Exhibit 99.2
USG Corporation First Quarter 2015 Earnings Conference Call and Webcast April 23, 2015
CAUTIONARY STATEMENTS This
presentation contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 related to
management’s expectations about future conditions. Actual business,
market or other conditions may differ materially from management’s
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
(SEC), including the “Risk Factors” in our Annual Report on Form 10-K,
filed with the SEC on February 12, 2015. 2
Stockholder Rights Plan and
Protective Amendment USG’s Stockholder Rights Plan and Protective
Amendment restricts beneficial ownership in excess of 4.9% We have a
stockholder rights plan, or the Rights Plan, established under the terms
of a rights agreement dated December 21, 2006, as amended, with
Computershare Trust Company N.A., as Rights Agent, or the Rights
Agreement. Our board of directors adopted the Rights Plan to protect our
stockholders from coercive takeover practices or takeover bids that are
inconsistent with their best interests. On March 22, 2013, our board of
directors approved an amendment to the Rights Agreement in an effort to
protect our net operating loss carryforwards, or NOL, carryforwards. Our
stockholders ratified, on an advisory basis, the March 22, 2013
amendment to our Rights Agreement at our 2013 annual meeting of
stockholders. On February 11, 2015, our board of directors approved
another amendment to the Rights Agreement. The primary purpose of the
foregoing amendments is to protect the value of the Company’s NOLs and
related tax benefits. The Rights Agreement, as amended, provides that if
any person becomes the beneficial owner of 4.9% or more of our common
stock, stockholders other than the 4.9% triggering stockholder will have
the right to purchase additional shares of our common stock at half the
market price, thereby diluting the triggering stockholder; provided that
stockholders whose beneficial ownership exceeded 4.9% of our common
stock outstanding on February 11, 2015 will not be deemed to have
triggered the Rights Agreement, as amended, so long as they do not
thereafter acquire additional common stock other than in certain
specified exempt transactions. The Company’s ability to use its NOLs
could be substantially reduced if the Company experiences an “ownership
change,” as defined under Section 382 of the Internal Revenue Code of
1986 (the “Code”). The amendment adopted on February 11, 2015 maintains
previously adopted protections and modifies, until March 22, 2016 (or
such earlier time that the Board determines that no Tax Benefits (as
defined in the Rights Agreement) may be carried forward or that the
Rights Agreement is no longer necessary for the protection of Tax
Benefits) (the “Special Period”), the definition of when a Person (as
defined in the Rights Agreement) will be deemed the “Beneficial Owner”
of, and to “Beneficially Own,” securities under the Rights Agreement to
align with the definition of ownership under Section 382 of the Code.
Under the revised definition, during the Special Period, only
acquisitions that would result in ownership of more than 4.9% of the
Company’s then‐outstanding shares of common stock, as determined
pursuant to Section 382 of the Code, would cause a stockholder to be
deemed an “Acquiring Person,” subject to certain specified exempt
transactions. Upon the expiration of the Special Period, the triggering
threshold level under the Rights Plan will revert to the 15% level in
effect prior to the amendment on March 22, 2013, and the definition of
“Beneficial Owner” and “Beneficially Own” will revert to a definition
that does not track Section 382 of the Code. On May 9, 2013, we filed an
amendment to our Restated Certificate of Incorporation, or the
Protective Amendment, that restricts certain transfers of our common
stock. The Protective Amendment is intended to protect the tax benefits
of our NOL carryforwards. Subject to certain limited exceptions, the
Protective Amendment's transfer restrictions would restrict any person
from transferring our common stock (or any interest in our common stock)
if the transfer would result in a stockholder (or several stockholders,
in the aggregate, who hold their stock as a “group” under Section 382 of
the Code) owning 4.9% or more of our common stock. Any direct or
indirect transfer attempted in violation of the Protective Amendment
would be void as of the date of the prohibited transfer as to the
purported transferee, and the purported transferee would not be
recognized as the owner of the shares attempted to be owned in violation
of the Protective Amendment for any purpose, including for purposes of
voting and receiving dividends or other distributions in respect of that
common stock, or in the case of options, receiving our common stock in
respect of their exercise. The Protective Amendment is effective until
the earlier of (i) May 9, 2016, (ii) the repeal of Section 382 of the
Code if our board of directors determines that the Protective Amendment
is no longer necessary for the preservation of tax benefits, (iii) the
first day of a taxable year as to which our board of directors
determines that no tax benefits may be carried forward, or (iv) such
other date as determined by our board of directors pursuant to the
Protective Amendment. 3
USG Corporation First
Quarter 2015 Agenda Overview and Strategy Financial Results Market
Outlook 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 4
Q1 2015 HIGHLIGHTS Progress
on our Plan to Win United States Gypsum – 270 basis point operating
margin improvement United States Ceilings – 630 basis point operating
margin improvement Lowering 2015 SG&A target by $20 million to $325
million One year anniversary of USG-Boral joint venture Entered into
agreements to sell GTL ships for $42 million 5
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 6
Q1 2015 CONSOLIDATED
FINANCIAL RESULTS $ Millions (except EPS) Q1 2015 Q1 2014 Net sales $909
$850 Gross profit $153 $143 % of net sales 16.8% 16.8% SG&A $77 $77
Operating profit $76 $66 Interest expense $43 $47 Net income $24 $45
Diluted EPS $0.16 $0.32 Excluding: Gain on deconsolidation of
subsidiaries and other — ($26) Loss on extinguishment of debt $19 —
Adjusted net income 1 $43 $19 Adjusted diluted EPS 2 $0.29 $0.14
Adjusted EBITDA 3 $132 $115 1. See reconciliation to GAAP net income on
slide 19 2. See reconciliation to GAAP diluted earnings per share on
slide 24 3. See the reconciliation on slide 20 7
FIRST QUARTER 2015 GAAP RESULTS $ Millions Q1 2015 Q1 2014 1 Change Gypsum Sales $577 $545 $32 Ceilings Sales 2 $123 $125 2 ($2) 2 Distribution Sales $334 $300 $34 Eliminations ($125) ($120) ($5) TOTAL USG CORPORATION SALES $909 $850 $59 Gypsum Operating Profit $68 $65 $3 Ceilings Operating Profit $21 $15 $6 Distribution Operating Profit $4 $1 $3 Corporate and Eliminations ($17) ($15) ($2) TOTAL USG CORPORATION OPERATING PROFIT $76 $66 $10 Total USG Boral Building Products Sales 3 $228 $89 3 $139 3 Total USG Boral Building Products Operating Profit 3 $23 $10 3 $13 3 USG’s EQUITY INCOME FROM USG-BORAL $8 $3 $5 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 three months ended March 31, 2014 include the results, through February 27, 2014, of our wholly-owned subsidiaries and consolidated joint ventures that were contributed to UBBP. 3. Q1 2014 only includes one month of USG Boral operations due to the joint venture’s commencement at the end of February 2014. 8
GYPSUM Q1 2015 Highlights
Excluding GTL and 2014 ARO adjustment 1: $18 million of improved
operating profit Operating margin improves 250 basis points to 12.0% US
Wallboard: price increase and high single digit volume growth help drive
$13 million of improved operating profit US Surfaces and Substrates: $5
million of improvement – joint treatment, Levelrock®, Durock®, and
Securock® lead the way Price improvement in all products United States
Gypsum: 270 basis point operating margin improvement Consolidated Gypsum
Segment 4 Q1 2014 Adjusted Operating Profit 2 $65 US Wallboard Price $4
US Wallboard Cost $2 US Wallboard Volume $7 US Surfaces and Substrates
$5 Q1 2014 GTL Income ($8) Q1 2014 Mining ARO Adjustment ($7) Q1 2015
Adjusted Operating Profit 2 $68 $ Millions Q1 2015 Q1 2014 4 Variance
Net Sales $577 $545 $32 Operating Profit $68 $65 $3 Adjusted Operating
Profit 2 $68 $65 $3 Adjusted Operating Profit Margin 3 11.8% 11.9%
(0.1%) 1. Excluding Q1 2014 GTL operating profit ($8 million) and the Q1
2014 Mining asset retirement obligation benefit ($7 million) yields $50
million of Q1 2014 adjusted operating profit, as adjusted. $10 million
and $21 million of GTL sales are excluded from Q1 2015 and Q1 2014,
respectively. 2. See reconciliation to GAAP operating profit on slide
18. 3. Adjusted operating profit margin equals GAAP operating profit
margin. 4. See discussion of changes to our reportable segments in
footnote 1 on slide 8. 9
GTL Sale expected to close
in April 2015 Net cash proceeds after remaining operating costs, closing
expenses, and mortgage repayment expected to be $10 to $13 million GTL
annual guidance revised to a range of $2 to $5 million (loss) which
includes a $6 million gain on sale GTL - $ Millions Q1 Q2 Q3 Q4 FY 2014
- Sales $21 $21 $20 $19 $81 2014 - Adjusted Operating Profit $8 $6 $5 $4
$23 2015 – Sales 2 $10 — — — $10 2015 - Operating Profit 2 — ($2) - ($5)
— — ($2) - ($5) 1. Excludes impairment, contract termination and loss on
receivable charges totaling $75 million. 2. Periods after Q1 2015 are
estimates. Q2 2015 includes a $6 million estimate for the gain on the
sale of the ships. We do not expect the historical results and future
costs associated with GTL to meet the accounting requirements to be
presented as a discontinued operation for GAAP purposes. Beginning in
the second quarter, after the sale of the ships, GTL results will be
excluded from adjusted operating profit.10
CEILINGS Q1 2015 Highlights
Adjusted operating margin improves 440 basis points to 17.1% Improved
weather conditions lift volumes and lower cost US tile and grid: $8
million of improved operating profit Price increase in tile Continued
trend of mix-shift towards higher margin products Canada and Mexico
impacted by currency of $1 million United States Ceilings 630 basis
point operating profit margin improvement Consolidated Ceilings Segment
1 Q1 2014 Adjusted Operating Profit 2 $15 Tile & Grid Price $3 Tile &
Grid Cost $3 Tile & Grid Volume $2 Canada and Mexico, including FX ($2)
Q1 2015 Adjusted Operating Profit 2 $21 $ Millions Q1 2015 Q1 2014 1
Variance Net Sales $123 $125 ($2) Operating Profit $21 $15 $6 Operating
Profit Margin 17.1% 12.0% 5.1% Adjusted Net Sales $123 $118 $5 Adjusted
Operating Profit 2 $21 $15 $6 Adjusted Operating Profit Margin 17.1%
12.7% 4.4% Q1 2014 Net Sales Net Sales of Entities Contributed to UBBP
Q1 2014 Adjusted Net Sales Q1 2015 Net Sales Variance $125 ($7) $118
$123 $5 1. See discussion of changes to our reportable segments footnote
1 on slide 8 2. See reconciliation to GAAP operating profit on slide 18
11
DISTRIBUTION Q1 2015
Highlights Adjusted operating margin improves 90 basis points to 1.2%
Improved gross profit in every product category, led by wallboard sales
Same store sales increased by 10% Wallboard volumes improved by 15%
Delivery costs as a percentage of sales were flat - 11% increase in
sales drove delivery costs higher Distribution Segment Q1 2014 Adjusted
Operating Profit 1 $1 Wallboard Margin and Volume $5 Ceilings & Other
Core Products $2 SG&A $1 Delivery Costs ($4) Change in Reduction of Bad
Debt Reserve ($1) Q1 2015 Adjusted Operating Profit 1 $4 $ Millions Q1
2015 Q1 2014 Variance Net Sales $334 $300 $34 Operating Profit $4 $1 $3
Adjusted Operating Profit 1 $4 $1 $3 Adjusted Operating Profit Margin 2
1.2% 0.3% 0.9% 1. See reconciliation to GAAP operating profit on slide
18 2. Adjusted operating profit margin equals operating profit margin 12
USG BORAL BUILDING PRODUCTS
Q1 2015 Highlights March 2015 total JV operating profit increased over
March 2014 Q1 2015 includes three months of operations vs. one month of
operations in Q1 2014 Q1 is seasonal – slowest quarter of the year
January and February slower than March due to regional holidays
Continued strong growth in joint compounds and other adjacent products
NextGen conversion over 25% in Australia On track for synergy
realization $18 million dividend payment to USG in May 2015 $ Millions
Q1 2015 Q1 2014 1 Variance Total JV Net sales $228 $89 $139 Total JV
Operating profit $23 $10 $13 Adjustments 2 $1 ($1) $2 Total JV Adjusted
Operating Profit 2 $24 $9 $15 Total JV Adjusted Operating Profit Margin
10.5% 10.1% 0.4% Total JV Adjusted Net Income 2 $16 $6 $10 USG’s
Adjusted Equity Income from UBBP 2 $8 $3 $5 Q1 2014 USG's Equity Income
from UBBP 1 $3 USG Boral results - full quarter of operations $5 Q1 2015
USG's Equity Income from UBBP $8 1. Q1 2014 only includes one month of
USG Boral operations due to the joint venture’s commencement at the end
of February 2014 2. See a full reconciliation to GAAP operating profit,
net income, and income from equity method investments on slide 21 13
INCOME TAX OUTLOOK We may
release all or a portion of our $1.0 billion domestic valuation
allowance by the end of 2015 After release of the valuation allowance,
we estimate our global effective income tax rate will be 29-31%. The
valuation allowance release will not impact: Our U.S. cash tax payments
– there will be no federal tax payments until we fully utilize the NOL
of $1.9 billion Foreign consolidated entities The results of the
USG-Boral joint venture, which are recorded on a net of tax basis Until
the valuation allowance release, our income tax expense is projected to
be approximately $2 million per quarter 14
Q1 2015 CONSOLIDATED CASH
FLOW $ Millions 3 months ended March 31, 2015 3 months ended March 31,
2014 Cash flow used for operations ($42) ($64) Capital expenditures
($29) ($34) Investments in joint ventures — ($557) Net proceeds from
asset dispositions and other $1 $2 Adjusted cash flow used for investing
activities 1 ($28) ($589) Cash flow used for financing activities ($29)
($1) Effect of exchange rate on cash ($3) ($1) Adjusted decrease in cash
and cash equivalents 1 ($102) ($655) March 31, 2015 March 31, 2014 Cash
and cash equivalents and marketable securities $242 $297 Total liquidity
$583 $618 Total debt $2,206 $2,343 1.For the three months ended March
31, 2015, the US GAAP measure of net cash used for investing activities
was ($1) million. This ($1) million includes net sales of marketable
securities of $66 million (inflow) and a deposit of restricted cash of
($39) million (outflow). For the three months ended March 31, 2014, the
US GAAP measure of net cash used for investing activities was ($585)
million which included net sales of marketable securities of $4 million.
15
Non-GAAP Financial Measures
In this presentation, the corporation’s 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, operating profit
adjusted for results of GTL and non-cash benefit in its mining
operation, adjusted net income, adjusted equity income of USG Boral
Building Products, or UBBP, normalized selling, general, and
administrative expense, adjusted net sales and adjusted basic and
diluted earnings per share, which exclude certain items. In addition,
adjusted operating profit on a consolidated basis includes the
corporation’s equity method income from UBBP and USG’s other equity
method investments, and adjusted EBITDA on a consolidated basis includes
the corporation’s share of UBBP’s 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 corporation’s 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 corporation’s core operating results. Adjusted
operating profit includes the adjusted equity method income from UBBP
and USG’s income from other equity investments and adjusted EBITDA
includes the corporation’s share of UBBP’s 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 corporation’s use
of non-GAAP financial measures, and the reconciliations to the nearest
GAAP measures, see the schedules attached hereto. 16
QUARTERLY SUMMARY BY BUSINESS UNIT $ Millions Q1 2015 Q1 2014 6 Change Gypsum adjusted operating profit 1 $68 $65 $3 Ceilings adjusted operating profit 1 $21 $15 $6 Distribution adjusted operating profit 1 $4 $1 $3 Adjusted equity income from USG Boral Building Products 2 $8 $3 $5 Equity income from other joint ventures — — — Corporate and eliminations adjusted operating loss 1 ($17) ($15) ($2) USG Consolidated Adjusted Operating Profit 1 $84 $69 $15 Gypsum DD&A $27 $30 ($3) Ceilings DD&A $4 $3 $1 Distribution DD&A $3 $3 — Corporate and eliminations DD&A 3 $1 — $1 USG Consolidated DD&A $35 $36 ($1) Gypsum adjusted EBITDA 4 $97 $97 — Ceilings adjusted EBITDA 4 $25 $18 $7 Distribution adjusted EBITDA 4 $7 $4 $3 USG's share of USG Boral Building Products adjusted EBITDA 5 $17 $6 $11 Corporate and Eliminations Adjusted EBITDA 4 ($14) ($10) ($4) USG Consolidated Adjusted EBITDA 4 $132 $115 $17 1. See a full reconciliation to GAAP operating profit on slide 18 2. See a full reconciliation to GAAP income from equity method investments on slide 21 3. Depreciation, depletion and amortization for Corporate and Eliminations excludes amortization deferred financing fees which is included in interest expense 4. See the reconciliation on slide 20 5. See reconciliation to USG Boral net income on slide 22 6. See discussion of changes to our reportable segments in footnote 1 on slide 8 17
ADJUSTED OPERATING PROFIT
RECONCILED TO GAAP OPERATING PROFIT $ Millions Q1 2015 Q1 2014 2 Change
Reported GAAP Operating Profit (Loss) Gypsum $68 $65 $3 Ceilings $21 $15
$6 Distribution $4 $1 $3 Corporate, Other & Eliminations ($17) ($15)
($2) Total $76 $66 $10 Adjustments to GAAP Operating Profit (Loss)
Gypsum — — — Ceilings — — — Distribution — — — Corporate, Other &
Eliminations — — — Total — — — Adjusted Operating Profit – Non-GAAP
measure Gypsum $68 $65 $3 Ceilings $21 $15 $6 Distribution $4 $1 $3
Corporate, Other & Eliminations ($17) ($15) ($2) Other Adjustments
Adjusted equity income from UBBP1 $8 $3 $5 Equity income from other
joint ventures — — — Total Adjusted Operating Profit $84 $69 $15 1. See
a full reconciliation to GAAP income from equity method investments on
slide 21 2. See discussion of changes to our reportable segments in
footnote 1 on slide 8 18
ADJUSTED NET INCOME
RECONCILED TO GAAP NET INCOME $ Millions Q1 2015 Q1 2014 Net Income –
GAAP Measure $24 $45 Adjustments: Loss on extinguishment of debt $19 —
Gain on deconsolidation of subsidiaries and JV's — ($27) Withholding tax
on property contributed to UBBP — $1 Adjusted Net Income – Non-GAAP
Measure $43 $19 19
QUARTERLY ADJUSTED EBITDA RECONCILED TO QUARTERLY OPERATING PROFIT Q1 2015 Q1 2014 1 $ Millions Gyp Ceilings Distr. UBBP Corp/Elim Q1 Gyp Ceilings Distr. UBBP Corp/Elim Q1 GAAP Operating profit/(loss) $68 $21 $4 ($17) $76 $65 $15 $1 ($15) $66 Interest expense, net ($42) ($42) ($46) ($46) Other expense, net ($1) ($1) — — Income tax benefit (expense) $2 $2 ($5) ($5) USG's equity income from UBBP $8 $8 $3 3 Gain on deconsolidation of subsidiaries — — $27 $27 Loss on extinguishment of debt ($19) ($19) — — Net income attributable to USG $24 $45 Add: interest expense, net 2 $42 $42 $46 $46 Add: income tax (benefit) expense 2 ($2) ($2) $5 $5 Add: depreciation, depletion, and amortization 3 $27 $4 $3 $1 $35 $30 $3 $3 — $36 EBITDA $95 $25 $7 ($28) $99 $95 $18 $4 $15 $132 Add: share-based compensation expense 2 $3 $3 $5 $5 Add: ARO accretion expense $2 — — — $2 $2 — — — $2 Add: loss on extinguishment of debt $19 $19 — — Subtract: USG's equity income from UBBP 5 ($8) ($8) ($30) ($30) Add: USG’s share of UBBP Adjusted EBITDA 4 $17 $17 $6 $6 Adjusted EBITDA $97 $25 $7 $17 ($14) $132 $97 $18 $4 $6 ($10) $115 1. See discussion of changes to our reportable segments in footnote 1 on slide 8 2. Interest, tax, and share-based compensation are not allocated to our reportable segments; therefore, these items are reflected in the column Corp/Elim 3. Depreciation, depletion and amortization excludes the amortization of deferred financing fees which is included in interest expense 4. See USG Boral Building Products EBITDA reconciliation on slide 22 5. USG's equity income from UBBP, for Q1 2014, is comprised of USG's equity income from UBBP of $3 million and gain on deconsolidation of subsidiaries of $27 million 20
Q1 2015 ADJUSTED FINANCIAL
RESULTS OF USG BORAL BUILDING PRODUCTS $ Millions Q1 2015 Q1 2014
Operating Profit – GAAP $23 $10 Adjustments: Income from equity method
investments owned by UBBP $3 — Adjustments: Operating profit
attributable to non-controlling interest, pre-tax ($2) ($1) Adjusted
Operating Profit – Non-GAAP $24 $9 Net Income attributable to USG Boral
Building Products – GAAP $16 $6 Adjustments: — — Adjusted Net Income
attributable to USG Boral Building Products – Non-GAAP $16 $6 USG share
of income from equity method investments – GAAP $8 $3 Adjustments: — —
Adjusted equity income from USG Boral Building Products – Non-GAAP $8 $3
21
USG BORAL BUILDING PRODUCTS
Q1 2015 ADJUSTED EBITDA RECONCILIATION UBBP UBBP $ Millions Q1 2015 Q1
2014 GAAP Operating profit $23 $10 Interest expense/(income), net — —
Income tax expense ($8) ($3) Income from equity method investments owned
by UBBP $3 — Net Income $18 $7 Net income attributable to
non-controlling interest ($2) ($1) Net Income attributable to USG Boral
Building Products $16 $6 Adjustments: — — Adjusted Net Income
attributable to USG Boral Building Products $16 $6 Add: interest
expense/(income), net — — Add: income tax expense $8 $3 Add:
depreciation, depletion, and amortization $10 $3 TOTAL USG Boral
Building Products Adjusted EBITDA $34 $12 USG’s share of USG Boral
Building Products Adjusted EBITDA $17 $6 22
ADJUSTED BASIC EPS
RECONCILED TO GAAP BASIC EPS Q1 2015 Q1 2014 Income per average common
share – basic – GAAP $0.16 $0.33 Adjustments per average common share:
Loss on extinguishment of debt $0.13 — Gain on deconsolidation of
subsidiaries and consolidated joint ventures — ($0.20) Withholding tax
on property contributed to USG Boral joint venture — $0.01 Adjusted
earnings per average common share – basic – Non-GAAP $0.29 $0.14 Average
common shares – GAAP 145,381,269 137,765,694 23
ADJUSTED DILUTED EPS
RECONCILED TO GAAP DILUTED EPS Q1 2015 Q1 2014 1 Income per average
diluted common share – GAAP $0.16 $0.32 Adjustments per average diluted
common share: Loss on extinguishment of debt $0.13 — Gain on
deconsolidation of subsidiaries and consolidated joint ventures —
($0.19) Withholding tax on property contributed to USG Boral joint
venture — $0.01 Adjusted earnings per adjusted average diluted common
share – Non-GAAP $0.29 $0.14 Average diluted common shares – GAAP
147,176,197 146,920,819 Adjustment to remove common shares that would be
antidilutive based on adjusted net income — (6,578,946) Adjusted average
diluted common shares – Non-GAAP 147,176,197 140,341,873 1. Earnings per
average diluted common share for the three months ended March 31, 2014
is based on $47 million of income available to shareholders, which
represents net income plus $2 million for the dilutive effect of our 10%
convertible senior notes. Adjusted earnings per average diluted common
share for the same period is based on $19 million of adjusted net
income, which does not include the $2 million because the 10%
convertible senior notes were not dilutive. 24