GEORGIA-PACIFIC REPORTS THIRD QUARTER RESULTS
GEORGIA-PACIFIC REPORTS THIRD QUARTER RESULTS ATLANTA, Oct. 15 /PRNewswire/ -- Georgia-Pacific Corp.
(NYSE: GP) today reported a net loss of $37 million or 43 cents per share for the three months ended September 30, 1992, compared with a net loss of $31 million or 36 cents per share in the 1991 third quarter. The 1991 results include a $12 million (14 cents per share) after-tax loss accrual for asset sales.
The company generated free cash flow of approximately $227 million for the three months ended September 30, 1992. Free cash flow consisted of cash from operations of approximately $303 million and proceeds from miscellaneous asset sales of approximately $32 million, less capital expenditures of approximately $108 million. In addition to paying its regular quarterly dividend, the company reduced its total debt by $171 million in the third quarter. Sales for the third quarter were $3 billion in both 1992 and 1991. Georgia-Pacific reported an all-time record quarter for its building products business with operating profits of $201 million in the 1992 third quarter compared with $129 million last year. Pulp and paper profits for the same period were $23 million versus $67 million a year ago. For the nine-month period, the company reported a net loss of $32 million (37 cents per share) versus a net loss of $75 million (87 cents per share) for the first three quarters of last year. The 1991 results include after-tax gains on asset sales of $60 million (70 cents per share) and $63 million (73 cents per share) in noncash charges for accounting changes. "Even though building products results are strong, business conditions continue to reflect a weak economy and weak pricing from pulp and paper overcapacity," said T. Marshall Hahn Jr., chairman and chief executive officer. "Our building products business continued to perform well, resulting in another record-breaking quarter. Although prices for lumber and structural panels recently have declined, they still are very strong as we head into a season of normally weaker demand," Hahn said. "Our pulp and paper business continues to be pressured by weak market conditions. Pulp and paper profits this quarter also were negatively affected by downtime taken to reduce inventories and perform maintenance. Market pulp prices improved in the third quarter," he continued. "Despite relatively high industry inventories, our containerboard and packaging business remains good. Our communication papers business continues to face disappointing growth in demand and weak prices resulting from excess capacity in the industry," 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 September 30, 1991 Ended Including Excluding Sept. 30, Asset Asset Asset 1992 Sales Sales Sales NET SALES Building products $ 1,617 $ 1,470 $ --- $ 1,470 Pulp and paper 1,444 1,496 --- 1,496 Other operations --- 7 --- 7 Total net sales $ 3,061 $ 2,973 $ --- $ 2,973 OPERATING PROFITS Building products $ 201 $ 129 $ --- $ 129 Pulp and paper 23 67 --- 67 Other operations 2 5 --- 5 Other income --- 8 8 --- Total operating profits 226 209 8 201 General corporate expense (15) (40) --- (40) Interest expense (145) (144) --- (144) Cost of accounts receivable sale program (8) (15) --- (15) Income before income taxes 58 10 8 2 Provision for income taxes (95) (41) (20) (21) Net (loss) $ (37) $ (31) $ (12) $ (19) Per share: Net (loss) $ (.43) $ (.36) $ (.14) $ (.22) Average number of shares outstanding 86.4 86.0 86.0 86.0 GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES Operating Highlights (Dollar amounts, except per share, in millions) (unaudited) Nine Nine Months Ended Months September 30, 1991 Ended Including Excluding Sept. 30, Asset Asset Asset 1992 Sales Sales Sales NET SALES Building products $ 4,610 $ 4,097 $ --- $ 4,097 Pulp and paper 4,308 4,611 --- 4,611 Other operations 19 24 --- 24 Total net sales $ 8,937 $ 8,732 $ --- $ 8,732 OPERATING PROFITS Building products $ 547 $ 267 $ --- $ 267 Pulp and paper 111 313 --- 313 Other operations 8 14 --- 14 Other income --- 301 301 --- Total operating profits 666 895 301 594 General corporate expense (112) (126) --- (126) Interest expense (432) (440) --- (440) Cost of accounts receivable sale program (27) (47) --- (47) Income (loss) before income taxes and accounting changes 95 282 301 (19) Provision for income taxes (127) (294) (241) (53) Income (loss) before accounting changes (32) (12) 60 (72) Cumulative effect of accounting changes, net of taxes --- (63) --- (63) Net income (loss) $ (32) $ (75) $ 60 $ (135) Per share: Income (loss) before accounting changes $ (.37) $ (.14) $ .70 $ (.84) Cumulative effect of accounting changes --- (.73) --- (.73) Net income (loss) $ (.37) $ (.87) $ .70 $ (1.57) Average number of shares outstanding 86.4 85.8 85.8 85.8 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 restrictive stock. The effects of assuming issuance of common shares under long-term incentive, stock option and stock purchase plans were 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 that date, the Corporation changed its accounting policy to include in inventory certain supplies that previously were expensed.
3. Other Income. In October 1991, the Corporation entered into an agreement regarding the sale of two groundwood paper mills, a sawmill and associated hydroelectric assets and timberlands for approximately $325 million in cash. A pretax gain of $8 million ($12 million loss after taxes) was accrued in the 1991 third quarter. 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. 4. Provision for Income Taxes. The provision for income taxes for the three months ended September 30, 1992, was based on a 133 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 $19 million and an income tax provision of $53 million for the nine months ended September 30, 1991. The provision for income taxes was based on the effective tax rate for the nine-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- 10/15/92 /CONTACT: Sheila Weidman of Georgia-Pacific, 404-521-4732/ (GP) CO: Georgia-Pacific Corporation ST: Georgia IN: PAP SU: ERN
BR-BN -- AT002 -- 0215 10/15/92 08:38 EDT
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|Date:||Oct 15, 1992|
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