GEORGIA-PACIFIC REPORTS SECOND QUARTER RESULTS
GEORGIA-PACIFIC REPORTS SECOND QUARTER RESULTS ATLANTA, July 15 /PRNewswire/ -- Georgia-Pacific Corp. (NYSE: GP)
today reported break-even results for the three months ended June 30, 1992, compared with net income of $29 million (34 cents per share) in the 1991 second quarter. The 1991 results reflect a $29 million (34 cents per share) after-tax gain on the sale of timberlands.
The company generated free cash flow of approximately $56 million for the three months ended June 30, 1992. Free cash flow consisted of cash from operations of approximately $146 million and proceeds from miscellaneous asset sales of approximately $14 million, less capital expenditures of approximately $104 million. Sales for the second quarter were $3 billion in both 1992 and 1991. Georgia-Pacific's building products business reported operating profits of $163 million, a record for the second quarter, compared with $132 million last year. Pulp and paper profits for the same period were $42 million versus $105 million a year ago. For the six-month period, net income was $5 million (6 cents per share) versus a net loss of $44 million (51 cents per share) last year. The 1991 results include after-tax gains on asset sales of $72 million (84 cents per share) and noncash charges of $63 million (73 cents per share) for accounting changes. "Our building products operating profits for the first six months of this year are equal to that business' profits for all of 1991," said T. Marshall Hahn Jr., chairman and chief executive officer. "The strong prices and demand that supported all-time record results for building products in the first quarter have weakened. The second period results, however, still exceeded the profits reported in any quarter prior to 1992. "Our pulp and paper business continues to be pressured by weak market conditions. Although pulp prices and demand have continued to improve, our communication papers, tissue and bleached board businesses continue to face excess capacity in the industry and depressed prices. In our containerboard business, which has improved significantly compared with a year ago, demand remains strong, with the industry anticipating a further seasonal increase in demand this fall," Hahn concluded. A tabulation of results follows: GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES Operating Highlights (Dollar amounts, except per share, in millions) (unaudited) Three Three Months Ended Months June 30, 1991 Ended Including Excluding June 30, Asset Asset Asset 1992 Sales Sales Sales NET SALES Building products $ 1,592 $ 1,465 $ - $ 1,465 Pulp and paper 1,446 1,507 - 1,507 Other operations 8 9 - 9 Total net sales $ 3,046 $ 2,981 $ - $ 2,981 OPERATING PROFITS Building products $ 163 $ 132 $ - $ 132 Pulp and paper 42 105 - 105 Other operations 3 7 - 7 Other income - 46 46 - Total operating profits 208 290 46 244 General corp. expense (29) (53) - (53) Interest expense (144) (143) - (143) Cost of accounts receivable sale program (10) (15) - (15) Income before inc. taxes 25 79 46 33 Provision for inc. taxes(25) (50) (17) (33) Net income $ - $ 29 $ 29 $ - Per share: Net income $ - $ .34 $ .34 $ - Average number of shares outstanding 86.4 85.8 85.8 85.8 GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES Operating Highlights (Dollar amounts, except per share, in millions) (unaudited) Six Six Months Ended Months June 30, 1991 Ended Including Excluding June 30, Asset Asset Asset 1992 Sales Sales Sales NET SALES Building products $ 2,993 $ 2,627 $ - $ 2,627 Pulp and paper 2,864 3,115 - 3,115 Other operations 19 17 - 17 Total net sales $ 5,876 $ 5,759 $ - $ 5,759 OPERATING PROFITS Building products $ 346 $ 138 $ - $ 138 Pulp and paper 88 246 - 246 Other operations 6 9 - 9 Other income - 293 293 - Total operating profits 440 686 293 393 General corporate expense (97) (86) - (86) Interest expense (287) (296) - (296) Cost of accounts receivable sale program (19) (32) - (32) Income (loss) before income taxes and accounting changes 37 272 293 (21) Provision for income taxes (32) (253) (221) (32) Income (loss) before accounting changes 5 19 72 (53) Cumulative effect of accounting changes, net of taxes - (63) - (63) Net income (loss) $ 5 $ (44) $ 72 $ (116) Per share: Income (loss) before accounting changes $ .06 $ .22 $ .84 $ (.62) Cumulative effect of accounting changes - (.73) - (.73) Net income (loss) $ .06 $ (.51) $ .84 $ (1.35) Average number of shares outstanding 86.3 85.6 85.6 85.6
Notes to Operating Highlights 1. Income (Loss) Per Share. Income (loss) per share is computed based on net income (loss) and the weighted average number of common shares outstanding, net of restricted stock. The effects of assuming issuance of common shares under long-term incentive, stock option and stock purchase plans are insignificant. 2. Accounting Changes. Effective January 1, 1991, the Corporation adopted Financial Accounting Standard Number 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." Also effective on this date, the Corporation changed its accounting policy to include in inventory certain supplies that previously were expensed. 3. Sale of Accounts Receivable. As of June 30, 1992 and 1991, the Corporation had sold fractional ownership interests in a defined pool of trade accounts receivable for $800 million and $900 million, respectively. A portion of the cost of the accounts receivable sale program is based on the purchasers' level of investment and borrowing costs. Additionally, the Corporation pays fees based on its senior debt ratings. 4. Other Income. In June 1991, the Corporation sold 49,000 acres of fee timberland in Washington for $48 million in cash. A pretax gain of $46 million ($29 million after taxes) was recognized on this transaction. In January 1991, the Corporation sold two domestic containerboard mills, 19 corrugated packaging plants and approximately 540,000 acres of fee timberland (and lease rights to 98,000 acres of timberland) for $725 million in cash and, in a separate transaction, sold its interests in a foreign containerboard mill, two corrugated packaging plants and two sheet plants for $102 million in cash. A combined pretax gain of $247 million ($43 million after taxes) was recorded in the first quarter. 5. Provision for Income Taxes. The provision for income taxes for the three months ended June 30, 1992, was based on an 87 percent estimated effective tax rate on income before income taxes for the year. The effective tax rate exceeds the federal statutory tax rate primarily because of nondeductible depreciation, depletion and goodwill amortization expenses associated with the revaluation of assets in past business acquisitions.
Excluding asset sales, the Corporation reported a pretax loss of $21 million and an income tax provision of $32 million for the six months ended June 30, 1991. The provision for income taxes was based on the effective tax rate for the six-month period. An annual effective tax rate could not be reasonably estimated in 1991 due to the low level of income before income taxes for the period relative to nondeductible expenses. -0- 7/15/92 /CONTACT: Sheila Weidman of Georgia-Pacific, 404-521-4732/ (GP) CO: Georgia-Pacific Corporation ST: Georgia IN: PAP SU: ERN
EA -- AT002 -- 9379 07/15/92 08:17 EDT
|Printer friendly Cite/link Email Feedback|
|Date:||Jul 15, 1992|
|Previous Article:||CONTINUING IMPROVEMENT IN BF GOODRICH RESULTS REFLECTS MODEST UPTURN IN ECONOMIC CONDITIONS|
|Next Article:||ROLLINS ENVIRONMENTAL SERVICES REPORTS THIRD QUARTER RESULTS; REVENUES UP 18 PERCENT, EARNINGS UP 69 PERCENT|