|
S
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the quarterly period ended
June 30, 2012
|
£
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the transition period from
to
|
Georgia
|
|
62-0342590
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
504 Thrasher Street, Norcross, Georgia
|
|
30071
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
S
|
|
Accelerated filer
£
|
Non-accelerated filer
£
(Do not check if smaller reporting company)
|
|
Smaller reporting company
£
|
Class
|
|
Outstanding as of July 20, 2012
|
Class A Common Stock, $0.01 par value
|
|
70,768,614
|
|
|
|
Page
|
PART I
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
PART II
|
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
Item 1.
|
FINANCIAL STATEMENTS (UNAUDITED)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net sales
|
$
|
2,303.2
|
|
|
$
|
1,382.1
|
|
|
$
|
6,853.8
|
|
|
$
|
2,936.1
|
|
Cost of goods sold
|
1,943.4
|
|
|
1,169.7
|
|
|
5,741.0
|
|
|
2,378.6
|
|
||||
Gross profit
|
359.8
|
|
|
212.4
|
|
|
1,112.8
|
|
|
557.5
|
|
||||
Selling, general and administrative expenses
|
229.6
|
|
|
145.3
|
|
|
685.1
|
|
|
316.8
|
|
||||
Restructuring and other costs, net
|
13.7
|
|
|
55.5
|
|
|
52.1
|
|
|
62.4
|
|
||||
Operating profit
|
116.5
|
|
|
11.6
|
|
|
375.6
|
|
|
178.3
|
|
||||
Interest expense
|
(26.8
|
)
|
|
(22.8
|
)
|
|
(91.7
|
)
|
|
(55.7
|
)
|
||||
Loss on extinguishment of debt
|
(0.1
|
)
|
|
(39.5
|
)
|
|
(19.6
|
)
|
|
(39.5
|
)
|
||||
Interest income and other income, net
|
0.2
|
|
|
4.1
|
|
|
1.1
|
|
|
4.1
|
|
||||
Equity in income of unconsolidated entities
|
0.8
|
|
|
0.6
|
|
|
2.9
|
|
|
1.2
|
|
||||
Income (loss) before income taxes
|
90.6
|
|
|
(46.0
|
)
|
|
268.3
|
|
|
88.4
|
|
||||
Income tax (expense) benefit
|
(31.3
|
)
|
|
17.6
|
|
|
(99.5
|
)
|
|
(27.2
|
)
|
||||
Consolidated net income (loss)
|
59.3
|
|
|
(28.4
|
)
|
|
168.8
|
|
|
61.2
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(1.1
|
)
|
|
(1.7
|
)
|
|
(2.0
|
)
|
|
(4.0
|
)
|
||||
Net income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
58.2
|
|
|
$
|
(30.1
|
)
|
|
$
|
166.8
|
|
|
$
|
57.2
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share attributable to Rock-Tenn Company shareholders
|
$
|
0.82
|
|
|
$
|
(0.60
|
)
|
|
$
|
2.34
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share attributable to Rock-Tenn Company shareholders
|
$
|
0.81
|
|
|
$
|
(0.60
|
)
|
|
$
|
2.31
|
|
|
$
|
1.30
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends paid per share
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Consolidated net income (loss)
|
$
|
59.3
|
|
|
$
|
(28.4
|
)
|
|
$
|
168.8
|
|
|
$
|
61.2
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss)
|
(6.2
|
)
|
|
7.0
|
|
|
8.0
|
|
|
18.8
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
||||||||
Deferred loss on cash flow hedges
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||
Less: reclassification adjustment of net loss on cash flow hedges included in earnings
|
—
|
|
|
1.0
|
|
|
1.4
|
|
|
3.2
|
|
||||
Defined benefit pension plans:
|
|
|
|
|
|
|
|
||||||||
Amortization of net actuarial loss, included in pension cost
|
3.3
|
|
|
3.3
|
|
|
9.9
|
|
|
9.1
|
|
||||
Amortization of prior service cost, included in pension cost
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|
0.3
|
|
||||
Other comprehensive income (loss)
|
(2.8
|
)
|
|
11.3
|
|
|
19.6
|
|
|
31.1
|
|
||||
Comprehensive income (loss)
|
56.5
|
|
|
(17.1
|
)
|
|
188.4
|
|
|
92.3
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
(1.1
|
)
|
|
(2.0
|
)
|
|
(2.5
|
)
|
|
(5.0
|
)
|
||||
Comprehensive income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
55.4
|
|
|
$
|
(19.1
|
)
|
|
$
|
185.9
|
|
|
$
|
87.3
|
|
|
June 30,
2012 |
|
September 30,
2011 |
||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
19.5
|
|
|
$
|
41.7
|
|
Restricted cash
|
40.6
|
|
|
41.1
|
|
||
Accounts receivable (net of allowances of $23.4 and $30.1)
|
1,065.9
|
|
|
1,109.6
|
|
||
Inventories
|
855.5
|
|
|
849.8
|
|
||
Other current assets
|
104.3
|
|
|
186.7
|
|
||
Total current assets
|
2,085.8
|
|
|
2,228.9
|
|
||
Property, plant and equipment at cost:
|
|
|
|
||||
Land and buildings
|
1,196.9
|
|
|
1,135.1
|
|
||
Machinery and equipment
|
5,988.0
|
|
|
5,691.1
|
|
||
Transportation equipment
|
13.4
|
|
|
12.8
|
|
||
Leasehold improvements
|
18.4
|
|
|
6.9
|
|
||
|
7,216.7
|
|
|
6,845.9
|
|
||
Less accumulated depreciation and amortization
|
(1,632.7
|
)
|
|
(1,318.7
|
)
|
||
Net property, plant and equipment
|
5,584.0
|
|
|
5,527.2
|
|
||
Goodwill
|
1,859.1
|
|
|
1,839.4
|
|
||
Intangibles, net
|
817.9
|
|
|
799.4
|
|
||
Other assets
|
244.3
|
|
|
171.1
|
|
||
|
$
|
10,591.1
|
|
|
$
|
10,566.0
|
|
LIABILITIES AND EQUITY
|
|||||||
Current Liabilities:
|
|
|
|
||||
Current portion of debt
|
$
|
257.7
|
|
|
$
|
143.3
|
|
Accounts payable
|
758.5
|
|
|
780.7
|
|
||
Accrued compensation and benefits
|
208.4
|
|
|
220.0
|
|
||
Other current liabilities
|
219.3
|
|
|
174.3
|
|
||
Total current liabilities
|
1,443.9
|
|
|
1,318.3
|
|
||
Long-term debt due after one year
|
3,102.6
|
|
|
3,302.5
|
|
||
Pension liabilities, net of current portion
|
1,249.8
|
|
|
1,431.0
|
|
||
Postretirement benefit liabilities, net of current portion
|
158.1
|
|
|
155.2
|
|
||
Deferred income taxes
|
907.7
|
|
|
827.1
|
|
||
Other long-term liabilities
|
173.7
|
|
|
153.3
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
||||
Redeemable noncontrolling interests
|
8.5
|
|
|
6.3
|
|
||
Equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares outstanding
|
—
|
|
|
—
|
|
||
Class A common stock, $0.01 par value; 175,000,000 shares authorized; 70,757,615 and 70,467,904 shares outstanding at June 30, 2012 and September 30, 2011, respectively
|
0.7
|
|
|
0.7
|
|
||
Capital in excess of par value
|
2,799.0
|
|
|
2,762.7
|
|
||
Retained earnings
|
1,026.6
|
|
|
907.4
|
|
||
Accumulated other comprehensive loss
|
(280.1
|
)
|
|
(299.2
|
)
|
||
Total Rock-Tenn Company shareholders’ equity
|
3,546.2
|
|
|
3,371.6
|
|
||
Noncontrolling interests
|
0.6
|
|
|
0.7
|
|
||
Total equity
|
3,546.8
|
|
|
3,372.3
|
|
||
|
$
|
10,591.1
|
|
|
$
|
10,566.0
|
|
|
Nine Months Ended
|
||||||
|
June 30,
|
||||||
|
2012
|
|
2011
|
||||
Operating activities:
|
|
|
|
||||
Consolidated net income
|
$
|
168.8
|
|
|
$
|
61.2
|
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
396.7
|
|
|
147.4
|
|
||
Deferred income tax expense
|
90.7
|
|
|
8.8
|
|
||
Share-based compensation expense
|
21.1
|
|
|
16.6
|
|
||
Loss on extinguishment of debt
|
19.6
|
|
|
39.5
|
|
||
Gain on disposal of plant, equipment and other, net
|
(12.9
|
)
|
|
(0.1
|
)
|
||
Equity in income of unconsolidated entities
|
(2.9
|
)
|
|
(1.2
|
)
|
||
Settlement of interest rate swaps and foreign currency hedge
|
(2.8
|
)
|
|
1.7
|
|
||
Pension and other postretirement funding (more) less than expense
|
(162.3
|
)
|
|
5.4
|
|
||
Impairment adjustments and other non-cash items
|
19.1
|
|
|
4.2
|
|
||
Change in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
63.8
|
|
|
(5.8
|
)
|
||
Inventories
|
8.5
|
|
|
30.6
|
|
||
Other assets
|
(44.4
|
)
|
|
35.7
|
|
||
Accounts payable
|
(35.7
|
)
|
|
18.8
|
|
||
Income taxes
|
10.6
|
|
|
(53.1
|
)
|
||
Accrued liabilities and other
|
3.5
|
|
|
30.0
|
|
||
Net cash provided by operating activities
|
541.4
|
|
|
339.7
|
|
||
Investing activities:
|
|
|
|
||||
Capital expenditures
|
(348.3
|
)
|
|
(107.5
|
)
|
||
Cash paid for purchase of business, net of cash acquired
|
(120.5
|
)
|
|
(1,301.5
|
)
|
||
Investment in unconsolidated entities
|
(1.7
|
)
|
|
(1.3
|
)
|
||
Return of capital from unconsolidated entities
|
1.6
|
|
|
0.6
|
|
||
Proceeds from sale of property, plant and equipment
|
37.1
|
|
|
7.6
|
|
||
Proceeds from property, plant and equipment insurance settlement
|
10.2
|
|
|
0.3
|
|
||
Net cash used for investing activities
|
(421.6
|
)
|
|
(1,401.8
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of notes
|
748.9
|
|
|
—
|
|
||
Additions to revolving credit facilities
|
310.6
|
|
|
363.5
|
|
||
Repayments of revolving credit facilities
|
(144.3
|
)
|
|
(279.5
|
)
|
||
Additions to debt
|
313.8
|
|
|
2,877.0
|
|
||
Repayments of debt
|
(1,319.3
|
)
|
|
(1,786.1
|
)
|
||
Debt issuance costs
|
(6.5
|
)
|
|
(43.1
|
)
|
||
Debt extinguishment costs
|
(13.9
|
)
|
|
(37.9
|
)
|
||
Issuances of common stock, net of related minimum tax withholdings
|
0.4
|
|
|
24.2
|
|
||
Excess tax benefits from share-based compensation
|
10.8
|
|
|
7.3
|
|
||
(Repayments to) advances from unconsolidated entity
|
(0.3
|
)
|
|
0.6
|
|
||
Cash dividends paid to shareholders
|
(42.4
|
)
|
|
(23.6
|
)
|
||
Cash distributions paid to noncontrolling interests
|
(0.4
|
)
|
|
(4.2
|
)
|
||
Net cash (used for) provided by financing activities
|
(142.6
|
)
|
|
1,098.2
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
0.6
|
|
|
(0.4
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
(22.2
|
)
|
|
35.7
|
|
||
Cash and cash equivalents at beginning of period
|
41.7
|
|
|
15.9
|
|
||
Cash and cash equivalents at end of period
|
$
|
19.5
|
|
|
$
|
51.6
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid (received) during the period for:
|
|
|
|
||||
Income taxes, net of refunds
|
$
|
(13.0
|
)
|
|
$
|
19.6
|
|
Interest, net of amounts capitalized
|
75.6
|
|
|
42.8
|
|
Note 1.
|
Interim Financial Statements
|
Note 2.
|
New Accounting Standards
|
Note 3.
|
Equity and Other Comprehensive Income (Loss)
|
|
Rock-Tenn
Company
Shareholders’
Equity
|
|
Noncontrolling
(1)
Interests
|
|
Total
Equity
|
||||||
Balance at September 30, 2011
|
$
|
3,371.6
|
|
|
$
|
0.7
|
|
|
$
|
3,372.3
|
|
Net income
|
166.8
|
|
|
(0.1
|
)
|
|
166.7
|
|
|||
Other comprehensive income, net of tax
|
19.1
|
|
|
—
|
|
|
19.1
|
|
|||
Income tax benefit from share-based plans
|
9.6
|
|
|
—
|
|
|
9.6
|
|
|||
Compensation expense under share-based plans
|
21.1
|
|
|
—
|
|
|
21.1
|
|
|||
Cash dividends (per share - $0.60)
|
(42.4
|
)
|
|
—
|
|
|
(42.4
|
)
|
|||
Issuance of Class A common stock, net of stock received for minimum tax withholdings
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|||
Balance at June 30, 2012
|
$
|
3,546.2
|
|
|
$
|
0.6
|
|
|
$
|
3,546.8
|
|
(1)
|
Excludes amounts related to contingently redeemable noncontrolling interests which are separately classified outside of permanent equity in the mezzanine section of the Condensed Consolidated Balance Sheets.
|
Note 4.
|
Earnings (Loss) per Share
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
58.2
|
|
|
$
|
(30.1
|
)
|
|
$
|
166.8
|
|
|
$
|
57.2
|
|
Less: Distributed and undistributed income available to participating securities
|
—
|
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(0.8
|
)
|
||||
Distributed and undistributed income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
58.2
|
|
|
$
|
(30.2
|
)
|
|
$
|
166.2
|
|
|
$
|
56.4
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
71.4
|
|
|
50.7
|
|
|
71.1
|
|
|
42.7
|
|
||||
Basic earnings (loss) per share attributable to Rock-Tenn Company shareholders
|
$
|
0.82
|
|
|
$
|
(0.60
|
)
|
|
$
|
2.34
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
58.2
|
|
|
$
|
(30.1
|
)
|
|
$
|
166.8
|
|
|
$
|
57.2
|
|
Less: Distributed and undistributed income available to participating securities
|
—
|
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(0.7
|
)
|
||||
Distributed and undistributed income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
58.2
|
|
|
$
|
(30.2
|
)
|
|
$
|
166.2
|
|
|
$
|
56.5
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted average shares outstanding
|
71.4
|
|
|
50.7
|
|
|
71.1
|
|
|
42.7
|
|
||||
Effect of dilutive stock options and non-participating securities
|
0.9
|
|
|
—
|
|
|
0.8
|
|
|
0.6
|
|
||||
Diluted weighted average shares outstanding
|
72.3
|
|
|
50.7
|
|
|
71.9
|
|
|
43.3
|
|
||||
Diluted earnings (loss) per share attributable to Rock-Tenn Company shareholders
|
$
|
0.81
|
|
|
$
|
(0.60
|
)
|
|
$
|
2.31
|
|
|
$
|
1.30
|
|
Note 5.
|
Acquisitions
|
|
Amounts Recognized as of Acquisition Date
(1)
|
|
Measurement Period Adjustments
(2)
|
|
Amounts Recognized as of Acquisition Date (as Adjusted)
(3)
|
||||||
Current assets, net of cash received
|
$
|
1,459.5
|
|
|
$
|
(6.8
|
)
|
|
$
|
1,452.7
|
|
Property, plant and equipment
|
4,391.4
|
|
|
(12.1
|
)
|
|
4,379.3
|
|
|||
Goodwill
|
1,091.6
|
|
|
(16.2
|
)
|
|
1,075.4
|
|
|||
Intangible assets
|
691.4
|
|
|
21.7
|
|
|
713.1
|
|
|||
Other long-term assets
|
95.5
|
|
|
28.5
|
|
|
124.0
|
|
|||
Total assets acquired
|
7,729.4
|
|
|
15.1
|
|
|
7,744.5
|
|
|||
|
|
|
|
|
|
||||||
Current portion of debt
|
9.4
|
|
|
—
|
|
|
9.4
|
|
|||
Current liabilities
|
816.7
|
|
|
6.6
|
|
|
823.3
|
|
|||
Long-term debt due after one year
|
1,171.1
|
|
|
—
|
|
|
1,171.1
|
|
|||
Accrued pension and other long-term benefits
|
1,205.8
|
|
|
(4.1
|
)
|
|
1,201.7
|
|
|||
Noncontrolling interest and other long-term liabilities
|
787.8
|
|
|
12.6
|
|
|
800.4
|
|
|||
Total liabilities and noncontrolling interest assumed
|
3,990.8
|
|
|
15.1
|
|
|
4,005.9
|
|
|||
|
|
|
|
|
|
||||||
Net assets acquired
|
$
|
3,738.6
|
|
|
$
|
—
|
|
|
$
|
3,738.6
|
|
(1)
|
As previously reported in the Notes to Consolidated Financial Statements included in our Fiscal 2011 Form 10-K.
|
(2)
|
The measurement period adjustments recorded in the second and third quarters of fiscal 2012 did not have a significant impact on our condensed consolidated statements of income for any period of fiscal 2012 or 2011. In addition, these adjustments did not have a significant impact on our condensed consolidated balance sheet as of September 30, 2011. Therefore, we have not retrospectively adjusted the comparative 2011 financial information presented herein.
|
(3)
|
The measurement period adjustments were due primarily to refinements of third party appraisals related to certain property, plant and equipment and intangible assets and related estimated useful lives as well as adjustments to certain tax accounts based on among other things, adjustments to deferred tax liabilities including the recent appraisal adjustments, analysis of the tax basis of acquired assets and liabilities and other tax adjustments. The net impact of the measurement period adjustments resulted in a net decrease to goodwill.
|
|
|
Weighted Avg. Life
|
|
Gross Carrying Amount
|
|||
Customer relationships
|
|
10.5
|
|
|
$
|
663.0
|
|
Favorable contracts
|
|
6.9
|
|
|
23.5
|
|
|
Technology and patents
|
|
8.0
|
|
|
13.3
|
|
|
Trademarks and tradenames
|
|
3.5
|
|
|
10.3
|
|
|
Non-compete agreements
|
|
2.0
|
|
|
3.0
|
|
|
Total
|
|
10.2
|
|
|
$
|
713.1
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
June 30, 2011
|
|
June 30, 2011
|
||||
|
(Unaudited, in millions)
|
||||||
|
|
|
|
||||
Net sales
|
$
|
2,384.2
|
|
|
$
|
7,111.0
|
|
Net income attributable to Rock-Tenn Company shareholders
|
$
|
67.9
|
|
|
$
|
252.9
|
|
Note 6.
|
Restructuring and Other Costs, Net
|
Segment
|
|
Period
|
|
Net Property,
Plant and
Equipment
(1)
|
|
Severance
and Other
Employee
Related
Costs
|
|
Equipment
and Inventory
Relocation
Costs
|
|
Facility
Carrying
Costs
|
|
Other
Costs
|
|
Total
|
||||||||||||
Corrugated
Packaging
(a)
|
Current Qtr.
|
|
$
|
3.8
|
|
|
$
|
2.1
|
|
|
$
|
1.2
|
|
|
$
|
2.1
|
|
|
$
|
(0.6
|
)
|
|
$
|
8.6
|
|
|
YTD Fiscal 2012
|
|
9.7
|
|
|
10.5
|
|
|
2.9
|
|
|
4.5
|
|
|
4.3
|
|
|
31.9
|
|
||||||||
Prior Year Qtr.
|
|
2.3
|
|
|
5.5
|
|
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
8.2
|
|
||||||||
YTD Fiscal 2011
|
|
1.9
|
|
|
5.6
|
|
|
0.1
|
|
|
0.3
|
|
|
0.6
|
|
|
8.5
|
|
||||||||
|
|
Cumulative
|
|
26.8
|
|
|
18.7
|
|
|
4.1
|
|
|
5.5
|
|
|
5.1
|
|
|
60.2
|
|
||||||
|
|
Expected Total
|
|
26.8
|
|
|
18.7
|
|
|
6.1
|
|
|
8.9
|
|
|
5.1
|
|
|
65.6
|
|
||||||
Consumer Packaging
(b)
|
Current Qtr.
|
|
(2.6
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|||||||
YTD Fiscal 2012
|
|
(3.3
|
)
|
|
0.1
|
|
|
0.5
|
|
|
—
|
|
|
(0.1
|
)
|
|
(2.8
|
)
|
||||||||
Prior Year Qtr.
|
|
3.5
|
|
|
1.6
|
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
|
5.6
|
|
||||||||
YTD Fiscal 2011
|
|
3.3
|
|
|
1.7
|
|
|
0.3
|
|
|
0.5
|
|
|
0.1
|
|
|
5.9
|
|
||||||||
|
|
Cumulative
|
|
1.4
|
|
|
3.4
|
|
|
1.6
|
|
|
0.9
|
|
|
0.9
|
|
|
8.2
|
|
||||||
|
|
Expected Total
|
|
1.4
|
|
|
3.4
|
|
|
1.6
|
|
|
1.2
|
|
|
0.9
|
|
|
8.5
|
|
||||||
Recycling and Waste Solutions
(c)
|
Current Qtr.
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||||
YTD Fiscal 2012
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||||
Prior Year Qtr.
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
YTD Fiscal 2011
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||||
|
|
Cumulative
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.1
|
|
|
0.6
|
|
||||||
|
|
Expected Total
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.1
|
|
|
0.6
|
|
||||||
Other
(d)
|
|
Current Qtr.
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
7.5
|
|
||||||
|
|
YTD Fiscal 2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.9
|
|
|
22.9
|
|
||||||
|
|
Prior Year Qtr.
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41.7
|
|
|
41.7
|
|
||||||
|
|
YTD Fiscal 2011
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47.9
|
|
|
47.9
|
|
||||||
|
|
Cumulative
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83.7
|
|
|
83.7
|
|
||||||
|
|
Expected Total
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83.7
|
|
|
83.7
|
|
||||||
Total
|
|
Current Qtr.
|
|
$
|
1.3
|
|
|
$
|
2.2
|
|
|
$
|
1.2
|
|
|
$
|
2.1
|
|
|
$
|
6.9
|
|
|
$
|
13.7
|
|
|
|
YTD Fiscal 2012
|
|
$
|
6.5
|
|
|
$
|
10.6
|
|
|
$
|
3.4
|
|
|
$
|
4.5
|
|
|
$
|
27.1
|
|
|
$
|
52.1
|
|
|
|
Prior Year Qtr.
|
|
$
|
5.8
|
|
|
$
|
7.1
|
|
|
$
|
0.3
|
|
|
$
|
0.5
|
|
|
$
|
41.8
|
|
|
$
|
55.5
|
|
|
|
YTD Fiscal 2011
|
|
$
|
5.2
|
|
|
$
|
7.3
|
|
|
$
|
0.4
|
|
|
$
|
0.9
|
|
|
$
|
48.6
|
|
|
$
|
62.4
|
|
|
|
Cumulative
|
|
$
|
28.3
|
|
|
$
|
22.1
|
|
|
$
|
5.7
|
|
|
$
|
6.8
|
|
|
$
|
89.8
|
|
|
$
|
152.7
|
|
|
|
Expected Total
|
|
$
|
28.3
|
|
|
$
|
22.1
|
|
|
$
|
7.7
|
|
|
$
|
10.5
|
|
|
$
|
89.8
|
|
|
$
|
158.4
|
|
(1)
|
We have defined
“
Net property, plant and equipment
”
as used in this Note 6 as property, plant and equipment, impairment losses, subsequent adjustments to fair value for assets classified as held for sale, and subsequent (gains) or losses on sales of property, plant and equipment and related parts and supplies and accelerated depreciation on such assets.
|
(a)
|
The Corrugated Packaging segment current year charges primarily reflect the closure of our Matane, Quebec containerboard mill, a machine taken out of operation at our Hodge, LA containerboard mill and five corrugated container plants, all acquired in the Smurfit-Stone Acquisition (each initially recorded and four closed in fiscal 2012) and charges associated primarily with on-going closure costs at certain of six other corrugated container plants acquired in the Smurfit-Stone Acquisition (each initially recorded in fiscal 2011, five of the six were closed in fiscal 2011 and one closed in fiscal 2012) and our Hauppauge, NY sheet plant (initially recorded in fiscal 2010 and closed in fiscal 2011), net of a gain on sale of our Santa Fe Spring, CA corrugated converting facility. The expenses in the "Other Costs" column primarily represent repayment of energy credits and site environmental closure activities at the Matane mill. The cumulative charges are primarily for the facilities mentioned above and fiscal 2011 charges related to kraft paper assets at our Hodge containerboard mill we acquired in the Smurfit-Stone Acquisition. We have transferred a substantial portion of each closed facility's production to our other facilities.
|
(b)
|
The Consumer Packaging segment current year activity primarily reflects the gain on sale of our Columbus, IN laminated paperboard converting operation and Milwaukee, WI folding carton facility (initially recorded and closed in fiscal 2011) and on-going closure costs associated with previously closed facilities. The cumulative charges primarily reflect the actions mentioned above as well as closure costs at certain of four interior packaging plants (three initially recorded and closed in fiscal 2011 and one initially recorded and closed in fiscal 2010), our Columbus laminated paperboard converting operation and our Macon, GA drum manufacturing operation (each initially recorded and closed in fiscal 2010) and our Drums, PA interior packaging plant (initially recorded and closed in fiscal 2010).
|
(c)
|
The Recycling and Waste Solutions segment current year charges reflect one collection facility sold in the current year and the cumulative charges reflect carrying costs for two collections facilities shutdown in a prior year.
|
(d)
|
The expenses in the “Other Costs” column primarily reflect costs incurred primarily as a result of our Smurfit-Stone Acquisition, including merger integration expenses. The pre-tax charges are summarized below (in millions):
|
|
Acquisition
Expenses
|
|
Integration
Expenses
|
|
Other
Expenses / (Income)
|
|
Total
|
||||||||
Current Qtr.
|
$
|
1.6
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
YTD Fiscal 2012
|
$
|
2.7
|
|
|
$
|
20.8
|
|
|
$
|
(0.6
|
)
|
|
$
|
22.9
|
|
Prior Year Qtr.
|
$
|
12.2
|
|
|
$
|
29.5
|
|
|
$
|
—
|
|
|
$
|
41.7
|
|
YTD Fiscal 2011
|
$
|
16.2
|
|
|
$
|
31.7
|
|
|
$
|
—
|
|
|
$
|
47.9
|
|
|
2012
|
|
2011
|
||||
Accrual at beginning of fiscal year
|
$
|
26.7
|
|
|
$
|
1.4
|
|
Accruals acquired in Smurfit-Stone Acquisition
|
—
|
|
|
11.9
|
|
||
Additional accruals
|
20.3
|
|
|
27.8
|
|
||
Payments
|
(24.2
|
)
|
|
(2.6
|
)
|
||
Adjustment to accruals
|
(1.2
|
)
|
|
—
|
|
||
Accrual at June 30,
|
$
|
21.6
|
|
|
$
|
38.5
|
|
Reconciliation of accruals and charges to restructuring and other costs, net:
|
|
|
|
||||
|
2012
|
|
2011
|
||||
Additional accruals and adjustments to accruals (see table above)
|
$
|
19.1
|
|
|
$
|
27.8
|
|
Acquisition expenses
|
2.7
|
|
|
16.2
|
|
||
Integration expenses
|
16.4
|
|
|
11.5
|
|
||
Net property, plant and equipment
|
6.5
|
|
|
5.2
|
|
||
Severance and other employee costs
|
0.4
|
|
|
0.3
|
|
||
Equipment relocation
|
3.4
|
|
|
0.4
|
|
||
Facility carrying costs
|
4.5
|
|
|
0.9
|
|
||
Other
|
(0.9
|
)
|
|
0.1
|
|
||
Total restructuring and other costs, net
|
$
|
52.1
|
|
|
$
|
62.4
|
|
Note 7.
|
Income Taxes
|
Note 8.
|
Inventories
|
|
June 30,
2012 |
|
September 30,
2011 |
||||
Finished goods and work in process
|
$
|
324.6
|
|
|
$
|
331.1
|
|
Raw materials
|
379.9
|
|
|
404.0
|
|
||
Spare parts and supplies
|
186.5
|
|
|
173.1
|
|
||
Inventories at FIFO cost
|
891.0
|
|
|
908.2
|
|
||
LIFO reserve
|
(35.5
|
)
|
|
(58.4
|
)
|
||
Net inventories
|
$
|
855.5
|
|
|
$
|
849.8
|
|
Note 9.
|
Debt
|
|
June 30,
2012 |
|
September 30,
2011 |
||||
5.625% notes due March 2013
(a)
|
$
|
80.7
|
|
|
$
|
80.9
|
|
9.25% notes due March 2016
(a)
|
—
|
|
|
299.2
|
|
||
4.45% notes due March 2019
(a)
|
349.7
|
|
|
—
|
|
||
4.90% notes due March 2022
(a)
|
399.3
|
|
|
—
|
|
||
Term loan facilities
(b)
|
1,622.6
|
|
|
2,223.1
|
|
||
Revolving credit and swing facilities
(b)
|
411.9
|
|
|
238.0
|
|
||
Receivables-backed financing facility
(c)
|
482.0
|
|
|
559.0
|
|
||
Industrial development revenue bonds, bearing interest at variable rates (2.54% at September 30, 2011)
(d)
|
—
|
|
|
17.4
|
|
||
Other debt
|
14.1
|
|
|
28.2
|
|
||
Total debt
|
3,360.3
|
|
|
3,445.8
|
|
||
Less current portion of debt
|
257.7
|
|
|
143.3
|
|
||
Long-term debt due after one year
|
$
|
3,102.6
|
|
|
$
|
3,302.5
|
|
(a)
|
On February 22, 2012, we issued
$350.0 million
aggregate principal amount of
4.45%
senior notes due March 2019 (“
March 2019 Notes
”) and issued
$400.0 million
aggregate principal amount of
4.90%
senior notes due March 2022 (“
March 2022 Notes
”) in an unregistered offering pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “
Securities Act
”). We issued the March 2019 and March 2022 notes at a discount of approximately
$0.3 million
and
$0.8 million
, respectively, and recorded debt issuance costs in connection with the March 2019 and March 2022 notes of approximately
$3.2 million
and
$3.6 million
respectively, which are being amortized over the respective term of the notes. On March 15, 2012, we redeemed our
9.25%
senior notes due March 2016 (“
March 2016
|
(b)
|
On May 27, 2011, we entered into a Credit Agreement (the "
Credit Facility
") with an original maximum principal amount of
$3.7 billion
before scheduled payments. The Credit Facility includes a
$1.475 billion
,
5
-year revolving credit facility, a
$1.475 billion
,
5
-year term loan A facility, and included a
$750 million
,
7
-year term loan B facility prior to its repayment on February 22, 2012. On December 2, 2011, we amended our Credit Facility which permitted the issuance of debt that could be secured on an equal and ratable basis with the Credit Facility provided no portion of the term loan B facility remained outstanding. The amendment also provided for a
$227.0 million
term loan A2 tranche to be drawn upon by us in either a single drawing or in two separate drawings in minimum draws of
$100.0 million
, at our discretion, on or prior to March 31, 2012, and amended other terms of a technical nature. On February 22, 2012, we repaid our term loan B facility using the proceeds from the issuance of the March 2019 and March 2022 Notes. We recorded a loss on extinguishment of debt of
$0.8 million
to write-off unamortized deferred financing costs. The repayment of our term loan B facility, in conjunction with our then current credit rating removed the security pledge from our Credit Facility and our March 2013 Notes. All obligations under the Credit Facility are fully and unconditionally guaranteed by our existing and future wholly-owned U.S. subsidiaries, including those acquired in the Smurfit-Stone Acquisition, except for certain present and future unrestricted subsidiaries and certain other limited exceptions as well as a pledge of subsidiary stock of certain wholly-owned subsidiaries. In addition, the obligations of Rock-Tenn Company of Canada are guaranteed by Rock-Tenn Company and all such wholly-owned U.S. subsidiaries, as well as by wholly-owned Canadian subsidiaries of RockTenn, including those acquired in the Smurfit-Stone Acquisition, other than certain present and future unrestricted subsidiaries and certain other limited exceptions. The security will be reinstated if we fall below specified credit ratings at Standard & Poor's and Moody's, as defined in the Credit Agreement. The Credit Facility is pre-payable at any time.
|
(c)
|
On May 27, 2011, we increased our receivables-backed financing facility (the “Receivables Facility”) to
$625.0 million
. The maturity date of the Receivables Facility is the third anniversary of the Smurfit-Stone Acquisition. Accordingly, such
|
(d)
|
We repaid the industrial development revenue bonds issued by various municipalities in which we maintain facilities on October 3, 2011.
|
Note 10.
|
Derivatives
|
Note 11.
|
Fair Value
|
|
June 30, 2012
|
|
September 30, 2011
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
March 2013 Notes
(1)
|
$
|
80.7
|
|
|
$
|
82.8
|
|
|
$
|
80.9
|
|
|
$
|
83.1
|
|
March 2016 Notes
(1)
|
—
|
|
|
—
|
|
|
299.2
|
|
|
318.7
|
|
||||
March 2019 Notes
(1)
|
349.7
|
|
|
358.3
|
|
|
—
|
|
|
—
|
|
||||
March 2022 Notes
(1)
|
399.3
|
|
|
397.1
|
|
|
—
|
|
|
—
|
|
||||
Term loan facilities
(2)
|
1,622.6
|
|
|
1,622.6
|
|
|
2,223.1
|
|
|
2,223.1
|
|
||||
Revolving credit and swing facilities
(2)
|
411.9
|
|
|
411.9
|
|
|
238.0
|
|
|
238.0
|
|
||||
Receivables-backed financing facility
(2)
|
482.0
|
|
|
482.0
|
|
|
559.0
|
|
|
559.0
|
|
||||
Industrial development revenue bonds
(2)
|
—
|
|
|
—
|
|
|
17.4
|
|
|
17.4
|
|
||||
Other long-term debt
(3)
|
14.1
|
|
|
14.9
|
|
|
28.2
|
|
|
30.3
|
|
||||
Total debt
|
$
|
3,360.3
|
|
|
$
|
3,369.6
|
|
|
$
|
3,445.8
|
|
|
$
|
3,469.6
|
|
(1)
|
Fair value is based on the quoted market prices for the same or similar issues and is categorized as level 1 within the fair value hierarchy.
|
(2)
|
Fair value approximates the carrying amount as the variable interest rates reprice frequently at observable current market rates. As such fair value is categorized as level 2 within the fair value hierarchy.
|
(3)
|
Fair value is estimated based on the discounted value of future cash flows using observable current market interest rates offered for debt of similar credit risk and maturity. As such fair value is categorized as level 2 within the fair value hierarchy.
|
Note 12.
|
Retirement Plans
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Service cost
|
$
|
7.3
|
|
|
$
|
4.9
|
|
|
$
|
23.3
|
|
|
$
|
10.3
|
|
Interest cost
|
55.1
|
|
|
25.2
|
|
|
165.3
|
|
|
37.5
|
|
||||
Expected return on plan assets
|
(55.5
|
)
|
|
(24.6
|
)
|
|
(166.7
|
)
|
|
(37.1
|
)
|
||||
Amortization of net actuarial loss
|
5.3
|
|
|
4.8
|
|
|
16.0
|
|
|
14.2
|
|
||||
Amortization of prior service cost
|
0.3
|
|
|
0.1
|
|
|
0.6
|
|
|
0.5
|
|
||||
Company defined benefit plan expense
|
12.5
|
|
|
10.4
|
|
|
38.5
|
|
|
25.4
|
|
||||
Multi-employer plans for collective bargaining employees
|
2.2
|
|
|
1.1
|
|
|
6.7
|
|
|
2.1
|
|
||||
Net pension cost
|
$
|
14.7
|
|
|
$
|
11.5
|
|
|
$
|
45.2
|
|
|
$
|
27.5
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
1.1
|
|
|
$
|
0.2
|
|
Interest cost
|
1.6
|
|
|
0.8
|
|
|
5.8
|
|
|
0.8
|
|
||||
Company postretirement plan expense
|
$
|
1.7
|
|
|
$
|
1.0
|
|
|
$
|
6.9
|
|
|
$
|
1.0
|
|
Note 13.
|
Share-Based Compensation
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(in millions)
|
||||||
Outstanding at September 30, 2011
|
1,532,103
|
|
|
$
|
36.35
|
|
|
|
|
|
|||
Granted
|
255,250
|
|
|
63.38
|
|
|
|
|
|
||||
Exercised
|
(295,374
|
)
|
|
32.82
|
|
|
|
|
|
||||
Expired
|
(9,000
|
)
|
|
18.19
|
|
|
|
|
|
||||
Forfeited
|
(6,500
|
)
|
|
55.38
|
|
|
|
|
|
||||
Outstanding at June 30, 2012
|
1,476,479
|
|
|
$
|
41.75
|
|
|
6.6
|
|
|
$
|
23.0
|
|
Exercisable at June 30, 2012
|
902,354
|
|
|
$
|
31.60
|
|
|
5.3
|
|
|
$
|
20.7
|
|
|
Shares
|
|
Weighted Average
Grant Date Fair
Value
|
|||
Unvested at September 30, 2011
|
1,005,343
|
|
|
$
|
41.95
|
|
Granted
(1)
|
410,250
|
|
|
63.28
|
|
|
Vested
|
(484,243
|
)
|
|
28.45
|
|
|
Forfeited
|
(16,425
|
)
|
|
50.08
|
|
|
Unvested at June 30, 2012
(1)(2)
|
914,925
|
|
|
$
|
58.62
|
|
(1)
|
Fiscal 2012 target awards of
386,750
shares may be increased to
200%
of the target or decreased to zero, subject to the level of performance attained. The awards are reflected in the table at the target award amount of
100%
.
|
(2)
|
Target awards, net of subsequent forfeitures and performance condition achievement, granted in fiscal 2011 in the amount of
256,600
may be increased by up to
200%
or decreased to zero, subject to the level of performance attained. Target awards, net of subsequent forfeitures and performance condition achievement, granted in fiscal 2010 in the amount of
241,475
may be increased by up to
150%
or decreased to zero, subject to the level of performance attained. The awards are reflected in the table at the target award amount of
100%
.
|
Note 14.
|
Commitments and Contingencies
|
•
|
we have a
49%
ownership interest in Seven Hills Paperboard, LLC
(“
Seven Hills
”)
. The joint venture partners guarantee funding of net losses in proportion to their share of ownership;
|
•
|
in connection with the Smurfit-Stone Acquisition, we have certain wood chip processing contracts extending from 2012 through 2018 with minimum purchase commitments. As part of the agreements, we guarantee the third party contractors' debt outstanding and have a security interest in the chipping equipment. At
June 30, 2012
, the maximum potential amount of future payments related to these guarantees was approximately
$17 million
, which decreases ratably over the life of the contracts. In the event the guarantees on these contracts were called, proceeds from the liquidation of the chipping equipment would be based on current market conditions and we may not recover in full the guarantee payments made;
|
•
|
as part of acquisitions we have acquired unconsolidated entities for which we guarantee less than
$4 million
in debt, primarily for bank loans; and
|
•
|
we lease certain manufacturing and warehousing facilities and equipment under various operating leases. A substantial number of these leases require us to indemnify the lessor in the event that additional taxes are assessed due to a change in the tax law. We are unable to estimate our maximum exposure under these leases because it is dependent on changes in the tax law.
|
Note 15.
|
Segment Information
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net sales (aggregate):
|
|
|
|
|
|
|
|
||||||||
Corrugated Packaging
|
$
|
1,545.2
|
|
|
$
|
734.5
|
|
|
$
|
4,573.9
|
|
|
$
|
1,142.2
|
|
Consumer Packaging
|
628.9
|
|
|
579.6
|
|
|
1,896.9
|
|
|
1,691.9
|
|
||||
Recycling and Waste Solutions
|
338.9
|
|
|
147.4
|
|
|
964.4
|
|
|
230.1
|
|
||||
Total
|
$
|
2,513.0
|
|
|
$
|
1,461.5
|
|
|
$
|
7,435.2
|
|
|
$
|
3,064.2
|
|
Less net sales (intersegment):
|
|
|
|
|
|
|
|
||||||||
Corrugated Packaging
|
$
|
28.7
|
|
|
$
|
21.3
|
|
|
$
|
91.8
|
|
|
$
|
41.8
|
|
Consumer Packaging
|
6.1
|
|
|
6.8
|
|
|
19.9
|
|
|
14.5
|
|
||||
Recycling and Waste Solutions
|
175.0
|
|
|
51.3
|
|
|
469.7
|
|
|
71.8
|
|
||||
Total
|
$
|
209.8
|
|
|
$
|
79.4
|
|
|
$
|
581.4
|
|
|
$
|
128.1
|
|
Net sales (unaffiliated customers):
|
|
|
|
|
|
|
|
||||||||
Corrugated Packaging
|
$
|
1,516.5
|
|
|
$
|
713.2
|
|
|
$
|
4,482.1
|
|
|
$
|
1,100.4
|
|
Consumer Packaging
|
622.8
|
|
|
572.8
|
|
|
1,877.0
|
|
|
1,677.4
|
|
||||
Recycling and Waste Solutions
|
163.9
|
|
|
96.1
|
|
|
494.7
|
|
|
158.3
|
|
||||
Total
|
$
|
2,303.2
|
|
|
$
|
1,382.1
|
|
|
$
|
6,853.8
|
|
|
$
|
2,936.1
|
|
Segment income:
|
|
|
|
|
|
|
|
||||||||
Corrugated Packaging
|
$
|
73.4
|
|
|
$
|
24.6
|
|
|
$
|
251.4
|
|
|
$
|
92.1
|
|
Consumer Packaging
|
83.7
|
|
|
61.1
|
|
|
248.4
|
|
|
193.1
|
|
||||
Recycling and Waste Solutions
|
2.2
|
|
|
4.6
|
|
|
9.9
|
|
|
9.5
|
|
||||
Total segment income
|
159.3
|
|
|
90.3
|
|
|
509.7
|
|
|
294.7
|
|
||||
Restructuring and other costs, net
|
(13.7
|
)
|
|
(55.5
|
)
|
|
(52.1
|
)
|
|
(62.4
|
)
|
||||
Non-allocated expenses
|
(28.3
|
)
|
|
(22.6
|
)
|
|
(79.1
|
)
|
|
(52.8
|
)
|
||||
Interest expense
|
(26.8
|
)
|
|
(22.8
|
)
|
|
(91.7
|
)
|
|
(55.7
|
)
|
||||
Loss on extinguishment of debt
|
(0.1
|
)
|
|
(39.5
|
)
|
|
(19.6
|
)
|
|
(39.5
|
)
|
||||
Interest income and other income, net
|
0.2
|
|
|
4.1
|
|
|
1.1
|
|
|
4.1
|
|
||||
Income (loss) before income taxes
|
90.6
|
|
|
(46.0
|
)
|
|
268.3
|
|
|
88.4
|
|
||||
Income tax (expense) benefit
|
(31.3
|
)
|
|
17.6
|
|
|
(99.5
|
)
|
|
(27.2
|
)
|
||||
Consolidated net income (loss)
|
59.3
|
|
|
(28.4
|
)
|
|
168.8
|
|
|
61.2
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(1.1
|
)
|
|
(1.7
|
)
|
|
(2.0
|
)
|
|
(4.0
|
)
|
||||
Net income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
58.2
|
|
|
$
|
(30.1
|
)
|
|
$
|
166.8
|
|
|
$
|
57.2
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Earnings (loss) per diluted share
|
$
|
0.81
|
|
|
$
|
(0.60
|
)
|
|
$
|
2.31
|
|
|
$
|
1.30
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring and other costs and operating losses and transition costs due to plant closures
|
0.14
|
|
|
0.71
|
|
|
0.61
|
|
|
0.96
|
|
||||
Acquisition inventory step-up
|
—
|
|
|
0.69
|
|
|
—
|
|
|
0.81
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
0.49
|
|
|
0.17
|
|
|
0.58
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted earnings per diluted share
|
$
|
0.95
|
|
|
$
|
1.29
|
|
|
$
|
3.09
|
|
|
$
|
3.65
|
|
(In millions, except percentages)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Nine
Months
Ended
6/30
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
||||||||||||
2011
|
$
|
761.1
|
|
|
$
|
792.9
|
|
|
$
|
1,382.1
|
|
|
$
|
2,936.1
|
|
|
$
|
2,463.5
|
|
|
$
|
5,399.6
|
|
2012
|
$
|
2,267.7
|
|
|
$
|
2,282.9
|
|
|
$
|
2,303.2
|
|
|
$
|
6,853.8
|
|
|
|
|
|
||||
% Change
|
198.0
|
%
|
|
187.9
|
%
|
|
66.6
|
%
|
|
133.4
|
%
|
|
|
|
|
(In millions, except percentages)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Nine
Months
Ended
6/30
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
||||||||||||
2011
|
$
|
582.3
|
|
|
$
|
626.6
|
|
|
$
|
1,169.7
|
|
|
$
|
2,378.6
|
|
|
$
|
2,029.1
|
|
|
$
|
4,407.7
|
|
(% of Net Sales)
|
76.5
|
%
|
|
79.0
|
%
|
|
84.6
|
%
|
|
81.0
|
%
|
|
82.4
|
%
|
|
81.6
|
%
|
||||||
2012
|
$
|
1,875.5
|
|
|
$
|
1,922.1
|
|
|
$
|
1,943.4
|
|
|
$
|
5,741.0
|
|
|
|
|
|
||||
(% of Net Sales)
|
82.7
|
%
|
|
84.2
|
%
|
|
84.4
|
%
|
|
83.8
|
%
|
|
|
|
|
(In millions, except percentages)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Nine
Months
Ended
6/30
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
||||||||||||
2011
|
$
|
83.2
|
|
|
$
|
88.3
|
|
|
$
|
145.3
|
|
|
$
|
316.8
|
|
|
$
|
224.4
|
|
|
$
|
541.2
|
|
(% of Net Sales)
|
10.9
|
%
|
|
11.1
|
%
|
|
10.5
|
%
|
|
10.8
|
%
|
|
9.1
|
%
|
|
10.0
|
%
|
||||||
2012
|
$
|
225.9
|
|
|
$
|
229.6
|
|
|
$
|
229.6
|
|
|
$
|
685.1
|
|
|
|
|
|
||||
(% of Net Sales)
|
10.0
|
%
|
|
10.1
|
%
|
|
10.0
|
%
|
|
10.0
|
%
|
|
|
|
|
|
Containerboard
Tons
Shipped
|
|
Recycled
Paperboard
Tons
Shipped
|
|
Bleached
Paperboard
Tons
Shipped
|
|
Market
Pulp
Tons
Shipped
|
|
Average
Net Selling
Price
(Per Ton)
|
||||||
|
(In thousands, except Average Net Selling Price Per Ton)
|
||||||||||||||
First Quarter
|
247.4
|
|
|
224.5
|
|
|
84.4
|
|
|
22.1
|
|
|
$
|
617
|
|
Second Quarter
|
243.9
|
|
|
239.3
|
|
|
85.1
|
|
|
24.0
|
|
|
622
|
|
|
Third Quarter
|
850.7
|
|
|
238.2
|
|
|
90.3
|
|
|
49.6
|
|
|
596
|
|
|
Nine Months Ended June 30, 2011
|
1,342.0
|
|
|
702.0
|
|
|
259.8
|
|
|
95.7
|
|
|
607
|
|
|
Fourth Quarter
|
1,914.4
|
|
|
241.0
|
|
|
117.8
|
|
|
96.3
|
|
|
585
|
|
|
Fiscal 2011
|
3,256.4
|
|
|
943.0
|
|
|
377.6
|
|
|
192.0
|
|
|
$
|
596
|
|
|
|
|
|
|
|
|
|
|
|
||||||
First Quarter
|
1,832.0
|
|
|
222.8
|
|
|
113.1
|
|
|
99.9
|
|
|
$
|
562
|
|
Second Quarter
|
1,695.9
|
|
|
236.8
|
|
|
115.9
|
|
|
86.6
|
|
|
560
|
|
|
Third Quarter
|
1,722.9
|
|
|
231.8
|
|
|
123.8
|
|
|
98.1
|
|
|
563
|
|
|
Nine Months Ended June 30, 2012
|
5,250.8
|
|
|
691.4
|
|
|
352.8
|
|
|
284.6
|
|
|
$
|
562
|
|
|
Containerboard
Tons
Produced
|
|
Recycled
Paperboard
Tons
Produced
|
|
Bleached
Paperboard
Tons
Produced
|
|
Market
Pulp
Tons
Produced
|
||||
|
(In thousands)
|
||||||||||
First Quarter
|
246.2
|
|
|
226.7
|
|
|
87.4
|
|
|
23.4
|
|
Second Quarter
|
245.5
|
|
|
235.2
|
|
|
86.6
|
|
|
26.2
|
|
Third Quarter
|
858.5
|
|
|
239.4
|
|
|
87.3
|
|
|
47.1
|
|
Nine Months Ended June 30, 2011
|
1,350.2
|
|
|
701.3
|
|
|
261.3
|
|
|
96.7
|
|
Fourth Quarter
|
1,923.2
|
|
|
242.0
|
|
|
123.7
|
|
|
101.1
|
|
Fiscal 2011
|
3,273.4
|
|
|
943.3
|
|
|
385.0
|
|
|
197.8
|
|
|
|
|
|
|
|
|
|
||||
First Quarter
|
1,843.5
|
|
|
227.3
|
|
|
115.2
|
|
|
104.9
|
|
Second Quarter
|
1,736.5
|
|
|
234.6
|
|
|
112.7
|
|
|
83.2
|
|
Third Quarter
|
1,676.4
|
|
|
234.1
|
|
|
118.7
|
|
|
101.9
|
|
Nine Months Ended June 30, 2012
|
5,256.4
|
|
|
696.0
|
|
|
346.6
|
|
|
290.0
|
|
|
Net Sales
(Aggregate)
|
|
|
Segment
Income
|
|
|
Return
on Sales
|
|||
|
(In millions, except percentages)
|
|||||||||
First Quarter
|
$
|
198.3
|
|
|
$
|
37.4
|
|
|
18.9
|
%
|
Second Quarter
|
209.4
|
|
|
30.1
|
|
|
14.4
|
|
||
Third Quarter
|
734.5
|
|
|
24.6
|
|
|
3.3
|
|
||
Nine Months Ended June 30, 2011
|
1,142.2
|
|
|
92.1
|
|
|
8.1
|
|
||
Fourth Quarter
|
1,626.5
|
|
|
149.6
|
|
|
9.2
|
|
||
Fiscal 2011
|
$
|
2,768.7
|
|
|
$
|
241.7
|
|
|
8.7
|
%
|
|
|
|
|
|
|
|||||
First Quarter
|
$
|
1,522.8
|
|
|
$
|
109.3
|
|
|
7.2
|
%
|
Second Quarter
|
1,505.9
|
|
|
68.7
|
|
|
4.6
|
|
||
Third Quarter
|
1,545.2
|
|
|
73.4
|
|
|
4.8
|
|
||
Nine Months Ended June 30, 2012
|
$
|
4,573.9
|
|
|
$
|
251.4
|
|
|
5.5
|
%
|
|
Net Sales
(Aggregate)
|
|
Segment
Income
|
|
Return
on Sales
|
|||||
|
(In millions, except percentages)
|
|||||||||
First Quarter
|
$
|
544.5
|
|
|
$
|
71.0
|
|
|
13.0
|
%
|
Second Quarter
|
567.8
|
|
|
61.0
|
|
|
10.7
|
|
||
Third Quarter
|
579.6
|
|
|
61.1
|
|
|
10.5
|
|
||
Nine Months Ended June 30, 2011
|
1,691.9
|
|
|
193.1
|
|
|
11.4
|
|
||
Fourth Quarter
|
667.9
|
|
|
82.1
|
|
|
12.3
|
|
||
Fiscal 2011
|
$
|
2,359.8
|
|
|
$
|
275.2
|
|
|
11.7
|
%
|
|
|
|
|
|
|
|||||
First Quarter
|
$
|
620.4
|
|
|
$
|
80.3
|
|
|
12.9
|
%
|
Second Quarter
|
647.6
|
|
|
84.4
|
|
|
13.0
|
|
||
Third Quarter
|
628.9
|
|
|
83.7
|
|
|
13.3
|
|
||
Nine Months Ended June 30, 2012
|
$
|
1,896.9
|
|
|
$
|
248.4
|
|
|
13.1
|
%
|
|
Net Sales
(Aggregate)
|
|
Segment
Income
|
|
Return
on Sales
|
|||||
|
(In millions, except percentages)
|
|||||||||
First Quarter
|
$
|
41.9
|
|
|
$
|
2.3
|
|
|
5.5
|
%
|
Second Quarter
|
40.8
|
|
|
2.6
|
|
|
6.4
|
|
||
Third Quarter
|
147.4
|
|
|
4.6
|
|
|
3.1
|
|
||
Nine Months Ended June 30, 2011
|
230.1
|
|
|
9.5
|
|
|
4.1
|
|
||
Fourth Quarter
|
355.8
|
|
|
5.3
|
|
|
1.5
|
|
||
Fiscal 2011
|
$
|
585.9
|
|
|
$
|
14.8
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|||||
First Quarter
|
$
|
329.4
|
|
|
$
|
3.5
|
|
|
1.1
|
%
|
Second Quarter
|
296.1
|
|
|
4.2
|
|
|
1.4
|
|
||
Third Quarter
|
338.9
|
|
|
2.2
|
|
|
0.6
|
|
||
Nine Months Ended June 30, 2012
|
$
|
964.4
|
|
|
$
|
9.9
|
|
|
1.0
|
%
|
(Shipments in thousands of tons)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Nine
Months
Ended
6/30
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
||||||
2011
|
211.6
|
|
|
213.7
|
|
|
773.9
|
|
|
1,199.2
|
|
|
1,759.6
|
|
|
2,958.8
|
|
2012
|
2,064.5
|
|
|
1,996.9
|
|
|
2,039.7
|
|
|
6,101.1
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income (loss) attributable to Rock-Tenn Company shareholders
|
$
|
58.2
|
|
|
$
|
(30.1
|
)
|
|
$
|
166.8
|
|
|
$
|
57.2
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring and other costs and operating losses and transition costs due to plant closures
|
10.0
|
|
|
36.4
|
|
|
43.7
|
|
|
41.3
|
|
||||
Acquisition inventory step-up
|
0.2
|
|
|
35.2
|
|
|
0.4
|
|
|
35.2
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
25.1
|
|
|
12.3
|
|
|
25.1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted net income
|
$
|
68.4
|
|
|
$
|
66.6
|
|
|
$
|
223.2
|
|
|
$
|
158.8
|
|
|
June 30,
2012 |
|
|
September 30,
2011 |
|
||
Current Portion of Debt
|
$
|
257.7
|
|
|
$
|
143.3
|
|
Long-Term Debt Due After One Year
|
3,102.6
|
|
|
3,302.5
|
|
||
|
3,360.3
|
|
|
3,445.8
|
|
||
Less: Hedge Adjustments Resulting From Fair Value Interest Rate Derivatives or Swaps
|
(0.2
|
)
|
|
(0.4
|
)
|
||
|
3,360.1
|
|
|
3,445.4
|
|
||
Less: Cash and Cash Equivalents
|
(19.5
|
)
|
|
(41.7
|
)
|
||
Net Debt
|
$
|
3,340.6
|
|
|
$
|
3,403.7
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 6.
|
EXHIBITS
|
|
|
ROCK-TENN COMPANY
|
|||
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
Date:
|
August 1, 2012
|
|
|
By:
|
/s/ Steven C. Voorhees
|
|
|
|
|
Steven C. Voorhees
|
|
|
|
|
|
Executive Vice President, Chief Financial Officer & Chief Administrative Officer
|
|
|
|
|
|
(Principal Financial Officer and duly authorized officer)
|
Exhibit 2.1
|
|
Agreement and Plan of Merger, dated as of January 10, 2008, by and among Rock-Tenn Company, Carrier Merger Sub, Inc., Southern Container Corp., the Stockholders listed therein, Steven Hill and the Stockholders’ Representative, as defined therein (incorporated by reference to Exhibit 2.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2009).
|
|
|
|
Exhibit 2.2
|
|
Agreement and Plan of Merger, dated as of January 23, 2011, by and among, Rock-Tenn Company, Sam Acquisition, LLC and Smurfit-Stone Container Corporation (incorporated by reference to Exhibit 2.1 of RockTenn's Current Report on Form 8-K, filed on January 24, 2011).
|
|
|
|
Exhibit 3.1
|
|
Restated and Amended Articles of Incorporation of the Registrant effective January 13, 1994 (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1, File No 33-73312).
|
|
|
|
Exhibit 3.2
|
|
Articles of Amendment to the Registrant’s Restated and Amended Articles of Incorporation effective February 10, 1994 (incorporated by reference to Exhibit 3.2 to the Registrant’s Amendment No. 2 to Form S-4 filed on April 19, 2011, File No. 333-172432).
|
|
|
|
Exhibit 3.3
|
|
Articles of Amendment to the Registrant’s Restated and Amended Articles of Incorporation effective February 2, 1995 (incorporated by reference to Exhibit 3.2 of the Registrant’s Annual Report on Form 10-K for the year ended September 30, 2000).
|
|
|
|
Exhibit 3.4
|
|
Bylaws of the Registrant (Amended and Restated as of October 31, 2008) (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed on November 6, 2008).
|
|
|
|
Exhibit 3.5
|
|
Amendment to the Bylaws of the Registrant (as of December 14, 2009) (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed on December 14, 2009).
|
|
|
|
Exhibit 4.1
|
|
Credit Agreement, dated May 27, 2011, by and among RockTenn Company, as borrower, Rock-Tenn Company of Canada/Compagnie Rock-Tenn du Canada, as Canadian borrower, certain subsidiaries of RockTenn from time to time party thereto, as guarantors, the lenders party thereto, Wells Fargo Bank, National Association, as administrative agent and collateral agent for the lenders, and Bank of America, N.A., acting through its Canada Branch, as Canadian administrative agent for the lenders (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on May 27, 2001).
|
|
|
|
Exhibit 4.2
|
|
Fourth Amended and Restated Credit and Security Agreement, dated as of May 27, 2011, among Rock-Tenn Financial, Inc., as Borrower, Rock-Tenn Converting Company, as Servicer, the Lenders and Co-Agents from time to time party hereto, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland", New York Branch, as Administrative Agent and as Funding Agent(incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed on May 27, 2001).
|
|
|
|
Exhibit 4.3
|
|
Amendment No. 1 dated as of December 2, 2011, among Rock-Tenn Company (“
RockTenn
”), as borrower, Rock-Tenn Company of Canada/Compagnie Rock-Tenn du Canada, as Canadian borrower (together with RockTenn, the “
Borrowers
”), certain subsidiaries of RockTenn from time to time party thereto, as guarantors, the lenders party thereto, as lenders (the “
Lenders
”), Wells Fargo Bank, National Association, as administrative agent for the Lenders, and Bank of America, N.A., acting through its Canada Branch, as Canadian administrative agent for the Lenders, to the Credit Agreement dated as of May 27, 2011, by and among the Borrowers, certain subsidiaries of RockTenn from time to time party thereto, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent and collateral agent for such lenders, and Bank of America, N.A., acting through its Canada Branch, as Canadian administrative agent for such lenders (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on December 2, 2011).
|
|
|
|
Exhibit 4.4
|
|
Amendment No. 2 dated as of March 30, 2012, among Rock-Tenn Company (“RockTenn”), as borrower, Rock-Tenn Company of Canada/Compagnie Rock-Tenn du Canada, as Canadian borrower (together with RockTenn, the “Borrowers”), the lenders party thereto, as lenders (the “Lenders”), Wells Fargo Bank, National Association, as administrative agent for the Lenders, and Bank of America, N.A., acting through its Canada Branch, as Canadian administrative agent for the Lenders, to the Credit Agreement dated as of May 27, 2011, as amended by Amendment No. 1 dated as of December 2, 2011, by and among the Borrowers, certain subsidiaries of RockTenn from time to time party thereto, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent and collateral agent for such lenders, and Bank of America, N.A., acting through its Canada Branch, as Canadian administrative agent for such lenders (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on March 30, 2012).
|
|
|
|
Exhibit 10.1
|
|
Amended and Restated Rock-Tenn Company 2004 Incentive Stock Plan Effective as of January 27, 2012.
|
|
|
|
Exhibit 31.1
|
|
Certification Accompanying Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by James A. Rubright, Chairman of the Board and Chief Executive Officer of Rock-Tenn Company.
|
|
|
|
Exhibit 31.2
|
|
Certification Accompanying Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Steven C. Voorhees, Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Rock-Tenn Company.
|
|
|
|
Exhibit 101.INS
|
|
XBRL Instance Document.
|
|
|
|
Exhibit 101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
Exhibit 101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
Exhibit 101.DEF
|
|
XBRL Taxonomy Definition Label Linkbase.
|
|
|
|
Exhibit 101.LAB
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XBRL Taxonomy Extension Label Linkbase.
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Exhibit 101.PRE
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XBRL Taxonomy Extension Presentation Linkbase.
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Exhibit 32.1
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Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by James A. Rubright, Chairman of the Board and Chief Executive Officer of Rock-Tenn Company, and by Steven C. Voorhees, Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Rock-Tenn Company.
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§ 1. BACKGROUND AND PURPOSE
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1
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§ 2. DEFINITIONS
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1
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2.1
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Affiliate
1
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2.2
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Board
1
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2.3
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Cash Bonus Incentive
1
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2.4
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Cash Bonus Incentive Certificate
1
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2.5
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Change Effective Date
1
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2.6
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Change in Control
1
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2.7
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Code
3
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2.8
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Committee
3
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2.9
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Company
3
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2.10
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Director
3
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2.11
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Eligible Employee
3
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2.12
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Fair Market Value
3
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2.13
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ISO
3
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2.14
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1933 Act
3
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2.15
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1934 Act
3
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2.16
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Non-ISO
4
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2.17
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Option
4
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2.18
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Option Certificate
4
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2.19
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Option Price
4
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2.20
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Parent
4
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2.21
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Plan
4
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2.22
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Preexisting Plan
4
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2.23
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Rule 16b-3
4
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2.24
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SAR Value
4
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2.25
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Stock
4
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2.26
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Stock Appreciation Right
4
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2.27
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Stock Appreciation Right Certificate
4
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2.28
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Stock Grant
4
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2.29
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Stock Grant Certificate
4
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2.30
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Stock Unit Grant
5
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2.31
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Subsidiary
5
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2.32
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Ten Percent Shareholder
5
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§ 3. SHARES AND GRANT LIMITS
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5
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3.1
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Shares Reserved
5
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3.2
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Source of Shares
5
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3.3
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Use of Proceeds
6
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3.4
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Grant Limits
6
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3.5
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Preexisting Plan
6
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§ 4. EFFECTIVE DATE
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6
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§ 5. COMMITTEE
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6
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§ 6. ELIGIBILITY
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7
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§ 7. OPTIONS
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7
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7.1
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Committee Action
7
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7.2
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$100,000 Limit
7
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7.3
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Option Price
8
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7.5
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Exercise
8
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§ 8. STOCK APPRECIATION RIGHTS
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9
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8.1
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Committee Action
9
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8.2
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Terms and Conditions
9
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8.3
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Exercise
10
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§ 9. STOCK GRANTS
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10
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9.1
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Committee Action
10
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9.2
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Conditions
10
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9.3
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Dividends, Voting Rights and Creditor Status
12
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9.4
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Satisfaction of Forfeiture Conditions.
13
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9.5
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Performance Based Grants and Cash Bonus Alternatives
13
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§ 10. NON-TRANSFERABILITY
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14
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§ 11. SECURITIES REGISTRATION
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15
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§ 12. LIFE OF PLAN
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15
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§ 13. ADJUSTMENT
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16
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13.1
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Capital Structure
16
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13.2
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Available Shares
16
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13.3
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Transactions Described in § 424 of the Code 17
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13.4
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Fractional Shares
17
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§ 14. CHANGE IN CONTROL
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17
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§ 15. AMENDMENT OR TERMINATION
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18
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§ 16. MISCELLANEOUS
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18
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16.1
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Shareholder Rights
18
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16.2
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No Contract of Employment
18
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16.3
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Withholding
19
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16.4
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Construction
19
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16.5
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Other Conditions
19
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16.6
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Rule 16b-3
19
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16.7
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Coordination with Employment Agreements and Other
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(a)
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any "person" (as that term is used in Sections 13(d) and 14(d)(2) of the 1934 Act), is or becomes the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) directly or indirectly, of securities representing 20% or more of the combined voting power for election of directors of the then outstanding securities of the Company or any successor to the Company;
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(b)
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during any period of two consecutive years or less, individuals who at the beginning of such period constitute the Board cease, for any reason, to constitute at least a majority of the Board, unless the election or nomination for election of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period;
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(c)
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the consummation of any reorganization, merger, consolidation or share exchange which results in the common stock of the Company being changed, converted or exchanged into or for securities of another corporation (other than a merger with a wholly-owned subsidiary of the Company) or any dissolution or liquidation of the Company or any sale or the disposition of 50% or more of the assets or business of the Company; or
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(d)
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the consummation of any reorganization, merger, consolidation or share exchange unless (A) the persons who were the beneficial owners of the outstanding shares of the common stock of the Company immediately before the consummation of such transaction beneficially own more than 50% of the outstanding shares of the common stock of the successor or survivor corporation in such transaction immediately following the consummation of such transaction and (B) the number of shares of the common stock of such successor or survivor corporation beneficially owned by the persons described in § 2.4(d)(A) immediately following the consummation of such transaction is beneficially owned by each such person in substantially the same proportion that each such person had beneficially owned shares of the Company common stock immediately before the consummation of such transaction, provided (C) the percentage described in § 2.4(d)(A) of the beneficially owned shares of the successor or survivor corporation and the number described in § 2.4 (d)(B) of the beneficially owned shares of the successor or survivor corporation shall be determined exclusively by reference to the shares of the successor or survivor corporation which result from the beneficial ownership of shares of common stock of the Company by the
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(a)
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Exercise Period
. Each Option granted under this Plan shall be exercisable in whole or in part at such time or times as set forth in the related Option Certificate, but no Option Certificate shall make an Option exercisable on or after the earlier of
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(1)
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the date which is the fifth anniversary of the date the Option is granted, if the Option is an ISO and the Eligible Employee is a Ten Percent Shareholder on the date the Option is granted, or
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(2)
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the date which is the tenth anniversary of the date the Option is granted, if the Option is (a) a Non-ISO or (b) an ISO which is granted to an Eligible Employee who is not a Ten Percent Shareholder on the date the Option is granted.
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(b)
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Termination of Status as Eligible Employee or Director
. Subject to § 7.5(a), an Option Certificate may provide for the
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(a)
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Stock Appreciation Right Certificate
. If a Stock Appreciation Right is granted independent of an Option, such Stock Appreciation Right shall be evidenced by a Stock Appreciation Right Certificate, and such certificate shall set forth the number of shares of Stock on which the Eligible Employee's or Director's right to appreciation shall be based and the SAR Value of each share of Stock. Such SAR Value shall be no less than the Fair Market Value of a share of Stock on the date that the Stock Appreciation Right is granted. The Stock Appreciation Right Certificate shall set forth such other terms and conditions for the exercise of the Stock Appreciation Right as the Committee deems appropriate under the circumstances, but no Stock Appreciation Right Certificate shall make a Stock Appreciation Right exercisable on or after the date which is the tenth anniversary of the date such Stock Appreciation Right is granted.
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(b)
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Option Certificate
. If a Stock Appreciation Right is granted together with an Option, such Stock Appreciation Right shall be evidenced by an Option Certificate, the number of shares of Stock on which the Eligible Employee's or Director's right to appreciation shall be based shall be the same as the number of shares of Stock subject to the related Option, and the SAR Value for each such share of Stock shall be no less than the Option Price under the related Option. Each such Option Certificate shall provide that the exercise of the Stock Appreciation Right with respect to any share of Stock shall cancel the Eligible Employee's or Director's right to exercise his or her Option with respect to such share and, conversely, that
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(c)
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Minimum Period of Service
. If the only condition to exercise of a Stock Appreciation Right is the completion of a period of service, such period of service shall be no less than the one (1) year period which starts on the date as of which the Stock Appreciation Right is granted unless the Committee determines that a shorter period of service (or no period of service) better serves the Company's interest.
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(a)
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Conditions to Issuance of Stock
. The Committee acting in its absolute discretion may make the issuance of Stock under a Stock Grant subject to the satisfaction of one, or more than one, condition which the Committee deems appropriate under the circumstances for Eligible Employees or Directors generally or for an Eligible Employee or a Director in particular, and the related Stock Grant Certificate shall set forth each such condition and the deadline for satisfying each such condition. Stock subject to a Stock Grant shall be issued in the name of an Eligible Employee or Director only after each such condition, if any, has been timely satisfied, and any Stock which is so issued shall be held by the Company pending the satisfaction of the forfeiture conditions, if any, under § 9.2(b) for the related Stock Grant.
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(b)
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Conditions on Forfeiture of Stock or Cash Payment
. The Committee acting in its absolute discretion may make any cash payment due under a Stock Unit Grant or Stock issued in the name of an Eligible Employee or Director under a Stock Grant non-forfeitable subject to the satisfaction of one, or more than one, objective employment, performance or other condition that the Committee acting in its absolute discretion deems appropriate under the circumstances for Eligible Employees or Directors generally or for an Eligible Employee or a Director in particular, and the related Stock Grant Certificate shall set forth each such condition, if any, and the deadline, if any, for satisfying each such condition. An Eligible Employee's or a Director's non-forfeitable interest in the shares of Stock underlying a Stock Grant or the cash payable under a Stock Unit Grant shall depend on the extent to which he or she timely satisfies each such condition. If a share of Stock is issued under this § 9.2(b) before an Eligible Employee's or Director's interest in such share of Stock is non-forfeitable, (1) such share of Stock shall not be available for re-issuance under § 3 until such time, if any, as such share of Stock thereafter is forfeited as a result of a failure to timely satisfy a forfeiture condition and (2) the Company shall have the right to condition any such issuance on the Eligible Employee or Director first signing an irrevocable stock power in favor of the Company with respect to the forfeitable shares of Stock issued to such Eligible Employee or Director in order for the Company to effect any forfeiture called for under the related Stock Grant Certificate.
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(c)
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Minimum Period of Service
. If the only condition to the forfeiture of a Stock Grant or a Stock Unit Grant is the completion of a period of service, such period of service shall be no less than the three
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(a)
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Cash Dividends
. Except as otherwise set forth in a Stock Grant Certificate, if a dividend is paid in cash on a share of Stock after such Stock has been issued under a Stock Grant but before the first date that an Eligible Employee's or a Director's interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable, the Company shall pay such cash dividend directly to such Eligible Employee or Director.
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(b)
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Stock Dividends
. If a dividend is paid on a share of Stock in Stock after such Stock has been issued under a Stock Grant but before the first date that an Eligible Employee's or a Director's interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable, the Company shall hold such dividend Stock subject to the same conditions under § 9.2(b) as the related Stock Grant.
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(c)
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Other
. If a dividend (other than a dividend described in § 9.3(a) or § 9.3(b)) is paid with respect to a share of Stock after such Stock has been issued under a Stock Grant but before the first date that an Eligible Employee's or a Director's interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable, the Company shall distribute or hold such dividend in accordance with such rules as the Committee shall adopt with respect to each such dividend.
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(d)
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Voting
. Except as otherwise set forth in a Stock Grant Certificate, an Eligible Employee or a Director shall have the right to vote the Stock issued under his or her Stock Grant during the period which comes after such Stock has been issued under a Stock Grant but before the first date that an Eligible Employee's or Director's interest in such Stock (1) is forfeited completely or (2) becomes completely non-forfeitable.
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(e)
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General Creditor Status
. Each Eligible Employee and each Director to whom a Stock Unit grant is made shall be no more than a general and unsecured creditor of the Company with respect to any cash payable under such Stock Unit Grant.
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(a)
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General
. The Committee shall (where the Committee under the circumstances deems in the Company's best interest) either (1) make Stock Grants and Stock Unit Grants or, as an alternative to Stock Grants or Stock Unit Grants, grant Cash Bonus Incentives to Eligible Employees subject to at least one condition related to one, or more than one, performance goal based on the performance goals described in § 9.5(b) which seems likely to result in the Stock Grant or Stock Unit Grant or Cash Bonus Incentive qualifying as “performance-based compensation” under § 162(m) of the Code or (2) make Stock Grants or Stock Unit Grants or grant Cash Bonus Incentives under such other circumstances as the Committee deems likely to result in an income tax deduction for the Company with respect to such Stock Grant or Stock Unit Grant or Cash Bonus Incentive. Each grant of a Cash Bonus Incentive to an Eligible Employee or Director shall be evidenced by a Cash Bonus Incentive Certificate
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(b)
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Performance Goals
. A performance goal is described in this § 9.5(b) if such goal relates to (1) the Company's return over capital costs or increases in return over capital costs, (2) the Company's return on invested capital or increases in return on invested capital, (3) the Company's operating performance or operating performance improvement, (4) the Company's safety record, (5) the Company's customer satisfaction survey, (6) the Company's total earnings or the growth in such earnings, (7) the Company's consolidated earnings or the growth in such earnings, (8) the Company's earnings per share or the growth in such earnings, (9) the Company's net earnings or income or the growth in such earnings or income, (10) the Company's earnings before interest expense, taxes, depreciation, amortization and other non-cash items or the growth in such earnings, (11) the Company's earnings before interest and taxes or the growth in such earnings, (12) the Company's consolidated net income or the growth in such income, (13) the value of the Company's common stock or the growth in such value, (14) the Company's stock price or the growth in such
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(c)
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Alternative Goals
. A performance goal under this § 9.5 may be set in any manner determined by the Committee, including looking to achievement on an absolute or relative basis in relation to peer groups or indexes. Further, the Committee may express any goal in alternatives, or in a range of alternatives, as the Committee deems appropriate or helpful, such as including or excluding (1) any acquisitions or dispositions, restructurings, discontinued operations, extraordinary items, and other unusual or non-recurring charges, (2) any event either not directly related to the operations of the Company or not within the reasonable control of the Company's management, or (3) the effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles.
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(1)
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the tenth anniversary of the effective date of this Plan (as determined under § 4), in which event this Plan otherwise thereafter shall continue in effect until all outstanding Options, Stock Appreciation Rights and Cash Bonus Incentives have been exercised in full or no longer are exercisable and all Stock issued under any Stock Grants
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(2)
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the date on which all of the Stock reserved under § 3 has (as a result of the exercise of Options or Stock Appreciation Rights granted under this Plan or the satisfaction of the forfeiture conditions, if any, on Stock Grants) been issued or no longer is available for use under this Plan, in which event this Plan also shall terminate on such date.
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(a)
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any equity restructuring or change in the capitalization of the Company, including, but not limited to, spin offs, stock dividends, large non-reoccurring dividends, rights offerings or stock splits, or
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(b)
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any other transaction described in § 424(a) of the Code which does not constitute a Change in Control of the Company
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Rock-Tenn Company;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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 the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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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
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(b)
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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.
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Date:
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August 1, 2012
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/s/ James A. Rubright
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James A. Rubright
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Chairman of the Board and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Rock-Tenn Company;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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 the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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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
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(b)
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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.
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Date:
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August 1, 2012
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/s/ Steven C. Voorhees
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Steven C. Voorhees
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Executive Vice President, Chief Financial Officer, and Chief Administrative Officer
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/s/ James A. Rubright
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James A. Rubright
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Chairman of the Board and Chief Executive Officer
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August 1, 2012
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/s/ Steven C. Voorhees
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Steven C. Voorhees
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Executive Vice President, Chief Financial Officer and Chief Administrative Officer
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August 1, 2012
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