Ceramic Industry News

USG Details Costs For Asbestos And Restructuring Initiatives

January 15, 2001
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USG Corp. recently released details of two major initiatives that will help clarify the company's financial performance and further strengthen its competitive position. USG is now able to estimate its financial exposure for asbestos cases filed through 2003, based on a recently completed independent review of its asbestos liability. In addition, USG has taken steps to restructure its operations to improve business efficiency. The initiatives and plans for associated charges were outlined in a Form 8-K filing on December 27. USG will take year-end charges totaling $904 million, or $557 million net of tax benefits, for costs associated with the two initiatives. The charges will reduce fourth quarter and twelve months earnings per share by $12.83 and $12.11, respectively. Of the $904 million, a non- cash charge of $850 million will cover the estimated cost (in excess of the company's current reserve) of settling asbestos claims currently pending against United States Gypsum Co. as well as future asbestos claims to be filed against it through 2003.

The balance of $54 million reflects a restructuring charge for plant shut downs, severance costs and inventory write-offs. The restructuring is part of the corporation's strategic plan, which includes production capacity modernization, the integration of its gypsum and ceilings businesses and working capital improvements. Annual savings from restructuring initiatives are estimated at $40 million. USG has a long-term strategy to serve the growth in its markets and reduce production costs. As part of this initiative, the corporation has built five new low-cost SHEETROCK brand gypsum wallboard plants and committed to close 1.0 billion square feet of old, high-cost capacity.

USG will report fourth quarter and full year 2000 results on Wednesday, January 24, 2001. Results will be released before the New York Stock Exchange opens and will be followed by a conference call with senior management at 11:00 a.m. Eastern time (10:00 a.m. Central time) that morning. The call will be webcast live over the Internet at the USG website. Additional details are available on the investor relations portion of the USG website or by calling (312) 606-5756. For more information, visit http://www.usg.com.

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