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EXHIBIT 99.1
GEORGIA-PACIFIC
133 Peachtree Street Northeast
Atlanta, Georgia 30303
(404) 652-4000
News from Georgia-Pacific
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Release No: C-1617
Contact: Ken Haldin
(404) 652-6098
Greg Guest
(404) 652-4739
Oct. 18, 2000
GEORGIA-PACIFIC GROUP REPORTS THIRD QUARTER 2000 EARNINGS
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ATLANTA -- Georgia-Pacific Group (NYSE:GP), the pulp, paper and building
products business of Georgia-Pacific Corp., today reported net income, excluding
one-time unusual charges, of $145 million (85 cents diluted earnings per share)
for the three months ended Sept. 30, 2000, compared with net income of $230
million ($1.31 diluted earnings per share) for the 1999 third quarter.
Including one-time unusual charges related to the shutdown and sale of
certain building products businesses, net income for the third quarter 2000 was
$130 million, or 76 cents diluted earnings per share.
Quarterly results for 2000 were marked by continued weakness in building
products businesses, improved operating profits in the group's pulp and paper
businesses compared to the previous year's third quarter, and continued solid
operating profits from the group's paper distribution subsidiary, Unisource
Worldwide.
Within Georgia-Pacific Group's pulp and paper businesses, the
containerboard and packaging segment reported third quarter 2000 operating
profits of $141 million versus $83 million in last year's third quarter - an
increase of 70 percent. The group's pulp and paper segment, comprised of its
pulp, bleached board, communication papers and tissue businesses, reported
operating profits of $184 million compared with $74 million in the same quarter
last year. This represented an improvement of 149 percent.
Unisource Worldwide, the group's paper distribution segment, reported
operating profits of $43 million in the third quarter of 2000, which was
identical to third quarter 1999 results.
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As anticipated, operating profits in Georgia-Pacific Group's building
products segment declined significantly - to $40 million in the latest quarter
compared with $333 million for the same period last year, which was then a
quarterly record. Excluding one-time unusual charges related to the shutdown and
sale of certain building products businesses, third quarter 2000 operating
profits for this segment were $64 million. The group's building products
distribution segment recorded an operating profit for the latest quarter of $1
million, which was lower than the operating profit of $4 million recorded a year
ago.
Net sales for the 2000 third quarter were $5.3 billion compared with $5.5
billion for the same period last year. The group generated cash from operations
of approximately $652 million, including approximately $250 million from working
capital reductions, and made capital expenditures for property, plant and
equipment of $208 million during the quarter.
For the first nine months of 2000, net income was $530 million ($3.07
diluted earnings per share) versus net income of $541 million ($3.07 diluted
earnings per share) in 1999.
"While our third quarter results reflect the obvious weakness in building
products markets, the paper segments - particularly our containerboard, pulp and
bleached board, and tissue businesses - generated results that lifted the
group's overall quarterly performance," said A.D. "Pete" Correll, Georgia-
Pacific Corp. chairman and chief executive officer.
"Significantly lower prices for structural panels and historically low
lumber prices, coupled with declines in gypsum prices and volume, led to a very
difficult quarter for our building products manufacturing and distribution
businesses. These segments continue to be adversely affected by oversupplied
markets and weaker demand," Correll said.
"Highlights during the quarter included our containerboard and packaging
results, in which we benefited from higher prices for linerboard and medium
compared to last year in the same period," he said. "Pulp prices were up more
than 30 percent across the board compared to the previous third quarter. While
our communication papers results were higher due to improved pricing, shipments
were somewhat lower. Our tissue business, which includes the Wisconsin Tissue
assets added at the beginning of last year's fourth quarter, continues to
deliver solid operating profits. Tissue operating profits were 92 percent
greater than last year's comparable quarter. Our Unisource business has become a
reliable generator of operating profits that benefit the group significantly.
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"Going forward, we continue to expect that the slowing domestic economy
will negatively affect conditions in building products markets, which simply
have too much supply," Correll said. "Consistent with our ongoing strategy to
ensure we do not build inventories, we continue to take downtime at selected
mills in our building products businesses. This includes suspending production
for indefinite periods at three structural panels operations, representing
approximately 10 percent of our panels capacity, and five lumber facilities,
representing more than 20 percent of that business' capacity. Throughout our
operations, we are committed to running so that production does not exceed
orders.
"At the same time, we are working diligently on the overall portfolio
transformation under way at Georgia-Pacific as we move up the value chain to
become closer to our customers and consumers. With divestiture planning
continuing on course and the anticipated closing of our Fort James acquisition
later this year, our strategic direction remains firm," Correll concluded.
Georgia-Pacific Corp. also today provided consolidated results for
Georgia-Pacific Group and The Timber Company for the 2000 third quarter. The
corporation recorded consolidated net income of $162 million for the three
months ended Sept. 30, 2000, compared with consolidated net income of $279
million for the 1999 third quarter. For the first nine months of 2000, the
corporation recorded consolidated net income of $636 million versus consolidated
net income of $736 million in the first nine months last year.
Georgia-Pacific Corp.'s common stock was redesignated in December 1997 to
reflect separately the performance of the corporation's pulp, paper and building
products businesses, which are now known as Georgia-Pacific Group. A separate
class of common stock reflects the performance of the corporation's timber
operating group, which is publicly traded as The Timber Company (NYSE:TGP).
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Certain statements contained in this release, including statements regarding
anticipated levels of demand and pricing for the group's segments and future
economic conditions, are forward-looking statements (as such term is defined
under the Private Securities Litigation Reform Act of 1995) based on current
expectations. The accuracy of such statements is subject to a number of risks,
uncertainties and assumptions including, but not limited to, the effect of
general economic conditions on the demand for pulp, paper and building products,
the corresponding level of demand for wood fiber, the effect of changes in the
productive capacity of manufacturers of competitive products, and other factors
listed in Georgia-Pacific Corp.'s Securities and Exchange Commission filings,
including its reports on Form 10-K for the year ended January 1, 2000, and Form
10-Q for the quarters ended April 1, 2000, and July 1, 2000.
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A tabulation of results for Georgia-Pacific Group follows:
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GEORGIA-PACIFIC GROUP
Operating Highlights
(In millions, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, 2000 October 2, 1999
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<S> <C> <C>
NET SALES TO UNAFFILIATED CUSTOMERS
Building products $ 856 $1,016
Building products distribution 1,065 1,346
Containerboard and packaging 640 613
Pulp and paper 1,003 809
Paper distribution 1,744 1,698
Other 2 1
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Total net sales $5,310 $5,483
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OPERATING PROFITS
Building products $ 40 $ 333
Building products distribution 1 4
Containerboard and packaging 141 83
Pulp and paper 184 74
Paper distribution 43 43
Other (69) (51)
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Total operating profit 340 486
Interest expense (128) (116)
Provision for income taxes (82) (140)
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Net income $ 130 $ 230
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Basic per share:
Net income per share $ 0.76 $ 1.34
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Diluted per share:
Net income per share $ 0.76 $ 1.31
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Average number of shares outstanding:
Basic 170.6 171.4
Diluted 171.1 175.9
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</TABLE>
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GEORGIA-PACIFIC GROUP
Operating Highlights
(In millions, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, 2000 October 2, 1999
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<S> <C> <C>
NET SALES TO UNAFFILIATED CUSTOMERS
Building products $ 2,773 $ 2,953
Building products distribution 3,413 3,761
Containerboard and packaging 1,918 1,708
Pulp and paper 2,871 2,522
Paper distribution 5,166 1,698
Other 3 3
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Total net sales $16,144 $12,645
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OPERATING PROFITS
Building products $ 404 $ 945
Building products distribution 22 57
Containerboard and packaging 413 194
Pulp and paper 461 113
Paper distribution 122 43
Other (178) (163)
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Total operating profit 1,244 1,189
Interest expense (398) (298)
Provision for income taxes (316) (350)
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Net income $ 530 $ 541
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Basic per share:
Net income per share $ 3.10 $ 3.15
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Diluted per share:
Net income per share $ 3.07 $ 3.07
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Average number of shares outstanding:
Basic 171.0 171.9
Diluted 172.8 176.2
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</TABLE>
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Notes to Operating Highlights:
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1. During the third quarter of 2000, Georgia-Pacific Group incurred $24 million
($15 million after tax, or $0.09 diluted earnings per share) of one-time
unusual charges related to the shutdown and sale of certain building
products businesses.
2. During the first quarter of 2000, Georgia-Pacific Group sold certain
containerboard and packaging assets resulting in a pre-tax gain of $24
million ($15 million after tax, or $0.09 diluted earnings per share).
3. At the end of the second quarter of 1999, the corporation acquired
approximately 91% of the outstanding shares of Unisource Worldwide, Inc.
("Unisource"), the largest independent marketer and distributor of printing
and imaging paper and supplies in North America. Unisource's results of
operations were consolidated with those of the corporation beginning July 4,
1999.
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