(2 of 3) Marketing and Distribution -- L&W Supply was organized
in 1971 by U.S. Gypsum and currently has 192 distribution
locations in 37 states. It is a service-oriented organization
that stocks a wide range of construction materials and delivers
less-than-truckload quantities of construction materials to a job
site and places them in areas where work is being done, thereby
reducing or eliminating the need for handling by contractors.
Although L&W Supply specializes in distribution of gypsum
wallboard (which accounts for approximately 53% of its total net
sales), joint compound and other products manufactured primarily
by U.S. Gypsum, it also distributes products manufactured by USG
Interiors such as acoustical ceiling tile and grid, as well as
products of other manufacturers including drywall metal,
insulation, roofing products and accessories. L&W Supply leases
approximately 90% of its facilities from third parties. Usually,
initial leases run from three to five years with a five-year
renewal option.
Competition -- L&W Supply's largest competitor, Gypsum
Management Supply, is an independent distributor with locations
in the southern, central and western United States. There are
several regional competitors, such as CSR Rinker in the
southeast (primarily in Florida) and Strober Building Supply in
the northeastern United States. L&W Supply's many local
competitors include lumber dealers, hardware stores, home
improvement centers and acoustical tile distributors.
[00002] CONSOLIDATED BALANCE SHEET AT MARCH 31, 2001
USG CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
Current Assets:
Cash and cash equivalents $35,000,000
Receivables (net of reserves - $18,000,000) 350,000,000
Inventories 267,000,000
Income taxes receivable 33,000,000
Deferred income taxes 168,000,000
Other current assets 75,000,000
--------------
Total current assets 928,000,000
Property, plant and equipment (net of
Reserves for depreciation and
depletion - $489,000,000) 1,826,000,000
Deferred income taxes 189,000,000
Other assets 309,000,000
--------------
Total Assets $3,252,000,000
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable 193,000,000
Accrued expenses 260,000,000
Notes payable 8,000,000
Current portion of long-term debt 131,000,000
Current portion of asbestos reserve 275,000,000
--------------
Total current liabilities 867,000,000
Long-term debt 647,000,000
Long-term asbestos reserve 855,000,000
Other liabilities 370,000,000
Stockholders' Equity:
Common stock 5,000,000
Treasury stock (256,000,000)
Capital received in excess of par value 411,000,000
Accumulated other comprehensive loss (6,000,000)
Retained earnings 359,000,000
--------------
Total stockholders' equity 513,000,000
--------------
Total Liabilities and Stockholders' Equity $3,252,000,000
==============
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[00003] COMPANY'S PRESS RELEASE CONCERNING CHAPTER 11 FILING
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USG Corporation Files Voluntary Chapter 11
Case to Manage Rapidly Increasing Asbestos
Litigation Costs and to Resolve Asbestos Liability
Obtains Commitment for $350 Million in Dip Financing
CHICAGO, Illinois -- June 25, 2001 -- USG Corporation (NYSE:
USG) announced today that it filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code to
manage the growing asbestos litigation costs of its United States
Gypsum Company subsidiary and to resolve asbestos claims in a
fair and equitable manner. USG's major domestic subsidiaries also
filed Chapter 11 petitions, including United States Gypsum
Company, USG Interiors, Inc. and L&W Supply Corporation.
"We took this action not only to resolve asbestos lawsuits
equitably, but also to protect the long-term value of our
business and maintain our leadership position in the market,"
said William C. Foote, Chairman, President and CEO. "It was
important to take the litigation out of a dysfunctional tort
system and move it to a single forum where the claims can be
objectively evaluated.
"The asbestos litigation system is clearly out of control,"
said Foote. "Lawsuits continue to be filed at a high rate with no
slowdown in sight, and most of the claims are filed by people who
are not sick. In addition, the recent bankruptcies of other
asbestos defendants have dramatically increased U.S. Gypsum's
asbestos costs to the point that they are completely out of
proportion to its legitimate liability. We have said repeatedly
that U.S. Gypsum can afford to pay for its own liability, but it
cannot pay for the liability of other companies or pay everyone
who was exposed to asbestos-containing products -- yet that is
exactly what is happening because of the high volume of new cases
and the other asbestos-related bankruptcies."
Commenting on the Company's operations, Foote explained,
"Our businesses continue to grow, and we remain the leader in our
markets. Today's filing is not about restructuring our Company's
operating units or dealing with a liquidity crisis. Rather, the
Chapter 11 process was the only alternative to prevent the value
drain that has been occurring as U.S. Gypsum was forced to pay
for the asbestos costs of other companies that have already filed
for Chapter 11. The bankruptcy filing includes USG and its other
major domestic subsidiaries to address financing needs during the
Chapter 11 process and so that all USG companies would be
included in the final resolution of U.S. Gypsum's asbestos
liability.
"We carefully considered other alternatives," continued
Foote. "Chapter 11 is the only way to obtain a fair valuation of
U.S. Gypsum's asbestos liability -- and it is the best way to
preserve value for all of our stakeholders, including our
legitimate creditors, our shareholders and our employees."
He noted that USG is the eighth company in the last 18
months that has been forced to utilize Chapter 11 to resolve
asbestos claims; over the past two decades, 27 companies have
filed for protection under Chapter 11 because of asbestos
litigation. Since 1994, U.S. Gypsum has been named in more than
250,000 asbestos-related personal injury claims, and has paid
more than $450 million (before insurance recoveries) to manage
and resolve asbestos-related litigation. Further, U.S. Gypsum has
received more than 22,000 new claims since the beginning of this
year. U.S. Gypsum's asbestos personal injury costs (before
insurance) have risen from $30 million in 1997 to more than $160
million in 2000, and were expected to exceed $275 million in
2001.
Commenting on the need for federal legislation, Foote said,
"We have been advocating and working hard on a legislative
solution to the asbestos situation. Legislation is needed; it
represents good public policy and we remain committed to finding
a legislative solution. However, we simply could not continue to
endure the dramatic increase in asbestos costs and still protect
USG, its customers, suppliers, employees, shareholders and other
important stakeholders."
USG also announced it has received a commitment for up to
$350 million in debtor-in-possession (DIP) financing from JP
Morgan Chase, which will augment the Company's liquidity and fund
operations during the restructuring process, and enable the
Company to purchase and pay for goods and services going forward.
During the restructuring period and beyond, USG's operations
will continue without interruption. The Company will maintain its
commitment to providing the highest quality products and superior
service to customers. Vendors will be paid for all goods
furnished and services provided after the filing, and
transactions that occur in the ordinary course of business will
continue as before. Employees will be paid their normal wages,
and benefit programs will continue uninterrupted. Employee
interests in the USG Corporation Retirement Plan and the USG
Corporation Investment Plan (401k) are held in trust and
protected by law. The Company's international operations are not
included in the Chapter 11 filing and will continue to conduct
business as usual.
"While it is impossible to predict exactly how long our
reorganization will take, our goal is to complete the
restructuring and emerge from Chapter 11 as quickly as possible,
with a comprehensive and final resolution to U.S. Gypsum's
asbestos liability," Foote said.
USG Corporation is a Fortune 500 company with subsidiaries
that are market leaders in their key product groups: gypsum
wallboard, joint compound, cement board and related gypsum
products; ceiling tile and grid; and building products
distribution. Additional information about the restructuring is
available at www.usg.com or by calling toll-free (877) 874-8400.
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[00004] USG DEBTORS' CHAPTER 11 DATABASE
-----------------------------------------------------------------
Lead Debtor: USG Corporation
125 South Franklin Street
Chicago, IL 60606
Debtor affiliates filing separate chapter 11 petitions:
United States Gypsum Company
USG Interiors, Inc.
USG Interiors, Inc.
USG Interiors International, Inc
L & W Supply Corporation
Beadex Manufacturing, LLC
B-R Pipeline Company
La Mirada Products Co., Inc.
Stocking Specialists, Inc.
USG Industries, Inc.
USG Pipeline Company
Chapter 11 Petition Date: June 25, 2001
Court: United States Bankruptcy Court
For the District of Delaware
824 Market Street, Fifth Floor
Wilmington, DE 19801
Bankruptcy Case Nos.: 01-02094 and 01-02104
Debtors' Counsel: David G. Heiman, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
(216) 586-3939
Fax (216) 579-0212
and
Paul E. Harner, Esq.
Brad B. Erens, Esq.
Jones, Day, Reavis & Pogue
77 West Wacker
Chicago, IL 60601
(312) 782-3939
and
Daniel J. Defranceschi, Esq.
Richards, Layton & Finger
One Rodney Square, P.O. Box 551
Wilmington, DE 19899
(302) 658-6541 |
