Discontinued Operations

9 Months Ended

Sep. 30, 2012

Discontinued Operations [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

2.    Discontinued Operations

On August 7, 2012, USG and its indirect wholly owned subsidiaries, USG Foreign Investments, Ltd. and USG (U.K.) Ltd., together the Sellers, entered into a Share and Asset Purchase Agreement, or SAPA, with Knauf International GmbH and Knauf AMF Ceilings Ltd., together Knauf, pursuant to which the Sellers have agreed to sell to Knauf certain of their wholly owned European business operations. Those businesses include the manufacture and distribution of DONN® brand ceiling grid and SHEETROCK® brand finishing compounds principally throughout Europe, Russia and Turkey.

Pursuant to the terms of the SAPA, Knauf has agreed to purchase the businesses being sold for a total price of approximately $80 million. That amount is subject to a working capital adjustment at closing. In addition, USG and its subsidiaries are entitled to retain all cash and cash equivalents of the businesses being sold, which totaled approximately $37 million at September 30, 2012, and will retain responsibility for benefits payable under USG (U.K.) Ltd.’s closed pension plan. At September 30, 2012, the liability balance on our condensed consolidated balance sheet with respect to that pension plan was approximately $1 million.

Consummation of the transactions contemplated by the SAPA is expected to occur within the next several months; however, it is subject to the satisfaction or waiver of customary closing conditions, including receipt of necessary government approvals, the performance in all material respects by the parties of their respective obligations under the SAPA and, in the case of Knauf, the absence of any change or event which would reasonably be expected to result in a material adverse effect on the acquired businesses. There can be no assurance that the closing conditions set forth in the SAPA will be satisfied or waived. The SAPA is filed as an exhibit to this Quarterly Report on Form 10-Q.

Affiliates of Knauf are the beneficial owners of approximately 14% of USG’s outstanding shares of common stock.

The results of our European business operations have been reclassified as discontinued operations in the condensed consolidated financial statements and accompanying footnotes presented in this report. The assets and liabilities of the discontinued operations are reflected at carrying value because their fair value less estimated costs to sell exceeds carrying value. The carrying amounts of the major classes of assets and liabilities included in the disposal group were as follows:

(millions)	As of September 30, 2012		As of December 31, 2011
Accounts receivable	$	9	$	8
Inventories	14		13
Property, plant and equipment, net	13		13
Other assets	2		1
Assets related to discontinued operations	$	38	$	35
Accounts payable	6		7
Other liabilities	11		8
Liabilities related to discontinued operations	$	17	$	15

Sales from discontinued operations, operating profit from discontinued operations and income from discontinued operations before income taxes were as follows:

	Three months ended September 30,				Nine months ended September 30,
(millions)	2012		2011		2012		2011
Sales from discontinued operations	$	27	$	29	$	83	$	90
Operating profit from discontinued operations	1		3		7		8
Income from discontinued operations before income taxes	1		3		7		9