UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 2, 2006 (May 31, 2006)

GREIF, INC.
(Exact name of registrant as specified in its charter)

 
					
Delaware	 	001-00566	 	31-4388903	
(State or other jurisdiction
of incorporation)	 	(Commission File Number)	 	(IRS 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
Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Section 2 – Financial Information
Item 2.02. Results of Operations and Financial Condition.
On May 31, 2006, the Company issued a press release (the “Earnings Release”) announcing the financial results for its second quarter ended April 30, 2006. The full text of the Earnings Release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The Earnings Release included the following non-GAAP financial measures (the “non-GAAP Measures”): (i) net income before restructuring charges and timberland gains; (ii) diluted earnings per Class A and Class B share before restructuring charges and timberland gains; (iii) operating profit before restructuring charges and timberland gains; (iv) operating profit before restructuring charges; and (v) net debt. Net income before restructuring charges and timberland gains is equal to GAAP net income plus restructuring charges less timberland gains, net of tax. Diluted earnings per Class A and Class B share before restructuring charges and timberland gains is equal to GAAP diluted earnings per Class A and Class B share plus the effects of restructuring charges less the effects of timberland gains, net of tax. Operating profit before restructuring charges and timberland gains is equal to GAAP operating profit plus restructuring charges less timberland gains. Operating profit before restructuring charges is equal to GAAP operating profit plus restructuring charges. Net debt is equal to GAAP long-term debt plus short-term borrowings less cash and cash equivalents.
The Company discloses the non-GAAP Measures described in Items (i) through (iv), above, because management believes that these non-GAAP Measures are a better indication of the Company’s operational performance than GAAP net income, diluted earnings per Class A and Class B share and operating profit since they exclude restructuring charges, which are not representative of ongoing operations, and timberland gains, which are volatile from period to period. These non-GAAP Measures provide a more stable platform on which to compare the historical performance of the Company.
In addition, the Company disclosed the non-GAAP Measure of net debt, described in Item (v), above, because management believes that this non-GAAP Measure gave a better indication of the Company’s debt position as of the fiscal quarter end than long-term debt. As of April 30, 2006, the Company held significant cash and cash equivalents that could have been used to pay down long-term debt, but management chose not to do so, among other reasons, to avoid associated prepayment premiums, repatriation costs and breakage fees.

Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
 
(c)	Exhibits.	

Exhibit No.	 	Description	
99.1	 	Press release issued by Greif, Inc. on May 31, 2006, announcing the financial results for its second quarter ended April 30, 2006.	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	 	GREIF, INC.	
			
Date: June 2, 2006	 	By	 	/s/ Donald S. Huml	
	 		 	Donald S. Huml, Executive Vice President
and Chief Financial Officer	

EXHIBIT INDEX

Exhibit No.	 	Description	
99.1	 	Press release issued by Greif, Inc. on May 31, 2006, announcing the financial results for its second quarter ended April 30, 2006.	
 
EXHIBIT 99.1
Greif, Inc. Reports Second Quarter 2006 Results
 
•	 	Record net sales were $620.1 million for the second quarter of 2006. Net sales increased 1 percent (3 percent excluding the impact of foreign currency translation) for the second quarter of 2006 from the second quarter of 2005.	
 
•	 	Operating profit before special items, as defined below, rose 23 percent to $52.6 million in the second quarter of 2006 compared to $42.7 million in the second quarter of 2005. Operating profit based on accounting principles generally accepted in the United States (GAAP) was $51.6 million in the second quarter of 2006 compared to $35.4 million in the second quarter of 2005.	
 
•	 	Diluted earnings per Class A share increased 27 percent in the second quarter of 2006 to $1.03 before special items compared to $0.81 before special items in the second quarter of 2005. GAAP diluted earnings per Class A share were $0.97 in the second quarter of 2006 and $0.57 in the second quarter of 2005.	
DELAWARE, Ohio (May 31, 2006) – Greif, Inc. (NYSE: GEF, GEF.B), a global leader in industrial packaging with niche businesses in containerboard, corrugated packaging and timber, today announced results for its second quarter of 2006, which ended on April 30, 2006.
Michael J. Gasser, Chairman and Chief Executive Officer, commented, “Our second quarter results reflect improving volumes and margin expansion on sequential quarter and year-over-year comparisons. These solid results were driven by contributions from the disciplined Greif Business System and improving industry fundamentals in all of our business segments. At the midpoint of fiscal 2006, we are ahead of our original plan and anticipate building upon these achievements during the remainder of the year.”
Special Items and GAAP to Non-GAAP Reconciliation
Special items are as follows: (i) for the second quarter of 2006, restructuring charges of $10.3 million ($7.2 million net of tax) and timberland gains of $9.2 million ($5.5 million net of tax); and (ii) for the second quarter of 2005, restructuring charges of $10.6 million ($7.5 million net of tax), timberland gains of $3.4 million ($2.4 million net of tax) and debt extinguishment charge of $2.8 million ($2.0 million net of tax). A reconciliation of the differences between all non-GAAP financial measures used in this release with the most directly comparable GAAP financial measures is included in the financial schedules that are a part of this release.

Consolidated Results
Net Sales
Net sales were $620.1 million in the second quarter of 2006 compared to $613.0 million in the second quarter of 2005. The $7.1 million increase was primarily due to the Paper, Packaging & Services segment. As stated previously, net sales increased 3 percent, after excluding the impact of foreign currency translation, for the second quarter of 2006 from the same quarter last year. This increase is primarily due to generally higher sales volumes in all three of the Company’s business segments. Net sales changes for each of the Company’s business segments are discussed in more detail below. The Company has previously announced and implemented price increases since the first quarter of 2006 for certain of its products due to higher raw material costs.
Gross Profit
Gross profit was $109.4 million, or 17.6 percent of net sales, in the second quarter of 2006 compared to $97.9 million, or 16.0 percent of net sales, in the second quarter of 2005. Gross profit margin benefited from positive contributions due to the Greif Business System and generally lower raw material costs compared to the second quarter of 2005. These benefits were partially offset by higher energy and transportation costs compared to the second quarter of 2005.
Selling, General & Administrative (SG&A) Expenses
SG&A expenses were $62.4 million, or 10.1 percent of net sales, in the second quarter of 2006 compared to $56.1 million, or 9.1 percent of net sales, in the second quarter of 2005. The increase was primarily due to higher accruals for performance-based incentive plans resulting from improvements in the Company’s current and planned results. On a full-year basis, management expects SG&A expenses to be less than the 10 percent of net sales target for fiscal 2006.
Operating Profit
Operating profit before special items was $52.6 million in the second quarter of 2006 compared to $42.7 million in the second quarter of 2005. The $9.9 million increase was due to the Industrial Packaging & Services segment ($4.8 million), the Paper, Packaging & Services segment ($4.1 million) and the Timber segment ($1.1 million). There were $10.3 million and $10.6 million of restructuring charges and $9.2 million and $3.4 million of timberland gains during the second quarter of 2006 and 2005, respectively. GAAP operating profit was $51.6 million in the second quarter of 2006 compared to $35.4 million in the second quarter of 2005.

Net Income and Diluted Earnings Per Share
Net income before special items was $30.4 million for the second quarter of 2006 compared to $23.9 million in the second quarter of 2005. Diluted earnings per share before special items were $1.03 per Class A share compared to $0.81 per Class A share and $1.58 per Class B share compared to $1.25 per Class B share for the second quarter of 2006 and 2005, respectively.
The Company had GAAP net income of $28.7 million, or $0.97 per diluted Class A share and $1.49 per diluted Class B share, in the second quarter of 2006 compared to GAAP net income of $16.8 million, or $0.57 per diluted Class A share and $0.88 per diluted Class B share, in the second quarter of 2005.
Business Group Results
Industrial Packaging & Services
The Industrial Packaging & Services segment offers a comprehensive line of industrial packaging products, such as steel, fibre and plastic drums, intermediate bulk containers, closure systems for industrial packaging products and polycarbonate water bottles throughout the world. The key factors influencing profitability in the Industrial Packaging & Services segment are:
 
 	•	 	Selling prices and sales volumes;	
 
 	•	 	Raw material costs, primarily steel, resin and containerboard;	
 
 	•	 	Benefits from the Greif Business System;	
 
 	•	 	Restructuring charges; and	
 
 	•	 	Impact of foreign currency translation.	
In this segment, net sales were $459.0 million in the second quarter of 2006 compared to $458.4 million in the second quarter of 2005. Net sales rose 2 percent excluding the impact of foreign currency translation. The improvement in net sales was primarily due to organic growth in steel drums and increased volume in fibre and plastic drums, which benefited from two tuck-in acquisitions in the fourth quarter of 2005. This improvement was partially offset by lower steel drum selling prices resulting from lower steel costs on a year-over-year comparison.
The Industrial Packaging & Services segment’s gross profit margin improved to 17.6 percent in the second quarter of 2006 from 15.6 percent in the second quarter of 2005. This improvement was due to lower raw material costs, primarily steel, and the Greif Business System compared to the same period last year.
Operating profit before restructuring charges rose to $34.2 million in the second quarter of 2006 from $29.4 million in the second quarter of 2005. Restructuring charges were $8.3 million in the second quarter of 2006 compared with $8.8 million a year ago. GAAP operating profit was $25.9 million in the second quarter of 2006 compared to $20.6 million in the second quarter of 2005.

Paper, Packaging & Services
The Paper, Packaging & Services segment sells containerboard, corrugated sheets and other corrugated products and multiwall bags in North America. The key factors influencing profitability in the Paper, Packaging & Services segment are:
 
 	•	 	Selling prices and sales volumes;	
 
 	•	 	Raw material costs, primarily OCC;	
 
 	•	 	Energy and transportation costs;	
 
 	•	 	Benefits from the Greif Business System; and	
 
 	•	 	Restructuring charges.	
In this segment, net sales were $156.5 million in the second quarter of 2006 compared to $150.0 million in the second quarter of 2005. The increase in net sales was primarily due to improved sales volumes of containerboard and corrugated sheets and higher containerboard selling prices.
Operating profit before restructuring charges was $14.4 million in the second quarter of 2006 compared to $10.4 million in the second quarter of 2005. Restructuring charges were $2.0 million in the second quarter of 2006 compared to $1.8 million in the second quarter of 2005. The increase in operating profit was primarily due to the improvement in net sales, lower OCC costs and gain on sale of a warehouse ($2.0 million), partially offset by higher energy and transportation costs ($5.3 million) as compared to the second quarter of 2005. GAAP operating profit was $12.4 million in the second quarter of 2006 compared to $8.6 million in the second quarter of 2005.
Timber
The Timber segment consists of approximately 251,500 acres of timber properties in southeastern United States, which are actively harvested and regenerated, and approximately 37,000 acres in Canada. The key factors influencing profitability in the Timber segment are:
 
 	•	 	Planned level of timber sales;	
 
 	•	 	Gains on sale of timberland; and	
 
 	•	 	Gains on sale of special use properties (surplus, higher and better use, and development properties).	
Net sales were $4.6 million in the second quarter of 2006 compared to $4.5 million in the second quarter of 2005. Operating profit before special items was $4.0 million (including $1.5 million resulting from the sale of surplus as well as higher and better use properties) in the second quarter of 2006 compared to $2.9 million in the second quarter of 2005. Special items included insignificant restructuring charges in both periods and timberland gains of $9.2 million in the second quarter of 2006 and $3.4 million in the second quarter of 2005. GAAP operating profit was $13.2 million in the second quarter of 2006 compared to $6.2 million in the second quarter of 2005.
The Company completed the final phase of its previously reported $90 million sale of timberland, timber and associated assets in the second quarter of 2006. In this phase, the Company sold 5,700 acres of timberland holdings in Florida for $9.7 million, resulting in a gain of $9.0 million.

Greif Business System Update
The Greif Business System generates productivity improvements and achieves permanent cost reductions. The opportunities continue to include, but are not limited to, improved labor productivity, material yield and other manufacturing efficiencies, coupled with further footprint rationalization. Annualized benefits of approximately $125 million were achieved through the end of fiscal 2005. The Company is implementing a strategic sourcing initiative as part of the Greif Business System to more effectively leverage its global spend and lay the foundation for a world-class sourcing and supply chain capability. The Company expects incremental benefits of approximately $30 million, primarily from the strategic sourcing initiative, during fiscal 2006. Incremental benefits from the Greif Business System totaled approximately $23 million for the six months ended April 30, 2006.
Restructuring Charges
The Company had $10.3 million of restructuring charges during the second quarter of 2006. These charges were primarily the result of closing two industrial packaging facilities in the United Kingdom, an impairment charge in connection with closing an industrial packaging facility in France and the consolidation of corrugated sheet operations in the United States. In addition, severance costs were incurred due to the elimination of certain operating and administrative positions throughout the world. For the second quarter of 2005, restructuring charges were $10.6 million.
Financing Arrangements
Net debt outstanding was $333.6 million at April 30, 2006 versus $437.7 million on the same date last year and $325.2 million at Oct. 31, 2005. Net debt is long-term debt plus short-term borrowings less cash and cash equivalents. GAAP long-term debt was $459.2 million at April 30, 2006 compared to $466.2 million at April 30, 2005 and $430.4 million at Oct. 31, 2005.
Interest expense was $9.8 million and $10.3 million in the second quarter of 2006 and 2005, respectively. The decrease was due to lower average debt outstanding as well as lower average interest rates during the second quarter of 2006 compared to the second quarter of 2005.
Capital Expenditures
Capital expenditures were $35.6 million, excluding timberland purchases of $1.2 million, in the second quarter of 2006 compared with capital expenditures of $16.2 million, excluding timberland purchases of $1.3 million, during the second quarter of 2005.

For fiscal 2006, capital expenditures are expected to be approximately $75 million, excluding timberland purchases, which would be approximately $25 million below the Company’s anticipated depreciation expense of approximately $100 million.
Stock Repurchases and Cash Dividends
During the second quarter of 2006, the Company repurchased 41,200 shares of Class A and Class B Common Stock pursuant to its stock repurchase program. The Board of Directors has authorized the Company to purchase up to two million shares of the Company’s Class A or Class B Common Stock or any combination thereof. As of April 30, 2006, the Company had repurchased 1,068,424 shares, including 650,276 shares of Class A Common Stock and 418,148 shares of Class B Common Stock, under this program.
The Company paid $6.9 million of cash dividends to its Class A and Class B stockholders in the second quarter of 2006 compared to $4.6 million for the second quarter of 2005. This represents an increase of approximately 50 percent per share for both classes of the Company’s common stock compared to the second quarter of 2005.
On May 30, 2006, the Board of Directors declared quarterly cash dividends of $0.36 per share of Class A Common Stock and $0.54 per share of Class B Common Stock, which marks the second consecutive year the Company has increased quarterly cash dividends by 50 percent. These dividends are payable on July 1, 2006 to shareholders of record at close of business on June 16, 2006.
Company Outlook
The Company enters the second half of fiscal 2006 with positive momentum based on higher sales volumes and improved margins during the first half of fiscal 2006. Profitability has benefited from ongoing initiatives to further embed the Greif Business Systems throughout the Company, including recent contributions from strategic sourcing, coupled with improving industry fundamentals.
The Company’s guidance, which excludes special items, is being raised $0.30 for its Class A common stock for fiscal 2006 to a range of $3.85 to $3.95 per share. This range is approximately 18 percent to 21 percent above fiscal 2005 on a similar basis.
Conference Call
The Company will host a conference call to discuss its second quarter of 2006 results on June 1, 2006, at 10 a.m. ET. To participate, domestic callers should call 800-218-0713 and ask for the Greif conference call. The number for international callers is +1 303 262 2140. Phone lines will open at 9:50 a.m. ET.

The conference call will also be available through a live webcast, including slides, which can be accessed at www.greif.com. A replay of the conference call will be available on the Company’s website approximately one hour following the call.
About Greif
Greif is a world leader in industrial packaging products and services. The Company provides extensive expertise in steel, plastic, fibre, corrugated and multiwall containers for a wide range of industries. Greif also produces containerboard and manages timber properties in the United States. Greif is strategically positioned in more than 40 countries to serve multinational as well as regional customers. Additional information is on the Company’s website at www.greif.com.
Forward-Looking Statements
All statements other than statements of historical facts included in this news release, including, without limitation, statements regarding the Company’s 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 the Private Securities Litigation Reform Act of 1995. 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” or “target” or the negative thereof or variations thereon or similar terminology. All forward-looking statements made in this news release are based on information currently available to management. Although the Company believes that the expectations reflected in forward-looking statements have a reasonable basis, the Company 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. Such risks and uncertainties that might cause a difference include, but are not limited to: general economic and business conditions, including a prolonged or substantial economic downturn; changing trends and demands in the industries in which the Company competes, including industry over-capacity; industry competition; the continuing consolidation of the Company’s customer base for its industrial packaging, containerboard and corrugated products; political instability in those foreign countries where the Company manufactures and sells its products; foreign currency fluctuations and devaluations; availability and costs of raw materials for the manufacture of the Company’s products, particularly steel, resin and old corrugated containers; price fluctuations in energy costs; costs associated with litigation or claims against the Company pertaining to environmental, safety and health, product liability and other matters; work stoppages and other labor relations matters; property loss resulting from wars, acts of terrorism or natural disasters; the Company’s ability to integrate its newly acquired operations effectively with its existing business; the Company’s ability to achieve improved operating efficiencies and capabilities; the Company’s ability to effectively embed and realize improvements from the Greif Business System; the frequency and volume of sales of the Company’s timber, timberland and special use timberland; and the

deviation of actual results from the estimates and/or assumptions used by the Company in the application of its significant accounting policies. These and other risks and uncertainties that could materially affect the Company’s consolidated financial results are further discussed in its filings with the Securities and Exchange Commission, including its Form 10-K for the year ended Oct. 31, 2005. The Company assumes no obligation to update any forward-looking statements.

GREIF, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(Dollars in thousands, except per share amounts)

 	  	Three months ended
April 30,	  	Six months ended
April 30,	
 	  	2006	  	2005	  	2006	 	 	2005	
Net sales	  	$	620,107	  	$	612,960	  	$	1,202,423	 	 	$	1,195,524	
Cost of products sold	  	 	510,664	  	 	515,042	  	 	1,003,308	 	 	 	1,008,880	
	  	 	 	  	 	 	  	 	 	 	 	 	 	
Gross profit	  	 	109,443	  	 	97,918	  	 	199,115	 	 	 	186,644	
					
Selling, general and administrative expenses	  	 	62,378	  	 	56,068	  	 	121,832	 	 	 	115,789	
Restructuring charges	  	 	10,287	  	 	10,621	  	 	15,755	 	 	 	17,807	
Gain on sale of assets	  	 	14,786	  	 	4,194	  	 	47,997	 	 	 	14,538	
	  	 	 	  	 	 	  	 	 	 	 	 	 	
Operating profit	  	 	51,564	  	 	35,423	  	 	109,525	 	 	 	67,586	
					
Interest expense, net	  	 	9,794	  	 	10,296	  	 	18,967	 	 	 	19,954	
Debt extinguishment charge	  	 	—  	  	 	2,828	  	 	—  	 	 	 	2,828	
Other income (loss), net	  	 	288	  	 	1,469	  	 	(194	)	 	 	65	
	  	 	 	  	 	 	  	 	 	 	 	 	 	
Income before income tax expense	  	 	42,058	  	 	23,768	  	 	90,364	 	 	 	44,869	
					
Income tax expense	  	 	13,365	  	 	7,001	  	 	28,319	 	 	 	12,966	
	  	 	 	  	 	 	  	 	 	 	 	 	 	
Net income	  	$	28,693	  	$	16,767	  	$	62,045	 	 	$	31,903	
	  	 	 	  	 	 	  	 	 	 	 	 	 	
Basic earnings per share:	  			  			  				 			
Class A Common Stock	  	$	0.99	  	$	0.58	  	$	2.15	 	 	$	1.12	
Class B Common Stock	  	$	1.49	  	$	0.88	  	$	3.22	 	 	$	1.67	
					
Diluted earnings per share:	  			  			  				 			
Class A Common Stock	  	$	0.97	  	$	0.57	  	$	2.11	 	 	$	1.09	
Class B Common Stock	  	$	1.49	  	$	0.88	  	$	3.22	 	 	$	1.67	
					
Earnings per share were calculated using the following number of shares:	  			  			  				 			
					
Basic earnings per share:	  			  			  				 			
Class A Common Stock	  	 	11,543,093	  	 	11,377,891	  	 	11,542,626	 	 	 	11,248,592	
Class B Common Stock	  	 	11,530,487	  	 	11,561,189	  	 	11,534,566	 	 	 	11,600,974	
					
Diluted earnings per share:	  			  			  				 			
Class A Common Stock	  	 	11,858,020	  	 	11,813,749	  	 	11,852,643	 	 	 	11,636,293	
Class B Common Stock	  	 	11,530,487	  	 	11,561,189	  	 	11,534,566	 	 	 	11,600,974	

GREIF, INC. AND SUBSIDIARY COMPANIES
SEGMENT DATA
UNAUDITED
(Dollars in thousands)

 	  	Three months ended
April 30,	  	Six months ended
April 30,	
 	  	2006	  	2005	  	2006	  	2005	
Net sales	  			  			  			  			
Industrial Packaging & Services	  	$	459,008	  	$	458,404	  	$	888,728	  	$	887,446	
Paper, Packaging & Services	  	 	156,483	  	 	150,034	  	 	303,522	  	 	298,239	
Timber	  	 	4,616	  	 	4,522	  	 	10,173	  	 	9,839	
	  	 	 	  	 	 	  	 	 	  	 	 	
Total	  	$	620,107	  	$	612,960	  	$	1,202,423	  	$	1,195,524	
	  	 	 	  	 	 	  	 	 	  	 	 	
Operating profit	  			  			  			  			
Operating profit before restructuring charges and timberland gains:	  			  			  			  			
Industrial Packaging & Services	  	$	34,205	  	$	29,411	  	$	58,445	  	$	47,090	
Paper, Packaging & Services	  	 	14,425	  	 	10,372	  	 	18,682	  	 	19,963	
Timber	  	 	3,983	  	 	2,868	  	 	7,346	  	 	6,875	
	  	 	 	  	 	 	  	 	 	  	 	 	
Operating profit before restructuring charges and timberland gains	  	 	52,613	  	 	42,651	  	 	84,473	  	 	73,928	
	  	 	 	  	 	 	  	 	 	  	 	 	
Restructuring charges:	  			  			  			  			
Industrial Packaging & Services	  	 	8,265	  	 	8,809	  	 	12,487	  	 	15,607	
Paper, Packaging & Services	  	 	2,022	  	 	1,764	  	 	3,258	  	 	2,141	
Timber	  	 	—  	  	 	48	  	 	10	  	 	59	
	  	 	 	  	 	 	  	 	 	  	 	 	
Restructuring charges	  	 	10,287	  	 	10,621	  	 	15,755	  	 	17,807	
	  	 	 	  	 	 	  	 	 	  	 	 	
Timberland gains:	  			  			  			  			
Timber	  	 	9,238	  	 	3,393	  	 	40,807	  	 	11,465	
	  	 	 	  	 	 	  	 	 	  	 	 	
Total	  	$	51,564	  	$	35,423	  	$	109,525	  	$	67,586	
	  	 	 	  	 	 	  	 	 	  	 	 	
Depreciation, depletion and amortization expense	  			  			  			  			
Industrial Packaging & Services	  	$	15,143	  	$	16,176	  	$	30,225	  	$	32,312	
Paper, Packaging & Services	  	 	7,201	  	 	8,322	  	 	15,210	  	 	16,774	
Timber	  	 	981	  	 	694	  	 	2,564	  	 	1,088	
	  	 	 	  	 	 	  	 	 	  	 	 	
Total	  	$	23,325	  	$	25,192	  	$	47,999	  	$	50,174	

GREIF, INC. AND SUBSIDIARY COMPANIES
GEOGRAPHIC DATA
UNAUDITED
(Dollars in thousands)

 	  	Three months ended
April 30,	  	Six months ended
April 30,	
 	  	2006	  	2005	  	2006	  	2005	
Net sales	  			  			  			  			
North America	  	$	366,338	  	$	332,515	  	$	705,479	  	$	649,691	
Europe	  	 	167,079	  	 	191,316	  	 	323,108	  	 	367,486	
Other	  	 	86,690	  	 	89,129	  	 	173,836	  	 	178,347	
	  	 	 	  	 	 	  	 	 	  	 	 	
Total	  	$	620,107	  	$	612,960	  	$	1,202,423	  	$	1,195,524	
	  	 	 	  	 	 	  	 	 	  	 	 	
Operating profit	  			  			  			  			
Operating profit before restructuring charges and timberland gains:	  			  			  			  			
North America	  	$	28,354	  	$	19,303	  	$	39,788	  	$	36,940	
Europe	  	 	14,288	  	 	13,883	  	 	26,955	  	 	19,923	
Other	  	 	9,971	  	 	9,465	  	 	17,730	  	 	17,065	
	  	 	 	  	 	 	  	 	 	  	 	 	
Operating profit before restructuring charges and timberland gains	  	 	52,613	  	 	42,651	  	 	84,473	  	 	73,928	
Restructuring charges	  	 	10,287	  	 	10,621	  	 	15,755	  	 	17,807	
Timberland gains	  	 	9,238	  	 	3,393	  	 	40,807	  	 	11,465	
	  	 	 	  	 	 	  	 	 	  	 	 	
Total	  	$	51,564	  	$	35,423	  	$	109,525	  	$	67,586	

GREIF, INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(Dollars in thousands)

 	  	April 30,
2006	  	October 31,
2005	
ASSETS	  			  			
			
CURRENT ASSETS	  			  			
Cash and cash equivalents	  	$	152,030	  	$	122,411	
Trade accounts receivable	  	 	283,496	  	 	258,636	
Inventories	  	 	170,958	  	 	170,533	
Other current assets	  	 	98,699	  	 	74,372	
	  	 	 	  	 	 	
	  	 	705,183	  	 	625,952	
	  	 	 	  	 	 	
LONG-TERM ASSETS	  			  			
Goodwill	  	 	249,505	  	 	263,703	
Intangible assets	  	 	35,975	  	 	25,015	
Assets held by special purpose entities	  	 	50,891	  	 	50,891	
Other long-term assets	  	 	53,483	  	 	55,706	
	  	 	 	  	 	 	
	  	 	389,854	  	 	395,315	
	  	 	 	  	 	 	
PROPERTIES, PLANTS AND EQUIPMENT	  	 	882,647	  	 	862,056	
	  	 	 	  	 	 	
	  	$	1,977,684	  	$	1,883,323	
	  	 	 	  	 	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	  			  			
			
CURRENT LIABILITIES	  			  			
Accounts payable	  	$	225,423	  	$	234,672	
Short-term borrowings	  	 	26,459	  	 	17,173	
Other current liabilities	  	 	130,501	  	 	131,139	
	  	 	 	  	 	 	
	  	 	382,383	  	 	382,984	
	  	 	 	  	 	 	
LONG-TERM LIABILITIES	  			  			
Long-term debt	  	 	459,190	  	 	430,400	
Liabilities held by special purpose entities	  	 	43,250	  	 	43,250	
Other long-term liabilities	  	 	316,851	  	 	294,105	
	  	 	 	  	 	 	
	  	 	819,291	  	 	767,755	
	  	 	 	  	 	 	
MINORITY INTEREST	  	 	4,027	  	 	1,696	
	  	 	 	  	 	 	
SHAREHOLDERS’ EQUITY	  	 	771,983	  	 	730,888	
	  	 	 	  	 	 	
	  	$	1,977,684	  	$	1,883,323	

GREIF, INC. AND SUBSIDIARY COMPANIES
GAAP TO NON-GAAP RECONCILIATION
UNAUDITED
(Dollars in thousands, except per share amounts)

 	  	Three months ended April 30,
2006	 	 	Three months ended April 30,
2005	 	
 	  	 	 	 	Diluted per share
amounts	 	 	 	 	 	Diluted per share
amounts	 	
 	  	 	 	 	Class A	 	 	Class B	 	 	 	 	 	Class A	 	 	Class B	 	
GAAP – operating profit	  	$	51,564	 	 				 				 	$	35,423	 	 				 				
Restructuring charges	  	 	10,287	 	 				 				 	 	10,621	 	 				 				
Timberland gains	  	 	(9,238	)	 				 				 	 	(3,393	)	 				 				
	  	 	 	 	 				 				 	 	 	 	 				 				
Non-GAAP – operating profit before restructuring charges and timberland gains	  	$	52,613	 	 				 				 	$	42,651	 	 				 				
	  	 	 	 	 				 				 	 	 	 	 				 				
GAAP – net income	  	$	28,693	 	 	$	0.97	 	 	$	1.49	 	 	$	16,767	 	 	$	0.57	 	 	$	0.88	 	
Restructuring charges, net of tax	  	 	7,249	 	 	 	0.25	 	 	 	0.38	 	 	 	7,506	 	 	 	0.25	 	 	 	0.40	 	
Timberland gains, net of tax	  	 	(5,529	)	 	 	(0.19	)	 	 	(0.29	)	 	 	(2,398	)	 	 	(0.08	)	 	 	(0.13	)	
Debt extinguishment charge, net of tax	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1,999	 	 	 	0.07	 	 	 	0.10	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP – net income before restructuring charges, debt extinguishment charge and timberland gains	  	$	30,413	 	 	$	1.03	 	 	$	1.58	 	 	$	23,874	 	 	$	0.81	 	 	$	1.25	 	

 	  	Six months ended April 30,
2006	 	 	Six months ended April 30,
2005	 	
 	  	 	 	 	Diluted per share
amounts	 	 	 	 	 	Diluted per share
amounts	 	
 	  	 	 	 	Class A	 	 	Class B	 	 	 	 	 	Class A	 	 	Class B	 	
GAAP – operating profit	  	$	109,525	 	 				 				 	$	67,586	 	 				 				
Restructuring charges	  	 	15,755	 	 				 				 	 	17,807	 	 				 				
Timberland gains	  	 	(40,807	)	 				 				 	 	(11,465	)	 				 				
	  	 	 	 	 				 				 	 	 	 	 				 				
Non-GAAP – operating profit before restructuring charges and timberland gains	  	$	84,473	 	 				 				 	$	73,928	 	 				 				
	  	 	 	 	 				 				 	 	 	 	 				 				
GAAP – net income	  	$	62,045	 	 	$	2.11	 	 	$	3.22	 	 	$	31,903	 	 	$	1.09	 	 	$	1.67	 	
Restructuring charges, net of tax	  	 	11,536	 	 	 	0.39	 	 	 	0.60	 	 	 	12,696	 	 	 	0.43	 	 	 	0.66	 	
Timberland gains, net of tax	  	 	(25,758	)	 	 	(0.87	)	 	 	(1.34	)	 	 	(8,175	)	 	 	(0.28	)	 	 	(0.43	)	
Debt extinguishment charge, net of tax	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	2,016	 	 	 	0.07	 	 	 	0.11	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP – net income before restructuring charges, debt extinguishment charge and timberland gains	  	$	47,823	 	 	$	1.63	 	 	$	2.48	 	 	$	38,440	 	 	$	1.31	 	 	$	2.01	 	

NOTE:
During the first half of 2006, the Company sold 21,000 acres of timberland holdings in Florida. The tax effect of the gain for this transaction is calculated using a 38.1 percent tax rate. The other adjustments to reconcile the GAAP to non-GAAP amounts are tax effected using the consolidated effective tax rate excluding the impact of this timberland sale.
GREIF, INC. AND SUBSIDIARY COMPANIES
GAAP TO NON-GAAP RECONCILIATION (CONTINUED)
UNAUDITED
(Dollars in thousands)

 	  	Three months ended
April 30,	 	 	Six months ended
April 30,	 	
 	  	2006	 	 	2005	 	 	2006	 	 	2005	 	
Industrial Packaging & Services	  				 				 				 				
GAAP – operating profit	  	$	25,940	 	 	$	20,602	 	 	$	45,958	 	 	$	31,483	 	
Restructuring charges	  	 	8,265	 	 	 	8,809	 	 	 	12,487	 	 	 	15,607	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP – operating profit before restructuring charges	  	$	34,205	 	 	$	29,411	 	 	$	58,445	 	 	$	47,090	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Paper, Packaging & Services	  				 				 				 				
GAAP – operating profit	  	$	12,403	 	 	$	8,608	 	 	$	15,424	 	 	$	17,822	 	
Restructuring charges	  	 	2,022	 	 	 	1,764	 	 	 	3,258	 	 	 	2,141	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP – operating profit before restructuring charges	  	$	14,425	 	 	$	10,372	 	 	$	18,682	 	 	$	19,963	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Timber	  				 				 				 				
GAAP – operating profit	  	$	13,221	 	 	$	6,213	 	 	$	48,143	 	 	$	18,281	 	
Restructuring charges	  	 	—  	 	 	 	48	 	 	 	10	 	 	 	59	 	
Timberland gains	  	 	(9,238	)	 	 	(3,393	)	 	 	(40,807	)	 	 	(11,465	)	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP – operating profit before restructuring charges and timberland gains	  	$	3,983	 	 	$	2,868	 	 	$	7,346	 	 	$	6,875	 	

GREIF, INC. AND SUBSIDIARY COMPANIES
GAAP TO NON-GAAP RECONCILIATION (CONTINUED)
UNAUDITED
(Dollars in thousands)

 	  	April 30,
2006	 	 	October 31,
2005	 	 	April 30,
2005	 	
GAAP – long-term debt	  	$	459,190	 	 	$	430,400	 	 	$	466,215	 	
Short-term borrowings	  	 	26,459	 	 	 	17,173	 	 	 	23,506	 	
Cash and cash equivalents	  	 	(152,030	)	 	 	(122,411	)	 	 	(52,029	)	
	  	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP net debt	  	$	333,619	 	 	$	325,162	 	 	$	437,692