Equity Method Investments

Equity method investments as of March 31, 2016 and December 31, 2015, were as follows:



	March 31, 2016			December 31, 2015
(dollars in millions)	Carrying Value		Ownership Percentage	Carrying Value		Ownership Percentage
USG Boral Building Products	$	699	50%	$	675	50%
Other equity method investments	7		33% - 50%	7		33% - 50%
Total equity method investments	$	706		$	682

Investment in USG Boral Building Products

UBBP is our 50/50 joint ventures with Boral Limited, or Boral, and consists of USG Boral Building Products Pte. Limited, a company organized under the laws of Singapore, and USG Boral Building Products Pty Limited, a company organized under the laws of Australia. It manufactures, distributes and sells certain building products, mines raw gypsum and sells natural and synthetic gypsum throughout Asia, Australasia and the Middle East (the Territory). The products that UBBP manufactures and distributes include products for wall, ceiling, floor lining and exterior systems that utilize gypsum, wallboard, referred to as plasterboard in the Territory, mineral fiber ceiling tiles, steel grid and joint compound. We account for our investment in UBBP using the equity method of accounting. As of March 31, 2016, the amount of our consolidated retained earnings which represents undistributed earnings from UBBP is $49 million.

We formed the joint ventures with Boral on February 27, 2014. In the event certain performance targets are satisfied by UBBP, we will be obligated to pay Boral scheduled earnout payments in an aggregate amount up to $75 million, comprised first of $25 million based on performance during the first three years after closing and then up to $50 million based on performance during the first five years after closing. We recorded a liability representing the present value of the first earnout payment. If our conclusion on the probability were to change, we would reduce the liability with a corresponding reduction to our investment. We have not recorded a liability for the second earnout payment as we have concluded that it is currently not probable that the five-year performance target will be achieved. If our conclusion on the probability of achievement were to change, we will record a liability representing the present value of the second earnout payment with a corresponding increase to our investment. As of both March 31, 2016 and December 31, 2015, our liability for the earnout payments totaled $24 million. On our accompanying consolidated balance sheets, it is included in "Accrued expenses" as of March 31, 2016 and in "Other liabilities" as of December 31, 2015.

All of our investments accounted for under the equity method of accounting are initially recorded at cost, and subsequently adjusted for our share of the net income or loss and cash contributions and distributions to or from these entities. Because the underlying net assets in our investments are denominated in a foreign currency, translation gains or losses will impact the recorded value of our investments. Translation gains or losses recorded in other comprehensive income were as follows:



	Three months ended March 31,
(in millions)	2016		2015
Translation gain (loss)	$	17	$	(16	)

Summarized financial information for our equity method investments is as follows:



	Three months ended March 31,
(in millions)	2016		2015
USG Boral Building Products:
Net sales	$	229	$	228
Gross profit	65		61
Operating profit	23		23
Income from continuing operations before income taxes	24		26
Net income	15		18
Net income attributable to USG Boral Building Products	14		16
USG share of income from investment accounted for using the equity method	7		8
Other equity method investments:
USG share of income from investments accounted for using the equity method	—		—

Total income from equity method investments	7		8

Transactions with UBBP

Our Gypsum segment sells products to UBBP. Total sales to UBBP for the three months ended March 31, 2016 and March 31, 2015 were immaterial.

In 2014, in connection with the formation of UBBP, we contributed our ownership interest in a joint venture in China to UBBP, but retained our loan receivable from this joint venture. As of March 31, 2016 and December 31, 2015, the loan receivable, including interest, totaled $14 million and is included in "Other assets" on our accompanying consolidated balance sheets.