Filed Pursuant to Rule
424(b)(3) of the Rules and
Regulations Under the
Securities Act of 1933
Registration Statement Nos.
33-23826, 33-43448 and
33-51876
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 24, 1993)
FORT HOWARD CORPORATION
12-3/8% Senior Subordinated Notes Due 1997
12-5/8% Subordinated Debentures Due 2000
14-1/8% Junior Subordinated Discount Debentures Due 2004
9-1/4% Senior Notes Due 2001
10% Subordinated Notes Due 2003
1991 Pass Through Trust, Pass Through Certificates, Series 1991
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RECENT DEVELOPMENTS
On January 19, 1994, Fort Howard Corporation filed an amended
registration statement on Form S-2 with the Securities and Exchange Commission
for the proposed underwritten offering announced December 17, 1993. The
offering includes $100 million aggregate principal amount of Senior Notes due
2002 and $400 million aggregate principal amount of Senior Subordinated Notes
due 2006. Attached hereto and incorporated by reference herein is a copy of
the recent developments section of the amended registration statement which
includes information relative to the Company's financial performance for 1993.
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This Prospectus Supplement, together with the Prospectus, is to be used
by Morgan Stanley & Co. Incorporated in connection with offers and sales of
the above-referenced securities in market-making transactions at negotiated
prices related to prevailing market prices at the time of sale. Morgan
Stanley & Co. Incorporated may act as principal or agent in such transactions.
January 20, 1994
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RECENT DEVELOPMENTS
Although definitive financial results for the fourth quarter of 1993 are
not yet available, based on information available to date, the Company expects
that reported consolidated net sales will increase to between $290 million and
$295 million from $286 million for the fourth quarter of 1992. Domestic
tissue pricing and, to a lesser extent, volume improved in the fourth quarter
of 1993 compared to 1992. These improvements were partially offset by a
decline in fourth quarter 1993 net sales in the Company's United Kingdom
tissue operations compared to 1992 due to slightly lower volume and
significantly lower selling prices. United Kingdom retailers engaged in
increasingly competitive pricing activity in 1993 across a broad range of
consumer products including disposable paper products. Such competitive
pricing activity is expected to continue into 1994.
The Company expects that reported EBDIAT (as defined herein) in the
fourth quarter of 1993 will be between $96 million and $98 million compared to
$95 million for the fourth quarter of 1992. Operating income for the fourth
quarter of 1993 is expected to be between $71 million and $73 million compared
to $57 million for the same period of 1992. Reported operating income for the
fourth quarter of 1993 will benefit from the elimination of amortization of
goodwill of $14 million for the quarter as a result of the Company's goodwill
write-off in the third quarter of 1993. However, reported operating income
will be adversely impacted in the fourth quarter of 1993 by approximately $2
million of additional depreciation resulting from the acceleration of the
depreciable lives of certain equipment. Excluding the effects of these items,
reported operating income for the fourth quarter of 1993 is expected to
increase slightly compared to the fourth quarter of 1992.
The Company further expects that its net loss will decline in the fourth
quarter of 1993 compared to the fourth quarter of 1992 due principally to the
elimination of the amortization of goodwill.
For the full year 1993, the Company expects that reported net sales will
increase to between $1,185 million and $1,190 million from $1,151 million in
1992. Principally as a result of the goodwill write-off, the Company expects
to report an operating loss of $1,716 million to $1,718 million in 1993
compared to operating income of $271 million in 1992. Excluding the effects
of the goodwill write-off, the reversal of employee stock compensation, and
the acceleration of the depreciable lives of certain equipment, the Company
would expect operating income to decline to between $242 million and $244
million in 1993. The Company further expects that reported EBDIAT will
decrease to between $386 million and $388 million in 1993 from $410 million in
1992. In 1993, EBDIAT excludes a $5 million gain on the sale of the Company's
remaining equity interest in Sweetheart. Also, principally as a result of the
goodwill write-off, the Company's reported net loss is expected to be
materially higher in 1993 than in 1992.
While the Company introduced domestic net selling price increases in each
of the first three quarters of 1993, the relatively low industry operating
rates experienced in 1993 are expected to continue into at least the first
quarter of 1994, a period of seasonally lower volume. Accordingly, in the
first quarter of 1994, the Company's results may be adversely affected as a
result of weak industry demand.
The construction of the Company's fifth paper machine and related
facilities at its Muskogee mill is progressing as planned and is scheduled for
start-up in the first half of 1994.
