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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
 
þ 	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 
    	For the fiscal year ended October 31, 2011	
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: 001-00566

(Exact name of Registrant as specified in its charter)

State of Delaware	 	31-4388903	
(State or other jurisdiction of
incorporation or organization)	 	(I.R.S. Employer
Identification No.)	
		
425 Winter Road, Delaware, Ohio	 	43015	
(Address of principal executive offices)	 	(Zip Code)	
Registrant’s telephone number, including area code 740-549-6000
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	  	 	  	Name of Each Exchange on Which Registered	
Class A Common Stock	  		  	New York Stock Exchange	
Class B Common Stock	  		  	New York Stock Exchange	
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes    þ     No    ¨
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes    ¨     No    þ
Indicate by check mark whether the Registrant (1) has filed all reports 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    þ     No   ¨
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).    Yes    þ     No    ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	 	Large accelerated filer	 	þ	 	Accelerated filer	 	¨	 	Non-accelerated filer	 	¨	 	Smaller reporting company	 	¨	
	 	(Do not check if a smaller reporting company)	
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange).    Yes   ¨     No   þ
The aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the Registrant’s most recently completed second fiscal quarter was as follows:

Non-voting common equity (Class A Common Stock) - 1,497,294,778	
Voting common equity (Class B Common Stock) - 329,287,284	
The number of shares outstanding of each of the Registrant’s classes of common stock, as of December 9, 2011, was as follows:

Class A Common Stock – 24,978,098	
Class B Common Stock – 22,120,966	
Listed hereunder are the documents, portions of which are incorporated by reference, and the parts of this Form 10-K into which such portions are incorporated:
1. The Registrant’s Definitive Proxy Statement for use in connection with the Annual Meeting of Stockholders to be held on February 27, 2012 (the “2012 Proxy Statement”), portions of which are incorporated by reference into Parts II and III of this Form 10-K. The 2012 Proxy Statement will be filed within 120 days of October 31, 2011.

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IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical facts, included in this Annual Report on Form 10-K of Greif, Inc. and subsidiaries (this “Form 10-K”) or incorporated herein, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs, goals and plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “believe,” “continue,” “on track” or “target” or the negative thereof or variations thereon or similar terminology. All forward-looking statements made in this Form 10-K are based on information currently available to our management. Forward-looking statements speak only as the date the statements were made. Although we believe that the expectations reflected in forward-looking statements have a reasonable basis, we can give no assurance that these expectations will prove to be correct. Forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. For a discussion of the most significant risks and uncertainties that could cause our actual results to differ materially from those projected, see “Risk Factors” in Item 1A of this Form 10-K. The risks described in this Form 10-K are not all inclusive, and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements made in this Form 10-K are expressly qualified in their entirety by reference to such risk factors. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
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 Index to Form 10-K Annual Report for the Year ended October 31, 2011

Form
10-K Item	  	   	 	  	Description	  	Page	 	
Part I	  	 	1.	  	  	Business	  	 	5	  	
				
	  				  	(a) General Development of Business	  	 	5	  	
				
	  				  	(b) Financial Information about Segments	  	 	5	  	
				
	  				  	(c) Narrative Description of Business	  	 	5	  	
				
	  				  	(d) Financial Information about Geographic Areas	  	 	7	  	
				
	  				  	(e) Available Information	  	 	7	  	
				
	  				  	(f) Other Matters	  	 	8	  	
				
	  	 	1A.	  	  	Risk Factors	  	 	8	  	
				
	  	 	1B.	  	  	Unresolved Staff Comments	  	 	14	  	
				
	  	 	2.	  	  	Properties	  	 	14	  	
				
	  	 	3.	  	  	Legal Proceedings	  	 	16	  	
				
	  	 	4.	  	  	(Reserved)	  	 	16	  	
				
Part II	  	 	5.	  	  	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	  	 	17	  	
				
	  	 	6.	  	  	Selected Financial Data	  	 	19	  	
				
	  	 	7.	  	  	Management’s Discussion and Analysis of Financial Condition and Results of Operations	  	 	19	  	
				
	  	 	7A.	  	  	Quantitative and Qualitative Disclosures about Market Risk	  	 	46	  	
				
	  	 	8.	  	  	Financial Statements and Supplementary Data	  	 	50	  	
				
	  				  	Consolidated Statements of Income	  	 	50	  	
				
	  				  	Consolidated Balance Sheets	  	 	51	  	
				
	  				  	Consolidated Statements of Cash Flows	  	 	53	  	
				
	  				  	Consolidated Statements of Changes in Shareholders’ Equity	  	 	54	  	
				
	  				  	Note 1 - Basis of Presentation and Summary of Significant Accounting Policies	  	 	55	  	
				
	  				  	Note 2 - Acquisitions and Other Significant Transactions	  	 	64	  	
				
	  				  	Note 3 - Sale of Non-United States Accounts Receivable	  	 	65	  	
				
	  				  	Note 4 - Inventories	  	 	67	  	
				
	  				  	Note 5 - Net Assets Held for Sale	  	 	67	  	
				
	  				  	Note 6 - Goodwill and Other Intangible Assets	  	 	67	  	
				
	  				  	Note 7 - Restructuring Charges	  	 	69	  	
				
	  				  	Note 8 - Significant Nonstrategic Timberland Transactions and Consolidation of Variable Interest Entities	  	 	70	  	
				
	  				  	Note 9 - Long-Term Debt	  	 	72	  	
				
	  				  	Note 10 - Financial Instruments and Fair Value Measurements	  	 	74	  	
				
	  				  	Note 11 - Stock-Based Compensation	  	 	77	  	
				
	  				  	Note 12 - Income Taxes	  	 	78	  	
				
	  				  	Note 13 - Retirement Plans and Postretirement Health Care and Life Insurance Benefits	  	 	82	  	
				
	  				  	Note 14 - Contingent Liabilities and Environmental Reserves	  	 	88	  	
				
	  				  	Note 15 - Earnings Per Share	  	 	89	  	
				
	  				  	Note 16 - Equity Earnings (Losses) of Unconsolidated Affiliates, Net of Tax and Net Income Attributable to Noncontrolling Interests	  	 	91	  	
				
	  				  	Note 17 - Business Segment Information	  	 	91	  	
				
	  				  	Note 18 - Quarterly Financial Data (Unaudited)	  	 	94	  	
				
	  				  	Note 19 - Correction of Errors and Restatement	  	 	96	  	
				
	  				  	Report of Independent Registered Public Accounting Firm	  	 	98	  	
				
	  	 	9.	  	  	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	  	 	99	  	
 
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Form
10-K Item	  	   	 	  	Description	  	Page	 	
				
	  	 	9A.	  	  	Controls and Procedures	  	 	99	  	
				
	  				  	Report of Independent Registered Public Accounting Firm	  	 	101	  	
				
	  	 	9B.	  	  	Other Information	  	 	103	  	
				
Part III	  	 	10.	  	  	Directors, Executive Officers and Corporate Governance	  	 	103	  	
				
	  	 	11.	  	  	Executive Compensation	  	 	103	  	
				
	  	 	12.	  	  	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	  	 	103	  	
				
	  	 	13.	  	  	Certain Relationships and Related Transactions, and Director Independence	  	 	104	  	
				
	  	 	14.	  	  	Principal Accountant Fees and Services	  	 	104	  	
				
Part IV	  	 	15.	  	  	Exhibits and Financial Statement Schedules	  	 	104	  	
				
	  				  	Signatures	  	 	109	  	
				
Schedules	  				  	Schedule II	  	 	110	  	
				
Exhibits	  				  	Exhibits and Certifications	  				
 
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PART I
 ITEM 1. BUSINESS
 (a) General Development of Business
We are a leading global producer of industrial packaging products and services with manufacturing facilities located in over 55 countries. We offer a comprehensive line of rigid industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and reconditioned containers, and services such as container life cycle services, blending, filling and other packaging services, logistics and warehousing. We are also a leading global producer of flexible intermediate bulk containers and a North American provider of industrial and consumer shipping sacks and multiwall bag products. We also produce containerboard and corrugated products for niche markets in North America. We sell timber to third parties from our timberland in the southeastern United States that we manage to maximize long-term value. We also own timberland in Canada that we do not actively manage. In addition, we sell, from time to time, timberland and special use land, which consists of surplus land, higher and better use (“HBU”) land, and development land. Our customers range from Fortune 500 companies to medium and small-sized companies in a cross section of industries.
We were founded in 1877 in Cleveland, Ohio, as “Vanderwyst and Greif,” a cooperage shop co-founded by one of four Greif brothers. One year after our founding, the other three Greif brothers were invited to join the business, renamed Greif Bros. Company, making wooden barrels, casks and kegs to transport post-Civil War goods nationally and internationally. We later purchased nearly 300,000 acres of timberland to provide raw materials for our cooperage plants. We still own significant timber properties located in the southeastern United States and in Canada. In 1926, we incorporated as a Delaware corporation and made a public offering as The Greif Bros. Cooperage Corporation. In 1951, we moved our headquarters from Cleveland, Ohio to Delaware, Ohio, which is in the Columbus metro-area, where our corporate headquarters are currently located. Since the latter half of the 1900s, we have transitioned from our keg and barrel heading mills, stave mills and cooperage facilities to a global producer of industrial packaging products. Following our acquisition of Van Leer in 2001, a global steel and plastic drum manufacturer, we changed our name to Greif, Inc.
Our fiscal year begins on November 1 and ends on October 31 of the following year. Any references in this Form 10-K to the years 2011, 2010 or 2009, or to any quarter of those years, relate to the fiscal year ending in that year.
As used in this Form 10-K, the terms “Greif,” “our company,” “we,” “us,” and “our” refer to Greif, Inc. and its subsidiaries.
 (b) Financial Information about Segments
We operate in four business segments: Rigid Industrial Packaging & Services; Flexible Products & Services; Paper Packaging; and Land Management. Information related to each of these segments is included in Note 17 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
 (c) Narrative Description of Business
Products and Services
In the Rigid Industrial Packaging & Services segment, we are a leading global provider of rigid industrial packaging products, including steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and reconditioned containers, and services, such as container life cycle services, blending, filling and other packaging services, logistics and warehousing. We sell our industrial packaging products to customers in industries such as chemicals, paints and pigments, food and beverage, petroleum, industrial coatings, agricultural, pharmaceutical and mineral, among others.
In the Flexible Products & Services segment, we are a leading global producer of flexible intermediate bulk containers and a North American provider of industrial and consumer shipping sacks and multiwall bag products. Our flexible intermediate bulk containers consist of a polypropylene-based woven fabric that is partly produced at our production sites, as well as sourced from strategic regional suppliers. Our flexible products are sold globally and service customers and
 
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market segments similar to those as our Rigid Industrial Packaging & Services segment. Additionally, our flexible products significantly expand our presence in the agricultural and food industries, among others. Our industrial and consumer shipping sacks and multiwall bag products are used to ship a wide range of industrial and consumer products, such as seed, fertilizers, chemicals, concrete, flour, sugar, feed, pet foods, popcorn, charcoal and salt, primarily for the agricultural, chemical, building products and food industries.
In the Paper Packaging segment, we sell containerboard, corrugated sheets and other corrugated products to customers in North America in industries such as packaging, automotive, food and building products. Our corrugated container products are used to ship such diverse products as home appliances, small machinery, grocery products, building products, automotive components, books and furniture, as well as numerous other applications. Operations related to our industrial and consumer multiwall bag products have been reclassified to our Flexible Products & Services segment.
In the Land Management segment, we are focused on the active harvesting and regeneration of our United States timber properties to achieve sustainable long-term yields. While timber sales are subject to fluctuations, we seek to maintain a consistent cutting schedule, within the limits of market and weather conditions. We also sell, from time to time, timberland and special use land, which consists of surplus land, HBU land and development land.
As of October 31, 2011, we owned approximately 267,750 acres of timber property in the southeastern United States and approximately 14,700 acres of timber property in Canada.
Customers
Due to the variety of our products, we have many customers buying different types of our products and due to the scope of our sales, no one customer is considered principal in our total operations.
Backlog
We supply a cross-section of industries, such as chemicals, food products, petroleum products, pharmaceuticals and metal products, and must make spot deliveries on a day-to-day basis as our products are required by our customers. We do not operate on a backlog to any significant extent and maintain only limited levels of finished goods. Many customers place their orders weekly for delivery during the week.
Competition
The markets in which we sell our products are highly competitive with many participants. Although no single company dominates, we face significant competitors in each of our businesses. Our competitors include large vertically integrated companies as well as numerous smaller companies. The industries in which we compete are particularly sensitive to price fluctuations caused by shifts in industry capacity and other cyclical industry conditions. Other competitive factors include design, quality and service, with varying emphasis depending on product line.
In both the rigid industrial packaging industry and flexible industrial packaging industry, we compete by offering a comprehensive line of products on a global basis. In the paper packaging industry, we compete by concentrating on providing value-added, higher-margin corrugated products to niche markets. In addition, over the past several years we have closed higher cost facilities and otherwise restructured our operations, which we believe have significantly improved our cost competitiveness.
Compliance with Governmental Regulations Concerning Environmental Matters
Our operations are subject to extensive federal, state, local and international laws, regulations, rules and ordinances relating to pollution, the protection of the environment, the generation, storage, handling, transportation, treatment, disposal and remediation of hazardous substances and waste materials and numerous other environmental laws and regulations. In the ordinary course of business, we are subject to periodic environmental inspections and monitoring by governmental enforcement authorities. In addition, certain of our production facilities require environmental permits that are subject to revocation, modification and renewal.
 
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Based on current information, we believe that the probable costs of the remediation of company-owned property will not have a material adverse effect on our financial condition or results of operations. We believe that we have adequately reserved for our liability for these matters as of October 31, 2011.
We do not believe that compliance with federal, state, local and international provisions, which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has had or will have a material effect upon our capital expenditures, earnings or competitive position. We do not anticipate any material capital expenditures related to environmental control in 2012.
Refer also to Item 7 of this Form 10-K and Note 14 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information concerning environmental expenses and cash expenditures for 2011, 2010 and 2009, and our reserves for environmental liabilities as of October 31, 2011.
Raw Materials
Steel, resin and containerboard are the principal raw materials for the Rigid Industrial Packaging & Services segment, resin is the primary raw material for the Flexible Products & Services segment, and pulpwood, old corrugated containers for recycling and containerboard are the principal raw materials for the Paper Packaging segment. We satisfy most of our needs for these raw materials through purchases on the open market or under short-term and long-term supply agreements. All of these raw materials are purchased in highly competitive, price-sensitive markets, which have historically exhibited price, demand and supply cyclicality. From time to time, some of these raw materials have been in short supply at certain of our manufacturing facilities. In those situations, we ship the raw materials in short supply from one or more of our other facilities with sufficient supply to the facility or facilities experiencing the shortage. To date, raw material shortages have not had a material adverse effect on our financial condition or results of operations.
Research and Development
While research and development projects are important to our continued growth, the amount expended in any year is not material in relation to our results of operations.
Other
Our businesses are not materially dependent upon patents, trademarks, licenses or franchises.
No material portion of our businesses is subject to renegotiation of profits or termination of contracts or subcontracts at the election of a governmental agency or authority.
The businesses of our segments are not seasonal to any material extent.
Employees
As of October 31, 2011, we had approximately 15,660 full time employees, which has increased due to acquisitions in 2011. A significant number of our full time employees are covered under collective bargaining agreements. We believe that our employee relations are generally good.
 (d) Financial Information about Geographic Areas
Our operations are located in North and South America, Europe, the Middle East, Africa and the Asia Pacific region. Information related to each of these areas is included in Note 17 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. Refer to Quantitative and Qualitative Disclosures about Market Risk, included in Item 7A of this Form 10-K.
 (e) Available Information
We maintain a website at www.greif.com. We file reports with the United States Securities and Exchange Commission (“SEC”) and make available, free of charge, on or through our website, our annual reports on Form 10-K, quarterly
 
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reports on Form 10-Q or Form 10-Q/A, current reports on Form 8-K, proxy and information statements and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we have electronically filed such material with, or furnished it to, the SEC.
Any of the materials we file with the SEC may also be read and/or copied at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Information on the operation of the SEC’s Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.
 (f) Other Matters
Our common equity securities are listed on the New York Stock Exchange (“NYSE”) under the symbols GEF and GEF.B. David B. Fischer, our President and Chief Executive Officer, has timely certified to the NYSE that, at the date of the certification, he was unaware of any violation by our Company of the NYSE’s corporate governance listing standards. In addition, Mr. Fischer and Robert M. McNutt, our Senior Vice President and Chief Financial Officer, have provided certain certifications in this Form 10-K regarding the quality of our public disclosures. Refer to Exhibits 31.1 and 31.2 to this Form 10-K.
 
 ITEM 1A.	RISK FACTORS	
Statements contained in this Form 10-K may be “forward-looking” within the meaning of Section 21E of the Exchange Act. Such forward-looking statements are subject to certain risks and uncertainties that could cause our operating results to differ materially from those projected. The following factors, among others, in some cases have affected, and in the future could affect, our actual financial and/or operational performance.
The Current and Future Challenging Global Economy may Adversely Affect Our Business.
The current economic slowdown and any further economic decline in future reporting periods could negatively affect our business and results of operations. The volatility of the current economic climate, especially that in Western Europe, makes it difficult for us to predict the complete impact of this slowdown on our business and results of operations. Due to these current economic conditions, our customers may face financial difficulties, the unavailability of or reduction in commercial credit, or both, that may result in decreased sales by and revenues to our company. Certain of our customers may cease operations or seek bankruptcy protection, which would reduce our cash flows and adversely impact our results of operations. Our customers that are financially viable and not experiencing economic distress may elect to reduce the volume of orders for our products in an effort to remain financially stable or as a result of the unavailability of commercial credit which would negatively affect our results of operations. We may also have difficulty accessing the global credit markets due to the tightening of commercial credit availability and the financial difficulties of our customers, which would result in decreased ability to fund capital-intensive strategic projects and our ongoing acquisition strategy. Further, we may experience challenges in forecasting revenues and operating results due to these global economic conditions. The difficulty in forecasting revenues and operating results may result in volatility in the market price of our common stock.
In addition, the lenders under our Credit Agreement and other borrowing facilities described in Item 7 of this Form 10-K under “Liquidity and Capital Resources—Borrowing Arrangements“ and the counterparties with whom we maintain interest rate swap agreements, currency forward contracts and derivatives and other hedge agreements may be unable to perform their lending or payment obligations in whole or in part, or may cease operations or seek bankruptcy protection, which would negatively affect our cash flows and our results of operations.
Historically, Our Business has been Sensitive to Changes in General Economic or Business Conditions.
Our customers generally consist of other manufacturers and suppliers who purchase industrial packaging products and containerboard and related corrugated products for their own containment and shipping purposes. Because we supply a cross section of industries, such as chemicals, food products, petroleum products, pharmaceuticals, metal products, agricultural and agrichemical products, and have operations in many countries, demand for our products and services has
 
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historically corresponded to changes in general economic and business conditions of the industries and countries in which we operate. Accordingly, our financial performance is substantially dependent upon the general economic conditions existing in these industries and countries, and any prolonged or substantial economic downturn in the markets in which we operate, including the current economic downturn, could have a material adverse affect on our business, results of operations or financial condition.
Our Operations are Subject to Currency Exchange and Political  Risks that Could Adversely Affect Our Results of Operations.
We have operations in over 55 countries. As a result of our international operations, we are subject to certain risks that could disrupt our operations or force us to incur unanticipated costs.
Our operating performance is affected by fluctuations in currency exchange rates by:
 
 	•	 	translations into United States dollars for financial reporting purposes of the assets and liabilities of our international operations conducted in local currencies; and	
 
 	•	 	gains or losses from transactions conducted in currencies other than the operation’s functional currency.	
The Company also has indebtedness, agreements to purchase raw materials and agreements to sell finished products that are denominated in Euros. Recent events in Europe have called into question the viability of a common European currency. The failure of the Euro could negatively impact our business, results of operations and financial condition.
We are subject to various other risks associated with operating in international countries, such as the following:
 
 	•	 	political, social and economic instability which has commonly been associated with developing countries but presently is also impacting industrialized countries such as Greece and Italy;	
 
 	•	 	war, civil disturbance or acts of terrorism;	
 
 	•	 	taking of property by nationalization or expropriation without fair compensation;	
 
 	•	 	changes in government policies and regulations;	
 
 	•	 	imposition of limitations on conversions of currencies into United States dollars or remittance of dividends and other payments by international subsidiaries;	
 
 	•	 	imposition or increase of withholding and other taxes on remittances and other payments by international subsidiaries;	
 
 	•	 	hyperinflation in certain countries and the current threat of global deflation; and	
 
 	•	 	impositions or increase of investment and other restrictions or requirements by non-United States governments.	
The Continuing Consolidation of Our Customer Base for Industrial Packaging, Containerboard and Corrugated Products, as well as the Continuing Consolidation of Our Suppliers of Raw Materials, may Intensify Pricing Pressures and may Negatively Impact Our Financial Performance.
Over the last few years, many of our large industrial packaging, containerboard and corrugated products customers have acquired, or been acquired by, companies with similar or complementary product lines. In addition, many of our suppliers of raw materials such as steel, resin and paper, have undergone a similar process of consolidation. This consolidation has increased the concentration of our largest customers, resulting in increased pricing pressures from our customers. The consolidation of our largest suppliers has resulted in increased cost pressures from our suppliers. Any future consolidation of our customer base or our suppliers could negatively impact our financial performance.
 
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We Operate in Highly Competitive Industries.
Each of our business segments operates in highly competitive industries. The most important competitive factors we face are price, quality and service. To the extent that one or more of our competitors become more successful with respect to any of these key competitive factors, we could lose customers and our sales could decline. In addition, due to the tendency of certain customers to diversify their suppliers, we could be unable to increase or maintain sales volumes with particular customers. Certain of our competitors are substantially larger and have significantly greater financial resources.
Our Business is Sensitive to Changes in Industry Demands.
Industry demand for containerboard in the United States and certain of our industrial packaging products in our United States, European and international markets has varied in recent years causing competitive pricing pressures for those products. We compete in industries that are capital intensive, which generally leads to continued production as long as prices are sufficient to cover marginal costs. As a result, changes in industry demands like the current economic slowdown, including any resulting industry over-capacity, may cause substantial price competition and, in turn, negatively impact our financial performance.
Raw Material and Energy Price Fluctuations and Shortages could Adversely Affect Our Ability to Obtain the Materials Needed to Manufacture Our Products and Could Adversely Affect Our Manufacturing Costs.
The principal raw materials used in the manufacture of our products are steel, resin, pulpwood, old corrugated containers for recycling, and containerboard, which we purchase in highly competitive, price sensitive markets. These raw materials have historically exhibited price and demand cyclicality. Some of these materials have been, and in the future may be, in short supply. However, we have not recently experienced any significant difficulty in obtaining our principal raw materials. We have long-term supply contracts in place for obtaining a portion of our principal raw materials. The cost of producing our products is also sensitive to the price of energy (including its impact on transport costs). We have, from time to time, entered into short-term contracts to hedge certain of our energy costs. Energy prices, in particular oil and natural gas, have fluctuated in recent years, with a corresponding effect on our production costs. Potential legislation, regulatory action and international treaties related to climate change, especially those related to the regulation of greenhouse gases, may result in significant increases in raw material and energy costs. There can be no assurance that we will be able to recoup any past or future increases in the cost of energy and raw materials.
We may Encounter Difficulties Arising from Acquisitions.
We have invested a substantial amount of capital in acquisitions, joint ventures and strategic investments and we expect that we will continue to do so in the foreseeable future. We are continually evaluating acquisitions and strategic investments that are significant to our business both in the United States and internationally. Acquisitions, joint ventures and strategic investments involve numerous risks, including the failure to retain key customers, employees and contracts, the inability to integrate businesses without material disruption, unanticipated costs incurred in connection with integrating businesses, the incurrence of liabilities greater than anticipated or operating results that are less than anticipated, the inability to realize the projected value, and the projected synergies are not realized. In addition, acquisitions, joint ventures and strategic investments and associated integration activities require time and attention of management and other key personnel, and other companies in our industries have similar acquisition and investment strategies. There can be no assurance that any acquisitions, joint ventures and strategic investments will be successfully integrated into our operations, that competition for acquisitions will not intensify or that we will be able to complete such acquisitions, joint ventures and strategic investments on acceptable terms and conditions. The costs of unsuccessful acquisition, joint venture and strategic investment efforts may adversely affect our results of operations, financial condition or prospects.
We may Incur Additional Restructuring Costs and there is no Guarantee that Our Efforts to Reduce Costs will be Successful.
We have restructured portions of our operations from time to time in recent years, particularly following acquisitions of businesses and periods of economic downturn, and it is possible that we may engage in additional restructuring
 
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opportunities. Because we are not able to predict with certainty acquisition opportunities that may become available to us, market conditions, the loss of large customers, or the selling prices for our products, we also may not be able to predict with certainty when it will be appropriate to undertake restructurings. It is also possible, in connection with these restructuring efforts, that our costs could be higher than we anticipate and that we may not realize the expected benefits.
As discussed elsewhere, in 2003 we implemented the “Greif Business System,” a quantitative, systematic and disciplined process to improve productivity, increase profitability, reduce costs and drive shareholder value. While we expect these initiatives to result in significant profit opportunities and savings throughout our organization, our estimated profits and savings are based on several assumptions that may prove to be inaccurate, and as a result, there can be no assurance that we will realize these profits and cost savings or that, if realized, these profits and cost savings will be sustained. If we cannot successfully continue to implement and sustain Greif Business System initiatives, our financial conditions and results of operations would be negatively affected.
Tax Legislation Initiatives or Challenges to Our Tax Positions Could Adversely Affect Our Results of Operations and Financial Condition.
We are a large multinational corporation with operations in the United States and international jurisdictions. As such, we are subject to the tax laws and regulations of the U.S. federal, state and local governments and of many international jurisdictions. Due to widely varying tax rates in the taxing jurisdictions applicable to our business, a change in income generation to higher taxing jurisdictions or away from lower taxing jurisdictions may have a negative affect on our financial condition and results of operations.
From time to time, various legislative initiatives may be proposed that could adversely affect our tax positions. There can be no assurance that our effective tax rate or tax payments will not be adversely affected by these initiatives. In addition, U.S. federal, state and local, as well as international, tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that our tax positions will not be challenged by relevant tax authorities or that we would be successful in any such challenge.
Several Operations are Conducted by Joint Ventures that we cannot Operate Solely for Our Benefit.
Several operations, particularly in emerging markets, are conducted through joint ventures, such as a significant joint venture in our Flexible Products & Services segment. In joint ventures, we share ownership and, in some instances, management of a company with one or more parties who may or may not have the same goals, strategies, priorities or resources as we do. In general, joint ventures are intended to be operated for the benefit of all co-owners, rather than for our exclusive benefit. Operating a business as a joint venture often requires additional organizational formalities as well as time-consuming procedures for sharing information and making decisions. In certain cases, our joint venture partners must agree in order for the applicable joint venture to take certain actions, including acquisitions, the sale of assets, budget approvals, borrowing money and granting liens on joint venture property. Our inability to take unilateral action that we believe is in our best interests may have an adverse effect on the financial performance of the joint venture and the return on our investment. In joint ventures, we believe our relationship with our co-owners is an important factor to the success of the joint venture, and if a co-owner changes, our relationship may be adversely affected. In addition, the benefits from a successful joint venture are shared among the co-owners, so that we do not receive all the benefits from our successful joint ventures. Finally, we may be required on a legal or practical basis or both, to accept liability for obligations of a joint venture beyond our economic interest, including in cases where our co-owner becomes bankrupt or is otherwise unable to meet its commitments. For additional information with respect to the joint venture relating to our Flexible Products & Services segment, refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operation—Business Acquisitions.
Our Ability to Attract, Develop and Retain Talented Employees, Managers and Executives is Critical to Our Success.
Our ability to attract, develop and retain talented employees, including executives and other key managers, is important to our business. The loss of certain key officers and employees, or the failure to attract and develop talented new executives and managers, could have a materially adverse effect on our business.
 
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Our Business may be Adversely Impacted by Work Stoppages and Other Labor Relations Matters.
We are subject to risk of work stoppages and other labor relations matters because a significant number of our employees are represented by unions. We have experienced work stoppages and strikes in the past, and there may be work stoppages and strikes in the future. Any prolonged work stoppage or strike at any one of our principal manufacturing facilities could have a negative impact on our business, results of operations or financial condition.
We may be Subject to Losses that Might not be Covered in Whole or in Part by Existing Insurance Reserves or Insurance Coverage. These Uninsured Losses Could Adversely Affect Our Financial Performance.
We are self-insured for certain of the claims made under our employee medical and dental insurance programs and for certain of our workers’ compensation claims. We establish reserves for estimated costs related to pending claims, administrative fees and claims incurred but not reported. Because establishing reserves is an inherently uncertain process involving estimates, currently established reserves may not be adequate to cover the actual liability for claims made under our employee medical and dental insurance programs and for certain of our workers’ compensation claims. If we conclude that our estimates are incorrect and our reserves are inadequate for these claims, we will need to increase our reserves, which could adversely affect our financial performance.
We carry comprehensive liability, fire and extended coverage insurance on most of our facilities, with policy specifications and insured limits customarily carried for similar properties. However, there are certain types of losses, such as losses resulting from wars, acts of terrorism, or hurricanes, tornados, or other natural disasters, that generally are not insured because they are either uninsurable or not economically insurable. Should an uninsured loss or a loss in excess of insured limits occur, we could lose capital invested in that property, as well as the anticipated future revenues derived from the manufacturing activities conducted at that property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property. Any such loss would adversely impact our business, financial condition and results of operations.
We purchase insurance policies covering general liability and product liability with substantial policy limits. However, there can be no assurance that any liability claim would be adequately covered by our applicable insurance policies or it would not be excluded from coverage based on the terms and conditions of the policy. This could also apply to any applicable contractual indemnity.
Our Business Depends on the Uninterrupted Operations of Our Facilities, Systems and Business Functions, including Our Information Technology and Other Business Systems.
Our business is dependent upon our ability to execute, in an efficient and uninterrupted fashion, necessary business functions, such as accessing key business data, order processing, invoicing and the operation of information technology dependent manufacturing equipment. A shut-down of or inability to access one or more of our facilities, a power outage, a pandemic, or a failure of one or more of our information technology, telecommunications or other systems could significantly impair our ability to perform such functions on a timely basis.
Our information technology systems exist on platforms in more than 55 countries, many of which have been acquired in connection with business acquisitions, resulting in a complex technical infrastructure. Such complexity creates difficulties and inefficiencies in monitoring business results and consolidating financial data and could result in a material adverse effect on our business operations and financial performance.
A security breach of our computer systems could also interrupt or damage our operations or harm our reputation. In addition, we could be subject to liability if confidential information relating to customers, suppliers, employees or other parties is misappropriated from our computer system. Despite the implementation of security measures, these systems may be vulnerable to physical break-ins, computer viruses, programming errors or similar disruptive problems.
We have established a business continuity plan in an effort to ensure the continuation of core business operations in the event that normal operations could not be performed due to a catastrophic event. While we continue to test and assess our business continuity plan to ensure it meets the needs of our core business operations and addresses multiple business interruption events, there is no assurance that core business operations could be performed upon the occurrence of such an event.
 
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Legislation/Regulation Related to Climate Change and Environmental and Health and Safety Matters and Product Liability Claims Could Negatively Impact our Operations and Financial Performance.
We must comply with extensive U.S. and non-U.S. laws, rules and regulations regarding environmental matters, such as air, soil and water quality, waste disposal and climate change. We must also comply with extensive laws, rules and regulations regarding safety and health matters. There can be no assurance that compliance with existing and new laws, rules and regulations will not require significant expenditures. For example, the passage of the Health Care Reform Act in 2010 could significantly increase the cost of the health care benefits provided to our U.S. employees. In addition, the failure to comply materially with such existing and new laws, rules and regulations could adversely affect our operations and financial performance.
We believe it is also likely that the scientific and political attention to issues concerning the extent and causes of climate change will continue, with the potential for further regulations that could affect our operations and financial performance. As an update to legislation and regulatory activity that impacts or could impact our business:
 
 	•	 	The U.S. EPA issued a finding in 2009 that greenhouse gases contribute to air pollution that endangers public health and welfare. The endangerment finding and EPA’s determination that greenhouse gases are subject to regulation under the Clean Air Act, will lead to widespread regulation of stationary sources of greenhouse gas emissions.	
 
 	•	 	Congress may continue to consider legislation on greenhouse gas emissions, which may include a cap and trade system for stationary sources and a carbon fee on transportation fuels.	
 
 	•	 	The Canadian government has added bisphenol A (BPA), a chemical monomer used primarily in the production of plastic and epoxy resins, to the list of toxic substances in Schedule 1 of the Canadian Environmental Protection Act, 1999. Such designation may lead to additional regulation of the use of BPA in food contact applications.	
Although there may be adverse financial impact (including compliance costs, potential permitting delays and increased cost of energy, raw materials and transportation) associated with any such legislation, regulation or other action, the extent and magnitude of that impact cannot be reliably or accurately estimated due to the fact that some requirements have only recently been adopted and the present uncertainty regarding other additional measures and how they will be implemented. Furthermore, litigation or claims against us with respect to such matters could adversely affect our operations and financial performance. We may also become subject to product liability claims that could adversely affect our operations and financial performance.
We May Incur Fines or Penalties, Damage to Our Reputation or Other Adverse Consequences if Our Employees, Agents or Business Partners Violate, or are Alleged to Have Violated, Anti-bribery, Competition or Other Laws.
We cannot provide assurance that our internal controls will always protect us from reckless or criminal acts committed by our employees, agents or business partners that would violate U.S. and/or non-U.S. laws, including anti-bribery, competition, trade sanctions and regulation, and other laws. Any such improper actions could subject us to civil or criminal investigations in the U.S. and in other jurisdictions, could lead to substantial civil or criminal monetary and non-monetary penalties against us or our subsidiaries, and could damage our reputation. Even the allegation or appearance of our employees, agents or business partners acting improperly or illegally could damage our reputation and result in significant expenditures in investigating and responding to such actions.
Changing Climate Conditions may Adversely Affect Our Operations and Financial Performance.
Climate change, to the extent it produces rising temperatures and sea levels and changes in weather patterns, could impact the frequency or severity of weather events, wildfires and flooding. These types of events may adversely impact our suppliers, our customers and their ability to purchase our products and our ability to manufacture and transport our products on a timely basis and could result in a material adverse effect on our business operations and financial performance.
 
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The Frequency and Volume of Our Timber and Timberland Sales will Impact Our Financial Performance.
We have a significant inventory of standing timber and timberland and approximately 48,550 acres of special use properties in the United States and Canada as of October 31, 2011. The frequency, demand for and volume of sales of timber, timberland and special use properties will have an effect on our financial performance. In addition, volatility in the real estate market for special use properties could negatively affect our results of operations.
 
 ITEM 1B.	UNRESOLVED STAFF COMMENTS	
None.
 
 ITEM 2.	PROPERTIES	
The following are our principal operating locations and the products manufactured at such facilities or the use of such facilities. We consider our operating properties to be in satisfactory condition and adequate to meet our present needs. However, we expect to make further additions, improvements and consolidations of our properties to support our business.

Location	  	Products or Use	  	Owned	 	  	Leased	 	
RIGID INDUSTRIAL PACKAGING & SERVICES	  				  				
				
Algeria	  	Steel drums	  	 	1	  	  	 	—	  	
				
Argentina	  	Steel and plastic drums, water bottles, distribution centers and administrative office	  	 	2	  	  	 	1	  	
				
Australia	  	Closures	  	 	—	  	  	 	2	  	
				
Austria	  	Steel drums, reconditioned containers and services and administrative office	  	 	—	  	  	 	2	  	
				
Belgium	  	Steel and plastic drums, reconditioned containers and services, administrative office and coordination center (shared services)	  	 	3	  	  	 	2	  	
				
Brazil	  	Steel and plastic drums, water bottles, closures, intermediate bulk containers, warehouse and general office	  	 	5	  	  	 	8	  	
				
Canada	  	Fibre, steel and plastic drums, blending and packaging services and administrative office	  	 	4	  	  	 	2	  	
				
Chile	  	Steel drums, water bottles and distribution centers	  	 	—	  	  	 	2	  	
				
China	  	Steel drums, closures, blending and packaging services and general offices	  	 	—	  	  	 	10	  	
				
Colombia	  	Steel and plastic drums, water bottles and administrative office	  	 	1	  	  	 	1	  	
				
Costa Rica	  	Steel drums	  	 	—	  	  	 	1	  	
				
Czech Republic	  	Steel drums	  	 	1	  	  	 	—	  	
				
Denmark	  	Fibre drums, intermediate bulk containers and administrative offices	  	 	1	  	  	 	1	  	
				
Egypt	  	Steel drums	  	 	1	  	  	 	—	  	
				
France	  	Steel and plastic drums, closures, reconditioned containers and services and distribution centers	  	 	5	  	  	 	2	  	
				
Germany	  	Fibre, steel and plastic drums, closures, intermediate bulk containers, reconditioned containers and services, administrative office and distribution centers	  	 	6	  	  	 	6	  	
				
Greece	  	Steel drums and warehouse	  	 	—	  	  	 	1	  	
				
Guatemala	  	Steel drums	  	 	1	  	  	 	—	  	
				
Hungary	  	Steel drums	  	 	1	  	  	 	—	  	
				
Italy	  	Steel and plastic drums, closures, water bottles, intermediate bulk containers and distribution center	  	 	1	  	  	 	5	  	
				
Jamaica	  	Distribution center	  	 	—	  	  	 	1	  	
				
Japan	  	Steel drums	  	 	—	  	  	 	1	  	
				
Kazakhstan	  	Distribution center	  	 	—	  	  	 	1	  	
				
Kenya	  	Steel and plastic drums	  	 	—	  	  	 	1	  	
				
Malaysia	  	Steel and plastic drums	  	 	—	  	  	 	1	  	
 
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Location	  	Products or Use	  	Owned	 	  	Leased	 	
Mexico	  	Fibre, steel and plastic drums, closures and distribution centers	  	 	1	  	  	 	1	  	
				
Morocco	  	Steel and plastic drums and plastic bottles	  	 	1	  	  	 	—	  	
				
Netherlands	  	Fibre, steel and plastic drums, closures, reconditioned containers and services, research center and general offices	  	 	4	  	  	 	1	  	
				
Nigeria	  	Steel and plastic drums	  	 	—	  	  	 	3	  	
				
Norway	  	Steel drums and reconditioned containers and services	  	 	1	  	  	 	1	  	
				
Philippines	  	Steel drums and water bottles	  	 	—	  	  	 	1	  	
				
Poland	  	Steel drums and water bottles	  	 	1	  	  	 	1	  	
				
Portugal	  	Steel drums	  	 	1	  	  	 	—	  	
				
Russia	  	Steel drums, water bottles and intermediate bulk containers	  	 	8	  	  	 	1	  	
				
Saudi Arabia	  	Steel drums	  	 	—	  	  	 	1	  	
				
Singapore	  	Steel drums, steel parts and distribution center	  	 	—	  	  	 	1	  	
				
South Africa	  	Steel and plastic drums and distribution center	  	 	—	  	  	 	5	  	
				
Spain	  	Steel drums and distribution center	  	 	3	  	  	 	1	  	
				
Sweden	  	Fibre and steel drums and distribution centers	  	 	3	  	  	 	1	  	
				
Turkey	  	Steel drums and water bottles	  	 	1	  	  	 	—	  	
				
Ukraine	  	Distribution center and water bottles	  	 	—	  	  	 	1	  	
				
United Arab Emirates	  	Steel drums	  	 	—	  	  	 	1	  	
				
United Kingdom	  	Steel and plastic drums, water bottles, reconditioned containers and services and distribution centers	  	 	4	  	  	 	3	  	
				
United States	  	Fibre, steel and plastic drums, intermediate bulk containers, reconditioned containers and services, closures, steel parts, water bottles, and distribution centers and blending and packaging services	  	 	22	  	  	 	19	  	
				
Venezuela	  	Steel and plastic drums and water bottles	  	 	2	  	  	 	—	  	
				
Vietnam	  	Steel drums	  	 	—	  	  	 	1	  	
			
FLEXIBLE PRODUCTS & SERVICES:	  				  				
				
Australia	  	Distribution center and administrative office	  	 	—	  	  	 	6	  	
				
Austria	  	Distribution center	  	 	—	  	  	 	1	  	
				
Belgium	  	Manufacturing plant	  	 	—	  	  	 	1	  	
				
China	  	Manufacturing plant, administrative office, and sales office	  	 	1	  	  	 	4	  	
				
Colombia	  	Manufacturing plant	  	 	—	  	  	 	1	  	
				
Finland	  	Manufacturing plants	  	 	1	  	  	 	1	  	
				
France	  	Manufacturing plant and distribution centers	  	 	1	  	  	 	2	  	
				
Germany	  	Distribution center and administrative office	  	 	—	  	  	 	4	  	
				
India	  	Distribution center and administrative office	  	 	—	  	  	 	2	  	
				
Ireland	  	Distribution center	  	 	—	  	  	 	1	  	
				
Mexico	  	Manufacturing plant	  	 	—	  	  	 	1	  	
				
Netherlands	  	Manufacturing plant, distribution center and administrative office	  	 	—	  	  	 	3	  	
				
Pakistan	  	Manufacturing plant and administrative office	  	 	—	  	  	 	6	  	
				
Poland	  	Manufacturing plant	  	 	—	  	  	 	1	  	
 
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Location	  	Products or Use	  	Owned	 	  	Leased	 	
Portugal	  	Manufacturing plant	  	 	—	  	  	 	1	  	
				
Romania	  	Manufacturing plants	  	 	—	  	  	 	2	  	
				
Saudi Arabia	  	Administrative office	  	 	—	  	  	 	1	  	
				
Spain	  	Distribution center	  	 	—	  	  	 	1	  	
				
Sweden	  	Distribution center	  	 	—	  	  	 	1	  	
				
Turkey	  	Manufacturing plants	  	 	1	  	  	 	3	  	
				
United Kingdom	  	Manufacturing plant and distribution center	  	 	—	  	  	 	2	  	
				
Ukraine	  	Manufacturing plants	  	 	1	  	  	 	1	  	
				
United States	  	Distribution centers	  	 	—	  	  	 	5	  	
				
Vietnam	  	Manufacturing plant	  	 	—	  	  	 	1	  	
			
PAPER PACKAGING:	  				  				
				
United States	  	Corrugated sheets, containers and other products, containerboard, multiwall bags, investment property and distribution centers	  	 	17	  	  	 	4	  	
			
LAND MANAGEMENT:	  				  				
				
United States	  	General offices	  	 	4	  	  	 	1	  	
			
CORPORATE:	  				  				
				
United States	  	Principal and general offices	  	 	2	  	  	 	—	  	
We also own a substantial amount of timber properties. Our timber properties consisted of approximately 267,750 acres in the southeastern United States and approximately 14,700 acres in Canada as of October 31, 2011.
 
 ITEM 3.	LEGAL PROCEEDINGS	
We do not have any pending material legal proceedings.
From time to time, various legal proceedings arise at the country, state or local levels involving environmental sites to which we have shipped, directly or indirectly, small amounts of toxic waste, such as paint solvents. To date, we have been classified as a “de minimis” participant and such proceedings do not involve potential monetary sanctions in excess of $100,000.
 
 ITEM 4.	RESERVED	
 
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 PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Shares of our Class A and Class B Common Stock are listed on the New York Stock Exchange under the symbols GEF and GEF.B, respectively.
Financial information regarding our two classes of common stock, as well as the number of holders of each class and the high, low and closing sales prices for each class for each quarterly period for the two most recent years, is included in Note 18 to the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
We pay quarterly dividends of varying amounts computed on the basis described in Note 15 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. The annual dividends paid for the last two years are as follows:
2011 Dividends per Share – Class A $1.68; Class B $2.51
2010 Dividends per Share – Class A $1.60; Class B $2.39
The terms of our current credit agreement limit our ability to make “restricted payments,” which include dividends and purchases, redemptions and acquisitions of our equity interests. The payment of dividends and other restricted payments are subject to the condition that certain defaults not exist under the terms of our current credit agreement and are limited in amount by a formula based, in part, on our consolidated net income. Refer to “Liquidity and Capital Resources—Borrowing Arrangements” in Item 7 of this Form 10-K.
The following tables set forth our purchases of our shares of Class A and Class B  Common Stock during 2011.
Issuer Purchases of Class A Common Stock

Period	  	Total Number of
Shares Purchased	 	  	Average Price
Paid Per Share	 	  	Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs (1)	 	  	Maximum Number of
Shares that May
Yet be Purchased
under the Plans
or Programs (1)	 	
November 2010	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
December 2010	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
January 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
February 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
March 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
April 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
May 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
June 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
July 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
August 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
September 2011	  	 	8,700	  	  	$	47.24	  	  	 	8,700	  	  	 	816,728	  	
					
October 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	816,728	  	

Total	  	 	8,700	  	  				  	 	8,700	  	  				

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Issuer Purchases of Class B Common Stock

Period	  	Total Number of
Shares Purchased	 	  	Average Price
Paid Per Share	 	  	Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs (1)	 	  	Maximum Number of
Shares that May
Yet be Purchased
under the Plans
or Programs (1)	 	
November 2010	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
December 2010	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
January 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
February 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,116,728	  	
					
March 2011	  	 	50,000	  	  	$	61.20	  	  	 	50,000	  	  	 	1,066,728	  	
					
April 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
May 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
June 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
July 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
August 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	1,066,728	  	
					
September 2011	  	 	241,300	  	  	$	48.01	  	  	 	241,300	  	  	 	816,728	  	
					
October 2011	  	 	—	  	  	 	—	  	  	 	—	  	  	 	816,728	  	

Total	  	 	291,300	  	  				  	 	291,300	  	  				

 
(1)	Our Board of Directors has authorized a stock repurchase program which permits us to purchase up to 4.0 million shares of our Class A or Class B Common Stock, or any combination thereof. As of October 31, 2011, the maximum number of shares that could be purchased was 816,728 which may be any combination of Class A or Class B Common Stock.	
Performance Graph
The following graph compares the performance of shares of our Class A and B Common Stock to that of the Standard and Poor’s 500 Index and our industry group (Peer Index) assuming $100 invested on October 31, 2006 and reinvestment of dividends for each subsequent year. The graph does not purport to represent our value.

The Peer Index comprises the containers and packaging index as shown by Dow Jones.
Equity compensation plan information required by Items 201(d) of Regulation S-K will be found under the caption “Equity Compensation Plan Information” in the 2012 Proxy Statement, which information is incorporated herein by reference.
 
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 ITEM	6. SELECTED FINANCIAL DATA	
The five-year selected financial data is as follows (Dollars in thousands, except per share amounts) (1)  :

As of and for the years ended October 31,	  	2011	 	  	2010	 	  	2009	 	  	2008	 	  	2007	 	
Net sales	  	$	4,247,954	  	  	$	3,461,537	  	  	$	2,792,217	  	  	$	3,790,531	  	  	$	3,331,597	  	
Net income attributable to Greif, Inc.	  	$	176,040	  	  	$	209,985	  	  	$	110,646	  	  	$	241,748	  	  	$	156,457	  	
Total assets	  	$	4,207,282	  	  	$	3,498,445	  	  	$	2,823,929	  	  	$	2,792,749	  	  	$	2,687,537	  	
Long-term debt, including current portion of long-term debt	  	$	1,357,638	  	  	$	965,589	  	  	$	738,608	  	  	$	673,171	  	  	$	622,685	  	
Basic earnings per share:	  				  				  				  				  				
Class A Common Stock	  	$	3.02	  	  	$	3.60	  	  	$	1.91	  	  	$	4.16	  	  	$	2.70	  	
Class B Common Stock	  	$	4.52	  	  	$	5.40	  	  	$	2.86	  	  	$	6.23	  	  	$	4.04	  	
Diluted earnings per share:	  				  				  				  				  				
Class A Common Stock	  	$	3.01	  	  	$	3.58	  	  	$	1.91	  	  	$	4.11	  	  	$	2.65	  	
Class B Common Stock	  	$	4.52	  	  	$	5.40	  	  	$	2.86	  	  	$	6.23	  	  	$	4.04	  	
Dividends per share:	  				  				  				  				  				
Class A Common Stock	  	$	1.68	  	  	$	1.60	  	  	$	1.52	  	  	$	1.32	  	  	$	0.92	  	
Class B Common Stock	  	$	2.51	  	  	$	2.39	  	  	$	2.27	  	  	$	1.97	  	  	$	1.37	  	

(1)	All share information presented in this table has been adjusted to reflect a 2-for-1 stock split of our shares of Class A and Class B Common Stock as of the close  of business on March 19, 2007 distributed on April 11, 2007.	
 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The terms “Greif,” “we,” “us” and “our” as used in this discussion refer to Greif, Inc. and its subsidiaries. Our fiscal year begins on November 1 and ends on October 31 of the following year. Any references in this Form 10-K to the years 2011, 2010 or 2009 or to any quarter of those years, relates to the fiscal year or quarter, as the case may be, ending in that year.
The discussion and analysis presented below relates to the material changes in financial condition and results of operations for our consolidated balance sheets as of October 31, 2011 and 2010, and for the consolidated statements of operations for the years ended 2011, 2010 and 2009. This discussion and analysis should be read in conjunction with the consolidated financial statements that appear elsewhere in this Form 10-K. This information will assist in your understanding of the discussion of our current period financial results.
In the second quarter of 2010, we acquired one of the world’s largest producers of flexible intermediate bulk containers. As a result of this acquisition, we created a new reporting segment called the Flexible Products & Services segment. Our multiwall bag operations, previously included in the Paper Packaging segment, have been reclassified and included in the Flexible Products & Services segment for all historical periods. The Industrial Packaging segment has been renamed the Rigid Industrial Packaging & Services segment.
Business Segments
We operate in four business segments: Rigid Industrial Packaging & Services; Flexible Products & Services; Paper Packaging; and Land Management.
We are a leading global provider of rigid industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and reconditioned containers, and services, such as container life cycle services, blending, filling and other packaging services, logistics and warehousing. We sell our industrial packaging products to customers in industries such as chemicals, paints and pigments, food and beverage, petroleum, industrial coatings, agricultural, pharmaceutical and mineral, among others.
 
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We are a leading global producer of flexible intermediate bulk containers and related services and a North American provider of industrial and consumer shipping sacks and multiwall bag products. Our flexible intermediate bulk containers consist of a polypropylene-based woven fabric that is primarily produced at our fully integrated production sites, as well as sourced from strategic regional suppliers. Our flexible products are sold globally and service similar customers and market segments as our Rigid Industrial Packaging & Services segment. Additionally, our flexible products significantly expand our presence in the agricultural and food industries, among others. Our industrial and consumer shipping sacks and multiwall bag products are used to ship a wide range of industrial and consumer products, such as seed, fertilizers, chemicals, concrete, flour, sugar, feed, pet foods, popcorn, charcoal and salt, primarily for the agricultural, chemical, building products and food industries.
We sell containerboard, corrugated sheets and other corrugated products to customers in North America in industries such as packaging, automotive, food and building products. Our corrugated container products are used to ship such diverse products as home appliances, small machinery, grocery products, building products, automotive components, books and furniture, as well as numerous other applications. Operations related to our industrial and consumer multiwall bag products have been reclassified to our Flexible Products & Services segment.
As of October 31, 2011, we owned approximately 267,750 acres of timber properties in the southeastern United States, which were actively managed, and approximately 14,700 acres of timber properties in Canada, which are not actively managed. Our Land Management team is focused on the active harvesting and regeneration of our United States timber properties to achieve sustainable long-term yields. While timber sales are subject to fluctuations, we seek to maintain a consistent cutting schedule, within the limits of market and weather conditions. We also sell, from time to time, timberland and special use properties, which consists of surplus properties, higher and better use (“HBU”) properties, and development properties.
In 2003, we implemented the “Greif Business System,” a quantitative, systematic and disciplined process to improve productivity, increase profitability, reduce costs and drive shareholder value. The Greif Business System is directed by the Greif Way, which embodies the principles that are at the core of our culture: respect for one another, “treating others as we want to be treated” and respect for our environment. The operating engine for the Greif Business System is a combination of lean manufacturing; network alignment and continuous improvement within our facilities; customer service; value selling and other commercial initiatives; maximizing cash flow; and strategic sourcing and supply chain initiatives to more effectively leverage our global spend. More recently, we have also focused on applying “lean” principles to back-office activities to streamline and improve transactional processes across our network of business and shared services. At the core supporting the Greif Business System is our people, using rigorous performance management and robust strategic planning skills to guide our continued growth.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these consolidated financial statements, in accordance with these principles, require us to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities at the date of our consolidated financial statements.
A summary of our significant accounting policies is included in Note 1 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K. We believe that the consistent application of these policies enables us to provide readers of the consolidated financial statements with useful and reliable information about our results of operations and financial condition. The following are the accounting policies that we believe are most important to the portrayal of our results of operations and financial condition and require our most difficult, subjective or complex judgments.
Allowance for Accounts Receivable. We evaluate the collectability of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, we record a specific allowance for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. In addition, we recognize allowances for bad debts based on the length of time
 
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receivables are past due with allowance percentages, based on our historical experiences, applied on a graduated scale relative to the age of the receivable amounts. If circumstances change (e.g., higher than expected bad debt experience or an unexpected material adverse change in a major customer’s ability to meet its financial obligations to us), our estimates of the recoverability of amounts due to us could change by a material amount.
Inventory Reserves. Reserves for slow moving and obsolete inventories are provided based on historical experience, inventory aging and product demand. We continuously evaluate the adequacy of these reserves and make adjustments to these reserves as required. We also evaluate reserves for losses under firm purchase commitments for goods or inventories.
Net Assets Held for Sale. Net assets held for sale represent land, buildings and land improvements less accumulated depreciation. We record net assets held for sale in accordance with Accounting Standards Codification (“ASC”) 360 “Property, Plant, and Equipment,” at the lower of carrying value or fair value less cost to sell. Fair value is based on the estimated proceeds from the sale of the facility utilizing recent purchase offers, market comparables and/or data obtained from our commercial real estate broker. Our estimate as to fair value is regularly reviewed and subject to changes in the commercial real estate markets and our continuing evaluation as to the facility’s acceptable sale price.
Goodwill, Other Intangible Assets and Other Long-Lived Assets. We account for goodwill in accordance with ASC 350, “Intangibles—Goodwill and Other.” Under ASC 350, purchased goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment either annually or when events and circumstances indicate an impairment may have occurred. Our business segments have been identified as reporting units, which contain goodwill and indefinite-lived intangibles that are assessed for impairment. A reporting unit is the operating segment, or a business one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. Intangible assets with finite lives, primarily customer relationships, patents, non-competition agreements and trademarks, continue to be amortized over their useful lives. In conducting the annual impairment tests, the estimated fair value of our reporting units is compared to its carrying amount including goodwill. If the estimated fair value exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the estimated fair value, further analysis is performed to assess impairment.
Our determination of estimated fair value of the reporting units is based on a discounted cash flow analysis utilizing earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”). The discount rates used for impairment testing are based on our weighted average cost of capital. The use of alternative estimates, peer groups or changes in the industry, or adjusting the discount rate, EBITDA multiples or price earnings ratios used could affect the estimated fair value of the assets and potentially result in impairment. Any identified impairment would result in an adjustment to our results of operations.
We performed our annual impairment tests in fiscal 2011, 2010, and 2009, which resulted in no impairment charges.
Properties, Plants and Equipment. Depreciation on properties, plants and equipment is provided on the straight-line method over the estimated useful lives of our assets.
We own timber properties in the southeastern United States and in Canada. With respect to our United States timber properties, which consisted of approximately 267,750 acres as of October 31, 2011, depletion expense is computed on the basis of cost and the estimated recoverable timber acquired. Our land costs are maintained by tract. Merchantable timber costs are maintained by five product classes, pine saw timber, pine chip-n-saw, pine pulpwood, hardwood sawtimber and hardwood pulpwood, within a “depletion block,” with each depletion block based upon a geographic district or subdistrict. Currently, we have eight depletion blocks. These same depletion blocks are used for pre-merchantable timber costs. Each year, we estimate the volume of our merchantable timber for the five product classes by each depletion block. These estimates are based on the current state in the growth cycle and not on quantities to be available in future years. Our estimates do not include costs to be incurred in the future. We then project these volumes to the end of the year. Upon acquisition of a new timberland tract, we record separate amounts for land, merchantable timber and pre-merchantable timber allocated as a percentage of the values being purchased. These acquisition volumes and costs acquired during the year are added to the totals for each product class within the appropriate depletion block(s). The total of the beginning, one-year growth and acquisition volumes are divided by the total undepleted historical cost to
 
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arrive at a depletion rate, which is then used for the current year. As timber is sold, we multiply the volumes sold by the depletion rate for the current year to arrive at the depletion cost. Our Canadian timber properties, which consisted of approximately 14,700 acres as of October 31, 2011, did not have any depletion expense since they were not actively managed at this time.
We believe that the lives and methods of determining depreciation and depletion are reasonable; however, using other lives and methods could provide materially different results.
As of October 31, 2011 and 2010, we recorded capitalized interest costs of $3.8 million and $5.3 million, respectively.
Restructuring Reserves. Restructuring reserves are determined in accordance with appropriate accounting guidance, including ASC 420, “Exit or Disposal Cost Obligations.” Under ASC 420, a liability is measured at its fair value and recognized as incurred.
Income Taxes. We record a tax provision for the anticipated tax consequences of our reported results of operations. In accordance with ASC 740, “Income Taxes” the provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Our effective tax rate is based on income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions.
The company has been providing valuation allowance against deferred tax assets as required under ASC 740. During 2011, this valuation allowance decreased by $23.3 million, primarily due to a decrease related to net operating loss carryforwards outside the U.S. It was determined that the realization of the deferred tax asset was appropriate due to the ability to generate future taxable income of the appropriate nature. The company reevaluates its ability to use net operating losses on an annual basis.
In accordance with ASC 740, “Income Taxes”, we believe it is more likely than not that forecasted income, including income that may be generated as a result of certain tax planning strategies, together with the tax effects of the deferred tax liabilities, will be sufficient to fully recover the remaining deferred tax assets. In the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings, in the period such determination is made.
In addition, the calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of ASC 740 and other complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our financial condition and operating results. During 2011, we increased reserves for tax liabilities primarily due to a prior year issue in a non-U.S. jurisdiction where, due to new information, it was determined that a reserve was appropriate. This increase in reserve was substantially offset by the realization of net operating losses and decrease in valuation allowance. Refer to Note 12 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for further discussion.
A number of years may elapse before a particular matter, for which we have established a reserve, is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe that our reserves reflect the probable outcome of known tax contingencies. Unfavorable settlement of any particular issue would require use of our cash. Favorable resolution would be recognized as a reduction to our effective tax rate in the period of resolution.
We have estimated the reasonably possible expected net change in unrecognized tax benefits through October 31, 2011 based on lapses of the applicable statues of limitation on unrecognized tax benefits. The estimated net decrease in unrecognized tax benefits for the next 12 months ranges from $0 to $48.5 million. Actual results may differ from this estimated range.
 
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Pension and Postretirement Benefits . Pension and post retirement assumptions are significant inputs to the actuarial models that measure pension and post retirement benefit obligations and related effects on operations. Two assumptions—discount rate and expected return on assets – are important elements of plan expense and asset/liability measurement. We evaluate these critical assumptions at least annually on a plan and country-specific basis. At least annually, we evaluate other assumptions involving demographic factors, such as retirement age, mortality and turnover, and update them to reflect our experience and expectations for the future. Actual results in any given year will often differ from actuarial assumptions because of economic and other factors.
Accumulated and projected benefit obligations are measured as the present value of future cash payments. We discount those cash payments using the weighted average of market-observed yields for high quality fixed income securities with maturities that correspond to the payment of benefits. Lower discount rates increase present values and subsequent-year pension expense; higher discount rates decrease present values and subsequent-year pension expense.
Our discount rates for consolidated pension plans at October 31, 2011, 2010 and 2009 were 4.94%, 5.20% and 5.72%, respectively, reflecting market interest rates.
To develop the expected long-term rate of return on assets assumption, the Company uses a generally consistent approach worldwide. The approach considers various sources, primarily inputs from a range of advisors, inflation, bond yields, historical returns, and future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This rate is gross of any investment or administrative expenses. Assets in our consolidated pension plans earned 4.17% in 2011. Based on our analysis of future expectations of asset performance, past return results, and our current and expected asset allocations, we have assumed a 6.46% long-term expected return on those assets for cost recognition in 2012. This is a reduction from the 7.20%, 7.50% and 7.69% long-term expected return we had assumed in 2011, 2010 and 2009, respectively.
Changes in key assumptions for our consolidated pension and postretirement plans would have the following effects.
 
 	•	 	Discount rate—A 25 basis point increase in discount rate would decrease pension cost in the following year by $2.0 million and would decrease the pension and postretirement benefit obligation at year-end by about $20.5 million.	
 
 	•	 	Expected return on assets—A 50 basis point decrease in the expected return on assets would increase pension and postretirement cost in the following year by $2.3 million.	
Further discussion of our pension and postretirement benefit plans and related assumptions is contained in Note 13 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
Environmental Cleanup Costs . We expense environmental expenditures related to existing conditions caused by past or current operations and from which no current or future benefit is discernable. Expenditures that extend the life of the related property, or mitigate or prevent future environmental contamination, are capitalized. Reserves for large environmental exposures are principally based on environmental studies and cost estimates provided by third parties, but also take into account management estimates. Reserves for less significant environmental exposures are principally based on management estimates.
Environmental expenses were $0.1 million, $0.2 million, and ($2.1) million in 2011, 2010, and 2009, respectively. In 2010, we reduced the environmental liability at three of our facilities by $5.9 million consistent with revised third party estimates which reduced our total estimated cleanup costs. Environmental cash expenditures were $1.3 million, $1.7 million, and $3.4 million in 2011, 2010 and 2009, respectively. Our reserves for environmental liabilities as of October 31, 2011 amounted to $29.3 million, which included a reserve of $14.0 million related to our blending facility in Chicago, Illinois, $9.5 million related to our European drum facilities and $4.2 million related to recent reconditioning company acquisitions. The remaining reserves were for asserted and unasserted environmental litigation, claims and/or assessments at manufacturing sites and other locations where we believe it is probable the outcome of such matters will be unfavorable to us, but the environmental exposure at any one of those sites was not individually material. As of
 
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October 31, 2011 we estimated that our payments for environmental remediation will be $8.5 million in 2012, $3.4 million in 2013, $1.5 million in 2014, $2.6 million in 2015, $1.7 million in 2016, and $11.6 million thereafter.
We anticipate that expenditures for remediation costs at most of the sites will be made over an extended period of time. Given the inherent uncertainties in evaluating environmental exposures, actual costs may vary from those estimated as of October 31, 2011. Our exposure to adverse developments with respect to any individual site is not expected to be material. Although environmental remediation could have a material effect on results of operations if a series of adverse developments occur in a particular quarter or fiscal year, we believe that the chance of a series of adverse developments occurring in the same quarter or fiscal year is remote. Future information and developments will require us to continually reassess the expected impact of these environmental matters.
Contingencies. Various lawsuits, claims and proceedings have been or may be instituted or asserted against us, including those pertaining to environmental, product liability, and safety and health matters. While the amounts claimed may be substantial, the ultimate liability cannot currently be determined because of the considerable uncertainties that exist.
All lawsuits, claims and proceedings are considered by us in establishing reserves for contingencies in accordance with ASC 450, “Contingencies.” In accordance with the provisions of ASC 450, we accrue for a litigation-related liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on currently available information known to us, we believe that our reserves for these litigation-related liabilities are reasonable and that the ultimate outcome of any pending matters is not likely to have a material adverse effect on our financial position or results from operations.
Transfers and Servicing of Financial Assets . We have agreed to sell trade receivables meeting certain eligibility requirements that the seller had purchased from other of our indirect wholly-owned subsidiaries, under a factoring agreement. The structure of the transactions provide for a legal true sale, on a revolving basis, of the receivables transferred from our various subsidiaries to the respective banks. The purchaser funds an initial purchase price of a certain percentage of eligible receivables based on a formula, with the initial purchase price approximating 75 percent to 90 percent of eligible receivables. The remaining deferred purchase price is settled upon collection of the receivables. At the balance sheet reporting dates, we remove from accounts receivable the amount of proceeds received from the initial purchase price since they meet the applicable criteria of ASC 860, “Transfers and Servicing,” and we continue to recognize the deferred purchase price in our accounts receivable. The receivables are sold on a non-recourse basis with the total funds in the servicing collection accounts pledged to the banks between settlement dates.
Fair Value Measurements. ASC 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements for financial and non-financial assets and liabilities. Additionally, this guidance established a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.
The three levels of inputs used to measure fair values are as follows:
 
 	•	 	Level 1—Observable inputs such as unadjusted quoted prices in active markets for identical assets and liabilities.	
 
 	•	 	Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities.	
 
 	•	 	Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.	
Equity Earnings (Losses) of Unconsolidated Affiliates, net of tax and Noncontrolling Interests . ASC 810, “Consolidation” improves the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements. ASC 810 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. ASC 810 also changes the way the
 
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consolidated financial statements are presented, establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation, requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated and expands disclosures in the consolidated financial statements that clearly identify and distinguish between the parent’s ownership interest and the interest of the noncontrolling owners of a subsidiary. The provisions of ASC 810 have been applied prospectively as of the beginning of 2010. However, the presentation and disclosure requirements have been applied retrospectively for all periods presented.
Equity earnings represent investments in affiliates in which we do not exercise control and have a 20 percent or more voting interest. Such investments in affiliates are accounted for using the equity method of accounting. If the fair value of an investment in an affiliate is below its carrying value and the difference is deemed to be other than temporary, the difference between the fair value and the carrying value is charged to earnings.
Revenue Recognition . We recognize revenue when title passes to customers or services have been rendered, with appropriate provision for returns and allowances. Revenue is recognized in accordance with ASC 605, “Revenue Recognition.”
Timberland disposals, timber and special use property revenues are recognized when closings have occurred, required down payments have been received, title and possession have been transferred to the buyer, and all other criteria for sale and profit recognition have been satisfied.
We report the sale of surplus and HBU property in our consolidated statements of income under “gain on disposals of property, plants, and equipment, net” and report the sale of development property under “net sales” and “cost of goods sold.” All HBU and development property, together with surplus property, is used by us to productively grow and sell timber until the property is sold.
Other Items. Other items that could have a significant impact on our financial statements include the risks and uncertainties listed in Item 1A under “Risk Factors.” Actual results could differ materially using different estimates and assumptions, or if conditions are significantly different in the future.
RESULTS OF OPERATIONS
Historically, revenues and earnings may or may not be representative of future operating results due to various economic and other factors.
The non-GAAP financial measures of operating profit before special items, EBITDA and EBITDA before special items are used throughout the following discussion of our results of operations. For our consolidated results, operating profit before special items adds back restructuring charges, restructuring-related inventory charges, acquisition-related costs and a non-cash asset impairment charges to operating profit. EBITDA is defined as net income plus interest expense, net plus income tax expense less equity earnings of unconsolidated affiliates, net of tax plus depreciation, depletion and amortization. EBITDA before special items adds back restructuring charges, restructuring-related inventory charges, acquisition-related costs and non-cash asset impairment charges to EBITDA. EBITDA can be reconciled either to net income or operating profit, in both cases yielding the same results. Since we do not calculate net income by segment, EBITDA by segment is reconciled to operating profit by segment in the following tables. In our Rigid Industrial Packaging & Services segment, operating profit before special items adds back restructuring charges, restructuring-related inventory charges, acquisition-related costs and non-cash asset impairment charges to that segment’s operating profit and EBITDA before special items adds back restructuring charges, restructuring-related inventory charges and acquisition-related costs and non-cash asset impairment charges to that segment’s EBITDA. In our Flexible Products & Services segment, operating profit before special items adds back restructuring charges, acquisition-related costs and non-cash asset impairment charges to that segment’s operating profit and EBITDA before special items adds back restructuring charges, acquisition-related costs and non-cash asset impairment charges to that segment’s EBITDA. In our Paper Packaging and Land Management segments, operating profit before special items adds back restructuring charges to those segments’ operating profit and EBITDA before special items adds back restructuring charges to that segment’s EBITDA. We use the above-identified non-GAAP financial measures to evaluate our ongoing operations and believe that these non-GAAP financial measures are useful to enable investors to perform meaningful comparisons of our current and historical performance.
 
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The following table sets forth the net sales, operating profit and operating profit before special items for each of our business segments for 2011, 2010 and 2009 (Dollars in thousands):

For the year ended October 31,	  	2011	 	 	2010	 	 	2009	 	
Net sales	  				 				 				
				
Rigid Industrial Packaging & Services	  	$	3,014,109	  	 	$	2,587,854	  	 	$	2,266,890	  	
				
Flexible Products & Services	  	 	537,993	  	 	 	233,119	  	 	 	43,975	  	
				
Paper Packaging	  	 	674,945	  	 	 	624,092	  	 	 	460,712	  	
				
Land Management	  	 	20,907	  	 	 	16,472	  	 	 	20,640	  	

Total net sales	  	$	4,247,954	  	 	$	3,461,537	  	 	$	2,792,217	  	

Operating profit (loss):	  				 				 				
				
Rigid Industrial Packaging & Services	  	$	226,326	  	 	$	262,283	  	 	$	134,394	  	
				
Flexible Products & Services	  	 	16,872	  	 	 	(1,367	) 	 	 	8,588	  	
				
Paper Packaging	  	 	74,836	  	 	 	55,498	  	 	 	34,841	  	
				
Land Management	  	 	19,051	  	 	 	9,001	  	 	 	22,074	  	

Total operating profit	  	 	337,085	  	 	 	325,415	  	 	 	199,897	  	

Restructuring charges:	  				 				 				
				
Rigid Industrial Packaging & Services	  	 	24,055	  	 	 	20,980	  	 	 	65,742	  	
				
Flexible Products & Services	  	 	6,898	  	 	 	624	  	 	 	—	  	
				
Paper Packaging	  	 	(451	) 	 	 	5,142	  	 	 	685	  	
				
Land Management	  	 	(6	) 	 	 	—	  	 	 	163	  	

Total restructuring charges	  	 	30,496	  	 	 	26,746	  	 	 	66,590	  	

Restructuring—related inventory charges:	  				 				 				
				
Rigid Industrial Packaging & Services	  	 	—	  	 	 	131	  	 	 	10,772	  	

Total restructuring—related inventory charges	  	 	—	  	 	 	131	  	 	 	10,772	  	

Acquisition-related costs:	  				 				 				
				
Rigid Industrial Packaging & Services	  	 	9,872	  	 	 	7,672	  	 	 	—	  	
				
Flexible Products & Services	  	 	14,513	  	 	 	19,504	  	 	 	—	  	

Total acquisition-related costs	  	 	24,385	  	 	 	27,176	  	 	 	—	  	

Non-cash asset impairment charges:	  				 				 				
				
Rigid Industrial Packaging & Services	  	 	1,547	  	 	 	—	  	 	 	—	  	
				
Flexible Products & Services	  	 	2,962	  	 	 	—	  	 	 	—	  	

Total non-cash asset impairment charges	  	 	4,509	  	 	 	—	  	 	 	—	  	

Operating profit before special items:	  				 				 				
				
Rigid Industrial Packaging & Services	  	 	261,800	  	 	 	291,066	  	 	 	210,908	  	
				
Flexible Products & Services	  	 	41,245	  	 	 	18,761	  	 	 	8,588	  	
				
Paper Packaging	  	 	74,385	  	 	 	60,640	  	 	 	35,526	  	
				
Land Management	  	 	19,045	  	 	 	9,001	  	 	 	22,237	  	

Total operating profit before special items	  	$	396,475	  	 	$	379,468	  	 	$	277,259	  	

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The following table sets forth EBITDA and EBITDA before special items for our consolidated results for 2011, 2010 and 2009 (Dollars in thousands):

For the year ended October 31,	  	2011	 	  	2010	 	  	2009	 	
Net income	  	$	177,174	  	  	$	215,457	  	  	$	113,832	  	
				
Plus: interest expense, net	  	 	79,552	  	  	 	65,787	  	  	 	53,593	  	
				
Plus: income tax expense	  	 	71,077	  	  	 	40,571	  	  	 	24,061	  	
				
Plus: depreciation, depletion and amortization expense	  	 	144,191	  	  	 	115,974	  	  	 	102,627	  	
				
Plus: debt extinguishment charge	  	 	—	  	  	 	—	  	  	 	782	  	
				
Less: equity earnings of unconsolidated affiliates, net of tax	  	 	4,838	  	  	 	3,539	  	  	 	(436	) 	

EBITDA	  	 	467,156	  	  	 	434,250	  	  	 	295,331	  	

Restructuring charges	  	 	30,496	  	  	 	26,746	  	  	 	66,590	  	
				
Restructuring—related inventory charges	  	 	—	  	  	 	131	  	  	 	10,772	  	
				
Acquisition-related costs	  	 	24,385	  	  	 	27,176	  	  	 	—	  	
				
Non-cash asset impairment charges	  	 	4,509	  	  	 	—	  	  	 	—	  	

EBITDA before special items	  	$	526,546	  	  	$	488,303	  	  	$	372,693	  	

Net income	  	$	177,174	  	  	$	215,457	  	  	$	113,832	  	
				
Plus: interest expense, net	  	 	79,552	  	  	 	65,787	  	  	 	53,593	  	
				
Plus: income tax expense	  	 	71,077	  	  	 	40,571	  	  	 	24,061	  	
				
Plus: other expense, net	  	 	14,120	  	  	 	7,139	  	  	 	7,193	  	
				
Plus: debt extinguishment charge	  	 	—	  	  	 	—	  	  	 	782	  	
				
Less: equity earnings of unconsolidated affiliates, net of tax	  	 	4,838	  	  	 	3,539	  	  	 	(436	) 	

Operating profit	  	 	337,085	  	  	 	325,415	  	  	 	199,897	  	
				
Less: other expense, net	  	 	14,120	  	  	 	7,139	  	  	 	7,193	  	
				
Plus: depreciation, depletion and amortization expense	  	 	144,191	  	  	 	115,974	  	  	 	102,627	  	

EBITDA	  	 	467,156	  	  	 	434,250	  	  	 	295,331	  	
				
Restructuring charges	  	 	30,496	  	  	 	26,746	  	  	 	66,590	  	
				
Restructuring—related inventory charges	  	 	—	  	  	 	131	  	  	 	10,772	  	
				
Acquisition-related costs	  	 	24,385	  	  	 	27,176	  	  	 	—	  	
				
Non-cash asset impairment charges	  	 	4,509	  	  	 	—	  	  	 	—	  	

EBITDA before special items	  	$	526,546	  	  	$	488,303	  	  	$	372,693	  	

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The following table sets forth EBITDA and EBITDA before special items for each of our business segments for 2011, 2010 and 2009 (Dollars in thousands):

For the year ended October 31,	  	2011	 	 	2010	 	 	2009	 	
Rigid Industrial Packaging & Services	  				 				 				
				
Operating profit	  	$	226,326	  	 	$	262,283	  	 	$	134,394	  	
				
Less: other expense (income), net	  	 	12,339	  	 	 	5,107	  	 	 	7,187	  	
				
Plus: depreciation and amortization expense	  	 	93,023	  	 	 	79,050	  	 	 	73,212	  	

EBITDA	  	 	307,010	  	 	 	336,226	  	 	 	200,419	  	
				
Restructuring charges	  	 	24,055	  	 	 	20,980	  	 	 	65,742	  	
				
Restructuring—related inventory charges	  	 	—	  	 	 	131	  	 	 	10,772	  	
				
Acquisition-related costs	  	 	9,872	  	 	 	7,672	  	 	 	—	  	
				
Non-cash asset impairment charges	  	 	1,547	  	 	 	—	  	 	 	—	  	

EBITDA before special items	  	$	342,484	  	 	$	365,009	  	 	$	276,933	  	
	  	 	 	 	
Flexible Products & Services	  				 				 				
				
Operating profit (loss)	  	$	16,872	  	 	$	(1,367	) 	 	$	8,588	  	
				
Less: other expense (income), net	  	 	1,397	  	 	 	1,206	  	 	 	(1	) 	
				
Plus: depreciation and amortization expense	  	 	16,537	  	 	 	4,937	  	 	 	794	  	

EBITDA	  	 	32,012	  	 	 	2,364	  	 	 	9,383	  	
				
Restructuring charges	  	 	6,898	  	 	 	624	  	 	 	—	  	
				
Acquisition-related costs	  	 	14,513	  	 	 	19,504	  	 	 	—	  	
				
Non-cash asset impairment charges	  	 	2,962	  	 	 	—	  	 	 	—	  	

EBITDA before special items	  	$	56,385	  	 	$	22,492	  	 	$	9,383	  	
	  	 	 	 	
Paper Packaging	  				 				 				
				
Operating profit	  	$	74,836	  	 	$	55,498	  	 	$	34,841	  	
				
Less: other expense (income), net	  	 	392	  	 	 	94	  	 	 	12	  	
				
Plus: depreciation and amortization expense	  	 	31,622	  	 	 	29,204	  	 	 	25,517	  	

EBITDA	  	 	106,066	  	 	 	84,608	  	 	 	60,346	  	
				
Restructuring charges	  	 	(451	) 	 	 	5,142	  	 	 	685	  	

EBITDA before special items	  	$	105,615	  	 	$	89,750	  	 	$	61,031	  	
	  	 	 	 	
Land Management	  				 				 				
				
Operating profit	  	$	19,051	  	 	$	9,001	  	 	$	22,074	  	
				
Less: other expense (income), net	  	 	(8	) 	 	 	732	  	 	 	(5	) 	
				
Plus: depreciation, depletion and amortization expense	  	 	3,009	  	 	 	2,783	  	 	 	3,104	  	

EBITDA	  	 	22,068	  	 	 	11,052	  	 	 	25,183	  	
				
Restructuring charges	  	 	(6	) 	 	 	—	  	 	 	163	  	

EBITDA before special items	  	$	22,062	  	 	$	11,052	  	 	$	25,346	  	

Consolidated EBITDA	  	$	467,156	  	 	$	434,250	  	 	$	295,331	  	

Consolidated EBITDA before special items	  	$	526,546	  	 	$	488,303	  	 	$	372,693	  	
	  	 	 	 	
Year 2011 Compared to Year 2010
Net Sales
Net sales were $4,248.0 million for 2011 compared with $3,461.5 million for 2010. The 23 percent increase was due to higher sales volumes (13 percent), which included an 11 percent increase from acquisitions and a 2 percent increase in
 
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same-structure volumes, increased selling prices (7 percent), primarily resulting from the pass-through of higher raw material costs, and the positive impact of foreign currency translation (3 percent). The higher sales volumes were primarily due to acquisitions in the Rigid Industrial Packaging & Services and Flexible Products & Services segments plus same-structure growth in all segments. The $786.3 million increase was due to Rigid Industrial Packaging & Services ($426.2 million increase), Flexible Products & Services ($304.9 million increase), Paper Packaging ($50.8 million increase) and Land Management ($4.4 million increase).
Operating Costs
Cost of products sold, as a percentage of net sales, was 81.1 percent for 2011 compared to 79.7 percent for 2010. The higher cost of products sold as a percentage of net sales was principally due to sales mix, inability to capture all cost increases in the Rigid Industrial Packaging & Services segment and higher costs of old corrugated containers in the Paper Packaging segment.
Selling, general and administrative (“SG&A”) expenses were $448.4 million for 2011 compared with $363.0 million for 2010. The $85.4 million increase was primarily due to the inclusion of SG&A expenses for acquired companies ($48.2 million), the negative impact of foreign currency translation ($10.1 million), higher professional fees ($11.7 million) and non-cash asset impairment charges ($4.5 million), partially offset by a reduction in performance based incentive accruals. Acquisition-related costs of $24.4 million and $27.2 million were also included in SG&A expenses for 2011 and 2010, respectively. SG&A expenses, as a percentage of net sales, were 10.6 percent for 2011 compared with 10.5 percent last year.
Restructuring charges were $30.5 million and $26.7 million in 2011 and 2010, respectively. Restructuring-related inventory charges were $0.1 million in 2010.
Restructuring charges for 2011 consisted of $13.3 million in employee separation costs, $4.5 million in asset impairments and $12.7 million in other restructuring costs, primarily consisting of lease termination costs ($3.5 million), professional fees ($1.9 million), relocation costs ($2.2 million) and other costs ($5.1 million). The focus for restructuring activities in 2011 was on integration of recent acquisitions in the Rigid Industrial Packaging & Services and Flexible Products & Services segments as well as the implementation of certain cost-cutting measures. During 2011, the we recorded restructuring charges of $30.5 million, Two plants in the Rigid Industrial Packaging & Services segment were closed. There were a total of 257 employees severed throughout 2011 as part of our restructuring efforts.
Restructuring charges for 2010 consisted of $13.7 million in employee separation costs, $2.9 million in asset impairments, $2.4 million in professional fees and $7.7 million in other restructuring costs. The focus of the 2010 restructuring activities was on integration of recent acquisitions in the Rigid Industrial Packaging & Services and Flexible Products & Services segments. In addition, we recorded $0.1 million of restructuring-related inventory charges as a cost of products sold in our Rigid Industrial Packaging & Services segment. Seven plants in the Rigid Industrial Packaging & Services segment, two plants in the Paper Packaging segment and one plant in Flexible Products & Services segment were closed. A total of 232 employees were severed during 2010.
In 2011, we recognized a non-cash impairment loss on machinery in our Rigid Industrial Packaging & Services segment of $1.5 million and a non-cash intangible asset impairment in our Flexible Products & Services for $3.0 million.
See Note 7 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K for additional disclosures regarding our restructuring activities.
Operating Profit
Operating profit was $337.1 million for 2011 and $325.4 million for 2010. Operating profit before special items was $396.5 million for 2011 compared with $379.5 million for 2010. The $17.0 million increase was due to Flexible Products & Services ($22.5 million increase), Paper Packaging ($13.7 million increase) and Land Management ($10.0 million increase), partially offset by Rigid Industrial Packaging & Services ($29.3 million decrease).
 
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EBITDA
EBITDA was $467.2 million and $434.3 million for 2011 and 2010, respectively. EBITDA before special items was $526.5 million for 2011 compared with $488.3 million for 2010, and this $38.2 million increase was primarily due to improved operating profit before special items for the Flexible Products & Services, Paper Packaging and Land Management segments.
Segment Review
Rigid Industrial Packaging & Services
Our Rigid Industrial Packaging & Services segment offers a comprehensive line of rigid industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and reconditioned containers. In addition, this segment offers a wide variety of services, such as container life cycle management, blending, filling and other packaging services, logistics and warehousing. The key factors influencing profitability in the Rigid Industrial Packaging & Services segment are:
 
 	•	 	Selling prices, customer demand and sales volumes;	
 
 	•	 	Raw material costs, primarily steel, resin and containerboard;	
 
 	•	 	Energy and transportation costs;	
 
 	•	 	Benefits from executing the Greif Business System;	
 
 	•	 	Restructuring charges;	
 
 	•	 	Contributions from recent acquisitions;	
 
 	•	 	Divestiture of facilities; and	
 
 	•	 	Impact of foreign currency translation.	
In this segment, net sales were $3,014.1 million for 2011 compared with $2,587.9 million for 2010. The 17 percent increase in net sales was primarily due to higher sales volumes (6 percent), which included a 4 percent increase from acquisitions and a 2 percent increase in same-structure volumes, higher selling prices (7 percent), primarily resulting from the pass-through of higher input costs, and the positive impact of foreign currency translation (4 percent).
Gross profit margin declined to 18.7 percent for 2011 from 20.9 percent for 2010. The reduction from last year was primarily due to sales mix and increased market pressure on margins and volumes.
Operating profit was $226.3 million and $262.3 million for 2011 and 2010, respectively. Operating profit before special items was $261.8 million for 2011 compared to $291.1 million for 2010. This decrease was primarily due to the lower gross profit margins and higher depreciation and amortization for this segment.
EBITDA was $307.0 million and $336.2 million for 2011 and 2010, respectively. EBITDA was impacted by restructuring charges of $24.1 million and $21.0 million, restructuring-related inventory charges of $0.1 million, acquisition-related costs of $9.9 million and $7.7 million and non-cash asset impairment charges of $1.5 million and zero for 2011 and 2010, respectively. EBITDA before special items was $342.5 million for 2011 and $365.0 million for 2010. EBITDA before special items was primarily lower due to the reduction in gross profit margins for this segment.
Flexible Products & Services
Our Flexible Products & Services segment offers a comprehensive line of flexible products, such as flexible intermediate bulk containers, shipping sacks and multiwall bags. The key factors influencing profitability in the Flexible Products & Services segment are:
 
 	•	 	Selling prices, customer demand and sales volumes;	
 
 	•	 	Raw material costs, primarily resin and containerboard;	
 
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 	•	 	Energy and transportation costs;	
 
 	•	 	Benefits from executing the Greif Business System;	
 
 	•	 	Restructuring charges;	
 
 	•	 	Contributions from recent acquisitions; and	
 
 	•	 	Impact of foreign currency translation.	
Net sales were $538.0 million for 2011 compared with $233.1 million for 2010. The increase was primarily due to same-structure growth and sales attributable to flexible intermediate bulk container companies acquired during 2010.
Gross profit margin increased to 21.4 percent for 2011 from 21.1 percent for 2010. The change in gross profit margin was primarily due to operating efficiencies attributable to the Greif Business System.
Operating profit was $16.9 million for 2011 and operating loss was $1.4 million for 2010. Operating profit before special items increased to $41.3 million for 2011 from $18.8 million for 2010. This increase was primarily due to acquisitions during 2010 and the improved gross profit margins for this segment.
EBITDA was $32.0 million and $2.4 million for 2011 and 2010, respectively. EBITDA was impacted by restructuring charges of $6.9 million and $0.6 million, acquisition-related costs of $14.5 million and $19.5 million and a non-cash asset impairment charge of $3.0 million and zero for 2011 and 2010, respectively. EBITDA before special items increased to $56.4 million for 2011 from $22.5 million for 2010. This increase was primarily due to acquisitions during 2010 and improved gross profit margins for this segment.
Paper Packaging
Our Paper Packaging segment sells containerboard, corrugated sheets, and corrugated containers in North America. The key factors influencing profitability in the Paper Packaging segment are:
 
 	•	 	Selling prices, customer demand and sales volumes;	
 
 	•	 	Raw material costs, primarily old corrugated containers;	
 
 	•	 	Energy and transportation costs;	
 
 	•	 	Benefits from executing the Greif Business System;	
 
 	•	 	Contributions from recent acquisitions;	
 
 	•	 	Divestiture of facilities; and	
 
 	•	 	Restructuring charges.	
In this segment, net sales were $675.0 million in 2011 compared to $624.1 million in 2010. The 8 percent increase in net sales was primarily due to higher sales volumes and higher containerboard selling prices attributable to realization of two containerboard price increases implemented in 2010.
Gross profit margin for the Paper Packaging segment was 17.2 percent in 2011 compared to 16.8 percent in 2010. This increase was primarily due to higher selling prices and lower energy costs, substantially offset by higher raw material costs, including a year-over-year cost increase of approximately 27 percent, or $39 per ton, for old corrugated containers compared to last year.
Operating profit was $74.8 million and $55.5 million for 2011 and 2010, respectively. Operating profit before special items was $74.4 million for 2011 compared to $60.6 million for 2010. The $13.8 million increase was primarily due to the increase in net sales and the higher gross profit margin for 2011.
EBITDA increased to $106.1 million for 2011 compared with $84.6 million in 2010. EBITDA before special items increased to $105.6 million for 2011 from $89.7 million for 2010. This increase was primarily due to the increase in net sales and the higher gross profit margin for 2011.
 
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Land Management
As of October 31, 2011, our Land Management segment consisted of approximately 267,750 acres of timber properties in the southeastern United States, which are actively harvested and regenerated, and approximately 14,700 acres in Canada. The key factors influencing profitability in the Land Management segment are:
 
 	•	 	Planned level of timber sales;	
 
 	•	 	Selling prices and customer demand;	
 
 	•	 	Gains (losses) on sale of timberland; and	
 
 	•	 	Gains on the sale of special use properties (surplus, HBU, and development properties).	
In this segment, net sales were $20.9 million in 2011 compared to $16.5 million in 2010. While timber sales are subject to fluctuations, we seek to maintain a consistent cutting schedule, within the limits of market, weather conditions and the age distribution of timber stands.
Operating profit and operating profit before the impact of special items were $19.0 million and $9.0 million in 2011 and 2010, respectively. The results of this segment reflect an increase in disposal of special-use properties (surplus, higher and better use and development properties) of $8.9 million for 2011 compared to $3.3 million for 2010. During 2011, a $2.5 million purchase price adjustment which resulted in a gain related to the expropriation of surplus property from a prior period was recorded.
EBITDA and EBITDA before special items were $22.1 million for 2011 compared to $11.1 million for 2010. Included in these amounts were profits from the disposal of special-use properties and the 2011 purchase price adjustment relating to the expropriation of surplus property from a prior period was recorded.
In order to maximize the value of our timber property, we continue to review our current portfolio and explore the development of certain of these properties in Canada and the United States. This process has led us to characterize our property as follows:
 
 	•	 	Surplus property, meaning land that cannot be efficiently or effectively managed by us, whether due to parcel size, lack of productivity, location, access limitations or for other reasons.	
 
 	•	 	HBU property, meaning land that in its current state has a higher market value for uses other than growing and selling timber.	
 
 	•	 	Development property, meaning HBU land that, with additional investment, may have a significantly higher market value than its HBU market value.	
 
 	•	 	Timberland, meaning land that is best suited for growing and selling timber.	
We report the sale of surplus and HBU property in our consolidated statements of income under “gain on disposals of properties, plants and equipment, net” and report the sale of development property under “net sales” and “cost of products sold.” All HBU and development property, together with surplus property, continues to be used by us to productively grow and sell timber until sold.
Whether timberland has a higher value for uses other than growing and selling timber is a determination based upon several variables, such as proximity to population centers, anticipated population growth in the area, the topography of the land, aesthetic considerations, including access to lakes or rivers, the condition of the surrounding land, availability of utilities, markets for timber and economic considerations both nationally and locally. Given these considerations, the characterization of land is not a static process, but requires an ongoing review and re-characterization as circumstances change.
As of October 31, 2011, we estimated that there were approximately 48,550 acres in Canada and the United States of special use property, which we expect will be available for sale in the next five to seven years.
 
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Other Income Statement Changes
Interest Expense, Net
Interest expense, net was $79.5 million and $65.8 million 2011 and 2010, respectively. The increase in interest expense, net was primarily attributable to higher average debt outstanding resulting from acquisitions and related working capital requirements. In July 2011, our wholly-owned Luxembourg subsidiary, Greif Luxembourg Finance S.C.A., issued €200.0 million of 7.375 percent Senior Notes. In October 2010, we entered into a new $1.0 billion senior secured credit facility which replaced our then-existing $700 million senior secured credit facility. See “—Liquidity and Capital Resources—Borrowing Arrangements” for a further discussion of this credit facility.
Other Expense, Net
Other expense, net was $14.1 million and $7.1 million for 2011 and 2010, respectively. The increase was primarily attributable to fees associated with the sale of non-United States accounts receivable and the impact of foreign currency exchange.
Income Tax Expense
During 2011, the effective tax rate was 29.2 percent compared to 16.1 percent in 2010. The change in the effective tax rate was primarily attributable to the change in global earnings mix, which caused a higher percentage of the company’s income to be generated from countries with higher tax rates, recognition of valuation allowances on deferred tax assets in 2011, an incremental benefit from an alternative fuel tax credit in 2010 and other discrete tax items recognized in these periods. The effective tax rate may fluctuate based on the mix of income inside and outside the United States and other factors.
Equity earnings (losses) of unconsolidated affiliates, net of tax
We recorded $4.8 million and $3.5 million of equity earnings (losses) of unconsolidated affiliates, net of tax, during 2011 and 2010, respectively.
Net income attributable to noncontrolling interests
Net income attributable to noncontrolling interests represent the portion of earnings from the operations of our majority owned subsidiaries that was deducted from net income to arrive at net income attributable to us. One of the companies acquired in 2011 is a joint venture. We do not own 100 percent of this acquired company, and it is not considered a variable interest entity (“VIE”). We do, however, exert control over the acquired company, and accordingly, the operations of this acquired company are consolidated with our operations. Net income attributable to noncontrolling interests was $1.1 million and $5.5 million for 2011 and 2010, respectively.
Net income attributable to Greif, Inc.
Based on the foregoing, net income attributable to Greif, Inc. decreased $33.9 million to $176.0 million in 2011 from $210.0 million in 2010.
Year 2010 Compared to Year 2009
Net Sales
Net sales increased 24 percent on a year over year basis to $3,461.5 million in 2010 from $2,792.2 million in 2009. The $669.3 million increase was due to higher sales volumes, higher selling prices and favorable foreign currency translation. The $669.3 million increase was due to Rigid Industrial Packaging & Services ($321.0 million increase), Flexible Products & Services ($189.1 million increase) and Paper Packaging ($163.4 million increase), partially offset by Land Management ($4.2 million decrease).
Operating Costs
Cost of products sold, as a percentage of net sales, was 79.7 percent in 2010 compared to 82.1 percent for 2009. The lower cost of products sold as a percentage of net sales were primarily due to improved productivity in 2010, permanent cost savings achieved during 2009 and the execution of our Greif Business System.
 
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SG&A expenses were $362.9 million, or 10.5 percent of net sales, in 2010 compared to $267.6 million, or 9.6 percent of net sales, in 2009. The dollar increase in SG&A expense was primarily due to the inclusion of the SG&A of acquired companies and higher employment-related costs as compared to the same period in 2009, when normal salary increases and certain employee related benefits were curtailed. SG&A expense as a percentage of net sales primarily increased as a result of acquisition-related costs, which were previously capitalized. Excluding acquisition-related costs, SG&A expenses as a percent of net sales were 9.7 percent and 9.6 percent in 2010 and 2009, respectively.
Restructuring charges were $26.7 million and $66.6 million in 2010 and 2009, respectively. Restructuring-related inventory charges were $0.1 million and $10.8 million in 2010 and 2009, respectively.
Restructuring charges for 2010 consisted of $13.7 million in employee separation costs, $2.9 million in asset impairments, $2.4 million in professional fees and $7.7 million in other restructuring costs. The focus of the 2010 restructuring activities was on integration of recent acquisitions in the Rigid Industrial Packaging & Services and Flexible Products & Services segments. In addition, we recorded $0.1 million of restructuring-related inventory charges as a cost of products sold in our Rigid Industrial Packaging & Services segment. Seven plants in the Rigid Industrial Packaging & Services segment, two plants in the Paper Packaging segment and one plant in Flexible Products & Services segment were closed. A total of 232 employees were severed during 2010.
Restructuring charges for 2009 consisted of $28.4 million in employee separation costs, $19.6 million in asset impairments, $0.3 million in professional fees and $18.3 million in other restructuring costs. The focus of the 2009 restructuring activities was on business realignment due to the economic downturn and further implementation of the Greif Business System. Nineteen plants in the Rigid Industrial Packaging & Services segment were closed. A total of 1,294 employees were severed during 2009. In addition, we recorded $10.8 million of restructuring-related inventory charges as a cost of products sold in our Rigid Industrial Packaging & Services segment related to excess inventory adjustments of closed facilities.
See Note 7 to the Notes to Consolidated Financial Statements included in Item 8 of the Form 10-K for additional disclosures regarding our restructuring activities.
Operating Profit
Operating profit was $325.4 million and $199.9 million in 2010 and 2009, respectively. Operating profit before special items was $379.5 million for 2010 compared to $277.3 million for 2009. The $102.2 million increase in operating profit before special items was principally due to increases in Rigid Industrial Packaging & Services ($80.2 million), Flexible Products & Services ($10.2 million) and Paper Packaging ($25.1 million), partially offset by a decrease in Land Management ($13.2 million).
EBITDA
EBITDA was $434.3 million and $295.3 million for 2010 and 2009, respectively. EBITDA before special items increased 31 percent to $488.3 million for 2010 compared with $372.7 million for 2009. The $115.6 million increase was primarily due to the improved operating profit before special items in the Rigid Industrial Packaging & Services, Flexible Products & Services and Paper Packaging segments.
Segment Review
Rigid Industrial Packaging & Services
Our Rigid Industrial Packaging & Services segment offers a comprehensive line of rigid industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and reconditioned containers, and services, such as container life cycle management, blending, filling and other packaging services, logistics and warehousing. The key factors influencing profitability in the Rigid Industrial Packaging & Services segment are:
 
 	•	 	Selling prices, customer demand and sales volumes;	
 
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 	•	 	Raw material costs, primarily steel, resin and containerboard;	
 
 	•	 	Energy and transportation costs;	
 
 	•	 	Benefits from executing the Greif Business System;	
 
 	•	 	Restructuring charges;	
 
 	•	 	Contributions from recent acquisitions;	
 
 	•	 	Divestiture of business units; and	
 
 	•	 	Impact of foreign currency translation.	
In this segment, net sales were $2,587.9 million in 2010 compared to $2,266.9 million in 2009. The 14.2 percent increase in net sales was due to higher sales volumes and favorable foreign currency translation, partially offset by lower selling prices reflecting lower average raw material costs.
Gross profit margin for the Rigid Industrial Packaging & Services segment was 21.0 percent in 2010 compared to 17.9 percent in 2009. This increase in gross profit margin was primarily due to higher sales volume, lower material costs and continued benefits from executing the Greif Business System.
Operating profit was $262.3 million in 2010 compared to $134.4 million in 2009. Operating profit before special items increased to $291.1 million in 2010 compared to $210.9 million in 2009. The increase in operating profit before special items was primarily due to higher net sales, lower materials costs, higher productivity and permanent cost savings achieved during 2009 from the execution of the Greif Business System, partially offset by lower net gains on asset disposals.
EBITDA was $336.2 million and $200.4 million for 2010 and 2009, respectively. EBITDA was impacted by restructuring charges of $21.0 million and $65.7 million, restructuring-related inventory charges of $0.1 million and $10.8 million and acquisition-related costs of $7.7 million and zero for 2010 and 2009, respectively. EBITDA before special items was $365.0 million for 2010 and $276.9 million for 2009. The increase in EBITDA before special items was primarily due to the same reasons affecting operating profit before special items for this segment.
Flexible Products & Services
Our Flexible Products & Services segment offers a comprehensive line of flexible products, such as flexible intermediate bulk containers and shipping sacks and multiwall bags. The key factors influencing profitability in the Flexible Products & Services segment are:
 
 	•	 	Selling prices, customer demand and sales volumes;	
 
 	•	 	Raw material costs, primarily resin and containerboard;	
 
 	•	 	Energy and transportation costs;	
 
 	•	 	Benefits from executing the Greif Business System.	
 
 	•	 	Contributions from recent acquisitions; and	
 
 	•	 	Impact of foreign currency translation.	
In this segment, net sales were $233.1 million in 2010 compared to $44.0 million in 2009. The increase was primarily due to acquisitions throughout 2010. Both periods included our multiwall bag operations, which were previously included in the Paper Packaging segment, but which have been reclassified to conform to the current year’s presentation.
Gross profit margin for the Flexible Products & Services segment was 21.1 percent in 2010 compared to 31.1 percent in 2009. This decrease in gross profit margin was primarily due to the acquisition in 2010 of several businesses that currently operate with lower margins.
 
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This segment experienced an operating loss of $1.4 million in 2010 compared to an operating profit of $8.6 million in 2009. Operating profit before special items increased to $18.8 million in 2010 from $8.6 million in 2009 primarily due to acquisitions throughout 2010.
EBITDA was $2.4 million and $9.4 million for 2010 and 2009, respectively. EBITDA was impacted by restructuring charges of $0.6 million and acquisition-related costs of $19.5 million for 2010. EBITDA before special items increased to $22.5 million for 2010 from $9.4 million for 2009 primarily due to acquisitions throughout 2010.
Paper Packaging
Our Paper Packaging segment sells containerboard, corrugated sheets, and corrugated containers in North America. The key factors influencing profitability in the Paper Packaging segment are:
 
 	•	 	Selling prices, customer demand and sales volumes;	
 
 	•	 	Raw material costs, primarily old corrugated containers;	
 
 	•	 	Energy and transportation costs;	
 
 	•	 	Benefits from executing the Greif Business System;	
 
 	•	 	Contributions from recent acquisitions;	
 
 	•	 	Divestiture of business units; and	
 
 	•	 	Restructuring charges.	
In this segment, net sales were $624.1 million in 2010 compared to $460.7 million in 2009. The 35 percent increase in net sales was due to higher sales volumes and higher selling prices.
Gross profit margin for the Paper Packaging segment was 16.8 percent in 2010 compared to 15.2 percent in 2009. This increase in gross profit margin was primarily driven by higher sales volumes and continued benefits from executing the Greif Business System partially offset by higher material costs.
Operating profit was $55.5 million and $34.8 million in 2010 and 2009, respectively. Operating profit before special items increased to $60.6 million in 2010 compared to $35.5 million in 2009. The increase in operating profit before special items was primarily due to higher net sales and permanent costs savings achieved during 2009 from the execution of the Greif Business System, partially offset by higher material costs.
EBITDA increased to $84.6 million for 2010 compared with $60.3 million in 2009. EBITDA before special items increased to $89.7 million for 2010 from $61.0 million for 2009. The increase in EBITDA before special items was primarily due to the same reasons affecting operating profit before special items for this segment.
Land Management
As of October 31, 2010, our Land Management segment consisted of approximately 267,150 acres of timber properties in the southeastern United States, which are actively harvested and regenerated, and approximately 24,700 acres in Canada. The key factors influencing profitability in the Land Management segment are:
 
 	•	 	Planned level of timber sales;	
 
 	•	 	Selling prices and customer demand;	
 
 	•	 	Gains (losses) on sale of timberland; and	
 
 	•	 	Sale of special use properties (surplus, HBU, and development properties).	
In this segment, net sales were $16.5 million in 2010 compared to $20.6 million in 2009. While timber sales are subject to fluctuations, we seek to maintain a consistent cutting schedule, within the limits of market and weather conditions.
 
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Gross profit margin for the Land Management segment was 46.7 percent in 2010 compared to 53.5 percent in 2009. This decrease in gross profit margin was primarily driven by changes in product mix.
Operating profit was $9.0 million and $22.1 million in 2010 and 2009, respectively. Operating profit before special items was $9.0 million in 2010 compared to $22.2 million in 2009. Included in these amounts were profits from the sale of special use properties of $3.3 million in 2010 and $14.8 million in 2009.
EBITDA decreased to $11.1 million for 2010 compared with $25.2 million in 2009. EBITDA before special items decreased to $11.1 million for 2010 from $25.3 million for 2009 primarily due to the reduction in sales of special use properties as compared to 2009.
Other Income Statement Changes
Interest Expense, Net
Interest expense, net, was $65.8 million and $53.6 million in 2010 and 2009, respectively. The increase in interest expense, net was primarily attributable to higher average debt outstanding and an increase in our borrowing costs. In October 2010, we entered into a new $1.0 billion senior secured credit facility which replaced our then-existing $700 million senior secured credit facility. See “—Liquidity and Capital Resources—Borrowing Arrangements” for a further discussion of this credit facility.
Debt Extinguishment Charges
There were no debt extinguishment charges in 2010 and $0.8 million in 2009.
Other Expense, Net
Other expense, net for 2010 and 2009 was $7.1 million and $7.2 million, respectively. The slight decrease in other expense, net was primarily due to fees associated with the sale of our non-United States accounts receivable.
Income Tax Expense
During 2010, the effective tax rate was 16.1 percent compared to 17.4 percent in 2009. The change in the effective tax rate was primarily due to a change in the mix of income between the United States and non-U.S. locations for the respective periods as well as an incremental benefit from an alternative fuel tax credit. The effective tax rate may fluctuate based on the mix of income inside and outside the United States and other factors.
Equity earnings (losses) of unconsolidated affiliates, net of tax
We recorded $3.5 million and ($0.4) million of equity earnings (losses) of unconsolidated affiliates, net of tax, during 2010 and 2009, respectively.
Net income attributable to noncontrolling interests
Net income attributable to noncontrolling interests represent the portion of earnings from the operations of our majority owned subsidiaries that was deducted from net income to arrive at net income attributable to us. Net income attributable to noncontrolling interests was $5.5 million and $3.2 million for 2010 and 2009, respectively.
Net income attributable to Greif, Inc.
Based on the foregoing, net income attributable to Greif, Inc. increased $99.4 million to $210.0 million in 2010 from $110.6 million in 2009.
BALANCE SHEET CHANGES
During the third quarter of 2011, we recorded an out-of-period correction of an error in both noncontrolling interests, which had been understated by $24.7 million, and foreign currency translation within other comprehensive income
 
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(loss), which had been overstated by $24.7 million, as of October 31, 2010. In the fourth quarter of 2011, we corrected a prior period error related to the incorrect balance sheet elimination of certain intercompany balances occurring in 2003. The effect of the error impacted both foreign currency translation within other comprehensive income (loss), which had been overstated by $19.6 million, and accounts payable, which had been understated by $19.6 million. We have corrected the errors for all periods presented by restating the consolidated statements of changes in shareholders’ equity and the consolidated balance sheets. The correction of the errors did not impact total assets, consolidated net income, or cash flows. See also Note 19 to the Consolidated Financial Statements included in Item 8 of this Form 8-K for additional disclosures.
Working capital changes
The $88.5 million increase in trade accounts receivable was primarily related to higher 2011 sales as compared to 2010 sales, extended credit terms with customers and 2011 acquisitions in North America, South America, Europe and Asia.
The $35.9 million increase in inventories was mainly driven by higher raw material prices, steel costs, higher overall business activity levels and 2011 acquisitions in North America, South America, Europe and Asia.
The $5.8 million increase in prepaid expenses and other current assets was primarily due to the 2011 acquisitions in North America, South America, Europe and Asia.
The $19.9 million increase in accounts payable primarily related to higher raw material costs, especially steel, timing of payments, foreign currency translation and the 2011 acquisitions in North America, South America, Europe and Asia.
The $8.9 million increase in accrued payroll and employee benefits primarily related to the increase in headcount and the 2011 acquisitions in North America, South America, Europe and Asia.
The $76.4 million increase in short-term borrowings was primarily related to the 2011 acquisitions in North America, South America, Europe and Asia.
The $43.8 million increase in other current liabilities was primarily related to the 2010 acquisitions in North America, South America, Europe and Asia.
Other balance sheet changes
The $295.2 million increase in goodwill primarily related to 2011 acquisitions in North America, South America, Europe and Asia. Refer to Note 6 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
The $56.6 million increase in other intangibles primarily related to the 2011 acquisitions in North America, South America, Europe and Asia. Refer to Note 6 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
The $143.5 million increase in net property, plant and equipment primarily related to the 2011 acquisitions in North America, South America, Europe and Asia.
The $392.1 million increase in long term debt was primarily related to the issuance of Senior Notes due 2021. Refer to Note 9 to the Notes to Consolidated Financial Statements included in Item 8 of this Form 10-K.
The $10.2 million increase in pension liabilities was primarily due to a reduction to the discount rate, which contributed to an increase in the projected benefit obligation.
The $86.3 million increase in other long-term liabilities was primarily due to a future payment for the purchase price of a 2011 acquisition and an increase in environmental liabilities resulting from a 2011 acquisition.
 
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LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are operating cash flows, the proceeds from our trade accounts receivable credit facility, proceeds from the sale of our non-United States accounts receivable and borrowings under our Credit Agreement and Senior Notes, further discussed below. We have used these sources to fund our working capital needs, capital expenditures, cash dividends, common stock repurchases and acquisitions. We anticipate continuing to fund these items in a like manner. We currently expect that operating cash flows, the proceeds from our trade accounts receivable credit facility, proceeds from the sale of our non-United States accounts receivable and borrowings under our Credit Agreement and Senior Notes will be sufficient to fund our currently anticipated working capital, capital expenditures, debt repayment, potential acquisitions of businesses and other liquidity needs for at least 12 months. As of October 31, 2011, we had $644.6 million available to borrow under our Credit Agreement, as described below.
Capital Expenditures
During 2011, 2010 and 2009, we invested $162.4 million (excluding $3.5 million for timberland properties), $144.1 million (excluding $21.0 million for timberland properties), $124.7 million (excluding $1.0 million for timberland properties) in capital expenditures, respectively.
We anticipate future capital expenditures, excluding the potential purchase of timberland properties, of approximately $130 million through October 31, 2012. The expenditures will replace and improve existing equipment and fund new facilities.
Acquisitions, Divestitures and Other Significant Transactions
During 2011, we completed eight acquisitions, all in the Rigid Industrial Packaging and Services segment: four European companies acquired in February, May, July and August; two joint ventures entered into in February and August in North America and in the Asia Pacific region, respectively; the acquisition of the remaining outstanding minority shares from a 2008 acquisition in South America; and the acquisition of additional shares of a company in North America that is a consolidated subsidiary as of October 31, 2011.
The cash paid, net of cash received for the eight 2011 acquisitions was $344.9 million. There is a future payment due related to a 2011 acquisition.
During 2010, the Company completed twelve acquisitions consisting of seven rigid industrial packaging companies and five flexible products companies and made a contingent purchase price related to a 2007 acquisition. The seven rigid industrial packaging companies consisted of a European company purchased in November 2009, an Asian company purchased in June 2010, a North American drum reconditioning company purchased in July, a North American drum reconditioning company purchased in August 2010, one European company purchased in August 2010, a 51 percent interest in a Middle Eastern company purchased in September 2010 and a South American company purchased in September 2010. The five flexible products companies acquired conduct business throughout Europe, Asia and North America and were acquired in February, June, August and September 2010. On September 29, 2010, we entered into a joint venture agreement with Dabbagh Group Holding Company Limited, a Saudi Arabia corporation (“Dabbagh”), and National Scientific Company Limited, a Saudi Arabia limited liability company and a subsidiary of Dabbagh (“NSC”), referred to herein as the Flexible Packaging Joint Venture (“Flexible Packaging JV”). Thereafter, we contributed the five acquired flexible product companies to the Flexible Packaging JV. We own 50 percent of the Flexible Packaging JV but exercise management control of its operations. The results of the Flexible Packaging JV have been consolidated within our 2011 and 2010 results.
The aggregate purchase price for the twelve 2010 acquisitions was $176.2 million.
During 2010, we sold specific Paper Packaging segment assets and facilities in North America. The net gain from these sales was immaterial.
Refer to Note 2 to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional disclosures regarding our 2011 and 2010 acquisitions and other significant transactions.
 
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Borrowing Arrangements
Long-term debt is summarized as follows (Dollars in thousands):

   	  	October 31, 2011	 	 	October 31, 2010	 	
Credit Agreement	  	$	355,447	  	 	$	273,700	  	
			
Senior Notes due 2017	  	 	302,853	  	 	 	303,396	  	
			
Senior Notes due 2019	  	 	242,932	  	 	 	242,306	  	
			
Senior Notes due 2021	  	 	280,206	  	 	 	—	  	
			
Trade accounts receivable credit facility	  	 	130,000	  	 	 	135,000	  	
			
Other long-term debt	  	 	46,200	  	 	 	11,187	  	

	  	 	1,357,638	  	 	 	965,589	  	
			
Less current portion	  	 	(12,500	) 	 	 	(12,523	) 	

Long-term debt	  	$	1,345,138	  	 	$	953,066	  	
	  	 	 	 	 	 	 	 	
Credit Agreement
We and two of our international subsidiaries are borrowers under a $1.0 billion senior secured credit agreement (the “Credit Agreement”) with a syndicate of financial institutions. The Credit Agreement provides us with a $750 million revolving multicurrency credit facility and a $250 million term loan, both expiring October 29, 2015, with an option to add $250 million to the facilities with the agreement of the lenders. The $250 million term loan is scheduled to amortize by the payment of principal in the amount of $3.1 million each quarter-end for the first eight quarters, $6.3 million each quarter-end for the next eleven quarters and the remaining balance on the maturity date. The revolving credit facility under the Credit Agreement is available to fund ongoing working capital and capital expenditure needs, for general corporate purposes and to finance acquisitions. Interest is based on a Eurodollar rate or a base rate that resets periodically plus an agreed upon margin amount. On June 22, 2011, the Credit Agreement was amended to allow for the issuance of additional senior notes, and additional senior notes in the amount of €200.0 million were issued on July 15, 2011. As of October 31, 2011, a total of $355.4 million was outstanding under the Credit Agreement. The weighted average interest rate on the Credit Agreement was 2.15% for the twelve months ended October 31, 2011.
The Credit Agreement contains certain covenants, which include financial covenants that require us to maintain a certain leverage ratio and a fixed charge coverage ratio. The leverage ratio generally requires that at the end of any fiscal quarter we will not permit the ratio of (a) our total consolidated indebtedness, to (b) our consolidated net income plus depreciation, depletion and amortization, interest expense (including capitalized interest), income taxes, and minus certain extraordinary gains and non-recurring gains (or plus certain extraordinary losses and non-recurring losses) and plus or minus certain other items for the preceding twelve months (“adjusted EBITDA”) to be greater than 3.75 to 1 (or 3.5 to 1, during any collateral release period). The fixed charge coverage ratio generally requires that at the end of any fiscal quarter we will not permit the ratio of (a) (i) our consolidated adjusted EBITDA, less (ii) the aggregate amount of certain of our cash capital expenditures, and less (iii) the aggregate amount of our federal, state, local and foreign income taxes actually paid in cash (other than taxes related to asset sales not in the ordinary course of business), to (b) the sum of (i) our consolidated interest expense to the extent paid or payable in cash and (ii) the aggregate principal amount of all of our regularly scheduled principal payments or redemptions or similar acquisitions for value of outstanding debt for borrowed money, but excluding any such payments to the extent refinanced through the incurrence of additional indebtedness, to be less than 1.5 to 1, during the applicable trailing twelve month period. On October 31, 2011, we were in compliance with these two covenants.
The terms of the Credit Agreement limit our ability to make “restricted payments,” which include dividends and purchases, redemptions and acquisitions of our equity interests. The repayment of amounts borrowed under the Credit Agreement are secured by a security interest in the personal property of Greif, Inc. and certain of our United States subsidiaries, including equipment and inventory and certain intangible assets, as well as a pledge of the capital stock of substantially all of our United States subsidiaries. The repayment of amounts borrowed under the Credit Agreement is
 
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also secured, in part, by capital stock of the non-U.S. subsidiaries that are parties to the Credit Agreement. However, in the event that we receive and maintain an investment grade rating from either Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, we may request the release of such collateral. The payment of outstanding principal under the Credit Agreement and accrued interest thereon may be accelerated and become immediately due and payable upon our default in its payment or other performance obligations or its failure to comply with the financial and other covenants in the Credit Agreement, subject to applicable notice requirements and cure periods as provided in the Credit Agreement.
Refer to Note 9 to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional disclosures regarding the Credit Agreement.
Senior Notes
We have issued $300.0 million of our 6.75% Senior Notes due February 1, 2017. Proceeds from the issuance of these Senior Notes were principally used to fund the purchase of our previously outstanding senior subordinated notes and for general corporate purposes. These Senior Notes are general unsecured obligations of Greif, Inc. only, provide for semi-annual payments of interest at a fixed rate of 6.75%, and do not require any principal payments prior to maturity on February 1, 2017. These Senior Notes are not guaranteed by any of our subsidiaries and thereby are effectively subordinated to all of our subsidiaries’ existing and future indebtedness. The Indenture pursuant to which these Senior Notes were issued contains covenants, which, among other things, limit our ability to create liens on our assets to secure debt and to enter into sale and leaseback transactions. These covenants are subject to a number of limitations and exceptions as set forth in the Indenture. As of October 31, 2011, we were in compliance with these covenants.
We have issued $250.0 million of our 7.75% Senior Notes due August 1, 2019. Proceeds from the issuance of these Senior Notes were principally used for general corporate purposes, including the repayment of amounts outstanding under our revolving multicurrency credit facility under our then-existing credit agreement, without any permanent reduction of the commitments thereunder. These Senior Notes are general unsecured obligations of Greif, Inc. only, provide for semi-annual payments of interest at a fixed rate of 7.75%, and do not require any principal payments prior to maturity on August 1, 2019. These Senior Notes are not guaranteed by any of our subsidiaries and thereby are effectively subordinated to all of our subsidiaries’ existing and future indebtedness. The Indenture pursuant to which these Senior Notes were issued contains covenants, which, among other things, limit our ability to create liens on our assets to secure debt and to enter into sale and leaseback transactions. These covenants are subject to a number of limitations and exceptions as set forth in the Indenture. As of October 31, 2011, we were in compliance with these covenants.
Our Luxembourg subsidiary has issued €200.0 million of 7.375% Senior Notes due July 15, 2021. These Senior Notes are fully and unconditionally guaranteed on a senior basis by Greif, Inc. A portion of the proceeds from the issuance of these Senior Notes was used to repay non-U.S. borrowings under the Credit Agreement, without any permanent reduction of the commitments thereunder, with the remaining proceeds available for general corporate purposes, including the financing of acquisitions. These Senior Notes are general unsecured obligations of the Luxembourg subsidiary and Greif, Inc. and provide for semi-annual payments of interest at a fixed rate of 7.375%, and do not require any principal payments prior to maturity on July 15, 2021. These Senior Notes are not guaranteed by any subsidiaries of the issuer or Greif, Inc. and thereby are effectively subordinated to all existing and future indebtedness of the subsidiaries of the issuer and Greif, Inc. The Indenture pursuant to which these Senior Notes were issued contains covenants, which, among other matters, limit our ability to create liens on our assets to secure debt and to enter into sale and leaseback transactions. These covenants are subject to a number of limitations and exceptions as set forth in the Indenture. As of October 31, 2011, we were in compliance with these covenants.
Refer to Note 9 to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional disclosures regarding the Senior Notes discussed above.
United States Trade Accounts Receivable Credit Facility
We have a $130.0 million trade accounts receivable credit facility (the “Receivables Facility”) with a financial institution. The Receivables Facility matures in September 2014. In addition, we can terminate the Receivables Facility at any time upon five days prior written notice. The Receivables Facility is secured by certain of our United States trade receivables
 
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and bears interest at a variable rate based on the applicable base rate or other agreed-upon rate plus a margin amount. Interest is payable on a monthly basis and the principal balance is payable upon termination of the Receivables Facility. The Receivables Facility contains certain covenants, including financial covenants for leverage and fixed charge coverage ratios identical to the Credit Agreement. Proceeds of the Receivables Facility are available for working capital and general corporate purposes. As of October 31, 2011, $130.0 million was outstanding under the Receivables Facility.
Refer to Note 9 of the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional disclosures regarding the Receivables Facility.
Sale of Non-United States Accounts Receivable
Certain of our international subsidiaries have entered into discounted receivables purchase agreements and factoring agreements (the “RPAs”) pursuant to which trade receivables generated from certain countries other than the United States and which meet certain eligibility requirements are sold to certain international banks or their affiliates. The structure of these transactions provides for a legal true sale, on a revolving basis, of the receivables transferred from our various subsidiaries to the respective banks and affiliates. The banks fund an initial purchase price of a certain percentage of eligible receivables based on a formula with the initial purchase price approximating 75 percent to 90 percent of eligible receivables. The remaining deferred purchase price is settled upon collection of the receivables. At the balance sheet reporting dates, we remove from accounts receivable the amount of proceeds received from the initial purchase price since they meet the applicable criteria of ASC 860, “Transfers and Servicing,” and continue to recognize the deferred purchase price in our accounts receivable. The receivables are sold on a non-recourse basis with the total funds in the servicing collection accounts pledged to the respective banks between the settlement dates. The maximum amount of aggregate receivables that may be sold under our various RPAs was $179.5 million as of October 31, 2011. As of October 31, 2011, total accounts receivable of $163.1 million were sold under the various RPAs.
At the time the receivables are initially sold, the difference between the carrying amount and the fair value of the assets sold are included as a loss on sale and classified as “other expense” in the consolidated statements of operations. Expenses associated with the various RPAs totaled $6.5 million for the year ended October 31, 2011. Additionally, we perform collections and administrative functions on the receivables sold similar to the procedures we use for collecting all of our receivables. The servicing liability for these receivables is not material to the consolidated financial statements.
Refer to Note 3 to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information regarding these various RPAs.
Other
In addition to the amounts borrowed against the Credit Agreement and proceeds from the Senior Notes and the United States trade accounts receivable credit facility, as of October 31, 2011, we had outstanding other debt of $183.5 million, comprised of $46.2 million in long-term debt and $137.3 million in short-term borrowings.
As of October 31, 2011, annual maturities, including the current portion, of long-term debt under our various financing arrangements were $12.5 million in 2012, $71.2 million in 2013, $155.0 million in 2014, $292.9 million in 2015, $0.0 million in 2016 and $826.0 million thereafter.
As of October 31, 2011 and 2010, we had deferred financing fees and debt issuance costs of $18.9 million and $21.4 million, respectively, which are included in other long-term assets.
Financial Instruments
Cross-Currency Interest Rate Swaps
We entered into a cross-currency interest rate swap agreement which was designated as a hedge of a net investment in a foreign operation. Under this swap agreement, we received interest semi-annually from the counterparties in an amount equal to a fixed rate of 6.75% on $200.0 million and paid interest in an amount equal to a fixed rate of 6.25% on €146.6 million. During the third quarter of 2010, we terminated this swap agreement, including any future cash flows. The termination of this swap agreement resulted in a cash gain of $25.7 million ($15.8 million, net of tax) which is included within foreign currency translation adjustments.
 
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Interest Rate Derivatives
We have interest rate swap agreements with various maturities through January 2013. These interest rate swap agreements are used to manage our fixed and floating rate debt mix. Under these swap agreements, we receive interest monthly from the counterparties based upon a designated London InterBank Offered Rate (“LIBOR”), and we pay interest based upon a designated fixed rate over the life of the swap agreements.
We have three interest rate derivatives (floating to fixed swap agreements recorded as cash flow hedges) with a total notional amount of $76.6 million. Under these swap agreements, we receive interest based upon a variable interest rate from the counterparties (weighted average of 0.27% as of October 31, 2011 and 0.26% as of October 31, 2010) and pay interest based upon a fixed interest rate (weighted average of 1.92% as of October 31, 2011 and 1.78% as of October 31, 2010). The other comprehensive loss on these interest rate derivatives was $0.3 million as of October 31, 2011 and $2.0 million as of October 31, 2010.
In the third quarter of 2010, we terminated a $100.0 million fixed to floating swap, including any future cash flows, which had been recorded as a fair value hedge. Under this swap agreement, we received interest from the counterparty based upon a fixed rate of 6.75% and paid interest based upon a variable rate on a semi-annual basis. The termination of this swap agreement resulted in a cash gain of $3.6 million.
Foreign Exchange Hedges
As of October 31, 2011, we had outstanding foreign currency forward contracts in the notional amount of $160.6 million ($252.9 million as of October 31, 2010). The purpose of these contracts is to hedge our exposure to foreign currency transactions and short-term intercompany loan balances in our international businesses. The fair value of these contracts as of October 31, 2011 resulted in a loss of $1.6 million recorded in the consolidated statements of operations and a gain of $0.7 million recorded in other comprehensive income. The fair value of similar contracts as of October 31, 2010 resulted in a gain of $0.8 million recorded in the consolidated statements of operations and a loss of $2.3 million recorded in other comprehensive income.
Energy Hedges
We have entered into certain cash flow hedge agreements to mitigate our exposure to cost fluctuations in natural gas prices through October 31, 2011. Under these hedge agreements, we have agreed to purchase natural gas at a fixed price. As of October 31, 2011, the notional amount of these hedge agreements was $2.7 million ($2.4 million as of October 31, 2010). The other comprehensive loss on these hedge agreements was $0.1 million as of October 31, 2011 and $0.3 million as of October 31, 2010. As a result of the high correlation between the hedged instruments and the underlying transactions,  ineffectiveness has not had a material impact on our consolidated statements of operations for the year ended October 31, 2011.
Contractual Obligations
As of October 31, 2011, we had the following contractual obligations (Dollars in millions):

 	  	 	 	  	Payments Due by Period	 	
   	  	Total	 	  	Less than 1 year	 	  	1 -3 years	 	  	3-5 years	 	  	After 5 years	 	
Long-term debt	  	$	1,827.0	  	  	$	71.8	  	  	$	270.4	  	  	$	514.3	  	  	$	970.5	  	
						
Short-term borrowing	  	 	145.1	  	  	 	145.1	  	  	 	—	  	  	 	—	  	  	 	—	  	
						
Capital lease obligations	  	 	91.9	  	  	 	22.1	  	  	 	35.7	  	  	 	29.8	  	  	 	4.3	  	
						
Liabilities held by special purpose entities	  	 	62.8	  	  	 	2.2	  	  	 	4.5	  	  	 	4.5	  	  	 	51.6	  	
						
Deferred purchase payments	  	 	63.6	  	  	 	—	  	  	 	63.6	  	  				  				
						
Environmental liabilities	  	 	29.3	  	  	 	8.5	  	  	 	4.9	  	  	 	4.3	  	  	 	11.6	  	
						
Operating leases	  	 	20.7	  	  	 	6.3	  	  	 	8.5	  	  	 	4.7	  	  	 	1.2	  	
						
Current portion of long-term debt	  	 	12.5	  	  	 	12.5	  	  	 	—	  	  	 	—	  	  	 	—	  	

Total	  	$	2,252.9	  	  	$	268.5	  	  	$	387.6	  	  	$	557.6	  	  	$	1,039.2	  	

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Our unrecognized tax benefits under ASC 740, “Income Taxes” have been excluded from the contractual obligations table because of the inherent uncertainty and the inability to reasonably estimate the timing of cash outflows.
Stock Repurchase Program and Other Share Acquisitions
Our Board of Directors has authorized us to purchase up to four million shares of Class A Common Stock or Class B Common Stock or any combination of the foregoing. During 2011, we repurchased 8,700 shares of Class A Common Stock and we repurchased 291,300 shares of Class B Common Stock (refer to Item 5 to this Form 10-K for additional information regarding these repurchases). As of October 31, 2011, we had repurchased 3,183,272 shares, including 1,425,452 shares of Class A Common Stock and 1,757,820 shares of Class B Common Stock, under this program. The total cost of the shares repurchased from November 1, 2008 through October 31, 2011 was $20.9 million.
Effects of Inflation
Inflation did not have a material impact on our operations during 2011, 2010 or 2009.
Variable Interest Entities
We evaluate whether an entity is a VIE and determine if the primary beneficiary status is appropriate on a quarterly basis. We consolidate VIE’s for which we are the primary beneficiary. If we are not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, we consider all relevant facts and circumstances, including: the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE.
During 2011, we acquired a minority ownership interest in an entity that is accounted for as an unconsolidated equity investment. This entity is deemed to be a VIE since the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support. However, we are not the primary beneficiary because we do not have (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, or (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result, this entity is not consolidated in our results.
Significant Nonstrategic Timberland Transactions
On March 28, 2005, Soterra LLC (a wholly owned subsidiary) entered into two real estate purchase and sale agreements with Plum Creek Timberlands, L.P. (“Plum Creek”) to sell approximately 56,000 acres of timberland and related assets located primarily in Florida for an aggregate sales price of approximately $90 million, subject to closing adjustments. In connection with the closing of one of these agreements, Soterra LLC sold approximately 35,000 acres of timberland and associated assets in Florida, Georgia and Alabama for $51.0 million, resulting in a pretax gain of $42.1 million, on May 23, 2005. The purchase price was paid in the form of cash and a $50.9 million purchase note payable (the “Purchase Note”) by an indirect subsidiary of Plum Creek (the “Buyer SPE”). Soterra LLC contributed the Purchase Note to STA Timber LLC (“STA Timber”), one of our indirect wholly owned subsidiaries. The Purchase Note is secured by a Deed of Guarantee issued by Bank of America, N.A., London Branch, in an amount not to exceed $52.3 million (the “Deed of Guarantee”), as a guarantee of the due and punctual payment of principal and interest on the Purchase Note.
On May 31, 2005, STA Timber issued in a private placement its 5.20% Senior Secured Notes due August 5, 2020 (the “Monetization Notes”) in the principal amount of $43.3 million. In connection with the sale of the Monetization Notes, STA Timber entered into note purchase agreements with the purchasers of the Monetization Notes (the “Note Purchase Agreements”) and related documentation. The Monetization Notes are secured by a pledge of the Purchase Note and the Deed of Guarantee. The Monetization Notes may be accelerated in the event of a default in payment or a breach of the other obligations set forth therein or in the Note Purchase Agreements or related documents, subject in certain cases to any applicable cure periods, or upon the occurrence of certain insolvency or bankruptcy related events.
 
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The Monetization Notes are subject to a mechanism that may cause them, subject to certain conditions, to be extended to November 5, 2020. The proceeds from the sale of the Monetization Notes were primarily used for the repayment of indebtedness. Greif, Inc. and its other subsidiaries have not extended any form of guaranty of the principal or interest on the Monetization Notes. Accordingly, Greif, Inc. and its other subsidiaries will not become directly or contingently liable for the payment of the Monetization Notes at any time. The Buyer SPE is a separate and distinct legal entity from us; however the Buyer SPE has been consolidated into our operations.
The Buyer SPE is deemed to be a VIE since the assets of the Buyer SPE are not available to satisfy the liabilities of the Buyer SPE. The Buyer SPE is a separate and distinct legal entity from us, but we are the primary beneficiary because we have (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result, Buyer SPE has been consolidated into our operations.
Flexible Products Joint Venture
On September 29, 2010, Greif, Inc. and its indirect subsidiary Greif International Holding Supra C.V. formed a joint venture (referred to herein as the “Flexible Products JV”) with Dabbagh Group Holding Company Limited and its subsidiary National Scientific Company Limited. The Flexible Products JV owns the operations in the Flexible Products & Services segment, with the exception of the North American multi-wall bag business. The Flexible Products JV has been consolidated into our operations as of its formation date of September 29, 2010.
The Flexible Products JV is deemed to be a VIE since the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support. We are the primary beneficiary because we have (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.
Recent Accounting Standards
Newly Adopted Accounting Standards
In June 2009, the Financial Accounting Standards Board (“FASB”) amended ASC 860, “Transfers and Servicing.” The amendment to ASC 860 requires an enterprise to evaluate whether the transaction is legally isolated from us and whether the results of the transaction are consolidated within the consolidated financial statements. We adopted the new guidance beginning November 1, 2010, and the adoption of the new guidance did not impact our financial position, results of operations or cash flows, other than the related disclosures.
In June 2009, the FASB amended ASC 810, “Consolidation.” The amendment to ASC 810 changed the methodology for determining the primary beneficiary of a VIE from a quantitative risk and rewards based model to a qualitative determination. It also requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE. Accordingly, we reevaluated our previous ASC 810 conclusions, including (1) whether an entity is a VIE, (2) whether the enterprise is the VIE’s primary beneficiary, and (3) what type of financial statement disclosures are required. We adopted the new guidance beginning November 1, 2010, and the adoption of the new guidance did not impact our financial position, results of operations or cash flows, other than the related disclosures.
Recently Issued Accounting Standards
Effective July 1, 2009, changes to the ASC are communicated through an Accounting Standards Update (“ASU”). As of October 31, 2011, the FASB has issued ASU’s 2009-01 through 2011-09. We reviewed each ASU and determined that they will not have a material impact on our financial position, results of operations or cash flows, other than related disclosures.
 
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In December 2010, the FASB issued ASU 2010-29 “Business Combinations: Disclosure of supplementary pro forma information for business combinations.” The amendment to ASC 805 “Business Combinations” requires a public entity to disclose pro forma information for business combinations that occurred in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as through the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. We will adopt the new guidance beginning November 1, 2011, and the adoption of the new guidance will not impact our financial position, results of operations or cash flows, other than the related disclosures.
In June 2011, the FASB issued ASU 2011-05 “Comprehensive Income: Presentation of comprehensive income.” The amendment to ASC 220 “Comprehensive Income” requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. We will adopt the new guidance beginning November 1, 2011, and the adoption of the new guidance will not impact our financial position, results of operations or cash flows, other than the related disclosures.
 
 ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	
Interest Rate Risk
We are subject to interest rate risk related to our financial instruments that include borrowings under the 2010 Credit Agreement, proceeds from our Senior Notes and trade accounts receivable credit facility, and interest rate swap agreements. We do not enter into financial instruments for trading or speculative purposes. The interest rate swap agreements have been entered into to manage our exposure to variability in interest rates and changes in the fair value of fixed rate debt.
We had interest rate swap agreements with an aggregate notional amount of $76.6 million and $125.0 million as of October 31, 2011 and 2010, respectively, with various maturities through 2013. The interest rate swap agreements are used to manage our fixed and floating rate debt mix. Under certain of these agreements, we receive interest monthly from the counterparties equal to LIBOR and pay interest at a fixed rate over the life of the contracts. A liability for the loss on interest rate swap contracts, which represented their fair values, in the amount of $0.3 million and $2.0 million was recorded as of October 31, 2011 and 2010, respectively.
 
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The tables below provide information about our derivative financial instruments and other financial instruments that are sensitive to changes in interest rates. For the Credit Agreement, Senior Notes and trade accounts receivable credit facility, the tables present scheduled amortizations of principal and the weighted average interest rate by contractual maturity dates as of October 31, 2011 and 2010. For interest rate swaps, the tables present annual amortizations of notional amounts and weighted average interest rates by contractual maturity dates. Under the cash flow swap agreements, we receive interest monthly from the counterparties and pay interest monthly to the counterparties.
The fair values of our Credit Agreement, Senior Notes and trade accounts receivable credit facility are based on rates available to us for debt of the same remaining maturity as of October 31, 2011 and 2010. The fair value of the interest rate swap agreements has been  determined based upon the market settlement prices of comparable contracts as of October 31, 2011 and 2010.
Financial Instruments
As of October 31, 2011
(Dollars in millions)

 	  	Expected Maturity Date	 	 	 	 	 	 	 	
   	  	2012	 	 	2013	 	 	2014	 	 	2015	 	 	2016	 	 	After
2016	 	 	Total	 	 	Fair
Value	 	
Credit Agreement:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	$	13	  	 	$	25	  	 	$	25	  	 	$	292	  	 	 	—	  	 	 	—	  	 	$	355	  	 	$	355.4	  	
									
Average interest rate(1)	  	 	2.14	% 	 	 	2.14	% 	 	 	2.14	% 	 	 	2.14	% 	 	 	—	  	 	 	—	  	 	 	2.14	% 	 				
									
Senior Notes due 2017:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	300	  	 	$	300	  	 	$	317.9	  	
									
Average interest rate	  	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 				
									
Senior Notes due 2019:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	250	  	 	$	250	  	 	$	268.8	  	
									
Average interest rate	  	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 				
									
Senior Notes due 2021:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	280	  	 	$	280	  	 	$	280.2	  	
									
Average interest rate	  	 	7.38	% 	 	 	7.38	% 	 	 	7.38	% 	 	 	7.38	% 	 	 	7.38	% 	 	 	7.38	% 	 	 	7.38	% 	 				
									
Trade accounts receivable credit facility:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	 	—	  	 	 	—	  	 	$	130	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	130	  	 	$	130	  	
									
Interest rate swaps:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	$	75	  	 	$	2	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	77	  	 	$	(0.3	) 	
									
Average pay rate(2)	  	 	1.92	% 	 	 	2.69	% 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 				 				
									
Average receive rate(3)	  	 	0.27	% 	 	 	1.61	% 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 				 				

(1)	Variable rate specified is based on LIBOR or an alternative base rate plus a calculated margin as of October 31, 2011. The rates presented are not intended to project our expectations for the future.	
 
(2)	The average pay rate is based upon the fixed rates we were scheduled to pay as of October 31, 2011. The rates presented are not intended to project our expectations for the future.	
 
(3)	The average receive rate is based upon the LIBOR we were scheduled to receive as of October 31, 2011. The rates presented are not intended to project our expectations for the future.	
 
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Financial Instruments
As of October 31, 2010
(Dollars in millions)

 	  	Expected Maturity Date	 	 	 	 	 	 	 	
   	  	2011	 	 	2012	 	 	2013	 	 	2014	 	 	2015	 	 	After
2015	 	 	Total	 	 	Fair
Value	 	
2010 Credit Agreement:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	$	13	  	 	$	13	  	 	$	25	  	 	$	25	  	 	$	198	  	 	 	—	  	 	$	274	  	 	$	273.7	  	
									
Average interest rate(1)	  	 	3.67	% 	 	 	3.67	% 	 	 	3.67	% 	 	 	3.67	% 	 	 	3.67	% 	 	 	—	  	 	 	3.67	% 	 				
									
Senior Notes due 2017:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	300	  	 	$	300	  	 	$	322.9	  	
									
Average interest rate	  	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 	 	6.75	% 	 				
									
Senior Notes due 2019:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	250	  	 	$	250	  	 	$	278.8	  	
									
Average interest rate	  	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 	 	7.75	% 	 				
									
Trade accounts receivable credit facility:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	 	—	  	 	 	—	  	 	 	—	  	 	$	135	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	
									
Interest rate swaps:	  				 				 				 				 				 				 				 				
									
Scheduled amortizations	  	$	50	  	 	$	75	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	$	125	  	 	$	(2.0	) 	
									
Average pay rate(2)	  	 	1.78	% 	 	 	1.78	% 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	1.78	% 	 				
									
Average receive rate(3)	  	 	0.26	% 	 	 	0.26	% 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	—	  	 	 	0.26	% 	 				

(1)	Variable rate specified is based on LIBOR or an alternative base rate plus a calculated margin as of October 31, 2010. The rates presented are not intended to project our expectations for the future.	
 
(2)	The average pay rate is based upon the fixed rates we were scheduled to pay as of October 31, 2010. The rates presented are not intended to project our expectations for the future.	
 
(3)	The average receive rate is based upon the LIBOR we were scheduled to receive as of October 31, 2010. The rates presented are not intended to project our expectations for the future.	
The fair market value of the interest rate swaps as of October 31, 2011 was a net liability of $0.3 million. Based on a sensitivity analysis we performed as of October 31, 2011, a 100 basis point decrease in interest rates would increase the fair value of the swap agreements by $0.2 million to a net liability of $0.1 million. Conversely, a 100 basis point increase in interest rates would decrease the fair value of the swap agreements by $0.1 million to a net loss of $0.4 million.
Currency Risk
As a result of our international operations, our operating results are subject to fluctuations in currency exchange rates. The geographic presence of our operations mitigates this exposure to some degree. Additionally, our transaction exposure is somewhat limited because we produce and sell a majority of our products within each country in which we operate.
As of October 31, 2011, we had outstanding foreign currency forward contracts in the notional amount of $159.6 million ($252.9 million as of October 31, 2010). The purpose of these contracts is to hedge our exposure to foreign currency transactions and short-term intercompany loan balances in our international businesses. The fair value of these contracts as of October 31, 2011 resulted in a loss of $1.6 million recorded in the consolidated statements of operations and a gain of $0.7 million recorded in other comprehensive income. The fair value of similar contracts as of October 31, 2010 resulted in a gain of $0.8 million recorded in consolidated statements of operations and a loss of $2.3 million recorded in other comprehensive income.
 
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A sensitivity analysis to changes in the foreign currencies hedged indicates that if the U.S. dollar strengthened by 10 percent, the fair value of these instruments would increase by $0.5 million to a net loss of $0.4 million. Conversely, if the U.S. dollar weakened by 10 percent, the fair value of these instruments would decrease by $0.4 million to a net loss of $1.3 million.
Commodity Price Risk
We purchase commodities such as steel, resin, containerboard, pulpwood and energy. We do not currently engage in material hedging of commodities, other than hedges in natural gas, because there has historically been a high correlation between the commodity cost and the ultimate selling price of our products. The fair value of our commodity hedging contracts resulted in a $0.1 million loss recorded in other comprehensive income as of October 31, 2011. A sensitivity analysis to changes in natural gas prices indicates that if natural gas prices decreased by 10 percent, the fair value of these instruments would decrease by $0.3 million to a net loss of $0.4 million. Conversely, if natural gas prices increased by 10 percent, the fair value of these instruments would increase by $0.2 million to a net gain of $0.1 million.
 
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 ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	
GREIF, INC. AND SUBSIDIARY COMPANIES
 CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)

For the years ended October 31,	  	2011	 	 	2010	 	 	2009	 	
Net sales	  	$	4,247,954	  	 	$	3,461,537	  	 	$	2,792,217	  	
				
Costs of products sold	  	 	3,446,829	  	 	 	2,757,875	  	 	 	2,292,573	  	

Gross profit	  	 	801,125	  	 	 	703,662	  	 	 	499,644	  	
				
Selling, general and administrative expenses	  	 	448,399	  	 	 	362,935	  	 	 	267,589	  	
				
Restructuring charges	  	 	30,496	  	 	 	26,746	  	 	 	66,590	  	
				
(Gain) on disposal of properties, plants and equipment, net	  	 	(14,855	) 	 	 	(11,434	) 	 	 	(34,432	) 	

Operating profit	  	 	337,085	  	 	 	325,415	  	 	 	199,897	  	
				
Interest expense, net	  	 	79,552	  	 	 	65,787	  	 	 	53,593	  	
				
Debt extinguishment charge	  	 	—	  	 	 	—	  	 	 	782	  	
				
Other expense, net	  	 	14,120	  	 	 	7,139	  	 	 	7,193	  	

Income before income tax expense and equity earnings (losses) of unconsolidated affiliates, net	  	 	243,413	  	 	 	252,489	  	 	 	138,329	  	
				
Income tax expense	  	 	71,077	  	 	 	40,571	  	 	 	24,061	  	
				
Equity earnings (losses) of unconsolidated affiliates, net of tax	  	 	4,838	  	 	 	3,539	  	 	 	(436	) 	

Net income	  	 	177,174	  	 	 	215,457	  	 	 	113,832	  	
				
Net income attributable to noncontrolling interests	  	 	(1,134	) 	 	 	(5,472	) 	 	 	(3,186	) 	

Net income attributable to Greif, Inc.	  	$	176,040	  	 	$	209,985	  	 	$	110,646	  	

Basic earnings per share:	  				 				 				
				
Class A Common Stock	  	$	3.02	  	 	$	3.60	  	 	$	1.91	  	
				
Class B Common Stock	  	$	4.52	  	 	$	5.40	  	 	$	2.86	  	
				
Diluted earnings per share:	  				 				 				
				
Class A Common Stock	  	$	3.01	  	 	$	3.58	  	 	$	1.91	  	
				
Class B Common Stock	  	$	4.52	  	 	$	5.40	  	 	$	2.86	  	
Refer to the accompanying Notes to Consolidated Financial Statements.
 
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GREIF, INC. AND SUBSIDIARY COMPANIES
 CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

As of October 31,	  	2011	 	 	2010	 	
 	  	 	 	 	(As Restated) 1	 	
ASSETS	  				 				
			
Current assets	  				 				
			
Cash and cash equivalents	  	$	127,413	  	 	$	106,957	  	
			
Trade accounts receivable, less allowance of $13,754 in 2011 and $13,311 in 2010	  	 	568,624	  	 	 	480,158	  	
			
Inventories	  	 	432,518	  	 	 	396,572	  	
			
Deferred tax assets	  	 	23,654	  	 	 	19,526	  	
			
Net assets held for sale	  	 	11,381	  	 	 	11,742	  	
			
Current portion related party notes receivable	  	 	1,714	  	 	 	—	  	
			
Prepaid expenses and other current assets	  	 	140,033	  	 	 	134,269	  	

	  	 	1,305,337	  	 	 	1,149,224	  	
	  	 	 	 	
Long-term assets	  				 				
			
Goodwill	  	 	1,004,875	  	 	 	709,725	  	
			
Other intangible assets, net of amortization	  	 	229,790	  	 	 	173,239	  	
			
Deferred tax assets	  	 	70,630	  	 	 	29,982	  	
			
Related party notes receivable	  	 	18,310	  	 	 	—	  	
			
Assets held by special purpose entities	  	 	50,891	  	 	 	50,891	  	
			
Other long-term assets	  	 	92,160	  	 	 	93,603	  	

	  	 	1,466,656	  	 	 	1,057,440	  	
	  	 	 	 	
Properties, plants and equipment	  				 				
			
Timber properties, net of depletion	  	 	216,026	  	 	 	215,537	  	
			
Land	  	 	123,131	  	 	 	121,409	  	
			
Buildings	  	 	480,399	  	 	 	411,437	  	
			
Machinery and equipment	  	 	1,388,941	  	 	 	1,319,262	  	
			
Capital projects in progress	  	 	139,963	  	 	 	112,300	  	

	  	 	2,348,460	  	 	 	2,179,945	  	
			
Accumulated depreciation	  	 	(913,171	) 	 	 	(888,164	) 	

	  	 	1,435,289	  	 	 	1,291,781	  	

Total assets	  	$	4,207,282	  	 	$	3,498,445	  	

 
 
(1)	The consolidated balance sheet as of October 31, 2010 and the consolidated statements of changes in shareholders’ equity as of October 31, 2009 and 2010 have been restated to correct prior period errors. The corrections did not impact total assets, consolidated net income, or cash flows of the Company. Refer to Note 19 for additional discussion.	
Refer to the accompanying Notes to Consolidated Financial Statements.
 
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GREIF, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

As of October 31,	  	2011	 	 	2010	 	
 	  	 	 	 	(As Restated) 1	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	  				 				
			
Current liabilities	  				 				
			
Accounts payable	  	$	487,783	  	 	$	467,857	  	
			
Accrued payroll and employee benefits	  	 	99,794	  	 	 	90,887	  	
			
Restructuring reserves	  	 	19,607	  	 	 	20,238	  	
			
Current portion of long-term debt	  	 	12,500	  	 	 	12,523	  	
			
Short-term borrowings	  	 	137,334	  	 	 	60,908	  	
			
Deferred tax liabilities	  	 	5,055	  	 	 	5,091	  	
			
Other current liabilities	  	 	167,695	  	 	 	123,854	  	

	  	 	929,768	  	 	 	781,358	  	
	  	 	 	 	
Long-term liabilities	  				 				
			
Long-term debt	  	 	1,345,138	  	 	 	953,066	  	
			
Deferred tax liabilities	  	 	196,696	  	 	 	180,486	  	
			
Pension liabilities	  	 	76,088	  	 	 	65,915	  	
			
Postretirement benefit obligations	  	 	20,909	  	 	 	21,555	  	
			
Liabilities held by special purpose entities	  	 	43,250	  	 	 	43,250	  	
			
Other long-term liabilities	  	 	203,260	  	 	 	116,930	  	

	  	 	1,885,341	  	 	 	1,381,202	  	
	  	 	 	 	
Shareholders’ equity	  				 				
			
Common stock, without par value	  	 	113,799	  	 	 	106,057	  	
			
Treasury stock, at cost	  	 	(131,997	) 	 	 	(117,394	) 	
			
Retained earnings	  	 	1,401,700	  	 	 	1,323,477	  	
			
Accumulated other comprehensive income (loss):	  				 				
			
- foreign currency translation	  	 	(46,354	) 	 	 	388	  	
			
- interest rate and other derivatives	  	 	(121	) 	 	 	(1,505	) 	
			
- minimum pension liabilities	  	 	(101,676	) 	 	 	(76,526	) 	

Total Greif, Inc. shareholders’ equity	  	 	1,235,351	  	 	 	1,234,497	  	

Noncontrolling interests	  	 	156,822	  	 	 	101,388	  	

Total shareholders’ equity	  	 	1,392,173	  	 	 	1,335,885	  	

Total liabilities and shareholders’ equity	  	$	4,207,282	  	 	$	3,498,445	  	

 
 
(1)	The consolidated balance sheet as of October 31, 2010 and the consolidated statements of changes in shareholders’ equity as of October 31, 2009 and 2010 have been restated to correct prior period errors. The corrections did not impact total assets, consolidated net income, or cash flows of the Company. Refer to Note 19 for additional discussion.	
Refer to the accompanying Notes to Consolidated Financial Statements.
 
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GREIF, INC. AND SUBSIDIARY COMPANIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)

For the years ended October 31,	  	2011	 	 	2010	 	 	2009	 	
Cash flows from operating activities:	  				 				 				
Net income	  	$	177,174	  	 	$	215,457	  	 	$	113,832	  	
Adjustments to reconcile net income to net cash provided by operating activities:	  				 				 				
Depreciation, depletion and amortization	  	 	144,191	  	 	 	115,974	  	 	 	102,627	  	
Asset impairments	  	 	8,983	  	 	 	2,917	  	 	 	19,516	  	
Deferred income taxes	  	 	12,342	  	 	 	4,596	  	 	 	(13,167	) 	
Gain on disposals of properties, plants and equipment, net	  	 	(14,855	) 	 	 	(11,434	) 	 	 	(34,432	) 	
Equity (earnings) losses of affiliates	  	 	(4,838	) 	 	 	(3,539	) 	 	 	436	  	
Loss on extinguishment of debt	  	 	—	  	 	 	—	  	 	 	782	  	
Increase (decrease) in cash from changes in certain assets and liabilities:	  				 				 				
Trade accounts receivable	  	 	(22,591	) 	 	 	(54,046	) 	 	 	73,358	  	
Inventories	  	 	15,405	  	 	 	(87,832	) 	 	 	109,146	  	
Prepaid expenses and other current assets	  	 	(25,375	) 	 	 	(42,557	) 	 	 	(151	) 	
Accounts payable	  	 	(33,360	) 	 	 	4,134	  	 	 	(72,902	) 	
Accrued payroll and employee benefits	  	 	8,194	  	 	 	18,868	  	 	 	(20,511	) 	
Restructuring reserves	  	 	(631	) 	 	 	4,923	  	 	 	168	  	
Other current liabilities	  	 	18,576	  	 	 	(38,040	) 	 	 	(50,117	) 	
Pension and postretirement benefit liabilities	  	 	9,527	  	 	 	(15,868	) 	 	 	63,744	  	
Other long-term assets, other long-term liabilities and other	  	 	(120,402	) 	 	 	64,558	  	 	 	(25,805	) 	
	  	 	 	 	
Net cash provided by operating activities	  	 	172,340	  	 	 	178,111	  	 	 	266,524	  	
	  	 	 	 	
Cash flows from investing activities:	  				 				 				
Acquisitions of companies, net of cash acquired	  	 	(344,914	) 	 	 	(179,459	) 	 	 	(90,816	) 	
Purchases of properties, plants and equipment	  	 	(162,409	) 	 	 	(144,137	) 	 	 	(124,671	) 	
Purchases of timber properties	  	 	(3,462	) 	 	 	(20,996	) 	 	 	(1,000	) 	
Proceeds from the sale of properties, plants, equipment and other assets	  	 	31,013	  	 	 	17,325	  	 	 	50,279	  	
Issuance of notes receivable to related party, net	  	 	(20,024	) 	 	 	—	  	 	 	—	  	
Purchases of land rights	  	 	(650	) 	 	 	—	  	 	 	(4,992	) 	
	  	 	 	 	
Net cash used in investing activities	  	 	(500,446	) 	 	 	(327,267	) 	 	 	(171,200	) 	
	  	 	 	 	
Cash flows from financing activities:	  				 				 				
Proceeds from issuance of long-term debt	  	 	3,859,401	  	 	 	3,731,683	  	 	 	3,170,212	  	
Payments on long-term debt	  	 	(3,465,834	) 	 	 	(3,637,945	) 	 	 	(2,983,534	) 	
Proceeds from (payments of) short-term borrowings, net	  	 	74,308	  	 	 	3,878	  	 	 	(25,749	) 	
Proceeds from (payments of) trade accounts receivable credit facility, net	  	 	(5,000	) 	 	 	135,000	  	 	 	(120,000	) 	
Dividends paid	  	 	(97,817	) 	 	 	(93,122	) 	 	 	(87,957	) 	
Acquisitions of treasury stock and other	  	 	(15,062	) 	 	 	(2,696	) 	 	 	(3,145	) 	
Exercise of stock options	  	 	2,540	  	 	 	2,002	  	 	 	2,015	  	
Debt issuance costs paid	  	 	(4,394	) 	 	 	(10,902	) 	 	 	(13,588	) 	
Settlement of derivatives, net	  	 	—	  	 	 	17,985	  	 	 	(3,574	) 	
	  	 	 	 	
Net cash provided by (used in) financing activities	  	 	348,142	  	 	 	145,883	  	 	 	(65,320	) 	
	  	 	 	 	
Effects of exchange rates on cash	  	 	420	  	 	 	(1,666	) 	 	 	4,265	  	
	  	 	 	 	
Net increase (decrease) in cash and cash equivalents	  	 	20,456	  	 	 	(4,939	) 	 	 	34,269	  	
	  	 	 	 	
Cash and cash equivalents at beginning of year	  	 	106,957	  	 	 	111,896	  	 	 	77,627	  	
	  	 	 	 	
Cash and cash equivalents at end of year	  	$	127,413	  	 	$	106,957	  	 	$	111,896	  	
	  	 	 	 	
Refer to the accompanying Notes to Consolidated Financial Statements.
 
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GREIF, INC. AND SUBSIDIARY COMPANIES
C  ONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Amounts in thousands, except per share amounts)

 	 	Capital Stock	 	 	Treasury Stock	 	 	Retained
Earnings	 	 	Non-
controlling
interests	 	 	Accumulated
Other
Comprehensive
Income (Loss)	 	 	Shareholders’
Equity	 	
   	 	Shares	 	 	Amount	 	 	Shares	 	 	Amount	 	 			 			 			 			
As of October 31, 2008 (As Previously Reported) 	 	 	46,644	  	 	$	86,446	  	 	 	30,198	  	 	$	(112,931	) 	 	$	1,183,925	  	 	$	3,729	  	 	$	(72,820	) 	 	$	1,088,349	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Correction of an error	 				 				 				 				 				 				 	$	(19,547	) 	 	$	(19,547	) 	
As of October 31, 2008 (As Restated) 1 	 	 	46,644	  	 	$	86,446	  	 	 	30,198	  	 	$	(112,931	) 	 	$	1,183,925	  	 	$	3,729	  	 	$	(92,367	) 	 	$	1,068,802	  	
Net income	 				 				 				 				 	 	110,646	  	 	 	3,186	  	 				 	 	113,832	  	
Other comprehensive income (loss):	 				 				 				 				 				 				 				 				
- foreign currency translation	 				 				 				 				 				 				 	 	32,868	  	 	 	32,868	  	
- interest rate and other derivatives, net of income tax expense of $1,707	 				 				 				 				 				 				 	 	4,226	  	 	 	4,226	  	
- minimum pension liability adjustment, net of income tax benefit of $28,580	 				 				 				 				 				 				 	 	(51,092	) 	 	 	(51,092	) 	
	 				 				 				 				 				 				 				 	 	 	 	
Comprehensive income	 				 				 				 				 				 				 				 	 	99,834	  	
	 				 				 				 				 				 				 				 	 	 	 	
Change in pension measurement date, net of income tax benefit of $590	 				 				 				 				 				 				 	 	(1,428	) 	 	 	(1,428	) 	
Acquisitions of noncontrolling interests and other	 				 				 				 				 				 	 	82	  	 				 	 	82	  	
Dividends paid	 				 				 				 				 	 	(87,957	) 	 				 				 	 	(87,957	) 	
Treasury shares acquired	 	 	(100	) 	 				 	 	100	  	 	 	(3,145	) 	 				 				 				 	 	(3,145	) 	
Stock options exercised	 	 	133	  	 	 	1,749	  	 	 	(133	) 	 	 	266	  	 				 				 				 	 	2,015	  	
Tax benefit of stock options	 				 	 	575	  	 				 				 				 				 				 	 	575	  	
Long-term incentive shares issued	 	 	260	  	 	 	7,734	  	 	 	(260	) 	 	 	533	  	 				 				 				 	 	8,267	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of October 31, 2009 (As Restated) 1 	 	 	46,937	  	 	$	96,504	  	 	 	29,905	  	 	$	(115,277	) 	 	$	1,206,614	  	 	$	6,997	  	 	$	(107,793	) 	 	$	1,087,045	  	
Net income	 				 				 				 				 	 	209,985	  	 	 	5,472	  	 				 	 	215,457	  	
Other comprehensive income (loss):	 				 				 				 				 				 				 				 				
- foreign currency translation	 				 				 				 				 				 				 	 	26,760	  	 	 	26,760	  	
- interest rate and other derivatives, net of income tax expense of $149	 				 				 				 				 				 				 	 	370	  	 	 	370	  	
- minimum pension liability adjustment, net of income tax benefit of $1,279	 				 				 				 				 				 				 	 	3,020	  	 	 	3,020	  	
	 				 				 				 				 				 				 				 	 	 	 	
Comprehensive income	 				 				 				 				 				 				 				 	 	245,607	  	
	 				 				 				 				 				 				 				 	 	 	 	
Acquisitions and noncontrolling interests and other	 				 				 				 				 				 	 	88,919	  	 				 	 	88,919	  	
Dividends paid	 				 				 				 				 	 	(93,122	) 	 				 				 	 	(93,122	) 	
Treasury shares acquired	 	 	(50	) 	 				 	 	50	  	 	 	(2,696	) 	 				 				 				 	 	(2,696	) 	
Stock options exercised	 	 	133	  	 	 	1,729	  	 	 	(133	) 	 	 	273	  	 				 				 				 	 	2,002	  	
Tax benefit of stock options	 				 	 	17	  	 				 				 				 				 				 	 	17	  	
Long-term incentive shares issued	 	 	149	  	 	 	7,807	  	 	 	(149	) 	 	 	306	  	 				 				 				 	 	8,113	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of October 31, 2010 (As Restated) 1 	 	 	47,169	  	 	$	106,057	  	 	 	29,673	  	 	$	(117,394	) 	 	$	1,323,477	  	 	$	101,388	  	 	$	(77,643	) 	 	$	1,335,885	  	
Net income	 				 				 				 				 	 	176,040	  	 	 	1,134	  	 				 	 	177,174	  	
Other comprehensive income (loss):	 				 				 				 				 				 				 				 				
- foreign currency translation	 				 				 				 				 				 	 	14,572	  	 	 	(46,742	) 	 	 	(32,170	) 	
- interest rate and other derivatives, net of income tax benefit of $562	 				 				 				 				 				 				 	 	1,384	  	 	 	1,384	  	
- minimum pension liability adjustment, net of income tax expense of $9,652	 				 				 				 				 				 				 	 	(25,150	) 	 	 	(25,150	) 	
	 				 				 				 				 				 				 				 	 	 	 	
Comprehensive income	 				 				 				 				 				 				 				 	 	121,238	  	
	 				 				 				 				 				 				 				 	 	 	 	
Acquisitions and noncontrolling interests	 				 				 				 				 				 	 	39,728	  	 				 	 	39,728	  	
Dividends paid	 				 				 				 				 	 	(97,817	) 	 				 				 	 	(97,817	) 	
Treasury shares acquired	 	 	(300	) 	 				 	 	300	  	 	 	(15,062	) 	 				 				 				 	 	(15,062	) 	
Stock options exercised	 	 	168	  	 	 	2,196	  	 	 	(168	) 	 	 	344	  	 				 				 				 	 	2,540	  	
Restricted stock directors	 	 	11	  	 	 	697	  	 	 	(11	) 	 	 	22	  	 				 				 				 	 	719	  	
Restricted stock executives	 	 	5	  	 	 	308	  	 	 	(5	) 	 	 	10	  	 				 				 				 	 	318	  	
Tax benefit of stock options and other	 				 	 	2,192	  	 				 				 				 				 				 	 	2,192	  	
Long-term incentive shares issued	 	 	40	  	 	 	2,349	  	 	 	(40	) 	 	 	83	  	 				 				 				 	 	2,432	  	
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of October 31, 2011 	 	 	47,093	  	 	$	113,799	  	 	 	29,749	  	 	$	(131,997	) 	 	$	1,401,700	  	 	$	156,822	  	 	$	(148,151	) 	 	$	1,392,173	  	

 
 
(1)  	The consolidated balance sheet as of October 31, 2010 and the consolidated statements of changes in shareholders’ equity as of October 31, 2009 and 2010 have been restated to correct prior period errors. The corrections did not impact total assets, consolidated net income, or cash flows of the Company. Refer to Note 19 for additional discussion.	
Refer to the accompanying Notes to Consolidated Financial Statements.
 
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GREIF, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Business
Greif, Inc. and its subsidiaries (collectively, “Greif,” “our,” or the “Company”) principally manufacture industrial packaging products, complemented with a variety of value-added services, including blending, packaging, reconditioning, logistics and warehousing, flexible intermediate bulk containers and containerboard and corrugated products, that they sell to customers in many industries throughout the world. The Company has operations in over 55 countries. In addition, the Company owns timber properties in the southeastern United States, which are actively harvested and regenerated, and also owns timber properties in Canada.
Due to the variety of its products, the Company has many customers buying different products and, due to the scope of the Company’s sales, no one customer is considered principal in the total operations of the Company.
Because the Company supplies a cross section of industries, such as chemicals, food products, petroleum products, pharmaceuticals and metal products, and must make spot deliveries on a day-to-day basis as its products are required by its customers, the Company does not operate on a backlog to any significant extent and maintains only limited levels of finished goods. Many customers place their orders weekly for delivery during the same week.
The Company’s raw materials are principally steel, resin, containerboard, old corrugated containers for recycling and pulpwood.
There are approximately 15,660 employees of the Company as of October 31, 2011.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Greif, Inc., all wholly-owned and majority-owned subsidiaries, joint ventures managed by the Company including the joint venture relating to the Flexible Products & Services segment and equity earnings (losses) of unconsolidated affiliates. All intercompany transactions and balances have been eliminated in consolidation. Investments in unconsolidated affiliates are accounted for using the equity method.
The Company’s consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Certain prior year and prior quarter amounts have been reclassified to conform to the current year presentation.
The Company’s fiscal year begins on November 1 and ends on October 31 of the following year. Any references to the year 2011, 2010 or 2009, or to any quarter of those years, relates to the fiscal year ending in that year.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant estimates are related to the allowance for doubtful accounts, inventory reserves, expected useful lives assigned to properties, plants and equipment, goodwill and other intangible assets, restructuring reserves, environmental liabilities, pension and postretirement benefits, income taxes, derivatives, net assets held for sale, self-insurance reserves and contingencies. Actual amounts could differ from those estimates.
Cash and Cash Equivalents
The Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. The carrying value of cash equivalents approximates fair value.
 
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The Company had total cash and cash equivalents held outside of the United States in various foreign jurisdictions of $115.0 million as of October 31, 2011. Under current tax laws and regulations, if cash and cash equivalents held outside the United States are repatriated to the United States in the form of dividends or otherwise, we may be subject to additional U.S. income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes.
Allowance for Doubtful Accounts
Trade receivables represent amounts owed to the Company through its operating activities and are presented net of allowance for doubtful accounts. The allowance for doubtful accounts totaled $13.8 million and $13.3 million as of October 31, 2011 and 2010, respectively. The Company evaluates the collectability of its accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company, the Company records a specific allowance for bad debts against amounts due to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. In addition, the Company recognizes allowances for bad debts based on the length of time receivables are past due with allowance percentages, based on its historical experiences, applied on a graduated scale relative to the age of the receivable amounts. If circumstances such as higher than expected bad debt experience or an unexpected material adverse change in a major customer’s ability to meet its financial obligations to the Company were to occur, the recoverability of amounts due to the Company could change by a material amount. Amounts deemed uncollectible are written-off against an established allowance for doubtful accounts.
Concentration of Credit Risk and Major Customers
The Company maintains cash depository accounts with major banks throughout the world and invests in high quality short-term liquid instruments. Such investments are made only in instruments issued or enhanced by high quality institutions. These investments mature within three months and the Company has not incurred any related losses.
Trade receivables can be potentially exposed to a concentration of credit risk with customers or in particular industries. Such credit risk is considered by management to be limited due to the Company’s many customers, none of which are considered principal in the total operations of the Company, and its geographic scope of operations in a variety of industries throughout the world. The Company does not have an individual customer that exceeds 10 percent of total revenue. In addition, the Company performs ongoing credit evaluations of its customers’ financial conditions and maintains reserves for credit losses. Such losses historically have been within management’s expectations.
Inventory Reserves
Reserves for slow moving and obsolete inventories are provided based on historical experience, inventory aging and product demand. The Company continuously evaluates the adequacy of these reserves and makes adjustments to these reserves as required. The Company also evaluates reserves for losses under firm purchase commitments for goods or inventories.
Net Assets Held for Sale
Net assets held for sale represent land, buildings and land improvements for locations that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment.” As of October 31, 2011, there were seven locations held for sale in the Rigid Industrial Packaging & Services segment. In 2011, the Company recorded net sales of $0.2 million and net loss before taxes of $14.9 million associated with these properties, primarily related to the Rigid Industrial Packaging & Services segment. For 2010, the Company recorded net sales of $91.2 million and net loss before taxes of $1.3 million associated with these properties, primarily related to the Rigid Industrial Packaging & Services segment. The effect of suspending depreciation on the facilities held for sale is immaterial to the results of operations. The properties classified within net assets held for sale have been listed for sale and it is the Company’s intention to complete these sales within the upcoming year.
Goodwill and Other Intangibles
Goodwill is the excess of the purchase price of an acquired entity over the amounts assigned to tangible and intangible assets and liabilities assumed in the business combination. The Company accounts for purchased goodwill and indefinite-
 
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lived intangible assets in accordance with ASC 350, “Intangibles – Goodwill and Other.” Under ASC 350, purchased goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment at least annually. Intangible assets with finite lives, primarily customer relationships, patents and trademarks, continue to be amortized over their useful lives on a straight-line basis. The Company tests for impairment during the fourth quarter of each fiscal year, or more frequently if certain indicators are present or changes in circumstances suggest that impairment may exist.
ASC 350 requires that testing for goodwill impairment be conducted at the reporting unit level using a two-step approach. The first step requires a comparison of the carrying value of the reporting units to the estimated fair value of these units. If the carrying value of a reporting unit exceeds its estimated fair value, the Company performs the second step of the goodwill impairment to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the estimated implied fair value of a reporting unit’s goodwill to its carrying value. The Company allocates the estimated fair value of a reporting unit to all of the assets and liabilities in that reporting unit, including intangible assets, as if the reporting unit had been acquired in a business combination. Any excess of the estimated fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.
The Company’s determination of estimated fair value of the reporting units is based on a discounted cash flow analysis utilizing earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”). The discount rates used for impairment testing are based on the Company’s weighted average cost of capital. The use of alternative estimates, peer groups or changes in the industry, or adjusting the discount rate, or EBITDA forecasts used could affect the estimated fair value of the reporting units and potentially result in goodwill impairment. Any identified impairment would result in an expense to the Company’s results of operations. The Company performed its annual impairment test in fiscal 2011, 2010 and 2009, which resulted in no impairment charges. Refer to Note 6 for additional information regarding goodwill and other intangible assets.
Acquisitions
From time to time, the Company acquires businesses and/or assets that augment and complement its operations, in accordance with ASC 805, “Business Combinations.” These acquisitions are accounted for under the purchase method of accounting. The consolidated financial statements include the results of operations from these business combinations as of the date of acquisition.
Beginning November 1, 2009, the Company classifies costs incurred in connection with acquisitions as acquisition-related costs. These costs consist primarily of transaction costs, integration costs and changes in the fair value of contingent payments (earn-outs). Acquisition transaction costs are incurred during the initial evaluation of a potential targeted acquisition and primarily relate to costs to analyze, negotiate and consummate the transaction as well as financial and legal due diligence activities. Post acquisition integration activities are costs incurred to combine the operations of an acquired enterprise into the Company’s operations.
Internal Use Software
Internal use software is accounted for under ASC 985, “Software.” Internal use software is software that is acquired, internally developed or modified solely to meet the Company’s needs and for which, during the software’s development or modification, a plan does not exist to market the software externally. Costs incurred to develop the software during the application development stage and for upgrades and enhancements that provide additional functionality are capitalized and then amortized over a three- to ten- year period.
 
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Properties, Plants and Equipment
Properties, plants and equipment are stated at cost. Depreciation on properties, plants and equipment is provided on the straight-line method over the estimated useful lives of the assets as follows:

   	  	Years	 	
Buildings	  	 	30-45	  	
		
Machinery and equipment	  	 	3-19	  	
Depreciation expense was $122.7 million, $98.5 million and $88.6 million, in 2011, 2010 and 2009, respectively. Expenditures for repairs and maintenance are charged to expense as incurred. When properties are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the asset and related allowance accounts. Gains or losses are credited or charged to income as incurred.
For 2011, the Company recorded a gain of $14.9 million, primarily consisting of $3.2 million gain on the sale of specific Rigid Industrial Packaging & Services segment assets, $0.9 million gain on the sale of a Paper Packaging segment property, $11.4 million in net gains from the sale of surplus and higher and better use (“HBU”) timber properties and other miscellaneous losses of $0.6 million. The Company also recognized an impairment loss on machinery in our Rigid Industrial Packaging and Services segment of $1.3 million as well as several smaller impairment charges of $0.2 million.
The Company capitalizes interest on long-term fixed asset projects using a rate that approximates the weighted average cost of borrowing. As of October 31, 2011 and 2010, the Company had capitalized interest costs of $3.8 million and $5.3 million, respectively.
The Company owns timber properties in the southeastern United States and in Canada. With respect to the Company’s United States timber properties, which consisted of approximately 267,750 acres as of October 31, 2011, depletion expense on timber properties is computed on the basis of cost and the estimated recoverable timber. Depletion expense was $2.7 million, $2.6 million and $2.9 million in 2011, 2010 and 2009, respectively. The Company’s land costs are maintained by tract. The Company begins recording pre-merchantable timber costs at the time the site is prepared for planting. Costs capitalized during the establishment period include site preparation by aerial spray, costs of seedlings, planting costs, herbaceous weed control, woody release, labor and machinery use, refrigeration rental and trucking for the seedlings. The Company does not capitalize interest costs in the process. Property taxes are expensed as incurred. New road construction costs are capitalized as land improvements and depreciated over 20 years. Road repairs and maintenance costs are expensed as incurred. Costs after establishment of the seedlings, including management costs, pre-commercial thinning costs and fertilization costs, are expensed as incurred. Once the timber becomes merchantable, the cost is transferred from the pre-merchantable timber category to the merchantable timber category in the depletion block.
Merchantable timber costs are maintained by five product classes, pine sawtimber, pine chip-n-saw, pine pulpwood, hardwood sawtimber and hardwood pulpwood, within a depletion block, with each depletion block based upon a geographic district or subdistrict. Currently, the Company has eight depletion blocks. These same depletion blocks are used for pre-merchantable timber costs. Each year, the Company estimates the volume of the Company’s merchantable timber for the five product classes by each depletion block. These estimates are based on the current state in the growth cycle and not on quantities to be available in future years. The Company’s estimates do not include costs to be incurred in the future. The Company then projects these volumes to the end of the year. Upon acquisition of a new timberland tract, the Company records separate amounts for land, merchantable timber and pre-merchantable timber allocated as a percentage of the values being purchased. These acquisition volumes and costs acquired during the year are added to the totals for each product class within the appropriate depletion block(s). The total of the beginning, one-year growth and acquisition volumes are divided by the total undepleted historical cost to arrive at a depletion rate, which is then used for the current year. As timber is sold, the Company multiplies the volumes sold by the depletion rate for the current year to arrive at the depletion cost.
The Company’s Canadian timber properties, which consisted of approximately 14,700 acres as of October 31, 2011, are not actively managed at this time, and therefore, no depletion expense is recorded.
 
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Equity Earnings (Losses) of Unconsolidated Affiliates, net of tax and Noncontrolling Interests including Variable Interest Entities
The Company accounts for equity earnings (losses) of unconsolidated affiliates, net of tax and noncontrolling interests under ASC 810, “Consolidation.” ASC 810 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. ASC 810 also changes the way the consolidated financial statements are presented, establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation, requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated and expands disclosures in the consolidated financial statements that clearly identify and distinguish between the parent’s ownership interest and the interest of the noncontrolling owners of a subsidiary. Refer to Note 16 for additional information regarding the Company’s unconsolidated affiliates and noncontrolling interests.
ASC 810 also provides a framework for identifying variable interest entities (“VIE’s”) and determining when a company should include the assets, liabilities, noncontrolling interests and results of operations of a VIE in its consolidated financial statements. In general, a VIE is a corporation, partnership, limited liability company, trust or any other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. ASC 810 requires a VIE to be consolidated if a party with an ownership, contractual or other financial interest in the VIE (a variable interest holder) is obligated to absorb a majority of the risk of loss from the VIE’s activities, is entitled to receive a majority of the VIE’s residual returns (if no party absorbs a majority of the VIE’s losses), or both. One of the companies acquired in 2011 is considered a VIE. However, because the Company is not the primary beneficiary, the Company will report its ownership interest in this acquired company using the equity method of accounting.
On September 29, 2010, Greif, Inc. and its indirect subsidiary Greif International Holding Supra C.V. (“Greif Supra”), a Netherlands limited partnership, completed a Joint Venture Agreement with Dabbagh Group Holding Company Limited (“Dabbagh”), a Saudi Arabia corporation and National Scientific Company Limited (“NSC”), a Saudi Arabia limited liability company and a subsidiary of Dabbagh, referred to herein as the Flexible Packaging JV. The joint venture owns the operations in the Flexible Products & Services segment, with the exception of the North American multi-wall bag business. Greif Supra and NSC have equal economic interests in the joint venture, notwithstanding the actual ownership interests in the various legal entities. All investments, loans and capital injections are shared 50 percent by Greif and the Dabbagh entities. Greif has deemed this joint venture to be a VIE based on the criteria outlined in ASC 810. Greif exercises management control over this joint venture and is the primary beneficiary due to supply agreements and broader packaging industry customer risks and rewards. Therefore, Greif has fully consolidated the operations of this joint venture as of the formation date of September 29, 2010 and has reported Dabbagh’s share in the profits and losses in this joint venture as from this date on the Company’s income statement under net income attributable to noncontrolling interests.
The Company has consolidated the assets and liabilities of STA Timber LLC (“STA Timber”) in accordance with ASC 810 which was involved in the transactions described in Note 8. Because STA Timber is a separate and distinct legal entity from Greif, Inc. and its other subsidiaries, the assets of STA Timber are not available to satisfy the liabilities and obligations of these entities and the liabilities of STA Timber are not liabilities or obligations of these entities. The Company has also consolidated the assets and liabilities of the buyer-sponsored purpose entity described in Note 8 (the “Buyer SPE”) involved in that transaction as a result of ASC 810. However, because the Buyer SPE is a separate and distinct legal entity from Greif, Inc. and its other subsidiaries, the assets of the Buyer SPE are not available to satisfy the liabilities and obligations of the Company, and the liabilities of the Buyer SPE are not liabilities or obligations of the Company.
Contingencies
Various lawsuits, claims and proceedings have been or may be instituted or asserted against the Company, including those pertaining to environmental, product liability, and safety and health matters. While the amounts claimed may be substantial, the ultimate liability cannot currently be determined because of the considerable uncertainties that exist.
 
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All lawsuits, claims and proceedings are considered by the Company in establishing reserves for contingencies in accordance with ASC 450, “Contingencies.” In accordance with the provisions of ASC 450, the Company accrues for a litigation-related liability when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on currently available information known to the Company, the Company believes that its reserves for these litigation-related liabilities are reasonable and that the ultimate outcome of any pending matters is not likely to have a material adverse effect on the Company’s financial position or results of operations.
Environmental Cleanup Costs
The Company accounts for environmental clean up costs in accordance with ASC 450. The Company expenses environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernable. Expenditures that extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. The Company determines its liability on a site-by-site basis and records a liability at the time when it is probable and can be reasonably estimated. The Company’s estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs.
Self-Insurance
The Company is self-insured for certain of the claims made under its employee medical and dental insurance programs. The Company had recorded liabilities totaling $2.9 million and $2.6 million for estimated costs related to outstanding claims as of October 31, 2011 and 2010, respectively. These costs include an estimate for expected settlements on pending claims, administrative fees and an estimate for claims incurred but not reported. These estimates are based on management’s assessment of outstanding claims, historical analyses and current payment trends. The Company recorded an estimate for the claims incurred but not reported using an estimated lag period based upon historical information. This lag period assumption has been consistently applied for the periods presented. If the lag period was hypothetically adjusted by a period equal to a half month, the impact on earnings would be approximately $0.7 million. However, the Company believes the reserves recorded are adequate based upon current facts and circumstances.
The Company has certain deductibles applied to various insurance policies including general liability, product, auto and workers’ compensation. Deductible liabilities are insured through the Company’s captive insurance subsidiary, which had recorded liabilities totaling $15.3 million and $15.6 million for anticipated costs related to general liability, product, auto and workers’ compensation as of October 31, 2011 and 2010, respectively. These costs include an estimate for expected settlements on pending claims, defense costs and an estimate for claims incurred but not reported. These estimates are based on the Company’s assessment of outstanding claims, historical analysis, actuarial information and current payment trends.
Income Taxes
Income taxes are accounted for under ASC 740, “Income Taxes.” In accordance with ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as measured by enacted tax rates that are expected to be in effect in the periods when the deferred tax assets and liabilities are expected to be settled or realized. Valuation allowances are established where expected future taxable income does not support the realization of the deferred tax assets.
The Company’s effective tax rate is based on income, statutory tax rates and tax planning opportunities available to the Company in the various jurisdictions in which the Company operates. Significant judgment is required in determining the Company’s effective tax rate and in evaluating its tax positions.
Tax benefits from uncertain tax position are recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. The amount recognized is measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized
 
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upon settlement. The Company’s effective tax rate includes the impact of reserve provisions and changes to reserves that it considers appropriate as well as related interest and penalties.
A number of years may elapse before a particular matter, for which the Company has established a reserve, is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, the Company believes that its reserves reflect the probable outcome of known tax contingencies. Unfavorable settlement of any particular issue would require use of the Company’s cash. Favorable resolution would be recognized as a reduction to the Company’s effective tax rate in the period of resolution.
Restructuring Charges
The Company accounts for all exit or disposal activities in accordance with ASC 420, “Exit or Disposal Cost Obligations.” Under ASC 420, a liability is measured at its fair value and recognized as incurred.
Employee-related costs primarily consist of one-time termination benefits provided to employees who have been involuntarily terminated and duplicate payroll costs during transition periods. A one-time benefit arrangement is an arrangement established by a plan of termination that applies for a specified termination event or for a specified future period. A one-time benefit arrangement exists at the date the plan of termination meets all of the following criteria and has been communicated to employees:
(1) Management, having the authority to approve the action, commits to a plan of termination.
(2) The plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date.
(3) The plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination (including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated.
(4) Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
Facility exit and other costs consist of accelerated depreciation, equipment relocation costs, project consulting fees and costs associated with restructuring the Company’s delivery of information technology infrastructure services. A liability for other costs associated with an exit or disposal activity shall be recognized and measured at its fair value in the period in which the liability is incurred (generally, when goods or services associated with the activity are received). The liability shall not be recognized before it is incurred, even if the costs are incremental to other operating costs and will be incurred as a direct result of a plan.
Pension and Postretirement Benefits
Under ASC 715, “Compensation—Retirement Benefits,” employers recognize the funded status of their defined benefit pension and other postretirement plans on the consolidated balance sheet and record as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that have not been recognized as components of the net periodic benefit cost.
Transfer and Service of Assets
An indirect wholly-owned subsidiary of Greif, Inc. agrees to sell trade receivables meeting certain eligibility requirements that it had purchased from other indirect wholly-owned subsidiaries of Greif, Inc., under a non-U.S. factoring agreement. The structure of the transactions provide for a legal true sale, on a revolving basis, of the receivables transferred from the various Greif, Inc. subsidiaries to the respective banks or their affiliates. The banks and their affiliates fund an initial purchase price of a certain percentage of eligible receivables based on a formula with the initial purchase price
 
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approximating 75 percent to 90 percent of eligible receivables. The remaining deferred purchase price is settled upon collection of the receivables. At the balance sheet reporting dates, the Company removes from accounts receivable the amount of proceeds received from the initial purchase price since they meet the applicable criteria of ASC 860, “Transfers and Servicing,” and continues to recognize the deferred purchase price in its accounts receivable. The receivables are sold on a non-recourse basis with the total funds in the servicing collection accounts pledged to the banks between settlement dates.
Stock-Based Compensation Expense
The Company recognizes stock-based compensation expense in accordance with ASC 718, “Compensation—Stock Compensation.” ASC 718 requires the measurement and recognition of compensation expense, based on estimated fair values, for all share-based awards made to employees and directors, including stock options, restricted stock, restricted stock units and participation in the Company’s employee stock purchase plan.
ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense in the Company’s consolidated statements of income over the requisite service periods. No options were granted in 2011, 2010, or 2009. For any options granted in the future, compensation expense will be based on the grant date fair value estimated in accordance with the standard. During 2011 an officer of the Company received a restricted stock award as part of the terms of his initial employment arrangement. There was no share-based compensation expense recognized under the standard for 2010 or 2009.
The Company uses the straight-line single option method of expensing stock options to recognize compensation expense in its consolidated statements of income for all share-based awards. Because share-based compensation expense is based on awards that are ultimately expected to vest, share-based compensation expense will be reduced to account for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Revenue Recognition
The Company recognizes revenue when title passes to customers or services have been rendered, with appropriate provision for returns and allowances. Revenue is recognized in accordance with ASC 605, “Revenue Recognition.”
Timberland disposals, timber and special use property revenues are recognized when closings have occurred, required down payments have been received, title and possession have been transferred to the buyer, and all other criteria for sale and profit recognition have been satisfied.
The Company reports the sale of surplus and HBU property in our consolidated statements of income under “gain on disposals of properties, plants and equipment, net” and reports the sale of development property under “net sales” and “cost of products sold.” All HBU and development property, together with surplus property, is used by the Company to productively grow and sell timber until the property is sold.
Shipping and Handling Fees and Costs
The Company includes shipping and handling fees and costs in cost of products sold.
Other Expense, Net
Other expense, net primarily represents non-United States trade receivables program fees, currency translation and remeasurement gains and losses and other infrequent non-operating items.
Currency Translation
In accordance with ASC 830, “Foreign Currency Matters,” the assets and liabilities denominated in a foreign currency are translated into United States dollars at the rate of exchange existing at year-end, and revenues and expenses are translated at average exchange rates.
 
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The cumulative translation adjustments, which represent the effects of translating assets and liabilities of the Company’s international operations, are presented in the consolidated statements of changes in shareholders’ equity in accumulated other comprehensive income (loss). The transaction gains and losses are credited or charged to income. The amounts included in other expense, net related to transaction gains and (losses), net of tax were ($4.7) million, $0.1 million and ($0.1) million in 2011, 2010 and 2009, respectively.
Derivative Financial Instruments
In accordance with ASC 815, “Derivatives and Hedging,” the Company records all derivatives in the consolidated balance sheet as either assets or liabilities measured at fair value. Dependent on the designation of the derivative instrument, changes in fair value are recorded to earnings or shareholders’ equity through other comprehensive income (loss).
The Company uses interest rate swap agreements for cash flow hedging purposes. For derivative instruments that hedge the exposure of variability in interest rates, designated as cash flow hedges, the effective portion of the net gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.
Interest rate swap agreements that hedge against variability in interest rates effectively convert a portion of floating rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. The Company uses the “variable cash flow method” for assessing the effectiveness of these swaps. The effectiveness of these swaps is reviewed at least every quarter. Hedge ineffectiveness has not been material during any of the years presented herein.
The Company enters into currency forward contracts to hedge certain currency transactions and short-term intercompany loan balances with its international businesses. Such contracts limit the Company’s exposure to both favorable and unfavorable currency fluctuations. These contracts are adjusted to reflect market value as of each balance sheet date, with the resulting changes in fair value being recognized in other comprehensive income (loss).
The Company uses derivative instruments to hedge a portion of its natural gas. These derivatives are designated as cash flow hedges. The effective portion of the net gain or loss is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings.
Any derivative contract that is either not designated as a hedge, or is so designated but is ineffective, is adjusted to market value and recognized in earnings immediately. If a cash flow or fair value hedge ceases to qualify for hedge accounting, the contract would continue to be carried on the balance sheet at fair value until settled and future adjustments to the contract’s fair value would be recognized in earnings immediately. If a forecasted transaction were no longer probable to occur, amounts previously deferred in accumulated other comprehensive income (loss) would be recognized immediately in earnings.
Fair Value
The Company uses ASC 820, “Fair Value Measurements and Disclosures” to account for fair value. ASC 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Additionally, this standard established a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.
The three levels of inputs used to measure fair values are as follows:
 
 	•	 	Level 1—Observable inputs such as unadjusted quoted prices in active markets for identical assets and liabilities.	
 
 	•	 	Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities. For derivative instruments, the Company uses interest rates, LIBOR curves, commodity rates, and foreign currency futures when assessing fair value.	
 
 	•	 	Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.	
 
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Newly Adopted Accounting Standards
In June 2009, the Financial Accounting Standards Board (“FASB”) amended ASC 860, “Transfers and Servicing.” The amendment to ASC 860 requires an enterprise to evaluate whether the transaction is legally isolated from the Company and whether the results of the transaction are consolidated within the consolidated financial statements. The Company adopted the new guidance beginning November 1, 2010, and the adoption of the new guidance did not impact the Company’s financial position, results of operations or cash flows, other than the related disclosures.
In June 2009, the FASB amended ASC 810, “Consolidation.” The amendment to ASC 810 changed the methodology for determining the primary beneficiary of a variable interest entity (“VIE”) from a quantitative risk and rewards based model to a qualitative determination. It also requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE. Accordingly, the Company reevaluated its previous ASC 810 conclusions, including (1) whether an entity is a VIE, (2) whether the enterprise is the VIE’s primary beneficiary, and (3) what type of financial statement disclosures are required. The Company adopted the new guidance beginning November 1, 2010, and the adoption of the new guidance did not impact the Company’s financial position, results of operations or cash flows, other than the related disclosures.
Recently Issued Accounting Standards
Effective July 1, 2009, changes to the ASC are communicated through an Accounting Standards Update (“ASU”). As of October 31, 2011, the FASB has issued ASU’s 2009-01 through 2011-09. The Company reviewed each ASU and determined that they will not have a material impact on the Company’s financial position, results of operations or cash flows, other than related disclosures.
In December 2010, the FASB issued ASU 2010-29 “Business Combinations: Disclosure of supplementary pro forma information for business combinations.” The amendment to ASC 805 “Business Combinations” requires a public entity to disclose pro forma information for business combinations that occurred in the current reporting period. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as through the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. The Company will adopt the new guidance beginning November 1, 2011, and the adoption of the new guidance will not impact the Company’s financial position, results of operations or cash flows, other than the related disclosures.
In June 2011, the FASB issued ASU 2011-05 “Comprehensive Income: Presentation of comprehensive income.” The amendment to ASC 220 “Comprehensive Income” requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. The Company will adopt the new guidance beginning November 1, 2011, and the adoption of the new guidance will not impact the Company’s financial position, results of operations or cash flows, other than the related disclosures.
 NOTE 2—ACQUISITIONS AND OTHER SIGNIFICANT TRANSACTIONS
The following table summarizes the Company’s acquisition activity in 2011 and 2010 (Dollars in thousands).
																													
Segment	  	# of
Acquisitions	 	  	Purchase Price,
net of Cash	 	  	Revenue	 	  	Operating
Profit	 	  	Tangible
Assets, net	 	  	Intangible
Assets	 	  	Goodwill	 	
Total 2011 Acquisitions	  	 	8	  	  	$	344,914	  	  	$	122,470	  	  	$	6,083	  	  	$	119,745	  	  	$	76,083	  	  	$	287,885	  	
								
Total 2010 Acquisitions	  	 	12	  	  	$	176,156	  	  	$	268,443	  	  	$	19,042	  	  	$	109,038	  	  	$	49,601	  	  	$	129,500	  	
 
Note: Purchase price, net of cash acquired, does not factor payments for earn-out provisions on prior acquisitions. Revenue and operating profit represent activity only in the year of acquisition. Goodwill in 2010 excludes an immaterial acquisition in our Land Management segment.
 
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During 2011, the Company completed eight acquisitions, all in the Rigid Industrial Packaging and Services segment: four European companies acquired in February, May, July and August; two joint ventures entered into in February and August in North America and Asia Pacific, respectively; the acquisition of the remaining outstanding minority shares from a 2008 acquisition in South America; and the acquisition of additional shares of a company in North America that was a consolidated subsidiary as of October 31, 2011.
The rigid industrial packaging acquisitions are expected to complement the Company’s existing product lines that together will provide growth opportunities and economies of scale. The estimated fair value of the net tangible assets acquired was $119.7 million. This does not include any liabilities for deferred purchase payments. Identifiable intangible assets, with a combined fair value of $76.1 million, including trade names, customer relationships and certain non-compete agreements, have been recorded for these acquisitions. The excess of the purchase prices over the estimated fair values of the net tangible and intangible assets acquired of $287.9 million was recorded as goodwill.
During 2011 there were no divestitures.
During 2010, the Company completed twelve acquisitions consisting of seven rigid industrial packaging companies and five flexible products companies and made a contingent purchase price related to a 2007 acquisition. The seven rigid industrial packaging companies consisted of a European company purchased in November 2009, an Asian company purchased in June 2010, a North American drum reconditioning company purchased in July, a North American drum reconditioning company purchased in August 2010, one European company purchased in August 2010, a 51 percent interest in a Middle Eastern company purchased in September 2010 and a South American company purchased in September 2010. The five flexible products companies acquired conduct business throughout Europe, Asia and North America and were acquired in February, June, August and September 2010. The aggregate purchase price in the table above includes approximately $98.2 million received from the Flexible Packaging JV partner relating to their investment in the Flexible Packaging JV and reimbursement of certain costs. The five flexible products companies were contributed to a joint venture on September 29, 2010 which was accounted for in accordance with ASC 810. Greif owns 50 percent of this joint venture but maintains management control. The rigid industrial packaging acquisitions are expected to complement the Company’s existing product lines that together will provide growth opportunities and economies of scale. The drum reconditioning, within our rigid industrial packaging acquisitions, and flexible products acquisitions expand the Company’s product and service offerings. The estimated fair value of the net tangible assets acquired was $109.0 million. Identifiable intangible assets, with a combined fair value of $49.6 million, including trade-names, customer relationships, and certain non-compete agreements, have been recorded for these acquisitions. The excess of the purchase prices over the estimated fair values of the net tangible and intangible assets acquired of $129.5 million was recorded as goodwill. Certain business combinations that occurred at or near year end have been recorded with provisional estimates for fair value based on management’s best estimate.
During 2010, we sold specific Paper Packaging segment assets and facilities in North America. The net gain from these sales was immaterial.
The Company’s 2011 and 2010 acquisitions were made to obtain technologies, patents, equipment, customer lists and access to markets. All of the 2011 and 2010 acquisitions were of companies not listed on a stock exchange or not otherwise publicly traded or not required to provide public financial information. Pro-forma results of operations for the years ended October 31, 2011 and October 31, 2010 were not materially different from reported results and, consequently, are not presented.
 NOTE 3—SALE OF NON-UNITED STATES ACCOUNTS RECEIVABLE
Pursuant to the terms of a Receivable Purchase Agreement (the “RPA”) between Greif Coordination Center BVBA, an indirect wholly-owned subsidiary of Greif, Inc., and a major international bank, the seller agreed to sell trade receivables meeting certain eligibility requirements that seller had purchased from other indirect wholly-owned subsidiaries of Greif, Inc., including Greif Belgium BVBA, Greif Germany GmbH, Greif Nederland BV, Greif Packaging Belgium NV, Greif Spain SA, Greif Sweden AB, Greif Packaging Norway AS, Greif Packaging France, SAS, Greif Packaging Spain SA, Greif Portugal Lda and Greif UK Ltd, under discounted receivables purchase agreements and from Greif France SAS under a
 
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factoring agreement. This agreement is amended from time to time to add additional Greif entities. In addition, Greif Italia S.P.A., also an indirect wholly-owned subsidiary of Greif, Inc., entered into the Italian Receivables Purchase Agreement with the Italian branch of the major international bank (the “Italian RPA”) agreeing to sell trade receivables that meet certain eligibility criteria to the Italian branch of the major international bank. The Italian RPA is similar in structure and terms as the RPA. The maximum amount of receivables that may be financed under the RPA and the Italian RPA is €115 million ($162.7 million) as of October 31, 2011.
In October 2007, Greif Singapore Pte. Ltd., an indirect wholly-owned subsidiary of Greif, Inc., entered into the Singapore Receivable Purchase Agreement (the “Singapore RPA”) with a major international bank. The maximum amount of aggregate receivables that may be sold under the Singapore RPA is 15.0 million Singapore Dollars ($12.0 million) as of October 31, 2011.
In October 2008, Greif Embalagens Industrialis Do Brasil Ltda., an indirect wholly-owned subsidiary of Greif, Inc., entered into agreements (the “Brazil Agreements”) with Brazilian banks. As of October 31, 2011, there were no more sales of trade receivables under this agreement.
In May 2009, Greif Malaysia Sdn Bhd., an indirect wholly-owned Malaysian subsidiary of Greif, Inc., entered into the Malaysian Receivables Purchase Agreement (the “Malaysian Agreement”) with Malaysian banks. The maximum amount of the aggregate receivables that may be sold under the Malaysian Agreement is 15.0 million Malaysian Ringgits ($4.8 million) as of October 31, 2011.
The structure of the transactions provide for a legal true sale, on a revolving basis, of the receivables transferred from the various Greif, Inc. subsidiaries to the respective banks. The bank funds an initial purchase price of a certain percentage of eligible receivables based on a formula with the initial purchase price approximating 75 percent to 90 percent of eligible receivables. The remaining deferred purchase price is settled upon collection of the receivables. At the balance sheet reporting dates, the Company removes from accounts receivable the amount of proceeds received from the initial purchase price since they meet the applicable criteria of ASC 860, “Transfers and Servicing”, and continues to recognize the deferred purchase price in its accounts receivable. The receivables are sold on a non-recourse basis with the total funds in the servicing collection accounts pledged to the banks between settlement dates.
As of October 31, 2011 and October 31, 2010, €105.4 million ($149.2 million) and €117.6 million ($162.9 million), respectively, of accounts receivable were sold under the RPA and Italian RPA.
As of October 31, 2011 and October 31, 2010, 12.2 million Singapore Dollars ($9.8 million) and 6.7 million Singapore Dollars ($5.4 million), respectively, of accounts receivable were sold under the Singapore RPA.
As of October 31, 2011 there were no accounts receivable sold and, 11.7 million Brazilian Reais ($6.9 million) of accounts receivable were sold under the Brazil Agreements as of October 31, 2010.
As of October 31, 2011 and October 31, 2010, 12.6 million Malaysian Ringgits ($4.1million) and 6.3 million Malaysian Ringgits ($2.0 million), respectively, of accounts receivable were sold under the Malaysian Agreement.
Expenses associated with the RPA and Italian RPA totaled €3.1 million ($4.3 million), €2.9 million ($3.9 million) and €3.7 million ($5.5 million) for the year ended October 31, 2011, 2010 and 2009, respectively.
Expenses associated with the Singapore RPA totaled 0.4 million Singapore Dollars ($0.3 million), 0.4 million Singapore Dollars ($0.3 million) and 0.3 million Singapore Dollars ($0.2 million) for the year ended October 31, 2011, 2010 and 2009, respectively.
Expenses associated with the Brazil Agreements totaled 2.8 million Brazilian Reais ($1.7 million), 4.4 million Brazilian Reais ($2.5 million) and 1.3 million Brazilian Reais ($0.8 million) for the year ended October 31, 2011, 2010 and 2009, respectively.
Expenses associated with the Malaysian Agreement totaled 0.7 million Malaysian Ringgits ($0.2 million), 0.4 million Malaysian Ringgits ($0.1 million) and 0.2 million Malaysian Ringgits ($0.1 million) for the year ended October 31, 2011, 2010 and 2009, respectively.
 
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Additionally, the Company performs collections and administrative functions on the receivables sold similar to the procedures it uses for collecting all of its receivables, including receivables that are not sold under the RPA, the Italian RPA, the Singapore RPA, the Brazil Agreements, and the Malaysian Agreement. The servicing liability for these receivables is not material to the consolidated financial statements.
 NOTE 4—INVENTORIES
The inventories are comprised as follows as of October 31 for each year (Dollars in thousands):
									
   	  	2011	 	  	2010	 	
Finished goods	  	$	105,461	  	  	$	92,469	  	
			
Raw materials and work-in process	  	 	327,057	  	  	 	304,103	  	

	  	$	432,518	  	  	$	396,572	  	
	  	 	 	 	
 NOTE 5—NET ASSETS HELD FOR SALE
As of October 31, 2011 there were seven locations in the Rigid Industrial Packaging & Services segment with assets held for sale. During 2011, the Company sold seven locations, added four locations and placed six locations back in service for purposes of GAAP and resumed depreciation. As a result of placing six locations back in service in 2011, the 2010 consolidated balance sheet has been reclassified for such locations to conform to the current year presentation. The net assets held for sale are being marketed for sale and it is the Company’s intention to complete the facility sales within the upcoming year. In 2011, there were sales in the Rigid Industrial Packaging & Services segment which resulted in a $3.2 million gain, sales in the Paper Packaging segment which resulted in a $0.9 million gain, sales in the Land Management segment of HBU and surplus properties which resulted in a $11.4 million gain and sales of other miscellaneous equipment which resulted in a $0.6 million loss.
 NOTE 6—GOODWILL AND OTHER INTANGIBLE ASSETS
The Company reviews goodwill and indefinite-lived intangible assets for impairment as required by ASC 350, “Intangibles—Goodwill and Other”, either annually or when events and circumstances indicate an impairment may have occurred. The Company’s business segments have been identified as reporting units, which contain goodwill and indefinite-lived intangibles that are assessed for impairment. A reporting unit is the operating segment, or a business one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. The Company has concluded that no impairment exists at this time. The following table summarizes the changes in the carrying amount of goodwill by segment for the year ended October 31, 2011 and 2010 (Dollars in thousands):
																					
   	  	Rigid Industrial
Packaging
& Services	 	 	Flexible Products
& Services	 	 	Paper
Packaging	 	 	Land
Management	 	  	Total	 	
Balance at October 31, 2009	  	$	530,717	  	 	$	—	  	 	$	61,400	  	 	$	—	  	  	$	592,117	  	
						
Goodwill acquired	  	 	51,655	  	 	 	75,656	  	 	 	—	  	 	 	150	  	  	 	127,461	  	
						
Goodwill adjustments	  	 	(6,316	) 	 	 	—	  	 	 	(747	) 	 	 	—	  	  	 	(7,063	) 	
						
Currency translation	  	 	(5,395	) 	 	 	2,605	  	 	 	—	  	 	 	—	  	  	 	(2,790	) 	

Balance at October 31, 2010	  	$	570,661	  	 	$	78,261	  	 	$	60,653	  	 	$	150	  	  	$	709,725	  	
						
Goodwill acquired	  	 	287,885	  	 	 	—	  	 	 	—	  	 	 	—	  	  	 	287,885	  	
						
Goodwill adjustments	  	 	9,807	  	 	 	(1,779	) 	 	 	(997	) 	 	 	—	  	  	 	7,031	  	
						
Currency translation	  	 	(1,432	) 	 	 	1,666	  	 	 	—	  	 	 	—	  	  	 	234	  	

Balance at October 31, 2011	  	$	866,921	  	 	$	78,148	  	 	$	59,656	  	 	$	150	  	  	$	1,004,875	  	

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The goodwill acquired during 2011 of $287.9 million consisted of preliminary goodwill related to acquisitions in the Rigid Industrial Packaging & Services segment. Goodwill from prior year acquisitions has been adjusted to properly reflect tax valuation allowances in our Rigid Industrial Packaging & Services.
The goodwill adjustments during 2011 increased goodwill by a net amount of $7.0 million related to the finalization of purchase price allocation of prior year acquisitions. Certain business combinations that occurred at or near year end were recorded with provisional estimates for fair value based on management’s best estimate.
The goodwill acquired during 2010 of $127.5 million consisted of preliminary goodwill related to acquisitions in the Rigid Industrial Packaging & Services and Flexible Products & Services segments. Goodwill from prior year acquisitions has been adjusted to properly reflect tax valuation allowances in our Rigid Industrial Packaging & Services.
The details of other intangible assets by class as of October 31, 2011 and October 31, 2010 are as follows (Dollars in thousands):
													
   	  	Gross	 	  	Accum	 	  	Net	 	
2011	  				  				  				
				
Trademarks and patents	  	 	47,419	  	  	 	17,422	  	  	 	29,997	  	
				
Non-compete agreements	  	 	22,743	  	  	 	8,953	  	  	 	13,790	  	
				
Customer Relationships	  	 	183,015	  	  	 	22,449	  	  	 	160,566	  	
				
Other	  	 	33,132	  	  	 	7,695	  	  	 	25,437	  	

	  	 	286,309	  	  	 	56,519	  	  	 	229,790	  	

   	  	Gross	 	  	Accum	 	  	Net	 	
2010	  				  				  				
				
Trademarks and patents	  	 	41,040	  	  	 	15,346	  	  	 	25,694	  	
				
Non-compete agreements	  	 	20,456	  	  	 	7,774	  	  	 	12,682	  	
				
Customer Relationships	  	 	146,568	  	  	 	20,528	  	  	 	126,040	  	
				
Other	  	 	14,582	  	  	 	5,759	  	  	 	8,823	  	

	  	 	222,647	  	  	 	49,408	  	  	 	173,239	  	
	  	 	 	 	
Gross intangible assets increased by $63.7 million for the year ended October 31, 2011. The increase in gross intangible assets consisted of $0.3 million in final purchase price allocations related to the 2010 acquisitions in the Flexible Products & Services segment and $63.4 million in purchase price allocations substantially related to 2011 acquisitions in the Rigid Industrial Packaging & Services and other miscellaneous items. As a result of impairment in certain intangible assets in the Flexible Products & Services segment in 2011, the 2010 consolidated balance sheet has been reclassified for such locations to conform to the current year presentation. Amortization expense was $18.6 million, $14.4 million and $11.0 million for 2011, 2010 and 2009, respectively. Amortization expense for the next five years is expected to be $26.3 million in 2012, $24.1 million in 2013, $23.2 million in 2014, $22.1 million in 2015 and $21.4 million in 2016.
All intangible assets for the periods presented are subject to amortization and are being amortized using the straight-line method over periods that range from three to 15 years for trade names, two to ten years for non-competes, one to 23 for customer relationships and four to 20 for other intangibles, except for $17.5 million related to the Tri-Sure trademark and the trade names related to Blagden Express, Closed-loop, Box Board, and Fustiplast, all of which have indefinite lives.
 
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 NOTE 7—RESTRUCTURING CHARGES
The following is a reconciliation of the beginning and ending restructuring reserve balances for the years ended October 31, 2011, 2010 and 2009 (Dollars in thousands):
																					
 	  	Cash Charges	 	 	Non-cash Charges	 	 	 	 	
   	  	Employee
Separation
Costs	 	 	Other costs	 	 	Asset
Impairments	 	 	Inventory
Write-down	 	 	Total	 	
Balance at October 31, 2009	  	$	9,239	  	 	$	6,076	  	 	$	—	  	 	$	—	  	 	$	15,315	  	
						
Costs incurred and charged to expense	  	 	13,744	  	 	 	10,086	  	 	 	2,916	  	 	 	131	  	 	 	26,877	  	
						
Costs paid or otherwise settled	  	 	(10,315	) 	 	 	(8,592	) 	 	 	(2,916	) 	 	 	(131	) 	 	 	(21,954	) 	

Balance at October 31, 2010	  	$	12,668	  	 	$	7,570	  	 	$	—	  	 	$	—	  	 	$	20,238	  	

Costs incurred and charged to expense	  	 	13,360	  	 	 	12,662	  	 	 	4,474	  	 	 	—	  	 	 	30,496	  	
						
Costs paid or otherwise settled	  	 	(14,213	) 	 	 	(12,617	) 	 	 	(4,297	) 	 	 	—	  	 	 	(31,127	) 	

Balance at October 31, 2011	  	$	11,815	  	 	$	7,615	  	 	$	177	  	 	$	—	  	 	$	19,607	  	
	  	 	 	 	 	 	 	 	 	 	 	 	
The focus for restructuring activities in 2011 was on integration of recent acquisitions in the Rigid Industrial Packaging & Services and Flexible Products & Services segments as well as the implementation of certain cost-cutting measures. During 2011, the Company recorded restructuring charges of $30.5 million, consisting of $13.3 million in employee separation costs, $4.5 million in asset impairments and $12.7 million in other restructuring costs, primarily consisting of lease termination costs ($3.5 million), professional fees ($1.9 million), relocation costs ($2.2 million) and other costs ($5.1 million). Two plants in the Rigid Industrial Packaging & Services segment were closed. There were a total of 257 employees severed throughout 2011 as part of the Company’s restructuring efforts.
The following is a reconciliation of the total amounts expected to be incurred from open restructuring plans which are anticipated to be realized in 2012 or plans that are being formulated and have not been announced as of the date of this From 10-K (Dollars in thousands):
													
   	  	Amounts
expected to be
incurred	 	  	Amounts
Incurred in
2011	 	 	Amounts
remaining
to be
incurred	 	
Rigid Industrial Packaging & Services:	  				  				 				
				
Employee separation costs	  	$	11,874	  	  	$	9,538	  	 	$	2,336	  	
				
Asset impairments	  	 	4,395	  	  	 	4,395	  	 	 	—	  	
				
Other restructuring costs	  	 	17,868	  	  	 	10,121	  	 	 	7,747	  	

	  	 	34,137	  	  	 	24,054	  	 	 	10,083	  	
				
Flexible Products & Services:	  				  				 				
				
Employee separation costs	  	 	4,872	  	  	 	4,513	  	 	 	359	  	
				
Asset impairments	  	 	44	  	  	 	44	  	 	 	—	  	
				
Other restructuring costs	  	 	2,342	  	  	 	2,342	  	 	 	—	  	

	  	 	7,258	  	  	 	6,899	  	 	 	359	  	
				
Paper Packaging:	  				  				 				
				
Employee separation costs	  	 	—	  	  	 	(685	) 	 	 	—	  	
				
Asset impairments	  	 	35	  	  	 	35	  	 	 	—	  	
				
Other restructuring costs	  	 	199	  	  	 	199	  	 	 	—	  	

	  	 	234	  	  	 	(451	) 	 	 	—	  	
				
Land Management:	  				  				 				
				
Employee separation costs	  	 	—	  	  	 	(6	) 	 	 	—	  	

	  	$	41,629	  	  	$	30,496	  	 	$	10,442	  	

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The gain recognized within the Paper Packaging segment reflects actual expenditures being less than originally estimated for completed restructuring activities.
The focus for restructuring activities in 2010 was on integration of recent acquisitions in the Rigid Industrial Packaging & Services and Flexible Products & Services segments. During 2010, the Company recorded restructuring charges of $26.7 million, consisting of $13.7 million in employee separation costs, $2.9 million in asset impairments, $2.4 million in professional fees and $7.7 million in other restructuring costs, primarily consisting of facility consolidation and lease termination costs. In addition, the Company recorded $0.1 million in restructuring-related inventory charges in cost of products sold. Seven plants in the Rigid Industrial Packaging & Services segment, one plant in the Flexible Products & Services segment and two plants in the Paper Packaging segment were closed. There were a total of 232 employees severed throughout 2010 as part of the Company’s restructuring efforts.
The focus for restructuring activities in 2009 was on business realignment to address the adverse impact resulting from the global economic downturn and further implementation of the Greif Business System and specific contingency actions. During 2009, the Company recorded restructuring charges of $66.6 million, consisting of $28.4 million in employee separation costs, $19.6 million in asset impairments, $0.3 million in professional fees, and $18.3 million in other restructuring costs, primarily consisting of facility consolidation and lease termination costs. In addition, the Company recorded $10.8 million in restructuring-related inventory charges in costs of products sold. Nineteen plants in the Rigid Industrial Packaging & Services segment were closed. There were a total of 1,294 employees severed throughout 2009 as part of the Company’s restructuring efforts. Within the Paper Packaging segment, the Company recorded a reversal of severance expense in the amount of $2.1 million related to the actual costs being less as a result of fewer employees being served in connection with the sale of assets and closure of operations.
 NOTE 8—SIGNIFICANT NONSTRATEGIC TIMBERLAND TRANSACTIONS AND CONSOLIDATION OF VARIABLE INTEREST ENTITIES
The Company evaluates whether an entity is a VIE whenever reconsideration events occur and performs reassessments of all VIE’s quarterly to determine if the primary beneficiary status is appropriate. The Company consolidates VIE’s for which it is the primary beneficiary. If the Company is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity or cost methods of accounting. When assessing the determination of the primary beneficiary, the Company considers all relevant facts and circumstances, including: the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. One of the companies acquired in 2011 is considered a VIE. However, because the Company is not the primary beneficiary, the Company will report its ownership interest in this acquired company using the equity method of accounting.
Significant Nonstrategic Timberland Transactions
On March 28, 2005, Soterra LLC (a wholly owned subsidiary) entered into two real estate purchase and sale agreements with Plum Creek Timberlands, L.P. (“Plum Creek”) to sell approximately 56,000 acres of timberland and related assets located primarily in Florida for an aggregate sales price of approximately $90 million, subject to closing adjustments. In connection with the closing of one of these agreements, Soterra LLC sold approximately 35,000 acres of timberland and associated assets in Florida, Georgia and Alabama for $51.0 million, resulting in a pretax gain of $42.1 million, on May 23, 2005. The purchase price was paid in the form of cash and a $50.9 million purchase note payable (the “Purchase Note”) by an indirect subsidiary of Plum Creek (the “Buyer SPE”). Soterra LLC contributed the Purchase Note to STA Timber LLC (“STA Timber”), one of the Company’s indirect wholly owned subsidiaries. The Purchase Note is secured by a Deed of Guarantee issued by Bank of America, N.A., London Branch, in an amount not to exceed $52.3 million (the “Deed of Guarantee”), as a guarantee of the due and punctual payment of principal and interest on the Purchase Note.
The Company completed the second phase of these transactions in the first quarter of 2006. In this phase, the Company sold 15,300 acres of timberland holdings in Florida for $29.3 million in cash, resulting in a pre-tax gain of $27.4 million. The final phase of this transaction, approximately 5,700 acres sold for $9.7 million in 2006 which resulted in a pre-tax gain of $9.0 million.
 
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On May 31, 2005, STA Timber issued in a private placement its 5.20% Senior Secured Notes due August 5, 2020 (the “Monetization Notes”) in the principal amount of $43.3 million. In connection with the sale of the Monetization Notes, STA Timber entered into note purchase agreements with the purchasers of the Monetization Notes (the “Note Purchase Agreements”) and related documentation. The Monetization Notes are secured by a pledge of the Purchase Note and the Deed of Guarantee. The Monetization Notes may be accelerated in the event of a default in payment or a breach of the other obligations set forth therein or in the Note Purchase Agreements or related documents, subject in certain cases to any applicable cure periods, or upon the occurrence of certain insolvency or bankruptcy related events. The Monetization Notes are subject to a mechanism that may cause them, subject to certain conditions, to be extended to November 5, 2020. The proceeds from the sale of the Monetization Notes were primarily used for the repayment of indebtedness. Greif, Inc. and its other subsidiaries have not extended any form of guaranty of the principal or interest on the Monetization Notes. Accordingly, Greif, Inc. and its other subsidiaries will not become directly or contingently liable for the payment of the Monetization Notes at any time.
The Buyer SPE is deemed to be a VIE since the assets of the Buyer SPE are not available to satisfy the liabilities of the Buyer SPE. The Buyer SPE is a separate and distinct legal entity from the Company, but the Company is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result, Buyer SPE has been consolidated into the operations of the Company.
As of October 31, 2011 and 2010, assets of the Buyer SPE consisted of $50.9 million of restricted bank financial instruments. For the years ended October 31, 2011 and 2010, the Buyer SPE recorded interest income of $2.4 million, respectively.
As of October 31, 2011 and 2010, STA Timber had long-term debt of $43.3 million. For the years ended October 31, 2011 and 2010, STA Timber recorded interest expense of $2.2 million, respectively. STA Timber is exposed to credit-related losses in the event of nonperformance by the issuer of the Deed of Guarantee.
Flexible Products Joint Venture
On September 29, 2010, Greif, Inc. and its indirect subsidiary Greif International Holding Supra C.V. (“Greif Supra,”) formed a joint venture (referred to herein as the “Flexible Products JV”) with Dabbagh Group Holding Company Limited and its subsidiary National Scientific Company Limited (“NSC”). The Flexible Products JV owns the operations in the Flexible Products & Services segment, with the exception of the North American multi-wall bag business. The Flexible Products JV has been consolidated into the operations of the Company as of its formation date of September 29, 2010.
The Flexible Products JV is deemed to be a VIE since the total equity investment at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support. The Company is the primary beneficiary because it has (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.
The economic and business purpose underlying the Flexible Products JV is to establish a global industrial flexible products enterprise through a series of targeted acquisitions and major investments in plant, machinery and equipment. All entities contributed to the Flexible Products JV were existing businesses acquired by Greif Supra and that were reorganized under Greif Flexibles Asset Holding B.V. and Greif Flexibles Trading Holding B.V. (“Asset Co.” and “Trading Co.”), respectively. The Company has 51 percent ownership in Trading Co. and 49 percent ownership in Asset Co. However, Greif Supra and NSC have equal economic interests in the Flexible Products JV, notwithstanding the actual ownership interests in the various legal entities.
All investments, loans and capital contributions are to be shared equally by Greif Supra and NSC and each partner has committed to contribute capital of up to $150 million and obtain third party financing for up to $150 million as required.
 
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The following table presents the Flexible Products JV total net assets (Dollars in thousands):
													
October 31, 2011	  	Asset Co.	 	  	Trading Co.	 	  	Flexible Products JV	 	
Total assets	  	$	192,977	  	  	$	171,261	  	  	$	364,238	  	
				
Total liabilities	  	 	78,917	  	  	 	57,195	  	  	 	136,112	  	

Net assets	  	$	114,060	  	  	$	114,066	  	  	$	228,126	  	

October 31, 2010	  	Asset Co.	 	  	Trading Co.	 	  	Flexible Products JV	 	
Total assets	  	$	187,727	  	  	$	166,956	  	  	$	354,683	  	
				
Total liabilities	  	 	79,243	  	  	 	65,033	  	  	 	144,276	  	

Net assets	  	$	108,484	  	  	$	101,923	  	  	$	210,407	  	
	  	 	 	 	
Net income (loss) attributable to the non controlling interest in the Flexible Products JV for the years ended October 31, 2011 and 2010 was ($5.3) million and ($1.1) million, respectively and was added to net income to arrive at net income attributable to the Company.
 NOTE 9—LONG-TERM DEBT
Long-term debt is summarized as follows (Dollars in thousands):
									
   	  	October 31,
2011	 	 	October 31,
2010	 	
Credit Agreement	  	$	355,447	  	 	$	273,700	  	
			
Senior Notes due 2017	  	 	302,853	  	 	 	303,396	  	
			
Senior Notes due 2019	  	 	242,932	  	 	 	242,306	  	
			
Senior Notes due 2021	  	 	280,206	  	 	 	—	  	
			
Trade accounts receivable credit facility	  	 	130,000	  	 	 	135,000	  	
			
Other long-term debt	  	 	46,200	  	 	 	11,187	  	

	  	 	1,357,638	  	 	 	965,589	  	
			
Less current portion	  	 	(12,500	) 	 	 	(12,523	) 	

Long-term debt	  	$	1,345,138	  	 	$	953,066	  	
	  	 	 	 	
Credit Agreement
On October 29, 2010, the Company obtained a $1.0 billion senior secured credit facility pursuant to an Amended and Restated Credit Agreement with a syndicate of financial institutions (the “Credit Agreement”). The Credit Agreement provides for a $750 million revolving multicurrency credit facility and a $250 million term loan, both expiring October 29, 2015, with an option to add $250 million to the facilities with the agreement of the lenders. The $250 million term loan is scheduled to amortize by $3.1 million each quarter-end for the first eight quarters, $6.3 million each quarter-end for the next eleven quarters and the remaining balance due on the maturity date.
The Credit Agreement is available to fund ongoing working capital and capital expenditure needs, for general corporate purposes and to finance acquisitions. Interest is based on a Eurodollar rate or a base rate that resets periodically plus a calculated margin amount. As of October 31, 2011, $355.4 million was outstanding under the Credit Agreement. The current portion of the Credit Agreement was $12.5 million and the long-term portion was $342.9 million. The weighted average interest rate on the Credit Agreement was 2.15% for the year ended October 31, 2011. The actual interest rate on the Credit Agreement was 2.14% as of October 31, 2011.
The Credit Agreement contains financial covenants that require the Company to maintain a certain leverage ratio and a fixed charge coverage ratio. As of October 31, 2011, the Company was in compliance with these covenants.
 
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Senior Notes due 2017
On February 9, 2007, the Company issued $300.0 million of 6.75% Senior Notes due February 1, 2017. Interest on these Senior Notes is payable semi-annually. Proceeds from the issuance of these Senior Notes were principally used to fund the purchase of previously outstanding 8.875% Senior Subordinated Notes in a tender offer and for general corporate purposes.
The fair value of these Senior Notes due 2017 was $317.9 million as of October 31, 2011 based upon quoted market prices. The Indenture pursuant to which these Senior Notes were issued contains certain covenants. As of October 31, 2011, the Company was in compliance with these covenants.
Senior Notes due 2019
On July 28, 2009, the Company issued $250.0 million of 7.75% Senior Notes due August 1, 2019. Interest on these Senior Notes is payable semi-annually. Proceeds from the issuance of Senior Notes were principally used for general corporate purposes, including the repayment of amounts outstanding under the Company’s then existing revolving multicurrency credit facility, without any permanent reduction of the commitments thereunder.
The fair value of these Senior Notes due 2019 was $268.8 million at October 31, 2011 based upon quoted market prices. The Indenture pursuant to which these Senior Notes were issued contains certain covenants. As of October 31, 2011, the Company was in compliance with these covenants.
Senior Notes due 2021
On July 15, 2011, Greif, Inc.’s wholly-owned indirect Luxembourg subsidiary, Greif Luxembourg Finance S.C.A., issued €200.0 million of 7.375% Senior Notes due July 15, 2021. These Senior Notes are fully and unconditionally guaranteed on a senior basis by Greif, Inc. Interest on these Senior Notes is payable semi-annually. A portion of the proceeds from the issuance of these Senior Notes was used to repay non-U.S. borrowings under the credit agreement, without any permanent reduction of the commitments thereunder, and the remaining proceeds are available for general corporate purposes, including the financing of acquisitions.
The fair value of these Senior Notes due 2021 was $280.2 million as of October 31, 2011, based upon quoted market prices. The Indenture pursuant to which these Senior Notes were issued contains certain covenants. As of October 31, 2011, the Company was in compliance with these covenants.
United States Trade Accounts Receivable Credit Facility
On December 8, 2008, the Company entered into a trade accounts receivable credit facility with a financial institution. This facility was amended on September 19, 2011, which decreased the amount available to the borrowers from $135.0 million to $130.0 million and extended the termination date of the commitment to September 19, 2014. The credit facility is secured by certain of the Company’s trade accounts receivable in the United States and bears interest at a variable rate based on the applicable base rate or other agreed-upon rate plus a margin amount (1.01% as of October 31, 2011). In addition, the Company can terminate the credit facility at any time upon five days prior written notice. A significant portion of the initial proceeds from this credit facility was used to pay the obligations under the previous trade accounts receivable credit facility, which was terminated. The remaining proceeds were and will be used to pay certain fees, costs and expenses incurred in connection with the credit facility and for working capital and general corporate purposes. As of October 31, 2011, there was $130.0 million outstanding under the credit facility. The agreement for this receivables financing facility contains financial covenants that require the Company to maintain the same leverage ratio and fixed charge coverage ratio as set forth in the Credit Agreement. As of October 31, 2011, the Company was in compliance with these covenants.
Greif Receivables Funding LLC (“GRF”), an indirect subsidiary of the Company, has participated in the purchase and transfer of receivables in connection with these credit facilities and is included in the Company’s consolidated financial statements. However, because GRF is a separate and distinct legal entity from the Company and its other subsidiaries, the assets of GRF are not available to satisfy the liabilities and obligations of the Company and its other subsidiaries, and the
 
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liabilities of GRF are not the liabilities or obligations of the Company and its other subsidiaries. This entity purchases and services the Company’s trade accounts receivable that are subject to this credit facility.
Other
In addition to the amounts borrowed under the Credit Agreement and proceeds from these Senior Notes and the United States Trade Accounts Receivable Credit Facility, as of October 31, 2011, the Company had outstanding other debt of $183.5 million, comprised of $46.2 million in long-term debt and $137.3 million in short-term borrowings, compared to other debt outstanding of $72.1 million, comprised of $11.2 million in long-term debt and $60.9 million in short-term borrowings, as of October 31, 2010.
As of October 31, 2011, the current portion of the Company’s long-term debt was $12.5 million. Annual maturities, including the current portion, of long-term debt under the Company’s various financing arrangements were $12.5 million in 2012, $71.2 million in 2013, $155.0 million in 2014, $292.9 million in 2015, $0.0 million in 2016 and $826.0 million thereafter. Cash paid for interest expense was $67.7 million, $65.3 million and $48.0 million in 2011, 2010 and 2009, respectively.
As of October 31, 2011 and 2010, the Company had deferred financing fees and debt issuance costs of $18.9 million and $21.4 million, respectively, which are included in other long-term assets.
 NOTE 10—FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial Instruments
The Company uses derivatives from time to time to partially mitigate the effect of exposure to interest rate movements, exposure to currency fluctuations, and energy cost fluctuations. Under ASC 815, “Derivatives and Hedging,” all derivatives are to be recognized as assets or liabilities on the balance sheet and measured at fair value. Changes in the fair value of derivatives are recognized in either net income or in other comprehensive income, depending on the designated purpose of the derivative.
While the Company may be exposed to credit losses in the event of nonperformance by the counterparties to its derivative financial instrument contracts, its counterparties are established banks and financial institutions with high credit ratings. The Company has no reason to believe that such counterparties will not be able to fully satisfy their obligations under these contracts.
During the next twelve months, the Company expects to reclassify into earnings a net gain from accumulated other comprehensive gain of approximately $0.1 million after tax at the time the underlying hedge transactions are realized.
ASC 820, “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements for financial and non-financial assets and liabilities. Additionally, this guidance established a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.
The three levels of inputs used to measure fair values are as follows:
 
 	•	 	Level 1—Observable inputs such as unadjusted quoted prices in active markets for identical assets and liabilities.	
 
 	•	 	Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities.	
 
 	•	 	Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.	
 
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Recurring Fair Value Measurements
The following table presents the fair values adjustments for those assets and (liabilities) measured on a recurring basis as of October 31, 2011 and 2010 (Dollars in thousands):
																																			
 	 	October 31, 2011	 	 	October 31, 2010	 	 	Balance sheet
Location
 	
   	 	Level 1	 	 	Level 2	 	 	Level 3	 	 	Total	 	 	Level 1	 	 	Level 2	 	 	Level 3	 	 	Total	 	 		
Interest rate derivatives	 	$	—	  	 	$	(339	) 	 	$	—	  	 	$	(339	) 	 	$	—	  	 	$	(2,028	) 	 	$	—	  	 	$	(2,028	) 	 	Other long-term liabilities	
										
Foreign exchange hedges	 	 	—	  	 	 	1,001	  	 	 	—	  	 	 	1,001	  	 	 	—	  	 	 	946	  	 	 	—	  	 	 	946	  	 	Other current assets	
										
Foreign exchange hedges	 	 	—	  	 	 	(1,930	) 	 	 	—	  	 	 	(1,930	) 	 	 	—	  	 	 	(2,443	) 	 	 	—	  	 	 	(2,443	) 	 	Other current liabilities	
										
Energy hedges	 	 	—	  	 	 	(126	) 	 	 	—	  	 	 	(126	) 	 	 	—	  	 	 	(288	) 	 	 	—	  	 	 	(288	) 	 	Other current liabilities	

Total*	 	$	—	  	 	$	(1,394	) 	 	$	—	  	 	$	(1,394	) 	 	$	—	  	 	$	(3,813	) 	 	$	—	  	 	$	(3,813	) 	 		

 
*	The carrying amounts of cash and cash equivalents, trade accounts receivable, accounts payable, current liabilities and short-term borrowings as of October 31, 2011 and 2010 approximate their fair values because of the short-term nature of these items and are not included in this table.	
Cross-Currency Interest Rate Swaps
The Company entered into a cross-currency interest rate swap agreement which was designated as a hedge of a net investment in a foreign operation. Under this swap agreement, the Company received interest semi-annually from the counterparties in an amount equal to a fixed rate of 6.75% on $200.0 million and paid interest in an amount equal to a fixed rate of 6.25% on €146.6 million. During 2010, the Company terminated this swap agreement, including any future cash flows. The termination of this swap agreement resulted in a cash benefit of $25.7 million ($15.8 million, net of tax) which is included within foreign currency translation adjustments.
Interest Rate Derivatives
The Company has interest rate swap agreements with various maturities through 2013. These interest rate swap agreements are used to manage the Company’s fixed and floating rate debt mix. Under these agreements, the Company receives interest monthly from the counterparties based upon a designated London Interbank Offered Rate (“LIBOR”) and pays interest based upon a designated fixed rate over the life of the swap agreements.
The Company has three interest rate derivatives (floating to fixed swap agreements recorded as cash flow hedges) with a total notional amount of $76.6 million. Under these swap agreements, the Company receives interest based upon a variable interest rate from the counterparties (weighted average of 0.27% as of October 31, 2011 and 0.26% as of October 31, 2010) and pays interest based upon a fixed interest rate (weighted average of 1.92% as of October 31, 2011 and 1.78% as of October 31, 2010). The other comprehensive loss on these interest rate derivatives was $0.3 million and $2.0 million as of October 31, 2011 and 2010, respectively.
In the first quarter of 2010, the Company entered into a $100.0 million fixed to floating swap agreement which was recorded as a fair value hedge. Under this swap agreement, the Company received interest from the counterparty based upon a fixed rate of 6.75% and paid interest based upon a variable rate on a semi-annual basis. In the third quarter of 2010, the Company terminated this swap agreement, including any future cash flows. The termination of this swap agreement resulted in a cash benefit of $3.6 million ($2.2 million, net of tax) which is included within long-term debt on the balance sheet.
Foreign Exchange Hedges
As of October 31, 2011, the Company had outstanding foreign currency forward contracts in the notional amount of $160.6 million (252.9 million as of October 31, 2010). The purpose of these contracts is to hedge the Company’s exposure to foreign currency transactions and short-term intercompany loan balances in its international businesses. The
 
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fair value of these contracts as of October 31, 2011 resulted in a loss of $1.6 million recorded in the consolidated statements of operations and a gain of $0.7 million recorded in other comprehensive income. The fair value of similar contracts as of October 31, 2010 resulted in a gain of $0.8 million recorded in the consolidated statements of operations and a loss of $2.3 million recorded in other comprehensive income.
Energy Hedges
The Company has entered into certain cash flow agreements to mitigate its exposure to cost fluctuations in natural gas prices through October 31, 2011. Under these hedge agreements, the Company agrees to purchase natural gas at a fixed price. As of October 31, 2011, the notional amount of these hedges was $2.7 million ($2.4 million as of October 31, 2010). The other comprehensive loss on these agreements was $0.1 million as of October 31, 2011 and $0.3 million as of October 31, 2010. As a result of the high correlation between the hedged instruments and the underlying transactions, ineffectiveness has not had a material impact on the Company’s consolidated statements of operations for the year ended October 31, 2011.
Other Financial Instruments
The estimated fair values of the Company’s long-term senior notes were $866.8 million and $601.6 million compared to the carrying amounts of $825.9 million and $545.7 million as of October 31, 2011 and October 31, 2010, respectively. All of the Company’s long-term debt is considered level 2. The current portion of the long-term debt was $12.5 million as of October 31, 2011 and 2010. The fair value of the Company’s Credit Agreement and the United States Trade Accounts Receivable Credit Facility does not materially differ from carrying value as the Company’s cost of borrowing is variable and approximates current borrowing rates. The fair values of the Company’s long-term obligations are estimated based on either the quoted market prices for the same or similar issues or the current interest rates offered for debt of the same remaining maturities.
Non-Recurring Fair Value Measurements
Long-Lived Assets
As part of the Company’s restructuring plans following current and future acquisitions, the Company may shut down manufacturing facilities during the next few years. The long-lived assets are considered level three assets which were valued based on bids received from third parties and using discounted cash flow analysis based on assumptions that the Company believes market participants would use. Key inputs included anticipated revenues, associated manufacturing costs, capital expenditures and discount, growth and tax rates. The Company recorded restructuring related expenses for the year ended October 31, 2011 of $4.5 million on long lived assets with net book values of $5.4 million.
Net Assets Held for Sale
Net assets held for sale are considered level two assets which include recent purchase offers, market comparables and/or data obtained from commercial real estate brokers. As of October 31, 2011, the Company recognized an impairment of $1.3 million related to net assets held for sale in our Rigid Industrial Packaging & Service Segment.
Goodwill and Long Lived Intangible Assets
On an annual basis or when events or circumstances indicate impairment may have occurred, the Company performs impairment tests for goodwill and intangibles as defined under ASC 350, “Intangibles-Goodwill and Other.” In the third quarter of 2011, the Company recognized an impairment charge of $3.0 million related to the discontinued usage of certain trade names in our Flexible Products & Services segment. The Company concluded that no further impairment existed as of October 31, 2011.
Pension Plan Assets
On an annual basis we compare the asset holdings of our pension plan to targets established by the Company. The pension plan assets are categorized as either equity securities, debt securities, or other assets, which are all considered level 1 and level 2 fair value measurements. The typical asset holdings include:
 
 	•	 	Mutual funds: Valued at the Net Asset Value “NAV” available daily in an observable market.	
 
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 	•	 	Common collective trusts: Unit value calculated based on the observable NAV of the underlying investment.	
 
 	•	 	Pooled separate accounts: Unit value calculated based on the observable NAV of the underlying investment.	
 
 	•	 	The common collective trusts invest in an array of fixed income, debt and equity securities with various growth and preservation strategies. The trusts invest in long term bonds and large small capital stock.	
 
 	•	 	Government and corporate debt securities: Valued based on readily available inputs such as yield or price of bonds of comparable quality, coupon, maturity and type.	
 NOTE 11—STOCK-BASED COMPENSATION
Stock-based compensation is accounted for in accordance with ASC 718, “Compensation – Stock Compensation,” which requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the Company’s consolidated statements of operations over the requisite service periods. The Company uses the straight-line single option method of expensing stock options to recognize compensation expense in its consolidated statements of operations for all share-based awards. Because share-based compensation expense is based on awards that are ultimately expected to vest, share-based compensation expense will be reduced to account for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. No stock options were granted in 2011, 2010 or 2009. For any options granted in the future, compensation expense will be based on the grant date fair value estimated in accordance with the provisions of ASC 718.
In 2001, the Company adopted the 2001 Management Equity Incentive and Compensation Plan (the “2001 Plan”). The provisions of the 2001 Plan allow the awarding of incentive and nonqualified stock options and restricted and performance shares of Class A Common Stock to key employees. The maximum number of shares that may be issued each year is determined by a formula that takes into consideration the total number of shares outstanding and is also subject to certain limits. In addition, the maximum number of incentive stock options that will be issued under the 2001 Plan during its term is 5,000,000 shares.
Prior to 2001, the Company had adopted a Non-statutory Stock Option Plan (the “2000 Plan”) that provides the discretionary granting of non-statutory options to key employees, and an Incentive Stock Option Plan (the “Option Plan”) that provides the discretionary granting of incentive stock options to key employees and non-statutory options for non-employees. The aggregate number of the Company’s Class A Common Stock options that may be granted under the 2000 Plan and Option Plan may not exceed 400,000 shares and 2,000,000 shares, respectively.
Under the terms of the 2001 Plan, the 2000 Plan and the Option Plan, stock options may be granted at exercise prices equal to the market value of the common stock on the date options are granted and become fully vested two years after date of grant. Options expire 10 years after date of grant.
In 2005, the Company adopted the 2005 Outside Directors Equity Award Plan (the “2005 Directors Plan”), which provides for the granting of stock options, restricted stock or stock appreciation rights to directors who are not employees of the Company. Prior to 2005, the Directors Stock Option Plan (the “Directors Plan”) provided for the granting of stock options to directors who are not employees of the Company. The aggregate number of the Company’s Class A Common Stock options, and in the case of the 2005 Directors Plan, restricted stock, that may be granted may not exceed 200,000 shares under each of these plans. Under the terms of both plans, options are granted at exercise prices equal to the market value of the common stock on the date options are granted and become exercisable immediately. Options expire 10 years after date of grant.
 
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Stock option activity for the years ended October 31 was as follows (Shares in thousands):
																									
 	  	2011	 	  	2010	 	  	2009	 	
   	  	Shares	 	  	Weighted
Average
Exercise
price	 	  	Shares	 	  	Weighted
Average
Exercise
price	 	  	Shares	 	  	Weighted
Average
Exercise
price	 	
Beginning balance	  	 	510	  	  	$	16.14	  	  	 	643	  	  	$	15.91	  	  	 	785	  	  	$	16.01	  	
							
Granted	  	 	—	  	  	 	—	  	  	 	—	  	  	 	—	  	  	 	—	  	  	 	—	  	
							
Forfeited	  	 	1	  	  	 	12.72	  	  	 	—	  	  	 	—	  	  	 	1	  	  	 	13.10	  	
							
Exercised	  	 	167	  	  	 	15.17	  	  	 	133	  	  	 	15.06	  	  	 	141	  	  	 	16.50	  	

Ending balance	  	 	342	  	  	$	16.61	  	  	 	510	  	  	$	16.14	  	  	 	643	  	  	$	15.91	  	
As of October 31, 2011, outstanding stock options had exercise prices and contractual lives as follows (Shares in thousands):
									
Range of Exercise Prices	  	Number
Outstanding	 	  	Weighted-
Average
Remaining
Contractual
Life	 	
$5—$15	  	 	228	  	  	 	1.3	  	
			
$15—$25	  	 	102	  	  	 	2.9	  	
			
$25—$35	  	 	12	  	  	 	3.3	  	
All outstanding options were exercisable as of October 31, 2011, 2010 and 2009, respectively.
During 2011, the Company awarded an officer, as part of the terms of his initial employment arrangement, 30,000 shares of Class A Common Stock under the 2001 Plan. These shares were issued subject to restrictions on transfer and risk of forfeiture. The sale or transfer of these shares is restricted until January 1, 2016. In June 2011, 7,500 of such shares vested with an expense of $0.5 million. The remaining shares vest in equal installments of 7,500 shares each on January 1, 2012, 2013 and 2014, respectively. When shares vest, they are no longer subject to any risk of forfeiture. The Company’s results of operations did not include share based compensation expense for stock options for 2011, 2010, or 2009 respectively.
Under the Company’s Long-Term Incentive Plan and the 2005 Directors Plan, the Company granted 40,215 and 11,144 shares of restricted stock with a weighted average grant date fair value of $60.46 and $64.59, respectively, in 2011. The Company granted 134,721 and 14,480 shares of restricted stock with a weighted average grant date fair value of $54.88 and $49.70, under the Company’s Long-Term Incentive Plan and the 2005 Directors Plan, respectively, in 2010. All restricted stock awards under the Long Term Investment Plan are fully vested at the date of award.
 NOTE 12—INCOME TAXES
The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, and various non-U.S. jurisdictions.
 
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The provision for income taxes consists of the following (Dollars in thousands):
													
For the years ended October 31,	  	2011	 	 	2010	 	 	2009	 	
Current	  				 				 				
				
Federal	  	$	25,894	  	 	$	15,222	  	 	$	24,005	  	
				
State and local	  	 	4,435	  	 	 	5,892	  	 	 	1,268	  	
				
non-U.S.	  	 	28,406	  	 	 	14,861	  	 	 	11,955	  	

	  	 	58,735	  	 	 	35,975	  	 	 	37,228	  	
				
Deferred	  				 				 				
				
Federal	  	 	10,587	  	 	 	(372	) 	 	 	(8,762	) 	
				
State and local	  	 	4,908	  	 	 	653	  	 	 	2,062	  	
				
non-U.S.	  	 	(3,153	) 	 	 	4,315	  	 	 	(6,467	) 	

	  	 	12,342	  	 	 	4,596	  	 	 	(13,167	) 	

	  	$	71,077	  	 	$	40,571	  	 	$	24,061	  	
	  	 	 	 	
Non-U.S. income before income tax expense was $134.1 million, $159.7 million and $63.3 million in 2011, 2010, and 2009, respectively.
The following is a reconciliation of the provision for income taxes based on the federal statutory rate to the Company’s effective income tax rate:
													
For the years ended October 31,	  	2011	 	 	2010	 	 	2009	 	
United States federal tax rate	  	 	35.00	% 	 	 	35.00	% 	 	 	35.00	% 	
				
Non-U.S. tax rates	  	 	(8.80	)% 	 	 	(15.30	)% 	 	 	(9.00	)% 	
				
State and local taxes, net of federal tax benefit	  	 	1.80	% 	 	 	1.30	% 	 	 	1.90	% 	
				
United States tax credits	  	 	(0.70	)% 	 	 	(3.90	)% 	 	 	(4.40	)% 	
				
Unrecognized tax benefits	  	 	13.60	% 	 	 	(1.50	)% 	 	 	(2.30	)% 	
				
Valuation allowance	  	 	(14.60	)% 	 	 	0.70	% 	 	 	(4.80	)% 	
				
Withholding tax	  	 	1.10	% 	 	 	1.30	% 	 	 	1.50	% 	
				
Other non-recurring items	  	 	1.80	% 	 	 	(1.50	)% 	 	 	(0.50	)% 	

	  	 	29.20	% 	 	 	16.10	% 	 	 	17.40	% 	

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Significant components of the Company’s deferred tax assets and liabilities as of October 31 for the years indicated were as follows (Dollars in thousands):
									
   	  	2011	 	 	2010	 	
Deferred Tax Assets	  				 				
			
Net operating loss carryforwards	  	$	128,460	  	 	$	117,850	  	
			
Minimum pension liabilities	  	 	50,966	  	 	 	46,064	  	
			
Insurance operations	  	 	9,741	  	 	 	13,659	  	
			
Incentives	  	 	6,550	  	 	 	8,605	  	
			
Environmental reserves	  	 	7,078	  	 	 	7,619	  	
			
State income tax	  	 	9,036	  	 	 	8,026	  	
			
Postretirement	  	 	9,481	  	 	 	6,963	  	
			
Other	  	 	538	  	 	 	8,829	  	
			
Derivatives instruments	  				 	 	832	  	
			
Interest	  	 	6,970	  	 	 	4,606	  	
			
Allowance for doubtful accounts	  	 	3,258	  	 	 	2,496	  	
			
Restructuring reserves	  	 	2,563	  	 	 	3,558	  	
			
Deferred compensation	  	 	2,860	  	 	 	3,098	  	
			
Foreign tax credits	  	 	1,831	  	 	 	1,602	  	
			
Vacation accruals	  	 	1,291	  	 	 	1,186	  	
			
Stock options	  	 	2,112	  	 	 	1,820	  	
			
Severance	  	 	47	  	 	 	372	  	
			
Workers compensation accruals	  	 	990	  	 	 	295	  	

Total Deferred Tax Assets	  	 	243,772	  	 	 	237,480	  	
			
Valuation allowance	  	 	(41,259	) 	 	 	(64,568	) 	

Net Deferred Tax Assets	  	 	202,513	  	 	 	172,912	  	

Deferred Tax Liabilities	  				 				
			
Properties, plants and equipment	  	 	110,360	  	 	 	106,544	  	
			
Goodwill and other intangible assets	  	 	79,972	  	 	 	83,690	  	
			
Inventories	  	 	1,033	  	 	 	5,117	  	
			
Derivative instruments	  	 	266	  	 				
			
Timberland transactions	  	 	95,799	  	 	 	95,355	  	
			
Pension	  	 	22,550	  	 	 	18,275	  	

Total Deferred Tax Liabilities	  	 	309,980	  	 	 	308,981	  	

Net Deferred Tax Liability	  	$	(107,467	) 	 	$	(136,069	) 	
	  	 	 	 	
As of October 31, 2011, the Company had tax benefits from non-U.S. net operating loss carryforwards of approximately $126.6 million and approximately $1.1 million of state net operating loss carryfowards. A majority of the non-U.S. net operating losses will begin expiring in 2012. As of October 31, 2010, the company had recorded valuation allowances of approximately $64.5 million and as of October 31, 2011, had recorded valuation allowance of $42.2 million against the tax benefits from non-U.S. net operating loss carryforwards. During 2011, the valuation allowance decreased in the
 
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amount of $23.3 million, primarily due to the realization of deferred tax assets related to net operating loss carryforwards. It was determined that the realization of the deferred tax asset was appropriate due to the ability to generate future taxable income of the appropriate nature.
As of October 31, 2011, the Company had undistributed earnings from certain non-U.S. subsidiaries that are intended to be permanently reinvested in non-U.S. operations. Because these earnings are considered permanently reinvested, no U.S. tax provision has been accrued related to the repatriation of these earnings. It is not practicable to determine the additional tax, if any, which would result from the remittance of these amounts.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
													
   	  	2011	 	 	2010	 	 	2009	 	
Balance at November 1	  	$	35,362	  	 	$	45,459	  	 	$	51,715	  	
				
Increases in tax provisions for prior years	  	 	48,493	  	 	 	66	  	 	 	3,335	  	
				
Decreases in tax provisions for prior years	  	 	(1,616	) 	 	 	(2,728	) 	 	 	(2,992	) 	
				
Increases in tax positions for current years	  	 	—	  	 	 	1,517	  	 	 	2,951	  	
				
Settlements with taxing authorities	  	 	(2,179	) 	 	 	(6,667	) 	 	 	—	  	
				
Lapse in statute of limitations	  	 	—	  	 	 	—	  	 	 	(6,016	) 	
				
Currency translation	  	 	623	  	 	 	(2,285	) 	 	 	(3,534	) 	

Balance at October 31	  	$	80,683	  	 	$	35,362	  	 	$	45,459	  	
	  	 	 	 	
The 2011 increases in tax provisions for prior years primarily related to a prior year issue in a non-U.S. jurisdiction. In January 2011, a Dutch Appeals Court ruled in favor of the local Dutch taxing authority relative to the 10a interest exemption. Since the Dutch Appeals Court cited “public interest” as justification for its decision, the Company determined that this same ruling and interpretation could be applied to the deductibility of the 13a participation exemption and concluded that it is no longer able to assert a more-likely-than-not tax position. Therefore, the Company recorded a tax reserve for the Dutch participation exemption for 2008 through 2011 in the current year. The increase in reserve was substantially offset by the realization of net operating losses and a decrease in valuation allowances. The 2011 settlements with taxing authorities primarily relate to a prior-year issue that was resolved during 2011 with a separate non-U.S. jurisdiction.
The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. With a few exceptions, the Company is subject to audit by various taxing authorities for 2008 up through the current fiscal year. The company has completed its U.S. federal tax audit for the year up through 2008 and has an ongoing audit for fiscal year 2009. The Company is subject to audit in the Netherlands for the fiscal period 2001 through the current fiscal period.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense net of tax. As of October 31, 2011 and October 31, 2010, the Company had $8.6 million and $11.1 million, respectively, accrued for the payment of interest and penalties.
The Company has estimated the reasonably possible expected net change in unrecognized tax benefits through October 31, 2011 based on lapses of the applicable statutes of limitations of unrecognized tax benefits. The estimated net decrease in unrecognized tax benefits for the next 12 months ranges from $0 to $48.5 million. Actual results may differ materially from this estimate.
The Company paid income taxes of $64.9 million, $29.3 million and $58.9 million in 2011, 2010, and 2009, respectively.
 
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 NOTE 13—RETIREMENT PLANS AND POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
Retirement Plans
The Company has certain non-contributory defined benefit pension plans in the United States, Canada, Germany, the Netherlands, South Africa and the United Kingdom. The Company uses a measurement date of October 31 for fair value purposes for its pension plans. The salaried plans’ benefits are based primarily on years of service and earnings. The hourly plans’ benefits are based primarily upon years of service. The Company contributes an amount that is not less than the minimum funding or more than the maximum tax-deductible amount to these plans. The plans’ assets consist of large cap, small cap and international equity securities, fixed income investments and not more than the allowable number of shares of the Company’s common stock, which was 247,504 Class A shares and 160,710 Class B shares at October 31, 2011 and 2010. The category “Other International” represents the noncontributory defined benefit pension plans in Canada, the Netherlands, and South Africa.
The components of net periodic pension cost include the following (Dollars in thousands):
																					
For the year ended October 31, 2011	  	Consolidated	 	 	United States	 	 	Germany	 	  	United Kingdom	 	 	Other
International	 	
Service cost	  	$	12,625	  	 	$	8,957	  	 	$	450	  	  	$	2,121	  	 	$	1,097	  	
						
Interest cost	  	 	29,636	  	 	 	16,651	  	 	 	1,406	  	  	 	7,008	  	 	 	4,571	  	
						
Expected return on plan assets	  	 	(36,763	) 	 	 	(19,712	) 	 	 	—	  	  	 	(12,662	) 	 	 	(4,389	) 	
						
Amortization of transition net asset	  	 	26	  	 	 	(48	) 	 	 	—	  	  	 	—	  	 	 	74	  	
						
Amortization of prior service cost	  	 	1,868	  	 	 	1,868	  	 	 	—	  	  	 	—	  	 	 	—	  	
						
Recognized net actuarial (gain) loss	  	 	8,404	  	 	 	7,118	  	 	 	145	  	  	 	429	  	 	 	712	  	

Net periodic pension cost	  	$	15,796	  	 	$	14,834	  	 	$	2,001	  	  	$	(3,104	) 	 	$	2,065	  	

For the year ended October 31, 2010	  	Consolidated	 	 	United States	 	 	Germany	 	  	United Kingdom	 	 	Other
International	 	
Service cost	  	$	12,670	  	 	$	9,171	  	 	$	366	  	  	$	2,326	  	 	$	807	  	
						
Interest cost	  	 	29,213	  	 	 	15,990	  	 	 	1,387	  	  	 	6,958	  	 	 	4,878	  	
						
Expected return on plan assets	  	 	(34,784	) 	 	 	(18,097	) 	 	 	—	  	  	 	(11,604	) 	 	 	(5,083	) 	
						
Amortization of transition net asset	  	 	24	  	 	 	(48	) 	 	 	—	  	  	 	—	  	 	 	72	  	
						
Amortization of prior service cost	  	 	951	  	 	 	951	  	 	 	—	  	  	 	—	  	 	 	—	  	
						
Recognized net actuarial (gain) loss	  	 	6,718	  	 	 	5,899	  	 	 	—	  	  	 	524	  	 	 	295	  	

Net periodic pension cost	  	$	14,792	  	 	$	13,866	  	 	$	1,753	  	  	$	(1,796	) 	 	$	969	  	

For the year ended October 31, 2009	  	Consolidated	 	 	United States	 	 	Germany	 	  	United Kingdom	 	 	Other
International	 	
Service cost	  	$	10,224	  	 	$	7,366	  	 	$	345	  	  	$	1,838	  	 	$	675	  	
						
Interest cost	  	 	31,440	  	 	 	16,572	  	 	 	1,505	  	  	 	6,792	  	 	 	6,571	  	
						
Expected return on plan assets	  	 	(35,875	) 	 	 	(17,593	) 	 	 	—	  	  	 	(10,927	) 	 	 	(7,355	) 	
						
Amortization of transition net asset	  	 	29	  	 	 	(48	) 	 	 	—	  	  	 	—	  	 	 	77	  	
						
Amortization of prior service cost	  	 	1,005	  	 	 	1,017	  	 	 	9	  	  	 	—	  	 	 	(21	) 	
						
Recognized net actuarial (gain) loss	  	 	(1,209	) 	 	 	38	  	 	 	—	  	  	 	(1,268	) 	 	 	21	  	
						
Curtailment, settlement and other	  	 	497	  	 	 	147	  	 	 	—	  	  	 	350	  	 	 	—	  	

Net periodic pension cost	  	$	6,111	  	 	$	7,499	  	 	$	1,859	  	  	$	(3,215	) 	 	$	(32	) 	

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The significant weighted average assumptions used in determining benefit obligations and net periodic pension costs were as follows:
																					
For the year ended October 31, 2011	  	Consolidated	 	 	United States	 	 	Germany	 	 	United Kingdom	 	 	Other
International	 	
Discount rate	  	 	4.94	% 	 	 	4.90	% 	 	 	5.25	% 	 	 	5.00	% 	 	 	5.07	% 	
						
Expected return on plan assets(1)	  	 	7.20	% 	 	 	8.25	% 	 	 	0.00	% 	 	 	7.50	% 	 	 	4.55	% 	
						
Rate of compensation increase	  	 	3.13	% 	 	 	3.00	% 	 	 	2.75	% 	 	 	4.00	% 	 	 	2.31	% 	
						
For the year ended October 31, 2010	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discount rate	  	 	5.20	% 	 	 	5.50	% 	 	 	5.00	% 	 	 	5.25	% 	 	 	4.36	% 	
						
Expected return on plan assets(1)	  	 	7.50	% 	 	 	8.25	% 	 	 	0.00	% 	 	 	7.50	% 	 	 	6.06	% 	
						
Rate of compensation increase	  	 	3.11	% 	 	 	3.00	% 	 	 	2.75	% 	 	 	4.00	% 	 	 	2.32	% 	
						
For the year ended October 31, 2009	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discount rate	  	 	5.72	% 	 	 	5.75	% 	 	 	6.00	% 	 	 	5.50	% 	 	 	5.99	% 	
						
Expected return on plan assets(1)	  	 	7.69	% 	 	 	8.25	% 	 	 	0.00	% 	 	 	7.50	% 	 	 	6.73	% 	
						
Rate of compensation increase	  	 	3.25	% 	 	 	3.00	% 	 	 	2.75	% 	 	 	4.00	% 	 	 	3.01	% 	

(1)	To develop the expected long-term rate of return on assets assumption, the Company uses a generally consistent approach wordwide. The approach considers various sources, primarily inputs from a range of advisors, inflation, bond yields, historical returns, and future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This rate is gross of any investment or administrative expenses.	
The following table sets forth the plans’ change in benefit obligation, change in plan assets and amounts recognized in the consolidated financial statements (Dollars in thousands):
																					
For the year ended October 31, 2011	  	Consolidated	 	 	USA	 	 	Germany	 	 	United Kingdom	 	 	Other
International	 	
Change in benefit obligation:	  				 				 				 				 				
						
Benefit obligation at beginning of year	  	$	580,703	  	 	$	309,455	  	 	$	28,548	  	 	$	134,459	  	 	$	108,241	  	
						
Service cost	  	 	12,625	  	 	 	8,957	  	 	 	450	  	 	 	2,121	  	 	 	1,097	  	
						
Interest cost	  	 	29,636	  	 	 	16,651	  	 	 	1,406	  	 	 	7,008	  	 	 	4,571	  	
						
Plan participant contributions	  	 	525	  	 	 	—	  	 	 	—	  	 	 	319	  	 	 	206	  	
						
Amendments	  	 	(1,646	) 	 	 	(622	) 	 	 	—	  	 	 	(963	) 	 	 	(61	) 	
						
Actuarial (gains) loss	  	 	24,973	  	 	 	24,780	  	 	 	(778	) 	 	 	6,172	  	 	 	(5,201	) 	
						
Foreign currency effect	  	 	(2,947	) 	 	 	—	  	 	 	(390	) 	 	 	(1,314	) 	 	 	(1,243	) 	
						
Benefits paid	  	 	(27,654	) 	 	 	(13,696	) 	 	 	(1,299	) 	 	 	(5,740	) 	 	 	(6,919	) 	

Benefit obligation at end of year	  	$	616,215	  	 	$	345,525	  	 	$	27,937	  	 	$	142,062	  	 	$	100,691	  	

Change in plan assets:	  				 				 				 				 				
						
Fair value of plan assets at beginning of year	  	$	514,728	  	 	$	228,302	  	 	$	—	  	 	$	178,486	  	 	$	107,940	  	
						
Actual return on plan assets	  	 	21,444	  	 	 	20,969	  	 	 	—	  	 	 	2,802	  	 	 	(2,327	) 	
						
Expenses paid	  	 	(987	) 	 	 	(926	) 	 	 	—	  	 	 	—	  	 	 	(61	) 	
						
Plan participant contributions	  	 	525	  	 	 	—	  	 	 	—	  	 	 	319	  	 	 	206	  	
						
Other	  	 	1,060	  	 	 	—	  	 	 	—	  	 	 	(722	) 	 	 	1,782	  	
						
Foreign currency effects	  	 	(3,183	) 	 	 	—	  	 	 	—	  	 	 	(1,492	) 	 	 	(1,691	) 	
						
Employer contributions	  	 	32,595	  	 	 	27,900	  	 	 	—	  	 	 	3,043	  	 	 	1,652	  	
						
Benefits paid	  	 	(25,894	) 	 	 	(13,235	) 	 	 	—	  	 	 	(5,740	) 	 	 	(6,919	) 	

Fair value of plan assets at end of year	  	$	540,288	  	 	$	263,010	  	 	$	—	  	 	$	176,696	  	 	$	100,582	  	

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For the year ended October 31, 2010	  	Consolidated	 	 	USA	 	 	Germany	 	 	United Kingdom	 	 	Other
International	 	
Change in benefit obligation:	  				 				 				 				 				
						
Benefit obligation at beginning of year	  	$	541,791	  	 	$	284,680	  	 	$	25,287	  	 	$	133,669	  	 	$	98,155	  	
						
Service cost	  	 	12,670	  	 	 	9,171	  	 	 	366	  	 	 	2,326	  	 	 	807	  	
						
Interest cost	  	 	29,213	  	 	 	15,990	  	 	 	1,387	  	 	 	6,958	  	 	 	4,878	  	
						
Plan participant contributions	  	 	500	  	 	 	—	  	 	 	—	  	 	 	312	  	 	 	188	  	
						
Amendments	  	 	1,351	  	 	 	1,397	  	 	 	—	  	 	 	—	  	 	 	(46	) 	
						
Actuarial loss	  	 	34,275	  	 	 	10,734	  	 	 	4,393	  	 	 	1,694	  	 	 	17,454	  	
						
Foreign currency effect	  	 	(12,452	) 	 	 	—	  	 	 	(1,608	) 	 	 	(4,259	) 	 	 	(6,585	) 	
						
Benefits paid	  	 	(26,645	) 	 	 	(12,517	) 	 	 	(1,277	) 	 	 	(6,241	) 	 	 	(6,610	) 	

Benefit obligation at end of year	  	$	580,703	  	 	$	309,455	  	 	$	28,548	  	 	$	134,459	  	 	$	108,241	  	

Change in plan assets:	  				 				 				 				 				
						
Fair value of plan assets at beginning of year	  	$	463,158	  	 	$	194,470	  	 	$	—	  	 	$	166,250	  	 	$	102,438	  	
						
Actual return on plan assets	  	 	65,495	  	 	 	27,358	  	 	 	—	  	 	 	20,449	  	 	 	17,688	  	
						
Expenses paid	  	 	(46	) 	 	 	—	  	 	 	—	  	 	 	—	  	 	 	(46	) 	
						
Plan participant contributions	  	 	500	  	 	 	—	  	 	 	—	  	 	 	312	  	 	 	188	  	
						
Other	  	 	(625	) 	 	 	(625	) 	 	 	—	  	 	 	—	  	 	 	—	  	
						
Foreign currency effects	  	 	(11,816	) 	 	 	—	  	 	 	—	  	 	 	(5,291	) 	 	 	(6,525	) 	
						
Employer contributions	  	 	22,983	  	 	 	19,169	  	 	 	—	  	 	 	3,007	  	 	 	807	  	
						
Benefits paid	  	 	(24,921	) 	 	 	(12,070	) 	 	 	—	  	 	 	(6,241	) 	 	 	(6,610	) 	

Fair value of plan assets at end of year	  	$	514,728	  	 	$	228,302	  	 	$	—	  	 	$	178,486	  	 	$	107,940	  	

For the year ended October 31, 2011	  	Consolidated	 	 	USA	 	 	Germany	 	 	United Kingdom	 	  	Other
International	 	
Unrecognized net actuarial loss	  	 	153,441	  	 	 	119,475	  	 	 	3,899	  	 	 	11,462	  	  	 	18,605	  	
						
Unrecognized prior service cost	  	 	4,675	  	 	 	4,675	  	 	 	—	  	 	 	—	  	  	 	—	  	
						
Unrecognized initial net obligation	  	 	471	  	 	 	(28	) 	 	 	—	  	 	 	—	  	  	 	499	  	

Accumulated other comprehensive loss	  	$	158,587	  	 	$	124,122	  	 	$	3,899	  	 	$	11,462	  	  	 	19,104	  	

Amounts recognized in the Consolidated Balance Sheets consist of:	  				 				 				 				  				
						
Prepaid benefit cost	  	$	40,741	  	 	$	—	  	 	$	—	  	 	$	34,634	  	  	$	6,107	  	
						
Accrued benefit liability	  	 	(115,044	) 	 	 	(80,888	) 	 	 	(27,937	) 	 	 	—	  	  	 	(6,219	) 	
						
Accumulated other comprehensive loss	  	 	158,587	  	 	 	124,122	  	 	 	3,899	  	 	 	11,462	  	  	 	19,104	  	

Net amount recognized	  	$	84,284	  	 	$	43,234	  	 	$	(24,038	) 	 	$	46,096	  	  	$	18,992	  	

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For the year ended October 31, 2010	  	Consolidated	 	 	USA	 	 	Germany	 	 	United Kingdom	 	 	Other
International	 	
Unrecognized net actuarial (gain) loss	  	 	125,520	  	 	 	104,697	  	 	 	4,872	  	 	 	(3,609	) 	 	 	19,560	  	
						
Unrecognized prior service cost	  	 	6,239	  	 	 	6,239	  	 	 	—	  	 	 	—	  	 	 	—	  	
						
Unrecognized initial net obligation	  	 	494	  	 	 	(76	) 	 	 	—	  	 	 	—	  	 	 	570	  	

Accumulated other comprehensive (income) loss	  	$	132,253	  	 	$	110,860	  	 	$	4,872	  	 	$	(3,609	) 	 	 	20,130	  	

Amounts recognized in the Consolidated Balance Sheets consist of:	  				 				 				 				 				
						
Prepaid benefit cost	  	$	48,815	  	 	$	—	  	 	$	—	  	 	$	44,027	  	 	$	4,788	  	
						
Accrued benefit liability	  	 	(114,790	) 	 	 	(81,153	) 	 	 	(28,548	) 	 	 	—	  	 	 	(5,089	) 	
						
Accumulated other comprehensive (income) loss	  	 	132,253	  	 	 	110,860	  	 	 	4,872	  	 	 	(3,609	) 	 	 	20,130	  	

Net amount recognized	  	$	66,278	  	 	$	29,707	  	 	$	(23,676	) 	 	$	40,418	  	 	$	19,829	  	
	  	 	 	 	
Aggregated accumulated benefit obligations for all plans were $589.2 million and $556.6 million at October 31, 2011 and 2010, respectively. The $616.2 million projected benefit obligation consists of $345.5 million related to the United States pension and $270.7 million related to the non-United States pensions. The $540.3 million fair value of pension assets consists of $263.0 million related to the United States pension and $277.3 related to the non-United States pensions. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $388.8 million, $366.4 million and $273.7 million, respectively, as of October 31, 2011.
Pension plan contributions totaled $32.6 million, $23.0 million, and $15.9 million during 2011, 2010 and 2009, respectively. Contributions during 2012 are expected to be approximately $25.4 million. The Company expects to record an amortization loss of $11.3 million which is recorded in other comprehensive losses on the balance sheet.
The following table presents the fair value measurements for the pension assets:
As of October 31, 2011 (Dollars in thousands)
																	
 	  	Fair Value Measurement	 	  	 	 	
Asset Category	  	Level 1	 	  	Level 2	 	  	Level 3	 	  	Total	 	
Equity securities	  	$	83,854	  	  	$	144,255	  	  	$	—	  	  	$	228,109	  	
					
Debt securities	  	 	74,438	  	  	 	106,288	  	  	 	—	  	  	 	180,726	  	
					
Other	  	 	—	  	  	 	131,453	  	  	 	—	  	  	 	131,453	  	

Total	  	$	158,292	  	  	$	381,996	  	  	$	—	  	  	$	540,288	  	
	  	 	 	 	
As of October 31, 2010 (Dollars in thousands)

 	  	Fair Value Measurement	 	  	 	 	
Asset Category	  	Level 1	 	  	Level 2	 	  	Level 3	 	  	Total	 	
Equity securities	  	$	154,190	  	  	$	134,057	  	  	$	—	  	  	$	288,247	  	
					
Debt securities	  	 	—	  	  	 	87,504	  	  	 	—	  	  	 	87,504	  	
					
Other	  	 	—	  	  	 	138,977	  	  				  	 	138,977	  	

Total	  	$	154,190	  	  	$	360,538	  	  	$	—	  	  	$	514,728	  	

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The Company’s weighted average asset allocations at the measurement date and the target asset allocations by category are as follows:
									
Asset Category	  	2011 Actual	 	 	Target	 	
Equity securities	  	 	42	% 	 	 	41	% 	
			
Debt securities	  	 	34	% 	 	 	35	% 	
			
Other	  	 	24	% 	 	 	24	% 	

Total	  	 	100	% 	 	 	100	% 	
	  	 	 	 	
The investment policy reflects the long-term nature of the plans’ funding obligations. The assets are invested to provide the opportunity for both income and growth of principal. This objective is pursued as a long-term goal designed to provide required benefits for participants without undue risk. It is expected that this objective can be achieved through a well-diversified asset portfolio. All equity investments are made within the guidelines of quality, marketability and diversification mandated by the Employee Retirement Income Security Act and other relevant statutes. Investment managers are directed to maintain equity portfolios at a risk level approximately equivalent to that of the specific benchmark established for that portfolio.
Future benefit payments, which reflect expected future service, as appropriate, during the next five years, and in the aggregate for the five years thereafter, are as follows (Dollars in thousands):
					
Year	  	Expected
benefit
payments	 	
2012	  	$	27,744	  	
		
2013	  	$	28,626	  	
		
2014	  	$	30,202	  	
		
2015	  	$	31,191	  	
		
2016	  	$	31,892	  	
		
2017-2021	  	$	183,863	  	
The Company has several voluntary 401(k) savings plans that cover eligible employees. For certain plans, the Company matches a percentage of each employee’s contribution up to a maximum percentage of base salary. Company contributions to the 401(k) plans were $3.6 million in 2011, $2.9 million in 2010 and $1.7 million in 2009. For 2009 and in response to the current economic situation, contributions by the Company for employees accruing benefits in the 401(k) plans were suspended except for those participants not eligible to participate in the defined benefit pension plan or where contractually prohibited. New employees will continue to receive the Company contribution. For 2010 and 2011, the Company had reinstituted an employer match program.
Postretirement Health Care and Life Insurance Benefits
The Company has certain postretirement health and life insurance benefit plans in the United States and South Africa. The Company uses a measurement date of October 31 for its postretirement benefit plans.
In conjunction with a prior acquisition of the industrial containers business from Sonoco Products Company (“Sonoco”) in 1998, the Company assumed an obligation to reimburse Sonoco for its actual costs incurred in providing postretirement health care benefits to certain employees. Contributions by the Company are limited to an aggregate annual payment of $1.4 million for eligible employees at the date of purchase. Further, the Company is responsible for the cost of certain union hourly employees who were not eligible at the date of closing. The Company intends to fund these benefits from its operations.
 
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The components of net periodic cost for the postretirement benefits include the following (Dollars in thousands):
													
For the years ended October 31,	  	2011	 	  	2010	 	  	2009	 	
Service cost	  	$	22	  	  	$	19	  	  	$	21	  	
				
Interest cost	  	 	1,228	  	  	 	1,565	  	  	 	1,896	  	
				
Amortization of prior service cost	  	 	(1,656)	  	  	 	(1,329)	  	  	 	(1,308)	  	
				
Recognized net actuarial loss (gain)	  	 	(71)	  	  	 	(58)	  	  	 	(195)	  	

	  	$	(477)	  	  	$	197	  	  	$	414	  	
	  	 	 	 	
The following table sets forth the plans’ change in benefit obligation, change in plan assets and amounts recognized in the consolidated financial statements (Dollars in thousands):
									
   	  	October 31,
2011	 	 	October 31,
2010	 	
Benefit obligation at beginning of year	  	$	21,555	  	 	$	25,396	  	
			
Service cost	  	 	22	  	 	 	19	  	
			
Interest cost	  	 	1,228	  	 	 	1,565	  	
			
Actuarial loss	  	 	823	  	 	 	85	  	
			
Foreign currency effect	  	 	(525	) 	 	 	237	  	
			
Plan amendments	  	 	—	  	 	 	(3,215	) 	
			
Benefits paid	  	 	(2,323	) 	 	 	(2,532	) 	

Benefit obligation at end of year	  	$	20,780	  	 	$	21,555	  	

Funded status	  	$	(20,780	) 	 	$	(21,555	) 	
			
Unrecognized net actuarial loss	  	 	(1,106	) 	 	 	(2,075	) 	
			
Unrecognized prior service credit	  	 	(12,419	) 	 	 	(14,255	) 	

Net amount recognized	  	$	(34,305	) 	 	$	(37,885	) 	
	  	 	 	 	
The accumulated postretirement health and life insurance benefit obligation and fair value of plan assets for the international plan were $4.1 million and $0, respectively, as of October 31, 2011 compared to $4.4 million and $0, respectively, as of October 31, 2010.
The measurements assume a discount rate of 4.9% in the United States and 8.25% in South Africa. The health care cost trend rates on gross eligible charges are as follows:
					
   	  	Medical	 	
Current trend rate	  	 	7.6	% 	
		
Ultimate trend rate	  	 	5.1	% 	
		
Year ultimate trend rate reached	  	 	2018	  	
A one-percentage point change in assumed health care cost trend rates would have the following effects (Dollars in thousands):
									
   	  	1-Percentage-Point
Increase	 	  	1-Percentage-Point
Decrease	 	
Effect on total of service and interest cost components	  	$	62	  	  	$	(52	) 	
			
Effect on postretirement benefit obligation	  	$	708	  	  	$	(603	) 	
 
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Future benefit payments, which reflect expected future service, as appropriate, during the next five years, and in the aggregate for the five years thereafter, are as follows (Dollars in thousands):
					
Year	  	Expected
benefit
payments	 	
2012	  	$	2,765	  	
		
2013	  	$	2,091	  	
		
2014	  	$	1,982	  	
		
2015	  	$	1,890	  	
		
2016	  	$	1,795	  	
		
2017-2021	  	$	7,741	  	
 NOTE 14—CONTINGENT LIABILITIES AND ENVIRONMENTAL RESERVES
Litigation-related Liabilities
The Company may become involved from time-to-time in litigation and regulatory matters incidental to its business, including governmental investigations, enforcement actions, personal injury claims, product liability, employment health and safety matters, commercial disputes, intellectual property matters, disputes regarding environmental clean-up costs, litigation in connection with acquisitions and divestitures, and other matters arising out of the normal conduct of its business. The Company intends to vigorously defend itself in such litigation. The Company does not believe that the outcome of any pending litigation will have a material adverse effect on its consolidated financial statements.
The Company may accrue for contingencies related to litigation and regulatory matters if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions can occur, assessing contingencies is highly subjective and requires judgments about future events. The Company regularly reviews contingencies to determine whether its accruals are adequate. The amount of ultimate loss may differ from these estimates.
Environmental Reserves
As of October 31, 2011 and 2010, the Company had recorded liabilities of $29.3 million and $26.2 million, respectively, for estimated environmental remediation costs. The liabilities were recorded on an undiscounted basis and are included in other long-term liabilities. As of October 31, 2011 and 2010, the Company had recorded environmental liability reserves of $14.0 million and $14.5 million, respectively, for its blending facility in Chicago, Illinois; $9.5 million and $10.3 million, respectively, for our European drum facilities, and $4.2 million related to recent 2011 reconditioning company acquisitions. These reserves are principally based on environmental studies and cost estimates provided by third parties, but also take into account management estimates.
The environmental reserves recorded are based upon an evaluation of currently available facts with respect to each individual site, including the results of environmental studies and testing, and considering existing technology, presently enacted laws and regulations, and prior experience in remediation of contaminated sites. The Company initially provides for the estimated cost of environmental-related activities when costs can be reasonably estimated. If the best estimate of costs can only be identified as a range and no specific amount within that range can be determined more likely than any other amount within the range, the minimum of the range is accrued. The estimated liabilities are reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of relevant costs. For sites that involve formal actions subject to joint and several liability, these actions have formal agreements in place to apportion the liability.
The Company anticipates that cash expenditures in future periods for remediation costs at identified sites will be made over an extended period of time. Given the inherent uncertainties in evaluating environmental exposures, actual costs may vary from those estimated as of October 31, 2011. As of October 31, 2011 Greif estimated that payments for
 
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environmental remediation will be $8.5 million in 2012, $3.4 million in 2013, $1.5 million in 2014, $2.6 million in 2015, $1.7 million in 2016, and $11.6 million thereafter. The Company’s exposure to adverse developments with respect to any individual site is not expected to be material. Although environmental remediation could have a material effect on results of operations if a series of adverse developments occur in a particular quarter or year, the Company believes that the chance of a series of adverse developments occurring in the same quarter or year is remote. Future information and developments will require the Company to continually reassess the expected impact of these environmental matters.
 NOTE 15—EARNINGS PER SHARE
The Company has two classes of common stock and, as such, applies the “two-class method” of computing earnings per share (“EPS”) as prescribed in ASC 260, “Earnings Per Share.” In accordance with this guidance, earnings are allocated first to Class A and Class B Common Stock to the extent that dividends are actually paid and the remainder allocated assuming all of the earnings for the period have been distributed in the form of dividends.
The Company calculates Class A EPS as follows: (i) multiply 40 percent times the average Class A shares outstanding, then divide that amount by the product of 40 percent of the average Class A shares outstanding plus 60 percent of the average Class B shares outstanding to get a percentage, (ii) undistributed net income divided by the average Class A shares outstanding, (iii) multiply item (i) by item (ii), (iv) add item (iii) to the Class A cash dividend. Diluted shares are factored into the Class A calculation.
The Company calculates Class B EPS as follows: (i) multiply 60 percent times the average Class B shares outstanding, then divide that amount by the product of 40 percent of the average Class A shares outstanding plus 60 percent of the average Class B shares outstanding to get a percentage, (ii) undistributed net income divided by the average Class B shares outstanding, (iii) multiply item (i) by item (ii), (iv) add item (iii) to the Class B cash dividend. Class B diluted EPS is identical to Class B basic EPS.
The following table provides EPS information for each period, respectively:
													
(In millions except per share data)	  	2011	 	  	2010	 	  	2009	 	
Numerator	  				  				  				
				
Numerator for basic and diluted EPS—	  				  				  				
				
Net income attributable to Greif	  	$	176.0	  	  	$	210.0	  	  	$	110.6	  	
				
Cash dividends	  	 	97.8	  	  	 	93.1	  	  	 	88.0	  	

Undistributed net income attributable to Greif, Inc.	  	$	78.2	  	  	$	116.9	  	  	$	22.6	  	
				
Denominator	  				  				  				
				
Denominator for basic EPS—	  				  				  				
				
Class A common stock	  	 	24.9	  	  	 	24.7	  	  	 	24.3	  	
				
Class B common stock	  	 	22.3	  	  	 	22.4	  	  	 	22.5	  	
				
Denominator for diluted EPS—	  				  				  				
				
Class A common stock	  	 	25.0	  	  	 	25.0	  	  	 	24.6	  	
				
Class B common stock	  	 	22.3	  	  	 	22.4	  	  	 	22.5	  	
				
EPS Basic	  				  				  				
				
Class A common stock	  	$	3.02	  	  	$	3.60	  	  	$	1.91	  	
				
Class B common stock	  	$	4.52	  	  	$	5.40	  	  	$	2.86	  	
				
EPS Diluted	  				  				  				
				
Class A common stock	  	$	3.01	  	  	$	3.58	  	  	$	1.91	  	
				
Class B common stock	  	$	4.52	  	  	$	5.40	  	  	$	2.86	  	
 
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Class A Common Stock is entitled to cumulative dividends of one cent a share per year after which Class B Common Stock is entitled to non-cumulative dividends up to a half-cent a share per year. Further distribution in any year must be made in proportion of one cent a share for Class A Common Stock to one and a half cents a share for Class B Common Stock. The Class A Common Stock has no voting rights unless four quarterly cumulative dividends upon the Class A Common Stock are in arrears. The Class B Common Stock has full voting rights. There is no cumulative voting for the election of directors.
Common Stock Repurchases
The Company’s Board of Directors has authorized the purchase of up to four million shares of Class A Common Stock or Class B Common Stock or any combination of the foregoing. During 2011, the Company repurchased 8,700 shares of Class A Common Stock and 291,300 shares of Class B Common Stock (refer to Item 5 to this Form 10-K for additional information regarding these repurchases). As of October 31, 2011, the Company had repurchased 3,183,272 shares, including 1,425,452 shares of Class A Common Stock and 1,757,820 shares of Class B Common Stock, under this program. The total cost of the shares repurchased from November 1, 2008 through October 31, 2011 was $20.9 million.
The following table summarizes the Company’s Class A and Class B common and treasury shares at the specified dates:
																	
   	  	Authorized Shares	 	  	Issued Shares	 	  	Outstanding
Shares	 	  	Treasury Shares	 	
October 31, 2011:	  				  				  				  				
					
Class A Common Stock	  	 	128,000,000	  	  	 	42,281,920	  	  	 	24,972,029	  	  	 	17,309,891	  	
					
Class B Common Stock	  	 	69,120,000	  	  	 	34,560,000	  	  	 	22,120,966	  	  	 	12,439,034	  	
					
October 31, 2010:	  				  				  				  				
					
Class A Common Stock	  	 	128,000,000	  	  	 	42,281,920	  	  	 	24,756,974	  	  	 	17,524,946	  	
					
Class B Common Stock	  	 	69,120,000	  	  	 	34,560,000	  	  	 	22,412,266	  	  	 	12,147,734	  	
The following is a reconciliation of the shares used to calculate basic and diluted earnings per share:
													
For the years ended October 31,	  	2011	 	  	2010	 	  	2009	 	
Class A Common Stock:	  				  				  				
				
Basic shares	  	 	24,869,573	  	  	 	24,654,364	  	  	 	24,328,724	  	
				
Assumed conversion of stock options	  	 	174,869	  	  	 	304,712	  	  	 	311,259	  	

Diluted shares	  	 	25,044,442	  	  	 	24,959,076	  	  	 	24,639,983	  	

Class B Common Stock:	  				  				  				
				
Basic and diluted shares	  	 	22,349,844	  	  	 	22,445,322	  	  	 	22,475,707	  	
	  	 	 	 	
There were no stock options that were antidilutive for the years ended October 31, 2011, 2010, or 2009.
Dividends per Share
The Company pays quarterly dividends of varying amounts computed on the basis as described above. The annual dividends paid for the last two years are as follows:
2011 Dividends per Share - Class A $1.68; Class B $2.51
2010 Dividends per Share - Class A $1.60; Class B $2.39
 
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 NOTE 16—EQUITY EARNINGS (LOSSES) OF UNCONSOLIDATED AFFILIATES, NET OF TAX AND NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Equity earnings (losses) of unconsolidated affiliates, net of tax
Equity earnings (losses) of unconsolidated affiliates, net of tax represent the Company’s share of earnings of affiliates in which the Company does not exercise control and has a 20 percent or more voting interest. Investments in such affiliates are accounted for using the equity method of accounting. If the fair value of an investment in an affiliate is below its carrying value and the difference is deemed to be other than temporary, the difference between the fair value and the carrying value is charged to earnings. The Company has an equity interest in seven affiliates. Equity earnings (losses) of unconsolidated affiliates, net of tax for 2011, 2010 and 2009 were $4.8 million, $3.5 million and ($0.4) million, respectively.
The Company received dividends from our equity method affiliates of $0.2 million for the year ending October 31, 2011 and $0.5 million for the year ending October 31, 2009. There were no dividends received from the Company’s equity method affiliates for the year ended October 31, 2010. The Company has made loans to an entity deemed a VIE and accounted for as an unconsolidated equity investment. These loans bear interest at various interest rates. The original principal balance of these loans was $22.2 million due under various terms in 2016. As of October 31, 2011 these loans had an outstanding balance of $20.0 million.
Net income attributable to noncontrolling interests
Net income attributable to noncontrolling interests represent the portion of earnings or losses from the operations of the Company’s consolidated subsidiaries attributable to unrelated third party equity owners that were deducted from net income to arrive at net income attributable to the Company. One of the companies acquired in 2011 is a joint venture. The Company does not own 100 percent of this acquired company, and it is not a VIE. The Company does, however, exert control over this acquired company, and accordingly, the operations of this acquired company are consolidated with the Company’s operations. Noncontrolling interests from this acquisition were recorded for $25.9 million for the year ended October 31, 2011. Net income attributable to noncontrolling interests for the years ended October 31, 2011, 2010 and 2009 was $1.1 million, $5.5 million and $3.2 million, respectively.
 NOTE 17—BUSINESS SEGMENT INFORMATION
The Company operates in four business segments: Rigid Industrial Packaging & Services, Flexible Products & Services, Paper Packaging, and Land Management.
Operations in the Rigid Industrial Packaging & Services segment involve the production and sale of rigid industrial packaging products, such as steel, fibre and plastic drums, rigid intermediate bulk containers, closure systems for industrial packaging products, transit protection products, water bottles and reconditioned containers, and services, such as container life cycle services, blending, filling and other packaging services, logistics and warehousing. The Company’s rigid industrial packaging products are sold to customers in industries such as chemicals, paints and pigments, food and beverage, petroleum, industrial coatings, agricultural, pharmaceutical and mineral, among others.
Operations in the Flexible Products & Services segment involve the production and sale of flexible intermediate bulk containers and related services on a global basis and a North American provider of industrial and consumer shipping sacks and multiwall bag products. Our flexible intermediate bulk containers consist of a polypropylene-based woven fabric that is produced at our fully integrated production sites, as well as sourced from strategic regional suppliers. Our flexible products are sold to customers and in market segments similar to those of our Rigid Industrial Packaging & Services segment. Additionally, our flexible products significantly expand our presence in the agricultural and food industries, among others. Our industrial and consumer shipping sacks and multiwall bag products are used to ship a wide range of industrial and consumer products, such as seed, fertilizers, chemicals, concrete, flour, sugar, feed, pet foods, popcorn, charcoal and salt, primarily for the agricultural, chemical building products and food industries.
Operations in the Paper Packaging segment involve the production and sale of containerboard, corrugated sheets, corrugated containers and other corrugated products to customers in North America. The Company’s corrugated container products are used to ship such diverse products as home appliances, small machinery, grocery products,
 
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automotive components, books and furniture, as well as numerous other applications. Operations related to the Company’s industrial and consumer multiwall bag products were reclassified from this segment to the Flexible Products & Services segment in the first quarter of 2010.
Operations in the Land Management segment involve the management and sale of timber and special use properties from approximately 267,750 acres of timber properties in the southeastern United States, which are actively managed, and 14,700 acres of timber properties in Canada, which are not actively managed. The Company’s Land Management team is focused on the active harvesting and regeneration of our United States timber properties to achieve sustainable long-term yields. While timber sales are subject to fluctuations, the Company seeks to maintain a consistent cutting schedule, within the limits of market and weather conditions. The Company also sells, from time to time, timberland and special use properties, which consists of surplus properties, higher and better use properties, and development properties.
The following segment information is presented for each of the three years in the period ended October 31, 2011, except (Dollars in thousands):

   	  	2011	 	 	2010	 	  	2009	 	
Net sales:	  				 				  				
				
Rigid Industrial Packaging & Service	  	$	3,014,109	  	 	$	2,587,854	  	  	$	2,266,890	  	
				
Flexible Products & Services	  	 	537,993	  	 	 	233,119	  	  	 	43,975	  	
				
Paper Packaging	  	 	674,945	  	 	 	624,092	  	  	 	460,712	  	
				
Land Management	  	 	20,907	  	 	 	16,472	  	  	 	20,640	  	

Total net sales	  	$	4,247,954	  	 	$	3,461,537	  	  	$	2,792,217	  	

Operating profit:	  				 				  				
				
Operating profit, before the impact of restructuring charges, restructuring-related inventory charges and acquisition-related costs:	  				 				  				
				
Rigid Industrial Packaging & Service	  	$	261,800	  	 	$	291,066	  	  	$	210,908	  	
				
Flexible Products & Services	  	 	41,245	  	 	 	18,761	  	  	 	8,588	  	
				
Paper Packaging	  	 	74,385	  	 	 	60,640	  	  	 	35,526	  	
				
Land Management	  	 	19,045	  	 	 	9,001	  	  	 	22,237	  	

Total operating profit, before the impact of restructuring charges, restructuring-related inventory charges and acquisition-related costs:	  	 	396,475	  	 	 	379,468	  	  	 	277,259	  	
				
Restructuring charges:	  				 				  				
				
Rigid Industrial Packaging & Service	  	 	24,055	  	 	 	20,980	  	  	 	65,742	  	
				
Flexible Products & Services	  	 	6,898	  	 	 	624	  	  	 	—	  	
				
Paper Packaging	  	 	(451	) 	 	 	5,142	  	  	 	685	  	
				
Land Management	  	 	(6	) 	 	 	—	  	  	 	163	  	

Total restructuring charges	  	 	30,496	  	 	 	26,746	  	  	 	66,590	  	

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   	  	2011	 	  	2010	 	 	2009	 	
				
Restructuring-related inventory charges:	  				  				 				
				
Rigid Industrial Packaging	  	 	—	  	  	 	131	  	 	 	10,772	  	
				
Total inventory-related restructuring charges	  	 	—	  	  	 	131	  	 	 	10,772	  	
				
Acquisition-related costs:	  				  				 				
				
Rigid Industrial Packaging & Service	  	 	9,872	  	  	 	7,672	  	 	 	—	  	
				
Flexible Products & Services	  	 	14,513	  	  	 	19,504	  	 	 	—	  	

Total acquisition-related costs	  	 	24,385	  	  	 	27,176	  	 	 	—	  	
				
Non-cash asset impairment charges:	  				  				 				
				
Rigid Industrial Packaging & Service	  	 	1,547	  	  	 	—	  	 	 	—	  	
				
Flexible Products & Services	  	 	2,962	  	  	 	—	  	 	 	—	  	

Total non-cash asset impairment charges	  	 	4,509	  	  	 	—	  	 	 	—	  	
				
Operating profit:	  				  				 				
				
Rigid Industrial Packaging	  	 	226,326	  	  	 	262,283	  	 	 	134,394	  	
				
Flexible Products & Services	  	 	16,872	  	  	 	(1,367	) 	 	 	8,588	  	
				
Paper Packaging	  	 	74,836	  	  	 	55,498	  	 	 	34,841	  	
				
Land Management	  	 	19,051	  	  	 	9,001	  	 	 	22,074	  	

Total operating profit	  	$	337,085	  	  	$	325,415	  	 	$	199,897	  	

													
   	  	2011	 	  	2010	 	  	2009	 	
Assets:	  				  				  				
				
Rigid Industrial Packaging & Services	  	$	2,738,182	  	  	$	2,058,165	  	  	$	1,783,821	  	
				
Flexible Products & Services	  	 	383,507	  	  	 	353,715	  	  	 	15,296	  	
				
Paper Packaging	  	 	420,370	  	  	 	435,555	  	  	 	402,787	  	
				
Land Management	  	 	280,141	  	  	 	274,352	  	  	 	254,856	  	

Total segment	  	 	3,822,200	  	  	 	3,121,787	  	  	 	2,456,760	  	
				
Corporate and other	  	 	385,082	  	  	 	376,658	  	  	 	367,169	  	

Total assets	  	$	4,207,282	  	  	$	3,498,445	  	  	$	2,823,929	  	

Depreciation, depletion and amortization expense:	  				  				  				
				
Rigid Industrial Packaging & Services	  	$	93,023	  	  	$	79,050	  	  	$	73,212	  	
				
Flexible Products & Services	  	 	16,537	  	  	 	4,937	  	  	 	794	  	
				
Paper Packaging	  	 	31,622	  	  	 	29,204	  	  	 	25,517	  	
				
Land Management	  	 	3,009	  	  	 	2,783	  	  	 	3,104	  	

Total depreciation, depletion and amortization expense	  	$	144,191	  	  	$	115,974	  	  	$	102,627	  	

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The following geographic information is presented for each of the three years in the period ended October 31, 2011, (Dollars in thousands):
													
   	  	2011	 	  	2010	 	  	2009	 	
Net Sales	  				  				  				
				
North America	  	$	1,932,837	  	  	$	1,732,880	  	  	$	1,530,438	  	
				
Europe, Middle East, and Africa	  	 	1,645,577	  	  	 	1,171,363	  	  	 	835,117	  	
				
Asia Pacific and Latin America	  	 	669,540	  	  	 	557,294	  	  	 	426,662	  	

Total net sales	  	$	4,247,954	  	  	$	3,461,537	  	  	$	2,792,217	  	
	  	 	 	 	
The following table presents total assets by geographic region (Dollars in thousands):
									
   	  	2011	 	  	2010	 	
Assets:	  				  				
			
North America	  	$	1,779,475	  	  	$	1,895,475	  	
			
Europe, Middle East, and Africa	  	 	1,750,352	  	  	 	1,012,131	  	
			
Asia Pacific and Latin America	  	 	677,455	  	  	 	590,839	  	

Total assets	  	$	4,207,282	  	  	$	3,498,445	  	

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 NOTE 18—QUARTERLY FINANCIAL DATA (UNAUDITED)
The quarterly results of operations for 2011 and 2010 are shown below (Dollars in thousands, except per share amounts):
																	
2011	  	January 31	 	  	April 30	 	  	July 31	 	  	October 31	 	
					
Net sales	  	$	943,792	  	  	$	1,050,766	  	  	$	1,121,902	  	  	$	1,131,494	  	
					
Gross profit	  	$	176,085	  	  	$	207,354	  	  	$	211,331	  	  	$	206,355	  	
					
Net income (1)	  	$	41,097	  	  	$	50,591	  	  	$	64,974	  	  	$	20,512	  	
					
Net income attributable to Greif, Inc. (1)	  	$	41,441	  	  	$	50,884	  	  	$	62,940	  	  	$	20,775	  	
					
Earnings per share	  				  				  				  				
					
Basic:	  				  				  				  				
					
Class A Common Stock	  	$	0.71	  	  	$	0.87	  	  	$	1.08	  	  	$	0.36	  	
					
Class B Common Stock	  	$	1.06	  	  	$	1.31	  	  	$	1.61	  	  	$	0.53	  	
					
Diluted:	  				  				  				  				
					
Class A Common Stock	  	$	0.71	  	  	$	0.87	  	  	$	1.07	  	  	$	0.36	  	
					
Class B Common Stock	  	$	1.06	  	  	$	1.31	  	  	$	1.61	  	  	$	0.53	  	
					
Earnings per share were calculated using the following number of shares:	  				  				  				  				
					
Basic:	  				  				  				  				
					
Class A Common Stock	  	 	24,787,857	  	  	 	24,825,768	  	  	 	24,897,665	  	  	 	24,967,000	  	
					
Class B Common Stock	  	 	22,412,266	  	  	 	22,385,922	  	  	 	22,362,266	  	  	 	22,238,920	  	
					
Diluted:	  				  				  				  				
					
Class A Common Stock	  	 	25,062,556	  	  	 	25,106,844	  	  	 	25,100,003	  	  	 	25,069,409	  	
					
Class B Common Stock	  	 	22,412,266	  	  	 	22,385,922	  	  	 	22,362,266	  	  	 	22,238,920	  	
					
Market price (Class A Common Stock):	  				  				  				  				
					
High	  	$	65.76	  	  	$	67.02	  	  	$	67.57	  	  	$	61.73	  	
					
Low	  	$	57.81	  	  	$	60.67	  	  	$	60.53	  	  	$	40.77	  	
					
Close	  	$	63.05	  	  	$	62.10	  	  	$	61.05	  	  	$	44.78	  	
					
Market price (Class B Common Stock):	  				  				  				  				
					
High	  	$	63.00	  	  	$	62.85	  	  	$	62.50	  	  	$	58.61	  	
					
Low	  	$	56.75	  	  	$	57.96	  	  	$	57.84	  	  	$	40.55	  	
					
Close	  	$	60.45	  	  	$	58.21	  	  	$	58.33	  	  	$	45.60	  	

(1)	We recorded the following significant transactions during the fourth quarter of 2011: (i) restructuring charges of $19.1 million and (ii) acquisition-related charges of $5.2 million. Refer to Form 10-Q filings, as previously filed with the SEC, for prior quarter significant transactions or trends.	
 
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2010	  	January 31	 	  	April 30	 	  	July 31	 	  	October 31	 	
Net sales	  	$	709,682	  	  	$	836,580	  	  	$	921,333	  	  	$	993,942	  	
					
Gross profit	  	$	137,712	  	  	$	168,516	  	  	$	191,039	  	  	$	206,395	  	
					
Net income(1)	  	$	26,231	  	  	$	44,832	  	  	$	67,759	  	  	$	76,635	  	
					
Net income attributable to Greif, Inc.(1)	  	$	24,819	  	  	$	42,634	  	  	$	65,975	  	  	$	76,557	  	
					
Earnings per share	  				  				  				  				
					
Basic:	  				  				  				  				
					
Class A Common Stock	  	$	0.43	  	  	$	0.73	  	  	$	1.13	  	  	$	1.31	  	
					
Class B Common Stock	  	$	0.63	  	  	$	1.10	  	  	$	1.70	  	  	$	1.97	  	
					
Diluted:	  				  				  				  				
					
Class A Common Stock	  	$	0.43	  	  	$	0.73	  	  	$	1.12	  	  	$	1.30	  	
					
Class B Common Stock	  	$	0.63	  	  	$	1.10	  	  	$	1.70	  	  	$	1.97	  	
					
Earnings per share were calculated using the following number of shares:	  				  				  				  				
					
Basic:	  				  				  				  				
					
Class A Common Stock	  	 	24,545,131	  	  	 	24,637,648	  	  	 	24,687,006	  	  	 	24,747,669	  	
					
Class B Common Stock	  	 	22,462,266	  	  	 	22,462,266	  	  	 	22,444,488	  	  	 	22,412,266	  	
					
Diluted:	  				  				  				  				
					
Class A Common Stock	  	 	24,907,553	  	  	 	25,008,915	  	  	 	24,999,901	  	  	 	25,078,601	  	
					
Class B Common Stock	  	 	22,462,266	  	  	 	22,462,266	  	  	 	22,444,488	  	  	 	22,412,266	  	
					
Market price (Class A Common Stock):	  				  				  				  				
					
High	  	$	59.31	  	  	$	61.02	  	  	$	60.84	  	  	$	61.31	  	
					
Low	  	$	48.36	  	  	$	46.01	  	  	$	50.00	  	  	$	54.90	  	
					
Close	  	$	48.36	  	  	$	59.18	  	  	$	59.63	  	  	$	58.74	  	
					
Market price (Class B Common Stock):	  				  				  				  				
					
High	  	$	53.42	  	  	$	57.80	  	  	$	57.75	  	  	$	58.99	  	
					
Low	  	$	45.20	  	  	$	45.62	  	  	$	47.00	  	  	$	52.87	  	
					
Close	  	$	48.59	  	  	$	57.00	  	  	$	57.35	  	  	$	58.00	  	

(1)	We recorded the following significant transactions during the fourth quarter of 2010: (i) restructuring charges of $6.2 million and (ii) acquisition-related charges of $7.1 million. Refer to Form 10-Q filings, as previously filed with the SEC, for prior quarter significant transactions or trends.	
Shares of the Company’s Class A Common Stock and Class B Common Stock are listed on the New York Stock Exchange where the symbols are GEF and GEF.B, respectively.
As of December 9, 2011, there were 423 stockholders of record of the Class A Common Stock and 104 stockholders of record of the Class B Common Stock.
 NOTE 19—CORRECTION OF ERRORS AND RESTATEMENT
In the fourth quarter of 2011, the Company corrected a prior period error related to the incorrect balance sheet elimination of certain intercompany balances occurring in 2003. The effect of the error impacted both foreign currency translation within other comprehensive income (loss), which had been overstated by $19.6 million, and accounts payable, which had been understated by $19.6 million. The Company has corrected the error for all periods presented by restating the consolidated statements of changes in shareholders’ equity and the consolidated balance sheets. The correction of the error did not impact total assets, consolidated net income, or cash flows
 
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During the third quarter of 2011, the Company recorded an out-of-period correction of an error in both noncontrolling interest, which had been understated by $24.7 million, and foreign currency translation within other comprehensive income (loss), which had been overstated by $24.7 million, as of October 31, 2010. Since the Company restated its consolidated financial statements for the intercompany error noted above, the consolidated balance sheet as of October 31, 2010 and the consolidated statements of changes in shareholders’ equity have also been restated to reflect this correction as of October 31, 2010. The correction of the error did not impact total assets, consolidated net income, or cash flows.
The following are the previously stated and corrected balances on the consolidated balance sheets as of October 31, 2009 and 2010:
													
 	  	October 31, 2009	 	
Consolidated Balance Sheet	  	As Previously
Reported	 	 	Correction	 	 	As Restated	 	
Current liabilities	  				 				 				
				
Accounts payable	  	 	335,816	  	 	 	19,547	  	 	 	355,363	  	
				
Current liabilities	  	 	562,097	  	 	 	19,547	  	 	 	581,644	  	
				
Shareholders’ equity	  				 				 				
				
Accumulated other comprehensive income (loss):	  				 				 				
				
Foreign currency translation	  	 	(6,825	) 	 	 	(19,547	) 	 	 	(26,372	) 	
				
Other comprehensive loss	  	 	(88,246	) 	 	 	(19,547	) 	 	 	(107,793	) 	
				
Noncontrolling interests	  	 	6,997	  	 	 	—	  	 	 	6,997	  	
				
Total shareholders’ equity	  	 	1,106,592	  	 	 	(19,547	) 	 	 	1,087,045	  	

Total liabilities and shareholders’ equity	  	 	2,823,929	  	 	 	—	  	 	 	2,823,929	  	

 	  	October 31, 2010	 	
Consolidated Balance Sheet	  	As Previously
Reported	 	 	Correction	 	 	As Restated	 	
Current Liabilities	  				 				 				
				
Accounts payable	  	 	448,310	  	 	 	19,547	  	 	 	467,857	  	
				
Current liabilities	  	 	761,811	  	 	 	19,547	  	 	 	781,358	  	
				
Shareholders’ equity	  				 				 				
				
Accumulated other comprehensive income (loss):	  				 				 				
				
Foreign currency translation	  	 	44,612	  	 	 	(44,224	) 	 	 	388	  	
				
Other comprehensive loss	  	 	(33,419	) 	 	 	(44,224	) 	 	 	(77,643	) 	
				
Noncontrolling interests	  	 	76,711	  	 	 	24,677	  	 	 	101,388	  	
				
Total shareholders’ equity	  	 	1,355,432	  	 	 	(19,547	) 	 	 	1,335,885	  	

Total liabilities and shareholders’ equity	  	 	3,498,445	  	 	 	—	  	 	 	3,498,445	  	

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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of Greif, Inc.
We have audited the accompanying consolidated balance sheets of Greif, Inc. and subsidiaries as of October 31, 2011 and 2010, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended October 31, 2011. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Greif, Inc. and subsidiaries at October 31, 2011 and 2010, and the consolidated results of their operations and their cash flows for each of the three years in the period ended October 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
As discussed in Note 19 to the consolidated financial statements, the Company has restated the October 31, 2010 and 2009 consolidated financial statements.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Greif Inc.’s internal control over financial reporting as of October 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated December 16, 2011 expressed an unqualified opinion thereon.
/s/ Ernst & Young, LLP
Columbus, Ohio
December 16, 2011
 
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 ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES	
None.
 
 ITEM 9A.	CONTROLS AND PROCEDURES	
Disclosure Controls and Procedures
With the participation of our principal executive officer and principal financial officer, our management has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that, as of the end of the period covered by this report:
 
 	•	 	Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission;	
 
 	•	 	Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure; and	
 
 	•	 	Our disclosure controls and procedures are effective.	
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting
Management’s annual report on internal control over financial reporting required by Item 308(a) of Regulation S-K follows. The report of the independent registered public accounting firm required by Item 308(b) of Regulation S-K is found under the caption “Report of Independent Registered Public Accounting Firm” below.
The following report is provided by our management on our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act):
 
 	1.	Our management is responsible for establishing and maintaining adequate internal control over our financial reporting as such term is defined in Exchange Act Rule 13a-15(f).	
 
 	2.	Our management has used the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework to evaluate the effectiveness of our internal control over financial reporting. Management believes that the COSO framework is a suitable framework for its evaluation of our internal control over financial reporting because it is free from bias, permits reasonably qualitative and quantitative measurements of our internal controls, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal controls are not omitted and is relevant to an evaluation of internal control over financial reporting.	
 
 	3.	Management has assessed the effectiveness of our internal control over financial reporting as of October 31, 2011, and has concluded that such internal control over financial reporting is effective. There are no material weaknesses in our internal control over financial reporting that have been identified by management.	
 
 	4.	This assessment excluded the internal control over financial reporting of four European companies acquired in February, May, July and August; two joint ventures entered into in February and August in North America and Asia Pacific, respectively; and the acquisition of additional shares of a company in North America that was	
 
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 	a consolidated subsidiary as of October 31, 2011, which are included in the 2011 Consolidated Financial Statements of Greif, Inc. and subsidiaries, and constituted total assets and net sales of 0.7% and 0.2%, respectively, for the first European company, 0.0% and 0.0%, respectively, for the North American joint venture which is accounted for under the equity method of accounting, 0.6% and 0.4%, respectively, for the second European company, 6.3% and 1.2%, respectively, for the third European company, 5.7% and 0.8%, respectively, for the fourth European company, 0.2% and 0.4%, respectively, for the Asia Pacific joint venture and 0.4% and 0.0% for the acquisition of additional shares of a company in North American company, of the Company’s consolidated financial statements as of and for the year ended October 31, 2011.	
Our internal control over financial reporting as of October 31, 2011, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which follows below.
 
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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of
Greif, Inc.
We have audited Greif, Inc. and subsidiaries’ internal control over financial reporting as of October 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Greif, Inc. and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Greif, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of October 31, 2011, based on the COSO criteria.
As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of four European companies acquired in February 2011, May 2011, July 2011 and August 2011, two joint ventures entered into in February 2011 and August 2011 in North America and Asia Pacific, respectively, and the acquisition of additional shares of a company in North America that was a consolidated subsidiary as of October 31, 2011, which are included in the 2011 Consolidated Financial Statements of Greif, Inc. and subsidiaries, and constituted total assets and net sales of 0.7% and 0.2%, respectively, for the first European company, 0.6% and 0.4%, respectively, for the second European company, 6.3% and 1.2%, respectively, for the third European company, 5.7% and 0.8%, respectively, for the fourth European company, 0.0% and 0.0%, respectively, for the North American joint venture which is accounted for under the equity method of accounting, 0.2% and 0.4%, respectively, for the Asia Pacific joint venture and 0.4% and 0.0% for the acquisition of additional shares of a company in a North American company, of the Company’s consolidated financial statements as of and for the year ended October 31, 2011. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of the acquired operations referred to above.
 
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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Greif, Inc. and subsidiaries as of October 31, 2011 and 2010 and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended October 31, 2011 of Greif, Inc. and subsidiaries and schedule and our report dated December 16, 2011 expressed an unqualified opinion thereon.
/s/  Ernst & Young, LLP
Columbus, Ohio
December 16, 2011
 
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 ITEM 9B. OTHER INFORMATION
None.
 PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information regarding our directors required by Items 401(a) and (d)-(f) of Regulation S-K will be found under the caption “Proposal Number 1—Election of Directors” in the 2012 Proxy Statement, which information is incorporated herein by reference. Information regarding our executive officers required by Items 401(b) and (d)-(f) of Regulation S-K will be contained under the caption “Executive Officers of the Company” in the 2012 Proxy Statement, which information is incorporated herein by reference.
We have a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. As of the date of this filing, the members of the Audit Committee were Vicki L. Avril, John F. Finn, Bruce A. Edwards and John W. McNamara. Ms. Avril is Chairperson of the Audit Committee. Our Board of Directors has determined that Ms. Avril is an “audit committee financial expert,” as that term is defined in Item 401(h)(2) of Regulation S-K, and “independent,” as that term is defined in Rule 10A-3 of the Exchange Act.
Information regarding the filing of reports of ownership under Section 16(a) of the Exchange Act by our officers and directors and persons owning more than 10 percent of a registered class of our equity securities required by Item 405 of Regulation S-K will be found under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2012 Proxy Statement, which information is incorporated herein by reference.
Information concerning the procedures by which stockholders may recommend nominees to our Board of Directors will be found under the caption “Corporate Governance—Nomination of Directors” in the 2012 Proxy Statement. There has been no material change to the nomination procedures we previously disclosed in the proxy statement for our 2011 annual meeting of stockholders.
Our Board of Directors has adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, controller, and persons performing similar functions. This code of ethics is posted on our Internet Web site at www.greif.com under “Investor Center—Corporate Governance.” Copies of this code of ethics are also available to any person, without charge, by making a written request to us. Requests should be directed to Greif, Inc., Attention: Corporate Secretary, 425 Winter Road, Delaware, Ohio 43015. Any amendment (other than any technical, administrative or other non-substantive amendment) to, or waiver from, a provision of this code will be posted on our website described above within four business days following its occurrence.
 ITEM 11. EXECUTIVE COMPENSATION
The 2012 Proxy Statement will contain information regarding the following matters: information regarding executive compensation required by Item 402 of Regulation S-K will be found under the caption “Compensation Discussion and Analysis”; information required by Item 407(e)(4) of Regulation S-K will be found under the caption “Compensation Committee Interlocks and Insider Participation”; information required by Item 407(e)(5) of Regulation S-K will be found under the caption “Compensation Committee Report.” This information is incorporated herein by reference.
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information regarding security ownership of certain beneficial owners and management required by Item 403 of Regulation S-K will be found under the caption “Security Ownership of Certain Beneficial Owners and Management” in the 2012 Proxy Statement, which information is incorporated herein by reference.
 
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Information regarding equity compensation plan information required by Item 201(d) of Regulation S-K will be found under the caption “Elements of Compensation” in the 2012 Proxy Statement, which information is incorporated herein by reference.
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information regarding certain relationships and related transactions required by Item 404 of Regulation S-K will be found under the caption “Certain Relationships and Related Transactions” in the 2012 Proxy Statement, which information is incorporated herein by reference.
Information regarding the independence of our directors required by Item 407(a) of Regulation S-K will be found under the caption “Corporate Governance—Director Independence” in the 2012 Proxy Statement, which information is incorporated herein by reference.
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information regarding principal accounting fees and services required by Item 9(e) of Schedule 14A will be found under the caption “Independent Auditor Fee Information” in the 2012 Proxy Statement, which information is incorporated herein by reference.
 PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT INDEX

Exhibit
No.	  	Description of Exhibit	  	If Incorporated by Reference,
Document with which Exhibit was Previously Filed with SEC	
3(a)	  	Amended and Restated Certificate of Incorporation of Greif, Inc.	  	Annual Report on Form 10-K for the fiscal year ended October 31, 1997, File No. 001-00566 (see Exhibit 3(a) therein).	
			
3(b)	  	Amendment to Amended and Restated Certificate of Incorporation of Greif, Inc.	  	Definitive Proxy Statement on Form 14A dated January 27, 2003, File No. 001-00566 (see Exhibit A therein).	
			
3(c)	  	Amendment to Amended and Restated Certificate of Incorporation of Greif, Inc.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007, File No. 001-00566 (see Exhibit 3.1 therein).	
			
3(d)	  	Second Amended and Restated By-Laws of Greif, Inc.	  	Current Report on Form 8-K dated August 29, 2008,
File No. 001-00566 (see Exhibit 99.2 therein)	
			
3(e)	  	Amendment of Second Amended and Restated By-Laws of Greif, Inc. (effective November 1, 2011).	  	Current Report on Form 8-K dated November 2, 2011,
File No. 001-00566 (see Exhibit 99.2 therein)	
			
4(a)	  	Indenture dated as of February 9, 2007, among Greif, Inc., as Issuer, and U.S. Bank National Association, as Trustee, regarding 6-3/4% Senior Notes due 2017	  	Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2007, File No. 001-00566 (see Exhibit 4.2 therein).	
			
4(b)	  	Indenture dated as of July 28, 2009, among Greif, Inc., as Issuer, and U.S. Bank National Association, as Trustee, regarding 7-3/4% Senior Notes due 2019	  	Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2009, File No. 001-00566 (see Exhibit 4(b) therein).	
			
4(c)	  	Indenture dated as of July 15, 2011, among Greif Luxembourg Finance S.C.A., as Issuer, Greif, Inc. as Guarantor, The Bank of New York Mellon, as Trustee and Principal Paying Agent, and The Bank of New York Mellon (Luxembourg) S.A., as Transfer Agent, Registrar and Luxembourg Paying Agent, regarding 7.375% Senior Notes due 2021	  	Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2011, File No. 001-00566 (see Exhibit 99.3 therein).	
			
10(a)*	  	Greif, Inc. Directors’ Stock Option Plan.	  	Registration Statement on Form S-8, File No.
333-26977 (see Exhibit 4(b) therein).	
 
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Exhibit
No.	  	Description of Exhibit	  	If Incorporated by Reference,
Document with which Exhibit was Previously Filed with SEC	
10(b)*	  	Greif, Inc. Incentive Stock Option Plan, as Amended and Restated.	  	Annual Report on Form 10-K for the fiscal year ended October 31, 1997, File No. 001-00566 (see Exhibit 10(b) therein).	
			
10(c)*	  	Greif, Inc. Amended and Restated Directors’ Deferred Compensation Plan.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2006, File No. 001-00566 (see Exhibit 10.2 therein).	
			
10(d)*	  	Employment Agreement between Michael J. Gasser and Greif, Inc.	  	Annual Report on Form 10-K for the fiscal year ended October 31, 1998, File No. 001-00566 (see Exhibit 10(d) therein).	
			
10(e)*	  	Supplemental Retirement Benefit Agreement.	  	Annual Report on Form 10-K for the fiscal year ended October 31, 1999, File No. 001-00566 (see Exhibit 10(i) therein).	
			
10(f)*	  	Second Amended and Restated Supplemental Executive Retirement Plan.	  	Annual Report on Form 10-K for fiscal year ended October 31, 2007, File No. 001-00566 (see Exhibit 10(f) therein).	
			
10(g)*	  	Greif, Inc. Amended and Restated Long-Term Incentive Plan.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2006, File No. 001-00566 (see Exhibit 10.1 therein).	
			
10(h)*	  	Greif, Inc. Performance-Based Incentive Compensation Plan.	  	Definitive Proxy Statement on Form 14A dated January 25, 2002, File No. 001-00566 (see Exhibit B therein).	
			
10(i)*	  	Amendment No. 1 to Greif, Inc. Performance-Based Incentive Compensation Plan	  	Included herein.	
			
10(j)*	  	Greif, Inc. 2001 Management Equity Incentive and Compensation Plan.	  	Definitive Proxy Statement on Form DEF 14A dated January 26, 2001, File No. 001-00566 (see Exhibit A therein).	
			
10(k)*	  	Amendment No. 1 to Greif, Inc. 2001 Management Equity Incentive and Compensation Plan	  	Included herein.	
			
10(l)*	  	Greif, Inc. 2000 Nonstatutory Stock Option Plan.	  	Registration Statement on Form S-8,
File No. 333-61058 (see Exhibit 4(c) therein).	
			
10(m)*	  	2005 Outside Directors Equity Award Plan	  	Definitive Proxy Statement on Form DEF 14A,
File No. 001-00566, filed with the Securities and Exchange Commission on January 21, 2005 (see Exhibit A therein).	
			
10(n)*	  	Form of Stock Option Award Agreement for the 2005 Outside Directors Equity Award Plan of Greif, Inc.	  	Registration Statement on Form S-8,
File No. 333-123133 (see Exhibit 4(c) therein).	
			
10(o)*	  	Form of Restricted Share Award Agreement for the 2005 Outside Directors Equity Award Plan of Greif, Inc.	  	Registration Statement on Form S-8,
File No. 333-123133 (see Exhibit 4(d) therein).	
			
10(p)*	  	Greif, Inc. Nonqualified Deferred Compensation Plan	  	Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2008, File No. 001-00566 (see Exhibit 10.CC therein).	
			
10(q)*	  	Restricted Share Award Agreement under the 2001 Management Equity Incentive and Compensation Plan dated June 10, 2011, with Robert M. McNutt	  	Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2011, File No. 001-00566 (see Exhibit 99.1 therein).	
			
10(r)	  	Amended and Restated Credit Agreement dated October 29, 2010 among Greif, Inc., Greif International Holding Supra C.V. and Greif International Holding B.V., as borrowers, with a syndicate of financial institutions, as lenders, Bank of America, N.A., as administrative agent, L/C issuer and swing line lender, Banc of America Securities LLC, J.P. Morgan Securities LLC, KeyBank National Association, Citizens Bank of Pennsylvania and Deutsche Bank Securities Inc., as joint lead arrangers and joint book managers, JPMorgan Chase Bank, N.A., as syndication agent, and KeyBank National Association, Citizens Bank of Pennsylvania, Deutsche Bank Securities Inc. and U.S. Bank National Association, as co-documentation agents, and Wells Fargo Bank, National Association and Fifth Third Bank, as managing agents.	  	Current Report on Form 8-K dated November 4, 2010,
File No. 001-00566 (see Exhibit 99.2 therein).	
 
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Exhibit
No.	  	Description of Exhibit	  	If Incorporated by Reference,
Document with which Exhibit was Previously Filed with SEC	
10(s)	  	First Amendment dated as of June 22, 2011, to the Amended and Restated Credit Agreement dated as of October 29, 2010, among Greif, Inc., Greif International Holding Supra C.V. and Greif International Holding B.V., as Borrowers, a syndicate of financial institutions, as Lenders, and Bank Of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2011, File No. 001-00566 (see Exhibit 99.2 therein).	
			
10(t)	  	Amended and Restated Receivables Purchase Agreement dated as of April 30, 2007, among Greif Coordination Center BVBA (an indirect wholly owned subsidiary of Greif, Inc.), as Seller, Greif Belgium BVBA (an indirect wholly owned subsidiary of Greif, Inc.), as Servicer, and ING Belgium S.A., as Purchaser and Transaction Administrator.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007, File No. 001-00566 (see Exhibit 10.1 therein).	
			
10(u)	  	Receivables Purchase Agreement dated as of October 28, 2005, among Greif Italia S.p.A. (an indirect wholly owned subsidiary of Greif, Inc.), as Seller and Servicer, Greif Belgium BVBA (an indirect wholly owned subsidiary of Greif, Inc.), as Master Servicer, and ING Belgium S.A., as Purchaser and Transaction Administrator.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007, File No. 001-00566 (see Exhibit 10.2 therein).	
			
10(v)	  	Amendment dated as of June 29, 2006, to the Receivables Purchase Agreement dated as of October 28, 2005, among Greif Italia S.p.A. (an indirect wholly owned subsidiary of Greif, Inc.), as Seller and Servicer, Greif Belgium BVBA (an indirect wholly owned subsidiary of Greif, Inc.), as Master Servicer, and ING Belgium S.A., as Purchaser and Transaction Administrator.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007, File No. 001-00566 (see Exhibit 10.3 therein).	
			
10(w)	  	Amendment dated as of October 27, 2006, to the Receivables Purchase Agreement dated as of October 28, 2005, among Greif Italia S.p.A. (an indirect wholly owned subsidiary of Greif, Inc.), as Seller and Servicer, Greif Belgium BVBA (an indirect wholly owned subsidiary of Greif, Inc.), as Master Servicer, and ING Belgium S.A., as Purchaser and Transaction Administrator.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007, File No. 001-00566 (see Exhibit 10.4 therein).	
			
10(x)	  	Amendment dated as of April 30, 2007, to the Receivables Purchase Agreement dated as of October 28, 2005, among Greif Italia S.p.A. (an indirect wholly owned subsidiary of Greif, Inc.), as Seller and Servicer, Greif Belgium BVBA (an indirect wholly owned subsidiary of Greif, Inc.), as Master Servicer, and ING Belgium S.A., as Purchaser and Transaction Administrator.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007, File No. 001-00566 (see Exhibit 10.5 therein).	
			
10(y)	  	Amendment dated as of November 15, 2007, to the Receivables Purchase Agreement dated as of October 28, 2005, among Greif Italia S.p.A. (an indirect wholly owned subsidiary of Greif, Inc.), as Seller and Servicer, Greif Belgium BVBA (an indirect wholly owned subsidiary of Greif, Inc.), as Master Servicer, and ING Belgium S.A., as Purchaser and Transaction Administrator.	  	Annual Report on Form 10-K for fiscal year ended October 31, 2007, File No. 001-00566 (see Exhibit 10(y) therein).	
 
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Exhibit
No.	  	Description of Exhibit	  	If Incorporated by Reference,
Document with which Exhibit was Previously Filed with SEC	
10(z)	  	Transfer and Administration Agreement dated as of December 8, 2008, by and among Greif Receivables Funding LLC, Greif Packaging LLC, YC SUSI Trust, as Conduit Investor and Uncommitted Investor, and Bank of America, National Association, as Agent, a Managing Agent, an Administrator and a Committed Investor. Certain portions of this exhibit have been omitted pursuant to an order granting confidential treatment and have been filed separately with the Securities and Exchange Commission.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2010, File No. 001-00566 (see Exhibit 10(bb) therein).	
			
10(aa)	  	First Amendment dated as of September 11, 2009, to the Transfer and Administration Agreement dated as of December 8, 2008, by and among Greif Receivables Funding LLC, Greif Packaging LLC, YC SUSI Trust, as Conduit Investor and Uncommitted Investor, and Bank of America, National Association, as Agent, Managing Partner, an Administrator and a Committed Investor.	  	Registration Statement on Form S-4,
File No. 333-162011 (see Exhibit 10(cc) therein).	
			
10(bb)	  	Second Amendment dated as of December 7, 2009, to the Transfer and Administration Agreement dated as of December 8, 2008, by and among Greif Receivables Funding LLC, Greif Packaging LLC, YC SUSI Trust, as Conduit Investor and Uncommitted Investor, and Bank of America, National Association, as Agent, Managing Partner, an Administrator and a Committed Investor.	  	Annual Report on Form 10-K for fiscal year ended October 31, 2009, File No. 001-00566 (see Exhibit 10(dd) therein).	
			
10(cc)	  	Third Amendment dated as of May 10, 2010, to the Transfer and Administration Agreement dated as of December 8, 2008 by and among Greif Receivables Funding LLC, Greif Packaging LLC, YC SUSI Trust, as Conduit Investor and Uncommitted Investor, and Bank of America National Association, as Agent, Managing Agent, an Administrator and a Committed Investor.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2010, File No. 001-00566 (see Exhibit 99.1 therein).	
			
10(dd)	  	Fourth Amendment dated as of June 22, 2010, to the Transfer and Administration Agreement dated as of December 8, 2008, by and among Greif Receivables Funding LLC, Greif Packaging LLC, YC SUSI Trust, as Conduit Investor and Uncommitted Investor, and Bank of America National Association, as Agent, Managing Agent, an Administrator and a Committed Investor.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2010, File No. 001-00566 (see Exhibit 10.1 therein).	
			
10(ee)	  	Fifth Amendment dated as of September 30, 2010, to the Transfer and Administration Agreement dated as of December 8, 2008, by and among Greif Receivables Funding LLC, Greif Packaging LLC, YC SUSI Trust, as Conduit Investor and Uncommitted Investor, and Bank of America National Association, as Agent, Managing Agent, an Administrator and a Committed Investor.	  	Annual Report on Form 10-K for the fiscal quarter ended October 31, 2010, File No. 001-00566 (see Exhibit 10(cc) therein).	
			
10(ff)	  	Sixth Amendment, dated as of September 19, 2011, to the Transfer and Administration Agreement, dated as of December 8, 2008, by and among Greif Packaging LLC, Greif Receivables Funding LLC and Bank of America National Association, as Managing Agent, Administrator, Committed Investor and Agent.	  	Current Report on Form 8-K dated September 23, 2011,
File No. 001-00566 (see Exhibit 10.1 therein).	
 
107

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Exhibit
No.	  	Description of Exhibit	  	If Incorporated by Reference,
Document with which Exhibit was Previously Filed with SEC	
10(gg)	  	Formation Agreement dated as of June 14, 2010, by and among Greif, Inc. and Greif International Holding Supra C.V. and National Scientific Company Limited and Dabbagh Group Holding Company Limited.	  	Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2010, File No. 001-00566 (see Exhibit 10.2 therein).	
			
10(hh)	  	Joint Venture Agreement dated as of September 29, 2010, by and among Greif, Inc. and Greif International Holding Supra C.V. and Dabbagh Group Holding Company Limited and National Scientific Company Limited.	  	Annual Report on Form 10-K for the fiscal quarter ended October 31, 2010, File No. 001-00566 (see Exhibit 10(ee) therein).	
			
10(ii)	  	Sale Agreement dated as of December 8, 2008, by and between Greif Packaging LLC, each other entity from time to time a party as Originator, and Greif Receivables Funding LLC.	  	Annual Report on Form 10-K for the fiscal quarter ended October 31, 2010, File No. 001-00566 (see Exhibit 10(ff) therein).	
			
10(jj)	  	First Amendment dated as of September 30, 2010, to the Sale Agreement dated as of December 8, 2008, by and between Greif Packaging LLC, each other entity from time to time a party as Originator, and Greif Receivables Funding LLC.	  	Annual Report on Form 10-K for the fiscal quarter ended October 31, 2010, File No. 001-00566 (see Exhibit 10(gg) therein).	
			
21	  	Subsidiaries of the Registrant.	  	Contained herein.	
			
23	  	Consent of Ernst & Young LLP.	  	Contained herein.	
			
24(a)	  	Powers of Attorney for Michael J. Gasser, Vicki L. Avril, John F. Finn, John W. McNamara, Bruce A. Edwards, Daniel J. Gunsett, Judith D. Hook, Patrick J. Norton and Mark A. Emkes.	  	Contained herein.	
			
31.1	  	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.	  	Contained herein.	
			
31.2	  	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.	  	Contained herein.	
			
32.1	  	Certification of Chief Executive Officer required by Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.	  	Contained herein.	
			
32.2	  	Certification of Chief Financial Officer required by Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code.	  	Contained herein.	

*	Executive compensation plans and arrangements required to be filed pursuant to Item 601(b)(10) of Regulation S-K.	
 
108

Table of Contents
 SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	  		  		  	Greif, Inc.	
	  		  		  	(Registrant)	
				
Date:	  	December 16, 2011	  	By:	  	/s/    D AVID B. F ISCHER	
	  		  		  	David B. Fischer
President and
Chief Executive Officer	
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

/s/    D AVID B. F ISCHER	  	/s/    R OBERT M. M CNUTT	
David B. Fischer
President and Chief Executive Officer
Member of the Board of Directors
(principal executive officer)	  	Robert M. McNutt
Senior Vice President
and Chief Financial Officer
(principal financial officer)	
		
/s/    K ENNETH B. A NDRE  III	  	M ICHAEL J. G ASSER *	
Kenneth B. Andre III
Vice President, Corporate Controller
(principal accounting officer)	  	Michael J. Gasser
Executive Chairman
Member of the Board of Directors	
		
V ICKI L. A VRIL *	  	J OHN F. F INN *	
Vicki L. Avril
Member of the Board of Directors	  	John F. Finn
Member of the Board of Directors	
		
J OHN W. M CNAMARA *	  	B RUCE A. E DWARDS *	
John W. McNamara
Member of the Board of Directors	  	Bruce A. Edwards
Member of the Board of Directors	
		
D ANIEL J. G UNSETT *	  	J UDITH D. H OOK *	
Daniel J. Gunsett
Member of the Board of Directors	  	Judith D. Hook
Member of the Board of Directors	
		
P ATRICK J. N ORTON *	  	M ARK A. E MKES *	
Patrick J. Norton
Member of the Board of Directors	  	Mark A. Emkes
Member of the Board of Directors	
 
*	The undersigned, David B. Fischer, by signing his name hereto, does hereby execute this Form 10-K on behalf of each of the above-named persons pursuant to powers of attorney duly executed by such persons and filed as an exhibit to this Form 10-K.	

By:	 	/s/    D AVID B. F ISCHER	
	 	David B. Fischer
President and
Chief Executive Officer	
Each of the above signatures is affixed as of December 16, 2011.
 
109

Table of Contents
 SCHEDULE II
GREIF, INC. AND SUBSIDIARY COMPANIES
Consolidated Valuation and Qualifying Accounts and Reserves (Dollars in millions)

Description	  	Balance at
Beginning of
Period	 	  	Charged to
Costs and
Expenses	 	  	Charged to
Other Accounts	 	 	Deductions	 	 	Balance at End
of Period	 	
Year ended October 31, 2009:	  				  				  				 				 				
						
Allowance for doubtful accounts	  	$	13.5	  	  	$	2.3	  	  	$	(3.9	) 	 	$	0.6	  	 	$	12.5	  	
						
Environmental reserves	  	$	37.2	  	  	$	1.1	  	  	$	(3.4	) 	 	$	(1.5	) 	 	$	33.4	  	
						
Year ended October 31, 2010:	  				  				  				 				 				
						
Allowance for doubtful accounts	  	$	12.5	  	  	$	1.1	  	  	$	(0.2	) 	 	$	(0.1	) 	 	$	13.3	  	
						
Environmental reserves	  	$	33.4	  	  	$	0.4	  	  	$	(1.5	) 	 	$	(6.1	) 	 	$	26.2	  	
						
Year ended October 31, 2011:	  				  				  				 				 				
						
Allowance for doubtful accounts	  	$	13.3	  	  	$	1.0	  	  	$	(0.5	) 	 	$	—	  	 	$	13.8	  	
						
Environmental reserves	  	$	26.2	  	  	$	4.5	  	  	$	(1.3	) 	 	$	(0.1	) 	 	$	29.3	  	
 
110

Exhibit 10 (i)
GREIF, INC.
AMENDMENT NO. 1
TO THE
PERFORMANCE-BASED INCENTIVE COMPENSATION PLAN
The Performance-Based Incentive Compensation Plan (the “Plan”) is hereby amended pursuant to the following provisions:
1. Definitions : For the purposes of the Plan and this amendment, all capitalized terms used in this amendment which are not otherwise defined herein shall have the respective meanings given such terms in the Plan.
2. Amendment : Section 5 of the Plan is hereby amended in its entirety to read as follows:
“ Section 5. Establishment of Target Awards, Performance Periods and Performance Goals
For each Performance Period established by the Committee, the Committee shall establish a Target Award for each Participant. Awards shall be earned based upon the financial performance of the Company or one or more operating groups of the Company during a Performance Period; provided, however, the maximum Award that may be paid to any single Participant for any Performance Period is the product of $2.0 million multiplied by the number of 12-month periods contained within the relevant Performance Period. As to each Performance Period, within such time as established by Section 162(m) of the Code, the Committee will establish in writing Performance Goals based on the following performance measures of the Company (and/or one or more operating groups of the Company, if applicable) over the Performance Period:
(i) return on assets, and/or (ii) any other objective business criteria approved by the stockholders of Greif, Inc. in accordance with the requirements for “qualified performance-based compensation” within the meaning of the regulations under Section 162(m). Except as otherwise provided herein, the extent to which the Performance Goals are satisfied will determine the amount of the Award, if any, that will be earned by each Participant. The Performance Goals may vary for different Performance Periods and need not be the same for each Participant eligible for an Award for a Performance Period.”
3. Effective Date; Construction : The effective date of this amendment is February 28, 2011 and this amendment shall be deemed to be part of the Plan as of such date. In the event of any inconsistencies between the provisions of the Plan and this amendment, the provisions of this amendment shall control. Except as modified by this amendment, the Plan shall continue in full force and effect without change.

Exhibit 10 (k)
GREIF, INC.
AMENDMENT NO. 1
TO THE
2001 MANAGEMENT EQUITY INCENTIVE AND COMPENSATION PLAN
The 2001 Management Equity Incentive and Compensation Plan (the “Plan”) is hereby amended pursuant to the following provisions:
1. Definitions : For the purposes of the Plan and this amendment, all capitalized terms used in this amendment which are not otherwise defined herein shall have the respective meanings given such terms in the Plan.
2. Amendment : Section 25 of the Plan is hereby amended in its entirety to read as follows:
“ Section 25. Term of Plan .
No Award shall be granted pursuant to the Plan on or after the fifteenth anniversary of the Effective Date, but Awards granted prior to such fifteenth anniversary may extend beyond that date.”
3. Effective Date; Construction : The effective date of this amendment is February 28, 2011 and this amendment shall be deemed to be part of the Plan as of such date. In the event of any inconsistencies between the provisions of the Plan and this amendment, the provisions of this amendment shall control. Except as modified by this amendment, the Plan shall continue in full force and effect without change.

EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
Per item 601(b)(21)(ii) of Regulation S-K, names of particular subsidiaries may be omitted if the unnamed subsidiaries, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary as of October 31, 2011. Significant subsidiaries are defined in Rule 1-02(w) of Regulation S-K.

Name of Subsidiary	  	Incorporated or Organized
Under Laws of	
United States:	  		
American Flange & Manufacturing Co., Inc.	  	Delaware	
Greif Packaging LLC	  	Delaware	
Greif Receivables Funding LLC	  	Delaware	
Soterra LLC	  	Delaware	
Greif USA LLC	  	Delaware	
STA Timber LLC	  	Delaware	
Earth Minded LLC	  	Delaware	
Greif CV-Management II LLC	  	Delaware	
Container Life Cycle Management LLC	  	Delaware	
Olympic Oil, Ltd.	  	Illinois	
Trilla Steel Drum Corporation	  	Illinois	
Trilla-St. Louis Corporation	  	Illinois	
Greif Flexibles USA Inc.	  	Illinois	
Delta Petroleum Company, Inc.	  	Louisiana	
Greif U.S. Holdings, Inc.	  	Nevada	
Box Board Products, Inc.	  	North Carolina	
		
International:	  		
Greif Algeria Spa	  	Algeria	
Greif Argentina S.A.	  	Argentina	
Storsack Austria GES.m.b.H.	  	Austria	
Greif Coordination Center BVBA	  	Belgium	
Greif Packaging Belgium NV	  	Belgium	
Greif Belgium BVBA	  	Belgium	
pack2pack Runbeke NV	  	Belgium	
Greif Insurance Company Limited	  	Bermuda	
Greif Embalagens Industrialis Do Brasil Ltda	  	Brazil	
Greif Embalagens Industrialis Do Amazonas Ltda	  	Brazil	
Cimplast Embalagens Importacao, Exportacao E. Comercio S.A.	  	Brazil	
Greif Brasil Participacoes Ltda	  	Brazil	
Plimax Industria de Embalagens Plasticas Ltda	  	Brazil	
Greif Bros. Canada Inc.	  	Canada	
Vulsay Industries, Ltd.	  	Canada	
Greif Chile S.A.	  	Chile	
Southpack S.A.	  	Chile	
Greif (Shanghai) Packaging Co., Ltd.	  	China	
Greif (Ningbo) Packaging Co., Ltd.	  	China	
Greif (Taicang) Packaging Co., Ltd.	  	China	
Greif Huizhou Packaging Co., Ltd.	  	China	
Greif Shenzen Packaging Co., Ltd.	  	China	
Greif SH Commercial	  	China	
Greif China Holding Co. Ltd. (Hong Kong)	  	China	
Unsa Hangzhou Packaging Mfg Co., Ltd.	  	China	
Greif Columbia S.A.	  	Columbia	
Greif Czech Republic a.s.	  	Czech Republic	

			
Name of Subsidiary	  	Incorporated or Organized
Under Laws of	
Greif Denmark A/S	  	Denmark	
Greif France SAS	  	France	
Greif France Holdings SAS	  	France	
Greif Packaging France Investments SAS	  	France	
Greif Flexibles France SARL	  	France	
Greif Flexibles Germany GmbH & Co. KG	  	Germany	
Greif Germany GmbH	  	Germany	
Fustiplast GmbH	  	Germany	
pack2pack Mendig GmbH	  	Germany	
pack2pack Deutschland GmbH	  	Germany	
Tri-Sure Germany Grundstueckverwaltungs GmbH	  	Germany	
Greif Germany Holding GmbH	  	Germany	
Greif Hungary Kft	  	Hungary	
Pachmas Packaging Ltd	  	Israel	
Greif Italia SpA	  	Italy	
Greif Holding Italy SRL	  	Italy	
Fustiplast SRL	  	Italy	
Greif Luxembourg Finance S.C.A.	  	Luxembourg	
Greif Malaysia Sdn Bhd	  	Malaysia	
Greif Mexico, S.A. de C.V.	  	Mexico	
Greif Brazil Holding B.V.	  	Netherlands	
Greif International Holding BV	  	Netherlands	
Emballagefabrieken Verma B.V.	  	Netherlands	
Greif Nederland B.V.	  	Netherlands	
Greif Flexibles Asset Holding B.V.	  	Netherlands	
Greif Flexibles Trading Holding B.V.	  	Netherlands	
Ligtermoet B.V.	  	Netherlands	
Pinwheel TH Netherlands B.V.	  	Netherlands	
pack2pack Halsteren B.V.	  	Netherlands	
pack2pack B.V.	  	Netherlands	
Greif Bond Finance B.V.	  	Netherlands	
Greif International Holding Supra C.V.	  	Netherlands	
Greif International Holding Supra II C.V.	  	Netherlands	
Greif Norway AS	  	Norway	
Greif Poland Sp zoo	  	Poland	
Greif Portugal, Lda.	  	Portugal	
Storsack Romania N.E. SRL	  	Romania	
Greif Upakovka CJSC	  	Russia	
Greif Perm LLC	  	Russia	
Greif Volga-Don LLC	  	Russia	
Greif Vologda LLC	  	Russia	
Greif Saudi Arabia Ltd.	  	Saudi Arabia	
Greif Eastern Packaging Pte.Ltd.	  	Singapore	
Greif Singapore Pte Ltd	  	Singapore	
Blagden Packaging Singapore Pte Ltd	  	Singapore	
Greif South Africa Pty Ltd	  	South Africa	
Greif Packaging Spain SA	  	Spain	
Greif Investments S.A.	  	Spain	
Greif Packaging Spain Holdings SL	  	Spain	
Greif Sweden AB	  	Sweden	
Greif Sweden Holding AB	  	Sweden	
Greif Packaging Sweden AS	  	Sweden	

			
Name of Subsidiary	  	Incorporated or Organized
Under Laws of	
Greif Hua I Taiwan Co., Ltd.	  	Taiwan	
Greif Mimaysan Ambalaj Sanayi AS	  	Turkey	
Unsa Ambalaj Sanayi Ve Ticaret Anonim Sirketi	  	Turkey	
Sunjut Sanayi AS	  	Turkey	
Greif UK Holding Ltd.	  	United Kingdom	
Greif UK Ltd.	  	United Kingdom	
Greif Flexibles UK Ltd.	  	United Kingdom	

EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
 
 	1)	Registration Statement (Form S-8 No. 333-26767) pertaining to the Greif, Inc. 1996 Directors Stock Option Plan	
 
 	2)	Registration Statement (Form S-8 No. 333-26977) pertaining to the Greif, Inc. Incentive Stock Option Plan	
 
 	3)	Registration Statement (Form S-8 No. 333-35048) pertaining to the Greif 401(k) Retirement Plan	
 
 	4)	Registration Statement (Form S-8 No. 333-61058) pertaining to the Greif, Inc. 2000 Nonstatutory Stock Option Plan	
 
 	5)	Registration Statement (Form S-8 No. 333-61068) pertaining to the Greif, Inc. 2001 Management Equity Incentive and Compensation Plan	
 
 	6)	Registration Statement (Form S-8 No. 333-123133) pertaining to the Greif, Inc. 2005 Outside Directors Equity Award Plan	
 
 	7)	Registration Statement (Form S-4 No. 333-142203) 6-3/4 percent Senior Notes due 2017	
 
 	8)	Registration Statement (Form S-8 No. 333-151475) pertaining to Greif, Inc. Amended and Restated Long-Term Incentive Plan	
 
 	9)	Registration Statement (Form S-4 No. 333-162011) 7-3/4 percent Senior Notes due 2019;	
of our reports dated December 16, 2011, with respect to the consolidated financial statements and schedule of Greif, Inc. and subsidiaries and the effectiveness of internal control over financial reporting of Greif, Inc. included in this Annual Report (Form 10-K) of Greif, Inc. for the year ended October 31, 2011.
/s/ Ernst & Young, LLP
Columbus, Ohio
December 16, 2011

EXHIBIT 24(a)
GREIF, INC.
POWER OF ATTORNEY
FOR
FORM 10-K ANNUAL REPORTS
The undersigned, a director of Greif, Inc., a Delaware corporation (the “Company”), hereby constitutes and appoints David B. Fischer as my true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for me and in my name, place, and stead, in my capacity as director of the Company, to execute any and all of the Company’s Annual Reports on Form 10-K, and any amendments thereto, to be filed with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intent and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
The undersigned has executed and delivered this Power of Attorney on the date set forth below:

Dated:	 	December 6, 2011	  	/s/ Vicki L. Avril	
	 		  	Signature of Director	
			
	 		  	/s/ Bruce A. Edwards	
	 		  	Signature of Director	
			
	 		  	/s/ Mark A. Emkes	
	 		  	Signature of Director	
			
	 		  	/s/ John F. Finn	
	 		  	Signature of Director	
			
	 		  	/s/ Michael J. Gasser	
	 		  	Signature of Director	
			
	 		  	/s/ Daniel J. Gunsett	
	 		  	Signature of Director	
			
	 		  	/s/ Judith D. Hook	
	 		  	Signature of Director	
			
	 		  	/s/ John W. McNamara	
	 		  	Signature of Director	
			
	 		  	/s/ Patrick J. Norton	
	 		  	Signature of Director	

EXHIBIT 31.1
CERTIFICATION
I, David B. Fischer, certify that:
1. I have reviewed this Annual Report on Form 10-K of Greif, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
 	•	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	•	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 
 	•	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	•	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	  	December 16, 2011	  		  	/s/ David B. Fischer	
	  		  		  	David B. Fischer, President
and Chief Executive Officer
(principal executive officer)	

EXHIBIT 31.2
CERTIFICATION
I, Robert M. McNutt, certify that:
1. I have reviewed this Annual Report on Form 10-K of Greif, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
 	•	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	
 
 	•	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	
 
 	•	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	
 
 	•	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	 	December 16, 2011	  		 	/s/ Robert M. McNutt        	
	 		  		 	Robert M. McNutt,
Senior Vice President and Chief Financial Officer
(principal financial officer)	

EXHIBIT 32.1
Certification Required by Rule 13a-14(b) of the Securities Exchange Act of
1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code
In connection with the Annual Report of Greif, Inc. (the “Company”) on Form 10-K for the annual period ended October 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Fischer, the chief executive officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
 	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 
 	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

Date:	 	December 16, 2011	 		 	/s/ David B. Fischer	
	 		 		 	David B. Fischer, President
and Chief Executive Officer	
A signed original of this written statement required by Section 906 has been provided to Greif, Inc. and will be retained by Greif, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2
Certification Required by Rule 13a-14(b) of the Securities Exchange Act of
1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code
In connection with the Annual Report of Greif, Inc. (the “Company”) on Form 10-K for the annual period ended October 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert M. McNutt, the chief financial officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
 	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	
 
 	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

Date:	 	December 16, 2011	 		 	/s/  Robert M. McNutt	
	 		 		 	Robert M. McNutt,
Senior Vice President and Chief Financial Officer	
A signed original of this written statement required by Section 906 has been provided to Greif, Inc. and will be retained by Greif, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.