alps Road Wayne, New Jersey (Address of Principal Executive Offices)		07470 (Zip Code)

Registrant's Telephone Number, Including Area Code: (973) 628-3000
Securities registered pursuant to Section 12(b) of the Act: none
Securities registered pursuant to Section 12(g) of the Act: none
See table of additional registrants below

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ý No o

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer o
Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

As of March 30, 2009, 1,015,010 shares of Class A Common Stock, $.001 par value of Building Materials Corporation of America were outstanding. There is no trading market for the common stock of Building Materials Corporation of America.

As of March 30, 2009, the additional registrant had the number of shares outstanding which is shown on the table below. There is no trading market for the common stock of the additional registrant. As of March 30, 2009, no shares of the registrant or the additional registrant were held by non-affiliates.

Table of Contents

ADDITIONAL REGISTRANTS

Exact name of registrant as specified in its charter		State or other jurisdiction of incorporation or organization		Registration No./ I.R.S. Employer Identification Number	Address, including zip code and telephone number, including area code, of registrant's principal executive office

Building Materials		Delaware	10	333-69749-01/	1361 Alps Road
	Manufacturing Corporation			22-3626208	Wayne, New Jersey 07470 (973) 628-3000

BUILDING MATERIALS CORPORATION OF AMERICA

Form 10-K
for the fiscal year ended December 31, 2008

TABLE OF CONTENTS


PART I
Item 1.	Business	1
Item 1A.	Risk Factors	8
Item 1B.	Unresolved Staff Comments	16
Item 2.	Properties	17
Item 3.	Legal Proceedings	18
Item 4.	Submission of Matters to a Vote of Security Holders	22
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Selected Financial Data	23
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 8.	Financial Statements and Supplementary Data	23
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	23
Item 9A(T).	Controls and Procedures	23
Item 9B.	Other Information	24
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	25
Item 11.	Executive Compensation	26
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	37
Item 13.	Certain Relationships and Related Transactions and Director Independence	37
Item 14.	Principal Accounting Fees and Services	39
PART IV
Item 15.	Exhibits and Financial Statement Schedules	40

Table of Contents

PART I

The Business section and other parts of this annual report on Form 10-K contain both historical and forward-looking statements that involve risks and uncertainties. Many of the forward-looking statements are located in "Management's Discussion and Analysis of Financial Condition and Results of Operations." These forward-looking statements are only predictions and generally can be identified by words such as "anticipates," "expects," "believes," "intends," "plans," "predicts," "foresees" and other related terms. Similarly, statements that describe our objectives, plans or goals are also forward-looking statements. Our operations are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. The forward-looking statements included herein are made only as of the date of this annual report on Form 10-K. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Item 1. Business.

General

Building Materials Corporation of America, or BMCA, is a leading national manufacturer and marketer of a broad line of asphalt and polymer-based roofing products and accessories for the residential and commercial roofing markets. We also manufacture specialty building products and accessories for the professional and do-it-yourself remodeling and residential construction industries. We were incorporated under the laws of Delaware in 1994 and are a wholly-owned subsidiary of BMCA Holdings Corporation, which is a wholly-owned subsidiary of G-I Holdings Inc. In 1994, we acquired the operating assets and certain liabilities of GAF Building Materials Corporation, whose name has been changed to G-I Holdings Inc. G-I Holdings Inc. is a wholly-owned subsidiary of G Holdings Inc. ("G Holdings"). Samuel J. Heyman beneficially owns (as defined in Rule 13d-3 of the Securities Exchange Act) approximately 99% of G Holdings Inc. We do business under the name "GAF Materials Corporation." Unless otherwise indicated by the context, "we," "us," "our" and "BMCA" refer to Building Materials Corporation of America and its consolidated subsidiaries.

To facilitate administrative efficiency, effective October 31, 2000, GAF Corporation, our former indirect parent, merged into its direct subsidiary, G-I Holdings Inc. G-I Holdings Inc. then merged into its direct subsidiary, G Industries Corp., which in turn merged into its direct subsidiary, GAF Fiberglass Corporation. In that merger GAF Fiberglass Corporation changed its name to GAF Corporation. Effective November 13, 2000, GAF Corporation merged into its direct subsidiary, GAF Building Materials Corporation, whose name was changed in the merger to G-I Holdings Inc. G-I Holdings Inc. is now our indirect parent, and our direct parent is BMCA Holdings Corporation. We refer to G-I Holdings Inc. and any and all of its predecessor corporations, including GAF Corporation, G-I Holdings Inc., G Industries Corp., GAF Fiberglass Corporation and GAF Building Materials Corporation in this report as "G-I Holdings."

On January 5, 2001, G-I Holdings filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey in Newark, New Jersey due to its asbestos-related bodily injury claims, which related to the inhalation of asbestos fiber. We refer to these claims in this report as "Asbestos Claims." G-I Holdings, the successor to GAF Corporation by merger, is a privately-held holding company and we are its only operating subsidiary. We are not included in the bankruptcy filing.

On February 22, 2007 ("date of acquisition"), a subsidiary of BMCA acquired approximately 90% of the outstanding common shares of ElkCorp ("Elk"), a Dallas, Texas-based manufacturer of roofing products and building materials. The remaining common shares of Elk were acquired on March 26,

Table of Contents

2007, resulting in Elk becoming an indirect wholly-owned subsidiary of BMCA. See Acquisition of ElkCorp.

Our executive offices are located at 1361 Alps Road, Wayne, New Jersey 07470 and our telephone number is (973) 628-3000.

Residential Roofing

We are a leading national manufacturer of a complete line of premium residential roofing products. Residential roofing product sales represented approximately 78%, 75% and 74% of our net sales in 2008, 2007 and 2006, respectively. Our principal residential roofing products consist of laminated and strip asphalt shingles. We have improved our sales mix of residential roofing products by increasing our emphasis on laminated shingles and accessory products, which are generally sold at higher prices with more attractive profit margins than our standard strip shingle products. We believe, based on unit sales, that we are the largest manufacturer of residential roofing shingles in the United States. Statements contained in this report as to our competitive position are based on management's estimates and industry information which we believe is reliable.

Our two principal lines of residential roofing shingles are the Timberline® series and the Sovereign® series. We also produce a wide array of designer lifetime shingles.

The Timberline Series.

The Timberline series offers a premium architectural laminated product line that adds dramatic shadow lines, while adding depth and dimension and substantially improving the appearance of a roof. The series includes:

•: the Timberline Prestique® 30 High Definition® shingle and the Timberline Natural Shadow™ shingle, both mid-weight architectural laminated shingles, which serve as economical trade-ups for consumers from a 3-tab strip shingle, with 30-year limited warranties;
•: the Timberline Prestique 40 shingle, a heavyweight architectural laminated shingle with superior durability and a 40-year limited warranty;
•: the Timberline Prestique Lifetime shingle, a super-heavyweight architectural laminated shingle with the maximum durability of the Timberline series, with a lifetime limited warranty; and
•: the Timberline Prestique Grande® shingle, which is larger than standard Timberline shingles and reduces labor costs in installation because of its larger size, with a 40-year limited warranty.

The Sovereign Series.

The Sovereign series includes:

•: the economical 3-tab Sentinel® strip shingle, with a 20-year limited warranty;
•: the Royal Sovereign® shingle, a heavier 3-tab strip shingle, designed to capitalize on the "middle market" for quality shingles, with a 25-year limited warranty; and
•: the Marquis®WeatherMax® shingle, a superior performing heavyweight 3-tab strip shingle, with a 30-year limited warranty.

Table of Contents

Designer Lifetime Shingles.

Our designer lifetime asphalt shingles include:

•: the Slateline® shingle, a designer strip shingle, which offers the appearance of natural slate at a fraction of the cost and reduces labor costs in installation because of its larger size, with a lifetime limited warranty;
•: the Grand Slate™ shingle, a super-heavyweight designer lifetime laminated shingle, which offers the appearance of natural slate at a fraction of the cost and reduces labor costs in installation because of its larger size, with a lifetime limited warranty;
•: the Grand Sequoia® shingle, a designer lifetime laminated shingle, which offers a rugged wood shake appearance and reduces labor costs in installation, with a lifetime limited warranty;
•: the Grand Canyon™ shingle, a designer lifetime laminated shingle, with the extra-thick rugged wood shake appearance, which reduces labor costs in installation, with a lifetime limited warranty;
•: the Country Mansion® shingle, a designer lifetime laminated shingle, designed for houses with a distinctive rich appearance, which reduces labor costs in installation because of its larger size, with a lifetime limited warranty;
•: the Capstone® shingle, a designer lifetime laminated shingle, designed with the classic look of European slate, with a lifetime limited warranty; and
•: the Camelot® shingle, a super-heavyweight designer lifetime laminated shingle, which offers both natural beauty and uncompromising performance and reduces labor costs in installation because of its larger size, with a lifetime limited warranty.

Specialty Roofing.

•: TruSlate™ is a genuine slate roofing system that features a patented system that combines real slate with our innovative hybrid technology designed for quick and easy installation that adds unique charm and character to any home and makes an architectural statement.

Roof System Solution. In addition to shingles, we supply the major components necessary to install a complete roofing system. Our Roof System Solution begins with Weather Watch® and StormGuard® waterproof underlayments for eaves, valleys and flashings to protect against water seepage between the roof deck and the shingles caused by ice build-up and wind-driven rain. Our Roof System Solution also includes Shingle-Mate® and Deck-Armor™ underlayments; Timbertex®, Ridglass®, Seal-A-Ridge® and Z® Ridge Hip and Ridge shingles, which are thicker and typically larger than standard hip and ridge shingles and provide dramatic accents to the slopes and planes of a finished roof; and the Cobra® and Master Flow® Vent series, which provide attic ventilation.

Commercial Roofing

We manufacture a full line of modified bitumen and asphalt built-up roofing products, thermoplastic polyolefin products, liquid applied membrane systems and roofing accessories for use in the application of commercial roofing systems. Commercial roofing represented approximately 17%, 19% and 22% of our net sales in 2008, 2007 and 2006, respectively. We sell thermoplastic single-ply commercial roofing products under the EverGuard® trademark. The EverGuard products address the important and growing single ply segment of the commercial roofing market. The thermoplastic products offer building owners the reliability of heat-welded seams and ENERGY STAR® qualified systems. The EverGuard brand also includes Freedom™ self-adhered TPO membranes, which feature faster installation without the need for hot asphalt, solvent-based adhesives, or open-flamed torches.

Table of Contents

We believe that, based on the combined unit sales of asphalt built-up roofing products and modified bitumen products, we are the largest manufacturer of these products in the United States.

We manufacture fiberglass-based felts, which are made from asphalt impregnated glass fiber mat for use as a component in asphalt built-up roofing systems under the GAFGLAS® trademark. Most of our fiberglass-based roofing systems are assembled on the roof by applying successive layers of roofing with asphalt and topped, in some applications, with gravel or mineral surfaced sheets. Thermal insulation may be applied beneath the membrane. We also manufacture base sheets, flashings and other roofing accessories for use in these systems; our TOPCOAT® roofing system, a liquid-applied membrane system designed to protect and waterproof existing roofing systems; and roof maintenance products. In addition, we market insulation products under the EnergyGuard™ brand name, which includes perlite and isocyanurate foam in addition to accessories, such as vent stacks, fasteners and cements and coatings. These products allow us to provide customers with a complete roofing system and the ability to market and sell extended guarantees.

We sell modified bitumen products under the Ruberoid® trademark. Modified bitumen products are used in new and re-roofing applications or in combination with glass membranes in GAF CompositeRoof™ systems. These products consist of a roofing membrane utilizing polymer-modified asphalt, which strengthens and increases flexibility and is reinforced with a polyester non-woven mat or a glass mat. Modified bitumen systems provide an alternative to conventional built-up roofing systems, including ease of installation and maintenance.

Specialty Building Products and Accessories

We manufacture and market a variety of specialty building products and accessories for the professional and do-it-yourself remodeling and residential construction industries and other industries. Specialty building products and accessories represented approximately 5%, 6% and 4% of our net sales in 2008, 2007 and 2006, respectively. These products primarily consist of metal and fiberglass air distribution products for the HVAC (heating, ventilating and air conditioning) industry, decking and railing products, manufactured decorative stone products and specialty fiber products. We also manufacture a line of specialty coatings for various industrial applications.

Marketing and Sales

Our sales and marketing functions are designed to help customers grow their businesses and provide enhanced services while offering property owners the best and safest choice from our product offerings. We believe we have one of the industry's largest roofing sales forces. We have a staff of technical professionals who work directly with architects, consultants, contractors and building owners and provide support to our sales force, distributors, lumberyards and retailers. We sell our roofing and specialty building products and accessories through our own sales force of experienced, full-time employees and independent sales representatives located across the United States and Canada. A major portion of our roofing product sales are to wholesale distributors and retailers, who resell our products to roofing contractors, builders and property owners. We believe that the wholesale distribution channel represents the principal distribution channel for professionally-installed roofing products. As a result, we believe that our nationwide coverage has contributed to certain of our roofing products being among the most recognized and requested brands in the industry.

Our certified contractor programs offer marketing and support services to nationwide networks of roofing, decorative stone, and decking installers, as well as residential homebuilders. We view these certified contractors and builders as an effective extension of our sales force, which promotes our products and support services (including enhanced warranty protection) directly to property owners, construction specifiers and architects.

Table of Contents

Significant Customers

We sell our products through multiple distribution channels with a strong presence in the wholesale, retail, manufactured housing and lumberyard distribution channels. No single customer accounted for over 10% of our net sales in 2008, 2007 and 2006, except for The Home Depot, Inc. and American Builders & Contractors Supply Company, Inc.

Raw Materials

The major raw materials required for the manufacture of our roofing products are asphalt, mineral stabilizer, glass fiber, glass fiber mat, polyester mat and granules. Asphalt and mineral stabilizer are available from a large number of suppliers on substantially similar terms. We currently have contracts with several of these suppliers, and others are available as substitutes. In 2008, prices of most raw materials, other than asphalt and other petroleum-based raw materials and energy, have been relatively stable, rising moderately with general industrial prices.

The prices of energy and crude oil continued to rise reaching record high levels during the third quarter of 2008, including the price of asphalt and other petroleum-based raw materials, which also reached record high levels. In the fourth quarter of 2008, the prices of energy and crude oil began to decline primarily due to, in our opinion, the current worldwide economic conditions, which has resulted in weaker demand. The decline in crude oil prices in the fourth quarter of 2008 caused a moderate decline in asphalt and other petroleum-based raw materials; however, these prices remained high, when compared to historical prices. Due to the strength of our manufacturing operations, which allows us to use many types of asphalt, together with our ability to secure alternative sources of supply, we do not anticipate that any potential disruption in the supply of asphalt will have a material impact on future net sales, although no assurances can be provided in that regard. We will attempt to pass on future cost increases from suppliers as needed; however, no assurances can be provided that these price increases will be accepted in the marketplace.

The major raw materials required for the manufacture of our specialty building products and accessories are steel tubes, sheet metal products, aluminum, motors and cartons. The major raw materials for the manufacture of our specialty decking and mat product lines are polypropylene, filler, fiberglass and binder. These raw materials are commodity-type products, the pricing for which is driven by supply and demand. Prices of other raw materials used in the manufacture of specialty building products and accessories are more closely tied to movements in inflation rates. All of these raw materials are available from a large number of suppliers on substantially similar terms.

Four of our roofing plants have easy access to deep water ports thereby permitting delivery of asphalt by ship, which we believe is the most economical means of asphalt transport. Through December 31, 2008, our Nashville, Tennessee plant manufactured a portion of our glass fiber requirements for use in our Chester, South Carolina, Shafter, California and Ennis, Texas plants, which manufacture glass fiber mat substrate. In February 2009, we announced the temporary shutdown of our Shafter, California and Nashville, Tennessee facilities. We expect production to end at these facilities during the first six months of 2009.

During 2008, we and our subsidiaries purchased a substantial portion of our headlap roofing granules, colored roofing granules and algae-resistant granules, on a purchase order basis, from ISP Minerals Inc. ("ISP Minerals"), an affiliate of BMCA and International Specialty Products Inc., which is also an affiliate of BMCA. We refer to International Specialty Products Inc. and its subsidiaries as "ISP." The amount of mineral products purchased each year on this basis is based on current demand and is not subject to minimum purchase requirements. For the year ended December 31, 2008, we purchased $40.6 million of roofing granules under this arrangement.

Table of Contents

In addition to the granules products purchased by BMCA under the above purchase order basis, the balance of BMCA's granules requirements are purchased under a contract expiring in 2013. The amount of mineral products purchased each year under the contract is based on current demand and is not subject to minimum purchase requirements. Under the contract, for the year ended December 31, 2008, we purchased $83.2 million of roofing granules.

Backlog

Our backlog varies depending on our seasonal operating demand and is not significant to our overall operations.

Seasonal Variations and Working Capital

Sales of roofing and specialty building products and accessories in the northern regions of the United States generally decline during the winter months due to adverse weather conditions. Generally, our inventory practice includes increasing inventory levels in the first and second quarters of each year in order to meet peak season demand from June through November.

Warranty Claims

We provide certain limited warranties covering most of our residential roofing products for periods generally ranging from 20 to 50 years, although certain of our product lines provide for a lifetime limited warranty. Although terms of warranties vary, we believe that our warranties generally are consistent with those offered by our competitors, with the exception of our unique "Golden Pledge™" and "Peace of Mind™" warranties. We also offer certain limited warranties of varying duration covering most of our commercial roofing products. Most of our specialty building products and accessories carry limited warranties for periods generally ranging from 5 to 20 years, with lifetime limited warranties on certain products. We review the accruals established for estimated probable future warranty claims on a periodic basis.

Competition

The roofing products industry is highly competitive and includes a number of national competitors. The primary competitors in the residential roofing and accessories markets are Owens Corning, Tamko and CertainTeed Corporation, and in the commercial roofing market are Johns Manville, Firestone Building Products, Carlisle Companies, Inc., Tamko and CertainTeed Corporation. In addition, in the commercial roofing market, there are numerous regional competitors.

Competition is based largely upon products and service quality, distribution capability, price and credit terms. We believe that we are well-positioned in the marketplace as a result of our broad product lines in the residential and commercial roofing markets, consistently high product quality, strong sales force and national distribution capabilities.

Our specialty building products and accessories business is highly competitive with numerous competitors due to the breadth of the product lines we market. Major competitors include Gibraltar Industries, Inc., Southwark Metal Manufacturing Co., Lomanco Inc., Standex International Corp., Hart & Cooley, Inc. and Trex Company, Inc.

Research and Development

We primarily focus our research and development activities on the development of new products and process improvements and the testing of alternative raw materials and supplies. Our research and development activities are located at technical centers in Ennis, Texas; Wayne, New Jersey; Chester,

Table of Contents

South Carolina and Walpole, Massachusetts. Our research and development expenditures were approximately $8.1, $8.7 and $8.0 million in 2008, 2007 and 2006, respectively.

Intellectual Property

We hold a number of patents, trademarks and licenses obtained over a number of years and expiring at various times consistent with our business needs. Generally, we seek statutory protection for strategic or financially important intellectual property, including patents, trademarks and licenses developed in connection with our businesses. Certain intellectual property, where appropriate, is protected by contracts, licenses, confidentiality or other similar agreements.

We own numerous United States and foreign patents (and their respective counterparts), the more important of which cover those technologies and inventions embodied in current products, or which are used in the manufacture of those products. While we believe our patent portfolio is important to our business operations and in the aggregate constitutes a valuable asset, no single patent, or group of patents, is critical to the success of our businesses. We also, from time to time, grant licenses under our patents and technology and obtain licenses under the patents and technology of others.

In addition, we own numerous registered trademarks in the United States and in many foreign countries that apply to our product offerings and businesses. Most works of authorship, such as computer programs, catalogs, product brochures and sales literature, carry appropriate notices indicating our claim to copyright protection under United States laws and, where appropriate, under international treaties.

Environmental Compliance

Since 1970, Federal, state and local authorities have adopted and amended a wide variety of Federal, state and local environmental laws and regulations relating to environmental matters. The environmental laws and regulations deal with air and water emissions or discharges into the environment, as well as the generation, storage, treatment, transportation and disposal of solid and hazardous waste and the remediation of any releases of hazardous substances and materials to the environment. These laws and regulations affect us because of the nature of our operations and that of our predecessor and certain of the substances that are, or have been used, produced or discharged at our or our predecessor's plants or at other locations. We made capital expenditures of approximately $0.9, $0.4 and $1.0 million in 2008, 2007 and 2006, respectively, relating to environmental compliance. These expenditures are included in additions to property, plant and equipment.

We believe that our manufacturing facilities comply in all material respects with applicable environmental laws and regulations, and, while we cannot predict whether more burdensome requirements will be adopted by governmental authorities in the future, nor can we predict with certainty future capital expenditures or operating costs for environmental compliance, we do not believe they will have a material effect on our business, liquidity, results of operations, cash flows, financial position or competitive position.

See Item 3, "Legal Proceedings—Environmental Litigation."

Employees

At December 31, 2008, we employed approximately 3,700 people, approximately 800 of whom were subject to fourteen union contracts. The contracts are effective for two to five year periods. During 2008 and the first quarter of 2009, seven labor contracts expired and were renegotiated. We believe that our relations with our employees and their unions are satisfactory.

Table of Contents

Acquisition of ElkCorp

On February 22, 2007, a subsidiary of BMCA acquired approximately 90% of Elk common shares at a purchase price of $43.50 per common share. On March 26, 2007 we acquired the remaining Elk common shares in a second step merger in exchange for the right to receive $43.50 per share in cash, which resulted in Elk becoming an indirect wholly-owned subsidiary of BMCA. We completed the acquisition of the Elk common shares at a purchase price of approximately $945.6 million, net of the repayment of $195.0 million of the then outstanding Elk senior notes, which were assumed in connection with the acquisition and repaid in March 2007.

Other Information

Any materials that we have filed with the Securities and Exchange Commission may be read and copied by the public at the SEC's Public Reference Room located at 450 Fifth Street, N.W., Washington, DC 20549 or by telephoning the SEC at 1-800-SEC-0330. These reports are also available electronically on the SEC's EDGAR website at www.sec.gov. Alternatively, if you wish to receive a paper copy of our reports or any of the exhibits filed with or furnished to the SEC, they may be obtained by writing to: the Corporate Secretary, Building Materials Corporation of America, 1361 Alps Road, Wayne, New Jersey 07470.

Item 1A. Risk Factors.

Risks Related to Investing in our Securities

We may be forced to contribute assets to our indirect parent to satisfy its bankruptcy creditors, potentially rendering us unable to pay principal and interest on our credit obligations.

On January 5, 2001, our indirect parent, G-I Holdings, filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code due to its asbestos-related bodily injury claims, which relate to the inhalation of asbestos fiber contained in products sold by G-I Holdings or its predecessors. G-I Holdings, the successor to GAF Corporation by merger, is a privately-held holding company, and we are its only operating subsidiary. Although we were not included in the bankruptcy filing, the Official Committee of Asbestos Claimants (the "creditors' committee") in the G-I Holdings case petitioned to substantively consolidate us with G-I Holdings or cause us to file for bankruptcy protection. Although the petition was denied by the Bankruptcy Court on a preliminary basis, the creditors' committee is still seeking such relief. On July 7, 2004, the Bankruptcy Court entered an order authorizing the creditors' committee to commence an adversary proceeding against us and others challenging, as a fraudulent conveyance, certain transactions entered into in connection with our formation in 1994 in which G-I Holdings caused to be transferred to us all of its roofing business and assets and in which we assumed certain liabilities relating to those assets, including a specified amount of asbestos liabilities (the "1994 transaction"). The Bankruptcy Court also permitted the creditors' committee (in the name of G-I Holdings) to pursue a claim against holders of our bank and bond debt outstanding in 2000, seeking recovery from them, based on the creditors' committee's theory that the 1994 transaction was a fraudulent conveyance. On July 20, 2004, the creditors' committee appealed certain aspects of the Bankruptcy Court's order (and a June 8, 2004 decision upon which the order was based). G-I Holdings, the holders of our bank and bond debt and BMCA cross-appealed. The District Court entered an order on June 21, 2006 affirming in part and vacating in part the Bankruptcy Court's July 7, 2004 order. Among other things, the District Court vacated that aspect of the Bankruptcy Court's order authorizing the creditors' committee to pursue avoidance claims against us and the holders of our bank and bond debt as of 2000. This issue was remanded to the Bankruptcy Court for further proceedings consistent with the District Court's opinion. By order dated August 22, 2008, the Bankruptcy Court stayed this authorization proceeding and other adversary proceedings effective upon

Table of Contents

the filing of a Joint Plan of Reorganization by G-I Holdings, the creditors' committee and the legal representative of present and future holders of asbestos-related claims. We believe the creditors' committee's avoidance claims are without merit and, in the event the stay is terminated, the Bankruptcy Court should not permit the creditors' committee to pursue such claims against us and the holders of our bank and bond debt as of 2000.

Claimants in the G-I Holdings bankruptcy case, including judgment creditors, might seek to file their asbestos-related bodily injury claims against us or additional claims of the G-I Holdings estate under alternative arguments. In these actions, claimants generally do not specify damages and seek to hold BMCA directly liable for damages as would be established in unspecified future judicial proceedings arising out of asbestos-containing products for which G-I Holdings would be responsible. We have been advised by G-I Holdings that on August 12, 2008, G-I Holdings reached an agreement with the creditors' committee and the legal representative of present and future holders of asbestos-related claims to jointly file a plan of reorganization with the Bankruptcy Court that will provide for settlement of Asbestos Claims and all related litigation. The agreement is subject to a number of contingencies, but if the contingencies are met and the reorganization plan is confirmed, all of the actions described above will be resolved. If the bankruptcy is not resolved, BMCA and G-I Holdings intend to vigorously defend all litigations related thereto. A Joint Plan of Reorganization of G-I Holdings was filed with the Bankruptcy Court on August 21, 2008, and a First Amended Joint Plan of Reorganization of G-I Holdings was filed with the Bankruptcy Court on October 30, 2008. G-I Holdings filed a Second Amended Joint Plan of Reorganization of G-I Holdings with the Bankruptcy Court on December 3, 2008.

If the reorganization plan is not confirmed and we are not successful defending against one or more of the claims outlined above, we may be forced to file for bankruptcy protection and/or contribute all or a substantial portion of our assets to satisfy the claims of G-I Holdings' creditors. Either of these events, or the substantive consolidation of G-I Holdings and BMCA, would weaken our operations and cause us to divert a material amount of our cash flow to satisfy the asbestos claims of G-I Holdings, and may render us unable to pay interest or principal on our $600.0 million Senior Secured Revolving Credit Facility, (the "Senior Secured Revolving Credit Facility"), our $975.0 million Term Loan Facility (the "Term Loan") and our $325.0 million Junior Lien Term Loan Facility (the "Junior Lien Term Loan", and collectively with the Senior Secured Revolving Credit Facility and the Term Loan the "Senior Secured Credit Facilities") and our 7³/4% Senior Notes due 2014 (the "Senior Notes"). See Item 3—"Legal Proceedings."

There will be a change of control if our outstanding common stock is liquidated as a result of our parent company's bankruptcy. If a change of control occurs, we may be unable to satisfy our obligations under our Senior Secured Credit Facilities, our Senior Notes or other debt instruments.

Even if we are not forced to file for bankruptcy protection, contribute our assets to satisfy the claims of G-I Holdings' creditors or convey our assets to G-I Holdings, the bankruptcy court administering the G-I Holdings case may order the liquidation of the assets of G-I Holdings, which includes all of our parent company's outstanding common stock. The transfer of our parent company's capital stock could constitute a change of control under our Senior Secured Credit Facilities and the indenture governing our Senior Notes. A change of control is an event of default under our Senior Secured Credit Facilities, which could result in the acceleration of all our borrowings thereunder. Any such acceleration would be an event of default under our Senior Notes, pursuant to which payment under our Senior Notes may be accelerated. If a change of control occurs, we may be unable to satisfy our obligations under our Senior Secured Credit Facilities, our Senior Notes or other debt instruments.

In addition, the indenture relating to the Senior Notes provides that if a change of control occurs, our noteholders will have the right to require us to repurchase their notes at a premium above the

Table of Contents

principal amount, plus any accrued and unpaid interest to the repurchase date. Our Senior Secured Credit Facilities limit us from repurchasing our Senior Notes. Any of our future credit facilities or other obligations may contain similar restrictions. In the event a change of control occurs at a time when we are effectively prohibited from purchasing our Senior Notes, we could seek the consent of the lenders to offer to purchase our Senior Notes or could attempt to refinance the borrowings that contain the prohibition. If we do not obtain such consent or refinance such borrowings, we will be prohibited from repurchasing our Senior Notes. Even if we are permitted to make a change of control offer, we may not have available funds sufficient to pay the change of control purchase price for any or all of our Senior Notes that are delivered by holders for repurchase. Any failure to repurchase our Senior Notes, whether or not prohibited by our other debt instruments, would constitute an event of default under the relevant indenture, which in turn would constitute a default under the Senior Secured Revolving Credit Facility. If any of these events of default were to occur, we may be unable to pay the accelerated principal amount of and interest on our Senior Notes and our noteholders will lose some or all of their investments.

Our substantial leverage could impair our ability to fulfill our obligations under our existing debt and restrict our future operations.

We have substantial outstanding debt and, as a result, significant debt service obligations. At December 31, 2008, we had total outstanding consolidated debt of $1,731.6 million (including $52.8 million of loans payable to our parent corporation). For the year ended December 31, 2008, we had $158.9 million of interest expense. We anticipate funding these obligations principally from our cash on hand, cash flow from operations and/or borrowings under our Senior Secured Revolving Credit Facility. Our substantial outstanding debt has important consequences to our debtholders, including the risk that we may not generate sufficient cash flow from operations to pay principal and interest on our debt, including our Senior Secured Credit Facilities and our Senior Notes, or to invest in our businesses. We may not be able to satisfy our obligations, including those under our Senior Secured Credit Facilities and our Senior Notes, from our cash flow from operations and refinancings. If we cannot, we might be able to raise cash to satisfy our obligations through potential sales of assets or equity. Our ability to do so, however, depends on our results of operations, market conditions, restrictions contained in our Senior Secured Credit Facilities and the indenture relating to our Senior Notes and other factors. If we are unable to refinance debt or raise funds through sales of assets or equity or otherwise, we may be unable to pay principal of and interest on our Senior Secured Credit Facilities and our Senior Notes potentially causing foreclosure by our creditors on our assets and potentially rendering us unable to continue as a going concern.

Our substantial leverage could have additional important consequences to our business including:

•: limiting our ability to obtain additional financing on satisfactory terms to fund our working capital requirements, capital expenditures, debt service requirements and other general corporate purposes;
•: reducing the availability of our cash flow to fund our working capital requirements, capital expenditures, and other general corporate requirements because we will be required to use a significant portion of our cash flow to service our debt obligations;
•: increasing our vulnerability to the current and potential future general economic downturns and adverse industry conditions;
•: increasing our exposure to interest rate increases because a portion of our borrowings is at variable interest rates; and
•: placing us at a competitive disadvantage to competitors that have less relative amounts of debt.

Table of Contents

In addition, subject to covenants contained in our Senior Secured Credit Facilities and the indenture relating to our Senior Notes, we may incur additional debt in the future. Under the most restrictive debt incurrence covenant of our debt instruments, which is the Senior Secured Credit Facilities, we could incur additional debt of approximately $138.0 million as of December 31, 2008. This does not include any availability under our Senior Secured Revolving Credit Facility, which amounted to $241.4 million at December 31, 2008. To the extent we incur any additional debt, the risks discussed above will be intensified. Moreover, some of the debt we may incur may be secured by first-priority liens in the collateral securing our Senior Notes, which would have priority over the rights of holders of the Senior Notes, with respect to the collateral.

The value of the collateral securing the Senior Secured Credit Facilities and the Senior Notes may not be sufficient to satisfy our obligations on the Senior Secured Credit Facilities and the Senior Notes and the collateral securing the Senior Secured Credit Facilities and the Senior Notes may be diluted or reduced under certain circumstances.

Our Senior Secured Revolving Credit Facility is secured by a first-priority lien on our accounts receivable, inventory, precious metals, deposit accounts, other current assets and the proceeds thereof (the "Senior Secured Revolving Credit Facility Collateral"). Our Term Loan and Senior Notes are secured by a first-priority lien on substantially all of the other assets other than the Senior Secured Revolving Credit Facility Collateral (the "Term Loan Collateral") and by a second-priority lien on the Senior Secured Revolving Credit Facility Collateral. Our Junior Term Loan is secured by second-priority liens on the Term Loan Collateral and by third-priority liens on the Senior Secured Revolving Credit Facility Collateral, to the extent and for so long as such assets are used to secure borrowings under our Senior Secured Credit Facilities, including refinancings.

As of December 31, 2008, we and our subsidiaries had $76.0 million of debt secured by the Senior Secured Revolving Credit Facility Collateral and $1,531.2 million of debt secured by the Term Loan Collateral. The collateral securing the Senior Secured Credit Facilities may also secure additional debt to the extent permitted by our Senior Secured Credit Facilities and the indenture governing our Senior Notes. Except to the extent that they do not permit us to incur additional debt, the indenture relating to our Senior Notes and our Senior Secured Revolving Credit Facilities do not limit the amount of debt that may be secured either senior to or equally and ratably with our Senior Notes. There can be no assurances that the value of the collateral will be sufficient to repay our borrowings under our Senior Secured Credit Facilities and our other secured obligations, including our Senior Notes. In addition, other parties may hold liens (including statutory liens), whether or not permitted by the indenture governing our Senior Notes, which may entitle them to share in the value of the collateral, and thereby reduce the proceeds available to satisfy the obligations under our Senior Notes.

As of December 31, 2008, the value of the Senior Secured Revolving Credit Facility Collateral was $678.7 million and the value of the Term Loan Collateral was $1,657.9 million. The value of the collateral in the event of liquidation may be less than book value and will depend upon market and economic conditions, the availability of buyers, the quantity of assets being sold and the speed at which they are to be sold and other factors. By their nature, portions of the collateral may be illiquid and may have no readily ascertainable market value. In addition, a significant portion of the collateral includes assets that may only be usable, and thus retain value, as part of our operating business. Accordingly, any such sale of the collateral separate from the sale of certain operating businesses may not be feasible or of significant value.

Table of Contents

The collateral securing our Senior Notes may be subject to the exclusive control of the lenders under our Senior Secured Revolving Credit Facility and the value of such collateral may therefore not be available to our noteholders.

The lenders under our Senior Secured Revolving Credit Facility may release all or any portion of the collateral securing that facility and securing the existing Senior Notes in a number of circumstances without the consent of the holders of the Senior Notes. In addition, if the new Senior Secured Credit Facilities are repaid in full and not refinanced with other secured debt, and certain other conditions are satisfied, the liens securing the Senior Notes will be released.

At any time our Senior Secured Credit Facilities are outstanding, our senior lenders generally have the exclusive right to exercise rights and remedies against the collateral, including the ability to direct the commencement of enforcement proceedings. As a result, if there was an event of default under the Senior Notes, the lenders under our Senior Secured Credit Facilities could decide not to foreclose on the collateral, regardless of whether or not there is a default under the Senior Secured Credit Facilities. In such an event, the only remedy available to the holders of the Senior Notes would be to sue for payment on the Senior Notes and the subsidiary guarantees related thereto. The interests of our senior lenders and other creditors with first-priority liens on the collateral may differ from our noteholders and the holders of the Senior Notes will have no control over the collateral following an event of default on the Senior Notes.

Our creditors' ability to foreclose upon and sell the collateral is limited by applicable bankruptcy laws and the value of such collateral may therefore not be available to our noteholders.

If a bankruptcy petition were filed by or against us, the ability of the collateral agent to exercise remedies against the collateral would be automatically stayed pending bankruptcy court approval. The United States Bankruptcy Code permits a debtor to use collateral even though the debtor is in default under applicable debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" may vary according to the circumstances, but it is intended in general to protect the value of the secured creditor's interest in collateral. In view of the lack of a precise definition of the term "adequate protection" and the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments with respect to our Senior Notes could be delayed following commencement of a bankruptcy case, whether or when the collateral agent could repossess or dispose of the collateral for the benefit of the secured creditors, or whether and to what extent the holders of the Senior Notes would receive any value for the Senior Notes.

Our parent corporations are dependent upon our cash flow to satisfy their obligations, including asbestos-related and tax liabilities, and they could cause us to make distributions to them that would reduce our liquidity or result in a change of control.

G-I Holdings and BMCA Holdings Corporation, our parent corporations, are dependent upon the cash flow of our company and their other subsidiaries in order to satisfy their obligations, including asbestos-related claims and tax liabilities. In order to satisfy those obligations, those corporations might take various actions that would reduce our liquidity, including causing us to make distributions to our stockholders by means of dividends or otherwise, or causing us to make loans to them. Although our Senior Secured Revolving Credit Facility and the indenture relating to our Senior Notes restrict our ability to pay dividends or make distributions or loans to our parent corporations, there are a number of exceptions to such restrictions. Our parent corporations might also cause BMCA Holdings Corporation to sell our common stock, resulting in a change of control. Their creditors could also seek to cause our parent corporations to sell our common stock or take similar action in order to satisfy liabilities owed to them. The only significant asset of our parent corporations is the stock of our company.

Table of Contents

We could be held liable for Federal income tax liabilities of the G-I Holdings consolidated group.

On September 15, 1997, G-I Holdings Inc. received a notice from the Internal Revenue Service, (the "IRS") of a deficiency in the amount of $84.4 million (after taking into account the use of net operating losses and foreign tax credits otherwise available for use in other years) in connection with the formation in 1990 of Rhône Poulenc Surfactants and Specialties, L.P. (the "surfactants partnership"), a partnership in which GAF Fiberglass Corporation, another predecessor to G-I Holdings, held an interest. This notice could result in G-I Holdings incurring liabilities significantly in excess of its deferred tax liability. On September 21, 2001, the IRS filed a proof of claim with respect to such deficiency against G-I Holdings in the G-I Holdings' bankruptcy. G-I Holdings has filed an objection to the proof of claim, which is the subject of an adversary proceeding pending in the United States District Court for the District of New Jersey. If the IRS were to prevail for the years in which we and/or certain of our subsidiaries were not part of the G-I Holdings tax group, and G-I Holdings is unable to satisfy its tax obligations, G-I Holdings may cause us to make distributions to our stockholders by means of dividends, or otherwise, or cause us to make loans to them, and we could be liable for approximately $40.0 million in taxes plus interest, although this calculation is subject to uncertainty depending upon various factors including G-I Holdings' ability to satisfy its tax liabilities and the application of tax credits and deductions. If such proof of claim is sustained for years in which we were part of the G-I Holdings tax group, we and/or certain of our subsidiaries together with G-I Holdings and several current and former subsidiaries of G-I Holdings could be severally liable for those taxes and interest. See Item 3—"Legal Proceedings—Tax Claim Against G-I Holdings" and Item 13—"Certain Relationships and Related Transactions and Director Independence—Tax Sharing Agreement."

Federal and state statutes allow courts, under specific circumstances, to void the subsidiary guarantees and the liens securing the subsidiary guarantees.

Our creditors or the creditors of the subsidiary guarantors could challenge the subsidiary guarantees and the liens granted by our subsidiaries securing the Senior Notes as fraudulent conveyances or on other grounds. Also, the creditors of our parent corporation, which could include the previously mentioned asbestos claimants under certain circumstances, could challenge the liens granted by our subsidiaries securing the subsidiary guarantees as fraudulent conveyances, preferences or on other grounds. See Item 3—"Legal Proceedings." The delivery of the subsidiary guarantees and the grant of the liens securing the Senior Notes and the subsidiary guarantees could be found to be a fraudulent transfer and declared void if a court determines that: (1) the subsidiary guarantee was delivered or the lien was granted with the intent to hinder, delay or defraud the subsidiary guarantor's existing or future creditors, (2) the subsidiary guarantor did not receive fair consideration for the delivery of the guarantee or the incurrence of the lien or (3) the subsidiary guarantor was insolvent at the time it delivered the subsidiary guarantee or granted the lien or was rendered insolvent by such delivery or grant. The measure of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred.

If a court declares the security interests in respect of the Senior Notes to be void, any claim asserted against us for amounts payable on the Senior Notes would be unsecured. If a court declares either the subsidiary guarantees or the security interests in respect thereof to be void, or if the subsidiary guarantees must be limited or voided in accordance with their terms, any claim that noteholders make against the subsidiary guarantors for amounts payable on the subsidiary guarantees would be unsecured or subordinated to the debt and other liabilities of our subsidiary guarantors, including trade payables.

Table of Contents

Restrictive covenants in our Senior Secured Credit Facilities and the indenture governing our Senior Notes may prevent us from pursuing business activities that could otherwise improve our results of operations.

The terms of our Senior Secured Credit Facilities and the indenture governing our Senior Notes limit our ability and the ability of our subsidiaries to, among other things:

•: incur debt;
•: issue capital stock of our subsidiaries;
•: make certain payments and pay dividends;
•: create liens;
•: enter into transactions with stockholders and affiliates;
•: enter into restrictions affecting the ability of our subsidiaries to make distributions, loans or advances to us or other subsidiaries;
•: sell certain assets;
•: make capital expenditures;
•: issue guarantees; and
•: merge or consolidate with, or sell all or substantially all of our assets to, an unaffiliated third party.

Our Senior Secured Credit Facilities also require us to maintain certain financial ratios. Complying with these restrictive covenants and the financial ratios, as well as those that may be contained in any future debt agreements, may impair our ability to finance our future operations or capital needs or to take advantage of other favorable business opportunities. They may also limit our ability to pay interest or principal on our Senior Notes. Our ability to comply with these restrictive covenants and the financial ratios will depend on our future performance, which may be affected by events beyond our control. Our failure to comply with the restrictive covenants or financial ratios when they apply will result in a default under the particular debt instrument, which could permit acceleration of the debt under the instrument and the acceleration of debt under our other debt instruments. If our debt is accelerated, we may not have sufficient funds available to make the required payments under our debt.

Risks Related to our Business

Changes in economic conditions may adversely affect our results of operations.

Our business can be affected by certain economic conditions. While our net sales are predominantly derived from re-roofing, if the current housing downturn continues for a prolonged period of time it would have an impact on our results of operations. A slowdown in the demand for asphalt roofing products arising from the current general economic conditions would result in a decreased demand for our products, adverse pricing and a reduction in our plant capacity utilization.

Increased raw material, energy costs and transportation costs or shortages of raw materials could reduce our profitability.

Our business relies on the availability of reasonably priced raw materials that are used in the production of our products. The availability and prices of these materials may be influenced by a number of different factors, many of which are not within our control. Shortages of and price increases

Table of Contents

for certain of these materials, including asphalt, some of which are correlated to increases in the price of crude oil, have occurred from time to time and may occur again in the future. Any significant price increases for our raw materials or increases in energy costs or transportation costs would reduce our margins to the extent we are unable to pass such price increases on to our customers. Any significant changes in our suppliers of raw materials could involve delays and costs that could significantly harm our business, financial condition and results of operations. See Item 1 "Business—Raw Materials."

We face significant competition in the markets we serve.

The roofing products industry is highly competitive in most product categories and geographic regions. Some of our competitors are companies or divisions or operating units of companies that have greater financial and other resources than we do. Competition is based largely upon products and service quality, distribution capability and price. We compete for retail and wholesale business with both large national manufacturers and smaller regional producers. In certain circumstances, due primarily to factors such as freight rates and customer preference for local brands, manufacturers with better access to certain geographic markets may have a competitive advantage in such markets. In addition, should the roofing products industry experience a prolonged period of excess capacity, it could result in downward pricing pressure and intensified competition. Given these factors, we may not be able to continue to compete successfully against existing or new competitors. Any such failure could dramatically reduce our cash flows and adversely affect our results of operations and financial condition. See Item 1—"Business—Competition."

The loss of one or two large customers could weaken our business and results of operations.

During 2008, sales to The Home Depot and American Builders & Contractors Supply Company each represented more than 10% of our overall net sales. If we lose either or both of these customers or other significant customers, or experience extended delays or cancellations of significant volume or a significant decline in the level of purchases from either or both of them or other significant customers, our net sales could decline and our business, financial condition and results of operations could be significantly harmed.

Variations in extreme weather conditions can increase or decrease demand for our products and could have a significant affect on our results of operations.

Our sales are generally seasonal in nature with our peak season in demand coming between June and November. Variations in extreme weather conditions, such as snow, hail, ice storms, hurricanes and tornadoes, or the lack thereof, may increase or decrease the demand for our products and may significantly impact our business, financial condition and results of operations.

Higher interest rates could affect our borrowing costs.

We anticipate relying on our cash and cash equivalents on hand and our Senior Secured Revolving Credit Facility to support our overall cash flow requirements. Higher interest rates would affect our Senior Secured Credit Facilities and other variable interest rate debt instruments and adversely impact our borrowing costs.

Increases in labor union organizing activity and work stoppages at our facilities or the facilities of our suppliers could weaken our financial performance.

Our financial performance is affected by the availability of qualified manufacturing personnel. At December 31, 2008, approximately 21% of our total employees were represented by fourteen labor unions. Our business, financial condition and results of operations could suffer if a strike or other type

Table of Contents

of conflict with personnel arises or if we become the subject of union organizing activity. Furthermore, some of our direct and indirect suppliers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these suppliers could result in slowdowns or closures of facilities where components of our products are manufactured. Any interruption in the production or delivery of our products could reduce sales of our products and increase our costs.

We are dependent on certain key personnel, the loss of whom could weaken our financial performance and prospects.

Our continued success depends to a large extent upon the continued services of our senior management and certain key employees. Our senior executive management team has significant company and industry experience. The senior operating team has an aggregate of approximately 115 years of work experience with BMCA and/or Elk and has an extensive knowledge of our company, customers, competitors and the industry. This team has been instrumental in developing a successful business strategy, while successfully integrating two distinct companies into one and achieving the recent improvements in our operating and financial performance. Members of our senior management may not continue in their current positions. The loss of the services of any of these individuals could result in reduced revenues and could weaken our financial performance and results of operations.

Environmental laws and regulations could subject us to significant future liabilities.

Our manufacturing facilities are subject to extensive and changing Federal, state and local environmental laws and regulations. These laws and regulations pertain to air and water emissions or discharges into the environment, the generation, storage, treatment, transportation and disposal of solid and hazardous waste, and the remediation of any releases of hazardous substances and materials to the environment. We, together with other companies, are a party to a variety of proceedings and lawsuits involving environmental matters under the U.S. Comprehensive Environmental Response Compensation and Liability Act and similar state laws. In those proceedings and lawsuits, recovery is sought for the cost of cleanup of contaminated sites or remedial obligations are imposed. A number of those are in the early stages or have been dormant for protracted periods. We believe that our manufacturing facilities comply in all material respects with applicable laws and regulations. The discovery of presently unknown environmental conditions, changes in scope or enforcement of environmental laws and regulations or their interpretation, or other unanticipated events may give rise to expenditures or liabilities that may weaken our business, financial condition or results of operations. See Item 3—"Legal Proceedings—Environmental Litigation."

Our controlling stockholder has the ability to elect our entire Board of Directors and can control the outcome of any matter submitted to our stockholders.

We are an indirect subsidiary of G-I Holdings, which is 99% beneficially owned (as defined in Rule 13d-3 of the Securities Exchange Act of 1934) by Samuel J. Heyman. Mr. Heyman is a director of G-I Holdings and was our Acting Chief Executive Officer from October 2005 through April 2006. Accordingly, Mr. Heyman has the ability to elect our entire Board of Directors and to determine the outcome of any other matter submitted to our stockholders for approval, including, subject to the terms of the indenture relating to the Senior Notes, mergers, consolidations and the sale of all, or substantially all, of our assets. Mr. Heyman may exercise his control over us according to interests that are different from the interests of our noteholders. See Item 12—"Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters."

Item 1B. Unresolved Staff Comments.

Not applicable.

Table of Contents

Item 2. Properties

Our corporate headquarters is located at a 100-acre campus-like office and research park owned by a subsidiary of International Specialty Products Inc., at 1361 Alps Road, Wayne, New Jersey 07470. We occupy our headquarters pursuant to our management agreement with ISP. See Item 13—"Certain Relationships and Related Transactions and Director Independence—Management Agreement."

We own or lease the principal real properties described below. Unless otherwise indicated, the properties are owned in fee. Included in the principal facilities listed below are regional sales offices and warehouses that we maintain, substantially all of which are in leased premises under relatively short-term leases.

Location		Facility

Alabama
	Mobile	Plant
	Tuscaloosa	Plant, Warehouses*
California
	Bakersfield	Warehouse*
	Fontana	Plant, Regional Sales Office, Warehouse*
	Fresno	Plant, Warehouse, Warehouses*
	Shafter	Plant, Plant
	Stockton	Plant, Warehouse*
Florida
	Tampa	Plant, Regional Sales Office*
Georgia
	Cumming	Plant
	Savannah	Plant
Illinois
	Woodridge	Regional Sales Office*
Indiana
	Evansville	Warehouse*
	Michigan City	Plant, Administrative Office, Warehouse*
	Mount Vernon	Plant, Plant
Kansas
	Lenexa	Plant*
Maryland
	Baltimore	Plant, Warehouse*, Warehouse
Massachusetts
	Millis	Warehouse*
	Walpole	Plant*
Minnesota
	Lakeville	Warehouse*
	Minneapolis	Plant
New Jersey
	Bridgewater	Warehouse*
	North Branch	Plant
	Swedesboro	Regional Sales Office*
	Wayne	Headquarters, Corporate Administrative Offices, Research Center*
North Carolina
	Burgaw	Plant

Table of Contents

Location		Facility

Ohio
	Cleveland	Plant
	Wadsworth	Plant*
Pennsylvania
	Myerstown	Plant, Regional Sales Office
	Wind Gap	Plant
South Carolina
	Chester	Plant, Research Center
Tennessee
	Nashville	Plant
Texas
	Dallas	Administrative Offices, Regional Sales Office, Plant, Warehouse*
	Ennis	Plant, Research Center
	Gainesville	Plant
	Port Arthur	Plant, Technical Service Center
	San Antonio	Warehouse*
Wisconsin
	Edgerton	Warehouse*

*: Leased Property

In addition to the foregoing list, we have manufacturing facilities in Millis, Massachusetts; Albuquerque, New Mexico; Goldsboro, North Carolina; Erie, Pennsylvania; Quakertown, Pennsylvania and Port Arthur, Texas that are currently closed or have limited operations. During 2008, we restarted our Mobile, Alabama manufacturing facility and sold two manufacturing facilities in Hollister, California and Stockton, California, property in Fresno, California and our Waxahachie, Texas distribution center. In February 2009, we announced the temporary shutdown of our Shafter, California glass mat manufacturing facility and our Nashville, Tennessee glass fiber manufacturing facility. We believe that our plants and facilities, which are of varying ages and are of different construction types, have been satisfactorily maintained, are in good condition, are suitable for their respective operations and generally provide sufficient capacity to meet production requirements. Due to the seasonality of our business, our production facilities generally run at full capacity during the months necessary to meet our peak seasonal operating demands. Each plant has adequate transportation facilities for both raw materials and finished products. In 2008, we made capital expenditures of approximately $65.8 million relating to property, plant and equipment.

Item 3. Legal Proceedings.

Asbestos Bodily Injury Claims. In connection with our formation, we contractually assumed and agreed to pay the first $204.4 million of liabilities of our indirect parent, G-I Holdings, for asbestos-related bodily injury claims relating to the inhalation of asbestos fiber contained in products sold by G-I Holdings or its predecessors ("Asbestos Claims"). As of March 30, 1997, we had paid all of our assumed liabilities for Asbestos Claims. G-I Holdings has agreed to indemnify us against any other existing or future Asbestos Claims if asserted against us. In January 2001, G-I Holdings filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code due to Asbestos Claims. Most Asbestos Claims do not specify the amount of damages sought, and the value of the Asbestos Claims asserted against G-I Holdings is a contested issue in that bankruptcy, which remains pending.

Claimants in the G-I Holdings' bankruptcy, including judgment creditors, might seek to satisfy their claims by asking the Bankruptcy Court to require the sale of G-I Holdings' assets, including its

Table of Contents

holdings of BMCA Holdings Corporation's common stock and its indirect holdings of our common stock. Such action could result in a change of control of our company. In addition, those creditors may attempt to assert Asbestos Claims against our company. (Approximately 1,900 Asbestos Claims were filed against us prior to February 2, 2001.) We believe that we will not sustain any liability in connection with these or any other Asbestos Claims. On February 2, 2001, the United States Bankruptcy Court for the District of New Jersey issued a temporary restraining order enjoining any existing or future claimant from bringing or prosecuting an Asbestos Claim against us. By oral opinion on June 22, 2001, and written order entered February 22, 2002, the Bankruptcy Court converted the temporary restraints into a preliminary injunction prohibiting the bringing or prosecution of any such Asbestos Claims against us.

On February 7, 2001, G-I Holdings filed an action in the United States Bankruptcy Court for the District of New Jersey seeking a declaratory judgment that BMCA has no successor liability for Asbestos Claims against G-I Holdings and that it is not the alter ego of G-I Holdings (the "BMCA Action"). One of the parties to this matter, the Official Committee of Asbestos Claimants (the "creditors' committee"), subsequently filed a counterclaim against us seeking a declaration that BMCA has successor liability for Asbestos Claims against G-I Holdings and that it is the alter ego of G-I Holdings. On May 13, 2003, the United States District Court for the District of New Jersey overseeing the G-I Holdings' Bankruptcy Court withdrew the reference of the BMCA Action from the Bankruptcy Court. By order dated May 30, 2008, the District Court dismissed the BMCA Action without ruling on the merits of BMCA's position that it has no successor liability for Asbestos Claims. The District Court ruled that a federal court declaratory judgment action was not the proper vehicle for resolving this issue. The District Court's ruling did not affect the preliminary injunction enjoining the prosecution of Asbestos Claims against BMCA, and we believe that we do not have liability for Asbestos Claims. Nevertheless, it is not possible to predict the outcome of any subsequent litigation regarding the continuation of the preliminary injunction and/or prosecution of Asbestos Claims against us.

Actions Relating to G-I Holdings' Bankruptcy. On or about February 8, 2001, the creditors' committee filed a complaint in the United States Bankruptcy Court, District of New Jersey against G-I Holdings and us. The complaint requests substantive consolidation of BMCA with G-I Holdings or an order directing G-I Holdings to cause BMCA to file for bankruptcy protection. The plaintiffs also filed for interim relief absent the granting of their requested relief described above. On March 21, 2001, the Bankruptcy Court denied plaintiffs' application for interim relief. In November 2002, the creditors' committee, joined in by the legal representative of present and future holders of asbestos-related claims, filed a motion for appointment of a trustee in the G-I Holdings' bankruptcy. In December 2002, the Bankruptcy Court denied the motion. The creditors' committee appealed the ruling to the United States District Court, which denied the appeal on June 27, 2003. The creditors' committee appealed the denial to the Third Circuit Court of Appeals, which denied the appeal on September 24, 2004. The creditors' committee filed a petition with the Third Circuit Court of Appeals for a rehearing of its denial of the creditors' committee's appeal, which was denied by the Court of Appeals on October 26, 2004.

On July 7, 2004, the Bankruptcy Court entered an order authorizing the creditors' committee to commence an adversary proceeding against us and others challenging, as a fraudulent conveyance, certain transactions entered into in connection with our formation in 1994, in which G-I Holdings caused to be transferred to our company all of its roofing business and assets and in which we assumed certain liabilities relating to those assets, including a specified amount of liabilities for Asbestos Claims (the "1994 transaction"). The Bankruptcy Court also permitted the creditors' committee to pursue a claim against holders of our bank and bond debt outstanding in 2000, seeking recovery from them, based on the creditors' committee's theory that the 1994 transaction was a fraudulent conveyance. On July 20, 2004, the creditors' committee appealed certain aspects of the Bankruptcy Court's order (and a June 8, 2004 decision upon which the order was based). G-I Holdings, the holders of our bank and

Table of Contents

bond debt and BMCA cross-appealed. The District Court entered an order on June 21, 2006 affirming in part and vacating in part the Bankruptcy Court's July 7, 2004 order. Among other things, the District Court vacated that aspect of the Bankruptcy Court's order authorizing the creditors' committee to pursue avoidance claims against us and the holders of our bank and bond debt as of 2000. This issue has been remanded to the Bankruptcy Court for further proceedings consistent with the District Court's opinion. By order dated August 22, 2008, the Bankruptcy Court stayed this authorization proceeding and other adversary proceedings effective upon the filing of a Joint Plan of Reorganization by G-I Holdings, the creditors' committee and the legal representative of present and future holders of asbestos-related claims. We believe the creditors' committee's avoidance claims are without merit and, in the event the stay is terminated, the Bankruptcy Court should not permit the creditors' committee to pursue such claims against us and the holders of our bank and bond debt as of 2000.

We have been advised by G-I Holdings that on August 12, 2008, G-I Holdings reached an agreement with the creditors' committee and the legal representative of present and future holders of asbestos-related claims to jointly file a plan of reorganization with the Bankruptcy Court that will provide for settlement of Asbestos Claims and all related litigation. The agreement is subject to a number of contingencies, but if the contingencies are met and the reorganization plan is confirmed, all of the actions described above will be resolved. If the bankruptcy is not resolved, BMCA and G-I Holdings intend to vigorously defend all litigations related thereto. A Joint Plan of Reorganization of G-I Holdings was filed with the Bankruptcy Court on August 21, 2008, and a First Amended Joint Plan of Reorganization of G-I Holdings was filed with the Bankruptcy Court on October 30, 2008. G-I Holdings filed a Second Amended Joint Plan of Reorganization of G-I Holdings with the Bankruptcy Court on December 3, 2008.

If the reorganization plan is not confirmed and we are not successful in defending against one or more of these claims, we may be forced to file for bankruptcy protection and/or contribute all or a substantial portion of our assets to satisfy the claims of G-I Holdings' creditors. Either of these events, or the substantive consolidation of G-I Holdings and the Company, would weaken our operations and cause us to divert a material amount of our cash flow to satisfy the asbestos claims of G-I Holdings and may render us unable to pay interest or principal on our Senior Secured Credit Facilities and Senior Notes.

Asbestos-in-Building Claims. G-I Holdings has also been named as a co-defendant in asbestos-in-buildings cases for economic and property damage or other injuries based upon an alleged present or future need to remove asbestos-containing materials from public and private buildings. We refer to the asbestos-in-building claims as the "Building Claims." Most Building Claims do not seek to recover an amount of specific damages. Since these actions were first initiated approximately 20 years ago, G-I Holdings has not only successfully disposed of approximately 145 of these cases, but was a co-defendant in only three remaining lawsuits at the time of the filing of its Chapter 11 petition. No new Building Claims were filed in 2008. We have not assumed any liabilities with respect to Building Claims, and believe we will not sustain any liability in connection with such claims.

Insurance Matters. In all the Building Claims, which are presently stayed as to G-I Holdings as a result of the G-I Holdings' bankruptcy filing, G-I Holdings' defense costs have been paid by Insurance Company of North America ("INA"). While G-I Holdings expects that INA will continue to be obligated to defend and indemnify G-I Holdings, INA has reserved its rights to later refuse to defend and indemnify G-I Holdings and to seek reimbursement for some or all of the fees paid to defend and resolve the Building Claims.

Environmental Litigation

We, together with other companies, are a party to a variety of proceedings and lawsuits involving environmental matters under the U.S. Comprehensive Environmental Response Compensation and

Table of Contents

Liability Act, and similar state laws, in which recovery is sought for the cost of cleanup of contaminated sites or remedial obligations are imposed, a number of which are in the early stages or have been dormant for protracted periods. Most of these environmental claims do not seek to recover an amount of specific damages.

In connection with our formation, we contractually assumed all environmental liabilities of G-I Holdings relating to existing plant sites and our business as then conducted. The estimates referred to below reflect those environmental liabilities assumed by us and our other environmental liabilities. The environmental liabilities of G-I Holdings that we did not assume relate primarily to closed manufacturing facilities. We estimate our liability as of December 31, 2008, in respect of assumed and other environmental liabilities is $2.6 million, and expect insurance recoveries, as discussed below, of $1.7 million. Insurance recoveries reflected on these balance sheets relate to both past expenses and estimated future liabilities. We refer to these recoveries below as "estimated recoveries."

At most sites, we anticipate that liability will be apportioned among the companies found to be responsible for the presence of hazardous substances at the site. Although it is difficult to predict the ultimate resolution of these claims, based on our evaluation of the financial responsibility of the parties involved and their insurers, relevant legal issues and cost sharing arrangements now in place, we estimate that our liability in respect of all environmental claims, including certain environmental compliance expenses, will be as discussed above. While we cannot predict whether adverse decisions or events can occur in the future, we believe that the ultimate disposition of such matters will not have a material adverse effect on our liquidity, results of operations, cash flows or financial position. However, adverse decisions or events, particularly as to increases in remedial costs, discovery of new contamination, assertion of natural resource damages, and the liability and the financial responsibility of our insurers and of the other parties involved at each site and their insurers, could cause us to increase our estimate of our liability in respect of those matters. It is not currently possible to estimate the amount or range of any additional liability. For information relating to other environmental compliance expenses, see Item 1, "Business—Environmental Compliance."

After considering the relevant legal issues and other pertinent factors, we believe that it is probable that we will receive the estimated recoveries, although our insurers have not affirmed a legal obligation under the policies to provide indemnity for those claims.

In June 1997, G-I Holdings commenced litigation on behalf of itself and its predecessors, successors, subsidiaries and related corporate entities in the Superior Court of New Jersey, Somerset County, seeking amounts substantially in excess of the estimated recoveries. This action was removed to the United States Bankruptcy Court for the District of New Jersey in February 2001 in conjunction with the G-I Holdings' bankruptcy case. In November 2002, the parties agreed to have the action remanded to the Superior Court of New Jersey, Somerset County where it is pending. While we believe that our claims are meritorious, there can be no assurance that we will prevail in our efforts to obtain amounts equal to, or in excess of, the estimated recoveries.

We believe that we will not sustain any liability for environmental liabilities of G-I Holdings other than those that we have contractually assumed or that relate to the operations of our business. While we cannot predict whether any claims for non-assumed environmental liabilities will be asserted against us or our assets, or the outcome of any litigation relative to those claims, we believe that we have meritorious defenses to those claims.

Tax Claim Against G-I Holdings

Table of Contents

Holdings held an interest. On September 21, 2001, the IRS filed a proof of claim with respect to such deficiency against G-I Holdings in the G-I Holdings' bankruptcy. If such proof of claim is sustained for years in which we were part of the G-I Holdings tax group, we and/or certain of our subsidiaries together with G-I Holdings and several current and former subsidiaries of G-I Holdings could be severally liable for those taxes and interest. G-I Holdings has filed an objection to the proof of claim, which is the subject of an adversary proceeding pending in the United States District Court for the District of New Jersey. By opinion and order dated September 8, 2006, the District Court ruled on the parties' respective motions for Partial Summary Judgment, granting the government summary judgment on the issue of "adequate disclosure" for statute of limitation purposes and denying G-I Holdings summary judgment on its other statute of limitations defense (finding material issues of fact that must be tried). If the IRS were to prevail for the years in which we and/or certain of our subsidiaries were not part of the G-I Holdings tax group, we nevertheless could be liable for approximately $40.0 million in taxes plus interest, although this calculation is subject to uncertainty depending upon various factors including G-I Holdings' ability to satisfy its tax liabilities and the application of tax credits and deductions. In an opinion dated June 8, 2007, the District Court decided that G-I Holdings cannot avail itself of the "binding contract" transitional relief with respect to the 1999 distribution of U.S. Treasury Bonds to G-I Holdings. We believe that we will not be required to pay any incremental income tax to the Federal government with respect to this matter and that the ultimate disposition will not have a material adverse effect on our business, financial position or results of operations.

Other Litigation

We are, from time to time, a party to litigation that arises in the normal course of our business operations. Although litigation is inherently unpredictable, we are not presently a party to any such litigation that we believe could reasonably be expected to have a material adverse effect on our business or financial position.

* * *

The cases described above under "Legal Proceedings—Asbestos-in-Building Claims" and "Environmental Litigation" generally do not seek only specific amounts of damages, but rather seek all damages from whatever claims are asserted. While litigation is inherently unpredictable, we believe that the ultimate disposition of the cases, however, will not, individually or in the aggregate, have a material adverse effect on our liquidity, financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders.

Not applicable.

Table of Contents

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

All of our outstanding shares of Class A common stock are owned by BMCA Holdings Corporation, or BHC. Accordingly, there is no public trading market for our common stock.

In 2008, 2007 and 2006 we declared and paid cash dividends of $7.5, $0 and $15.0 million, respectively, to our parent corporation. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 18 to our consolidated financial statements included in this Annual Report on Form 10-K for information regarding restrictions on the payment of dividends. Any decision to pay dividends, and the timing and amount thereof, is dependent upon, among other things, our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our Board of Directors.

Item 6. Selected Financial Data.

See page F-27.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

See page F-2.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Financial Condition—Market-Sensitive Instruments and Risk Management" on page F-25.

Item 8. Financial Statements and Supplementary Data.

See Index on page F-1 and Financial Statements and Supplementary Data on pages F-2 to F-83.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A(T). Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports filed, furnished or submitted under the Exchange Act. Our Chief Executive Officer and Chief Financial Officer also concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Table of Contents

(b) Management's Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the Company's principal executive and financial officers and affected by the Company's Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation and the prevention and detection of misstatements. Projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of internal control over financial reporting using the criteria established in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as of the end of the period covered by this report.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

Changes in Internal Control over Financial Reporting

There were no significant changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in management's evaluation during the fourth quarter of fiscal year 2008 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information

None.

Table of Contents

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers of the Registrant

The following are the name, age and respective positions of our directors and executive officers as of March 30, 2009.

Name		Position

Robert B. Tafaro	58	Chief Executive Officer, President and Director
Richard A. Nowak	67	Executive Vice President, Chief Operating Officer and Director
John F. Rebele	54	Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Director
Matti Kiik	66	Senior Vice President, Chief Technology Officer and Director
Jan E. Jerger-Stevens	46	Senior Vice President, Human Resources and Director
Daniel J. Goldstein	48	Senior Vice President, General Counsel and Director

Set forth below is a description of the backgrounds, including business experience over the past five years, for each of our directors and executive officers. There are no family relationships that exist between any of our directors or executive officers. Under our bylaws, our officers are elected by the Board of Directors and hold office until their respective successors are duly elected and qualified.

Robert B. Tafaro—Mr. Tafaro has been President and Chief Executive Officer of BMCA and some of our subsidiaries since April 2006. He previously held the position of Chief Operating Officer of BMCA and some of our subsidiaries from October 2005 to April 2006 and he was Executive Vice President, Roofing Systems of BMCA and some of our subsidiaries from February 2005 to April 2006. He was also Senior Vice President and General Manager—Roofing Systems Sales of BMCA and some of our subsidiaries from October 2003 to February 2005. Mr. Tafaro has also been director of BMCA and some of our subsidiaries for more than five years.

Richard A. Nowak—Upon the acquisition of Elk on February 22, 2007, Mr. Nowak was appointed Executive Vice President and Chief Operating Officer of BMCA and some of our subsidiaries. In January 2008, Mr. Nowak was appointed to the Board of Directors of BMCA. Prior to the acquisition of Elk, Mr. Nowak was the President, Chief Operating Officer and Director of Elk from March 31, 2002 through February 22, 2007.

John F. Rebele—Mr. Rebele has been Chief Administrative Officer since April 2005 and Senior Vice President and Chief Financial Officer of BMCA and some of our subsidiaries for more than five years. Mr. Rebele has been a director of BMCA and of our subsidiaries for more than five years.

Matti Kiik—Upon the acquisition of Elk on February 22, 2007, Mr. Kiik was appointed Senior Vice President and Chief Technology Officer of BMCA and some of our subsidiaries. In January 2008, Mr. Kiik was appointed to the Board of Directors of BMCA. Prior to the acquisition of Elk, Mr. Kiik was the Senior Vice President and Chief Technology Officer of Elk from December 2006 through February 22, 2007. Prior to December 2006, Mr. Kiik was the Senior Vice President, Research and Development of Elk for more than five years.

Table of Contents

Jan E. Jerger-Stevens—Upon the acquisition of Elk on February 22, 2007, Ms. Jerger-Stevens was appointed Vice President—Human Resources of BMCA and some of our subsidiaries. In January 2008, Ms. Jerger-Stevens was appointed Senior Vice President—Human Resources of BMCA and some of our subsidiaries and was appointed to the Board of Directors of BMCA. Prior to the acquisition of Elk, Ms. Jerger-Stevens was the Vice President—Human Resources of Elk from April 2006 through February 22, 2007. Prior to April 2006, Ms. Jerger-Stevens was employed by Jacuzzi Brands, Inc. as Director of Human Resources since 2004.

Daniel J. Goldstein—Mr. Goldstein became Senior Vice President, General Counsel of BMCA and some of our subsidiaries effective September 2, 2008 and was elected to the Board of Directors of BMCA and some of our subsidiaries on March 27, 2009. Prior to his employment at BMCA, Mr. Goldstein was employed at Pitney Bowes Inc. as Vice President, Deputy General Counsel from 2005 to 2008 and as Associate General Counsel from 1999 to 2005.

Audit Committee Financial Expert

We are not issuers of securities as that term is defined in the Securities Exchange Act of 1934 and do not have any securities listed on a national exchange or association. Based on the foregoing, our Board of Directors does not, nor is it required to have an audit committee and, therefore, is not required to determine anyone to be an audit committee financial expert. Our Board of Directors performs customary audit committee functions for us.

Code of Ethics

All of our employees, including our principal executive officer, principal financial officer, principal accounting officer and the persons performing similar functions, are required to abide by our code of ethics and business conduct policies to ensure that our business is conducted in a consistently legal and ethical manner. We intend to disclose any changes in or waivers from our code of ethics by filing a current report on Form 8-K with the Securities and Exchange Commission. We will provide to any person, without charge, upon request, a copy of our code of ethics by writing to: the Corporate Secretary, Building Materials Corporation of America, 1361 Alps Road, Wayne, New Jersey 07470.

Item 11. Executive Compensation.

Compensation Discussion and Analysis

Compensation Philosophy

The primary goal of the Company with respect to executive compensation is to attract, retain and motivate the most qualified and dedicated executives, who possess the high-quality skills and talent required for the success of the business, to tie annual and long-term incentive compensation to achievement of certain performance objectives for the individual executives and for the Company, and to encourage executive performance that contributes to the long-term growth of the Company. For this reason, the Company has formed an internal compensation committee comprised of the Chief Executive Officer, the Chief Financial Officer and the Senior Vice President of Human Resources. Since we are not a publicly-held company, we are not required to form a compensation committee comprised of independent directors, as required by applicable laws and regulations, including the Sarbanes-Oxley Act, and applicable listing requirements.

Table of Contents

To achieve the Company's executive compensation objectives, the compensation committee implements and maintains compensation plans and policies that ensure that executive compensation is fair, reasonable and competitive, and that reward executives' contributions to the overall short and long-term growth of the Company. We use short-term compensation (base salaries and annual cash bonuses) and long-term incentive compensation in the form of incentive units to achieve our goal of driving long-term growth in net book value per share as defined in the 2001 Long-Term Incentive Plan (see below). The Company's compensation policy links each executive's earnings opportunity with the Company's short and long-term performance. To maintain this link, the committee bases performance on the achievement of pre-determined financial targets and operational goals measured by metrics such as operating income and growth, as well as each executive's individual contributions.

The Company maintains two compensation plans—the 2001 Long Term Incentive Plan and the Executive Incentive Compensation Plan. The compensation committee meets at least annually with respect to distributions and grants under each of these plans. The compensation committee also meets annually to review and approve a compensation budget, including any changes in executive salaries.

Setting Executive Compensation

In setting compensation, the compensation committee evaluates individual executive performance with the goal of setting compensation at levels they believe are comparable with executives in other companies of similar size, with similar revenues and in similar industries, while taking into account our relative performance and our own strategic goals. The compensation committee conducts an annual benchmark review of the aggregate level of our executive compensation as well as the mix of elements used to compensate our executive officers, including base salary, bonus, total cash compensation and long-term compensation. The compensation committee reviews several executive compensation surveys that compare the amounts paid to executives in peer companies. The compensation committee reviews companies of comparable size for purposes of benchmarking executive compensation. The various survey results are then compared, and the compensation committee benchmarks our executive compensation against the median updated compensation paid by the aforementioned groups of companies. Once the committee has completed its benchmark review, it outlines its findings regarding current market pricing for executive salaries and these findings are used as a basis for recommending salary adjustments, bonuses and incentive plan grants. The Company used Buck Consultants in 2008 to assist with its benchmark process with respect to the compensation of our Chief Executive Officer and used a variety of other tools and sources for the benchmarking of other executive compensation. The committee does not have a pre-established policy or target for allocating among salary, cash bonuses and long-term incentive compensation. The proper compensation mix is determined based on the performance of the Company and of the individual executive, as compared to goals that were established at the beginning of the year for which incentive compensation is to be paid.

Elements of Compensation

For the fiscal year ended December 31, 2008, the Company's compensation components for the named executive officers included the following elements:

•: Base salary;
•: Annual bonus (EIC);
•: Long-term incentive compensation;
•: Post-termination compensation;
•: Other bonuses; and
•: Perquisites and other personal benefits.

Table of Contents

Base Salary

The Company pays base salaries to its named executive officers and all other employees to compensate them for their services during the fiscal year. Base salaries for our executives are established based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies for similar positions. Generally, we believe that executive base salaries should be targeted near the median of the range of salaries for executives in similar positions with similar responsibilities at companies of similar size, with similar revenues and in similar industries, in line with our compensation philosophy. Base salaries are reviewed annually, and may be adjusted from time to time to reflect changes in market levels after taking into account the individual responsibilities, performance and experience of each executive as compared with executives in similar positions with similar responsibilities in the peer group.

Annual Bonus (EIC)

The compensation committee may award discretionary annual bonuses to the named executive officers and to other employees, which amounts are usually paid under the Executive Incentive Compensation Plan, with limited exceptions. The annual incentive bonuses are intended to compensate officers for achieving financial and operational goals and for achieving individual annual performance objectives. The Executive Incentive Compensation Plan is an annual cash incentive plan that is overseen by the compensation committee. When the compensation committee decides to award a bonus, they determine the pool of eligible employees and the amount that those employees will be eligible to receive under the plan. The plan includes various incentive levels based on the participant's accountability and impact on Company operations, and target award opportunities are established as a percentage of base salary, ranging from 40% of base salary to 50% of base salary for the Company's named executive officers. In addition, discretionary bonus amounts may be paid to named executives based on individual performance under the Executive Incentive Compensation Plan.

Each year, the compensation committee sets minimum, target and maximum levels for corporate and individual performance goals, and payment of awards is based upon the achievement of those goals for that year. Upon completion of the fiscal year, the compensation committee assesses the performance of the Company and the individual with respect to those goals, and an overall percentage amount for the corporate financial goals is calculated. The annual bonus is paid in cash and is ordinarily paid in a single installment in February or March following the completion of a given fiscal year.

For the fiscal years ended December 31, 2008, 2007 and 2006, each of the named executive officers in our summary compensation table received the following payments in February 2009, March 2008 and February 2007, respectively. The 2008, 2006 and a portion of the 2007 Bonus Awards for Mr. Tafaro were made under the executive compensation plan, while such bonuses for Messrs. Rebele, Harrison, Nowak, Kiik and Ms. Jerger-Stevens were made under the Executive Incentive Compensation Plan. The remainder of the 2007 Bonus Awards reflect a one-time integration bonus paid to each of the executives in recognition of the success of the integration of BMCA and Elk.

Executive Name	2008 Bonus Award		2007 Bonus Award		2006 Bonus Award

Robert B. Tafaro	$	1,000,000	$	500,000	$	435,000
Richard A. Nowak	$	360,000	$	250,000	$	—
John F. Rebele	$	300,000	$	250,000	$	230,000
David A. Harrison	$	—	$	180,000	$	135,000
Matti Kiik	$	175,000	$	150,000	$	—

Table of Contents

Awards were made to the above-named executive officers in February 2009, March 2008 and February 2007 for performance in 2008, 2007 and 2006, respectively and are reflected in the Bonus column of the Summary Compensation Table on page 32.

Long-Term Incentive Compensation

The Company employs two forms of equity incentives: restricted stock and incentive units. These incentives foster the long-term perspective necessary for the continued success in the Company's business.

Restricted Stock

On January 1, 1996, the Company established the BMCA Preferred Stock Option Plan (the "1996 Plan") to issue options to certain employees to purchase shares of redeemable convertible preferred stock ("Preferred Stock") of the Company, exercisable at a price of $100 per share. Each share of Preferred Stock was convertible, at the holder's option, into shares of common stock of the Company at a formula price based on the Company's Book Value as of the date of grant. The options vested ratably over five years and expired after nine years. Dividends would accrue on the Preferred Stock from the date of issuance at the rate of 6% per annum. The Preferred Stock was redeemable, at the Company's option, for a redemption price equal to $100 per share plus accrued and unpaid dividends. The Preferred Stock, and common stock issuable upon conversion of Preferred Stock into common stock, was subject to repurchase by the Company under certain circumstances, at a price equal to current Book Value (as defined in the option agreement). The exercise price of the options to purchase Preferred Stock was equal to the estimated fair value per share of the Preferred Stock at the date of grant. As of December 31, 2008, options to purchase 400,000 shares of Preferred Stock remained available under the 1996 Plan. No shares or options were granted in 2008, 2007 and 2006 and there are no outstanding shares or options as of March 30, 2009.

Incentive Units

Effective December 31, 2000, the Company adopted the 2001 Long-Term Incentive Plan ("2001 LTIP"), which allowed employees participating in the 1996 Plan to also participate in the 2001 Long-Term Incentive Plan. During 2001, all employees exchanged their Preferred Stock options for incentive plan units effective as of December 31, 2000. The 2001 Long-Term Incentive Plan provides long-term compensation to employees and key management personnel based on the Company's book value. Our 2001 Long-Term Incentive Plan authorizes the compensation committee to grant Incentive Units ("Incentive Units") to eligible employees. The number of Incentive Units granted is determined by the compensation committee in its discretion, and the determination of that number is based on the performance of the individual, the performance of the Company, and the individual's contribution to the long-term growth of the Company. Generally, Incentive Units vest cumulatively, in 20% increments over five years, except that Incentive Units granted in exchange for Preferred Stock options retain the vested status and vesting schedule of the options exchanged. The compensation committee may, in its sole discretion, however, grant Incentive Units with any vesting schedule, other than that normally provided in the 2001 Long-Term Incentive Plan. Vesting will end upon the termination of an employee's employment with BMCA or any subsidiary for any reason. If, after a change of control of BMCA (as defined in the 2001 LTIP), an employee's employment is terminated within twelve months of the change of control for any reason other than Good Cause (as defined in the 2001 LTIP), as a result of death or permanent disability, or by the employee for Good Reason (as defined in the 2001 LTIP), all Incentive Units will become fully and immediately vested. Vested Incentive Units are exercised on the earlier of: (i) the sixth anniversary of the date the Incentive Unit was granted; (ii) a specified date elected by an employee; and (iii) either one year after the employee's termination of employment with

Table of Contents

the Company due to retirement, or the date of the employee's termination of employment for reasons other than due to retirement.

At the end of each fiscal quarter, the value of Incentive Units is calculated based on our book value, as defined in the plan, at that date less book value as of the date of grant divided by 1,000,010. Upon exercise of an Incentive Unit, a participant receives in cash the excess, if any, of the value of such Incentive Unit as of the end of the fiscal quarter immediately preceding the exercise date (except in the event the exercise is within thirty days of the end of a fiscal quarter, in which case the value will be calculated as of the end of such fiscal quarter), over the initial value of such Incentive Unit, subject to all appropriate income tax withholdings. Accordingly, the dollar value of future payouts is not readily ascertainable.

In December 2005, the compensation committee exercised its rights to amend the 2001 LTIP, and extended the term of the 2001 LTIP through December 2007. In December 2007, the compensation committee further extended the term of the 2001 LTIP through December 2009. In December 2008, the compensation committee amended the 2001 LTIP to eliminate the termination date provision allowing the committee to terminate the 2001 LTIP at its discretion.

Post-Termination Compensation

In order for the Company to attract and retain well-qualified executives and key personnel, to provide certain security to itself and to each executive and to provide for continuity of management in the event of a change in control of the Company, in 2001 the Company entered into employment security agreements with certain of our executive officers and key personnel, including Messrs. Tafaro, Rebele and Harrison.

The agreements have no expiration date, are supported by irrevocable letters of credit and provide for a single-sum payment consisting of two times salary and bonus and related benefits if employment is terminated or a change in employment responsibilities occurs within a thirty-six month period following the change in control event. At December 31, 2008, the aggregate value of the security agreements related to the above-named individuals was $4.3 million, which excludes the cost of medical benefits and any amounts due under the 2001 Long-Term Incentive Plan.

A change of control, as defined in the agreements, would occur when (1) the Heyman Group (as described below) ceases to be the beneficial owner, directly or indirectly, of a majority voting power of the voting stock of BMCA, (2) the transfer or sale of a substantial portion of the property of BMCA in any transaction or series of transactions to any entity or entities other than an entity of which the Heyman Group owns at least 80% of such entity's capital stock or beneficial interest or (3) any person or entity, other than the Heyman Group, assumes, without the consent of the Heyman Group, management responsibilities for the affairs of G-I Holdings or any subsidiary thereof. The filing of the Chapter 11 case by G-I Holdings did not constitute a change in control but a change in control could occur in the future depending on the outcome of the bankruptcy proceeding. See Item 1A—"Risk Factors."

Under the agreements, the "Heyman Group" means (1) Samuel J. Heyman, his heirs, administrators, executors and entities of which a majority of the voting stock is owned by Samuel J. Heyman, his heirs, administrators or executors and (2) any entity controlled, directly or indirectly, by Samuel J. Heyman or his heirs, administrators or executors. Also for purposes of this section "beneficial ownership" shall be determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

On January 30, 2009, Mr. Harrison converted his full-time employment as the Senior Vice President, Chief Marketing Officer and Director of the Company to that of a consultant to the Company. On such date, Mr. Harrison's employment security agreement terminated. In connection with

Table of Contents

Mr. Harrison's change in employment status, Mr. Harrison received a discretionary bonus for his fiscal year 2008 performance, in lieu of any bonus under the Company's Executive Incentive Compensation Plan, in the amount of $180,000.

Additionally, under their respective employment agreements dated August 9, 2007, Messrs. Nowak and Kiik are entitled to severance payments, which are based on the timing of their termination.

Other Bonuses

Pursuant to their employment agreements dated August 9, 2007, Messrs. Nowak and Kiik each received a signing bonus in the amount of $1.0 and $0.3 million, respectively. Additionally, each is entitled to interim stay bonuses in exchange for remaining an employee of the Company through specified dates. In 2008 Messrs. Nowak and Kiik each received an interim stay bonus in the amount of $1.8 and $0.5 million, respectively.

Perquisites and Other Personal Benefits

The Company provides named executive officers with certain perquisites and other personal benefits that the compensation committee believes are reasonable and consistent with the overall compensation philosophy to attract, retain and motivate the most qualified and dedicated employees for key positions. The compensation committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers.

The named executive officers are provided use of company automobiles, payment of premiums for life insurance policies and long-term disability insurance policies, Company contributions to the 401(k) plan, and participation in the plans and programs described above. In certain instances and on a case-by-case basis, the Company may reimburse relocation expenses and pay relocation bonuses to executives who are required, due to promotions or reorganizations, to move to another Company location. Additionally, the Company may pay special one-time bonuses to certain executives when their performance far-exceeds any targets or goals set by the compensation committee. Such bonuses are not common and are not paid through any formal compensation plan.

Compensation Committee Report

The compensation committee, reviewed and discussed the above Compensation Discussion and Analysis ("CD&A") with the Company's management. Based on the review and discussion, the compensation committee recommended to the Company's Board of Directors that the CD&A be included in this Annual Report on Form 10-K.

Robert B. Tafaro
John F. Rebele
Jan E. Jerger-Stevens

Table of Contents

Summary Compensation Table

The following table sets forth the cash and non-cash compensation for each of the last three fiscal years awarded to or earned by our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers as of December 31, 2008.

Summary Compensation Table

Name and Principal Position			Salary			Bonus(1)			Option Awards		All Other Compensation			Total

Robert B. Tafaro		2008	$	575,000		$	1,000,000		$	1,619,649	$	35,257	(2)	$	3,229,906
	Chief Executive Officer	2007	$	525,000		$	500,000	(2)	$	190,120	$	34,474	(2)	$	1,249,594
	and President(2)	2006	$	450,000		$	435,000		$	660,108	$	36,815	(2)	$	1,581,923
Richard A. Nowak		2008	$	512,340		$	2,110,000	(3)	$	510,188	$	37,224	(3)	$	3,169,752
	Executive Vice President and	2007	$	374,318	(3)	$	1,250,000	(3)	$	3,656	$	34,517	(3)	$	1,662,491
	Chief Operating Officer(3)	2006	$	—		$	—		$	—	$	—		$	—
John F. Rebele		2008	$	351,780		$	300,000		$	533,623	$	37,150	(4)	$	1,222,553
	Senior Vice President,	2007	$	339,900		$	250,000	(4)	$	82,689	$	37,415	(4)	$	710,004
	Chief Financial Officer and	2006	$	315,833		$	230,000		$	438,325	$	37,308	(4)	$	1,021,466
	Chief Administrative Officer(4)
David A. Harrison		2008	$	322,197		$	180,000	(5)	$	533,041	$	25,351	(5)	$	1,060,589
	Senior Vice President and	2007	$	314,563		$	180,000	(5)	$	75,922	$	30,254	(5)	$	600,739
	Chief Marketing Officer(5)	2006	$	290,613		$	135,000		$	353,270	$	26,338	(5)	$	805,221
Matti Kiik		2008	$	280,817		$	675,000	(6)	$	258,984	$	32,668	(6)	$	1,247,469
	Senior Vice President and	2007	$	218,755	(6)	$	450,000	(6)	$	1,755	$	25,418	(6)	$	695,928
	Chief Technology Officer(6)	2006	$	—		$	—		$	—	$	—		$	—

(1): Bonus amounts for 2008, 2006 and a portion of the bonus amounts for certain executives in 2007 are payable pursuant to our Executive Incentive Compensation ("EIC") Plan with the exception of the bonus amounts paid to Mr. Tafaro, which are payable pursuant to the executive compensation plan. The 2008 bonus amount for Mr. Harrison was payable as a discretionary bonus pursuant to a separation agreement dated January 30, 2009 and was not part of the EIC Plan. Bonus amounts for Mr. Nowak and Mr. Kiik for 2008 and 2007 include interim stay bonuses, which were paid pursuant to their respective employment agreements and were not part of the EIC Plan.
(2): Included in "Bonus" for Mr. Tafaro for 2007 are amounts awarded under the executive compensation plan and a one-time integration bonus. Included in "All Other Compensation" for Mr. Tafaro are: $16,400, $16,250 and $15,900 representing our contribution under the 401(k) plan in 2008, 2007 and 2006, respectively; $8,076, $6,615 and $8,849 representing the amount of imputed income for the personal use of an automobile in 2008, 2007 and 2006, respectively; $10,056, $10,434 and $10,491 for the premiums paid by us for a life insurance policy in 2008, 2007 and 2006, respectively; and $725, $1,175 and $1,575 for the premiums paid by us for a long-term disability policy in 2008, 2007 and 2006, respectively. The amount included in "Option Awards" for Mr. Tafaro represents the expense incurred in 2008, 2007 and 2006, respectively, by us in relation to all incentive units granted to Mr. Tafaro and outstanding under BMCA's 2001 Long-Term Incentive Plan. See "Long-Term Incentive Plan."
(3): The salary and other compensation in 2007 for Mr. Nowak only reflect compensation for services since the date of acquisition. Included in "Bonus" for Mr. Nowak for 2008 is $1,750,000, representing an interim stay bonus paid in 2008. Included in "Bonus" for Mr. Nowak for 2007 is $1,000,000 representing a signing bonus paid in 2007 and a one-time integration bonus. Included in "All Other Compensation" for Mr. Nowak are: $16,100 and $26,332 representing our contribution under the Elk 401(k) plan in 2008 and 2007, respectively; $12,087 and $4,282 representing the amount of imputed income for the personal use of an automobile in 2008 and 2007, respectively; $6,878 and $2,050 for the premiums paid by us for a life insurance policy in 2008 and 2007, respectively; and $2,159 and $1,853 for the premiums paid by us for a long-term disability policy in 2008

Table of Contents

and 2007, respectively. The amount included in "Option Awards" for Mr. Nowak represents the expense incurred in 2008 and 2007, respectively, by us in relation to all incentive units granted to Mr. Nowak and outstanding under BMCA's 2001 Long-Term Incentive Plan. See "Long-Term Incentive Plan."

(4): Included in "Bonus" for Mr. Rebele for 2007 are amounts awarded under the Executive Incentive Compensation Plan, and a one-time integration bonus. Included in "All Other Compensation" for Mr. Rebele are: $16,400, $16,250 and $15,900 representing our contribution under the 401(k) plan in 2008, 2007 and 2006, respectively; $15,056, $12,661 and $12,825 representing the amount of imputed income for the personal use of an automobile in 2008, 2007 and 2006, respectively; $4,969, $7,329 and $7,008 for the premiums paid by us for a life insurance policy in 2008, 2007 and 2006, respectively; and $725, $1,175 and $1,575 for the premiums paid by us for a long-term disability policy in 2008, 2007 and 2006, respectively. The amount included in "Option Awards" for Mr. Rebele represents the expense incurred in 2008, 2007 and 2006, respectively, by us in relation to all incentive units granted to Mr. Rebele and outstanding under BMCA's 2001 Long-Term Incentive Plan. See "Long-Term Incentive Plan."
(5): Included in "Bonus" for Mr. Harrison for 2008 is $180,000 representing a discretionary bonus, in lieu of any bonus under the EIC Plan, paid pursuant to his separation agreement. Included in "Bonus" for Mr. Harrison for 2007 are amounts awarded under the Executive Incentive Compensation Plan, and a one-time integration bonus. Included in "All Other Compensation" for Mr. Harrison are: $16,400, $16,250 and $15,900 representing our contribution under the 401(k) plan in 2008, 2007 and 2006, respectively; $7,158, $12,829 and $2,405 representing the amount of imputed income for the personal use of an automobile in 2008, 2007 and 2006, respectively; $1,068, $0 and $6,458 for the premiums paid by us for a life insurance policy in 2008, 2007 and 2006, respectively; and $725, $1,175 and $1,575 for the premiums paid by us for a long-term disability policy in 2008, 2007 and 2006, respectively. The amount included in "Option Awards" for Mr. Harrison represents the expense incurred in 2008, 2007 and 2006, respectively, by us in relation to all incentive units granted to Mr. Harrison and outstanding under BMCA's 2001 Long-Term Incentive Plan. See "Long-Term Incentive Plan." Effective January 30, 2009, Mr. Harrison converted his full-time employment status as Senior Vice President, Chief Marketing Officer and Director of the Company to that of a consultant to the Company.
(6): The salary and other compensation in 2007 for Mr. Kiik only reflect compensation for services since the date of acquisition. Included in "Bonus" for Mr. Kiik for 2008 is $500,000, representing an interim stay bonus paid in 2008. Included in "Bonus" for Mr. Kiik for 2007 is $300,000, representing a signing bonus paid in 2007 and a one-time integration bonus. Included in "All Other Compensation" for Mr. Kiik are: $15,900 and $19,974 representing our contribution under the Elk 401(k) plan in 2008 and 2007, respectively; $9,132 and $2,575 representing the amount of imputed income for the personal use of an automobile in 2008 and 2007, respectively; $5,770 and $996 for the premiums paid by us for a life insurance policy in 2008 and 2007, respectively; and $1,866 and $1,873 for the premiums paid by us for a long-term disability policy in 2008 and 2007, respectively. The amount included in "Option Awards" for Mr. Kiik represents the expense incurred in 2008 and 2007, respectively, by us in relation to all incentive units granted to Mr. Kiik and outstanding under BMCA's 2001 Long-Term Incentive Plan. See "Long-Term Incentive Plan."

Table of Contents

Long-Term Incentive Plan

The following table sets forth information on awards (incentive units) granted to the executive officers named in the Summary Compensation Table above during 2008 under our 2001 Long-Term Incentive Plan.

2008 Grants of Plan—Based Awards(1)

Name				Exercise or Base Price of Option Awards(2)(3)

Robert B. Tafaro	1/08	1/08	6,000	$	592.01
Richard A. Nowak	—	—	—		—
John F. Rebele	—	—	—		—
David A. Harrison	—	—	—		—
Matti Kiik	—	—	—		—

(1): Effective December 31, 2000, we adopted our 2001 Long-Term Incentive Plan. The 2001 LTIP provides long-term compensation to employees and key management personnel based on BMCA's book value (as defined in the plan). Our 2001 Long-Term Incentive Plan authorizes the grant of incentive units to eligible employees. "Option Awards" referenced in the table above are incentive units granted under the 2001 Long-Term Incentive Plan. Our 2001 Long-Term Incentive Plan is administered by a committee appointed by our board of directors. The number of incentive units granted is determined by the committee in its sole discretion. Generally, incentive units vest cumulatively, in 20% increments over five years. The committee may, in its sole discretion, however, grant incentive units with any vesting schedule, other than the vesting schedule provided for in the 2001 Long-Term Incentive Plan. Vesting will end upon the termination of an employee's employment with BMCA or any subsidiary for any reason. If, after a change of control of BMCA, (as defined in the 2001 LTIP) an employee's employment is terminated within twelve months of the change of control for any reason other than Good Cause (as defined in the 2001 LTIP), as a result of death or permanent disability, or by the employee for Good Reason (as defined in the 2001 LTIP), all incentive units will become fully and immediately vested. Vested Incentive Units are exercised on the earlier of: (i) the sixth anniversary of the date the Incentive Unit was granted; (ii) a specified date elected by an employee; and (iii) either one year after the employee's termination of employment with the Company due to retirement, or the date of the employee's termination of employment for reasons other than due to retirement.
(2): Set forth under the "Exercise or Base Price of Option Awards" column is the initial value (as defined) per unit at which the respective incentive units were granted. The value of incentive units is determined at the end of each fiscal quarter based on our book value, as defined in the plan at that date less book value as of the date of grant divided by 1,000,010 and is payable in cash upon exercise. Our 2001 Long-Term Incentive Plan was to terminate five years after its effective date of December 2000, however, in December 2005, the committee exercised its rights to amend the 2001 LTIP, and extended the term of the 2001 LTIP through December 2007. In December 2007, the compensation committee further extended the term of the 2001 LTIP through December 2009. In December 2008, the compensation committee amended the 2001 LTIP to eliminate the termination date provision allowing the committee to terminate the 2001 LTIP at its discretion.
(3): Upon exercise of an incentive unit, a participant will receive in cash the excess, if any, of the value of such incentive unit as of the end of the fiscal quarter immediately preceding the exercise date

Table of Contents

(except in the event the exercise is within thirty days of the end of a fiscal quarter, in which case the value will be calculated as of the end of such fiscal quarter), over the initial value of such incentive unit, subject to all appropriate income tax withholdings. Accordingly, the amount of future payouts is not readily ascertainable.

The following tables set forth detailed information on awards (incentive units) to our executive officers named in the Summary Compensation Table above under our 2001 Long-Term Incentive Plan that are outstanding at December 31, 2008.

Outstanding Equity Awards at December 31, 2008
Option Awards(1)

Name				Option Exercise Price

Robert B. Tafaro	1,320	—	880	$	478.16	4/11
	3,000	—	2,000	$	534.19	1/12
	1,000	—	4,000	$	583.08	1/13
	—	—	6,000	$	592.01	1/14
Richard A. Nowak	1,750	—	3,250	$	583.49	7/13
John F. Rebele	600	—	—	$	300.00	1/10
	1,080	—	720	$	478.16	4/11
	460	—	1,840	$	583.08	1/13
David A. Harrison(2)	1,100	—	—	$	300.00	1/10
	960	—	640	$	478.16	4/11
	380	—	1,520	$	583.08	1/13
Matti Kiik	750	—	2,250	$	583.49	7/13

(1): "Option Awards" referenced in the table above are incentive units granted under the 2001 Long-Term Incentive Plan.
(2): On January 30, 2009, Mr. Harrison converted his full-time employment status as the Senior Vice President, Chief Marketing Officer and Director of the Company to that of a consultant to the Company. As a result, vesting of previously granted but unvested incentive units ceased on January 30, 2009 and vested incentive units as of that date shall expire ninety days from January 30, 2009.

Table of Contents

Option Exercises in 2008(1)

Name		Value Realized on Exercise

Robert B. Tafaro	2,100	$	657,181
Richard A. Nowak	—	$	—
John F. Rebele	1,100	$	351,241
David A. Harrison	1,100	$	351,241
Matti Kiik	—	$	—

(1): "Option Exercises" referenced in the table above are exercised incentive units granted under the 2001 Long-Term Incentive Plan.

Employment Security Agreements

In June 2001, we entered into employment security agreements with certain of our executive officers and key personnel, including Messrs. Tafaro, Rebele and Harrison, in an effort to retain these individuals as well as provide security to us and the executives and to provide for continuity of management in the event of a change in control. The agreements have no expiration date, are supported by irrevocable letters of credit and provide for a single-sum payment consisting of two times salary and bonus and related benefits if employment is terminated or a change in employment responsibilities occurs within a thirty-six month period following the change in control event, as defined. At December 31, 2008, the aggregate value of the security agreements related to the above-named individuals (see Directors and Executive Officers of the Registrant) was $4.3 million, which excludes the cost of medical benefits and any amounts due under the 2001 Long-Term Incentive Plan.

Under the agreements, the "Heyman Group" means (1) Samuel J. Heyman, his heirs, administrators, executors and entities of which a majority of the voting stock is owned by Samuel J. Heyman, his heirs, administrators or executors and (2) any entity controlled, directly or indirectly, by Samuel J. Heyman or his heirs, administrators or executors. Also for purposes of this section, "beneficial ownership" shall be determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

On January 30, 2009, Mr. Harrison converted his full-time employment as the Senior Vice President, Chief Marketing Officer and Director of the Company to that of a consultant to the Company. Accordingly, on such date, Mr. Harrison's employment security agreement terminated.

Additionally, under their respective employment agreements dated August 9, 2007, Messrs. Nowak and Kiik are entitled to severance payments, which are based on the timing of their termination.

Compensation of Directors

Our directors do not receive any additional compensation for their services as directors.

Table of Contents

Compensation Committee Interlocks and Insider Participations

We do not have a separate compensation committee within the rules prescribed by the Sarbanes-Oxley Act. Compensation policies are established by our internal compensation committee, comprised of our Chief Executive Officer, Chief Financial Officer and Senior Vice-President of Human Resources. See Item 13, "Certain Relationships and Related Transactions and Director Independence."

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Securities Authorized for Issuance Under Equity Compensation Plans

As of December 31, 2008, options to purchase 400,000 shares of preferred stock remain available for grants under our 1996 Preferred Stock Option Plan.

Securities Ownership of Certain Beneficial Owners and Management

As of March 30, 2009, 100% of our outstanding shares of Class A common stock were owned of record by BMCA Holdings Corporation.

The following table sets forth information with respect to the ownership of our common stock, as of March 30, 2009, by each other person known to us to own beneficially more than 5% of the common stock outstanding on that date and by all of our directors and executive officers as a group.

Title of Class	Name and Address of Beneficial Owner(1)

Class A Common Stock	Samuel J. Heyman	1,015,010	(2)	100.0	%	100.0	%
	All directors and executive officers as a group (7 persons)	—		—		—

(1): The business address for Mr. Heyman is 667 Madison Avenue, New York, New York 10021.
(2): The number of shares shown as being beneficially owned (as defined in Rule 13d-3 of the Exchange Act) by Mr. Heyman attributes ownership of the shares of our common stock owned by BMCA Holdings Corporation, an indirect wholly-owned subsidiary of G Holdings, to Mr. Heyman. As of March 30, 2009, Mr. Heyman beneficially owned (as defined in Rule 13d-3 of the Exchange Act) approximately 99% of the capital stock of G Holdings.

Item 13. Certain Relationships and Related Transactions and Director Independence.

Although no formal written policy is in place, our Board of Directors is responsible for reviewing and approving the terms and conditions of all significant related party transactions.

Management Agreement

Pursuant to a management agreement, a subsidiary of ISP (of which Samuel J. Heyman beneficially owns, as defined in Rule 13d-3 of the Exchange Act, approximately 100%), provides certain general management, administrative, legal and facilities services to us, including the use of our headquarters in Wayne, New Jersey. We were charged approximately $7.3, $6.7 and $6.1 million in 2008, 2007 and 2006, respectively, for these services under the management agreement, inclusive of the services provided to G-I Holdings. These charges consist of management fees and other reimbursable expenses attributable to us, or incurred by ISP for our benefit. They are based on an estimate of the costs ISP incurs to provide those services. The amount payable to ISP for management fees as of December 31, 2008 and 2007 was $0.9 and $0.5 million, respectively. The management agreement also

Table of Contents

provides that we are responsible for providing management services to G-I Holdings and some of its subsidiaries and that G-I Holdings pay to us a management fee for these services. The aggregate amount paid by G-I Holdings to us for services rendered under the management agreement in 2008, 2007 and 2006 was $0.9, $0.8 and $0.9 million, respectively. We also allocate a portion of the management fees payable by us under the management agreement as lease payments for the use of our headquarters.

The salary of Mr. Daniel J. Goldstein, Senior Vice President and General Counsel is paid by ISP pursuant to our management agreement with ISP. We reimburse ISP, through payment of the management fees payable under the management agreement, for the estimated costs ISP incurs for providing the services of Mr. Goldstein.

Due to the unique nature of the services provided under the management agreements, comparisons with third party arrangements are difficult. However, we believe that the terms of the management agreement taken as a whole are no less favorable to us than could be obtained from an unaffiliated third party.

Certain Purchases

During 2008, we and our subsidiaries purchased a substantial portion of our headlap roofing granules, colored roofing granules and algae-resistant granules, on a purchase order basis, from ISP Minerals, an affiliate of BMCA and ISP, which is also an affiliate of BMCA. The amount of mineral products purchased each year on this basis is based on current demand and is not subject to minimum purchase requirements. For the year ended December 31, 2008, we purchased $40.6 million of roofing granules under this arrangement.

Tax Sharing Agreement

We entered into a tax sharing agreement (the "Tax Sharing Agreement") dated January 31, 1994 and later amended on March 19, 2001, with G-I Holdings, with respect to the payment of Federal income taxes and related matters. During the term of the Tax Sharing Agreement, which is effective for the period during which we or any of our domestic subsidiaries is included in a consolidated Federal income tax return for the G Holdings' consolidated tax group, we are obligated to pay G Holdings an amount equal to those Federal income taxes we would have incurred if we, on behalf of ourselves and our domestic subsidiaries, filed our own Federal income tax return. Unused tax attributes will carry forward for use in reducing amounts payable by us to G Holdings in future years, but cannot be carried back. Our unused tax attributes currently consist of a net operating loss carryforward of $42.1 million, which will not expire until 2027. If we ever were to leave the G Holdings' consolidated tax group, we would be required to pay to G Holdings the value of any tax attributes to which we would succeed under the consolidated return regulations to the extent the tax attributes reduced the amounts otherwise payable by us under the Tax Sharing Agreement. Under limited circumstances, the provisions of the Tax Sharing Agreement could result in us having a greater liability under the agreement than we would have had if we and our domestic subsidiaries had each filed our own separate Federal income tax return. Under the Tax Sharing Agreement, we and each of our domestic subsidiaries are responsible for any taxes that would be payable by reason of any adjustment to the tax returns of G Holdings or its subsidiaries for years prior to the adoption of the Tax Sharing Agreement that relate to our business or assets or the business or assets of any of our domestic subsidiaries. Although, as a member of the

Table of Contents

G Holdings' consolidated tax group, we are severally liable for certain Federal income tax liabilities of the G Holdings' consolidated tax group, including tax liabilities not related to our business, we should have no liability other than liabilities arising from our operations and the operations of our domestic subsidiaries and tax liabilities for tax years pre-dating the Tax Sharing Agreement that relate to our business or assets and the business or assets of any of our domestic subsidiaries. The Tax Sharing Agreement provides for analogous principles to be applied to any consolidated, combined or unitary state or local income taxes. Under the Tax Sharing Agreement, G Holdings makes all decisions with respect to all matters relating to taxes of the G Holdings' consolidated tax group. The provisions of the Tax Sharing Agreement take into account both the Federal income taxes we would have incurred if we filed our own separate Federal income tax return and the fact that we are a member of the G Holdings' consolidated tax group for Federal income tax purposes.

Intercompany Borrowings

We make loans to, and borrow from, our parent corporations from time to time at interest rates ranging from 3.25% to 7.25% in 2008. As of December 31, 2008 and 2007, BMCA Holdings Corporation owed us $56.3 and $56.2 million, including interest of $1.1 and $1.0 million, respectively, and we owed BMCA Holdings Corporation $52.8 and $52.8 million, respectively, with no unpaid interest. Interest income on our loans to BMCA Holdings Corporation amounted to $3.4, $5.0 and $4.9 million in 2008, 2007 and 2006, respectively. Interest expense on our loans from BMCA Holdings Corporation amounted to $3.3, $4.8 and $4.7 million in 2008, 2007 and 2006, respectively. Loans payable to/receivable from our parent corporation are due on demand and provide each party with the right of offset of its related obligation to the other party and are subject to limitations as outlined in our Senior Secured Credit Facilities and our Senior Notes. Under the terms of our Senior Secured Credit Facility and the indenture governing our Senior Notes at December 31, 2008, we could repay demand loans to our parent corporation amounting to $52.8 million, subject to certain conditions. See Note 17 to our consolidated financial statements included in this annual report on Form 10-K.

Director Independence

As of March 30, 2009, our Board of Directors is comprised of Messrs. Tafaro, Nowak, Rebele, Kiik, Goldstein and Ms. Jerger-Stevens, none of whom are independent.

Item 14. Principal Accounting Fees and Services.

The following table presents fees for professional services rendered by our independent registered public accounting firm, Ernst & Young LLP and other public accounting firms, for the fiscal years ended December 31, 2008 and 2007.

Audit and Non-Audit Fees

		2008		2007

Audit Fees(1)		$	546,800	$	542,800
Audit-Related Fees(2)			67,500		67,000
Tax Fees(3)			164,037		241,818
All Other Fees(4)			229,700		1,165,916

	Total	$	1,008,037	$	2,017,534

(1): Audit fees relate to professional services rendered by Ernst & Young LLP in 2008 and 2007 in connection with the audit of our annual financial statements, quarterly review of

Table of Contents

financial statements included in our Forms 10-Q, and audit services provided in connection with other statutory and regulatory filings.

(2): Audit-related fees include professional services rendered by Ernst & Young LLP in 2008 and 2007 related to the audit of our employee benefit plans. In addition, 2008 and 2007 audit related fees include professional services rendered by Grant Thornton LLP related to the Elk employee benefit plans.
(3): For 2007 tax fees include professional services rendered by Ernst & Young LLP paid in 2008 and for 2008 professional services rendered in 2008 to be paid in 2009 in connection with tax compliance. In addition, 2008 and 2007 tax fees include professional services rendered by Ernst & Young LLP for tax compliance related to Elk that were rendered and paid in 2008 and 2007, respectively. We do not engage Ernst & Young LLP to perform personal tax services for our executive officers.
(4): All other fees in 2008 include professional services rendered by Ernst & Young LLP related to the review of final purchase accounting adjustments and a consent issued in connection with our franchise offering circular. In addition, all other fees in 2008 include professional services rendered by KPMG, LLP related to the reissuance of their opinion. All other fees in 2007 include professional services rendered by Ernst & Young LLP related to merger and acquisition due diligence, post-acquisition financial statement review, a comfort letter issued in connection with the acquisition and merger of Elk and a consent issued in connection with our franchise offering circular. In addition, all other fees in 2007 include professional services rendered by KPMG LLP, Grant Thornton LLP and Price Waterhouse Coopers LLP related to the reissuance of their respective opinions and/or comfort letters in connection with the acquisition of Elk.

Policy on Pre-Approval of Audit and Non-Audit Services Performed by the Independent Registered Public Accountants

Our Board of Directors approves, prior to the engagement of our independent registered public accountants, consistent with the Sarbanes-Oxley Act of 2002 and the requirements of the Securities and Exchange Commission, any audit, audit-related and permitted non-audit services reasonably likely to be required by us from Ernst & Young LLP during the coming fiscal year. The Board may delegate the approval of unanticipated (but otherwise permitted) non-audit services during the coming fiscal year to our principal financial officer (who is a member of the Board of Directors) or our principal accounting officer as required.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

The following documents are filed as part of this report:

(a)(1) Financial Statements: See Index on page F-1.

(a)(2) Financial Statement Schedules: See Index on page F-1.

(a)(3) Exhibits:

Table of Contents

EXHIBIT INDEX

Exhibit Number			Description

	2.1		Reorganization Agreement, dated as of December 31, 1998, by and among BMCA, Building Materials Manufacturing Corporation and Building Materials Investment Corporation (incorporated by reference to Exhibit 2.1 to BMCA's Registration Statement on Form S-4 (Registration No. 333-69749) (the "2008 Notes S-4")).
	3.1		Amended and Restated Certificate of Incorporation of BMCA (incorporated by reference to Exhibit 3.1 to BMCA's Form 10-K for the fiscal year ended December 31, 1999).
	3.2		By-laws of BMCA (incorporated by reference to Exhibit 3.2 to BMCA's Registration Statement on Form S-4 (Registration No. 33-81808)) (the "Deferred Coupon Note Registration Statement").
	3.3		Certificate of Incorporation of Building Materials Manufacturing Corporation (incorporated by reference to Exhibit 3.3 to BMCA's Form 10-K for the fiscal year ended December 31, 1998 (the "1998 Form 10-K")).
	3.4		By-laws of Building Materials Manufacturing Corporation (incorporated by reference to Exhibit 3.4 to the 1998 Form 10-K).
	3.5		Certificate of Incorporation of Building Materials Investment Corporation (incorporated by reference to Exhibit 3.5 to the 1998 Form 10-K).
	3.6		By-laws of Building Materials Investment Corporation (incorporated by reference to Exhibit 3.6 to the 1998 Form 10-K).
	4.1		Indenture, dated as of December 3, 1998, between BMCA and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.1 to the 2008 Notes S-4).
	4.2		First Supplemental Indenture dated as of January 1, 1999 to Indenture dated as of December 3, 1998 among BMCA, as issuer, Building Materials Manufacturing Corporation and Building Materials Investment Corporation, as guarantors, and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.4 to the 2008 Notes S-4).
	4.3		Second Supplemental Indenture, dated as of December 4, 2000, to Indenture dated as of December 3, 1998, among BMCA, as issuer, Building Materials Manufacturing Corporation and Building Materials Investment Corporation, as original guarantors, the Additional Guarantors signatory thereto, as additional guarantors, and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.12 to BMCA's Form 10-K for the fiscal year ended December 31, 2000 (the "2000 Form 10-K")).
	4.4		Third Supplemental Indenture, dated as of January 4, 2007 to Indenture dated as of December 3, 1998, among BMCA, the guarantors signatory thereto and The Bank of New York, as trustee (incorporated by reference to Exhibit 4.4 to BMCA's Form 10-K for the fiscal year ended December 31, 2007 (the "2007 Form 10-K")).

Table of Contents

Exhibit Number			Description

	4.5		Indenture, dated as of July 26, 2004, among BMCA, as issuer, BMCA Insulation Products Inc., BMCA Quakertown Inc., Building Materials Investment Corporation, Building Materials Manufacturing Corporation, Ductwork Manufacturing Corporation, GAF Leatherback Corp., GAF Materials Corporation (Canada), GAF Premium Products Inc., GAF Real Properties, Inc., GAFTECH Corporation, LL Building Products Inc., Pequannock Valley Claim Service Company, Inc., South Ponca Realty Corp. and Wind Gap Real Property Acquisition Corp., as guarantors, and Wilmington Trust Company as trustee (incorporated by reference to Exhibit 4.10 to BMCA's Registration Statement on Form S-4 (Registration No. 333-119608)).
	4.6		First Supplemental Indenture, dated as of December 29, 2006, to the Indenture dated as of July 26, 2004, among BMCA, as issuer, the guarantors signatory thereto and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 4.6 to the 2007 Form 10-K).
	4.7		Second Supplemental Indenture, dated as of December 29, 2006, to the Indenture dated as of July 26, 2004, among BMCA, as issuer, the guarantors signatory thereto and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 4.7 to the 2007 Form 10-K).
	4.8		Third Supplemental Indenture, dated as of December 29, 2006, to the Indenture dated as of July 26, 2004, among BMCA, as issuer, the guarantors signatory thereto and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 4.8 to the 2007 Form 10-K).
	4.9		Fourth Supplemental Indenture, dated as of February 21, 2007, to the Indenture dated as of July 26, 2004, among BMCA, as issuer, the guarantors signatory thereto and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 4.9 to the 2007 Form 10-K).
	4.10		Fifth Supplemental Indenture, dated as of February 22, 2007, to the Indenture dated as of July 26, 2004, among BMCA, as issuer, the guarantors signatory thereto and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 4.10 to the 2007 Form 10-K).
	4.11		Sixth Supplemental Indenture, dated as of March 26, 2007, to the Indenture dated as of July 26, 2004, among BMCA, as issuer, the guarantors signatory thereto and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 4.11 to the 2007 Form 10-K).
	10.1		Amended and Restated Management Agreement, dated as of January 1, 1999, among GAF, G-I Holdings Inc., G Industries Corp., Merick Inc., GAF Fiberglass Corporation, ISP, GAF Building Materials Corporation, GAF Broadcasting Company, Inc., BMCA and ISP Opco Holdings Inc. (incorporated by reference to Exhibit 10.1 to the 1998 Form 10-K).
	10.2		Amendment No. 1 to the Management Agreement, dated as of January 1, 2000 (incorporated by reference to Exhibit 10.2 to International Specialty Products Inc. annual report on Form 10-K for the fiscal year ended December 31, 1999).
	10.3		Amendment No. 2 to the Management Agreement, dated as of January 1, 2001 (incorporated by reference to Exhibit 10.3 to International Specialty Products Inc. annual report on Form 10-K for the fiscal year ended December 31, 2000).
	10.4		Amendment No. 3 to the Amended and Restated Management Agreement, dated as of June 27, 2001, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., ISP Investco LLC, GAF Broadcasting Company, Inc., Building Materials Corporation of America and ISP Management Company, Inc., as assignee of ISP Chemco Inc. (incorporated by reference to Exhibit 10.7 to the ISP Chemco Inc. Registration Statement on Form S-4 (Registration No. 333-70144)).

Table of Contents

Exhibit Number			Description

	10.5		Amendment No. 4 to the Amended and Restated Management Agreement, dated as of January 1, 2002, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., ISP Investco LLC, GAF Broadcasting Company, Inc., Building Materials Corporation of America and ISP Management Company, Inc. (incorporated by reference to Exhibit 10.5 to BMCA's Form 10-K for the fiscal year ended December 31, 2001 (the "2001 Form 10-K")).
	10.6		Amendment No. 5 to the Amended and Restated Management Agreement, dated as of January 1, 2003, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., ISP Investco LLC, GAF Broadcasting Company, Inc., Building Materials Corporation of America and ISP Management Company, Inc. (incorporated by reference to Exhibit 10.1 to BMCA's Form 10-Q for the quarterly period ended March 30, 2003).
	10.7		Amendment No. 6 to the Amended and Restated Management Agreement, dated as of January 1, 2004, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., International Specialty Holdings Inc., ISP Synthetic Elastomers LP, ISP Investco LLC, GAF Broadcasting Company, Inc., BMCA and ISP Management Company, Inc. as assignee of ISP Chemco, Inc. (incorporated by reference to Exhibit 10.1 to BMCA's Form 10-Q for the quarterly period ended April 4, 2004).
	10.8		Amendment No. 7 to the Amended and Restated Management Agreement, dated as of January 1, 2005, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., International Specialty Holdings Inc., ISP Synthetic Elastomers LP, ISP Investco LLC, GAF Broadcasting Company, Inc., Building Materials Corporation of America and ISP Management Company, Inc. as assignee of ISP Chemco, Inc. (incorporated by reference to Exhibit 10.1 to BMCA's Form 10-Q for the quarterly period ended July 3, 2005).
	10.9		Amendment No. 8 to the Amended and Restated Management Agreement, dated as of January 1, 2006, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., International Specialty Holdings Inc., ISP Minerals Inc., ISP Investco LLC, GAF Broadcasting Company, Inc., Building Materials Corporation of America and ISP Management Company, Inc. as assignee of ISP Chemco, Inc. (incorporated by reference to Exhibit 10.1 to BMCA's Form 10-Q for the quarterly period ended July 2, 2006).
	10.10		Amendment No. 9 to the Amended and Restated Management Agreement, dated as of January 1, 2007, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., International Specialty Holdings LLC, ISP Minerals Inc., ISP Investco LLC, GAF Broadcasting Company, Inc., Building Materials Corporation of America and ISP Management Company, Inc. as assignee of ISP Chemco, LLC, formerly ISP Chemco, Inc. (incorporated by reference to Exhibit 10.1 to BMCA's current report on Form 8-K dated February 19, 2008).
	*10.11		Amendment No. 10 to the Amended and Restated Management Agreement, dated as of January 1, 2008, by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc., International Specialty Holdings LLC, ISP Minerals Inc., ISP Investco LLC, GAF Broadcasting Company, Inc., Building Materials Corporation of America and ISP Management Company, Inc. as assignee of ISP Chemco, LLC, formerly ISP Chemco, Inc.
	10.12		BMCA 2001 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.8 to the 2000 Form 10-K).

Table of Contents

Exhibit Number			Description

	10.13		Form of BMCA 2001 Long-Term Incentive Plan Incentive Unit Grant Agreement (incorporated by reference to Exhibit 10.2 to BMCA's Form 10-Q for the quarterly period ended July 3, 2005).
	10.14		First Amendment to the BMCA 2001 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.11 to BMCA's Form 10-K for the fiscal year ended December 31, 2005).
	10.15		Second Amendment to the BMCA 2001 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to BMCA's current report on Form 8-K dated December 31, 2007).
	*10.16		The Amended and Restated Long-Term Incentive Plan effective January 1, 2005.
	10.17		Tax Sharing Agreement, dated as of January 31, 1994, among GAF, G-I Holdings Inc. and BMCA (incorporated by reference to Exhibit 10.6 to the Deferred Coupon Note Registration Statement).
	10.18		Amendment to Tax Sharing Agreement, dated as of March 19, 2001, between G-I Holdings and BMCA (incorporated by reference to Exhibit 10.10 to the 2000 Form 10-K).
	10.19		Reorganization Agreement, dated as of January 31, 1994, among GAF Building Materials Corporation, G-I Holdings Inc. and BMCA (incorporated by reference to Exhibit 10.9 to the Deferred Coupon Note Registration Statement).
	10.25		Revolving Credit Agreement, dated as of February 22, 2007, among Building Materials Corporation of America, BMCA Acquisition Inc. and BMCA Acquisition Sub Inc., as borrowers; the initial lenders, initial issuing bank and swing line bank named therein, as initial lenders, initial issuing bank and swing line bank; Deutsche Bank AG New York Branch, as collateral monitoring agent and administrative agent; Deutsche Bank Securities Inc., Bear Stearns & Co. Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint book managers; Bear Stearns & Co. Inc., as syndication agent; and J.P. Morgan Securities Inc., as documentation agent (incorporated by reference to Exhibit 10.1 to BMCA's Current Report on Form 8-K dated February 22, 2007).
	10.26		Amendment No. 1 to the Revolving Credit Agreement, dated as of March 12, 2007, among Building Materials Corporation of America, BMCA Acquisition Inc. and BMCA Acquisition Sub Inc., as borrowers; the initial lenders, initial issuing bank and swing line bank named therein, as initial lenders, initial issuing bank and swing line bank; Deutsche Bank AG New York Branch, as collateral monitoring agent and administrative agent; Deutsche Bank Securities Inc., Bear Stearns & Co. Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint book managers; Bear Stearns & Co. Inc., as syndication agent; and J.P. Morgan Securities Inc., as documentation agent (incorporated by reference to Exhibit 10.2 to BMCA's Current Report on Form 8-K dated March 15, 2007).
	10.27		Term Loan Agreement, dated as of February 22, 2007, among Building Materials Corporation of America, BMCA Acquisition Inc. and BMCA Acquisition Sub Inc., as borrowers; the initial lenders named therein, as initial lenders; Deutsche Bank AG New York Branch, as administrative agent; Deutsche Bank Securities Inc., Bear Stearns & Co. Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint book managers; Bear Stearns & Co. Inc., as syndication agent; and J.P. Morgan Securities Inc., as documentation agent (incorporated by reference to Exhibit 10.2 to BMCA's Current Report on Form 8-K dated February 22, 2007).

Table of Contents

Exhibit Number			Description

	10.28		Amendment No. 1 to the Term Loan Agreement, dated as of March 15, 2007, among Building Materials Corporation of America, BMCA Acquisition Inc. and BMCA Acquisition Sub Inc., as borrowers; the initial lenders named therein, as initial lenders; Deutsche Bank AG New York Branch, as administrative agent; Deutsche Bank Securities Inc., Bear Stearns & Co. Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and joint book managers; Bear Stearns & Co. Inc., as syndication agent; and J.P. Morgan Securities Inc., as documentation agent (incorporated by reference to Exhibit 10.3 to BMCA's Current Report on Form 8-K dated March 15, 2007).
	10.29		Bridge Loan Agreement, dated as of February 22, 2007, among Building Materials Corporation of America, BMCA Acquisition Inc. and BMCA Acquisition Sub Inc., as borrowers; the initial lenders named therein, as initial lenders; Deutsche Bank AG Cayman Islands Branch, as collateral agent and administrative agent; Deutsche Bank AG Cayman Islands Branch and Bear Stearns Corporate Lending Inc., as joint lead arrangers; and Deutsche Bank AG Cayman Islands Branch, Bear Stearns Corporate Lending Inc. and JPMorgan Chase Bank, N.A., as joint book managers (incorporated by reference to Exhibit 10.3 to BMCA's Current Report on Form 8-K dated February 22, 2007).
	10.30		Junior Lien Term Loan Agreement, (amending and restating in its entirety the Bridge Loan Agreement dated as of February 22, 2007) dated as of March 15, 2007, among Building Materials Corporation of America, BMCA Acquisition Inc. and BMCA Acquisition Sub Inc., as borrowers; the lenders named therein, as lenders; Deutsche Bank AG New York Branch, as collateral agent and administrative agent; Deutsche Bank Securities, Inc., Bear Stearns & Co. Inc., and J.P. Morgan Securities, Inc. as joint lead arrangers and joint book managers; and Deutsche Bank AG Cayman Islands Branch, Bear Stearns Corporate Lending Inc. and J.P. Morgan Securities, Inc., as documentation agent, and Bear Stearns & Co. Inc., as syndication agents (incorporated by reference to Exhibit 10.1 to BMCA's Current Report on Form 8-K dated March 15, 2007).
	10.32		Employment Security Agreement between BMCA and David A. Harrison, effective June 2001 (incorporated by reference to Exhibit 10.23 to the 2001 Form 10-K).
	10.33		Employment Security Agreement between BMCA and Robert B. Tafaro, effective June 2001 (incorporated by reference to Exhibit 10.24 to the 2001 Form 10-K).
	10.35		Employment Security Agreement between BMCA and John F. Rebele, effective June 2001 (incorporated by reference to Exhibit 10.26 to the 2001 Form 10-K).
	10.36		Employment Agreement, dated August 9, 2007, between Richard A. Nowak and GAF Materials Corporation (incorporated by reference to Exhibit 10.1 to BMCA's Form 10-Q for the quarterly period ended July 1, 2007).
	10.37		Employment Agreement, dated August 9, 2007 between Matti Kiik and GAF Materials Corporation (incorporated by reference to Exhibit 10.2 to BMCA's Form 10-Q for the quarterly period ended July 1, 2007).
	*10.38		Separation Agreement and General Release dated as of January 30, 2009, by and between David A. Harrison and BMCA.
	*10.39		Consulting Agreement dated as of January 30, 2009, by and between David A. Harrison and BMCA.

Table of Contents

Exhibit Number			Description

	10.40		Collateral Agency Agreement, dated as of February 22, 2007, by and among BMCA, the guarantors party thereto, Deutsche Bank AG New York Branch, as Administrative Agent, The Bank of New York and Wilmington Trust Company, as trustees, and Deutsche Bank Trust Company Americas, as collateral agent (incorporated by reference to Exhibit 10.38 to the 2007 Form 10-K).
	10.41		Security Agreement dated February 22, 2007, made by BMCA and the other grantors party thereto to Deutsche Bank Trust Company Americas, as collateral agent (incorporated by reference to Exhibit 10.39 to the 2007 Form 10-K).
	10.42		Security Agreement dated February 22, 2007, made by BMCA and the other grantors party thereto to Deutsche Bank AG New York Branch, as collateral agent (incorporated by reference to Exhibit 10.40 to the 2007 Form 10-K).
	10.43		Amended and Restated Security Agreement dated March 15, 2007, made by BMCA and the other grantors party thereto to Deutsche Bank AG New York Branch, as collateral agent (incorporated by reference to Exhibit 10.41 to the 2007 Form 10-K).
	10.44		Security Agreement Supplement dated March 26, 2007, made by the additional grantors party thereto to Deutsche Bank AG New York Branch, as collateral agent (incorporated by reference to Exhibit 10.42 to the 2007 Form 10-K).
	10.45		General Intercreditor Agreement dated as of February 22, 2007, among Deutsche Bank Trust Company Americas, as first lien collateral agent, and Deutsche Bank AG Cayman Islands Branch, as junior lien collateral agent (incorporated by reference to Exhibit 10.43 to the 2007 Form 10-K).
	10.46		Additional Party Addendum to General Intercreditor Agreement dated as of February 22, 2007, by Deutsche Bank AG New York Branch, as collateral agent under the Junior Lien Term Loan Agreement (incorporated by reference to Exhibit 10.44 to the 2007 Form 10-K).
	10.47		Revolver Intercreditor Agreement dated as of February 22, 2007, among Deutsche Bank AG New York Branch, as first lien collateral agent, Deutsche Bank Trust Company Americas, as second lien collateral agent, and Deutsche Bank AG Cayman Islands Branch, as third lien collateral agent (incorporated by reference to Exhibit 10.45 to the 2007 Form 10-K).
	10.48		Additional Party Addendum to Revolver Intercreditor Agreement dated as of February 22, 2007, by Deutsche Bank AG New York Branch, as collateral agent under the Junior Lien Term Loan Agreement (incorporated by reference to Exhibit 10.46 to the 2007 Form 10-K).
	16		Letter dated September 22, 2006, from KPMG LLP to the Securities and Exchange Commission regarding the change in certifying accountant (incorporated by reference to Exhibit 16.1 to BMCA's current report on Form 8-K filed September 22, 2006).
	*21		Subsidiaries of BMCA.
	*31.1		Rule 13a-14(a)/Rule 15d-14(a) Certification of the Chief Executive Officer.
	*31.2		Rule 13a-14(a)/Rule 15d-14(a) Certification of the Chief Financial Officer.
	*32.1		Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer.

*: Filed herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on March 30, 2009 by the following persons on behalf of each registrant and in the capacities indicated.

Signature				Title


/s/ ROBERT B. TAFARO Robert B. Tafaro				Chief Executive Officer, President and Director (Principal Executive Officer)
/s/ JOHN F. REBELE John F. Rebele				Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Director (Principal Financial Officer)
/s/ RICHARD A. NOWAK Richard A. Nowak				Director
/s/ MATTI KIIK Matti Kiik				Director
/s/ JAN E. JERGER-STEVENS Jan E. Jerger- Stevens				Director
/s/ DANIEL J. GOLDSTEIN Daniel J. Goldstein				Director
/s/ JAMES T. ESPOSITO James T. Esposito				Vice President and Controller (Principal Accounting Officer)

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

FORM 10-K

INDEX TO MANAGEMENT'S DISCUSSION AND ANALYSIS, CONSOLIDATED
FINANCIAL STATEMENTS AND SCHEDULES

		Page

Management's Discussion and Analysis of Financial Condition and Results of Operations		F-2
Selected Financial Data		F-27
Report of Independent Registered Public Accounting Firm		F-28
Consolidated Statements of Operations for the three years ended December 31, 2008		F-29
Consolidated Balance Sheets as of December 31, 2008 and 2007		F-30
Consolidated Statements of Cash Flows for the three years ended December 31, 2008		F-31
Consolidated Statements of Stockholders' Equity (Deficit) for the three years ended December 31, 2008		F-33
Notes to Consolidated Financial Statements		F-34
Supplementary Data (Unaudited): Quarterly Financial Data (Unaudited)		F-83
SCHEDULES
Consolidated Financial Statement Schedule: Schedule II—Valuation and Qualifying Accounts		S-1

F-1

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Overview

Building Materials Corporation of America or BMCA, a wholly-owned subsidiary of BMCA Holdings Corporation, was formed on January 31, 1994 to acquire the operating assets and certain liabilities of GAF Building Materials Corporation, whose name was changed to G-I Holdings Inc., our indirect parent. G-I Holdings Inc. is a wholly-owned subsidiary of G Holdings Inc. See Note 1 to our Consolidated Financial Statements. Unless otherwise indicated by the context, "we," "us" and "our" refer to Building Materials Corporation of America and its consolidated subsidiaries.

To facilitate administrative efficiency, effective October 31, 2000, GAF Corporation, the former indirect parent of BMCA, merged into its direct subsidiary, G-I Holdings Inc. G-I Holdings Inc. then merged into its direct subsidiary, G Industries Corp., which in turn merged into its direct subsidiary, GAF Fiberglass Corporation. In that merger, GAF Fiberglass Corporation changed its name to GAF Corporation. Effective November 13, 2000, GAF Corporation (formerly known as GAF Fiberglass Corporation) merged into its direct subsidiary, GAF Building Materials Corporation, whose name was changed in the merger to G-I Holdings Inc. G-I Holdings Inc. is now an indirect parent of BMCA and BMCA's direct parent is BMCA Holdings Corporation. References herein to "G-I Holdings" mean G-I Holdings Inc. and any and all of its predecessor corporations, including GAF Corporation, G-I Holdings Inc., G Industries Corp., GAF Fiberglass Corporation and GAF Building Materials Corporation.

On February 22, 2007, which we refer to as the date of acquisition, a subsidiary of Building Materials Corporation of America acquired approximately 90% of the outstanding common shares of ElkCorp, which we refer to as Elk, a Dallas, Texas-based manufacturer of roofing products and building materials. The remaining common shares of Elk were acquired on March 26, 2007, resulting in Elk becoming an indirect wholly-owned subsidiary of BMCA. See Acquisition.

We are a leading national manufacturer and marketer of a broad line of asphalt and polymer-based roofing products and accessories for the residential and commercial roofing markets. We also manufacture specialty building products and accessories for the professional and do-it-yourself remodeling and residential construction industries. As of December 31, 2008, we had 29 strategically located manufacturing facilities currently operating across the United States. Our manufacturing facilities include: 14 asphalt roofing manufacturing facilities, three roofing accessory plants, two thermoplastic polyolefin plants, one glass fiber manufacturing plant, two glass mat manufacturing plants, one glass mat and asphalt roofing manufacturing facility, one fiber- cement shingle and siding plant, one liquid roofing membrane and adhesive plant, one injection molding attic ventilation plant, one attic ventilation and air distribution product plant, one chromium- chemical coating plant and one composite-decking plant. In February 2009, we announced the temporary shutdown of our Shafter, California glass mat manufacturing facility and our Nashville, Tennessee glass fiber manufacturing facility.

Our products are marketed in three groups: residential roofing, commercial roofing and specialty building products and accessories.

Residential Roofing

We are a leading national manufacturer of a complete line of residential roofing products. In February 2007, we acquired Elk, which we believe strategically positioned us for growth in the roofing industry and building products market. We also believe the Elk acquisition has allowed us to build on our market leadership position and create comprehensive market-leading product offerings. Our

F-2

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

principal lines of residential roofing shingles are the Timberline® series, the Sovereign® series, Designer Lifetime Shingles and Specialty Shingles. The Timberline series includes the Timberline Prestique® 30 High Definition®, Timberline Natural Shadow™, Timberline Prestique 40, Timberline Prestique Lifetime and Timberline Prestique Grande® shingles. Our designer lifetime shingles include the Slateline®, Grand Slate™, Grand Sequoia®, Grand Canyon™, Country Mansion®, Capstone®, and Camelot® shingles. We sell specialty roofing products under the TruSlate™ product line, which offers a patented genuine slate roofing system. We supply the major components necessary to install a complete roofing system from underlayments to attic ventilation products and accessories, under our Roof System Solution. We have improved our sales mix of residential roofing products by increasing our emphasis on laminated shingles and accessory products (the Timberline series, designer lifetime shingles and TruSlate), which are generally sold at higher prices and more attractive profit margins than our standard strip shingle products (the Sovereign series). We believe, based on unit sales, that we are the largest manufacturer of residential roofing shingles in the United States.

Commercial Roofing

We manufacture a full line of modified bitumen and asphalt built-up roofing products, thermoplastic polyolefin products, liquid applied membrane systems and roofing accessories for use in the application of commercial roofing systems. We also market thermoplastic single-ply commercial roofing products, which address the important and growing single-ply segment of the commercial roofing market. We believe that, based on the combined unit sales of asphalt built-up roofing products and modified bitumen products, we are the largest manufacturer of these products in the United States.

We sell modified bitumen products under the Ruberoid® trademarks. Modified bitumen products are used in new and re-roofing applications or in combination with glass membranes in GAF CompositeRoof™ systems. Modified bitumen systems provide an alternative to conventional built-up roofing systems, including ease of installation and maintenance.

Over the past five years, over 80% of industry sales of both residential and commercial roofing products were for re-roofing, as opposed to new construction. As a result, we believe our exposure and the roofing industry's exposure to cyclical downturns in the new construction market, as currently being experienced, are substantially lower than for other building material manufacturers. We expect that future demand for residential re-roofing will continue to increase as the existing housing stock ages and as homeowners upgrade from standard strip roofing shingles to premium laminated shingles for enhanced aesthetics and durability. We also expect commercial roofing demand to rise as construction of new commercial facilities increases and existing buildings age.

Our business relies on the availability of reasonably-priced raw materials and energy for the production of our products. Shortages of these products and increases in their prices, specifically with regard to asphalt, which is correlated to increases in the price of crude oil, have occurred from time to time and may occur again in the future. To mitigate the effect of the petroleum-based and other cost increases, we will attempt to pass on future cost increases from our suppliers as needed, although no assurances can be provided that these price increases will be accepted in the marketplace.

Our net sales for 2008 were $2,748.9 million, which included $6.1 million of restructuring-related sales discounts compared with net sales of $2,310.1 million in 2007, which included the net sales of Elk from the date of acquisition and $15.1 million of restructuring-related sales discounts. We had income before interest expense and income taxes of $237.8 million in 2008, which included $73.2 million of restructuring and other expenses, compared with a loss before interest expense and income taxes of

F-3

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

$27.4 million in 2007, which included the operating results of Elk since the date of acquisition and $181.0 million of restructuring and other expenses. See Results of Operations below.

Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an ongoing basis, we evaluate our estimates, including but not limited to those related to customer incentives, doubtful accounts, inventory valuation, product warranty claims, extended and enhanced product warranties, environmental liabilities, the carrying value of goodwill, the carrying value of long-lived tangible and intangible assets, pensions and other post-employment benefits and contingent liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. In the opinion of our management, the consolidated financial statements herein contain all adjustments necessary to present fairly our financial position and our results of operations and cash flows for the periods presented. We do not anticipate any changes in management estimates that would have a material impact on our operations, liquidity or capital resources, subject to the matters discussed in Note 18 to Consolidated Financial Statements. We believe the following critical accounting policies are the most important to the portrayal of our financial condition and results of operations and require our management's more significant judgments and estimates in the preparation of our consolidated financial statements.

Revenue Recognition

Revenue is recognized at the time products are shipped to the customer. Products are generally shipped Freight on Board, or FOB, shipping point. Title and risk of loss pass to the customer at the time of shipment.

Customer Incentives

We maintain allowances for customer incentives and volume rebates resulting from promotional programs to certain of our customers. The customer incentives and volume rebates are recorded as a reduction in gross sales, and accruals are recorded based on customers' purchase levels of specific products and the promotional programs related to these products. Management evaluates customer performance against these incentives and volume rebate programs from time to time. If adjustments to our estimates are required, additional allowances or reductions to the customer incentive reserves would be recorded.

Allowance for Doubtful Accounts

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Management continuously assesses the financial condition of our customers and the markets in which these customers participate and adjusts credit limits or the allowance for doubtful accounts based on this periodic review, which includes a detailed analysis of financial statements and performance against key financial performance metrics and historical financial information. If the financial condition of our customers were to deteriorate, resulting in their inability

F-4

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

to make payments, our ability to collect on accounts could be negatively impacted, in which case additional allowances may be required.

Inventories

Inventories are stated at the lower of cost or market. The LIFO (last-in, first-out) method is used to determine cost for asphalt-based products used to produce our products, which we believe provides a more appropriate matching of revenue and expense. All other inventories are valued on the FIFO (first-in, first-out) method. We adjust our inventories for estimated obsolescence or unmarketable inventories equal to the difference between the cost of inventories and their estimated market value based upon assumptions related to future demand and market conditions. If actual market conditions differ from those projected by management, additional inventory adjustments may be required. Sales of inventories and the resulting receivables are included in working capital items in the consolidated statement of cash flows.

Long-Lived Asset Impairment

We follow the provisions of Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which we refer to as SFAS No. 144, and was issued by the Financial Accounting Standards Board, which we refer to as FASB. SFAS No. 144 addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed. For purposes of recognizing and measuring impairment of long-lived assets, we evaluate assets of our associated facilities because this is the lowest level of independent cash flows ascertainable to evaluate impairment. We review long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. For long-lived assets to be held and used, an impairment exists when the carrying amount of the asset exceeds the estimated undiscounted cash flows. Any resulting impairment is measured based on the fair value of the related asset. Fair value is determined based on future projected demand and estimated discounted cash flows.

During the years ended December 31, 2008 and 2007, we closed several of our manufacturing facilities, in addition to our previously closed manufacturing facilities. The closing of these manufacturing facilities in 2008 and 2007 was primarily due to additional manufacturing capacity resulting from our acquisition of Elk and reduced market demand, and such plants may be re-opened in the future as industry demand rises. For the years ended December 31, 2008 and 2007, we recognized a $0 and $97.0 million SFAS No. 144 impairment loss, respectively, related to the above-mentioned facilities. See Notes 2 and 5 to the Consolidated Financial Statements.

Goodwill

In accordance with the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets", or SFAS No. 142, goodwill is not amortized but is subject to at least an annual assessment for impairment or more frequently if circumstances indicate a possible impairment.

We evaluated the recoverability of goodwill for our roofing products and specialty building products and accessories reporting units. Our methodology included evaluations using estimated future discounted cash flows, multiples of net sales and multiples of earnings before interest, taxes, depreciation and the amortization of intangibles and other assets, which we refer to as EBITDA. Our analysis was completed for each of the reporting units to which the goodwill relates. If the estimated

F-5

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

range of fair values from the methodologies employed are less than the carrying value of the related reporting unit, impairment losses for goodwill are charged to results of operations. In determining the estimated future discounted cash flows, we considered projected future levels of income, future business trends and market and economic conditions. Our analysis related to multiples of net sales and EBITDA are based on related industry data. We prepared a SFAS No. 142 impairment analysis at December 31, 2008 and 2007, and determined that no impairment existed. See Note 6 to the Consolidated Financial Statements.

Intangible Assets

We account for our intangible assets in accordance with the provisions of SFAS No. 142. SFAS No. 142 requires disclosure of information relating to intangible assets subsequent to their acquisition that was not previously reported, which includes disclosure concerning the changes in the carrying amount of intangible assets by major intangible asset class for those assets subject to amortization and for those not subject to amortization. SFAS No. 142 also requires disclosure related to actual year-to-date intangible asset amortization expense and the estimated intangible asset amortization expense for each of the next five years. As of December 31, 2008, we have not recorded any impairment losses related to our intangible assets. See Note 7 to the Consolidated Financial Statements.

Hedging Activity

Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which we refer to as SFAS No. 157, which clarifies the definition of fair value, establishes a framework for measuring fair value and expands the disclosures on fair value measurements and is effective for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position FSP No. 157-2 "Partial Deferral to the Effective Date of Statement 157," which we refer to as FSP No. 157-2, which is effective for fiscal years beginning after November 15, 2008 and defers the application of SFAS No. 157 for certain non-financial assets and non-financial liabilities and further clarifies the principles in SFAS No. 157 on the fair value measurement of liabilities. We adopted the provisions of SFAS No. 157 during our fiscal year ended December 31, 2008 and currently are assessing the impact of the adoption of FSP No. 157-2.

SFAS No. 157 establishes a valuation hierarchy that prioritizes the inputs used to measure fair value based on three defined levels or criteria. The hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the reporting entity's market assumptions. The three levels of inputs that may be used to measure fair value are as follows:

•: Level 1—Quoted prices for identical instruments in active markets;
•: Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose significant inputs are observable: and

F-6

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

•: Level 3—Instruments whose significant inputs are unobservable and for which estimates of fair value are determined using related market data.

Interest Rate Swap Agreements

In March 2007, we entered into forward-starting interest rate swap agreements, with an effective date of April 23, 2007 and a maturity date of April 23, 2012. These swaps were initiated in order to hedge the interest rate risk associated with our $975.0 million Term Loan, which we refer to as our Term Loan, and they are structured that we receive interest based on the three-month Eurodollar Rate, which we refer to as LIBOR and pays interest on a fixed rate basis. In October 2007, we entered into additional interest rate swaps related to our Term Loan with an effective date of October 23, 2007 and a maturity date of October 23, 2012 under similar terms.

We account for our hedging activity in accordance with SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities," which we refer to as SFAS No. 133, which requires a company to measure hedge effectiveness by assessing, on a quarterly basis, the historical and probable future of high correlation of changes in the fair value of the hedged item. Any ineffective portion is recorded in our statement of operations.

As of December 31, 2008, based on SFAS No. 157 Level 2 inputs, we recognized a fair value liability on our interest rate swaps of $70.5 million, after discounting the liability to reflect both the counterparty and credit default risks associated with our swaps, to other non-current liabilities (see table below), while the offset was recognized to other comprehensive loss, net of tax of $26.8 million. During 2008, we recorded $12.8 million of net interest expense related to our swaps in our statement of operations. For fiscal year ending December 31, 2009, we estimate approximately $18.2 million will be reclassified from accumulated other comprehensive loss and recognized into interest expense in our statement of operations, subject to changes in the LIBOR rate. This estimated amount will be approximately offset by lower interest expense associated with our Term Loan. Additional future amounts may be reclassified from accumulated other comprehensive loss to interest expense if any portion of our swaps become ineffective. We do not anticipate that any amount recorded in accumulated other comprehensive loss related to our swaps will be reclassified during our fiscal year ending December 31, 2009 due to ineffectiveness.

Treasury Locks

In July 2007, we entered into treasury locks with a maturity date of July 31, 2012, as additional hedging instruments against our Term Loan. On October 30, 2007, we settled our open treasury lock hedging positions, which resulted in a pre-tax fair value loss and cash settlement of approximately $4.9 million, which is being amortized into our statement of operations over the life of the Term Loan pursuant to SFAS No. 133. We amortized $0.8 million of the loss related to our treasury locks into interest expense in our statement of operations during our fiscal year ended December 31, 2008 and will amortize $0.8 million annually through July 2012.

Interest Rate Swap Valuation

We value our interest rate swap agreements based on Level 2 inputs from model derived valuations whose significant inputs are quoted LIBOR contracts, Eurodollar futures and on-the-run swap markets. SFAS No. 157 requires that the valuation of derivative assets and liabilities must take into account the parties' nonperformance risk. We discounted the value of our derivative liabilities

F-7

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

based on the credit spread for its debt as determined by the market trading price. See Note 13 to Consolidated Financial Statements.

Product Warranty Claims

We provide certain limited warranties covering most of our residential roofing products for periods generally ranging from 20 to 50 years, although certain of our product lines provide for a lifetime limited warranty. We also offer certain limited warranties of varying duration covering most of our commercial roofing products. Most of our specialty building products and accessories carry limited warranties for periods generally ranging from 5 to 20 years, with lifetime limited warranties on certain products. The accrual for product warranty claims is estimated on the basis of historical and projected claims activity, as well as other factors. The accuracy of the estimate of additional costs is dependent on both the number and cost of future claims submitted during the warranty periods. We believe that the accruals established for estimated probable future product warranty claims are adequate. If actual claims differ from these estimates, adjustments to this accrual may be required.

Deferred Revenue and Extended Product Warranty

We offer extended warranty contracts on sales of our commercial roofing products. The life of these commercial warranties range from 10 to 20 years. In addition, we offer a number of enhanced warranties on certain of our residential roofing products. These enhanced warranties are the "Golden Pledge™" and "Peace of Mind™" warranty programs. All revenue for the sale of these warranty programs is deferred and amortized on a straight-line basis over the average life of these warranty programs, which is in accordance with the accounting prescribed by FASB Technical Bulletin No. 90-1 "Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts". Incremental direct costs associated with the acquisition of the extended warranty contracts are capitalized and amortized on a straight-line basis over the average life of these warranty programs. Current costs of services performed related to claims paid under these warranty programs are expensed as incurred. Our analysis of these warranty programs as of December 31, 2008 indicated that deferred revenue is in excess of deferred costs and accordingly, no loss was recognized. However, if the total expected costs of providing services under these warranty programs exceed deferred revenues less deferred costs, then a loss would be recognized.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to offset any deferred tax asset if it is more-likely-than-not that some or all of the deferred tax asset will not be realized. The determination of the amount of a valuation allowance to be provided on recorded deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income and (3) the impact of tax planning strategies. In assessing the need for a valuation allowance, we consider past operating results, projections of future taxable income and the feasibility of ongoing tax planning strategies. The

F-8

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

projections of future taxable income include a number of estimates and assumptions regarding our volume, pricing and costs. Additionally, valuation allowances related to deferred tax assets can be impacted by changes to tax laws. We are party to a tax sharing agreement, which we refer to as the Tax Sharing Agreement. See Note 9 to the Consolidated Financial Statements.

We use judgment in determining income tax provisions under SFAS No. 109 "Accounting for Income Taxes," which we refer to as SFAS No. 109, and in evaluating our tax positions. Additional provisions for income taxes are established when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum probability threshold as defined by FASB Interpretation No., which we refer to as FIN, No. 48, "Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109", which we refer to as FIN 48, adopted by us on January 1, 2007, which is a tax position that is more-likely-than-not to be sustained upon examination by the applicable taxing authority. We and our subsidiaries are examined by various Federal and state tax authorities. We regularly assess the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of our provision for income taxes. We continually assess the likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a revision become known.

In August 2008, we paid $3.7 million in settlement of an outstanding state income tax matter related to tax years 1999 through 2006. In October 2008, the Company was assessed interest and penalties related to the tax matter, which amount we paid during our fourth quarter ended December 31, 2008. The interest and penalties did not have a material effect on our statement of operations.

Environmental Liabilities

We accrue environmental costs when it is probable that we have incurred a liability and the expected amount can be reasonably estimated and, review on an ongoing basis, our estimated environmental liabilities. The amount accrued reflects our assumptions about remedial requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potential responsible parties at multi-party sites and the number and financial viability of other potentially responsible parties. Adverse decisions or events, particularly as to increases in remedial costs, discovery of new contamination, assertion of natural resource damages, and the liability and the financial responsibility of our insurers and of the other parties involved at each site and their insurers, could cause us to increase our estimate of liability in respect of those matters. It is not currently possible to estimate the amount or range of any additional liabilities or whether any liabilities exist.

Pension and Other Postemployment Benefits

We maintain defined benefit plans that provide eligible employees with retirement benefits. In addition, while we generally do not provide postretirement medical and life insurance benefits, we subsidize life insurance benefits for certain employees and retirees. The costs and obligations related to these benefits reflect our assumptions related to general economic conditions (particularly interest rates), expected return on plan assets and rate of compensation increases for employees. We set the discount rate assumption annually for our retirement-related benefit plans at the measurement dates to reflect the yield of high-quality fixed-income debt instruments. The expected long-term rate of return on assets is derived from a detailed periodic study conducted by our actuaries and our senior

F-9

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

executives. The study includes a review of anticipated future long-term performance of individual asset categories. While the study gives appropriate consideration to recent plan performance and historical returns, the assumption is primarily a long-term prospective rate. Our discount rate as of December 31, 2008 and 2007 for determining projected benefit obligations was 6.25% and 6.25%, respectively. A 25 basis point increase or decrease in the discount rate assumption would result in a plus or minus $0.2 million impact on pension expense and a plus or minus $1.5 million impact on the projected benefit obligation. Our expected long-term rate of return on assets assumption for our retirement plans was 9.5% in 2008 and 2007, respectively. In addition, a 25 basis point increase or decrease in the expected long-term rate of return on assets assumption would result in a plus or minus $0.1 million impact on pension expense.

The cost of providing plan benefits also depends on demographic assumptions including retirements, mortality, turnover and plan participation. If actual experience differs from these assumptions, the cost of providing these benefits could increase or decrease.

Results of Operations

Roofing product sales is our dominant business, typically accounting for approximately 95% of our consolidated net sales. The main drivers of our roofing business include: the nation's aging housing stock; existing home sales; new home construction; larger new homes; home ownership rates; and extreme weather and energy concerns. Our roofing business is also affected by raw material costs, including asphalt and other petroleum-based raw materials, as well as energy, and transportation and distribution costs. Our improved 2008 performance resulted principally from synergies from the successful integration of the Elk acquisition.

2008 Compared with 2007

We recorded net income in 2008 of $51.4 million compared to a net loss of $134.5 million for 2007. Our reported net income for 2008 included $47.8 million of after-tax ($73.2 million pre-tax) restructuring and other expenses, of which $4.0 million after-tax ($6.1 million pre-tax) was included as a reduction in net sales and $17.5 million after-tax ($26.9 million pre-tax) was included in cost of products sold related to the integration of Elk operations. Our reported net loss in 2007 included $116.6 million of after-tax ($181.0 million pre-tax) restructuring and other expenses, of which $9.7 million after-tax ($15.1 million pre-tax) was included as a reduction in net sales, $15.7 million after-tax ($24.3 million pre-tax) was included in cost of products sold and $14.9 million of after-tax ($23.2 million pre-tax) debt restructuring costs also related to the acquisition. Included in restructuring and other expenses are plant closing expenses related to the closure of several manufacturing facilities along with the write-down of certain plant assets related to the closed facilities in 2007, integration-related costs and the write-down of selected inventories. Excluding restructuring and other expenses, net income for 2008 was $99.2 million compared to a net loss for 2007 of $3.0 million after also adjusting for the $23.2 million of debt restructuring costs included in interest expense. The increase in net income for 2008 was primarily attributable to higher income before interest expense and income taxes.

F-10

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Net sales for 2008 were $2,748.9 million, which included $6.1 million of restructuring-related sales discounts, compared with net sales of $2,310.1 million in 2007, which included $15.1 million of restructuring-related sales discounts. The increase in net sales for 2008 was primarily due to an increase in net sales of residential roofing products and commercial roofing products due to higher average selling prices and slightly higher unit volumes. In addition, the increase in 2008 net sales was also due to 2008 residential roofing products net sales including a full year of Elk net sales compared with 2007 residential roofing products net sales, which only included Elk net sales since the date of acquisition. The higher average selling prices were implemented to mitigate significant increases in raw material costs, including asphalt, and higher transportation costs.

Income before interest expense and income taxes for 2008 was $237.8 million compared to a loss before interest expense and income taxes of $27.4 million for 2007. Our reported income before interest expense and income taxes for 2008 included $73.2 million of restructuring and other expenses, of which $6.1 million was included as a reduction in net sales and $26.9 million was included in cost of products sold. Our reported loss before interest expense and income taxes for 2007 included $181.0 million of restructuring and other expenses, of which $15.1 million was included as a reduction of net sales and $24.3 million was included in cost of products sold. Excluding these items, 2008 income before interest expense and income taxes was $311.0 million compared with 2007 income before interest expense and income taxes of $153.6 million. The increase in income before interest expense and income taxes for 2008 was primarily due to synergies from the successful integration of the Elk acquisition and lower manufacturing costs, as well as higher average selling prices of both residential and commercial roofing products and slightly higher unit volumes. These benefits were partially offset by higher raw material costs, including asphalt, and higher transportation costs.

Interest expense for 2008 decreased to $158.9 million compared with $181.4 million for 2007, which included $23.2 million of debt restructuring costs related to the acquisition of Elk. The debt restructuring costs in 2007 were comprised of tender premiums and the write-off of the remaining deferred financing fees and discounts associated with certain of the then outstanding 8% Senior Notes due 2007, or 2007 Notes, and 8% Senior Notes due 2008, or 2008 Notes, of BMCA and all of the then outstanding senior notes of Elk. Excluding the impact of these debt restructuring costs, interest expense for 2007 was $158.2 million.

Business Segment Information

Net Sales. Net sales of roofing products increased to $2,612.9 million for 2008, which included $6.1 million of restructuring-related sales discounts compared with $2,167.7 million for 2007, which included $15.1 million of restructuring-related sales discounts. The increase in 2008 net sales of roofing products was primarily due to an increase in net sales of residential roofing products and commercial roofing products due to higher average selling prices and slightly higher unit volumes. In addition, the increase in 2008 net sales was also due to 2008 residential roofing products net sales including a full year of Elk net sales as compared with 2007 residential roofing products net sales, which only included Elk net sales since the date of acquisition. The higher average selling prices were implemented to mitigate significant increases in raw material costs, including asphalt, and higher transportation costs. Net sales of specialty building products and accessories decreased to $136.0 million for 2008 compared with $142.4 million for 2007, which included net sales of specialty building products related to Elk from the date of acquisition. The decrease in 2008 was due to softer new construction and remodeling demand.

F-11

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Gross Margin. Our gross margin was $770.9 million or 28.0% of net sales for 2008 compared with $614.5 million or 26.6% of net sales for 2007. Included in our gross margin for 2008 were $33.0 million of restructuring and other expenses, of which $6.1 million was included as a reduction in net sales and $26.9 million was included in cost of products sold. Included in our gross margin for 2007 were $39.4 million of restructuring and other expenses, of which $15.1 million was included as a reduction in net sales and $24.3 million was included in cost of products sold. The increase in our gross margin is primarily due to synergies from the successful integration of the Elk acquisition and lower manufacturing costs, as well as higher average selling prices of both residential and commercial roofing products and slightly higher unit volumes. These benefits were partially offset by higher raw material costs, including asphalt.

2007 Compared with 2006

We recorded a net loss in 2007 of $134.5 million compared with net income of $38.7 million for 2006. The increase in reported net loss for 2007 was primarily attributable to approximately $119.9 million of higher interest expense, as well as restructuring and other expenses due to the acquisition of Elk. Our net loss in 2007 included $116.6 million of after-tax ($181.0 million pre-tax) restructuring and other expenses, of which $9.7 million after tax ($15.1 million pre-tax) was included as a reduction in net sales and $15.7 million after tax ($24.3 million pre-tax) was included in cost of products sold related to the integration of Elk operations; and $14.9 million of after-tax ($23.2 million pre-tax) debt restructuring costs also related to the acquisition. Included in restructuring and other expenses are plant closing expenses related to the closure of several manufacturing facilities together with the write-down of plant assets at these facilities, integration-related costs and the write-down of selected inventories. Excluding these items, net loss for 2007 was $3.0 million, which included Elk's operations from the date of acquisition.

Net sales for 2007 were $2,310.1 million as compared with $1,969.2 million in 2006. The increase in net sales for 2007 was primarily attributable to the acquisition of Elk, which was partially offset by lower net sales of residential roofing products and commercial roofing products driven by lower unit volumes resulting from softer market demand and $15.1 million of restructuring-related sales discounts.

We had a loss before interest expense and income taxes for 2007 of $27.4 million compared with income before interest expense and income taxes of $124.8 million in 2006. Our loss before interest expense and income taxes in 2007 included $181.0 million of restructuring and other expenses, of which $15.1 million was included as a reduction in net sales and $24.3 million was included in cost of products sold. Excluding these items, 2007 income before interest and income taxes was $153.6 million, which included the results of operations of Elk from the date of acquisition. The increase in income before interest expense and income taxes for 2007 was positively affected by the operating results of Elk and lower selling, general and administrative expenses, mostly due to a decline in volume-related distribution costs, partially offset by a decline in net sales of residential roofing products.

Interest expense in 2007 increased to $181.4 million as compared with $61.5 million in 2006. Interest expense in 2007 included $23.2 million of debt restructuring costs, which consisted of the tender premiums and write-off of the remaining deferred financing fees and discounts associated with certain of our then outstanding 2007 Notes and 2008 Notes of BMCA and all of the then outstanding senior notes of Elk, all of which were redeemed in the first quarter of 2007. Excluding the impact of the debt restructuring costs, interest expense for 2007 was $158.2 million. The increase in interest expense for 2007 was primarily due to higher average borrowings and a slightly higher average interest rate, due to the acquisition of Elk.

F-12

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Business Segment Information

Net Sales. Net sales of roofing products increased to $2,167.7 million for 2007, which included net sales of roofing products related to Elk from the date of acquisition and $15.1 million of restructuring-related sales discounts, compared with $1,893.6 million for 2006. The increase in 2007 net sales of roofing products was primarily attributable to the acquisition of Elk, which was partially offset by lower net sales of residential roofing products and commercial roofing products driven by lower unit volumes resulting from softer market demand and $15.1 million of restructuring-related sales discounts. Net sales of specialty building products and accessories increased to $142.4 million for 2007, which included net sales of specialty building products and accessories related to Elk from the date of acquisition as compared with $75.6 million for 2006.

Gross Margin. Our gross margin was $614.5 million for 2007 or 26.6% of net sales as compared with $572.8 million or 29.1% of net sales for 2006. Included in our gross margin for 2007 was $15.1 million of restructuring-related sales discounts included as a reduction in net sales, $24.3 million of restructuring and other expenses, which were included in cost of products sold and gross margin related to Elk from the date of acquisition. Our gross margin was positively affected by the gross margin related to Elk, which was more than offset by a decrease in net sales of residential and commercial roofing products primarily driven by lower unit volumes.

Liquidity and Financial Condition

Cash Flows and Cash Position

Sales of roofing products and specialty building products and accessories in the northern regions of the United States generally decline in the late fall and winter months due to cold weather. In addition, extreme weather conditions can result in higher customer demand during our peak operating season depending on the extent and severity of the damage from these extreme weather conditions. Due to the seasonal demands of our business together with extreme weather conditions, we generally have negative cash flows from operations during the first six months of our fiscal year. Our negative cash flows from operations are primarily driven by our cash invested in both accounts receivable and inventories to meet these seasonal operating demands. Generally, in the third and fourth quarters of our fiscal year, our cash flows from operations become positive for each quarter, as our investment in inventories and accounts receivable no longer continues to increase, as is customary in the first six months of our fiscal year. Our seasonal working capital needs, together with our debt service obligations, capital expenditure requirements and other contracted arrangements, adversely impact our liquidity during this period. We rely on our cash and cash equivalents on hand and our $600.0 million Senior Secured Revolving Credit Facility due February 2012, which we refer to as our Senior Secured Revolving Credit Facility (see Debt Instruments, Financial Covenants and Restrictions below), to support our overall cash flow requirements during these periods. We expect to continue to rely on our cash and cash equivalents on hand and external financings to maintain operations over the short and long-term and to continue to have access to the financing markets, subject to the then prevailing market terms and conditions.

Net cash inflow from operating and investing activities was $114.5 million during 2008, including $149.2 million of cash provided by operations, $31.1 million of proceeds from the sale of property, plant and equipment, partially offset by the reinvestment of $65.8 million for capital programs.

Cash invested in additional working capital totaled $75.9 million during 2008, reflecting a decrease in total accounts receivable of $11.1 million due to our increased operating performance offset by the

F-13

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

seasonality of our business, an $11.8 million decrease due to the collection of an income tax receivable, a $45.7 million increase in inventories to meet our seasonal operating demands, a $3.4 million increase in other current assets, a $26.6 million increase in accounts payable and accrued liabilities and an increase of $76.3 million in payments for restructuring and other expenses. The net cash provided by operating activities also included a $6.6 million net increase in the payable to related parties/parent corporations, primarily due to a seasonal increase in amounts due under our long-term granule supply agreements with an affiliated company and a net decrease in our Federal income tax receivable pursuant to our Tax Sharing Agreement with our parent corporation. In addition, net cash provided by operating activities also included $73.2 million in restructuring and other expenses, which included $26.9 million in cost of products sold and $6.1 million of restructuring-related sales discounts, which were included as a reduction of net sales (see Restructuring and Other Expenses). Cash provided by operating activities also included a $10.4 million increase in other assets, primarily related to a $4.3 million increase in deferred warranty-related program costs, net of amortization and a $5.2 million increase in capitalized software; a $3.7 million decrease in other liabilities, which is primarily related to a $6.9 million decrease in our uncertain tax liability provision, primarily due to a $6.0 million payment in settlement of an outstanding state income tax matter, which included interest and penalties, partially offset by a $4.0 million increase in deferred warranty-related program revenues, net of amortization.

Net cash used in financing activities totaled $83.8 million during 2008, including $1,083.0 million of aggregate proceeds from the issuance of long-term debt, related to 2008 cumulative borrowings under our Senior Secured Revolving Credit Facility. Financing activities also included $1,147.7 million in aggregate repayments of long-term debt, of which $1,129.0 million related to 2008 cumulative repayments under our Senior Secured Revolving Credit Facility, $9.7 million related to our Term Loan, $4.9 million related to our outstanding 2008 Notes and $3.1 million related to our Chester, South Carolina loan obligation. In addition, financing activities included a $4.8 million repurchase of industrial development revenue bond certificates, aggregate principal payments of $6.0 million on our capital leases, $7.5 million in cash dividends paid to our parent corporation, $0.2 million in distributions and loans to our parent corporation and $0.6 million in financing fees and expenses primarily related to prior debt financings.

As a result of the factors described above related to 2008, cash and cash equivalents increased by $30.7 million during 2008 to $37.0 million.

Acquisition

On February 22, 2007, a subsidiary of BMCA acquired approximately 90% of Elk common shares at a purchase price of $43.50 per common share. On March 26, 2007, we acquired the remaining Elk common shares in a second step merger in exchange for the right to receive $43.50 per share in cash, which resulted in Elk becoming an indirect wholly-owned subsidiary of BMCA. We completed the acquisition at a purchase price of approximately $945.6 million, net of the repayment of $195.0 million of the then outstanding Elk senior notes, which were assumed in connection with the acquisition and were repaid in March 2007.

The Elk acquisition was accounted for under the purchase method of accounting as prescribed by SFAS No. 141 "Business Combinations," which we refer to as SFAS No. 141, which requires the total purchase price to be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the date of acquisition, with amounts exceeding their fair value being recorded as goodwill. During the first quarter ended March 30, 2008, we completed our purchase price allocation of

F-14

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

the assets acquired and liabilities assumed from Elk (see table below). The operating results of Elk are included in our results of operations from the date of acquisition.

The following table represents the final fair values of assets acquired and liabilities assumed related to the acquisition of Elk as of the date of acquisition with amounts paid in excess of their fair values being recorded as goodwill.


Goodwill	$	588,850

Intangible assets	$	214,420

Total assets acquired	$	1,411,590
Total liabilities assumed		(465,941	)

Net assets acquired	$	945,649

During the second quarter of 2007, we initiated a restructuring plan, which we refer to as the 2007 Restructuring Plan, which we formulated in connection with the acquisition of Elk. See Restructuring and Other Expenses below. Also, in connection with the Elk acquisition and pursuant to SFAS No. 141 and Emerging Issues Task Force, which we refer to as EITF, No. 95-3 "Recognition of Liabilities in Connection with a Purchase Business Combination," we identified $8.7 million in purchase accounting adjustments, which related to employee severance payments to former Elk employees and lease termination expenses. As of December 31, 2008 and 2007, we paid an aggregate of $2.9 and $2.5 million for employee severance costs, respectively, and $1.6 and $0.6 million for lease termination expenses, respectively. As of December 31, 2008, we expect to make approximately $4.2 million of aggregate lease termination payments through 2019. Our employee severance payments included the termination of approximately 130 Elk employees, including certain management positions, in the manufacturing and selling and administrative areas.

Restructuring and Other Expenses

The 2007 Restructuring Plan was created to eliminate cost redundancies recognized due to the acquisition of Elk and to reduce our current cost structure. The 2007 Restructuring Plan has been fully implemented as of December 31, 2008. We account for our restructuring activities in accordance with SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" and EITF No. 96-9 "Classification of Inventory Markdowns and Other Costs Associated with Restructuring".

2007 Restructuring and Other Expenses

In connection with the acquisition of Elk, we identified $191.9 million in restructuring and other expenses, of which $97.0 million related to property, plant and equipment write-downs at certain existing manufacturing facilities and $25.1 million of plant closing expenses. Restructuring and other expenses also included $2.0 million in employee severance payments and $67.8 million in integration-related expenses, which primarily consisted of $24.3 million of inventory- related write-downs, $15.1 million of restructuring-related sales discounts, $1.4 million of lease termination expenses and $27.0 million of other integration expenses.

We recorded $181.0 million of the aforementioned restructuring and other expenses in our statement of operations during our fiscal year ended December 31, 2007, of which $15.1 million was

F-15

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

reflected as a reduction in net sales due to restructuring-related sales discounts, $24.3 million was charged to cost of products sold and $141.6 million was charged to restructuring and other expenses.

2008 Restructuring and Other Expenses

We identified an additional $64.1 million of restructuring and other expenses in our fiscal year ended December 31, 2008, which included $14.2 million of plant closing expenses, $3.3 million in employee severance payments and $46.6 million in integration-related expenses. Integration-related expenses primarily consisted of $26.9 million of inventory write-downs, $6.1 million of restructuring-related sales discounts and $13.6 million of other integration expenses.

We recorded $73.2 million of the identified restructuring and other expenses in our statement of operations during our fiscal year ended December 31, 2008, of which $6.1 million was reflected as a reduction in net sales due to restructuring-related sales discounts, $26.9 million was charged to cost of products sold and $40.2 million was charged to restructuring and other expenses. We expect to incur the remaining $1.8 million of identified integration and other expenses and to make the remaining cash payments related to our accrual when they are required.

The table below details our restructuring and other expense accruals and the charges made against these accruals during 2008:

Restructuring and Other Expenses	Plant Closing Expenses			Employee Severance Payments			Integration Expenses			Total

	(Thousands)
Beginning balance, as of December 31, 2007	$	2,905		$	—		$	10,945		$	13,850
Current period costs, net		17,791			3,259			52,169			73,219
Cash payments		(23,409	)		(3,259	)		(49,672	)		(76,340	)
Amount related to property, plant and equipment for asset adjustments		6,228			—			(354	)		5,874
Amount charged to write-off inventory		(63	)		—			(6,735	)		(6,798	)
Non-cash items		—			—			(1,148	)		(1,148	)

Ending balance, as of December 31, 2008	$	3,452		$	—		$	5,205		$	8,657

Our aggregate employee severance payments included the termination of approximately 100 BMCA employees, including certain management positions, in the manufacturing and selling and administrative areas.

Debt Instruments, Financial Covenants and Restrictions

On February 22, 2007, BMCA and certain of its subsidiaries entered into the Senior Secured Revolving Credit Facility, the Term Loan and a $325.0 million Bridge Loan Facility, which was subsequently replaced by a $325.0 million Junior Lien Term Loan Facility, which we refer to as the Junior Lien Term Loan, on March 15, 2007, and collectively with the Senior Secured Revolving Credit Facility and the Term Loan we refer to as the Senior Secured Credit Facilities. The initial borrowings under the Senior Secured Credit Facilities were used to finance the purchase of Elk, refinance certain of BMCA's then outstanding debt and repay all of Elk's then outstanding senior notes of $195.0 million, which occurred on March 26, 2007.

F-16

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

All amounts outstanding under the Senior Secured Revolving Credit Facility, which has a maturity date of February 2012, are secured by a first-priority perfected security interest in all receivables, inventory, precious metals, deposit accounts and other current assets of BMCA and its domestic subsidiaries and all proceeds thereof, which we refer to as the Senior Secured Revolving Credit Facility Collateral.

Credit availability under the Senior Secured Revolving Credit Facility is based upon eligible accounts receivable, inventory and precious metals used in the production of inventory, as defined, and includes a sub-limit for letters of credit of $150.0 million. Loans under this facility bear interest at a variable rate based upon either the Base Rate or the Eurodollar Rate as defined in the Senior Secured Revolving Credit Facility, at the borrowers' option, plus a specified margin in each case. These interest rates are recalculated periodically based on changes in the Base Rate or Eurodollar Rate and also based on an availability-based pricing grid. The Senior Secured Revolving Credit Facility requires us to pay unused commitment fees, provides for optional reductions by us in the overall $600.0 million commitment, under certain conditions and provides for optional and mandatory pre-payments of borrowings outstanding under the facility, subject to certain conditions. The Senior Secured Revolving Credit Facility also provides the borrowers with the ability to increase the size of the facility by up to $350.0 million, depending on the ability to obtain commitments from lenders and meeting specified conditions.

All amounts outstanding under the Term Loan, which has a maturity date of February 2014, are secured by (i) a first-priority perfected security interest in substantially all of the assets and properties of BMCA and its domestic subsidiaries, other than the Senior Secured Revolving Credit Facility Collateral, which we refer to as the Term Loan Collateral and (ii) a second-priority perfected security interest in the Senior Secured Revolving Credit Facility Collateral. Loans under this facility bear interest at a variable rate based upon either the Base Rate or Eurodollar Rate, as defined in the Term Loan, at the borrowers' option, plus a specified margin in each case. These interest rates are recalculated periodically based on changes in the Base Rate and Eurodollar Rate, if applicable. The Term Loan provides for optional and mandatory pre-payments under certain conditions and provides the borrowers with the ability to increase the size of the facility by up to $250.0 million (less any increase in the Senior Secured Revolving Credit Facility in excess of $100.0 million), depending on the ability to obtain commitments from lenders and meeting specified conditions.

All amounts outstanding under the Junior Lien Term Loan, which has a maturity date of September 2014, are secured by (i) a second-priority perfected security interest in the Term Loan Collateral and (ii) a third-priority perfected security interest in the Senior Secured Revolving Credit Facility Collateral. Loans under this facility bear interest at a variable rate based upon either the Base Rate or Eurodollar Rate, as defined in the Junior Lien Term Loan at the borrowers' option, plus a specified margin in each case. These interest rates are recalculated periodically based on changes in the Base Rate or Eurodollar Rate, as applicable. The Junior Lien Term Loan also provides for optional and mandatory prepayments under certain conditions.

Under the terms of our Senior Secured Credit Facilities, the borrowers are subject to interest coverage ratio financial covenants and leverage ratio financial covenants, both as defined. In addition, the borrowers are also required to comply with other customary covenants and various restrictive covenants, including with respect to incurring additional indebtedness or guarantees, creating liens or other encumbrances, making capital expenditures, making restricted payments, including dividends and distributions to our parent corporations and making certain investments. In the event of a change of

F-17

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

control of BMCA, as defined, the maturity dates of our Senior Secured Credit Facilities could be accelerated by the holders of that indebtedness.

On February 22, 2007, as part of the Elk acquisition, we repurchased approximately $97.5 million, or 97.5%, of the aggregate $100.0 million principal amount outstanding of the 2007 Notes and $150.1 million, or 96.9%, of the aggregate $155.0 million principal amount outstanding of the 2008 Notes. On October 15, 2007 and December 1, 2008, we redeemed all of our remaining $2.5 and $4.9 million outstanding 2007 Notes and 2008 Notes, respectively, including accrued and unpaid interest on such notes through the date of redemption.

In December 2007, we consummated a $30.0 and $15.0 million sale-leaseback, of certain machinery and equipment located at our Baltimore, Maryland and Gainesville, Texas manufacturing facilities, respectively, which were accounted for as capital leases, as according to SFAS No. 13 "Accounting for Leases", which we refer to as SFAS No. 13. The sale of the Baltimore machinery and equipment resulted in a deferred gain of $24.7 million, of which $3.1 million was amortized into our statement of operations during our fiscal year ended December 31, 2008 and the remaining amount will be amortized over the remaining life of the lease term. The Baltimore and Gainesville lease terms extend through December 2015 and December 2014, respectively, with early buyout options in September 2012 and December 2013, respectively.

In December 2007, we also consummated lease extensions of our original operating leases of certain machinery and equipment located at our Michigan City, Indiana and Shafter, California manufacturing facilities, respectively, which were accounted for as capital leases, as according to SFAS No. 13. The Michigan City and Shafter lease terms extend through September 2016 and December 2015, respectively, with early purchase options in September 2014 and September 2012, respectively. As of December 31, 2008 and 2007, amounts due under our capital leases aggregated to $56.0 and $62.0 million, respectively.

In April 2008, we repurchased and retired $4.8 million of industrial development revenue bond certificates issued by us with respect to the Mount Vernon, Indiana Industrial Development Revenue Bond issued in 1985. As of December 31, 2008, we had one remaining industrial development revenue bond certificate outstanding, which bears interest at a floating rate, which ranged between 0.7% and 7.25% during 2008, and is secured by letters of credit under the Senior Secured Revolving Credit Facility.

In July 2004, we issued $200.0 million in aggregate principal amount of 7³/4% Senior Notes due 2014. In November 2004, we issued an additional $50.0 million in aggregate principal amount of 7³/4% Senior Notes due 2014 under an indenture dated July 2004, pursuant to which we previously issued our original $200.0 million of 7³/4% Senior Notes due 2014, collectively the Senior Notes. These additional Senior Notes rank equally with and formed a part of a single series with such original Senior Notes and have the same terms and conditions. The net proceeds from the issuance of the Senior Notes, after deducting the initial purchasers discounts, commission and offering expenses and including the addition of the applicable premium on the Senior Notes issued in November 2004 were approximately $246.5 million. The original premium of approximately $0.9 million is included in long-term debt, will be amortized over the life of the Senior Notes, and as of December 31, 2008 amortized to $0.5 million.

Under the terms and conditions of the Senior Notes, the noteholders have the right under the indenture governing such notes to require us to purchase the Senior Notes at a price of 101% of the principal amount thereof, plus any accrued and unpaid interest, in the event of a change in control, as defined in the Senior Notes. Upon the expiration of this right, we would have the option to purchase

F-18

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

the Senior Notes at a purchase price equal to 100% of the aggregate principal amount, plus the applicable premium, as defined in the Senior Notes, together with any accrued and unpaid interest. We also have the option to redeem some or all of the Senior Notes beginning on August 1, 2009 through August 1, 2012, at specified redemption premiums, as defined in the Senior Notes. Our Senior Notes are secured by a first-priority lien on the Term Loan Collateral and a second-priority lien on the Senior Secured Revolving Credit Facility Collateral, in each case, having equal priority with the lien securing our obligations under the Term Loan.

In July 2003, we entered into a $19.7 million secured loan, which we refer to as the Chester Loan, with the proceeds being used to repay a $19.7 million obligation associated with an early buyout option on a previously transacted capital lease on certain machinery and equipment at our Chester, South Carolina facility. The Chester Loan is secured by a sole security interest in the machinery and equipment, matures in 2010, requires monthly payments of principal and interest commencing in August 2003 and bears a fixed annual interest rate of 7.41%.

As of December 31, 2008, we had total outstanding consolidated indebtedness of $1,731.6 million, which included $52.8 million of demand loans to our parent corporation and $20.6 million that matures prior to December 31, 2009. Our total outstanding consolidated indebtedness also included $76.0 million of borrowings outstanding under our Senior Secured Revolving Credit Facility. We anticipate funding these obligations principally from our cash and cash equivalents on hand, cash flow from operations and/or borrowings under our Senior Secured Revolving Credit Facility.

As of December 31, 2008, we were in compliance with all covenants under the Senior Secured Revolving Credit Facility, the Term Loan, the Junior Lien Term Loan and the indenture governing the Senior Notes. As of December 31, 2008, the net book value of the collateral securing the Senior Secured Revolving Credit Facility Collateral and the Term Loan Collateral was $678.7 and $1,657.9 million, respectively.

At December 31, 2008, we had outstanding letters of credit of approximately $43.1 million, which included approximately $10.6 million of standby letters of credit related to certain obligations of G-I Holdings. During 2008, we paid $0.1 million as a distribution to our indirect parent corporation related to previously outstanding standby letters of credit.

See Note 12 to the Consolidated Financial Statements for further information regarding our Long-Term Debt.

Intercompany Transactions

We make loans to and borrow from, our parent corporations from time to time at interest rates ranging from 3.25% to 7.25% in 2008. At December 31, 2008 and 2007, BMCA Holdings Corporation owed us $56.3 and $56.2 million, including interest of $1.1 and $1.0 million, respectively; and we owed BMCA Holdings Corporation $52.8 and $52.8 million, respectively, with no unpaid interest. Interest income on our loans to BMCA Holdings Corporation amounted to $3.4, $5.0 and $4.9 million in 2008, 2007 and 2006, respectively. Interest expense on our loans from BMCA Holdings Corporation amounted to $3.3, $4.8 and $4.7 million in 2008, 2007 and 2006, respectively. Loans payable to/receivable from our parent corporations are due on demand and provide each party with the right of offset of its related obligation to the other party and are subject to limitations as outlined in our Senior Secured Revolving Credit Facility, our Term Loan, our Junior Lien Term Loan and our Senior Notes. Under the terms of our Senior Secured Revolving Credit Facility and the indenture governing our Senior Notes at December 31, 2008, we could repay demand loans to our parent corporation

F-19

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

amounting to $52.8 million, subject to certain conditions. See Note 17 to the Consolidated Financial Statements.

During 2008 and 2006 after giving effect to the most restrictive of the aforementioned debt covenant restrictions, we declared and paid cash dividends of $7.5 and $15.0 million, respectively, to our parent corporation. In 2007, we did not declare or pay a cash dividend to our parent corporation.

As of December 31, 2008 and 2007, we included on our consolidated balance sheets a tax receivable from parent corporation of $8.4 and $10.0 million, respectively, representing amounts paid in excess of amounts due to G-I Holdings with respect to 2006 under the Tax Sharing Agreement. We expect to utilize the remaining receivable balance at December 31, 2008 during 2009. See Notes 9 and 17 to the Consolidated Financial Statements.

On January 5, 2001, G-I Holdings filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code due to asbestos claims. See Item 3, "Legal Proceedings" and Note 8 to the Consolidated Financial Statements for further information regarding asbestos-related matters.

Our parent corporations, G-I Holdings and BMCA Holdings Corporation, are essentially holding companies without independent businesses or operations. As a result, they are presently dependent upon the earnings and cash flows of their subsidiaries, principally our company, in order to satisfy their obligations, including various tax and other claims and liabilities including tax liabilities relating to Rhône-Poulenc Surfactants & Specialties, L.P. (the "surfactants partnership"), a partnership in which G-I Holdings held an interest. We do not believe that the dependence of our parent corporations on the cash flows of their subsidiaries should have a material adverse effect on our operations, liquidity or capital resources. See Notes 8, 9, 12, 17 and 18 to the Consolidated Financial Statements.

During 2008, we and our subsidiaries purchased a substantial portion of our headlap roofing granules, colored roofing granules and algae-resistant granules, on a purchase order basis, from ISP Minerals Inc., which we refer to as ISP Minerals, an affiliate of BMCA and an affiliate of International Specialty Products Inc., which is also an affiliate of BMCA. We refer to International Specialty Products Inc. and its subsidiaries as ISP. The amount of mineral products purchased each year on this basis is based on current demand and is not subject to minimum purchase requirements. For the years ended December 31, 2008 and 2007, we purchased $40.6 and $10.5 million, respectively, of roofing granules under this arrangement.

In addition to the granules products we purchased, under the above purchase order basis, the balance of our granules requirements are purchased under a contract expiring in 2013. The amount of mineral products purchased each year under the contract is based on current demand and is not subject to minimum purchase requirements. Under the contract, for the years ended December 31, 2008 and 2007, we purchased $83.2 and $95.8 million of roofing granules, respectively.

Pursuant to a management agreement, a subsidiary of ISP provides certain general management, administrative, legal and facilities services to us, including the use of our headquarters in Wayne, New Jersey. Charges to us by ISP for these services under the management agreement, inclusive of the services provided to G-I Holdings, discussed below, aggregated to $7.3, $6.7 and $6.1 million for 2008, 2007 and 2006, respectively. These charges consist of management fees and other reimbursable expenses attributable to us, or incurred by ISP for our benefit. The amount payable to ISP for management fees as of December 31, 2008 and 2007 was $0.9 and $0.5 million, respectively, and is included in payable to related parties in the consolidated balance sheets. The management agreement also provides that we are responsible for providing management services to G-I Holdings and certain of

F-20

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

its subsidiaries and that G-I Holdings pay to us a management fee for these services. The aggregate amount paid by G-I Holdings to us for services rendered under the management agreement in 2008, 2007 and 2006 was approximately $0.9, $0.8 and $0.9 million, respectively. We also allocate a portion of the management fees payable by us under the management agreement as lease payments for the use of our headquarters.

Capital Expenditures

We use capital resources to maintain existing facilities, expand our operations and make acquisitions. In 2008, we incurred approximately $65.8 million on maintenance, compliance and expansion capital and in 2009, we expect to incur approximately $80.0 million on maintenance, compliance and expansion capital. We expect to generate funding for our capital programs from results of operations and additional borrowings under our Senior Secured Revolving Credit Facility.

Property, Plant and Equipment Dispositions

During 2008, we sold manufacturing facilities in Hollister, California and Stockton, California; property in Fresno, California; a distribution center in Waxahachie, Texas; and precious metals relating to our Nashville, Tennessee manufacturing facility.

Economic Outlook

We do not believe that inflation has had a material effect on our results of operations during the past three years. However, we cannot assure you that our business will not be affected by inflation in the future, or by increases in the cost of energy and asphalt purchases used in our manufacturing process principally due to fluctuating oil prices.

F-21

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Contractual Obligations and Commercial Commitments

At December 31, 2008, the table below summarizes our significant contractual obligations and commercial commitments.

		Payments Due by Period

Contractual Obligations		Total		Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
		(Millions)
Long-term Debt(1)		$	1,678.8	$	20.6	$	37.7	$	114.5	$	1,506.0
Purchase Obligations(2)			89.9		39.8		48.0		2.1		—
Operating Leases			89.2		19.1		29.0		19.2		21.9
Interest Expense(3)			626.9		125.5		246.5		212.6		42.3

	Total	$	2,484.8	$	205.0	$	361.2	$	348.4	$	1,570.2

(1): Our long-term debt obligations include our capital leases related to our Michigan City, Indiana; Shafter, California; Baltimore, Maryland; and Gainesville, Texas manufacturing facilities.
(2): We have entered into certain contractual obligations primarily related to the purchase of raw materials and the use of asphalt terminals at specific locations. Pricing under these contractual obligations is generally fixed; however, these contracts are subject to certain conditions which allow for prices to be adjusted upward or downward. Certain of these contracts also contain minimum annual purchase requirements, which we expect will be met and we do not expect any losses under these specific contracts.
(3): Interest rates on our $325.0 million Junior Lien Term Loan and our $975.0 million Term Loan are at variable rates. We have utilized an expected rate of LIBOR (3.00%) plus a specified fixed rate (2.75%) as of December 31, 2008, for purposes of estimating our interest expense on the Term Loan throughout the duration of the loan and an expected rate of LIBOR (3.00%) plus a specified fixed rate of (5.75%) as of December 31, 2008, for purposes of estimating our interest expense on the Junior Lien Term Loan throughout the duration of the loan. In 2007, we entered into multiple five-year fixed income interest rate swap contracts as hedging instruments against our variable rate Term Loan. Interest expense related to the swaps is included in the table above. At December 31, 2008, we had $76.0 million of long-term debt related to our Senior Secured Revolving Credit Facility. Interest expense on this variable rate facility is not included in the above table as it cannot be reasonably estimated due to daily fluctuations in the principal amount of this debt facility. A ¹/8% change in LIBOR due to changes in the prevailing market rates would result in a plus or minus $4.6 million adjustment to our interest expense over the life of our variable rate debt in the table above.

We also have a management agreement with ISP Management Company Inc., a subsidiary of International Specialty Products, Inc., which we refer to as the Management Agreement, to provide us with certain management services. The management fees payable under the Management Agreement are adjusted annually. Based on services provided to us in 2008 under the Management Agreement, the aggregate amount payable to ISP under the Management Agreement for 2009 inclusive of the services provided to G-I Holdings, is not yet available, however it is estimated to be consistent, after adjusting for inflationary factors, with the $7.3 million paid in 2008. For a further discussion on the Management Agreement reference is made to Management's Discussion and Analysis of Financial Condition and Results of Operations, "Intercompany Transactions."

F-22

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

During 2008, we and our subsidiaries purchased a substantial portion of our headlap roofing granules, colored roofing granules and algae-resistant granules, on a purchase order basis, from ISP Minerals, an affiliate of BMCA and an affiliate of International Specialty Products Inc., which is also an affiliate of BMCA. The amount of mineral products purchased each year on this basis is based on current demand and is not subject to minimum purchase requirements. For the years ended December 31, 2008 and 2007, we purchased $40.6 and $10.5 million, respectively, of roofing granules under this arrangement.

At December 31, 2008, we have contractual guarantees and commitments as follows:

		Expiration per period

Contractual Guarantees and Commitments		Total		Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
		(Millions)
Letters of Credit		$	43.1	$	43.1	$	—	$	—	$	—

	Total	$	43.1	$	43.1	$	—	$	—	$	—

At December 31, 2008, letters of credit of $43.1 million, of which are all standby letters of credit, are irrevocable obligations of an issuing bank. These letters of credit are guaranteed by us.

Other Obligations

At December 31, 2008, we have other obligations as follows:

Other Obligations		2008 Actual Spending		2009 Projected Spending

		(Millions)
Environmental Matters		$	0.9	$	1.0
Pension and Other Benefits			1.5		4.4

	Total	$	2.4	$	5.4

Our expenditures for environmental compliance capital projects were $0.9 and $0.4 million in 2008 and 2007, respectively. We anticipate that environmental regulations will continue to be imposed on the roofing industry. Although we cannot predict with certainty environmental expenditures beyond 2008, management believes the amounts estimated in the table above are adequate.

Our policy for pension plans is to accumulate plan assets that, over the long run, will approximate the present value of projected benefit obligations. In 2008 and 2007, we made pension contributions of $1.3 and $0.8 million, respectively. In 2009, based on current actuarial data, we expect to make a pension contribution of $4.2 million. Actual contributions in 2009 and future years may vary based on a number of factors including prevailing interest rates and return on plan assets.

Spending associated with other benefit plans, primarily retiree medical and life insurance and long-term disability, amounted to $0.2 and $0.1 million in 2008 and 2007, respectively. We expect spending to continue at comparable levels in 2009.

F-23

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Available Sources of Liquidity

At December 31, 2008, we have available sources of liquidity, net of amounts used, as follows:

		Expiration per period

Available Sources of Liquidity		Total		Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
		(Millions)
Unused Lines of Credit		$	241.4	$	—	$	—	$	241.4	$	—

	Total	$	241.4	$	—	$	—	$	241.4	$	—

As of December 31, 2008, we had total debt of $76.0 million outstanding under our Senior Secured Revolving Credit Facility, of which an additional $43.1 million of letters of credit were used. We had available sources of liquidity consisting of $241.4 million of unused lines of credit at December 31, 2008, subject to the borrowing base availability as defined in the Senior Secured Revolving Credit Facility.

Recent Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115", which we refer to as SFAS No. 159, which permits entities to elect to measure specified financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting period. The election, called the "fair value option," will enable some companies to reduce the volatility in reported earnings caused by measuring related assets and liabilities differently, and is simpler than using the complex hedge-accounting provisions of SFAS No. 133 to achieve similar results. SFAS No. 159 applies to all entities and contains financial statement presentation and disclosure requirements for assets and liabilities reported at fair value as a consequence of the election. SFAS No. 159 is expected to expand the use of fair value measurements for financial instruments and was effective for fiscal years beginning after November 15, 2007. We adopted the provisions of SFAS No. 159 for our fiscal year beginning January 1, 2008 and, upon adoption, did not elect the fair value option for any items within the scope of SFAS No. 159. Therefore, SFAS No. 159 did not have any impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised in 2007) "Business Combinations", which we refer to as SFAS No. 141R, which provides revised guidance on how an acquiring company should recognize and measure the identifiable assets acquired, liabilities assumed, noncontrolling interests, and goodwill acquired in a business combination. SFAS No. 141R also expands the required disclosures related to the nature and financial statement impact of business combinations and is effective, on a prospective basis, for business combinations completed in fiscal years beginning after December 15, 2008. We will adopt SFAS No. 141R for our fiscal year beginning January 1, 2009 and, therefore, will apply SFAS No. 141R prospectively to any business combinations subsequent to that date.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements", which we refer to as SFAS No. 160. SFAS No. 160 establishes requirements for ownership interests in subsidiaries held by parties other than us (minority interests) to be clearly identified and disclosed in the consolidated statement of financial position within equity, but separate from the parent's equity. Any changes in the parent's ownership interests are required to be accounted

F-24

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

for in a consistent manner as equity transactions and any noncontrolling equity investments in deconsolidated subsidiaries must be measured initially at fair value. SFAS No. 160 is effective, on a prospective basis, for fiscal years beginning after December 15, 2008, and upon adoption, the presentation and disclosure requirements must be retrospectively applied to comparative financial statements. We will adopt the provisions of SFAS No. 160 for our fiscal year beginning January 1, 2009, and we do not expect the adoption to have any impact on our results of operations or financial position as we do not have any noncontrolling interests.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities", which we refer to as SFAS No. 161. SFAS No. 161 amends SFAS No. 133 and is intended to improve financial reporting related to derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The provisions of SFAS No. 161 are effective on a prospective basis for fiscal years beginning on or after November 15, 2008. We will adopt the disclosure provisions of SFAS No. 161 for our fiscal year beginning January 1, 2009, which may increase disclosures in the financial statements related to our derivative instruments.

In April 2008, the FASB issued FSP No. 142-3, "Determination of the Useful Life of Intangible Assets", which we refer to as FSP No. 142-3. FSP No. 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142, "Goodwill and Other Intangible Assets". This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP No. 142-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. Early adoption of FSP No. 142-3 is prohibited. We will adopt the provisions of FSP No. 142-3 for our fiscal year beginning January 1, 2009 and are currently evaluating the impact, if any, that FSP No. 142-3 will have on our financial statements.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles", which we refer to as SFAS No. 162, which identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation and presentation of financial statements in accordance with United States generally accepted accounting principles. SFAS No. 162 will be effective 60 days after the SEC approves the Public Company Accounting Oversight Board's amendments to Interim Audit Standards Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." We will adopt the provisions and evaluate the impact of SFAS No. 162 upon its effective date.

In December 2008, the FASB issued FSP No. 132(R)-1, "Employers Disclosures about Postretirement Benefit Plan Assets", which we refer to as FSP No. 132(R)-1, and provides additional guidance on an employers' disclosures about plan assets of a defined benefit pension or other post retirement plan. FSP No. 132(R)-1 is effective for financial statements issued for fiscal years ending after December 15, 2009. We will adopt the provisions of FSP No. 132(R)-1 for our fiscal year beginning January 1, 2010, which will increase the disclosures in the financial statements related to the assets of our defined pension and postretirement plans.

Market-Sensitive Instruments and Risk Management

Under the terms of the Senior Secured Revolving Credit Facility, we are only permitted to enter into investments in highly-rated commercial paper, U.S. government-backed securities, certain time

F-25

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

deposits and hedging arrangements that protect against or mitigate the effect of fluctuations in interest rates on variable interest rate debt, foreign exchange rates or prices of commodities used in our business. In 2007, BMCA entered into fixed-income interest rate swaps and treasury locks to hedge against fluctuations in the variable interest rate of our $975.0 million Term Loan. We settled our open treasury lock position in October 2007. See "Market-Sensitive Instruments" caption included in Note 2 and also see Note 13 to the Consolidated Financial Statements.

* * *

Forward-looking Statements

This annual report on Form 10-K contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, 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 only predictions and generally can be identified by use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee" or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. Our operations are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. The forward-looking statements included herein are made only as of the date of this annual report on Form 10-K and we undertake no obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. We cannot assure you that projected results or events will be achieved.

F-26

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

SELECTED FINANCIAL DATA

The following table presents our selected consolidated financial data. The selected historical consolidated financial data for the five fiscal years ended December 31, 2008, 2007, 2006, 2005 and 2004 are derived from our audited consolidated financial statements. See Note 17 to the Consolidated Financial Statements for cash dividends paid to parent corporation.

		Year Ended December 31,

		2008			2007(1)			2006		2005		2004
		(Millions)
Operating Data:
	Net sales	$	2,748.9	*	$	2,310.1	*	$	1,969.2	$	1,955.8	$	1,773.4
	Income (loss) before interest expense and income taxes		237.8	**		(27.4	)**		124.8		160.6		150.2
	Interest expense		158.9			181.4	***		61.5		62.3		62.7
	Income (loss) before income taxes		78.9			(208.8	)		63.3		98.3		87.5
	Net income (loss)		51.4			(134.5	)		38.7		61.0		54.9

*: Net sales in 2008 and 2007 reflected a $6.1 and $15.1 million reduction due to restructuring-related sales discounts, respectively.
**: Income before interest expense and income taxes for the year ended December 31, 2008 included $73.2 million in restructuring and other expenses related to the acquisition of ElkCorp ('Elk"), of which $6.1 million is reflected as a reduction in net sales and $26.9 million is included in cost of products sold. The loss before interest expense and income taxes for the year ended December 31, 2007 included $181.0 million in restructuring and other expenses related to the acquisition of Elk, of which $15.1 million is reflected as a reduction in net sales and $24.3 million is included in cost of products sold.
***: Interest expense for the year ended December 31, 2007 included $23.2 million of debt restructuring charges related to refinancings due to the acquisition of Elk on February 22, 2007 ("date of acquisition").

		December 31,

		2008			2007(1)			2006		2005		2004
		(Millions)
Balance Sheet Data:
	Total working capital	$	250.9		$	232.7		$	123.0	$	191.7	$	157.7
	Goodwill		653.6			655.2			64.8		67.1		63.3
	Total assets		2,280.3			2,274.4			1,029.8		1,004.3		1,065.5
	Long-term debt less current maturities		1,658.2			1,729.4			484.4		533.5		536.0
	Total stockholders' equity (deficit)		(79.9	)		(96.3	)		62.2		43.0		(2.7	)

		Year Ended December 31,

		2008		2007(1)			2006		2005		2004
		(Millions)
Other Data:
	Depreciation	$	72.4	$	69.0		$	49.3	$	45.1	$	43.9
	Intangible asset amortization		11.4		6.8			—		—		—
	Software amortization		4.1		3.4			3.0		2.7		2.7
	Acquisition of Elk		—		945.3	(2)		—		—		—
	Capital expenditures and acquisitions		65.8		84.5			87.5		65.1		67.2

(1): The selected consolidated financial data for the fiscal year ended December 31, 2007 included Elk from the date of acquisition.
(2): The net purchase price of Elk was adjusted to $945.6 million as part of the Company's final purchase price adjustment made as of March 30, 2008.

F-27

Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Building Materials Corporation of America:

We have audited the accompanying consolidated balance sheets of Building Materials Corporation of America and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of operations, cash flows and shareholders' equity (deficit) for each of the three years in the period ended December 31, 2008. Our audits also included the financial statement schedule on page S-1. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Building Materials Corporation of America and subsidiaries at December 31, 2008 and 2007, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.


		Ernst & Young LLP

New York, New York
March 25, 2009

F-28

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year Ended December 31,

			2008			2007			2006
			(Thousands)
Net sales			$	2,748,909		$	2,310,073		$	1,969,170

Costs and expenses, net:
	Cost of products sold			1,968,239			1,695,584			1,396,376
	Selling, general and administrative			486,220			496,216			447,655
	Amortization of intangible assets			11,386			6,785			—
	Restructuring and other expenses			40,261			141,643			—
	Other (income) expense, net			5,032			(2,755	)		282

		Total costs and expenses, net		2,511,138			2,337,473			1,844,313

Income (loss) before interest expense and income taxes				237,771			(27,400	)		124,857
Interest expense				(158,921	)		(181,438	)		(61,509	)

Income (loss) before income taxes				78,850			(208,838	)		63,348
Income tax (expense) benefit				(27,411	)		74,312			(24,598	)

Net income (loss)			$	51,439		$	(134,526	)	$	38,750

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-29

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

			December 31,

			2008			2007
			(Thousands)
Assets
Current Assets:
	Cash and cash equivalents		$	37,037		$	6,324
	Accounts receivable, trade, net			199,233			210,857
	Accounts receivable, other			10,897			10,792
	Income tax receivable			—			11,968
	Inventories, net			348,449			316,912
	Deferred income tax assets			39,324			38,017
	Other current assets			17,072			13,698

		Total Current Assets		652,012			608,568
Property, plant and equipment, net				655,269			672,813
Goodwill				653,644			655,200
Intangible assets, net				196,250			207,635
Income tax receivable from parent corporation				8,400			10,016
Other noncurrent assets				114,739			120,159

Total Assets			$	2,280,314		$	2,274,391

Liabilities and Stockholders' Deficit
Current Liabilities:
	Current maturities of long-term debt		$	20,596		$	24,630
	Accounts payable			156,030			142,250
	Payable to related parties			21,153			16,133
	Loans payable to parent corporation			52,840			52,840
	Accrued liabilities			134,341			135,976
	Product warranty claims			16,200			13,500
	Discontinued operations—current liabilities			—			560

		Total Current Liabilities		401,160			385,889

Long-term debt				1,658,169			1,729,395

Product warranty claims				28,765			31,224

Deferred income tax liabilities				73,103			60,869

Other liabilities				198,973			163,332

Commitments and Contingencies—Note 18
Stockholders' Deficit:
	Series A Cumulative Redeemable Convertible Preferred Stock, $.01 par value per share; 400,000 shares authorized; no shares issued			—			—
	Class A Common Stock, $.001 par value per share; 1,300,000 shares authorized; 1,015,010 shares issued and outstanding; 0 shares issued in 2008 and 2007			1			1
	Class B Common Stock, $.001 par value per share; 100,000 shares authorized; 0 shares issued and outstanding in 2008 and 2007			—			—
	Loans receivable from parent corporation			(56,348	)		(56,224	)
	Retained earnings (accumulated deficit)			27,372			(16,496	)
	Accumulated other comprehensive loss			(50,881	)		(23,599	)

		Total Stockholders' Deficit		(79,856	)		(96,318	)

Total Liabilities and Stockholders' Deficit			$	2,280,314		$	2,274,391

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-30

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Year Ended December 31,

			2008			2007			2006
			(Thousands)
Cash and cash equivalents, beginning of year			$	6,324		$	7,777		$	6,882

Cash provided by operating activities:
	Net income (loss)			51,439			(134,526	)		38,750
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
		Depreciation		72,395			69,006			49,321
		Amortization of intangible and other assets		15,478			10,242			2,993
		Restructuring and other expenses		73,219			181,012			—
		Deferred income taxes		29,338			(80,635	)		2,770
		Noncash interest charges		8,978			9,449			4,596
	(Increase) decrease in working capital items			(75,895	)		55,363			(7,148	)
	Increase (decrease) in product warranty claims			241			877			(825	)
	Increase in other assets			(10,448	)		(6,377	)		(11,964	)
	Increase (decrease) in other liabilities			(3,720	)		7,758			7,651
	Increase (decrease) in net payable to related parties/parent corporations			6,636			9,297			(14,463	)
	Other, net			(18,490	)		(3,274	)		872

Net cash provided by operating activities				149,171			118,192			72,553

Cash used in investing activities:
	Acquisition of ElkCorp			—			(945,295	)		—
	Capital expenditures and 2007 and 2006 acquisitions			(65,846	)		(84,511	)		(87,450	)
	Proceeds from sale of assets			31,153			6,755			—

Net cash used in investing activities				(34,693	)		(1,023,051	)		(87,450	)

Cash provided by (used in) financing activities:
	Proceeds from issuance of long-term debt			1,083,000			2,457,749			824,000
	Repayments of long-term debt			(1,147,652	)		(1,557,599	)		(783,948	)
	Purchase of industrial development revenue bond certificates issued by the Company			(4,800	)		—			(6,325	)
	Proceeds from sale-leasebacks			—			45,000			—
	Principal repayments of capital leases			(6,042	)		—			—
	Settlement of treasury lock hedges			—			(4,896	)		—
	Distributions to parent corporation			(71	)		(171	)		(521	)
	Dividends to parent corporation			(7,500	)		—			(15,000	)
	Loan to parent corporation			(124	)		(193	)		(191	)
	Financing fees and expenses			(576	)		(36,484	)		(2,223	)

Net cash provided by (used in) financing activities				(83,765	)		903,406			15,792

Net change in cash and cash equivalents				30,713			(1,453	)		895

Cash and cash equivalents, end of year			$	37,037		$	6,324		$	7,777

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
(continued on the following page)

F-31

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

		Year Ended December 31,

		2008			2007			2006
		(Thousands)
Supplemental Cash Flow Information:
Effect on cash from changes in working capital items*:
	Decrease in accounts receivable trade and accounts receivable other	$	11,035		$	71,037		$	79,986
	Decrease in income tax receivable		11,837			—			—
	(Increase) decrease in inventories, net		(45,684	)		28,905			(36,011	)
	(Increase) decrease in other current assets		(3,374	)		9,362			6,322
	Increase (decrease) in accounts payable		15,367			12,855			(33,970	)
	Increase (decrease) in accrued liabilities		11,264			(2,083	)		(23,475	)
	Payments for restructuring and other expenses		(76,340	)		(64,713	)		—

	Net effect on cash from (increase) decrease in working capital items	$	(75,895	)	$	55,363		$	(7,148	)

Cash paid during the period for:
	Interest (net of amount capitalized of $546, $2,225 and $2,704 in 2008, 2007 and 2006, respectively)	$	149,136		$	139,469		$	54,733
	Income taxes (including Federal income taxes paid pursuant to a Tax Sharing Agreement of $0, $0 and $24,101 in 2008, 2007 and 2006, respectively**)	$	6,819		$	2,532		$	25,307

*: Working capital items exclude cash and cash equivalents, deferred income tax assets, current maturities of long-term debt, product warranty claims, net receivables and loans from/payable to related parties/parent corporations and discontinued operations.
**: The amount paid for income taxes in 2008 excluded an $11.8 million Federal income tax receipt related to Elk.
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-32

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

			Capital Stock and Additional Paid-in Capital		Loans Receivable From Parent Corporation			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Comprehensive Income (Loss)

			(Thousands)
Balance, December 31, 2005			$	1	$	(55,840	)	$	104,275		$	(5,410	)

	Comprehensive income year-ended December 31, 2006:
		Net income		—		—			38,750			—		$	38,750

		Other comprehensive income, net of tax:
		Pension plan adjustment, net of tax of ($849)		—		—			—			1,445			1,445
		Postretirement plan adjustment net of tax of ($2,348)		—		—			—			3,999			3,999

	Comprehensive income													$	44,194

	SAB No. 108 adjustments, net of tax of $5,701			—		—			(9,303	)		—
	Distribution to parent corporation			—		—			(521	)		—
	Dividend to parent corporation			—		—			(15,000	)		—
	Loan to parent corporation			—		(191	)		—			—

Balance, December 31, 2006			$	1	$	(56,031	)	$	118,201		$	34

	Comprehensive income (loss) year-ended December 31, 2007:
		Net loss		—		—			(134,526	)		—		$	(134,526	)

		Other comprehensive income (loss), net of tax:
		Derivative fair value adjustment interest rate swaps, net of tax of $11,392		—		—			—			(18,588	)		(18,588	)
		Derivative fair value adjustment treasury locks, net of tax of $1,776		—		—			—			(2,896	)		(2,896	)
		Pension plan adjustment, net of tax of $1,078		—		—			—			(1,760	)		(1,760	)
		Postretirement plan adjustment, net of tax of $238		—		—			—			(389	)		(389	)

	Comprehensive loss													$	(158,159	)

	Distribution to parent corporation			—		—			(171	)		—
	Loan to parent corporation			—		(193	)		—			—

Balance, December 31, 2007			$	1	$	(56,224	)	$	(16,496	)	$	(23,599	)

	Comprehensive income (loss) year-ended December 31, 2008:
		Net income		—		—			51,439			—		$	51,439

		Other comprehensive income (loss), net of tax:
		Derivative fair value adjustment interest rate swaps, net of tax of $15,380		—		—			—			(25,093	)		(25,093	)
		Derivative fair value adjustment treasury locks, net of tax of ($288)		—		—			—			470			470
		Pension plan adjustment, net of tax of $1,323		—		—			—			(2,159	)		(2,159	)
		Postretirement plan adjustment, net of tax of $306		—		—			—			(500	)		(500	)

	Comprehensive income													$	24,157

	Distributions to parent corporation			—		—			(71	)		—
	Dividends to parent corporation			—		—			(7,500	)		—
	Loan to parent corporation			—		(124	)		—			—

Balance, December 31, 2008			$	1	$	(56,348	)	$	27,372		$	(50,881	)

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-33

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Formation of the Company

Building Materials Corporation of America ("BMCA" or the "Company") is a leading national manufacturer and marketer of a broad line of asphalt and polymer-based roofing products and accessories for the residential and commercial roofing markets. The Company also manufactures specialty building products and accessories for the professional and do-it-yourself remodeling and residential construction industries. See Note 16.

The Company was formed on January 31, 1994 and is a wholly-owned subsidiary of BMCA Holdings Corporation ("BHC"), which is a wholly-owned subsidiary of G-I Holdings Inc. G-I Holdings Inc. is a wholly-owned subsidiary of G Holdings Inc. ("G Holdings").

To facilitate administrative efficiency, effective October 31, 2000, GAF Corporation, the former indirect parent of the Company, merged into its direct subsidiary, G-I Holdings Inc. G-I Holdings Inc. then merged into its direct subsidiary, G Industries Corp., which in turn merged into its direct subsidiary, GAF Fiberglass Corporation. In that merger, GAF Fiberglass Corporation changed its name to GAF Corporation. Effective November 13, 2000, GAF Corporation merged into its direct subsidiary, GAF Building Materials Corporation, whose name was changed in the merger to G-I Holdings Inc. G-I Holdings Inc. is now an indirect parent of the Company and the Company's direct parent is BHC. References below to G-I Holdings means G-I Holdings Inc. and any and all of its predecessor corporations, including GAF Corporation, G-I Holdings Inc., G Industries Corp., GAF Fiberglass Corporation and GAF Building Materials Corporation.

Effective as of January 31, 1994, G-I Holdings transferred to the Company all of its business and assets, other than three closed manufacturing facilities, certain deferred tax assets and receivables from affiliates. The Company recorded the assets and liabilities related to such transfer at G-I Holdings' historical costs. The Company contractually assumed all of G-I Holdings' liabilities, except (i) all of G-I Holdings' environmental liabilities, other than environmental liabilities relating to the Company's plant sites and its business as then-conducted, (ii) all of G-I Holdings' tax liabilities, other than tax liabilities arising from the operations or business of the Company and (iii) all of G-I Holdings' asbestos-related liabilities, other than the first $204.4 million of such liabilities (whether for indemnity or defense) relating to then-pending asbestos-related bodily injury cases and previously settled asbestos-related bodily injury cases, which the Company contractually assumed and agreed to pay.

On February 22, 2007, (the "date of acquisition"), a subsidiary of Building Materials Corporation of America acquired approximately 90% of the outstanding common shares of ElkCorp ("Elk") a Dallas, Texas-based manufacturer of roofing products and building materials. The remaining common shares of Elk were acquired on March 26, 2007, resulting in Elk becoming an indirect wholly-owned subsidiary of BMCA. See Note 4.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Net sales of roofing products and specialty building products and accessories are generally seasonal in nature.

F-34

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

Financial Statement Estimates

The preparation of the Company's consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company's management to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities. On an ongoing basis, the Company evaluates its estimates including but not limited to those related to doubtful accounts, inventory valuation, product warranty claims, extended and enhanced product warranties, environmental liabilities, the carrying value of goodwill, the carrying value of long-lived tangible and intangible assets, pensions and other post-employment benefits and contingent liabilities. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. In the opinion of management, the consolidated financial statements herein contain all adjustments necessary to present fairly the financial position and the results of operations and cash flows of the Company for the periods presented. The Company does not anticipate any changes in management estimates that would have a material impact on operations, liquidity or capital resources, subject to the matters discussed in Note 18.

Cash and Cash Equivalents

Cash and cash equivalents include cash on deposit and commercial paper purchased with original maturities of three months or less.

Market Sensitive Instruments

Under the Company's $600.0 million Senior Secured Revolving Credit Facility (the "Senior Secured Revolving Credit Facility") the Company is limited to entering into investments in highly-rated commercial paper, U.S. government-backed securities, certain time deposits and hedging arrangements that protect against or mitigate the effect of fluctuations in interest rates on variable rate debt, foreign exchange rates or prices of commodities used in the Company's business. In 2007, the Company entered into fixed income interest rate swaps and treasury locks to hedge against fluctuations in the variable interest rate of the Company's $975.0 million Term Loan (the "Term Loan"). The Company settled its open treasury lock position in October 2007. See Hedging Activity in Note 2 and see Note 13.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company's best estimate of the amount of credit losses in the Company's existing accounts receivable. The Company determines the allowance based on historical write-off experience, as well as customer operating performance and payment practices. Consequently, an adverse change in the financial condition of a particular customer could affect the Company's estimate of its bad debts. The Company reviews its allowance for doubtful accounts periodically. Past due balances are reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its

F-35

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

customers. Accounts receivable are net of the allowances for doubtful accounts and for customer incentives of $104.8 and $68.3 million at December 31, 2008 and 2007, respectively.

Inventories

Inventories are stated at the lower of cost or market. The LIFO (last-in, first-out) method is utilized to determine the cost for certain asphalt-based products used to produce the Company's products, which the Company believes provides a more appropriate matching of revenue and expense. All other inventories are valued on the FIFO (first-in, first-out) method. The Company adjusts its inventories for estimated obsolescence or unmarketable inventories equal to the difference between the cost of inventories and their estimated market value based upon assumptions related to future demand and market conditions. If actual market conditions differ from those projected by management, additional inventory adjustments may be required. Sales of inventories and their resulting receivables are included in working capital items in the consolidated statement of cash flows.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed on the straight-line method based on the estimated economic lives of the assets. The Company uses an economic life of 5 to 25 years for land improvements, 10 to 40 years for buildings and building equipment and 3 to 20 years for machinery and equipment, which includes furniture and fixtures. Repairs are capitalized if the repair both extends the useful life of an asset beyond its original estimated useful life and adds to the value of the asset. Interest charges are capitalized during the period of construction as part of the cost of property, plant and equipment. Interest capitalized amounted to $0.5, $2.2 and $2.7 million for 2008, 2007 and 2006, respectively.

Long-Lived Asset Impairment

The Company follows the provisions of Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"), which was issued by the Financial Accounting Standards Board ("FASB") and addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed. For purposes of recognizing and measuring impairment of long-lived assets, the Company evaluates assets of its facilities because this is the lowest level of independent cash flows ascertainable to evaluate impairment. The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. For long-lived assets to be held and used, an impairment exists when the carrying amount of the asset exceeds the estimated undiscounted cash flows. Any resulting impairment is measured based on the fair value of the related asset. Fair value is determined based on future projected demand and estimated discounted cash flows.

During the years ended December 31, 2008 and 2007, the Company closed several of its manufacturing facilities, in addition to its previously closed manufacturing facilities. The closing of these manufacturing facilities in 2008 and 2007 was primarily due to additional manufacturing capacity resulting from the acquisition of Elk and reduced market demand, and such plants may be re-opened in the future as industry demand rises. For the years ended December 31, 2008 and 2007, the Company

F-36

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

recognized a $0 and $97.0 million SFAS No. 144 impairment loss, respectively, related to the above-mentioned facilities. See Note 5.

Goodwill

The Company's goodwill principally arose from the acquisition of Elk, other acquisitions and from the 1989 management-led buyout of the predecessor company. The Company amortized goodwill using the straight-line method over a period of approximately 40 years prior to January 1, 2002. With the adoption of SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142") goodwill is not amortized but is subject to at least an annual assessment for impairment or more frequently if circumstances indicate a possible impairment. See Note 6.

Intangible Assets

The Company accounts for its intangible assets acquired in connection with the acquisition of Elk in accordance with the provisions of SFAS No. 142. SFAS No. 142 requires disclosure of information relating to intangible assets subsequent to their acquisition that was not previously reported, which includes disclosure concerning the changes in the carrying amount of intangible assets by major intangible asset class for those assets subject to amortization and for those not subject to amortization. SFAS No. 142 also requires disclosure related to actual year-to-date intangible asset amortization expense and the estimated intangible asset amortization expense for each of the next five years. As of December 31, 2008, the Company has not recorded an impairment loss related to its intangible assets. See Note 7.

Hedging Activity

In March 2007, the Company entered into forward-starting interest rate swap agreements. These swaps were initiated in order to hedge the interest rate risk associated with the Company's Term Loan, and they are structured that the Company receives interest based on the three-month Eurodollar rate ("LIBOR") and pays interest on a fixed rate basis. In October 2007, the Company entered into additional interest rate swaps related to its Term Loan with similar terms. In July 2007, the Company entered into treasury locks as additional hedging instruments against its Term Loan, which the Company subsequently settled in cash in October 2007.

The Company accounts for its hedging activity in accordance with SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"), which requires a company to measure hedge effectiveness by assessing, on a quarterly basis, the historical and probable future of high correlation of changes in the fair value of the hedged item. Any ineffective portion is recorded in the Company's statement of operations.

Fair Value of Financial Instruments

Financial instruments consist mainly of cash and cash equivalents, accounts receivable, accounts payable, interest rate swaps, notes payable and lease obligations. The fair value of the financial instruments does not significantly vary from their carrying amount included in the Company's consolidated financial statements.

F-37

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"), which clarifies the definition of fair value, establishes a framework for measuring fair value and expands the disclosures on fair value measurements and is effective for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued FASB Staff Position ("FSP") No. 157-2 "Partial Deferral to the Effective Date of Statement 157" ("FSP No. 157-2"), which is effective for fiscal years beginning after November 15, 2008 and defers the application of SFAS No. 157 for certain non-financial assets and non-financial liabilities and further clarifies the principles in SFAS No. 157 on the fair value measurement of liabilities. The Company adopted the provisions of SFAS No. 157 during its fiscal year ending December 31, 2008 as it relates to its interest rate swap agreements and currently is assessing the impact of the adoption of FSP No. 157-2. See Note 13 for further discussion.

Debt Issuance Costs

Unamortized financing fees and expenses of $31.0 and $37.1 million are included in other noncurrent assets in the consolidated balance sheets at December 31, 2008 and 2007, respectively, and are primarily due to the Company's borrowings related to the acquisition of Elk. See Note 4. Financing fees and expenses are amortized to interest expense over the life of the related debt on a straight-line basis, which approximates the effective interest rate method. In 2008, 2007 and 2006, the Company amortized $6.6, $9.3 and $4.3 million, respectively, related to such expenses.

Software Development Costs

Purchased software development costs of $11.0 and $9.9 million are included in other noncurrent assets in the consolidated balance sheets at December 31, 2008 and 2007, respectively. These costs are amortized to expense over a five year period. In 2008, 2007 and 2006, the Company amortized $4.1, $3.4 and $3.0 million, respectively, related to such costs.

Revenue Recognition

Revenue is recognized at the time products are shipped to the customer. Products are generally shipped Freight on Board, or FOB shipping point. Title and risk of loss pass to the customer at the time of shipment.

Shipping and Handling Costs

Shipping and handling costs are included in selling, general and administrative expenses and amounted to $185.5, $192.5 and $174.6 million in 2008, 2007 and 2006, respectively.

Advertising Costs

Advertising costs are expensed as incurred and are included in selling, general and administrative expenses and amounted to $19.0, $17.2 and $17.4 million in 2008, 2007 and 2006, respectively.

Research and Development

Research and development expenses, which are included in selling, general and administrative expenses, are charged to operations as incurred and amounted to $8.1, $8.7 and $8.0 million in 2008, 2007 and 2006, respectively.

F-38

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

Warranty Claims

The Company provides certain limited warranties covering most of its residential roofing products for periods generally ranging from 20 to 50 years, although certain product lines provide for a lifetime limited warranty. The Company also offers certain limited warranties of varying duration covering most of its commercial roofing products. Most of the Company's specialty building products and accessories carry limited warranties for periods generally ranging from 5 to 20 years, with lifetime limited warranties on certain products. The accrual for product warranty claims is estimated on the basis of historical and projected claims activity, as well as other factors. The accuracy of the estimate of additional costs is dependent on both the number and cost of future claims submitted during the warranty periods. The Company believes that the accruals established for estimated probable future product warranty claims are adequate. If actual claims differ from these estimates, adjustments to this accrual may be required. The Company provides product warranties, which are only subject to the disclosure requirements under FASB Interpretation No. ("FIN") 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others".

The accrual for product warranty claims consists of the following, which for 2007 includes Elk from the date of acquisition:

	2008			2007

	(Thousands)
Balance, January 1	$	44,724		$	26,971
Charged to cost of products sold		19,079			20,997
Payments/deductions		(18,838	)		(16,919	)
Acquisition of Elk		—			13,675

Balance, December 31	$	44,965		$	44,724

Deferred Revenue and Extended Product Warranty

The Company offers extended warranty contracts on sales of its commercial roofing products. The life of these commercial warranties range from 10 to 20 years. In addition, the Company offers enhanced warranties on certain of its residential roofing products. These enhanced warranties are the "Golden Pledge Warranty™" and "Peace of Mind™" warranty programs. All revenue for the sale of these warranty programs is deferred and amortized on a straight-line basis over the life of these warranty programs, which is in accordance with the accounting prescribed by FASB Technical Bulletin No. 90-1 "Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts". Incremental direct costs associated with the acquisition of the extended warranty contracts are capitalized and amortized on a straight-line basis over the average life of these warranty programs. Current costs of services performed related to claims paid under these warranty programs are expensed as incurred. The analysis of these warranty programs as of December 31, 2008 indicated that deferred revenue is in excess of deferred costs and accordingly, no loss was recognized. However, if the total expected costs of providing services under these warranty programs exceed deferred revenues less deferred costs, then a loss would be recognized.

At December 31, 2008 and 2007, the Company had deferred revenue of $77.8 and $70.8 million, of which $10.9 and $8.0 million is included in other current liabilities and $66.9 and $62.8 million is

F-39

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

included in other liabilities, respectively. At December 31, 2008 and 2007, the Company also had deferred costs of $53.0 and $46.6 million, of which $7.2 and $5.1 million is included in other current assets and $45.8 and $41.5 million is included in other assets.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established to offset any deferred tax asset if it is more-likely-than-not that some or all of the deferred tax asset will not be realized. The determination of the amount of a valuation allowance to be provided on recorded deferred tax assets involves estimates regarding (1) the timing and amount of the reversal of taxable temporary differences, (2) expected future taxable income and (3) the impact of tax planning strategies. In assessing the need for a valuation allowance, the Company considers past operating results, projections of future taxable income and the feasibility of ongoing tax planning strategies. The projections of future taxable income include a number of estimates and assumptions regarding our volume, pricing and costs. Additionally, valuation allowances related to deferred tax assets can be impacted by changes to tax laws. The Company is party to a tax sharing agreement (the "Tax Sharing Agreement").

The Company uses judgment in determining income tax provisions under SFAS No. 109 "Accounting for Income Taxes" ("SFAS No. 109") and in evaluating its tax positions. Additional provisions for income taxes are established when, despite the belief that tax positions are fully supportable, there remain certain positions that do not meet the minimum probability threshold as defined by FIN 48, "Accounting for Uncertainty in Income Taxes ("FIN 48"), which the Company adopted January 1, 2007, which is a tax position that is more-likely-than-not to be sustained upon examination by the applicable taxing authority. The Company and its subsidiaries are examined by various Federal and state tax authorities. The Company regularly assesses the potential outcomes of these examinations and any future examinations for the current or prior years in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, the current tax liability and deferred taxes in the period in which the facts that give rise to a revision become known. See Note 9.

Environmental Liabilities

The Company, together with other companies, is a party to a variety of proceedings and lawsuits involving environmental matters under the U.S. Comprehensive Environmental Response Compensation and Liability Act, and similar state laws, in which recovery is sought for the cost of cleanup of contaminated sites or remedial obligations are imposed, a number of which are in the early stages or have been dormant for protracted periods. The Company refers to these proceedings and lawsuits as "Environmental Claims."

F-40

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

The Company accrues environmental costs when it is probable that it has incurred a liability and the expected amount can be reasonably estimated and, reviews on an ongoing basis, its estimated environmental liabilities. The amount accrued reflects the Company's assumptions about remedial requirements at the contaminated site, the nature of the remedy, the outcome of discussions with regulatory agencies and other potential responsible parties at multi-party sites and the number and financial viability of other potentially responsible parties. Adverse decisions or events, particularly as to increases in remedial costs, discovery of new contamination, assertion of natural resource damages, and the liability and the financial responsibility of the Company's insurers and of the other parties involved at each site and their insurers, could cause the Company to increase its estimate of its liability in respect of those matters. The Company estimates that its liability as of December 31, 2008, in respect of assumed and other environmental liabilities, is $2.6 million, and expects insurance recoveries of $1.7 million. Insurance recoveries relate to amounts previously provided for in the consolidated balance sheets. The Company refers to these recoveries as "estimated recoveries." The Company's liability is reflected on an undiscounted basis. The gross environmental liability is included within accrued liabilities and other liabilities, and the estimated recoveries are included within other noncurrent assets. It is not currently possible to estimate the amount or range of any additional liabilities or whether any such liabilities exist.

Pension and Other Postemployment Benefits

The Company maintains defined benefit plans that provide eligible employees with retirement benefits. In addition, while the Company generally does not provide postretirement medical and life insurance benefits, it subsidizes life insurance benefits for certain employees and retirees. The costs and obligations related to these benefits reflect the Company's assumptions related to general economic conditions (particularly interest rates), expected return on plan assets and rate of compensation increases for employees. The Company sets the discount rate assumption annually for its retirement-related benefit plans at the measurement dates to reflect the yield of high-quality fixed-income debt instruments. The expected long-term rate of return on assets is derived from a detailed periodic study conducted by the Company's actuaries and its senior executives. The study includes a review of anticipated future long-term performance of individual asset categories. While the study gives appropriate consideration to recent plan performance and historical returns, the assumption is primarily a long-term prospective rate. The Company's discount rate as of December 31, 2008 and 2007 for determining projected benefit obligations was 6.25% and 6.25%, respectively. A 25 basis point increase or decrease in the discount rate assumption would result in a plus or minus $0.2 million impact on pension expense and a plus or minus $1.5 million impact on the projected benefit obligation. The Company's expected long-term rate of return on assets assumption for its retirement plans was 9.5% in 2008 and 2007. In addition, a 25 basis point increase or decrease in the expected long-term rate of return on assets assumption would result in a plus or minus $0.1 million impact on pension expense.

2001 Long-Term Incentive Plan

The Company measures compensation in accordance with SFAS No. 123(R) "Share-Based Payment," which requires compensation costs related to share-based payments to be recognized in the

F-41

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

financial statements. The Company measures compensation as the amount by which the Book Value (as defined in the Company's 2001 Long-Term Incentive Plan) of the incentive units covered by the grant exceeds the option price or value specified of such incentive units at the date of grant. Changes, either increases or decreases, in the Book Value of those incentive units between the date of grant and the measurement date result in a change in the measure of compensation for the right or award. See Note 15.

Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) and its components in the Company's consolidated financial statements include net income (loss), losses from derivative instruments and hedging activities, net of tax effect, pension plan adjustments, net of tax effect, and postretirement plan adjustments, net of tax effect. The Company has disclosed comprehensive income (loss) in the consolidated statements of stockholders' equity (deficit).

Changes in the components of accumulated other comprehensive income (loss) for the years 2008, 2007 and 2006 are as follows:

	Postretirement Plan Adjustment			Pension Plan Adjustment			Interest Rate Swap Adjustment			Treasury Lock Adjustment			Accumulated Other Comprehensive Income (Loss)

	(Thousands)
Balance, December 31, 2005	$	—		$	(5,410	)	$	—		$	—		$	(5,410	)

Change for the year 2006, net of tax of $(3,197)		3,999			1,445			—			—			5,444

Balance, December 31, 2006		3,999			(3,965	)		—			—			34

Change for the year 2007, net of tax of $14,484		(389	)		(1,760	)		(18,588	)		(2,896	)		(23,633	)

Balance, December 31, 2007		3,610			(5,725	)		(18,588	)		(2,896	)		(23,599	)

Change for the year 2008, net of tax of $16,721		(500	)		(2,159	)		(25,093	)		470			(27,282	)

Balance, December 31, 2008	$	3,110		$	(7,884	)	$	(43,681	)	$	(2,426	)	$	(50,881	)

Concentration of Credit Risk

Financial instruments which potentially subject the Company to a concentration of credit risk principally consist of cash equivalents, trade receivables and the Company's derivative instruments. The Company places its temporary cash investments with highly-rated U.S. Government instruments, commercial paper of prime quality and certain time deposits. To reduce credit risk, the Company performs periodic credit evaluations of its customers while monitoring the credit worthiness of its customers to which it extends credit, but does not generally require advance payments or collateral. Concentration of credit risk with respect to trade receivables is generally limited other than to those significant customers as discussed in Note 18, as the Company's remaining customer base is comprised of a large number of other individual customers. The terms and conditions of the Company's credit type sales are specifically designed to mitigate concentration of credit risk with any single customer.

F-42

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 2. Summary of Significant Accounting Policies (Continued)

The Company's long-term derivative instruments expose it to counterparty credit risk for nonperformance and to credit market risk related to changes in variable interest rates. The Company manages its exposure to counterparty credit risk through diversification of counterparties and manages its variable interest rate risk through its fixed income interest rate swaps. See Note 13 for further discussion.

Reclassifications

Certain reclassifications have been made to conform to current year presentation.

Note 3. Recent Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115" ("SFAS No. 159"), which permits entities to elect to measure specified financial instruments and warranty and insurance contracts at fair value on a contract-by-contract basis, with changes in fair value recognized in earnings each reporting period. The election, called the "fair value option," will enable some companies to reduce the volatility in reported earnings caused by measuring related assets and liabilities differently, and it is simpler than using the complex hedge-accounting provisions of SFAS No. 133 to achieve similar results. SFAS No. 159 applies to all entities and contains financial statement presentation and disclosure requirements for assets and liabilities reported at fair value as a consequence of the election. SFAS No. 159 is expected to expand the use of fair value measurements for financial instruments and was effective for fiscal years beginning after November 15, 2007. The Company adopted the provisions of SFAS No. 159 beginning January 1, 2008 and, upon adoption, did not elect the fair value option for items within the scope of SFAS No. 159. Therefore, SFAS No. 159 did not have any impact on the Company's consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007) "Business Combinations" ("SFAS No. 141R") which provides revised guidance on how an acquiring company should recognize and measure the identifiable assets acquired, liabilities assumed, any noncontrolling interests, and goodwill acquired in a business combination. SFAS No. 141R also expands the required disclosures related to the nature and financial statement effects of business combinations and is effective, on a prospective basis, for business combinations completed in fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 141R for its fiscal year beginning January 1, 2009 and, therefore, will apply SFAS No. 141R prospectively to any business combinations subsequent to that date.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements," ("SFAS No. 160"). SFAS No. 160 establishes requirements for ownership interests in subsidiaries held by parties other than the Company (minority interests) be clearly identified and disclosed in the consolidated statement of financial position within equity, but separate from the parent's equity. Any changes in the parent's ownership interests are required to be accounted for in a consistent manner as equity transactions and any noncontrolling equity investments in deconsolidated subsidiaries must be measured initially at fair value. SFAS No. 160 is effective, on a prospective basis, for fiscal years beginning after December 15, 2008, and upon adoption, the presentation and disclosure requirements must be retrospectively applied to comparative financial statements. The Company will adopt SFAS No. 160 in its fiscal year beginning January 1, 2009, and the

F-43

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3. Recent Accounting Pronouncements (Continued)

Company does not expect the adoption to have any impact on its results of operations or financial position as it does not have any noncontrolling interests.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS No. 161"), which amends SFAS No. 133 and is intended to improve financial reporting related to derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. The provisions of SFAS No. 161 are effective on a prospective basis for fiscal years beginning on or after November 15, 2008. The Company will adopt the disclosure provisions of SFAS No. 161 for its fiscal year beginning January 1, 2009, which may increase disclosures in the financial statements related to the Company's derivative instruments.

In April 2008, the FASB issued FSP No. 142-3, "Determination of the Useful Life of Intangible Assets", ("FSP No. 142-3"), which amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142, "Goodwill and Other Intangible Assets". This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP No. 142-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. Early adoption of FSP No. 142-3 is prohibited. The Company will adopt the provisions of FSP No. 142-3 for its fiscal year beginning January 1, 2009 and is currently evaluating the impact, if any, that FSP No. 142-3 will have on its financial statements.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS No. 162"), which identifies the sources of accounting principles and the framework for selecting principles to be used in the preparation and presentation of financial statements in accordance with United States generally accepted accounting principles. SFAS No. 162 will be effective 60 days after the SEC approves the Public Company Accounting Oversight Board's amendments to Interim Audit Standards Section 411, "The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." The Company will adopt the provisions and evaluate the impact of SFAS No. 162 upon its effective date.

In December 2008, the FASB issued FSP No. 132(R)-1, "Employers Disclosures about Postretirement Benefit Plan Assets" ("FSP No. 132(R)-1"), which provides additional guidance on an employers' disclosures about plan assets of a defined benefit pension or other post retirement plan. FSP No. 132(R)-1 is effective for financial statements issued for fiscal years ending after December 15, 2009. The Company will adopt the provisions of FSP No. 132(R)-1 for its fiscal year beginning January 1, 2010, which will increase the disclosures in the financial statements related to the assets held by its defined pension and postretirement plans.

Note 4. Acquisition

On February 22, 2007, a subsidiary of BMCA acquired approximately 90% of Elk common shares at a purchase price of $43.50 per common share. On March 26, 2007, the Company acquired the remaining Elk common shares in a second step merger in exchange for the right to receive $43.50 per share in cash, which resulted in Elk, which became an indirect wholly-owned subsidiary of BMCA. The Company completed the acquisition at a purchase price of approximately $945.6 million, net of the repayment of $195.0 million of the then outstanding Elk senior notes, which were assumed in connection with the acquisition and were repaid in March 2007.

F-44

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4. Acquisition (Continued)

The Company accounted for the Elk acquisition under the purchase method of accounting as prescribed by SFAS No. 141 "Business Combinations" ("SFAS No. 141"), which requires the total purchase price to be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the date of acquisition, with amounts exceeding their fair value being recorded as goodwill. During its first quarter ended March 30, 2008, the Company completed its purchase price allocation of the assets acquired and liabilities assumed from Elk (see table below). The operating results of Elk are included in the Company's results of operations from the date of acquisition.


Goodwill	$	588,850

Intangible assets	$	214,420

Total assets acquired	$	1,411,590
Total liabilities assumed		(465,941	)

Net assets acquired	$	945,649

During the second quarter of 2007, the Company initiated a restructuring plan (the "2007 Restructuring Plan") (see Note 5), which it formulated in connection with the acquisition of Elk. Also, in connection with the Elk acquisition and pursuant to SFAS No. 141 and Emerging Issues Task Force ("EITF") No. 95-3 "Recognition of Liabilities in Connection with a Purchase Business Combination" ("EITF No. 95-3"), the Company identified $8.7 million in purchase accounting adjustments, which related to employee severance payments to former Elk employees and lease termination expenses. As of December 31, 2008 and 2007, the Company paid an aggregate of $2.9 and $2.5 million for employee severance costs, respectively, and $1.6 and $0.6 million for lease termination expenses, respectively. As of December 31, 2008, the Company expects to make approximately $4.2 million of aggregate lease termination payments through 2019. The Company's employee severance payments included the termination of approximately 130 Elk employees, including certain management positions, in the manufacturing and selling and administrative areas.

Note 5. Restructuring and Other Expenses

The 2007 Restructuring Plan was created to eliminate cost redundancies recognized due to the acquisition of Elk and to reduce the Company's current cost structure. The 2007 Restructuring Plan has been fully implemented as of December 31, 2008. The Company accounts for its restructuring activities in accordance with SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities," SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" and EITF No. 96-9 "Classification of Inventory Markdowns and Other Costs Associated with Restructuring."

2007 Restructuring and Other Expenses

In connection with the acquisition of Elk, the Company identified $191.9 million in restructuring and other expenses in its fiscal year ended December 31, 2007, of which $97.0 million related to property, plant and equipment write-downs at certain existing manufacturing facilities and $25.1 million related to plant closing expenses. Restructuring and other expenses also included $2.0 million in

F-45

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Restructuring and Other Expenses (Continued)

employee severance payments and $67.8 million in integration-related expenses, which primarily consisted of $24.3 million of inventory-related write-downs, $15.1 million of restructuring-related sales discounts, $1.4 million of lease termination expenses and $27.0 million of other integration expenses.

The Company recorded $181.0 million of the aforementioned restructuring and other expenses in its statement of operations during its fiscal year ended December 31, 2007, of which $15.1 million was reflected as a reduction in net sales due to restructuring-related sales discounts, $24.3 million was charged to cost of products sold and $141.6 million was charged to restructuring and other expenses.

2008 Restructuring and Other Expenses

The Company identified an additional $64.1 million of restructuring and other expenses in its fiscal year ended December 31, 2008, which included $14.2 million of plant closing expenses, $3.3 million in employee severance payments and $46.6 million in integration-related expenses. Integration-related expenses primarily consisted of $26.9 million of inventory write-downs, $6.1 million of restructuring-related sales discounts and $13.6 million of other integration expenses.

The Company recorded $73.2 million of the identified restructuring and other expenses in its statement of operations during its fiscal year ended December 31, 2008, of which $6.1 million was reflected as a reduction in net sales due to restructuring-related sales discounts, $26.9 million was charged to cost of products sold and $40.2 million was charged to restructuring and other expenses. The Company expects to incur the remaining $1.8 million of identified integration and other expenses and to make the remaining cash payments related to its accrual when they are required.

The table below details the Company's restructuring and other expense accruals and charges made against the accrual during its fiscal year ended December 31, 2008:

Restructuring and Other Expenses	Plant Closing Expenses			Employee Severance Payments			Integration Expenses			Total

	(Thousands)
Beginning balance, as of December 31, 2007	$	2,905		$	—		$	10,945		$	13,850
Current period costs, net		17,791			3,259			52,169			73,219
Cash payments		(23,409	)		(3,259	)		(49,672	)		(76,340	)
Amount related to property, plant and equipment for asset adjustments		6,228			—			(354	)		5,874
Amount charged to write-off inventory		(63	)		—			(6,735	)		(6,798	)
Non-cash items		—			—			(1,148	)		(1,148	)

Ending balance, as of December 31, 2008	$	3,452		$	—		$	5,205		$	8,657

The Company's aggregate employee severance payments included the termination of approximately 100 BMCA employees, including certain management positions, in the manufacturing and selling and administrative areas.

Note 6. Goodwill

The Company evaluated the recoverability of goodwill for its roofing products and specialty building products and accessories reporting units. The Company's methodology included evaluations using estimated future discounted cash flows, multiples of net sales and multiples of earnings before

F-46

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 6. Goodwill (Continued)

interest, taxes, depreciation and the amortization of intangibles and other assets ("EBITDA"). The Company's analysis was completed for each of the reporting units to which the goodwill relates. If the estimated range of fair values from the methodologies employed are less than the carrying value of the related reporting unit, impairment losses for goodwill are charged to results of operations. In determining the estimated future discounted cash flows, the Company considered projected future levels of income, future business trends and market and economic conditions. The Company's analysis related to multiples of net sales and EBITDA are based on related industry data. The Company prepared a SFAS No. 142 impairment analysis at December 31, 2008 and 2007 and determined that no impairment existed.

The carrying amount of goodwill was $653.6 and $655.2 million as of December 31, 2008 and 2007. Such goodwill amounts to $648.1 and $649.7 million for the roofing products reporting unit and $5.5 and $5.5 million related to the specialty building products and accessories reporting unit as of December 31, 2008 and 2007, respectively.

Note 7. Intangible Assets

The Company accounts for its intangible assets in accordance with the provisions of SFAS No. 142. SFAS No. 142 requires disclosure of information relating to intangible assets subsequent to their acquisition that was not previously reported, which includes disclosure concerning the changes in the carrying amount of intangible assets by major intangible asset class for those assets subject to amortization and for those not subject to amortization. SFAS No. 142 also requires disclosure related to actual year-to-date intangible asset amortization expense and the estimated intangible asset amortization expense for each of the next five years. As of December 31, 2008, the Company has not recorded any impairment losses related to its intangible assets.

Intangible assets consisted of the following:

					December 31, 2008						December 31, 2007

			Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
					(Thousands)
Intangible Assets Subject to Amortization:
	Customer Relationships			20 yrs.	$	138,350	$	10,554	$	127,796	$	138,350	$	3,634	$	134,716
	Trademark/Trade Names			15-25 yrs.		50,200		3,169		47,031		50,200		1,118		49,082
	Core Technology			10 yrs.		23,200		3,525		19,675		23,200		1,205		21,995
	Roofing Backlog—Current			1 yr		780		780		—		780		780		—
	Computer Software			2 yrs.		190		142		48		190		48		142

		Total Intangible Assets Subject to Amortization			$	212,720	$	18,170	$	194,550	$	212,720	$	6,785	$	205,935

Intangible Assets Not Subject to Amortization:
	Regulatory Permits			Indefinite		1,700		—		1,700		1,700		—		1,700

		Total Intangible Assets Not Subject to Amortization			$	1,700	$	—	$	1,700	$	1,700	$	—	$	1,700

		Intangible Assets, net			$	214,420	$	18,170	$	196,250	$	214,420	$	6,785	$	207,635

F-47

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7. Intangible Assets (Continued)

The aggregate intangible asset amortization expense for the Company's fiscal years ended December 31, 2008 and 2007 was $11.4 and $6.8 million, respectively. The following table summarizes, as of December 31, 2008, the amount of estimated amortization expense the Company expects to record in its statement of operations related to intangible assets for each of the next five years and thereafter.

	(Thousands)

2009	$	11,335
2010		11,288
2011		11,288
2012		11,288
2013		11,288
Thereafter		138,063

Total	$	194,550

Note 8. Asbestos-related Bodily Injury Claims

In connection with its formation, the Company contractually assumed and agreed to pay the first $204.4 million of liabilities of its indirect parent, G-I Holdings, for asbestos-related bodily injury claims relating to the inhalation of asbestos fiber contained in products sold by G-I Holdings or its predecessors ("Asbestos Claims"). As of March 30, 1997, the Company paid all of its assumed liabilities for Asbestos Claims. G-I Holdings has agreed to indemnify the Company against any other existing or future Asbestos Claims if asserted against the Company. In January 2001, G-I Holdings filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code due to Asbestos Claims. Most Asbestos Claims do not specify the amount of damages sought, and the value of the Asbestos Claims asserted against G-I Holdings is a contested issue in that bankruptcy, which remains pending.

Claimants in the G-I Holdings' bankruptcy, including judgment creditors, might seek to satisfy their claims by asking the Bankruptcy Court to require the sale of G-I Holdings' assets, including its holdings of BMCA Holdings Corporation's common stock and its indirect holdings of the Company's common stock. Such action could result in a change of control of the Company. In addition, those creditors may attempt to assert Asbestos Claims against the Company. (Approximately 1,900 Asbestos Claims were filed against the Company prior to February 2, 2001.) The Company believes that it will not sustain any liability in connection with these or any other Asbestos Claims. On February 2, 2001, the United States Bankruptcy Court for the District of New Jersey issued a temporary restraining order enjoining any existing or future claimant from bringing or prosecuting an Asbestos Claim against the Company. By oral opinion on June 22, 2001, and written order entered February 22, 2002, the Bankruptcy Court converted the temporary restraints into a preliminary injunction, prohibiting the bringing or prosecution of any such Asbestos Claims against the Company.

F-48

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8. Asbestos-related Bodily Injury Claims (Continued)

that BMCA has successor liability for Asbestos Claims against G-I Holdings and that it is the alter ego of G-I Holdings. On May 13, 2003, the United States District Court for the District of New Jersey overseeing the G-I Holdings' Bankruptcy Court withdrew the reference of the BMCA Action from the Bankruptcy Court. By order dated May 30, 2008, the District Court dismissed the BMCA Action without ruling on the merits of BMCA's position that it has no successor liability for Asbestos Claims. The District Court ruled that a Federal court declaratory judgment action was not the proper vehicle for resolving this issue. The District Court's ruling did not affect the preliminary injunction enjoining the prosecution of Asbestos Claims against BMCA, and the Company believes that it does not have liability for Asbestos Claims. Nevertheless, it is not possible to predict the outcome of any subsequent litigation regarding the continuation of the preliminary injunction and/or prosecution of Asbestos Claims against the Company.

On or about February 8, 2001, the creditors' committee filed a complaint in the United States Bankruptcy Court, District of New Jersey against G-I Holdings and the Company. The complaint requests substantive consolidation of BMCA with G-I Holdings or an order directing G-I Holdings to cause BMCA to file for bankruptcy protection. The plaintiffs also filed for interim relief absent the granting of their requested relief described above. On March 21, 2001, the Bankruptcy Court denied plaintiffs' application for interim relief. In November 2002, the creditors' committee, joined in by the legal representative of present and future holders of asbestos-related claims, filed a motion for appointment of a trustee in the G-I Holdings' bankruptcy. In December 2002, the Bankruptcy Court denied the motion. The creditors' committee appealed the ruling to the United States District Court, which denied the appeal on June 27, 2003. The creditors' committee appealed the denial to the Third Circuit Court of Appeals, which denied the appeal on September 24, 2004. The creditors' committee filed a petition with the Third Circuit Court of Appeals for a rehearing of its denial of the creditors' committee's appeal, which was denied by the Court of Appeals on October 26, 2004.

On July 7, 2004, the Bankruptcy Court entered an order authorizing the creditors' committee to commence an adversary proceeding against the Company and others challenging, as a fraudulent conveyance, certain transactions entered into in connection with the Company's formation in 1994, in which G-I Holdings caused to be transferred to the Company all of its roofing business and assets and in which the Company assumed certain liabilities relating to those assets, including a specified amount of liabilities for Asbestos Claims (the "1994 transaction"). The Bankruptcy Court also permitted the creditors' committee to pursue a claim against holders of the Company's bank and bond debt outstanding in 2000, seeking recovery from them, based on the creditors' committee's theory that the 1994 transaction was a fraudulent conveyance. On July 20, 2004, the creditors' committee appealed certain aspects of the Bankruptcy Court's order (and a June 8, 2004 decision upon which the order was based). G-I Holdings, the holders of the Company's bank and bond debt and BMCA cross-appealed. The District Court entered an order on June 21, 2006 affirming in part and vacating in part the Bankruptcy Court's July 7, 2004 order. Among other things, the District Court vacated that aspect of the Bankruptcy Court's order authorizing the creditors' committee to pursue avoidance claims against the Company and the holders of the Company's bank and bond debt as of 2000. This issue has been remanded to the Bankruptcy Court for further proceedings consistent with the District Court's opinion. By order dated August 22, 2008, the Bankruptcy Court stayed this authorization proceeding and other adversary proceedings effective upon the filing of a Joint Plan of Reorganization by G-I Holdings, the creditors' committee and the legal representative of present and future holders of asbestos-related claims. The Company believes the creditors' committee's avoidance claims are without merit and, in the

F-49

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8. Asbestos-related Bodily Injury Claims (Continued)

event the stay is terminated, the Bankruptcy Court should not permit the creditors' committee to pursue such claims against the Company and the holders of its bank and bond debt as of 2000.

The Company has been advised by G-I Holdings that on August 12, 2008, G-I Holdings reached an agreement with the creditors' committee and the legal representative of present and future holders of asbestos-related claims to jointly file a plan of reorganization with the Bankruptcy Court that will provide for settlement of Asbestos Claims and all related litigation. The agreement is subject to a number of contingencies, but if the contingencies are met and the reorganization plan is confirmed, all of the actions described above will be resolved. If the bankruptcy is not resolved, the Company and G-I Holdings intend to vigorously defend all litigations related thereto. A Joint Plan of Reorganization of G-I Holdings was filed with the Bankruptcy Court on August 21, 2008, and a First Amended Joint Plan of Reorganization of G-I Holdings was filed with the Bankruptcy Court on October 30, 2008. G-I Holdings filed a Second Amended Joint Plan of Reorganization of G-I Holdings with the Bankruptcy Court on December 3, 2008.

If the reorganization plan is not confirmed and the Company is not successful in defending against one or more of the claims, the Company may be forced to file for bankruptcy protection and/or contribute all or a substantial portion of its assets to satisfy the claims of G-I Holdings' creditors. Either of these events, or the substantive consolidation of G-I Holdings and the Company, would weaken its operations and cause it to divert a material amount of its cash flow to satisfy the asbestos claims of G-I Holdings and may render it unable to pay interest or principal on its Senior Secured Credit Facilities and Senior Notes (see Long-Term Debt below).

For a further discussion with respect to the history of the foregoing litigation, and asbestos-related matters and other litigation, see Notes 2, 9, 12 and 18.

Note 9. Income Taxes

Income tax (expense) benefit, which has been computed on a separate return basis, consists of the following:

			Year Ended December 31,

			2008			2007			2006
			(Thousands)
Federal:
	Current		$	(1,846	)	$	884		$	(15,772	)
	Deferred			(29,378	)		76,955			(5,269	)

		Total Federal		(31,224	)		77,839			(21,041	)

State and local:
	Current			3,773			(7,206	)		(6,055	)
	Deferred			40			3,679			2,498

		Total state and local		3,813			(3,527	)		(3,557	)

Income tax (expense) benefit			$	(27,411	)	$	74,312		$	(24,598	)

F-50

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Income Taxes (Continued)

The differences between the income tax (expense) benefit computed by applying the statutory Federal income tax rate to pre-tax income (loss), and the income tax (expense) benefit reflected in the consolidated statements of operations are as follows:

		Year Ended December 31,

		2008			2007			2006
		(Thousands)
Statutory (expense) benefit		$	(27,598	)	$	73,093		$	(22,172	)
Impact of:
	State and local taxes, net of Federal benefits		2,200			(2,385	)		(2,312	)
	Other, net		(2,013	)		3,604			(114	)

Income tax (expense) benefit		$	(27,411	)	$	74,312		$	(24,598	)

The components of the net deferred tax liabilities are as follows:

		December 31,

		2008			2007
		(Thousands)
Deferred tax liabilities related to:
	Property, plant and equipment	$	(69,630	)	$	(51,700	)
	Intangible assets		(81,496	)		(85,264	)

	Total deferred tax liabilities		(151,126	)		(136,964	)

Deferred tax assets related to:
	Expenses not yet deducted for tax purposes		95,803			79,083
	Net operating loss carryforwards		37,481			45,664
	Valuation allowance		(18,755	)		(10,635	)
	Carryover credits		2,818			—

	Total deferred tax assets		117,347			114,112

Net deferred tax liabilities			(33,779	)		(22,852	)
Deferred tax assets reclassified to current assets			(39,324	)		(38,017	)

Noncurrent deferred tax liabilities		$	(73,103	)	$	(60,869	)

Based upon the level of historical taxable income, the reversal of temporary differences and projections for future taxable income over the period in which the Company's deferred tax assets are deductible, the Company believes that it is more-likely-than-not that the Company will realize the benefits of its deductible temporary differences at December 31, 2008 and 2007 and that a valuation allowance is not required with respect to the Federal net operating loss carryforward (after-tax) of $14.7 million or Federal credit carryovers of $2.8 million. State net operating loss carryforwards (after-tax) of $4.0 million and $3.1 million at December 31, 2008 and December 31, 2007 are net of a valuation allowance for separate Company state filings of $18.8 million and $10.6 million, respectively.

As of December 31, 2008 and 2007, the Company has included on its consolidated balance sheets a tax receivable from parent corporation of $8.4 and $10.0 million, respectively, representing amounts paid in excess of amounts due to G-I Holdings with respect to 2006 under the Tax Sharing Agreement

F-51

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Income Taxes (Continued)

(as defined below). The Company expects to utilize the remaining receivable balance at December 31, 2008 during 2009. In addition, as of December 31, 2007, the Company included on its consolidated balance sheet a tax receivable from the Internal Revenue Service (the "IRS") of $12.0 million related to the acquisition of Elk that was received in 2008.

The Company and its subsidiaries entered into the Tax Sharing Agreement dated January 31, 1994 and later amended on March 19, 2001, with G-I Holdings, with respect to the payment of Federal income taxes and related matters. During the term of the Tax Sharing Agreement, which is effective for the period during which the Company or any of its domestic subsidiaries is included in a consolidated Federal income tax return for the G Holdings' consolidated tax group, the Company is obligated to pay G Holdings an amount equal to those Federal income taxes it would have incurred if the Company, on behalf of itself and its domestic subsidiaries, filed its own Federal income tax return. Unused tax attributes will carry forward for use in reducing amounts payable by the Company to G Holdings in future years, but cannot be carried back. The Company's unused tax attributes currently consist of a net operating loss carryforward of $42.1 million, which will not expire until 2027. If the Company were to leave the G Holdings' consolidated tax group, it would be required to pay to G Holdings the value of any tax attributes to which it would succeed under the consolidated return regulations to the extent the tax attributes reduced the amounts otherwise payable by the Company under the Tax Sharing Agreement. Under limited circumstances, the provisions of the Tax Sharing Agreement could result in the Company having a greater liability under the agreement than it would have had if it and its domestic subsidiaries had each filed its own separate Federal income tax return. Under the Tax Sharing Agreement, the Company and each of its domestic subsidiaries are responsible for any taxes that would be payable by reason of any adjustment to the tax returns of G Holdings or its subsidiaries for years prior to the adoption of the Tax Sharing Agreement that relate to the Company's business or assets or the business or assets of any of its domestic subsidiaries. Although, as a member of the G Holdings' consolidated tax group, the Company is severally liable for certain Federal income tax liabilities of the G Holdings' consolidated tax group, including tax liabilities not related to its business, the Company should have no liability other than liabilities arising from the Company's operations and the operations of its domestic subsidiaries and tax liabilities for tax years pre-dating the Tax Sharing Agreement that relate to the Company's business or assets and the business or assets of any of its domestic subsidiaries. The Tax Sharing Agreement provides for analogous principles to be applied to any consolidated, combined or unitary state or local income taxes. Under the Tax Sharing Agreement, G Holdings makes all decisions with respect to all matters relating to taxes of the G Holdings' consolidated tax group. The provisions of the Tax Sharing Agreement take into account both the Federal income taxes the Company would have incurred if it filed its own separate Federal income tax return and the fact that the Company is a member of the G Holdings' consolidated tax group for Federal income tax purposes.

On September 15, 1997, G-I Holdings received a notice from the IRS of a deficiency in the amount of $84.4 million (after taking into account the use of net operating losses and foreign tax credits otherwise available for use in later years) in connection with the formation in 1990 of Rhône-Poulenc Surfactants and Specialties, L.P. (the "surfactants partnership"), a partnership in which G-I Holdings held an interest. On September 21, 2001, the IRS filed a proof of claim with respect to such deficiency against G-I Holdings in the G-I Holdings' bankruptcy. If such proof of claim is sustained for years in which the Company was part of the G-I Holdings tax group, the Company and/or certain of the Company's subsidiaries together with G-I Holdings and several current and former subsidiaries of G-I Holdings could be severally liable for those taxes and interest. G-I Holdings has filed an objection

F-52

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Income Taxes (Continued)

to the proof of claim, which is the subject of an adversary proceeding pending in the United States District Court for the District of New Jersey. By opinion and order dated September 8, 2006, the District Court ruled on the parties' respective motions for Partial Summary Judgment, granting the government summary judgment on the issue of "adequate disclosure" for statute of limitation purposes and denying G-I Holdings summary judgment on its other statute of limitations defense (finding material issues of fact that must be tried). If the IRS were to prevail for the years in which the Company and/or certain of its subsidiaries were not part of the G-I Holdings tax group, the Company nevertheless could be liable for approximately $40.0 million in taxes plus interest, although this calculation is subject to uncertainty depending upon various factors including G-I Holdings' ability to satisfy its tax liabilities and the application of tax credits and deductions. In an opinion dated June 8, 2007, the District Court decided that G-I Holdings cannot avail itself of the "binding contract" transitional relief with respect to the 1999 distribution of U.S. Treasury Bonds to G-I Holdings. The Company believes that it will not be required to pay any incremental income tax to the Federal government with respect to this matter and that its ultimate disposition will not have a material adverse effect on its business, financial position or results of operations.

The Company adopted FIN 48 as of January 1, 2007 in a manner that is consistent with the provisions of FSP FIN 48-1, and, as a result of the adoption, the Company reviewed certain tax positions and determined that it did not need to recognize any material adjustment to its tax accruals for uncertain tax positions upon the FIN 48 adoption date. At December 31, 2008 and December 31, 2007, the Company had approximately $13.2 and $18.0 million, respectively, of unrecognized tax benefits excluding any Federal tax benefit on unrecognized state tax benefits. All of the unrecognized tax benefits would affect the Company's effective tax rate if recognized.

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

	2008			2007

	(Thousands)
Balance, January 1	$	17,965		$	14,009
Additions based on tax positions related to the current year		—			—
Additions for tax positions of prior years		2,410			4,097
Reductions for tax positions of prior years		(3,369	)		—
Lapses in statute of limitations		(26	)		—
Settlements		(3,737	)		(141	)

Balance, December 31	$	13,243		$	17,965

It is reasonably possible that as a consequence of the settlement of certain state tax matters, the balance of unrecognized tax benefits may decrease by a range of $0.1 million to $1.0 million during the next 12-month period.

In August 2008, the Company paid $3.7 million in settlement of an outstanding state income tax matter related to tax years 1999 through 2006. In October 2008, the Company was assessed interest and penalties related to the tax matter, which the Company paid during its fourth quarter ended December 31, 2008. The interest and penalties did not have a material effect on the Company's statement of operations.

F-53

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Income Taxes (Continued)

The Company recognizes interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2008 and December 31, 2007, the Company had $5.4 and $7.5 million, respectively, of accrued interest and penalties excluding any Federal tax benefit thereon.

The Company and its subsidiaries are subject to United States Federal income tax as well as the income tax of multiple state jurisdictions. The Company has substantially concluded all United States Federal income tax audit proceedings for years through 2004. The tax years 2005 through 2008 have not been examined by the IRS. Substantially all material state and local matters have been concluded for tax years through 2001. The tax years 2002 through 2008 are subject to examination by the major state taxing jurisdictions to which the Company is subject.

Note 10. Inventories

At December 31, 2008 and 2007, $97.6 and $59.8 million, respectively, of inventories were valued using the LIFO method. Inventories as of December 31, 2008 and 2007 consist of the following:

		December 31,

		2008			2007
		(Thousands)
Finished goods		$	271,373		$	241,511
Work-in process			41,225			26,291
Raw materials and supplies			94,381			72,950

	Total		406,979			340,752
Less LIFO reserve			(58,530	)		(23,840	)

Inventories, net		$	348,449		$	316,912

Note 11. Property, Plant and Equipment

Property, plant and equipment consist of the following:

		December 31,

		2008			2007
		(Thousands)
Land and land improvements		$	54,268		$	56,690
Buildings and building equipment			210,918			215,615
Machinery and equipment			702,084			670,171
Construction in progress			33,881			25,446

	Total		1,001,151			967,922
Less accumulated depreciation and amortization			(345,882	)		(295,109	)

Property, plant and equipment, net		$	655,269		$	672,813

F-54

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 11. Property, Plant and Equipment (Continued)

Included in the net book value of machinery and equipment at December 31, 2008 and December 31, 2007 was $54.1 and $62.0 million of assets under capital leases. Depreciation expense for 2008, 2007 and 2006 was $72.4, $69.0 and $49.3 million, respectively, including amortization expense related to the Company's capital leases in 2008 and 2007. See Note 12 for a description of the Company's sale-leaseback and capital lease transactions. See Note 5 for the write-down of property, plant and equipment included in 2007 restructuring expenses.

During 2008, the Company sold manufacturing facilities in Hollister, California and Stockton, California; property in Fresno, California; a distribution center in Waxahachie, Texas; and precious metals relating to its Nashville, Tennessee manufacturing facility.

Note 12. Long-Term Debt

Long-term debt consists of the following:

		December 31,

		2008			2007
		(Thousands)
8% Senior Notes due 2008		$	—		$	4,874
7³/4% Senior Notes due 2014			250,500			250,590
Borrowings under the Senior Secured Revolving Credit Facility			76,000			122,000
Term Loan			955,670			965,362
Junior Lien Term Loan			325,000			325,000
Obligations under capital leases			55,956			61,997
Industrial development revenue bond			2,820			7,710
Chester Loan			5,126			8,241
Other notes payable			7,693			8,251

	Total		1,678,765			1,754,025
Less current maturities			(20,596	)		(24,630	)

Long-term debt less current maturities		$	1,658,169		$	1,729,395

On February 22, 2007, BMCA and certain of its subsidiaries entered into the Senior Secured Revolving Credit Facility, the Term Loan, and a $325.0 million Bridge Loan Facility, which was subsequently replaced by a $325.0 million Junior Lien Term Loan Facility (the "Junior Lien Term Loan") on March 15, 2007, and collectively with the Senior Secured Revolving Credit Facility and the Term Loan (the "Senior Secured Credit Facilities"). The initial borrowings under the Senior Secured Credit Facilities were used to finance the purchase of Elk, refinance certain of BMCA's then outstanding debt and repay all of Elk's then outstanding senior notes of $195.0 million, which occurred on March 26, 2007.

All amounts outstanding under the Senior Secured Revolving Credit Facility, which has a maturity date of February 2012, are secured by a first-priority perfected security interest in all receivables, inventory, precious metals, deposit accounts and other current assets of BMCA and its domestic subsidiaries and all proceeds thereof (the "Senior Secured Revolving Credit Facility Collateral").

F-55

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Long-Term Debt (Continued)

Credit availability under the Senior Secured Revolving Credit Facility is based upon eligible accounts receivable, inventory and precious metals used in the production of inventory, as defined, and includes a sub-limit for letters of credit of $150.0 million. Loans under this facility bear interest at a variable rate based upon either the Base Rate or the Eurodollar Rate as defined in the Senior Secured Revolving Credit Facility, at the borrowers' option, plus a specified margin in each case. These interest rates are recalculated periodically based on changes in the Base Rate or Eurodollar Rate and also based on an availability-based pricing grid. The Senior Secured Revolving Credit Facility requires the Company to pay unused commitment fees. For 2008 and 2007, these commitment fees amounted to $0.6 and $0.7 million, respectively. The Senior Secured Revolving Credit Facility also provides for optional reductions by the Company in the overall $600.0 million commitment, under certain conditions and provides for optional and mandatory pre-payments of borrowings outstanding under the facility, subject to certain conditions. The Senior Secured Revolving Credit Facility also provides the borrowers with the ability to increase the size of the facility by up to $350.0 million, depending on the ability to obtain commitments from lenders and meeting specified conditions.

All amounts outstanding under the Term Loan, which has a maturity date of February 2014, are secured by (i) a first-priority perfected security interest in substantially all of the assets and properties of BMCA and its domestic subsidiaries, other than the Senior Secured Revolving Credit Facility Collateral (the "Term Loan Collateral") and (ii) a second-priority perfected security interest in the Senior Secured Revolving Credit Facility Collateral. Loans under this facility bear interest at a variable rate based upon either the Base Rate or Eurodollar Rate, as defined in the Term Loan, at the borrowers' option, plus a specified margin in each case. These interest rates are recalculated periodically based on changes in the Base Rate and Eurodollar Rate, if applicable. The Term Loan provides for optional and mandatory pre-payments under certain conditions and provides the borrowers with the ability to increase the size of the facility by up to $250.0 million (less any increase in the Senior Secured Revolving Credit Facility in excess of $100.0 million), depending on the ability to obtain commitments from lenders and meeting specified conditions.

Under the terms of the Company's Senior Secured Credit Facilities, the borrowers are subject to interest coverage ratio financial covenants and leverage ratio financial covenants, both as defined. In addition, the borrowers are also required to comply with other customary covenants and various restrictive covenants, including with respect to incurring additional indebtedness or guarantees, creating liens or other encumbrances, making capital expenditures, making restricted payments, including dividends and distributions to BMCA's parent corporations and making certain investments. In the event of a change of control of BMCA, as defined, the maturity dates of the Company's Senior Secured Credit Facilities could be accelerated by the holders of that indebtedness.

F-56

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Long-Term Debt (Continued)

On February 22, 2007, as part of the Elk acquisition, BMCA repurchased approximately $97.5 million, or 97.5%, of the aggregate $100.0 million principal amount outstanding of its 8% Senior Notes due 2007 ("2007 Notes") and $150.1 million, or 96.9%, of the aggregate $155.0 million principal amount outstanding of the 8% Senior Notes due 2008 ("2008 Notes"). On October 15, 2007 and December 1, 2008, the Company redeemed all of the remaining $2.5 and $4.9 million outstanding 2007 Notes and 2008 Notes, respectively, including accrued and unpaid interest on such notes through the date of redemption.

In December 2007, the Company consummated a $30.0 and $15.0 million sale-leaseback, of certain machinery and equipment located at its Baltimore, Maryland and Gainesville, Texas manufacturing facilities, respectively, which were accounted for as capital leases, as according to SFAS No. 13 "Accounting for Leases" ("SFAS No. 13"). The sale of the Baltimore machinery and equipment resulted in a deferred gain of $24.7 million, of which $3.1 million was amortized into its statement of operations during its fiscal year ended December 31, 2008 and the remaining amount will be amortized over the remaining life of the lease term. The Baltimore and Gainesville lease terms extend through December 2015 and December 2014, respectively, with early buyout options in September 2012 and December 2013, respectively.

In December 2007, the Company also consummated lease extensions of its original operating leases of certain machinery and equipment located at its Michigan City, Indiana and Shafter, California manufacturing facilities, respectively, which were accounted for as capital leases, as according to SFAS No. 13. The Michigan City and Shafter lease terms extend through September 2016 and December 2015, respectively, with early purchase options in September 2014 and September 2012, respectively.

In April 2008, the Company repurchased and retired $4.8 million of industrial development revenue bond certificates issued by the Company with respect to the Mount Vernon, Indiana Industrial Development Revenue Bond issued in 1985. As of December 31, 2008, the Company had one remaining industrial development revenue bond certificate outstanding, which bears interest at a floating rate, which ranged between 0.7% and 7.25% during 2008, and is secured by letters of credit under the Senior Secured Revolving Credit Facility.

In July 2004, the Company issued $200.0 million in aggregate principal amount of 7³/4% Senior Notes due 2014. In November 2004, the Company issued an additional $50.0 million in aggregate principal amount of 7³/4% Senior Notes due 2014 under an indenture dated July 2004, pursuant to which the Company previously issued its original $200.0 million of 7³/4% Senior Notes due 2014, collectively (the "Senior Notes"). These additional Senior Notes rank equally with and formed a part of a single series with such original Senior Notes and have the same terms and conditions. The net proceeds from the issuance of the Senior Notes, after deducting the initial purchasers discounts, commission and offering expenses and including the addition of the applicable premium on the Senior Notes issued in November 2004 were approximately $246.5 million. The original premium of approximately $0.9 million is included in long-term debt, will be amortized over the life of the Senior Notes, and as of December 31, 2008 amortized to $0.5 million.

Under the terms and conditions of the Senior Notes, the noteholders have the right under the indenture governing such notes to require the Company to purchase the Senior Notes at a price of 101% of the principal amount thereof, plus any accrued and unpaid interest, in the event of a change of control, as defined in the Senior Notes. Upon the expiration of this right, the Company would have the option to purchase the Senior Notes at a purchase price equal to 100% of the aggregate principal

F-57

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Long-Term Debt (Continued)

amount, plus the applicable premium, as defined in the Senior Notes, together with any accrued and unpaid interest. The Company also has the option to redeem some or all of the Senior Notes beginning on August 1, 2009 through August 1, 2012, at specified redemption premiums, as defined in the Senior Notes. The Company's Senior Notes are secured by a first-priority lien on the Term Loan Collateral and a second-priority lien on the Senior Secured Revolving Credit Facility Collateral, in each case, having equal priority with the lien securing its obligations under the Term Loan.

In July 2003, the Company entered into a $19.7 million secured loan (the "Chester Loan"), with the proceeds being used to repay a $19.7 million obligation associated with an early buyout option on a previously transacted capital lease on certain machinery and equipment at its Chester, South Carolina facility. The Chester Loan is secured by a sole security interest in the machinery and equipment, matures in 2010, requires monthly payments of principal and interest commencing in August 2003 and bears a fixed annual interest rate of 7.41%.

As of December 31, 2008, the Company had total outstanding consolidated indebtedness of $1,731.6 million, which included $52.8 million of demand loans to its parent corporation and $20.6 million that matures prior to December 31, 2009. The Company's total outstanding consolidated indebtedness also included $76.0 million of borrowings outstanding under its Senior Secured Revolving Credit Facility. The Company anticipates funding these obligations principally from its cash and cash equivalents on hand, cash flow from operations and/or borrowings under its Senior Secured Revolving Credit Facility.

As of December 31, 2008, the Company was in compliance with all covenants under the Senior Secured Revolving Credit Facility, the Term Loan, the Junior Lien Term Loan and the indenture governing the Senior Notes. As of December 31, 2008, the net book value of the collateral securing the Senior Secured Revolving Credit Facility Collateral and the Term Loan Collateral was $678.7 and $1,657.9 million, respectively.

At December 31, 2008, the Company had outstanding letters of credit of approximately $43.1 million, which included approximately $10.6 million of standby letters of credit related to certain obligations of G-I Holdings. During 2008, the Company paid $0.1 million as a distribution to our indirect parent corporation related to previously outstanding standby letters of credit.

The fair values of the Company's Term Loan, Junior Lien Term Loan and Senior Notes at December 31, 2008 and 2007 are based upon quoted market prices as follows:

	December 31, 2008				December 31, 2007

	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Thousands)
2008 Notes	$	—	$	—	$	4,874	$	4,874
Senior Notes		250,500		155,000		250,590		191,250
Term Loan		955,670		573,402		965,362		810,904
Junior Lien Term Loan		325,000		162,500		325,000		221,000

F-58

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Long-Term Debt (Continued)

The aggregate maturities of long-term debt as of December 31, 2008 for the next five years and thereafter are as follows:

	Total		Senior Secured Revolving Credit Facility		Term Loan		Junior Lien Term Loan		Senior Notes		Capital Leases		Chester Loan		Other

	(Thousands)
2009	$	20,646	$	—	$	9,557	$	—	$	—	$	6,743	$	3,354	$	992
2010		19,433		—		9,461		—		—		7,440		1,772		760
2011		18,281		—		9,367		—		—		8,266		—		648
2012		95,055		76,000		9,273		—		—		8,930		—		852
2013		19,400		—		9,180		—		—		9,360		—		860
Thereafter		1,505,950		—		908,832		325,000		250,000		15,217		—		6,901

Note 13. Fair Value Measurements

•: Level 1—Quoted prices for identical instruments in active markets;
•: Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose significant inputs are observable: and
•: Level 3—Instruments whose significant inputs are unobservable and for which estimates of fair value are determined using related market data.

The following is a description of the Company's hedging activity and the valuation methodologies the Company implemented for instruments measured at fair value (swaps), as well as the general classification of such instruments pursuant to the valuation hierarchy.

Hedging Activity

Interest Rate Swap Agreements

In March 2007, the Company entered into forward-starting interest rate swap agreements, with an effective date of April 23, 2007 and a maturity date of April 23, 2012. These swaps were initiated in order to hedge the interest rate risk associated with the Company's Term Loan, and they are structured that the Company receives interest based on three-month LIBOR and pays interest on a fixed rate basis. In October 2007, the Company entered into additional interest rate swaps related to its Term Loan with an effective date of October 23, 2007 and a maturity date of October 23, 2012 under similar terms.

The Company accounts for its swaps in accordance with SFAS No. 133, and as such its swaps are treated as cash flow hedges. As of December 31, 2008, based on SFAS No. 157 Level 2 inputs, the

F-59

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13. Fair Value Measurements (Continued)

Company recognized a fair value liability on its interest rate swaps of $70.5 million, to other non-current liabilities (see table below), while the offset was recognized to other comprehensive loss, net of tax of $26.8 million. During 2008, the Company recorded $12.8 million of net interest expense related to its swaps in its statement of operations. For fiscal year ending December 31, 2009, the Company estimates approximately $18.2 million will be reclassified from accumulated other comprehensive loss and recognized into interest expense in its statement of operations, subject to changes in the LIBOR rate. This estimated amount will be approximately offset by lower interest expense associated with the Company's Term Loan. Additional future amounts may be reclassified from accumulated other comprehensive loss to interest expense if any portion of the Company's swaps become ineffective. The Company does not anticipate that any amount recorded in accumulated other comprehensive loss related to its swaps will be reclassified during its fiscal year ending December 31, 2009 due to ineffectiveness.

Treasury Locks

In July 2007, the Company entered into treasury locks with a maturity date of July 31, 2012, as additional hedging instruments related to its Term Loan. On October 30, 2007, the Company settled its open treasury lock hedging positions, which resulted in a pre-tax fair value loss and cash settlement of approximately $4.9 million, which is being amortized into its statement of operations over the life of the Term Loan pursuant to SFAS No. 133. The Company amortized $0.8 million of the loss related to its treasury locks into interest expense in its statement of operations during its fiscal year ended December 31, 2008 and will amortize $0.8 million annually through July 2012.

Interest Rate Swap Valuation

The Company values its interest rate swap agreements based on Level 2 inputs from model-derived valuations whose significant inputs are quoted LIBOR contracts, Eurodollar futures and on-the-run swap markets. SFAS No. 157 requires that the valuation of derivative assets and liabilities must take into account the parties' nonperformance risk. The Company discounted the value of its derivative liabilities based on credit spread for its debt as determined by the market trading price.

The following table summarizes the financial instruments measured at fair value as of December 31, 2008:

			Total Measured at Fair Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

			(Millions)
Liabilities:
	Fixed-income interest rate swap agreements		$	70.5	$	—	$	70.5	$	—

		Total liabilities	$	70.5	$	—	$	70.5	$	—

F-60

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans

Eligible, full-time employees of the Company are covered by various benefit plans, as described below.

Defined Contribution Plan

The Company provides a defined contribution plan for eligible salaried employees. The Company contributes up to 7% of participants' compensation, as defined, and also contributes fixed amounts, ranging from $50 to $750 per year depending on age, to the accounts of participants who are not covered by a Company-provided postretirement medical benefit plan. Under the terms of the defined contribution plan the Company can, at its discretion, terminate the fixed contribution portion of the plan. Effective January 1, 2009, the Company elected to terminate the fixed amount portion of the plan and adjusted eligible participant's compensation to reflect the termination of these benefits. The aggregate contributions by the Company were $6.6, $6.8 and $7.0 million for 2008, 2007 and 2006, respectively.

The Company provides a defined contribution plan for eligible hourly employees. The Company contributes a discretionary matching contribution ranging between 0% and 50% of each participant's eligible contributions each year up to a maximum range of either $250 to $6,600 or 3% to 6% of salary, whichever is greater, for each participant, as defined. Certain participants also receive a contribution equal to 3.5% of their annual compensation regardless of whether the participants participate in the plan. Such contributions were $0.9, $1.0 and $1.1 million for 2008, 2007 and 2006, respectively.

In connection with the acquisition of Elk, the Company adopted the Elk 401(k) Plan. Under the Elk 401(k) Plan, the Company may contribute a percentage of each Elk participant's annual compensation into the Elk 401(k) Plan to be invested among various defined alternatives at the participants' direction. Employees are vested immediately in the Company's matching contributions. All full-time Elk employees, except those covered by plans established through collective bargaining agreements, are eligible for participation upon date of hire.

The Company contributes a 3% basic contribution and an additional $.50 for every $1.00 of employee contributions into the Elk 401(k) Plan limited to a maximum matching Company contribution of 2% of an employee's eligible compensation. The aggregate contributions by the Company for 2008 were $3.6 million.

Beginning January 1, 2009 the Elk 401(k) Plan was liquidated and merged with the Company's existing defined contribution plan for eligible salaried employees and re-named the GAF Materials Corporation 401(k) Plan. There were no material changes to the provisions of the Company's existing defined contribution plan for salaried employees, as discussed above.

Defined Benefit Plans

The Company provides a noncontributory defined benefit retirement plan for certain hourly and salaried employees (the "Retirement Plan"). Benefits under these plans are based on stated amounts for each year of service. The Company's funding policy is consistent with the minimum funding requirements of the Employee Retirement Income Security Act of 1974.

In September 2006, the FASB issued SFAS No. 158, which requires the net amount by which the defined-benefit or postretirement obligation plan is over or underfunded to be reported on a company's balance sheet. The funded status amount to be recognized by SFAS No. 158 is measured as the difference between the fair value of plan assets and the plan's benefit obligation, with the benefit

F-61

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

obligation including all actuarial gains and losses, prior service cost, and any remaining transition amounts. SFAS No. 158 does not change the components of net periodic benefit cost. All items previously deferred when applying SFAS Nos. 87 and 106 are now recognized as a component of accumulated other comprehensive income (loss), net of all applicable taxes. SFAS No. 158 also requires a fiscal year-end measurement date of plan assets and benefit obligations, eliminating the use of an earlier measurement date, which became effective for fiscal years ending after December 15, 2008. All other aspects of SFAS No. 158 were effective as of December 31, 2006. The Company's adoption of SFAS No. 158 during its fourth quarter of fiscal year ended December 31, 2006 did not have a material impact on its consolidated financial statements. See tables below.

The Company's net periodic pension cost for the Retirement Plan included the following components:

	Year Ended December 31,

	2008			2007			2006
	(Thousands)
Service cost	$	1,321		$	1,694		$	1,507
Interest cost		2,439			2,275			2,095
Expected return on plan assets		(3,167	)		(3,302	)		(2,990	)
Amortization of unrecognized prior service cost		13			39			39
Amortization of net losses from earlier periods		432			201			360

Net periodic pension cost	$	1,038		$	907		$	1,011

F-62

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

The following tables set forth, for the years 2008 and 2007, reconciliations of the beginning and ending balances of the benefit obligation, fair value of plan assets, funded status and amounts recognized in the consolidated balance sheets related to the Retirement Plan. The Company uses a December 31 measurement date for its retirement plan.

		December 31,

		2008			2007
		(Thousands)
Change in benefit obligation:
	Benefit obligation at beginning of year	$	(39,842	)	$	(38,461	)
	Service cost		(1,321	)		(1,694	)
	Interest cost		(2,439	)		(2,275	)
	Actuarial gain (loss)		(5	)		1,135
	Benefits paid		1,628			1,453

	Benefit obligation at end of year	$	(41,979	)	$	(39,842	)

Change in plan assets:
	Fair value of plan assets at beginning of year	$	33,470		$	35,046
	Actual return on plan assets		(756	)		(909	)
	Employer contributions		1,330			786
	Benefits paid		(1,628	)		(1,453	)

	Fair value of plan assets at end of year	$	32,416		$	33,470

Amounts recognized in consolidated balance sheets under SFAS No. 158:
	Noncurrent liabilities	$	(9,563	)	$	(6,372	)

	Net amount recognized in consolidated balance sheets under SFAS No. 158	$	(9,563	)	$	(6,372	)

F-63

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

		December 31,

		2008		2007
		(Thousands)
Amounts recognized in other comprehensive loss under SFAS No. 158:
	Net actuarial loss	$	12,524	$	9,029
	Prior service cost		89		102

	Total	$	12,613	$	9,131

		December 31,

		2008			2007
		(Thousands)
Other changes in plan assets and benefit obligations recognized in other comprehensive loss:
	Net actuarial loss	$	3,927		$	3,078
	Recognized actuarial loss		(432	)		(201	)
	Recognized prior service cost		(13	)		(39	)

	Total recognized in other comprehensive loss		3,482			2,838

	Total recognized in net periodic cost and other comprehensive loss	$	4,521		$	3,745

The accumulated benefit obligation for the Retirement Plan was $42.0 and $39.8 million at December 31, 2008 and 2007, respectively.

Information on actual and future expected benefit payments related to the Retirement Plan follows:

	(Thousands)

2006	$	1,038
2007		1,453
2008		1,628



2009	$	1,758
2010		1,904
2011		2,082
2012		2,289
2013		2,510
2014 through 2018		15,722

F-64

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

		Year ended December 31,

		2009 Expected		2008 Actual		2007 Actual		2006 Actual
		(Thousands)
Employer contributions:
	Required	$	4.2	$	1.3	$	0.8	$	—
	Additional discretionary		—		—		—		—

	Total	$	4.2	$	1.3	$	0.8	$	—

Weighted-average assumptions:

		December 31,

		2008			2007
Discount rate:
	As of January 1 (for determining net periodic pension cost for years ended December 31)		6.25	%		6.00	%
	As of December 31 (for determining projected benefit obligation at December 31)		6.25	%		6.25	%
Expected return on plan assets			9.50	%		9.50	%
Rate of compensation increase			N/A			N/A

The following table highlights the sensitivity of the Company's pension obligations and expense to changes in assumptions related to the Retirement Plan:

		Impact on Pension Expense		Impact on Projected Benefit Obligation

		(Thousands)
Change in Assumption:
	25 basis point increase in discount rate	$	-150.0	$	-1,500.0
	25 basis point decrease in discount rate		+150.0		+1,500.0
	25 basis point increase in rate of return on assets		-80.0		N/A
	25 basis point decrease in rate of return on assets		+80.0		N/A

At December 31, 2008 and 2007, the asset allocations for the Retirement Plan, by asset category, are as follows:

		Plan Assets at December 31,

Asset Category:		2009 Target			2008 Actual			2007 Actual
	Equity securities		40-60	%		43	%		45	%
	Fixed income securities		25-50	%		26	%		35	%
	Cash and equivalents		5-20	%		27	%		18	%
	Other		0-10	%		4	%		2	%

	Total					100	%		100	%

F-65

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

With the assets in the Retirement Plan, the Company invests primarily in market-neutral absolute-return strategies which serve to minimize volatility while providing consistent positive returns and preserving capital. These investments include both equity and fixed income securities and may incorporate the use of options, futures and other financial instruments. Implementation of this policy involves investments with outside managers who have expertise in these strategies.

The Company also provides a nonqualified defined benefit retirement plan for certain key employees. Expense for this plan was not significant for 2008, 2007 and 2006. The liability related to this plan was $1.2 and $1.2 million at December 31, 2008 and 2007, respectively, and is included within other liabilities.

Postretirement Medical and Life Insurance

The Company generally does not provide postretirement medical and life insurance benefits, although it subsidizes life insurance benefits for certain employees and retirees. Such subsidies were reduced or ended as of January 1, 1997. Effective March 1, 2005, the Company amended the plan eliminating postretirement medical benefits affecting all current and future retirees.

Net periodic postretirement benefit cost included the following components:

	Year Ended December 31,

	2008			2007			2006
	(Thousands)
Service cost	$	9		$	14		$	13
Interest cost		115			118			122
Amortization of unrecognized prior service cost		(570	)		(570	)		(619	)
Amortization of net gains from earlier periods		(232	)		(231	)		(237	)

Net periodic postretirement benefit	$	(678	)	$	(669	)	$	(721	)

F-66

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

The following table sets forth, for the years 2008 and 2007, reconciliations of the beginning and ending balances of the postretirement benefit obligation, funded status and amounts recognized in the consolidated balance sheets related to postretirement medical and life insurance benefits. The Company uses a December 31 measurement date for its postretirement medical and life insurance plan.

				December 31,

				2008			2007
				(Thousands)
Change in benefit obligation:
	Benefit obligation at beginning of year			$	(1,962	)	$	(2,105	)
	Service cost				(9	)		(14	)
	Interest cost				(115	)		(118	)
	Actuarial gain (loss)				(3	)		174
	Benefits paid, net of participant contributions				227			101

	Benefit obligation at end of year			$	(1,862	)	$	(1,962	)

Change in plan assets:
	Fair value of plan assets at beginning of year			$	—		$	—
	Employer contributions				227			101
	Participant contributions				5			10
	Benefits paid				(232	)		(111	)

	Fair value of plan assets at end of year			$	—		$	—

Reconciliation of funded status:
	Funded status			$	(1,862	)	$	(1,962	)

	Net amount recognized in consolidated balance sheets
		as accrued benefit cost		$	(1,862	)	$	(1,962	)

Amounts recognized in consolidated balance sheets under SFAS No. 158:
	Noncurrent assets			$	—		$	—
	Current liabilities				(204	)		(203	)
	Noncurrent liabilities				(1,658	)		(1,759	)

	Net amount recognized in consolidated balance sheets under SFAS No. 158			$	(1,862	)	$	(1,962	)

Amounts recognized in other comprehensive income (loss) under SFAS No. 158:
	Net actuarial gain			$	(2,572	)	$	(2,808	)
	Prior service cost				(2,342	)		(2,912	)

			Total	$	(4,914	)	$	(5,720	)

F-67

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

		December 31,

		2008		2007
		(Thousands)
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
	Net actuarial (gain) loss	$	3	$	(174	)
	Recognized actuarial gain		232		231
	Recognized prior service credit		571		570

	Total recognized in other comprehensive loss		806		627

	Total recognized in net periodic (benefit) cost and other comprehensive loss	$	128	$	(42	)

The Company's postretirement medical and life insurance plan is unfunded. Benefits are paid from the Company's cash flows from operations as they are incurred. The Company expects to contribute approximately $0.2 million to the plan in 2009, which are related to postretirement life insurance expenses. Information on actual and future expected benefit payments related to the postretirement medical and life insurance plan follows:

Actual benefit payments		(Thousands)

	2006	$	180
	2007		111
	2008		232
Future expected benefit payments
	2009	$	211
	2010		205
	2011		198
	2012		190
	2013		181
	2014 through 2018		755

For purposes of calculating the accumulated postretirement benefit obligation, the following assumptions were made. Retirees as of December 31, 2004 who were formerly salaried employees (with certain exceptions) were assumed to receive a Company subsidy of $700 to $1,000 per year. For retirees over age 65, this subsidy may be replaced by participation in a managed care program. With respect to retirees who were formerly hourly employees, most such retirees are subject to a $5,000 per person lifetime maximum benefit. Effective March 1, 2005, the Company amended the plan eliminating postretirement retiree medical benefits affecting all current and future retirees.

F-68

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Benefit Plans (Continued)

Weighted-average assumptions:

		December 31,

		2008			2007
Discount rate:
	As of January 1 (for determining net periodic benefit cost for years ended December 31)		6.25	%		6.00	%
	As of December 31 (for determining postretirement benefit obligation)		6.25	%		6.25	%

Note 15. 2001 Long-Term Incentive Plan and Preferred Stock Option Plan

On January 1, 1996, the Company established the BMCA Preferred Stock Option Plan (the "1996 Plan") to issue options to certain employees to purchase shares of redeemable convertible preferred stock ("Preferred Stock") of the Company, exercisable at a price of $100 per share. Each share of Preferred Stock was convertible, at the holder's option, into shares of common stock of the Company at a formula price based on Book Value (as defined in the option agreement) as of the date of grant. The options vested ratably over five years and expired after nine years. Dividends would accrue on the Preferred Stock from the date of issuance at the rate of 6% per annum. The Preferred Stock was redeemable, at the Company's option, for a redemption price equal to $100 per share plus accrued and unpaid dividends. The Preferred Stock, and common stock issuable upon conversion of Preferred Stock into common stock, was subject to repurchase by the Company under certain circumstances, at a price equal to current Book Value (as defined in the option agreement). The exercise price of the options to purchase Preferred Stock was equal to the estimated fair value per share of the Preferred Stock at the date of grant. As of December 31, 2008, shares or options to purchase 400,000 shares of Preferred Stock remain available for future grant under the 1996 Plan. No shares or options were granted in 2008, 2007 and 2006.

Effective December 31, 2000, the Company adopted the 2001 Long-Term Incentive Plan (the "2001 LTIP"), which allowed employees participating in the 1996 Plan to also participate in the 2001 Long-Term Incentive Plan. During 2001, all employees exchanged their preferred stock options for incentive plan units effective as of December 31, 2000. The 2001 Long-Term Incentive Plan authorizes the grant of incentive units ("Incentive Units") to eligible employees. The 2001 Long-Term Incentive Plan is administered by a Committee appointed by the Board of Directors. The number of Incentive Units granted is determined by the Committee in its sole discretion. Generally, Incentive Units vest cumulatively, in 20% increments over five years. The Committee, in its sole discretion, may issue options with any vesting schedule, other than normally provided in the 2001 Long-Term Incentive Plan. Vesting will end upon the termination of an employee's employment with the Company or any subsidiary for any reason. If, after a change in control of the Company, as defined in the 2001 LTIP, an employee's employment is terminated within twelve months of the change of control by the Company for any reason other than Good Cause, as defined in the 2001 LTIP, as a result of death or permanent disability, or by the employee for Good Reason, as defined in the 2001 LTIP, all Incentive Units will become fully and immediately vested. Vested Incentive Units are exercised on the earlier of: (i) the sixth anniversary of the date the Incentive Unit was granted; (ii) a specified date elected by an employee; and (iii) either one year after the employee's termination of employment with the Company

F-69

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 15. 2001 Long-Term Incentive Plan and Preferred Stock Option Plan (Continued)

due to retirement, or the date of the employee's termination of employment for reasons other than due to retirement.

The value of Incentive Units is calculated at the end of each fiscal quarter based on Book Value (as defined in the 2001 LTIP) at that date less the Book Value as of the date of grant divided by 1,000,010. Upon exercise of an Incentive Unit, a participant receives in cash the excess, if any, of the value of such Incentive Unit as of the end of the fiscal quarter immediately proceeding the exercise date (except in the event the exercise is within thirty days of the end of a fiscal quarter, in which case the value will be calculated as of the end of such fiscal quarter), over the initial value of such Incentive Unit, subject to all appropriate income tax withholdings. Accordingly, the dollar value of future payouts is not readily ascertainable.

The 2001 Long-Term Incentive Plan was to terminate five years after its effective date of December 2000. In December 2005, the Committee exercised its rights to amend the 2001 LTIP, and extended the term of the 2001 LTIP through December 2007. In December 2007, the Committee further extended the term of the 2001 LTIP through December 2009. In December 2008, the Committee amended the 2001 LTIP to eliminate the termination date provision allowing the Committee to terminate the 2001 LTIP at its discretion.

The following is a summary of activity for incentive units related to the 2001 Long-Term Incentive Plan:

	Year Ended December 31,

	2008			2007			2006
Incentive Units outstanding, January 1,		99,120			98,633			146,814
Granted		17,375			45,589			6,200
Exercised		(18,686	)		(38,387	)		(41,087	)
Forfeited		(7,341	)		(6,715	)		(13,294	)

Incentive Units outstanding, December 31,		90,468			99,120			98,633

Vested Units outstanding, December 31,		33,702			38,750			55,753

The initial value of the 17,000 incentive units granted on January 1, 2008 was $592.01, and the 375 incentive units granted on October 1, 2008 was $687.97. The initial value of the 8,000 incentive units granted on July 2, 2007 and the 37,589 incentive units granted on January 1, 2007 was $589.43 and $583.08, respectively. The initial value of the 800 incentive units granted on July 1, 2006 and the 5,400 incentive units granted on January 1, 2006 was $569.74 and $534.19, respectively.

Compensation expense for such Incentive Units was $8.5, $1.2 and $6.4 million in 2008, 2007 and 2006, respectively. At December 31, 2008 and 2007, the 2001 Long-Term Incentive Plan liability amounted to $12.9 and $9.7 million respectively, and was included in accrued liabilities.

Note 16. Business Segment Information

The Company is a leading national manufacturer and marketer of a broad line of asphalt and polymer-based roofing products and accessories for the residential and commercial roofing markets. The Company also manufactures specialty building products and accessories for the professional and do-it-yourself remodeling and residential construction industries. The residential roofing product line consists of laminated and asphalt strip shingles. Sales of residential roofing products in 2008, 2007 and

F-70

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Business Segment Information (Continued)

2006 were $2,133.9, $1,727.9 and $1,451.4 million and represented approximately 78%, 75% and 74%, respectively, of the Company's net sales and included in 2008 and 2007, $6.1 and $15.1 million, respectively, of restructuring-related sales discounts. The Company's commercial roofing product line includes a full line of modified bitumen and asphalt built-up roofing products, thermoplastic polyolefin products, liquid applied membrane systems and roofing accessories for use in the application of commercial roofing systems. Sales of commercial roofing products and accessories in 2008, 2007 and 2006 were $479.0, $439.8 and $442.2 million and represented approximately 17%, 19% and 22%, respectively, of the Company's net sales. Sales of specialty building products and accessories products in 2008, 2007 and 2006 were $136.0, $142.4 and $75.6 million and represented approximately 5%, 6% and 4%, respectively, of the Company's net sales.

The Company aggregates the residential and commercial product lines into one operating segment since they have similar economic characteristics and are similar in each of the following areas: (i) the nature of the products and services are similar in that they perform the same function—the protection and covering of residential and commercial roofs; (ii) the nature of the production processes are similar; (iii) the type or class of customer for their products and services is similar; (iv) the residential and commercial products have the same distribution channels, whereby the main customers are wholesalers or distributors; and (v) regulatory requirements are generally the same for both the residential and commercial product lines. The specialty building products and accessories products did not meet quantitative thresholds in 2008, 2007 and 2006 to be considered as a reportable segment.

Note 17. Related Party Transactions

Included in the consolidated balance sheets are the following receivable (payable) balances with related parties, which arise from operating and financing transactions between the Company and its affiliates:

	December 31,

	2008			2007
	(Thousands)
Tax receivable from parent corporation	$	8,400		$	10,016

Payable to related parties	$	(21,153	)	$	(16,133	)

Loans payable to parent corporation	$	(52,840	)	$	(52,840	)

Loans receivable from parent corporation, included in Stockholders' Equity	$	56,348		$	56,224

The Company makes loans to, and borrows from, its parent corporations from time to time at interest rates ranging from 3.25% to 7.25% in 2008. At December 31, 2008 and 2007, BMCA Holdings Corporation owed the Company $56.3 and $56.2 million, including interest of $1.1 and $1.0 million, respectively, and the Company owed BMCA Holdings Corporation $52.8 and $52.8 million, respectively, with no unpaid interest. Interest income on the Company's loans to BMCA Holdings Corporation amounted to $3.4, $5.0 and $4.9 million in 2008, 2007 and 2006, respectively. Interest expense on the Company's loans from BMCA Holdings Corporation amounted to $3.3, $4.8 and $4.7 million in 2008, 2007 and 2006, respectively. Loans payable to/receivable from its parent corporations are due on demand and provide each party with the right of offset of its related obligation to the other party and are subject to limitations as outlined in the Senior Secured Revolving Credit

F-71

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 17. Related Party Transactions (Continued)

Facility, the Term Loan, the Junior Lien Term Loan and the Senior Notes. Under the terms of the Senior Secured Revolving Credit Facility and the indenture governing the Company's Senior Notes at December 31, 2008, the Company could repay demand loans to its parent corporation amounting to $52.8 million, subject to certain conditions.

During 2008 and 2006, after giving effect to the most restrictive of the aforementioned debt covenant restrictions, the Company declared and paid cash dividends of $7.5 and $15.0 million, respectively, to its parent corporation. In 2007, the Company did not declare or pay a cash dividend to its parent corporation.

Mineral Products: The Company and its subsidiaries purchased a substantial portion of their headlap roofing granules, colored roofing granules and algae-resistant granules, on a purchase order basis, from ISP Minerals Inc. ("ISP Minerals"), an affiliate of BMCA and an affiliate of International Specialty Products Inc. and its subsidiaries ("ISP"), which is also an affiliate of BMCA. The amount of mineral products purchased each year on this basis is based on current demand and is not subject to minimum purchase requirements. For the years ended December 31, 2008 and 2007, the Company and its subsidiaries purchased $40.6 and $10.5 million, respectively, of roofing granules under this arrangement.

In addition to the granules products purchased by the Company, under the above purchase order basis, the balance of its granules requirements are purchased under a contract expiring in 2013. The amount of mineral products purchased each year under the contract is based on current demand and is not subject to minimum purchase requirements. Under the contract, for the years ended December 31, 2008 and 2007, the Company purchased $83.2 and $95.8 million of roofing granules, respectively.

Management Agreements: Pursuant to a management agreement, a subsidiary of ISP provides certain general management, administrative, legal and facilities services to the Company, including the use of the Company's headquarters in Wayne, New Jersey. Charges to the Company by ISP for these services under the management agreement, inclusive of the services provided to G-I Holdings, discussed below, aggregated to $7.3, $6.7 and $6.1 million for 2008, 2007 and 2006, respectively. These charges consist of management fees and other reimbursable expenses attributable to the Company, or incurred by ISP for the benefit of the Company. The amount payable to ISP for management fees as of December 31, 2008 and 2007 was $0.9 and $0.5 million, respectively, and is included in payable to related parties in the consolidated balance sheets. The management agreement also provides that the Company is responsible for providing management services to G-I Holdings and certain of its subsidiaries and that G-I Holdings pay to the Company a management fee for these services. The aggregate amount paid by G-I Holdings to the Company for services rendered under the management agreement in 2008, 2007 and 2006 was approximately $0.9, $0.8 and $0.9 million, respectively. The Company also allocates a portion of the management fees payable by the Company under the management agreement as lease payments for the use of the Company's headquarters.

Tax Sharing Agreement: See Note 9.

F-72

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 18. Commitments and Contingencies

The Company's parent corporations, G-I Holdings and BMCA Holdings Corporation, are essentially holding companies without independent businesses or operations. G-I Holdings and BHC are presently dependent upon the earnings and cash flows of their subsidiaries, principally the Company, in order to satisfy their net obligations, including various tax and other claims and liabilities (net of certain insurance receivables), including tax liabilities relating to the surfactants partnership, see Note 9. G-I Holdings has advised the Company that it expects to obtain funds to satisfy G-I Holdings' operating expenses from, among other things, distributions from subsidiaries (principally the Company). See Notes 8, 9 and 17.

On January 5, 2001, G-I Holdings filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code due to Asbestos Claims. The Company is not included in such bankruptcy filing. There are restrictions under the indenture relating to the Senior Notes and the Senior Secured Revolving Credit Facility on payments by the Company to its parent corporations.

During the twelve months ending December 31, 2009, the Company expects to make distributions and/or advances to its parent corporations to satisfy the obligations discussed above for not more than the extent permitted by the Senior Secured Revolving Credit Facility and the Senior Notes. The Company does not believe that the dependence of its parent corporations on the cash flows of their subsidiaries should have a material adverse effect on the operations, liquidity or capital resources of the Company. See Notes 8, 9, 12 and 17.

At December 31, 2008, the Company had outstanding letters of credit of approximately $43.1 million under the Senior Secured Revolving Credit Facility, which includes approximately $10.6 million of standby letters of credit related to certain obligations of G-I Holdings. See Note 8.

In June 2001, the Company entered into employment security agreements with certain of its executive officers and key personnel. The agreements have no expiration date, are supported by irrevocable letters of credit and provide for a single-sum payment consisting of one to two times salary and bonus and related benefits if employment is terminated or a change in employment responsibilities occurs within a thirty-six-month period following the change in control event, as defined. At December 31, 2008 the aggregate value of the employment security agreements was $5.4 million, which excludes the cost of medical benefits and any amounts due under the 2001 Long-Term Incentive Plan.

In the ordinary course of business, the Company has several supply agreements that include minimum annual purchase requirements amounting to $89.9 million at December 31, 2008 payable over the next five years. In the event these purchase requirements are not met, the Company may be required to make payments under these supply agreements.

The leases for certain property, plant and equipment at certain of the Company's glass mat and roofing facilities are accounted for as capital leases, see Note 12. The Company is also a lessee under operating leases principally for warehouses, production machinery and equipment, and transportation and computer equipment. Rental expense on operating leases was $45.5, $52.2 and $42.6 million for

F-73

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 18. Commitments and Contingencies (Continued)

2008, 2007 and 2006, respectively. Future minimum lease payments for properties which were held under long-term noncancellable leases as of December 31, 2008 were as follows:

	Operating Leases

	(Thousands)
2009	$	19,061
2010		16,785
2011		12,241
2012		9,858
2013		9,387
Thereafter		21,895

Total minimum payments	$	89,227

Included in net sales in 2008 were net sales to two customers of 15% and 14%, respectively, in 2007, 13% and 14%, respectively, and in 2006, 16% and 13%, respectively. No other customer accounted for more than 10% of net sales in 2008, 2007 or 2006.

The Company includes in other expense, net certain legal fees related to its business. For 2008, 2007 and 2006 the Company included $4.8, $4.9 and $3.8 million, respectively, of legal fees in other expense, net.

Note 19. Guarantor Financial Information

At December 31, 2008, all of the Company's subsidiaries, each of which is wholly-owned by the Company, including Elk, are guarantors under the Company's Senior Secured Credit Facilities and the indenture governing the Senior Notes. These guarantees are full, unconditional and joint and several. In addition, Building Materials Manufacturing Corporation, a wholly-owned subsidiary of the Company, was a co-obligor on the 8% Senior Notes due 2007, which were redeemed during 2007. In 2007, BMCA Acquisition Inc., the direct parent of Elk, and Elk, as a result of its merger with BMCA Acquisition Sub, became co-obligors on the Senior Secured Credit Facilities.

Presented below is condensed consolidating financial information for the Company, the co-obligor subsidiaries and the guarantor subsidiaries. This financial information should be read in conjunction with the consolidated financial statements and other notes related thereto. Separate financial statements for the Company and the guarantor subsidiaries are not included herein, because the guarantees are full, unconditional and joint and several.

F-74

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Statement of Operations
Year Ended December 31, 2008
(Thousands)

			Parent Company			Co-Obligor Subsidiary			Guarantor Subsidiaries			Eliminations			Consolidated

Net sales			$	2,642,994		$	30,960		$	74,955		$	—		$	2,748,909
Intercompany net sales				—			698,223			4,067,025			(4,765,248	)		—

		Total net sales		2,642,994			729,183			4,141,980			(4,765,248	)		2,748,909

Costs and expenses:
	Cost of products sold			2,302,889			721,331			3,709,267			(4,765,248	)		1,968,239
	Selling, general and administrative			274,882			33,417			177,921			—			486,220
	Amortization of intangible assets			—			11,386			—			—			11,386
	Restructuring and other expenses			—			5,279			34,982			—			40,261
	Other expense, net			3,365			65			1,602			—			5,032

		Total costs and expenses, net		2,581,136			771,478			3,923,772			(4,765,248	)		2,511,138

Income (loss) before equity in earnings (loss) of subsidiaries, interest expense and income taxes				61,858			(42,295	)		218,208			—			237,771
Equity in earnings of subsidiaries				70,322			—			—			(70,322	)		—
Interest expense				(90,798	)		(25,120	)		(43,003	)		—			(158,921	)

Income (loss) before income taxes				41,382			(67,415	)		175,205			(70,322	)		78,850
Income tax (expense) benefit				10,057			23,433			(60,901	)		—			(27,411	)

Net income (loss)			$	51,439		$	(43,982	)	$	114,304		$	(70,322	)	$	51,439

F-75

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Statement of Operations
Year Ended December 31, 2007
(Thousands)

			Parent Company			Co-Obligor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated

Net sales			$	1,725,601		$	494,785		$	89,687		$	—		$	2,310,073
Intercompany net sales				—			1,319,682			1,525,007			(2,844,689	)		—

		Total net sales		1,725,601			1,814,467			1,614,694			(2,844,689	)		2,310,073

Costs and expenses:
	Cost of products sold			1,472,000			1,657,000			1,411,273			(2,844,689	)		1,695,584
	Selling, general and administrative			225,167			232,391			38,658			—			496,216
	Amortization of intangible assets			—			6,785			—			—			6,785
	Restructuring and other expenses			8,849			74,710			58,084			—			141,643
	Other income, net			(2,121	)		(561	)		(73	)		—			(2,755	)

		Total costs and expenses		1,703,895			1,970,325			1,507,942			(2,844,689	)		2,337,473

Income (loss) before equity in earnings (loss) of subsidiaries, interest expense and income taxes				21,706			(155,858	)		106,752			—			(27,400	)
Equity in earnings (loss) of subsidiaries				(71,448	)		—			—			71,448			—
Interest expense				(119,623	)		(28,818	)		(32,997	)		—			(181,438	)

Income (loss) before income taxes				(169,365	)		(184,676	)		73,755			71,448			(208,838	)
Income tax (expense) benefit				34,839			65,708			(26,235	)		—			74,312

Net income (loss)			$	(134,526	)	$	(118,968	)	$	47,520		$	71,448		$	(134,526	)

F-76

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Statement of Income
Year Ended December 31, 2006
(Thousands)

			Parent Company			Co-Obligor Subsidiary			Guarantor Subsidiaries			Eliminations			Consolidated

Net sales			$	1,859,910		$	—		$	109,260		$	—		$	1,969,170
Intercompany net sales				1,384			1,151,622			79,655			(1,232,661	)		—

		Total net sales		1,861,294			1,151,622			188,915			(1,232,661	)		1,969,170

Costs and expenses, net:
	Cost of products sold			1,438,718			1,014,447			175,872			(1,232,661	)		1,396,376
	Selling, general and administrative			333,177			82,435			32,043			—			447,655
	Other (income) expense, net			249			69			(36	)		—			282
	Intercompany licensing (income) expense, net			74,452			26,253			(100,705	)		—			—
	Transition service agreement (income) expense			100			(100	)		—			—			—

		Total costs and expenses, net		1,846,696			1,123,104			107,174			(1,232,661	)		1,844,313

Income before equity in earnings of subsidiaries, interest expense and income taxes				14,598			28,518			81,741			—			124,857
Equity in earnings of subsidiaries				50,878			—			—			(50,878	)		—
Interest expense				(34,412	)		(7,717	)		(19,380	)		—			(61,509	)

Income before income taxes				31,064			20,801			62,361			(50,878	)		63,348
Income tax (expense) benefit				7,686			(8,075	)		(24,209	)		—			(24,598	)

Net income			$	38,750		$	12,726		$	38,152		$	(50,878	)	$	38,750

F-77

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Balance Sheet
December 31, 2008
(Thousands)

			Parent Company			Co-Obligor Subsidiary			Guarantor Subsidiaries			Eliminations			Consolidated

ASSETS
Current Assets:
	Cash and cash equivalents		$	36,722		$	65		$	250		$	—		$	37,037
	Accounts receivable, trade, net			189,245			1,491			8,497			—			199,233
	Accounts receivable, other			2,298			727			7,872			—			10,897
	Inventories, net			—			90,999			257,450			—			348,449
	Deferred income tax assets			39,324			—			—			—			39,324
	Other current assets			7,894			1,329			7,849			—			17,072

		Total Current Assets		275,483			94,611			281,918			—			652,012
Investment in subsidiaries				1,627,346			—			—			(1,627,346	)		—
Intercompany loans including accrued interest				1,587,885			(867,963	)		(719,922	)		—			—
Due from/to subsidiaries, net				(1,723,842	)		670,948			1,052,894			—			—
Property, plant and equipment, net				—			274,194			381,075			—			655,269
Goodwill				59,323			588,850			5,471			—			653,644
Intangible assets, net				—			196,250			—			—			196,250
Income tax receivable from parent corporation				8,400			—			—			—			8,400
Other noncurrent assets				82,842			7,487			24,410			—			114,739

Total Assets			$	1,917,437		$	964,377		$	1,025,846		$	(1,627,346	)	$	2,280,314

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
	Current maturities of long-term debt		$	9,557		$	676		$	10,363		$	—		$	20,596
	Accounts payable			—			18,400			137,630			—			156,030
	Payable to related parties			1,225			—			19,928			—			21,153
	Loans payable to parent corporation			52,840			—			—			—			52,840
	Accrued liabilities			52,508			12,953			68,880			—			134,341
	Product warranty claims			12,600			3,600			—			—			16,200

		Total Current Liabilities		128,730			35,629			236,801			—			401,160
Long-term debt less current maturities				1,597,614			3,647			56,908			—			1,658,169
Product warranty claims				28,358			307			100			—			28,765
Deferred income tax liabilities				73,103			—			—			—			73,103
Other liabilities				169,488			8,242			21,243			—			198,973

Total Liabilities				1,997,293			47,825			315,052			—			2,360,170
Total Stockholders' Equity (Deficit)				(79,856	)		916,552			710,794			(1,627,346	)		(79,856	)

Total Liabilities and Stockholders' Equity (Deficit)			$	1,917,437		$	964,377		$	1,025,846		$	(1,627,346	)	$	2,280,314

F-78

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Balance Sheet
December 31, 2007
(Thousands)

			Parent Company			Co-Obligor Subsidiaries			Guarantor Subsidiaries			Eliminations			Consolidated

ASSETS
Current Assets:
	Cash and cash equivalents		$	—		$	1,936		$	4,388		$	—		$	6,324
	Accounts receivable, trade, net			198,781			3,753			8,323			—			210,857
	Accounts receivable, other			2,229			4,651			3,912			—			10,792
	Income tax receivable			—			11,968			—			—			11,968
	Inventories, net			—			89,735			227,177			—			316,912
	Deferred income tax assets			38,017			—			—			—			38,017
	Other current assets			5,644			1,985			6,069			—			13,698

		Total Current Assets		244,671			114,028			249,869			—			608,568
Investment in subsidiaries				1,557,024			—			—			(1,557,024	)		—
Intercompany loans including accrued interest				767,084			(194,715	)		(572,369	)		—			—
Due from/(to) subsidiaries, net				(787,818	)		5,110			782,708			—			—
Property, plant and equipment, net				—			297,942			374,871			—			672,813
Goodwill				40,080			590,405			24,715			—			655,200
Intangible assets, net				—			207,635			—			—			207,635
Income tax receivable from parent corporation				10,016			—			—			—			10,016
Other noncurrent assets				86,604			11,963			21,592			—			120,159

Total Assets			$	1,917,661		$	1,032,368		$	881,386		$	(1,557,024	)	$	2,274,391

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
	Current maturities of long-term debt		$	14,530		$	670		$	9,430		$	—		$	24,630
	Accounts payable			21			32,026			110,203			—			142,250
	Payable to related parties			992			—			15,141			—			16,133
	Loans payable to parent corporation			52,840			—			—			—			52,840
	Accrued liabilities			63,402			18,412			54,162			—			135,976
	Product warranty claims			13,500			—			—			—			13,500
	Discontinued operations—current liabilities			—			560			—			—			560

		Total Current Liabilities		145,285			51,668			188,936			—			385,889
Long-term debt				1,653,298			4,400			71,697			—			1,729,395
Product warranty claims				25,755			5,369			100			—			31,224
Deferred income tax liabilities				60,869			—			—			—			60,869
Other liabilities				128,772			10,397			24,163			—			163,332

Total Liabilities				2,013,979			71,834			284,896			—			2,370,709
Total Stockholders' Equity (Deficit)				(96,318	)		960,534			596,490			(1,557,024	)		(96,318	)

Total Liabilities and Stockholders' Equity (Deficit)			$	1,917,661		$	1,032,368		$	881,386		$	(1,557,024	)	$	2,274,391

F-79

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2008
(Thousands)

		Parent Company			Co-Obligor Subsidiary			Guarantor Subsidiaries			Consolidated

Cash and cash equivalents, beginning of year		$	—		$	1,936		$	4,388		$	6,324

Cash provided by operating activities:
Net income (loss)			(18,883	)		(43,982	)		114,304			51,439
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Depreciation		—			27,897			44,498			72,395
	Amortization of intangible and other assets		—			11,386			4,092			15,478
	Restructuring and other expenses		6,085			20,183			46,951			73,219
	Deferred income taxes		29,338			—			—			29,338
	Noncash interest charges		6,982			1,170			826			8,978
Increase in working capital items			(9,783	)		(18,943	)		(47,169	)		(75,895	)
Increase (decrease) in product warranty claims			1,703			(1,462	)		—			241
(Increase) decrease in other assets			(4,015	)		795			(7,228	)		(10,448	)
Increase (decrease) in other liabilities			(4,045	)		162			163			(3,720	)
Increase (decrease) in net payable to related parties/parent corporations			98,180			7,039			(98,583	)		6,636
Other, net			—			1,340			(19,830	)		(18,490	)

Net cash provided by operating activities			105,562			5,585			38,024			149,171

Cash used in investing activities:
	Capital expenditures		—			(16,439	)		(49,407	)		(65,846	)
	Proceeds from sale of assets		—			9,710			21,443			31,153

Net cash used in investing activities			—			(6,729	)		(27,964	)		(34,693	)

Cash used in financing activities:
	Proceeds from issuance of long-term debt		1,083,000			—			—			1,083,000
	Repayments of long-term debt		(1,143,569	)		(727	)		(3,356	)		(1,147,652	)
	Purchase of industrial development revenue bond certificates issued by the Company		—			—			(4,800	)		(4,800	)
	Principal repayments of capital leases		—			—			(6,042	)		(6,042	)
	Distributions to parent corporation		(71	)		—			—			(71	)
	Dividends to parent corporation		(7,500	)		—			—			(7,500	)
	Loan to parent corporation		(124	)		—			—			(124	)
	Financing fees and expenses		(576	)		—			—			(576	)

Net cash used in financing activities			(68,840	)		(727	)		(14,198	)		(83,765	)

Net change in cash and cash equivalents			36,722			(1,871	)		(4,138	)		30,713

Cash and cash equivalents, end of year		$	36,722		$	65		$	250		$	37,037

F-80

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2007
(Thousands)

			Parent Company			Co-Obligor Subsidiaries			Guarantor Subsidiaries			Consolidated

Cash and cash equivalents, beginning of year			$	18		$	1,870		$	5,889		$	7,777

Cash provided by (used in) operating activities:
	Net income (loss)			(63,078	)		(118,968	)		47,520			(134,526	)
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Depreciation		—			59,101			9,905			69,006
		Amortization of intangible and other assets		—			10,242			—			10,242
		Restructuring and other expenses		23,531			99,158			58,323			181,012
		Deferred income taxes		(80,635	)		—			—			(80,635	)
		Noncash interest charges		8,400			370			679			9,449
	Decrease in working capital items			9,949			19,235			26,179			55,363
	Increase (decrease) in product warranty claims			1,469			(291	)		(301	)		877
	(Increase) decrease in other assets			(5,863	)		394			(908	)		(6,377	)
	Increase (decrease) in other liabilities			8,983			(1,258	)		33			7,758
	Change in net receivable from/payable to related parties/parent corporations			(1,063,271	)		1,198,901			(126,333	)		9,297
	Other, net			—			(3,885	)		611			(3,274	)

Net cash provided by (used in) operating activities				(1,160,515	)		1,262,999			15,708			118,192

Cash used in investing activities:
	Acquisition of ElkCorp, net of cash acquired of $0.1 million			—			(945,295	)		—			(945,295	)
	Capital expenditures and acquisitions			—			(54,131	)		(30,380	)		(84,511	)
	Proceeds from sale of assets			—			6,755			—			6,755

Net cash used in investing activities				—			(992,671	)		(30,380	)		(1,023,051	)

Cash provided by (used in) financing activities:
	Proceeds from issuance of long-term debt			2,431,849			25,900			—			2,457,749
	Repayments of long-term debt			(1,229,608	)		(327,983	)		(8	)		(1,557,599	)
	Proceeds from sale-leasebacks			—			30,038			14,962			45,000
	Settlement of treasury lock hedges			(4,896	)		—			—			(4,896	)
	Distribution to parent corporation			(171	)		—			—			(171	)
	Loan to parent corporation			(193	)		—			—			(193	)
	Financing fees and expenses			(36,484	)		—			—			(36,484	)

Net cash provided by (used in) financing activities				1,160,497			(272,045	)		14,954			903,406

Net change in cash and cash equivalents				(18	)		(1,717	)		282			(1,453	)

Cash and cash equivalents, end of year			$	—		$	153		$	6,171		$	6,324

F-81

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Guarantor Financial Information (Continued)

Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 2006
(Thousands)

		Parent Company			Co-Obligor Subsidiary			Guarantor Subsidiaries			Consolidated

Cash and cash equivalents, beginning of year		$	9		$	180		$	6,693		$	6,882

Cash provided by (used in) operating activities:
Net income (loss)			(12,128	)		12,726			38,152			38,750
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Depreciation		4,155			38,093			7,073			49,321
	Amortization		—			2,993			—			2,993
	Deferred income taxes		2,770			—			—			2,770
	Noncash interest charges, net		3,262			1,334			—			4,596
(Increase) decrease in working capital items			49,088			(54,107	)		(2,129	)		(7,148	)
Decrease in product warranty claims			(825	)		—			—			(825	)
(Increase) decrease in other assets			(6,154	)		(5,910	)		100			(11,964	)
Increase (decrease) in other liabilities			7,658			—			(7	)		7,651
Change in net receivable from/payable to related parties/parent corporations			(59,228	)		41,871			2,894			(14,463	)
Other, net			(42	)		(156	)		1,070			872

Net cash provided by (used in) operating activities			(11,444	)		36,844			47,153			72,553

Cash provided by (used in) investing activities:
	Capital expenditures and acquisition of a manufacturing facility		(13,612	)		(25,886	)		(47,952	)		(87,450	)

Net cash used in investing activities			(13,612	)		(25,886	)		(47,952	)		(87,450	)

Cash provided by (used in) financing activities:
	Proceeds from issuance of long-term debt		824,000			—			—			824,000
	Repayments of long-term debt		(781,000	)		(2,943	)		(5	)		(783,948	)
	Repurchase of industrial development revenue bond certificates		—			(6,325	)		—			(6,325	)
	Distributions to parent corporation		(521	)		—			—			(521	)
	Dividends to parent corporation		(15,000	)		—			—			(15,000	)
	Loan to parent corporation		(191	)		—			—			(191	)
	Financing fees and expenses		(2,223	)		—			—			(2,223	)

Net cash provided by (used in) financing activities			25,065			(9,268	)		(5	)		15,792

Net change in cash and cash equivalents			9			1,690			(804	)		895

Cash and cash equivalents, end of year		$	18		$	1,870		$	5,889		$	7,777

F-82

Table of Contents

BUILDING MATERIALS CORPORATION OF AMERICA

SUPPLEMENTARY DATA (UNAUDITED)

Quarterly Financial Data (Unaudited)

	2008 by Quarter												2007 by Quarter

	First			Second			Third			Fourth			First			Second			Third			Fourth
	(Millions)
Net sales(1)	$	570.3		$	737.1		$	852.8		$	588.7		$	530.0		$	663.3		$	680.7		$	436.1
Cost of products sold(1)		424.9			515.9			602.5			424.9			392.9			486.0			493.4			323.3

Gross profit	$	145.4		$	221.2		$	250.3		$	163.8		$	137.1		$	177.3		$	187.3		$	112.8

Income (loss) before interest expense and income taxes(1)	$	14.9		$	85.9		$	94.5		$	42.5		$	25.5		$	(14.7	)	$	25.7		$	(63.9	)
Interest expense(2)		(39.9	)		(40.0	)		(39.5	)		(39.5	)		(49.3	)		(45.7	)		(44.3	)		(42.1	)

Income (loss) before income taxes		(25.0	)		45.9			55.0			3.0			(23.8	)		(60.4	)		(18.6	)		(106.0	)
Income tax (expense) benefit		10.0			(18.1	)		(20.3	)		0.9			8.5			15.9			7.4			42.5

Net income (loss)	$	(15.0	)	$	27.8		$	34.7		$	3.9		$	(15.3	)	$	(44.5	)	$	(11.2	)	$	(63.5	)

(1): The operating results for 2008 include $73.2 million of restructuring and other expenses, of which $6.1 million was included as a reduction in net sales due to restructuring-related sales discounts and $26.9 million was included in cost of products sold related to the acquisition of Elk. The operating results for 2007 include $181.0 million of restructuring and other expenses, of which $15.1 million was included as a reduction in net sales due to restructuring-related sales discounts and $24.3 million was included in cost of products sold.
(2): Interest expense for 2007 includes $23.2 million of debt restructuring costs related to the acquisition of Elk.

F-83

Table of Contents

SCHEDULE II

BUILDING MATERIALS CORPORATION OF AMERICA

VALUATION AND QUALIFYING ACCOUNTS

Year Ended December 31, 2008

Description		Balance January 1, 2008		Charged to Sales or Expenses			Deductions			Other		Balance December 31, 2008

		(Thousands)
Valuation and Qualifying Accounts
	Deducted from Assets To Which They Apply:
	Allowance for doubtful accounts	$	3,430	$	6,815		$	620	(b)	$	—	$	9,625
	Allowance for customer incentives		64,832		487,415	(a)		457,053			—		95,194
	Reserve for inventory market valuation		21,116		3,120	(f)		14,446	(f)		—		9,790
	Product warranty claims		44,724		19,079			18,838			—		44,965

Year Ended December 31, 2007

Description		Balance January 1, 2007		Charged to Sales or Expenses			Deductions			Other			Balance December 31, 2007

		(Thousands)
Valuation and Qualifying Accounts
	Deducted from Assets To Which They Apply:
	Allowance for doubtful accounts	$	1,319	$	1,588		$	1,948	(b)	$	2,471	(c)	$	3,430
	Allowance for customer incentives		50,942		372,174	(a)		387,394	(d)		29,110	(e)		64,832
	Reserve for inventory market valuation		2,224		40,009	(f)		21,689	(f)		572	(g)		21,116
	Product warranty claims		26,971		20,997			16,918			13,674	(h)		44,724

Year Ended December 31, 2006

Description		Balance January 1, 2006		Charged to Sales or Expenses			Deductions			Other			Balance December 31, 2006

		(Thousands)
Valuation and Qualifying Accounts
	Deducted from Assets To Which They Apply:
	Allowance for doubtful accounts	$	2,310	$	(1,017	)	$	(26	)(b)	$	—		$	1,319
	Allowance for customer incentives		74,505		270,302	(a)		293,865			—			50,942
	Reserve for inventory market valuation		4,756		135			2,667			—			2,224
	Product warranty claims		31,202		21,220			22,951			(2,500	)(i)		26,971

Notes:

(a): Amount charged to net sales, which included ElkCorp ("Elk") for 2007 from February 22, 2007 ("date of acquisition").

S-1

Table of Contents

(b): Represents write-offs of uncollectible accounts net of recoveries, which included Elk for 2007 from the date of acquisition.
(c): Represents allowance for doubtful accounts balance related to the acquisition of Elk.
(d): Deductions included Elk for 2007 from the date of acquisition.
(e): Represents allowance for customer incentives related to the acquisition of Elk.
(f): Amounts include purchase accounting and restructuring activity related to the acquisition of Elk from the date of acquisition.
(g): Represents reserve for inventory market valuation balance acquired from Elk.
(h): Represents warranty reserve balance acquired from Elk.
(i): Represents FTB No. 90-1 and SAB No. 108 adjustments.

S-2

EX-10.11 2 a2191887zex-10_11.htm EXHIBIT 10.11

Exhibit 10.11

AMENDMENT No. 10, dated as of January 1, 2008, to AMENDED AND RESTATED MANAGEMENT AGREEMENT, dated as of January 1, 1999, as amended by Amendment No. 1, dated as of January 1, 2000, Amendment No. 2, dated as of January 1, 2001, Amendment No. 3, dated as of June 27, 2001, Amendment No. 4, dated as of January 1, 2002, Amendment No. 5, dated as of January 1, 2003, Amendment No. 6 dated as of January 1, 2004, Amendment No. 7 dated as of January 1, 2005, Amendment No. 8 dated as of January 1, 2006, and Amendment No. 9 dated as of January 1, 2007 (as so amended, the “Agreement”), by and among G-I Holdings Inc., Merick Inc., International Specialty Products Inc. (“ISP”), International Specialty Holdings LLC (formerly International Specialty Holdings Inc.) (“ISH”), ISP Investco LLC (“Investco”), ISP Minerals Inc. (“Minerals”), GAF Broadcasting Company, Inc., Building Materials Corporation of America (“BMCA”), and ISP Management Company, Inc. (the “Company”), as assignee of ISP Chemco LLC (formerly ISP Chemco Inc.). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

WHEREAS, in accordance with Section 7 of the Agreement, the parties desire to adjust the management fees payable to the Company under the Agreement in order to properly reflect the costs to the Company of providing services thereunder;

NOW, THEREFORE, the parties hereby amend the Agreement as follows:

1. Section 3 of the Agreement is hereby amended, effective as of the date hereof, to read in its entirety as follows:

“In consideration of the Company providing Services hereunder, each of the parties listed below shall pay to the Company a management fee (the “Management Fee”) at the following respective rates for the quarter ending March 31, 2008 and for each quarter thereafter for which this Agreement has been extended as provided in Section 1 of this Agreement: BMCA (on behalf of itself, its parent and its subsidiaries) — $1,253,000; ISP - $5,000; ISH - $10,000; Minerals - $3,127,000 and Investco (on behalf of itself and its subsidiaries) - $950,000. The Management Fee shall be payable monthly in arrears.

In addition to the Management Fee, a wholly owned subsidiary of BMCA shall pay to the Company (as successor to both the overlandlord’s and sublandlord’s interests in the subject real property) rent payments pursuant to and in accordance with the terms of the Sublease (as amended) between such wholly owned subsidiary of BMCA and Company, the form of which is attached as Exhibit A hereto and made a part hereof.

In consideration of BMCA providing G-I Services hereunder, G-I Holdings Inc. (on behalf of itself and its subsidiaries other than BMCA and BMCA’s subsidiaries) shall pay to BMCA a management fee (the “G-I Management Fee”) at the rate of $235,000 for the quarter ended March 31, 2007 and for each quarter thereafter for which this Agreement has been extended as provided in Section 1 of this Agreement. The G-I Management Fee shall be payable monthly in arrears.”

2. Exhibit A to the Agreement is hereby amended to substitute therefore Exhibit A to this Amendment.

3. In all other respects, the Agreement as previously amended shall remain in full force and effect.

4. This Amendment is subject to the approval of the Board of Directors of the Company.

5. This Amendment may be executed in one or more counterparts, each of which shall be an original but all of which, taken together, shall constitute one and the same instrument. Failure by any one party to execute this Amendment shall not affect the rights and obligations of any other party signatory hereto.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.

G-I HOLDINGS INC.		GAF BROADCASTING COMPANY, INC.

By:	/s/ Louis Feldman	By:	/s/ Robert B. Tafaro
Name:	Louis Feldman	Name:	Robert B. Tafaro
Title:	Chief Tax Counsel and Assistant	Title:	Chief Executive Officer, President
	Secretary		and Secretary
Date:	March 10, 2009	Date:	March 27, 2009

MERICK INC.		BUILDING MATERIALS
		CORPORATION OF AMERICA
By:	/s/ Robert B. Tafaro
Name:	Robert B. Tafaro	By:	/s/ John F. Rebele
Title:	Chief Executive Officer, President and	Name:	John F. Rebele
	Secretary	Title:	Senior Vice President,
Date:	March 27, 2009		Chief Financial Officer and
			Chief Administrative Officer
		Date:	March 27, 2009
INTERNATIONAL SPECIALTY
PRODUCTS INC.		ISP MANAGEMENT COMPANY, INC.

By:	/s/ Gregg Kam
Name:	Gregg Kam	By:	/s/ Gregg Kam
Title:	Senior Vice President and	Name:	Gregg Kam
	Chief Financial Officer	Title:	Senior Vice President and
Date:	March 19, 2009		Chief Financial Officer
		Date:	March 19, 2009
ISP MINERALS INC.
		ISP INVESTCO LLC
		By: International Specialty Holdings LLC,
By:	/s/ Kenneth E. Walton	its sole member
Name:	Kenneth E. Walton
Title:	President	By:	/s/ Gregg Kam
Date:	March 10, 2009	Name:	Gregg Kam
		Title:	Senior Vice President and
			Chief Financial Officer
INTERNATIONAL SPECIALTY		Date:	March 19, 2009
HOLDINGS LLC

By:	/s/ Gregg Kam
Name:	Gregg Kam
Title:	Senior Vice President and
	Chief Financial Officer
Date:	March 19, 2009

EX-10.16 3 a2191887zex-10_16.htm EXHIBIT 10.16

Exhibit 10.16

BUILDING MATERIALS CORPORATION OF AMERICA
2001 LONG-TERM INCENTIVE PLAN

Amended and Restated Effective as of January 1, 2005

INTRODUCTION

Building Materials Corporation of America, a Delaware corporation (hereinafter referred to as the “Corporation”) established the “BUILDING MATERIALS CORPORATION OF AMERICA 2001 LONG-TERM INCENTIVE PLAN” (hereinafter referred to as the “Plan”) to permit the grant of Incentive Units (as hereafter defined) to eligible employees of the Corporation and the Subsidiaries (as hereafter defined). The Plan provides for a long term incentive system that supports the Corporation’s business strategy and emphasizes pay-for performance by tying reward opportunities to corporate goals.

The Plan’s original effective date was December 31, 2000 (the “Effective Date”). The Corporation hereby amends and restates the Plan, effective as of January 1, 2005, to comply with the provisions of Section 409A of the Code (hereinafter defined) and regulations and guidance issued thereunder (“Section 409A”). The Plan shall be interpreted and administered consistent with this intent and shall apply to all outstanding and prospective Incentive Unit awards.

For purposes of this Plan, the following terms shall be defined as follows unless the context clearly indicates otherwise:

Each individual who is an Employee shall be initially eligible to participate in the Plan. No individual shall automatically be entitled to receive a grant of Incentive Units solely because he is classified as an Employee.

The Board may amend the Plan from time to time or suspend or terminate the Plan at any time. In the event the Plan is terminated for any reason, the vesting, exercise, and expiration provisions, as described in this Plan, for all Incentive Units granted up to and including the date of the termination of the Plan, shall remain in effect.

* * *

IN WITNESS WHEREOF, the duly authorized officer of Building Materials Corporation of America has executed the Plan, as amended and restated, by the authority of its Board of Directors, effective as of January 1, 2005.

	BUILDING MATERIALS CORPORATION OF AMERICA

	By:	/s/ Jan Jerger-Stevens

	Title:	Senior Vice-President, Human Resources

	Date:	December 30, 2008

EX-10.38 4 a2191887zex-10_38.htm EXHIBIT 10.38

Exhibit 10.38

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (the “Agreement”) is entered into as of January 30, 2009 by and between Building Materials Corporation of America (“GAF”, as more fully defined in Paragraph 17 of this Agreement), and David A. Harrison (“Harrison”), sometimes herein collectively referred to as “the Parties”.

WITNESSETH:

WHEREAS, Harrison was employed at-will by GAF or its predecessors or subsidiaries most recently as Senior Vice President – Chief Marketing Officer in Wayne, New Jersey and was a member of the Board of Directors of GAF and its subsidiaries; and

WHEREAS, Harrison wishes to voluntarily terminate his at–will employment with GAF and resign from the Board of Directors of GAF and its subsidiaries effective the date hereof; and

WHEREAS, GAF agrees to provide Harrison with certain consideration as set forth herein including its agreement to enter into a Consulting Agreement with Harrison attached hereto as Exhibit A and made a part of this Agreement, provided he agrees to execute this Agreement;

WHEREAS, GAF has determined that Harrison has no days of earned but unused vacation days; and

WHEREAS, Harrison has been advised of his right to consult an attorney before signing this Agreement.

NOW, THEREFORE, in consideration of the covenants herein undertaken, and the releases herein contained including the general release in Paragraph 5 of this Agreement, and for other good and valuable consideration, receipt of which is hereby acknowledged by the parties, GAF and Harrison agree as follows:

1. Harrison voluntarily terminates his employment with GAF and resigns from the Board of Directors of GAF and its subsidiaries effective the date hereof (the “Separation Date”). Harrison agrees to execute any paperwork reasonably necessary to effectuate this separation. After the Separation Date, Harrison shall no longer serve as Senior Vice President – Chief Marketing Officer or in any other position or capacity with GAF except as otherwise specifically provided in the Consulting Agreement. Except as otherwise provided herein, Harrison shall return to GAF all GAF-owned or used property in his possession as soon as practicable and he will not retain copies of any confidential GAF information or material.

2. GAF agrees to provide the following pay, benefits, and other consideration to Harrison:

(a) GAF shall enter into a Consulting Agreement in the form attached hereto as Exhibit A and made a part of this Agreement.

(b) Beginning February 1, 2009, Harrison is eligible to elect the continuation of his group medical and/or dental insurance coverage provided by GAF as provided by the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). After January 31, 2009, Harrison shall no longer be eligible for any other welfare benefit not included in COBRA continuation coverage or for participation in any pension benefit including GAF’s 401k plan.

(c) GAF agrees to sell to Harrison the Company-leased automobile currently in his possession for a total of one dollar ($1.00). Harrison acknowledges and agrees that he shall be solely responsible for compliance with any applicable Internal Revenue Service regulations with respect to any tax consequences or obligations associated with the purchase of this automobile. The Parties acknowledge that the automobile is being sold “as is” without any warranty, express or implied. GAF makes no representations regarding the automobile and upon execution of the sale, GAF has no further responsibilities or liabilities associated with the automobile.

(d) GAF agrees to sell to Harrison the Company-owned laptop computer currently in his possession for a total of one dollar ($1.00). Harrison acknowledges and agrees that he shall be solely responsible for compliance with any applicable Internal Revenue Service regulations with respect to any tax consequences or obligations associated with the purchase of this computer. As a condition to the sale, Harrison agrees to return the computer to GAF to allow GAF to copy or remove all GAF proprietary information, data and applications and any other information, data or applications as determined by GAF in its sole discretion. GAF agrees to remove all GAF-specific applications, network log-ins and other applications so as to allow unrestricted use of the computer. GAF agrees to use reasonable efforts to return said computer to Harrison within one (1) business day from the time it is returned to GAF. The Parties acknowledge that the laptop is being sold “as is” without any warranty, express or implied. GAF makes no representations regarding the computer and upon execution of the sale, GAF has no further responsibilities, except as provided in this paragraph, or liabilities associated with the computer. Upon Harrison completing the necessary transfer documentation as requested by GAF, GAF will transfer to Harrison for his personal use the mobile phone number he currently uses and Harrison shall be responsible thereafter for all costs and fees relating to that number.

(e) Harrison acknowledges and agrees that he is waiving his right to, and is not eligible for, a 2008 bonus under GAF’s Executive Incentive Compensation Plan. However, GAF agrees to pay him a discretionary bonus for 2008 performance in the amount of One hundred eighty thousand dollars ($180,000.00), subject to standard withholding and payroll deductions, payable no later than February 28, 2009. This payment shall be transmitted to Harrison by direct deposit or wire transfer to the account on record with GAF.

3. Harrison agrees not to disclose the contents of this Agreement to anyone except his attorney and/or financial consultant, if any, his immediate family, and appropriate governmental agencies which require this information or as required by law. If disclosure is made to any of the foregoing, Harrison shall advise each of the non-disclosure requirements of this Agreement.

Harrison shall also keep confidential and not disclose to anyone the circumstances leading to the execution of this Agreement, subject to the exceptions specified herein and also subject to his right to discuss such circumstances (but not the contents of this Agreement) with any bona fide prospective employers of Harrison or as required by law. GAF agrees not to disclose the contents of this Agreement or the circumstances leading to its execution except as required by law or to its attorneys or other advisers, all of whom will be advised of the non-disclosure requirements of this Agreement.

4. If Harrison discloses the contents of this Agreement or any other information, the disclosure of which is prohibited by this Agreement, except as allowed and under the conditions provided herein, or is otherwise in material breach of this Agreement or the Agreement Regarding Confidentiality and Competition dated as of July 10, 1998 by and between GAF and Harrison, as amended by the Employment Security Agreement dated as of June 30, 2001 by and between GAF and Harrison (the “Confidentiality and Competition Agreement”), before all amounts, benefits or other consideration due under this Separation Agreement and General Release are provided to him, GAF’s obligation to make any remaining payments or to provide any benefit or other consideration to Harrison under the instant Agreement shall cease. The foregoing is in addition to and without limiting GAF’s rights to any other remedy it may have by reason of such a breach.

5. In consideration for the benefits and other consideration provided for in this Agreement, Harrison, on behalf of himself, his heirs, executors, administrators, successors and assigns, hereby forever releases and discharges GAF, its parent companies and its and their respective successors, assigns, subsidiaries, affiliates, directors, officers, shareholders, representatives, attorneys, insurers, agents and employees (hereinafter “GAF Releasees”) from any and all causes of action, claims, losses, damages, costs and/or expenses (including attorney’s fees) and/or other liabilities (collectively, “Liabilities”), known or unknown, asserted or unasserted, which Harrison has or may have, from the beginning of time to the date of the execution of this Agreement, including, but not limited to, Liabilities arising under any and all

federal, state, or local laws, regulations, or ordinances prohibiting discrimination in employment on the basis of sex, sexual orientation, race, age, religion, national origin, mental or physical disability, or any other form of unlawful discrimination, including but not limited to, Title VII of The Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act of 1967, as amended; the Older Workers Benefit Protection Act; the Family and Medical Leave Act; the Americans with Disabilities Act; any accrued benefit under any other GAF Employee welfare benefit plan as that term is defined by Section 3(1) of the Employment Retirement Income Security Act; any provision of the Constitution of the United States, the State of New Jersey, or any other state; any provision of any other law, common or statutory, of the United States, New Jersey or any other state, including New Jersey’s Law Against Discrimination (“LAD”), New Jersey’s Conscientious Employee Protection Act (“CEPA”), any contract of employment, expressed or implied; as well as any and all claims alleging wrongful termination, or any other tortious or wrongful conduct or omission, in any way relating to or arising out of Harrison’s hiring by GAF, his employment with GAF, or his separation of employment. Excepted from this release is any claim or right which cannot be waived by law, including workers’ compensation claims and claims arising after the date of this Agreement. The Parties intend Harrison’s release as set forth in this paragraph to be general and comprehensive in nature and to release all claims and potential claims by Harrison to the maximum extent permitted by law.

Nothing in this Agreement shall be construed to prohibit Harrison from filing any future charge or complaint with the EEOC or participating in any investigation or proceeding conducted by the EEOC, nor shall any provision of this Agreement adversely affect Harrison’s right to engage in such conduct. Notwithstanding the foregoing, Harrison waives the right to obtain any relief from the EEOC or to recover any monies or compensation as a result of filing a charge or complaint.

6. Harrison acknowledges that the only consideration for signing this Agreement and all that he is ever to receive from Releasees are expressed in the terms stated in this Agreement and that no other promises or agreements of any kind have been made to Harrison by any person or entity whatsoever to cause him to sign this Agreement, and that Harrison has signed this Agreement

as a free and voluntary act. Harrison further acknowledges that pursuant to the terms of this Agreement, he is and will be receiving pay, benefits, and other consideration from GAF which are substantially above and beyond the pay, benefits, or other consideration to which he, in the absence of this Agreement, would be entitled. Harrison further acknowledges that GAF is providing the payments, benefits, and other consideration set forth in this Agreement by Harrison’s promises, including the full and comprehensive release provided in Paragraph 5. Except as expressly stated in this Agreement, Harrison shall not receive any other pay, benefits, or consideration from GAF including any severance pay under GAF’s Severance Pay Plan for Salaried Employees. Notwithstanding the foregoing, Harrison’s rights and obligations with respect to any Long Term Incentive Units shall be governed by the applicable Long Term Incentive Unit Plan based on his Separation Date. Any future vesting of previously granted but unvested units shall cease on the Separation Date, and Harrison shall have ninety (90) days to exercise any units vested as of that date.

7. Harrison hereby waives any and all rights or claims that he may have to reinstatement, employment or reemployment with GAF.

8. Harrison agrees that this Agreement shall not be offered, used or considered as evidence in any proceeding against GAF except to the extent necessary to enforce the terms of this Agreement. GAF agrees that this Agreement shall not be offered, used or considered as evidence in any proceeding against Harrison except to the extent necessary to enforce the terms of this Agreement.

9. This Agreement is not, and shall not, be construed as an admission by GAF or Harrison of any acts or omissions that could or might be alleged with respect to any matter concerning Harrison’s employment or separation of employment with GAF. Without limiting the foregoing, this Agreement is not, and shall not be, construed as an admission by GAF of (i) any violation of any law, regulation, or ordinance; or (ii) any wrongful act toward Harrison; or (iii) any

liability whatsoever for any damages or injuries that are or could be claimed by him with respect to his hiring by GAF, his employment, or the separation of his employment.

10. Harrison represents and warrants that he has not filed or otherwise initiated any proceeding, complaint, charge, or lawsuit with any court, government agency, or other entity relating to any claims being released by him under this Agreement. In addition to agreeing herein not to bring suit against GAF, Harrison agrees to not file a claim or charge with any state or governmental agency wherein he seeks damages from GAF.

11. After the Separation Date, upon reasonable notice and without any additional consideration except for reimbursement of authorized expenses, Harrison agrees to cooperate with GAF and to meet with GAF representatives in connection with any legal matter in which Harrison may potentially be called as a witness for GAF. The foregoing does not create any employment relationship between him and GAF. GAF agrees that it will reimburse Harrison for his time in this regard at One thousand five hundred dollars ($1,500.00) per day and for any expenses incurred by him at GAF’s request in connection with his cooperation as provided herein, provided Harrison submits appropriate and supporting documentation to GAF in a reasonable and timely manner. GAF agrees to cooperate with Harrison to minimize any disruption to Harrison caused by his cooperation with GAF in such matters as provided herein.

12. Harrison agrees not to make any defamatory or derogatory statement, written or verbal, to any third parties regarding the facts or circumstances surrounding this Agreement or any other defamatory or derogatory statement that may be harmful to GAF or may be injurious to the goodwill, reputation or business standing of GAF. GAF agrees not to make any defamatory or derogatory statement, written or verbal, to any third parties regarding the facts or circumstances surrounding this Agreement or any other defamatory or derogatory statement that may be harmful to Harrison or may be injurious to the goodwill, reputation or business standing of Harrison. GAF agrees, in response to any and all inquiries regarding Harrson’s work under the Consulting

Agreement and/or his previous employment with GAF, to provide Harrison’s dates of employment and work under the Consulting Agreement, his job title as an employee of GAF, and a statement that only this information is provided regarding all GAF employees pursuant to corporate practice.

13. If any one or more of the provisions contained herein shall for any reason be held to be unenforceable in any respect under the law of any state or of the United States of America, such unenforceability shall not affect any other provision of this Agreement, and said provision shall be ineffective, to the extent of such unenforceability, with respect only to that jurisdiction holding the provision to be unenforceable.

14. Any controversy or claim arising from or related to this Agreement or the breach thereof shall be settled by final and binding arbitration by a single arbitrator in an arbitration administered by the American Arbitration Association in Passaic County, New Jersey, in accordance with the Expedited Procedures of its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

15. Harrison and GAF hereby consent and submit to the exclusive jurisdiction of the Federal and state courts located in the State of New Jersey with regard to any and all disputes arising from or related to Sections 3 or 4 of this Agreement. Harrison and GAF waive any objection to personal jurisdiction in New Jersey and any objection that those courts are inconvenient forums to hear such disputes. Each of Harrison and GAF hereby consent and agree that service of process by the other party shall be deemed validly and properly affected against

them upon the mailing of a copy of such process by certified mail, postage prepaid, to them at their addresses as provided below or as hereafter provided to the other party in writing.

If to Harrison:

Mr. David A. Harrison

14 Elm Street

Denville, NJ 07834

If to GAF:

GAF Building Materials Corporation

Chief Executive Officer

1361 Alps Road

Wayne, NJ 07470

With a copy to:

GAF Building Materials Corporation

Office of the General Counsel

1361 Alps Road

Wayne, NJ 07470

16. This Agreement contains the entire agreement between Harrison and GAF and fully supersedes any and all prior agreements, with the exception of the Confidentiality and Competition Agreement, which shall continue in full force and effect under its terms, or understandings pertaining to the subject matter hereof. Harrison represents and acknowledges that in executing this Agreement he has not relied upon any representation or statement not set forth herein, made by any of the Releasees or by any of the Releasees’ agents, representatives, or attorneys with regard to the

subject matter of this Agreement. No other promise or agreement shall be binding unless in writing and signed by the Parties hereto.

17. All references to GAF in this Agreement include: (a) any affiliated, related, subsidiaries, or parent companies of Building Materials Corporation of America; (b) any past or present officers, directors, shareholders, attorneys, insurers, agents, representatives, and/or employees of GAF and or its parents, subsidiaries, affiliates and related companies; and (c) any and all respective predecessors, successors and assigns, and any and all benefit plans, of GAF and/or its affiliated companies (as well as the past or present officers, directors, shareholders, agents, representatives, and employees of such entity).

18. Harrison acknowledges that he has been advised by GAF of his right to consult an attorney before signing this Agreement, and that he has been provided at least twenty-one (21) days after the date he received this document to consider the Agreement. Harrison also understands that he may sign the Agreement prior to that date. Harrison further understands that he may revoke and repudiate this Agreement within seven (7) days after signing it by delivering written notification to Scott C. Carroll, Vice President Employment & Labor Law, GAF Materials Corporation, 1361 Alps Road, Building 8/2, Wayne, New Jersey 07470 and Harrison understands that this Agreement shall not become effective or enforceable until the seven (7) day revocation period has expired. Should Harrison revoke and repudiate this Agreement during the foregoing seven (7) day period, he shall be required to return or repay the value of any consideration under this Agreement he already received, except if he challenges the validity of the waiver and release agreement under the Age Discrimination in Employment Act.

19. BY SIGNING THIS SEPARATION AGREEMENT AND GENERAL RELEASE, HARRISON STATES THAT:

(a) HE HAS READ IT;

(b) HE UNDERSTANDS AND KNOWS THAT HE IS GIVING UP CERTAIN RIGHTS;

(d) HE IS AWARE OF HIS RIGHT TO CONSULT AN ATTORNEY BEFORE SIGNING IT; AND

(e) HE HAS SIGNED IT KNOWINGLY AND VOLUNTARILY.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed.

		Building Materials Corporation of America

WITNESSED:

/s/ Scott Carroll		By:	/s/ Robert B. Tafaro
		Robert B. Tafaro
		President and CEO

Date:	1/30/09	Date:		1/30/09

WITNESSED:

/s/ Victoria Gormley		By:	/s/ David A. Harrison
		David A. Harrison

Date:	1/30/09	Date:		1/30/09

CONSULTING AGREEMENT

[See Exhibit 10.39 to this Form 10-K]

EX-10.39 5 a2191887zex-10_39.htm EXHIBIT 10.39

Exhibit 10.39

January 29, 2009

Mr. David A. Harrison

14 Elm Street

Denville, NJ 07834

Re: Consulting Agreement

Dear Dave:

This letter agreement (the “Agreement”), effective as of January 30, 2009 (the “Effective Date”), when accepted and agreed to by you (“Consultant”) and Building Materials Corporation of America (“GAF”), shall constitute the agreement between Consultant and GAF pursuant to which Consultant is to provide consulting services to GAF and its affiliates and/or subsidiaries as set forth herein.

WHEREAS, Consultant has prior experience with GAF’s business and industry, and the parties seek to establish the terms and conditions pursuant to which Consultant shall provide services, advice and expertise on the subject matter designated herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:

1. Consulting Services. A. During the term of this Agreement, Consultant shall provide GAF with the consulting services described herein (the “Services”), when and as directed by GAF’s Designated Representative identified in Paragraph 2, below. Such Services shall generally involve the services described in Paragraphs 4.A and 4.B below, and such other work or special projects as GAF’s Designated Representative shall direct from time to time.

B. All such Services shall be performed at times and locations approved by GAF’s Designated Representative. Consultant will not maintain an office at any GAF facility.

C. Additional Services to be provided by Consultant shall only be authorized if approved in advance and in writing by GAF’s Designated Representative, or such other person as is designated in writing from time to time by GAF. If such additional Services are not so authorized in advance, GAF shall not be responsible for payment of the same.

D. Consultant acknowledges and agrees that Consultant shall be providing consulting services pursuant to this Agreement as an independent contractor and that this Agreement does not, and is not intended to, create any employer-employee relationship between Consultant and GAF. As such, Consultant acknowledges that Consultant is not eligible to participate in, and waives any claims to, any type of benefits offered to employees of GAF, its affiliates or subsidiaries, including, but not limited to, vacation, sick leave, holiday pay, payroll taxes, workers’ compensation, and unemployment compensation insurance.

E. Consultant agrees to use his best efforts to meet GAF’s requests and to provide GAF with the full benefit of his knowledge, experience, and skill in the field. Consultant warrants that his Services shall be performed in a professional and workmanlike manner and according to the highest standards of the industry.

2. Designated Representative. In rendering the Services to be provided hereunder, Consultant shall receive instructions from Robert B. Tafaro as GAF’s Designated Representative (unless notified to the contrary in writing by GAF).

3. Compensation.

A. For the first twelve (12) months of this Agreement (the “Initial Period”), GAF shall pay consultant a monthly fee of twenty-eight thousand dollars ($28,000.00) (or prorated amount for any portion of a month, as determined by days within the month).

B. For the six (6) months following the Initial Period (the “Extended Period”), GAF shall pay consultant a monthly fee of ten thousand dollars ($10,000.00) (or prorated amount for any portion of a month, as determined by days within the month).

C. Notwithstanding any provision to the contrary contained herein, at any time during the Initial Period, Consultant may elect, upon ten (10) days’ written notice to GAF, to provide the Guaranteed Initial Period Reduced Services (as defined below) and receive a monthly fee of fourteen thousand dollars ($14,000.00) (or prorated amount for any portion of a month, as determined by days within the month), in lieu of, and not in addition to, the compensation provided for in Paragraph 3.A. If Consultant makes such election, the election shall terminate at the end of the Initial Period.

D. Notwithstanding any provision to the contrary contained herein, at any time during the Extended Period, Consultant may elect, upon ten (10) days’ written notice to GAF, to provide the Guaranteed Extended Period Reduced Services (as defined below) and receive a monthly fee of five thousand dollars ($5,000.00) (or prorated amount for any portion thereof) in lieu of, and not in addition to, the compensation provided for in Paragraph 3.B.

E. The Company may, in its sole discretion, authorize consultant to perform some or all of the Guaranteed Initial Period Services, Guaranteed Extended Period Services, Guaranteed Initial Period Reduced Services, or Guaranteed Extended Period Reduced

Services (collectively, the “Guaranteed Services”), as applicable, but shall pay Consultant the full amount for the applicable Guaranteed Services, as provided in Paragraphs 3.A, 3.B, 3.C or 3.D.

4. Services.

A. For the Initial Period, upon the request and direction of GAF, Consultant shall (i) attend or conduct seminars or other meetings with GAF certified contractors or such other persons as requested by GAF (each day of such seminars or meetings, not including days for preparation and travel, a “Contractor Event”) for that number of Contractor Events as requested by GAF pursuant to Section 4.F. but not to exceed twenty-five (25) Contractor Events, and (ii) perform, upon the request and at the direction of GAF, no more than twenty (20) hours per month of Services in addition to the Contractor Events (collectively, the “Guaranteed Initial Period Services”).

B. For the Extended Period, upon the request and at the direction of GAF, Consultant shall (i) attend or conduct that number of Contractor Events as requested by GAF pursuant to Section 4.F. but not to exceed eleven (11) Contractor Events, and (ii) perform, upon the request and direction of GAF, no more than ten (10) hours per month of Services in addition to the Contractor Events (collectively, the “Guaranteed Extended Period Services”).

C. “Guaranteed Initial Period Reduced Services” shall mean performing, upon the request and at the direction of GAF, no more than twenty (20) hours per month of Services.

D. “Guaranteed Extended Period Reduced Services” shall mean performing, upon the request and at the direction of GAF, no more than ten (10) hours per month of Services.

E. In addition to that number of (i) Contractor Events or (ii) hours of consulting services included as part of the Guaranteed Initial Period Services or Guaranteed Extended Period Services, as applicable, GAF and Consultant may mutually agree that Consultant (A) attend or conduct additional Contractor Events in exchange for payment to Consultant equal to two thousand five hundred dollars ($2,500.00) per Contractor Event or (B) perform additional consulting services for payment to Consultant equal to two thousand five hundred dollars ($2,500.00) per work day of eight (8) hours and prorated for any portion of a day worked less than eight (8) hours.

F. The parties agree to the following process for scheduling Contractor Events. For Contractor Events previously scheduled with Consultant prior to the execution of this Agreement to take place prior to April 1, 2009, Consultant acknowledges notice of such Contractor Events and hereby confirms his availability to attend such Contractor Events. For the avoidance of doubt, Consultant’s attendance and participation at the International Roofing Exposition in February 2009 shall not be considered a Contractor Event.

For the April 2009 through May 2009 period, Consultant shall provide to GAF by

February 1, 2009 his dates of unavailability and GAF shall select dates on which Consultant will attend Contractor Events no later than February 28, 2009. To the extent GAF wishes to schedule events in March 2009 in addition to those already scheduled as of the date of this Agreement, GAF will provide Harrison at least thirty (30) days notice for those particular dates.

For each period from September through October during the term of this Agreement, including any renewal periods, Consultant shall provide to GAF by the immediately preceding July 1 his dates of unavailability and GAF shall select dates on which Consultant will attend Contractor Events no later than the immediately preceding July 31.

For each period from January through May during the term of this Agreement, including any renewal periods, commencing with the period beginning January 1, 2010, Consultant shall provide to GAF by the immediately preceding November 15 his dates of unavailability and GAF shall select dates on which Consultant will attend Contractor Events no later than the immediately preceding December 15.

If GAF requests Consultant to participate in any Contractor Event outside of the time periods described above, it shall provide Consultant with at least sixty (60) days notice, and Consultant may propose alternative dates if he is unavailable on the date proposed.

In providing dates of Consultant’s unavailability, Consultant agrees that he will be available at least sixty percent (60%) of the business days for each period. GAF agrees to schedule Contractor Events in a logistically reasonable manner so that Consultant has sufficient time to travel between Contractor Events (for example, two days to travel between an event in Florida and an event in Oregon).

G. Consultant shall submit an invoice at the end of each calendar month during the term hereof to GAF for the fees incurred by GAF pursuant to Paragraph 3 above for that month. Said invoice shall be accompanied by appropriate supporting documentation, satisfactory to GAF, evidencing the days and hours worked by Consultant, if any, during said calendar month and any reimbursable expenses incurred in accordance with Section 3 of the General Terms and Conditions attached hereto for which Consultant seeks payment and reimbursement, respectively, hereunder. GAF shall review each invoice and the supporting documentation accompanying the same and, unless disputed by GAF, pay the amount set forth in each such invoice within thirty (30) days after GAF’s receipt of the same.

5. Term. A. The term of this Agreement shall commence as of the Effective Date and shall terminate eighteen (18) months from the Effective Date unless earlier terminated as provided herein (the “Original Term”).

B. Either party may terminate this Agreement at any time without cause or reason and without any further liability, obligation or responsibility hereunder to the other party or any third party, except for fees earned by Consultant in accordance with this Agreement prior to such termination, upon not less than thirty (30) days prior written

notice to the other party. A termination by GAF during the Original Term pursuant to this Paragraph 5.B. shall not terminate GAF’s payment obligations pursuant to Paragraph 3.A., 3.B., 3.C, or 3.D., as applicable.

C. This Agreement shall terminate automatically and without any further liability, obligation or responsibility hereunder upon the timely revocation by Consultant of the Separation Agreement and General Release dated as of January 30, 2009 by and between Consultant and GAF (the “Separation Agreement”).

D. If Consultant materially breaches this Agreement, the Separation Agreement, or the Agreement Regarding Confidentiality and Competition dated as of July 10, 1998 by and between Consultant and GAF, as amended by the Employment Security Agreement dated as of June 30, 2001 by and between GAF and Harrison (the “Confidentiality and Competition Agreement”), GAF may give written notice to Consultant of such breach and Consultant shall have thirty (30) days after receipt of such notice of breach to cure such breach; provided, however, that Consultant shall have five (5) days to cure a breach of his non-competition or confidentiality obligations, if curable. If any breach is not cured within the applicable time period, GAF may terminate this Agreement without any further liability, obligation or responsibility. The foregoing is in addition to and without limiting GAF’s rights to any other remedy it may have as a result of such breach.

E. This Consulting Agreement shall terminate automatically and without any further liability, obligation or responsibility hereunder upon the death or disability of the Consultant. Disability is defined to mean that Consultant is physically unable to perform any obligation under this Agreement for a total of fifteen (15) days during any period as described in Paragraph 4.F. above or the period of thirty (30) days in a rolling twelve (12)-month period.

F. GAF may immediately terminate this Consulting Agreement if Consultant (a) engages in gross negligence or willful misconduct in performing Services which are the subject of this Consulting Agreement or (b) discloses the contents of the Separation Agreement or any other information, the disclosure of which is prohibited by the Separation Agreement or Confidentiality and Competition Agreement. The foregoing is in addition to and without limiting GAF’s rights to any other remedy it may have.

G. GAF may extend the Extended Period of this Agreement upon the same terms and conditions as those set forth herein for additional one (1) year terms upon written notice to Consultant provided at least thirty (30) days prior to the expiration of the then current term.

6. Objectives. To determine work schedules and objectives, at GAF’s request, Consultant and GAF’s Designated Representative (or such other person designated in writing by GAF from time to time) shall confer in person or by telephone no more than once per month at a mutually agreeable time and location.

7. Non-Competition. Consultant acknowledges and reaffirms his obligations under, and the restrictions imposed by, the Confidentiality and Competition Agreement, as amended by the Employment Security Agreement. For purposes of determining the Restricted Period under that Agreement, Consultant’s date of resignation of employment is the date of the Separation Agreement.

Because of the nature of the Services to be performed by Consultant hereunder, and because Consultant will have access to GAF’s Confidential Information, as that term is defined in Condition 1 of the General Conditions for Consulting Agreements, which are attached hereto and by reference incorporated herein, Consultant agrees that the restrictions imposed by the aforementioned Confidentiality and Competition Agreement shall be extended through the Non-Competition Period (as defined below) and that, in addition to such restrictions, during the Non-Competition Period Consultant shall not, directly or indirectly, disclose confidential information that can be utilized by a distributor to improve its negotiating approach to GAF’s detriment in roofing products, including with respect to pricing and/or volume support, and Consultant shall not provide services that adversely affect GAF’s competitive position with its roofing competitors. Nothing in this Agreement shall prevent Consultant from providing services, such as (but not limited to) internal training or marketing events, that provide a distributor with a competitive advantage against other distributors without having the adverse effect on GAF described in the preceding sentence. As used herein, the term “Non-Competition Period” means the term of this Agreement and any extension or extensions thereof, and for such additional period, as provided below, after this Agreement’s expiration or termination (the “Extended Non-Competition Period”).

The applicable Extended Non-Competition Period shall be as follows:

Upon expiration of this Agreement, including any extensions thereto, or (i) upon termination pursuant to Paragraph 5.B. by GAF or (ii) upon termination pursuant to Paragraph 5.E, the Extended Non-Competition Period shall terminate twenty-four (24) months following such expiration or termination in exchange for payment to Consultant of five thousand dollars ($5,000.00) per month during the Extended Non-Competition Period.

If this Agreement is terminated early pursuant to (i) Paragraph 5.B. by Consultant, (ii) Paragraph 5.C., (iii) Paragraph 5.D, or (iv) Paragraph 5.F,, then the Non-Competition Period shall continue through the Original Term and the Extended Non-Competition Period shall terminate twenty-four (24) months following the date the Original Term would have ended if the Agreement had not been earlier terminated. If the Agreement is terminated as described in the preceding sentence, GAF shall pay Consultant five thousand dollars ($5,000.00) per month for each of the twenty-four (24) months of the Extended Non-Competition Period following the date the Original Term would have ended if the Agreement had not been earlier terminated.

Consultant’s restrictions and obligations as contained in this Paragraph 7 shall survive termination of this Agreement and shall terminate as provided in this Paragraph 7.

8. Non-Disparagement Consultant agrees that during the term of this Agreement and thereafter, he will not make any statement or criticism which is adverse to the interests of GAF, its customers or its vendors; nor will he take any action that may reasonably cause GAF, its customers or its vendors embarrassment, humiliation, or otherwise cause or contribute to GAF, its customers or its vendors being held in disrepute. GAF agrees that during the term of this Agreement and thereafter, its senior management will not make any statement or criticism which is adverse to the interests of Consultant nor will its senior managment take any action that may reasonably cause Consultant embarrassment, humiliation, or otherwise cause or contribute to Consultant being held in disrepute. GAF agrees, in response to any and all inquiries regarding Consultant’s work under this Agreement and/or previous employment with GAF, to provide Consultant’s dates of employment and work under this Agreement, his job title as an employee of GAF, and a statement that only this information is provided regarding all GAF employees pursuant to corporate practice.

If the foregoing is acceptable to you, please indicate such acceptance thereof and your agreement thereto by signing and returning the enclosed copy of this letter agreement to Robert B. Tafaro, GAF, 1361 Alps Road, Wayne, NJ 07470.

	Very truly yours,

	BUILDING MATERIALS CORPORATION OF AMERICA


	By:	/s/ Robert B. Tafaro
		Robert B. Tafaro
		President and CEO

ACCEPTED AND AGREED TO:

/s/ David A. Harrison
David A. Harrison

BUILDING MATERIALS CORPORATION OF AMERICA
BUILDING MATERIALS MANUFACTURING CORPORATION

Date: March 30, 2009

/s/ JOHN F. REBELE

John F. Rebele

Senior Vice President, Chief Financial
Officer and Chief Administrative Officer

FOR

CONSULTING AGREEMENTS

1. Confidentiality. A. Consultant shall keep confidential and shall not use or disclose except in the performance of the Services to be provided hereunder, any proprietary technical or business information, including, but not limited to, trade secrets, of GAF, its affiliates or subsidiaries which Consultant may have obtained during his prior employment with GAF or may obtain during the term of this Agreement or which may be developed by or on behalf of Consultant for GAF, its affiliates or subsidiaries as well as any proprietary technical or business information of third parties which is made available to Consultant in connection with Consultant’s services hereunder (the “Confidential Information”). Upon termination or expiration of this Agreement, or earlier if requested by GAF, he shall deliver all such Confidential Information and any copies of the same to GAF. Consultant acknowledges and agrees that GAFwould suffer irreparable harm in the event the Confidential Information or any portion thereof was disclosed, copied or used in any manner except as provided herein. Accordingly, and notwithstanding Condition 10.A. hereof, in the event of a breach or threatened breach of the provisions of this Condition 1, Consultant agrees that GAFshall be entitled to pursue any and all remedies at law or in equity, including, but not limited to, a temporary restraining order or preliminary or permanent injunction, or the equivalent of the same, without requirement of a bond, to prevent disclosure, copying and/or use of the Confidential Information.

B. Any other provisions contained herein to the contrary notwithstanding, it is hereby agreed that the confidentiality and non-disclosure provisions set forth in this Condition 1 shall indefinitely survive termination of this Agreement.

2. Proprietary Rights. A. The work product of Consultant’s Services hereunder, whether of a business or technical nature, and any writings, discoveries, inventions or improvements made or conceived during the course of, or resulting from, the Services provided hereunder, shall be promptly communicated to, and be the exclusive property of, GAF. Consultant, at no cost to him, shall perform all lawful acts requested by GAF to:

(i)	perfect title therein in GAF or its nominee; and

(ii)	enable GAF or its nominee to obtain and maintain copyright, patent or other legal protection therefor anywhere in the world.

B. Any other provisions contained herein to the contrary notwithstanding, it is hereby agreed that the provisions set forth in this Condition 2 shall indefinitely survive termination of this Agreement.

3. Expenses. A. Air travel, if required, shall be by coach or economy class and be booked through GAF’s travel partner Orbitz (or such other travel partner designated by GAF). Orbitz air travel will be direct billed to GAF. Travel not associated with GAF should not be booked under the GAF Orbitz travel. GAF shall reimburse Consultant for all other

reasonable and necessary travel and lodging expenses Consultant incurs at GAF’s request in the performance of consulting services hereunder including, without limitation, any travel from Consultant’s home to GAF’s headquarters in Wayne, NJ, and for any other disbursements by Consultant that GAF authorizes in advance in writing in accordance with GAF’s then current Travel and Entertainment Policy. Consultant shall not receive compensation for travel time, except to the extent consulting services are actually performed during such time.

B. Consultant shall submit an invoice to GAF’s Designated Representative at the end of any month in which consulting services are performed with respect to expenses for which Consultant seeks reimbursement hereunder, accompanied by appropriate supporting documentation, satisfactory to GAF, evidencing such expenses, including, but not limited to, a receipt for any expenditure over ten dollars ($10.00).

4. Complete Compensation. Consultant agrees that the payments hereunder are full and complete compensation for all Services performed, for all obligations assumed and for all inventions, improvements, patent rights and copyrights assigned hereunder.

5. Conflict of Interest. Consultant represents, warrants and covenants that Consultant has no obligation to any other party which is inconsistent with Consultant’s obligations under this Agreement and that Consultant shall not, in the performance of this Agreement, breach any obligations that Consultant may have to others. Consultant agrees not to perform any services for others that would create a conflict of interest with Consultant’s obligations under this Agreement.

6. Notices. Any notices, payments or statements to be provided under this Agreement shall be sent to Consultant at the address to which this letter is directed and to GAF at its address above (to the attention of its Designated Representative) or to such other address as one party may from time to time designate in writing to the other.

7. Independent Contractor. Consultant shall perform this Agreement solely as an independent contractor and not as GAF’s agent, employee or representative. Nothing in this Agreement is intended or shall be construed to create or establish an agency, partnership or joint venture relationship between the parties hereto. Consultant has no authority to make any statement, representation or commitment of any kind or to take any action binding upon GAF without GAF’s prior written authorization in each instance. Consultant acknowledges that Consultant is not eligible to participate in, and waives any claims to any type of benefits offered to employees of GAF, its affiliates or subsidiaries. GAF shall not withhold any amount attributable to payments hereunder for any benefit program or for any local, state, municipal, federal or national tax purpose, and Consultant shall be solely responsible for fulfilling all such tax obligations, including, without limitation, any salary, wage or payroll taxes or any other costs based on employment and/or payroll, including, without limitation, any form of social security, unemployment insurance, disability benefits, workers compensation, severance payments, pension, health, life or any other employee benefits or insurance, and/or any other local, state,

municipal, federal or national taxes or levies otherwise imposed in connection with any of the fees paid Consultant hereunder.

8. Laws and Regulations. Consultant shall comply with all applicable laws and governmental regulations. Consultant is not expected or authorized to take any action in the name of or otherwise on behalf, of GAF which would violate applicable laws or governmental regulations.

9. Complete Agreement and Waiver. A. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, merges all prior agreements, except the Separation Agreement and Confidentiality and Competition Agreement, as amended by the Employment Security Agreement, or understandings pertaining thereto, and may not be modified except by a written amendment signed by the parties hereto. The Separation Agreement and Confidentiality and Competition Agreement, as amended by the Employment Security Agreement, shall continue in full force and effect and terminate upon their own terms.

B. No waiver of any provision hereof shall be effective unless in writing signed by the party alleged to have waived such provision. Any single waiver shall not operate to waive subsequent or other defaults.

10. Dispute Resolution. A. Any controversy or claim arising from or related to this Agreement or the breach thereof shall be settled by final and binding arbitration by a single arbitrator in an arbitration administered by the American Arbitration Association in Passaic County, New Jersey, in accordance with the Expedited Procedures of its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

B. Consultant and GAF hereby consent and submit to the exclusive jurisdiction of the Federal and state courts located in the State of New Jersey with regard to any and all disputes arising from or related to Condition 1.A. of these General Conditions. Consultant and GAF waive any objection to personal jurisdiction in New Jersey and any objection that those courts are inconvenient forums to hear such disputes. Each of Consultant and GAF hereby consent and agree that service of process by the other party shall be deemed validly and properly effected against them upon the mailing of a copy of such process by certified mail, postage prepaid, to them at their addresses as provided in Condition 6 hereof.

11. Assignment. Consultant shall not assign or transfer this Agreement, either in whole or in part and shall not delegate or subcontract any of the consulting services to be provided hereunder, whether by operation of law or otherwise. Any such purported transfer or assignment of rights or delegation of duties hereunder shall be of no force or effect.

12. Governing Law. The validity, interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of New Jersey without giving effect to its conflict of laws provisions.

13. Captions. The captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement.

14. Insurance. Consultant represents, warrants and covenants that Consultant presently maintains, and shall during the term hereof continue to maintain, personal liability insurance with and automobile liability insurance with , or with other insurers whose names are first provided by Consultant to GAF in writing.

EX-21 6 a2191887zex-21.htm EXHIBIT 21
QuickLinks -- Click here to rapidly navigate through this document

Exhibit 21

BUILDING MATERIALS CORPORATION OF AMERICA
LIST OF SUBSIDIARIES

COMPANY						STATE OF INCORPORATION	FEIN#

Building Materials Corporation of America						Delaware	22-3276290
	BMCA Acquisition Inc.					Delaware	20-8048827
		Elkcorp				Delaware	20-8186490
			Elk Premium Building Products, Inc.			Delaware	75-2302370
				Elk Corporation of Texas		Nevada	74-1925368
				Elk Corporation of Alabama		Delaware	75-1509396
				Elk Corporation of Arkansas		Arkansas	71-0327819
				Elk Corporation of America		Nevada	75-1613722
				Elk Slate Products, Inc.		Delaware	20-5548796
				Elk Performance Nonwoven Fabrics, Inc.		Delaware	32-0029409
				Elk Composite Building Products, Inc.		Delaware	11-3657388
				Elk VersaShield Building Solutions, Inc.		Delaware	20-5153676
				RGM Products, Inc.		California	77-0336567
					Ridgemate Manufacturing Company, Inc.	California	77-0471727
			Elk Technology Group, Inc.			Delaware	32-0029403
				Chromium Corporation		Delaware	75-2838549
				Lufkin Path Forward, Inc.		Texas	20-2498081
				Elk Technologies, Inc.		Delaware	32-0029407
				Midland Path Forward, Inc.		Nevada	75-2072853
			Elk Group, Inc.			Nevada	75-2302368
				Elk Group, LP(1)		Texas	75-2734675
BMCA Gainesville LLC						Delaware	20-4921692
BMCA Quakertown Inc.						Delaware	20-0837505
BMCA Insulation Products Inc.						Delaware	22-3275477
Building Materials Investment Corporation						Delaware	20-5980312
Building Materials Manufacturing Corporation						Delaware	22-3626208
		HBP Acquisition LLC				Delaware	20-3531649
		BMCA Fresno LLC				Delaware	20-8948045
GAF Leatherback Corp.						Delaware	22-3497242
GAF Materials Corporation (Canada)						Delaware	22-3563280
GAF Premium Products Inc.						Delaware	22-3383680
		Wind Gap Real Property Acquisition Corp				Delaware	22-3383681
GAF Real Properties, Inc.						Delaware	22-2886550
GAFTECH Corporation						Delaware	22-2811609
LL Building Products Inc.						Delaware	58-2394554
Pequannock Valley Claim Service Company, Inc.						Delaware	22-2911715
South Ponca Realty Corp.						Delaware	22-3063731

(1): Elk Group, Inc. 1% General Partner and Elkcorp 99% Limited Partner.

QuickLinks

Exhibit 21

BUILDING MATERIALS CORPORATION OF AMERICA LIST OF SUBSIDIARIES
EX-31.1 7 a2191887zex-31_1.htm EXHIBIT 31.1
QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.1

Certification of Chief Executive Officer

I, Robert B. Tafaro, certify that:

1.

I have reviewed this annual report on Form 10-K of Building Materials Corporation of America;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-(f)) for the registrant and have:

a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b): Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 30, 2009


/s/ ROBERT B. TAFARO Name: Robert B. Tafaro Title: Chief Executive Officer and President

QuickLinks

Exhibit 31.1

Certification of Chief Executive Officer
EX-31.2 8 a2191887zex-31_2.htm EXHIBIT 31.2
QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.2

Certification of Chief Financial Officer

I, John F. Rebele, certify that:

1.

I have reviewed this annual report on Form 10-K of Building Materials Corporation of America;

2.

3.

4.

a): Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b): Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c): Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d): Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

a): All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b): Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 30, 2009


/s/ JOHN F. REBELE
Name:		John F. Rebele
Title:		Senior Vice President, Chief Financial Officer and Chief Administrative Officer

QuickLinks

Exhibit 31.2

Certification of Chief Financial Officer
EX-32.1 9 a2191887zex-32_1.htm EXHIBIT 32.1
QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.1

Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Building Materials Corporation of America (the "Company") for the fiscal year ended December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Robert B. Tafaro, as Chief Executive Officer and President of the Company, and John F. Rebele, as Senior Vice President, Chief Financial Officer and Chief Administrative Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge and belief:

(1): The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2): The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ ROBERT B. TAFARO
Name:		Robert B. Tafaro
Title:		Chief Executive Officer and President
Date: March 30, 2009
/s/ JOHN F. REBELE
Name:		John F. Rebele
Title:		Senior Vice President, Chief Financial Officer and Chief Administrative Officer
Date: March 30, 2009

QuickLinks

Exhibit 32.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
-----END PRIVACY-ENHANCED MESSAGE-----