EXHIBIT 99.3
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
The following unaudited pro forma combined, condensed financial statements
have been derived by the application of pro forma adjustments to the historical
financial statements of Georgia Gulf and the vinyls business of CONDEA Vista
included as exhibits to this Form 8-K. The pro forma balance sheet gives effect
to the offering of the 10 3/8% notes, the refinancing of Georgia Gulf's senior
credit facility, the purchase of the co-generation facility under the terms of
the operating lease and the acquisition of the vinyls business of CONDEA Vista
as if these transactions occurred on September 30, 1999. The pro forma statement
of income for the fiscal year ended December 31, 1998 and the nine months ended
September 30, 1999 gives effect to the offering of the 10 3/8% notes, the
refinancing of Georgia Gulf's senior credit facility, the purchase of the
co-generation facility under the terms of the operating lease and the
acquisition of the vinyls business of CONDEA Vista as if these transactions had
occurred on January 1, 1998. The pro forma statement of income for the twelve
months ended September 30, 1999 gives effect to the offering of the 10 3/8%
notes, the refinancing of Georgia Gulf's senior credit facility, the purchase of
the co-generation facility under the terms of the operating lease and the
acquisition of the vinyls business of CONDEA Vista as if these transactions
occurred on October 1, 1998. The pro forma balance sheet and the pro forma
statements of income should not be considered indicative of actual results that
would have been achieved had the transactions described above been consummated
on the dates or for the periods indicated. Also, the pro forma balance sheet
data and statements of income should not be viewed as indicative of Georgia
Gulf's balance sheet data or results of operations as of any future date or for
any future period. The pro forma combined financial statements should be read in
conjunction with the "Management's Discussion and Analysis of Financial
Condition and Results of Operations of Georgia Gulf Corporation", "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Vinyls Business of CONDEA Vista Company" and the financial statements and
related notes included elsewhere in this Form 8-K to which this exhibit is
attached.
1
GEORGIA GULF
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 1998
-----------------------------------------------------------------
ADJUSTMENTS ADJUSTED
VINYLS TO VINYLS VINYLS
BUSINESS(1) BUSINESS BUSINESS GEORGIA GULF(5)
----------- ----------- -------- ---------------
NET SALES............................ $341,668 $ -- $341,668 $825,292
-------- -------- -------- --------
OPERATING COSTS AND EXPENSES
Cost of sales...................... 330,166 -- 330,166 652,347
Certain litigation settlements..... 15,600 (15,600) (2) -- --
Other operating costs and
expenses......................... 59,282 (6,000) (2) 53,282 42,455
-------- -------- -------- --------
Total operating expenses......... 405,048 (21,600) 383,448 694,802
-------- -------- -------- --------
OPERATING INCOME (LOSS).............. (63,380) 21,600 (41,780) 130,490
-------- -------- -------- --------
OTHER EXPENSE (INCOME)
Interest expense................... 10,333 (10,333) (3) -- 30,867
Interest income.................... -- -- -- (49)
Other expense, net................. -- -- -- 9,500
-------- -------- -------- --------
10,333 (10,333) -- 40,318
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES.... (73,713) 31,933 (41,780) 90,172
INCOME TAX PROVISION (BENEFIT)....... (28,380) 11,815 (4) (16,565) 33,587
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS......................... $(45,333) $ 20,118 $(25,215) $ 56,585
======== ======== ======== ========
PER COMMON SHARE:
Income from continuing
operations....................... $ 1.80
========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING........................ 31,474
========
YEAR ENDED DECEMBER 31, 1998
-------------------------------------
PRO FORMA CONSOLIDATED
ADJUSTMENTS PRO FORMA
----------- ------------
NET SALES............................ $ -- $1,166,960
-------- ----------
OPERATING COSTS AND EXPENSES
Cost of sales...................... 4,311 (6) 973,914
(11,700) (7)
9,312 (8)
(10,522) (9)
Certain litigation settlements..... -- --
Other operating costs and
expenses......................... -- 95,737
-------- ----------
Total operating expenses......... (8,599) 1,069,651
-------- ----------
OPERATING INCOME (LOSS).............. 8,599 97,309
-------- ----------
OTHER EXPENSE (INCOME)
Interest expense................... 41,616 (10) 72,483
Interest income.................... -- (49)
Other expense, net................. -- 9,500
-------- ----------
41,616 81,934
-------- ----------
INCOME (LOSS) BEFORE INCOME TAXES.... (33,017) 15,375
INCOME TAX PROVISION (BENEFIT)....... (12,216) (4) 4,806
-------- ----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS......................... $(20,801) $ 10,569
======== ==========
PER COMMON SHARE:
Income from continuing
operations....................... $ 0.34
==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING........................ 31,474
==========
2
GEORGIA GULF
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS ENDED SEPTEMBER 30, 1999
-----------------------------------------------
ADJUSTMENTS ADJUSTED
VINYLS TO VINYLS VINYLS
BUSINESS(1) BUSINESS BUSINESS
----------- ----------- --------
NET SALES............................. $374,319 $ -- $374,319
-------- ------- --------
OPERATING COSTS AND EXPENSES
Cost of sales....................... 337,124 -- 337,124
Certain litigation settlements...... (7,000) 7,000 (2) --
Other operating costs and
expenses.......................... 54,755 (2,000) (2) 52,755
-------- ------- --------
Total operating expenses.......... 384,879 5,000 389,879
-------- ------- --------
OPERATING INCOME (LOSS)............... (10,560) (5,000) (15,560)
-------- ------- --------
OTHER EXPENSE (INCOME)
Interest expense.................... 10,318 (10,318) (3) --
Interest income..................... -- -- --
-------- ------- --------
10,318 (10,318) --
-------- ------- --------
INCOME (LOSS) BEFORE INCOME TAXES..... (20,878) 5,318 (15,560)
INCOME TAX PROVISION (BENEFIT)........ (8,038) 1,968 (4) (6,070)
-------- ------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS.......................... $(12,840) $ 3,350 $(9,490)
======== ======= ========
PER COMMON SHARE:
Income from continuing operations...
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING.........................
TWELVE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------------------------
PRO FORMA CONSOLIDATED
GEORGIA GULF(5) ADJUSTMENTS PRO FORMA
--------------- ----------- ------------
NET SALES............................. $759,832 $ -- $1,134,151
-------- -------- ----------
OPERATING COSTS AND EXPENSES
Cost of sales....................... 635,771 4,311 (6) 947,456
(11,700) (7)
(5,635) (8)
(12,415) (9)
Certain litigation settlements...... -- -- --
Other operating costs and
expenses.......................... 38,602 -- 91,357
-------- -------- ----------
Total operating expenses.......... 674,373 (25,439) 1,038,813
-------- -------- ----------
OPERATING INCOME (LOSS)............... 85,459 25,439 95,338
-------- -------- ----------
OTHER EXPENSE (INCOME)
Interest expense.................... 29,763 41,754 (10) 71,517
Interest income..................... (108) -- (108)
-------- -------- ----------
29,655 41,754 71,409
-------- -------- ----------
INCOME (LOSS) BEFORE INCOME TAXES..... 55,804 (16,315) 23,929
INCOME TAX PROVISION (BENEFIT)........ 20,473 (6,037) (4) 8,366
-------- -------- ----------
INCOME (LOSS) FROM CONTINUING
OPERATIONS.......................... $ 35,331 $(10,278) $ 15,563
======== ======== ==========
PER COMMON SHARE:
Income from continuing operations... $ 1.14 $ 0.50
======== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING......................... 30,897 30,897
======== ==========
3
GEORGIA GULF
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS ENDED SEPTEMBER 30, 1999
-----------------------------------------------------------------
ADJUSTMENTS ADJUSTED
VINYLS TO VINYLS VINYLS
BUSINESS(1) BUSINESS BUSINESS GEORGIA GULF(5)
----------- ----------- -------- ---------------
NET SALES............................ $295,192 $ -- $295,192 $573,253
-------- -------- -------- --------
OPERATING COSTS AND EXPENSES
Cost of sales...................... 265,677 -- 265,677 487,122
Certain litigation settlements..... -- -- -- --
Other operating costs and
expenses......................... 40,072 (1,500) (2) 38,572 29,206
-------- -------- -------- --------
Total operating expenses......... 305,749 (1,500) 304,249 516,328
-------- -------- -------- --------
OPERATING INCOME (LOSS).............. (10,557) 1,500 (9,057) 56,925
-------- -------- -------- --------
OTHER EXPENSE (INCOME)
Interest expense................... 7,598 (7,598) (3) -- 21,827
Interest income.................... -- -- -- (108)
-------- -------- -------- --------
7,598 (7,598) -- 21,719
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES.... (18,155) 9,098 (9,057) 35,206
INCOME TAX PROVISION (BENEFIT)....... (6,989) 3,366 (4) (3,623) 12,850
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS......................... $(11,166) $ 5,732 $(5,434) $ 22,356
======== ======== ======== ========
PER COMMON SHARE:
Income from continuing
operations....................... $ 0.72
========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING........................ 30,919
========
NINE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------
PRO FORMA CONSOLIDATED
ADJUSTMENTS PRO FORMA
----------- ------------
NET SALES............................ $ -- $868,445
-------- --------
OPERATING COSTS AND EXPENSES
Cost of sales...................... 3,233 (6) 730,821
(8,775) (7)
(6,880) (8)
(9,556) (9)
Certain litigation settlements..... -- --
Other operating costs and
expenses......................... -- 67,778
-------- --------
Total operating expenses......... (21,978) 798,599
-------- --------
OPERATING INCOME (LOSS).............. 21,978 69,846
-------- --------
OTHER EXPENSE (INCOME)
Interest expense................... 31,381 (10) 53,208
Interest income.................... -- (108)
-------- --------
31,381 53,100
-------- --------
INCOME (LOSS) BEFORE INCOME TAXES.... (9,403) 16,746
INCOME TAX PROVISION (BENEFIT)....... (3,479) (4) 5,748
-------- --------
INCOME (LOSS) FROM CONTINUING
OPERATIONS......................... $ (5,924) $ 10,998
======== ========
PER COMMON SHARE:
Income from continuing
operations....................... $ 0.36
========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING........................ 30,919
========
4
GEORGIA GULF
PRO FORMA CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
AS OF SEPTEMBER 30, 1999
-------------------------------------------------------------------
ADJUSTMENTS ADJUSTED
VINYLS TO VINYLS VINYLS
BUSINESS(11) BUSINESS BUSINESS GEORGIA GULF(11)
------------ ----------- -------- ----------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents........ $ 15 $ -- $ 15 $ 3,213
Receivables, net of allowance for
doubtful accounts.............. 74,037 -- 74,037 64,076
Inventories...................... 41,544 -- 41,544 67,755
Other current assets............. 888 -- 888 9,276
-------- -------- -------- --------
Total current assets........... 116,484 -- 116,484 144,320
-------- -------- -------- --------
PROPERTY, PLANT AND EQUIPMENT,
net.............................. 218,400 (2,219) (12) 216,181 365,924
-------- -------- -------- --------
OTHER ASSETS....................... 1,173 1,173 116,428
NET ASSETS FROM DISCONTINUED
OPERATIONS....................... -- -- -- 3,532
-------- -------- -------- --------
Total other assets............. 1,173 -- 1,173 119,960
-------- -------- -------- --------
Total assets................... $336,057 $ (2,219) $333,838 $630,204
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term
debt........................... $ -- $ -- $ -- $ --
Accounts payable................. 34,289 34,289 78,963
Accrued liabilities.............. 15,133 -- 15,133 29,594
-------- -------- -------- --------
Total current liabilities...... 49,422 -- 49,422 108,557
-------- -------- -------- --------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current
maturities....................... -- -- -- 396,525
DEFERRED INCOME TAXES.............. 48,285 (48,285) (12) -- 90,861
OTHER LONG-TERM LIABILITIES........ 5,875 (5,875) (12) -- --
STOCKHOLDERS' EQUITY............... 232,475 51,941 (12) 284,416 34,261
-------- -------- -------- --------
Total liabilities and
stockholders' equity......... $336,057 $ (2,219) $333,838 $630,204
======== ======== ======== ========
AS OF SEPTEMBER 30, 1999
-------------------------------------
PRO FORMA CONSOLIDATED
ADJUSTMENTS PRO FORMA
----------- ------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents........ $ (3,228) (16) $ --
Receivables, net of allowance for
doubtful accounts.............. -- 138,113
Inventories...................... 6,880 (13) 116,179
Other current assets............. -- 10,164
--------- ----------
Total current assets........... 3,652 264,456
--------- ----------
PROPERTY, PLANT AND EQUIPMENT,
net.............................. (10,431) (13) 679,454
107,780 (14)
--------- ----------
OTHER ASSETS....................... (1,173) (13) 131,928
15,500 (15)
NET ASSETS FROM DISCONTINUED
OPERATIONS....................... -- 3,532
--------- ----------
Total other assets............. 14,327 135,460
--------- ----------
Total assets................... $ 115,328 $1,079,370
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUIT
CURRENT LIABILITIES
Current maturities of long-term
debt........................... $ 22,000 $ 22,000
Accounts payable................. -- 113,252
Accrued liabilities.............. -- 44,727
--------- ----------
Total current liabilities...... 22,000 179,979
--------- ----------
LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current
maturities....................... 649,344 (16) 774,269
(271,600) (17)
DEFERRED INCOME TAXES.............. -- 90,861
OTHER LONG-TERM LIABILITIES........ -- --
STOCKHOLDERS' EQUITY............... (284,416) (18) 34,261
--------- ----------
Total liabilities and
stockholders' equity......... $ 115,328 $1,079,370
========= ==========
5
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL DATA
(UNAUDITED)
(1) Represents the results of operations of the vinyls business of CONDEA Vista
for the periods presented. CONDEA Vista's fiscal year end is June 30;
therefore, all periods presented have been conformed with Georgia Gulf's
year-end of December 31.
(2) Represents elimination of litigation settlements relating to environmental
contamination and other environmental matters relating to the Lake Charles
VCM facility and other related costs and income items pertaining to specific
legal actions that Georgia Gulf did not assume as part of the acquisition of
the vinyls business of CONDEA Vista.
(3) Represents elimination of interest expense allocated to the vinyls business
of CONDEA Vista.
(4) Reflects the income tax effect of the adjustments, applying a combined
federal and state statutory tax rate of 37%.
(5) Represents the results of operations of Georgia Gulf for the periods
presented.
(6) Reflects depreciation on the co-generation facility acquired through
termination of the co-generation operating lease agreement, based on a
purchase price of $107.8 million and a 25 year useful life. Interest expense
related to the acquisition of the co-generation facility is reflected in
note 10.
(7) Reflects the elimination of lease expense related to the co-generation
facility discussed in note 6.
(8) Reflects changes to cost of sales to restate the inventory of the vinyls
business of CONDEA Vista to a first-in-first-out ("FIFO") basis.
(9) Reflects net reduction in depreciation and amortization expense based on
the purchase price allocation of the vinyls business of CONDEA Vista to
property, plant and equipment ("PP&E").
TWELVE MONTHS
NINE MONTHS ENDED ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ ------------------ -----------------
Historical depreciation and
amortization expense of
the vinyls business of
CONDEA Vista.............. $(22,415) $(29,561) $(27,668)
Depreciation expense on
amounts allocated to PP&E
(see note 14)............. $205,750
12 yrs 12,859 17,146 17,146
-------- -------- -------- --------
$ (9,556) $(12,415) $(10,522)
======== ======== ========
6
(10) Pro forma interest expense reflects the following:
TWELVE MONTHS
NINE MONTHS ENDED ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ ------------------- ------------------
Revolving Credit Facility ($38,594 at
7.8%, 7.9% and 8.3%, respectively)... $ 2,257 $ 3,049 $ 3,203
Term Loan A ($225,000 at 7.8%, 7.9% and
8.3%, respectively).................. 13,163 17,775 18,675
Term Loan B ($200,000 at 7.8%, 7.9% and
8.3%, respectively).................. 11,700 15,800 16,600
Notes ($200,000 at 10.4%).............. 15,563 20,750 20,750
Deferred seller payment ($7,750 at
10%)................................. 581 775 775
Amortization of debt acquisition costs
incurred in connection with the
issuance of the new debt............. 1,550 2,067 2,067
-------- -------- --------
44,814 60,216 62,070
Less: interest expense of existing
indebtedness to be repaid with new
debt issuances....................... (13,433) (18,462) (20,454)
-------- -------- --------
$ 31,381 $ 41,754 $ 41,616
======== ======== ========
A 0.125% increase or decrease in the weighted average interest rate
would change interest expense by $451 for the nine months ended
September 30, 1999 and $601 for the twelve months ended September 30,
1999 and the year ended December 31, 1998.
(11) Represents the historical assets and liabilities of the vinyls business of
CONDEA Vista and Georgia Gulf as of September 30, 1999.
(12) Reflects elimination of assets and liabilities not acquired from the vinyls
business of CONDEA Vista and the net impact on stockholders' equity.
(13) Reflects the preliminary allocation of the purchase price of the vinyls
business of CONDEA Vista including a purchase price adjustment of $8,942 for
excess working capital based on working capital of the vinyls business as of
September 30, 1999. The purchase price is subject to a working capital
adjustment as of the closing date. Adjustments to allocate the vinyls
business of CONDEA Vista purchase price include the following:
Adjust vinyls business of CONDEA Vista valuation of
inventory (LIFO) to be in accordance with Georgia Gulf
accounting policies (FIFO)................................ $ 6,880
========
Removal of other assets of vinyls business of CONDEA
Vista..................................................... $ (1,173)
========
Allocation of remaining purchase price to property, plant
and equipment ("PP&E") as follows:
Purchase price allocation to PP&E......................... $ 202,750
Transaction costs allocated to PP&E....................... 3,000
Net book value of PP&E acquired........................... (216,181)
---------
$(10,431)
========
(14) Reflects the acquisition of the co-generation facility acquired through
termination of the co-generation operating lease agreement.
(15) Reflects estimated debt acquisition costs of $15,500 to be deferred and
amortized over the life of the related debt.
7
(16) Reflects the issuance of debt related to the acquisition of the vinyls
business of CONDEA Vista.
Revolving Credit Facility, net of reduction in cash......... $ 38,594
Term Loan A................................................. 225,000
Term Loan B................................................. 200,000
10 3/8% notes............................................... 200,000
Deferred seller payment..................................... $ 10,000
less discount, as deferred seller payment is
noninterest-bearing..................................... (2,250)
7,750
---------
$ 671,344
=========
(17) Reflects repayment of existing revolving credit facility ($171,600) and
existing term loan agreement ($100,000).
(18) Reflects elimination of existing stockholders' equity of the vinyls
business of CONDEA Vista.
8