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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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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

 

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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

 

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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.

 

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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.

 

 

*	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

 

 

 

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EXHIBIT INDEX

 

 

*	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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