Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 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 | Sep. 30, 2018 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q3 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 139,755,820 |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 851 | $ 795 | $ 2,517 | $ 2,373 |
Cost of products sold | 699 | 633 | 2,042 | 1,884 |
Gross profit | 152 | 162 | 475 | 489 |
Selling and administrative expenses | 83 | 71 | 285 | 219 |
Operating profit | 69 | 91 | 190 | 270 |
Income from equity method investments | 12 | 15 | 33 | 42 |
Interest expense | (14) | (15) | (43) | (54) |
Interest income | 2 | 1 | 5 | 2 |
Loss on extinguishment of debt | 0 | 0 | 0 | (22) |
Other income, net | 4 | 1 | 4 | 5 |
Income from continuing operations before income taxes | 73 | 93 | 189 | 243 |
Income tax expense | (15) | (27) | (37) | (76) |
Income from continuing operations | 58 | 66 | 152 | 167 |
Income (loss) from discontinued operations, net of tax | 1 | 0 | 2 | (10) |
Net income | $ 59 | $ 66 | $ 154 | $ 157 |
Earnings per average common share - basic: | ||||
Income from continuing operations (in dollars per share) | $ 0.42 | $ 0.47 | $ 1.08 | $ 1.16 |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0.01 | (0.07) |
Net income (in dollars per share) | 0.42 | 0.47 | 1.09 | 1.09 |
Earnings per average common share - diluted: | ||||
Income from continuing operations (in dollars per share) | 0.41 | 0.46 | 1.06 | 1.14 |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0.01 | (0.07) |
Net income (in dollars per share) | $ 0.41 | $ 0.46 | $ 1.07 | $ 1.07 |
Average common shares (in shares) | 139,943,168 | 142,103,717 | 140,328,443 | 145,054,965 |
Dilutive awards under long-term incentive plan (in shares) | 2,902,210 | 2,389,428 | 2,255,947 | 2,312,816 |
Deferred shares for non-employee directors (in shares) | 23,948 | 188,546 | 0 | 216,242 |
Average diluted common shares (in shares) | 142,869,326 | 144,681,691 | 142,584,390 | 147,584,023 |
Cash dividend declared per share (in dollars per share) | $ 0.50 | $ 0 | $ 0.50 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 59 | $ 66 | $ 154 | $ 157 |
Derivatives qualifying as cash flow hedges: | ||||
Gain (loss) on derivatives qualifying as cash flow hedges, net of tax (benefit) of $0, ($2), $0 and ($7), respectively | (1) | (3) | 1 | (11) |
Less: Reclassification adjustment for loss on derivatives included in net income, net of tax (benefit) of $0, ($1), $0, ($1), respectively | (1) | 0 | (3) | (1) |
Net derivatives qualifying as cash flow hedges | 0 | (3) | 4 | (10) |
Pension and postretirement benefits: | ||||
Changes in pension and postretirement benefits, net of tax (benefit) of $0, ($10), $0 and ($8), respectively | (1) | (15) | 2 | (12) |
Less: Amortization of prior service cost included in net periodic pension cost, net of tax (benefit) of ($1), ($2), ($2) and ($9), respectively | (1) | (1) | (4) | (13) |
Net pension and postretirement benefits | 0 | (14) | 6 | 1 |
Foreign currency translation: | ||||
Changes in foreign currency translation, net of tax of $0 in all periods | 4 | 10 | (22) | 58 |
Less: Translation loss realized upon sale of foreign equity method investment, net of tax (benefit) of $0, $0, ($2) and $0, respectively | 0 | 0 | (4) | 0 |
Net foreign currency translation | 4 | 10 | (18) | 58 |
Other comprehensive income, net of tax | 4 | (7) | (8) | 49 |
Comprehensive income | $ 63 | $ 59 | $ 146 | $ 206 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivatives Qualifying as Hedges, Tax: | ||||
Gain (loss) on derivatives qualifying as cash flow hedges, tax (benefit) | $ 0 | $ (2) | $ 0 | $ (7) |
Less: Reclassification adjustment for loss on derivatives included in net income, tax expense (benefit) | 0 | (1) | 0 | (1) |
Pension and Other Postretirement Benefit Plans, Tax: | ||||
Changes in pension and postretirement benefits, tax (benefit) | 0 | (10) | 0 | (8) |
Less: Amortization of prior service cost included in net periodic pension cost, net of tax (benefit) | (1) | (2) | (2) | (9) |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax [Abstract] | ||||
Changes in foreign currency translation, tax | 0 | 0 | 0 | 0 |
Less: Translation loss realized upon sale of foreign equity method investment, net of tax (benefit) | $ 0 | $ 0 | $ (2) | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 329 | $ 394 |
Short-term marketable securities | 61 | 62 |
Receivables (net of reserves 2018 - $10 and 2017 - $9) | 303 | 233 |
Inventories | 288 | 252 |
Income taxes receivable | 16 | 15 |
Other current assets | 34 | 35 |
Total current assets | 1,031 | 991 |
Long-term marketable securities | 38 | 37 |
Property, plant and equipment (net of accumulated depreciation and depletion - 2018 - $2,146 and 2017 - $2,053) | 1,814 | 1,762 |
Deferred income taxes | 252 | 287 |
Equity method investments | 671 | 686 |
Goodwill and intangible assets | 41 | 43 |
Other assets | 43 | 45 |
Total assets | 3,890 | 3,851 |
Liabilities and Stockholders’ Equity | ||
Accounts payable | 284 | 280 |
Accrued expenses | 132 | 135 |
Dividend payable | 72 | 0 |
Income taxes payable | 2 | 0 |
Total current liabilities | 490 | 415 |
Long-term debt | 1,079 | 1,078 |
Deferred income taxes | 5 | 4 |
Pension and other postretirement benefits | 281 | 326 |
Other liabilities | 172 | 183 |
Total liabilities | 2,027 | 2,006 |
Stockholders' Equity: | ||
Preferred stock | 0 | 0 |
Common stock | 15 | 15 |
Treasury stock at cost | (209) | (169) |
Additional paid-in capital | 3,039 | 3,057 |
Accumulated other comprehensive loss | (397) | (389) |
Retained earnings (accumulated deficit) | (585) | (669) |
Total stockholders’ equity | 1,863 | 1,845 |
Total liabilities and stockholders’ equity | $ 3,890 | $ 3,851 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Reserves on receivables | $ 10 | $ 9 |
Accumulated depreciation | $ 2,146 | $ 2,053 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows $ in Millions | 9 Months Ended | |
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Operating Activities | ||
Net income | $ 154 | $ 157 |
Less: Income (loss) from discontinued operations, net of tax | 2 | (10) |
Income from continuing operations | 152 | 167 |
Adjustments to reconcile net income from continuing operations to net cash: | ||
Depreciation, depletion and amortization | 113 | 98 |
Loss on extinguishment of debt | 0 | 22 |
Share-based compensation expense | 15 | 13 |
Deferred income taxes | 33 | 75 |
Gain on asset dispositions | (13) | 0 |
Loss on sale of equity method investment | 8 | 0 |
Income from equity method investments | (33) | (42) |
Dividends received from equity method investments | 16 | 23 |
Pension settlement | 0 | 10 |
Change in operating assets and liabilities | (152) | (164) |
Other, net | 8 | 1 |
Net cash provided by operating activities of continuing operations | 147 | 203 |
Net cash provided by (used for) operating activities of discontinued operations | 2 | (1) |
Net cash provided by operating activities | 149 | 202 |
Investing Activities | ||
Purchases of marketable securities | (75) | (75) |
Sales or maturities of marketable securities | 73 | 69 |
Capital expenditures | (159) | (109) |
Net proceeds from asset dispositions | 14 | 2 |
Net proceeds from sale of equity method investment | 3 | 0 |
Working capital adjustment from acquisition of business | (2) | 0 |
Receipt of collection on loan from former joint venture | 2 | 0 |
Insurance proceeds | 0 | 1 |
Net cash used for investing activities of continuing operations | (140) | (112) |
Net cash provided by investing activities of discontinued operations | 0 | 6 |
Net cash used for investing activities | (140) | (106) |
Financing Activities | ||
Issuance of debt | 0 | 500 |
Repayment of debt | 0 | (520) |
Payment of debt issuance fees | 0 | (8) |
Issuance of common stock | 10 | 3 |
Repurchase of common stock | (76) | (153) |
Repurchases of common stock to satisfy employee tax withholding obligations | (7) | (4) |
Net cash used for financing activities of continuing operations | (73) | (182) |
Effect of exchange rate changes on cash from continuing operations | (1) | 6 |
Net decrease in cash and cash equivalents from continuing operations | (67) | (85) |
Net increase in cash and cash equivalents from discontinued operations | 2 | 5 |
Net decrease in cash and cash equivalents | (65) | (80) |
Cash and cash equivalents at beginning of period | 394 | 427 |
Cash and cash equivalents at end of period | 329 | 347 |
Supplemental Cash Flow Disclosures: | ||
Interest paid, net of capitalized interest | 39 | 66 |
Income taxes paid, net of refunds received | 5 | 13 |
Noncash Investing and Financing Activities: | ||
Amount in accounts payable for capital expenditures | 14 | $ 12 |
Dividend payable | $ 72 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 2017 was as follows. (millions) Three months ended September 30, 2017 Nine months ended September 30, 2017 As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported Gross profit $ 162 $ (1 ) $ 163 $ 489 $ (6 ) $ 495 Operating profit 91 (2 ) 93 270 (10 ) 280 Other income, net 1 2 (1 ) 5 10 (5 ) Net income 66 — 66 157 — 157 We adopted ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" on January 1, 2018 using the retrospective transition method. Topic 230 addresses specific cash flow issues with the stated objective of reducing the existing diversity in practice. There was no impact on adoption to our condensed consolidated cash flow statements and disclosures as we were already compliant with the provisions of the standard. 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 and 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. On January 1, 2018, 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 and nine months ended September 30, 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 and account for related costs as fulfillment activities. We present the costs in cost of products sold when control of our products transfers to the customer. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In August 2018, the Financial Accounting Standards Board, or FASB, issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract", which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for us on January 1, 2020, and earlier adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments". Topic 326 eliminates the probable initial recognition threshold and, instead, requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This standard is effective for us on January 1, 2020 and earlier adoption is permitted. We are currently evaluating the impact of Topic 326 on our consolidated financial position, results of operations and disclosures. We do not expect the adoption of Topic 326 to have a significant impact to our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes existing lease guidance. The new standard requires 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 transition method and will record a cumulative-effect adjustment to the opening balance of retained earnings at the adoption date. We are currently finalizing our accounting policies, implementing a new leasing system, determining changes needed in current processes for lease accounting and verifying the completeness of our lease population and, thus, we are unable to quantify the financial statement impact at this time. The adoption of Topic 842 is expected to have a significant impact on our consolidated balance sheets and increase our disclosures on leases. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 9 Months Ended |
Sep. 30, 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 working capital adjustments. The addition of Ceilings Plus to our U.S. Ceilings segment expands our operations in the specialty ceilings markets. We finalized our valuation in the second quarter of 2018. The fair value of tangible assets acquired, less liabilities assumed, in connection with the Ceilings Plus acquisition was $15 million . The fair value of intangible assets acquired, which included customer relationships and trade names, totaled $20 million . The resulting goodwill recorded was $15 million and all is expected to be deductible for tax purposes. The goodwill consists largely of Ceilings Plus' expected future product sales and synergies with the existing U.S. Ceilings product offerings. Discontinued Operations On October 31, 2016, we completed the sale of our L&W Supply, or L&W, distribution business to ABC Supply. For the nine months ended September 30, 2017, we recorded a loss of $10 million , net of tax, to "Income (loss) from discontinued operations", of which $9 million related to L&W and primarily reflected a pension settlement charge related to lump sum benefits paid to former employees of L&W. For the three and nine months ended September 30, 2018 , we recorded sales of $120 million and $337 million , respectively, and cash inflows related to payments on trade receivables during those same periods of $131 million and $342 million , respectively, which included sales to L&W pursuant to the supply agreement entered into upon the close of the sale. For the comparative periods in 2017, we recorded sales of $122 million and $387 million , respectively, and cash inflows related to payments on trade receivables of $112 million and $364 million , respectively. Merger Agreement On June 10, 2018, we entered into an Agreement and Plan of Merger, as it may be amended from time to time, or the Merger Agreement, with Gebr. Knauf KG, a limited partnership ( Kommanditgesellschaft ) organized under the laws of Germany, or Knauf, and World Cup Acquisition Corporation, a Delaware corporation and an indirect, wholly-owned subsidiary of Knauf, or Merger Sub. The Merger Agreement provides that, subject to the satisfaction of customary closing conditions, Merger Sub will be merged with and into USG, or the Merger, with USG continuing as the surviving corporation and an indirect, wholly-owned subsidiary of Knauf. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each share of common stock, par value $0.10 , of USG issued and outstanding immediately prior to the effective time of the Merger (other than shares of common stock owned by Knauf and its subsidiaries, USG and its subsidiaries and certain excluded holders) will be converted into the right to receive $43.50 in cash, without interest and subject to tax withholding. In addition, as contemplated by the Merger Agreement, we announced on August 9, 2018 that USG had declared a conditional special cash dividend of $0.50 per share, or the conditional special dividend, payable to holders of record of our common stock as of the close of business on August 21, 2018 (subject to due bill trading). Payment of the dividend was conditioned on adoption of the Merger Agreement by our stockholders at the special meeting held on September 26, 2018, or the special meeting. The Merger Agreement was adopted by our stockholders at the special meeting and following certification of the vote in favor of adoption, the conditional special dividend was paid on October 2, 2018. The conditional special dividend totaled $70 million and was declared from retained earnings. Pursuant to the Dividend Make-Whole Amount Plan approved by USG in connection with the Merger and the conditional special dividend, an additional $2 million is expected to be paid to holders of stock options, market share units and performance shares of USG (such awards, “Incentive Equity Awards”), that were outstanding as of June 10, 2018, and are or become vested and paid out in connection with completion of the Merger or are or become vested and become payable following the record date of the special meeting, but prior to the closing of the Merger. These Incentive Equity Awards would not otherwise be entitled to dividend equivalent payments pursuant to their existing terms. The aggregate amounts of the conditional special dividend and the payments pursuant to the Dividend Make-Whole Amount Plan are included in "Dividend payable" on our condensed consolidated balance sheets as of September 30, 2018. The Merger, which is currently expected to close in early 2019, is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, receipt of certain regulatory approvals. The Merger Agreement contains certain termination rights for both USG and Knauf. If the Merger Agreement is terminated under certain specified circumstances, we will be required to pay Knauf a termination fee of $215 million . We have incurred $5 million and $14 million , pre-tax, of Merger-related costs for the three and nine months ended September 30, 2018 , respectively, which are included in "Selling and administrative expenses" on our condensed consolidated statement of income. See Note 3, Equity Method Investments, for additional information regarding the default noticed under the UBBP Shareholders Agreement delivered by Boral in connection with the Merger. |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments Equity method investments as of September 30, 2018 and December 31, 2017 , were as follows: September 30, 2018 December 31, 2017 (dollars in millions) Carrying Value Ownership Percentage Carrying Value Ownership Percentage USG Boral Building Products $ 669 50% $ 679 50% Other equity method investments 2 50% 7 33% - 50% Total equity method investments $ 671 $ 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. Through the first nine months of 2018, UBBP paid cash dividends on its earnings through March 2018 of which our 50% share totaled $16 million . As of September 30, 2018 , the amount of our consolidated retained earnings which represents undistributed earnings from UBBP was $78 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 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. UBBP is operated in accordance with the terms of a Shareholders Agreement. The Shareholders Agreement provides that a change of control with respect to one party constitutes an event of default that allows the non-defaulting party the opportunity to purchase the defaulting shareholder's interest in UBBP for fair market value, as determined in accordance with the Shareholders Agreement. On August 28, 2018, Boral delivered a default notice under the Shareholders Agreement to commence the process to establish the fair market value of our 50% interest in UBBP. Once fair market value is established, Boral will have the right to purchase our 50% interest in UBBP, in each case in accordance with the Shareholders Agreement. Boral’s exercise of its right to purchase our 50% interest in UBBP could occur prior to the closing of the Merger Agreement, in which case we would receive the cash proceeds for our interest, and we would no longer own an interest in UBBP. 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 September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Translation (loss) gain $ (7 ) $ 5 $ (28 ) $ 28 Summarized financial information for UBBP is as follows: Three months ended September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 USG Boral Building Products Net sales $ 305 $ 324 $ 889 $ 887 Gross profit 81 98 243 275 Operating profit 32 43 91 118 Income from continuing operations before income taxes 36 47 103 129 Net income 24 32 69 86 Net income attributable to USG Boral Building Products 24 30 67 83 USG share of income from investment accounted for using the equity method 12 15 33 42 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 and nine months ended September 30, 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. During the third quarter of 2018, we received a $2 million payment on the loan receivable. As of September 30, 2018 and December 31, 2017 , the loan receivable, including interest, totaled $11 million and $13 million , respectively, and is included in "Other assets" on our accompanying condensed consolidated balance sheets. INVESTMENT IN SOUTH AFRICA JOINT VENTURE During the second quarter of 2018, we completed the sale of our 33% interest in a joint venture in South Africa for approximately $3 million . We recorded a loss on the sale of $8 million in " Other income, net " on our accompanying condensed consolidated income statements for the nine months ended September 30, 2018. The loss, which totaled $5 million net of tax, was driven primarily by foreign currency losses included in equity that were recognized upon the disposition of the joint venture and was recorded within Other, as it does not relate to a reportable segment. |
Segments
Segments | 9 Months Ended |
Sep. 30, 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 , Equity Method Investments, 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 September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Net Sales : U.S. Wallboard and Surfaces $ 487 $ 466 $ 1,440 $ 1,417 U.S. Performance Materials 101 92 298 278 U.S. Ceilings 143 125 420 355 Canada 110 100 342 300 Other 66 63 191 178 Eliminations (56 ) (51 ) (174 ) (155 ) Total $ 851 $ 795 $ 2,517 $ 2,373 Operating Profit (Loss) : U.S. Wallboard and Surfaces $ 64 $ 71 $ 194 $ 228 U.S. Performance Materials (1 ) 6 (6 ) 20 U.S. Ceilings 24 25 66 68 Canada 6 3 16 7 Other 4 6 12 8 Corporate (28 ) (20 ) (92 ) (61 ) Total $ 69 $ 91 $ 190 $ 270 Net sales disaggregated by product type were as follows: Three months ended September 30, 2018 (millions) U.S. Wallboard and Surfaces U.S. Performance Materials U.S. Ceilings Canada Other Total Wallboard $ 253 $ — $ — $ 65 $ 20 $ 338 Surfaces and industrial products 145 — — 21 7 173 Underlayment — 69 — 3 11 83 Building envelope and structural — 21 — — — 21 Ceiling tile and grid — — 122 10 8 140 Specialty ceilings — — 15 3 — 18 Other products 25 — 1 2 18 46 Total product sales 423 90 138 104 64 819 Other miscellaneous sales (a) 64 11 5 6 2 88 Total sales before eliminations 487 101 143 110 66 907 Eliminations (31 ) (6 ) (11 ) (8 ) — (56 ) Total net sales $ 456 $ 95 $ 132 $ 102 $ 66 $ 851 Nine months ended September 30, 2018 (millions) U.S. Wallboard and Surfaces U.S. Performance Materials U.S. Ceilings Canada Other Total Wallboard $ 743 $ — $ — $ 196 $ 57 $ 996 Surfaces and industrial products 441 — — 67 21 529 Underlayment — 204 — 8 31 243 Building envelope and structural — 62 — 1 1 64 Ceiling tile and grid — — 359 34 25 418 Specialty ceilings — — 48 7 — 55 Other products 75 — 1 10 51 137 Total product sales 1,259 266 408 323 186 2,442 Other miscellaneous sales (a) 181 32 12 19 5 249 Total sales before eliminations 1,440 298 420 342 191 2,691 Eliminations (92 ) (19 ) (38 ) (25 ) — (174 ) Total net sales $ 1,348 $ 279 $ 382 $ 317 $ 191 $ 2,517 (a) Other miscellaneous sales primarily includes shipping and handling costs billed to customers. |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 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 September 30, 2018 As of December 31, 2017 (millions) Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt securities $ 74 $ 74 $ 68 $ 68 U.S. government and agency debt securities 3 3 6 6 Asset-backed debt securities 14 14 11 11 Certificates of deposit 7 7 13 13 Municipal debt securities 1 1 1 1 Total marketable securities $ 99 $ 99 $ 99 $ 99 The realized and unrealized gains and losses for the three and nine months ended September 30, 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 September 30, 2018 were as follows: (millions) Amortized Cost Fair Value Due in 1 year or less $ 61 $ 61 Due in 1-5 years 38 38 Total marketable securities $ 99 $ 99 Actual maturities may differ from the contractual maturities because issuers of the securities may have the right to prepay them. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Total debt consisted of the following: (millions) September 30, 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 10 11 Total $ 1,079 $ 1,078 SENIOR NOTES AND CREDIT FACILITY During the second quarter of 2017, we issued $500 million of 4.875% Senior Notes due 2027, referred to as our 4.875% Notes. The net proceeds from the issuance of these notes and cash on hand were used to fund the repurchase of our 7.75% Senior Notes due 2018, referred to as our 7.75% Notes, and all related costs and expenses. We deferred $7 million of debt issuance costs that are being amortized to interest expense over the term of the 4.875% Notes. We repurchased the 7.75% Notes through both a cash tender offer and a subsequent notice of redemption for aggregate consideration of $536 million , including premiums of $20 million and accrued interest of $16 million . In the nine months ended September 30, 2017, we recorded a pre-tax loss on the early extinguishment of debt of $21 million . Also during the second quarter of 2017, we amended and restated our credit facility agreement. As a result, we recorded a pre-tax loss on extinguishment of debt of $1 million in the nine months ended September 30, 2017. 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 September 30, 2018 of $198 million exceeds this threshold, thus the requirement to maintain the minimum fixed charge coverage ratio is not applicable. As of September 30, 2018 , we were in compliance with the covenants contained in our credit facility. As of September 30, 2018 and during the quarter then-ended, there were no borrowings under the facility. Outstanding letters of credit totaled $22 million as of September 30, 2018 . OTHER INFORMATION (millions) September 30, December 31, Fair value of debt $ 1,103 $ 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 | 9 Months Ended |
Sep. 30, 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 45 million mmBTUs* December 31, 2022 Foreign Exchange Forward contracts Purchases of products and services denominated in a foreign currency $108 million December 31, 2019 * - 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 September 30, 2018 , our derivatives were in a $11 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 $9 million of collateral posted with our counterparties related to our derivatives as of September 30, 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 September 30, 2018 and 2017 . We recognized no gain or loss in net income on derivatives not designated as hedging instruments for the three months ended September 30, 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 $ — $ (2 ) Cost of products sold $ (1 ) $ (1 ) Foreign exchange contracts (1 ) (3 ) Cost of products sold — — Total $ (1 ) $ (5 ) $ (1 ) $ (1 ) 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 nine months ended September 30, 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 ) $ (12 ) Cost of products sold $ (3 ) $ (2 ) Foreign exchange contracts 4 (6 ) Cost of products sold — — Total $ 1 $ (18 ) $ (3 ) $ (2 ) Location of Gain or (Loss) Recognized in Income on Derivatives Amount of Gain or (Loss) Recognized in Income on Derivatives (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 and nine months ended September 30, 2018 and 2017 . The following are the fair values of derivative instruments and the location on our accompanying condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017 . Balance Sheet Location Fair Value Balance Sheet Location Fair Value (millions) 9/30/18 12/31/17 9/30/18 12/31/17 Derivatives in Cash Flow Hedging Relationships Commodity contracts Other current assets $ 2 $ 1 Accrued expenses $ 5 $ 6 Commodity contracts Other assets 1 1 Other liabilities 11 8 Foreign exchange contracts Other current assets 2 — Accrued expenses — 3 Foreign exchange contracts Other assets — — Other liabilities — — Total derivatives in cash flow hedging relationships $ 5 $ 2 $ 16 $ 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 $ 5 $ 2 Total liabilities $ 16 $ 17 As of September 30, 2018 , we had no derivatives designated as fair value hedges or net investment hedges. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 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) 9/30/18 12/31/17 9/30/18 12/31/17 9/30/18 12/31/17 9/30/18 12/31/17 Cash equivalents $ 90 $ 124 $ 29 $ 24 $ — $ — $ 119 $ 148 Equity mutual funds 6 6 — — — — 6 6 Marketable securities: Corporate debt securities — — 74 68 — — 74 68 U.S. government and agency debt securities — — 3 6 — — 3 6 Asset-backed debt securities — — 14 11 — — 14 11 Certificates of deposit — — 7 13 — — 7 13 Municipal debt securities — — 1 1 — — 1 1 Derivative assets — — 5 2 — — 5 2 Derivative liabilities — — (16 ) (17 ) — — (16 ) (17 ) |
Employee Retirement Plans
Employee Retirement Plans | 9 Months Ended |
Sep. 30, 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 September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Pension: Service cost of benefits earned $ 13 $ 11 $ 37 $ 32 Interest cost on projected benefit obligation 15 15 47 46 Expected return on plan assets (24 ) (23 ) (72 ) (69 ) Settlement — 3 — 23 Net amortization 8 6 24 16 Net pension cost (a) $ 12 $ 12 $ 36 $ 48 Postretirement: Service cost of benefits earned $ 1 $ — $ 3 $ 2 Interest cost on projected benefit obligation 1 2 3 4 Net amortization (6 ) (6 ) (18 ) (18 ) Net postretirement benefit $ (4 ) $ (4 ) $ (12 ) $ (12 ) (a) Net pension cost, excluding settlement costs, includes amounts allocated to (loss) income from discontinued operations for L&W totaling a benefit of $1 million for the three and nine months ended September 30, 2017. 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 ". For the three and nine months ended September 30, 2017, we recorded settlement expense of $3 million and $23 million , respectively, as the total lump sum distributions paid by the USG Corporation pension plan to both L&W employees and former USG employees during the first nine months of 2017 exceeded the settlement threshold. Upon termination of their employment from USG, all L&W employees had the option to receive a lump sum benefit payment from the USG Corporation pension plan. For the benefits paid to terminated employees of L&W, we recorded a pre-tax loss of $13 million to "Income (loss) from discontinued operations" for the nine months ended September 30, 2017. For the benefits paid to USG retirees, we recorded a pre-tax loss of $3 million and $10 million to " Other income, net " for the three and nine months ended September 30, 2017. During the first nine months of 2018 , we made cash contributions of $50 million to the USG Corporation Retirement Plan Trust, $1 million to our domestic supplemental pension plan and $4 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 | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation During the first nine 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 nine months of 2018 , weighted average fair value, and assumptions used to determine fair value were as follows: MSUs Performance Shares RSUs (e) Awards granted 428,574 103,819 44,000 Weighted average fair value (a) $ 34.22 $ 34.21 $ 36.92 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. (e) We granted 3,812 dividend equivalents on unvested RSU awards on October 2, 2018 following the adoption of the Merger Agreement by our stockholders on September 26, 2018 and the payment of the conditional special dividend. See Note 15, Merger Agreement. The dividend equivalents are subject to the same terms and conditions as the RSUs to which they are credited. Terms of the awards granted during the first nine 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 September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 MSUs, performance shares, RSUs and stock options — 0.6 — 0.8 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 9 Months Ended |
Sep. 30, 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) September 30, 2018 December 31, 2017 Finished goods $ 167 $ 140 Work in progress 43 39 Raw materials 78 73 Total $ 288 $ 252 ACCRUED EXPENSES Accrued expenses consisted of the following: (millions) September 30, 2018 December 31, 2017 Self-insurance reserves $ 14 $ 12 Employee compensation 13 17 Interest 13 12 Derivatives 5 9 Pension and other postretirement benefits 17 17 Environmental 12 17 Other 58 51 Total $ 132 $ 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: Nine months ended September 30, (millions) 2018 2017 Balance as of January 1 $ 118 $ 113 Accretion expense 5 5 Liabilities incurred — 3 Changes in estimated cash flows (5 ) (4 ) Liabilities settled (1 ) (1 ) Foreign currency translation — 2 Balance as of September 30 $ 117 $ 118 ASSET DISPOSITIONS In the second quarter of 2018, we recorded a gain of $13 million , or $9 million net of tax, on the sale of a surplus property. The pre-tax gain was recorded in cost of products sold within the U.S. Wallboard and Surfaces segment. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity TREASURY STOCK Changes in treasury stock for the nine months ended September 30, 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 ) (115 ) (4 ) Repurchase of common stock under share repurchase program (a) (2,156 ) (76 ) (5,150 ) (153 ) Stock reissuances 1,175 43 227 7 Balance as of September 30 (6,756 ) $ (209 ) (5,038 ) $ (150 ) (a) The Merger Agreement limits our ability to repurchase shares of our common stock, subject to certain exceptions, and share repurchases under the program will not continue so long as the Merger Agreement is in effect. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Changes in the balances of each component of AOCI for the nine months ended September 30, 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 1 (11 ) 2 (12 ) (22 ) 58 (19 ) 35 Less: Amounts reclassified from AOCI, net of tax (3 ) (1 ) (4 ) (13 ) (4 ) — (11 ) (14 ) Net other comprehensive income (loss) 4 (10 ) 6 1 (18 ) 58 (8 ) 49 Balance as of September 30 $ 20 $ 17 $ (291 ) $ (245 ) $ (126 ) $ (108 ) $ (397 ) $ (336 ) Amounts reclassified from AOCI, net of tax, for the three and nine months ended September 30, 2018 and 2017 , were as follows: Three months ended September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Derivatives Net reclassification from AOCI for cash flow hedges included in cost of products sold $ (1 ) $ (1 ) $ (3 ) $ (2 ) Less: Income tax benefit on reclassification from AOCI included in income tax expense — (1 ) — (1 ) Net amount reclassified from AOCI $ (1 ) $ — $ (3 ) $ (1 ) Defined Benefit Plans Net reclassification in AOCI for amortization of prior service cost included in other income, net $ (2 ) $ (3 ) $ (6 ) $ (10 ) Net reclassification from AOCI for amortization of prior service cost included in (loss) income from discontinued operations, net of tax — — — (8 ) Less: Income tax benefit on reclassification from AOCI included in income tax expense (1 ) (2 ) (2 ) (5 ) Net amount reclassified from AOCI $ (1 ) $ (1 ) $ (4 ) $ (13 ) Foreign Currency Translation Net reclassification from AOCI for translation gains realized upon the sale of foreign equity method investment included in other (expense) income, net $ — $ — $ (6 ) $ — Less: Income tax expense on reclassification from AOCI included in income tax expense (benefit) — — (2 ) — Net amount reclassified from AOCI $ — $ — $ (4 ) $ — We estimate that we will reclassify a net $2 million after-tax loss on derivatives from AOCI to earnings within the next 12 months. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 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 estimate recorded as of December 31, 2017 was updated as of September 30, 2018 based upon our decision to elect not to apply our existing net operating losses, or NOLs, against the accumulated earnings that were subject to the transition tax. The election did not have an impact on our total income tax expense but did result in significant changes to the makeup of our tax carryforwards. The change included an increase to our available NOLs by $222 million , offset by a decrease in our existing foreign tax credits, or FTCs, by $78 million . In addition, due to the accelerated use of FTCs, our valuation allowance related to our FTCs was reduced by $31 million . 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. 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 additional adjustments to the provisional amounts. Our income tax expense and effective tax rate for the three and nine months ended September 30 were as follows: Three months ended September 30, Nine months ended September 30, (dollars in millions) 2018 2017 2018 2017 Income tax expense $ 15 $ 27 $ 37 $ 76 Effective tax rate 20.5 % 29.0 % 19.6 % 31.3 % 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 September 30, 2018 , we had federal NOL carryforwards of approximately $564 million , which included a $222 million increase based on provisional adjustments related to the 2017 Tax Act, 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 had FTC carryforwards of $148 million , which included a decrease of $78 million based on provisional adjustments related to the 2017 Tax Act, which are available to offset future federal tax liabilities 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 $1.361 billion would need to be generated during the period before their expiration based on our interpretation of the 2017 Tax Act. As of September 30, 2018 , we had a deferred tax asset of $161 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 September 30, 2018 , the valuation allowance against our deferred tax assets was $142 million , a $33 million reduction compared to $175 million at December 31, 2017. The reduction primarily related to the accelerated use of our FTCs to offset the transition tax related to the 2017 Tax Act. 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 September 30, 2018 , our annual U.S. federal NOL utilization would have been limited to approximately $139 million per year. |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 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 September 30, 2018 and December 31, 2017 , we had accruals of $12 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. |
Merger Agreement
Merger Agreement | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Merger Agreement | Acquisitions and Dispositions Acquisition of Ceilings Plus On November 30, 2017, we completed our acquisition of Ceilings Plus for $50 million , net of working capital adjustments. The addition of Ceilings Plus to our U.S. Ceilings segment expands our operations in the specialty ceilings markets. We finalized our valuation in the second quarter of 2018. The fair value of tangible assets acquired, less liabilities assumed, in connection with the Ceilings Plus acquisition was $15 million . The fair value of intangible assets acquired, which included customer relationships and trade names, totaled $20 million . The resulting goodwill recorded was $15 million and all is expected to be deductible for tax purposes. The goodwill consists largely of Ceilings Plus' expected future product sales and synergies with the existing U.S. Ceilings product offerings. Discontinued Operations On October 31, 2016, we completed the sale of our L&W Supply, or L&W, distribution business to ABC Supply. For the nine months ended September 30, 2017, we recorded a loss of $10 million , net of tax, to "Income (loss) from discontinued operations", of which $9 million related to L&W and primarily reflected a pension settlement charge related to lump sum benefits paid to former employees of L&W. For the three and nine months ended September 30, 2018 , we recorded sales of $120 million and $337 million , respectively, and cash inflows related to payments on trade receivables during those same periods of $131 million and $342 million , respectively, which included sales to L&W pursuant to the supply agreement entered into upon the close of the sale. For the comparative periods in 2017, we recorded sales of $122 million and $387 million , respectively, and cash inflows related to payments on trade receivables of $112 million and $364 million , respectively. Merger Agreement On June 10, 2018, we entered into an Agreement and Plan of Merger, as it may be amended from time to time, or the Merger Agreement, with Gebr. Knauf KG, a limited partnership ( Kommanditgesellschaft ) organized under the laws of Germany, or Knauf, and World Cup Acquisition Corporation, a Delaware corporation and an indirect, wholly-owned subsidiary of Knauf, or Merger Sub. The Merger Agreement provides that, subject to the satisfaction of customary closing conditions, Merger Sub will be merged with and into USG, or the Merger, with USG continuing as the surviving corporation and an indirect, wholly-owned subsidiary of Knauf. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each share of common stock, par value $0.10 , of USG issued and outstanding immediately prior to the effective time of the Merger (other than shares of common stock owned by Knauf and its subsidiaries, USG and its subsidiaries and certain excluded holders) will be converted into the right to receive $43.50 in cash, without interest and subject to tax withholding. In addition, as contemplated by the Merger Agreement, we announced on August 9, 2018 that USG had declared a conditional special cash dividend of $0.50 per share, or the conditional special dividend, payable to holders of record of our common stock as of the close of business on August 21, 2018 (subject to due bill trading). Payment of the dividend was conditioned on adoption of the Merger Agreement by our stockholders at the special meeting held on September 26, 2018, or the special meeting. The Merger Agreement was adopted by our stockholders at the special meeting and following certification of the vote in favor of adoption, the conditional special dividend was paid on October 2, 2018. The conditional special dividend totaled $70 million and was declared from retained earnings. Pursuant to the Dividend Make-Whole Amount Plan approved by USG in connection with the Merger and the conditional special dividend, an additional $2 million is expected to be paid to holders of stock options, market share units and performance shares of USG (such awards, “Incentive Equity Awards”), that were outstanding as of June 10, 2018, and are or become vested and paid out in connection with completion of the Merger or are or become vested and become payable following the record date of the special meeting, but prior to the closing of the Merger. These Incentive Equity Awards would not otherwise be entitled to dividend equivalent payments pursuant to their existing terms. The aggregate amounts of the conditional special dividend and the payments pursuant to the Dividend Make-Whole Amount Plan are included in "Dividend payable" on our condensed consolidated balance sheets as of September 30, 2018. The Merger, which is currently expected to close in early 2019, is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, receipt of certain regulatory approvals. The Merger Agreement contains certain termination rights for both USG and Knauf. If the Merger Agreement is terminated under certain specified circumstances, we will be required to pay Knauf a termination fee of $215 million . We have incurred $5 million and $14 million , pre-tax, of Merger-related costs for the three and nine months ended September 30, 2018 , respectively, which are included in "Selling and administrative expenses" on our condensed consolidated statement of income. See Note 3, Equity Method Investments, for additional information regarding the default noticed under the UBBP Shareholders Agreement delivered by Boral in connection with the Merger. |
Organization, Consolidation a_2
Organization, Consolidation and Presentation of Financial Statements (Policies) | 9 Months Ended |
Sep. 30, 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 ISSUED ACCOUNTING PRONOUNCEMENTS In August 2018, the Financial Accounting Standards Board, or FASB, issued ASU 2018-15, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract", which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective for us on January 1, 2020, and earlier adoption is permitted. We are currently evaluating the impact of this standard on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments". Topic 326 eliminates the probable initial recognition threshold and, instead, requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This standard is effective for us on January 1, 2020 and earlier adoption is permitted. We are currently evaluating the impact of Topic 326 on our consolidated financial position, results of operations and disclosures. We do not expect the adoption of Topic 326 to have a significant impact to our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which supersedes existing lease guidance. The new standard requires 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 transition method and will record a cumulative-effect adjustment to the opening balance of retained earnings at the adoption date. We are currently finalizing our accounting policies, implementing a new leasing system, determining changes needed in current processes for lease accounting and verifying the completeness of our lease population and, thus, we are unable to quantify the financial statement impact at this time. The adoption of Topic 842 is expected to have a significant impact on our consolidated balance sheets and increase our disclosures on leases. 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 and nine months ended September 30, 2017 was as follows. (millions) Three months ended September 30, 2017 Nine months ended September 30, 2017 As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported Gross profit $ 162 $ (1 ) $ 163 $ 489 $ (6 ) $ 495 Operating profit 91 (2 ) 93 270 (10 ) 280 Other income, net 1 2 (1 ) 5 10 (5 ) Net income 66 — 66 157 — 157 We adopted ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" on January 1, 2018 using the retrospective transition method. Topic 230 addresses specific cash flow issues with the stated objective of reducing the existing diversity in practice. There was no impact on adoption to our condensed consolidated cash flow statements and disclosures as we were already compliant with the provisions of the standard. 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 and 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. On January 1, 2018, 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 and nine months ended September 30, 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 and Shipping and Handling Costs | 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 and account for related costs as fulfillment activities. We present the costs in cost of products sold when control of our products transfers to the customer. |
Organization, Consolidation a_3
Organization, Consolidation and Presentation of Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2017 was as follows. (millions) Three months ended September 30, 2017 Nine months ended September 30, 2017 As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported As Restated Adjustment for Adoption of ASU 2017-07 As Previously Reported Gross profit $ 162 $ (1 ) $ 163 $ 489 $ (6 ) $ 495 Operating profit 91 (2 ) 93 270 (10 ) 280 Other income, net 1 2 (1 ) 5 10 (5 ) Net income 66 — 66 157 — 157 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized financial information | Summarized financial information for UBBP is as follows: Three months ended September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 USG Boral Building Products Net sales $ 305 $ 324 $ 889 $ 887 Gross profit 81 98 243 275 Operating profit 32 43 91 118 Income from continuing operations before income taxes 36 47 103 129 Net income 24 32 69 86 Net income attributable to USG Boral Building Products 24 30 67 83 USG share of income from investment accounted for using the equity method 12 15 33 42 Equity method investments as of September 30, 2018 and December 31, 2017 , were as follows: September 30, 2018 December 31, 2017 (dollars in millions) Carrying Value Ownership Percentage Carrying Value Ownership Percentage USG Boral Building Products $ 669 50% $ 679 50% Other equity method investments 2 50% 7 33% - 50% Total equity method investments $ 671 $ 686 |
Translation gain or losses in other comprehensive income | Translation gains or losses recorded in other comprehensive income were as follows: Three months ended September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Translation (loss) gain $ (7 ) $ 5 $ (28 ) $ 28 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Net Sales : U.S. Wallboard and Surfaces $ 487 $ 466 $ 1,440 $ 1,417 U.S. Performance Materials 101 92 298 278 U.S. Ceilings 143 125 420 355 Canada 110 100 342 300 Other 66 63 191 178 Eliminations (56 ) (51 ) (174 ) (155 ) Total $ 851 $ 795 $ 2,517 $ 2,373 Operating Profit (Loss) : U.S. Wallboard and Surfaces $ 64 $ 71 $ 194 $ 228 U.S. Performance Materials (1 ) 6 (6 ) 20 U.S. Ceilings 24 25 66 68 Canada 6 3 16 7 Other 4 6 12 8 Corporate (28 ) (20 ) (92 ) (61 ) Total $ 69 $ 91 $ 190 $ 270 Net sales disaggregated by product type were as follows: Three months ended September 30, 2018 (millions) U.S. Wallboard and Surfaces U.S. Performance Materials U.S. Ceilings Canada Other Total Wallboard $ 253 $ — $ — $ 65 $ 20 $ 338 Surfaces and industrial products 145 — — 21 7 173 Underlayment — 69 — 3 11 83 Building envelope and structural — 21 — — — 21 Ceiling tile and grid — — 122 10 8 140 Specialty ceilings — — 15 3 — 18 Other products 25 — 1 2 18 46 Total product sales 423 90 138 104 64 819 Other miscellaneous sales (a) 64 11 5 6 2 88 Total sales before eliminations 487 101 143 110 66 907 Eliminations (31 ) (6 ) (11 ) (8 ) — (56 ) Total net sales $ 456 $ 95 $ 132 $ 102 $ 66 $ 851 Nine months ended September 30, 2018 (millions) U.S. Wallboard and Surfaces U.S. Performance Materials U.S. Ceilings Canada Other Total Wallboard $ 743 $ — $ — $ 196 $ 57 $ 996 Surfaces and industrial products 441 — — 67 21 529 Underlayment — 204 — 8 31 243 Building envelope and structural — 62 — 1 1 64 Ceiling tile and grid — — 359 34 25 418 Specialty ceilings — — 48 7 — 55 Other products 75 — 1 10 51 137 Total product sales 1,259 266 408 323 186 2,442 Other miscellaneous sales (a) 181 32 12 19 5 249 Total sales before eliminations 1,440 298 420 342 191 2,691 Eliminations (92 ) (19 ) (38 ) (25 ) — (174 ) Total net sales $ 1,348 $ 279 $ 382 $ 317 $ 191 $ 2,517 (a) Other miscellaneous sales primarily includes shipping and handling costs billed to customers. |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in marketable securities | Our investments in marketable securities consisted of the following: As of September 30, 2018 As of December 31, 2017 (millions) Amortized Cost Fair Value Amortized Cost Fair Value Corporate debt securities $ 74 $ 74 $ 68 $ 68 U.S. government and agency debt securities 3 3 6 6 Asset-backed debt securities 14 14 11 11 Certificates of deposit 7 7 13 13 Municipal debt securities 1 1 1 1 Total marketable securities $ 99 $ 99 $ 99 $ 99 |
Contractual maturities of marketable securities | Contractual maturities of marketable securities as of September 30, 2018 were as follows: (millions) Amortized Cost Fair Value Due in 1 year or less $ 61 $ 61 Due in 1-5 years 38 38 Total marketable securities $ 99 $ 99 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | Total debt consisted of the following: (millions) September 30, 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 10 11 Total $ 1,079 $ 1,078 |
Other debt disclosure | OTHER INFORMATION (millions) September 30, December 31, Fair value of debt $ 1,103 $ 1,134 Accrued interest 13 12 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 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 45 million mmBTUs* December 31, 2022 Foreign Exchange Forward contracts Purchases of products and services denominated in a foreign currency $108 million December 31, 2019 * - 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 September 30, 2018 and 2017 . We recognized no gain or loss in net income on derivatives not designated as hedging instruments for the three months ended September 30, 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 $ — $ (2 ) Cost of products sold $ (1 ) $ (1 ) Foreign exchange contracts (1 ) (3 ) Cost of products sold — — Total $ (1 ) $ (5 ) $ (1 ) $ (1 ) 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 nine months ended September 30, 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 ) $ (12 ) Cost of products sold $ (3 ) $ (2 ) Foreign exchange contracts 4 (6 ) Cost of products sold — — Total $ 1 $ (18 ) $ (3 ) $ (2 ) Location of Gain or (Loss) Recognized in Income on Derivatives Amount of Gain or (Loss) Recognized in Income on Derivatives (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 as of September 30, 2018 and December 31, 2017 . Balance Sheet Location Fair Value Balance Sheet Location Fair Value (millions) 9/30/18 12/31/17 9/30/18 12/31/17 Derivatives in Cash Flow Hedging Relationships Commodity contracts Other current assets $ 2 $ 1 Accrued expenses $ 5 $ 6 Commodity contracts Other assets 1 1 Other liabilities 11 8 Foreign exchange contracts Other current assets 2 — Accrued expenses — 3 Foreign exchange contracts Other assets — — Other liabilities — — Total derivatives in cash flow hedging relationships $ 5 $ 2 $ 16 $ 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 $ 5 $ 2 Total liabilities $ 16 $ 17 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 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) 9/30/18 12/31/17 9/30/18 12/31/17 9/30/18 12/31/17 9/30/18 12/31/17 Cash equivalents $ 90 $ 124 $ 29 $ 24 $ — $ — $ 119 $ 148 Equity mutual funds 6 6 — — — — 6 6 Marketable securities: Corporate debt securities — — 74 68 — — 74 68 U.S. government and agency debt securities — — 3 6 — — 3 6 Asset-backed debt securities — — 14 11 — — 14 11 Certificates of deposit — — 7 13 — — 7 13 Municipal debt securities — — 1 1 — — 1 1 Derivative assets — — 5 2 — — 5 2 Derivative liabilities — — (16 ) (17 ) — — (16 ) (17 ) |
Employee Retirement Plans (Tabl
Employee Retirement Plans (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Pension: Service cost of benefits earned $ 13 $ 11 $ 37 $ 32 Interest cost on projected benefit obligation 15 15 47 46 Expected return on plan assets (24 ) (23 ) (72 ) (69 ) Settlement — 3 — 23 Net amortization 8 6 24 16 Net pension cost (a) $ 12 $ 12 $ 36 $ 48 Postretirement: Service cost of benefits earned $ 1 $ — $ 3 $ 2 Interest cost on projected benefit obligation 1 2 3 4 Net amortization (6 ) (6 ) (18 ) (18 ) Net postretirement benefit $ (4 ) $ (4 ) $ (12 ) $ (12 ) (a) Net pension cost, excluding settlement costs, includes amounts allocated to (loss) income from discontinued operations for L&W totaling a benefit of $1 million for the three and nine months ended September 30, 2017. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of awards granted during the period | Awards granted during the first nine months of 2018 , weighted average fair value, and assumptions used to determine fair value were as follows: MSUs Performance Shares RSUs (e) Awards granted 428,574 103,819 44,000 Weighted average fair value (a) $ 34.22 $ 34.21 $ 36.92 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. (e) We granted 3,812 dividend equivalents on unvested RSU awards on October 2, 2018 following the adoption of the Merger Agreement by our stockholders on September 26, 2018 and the payment of the conditional special dividend. See Note 15, Merger Agreement. The dividend equivalents are subject to the same terms and conditions as the RSUs to which they are credited. Terms of the awards granted during the first nine 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 September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 MSUs, performance shares, RSUs and stock options — 0.6 — 0.8 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of inventories | Total inventories consisted of the following: (millions) September 30, 2018 December 31, 2017 Finished goods $ 167 $ 140 Work in progress 43 39 Raw materials 78 73 Total $ 288 $ 252 |
Schedule of accrued expenses | Accrued expenses consisted of the following: (millions) September 30, 2018 December 31, 2017 Self-insurance reserves $ 14 $ 12 Employee compensation 13 17 Interest 13 12 Derivatives 5 9 Pension and other postretirement benefits 17 17 Environmental 12 17 Other 58 51 Total $ 132 $ 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: Nine months ended September 30, (millions) 2018 2017 Balance as of January 1 $ 118 $ 113 Accretion expense 5 5 Liabilities incurred — 3 Changes in estimated cash flows (5 ) (4 ) Liabilities settled (1 ) (1 ) Foreign currency translation — 2 Balance as of September 30 $ 117 $ 118 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Changes in treasury stock | Changes in treasury stock for the nine months ended September 30, 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 ) (115 ) (4 ) Repurchase of common stock under share repurchase program (a) (2,156 ) (76 ) (5,150 ) (153 ) Stock reissuances 1,175 43 227 7 Balance as of September 30 (6,756 ) $ (209 ) (5,038 ) $ (150 ) (a) The Merger Agreement limits our ability to repurchase shares of our common stock, subject to certain exceptions, and share repurchases under the program will not continue so long as the Merger Agreement is in effect. |
Changes in the balances of each component of AOCI | Changes in the balances of each component of AOCI for the nine months ended September 30, 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 1 (11 ) 2 (12 ) (22 ) 58 (19 ) 35 Less: Amounts reclassified from AOCI, net of tax (3 ) (1 ) (4 ) (13 ) (4 ) — (11 ) (14 ) Net other comprehensive income (loss) 4 (10 ) 6 1 (18 ) 58 (8 ) 49 Balance as of September 30 $ 20 $ 17 $ (291 ) $ (245 ) $ (126 ) $ (108 ) $ (397 ) $ (336 ) |
Amounts reclassified from AOCI, net of tax | Amounts reclassified from AOCI, net of tax, for the three and nine months ended September 30, 2018 and 2017 , were as follows: Three months ended September 30, Nine months ended September 30, (millions) 2018 2017 2018 2017 Derivatives Net reclassification from AOCI for cash flow hedges included in cost of products sold $ (1 ) $ (1 ) $ (3 ) $ (2 ) Less: Income tax benefit on reclassification from AOCI included in income tax expense — (1 ) — (1 ) Net amount reclassified from AOCI $ (1 ) $ — $ (3 ) $ (1 ) Defined Benefit Plans Net reclassification in AOCI for amortization of prior service cost included in other income, net $ (2 ) $ (3 ) $ (6 ) $ (10 ) Net reclassification from AOCI for amortization of prior service cost included in (loss) income from discontinued operations, net of tax — — — (8 ) Less: Income tax benefit on reclassification from AOCI included in income tax expense (1 ) (2 ) (2 ) (5 ) Net amount reclassified from AOCI $ (1 ) $ (1 ) $ (4 ) $ (13 ) Foreign Currency Translation Net reclassification from AOCI for translation gains realized upon the sale of foreign equity method investment included in other (expense) income, net $ — $ — $ (6 ) $ — Less: Income tax expense on reclassification from AOCI included in income tax expense (benefit) — — (2 ) — Net amount reclassified from AOCI $ — $ — $ (4 ) $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | Our income tax expense and effective tax rate for the three and nine months ended September 30 were as follows: Three months ended September 30, Nine months ended September 30, (dollars in millions) 2018 2017 2018 2017 Income tax expense $ 15 $ 27 $ 37 $ 76 Effective tax rate 20.5 % 29.0 % 19.6 % 31.3 % |
Organization, Consolidation a_4
Organization, Consolidation and Presentation of Financial Statements - Segments (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 5 |
Organization, Consolidation a_5
Organization, Consolidation and Presentation of Financial Statements - Presentation of Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Gross profit | $ 152 | $ 162 | $ 475 | $ 489 | ||
Operating profit | 69 | 91 | 190 | 270 | ||
Other income, net | 4 | 1 | 4 | 5 | ||
Net income | 59 | 66 | 154 | 157 | ||
Retained earnings (accumulated deficit) | $ (585) | $ (585) | $ (669) | |||
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 | |||||
Adjustment for Adoption of ASU 2017-07 | Accounting Standards Update 2017-07 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Gross profit | (1) | (6) | ||||
Operating profit | (2) | (10) | ||||
Other income, net | 2 | 10 | ||||
Net income | 0 | 0 | ||||
As Previously Reported | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Gross profit | 163 | 495 | ||||
Operating profit | 93 | 280 | ||||
Other income, net | (1) | (5) | ||||
Net income | $ 66 | $ 157 |
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 | 15 |
Fair value of intangible assets acquired | 20 |
Goodwill, acquired | $ 15 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Dispositions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on disposition, net of tax | $ (9) | $ 10 | |||
L&W Supply | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on disposition, net of tax | 9 | ||||
Sales to discontinued operations previously eliminated in consolidation | $ 120 | $ 122 | $ 337 | 387 | |
Cash consideration for discontinued operation | $ 131 | $ 112 | $ 342 | $ 364 |
Equity Method Investments - Sch
Equity Method Investments - Schedule of Equity Method Investments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Aug. 28, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | $ 671 | $ 686 | |
USG Boral Building Products | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | $ 669 | $ 679 | |
Ownership Percentage | 50.00% | 50.00% | 50.00% |
Other equity method investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | $ 2 | $ 7 | |
Other equity method investments | Minimum | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Percentage | 33.00% | ||
Other equity method investments | Maximum | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership Percentage | 50.00% | 50.00% |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Aug. 28, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Dividends received from equity method investments | $ 16,000,000 | $ 23,000,000 | ||||
Receipt of collection on loan from former joint venture | $ 2,000,000 | 2,000,000 | $ 0 | |||
Interest of joint venture | 33.00% | |||||
Proceeds from divestiture of joint venture | $ 3,000,000 | |||||
Loss on sale of investment | 8,000,000 | |||||
Loss on sale of investments, net of tax | 5,000,000 | |||||
USG Boral Building Products | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Loan receivable from related party | $ 11,000,000 | $ 11,000,000 | $ 13,000,000 | |||
USG Boral Building Products | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Joint venture (percentage) | 50.00% | 50.00% | 50.00% | 50.00% | ||
Dividends received from equity method investments | $ 16,000,000 | |||||
Undistributed earnings | $ 78,000,000 | 78,000,000 | ||||
Contingent consideration for second performance period | $ 50,000,000 | $ 50,000,000 | ||||
Equity method investment, performance target | 5 years |
Equity Method Investments - Tra
Equity Method Investments - Translation Gains or Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
Translation (loss) gain | $ 4 | $ 10 | $ (22) | $ 58 |
USG Boral Building Products | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Translation (loss) gain | $ (7) | $ 5 | $ (28) | $ 28 |
Equity Method Investments - Sum
Equity Method Investments - Summarized Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
USG share of income from investment accounted for using the equity method | $ 33 | $ 42 | ||
USG Boral Building Products | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Net sales | $ 305 | $ 324 | 889 | 887 |
Gross profit | 81 | 98 | 243 | 275 |
Operating profit | 32 | 43 | 91 | 118 |
Income from continuing operations before income taxes | 36 | 47 | 103 | 129 |
Net income | 24 | 32 | 69 | 86 |
Net income attributable to USG Boral Building Products | 24 | 30 | 67 | 83 |
USG share of income from investment accounted for using the equity method | $ 12 | $ 15 | $ 33 | $ 42 |
Segments - Reportable Segments
Segments - Reportable Segments (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 5 | |||
Net Sales: | ||||
Total net sales | $ 851 | $ 795 | $ 2,517 | $ 2,373 |
Operating Profit (Loss): | ||||
Total | 69 | 91 | 190 | 270 |
U.S. Wallboard and Surfaces | ||||
Net Sales: | ||||
Total net sales | 456 | 1,348 | ||
U.S. Performance Materials | ||||
Net Sales: | ||||
Total net sales | 95 | 279 | ||
U.S. Ceilings | ||||
Net Sales: | ||||
Total net sales | 132 | 382 | ||
Canada | ||||
Net Sales: | ||||
Total net sales | 102 | 317 | ||
Other | ||||
Net Sales: | ||||
Total net sales | 66 | 191 | ||
Operating segments | ||||
Net Sales: | ||||
Total net sales | 907 | 2,691 | ||
Operating segments | Wallboard | ||||
Net Sales: | ||||
Total net sales | 338 | 996 | ||
Operating segments | Surfaces and industrial products | ||||
Net Sales: | ||||
Total net sales | 173 | 529 | ||
Operating segments | Underlayment | ||||
Net Sales: | ||||
Total net sales | 83 | 243 | ||
Operating segments | Building envelope and structural | ||||
Net Sales: | ||||
Total net sales | 21 | 64 | ||
Operating segments | Ceiling tile and grid | ||||
Net Sales: | ||||
Total net sales | 140 | 418 | ||
Operating segments | Specialty ceilings | ||||
Net Sales: | ||||
Total net sales | 18 | 55 | ||
Operating segments | Other products | ||||
Net Sales: | ||||
Total net sales | 46 | 137 | ||
Operating segments | Total product sales | ||||
Net Sales: | ||||
Total net sales | 819 | 2,442 | ||
Operating segments | Other miscellaneous sales | ||||
Net Sales: | ||||
Total net sales | 88 | 249 | ||
Operating segments | U.S. Wallboard and Surfaces | ||||
Net Sales: | ||||
Total net sales | 487 | 466 | 1,440 | 1,417 |
Operating Profit (Loss): | ||||
Total | 64 | 71 | 194 | 228 |
Operating segments | U.S. Wallboard and Surfaces | Wallboard | ||||
Net Sales: | ||||
Total net sales | 253 | 743 | ||
Operating segments | U.S. Wallboard and Surfaces | Surfaces and industrial products | ||||
Net Sales: | ||||
Total net sales | 145 | 441 | ||
Operating segments | U.S. Wallboard and Surfaces | Underlayment | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Wallboard and Surfaces | Building envelope and structural | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Wallboard and Surfaces | Ceiling tile and grid | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Wallboard and Surfaces | Specialty ceilings | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Wallboard and Surfaces | Other products | ||||
Net Sales: | ||||
Total net sales | 25 | 75 | ||
Operating segments | U.S. Wallboard and Surfaces | Total product sales | ||||
Net Sales: | ||||
Total net sales | 423 | 1,259 | ||
Operating segments | U.S. Wallboard and Surfaces | Other miscellaneous sales | ||||
Net Sales: | ||||
Total net sales | 64 | 181 | ||
Operating segments | U.S. Performance Materials | ||||
Net Sales: | ||||
Total net sales | 101 | 92 | 298 | 278 |
Operating Profit (Loss): | ||||
Total | (1) | 6 | (6) | 20 |
Operating segments | U.S. Performance Materials | Wallboard | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Performance Materials | Surfaces and industrial products | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Performance Materials | Underlayment | ||||
Net Sales: | ||||
Total net sales | 69 | 204 | ||
Operating segments | U.S. Performance Materials | Building envelope and structural | ||||
Net Sales: | ||||
Total net sales | 21 | 62 | ||
Operating segments | U.S. Performance Materials | Ceiling tile and grid | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Performance Materials | Specialty ceilings | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Performance Materials | Other products | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Performance Materials | Total product sales | ||||
Net Sales: | ||||
Total net sales | 90 | 266 | ||
Operating segments | U.S. Performance Materials | Other miscellaneous sales | ||||
Net Sales: | ||||
Total net sales | 11 | 32 | ||
Operating segments | U.S. Ceilings | ||||
Net Sales: | ||||
Total net sales | 143 | 125 | 420 | 355 |
Operating Profit (Loss): | ||||
Total | 24 | 25 | 66 | 68 |
Operating segments | U.S. Ceilings | Wallboard | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Ceilings | Surfaces and industrial products | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Ceilings | Underlayment | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Ceilings | Building envelope and structural | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | U.S. Ceilings | Ceiling tile and grid | ||||
Net Sales: | ||||
Total net sales | 122 | 359 | ||
Operating segments | U.S. Ceilings | Specialty ceilings | ||||
Net Sales: | ||||
Total net sales | 15 | 48 | ||
Operating segments | U.S. Ceilings | Other products | ||||
Net Sales: | ||||
Total net sales | 1 | 1 | ||
Operating segments | U.S. Ceilings | Total product sales | ||||
Net Sales: | ||||
Total net sales | 138 | 408 | ||
Operating segments | U.S. Ceilings | Other miscellaneous sales | ||||
Net Sales: | ||||
Total net sales | 5 | 12 | ||
Operating segments | Canada | ||||
Net Sales: | ||||
Total net sales | 110 | 100 | 342 | 300 |
Operating Profit (Loss): | ||||
Total | 6 | 3 | 16 | 7 |
Operating segments | Canada | Wallboard | ||||
Net Sales: | ||||
Total net sales | 65 | 196 | ||
Operating segments | Canada | Surfaces and industrial products | ||||
Net Sales: | ||||
Total net sales | 21 | 67 | ||
Operating segments | Canada | Underlayment | ||||
Net Sales: | ||||
Total net sales | 3 | 8 | ||
Operating segments | Canada | Building envelope and structural | ||||
Net Sales: | ||||
Total net sales | 0 | 1 | ||
Operating segments | Canada | Ceiling tile and grid | ||||
Net Sales: | ||||
Total net sales | 10 | 34 | ||
Operating segments | Canada | Specialty ceilings | ||||
Net Sales: | ||||
Total net sales | 3 | 7 | ||
Operating segments | Canada | Other products | ||||
Net Sales: | ||||
Total net sales | 2 | 10 | ||
Operating segments | Canada | Total product sales | ||||
Net Sales: | ||||
Total net sales | 104 | 323 | ||
Operating segments | Canada | Other miscellaneous sales | ||||
Net Sales: | ||||
Total net sales | 6 | 19 | ||
Operating segments | Other | ||||
Net Sales: | ||||
Total net sales | 66 | 63 | 191 | 178 |
Operating Profit (Loss): | ||||
Total | 4 | 6 | 12 | 8 |
Operating segments | Other | Wallboard | ||||
Net Sales: | ||||
Total net sales | 20 | 57 | ||
Operating segments | Other | Surfaces and industrial products | ||||
Net Sales: | ||||
Total net sales | 7 | 21 | ||
Operating segments | Other | Underlayment | ||||
Net Sales: | ||||
Total net sales | 11 | 31 | ||
Operating segments | Other | Building envelope and structural | ||||
Net Sales: | ||||
Total net sales | 0 | 1 | ||
Operating segments | Other | Ceiling tile and grid | ||||
Net Sales: | ||||
Total net sales | 8 | 25 | ||
Operating segments | Other | Specialty ceilings | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Operating segments | Other | Other products | ||||
Net Sales: | ||||
Total net sales | 18 | 51 | ||
Operating segments | Other | Total product sales | ||||
Net Sales: | ||||
Total net sales | 64 | 186 | ||
Operating segments | Other | Other miscellaneous sales | ||||
Net Sales: | ||||
Total net sales | 2 | 5 | ||
Eliminations | ||||
Net Sales: | ||||
Total net sales | (56) | (51) | (174) | (155) |
Eliminations | U.S. Wallboard and Surfaces | ||||
Net Sales: | ||||
Total net sales | (31) | (92) | ||
Eliminations | U.S. Performance Materials | ||||
Net Sales: | ||||
Total net sales | (6) | (19) | ||
Eliminations | U.S. Ceilings | ||||
Net Sales: | ||||
Total net sales | (11) | (38) | ||
Eliminations | Canada | ||||
Net Sales: | ||||
Total net sales | (8) | (25) | ||
Eliminations | Other | ||||
Net Sales: | ||||
Total net sales | 0 | 0 | ||
Corporate | ||||
Operating Profit (Loss): | ||||
Total | $ (28) | $ (20) | $ (92) | $ (61) |
Marketable Securities - Reporte
Marketable Securities - Reported on AOCI (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 99 | $ 99 |
Fair Value | 99 | 99 |
Corporate debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 74 | 68 |
Fair Value | 74 | 68 |
U.S. government and agency debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 3 | 6 |
Fair Value | 3 | 6 |
Asset-backed debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 14 | 11 |
Fair Value | 14 | 11 |
Certificates of deposit | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 7 | 13 |
Fair Value | 7 | 13 |
Municipal debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 1 | 1 |
Fair Value | $ 1 | $ 1 |
Marketable Securities - Contrac
Marketable Securities - Contractual Maturities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Amortized Cost | ||
Due in 1 year or less | $ 61 | |
Due in 1-5 years | 38 | |
Total marketable securities | 99 | $ 99 |
Fair Value | ||
Due in 1 year or less | 61 | |
Due in 1-5 years | 38 | |
Total marketable securities | $ 99 | $ 99 |
Debt - Schedule of Long-Term De
Debt - Schedule of Long-Term Debt Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Total debt | $ 1,089 | $ 1,089 |
Less: Unamortized debt issuance costs | 10 | 11 |
Total long term debt net of unamortized debt issuance costs | $ 1,079 | 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 - Senior Notes and Credit
Debt - Senior Notes and Credit Facility (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | |
Issuance and Repurchase of Senior Notes | |||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 0 | $ 22,000,000 | |
4.875% senior notes due 2027 | |||||
Issuance and Repurchase of Senior Notes | |||||
Debt instrument interest rate | 4.875% | 4.875% | |||
Senior Notes | |||||
Issuance and Repurchase of Senior Notes | |||||
Aggregate consideration of debt repurchase amount | $ 536,000,000 | ||||
Debt premium | 20,000,000 | ||||
Accrued interest | 16,000,000 | ||||
Loss on extinguishment of debt | 21,000,000 | ||||
Senior Notes | 4.875% senior notes due 2027 | |||||
Issuance and Repurchase of Senior Notes | |||||
Face amount of debt | $ 500,000,000 | ||||
Debt instrument interest rate | 4.875% | ||||
Debt issuance costs | $ 7,000,000 | ||||
Senior Notes | 7.75% senior notes due 2018 | |||||
Issuance and Repurchase of Senior Notes | |||||
Debt instrument interest rate | 7.75% | ||||
Credit facility | Credit facility | |||||
Issuance and Repurchase of Senior Notes | |||||
Loss on extinguishment of debt | $ 1,000,000 | ||||
Credit Facility | |||||
Maximum borrowing limit | $ 220,000,000 | $ 220,000,000 | |||
Borrowing available under credit facility | 198,000,000 | 198,000,000 | |||
Outstanding lines of credit | 0 | 0 | |||
Amount of letters of credit outstanding | $ 22,000,000 | $ 22,000,000 |
Debt - Fair Value and Accrued I
Debt - Fair Value and Accrued Interest (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Fair value of debt | $ 1,103 | $ 1,134 |
Accrued interest | $ 13 | $ 12 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) MMBTU in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)MMBTU | Sep. 30, 2017USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Typical hedging period | 5 years | |||
Net liability aggregate fair value | $ 11,000,000 | $ 11,000,000 | ||
Collateral provided to counterparties related to derivatives | 9,000,000 | $ 9,000,000 | ||
Cash flow hedging | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional amount of commodity instruments (in mmbtu) | MMBTU | 45 | |||
Loss on cash flow hedge ineffectiveness | 0 | $ 0 | $ 0 | $ 0 |
Cash flow hedging | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Loss on cash flow hedge ineffectiveness | 0 | $ 0 | 0 | $ 0 |
Purchases of products and services | Cash flow hedging | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Notional amounts of foreign exchange forward contracts | $ 108,000,000 | $ 108,000,000 |
Derivative Instruments - Pretax
Derivative Instruments - Pretax Effects of Derivative Instruments on Consolidated Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 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) | $ (1) | $ (5) | $ 1 | $ (18) |
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | (1) | (1) | (3) | (2) |
Derivatives in Cash Flow Hedging Relationships | Cash flow hedging | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion) | 0 | (2) | (3) | (12) |
Derivatives in Cash Flow Hedging Relationships | Cash flow hedging | Commodity contracts | Cost of products sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | (1) | (1) | (3) | (2) |
Derivatives in Cash Flow Hedging Relationships | Cash flow hedging | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives (Effective Portion) | (1) | (3) | 4 | (6) |
Derivatives in Cash Flow Hedging Relationships | Cash flow hedging | Foreign exchange contracts | Cost of products sold | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain or (Loss) Reclassified from AOCI into Income (Effective Portion) | $ 0 | $ 0 | 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 | Sep. 30, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 5 | $ 2 |
Derivative liabilities | 16 | 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 | 5 | 2 |
Derivative liabilities | 16 | 17 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Commodity contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 2 | 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 | 5 | 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 | 2 | 0 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 0 | 0 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Accrued expenses | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | 0 | 3 |
Cash flow hedging | Derivatives in Cash Flow Hedging Relationships | Foreign exchange contracts | Other liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 119 | $ 148 |
Equity mutual funds | 6 | 6 |
Derivative assets | 5 | 2 |
Derivative liabilities | (16) | (17) |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 74 | 68 |
U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 3 | 6 |
Asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 14 | 11 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 7 | 13 |
Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 1 | 1 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 90 | 124 |
Equity mutual funds | 6 | 6 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 1 | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 1 | Asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 1 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 1 | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 29 | 24 |
Equity mutual funds | 0 | 0 |
Derivative assets | 5 | 2 |
Derivative liabilities | (16) | (17) |
Level 2 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 74 | 68 |
Level 2 | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 3 | 6 |
Level 2 | Asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 14 | 11 |
Level 2 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 7 | 13 |
Level 2 | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 1 | 1 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Equity mutual funds | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 3 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 3 | U.S. government and agency debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 3 | Asset-backed debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 3 | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Level 3 | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | $ 1 | $ 0 | $ 2 | $ (10) |
Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost of benefits earned | 13 | 11 | 37 | 32 |
Interest cost on projected benefit obligation | 15 | 15 | 47 | 46 |
Expected return on plan assets | (24) | (23) | (72) | (69) |
Settlement | 0 | 3 | 0 | 23 |
Net amortization | 8 | 6 | 24 | 16 |
Net pension and postretirement cost (benefit) | 12 | 12 | 36 | 48 |
Postretirement | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost of benefits earned | 1 | 0 | 3 | 2 |
Interest cost on projected benefit obligation | 1 | 2 | 3 | 4 |
Net amortization | (6) | (6) | (18) | (18) |
Net pension and postretirement cost (benefit) | $ (4) | (4) | $ (12) | (12) |
L&W Supply | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | $ 1 | $ 1 |
Employee Retirement Plans - Nar
Employee Retirement Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Loss due to settlement | $ 0 | $ 3 | $ 0 | $ 23 |
Contribution by employer | 50 | |||
Estimated total contributions in current year | $ 60 | 60 | ||
Pension | Canada | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contribution by employer | 4 | |||
Supplemental pension plan | United States | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Contribution by employer | $ 1 | |||
USG Corporation Pension Plan - L&W Supply | Income from Discontinued Operations | Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Loss due to settlement | 13 | |||
USG Corporation Pension Plan - L&W Supply | Other (expense) income, net | Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Loss due to settlement | $ 3 | $ 10 |
Share-Based Compensation - Awar
Share-Based Compensation - Awards Granted (Details) - USD ($) | Oct. 02, 2018 | Sep. 30, 2018 |
MSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 428,574 | |
Weighted average fair value (in dollars per share) | $ 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 (in shares) | 103,819 | |
Weighted average fair value (in dollars per share) | $ 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 (e) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 44,000 | |
Weighted average fair value (in dollars per share) | $ 36.92 | |
Subsequent Event | Unvested RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards granted (in shares) | 3,812 |
Share-Based Compensation - Term
Share-Based Compensation - Terms of Awards Granted (Details) | 9 Months Ended |
Sep. 30, 2018 | |
MSUs | |
Share Based Compensation [Abstract] | |
Minimum of range for number of shares earned | 0.00% |
Maximum of range for number of shares earned | 150.00% |
Vesting period | 3 years |
Performance Shares | |
Share Based Compensation [Abstract] | |
Minimum of range for number of shares earned | 0.00% |
Maximum of range for number of shares earned | 200.00% |
Vesting period | 3 years |
RSUs (e) | |
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 | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
MSUs, performance shares, RSUs and stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0.6 | 0 | 0.8 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 167 | $ 140 |
Work in progress | 43 | 39 |
Raw materials | 78 | 73 |
Total | $ 288 | $ 252 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Accrued Expenses (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Self-insurance reserves | $ 14 | $ 12 |
Employee compensation | 13 | 17 |
Interest | 13 | 12 |
Derivatives | 5 | 9 |
Pension and other postretirement benefits | 17 | 17 |
Environmental | 12 | 17 |
Other | 58 | 51 |
Total | $ 132 | $ 135 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information - Asset Retirement Obligations (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning balance | $ 118 | $ 113 |
Accretion expense | 5 | 5 |
Liabilities incurred | 0 | 3 |
Changes in estimated cash flows | (5) | (4) |
Liabilities settled | (1) | (1) |
Foreign currency translation | 0 | 2 |
Ending balance | $ 117 | $ 118 |
Supplemental Balance Sheet In_6
Supplemental Balance Sheet Information - Asset Dispositions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Jun. 30, 2018 | Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Gain on disposition of assets | $ 13 | |
Gain on disposition of assets, net of tax | $ 9 | $ (10) |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Treasury Stock (Details) - USD ($) shares in Thousands, $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Treasury Stock | ||
Beginning balance | $ (169) | |
Ending balance | $ (209) | |
Treasury Stock | ||
Treasury Shares | ||
Beginning balance (in shares) | (5,571) | 0 |
Repurchase of common stock for tax withholdings related to stock-based compensation (in shares) | (204) | (115) |
Repurchase of common stock under share repurchase program (in shares) | (2,156) | (5,150) |
Stock reissuances (in shares) | 1,175 | 227 |
Ending balance (in shares) | (6,756) | (5,038) |
Treasury Stock | ||
Beginning balance | $ (169) | $ 0 |
Repurchase of common stock for tax withholdings related to stock-based compensation | (7) | (4) |
Repurchase of common stock under share repurchase program | (76) | (153) |
Stock reissuances | 43 | 7 |
Ending balance | $ (209) | $ (150) |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ (389) | |
Other comprehensive income (loss) before reclassifications, net of tax | (19) | $ 35 |
Less: Amounts reclassified from AOCI, net of tax | (11) | (14) |
Net other comprehensive income (loss) | (8) | 49 |
Ending balance | (397) | |
Derivatives | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | 16 | 27 |
Other comprehensive income (loss) before reclassifications, net of tax | 1 | (11) |
Less: Amounts reclassified from AOCI, net of tax | (3) | (1) |
Net other comprehensive income (loss) | 4 | (10) |
Ending balance | 20 | 17 |
Defined Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (297) | (246) |
Other comprehensive income (loss) before reclassifications, net of tax | 2 | (12) |
Less: Amounts reclassified from AOCI, net of tax | (4) | (13) |
Net other comprehensive income (loss) | 6 | 1 |
Ending balance | (291) | (245) |
Foreign Currency Translation | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (108) | (166) |
Other comprehensive income (loss) before reclassifications, net of tax | (22) | 58 |
Less: Amounts reclassified from AOCI, net of tax | (4) | 0 |
Net other comprehensive income (loss) | (18) | 58 |
Ending balance | (126) | (108) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (389) | (385) |
Ending balance | $ (397) | $ (336) |
Stockholders' Equity - Amounts
Stockholders' Equity - Amounts Reclassified from AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 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 | $ (699) | $ (633) | $ (2,042) | $ (1,884) |
Net reclassification in AOCI for amortization of prior service cost included in other income, net | 4 | 1 | 4 | 5 |
Net reclassification from AOCI for amortization of prior service cost included in (loss) income from discontinued operations, net of tax | 1 | 0 | 2 | (10) |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | (15) | (27) | (37) | (76) |
Net income | 59 | 66 | 154 | 157 |
Amounts reclassified from AOCI, net of tax | Derivatives | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net reclassification from AOCI for cash flow hedges included in cost of products sold | (1) | (1) | (3) | (2) |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | 0 | (1) | 0 | (1) |
Net income | (1) | 0 | (3) | (1) |
Amounts reclassified from AOCI, net of tax | Defined Benefit Plans | ||||
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) | (3) | (6) | (10) |
Net reclassification from AOCI for amortization of prior service cost included in (loss) income from discontinued operations, net of tax | 0 | 0 | 0 | (8) |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | (1) | (2) | (2) | (5) |
Net income | (1) | (1) | (4) | (13) |
Amounts reclassified from AOCI, net of tax | Foreign Currency Translation | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net reclassification from AOCI for amortization of prior service cost included in (loss) income from discontinued operations, net of tax | 0 | 0 | (6) | 0 |
Less: Income tax benefit on reclassification from AOCI included in income tax expense | 0 | 0 | (2) | 0 |
Net income | $ 0 | $ 0 | $ (4) | $ 0 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Equity [Abstract] | |
Estimated after-tax loss on derivatives to be reclassified from AOCI to earnings within the next 12 months | $ 2 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Increase to NOLs | $ 222 | |
Decrease in available foreign tax credit | 78 | |
Valuation allowance on deferred tax assets, due to foreign tax credits | 31 | |
Reduction to valuation allowance on deferred tax assets | 33 | |
Federal net operating loss carryforwards | 564 | |
Foreign deferred tax assets | 148 | |
Minimum taxable income needed to fully realize the U.S. federal net deferred tax assets | 1,361 | |
Deferred tax assets related to state net operating loss and tax credit carryforwards | 161 | |
Valuation allowance on deferred tax assets | $ 142 | $ 175 |
Percentage of change in ownership | 50.00% | |
Period of Change in Ownership | 3 years | |
Approximate annual NOL utilization had an ownership change occurred | $ 139 | |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Federal alternative minimum tax credit carryforwards | $ 19 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 15 | $ 27 | $ 37 | $ 76 |
Effective tax rate | 20.50% | 29.00% | 19.60% | 31.30% |
Litigation - Narrative (Details
Litigation - Narrative (Details) $ in Millions | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015defendantHomebuilder |
Commitments and Contingencies Disclosure [Abstract] | |||
Number of defendants named in class action lawsuits | defendant | 7 | ||
Homebuilders asserting individual claims | Homebuilder | 12 | ||
Accrual for probable and reasonably estimable liability for environmental cleanup | $ | $ 12 | $ 17 |
Merger Agreement - Narrative (D
Merger Agreement - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 09, 2018 | Jun. 10, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2019 |
Gebr. Knauf KG and World Cup Acquisition Corporation | |||||
Business Acquisition [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.10 | ||||
Conversion price (in dollars per share) | $ 43.50 | ||||
Special cash dividend declared (in dollars per share) | $ 0.50 | ||||
Conditional special dividend, amount | $ 70 | ||||
Termination fee, contingency of merger agreement | $ 215 | ||||
Merger related costs | $ 5 | $ 14 | |||
Scenario, Forecast | |||||
Business Acquisition [Line Items] | |||||
Conditional special dividend, additional amount paid to holders of stock options | $ 2 |