SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
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, 1995.
OR
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>
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 1995.
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
--------------------------------
H. E. Pendexter, Jr.
Member of Pension and Investment
Committee
Date: March 29, 1996
<PAGE>
USG CORPORATION
INVESTMENT PLAN
REPORT ON AUDITED
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
YEARS ENDED DECEMBER 31, 1995 AND 1994
<PAGE>
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS:
Statement of Net Assets Available
for Plan Benefits
Statement of Changes in Net Assets
Available for Plan Benefits
Notes to Financial Statements
SUPPLEMENTAL SCHEDULES:
I. Schedule of Investments Held
at Year End
II. Schedule of Reportable Transactions
<PAGE>
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,
1995 and 1994, 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, 1995 and 1994, 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, 1995, and reportable
transactions for the year ended December 31, 1995, 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 23, 1996
<TABLE>
USG CORPORATION INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995 AND 1994
1995
<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 $ 15,965,324 $ 121,017,261 $ 4,490,474 $ 21,878,533 $8,292,660
Receivables:
Employer
contributions
receivable --- 5,506,150 --- --- ---
Employee loans
receivable --- --- --- --- ---
Employee
contributions
receivable 6,807 15,719 1,449 6,411 4,737
Interest and
dividend receivable 98 215,820 20,761 2 27
Pending transactions
from participants'
elections for
transfers between
funds or
forfeitures --- --- --- 956,988 852,825
Total Receivables 6,905 5,737,689 22,210 963,401 857,589
Total Assets 15,972,229 126,754,950 4,512,684 22,841,934 9,150,249
LIABILITIES:
Pending transactions
from participants'
elections for
transfers between
funds or
forfeitures 214,573 2,794,811 124,186 --- ---
Total Liabilities 214,573 2,794,811 124,186 --- ---
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 15,757,656 $ 123,960,139 $ 4,388,498 $ 22,841,934 $ 9,150,249
<CAPTION>
FORFEITURE INVESTMENT
GROWTH CASH PLAN
FUND ACCOUNT LOANS TOTAL
<S> <C> <C> <C> <C>
ASSETS:
Investments at
Market $ 11,173,418 $ 56,911 $ --- $ 182,874,581
Receivables:
Employer
contributions
receivable --- --- --- 5,506,150
Employee loans
receivable --- --- 5,447,027 5,447,027
Employee
contributions
receivable 6,863 --- --- 41,986
Interest and
dividend receivable 1 281 --- 236,990
Pending transactions
from participants'
elections for
transfers between
funds or
forfeitures 1,303,996 33,690 904,717 4,052,216
Total Receivables 1,310,860 33,971 6,351,744 15,284,369
Total Assets 12,484,278 90,882 6,351,744 198,158,950
LIABILITIES:
Pending transactions
from participants'
elections for
transfers between
funds or
forfeitures --- --- --- 3,133,570
Total Liabilities --- --- --- 3,133,570
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 12,484,278 $ 90,882 $ 6,351,744 $ 195,025,380
The accompanying notes to financial statements are an integral part of these statements.
</TABLE>
<PAGE>
USG CORPORATION INVESTMENT PLAN
<TABLE>
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1995 AND 1994
1994
<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
The accompanying notes to financial statements are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
USG CORPORATION INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1995 AND 1994
1995
<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 $ 8,956,154 $ 114,852,726 $ 4,042,546 $ 13,911,850 $ 5,771,470
ADD (DEDUCT):
Corporation
contributions --- 8,031,143 --- --- ---
Employee
contributions 1,926,937 8,776,541 553,605 2,152,522 1,277,618
1,926,937 16,807,684 553,605 2,152,522 1,277,618
Income from investments:
Dividend income --- --- --- 451,179 220,314
Interest income 2,411 7,209,145 248,810 315 486
Realized gain (loss)
on sale of
investments (245,236) --- --- 175,248 206,491
Unrealized
appreciation
for the year 5,496,461 --- --- 4,933,282 961,587
5,253,636 7,209,145 248,810 5,560,024 1,388,878
Benefit payments and
participant
withdrawals (342,218) (8,469,035) (259,936) (760,126) (201,243)
Participants' elections
for transfers
between funds (71,044) (4,924,839) (208,328) 1,937,298 804,570
Withdrawals from funds 34,191 (1,515,542) 11,801 40,366 108,956
due to loans
Net increase in
assets during
the year 6,801,502 9,107,413 345,952 8,930,084 3,378,779
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 15,757,656 $ 123,960,139 $ 4,388,498 $ 22,841,934 $9,150,249
<CAPTION>
FORFEITURE INVESTMENT
GROWTH CASH PLAN
FUND ACCOUNT LOANS TOTAL
<S> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ 5,948,930 $ 17,735 $ 4,876,708 $158,378,119
ADD (DEDUCT):
Corporation
contributions --- --- --- 8,031,143
Employee
contributions 1,757,974 --- --- 16,445,197
1,757,974 --- --- 24,476,340
Income from
investments:
Dividend income 103,477 --- --- 774,970
Interest income 250 2,120 439,088 7,902,625
Realized gain (loss)
on sale of
investments 379,254 --- --- 515,757
Unrealized
appreciation for
the year 2,038,294 --- --- 13,429,624
2,521,275 2,120 439,088 22,622,976
Benefit payments and
participant
withdrawals (222,736) --- (196,761) (10,452,055)
Participants'
elections for
transfers between
funds 2,391,316 71,027 --- ---
Withdrawals from funds 87,519 --- 1,232,709 ---
due to loans
Net increase in
assets during the
year 6,535,348 73,147 1,475,036 36,647,261
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 12,484,278 $ 90,882 $ 6,351,744 $ 195,025,380
The accompanying notes to financial statements are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
USG CORPORATION INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 1995 AND 1994
1994
<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 $ 9,243,132 $ 98,756,106 $ 4,169,471 $ 12,800,852 $ 3,430,348
ADD (DEDUCT):
Corporation
contributions --- 16,273,711 --- --- ---
Employee
contributions 1,499,307 7,911,878 537,884 2,017,850 1,084,472
1,499,307 24,185,589 537,884 2,017,850 1,084,472
Income from
investments:
Dividend income --- --- --- 391,793 184,263
Interest income 47,179 5,931,203 162,048 1,217 1,525
Realized gain (loss)
on sale of
investments (584,641) --- --- 101,842 251,991
Unrealized
depreciation
for the year (3,060,319) --- --- (308,121) (372,372)
(3,597,781) 5,931,203 162,048 186,731 65,407
Benefit payments
and participant
withdrawals (264,030) (7,553,496) (438,426) (629,232) (117,860)
Participants'
elections for
transfers between
funds 2,144,303 (4,086,076) (362,048) (371,181) 1,412,268
Withdrawals from
funds (68,777) (2,364,944) (26,383) (93,170) (103,165)
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
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 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>
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
beginning of year $ 3,299,495 $ 3,378 $ 2,304,501 $ 134,007,283
ADD (DEDUCT):
Corporation
contributions --- --- --- 16,273,711
Employee
contributions 1,591,117 --- --- 14,642,508
1,591,117 --- --- 30,916,219
Income from
investments:
Dividend income 89,396 --- --- 665,452
Interest income 1,050 1,774 131,660 6,277,656
Realized gain
(loss) on sale
of investments 216,748 --- --- (14,060)
Unrealized
depreciation
for the year (407,334) --- --- (4,148,146)
(100,140) 1,774 131,660 2,780,902
Benefit payments
and participant
withdrawals (105,267) (7,693) (194,625) (9,310,629)
Participants'
elections for
transfers between
funds 1,242,458 20,276 --- ---
Withdrawals from
funds due 21,267 --- 2,635,172 ---
to loans
Administrative
expenses --- --- --- (15,656)
Net increase
(decrease) in
assets during
the year 2,649,435 14,357 2,572,207 24,370,836
NET ASSETS AVAILABLE
FOR PLAN BENEFITS,
end of year $ 5,948,930 $ 17,735 $ 4,876,708 $ 158,378,119
The accompanying notes to financial statements are an integral part of these statements.
</TABLE>
<PAGE>
USG CORPORATION
INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
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 any one or
a combination 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, and was reopened July 1,
1993.
Participants may elect to have their contributions invested in 5%
increments in any fund and can change their investment election
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, 1995 and 1994, 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, 1995 and 1994, 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. The ninth amendment
adopted by the Plan on January 1, 1996 makes further changes to
the maximum Corporation quarterly matching contributions. 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% prior to January 1, 1996 and 6% effective January 1, 1996 as
amended by the ninth amendment, of his or her earnings for that
calendar quarter.
The sixth amendment also established a balanced fund and a growth
fund which increased the investment options under the Plan to
six. In addition, provisions for loans to participants were
established by this amendment.
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.
At December 31, 1995 and 1994, there were approximately 10,723
and 10,188 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 5.66% to 7.20%
at December 31, 1995. The rates for 1994 ranged from 5.75% to
7.76%. The Insurance contract earnings are calculated net of
administrative fees.
For the USG Common Stock Fund, cost was $54,917,273 and
$53,616,499 as of December 31, 1995 and 1994, respectively. For
the Equity Index Fund, the amount by which market value exceeded
cost was $4,940,810 at December 31, 1995, and $7,528 at December
31, 1994. For the Balanced Fund, market value exceeded cost by
$572,057 at December 31, 1995, and the market value was below
cost by $389,530 at December 31, 1994. For the Growth Fund,
market value was $1,553,811 above cost at December 31, 1995 and
the market value was below cost by $484,484 at December 31, 1994.
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.
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 formula matching contribution with
respect to each eligible participant only if at least 80% of the
Corporation's consolidated earnings goal is met.
The Corporation formula matching contribution schedule was
amended through the eighth amendment effective with the 1995 Plan
year. Beginning January 1, 1995, each 1% increase in goal
attainment from 80% to 100% of goal results in a corresponding
1.5% 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 140% of goal will result
in a 1% increase in the profit sharing match, starting from a 40%
match with attainment of 100% of goal earnings. And each 1%
increase in goal attainment above 140% results in a 2% increase
in the profit sharing match, starting from 80% matching with
attainment of 140% of goal earnings.
Employer contribution amounts forfeited by terminated employees
are applied as a credit against future Corporate 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.
<PAGE>
6. INVESTMENTS
The following is a summary of the Plan's investments as well as the
net realized and unrealized appreciation (depreciation) for 1995
and 1994:
<TABLE>
<CAPTION>
INVESTMENTS AT DECEMBER 31, 1995 DECEMBER 31, 1994
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> <C>
USG Common
Stock $15,913,830 $ 5,251,225 $ 8,762,813 $ (3,644,960)
Vanguard Index
Trust 21,879,768 5,108,530 14,105,363 (206,279)
Fidelity Puritan
Fund 8,263,417 1,168,078 5,787,179 (120,381)
IDS New Dimension
Fund 11,173,930 2,417,548 6,016,093 (190,586)
SUB-TOTAL 57,230,945 13,945,381 34,671,448 (4,162,206)
<CAPTION>
INVESTMENTS AT
FAIR VALUE
DETERMINED BY
OTHER THAN
QUOTED MARKET
PRICE:
<S> <C> <C> <C> <C>
Mortgages,
Notes,
Contracts 79,041,920 --- 88,626,521 ---
Collective
Short-Term
Investment
Fund 46,601,716 --- 18,250,631 ---
SUB-TOTAL 125,643,636 --- 106,877,152 ---
TOTAL
INVESTMENTS $182,874,581 $ 13,945,381 $141,548,600 $ (4,162,206)
</TABLE>
<PAGE>
At December 31, 1995 and 1994, the following investments exceeded 5% of
the net assets available for the Plan benefits:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
USG Corporation Common Stock $15,913,830 $ 8,762,813
Metropolitan Life Insurance
Company, GAC 13908 15,057,347 12,107,915
Metropolitan Life Insurance
Company, GAC 12577 - 10,955,303
Provident Life Insurance
Company, GAC 627-05701 22,233,313 20,809,915
John Hancock Mutual Life
Insurance Company, GAC 8396 10,031,727 -
John Hancock Mutual Life
Insurance Company, GAC 6317 31,719,533 44,753,388
Vanguard Index Trust 21,879,768 14,105,363
IDS New Dimension Fund 11,173,930 -
Collective Short Term
Investment Fund 46,601,716 18,250,631
</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 penalties.
<PAGE>
<TABLE>
SCHEDULE I
USG CORPORATION
INVESTMENT PLAN
SCHEDULE OF INVESTMENTS HELD AT YEAR END
DECEMBER 31, 1995
<CAPTION>
PRINCIPAL
AMOUNT/NUMBER FAIR
OF SHARES COST VALUE
COMMON STOCK
<S> <C> <C> <C>
USG Corporation 530,461 $ 54,917,273 $ 15,913,830
Vanguard Index Trust 377,693 16,938,958 21,879,768
IDS New Dimension Fund 647,014 9,620,119 11,173,930
Fidelity Puritan Fund 485,798 7,691,360 8,263,417
TOTAL COMMON STOCKS 89,167,710 $57,230,945
CONTRACTS
Metropolitan Life
Insurance Company,
GAC 13908 $15,057,347 15,057,347 15,057,347
Provident Life
Insurance Company,
GAC 627-05701 $22,233,313 22,233,313 22,233,313
John Hancock Mutual Life
Insurance Company,
GAC 8396 $10,031,727 10,031,727 10,031,727
John Hancock Mutual Life
Insurance Company,
GAC 6317 $31,719,533 31,719,533 31,719,533
TOTAL CONTRACTS $79,041,920 79,041,920 79,041,920
SHORT-TERM INVESTMENTS
Collective Government
Short-Term Investment
Fund $ 4,490,474 4,490,474 4,490,474
Collective Short-Term
Investment Fund $42,111,242 42,111,242 42,111,242
TOTAL SHORT-TERM
INVESTMENTS $46,601,716 $ 46,601,716 $ 46,601,716
TOTAL INVESTMENTS $214,811,346 $182,874,581
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
USG CORPORATION
INVESTMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
SERIES OF TRANSACTIONS IN THE SAME SECURITY:
<CAPTION>
TOTAL COST TOTAL CURRENT
DESCRIPTION OF NUMBER OF OF NUMBER OF VALUE OF
SECURITY PURCHASES ASSET SALES SALES
<S> <C> <C> <C> <C>
Collective
Short-term
Investment
Fund 380 $58,561,154 232 $30,647,045
Metropolitan
GAC #12577 7 423,483 1 11,378,786
John Hancock Mutual
Life Insurance,
GAC 8396 2 10,031,727 0 -
John Hancock Mutual
Life Insurance,
GAC 6317 12 2,147,826 4 15,181,680
</TABLE>
<PAGE>
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 23, 1996, appearing in the USG
Corporation Investment Plan Annual Report on Form 11-K for the year ended
December 31, 1995, 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, 1995, or performed any audit procedures
subsequent to the date of our report.
/s/ Hill, Taylor & Co.
Chicago, Illinois
February 23, 1996
<PAGE>
