USG CORPORATION INVESTMENT PLAN
 
 REPORT ON AUDITED
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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##### 



USG CORPORATION INVESTMENT PLAN
December 31, 2010 and 2009
 TABLE OF CONTENTS
 Page(s)REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
    
    
    1FINANCIAL STATEMENTSStatements of Net Assets Available for Benefits
    
    
    2Statements of Changes in Net Assets Available for Benefits
    
    
    3Notes to Financial Statements
    
    
    4-18SUPPLEMENTAL SCHEDULE:Schedule I: Schedule of Assets (Held at End of Year)
    
    
    19




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REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM




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##### 



USG CORPORATION INVESTMENT PLAN
 2010
    
    
    2009ASSETSInvestments, at fair value
    
    $
    591,635,688
    
    
    $
    549,000,797Receivables:Employee contributions receivable
    
    
    381,934
    
    
    
    382,999Employer contributions receivable
    
    
    40,636
    
    
    
    38,753Interest and dividends receivable
    
    
    158,257
    
    
    
    131,634Notes receivable from participants
    
    
    32,042,907
    
    
    
    34,321,877Total Receivables
    
    
    32,623,734
    
    
    
    34,875,263Total Assets
    
    
    624,259,422
    
    
    
    583,876,060LIABILITIESAccrued administrative fees
    
    
    274,976
    
    
    
    307,092Securities purchased but not yet paid
    
    
    428,167
    
    
    
    741,351Total Liabilities
    
    
    703,143
    
    
    
    1,048,443Net assets available for benefits at fair value
    
    
    623,556,279
    
    
    
    582,827,617Adjustment from fair value to contract value
for fully benefit-responsive investment
contracts
    
    
    4,396,017
    
    
    
    14,359,411Net assets available for benefits
    
    $
    627,952,296
    
    
    $
    597,187,028
  -2-




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##### 



USG CORPORATION INVESTMENT PLAN
 2010
    
    
    2009Net assets available for benefits, beginning of year
    
    $
    597,187,028
    
    
    $
    557,685,550Add (deduct)ContributionsCorporation contributions
    
    
    4,309,407
    
    
    
    4,281,029Employee contributions
    
    
    26,489,294
    
    
    
    28,299,96330,798,701
    
    
    
    32,580,992Transfers from other plansCalifornia Wholesale Material Supply 401(k)
Profit Sharing Plan
    
    
    5,983,028
    
    
    
    Other income
    
    
    22,864
    
    
    
    Income (loss) from investments:Dividend income
    
    
    4,674,953
    
    
    
    4,505,493Interest income from investments
    
    
    6,530,057
    
    
    
    8,916,652Realized loss on sale of investments
    
    
    (1,491,911
    )
    
    
    (34,925,537
    )Unrealized appreciation for the year
    
    
    39,558,983
    
    
    
    100,270,94449,272,082
    
    
    
    78,767,552Income (loss) from participants:Interest income from Notes Receivable from
participants
    
    
    1,418,658
    
    
    
    1,819,499Total additions
    
    
    87,495,333
    
    
    
    113,168,043Benefit payments and participant withdrawals
    
    
    (55,429,835
    )
    
    
    (72,199,552
    )Administrative expenses
    
    
    (1,300,230
    )
    
    
    (1,467,013
    )Total deductions
    
    
    (56,730,065
    )
    
    
    (73,666,565
    )Net increase in assets
during the year
    
    
    30,765,268
    
    
    
    39,501,478Net assets available for benefits, end of year
    
    $
    627,952,296
    
    
    $
    597,187,028
  -3-




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USG CORPORATION INVESTMENT PLAN
 NOTE 1 DESCRIPTION OF THE PLAN
 The following description of the USG Corporation Investment Plan (the Plan) provides
general information about the Plans provisions. USG Corporation (the Corporation)
is the plan sponsor. Participants should refer to the plan document and summary
plan description for a more complete description of the Plans provisions.GeneralThe USG Corporation Investment Plan, also known as the USG Corporation Investment
Plan for Salaried Employees prior to January 1, 1989, 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 enable eligible employees to accumulate their own funds,
share in the contributions of their employers, and thereby provide for their future
security.ContributionsThe Plan provides, among other things, that participants may contribute up to 20%
(11% for highly compensated employees) of their eligible pay to the Plan through
payroll deductions on a before-tax basis during the year. 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 in order to be 100% vested in the Corporations
contribution. Employees 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 or death.
 -4-




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USG CORPORATION INVESTMENT PLAN
 NOTE 1 DESCRIPTION OF THE PLAN (continued)
 Investment OptionsEmployee contributions are invested by the Northern Trust Company, (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 stocks 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. small and mid cap
companies with market capitalizations of less than $1.5 billion and $8.5 billion,
respectively, 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 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 stocks 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 American Funds Growth Fund of America.The Small Cap Equity Fund is invested in the Vanguard Small Cap Growth Index Fund.
 -5-




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USG CORPORATION INVESTMENT PLAN
 NOTE 1 DESCRIPTION OF THE PLAN (continued)
 The Large Cap Value Fund is invested in the Dodge & Cox Stock Fund.The International Equity Fund is invested in the Templeton Institutional Funds -
Foreign Equity Fund  Primary SharesThe Bond Fund is invested in the PIMCO Total Return Fund  Institutional Class.The Stable Value Fund is managed by JPMorgan Chase. At December 31, 2010 and 2009,
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 contacting Your
Benefits Resourcesthrough either an automated telephone service or a secured
interactive website, via the Internet, 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 makes a regular 25% matching contribution (effective January 1,
2009) and 50% matching contribution prior to 2009, up to the first 6% of the
participants eligible pay contributed to the Plan, credited to the participants
accounts each pay period. Participants are vested in the Corporate contributions
after three years.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.ForfeituresEmployer 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. Unallocated
forfeiture balances as of December 31, 2010 and 2009 were approximately $230,108 and
$308,951 respectively, and forfeitures used to reduce Corporations contributions
for 2010 and 2009 were $400,000 and $805,380, respectively.
 -6-




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USG CORPORATION INVESTMENT PLAN
 NOTE 1 DESCRIPTION OF THE PLAN (continued)
 New employees are immediately eligible to join the Plan and are automatically
enrolled in the Plan on their hire date unless the employee elects not to join the
Plan.The nineteenth amendment to the Plan provided for some minor technical changes to
the Plan primarily to comply with certain provisions of the Pension Protection Act
of 2006 and the HEART Act. Effective dates ranged from January 1, 2007 to 2010.The twentieth amendment to the Plan added Supplement E to the Plan to allow for the
merger of the former California Wholesale Material Supply 401(k) Profit Sharing Plan
(Calply) into the USG Corporation Investment Plan effective April 14, 2010. The
merger of the Calply Plan and the resulting transfer of assets from that plan were
made in accordance with Sections 401(a)(12) and 414(l) of the Internal Revenue Code.The twenty-first amendment to the Plan, effective January 1, 2011, further clarifies
the meaning of a participants earnings stating that earnings mean the total
compensation payable to him for services rendered to the employers as subject to
withholding for U.S. federal income tax purposes. A participants earnings for any
plan year shall be limited to $245,000 (or such other amount as the Secretary of the
Treasury may from time to time specify pursuant to Section 401(a)(17) of the
Internal Revenue Code).The twenty-first amendment also states a participant who is on leave while
performing military service as described in 414(u)(5) of the Internal Revenue Code
for a period of at least 30 days may elect to withdraw all or any portion of the
vested amounts credited to his elective deferral accounts in accordance with Section
414(u)(12) of the Internal Revenue Code, provided that such participant may not make
any elective contributions to the plan for a period of 6 months following the date
of such withdrawal.Effective January 1, 2011, the twenty-first amendment also reduced the employers
regular matching contribution that is made on up to the first six percent of an
eligible participants basic contribution each pay period, to 10% from 25% for all
pay periods ending on or after January 1, 2011.
 -7-




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USG CORPORATION INVESTMENT PLAN
 NOTE 1 DESCRIPTION OF THE PLAN (continued)
 Plan AdministrationThe 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. Hewitt Associates is the
recordkeeper of the Plan. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA).The Pension and Investment Committee (the Committee) is responsible for the
administration of the Plan. The Committee consists of nine members appointed by the
Corporation.Administrative expenses and other fees of the Plan are shared by the Corporation and
the participants.At December 31, 2010 and 2009, there were approximately 9,283 and 10,154
participants in the Plan, respectively.
 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of AccountingThe 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.The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
 -8-




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USG CORPORATION INVESTMENT PLAN
 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Investment contracts held by a defined-contribution plan are required to be reported
at fair value. However, contract value is the relevant measurement attribute for
that portion of the net assets available for benefits of a defined-contribution plan
attributable to fully benefit-responsive investment contracts because contract value
is the amount participants would receive if they were to initiate permitted
transactions under the terms of the Plan. The Statement of Net Assets Available for
Benefits presents the fair value of the investment contracts as well as the
adjustment of the fully benefit-responsive investment contracts from fair value to
contract value. The Statement of Changes in Net Assets Available for Benefits was
prepared on a contract value basis.Investment Valuation and Income RecognitionThe Plans investments are stated at fair value. Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.Shares of mutual funds are valued at the net asset value of shares held by the Plan
at year end. The company stock is valued at its quoted market price. The guaranteed
investment contracts (wrapper contracts) are valued using the income approach and
are calculated by discounting the related cash flows based on current yields of
similar instruments with comparable durations. The underlying investments of the
GICs include U.S. government securities and units of common collective trusts. The
U.S. government securities are valued at the closing price reported in the active
market in which the individual securities are traded. The common collective trusts
were valued using the net asset value per share. The underlying investments in
common collective trusts including fixed income securities are valued each day based
on readily available market quotations received from commercial pricing services.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.Payment of BenefitsBenefits are recorded when paid.
 -9-




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USG CORPORATION INVESTMENT PLAN
 NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Notes Receivable from ParticipantsNotes receivable from participants represent participant loans that are recorded at
their unpaid principal balance plus any accrued but unpaid interest. Interest income
on notes receivable from participants is recorded when it is earned. Related fees
are recorded as administrative expenses and are expensed when they are incurred. No
allowance for credit losses has been recorded as of December 31, 2010 or 2009. If a
participant ceases to make loan repayments and the plan administrator deems the
participant loan to be a distribution, the participant loan balance is reduced and a
benefit payment is recorded.
 NOTE 3 SYNTHETIC GUARANTEED INVESTMENT CONTRACTS
 The Stable Value Fund holds investments in synthetic guaranteed investment contracts
(synthetic GICs) and cash and cash equivalents. The investments in synthetic GICs
are presented at fair value, which equals the total of the fair value of the
underlying assets plus the total wrapper value. The wrapper value is calculated by
discounting the annual wrap fee over the duration of the contract assets. The
wrapper value is $409,985 at December 31, 2010 and $563,381 at December 31, 2009.In determining the net assets available for benefits, the synthetic GICs are
recorded at their contract values, which are equal to principal balance plus accrued
interest. An investment contract is generally valued at contract value, rather than
fair value, to the extent it is fully benefit-responsive.The Stable Value Fund is credited with earnings on the underlying investments and
charged for participant withdrawals and administrative expenses. The synthetic GICs
issuers are contractually obligated to repay the principal and a specified interest
rate that is guaranteed to the Plan.The GICs included in the financial statements at contract value are as reported to
the Plan by the issuers. Contract value represents contributions made under the
contract, plus earnings, less participant withdrawals and administrative expenses.
Participants may ordinarily direct the withdrawal or transfer of all or a portion of
their investment at contract value. There are currently no reserves against contract
values for credit risk of the contract issuers or otherwise.
 -10-




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USG CORPORATION INVESTMENT PLAN
 NOTE 3 SYNTHETIC GUARANTEED INVESTMENT CONTRACTS (continued)
 Certain events limit the ability of the Plan to transact at contract value with the
issuer. Such events include the following: (i) amendments to the plan documents
(including complete or partial plan termination or merger with another plan), (ii)
changes to the Plans prohibition on competing investment options or deletion of
equity wash provisions, (iii) bankruptcy of the plan sponsor or other plan sponsor
events (for example, divestitures or spin-offs of a subsidiary) that cause a
significant withdrawal from the Plan, or (iv) the failure of the trust to qualify
for exemption from federal income taxes or any required prohibited transaction
exemption under ERISA. The Plan administrator does not believe that the occurrence
of any such event, which would limit the Plans ability to transact at contract
value with participants, is probable.The synthetic GIC contracts cannot be terminated by the Issuer at a value other than
contract value except under a limited number of very specific circumstances
including termination of the Plan or failure to qualify the Plan, material
misrepresentations or failure to meet material obligations by the Plan sponsor or
investment manager, or other similar types of events.The average yield of the synthetic GICs based on actual earnings was approximately
3.28% and 4.25% at December 31, 2010 and 2009, respectively. The average yield of
the GICs based on interest rate credited to participants was approximately 2.20% and
2.32% at December 31, 2010 and 2009, respectively.
 NOTE 4 FAIR VALUE MEASUREMENTS
 The Plan follows the guidance of Financial Statement Accounting Standards Board
(FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements.ASC 820 establishes a fair value hierarchy prioritizing the valuation of Plan assets
into three broad categories: Level 1, with greatest emphasis on observable market
prices in active markets, Level 2; assets not traded on an active market but for
which there are readily observable, either directly or indirectly, pricing inputs;
and Level 3, assets with unobservable inputs due to little or no market activity
where the reporting entity may make estimates and assumptions related to the pricing
and risk.
 -11-




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USG CORPORATION INVESTMENT PLAN
 NOTE 4 FAIR VALUE MEASUREMENTS (continued)
 The following table provides information by their ASC 820 level (as defined above)
of the fair value of the Plans investments as of December 31, 2010:
 Fair Value Measurement UsingTotal
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3InvestmentsCommon Stock
    
    $
    5,861,771
    
    
    $
    5,861,771
    
    
    $
    
    
    
    $
    Mutual Funds(a)Large Cap Equity
    
    
    56,186,479
    
    
    
    56,186,479
    
    
    
    
    
    
    
    Large Growth
    
    
    57,383,855
    
    
    
    57,383,855
    
    
    
    
    
    
    
    Small Cap Equity
    
    
    53,148,321
    
    
    
    53,148,321
    
    
    
    
    
    
    
    Large Cap Value
    
    
    42,262,508
    
    
    
    42,262,508
    
    
    
    
    
    
    
    Balanced
    
    
    73,256,836
    
    
    
    73,256,836
    
    
    
    
    
    
    
    International Equity
    
    
    29,925,162
    
    
    
    29,925,162
    
    
    
    
    
    
    
    Bond
    
    
    46,869,426
    
    
    
    46,869,426
    
    
    
    
    
    
    
    Total Mutual Funds
    
    
    359,032,587
    
    
    
    359,032,587
    
    
    
    
    
    
    
    Synthetic Guaranteed
Investment Contracts (GIC)Common collective trusts(b)
    
    
    218,848,289
    
    
    
    
    
    
    
    218,848,289
    
    
    
    Wrap contracts
    
    
    409,985
    
    
    
    
    
    
    
    
    
    
    
    409,985Total GIC
    
    
    219,258,274
    
    
    
    
    
    
    
    218,848,289
    
    
    
    409,985Other collective trusts(b)
    
    
    7,483,056
    
    
    
    
    
    
    
    7,483,056
    
    
    
    Total Investments
    
    $
    591,635,688
    
    
    $
    364,894,358
    
    
    $
    226,331,345
    
    
    $
    409,985
 
 (a)
    
    See Note 1 for description of investment options and related
strategies.(b)
    
    This category includes a common collective trust fund with
the objective to protect the principal balance of participant accounts and to
generate stable, positive book value returns that exceed those of alternative
principal protection vehicles, such as money market funds, during normal market
conditions. The common collective trust invests in underlying assets and includes
cash, bank notes, US government agency securities, corporate bonds, and various
short term debt instruments. There were no significant redemption restrictions. -12-




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USG CORPORATION INVESTMENT PLAN
 NOTE 4 FAIR VALUE MEASUREMENTS (continued)
 The following table provides information by their ASC 820 level (as defined above)
of the fair value of the Plans investments as of December 31, 2009:
 Fair Value Measurement UsingTotal
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3InvestmentsCommon Stock
    
    $
    4,389,122
    
    
    $
    4,389,122
    
    
    $
    
    
    
    $
    Mutual Funds(a)Large Cap Equity
    
    
    50,717,855
    
    
    
    50,717,855
    
    
    
    
    
    
    
    Large Growth
    
    
    54,439,689
    
    
    
    54,439,689
    
    
    
    
    
    
    
    Small Cap Equity
    
    
    40,911,493
    
    
    
    40,911,493
    
    
    
    
    
    
    
    Large Cap Value
    
    
    40,338,378
    
    
    
    40,338,378
    
    
    
    
    
    
    
    Balanced
    
    
    55,465,674
    
    
    
    55,465,674
    
    
    
    
    
    
    
    International Equity
    
    
    29,175,634
    
    
    
    29,175,634
    
    
    
    
    
    
    
    Bond
    
    
    40,107,433
    
    
    
    40,107,433
    
    
    
    
    
    
    
    Total Mutual Funds
    
    
    311,156,156
    
    
    
    311,156,156
    
    
    
    
    
    
    
    Synthetic Guaranteed
Investment Contracts (GIC)U.S. Treasury notes
    
    
    855,766
    
    
    
    855,766
    
    
    
    
    
    
    
    Common collective trusts(b)
    
    
    226,838,476
    
    
    
    
    
    
    
    226,838,476
    
    
    
    Wrap contracts
    
    
    563,381
    
    
    
    
    
    
    
    
    
    
    
    563,381Total GIC
    
    
    228,257,623
    
    
    
    855,766
    
    
    
    226,838,476
    
    
    
    563,381Other collective trusts(b)
    
    
    5,197,896
    
    
    
    
    
    
    
    5,197,896
    
    
    
    Total Investments
    
    $
    549,000,797
    
    
    $
    316,401,044
    
    
    $
    232,036,372
    
    
    $
    563,381
 The following table sets forth a summary of changes in the fair value of the
Plans Level 3 assets (Wrap Contracts) for the years December 31, 2010 and 2009.
 2010
    
    
    2009Balance, beginning of year
    
    $
    563,381
    
    
    $
    659,686Unrealized losses relating to
instruments held at reporting date
    
    
    (153,396
    )
    
    
    (96,305
    )Balance, end of year
    
    $
    409,985
    
    
    $
    563,381
 The valuation methods described in Note 2 may produce a fair value calculation that
may not be indicative of net realizable value or reflective of future fair value.
Furthermore although the Plan believes its valuation methods are appropriate and
consistent with other market participants, the use of different methodologies or
assumptions to determine the fair value of certain financial instruments could
result in a different fair value measurement at the reporting date.
 -13-




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USG CORPORATION INVESTMENT PLAN
 NOTE 5 TAX STATUS
 The Plan has received a determination letter from the Internal Revenue Service dated
July 2, 2002, stating that the Plan is qualifiedunder Section 401(a) of
the Internal Revenue Code (the Code) and therefore the related trust is exempt from
taxation. Once qualified, the Plan is required to operate in conformity with the
Code to maintain its qualified status. The Plan has submitted an application for a
new determination letter on January 28, 2011. The Pension and Investment Committee
believes the Plan is being operated in compliance with the applicable requirements
of the Code and therefore believes the Plan is qualified and the related trust is
tax-exempt.Accounting principles generally accepted in the United States require plan
management to evaluate uncertain tax positions taken by the Plan. The financial
statement effects of a tax position are recognized when the position is more likely
than not, based on the technical merits, to be sustained upon examination by the
IRS. The plan administrator has analyzed the tax positions taken by the Plan, and
has concluded that as of December 31, 2010, there are no uncertain positions taken
or expected to be taken. The Plan has recognized no interest or penalties related to
uncertain tax positions. The Plan is subject to routine audits by taxing
jurisdictions; however, there are currently no audits for any tax periods in
progress. The plan administrator believes it is no longer subject to income tax
examinations for years prior to 2007.
 NOTE 6 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.
 -14-




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USG CORPORATION INVESTMENT PLAN
 NOTE 7 INVESTMENTS
 During 2010 and 2009, the Plans investments (including gains and losses on
investments bought and sold, as well as assets held during the year) appreciated as
follows:
 2010
    
    
    2009Company common stock
    
    $
    1,036,378
    
    
    $
    1,829,611Mutual funds
    
    
    37,030,694
    
    
    
    63,515,796Total appreciation
    
    $
    38,067,072
    
    
    $
    65,345,407
 All investments in the Plan are participant-directed investments.
 At December 31, 2010 and 2009, the following investments (participant-directed)
exceeded 5% of the net assets available for Plan benefits:
 2010
    
    
    2009Vanguard Index Trust
    
    $
    56,186,479
    
    
    $
    50,717,855Fidelity Puritan Fund
    
    
    73,256,836
    
    
    
    55,465,674American Funds Growth Fund of America
    
    
    57,383,855
    
    
    
    54,439,689Vanguard Small Cap Growth Index Fund
    
    
    53,148,321
    
    
    
    40,911,493Dodge & Cox Stock Fund
    
    
    42,262,508
    
    
    
    40,338,378PIMCO Total Return Fund
    
    
    46,869,426
    
    
    
    40,107,433JP Morgan Chase Bank-Intermediate Bond
Fund
    
    
    218,848,196
    
    
    
    226,183,226
 -15-




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##### 



USG CORPORATION INVESTMENT PLAN
 NOTE 8 PARTICIPANT LOANS
 Participants are able to 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.
 NOTE 9 NEW ACCOUNTING PRONOUNCEMENTS
 In January 2010, the FASB issued Accounting Standards Update 2010-06, Improving
Disclosures about Fair Value Measurements,(ASU 2010-06). ASU 2010-06 amended ASC
820 to clarify certain existing fair value disclosures and require a number of
additional disclosures. The guidance in ASU 2010-06 clarified that disclosures
should be presented separately for each class of assets and liabilities measured
at fair value and provided guidance on how to determine the appropriate classes of
assets and liabilities to be presented. ASU 2010-06 also clarified the requirement
for entities to disclose information about both the valuation techniques and inputs
used in estimating Level 2 and Level 3 fair value measurements. In addition, ASU
2010-06 introduced new requirements to disclose the amounts (on a gross basis) and
reasons for any significant transfers between Levels 1, 2 and 3 of the fair value
hierarchy and present information regarding the purchases, sales, issuances and
settlements of Level 3 assets and liabilities on a gross basis. With the exception
of the requirement to present changes in Level 3 measurements on a gross basis,
which is delayed until 2011, the guidance in ASU 2010-06 is effective for reporting
periods beginning after December 15, 2009. Since ASU 2010-06 only affects fair value
measurement disclosures, adoption of ASU 2010-06 did not affect on the Plans net
assets available for benefits or its changes in net assets available for benefits.
 In September 2010, the FASB issued Accounting Standards Update 2010-25, Reporting
Loans to Participants by Defined Contribution Pension Plans,(ASU 2010-25). ASU
2010-25 requires participant loans to be measured at their unpaid principal balance
plus any accrued by unpaid interest and classified as notes receivable from
participants. Previously loans were measured at fair value and classified as
investments. ASU 2010-25 is effective for fiscal years ending after
 -16-




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##### 



USG CORPORATION INVESTMENT PLAN
 NOTE 9 NEW ACCOUNTING PRONOUNCEMENTS (continued)
 December 15, 2010 and is required to be applied retrospectively. Adoption of ASU
2010-25 did not change the value of participant loans from the amount previously
reported as of December 31, 2009. Participant loans have been reclassified to notes
receivable from participants as of December 31, 2009.
 In May 2011, the FASB issued Accounting Standards Update 2011-04, Amendments to
Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and
IFRSs,(ASU 2011-04). ASU 2011-04 amended ASC 820, Fair Value Measurements and
Disclosures,to converge the fair value measurement guidance in US generally
accepted accounting principles (GAAP) and International Financial Reporting
Standards (IFRSs). Some of the amendments clarify the application of existing fair
value measurement requirements, while other amendments change a particular principle
in ASC 820. In addition, ASU 2011-04 requires additional fair value disclosures. The
amendments are to be applied prospectively and are effective for annual periods
beginning after December 15, 2011. Plan management is currently evaluating the
effect that the provisions of ASU 2011-04 will have on the Plans financial
statements.
 NOTE 10 RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
 Net assets of the Plan will be recorded at fair value on the 2010 Form 5500. The
following is a reconciliation of net assets available for benefits and changes in
net assets available for benefits between the financial statements and the amounts
that will be included in the Form 5500:
 2010
    
    
    2009Net assets available for benefits per the financial
statements
    
    $
    627,952,296
    
    
    $
    597,187,028Less: Benefits processed but not yet paid
    
    
    (722,543
    )
    
    
    Adjustment from fair value to contract value
for fully benefit responsive investment
contracts
    
    
    (4,396,017
    )
    
    
    (14,359,411
    )Net assets available for benefits per the Form 5500
    
    $
    622,833,736
    
    
    $
    582,827,617
 -17-




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##### 



USG CORPORATION INVESTMENT PLAN
 NOTE 10 RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (continued)
 2010Total increase in net assets per the financial statements
    
    $
    30,765,268Less: Benefits processed but not yet paid
    
    
    (722,543
    )Adjustment from fair value to contract value for fully
benefit responsive investment contracts at December 31, 2010
    
    
    (4,396,017
    )Add: Adjustment from fair value to contract value for fully
benefit responsive investment contracts at December 31, 2009
    
    
    14,359,411Total increase in net assets available for benefits per the Form 5500
    
    $
    40,006,119
 NOTE 11 RISKS AND UNCERTAINTIES
 The Plan invests in various investment securities. Investment securities are exposed
to various risks such as interest rate, market volatility and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will occur
in the near term and that such changes could materially affect participants account
balances and the amounts reported in the Statements of Net Assets Available for
Benefits.
 NOTE 12 RELATED PARTY TRANSACTIONS
 The Plan invests in The Northern Trust Collective Short Term Investment Fund,
managed by The Northern Trust Company, the trustee of the Plan. The Plan also
invests in the common stock of the Corporation. These transactions qualify as
party-in-interest transactions; however, they are exempt from the prohibited
transactions rules under ERISA.
 NOTE 13 PLAN MERGER
 On March 31, 2007, California Wholesale Material Supply, LLC was acquired by a
member of USG Corporations controlled group of corporations. The twentieth
amendment added Supplement E to the Plan to allow for the merger of the California
Wholesale Material Supply 401(k) Profit Sharing Plan (Calply) into the Plan
effective April 14, 2010. As a result of this merger, net assets in the amount of
$5,983,028 were transferred to the Plan on April 16, 2010. All provisions of the
Plan will remain the same.
 -18-




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##### 



SUPPLEMENTAL SCHEDULE




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##### 



SCHEDULE I
 USG CORPORATION INVESTMENT PLAN
  PrincipalAmount/Number
    
    
    
    
    
    
    Fairof Shares
    
    
    Cost**
    
    
    ValueCommon StockUSG Corporation
    
    
    348,293
    
    
    
    
    
    
    $
    5,861,771Mutual FundsVanguard Index Trust
    
    
    488,536
    
    
    
    
    
    
    
    56,186,479Fidelity Puritan Fund
    
    
    4,090,276
    
    
    
    
    
    
    
    73,256,836American Funds Growth Fund of America
    
    
    1,885,146
    
    
    
    
    
    
    
    57,383,855Vanguard Small Cap Growth Index Fund
    
    
    2,420,233
    
    
    
    
    
    
    
    53,148,321Dodge & Cox Stock Fund
    
    
    392,191
    
    
    
    
    
    
    
    42,262,508Templeton Foreign Fund
    
    
    1,492,527
    
    
    
    
    
    
    
    29,925,162PIMCO Total Return Fund
    
    
    4,319,763
    
    
    
    
    
    
    
    46,869,426Total Mutual Funds
    
    
    
    
    
    
    
    
    
    
    359,032,587Synthetic Guaranteed Investment ContractsCommingled Trust FundsJP Morgan Chase BankLiquidity Fund
    
    
    93
    
    
    
    
    
    
    
    93Intermediate Bond Fund
    
    
    16,198,978
    
    
    
    
    
    
    
    218,848,196Total Commingled Trust Fund
    
    
    
    
    
    
    
    
    
    
    218,848,289Wrap ContractsAIG, 1127573
    
    
    
    
    
    
    
    
    
    
    136,714Bank of America, 07-067
    
    
    
    
    
    
    
    
    
    
    136,738State Street Bank & Trust, 107099
    
    
    
    
    
    
    
    
    
    
    136,533Total Wrap Contracts
    
    
    
    
    
    
    
    
    
    
    409,985Total Synthetic Guaranteed Investment Contracts
    
    
    
    
    
    
    
    
    
    
    219,258,274Short-Term InvestmentsNorthern Trust Collective Short-Term Investment Fund*
    
    
    1,504,838
    
    
    
    
    
    
    
    1,504,838JP Morgan Chase Bank Liquidity Fund
    
    
    5,978,218
    
    
    
    
    
    
    
    5,978,218Total Short-Term Investments
    
    
    
    
    
    
    
    
    
    
    7,483,056Participant loans*(Interest rates ranging from 3.25% to 9.50%)
    
    
    
    
    
    
    
    
    
    
    32,042,907Total
    
    
    
    
    
    
    
    
    
    $
    623,678,595
 
 *
    
    Parties in interest**
    
    Participant directed. Cost information is not required. -19-