Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2017shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | USG CORP |
Entity Central Index Key | 757,011 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2017 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 143,409,835 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income(Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 811 | $ 769 | $ 1,578 | $ 1,516 |
Cost of products sold | 643 | 576 | 1,246 | 1,142 |
Gross profit | 168 | 193 | 332 | 374 |
Selling and administrative expenses | 72 | 71 | 145 | 139 |
Recovery of receivable | 0 | 0 | 0 | (3) |
Operating profit | 96 | 122 | 187 | 238 |
Income from equity method investments | 14 | 16 | 27 | 23 |
Interest expense | (19) | (38) | (39) | (78) |
Interest income | 0 | 1 | 1 | 3 |
Loss on extinguishment of debt | (22) | (2) | (22) | (4) |
Other (expense) income, net | (3) | 2 | (4) | 5 |
Income from continuing operations before income taxes | 66 | 101 | 150 | 187 |
Income tax expense | (20) | (34) | (49) | (60) |
Income from continuing operations | 46 | 67 | 101 | 127 |
(Loss) income from discontinued operations, net of tax | (10) | 7 | (10) | 14 |
Net income | $ 36 | $ 74 | $ 91 | $ 141 |
Earnings per average common share - basic: | ||||
Income from continuing operations (in dollars per share) | $ 0.32 | $ 0.46 | $ 0.69 | $ 0.87 |
(Loss) income from discontinued operations (in dollars per share) | (0.07) | 0.04 | (0.07) | 0.09 |
Net income (in dollars per share) | 0.25 | 0.50 | 0.62 | 0.96 |
Earnings per average common share - diluted: | ||||
Income from continuing operations (in dollars per share) | 0.31 | 0.46 | 0.68 | 0.86 |
(Loss) income from discontinued operations (in dollars per share) | (0.07) | 0.04 | (0.07) | 0.09 |
Net income (in dollars per share) | $ 0.24 | $ 0.50 | $ 0.61 | $ 0.95 |
Average number of shares outstanding reconciliation | ||||
Average common shares | 144,526,900 | 145,933,165 | 145,753,098 | 145,856,220 |
Dilutive awards under long-term incentive plan | 2,113,193 | 2,060,867 | 2,317,971 | 1,465,200 |
Deferred shares for non-employee directors | 220,846 | 0 | 220,404 | 0 |
Average diluted common shares | 146,860,939 | 147,994,032 | 148,291,473 | 147,321,420 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 36 | $ 74 | $ 91 | $ 141 |
Derivatives qualifying as cash flow hedges: | ||||
(Loss) gain on derivatives qualifying as cash flow hedges, net of tax (benefit) of ($2), $3, ($5) and $0, respectively | (2) | 4 | (8) | (4) |
Less: Reclassification adjustment for loss on derivatives included in net income, net of tax (benefit) of $0, ($1), $0 and ($2), respectively | (1) | (2) | (1) | (4) |
Net derivatives qualifying as cash flow hedges | (1) | 6 | (7) | 0 |
Pension and postretirement benefits: | ||||
Changes in pension and postretirement benefits, net of tax (benefit) of $2, ($2), $2 and ($3), respectively | 4 | (3) | 3 | (6) |
Less: Amortization of prior service cost included in net periodic pension cost, net of tax (benefit) of ($7), ($1), ($7) and ($1), respectively | (12) | (1) | (12) | (1) |
Net pension and postretirement benefits | 16 | (2) | 15 | (5) |
Foreign currency translation: | ||||
Changes in foreign currency translation, net of tax benefit of $0 in all periods | 8 | (36) | 48 | (12) |
Other comprehensive income (loss), net of tax | 23 | (32) | 56 | (17) |
Comprehensive income | $ 59 | $ 42 | $ 147 | $ 124 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivatives Qualifying as Hedges, Tax: | ||||
(Loss) gain on derivatives qualifying as cash flow hedges, tax expense (benefit) | $ (2) | $ 3 | $ (5) | $ 0 |
Less: Reclassification adjustment for loss on derivatives included in net income, tax expense (benefit) | 0 | (1) | 0 | (2) |
Pension and Other Postretirement Benefit Plans, Tax: | ||||
Changes in pension and postretirement benefits, tax expense (benefit) | 2 | (2) | 2 | (3) |
Less: Amortization of prior service cost included in net periodic pension cost, tax expense (benefit) | (7) | (1) | (7) | (1) |
Foreign Currency Translation Adjustment, Tax: | ||||
Changes in foreign currency translation, tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 371 | $ 427 |
Short-term marketable securities | 59 | 62 |
Receivables (net of reserves 2017 - $8 and 2016 - $8) | 234 | 183 |
Inventories | 249 | 236 |
Income taxes receivable | 1 | 1 |
Other current assets | 35 | 40 |
Total current assets | 949 | 949 |
Long-term marketable securities | 33 | 29 |
Property, plant and equipment (net of accumulated depreciation and depletion - 2017 - $2,026 and 2016 - $1,960) | 1,718 | 1,707 |
Deferred income taxes | 469 | 492 |
Equity method investments | 656 | 628 |
Other assets | 62 | 64 |
Total assets | 3,887 | 3,869 |
Liabilities and Stockholders’ Equity | ||
Accounts payable | 242 | 237 |
Accrued expenses | 133 | 175 |
Income taxes payable | 4 | 10 |
Total current liabilities | 379 | 422 |
Long-term debt | 1,077 | 1,083 |
Deferred income taxes | 4 | 4 |
Pension and other postretirement benefits | 272 | 290 |
Other liabilities | 187 | 184 |
Total liabilities | 1,919 | 1,983 |
Preferred stock – $1 par value, authorized 36,000,000 shares; outstanding - none | 0 | 0 |
Common stock – $0.10 par value; authorized 200,000,000 shares; issued: 2017 - 143,410,000 shares and 2016 - 146,167,000 shares | 15 | 15 |
Treasury stock at cost; 2017 - 3,103,000 shares and 2016 - 0 shares | (95) | 0 |
Additional paid-in capital | 3,043 | 3,038 |
Accumulated other comprehensive loss | (329) | (385) |
Retained earnings (accumulated deficit) | (666) | (782) |
Total stockholders’ equity | 1,968 | 1,886 |
Total liabilities and stockholders’ equity | $ 3,887 | $ 3,869 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Reserves on receivables | $ 8 | $ 8 |
Accumulated depreciation | $ 2,026 | $ 1,960 |
Preferred stock - par value | $ 1 | $ 1 |
Preferred stock - authorized shares | 36,000,000 | 36,000,000 |
Preferred stock - outstanding shares | 0 | 0 |
Common stock - par value | $ 0.1 | $ 0.1 |
Common stock - authorized shares | 200,000,000 | 200,000,000 |
Common stock - issued shares | 143,410,000 | 146,167,000 |
Treasury Stock, Shares | 3,103,000 | 0 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities | ||
Net income | $ 91 | $ 141 |
(Loss) income from discontinued operations, net of tax | (10) | 14 |
Income from continuing operations | 101 | 127 |
Adjustments to reconcile net income from continuing operations to net cash: | ||
Depreciation, depletion and amortization | 65 | 67 |
Loss on extinguishment of debt | 22 | 4 |
Recovery of receivable | 0 | (3) |
Share-based compensation expense | 9 | 9 |
Deferred income taxes | 48 | 58 |
Gain on asset dispositions | (1) | (10) |
Income from equity method investments | (27) | (23) |
Dividends received from equity method investments | 23 | 18 |
Pension settlement | 7 | 2 |
Change in operating assets and liabilities | (117) | (86) |
Other, net | (1) | (12) |
Net cash provided by operating activities of continuing operations | 129 | 151 |
Net cash (used for) provided by operating activities of discontinued operations | (1) | 13 |
Net cash provided by operating activities of continuing operations | 128 | 164 |
Investing Activities | ||
Purchases of marketable securities | (54) | (167) |
Sales or maturities of marketable securities | 53 | 187 |
Capital expenditures | (72) | (26) |
Net proceeds from asset dispositions | 2 | 12 |
Return of capital | 0 | 1 |
Insurance proceeds | 1 | 0 |
Return of restricted cash | 0 | 9 |
Net cash (used for) provided by investing activities of continuing operations | (70) | 16 |
Net cash provided by (used for) investing activities of discontinued operations | 6 | (2) |
Net cash (used for) provided by investing activities | (64) | 14 |
Financing Activities | ||
Issuance of debt | 500 | 0 |
Repayment of debt | (520) | (141) |
Payment of debt issuance fees | (8) | 0 |
Issuance of common stock | 3 | 2 |
Repurchase of common stock | (97) | 0 |
Repurchases of common stock to satisfy employee tax withholding obligations | (4) | (2) |
Net cash used for financing activities of continuing operations | (126) | (141) |
Effect of exchange rate changes on cash from continuing operations | 6 | 0 |
Net (decrease) increase in cash and cash equivalents from continuing operations | (61) | 26 |
Net increase in cash and cash equivalents from discontinued operations | 5 | 11 |
Net (decrease) increase in cash and cash equivalents from continuing operations | (56) | 37 |
Cash and cash equivalents at beginning of period | 427 | 442 |
Cash and cash equivalents at end of period | 371 | 479 |
Supplemental Cash Flow Disclosures: | ||
Interest paid, net of capitalized interest | 48 | 76 |
Income taxes paid, net of refunds received | 9 | 5 |
Noncash Investing and Financing Activities: | ||
Amount in accounts payable for capital expenditures | 7 | 4 |
Reversal of USG Boral Building Products earnout | $ 0 | $ (24) |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements | Organization, Consolidation and Presentation of Financial Statements PREPARATION OF FINANCIAL STATEMENTS We prepared the accompanying unaudited condensed 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 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, 2017 are not necessarily indicative of the results of operations to be expected for the entire year. Certain reclassifications have been made to prior year amounts in order to conform with current year presentation. On our condensed consolidated statements of cash flows, we condensed the increase/decrease in working capital, other assets, pension and postretirement benefits, and other liabilities into "Change in operating assets and liabilities". In conjunction with the sale of L&W Supply Corporation, or L&W, which was completed on October 31, 2016 to American Builders & Contractors Supply Co., Inc., or ABC Supply, L&W is presented as discontinued operations. The results of L&W, which consisted of our Distribution segment, have been excluded from segment results. The 2016 results of our Gypsum and Ceilings segments have been revised to reflect only the sales of USG products from Gypsum and Ceilings to L&W that were sold by L&W to third party customers prior to June 30, 2016 . All sales to L&W subsequent to the close of the transaction are included in net sales on our condensed consolidated statements of income. See Note 2 for further discussion. Our segments are structured around our key products and business units: Gypsum, Ceilings and USG Boral Building Products, or UBBP. Our Gypsum reportable segment is an aggregation of the operating segments of the gypsum businesses in the United States, Canada, Mexico, and Latin America and our mining operation in Canada, which we indefinitely idled in the third quarter of 2016. Gypsum manufactures products throughout the United States, Canada and Mexico. These products include USG Sheetrock ® brand gypsum wallboard, Sheetrock ® brand joint compound, Durock ® brand cement board, Levelrock ® brand gypsum underlayment, Fiberock ® brand backerboard, Securock ® brand glass mat sheathing used for building exteriors, Securock ® brand gypsum fiber and glass mat panels used as roof cover board and USG Structural Panels. Our Ceilings reportable segment is an aggregation of the operating segments of the ceilings businesses in the United States, Canada, Mexico, and Latin America. Ceilings manufactures ceiling tile in the United States and ceiling grid in the United States and Canada. UBBP is our 50/50 joint ventures with Boral Limited, or Boral. UBBP manufactures, distributes and sells certain building products, mines raw gypsum and sells natural and synthetic gypsum throughout Asia, Australasia and the Middle East. These condensed consolidated 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, 2016 , which we filed with the SEC on February 8, 2017 . RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS We adopted Accounting Standards Update, or ASU, 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” on January 1, 2017. This ASU simplifies certain aspects of accounting for employee share-based payments. Upon adoption, we recorded to retained earnings a $25 million cumulative-effect adjustment for previously unrecognized excess tax benefits and an immaterial cumulative-effect adjustment for the reversal of cumulative forfeiture estimates to record forfeitures as they occur. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In March 2017, the Financial Accounting Standards Board, or FASB, issued ASU, 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which will require us to disaggregate and present current service cost along with other current compensation costs for employees while presenting other net benefit cost components below operating profit. In addition, under the new ASU, only the service cost component of net benefit cost is eligible for capitalization in our inventory and fixed assets. We will retrospectively adopt the standard on January 1, 2018 for the presentation of service cost and prospectively adopt the capitalization of only service cost into inventory and fixed assets. Select line items from our condensed consolidated statements of income for the three and six months ended June 30, 2017 and the year ended December 31, 2016 which reflect the changes in presentation of net benefit costs are as follows. (millions) Three months ended June 30, 2017 Six months ended June 30, 2017 Year ended December 31, 2016 After Adoption As Reported After Adoption As Reported After Adoption As Reported Gross profit $ 166 $ 168 $ 324 $ 332 $ 700 $ 705 Operating profit 95 96 179 187 396 394 Other net periodic postretirement benefit (costs) 1 — 8 — (2 ) — Net income 36 36 91 91 510 510 We do not expect the adoption of ASU 2017-07 to have a significant impact on our other financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes existing lease guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. We will adopt the new standard on January 1, 2019 using the modified retrospective approach. As a result of the new standard, we will implement a new lease accounting system, new processes and accounting policies. Further, we anticipate the adoption of ASU 2016-02 will have a significant impact to our condensed consolidated balance sheets, condensed consolidated statements of income and disclosures; however, we are unable to quantify the financial statement impact at this time. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequently, the FASB has issued various ASUs to provide further clarification around certain aspects of Topic 606. We will retrospectively adopt the standard on January 1, 2018 using practical expedients. The adoption will not have a significant impact to our condensed consolidated financial statements. However, the ASU will require us to include robust and disaggregated disclosures of revenue and how we satisfy our performance obligations in our notes. |
DIscontinued Operations
DIscontinued Operations | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations The sale of L&W was completed on October 31, 2016. The summarized financial information related to L&W that has been excluded from continuing operations and reported as a discontinued operation is as follows: (millions) Three months ended June 30, Six months ended June 30, 2016 2016 Net sales $ 386 $ 743 Cost of products sold 367 710 Gross profit 19 33 Selling and administrative expenses 8 11 Operating profit 11 22 Income tax expense (4 ) (8 ) Income from discontinued operations $ 7 $ 14 For the three and six months ended June 30, 2017, we recorded a loss of $9 million for L&W and a loss of $1 million for our European operations which were sold in December 2012 to "Loss (income) from discontinued operations". The loss for L&W primarily reflected a pension settlement charge, net of tax, related to lump sum benefits paid to former employees of L&W. Additionally, upon the close of the sale, we entered into a supply agreement with L&W, and for the three and six months ended June 30, 2017, we recorded sales of $134 million and $265 million , respectively, and cash inflows related to payments on trade receivables of $143 million and $252 million , respectively. For the comparable periods in 2016, the sales that were sold by L&W to third party customers through June 30, 2016 were $151 million and $296 million , respectively. |
Equity Method Investments
Equity Method Investments | 6 Months Ended |
Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments Equity method investments as of June 30, 2017 and December 31, 2016 , were as follows: June 30, 2017 December 31, 2016 (dollars in millions) Carrying Value Ownership Percentage Carrying Value Ownership Percentage USG Boral Building Products $ 649 50% $ 621 50% Other equity method investments 7 33% - 50% 7 33% - 50% Total equity method investments $ 656 $ 628 Investment in USG Boral Building Products During the second quarter of 2017 , UBBP paid cash dividends on its earnings through March 2017 of which our 50% share totaled $23 million . We recorded the cash dividend in operating activities on our statements of cash flows. As of June 30, 2017 , the amount of our condensed consolidated retained earnings which represents undistributed earnings from UBBP is $47 million . In the event certain U.S. Dollar denominated performance targets are satisfied by UBBP, we will be obligated to pay Boral an earnout payment of up to $50 million based on performance during the first five years after the closing on February 27, 2014. We have not recorded a liability for this earnout payment as we have concluded that it is currently not probable that the five-year performance target will be achieved. If our conclusion on the probability of achievement changes, we will record a liability representing the present value of the earnout payment with a corresponding increase to our investment. In the second quarter of 2016, we reversed a liability with a corresponding reduction to our investment for an earn-out payment that was based on a three-year performance target. Our underlying net assets in our investments are denominated in a foreign currency, and translation gains or losses will impact the recorded value of our investments. Translation gains or losses recorded in other comprehensive income were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Translation (loss) gain $ (1 ) $ (30 ) $ 23 $ (13 ) Summarized financial information is as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 USG Boral Building Products Net sales $ 287 $ 273 $ 563 $ 502 Gross profit 91 86 177 151 Operating profit 40 41 75 64 Income from continuing operations before income taxes 44 46 82 70 Net income 28 34 54 49 Net income attributable to USG Boral Building Products 28 32 53 46 USG share of income from investment accounted for using the equity method 14 16 27 23 TRANSACTIONS WITH UBBP Our Gypsum segment sells products to UBBP. Total sales to UBBP for the three and six months ended June 30, 2017 and 2016 were immaterial. In 2014, in connection with the formation of UBBP, we contributed our ownership interest in a joint venture in China to UBBP, but retained our loan receivable from this joint venture. As of June 30, 2017 and December 31, 2016 , the loan receivable, including interest, totaled $14 million and $15 million , respectively, and is included in "Other assets" on our accompanying condensed consolidated balance sheets. |
Segments
Segments | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segments | Segments Our operations are organized into three reportable segments: Gypsum, Ceilings and UBBP. As discussed in Note 2 , the results of L&W for the three and six months ended June 30, 2016 are presented as discontinued operations. Additionally, the results of our Gypsum and Ceilings segments for the three and six months ended June 30, 2016 have been revised to reflect only the sales of USG products from Gypsum and Ceilings to L&W that had been sold by L&W to third party customers prior to June 30, 2016 . See Note 3 for segment results for UBBP. Segment results for our Gypsum and Ceilings segments were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Net Sales : Gypsum $ 688 $ 636 $ 1,337 $ 1,264 Ceilings 126 135 246 256 Eliminations (3 ) (2 ) (5 ) (4 ) Total $ 811 $ 769 $ 1,578 $ 1,516 Operating Profit (Loss) : Gypsum $ 90 $ 112 $ 181 $ 221 Ceilings 23 32 46 60 Corporate (17 ) (22 ) (40 ) (43 ) Total $ 96 $ 122 $ 187 $ 238 |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities Marketable securities are classified as available-for-sale securities and reported at fair value, with unrealized gains and losses excluded from earnings and reported in " Accumulated other comprehensive loss ", or AOCI, on our accompanying condensed consolidated balance sheets. Proceeds received from sales or maturities of marketable securities were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Proceeds received $ 31 $ 103 $ 53 $ 187 Our investments in marketable securities consisted of the following: As of June 30, 2017 As of December 31, 2016 (millions) Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt securities $ 62 $ 62 $ 69 $ 69 U.S. government and agency debt securities 10 10 14 14 Non-U.S. government debt securities 1 1 — — Asset-backed debt securities 8 8 2 2 Certificates of deposit 11 11 6 6 Total marketable securities $ 92 $ 92 $ 91 $ 91 The realized and unrealized gains and losses for the three and six months ended June 30, 2017 and 2016 were immaterial. Cost basis for securities sold are determined on a first-in-first-out basis. Contractual maturities of marketable securities as of June 30, 2017 were as follows: (millions) Amortized Cost Fair Value Due in 1 year or less $ 59 $ 59 Due in 1-5 years 33 33 Total marketable securities $ 92 $ 92 Actual maturities may differ from the contractual maturities because issuers of the securities may have the right to prepay them. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt Total debt consisted of the following: (millions) June 30, December 31, 4.875% senior notes due 2027 $ 500 $ — 5.5% senior notes due 2025 350 350 7.75% senior notes due 2018 — 500 Industrial revenue bonds (due 2028 through 2034) 239 239 Total $ 1,089 $ 1,089 Less: Unamortized debt issuance costs 12 6 Total $ 1,077 $ 1,083 ISSUANCE AND REPURCHASE OF SENIOR NOTES During the second quarter of 2017, we issued $500 million of 4.875% Senior Notes due 2027, referred to as our 4.875% Notes. The net proceeds from the issuance of these notes and cash on hand were used to fund the repurchase of our 7.75% Senior Notes due 2018, referred to as our 7.75% Notes, and all related costs and expenses. We deferred $7 million of debt issuance costs that are being amortized to interest expense over the term of the 4.875% Notes. Our obligations under the 4.875% Notes are guaranteed on a senior unsecured basis by certain of our domestic subsidiaries. The notes are redeemable in whole or in part at any time at our option prior to June 1, 2022 at the applicable "make-whole" redemption price or on or after June 1, 2022 at stated redemption prices beginning at 102.438% of the principal amount of the notes being redeemed plus any accrued and unpaid interest on the principal amount being redeemed through the redemption date. The 4.875% Notes contain a provision the same as or similar to the provision in our other senior notes that requires us to offer to purchase the notes at 101% of their principal amount (plus accrued and unpaid interest) in the event of a change in control. The indenture governing the 4.875% Notes contains events of default, covenants and restrictions that are substantially the same as those governing our other senior notes, including a limitation on our ability and the ability of certain of our subsidiaries to create or incur secured indebtedness. We repurchased the 7.75% Notes through both a cash tender offer and a subsequent notice of redemption for aggregate consideration of $536 million , including premiums of $20 million and accrued interest of $16 million . In the three and six months ended June 30, 2017, we recorded a pre-tax loss on the early extinguishment of debt of $21 million . In the first six months of 2016, we repurchased $137 million of our 6.3% Senior Notes due 2016, or our 6.3% Notes, for aggregate consideration of $144 million , including premiums of $4 million and accrued interest of $3 million . We recorded a pre-tax loss on early extinguishment of debt of $4 million , of which $2 million occurred in the second quarter of 2016. CREDIT FACILITY In the second quarter of 2017, we amended and restated our credit facility agreement to, among other things, increase the maximum borrowing limit from $180 million to $220 million . As a result, we recorded a pre-tax loss on extinguishment of debt of $1 million in both the three and six months ended June 30, 2017. Our amended and restated agreement requires us to maintain a minimum fixed charge coverage ratio in the event excess availability falls below a minimum threshold. Because our excess borrowing availability as of June 30, 2017 of $189 million exceeds this threshold, the requirement to maintain the minimum fixed charge coverage ratio is not applicable. As of June 30, 2017 , we were in compliance with the covenants contained in our credit facility. As of June 30, 2017 and during the quarter then-ended, there were no borrowings under the facility. Had there been any borrowings as of that date, the applicable interest rate would have been 2.30% for loans in the U.S. and 2.07% for loans in Canada. Outstanding letters of credit totaled $31 million as of June 30, 2017 . OTHER (millions) June 30, December 31, Fair value of debt $ 1,125 $ 1,129 Accrued interest 13 31 The fair values of our debt were determined utilizing unadjusted prices from independent pricing services and are classified as Level 2. See Note 8 for further discussion on fair value measurements. The vendors’ methodologies utilize various forms of market data, including but not limited to, trade data, yield, spreads, bids and offers. We review the values provided by the independent pricing service for reasonableness by comparing the valuations received from the independent pricing service to valuations from at least one other observable source. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments We use derivative instruments to manage selected commodity price and foreign currency exposures as described below. We do not use derivative instruments for speculative trading purposes, and we typically do not hedge beyond six years. Cash flows from derivative instruments are included in operating activities in our condensed consolidated statements of cash flows. Gains and losses on contracts designated as cash flow hedges are reclassified into earnings when the underlying forecasted transactions affect earnings. For contracts designated as cash flow hedges, we reassess the probability of the underlying forecasted transactions occurring on a quarterly basis. Derivative Instruments Type Hedged Item Aggregate Notional Amount Contracts Maturing Through Commodity Natural gas swaps Purchases of natural gas 38 million mmBTUs* December 31, 2022 Foreign Exchange Forward contracts Purchases of products and services denominated in a foreign currency $111 million December 31, 2018 * - millions of British Thermal Units COUNTERPARTY RISK, MASTER NETTING ARRANGEMENTS AND BALANCE SHEET OFFSETTING We are exposed to credit losses in the event of nonperformance by the counterparties to our derivative instruments. As of June 30, 2017 , our derivatives were in a $10 million net liability position. All of our counterparties have investment grade credit ratings; accordingly, we anticipate that they will be able to fully satisfy their obligations under the contracts. All of our derivative contracts are governed by master netting agreements negotiated between us and the counterparties that reduce our counterparty credit exposure. The agreements outline the conditions (such as credit ratings and net derivative fair values) upon which we, or the counterparties, are required to post collateral. As required by certain of our agreements, we had $7 million of collateral posted with our counterparties related to our derivatives as of June 30, 2017 . Amounts paid as cash collateral are included in "Receivables" on our accompanying condensed consolidated balance sheets. We have not adopted an accounting policy to offset fair value amounts related to derivative contracts under our master netting arrangements; therefore, individual derivative contracts are reflected on a gross basis, as either assets or liabilities, on our accompanying condensed consolidated balance sheets, based on their fair value as of the balance sheet date. FINANCIAL STATEMENT INFORMATION The following are the pretax effects of derivative instruments on the condensed consolidated statements of income for the three months ended June 30, 2017 and 2016 . 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 $ (1 ) $ 7 Cost of products sold $ (1 ) $ (5 ) Foreign exchange contracts (3 ) — Cost of products sold — 2 Total $ (4 ) $ 7 $ (1 ) $ (3 ) Location of Gain or (Loss) Amount of Gain or (Loss) Recognized in Income (millions) 2017 2016 Derivatives Not Designated as Hedging Instruments Commodity contracts Cost of products sold $ — $ 1 Total $ — $ 1 The following are the pretax effects of derivative instruments on the condensed consolidated statements of income for the six months ended June 30, 2017 and 2016 . 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 $ (10 ) $ 2 Cost of products sold $ (1 ) $ (10 ) Foreign exchange contracts (3 ) (6 ) Cost of products sold — 4 Total $ (13 ) $ (4 ) $ (1 ) $ (6 ) 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 ) $ — Total $ (1 ) $ — For both commodity contracts and foreign exchange contracts, no ineffectiveness was recorded in the three and six months ended June 30, 2017 and 2016 . The following are the fair values of derivative instruments and the location on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 . Balance Sheet Location Fair Value Balance Sheet Location Fair Value (millions) 6/30/17 12/31/16 6/30/17 12/31/16 Derivatives in Cash Flow Hedging Relationships Commodity contracts Other current assets $ 2 $ 8 Accrued expenses $ 4 $ 4 Commodity contracts Other assets 2 3 Other liabilities 7 5 Foreign exchange contracts Other current assets — 1 Accrued expenses 2 1 Foreign exchange contracts Other assets — — Other liabilities 1 — Total derivatives in cash flow hedging relationships $ 4 $ 12 $ 14 $ 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 $ 4 $ 13 Total liabilities $ 14 $ 10 As of June 30, 2017 , we had no derivatives designated as fair value hedges or net investment hedges. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are required to be recorded at fair value. There are three levels of inputs that may be used to measure fair value which are described below along with how USG derives fair value. Level Definition USG Level 1 Quoted prices for identical assets and liabilities in active markets Cash equivalents and equity mutual funds consist of money market funds that are valued based on quoted prices in active markets. Level 2 Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets Marketable securities are valued using a "market value" approach. Values are based on quoted prices and other observable market inputs received from data providers. Derivatives are valued using the "income" approach such as discounted-cash-flow models and readily observable market data. The inputs for the valuation models are obtained from data providers and include end-of-period spot and forward natural gas prices, foreign currency exchange rates, natural gas price volatility and LIBOR and swap rates for discounting the cash flows implied from the derivative contracts. Level 3 Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable No level 3 investments. Our assets and liabilities measured at fair value on a recurring basis were as follows: Level 1 Level 2 Level 3 Total (millions) 6/30/17 12/31/16 6/30/17 12/31/16 6/30/17 12/31/16 6/30/17 12/31/16 Cash equivalents $ 36 $ 38 $ 30 $ 34 $ — $ — $ 66 $ 72 Equity mutual funds 5 5 — — — — 5 5 Marketable securities: Corporate debt securities — — 62 69 — — 62 69 U.S. government and agency debt securities — — 10 14 — — 10 14 Non-U.S. government debt securities — — 1 — — — 1 — Asset-backed debt securities — — 8 2 — — 8 2 Certificates of deposit — — 11 6 — — 11 6 Derivative assets — — 4 13 — — 4 13 Derivative liabilities — — (14 ) (10 ) — — (14 ) (10 ) |
Employee Retirement Plans
Employee Retirement Plans | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plans | Employee Retirement Plans The components of net pension and postretirement benefit costs are summarized in the following table: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Pension: Service cost of benefits earned $ 11 $ 12 $ 21 $ 23 Interest cost on projected benefit obligation 15 17 31 34 Expected return on plan assets (23 ) (22 ) (46 ) (44 ) Settlement (a) 20 — 20 2 Net amortization 5 4 10 9 Net pension cost (b) $ 28 $ 11 $ 36 $ 24 Postretirement: Service cost of benefits earned $ 1 $ — $ 2 $ 1 Interest cost on projected benefit obligation 1 2 2 3 Net amortization (6 ) (7 ) (12 ) (14 ) Net postretirement benefit (c) $ (4 ) $ (5 ) $ (8 ) $ (10 ) (a) The settlement charge recorded for the three and six months ended June 30, 2017 related to lump sum benefits paid, primarily driven by the payments to former L&W employees. (b) Net pension cost, excluding settlement costs, includes expenses allocated to (loss) income from discontinued operations for L&W totaling $2 million and $4 million for the three and six months ended June 30, 2016 , respectively. (c) Net postretirement benefit includes a net benefit allocated to (loss) income from discontinued operations for L&W totaling $1 million and $2 million for the three and six months ended June 30, 2016 , respectively. For the three and six months ended June 30, 2017 , we recorded settlement expense of $20 million as the total lump sum distributions paid by the USG Corporation pension plan to both L&W employees and former USG employees during the first six months of 2017 exceeded the settlement threshold. Upon termination of their employment from USG, all L&W employees had the option to receive a lump sum benefit payment from the USG Corporation pension plan. For the benefits paid to terminated employees of L&W, we recorded a pre-tax loss of $13 million to "(Loss) income from discontinued operations." For the benefits paid to USG retirees, we recorded a pre-tax loss of $5 million to "Costs of products sold" and of $2 million to "Selling and administrative expenses". During the first six months of 2017 , we made cash contributions of $16 million to our domestic supplemental pension plan and $3 million to our pension plan in Canada. In July 2017, we made cash contributions of $50 million to the USG Corporation Retirement Plan Trust. We expect to make total contributions to our pension plans in 2017 of approximately $71 million . |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation During the first six months of 2017 , we granted share-based compensation in the form of market share units, or MSUs, performance shares, and restricted stock units, or RSUs, to eligible participants under our 2016 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 and the service period of the award for awards expected to vest. We record forfeitures as they occur. Awards granted during the first six months of 2017 , weighted average fair value, and assumptions used to determine fair value were as follows: 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 using 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 is based on stock price history immediately prior to grant for a period commensurate with the expected term. (c) The risk-free rate is 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. Terms of the awards granted during the first six months of 2017 were as follows: 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. OTHER MSUs, performance shares, RSUs, and stock options and deferred shares associated with our deferred compensation program for non-employee directors that were not included in the computation of diluted earnings per share for those periods because their inclusion would be anti-dilutive were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 MSUs, performance shares, RSUs and stock options 0.7 1.7 0.9 1.7 Deferred shares associated with a deferred compensation program for non-employee directors — 0.2 — 0.2 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information INVENTORIES Total inventories consisted of the following: (millions) June 30, 2017 December 31, 2016 Finished goods $ 137 $ 132 Work in progress 40 37 Raw materials 72 67 Total $ 249 $ 236 ACCRUED EXPENSES Accrued expenses consisted of the following: (millions) June 30, 2017 December 31, 2016 Self-insurance reserves $ 12 $ 12 Employee compensation 12 35 Interest 13 31 Derivatives 6 5 Pension and other postretirement benefits 24 24 Environmental 17 18 Other 49 50 Total $ 133 $ 175 ASSET RETIREMENT OBLIGATIONS Changes in the liability for asset retirement obligations consisted of the following: Six months ended June 30, (millions) 2017 2016 Balance as of January 1 $ 113 $ 119 Accretion expense 3 4 Liabilities settled — (2 ) Foreign currency translation 1 1 Balance as of June 30 $ 117 $ 122 ASSET DISPOSITIONS In the second quarter of 2016, we recorded a gain of $11 million , or $7 million net of tax, on the sale of a surplus property. The sale relieved the Company of an asset retirement obligation of $2 million . The pre-tax gain was recorded in cost of products sold within our Gypsum segment. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Treasury Stock and Accumulated Other Comprehensive Income (Loss) | TREASURY STOCK Changes in treasury stock for the six months ended June 30, 2017 and 2016 were as follows: 2017 2016 (millions, except share data) Treasury Shares (000) Treasury Stock Treasury Shares (000) Treasury Stock Balance as of January 1 — $ — — $ — Stock issuances 165 5 77 1 Repurchase of common stock for tax withholdings related to stock-based compensation (107 ) (3 ) (77 ) (1 ) Repurchase of common stock under share repurchase program (3,161 ) (97 ) — — Balance as of June 30 (3,103 ) $ (95 ) — $ — ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in the balances of each component of AOCI for the six months ended June 30, 2017 and 2016 were as follows: 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 (8 ) (4 ) 3 (6 ) 48 (12 ) 43 (22 ) Less: Amounts reclassified from AOCI, net of tax (1 ) (4 ) (12 ) (1 ) — — (13 ) (5 ) Net other comprehensive income (loss) (7 ) — 15 (5 ) 48 (12 ) 56 (17 ) Balance as of June 30 $ 20 $ 20 $ (231 ) $ (226 ) $ (118 ) $ (125 ) $ (329 ) $ (331 ) Amounts reclassified from AOCI, net of tax, for the three and six months ended June 30, 2017 and 2016 , were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Derivatives Net reclassification from AOCI for cash flow hedges included in cost of products sold $ (1 ) $ (3 ) $ (1 ) $ (6 ) Less: Income tax benefit on reclassification from AOCI included in income tax expense — (1 ) — (2 ) Net amount reclassified from AOCI $ (1 ) $ (2 ) $ (1 ) $ (4 ) Defined Benefit Plans Net reclassification from AOCI for amortization of prior service cost included in cost of products sold $ (4 ) $ (2 ) $ (4 ) $ (4 ) Net reclassification from AOCI for amortization of prior service cost included in selling and administrative expenses (3 ) — (3 ) 2 Net reclassification from AOCI for amortization of prior service cost included in (loss) income from discontinued operations, net of tax (8 ) — (8 ) — Less: Income tax benefit on reclassification from AOCI included in income tax expense (3 ) (1 ) (3 ) (1 ) Net amount reclassified from AOCI $ (12 ) $ (1 ) $ (12 ) $ (1 ) We estimate that we will reclassify a net $3 million after-tax loss on derivatives from AOCI to earnings within the next 12 months. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax expense and effective tax rate was as follows: Three months ended June 30, Six months ended June 30, (dollars in millions) 2017 2016 2017 2016 Income tax expense $ 20 $ 34 $ 49 $ 60 Effective tax rate 30.3 % 33.7 % 32.7 % 32.1 % The income tax expense for all periods presented reflected taxes from federal, foreign, state and local jurisdictions. Our effective tax rates were lower than the U.S. statutory rate primarily because of earnings realized in countries that had lower statutory tax rates and our equity method income. Our effective tax rate in the future will depend on the portion of our profits earned within and outside the United States. As of June 30, 2017 , we had federal net operating loss, or NOL, carryforwards of approximately $791 million that are available to offset future federal taxable income and will expire in the years 2029 through 2032 , none of which are currently subject to Internal Revenue Code limitations under Section 382. In addition, as of that date, we had federal alternative minimum tax, or AMT, credit carryforwards of approximately $45 million that are available to reduce future regular federal income taxes over an indefinite period and foreign tax credit carryforwards of $146 million that are available to offset future federal taxable income and expire in the years 2022 through 2026. As of December 31, 2016, the foreign tax credits were $143 million and are attributable to tax planning strategies to optimize foreign tax credit utilization and management’s intention to amend its tax returns for the tax years 2012 through 2014 in order to claim credits for previously deducted foreign tax. In order to fully realize these U.S. federal net deferred tax assets, taxable income of approximately $1.336 billion would need to be generated during the period before their expiration. As of June 30, 2017 , we had a gross deferred tax asset of $167 million related to our state NOLs and tax credit carryforwards. The NOLs will expire if unused in years 2018 through 2032. To the extent that we do not generate sufficient state taxable income within the statutory carryforward periods to utilize the NOL and tax credit carryforwards in these states, they will expire unused. During the first six months of 2017 , the valuation allowance against our deferred tax assets was $51 million , which was unchanged from December 31, 2016. The Internal Revenue Code imposes limitations on a corporation’s ability to utilize NOLs if it experiences an “ownership change” which can 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 that may be carried over to later years within the allowed NOL carryforward period. Over the entire carryforward period, we may not be able to use all our NOLs due to the aforementioned annual limitation. If an ownership change had occurred as of June 30, 2017 , our annual U.S. federal NOL utilization would have been limited to approximately $87 million per year. |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation WALLBOARD PRICING LAWSUITS In the first quarter of 2015, USG, United States Gypsum Company, L&W Supply Corporation, and 7 other wallboard manufacturers were named as defendants in a lawsuit filed in federal court in California by 12 homebuilders 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. The lawsuit was transferred to the United States District Court for the Eastern District of Pennsylvania under the title In re: Domestic Drywall Antitrust Litigation, MDL No. 2437. In the second quarter of 2016, the Court dismissed with prejudice the portions of the homebuilders’ complaint alleging a conspiracy in 2014 and 2015, ruling that there were insufficient factual allegations to allow such a claim to go forward. The homebuilders' claims alleging a conspiracy prior to 2014 have not been dismissed, and the case proceeds as to those claims. USG has agreed to defend and indemnify L&W Supply Corporation with regard to this matter. Beginning in the third quarter of 2013, class action lawsuits making similar allegations with regard to Canada were filed in Quebec, Ontario and British Columbia courts on behalf of purchasers of wallboard in Canada and naming USG Corporation, United States Gypsum Company, CGC Inc., and other wallboard manufacturers as defendants. We believe that the cost, if any, of resolving the homebuilders’ lawsuit and Canadian class action litigation 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 certain 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, 2017 and December 31, 2016 , we had accruals of $17 million and $18 million , respectively, 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. |
Gypsum Transportation Limited
Gypsum Transportation Limited | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure [Text Block] | Gypsum Transportation Limited We exited our shipping operations in the second quarter of 2015. In November 2015, we entered into a release and debt settlement agreement to recover a portion of our loss incurred when our former trading partner ceased performing under the contract. We recorded a recovery of receivable of $8 million in the first quarter of 2016, which is presented as $3 million within "Recovery of receivable", $1 million within "Interest income" and $4 million within "Other (expense) income, net" on our condensed consolidated statement of income. |
Organization, Consolidation a23
Organization, Consolidation and Presentation of Financial Statements Presentation of Financial Statements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of New Accounting Pronouncements Not yet Adopted | Select line items from our condensed consolidated statements of income for the three and six months ended June 30, 2017 and the year ended December 31, 2016 which reflect the changes in presentation of net benefit costs are as follows. (millions) Three months ended June 30, 2017 Six months ended June 30, 2017 Year ended December 31, 2016 After Adoption As Reported After Adoption As Reported After Adoption As Reported Gross profit $ 166 $ 168 $ 324 $ 332 $ 700 $ 705 Operating profit 95 96 179 187 396 394 Other net periodic postretirement benefit (costs) 1 — 8 — (2 ) — Net income 36 36 91 91 510 510 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The summarized financial information related to L&W that has been excluded from continuing operations and reported as a discontinued operation is as follows: (millions) Three months ended June 30, Six months ended June 30, 2016 2016 Net sales $ 386 $ 743 Cost of products sold 367 710 Gross profit 19 33 Selling and administrative expenses 8 11 Operating profit 11 22 Income tax expense (4 ) (8 ) Income from discontinued operations $ 7 $ 14 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Summarized financial information is as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 USG Boral Building Products Net sales $ 287 $ 273 $ 563 $ 502 Gross profit 91 86 177 151 Operating profit 40 41 75 64 Income from continuing operations before income taxes 44 46 82 70 Net income 28 34 54 49 Net income attributable to USG Boral Building Products 28 32 53 46 USG share of income from investment accounted for using the equity method 14 16 27 23 Equity method investments as of June 30, 2017 and December 31, 2016 , were as follows: June 30, 2017 December 31, 2016 (dollars in millions) Carrying Value Ownership Percentage Carrying Value Ownership Percentage USG Boral Building Products $ 649 50% $ 621 50% Other equity method investments 7 33% - 50% 7 33% - 50% Total equity method investments $ 656 $ 628 Translation gains or losses recorded in other comprehensive income were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Translation (loss) gain $ (1 ) $ (30 ) $ 23 $ (13 ) |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Net sales and operating profit (loss) by segment | Segment results for our Gypsum and Ceilings segments were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Net Sales : Gypsum $ 688 $ 636 $ 1,337 $ 1,264 Ceilings 126 135 246 256 Eliminations (3 ) (2 ) (5 ) (4 ) Total $ 811 $ 769 $ 1,578 $ 1,516 Operating Profit (Loss) : Gypsum $ 90 $ 112 $ 181 $ 221 Ceilings 23 32 46 60 Corporate (17 ) (22 ) (40 ) (43 ) Total $ 96 $ 122 $ 187 $ 238 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in marketable securities | Our investments in marketable securities consisted of the following: As of June 30, 2017 As of December 31, 2016 (millions) Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt securities $ 62 $ 62 $ 69 $ 69 U.S. government and agency debt securities 10 10 14 14 Non-U.S. government debt securities 1 1 — — Asset-backed debt securities 8 8 2 2 Certificates of deposit 11 11 6 6 Total marketable securities $ 92 $ 92 $ 91 $ 91 Proceeds received from sales or maturities of marketable securities were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Proceeds received $ 31 $ 103 $ 53 $ 187 |
Contractual maturities of marketable securities | Contractual maturities of marketable securities as of June 30, 2017 were as follows: (millions) Amortized Cost Fair Value Due in 1 year or less $ 59 $ 59 Due in 1-5 years 33 33 Total marketable securities $ 92 $ 92 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Total debt consisted of the following: (millions) June 30, December 31, 4.875% senior notes due 2027 $ 500 $ — 5.5% senior notes due 2025 350 350 7.75% senior notes due 2018 — 500 Industrial revenue bonds (due 2028 through 2034) 239 239 Total $ 1,089 $ 1,089 Less: Unamortized debt issuance costs 12 6 Total $ 1,077 $ 1,083 |
Other debt disclosure | (millions) June 30, December 31, Fair value of debt $ 1,125 $ 1,129 Accrued interest 13 31 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | Derivative Instruments Type Hedged Item Aggregate Notional Amount Contracts Maturing Through Commodity Natural gas swaps Purchases of natural gas 38 million mmBTUs* December 31, 2022 Foreign Exchange Forward contracts Purchases of products and services denominated in a foreign currency $111 million December 31, 2018 * - millions of British Thermal Units |
Pretax effects of derivative instruments on consolidated statements of operations | The following are the pretax effects of derivative instruments on the condensed consolidated statements of income for the three months ended June 30, 2017 and 2016 . 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 $ (1 ) $ 7 Cost of products sold $ (1 ) $ (5 ) Foreign exchange contracts (3 ) — Cost of products sold — 2 Total $ (4 ) $ 7 $ (1 ) $ (3 ) Location of Gain or (Loss) Amount of Gain or (Loss) Recognized in Income (millions) 2017 2016 Derivatives Not Designated as Hedging Instruments Commodity contracts Cost of products sold $ — $ 1 Total $ — $ 1 The following are the pretax effects of derivative instruments on the condensed consolidated statements of income for the six months ended June 30, 2017 and 2016 . 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 $ (10 ) $ 2 Cost of products sold $ (1 ) $ (10 ) Foreign exchange contracts (3 ) (6 ) Cost of products sold — 4 Total $ (13 ) $ (4 ) $ (1 ) $ (6 ) 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 ) $ — Total $ (1 ) $ — |
Fair values of derivative instruments and the location on the consolidated balance sheets | The following are the fair values of derivative instruments and the location on our accompanying condensed consolidated balance sheets as of June 30, 2017 and December 31, 2016 . Balance Sheet Location Fair Value Balance Sheet Location Fair Value (millions) 6/30/17 12/31/16 6/30/17 12/31/16 Derivatives in Cash Flow Hedging Relationships Commodity contracts Other current assets $ 2 $ 8 Accrued expenses $ 4 $ 4 Commodity contracts Other assets 2 3 Other liabilities 7 5 Foreign exchange contracts Other current assets — 1 Accrued expenses 2 1 Foreign exchange contracts Other assets — — Other liabilities 1 — Total derivatives in cash flow hedging relationships $ 4 $ 12 $ 14 $ 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 $ 4 $ 13 Total liabilities $ 14 $ 10 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | Our assets and liabilities measured at fair value on a recurring basis were as follows: Level 1 Level 2 Level 3 Total (millions) 6/30/17 12/31/16 6/30/17 12/31/16 6/30/17 12/31/16 6/30/17 12/31/16 Cash equivalents $ 36 $ 38 $ 30 $ 34 $ — $ — $ 66 $ 72 Equity mutual funds 5 5 — — — — 5 5 Marketable securities: Corporate debt securities — — 62 69 — — 62 69 U.S. government and agency debt securities — — 10 14 — — 10 14 Non-U.S. government debt securities — — 1 — — — 1 — Asset-backed debt securities — — 8 2 — — 8 2 Certificates of deposit — — 11 6 — — 11 6 Derivative assets — — 4 13 — — 4 13 Derivative liabilities — — (14 ) (10 ) — — (14 ) (10 ) |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Components of net pension and postretirement benefits costs | The components of net pension and postretirement benefit costs are summarized in the following table: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Pension: Service cost of benefits earned $ 11 $ 12 $ 21 $ 23 Interest cost on projected benefit obligation 15 17 31 34 Expected return on plan assets (23 ) (22 ) (46 ) (44 ) Settlement (a) 20 — 20 2 Net amortization 5 4 10 9 Net pension cost (b) $ 28 $ 11 $ 36 $ 24 Postretirement: Service cost of benefits earned $ 1 $ — $ 2 $ 1 Interest cost on projected benefit obligation 1 2 2 3 Net amortization (6 ) (7 ) (12 ) (14 ) Net postretirement benefit (c) $ (4 ) $ (5 ) $ (8 ) $ (10 ) (a) The settlement charge recorded for the three and six months ended June 30, 2017 related to lump sum benefits paid, primarily driven by the payments to former L&W employees. (b) Net pension cost, excluding settlement costs, includes expenses allocated to (loss) income from discontinued operations for L&W totaling $2 million and $4 million for the three and six months ended June 30, 2016 , respectively. (c) Net postretirement benefit includes a net benefit allocated to (loss) income from discontinued operations for L&W totaling $1 million and $2 million for the three and six months ended June 30, 2016 , respectively. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of awards granted during the period | Awards granted during the first six months of 2017 , weighted average fair value, and assumptions used to determine fair value were as follows: 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 using 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 is based on stock price history immediately prior to grant for a period commensurate with the expected term. (c) The risk-free rate is 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. Terms of the awards granted during the first six months of 2017 were as follows: 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. |
Schedule of antidilutive securities excluded from computation of earnings per share | MSUs, performance shares, RSUs, and stock options and deferred shares associated with our deferred compensation program for non-employee directors that were not included in the computation of diluted earnings per share for those periods because their inclusion would be anti-dilutive were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 MSUs, performance shares, RSUs and stock options 0.7 1.7 0.9 1.7 Deferred shares associated with a deferred compensation program for non-employee directors — 0.2 — 0.2 |
Supplemental Balance Sheet In33
Supplemental Balance Sheet Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of inventories | Total inventories consisted of the following: (millions) June 30, 2017 December 31, 2016 Finished goods $ 137 $ 132 Work in progress 40 37 Raw materials 72 67 Total $ 249 $ 236 |
Schedule of accrued expenses | Accrued expenses consisted of the following: (millions) June 30, 2017 December 31, 2016 Self-insurance reserves $ 12 $ 12 Employee compensation 12 35 Interest 13 31 Derivatives 6 5 Pension and other postretirement benefits 24 24 Environmental 17 18 Other 49 50 Total $ 133 $ 175 |
Changes in the liability for asset retirement obligations | Changes in the liability for asset retirement obligations consisted of the following: Six months ended June 30, (millions) 2017 2016 Balance as of January 1 $ 113 $ 119 Accretion expense 3 4 Liabilities settled — (2 ) Foreign currency translation 1 1 Balance as of June 30 $ 117 $ 122 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Treasury Stock | Changes in treasury stock for the six months ended June 30, 2017 and 2016 were as follows: 2017 2016 (millions, except share data) Treasury Shares (000) Treasury Stock Treasury Shares (000) Treasury Stock Balance as of January 1 — $ — — $ — Stock issuances 165 5 77 1 Repurchase of common stock for tax withholdings related to stock-based compensation (107 ) (3 ) (77 ) (1 ) Repurchase of common stock under share repurchase program (3,161 ) (97 ) — — Balance as of June 30 (3,103 ) $ (95 ) — $ — |
Changes in the balances of each component of AOCI | Changes in the balances of each component of AOCI for the six months ended June 30, 2017 and 2016 were as follows: 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 (8 ) (4 ) 3 (6 ) 48 (12 ) 43 (22 ) Less: Amounts reclassified from AOCI, net of tax (1 ) (4 ) (12 ) (1 ) — — (13 ) (5 ) Net other comprehensive income (loss) (7 ) — 15 (5 ) 48 (12 ) 56 (17 ) Balance as of June 30 $ 20 $ 20 $ (231 ) $ (226 ) $ (118 ) $ (125 ) $ (329 ) $ (331 ) |
Amounts reclassified from AOCI, net of tax | Amounts reclassified from AOCI, net of tax, for the three and six months ended June 30, 2017 and 2016 , were as follows: Three months ended June 30, Six months ended June 30, (millions) 2017 2016 2017 2016 Derivatives Net reclassification from AOCI for cash flow hedges included in cost of products sold $ (1 ) $ (3 ) $ (1 ) $ (6 ) Less: Income tax benefit on reclassification from AOCI included in income tax expense — (1 ) — (2 ) Net amount reclassified from AOCI $ (1 ) $ (2 ) $ (1 ) $ (4 ) Defined Benefit Plans Net reclassification from AOCI for amortization of prior service cost included in cost of products sold $ (4 ) $ (2 ) $ (4 ) $ (4 ) Net reclassification from AOCI for amortization of prior service cost included in selling and administrative expenses (3 ) — (3 ) 2 Net reclassification from AOCI for amortization of prior service cost included in (loss) income from discontinued operations, net of tax (8 ) — (8 ) — Less: Income tax benefit on reclassification from AOCI included in income tax expense (3 ) (1 ) (3 ) (1 ) Net amount reclassified from AOCI $ (12 ) $ (1 ) $ (12 ) $ (1 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Our income tax expense and effective tax rate was as follows: Three months ended June 30, Six months ended June 30, (dollars in millions) 2017 2016 2017 2016 Income tax expense $ 20 $ 34 $ 49 $ 60 Effective tax rate 30.3 % 33.7 % 32.7 % 32.1 % |
Presentation of Financial State
Presentation of Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle in period of adoption | $ 25 | $ 25 | |
Gross profit | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Financial statement line item after adoption | 166 | 324 | $ 700 |
Financial statement line item as reported | 168 | 332 | 705 |
Operating Profit | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Financial statement line item after adoption | 95 | 179 | 396 |
Financial statement line item as reported | 96 | 187 | 394 |
Other net periodic postretirement (benefit) cost [Member] | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Financial statement line item after adoption | 1 | 8 | (2) |
Financial statement line item as reported | 0 | 0 | 0 |
Net income | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Financial statement line item after adoption | 36 | 91 | 510 |
Financial statement line item as reported | $ 36 | $ 91 | $ 510 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Net sales | $ 386 | $ 743 |
Cost of products sold | 367 | 710 |
Gross profit | 19 | 33 |
Selling and administrative expenses | 8 | 11 |
Operating profit | 11 | 22 |
Income tax expense | (4) | (8) |
Income from discontinued operations | $ 7 | $ 14 |
Discontinued Operations (Deta38
Discontinued Operations (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income from discontinued operations | $ 7 | $ 14 | ||||
L&W Supply | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sales to discontinued operations previously eliminated in consolidation | $ 134 | $ 151 | [1] | $ 265 | $ 296 | [1] |
Cash inflow from discontinued operation | 143 | 252 | ||||
Income from discontinued operations | 9 | 9 | ||||
European Operations | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income from discontinued operations | $ 1 | $ 1 | ||||
[1] | sales that were sold by L&W to third party customers through June 30, 2016 |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 656 | $ 628 |
USG Boral Building Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 649 | $ 621 |
Ownership percentage | 50.00% | 50.00% |
Other equity method investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 7 | $ 7 |
Other equity method investments | Minimum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 33.00% | 33.00% |
Other equity method investments | Maximum | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage | 50.00% | 50.00% |
Equity Method Investments (De40
Equity Method Investments (Details 1) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||
Translation (loss) gain | $ 8 | $ (36) | $ 48 | $ (12) |
USG Boral Building Products [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Translation (loss) gain | $ (1) | $ (30) | $ 23 | $ (13) |
Equity Method Investments (De41
Equity Method Investments (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||
USG share of income from investment accounted for using the equity method | $ 27 | $ 23 | ||
USG Boral Building Products | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Gross profit | $ 91 | $ 86 | 177 | 151 |
Income from continuing operations before income taxes | 44 | 46 | 82 | 70 |
Net income | 28 | 34 | 54 | 49 |
Net income attributable to USG Boral Building Products | 28 | 32 | 53 | 46 |
USG share of income from investment accounted for using the equity method | 14 | 16 | 27 | 23 |
USG Boral Building Products | USG Boral Building Products | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Net sales | 287 | 273 | 563 | 502 |
Operating profit | $ 40 | $ 41 | $ 75 | $ 64 |
Equity Method Investments (De42
Equity Method Investments (Details Textual) - USD ($) $ in Millions | Feb. 27, 2014 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | ||||
Dividends received from equity method investments | $ 23 | $ 18 | ||
USG Boral Building Products | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership percentage | 50.00% | 50.00% | ||
Dividends received from equity method investments | $ 23 | |||
Undistributed earnings | 47 | |||
Contingent consideration for second performance period | $ 50 | |||
Second performance period for contingent consideration | 5 years | |||
USG Boral Building Products | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Loan receivable from related party | $ 14 | $ 15 |
Segments (Details)
Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net Sales: | ||||
Net sales | $ 811 | $ 769 | $ 1,578 | $ 1,516 |
Operating Profit (Loss): | ||||
Operating profit | 96 | 122 | 187 | 238 |
Operating segments | Gypsum | ||||
Net Sales: | ||||
Net sales | 688 | 636 | 1,337 | 1,264 |
Operating Profit (Loss): | ||||
Operating profit | 90 | 112 | 181 | 221 |
Operating segments | Ceilings | ||||
Net Sales: | ||||
Net sales | 126 | 135 | 246 | 256 |
Operating Profit (Loss): | ||||
Operating profit | 23 | 32 | 46 | 60 |
Corporate | ||||
Operating Profit (Loss): | ||||
Operating profit | (17) | (22) | (40) | (43) |
Eliminations | ||||
Net Sales: | ||||
Net sales | $ (3) | $ (2) | $ (5) | $ (4) |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Proceeds from Sale and Maturity of Marketable Securities | $ 31 | $ 103 | $ 53 | $ 187 |
Marketable Securities (Details
Marketable Securities (Details 1) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Investments in marketable securities | ||
Amortized Cost | $ 92 | $ 91 |
Fair Value | 92 | 91 |
Corporate debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 62 | 69 |
Fair Value | 62 | 69 |
U.S. government and agency debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 10 | 14 |
Fair Value | 10 | 14 |
Non-U.S. government debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 1 | 0 |
Fair Value | 1 | 0 |
Asset-backed debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 8 | 2 |
Fair Value | 8 | 2 |
Certificates of deposit | ||
Investments in marketable securities | ||
Amortized Cost | 11 | 6 |
Fair Value | $ 11 | $ 6 |
Marketable Securities (Detail46
Marketable Securities (Details 2) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Contractual maturities of marketable securities | ||
Due in 1 year or less, amortized cost | $ 59 | |
Due in 1-5 years, amortized cost | 33 | |
Marketable securities, amortized cost | 92 | $ 91 |
Due in 1 year or less, fair value | 59 | |
Due in 1-5 years, fair value | 33 | |
Marketable securities, fair value | $ 92 | $ 91 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total debt | $ 1,089 | $ 1,089 |
Deferred financing fees | 12 | 6 |
Long term debt net of unamortized debt issuance costs | $ 1,077 | 1,083 |
4.875% senior notes due 2027 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 4.875% | |
Total debt | $ 500 | $ 0 |
Deferred financing fees | $ 7 | |
5.5% senior notes due 2025 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 5.50% | 5.50% |
Total debt | $ 350 | $ 350 |
7.75% senior notes due 2018 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 7.75% | |
Total debt | $ 0 | $ 500 |
Industrial revenue bonds (due 2028 through 2034) | ||
Debt Instrument [Line Items] | ||
Total debt | $ 239 | $ 239 |
Debt (Details Textual)
Debt (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||||
Deferred financing fees | $ 12 | $ 12 | $ 6 | |||
Loss on extinguishment of debt | 22 | $ 2 | 22 | $ 4 | ||
Fair value of debt | 1,125 | 1,125 | 1,129 | |||
Accrued interest | 13 | 13 | $ 31 | |||
Credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt | (1) | (1) | ||||
Maximum borrowing limit | 220 | 220 | $ 180 | |||
Borrowing available under credit facility | 189 | 189 | ||||
Outstanding lines of credit | $ 0 | $ 0 | ||||
Interest rate at period end for line of credit facility | 2.30% | 2.30% | ||||
Amount of letters of credit outstanding | $ 31 | $ 31 | ||||
CGC Credit Facility CAD | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate at period end for line of credit facility | 2.07% | 2.07% | ||||
4.875% senior notes due 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Face amount of debt | $ 500 | $ 500 | ||||
Debt instrument interest rate | 4.875% | 4.875% | ||||
Deferred financing fees | $ 7 | $ 7 | ||||
Redemption price percentage | 102.438% | |||||
Amount of premium associated with contractual redemption upon change in control | 101.00% | |||||
7.75% senior notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument interest rate | 7.75% | |||||
Amount paid in consideration of debt repurchase | $ 536 | $ 536 | ||||
Premiums paid on repurchased debt | 20 | 20 | ||||
Accrued interest paid on repurchased debt | 16 | 16 | ||||
Loss on extinguishment of debt | $ (21) | $ (21) | ||||
6.3% senior notes due 2016 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument interest rate | 6.30% | 6.30% | ||||
Amount paid in consideration of debt repurchase | $ 144 | $ 144 | ||||
Premiums paid on repurchased debt | 4 | 4 | ||||
Accrued interest paid on repurchased debt | 3 | 3 | ||||
Loss on extinguishment of debt | $ 2 | $ 4 | ||||
Repurchase of outstanding debt | $ 137 | $ 137 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Derivatives in Cash Flow Hedging Relationships | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion) | $ (4) | $ 7 | $ (13) | $ (4) |
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | (1) | (3) | (1) | (6) |
Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Cash flow hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion) | (1) | 7 | (10) | 2 |
Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Cost of products sold | Cash flow hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | (1) | (5) | (1) | (10) |
Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Cash flow hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion) | (3) | 0 | (3) | (6) |
Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Cost of products sold | Cash flow hedging | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | 0 | 2 | 0 | 4 |
Derivatives Not Designated as Hedging Instruments | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | 0 | 1 | (1) | 0 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | Cost of products sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ 0 | $ 1 | $ (1) | $ 0 |
Derivative Instruments (Detai50
Derivative Instruments (Details 1) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 4 | $ 13 |
Derivative liabilities | 14 | 10 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 1 |
Derivative liabilities | 0 | 0 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 1 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 0 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 4 | 12 |
Derivative liabilities | 14 | 10 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 2 | 8 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 2 | 3 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 4 | 4 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 7 | 5 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 1 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 2 | 1 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 1 | $ 0 |
Derivative Instruments (Detai51
Derivative Instruments (Details Textual) MMBTU in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)MMBTU | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)MMBTU | Jun. 30, 2016USD ($) | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Typical hedging period | 6 years | ||||
Net liability aggregate fair value | $ 10,000,000 | $ 10,000,000 | |||
Collateral provided to counterparties related to derivatives | $ 7,000,000 | $ 7,000,000 | |||
Cash flow hedging | Commodity contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Nonmonetary notional amount of derivatives | MMBTU | [1] | 38 | 38 | ||
Loss on cash flow hedge ineffectiveness | $ 0 | $ 0 | $ 0 | $ 0 | |
Cash flow hedging | Foreign exchange contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Loss on cash flow hedge ineffectiveness | 0 | $ 0 | 0 | $ 0 | |
Purchases of products and services | Cash flow hedging | Foreign exchange contracts | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Notional amounts of foreign exchange forward contracts | $ 111,000,000 | $ 111,000,000 | |||
[1] | * - millions of British Thermal Units |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Assets and liabilities measured at fair value on a recurring basis | ||
Cash equivalents | $ 66 | $ 72 |
Equity mutual funds | 5 | 5 |
Marketable securities | 92 | 91 |
Derivative assets | 4 | 13 |
Derivative liabilities | (14) | (10) |
Corporate debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 62 | 69 |
U.S. government and agency debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 10 | 14 |
Non-U.S. government debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 1 | 0 |
Asset-backed debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 8 | 2 |
Certificates of deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 11 | 6 |
Level 1 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Cash equivalents | 36 | 38 |
Equity mutual funds | 5 | 5 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Corporate debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 1 | U.S. government and agency debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 1 | Non-U.S. government debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 1 | Asset-backed debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 1 | Certificates of deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 2 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Cash equivalents | 30 | 34 |
Equity mutual funds | 0 | 0 |
Derivative assets | 4 | 13 |
Derivative liabilities | (14) | (10) |
Level 2 | Corporate debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 62 | 69 |
Level 2 | U.S. government and agency debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 10 | 14 |
Level 2 | Non-U.S. government debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 1 | 0 |
Level 2 | Asset-backed debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 8 | 2 |
Level 2 | Certificates of deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 11 | 6 |
Level 3 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Cash equivalents | 0 | 0 |
Equity mutual funds | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 3 | Corporate debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 3 | U.S. government and agency debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 3 | Non-U.S. government debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 3 | Asset-backed debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | 0 | 0 |
Level 3 | Certificates of deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities | $ 0 | $ 0 |
Employee Retirement Plans (Deta
Employee Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |||||
Pension | ||||||||
Components of net pension and postretirement benefits costs | ||||||||
Service cost of benefits earned | $ 11 | $ 12 | $ 21 | $ 23 | ||||
Interest cost on projected benefit obligation | 15 | 17 | 31 | 34 | ||||
Expected return on plan assets | (23) | (22) | (46) | (44) | ||||
Settlement | 20 | [1] | 0 | 20 | [1] | 2 | ||
Net amortization | 5 | 4 | 10 | 9 | ||||
Net pension and postretirement cost | 28 | 11 | [2] | 36 | 24 | [2] | ||
Postretirement | ||||||||
Components of net pension and postretirement benefits costs | ||||||||
Service cost of benefits earned | 1 | 0 | 2 | 1 | ||||
Interest cost on projected benefit obligation | 1 | 2 | 2 | 3 | ||||
Net amortization | (6) | (7) | (12) | (14) | ||||
Net pension and postretirement cost | $ (4) | (5) | [3] | (8) | (10) | [3] | ||
(Loss) income from discontinued operations | Pension | ||||||||
Components of net pension and postretirement benefits costs | ||||||||
Settlement | $ 13 | |||||||
Net pension and postretirement cost | 2 | 4 | ||||||
(Loss) income from discontinued operations | Postretirement | ||||||||
Components of net pension and postretirement benefits costs | ||||||||
Net pension and postretirement cost | $ 1 | $ 2 | ||||||
[1] | The settlement charge recorded for the three and six months ended June 30, 2017 related to lump sum benefits paid, primarily driven by the payments to former L&W employees. | |||||||
[2] | Net pension cost, excluding settlement costs, includes expenses allocated to (loss) income from discontinued operations for L&W totaling $2 million and $4 million for the three and six months ended June 30, 2016, respectively. | |||||||
[3] | Net postretirement benefit includes a net benefit allocated to (loss) income from discontinued operations for L&W totaling $1 million and $2 million for the three and six months ended June 30, 2016, respectively. |
Employee Retirement Plans (De54
Employee Retirement Plans (Details Textual) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jul. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Estimated total contributions in current year | $ 71 | $ 71 | |||||
UNITED STATES | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Contribution by employer | 16 | ||||||
CANADA | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Contribution by employer | 3 | ||||||
Pension Plan [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Settlement | $ (20) | [1] | $ 0 | (20) | [1] | $ (2) | |
(Loss) income from discontinued operations | Pension Plan [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Settlement | (13) | ||||||
Cost of products sold | Pension Plan [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Settlement | (5) | ||||||
Selling and administrative expenses | Pension Plan [Member] | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Settlement | $ (2) | ||||||
Subsequent Event [Member] | UNITED STATES | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Contribution by employer | $ 50 | ||||||
[1] | The settlement charge recorded for the three and six months ended June 30, 2017 related to lump sum benefits paid, primarily driven by the payments to former L&W employees. |
Share-Based Compensation (Detai
Share-Based Compensation (Details) | 6 Months Ended | |
Jun. 30, 2017USD ($)$ / sharesshares | ||
MSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted | shares | 371,346 | |
Weighted average fair value (a) | $ / shares | $ 35.79 | [1] |
Expected volatility (b) | 32.10% | [2] |
Risk-free rate (c) | 1.39% | [3] |
Expected term (in years) (d) | 2 years 11 months 14 days | [4] |
Expected dividends | $ | $ 0 | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted | shares | 112,732 | |
Weighted average fair value (a) | $ / shares | $ 39.42 | [1] |
Expected volatility (b) | 32.10% | [2] |
Risk-free rate (c) | 1.39% | [3] |
Expected term (in years) (d) | 2 years 11 months 14 days | [4] |
Expected dividends | $ | $ 0 | |
RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted | shares | 49,000 | |
Weighted average fair value (a) | $ / shares | $ 31.36 | [1] |
[1] | Fair value of MSUs and Performance Shares is estimated on the date of grant using the Monte Carlo simulation using the assumptions outlined above. Fair value of RSUs is equal to the closing price of our common stock on the date of grant. | |
[2] | The expected volatility rate is based on stock price history immediately prior to grant for a period commensurate with the expected term. | |
[3] | The risk-free rate is based on zero coupon U.S. government issues at the time of grant. | |
[4] | The expected term represents the period from the valuation date to the end of the performance period. |
Share-Based Compensation (Det56
Share-Based Compensation (Details 1) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
MSUs, performance sharse, RSUs and stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.7 | 1.7 | 0.9 | 1.7 |
Deferred shares associated with a deferred compensation program for non-employee directors | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0.2 | 0 | 0.2 |
Share-Based Compensation (Det57
Share-Based Compensation (Details Textual) | 6 Months Ended |
Jun. 30, 2017 | |
MSUs | |
Share Based Compensation [Abstract] | |
Vesting period | 3 years |
Minimum of range for number of shares earned | 0.00% |
Maximum of range for number of shares earned | 150.00% |
Performance Shares | |
Share Based Compensation [Abstract] | |
Vesting period | 3 years |
Minimum of range for number of shares earned | 0.00% |
Maximum of range for number of shares earned | 200.00% |
RSUs | |
Share Based Compensation [Abstract] | |
Maximum of range for number of shares earned | 100.00% |
Supplemental Balance Sheet In58
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Finished goods | $ 137 | $ 132 |
Work in process | 40 | 37 |
Raw materials | 72 | 67 |
Total | $ 249 | $ 236 |
Supplemental Balance Sheet In59
Supplemental Balance Sheet Information (Details 1) - USD ($) $ in Millions | Jun. 30, 2017 | Dec. 31, 2016 |
Accrued Liabilities, Current [Abstract] | ||
Self-insurance reserves | $ 12 | $ 12 |
Employee compensation | 12 | 35 |
Interest | 13 | 31 |
Derivatives | 6 | 5 |
Pension and other postretirement benefits | 24 | 24 |
Environmental | 17 | 18 |
Other | 49 | 50 |
Total | $ 133 | $ 175 |
Supplemental Balance Sheet In60
Supplemental Balance Sheet Information (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Beginning balance | $ 113 | $ 119 | |
Accretion expense | 3 | 4 | |
Liabilities settled | $ 2 | 0 | 2 |
Foreign currency translation | 1 | 1 | |
Ending balance | $ 122 | $ 117 | $ 122 |
Supplemental Balance Sheet In61
Supplemental Balance Sheet Information (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Pretax gain on surplus property | $ 11 | ||
Net gain on surplus property | 7 | ||
Liabilities settled | $ 2 | $ 0 | $ 2 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ 0 | |
Ending balance | $ (95) | |
Treasury Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | 0 | 0 |
Stock issuances (in shares) | 165 | 77 |
Repurchase of common stock for tax withholdings related to stock based compensation (in shares) | (107) | (77) |
Repurchase of common stock under share repurchase program (in shares) | (3,161) | 0 |
Ending balance (in shares) | (3,103) | 0 |
Beginning balance | $ 0 | $ 0 |
Stock issuances | 5 | 1 |
Repurchase of common stock for tax withholdings related to stock based compensation | (3) | (1) |
Repurchase of common stock under share repurchase program | (97) | 0 |
Ending balance | $ (95) | $ 0 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | $ (385) | $ (314) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 43 | (22) | ||
Less: Amounts reclassified from AOCI, net of tax | (13) | (5) | ||
Other comprehensive income (loss), net of tax | $ 23 | $ (32) | 56 | (17) |
Ending balance | (329) | (331) | (329) | (331) |
Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | 27 | 20 | ||
Other comprehensive income (loss) before reclassifications, net of tax | (8) | (4) | ||
Less: Amounts reclassified from AOCI, net of tax | (1) | (4) | ||
Other comprehensive income (loss), net of tax | (7) | 0 | ||
Ending balance | 20 | 20 | 20 | 20 |
Defined Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (246) | (221) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 3 | (6) | ||
Less: Amounts reclassified from AOCI, net of tax | (12) | (1) | ||
Other comprehensive income (loss), net of tax | 15 | (5) | ||
Ending balance | (231) | (226) | (231) | (226) |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Beginning balance | (166) | (113) | ||
Other comprehensive income (loss) before reclassifications, net of tax | 48 | (12) | ||
Less: Amounts reclassified from AOCI, net of tax | 0 | 0 | ||
Other comprehensive income (loss), net of tax | 48 | (12) | ||
Ending balance | $ (118) | $ (125) | $ (118) | $ (125) |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net reclassification from AOCI included in cost of products sold | $ 643 | $ 576 | $ 1,246 | $ 1,142 |
Net reclassification from AOCI included in selling and administrative expenses | 72 | 71 | 145 | 139 |
Net reclassification from AOCI included in (loss) income from discontinued operations, net of tax | (10) | 7 | (10) | 14 |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | (20) | (34) | (49) | (60) |
Net amount reclassified from AOCI | 36 | 74 | 91 | 141 |
Derivatives | Amounts reclassified from AOCI, net of tax | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net reclassification from AOCI included in cost of products sold | (1) | (3) | (1) | (6) |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | 0 | (1) | 0 | (2) |
Net amount reclassified from AOCI | (1) | (2) | (1) | (4) |
Defined Benefit Plans | Amounts reclassified from AOCI, net of tax | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net reclassification from AOCI included in cost of products sold | (4) | (2) | (4) | (4) |
Net reclassification from AOCI included in selling and administrative expenses | (3) | 0 | (3) | 2 |
Net reclassification from AOCI included in (loss) income from discontinued operations, net of tax | (8) | 0 | (8) | 0 |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | (3) | (1) | (3) | (1) |
Net amount reclassified from AOCI | $ (12) | $ (1) | $ (12) | $ (1) |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) $ in Millions | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Equity [Abstract] | |
Estimated after-tax loss on derivatives to be reclassified from AOCI to earnings within the next 12 months | $ 3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ (20) | $ (34) | $ (49) | $ (60) |
Effective tax rate | 30.30% | 33.70% | 32.70% | 32.10% |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Federal net operating loss carryforwards | $ 791 | |
Federal alternative minimum tax credit carryforwards | 45 | |
Foreign deferred tax assets | 146 | $ 143 |
Minimum taxable income needed to fully realize the U.S. federal net deferred tax assets | 1,336 | |
Deferred tax assets related to state net operating loss and tax credit carryforwards | 167 | |
Valuation allowance on deferred tax assets | $ 51 | |
Percentage of change in ownership | 50.00% | |
Period of change in ownership | 3 years | |
Approximate annual NOL utilization had an ownership change occurred | $ 87 |
Litigation (Details Textual)
Litigation (Details Textual) $ in Millions | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2015Homebuilder |
Commitments and Contingencies Disclosure [Abstract] | |||
Number of Defendants Named in Class Action Lawsuits | 7 | ||
Homebuilders Asserting Individual Claims | 12 | ||
Accrual for probable and reasonably estimable liability for environmental cleanup | $ | $ 17 | $ 18 |
Gypsum Transportation Limited (
Gypsum Transportation Limited (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |||||
Recovered receivable per release and debt settlement agreement | $ 8 | ||||
Recovery of receivable | $ 0 | $ 0 | 3 | $ 0 | $ (3) |
Recovered receivable recorded in interest income | 1 | ||||
Recovered receivable recorded in other income | $ 4 |