- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM 10-Q

(MARK ONE)

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______________ TO ______________

COMMISSION FILE NUMBER 1-9753

------------------------

GEORGIA GULF CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE 58-1563799
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

400 PERIMETER CENTER TERRACE, 30346
SUITE 595, ATLANTA, GEORGIA (zip code)
(Address of principal executive
offices)

------------------------

Registrant's telephone number, including area code: (770) 395-4500

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

OUTSTANDING AS OF
CLASS MAY 7, 2001
- ------------------------------------------------------------ -----------------

Common Stock, $0.01 par value............................... 31,715,002 shares

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

GEORGIA GULF CORPORATION
FORM 10-Q
QUARTERLY PERIOD ENDED MARCH 31, 2001
INDEX

PAGE
NUMBERS
--------

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2001
and December 31, 2000................................... 1
Condensed Consolidated Statements of Income for the Three
Months Ended March 31, 2001 and 2000.................... 2
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 2001 and 2000.............. 3
Notes to Condensed Consolidated Financial Statements as of
March 31, 2001.......................................... 4-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 12-14
Item 3. Quantitative and Qualitative Disclosures About
Market Risk............................................. 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................. 15
Item 6. Exhibits and Reports on Form 8-K.................. 15
SIGNATURES.................................................. 16

PART I. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS.

GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

MARCH 31, DECEMBER 31,
2001 2000
---------- ------------

ASSETS
Cash and cash equivalents.................................. $ 2,809 $ 2,042
Receivables, net of allowance for doubtful accounts of
$2,900 in 2001 and $2,372 in 2000........................ 144,079 145,789
Inventories................................................ 132,451 123,156
Prepaid expenses........................................... 6,219 7,607
Deferred income taxes...................................... 5,243 5,243
---------- ----------
Total current assets..................................... 290,801 283,837
Property, plant and equipment, net......................... 619,057 626,777
Other assets............................................... 137,164 135,995
---------- ----------
Total assets............................................. $1,047,022 $1,046,609
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt.......................... $ 23,262 $ 9,794
Accounts payable........................................... 129,642 147,949
Interest payable........................................... 12,848 5,388
Accrued compensation....................................... 5,443 10,380
Other accrued liabilities.................................. 17,561 15,420
---------- ----------
Total current liabilities................................ 188,756 188,931
Long-term debt, net of current portion..................... 635,019 622,541
Deferred income taxes...................................... 116,545 116,545
Stockholders' equity....................................... 106,702 118,592
---------- ----------
Total liabilities and stockholders' equity............... $1,047,022 $1,046,609
========== ==========
Common shares outstanding.................................. 31,715 31,714
========== ==========

See notes to condensed consolidated financial statements.

GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

THREE MONTHS ENDED
MARCH 31,
----------------------
2001 2000
-------- --------

Net sales................................................... $368,883 $421,343
Operating costs and expenses
Cost of sales............................................. 351,527 339,528
Selling, general and administrative expenses.............. 12,641 13,674
-------- --------
Total operating costs and expenses...................... 364,168 353,202
-------- --------
Operating income............................................ 4,715 68,141
Interest, net............................................. (15,090) (19,008)
-------- --------
(Loss) income before income taxes........................... (10,375) 49,133
(Benefit) provision for income taxes........................ (3,735) 17,695
-------- --------
Net (loss) income........................................... $ (6,640) $ 31,438
======== ========

(Loss) earnings per share:
Basic..................................................... $ (0.21) $ 1.00

Diluted................................................... $ (0.21) $ 1.00

Weighted average common shares:

Basic..................................................... 31,715 31,301

Diluted................................................... 31,715 31,501

See notes to condensed consolidated financial statements.

GEORGIA GULF CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

THREE MONTHS ENDED
MARCH 31,
----------------------
2001 2000
-------- --------

Cash flows from operating activities:
Net (loss) income......................................... $(6,640) $31,438
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Depreciation and amortization........................... 17,915 18,806
Provision for deferred income taxes..................... -- 2,915
Change in operating assets, liabilities and other....... (25,272) 7,746
------- -------
Net cash (used in) provided by continuing operations........ (13,997) 60,905
Net cash provided by discontinued operation................. -- 443
------- -------
Net cash (used in) provided by operating activities......... (13,997) 61,348
Cash flows from financing activities:
Long-term debt proceeds................................... 26,731 2,605
Long-term debt payments................................... (785) (58,675)
Proceeds from issuance of common stock.................... 11 203
Dividends paid............................................ (2,537) (2,505)
------- -------
Net cash provided by (used in) financing activities......... 23,420 (58,372)
Cash flows from investing activities:
Capital expenditures...................................... (8,656) (5,920)
------- -------
Net change in cash and cash equivalents..................... 767 (2,944)
Cash and cash equivalents at beginning of period............ 2,042 4,424
------- -------
Cash and cash equivalents at end of period.................. $ 2,809 $ 1,480
======= =======

See notes to condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In our opinion,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Certain prior year balances have
been reclassified to conform to the 2001 presentation. For further information,
refer to our consolidated financial statements and footnotes thereto included in
our Annual Report on Form 10-K for the year ended December 31, 2000.

Our operating results for the three-month period ended March 31, 2001 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2001.

NOTE 2: NEW ACCOUNTING PRONOUNCEMENT

On January 1, 2001, we adopted Statement of Financial Accounting Standards
("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended. SFAS No. 133 requires that we recognize all derivative
instruments on the balance sheet at fair value, and changes in the derivative's
fair value must be currently recognized in earnings or comprehensive income,
depending on the designation of the derivative. If the derivative is designated
a fair value hedge, the changes in the fair value of the derivative and of the
hedged item attributable to the hedged risk are recognized in earnings. If the
derivative is designated as a cash flow hedge, the effective portion of the
change in the fair value of the derivative is recorded in comprehensive income
and is recognized in the income statement when the hedged item affects earnings.
Ineffective portions of changes in the fair value of cash flow hedges are
recognized in earnings currently.

On November 30, 2000, we entered into an interest rate swap agreement for a
notional amount of $100 million, which has been designated as a cash flow hedge
to effectively convert a portion of our outstanding senior credit facility from
a variable rate basis to a fixed rate basis, thus reducing the impact of
interest rate changes on future income.

Upon adoption of SFAS No. 133 on January 1, 2001, we recognized an
unrealized loss of approximately $2.1 million related to the interest rate swap,
which was recorded as part of long-term liabilities and accumulated
comprehensive income. The reclassification of any gains or losses associated
with the interest rate swap is anticipated to occur through the maturity date of
the interest rate swap, which expires on November 29, 2002.

NOTE 3: OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss includes unrealized gains and losses in
the fair value of certain derivative instruments which qualify for hedge
accounting. As of March 31, 2001, the accumulated other comprehensive loss was
$2.7 million. This includes $2.1 million, which we recognized on January 1,
2001, upon adoption of SFAS No. 133 and approximately $609,000, which reflects
the change in fair value of the interest rate swap from January 1, 2001 to
March 31, 2001.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4: INVENTORIES

The major classes of inventories were as follows:

MARCH 31, DECEMBER 31,
2001 2000
--------- ------------
(IN THOUSANDS)

Raw materials and supplies.................................. $ 52,811 $ 45,662
Finished goods.............................................. 79,640 77,494
-------- --------
$132,451 $123,156
======== ========

NOTE 5: SEGMENT INFORMATION

We have identified two reportable segments through which we conduct our
operating activities: chlorovinyls and aromatics. These two segments reflect the
organization which we use for internal reporting. The chlorovinyls segment is a
highly integrated chain of products which includes chlorine, caustic soda, vinyl
chloride monomer and vinyl resins and compounds. The aromatics segment is also
vertically integrated and includes cumene and the co-products phenol and
acetone.

Earnings of industry segments exclude interest income and expense,
unallocated corporate expenses and general plant services, and provision for
income taxes. Intersegment sales and transfers are insignificant.

THREE MONTHS ENDED
MARCH 31,
----------------------
2001 2000
-------- --------
(IN THOUSANDS)

Segment net sales:
Chlorovinyls.............................................. $281,120 $348,577
Aromatics................................................. 87,763 72,766
-------- --------
Net sales................................................... $368,883 $421,343
======== ========

Segment operating income:
Chlorovinyls.............................................. $ 13,186 $ 79,576
Aromatics................................................. (3,496) (6,485)
Corporate and general plant services...................... (4,975) (4,950)
-------- --------
Total operating income...................................... $ 4,715 $ 68,141
======== ========

NOTE 6: EARNINGS PER SHARE

There are no adjustments to "Net income" or "Income from continuing
operations" for the diluted earnings per share computations.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6: EARNINGS PER SHARE (CONTINUED)
The following table reconciles the denominator for the basic and diluted
earnings per share computations shown on the condensed consolidated statements
of income:

2001 2000
-------- --------
(IN THOUSANDS)

Weighted average common shares--basic....................... 31,715 31,301
Effect of incremental shares from assumed conversions:
Options................................................... -- 179
Employee stock purchase plan rights....................... -- 21
------ ------
Weighted average common shares--diluted..................... 31,715 31,501
====== ======

NOTE 7: SUPPLEMENTAL GUARANTOR INFORMATION

Our payment obligations under our 10 3/8% senior subordinated notes are
guaranteed by GG Terminal Management Corporation, Great River Oil & Gas
Corporation, North America Plastics, LLC, Georgia Gulf Lake Charles, LLC and
Georgia Gulf Chemicals & Vinyls, LLC, some of our wholly-owned subsidiaries (the
"Guarantor Subsidiaries"). The guarantees are full, unconditional and joint and
several. The following unaudited condensed consolidating balance sheets,
statements of income and statements of cash flows present the financial
statements of the parent company, and the combined financial statements of our
Guarantor Subsidiaries and our remaining subsidiaries (the "Non-Guarantor
Subsidiaries").

In connection with the acquisition of the vinyls business from CONDEA Vista
Company on November 12, 1999, we essentially became a holding company by
transferring our operating assets and employees to our wholly-owned subsidiary
Georgia Gulf Chemicals & Vinyls, LLC. Provisions in our senior credit facility
limit payment of dividends, distributions, loans and advances to us by our
subsidiaries.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 2001

PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ -------------- ------------ ------------
(IN THOUSANDS)

Cash and cash equivalents.................... $ -- $ 2,786 $ 23 $ -- $ 2,809
Receivables, net............................. 316,380 74,495 69,959 (316,755) 144,079
Inventories.................................. -- 132,451 -- -- 132,451
Prepaid expenses............................. -- 6,101 118 -- 6,219
Deferred income taxes........................ -- 5,243 -- -- 5,243
-------- ---------- ------- --------- ----------
Total current assets....................... 316,380 221,076 70,100 (316,755) 290,801
-------- ---------- ------- --------- ----------
Property, plant and equipment, at cost....... 1,077 1,012,440 -- -- 1,013,517
Less accumulated depreciation................ (780) (393,680) -- -- (394,460)
-------- ---------- ------- --------- ----------
Property, plant and equipment, net........... 297 618,760 -- -- 619,057
-------- ---------- ------- --------- ----------
Goodwill..................................... -- 79,578 -- -- 79,578
Other assets................................. 16,875 40,692 19 -- 57,586
Investment in subsidiaries................... 127,968 58,273 -- (186,241) --
-------- ---------- ------- --------- ----------
Total assets............................... $461,520 $1,018,379 $70,119 $(502,996) $1,047,022
======== ========== ======= ========= ==========
Current portion of long-term debt............ $ -- $ 23,262 $ -- $ -- $ 23,262
Account payable.............................. 2,913 431,644 11,840 (316,755) 129,642
Interest payable............................. 12,158 690 -- -- 12,848
Accrued compensation......................... -- 5,443 -- -- 5,443
Accrued pension.............................. 5,008 930 -- -- 5,938
Other accrued liabilities.................... -- 11,623 -- -- 11,623
-------- ---------- ------- --------- ----------
Total current liabilities.................. 20,079 473,592 11,840 (316,755) 188,756
-------- ---------- ------- --------- ----------
Long-term debt, net of current portion....... 334,739 300,280 -- -- 635,019
-------- ---------- ------- --------- ----------
Deferred income taxes........................ -- 116,545 -- -- 116,545
-------- ---------- ------- --------- ----------
Stockholders' equity:
Common Stock............................... 317 6 20 (26) 317
Additional paid-in-capital................. 12,489 7,940 55,587 (63,527) 12,489
Retained earnings.......................... 93,896 120,016 2,672 (122,688) 93,896
-------- ---------- ------- --------- ----------
Total stockholders' equity................. 106,702 127,962 58,279 (186,241) 106,702
-------- ---------- ------- --------- ----------
Total liabilities and stockholders' equity... $461,520 $1,018,379 $70,119 $(502,996) $1,047,022
======== ========== ======= ========= ==========

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2000

PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ -------------- ------------ ------------
(IN THOUSANDS)

Cash and cash equivalents.................... $ -- $ 1,982 $ 60 $ -- $ 2,042
Receivables, net............................. 347,076 114,213 59,110 (374,610) 145,789
Inventories.................................. -- 123,156 -- -- 123,156
Prepaid expenses............................. 2,698 4,696 213 -- 7,607
Deferred income taxes........................ -- 5,243 -- -- 5,243
-------- ---------- ------- --------- ----------
Total current assets....................... 349,774 249,290 59,383 (374,610) 283,837
-------- ---------- ------- --------- ----------
Property, plant and equipment, at cost....... 1,077 1,003,784 -- -- 1,004,861
Less accumulated depreciation................ (756) (377,328) -- -- (378,084)
-------- ---------- ------- --------- ----------
Property, plant and equipment, net........... 321 626,456 -- -- 626,777
-------- ---------- ------- --------- ----------
Goodwill..................................... -- 80,198 -- -- 80,198
Other assets................................. 14,431 41,320 46 -- 55,797
Investment in subsidiaries................... 128,775 57,869 -- (186,644) --
-------- ---------- ------- --------- ----------
Total assets............................... $493,301 $1,055,133 $59,429 $(561,254) $1,046,609
======== ========== ======= ========= ==========
Current portion of long-term debt............ $ -- $ 9,794 $ -- $ -- $ 9,794
Accounts payable............................. 30,054 492,475 30 (374,610) 147,949
Interest payable............................. 4,971 417 -- -- 5,388
Accrued compensation......................... -- 10,380 -- -- 10,380
Accrued pension.............................. -- 296 -- -- 5,522
Other accrued liabilities.................... 5,226 9,898 -- -- 9,898
-------- ---------- ------- --------- ----------
Total current liabilities.................. 40,251 523,260 30 (374,610) 188,931
-------- ---------- ------- --------- ----------
Long-term debt, net of current portion....... 334,458 288,083 -- -- 622,541
-------- ---------- ------- --------- ----------
Deferred income taxes........................ -- 116,545 -- -- 116,545
-------- ---------- ------- --------- ----------
Stockholders' equity:
Common stock............................... 317 6 20 (26) 317
Additional paid-in capital................. 12,478 2,763 55,587 (58,350) 12,478
Retained earnings.......................... 105,797 124,476 3,792 (128,268) 105,797
-------- ---------- ------- --------- ----------
Total stockholders' equity................. 118,592 127,245 59,399 (186,644) 118,592
-------- ---------- ------- --------- ----------
Total liabilities and stockholders' equity... $493,301 $1,055,133 $59,429 $(561,254) $1,046,609
======== ========== ======= ========= ==========

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING INCOME STATEMENT
THREE MONTHS ENDED MARCH 31, 2001

PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ -------------- ------------ ------------
(IN THOUSANDS)

Net sales.................................... $ 2,595 $369,030 $1,942 $(4,684) $368,883
Operating costs and expenses:
Cost of sales.............................. -- 351,527 -- -- 351,527
Selling, general and administrative
expenses................................. 2,169 13,845 1,311 (4,684) 12,641
------- -------- ------ ------- --------
Total operating costs and expenses........... 2,169 365,372 1,311 (4,684) 364,168
------- -------- ------ ------- --------
Operating income............................. 426 3,658 631 -- 4,715
Other (expense) income:
Interest expense, net...................... (8,088) (7,002) -- -- (15,090)
Equity in (loss) income of subsidiaries.... (1,736) 404 -- 1,332 --
------- -------- ------ ------- --------
(Loss) income before taxes................... (9,398) (2,940) 631 1,332 (10,375)
(Benefit) provision for income taxes......... (2,758) (1,204) 227 -- (3,735)
------- -------- ------ ------- --------
Net (loss) income............................ $(6,640) $ (1,736) $ 404 $ 1,332 $ (6,640)
======= ======== ====== ======= ========

GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING INCOME STATEMENT
THREE MONTHS ENDED MARCH 31, 2000

PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ -------------- ------------ ------------
(IN THOUSANDS)

Net sales.................................... $ -- $421,494 $1,952 $ (2,103) $421,343
------- -------- ------ -------- --------
Operating costs and expenses:
Cost of sales.............................. -- 339,528 -- -- 339,528
Selling, general and administrative
expenses................................. -- 14,796 981 (2,103) 13,674
------- -------- ------ -------- --------
Total operating costs and expenses........... -- 354,324 981 (2,103) 353,202
------- -------- ------ -------- --------
Operating income............................. -- 67,170 971 -- 68,141
Other income (expense):
Interest expense, net...................... (8,126) (10,882) -- -- (19,008)
Equity in income of subsidiaries........... 36,639 627 -- (37,266) --
------- -------- ------ -------- --------
(Loss) income before taxes................... 28,513 56,915 971 (37,266) 49,133
(Benefit) provision for income taxes......... (2,925) 20,268 352 -- 17,695
------- -------- ------ -------- --------
Net income................................... $31,438 $ 36,647 $ 619 $(37,266) $ 31,438
======= ======== ====== ======== ========

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2001

PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ -------------- ------------ ------------
(IN THOUSANDS)

Cash flows from operating activities:
Net (loss) income.......................... $(6,640) $(1,736) $ 404 $1,332 $(6,640)
Adjustments to reconcile net (loss)
income to net cash provided by (used
in) operating activities:
Depreciation and amortization.......... 352 17,535 28 -- 17,915
Equity in loss (income) of
subsidiaries......................... 1,736 (404) -- (1,332) --
Change in operating assets, liabilities
and other............................ 5,273 (31,600) 1,055 -- (25,272)
------- ------- ------ ------ -------
Net cash provided by (used in) operating
activities................................. 721 (16,205) 1,487 -- (13,997)
------- ------- ------ ------ -------
Cash flows from financing activities:
Long-term debt proceeds.................... 281 26,450 -- -- 26,731
Long-term debt payments.................... -- (785) -- -- (785)
Proceeds from issuance of common stock..... 11 -- -- -- 11
Dividends paid............................. (2,537) -- (1,524) 1,524 (2,537)
------- ------- ------ ------ -------
Net cash (used in) provided by financing
activities................................. (2,245) 25,665 (1,524) 1,524 23,420
------- ------- ------ ------ -------
Cash flows from investing activities:
Capital expenditures....................... -- (8,656) -- -- (8,656)
Dividends received from subsidiary......... 1,524 -- -- (1,524) --
------- ------- ------ ------ -------
Net cash provided by (used in) investing
activities................................. 1,524 (8,656) -- (1,524) (8,656)
------- ------- ------ ------ -------
Net change in cash and cash equivalents...... -- 804 (37) -- 767
Cash and cash equivalents at beginning of
period..................................... -- 1,982 60 -- 2,042
------- ------- ------ ------ -------
Cash and cash equivalents at end of period... $ -- $ 2,786 $ 23 $ -- $ 2,809
======= ======= ====== ====== =======

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 7: SUPPLEMENTAL GUARANTOR INFORMATION (CONTINUED)
GEORGIA GULF CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000

PARENT GUARANTOR NON-GUARANTOR
COMPANY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ -------------- ------------ ------------
(IN THOUSANDS)

Cash flows from operating activities:
Net income................................. $31,438 $36,647 $ 619 $(37,266) $31,438
Adjustments to reconcile net income to net
cash (used in) provided by operating
activities:
Depreciation and amortization............ 286 18,505 15 -- 18,806
Equity in net income of subsidiaries..... (36,639) (627) -- 37,266 --
Change in operating assets, liabilities
and other.............................. 2,175 6,928 1,558 -- 10,661
------- ------- ------ -------- -------
Net cash (used in) provided by continuing
operations................................. (2,740) 61,453 2,192 -- 60,905
Net cash provided by discontinued
operation.................................. -- 443 -- -- 443
------- ------- ------ -------- -------
Net cash (used in) provided by operating
activities................................. (2,740) 61,896 2,192 -- 61,348
Cash flows from financing activities:
Long-term debt proceeds.................... -- 2,605 -- -- 2,605
Long-term debt payments.................... -- (58,675) -- -- (58,675)
Proceeds from issuance of common stock..... 203 -- -- -- 203
Dividends paid............................. (2,505) -- (2,200) 2,200 (2,505)
------- ------- ------ -------- -------
Net cash used in financing activities........ (2,302) (56,070) (2,200) 2,200 (58,372)
------- ------- ------ -------- -------
Cash flows from investing activities:
Capital expenditures....................... -- (5,920) -- -- (5,920)
Dividends received from subsidiary......... 2,200 -- -- (2,200) --
------- ------- ------ -------- -------
Net cash provided by (used in) investing
activities................................. 2,200 (5,920) -- (2,200) (5,920)
------- ------- ------ -------- -------
Net change in cash and cash equivalents...... (2,842) (94) (8) -- (2,944)
Cash and cash equivalents at beginning of
period..................................... 4,151 252 21 -- 4,424
------- ------- ------ -------- -------
Cash and cash equivalents at end of period... $ 1,309 $ 158 $ 13 $ -- $ 1,480
======= ======= ====== ======== =======

Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations.

RESULTS OF OPERATIONS

Georgia Gulf manufactures and markets products through two highly integrated
lines categorized into chlorovinyls and aromatic chemicals. Our primary
chlorovinyl products include chlorine, caustic soda, vinyl chloride monomer
("VCM"), and polyvinyl chloride ("PVC") resins and compounds; our primary
aromatic chemical products include cumene, phenol and acetone.

THREE MONTHS ENDED MARCH 31, 2001 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2000

NET SALES. Net sales for the quarter ended March 31, 2001 were
$368.9 million, a decrease of 13 percent compared to $421.3 million for the same
period in 2000. This decrease was due to 8 percent lower sales volumes and a
decrease in the overall average selling price of 5 percent, largely attributable
to the vinyls business.

Net sales of chlorovinyls for the first quarter of 2001 were
$281.1 million, 19 percent lower than net sales for first quarter of 2000 of
$348.6 million. This decrease was the result of a 12 percent decrease in sales
volume and a 9 percent decrease in sales prices. The lower sales prices and
sales volumes resulted from weaker demand for vinyl products, particularly vinyl
resins, VCM and vinyl compounds.

Net sales of aromatics for the first quarter of 2001 were $87.8 million, an
increase of 21 percent compared to $72.8 million for the same period in 2000.
This increase was the result of a 15 percent improvement in sales prices and
5 percent higher sales volumes. Even though demand for phenol was weaker, sales
prices for aromatic products increased as a result of partially pushing through
higher raw material costs. The sales volume increase was primarily the result of
a 67 percent increase in cumene sales volume partially offset by a 25 percent
decrease in phenol sales volume.

COST OF SALES. Cost of sales for the first quarter of 2001 was
$351.5 million, an increase of 4 percent compared to $339.5 million for the
first quarter of 2000. The primary reason for this increase was higher raw
materials and energy costs. As a percentage of sales, cost of sales increased to
95 percent in the first quarter of 2001 compared to 81 percent in the first
quarter of 2000. This increase was caused by higher raw material and energy
costs outpacing overall sales price increases as well as a decrease in overall
capacity utilization rates.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling and administrative
expenses were $12.6 million for the three months ended March 31, 2001, a
decrease of 8 percent from $13.7 million for the same period in 2000. This
decrease is primarily attributable to lower profit sharing expenses for 2001
based on lower earning expectations and the termination of services contracts
with Condea Vista which more than offset an increase in legal expense and an
increase in the reserve for doubtful accounts.

OPERATING INCOME. We had operating income in the first quarter of 2001 of
$4.7 million compared to $68.1 million in the first quarter of 2000. Lower
operating income in chlorovinyls more than offset the decreased operating loss
in aromatics. The lower operating income was the result of increases in raw
material and energy costs coupled with lower sales volumes and overall sales
price decreases.

Our chlorovinyls operating profit for the first quarter of 2001 was
$13.2 million, a decrease of 83 percent compared to $79.6 million for the same
period in 2000. The most significant factors in this decrease were lower sales
prices and lower sales volume for vinyl resins, VCM and vinyl compounds coupled
with higher energy and raw material costs which more than offset higher caustic
soda selling prices.

Our aromatics operating loss for the first quarter of 2001 was
$3.5 million, which was an improvement when compared to an operating loss of
$6.5 million in the first quarter of 2000. Aromatic sales price increases were
able to somewhat compensate for the lower phenol volume and significantly higher
energy costs.

NET INTEREST EXPENSE. Interest expense decreased to $15 million for the
quarter ended March 31, 2001 compared with $19 million for the same period in
2000. This decrease was primarily attributable to the lower debt balance, as a
result of a repayment of $56.8 million of debt, and lower interest rates.

(BENEFIT) PROVISION FOR INCOME TAXES. The benefit from income taxes was
$3.7 million for the first quarter of 2001 compared to a provision of
$17.7 million for the first quarter of 2000. Our effective tax rate was
36 percent for both quarters.

NET (LOSS) INCOME. Net loss for the first quarter of 2001 was $6.6 million
compared to net income of $31.4 million in the first quarter of 2000. This was
due to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended March 31, 2001, we used $14.0 million in cash for
operating activities as compared to generating $61.3 million in cash flow during
the same period in 2000. Major uses of cash for the first quarter of 2001 were
the net loss of $6.6 million and the $25.3 million used in working capital which
more than offset the non-cash provision of $17.9 for depreciation and
amortization. Total working capital at March 31, 2001 was $102.0 million versus
$94.9 million at December 31, 2000. Significant changes in working capital for
the first quarter of 2001 included an increase in inventories, an increase in
the current portion of long-term debt, an increase in interest payable and a
decrease in accounts payable. Inventories increased as a result of higher raw
material costs and quantities. The decrease in accounts payable was attributable
to the timing of certain payments.

Debt increased by $26.0 million during the three months ended March 31, 2001
to $658.3 million. As of March 31, 2001, we had availability to borrow an
additional $62.5 million under the revolving credit facility. Capital
expenditures for the quarter ended March 31, 2001 were $8.7 million as compared
to $5.9 million for the same 2000 period. Capital expenditures for 2001 are
being directed toward normal repairs and maintenance, certain environmental
projects and increased efficiency of existing operations. We estimate total
capital expenditures for 2001 will approximate $30 million.

We declared a dividend of $0.08 per share or $2.5 million during the first
quarter of 2001. As of March 31, 2001, we had authorization to repurchase up to
5.2 million shares under a common stock repurchase program.

Under our senior credit facility and the indentures related to the 7 5/8
percent notes and the 10 3/8 percent notes, we are subject to certain
restrictive covenants, the most significant of which require us to maintain
certain financial ratios. Our ability to meet these covenants, satisfy our debt
obligations and to pay principal and interest on our debt, fund working capital,
and make anticipated capital expenditures will depend on our future performance,
which is subject to general economic conditions and other factors, some of which
are beyond our control. We believe that based on current and anticipated levels
of operations and conditions in our markets, cash flow from operations will be
adequate for the foreseeable future to make required payments of principal and
interest on our debt and fund our working capital and capital expenditure
requirements. However, based on our expectations of earnings for the quarter
ending June 30, 2001, we will be in violation of certain covenants related to
the senior credit facility at the end of that quarter. We have consulted with
the administrative agent of the senior credit facility. While the agent has not
had the opportunity to consult with any other lendors, on the basis of the
information that has been furnished to it, current conditions in the bank market
and its experience with the lender group under the credit agreement, it would
expect that an amendment or

waiver could be structured that would be acceptable to the required lenders and
would prevent a default.

We are essentially a holding company and, accordingly, must rely on
distributions, loans and other inter-company cash flows from our wholly-owned
subsidiaries to generate the funds necessary to satisfy the repayment of our
existing debt. Provisions in our senior credit facility limit payments of
dividends, distributions, loans or advances to us by our subsidiaries.

OUTLOOK

For the second quarter, we are concerned because the weak demand we
experienced in the first quarter has continued into the second quarter. However,
price increases in the first quarter for phenol and vinyl resins, coupled with
lower natural gas prices and decreases in raw material costs, should result in
an improvement in the second quarter over the first quarter. The current
economic forecast is for the economy to recover in the last half of this year,
and if this occurs, we expect to see improved demand for our products.

FORWARD-LOOKING STATEMENTS

This Form 10-Q and other communications to stockholders may contain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements relate to, among other things,
our outlook for future periods, supply and demand, pricing trends and market
forces within the chemical industry, cost reduction strategies and their
results, planned capital expenditures, long-term objectives of management and
other statements of expectations concerning matters that are not historical
facts. Predictions of future results contain a measure of uncertainty and,
accordingly, actual results could differ materially due to various factors.
Factors that could change forward-looking statements are, among others:

- changes in the general economy;

- changes in demand for our products or increases in overall industry
capacity that could affect production volumes and/or pricing;

- changes in the industries to which our products are sold;

- availability and pricing of raw materials;

- technological changes affecting production;

- difficulty in plant operations and product transportation;

- governmental and environmental regulations; and

- other unforeseen circumstances.

A number of these factors are discussed in this Form 10-Q and in our other
periodic filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2000.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

For a discussion of certain market risks related to Georgia Gulf, see
Part I, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk",
in our Annual Report on Form 10-K for the year ended December 31, 2000. There
have been no significant developments with respect to our exposure to market
risk except for the change in the fair value of interest rate swaps disclosed in
Note 7 to the financial statements included herein.

PART II. OTHER INFORMATION.

Item 1. Legal Proceedings.

We are involved in certain legal proceedings that are described in our 2000
Annual Report on Form 10-K. During the three months ended March 31, 2001, there
were no material changes or developments in the status of those legal
proceedings that have not been previously disclosed in our 2000 Annual Report on
Form 10-K.

Item 6. Exhibits and Reports on Form 8-K.

a) No exhibits are required to be filed as part of this Form 10-Q.

b) No reports on Form 8-K were filed with Securities and Exchange
Commission during the first quarter of 2001.

SIGNATURES

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, thereunto duly authorized.

GEORGIA GULF CORPORATION
(Registrant)

Date May 14, 2001 /s/ EDWARD A. SCHMITT
Edward A. Schmitt
President and Chief Executive Officer
(Principal Executive Officer)

Date May 14, 2001 /s/ RICHARD B. MARCHESE
Richard B. Marchese
Vice President Finance, Chief Financial
Officer and Treasurer
(Principal Financial Officer)