We are a leading North American manufacturer and an international marketer of chlorovinyl and aromatics chemicals and also manufacture and market vinyl-based building and home improvement products. Our chlorovinyls and aromatics chemical products are sold for further processing into a wide variety of end-use applications, including plastic pipe and pipe fittings, siding and window frames, bonding agents for wood products, high-quality plastics, acrylic sheeting and coatings for wire and cable. Our building products segment manufactures window and door profiles, mouldings, siding, pipe and pipe fittings and deck products and markets vinyl-based building and home improvement products under the Royal Building Products and Exterior Portfolio brand names.

We have three reportable segments through which we manage our operating activities: (i) chlorovinyls; (ii) building products; and (iii) aromatics. These three segments reflect the organization used by our management for internal reporting. The chlorovinyls segment consists of a highly integrated chain of electrovinyl products, which includes chlorine, caustic soda, VCM and vinyl resins, and our compound products consisting of compound additives and vinyl compounds. Our vinyl-based building and home improvement products, including window and door profiles and mouldings products and outdoor building products consisting of siding, pipe and pipe fittings and deck products are managed within the building products segment. The aromatics segment is also integrated and includes cumene and the co-products phenol and acetone.

Unless the contract otherwise requires, references to "Georgia Gulf," the "Company," "we," "our" or "us" means Georgia Gulf Corporation and its consolidated subsidiaries.

Proposed Merger

On July 18, 2012, Georgia Gulf Corporation, PPG Industries, Inc. ("PPG"), Eagle Spinco Inc., a wholly-owned subsidiary of PPG ("Spinco"), and Grizzly Acquisition Sub, Inc., a wholly-owned subsidiary of the Company ("Merger Sub"), entered into an Agreement and Plan of Merger (as amended, the "Merger Agreement") pursuant to which the Company will acquire PPG's chlor-alkali and derivatives business (the "Business") in a Reverse Morris Trust transaction (the "Merger"). Prior to the Merger and pursuant to a Separation Agreement (the "Separation Agreement"), dated as of July 18, 2012, between PPG and Spinco, PPG will, among other things, transfer the Business to Spinco and, thereafter, PPG will distribute to PPG stockholders all of the issued and outstanding shares of Spinco (the "Distribution"). Immediately following the Distribution, Spinco will be merged with the Company or one of the Company's subsidiaries.

Upon consummation of the transactions contemplated by the Merger Agreement and the Separation Agreement, the shares of Spinco common stock then outstanding are expected to be automatically converted into the greater of 35.2 million shares of the Company's common stock (the "Company Common Stock") or 50.5 percent of the Company Common Stock. The Company's existing stockholders are expected to continue to hold the remaining approximately 49.5 percent of the Company's Common Stock.

The transaction value of approximately $2.2 billion consists of $900 million of cash to be paid to PPG, approximately $95 million of debt to be assumed by Georgia Gulf, about $87 million of non-controlling interest, and Georgia Gulf shares to be received by PPG shareholders valued at approximately $1.3 billion based on Georgia Gulf's closing stock sale price of $36.22 on September 28, 2012.

The Company has obtained commitments from a consortium of banks led by Barclays Capital and JP Morgan for the initial financing of the transaction that is expected to be in the form of a secured

term loan and approximately $675 million of unsecured notes. The unsecured notes are expected to mature eight years after the date of issuance and be subject to a five year no-call period.

Georgia Gulf expects to incur significant, one-time costs in connection with the transactions, including approximately (1) $25 to $30 million of advisory, legal, accounting and other professional fees related to the transactions,
(2) $30 to $40 million of financing related fees and (3) $55 million in transition and integration expenses, such as consulting professionals' fees, information technology implementation costs and relocation and severance costs, that Georgia Gulf management believes are necessary to realize approximately $115.0 million of annualized cost synergies within two years from the consummation of the transactions. We have incurred approximately $13.1 million and $25.1 million during the three and nine months ended September 30, 2012 in professional fees primarily associated with the proposed merger with the chlor-alkali and derivatives business of PPG and to a lesser degree a subsequently withdrawn unsolicited proposal by Westlake Chemical Corporation to acquire the company. These costs are included in transaction related costs, restructuring expense and other, net, in the condensed consolidated statement of income for the three and nine months ended September 30, 2012. The fees associated with the proposed merger with the chlor-alkali and derivatives business of PPG are included in the $110 to $125 million estimated one-time fees discussed above that are associated with the transaction.

The consummation of the Merger is subject to various customary closing conditions, including (i) approval by the Company's stockholders,
(ii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, which expiration occurred on September 14, 2012, (iii) completion of the Distribution, (iv) confirmation by applicable tax authorities of the intended tax treatment of the transaction,
(v) obtaining other regulatory approvals necessary to complete the Merger, and
(vi) the absence of any law or order from any court or governmental authority restraining, enjoining or prohibiting the transaction. Completion of the transaction is anticipated to occur by early 2013, although there can be no assurance the transaction will occur within the expected time frame or at all.

Results of Operations

    The following table sets forth our consolidated statement of income data for
each of the three and nine month periods ended September 30, 2012 and 2011, and
the percentage of net sales of each line item for the three and nine month
periods presented.

                                  Three months ended                         Nine months ended
                          September 30,        September 30,        September 30,          September 30,
(Dollars in millions)         2012                 2011                 2012                   2011
Net sales               $ 813.5     100.0 %  $ 929.6     100.0 % $ 2,541.1     100.0 %  $ 2,549.3     100.0 %
Cost of sales             673.2      82.8 %    831.8      89.5 %   2,210.5      87.0 %    2,292.8      89.9 %

Gross margin              140.3      17.2 %     97.8      10.5 %     330.6      13.0 %      256.5      10.1 %
Selling, general and
administrative
expense                    53.5       6.6 %     43.4       4.6 %     152.9       6.0 %      130.1       5.2 %
Gain on sale of asset      (1.9 )    (0.2 )%       -         - %     (19.3 )    (0.8 )%      (1.2 )       - %
Transaction related
costs, restructuring
and other, net             14.8       1.8 %        -         - %      26.4       1.0 %        1.0         - %

Operating income           73.9       9.0 %     54.4       5.9 %     170.6       6.7 %      126.6       4.9 %
Interest expense, net      14.6       1.8 %     16.7       1.8 %      43.6       1.7 %       50.1       2.0 %
Loss on redemption of
debt                          -         - %        -         - %         -         - %        1.1         - %
Foreign exchange loss
(gain)                      0.2         - %     (0.2 )       - %       0.6         - %        0.8         - %
Provision for income
taxes                      19.8       2.4 %      3.5       0.4 %      38.1       1.5 %       13.5       0.5 %

Net income              $  39.3       4.8 %  $  34.4       3.7 % $    88.3       3.5 %  $    61.1       2.4 %

The following table sets forth certain financial data by reportable segment for each of the three and nine month periods ended September 30, 2012 and 2011.

                                   Three months ended                         Nine months ended
                            September 30,       September 30,        September 30,         September 30,
(Dollars in millions)           2012                2011                 2012                  2011
Net sales
Chlorovinyls products     $ 329.1      40.5 % $ 347.2      37.4 % $   998.5      39.3 % $   997.2      39.1 %
Building products           246.2      30.3 %   262.5      28.2 %     685.8      27.0 %     694.2      27.2 %
Aromatics products          238.2      29.2 %   319.9      34.4 %     856.8      33.7 %     857.9      33.7 %

Total net sales           $ 813.5     100.0 % $ 929.6     100.0 % $ 2,541.1     100.0 % $ 2,549.3     100.0 %

Operating income (loss)
Chlorovinyls products     $  73.8             $  46.3             $   160.2             $   121.8
Building products            14.7                14.3                  23.7                  19.1
Aromatics products           11.1                 1.7                  46.2                  14.0
Unallocated corporate       (25.7 )              (7.9 )               (59.5 )               (28.3 )

Total operating income    $  73.9             $  54.4             $   170.6             $   126.6

Three Months Ended September 30, 2012 Compared With Three Months Ended September 30, 2011

Net Sales. For the three months ended September 30, 2012, net sales totaled $813.5 million, a decrease of 12 percent compared to $929.6 million for the same quarter last year. The net sales decrease was primarily a result of a decrease in our overall sales volume of 5 percent and a decrease in our overall sales price of 8 percent (also 8 percent on a constant currency basis). Our overall sales volume decrease was primarily in our aromatics segment due to a decrease in export sales volume partially offset by an increase in vinyl resin export sales volume. Our overall sales price decrease was primarily in our chlorovinyls and aromatics segments due primarily to lower feedstock costs.

Gross Margin. Total gross margin percentage rose to 17 percent of net sales for the three months ended September 30, 2012 from 11 percent of net sales for the three months ended September 30, 2011. This increase in gross margin percentage was primarily due to increased gross margins in all segments as decreases in overall feedstock costs more than offset decreases in our overall sales prices. The $42.5 million gross margin increase was primarily due to a decrease in our overall raw material costs and an increase in our sales volume for our chlorovinyls segment offset partially by decreased sales prices for our chlorovinyls and aromatics segments and lower sales volumes for our aromatics and building products segments. Our primary raw materials and natural gas costs in our chlorovinyls and aromatics segments normally track industry prices. IHS, Inc., a non-commissioned, independent source for industry data, ("IHS"), publicly reported a price decrease of 45 percent for propylene, 15 percent for ethylene, 25 percent for chlorine, and 32 percent for natural gas and an increase of 11 percent for benzene from the third quarter of 2011 compared to the third quarter of 2012.

Selling, General and Administrative Expenses. Selling, general and administrative expenses totaled $53.5 million for the three months ended September 30, 2012, a 23 percent increase from the $43.4 million for the three months ended September 30, 2011. This selling, general and administrative expenses increase of $10.1 million was primarily due to a $9.9 million increase in compensation related costs.

Gain on sale of assets and transaction related costs, restructuring and other, net. Gain on sale of assets, transaction related costs, restructuring and other, net, increased to $12.9 million for the three months ended September 30, 2012 primarily due to a $13.1 million expense related to professional fees associated with the proposed merger discussed above partially offset by a gain on sale of assets of $1.9 million.

Interest Expense, net. Interest expense, net decreased to $14.6 million for the three months ended September 30, 2012 from $16.7 million for the three months ended September 30, 2011. This decrease in interest expense, net of $2.1 million was primarily attributable to a lower overall debt balance during the three months ended September 30, 2012 compared to the same period in 2011. During 2011 we repaid an aggregate of approximately $81.2 million of debt.

Provision for income taxes. The provision for income taxes was $19.8 million for the three months ended September 30, 2012 compared with a provision for income taxes of $3.5 million for the three months ended September 30, 2011. The increase in the provision for income taxes primarily resulted from the increase in income. Our effective income tax rate for the three months ended September 30, 2012 was a provision of 33.4 percent as compared to a provision of 9.3 percent for the three months ended September 30, 2011. The difference in the effective tax rate as compared to the U.S. statutory federal income tax rate in 2012 was primarily due to provisions for state tax and various permanent differences including deductions for manufacturing activities, certain merger related costs, and the favorable resolution of various uncertain tax positions of $0.8 million. The difference in the effective tax rate as compared to the U.S. statutory federal income tax rate in 2011 was primarily due to the release of the valuation allowance that resulted from the use of Canadian net operating losses, and the tax benefit from the favorable resolution of $13.6 million of various uncertain tax positions.

Chlorovinyls Segment

Net Sales. Net sales totaled $329.1 million for the three months ended September 30, 2012, a decrease of 5 percent compared with net sales of $347.2 million for the same quarter last year. The net sales decrease was a result of a decrease in our overall sales prices of 7 percent compared to the three months ended September 30, 2011 partially offset by an overall sales volume increase of 2 percent. Our overall sales price decrease was primarily due to the decrease in the sales price of vinyl resin of 18 percent which is attributable primarily to lower feedstock prices. Our overall sales volume increase of 2 percent was mainly attributable to increased demand for our vinyl resin exports. North American vinyl resin industry sales volume increased 10 percent as a result of an increase in domestic sales volume of 14 percent and an increase in export sales volume of 5 percent, according to statistics from the American Chemistry Council Plastics Industry Producers Statistics Group, a non-commissioned, independent source for industry data, ("PIPS"), made publicly available in October 2012.

Operating Income. Operating income increased by $27.5 million to $73.8 million for the three months ended September 30, 2012 from $46.3 million for the three months ended September 30, 2011. This operating income increase was due to lower ethylene, chlorine and natural gas costs and higher export sales volumes of our vinyl resin products partially offset by lower sales prices for vinyl resins primarily due to lower feedstock costs. IHS reported that industry prices of our primary feedstocks ethylene, chlorine and natural gas decreased 15 percent, 25 percent and 32 percent, respectively, from the same period last year. Our chlorovinyls operating rate was flat at about 82 percent for the third quarter of 2012 and 2011.

Building Products Segment

Net Sales. Net sales totaled $246.2 million for the three months ended September 30, 2012, a decrease of 6 percent compared to $262.5 million for the same quarter last year (a decrease of 5 percent on a constant currency basis). The net sales decrease was driven by weaker demand in the U.S., in part due to the discontinuing of the fence product line effective March 2012, partially offset by higher demand in Canada. After adjusting for the impact of the fence product line, sales volume declined 3 percent in the quarter. For the third quarter of 2012, our building products segment's geographical sales to the U.S. decreased to 43 percent while Canadian sales increased to 56 percent, compared to U.S. sales of 47 percent and Canadian sales of 53 percent for the same period in 2011.

Operating Income. Operating income of $14.7 million for the three months ended September 30, 2012 increased by $0.4 million from an operating income of $14.3 million for the three months ended September 30, 2011. The increase in operating income was driven by improved gross margin due to lower material costs, partially offset by higher compensation costs. Operating income also improved by $0.9 million as a result of the closure of the Milford, Indiana manufacturing facility at the end of March 2012.

Aromatics Segment

Net Sales. Net sales were $238.2 million for the three months ended September 30, 2012, a decrease of 26 percent compared to $319.9 million for the same quarter last year. The net sales decrease was primarily a result of a decrease in our overall sales volume of 16 percent and a sales price decrease of 12 percent as compared to the three months ended September 30, 2011. Our overall aromatics sales volumes decreased as a result of decreases in the export sales volume of phenol and acetone of 45 percent, partially offset by an increase in the sales volume of cumene of about 6 percent due to increased domestic contract sales. Our overall average sales prices decreased as a result of a decrease in the price of cumene of 12 percent, and a decrease in the price of phenol and acetone of 6 percent. The sales price decreases reflected lower costs for the feedstock propylene.

Operating income. Operating income increased by $9.4 million to $11.1 million for the three months ended September 30, 2012 from $1.7 million for the three months ended September 30, 2011. This increase in operating income was due primarily to a decrease in our raw materials costs that more than offset lower sales prices and volumes for most of our aromatics products. In addition, our operating income was negatively impacted last year by raw material prices decreasing during the third quarter of 2011 and our inability to recover previously purchased raw materials costs in a decreasing sales price environment due to the time lag between the purchase of raw materials and the sale of the related finished goods. Overall raw material costs decreased 12 percent from the third quarter of 2011 to the same quarter of this year, primarily as a result of decreases in propylene costs. IHS, Inc. reported that industry prices of our primary feedstock, propylene, decreased 45 percent and benzene increased 11 percent, from the third quarter of last year to the same quarter this year. Our aromatics operating rate decreased from 90 percent for the third quarter of 2011 to about 72 percent for the same quarter of this year.

Nine Months Ended September 30, 2012 Compared With Nine Months Ended September 30, 2011

Net Sales. For the nine months ended September 30, 2012, net sales totaled $2,541.1 million compared to $2,549.3 million for the same period last year. Net sales remained relatively flat year over year primarily as a result of an increase in our overall sales volume of 2 percent being offset by a decrease in our overall sales price of 2 percent (also 2 percent on a constant currency basis). Our overall sales volume increase was primarily a result of increases in the sales volumes of our chlorovinyls and aromatics segments. Our overall sales volume increase was impacted by stronger demand in both Canada and the U.S. and additional sales from the Exterior Portfolio acquisition in February 2011, offset by planned and unplanned outages at our Plaquemine, Louisiana chlor-alkali facility during the first nine months of 2012. The overall sales price decrease was attributable primarily to our aromatics and chlorovinyl segments and primarily due to lower feedstocks costs in those segments.

Gross Margin. Total gross margin percentage increased to 13 percent of net sales for the nine months ended September 30, 2012 from 10 percent of net sales for the nine months ended September 30, 2011. This increase in gross margin percentage was primarily due to margin expansion in our chlorovinyls, aromatics, and building products segments as a decline in our feedstocks prices more than offset lower sales prices. The $74.1 million gross margin increase was primarily due to (i) our overall margin expansion as a result of the decrease in feedstocks costs exceeding the sales price decrease and (ii) an increase in our sales volume for our aromatics and chlorovinyls segments offset

partially by increased maintenance costs for our chlorovinyls segment. Our primary feedstocks and natural gas costs in our chlorovinyls and aromatics segments normally track industry prices. IHS, Inc. reported a price decrease of 31 percent for propylene, 4 percent for ethylene, 21 percent for chlorine, and 37 percent for natural gas from the first nine months of 2011 to the first nine months of 2012, while the benzene price increased 3 percent from the first nine months of 2011 to the same period of this year.

Selling, General and Administrative Expenses. Selling, general and administrative expenses totaled $152.9 million for the nine months ended September 30, 2012, an 18 percent increase from the $130.1 million for the nine months ended September 30, 2011. This selling, general and administrative expenses increase of $22.8 million is primarily due to: (i) $14.1 million increase in compensation related costs, (ii) $4.4 million of non-income tax reserves returned to income primarily in our building products segment during the first quarter of 2011 as the exposure was no longer probable, (iii) a $2.9 million benefit due to improved bad debt experience in the first nine months of 2011 that did not repeat in the same period of this year,
(iv) $1.5 million of increased advertising and promotional expenses related to our building products segment, and (v) a $1.3 million unfavorable currency impact on our costs in Canada resulting from the strengthening of the Canadian dollar against the U.S. dollar.

Gain on sale of assets, transaction related costs, restructuring and other, net. Gain on sale of asset, transaction related costs, restructuring and other, net, increased by $7.2 million to a charge of $7.1 million for the first nine months of 2012 primarily due to: (i) $25.1 million in expense incurred during the first nine months of 2012 related to professional fees associated with the proposed merger discussed above and a subsequently withdrawn unsolicited proposal from Westlake Chemical Corporation to acquire the company, and (ii) a $17.4 million gain during the first nine months of 2012 on the sale of our air separation plant in Plaquemine, Louisiana.

Interest Expense, net. Interest expense, net decreased to $43.6 million for the nine months ended September 30, 2012 from $50.1 million for the nine months ended September 30, 2011. This decrease in interest expense, net of $6.5 million was primarily attributable to a lower overall debt balance during the nine months ended September 30, 2012 compared to the same period in 2011. During 2011 we repaid an aggregate of approximately $81.2 million of debt.

Loss on redemption of debt. During the nine months ended September 30, 2011, we redeemed all of our 7.125% senior notes due 2013 and 9.5% senior notes due 2014 that remained outstanding for the aggregate principal amount of $22.2 million plus redemption cost, resulting in a loss of $1.1 million primarily related to the early redemption cost.

Provision for income taxes. The provision for income taxes was $38.1 million for the nine months ended September 30, 2012 compared with the provision for income taxes of $13.5 million for the nine months ended September 30, 2011. The change in the provision for income taxes resulted primarily from the increase in income offset by $5.2 million related to the resolution of uncertain tax positions. Our effective income tax rate for the nine months ended September 30, 2012 and 2011 was 30.2 percent and 18.1 percent, respectively. The difference in the effective tax rate as compared to the U.S. statutory federal income tax rate in 2012 was primarily due to the favorable resolution of uncertain tax positions of $5.2 million, various permanent differences including deductions for manufacturing activities and the impact of certain merger related costs. The difference in the effective tax rate as compared to the U.S. statutory federal income tax rate in 2011 was primarily due to the release of a valuation allowance that results from the use of Canadian net operating losses and a tax benefit from the favorable resolution of $13.9 million of various uncertain tax positions primarily related to pre Royal Group acquisition tax positions.

Chlorovinyls Segment

Net Sales. Net sales totaled $998.5 million for the nine months ended September 30, 2012 compared with net sales of $997.2 million for the same period last year. Net sales were flat as a result of an increase in our overall sales prices of 2 percent offset by a sales volume decrease of 2 percent as compared to the nine months ended September 30, 2011. Our overall sales price increase was primarily due to the increase in the sales price of caustic soda and vinyl compounds offset by a decrease in the vinyl resin sales price due to lower feedstocks costs. According to IHS, Inc., the caustic soda industry sales price increased 14 percent from the first nine months of 2011 to the first nine months of 2012. Our vinyl compounds sales prices increased about 5 percent from the first nine months of 2011 to the first nine months of 2012. Our overall chlorovinyls sales volume decrease of 2 percent was due to planned and unplanned outages at our Plaquemine, Louisiana chlor-alkali facility during the nine months ended September 30, 2012 which was partially offset by reduced operating rates last year that were due to an unplanned chlor-alkali plant outage for maintenance and a resulting force majeure in our PVC business and logistical issues due to the high water on the Mississippi River system. North American vinyl resin industry sales volume increased 6 percent as a result of an increase in domestic sales volume of 7 percent and an increase in export sales volume of 4 percent, according to statistics from PIPS made publicly available in October 2012.

Operating Income. Operating income increased by $38.4 million to $160.2 million for the nine months ended September 30, 2012 from $121.8 million for the nine months ended September 30, 2011. This operating income increase was due primarily to the $17.4 million gain from the sale of our air separation unit in Plaquemine, Louisiana. After considering the impact of the $17.4 million gain from the sale of our air separation unit, we experienced $20.9 million higher . . .