Form 8-K USG CORP For: Oct 22

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):�October 23, 2014 (October 22, 2014)

Commission File Number: 1-8864

Check��the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under�any of the following provisions (see General Instruction A.2. below):

� Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

� Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

� Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

� Pre-commencement communications pursuant to Rule 13c-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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On October 22, 2014, USG Corporation (the Company) entered into the Fourth Amendment and Restatement Agreement (the Restatement Agreement), among the Company, certain of the Companys wholly-owned domestic and Canadian subsidiaries, JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the Administrative Agent), and as an issuing bank, JPMorgan Chase Bank, N.A. Toronto Branch (the Canadian Agent), and the lenders party thereto (including as issuing banks), pursuant to which, among other things (1) the Companys Third Amended and Restated Credit Agreement, dated as of December 21, 2010, was amended and restated as the Fourth Amended and Restated Credit Agreement, dated as of October 22, 2014 (the Credit Agreement), among the Company, as the U.S Borrower, CGC Inc., a New Brunswick corporation and wholly-owned indirect subsidiary of the Company, as the Canadian Borrower, the Administrative Agent, the Candian Agent, the lenders party thereto and Bank of America, N.A. and Wells Fargo Bank, National Association, as co-syndication agents, (2) the Canadian Borrower became a party to the Credit Agreement and (3) the maximum borrowing limit under the Credit Agreement was increased from $400 million to $450 million (including a $50 million borrowing sublimit for the Canadian Borrower).��The Companys obligations under the Credit Agreement are secured by trade receivables and inventory of the Company and the Companys material domestic subsidiaries (the U.S Guarantors and together with the Company, the U.S. Loan Parties).��The Canadian Borrowers obligations under the Credit Agreement are secured by trade receivables and inventory of the Company and the Companys material Canadian subsidiaries (the Canadian Guarantors and together with the Canadian Borrower, the Canadian Loan Parties) and the U.S. Guarantors.��The Canadian Loan Parties do not guaranty, nor do their assets secure, any obligations of the Company or the U.S. Loan Parties under the Credit Agreement.��

The Credit Agreement allows for the borrowing of revolving loans (the Revolving Loans) and issuance of letters of credit (up to a maximum of $200 million at any time outstanding, in aggregate, up to $5 million of which can be issued for the benefit of the Canadian Borrower and its subsidiaries) to the Company and its subsidiaries in an aggregate principal amount not to exceed $450 million (as such amount may from time to time be increased in accordance with the following paragraph) at any time outstanding (the Revolving Commitment).��Pursuant to the Credit Agreement, the maximum principal amount of Revolving Loans and letters of credit that may be borrowed by and/or be issued in favor of the Company at any time (the aggregate outstanding amount of which at any time being referred to as the U.S. Revolving Exposure) may not exceed the lesser of (1) the Revolving Commitment at such time (less the sum of the outstanding principal balance of the Revolving Loans and letters of credit made and/or issued to or for the account of the Canadian Borrower at such time, such sum being the Canadian Revolving Exposure) and (2) the excess of (a) a borrowing base determined by reference to the eligible trade receivables and inventory of the Company and the U.S. Guarantors (as more fully described in the Credit Agreement, the U.S. Borrowing Base), minus (b) the amount by which the Canadian Revolving Exposure exceeds the Canadian Borrowing Base (as defined in the Credit Agreement) at such time.��The maximum principal amount of Revolving Loans and letters of credit that may be borrowed by and/or be issued in favor of the Canadian Borrower at any time may not exceed the lesser of (1) $50 million and (2) the sum of a borrowing base determined by reference to the eligible trade receivables and inventory of the Canadian Loan Parties (as more fully described in the Credit Agreement), plus the U.S. Borrowing Base, minus the U.S. Revolving Exposure at such time, but in no event can the sum of the U.S. Revolving Exposure and the Canadian Revolving Exposure exceed the amount of the Revolving Commitment as in effect at such time.

The Revolving Commitment may be increased at the request of the Company and with the agreement of the lenders agreeing to provide increased or new lending commitments, provided that the maximum allowable borrowings after giving effect to the increase may not exceed $650 million.

The Revolving Loans made to the Company or, if denominated in U.S. dollars, to the Canadian Borrower, will bear interest at a floating rate based upon the Alternate Base Rate plus a margin ranging from 0 to 100 basis points or, at the option of the Company (or, if applicable, the Canadian Borrower), the Adjusted LIBO rate (each as described in the Credit Agreement) plus a margin ranging from 100 to 200 basis points.��The Revolving Loans made to the Canadian Borrower in Canadian Dollars will bear interest at a floating rate based upon the Canadian Prime Rate plus a margin ranging from 0 to 100 basis points or, at the option of the Canadian Borrower, CDOR (each as defined in the Credit Agreement) plus a margin ranging from 100 to 200 basis points.��The applicable margins are determined based upon the Companys total net leverage ratio (as calculated as set forth in the Credit Agreement).��A letter of credit fee will accrue on the undrawn face amount of each letter of credit at a per annum rate equal to the applicable margin with respect to the Adjusted LIBO rate and CDOR rate.��In addition, the issuing bank will be entitled to a fronting fee in respect of each letter of credit it issues in an amount equal to 12.5 basis points per annum while such letter of credit remains outstanding.��The Company is also required to pay a quarterly fee of 0.25% on the average unused amount of Revolving Commitment during such quarter.

The Credit Agreement also provides for a revolving swingline loan subfacility for the Company of up to $20 million (subject to the limitations on overall U.S. Revolving Exposure described above).��All swingline loans will bear interest at the Alternate Base Rate plus the applicable margin as described above.��In addition, the Credit Agreement also provides for Revolving Loans that, at the request of the Company or the Canadian Borrower and in the Administrative Agents sole discretion, result in borrowings that exceed the maximum allowable borrowings under the Credit Agreement (but in no event, in excess of the Revolving Commitment, Overadvances).��Overadvances may not exceed $25 million in aggregate at any time outstanding, may not remain outstanding for more than 30 days and will bear interest at the Alternative Base Rate (if denominated in U.S. dollars) or the Canadian Prime Rate (if denominated in Canadian dollars), plus the otherwise applicable margin, plus 2% per annum.

Each of the borrowers may prepay the Revolving Loans under the Credit Agreement in its discretion without premium or penalty.��The Credit Agreement terminates on October 22, 2019 unless terminated earlier in accordance with its terms.��The Credit Agreement includes an earlier termination date which would occur on the 91st day prior to the scheduled maturity of the Companys 2016 and 2018 senior notes unless such notes have either been repaid, defeased in full or their maturity has been extended to a date occurring at least 91 days after the maturity of the Credit Agreement (each a Note Event); provided that notwithstanding that no Note Event has occurred, such early termination date will not be deemed to occur for so long as (x) the Company continues to maintain liquidity (as calculated as set forth in the Credit Agreement) of at least $350 million until a Note Event occurs and (y) immediately following any such Note Event (if any) the Company would have liquidity of at least $250 million after giving effect to the Note Event (and immediately failing which, such early termination date will be deemed to have occurred).

The Credit Agreement contains a financial covenant that would require the Company to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 if Excess Availability (as defined in the Credit Agreement) is less than an amount equal to 10% of the lesser of (a) the aggregate Revolving Commitment at such time and (b) the Aggregate Borrowing Base (as defined in the Credit Agreement) at such time.��The Company would be required to continue to comply with such financial covenant until Excess Availability exceeds such minimum threshold for 30 consecutive calendar days thereafter.

The Credit Agreement also contains customary representations and warranties and usual and customary affirmative and negative covenants that, among other things, restrict the Companys and certain of its subsidiaries ability, in certain circumstances, to (1) incur indebtedness, (2) create liens, (3) merge or consolidate with certain entities, (4) engage in any business other than business of the type or reasonably related to the type conducted on the date of the Credit Agreement, (5) sell, transfer, lease or otherwise dispose of all or substantially all of their assets, (6) issue or sell equity interests of certain of the Companys subsidiaries, (7) make certain investments, loans or advances, (8) engage in certain sale-leaseback transactions, (9) enter into certain swap or similar agreements, (10) make certain dividends, distributions, repurchases and other restricted payments and (11) engage in certain affiliate transactions.��The Credit Agreement also contains certain customary events of default, including, but not limited to, the failure to make required payments, material breaches of representations or warranties, the failure to observe certain covenants or agreements, the failure to pay or default of certain other indebtedness, the failure to maintain the guarantee pursuant to the Guarantee Agreement described below, certain adverse material monetary judgments, bankruptcy, insolvency and a change of control.��Borrowings under the Credit Agreement are subject to acceleration upon the occurrence of events of default.

In connection with the Credit Agreement, the Company, the Canadian Borrower and the U.S. Guarantors and Canadian Guarantors entered into an Amended and Restated Guarantee Agreement dated as of October 22, 2014 (the Guarantee Agreement) in order to (1) amend and restate the Guarantee Agreement, dated as of January 7, 2009 among the Company, the U.S. Guarantors and the Administrative Agent and (2) join the Canadian Guarantors as parties to such agreement, in each case, to facilitate (a) the guarantee by the U.S. Guarantors of the obligations and liabilities of the U.S. Borrower and the Canadian Borrower under the Credit Agreement and (b) the guarantee by the Canadian Guarantors of the obligations and liabilities of the Canadian Borrower under the Credit Agreement.��

In connection with the Credit Agreement, the Company and the U.S. Guarantors also amended and reaffirmed their obligations under the U.S. Pledge and Security Agreement, dated as of January 7, 2009 (the U.S. Pledge and Security Agreement), among the Company, certain of the U.S. Guarantors and the Administrative Agent, pursuant to which the Company and such U.S. Guarantors granted a security interest in all of their trade receivables and inventory, and proceeds in respect thereof, and all related deposit accounts to the Administrative Agent as collateral for borrowings by and other obligations of the Company and the Canadian Borrower under the Credit Agreement and the obligations of the U.S. Loan Parties and the Canadian Loan Parties under the Guarantee Agreement.

In connection with the Credit Agreement, the Canadian Borrower and certain of the Canadian Guarantors entered into a Pledge and Security Agreement, dated as of October 22, 2014 (the Canadian Pledge and Security Agreement), with the Administrative Agent, pursuant to which the Canadian Borrower and such Canadian Guarantors granted a security interest in all or their trade receivables and inventory, and proceeds in respect thereof, and all related deposit accounts to the Administrative Agent as collateral for borrowings by and other obligations of the Canadian Borrower under the Credit Agreement and the obligations of the Canadian Loan Parties under the Guarantee Agreement.

As disclosed under Item 1.02 of this Current Report on Form 8-K, in connection with (and as a condition precedent to) becoming a party to and a borrower under the Credit Agreement, the Canadian Borrower terminated the Canadian Credit Agreement (as defined below).

Copies of the Restatement Agreement, the Credit Agreement, the Guarantee Agreement, the U.S. Pledge and Security Agreement (as amended) and the Canadian Pledge and Security Agreement will be filed as exhibits to the Companys Annual Report on Form 10-K for the year ended December 31, 2014.��The foregoing descriptions of the Restatement Agreement, the Credit Agreement, the Guarantee Agreement, the U.S. Pledge and Security Agreement and the Canadian Pledge and Security Agreement are qualified in their entirety by reference to the full text of such documents.

On October 22, 2014, the Canadian Borrower terminated the Credit Agreement, dated as of June 30, 2009 (as amended, the Canadian Credit Agreement), between the Canadian Borrower and The Toronto-Dominion Bank, and repaid all amounts owing by it to The Toronto-Dominion Bank thereunder without early termination penalties.��The Canadian Credit Agreement allowed for revolving loans and letters of credit (up to Canadian $3 million in aggregate) in an aggregate principal amount not to exceed Canadian $40 million.��The Canadian Credit Agreement was secured by a general security interest in substantially all of the Canadian Borrowers assets other than intellectual property.��The Canadian Credit Agreement was to mature on June 30, 2015, unless terminated earlier in accordance with its terms.

Descriptions of the material terms of the Canadian Credit Agreement were filed in the Companys Current Reports on Form 8-K filed by with the Securities and Exchange Commission on July 7, 2009 and February 3, 2012, and such descriptions are incorporated herein by reference.

On October 23, 2014, the Company issued a press release containing earnings information for the quarter and nine months ended September 30, 2014. A copy of the press release is furnished as Exhibit 99.1 hereto. As previously announced, a conference call and webcast to discuss third quarter 2014 results will be held at 8 a.m. Central Time on October 23, 2014. A copy of the slides to be presented as part of the webcast is furnished as Exhibit 99.2 hereto.

The information contained in this Item 2.02, including the Exhibit hereto, shall not be deemed to be filed for purposes of the Securities Exchange Act of 1934 and it shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933 except as expressly set forth by specific reference in such filing.

The information disclosed under Item 1.01 of this Current Report on Form 8-K relating to the Credit Agreement is incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 99.1

USG Corporation Reports Record Ceilings Results and 2014 Third Quarter Results

CHICAGO--(BUSINESS WIRE)--October 23, 2014--USG Corporation (NYSE: USG):

Third Quarter 2014 vs. Third Quarter 2013

Consolidated Business Highlights

• Sales increased 5 percent to $972 million
• GAAP operating profit of $22 million compared to $75 million
• Adjusted operating profit of $112 million compared to $76 million
• GAAP net loss of ($12) million compared to net income of $23 million
• Adjusted net income of $66 million compared to $24 million
• $48 million settlement in principle for wallboard pricing lawsuit

Business Unit Highlights

• U.S. Gypsum wallboard shipments totaled 1.40 BSF vs. 1.37BSF
• U.S. Gypsum average wallboard price of $164.80 per thousand square feet vs. $154.04
• Ceilings operating profit of $30 million compared to $23 million
• Distribution operating profit of $4 million compared to $3 million
• USG's share of net income from USG Boral Building Products totaled $12 million

USG Corporation (NYSE: USG), a leading building products company, today reported that its third quarter adjusted net income improved by 175% from a year ago, with its Ceilings division delivering record quarterly operating profit.

During the third quarter, we generated our strongest quarterly adjusted EBITDA since 2006, said James S. Metcalf, Chairman, President, and CEO. The improvement in our results is evidence that our Plan to Win is working. Although Im pleased with this progress, the recovery in our end-markets continues to lag our expectations.

Third quarter 2014 net sales of $972 million were up 5 percent from third quarter 2013 net sales of $925 million. USGs third quarter 2014 GAAP operating profit was $22 million compared to $75 million in the third quarter of 2013. Third quarter 2014 GAAP net loss was ($12) million, ($0.09) per diluted share, and ($0.09) per basic share. This compares to net income of $23 million, $0.21 per diluted share, and $0.22 per basic share, in the third quarter of 2013.

USG also reached an agreement in principle to settle all claims made in the direct and indirect purchaser class actions consolidated in the lawsuit, In re: Domestic Wallboard Antitrust Litigation, MDL No. 2437, pending in the United States District Court for the Eastern District of Pennsylvania.�Pursuant to the agreement in principle to settle, which is subject to finalization of a settlement agreement and court approval, USG will make a payment of $48 million.�USG strongly denies any wrong-doing for the claims made in the lawsuits, but settled to avoid the expense, distraction and risk of further litigation. USG expects to make this cash payment within the next twelve months, while recording the $48 million charge in the third quarter of 2014.

It is very disappointing to settle this lawsuit when we strongly believe we have done nothing wrong, Mr. Metcalf said. However, we have to be realistic about the cost and risk a lawsuit like this creates for USG.�Settling allows us to put this issue behind us and continue to focus on serving our customers.�USG has always established its prices and pricing policies independently and in full compliance with the law. In addition, we still expect to achieve our de-levering targets over the planning horizon.

The corporations adjusted operating profit was $112 million in the third quarter of 2014, which includes, among other items, adjusted equity method investment income of $12 million from USG Boral Building Products, compared to an adjusted operating profit of $76 million in the third quarter of 2013. Adjusted net income was $66 million in the third quarter of 2014 compared to an adjusted net income of $24 million in the third quarter of 2013. Adjusted net income in the third quarter of 2014 excludes $48 million for the settlement in principle of its wallboard pricing lawsuit and a $30 million asset impairment charge related to the closure of certain wallboard production lines and facilities, as well as the write off of previously incurred and capitalized costs for the construction of two future wallboard facilities.

Third quarter 2014 adjusted earnings per basic share was $0.45 compared to adjusted earnings per basic share of $0.23 during the third quarter of 2013. A full reconciliation of adjusted equity income from USG Boral Building Products to income from equity method investments, adjusted operating profit to operating profit, adjusted net income to net income, and adjusted earnings per basic share to earnings per basic share is set forth on a schedule attached hereto.

A conference call is being held today at 8:00 A.M. Central Time during which USG senior management will discuss the corporations operating results. The conference call will be webcast on the USG website, www.usg.com, in the Investor Relations section. The dial-in number for the conference call is 1-888-771-4371 (1-847-585-4405 for international callers), and the pass code is 38075413. After the live webcast, a replay of the webcast will be available on the USG website. In addition, a telephonic replay of the call will be available until Thursday, November 6, 2014. The replay dial-in number is 1-888-843-7419 (1-630-652-3042 for international callers), and the pass code is 38075413.

USG Corporation

USG Corporation is a manufacturer and distributor of innovative, high-performance building systems through its United States Gypsum Company, USG Interiors, LLC, and L&W Supply Corporation subsidiaries and its USG Boral Building Products joint venture. Headquartered in Chicago, USG worldwide operations serve the commercial, residential, and repair and remodel construction markets, enabling our customers to build the outstanding spaces where people live, work and play. USG wall, ceiling, exterior sheathing, flooring underlayment and roofing systems provide leading-edge building solutions, while L&W Supply branch locations efficiently stock and deliver building materials throughout the United States. USG Boral Building Products is a leading plasterboard & ceilings joint venture across Asia, Australasia, and the Middle East. USG and its subsidiaries are proud sponsors of the U.S. Olympic and Paralympic teams and the Canadian Olympic team. For additional information, visit www.usg.com.

Non-GAAP Financial Measures

In this press release, the corporations financial results are provided both in accordance with accounting principles generally accepted in the United States of America (GAAP) and using certain non-GAAP financial measures. In particular, the corporation presents the non-GAAP financial measures adjusted operating profit, adjusted net income, adjusted equity income from USG Boral Building Products, and adjusted earnings per basic share, which exclude certain items. In addition, adjusted operating profit includes the corporations income from its equity method investments, including the USG Boral Building Products joint venture. The non-GAAP financial measures are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help investors ability to analyze underlying trends in the corporations business, evaluate its performance relative to other companies in its industry and provide useful information to both management and investors by excluding certain items that may not be indicative of the corporations core operating results. Adjusted operating profit includes the income from the corporation's equity method investments, including the USG Boral Building Products joint venture, because management views the joint venture as a business unit, even though the corporations share of the joint venture is 50%. Further, management believes it is appropriate to exclude the indicated items from income from equity method investments, because the resulting adjusted equity income from USG Boral Building Products can be used to evaluate the financial performance of USG Boral Building Products. In addition, the corporation uses adjusted operating profit and adjusted net income as components in the measurement of incentive compensation. The non-GAAP measures should not be considered a substitute for or superior to GAAP results and may vary from others in the industry. For further information related to the corporations use of non-GAAP financial measures, and reconciliations to the nearest GAAP measures, see the schedules attached hereto.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to managements expectations about future conditions. Actual business, market or other conditions may differ materially from managements expectations and, accordingly, may affect our sales and profitability or other results and liquidity. Actual results may differ materially due to various other factors, including: economic conditions, such as the levels of new home and other construction activity, employment levels, the availability of mortgage, construction and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates and consumer confidence; capital markets conditions and the availability of borrowings under our credit agreement or other financings; our substantial indebtedness and our ability to incur substantial additional indebtedness; competitive conditions, such as price, service and product competition; shortages in raw materials; changes in raw material and energy costs; volatility in the assumptions used to determine the funded status of our pension plans; the loss of one or more major customers and our customers ability to meet their financial obligations to us; capacity utilization rates for us and the industry; our ability to expand into new geographic markets and the stability of such markets; our ability to successfully operate the joint venture with Boral Limited, including risks that our joint venture partner, Boral Limited, may not fulfill its obligations as an investor or may take actions that are inconsistent with our objectives; our ability to protect our intellectual property and other proprietary rights; changes in laws or regulations, including environmental and safety regulations; the satisfactory performance of certain business functions by third party service providers; our ability to achieve anticipated savings from cost reduction programs; the outcome in contested litigation matters; the effects of acts of terrorism or war upon domestic and international economies and financial markets; and acts of God. We assume no obligation to update any forward-looking information contained in this press release. Additional information concerning these and other factors may be found in our filings with the Securities and Exchange Commission, including the Risk Factors in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarters ended June 30, 2014.

CONTACT:
USG Corporation
Media
Sasha Bigda
(312) 436-6511
[email protected]
or
Investors
Matthew Ackley
(312) 436-6263
[email protected]

Exhibit 99.2

October 23, 2014 USG Corporation Third Quarter 2014 Earnings Conference Call and Webcast

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to managements expectations about future conditions. Actual business, market or other conditions may differ materially from managements expectations and, accordingly, may affect our sales and profitability or other results and liquidity. Actual results may differ materially due to various other factors, including: economic conditions, such as the levels of new home and other construction activity, employment levels, the availability of mortgage, construction and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates and consumer confidence; capital markets conditions and the availability of borrowings under our credit agreement or other financings; our substantial indebtedness and our ability to incur substantial additional indebtedness; competitive conditions, such as price, service and product competition; shortages in raw materials; changes in raw material and energy costs; volatility in the assumptions used to determine the funded status of our pension plans; the loss of one or more major customers and our customers ability to meet their financial obligations to us; capacity utilization rates for us and the industry; our ability to expand into new geographic markets and the stability of such markets; our ability to successfully operate the joint venture with Boral Limited, including risks that our joint venture partner, Boral Limited, may not fulfill its obligations as an investor or may take actions that are inconsistent with our objectives; our ability to protect our intellectual property and other proprietary rights; changes in laws or regulations, including environmental and safety regulations; the satisfactory performance of certain business functions by third party service providers; our ability to achieve anticipated savings from cost reduction programs; the outcome in contested litigation matters; the effects of acts of terrorism or war upon domestic and international economies and financial markets; and acts of God. We assume no obligation to update any forward-looking information contained in this presentation. Additional information concerning these and other factors may be found in our filings with the Securities and Exchange Commission, including the Risk Factors in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarter ended June 30, 2014. CAUTIONARY STATEMENTS

USG Corporation Third Quarter 2014 Agenda Overview and Strategy Financial Results Building on the Recovery Questions Closing Remarks James S. Metcalf Chairman, President and CEO Matthew F. Hilzinger Executive VP, Chief Financial Officer James S. Metcalf Chairman, President and CEO James S. Metcalf Chairman, President and CEO

THIRD QUARTER 2014 GAAP RESULTS1��1. Effective April 1, 2014, we changed the composition of our reportable segments, accordingly prior year information has been recast to conform to the new segment structure. The recast historical segment data reflecting these changes was disclosed in our Form 8-K filed on July 24, 2014. 2. Ceilings sales for the current period exclude the results of the wholly owned subsidiaries and consolidated joint ventures that were contributed into UBBP, while the comparative period still reflects these sales as they were part of the consolidated group. $ Millions Q3 2014 Q3 2013 Change Gypsum Sales $621 $580 $41 Ceilings Sales2 $137 $146 ($9) Distribution Sales $359 $331 $28 Eliminations ($145) ($132) ($13) TOTAL USG CORPORATION  GAAP $972 $925 $47 Gypsum Operating Profit $12 $75 ($63) Ceilings Operating Profit $30 $23 $7 Distribution Operating Profit $4 $3 $1 Corporate and Eliminations ($24) ($26) $2 TOTAL USG CORPORATION  GAAP $22 $75 ($53) USG Boral Building Products (UBBP) Sales $286 $286 USG Boral Building Products (UBBP) Operating Profit $31 $31 USGs EQUITY INCOME FROM UBBP $12 $12 2 2

PLAN TO WIN Strengthen the Core��North American Manufacturing and Distribution De-lever our balance sheet Diversify the sources of our earnings - Strategic geographic extensions USG Boral Building Products Adjacent products/systems Differentiate through innovation Differentiate USG in the market��Focus on high performance products and solutions that improve energy efficiency, sustainability, and speed of construction

USG Corporation Third Quarter 2014 Agenda Overview and Strategy Financial Results Building on the Recovery Questions Closing Remarks James S. Metcalf Chairman, President and CEO Matthew F. Hilzinger Executive VP, Chief Financial Officer James S. Metcalf Chairman, President and CEO James S. Metcalf Chairman, President and CEO

$ Millions (except EPS) Q3 2014 Q3 2013 Net Sales $972 $925 Gross Profit $176 $155 % of Net Sales 18.1% 16.8% SG&A $76 $80 Operating Profit $22 $75 Interest Expense $43 $51 GAAP Net Income (Loss) ($12) $23 Diluted Earnings (Loss) Per Share ($0.09) $0.21 Loss from discontinued operations, net of tax  $1 Litigation settlement charge $48  Long-lived asset impairment charges $30  Adjusted Net Income1 $66 $24 Adjusted Diluted EPS2 $0.44 $0.22 1. See reconciliation to GAAP net income (loss) on slide 23. 2. See reconciliation to GAAP diluted earnings (loss) per share on slide 27. Q3 2014 CONSOLIDATED FINANCIAL RESULTS

$ Millions Q3 2014 Q3 2013 Change Gypsum Adjusted Operating Profit1 $90 $76 $14 Ceilings Adjusted Operating Profit1 $30 $23 $7 Distribution Adjusted Operating Profit1 $4 $2 $2 USG'S Adjusted Equity Income from USG Boral Building Products2 $12  $12 Equity Income from other joint ventures  $1 ($1) Corporate and Eliminations Adjusted Operating Profit/(Loss)1 ($24) ($26) $2 USG Consolidated Adjusted Operating Profit1 $112 $76 $36 Gypsum DD&A $30 $29 $1 Ceilings DD&A $3 $4 ($1) Distribution DD&A $3 $3  Corporate and Eliminations DD&A3 $1 $1  USG Consolidated DD&A $37 $37  Gypsum Adjusted EBITDA4 $122 $106 $16 Ceilings Adjusted EBITDA4 $33 $27 $6 Distribution Adjusted EBITDA4 $7 $5 $2 USGs share of USG Boral Building Products Adjusted EBITDA5 $20  $20 Corporate and Eliminations Adjusted EBITDA4 ($17) ($19) $2 USG Consolidated Adjusted EBITDA4 $165 $119 $46 1. See a full reconciliation to GAAP operating profit on slide 22. 2. See a full reconciliation to GAAP income from equity method investments on slide 25. 3. Depreciation, Depletion and Amortization for Corporate and Eliminations excludes amortization of debt discount which is included in interest expense. 4. See the reconciliation on slide 24. 5. See reconciliation to USG Boral net income on slide 26. 6. See discussion of changes to our reportable segments in footnote 1 on slide 4. QUARTERLY SUMMARY BY BUSINESS UNIT 6

Q3 2014 Highlights Wallboard price and volume drove $17MM in incremental operating profit Joint Treatment operating profit improved by 6% year-over-year due to price and volume growth Asset impairment of $30 million related to idled facilities Reached $48 million settlement in principle for wallboard pricing lawsuit GYPSUM 1. See discussion of changes to our reportable segments in footnote 1 on slide 4. 2. See reconciliation to GAAP operating profit on slide 22. Revenue $ Millions Operating Profit $ Millions Q3 2013 Operating Profit $75 US Wallboard Margin $15 US Wallboard Volume $2 Surfaces, Substrates, and GTL $7 Asset Retirement Obligation ($1) IT and Miscellaneous Costs ($8) Long-lived Asset Impairment Charges ($30) Litigation Settlement Charge ($48) Q3 2014 Operating Profit $12 $ Millions Q3 2014 Q3 2013 Variance Net Sales $621 $580 $41 Operating Profit $12 $75 ($63) Adjustments2 $78 $1 $77 Adjusted Operating Profit2 $90 $76 $14 DD&A $30 $29 $1 1 1 3 3. Operating profit includes $30 million asset impairment charge and a $48 million charge for the settlement in principle of U.S. wallboard pricing lawsuit.

UNITED STATES QUARTERLY WALLBOARD REALIZED SELLING PRICES��Q3 2014 Q2 2014 Q3 2013 Domestic Price1 $173.15 $174.32 $159.90 Effect of Sales to Foreign Customers ($8.35) ($7.01) ($5.86) Average Realized Selling Price2 $164.80 $167.31 $154.04 Wallboard price reflects amount per one thousand square feet 1. Domestic price excludes all wallboard sales to customers outside of the United States. 2. Our average realized selling price reflects all US Gypsum shipments, including domestically produced products that are sold outside of the U.S.

Including the current quarters permanent closure of 640 million square feet of wallboard capacity, we have permanently closed approximately 2.5 billion square feet of our highest-cost wallboard manufacturing capacity since 2007 Gypsum Asset Impairments Description of Asset Q3 2014 Impairment Charges $ Millions Wallboard lines or facilities1 $16 Previously incurred costs related to construction of future facilities $12 Paper mill and other $2 Total Q3 2014 impairment charges $30 1. Wallboard lines permanently closed in Q3 2014 are Detroit and New Orleans. We continue to idle our Empire, Nevada and Stony Point, New York facilities and our wallboard line in Baltimore. No new facilities were idled during the quarter

Q3 2014 Highlights Generated record quarterly operating profits, driven by price and mix The choppy commercial market continues to impact our volumes, which were flat during the quarter Q3 2013 Operating Profit $23 Tile & Grid Price $4 Tile & Grid Cost ($2) Canada and USG International $1 Environmental Charge in Q3 2013 $3 Other Costs $1 Q3 2014 Operating Profit $30 $ Millions Q3 2014 Q3 2013 Variance Net Sales $137 $146 ($9) Operating Profit $30 $23 $7 Adjustments3 Adjusted Operating Profit3 $30 $23 $7 DD&A $3 $4 ($1) CEILINGS 1. See discussion of changes to our reportable segments footnote 1 on slide 4. 2. Excluding the sales for entities contributed to UBBP, the variance would have been a $4 million improvement. See slide 13. 3. See reconciliation to GAAP operating profit on slide 22. Revenue $ Millions Operating Profit $ Millions 1 1 2

CEILINGS REVENUE RECONCILIATION Q3 2013 Net Sales1 Net Sales of Entities Contributed to UBBP Q3 2013 Adjusted Net Sales2 Q3 2014 Net Sales3 Variance $146 ($13) $133 $137 $4 1. See discussion of changes to our reportable segments in Footnote 1 on slide 4. 2. USG Internationals net sales for the three months ended September 30, 2013 as originally reported include the results of our wholly-owned subsidiaries and consolidated joint ventures for the respective time period as those entities were not contributed to UBBP until February 27, 2014. As such, we have adjusted the net sales for the three months ended September 30, 2013 to exclude the $13 million in net sales attributable to the entities contributed to UBBP in order to provide comparative net sales metrics. 3. Net sales for the three months ended September 30, 2014 have not been adjusted as our wholly-owned subsidiaries and consolidated joint ventures were contributed to UBBP on February 27, 2014, and therefore already exclude the sales of those contributed entities.

Q3 2014 Highlights Same store sales increase of 8% Wallboard volumes improved by 8% Slight growth in steel sales is evidence of the ongoing choppiness in our commercial end-market Q3 2013 Operating Profit $3 Wallboard Margin and Volume $3 Ceilings $1 Other Core Products $1 COGS/Overhead ($3) Restructuring Charge in Q3 2013 ($1) Q3 2014 Operating Profit $4 $ Millions Q3 2014 Q3 2013 Variance Net Sales $359 $331 $28 Operating Profit $4 $3 $1 Adjustments1 ($1) $1 Adjusted Operating Profit1 $4 $2 $2 DD&A $3 $3 DISTRIBUTION Revenue $ Millions Operating Profit $ Millions 1. See reconciliation to GAAP operating profit on slide 22.

Q3 2014 Highlights Completed the first phase of the technology rollout, introducing UltraLight technologies to Australia, South Korea, Thailand, and Indonesia We are seeing strong growth in our adjacent products, like Ceiling Tile and Joint Treatment USG BORAL BUILDING PRODUCTS USG Boral Revenue $ Millions USG Boral Operating Profit $ Millions 3. See a full reconciliation to GAAP operating profit, net income, and income from equity method investments on slide 25. 4. Reflects equity method investment income from those equity method investments held by UBBP. $ Millions Q3 2014 Q3 2013 Variance Total JV Net Sales $286 $286 Total JV Operating Profit $31 $31 Income from equity method investments4 $3 $3 Total JV Adjusted Operating Profit 3 $34 $34 Total JV Adjusted Net Income3 $24��$24 USGs Adjusted Equity Income from UBBP 3 $12 $12 Total JV DD&A $10 $10 Q3 2013 USG's Equity Income from UBBP USG Boral Building Products (UBBP) GAAP $12 Q3 2014 USG's Equity Income from UBBP $12 1. Q1 2014 only includes one month of USG Boral operations due to the joint ventures commencement at the end of February 2014. 2. Q2 2014 operating profit includes $7MM in restructuring charges. 1 2

Q3 2014 CONSOLIDATED FINANCIAL RESULTS $ Millions 9 months ended September 30, 2014 9 months ended September 30, 2013 Cash flow provided by operations $80 $12 Capital Expenditures ($88) ($72) Investments in Joint Ventures ($558) ($5) Net Proceeds from Asset Dispositions $14 $1 Acquisition of Mining Rights ($17) Other $7 ($1) Adjusted cash flow used for investing activities1 ($625) ($94) Cash flow (used for) provided by financing activities ($62) $1 Net cash used for operating activities - discontinued operations ($1) ($1) Effect of exchange rate on cash ($2) ($4) Adjusted decrease in cash and cash equivalents1 ($610) ($86) September 30, 2014 September 30, 2013 Cash and cash equivalents and marketable securities $340 $590 Total liquidity $631 $873 Total debt $2,210 $2,315 1. US GAAP measure of net cash used for investing activities was $585 million in the nine months ended September 30, 2014 and $102 million in the nine months ended September 30, 2013 and includes net (purchases)/sales of marketable securities of $40 million in the nine months ended September 30, 2014 and ($8) million in the nine months ended September 30, 2013.

USG Corporation Third Quarter 2014 Agenda Overview and Strategy Financial Results Building on the Recovery Questions Closing Remarks James S. Metcalf Chairman, President and CEO Matthew F. Hilzinger Executive VP, Chief Financial Officer James S. Metcalf Chairman, President and CEO James S. Metcalf Chairman, President and CEO

Despite the slower pace of new housing starts, we believe that the long-term residential recovery remains intact Repair and remodel continues to be our strongest performing market Commercial demand remains choppy, but we expect the second half of 2014 to be stronger than the first half We believe that 2015 will be better than 2014 in each of our end-markets Q3 2014 Economic Outlook

USG Corporation Third Quarter 2014 Agenda Overview and Strategy Financial Results Building on the Recovery Questions Closing Remarks James S. Metcalf Chairman, President and CEO Matthew F. Hilzinger Executive VP, Chief Financial Officer James S. Metcalf Chairman, President and CEO James S. Metcalf Chairman, President and CEO

USG Corporation Third Quarter 2014 Agenda Overview and Strategy Financial Results Building on the Recovery Questions Closing Remarks James S. Metcalf Chairman, President and CEO Matthew F. Hilzinger Executive VP, Chief Financial Officer James S. Metcalf Chairman, President and CEO James S. Metcalf Chairman, President and CEO

In this presentation, the corporations financial results are provided both in accordance with accounting principles generally accepted in the United States of America (GAAP) and using certain non-GAAP financial measures. In particular, the corporation presents the non-GAAP financial measures adjusted EBITDA, adjusted operating profit, adjusted net income, adjusted equity income of USG Boral Building Products, or UBBP, and adjusted diluted earnings per share, which exclude certain items. In addition, adjusted operating profit on a consolidated basis includes the corporations equity method income from UBBP and USGs other equity method investments, and adjusted EBITDA on a consolidated basis includes the corporations share of UBBPs adjusted EBITDA. Further, management believes it is appropriate to exclude the indicated items from UBBP equity income because the resulting UBBP adjusted equity income can be used to evaluate the financial performance of UBBP. The non-GAAP financial measures are included as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help investors ability to analyze underlying trends in the corporations business, evaluate its performance relative to other companies in its industry and provide useful information to both management and investors by excluding certain items that may not be indicative of the corporations core operating results. Adjusted operating profit includes the adjusted equity method income from UBBP and USGs income from other equity investments and adjusted EBITDA includes the corporations share of UBBPs adjusted EBITDA because management views UBBP and its other equity investments as important businesses. In addition, the corporation uses adjusted operating profit and adjusted net income as components in the measurement of incentive compensation. The non-GAAP measures should not be considered a substitute for or superior to GAAP results and may vary from others in the industry. For further information related to the corporations use of non-GAAP financial measures, and the reconciliations to the nearest GAAP measures, see the schedules attached hereto. Non-GAAP Financial Measures

ADJUSTED OPERATING PROFIT RECONCILED TO GAAP OPERATING PROFIT $ Millions Q3 2014 Q3 2013 Change Reported GAAP Operating Profit Gypsum $12 $75 ($63) Ceilings $30 $23 $7 Distribution $4 $3 $1 Corporate & Eliminations ($24) ($26) $2 TOTAL $22 $75 ($53) Adjustments to GAAP Operating Profit Gypsum litigation settlement charge $48 $48 Gypsum long-lived asset impairment charges $30��$30 Gypsum restructuring charges $1 ($1) Distribution restructuring charges ($1) $1 TOTAL $78 $78 Adjusted Operating Profit Non-GAAP measure Gypsum $90 $76 $14 Ceilings $30 $23 $7 Distribution $4 $2 $2 Corporate, Other & Eliminations ($24) ($26) $2 OTHER ADJUSTMENTS Adjusted Equity Income from UBBP1 $12 $12 Equity Income from other joint ventures $1 ($1) TOTAL ADJUSTED OPERATING PROFIT $112 $76 $36 1. See a full reconciliation to GAAP income from equity method investments on slide 25.

ADJUSTED NET INCOME RECONCILED TO GAAP NET INCOME (LOSS) Q3 2014 Q3 2013 Change Net Income (Loss) GAAP Measure ($12) $23 ($35) Adjustments: Loss from discontinued operations $1 ($1) Litigation settlement charge $48 $48 Long-lived asset impairment charges $30 $30 Adjusted Net Income  Non-GAAP Measure $66 $24 $42

QUARTERLY ADJUSTED EBITDA RECONCILED TO QUARTERLY OPERATING PROFIT Q3 2014 Q3 2013 $ Millions Gyp Ceilings Distr. UBBP Corp/Elim Q3 Gyp Ceilings Distr. Corp/Elim Q3 GAAP Operating profit/(loss) $12 $30 $4 ($24) $22 $75 $23 $3 ($26) $75 Interest expense/(income), net $43 $43 $50 $50 Other (income)/expense, net Income tax expense/(benefit) $2 $2 $2 $2 USG's equity income from UBBP ($12) ($12) Income from other equity method investments ($1) ($1) Income (loss) from continuing operations ($11) $24 Add: interest expense/(income), net 4 $43 $43 $50 $50 Add: income tax expense/(benefit) 4 $2 $2 $2 $2 Add: depreciation, depletion, and amortization1 $30 $3 $3 $1 $37 $29 $4 $3 $1 $37 EBITDA $42 $33 $7 ($11) $71 $104 $27 $6 ($24) $113 Add: share-based compensation expense4 $6 $6 $5 $5 Add: ARO accretion expense $2 $2 $1 $1 Add: restructuring charges��$1 ($1) Add: litigation settlement charge $48 $48 Add: long-lived asset impairment charges $30 $30 Subtract: USG's equity income from UBBP $12 $12 Add: USGs share of USG Boral Building Products Adjusted EBITDA2 $20 $20 Adjusted EBITDA $122 $33 $7 $20 ($17) $165 $106 $27 $5 ($19) $119 1. Depreciation, depletion and amortization excludes the amortization of deferred financing fees which is included in interest expense. 2. See USG Boral Building Products EBITDA reconciliation on slide 26. 3. See discussion of changes to our reportable segments in footnote 1 on slide 4. 4. Interest, tax, and share-based compensation are not allocated to our reportable segments; therefore, these items are reflected in the column Corp/Elim. 3

ADJUSTED FINANCIAL RESULTS OF USG BORAL BUILDING PRODUCTS $ Millions Three months ended September 30, 2014 Operating Profit GAAP $31 Adjustments: Income from equity method investments $3 Adjusted Operating Profit Non-GAAP $34 Net Income attributable to USG Boral Building Products��GAAP $24 Adjustments Adjusted Net Income attributable to USG Boral Building Products Non-GAAP $24 USG share of income from equity method investments GAAP $12 Less: Income from equity method investments other joint ventures Adjusted equity income from USG Boral Building Products Non-GAAP $12

USG BORAL BUILDING PRODUCTS EBITDA RECONCILIATION Q3 2014 $ Millions UBBP GAAP Operating profit $31 Interest expense/(income), net Income tax expense/(benefit) $9 Income from equity method investments ($3) Net Income $25 Income attributable to non-controlling interest ($1) Net Income attributable to USG Boral Building Products $24 Add back: Restructuring, net of tax Adjusted Net Income attributable to USG Boral Building Products $24 Add: interest expense/(income), net Add: income taxes/(benefit) $9 Add: depreciation, depletion, and amortization $10 Subtract: income from equity method investments $3 TOTAL USG Boral Building Products Adjusted EBITDA $40 USGs share of USG Boral Building Products Adjusted EBITDA $20

ADJUSTED DILUTED EPS RECONCILED TO GAAP DILUTED EPS $ Millions Three months ended September 30, 2014 Three months ended September 30, 2013 Net Income (Loss) GAAP ($12) $23 Adjustments: Loss from discontinued operations $1 Litigation settlement charge $48 Long-lived asset impairment charges $30 Adjusted Net Income��Non-GAAP $66 $24 Earnings (loss) per average common share��basic��GAAP ($0.09) $0.22 Adjustments per average common share: Loss from discontinued operations $0.01 Litigation settlement charge $0.33 Long-lived asset impairment charges $0.21 Adjusted earnings per average common share��basic��Non-GAAP $0.45 $0.23 Earnings (loss) per average diluted common share��GAAP ($0.09) $0.21 Loss from discontinued operations��$0.01 Litigation settlement charge $0.33��Long-lived asset impairment charges $0.20 Adjusted earnings per adjusted average diluted common share Non-GAAP $0.44 $0.22 Average common shares GAAP 144,646,284 108,608,086 Average diluted common shares GAAP 144,646,284 111,008,421 Adjustment to add common shares that would be dilutive based on adjusted net income 2,417,100 Adjusted average diluted common shares Non-GAAP 147,063,384 111,008,421

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