þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
USG CORPORATION |
Delaware | 36-3329400 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
550 West Adams Street, Chicago, Illinois | 60661-3676 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |
Page | ||
Item 1. | Financial Statements (unaudited): | |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(millions, except per-share and share data) | |||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net sales | $ | 916 | $ | 798 | $ | 1,730 | $ | 1,581 | |||||||
Cost of products sold | 765 | 696 | 1,455 | 1,377 | |||||||||||
Gross profit | 151 | 102 | 275 | 204 | |||||||||||
Selling and administrative expenses | 76 | 74 | 149 | 150 | |||||||||||
Restructuring and long-lived asset impairment charges | 1 | — | 3 | 2 | |||||||||||
Operating profit | 74 | 28 | 123 | 52 | |||||||||||
Interest expense | 50 | 52 | 100 | 104 | |||||||||||
Interest income | (1 | ) | (1 | ) | (2 | ) | (2 | ) | |||||||
Loss on extinguishment of debt | — | 41 | — | 41 | |||||||||||
Other income, net | (2 | ) | (2 | ) | (1 | ) | (1 | ) | |||||||
Income (loss) from continuing operations before income taxes | 27 | (62 | ) | 26 | (90 | ) | |||||||||
Income tax expense (benefit) | 2 | (3 | ) | (1 | ) | (2 | ) | ||||||||
Income (loss) from continuing operations | 25 | (59 | ) | 27 | (88 | ) | |||||||||
Income from discontinued operations, net of tax | — | 2 | — | 4 | |||||||||||
Net income (loss) | $ | 25 | $ | (57 | ) | $ | 27 | $ | (84 | ) | |||||
Earnings per common share - basic: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.23 | $ | (0.55 | ) | $ | 0.25 | $ | (0.83 | ) | |||||
Income from discontinued operations | — | 0.02 | — | 0.04 | |||||||||||
Net income (loss) | $ | 0.23 | $ | (0.53 | ) | $ | 0.25 | $ | (0.79 | ) | |||||
Earnings per common share - diluted: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.22 | $ | (0.55 | ) | $ | 0.24 | $ | (0.83 | ) | |||||
Income from discontinued operations | — | 0.02 | — | 0.04 | |||||||||||
Net income (loss) | $ | 0.22 | $ | (0.53 | ) | $ | 0.24 | $ | (0.79 | ) | |||||
Average common shares | 108,544,752 | 106,089,602 | 108,449,431 | 105,839,241 | |||||||||||
Average diluted common shares | 111,047,951 | 106,089,602 | 111,245,400 | 105,839,241 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(millions) | |||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income (loss) | $ | 25 | $ | (57 | ) | $ | 27 | $ | (84 | ) | |||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Derivatives qualifying as cash flow hedges: | |||||||||||||||
Gain (loss) on derivatives qualifying as cash flow hedges, net of tax (benefit) of $1, $(1), $1, and $(2), respectively | (2 | ) | 3 | 2 | (2 | ) | |||||||||
Less: Reclassification adjustment for loss on derivatives included in net income, net of tax (benefit) of $1, $0, $0 and $(1), respectively | — | (2 | ) | — | (5 | ) | |||||||||
Net derivatives qualifying as cash flow hedges | (2 | ) | 5 | 2 | 3 | ||||||||||
Pension and postretirement benefits: | |||||||||||||||
Changes in pension and postretirement benefits, net of tax of $1, $5, $2, and $5, respectively | (15 | ) | 12 | (12 | ) | 10 | |||||||||
Less: Amortization of prior service cost included in net periodic pension cost, net of tax benefit of $(1), $(1), $(1), and $(1) | (3 | ) | 1 | (5 | ) | 1 | |||||||||
Net pension and postretirement benefits | (12 | ) | 11 | (7 | ) | 9 | |||||||||
Foreign currency translation | |||||||||||||||
Changes in foreign currency translation, net of tax of $0 in all periods | (17 | ) | (18 | ) | (17 | ) | 4 | ||||||||
Less: Translation gains realized upon complete liquidation of an investment in a foreign entity, net of tax of $0 in all periods | — | (1 | ) | — | (1 | ) | |||||||||
Net foreign currency translation | (17 | ) | (17 | ) | (17 | ) | 5 | ||||||||
Other comprehensive (loss) income, net of tax | $ | (31 | ) | $ | (1 | ) | $ | (22 | ) | $ | 17 | ||||
Comprehensive (loss) income | $ | (6 | ) | $ | (58 | ) | $ | 5 | $ | (67 | ) |
(millions) | June 30, 2013 | December 31, 2012 | |||||
(Unaudited) | |||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 416 | $ | 546 | |||
Short-term marketable securities | 113 | 106 | |||||
Restricted cash | 1 | 1 | |||||
Receivables (net of reserves — $16 and $16) | 396 | 326 | |||||
Inventories | 323 | 304 | |||||
Income taxes receivable | 2 | 2 | |||||
Deferred income taxes | 2 | 2 | |||||
Other current assets | 48 | 40 | |||||
Total current assets | 1,301 | 1,327 | |||||
Long-term marketable securities | 25 | 25 | |||||
Property, plant and equipment (net of accumulated depreciation and depletion — $1,793 and $1,738) | 2,094 | 2,100 | |||||
Deferred income taxes | 40 | 38 | |||||
Other assets | 227 | 233 | |||||
Total assets | $ | 3,687 | $ | 3,723 | |||
Liabilities and Stockholders’ Equity | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 256 | $ | 286 | |||
Accrued expenses | 206 | 237 | |||||
Current portion of long-term debt | 4 | 4 | |||||
Deferred income taxes | 22 | 22 | |||||
Income taxes payable | 2 | 2 | |||||
Total current liabilities | 490 | 551 | |||||
Long-term debt | 2,018 | 2,016 | |||||
Long-term debt - related party | 290 | 289 | |||||
Deferred income taxes | 5 | 5 | |||||
Pension and other postretirement benefits | 575 | 573 | |||||
Other liabilities | 269 | 270 | |||||
Total liabilities | 3,647 | 3,704 | |||||
Stockholders’ Equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 11 | 11 | |||||
Treasury stock | (1 | ) | — | ||||
Additional paid-in capital | 2,599 | 2,595 | |||||
Accumulated other comprehensive loss | (255 | ) | (233 | ) | |||
Retained earnings (accumulated deficit) | (2,340 | ) | (2,367 | ) | |||
Stockholders’ equity of parent | 14 | 6 | |||||
Noncontrolling interest | 26 | 13 | |||||
Total stockholders’ equity including noncontrolling interest | 40 | 19 | |||||
Total liabilities and stockholders’ equity | $ | 3,687 | $ | 3,723 |
USG CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
(millions) | Six months ended June 30, | ||||||
2013 | 2012 | ||||||
Operating Activities | |||||||
Net income (loss) | $ | 27 | $ | (84 | ) | ||
Less: Income from discontinued operations | — | 4 | |||||
Income (loss) from continuing operations | 27 | (88 | ) | ||||
Adjustments to reconcile income (loss) from continuing operations to net cash: | |||||||
Depreciation, depletion and amortization | 77 | 78 | |||||
Loss on extinguishment of debt | — | 41 | |||||
Long-lived asset impairment charge | — | 1 | |||||
Share-based compensation expense | 9 | 13 | |||||
Deferred income taxes | (1 | ) | 2 | ||||
Noncash income tax benefit | — | (4 | ) | ||||
Gain on asset dispositions | — | (7 | ) | ||||
(Increase) decrease in working capital: | |||||||
Receivables | (63 | ) | (43 | ) | |||
Income taxes receivable | — | 2 | |||||
Inventories | (19 | ) | (1 | ) | |||
Other current assets | (6 | ) | 3 | ||||
Payables | (32 | ) | (6 | ) | |||
Accrued expenses | (31 | ) | (5 | ) | |||
Increase in other assets | 1 | 1 | |||||
Decrease in other liabilities | (16 | ) | (3 | ) | |||
Other, net | 9 | (1 | ) | ||||
Net cash used for operating activities - continuing operations | $ | (45 | ) | $ | (17 | ) | |
Investing Activities | |||||||
Purchases of marketable securities | (111 | ) | (70 | ) | |||
Sales or maturities of marketable securities | 104 | 227 | |||||
Capital expenditures | (46 | ) | (28 | ) | |||
Acquisition of mining rights | (17 | ) | (16 | ) | |||
Net proceeds from asset dispositions | — | 14 | |||||
Investments in joint ventures | (5 | ) | (11 | ) | |||
Loan to joint venture | — | (4 | ) | ||||
Deposit of restricted cash | — | (16 | ) | ||||
Net cash (used for) provided by investing activities - continuing operations | $ | (75 | ) | $ | 96 | ||
Financing Activities | |||||||
Issuance of debt | 3 | 248 | |||||
Repayment of debt | (2 | ) | (280 | ) | |||
Payment of debt issuance fees | — | (5 | ) | ||||
Loans from joint venture partner | 3 | — | |||||
Issuance of common stock | 2 | 1 | |||||
Repurchases of common stock to satisfy employee tax withholding obligations | (9 | ) | (5 | ) | |||
Net cash used for financing activities - continuing operations | $ | (3 | ) | $ | (41 | ) | |
Effect of exchange rate changes on cash | (7 | ) | 2 | ||||
Net (decrease) increase in cash and cash equivalents | $ | (130 | ) | $ | 40 | ||
Cash and cash equivalents at beginning of period | 546 | 365 | |||||
Cash and cash equivalents at end of period | $ | 416 | $ | 405 | |||
Supplemental Cash Flow Disclosures: | |||||||
Interest paid, net of capitalized interest | $ | 96 | $ | 105 | |||
Income taxes paid, net | 3 | — | |||||
Amount in accounts payable for capital expenditures | 5 | 2 |
1. | Organization, Consolidation and Presentation of Financial Statements |
(millions) | Three months ended June 30, 2012 | Six months ended June 30, 2012 | |||||
Sales from discontinued operations | $ | 27 | $ | 56 | |||
Operating profit from discontinued operations | 3 | 6 | |||||
Income from discontinued operations before income taxes | 3 | 6 |
3. | Segments |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Net Sales: | |||||||||||||||
North American Gypsum | $ | 573 | $ | 473 | $ | 1,082 | $ | 959 | |||||||
Worldwide Ceilings | 159 | 150 | 312 | 304 | |||||||||||
Building Products Distribution | 319 | 293 | 600 | 563 | |||||||||||
Eliminations | (135 | ) | (118 | ) | (264 | ) | (245 | ) | |||||||
Total | $ | 916 | $ | 798 | $ | 1,730 | $ | 1,581 | |||||||
Operating Profit (Loss): | |||||||||||||||
North American Gypsum | $ | 67 | $ | 31 | $ | 113 | $ | 63 | |||||||
Worldwide Ceilings | 26 | 19 | 53 | 45 | |||||||||||
Building Products Distribution | 1 | (7 | ) | (1 | ) | (13 | ) | ||||||||
Corporate | (19 | ) | (17 | ) | (37 | ) | (39 | ) | |||||||
Eliminations | (1 | ) | 2 | (5 | ) | (4 | ) | ||||||||
Total | $ | 74 | $ | 28 | $ | 123 | $ | 52 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
North American Gypsum | $ | 1 | $ | 1 | $ | 2 | $ | 3 | |||||||
Worldwide Ceilings | — | 1 | — | 1 | |||||||||||
Building Products Distribution | — | (2 | ) | — | (2 | ) | |||||||||
Corporate | — | — | 1 | — | |||||||||||
Total | $ | 1 | $ | — | $ | 3 | $ | 2 |
4. | Earnings (Loss) Per Share |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(millions, except per-share data) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Income (loss) from continuing operations | $ | 25 | $ | (59 | ) | $ | 27 | $ | (88 | ) | |||||
Income from discontinued operations | — | 2 | — | 4 | |||||||||||
Net income (loss) | $ | 25 | $ | (57 | ) | $ | 27 | $ | (84 | ) | |||||
Average common shares | 108.5 | 106.1 | 108.4 | 105.8 | |||||||||||
Dilutive RSUs, MSUs, performance shares and stock options | 2.3 | — | 2.6 | — | |||||||||||
Deferred shares associated with a deferred compensation program for non-employee directors | 0.2 | — | 0.2 | — | |||||||||||
Average diluted common shares | 111.0 | 106.1 | 111.2 | 105.8 | |||||||||||
Basic earnings (loss) per average common share: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.23 | $ | (0.55 | ) | $ | 0.25 | $ | (0.83 | ) | |||||
Income from discontinued operations | — | 0.02 | — | 0.04 | |||||||||||
Net income (loss) | $ | 0.23 | $ | (0.53 | ) | $ | 0.25 | $ | (0.79 | ) | |||||
Diluted earnings (loss) per average common share: | |||||||||||||||
Income (loss) from continuing operations | $ | 0.22 | $ | (0.55 | ) | $ | 0.24 | $ | (0.83 | ) | |||||
Income from discontinued operations | — | 0.02 | — | 0.04 | |||||||||||
Net income (loss) | $ | 0.22 | $ | (0.53 | ) | $ | 0.24 | $ | (0.79 | ) |
Three months ended June 30, | Six months ended June 30, | ||||||||||
(millions, common shares) | 2013 | 2012 | 2013 | 2012 | |||||||
Stock options, RSUs, MSUs and performance shares | 2.3 | 8.2 | 2.3 | 8.0 |
5. | Marketable Securities |
As of June 30, 2013 | As of December 31, 2012 | ||||||||||||||
(millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Corporate debt securities | $ | 94 | $ | 94 | $ | 82 | $ | 82 | |||||||
U.S. government and agency debt securities | 13 | 13 | 16 | 16 | |||||||||||
Non-U.S. government debt securities | 1 | 1 | 1 | 1 | |||||||||||
Asset-backed debt securities | 7 | 7 | 6 | 6 | |||||||||||
Certificates of deposit | 17 | 17 | 16 | 16 | |||||||||||
Municipal debt securities | 6 | 6 | 10 | 10 | |||||||||||
Total marketable securities | $ | 138 | $ | 138 | $ | 131 | $ | 131 |
(millions) | Amortized Cost | Fair Value | |||||
Due in 1 year or less | $ | 113 | $ | 113 | |||
Due in 1-5 years | 25 | 25 | |||||
Total marketable securities | $ | 138 | $ | 138 |
6. | Intangible Assets |
As of June 30, 2013 | As of December 31, 2012 | ||||||||||||||||||||||
(millions) | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||
Intangible Assets with Definite Lives: | |||||||||||||||||||||||
Customer relationships | $ | 70 | $ | (45 | ) | $ | 25 | $ | 70 | $ | (41 | ) | $ | 29 | |||||||||
Other | 9 | (6 | ) | 3 | 9 | (6 | ) | 3 | |||||||||||||||
Total | $ | 79 | $ | (51 | ) | $ | 28 | $ | 79 | $ | (47 | ) | $ | 32 |
(millions) | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 and thereafter | |||||||||||||||||
Estimated future amortization expense | $ | 4 | $ | 7 | $ | 7 | $ | 7 | $ | 2 | $ | 1 |
As of June 30, 2013 | As of December 31, 2012 | ||||||||||||||||||||||
(millions) | Gross Carrying Amount | Impairment Charges | Net | Gross Carrying Amount | Impairment Charges | Net | |||||||||||||||||
Intangible Assets with Indefinite Lives: | |||||||||||||||||||||||
Trade names | $ | 22 | $ | — | $ | 22 | $ | 22 | $ | — | $ | 22 | |||||||||||
Other | 8 | — | 8 | 8 | — | 8 | |||||||||||||||||
Total | $ | 30 | $ | — | $ | 30 | $ | 30 | $ | — | $ | 30 |
7. | Debt |
(millions) | June 30, 2013 | December 31, 2012 | |||||
6.3% senior notes due 2016 | $ | 500 | $ | 500 | |||
7.75% senior notes due 2018, net of discount | 499 | 499 | |||||
7.875% senior notes due 2020, net of discount | 249 | 248 | |||||
8.375% senior notes due 2018 | 350 | 350 | |||||
9.75% senior notes due 2014, net of discount | 59 | 59 | |||||
10% convertible senior notes due 2018, net of discount | 386 | 385 | |||||
Ship mortgage facility (includes $4 million of current portion of long-term debt) | 27 | 29 | |||||
Credit facilities of Oman joint ventures | 3 | — | |||||
Industrial revenue bonds (due 2028 through 2034) | 239 | 239 | |||||
Total | $ | 2,312 | $ | 2,309 |
8. | 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) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||
Commodity contracts | $ | (2 | ) | $ | 1 | Cost of products sold | $ | — | $ | (3 | ) | |||||
Foreign exchange contracts | 1 | 1 | Cost of products sold | 1 | 1 | |||||||||||
Total | $ | (1 | ) | $ | 2 | $ | 1 | $ | (2 | ) |
Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | |||||||||
(millions) | 2013 | 2012 | ||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||
Commodity contracts | Cost of products sold | $ | (2 | ) | $ | — | ||||
Foreign exchange contracts | Other income, net | — | (1 | ) | ||||||
Total | $ | (2 | ) | $ | (1 | ) |
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) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | ||||||||||||||||
Commodity contracts | $ | — | $ | (3 | ) | Cost of products sold | $ | (1 | ) | $ | (6 | ) | ||||
Foreign exchange contracts | 3 | (1 | ) | Cost of products sold | 1 | — | ||||||||||
Total | $ | 3 | $ | (4 | ) | $ | — | $ | (6 | ) |
Location of Gain or (Loss) Recognized in Income on Derivatives | Amount of Gain or (Loss) Recognized in Income on Derivatives | |||||||||
(millions) | 2013 | 2012 | ||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||
Commodity contracts | Cost of products sold | $ | 1 | $ | — | |||||
Foreign exchange contracts | Other income, net | — | (1 | ) | ||||||
Total | $ | 1 | $ | (1 | ) |
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||||||||
(millions) | 6/30/13 | 12/31/12 | 6/30/13 | 12/31/12 | |||||||||||||
Derivatives in Cash Flow Hedging Relationships | |||||||||||||||||
Commodity contracts | Other current assets | $ | 1 | $ | 1 | Accrued expenses | $ | 1 | $ | 2 | |||||||
Commodity contracts | Other assets | — | — | Other liabilities | 1 | — | |||||||||||
Foreign exchange contracts | Other current assets | 3 | 1 | Accrued expenses | — | — | |||||||||||
Foreign exchange contracts | Other assets | — | — | Other liabilities | — | — | |||||||||||
Total derivatives in hedging relationships | $ | 4 | $ | 2 | $ | 2 | $ | 2 |
Derivatives Not Designated as Hedging Instruments | |||||||||||||||||
Commodity contracts | Other current assets | $ | 1 | $ | 1 | Accrued expenses | $ | — | $ | — | |||||||
Total derivatives not designated as hedging instruments | $ | 1 | $ | 1 | $ | — | $ | — | |||||||||
Total derivatives | Total assets | $ | 5 | $ | 3 | Total liabilities | $ | 2 | $ | 2 |
9. | Fair Value Measurements |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||||||||||
(millions) | 6/30/13 | 12/31/12 | 6/30/13 | 12/31/12 | 6/30/13 | 12/31/12 | 6/30/13 | 12/31/12 | |||||||||||||||||||||||
Cash equivalents | $ | 194 | $ | 284 | $ | 46 | $ | 46 | $ | — | $ | — | $ | 240 | $ | 330 | |||||||||||||||
Marketable securities: | |||||||||||||||||||||||||||||||
Corporate debt securities | — | — | 94 | 82 | — | — | 94 | 82 | |||||||||||||||||||||||
U.S. government and agency debt securities | — | — | 13 | 16 | — | — | 13 | 16 | |||||||||||||||||||||||
Non-U.S. government debt securities | — | — | 1 | 1 | — | — | 1 | 1 | |||||||||||||||||||||||
Asset-backed debt securities | — | — | 7 | 6 | — | — | 7 | 6 | |||||||||||||||||||||||
Certificates of deposit | — | — | 17 | 16 | — | — | 17 | 16 | |||||||||||||||||||||||
Municipal debt securities | — | — | 6 | 10 | — | — | 6 | 10 | |||||||||||||||||||||||
Derivative assets | — | — | 5 | 3 | — | — | 5 | 3 | |||||||||||||||||||||||
Derivative liabilities | — | — | (2 | ) | (2 | ) | — | — | (2 | ) | (2 | ) |
10. | Employee Retirement Plans |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Pension: | |||||||||||||||
Service cost of benefits earned | $ | 9 | $ | 7 | $ | 19 | $ | 15 | |||||||
Interest cost on projected benefit obligation | 16 | 16 | 31 | 32 | |||||||||||
Expected return on plan assets | (19 | ) | (17 | ) | (38 | ) | (34 | ) | |||||||
Net amortization | 12 | 8 | 23 | 17 | |||||||||||
Net pension cost | $ | 18 | $ | 14 | $ | 35 | $ | 30 | |||||||
Postretirement: | |||||||||||||||
Service cost of benefits earned | $ | 1 | $ | 1 | $ | 2 | $ | 2 | |||||||
Interest cost on projected benefit obligation | 2 | 2 | 3 | 4 | |||||||||||
Net amortization | (9 | ) | (9 | ) | (17 | ) | (18 | ) | |||||||
Net postretirement cost | $ | (6 | ) | $ | (6 | ) | $ | (12 | ) | $ | (12 | ) |
11. | Share-Based Compensation |
12. | Supplemental Balance Sheet Information |
(millions) | June 30, 2013 | December 31, 2012 | |||||
Finished goods and work in progress | $ | 264 | $ | 245 | |||
Raw materials | 59 | 59 | |||||
Total | $ | 323 | $ | 304 |
13. | Accumulated Other Comprehensive Income (Loss) |
Derivatives | Defined Benefit Plans | Foreign Currency Translation | AOCI | ||||||||||||||||||||||||||||
(millions) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||
Balance as of January 1 | $ | 32 | $ | 28 | $ | (303 | ) | $ | (221 | ) | $ | 38 | $ | 19 | $ | (233 | ) | $ | (174 | ) | |||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | 2 | (2 | ) | (12 | ) | 10 | (17 | ) | 4 | (27 | ) | 12 | |||||||||||||||||||
Less: Amounts reclassified from AOCI, net of tax (a) | — | (5 | ) | (5 | ) | 1 | — | (1 | ) | (5 | ) | (5 | ) | ||||||||||||||||||
Net other comprehensive income (loss) | 2 | 3 | (7 | ) | 9 | (17 | ) | 5 | (22 | ) | 17 | ||||||||||||||||||||
Balance as of June 30 | $ | 34 | $ | 31 | $ | (310 | ) | $ | (212 | ) | $ | 21 | $ | 24 | $ | (255 | ) | $ | (157 | ) |
Three months ended | Six months ended | ||||||||
June 30, 2013 | June 30, 2013 | ||||||||
(a) | Derivatives | ||||||||
Net reclassification from AOCI for cash flow hedges included in cost of products sold | $ | 1 | $ | — | |||||
Income tax expense on reclassification from AOCI included in income tax expense (benefit) | 1 | — | |||||||
Net amount reclassified from AOCI | $ | — | $ | — | |||||
Defined Benefit Plans | |||||||||
Net reclassification from AOCI for amortization of prior service cost included in cost of products sold | $ | 3 | $ | 5 | |||||
Net reclassification from AOCI for amortization of prior service cost included in selling and administrative expenses | 1 | 1 | |||||||
Income tax benefit on reclassification from AOCI included in income tax expense (benefit) | 1 | 1 | |||||||
Net amount reclassified from AOCI | $ | 3 | $ | 5 |
14. | Oman Investment |
15. | Stockholder Rights Plan and Protective Amendment |
16. | Restructuring and Long-Lived Asset Impairment Charges |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Severance | $ | 1 | $ | — | $ | 3 | $ | 1 | |||||||
Lease obligations | — | (1 | ) | — | (1 | ) | |||||||||
Long-lived asset impairment | — | 1 | — | 1 | |||||||||||
Other exit costs | — | — | — | 1 | |||||||||||
Total | $ | 1 | $ | — | $ | 3 | $ | 2 |
Balance as of 12/31/12 | 2013 Activity | Balance as of 6/30/13 | |||||||||||||
(millions) | Charges | Cash Payments | |||||||||||||
Severance | $ | 5 | $ | 3 | $ | (6 | ) | $ | 2 | ||||||
Lease obligations | 15 | — | (3 | ) | 12 | ||||||||||
Total | $ | 20 | $ | 3 | $ | (9 | ) | $ | 14 |
17. | Income Taxes |
18. | Litigation |
• | residential and nonresidential repair and remodel activity accounted for approximately 51% of our net sales, |
• | new residential construction accounted for approximately 25% of our net sales, |
• | new nonresidential construction accounted for approximately 23% of our net sales, and |
• | other activities accounted for approximately 1% of our net sales. |
(dollars in millions, except per-share data) | 2013 | 2012 | $ Favorable (Unfavorable) | % Favorable (Unfavorable) | ||||||||||
Three months ended June 30: | ||||||||||||||
Net sales | $ | 916 | $ | 798 | $ | 118 | 15 | % | ||||||
Cost of products sold | 765 | 696 | (69 | ) | (10 | )% | ||||||||
Gross profit | 151 | 102 | 49 | 48 | % | |||||||||
Selling and administrative expenses | 76 | 74 | (2 | ) | (3 | )% | ||||||||
Restructuring and long-lived asset impairment charges | 1 | — | (1 | ) | * | |||||||||
Operating profit | 74 | 28 | 46 | 164 | % | |||||||||
Interest expense | 50 | 52 | 2 | 4 | % | |||||||||
Interest income | (1 | ) | (1 | ) | — | — | % | |||||||
Loss on extinguishment of debt | — | 41 | 41 | (100 | )% | |||||||||
Other income, net | (2 | ) | (2 | ) | — | — | % | |||||||
Income (loss) from continuing operations before income taxes | 27 | (62 | ) | 89 | * | |||||||||
Income tax expense (benefit) | 2 | (3 | ) | (5 | ) | * | ||||||||
Income (loss) from continuing operations | 25 | (59 | ) | 84 | * | |||||||||
Income from discontinued operations, net of tax | — | 2 | (2 | ) | (100 | )% | ||||||||
Net income (loss) | $ | 25 | $ | (57 | ) | $ | 82 | * | ||||||
Diluted earnings (loss) per share | $ | 0.22 | $ | (0.53 | ) | $ | 0.75 | * | ||||||
Six months ended June 30: | ||||||||||||||
Net sales | $ | 1,730 | $ | 1,581 | $ | 149 | 9 | % | ||||||
Cost of products sold | 1,455 | 1,377 | (78 | ) | (6 | )% | ||||||||
Gross profit | 275 | 204 | 71 | 35 | % | |||||||||
Selling and administrative expenses | 149 | 150 | 1 | 1 | % | |||||||||
Restructuring and long-lived asset impairment charges | 3 | 2 | (1 | ) | (50 | )% | ||||||||
Operating profit | 123 | 52 | 71 | 137 | % | |||||||||
Interest expense | 100 | 104 | 4 | 4 | % | |||||||||
Interest income | (2 | ) | (2 | ) | — | — | % | |||||||
Loss on extinguishment of debt | — | 41 | 41 | (100 | )% | |||||||||
Other income, net | (1 | ) | (1 | ) | — | — | % | |||||||
Income (loss) from continuing operations before income taxes | 26 | (90 | ) | (116 | ) | (129 | )% | |||||||
Income tax benefit | (1 | ) | (2 | ) | (1 | ) | (50 | )% | ||||||
Income (loss) from continuing operations | 27 | (88 | ) | 115 | * | |||||||||
Income from discontinued operations, net of tax | — | 4 | (4 | ) | (100 | )% | ||||||||
Net income (loss) | $ | 27 | $ | (84 | ) | $ | 111 | * | ||||||
Diluted earnings (loss) per share | $ | 0.24 | $ | (0.79 | ) | $ | 1.03 | * | ||||||
*not meaningful |
Three months ended June 30: | Six months ended June 30: | ||||||||||||||||||||||||||||
Favorable (Unfavorable) | Favorable (Unfavorable) | ||||||||||||||||||||||||||||
(millions) | 2013(a) | 2012(b) | $ | % | 2013(a) | 2012(b) | $ | % | |||||||||||||||||||||
Net Sales: | |||||||||||||||||||||||||||||
U. S. Gypsum | $ | 446 | $ | 368 | $ | 78 | 21 | % | $ | 848 | $ | 749 | $ | 99 | 13 | % | |||||||||||||
CGC (gypsum) | 90 | 83 | 7 | 8 | % | 168 | 167 | 1 | 1 | % | |||||||||||||||||||
USG Mexico | 45 | 40 | 5 | 13 | % | 88 | 80 | 8 | 10 | % | |||||||||||||||||||
Other (c) | 23 | 11 | 12 | 109 | % | 37 | 19 | 18 | 95 | % | |||||||||||||||||||
Eliminations | (31 | ) | (29 | ) | (2 | ) | (7 | )% | (59 | ) | (56 | ) | (3 | ) | (5 | )% | |||||||||||||
Total | $ | 573 | $ | 473 | $ | 100 | 21 | % | $ | 1,082 | $ | 959 | $ | 123 | 13 | % | |||||||||||||
Operating Profit (Loss): | |||||||||||||||||||||||||||||
U. S. Gypsum | $ | 54 | $ | 26 | $ | 28 | 108 | % | $ | 98 | $ | 55 | $ | 43 | 78 | % | |||||||||||||
CGC (gypsum) | 5 | 2 | 3 | 150 | % | 6 | 5 | 1 | 20 | % | |||||||||||||||||||
USG Mexico | 6 | 4 | 2 | 50 | % | 11 | 9 | 2 | 22 | % | |||||||||||||||||||
Other (c) | 3 | (1 | ) | 4 | * | (1 | ) | (6 | ) | 5 | 83 | % | |||||||||||||||||
Eliminations | (1 | ) | — | (1 | ) | * | (1 | ) | — | (1 | ) | * | |||||||||||||||||
Total | $ | 67 | $ | 31 | $ | 36 | 116 | % | $ | 113 | $ | 63 | $ | 50 | 79 | % | |||||||||||||
*not meaningful |
(a) | Operating profit for 2013 included restructuring charges of $1 million and $2 million for the second quarter and first six months, respectively. These charges related to U.S. Gypsum. |
(b) | Operating profit for 2012 included restructuring charges of $1 million and $3 million for the second quarter and first six months, respectively. These charges related to U.S. Gypsum. |
(c) | Includes our mining operation in Little Narrows, Nova Scotia, Canada and our shipping company. |
Three months ended June 30: | Six months ended June 30: | ||||||||||||||||||||||||||||
Favorable (Unfavorable) | Favorable (Unfavorable) | ||||||||||||||||||||||||||||
(millions) | 2013 | 2012 | $ | % | 2013 | 2012 | $ | % | |||||||||||||||||||||
Net Sales: | |||||||||||||||||||||||||||||
USG Interiors | $ | 120 | $ | 113 | $ | 7 | 6 | % | $ | 235 | $ | 232 | $ | 3 | 1 | % | |||||||||||||
USG International (a) | 36 | 33 | 3 | 9 | % | 70 | 63 | 7 | 11 | % | |||||||||||||||||||
CGC (ceilings) | 16 | 16 | — | — | % | 32 | 34 | (2 | ) | (6 | )% | ||||||||||||||||||
Eliminations | (13 | ) | (12 | ) | (1 | ) | (8 | )% | (25 | ) | (25 | ) | — | — | % | ||||||||||||||
Total | $ | 159 | $ | 150 | $ | 9 | 6 | % | $ | 312 | $ | 304 | $ | 8 | 3 | % | |||||||||||||
Operating Profit: | |||||||||||||||||||||||||||||
USG Interiors (b) | $ | 22 | $ | 17 | $ | 5 | 29 | % | $ | 45 | $ | 40 | $ | 5 | 13 | % | |||||||||||||
USG International (a) | 1 | (1 | ) | 2 | * | 2 | (1 | ) | 3 | * | |||||||||||||||||||
CGC (ceilings) | 3 | 3 | — | — | % | 6 | 6 | — | — | % | |||||||||||||||||||
Total | $ | 26 | $ | 19 | $ | 7 | 37 | % | $ | 53 | $ | 45 | $ | 8 | 18 | % | |||||||||||||
*not meaningful |
Three months ended June 30: | Six months ended June 30: | ||||||||||||||||||||||||||||
Favorable (Unfavorable) | Favorable (Unfavorable) | ||||||||||||||||||||||||||||
(millions) | 2013 | 2012(a) | $ | % | 2013 | 2012(a) | $ | % | |||||||||||||||||||||
Net sales | $ | 319 | $ | 293 | $ | 26 | 9 | % | $ | 600 | $ | 563 | $ | 37 | 7 | % | |||||||||||||
Operating profit (loss) | 1 | (7 | ) | 8 | * | (1 | ) | (13 | ) | 12 | 92 | % | |||||||||||||||||
*not meaningful |
Six months ended June 30, | |||||||
(millions) | 2013 | 2012 | |||||
Net cash provided by (used for): | |||||||
Operating activities - Continuing operations | $ | (45 | ) | $ | (17 | ) | |
Investing activities - Continuing operations | (75 | ) | 96 | ||||
Financing activities - Continuing operations | (3 | ) | (41 | ) | |||
Effect of exchange rate changes on cash | (7 | ) | 2 | ||||
Net (decrease) increase in cash and cash equivalents | $ | (130 | ) | $ | 40 |
• | economic conditions, such as the levels of new home and other construction activity, employment levels, the availability of mortgage, construction and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates and consumer confidence; |
• | capital markets conditions and the availability of borrowings under our credit agreement or other financings; |
• | competitive conditions, such as price, service and product competition; |
• | shortages in raw materials; |
• | changes in raw material and energy costs; |
• | volatility in the assumptions used to determine the funded status of our pension plans; |
• | the loss of one or more major customers and our customers’ ability to meet their financial obligations to us; |
• | capacity utilization rates for us and the industry; |
• | our ability to expand into new geographic markets and the stability of such markets; |
• | changes in laws or regulations, including environmental and safety regulations; |
• | the satisfactory performance of certain business functions by third party service providers; |
• | our ability to achieve anticipated savings from cost reduction programs; |
• | the outcome in contested litigation matters; |
• | the effects of acts of terrorism or war upon domestic and international economies and financial markets; and |
• | acts of God. |
(a) | Evaluation of disclosure controls and procedures. |
(b) | Changes in internal control over financial reporting. |
3.1 | Amendment to Restated Certificate of Incorporation of USG (incorporated by reference to Exhibit 3.1 to USG Corporation's Current Report on Form 8-K dated May 10, 2013) |
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 and six months ended June 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (1) the consolidated statements of operations for the three months and six months ended June 30, 2013 and 2012, (2) the consolidated statements of comprehensive income for the three months and six months ended June 30, 2013 and 2012, (3) the consolidated balance sheets as of June 30, 2013 and December 31, 2012, (4) the consolidated statements of cash flows for the six months ended June 30, 2013 and 2012 and (5) notes to the consolidated financial statements. * |
* | Filed or furnished herewith |
USG CORPORATION | ||||
By | /s/ James S. Metcalf | |||
James S. Metcalf, | ||||
Chairman, President and Chief Executive Officer | ||||
By | /s/ Matthew F. Hilzinger | |||
Matthew F. Hilzinger, | ||||
Executive Vice President and Chief Financial Officer | ||||
July 25, 2013 | ||||
Exhibit Number | Exhibit |
3.1 | Amendment to Restated Certificate of Incorporation of USG (incorporated by reference to Exhibit 3.1 to USG Corporation's Current Report on Form 8-K dated May 10, 2013) |
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 and six months ended June 30, 2013, formatted in XBRL (Extensible Business Reporting Language): (1) the consolidated statements of operations for the three months and six months ended June 30, 2013 and 2012, (2) the consolidated statements of comprehensive income for the three months and six months ended June 30, 2013 and 2012, (3) the consolidated balance sheets as of June 30, 2013 and December 31, 2012, (4) the consolidated statements of cash flows for the six months ended June 30, 2013 and 2012 and (5) notes to the consolidated financial statements. * |
* | Filed or furnished herewith |
1. | I have reviewed this quarterly report on Form 10-Q of USG Corporation (the “Corporation”); |
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 Corporation as of, and for, the periods presented in this report; |
4. | The Corporation’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 15(d)-15(f)) for the Corporation 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 Corporation, 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 Corporation’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 Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter (the Corporation’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and |
5. | The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’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 Corporation’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 Corporation’s internal control over financial reporting. |
July 25, 2013 | /s/ James S. Metcalf |
James S. Metcalf | |
Chairman, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of USG Corporation (the “Corporation”); |
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 Corporation as of, and for, the periods presented in this report; |
4. | The Corporation’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 15(d)-15(f)) for the Corporation 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 Corporation, 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 Corporation’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 Corporation’s internal control over financial reporting that occurred during the Corporation’s most recent fiscal quarter (the Corporation’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting; and |
5. | The Corporation’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Corporation’s auditors and the audit committee of the Corporation’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 Corporation’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 Corporation’s internal control over financial reporting. |
July 25, 2013 | /s/ Matthew F. Hilzinger |
Matthew F. Hilzinger | |
Executive Vice President and Chief Financial Officer |
(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 Corporation. |
July 25, 2013 | /s/ James S. Metcalf |
James S. Metcalf | |
Chairman, President and Chief Executive Officer |
(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 Corporation. |
July 25, 2013 | /s/ Matthew F. Hilzinger |
Matthew F. Hilzinger | |
Executive Vice President and Chief Financial Officer |
Location of Mines/Quarries | Number of Citations for S&S Violations | Number of Citations for Non S&S Violations | Total Proposed Assessments |
Alabaster, Michigan | — | 3 | $— |
Empire, Nevada (closed) | — | — | — |
Fort Dodge, Iowa | — | — | — |
Plaster City, California | — | 2 | — |
Shoals, Indiana | — | 1 | — |
Sigurd, Utah | — | — | — |
Southard, Oklahoma | — | — | — |
Sperry, Iowa | 1 | 6 | — |
Spruce Pine, North Carolina | — | — | — |
Sweetwater, Texas | — | — | — |
Totals | 1 | 12 | $— |
Employee Retirement Plans
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Jun. 30, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Retirement Plans | Employee Retirement Plans The components of net pension and postretirement benefits costs are summarized in the following table:
We currently expect to contribute approximately $72 million to our pension plans in 2013. During the first six months of 2013, we made cash contributions of $15 million to our pension plan in Canada and $4 million, in aggregate, to certain other domestic and foreign pension plans. On July 23, 2013, we contributed $50 million in cash to the USG Corporation Retirement Plan Trust. |
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parentheticals) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax Effect [Abstract] | ||||
Gain (loss) on derivatives qualifying as cash flow hedges, Tax | $ 1 | $ (1) | $ 1 | $ (2) |
Reclassification adjustment for loss on derivatives included in net income, Tax | 1 | 0 | 0 | (1) |
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Tax [Abstract] | ||||
Changes in pension and postretirement benefits, Tax | 1 | 5 | 2 | 5 |
Amortization of prior service cost included in periodic pension cost, Tax | (1) | (1) | (1) | (1) |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax [Abstract] | ||||
Changes in foreign currency translation, Tax | 0 | 0 | 0 | 0 |
Translation gains realized upon complete liquidation of an investment in a foreign entity, Tax | $ 0 | $ 0 | $ 0 | $ 0 |
Segments
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments Our operations are organized into three reportable segments: North American Gypsum, Worldwide Ceilings and Building Products Distribution. As discussed in Note 2, the results of the European business operations sold to Knauf, previously included in our Worldwide Ceilings segment, were reflected as discontinued operations in the accompanying consolidated 2012 financial statements and, as such, are not included in these tables. Segment results for our continuing operations were as follows:
Restructuring and long-lived asset impairment charges by segment were as follows:
See Note 16 for information related to the restructuring reserve as of June 30, 2013 and restructuring and long-lived asset impairment charges for the three and six months ended June 30, 2013 and 2012. |
Income Taxes
|
6 Months Ended |
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Jun. 30, 2013
|
|
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We had income tax expense of $2 million and an effective tax rate of 7.4% in the second quarter of 2013. In the United States, we are in a net operating loss carryforward position and our deferred income tax assets are subject to a valuation allowance. Therefore, any income or loss before income taxes does not generate a corresponding income tax expense or benefit. For the first six months of 2013, we had an effective tax rate of negative 3.8% as we recorded a benefit of $1 million on pre-tax income of $26 million. An income tax benefit of $3 million during the first quarter of 2013 primarily related to the release of the valuation allowance against a portion of our alternative minimum tax, or AMT, credits. This change in the realizability of those credits was due to the enactment of the American Taxpayer Relief Act of 2012. In assessing the requirement for, and amount of, a valuation allowance in accordance with the more-likely-than-not standard, we give appropriate consideration to all positive and negative evidence related to the realization of the deferred tax assets. As of June 30, 2013, we had federal net operating loss, or NOL, carryforwards of approximately $2.079 billion that are available to offset future federal taxable income and will expire in the years 2026 through 2033, none of which are subject to Internal Revenue Code limitations under Section 382. In addition, as of that date, we had federal AMT credit carryforwards of approximately $45 million that are available to reduce future regular federal income taxes over an indefinite period. In order to fully realize these U.S. federal net deferred tax assets, taxable income of approximately $2.209 billion would need to be generated during the period before their expiration. In addition, we have federal foreign tax credit carryforwards of $8 million that will expire in 2015. As of June 30, 2013, we had a gross deferred tax asset related to our state NOLs and tax credit carryforwards of $276 million, of which $1 million will expire in 2013. The remainder will expire if unused in years 2014 through 2033. We also had NOL and tax credit carryforwards in various foreign jurisdictions in the amount of $1 million as of June 30, 2013, against which we have maintained a valuation allowance. During periods prior to 2013, we established a valuation allowance against our deferred tax assets totaling $1.125 billion. Based upon an evaluation of all available evidence, we recorded a decrease in the valuation allowance against our deferred tax assets of $4 million during the first quarter of 2013. Approximately $3 million of the decrease related to the realizability of our deferred tax assets; therefore, we recorded a related $3 million income tax benefit in our consolidated statement of operations. The other $1 million of the decrease resulted from a reduction in the gross value of our deferred tax assets and, as a result, we recorded a corresponding reduction in the valuation allowance, resulting in no net impact to our consolidated statement of operations. In the second quarter of 2013, we recorded an additional decrease in the valuation allowance of $16 million. The decrease resulted from a reduction in the gross value of our deferred tax assets and, as a result, there was no net impact to our consolidated statement of operations. The decreases in the valuation allowance in 2013 resulted in a deferred tax asset valuation allowance of $1.105 billion as of June 30, 2013. The Internal Revenue Code imposes limitations on a corporation’s ability to utilize NOLs if it experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. If we were to experience an ownership change, utilization of our NOLs would be subject to an annual limitation determined by multiplying the market value of our outstanding shares of stock at the time of the ownership change by the applicable long-term tax-exempt rate, which was 2.70% for June 2013. Any unused annual limitation may be carried over to later years within the allowed NOL carryforward period. The amount of the limitation may, under certain circumstances, be increased or decreased by built-in gains or losses held by us at the time of the change that are recognized in the five-year period after the change. Many states have similar limitations. If an ownership change had occurred as of June 30, 2013, our annual U.S. federal NOL utilization would have been limited to approximately $68 million per year. See Note 15 for a description of our recent actions to protect these NOL carryforwards. |
Stockholder Rights Plan (Details Textual)
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Jun. 30, 2013
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Equity [Abstract] | |
Beneficial owner of common stock percentage | 4.90% |
Beneficial owner of common stock percentage in future | 15.00% |
Beneficial ownership percentage post standstill period for Berkshire Hathaway | 50.00% |
Period of review Shareholder Rights Plan | 3 years |
Share-Based Compensation
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6 Months Ended |
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Jun. 30, 2013
|
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation During the first six months of 2013, we granted share-based compensation to eligible participants under our Long-Term Incentive Plan. We recognize expense on all share-based grants over the service period, which is the shorter of the period until the employees’ retirement eligibility dates or the service period of the award for awards expected to vest. Expense is generally reduced for estimated forfeitures. MARKET SHARE UNITS We granted 361,308 market share units, MSUs, during the first six months of 2013. Generally, half of the MSUs vest after a two-year period and the other half after a three-year period, in each case, based on our actual stock price performance during such periods. The number of MSUs earned will vary from zero to 150% of the number of MSUs awarded depending on the actual performance of our stock price. In the case of the termination of employment due to death, disability or retirement during the performance period, vesting will be pro-rated based on the number of full months employed in 2013. Awards earned will be issued at the end of the two-year and three-year periods. MSUs may vest earlier in the case of a change in control. Each MSU earned will be settled in common stock. We estimated the fair value of each MSU granted on the date of grant using a Monte Carlo simulation that used the assumptions noted below. The MSUs granted during the first six months of 2013 had a weighted average fair value of $34.55. Volatility was based on stock price history immediately prior to grant for a period commensurate with the remaining life of the plan. The risk-free rate was based on zero coupon U.S. government issues at the time of grant. The expected term represents the period from the valuation date to the end of the performance period. The weighted-average assumptions used in the valuations were as follows: expected volatility of 60.97%, risk-free rate of 0.35%, expected term (in years) of 2.38 and expected dividends of zero. RESTRICTED STOCK UNITS We granted restricted stock units, RSUs, with respect to 24,500 shares of common stock during the first six months of 2013 that vest in four years from the date of grant. RSUs granted as special retention awards generally vest after a specified number of years from the date of grant or at a specified date and RSUs granted with performance goals vest if those goals are attained. Generally, RSUs may vest earlier in the case of death, disability, retirement or a change in control. Each RSU is settled in a share of our common stock after the vesting period. The fair value of each RSU granted is equal to the closing price of our common stock on the date of grant. The RSUs granted during the first six months of 2013 had a weighted average fair value of $29.89. PERFORMANCE SHARES We granted 104,543 performance shares during the first six months of 2013. The performance shares generally vest after a three-year period based on our total stockholder return relative to the performance of the Dow Jones U.S. Construction and Materials Index, with adjustments to that index in certain circumstances, for the three-year period. The number of performance shares earned will vary from 0% to 200% of the number of performance shares awarded depending on that relative performance. Vesting will be pro-rated based on the number of full months employed during the performance period in the case of death, disability, retirement or a change-in-control, and pro-rated awards earned will be issued at the end of the three-year period. Each performance share earned will be settled in common stock. We estimated the fair value of each performance share granted on the date of grant using a Monte Carlo simulation that used the assumptions noted below. The performance shares granted during the first six months of 2013 had a weighted average fair value of $38.89. Expected volatility was based on implied volatility of our traded options and the daily historical volatilities of our peer group. The risk-free rate was based on zero coupon U.S. government issues at the time of grant. The expected term represents the period from the valuation date to the end of the performance period. The weighted average assumptions used in the valuations were as follows: expected volatility of 59.98%, risk-free rate of 0.43%, expected term (in years) of 2.88 and expected dividends of zero. |
Intangible Assets (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Intangible assets with definite lives | ||
Gross carrying amount | $ 79 | $ 79 |
Accumulated amortization | (51) | (47) |
Net | 28 | 32 |
Customer relationships [Member]
|
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Intangible assets with definite lives | ||
Gross carrying amount | 70 | 70 |
Accumulated amortization | (45) | (41) |
Net | 25 | 29 |
Other intangible assets [Member]
|
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Intangible assets with definite lives | ||
Gross carrying amount | 9 | 9 |
Accumulated amortization | (6) | (6) |
Net | $ 3 | $ 3 |
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2012
|
Jun. 30, 2012
|
|
Discontinued Operations and Disposal Groups [Abstract] | ||
Sales from discontinued operations | $ 27 | $ 56 |
Operating profit from discontinued operations | 3 | 6 |
Income from discontinued operations before income taxes | $ 3 | $ 6 |
Segments (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net sales and operating profit (loss) by segment | Segment results for our continuing operations were as follows:
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Restructuring and long-lived asset impairment charges by segment | Restructuring and long-lived asset impairment charges by segment were as follows:
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Discontinued Operations (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued operations income statement | Sales from discontinued operations, operating profit from discontinued operations and income from discontinued operations before income taxes for the three and six months ended June 30, 2012 were as follows:
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Marketable Securities (Details 1) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Contractual maturities of marketable securities | ||
Due in 1 year or less, amortized cost | $ 113 | |
Due in 1 year or less, fair value | 113 | |
Due in 1-5 years, amortized cost | 25 | |
Due in 1-5 years, fair value | 25 | |
Marketable securities, amortized cost | 138 | 131 |
Marketable securities, fair value | $ 138 | $ 131 |
Employee Retirement Plans (Tables)
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Jun. 30, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net pension and postretirement benefits costs | The components of net pension and postretirement benefits costs are summarized in the following table:
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Segments (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Net Sales: | ||||
Net sales | $ 916 | $ 798 | $ 1,730 | $ 1,581 |
Operating Profit (Loss): | ||||
Operating profit (loss) | 74 | 28 | 123 | 52 |
North American Gypsum [Member]
|
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Net Sales: | ||||
Net sales | 573 | 473 | 1,082 | 959 |
Operating Profit (Loss): | ||||
Operating profit (loss) | 67 | 31 | 113 | 63 |
Worldwide Ceilings [Member]
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Net Sales: | ||||
Net sales | 159 | 150 | 312 | 304 |
Operating Profit (Loss): | ||||
Operating profit (loss) | 26 | 19 | 53 | 45 |
Building Products Distribution [Member]
|
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Net Sales: | ||||
Net sales | 319 | 293 | 600 | 563 |
Operating Profit (Loss): | ||||
Operating profit (loss) | 1 | (7) | (1) | (13) |
Corporate [Member]
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Operating Profit (Loss): | ||||
Operating profit (loss) | (19) | (17) | (37) | (39) |
Eliminations [Member]
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Net Sales: | ||||
Net sales | (135) | (118) | (264) | (245) |
Operating Profit (Loss): | ||||
Operating profit (loss) | $ (1) | $ 2 | $ (5) | $ (4) |
Intangible Assets (Details 1) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
---|---|
Estimated annual amortization expense intangible assets | |
Estimated future amortization expense, 2013 | $ 4 |
Estimated future amortization expense, 2014 | 7 |
Estimated future amortization expense, 2015 | 7 |
Estimated future amortization expense, 2016 | 7 |
Estimated future amortization expense, 2017 | 2 |
Estimated future amortization expense, 2018 and thereafter | $ 1 |
Debt (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | Total debt, including the current portion of long-term debt, consisted of the following:
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Litigation (Details Textual) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Affiliates of Knauf Percentage Ownership of USG Common Stock | 14.00% |
Loss contingency, estimate of possible loss | $ 7 |
Receivables related to settlement | 2 |
Accrual potential liability for environmental cleanup | $ 16 |
Supplemental Balance Sheet Information (Details Textual) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Supplemental Balance Sheet Information [Abstract] | ||
Accrued interest | $ 47 | $ 47 |
Earnings (Loss) Per Share (Details 1) (Stock Compensation Plan [Member])
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
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Jun. 30, 2013
|
Jun. 30, 2012
|
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Stock Compensation Plan [Member]
|
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options, RSUs, MSUs, and performance shares | 2.3 | 8.2 | 2.3 | 8.0 |
Restructuring Charges (Details 1) (USD $)
In Millions, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Balance | |
Balance as of December 31 | $ 20 |
Charges | 3 |
Cash payments | (9) |
Balance as of June 30 | 14 |
Severance [Member]
|
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Balance | |
Balance as of December 31 | 5 |
Charges | 3 |
Cash payments | (6) |
Balance as of June 30 | 2 |
Lease obligations [Member]
|
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Balance | |
Balance as of December 31 | 15 |
Charges | 0 |
Cash payments | (3) |
Balance as of June 30 | $ 12 |
Litigation
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation CHINESE-MANUFACTURED DRYWALL LAWSUITS L&W Supply Corporation is one of many defendants in lawsuits relating to Chinese-made wallboard installed in homes primarily in the southeastern United States during 2006 and 2007. The plaintiffs in these lawsuits, most of whom are homeowners, seek damages associated with the removal and replacement of the Chinese-made wallboard which they claim emits elevated levels of sulfur gases causing a bad smell and corrosion of metal surfaces. Most of the lawsuits against L&W Supply Corporation are part of the multi-district class action litigation titled In re Chinese-Manufactured Drywall Products Liability Litigation, MDL No. 2047, pending in New Orleans, Louisiana. The vast majority of the claims against L&W Supply Corporation relate to wallboard we delivered that was manufactured by Knauf Plasterboard (Tianjin) Co., or Knauf Tianjin, an affiliate of a multi-national manufacturer of building materials that also beneficially owns approximately 14% of USG's outstanding shares of common stock. We have reached settlement agreements with Knauf and the plaintiffs in the multi-district class action litigation that cap our responsibility for all claims against us for homes to which we delivered Knauf Tianjin wallboard. We are also subject to a small number of similar claims that relate to Chinese-made wallboard that was not manufactured by Knauf. Those claims are not encompassed within our settlement with Knauf or the multi-district class action settlement. As of June 30, 2013, we have an accrual of $7 million for our estimated cost of resolving all Chinese wallboard property damage claims pending against us and expected to be asserted in the future, and, based on the terms of our settlement with Knauf, we have a related receivable of $2 million recorded as an offset to the accrual. Our accrual does not take into account litigation costs, which are expensed as incurred, or any set-off for potential insurance recoveries. Based on the information available to us to date regarding the number and type of pending claims, estimates of likely future claims, and the estimated costs of resolving those claims, we believe that we have appropriately accrued for our exposure related to the Chinese wallboard claims, and we believe that these claims and other similar claims that might be asserted will not have a material effect on our results of operations, financial position or cash flows. WALLBOARD PRICING CLASS ACTION LAWSUITS Beginning December 2012, USG Corporation and United States Gypsum Company were named as defendants in putative class action lawsuits alleging that since at least September 2011, U.S. wallboard manufacturers conspired to fix and raise the price of gypsum wallboard sold in the United States and to effectuate the alleged conspiracy by ending the practice of providing job quotes on wallboard. These lawsuits are consolidated for pretrial proceedings in multi-district litigation in the United States District Court for the Eastern District of Pennsylvania, under the title In re: Domestic Drywall Antitrust Litigation, MDL No. 2437. Two consolidated complaints have been filed. One group of plaintiffs purports to represent a class of entities that purchased gypsum wallboard in the United States directly from any of the defendants or their affiliates from January 1, 2012 to the present. On behalf of this alleged direct purchaser class, the plaintiffs seek unspecified monetary damages, tripled under the antitrust laws, as well as pre-judgment interest, post-judgment interest and attorneys' fees. The second group of plaintiffs purports to bring their claims and seek damages on behalf of indirect purchasers of gypsum wallboard. These indirect purchaser plaintiffs seek to certify a separate class of persons or entities who from January 1, 2012 through the present indirectly purchased wallboard in the United States from the defendants or their affiliates for end use and not for resale. These wallboard pricing class action lawsuits are in a preliminary stage. However, based on the information known to us, we believe these lawsuits will not have a material effect on our results of operations, financial position or cash flows. ENVIRONMENTAL LITIGATION We have been notified by state and federal environmental protection agencies of possible involvement as one of numerous “potentially responsible parties” in a number of Superfund sites in the United States. As a potentially responsible party, we may be responsible to pay for some part of the cleanup of hazardous waste at those sites. In most of these sites, our involvement is expected to be minimal. In addition, we are involved in environmental cleanups of other property that we own or owned. As of June 30, 2013, we have an accrual of $16 million for our probable and reasonably estimable liability in connection with these matters. Our accruals take into account all known or estimated undiscounted costs associated with these sites, including site investigations and feasibility costs, site cleanup and remediation, certain legal costs, and fines and penalties, if any. However, we continue to review these accruals as additional information becomes available and revise them as appropriate. Based on the information known to us, we believe these environmental matters will not have a material effect on our results of operations, financial position or cash flows. OTHER LITIGATION We are named as defendants in other claims and lawsuits arising from our operations, including claims and lawsuits arising from the operation of our vehicles, product warranties, personal injury and commercial disputes. We believe that we have properly accrued for our probable liability in connection with these claims and suits, taking into account the probability of liability, whether our exposure can be reasonably estimated and, if so, our estimate of our liability or the range of our liability. We do not expect these or any other litigation matters involving USG to have a material effect on our results of operations, financial position or cash flows. |
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Statement of Financial Position [Abstract] | ||
Reserves on receivables | $ 16 | $ 16 |
Accumulated depreciation and depletion | $ 1,793 | $ 1,738 |
Organization, Consolidation and Presentation of Financial Statements
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements | Organization, Consolidation and Presentation of Financial Statements PREPARATION OF FINANCIAL STATEMENTS We prepared the accompanying unaudited consolidated financial statements of USG Corporation in accordance with applicable United States Securities and Exchange Commission, or SEC, guidelines pertaining to interim financial information. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ materially from those estimates. In the opinion of our management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of our financial results for the interim periods. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the results of operations to be expected for the entire year. These financial statements and notes are to be read in conjunction with the financial statements and notes included in USG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which we filed with the SEC on February 15, 2013. NEW ACCOUNTING PRONOUNCEMENTS ADOPTED DURING THE PERIOD In February 2013, the Financial Accounting Standards Board, or FASB, issued "Comprehensive Income: Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income," which requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, entities are required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, entities are required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail on these amounts. This standard is effective prospectively for reporting periods beginning after December 15, 2012. We adopted this standard during the first quarter of 2013 and have included the required disclosure in Note 13. In December 2011 and February 2013, the FASB issued an amendment to the Balance Sheet topic of the Accounting Standards Codification, or ASC, which requires entities to disclose both gross and net information about both derivatives and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting agreement. The objective of the disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards. This standard is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. Retrospective presentation for all comparative periods presented is required. Accordingly, we adopted this amendment during the first quarter of 2013 and have included the required disclosure in Note 8. |
Earnings (Loss) Per Share
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is based on the weighted average number of common shares outstanding. Diluted earnings (loss) per share is based on the weighted average number of common shares outstanding plus the dilutive effect, if any, of restricted stock units, or RSUs, market share units, or MSUs, performance shares, the potential exercise of outstanding stock options, deferred shares associated with our deferred compensation program for non-employee directors and the potential conversion of our $400 million of 10% convertible senior notes due 2018. The reconciliation of basic earnings (loss) per share to diluted earnings (loss) per share is shown in the following table.
The diluted earnings (loss) per share for the three months and six months ended June 30, 2013 and 2012 was computed using the weighted average number of common shares outstanding during those periods. The approximately 35.1 million shares issuable upon conversion of our $400 million of 10% convertible senior notes due 2018 at the initial conversion price of $11.40 per share were not included in the computation of diluted earnings (loss) per share for those periods because their inclusion would be anti-dilutive. Stock options, RSUs, MSUs and performance shares that were not included in the computation of diluted earnings (loss) per share for those periods because their inclusion would be anti-dilutive were as follows:
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Discontinued Operations
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On August 7, 2012, USG and its indirect wholly owned subsidiaries, USG Foreign Investments, Ltd. and USG (U.K.) Ltd., together the Sellers, entered into a Share and Asset Purchase Agreement, with Knauf International GmbH and Knauf AMF Ceilings Ltd., together Knauf, pursuant to which the Sellers agreed to sell to Knauf certain of their wholly owned European business operations. Those businesses included the manufacture and distribution of DONN® brand ceiling grid and SHEETROCK® brand finishing compounds principally throughout Europe, Russia and Turkey. On December 27, 2012, the sale transaction was consummated and we received net proceeds of $73 million, which resulted in a gain of $55 million, net of tax. Affiliates of Knauf are the beneficial owners of approximately 14% of USG’s outstanding shares of common stock. The results of the European business operations sold to Knauf were classified as discontinued operations in our 2012 consolidated statement of operations. Because these businesses were sold on December 27, 2012, they are not included in our consolidated balance sheet as of June 30, 2013 or December 31, 2012. Sales from discontinued operations, operating profit from discontinued operations and income from discontinued operations before income taxes for the three and six months ended June 30, 2012 were as follows:
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Segments (Details 1) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Restructuring and long-lived asset impairment charges by segment | ||||
Restructuring and long-lived asset impairment charges | $ 1 | $ 0 | $ 3 | $ 2 |
North American Gypsum [Member]
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Restructuring and long-lived asset impairment charges by segment | ||||
Restructuring and long-lived asset impairment charges | 1 | 1 | 2 | 3 |
Worldwide Ceilings [Member]
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Restructuring and long-lived asset impairment charges by segment | ||||
Restructuring and long-lived asset impairment charges | 0 | 1 | 0 | 1 |
Building Products Distribution [Member]
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Restructuring and long-lived asset impairment charges by segment | ||||
Restructuring and long-lived asset impairment charges | 0 | (2) | 0 | (2) |
Corporate [Member]
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Restructuring and long-lived asset impairment charges by segment | ||||
Restructuring and long-lived asset impairment charges | $ 0 | $ 0 | $ 1 | $ 0 |
Earnings (Loss) Per Share (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of basic earnings (loss) per share to diluted earnings (loss) per share | The reconciliation of basic earnings (loss) per share to diluted earnings (loss) per share is shown in the following table.
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Schedule of antidilutive securities excluded from computation of earnings per share | Stock options, RSUs, MSUs and performance shares that were not included in the computation of diluted earnings (loss) per share for those periods because their inclusion would be anti-dilutive were as follows:
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Derivative Instruments (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pretax effects of derivative instruments on consolidated statements of operations | The following are the pretax effects of derivative instruments on the consolidated statements of operations for the three months ended June 30, 2013 and 2012.
The following are the pretax effects of derivative instruments on the consolidated statements of operations for the six months ended June 30, 2013 and 2012.
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Fair values of derivative instruments on the consolidated balance sheets | The following are the fair values of derivative instruments and the location on our consolidated balance sheets as of June 30, 2013 and December 31, 2012.
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Restructuring Charges (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges | We recorded the following restructuring and long-lived asset impairment charges during the three and six months ended June 30, 2013 and 2012:
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Restructuring reserves | The restructuring reserve is summarized as follows:
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Restructuring Charges (Details Textual) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
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Dec. 31, 2012
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Restructuring and Related Activities [Abstract] | ||
Total restructuring reserve | $ 14 | $ 20 |
Cash payments | 9 | |
Expected payments remainder of current fiscal year | 3 | |
Restructuring payments in the next fiscal year | 3 | |
Restructuring payments due thereafter | $ 8 |
Derivative Instruments (Details 1) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 5 | $ 3 |
Derivative Liabilities | 2 | 2 |
Designated as Hedging Instrument [Member]
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||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 4 | 2 |
Derivative Liabilities | 2 | 2 |
Not Designated as Hedging Instrument [Member]
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||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 1 | 1 |
Derivative Liabilities | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Commodity contracts [Member] | Other current assets [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 1 | 1 |
Not Designated as Hedging Instrument [Member] | Commodity contracts [Member] | Accrued expenses [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Commodity contracts [Member] | Other current assets [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 1 | 1 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Commodity contracts [Member] | Other assets [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Commodity contracts [Member] | Accrued expenses [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 1 | 2 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Commodity contracts [Member] | Other liabilities [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 1 | 0 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member] | Other current assets [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 3 | 1 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member] | Other assets [Member]
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Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member] | Accrued expenses [Member]
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||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 0 |
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member] | Other liabilities [Member]
|
||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ 0 | $ 0 |