USG Makes Last Payment to Asbestos Fund

December 22, 2006 - USG, a leading manufacturer of building materials for the construction and remodeling industries, including sheetrock products, announced this week that it has made its last $3.05 billion payment to an asbestos fund that will compensate personal injury victims who are ill as a result of exposure to the company’s products.

Reuters reports that this is the third and final payment to be made, in accordance with a settlement that was reached in January 2006.  The first payment of $900 million was made on June 20 and USG chose to combine the last two payments into a single payment of $3.05 billion so that they could take advantage of 2006 deductions needed for a $1.1 billion federal tax refund it expects in 2007, reports the news agency.

"We are optimistic about USG's future and look forward to continued success implementing our strategic plans, unencumbered by asbestos liabilities," USG Chairman and Chief Executive William Foote said in a statement.

Executives report that the trust payments were funded using cash-on-hand, proceeds from a $500 million senior note offering and borrowings. USG says that the $1.1 billion federal tax refund will be used to help repay the borrowings. The company emerged from Chapter 11 bankruptcy on June 20 of this calendar year.