SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------ ------
Commission File Number 1 - 3506
-------------------
GEORGIA-PACIFIC CORPORATION
(Exact Name of Registrant as Specified in its Charter)
GEORGIA 93-0432081
(State of Incorporation) (IRS Employer Id. Number)
133 PEACHTREE STREET, N.E., ATLANTA, GEORGIA 30303
(Address of Principal Executive Offices)
(404) 652 - 4000
(Telephone Number of Registrant)
-------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
As of the close of business on August 13, 1997, Georgia-Pacific Corporation had
91,490,836 shares of Common Stock outstanding.
<PAGE> 2
PART I - FINANCIAL INFORMATION
-------------------------------------------
Item 1. Financial Statements
STATEMENTS OF INCOME (Unaudited)
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
-------------- --------------
(Millions, except per share amounts) 1997 1996 1997 1996
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $3,326 $3,324 $6,471 $6,377
- -----------------------------------------------------------------------
Costs and expenses
Cost of sales, excluding depreciation
and cost of timber harvested
shown below 2,636 2,514 5,112 4,798
Selling, general and
administrative 283 349 574 704
Depreciation and cost of timber
harvested 237 248 467 460
Interest 119 114 241 226
Other expense (income) - 74 (128) 74
- -----------------------------------------------------------------------
Total costs and expenses 3,275 3,299 6,266 6,262
- -----------------------------------------------------------------------
Income before income taxes
and extraordinary item 51 25 205 115
Provision for income taxes 24 15 88 55
- -----------------------------------------------------------------------
Income before extraordinary item 27 10 117 60
Extraordinary item - loss from early
retirement of debt, net of taxes - (5) - (5)
- -----------------------------------------------------------------------
Net income $ 27 $ 5 $ 117 $ 55
==========================================================================
Per share:
Income before extraordinary item $ .30 $ .11 $ 1.28 $ .66
Extraordinary item - loss from early
retirement of debt, net of taxes - (.05) - (.05)
- -----------------------------------------------------------------------
Net income $ .30 $ .06 $ 1.28 $ .61
==========================================================================
Average number of shares outstanding 91.2 90.5 91.1 90.5
==========================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
STATEMENTS OF CASH FLOWS
Georgia-Pacific Corporation and Subsidiaries
(Unaudited)
<TABLE>
<CAPTION>
Six months
ended June 30,
-------------------------
(Millions) 1997 1996
- -------------------------------------------------------------------------
<S> <C> <C>
Cash provided by (used for) operations
Net income $ 117 $ 55
Adjustments to reconcile net income to cash
provided by operations:
Depreciation 392 376
Cost of timber harvested 75 84
Other income (128) -
Deferred income taxes 40 13
Amortization of goodwill 30 29
Stock compensation programs (15) 13
Gain on sales of assets (18) (15)
Increase in receivables (79) (14)
Decrease in inventories 108 48
Change in other working capital (124) 57
Increase (decrease) in taxes payable 19 (87)
Change in other assets and other
long-term liabilities (22) 13
- -------------------------------------------------------------------------
Cash provided by operations 395 572
- -------------------------------------------------------------------------
Cash provided by (used for) investment activities
Property, plant and equipment investments (270) (652)
Timber and timberlands purchases (71) (40)
Acquisition - (350)
Decrease in cash restricted for capital expenditures 11 62
Proceeds from sales of assets 331 35
Other (2) (5)
- -------------------------------------------------------------------------
Cash (used for) investment activities (1) (950)
- -------------------------------------------------------------------------
Cash provided by (used for) financing activities
Proceeds from option plan exercises 15 1
Repayments of long-term debt (304) (159)
Additions to long-term debt - 2
Fees paid to issue debt - (1)
Increase (decrease) in bank overdrafts (75) 1
Increase in commercial paper and
other short-term notes 57 625
Cash dividends paid (91) (91)
- -------------------------------------------------------------------------
Cash provided by (used for) financing activities (398) 378
- -------------------------------------------------------------------------
Increase (decrease) in cash (4) -
Balance at beginning of period 10 11
- -------------------------------------------------------------------------
Balance at end of period $ 6 $ 11
========================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
BALANCE SHEETS
Georgia-Pacific Corporation and Subsidiaries
<TABLE>
<CAPTION>
June 30, December 31,
(Millions, except shares and per share amounts) 1997 1996
- -------------------------------------------------------------------------
<S> <C> <C>
ASSETS (Unaudited)
Current assets
Cash $ 6 $ 10
Receivables, less allowances of $12 and $10 1,386 959
Inventories 1,350 1,467
Deferred income taxes 129 129
Other current assets 50 50
- -------------------------------------------------------------------------
Total current assets 2,921 2,615
- -------------------------------------------------------------------------
Timber and timberlands 1,177 1,337
- -------------------------------------------------------------------------
Property, plant and equipment
Land, buildings, machinery and equipment, at cost 13,914 13,733
Accumulated depreciation (7,497) (7,173)
- -------------------------------------------------------------------------
Property, plant and equipment, net 6,417 6,560
- -------------------------------------------------------------------------
Goodwill 1,628 1,658
- -------------------------------------------------------------------------
Other assets 928 648
- -------------------------------------------------------------------------
Total assets $ 13,071 $12,818
========================================================================
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank overdrafts, net $ 176 $ 251
Commercial paper and other short-term notes 1,052 645
Current portion of long-term debt 125 311
Accounts payable 553 662
Accrued compensation 182 196
Accrued interest 74 85
Other current liabilities 349 340
- -------------------------------------------------------------------------
Total current liabilities 2,511 2,490
- -------------------------------------------------------------------------
Long-term debt, excluding current portion 4,254 4,371
- -------------------------------------------------------------------------
Other long-term liabilities 1,541 1,275
- -------------------------------------------------------------------------
Deferred income tax liabilities 1,201 1,161
- -------------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
Common stock, par value $.80; 150,000,000
shares authorized; 91,670,000 and 91,396,000
shares issued 73 73
Additional paid-in capital 1,294 1,277
Retained earnings 2,226 2,200
Long-term incentive plan deferred compensation (9) (11)
Other (20) (18)
- -------------------------------------------------------------------------
Total shareholders' equity 3,564 3,521
- -------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 13,071 $12,818
===========================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS (Unaudited)
GEORGIA-PACIFIC CORPORATION
JUNE 30, 1997
1. PRINCIPLES OF PRESENTATION. The interim financial information included
herein is unaudited; however, such information reflects all adjustments
which are, in the opinion of management, necessary for a fair
presentation of the Corporation's financial position, results of
operations, and cash flows for the interim periods. All such adjustments
are of a normal, recurring nature except for the items discussed in Notes
3 and 4 below. Certain 1996 amounts have been reclassified to conform
with the 1997 presentation.
2. 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 shares. The effects of assuming issuance
of common shares under long-term incentive, stock option, and stock
purchase plans were either insignificant or antidilutive.
3. OTHER EXPENSE (INCOME). The first quarter 1997 sale of the company's
Martell operations, which included a sawmill, particleboard mill and
timberlands, generated a pretax gain of $128 million (after-tax gain of
$80 million). Second quarter 1996 operating profits include a total
pretax expense of $74 million (after-tax expense of $45 million) for the
estimated costs of enhanced pension benefits and continued health care
benefits offered under a voluntary early retirement program, including
$34 million in the building products segment and $40 million in the pulp
and paper segment.
4. EXTRAORDINARY ITEM. The Corporation redeemed $150 million of its
outstanding debt during the 1996 second quarter. As a result, an after-
tax extraordinary loss of $5 million (5 cents per share) was recognized.
5. SUPPLEMENTAL DISCLOSURES - STATEMENTS OF CASH FLOWS. The cash impact of
interest and income taxes is reflected in the table below. The effect of
foreign currency exchange rate changes on cash was not material in either
period.
<TABLE>
<CAPTION>
Six months
ended June 30
------------------------
(Millions) 1997 1996
---------------------------------------------------------------
<S> <C> <C>
Total interest costs $ 246 $ 244
Interest capitalized (5) (18)
---------------------------------------------------------------
Interest expense $ 241 $ 226
================================================================
Interest paid $ 254 $ 246
================================================================
Income taxes paid, net of refunds $ 29 $ 124
================================================================
</TABLE>
<PAGE> 7
6. INVENTORY VALUATION. Inventories include costs of materials, labor, and
plant overhead. The Corporation uses the dollar value pool method for
computing LIFO inventories. The major components of inventories were as
follows:
<TABLE>
<CAPTION>
June 30, December 31,
(Millions) 1997 1996
---------------------------------------------------------------
<S> <C> <C>
Raw materials $ 325 $ 415
Finished goods 944 979
Supplies 294 295
LIFO reserve (213) (222)
---------------------------------------------------------------
Total inventories $ 1,350 $1,467
============================================================
</TABLE>
7. PROVISION FOR INCOME TAXES. The effective tax rate was 47 percent for
the three months ended June 30, 1997, and 60 percent for the three months
ended June 30, 1996. The effective tax rate was 43 percent for the six
months ended June 30, 1997, and 48 percent for the six months ended June
30, 1996. The effective tax rate for each period was different than the
statutory rates primarily because of nondeductible goodwill amortization
expense.
8. COMMITMENTS AND CONTINGENCIES. The Corporation is a party to various legal
proceedings incidental to its business and is subject to a variety of
environmental and pollution control laws and regulations in all
jurisdictions in which it operates. As is the case with other companies in
similar industries, the Corporation faces exposure from actual or potential
claims and legal proceedings involving environmental matters. Liability
insurance in effect during the last several years provides only very
limited coverage for environmental matters.
The Corporation is involved in environmental remediation activities at
approximately 200 sites, both owned by the Corporation and owned by others,
where it has been notified that it is or may be a potentially responsible
party under the Comprehensive Environmental Response, Compensation and
Liability Act or similar state `superfund'' laws. Of the known sites in
which it is involved, the Corporation estimates that approximately 31
percent are being investigated, approximately 43 percent are being
remediated and approximately 26 percent are being monitored (an activity
which occurs after either site investigation or remediation has been
completed). The ultimate costs to the Corporation for the investigation,
remediation and monitoring of many of these sites cannot be predicted with
certainty, due to the often unknown magnitude of the pollution or the
necessary cleanup, the varying costs of alternative cleanup methods, the
amount of time necessary to accomplish such cleanups, the evolving nature
of cleanup technologies and government regulations and the inability to
determine the Corporation's share of multi-party cleanups or the extent to
which contribution will be available from other parties. The Corporation
has established reserves for environmental remediation costs for these
sites in amounts which it believes are probable and reasonably estimable.
Based on analysis of currently available information and previous
experience with respect to the cleanup of hazardous substances, the
Corporation believes that it is reasonably possible that costs associated
with these sites may exceed current reserves by amounts that may prove
insignificant or that could range, in the aggregate, up to approximately
$62 million. This estimate of the range of reasonably possible additional
costs is less certain than the estimates upon which reserves are based, and
in order to establish the upper limit of such range, assumptions least
favorable to the Corporation among the range of reasonably possible
outcomes were used. In estimating both its current reserves for
environmental remediation and the possible range of additional costs, the
Corporation has not assumed it will bear the entire cost of remediation of
every site to the exclusion of other known potentially responsible parties
who may be jointly and severally liable. The ability of other potentially
responsible parties to participate has been taken into account, based
generally on such parties' financial condition and probable contribution on
a per site basis.
The Corporation has reached an agreement with the New York Department of
Environmental Conservation concerning alleged disposal of PCB-contaminated
wastes from the Corporation's Plattsburgh, New York, facility into
Cumberland Bay of Lake Champlain. The Corporation has agreed to pay $9
million to the State of New York in full settlement of its remediation
obligations with respect to this site.
The Corporation and many other companies are defendants in suits brought in
various courts around the nation by plaintiffs who allege that they have
suffered personal injury as a result of exposure to asbestos-containing
products. These suits allege a variety of lung and other diseases based on
alleged exposure to products previously manufactured by the Corporation.
In many cases the plaintiffs are unable to demonstrate that they have
suffered any compensable loss as a result of such exposure. The
Corporation generally resolves asbestos cases by voluntary dismissal or
settlement for amounts it considers reasonable given the facts and
circumstances of each case. The amounts it has paid to defend and settle
these cases to date have been substantially covered by product liability
insurance. The Corporation currently is defending claims of approximately
68,000 such plaintiffs and anticipates that additional suits will be filed
against it over the next several years. The Corporation has insurance
available in amounts which it believes are adequate to cover substantially
all of the reasonably foreseeable damages and settlement amounts arising
out of claims and suits currently pending. The Corporation has further
insurance coverage available for the disposition of suits that may be filed
against it in the future, but there can be no assurance that the amounts of
such insurance will be adequate to cover all future claims. The
Corporation has established reserves for liabilities and legal defense
costs it believes are probable and reasonably estimable with respect to
pending suits and claims and a receivable for expected insurance
recoveries.
As previously reported, an action is pending against the Corporation in
Alabama state court that seeks to recover damages on behalf of a class of
all persons currently owning structures in the United States on which
hardboard siding manufactured by the Corporation after January 1, 1980, was
installed. The plaintiffs allege that this hardboard siding was
inadequately designed and manufactured and as a consequence prematurely
discolors and deteriorates. They also dispute the validity and
availability of the warranty issued with the product. On July 24, 1997,
the court preliminarily approved a proposed settlement of this case,
authorized a program to provide notice to class members and set a date in
January 1998 for a hearing on the fairness of the settlement. Accordingly,
the settlement remains subject to final court approval. The settlement
provides a procedure for resolving product warranty claims on certain of
the Corporation's hardboard siding products and for payment of $3 million
in legal fees to plaintiffs' counsel, plus expenses not to exceed $200,000.
In addition, plaintiffs' counsel will be entitled to additional fees based
upon a percentage of claims paid by the Corporation. The Corporation has
previously established financial reserves it believes to be adequate to pay
eligible claims and legal fees, and that such payments will not be material
to its long term results of operations, liquidity or consolidated financial
position. However, the volume and timing of actual claims, or the number
of potential claimants who choose not to participate in the settlement,
could cause settlement costs to exceed established reserves. A similar
case has been filed against the Corporation and another defendant in state
court in Georgia seeking to certify a class of individuals whose mobile
homes contain the Corporation's hardboard siding. On July 8, 1997, a
purported nationwide class action was filed against the Corporation in
state court in Georgia making claims substantially similar to those alleged
in the Alabama class action. The Corporation believes the claims of the
members of these purported class actions are encompassed within the
settlement of the Alabama case and it will seek to have these cases
dismissed.
The Corporation and nine other companies have been named as defendants in
class action suits alleging that they engaged in a conspiracy to fix the
prices of sanitary commercial paper products, such as towels and napkins,
in violation of federal and state laws. At present, there are
approximately 30 suits pending in Federal courts in Gainesville, Florida,
Atlanta and Milwaukee, and in the state courts of California and Tennessee.
The Corporation and the other defendants have removed the California
actions to federal court. However, plaintiffs have filed actions seeking
to have these cases remanded to state court. In addition, the Corporation
and the other defendants have filed a petition with the Federal Judicial
Panel on Multi-District Litigation asking the Panel to consolidate all of
the federal court cases in Milwaukee. A hearing has been set on this
petition for September 19, 1997. The Corporation has denied that it has
engaged in any of the illegal conduct alleged in these cases and intends to
defend itself vigorously.
Although the ultimate outcome of these environmental matters and legal
proceedings cannot be determined with certainty, based on presently
available information management believes that adequate reserves have been
established for probable losses with respect thereto. Management further
believes that the ultimate outcome of such environmental matters and legal
proceedings could be material to operating results in any given quarter or
year, but will not have a material adverse effect on the long-term results
of operations, liquidity or consolidated financial position of the
Corporation.
For a discussion of anticipated Cluster Rule and Year 2000 spending refer
to "Management's Discussion and Analysis".
<TABLE>
<CAPTION>
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT (unaudited)
Georgia-Pacific Corporation and Subsidiaries
(Dollar amounts, except Second Quarter
per share, in millions) First -------------------------
Quarter Quarter Year-to-date
- -------------------------------------------------------------------------
<S> <C> <C> <C>
1997
NET SALES
Building products $1,781 57% $1,943 59% $3,724 58%
Pulp and paper 1,351 43 1,371 41 2,722 42
Other operations 13 - 12 - 25 -
- -------------------------------------------------------------------------
Total net sales $3,145 100% $3,326 100% $6,471 100%
=========================================================================
OPERATING PROFITS
Building products $ 289 92% $ 203 93% $ 492 93%
Pulp and paper 20 7 12 6 32 6
Other operations 4 1 3 1 7 1
- -------------------------------------------------------------------------
Total operating profits 313 100% 218 100% 531 100%
=== === ===
General corporate expense (37) (48) (85)
Interest expense (122) (119) (241)
Provision for income taxes (64) (24) (88)
- -------------------------------------------------------------------------
Net income $ 90 $ 27 $ 117
==========================================================================
Net income per common share $ .99 $ .30 $ 1.28
==========================================================================
</TABLE>
<TABLE>
<CAPTION>
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT (unaudited)
Georgia-Pacific Corporation and Subsidiaries
(Dollar amounts, Third Quarter Fourth Quarter
except per share ----------------- --------------------
in millions) Quarter Year-to-date Quarter Year-to-date
- -------------------------------------------------------------------------
<S>
1997
NET SALES
Building products
Pulp and paper
Other operations
- -------------------------------------------------------------------------
Total net sales
=========================================================
OPERATING PROFITS
Building products
Pulp and paper
Other operations
- -------------------------------------------------------------------------
Total operating
profits
General corporate
expense
Interest expense
Provision for
income taxes
- -------------------------------------------------------------------------
Net income
=========================================================
Net income per common share
==========================================================
<CAPTION>
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT (unaudited)
Georgia-Pacific Corporation and Subsidiaries
(Dollar amounts, except Second Quarter
per share, in millions) First --------------
Quarter Quarter Year-to-date
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1996
NET SALES
Building products $1,571 52% $1,896 57% $3,467 55%
Pulp and paper 1,471 48 1,416 43 2,887 45
Other operations 11 - 12 - 23 -
- --------------------------------------------------------------------------------
Total net sales $3,053 100% $3,324 100% $6,377 100%
===============================================================================
OPERATING PROFITS
Building products $ 67 28% $ 141 80% $ 208 50%
Pulp and paper 174 72 33 19 207 49
Other operations 2 - 3 1 5 1
- --------------------------------------------------------------------------------
Total operating profits 243 100% 177 100% 420 100%
=== === ===
General corporate expense (41) (38) (79)
Interest expense (112) (114) (226)
Provision for income taxes (40) (15) (55)
- --------------------------------------------------------------------------------
Income before extraordinary
item 50 10 60
Extraordinary item - loss from
early retirement of debt, net
of taxes - (5) (5)
- --------------------------------------------------------------------------------
Net income $ 50 $ 5 $ 55
===============================================================================
Per common share:
Income before extraordinary
item $ .55 $ .11 $ .66
Extraordinary item - loss from
early retirement of debt, net
of taxes - (.05) (.05)
Net income $ .55 $ .06 $ .61
===============================================================================
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT (unaudited)
Georgia-Pacific Corporation and Subsidiaries
(Dollar amounts, Third Quarter Fourth Quarter
except per share, ------------------------ ------------------------
in millions) Quarter Year-to-date Quarter Year-to-date
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996
NET SALES
Building products $ 2,040 59% $ 5,507 56% $ 1,858 58% $ 7,365 57%
Pulp and paper 1,401 41 4,288 44 1,321 41 5,609 43
Other operations 10 - 33 - 17 1 50 -
- --------------------------------------------------------------------------------
Total net sales $ 3,451 100% $ 9,828 100% $ 3,196 100% $13,024 100%
===============================================================================
OPERATING PROFITS
Building products $ 240 69% $ 448 58% $ 68 46% $ 516 56%
Pulp and paper 104 30 311 41 79 54 390 43
Other operations 4 1 9 1 (1) - 8 1
- --------------------------------------------------------------------------------
Total operating
profits 348 100% 768 100% 146 100% 914 100%
=== === === ===
General corporate
expense (53) (132) (27) (159)
Interest expense (120) (346) (113) (459)
Provision for
income taxes (76) (131) (4) (135)
- --------------------------------------------------------------------------------
Income before extraordinary
item 99 159 2 161
Extraordinary item - loss from
early retirement of debt, net
of taxes - (5) - (5)
- --------------------------------------------------------------------------------
Net income $ 99 $ 154 $ 2 $ 156
===============================================================================
Per common share:
Income before extraordinary
item $ 1.09 $ 1.75 $ .02 $ 1.78
Extraordinary item - loss
from early retirement of
debt, net of taxes - (.05) - (.06)
- --------------------------------------------------------------------------------
Net income $ 1.09 $ 1.70 $ .02 $ 1.72
===============================================================================
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH 1996
The Corporation reported consolidated net sales of approximately $3.3 billion
for the three months ended June 30, 1997 and 1996. Net income for the 1997
second quarter was $27 million (30 cents per share) compared with $5 million (6
cents per share) in 1996. The 1996 second quarter results included a $74
million pretax (after-tax 50 cents per share) charge to earnings for the cost of
an early retirement program and an after-tax loss of $5 million (5 cents per
share) from the early retirement of debt.
The Corporation reduced its selling, general and administrative expenses (SG&A)
to $283 million in the 1997 second quarter, compared with $349 million in 1996.
The cost reduction is largely a result of a voluntary early retirement program
implemented in the second half of 1996 and overhead reduction plans implemented
in 1997. Approximately 950 employees elected to take early retirement effective
August 30, 1996. The Corporation expects full-year 1997 SG&A to be
approximately $200 million lower than in 1996.
The remaining discussion refers to the "Sales and Operating Profits by
Industry Segment" table (included in PART I - ITEM 1. hereto).
The Corporation's building products segment reported net sales of $1.9 billion
for the second three months of 1997, a 2 percent increase from the 1996
comparable period. Operating profits increased in 1997 to $203 million compared
with $141 million in 1996. The 1996 second quarter results included a $34
million expense for an early retirement program. Return on sales was 10.4
percent and 7.4 percent for the three months ended June 30, 1997 and 1996,
respectively.
Continued price increases in gypsum wallboard (up 14 percent from second quarter
1996, and up 3 percent from first quarter 1997) and lumber (up 14 percent from
second quarter 1996 and up 4 percent from first quarter 1997) contributed to the
higher return on sales quarter over quarter. These increases were offset by 36
percent lower prices for oriented strand board in the 1997 second quarter than
in the same period in 1996. Prices for structural panels and industrial wood
products remain weak due to excess industry capacity.
Operating losses for the Corporation's building products distribution division
were $9 million in the second quarter, compared with a loss of $34 million in
the second quarter of 1996 which included restructuring charges of $35 million.
See further discussion under "Six months ended June 30, 1997 compared with June
30, 1996". Selected financial and operating data for the building products
distribution business are shown in the table below:
Selected Distribution Division Data
(millions) 3 months ended June 30 6 months ended June 30
1997 1996 1997 1996
Sales $1,108 $1,130 $2,091 $2,062
Operating Loss (9) (34) (42) (73)
Capital expenditures 11 67 24 154
Depreciation 12 15 23 22
The Corporation's pulp and paper segment reported net sales of $1.4 billion and
operating profits of $12 million in the 1997 second quarter. For the same
period in 1996, the Corporation reported net sales of $1.4 billion and operating
profits of $33 million. The 1996 second quarter results included a $40 million
expense for an early retirement program. Return on sales decreased to 0.9
percent in 1997 from 2.3 percent in 1996, primarily due to a decline in average
prices for most of the Corporation's pulp and paper products. Average
containerboard prices for the quarter were approximately 25 percent below prices
in the same 1996 period, while average communication paper prices for the
quarter were approximately 6 percent below year ago levels. Prices for tissue
products remained stable compared to the prior year and shipment volumes
increased 9 percent. Average pulp prices for the second quarter were 17 percent
above those of the 1996 second quarter.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED WITH 1996
The Corporation reported consolidated net sales of $6.5 billion and net income
of $117 million ($1.28 per share) for the six months ended June 30, 1997,
compared with net sales of $6.4 billion and net income of $55 million (.61 cents
per share) in 1996. The 1997 results include a first quarter gain of $128
million ($80 million after taxes) from the sale of the Corporation's Martell,
California, assets to Sierra Pacific Industries. The 1996 results include a
pretax charge of $74 million (after-tax 50 cents per share) related to the
voluntary early retirement program discussed above. An extraordinary, after-tax
loss of $5 million (5 cents per share) was recorded in the 1996 second quarter
for the early retirement of debt.
Selling, general and administrative expense (SG&A) was $574 million for the six
months ended June 30, 1997, compared with $704 million in 1996. The cost
reduction is largely a result of a voluntary early retirement program
implemented in the second half of 1996 and overhead reduction plans implemented
in 1997. The Corporation expects full-year 1997 SG&A to be approximately $200
million lower than in 1996.
The remaining discussion refers to the "Sales and Operating Profits by Industry
Segment" table (included in PART I - ITEM 1. hereto).
The Corporation's building products segment reported net sales of $3.7 billion
and operating profits of $492 million for the six months ended June 30, 1997,
compared with net sales of $3.5 billion and operating profits of $208 million in
1996. The 1996 six months results included a $34 million expense for an early
retirement program. Return on sales increased to 13.2 percent from 6.0 percent
a year ago. A 19 percent increase in lumber prices, combined with increased
gypsum prices and shipment volumes, more than offset approximately 35 percent
lower prices for oriented strand board and an 8 percent increase in log costs.
Operating losses for the Corporation's building products distribution division
were $42 million for the first half of 1997, compared with losses of $21 million
in 1996 before restructuring charges of $52 million. Operating losses are worse
for the first six months of this year compared to last year primarily as a
result of an approximate $17 million deterioration in margins. Sales volume
deteriorated in the second quarter of this year compared to last year and is
flat for the first six months compared to last year. The Corporation is
currently projecting an operating loss for the second half of 1997, as this
business continues to experience problems stemming from its restructuring that
is impeding its ability to return to profitability. Management is aggresively
addressing these problems, but cannot predict when the division will return to
profitability. Selected financial and operating data for the building products
distribution business are shown in the table above.
The Corporation's pulp and paper segment reported net sales of $2.7 billion and
operating profits of $32 million for the six-month period ended June 30, 1997,
compared with net sales of $2.9 billion and operating profits of $207 million in
1996. The 1996 six months results included a $40 million expense for an early
retirement program. Return on sales decreased to 1.2 percent compared with 7.2
percent for the same period a year ago, primarily as a result of substantially
lower prices for most of the Corporation's pulp and paper products. Compared
with the 1996 first half, prices were 30 percent lower for containerboard, 6
percent lower for market pulp, and 12 percent lower for communication papers.
Tissue prices were slightly lower than a year ago, although shipment volumes
increased 13 percent.
LIQUIDITY AND CAPITAL RESOURCES
OPERATING ACTIVITIES: The Corporation generated cash from operations of $395
million during the first six months of 1997, compared with $572 million in the
first six months of 1996. This decline is primarily attributable to lower pulp
and paper prices. Additionally, cash used for working capital in the first six
months of 1997 was $80 million higher than in the first six months of 1996.
INVESTING ACTIVITIES: Property, plant, and equipment investments for the six
months ended June 30, 1997 were $270 million compared with $652 million in the
first half of 1996. Expenditures in 1997 included $158 million in the pulp and
paper segment, $82 million in the building products segment, and $30 million of
other and general corporate. The Corporation purchased the U.S. and Canadian
gypsum operations of Domtar Inc. for $350 million in the second quarter of 1996.
The Corporation expects to invest a total of approximately $800 million in 1997,
without considering the cost of any acquisitions.
On March 31, 1997, the Corporation completed the sale of its Martell,
California, assets to Sierra Pacific Industries for $308 million. Assets
included in this transaction were 127,000 acres of timberlands, a sawmill, and a
particleboard plant.
By the end of 1997, the United States Environmental Protection Agency ("EPA")
is expected to promulgate a set of technical provisions known as the Cluster
Rule that will establish new requirements for air emissions and wastewater
discharges from pulp and paper mills. The Corporation estimates that capital
expenditures of approximately $550 million will be made over the next eight
years in order to comply with the Cluster Rule's requirements. Of that total,
about $300 million will be needed within three years of the Cluster Rule's
effective date, which is expected to be in the fourth quarter of 1997. One of
the main components of the Cluster Rule is that pulp and paper mills use only
elemental chlorine free ("ECF") technology, which will require the complete
substitution of chlorine dioxide for elemental chlorine in the pulp bleaching
process. Approximately $165 million of the amounts required to be spent in the
next three years will go toward ECF conversion at mills located in Ashdown,
Arkansas; Crossett, Arkansas; Bellingham, Washington; Palatka, Florida; and
Woodland, Maine. The bulk of the remaining $135 million to be spent within the
next three years is for additional air emissions controls at the Corporation's
pulp and paper facilities.
FINANCING ACTIVITIES: The Corporation's total debt was $5.6 billion at June 30,
1997. Total debt at December 31, 1996 was $5.9 billion, which included $350
million under the accounts receivable sale program.
In conjunction with the sale of the Corporation's Martell, California,
operations, the Corporation received notes receivable from Sierra Pacific
Industries in the amount of $270 million. These notes are included in other
assets. In April 1997, the Corporation monetized these notes receivable through
the issuance of notes payable in a private placement. Proceeds from the notes
receivable will be used to fund payments required for the notes payable. The
notes payable are classified as "Other long-term liabilities" on the
Corporation's balance sheet. Proceeds from the issuance of the notes payable
and cash from operations were used to reduce debt in the 1997 second quarter,
including $300 million of 9.85% notes that were due on June 1, 1997.
The Corporation adopted SFAS 125 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" in the first quarter. As
a result, the Corporation's accounts receivable sale program is accounted for as
a secured borrowing effective January 1, 1997. The $280 million of receivables
outstanding under the program and the corresponding debt are included as current
receivables and short-term debt, respectively, on the Corporation's balance
sheet at June 30, 1997. The fees associated with the program are included in
interest expense.
At June 30, 1997, the Corporation had outstanding borrowings of $646 million
under certain Industrial Revenue Bonds. Approximately $15 million from the
issuance of these bonds is being held by trustees and is restricted for the
construction of certain capital projects. Amounts held by trustees are
classified as noncurrent assets in the accompanying balance sheet.
The Corporation has a $1.5 billion unsecured revolving credit facility which is
used for direct borrowings and as support for commercial paper and other short-
term borrowings. As of June 30, 1997, $728 million of committed credit was
available in excess of all short-term borrowings outstanding under or supported
by the facility.
At June 30, 1997, the Corporation's weighted average interest rate on its total
debt was 7.7% including outstanding interest rate exchange agreements. At June
30, 1997, these interest rate
exchange agreements effectively converted $496 million of floating rate
obligations with a weighted average interest rate of 5.6% to fixed rate
obligations with an average effective interest rate of 9.0%. These agreements
have a weighted average maturity of approximately 1.6 years. As of June 30,
1997, the Corporation's total floating rate debt exceeded related interest rate
exchange agreements by $1.4 billion.
As of June 30, 1997, the Corporation had registered for sale up to $500 million
of debt securities under a shelf registration statement filed with the
Securities and Exchange Commission.
In 1997, the Corporation expects its cash flow from operations, together with
proceeds from any asset sales and available financing sources, to be sufficient
to fund planned capital investments, pay dividends and make scheduled debt
payments.
OTHER In February 1997, the Financial Accounting Standards Board (FASB)
issued Financial Accounting Standard Number 128 (SFAS 128), "Earnings Per
Share", which specifies the computation, presentation, and disclosure
requirements for earnings per share. The Corporation will be required to adopt
the new Standard in the 1997 fourth quarter. All prior period earnings per share
data will be restated to conform with the provisions of SFAS 128. Based on a
preliminary evaluation of this Standards' requirements, the Corporation does not
expect the per share amounts reported under SFAS 128 to be materially different
from those calculated and presented under APB Opinion 15.
In June 1997, the FASB issued Financial Accounting Standard Number 130 (SFAS
130) "Reporting Comprehensive Income", which establishes standards for
reporting and display of comprehensive income and its components in a full set
of general purpose financial statements. The Corporation will be required to
adopt the new Standard in 1998. All prior periods presented will be reported in
accordance with SFAS 130 for comparative purposes.
Also in June 1997, the FASB issued Financial Accounting Standard Number 131
(SFAS 131) "Disclosure about Segments of an Enterprise and Related
Information". This statement requires companies to determine segments based on
how management makes decisions about allocating resources to segments and
measuring their performance. Disclosures for each segment are similar to those
required under current standards, with the addition of certain quarterly
disclosure requirements. SFAS 131 also requires entity-wide disclosure about the
products and services an entity provides, the countries in which it holds
material assets and reports material revenues, and its significant customers.
The Corporation will be required to adopt the new standard in 1998; prior period
information will be restated. Management is evaluating the effect of this
statement on reported segment information.
The Corporation expects to incur significant costs during the next two to three
years to address the impact of the so-called Year 2000 problem on its
information systems. The Year 2000 problem, which is common to most businesses,
concerns the inability of information systems, primarily computer software
programs, to properly recognize and process date-sensitive information as the
year 2000 approaches. The Corporation currently believes it will be able to
modify or replace its affected systems in time to minimize any detrimental
effects on operations. While it is not possible at present to give an accurate
estimate of the cost of this work, the Corporation expects that such costs may
be material to the Corporation's results of operations in one or more fiscal
quarters or years, but will not have a material adverse impact on the long-term
results of operations, liquidity or consolidated financial position of the
Corporation.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The statements under "Management's Discussion and Analysis" and other
statements contained herein which are not historical facts are forward-looking
statements based on current expectations. The accuracy of such statements is
subject to a number of risks and assumptions. In addition to any such risks and
assumptions discussed elsewhere herein, factors that could cause or contribute
to actual results differing materially from such forward-looking statements
include the following: the realization of projected savings from the
Corporation's investments in systems, operations and cost reduction programs,
including the ability of management to return the Corporation's building
products distribution division to profitability; the Corporation's ability to
timely and efficiently address the Year 2000 problem; changes in the productive
capacity of other building products and pulp and paper producers; the effect on
the Corporation of changes in environmental and pollution control laws and
regulations; the general level of economic activity in U.S. and export markets;
variations in the level of housing starts; fluctuations in currency exchange
rates; the supply and cost of wood fiber; and other risks and assumptions
discussed in the Corporation's Form 10-Q dated March 31, 1997, the Corporation's
Form 10-K for the fiscal year ending December 31, 1996, and the Corporation's
Form 8-K dated October 17, 1996.
For a discussion of commitments and contingencies refer to Note 8 of the Notes
to Financial Statements.
<PAGE> 18
PART II - OTHER INFORMATION
---------------------------
GEORGIA-PACIFIC CORPORATION
June 30, 1997
Item 1. Legal Proceedings
The information contained in Note 8 "Commitments and Contingencies"
of the Notes to Financial Statements filed as part of this Quarterly
Report on Form 10-Q is incorporated herein by reference.
The Corporation is close to resolving an enforcement action brought by
the Georgia Environmental Protection Division against its Brunswick
pulp and paper mill for violations of the Clean Air Act that occurred
prior to 1992. These violations were discovered by the Corporation
and voluntarily disclosed to the State. The penalty and costs of a
supplemental environmental project (which will be undertaken to reduce
the penalty amount) are anticipated to total approximately $500,000.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Corporation was held on May
6, 1997. At the annual meeting, four directors were elected, and an
Amendment to the Outside Directors Stock Plan and the 1997 Employee
Stock Purchase Plan were each approved. Proxies for the meeting were
solicited pursuant to Regulation 14 under the Securities Exchange Act
of 1934. There was no solicitation in opposition to management's
nominees for election to the Board of Directors as listed in the
related proxy statement, and all of such nominees were elected. The
results of shareholder voting are as follows:
Election of Directors:
For Withheld
Jane Evans 75,979,527 857,163
Richard V. Giordano 76,031,737 804,953
M. Douglas Ivester 76,036,369 800,321
Louis W. Sullivan, M.D. 75,840,231 996,459
Approval of Amendment to the Outside Directors Stock Plan:
For Against Abstain Non-Votes
73,444,230 2,844,679 547,781 -0-
Approval of 1997 Employee Stock Purchase Plan:
For Against Abstain Non-Votes
63,688,479 12,736,588 411,623 -0-
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 4.5 1997 Employee Stock Purchase Plan.
Exhibit 10.11 Amendment to the Outside Directors Stock
Plan.
Exhibit 11 Statements of Computation of Per Share
Earnings.
Exhibit 27 Financial Data Schedule.
(b) No Current Reports on Form 8-K were filed by the Corporation
during the quarter ended June 30, 1997.
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 14, 1997 GEORGIA-PACIFIC CORPORATION
(Registrant)
by /s/John F. McGovern
----------------------------
John F. McGovern,
Executive Vice President -
Finance and Chief
Financial Officer
by /s/James E. Terrell
----------------------------
James E. Terrell,
Vice President and Controller
(Chief Accounting Officer)
<PAGE> 20
GEORGIA-PACIFIC CORPORATION
---------------------------
INDEX TO EXHIBITS
FILED WITH THE QUARTERLY REPORT
ON FORM 10-Q FOR THE
QUARTER ENDED JUNE 30, 1997
Number Description
- ------ -----------
4.5 1997 Employee Stock Purchase Plan. (1)
10.11 Amendment to the Outside Directors Stock Plan. (1)
11 Statements of Computation of Per Share Earnings. (1)
27 Financial Data Schedule. (1)
- -------------------------------
(1) Filed via Edgar
GEORGIA-PACIFIC CORPORATION
1997 EMPLOYEE STOCK PURCHASE PLAN
1. THE PLAN. This Plan shall be known as the "1997 Employee Stock
Purchase Plan". The purpose of this Plan is to permit employees of Georgia-
Pacific Corporation (the "Company") and of each Subsidiary, as hereinafter
defined, to obtain or increase a proprietary interest in the Company by
permitting them to purchase shares of the Company's Common Stock (as defined in
Section 12(a)) on a discount basis. The term "Subsidiary" shall mean:
(i) Each domestic corporation in which, on the
Offering Date hereinafter referred to, the Company owns at
least 51% of the total combined voting power of all classes
of stock, and
(ii) Each other domestic corporation in which, on the
Offering Date hereinafter referred to, a Subsidiary owns at
least 51% of the total combined voting power of all classes
of its stock; and
(iii) Each foreign corporation in which, on the
Offering Date hereinafter referred to, the Company owns at
least 51% of the total combined voting power of all classes
of stock and which is designated by the Board of Directors
of the Company at the date of its adoption of this Plan as a
participating company,
provided, however, that notwithstanding the foregoing, Georgia Temp, Inc. shall
not be included as a Subsidiary for purposes of this Plan.
2. THE OFFERING. The Company shall offer an aggregate of 2,000,000
authorized and unissued shares of its Common Stock for subscription in the
manner and on the terms hereinafter provided by those persons who are Eligible
Employees on September 2, 1997 (the "Offering Date"). The purchase price per
share shall be 85% of the mean between the high and low sales prices for shares
of the Common Stock on the Offering Date (as reported in the record of Composite
Transactions for New York Stock Exchange listed securities and printed in The
Wall Street Journal). The purchase price per share shall be subject to
adjustment in accordance with the provisions of Section 12(a).
3. ELIGIBLE EMPLOYEES. The "Eligible Employees" shall be those
persons, and only those persons, who are full-time employees of the Company or a
Subsidiary on the Offering Date, except any person who immediately prior to the
Offering Date would be deemed for purposes of Section 423(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"), to own stock possessing 5% or
more of the total combined voting power or value of all classes of stock of the
Company or any other corporation which constitutes a subsidiary corporation of
the Company within the meaning of that section; provided, however, that no such
Eligible Employee shall have the right to purchase any Common Stock under this
Plan unless such person is employed full-time by the Company or a Subsidiary
continuously from and including September 2, 1997 through and including November
14, 1997. For purposes of this Section 3, "full-time employees" shall mean all
employees of the Company or a Subsidiary except those (i) whose customary
employment is less than 20 hours per week or less than 5 months per year
(determined as of September 2, 1997), (ii) who are (as of September 2, 1997)
officers (other than Assistant Secretaries or Assistant Treasurers) of the
Company or (iii) who are other employees of the Company subject to the
provisions of Section 16 of the Securities Exchange Act of 1934 and such rules
and regulations as may be promulgated thereunder (all as amended from time to
time).
4. SUBSCRIPTIONS. (a) As soon as practicable after the Company has
satisfied the requirements of the applicable federal and state securities laws
relating to the offer and sale of Common Stock to Eligible Employees pursuant to
this Plan, each Eligible Employee shall (subject to the terms of this Plan) be
entitled to subscribe, in the manner and on the terms herein provided, for the
number of whole shares of Common Stock of the Company designated by him which
can be purchased, at the purchase price, with 24 monthly installments of not
less than $50 nor more than the lesser of $1,500 or 20% of his monthly rate of
compensation, determined as hereinafter provided. Anything herein to the
contrary notwithstanding, if any person entitled to subscribe for shares
hereunder would be deemed for the purposes of Section 423(b)(3) of the Code to
own stock (including the maximum number of shares for which such person would be
entitled to subscribe pursuant to the foregoing formula) possessing 5% or more
of the total combined voting power or value of all classes of stock of the
Company which are issued and outstanding immediately after the Offering Date,
the maximum number of shares for which such person shall be entitled to
subscribe pursuant to this Plan shall be reduced to that number which, when
added to the number of shares of Common Stock of the Company which such person
is so deemed to own (excluding the maximum number of shares for which such
person would be entitled to subscribe pursuant to the foregoing formula), is one
less than such 5%.
(b) In the case of each Eligible Employee who shall have been on the
payroll of the Company or a Subsidiary, or both, for the entire month of August
1997, the monthly rate of compensation shall be deemed to be the base salary
paid or accrued to such Eligible Employee for such month plus, in the case of
such an Eligible Employee whose compensation for such month was based wholly or
partly on a sales or incentive commission, (i) the amount of the Eligible
Employee's accrued commissions for August 1997 or (ii) if no accrual was made
for August 1997, an amount equal to the portion attributable to one-twelfth of
the amount of commissions accrued to such Eligible Employee for the year ended
December 31, 1996 on the books of the Company or the Subsidiary in accordance
with such arrangement. In the case of all other Eligible Employees, the monthly
rate of compensation shall be computed on the basis of the rate of base salary
in effect immediately prior to the Offering Date.
(c) This Plan shall be submitted for approval by shareholders of the
Company prior to February 4, 1998. Subscriptions shall be subject to the
condition that prior to such date this Plan shall be approved by the
shareholders of the Company in the manner contemplated by Section 423(b)(2) of
the Code. If not so approved prior to such date, this Plan shall terminate, all
subscriptions hereunder shall be canceled and be of no further force and effect,
and all persons who shall have subscribed for shares pursuant to this Plan shall
be entitled to the refund in cash within 30 days, with interest as provided in
Section 5(b), of all sums withheld from or paid by them pursuant to this Plan
and subscriptions hereunder.
(d) Subscriptions pursuant to this Plan shall be evidenced by the
completion and execution of a subscription agreement in the form provided by the
Company and the delivery thereof to the Company, at the place designated by the
Company, on or prior to November 14, 1997. Subscription agreements shall be
subject to termination or reduction through November 14, 1997, but only with the
written consent of the Company and, further, shall not be subject to termination
or modification after the full purchase price of all shares covered by such
agreement has been withheld or paid as provided herein.
(e) In the event that upon the termination of the subscription period
under this Plan the aggregate number of shares subscribed for pursuant to this
Plan shall exceed 2,000,000, then all subscriptions shall be reduced
proportionately, but disregarding fractions of shares, to the extent necessary
so that the aggregate number of shares covered by all such subscriptions
pursuant to this Plan will not exceed 2,000,000.
5. PAYMENT OF PURCHASE PRICE. (a) Except to the extent provided in
Sections 7, 8, 9 and 10, the purchase price of all shares purchased pursuant to
this Plan shall be paid in equal installments withheld from the subscribing
employee's compensation during the period of 24 consecutive calendar months
commencing with December 1997. The amount withheld shall be determined as
follows:
(i) in the case of employees paid weekly, 104
weekly installments, each equal to l/104th of the purchase
price per share, multiplied by the number of shares under
subscription;
(ii) in the case of employees paid bi-weekly, 52
bi-weekly installments, each equal to 1/52nd of the purchase
price per share, multiplied by the number of shares under
subscription;
(iii) in the case of employees paid semi-monthly,
48 semi-monthly installments, each equal to 1/48th of the
purchase price per share, multiplied by the number of shares
under subscription; and
(iv) in the case of employees paid monthly, 24
monthly installments each equal to 1/24th of the purchase
price per share, multiplied by the number of shares under
subscription.
For purposes of this Plan, the due date for any installment shall be the last
day of the payroll period to which it relates or, if later, the date on which
the payroll deduction for that period would normally be taken. "Timely"
payment of an installment not paid through payroll deduction shall mean payment
of the installment on or before the due date for that installment (payments are
deemed made only upon receipt). In the event of a change in an employee's
payment schedule, an appropriate change shall be made in the schedule of
installments to be withheld so that the portion of the purchase price not
theretofore withheld will be withheld in equal installments over the remainder
of such 24-month period. No amount shall be withheld or paid after November 30,
1999.
(b) Any person who shall become entitled to receive cash as a refund
pursuant to the provisions of this Plan shall be entitled to receive at the same
time, also in cash, simple interest on the amount of such refund computed from
the respective dates of withholding, at an annual rate equal to the 6-month
London Interbank Offered Rate for September 2, 1997 as reported in The Wall
Street Journal (rounded to the nearest 0.5%). Cash refunds which represent less
than the total amount theretofore withheld from and paid by the subscribing
employee shall be deemed to represent the amounts most recently so withheld and
paid, and such interest shall be computed accordingly. Except as provided in
this Section 5(b), no interest shall accrue or be payable on any amount withheld
from, paid by or refunded to any subscribing employee. No interest shall accrue
or be payable on the unpaid balance of the purchase price of any shares
subscribed for pursuant to this Plan.
6. ISSUANCE OF SHARES; DELIVERY OF STOCK CERTIFICATES. Shares
covered by a subscription agreement entered into pursuant to this Plan shall,
for all purposes, be deemed to have been issued and sold at the close of
business on the first day on which the full purchase price of all shares then
covered by such agreement shall have been withheld or paid as provided herein.
Prior to that time, no person shall have any rights as a holder of any shares
covered by such a subscription agreement. No adjustment shall be made for
dividends or other rights for which the record date is prior to that time except
as provided in Section 12(a). Within 30 days after the full purchase price of
all shares covered by a subscription agreement shall have been so withheld or
paid, the Company shall issue and deliver a stock certificate or certificates
therefor.
7. RIGHT TO TERMINATE SUBSCRIPTION. (a) Subject to the provisions
of Section 4(d), each subscribing employee shall have the right, at any time
before the full purchase price of all shares then covered by his subscription
agreement shall have been withheld or paid, to terminate his subscription
agreement by notice in writing delivered to the Company.
(b) A subscribing employee who shall terminate his subscription
agreement shall be entitled, at his option, (i) to the refund, in cash, within
30 days of the full amount theretofore withheld from and paid by him pursuant to
this Plan and such subscription agreement, with interest as provided in Section
5(b), or (ii) subject to approval of this Plan by the shareholders of the
Company as contemplated by Section 4(c), and except as provided in Section 14,
to receive within 30 days shares of Common Stock and cash as described in
Section 8(a)(i), and such shares shall be deemed to have been issued and sold by
the Company to the subscribing Eligible Employee pursuant to this Plan at the
close of business on the day on which the employee's notice was delivered to the
Company or, if the Plan is approved by the shareholders after such notice is
delivered, on the day of such approval by the shareholders.
8. RETIREMENT. (a) If a subscribing employee shall retire from
employment with the Company, all Subsidiaries and all of the members of the
Company's controlled group of corporations, he shall have, during the period of
90 days following the date of termination (but in no event after November 30,
1999) the rights provided in Section 7(b)(i) and the additional rights, subject
to the approval of this Plan by the shareholders of the Company as contemplated
by Section 4(c), and except as provided in Section 14, (i) to receive within 30
days the number of whole shares which can be purchased at the purchase price
under this Plan with the full amount theretofore withheld from and paid by him
pursuant to this Plan and his subscription agreement, together with cash in an
amount equal to any balance of the amount so withheld and paid (without interest
on such cash), and such shares shall be deemed to have been issued and sold by
the Company to the subscribing Eligible Employee pursuant to this Plan at the
close of business on the day on which the employee's election to exercise this
right was delivered to the Company or, if this Plan is approved by the
shareholders after such notice is delivered, on the day of such approval by the
shareholders, or (ii) to prepay in cash in a lump sum the unpaid balance of the
purchase price of the shares covered by his subscription agreement. Any such
retired employee who shall not make a timely election to exercise the foregoing
rights shall be deemed to have elected to receive shares of Common Stock and
cash as described in subparagraph (i) of this Section 8(a).
DEATH OR DISABILITY. (b) In the event of the death or
disability of a subscribing employee prior to the payment in full of the
purchase price of the shares subscribed for by him pursuant to this Plan, or the
death or disability of a retired employee during the period of 90 days following
the date of his retirement and before having exercised the rights provided or
referred to in Section 8(a), the disabled employee or the beneficiary of the
decedent, as the case may be, shall have, during the period of 90 days following
the occurrence of the disability or of the decedent's death (but in no event
after November 30, 1999), the rights provided or referred to in Section 8(a).
Any such disabled employee or beneficiary who shall not make a timely election
to exercise such rights shall be deemed to have elected to exercise the right to
receive shares of Common Stock and cash as described in Section 8(a)(i). For
purposes of this subsection (b), (i) a subscribing employee's date of
"disability" shall be the last day of his short-term medical leave period under
the Company's policy providing paid medical leave for salaried employees who are
medically unable to work because of injury or illness (or the last day of a
period determined as if - for these purposes only - the subscribing employee
were a salaried employee entitled to such short-term medical leave), and (ii) a
subscribing employee shall be deemed "disabled" at such time only if the
employee would be "totally disabled" pursuant to the standards set forth in the
Georgia-Pacific Corporation Salaried Long-Term Disability Plan whether or not he
is covered under that plan.
TERMINATION OF EMPLOYMENT OTHER THAN BY REASON OF RETIREMENT,
DEATH OR DISABILITY. (c) In the event of the voluntary or involuntary
termination of employment with the Company, all its Subsidiaries and all other
members of the Company's controlled group of corporations of a subscribing
employee other than by reason of retirement, death or disability, the employee
shall have, during a period of 90 days following the date of termination (but in
no event after November 30, 1999), the rights provided in Sections 7(b)(i) and
(ii). Any employee whose employment shall be terminated under circumstances
contemplated by this Section 8(c) who shall not make a timely election to
exercise the foregoing rights shall be deemed to have elected to exercise the
right provided in Section 7(b)(ii).
TRANSFER TO NON-PARTICIPATING MEMBER OF CONTROLLED GROUP OF
CORPORATIONS. (d) In the event that a subscribing employee is transferred to a
member of the Company's controlled group of corporations which is not a
Subsidiary, he may continue to participate in this Plan as if the transferee
employer were a Subsidiary.
9. TEMPORARY LAYOFF AND AUTHORIZED LEAVE OF ABSENCE. (a)
Installment payments shall be suspended during a period of temporary layoff or
authorized leave of absence without pay. If the subscribing employee shall
return to active service prior to November 30, 1999, installment payments shall
be commenced or resumed, and he shall be entitled to elect, within 10 days after
return to active service but in no event after September 30, 1997, either (i) to
make up the deficiency in his account by an immediate lump sum cash payment
equal to the aggregate of the installments which would have been withheld had he
not been absent, or (ii) to have future installments uniformly increased (to the
maximum possible extent) to adjust for such deficiency, or (iii) not to make up
such deficiency and to reduce the number of shares under subscription by the
number (increased to the next highest whole number) arrived at by dividing the
amount of the deficiency by the purchase price per share. An employee who does
not make a timely election pursuant to this Section 9(a) shall be deemed to have
elected the alternative described in clause (iii) hereof.
(b) For purposes of this Plan, a subscribing employee shall be deemed
to be terminated from his employment with the Company, any Subsidiary or any
member of the Company's controlled group of corporations if such layoff or leave
of absence exceeds a period of 90 consecutive days (unless the employee's right
to reemployment is guaranteed either by statute or by contract), and, in such
case, such employee shall have, effective as of the expiration of such 90-day
period, only those rights provided in Section 8(c) hereof.
10. INSUFFICIENCY OF PAY TO PERMIT WITHHOLDING OF INSTALLMENT. (a)
If in any payroll period, for any reason other than temporary layoff or
authorized leave of absence without pay, a subscribing employee shall receive no
pay or his pay shall be insufficient (after all other proper deductions) to
permit withholding of his installment payment, the employee may make payment of
such installment in cash when due.
(b) The Company shall treat any failure by a subscribing employee to
make timely payment in cash of any installment which cannot be withheld because
of the circumstances contemplated by Section 10(a) as cause for termination of
his subscription agreement. Such termination shall be effected by the Company's
mailing notice to that effect to such employee at his last known business or
home address, and upon the mailing of such a notice, such employee's rights
thereafter shall be limited to receive shares of Common Stock and cash as
described in Section 8(a)(i).
11. HARDSHIP WITHDRAWAL DISTRIBUTIONS UNDER CODE SECTION 401(k)
PLANS. If a subscribing employee who participates in a qualified retirement
plan subject to Code Section 401(k) (or the corresponding section of any
revision of - or successor to - the Code dealing with cash or deferred
arrangements) receives one or more hardship withdrawal distributions pursuant to
the provisions of such plan, his installment payments pursuant to his
subscription agreement shall be suspended for a period of twelve (12)
consecutive months following the month in which the most recent such
distribution is received. The employee's installment payments will
automatically resume in accordance with the terms of his subscription agreement
beginning with the first month after the end of the suspension period, provided
however that no resumption of payments will occur if the suspension period ends
after November 30, 1999. Installments not paid during the suspension period may
not be made up, and the employee's subscription shall automatically be reduced
to the extent of such installments.
12. DEFINITION OF COMMON STOCK; EFFECT OF CERTAIN TRANSACTIONS. (a)
The term "Common Stock" as used in this Plan refers to shares of the Common
Stock of the Company as presently constituted and any shares of Common Stock
which may be issued by the Company in exchange for or reclassification thereof.
If, and whenever, at any time after the Offering Date and prior to the issue and
sale by the Company of all of the shares of Common Stock covered by subscription
agreements entered into pursuant to this Plan, the Company shall effect a
subdivision of shares of Common Stock or other increase (by stock dividend or
otherwise) of the number of shares of Common Stock outstanding, without the
receipt of consideration by the Company or another corporation in which the
Company is financially interested and otherwise than in discharge of the
Company's obligation to make further payment for assets theretofore acquired by
it or such other corporation or upon conversion of stock or other securities
issued for consideration, or shall reduce the number of shares of Common Stock
outstanding by a consolidation of shares, then (i) in the event of such an
increase in the number of such shares outstanding, the number of shares of
Common Stock then subject to subscription agreements entered into pursuant to
this Plan shall be proportionately increased and the purchase price per share
shall be proportionately reduced, and (ii) in the event of such a reduction in
the number of such shares outstanding, the number of shares of Common Stock then
subject to subscription agreements entered into pursuant to this Plan shall be
proportionately reduced and the purchase price per share shall be
proportionately increased. Except as provided in this Section 12(a), no
adjustment shall be made under this Plan or any subscription agreement entered
into pursuant to this Plan by reason of any dividend or other distribution
declared or paid by the Company.
(b) Anything in this Plan or in any subscription agreement entered
into pursuant hereto to the contrary notwithstanding (except as provided in
Section 14), each subscribing employee shall have the right immediately prior to
any merger or consolidation of which the Company is not to be the survivor, or
the liquidation or dissolution of the Company, to elect (i) to receive within 30
days the number of whole shares which can be purchased at the purchase price
under this Plan with the full amount theretofore withheld from or paid by him
pursuant to this Plan and his subscription agreement, together with cash in an
amount equal to any balance of the amount so withheld and paid (without interest
on such cash), (ii) to prepay in cash in a lump sum the unpaid balance of the
purchase price of the shares covered by his subscription agreement or (iii) to
receive cash plus interest as described in Section 7(b)(i). The subscription
agreement of any subscribing employee who shall not make such an election shall
terminate upon such merger, consolidation, liquidation or dissolution and his
rights shall be those provided in clause (i) of this Section 12(b), unless the
surviving corporation in its absolute and uncontrolled discretion shall offer
such subscribing employee the right to purchase its shares in substitution for
his rights under such subscription and he shall accept such offer.
13. GENERAL DEFINITIONS. For purposes of this Plan: (i) the term
"retire" shall refer to a subscribing employee's voluntary or involuntary
termination at a time when he has attained age 65 or has attained age 55 and has
accrued 10 years of service for vesting purposes under the Company's qualified
retirement plans covering him, provided that termination for Just Cause shall
not be considered retirement under this Plan; (ii) the "Company's controlled
group of corporations" shall be those corporations which at a given date are
part of the Company's "controlled group of corporations" as defined in Code
Section 1563(a), except that in making such determinations, the phrase "more
than 50 percent" will be substituted for "at least 80 percent" in Section
1563(a)(1) and (a)(2)(A); (iii) "termination" or "retirement" shall be deemed to
occur on the last day worked and for purposes of this Plan shall include a
situation in which a member of the Company's controlled group of corporations
ceases to be such by reason of change in the ownership of its stock; and (iv)
"Just Cause" shall mean any of the following: the willful and continued failure
of a subscribing employee to perform satisfactorily the duties consistent with
his title and position reasonably required of him by the Board or supervising
management (other than by reason of incapacity due to physical or mental
illness), the commission by a subscribing employee of a felony, the perpetration
by a subscribing employee of a dishonest act or common law fraud against the
Company, any of its Subsidiaries or any member of its controlled group of
corporations, or any other willful act or omission which could reasonably be
expected to expose the Corporation to civil liability under the law of the
applicable jurisdiction or is otherwise injurious to the financial condition or
business reputation of the Company, any of its Subsidiaries or any member of its
controlled group of corporations.
14. LIMITATION ON RIGHT TO PURCHASE. Anything in this Plan to the
contrary notwithstanding, (i) no shares may be purchased under this Plan to the
extent not permitted by Section 423(b)(8) of the Code and (ii) if at any time
when any person is entitled to complete the purchase of any shares pursuant to
this Plan, after taking into account such person's rights, if any, to purchase
Common Stock of the Company under all other stock purchase plans of the Company
and any Subsidiary, the result would be that during the then current calendar
year, such person would have become entitled to purchase during such calendar
year under this Plan and all such other plans a number of shares of Common Stock
which would exceed the maximum number of shares permitted by the provisions of
Section 423(b)(8) of the Code, then the number of shares which such person shall
be entitled to purchase pursuant to this Plan shall be reduced by the number
which is one more than the number of shares which represents such excess.
15. NON-ASSIGNABILITY; BENEFICIARY OR PERSONAL REPRESENTATIVE OF
DECEASED EMPLOYEES. (a) None of the rights of an employee under this Plan or
any subscription agreement entered into pursuant thereto shall be transferable
by such employee otherwise than by will or the laws of descent and distribution
and, during the lifetime of such employee, such rights shall be exercisable only
by him; provided, however, that each subscribing employee may designate a
beneficiary who, upon the employee's death, shall be entitled to exercise such
rights as are set forth in Section 8(b) hereof. In the event such beneficiary is
deceased or the Company is unable to locate such beneficiary after the death of
the subscribing employee, or should the employee fail to designate a
beneficiary, then the personal representative of such employee shall be entitled
to exercise the rights set forth in Section 8(b). Any attempted transfer not
permitted by this Plan or by the subscription agreements shall be void, and the
Company shall treat such transfer as cause for termination of the subscription
agreements of the transferor and, if the transferee is then a participant in the
Plan, the transferee. Notice of termination shall be effected as provided in
Section 10(b) hereof, and the rights of such transferees and transferors shall
be limited to the refund in cash without interest of the full amount theretofore
withheld from and paid by each such subscribing employee pursuant to this Plan
and their respective subscription agreements.
(b) References herein, other than in Section 3 hereof, to employees
shall be deemed to include the beneficiary of a deceased employee (or the
personal representative of such deceased employee if such beneficiary is
deceased, if the Company is unable to locate such beneficiary, or if the
employee fails to designate a beneficiary).
16. SHARES NOT SUBSCRIBED FOR DURING THE OFFERING PERIOD OR
SUBSCRIBED FOR BUT NOT PURCHASED. Shares referred to herein which shall not be
subscribed for, and shares which were subscribed for but thereafter cease to be
subject to a subscription agreement hereunder, shall be free from any
reservation for use in connection with this Plan and shall have the same status
as all other unreserved authorized but unissued shares.
17. CONSTRUCTION; ADMINISTRATION. All questions with respect to the
construction and application of the Plan and subscription agreements entered
into pursuant thereto and the administration of this Plan shall be settled by
the determination of the Board of Directors of the Company (which term as used
herein shall include the Compensation Committee of such Board) or of one or more
other persons designated by it (or the Committee), which determinations shall be
final, binding and conclusive on the Company and all employees and other
persons.
18. NOTICE. Any election or other notice required to be given by a
subscribing employee under this Plan shall be in writing and shall be delivered
personally or by mail, postage prepaid, addressed to the place designated by the
Company for delivery of the subscription agreement. If an election is made which
requires the payment of a sum of money, such sum shall accompany the written
election.
19. AMENDMENT. The Plan may be amended by the Board of Directors in
any way which shall not adversely affect the rights of employees under
subscription agreements theretofore entered into pursuant hereto.
Georgia-Pacific Corporation
Outside Directors Stock Plan
AMENDMENT NO. 1
THIS AMENDMENT to the Georgia-Pacific Corporation Outside Directors Stock
Plan (the "Plan"), approved by the Board of Directors of Georgia-Pacific
Corporation (the "Board") and effective as stated below;
W I T N E S S E T H:
WHEREAS, the Plan was originally adopted by resolution of the Board dated
March 17, 1995 and was approved by the shareholders of Georgia-Pacific
Corporation at their meeting on May 2, 1995;
WHEREAS, pursuant to Section 4.6 of the Plan, the Board has retained the
right to amend or terminate the Plan at any time, subject to certain stated
restrictions designed to meet the requirements of Rule 16b-3 of the Securities
Exchange Act of 1934 (the "Rule"), as then in effect; and
WHEREAS, the Board now desires to amend the Plan to provide that an Outside
Director who is not renominated may vest in his/her benefits under this Plan, to
increase the size of the annual share grants specified in the Plan (to reflect
the cessation of further benefit accruals under the Georgia-Pacific Corporation
Directors Retirement Program and the elimination of meeting fees formerly paid
to Directors), to increase the number of shares of Stock available for grants
under the Plan, to provide for special grants conditioned upon the waiver of
certain retirement benefits, to provide additional distribution procedures upon
the lapse of restrictions and to modify the amendment provisions of the Plan to
reflect changes to the Rule adopted after the initial adoption of this Plan;
NOW, THEREFORE, in consideration of the premises, the Board hereby amends
the Plan as follows, effective as stated below:
1. The Plan is amended by restating Section 2.5 in its entirety as
follows:
"2.5. RETIREMENT. The term `Retirement' shall mean the
termination of an Outside Director's status as such (a) because the
Outside Director has reached the mandatory retirement age for a
director under G-P's policy for directors as in effect when he or she
reaches such age, (b) because the Outside Director is not renominated
by the Governance Committee for an additional term as a Director, (c)
due to the Outside Director's taking a position with, or providing
services to, a governmental, charitable or educational institution
whose policies prohibit the Outside Director from continuing to serve
as a director for G-P or (d) due to a determination by the Plan
Administrator (as defined in Section 4.1) that the Outside Director
cannot continue as such without violating applicable law."
2. The Plan is amended by restating Section 3.1 in its entirety as
follows:
"3.1 AVAILABLE SHARES. G-P shall make 200,000 shares of Stock
available for Stock grants under this Plan from G-P's authorized but
unissued Stock."
3. Section 3.2 of the Plan is amended as follows:
(a) By amending subsection (b) in its entirety to read as
follows:
"(B) MAY 15, 1996. Each person who is an Outside Director on
May 15, 1996 shall be granted a number of shares of Stock subject to
the terms and conditions set forth in this Plan, which number shall be
determined by dividing $15,000 by the Market Price of a share of Stock
on such date and rounding the resulting number to the nearest whole
share of Stock."
(b) By adding a new subsection (c) as follows at the end of the
present provision
"(C) MAY 15, 1997 AND THEREAFTER. Each person who is an Outside
Director on May 15, 1997 or on May 15 of any subsequent year shall (so
long as a sufficient number of shares of Stock remain available for
Stock grants under Section 3.1) be granted a number of shares of Stock
subject to the terms and conditions set forth in this Plan, which
number shall be determined by dividing $40,000 by the Market Price of
a share of Stock on such date and rounding the resulting number to the
nearest whole share of Stock."
4. The Plan is amended by inserting the following new Section 3.2A
between Sections 3.2 and 3.3:
"3.2A. SPECIAL GRANT UPON CONVERSION OF RETIREMENT BENEFIT.
In the event that, pursuant to Section 8.3 of the Georgia-Pacific
Corporation Directors Retirement Program (the "Retirement Plan"), an
Outside Director participating in this Plan waives in writing all
rights with respect to his/her accrued retirement benefit under the
Retirement Plan prior to May 15, 1997, such Outside Director shall
receive on May 15, 1997 a special grant of Stock under this Plan in
consideration of such waiver. The number of shares of Stock
comprising such special grant shall be the number of shares computed
in accordance with the procedures specified in Section 8.3 of the
Retirement Plan, and such shares shall be subject to all the same
terms and conditions as any other shares granted under this Plan.
5. The Plan is amended by adding the following new Section 3.6 at the end
of Section 3 of the Plan:
"3.6. DISTRIBUTION OF SHARES UPON LAPSE OF RESTRICTION. Upon
the termination of an Outside Director's Restriction Period, the
shares of Stock granted to him/her shall be issued to him/her without
any restrictive legend relating to this Plan, provided, however, that
an Outside Director may elect to have his/her Stock distributed in
three equal annual installments, the first of which shall be made on
the date his/her Restriction Period ends with an additional
installment on each of the next two anniversaries of that date. The
amount of the first installment shall be 1/3 of the shares of Stock
attributable to all grants theretofore made to the Outside Director
under this Plan (rounded up to the next whole share); the amount of
the second installment shall be 1/2 of the then remaining shares of
Stock attributable to all grants theretofore made to the Outside
Director under this Plan (rounded up to the next whole share); and the
amount of the last installment shall be all the then remaining shares
of Stock attributable to all grants theretofore made to the Outside
Director under this Plan (rounded up to the next whole share). Stock
subject to a 3-year distribution election under this Section 3.6 and
not yet distributed will continue to be subject to the terms and
conditions of this Plan until distributed. An election under this
Section 3.6 must be in writing in a form acceptable to the Plan
Administrator and must be actually received by the Plan Administrator
prior to the date on which the Outside Director's service on the Board
ends. Any such election may be modified at any time during the period
during which the election may be made, but becomes irrevocable upon
the expiration of the election period. In the event of the death of
the electing Outside Director under circumstances requiring a
distribution or a continuing distribution of Stock from this Plan on
his/her behalf, such distribution shall be made to the Outside
Director's estate unless the Outside Director has specified in writing
(on a form acceptable to and actually received by the Plan
Administrator prior to his/her death) an alternative beneficiary."
6. The Plan is amended by restating Section 4.1 in its entirety as
follows:
"4.1. ADMINISTRATION. The Governance Committee of G-P's
Board of Directors (or any successor to such committee) shall be the
administrator of this Plan and shall have the power to interpret this
Plan and be responsible for the operation and administration of this
Plan. The Governance Committee shall interpret this Plan and operate
and administer this Plan in a manner which shall qualify the grants of
Stock made to Outside Directors under this Plan for an exemption under
Rule 16b-3 promulgated under Section 16(b) of the Securities Exchange
Act of 1934, as amended from time to time."
7. The Plan is amended by restating Section 4.6 in its entirety as
follows:
"4.6. AMENDMENT. The Board of Directors of G-P may amend
this Plan from time to time, provided, however, that no such amendment
shall be made to this Plan more often than once every six months
(other than to comply with the requirements of the Internal Revenue
Code of 1986 or other applicable law, as amended, and any related
rules or regulations), and no amendment shall become effective absent
the approval of G-P's shareholders if the effect of such amendment
would be to
(a) increase the total number of securities which may
be issued under this Plan, or
(b) materially modify the requirements as to
eligibility for participation in this Plan."
8. This Amendment shall be null and void if the shareholders of Georgia-
Pacific Corporation fail to approve this Amendment at a duly called meeting of
such shareholders to be held in May 1997. Subject to such approval by the
shareholders, this Amendment shall be effective from and after the date of such
approval. Except as hereinabove amended and modified, the Plan as originally
effective March 17, 1995 shall remain in full force and effect.
<TABLE>
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF PER SHARE EARNINGS (Unaudited)
(Millions, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income
- -------------
Income before extraordinary item $ 27 $ 10 $ 117 $ 60
Extraordinary item, net of tax - (5) - (5)
-------- ------- -------- --------
Net income $ 27 $ 5 $ 117 $ 55
======== ======= ======== ========
Weighted Average Shares
- -----------------------
Common shares outstanding,
net of restricted stock 91,162 90,510 91,071 90,495
Add - shares assumed to
be issued under long-term
incentive (restricted stock),
stock option and stock
purchase plans at the average
market price 397 603 410 584
-------- -------- -------- --------
Primary shares 91,559 91,113 91,481 91,079
-------- -------- -------- --------
Add - additional shares assumed
to be issued under long-term
incentive (restricted stock),
stock option and stock
purchase plans at quarter end
market price (if higher than
average market price) 462 - 533 -
-------- -------- -------- --------
Fully diluted shares 91,624 91,113 91,604 91,079
======== ======= ======== ========
Income Per Share
- -----------------------
Income before extraordinary item $ .30 $ .11 $ 1.28 $ .66
Extraordinary item,net of tax - (.05) - (.05)
-------- -------- -------- --------
Net income $ .30 $ .06 $ 1.28 $ .61
======== ======= ======== ========
Income Per Share - Primary
- ---------------------------------
Income before extraordinary item $ .29 $ .11 $ 1.28 $ .66
Extraordinary item, net of tax - (.05) - (.05)
-------- -------- -------- --------
Net income $ .29 $ .06 $ 1.28 $ .61
======== ======= ======== ========
Income Per Share - Fully Diluted
- ---------------------------------------
Income before extraordinary item $ .29 $ .11 $ 1.28 $ .66
Extraordinary item, net of tax - (.05) - (.05)
-------- -------- -------- --------
Net income $ .29 $ .06 $ 1.28 $ .61
======== ======= ======== ========
</TABLE>
A single presentation of income (loss) per share is made on the Statements of
Income because the effects of assuming issuance of common shares under long-term
incentive, stock option and stock purchase plans are either antidilutive or
insignificant.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF GEORGIA-PACIFIC CORPORATION FOR THE SIX MONTHS ENDED
JUNE 30, 1997."
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 6
<SECURITIES> 0
<RECEIVABLES> 1,398
<ALLOWANCES> 12
<INVENTORY> 1,350
<CURRENT-ASSETS> 2,921
<PP&E> 13,914
<DEPRECIATION> 7,497
<TOTAL-ASSETS> 13,071
<CURRENT-LIABILITIES> 2,511
<BONDS> 4,254
0
0
<COMMON> 73
<OTHER-SE> 3,491
<TOTAL-LIABILITY-AND-EQUITY> 13,071
<SALES> 6,471
<TOTAL-REVENUES> 6,471
<CGS> 5,112
<TOTAL-COSTS> 5,112
<OTHER-EXPENSES> 467
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 241
<INCOME-PRETAX> 205
<INCOME-TAX> 88
<INCOME-CONTINUING> 117
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117
<EPS-PRIMARY> 1.28
<EPS-DILUTED> 1.28
</TABLE>
