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USG CORPORATION REPORTS HIGHER SALES AND OPERATING PROFIT FOR THIRD QUARTER 1992, CONTINUING PREVIOUS QUARTER TREND

 USG CORPORATION REPORTS HIGHER SALES AND OPERATING PROFIT
 FOR THIRD QUARTER 1992, CONTINUING PREVIOUS QUARTER TREND
 CHICAGO, Oct. 21 /PRNewswire/ -- USG Corporation (NYSE: USG) today reported a third quarter 1992 operating profit of $39 million and net sales of $474 million. These results compare favorably with third quarter 1991 operating profit of $38 million and net sales of $445 million.
 For the second consecutive quarter, net sales and operating profit for the Corporation's wholly owned domestic subsidiaries, United States Gypsum Company and L&W Supply Corporation, improved over the comparable 1991 quarters due to increased volume and higher selling prices for gypsum wallboard. These subsidiaries have benefited from the increase in new residential construction in 1992 versus 1991. Third quarter 1992 results for the Corporation's Interior Systems industry segment improved slightly over the second quarter of this year, but lagged 1991 results, reflecting the continuing slump in nonresidential construction.
 After applying interest expense and tax benefits, a net loss of $33 million, or $0.59 per share, was incurred for the third quarters of both 1992 and 1991.
 For the first nine months of 1992, USG reported an operating profit of $87 million, net sales of $1,341 million and a net loss of $131 million, or $2.35 per share. First nine months 1991 operating profit was $107 million on net sales of $1,295 million, while the net loss was $118 million, or $2.13 per share. The net losses were incurred due to the continued high level of interest expense associated with the Corporation's capital structure, and for 1991, an after-tax charge of $20 million, or $0.38 per share, that was recorded in the second quarter of 1991 related to the September 1991 divestiture of DAP Inc.
 Commenting on results for the 1992 third quarter, USG Chairman Eugene B. Connolly said, "This is the first time in several years that U.S. Gypsum and L&W Supply have reported consecutive quarterly increases in both net sales and operating profit over the prior year. These operating results are a further confirmation that the bottom of the residential construction cycle is now behind us. We look forward to continued improved results in our domestic gypsum-related businesses."
 Connolly pointed out that domestic gypsum wallboard prices have risen steadily since the 14-year low of $67.77 recorded during the first quarter of 1992. By the second quarter, average net realized prices had risen to $72.20, and for the third quarter prices rose to $73.03. This favorable trend reverses the downward pricing trend experienced during 1991 when wallboard prices fell from $77.05 in the first quarter to $71.32 in the third quarter. On a year-to-date basis, prices are 3.2 percent below the 1991 level and are 17.7 percent below the levels of as recently as two years ago. "As gypsum wallboard prices continue to rise, our profitability will do likewise.'' Connolly added that he was pleased with the third quarter performance of the corporation's interior systems industry segment, given the ongoing depressed condition of the nonresidential segment of the construction market. As previously disclosed, USG made significant progress during the third quarter toward completion of its debt restructuring. In late September, USG announced that it had reached an agreement on the terms of its debt restructuring with two of the three creditor groups and certain larger investors. On September 25, USG filed a preliminary disclosure statement with the Securities and Exchange Commission which outlined the terms of the restructuring. The corporation is awaiting completion of the SEC's review prior to beginning solicitation of its debtholders for support of the proposal. Once the solicitation process has been completed, USG intends to commence a prepackaged holding-company-only Chapter 11 bankruptcy as a means of implementing the restructuring.
 Also as previously announced, USG's operating subsidiaries will not be parties to the bankruptcy and will continue to pay their suppliers and other creditors in full and on time. In addition, suppliers to USG Corporation not directly involved in the restructuring will be unaffected. As of Sept. 30, USG had $163 million of cash on hand to support its trade credit and supplier relationships. This amount excludes $87 million in restricted cash from the sale of DAP.
 USG is a Fortune 250 building products manufacturer whose subsidiaries are market leaders in gypsum wallboard, joint compound and related gypsum products, ceiling tile and grid, and building products distribution.
 USG CORPORATION CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
 (In millions of dollars except per share figures)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Net sales $474 $445 $1,341 $1,295
 Gross profit 94 86 246 251
 Selling and administrative
 expenses 55 48 159 144
 Operating profit 39 38 87 107
 Interest expense, net 78 82 245 241
 Other expense, net 1 -- -- 3
 Taxes on income
 (income tax benefit) (7) (12) (27) (39)
 Loss from continuing
 operations (33) (32) (131) (98)
 Discontinued Operations:
 Operating earnings,
 net of taxes -- (1) -- --
 Reserve for DAP Inc.
 divestiture, net of taxes -- -- -- (20)
 Net loss (33) (33) (131) (118)
 Loss Per Common Share:
 Continuing operations (0.59) (0.56) (2.35) (1.75)
 Discontinued operations -- (0.03) -- (0.38)
 Net loss per common share (0.59) (0.59) (2.35) (2.13)
 Average number of
 common shares
 outstanding 55,789,213 55,837,726 55,783,474 55,606,543
 -0- 10/21/92
 /CONTACT: USG Corporate Communications, 312-606-4124, or Investor Communications Department, 312-606-5594/
 (USG) CO: USG Corporation ST: Illinois IN: CST SU: ERN


KD -- NY069 -- 2883 10/21/92 12:19 EDT
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Date:Oct 21, 1992
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