ATLANTA, Oct. 27 /PRNewswire-FirstCall/ -- Georgia-Pacific Corp.
(NYSE:GP) today reported third quarter 2005 net income of $145
million (55 cents diluted earnings per share) compared with net
income of $240 million (91 cents diluted earnings per share) in
third quarter 2004. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030425/PAPLOGO ) Following
are highlights of the third quarter results:* (in millions, except
per share amounts) 3Q-2005 3Q-2004 Net income $145 $240 Net income
per diluted share $0.55 $0.91 Net income before unusual items $200
$235 Net income before unusual items per diluted share $0.76 $0.89
Income from continuing operations $143 $239 Income from continuing
operations per diluted share $0.54 $0.91 Income from continuing
operations before unusual items $198 $236 Income from continuing
operations before unusual items per diluted share $0.75 $0.89
*Income from continuing operations in third quarter 2004 includes
$13 million of pretax income from the building products
distribution business, which was sold in May 2004. "This was a
solid quarter, with our North America consumer products and
building products businesses performing well. In fact, building
products had its best quarter this year," said A.D. "Pete" Correll,
Georgia-Pacific's chairman and chief executive officer. "We
continued to make progress toward our North America consumer
products goal. Our third quarter asset restructuring announcement
to move production to newer, more efficient machines represents the
most recent step in our continuing execution of our consumer
products strategy. "Higher costs and lower prices continue to
negatively impact both our packaging and bleached pulp and paper
businesses. Raw materials and energy inflation company-wide
increased our costs for the quarter by approximately $105 million
versus the same period last year. Hurricane Katrina related costs
amounted to approximately $15 million for the quarter while
transportation costs increased approximately $35 million," said
Correll. Third quarter 2005 net income before unusual items was
$200 million (76 cents diluted earnings per share). Unusual items
included: - A $43 million charge ($28 million after tax, or 10
cents diluted loss per share) primarily for the recently announced
restructuring of the North America and international consumer
products businesses, - A $36 million income tax liability (14 cents
diluted loss per share) related to the planned repatriation of $709
million of unremitted earnings of certain of the company's non-U.S.
subsidiaries under the provisions of the American Jobs Creation
Act, - A $20 million gain ($16 million after tax, or 6 cents
diluted earnings per share) related to the sales of the company's
controlling interest in GP Flakeboard, Inc., and the company's
Richwood, W.Va., hardwood sawmill, - An $8 million charge ($5
million after tax, or 2 cents diluted loss per share) for
environmental liabilities, - A $7 million charge ($4 million after
tax, or 2 cents diluted loss per share) for sales tax audits
related to Unisource Worldwide, Inc., when it was wholly owned by
Georgia-Pacific, - A $4 million credit ($2 million after tax, or 1
cent diluted earnings per share) related to the favorable
settlement of an asbestos insurance receivable. In addition, third
quarter 2005 results include a $25 million charge ($16 million
after tax, or 6 cents diluted loss per share) related to the
expensing of stock-based compensation versus a charge of $24
million ($15 million after tax, or 6 cents diluted loss per share)
in the third quarter 2004. Third quarter 2004 net income before
unusual items was $235 million (89 cents diluted earnings per
share). Unusual items totaled $5 million after taxes (2 cents
diluted earnings per share) and included gains from facility sales
and working capital settlements from earlier divestitures, offset
in part by severance and other restructuring costs across several
business units. Note: Georgia-Pacific management believes that,
because of the nature of these items, investors' understanding of
the company's performance is enhanced by disclosing net income
before the unusual items as a reasonable basis for comparison of
the company's core ongoing results of operations. The attached
Reconciliation of Earnings Before Unusual Items provides a
reconciliation of net income before the unusual items to net income
determined in accordance with generally accepted accounting
principles. Georgia-Pacific's net sales were $4.7 billion for the
third quarter 2005, equal to the third quarter 2004. Total debt was
approximately $7.9 billion at the end of the third quarter, down
$584 million versus the second quarter 2005 and down almost $1
billion compared to the same period one year ago. For the first
nine months of 2005, Georgia-Pacific reported net income of $544
million ($2.06 diluted earnings per share), compared with $607
million ($2.31 diluted earnings per share) in the same period of
2004. For the first nine months of 2005, the company reported net
income excluding unusual items of $621 million ($2.35 diluted
earnings per share), compared with $637 million ($2.42 diluted
earnings per share) in the same period of 2004. Net sales for the
first nine months of 2005 were $14 billion, compared with $15
billion in the same period a year ago. Excluding sales from the
building products distribution business, which was sold in May
2004, net sales for the first nine months of 2005 increased $304
million, or 2 percent, compared with the first nine months of 2004.
North America Consumer Products The North America consumer products
segment includes the company's retail and commercial tissue
businesses. Familiar consumer tissue brands include Angel Soft(R),
Quilted Northern(R), Brawny(R), Sparkle(R), Mardi Gras(R) and
Vanity Fair(R), as well as the Dixie(R) brand of disposable cups,
plates and cutlery. The segment recorded third quarter 2005
operating profit of $197 million versus $206 million in third
quarter 2004. Third quarter 2005 results include a $38 million
charge primarily for the previously announced restructuring of
commercial tissue operations. Included in the third quarter 2004
results were charges of $6 million primarily for severance and
equipment relocation expenses in the Dixie business. Excluding
these charges, operating profits for the segment increased $23
million or 11 percent over third quarter 2004. Profit improvement
was driven by a combination of price, higher-margin products and
cost reductions that offset higher energy and chemical costs.
Tissue prices increased 6 percent per ton. Shipments in tons were
flat with gains in retail shipments offsetting a decline in
commercial shipments driven by weaker industry conditions. Dixie
profitability increased with prices higher year over year. Realized
price increases and cost reductions in this business more than
offset reduced shipments and higher costs. The North America
consumer products segment continues to implement its strategy to
achieve the $1.2 billion annualized operating profit goal by the
end of 2006. International Consumer Products The international
consumer products segment markets both retail and commercial
products such as bathroom and facial tissue, handkerchiefs and
paper towels, as well as personal care products in Europe and other
locations. Market-leading brands include Lotus(R), Moltonel(R),
Colhogar(R), Tenderly(R), Delica(R) and Demak'Up(R). The segment
recorded a third quarter 2005 operating profit of $15 million,
compared with $39 million during the same quarter a year ago. The
third quarter 2005 results include a charge of $4 million for the
previously announced restructuring of some international assets.
Third quarter 2004 results include unusual items of $5 million for
severance, equipment relocation and a loss from a fire at the
Ivanteevka facility in Russia. Operating profit for this business
was impacted by lower prices, higher pulp and energy costs, and
effects of a pulp and paper industry strike/lockout in Finland and
product changes associated with a machine rebuild in the United
Kingdom. These factors were partially offset by continued cost
reduction and spending discipline. Changes in the currency exchange
rate between the U.S. dollar and the euro since the third quarter
2004 had no impact on this quarter. Packaging Georgia-Pacific's
packaging segment includes four containerboard manufacturing
facilities and 55 converting operations. Its Color-Box subsidiary
is a leading high-graphics, litho-laminated corrugated manufacturer
in North America. The segment recorded an operating profit of $45
million in the third quarter 2005, compared with $100 million in
the third quarter 2004. Lower prices combined with higher costs for
energy, transportation, wood and chemicals resulted in lower
operating profit for the business. During the quarter, corrugated
box shipments were up 1 percent for the company while shipments
reported by the Fibre Box Association were down 1.5 percent. Near
the end of the quarter the containerboard mill in Monticello,
Miss., was impacted by Hurricane Katrina. Bleached Pulp and Paper
The bleached pulp and paper segment is comprised of the company's
communication papers, bleached board and kraft businesses, and its
40 percent minority ownership in Unisource Worldwide, Inc. The
segment recorded a third quarter 2005 operating loss of $5 million,
compared with an operating profit of $20 million in the third
quarter 2004. Third quarter 2005 results included an $8 million
charge primarily for sales tax audits related to Unisource for
periods that it was wholly owned by Georgia-Pacific. Third quarter
2004 results include a $2 million reduction in the gain realized on
the second quarter 2004 sale of the company's interest in Aracruz
Celulose S.A. Operating profit in this business was impacted by
higher costs for energy and chemicals coupled with lower uncoated
free sheet prices, which were partially offset by improved
performance in the bleached board and kraft businesses. Building
Products The company's diversified building products segment
includes structural panels, gypsum, lumber, industrial wood
products and chemical manufacturing businesses. In the third
quarter 2005, building products' operating profit was $269 million
versus $282 million in the third quarter 2004. Third quarter 2005
results include a $20 million gain from the sales of the company's
controlling interest in GP Flakeboard, Inc., and the company's
Richwood hardwood sawmill. The third quarter 2004 results include a
gain totaling $3 million, which includes a pretax gain on the sale
of three hardwood lumber mills, offset in part by asset impairment
and severance costs. Structural panels demand remained strong,
driven by residential and non- residential construction, and repair
and remodeling. Prices moderated from prior year levels. Lumber
shipments remained strong compared with a year ago, and prices rose
12 percent. In the aftermath of Hurricane Katrina, the company
restarted its idled Gloster, Miss., plywood facility and Roxie,
Miss., sawmill. These facilities will serve the rebuilding efforts
in the Gulf region and will be furnished in part with damaged
timber salvaged in the region. Demand remained strong in the gypsum
business, which implemented price increases during the quarter for
both ToughRock(R) and Dens(R) product lines. Strong prices and
higher shipments more than offset higher energy costs. Overall, the
Dens family of products continued to perform well in both
residential and non-residential markets, including sheathing,
roofing, decking, interior panels and fireproof door product lines.
Other The company's Other segment primarily includes unallocated
corporate expenses and the elimination of intersegment sales and
profits. The segment reported third quarter 2005 expenses of $104
million, compared with expenses of $122 million for the same period
in 2004. Included in third quarter 2005 results were: - An $8
million charge for environmental liabilities, and - A $4 million
credit related to the negotiated settlement of an asbestos
receivable. Summary "Despite inflationary pressures,
Georgia-Pacific continued to make significant progress toward
achieving our operating profit goal in consumer products and in
reducing debt. We expect inflationary pressures to continue into
the fourth quarter but this will not deter us from our focus on
operational excellence and achieving our financial goals," Correll
concluded. Georgia-Pacific management will participate in a live
audio webcast and conference call beginning at 10 a.m. Eastern time
today. To access the webcast, visit http://www.gp.com/ and follow
the link. The webcast will contain a supplemental presentation that
also will be available for download. Call participants may dial
toll-free (800) 305-3098 or (706) 634-1141 for international
callers. Please reference the Georgia-Pacific earnings conference
call and allow ample time to access the call and webcast. For
additional information on Georgia-Pacific's results of operations
and financial condition, please refer to the publication,
Supplementary Financial Data, posted on our Web site. Replay of the
conference call will be available beginning at noon Oct. 27, until
6 p.m. Eastern time on Nov. 27 by calling (800) 642-1687. Please
reference conference ID number 5579723 when accessing the audio
conference replay. The replay also will be available on the
Investor Information section of Georgia-Pacific's Web site at
http://www.gp.com/investor. Headquartered at Atlanta,
Georgia-Pacific is one of the world's leading manufacturers and
marketers of tissue, packaging, paper, building products and
related chemicals. With 2004 annual sales of approximately $20
billion, the company employs 55,000 people at more than 300
locations in North America and Europe. Its familiar consumer tissue
brands include Quilted Northern(R), Angel Soft(R), Brawny(R),
Sparkle(R), Soft 'n Gentle(R), Mardi Gras(R), So- Dri(R) and Vanity
Fair(R), as well as the Dixie(R) brand of disposable cups, plates
and cutlery. Georgia-Pacific's building products business has long
been among the nation's leading supplier of building products to
lumber and building materials dealers and large do-it-yourself
warehouse retailers. For more information, visit http://www.gp.com/
. Certain statements contained in this release, including
statements regarding the company's expected realization of
announced price increases and the outlook for business and economic
conditions, are forward-looking statements (as such term is defined
under the federal securities laws), are based on current
expectations, and are subject to risks and uncertainties. Actual
results could differ materially as a result of a number of factors
including, but not limited to, the actual realization of announced
price increases for some of our products, continued strength in new
home building and home renovation, the effect of general economic
conditions on the demand for consumer products, building products,
and pulp and paper, the corresponding levels of supply and demand
for, and costs of raw materials such as wood fiber, wastepaper and
energy, the success of the branding and marketing strategies we are
pursuing for our consumer products, the effects of changes in our
production capabilities due to planned and unplanned facility
outages or maintenance requirements, workforce disruptions or
adverse weather conditions, the production capabilities of
manufacturers of competitive products, actions taken or to be taken
by the United States or other governments as a result of the
situation in Iraq and acts or threats of terrorism, and other
factors listed in Georgia-Pacific Corporation's SEC filings,
including its report on Form 10-K for the fiscal year ended Jan. 1,
2005, and its report on Form 10-Q for the fiscal quarter ended Oct.
1, 2005. A tabulation of results for Georgia-Pacific Corp. follows:
GEORGIA-PACIFIC CORPORATION Operating Highlights (In millions,
except per share amounts) (unaudited) Third Quarter First Nine
Months 2005 2004 2005 2004 NET SALES North America consumer
products $1,501 $1,438 $4,476 $4,207 International consumer
products 479 498 1,509 1,549 Packaging 739 782 2,266 2,198 Bleached
pulp and paper 536 584 1,635 1,667 Building products 1,820 1,808
5,343 5,342 Building products distribution - - - 1,886 Other(1)
(362) (369) (1,102) (1,698) Total net sales $4,713 $4,741 $14,127
$15,151 OPERATING PROFIT (LOSS) North America consumer products
$197 $206 $627 $476 International consumer products 15 39 79 135
Packaging 45 100 188 227 Bleached pulp and paper (5) 20 4 27
Building products 269 282 701 911 Building products distribution -
13 - 111 Other (104) (122) (257) (382) Total operating income 417
538 1,342 1,505 Interest expense (145) (167) (453) (542) Income
from continuing operations before income taxes 272 371 889 963
Provision for income taxes (129) (132) (347) (352) Income from
continuing operations, net of taxes 143 239 542 611 Income (loss)
from discontinued operations, net of taxes 2 1 2 (4) Net income
$145 $240 $544 $607 Basic per share: Income from continuing
operations, net of taxes $0.55 $0.93 $2.10 $2.40 Income (loss) from
discontinued operations, net of taxes 0.01 0.01 0.01 (0.02) Net
income $0.56 $0.94 $2.11 $2.38 Diluted per share: Income from
continuing operations, net of taxes $0.54 $0.91 $2.05 $2.33 Income
(loss) from discontinued operations, net of taxes 0.01 - 0.01
(0.02) Net income $0.55 $0.91 $2.06 $2.31 Average number of shares
outstanding: Basic 258.9 256.0 258.3 254.9 Diluted 264.5 263.2
264.3 262.4 (1) Primarily intersegment sales elimination.
GEORGIA-PACIFIC CORPORATION Reconciliation of Earnings Before
Unusual Items (In millions, except per share amounts) (unaudited)
Third Quarter 2005 Income Income (loss) from from continuing
discontinued Diluted operations, operations, Net earnings net of
taxes net of taxes Income per share Income as reported (GAAP
earnings) $143 $2 $145 $0.55 Settlement of asbestos insurance
receivable (2) - (2) (0.01) Asset impairments, severance costs and
other 28 - 28 0.10 Gain on asset sales, net (16) - (16) (0.06)
Unisource sales tax audit charge 4 - 4 0.02 Change in environmental
liabilities, net of insurance receivables 5 - 5 0.02 Tax on foreign
earnings repatriation 36 - 36 0.14 Total unusual items 55 - 55 0.21
Income (loss) before unusual items $198 $2 $200 $0.76 Income before
unusual items and accounting change is net income reported under
generally accepted accounting principles ("GAAP") excluding the
after tax effect of items considered by management to be unusual,
along with the after tax effect of adopting new accounting
standards. We believe that this measure emphasizes our core ongoing
operations and that it is useful to investors enabling them to
perform meaningful comparisons of past and present operating
results. We believe that using this information along with net
income provides for a more complete analysis of results of
operations. Net income is the most directly comparable GAAP
measure. GEORGIA-PACIFIC CORPORATION Reconciliation of Earnings
Before Unusual Items (In millions, except per share amounts)
(unaudited) Third Quarter 2004 Income Income (loss) from from
continuing discontinued Diluted operations, operations, Net
earnings net of taxes net of taxes Income per share Income as
reported (GAAP earnings) $239 $1 $240 $0.91 Settlement of asbestos
insurance receivable - - - - Asset impairments, severance costs and
other 9 - 9 0.03 Gain on asset sales, net (12) (2) (14) (0.05)
Unisource sales tax audit charge - - - - Change in environmental
liabilities, net of insurance receivables - - - - Tax on foreign
earnings repatriation - - - - Total unusual items (3) (2) (5)
(0.02) Income (loss) before unusual items $236 $(1) $235 $0.89
Income before unusual items and accounting change is net income
reported under generally accepted accounting principles ("GAAP")
excluding the after tax effect of items considered by management to
be unusual, along with the after tax effect of adopting new
accounting standards. We believe that this measure emphasizes our
core ongoing operations and that it is useful to investors enabling
them to perform meaningful comparisons of past and present
operating results. We believe that using this information along
with net income provides for a more complete analysis of results of
operations. Net income is the most directly comparable GAAP
measure. GEORGIA-PACIFIC CORPORATION Reconciliation of Earnings
Before Unusual Items and Accounting Change (In millions, except per
share amounts) (unaudited) First Nine Months 2005 Income Income
(loss) from from Diluted continuing discontinued earnings
operations, operations, Net (loss) net of taxes net of taxes Income
per share Income (loss) as reported (GAAP earnings) $542 $2 $544
$2.06 Loss on early extinguishment of debt 10 - 10 0.04 Settlement
of asbestos insurance receivable - - - - Asset impairments,
severance costs and other 35 - 35 0.12 Tax-exempt bond liability
reserve 11 - 11 0.04 Operating lease valuation allowance 7 - 7 0.03
Prior period insurance adjustment (15) - (15) (0.06) (Gain) loss on
asset sales, net (16) - (16) (0.06) Unisource sales tax audit
charge 4 - 4 0.02 Change in environmental liabilities, net of
insurance receivables 5 - 5 0.02 Tax on foreign earnings
repatriation 36 - 36 0.14 Total unusual items 77 - 77 0.29 Income
before unusual items $619 $2 $621 $2.35 GEORGIA-PACIFIC CORPORATION
Reconciliation of Earnings Before Unusual Items and Accounting
Change (In millions, except per share amounts) (unaudited) First
Nine Months 2004 Income Income (loss) from from Diluted continuing
discontinued earnings operations, operations, Net (loss) net of
taxes net of taxes Income per share Income (loss) as reported (GAAP
earnings) $611 $(4) $607 $2.31 Loss on early extinguishment of debt
33 - 33 0.13 Settlement of asbestos insurance receivable - - - -
Asset impairments, severance costs and other 24 - 24 0.09
Tax-exempt bond liability reserve - - - - Operating lease valuation
allowance - - - - Prior period insurance adjustment - - - - (Gain)
loss on asset sales, net (40) 13 (27) (0.11) Unisource sales tax
audit charge - - - - Change in environmental liabilities, net of
insurance receivables - - - - Tax on foreign earnings repatriation
- - - - Total unusual items 17 13 30 0.11 Income before unusual
items $628 $9 $637 $2.42 GEORGIA-PACIFIC CORPORATION Reconciliation
of Operating Profit Before Unusual Items (In millions) (unaudited)
Third Quarter 2005 Bleached N. A. Int'l Pack- Pulp & Building
Consumer Consumer aging Paper Products Other Total Operating profit
(loss) as reported $197 $15 $45 $(5) $269 $(104) $417 Unusual
items: Settlement of asbestos insurance receivable - - - - - (4)
(4) Asset impairments, severance costs and other 38 4 - - - - 42
Operating lease valuation allowance - - - 1 - - 1 Gain on asset
sales, net - - - - (20) - (20) Unisource sales tax audit charge - -
- 7 - - 7 Change in environmental liabilities, net of insurance
receivables - - - - - 8 8 Total unusual items 38 4 - 8 (20) 4 34
Operating profit (loss) excluding unusual items $235 $19 $45 $3
$249 $(100) $451 Third Quarter 2004 Bleached Building N. A. Int'l
Pack- Pulp & Building Products Consumer Consumer aging Paper
Products Dist. Other Total Operating profit (loss) as reported $206
$39 $100 $20 $282 $13 $(122) $538 Unusual items: Loss on early
extin- guishment of debt - - - - - - - - Gain on asset sales, net -
- - 2 (5) (13) - (16) Asset impair- ments, severance costs and
other 6 5 1 - 2 - - 14 Total unusual items 6 5 1 2 (3) (13) - (2)
Operating profit (loss) excluding unusual items $212 $44 $101 $22
$279 $- $(122) $536 Operating profit before unusual items is
operating profit reported under generally accepted accounting
principles ("GAAP") excluding the pre-tax effect of items
considered by management to be unusual. We believe that this
measure emphasizes our core ongoing operations and that it is
useful to investors enabling them to perform meaningful comparisons
of past and present operating results. We believe that using this
information along with operating profit provides for a more
complete analysis of results of operations. Operating profit is the
most directly comparable GAAP measure. GEORGIA-PACIFIC CORPORATION
Reconciliation of Operating Profit Before Unusual Items (In
millions) (unaudited) First Nine Months 2005 Bleached N. A. Int'l
Pack- Pulp & Building Consumer Consumer aging Paper Products
Other Total Operating profit (loss) as reported $627 $79 $188 $4
$701 $(257) $1,342 Unusual items: Loss on early extinguishment of
debt - - - - - 17 17 Settlement of asbestos insurance receivable -
- - - - (1) (1) Asset impairments, severance costs and other 45 4 2
- 3 - 54 Tax exempt bond liability reserve - - - - - 11 11
Operating lease valuation allowance - - - 12 - - 12 Prior period
insurance adjustment - (3) - - - (21) (24) Gain on asset sales, net
- - - - (20) - (20) Unisource sales tax audit charge - - - 7 - - 7
Change in environmental liabilities, net of insurance receivables -
- - - - 8 8 Total unusual items 45 1 2 19 (17) 14 64 Operating
profit (loss) excluding unusual items $672 $80 $190 $23 $684 $(243)
$1,406 First Nine Months 2004 Bleached Building N. A. Int'l Pack-
Pulp & Building Products Consumer Consumer aging Paper Products
Dist. Other Total Operating profit (loss) as reported $476 $135
$227 $27 $911 $111 $(382) $1,505 Unusual items: Loss on early
extin- guishment of debt - - - - - - 53 53 Gain on asset sales, net
- - (23) (24) (5) (20) (2) (74) Asset impair- ments, severance
costs and other 27 1 6 - 4 - - 38 Total unusual items 27 1 (17)
(24) (1) (20) 51 17 Operating profit (loss) excluding unusual items
$503 $136 $210 $3 $910 $91 $(331) $1,522 Notes to Operating
Highlights Third Quarter 2005 1. During the third quarter of 2005,
the company completed its evaluation and determined it would
repatriate approximately $709 million of unremitted earnings of
certain of its non-U.S. subsidiaries under the provisions of the
American Jobs Creation Act. As a result the Company recorded an
income tax expense, net of current year generated tax credits, and
a related income tax liability of approximately $36 million. 2. On
September 29, 2005, the company approved a restructuring program
within its North America Consumer Products segment, primarily in
its commercial tissue operations. As part of this program, along
with planned restructuring activities in its International Consumer
Products segment, the company expects to incur a total of
approximately $106 million in pre-tax restructuring charges over
the next 2 years, of which $41 million ($26 million after tax) was
expensed in the third quarter of 2005. 3. During the third quarter
of 2005, the company recorded a pre-tax charge of $7 million ($4
million after tax) for sales tax audits related to Unisource
Worldwide Inc., when it was wholly owned by Georgia-Pacific. 4.
During the third quarter of 2005, the company sold its controlling
interest in GP Flakeboard, Inc., its Canadian medium-density
fiberboard operation, and its Richwood lumber mill and recorded a
pretax gain of $20 million ($16 million after tax). 5. During the
third quarter of 2005, the company recorded a pretax credit of $4
million ($2 million after tax) related to the negotiated settlement
of an asbestos insurance receivable from a single insurer. 6.
During the third quarter of 2005, the company recorded a pretax
charge of $8 million ($5 million after tax) for environmental
liabilities. Second Quarter 2005 7. During the second quarter of
2005, the company called $250 million of its 8.625% debentures due
April 30, 2025. In conjunction with these transactions, the company
recorded a pretax charge of $13 million ($8 million after tax) for
call premiums and to write off deferred debt issuance costs. 8.
During the second quarter of 2005, the company recorded a pretax
charge of $4 million ($2 million after tax) primarily for asset
impairments and gypsum mine closure costs. 9. During the second
quarter of 2005, the company recorded a pretax charge of $3 million
($2 million after tax) for reduction of its asbestos insurance
receivables. The charge related to the negotiated settlement of a
receivable from a single insurer. 10. During the second quarter of
2005, the company recorded a pretax charge of $11 million ($11
million after tax) for potential costs related to an IRS challenge
of the tax-exempt status of several series of bonds issued to
finance construction of solid waste recycling and disposal
facilities at certain of the company's mills. First Quarter 2005
11. During the first quarter of 2005, the company recorded a pretax
charge of $8 million ($5 million after tax) primarily for asset
impairments, employee separation and machine closure costs. 12.
During the first quarter of 2005, the company recorded a pretax
charge of $11 million ($7 million after tax) related to a loss on a
warehouse lease, as required by FAS 146. This lease was vacated by
Unisource during the first quarter. 13. During the first quarter of
2005, the company repurchased and retired $25 million of its 9.375%
senior notes due February 1, 2013. In conjunction with this
transaction, the company recorded a pretax charge of $4 million for
call premiums and to write off deferred debt issuance costs. 14. In
March 2005, the company corrected its accounting for an insurance
policy with a three-year term expiring in June of 2005. From 2002
through 2004, the company had recorded all payments made under the
policy as prepaid insurance which was amortized into expense.
However, a portion of these payments was refundable based upon
actual loss experience and, therefore, should have been recorded as
a deposit rather than as an insurance expense. Losses covered by
the deposit should have been expensed as incurred. The company has
concluded that the resulting overstatement of insurance expense
during 2002 through 2004 was not material, either individually or
in the aggregate, to its results of operations, to trends for those
periods affected, or to a fair presentation of its financial
statements. Accordingly, results for the prior periods have not
been restated. Instead, the company reduced its insurance expense
and increased other current assets by $24 million to correct this
error in the first quarter of 2005. The company received a total
cash refund of $31 million related to the deposit in the third
quarter. Second Quarter 2004 15. On May 7, 2004, the company
completed the sale of its building products distribution segment to
BlueLinx Holding, Inc., for $767 million in cash and a receivable
of $51 million, primarily related to working capital. In addition,
the company received $173 million in cash in June 2004 to settle an
intercompany payable related to product sold to the building
products distribution business prior to closing. This transaction
resulted in a pretax gain of $20 million, $13 million of which was
recorded in the third quarter of 2004 as a result of the final
working capital adjustment. 16. On May 7, 2004, the company
completed the sale of its non-integrated pulp mills at Brunswick,
Ga., and New Augusta, Miss., along with a short-line railroad, to
Koch Cellulose, LLC, ("Koch") and its subsidiaries for $511 million
in cash and a receivable of approximately $9 million for working
capital. In addition, Koch assumed $73 million of indebtedness.
This transaction resulted in a pretax gain of $2 million and an
after-tax loss of $15 million that was included in discontinued
operations on the statements of operations. The working capital
receivable of $9 million was received in October 2004. 17. During
the second quarter of 2004, the company sold all of its interests
in a Brazilian pulp business for $71 million. This transaction
resulted in a pretax gain of $24 million. 18. During the second
quarter of 2004, the company entered into a new $2.5 billion,
five-year, senior unsecured credit facility that includes a $500
million unamortizing term loan. As a result of the new credit
facility, the company recorded a pretax charge of approximately $3
million to write off deferred debt issuance costs. In addition, the
company called $250 million of its 9.5% debentures due May 15, 2022
and $240 million of its 9.125% debentures due July 1, 2022. In
conjunction with these transactions, the company recorded a pretax
charge of $27 million for call premiums and to write off deferred
debt issuance costs during the first six months of 2004. 19. During
the second quarter of 2004, the company sold certain packaging
assets and an aircraft and recognized a pretax gain of $25 million
($16 million after tax). 20. During the second quarter of 2004, the
company recorded pretax charges of $24 million for asset impairment
and restructuring charges related primarily to its Bellingham and
Green Bay properties. First Quarter 2004 21. During the first
quarter of 2004, the company called $243 million of its 9.875%
debentures due Nov. 1, 2021, and $250 million of its 9.625%
debentures due March 15, 2022. In conjunction with these
transactions, the company recorded a pretax charge of $26 million
for call premiums and to write off deferred debt issuance costs.
http://www.newscom.com/cgi-bin/prnh/20030425/PAPLOGO
http://photoarchive.ap.org/ DATASOURCE: Georgia-Pacific Corp.
CONTACT: Media, Robin Keegan, +1-404-652-4713, or Investor
Relations, +1-404-652-5555, both of Georgia-Pacific Corp. Web site:
http://www.gp.com/ http://www.gp.com/investor
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