8-K

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 of 1934

November 14, 2006

(Date of earliest event reported)

USG CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	1-8864	36-3329400
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

125 South Franklin Street, Chicago, Illinois 60606-4678

(Address of principal executive offices, including zip code)

(312) 606-4000

(Registrant’s telephone number, including area code)

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:

¨ 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 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 8.01 Other Events

On November 14, 2006, USG Corporation (the “Corporation”) issued a press release announcing the pricing of a private offering of $500 million aggregate principal amount of its 6.30% Senior Notes due 2016. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

In connection with the private offering of the notes, the information below was disclosed by the Corporation in the preliminary offering memorandum distributed to qualified institutional buyers (as defined under Rule 144A of the Securities Exchange Act of 1934).

The following table shows the Corporation’s consolidated cash and cash equivalents, debt and capitalization as of September 30, 2006 and as adjusted to reflect each of the items set forth in the column “Adjustments,” including the application of the estimated net proceeds of the offering of the notes to pay or repay obligations to the asbestos trust created pursuant to Section 524(g) of the U.S. Bankruptcy Code under the plan of reorganization in the Corporation’s and certain of its debtor subsidiaries’ recent Chapter 11 proceedings.

	As of September 30, 2006		Adjustments			As Adjusted (a)		xEBITDA (b)(c)
	(dollars in millions)
Cash and cash equivalents	$	1,453	$	(914	)	$	539
Note payable to Section 524(g) asbestos trust		10		(10	)		—	0.0x
Contingent note payable to Section 524(g) asbestos trust		3,050		(3,050	)		—	0.0x
Total short-term debt		3,060		(3,060	)		—	0.0x
Tax bridge loan (d)		—		1,150			1,150	1.0x
Term loan		—		500			500	0.4x
Senior notes offered in the private offering		—		500			500	0.4x
IRBs		239		—			239	0.2x
Total long-term debt		239		2,150			2,389	2.0x
Total debt		3,299		(910	)		2,389	2.0x
Stockholders’ equity		1,551		—			1,551	1.3x
Total capitalization		4,850		(910	)		3,940	3.3x

(a) These data are adjusted to reflect the impact of the repayment of the contingent payment note, expected borrowings under the Corporation’s credit agreement, the issuance of the senior notes in the private offering and the payments reflected in “Offering Memorandum Summary — Sources and Uses” in the offering memorandum relating to the notes offering.

(b) These data represent the ratio of each item to EBITDA for the 12-month period ended September 30, 2006 of $1.2 billion.

(c) The Corporation has defined EBITDA as net earnings before interest income, interest expense, taxes, depreciation, depletion and amortization expense, reorganization expenses and other non-cash adjustments. EBITDA is not defined under generally accepted accounting principles in the United States (“GAAP”). You should not consider EBITDA in isolation or as an alternative to operating profit (loss) or net earnings (loss) as a measure of the Corporation’s operating performance, cash flow provided by operating, investing and financing activities as a measure of the Corporation’s ability to meet cash needs or other measures of performance prepared in accordance with GAAP. The Corporation believes that EBITDA is a measure commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to costs associated with taxes, depreciation and amortization. Accordingly, the Corporation has disclosed this information in the offering memorandum relating to the notes offering as a supplemental disclosure to permit a more comprehensive analysis of the Corporation’s debt servicing ability. Because all companies do not calculate EBITDA identically, the Corporation’s presentation of EBITDA may not be comparable to EBITDA or similarly titled measures of other companies.

The following table is a reconciliation of EBITDA to net earnings (loss), the most comparable GAAP measure to EBITDA for the 12-month period ended September 30, 2006:

	Twelve months ended September 30, 2006
	(in millions)
Net earnings (loss)	$	(1,593	)
Cumulative effect of accounting change		11
Interest income		(26	)
Interest expense		540
Taxes		(967	)
Depreciation, depletion and amortization		134
Provision for asbestos claims		3,056
Reorganization expenses		12
EBITDA		1,167

(d) The Corporation expects that it will use the tax bridge loan facility under its credit agreement to repay approximately $1.1 billion of the contingent payment note. Under the Corporation’s credit agreement, the Corporation is required to repay the tax bridge facility upon receipt of tax refunds that it anticipates it will receive as a result of tax deductions generated by the payments to the Section 524(g) asbestos trust.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1 — USG Corporation press release dated November 14, 2006

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.

USG CORPORATION Registrant
By:	/s/ Richard H. Fleming
	Richard H. Fleming Executive Vice President and Chief Financial Officer

Date: November 15, 2006

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	USG Corporation press release dated November 14, 2006

EX-99.1

Exhibit 99.1

Media Inquires: (312) 606-4356

Investor Relations: (312) 606-4125

USG CORPORATION ANNOUNCES PRICING OF OFFERING OF

6.30% SENIOR NOTES DUE 2016

CHICAGO, November 14, 2006 — USG Corporation (NYSE:USG) today announced the pricing of a private offering of $500 million aggregate principal amount of its 6.30% Senior Notes due November 15, 2016. The notes will be the unsecured obligations of USG. The notes will be sold to investors at a price of 99.927% of the principal amount of the notes, plus any accrued interest from November 17, 2006. The offering of the notes is expected to close on or about November 17, 2006.

USG intends to use the net proceeds of the private offering for any or a combination of the following: to pay a portion of its $3.05 billion contingent payment note that was issued to the Section 524(g) asbestos trust created under USG’s plan of reorganization in its bankruptcy proceedings, to replace a portion of the commitments or repay a portion of amounts outstanding under the term loan facility under its credit agreement entered into in August 2006, for working capital purposes and/or for general corporate purposes.

The notes will be offered and sold only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933. When issued, the notes will not have been registered under the Securities Act of 1933 or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy the notes or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful. Any offers of the notes will be made only by means of a private offering memorandum.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to management’s expectations about future conditions. Closing of the offering of the notes may be affected by, and actual use of the net proceeds of the offering may differ due to, various other factors, including economic conditions such as the levels of new home and other construction activity; competitive conditions, such as price and product competition; increases in raw material, energy and employee costs; the loss of one or more major customers; capacity constraints; capital market conditions and availability of borrowings under the corporation’s credit agreement; the amount and timing of the tax refund the corporation expects to receive; the unpredictable effects of acts of terrorism or war upon domestic and international economies and financial markets; acts of God; and the other risk factors listed from time to time by the corporation in documents and reports it files with the Securities and Exchange Commission. The corporation assumes no obligation to update any forward-looking information contained in this press release.