Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | USG CORP |
Entity Central Index Key | 757,011 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2018 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q1 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 139,652,659 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 786 | $ 767 |
Cost of products sold | 647 | 608 |
Gross profit | 139 | 159 |
Selling and administrative expenses | 93 | 75 |
Operating profit | 46 | 84 |
Income from equity method investments | 9 | 13 |
Interest expense | (14) | (20) |
Interest income | 1 | 1 |
Other income, net | 3 | 6 |
Income from continuing operations before income taxes | 45 | 84 |
Income tax expense | (9) | (29) |
Income from continuing operations | 36 | 55 |
Income from discontinued operations, net of tax | 1 | 0 |
Net income | $ 37 | $ 55 |
Basic earnings per average common share (in usd per share) | $ 0.26 | $ 0.38 |
Diluted earnings per average common share (in dollars per share) | $ 0.25 | $ 0.37 |
Average common shares (in shares) | 141,105,228 | 146,309,994 |
Dilutive awards under long-term incentive plan (in shares) | 2,703,126 | 2,420,360 |
Average diluted common shares (in shares) | 143,808,354 | 148,730,354 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 37 | $ 55 |
Derivatives qualifying as cash flow hedges: | ||
Income (loss) on derivatives qualifying as cash flow hedges, net of tax of $0 and $3, respectively | 0 | (6) |
Less: Reclassification adjustment for income (loss) on derivatives included in net income, net of tax of $0 in all periods | 0 | 0 |
Net derivatives qualifying as cash flow hedges | 0 | (6) |
Pension and postretirement benefits: | ||
Changes in pension and postretirement benefits, net of tax of $0 in all periods | 2 | (1) |
Less: Amortization of prior service cost included in net periodic pension cost, net of tax (benefit) of ($1) and $0, respectively | (1) | 0 |
Net pension and postretirement benefits | 3 | (1) |
Foreign currency translation: | ||
Changes in foreign currency translation, net of tax of $0 in all periods | 12 | 40 |
Other comprehensive income, net of tax | 15 | 33 |
Comprehensive income | $ 52 | $ 88 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivatives Qualifying as Hedges, Tax: | ||
Loss on derivatives qualifying as cash flow hedges, tax (benefit) | $ 0 | $ 3 |
Less: Reclassification adjustment for loss on derivatives included in net income, tax expense (benefit) | 0 | 0 |
Pension and Other Postretirement Benefit Plans, Tax: | ||
Changes in pension and postretirement benefits, tax (benefit) | 0 | 0 |
Net reclassification in AOCI for amortization of prior service cost included other net periodic postretirement benefit | (1) | 0 |
Changes in foreign currency translatio, net of tax | $ 0 | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 261 | $ 394 |
Short-term marketable securities | 62 | 62 |
Receivables (net of reserves 2018 - $10 and 2017 - $9) | 332 | 233 |
Inventories | 255 | 252 |
Income taxes receivable | 16 | 15 |
Other current assets | 30 | 35 |
Total current assets | 956 | 991 |
Long-term marketable securities | 33 | 37 |
Property, plant and equipment (net of accumulated depreciation and depletion - 2018 - $2,082 and 2017 - $2,053) | 1,778 | 1,762 |
Deferred income taxes | 280 | 287 |
Equity method investments | 699 | 686 |
Goodwill and intangible assets | 39 | 43 |
Other assets | 46 | 45 |
Total assets | 3,831 | 3,851 |
Liabilities and Stockholders’ Equity | ||
Accounts payable | 269 | 280 |
Accrued expenses | 131 | 135 |
Total current liabilities | 400 | 415 |
Long-term debt | 1,078 | 1,078 |
Deferred income taxes | 5 | 4 |
Pension and other postretirement benefits | 326 | 326 |
Other liabilities | 183 | 183 |
Total liabilities | 1,992 | 2,006 |
Stockholders' Equity: | ||
Preferred stock | 0 | 0 |
Common stock | 15 | 15 |
Treasury stock at cost | (212) | (169) |
Additional paid-in capital | 3,040 | 3,057 |
Accumulated other comprehensive loss | (374) | (389) |
Retained earnings (accumulated deficit) | (630) | (669) |
Total stockholders’ equity | 1,839 | 1,845 |
Total liabilities and stockholders’ equity | $ 3,831 | $ 3,851 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Reserves on receivables | $ 10 | $ 9 |
Accumulated depreciation | $ 2,082 | $ 2,053 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net income | $ 37 | $ 55 |
Income from discontinued operations, net of tax | 1 | 0 |
Income from continuing operations | 36 | 55 |
Adjustments to reconcile net income from continuing operations to net cash: | ||
Depreciation, depletion and amortization | 36 | 33 |
Share-based compensation expense | 4 | 4 |
Deferred income taxes | 7 | 29 |
Income from equity method investments | (9) | (13) |
Change in operating assets and liabilities | (99) | (138) |
Other, net | 9 | 1 |
Net cash used for operating activities of continuing operations | (16) | (29) |
Net cash provided by (used for) operating activities of discontinued operations | 1 | (1) |
Net cash used for operating activities | (15) | (30) |
Investing Activities | ||
Purchases of marketable securities | (26) | (24) |
Sales or maturities of marketable securities | 28 | 22 |
Capital expenditures | (52) | (39) |
Working capital adjustment from acquisition of business | 2 | 0 |
Net cash used for investing activities of continuing operations | (48) | (41) |
Net cash provided by investing activities of discontinued operations | 0 | 6 |
Net cash used for investing activities | (48) | (35) |
Financing Activities | ||
Issuance of common stock | 4 | 3 |
Repurchase of common stock | (62) | (25) |
Repurchases of common stock to satisfy employee tax withholding obligations | (7) | (3) |
Net cash used for financing activities of continuing operations | (65) | (25) |
Effect of exchange rate changes on cash from continuing operations | (5) | 4 |
Net decrease in cash and cash equivalents from continuing operations | (134) | (91) |
Net increase in cash and cash equivalents from discontinued operations | 1 | 5 |
Net decrease in cash and cash equivalents | (133) | (86) |
Cash and cash equivalents at beginning of period | 394 | 427 |
Cash and cash equivalents at end of period | 261 | 341 |
Supplemental Cash Flow Disclosures: | ||
Interest paid, net of capitalized interest | 12 | 35 |
Income taxes paid, net of refunds received | 2 | 2 |
Noncash Investing and Financing Activities: | ||
Amount in accounts payable for capital expenditures | $ 13 | $ 9 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 3 Months Ended |
Mar. 31, 2018 | |
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 months ended March 31, 2018 are not necessarily indicative of the results of operations to be expected for the entire year. SEGMENTS Our reportable segments are determined considering both qualitative and quantitative metrics for aggregation of the product type within geographies for which discrete financial information is available. We have five reportable segments: U.S. Wallboard and Surfaces, U.S. Performance Materials, U.S. Ceilings, Canada, and USG Boral Building Products, or UBBP. Our U.S. Wallboard and Surfaces, U.S. Performance Materials and U.S. Ceilings reportable segments are identified based on products manufactured and marketed. Our Canada segment is a separately reportable segment, as while it has similar qualitative factors to U.S. operations, it has different quantitative metrics and, therefore, cannot be aggregated. Our operating segments in Mexico and Latin America are included in Other as reconciling items to our consolidated segments. This segment structure was effective for the quarter ended December 31, 2017. Our prior period results have been recast to reflect these changes and present comparative year over year information by segment. See Note 4 , Segments. 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, 2017 , which we filed with the SEC on February 14, 2018 . RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS We adopted Accounting Standard Update, or ASU, 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," in the first quarter of 2018. The ASU allows for the reclassification of stranded tax effects on items resulting from the Tax Cuts and Jobs Act, or the 2017 Tax Act, from accumulated other comprehensive income, or AOCI, to retained earnings. Tax effects unrelated to the 2017 Tax Act are released from AOCI using either the specific identification approach or the portfolio approach based on the nature of the underlying item. We elected not to reclassify the income tax effects of the 2017 Tax Act. We adopted ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” on January 1, 2018 using the practical expedient. This ASU required 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, only the service cost component of net benefit cost is eligible for capitalization in our inventory and fixed assets. We retrospectively adopted the presentation of service cost and prospectively adopted the capitalization of only service cost into inventory and fixed assets. The effect of the adoption of ASU 2017-07 on our condensed consolidated statements of income for the three months ended March 31, 2017 was as follows. (millions) Three months ended March 31, 2017 As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported Gross profit $ 159 $ (5 ) $ 164 Operating profit 84 (7 ) 91 Other income, net 6 7 (1 ) Net income 55 — 55 We adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” and all related amendments on January 1, 2018 using the modified retrospective method using practical expedients. Topic 606 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. Upon adoption, we recorded an increase of $2 million to our opening balance of retained earnings for the cumulative effect of adopting Topic 606. The adjustment related to a change to the point in time at which we record revenue for most customers. Prior period amounts have not been restated and continue to be reported under the legacy accounting guidance of Topic 605. As of and for the three months ended March 31, 2018, the impact of applying Topic 606 as compared to applying Topic 605 is immaterial to our financial statements. In addition to our cumulative effect adjustment, our adoption of Topic 606 resulted in additional quantitative disclosure of revenue by product and in the modification of certain significant accounting policies. See Note 4 , Segments, for our revenue disaggregated by product and the revised polices below. Revenue Recognition We recognize revenue upon transfer of control of our products to the customer which generally occurs upon shipment. We enter into agreements with customers to offer rebates, generally based on achievement of specified sales levels and various marketing allowances that are common industry practice. Reductions to revenue for customer programs and incentive offerings, including promotions and other volume-based incentives, are estimated using the most likely amount method and recorded in the period in which the sale occurs. Provisions for early payment discounts are accrued in the same period in which the sale occurs. We do not have any material payment terms as payment is received shortly after the point of sale. We pay commissions to third parties to obtain contracts. As these contracts are less than one year, these costs are expensed as incurred. Shipping and Handling Costs We include shipping and handling costs billed to customers in net sales. We account for related costs as fulfillment activities and present the costs in cost of products sold when control of our products transfers to the customer. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 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. Subsequently, the FASB has issued various ASUs to provide further clarification around certain aspects of Topic 842. 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 and disclosures. We are currently finalizing our accounting policies and verifying the completeness of our lease population and, thus, we are unable to quantify the financial statement impact at this time. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations And Discontinued Operations and Disposal Groups [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions Acquisition of Ceilings Plus On November 30, 2017, we completed our acquisition of Ceilings Plus for $50 million , net of a working capital adjustment received in the first quarter of 2018. The addition of Ceilings Plus to our U.S. Ceilings segment expands our operations in the specialty ceilings markets. The preliminary fair value of tangible assets acquired, less liabilities assumed, in connection with the Ceilings Plus acquisition was $18 million . The preliminary fair value of intangible assets acquired, which included customer relationships and trade names, totaled $20 million . The resulting preliminary goodwill recorded was $12 million and all is expected to be deductible for tax purposes. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies with the existing U.S. Ceilings product offerings. The primary area of the preliminary purchase price allocation remaining to be valued is the fair value of acquired contracts. We will complete the fair value assessment within the one year measurement period. Discontinued Operations On October 31, 2016, we completed the sale of our L&W Supply, or L&W, distribution business to ABC Supply. Upon the close of the sale, we entered into a supply agreement with L&W, and for the three months ended March 31, 2018 and 2017 , we recorded sales of $95 million and $131 million , respectively, and cash inflows related to payments on trade receivables during those same periods of $104 million and $109 million , respectively. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments Equity method investments as of March 31, 2018 and December 31, 2017 , were as follows: March 31, 2018 December 31, 2017 (dollars in millions) Carrying Value Ownership Percentage Carrying Value Ownership Percentage USG Boral Building Products $ 692 50% $ 679 50% Other equity method investments 7 33% - 50% 7 33% - 50% Total equity method investments $ 699 $ 686 Investment in USG Boral Building Products UBBP is our 50 / 50 joint ventures with Boral Limited, or Boral. We account for our investment in UBBP using the equity method of accounting. As of March 31, 2018 , the amount of our consolidated retained earnings which represents undistributed earnings from UBBP is $70 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 through 2019. 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. 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 March 31, (millions) 2018 2017 Translation gain $ 3 $ 24 Summarized financial information for UBBP is as follows: Three months ended March 31, (millions) 2018 2017 USG Boral Building Products Net sales $ 287 $ 276 Gross profit 79 86 Operating profit 28 35 Income from continuing operations before income taxes 32 38 Net income 20 26 Net income attributable to USG Boral Building Products 19 25 USG share of income from investment accounted for using the equity method 9 13 TRANSACTIONS WITH UBBP Our U.S. Wallboard and Surfaces and U.S. Performance Materials segments sell products to UBBP. Total sales to UBBP for the three months ended March 31, 2018 and 2017 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 March 31, 2018 and December 31, 2017 , the loan receivable, including interest, totaled $13 million and is included in "Other assets" on our accompanying condensed consolidated balance sheets. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segments | Segments During the fourth quarter of 2017, as part of the realignment of our operating structure, we changed the composition of our reportable segments, effective for the quarter ended December 31, 2017. See Note 1, Organization, Consolidation and Presentation of Financial Statements, for additional information regarding our five reportable segments. See Note 3 for segment results for UBBP. Segment results for our U.S. Wallboard and Surfaces, U.S. Performance Materials, U.S. Ceilings and Canada segments were as follows: Three months ended March 31, (millions) 2018 2017 Net Sales : U.S. Wallboard and Surfaces $ 441 $ 469 U.S. Performance Materials 92 86 U.S. Ceilings 138 112 Canada 111 96 Other 60 56 Eliminations (56 ) (52 ) Total $ 786 $ 767 Operating Profit (Loss) : U.S. Wallboard and Surfaces $ 49 $ 79 U.S. Performance Materials 1 6 U.S. Ceilings 19 20 Canada 2 2 Other 4 1 Corporate (29 ) (24 ) Total $ 46 $ 84 Net sales disaggregated by product type were as follows: Three months ended March 31, 2018 (millions) U.S. Wallboard and Surfaces U.S. Performance Materials U.S. Ceilings Canada Other Total Wallboard $ 220 $ — $ — $ 63 $ 18 $ 301 Surfaces and industrial products 145 — — 23 7 175 Underlayment — 65 — 2 9 76 Building envelope and structural — 18 — — — 18 Ceiling tile and grid — — 116 12 9 137 Specialty ceilings — — 16 2 — 18 Other products 24 — — 3 16 43 Total product sales 389 83 132 105 59 768 Other miscellaneous sales (a) 52 9 6 6 1 74 Total sales before eliminations 441 92 138 111 60 842 Eliminations (31 ) (6 ) (12 ) (7 ) — (56 ) Total net sales $ 410 $ 86 $ 126 $ 104 $ 60 $ 786 (a) Other miscellaneous sales primarily includes shipping and handling costs billed to customers. |
Marketable Securities
Marketable Securities | 3 Months Ended |
Mar. 31, 2018 | |
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 AOCI on our accompanying condensed consolidated balance sheets. Our investments in marketable securities consisted of the following: As of March 31, 2018 As of December 31, 2017 (millions) Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt securities $ 67 $ 67 $ 68 $ 68 U.S. government and agency debt securities 4 4 6 6 Asset-backed debt securities 13 13 11 11 Certificates of deposit 11 11 13 13 Municipal debt securities — — 1 1 Total marketable securities $ 95 $ 95 $ 99 $ 99 The realized and unrealized gains and losses for the three months ended March 31, 2018 and 2017 were immaterial. Cost basis for securities sold are determined on a first-in-first-out basis. Contractual maturities of marketable securities as of March 31, 2018 were as follows: (millions) Amortized Cost Fair Value Due in 1 year or less $ 62 $ 62 Due in 1-5 years 33 33 Total marketable securities $ 95 $ 95 Actual maturities may differ from the contractual maturities because issuers of the securities may have the right to prepay them. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Total debt consisted of the following: (millions) March 31, December 31, 4.875% senior notes due 2027 $ 500 $ 500 5.5% senior notes due 2025 350 350 Industrial revenue bonds (due 2028 through 2034) 239 239 Total 1,089 1,089 Less: Unamortized debt issuance costs 11 11 Total $ 1,078 $ 1,078 CREDIT FACILITY Our credit facility agreement has a maximum borrowing limit of $220 million and requires us to maintain a minimum fixed charge coverage ratio in the event excess availability falls below a minimum threshold. Our excess borrowing availability as of March 31, 2018 of $192 million exceeds this threshold, thus the requirement to maintain the minimum fixed charge coverage ratio is not applicable. As of March 31, 2018 , we were in compliance with the covenants contained in our credit facility. As of March 31, 2018 and during the quarter then-ended, there were no borrowings under the facility. Outstanding letters of credit totaled $28 million as of March 31, 2018 . OTHER INFORMATION (millions) March 31, December 31, Fair value of debt $ 1,111 $ 1,134 Accrued interest 13 12 The fair values of our debt were determined utilizing unadjusted prices from independent pricing services and are classified as Level 2. See Note 8, Fair Value Measurements, 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 | 3 Months Ended |
Mar. 31, 2018 | |
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 five 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 40 million mmBTUs* December 31, 2022 Foreign Exchange Forward contracts Purchases of products and services denominated in a foreign currency $107 million December 31, 2019 Foreign Exchange Forward contracts Intercompany Loan $16 million April 27, 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 March 31, 2018 , our derivatives were in a $15 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 $14 million of collateral posted with our counterparties related to our derivatives as of March 31, 2018 . 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 pre-tax effects of derivative instruments on the condensed consolidated statements of income and condensed consolidated statements of comprehensive income for the three months ended March 31, 2018 and 2017 . 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) 2018 2017 2018 2017 Derivatives in Cash Flow Hedging Relationships Commodity contracts $ (3 ) $ (9 ) Cost of products sold $ — $ — Foreign exchange contracts 3 — Cost of products sold — — Total $ — $ (9 ) $ — $ — Location of Gain or (Loss) Amount of Gain or (Loss) Recognized in Income (millions) 2018 2017 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 months ended March 31, 2018 and 2017 . The following are the fair values of derivative instruments and the location on our accompanying condensed consolidated balance sheets and our condensed consolidated statements of comprehensive income as of March 31, 2018 and December 31, 2017 . Balance Sheet Location Fair Value Balance Sheet Location Fair Value (millions) 3/31/18 12/31/17 3/31/18 12/31/17 Derivatives in Cash Flow Hedging Relationships Commodity contracts Other current assets $ 1 $ 1 Accrued expenses $ 7 $ 6 Commodity contracts Other assets 1 1 Other liabilities 11 8 Foreign exchange contracts Other current assets 1 — Accrued expenses 1 3 Foreign exchange contracts Other assets 1 — Other liabilities — — Total derivatives in cash flow hedging relationships $ 4 $ 2 $ 19 $ 17 Derivatives Not Designated as Hedging Instruments Commodity contracts Other current assets $ — $ — Accrued expenses $ — $ — Total derivatives not designated as hedging instruments $ — $ — $ — $ — Total derivatives Total assets $ 4 $ 2 Total liabilities $ 19 $ 17 As of March 31, 2018 , we had no derivatives designated as fair value hedges or net investment hedges. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
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 Valuation Method 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, including certain cash equivalents, 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) 3/31/18 12/31/17 3/31/18 12/31/17 3/31/18 12/31/17 3/31/18 12/31/17 Cash equivalents $ 3 $ 124 $ 37 $ 24 $ — $ — $ 40 $ 148 Equity mutual funds 6 6 — — — — 6 6 Marketable securities: Corporate debt securities — — 67 68 — — 67 68 U.S. government and agency debt securities — — 4 6 — — 4 6 Asset-backed debt securities — — 13 11 — — 13 11 Certificates of deposit — — 11 13 — — 11 13 Municipal debt securities — — — 1 — — — 1 Derivative assets — — 4 2 — — 4 2 Derivative liabilities — — (19 ) (17 ) — — (19 ) (17 ) |
Employee Retirement Plans
Employee Retirement Plans | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, (millions) 2018 2017 Pension: Service cost of benefits earned $ 12 $ 10 Interest cost on projected benefit obligation 16 16 Expected return on plan assets (24 ) (23 ) Net amortization 8 5 Net pension cost $ 12 $ 8 Postretirement: Service cost of benefits earned $ 1 $ 1 Interest cost on projected benefit obligation 1 1 Net amortization (6 ) (6 ) Net postretirement benefit $ (4 ) $ (4 ) Service cost of benefits earned is included in "Costs of products sold" and "Selling and administrative expenses" on our condensed consolidated statements of income. The other components of net pension and postretirement costs are included in "Other income, net". During the first three months of 2018 , we made cash contributions of $1 million to our domestic supplemental pension plan and $1 million to our pension plans in Canada. We expect to make total contributions to our pension plans in 2018 of approximately $60 million . |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation During the first three months of 2018 , 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 three months of 2018 , weighted average fair value, and assumptions used to determine fair value were as follows: MSUs Performance Shares RSUs Awards granted 427,664 103,819 26,000 Weighted average fair value (a) $ 34.22 $ 34.21 $ 33.88 Expected volatility (b) 32.62 % 32.61 % N/A Risk-free rate (c) 2.37 % 2.37 % N/A Expected term (in years) (d) 2.95 2.95 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 utilizing 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 three months of 2018 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 2018 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 to reflect changes in the companies included in the index during the performance period. (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 in certain circumstances. OTHER MSUs, performance shares, RSUs, and stock options 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 March 31, (millions) 2018 2017 MSUs, performance shares, RSUs and stock options — 1.0 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information INVENTORIES Total inventories consisted of the following: (millions) March 31, 2018 December 31, 2017 Finished goods $ 145 $ 140 Work in progress 40 39 Raw materials 70 73 Total $ 255 $ 252 ACCRUED EXPENSES Accrued expenses consisted of the following: (millions) March 31, 2018 December 31, 2017 Self-insurance reserves $ 14 $ 12 Employee compensation 13 17 Interest 13 12 Derivatives 8 9 Pension and other postretirement benefits 17 17 Environmental 16 17 Other 50 51 Total $ 131 $ 135 ASSET RETIREMENT OBLIGATIONS Changes in the liability for asset retirement obligations, which are included in "Other liabilities" on our condensed consolidated balance sheets, consisted of the following: Three months ended March 31, (millions) 2018 2017 Balance as of January 1 $ 118 $ 113 Accretion expense 2 1 Foreign currency translation (1 ) — Balance as of March 31 $ 119 $ 114 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity TREASURY STOCK Changes in treasury stock for the three months ended March 31, 2018 and 2017 were as follows: 2018 2017 (millions, except share data) Treasury Shares (000) Treasury Stock Treasury Shares (000) Treasury Stock Balance as of January 1 (5,571 ) $ (169 ) — $ — Repurchase of common stock for tax withholdings related to stock-based compensation (204 ) (7 ) (107 ) (3 ) Repurchase of common stock under share repurchase program (1,812 ) (62 ) (764 ) (25 ) Stock reissuances 740 26 150 4 Balance as of March 31 (6,847 ) $ (212 ) (721 ) $ (24 ) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in the balances of each component of AOCI for the three months ended March 31, 2018 and 2017 were as follows: Derivatives Defined Benefit Plans Foreign Currency Translation AOCI (millions) 2018 2017 2018 2017 2018 2017 2018 2017 Balance as of January 1 $ 16 $ 27 $ (297 ) $ (246 ) $ (108 ) $ (166 ) $ (389 ) $ (385 ) Other comprehensive income (loss) before reclassifications, net of tax — (6 ) 2 (1 ) 12 40 14 33 Less: Amounts reclassified from AOCI, net of tax — — (1 ) — — — (1 ) — Net other comprehensive income (loss) — (6 ) 3 (1 ) 12 40 15 33 Balance as of March 31 $ 16 $ 21 $ (294 ) $ (247 ) $ (96 ) $ (126 ) $ (374 ) $ (352 ) Amounts reclassified from AOCI, net of tax, for the three months ended March 31, 2018 and 2017 , were as follows: Three months ended March 31, (millions) 2018 2017 Derivatives Net reclassification from AOCI for cash flow hedges included in cost of products sold $ — $ — Less: Income tax benefit on reclassification from AOCI included in income tax expense — — Net amount reclassified from AOCI $ — $ — Defined Benefit Plans Net reclassification in AOCI for amortization of prior service cost included in other income, net (2 ) — Less: Income tax benefit on reclassification from AOCI included in income tax expense (1 ) — Net amount reclassified from AOCI $ (1 ) $ — We estimate that we will reclassify a net $4 million after-tax loss on derivatives from AOCI to earnings within the next 12 months. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Due to the timing of the enactment and the complexity involved in applying the provisions of the 2017 Tax Act, we made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of December 31, 2017. The provisional effect on deferred tax assets and liabilities of the change in tax rates was recognized in earnings in the period ended December 31, 2017, which was when the change was enacted. As part of the 2017 Tax Act's change to a quasi-territorial system, a transition tax was imposed on our accumulated foreign earnings, partially offset by foreign tax credits, which was also recognized in the period ended December 31, 2017. The 2017 Tax Act made significant changes to how foreign tax credits may be realized to offset future tax liabilities. Further clarity may change our anticipated realization of our foreign tax credits. In addition, we may make an election to forgo the use of net operating losses, or NOLs, to offset the impact of the transition tax as allowed under the 2017 Tax Act. The estimate recorded as of December 31, 2017 continues to be our best estimate as of March 31, 2018. As we collect and prepare necessary data and interpret the 2017 Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts. Our income tax expense and effective tax rate for the three months ended March 31 were as follows: Three months ended March 31, (dollars in millions) 2018 2017 Income tax expense $ 9 $ 29 Effective tax rate 20.0 % 34.5 % The income tax expense for all periods presented reflects 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, which is presented net of tax. Our effective tax rate in the future will depend on, among other things, the portion of our profits earned within and outside the United States. As of March 31, 2018 , we had federal NOL carryforwards of approximately $458 million that are available to offset future federal taxable income and will expire in the years 2030 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 credit carryforwards of approximately $19 million that are available to reduce future regular federal income taxes with the full benefit being realized by 2022 as described in the 2017 Tax Act. We have foreign tax credit carryforwards of $224 million that are available to offset future federal taxable income and expire in the years 2022 through 2027. In order to fully realize these U.S. federal net deferred tax assets, taxable income of approximately $1.617 billion would need to be generated during the period before their expiration based on our interpretation of the 2017 Tax Act. As of March 31, 2018 , we had a deferred tax asset of $169 million related to our state NOLs and tax credit carryforwards. The NOLs will expire if unused in years 2018 through 2034. 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. As of March 31, 2018 , the valuation allowance against our deferred tax assets was $175 million , which was unchanged from December 31, 2017. 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 March 31, 2018 , our annual U.S. federal NOL utilization would have been limited to approximately $123 million per year. |
Litigation
Litigation | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation WALLBOARD PRICING LAWSUITS In 2015, USG, our subsidiary United States Gypsum Company, our former subsidiary L&W Supply Corporation, and seven other wallboard manufacturers were named as defendants in a lawsuit filed in federal court in California by twelve 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, United States Gypsum Company, our Canadian subsidiary CGC Inc., or CGC, 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 are involved in environmental cleanups of property that we own or have owned. In addition, we have previously 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 to pay for some part of the cleanup of hazardous waste. In most of these sites, our involvement is expected to be minimal. As of March 31, 2018 and December 31, 2017 , we had accruals of $16 million and $17 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In April 2018, we completed the sale of a surplus property with a gain of $13 million , or $9 million net of tax. The pre-tax gain will be recorded within our U.S. Wallboard and Surfaces segment. Additionally in April 2018, we entered into a definitive agreement to sell our 33% interest in a joint venture in South Africa for approximately $3 million . We will record a loss, net of tax, of $5 million on the sale. The loss is driven primarily by foreign currency losses included in equity that will be recognized upon disposition of the entity and will be recorded within Other in Note 4, Segments. |
Organization, Consolidation a23
Organization, Consolidation and Presentation of Financial Statements Organization, Consolidation and Presentation of Financial Statements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Segments | SEGMENTS Our reportable segments are determined considering both qualitative and quantitative metrics for aggregation of the product type within geographies for which discrete financial information is available. We have five reportable segments: U.S. Wallboard and Surfaces, U.S. Performance Materials, U.S. Ceilings, Canada, and USG Boral Building Products, or UBBP. Our U.S. Wallboard and Surfaces, U.S. Performance Materials and U.S. Ceilings reportable segments are identified based on products manufactured and marketed. Our Canada segment is a separately reportable segment, as while it has similar qualitative factors to U.S. operations, it has different quantitative metrics and, therefore, cannot be aggregated. Our operating segments in Mexico and Latin America are included in Other as reconciling items to our consolidated segments. This segment structure was effective for the quarter ended December 31, 2017. Our prior period results have been recast to reflect these changes and present comparative year over year information by segment. |
Recently Adopted and Recently Issued Accounting Pronouncements | RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS We adopted Accounting Standard Update, or ASU, 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," in the first quarter of 2018. The ASU allows for the reclassification of stranded tax effects on items resulting from the Tax Cuts and Jobs Act, or the 2017 Tax Act, from accumulated other comprehensive income, or AOCI, to retained earnings. Tax effects unrelated to the 2017 Tax Act are released from AOCI using either the specific identification approach or the portfolio approach based on the nature of the underlying item. We elected not to reclassify the income tax effects of the 2017 Tax Act. We adopted ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” on January 1, 2018 using the practical expedient. This ASU required 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, only the service cost component of net benefit cost is eligible for capitalization in our inventory and fixed assets. We retrospectively adopted the presentation of service cost and prospectively adopted the capitalization of only service cost into inventory and fixed assets. The effect of the adoption of ASU 2017-07 on our condensed consolidated statements of income for the three months ended March 31, 2017 was as follows. (millions) Three months ended March 31, 2017 As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported Gross profit $ 159 $ (5 ) $ 164 Operating profit 84 (7 ) 91 Other income, net 6 7 (1 ) Net income 55 — 55 We adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” and all related amendments on January 1, 2018 using the modified retrospective method using practical expedients. Topic 606 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. Upon adoption, we recorded an increase of $2 million to our opening balance of retained earnings for the cumulative effect of adopting Topic 606. The adjustment related to a change to the point in time at which we record revenue for most customers. Prior period amounts have not been restated and continue to be reported under the legacy accounting guidance of Topic 605. As of and for the three months ended March 31, 2018, the impact of applying Topic 606 as compared to applying Topic 605 is immaterial to our financial statements. In addition to our cumulative effect adjustment, our adoption of Topic 606 resulted in additional quantitative disclosure of revenue by product and in the modification of certain significant accounting policies. See Note 4 , Segments, for our revenue disaggregated by product and the revised polices below. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS 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. Subsequently, the FASB has issued various ASUs to provide further clarification around certain aspects of Topic 842. 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 and disclosures. We are currently finalizing our accounting policies and verifying the completeness of our lease population and, thus, we are unable to quantify the financial statement impact at this time. |
Revenue Recognition | Revenue Recognition We recognize revenue upon transfer of control of our products to the customer which generally occurs upon shipment. We enter into agreements with customers to offer rebates, generally based on achievement of specified sales levels and various marketing allowances that are common industry practice. Reductions to revenue for customer programs and incentive offerings, including promotions and other volume-based incentives, are estimated using the most likely amount method and recorded in the period in which the sale occurs. Provisions for early payment discounts are accrued in the same period in which the sale occurs. We do not have any material payment terms as payment is received shortly after the point of sale. We pay commissions to third parties to obtain contracts. As these contracts are less than one year, these costs are expensed as incurred. |
Shipping and Handling Costs | Shipping and Handling Costs We include shipping and handling costs billed to customers in net sales. We account for related costs as fulfillment activities and present the costs in cost of products sold when control of our products transfers to the customer. |
Organization, Consolidation a24
Organization, Consolidation and Presentation of Financial Statements Organization, Consolidation and Presentation of Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements | The effect of the adoption of ASU 2017-07 on our condensed consolidated statements of income for the three months ended March 31, 2017 was as follows. (millions) Three months ended March 31, 2017 As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported Gross profit $ 159 $ (5 ) $ 164 Operating profit 84 (7 ) 91 Other income, net 6 7 (1 ) Net income 55 — 55 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity method investments as of March 31, 2018 and December 31, 2017 , were as follows: March 31, 2018 December 31, 2017 (dollars in millions) Carrying Value Ownership Percentage Carrying Value Ownership Percentage USG Boral Building Products $ 692 50% $ 679 50% Other equity method investments 7 33% - 50% 7 33% - 50% Total equity method investments $ 699 $ 686 Summarized financial information for UBBP is as follows: Three months ended March 31, (millions) 2018 2017 USG Boral Building Products Net sales $ 287 $ 276 Gross profit 79 86 Operating profit 28 35 Income from continuing operations before income taxes 32 38 Net income 20 26 Net income attributable to USG Boral Building Products 19 25 USG share of income from investment accounted for using the equity method 9 13 |
Translation Gain or Losses in Other Comprehensive Income | Translation gains or losses recorded in other comprehensive income were as follows: Three months ended March 31, (millions) 2018 2017 Translation gain $ 3 $ 24 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Net sales and operating profit (loss) by segment | Segment results for our U.S. Wallboard and Surfaces, U.S. Performance Materials, U.S. Ceilings and Canada segments were as follows: Three months ended March 31, (millions) 2018 2017 Net Sales : U.S. Wallboard and Surfaces $ 441 $ 469 U.S. Performance Materials 92 86 U.S. Ceilings 138 112 Canada 111 96 Other 60 56 Eliminations (56 ) (52 ) Total $ 786 $ 767 Operating Profit (Loss) : U.S. Wallboard and Surfaces $ 49 $ 79 U.S. Performance Materials 1 6 U.S. Ceilings 19 20 Canada 2 2 Other 4 1 Corporate (29 ) (24 ) Total $ 46 $ 84 Net sales disaggregated by product type were as follows: Three months ended March 31, 2018 (millions) U.S. Wallboard and Surfaces U.S. Performance Materials U.S. Ceilings Canada Other Total Wallboard $ 220 $ — $ — $ 63 $ 18 $ 301 Surfaces and industrial products 145 — — 23 7 175 Underlayment — 65 — 2 9 76 Building envelope and structural — 18 — — — 18 Ceiling tile and grid — — 116 12 9 137 Specialty ceilings — — 16 2 — 18 Other products 24 — — 3 16 43 Total product sales 389 83 132 105 59 768 Other miscellaneous sales (a) 52 9 6 6 1 74 Total sales before eliminations 441 92 138 111 60 842 Eliminations (31 ) (6 ) (12 ) (7 ) — (56 ) Total net sales $ 410 $ 86 $ 126 $ 104 $ 60 $ 786 (a) Other miscellaneous sales primarily includes shipping and handling costs billed to customers. |
Marketable Securities (Tables)
Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in marketable securities | Our investments in marketable securities consisted of the following: As of March 31, 2018 As of December 31, 2017 (millions) Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt securities $ 67 $ 67 $ 68 $ 68 U.S. government and agency debt securities 4 4 6 6 Asset-backed debt securities 13 13 11 11 Certificates of deposit 11 11 13 13 Municipal debt securities — — 1 1 Total marketable securities $ 95 $ 95 $ 99 $ 99 |
Contractual maturities of marketable securities | Contractual maturities of marketable securities as of March 31, 2018 were as follows: (millions) Amortized Cost Fair Value Due in 1 year or less $ 62 $ 62 Due in 1-5 years 33 33 Total marketable securities $ 95 $ 95 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Total debt consisted of the following: (millions) March 31, December 31, 4.875% senior notes due 2027 $ 500 $ 500 5.5% senior notes due 2025 350 350 Industrial revenue bonds (due 2028 through 2034) 239 239 Total 1,089 1,089 Less: Unamortized debt issuance costs 11 11 Total $ 1,078 $ 1,078 |
Other debt disclosure | (millions) March 31, December 31, Fair value of debt $ 1,111 $ 1,134 Accrued interest 13 12 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 40 million mmBTUs* December 31, 2022 Foreign Exchange Forward contracts Purchases of products and services denominated in a foreign currency $107 million December 31, 2019 Foreign Exchange Forward contracts Intercompany Loan $16 million April 27, 2018 * - millions of British Thermal Units |
Pretax effects of derivative instruments on consolidated statements of operations | The following are the pre-tax effects of derivative instruments on the condensed consolidated statements of income and condensed consolidated statements of comprehensive income for the three months ended March 31, 2018 and 2017 . 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) 2018 2017 2018 2017 Derivatives in Cash Flow Hedging Relationships Commodity contracts $ (3 ) $ (9 ) Cost of products sold $ — $ — Foreign exchange contracts 3 — Cost of products sold — — Total $ — $ (9 ) $ — $ — Location of Gain or (Loss) Amount of Gain or (Loss) Recognized in Income (millions) 2018 2017 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 and our condensed consolidated statements of comprehensive income as of March 31, 2018 and December 31, 2017 . Balance Sheet Location Fair Value Balance Sheet Location Fair Value (millions) 3/31/18 12/31/17 3/31/18 12/31/17 Derivatives in Cash Flow Hedging Relationships Commodity contracts Other current assets $ 1 $ 1 Accrued expenses $ 7 $ 6 Commodity contracts Other assets 1 1 Other liabilities 11 8 Foreign exchange contracts Other current assets 1 — Accrued expenses 1 3 Foreign exchange contracts Other assets 1 — Other liabilities — — Total derivatives in cash flow hedging relationships $ 4 $ 2 $ 19 $ 17 Derivatives Not Designated as Hedging Instruments Commodity contracts Other current assets $ — $ — Accrued expenses $ — $ — Total derivatives not designated as hedging instruments $ — $ — $ — $ — Total derivatives Total assets $ 4 $ 2 Total liabilities $ 19 $ 17 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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) 3/31/18 12/31/17 3/31/18 12/31/17 3/31/18 12/31/17 3/31/18 12/31/17 Cash equivalents $ 3 $ 124 $ 37 $ 24 $ — $ — $ 40 $ 148 Equity mutual funds 6 6 — — — — 6 6 Marketable securities: Corporate debt securities — — 67 68 — — 67 68 U.S. government and agency debt securities — — 4 6 — — 4 6 Asset-backed debt securities — — 13 11 — — 13 11 Certificates of deposit — — 11 13 — — 11 13 Municipal debt securities — — — 1 — — — 1 Derivative assets — — 4 2 — — 4 2 Derivative liabilities — — (19 ) (17 ) — — (19 ) (17 ) |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, (millions) 2018 2017 Pension: Service cost of benefits earned $ 12 $ 10 Interest cost on projected benefit obligation 16 16 Expected return on plan assets (24 ) (23 ) Net amortization 8 5 Net pension cost $ 12 $ 8 Postretirement: Service cost of benefits earned $ 1 $ 1 Interest cost on projected benefit obligation 1 1 Net amortization (6 ) (6 ) Net postretirement benefit $ (4 ) $ (4 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of awards granted during the period | Awards granted during the first three months of 2018 , weighted average fair value, and assumptions used to determine fair value were as follows: MSUs Performance Shares RSUs Awards granted 427,664 103,819 26,000 Weighted average fair value (a) $ 34.22 $ 34.21 $ 33.88 Expected volatility (b) 32.62 % 32.61 % N/A Risk-free rate (c) 2.37 % 2.37 % N/A Expected term (in years) (d) 2.95 2.95 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 utilizing 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 three months of 2018 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 2018 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 to reflect changes in the companies included in the index during the performance period. (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 in certain circumstances. |
Schedule of antidilutive securities excluded from computation of earnings per share | MSUs, performance shares, RSUs, and stock options 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 March 31, (millions) 2018 2017 MSUs, performance shares, RSUs and stock options — 1.0 |
Supplemental Balance Sheet In33
Supplemental Balance Sheet Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of inventories | Total inventories consisted of the following: (millions) March 31, 2018 December 31, 2017 Finished goods $ 145 $ 140 Work in progress 40 39 Raw materials 70 73 Total $ 255 $ 252 |
Schedule of accrued expenses | Accrued expenses consisted of the following: (millions) March 31, 2018 December 31, 2017 Self-insurance reserves $ 14 $ 12 Employee compensation 13 17 Interest 13 12 Derivatives 8 9 Pension and other postretirement benefits 17 17 Environmental 16 17 Other 50 51 Total $ 131 $ 135 |
Changes in the liability for asset retirement obligations | Changes in the liability for asset retirement obligations, which are included in "Other liabilities" on our condensed consolidated balance sheets, consisted of the following: Three months ended March 31, (millions) 2018 2017 Balance as of January 1 $ 118 $ 113 Accretion expense 2 1 Foreign currency translation (1 ) — Balance as of March 31 $ 119 $ 114 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Treasury Stock | Changes in treasury stock for the three months ended March 31, 2018 and 2017 were as follows: 2018 2017 (millions, except share data) Treasury Shares (000) Treasury Stock Treasury Shares (000) Treasury Stock Balance as of January 1 (5,571 ) $ (169 ) — $ — Repurchase of common stock for tax withholdings related to stock-based compensation (204 ) (7 ) (107 ) (3 ) Repurchase of common stock under share repurchase program (1,812 ) (62 ) (764 ) (25 ) Stock reissuances 740 26 150 4 Balance as of March 31 (6,847 ) $ (212 ) (721 ) $ (24 ) |
Changes in the balances of each component of AOCI | Changes in the balances of each component of AOCI for the three months ended March 31, 2018 and 2017 were as follows: Derivatives Defined Benefit Plans Foreign Currency Translation AOCI (millions) 2018 2017 2018 2017 2018 2017 2018 2017 Balance as of January 1 $ 16 $ 27 $ (297 ) $ (246 ) $ (108 ) $ (166 ) $ (389 ) $ (385 ) Other comprehensive income (loss) before reclassifications, net of tax — (6 ) 2 (1 ) 12 40 14 33 Less: Amounts reclassified from AOCI, net of tax — — (1 ) — — — (1 ) — Net other comprehensive income (loss) — (6 ) 3 (1 ) 12 40 15 33 Balance as of March 31 $ 16 $ 21 $ (294 ) $ (247 ) $ (96 ) $ (126 ) $ (374 ) $ (352 ) |
Amounts reclassified from AOCI, net of tax | Amounts reclassified from AOCI, net of tax, for the three months ended March 31, 2018 and 2017 , were as follows: Three months ended March 31, (millions) 2018 2017 Derivatives Net reclassification from AOCI for cash flow hedges included in cost of products sold $ — $ — Less: Income tax benefit on reclassification from AOCI included in income tax expense — — Net amount reclassified from AOCI $ — $ — Defined Benefit Plans Net reclassification in AOCI for amortization of prior service cost included in other income, net (2 ) — Less: Income tax benefit on reclassification from AOCI included in income tax expense (1 ) — Net amount reclassified from AOCI $ (1 ) $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Our income tax expense and effective tax rate for the three months ended March 31 were as follows: Three months ended March 31, (dollars in millions) 2018 2017 Income tax expense $ 9 $ 29 Effective tax rate 20.0 % 34.5 % |
Organization, Consolidation a36
Organization, Consolidation and Presentation of Financial Statements - Segments (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 5 |
Organization, Consolidation a37
Organization, Consolidation and Presentation of Financial Statements - Presentation of Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Gross profit | $ 139 | $ 159 | |
Operating profit | 46 | 84 | |
Other income, net | 3 | 6 | |
Net income | 37 | 55 | |
Retained earnings (accumulated deficit) | (630) | $ (669) | |
Adjustment | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Gross profit | (5) | ||
Operating profit | (7) | ||
Other income, net | 7 | ||
Net income | 0 | ||
As Previously Reported | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Gross profit | 164 | ||
Operating profit | 91 | ||
Other income, net | (1) | ||
Net income | $ 55 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings (accumulated deficit) | $ 2 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Acquisitions (Details) - Ceilings Plus $ in Millions | Nov. 30, 2017USD ($) |
Business Acquisition [Line Items] | |
Purchase price of acquisition | $ 50 |
Fair value of tangible assets acquired, less liabilities assumed | 18 |
Fair value of intangible assets acquired | 20 |
Goodwill, acquired | $ 12 |
Acquisitions and Dispositions39
Acquisitions and Dispositions - Dispositions (Details) - L&W Supply - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sales to discontinued operations previously eliminated in consolidation | $ 95 | $ 131 |
Cash consideration for discontinued operation | $ 104 | $ 109 |
Equity Method Investments (Deta
Equity Method Investments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 699 | $ 686 |
USG Boral Building Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 692 | $ 679 |
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 - Tra
Equity Method Investments - Translation Gains or Losses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Translation gain | $ 12 | $ 40 |
USG Boral Building Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Translation gain | $ 3 | $ 24 |
Equity Method Investments - Sum
Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
USG share of income from investment accounted for using the equity method | $ 9 | $ 13 |
USG Boral Building Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Net sales | 287 | 276 |
Gross profit | 79 | 86 |
Operating profit | 28 | 35 |
Income from continuing operations before income taxes | 32 | 38 |
Net income | 20 | 26 |
Net income attributable to USG Boral Building Products | 19 | 25 |
USG share of income from investment accounted for using the equity method | $ 9 | $ 13 |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment, performance target | 5 years | |
USG Boral Building Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Undistributed earnings | $ 70 | |
Contingent consideration for second performance period | 50 | |
USG Boral Building Products | ||
Schedule of Equity Method Investments [Line Items] | ||
Loan receivable from related party | $ 13 | $ 13 |
Segments (Details)
Segments (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 5 | |
Net Sales: | ||
Net sales | $ 786 | $ 767 |
Operating Profit (Loss): | ||
Operating profit | 46 | 84 |
U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 410 | |
U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 86 | |
U.S. Ceilings | ||
Net Sales: | ||
Net sales | 126 | |
Canada | ||
Net Sales: | ||
Net sales | 104 | |
Other | ||
Net Sales: | ||
Net sales | 60 | |
Operating segments | ||
Net Sales: | ||
Net sales | 842 | |
Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 441 | 469 |
Operating Profit (Loss): | ||
Operating profit | 49 | 79 |
Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 92 | 86 |
Operating Profit (Loss): | ||
Operating profit | 1 | 6 |
Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 138 | 112 |
Operating Profit (Loss): | ||
Operating profit | 19 | 20 |
Operating segments | Canada | ||
Net Sales: | ||
Net sales | 111 | 96 |
Operating Profit (Loss): | ||
Operating profit | 2 | 2 |
Operating segments | Other | ||
Net Sales: | ||
Net sales | 60 | 56 |
Operating Profit (Loss): | ||
Operating profit | 4 | 1 |
Corporate | ||
Operating Profit (Loss): | ||
Operating profit | (29) | (24) |
Eliminations | ||
Net Sales: | ||
Net sales | (56) | $ (52) |
Eliminations | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | (31) | |
Eliminations | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | (6) | |
Eliminations | U.S. Ceilings | ||
Net Sales: | ||
Net sales | (12) | |
Eliminations | Canada | ||
Net Sales: | ||
Net sales | (7) | |
Eliminations | Other | ||
Net Sales: | ||
Net sales | 0 | |
Wallboard | Operating segments | ||
Net Sales: | ||
Net sales | 301 | |
Wallboard | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 220 | |
Wallboard | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 0 | |
Wallboard | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 0 | |
Wallboard | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 63 | |
Wallboard | Operating segments | Other | ||
Net Sales: | ||
Net sales | 18 | |
Surfaces and industrial products | Operating segments | ||
Net Sales: | ||
Net sales | 175 | |
Surfaces and industrial products | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 145 | |
Surfaces and industrial products | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 0 | |
Surfaces and industrial products | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 0 | |
Surfaces and industrial products | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 23 | |
Surfaces and industrial products | Operating segments | Other | ||
Net Sales: | ||
Net sales | 7 | |
Underlayment | Operating segments | ||
Net Sales: | ||
Net sales | 76 | |
Underlayment | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 0 | |
Underlayment | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 65 | |
Underlayment | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 0 | |
Underlayment | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 2 | |
Underlayment | Operating segments | Other | ||
Net Sales: | ||
Net sales | 9 | |
Building envelope and structural | Operating segments | ||
Net Sales: | ||
Net sales | 18 | |
Building envelope and structural | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 0 | |
Building envelope and structural | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 18 | |
Building envelope and structural | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 0 | |
Building envelope and structural | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 0 | |
Building envelope and structural | Operating segments | Other | ||
Net Sales: | ||
Net sales | 0 | |
Ceiling tile and grid | Operating segments | ||
Net Sales: | ||
Net sales | 137 | |
Ceiling tile and grid | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 0 | |
Ceiling tile and grid | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 0 | |
Ceiling tile and grid | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 116 | |
Ceiling tile and grid | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 12 | |
Ceiling tile and grid | Operating segments | Other | ||
Net Sales: | ||
Net sales | 9 | |
Specialty ceilings | Operating segments | ||
Net Sales: | ||
Net sales | 18 | |
Specialty ceilings | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 0 | |
Specialty ceilings | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 0 | |
Specialty ceilings | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 16 | |
Specialty ceilings | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 2 | |
Specialty ceilings | Operating segments | Other | ||
Net Sales: | ||
Net sales | 0 | |
Other products | Operating segments | ||
Net Sales: | ||
Net sales | 43 | |
Other products | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 24 | |
Other products | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 0 | |
Other products | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 0 | |
Other products | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 3 | |
Other products | Operating segments | Other | ||
Net Sales: | ||
Net sales | 16 | |
Total product sales | Operating segments | ||
Net Sales: | ||
Net sales | 768 | |
Total product sales | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 389 | |
Total product sales | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 83 | |
Total product sales | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 132 | |
Total product sales | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 105 | |
Total product sales | Operating segments | Other | ||
Net Sales: | ||
Net sales | 59 | |
Other miscellaneous sales | Operating segments | ||
Net Sales: | ||
Net sales | 74 | |
Other miscellaneous sales | Operating segments | U.S. Wallboard and Surfaces | ||
Net Sales: | ||
Net sales | 52 | |
Other miscellaneous sales | Operating segments | U.S. Performance Materials | ||
Net Sales: | ||
Net sales | 9 | |
Other miscellaneous sales | Operating segments | U.S. Ceilings | ||
Net Sales: | ||
Net sales | 6 | |
Other miscellaneous sales | Operating segments | Canada | ||
Net Sales: | ||
Net sales | 6 | |
Other miscellaneous sales | Operating segments | Other | ||
Net Sales: | ||
Net sales | $ 1 |
Marketable Securities - Reporte
Marketable Securities - Reported on AOCI (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Investments in marketable securities | ||
Amortized Cost | $ 95 | $ 99 |
Fair Value | 95 | 99 |
Corporate debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 67 | 68 |
Fair Value | 67 | 68 |
U.S. government and agency debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 4 | 6 |
Fair Value | 4 | 6 |
Asset-backed debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 13 | 11 |
Fair Value | 13 | 11 |
Certificates of deposit | ||
Investments in marketable securities | ||
Amortized Cost | 11 | 13 |
Fair Value | 11 | 13 |
Municipal debt securities | ||
Investments in marketable securities | ||
Amortized Cost | 0 | 1 |
Fair Value | $ 0 | $ 1 |
Marketable Securities - Contrac
Marketable Securities - Contractual Maturities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Contractual maturities of marketable securities | ||
Due in 1 year or less, amortized cost | $ 62 | |
Due in 1-5 years, amortized cost | 33 | |
Marketable securities, amortized cost | 95 | $ 99 |
Due in 1 year or less, fair value | 62 | |
Due in 1-5 years, fair value | 33 | |
Marketable securities, fair value | $ 95 | $ 99 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total debt | $ 1,089 | $ 1,089 |
Deferred financing fees | 11 | 11 |
Long term debt net of unamortized debt issuance costs | $ 1,078 | 1,078 |
4.875% senior notes due 2027 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 4.875% | |
Total debt | $ 500 | 500 |
5.5% senior notes due 2025 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate | 5.50% | |
Total debt | $ 350 | 350 |
Industrial revenue bonds (due 2028 through 2034) | ||
Debt Instrument [Line Items] | ||
Total debt | $ 239 | $ 239 |
Debt - Credit Facility (Details
Debt - Credit Facility (Details) - Credit facility | Mar. 31, 2018USD ($) |
Debt Instrument [Line Items] | |
Maximum borrowing limit | $ 220,000,000 |
Borrowing available under credit facility | 192,000,000 |
Outstanding lines of credit | 0 |
Amount of letters of credit outstanding | $ 28,000,000 |
Debt - Fair Value and Accrued I
Debt - Fair Value and Accrued Interest (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Fair value of debt | $ 1,111 | $ 1,134 |
Accrued interest | $ 13 | $ 12 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
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) | $ 0 | $ (9) |
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | 0 | 0 |
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) | (3) | (9) |
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) | 0 | 0 |
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 |
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 | 0 |
Derivatives Not Designated as Hedging Instruments | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Recognized in Income on Derivatives | 0 | (1) |
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) |
Derivative Instruments - Locati
Derivative Instruments - Locations on Balance Sheet and Statement of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 4 | $ 2 |
Derivative liabilities | 19 | 17 |
Derivatives Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Derivatives Not Designated as Hedging Instruments | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
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 | 2 |
Derivative liabilities | 19 | 17 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1 | 1 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1 | 1 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 7 | 6 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 11 | 8 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1 | 0 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 1 | 0 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 1 | 3 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ 0 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) MMBTU in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)MMBTU | Mar. 31, 2017USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Typical hedging period | 5 years | |
Net liability aggregate fair value | $ 15,000,000 | |
Collateral provided to counterparties related to derivatives | $ 14,000,000 | |
Cash flow hedging | Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amount of commodity instruments (in mmbtu) | MMBTU | 40 | |
Loss on cash flow hedge ineffectiveness | $ 0 | $ 0 |
Cash flow hedging | Foreign exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Loss on cash flow hedge ineffectiveness | 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 | 107,000,000 | |
Intercompany loan | Cash flow hedging | Foreign exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amounts of foreign exchange forward contracts | $ 16,000,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Assets and liabilities measured at fair value on a recurring basis | ||
Cash equivalents | $ 40 | $ 148 |
Equity mutual funds | 6 | 6 |
Derivative assets | 4 | 2 |
Derivative liabilities | (19) | (17) |
Corporate debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 67 | 68 |
U.S. government and agency debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 4 | 6 |
Asset-backed debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 13 | 11 |
Certificates of deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 11 | 13 |
Municipal debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 0 | 1 |
Level 1 | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Cash equivalents | 3 | 124 |
Equity mutual funds | 6 | 6 |
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 | 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 1 | Municipal debt securities | ||
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 | 37 | 24 |
Equity mutual funds | 0 | 0 |
Derivative assets | 4 | 2 |
Derivative liabilities | (19) | (17) |
Level 2 | Corporate debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 67 | 68 |
Level 2 | U.S. government and agency debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 4 | 6 |
Level 2 | Asset-backed debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 13 | 11 |
Level 2 | Certificates of deposit | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 11 | 13 |
Level 2 | Municipal debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | 0 | 1 |
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 | 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 |
Level 3 | Municipal debt securities | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Marketable securities: | $ 0 | $ 0 |
Employee Retirement Plans - Com
Employee Retirement Plans - Components Of Net Pension and Postretirement Benefit Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Pension plan | ||
Components of net pension and postretirement benefits costs | ||
Service cost of benefits earned | $ 12 | $ 10 |
Interest cost on projected benefit obligation | 16 | 16 |
Expected return on plan assets | (24) | (23) |
Net amortization | 8 | 5 |
Net pension and postretirement cost | 12 | 8 |
Postretirement | ||
Components of net pension and postretirement benefits costs | ||
Service cost of benefits earned | 1 | 1 |
Interest cost on projected benefit obligation | 1 | 1 |
Net amortization | (6) | (6) |
Net pension and postretirement cost | $ (4) | $ (4) |
Employee Retirement Plans - Nar
Employee Retirement Plans - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Pension plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated total contributions in current year | $ 60 |
Pension plan | CANADA | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution by employer | 1 |
Supplemental pension plan | UNITED STATES | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution by employer | $ 1 |
Share-Based Compensation - Awar
Share-Based Compensation - Awards Granted (Details) | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
MSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards granted | shares | 427,664 |
Weighted average fair value (in usd per share) | $ / shares | $ 34.22 |
Expected volatility | 32.62% |
Risk-free rate | 2.37% |
Expected term (in years) | 2 years 11 months 12 days |
Expected dividends | $ | $ 0 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards granted | shares | 103,819 |
Weighted average fair value (in usd per share) | $ / shares | $ 34.21 |
Expected volatility | 32.61% |
Risk-free rate | 2.37% |
Expected term (in years) | 2 years 11 months 12 days |
Expected dividends | $ | $ 0 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards granted | shares | 26,000 |
Weighted average fair value (in usd per share) | $ / shares | $ 33.88 |
Share-Based Compensation - Term
Share-Based Compensation - Terms of Awards Granted (Details) | 3 Months Ended |
Mar. 31, 2018 | |
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% |
Share-Based Compensation - Othe
Share-Based Compensation - Other (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
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 | 0 | 1 |
Supplemental Balance Sheet In59
Supplemental Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Finished goods | $ 145 | $ 140 |
Work in progress | 40 | 39 |
Raw materials | 70 | 73 |
Total | $ 255 | $ 252 |
Supplemental Balance Sheet In60
Supplemental Balance Sheet Information - Accrued Expenses (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities, Current [Abstract] | ||
Self-insurance reserves | $ 14 | $ 12 |
Employee compensation | 13 | 17 |
Interest | 13 | 12 |
Derivatives | 8 | 9 |
Pension and other postretirement benefits | 17 | 17 |
Environmental | 16 | 17 |
Other | 50 | 51 |
Total | $ 131 | $ 135 |
Supplemental Balance Sheet In61
Supplemental Balance Sheet Information - Asset Retirement Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning balance | $ 118 | $ 113 |
Accretion expense | 2 | 1 |
Foreign currency translation | (1) | 0 |
Ending balance | $ 119 | $ 114 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance | $ (169) | |
Ending balance | $ (212) | |
Treasury Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning balance (in shares) | (5,571) | 0 |
Repurchase of common stock for tax withholdings related to stock based compensation (in shares) | (204) | (107) |
Repurchase of common stock under share repurchase program (in shares) | (1,812) | (764) |
Stock issuances (in shares) | 740 | 150 |
Ending balance (in shares) | (6,847) | (721) |
Beginning balance | $ (169) | $ 0 |
Repurchase of common stock for tax withholdings related to stock based compensation | (7) | (3) |
Repurchase of common stock under share repurchase program | (62) | (25) |
Stock issuances | 26 | 4 |
Ending balance | $ (212) | $ (24) |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ 1,845 | |
Other comprehensive income (loss) before reclassifications, net of tax | 14 | $ 33 |
Less: Amounts reclassified from AOCI, net of tax | (1) | 0 |
Other comprehensive income, net of tax | 15 | 33 |
Ending balance | 1,839 | |
Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | 16 | 27 |
Other comprehensive income (loss) before reclassifications, net of tax | 0 | (6) |
Less: Amounts reclassified from AOCI, net of tax | 0 | 0 |
Other comprehensive income, net of tax | 0 | (6) |
Ending balance | 16 | 21 |
Defined Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (297) | (246) |
Other comprehensive income (loss) before reclassifications, net of tax | 2 | (1) |
Less: Amounts reclassified from AOCI, net of tax | (1) | 0 |
Other comprehensive income, net of tax | 3 | (1) |
Ending balance | (294) | (247) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (108) | (166) |
Other comprehensive income (loss) before reclassifications, net of tax | 12 | 40 |
Less: Amounts reclassified from AOCI, net of tax | 0 | 0 |
Other comprehensive income, net of tax | 12 | 40 |
Ending balance | (96) | (126) |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (389) | (385) |
Ending balance | $ (374) | $ (352) |
Stockholders' Equity - Amounts
Stockholders' Equity - Amounts Reclassified from AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net reclassification from AOCI for cash flow hedges included in cost of products sold | $ 647 | $ 608 |
Net reclassification in AOCI for amortization of prior service cost included in other income, net | 3 | 6 |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | (9) | (29) |
Net income | 37 | 55 |
Derivatives | Amounts reclassified from AOCI, net of tax | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net reclassification from AOCI for cash flow hedges included in cost of products sold | 0 | 0 |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | 0 | 0 |
Net income | 0 | 0 |
Defined Benefit Plans | Amounts reclassified from AOCI, net of tax | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net reclassification in AOCI for amortization of prior service cost included in other income, net | (2) | 0 |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | 1 | 0 |
Net income | $ (1) | $ 0 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Equity [Abstract] | |
Estimated after-tax loss on derivatives to be reclassified from AOCI to earnings within the next 12 months | $ 4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 9 | $ 29 |
Effective tax rate | 20.00% | 34.50% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Federal net operating loss carryforwards | $ 458 |
Foreign deferred tax assets | 224 |
Minimum taxable income needed to fully realize the U.S. federal net deferred tax assets | 1,617 |
Deferred tax assets related to state net operating loss and tax credit carryforwards | 169 |
Valuation allowance on deferred tax assets | $ 175 |
Percentage of change in ownership | 50.00% |
Period of change in ownership | 3 years |
Approximate annual NOL utilization had an ownership change occurred | $ 123 |
Domestic Tax Authority | |
Operating Loss Carryforwards [Line Items] | |
Federal alternative minimum tax credit carryforwards | $ 19 |
Litigation (Details)
Litigation (Details) $ in Millions | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 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 | $ | $ 16 | $ 17 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | 1 Months Ended |
Apr. 25, 2018USD ($) | |
Subsequent Event [Line Items] | |
Gain on sale of property | $ 13 |
Gain on sale of property, net of tax | $ 9 |
Interest of joint venture | 33.00% |
Sale of interest in joint venture | $ 3 |
Loss on sale of investment, net of tax | $ 5 |