Georgia-Pacific notes asbestos liability costs

ATLANTA – Wood-products giant Georgia-Pacific Corp. said Monday it suffered higher than anticipated asbestos liability costs last year and it doesn’t expect to record a profit in the fourth quarter.

Georgia-Pacific said it expects results from continuing operations to approximately break even for the fourth quarter before unusual items and the sale of a 60 percent interest in its Unisource paper distribution subsidiary. The company will report its earnings Jan. 21.

Analysts surveyed by Thomson First Call were expecting Georgia-Pacific to post a profit of 22 cents for the quarter.

The company said it will record a fourth quarter pre-tax charge of approximately $315 million for asbestos liabilities and defense costs it expects to pay over 10 years through 2012.

Georgia-Pacific also said its building products businesses were hurt by costs associated with stopping production at several manufacturing facilities, as well as competitive pricing in lumber and panels.

The company also cited higher wastepaper and energy costs.

Last May, Georgia-Pacific’s board approved the separation of its lucrative consumer products and packaging division – a unit that produces Quilted Northern and Angel Soft bathroom tissue, Dixie cups and Brawny paper towels – from its building products division, which faces costs from asbestos lawsuits.

The building products division has faced the potential payments from asbestos litigation related to its gypsum board products. The company manufactured the asbestos products until 1977, and about 300,000 asbestos-related claims have been filed against the company to date.

Because it incurred higher asbestos liabilities and defense costs in 2002 than anticipated, the company said Monday it has revised the earlier 10-year projection for which Georgia-Pacific took a fourth quarter 2001 pre-tax charge of $350 million, and has extended the projection an additional year through 2012.

Georgia-Pacific said it will still be able to make its debt payments.