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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Usg Corp. | NYSE:USG | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 43.48 | 0.00 | 01:00:00 |
þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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USG CORPORATION
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Delaware
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36-3329400
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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550 West Adams Street, Chicago, Illinois
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60661-3676
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(Address of principal executive offices)
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(Zip code)
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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(millions, except per-share and share data)
|
|
Three months ended March 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net sales
|
|
$
|
767
|
|
|
$
|
747
|
|
Cost of products sold
|
|
603
|
|
|
566
|
|
||
Gross profit
|
|
164
|
|
|
181
|
|
||
Selling and administrative expenses
|
|
73
|
|
|
68
|
|
||
Recovery of receivable
|
|
—
|
|
|
(3
|
)
|
||
Operating profit
|
|
91
|
|
|
116
|
|
||
Income from equity method investments
|
|
13
|
|
|
7
|
|
||
Interest expense
|
|
(20
|
)
|
|
(40
|
)
|
||
Interest income
|
|
1
|
|
|
2
|
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
(2
|
)
|
||
Other (expense) income, net
|
|
(1
|
)
|
|
3
|
|
||
Income from continuing operations before income taxes
|
|
84
|
|
|
86
|
|
||
Income tax expense
|
|
(29
|
)
|
|
(26
|
)
|
||
Income from continuing operations
|
|
55
|
|
|
60
|
|
||
Income from discontinued operations, net of tax
|
|
—
|
|
|
7
|
|
||
Net income
|
|
$
|
55
|
|
|
$
|
67
|
|
|
|
|
|
|
||||
Earnings per average common share - basic:
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
0.38
|
|
|
$
|
0.41
|
|
Income from discontinued operations
|
|
—
|
|
|
0.05
|
|
||
Net income
|
|
$
|
0.38
|
|
|
$
|
0.46
|
|
|
|
|
|
|
||||
Earnings per average common share - diluted:
|
|
|
|
|
||||
Income from continuing operations
|
|
$
|
0.37
|
|
|
$
|
0.41
|
|
Income from discontinued operations
|
|
—
|
|
|
0.05
|
|
||
Net income
|
|
$
|
0.37
|
|
|
$
|
0.46
|
|
|
|
|
|
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||||
Average common shares
|
|
146,309,994
|
|
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145,819,026
|
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||
Dilutive awards under long-term incentive plan
|
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2,420,360
|
|
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1,167,366
|
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Average diluted common shares
|
|
148,730,354
|
|
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146,986,392
|
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|
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Three months ended March 31,
|
||||||
(millions)
|
|
|||||||
|
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2017
|
|
2016
|
||||
Net income
|
|
$
|
55
|
|
|
$
|
67
|
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
||||
Loss on derivatives qualifying as cash flow hedges, net of tax benefit of $3 and $3, respectively
|
|
(6
|
)
|
|
(8
|
)
|
||
Less: Reclassification adjustment for loss on derivatives included in net income, net of tax benefit of $0 and $1, respectively
|
|
—
|
|
|
(2
|
)
|
||
Net derivatives qualifying as cash flow hedges
|
|
(6
|
)
|
|
(6
|
)
|
||
|
|
|
|
|
||||
Pension and postretirement benefits:
|
|
|
|
|
||||
Changes in pension and postretirement benefits, net of tax benefit of $0 and $1, respectively
|
|
(1
|
)
|
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(3
|
)
|
||
Less: Amortization of prior service cost included in net periodic pension cost, net of tax benefit of $0 in both periods
|
|
—
|
|
|
—
|
|
||
Net pension and postretirement benefits
|
|
(1
|
)
|
|
(3
|
)
|
||
|
|
|
|
|
||||
Foreign currency translation:
|
|
|
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|
||||
Changes in foreign currency translation, net of tax benefit of $0 in both periods
|
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40
|
|
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24
|
|
||
|
|
|
|
|
||||
Other comprehensive income, net of tax
|
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$
|
33
|
|
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$
|
15
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|
|
|
|
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|
||||
Comprehensive income
|
|
$
|
88
|
|
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$
|
82
|
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(millions, except share data)
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March 31, 2017
|
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December 31, 2016
|
||||
Assets
|
|
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|
||||
Cash and cash equivalents
|
$
|
341
|
|
|
$
|
427
|
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Short-term marketable securities
|
69
|
|
|
62
|
|
||
Receivables (net of reserves 2017 - $8 and 2016 - $8)
|
264
|
|
|
183
|
|
||
Inventories
|
243
|
|
|
236
|
|
||
Income taxes receivable
|
1
|
|
|
1
|
|
||
Other current assets
|
35
|
|
|
40
|
|
||
Total current assets
|
953
|
|
|
949
|
|
||
Long-term marketable securities
|
24
|
|
|
29
|
|
||
Property, plant and equipment (net of accumulated depreciation and depletion - 2017 - $1,995 and 2016 - $1,960)
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1,715
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1,707
|
|
||
Deferred income taxes
|
493
|
|
|
492
|
|
||
Equity method investments
|
665
|
|
|
628
|
|
||
Other assets
|
62
|
|
|
64
|
|
||
Total assets
|
$
|
3,912
|
|
|
$
|
3,869
|
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Liabilities and Stockholders’ Equity
|
|
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|
||||
Accounts payable
|
$
|
233
|
|
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$
|
237
|
|
Accrued expenses
|
126
|
|
|
175
|
|
||
Current portion of long-term debt
|
500
|
|
|
—
|
|
||
Income taxes payable
|
10
|
|
|
10
|
|
||
Total current liabilities
|
869
|
|
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422
|
|
||
Long-term debt
|
584
|
|
|
1,083
|
|
||
Deferred income taxes
|
4
|
|
|
4
|
|
||
Pension and other postretirement benefits
|
292
|
|
|
290
|
|
||
Other liabilities
|
187
|
|
|
184
|
|
||
Total liabilities
|
1,936
|
|
|
1,983
|
|
||
Preferred stock – $1 par value, authorized 36,000,000 shares; outstanding - none
|
—
|
|
|
—
|
|
||
Common stock – $0.10 par value; authorized 200,000,000 shares; issued: 2017 - 146,513,000 shares and 2016 - 146,167,000 shares
|
15
|
|
|
15
|
|
||
Treasury stock at cost – 2017- 721,000 shares and 2016 - 0 shares
|
(24
|
)
|
|
—
|
|
||
Additional paid-in capital
|
3,039
|
|
|
3,038
|
|
||
Accumulated other comprehensive loss
|
(352
|
)
|
|
(385
|
)
|
||
Retained earnings (accumulated deficit)
|
(702
|
)
|
|
(782
|
)
|
||
Total stockholders’ equity
|
1,976
|
|
|
1,886
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,912
|
|
|
$
|
3,869
|
|
(millions)
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
55
|
|
|
$
|
67
|
|
Less: income from discontinued operations
|
—
|
|
|
7
|
|
||
Income from continuing operations
|
55
|
|
|
60
|
|
||
|
|
|
|
||||
Adjustments to reconcile net income from continuing operations to net cash:
|
|
|
|
||||
Depreciation, depletion and amortization
|
33
|
|
|
34
|
|
||
Loss on extinguishment of debt
|
—
|
|
|
2
|
|
||
Recovery of receivable
|
—
|
|
|
(3
|
)
|
||
Share-based compensation expense
|
4
|
|
|
4
|
|
||
Deferred income taxes
|
29
|
|
|
25
|
|
||
Income from equity method investments
|
(13
|
)
|
|
(7
|
)
|
||
Pension settlement
|
—
|
|
|
2
|
|
||
Change in operating assets and liabilities
|
(138
|
)
|
|
(158
|
)
|
||
Other, net
|
1
|
|
|
(5
|
)
|
||
Net cash used for operating activities of continuing operations
|
(29
|
)
|
|
(46
|
)
|
||
Net cash (used for) provided by operating activities of discontinued operations
|
(1
|
)
|
|
16
|
|
||
Net cash used for operating activities
|
$
|
(30
|
)
|
|
$
|
(30
|
)
|
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Purchases of marketable securities
|
(24
|
)
|
|
(79
|
)
|
||
Sales or maturities of marketable securities
|
22
|
|
|
84
|
|
||
Capital expenditures
|
(39
|
)
|
|
(14
|
)
|
||
Return of restricted cash
|
—
|
|
|
9
|
|
||
Net cash used for investing activities of continuing operations
|
(41
|
)
|
|
—
|
|
||
Net cash provided by (used for) investing activities of discontinued operations
|
6
|
|
|
(1
|
)
|
||
Net cash used for investing activities
|
$
|
(35
|
)
|
|
$
|
(1
|
)
|
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Repayment of debt
|
—
|
|
|
(64
|
)
|
||
Issuance of common stock
|
3
|
|
|
—
|
|
||
Repurchase of common stock
|
(25
|
)
|
|
—
|
|
||
Repurchases of common stock to satisfy employee tax withholding obligations
|
(3
|
)
|
|
(1
|
)
|
||
Net cash used for financing activities of continuing operations
|
$
|
(25
|
)
|
|
$
|
(65
|
)
|
|
|
|
|
||||
Effect of exchange rate changes on cash from continuing operations
|
4
|
|
|
1
|
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents from continuing operations
|
$
|
(91
|
)
|
|
$
|
(110
|
)
|
Net increase in cash and cash equivalents from discontinued operations
|
5
|
|
|
15
|
|
||
Net decrease in cash and cash equivalents
|
(86
|
)
|
|
(95
|
)
|
||
Cash and cash equivalents at beginning of period
|
427
|
|
|
442
|
|
||
Cash and cash equivalents at end of period
|
$
|
341
|
|
|
$
|
347
|
|
|
|
|
|
||||
Supplemental Cash Flow Disclosures
:
|
|
|
|
||||
Interest paid, net of capitalized interest
|
$
|
35
|
|
|
$
|
47
|
|
Income taxes paid, net of refunds received
|
2
|
|
|
3
|
|
||
|
|
|
|
||||
Noncash Investing and Financing Activities:
|
|
|
|
||||
Amount in accounts payable for capital expenditures
|
9
|
|
|
3
|
|
1
.
|
Organization, Consolidation and Presentation of Financial Statements
|
(millions)
|
Three months ended March 31, 2017
|
|
Year ended December 31, 2016
|
||||||||||||
|
After Adoption
|
|
As Reported
|
|
After Adoption
|
|
As Reported
|
||||||||
Gross profit
|
$
|
158
|
|
|
$
|
164
|
|
|
$
|
700
|
|
|
$
|
705
|
|
Operating profit
|
84
|
|
|
91
|
|
|
396
|
|
|
394
|
|
||||
Other net periodic postretirement (benefit) costs
|
(7
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Net income
|
55
|
|
|
55
|
|
|
510
|
|
|
510
|
|
(millions)
|
|
Three months ended March 31,
|
||
|
|
2016
|
||
Net sales
|
|
$
|
357
|
|
Cost of products sold
|
|
343
|
|
|
Gross profit
|
|
14
|
|
|
Selling and administrative expenses
|
|
3
|
|
|
Operating profit
|
|
11
|
|
|
Income tax expense
|
|
(4
|
)
|
|
Income from discontinued operations
|
|
$
|
7
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||
(dollars in millions)
|
|
Carrying Value
|
|
Ownership Percentage
|
|
Carrying Value
|
|
Ownership Percentage
|
||||
USG Boral Building Products
|
|
$
|
658
|
|
|
50%
|
|
$
|
621
|
|
|
50%
|
Other equity method investments
|
|
7
|
|
|
33% - 50%
|
|
7
|
|
|
33% - 50%
|
||
Total equity method investments
|
|
$
|
665
|
|
|
|
|
$
|
628
|
|
|
|
|
|
Three months ended March 31,
|
||||||
(millions)
|
|
2017
|
|
2016
|
||||
Translation gain
|
|
$
|
24
|
|
|
$
|
17
|
|
|
|
Three months ended March 31,
|
||||||
(millions)
|
|
2017
|
|
2016
|
||||
USG Boral Building Products:
|
|
|
|
|
||||
Net sales
|
|
$
|
276
|
|
|
$
|
229
|
|
Gross profit
|
|
86
|
|
|
65
|
|
||
Operating profit
|
|
35
|
|
|
23
|
|
||
Income from continuing operations before income taxes
|
|
38
|
|
|
24
|
|
||
Net income
|
|
26
|
|
|
15
|
|
||
Net income attributable to USG Boral Building Products
|
|
25
|
|
|
14
|
|
||
USG share of income from investment accounted for using the equity method
|
|
13
|
|
|
7
|
|
|
|
Three months ended March 31,
|
||||||
(millions)
|
|
2017
|
|
2016
|
||||
Net Sales
:
|
|
|
|
|
||||
Gypsum
|
|
$
|
649
|
|
|
$
|
628
|
|
Ceilings
|
|
120
|
|
|
121
|
|
||
Eliminations
|
|
(2
|
)
|
|
(2
|
)
|
||
Total
|
|
$
|
767
|
|
|
$
|
747
|
|
|
|
|
|
|
||||
Operating Profit (Loss)
:
|
|
|
|
|
||||
Gypsum
|
|
$
|
91
|
|
|
$
|
109
|
|
Ceilings
|
|
23
|
|
|
28
|
|
||
Corporate
|
|
(23
|
)
|
|
(21
|
)
|
||
Total
|
|
$
|
91
|
|
|
$
|
116
|
|
5
.
|
Marketable Securities
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||||||||||
(millions)
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
Corporate debt securities
|
$
|
65
|
|
|
$
|
65
|
|
|
$
|
69
|
|
|
$
|
69
|
|
U.S. government and agency debt securities
|
14
|
|
|
14
|
|
|
14
|
|
|
14
|
|
||||
Non-U.S. government debt securities
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Asset-backed debt securities
|
6
|
|
|
6
|
|
|
2
|
|
|
2
|
|
||||
Certificates of deposit
|
7
|
|
|
7
|
|
|
6
|
|
|
6
|
|
||||
Total marketable securities
|
$
|
93
|
|
|
$
|
93
|
|
|
$
|
91
|
|
|
$
|
91
|
|
(millions)
|
Amortized
Cost
|
|
Fair
Value
|
||||
Due in 1 year or less
|
$
|
69
|
|
|
$
|
69
|
|
Due in 1-5 years
|
24
|
|
|
24
|
|
||
Total marketable securities
|
$
|
93
|
|
|
$
|
93
|
|
|
|
|
|
|
|
|
|
(millions)
|
March 31,
2017 |
|
December 31,
2016 |
||||
5.5% senior notes due 2025
|
$
|
350
|
|
|
$
|
350
|
|
7.75% senior notes due 2018
|
500
|
|
|
500
|
|
||
Industrial revenue bonds (due 2028 through 2034)
|
239
|
|
|
239
|
|
||
Total
|
$
|
1,089
|
|
|
$
|
1,089
|
|
Less: Unamortized debt issuance costs
|
5
|
|
|
6
|
|
||
Total
|
$
|
1,084
|
|
|
$
|
1,083
|
|
(millions)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Fair value of debt
|
$
|
1,128
|
|
|
$
|
1,129
|
|
Accrued interest
|
14
|
|
|
31
|
|
7
.
|
Derivative Instruments
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Amount of Gain or (Loss)
Recognized in
Other Comprehensive Income on Derivatives (Effective Portion)
|
|
Location of Gain or (Loss)
Reclassified from
AOCI into Income
(Effective Portion)
|
|
Amount of Gain or (Loss) Reclassified from
AOCI into Income
(Effective Portion)
|
||||||||||||
(millions)
|
2017
|
|
2016
|
|
|
|
2017
|
|
2016
|
||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
$
|
(9
|
)
|
|
$
|
(5
|
)
|
|
Cost of products sold
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
Foreign exchange contracts
|
—
|
|
|
(6
|
)
|
|
Cost of products sold
|
|
—
|
|
|
2
|
|
||||
Total
|
$
|
(9
|
)
|
|
$
|
(11
|
)
|
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
|
|
|
|
|
|
||||
|
|
Location of Gain or (Loss)
Recognized in Income
on Derivatives
|
|
Amount of Gain or (Loss) Recognized in Income
on Derivatives
|
||||||
(millions)
|
|
|
|
2017
|
|
2016
|
||||
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
||||
Commodity contracts
|
|
Cost of products sold
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Total
|
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Balance Sheet
Location
|
Fair Value
|
|
Balance Sheet
Location
|
Fair Value
|
||||||||||||
|
|
||||||||||||||||
(millions)
|
|
3/31/17
|
|
12/31/16
|
|
|
3/31/17
|
|
12/31/16
|
||||||||
Derivatives in Cash Flow Hedging Relationships
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Other current assets
|
$
|
4
|
|
|
$
|
8
|
|
|
Accrued expenses
|
$
|
4
|
|
|
$
|
4
|
|
Commodity contracts
|
Other assets
|
1
|
|
|
3
|
|
|
Other liabilities
|
8
|
|
|
5
|
|
||||
Foreign exchange contracts
|
Other current assets
|
1
|
|
|
1
|
|
|
Accrued expenses
|
1
|
|
|
1
|
|
||||
Total derivatives in cash flow hedging relationships
|
|
$
|
6
|
|
|
$
|
12
|
|
|
|
$
|
13
|
|
|
$
|
10
|
|
Derivatives Not Designated as Hedging Instruments
|
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts
|
Other current assets
|
$
|
—
|
|
|
$
|
1
|
|
|
Accrued expenses
|
$
|
—
|
|
|
$
|
—
|
|
Total derivatives not designated as hedging instruments
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total derivatives
|
Total assets
|
$
|
6
|
|
|
$
|
13
|
|
|
Total liabilities
|
$
|
13
|
|
|
$
|
10
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
||||||||||||||||||||||||
(millions)
|
3/31/17
|
|
12/31/16
|
|
3/31/17
|
|
12/31/16
|
|
3/31/17
|
|
12/31/16
|
|
3/31/17
|
|
12/31/16
|
||||||||||||||||
Cash equivalents
|
$
|
37
|
|
|
$
|
38
|
|
|
$
|
32
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69
|
|
|
$
|
72
|
|
Equity mutual funds
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||||
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt securities
|
—
|
|
|
—
|
|
|
65
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
69
|
|
||||||||
U.S. government and agency debt securities
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
||||||||
Non-U.S. government debt securities
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Asset-backed debt securities
|
—
|
|
|
—
|
|
|
6
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
2
|
|
||||||||
Certificates of deposit
|
—
|
|
|
—
|
|
|
7
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
6
|
|
||||||||
Derivative assets
|
—
|
|
|
—
|
|
|
6
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
13
|
|
||||||||
Derivative liabilities
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(10
|
)
|
|
Three months ended March 31,
|
||||||
(millions)
|
2017
|
|
2016
|
||||
Pension:
|
|
|
|
||||
Service cost of benefits earned
|
$
|
10
|
|
|
$
|
11
|
|
Interest cost on projected benefit obligation
|
16
|
|
|
17
|
|
||
Expected return on plan assets
|
(23
|
)
|
|
(22
|
)
|
||
Settlement
|
—
|
|
|
2
|
|
||
Net amortization
|
5
|
|
|
5
|
|
||
Net pension cost
(a)
|
$
|
8
|
|
|
$
|
13
|
|
Postretirement:
|
|
|
|
||||
Service cost of benefits earned
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost on projected benefit obligation
|
1
|
|
|
1
|
|
||
Net amortization
|
(6
|
)
|
|
(7
|
)
|
||
Net postretirement benefit
(b)
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
(a)
|
Net pension cost, excluding settlement costs, includes expenses allocated to income from discontinued operations for L&W totaling
$2 million
for the three months ended March 31, 2016.
|
(b)
|
Net postretirement benefit includes a net benefit allocated to income from discontinued operations for L&W totaling
$1 million
for the three months ended March 31, 2016.
|
|
MSUs
|
|
Performance Shares
|
|
RSUs
|
||||||
Awards granted
|
371,346
|
|
|
112,732
|
|
|
49,000
|
|
|||
Weighted average fair value
(a)
|
$
|
35.79
|
|
|
$
|
39.42
|
|
|
$
|
31.36
|
|
Expected volatility
(b)
|
32.10
|
%
|
|
32.10
|
%
|
|
N/A
|
|
|||
Risk-free rate
(c)
|
1.39
|
%
|
|
1.39
|
%
|
|
N/A
|
|
|||
Expected term (in years)
(d)
|
2.96
|
|
|
2.96
|
|
|
N/A
|
|
|||
Expected dividends
|
—
|
|
|
—
|
|
|
N/A
|
|
(a)
|
Fair value of MSUs and Performance Shares is estimated on the date of grant using the Monte Carlo simulation that used the assumptions outlined above. Fair value of RSUs is equal to the closing price of our common stock on the date of grant.
|
(b)
|
The expected volatility rate was based on stock price history immediately prior to grant for a period commensurate with the expected term.
|
(c)
|
The risk-free rate was based on zero coupon U.S. government issues at the time of grant.
|
(d)
|
The expected term represents the period from the valuation date to the end of the performance period.
|
|
MSUs
|
Performance Shares
|
RSUs
|
Maximum shares/units earned
|
Varies from 0% to 150% of the number of MSUs awarded depending on the actual performance of our stock price
|
Varies from 0% to 200% of the number of performance shares awarded depending on the performance of our total stockholder return relative to the performance of the Dow Jones U.S. Construction and Materials Index
(a)
|
100%
|
Vesting Provisions
|
Three-year performance period
|
Three-year performance period
|
Specified number of years from the grant date
|
Vesting in the case of termination of employment due to death, disability, retirement or change in control during performance period
(b)
|
Pro-rated based on the number of full months employed in 2017 with awards issued at the end of the three-year period
|
Pro-rated based on the number of full months employed during the performance period with awards issued at the end of the three-year period
|
Varies.
|
Settlement
|
Settled in common stock at the end of the performance or vesting period
|
||
|
|
|
|
(a)
|
Adjustments to the performance of the Dow Jones U.S. Construction and Materials Index may be made in certain circumstances.
|
(b)
|
Early vesting for MSUs, performance shares and RSUs in situations where there is a change in control also requires a related loss of employment or diminution of duties.
|
|
|
Three months ended March 31,
|
||||
(millions, common shares)
|
|
2017
|
|
2016
|
||
MSUs, performance shares, RSUs and stock options
|
|
1.0
|
|
|
1.7
|
|
Deferred shares associated with a deferred compensation program for non-employee directors
|
|
—
|
|
|
0.2
|
|
(millions)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Finished goods
|
$
|
134
|
|
|
$
|
132
|
|
Work in progress
|
38
|
|
|
37
|
|
||
Raw materials
|
71
|
|
|
67
|
|
||
Total
|
$
|
243
|
|
|
$
|
236
|
|
|
Three months ended March 31,
|
||||||
(millions)
|
2017
|
|
2016
|
||||
Balance as of January 1
|
$
|
113
|
|
|
$
|
119
|
|
Accretion expense
|
1
|
|
|
2
|
|
||
Foreign currency translation
|
—
|
|
|
1
|
|
||
Balance as of March 31
|
$
|
114
|
|
|
$
|
122
|
|
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||
(millions, except share data)
|
Treasury Shares (000)
|
|
Treasury Stock
|
|
Treasury Shares (000)
|
|
Treasury Stock
|
||||||
Balance as of January 1
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Stock issuances
|
150
|
|
|
4
|
|
|
67
|
|
|
1
|
|
||
Repurchase of common stock for tax withholdings related to stock based compensation
|
(107
|
)
|
|
(3
|
)
|
|
(70
|
)
|
|
(1
|
)
|
||
Repurchase of common stock under share repurchase program
|
(764
|
)
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
||
Balance as of March 31
|
(721
|
)
|
|
$
|
(24
|
)
|
|
(3
|
)
|
|
$
|
—
|
|
|
Derivatives
|
|
Defined Benefit Plans
|
|
Foreign
Currency Translation
|
|
AOCI
|
||||||||||||||||||||||||
(millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||
Balance as of January 1
|
$
|
27
|
|
|
$
|
20
|
|
|
$
|
(246
|
)
|
|
$
|
(221
|
)
|
|
$
|
(166
|
)
|
|
$
|
(113
|
)
|
|
$
|
(385
|
)
|
|
$
|
(314
|
)
|
Other comprehensive income (loss) before reclassifications, net of tax
|
(6
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
40
|
|
|
24
|
|
|
33
|
|
|
13
|
|
||||||||
Less: Amounts reclassified from AOCI, net of tax
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||||
Net other comprehensive income (loss)
|
(6
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
40
|
|
|
24
|
|
|
33
|
|
|
15
|
|
||||||||
Balance as of March 31
|
$
|
21
|
|
|
$
|
14
|
|
|
$
|
(247
|
)
|
|
$
|
(224
|
)
|
|
$
|
(126
|
)
|
|
$
|
(89
|
)
|
|
$
|
(352
|
)
|
|
$
|
(299
|
)
|
|
|
Three months ended March 31,
|
||||||
(millions)
|
|
2017
|
|
2016
|
||||
Derivatives
|
|
|
|
|
||||
Net reclassification from AOCI for cash flow hedges included in cost of products sold
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
Less: Income tax benefit on reclassification from AOCI included in income tax (expense) benefit
|
|
—
|
|
|
(1
|
)
|
||
Net amount reclassified from AOCI
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
||||
Defined Benefit Plans
|
|
|
|
|
||||
Net reclassification from AOCI for amortization of prior service benefit included in cost of products sold
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Net reclassification from AOCI for amortization of prior service cost included in selling and administrative expenses
|
|
—
|
|
|
2
|
|
||
Less: Income tax benefit on reclassification from AOCI included in income tax (expense) benefit
|
|
—
|
|
|
—
|
|
||
Net amount reclassified from AOCI
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
residential and nonresidential repair and remodel activity accounted for approximately
52%
of our net sales,
|
•
|
new residential construction accounted for approximately
31%
of our net sales,
|
•
|
new nonresidential construction accounted for approximately
14%
of our net sales, and
|
•
|
other activities accounted for approximately
3%
of our net sales.
|
Wallboard
|
Sheetrock
®
brand gypsum wallboard and Securock
®
brand glass mat sheathing portfolios
|
Surfaces
|
Sheetrock
®
brand joint compound portfolio, as well as corner bead, joint tape and plaster
|
Substrates
|
Durock
®
brand cement board, Fiberock
®
brand backerboard, Levelrock
®
brand systems of poured gypsum flooring, Securock
®
brand roof board, ExoAir
®
430 brand air-water barrier system, industrial gypsum, and construction plaster products, sold under the brand names Red Top
®
, Imperial
®
, Diamond
®
and Supremo
®
|
(dollars in millions, except per-share data)
|
2017
|
|
2016
|
|
$ Favorable (Unfavorable)
|
|
% Favorable (Unfavorable)
|
|||||||
Three months ended March 31:
|
|
|
|
|
|
|
|
|||||||
Net sales
|
$
|
767
|
|
|
$
|
747
|
|
|
$
|
20
|
|
|
3
|
%
|
Cost of products sold
|
603
|
|
|
566
|
|
|
(37
|
)
|
|
(7
|
%)
|
|||
Gross profit
|
164
|
|
|
181
|
|
|
(17
|
)
|
|
(9
|
)%
|
|||
Selling and administrative expenses
|
73
|
|
|
68
|
|
|
(5
|
)
|
|
(7
|
)%
|
|||
Recovery of receivable
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|
(100
|
)%
|
|||
Operating profit
|
91
|
|
|
116
|
|
|
(25
|
)
|
|
(22
|
)%
|
|||
Income from equity method investments
|
13
|
|
|
7
|
|
|
6
|
|
|
86
|
%
|
|||
Interest expense
|
(20
|
)
|
|
(40
|
)
|
|
20
|
|
|
50
|
%
|
|||
Interest income
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
50
|
%
|
|||
Loss on extinguishment of debt
|
—
|
|
|
(2
|
)
|
|
2
|
|
|
100
|
%
|
|||
Other (expense) income, net
|
(1
|
)
|
|
3
|
|
|
(4
|
)
|
|
*
|
|
|||
Income before continuing operations before income taxes
|
84
|
|
|
86
|
|
|
(2
|
)
|
|
(2
|
%)
|
|||
Income tax expense
|
(29
|
)
|
|
(26
|
)
|
|
(3
|
)
|
|
(12
|
)%
|
|||
Income from continuing operations
|
$
|
55
|
|
|
$
|
60
|
|
|
(5
|
)
|
|
(8
|
%)
|
|
Income from discontinued operations, net of tax
|
$
|
—
|
|
|
$
|
7
|
|
|
(7
|
)
|
|
(100
|
%)
|
|
Net income
|
$
|
55
|
|
|
$
|
67
|
|
|
$
|
(12
|
)
|
|
(18
|
%)
|
Diluted earnings per share - net income
|
$
|
0.37
|
|
|
$
|
0.46
|
|
|
$
|
(0.09
|
)
|
|
(20
|
%)
|
|
|
|
|
|
|
|
|
|||||||
*not meaningful
|
|
|
|
|
|
|
|
|
Three months ended March 31:
|
|||||||||||||
|
|
|
|
|
Favorable (Unfavorable)
|
|||||||||
(millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Net sales
|
|
|
|
|
|
|
|
|||||||
United States
|
$
|
555
|
|
|
$
|
536
|
|
|
$
|
19
|
|
|
4
|
%
|
Canada
|
83
|
|
|
82
|
|
|
1
|
|
|
1
|
%
|
|||
Mexico / Latin America
|
49
|
|
|
44
|
|
|
5
|
|
|
11
|
%
|
|||
Canadian Mining
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Eliminations
|
(38
|
)
|
|
(34
|
)
|
|
(4
|
)
|
|
(12
|
)%
|
|||
Total
|
$
|
649
|
|
|
$
|
628
|
|
|
$
|
21
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating profit (loss)
|
|
|
|
|
|
|
|
|||||||
United States
|
$
|
90
|
|
|
$
|
101
|
|
|
$
|
(11
|
)
|
|
(11
|
)%
|
Canada
|
1
|
|
|
6
|
|
|
(5
|
)
|
|
(83
|
)%
|
|||
Mexico / Latin America
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
(50
|
)%
|
|||
Canadian Mining
|
(1
|
)
|
|
(3
|
)
|
|
2
|
|
|
67
|
%
|
|||
Gypsum Transportation Limited
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
(100
|
)%
|
|||
Total
|
$
|
91
|
|
|
$
|
109
|
|
|
$
|
(18
|
)
|
|
(17
|
)%
|
|
|
|
Volume
|
|
Price
|
||||||||||||
(millions)
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|||||||||
Change to Q1 2017 from Q1 2016
|
|
|
|
|
|
|
|
|
|||||||||
Sheetrock® brand gypsum wallboard
|
$
|
2
|
|
1
|
%
|
|
$
|
(10
|
)
|
(4
|
)%
|
|
$
|
12
|
|
5
|
%
|
Sheetrock
®
brand joint compound
|
5
|
|
5
|
%
|
|
6
|
|
6
|
%
|
|
(1
|
)
|
(1
|
)%
|
|||
Other
|
12
|
|
|
|
|
|
|
|
|
||||||||
Total increase in net sales
|
$
|
19
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
Volume
|
|
Price
|
|
Cost
|
||||||||
(millions)
|
$
|
|
$
|
|
$
|
|
$
|
||||||||
Change to Q1 2017 from Q1 2016
|
|
|
|
|
|
|
|
||||||||
Sheetrock
®
brand gypsum wallboard
|
$
|
(9
|
)
|
|
$
|
(5
|
)
|
|
$
|
12
|
|
|
$
|
(16
|
)
|
Sheetrock
®
brand joint compound
|
(1
|
)
|
|
2
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Other
|
(1
|
)
|
|
|
|
|
|
|
|||||||
Total decrease in operating profit
|
$
|
(11
|
)
|
|
|
|
|
|
|
•
|
increase in gross profit of $2 million recorded on sales by Gypsum to L&W that were included in L&W's inventory at the end of the first quarter of 2016, offset by
|
•
|
higher selling and administrative costs of $3 million in the first quarter of 2017 due primarily to higher compensation and benefit expenses and marketing costs.
|
|
|
Three months ended March 31:
|
|||||||||||||
|
|
|
|
|
|
Favorable (Unfavorable)
|
|||||||||
(millions)
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Net sales
|
|
|
|
|
|
|
|
|
|||||||
United States
|
|
$
|
112
|
|
|
$
|
115
|
|
|
$
|
(3
|
)
|
|
(3
|
)%
|
Canada
|
|
13
|
|
|
13
|
|
|
—
|
|
|
—
|
%
|
|||
Mexico / Latin America
|
|
7
|
|
|
8
|
|
|
(1
|
)
|
|
(13
|
)%
|
|||
Eliminations
|
|
(12
|
)
|
|
(15
|
)
|
|
3
|
|
|
20
|
%
|
|||
Total
|
|
$
|
120
|
|
|
$
|
121
|
|
|
$
|
(1
|
)
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Operating profit
|
|
|
|
|
|
|
|
|
|||||||
United States
|
|
$
|
21
|
|
|
$
|
26
|
|
|
$
|
(5
|
)
|
|
(19
|
)%
|
Canada
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|||
Mexico / Latin America
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
%
|
|||
Total
|
|
$
|
23
|
|
|
$
|
28
|
|
|
$
|
(5
|
)
|
|
(18
|
)%
|
|
|
|
Volume
|
|
Price
|
||||||||||||
(millions)
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|||||||||
Change to Q1 2017 from Q1 2016
|
|
|
|
|
|
|
|
|
|||||||||
Ceiling grid
|
$
|
(2
|
)
|
(7
|
)%
|
|
$
|
(2
|
)
|
(7
|
)%
|
|
$
|
—
|
|
—
|
%
|
Ceiling tile
|
(4
|
)
|
(6
|
)%
|
|
(4
|
)
|
(6
|
)%
|
|
—
|
|
—
|
%
|
|||
Other
|
3
|
|
|
|
|
|
|
|
|
||||||||
Total decrease in net sales
|
$
|
(3
|
)
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
Volume
|
|
Price
|
|
Cost
|
||||||||
(millions)
|
$
|
|
$
|
|
$
|
|
$
|
||||||||
Change to Q1 2017 from Q1 2016
|
|
|
|
|
|
|
|
||||||||
Ceiling grid
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Ceiling tile
|
(4
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Other
|
2
|
|
|
|
|
|
|
|
|||||||
Total decrease in operating profit
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
Three months ended March 31:
|
|||||||||||||
|
|
|
|
|
|
Favorable (Unfavorable)
|
|||||||||
(millions)
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Net sales
|
|
$
|
276
|
|
|
$
|
229
|
|
|
$
|
47
|
|
|
21
|
%
|
Operating profit
|
|
35
|
|
|
23
|
|
|
12
|
|
|
52
|
%
|
|||
Income from equity method investments - UBBP
|
|
13
|
|
|
7
|
|
|
6
|
|
|
86
|
%
|
|
|
S&P
|
|
Moody's
|
|
Fitch
|
Corporate/Family rating
|
|
BB+
|
|
Ba2
|
|
BB+
|
Outlook
|
|
Stable
|
|
Positive
|
|
Stable
|
Guaranteed senior notes
|
|
BB+
|
|
Ba2
|
|
BB+
|
All other notes and bonds
|
|
BB+
|
|
Ba3
|
|
BB+
|
Report date
|
|
November 10, 2016
|
|
November 22, 2016
|
|
April 19, 2017
|
|
Three months ended March 31,
|
||||||
(millions)
|
2017
|
|
2016
|
||||
Net cash provided by (used for):
|
|
|
|
||||
Operating activities from continuing operations
|
$
|
(29
|
)
|
|
$
|
(46
|
)
|
Investing activities from continuing operations
|
(41
|
)
|
|
—
|
|
||
Financing activities from continuing operations
|
(25
|
)
|
|
(65
|
)
|
||
Discontinued operations
|
5
|
|
|
15
|
|
||
Effect of exchange rate changes on cash
|
4
|
|
|
1
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(86
|
)
|
|
$
|
(95
|
)
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Changes in internal control over financial reporting.
|
Issuer Purchases of Equity Securities
|
||||||||||||||
Period
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares repurchased as part of publicly announced plans or programs
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs
(millions)
|
||||||
January 1, 2017 to January 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
250
|
|
February 1, 2017 to February 28, 2017
|
|
162,301
|
|
|
$
|
32.27
|
|
|
162,301
|
|
|
$
|
245
|
|
March 1, 2017 to March 31, 2017
|
|
601,632
|
|
|
$
|
33.43
|
|
|
601,632
|
|
|
$
|
225
|
|
Total
|
|
763,933
|
|
|
|
|
763,933
|
|
|
|
|
|
USG CORPORATION
|
||
|
|
By
|
|
/s/ Jennifer F. Scanlon
|
|
|
|
|
Jennifer F. Scanlon,
|
|
|
|
|
Director, President and Chief Executive Officer
|
|
|
|
|
|
|
|
By
|
|
/s/ Matthew F. Hilzinger
|
|
|
|
|
Matthew F. Hilzinger,
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
By
|
|
/s/ Jeanette A. Press
|
|
|
|
|
Jeanette A. Press,
|
|
|
|
|
Vice President, Controller and Principal Accounting Officer
|
|
|
|
|
|
April 27, 2017
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
Exhibit
|
31.1
|
Rule 13a-14(a) Certifications of USG Corporation’s Chief Executive Officer *
|
|
|
31.2
|
Rule 13a-14(a) Certifications of USG Corporation’s Chief Financial Officer *
|
|
|
32.1
|
Section 1350 Certifications of USG Corporation’s Chief Executive Officer *
|
|
|
32.2
|
Section 1350 Certifications of USG Corporation’s Chief Financial Officer *
|
|
|
95
|
Mine Safety Disclosures *
|
|
|
101
|
The following financial information from USG Corporation’s Quarterly Report on Form 10-Q for the three months ended March 31, 2017, formatted in XBRL (Extensible Business Reporting Language): (1) the condensed consolidated statements of income for the three months ended March 31, 2017 and 2016, (2) the condensed consolidated statements of comprehensive income (loss) for the three months ended March 31, 2017 and 2016, (3) the condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016, (4) the condensed consolidated statements of cash flows for the three months ended March 31, 2017 and 2016 and (5) notes to the condensed consolidated financial statements. *
|
*
|
|
Filed or furnished herewith
|
|
|
|
1 Year U S G Chart |
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