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EXHIBIT 99.2
THE TIMBER COMPANY
100 Peachtree Street Northwest
Suite 2650
Atlanta, Georgia 30303
(404) 586-0275
News from The Timber Company
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Release No: C-1618
Contact: Ken Haldin
(404) 652-6098
Greg Guest
(404) 652-4739
Oct. 18, 2000
THE TIMBER COMPANY REPORTS THIRD QUARTER EARNINGS
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ATLANTA -- The Timber Company (NYSE:TGP) today reported net income of $32
million (40 cents diluted earnings per share) for the three months ended Sept.
30, 2000, compared with 1999 third quarter net income of $49 million (59 cents
diluted earnings per share). Results for last year include $8 million (10 cents
diluted earnings per share) from timberland operations in California that were
divested in December 1999.
For the first nine months of 2000, The Timber Company's net income was $106
million ($1.30 diluted earnings per share) compared with net income of $145
million ($1.70 diluted earnings per share) in the same period last year, which
excluded after-tax gains on the sales of timberlands in Maine and New Brunswick
of $50 million (59 cents diluted earnings per share), but included $20 million
(24 cents diluted earnings per share) from operating results of those forests
and the California forests that were sold in 1999.
Third quarter 2000 operating profits were $64 million compared with third
quarter 1999 operating profits of $95 million, which included $12 million from
the California operations. Total sales for third quarter 2000 were $95 million
versus $139 million in the same quarter a year ago.
"The Timber Company achieved solid third quarter results despite the
difficult operating environment its customers faced and ample timber supplies in
many key markets," said A.D. "Pete" Correll, Georgia-Pacific Corp. chairman and
chief executive officer. "It continued to generate stable cash flow and
earnings under conditions dramatically different than a year ago."
Donald L. Glass, president and chief executive officer of The Timber
Company, said, "Our solid third quarter performance demonstrates the relative
stability of our business. With prices for structural panels declining more
than 25 percent and lumber prices down more than 20 percent versus last year,
Southern sawtimber prices demonstrated their relative stability averaging only 3
to 5 percent lower.
"As planned, log sales volumes increased modestly, mostly in pulpwood,
despite sporadic mill downtime in many of our timber basins and continued dry
conditions that increased timber accessibility. Additionally, our income from
tactical land sales in the third quarter was lower than planned as some closings
were postponed until fourth quarter," Glass continued.
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"Looking ahead, we already are seeing the expected seasonal firming in
prices for both sawtimber and pulpwood as our customers begin building their
winter log inventories. We are projecting harvest volumes for the year to fall
within the 12 million- to 13 million-ton range we originally planned. We
continue to aggressively cultivate several new opportunities for additional
income from non-timber sources. We also expect income from our tactical land
sales program to be exceptionally strong in the fourth quarter.
"Overall, we believe the fourth quarter will be our strongest this year,"
Glass concluded.
The Timber Company continued to make progress during the quarter toward its
pending merger with Plum Creek Timber. The private letter ruling request was
filed with the Internal Revenue Service on Aug. 31, and a preliminary S-4 was
filed with the Securities and Exchange Commission earlier this month. The two
companies currently are working on integration issues and preparation for
closing, which still is scheduled to occur by the end of first quarter 2001.
Additional financial and operating statistics can be found on The Timber
Company's website (www.thetimbercompany.com). Headquartered at Atlanta, The
Timber Company is a separate operating group of Georgia-Pacific Corp. and its
performance is reflected in one of the corporation's two common stocks. The
Timber Company manages 4.8 million acres of timberland in the United States and
sells timber and wood fiber to industrial wood users, including Georgia-Pacific
Group (NYSE:GP).
Also today, Georgia-Pacific Corp. provided consolidated results for The
Timber Company and Georgia-Pacific Group 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.
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Certain statements contained in this release, including statements regarding
sawtimber and pulpwood demand and pricing, 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 global economic conditions on the demand for timber,
particularly the strength of the pulp, paper and building products markets, the
effect of any material changes in the available supply of timber, including the
levels of harvests from public lands, the effect of government, legislative and
environmental restrictions on the harvesting of private timberlands, 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 The Timber Company follows:
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THE TIMBER COMPANY
Operating Highlights
(In millions, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, 2000 October 2, 1999
<S> <C> <C>
------------------------------------------------------------------------------------------------
NET SALES
Timber - Georgia-Pacific Group $ 63 $ 90
Timber - Third parties
Delivered 8 10
Stumpage 19 32
Other 5 7
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Total net sales $ 95 $ 139
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Operating profits $ 64 $ 95
Interest expense (12) (17)
Provision for income taxes (20) (29)
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Net income $ 32 $ 49
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Basic per share:
Net income per share $0.40 $0.59
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Diluted per share:
Net income per share $0.40 $0.59
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Average number of shares outstanding:
Basic 79.9 82.8
Diluted 81.0 83.4
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</TABLE>
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THE TIMBER COMPANY
Operating Highlights
(In millions, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, 2000 October 2, 1999
<S> <C> <C>
------------------------------------------------------------------------------------------------
NET SALES
Timber - Georgia-Pacific Group $ 188 $ 265
Timber - Third parties
Delivered 30 36
Stumpage 72 100
Other 9 17
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Total net sales $ 299 $ 418
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Operating profits $ 207 $ 287
Other income - 84
Interest expense (33) (52)
Provision for income taxes (68) (124)
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Net income $ 106 $ 195
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Basic per share:
Net income per share $1.31 $2.30
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Diluted per share:
Net income per share 1.30 $2.29
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Average number of shares outstanding:
Basic 80.9 84.6
Diluted 81.4 85.1
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</TABLE>
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Notes to Operating Highlights
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1. During the second quarter of 1999, The Timber Company sold approximately
390,000 acres of timberlands in the Canadian province of New Brunswick and
approximately 440,000 acres of timberlands in Maine resulting in a pretax
gain of $84 million ($50 million after tax, or $0.59 diluted earnings per
share).
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