8-K 1 d8k.htm FORM 8-K Form 8-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) May 7, 2004

 

 

LOGO

 

GEORGIA-PACIFIC CORPORATION

(Exact Name of Registrant as Specified in its Charter)

 

Georgia   001-03506   93-0432081

(State or Other

Jurisdiction of Incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

133 Peachtree Street, N.E., Atlanta, Georgia   30303
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant’s telephone number, including area code (404) 652-4000

 

Item 2. Acquisition or Disposition of Assets.

 

On May 7, 2004, we completed the sale of our building products distribution segment to a new company owned by Cerberus Capital Management L.P., a private investment firm, and members of the building products distribution business’ management team. The overall transaction is valued at approximately $810 million, which assumes $630 million of working capital at closing. We expect the transaction to result in net after tax proceeds of approximately $780 million, which will be used to repay corporate debt. Actual cash proceeds are subject to various post-closing adjustments, principally with respect to changes in working capital. A copy of the asset purchase agreements related to this transaction are attached hereto and incorporated herein by reference as Exhibits 2.1, 2.2 and 2.2.1.

 

In connection with the closing of this transaction, we entered into a six-year agreement, which will require the building products distribution business to continue purchasing minimum amounts of structural panels, lumber and other building products manufactured by us. This supply agreement contains terms substantially similar to the previous arrangement between our building products manufacturing and building products distribution businesses. Because our continuing involvement with this business under this supply agreement is considered significant to the building products distribution business, the business is not reported as a discontinued operation in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment and Disposal of Long-Lived Assets.”

 

Also on May 7, 2004, we completed the sale of our non-integrated pulp mills at Brunswick, Georgia and New Augusta, Mississippi, and a short-line railroad, to Koch Cellulose, LLC, and its subsidiaries, for approximately $610 million, including the assumption of $73 million in indebtedness. Actual cash proceeds are subject to various post-closing adjustments, principally with respect to changes in working capital. These operations are reported as discontinued operations in our financial statements. A copy of the asset and stock purchase agreements related to this transaction are attached hereto and incorporated herein by reference as Exhibit 2.3 and 2.3.1.

 

Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information.

 

Presented herein is unaudited pro forma financial information that is adjusted to give effect to the sales of the businesses described in Item 2, as well as the sale of our indirect interest in a Brazilian pulp company on May 7, 2004 and the repayment of corporate debt with a portion of the proceeds from these sales. The unaudited pro forma condensed statements of operations have been prepared to give effect to these sales and the repayment of debt for the three months ended April 3, 2004, and for the year ended January 3, 2004, as though they had occurred at the beginning of fiscal 2003. The unaudited pro forma condensed balance sheet gives effect to these sales and debt repayment as if they had occurred on the balance sheet date. Refer to the notes to the unaudited pro forma financial statements for further information.

 

2

The unaudited pro forma financial information is illustrative of the effects of these sales on our operations and does not necessarily reflect the results of operations that would have been reported had these sales actually occurred at those dates. In addition, the pro forma financial information is not necessarily indicative of our future financial condition or results of operations.

 

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GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES

PROFORMA CONSOLIDATED BALANCE SHEET

AS OF APRIL 3, 2004

 

(In millions)

 

     As
Reported
     Adjustments (1)
     Proforma
  

ASSETS

                         

Current Assets:

                         

Cash and equivalents

    $ 83     $ —       $ 83  

Receivables, less allowances of $32

      1,663       —         1,663  

Inventories

      1,915       —         1,915  

Deferred income tax assets

      117       —         117  

Net assets held for sale

      1,799       (1,799 )     —    

Other current assets

      280       —         280  
    
 
 
       5,857       (1,799 )     4,058  
    
 
 

Property, plant and equipment, at cost

      17,816       —         17,816  

Accumulated depreciation

      (9,392 )     —         (9,392 )
    
 
 

Property, plant and equipment, net

      8,424       —         8,424  
    
 
 

Goodwill, net

      7,465       —         7,465  
    
 
 

Intangible assets, net

      702       —         702  
    
 
 

Other assets

      2,239       —         2,239  
    
 
 

Total assets

    $ 24,687     $ (1,799 )   $ 22,888  
    
 
 

LIABILITIES AND SHAREHOLDERS’ EQUITY

                         

Current liabilities:

                         

Secured borrowings and short-term notes

    $ 1,259     $ —       $ 1,259  

Current portion of long-term debt

      1,248       —         1,248  

Accounts payable

      1,417       —         1,417  

Accrued compensation

      213       —         213  

Net liabilities held for sale

      448       (448 )     —    

Other current liabilities

      1,208       —         1,208  
    
 
 

Total current liabilities

      5,793       (448 )     5,345  
    
 
 

Long-term debt, excluding current portion

      8,236       1,337 (2)     6,899  
    
 
 

Other long-term liabilities

      3,713       —         3,713  
    
 
 

Deferred income tax liabilities

      1,423       —         1,423  
    
 
 

Shareholders’ equity:

      5,522       (14 )     5,508  
    
 
 

Total liabilities and shareholders’ equity

    $ 24,687     $ (1,799 )   $ 22,888  
    
 
 

 

Notes:

 

(1) To reflect the sale of our pulp and distribution businesses.
(2) To reflect the repayment of debt from net after tax cash proceeds from the business sales of $1,361 million less the defeasance of $24 million of debt.

 

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GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES

PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS

FISCAL QUARTER ENDED APRIL 3, 2004

 

(In millions, except per share amounts)

 

     As
Reported
    Adjustments (3)
     Proforma

Net sales

    $ 5,222    $ (885 )   $ 4,337
    
  
 

Costs and expenses:

                      

Cost of sales

      3,965      (735 )     3,230

Selling and distribution

      358      (78 )     280

Depreciation, amortization and accretion

      244      (4 )     240

General and administrative

      219      (9 )     210

Interest, net

      197      (7 )(4)     190

Other losses, net

      26      —         26
    
  
 

Total costs and expenses

      5,009      (833 )     4,176
    
  
 

Income from continuing operations before income taxes

      213      (52 )     161

Provision (benefit) for income taxes

      71      (20 )     51
    
  
 

Income from continuing operations

      142      (32 )     110

Income from discontinued operations, net of taxes

      5      —         5
    
  
 

Net income

    $ 147    $ (32 )   $ 115

Basic per share:

                      

Income from continuing operations

    $ 0.56            $ 0.43

Income from discontinued operations, net of taxes

      0.02              0.02
    
          

Net income

    $ 0.58            $ 0.45

Diluted per share:

                      

Income from continuing operations

    $ 0.55            $ 0.43

Income from discontinued operations, net of taxes

      0.02              0.02
    
          

Net income

    $ 0.57            $ 0.45

Average number of shares outstanding:

                      

Basic

      253.5              253.5

Diluted

      257.4              257.4

 

Notes:

 

(3) To reflect the sale of our distribution business.
(4) To reflect reduction of interest expense from the repayment of debt from net after tax cash proceeds from the business sales. This calculation assumes that we repaid amounts outstanding under our revolving credit facility and other secured borrowings and short-term notes.

 

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GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES

PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS

FISCAL YEAR ENDED JANUARY 3, 2004

 

(In millions, except per share amounts)

     As
Reported
     Adjustments (3)
     Proforma
  

Net sales

    $ 19,656     $ (3,097 )   $ 16,559  
    
 
       

Costs and expenses:

                         

Cost of sales

      15,376       (2,659 )     12,717  

Selling and distribution

      1,291       (274 )     1,017  

Depreciation, amortization and accretion

      973       (19 )     954  

General and administrative

      850       (39 )     811  

Interest, net

      819       (29 ) (4)     790  

Other losses, net

      (86 )     —         (86 )
    
 
 

Total costs and expenses

      19,223       (3,020 )     16,203  
    
 
 

Income from continuing operations before income taxes

      433       (77 )     356  

Provision (benefit) for income taxes

      109       (30 )     79  
    
 
 

Income from continuing operations

      324       (47 )     277  

Income (loss) from discontinued operations, net of taxes

      (98 )     —         (98 )
    
 
 

Net income

    $ 226       (47 )     179  

Basic per share:

                         

Income from continuing operations

    $ 1.29             $ 1.11  

Loss from discontinued operations, net of taxes

      (0.39 )             (0.39 )
    
         

Net income

    $ 0.90             $ 0.72  

Diluted per share:

                         

Income from continuing operations

    $ 1.29             $ 1.10  

Loss from discontinued operations, net of taxes

      (0.39 )             (0.39 )
    
         

Net income

    $ 0.90             $ 0.71  

Average number of shares outstanding:

                         

Basic

      250.4               250.4  

Diluted

      251.4               251.4  

 

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(c) Exhibits.

 

2.1  

—  Asset Purchase Agreement, dated March 12, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific Building Materials Sales, Ltd. and ABP Distribution Inc., as amended.*

2.2  

—  Purchase and Sale Agreement, dated March 12, 2004, by and between Georgia-Pacific Corporation and ABP Distribution Holdings, Inc.*

2.2.1  

—  First Amendment to Purchase and Sale Agreement, dated May 7, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific Building Materials Sales, Ltd. and ABP Distribution Inc.*

2.3  

—  Asset and Stock Purchase Agreement, dated as of February 26, 2004, among, Koch Cellulose, LLC, Georgia-Pacific Corporation, Leaf River Forest Products, Inc., LRC Timber, Inc., Old Augusta Railroad Company, Georgia-Pacific Asia (Hong Kong) Ltd, and Georgia-Pacific GmbH.*

2.3.1  

—  Amendment No. 1 To Asset and Stock Purchase Agreement, dated as of May 7, 2004, among, Koch Cellulose, LLC, Georgia-Pacific Corporation, Leaf River Forest Products, Inc., LRC Timber, Inc., Old Augusta Railroad Company, Georgia-Pacific Asia (H.K.) Limited, and Georgia-Pacific GmbH.*

 

* Schedules and other attachments to this agreement are omitted. The registrant agrees to furnish supplementally a copy of any schedule or other attachment to the Securities and Exchange Commission upon request.

 

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SIGNATURE

 

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 hereunto duly authorized.

 

Dated: May 20, 2004

 

GEORGIA-PACIFIC CORPORATION

By:

  

/s/    KENNETH F. KHOURY        

   

Name:

   Kenneth F. Khoury

Title:

   Vice President, Deputy General Counsel and Secretary

 

 

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EXHIBIT INDEX

 

2.1  

—  Asset Purchase Agreement, dated March 12, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific Building Materials Sales, Ltd. and ABP Distribution Inc.*

2.2  

—  Purchase and Sale Agreement, dated March 12, 2004, by and between Georgia-Pacific Corporation and ABP Distribution Holdings, Inc.*

2.2.1  

—  First Amendment to Purchase and Sale Agreement, dated May 7, 2004, by and among Georgia-Pacific Corporation, Georgia-Pacific Building Materials Sales, Ltd. and ABP Distribution Inc.*

2.3  

—  Asset and Stock Purchase Agreement, dated as of February 26, 2004, among, Koch Cellulose, LLC, Georgia-Pacific Corporation, Leaf River Forest Products, Inc., LRC Timber, Inc., Old Augusta Railroad Company, Georgia-Pacific Asia (Hong Kong) Ltd, and Georgia-Pacific GmbH.*

2.3.1  

—  Amendment No. 1 To Asset and Stock Purchase Agreement, dated as of May 7, 2004, among, Koch Cellulose, LLC, Georgia-Pacific Corporation, Leaf River Forest Products, Inc., LRC Timber, Inc., Old Augusta Railroad Company, Georgia-Pacific Asia (H.K.) Limited, and Georgia-Pacific GmbH.*

 

* Schedules and other attachments to this agreement are omitted. The registrant agrees to furnish supplementally a copy of any schedule or other attachment to the Securities and Exchange Commission upon request.

 

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