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Previous: SELIGMAN HIGH INCOME FUND SERIES, 497, 1995-04-11 |
Next: SCUDDER VARIABLE LIFE INVESTMENT FUND/MA/, 485BPOS, 1995-04-11 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-KA
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark one)
_X_ Annual Report pursuant to 15(d) of the Securities Exchange Act of 1934 (Fee
required)
For the fiscal year ended December 31, 1994.
___ Transition report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 (No fee required)
For the transition period from __________ to __________
Commission file number 1-8864.
A. Full title of the Plan:
USG CORPORATION INVESTMENT PLAN (Formerly USG CORPORATION
INVESTMENT PLAN FOR SALARIED EMPLOYEES)
B. Name of the issuer of the securities held pursuant to the plan
and the address of its principal executive office:
USG CORPORATION, 125 SOUTH FRANKLIN STREET, CHICAGO, ILLINOIS
60606
<PAGE> 2
REQUIRED INFORMATION
Financial Statements:
Plan financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA attached hereto, including a Consent
of Independent Public Auditors with respect to Form S-8 for 1994.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
members of the Pension and Investment Committee administering the Plan have
duly caused this annual report to be signed by the undersigned thereunto duly
authorized.
USG CORPORATION INVESTMENT PLAN
By: /s/ H.E. PENDEXTER, JR.
---------------------------------
H.E. Pendexter, Jr.
Member of Pension and Investment
Committee
Date: March 30, 1995
<PAGE> 3
USG CORPORATION
INVESTMENT PLAN
REPORT ON AUDITED
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
YEARS ENDED DECEMBER 31, 1994 AND 1993
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statement of Net Assets Available
for Plan Benefits 2
Statement of Changes in Net Assets
Available for Plan Benefits 4
Notes to Financial Statements 6
SUPPLEMENTAL SCHEDULES:
I. Schedule of Investments Held
at Year End 12
II. Schedule of Reportable Transactions 13
</TABLE>
<PAGE> 5
INDEPENDENT AUDITORS' REPORT
PENSION AND INVESTMENT COMMITTEE
USG CORPORATION
CHICAGO, ILLINOIS
We have audited the accompanying statement of net assets available for plan
benefits of the USG Corporation Investment Plan as of December 31, 1994 and
1993, and the related statement of changes in net assets available for plan
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of December 31, 1994 and 1993, and the changes in net assets available for
plan benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of
investments held at year end as of December 31, 1994, and reportable
transactions for the year ended December 31, 1994, are presented for purposes
of complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974 and
are not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Hill, Taylor & Co.
February 27, 1995
<PAGE> 6
USG CORPORATION INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994 AND 1993
1994
<TABLE>
<CAPTION>
------------------------------------------------------------------------
USG COMMON FIXED GOVERNMENT EQUITY
STOCK INCOME INVESTMENT INDEX BALANCED
FUND FUND FUND FUND FUND
---------- ------ ---------- ------ --------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at
Market $8,762,990 $102,620,928 $4,101,758 $14,158,971 $5,816,611
Receivables:
Employer contributions
receivable --- 14,000,000 --- --- ---
- -
Employee loans
receivable --- --- --- --- ---
Interest and
dividend receivable 86 63,856 18,139 23 16
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures 238,879 --- 30,870 17,811 3,722
---------- ------------ ---------- ----------- ----------
Total Receivables 238,965 14,063,856 49,009 17,834 3,738
---------- ------------ ---------- ----------- ----------
Total Assets 9,001,955 116,684,784 4,150,767 14,176,805 5,820,349
---------- ------------ ---------- ----------- ----------
LIABILITIES:
Benefits payable 45,801 1,694,367 108,221 156,119 43,648
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures --- 137,691 --- 108,836 5,231
---------- ------------ ---------- ----------- ----------
Total Liabilities 45,801 1,832,058 108,221 264,955 48,879
---------- ------------ ---------- ----------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $8,956,154 $114,852,726 $4,042,546 $13,911,850 $5,771,470
========== ============ ========== ============ ==========
<CAPTION>
FORFEITURE INVESTMENT
GROWTH CASH PLAN
FUND ACCOUNT LOANS TOTAL
----- --------- ---------- -----
<S> <C> <C> <C> <C>
ASSETS:
Investments at
Market $6,058,221 $29,121 $ --- $141,548,600
Receivables:
Employer contributions
receivable --- --- --- 14,000,000
Employee loans
receivable --- --- 5,240,156 5,240,156
Interest and
dividend receivable 16 127 --- 82,263
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures --- 5,911 --- 297,193
---------- ------------ ---------- -----------
Total Receivables 16 6,038 5,240,156 19,619,612
---------- ------------ ---------- ------------
Total Assets 6,058,237 35,159 5,240,156 161,168,212
---------- ------------ ---------- ------------
LIABILITIES:
Benefits payable 63,872 17,424 --- 2,129,452
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures 45,435 --- 363,448 660,641
---------- ------------ ---------- ------------
Total Liabilities 109,307 17,424 363,448 2,790,093
---------- ------------ ---------- ------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $5,948,930 $17,735 $4,876,708 $158,378,119
========== ============ ========== ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
- 2 -
<PAGE> 7
USG CORPORATION INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1994 AND 1993
1993
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
USG COMMON FIXED GOVERNMENT EQUITY
STOCK INCOME INVESTMENT INDEX BALANCED
FUND FUND FUND FUND FUND
--------- ------ ---------- ------ --------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at
Market $7,808,353 $ 99,587,130 $4,239,684 $ 13,088,923 $2,085,506
Receivables:
Employer contributions
receivable --- 5,800,000 --- --- ---
Employee loans
receivable --- --- --- --- ---
Interest and
dividend receivable 77 61,796 10,749 115 27
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures 1,520,393 --- 40,891 109,172 1,353,057
---------- ------------ ---------- ------------ ----------
Total Receivables 1,520,470 5,861,796 51,640 109,287 1,353,084
---------- ------------ ---------- ------------ ----------
Total Assets 9,328,823 105,448,926 4,291,324 13,198,210 3,438,590
---------- ------------ ---------- ------------ ----------
LIABILITIES:
Benefits payable 71,111 3,079,023 36,258 63,605 2,215
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures 14,580 3,613,797 85,595 333,753 6,027
---------- ------------ ---------- ------------ ----------
Total Liabilities 85,691 6,692,820 121,853 397,358 8,242
---------- ------------ ---------- ------------ ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $9,243,132 $ 98,756,106 $4,169,471 $ 12,800,852 $3,430,348
========== ============ ========== ============ ==========
<CAPTION>
FORFEITURE INVESTMENT
GROWTH CASH PLAN
FUND ACCOUNT LOANS TOTAL
------ ----------- ---------- -----
<S> <C> <C> <C> <C>
ASSETS:
Investments at
Market $2,275,173 $ 19,356 --- $129,104,125
Receivables:
Employer contributions
receivable --- (19,000) --- 5,781,000
Employee loans
receivable --- --- 2,304,501 2,304,501
Interest and
dividend receivable 30 53 --- 72,847
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures 1,030,682 2,969 --- 4,057,164
---------- ------------ ---------- ------------
Total Receivables 1,030,712 (15,978) 2,304,501 12,215,512
---------- ------------ ---------- ------------
Total Assets 3,305,885 3,378 2,304,501 141,319,637
---------- ------------ ---------- ------------
LIABILITIES:
Benefits payable 2,978 --- --- 3,255,190
Pending transactions
from participants'
elections for transfers
between funds or
forfeitures 3,412 --- --- 4,057,164
---------- ------------ ---------- ------------
Total Liabilities 6,390 --- --- 7,312,354
---------- ------------ ---------- ------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $3,299,495 $ 3,378 $2,304,501 $134,007,283
========== ============ ========== ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
- 3 -
<PAGE> 8
USG CORPORATION INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1994 AND 1993
1994
<TABLE>
<CAPTION>
USG COMMON FIXED GOVERNMENT EQUITY
STOCK INCOME INVESTMENT INDEX BALANCED GROWTH
FUND FUND FUND FUND FUND FUND
---------- ------ ---------- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $9,243,132 $98,756,106 $4,169,471 $12,800,852 $3,430,348 $3,299,495
---------- ----------- ---------- ----------- ---------- ----------
ADD (DEDUCT):
Corporation contributions -- 16,273,711 -- -- -- --
Employee contributions 1,499,307 7,911,878 537,884 2,017,850 1,084,472 1,591,117
---------- ----------- ---------- ----------- ---------- ----------
1,499,307 24,185,589 537,884 2,017,850 1,084,472 1,591,117
---------- ----------- ---------- ----------- ---------- ----------
Income from investments:
Dividend income -- -- -- 391,793 184,263 89,396
Interest income 47,179 5,931,203 162,048 1,217 1,525 1,050
Realized gain (loss) on
sale of investments (584,641) -- -- 101,842 251,991 216,748
Unrealized depreciation
for the year (3,060,319) -- -- (308,121) (372,372) (407,334)
---------- ----------- ---------- ----------- ---------- ----------
(3,597,781) 5,931,203 162,048 186,731 65,407 (100,140)
---------- ----------- ---------- ----------- ---------- ----------
Benefit payments and
participant withdrawals (264,030) (7,553,496) (438,426) (629,232) (117,860) (105,267)
Participants' elections for
transfers between funds 2,144,303 (4,086,076) (362,048) (371,181) 1,412,268 1,242,458
Withdrawals from funds (68,777) (2,364,944) (26,383) (93,170) (103,165) 21,267
due to loans
Administrative expenses -- (15,656) -- -- --
---------- ----------- ---------- ----------- ---------- ----------
Net increase (decrease) in
assets during the year (286,978) 16,096,620 (126,925) 1,110,998 2,341,122 2,649,435
---------- ----------- ---------- ----------- ---------- ----------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $8,956,154 $114,852,726 $4,042,546 $13,911,850 $5,771,470 $5,948,930
========== ============ ========== =========== ========== ==========
<CAPTION>
FORFEITURE
CASH LOAN
ACCOUNT ACCOUNT TOTAL
--------- ------- -----
<S> <C> <C> <C>
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $3,378 $2,304,501 $134,007,283
------ ---------- ------------
ADD (DEDUCT):
Corporation contributions -- -- 16,273,711
Employee contributions -- -- 14,642,508
------ ---------- ------------
-- -- 30,916,219
------ ---------- ------------
Income from investments:
Dividend income -- -- 665,452
Interest income 1,774 131,660 6,277,656
Realized gain (loss) on
sale of investments -- -- (14,060)
Unrealized depreciation
for the year -- -- (4,148,146)
------ ---------- ------------
1,774 131,660 2,780,902
------ ---------- ------------
Benefit payments and
participant withdrawals (7,693) (194,625) (9,310,629)
Participants' elections for
transfers between funds 20,276 -- --
Withdrawals from funds -- 2,635,172 --
due to loans
Administrative expenses -- -- (15,656)
------ ---------- ------------
Net increase (decrease) in
assets during the year 14,357 2,572,207 24,370,836
------ ---------- ------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $17,735 $4,876,708 $158,378,119
======= ========== ============
</TABLE>
The accompanying notes to financial statements are
an integral part of these statements.
- 4 -
<PAGE> 9
USG CORPORATION INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1994 AND 1993
1993
<TABLE>
<CAPTION>
USG COMMON FIXED GOVERNMENT EQUITY
STOCK INCOME INVESTMENT INDEX BALANCED
FUND FUND FUND FUND FUND
---------- ----- ---------- ------ --------
<S> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $5,773,978 $98,292,636 $3,954,010 $10,912,942 --
---------- ----------- ---------- ----------- -------
ADD (DEDUCT):
Corporation contributions -- 5,912,883 -- -- --
Employee contributions 270,206 8,915,065 682,747 2,166,606 335,486
---------- ----------- ---------- ----------- -------
270,206 14,827,948 682,747 2,166,606 335,486
---------- ----------- ---------- ----------- -------
Income from investments:
Dividend income -- -- -- 354,332 24,137
Interest income 3,918 6,306,656 127,065 -- --
Realized gain (loss) on
sale of investments (4,909,950) -- -- 2,726,236 50,056
Unrealized depreciation
for the year 5,770,605 -- -- (1,904,664) (17,158)
---------- ----------- ---------- ----------- -------
864,573 6,306,656 127,065 1,175,904 57,035
---------- ----------- ---------- ----------- -------
Benefit payments and
participant withdrawals (221,782) (10,898,107) (363,269) (702,646) (3,170)
Participants' elections for
transfers between funds 2,643,203 (7,671,072) (168,524) (664,395) 3,047,024
Withdrawals from funds (87,046) (2,057,904) (62,558) (87,554) (6,027)
due to loans
Administrative expenses -- (44,051) -- (5) --
---------- ----------- ---------- ----------- -------
Net increase (decrease) in
assets during the year 3,469,154 463,470 215,461 1,887,910 3,430,348
---------- ----------- ---------- ----------- -------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $9,243,132 $98,756,106 $4,169,471 $12,800,852 $3,430,348
========== =========== ========== =========== ==========
<CAPTION>
FORFEITURE
GROWTH CASH LOAN
FUND ACCOUNT ACCOUNT TOTAL
<S> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year -- $28,010 -- $118,961,576
---------- ------- ---------- ------------
ADD (DEDUCT):
Corporation contributions -- (25,181) -- 5,887,702
Employee contributions 472,697 -- -- 12,842,807
---------- ------- ---------- ------------
472,697 (25,181) -- 18,730,509
---------- ------- ---------- ------------
Income from investments:
Dividend income 10,733 -- -- 389,202
Interest income -- 9,202 -- 6,446,841
Realized gain (loss) on
sale of investments 97,186 -- -- (2,036,472)
Unrealized depreciation
for the year (77,149) -- -- 3,771,634
---------- ------- ---------- ------------
30,770 9,202 -- 8,571,205
---------- ------- ---------- ------------
Benefit payments and
participant withdrawals (3,389) (551) -- (12,192,914)
Participants' elections for
transfers between funds 2,802,829 10,935 -- --
Withdrawals from funds (3,412) -- 2,304,501 --
due to loans
Administrative expenses -- (19,037) -- (63,093)
Net increase (decrease) in
assets during the year 3,299,495 (24,632) 2,304,501 15,045,707
---------- ------- ---------- ------------
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $3,299,495 $3,378 $2,304,501 $134,007,283
========== ====== ========== ============
</TABLE>
The accompanying notes to financial statements are
an integral part of these statements.
- 5 -
<PAGE> 10
USG CORPORATION
INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1993
1. DESCRIPTION OF THE PLAN
The USG Corporation Investment Plan, also known as the USG Corporation
Investment Plan for Salaried Employees prior to January 1, 1989 ("The
Plan"), was approved by the stockholders of the Corporation on May 11,
1977, and became effective on July 1, 1977. On January 2, 1989, the Plan
was amended and completely restated effective as of January 1, 1989
("restated Plan"). The amendment and restatement incorporates all prior
amendments to the Plan and makes changes to reflect the merger of the USG
Corporation Savings Plan for Hourly Employees effective January 1, 1989,
and to change the name of the Plan to the USG Corporation Investment Plan.
The Plan was established to provide a means for eligible hourly and
salaried employees to participate in the earnings of the Corporation, to
build a supplemental retirement fund and to provide additional disability
and death benefits.
The Plan provides, among other things, that participants may contribute up
to 9% of their annual compensation to the Plan during the year effective
January 1, 1989, 15% from October 1, 1985 to December 31, 1988 and 12%
prior to October 15, 1985. The amount of distributions to be made upon
withdrawal from the Plan is dependent upon the participant's and the
Corporation's contributions. The Plan requires completion of five years
of credited service in order to be 100% vested in the Corporation
contribution. Employee contributions are always 100% vested. In
addition, the Plan contains provisions under which the entire amount
credited to a participant's account is distributable upon a participant's
retirement, disability, or death.
Employee contributions are invested by the Trustee in one of six funds:
(a) common stock of USG Corporation (USG Common Stock Fund), (b) United
States Government obligations (Government Investment Fund), (c) other
obligations providing a fixed rate of interest (Fixed Income Fund), (d) an
equity index fund which provides investment results that are designed to
correspond to the performance of publicly traded common stocks, as
represented by the Standard & Poor's 500 Composite Stock Price Index
(Equity Index Fund), (e) a balanced fund which invests in several broadly
diversified asset classes, including domestic and foreign common stock and
bonds, preferred stocks and cash (Balanced Fund), or (f) a growth fund
which invests primarily in equity securities of large market
capitalization companies with earnings that are expected to grow at an
above-average rate, but may be further diversified by investment of a
small portion of the assets in domestic bonds, foreign common stocks and
bonds, and cash (Growth Fund). Investment in the USG Common Stock Fund
was suspended effective January 1, 1992, but was reopened July 1, 1993.
- 6 -
<PAGE> 11
Participants may elect to have their contributions invested in 5%
increments in any fund beginning July 1, 1993 and in 25% increments in any
fund before June 30, 1993. Participants can also change their investment
election and previous accumulated account each quarter. In order to
change their investment options, transfer their prior accumulated account
to another investment option, increase or decrease the percent of
contributions, and to make requests for withdrawals, participants are
required to provide notice by the 15th day of the last month of any
quarter.
At December 31, 1994 and 1993, the Fixed Income Fund was primarily
composed of an investment in group annuity contracts maintained by
Provident Life Insurance Co., Metropolitan Life Insurance Co. and John
Hancock Mutual Life Insurance Co. The Equity Index Fund was invested in
the Vanguard Institutional Index Fund.
As of December 31, 1994 and 1993, the Balanced Fund was invested in the
Fidelity Puritan Fund and the Growth Fund was invested in the IDS New
Dimensions Fund.
Corporation contributions, whether made in cash or stock, are initially
invested in the Fixed Income Fund. If the Trustee is unable to invest any
contributions immediately, the funds are temporarily invested in
collective investment funds and any earnings in the fund are credited to
the participants' accounts.
The sixth amendment to the Plan was adopted in 1993 which provides that
the Corporation makes formula matching contributions for each plan year
commencing after December 31, 1992, if at least 80% of the consolidated
earnings goal of the Corporation has been met for that plan year. For
each calendar quarter commencing after December 31, 1993, the Corporation
will also make quarterly matching contributions in an amount equal to 25%
of each eligible participant's basic contributions made during that
calendar quarter not in excess of 4% of his or her earnings for that
calendar quarter. This amendment also established a balanced fund and a
growth fund which increases the investment options under the Plan to six.
In addition, provisions for loans to participants were established by this
amendment. Certain provisions of the sixth amendment are effective
January 1, 1993, July 1, 1993 and October 1, 1993, respectively.
The Plan funds are administered under the terms of a Trust agreement with
The Northern Trust Company. The Trust agreement provides, among other
things, that the Trustee shall keep account of all investments, receipts
and disbursements and other transactions and shall provide annually a
report setting forth such transactions and the status of the funds at the
end of the period.
The Plan is administered by the Pension and Investment Committee, which
consists of three or more members appointed by the Board of Directors of
USG Corporation. Administrative expenses of the Plan, except for charges
such as brokerage fees and expenses related to group annuity contracts,
are paid by the Corporation.
- 7 -
<PAGE> 12
At December 31, 1994 and 1993, there were approximately 10,188 and 9,730
participants in the Plan, respectively.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The amounts in the accompanying statements were accumulated from the
reports of the Trustee (Note 1). The statements are prepared on the
accrual basis of accounting. Contributions to the Plan are made
throughout the year and adjustments are made to the statements to accrue
for the portion of annual contributions unpaid at year-end.
All investments of the Plan are valued at market. Unrealized appreciation
(depreciation) of investments of the Plan represents the change between
years in the difference between the market value and cost of the
investments.
Realized gains or losses on the sale of investments are calculated based
upon the historical average cost of the investments. Market value and
cost are equal for the group annuity contract and short-term investments.
Metropolitan Life Insurance Co., Provident Life Insurance Co. and John
Hancock Mutual Life Insurance Co. group annuity contracts earned
guaranteed interest at rates varying from 5.75% to 7.76% at December 31,
1994. The rates for 1993 ranged from 5.75% to 8.77%. The Insurance
contract earnings are calculated net of administrative fees.
For the USG Common Stock Fund, cost is $53,616,499 and $49,882,418 as of
December 31, 1994 and 1993, respectively. For the Equity Index Fund,
market value increased $7,528 and $315,649 in excess of cost at December
31, 1994 and 1993, respectively. For the Balanced Fund and the Growth
Fund, market value declined by $389,530 and $484,484 less than cost at
December 31, 1994, respectively.
Pending transactions from participants' elections for transfers between
funds represent the fourth quarter transfers between funds that were
elected by participants but have not been executed by the Trustee before
year-end as well as withdrawals from participants' accounts to make loans
to them. In order to present the proper balance of net assets in each
fund at year-end, a receivable and payable were used to record such
pending transactions and the net amount of transfers in or out for each
fund during the year was presented in participants' elections for
transfers between funds on the accompanying statement of changes in net
assets available for plan benefits.
Benefits payable at year-end relate to amounts owed to participants who
have terminated the Plan and amounts that are being withdrawn by active
participants.
- 8 -
<PAGE> 13
3. TAX STATUS
The Plan, as amended and restated, effective January 1, 1989, meets the
requirements of Section 401 (a) of the Internal Revenue Code and,
accordingly, its income is exempt from Federal income tax under Section
501 (a). Employer contributions and the income of the Plan are not
taxable to the participants until distributions are made.
4. EMPLOYER CONTRIBUTIONS
The Corporation will make a contribution with respect to each eligible
participant only if at least 80% of the Corporation's consolidated
earnings goal is met.
The Corporation matching contribution schedule was changed for the 1993
Plan year. Beginning July 1, 1993, each 1% increase in goal attainment
from 80% to 99% of goal results in a corresponding 1% increase in the
profit sharing match, starting at a 10% match with the attainment of 80%
of earnings goal. Each 1% increase in goal attainment from 100% to 109%
of goal will result in a 2% increase in the profit sharing match, starting
from a 30% match with attainment of 100% of goal earnings. And each 1%
increase in goal attainment from 110% and above will result in a 2.5%
increase in the profit sharing match, starting from 50% matching with
attainment of 110% of goal earnings. Before June 30, 1993, the
Corporation matching contribution was 10% with attainment of 80% to 89.9%
of earnings goal, 20% matching with attainment of 90% to 99.9% of earnings
goal, 30% matching contribution with attainment of 100% to 109.9% of
earnings goal and 50% matching contribution with attainment of 110% to
119.9% of earnings goal. With every subsequent incremental increase of 10
full percentage points in achievement of consolidated earnings goal there
was an incremental increase of 25 percentage points in corporation
contributions measured as a percent of participants' contributions.
Employer contribution amounts forfeited by terminated employees are
applied as a credit against future Corporation contributions or used to
pay fees of the plan and are held in the Forfeiture Cash Account.
5. DISTRIBUTION ON TERMINATION OF THE PLAN
In the event of any termination of the Plan, the account balances of all
affected participants shall become non-forfeitable.
- 9 -
<PAGE> 14
6. INVESTMENTS
The following is a summary of the Plan's investments as well as the net
realized and unrealized appreciation (depreciation) for 1994 and 1993:
<TABLE>
<CAPTION>
INVESTMENTS AT DECEMBER 31, 1994 DECEMBER 31, 1993
-------------------------- ---------------------------
FAIR VALUE NET NET
DETERMINED BY APPRECIATION APPRECIATION
QUOTED MARKET FAIR (DEPRECIATION) FAIR (DEPRECIATION)
PRICE: VALUE IN FAIR VALUE VALUE IN FAIR VALUE
- -------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C>
USG Common
Stock $ 8,762,813 $ (3,644,960) $ 7,779,857 $ 860,654
Vanguard Index
Trust 14,105,363 (206,279) 13,028,957 821,573
Fidelity Puritan
Fund 5,787,179 (120,381) 2,059,716 32,898
IDS New Dimension
Fund 6,016,093 (190,586) 2,240,128 20,037
----------- ------------ ----------- ------------
SUB-TOTAL 34,671,448 (4,162,206) 25,108,658 1,735,162
INVESTMENTS AT
FAIR VALUE
DETERMINED BY
OTHER THAN
QUOTED MARKET
PRICE:
- --------------
Mortgages,
Notes,
Contracts 88,626,521 --- 76,070,985 ---
Collective
Short-Term
Investment
Fund 18,250,631 --- 27,924,482 ---
------------ ------------ ------------ ------------
SUB-TOTAL 106,877,152 --- 103,995,467 ---
------------ ------------ ------------ ------------
TOTAL
INVESTMENTS $141,548,600 $ (4,162,206) $129,104,125 $ 1,735,162
============ ============= ============ ============
</TABLE>
- 10 -
<PAGE> 15
At December 31, 1994 and 1993, the following investments exceeded 5% of the net
assets available for the Plan benefits:
<TABLE>
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
USG Corporation Common Stock $ 8,762,813 $ 7,779,857
Metropolitan Life Insurance
Company, GAC 12577 10,955,303 20,330,895
Metropolitan Life Insurance
Company, GAC 13908 12,107,915 --
Provident Life Insurance
Company, GAC 627-05701 20,809,915 --
New York Life Insurance
Company, GAC 05892 -- 13,420,101
John Hancock Mutual Life
GAC 6317 44,753,388 42,319,989
Vanguard Index Trust 14,105,363 13,028,957
Collective Short Term
Investment Fund 18,250,631 27,889,436
</TABLE>
7. PARTICIPANT LOANS
Effective October 1, 1993, a participant can obtain a loan from the Plan.
Under the Plan's loan provisions, the maximum loan allowable is one half
of a participant's vested account balance or $50,000, whichever is less.
The minimum loan amount is $1,000. Additional amounts can be taken in
$100 increments. The Plan restricts the participant to one outstanding
loan at a time. The loan can be repaid by the participant over a five
year period, or sooner, in full, with interest at the prime rate. Default
on a loan by a participant will be treated as a hardship withdrawal and
will be subject to IRS tax penalties.
- 11 -
<PAGE> 16
SCHEDULE I
USG CORPORATION
INVESTMENT PLAN
SCHEDULE OF INVESTMENTS HELD AT YEAR
END DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT/NUMBER OF FAIR
SHARES COST VALUE
---------------- ------------ -------------
COMMON STOCK
- ------------
<S> <C> <C> <C>
USG Corporation 449,375 $ 53,616,499 $ 8,762,813
Vanguard Index Trust 326,362 14,097,835 14,105,363
IDS New Dimension Fund 452,678 6,500,577 6,016,093
Fidelity Puritan Fund 390,762 6,176,709 5,787,179
-------- ----------- ------------
TOTAL COMMON STOCKS 1,619,177 80,391,620 34,671,448
--------- ------------ ------------
CONTRACTS
- ---------
Metropolitan Life Insurance
Company, GAC 13908 $12,107,915 12,107,915 12,107,915
Metropolitan Life Insurance
Company, GAC 12577 $10,955,303 10,955,303 10,955,303
Provident Life Insurance
Company, GAC 627-05701 $20,809,915 20,809,915 20,809,915
John Hancock Mutual Life,
GAC 6317 $44,753,388 44,753,388 44,753,388
----------- ---------- ----------
TOTAL CONTRACTS $88,626,521 88,626,521 88,626,521
----------- ---------- ----------
SHORT-TERM INVESTMENTS
- ----------------------
Collective Government
Short-Term Investment
Fund $ 4,101,759 4,101,759 4,101,759
Collective Short-Term
Investment Fund $14,148,872 14,148,872 14,148,872
------------ ------------
TOTAL SHORT-TERM
INVESTMENTS $ 18,250,631 $ 18,250,631
------------ ------------
TOTAL INVESTMENTS $187,268,772 $141,548,600
============ ============
</TABLE>
- 12 -
<PAGE> 17
SCHEDULE II
USG CORPORATION
INVESTMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
SERIES OF TRANSACTIONS IN THE SAME SECURITY:
<TABLE>
<CAPTION>
TOTAL COST TOTAL CURRENT NET
DESCRIPTION OF NUMBER OF OF NUMBER OF VALUE OF GAIN
SECURITY PURCHASES ASSET SALES SALES (LOSS)
-------------- --------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Collective
Short-term
Investment
Fund 430 $80,783,209 222 $91,235,290 ---
New York Life
GAC #05892 7 590,151 7 14,010,252 ---
Metropolitan
GAC #12577 12 1,174,151 1 10,549,743 ---
Provident Life
GAC #627-05701 9 20,809,915 - --- ---
Metropolitan
GAC #13908 3 12,107,914 - --- ---
</TABLE>
- 13 -
<PAGE> 18
CONSENT OF INDEPENDENT PUBLIC AUDITORS
WITH RESPECT TO FORM S-8
As independent public auditors, we hereby consent to the incorporation by
reference of our report, dated February 27, 1995, appearing in the USG
Corporation Investment Plan Annual Report on Form 11-K for the year ended
December 31, 1994, into USG Corporation's previously filed Registration
Statements No.2-94787 and 33-9948 on Form S-8. It should be noted that we have
not examined any financial statements of the Investment Plan subsequent to
December 31, 1994, or performed any audit procedures subsequent to the date of
our report.
/s/ Hill, Taylor & Co.
Chicago, Illinois
February 27, 1995
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