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|
|
NOTE 1— | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Years | ||||
|
||||
Buildings
|
30-45 | |||
Machinery and equipment
|
3-19 |
• | 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. |
|
NOTE 2— | ACQUISITIONS AND OTHER SIGNIFICANT TRANSACTIONS |
# of |
Purchase
Price, |
Operating |
Tangible |
Intangible |
||||||||||||||||||||||||
Acquisitions | Net of Cash | Revenue | Profit | Assets, Net | Assets | Goodwill | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total 2010 Acquisitions
|
12 | $ | 176,156 | $ | 268,443 | $ | 19,042 | $ | 122,899 | $ | 50,104 | $ | 127,311 | |||||||||||||||
Total 2009 Acquisitions
|
6 | $ | 88,005 | $ | 31,736 | $ | 4,389 | $ | 7,075 | $ | 38,339 | $ | 45,412 |
|
NOTE 3— | SALE OF NON-UNITED STATES ACCOUNTS RECEIVABLE |
|
NOTE 4— | INVENTORIES |
For the Year Ended October 31, 2009 | For the Year Ended October 31, 2008 | |||||||||||||||||||||||
As Originally |
As Originally |
|||||||||||||||||||||||
Reported | Adjustments | As Adjusted | Reported | Adjustments | As Adjusted | |||||||||||||||||||
|
||||||||||||||||||||||||
Cost of products sold
|
$ | 2,257,141 | $ | 35,432 | $ | 2,292,573 | $ | 3,097,760 | $ | (12,025 | ) | $ | 3,085,735 | |||||||||||
Gross profit
|
535,076 | (35,432 | ) | 499,644 | 692,771 | 12,025 | 704,796 | |||||||||||||||||
Operating profit
|
235,329 | (35,432 | ) | 199,897 | 370,286 | 12,025 | 382,311 | |||||||||||||||||
Income tax expense
|
37,706 | (13,645 | ) | 24,061 | 73,610 | 4,631 | 78,241 | |||||||||||||||||
Net income attributable to Greif, Inc.
|
$ | 132,433 | $ | (21,787 | ) | $ | 110,646 | $ | 234,354 | $ | 7,394 | $ | 241,748 |
As Originally |
||||||||||||
Reported | Adjustments | As Adjusted | ||||||||||
|
||||||||||||
Inventory
|
$ | 227,432 | $ | 11,419 | $ | 238,851 | ||||||
Total assets
|
$ | 2,812,510 | $ | 11,419 | $ | 2,823,929 | ||||||
Deferred tax liabilities
|
$ | 156,755 | $ | 4,397 | $ | 161,152 | ||||||
Total liabilities
|
$ | 1,712,940 | $ | 4,397 | $ | 1,717,337 | ||||||
Retained earnings
|
$ | 1,199,592 | $ | 7,022 | $ | 1,206,614 | ||||||
Total liabilities and shareholders’ equity
|
$ | 2,812,510 | $ | 11,419 | $ | 2,823,929 | ||||||
2010 | 2009 | |||||||
|
||||||||
Finished goods
|
$ | 92,469 | $ | 57,304 | ||||
Raw materials and work-in process
|
304,103 | 181,547 | ||||||
$ | 396,572 | $ | 238,851 | |||||
|
NOTE 5— | NET ASSETS HELD FOR SALE |
|
NOTE 6— | GOODWILL AND OTHER INTANGIBLE ASSETS |
Rigid
Industrial |
||||||||||||||||||||
Packaging |
Flexible
Products |
Paper |
Land |
|||||||||||||||||
& Services | & Services | Packaging | Management | Total | ||||||||||||||||
|
||||||||||||||||||||
Balance at October 31, 2008
|
$ | 480,312 | $ | — | $ | 32,661 | $ | — | $ | 512,973 | ||||||||||
Goodwill acquired
|
20,658 | — | 29,250 | — | 49,908 | |||||||||||||||
Goodwill adjustments
|
10,634 | — | (511 | ) | — | 10,123 | ||||||||||||||
Currency translation
|
19,113 | — | — | — | 19,113 | |||||||||||||||
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 | ||||||||||
Gross |
||||||||||||
Intangible |
Accumulated |
Net Intangible |
||||||||||
Assets | Amortization | Assets | ||||||||||
|
||||||||||||
October 31, 2010:
|
||||||||||||
Trademarks and patents
|
$ | 42,878 | $ | 17,184 | $ | 25,694 | ||||||
Non-compete agreements
|
20,456 | 7,774 | 12,682 | |||||||||
Customer relationships
|
153,131 | 27,091 | 126,040 | |||||||||
Other
|
15,235 | 6,412 | 8,823 | |||||||||
Total
|
$ | 231,700 | $ | 58,461 | $ | 173,239 | ||||||
October 31, 2009:
|
||||||||||||
Trademarks and patents
|
$ | 35,081 | $ | 15,457 | $ | 19,624 | ||||||
Non-compete agreements
|
18,842 | 6,143 | 12,699 | |||||||||
Customer relationships
|
110,298 | 17,190 | 93,108 | |||||||||
Other
|
11,018 | 5,079 | 5,939 | |||||||||
Total
|
$ | 175,239 | $ | 43,869 | $ | 131,370 | ||||||
|
NOTE 7— | RESTRUCTURING CHARGES |
Amounts |
||||||||||||
Amounts |
Amounts |
Remaining |
||||||||||
Expected to be |
Incurred in |
to be |
||||||||||
Incurred | 2010 | Incurred | ||||||||||
|
||||||||||||
Rigid Industrial Packaging & Services:
|
||||||||||||
Employee separation costs
|
$ | 13,003 | $ | 10,673 | $ | 2,330 | ||||||
Asset impairments
|
1,392 | 1,392 | — | |||||||||
Professional fees
|
4,815 | 2,370 | 2,445 | |||||||||
Inventory adjustments
|
131 | 131 | — | |||||||||
Other restructuring costs
|
14,030 | 6,545 | 7,485 | |||||||||
33,371 | 21,111 | 12,260 | ||||||||||
Flexible Products & Services:
|
||||||||||||
Employee separation costs
|
511 | 378 | 133 | |||||||||
Other restructuring costs
|
246 | 246 | — | |||||||||
757 | 624 | 133 | ||||||||||
Paper Packaging:
|
||||||||||||
Employee separation costs
|
2,815 | 2,692 | 123 | |||||||||
Asset impairments
|
1,524 | 1,524 | — | |||||||||
Other restructuring costs
|
2,419 | 926 | 1,493 | |||||||||
6,758 | 5,142 | 1,616 | ||||||||||
$ | 40,886 | $ | 26,877 | $ | 14,009 | |||||||
Cash Charges | ||||||||||||||||||||
Employee |
Non-Cash Charges | |||||||||||||||||||
Separation |
Asset |
Inventory |
||||||||||||||||||
Costs | Other Costs | Impairments | Write-down | Total | ||||||||||||||||
|
||||||||||||||||||||
Balance at October 31, 2008, net
|
$ | 14,413 | $ | 734 | $ | — | $ | — | $ | 15,147 | ||||||||||
Costs incurred and charged to expense
|
28,408 | 18,586 | 19,596 | 10,772 | 77,362 | |||||||||||||||
Reserves established in the purchase price of business
combinations
|
971 | 2,971 | 3,771 | — | 7,713 | |||||||||||||||
Costs paid or otherwise settled
|
(34,553 | ) | (16,215 | ) | (23,367 | ) | (10,772 | ) | (84,907 | ) | ||||||||||
Balance at October 31, 2009
|
$ | 9,239 | $ | 6,076 | $ | — | $ | — | $ | 15,315 | ||||||||||
Costs incurred and charged to expense
|
13,743 | 10,086 | 2,916 | 131 | 26,876 | |||||||||||||||
Costs paid or otherwise settled
|
(10,314 | ) | (8,592 | ) | (2,916 | ) | (131 | ) | (21,953 | ) | ||||||||||
Balance at October 31, 2010
|
$ | 12,668 | $ | 7,570 | $ | — | $ | — | $ | 20,238 | ||||||||||
|
|
NOTE 9— | LONG-TERM DEBT |
October 31, |
October 31, |
|||||||
2010 | 2009 | |||||||
|
||||||||
2010 Credit Agreement
|
$ | 273,700 | $ | — | ||||
2009 Credit Agreement
|
— | 192,494 | ||||||
Senior Notes due 2017
|
303,396 | 300,000 | ||||||
Senior Notes due 2019
|
242,306 | 241,729 | ||||||
Trade accounts receivable credit facility
|
135,000 | — | ||||||
Other long-term debt
|
11,187 | 4,385 | ||||||
965,589 | 738,608 | |||||||
Less current portion
|
(12,523 | ) | (17,500 | ) | ||||
Long-term debt
|
$ | 953,066 | $ | 721,108 | ||||
|
NOTE 10— | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
October 31, 2010 | October 31, 2009 |
Balance Sheet |
||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | Location | ||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Interest rate derivatives
|
$ | — | $ | (2,028 | ) | $ | — | $ | (2,028 | ) | $ | — | $ | (14,635 | ) | $ | — | $ | (14,635 | ) | Other long-term liabilities | |||||||||||||
Foreign exchange hedges
|
— | (1,497 | ) | — | (1,497 | ) | — | (2,283 | ) | — | (2,283 | ) | Other current liabilities | |||||||||||||||||||||
Energy hedges
|
— | (288 | ) | — | (288 | ) | — | (727 | ) | — | (727 | ) | Other current liabilities | |||||||||||||||||||||
Total*
|
$ | — | $ | (3,813 | ) | $ | — | $ | (3,813 | ) | $ | — | $ | (17,645 | ) | $ | — | $ | (17,645 | ) | ||||||||||||||
* | The carrying amounts of cash and cash equivalents, trade accounts receivable, accounts payable, current liabilities and short-term borrowings at October 31, 2010 approximate their fair values because of the short-term nature of these items and are not included in this table. |
|
NOTE 11— | STOCK-BASED COMPENSATION |
2010 | 2009 | 2008 | ||||||||||||||||||||||
Weighted |
Weighted |
Weighted |
||||||||||||||||||||||
Average |
Average |
Average |
||||||||||||||||||||||
Exercise |
Exercise |
Exercise |
||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | |||||||||||||||||||
|
||||||||||||||||||||||||
Beginning balance
|
643 | $ | 15.91 | 785 | $ | 16.01 | 1,072 | $ | 15.75 | |||||||||||||||
Granted
|
— | — | — | — | — | — | ||||||||||||||||||
Forfeited
|
— | — | 1 | 13.10 | 2 | 11.50 | ||||||||||||||||||
Exercised
|
133 | 15.06 | 141 | 16.50 | 285 | 15.03 | ||||||||||||||||||
Ending balance
|
510 | $ | 16.14 | 643 | $ | 15.91 | 785 | $ | 16.01 | |||||||||||||||
Weighted- |
||||||||
Average |
||||||||
Remaining |
||||||||
Number |
Contractual |
|||||||
Range of Exercise Prices | Outstanding | Life | ||||||
|
||||||||
$5-$15
|
266 | 2.3 | ||||||
$15-$25
|
232 | 2.3 | ||||||
$25-$35
|
12 | 4.3 |
|
NOTE 12— | INCOME TAXES |
For the years ended October 31, | 2010 | 2009(1) | 2008(1) | |||||||||
|
||||||||||||
Current
|
||||||||||||
Federal
|
$ | 15,222 | $ | 24,005 | $ | 34,369 | ||||||
State and local
|
5,892 | 1,268 | 3,589 | |||||||||
non-U.S.
|
14,861 | 11,955 | 31,167 | |||||||||
35,975 | 37,228 | 69,125 | ||||||||||
Deferred
|
||||||||||||
Federal
|
(372 | ) | (8,762 | ) | 2,802 | |||||||
State and local
|
653 | 2,062 | 380 | |||||||||
non-U.S.
|
4,315 | (6,467 | ) | 5,934 | ||||||||
4,596 | (13,167 | ) | 9,116 | |||||||||
$ | 40,571 | $ | 24,061 | $ | 78,241 | |||||||
(1) | Amounts presented in 2009 and 2008 reflect the change in accounting principle from using a combination of the LIFO and FIFO inventory accounting methods to the FIFO method for all of our businesses effective November 1, 2009. |
For the years ended October 31, | 2010 | 2009(1) | 2008(1) | |||||||||
|
||||||||||||
United States federal tax rate
|
35.00 | % | 35.00 | % | 35.00 | % | ||||||
Non-U.S. tax
rates
|
(14.50 | )% | (12.00 | )% | (8.30 | )% | ||||||
State and local taxes, net of federal tax benefit
|
1.30 | % | 1.90 | % | 1.20 | % | ||||||
United States tax credits
|
(3.90 | )% | (4.40 | )% | (0.90 | )% | ||||||
Other non-recurring items
|
(1.80 | )% | (3.10 | )% | (2.90 | )% | ||||||
16.10 | % | 17.40 | % | 24.10 | % | |||||||
(1) | Amounts presented in 2009 and 2008 reflect the change in accounting principle from using a combination of the LIFO and FIFO inventory accounting methods to the FIFO method for all of our businesses effective November 1, 2009. |
2010 | 2009(1) | |||||||
|
||||||||
Deferred Tax Assets
|
||||||||
Net operating loss carryforwards
|
$ | 117,850 | $ | 136,528 | ||||
Minimum pension liabilities
|
46,064 | 45,360 | ||||||
Insurance operations
|
13,659 | 12,898 | ||||||
Incentives
|
8,605 | 11,345 | ||||||
Environmental reserves
|
7,619 | 9,322 | ||||||
State income tax
|
8,026 | 9,482 | ||||||
Postretirement
|
6,963 | 7,227 | ||||||
Other
|
8,829 | 6,928 | ||||||
Derivatives instruments
|
832 | 6,132 | ||||||
Interest
|
4,606 | 3,190 | ||||||
Allowance for doubtful accounts
|
2,496 | 3,093 | ||||||
Restructuring reserves
|
3,558 | 2,975 | ||||||
Deferred compensation
|
3,098 | 2,367 | ||||||
Foreign tax credits
|
1,602 | 1,806 | ||||||
Vacation accruals
|
1,186 | 1,345 | ||||||
Stock options
|
1,820 | 1,341 | ||||||
Severance
|
372 | 614 | ||||||
Workers compensation accruals
|
295 | 608 | ||||||
Total Deferred Tax Assets
|
237,480 | 262,561 | ||||||
Valuation allowance
|
(64,568 | ) | (80,702 | ) | ||||
Net Deferred Tax Assets
|
172,912 | 181,859 | ||||||
Deferred Tax Liabilities
|
||||||||
Properties, plants and equipment
|
106,544 | 101,655 | ||||||
Goodwill and other intangible assets
|
83,690 | 79,410 | ||||||
Inventories
|
5,117 | 8,912 | ||||||
Timberland transactions
|
95,355 | 95,497 | ||||||
Pension
|
18,275 | 12,039 | ||||||
Total Deferred Tax Liabilities
|
308,981 | 297,513 | ||||||
Net Deferred Tax Asset (Liability)
|
$ | (136,069 | ) | $ | (115,654 | ) | ||
(1) | Amounts presented in 2009 and 2008 reflect the change in accounting principle from using a combination of the LIFO and FIFO inventory accounting methods to the FIFO method for all of our businesses effective November 1, 2009. |
2010 | 2009 | 2008 | ||||||||||
|
||||||||||||
Balance at November 1
|
$ | 45,459 | $ | 51,715 | $ | 60,476 | ||||||
Increases in tax provisions for prior years
|
66 | 3,335 | 2,295 | |||||||||
Decreases in tax provisions for prior years
|
(2,728 | ) | (2,992 | ) | (928 | ) | ||||||
Increases in tax positions for current years
|
1,517 | 2,951 | 378 | |||||||||
Settlements with taxing authorities
|
(6,667 | ) | — | (186 | ) | |||||||
Lapse in statute of limitations
|
— | (6,016 | ) | (3,872 | ) | |||||||
Currency translation
|
(2,285 | ) | (3,534 | ) | (6,448 | ) | ||||||
Balance at October 31
|
$ | 35,362 | $ | 45,459 | $ | 51,715 | ||||||
|
NOTE 13— | RETIREMENT PLANS AND POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS |
Other |
||||||||||||||||||||
For the year ended October 31, 2010 | Consolidated | United States | Germany | United Kingdom | 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 | |||||||||
Other |
||||||||||||||||||||
For the year ended October 31, 2009 | Consolidated | United States | Germany | United Kingdom | 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 | ) | ||||||||
Other |
||||||||||||||||||||
For the year ended October 31, 2008 | Consolidated | United States | Germany | United Kingdom | International | |||||||||||||||
|
||||||||||||||||||||
Service cost
|
$ | 11,932 | $ | 8,700 | $ | 377 | $ | 2,008 | $ | 847 | ||||||||||
Interest cost
|
28,410 | 14,893 | 1,204 | 7,290 | 5,023 | |||||||||||||||
Expected return on plan assets
|
(33,460 | ) | (17,650 | ) | — | (10,477 | ) | (5,333 | ) | |||||||||||
Amortization of transition net asset
|
19 | (48 | ) | — | — | 67 | ||||||||||||||
Amortization of prior service cost
|
811 | 920 | — | — | (109 | ) | ||||||||||||||
Recognized net actuarial (gain) loss
|
3,822 | 3,167 | — | 450 | 205 | |||||||||||||||
Curtailment, settlement and other
|
3,512 | — | — | — | 3,512 | |||||||||||||||
Net periodic pension cost
|
$ | 15,046 | $ | 9,982 | $ | 1,581 | $ | (729 | ) | $ | 4,212 | |||||||||
Other |
||||||||||||||||||||
For the year ended October 31, 2010 | Consolidated | United States | Germany | United Kingdom | International | |||||||||||||||
|
||||||||||||||||||||
Discount rate
|
5.20 | % | 5.50 | % | 5.00 | % | 5.25 | % | 1.64 | % | ||||||||||
Expected return on plan assets(1)
|
7.50 | % | 8.25 | % | 0.00 | % | 7.50 | % | 2.29 | % | ||||||||||
Rate of compensation increase
|
3.11 | % | 3.00 | % | 2.75 | % | 4.00 | % | 0.87 | % | ||||||||||
For the year ended October 31, 2009
|
||||||||||||||||||||
Discount rate
|
5.20 | % | 5.75 | % | 6.00 | % | 5.50 | % | 2.28 | % | ||||||||||
Expected return on plan assets(1)
|
7.50 | % | 8.25 | % | 0.00 | % | 7.50 | % | 2.56 | % | ||||||||||
Rate of compensation increase
|
3.11 | % | 3.00 | % | 2.75 | % | 4.00 | % | 1.15 | % | ||||||||||
For the year ended October 31, 2008
|
||||||||||||||||||||
Discount rate
|
5.20 | % | 7.00 | % | 6.25 | % | 6.25 | % | 2.31 | % | ||||||||||
Expected return on plan assets(1)
|
7.50 | % | 8.75 | % | 0.00 | % | 7.50 | % | 1.92 | % | ||||||||||
Rate of compensation increase
|
3.11 | % | 4.00 | % | 3.00 | % | 4.35 | % | 1.20 | % |
(1) | To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the 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. |
Other |
||||||||||||||||||||
For the year ended October 31, 2010 | Consolidated | USA | Germany | United Kingdom | 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 | ||||||||||
Other |
||||||||||||||||||||
For the year ended October 31, 2009 | Consolidated | USA | Germany | United Kingdom | International | |||||||||||||||
|
||||||||||||||||||||
Change in benefit obligation:
|
||||||||||||||||||||
Benefit obligation at beginning of year
|
$ | 470,763 | $ | 237,797 | $ | 21,094 | $ | 121,571 | $ | 90,301 | ||||||||||
Service cost
|
10,224 | 7,366 | 345 | 1,838 | 675 | |||||||||||||||
Interest cost
|
31,440 | 16,572 | 1,505 | 6,792 | 6,571 | |||||||||||||||
Plan participant contributions
|
604 | — | — | 407 | 197 | |||||||||||||||
Amendments
|
6,583 | 3,460 | 269 | 1,993 | 861 | |||||||||||||||
Actuarial loss
|
36,085 | 34,031 | 542 | 8,744 | (7,232 | ) | ||||||||||||||
Foreign currency effect
|
17,075 | — | 2,979 | (34 | ) | 14,130 | ||||||||||||||
Benefits paid
|
(30,983 | ) | (14,546 | ) | (1,447 | ) | (7,642 | ) | (7,348 | ) | ||||||||||
Benefit obligation at end of year
|
$ | 541,791 | $ | 284,680 | $ | 25,287 | $ | 133,669 | 98,155 | |||||||||||
Change in plan assets:
|
||||||||||||||||||||
Fair value of plan assets at beginning of year
|
$ | 458,622 | $ | 208,954 | $ | — | $ | 160,298 | $ | 89,370 | ||||||||||
Actual return on plan assets
|
(163 | ) | (14,454 | ) | — | 9,157 | 5,134 | |||||||||||||
Expenses paid
|
(856 | ) | (792 | ) | — | — | (64 | ) | ||||||||||||
Plan participant contributions
|
604 | — | — | 407 | 197 | |||||||||||||||
Foreign currency effects
|
13,686 | — | — | (156 | ) | 13,842 | ||||||||||||||
Employer contributions
|
20,445 | 14,952 | — | 4,186 | 1,307 | |||||||||||||||
Benefits paid
|
(29,180 | ) | (14,190 | ) | — | (7,642 | ) | (7,348 | ) | |||||||||||
Fair value of plan assets at end of year
|
$ | 463,158 | $ | 194,470 | $ | — | $ | 166,250 | $ | 102,438 | ||||||||||
Other |
||||||||||||||||||||
For the year ended October 31, 2010 | Consolidated | USA | Germany | United Kingdom | International | |||||||||||||||
|
||||||||||||||||||||
Funded status
|
$ | (65,975 | ) | $ | (81,153 | ) | $ | (28,548 | ) | $ | 44,027 | $ | (301 | ) | ||||||
Unrecognized net actuarial 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 | ||||||||||||||
Net amount recognized
|
$ | 66,278 | $ | 29,707 | $ | (23,676 | ) | $ | 40,418 | 19,829 | ||||||||||
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 | ) | |||||||||||
Accumlated other comprehensive income
|
132,253 | 110,860 | 4,872 | (3,609 | ) | 20,130 | ||||||||||||||
Net amount recognized
|
$ | 66,278 | $ | 29,707 | $ | (23,676 | ) | $ | 40,418 | $ | 19,829 | |||||||||
Other |
||||||||||||||||||||
For the year ended October 31, 2009 | Consolidated | USA | Germany | United Kingdom | International | |||||||||||||||
|
||||||||||||||||||||
Funded status
|
$ | (78,633 | ) | $ | (90,210 | ) | $ | (25,287 | ) | $ | 32,581 | $ | 4,283 | |||||||
Unrecognized net actuarial loss
|
130,065 | 109,122 | 506 | 4,206 | 16,231 | |||||||||||||||
Unrecognized prior service cost
|
5,169 | 5,169 | — | — | — | |||||||||||||||
Unrecognized initial net obligation
|
581 | (124 | ) | — | — | 705 | ||||||||||||||
Net amount recognized
|
$ | 57,182 | $ | 23,957 | $ | (24,781 | ) | $ | 36,787 | 21,219 | ||||||||||
Amounts recognized in the Consolidated Balance Sheets consist of:
|
||||||||||||||||||||
Prepaid benefit cost
|
$ | 41,953 | $ | — | $ | — | $ | 32,581 | $ | 9,372 | ||||||||||
Accrued benefit liability
|
(120,586 | ) | (90,210 | ) | (25,287 | ) | — | (5,089 | ) | |||||||||||
Accumlated other comprehensive income
|
130,065 | 109,122 | 506 | 4,206 | 16,231 | |||||||||||||||
Net amount recognized
|
$ | 51,432 | $ | 18,912 | $ | (24,781 | ) | $ | 36,787 | $ | 20,514 | |||||||||
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 | ||||||||
Asset Category | 2010 Actual | Target | ||||||
|
||||||||
Equity securities
|
56 | % | 54 | % | ||||
Debt securities
|
17 | % | 19 | % | ||||
Other
|
27 | % | 27 | % | ||||
Total
|
100 | % | 100 | % | ||||
Expected |
||||
Benefit |
||||
Year | Payments | |||
|
||||
2011
|
$ | 27,313 | ||
2012
|
$ | 29,486 | ||
2013
|
$ | 31,383 | ||
2014
|
$ | 31,875 | ||
2015
|
$ | 32,238 | ||
2016-2020
|
$ | 181,662 |
For the years ended October 31, | 2010 | 2009 | 2008 | |||||||||
|
||||||||||||
Service cost
|
$ | 19 | $ | 21 | $ | 23 | ||||||
Interest cost
|
1,565 | 1,896 | 1,880 | |||||||||
Amortization of prior service cost
|
(1,329 | ) | (1,308 | ) | (1,234 | ) | ||||||
Recognized net actuarial loss (gain)
|
(58 | ) | (195 | ) | (5 | ) | ||||||
$ | 197 | $ | 414 | $ | 664 | |||||||
October 31, |
October 31, |
|||||||
2010 | 2009 | |||||||
|
||||||||
Benefit obligation at beginning of year
|
$ | 25,396 | $ | 24,762 | ||||
Benefit obligation adjustment due to measurement date change and
other
|
— | 288 | ||||||
Service cost
|
19 | 21 | ||||||
Interest cost
|
1,565 | 1,896 | ||||||
Plan participants’ contributions
|
— | 214 | ||||||
Actuarial loss
|
85 | 279 | ||||||
Foreign currency effect
|
237 | 884 | ||||||
Plan ammendments
|
(3,215 | ) | — | |||||
Benefits paid
|
(2,532 | ) | (2,948 | ) | ||||
Benefit obligation at end of year
|
$ | 21,555 | $ | 25,396 | ||||
Funded status
|
$ | (21,555 | ) | $ | (25,396 | ) | ||
Unrecognized net actuarial loss
|
(2,075 | ) | (2,178 | ) | ||||
Unrecognized prior service credit
|
(14,255 | ) | (12,443 | ) | ||||
Net amount recognized
|
$ | (37,885 | ) | $ | (40,017 | ) | ||
Medical | ||||
|
||||
Current trend rate
|
7.9 | % | ||
Ultimate trend rate
|
5.0 | % | ||
Year ultimate trend rate reached
|
2017 |
1-Percentage-Point |
1-Percentage-Point |
|||||||
Increase | Decrease | |||||||
|
||||||||
Effect on total of service and interest cost components
|
$ | 101 | $ | (88 | ) | |||
Effect on postretirement benefit obligation
|
$ | 755 | $ | (641 | ) |
Expected |
||||
Benefit |
||||
Year | Payments | |||
|
||||
2011
|
$ | 2,997 | ||
2012
|
$ | 2,223 | ||
2013
|
$ | 2,150 | ||
2014
|
$ | 2,043 | ||
2015
|
$ | 1,949 | ||
2016-2020
|
$ | 8,402 |
|
NOTE 14— | CONTINGENT LIABILITIES |
|
NOTE 16— | EQUITY EARNINGS (LOSSES) OF UNCONSOLIDATED AFFILIATES, NET OF TAX AND NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
|
NOTE 17— | BUSINESS SEGMENT INFORMATION |
2010 | 20091 | 20081 | ||||||||||
|
||||||||||||
(As Adjusted) | ||||||||||||
Net sales:
|
||||||||||||
Rigid Industrial Packaging & Service
|
$ | 2,587,854 | $ | 2,266,890 | $ | 3,074,834 | ||||||
Flexible Products & Services
|
233,119 | 43,975 | 52,604 | |||||||||
Paper Packaging
|
624,092 | 460,712 | 644,298 | |||||||||
Land Management
|
16,472 | 20,640 | 18,795 | |||||||||
Total net sales
|
$ | 3,461,537 | $ | 2,792,217 | $ | 3,790,531 | ||||||
Operating profit:
|
||||||||||||
Operating profit, before the impact of restructuring charges,
restructuring-related inventory charges and acquisition-related
costs:
|
||||||||||||
Rigid Industrial Packaging & Service
|
$ | 291,066 | $ | 210,908 | $ | 325,956 | ||||||
Flexible Products & Services
|
18,761 | $ | 8,588 | $ | 8,679 | |||||||
Paper Packaging
|
60,640 | 35,526 | 69,967 | |||||||||
Land Management
|
9,001 | 22,237 | 20,571 | |||||||||
Total operating profit, before the impact of restructuring
charges, restructuring-related inventory charges and
acquisition-related costs:
|
379,468 | 277,259 | 425,173 | |||||||||
Restructuring charges:
|
||||||||||||
Rigid Industrial Packaging & Service
|
20,980 | 65,742 | 33,971 | |||||||||
Flexible Products & Services
|
624 | — | — | |||||||||
Paper Packaging
|
5,142 | 685 | 9,155 | |||||||||
Land Management
|
— | 163 | 76 | |||||||||
Total restructuring charges
|
26,746 | 66,590 | 43,202 | |||||||||
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
|
7,672 | — | — | |||||||||
Flexible Products & Services
|
19,504 | — | ||||||||||
Total acquisition-related costs
|
27,176 | — | — | |||||||||
Timberland disposals, net
|
||||||||||||
Land Management
|
— | — | 340 | |||||||||
Operating profit:
|
||||||||||||
Rigid Industrial Packaging
|
262,283 | 134,394 | 291,985 | |||||||||
Flexible Products & Services
|
(1,367 | ) | 8,588 | 8,679 | ||||||||
Paper Packaging
|
55,498 | 34,841 | 60,812 | |||||||||
Land Management
|
9,001 | 22,074 | 20,835 | |||||||||
Total operating profit
|
$ | 325,415 | $ | 199,897 | $ | 382,311 | ||||||
2010 | 2009 | 2008 | |||||||||||||
|
|||||||||||||||
(As Adjusted)1 | (As Adjusted)1 | ||||||||||||||
Assets:
|
|||||||||||||||
Rigid Industrial Packaging & Services
|
$ | 2,058,165 | $ | 1,783,821 | |||||||||||
Flexible Products & Services
|
353,715 | 15,296 | |||||||||||||
Paper Packaging
|
435,555 | 402,787 | |||||||||||||
Land Management
|
274,352 | 254,856 | |||||||||||||
Total segment
|
3,121,787 | 2,456,760 | |||||||||||||
Corporate and other
|
376,658 | 367,169 | |||||||||||||
Total assets
|
$ | 3,498,445 | $ | 2,823,929 | |||||||||||
Depreciation, depletion and amortization expense:
|
|||||||||||||||
Rigid Industrial Packaging & Services
|
$ | 79,050 | $ | 73,212 | $ | 73,730 | |||||||||
Flexible Products & Services
|
4,937 | 794 | 1,137 | ||||||||||||
Paper Packaging
|
29,204 | 25,517 | 27,172 | ||||||||||||
Land Management
|
2,783 | 3,104 | 4,339 | ||||||||||||
Total depreciation, depletion and amortization expense
|
$ | 115,974 | $ | 102,627 | $ | 106,378 | |||||||||
2010 | 2009 | 2008 | ||||||||||
|
||||||||||||
Net Sales
|
||||||||||||
North America
|
$ | 1,732,880 | $ | 1,530,438 | $ | 2,001,364 | ||||||
Europe, Middle East and Africa
|
1,171,363 | 835,117 | 1,278,363 | |||||||||
Other
|
557,294 | 426,662 | 510,804 | |||||||||
Total net sales
|
$ | 3,461,537 | $ | 2,792,217 | $ | 3,790,531 | ||||||
2010 | 2009 | |||||||
|
||||||||
(As Adjusted)1 | ||||||||
Assets:
|
||||||||
North America
|
$ | 1,895,475 | $ | 1,826,840 | ||||
Europe, Middle East and Africa
|
1,012,131 | 601,841 | ||||||
Other
|
590,839 | 395,248 | ||||||
Total assets
|
$ | 3,498,445 | $ | 2,823,929 | ||||
(1) | Amounts presented in 2009 and 2008 reflect the change in accounting principle from using a combination of the LIFO and FIFO inventory accounting methods to the FIFO method for all of our businesses effective November 1, 2009 and the realignment of the multiwall bag operations, previously included in the Paper Packaging segment, into the Flexible Products & Services segment. |
|
NOTE 18— | QUARTERLY FINANCIAL DATA (UNAUDITED) |
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. |
2009 | January 31 | April 30 | July 31 | October 31 | ||||||||||||
|
||||||||||||||||
(As Adjusted)2 | (As Adjusted)2 | (As Adjusted)2 | (As Adjusted)2 | |||||||||||||
Net sales
|
$ | 666,260 | $ | 647,897 | $ | 717,567 | $ | 760,493 | ||||||||
Gross profit
|
$ | 94,801 | $ | 96,860 | $ | 139,427 | $ | 168,556 | ||||||||
Net income
|
$ | (1,818 | ) | $ | 1,546 | $ | 39,547 | $ | 74,557 | |||||||
Net income attributable to Greif, Inc.
|
$ | (2,272 | ) | $ | 1,553 | $ | 37,811 | $ | 73,554 | |||||||
Earnings per share
|
||||||||||||||||
Basic:
|
||||||||||||||||
Class A Common Stock
|
$ | (0.03 | ) | $ | 0.03 | $ | 0.65 | $ | 1.27 | |||||||
Class B Common Stock
|
$ | (0.06 | ) | $ | 0.04 | $ | 0.98 | $ | 1.90 | |||||||
Diluted:
|
||||||||||||||||
Class A Common Stock
|
$ | (0.03 | ) | $ | 0.03 | $ | 0.65 | $ | 1.25 | |||||||
Class B Common Stock
|
$ | (0.06 | ) | $ | 0.04 | $ | 0.98 | $ | 1.90 | |||||||
Earnings per share were calculated using the following number of
shares:
|
||||||||||||||||
Basic:
|
||||||||||||||||
Class A Common Stock
|
24,130,385 | 24,352,826 | 24,386,195 | 24,445,491 | ||||||||||||
Class B Common Stock
|
22,516,029 | 22,462,266 | 22,462,266 | 24,462,266 | ||||||||||||
Diluted:
|
||||||||||||||||
Class A Common Stock
|
24,405,257 | 24,623,424 | 24,747,767 | 24,817,878 | ||||||||||||
Class B Common Stock
|
22,516,029 | 22,462,266 | 22,462,266 | 22,462,266 | ||||||||||||
Market price (Class A Common Stock):
|
||||||||||||||||
High
|
$ | 40.36 | $ | 46.48 | $ | 53.52 | $ | 57.94 | ||||||||
Low
|
$ | 27.07 | $ | 25.65 | $ | 40.18 | $ | 47.24 | ||||||||
Close
|
$ | 30.26 | $ | 45.27 | $ | 51.33 | $ | 53.52 | ||||||||
Market price (Class B Common Stock):
|
||||||||||||||||
High
|
$ | 35.90 | $ | 42.75 | $ | 48.71 | $ | 53.45 | ||||||||
Low
|
$ | 22.13 | $ | 25.50 | $ | 37.00 | $ | 44.14 | ||||||||
Close
|
$ | 30.37 | $ | 42.25 | $ | 47.15 | $ | 48.20 |
(2) | In the first quarter of 2010, the Company changed from using a combination of FIFO and LIFO inventory accounting methods to the FIFO method for all of its businesses. All amounts included herein have been presented on the FIFO basis. |
|
Balance at |
Charged to |
|||||||||||||||||||
Beginning of |
Costs and |
Charged to |
Balance at End |
|||||||||||||||||
Description | Period | Expenses | Other Accounts | Deductions | of Period | |||||||||||||||
|
||||||||||||||||||||
Year ended October 31, 2008:
|
||||||||||||||||||||
Allowance for doubtful accounts
|
$ | 12.5 | $ | 2.8 | $ | (3.0 | ) | $ | 1.2 | $ | 13.5 | |||||||||
Environmental reserves
|
$ | 40.6 | $ | 0.4 | $ | (3.2 | ) | $ | (0.6 | ) | $ | 37.2 | ||||||||
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 |