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, 2002.
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
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 2002.
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/ Peter K. Maitland
-----------------------------
Peter K. Maitland
Vice President, Compensation,
Benefits and Administration
Date: March 27, 2003
USG CORPORATION
INVESTMENT PLAN
REPORT ON AUDITED
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULES
YEARS ENDED DECEMBER 31, 2002 AND 2001
TABLE OF CONTENTS
PAGE
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available
for Benefits 2
Statements of Changes in Net Assets
Available for Benefits 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULES:
I. Schedule of Investments Held
at Year End 11
II. Schedule of Reportable Transactions 12
MEMBER OF THE MEMBER OF THE
ILLINOIS CPA AMERICAN INSTITUTE
SOCIETY OF CERTIFIED
PUBLIC ACCOUNTANTS
HILL, TAYLOR LLC
CERTIFIED PUBLIC ACCOUNTANTS
116 South Michigan Avenue - 11th Floor
Chicago, Illinois 60603
312-332-4964
Fax: 312-332-0181
INDEPENDENT AUDITORS' REPORT
PENSION AND INVESTMENT COMMITTEE
USG CORPORATION
We have audited the accompanying statements of net assets available for benefits
of the USG Corporation Investment Plan as of December 31, 2002 and 2001, and the
related statements of changes in net assets available for 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 financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 benefits of the Plan as of
December 31, 2002 and 2001, and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed 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, 2002, and reportable transactions for the
year ended December 31, 2002, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. 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.
March 14, 2003
USG CORPORATION INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
2002 2001
------------ ------------
ASSETS:
Investments, at market
$336,413,983 $337,667,612
------------ ------------
Receivables:
Employee loans
Receivable 25,110,551 22,416,796
Employer contributions
Receivable 20,755,665 ---
Interest and
Dividends receivable 71,643 66,182
------------ ------------
Total Receivables 45,937,859 22,482,978
------------ ------------
Total Assets 382,351,842 360,150,590
------------ ------------
LIABILITIES:
Accrued administrative
Fees 177,595 186,813
------------ ------------
Total Liabilities 177,595 186,813
------------ ------------
NET ASSETS AVAILABLE
FOR BENEFITS $382,174,247 $359,963,777
============ ============
The accompanying notes to financial statements are an integral part of these
statements.
- 2 -
USG CORPORATION INVESTMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2002 AND 2001
2002 2001
------------- -------------
NET ASSETS AVAILABLE
FOR BENEFITS,
beginning of year $ 359,963,777 $ 394,376,344
------------- -------------
ADD (DEDUCT):
Corporation contributions 32,239,836 8,478,636
Employee contributions 31,793,149 30,681,531
------------- -------------
64,032,985 39,160,167
------------- -------------
Income from investments:
Dividend income 1,723,247 1,625,064
Interest income 11,553,884 12,142,488
Realized gain (loss) on
sale of investments (9,911,879) (7,970,701)
Unrealized depreciation
for the year (21,497,946) (30,047,663)
------------- -------------
(18,132,694) (24,250,812)
------------- -------------
Benefit payments and
participant withdrawals (22,503,535) (48,470,451)
Net transactions due to loans (11,911) 133,086
Administrative expenses (1,174,375) (984,557)
------------- -------------
Net increase (decrease) in assets
during the year 22,210,470 (34,412,567)
------------- -------------
NET ASSETS AVAILABLE
FOR BENEFITS,
end of year $ 382,174,247 $ 359,963,777
============= =============
The accompanying notes to financial statements are an integral part of these
statements.
- 3 -
USG CORPORATION
INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
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. The Plan was subsequently
amended and completely restated effective as of January 1, 1989 and most
recently as of July 1, 1997 ("restated Plan"). The amendments and
restatements incorporate all prior amendments to the Plan and make changes
to reflect the merger of the USG Corporation Savings Plan for Hourly
Employees and change the name of the Plan to the USG Corporation Investment
Plan, effective January 1, 1989; and to implement the daily valuation of
investments in the participants' accounts at fair market value on each
business day effective July 1, 1997.
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 20% (9% for highly compensated employees) of their eligible pay to the
Plan through payroll deductions on a before-tax basis during the year
effective January 1, 2002, 15% from January 1, 1998 to December 31, 2001,
12% from July 1, 1997 to December 31, 1997, 9% from January 1, 1989 to June
30, 1997, 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 three years of credited
service, effective January 1, 2002 (five years previously), 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 nine funds: (a) common stock of USG Corporation (USG Common
Stock Fund), (b) 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), (c) 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), (d) 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), (e) a small cap equity fund which seeks maximum
long-term growth of capital by investing in common stock of rapidly growing
U.S. companies with market capitalization of less than $1 billion at the
time of initial investment (Small Cap Equity Fund), (f) a large cap value
fund which seeks to provide long-term growth of principal and income by
investing in common stocks of companies that
- 4 -
appear to be temporarily undervalued by the stock market but have a
favorable outlook for long-term growth (Large Cap Value Fund), (g) an
international equity fund which seeks long-term capital appreciation
through investments in common stock of established non-U.S. companies
(International Equity Fund), (h) a bond fund which seeks to provide current
income and preservation of capital by investing in investment grade
corporate debt securities, government bonds and mortgages in both U.S. and
foreign markets, (Bond Fund) or (i) a managed separate account which seeks
to preserve principal and income while maximizing current income by
investing in a diversified pool of Guaranteed Investment Contracts (GICs),
separate account GICs, synthetic GICs or Structured Investment Contracts
(SICs) and Bank Investment Contracts (BICs) of varying maturity, size and
yield (Stable Value Fund).
The Equity Index Fund is invested in the Vanguard Institutional Index Fund.
The Balanced Fund is invested in the Fidelity Puritan Fund.
The Growth Fund is invested in the AXP New Dimensions Fund - Class Y.
The Small Cap Equity Fund is invested in the Franklin Small-Mid Cap Growth
Fund - Class A.
The Large Cap Value Fund is invested in the Dodge & Cox Stock Fund.
The International Equity Fund is invested in the Templeton Foreign Fund -
Class A.
The Bond Fund is invested in the PIMCO Total Return Fund - Institutional
Class.
The Stable Value Fund is managed by PRIMCO Capital Management. At December
31, 2002, the Stable Value Fund was primarily composed of group annuity
contracts maintained by banks and insurance companies.
Participants may elect to have their contributions invested in 1%
increments in any fund or combination of funds and to change their
contribution rate, suspend or resume their contributions, change their
investment allocations, transfer their investments from one fund to another
and apply for a loan by calling the USG Investment Plan Connection, an
automated telephone service, on any day. Certain Executive officers of the
Corporation must pre-clear any transfer out of the USG Common Stock Fund
with the USG Corporate Secretary.
The Corporation made a regular 50% matching contribution up to the first 6%
of the participants' eligible pay contributed to the Plan, credited to the
participants' accounts each pay period starting June 1, 2001. From January
1, 2001 to May 31, 2001 the Corporation made a regular 25% matching
contribution up to the first 6% of each participant's eligible pay
contributed to the Plan.
The Plan was amended effective January 1, 1999 to provide for immediate
eligibility and enrollment to join the Plan for newly hired employees and
current employees who are in their one year waiting period as of January 1,
1999, unless the employee elects not to join the Plan.
- 5 -
The fifth amendment to the Plan, effective November 8, 2000, does not allow
additional participant or employer contributions to the USG Common Stock
Fund. The amendment also does not allow the transfer of any portion of a
participant's interest from any other fund into the USG Common Stock Fund.
The sixth amendment to the Plan, effective June 1, 2001, increased the
regular matching contribution on the first 6% of participant's eligible pay
contributed to the Plan to 50% from 25%, credited to the participant's
account each pay period.
The seventh amendment, effective January 1, 2002, made several technical
changes in conjunction with the underlying Internal Revenue Code as to
contribution limits and distribution periods and limits, increasing the
employee contribution rate to 20%, increasing the annual basic contribution
limit to $11,000, increasing the plan year earnings limit to $200,000, and
increasing the maximum annual addition to $40,000. This amendment also
changed participant vesting in Corporation contributions to three years
from five and changed the Corporation matching formula to attainment of
certain EBITDAR goals from the previous consolidated earnings goals.
The eighth amendment to the Plan, effective January 1, 2003 allows for
catch-up contributions for participants who will have attained age 50 by
the end of the plan year. The catch-up contribution limits are in
accordance with, and subject to the limitations of, Section 414(v) of the
Internal Revenue Code. The catch-up contributions are not taken into
account for purposes of determining compliance with other contribution
limits of the Plan.
If the Trustee is unable to invest any contributions immediately, the funds
are temporarily invested in short-term investment funds and any earnings in
the fund are credited to the participants' accounts.
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 five members appointed by the Corporation. Administrative
expenses and other fees of the Plan are shared by the Corporation and the
participants.
At December 31, 2002 and 2001, there were approximately 12,238 and 12,089
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 financial statements of the Plan are
prepared under the accrual method of accounting. Contributions to the Plan
are made throughout the year and adjustments are made to the financial
statements to accrue for the portion of annual contributions unpaid at
year-end.
- 6 -
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.
The Plan's investments are stated at market value except for its group
annuity contracts with insurance companies, which are valued at contract
value because they are fully benefit responsive. For example, participants
may ordinarily direct the withdrawal or transfer of all or a portion of
their investment at contract value. There are no reserves against contract
value for credit risk of the contract issuers. Market value and cost are
equal for the group annuity contracts and short-term investments. Shares of
registered investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year-end. The
Company stock is valued at its quoted market price. Participant loans
receivable are valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date. Realized gains or losses on the sale of investments
are calculated based upon the historical average cost of the investments.
Unrealized appreciation or depreciation of investments of the Plan
represents the change between years in the difference between the market
value and cost of the investments.
The guaranteed investment contracts in the Stable Value Fund earned
guaranteed interest at rates varying from 1.44% to 7.47% at December 31,
2002. The rates for 2001 ranged from 4.50% to 7.47%. The guaranteed
investment contracts earnings are calculated net of administrative fees.
For the USG Common Stock Fund, cost was $23,326,234 and $26,311,866 as of
December 31, 2002 and 2001, respectively. For the Equity Index Fund, cost
exceeded market value by $7,123,086 at December 31, 2002 and market value
exceeded cost by $5,999,385 at December 31, 2001. For the Balanced Fund,
cost exceeded market value by $2,921,244 and $1,069,695 at December 31,
2002, and 2001, respectively. For the Growth Fund, cost exceeded market
value by $13,006,764 and $5,165,244 at December 31, 2002, and 2001,
respectively. For the Small Cap Equity Fund, cost exceeded market value by
$5,738,888 and $3,724,992 at December 31, 2002 and 2001, respectively. Cost
exceeded market value by $654,672 for the Large Cap Value Fund at December
31, 2002. Cost exceeded market value by $90,878 and $96,428 for the
International Equity Fund at December 31, 2002, and 2001, respectively. For
the Bond Fund, cost exceeded market value by $24,756 and $130,079 at
December 31, 2002, and 2001, respectively.
Pending transactions due to loans represent reconciliations of the loan
amounts between the Trustee and recordkeeper at year-end, which will be
posted to the Trustee's records in the subsequent year.
Benefits are recorded when paid.
- 7 -
3. TAX STATUS
The Plan, as amended and restated, effective July 1, 1997, 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 USG Companies EBITDAR
goal is met for that plan year. In 2001 and years prior to that, the
formula used in the matching contribution calculation is the consolidated
earnings goal, which is based on the net sales of the USG Companies less
cost of sales and selling and administrative expenses. Beginning January 1,
2002, the Plan uses EBITDAR (Consolidated Net Earnings of the USG Companies
before Interest, Taxes, Depreciation, Amortization, Reorganization expenses
and other income and expense items) as the target to measure performance
attainment to be consistent with other USG incentive plans.
Beginning January 1, 2002, the Corporation formula matching contribution
schedule was set as follows: 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. There is no
additional increase in matching percentage for achieving an EBITDAR goal
beyond 140%.
Employer contribution amounts forfeited by terminated employees are applied
as a credit against future Corporate contributions or used to pay
administrative expenses and other fees of the Plan and are held in the
Forfeiture Cash Account.
5. DISTRIBUTION ON TERMINATION OF THE PLAN
In the event of termination of the Plan, the account balances of all
affected participants shall become non-forfeitable.
- 8 -
6. INVESTMENTS
The following is a summary of the Plan's investments as well as the net
realized and unrealized appreciation (depreciation) for 2002 and 2001:
2002 2001
------ ------
NET NET
APPRECIATION APPRECIATION
FAIR (DEPRECIATION) FAIR (DEPRECIATION)
VALUE IN FAIR VALUE VALUE IN FAIR VALUE
------------- ------------- ------------- -------------
Common Stock:
USG Common
Stock $ 4,839,349 $ 1,650,999 $ 3,693,161 ($ 12,227,850)
------------- ------------- ------------- -------------
Mutual Funds:
Vanguard Index
Trust 43,804,332 (13,696,593) 58,731,580 (9,319,893)
Fidelity Puritan
Fund 19,758,185 (2,548,063) 23,074,841 (1,010,979)
AXP New Dimensions
Fund 35,894,239 (10,326,773) 47,972,711 (9,376,406)
Franklin Small-Mid
Cap Growth Fund 13,038,488 (5,672,594) 18,097,052 (5,626,225)
Dodge & Cox
Stock Fund 7,141,212 (927,772) --- ---
Templeton Foreign
Fund 6,254,958 (607,795) 7,111,988 (723,026)
PIMCO Total Return
Fund 16,860,651 694,596 10,398,032 266,015
------------- ------------- ------------- -------------
142,752,065 (33,084,994) 165,386,204 (25,790,514)
------------- ------------- ------------- -------------
Mortgages, Notes,
Contracts 178,789,884 24,170 157,394,326 ---
Collective Short-Term
Investment Fund 10,032,685 --- 11,193,921 ---
------------- ------------- ------------- -------------
TOTAL
INVESTMENTS $ 336,413,983 ($ 31,409,825) $ 337,667,612 ($ 38,018,364)
============= ============= ============= =============
All investments in the Plan are participant-directed investments.
- 9 -
At December 31, 2002 and 2001, the following investments
(participant-directed) exceeded 5% of the net assets available for Plan
benefits:
2002 2001
------------ -------------
Vanguard Index Trust $ 43,804,332 $ 58,731,580
Fidelity Puritan Fund 19,758,185 23,074,841
AXP New Dimension Fund 35,894,239 47,972,711
Franklin Small-Mid Cap Growth Fund 13,038,488 18,097,052
Allstate Insurance Company
Contract 77032 11,696,347 18,792,949
Monumental Life Insurance Company
Contract 00246TR 22,478,371 19,007,928
State Street Bank & Trust
Contract 99010 15,461,787 23,270,179
UBS, Contract 5021 33,775,598 23,428,895
7. PARTICIPANT LOANS
Effective October 1, 1993, and as revised on July 1, 1997, a participant can
obtain loans 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 $1 increments. A participant must have a vested
account balance of at least $2,000 before he or she can apply for a loan.
The Plan restricts the participant to no more than two loans outstanding at
a time. Most loans can be repaid by the participant over a five-year period,
or sooner, in full, with interest at the prime rate in effect at the time of
requesting the loan. A residential loan can be repaid over a period of up to
30 years. Default on a loan by a participant is treated as a hardship
withdrawal and subject to IRS penalties.
- 10 -
SCHEDULE I
USG CORPORATION
INVESTMENT PLAN
SCHEDULE OF INVESTMENTS HELD AT YEAR END
DECEMBER 31, 2002
PRINCIPAL
AMOUNT/NUMBER OF FAIR
SHARES COST VALUE
---------------- ----------- -----------
COMMON STOCK
USG Corporation 572,704 $ 23,326,234 $ 4,839,349
Vanguard Index Trust 544,491 50,927,418 43,804,332
Fidelity Puritan Fund 1,251,310 22,679,429 19,758,185
AXP New Dimensions Fund 1,862,701 48,901,003 35,894,239
Franklin Small-Mid Cap
Growth Fund 594,009 18,777,376 13,038,488
Dodge & Cox Stock Fund 81,104 7,795,884 7,141,212
Templeton Foreign Fund 752,703 6,345,836 6,254,958
------------ ----------- -----------
TOTAL COMMON STOCK 178,753,180 130,730,763
----------- -----------
CORPORATE BONDS
PIMCO Total Return Fund 1,580,192 16,885,407 16,860,651
------------ ----------- -----------
CONTRACTS
Allstate, 77184 $ 18,872,984 18,872,984 18,872,984
Allstate, 77032 $ 11,696,347 11,696,347 11,696,347
Bank of America, 99-061 $ 8,966,896 8,966,896 8,966,896
Caisse des Deposts, 1077-01 $ 14,913,982 14,913,982 14,913,982
ING Life & Annuity, 14621 $ 4,039,047 4,039,047 4,039,047
ING Life & Annuity, 60035 $ 2,005,422 2,005,422 2,005,422
John Hancock Mutual Life
Insurance Co., GAC 9532 $ 10,678,493 10,678,493 10,678,493
JP Morgan Chase
Contract 401748-G $ 1,235,324 1,235,324 1,235,324
JP Morgan Chase
Contract AUSG01 $ 17,271,451 17,271,451 17,271,451
Monumental Life Insurance
Company, MDA0158FR $ 3,676,303 3,676,303 3,676,303
Monumental Life Insurance
Company, 00232TR $ 1,249,867 1,249,867 1,249,867
Monumental Life Insurance
Company, 00218TR $ 2,485,190 2,485,190 2,485,190
Monumental Life Insurance
Company, 00246TR $ 22,478,371 22,478,371 22,478,371
Prudential, 10092-211 $ 3,449,987 3,449,987 3,449,987
State Street Bank & Trust
Contract 98203 $ 2,528,602 2,528,602 2,528,602
State Street Bank & Trust
Contract 99010 $ 15,461,787 15,461,787 15,461,787
UBS, 5126 $ 4,004,233 4,004,233 4,004,233
UBS, 5021 $ 33,775,598 33,775,598 33,775,598
------------ ------------ ------------
TOTAL CONTRACTS $178,789,884 178,789,884 178,789,884
------------ ------------ ------------
SHORT-TERM INVESTMENTS
Collective Short-Term
Investment Fund $ 10,032,685 10,032,685 10,032,685
------------ ------------
TOTAL INVESTMENTS $384,461,156 $336,413,983
============ ============
- 11 -
SCHEDULE II
USG CORPORATION
INVESTMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2002
SERIES OF TRANSACTIONS IN THE SAME SECURITY:
TOTAL COST TOTAL CURRENT
DESCRIPTION OF NUMBER OF OF NUMBER OF VALUE OF
SECURITY PURCHASES ASSET SALES SALES
-------------- --------- ------ --------- ----------
None
- 12 -