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Author: Squidprorow Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 660  
Subject: Re: Chinese Drywall Date: 5/6/2009 5:36 PM
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"We simply attempt to be fearful when others are greedy and greedy only when others are fearful."

Thanks Warren!


Unidentified Analyst

Good morning. Yesterday Lennar filed an 8-K stating that it had been named as a defendant in a case against builders, distributors and manufacturers of Chinese Drywall. It's called Go See et all versus Lennar Corporation et all (ph). News stories pointed to this suit as the main reason Lennar stock dropped about 900 basis points, more yesterday than other builders dropped. This seems to be a major class action. I searched your SEC filings and while USG is the other major U.S. Corporation named in this case, I did not see that you filed an 8-K yet as a result of this suit. When do you expect to file one like the other major U.S. defendant Lennar did?

William Foote

This is Bill Foote. Let me add some bright color on this. I think in our last filing, we mentioned that we had several suits and we will keep it up to date. But let me first give you a broad view of this matter. USG, we have indeed been named of this defendant in several suits. The defective wallboard has a bad odor and is reported to across corporate services growth (ph).

The board was manufactured in China and imported into Florida and the Southeast when domestic wallboard was in very short supply, back in the 2005 timeframe. Let me stress there are absolutely no problem with SHEETROCK brand wallboard, the board that we make in this country. And we, USG did not make any wallboard in China.

L&W, our distribution company did import a small amount of Chinese board from Knauf Tianjin, which is part of the Knauf family of companies based in Germany. L&W's total shipments of Knauf Tianjin board was less than half of 1% of all L&W shipments in Florida in 2006. This is a product problem. It's not a delivery problem. And we expect Knauf and the other Chinese manufacturers to solve it.

Unidentified Analyst

Okay. This is follow-up, if I may. On page 81 of your K you point out that your wholly owned distribution, you just mentioned you sold Chinese manufactured wallboard, is it -- is that contained only to Florida or is that national issue or in several states? And in which years and in what quantities if you know, did you sell the Chinese manufacturer wallboard through your distributor? Thank you.

William Foote

Let me repeat it. It was about half of 1% of our shipments in Florida. And the board was essentially on our Florida, there may have been a bit in other, few other Southeastern states, but the bulk was in Florida.

Unidentified Analyst

Thank you.

http://seekingalpha.com/article/132104-usg-corp-q1-2009-earn...
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