|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 31,
2011
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or
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|
o
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TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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26-0405422
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(State of incorporation)
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(I.R.S. employer
identification no.)
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814 Livingston Court, Marietta, Georgia
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30067
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(Address of principal executive
offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value per share
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New York Stock Exchange
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Series A Junior Participating Preferred Stock
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New York Stock Exchange
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Purchase Rights Associated with the Common Stock
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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ITEM 1.
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BUSINESS
|
•
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convenience through ease of carrying, storage, delivery, dispensing of product and food preparation for consumers;
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•
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a smooth surface printed with high-resolution, multi-color graphic images that help improve brand awareness and visibility of products on store shelves; and
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•
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durability, stiffness and wet and dry tear strength; leak, abrasion and heat resistance; barrier protection from moisture, oxygen, oils and greases as well as enhanced microwave heating performance.
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•
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beverage, including beer, soft drinks, energy drinks, water and juices;
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•
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food, including cereal, desserts, frozen, refrigerated and microwavable foods and pet foods;
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•
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prepared foods, including snacks, quick-serve foods for restaurants and food service products; and
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•
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household products, including dishwasher and laundry detergent, health care and beauty aids, and tissues and papers.
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•
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beverage multiple-packaging — Multi-packs for beer, soft drinks, energy drinks, water and juices;
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•
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active microwave technologies — Substrates that improve the preparation of foods in the microwave; and
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•
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easy opening and closing features — Pour spouts and sealable liners.
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2011 Net Tons
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Location
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Product
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# of Machines
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Produced
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West Monroe, LA
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CUK
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2
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732,000
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Macon, GA
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CUK
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2
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609,000
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Kalamazoo, MI
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CRB
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2
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438,000
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Battle Creek, MI
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CRB
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2
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169,000
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Middletown, OH
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CRB
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1
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158,000
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Santa Clara, CA
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CRB
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1
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138,000
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Pekin, IL
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URB
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1
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42,000
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West Monroe, LA
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Containerboard
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1
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132,000
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West Monroe, LA
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Kraft Paper
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1
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45,000
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Pine Bluff, AR
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Kraft Paper
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1
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(a)
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Item 1A.
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RISK FACTORS
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Carol Stream, IL
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Folding Cartons; Research and Development
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Centralia, IL
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Folding Cartons
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Charlotte, NC
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Folding Cartons
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Elk Grove, IL(a)
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Folding Cartons
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Fort Smith, AR(a)
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Folding Cartons
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Gordonsville, TN
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Folding Cartons
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Idaho Falls, ID
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Folding Cartons
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Igualada, Barcelona, Spain(a)
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Folding Cartons
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Irvine, CA
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Folding Cartons; Design Center
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Jundiai, Sao Paulo, Brazil
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Folding Cartons
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Kalamazoo, MI
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Folding Cartons
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Kendallville, IN
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Folding Cartons
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Laporte, IN (b)
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Folding Cartons
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Lawrenceburg, TN
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Folding Cartons
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Lumberton, NC
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Folding Cartons
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Marion, OH
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Folding Cartons
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Masnieres, France
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Folding Cartons
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Menasha, WI
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Folding Cartons; Research and Development
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Mississauga, Ontario, Canada
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Folding Cartons; Research and Development
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Mitchell, SD
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Folding Cartons
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Orchard Park, CA
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Folding Cartons
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Oroville, CA
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Folding Cartons
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Pacific, MO
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Folding Cartons
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Perry, GA
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Folding Cartons
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Piscataway, NJ
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Folding Cartons
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Queretaro, Mexico
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Folding Cartons
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Renton, WA
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Folding Cartons
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Solon, OH
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Folding Cartons
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Tuscaloosa, AL
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Folding Cartons
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Valley Forge, PA
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Folding Cartons; Design Center
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Wausau, WI
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Folding Cartons
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West Monroe, LA(a)
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Folding Cartons
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Flexible Packaging:
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Arcadia, LA
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Multi-wall Bag
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Brampton, Ontario, Canada
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Plastics
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Des Moines, IA
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Plastics
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Eastman, GA
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Multi-wall Bag
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Fowler, IN
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Multi-wall Bag
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Greensboro, NC
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Labels
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Kansas City, MO
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Multi-wall Bag
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Louisville, KY
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Multi-wall Bag
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Milwaukee, WI
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Plastics
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New Philadelphia, OH
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Multi-wall Bag
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North Portland, OR
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Multi-wall Bag
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Norwood, OH
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Labels
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Pine Bluff, AR
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Kraft Paper
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Pine Bluff, AR
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Multi-wall Bag
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Portage, IN
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Contract Manufacturing
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Quincy, IL
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Multi-wall Bag
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Salt Lake City, UT
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Multi-wall Bag
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(a)
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Multiple facilities in this location.
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(b)
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The Company has announced the intended closure of the location.
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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2011
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2010
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||
High
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Low
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High
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Low
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First Quarter
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$5.51
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$4.03
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$4.10
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$3.00
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Second Quarter
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5.78
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4.75
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3.99
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2.85
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Third Quarter
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5.50
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3.45
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3.78
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3.02
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Fourth Quarter
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4.60
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3.16
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4.07
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3.20
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12/31/2006
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12/31/2007
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12/31/2008
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12/31/2009
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12/31/2010
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12/31/2011
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||||||||||||
Graphic Packaging Holding Company
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$
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100.00
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|
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$
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85.22
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$
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26.33
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$
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80.14
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$
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89.84
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$
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98.38
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S&P 500 Stock Index
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100.00
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105.49
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66.46
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84.05
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96.71
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98.75
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||||||
DJ U.S. Container & Packaging Index
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100.00
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106.73
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66.91
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|
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93.98
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110.23
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110.39
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ITEM 6.
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SELECTED FINANCIAL DATA
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Year Ended December 31,
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||||||||||||||
In millions, except per share amounts
|
2011
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2010
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2009
|
2008
(a)
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2007
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||||||||||
Statement of Operations Data:
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||||||||||
Net Sales
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$
|
4,206.3
|
|
$
|
4,095.0
|
|
$
|
4,095.8
|
|
$
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4,079.4
|
|
$
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2,421.2
|
|
Income from Operations
|
190.3
|
|
219.5
|
|
282.7
|
|
149.9
|
|
151.2
|
|
|||||
Net Income (Loss) from Continuing Operations
|
275.2
|
|
10.7
|
|
56.4
|
|
(98.8
|
)
|
(49.1
|
)
|
|||||
Net Loss Attributable to Noncontrolling Interests
|
1.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Loss from Discontinued Operations, Net of Taxes
|
—
|
|
—
|
|
—
|
|
(0.9
|
)
|
(25.5
|
)
|
|||||
Net Income (Loss) Attributable Graphic Packaging Holding Company
|
276.9
|
|
10.7
|
|
56.4
|
|
(99.7
|
)
|
(74.6
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Income (Loss) Per Share — Basic:
|
|
|
|
|
|
||||||||||
Continuing Operations
|
0.73
|
|
0.03
|
|
0.16
|
|
(0.31
|
)
|
(0.24
|
)
|
|||||
Noncontrolling Interests
|
(0.00
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Discontinued Operations
|
—
|
|
—
|
|
—
|
|
(0.00
|
)
|
(0.13
|
)
|
|||||
Net Income (Loss) Attributable Graphic Packaging Holding Company *
|
0.74
|
|
0.03
|
|
0.16
|
|
(0.32
|
)
|
(0.37
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Income (Loss) Per Share — Diluted:
|
|
|
|
|
|
||||||||||
Continuing Operations
|
0.72
|
|
0.03
|
|
0.16
|
|
(0.31
|
)
|
(0.24
|
)
|
|||||
Noncontrolling Interests
|
(0.00
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Discontinued Operations
|
—
|
|
—
|
|
—
|
|
(0.00
|
)
|
(0.13
|
)
|
|||||
Net Income (Loss) Attributable to Graphic Packaging Holding Company *
|
0.73
|
|
0.03
|
|
0.16
|
|
(0.32
|
)
|
(0.37
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Weighted average number of shares outstanding:
|
|
|
|
|
|
||||||||||
Basic
|
376.3
|
|
343.8
|
|
343.1
|
|
315.8
|
|
201.8
|
|
|||||
Diluted
|
381.7
|
|
347.4
|
|
344.6
|
|
315.8
|
|
201.8
|
|
|||||
Balance Sheet Data:
|
|
|
|
|
|
||||||||||
(as of period end)
|
|
|
|
|
|
||||||||||
Cash and Equivalents
|
$
|
271.8
|
|
$
|
138.7
|
|
$
|
149.8
|
|
$
|
170.1
|
|
$
|
9.3
|
|
Total Assets
|
4,649.7
|
|
4,484.6
|
|
4,701.8
|
|
4,983.1
|
|
2,777.3
|
|
|||||
Total Debt
|
2,365.8
|
|
2,579.1
|
|
2,800.2
|
|
3,183.8
|
|
1,878.4
|
|
|||||
Total Shareholders’ Equity
|
1,166.7
|
|
747.0
|
|
728.8
|
|
525.2
|
|
144.0
|
|
|||||
Additional Data:
|
|
|
|
|
|
||||||||||
Depreciation & Amortization
|
$
|
278.4
|
|
$
|
288.7
|
|
$
|
305.4
|
|
$
|
264.3
|
|
$
|
189.6
|
|
Capital Spending
|
160.1
|
|
122.8
|
|
129.9
|
|
183.3
|
|
95.9
|
|
(a) On March 8, 2008, the businesses of the Graphic Packaging Corporation and Altivity Packaging, LLC were combined.
|
|
* May not foot due to rounding
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
•
|
During December 2011, the Company combined its multi-wall bag and specialty plastics packaging businesses with the kraft paper and multi-wall bag businesses of Delta Natural Kraft, LLC and Mid-America Packaging, LLC (collectively "DNK"), both wholly owned subsidiaries of Capital Five Investments, LLC ("CVI"). Under the terms of the transaction, the Company formed a new limited liability company, Graphic Flexible Packaging, LLC ("GFP") and contributed the net assets of its multi-wall bag and specialty plastics packaging businesses to it. CVI concurrently contributed its ownership interests in DNK to GFP. Neither party received cash consideration as part of the transaction. After the combination, the Company owns approximately 87% of GFP and will consolidate its results of operations. The remaining 13% of GFP is owned by CVI. GFP is included in the flexible segment. This transaction is herein referred to as the "DNK Transaction".
|
•
|
Due to declines in the current and forecasted operating results for a reporting unit within the flexible packaging segment, the Company performed an interim impairment analysis for this reporting unit as of September 30, 2011. The Company determined the fair value of the reporting unit by utilizing a discounted cash flow analysis based on recent forecasts which were discounted using a weighted average cost of capital, and market indicators of terminal year cash flows based upon a multiple of EBITDA. Based on this analysis, the Company recorded an estimated non-cash pre-tax goodwill impairment charge of $96.3 million in the third quarter of 2011. This charge is recorded as Goodwill Impairment, Restructuring and Other Special Charges (Credits) in the Company's Consolidated Statements of Operations. Prior to the impairment charge, the amount of goodwill attributable to the reporting unit was approximately $112 million.
|
•
|
During the second quarter 2011, the Company completed a public offering of 52.5 million shares of its common stock, par value $0.01 per share, priced at $4.75 per share and received net proceeds of $237.7 million after offering expenses. The Company used $32.9 million of the net proceeds to repurchase and subsequently retire approximately 7.3 million shares of common stock held by the Grover C. Coors Trust. The Company also used a portion of the net proceeds to prepay $150.0 million of its term loans. Additionally, the Company used $51.9 million to acquire substantially all of the net assets of Sierra Pacific Packaging, Inc. (“Sierra”), a producer of folding cartons, beverage carriers and corrugated boxes for the consumer packaged goods industry.
|
•
|
Net Sales in 2011 increased by $111.3 million or 2.7% to $4,206.3 million from $4,095.0 million in 2010 due primarily to the impact of higher pricing for both the paperboard packaging segment and the flexible packaging segment and favorable foreign exchange rates, primarily in Europe, Japan and Australia. These increases were partially offset by lower volume across the segments. In addition, net sales were favorably impacted by the impact of the Sierra acquisition and increases in international markets and demand in certain special products.
|
•
|
Income from Operations in 2011 decreased by $29.2 million, or 13.3%, to $190.3 million from $219.5 million in 2010. This decrease was due primarily to higher input costs experienced in 2011, the non-cash pre-tax goodwill impairment charge of $96.3 million, charges related to announced facility closures and reduction in force, and asset impairment charges related to assets held for sale. The negative impacts were partially offset by the higher pricing, cost savings achieved through continuous improvement programs and manufacturing initiatives and lower merger related expenses of $55.1 million.
|
|
Year Ended December 31,
|
||||||||
In millions
|
2011
|
2010
|
2009
|
||||||
NET SALES:
|
|
|
|
||||||
Paperboard Packaging
|
$
|
3,503.9
|
|
$
|
3,419.4
|
|
$
|
3,423.5
|
|
Flexible Packaging
|
702.4
|
|
675.6
|
|
672.3
|
|
|||
Total
|
$
|
4,206.3
|
|
$
|
4,095.0
|
|
$
|
4,095.8
|
|
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||||
Paperboard Packaging
|
$
|
344.7
|
|
$
|
303.7
|
|
$
|
288.3
|
|
Flexible Packaging
|
(86.1
|
)
|
18.0
|
|
2.5
|
|
|||
Corporate
|
(68.3
|
)
|
(102.2
|
)
|
(8.1
|
)
|
|||
Total
|
$
|
190.3
|
|
$
|
219.5
|
|
$
|
282.7
|
|
In millions
|
Year Ended December 31,
|
||||||||||
2011
|
2010
|
Increase
|
Percent Change
|
||||||||
Paperboard Packaging
|
$
|
3,503.9
|
|
$
|
3,419.4
|
|
$
|
84.5
|
|
2.5
|
%
|
Flexible Packaging
|
702.4
|
|
675.6
|
|
26.8
|
|
4.0
|
%
|
|||
Total
|
$
|
4,206.3
|
|
$
|
4,095.0
|
|
$
|
111.3
|
|
2.7
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||
|
|
Variances
|
|
|||||||||||||||
In millions
|
2010
|
Price
|
Volume/Mix
|
Exchange
|
Total
|
2011
|
||||||||||||
Paperboard Packaging
|
$
|
3,419.4
|
|
$
|
84.1
|
|
$
|
(25.6
|
)
|
$
|
26.0
|
|
$
|
84.5
|
|
$
|
3,503.9
|
|
Flexible Packaging
|
675.6
|
|
31.4
|
|
(5.3
|
)
|
0.7
|
|
26.8
|
|
702.4
|
|
||||||
Total
|
$
|
4,095.0
|
|
$
|
115.5
|
|
$
|
(30.9
|
)
|
$
|
26.7
|
|
$
|
111.3
|
|
$
|
4,206.3
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2011
|
2010
|
Increase (Decrease)
|
Percent Change
|
|||||||
Paperboard Packaging
|
$
|
344.7
|
|
$
|
303.7
|
|
$
|
41.0
|
|
13.5
|
%
|
Flexible Packaging
|
(86.1
|
)
|
18.0
|
|
(104.1
|
)
|
(a)
|
|
|||
Corporate
|
(68.3
|
)
|
(102.2
|
)
|
33.9
|
|
(a)
|
|
|||
Total
|
$
|
190.3
|
|
$
|
219.5
|
|
$
|
(29.2
|
)
|
(13.3
|
)%
|
(a)
|
Percentage calculation not meaningful.
|
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
|
Variances
|
|
|||||||||||||||||||||
In millions
|
2010
|
Price
|
Volume/Mix
|
Inflation
|
Exchange
|
Other(a)
|
Total
|
2011
|
||||||||||||||||
Paperboard Packaging
|
$
|
303.7
|
|
$
|
84.1
|
|
$
|
(5.8
|
)
|
$
|
(107.6
|
)
|
$
|
16.3
|
|
$
|
54.0
|
|
$
|
41.0
|
|
$
|
344.7
|
|
Flexible Packaging
|
18.0
|
|
31.4
|
|
(3.0
|
)
|
(43.2
|
)
|
0.2
|
|
(89.5
|
)
|
(104.1
|
)
|
(86.1
|
)
|
||||||||
Corporate
|
(102.2
|
)
|
—
|
|
—
|
|
—
|
|
(3.2
|
)
|
37.1
|
|
33.9
|
|
(68.3
|
)
|
||||||||
Total
|
$
|
219.5
|
|
$
|
115.5
|
|
$
|
(8.8
|
)
|
$
|
(150.8
|
)
|
$
|
13.3
|
|
$
|
1.6
|
|
$
|
(29.2
|
)
|
$
|
190.3
|
|
(a)
|
Includes the Company’s cost reduction initiatives, the goodwill impairment charge, and merger-related expenses.
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2010
|
2009
|
Increase (Decrease)
|
Percent Change
|
|||||||
Paperboard Packaging
|
$
|
3,419.4
|
|
$
|
3,423.5
|
|
$
|
(4.1
|
)
|
(0.1
|
)%
|
Flexible Packaging
|
675.6
|
|
672.3
|
|
3.3
|
|
0.5
|
%
|
|||
Total
|
$
|
4,095.0
|
|
$
|
4,095.8
|
|
$
|
(0.8
|
)
|
(0.0
|
)%
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
|
Variances
|
|
||||||||||||||||||
|
|
|
Volume/Mix
|
|
|
|
|||||||||||||||
In millions
|
2009
|
Price
|
Divested Businesses
|
Organic
|
Exchange
|
Total
|
2010
|
||||||||||||||
Paperboard Packaging
|
$
|
3,423.5
|
|
$
|
(7.6
|
)
|
$
|
—
|
|
$
|
(4.4
|
)
|
$
|
7.9
|
|
$
|
(4.1
|
)
|
$
|
3,419.4
|
|
Flexible Packaging
|
672.3
|
|
11.3
|
|
(12.5
|
)
|
2.2
|
|
2.3
|
|
3.3
|
|
675.6
|
|
|||||||
Total
|
$
|
4,095.8
|
|
$
|
3.7
|
|
$
|
(12.5
|
)
|
$
|
(2.2
|
)
|
$
|
10.2
|
|
$
|
(0.8
|
)
|
$
|
4,095.0
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2010
|
2009
|
Increase (Decrease)
|
Percent Change
|
|||||||
Paperboard Packaging
|
$
|
303.7
|
|
$
|
288.3
|
|
$
|
15.4
|
|
5.3
|
%
|
Flexible Packaging
|
18.0
|
|
2.5
|
|
15.5
|
|
(a)
|
|
|||
Corporate
|
(102.2
|
)
|
(8.1
|
)
|
(94.1
|
)
|
(a)
|
|
|||
Total
|
$
|
219.5
|
|
$
|
282.7
|
|
$
|
(63.2
|
)
|
(22.4
|
)%
|
(a)
|
Percentage calculation not meaningful.
|
|
Year Ended December 31,
|
|||||||||||||||||||||||
|
|
Variances
|
|
|||||||||||||||||||||
In millions
|
2009
|
Price
|
Volume/Mix
|
Inflation
|
Exchange
|
Other(a)
|
Total
|
2010
|
||||||||||||||||
Paperboard Packaging
|
$
|
288.3
|
|
$
|
(7.6
|
)
|
$
|
(4.1
|
)
|
$
|
(80.8
|
)
|
$
|
(1.8
|
)
|
$
|
109.7
|
|
$
|
15.4
|
|
$
|
303.7
|
|
Flexible Packaging
|
2.5
|
|
11.3
|
|
0.9
|
|
(26.5
|
)
|
(0.4
|
)
|
30.2
|
|
15.5
|
|
18.0
|
|
||||||||
Corporate
|
(8.1
|
)
|
—
|
|
—
|
|
—
|
|
(2.1
|
)
|
(92.0
|
)
|
(94.1
|
)
|
(102.2
|
)
|
||||||||
Total
|
$
|
282.7
|
|
$
|
3.7
|
|
$
|
(3.2
|
)
|
$
|
(107.3
|
)
|
$
|
(4.3
|
)
|
$
|
47.9
|
|
$
|
(63.2
|
)
|
$
|
219.5
|
|
(a)
|
Includes the Company’s cost reduction initiatives, the alternative fuel tax credit and merger-related expenses.
|
|
Years Ended December 31,
|
|||||
In millions
|
2011
|
2010
|
||||
Net Cash Provided by Operating Activities
|
$
|
387.8
|
|
$
|
338.1
|
|
Net Cash Used in Investing Activities
|
(211.8
|
)
|
(122.7
|
)
|
||
Net Cash Used in Financing Activities
|
(42.2
|
)
|
(227.4
|
)
|
|
Maximum Consolidated
Secured Leverage Ratio(1)
|
October 1, 2009 and thereafter
|
4.75 to 1.00
|
(1)
|
Credit Agreement EBITDA is defined in the Credit Agreement as consolidated net income before consolidated net interest expense, non-cash expenses and charges, total income tax expense, depreciation expense, expense associated with amortization of intangibles and other assets, non-cash provisions for reserves for discontinued operations, extraordinary, unusual or non-recurring gains or losses or charges or credits, gain or loss associated with sale or write-down of assets not in the ordinary course of business, any income or loss accounted for by the equity method of accounting, and projected run rate cost savings, prior to or within a twelve month period.
|
In millions
|
Twelve Months Ended December 31, 2011
|
||
Net Income
|
$
|
275.2
|
|
Income Tax Benefit
|
(229.8
|
)
|
|
Interest Expense, Net
|
144.9
|
|
|
Depreciation and Amortization
|
278.4
|
|
|
Equity Income of Unconsolidated Entities, Net of Dividends
|
(0.7
|
)
|
|
Other Non-Cash Charges
|
39.5
|
|
|
Losses Associated with Sale/Write-Down of Assets
|
7.0
|
|
|
Other Non-Recurring/Extraordinary/Unusual Items
|
102.6
|
|
|
Projected Run Rate Cost Savings(a)
|
61.7
|
|
|
Credit Agreement EBITDA
|
$
|
678.8
|
|
In millions
|
As of December 31, 2011
|
||
Short-Term Debt
|
$
|
30.1
|
|
Long-Term Debt
|
2,335.7
|
|
|
Total Debt
|
$
|
2,365.8
|
|
Less: Adjustments(b)
|
688.1
|
|
|
Consolidated Secured Indebtedness
|
$
|
1,677.7
|
|
(a)
|
As defined by the Credit Agreement, this represents projected cost savings expected by the Company to be realized as a result of specific actions taken or expected to be taken prior to or within twelve months of the period in which Credit Agreement EBITDA is to be calculated, net of the amount of actual benefits realized or expected to be realized from such actions.
|
(b)
|
Represents consolidated indebtedness/securitization that is either (i) unsecured, or (ii) all subordinated indebtedness permitted to be incurred under the Credit Agreement, or secured indebtedness permitted to be incurred by the Company’s foreign subsidiaries per the Credit Agreement.
|
|
Payments Due by Period
|
||||||||||||||
In millions
|
Total
|
Less than 1 Year
|
1-3 Years
|
3-5 Years
|
More than 5 Years
|
||||||||||
Long-Term Debt
|
$
|
2,349.7
|
|
$
|
19.6
|
|
$
|
1,660.4
|
|
$
|
—
|
|
$
|
669.7
|
|
Operating Leases
|
161.7
|
|
34.3
|
|
54.2
|
|
32.8
|
|
40.4
|
|
|||||
Capital Leases
|
7.3
|
|
1.7
|
|
3.2
|
|
1.9
|
|
0.5
|
|
|||||
Interest Payable
|
499.6
|
|
121.9
|
|
180.1
|
|
130.3
|
|
67.3
|
|
|||||
Purchase Obligations (a)
|
573.0
|
|
172.7
|
|
183.5
|
|
118.7
|
|
98.1
|
|
|||||
Pension Funding (b)
|
55.0
|
|
55.0
|
|
—
|
|
—
|
|
—
|
|
|||||
Total Contractual Obligations (b)
|
$
|
3,646.3
|
|
$
|
405.2
|
|
$
|
2,081.4
|
|
$
|
283.7
|
|
$
|
876.0
|
|
(b)
|
Some of the figures included in this table are based on management’s estimates and assumptions about these obligations. Because these estimates and assumptions are necessarily subjective, the obligations the Company will actually pay in the future periods may vary from those reflected in the table.
|
•
|
Depreciation and amortization between $250 million and $280 million.
|
•
|
Interest expense of $130 million to $145 million, including approximately $5 million to $10 million of non-cash interest expense associated with amortization of debt issuance costs.
|
•
|
Debt reduction of approximately $200 million.
|
•
|
Pension plan contributions of $40 million to $70 million.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
|
Expected Maturity Date
|
|||||||||||||||||||||||
In millions
|
2012
|
2013
|
2014
|
2015
|
2016
|
Thereafter
|
Total
|
Fair Value
|
||||||||||||||||
Total Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed Rate
|
$
|
1.8
|
|
$
|
0.2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$ 669.7(a)
|
|
$
|
671.7
|
|
$
|
726.3
|
|
|
Average Interest Rate
|
6.67
|
%
|
4.18
|
%
|
—
|
%
|
—
|
%
|
—
|
%
|
8.90
|
%
|
|
|
|
|
||||||||
Variable Rate
|
$
|
17.8
|
|
$
|
17.6
|
|
$
|
1,642.6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,678.0
|
|
$
|
1,676.0
|
|
Average Interest Rate, spread range is 2.00% — 2.75%
|
LIBOR+ spread
|
|
LIBOR+ spread
|
|
LIBOR+ spread
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
Expected Maturity Date
|
||||||||||||||||||||
In millions
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
Total
|
Fair Value
|
||||||||||||||
Interest Rate Swaps (Pay Fixed/Receive Variable)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Notional
|
$
|
920.0
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
920.0
|
|
$
|
(8.3
|
)
|
Average Pay Rate
|
2.62
|
%
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|||||||
Average Receive Rate
|
3-Month LIBOR
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
(a)
|
Includes face amounts of $425.0 million and $250.0 million.
|
|
December 31, 2011
|
|||||
In millions
|
Contract Amount
|
Fair Value
|
||||
FORWARD EXCHANGE AGREEMENTS:
|
|
|
||||
Receive $US/Pay Yen
|
$
|
32.2
|
|
$
|
(0.3
|
)
|
Weighted average contractual exchange rate
|
77.44
|
|
|
|
||
Receive $US/Pay Euro
|
$
|
31.2
|
|
$
|
1.2
|
|
Weighted average contractual exchange rate
|
1.35
|
|
|
|
||
Receive $US/Pay GBP
|
$
|
16.4
|
|
$
|
0.1
|
|
Weighted average contractual exchange rate
|
1.56
|
|
|
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
GRAPHIC PACKAGING HOLDING COMPANY
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2011
|
|
|
Year Ended December 31,
|
||||||||
In millions, except per share amounts
|
2011
|
2010
|
2009
|
||||||
Net Sales
|
$
|
4,206.3
|
|
$
|
4,095.0
|
|
$
|
4,095.8
|
|
Cost of Sales
|
3,568.8
|
|
3,501.8
|
|
3,567.2
|
|
|||
Selling, General and Administrative
|
342.4
|
|
320.4
|
|
314.6
|
|
|||
Other Income, Net
|
(2.7
|
)
|
(1.8
|
)
|
(15.6
|
)
|
|||
Goodwill Impairment, Restructuring and Other Special Charges (Credits)
|
107.5
|
|
55.1
|
|
(53.1
|
)
|
|||
Income from Operations
|
190.3
|
|
219.5
|
|
282.7
|
|
|||
Interest Expense, Net
|
(144.9
|
)
|
(174.5
|
)
|
(196.4
|
)
|
|||
Loss on Modification or Extinguishment of Debt
|
(2.1
|
)
|
(8.4
|
)
|
(7.1
|
)
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entities
|
43.3
|
|
36.6
|
|
79.2
|
|
|||
Income Tax Benefit (Expense)
|
229.8
|
|
(27.5
|
)
|
(24.1
|
)
|
|||
Income before Equity Income of Unconsolidated Entities
|
273.1
|
|
9.1
|
|
55.1
|
|
|||
Equity Income of Unconsolidated Entities
|
2.1
|
|
1.6
|
|
1.3
|
|
|||
Net Income
|
$
|
275.2
|
|
$
|
10.7
|
|
$
|
56.4
|
|
Net Loss Attributable to Noncontrolling Interests
|
1.7
|
|
—
|
|
—
|
|
|||
Net Income Attributable to Graphic Packaging Holding Company
|
$
|
276.9
|
|
$
|
10.7
|
|
$
|
56.4
|
|
|
|
|
|
||||||
Net Income Per Share Attributable to Graphic Packaging Holding Company — Basic
|
$
|
0.74
|
|
$
|
0.03
|
|
$
|
0.16
|
|
Net Income Per Share Attributable to Graphic Packaging Holding Company — Diluted
|
$
|
0.73
|
|
$
|
0.03
|
|
$
|
0.16
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2011
|
|
2010
|
|
2009
|
||||||
Net Income
|
$
|
275.2
|
|
|
$
|
10.7
|
|
|
$
|
56.4
|
|
Other Comprehensive (Loss) Income, Net of Tax:
|
|
|
|
|
|
||||||
Derivative Instruments
|
14.0
|
|
|
7.7
|
|
|
33.4
|
|
|||
Currency Translation Adjustment
|
(3.7
|
)
|
|
5.5
|
|
|
7.8
|
|
|||
Pension Benefit Plans
|
(80.4
|
)
|
|
(6.2
|
)
|
|
91.7
|
|
|||
Postretirement Benefit Plans
|
1.2
|
|
|
(6.5
|
)
|
|
7.6
|
|
|||
Postemployment Benefit Plans
|
—
|
|
|
—
|
|
|
3.9
|
|
|||
Total Other Comprehensive (Loss) Income, Net of Tax
|
(68.9
|
)
|
|
0.5
|
|
|
144.4
|
|
|||
Total Comprehensive Income
|
206.3
|
|
|
11.2
|
|
|
200.8
|
|
|||
Comprehensive Loss Attributable to Noncontrolling Interests
|
(1.8
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive Income Attributable to Graphic Packaging Holding Company
|
$
|
208.1
|
|
|
$
|
11.2
|
|
|
$
|
200.8
|
|
|
December 31,
|
|||||
In millions, except share amounts
|
2011
|
2010
|
||||
|
|
|
||||
ASSETS
|
|
|
||||
Current Assets:
|
|
|
||||
Cash and Cash Equivalents
|
$
|
271.8
|
|
$
|
138.7
|
|
Receivables, Net
|
401.9
|
|
382.2
|
|
||
Inventories, Net
|
479.1
|
|
417.3
|
|
||
Deferred Income Tax Assets
|
125.0
|
|
28.0
|
|
||
Other Current Assets
|
36.3
|
|
47.4
|
|
||
Total Current Assets
|
1,314.1
|
|
1,013.6
|
|
||
Property, Plant and Equipment, Net
|
1,622.1
|
|
1,641.5
|
|
||
Goodwill
|
1,135.7
|
|
1,205.2
|
|
||
Intangible Assets, Net
|
535.9
|
|
576.6
|
|
||
Other Assets
|
41.9
|
|
47.7
|
|
||
Total Assets
|
$
|
4,649.7
|
|
$
|
4,484.6
|
|
|
|
|
||||
LIABILITIES
|
|
|
||||
Current Liabilities:
|
|
|
||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
30.1
|
|
$
|
26.0
|
|
Accounts Payable
|
411.4
|
|
361.5
|
|
||
Compensation and Employee Benefits
|
103.1
|
|
93.5
|
|
||
Interest Payable
|
23.0
|
|
28.4
|
|
||
Other Accrued Liabilities
|
77.9
|
|
86.3
|
|
||
Total Current Liabilities
|
645.5
|
|
595.7
|
|
||
Long-Term Debt
|
2,335.7
|
|
2,553.1
|
|
||
Deferred Income Tax Liabilities
|
63.0
|
|
241.1
|
|
||
Accrued Pension and Postretirement Benefits
|
364.8
|
|
275.0
|
|
||
Other Noncurrent Liabilities
|
59.2
|
|
72.7
|
|
||
|
|
|
||||
Commitments and Contingencies (Note 14)
|
|
|
|
|
||
Contingently Redeemable Noncontrolling Interests
|
14.8
|
|
—
|
|
||
|
|
|
||||
SHAREHOLDERS' EQUITY
|
|
|
||||
Preferred Stock, par value $.01 per share; 100,000,000 shares authorized at December 31, 2011 and December 31, 2010; no shares issued or outstanding
|
—
|
|
—
|
|
||
Common Stock, par value $.01 per share; 1,000,000,000 shares authorized at December 31, 2011 and 2010, 389,474,786 and 343,698,778 shares issued and outstanding at December 31, 2011 and 2010, respectively
|
3.9
|
|
3.4
|
|
||
Capital in Excess of Par Value
|
2,177.5
|
|
1,965.2
|
|
||
Accumulated Deficit
|
(731.4
|
)
|
(1,008.3
|
)
|
||
Accumulated Other Comprehensive Loss
|
(282.1
|
)
|
(213.3
|
)
|
||
Total Graphic Packaging Holding Company Shareholders’ Equity
|
1,167.9
|
|
747.0
|
|
||
Noncontrolling Interests
|
(1.2
|
)
|
—
|
|
||
Total Equity
|
1,166.7
|
|
747.0
|
|
||
Total Liabilities and Equity
|
$
|
4,649.7
|
|
$
|
4,484.6
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||||
|
Common Stock
|
Capital in Excess of Par Value
|
|
Other
|
|
|
||||||||||||||
In millions, except share amounts
|
Shares
|
Amount
|
Accumulated Deficit
|
Comprehensive Income (Loss)
|
Noncontrolling Interests
|
Total Equity
|
||||||||||||||
Balances at December 31, 2008
|
342,522,470
|
|
$
|
3.4
|
|
$
|
1,955.4
|
|
$
|
(1,075.4
|
)
|
$
|
(358.2
|
)
|
—
|
|
$
|
525.2
|
|
|
Net Income
|
—
|
|
—
|
|
—
|
|
56.4
|
|
—
|
|
—
|
|
56.4
|
|
||||||
Other Comprehensive Income, Net of Tax:
|
|
|
|
|
|
|
|
|||||||||||||
Derivative Instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
33.4
|
|
—
|
|
33.4
|
|
||||||
Pension Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
91.7
|
|
—
|
|
91.7
|
|
||||||
Postretirement Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
7.6
|
|
—
|
|
7.6
|
|
||||||
Postemployment Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
3.9
|
|
—
|
|
3.9
|
|
||||||
Currency Translation Adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
7.8
|
|
—
|
|
7.8
|
|
||||||
Issuance of Shares for Stock-Based Awards
|
722,780
|
|
—
|
|
2.8
|
|
—
|
|
—
|
|
—
|
|
2.8
|
|
||||||
Balances at December 31, 2009
|
343,245,250
|
|
$
|
3.4
|
|
$
|
1,958.2
|
|
$
|
(1,019.0
|
)
|
$
|
(213.8
|
)
|
—
|
|
$
|
728.8
|
|
|
Net Income
|
—
|
|
—
|
|
—
|
|
10.7
|
|
—
|
|
—
|
|
10.7
|
|
||||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|||||||||||||
Derivative Instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
7.7
|
|
—
|
|
7.7
|
|
||||||
Pension Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
(6.2
|
)
|
—
|
|
(6.2
|
)
|
||||||
Postretirement Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
(6.5
|
)
|
—
|
|
(6.5
|
)
|
||||||
Currency Translation Adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
5.5
|
|
—
|
|
5.5
|
|
||||||
Issuance of Shares for Stock-Based Awards
|
453,528
|
|
—
|
|
7.0
|
|
—
|
|
—
|
|
—
|
|
7.0
|
|
||||||
Balances at December 31, 2010
|
343,698,778
|
|
$
|
3.4
|
|
$
|
1,965.2
|
|
$
|
(1,008.3
|
)
|
$
|
(213.3
|
)
|
—
|
|
$
|
747.0
|
|
|
Net Income (Loss)
|
—
|
|
—
|
|
—
|
|
276.9
|
|
—
|
|
(1.6
|
)
|
275.3
|
|
||||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|||||||||||||
Derivative Instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
14.0
|
|
—
|
|
14.0
|
|
||||||
Pension Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
(80.3
|
)
|
—
|
|
(80.3
|
)
|
||||||
Postretirement Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
1.2
|
|
—
|
|
1.2
|
|
||||||
Currency Translation Adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
(3.7
|
)
|
—
|
|
(3.7
|
)
|
||||||
Issuance of Common Stock, Net
|
52,530,975
|
|
0.5
|
|
237.0
|
|
—
|
|
—
|
|
—
|
|
237.5
|
|
||||||
Repurchase of Common Stock
|
(7,264,922
|
)
|
—
|
|
(32.9
|
)
|
—
|
|
—
|
|
—
|
|
(32.9
|
)
|
||||||
Investment in Subsidiaries
|
—
|
|
—
|
|
(3.1
|
)
|
—
|
|
|
0.4
|
|
(3.4
|
)
|
|||||||
Issuance of Shares for Stock-Based Awards
|
509,955
|
|
—
|
|
11.3
|
|
—
|
|
—
|
|
—
|
|
11.3
|
|
||||||
Balances at December 31, 2011
|
389,474,786
|
|
$
|
3.9
|
|
$
|
2,177.5
|
|
$
|
(731.4
|
)
|
$
|
(282.1
|
)
|
$
|
(1.2
|
)
|
$
|
1,166.7
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2011
|
2010
|
2009
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||||
Net Income
|
$
|
275.2
|
|
$
|
10.7
|
|
$
|
56.4
|
|
|
|
|
|
||||||
Non-cash Items Included in Net Income:
|
|
|
|
||||||
Depreciation and Amortization
|
278.4
|
|
288.7
|
|
305.4
|
|
|||
Goodwill Impairment Charge
|
96.3
|
|
—
|
|
—
|
|
|||
Write-off of Deferred Debt Issuance Costs on Early Extinguishment of Debt
|
2.1
|
|
1.4
|
|
2.3
|
|
|||
Amortization of Deferred Debt Issuance Costs
|
7.0
|
|
8.3
|
|
8.5
|
|
|||
Deferred Income Taxes
|
(238.4
|
)
|
21.6
|
|
19.6
|
|
|||
Amount of Postretirement Expense (Less) Greater Than Funding
|
(38.8
|
)
|
(18.2
|
)
|
4.7
|
|
|||
Impairment Charges/Asset Write-offs
|
7.0
|
|
14.6
|
|
15.3
|
|
|||
Other, Net
|
19.8
|
|
7.7
|
|
(6.8
|
)
|
|||
Changes in Operating Assets and Liabilities (See Note 3)
|
(20.8
|
)
|
3.3
|
|
98.1
|
|
|||
Net Cash Provided by Operating Activities
|
387.8
|
|
338.1
|
|
503.5
|
|
|||
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||||
Capital Spending
|
(160.1
|
)
|
(122.8
|
)
|
(129.9
|
)
|
|||
Acquisition of Business
|
(51.9
|
)
|
—
|
|
—
|
|
|||
Proceeds from Sales of Assets, Net of Selling Costs
|
2.3
|
|
—
|
|
9.8
|
|
|||
Other, Net
|
(2.1
|
)
|
0.1
|
|
(4.6
|
)
|
|||
Net Cash Used in Investing Activities
|
(211.8
|
)
|
(122.7
|
)
|
(124.7
|
)
|
|||
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||||
Net Proceeds from Issuance of Common Stock
|
237.7
|
|
—
|
|
—
|
|
|||
Repurchase of Common Stock
|
(32.9
|
)
|
—
|
|
—
|
|
|||
Proceeds from Issuance or Modification of Debt
|
—
|
|
30.6
|
|
423.8
|
|
|||
Payments on Debt
|
(249.2
|
)
|
(246.4
|
)
|
(664.5
|
)
|
|||
Borrowings under Revolving Credit Facilities
|
92.1
|
|
138.8
|
|
166.2
|
|
|||
Payments on Revolving Credit Facilities
|
(89.6
|
)
|
(139.7
|
)
|
(308.6
|
)
|
|||
Redemption and Early Tender Premiums and Debt Issuance Costs
|
—
|
|
(10.9
|
)
|
(16.1
|
)
|
|||
Other, Net
|
(0.3
|
)
|
0.2
|
|
—
|
|
|||
Net Cash Used in Financing Activities
|
(42.2
|
)
|
(227.4
|
)
|
(399.2
|
)
|
|||
|
|
|
|
||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(0.7
|
)
|
0.9
|
|
0.1
|
|
|||
|
|
|
|
||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
133.1
|
|
(11.1
|
)
|
(20.3
|
)
|
|||
Cash and Cash Equivalents at Beginning of Period
|
138.7
|
|
149.8
|
|
170.1
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
271.8
|
|
$
|
138.7
|
|
$
|
149.8
|
|
NOTE 1.
|
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Buildings
|
40 years
|
Land improvements
|
15 years
|
Machinery and equipment
|
3 to 40 years
|
Furniture and fixtures
|
10 years
|
Automobiles, trucks and tractors
|
3 to 5 years
|
|
December 31, 2011
|
December 31, 2010
|
||||||||||||||||
In millions
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
||||||||||||
Amortizable Intangible Assets (Liabilities):
|
|
|
|
|
|
|
||||||||||||
Customer Relationships
|
$
|
659.7
|
|
$
|
167.0
|
|
$
|
492.7
|
|
$
|
657.2
|
|
$
|
129.0
|
|
$
|
528.2
|
|
Non-Compete Agreements
|
—
|
|
—
|
|
—
|
|
7.3
|
|
6.2
|
|
1.1
|
|
||||||
Patents, Trademarks and Licenses
|
132.2
|
|
88.6
|
|
43.6
|
|
129.0
|
|
81.0
|
|
48.0
|
|
||||||
Supply Contracts and Leases, Net
|
(1.4
|
)
|
(1.0
|
)
|
(0.4
|
)
|
(2.1
|
)
|
(1.4
|
)
|
(0.7
|
)
|
||||||
Total
|
$
|
790.5
|
|
$
|
254.6
|
|
$
|
535.9
|
|
$
|
791.4
|
|
$
|
214.8
|
|
$
|
576.6
|
|
In millions
|
Paperboard Packaging
|
Flexible Packaging
|
Total
|
||||||
Balance at December 31, 2009
|
$
|
1,045.9
|
|
$
|
158.7
|
|
$
|
1,204.6
|
|
Altivity Purchase Accounting
|
(1.1
|
)
|
—
|
|
(1.1
|
)
|
|||
Foreign Currency Effects
|
0.6
|
|
1.1
|
|
1.7
|
|
|||
Balance at December 31, 2010
|
$
|
1,045.4
|
|
$
|
159.8
|
|
$
|
1,205.2
|
|
Acquisition of Businesses
|
14.2
|
|
13.9
|
|
28.1
|
|
|||
Goodwill Impairment (a)
|
—
|
|
(96.3
|
)
|
(96.3
|
)
|
|||
Foreign Currency Effects
|
(1.3
|
)
|
—
|
|
(1.3
|
)
|
|||
Balance at December 31, 2011
|
$
|
1,058.3
|
|
$
|
77.4
|
|
$
|
1,135.7
|
|
In millions
|
2011
|
2010
|
2009
|
||||||
Goodwill Impairment
|
$
|
96.3
|
|
$
|
—
|
|
$
|
—
|
|
Alternative Fuel Tax Credit
|
—
|
|
—
|
|
(137.8
|
)
|
|||
Altivity Merger Related Charges
|
—
|
|
55.1
|
|
71.7
|
|
|||
Asset Impairment and Shutdown Charges
|
10.0
|
|
—
|
|
13.0
|
|
|||
Charges Associated with Business Combinations
|
1.2
|
|
—
|
|
—
|
|
|||
Total
|
$
|
107.5
|
|
$
|
55.1
|
|
$
|
(53.1
|
)
|
NOTE 2.
|
SUPPLEMENTAL BALANCE SHEET DATA
|
In millions
|
2011
|
2010
|
||||
Trade
|
$
|
384.0
|
|
$
|
366.5
|
|
Less: Allowance
|
(3.5
|
)
|
(3.2
|
)
|
||
|
380.5
|
|
363.3
|
|
||
Other
|
21.4
|
|
18.9
|
|
||
Total
|
$
|
401.9
|
|
$
|
382.2
|
|
In millions
|
2011
|
2010
|
||||
Finished Goods
|
$
|
243.5
|
|
$
|
229.3
|
|
Work in Progress
|
41.1
|
|
36.5
|
|
||
Raw Materials
|
140.7
|
|
100.9
|
|
||
Supplies
|
53.8
|
|
50.6
|
|
||
Total
|
$
|
479.1
|
|
$
|
417.3
|
|
In millions
|
2011
|
2010
|
||||
Assets Held for Sale
|
$
|
18.5
|
|
$
|
27.4
|
|
Prepaid Expenses
|
17.8
|
|
19.7
|
|
||
Other
|
—
|
|
0.3
|
|
||
Total
|
$
|
36.3
|
|
$
|
47.4
|
|
In millions
|
2011
|
2010
|
||||
Property, Plant and Equipment, at Cost:
|
|
|
||||
Land and Improvements
|
$
|
121.5
|
|
$
|
118.7
|
|
Buildings
|
344.4
|
|
329.7
|
|
||
Machinery and Equipment
(1)
|
3,329.9
|
|
3,169.2
|
|
||
Construction-in-Progress
|
77.8
|
|
63.6
|
|
||
|
3,873.6
|
|
3,681.2
|
|
||
Less: Accumulated Depreciation
(1)
|
(2,251.5
|
)
|
(2,039.7
|
)
|
||
Total
|
$
|
1,622.1
|
|
$
|
1,641.5
|
|
(1)
|
Includes gross assets under capital lease of $
10.8 million
and related accumulated depreciation of $
1.6 million
as of
December 31, 2011
.
|
In millions
|
2011
|
2010
|
||||
Deferred Debt Issuance Costs, Net of Amortization of $30.1 million and $26.2 million for 2011 and 2010, respectively
|
$
|
15.6
|
|
$
|
24.7
|
|
Deferred Income Tax Assets
|
6.1
|
|
6.3
|
|
||
Other
|
20.2
|
|
16.7
|
|
||
Total
|
$
|
41.9
|
|
$
|
47.7
|
|
In millions
|
2011
|
2010
|
||||
Fair Value of Derivatives, current portion
|
$
|
5.0
|
|
$
|
19.8
|
|
Restructuring Reserves
|
1.3
|
|
2.1
|
|
||
Deferred Revenue
|
16.2
|
|
14.9
|
|
||
Accrued Customer Rebates
|
15.7
|
|
18.2
|
|
||
Other
(2)
|
39.7
|
|
31.3
|
|
||
Total
|
$
|
77.9
|
|
$
|
86.3
|
|
In millions
|
2011
|
2010
|
||||
Fair Value of Derivatives, noncurrent portion
|
$
|
—
|
|
$
|
9.1
|
|
Deferred Revenue
|
6.0
|
|
6.4
|
|
||
Multi-employer Plans
|
24.3
|
|
23.7
|
|
||
Workers Compensation Reserve
|
14.1
|
|
14.0
|
|
||
Other
|
14.8
|
|
19.5
|
|
||
Total
|
$
|
59.2
|
|
$
|
72.7
|
|
NOTE 3.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
In millions
|
2011
|
2010
|
2009
|
||||||
Receivables, Net
|
$
|
0.7
|
|
$
|
5.0
|
|
$
|
(6.5
|
)
|
Inventories, Net
|
(43.0
|
)
|
13.3
|
|
91.0
|
|
|||
Prepaid Expenses
|
3.4
|
|
(7.3
|
)
|
8.8
|
|
|||
Other Assets
|
(5.8
|
)
|
—
|
|
—
|
|
|||
Accounts Payable
|
27.5
|
|
6.0
|
|
19.4
|
|
|||
Compensation and Employee Benefits
|
(3.3
|
)
|
(11.9
|
)
|
12.4
|
|
|||
Income Taxes
|
0.8
|
|
(2.4
|
)
|
0.1
|
|
|||
Interest Payable
|
(6.9
|
)
|
(15.3
|
)
|
(15.1
|
)
|
|||
Other Accrued Liabilities
|
(6.5
|
)
|
(12.1
|
)
|
(17.3
|
)
|
|||
Other Noncurrent Liabilities
|
12.3
|
|
28.0
|
|
5.3
|
|
|||
Total
|
$
|
(20.8
|
)
|
$
|
3.3
|
|
$
|
98.1
|
|
In millions
|
2011
|
2010
|
2009
|
||||||
Interest
|
$
|
143.7
|
|
$
|
180.9
|
|
$
|
219.5
|
|
Income Taxes
|
8.2
|
|
6.7
|
|
7.7
|
|
NOTE 4.
|
RESTRUCTURING RESERVES
|
In millions
|
Severance and Benefits
|
Facility Closure Costs
|
Equipment Removal
|
Total
|
||||||||
Establish Reserve
|
$
|
13.9
|
|
$
|
9.8
|
|
$
|
2.0
|
|
$
|
25.7
|
|
Additions to Reserves
|
6.4
|
|
0.9
|
|
0.3
|
|
7.6
|
|
||||
Cash Payments
|
(11.8
|
)
|
(2.2
|
)
|
(0.3
|
)
|
(14.3
|
)
|
||||
Other Adjustments
|
(5.0
|
)
|
(5.0
|
)
|
(1.4
|
)
|
(11.4
|
)
|
||||
Balance at December 31, 2009
|
$
|
3.5
|
|
$
|
3.5
|
|
$
|
0.6
|
|
$
|
7.6
|
|
Additions to Reserves
|
2.2
|
|
—
|
|
—
|
|
2.2
|
|
||||
Cash Payments
|
(2.9
|
)
|
(1.8
|
)
|
(0.3
|
)
|
(5.0
|
)
|
||||
Other Adjustments
|
(2.2
|
)
|
(0.5
|
)
|
—
|
|
(2.7
|
)
|
||||
Balance at December 31, 2010
|
$
|
0.6
|
|
$
|
1.2
|
|
$
|
0.3
|
|
$
|
2.1
|
|
Cash Payments
|
(0.5
|
)
|
(0.3
|
)
|
—
|
|
(0.8
|
)
|
||||
Balance at December 31, 2011
|
$
|
0.1
|
|
$
|
0.9
|
|
$
|
0.3
|
|
$
|
1.3
|
|
NOTE 5.
|
DEBT
|
In millions
|
2011
|
2010
|
||||
Short-Term Borrowings
|
$
|
8.8
|
|
$
|
6.7
|
|
Current Portion of Capital Lease Obligations
|
1.7
|
|
—
|
|
||
Current Portion of Long-Term Debt
|
19.6
|
|
19.3
|
|
||
Total
|
$
|
30.1
|
|
$
|
26.0
|
|
In millions
|
2011
|
2010
|
||||
Senior Notes with interest payable semi-annually at 7.875%, payable in 2018 ($250.0 million face amount)
|
$
|
246.4
|
|
$
|
246.0
|
|
Senior Notes with interest payable semi-annually at 9.5%, payable in 2017 ($425.0 million face amount)
|
423.2
|
|
423.5
|
|
||
Senior Subordinated Notes with interest payable semi-annually at 9.5%, payable in 2013
|
—
|
|
73.3
|
|
||
Senior Secured Term Loan Facility with interest payable at various dates at floating rates (2.39% at December 31, 2011) payable through 2014
|
769.0
|
|
837.7
|
|
||
Senior Secured Term Loan Facility with interest payable at various dates at floating rates (3.14% at December 31, 2011) payable through 2014
|
908.7
|
|
989.9
|
|
||
Senior Secured Revolving Facility with interest payable at floating rates payable in 2013
|
—
|
|
—
|
|
||
Capital Lease Obligations
|
7.3
|
|
—
|
|
||
Other
|
2.4
|
|
2.0
|
|
||
|
2,357.0
|
|
2,572.4
|
|
||
Less: current portion
|
21.3
|
|
19.3
|
|
||
Total
|
$
|
2,335.7
|
|
$
|
2,553.1
|
|
In millions
|
|
||
2012
|
$
|
19.6
|
|
2013
|
17.8
|
|
|
2014
|
1,642.6
|
|
|
2015
|
—
|
|
|
2016
|
—
|
|
|
After 2016
|
669.7
|
|
|
Total
|
$
|
2,349.7
|
|
In millions
|
Total Commitments
|
Total Outstanding
|
Total Available(a)
|
||||||
Revolving Credit Facility
|
$
|
400.0
|
|
$
|
—
|
|
$
|
368.1
|
|
International Facilities
|
13.3
|
|
8.8
|
|
4.5
|
|
|||
Total
|
$
|
413.3
|
|
$
|
8.8
|
|
$
|
372.6
|
|
(a)
|
In accordance with its debt agreements, the Company's availability under its Revolving Credit Facility has been reduced by the amount of standby letters of credit issued of $
31.9 million
as of
December 31, 2011
. These letters of credit are
|
NOTE 6.
|
STOCK INCENTIVE PLANS
|
Plan
|
Shares Subject to Options
|
Weighted Average Exercise Price
|
Shares Subject to Exercisable Options
|
Weighted Average Exercise Price
|
Exercise Price Range
|
Weighted Average Remaining Contractual Life in Years
|
||||||||
2003 LTIP
|
684,070
|
|
$
|
5.96
|
|
684,070
|
|
$
|
5.96
|
|
$4.70 to $6.57
|
|
1.72
|
|
2002 SIP
|
2,130,754
|
|
7.88
|
|
2,130,754
|
|
7.88
|
|
7.88
|
0.01
|
|
|||
EIP
|
2,367,093
|
|
7.79
|
|
2,367,093
|
|
7.79
|
|
$1.56 to $13.74
|
|
1.60
|
|
||
Total
|
5,181,917
|
|
$
|
7.58
|
|
5,181,917
|
|
$
|
7.58
|
|
—
|
|
0.96
|
|
|
Options
|
Weighted Average Exercise Price
|
|||
Outstanding — December 31, 2008
|
7,115,887
|
|
$
|
7.21
|
|
Exercised
|
—
|
|
—
|
|
|
Canceled
|
(673,795
|
)
|
6.54
|
|
|
Outstanding — December 31, 2009
|
6,442,092
|
|
$
|
7.28
|
|
Exercised
|
(80,150
|
)
|
2.30
|
|
|
Canceled
|
(1,081,675
|
)
|
6.57
|
|
|
Outstanding — December 31, 2010
|
5,280,267
|
|
$
|
7.50
|
|
Exercised
|
(71,350
|
)
|
2.12
|
|
|
Canceled
|
(27,000
|
)
|
5.69
|
|
|
Outstanding — December 31, 2011
|
5,181,917
|
|
$
|
7.58
|
|
|
2011
|
2010
|
2009
|
||||||
RSUs — Employees
|
3,979,591
|
|
5,503,250
|
|
8,390,054
|
|
|||
Weighted-average price per share
|
$
|
5.16
|
|
$
|
3.60
|
|
$
|
0.89
|
|
Stock Awards — Board of Directors
|
198,888
|
|
339,612
|
|
651,310
|
|
|||
Weighted-average price per share
|
$
|
5.43
|
|
$
|
3.18
|
|
$
|
1.52
|
|
|
Shares
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding — December 31, 2008
|
1,087,510
|
|
$
|
2.72
|
|
Granted
|
8,390,054
|
|
0.89
|
|
|
Released
|
(207,037
|
)
|
2.72
|
|
|
Forfeited
|
(565,408
|
)
|
1.09
|
|
|
Outstanding — December 31, 2009
|
8,705,119
|
|
$
|
1.07
|
|
Granted
|
5,503,250
|
|
3.60
|
|
|
Released
|
(76,546
|
)
|
2.22
|
|
|
Forfeited
|
(288,339
|
)
|
2.26
|
|
|
Outstanding — December 31, 2010
|
13,843,484
|
|
$
|
2.05
|
|
Granted
|
3,979,591
|
|
5.16
|
|
|
Released
|
(276,700
|
)
|
1.75
|
|
|
Forfeited
|
(787,524
|
)
|
2.94
|
|
|
Outstanding — December 31, 2011
|
16,758,851
|
|
$
|
2.75
|
|
NOTE 7.
|
POSTRETIREMENT AND OTHER BENEFITS
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||||||||
|
Year Ended December 31,
|
|||||||||||||||||
In millions
|
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
||||||||||||
Components of Net Periodic Cost:
|
|
|
|
|
|
|
||||||||||||
Service Cost
|
$
|
19.3
|
|
$
|
19.0
|
|
$
|
20.5
|
|
$
|
1.1
|
|
$
|
1.1
|
|
$
|
1.4
|
|
Interest Cost
|
52.2
|
|
51.3
|
|
50.5
|
|
2.5
|
|
3.0
|
|
3.3
|
|
||||||
Expected Return on Plan Assets
|
(58.3
|
)
|
(50.8
|
)
|
(41.8
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization:
|
|
|
|
|
|
|
||||||||||||
Prior Service Cost (Credit)
|
0.5
|
|
0.5
|
|
1.2
|
|
(0.2
|
)
|
(0.2
|
)
|
(0.1
|
)
|
||||||
Actuarial Loss (Gain)
|
13.4
|
|
10.1
|
|
20.2
|
|
(1.7
|
)
|
(1.3
|
)
|
(1.2
|
)
|
||||||
Curtailment Gain
|
(0.6
|
)
|
(0.2
|
)
|
(3.2
|
)
|
—
|
|
(0.3
|
)
|
—
|
|
||||||
Other
|
0.1
|
|
0.1
|
|
0.5
|
|
—
|
|
—
|
|
—
|
|
||||||
Net Periodic Cost
|
$
|
26.6
|
|
$
|
30.0
|
|
$
|
47.9
|
|
$
|
1.7
|
|
$
|
2.3
|
|
$
|
3.4
|
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||
|
Year Ended December 31,
|
|||||||||||
|
2011
|
2010
|
2009
|
2011
|
2010
|
2009
|
||||||
Weighted Average Assumptions:
|
|
|
|
|
|
|
||||||
Discount Rate
|
5.74
|
%
|
6.10
|
%
|
6.28
|
%
|
5.48
|
%
|
5.93
|
%
|
6.27
|
%
|
Rate of Increase in Future Compensation Levels
|
2.16
|
%
|
2.19
|
%
|
2.52
|
%
|
—
|
|
—
|
|
—
|
|
Expected Long-Term Rate of Return on Plan Assets
|
7.96
|
%
|
7.95
|
%
|
7.91
|
%
|
—
|
|
—
|
|
—
|
|
Initial Health Care Cost Trend Rate
|
—
|
|
—
|
|
—
|
|
8.50
|
%
|
8.50
|
%
|
9.00
|
%
|
Ultimate Health Care Cost Trend Rate (a)
|
—
|
|
—
|
|
—
|
|
5.00
|
%
|
5.00
|
%
|
5.00
|
%
|
Ultimate Year (a)
|
—
|
|
—
|
|
—
|
|
2018
|
|
2017
|
|
2017
|
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||
In millions
|
2011
|
2010
|
2011
|
2010
|
||||||||
Change in Benefit Obligation:
|
|
|
|
|
||||||||
Benefit Obligation at Beginning of Year
|
$
|
929.7
|
|
$
|
858.9
|
|
$
|
55.6
|
|
$
|
49.6
|
|
Service Cost
|
19.3
|
|
19.0
|
|
1.1
|
|
1.1
|
|
||||
Interest Cost
|
52.2
|
|
51.3
|
|
2.5
|
|
3.0
|
|
||||
Actuarial Loss (Gain)
|
118.7
|
|
43.8
|
|
(3.8
|
)
|
4.9
|
|
||||
Foreign Currency Exchange
|
(1.5
|
)
|
(3.4
|
)
|
—
|
|
—
|
|
||||
Curtailment Gain
|
(13.5
|
)
|
—
|
|
—
|
|
(0.3
|
)
|
||||
Acquisition
|
6.3
|
|
—
|
|
—
|
|
—
|
|
||||
Benefits Paid
|
(41.3
|
)
|
(39.4
|
)
|
(2.6
|
)
|
(3.2
|
)
|
||||
Other
|
(0.1
|
)
|
(0.5
|
)
|
0.2
|
|
0.5
|
|
||||
Benefit Obligation at End of Year
|
$
|
1,069.8
|
|
$
|
929.7
|
|
$
|
53.0
|
|
$
|
55.6
|
|
|
|
|
|
|
||||||||
Change in Plan Assets:
|
|
|
|
|
||||||||
Fair Value of Plan Assets at Beginning of Year
|
$
|
706.0
|
|
$
|
622.2
|
|
$
|
—
|
|
$
|
—
|
|
Actual Return on Plan Assets
|
24.4
|
|
79.3
|
|
—
|
|
—
|
|
||||
Employer Contributions
|
64.5
|
|
47.3
|
|
2.6
|
|
3.2
|
|
||||
Foreign Currency Exchange
|
(1.3
|
)
|
(2.8
|
)
|
—
|
|
—
|
|
||||
Benefits Paid
|
(41.3
|
)
|
(39.4
|
)
|
(2.6
|
)
|
(3.2
|
)
|
||||
Acquisition
|
2.8
|
|
—
|
|
—
|
|
—
|
|
||||
Other
|
(0.6
|
)
|
(0.6
|
)
|
—
|
|
—
|
|
||||
Fair Value of Plan Assets at End of Year
|
$
|
754.5
|
|
$
|
706.0
|
|
$
|
—
|
|
$
|
—
|
|
Plan Assets Less than Projected Benefit Obligation
|
$
|
(315.3
|
)
|
$
|
(223.7
|
)
|
$
|
(53.0
|
)
|
$
|
(55.6
|
)
|
|
|
|
|
|
||||||||
Amounts Recognized in the Consolidated Balance Sheets Consist of:
|
|
|
|
|
||||||||
Accrued Pension and Postretirement Benefits Liability — Current
|
$
|
(0.8
|
)
|
$
|
(0.7
|
)
|
$
|
(2.7
|
)
|
$
|
(3.6
|
)
|
Accrued Pension and Postretirement Benefits Liability — Noncurrent
|
(314.5
|
)
|
(223.0
|
)
|
(50.3
|
)
|
(52.0
|
)
|
||||
Accumulated Other Comprehensive Income:
|
|
|
|
|
||||||||
Net Actuarial Loss (Gain)
|
319.5
|
|
194.5
|
|
(9.1
|
)
|
(7.1
|
)
|
||||
Prior Service Cost (Income)
|
0.4
|
|
(0.2
|
)
|
(0.9
|
)
|
(1.1
|
)
|
||||
Weighted Average Calculations:
|
|
|
|
|
||||||||
Discount Rate
|
4.85
|
%
|
5.74
|
%
|
4.74
|
%
|
5.48
|
%
|
||||
Rates of Increase in Future Compensation Levels
|
2.16
|
%
|
2.16
|
%
|
—
|
|
—
|
|
||||
Initial Health Care Cost Trend Rate
|
—
|
|
—
|
|
8.00
|
%
|
8.50
|
%
|
||||
Ultimate Health Care Cost Trend Rate (a)
|
—
|
|
—
|
|
5.00
|
%
|
5.00
|
%
|
||||
Ultimate Year
|
—
|
|
—
|
|
2018
|
|
2018
|
|
|
Target
|
2011
|
2010
|
|||
Cash
|
—
|
%
|
2.0
|
%
|
0.3
|
%
|
Equity Securities
|
52.0
|
|
52.4
|
|
55.1
|
|
Fixed Income Securities
|
42.0
|
|
41.0
|
|
39.7
|
|
Other Investments
|
6.0
|
|
4.6
|
|
4.9
|
|
Total
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Fair Value Measurements at December 31, 2011
|
|||||||||||
In millions
|
Total
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Asset Category:
|
|
|
|
|
||||||||
Cash (a)
|
$
|
14.8
|
|
$
|
0.6
|
|
$
|
14.2
|
|
$
|
—
|
|
Equity Securities:
|
|
|
|
|
||||||||
Domestic (a)
|
301.7
|
|
58.2
|
|
243.5
|
|
—
|
|
||||
Foreign (a)
|
93.8
|
|
43.5
|
|
50.3
|
|
—
|
|
||||
Fixed Income Securities (a)
|
309.3
|
|
120.7
|
|
188.6
|
|
—
|
|
||||
Other Investments:
|
|
|
|
|
||||||||
Real estate (a)
|
12.0
|
|
—
|
|
12.0
|
|
—
|
|
||||
Diversified growth fund (b)
|
22.9
|
|
—
|
|
22.9
|
|
—
|
|
||||
Total
|
$
|
754.5
|
|
$
|
223.0
|
|
$
|
531.5
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2010
|
|||||||||||
In millions
|
Total
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
Significant Observable Inputs (Level 2)
|
Significant Unobservable Inputs (Level 3)
|
||||||||
Asset Category:
|
|
|
|
|
||||||||
Cash (a)
|
$
|
3.7
|
|
$
|
1.3
|
|
$
|
2.4
|
|
$
|
—
|
|
Equity Securities:
|
|
|
|
|
||||||||
Domestic (a)
|
264.4
|
|
52.1
|
|
212.3
|
|
—
|
|
||||
Foreign (a)
|
123.1
|
|
9.3
|
|
113.8
|
|
—
|
|
||||
Fixed Income Securities (a)
|
280.4
|
|
111.4
|
|
169.0
|
|
—
|
|
||||
Other Investments:
|
|
|
|
|
||||||||
Real estate (a)
|
11.6
|
|
—
|
|
11.6
|
|
—
|
|
||||
Diversified growth fund (b)
|
22.8
|
|
—
|
|
22.8
|
|
—
|
|
||||
Total
|
$
|
706.0
|
|
$
|
174.1
|
|
$
|
531.9
|
|
$
|
—
|
|
|
One Percentage Point
|
|||||
In millions
|
Increase
|
Decrease
|
||||
Health Care Trend Rate Sensitivity:
|
|
|
||||
Effect on Total Interest and Service Cost Components
|
$
|
0.3
|
|
$
|
(0.3
|
)
|
Effect on Year-End Postretirement Benefit Obligation
|
$
|
4.6
|
|
$
|
(3.9
|
)
|
In millions
|
Pension Plans
|
Postretirement Health Care Benefits
|
||||
2012
|
$
|
46.9
|
|
$
|
3.2
|
|
2013
|
48.8
|
|
3.3
|
|
||
2014
|
51.7
|
|
3.4
|
|
||
2015
|
54.3
|
|
3.7
|
|
||
2016
|
57.7
|
|
4.1
|
|
||
2017— 2021
|
333.1
|
|
21.9
|
|
In millions
|
Pension Benefits
|
Postretirement Health Care Benefits
|
Postemployment Benefits(a)
|
||||||
Recognition of Prior Service Cost (Benefit)
|
$
|
0.5
|
|
$
|
(0.2
|
)
|
$
|
—
|
|
Recognition of Actuarial Loss (Gain)
|
30.0
|
|
(1.2
|
)
|
(0.1
|
)
|
NOTE 8.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||
In millions
|
2011
|
2010
|
2009
|
||||||
U.S.
|
$
|
53.8
|
|
$
|
29.3
|
|
$
|
89.0
|
|
International
|
(10.5
|
)
|
7.3
|
|
(9.8
|
)
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entities
|
$
|
43.3
|
|
$
|
36.6
|
|
$
|
79.2
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2011
|
2010
|
2009
|
||||||
Current Benefit (Expense):
|
|
|
|
||||||
U.S.
|
$
|
(3.4
|
)
|
$
|
0.1
|
|
$
|
0.1
|
|
International
|
(5.2
|
)
|
(6.0
|
)
|
(4.6
|
)
|
|||
Total Current
|
$
|
(8.6
|
)
|
$
|
(5.9
|
)
|
$
|
(4.5
|
)
|
|
|
|
|
||||||
Deferred Benefit (Expense):
|
|
|
|
||||||
U.S.
|
238.9
|
|
(21.4
|
)
|
(31.4
|
)
|
|||
International
|
(0.5
|
)
|
(0.2
|
)
|
11.8
|
|
|||
Total Deferred
|
$
|
238.4
|
|
$
|
(21.6
|
)
|
$
|
(19.6
|
)
|
Income Tax Benefit (Expense)
|
$
|
229.8
|
|
$
|
(27.5
|
)
|
$
|
(24.1
|
)
|
|
Year Ended December 31,
|
||||||||||||||
In millions
|
2011
|
Percent
|
2010
|
Percent
|
2009
|
Percent
|
|||||||||
Income Tax (Expense) Benefit at U.S. Statutory Rate
|
$
|
(15.2
|
)
|
35.0
|
%
|
$
|
(12.8
|
)
|
35.0
|
%
|
$
|
(27.7
|
)
|
35.0
|
%
|
U.S. State and Local Tax (Expense) Benefit
|
(4.2
|
)
|
9.8
|
|
(0.8
|
)
|
2.2
|
|
(4.3
|
)
|
5.5
|
|
|||
Permanent Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Goodwill Impairment
|
(18.5
|
)
|
42.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||
Other
|
(3.5
|
)
|
8.1
|
|
(0.6
|
)
|
1.6
|
|
(6.6
|
)
|
8.3
|
|
|||
Change in Valuation Allowance
|
262.8
|
|
(606.8
|
)
|
(11.4
|
)
|
31.2
|
|
11.5
|
|
(14.5
|
)
|
|||
International Tax Rate Differences
|
(0.3
|
)
|
0.7
|
|
0.4
|
|
(1.2
|
)
|
0.4
|
|
(0.5
|
)
|
|||
Foreign Withholding Tax
|
(0.6
|
)
|
1.3
|
|
(0.9
|
)
|
2.5
|
|
(0.1
|
)
|
0.1
|
|
|||
Undistributed Foreign Earnings
|
8.6
|
|
(20.0
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||
Adjustment to Tax Contingencies
|
0.2
|
|
(0.5
|
)
|
0.6
|
|
(1.6
|
)
|
(0.1
|
)
|
0.1
|
|
|||
Other
|
0.5
|
|
(1.0
|
)
|
(2.0
|
)
|
5.5
|
|
2.8
|
|
(3.6
|
)
|
|||
Income Tax Benefit (Expense)
|
$
|
229.8
|
|
(530.7
|
)%
|
$
|
(27.5
|
)
|
75.2
|
%
|
$
|
(24.1
|
)
|
30.4
|
%
|
In millions
|
2011
|
2010
|
||||
Current Deferred Income Tax Assets:
|
|
|
||||
Compensation Based Accruals
|
$
|
28.6
|
|
$
|
25.8
|
|
Current Portion of Net Operating Loss Carryforward
|
79.6
|
|
—
|
|
||
Other
|
18.6
|
|
20.4
|
|
||
Valuation Allowance
|
(1.8
|
)
|
(18.2
|
)
|
||
Net Current Deferred Income Tax Assets
|
$
|
125.0
|
|
$
|
28.0
|
|
Noncurrent Deferred Income Tax Assets and Liabilities:
|
|
|
||||
Net Operating Loss Carryforwards
|
$
|
388.2
|
|
$
|
518.4
|
|
Postretirement Benefits
|
128.5
|
|
94.6
|
|
||
Tax Credits
|
13.3
|
|
12.8
|
|
||
Other
|
68.7
|
|
76.4
|
|
||
Valuation Allowance
|
(35.2
|
)
|
(290.1
|
)
|
||
Property, Plant and Equipment
|
(248.1
|
)
|
(264.8
|
)
|
||
Goodwill
|
(212.8
|
)
|
(210.2
|
)
|
||
Other Intangibles
|
(159.5
|
)
|
(171.9
|
)
|
||
Net Noncurrent Deferred Income Tax Assets and Liabilities
|
$
|
(56.9
|
)
|
$
|
(234.8
|
)
|
Net Deferred Income Tax Asset (Liability)
|
$
|
68.1
|
|
$
|
(206.8
|
)
|
|
December 31,
|
||||||||
In millions
|
2011
|
2010
|
2009
|
||||||
Balance Beginning of Period
|
$
|
308.3
|
|
$
|
255.5
|
|
$
|
304.3
|
|
(Credits) Charges to Costs and Expenses
|
(262.8
|
)
|
11.4
|
|
(11.5
|
)
|
|||
(Deduction) Additions
|
(8.5
|
)
|
41.4
|
|
(37.3
|
)
|
|||
Balance at End of Period
|
$
|
37.0
|
|
$
|
308.3
|
|
$
|
255.5
|
|
In millions
|
2011
|
2010
|
||||
Balance at January 1,
|
$
|
0.9
|
|
$
|
1.5
|
|
Additions for tax positions of prior years
|
0.5
|
|
0.1
|
|
||
Reductions for tax positions of prior years
|
(0.9
|
)
|
(0.7
|
)
|
||
Balance at December 31,
|
$
|
0.5
|
|
$
|
0.9
|
|
NOTE 9.
|
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES
|
NOTE 10.
|
FAIR VALUE MEASUREMENT
|
|
Derivative Assets
|
Derivative Liabilities
|
||||||||||||
|
Balance Sheet
|
December 31,
|
December 31,
|
Balance Sheet
|
December 31,
|
December 31,
|
||||||||
In millions
|
Location
|
2011
|
2010
|
Location
|
2011
|
2010
|
||||||||
Derivative Contracts Designated as Hedging Instruments
|
|
|
|
|
|
|
||||||||
Commodity Contracts
|
Other Current Assets
|
$
|
—
|
|
$
|
0.1
|
|
Other Accrued Liabilities
|
$
|
1.3
|
|
$
|
0.8
|
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Contracts
|
Other Current Assets
|
1.3
|
|
0.7
|
|
Other Accrued Liabilities
|
0.3
|
|
0.6
|
|
||||
Interest Rate Swap Agreements
|
Other Current Assets
|
—
|
|
—
|
|
Other Accrued Liabilities, Other Noncurrent Liabilities and Interest Payable
|
8.3
|
|
33.3
|
|
||||
|
|
|
|
|
|
|
||||||||
Derivative Contracts
Not Designated as Hedging Instruments
|
|
|
|
|
|
|
||||||||
Foreign Currency Contracts
|
Other Current Assets
|
0.5
|
|
—
|
|
Other Accrued Liabilities
|
—
|
|
0.3
|
|
||||
Total Derivative Contracts
|
|
$
|
1.8
|
|
$
|
0.8
|
|
|
$
|
9.9
|
|
$
|
35.0
|
|
|
Amount of Loss (Gain) Recognized in Accumulated Other Comprehensive Loss
|
|
Location in Statement of Operations (Effective Portion)
|
Amount of Loss (Gain) Recognized in Statement of Operations (Effective Portion)
|
|
Location in Statement of Operations (Ineffective Portion)
|
Location in Statement of Operations (Ineffective Portion)
|
|||||||||||||||
|
Twelve Months Ended December 31,
|
|
Twelve Months Ended December 31,
|
|
Twelve Months Ended December 31,
|
|||||||||||||||||
In millions
|
2011
|
2010
|
|
2011
|
2010
|
|
2011
|
2010
|
||||||||||||||
Commodity Contracts
|
$
|
5.5
|
|
$
|
9.7
|
|
|
Cost of Sales
|
$
|
4.9
|
|
$
|
7.8
|
|
|
Cost of Sales
|
$
|
0.1
|
|
$
|
(0.1
|
)
|
Foreign Currency Contracts
|
1.0
|
|
(0.2
|
)
|
|
Other Income, Net
|
1.8
|
|
(0.6
|
)
|
|
Other Income, Net
|
—
|
|
—
|
|
||||||
Interest Rate Swap Agreements
|
1.5
|
|
24.8
|
|
|
Interest Expense, Net
|
24.0
|
|
34.8
|
|
|
Interest Expense, Net
|
—
|
|
(0.2
|
)
|
||||||
Total
|
$
|
8.0
|
|
$
|
34.3
|
|
|
|
$
|
30.7
|
|
$
|
42.0
|
|
|
|
$
|
0.1
|
|
$
|
(0.3
|
)
|
In millions
|
|
2011
|
2010
|
||||
Foreign Currency Contracts
|
Other (Income) Expense, Net
|
$
|
—
|
|
$
|
1.9
|
|
In millions
|
2011
|
2010
|
2009
|
||||||
Balance at January 1
|
$
|
(27.4
|
)
|
$
|
(35.1
|
)
|
$
|
(68.5
|
)
|
Reclassification to earnings
|
30.7
|
|
42.0
|
|
75.8
|
|
|||
Current period change in fair value
|
(8.0
|
)
|
(34.3
|
)
|
(42.4
|
)
|
|||
Balance at December 31
|
$
|
(4.7
|
)
|
$
|
(27.4
|
)
|
$
|
(35.1
|
)
|
NOTE 11.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|
Years Ended December 31,
|
||||||||||||||||||||||||||||
|
2011
|
|
2010
|
|
2009
|
||||||||||||||||||||||||
In millions
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
||||||||||||||||||
Derivative Instruments Gain (Loss)
|
$
|
22.7
|
|
$
|
(8.7
|
)
|
$
|
14.0
|
|
|
$
|
7.7
|
|
$
|
—
|
|
$
|
7.7
|
|
|
$
|
33.4
|
|
$
|
—
|
|
$
|
33.4
|
|
Currency Translation Adjustment
|
(3.7
|
)
|
—
|
|
(3.7
|
)
|
|
5.5
|
|
—
|
|
5.5
|
|
|
7.8
|
|
—
|
|
7.8
|
|
|||||||||
Pension Benefit Plans
|
(125.7
|
)
|
45.4
|
|
(80.3
|
)
|
|
(4.4
|
)
|
(1.8
|
)
|
(6.2
|
)
|
|
90.0
|
|
1.7
|
|
91.7
|
|
|||||||||
Postretirement Benefit Plans
|
2.0
|
|
(0.8
|
)
|
1.2
|
|
|
(6.5
|
)
|
—
|
|
(6.5
|
)
|
|
7.9
|
|
(0.3
|
)
|
7.6
|
|
|||||||||
Postemployment Benefit Plans
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
3.9
|
|
—
|
|
3.9
|
|
|||||||||
Other Comprehensive Income (Loss)
|
$
|
(104.7
|
)
|
$
|
35.9
|
|
$
|
(68.8
|
)
|
|
$
|
2.3
|
|
$
|
(1.8
|
)
|
$
|
0.5
|
|
|
$
|
143.0
|
|
$
|
1.4
|
|
$
|
144.4
|
|
|
December 31,
|
|||||
In millions
|
2011
|
2010
|
||||
Accumulated Derivative Instruments Loss
|
$
|
(13.4
|
)
|
$
|
(27.4
|
)
|
Currency Translation Adjustment
|
(3.6
|
)
|
0.1
|
|
||
Pension Benefit Plans
|
(274.7
|
)
|
(194.4
|
)
|
||
Postretirement Benefit Plans
|
9.1
|
|
7.9
|
|
||
Postemployment Benefit Plans
|
0.5
|
|
0.5
|
|
||
Accumulated Other Comprehensive Loss
|
$
|
(282.1
|
)
|
$
|
(213.3
|
)
|
NOTE 12.
|
IMPAIRMENT
|
NOTE 13.
|
ENVIRONMENTAL AND LEGAL MATTERS
|
NOTE 14.
|
COMMITMENTS AND CONTINGENCIES
|
In millions
|
|
||||||||
|
Operating
|
|
Capital
|
|
Total
|
|
|||
2012
|
$
|
34.3
|
|
$
|
1.7
|
|
$
|
36.0
|
|
2013
|
30.4
|
|
1.7
|
|
32.1
|
|
|||
2014
|
23.8
|
|
1.5
|
|
25.3
|
|
|||
2015
|
18.4
|
|
1.3
|
|
19.7
|
|
|||
2016
|
14.4
|
|
0.6
|
|
15.0
|
|
|||
Thereafter
|
40.4
|
|
0.5
|
|
40.9
|
|
|||
Total
|
$
|
161.7
|
|
$
|
7.3
|
|
$
|
169.0
|
|
In millions
|
|
||
2012
|
$
|
172.7
|
|
2013
|
93.8
|
|
|
2014
|
89.7
|
|
|
2015
|
63.2
|
|
|
2016
|
55.5
|
|
|
Thereafter
|
98.1
|
|
|
Total
|
$
|
573.0
|
|
NOTE 15.
|
RELATED PARTY TRANSACTIONS
|
NOTE 16.
|
BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION
|
|
Year Ended December 31,
|
||||||||
In millions
|
2011
|
2010
|
2009
|
||||||
NET SALES:
|
|
|
|
||||||
Paperboard Packaging
|
$
|
3,503.9
|
|
$
|
3,419.4
|
|
$
|
3,423.5
|
|
Flexible Packaging
|
702.4
|
|
675.6
|
|
672.3
|
|
|||
Total
|
$
|
4,206.3
|
|
$
|
4,095.0
|
|
$
|
4,095.8
|
|
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||||
Paperboard Packaging
|
$
|
344.7
|
|
$
|
303.7
|
|
$
|
288.3
|
|
Flexible Packaging (a)
|
(86.1
|
)
|
18.0
|
|
2.5
|
|
|||
Corporate (b)
|
(68.3
|
)
|
(102.2
|
)
|
(8.1
|
)
|
|||
Total
|
$
|
190.3
|
|
$
|
219.5
|
|
$
|
282.7
|
|
CAPITAL EXPENDITURES:
|
|
|
|
||||||
Paperboard Packaging
|
$
|
148.9
|
|
$
|
114.9
|
|
$
|
107.8
|
|
Flexible Packaging
|
7.6
|
|
3.6
|
|
8.6
|
|
|||
Corporate
|
3.6
|
|
4.3
|
|
13.5
|
|
|||
Total
|
$
|
160.1
|
|
$
|
122.8
|
|
$
|
129.9
|
|
DEPRECIATION AND AMORTIZATION:
|
|
|
|
||||||
Paperboard Packaging
|
$
|
243.1
|
|
$
|
251.8
|
|
$
|
252.7
|
|
Flexible Packaging
|
31.2
|
|
31.6
|
|
40.9
|
|
|||
Corporate
|
4.1
|
|
5.3
|
|
11.8
|
|
|||
Total
|
$
|
278.4
|
|
$
|
288.7
|
|
$
|
305.4
|
|
|
December 31,
|
|||||
In millions
|
2011
|
2010
|
||||
ASSETS AT DECEMBER 31:
|
|
|
||||
Paperboard Packaging
|
$
|
3,763.4
|
|
$
|
3,480.4
|
|
Flexible Packaging
|
734.2
|
|
844.6
|
|
||
Corporate (c)
|
152.1
|
|
159.6
|
|
||
Total
|
$
|
4,649.7
|
|
$
|
4,484.6
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2011
|
2010
|
2009
|
||||||
NET SALES:
|
|
|
|
||||||
U.S./Canada
|
$
|
3,979.8
|
|
$
|
3,860.2
|
|
$
|
3,862.6
|
|
Central/South America
|
80.7
|
|
77.0
|
|
70.3
|
|
|||
Europe
|
185.1
|
|
168.9
|
|
171.7
|
|
|||
Asia Pacific
|
163.2
|
|
134.5
|
|
121.8
|
|
|||
Eliminations (d)
|
(202.5
|
)
|
(145.6
|
)
|
(130.6
|
)
|
|||
Total
|
$
|
4,206.3
|
|
$
|
4,095.0
|
|
$
|
4,095.8
|
|
In millions
|
2011
|
2010
|
||||
ASSETS AT DECEMBER 31:
|
|
|
||||
U.S./Canada
|
$
|
4,167.6
|
|
$
|
4,024.5
|
|
Central/South America
|
70.7
|
|
69.1
|
|
||
Europe
|
178.5
|
|
167.1
|
|
||
Asia Pacific
|
80.8
|
|
64.3
|
|
||
Corporate (c)
|
152.1
|
|
159.6
|
|
||
Total
|
$
|
4,649.7
|
|
$
|
4,484.6
|
|
a.
|
2011 results include the
$96.3 million
goodwill impairment charge.
|
b.
|
Primarily consists of the alternative fuel tax credit, unallocated general corporate expenses and costs associated with the combination with Altivity.
|
c.
|
Corporate assets are principally cash and equivalents, other current assets, deferred income tax assets, deferred debt issue costs and a portion of property, plant and equipment.
|
d.
|
Represents primarily the elimination of intergeographic sales between the Company’s U.S. and Europe, Asia Pacific and Central/South America operations.
|
NOTE 17.
|
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
|
|
2011
|
||||||||||||||
In millions, except per share amounts
|
First
|
Second
|
Third
|
Fourth
|
Total
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,000.6
|
|
$
|
1,080.7
|
|
$
|
1,073.3
|
|
$
|
1,051.7
|
|
$
|
4,206.3
|
|
Gross Profit
|
158.2
|
|
165.4
|
|
154.0
|
|
159.9
|
|
637.5
|
|
|||||
Goodwill Impairment, Restructuring and Other Special Charges
|
—
|
|
0.5
|
|
96.3
|
|
10.7
|
|
107.5
|
|
|||||
Income (Loss) from Operations
|
68.6
|
|
76.3
|
|
(17.7
|
)
|
63.1
|
|
190.3
|
|
|||||
Net Income (Loss) Attributable to Graphic Packaging Holding Company
|
26.7
|
|
32.1
|
|
(47.5
|
)
|
265.6
|
|
276.9
|
|
|||||
Income (Loss) Per Share — Basic*
|
$
|
0.08
|
|
$
|
0.08
|
|
$
|
(0.12
|
)
|
$
|
0.68
|
|
$
|
0.74
|
|
Income (Loss) Per Share — Diluted*
|
$
|
0.08
|
|
$
|
0.08
|
|
$
|
(0.12
|
)
|
$
|
0.67
|
|
$
|
0.73
|
|
|
2010
|
||||||||||||||
In millions, except per share amounts
|
First
|
Second
|
Third
|
Fourth
|
Total
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,004.1
|
|
$
|
1,036.5
|
|
$
|
1,042.8
|
|
$
|
1,011.6
|
|
$
|
4,095.0
|
|
Gross Profit
|
145.8
|
|
148.8
|
|
155.1
|
|
143.5
|
|
593.2
|
|
|||||
Goodwill Impairment, Restructuring and Other Special Charges
|
8.5
|
|
46.6
|
|
—
|
|
—
|
|
55.1
|
|
|||||
Income from Operations
|
59.6
|
|
22.8
|
|
78.5
|
|
58.6
|
|
219.5
|
|
|||||
Net Income (Loss)
|
6.3
|
|
(32.8
|
)
|
17.6
|
|
19.6
|
|
10.7
|
|
|||||
Income (Loss) Per Share — Basic and Diluted
|
$
|
0.02
|
|
$
|
(0.10
|
)
|
$
|
0.05
|
|
$
|
0.06
|
|
$
|
0.03
|
|
NOTE 18.
|
EARNINGS PER SHARE
|
|
Year Ended December 31,
|
||||||||
In millions, except per share data
|
2011
|
2010
|
2009
|
||||||
Net Income Attributable to Graphic Packaging Holding Company
|
$
|
276.9
|
|
$
|
10.7
|
|
$
|
56.4
|
|
Weighted Average Shares:
|
|
|
|
||||||
Basic
|
376.3
|
|
343.8
|
|
343.1
|
|
|||
Dilutive effect of RSUs and stock options
|
5.4
|
|
3.6
|
|
1.5
|
|
|||
Diluted
|
381.7
|
|
347.4
|
|
344.6
|
|
|||
Earnings Per Share — Basic
|
$
|
0.74
|
|
$
|
0.03
|
|
$
|
0.16
|
|
Earnings Per Share — Diluted
|
$
|
0.73
|
|
$
|
0.03
|
|
$
|
0.16
|
|
|
Year Ended December 31,
|
|||||
|
2011
|
2010
|
2009
|
|||
Employee Stock Options
|
4,692,106
|
|
4,904,675
|
|
6,290,080
|
|
Restricted Stock Awards
|
—
|
|
—
|
|
557,293
|
|
Total
|
4,692,106
|
|
4,904,675
|
|
6,847,373
|
|
NOTE 19.
|
GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS
|
|
Year Ended December 31, 2011
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
Net Sales
|
$
|
—
|
|
$
|
3,316.8
|
|
$
|
63.9
|
|
$
|
1,057.6
|
|
$
|
(232.0
|
)
|
$
|
4,206.3
|
|
Cost of Sales
|
—
|
|
2,786.2
|
|
48.5
|
|
966.1
|
|
(232.0
|
)
|
3,568.8
|
|
||||||
Selling, General and Administrative
|
—
|
|
272.9
|
|
6.6
|
|
62.9
|
|
—
|
|
342.4
|
|
||||||
Other (Income) Expense, Net
|
—
|
|
(1.3
|
)
|
0.1
|
|
(1.5
|
)
|
—
|
|
(2.7
|
)
|
||||||
Goodwill Impairment, Restructuring and Other Special Charges
|
—
|
|
11.2
|
|
—
|
|
96.3
|
|
—
|
|
107.5
|
|
||||||
Income from Operations
|
—
|
|
247.8
|
|
8.7
|
|
(66.2
|
)
|
—
|
|
190.3
|
|
||||||
Interest Expense, Net
|
—
|
|
(143.0
|
)
|
—
|
|
(1.9
|
)
|
—
|
|
(144.9
|
)
|
||||||
Loss on Modification or Extinguishment of Debt
|
—
|
|
(2.1
|
)
|
—
|
|
—
|
|
—
|
|
(2.1
|
)
|
||||||
Income (Loss) before Income Taxes and Equity Income of Unconsolidated Entities
|
—
|
|
102.7
|
|
8.7
|
|
(68.1
|
)
|
—
|
|
43.3
|
|
||||||
Income Tax Benefit (Expense)
|
—
|
|
235.5
|
|
(0.2
|
)
|
(5.5
|
)
|
—
|
|
229.8
|
|
||||||
Income (Loss) before Equity Income of Unconsolidated Entities
|
—
|
|
338.2
|
|
8.5
|
|
(73.6
|
)
|
—
|
|
273.1
|
|
||||||
Equity Income of Unconsolidated Entities
|
—
|
|
—
|
|
—
|
|
2.1
|
|
—
|
|
2.1
|
|
||||||
Equity in Net Earnings of Subsidiaries
|
275.2
|
|
(63.0
|
)
|
2.7
|
|
—
|
|
(214.9
|
)
|
—
|
|
||||||
Net Income (Loss)
|
275.2
|
|
275.2
|
|
11.2
|
|
(71.5
|
)
|
(214.9
|
)
|
275.2
|
|
||||||
Net Loss Attributable to Noncontrolling Interests
|
1.7
|
|
1.7
|
|
—
|
|
1.7
|
|
(3.4
|
)
|
1.7
|
|
||||||
Net Income (Loss) Attributable to Graphic Packaging Holding Company
|
$
|
276.9
|
|
$
|
276.9
|
|
$
|
11.2
|
|
$
|
(69.8
|
)
|
$
|
(218.3
|
)
|
$
|
276.9
|
|
|
Year Ended December 31, 2010
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
Net Sales
|
$
|
—
|
|
$
|
3,221.3
|
|
$
|
54.3
|
|
$
|
983.8
|
|
$
|
(164.4
|
)
|
$
|
4,095.0
|
|
Cost of Sales
|
—
|
|
2,741.1
|
|
40.9
|
|
884.2
|
|
(164.4
|
)
|
3,501.8
|
|
||||||
Selling, General and Administrative
|
—
|
|
251.4
|
|
5.7
|
|
63.3
|
|
—
|
|
320.4
|
|
||||||
Other (Income) Expense, Net
|
—
|
|
(3.2
|
)
|
(0.2
|
)
|
1.6
|
|
—
|
|
(1.8
|
)
|
||||||
Goodwill Impairment, Restructuring and Other Special Charges
|
—
|
|
55.1
|
|
—
|
|
—
|
|
—
|
|
55.1
|
|
||||||
Income from Operations
|
—
|
|
176.9
|
|
7.9
|
|
34.7
|
|
—
|
|
219.5
|
|
||||||
Interest Expense, Net
|
—
|
|
(173.5
|
)
|
—
|
|
(1.0
|
)
|
—
|
|
(174.5
|
)
|
||||||
Loss on Modification or Extinguishment of Debt
|
—
|
|
(8.4
|
)
|
—
|
|
—
|
|
—
|
|
(8.4
|
)
|
||||||
Income before Income Taxes and Equity Income of Unconsolidated Entities
|
—
|
|
(5.0
|
)
|
7.9
|
|
33.7
|
|
—
|
|
36.6
|
|
||||||
Income Tax Expense
|
—
|
|
(21.2
|
)
|
(0.5
|
)
|
(5.8
|
)
|
—
|
|
(27.5
|
)
|
||||||
(Loss) Income before Equity Income of Unconsolidated Entities
|
—
|
|
(26.2
|
)
|
7.4
|
|
27.9
|
|
—
|
|
9.1
|
|
||||||
Equity Income of Unconsolidated Entities
|
—
|
|
—
|
|
—
|
|
1.6
|
|
—
|
|
1.6
|
|
||||||
Equity in Net Earnings of Subsidiaries
|
10.7
|
|
36.9
|
|
0.7
|
|
—
|
|
(48.3
|
)
|
—
|
|
||||||
Net Income
|
$
|
10.7
|
|
$
|
10.7
|
|
$
|
8.1
|
|
$
|
29.5
|
|
$
|
(48.3
|
)
|
$
|
10.7
|
|
|
Year Ended December 31, 2009
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
Net Sales
|
$
|
—
|
|
$
|
3,230.0
|
|
$
|
53.8
|
|
$
|
942.6
|
|
$
|
(130.6
|
)
|
$
|
4,095.8
|
|
Cost of Sales
|
—
|
|
2,802.0
|
|
44.0
|
|
854.7
|
|
(133.5
|
)
|
3,567.2
|
|
||||||
Selling, General and Administrative
|
—
|
|
244.8
|
|
6.2
|
|
63.6
|
|
—
|
|
314.6
|
|
||||||
Other Income, Net
|
—
|
|
(2.2
|
)
|
(6.0
|
)
|
(7.4
|
)
|
—
|
|
(15.6
|
)
|
||||||
Goodwill Impairment, Restructuring and Other Special (Credits) Charges
|
—
|
|
(66.1
|
)
|
—
|
|
13.0
|
|
—
|
|
(53.1
|
)
|
||||||
Income from Operations
|
—
|
|
251.5
|
|
9.6
|
|
18.7
|
|
2.9
|
|
282.7
|
|
||||||
Interest Expense, Net
|
—
|
|
(194.5
|
)
|
(0.1
|
)
|
(1.8
|
)
|
—
|
|
(196.4
|
)
|
||||||
Loss on Modification or Extinguishment of Debt
|
—
|
|
(7.1
|
)
|
—
|
|
—
|
|
—
|
|
(7.1
|
)
|
||||||
Income before Income Taxes and Equity Income of Unconsolidated Entities
|
—
|
|
49.9
|
|
9.5
|
|
16.9
|
|
2.9
|
|
79.2
|
|
||||||
Income Tax (Expense) Benefit
|
—
|
|
(31.5
|
)
|
0.6
|
|
6.8
|
|
—
|
|
(24.1
|
)
|
||||||
Income before Equity Income of Unconsolidated Entities
|
—
|
|
18.4
|
|
10.1
|
|
23.7
|
|
2.9
|
|
55.1
|
|
||||||
Equity Income of Unconsolidated Entities
|
—
|
|
—
|
|
—
|
|
1.3
|
|
—
|
|
1.3
|
|
||||||
Equity in Net Earnings of Subsidiaries
|
56.4
|
|
38.0
|
|
5.6
|
|
—
|
|
(100.0
|
)
|
—
|
|
||||||
Net Income
|
$
|
56.4
|
|
$
|
56.4
|
|
$
|
15.7
|
|
$
|
25.0
|
|
$
|
(97.1
|
)
|
$
|
56.4
|
|
|
Year Ended December 31, 2011
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
||||||||||||
Current Assets:
|
|
|
|
|
|
|
||||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
$
|
228.9
|
|
$
|
—
|
|
$
|
42.9
|
|
$
|
—
|
|
$
|
271.8
|
|
Receivables, Net
|
—
|
|
255.4
|
|
4.9
|
|
141.6
|
|
—
|
|
401.9
|
|
||||||
Inventories, Net
|
—
|
|
337.2
|
|
4.2
|
|
137.7
|
|
—
|
|
479.1
|
|
||||||
Deferred Income Tax Assets
|
—
|
|
124.2
|
|
—
|
|
0.8
|
|
—
|
|
125.0
|
|
||||||
Intercompany
|
30.1
|
|
478.9
|
|
3.9
|
|
(512.9
|
)
|
—
|
|
—
|
|
||||||
Other Current Assets
|
—
|
|
31.8
|
|
0.1
|
|
4.4
|
|
—
|
|
36.3
|
|
||||||
Total Current Assets
|
30.1
|
|
1,456.4
|
|
13.1
|
|
(185.5
|
)
|
—
|
|
1,314.1
|
|
||||||
Property, Plant and Equipment, Net
|
—
|
|
1,425.1
|
|
17.1
|
|
180.1
|
|
(0.2
|
)
|
1,622.1
|
|
||||||
Investment in Consolidated Subsidiaries
|
1,151.4
|
|
6.3
|
|
9.4
|
|
—
|
|
(1,167.1
|
)
|
—
|
|
||||||
Goodwill
|
—
|
|
1,096.0
|
|
—
|
|
39.7
|
|
—
|
|
1,135.7
|
|
||||||
Other Assets
|
—
|
|
462.6
|
|
0.1
|
|
115.1
|
|
—
|
|
577.8
|
|
||||||
Total Assets
|
$
|
1,181.5
|
|
$
|
4,446.4
|
|
$
|
39.7
|
|
$
|
149.4
|
|
$
|
(1,167.3
|
)
|
$
|
4,649.7
|
|
|
|
|
|
|
|
|
||||||||||||
LIABILITIES
|
|
|
|
|
|
|
||||||||||||
Current Liabilities:
|
|
|
|
|
|
|
||||||||||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
—
|
|
$
|
19.3
|
|
$
|
—
|
|
$
|
10.8
|
|
$
|
—
|
|
$
|
30.1
|
|
Accounts Payable
|
—
|
|
288.8
|
|
5.3
|
|
117.3
|
|
—
|
|
411.4
|
|
||||||
Interest Payable
|
—
|
|
23.0
|
|
—
|
|
—
|
|
—
|
|
23.0
|
|
||||||
Other Accrued Liabilities
|
—
|
|
148.2
|
|
1.6
|
|
31.2
|
|
—
|
|
181.0
|
|
||||||
Total Current Liabilities
|
—
|
|
479.3
|
|
6.9
|
|
159.3
|
|
—
|
|
645.5
|
|
||||||
Long-Term Debt
|
—
|
|
2,334.2
|
|
—
|
|
1.5
|
|
—
|
|
2,335.7
|
|
||||||
Deferred Income Tax Liabilities
|
—
|
|
60.3
|
|
—
|
|
2.7
|
|
—
|
|
63.0
|
|
||||||
Other Noncurrent Liabilities
|
—
|
|
407.6
|
|
—
|
|
16.4
|
|
—
|
|
424.0
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Contingently Redeemable Noncontrolling Interests
|
14.8
|
|
14.8
|
|
—
|
|
14.8
|
|
(29.6
|
)
|
14.8
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
EQUITY
|
|
|
|
|
|
|
||||||||||||
Total Graphic Packaging Holding Company Shareholders' Equity
|
1,167.9
|
|
1,151.4
|
|
32.8
|
|
(44.1
|
)
|
(1,140.1
|
)
|
1,167.9
|
|
||||||
Noncontrolling Interests
|
(1.2
|
)
|
(1.2
|
)
|
—
|
|
(1.2
|
)
|
2.4
|
|
(1.2
|
)
|
||||||
Total Equity
|
1,166.7
|
|
1,150.2
|
|
32.8
|
|
(45.3
|
)
|
(1,137.7
|
)
|
1,166.7
|
|
||||||
Total Liabilities and Equity
|
$
|
1,181.5
|
|
$
|
4,446.4
|
|
$
|
39.7
|
|
$
|
149.4
|
|
$
|
(1,167.3
|
)
|
$
|
4,649.7
|
|
|
Year Ended December 31, 2010
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
||||||||||||
Current Assets:
|
|
|
|
|
|
|
||||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
$
|
107.1
|
|
$
|
—
|
|
$
|
31.6
|
|
$
|
—
|
|
$
|
138.7
|
|
Receivables, Net
|
—
|
|
261.2
|
|
5.6
|
|
115.4
|
|
—
|
|
382.2
|
|
||||||
Inventories, Net
|
—
|
|
309.6
|
|
4.3
|
|
103.4
|
|
—
|
|
417.3
|
|
||||||
Deferred Income Tax Assets
|
—
|
|
27.4
|
|
—
|
|
0.6
|
|
—
|
|
28.0
|
|
||||||
Intercompany
|
8.8
|
|
165.5
|
|
(14.7
|
)
|
(159.6
|
)
|
—
|
|
—
|
|
||||||
Other Current Assets
|
—
|
|
42.0
|
|
0.1
|
|
5.3
|
|
—
|
|
47.4
|
|
||||||
Total Current Assets
|
8.8
|
|
912.8
|
|
(4.7
|
)
|
96.7
|
|
—
|
|
1,013.6
|
|
||||||
Property, Plant and Equipment, Net
|
—
|
|
1,447.2
|
|
18.0
|
|
176.5
|
|
(0.2
|
)
|
1,641.5
|
|
||||||
Investment in Consolidated Subsidiaries
|
738.2
|
|
220.8
|
|
11.1
|
|
—
|
|
(970.1
|
)
|
—
|
|
||||||
Goodwill
|
—
|
|
1,170.7
|
|
—
|
|
34.5
|
|
—
|
|
1,205.2
|
|
||||||
Other Assets
|
—
|
|
600.2
|
|
—
|
|
24.1
|
|
—
|
|
624.3
|
|
||||||
Total Assets
|
$
|
747.0
|
|
$
|
4,351.7
|
|
$
|
24.4
|
|
$
|
331.8
|
|
$
|
(970.3
|
)
|
$
|
4,484.6
|
|
|
|
|
|
|
|
|
||||||||||||
LIABILITIES
|
|
|
|
|
|
|
||||||||||||
Current Liabilities:
|
|
|
|
|
|
|
||||||||||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
—
|
|
$
|
18.9
|
|
$
|
—
|
|
$
|
7.1
|
|
$
|
—
|
|
$
|
26.0
|
|
Accounts Payable
|
—
|
|
279.5
|
|
4.1
|
|
77.9
|
|
—
|
|
361.5
|
|
||||||
Interest Payable
|
—
|
|
28.4
|
|
—
|
|
—
|
|
—
|
|
28.4
|
|
||||||
Other Accrued Liabilities
|
—
|
|
157.1
|
|
2.4
|
|
20.3
|
|
—
|
|
179.8
|
|
||||||
Total Current Liabilities
|
—
|
|
483.9
|
|
6.5
|
|
105.3
|
|
—
|
|
595.7
|
|
||||||
Long-Term Debt
|
—
|
|
2,552.2
|
|
—
|
|
0.9
|
|
—
|
|
2,553.1
|
|
||||||
Deferred Income Tax Liabilities
|
—
|
|
237.1
|
|
—
|
|
4.0
|
|
—
|
|
241.1
|
|
||||||
Other Noncurrent Liabilities
|
—
|
|
340.3
|
|
—
|
|
7.4
|
|
—
|
|
347.7
|
|
||||||
Total Liabilities
|
—
|
|
3,613.5
|
|
6.5
|
|
117.6
|
|
—
|
|
3,737.6
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||||||||||||
Total Shareholders’ Equity
|
747.0
|
|
738.2
|
|
17.9
|
|
214.2
|
|
(970.3
|
)
|
747.0
|
|
||||||
Total Liabilities and Equity
|
$
|
747.0
|
|
$
|
4,351.7
|
|
$
|
24.4
|
|
$
|
331.8
|
|
$
|
(970.3
|
)
|
$
|
4,484.6
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
1.
|
Consolidated Statements of Operations for each of the three years in the period ended December 31, 2011
|
2.
|
All schedules are omitted as the information required is either included elsewhere in the consolidated financial statements herein or is not applicable.
|
3.
|
Exhibits to Annual Report on Form 10-K for Year Ended December 31, 2011.
|
Exhibit
Number
|
Description
|
2.3
|
Transaction Agreement and Agreement and Plan of Merger dated as of July 9, 2007, by and among the Company, Bluegrass Container Holdings, LLC, TPG Bluegrass IV, L.P., TPG Bluegrass IV — AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V — AIV 2, L.P., TPG FOF V — A, L.P., TPG FOF V — B, L.P., BCH Management, LLC, Field Holdings, Inc., New Giant Corporation and Giant Merger Sub, Inc. Filed as Exhibit 2.1 to Graphic Packaging Corporation’s Current Report on Form 8-K filed on July 11, 2007 and incorporated herein by reference.
|
3.1
|
Restated Certificate of Incorporation of New Giant Corporation. Filed as Exhibit 3.1 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on March 10, 2008 and incorporated herein by reference.
|
3.2
|
Amended and Restated Bylaws of Graphic Packaging Holding Company. Filed as Exhibit 3.2 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on March 10, 2008 and incorporated herein by reference.
|
3.3
|
Certificate of Designation Preferences and Rights of Series A Junior Participating Preferred Stock. Filed as Exhibit 3.3 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on March 10, 2008 and incorporated herein by reference.
|
4.1
|
Stockholders Agreement dated as of July 7, 2007, by and among New Giant Corporation, the persons listed on the signature pages thereto as Family Stockholders, Clayton, Dubilier & Rice Fund V Limited Partnership, EXOR Group S.A., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc., TPG Bluegrass IV — AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V, Inc., TPG Bluegrass V — AIV 2, L.P., TPG FOF V — A, L.P. and TPG FOF V — B, L.P., and Field Holdings, Inc. Filed as Annex E to New Giant Corporation’s Registration Statement on Form S-4 filed on August 31, 2007, as amended and incorporated herein by reference.
|
4.2
|
Registration Rights Agreement dated as of July 9, 2007, by and among New Giant Corporation, the persons listed on Schedule I thereto as Family Stockholders, any of the persons listed on Schedule I thereto as “Astro Stockholders,” Clayton, Dubilier & Rice Fund V Limited Partnership, EXOR Group S.A., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc., TPG Bluegrass IV — AIV 2, L.P., TPG Bluegrass V. L.P., TPG Bluegrass V, Inc., TPB Bluegrass V — AIV 2, L.P., BCH Management, LLC, TPG FOF V — A, L.P., TPG FOF V — B., L.P. Filed as Annex F to New Giant Corporation’s Registration Statement on Form S-4 filed on August 31, 2007, as amended and incorporated herein by reference.
|
4.3
|
Rights Agreement entered into between Graphic Packaging Holding Company and Wells Fargo Bank, National Association. Filed as Exhibit 4.3 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on March 10, 2008 and incorporated herein by reference.
|
4.4
|
Indenture, dated as of June 16, 2009, among Graphic Packaging International, Inc., the guarantors named therein and U.S. Bank National Association, as Trustee, relating to the 9.5% Senior Notes due 2017 of Graphic Packaging International, Inc. Filed as Exhibit 4.1 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on June 18, 2009 and incorporated herein by reference.
|
4.5
|
Registration Rights Agreement entered into between Graphic Packaging Holding Company and Banc of America Securities LLC, J.P. Morgan Securities and Goldman, Sachs & Co. Filed as Exhibit 4.2 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on June 18, 2009 and incorporated herein by reference.
|
4.6
|
Supplemental Indenture, dated as of August 20, 2009, among Graphic Packaging International, Inc., the guarantors named therein and U.S. Bank National Association, as Trustee, relating to the 9.5% Senior Notes due 2017 of Graphic Packaging International, Inc. Filed as Exhibit 4.1 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on August 26, 2009 and incorporated herein by reference.
|
4.7
|
Registration Rights Agreement entered into between Graphic Packaging Holding Company and Banc of America Securities LLC. Filed as Exhibit 4.2 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on August 26, 2009 and incorporated herein by reference.
|
4.8
|
Indenture, dated as of August 8, 2003, among Graphic Packaging International, Inc., as Issuer, Graphic Packaging Corporation and GPI Holding, Inc., as Note Guarantors, and Wells Fargo Bank Minnesota, National Association, as Trustee, relating to the 9.5% Senior Subordinated Notes due 2013 of Graphic Packaging International, Inc. Filed as Exhibit 4.5 to Graphic Packaging Corporation’s Current Report on Form 8-K filed on August 13, 2003 and incorporated herein by reference.
|
4.9
|
Form of 9.5% Senior Subordinated Notes due 2013 of Graphic Packaging International, Inc. (included in Exhibit 4.6). Filed as Exhibit A to the Indenture, dated as of August 8, 2003, among Graphic Packaging International, Inc., as Issuer, Registrant and GPI Holding, Inc., as Note Guarantors, and Wells Fargo Bank Minnesota, National Association, as Trustee, relating to the 9.5% Senior Subordinated Notes due 2013 of Graphic Packaging International, Inc. Filed as Exhibit 4.5 to Registrant’s Current Report on Form 8-K filed on August 13, 2003 and incorporated herein by reference.
|
4.1
|
Supplemental Indenture in Respect of Note Guarantee (9.5% Senior Subordinated Notes due 2013) dated as of March 10, 2008 among Bluegrass Container Holding, LLC and its subsidiaries, Graphic Packaging Holding Company, Graphic Packaging International, Inc., Graphic Packaging Corporation and Wells Fargo Bank, National Association, successor by merger to Wells Fargo Bank Minnesota, National Association. Filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on March 10, 2008 and incorporated herein by reference.
|
4.11
|
Voting Agreement dated as of July 9, 2007, by and among Bluegrass Container Holdings, LLC, the persons listed on the signature pages thereto as a Family Stockholder, Clayton, Dubilier & Rice Fund V Limited Partnership, EXOR Group S.A., and, solely for the purposes of Section 5.2 thereof, New Giant Corporation. Filed as Exhibit 10.1 to New Giant Corporation’s Current Report on Form 8-K filed on July 11, 2007 and incorporated herein by reference.
|
4.12
|
Indenture, dated as of September 29, 2010, among Graphic Packaging International, Inc. and Graphic Packaging Holding Company, Graphic Packaging Corporation and the other Note Guarantors party thereto, as Note Guarantors, and U.S. Bank National Association, as Trustee, relating to the 7.87% Senior Notes due 2018 of Graphic Packaging International, Inc. Filed as Exhibit 4.1 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on September 29, 2010 and incorporated herein by reference.
|
4.13
|
First Amendment dated as of July 1, 2010 to the Stockholders Agreement dated as of July 9, 2007, by and among Graphic Packaging Holding Company, the persons listed on the signature pages thereto as Family Stockholders, Clayton, Dubilier & Rice Fund V Limited Partnership, Old Town S.A., Field Holdings, Inc., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc., TPG Bluegrass IV — AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V, Inc., TPG Bluegrass V — AIV 2, L.P., TPG FOF V-A, L.P. and TPG FOF V-B, L.P. Filed as Exhibit 4.1 to Graphic Packaging Holding Company’s Quarterly Report on Form 10-Q filed on November 4, 2010 and incorporated herein by reference.
|
4.14
|
First Amendment dated as of July 1, 2010 to the Registration Rights Agreement dated as of July 9, 2007, by and among Graphic Packaging Holding Company, the persons listed on the signature pages thereto as Family Stockholders, Clayton, Dubilier & Rice Fund V Limited Partnership, Old Town S.A., Field Holdings, Inc., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc., TPG Bluegrass IV — AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V, Inc., TPG Bluegrass V — AIV 2, L.P., TPG FOF V-A, L.P., TPG FOF V-B, L.P. and BCH Management, LLC. Filed as Exhibit 4.2 to Graphic Packaging Holding Company’s Quarterly Report on Form 10-Q filed on November 4, 2010 and incorporated herein by reference.
|
10.1
|
$1,355,000,000 Credit Agreement dated as of May 16, 2007 among Graphic Packaging International, Inc., Bank of America, N.A., as Administrative Agent, L/C Issuer, Swing Line Lender and Alternative Currency Funding Fronting Lender, Deutsche Bank Securities Inc., as Syndication Agent, Goldman Sachs Credit Partners L.P., LaSalle Bank National Association and Morgan Stanley Senior Funding, Inc., as Co-Documentation Agents, and the several lenders from time to time party thereto. Filed as Exhibit 10.1 to Graphic Packaging Corporation’s Current Report on Form 8-K filed on May 21, 2007 and incorporated herein by reference.
|
10.2
|
Amendment No. 1 to Credit Agreement dated as of March 10, 2007 by and among Graphic Packaging International, Inc., Graphic Packaging Corporation, Bank of America, N.A., as Administrative Agent, and the Lenders signatory thereto. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 10, 2008 and incorporated herein by reference.
|
10.3
|
Amendment No. 2 to Credit Agreement dated as of March 10, 2007 by and among Graphic Packaging International, Inc., Graphic Packaging Corporation, Bank of America, N.A. as Administrative Agent; and the Lenders signatory thereto. Filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on March 10, 2008 and incorporated herein by reference.
|
10.4
|
Amendment No. 3 to Credit Agreement dated as of December 3, 2009 by and among Graphic Packaging International, Inc., Graphic Packaging Corporation, Bank of America, N.A. as Administrative Agent, the Lenders signatory thereto, and each of the Subsidiary Guarantors signatory thereto. Filed as Exhibit 10.4 to Graphic Packaging Holding Company’s Annual Report on Form 10-K filed on February 23, 2010 and incorporated herein by reference.
|
10.5*
|
Employment Agreement, dated as of November 13, 2009, by and among Graphic Packaging International, Inc., Registrant and David W. Scheible. Filed as Exhibit 10.8 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.6*
|
Employment Agreement, dated as of November 5, 2009, by and among Graphic Packaging International, Inc., Registrant and Daniel J. Blount. Filed as Exhibit 10.3 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.7*
|
Employment Agreement, dated as of September 15, 2009, by and among Graphic Packaging International, Inc., Registrant and Stephen A. Hellrung. Filed as Exhibit 10.6 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.8*
|
Employment Agreement, dated as of November 9, 2009, by and among Graphic Packaging International, Inc., Registrant and Michael R. Schmal. Filed as Exhibit 10.9 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.9*
|
Employment Agreement, dated as of October 6, 2009, by and among Graphic Packaging International, Inc., Registrant and Michael P. Doss. Filed as Exhibit 10.4 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.10*
|
Employment Agreement, dated as of October 13, 2009, by and among Graphic Packaging International, Inc., Registrant and Cynthia A. Baerman. Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.11*
|
Employment Agreement, dated as of October 13, 2009, by and among Graphic Packaging International, Inc., Registrant and John C. Best. Filed as Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.12*
|
Employment Agreement, dated as of September 25, 2009, by and among Graphic Packaging International, Inc., Registrant and Kristopher L. Dover. Filed as Exhibit 10.5 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.13*
|
Employment Agreement, dated as of October 26, 2009, by and among Graphic Packaging International, Inc., Registrant and Alan Nichols. Filed as Exhibit 10.7 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.14*
|
Employment Agreement, dated as of October 19, 2009, by and among Graphic Packaging International, Inc., Registrant and Joseph P. Yost. Filed as Exhibit 10.10 to Registrant’s Current Report on Form 8-K filed on January 22, 2010 and incorporated herein by reference.
|
10.15*
|
Employment Agreement, dated as of August 9, 2010, by and among Graphic Packaging International, Inc., Registrant and Philip H. Geminder. Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on August 12, 2010 and incorporated herein by reference.
|
10.16*
|
2003 Riverwood Holding, Inc. Long-Term Incentive Plan. Filed as Exhibit 10.15 to Registration Statement on Form S-4 (Registration Statement No. 333-104928) filed on May 2, 2003 and incorporated herein by reference.
|
10.17*
|
Riverwood Holding, Inc. 2002 Stock Incentive Plan. Filed as Exhibit 10.19 to Registrant’s Annual Report on Form 10-K filed April 15, 2003 and incorporated herein by reference.
|
10.18*
|
Amendment No. 1 to Riverwood Holding, Inc. Stock Incentive Plan, Riverwood Holding, Inc. Supplemental Long-Term Incentive Plan and Riverwood Holding, Inc. 2002 Stock Incentive Plan. Filed as Exhibit 10.11 to Registrant’s Quarterly Report on Form 10-Q filed on November 14, 2003 and incorporated herein by reference.
|
10.19*
|
Form of Management Stock Option Agreement entered into by and between Registrant and each of Michael R. Schmal, Daniel J. Blount and Stephen A. Hellrung. Filed as Exhibit 10.13 to Registrant’s Quarterly Report on Form 10-Q filed on November 14, 2003 and incorporated herein by reference.
|
10.20*
|
Graphic Packaging Equity Incentive Plan, as amended and restated, effective as of March 1, 2001. Filed as Exhibit 10.9 to Graphic Packaging International Corporation’s Annual Report on Form 10-K filed on March 23, 2001 and incorporated herein by reference.
|
10.21*
|
Graphic Packaging Equity Compensation Plan for Non-Employee Directors, as amended and restated. Filed as Exhibit 10.10 to Graphic Packaging International Corporation’s Annual Report on Form 10-K filed on March 23, 2001 and incorporated herein by reference.
|
10.22*
|
Graphic Packaging Excess Benefit Plan, as amended and restated, effective as of January 1, 2009. Filed as Exhibit 10.22 to Graphic Packaging Holding Company’s Annual Report on Form 10-K filed on February 23, 2010 and incorporated herein by reference.
|
10.23*
|
Graphic Packaging Supplemental Retirement Plan, as amended and restated, effective as of January 1, 2009. Filed as Exhibit 10.23 to Graphic Packaging Holding Company’s Annual Report on Form 10-K filed on February 23, 2010 and incorporated herein by reference.
|
10.24*
|
ACX Technologies, Inc. Deferred Compensation Plan, as amended. Filed as Exhibit 10.15 to Graphic Packaging International Corporation’s Annual Report on Form 10-K filed on March 7, 1996 and incorporated herein by reference.
|
10.25*
|
First Amendment to the Graphic Packaging Deferred Compensation Plan. Filed as Exhibit 10.16 to Graphic Packaging International Corporation’s Annual Report on Form 10-K filed on March 23, 2001 and incorporated herein by reference.
|
10.26
|
Form of Indemnification Agreement, dated as of September 10, 2003, entered into by and among Registrant, GPI Holding, Inc., Graphic Packaging International, Inc. and each of Jeffrey H. Coors, Stephen M. Humphrey, Kevin J. Conway, G. Andrea Botta, John D. Beckett, Harold R. Logan, Jr., John R. Miller, Robert W. Tieken, B. Charles Ames (as emeritus director) and William K. Coors (as emeritus director). Filed as Exhibit 10.30 to Graphic Packaging Corporation’s Annual Report on Form 10-K filed on March 16, 2004 and incorporated herein by reference.
|
10.27*
|
Amended and Restated 2004 Stock and Incentive Compensation Plan effective May 13, 2009. Filed as Appendix A of the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 23, 2009 and incorporated herein by reference.
|
10.28*
|
Amended and Restated Riverwood Holding, Inc. Stock Incentive Plan effective May 17, 2005. Filed as Exhibit 10.38 to Registrant’s Annual Report on Form 10-K filed on March 2, 2007 and incorporated herein by reference.
|
10.29*
|
Form of Service Restricted Stock Unit Award Agreement granted on March 16, 2005 under the 2004 Stock and Incentive Compensation Plan. Filed as Exhibit 10.32 to Registrant’s Annual Report on Form 10-K filed on March 3, 2006 and incorporated herein by reference.
|
10.30*
|
Form of Service-Based Restricted Stock Unit Award Agreement granted on March 4, 2009. Filed as Exhibit 10.30 to Graphic Packaging Holding Company’s Annual Report on Form 10-K filed on February 23, 2010 and incorporated herein by reference.
|
10.31*
|
Form of Performance-Based Restricted Stock Unit Award Agreement granted on March 4, 2009. Filed as Exhibit 10.31 to Graphic Packaging Holding Company’s Annual Report on Form 10-K filed on February 23, 2010 and incorporated herein by reference.
|
10.32*
|
Graphic Packaging International, Inc. Management Incentive Plan.
|
10.33
|
Master Services Agreement dated November 29, 2007 by and between Graphic Packaging International, Inc. and Perot Systems Corporation. Filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on December 5, 2007 and incorporated herein by reference.
|
10.34
|
Purchase Agreement dated August 13, 2009, among Graphic Packaging International, Inc., Graphic Packaging Holding Company, Graphic Packaging Corporation, the other Guarantors party thereto, and Banc of America Securities LLC. Filed as Exhibit 10.1 to Graphic Packaging Holding Company’s Current Report on Form 8-K filed on August 17, 2009 and incorporated herein by reference.
|
10.35*
|
Graphic Packaging International, Inc. Supplemental Plan for Participants in the Riverwood International Employees Retirement Plan, as amended and restated, effective as of January 1, 2009. Filed as Exhibit 10.36 to Graphic Packaging Holding Company’s Annual Report on Form 10-K filed on February 23, 2010 and incorporated herein by reference.
|
10.36*
|
Riverwood International Change in Control Supplemental Retirement Plan, as amended and restated, effective as of January 1, 2008. Filed as Exhibit 10.37 to Graphic Packaging Holding Company’s Annual Report on Form 10-K filed on February 23, 2010 and incorporated herein by reference.
|
10.37
|
Amended and Restated Form of Indemnification Agreement for Directors. Filed as Exhibit 10.1 to Graphic Packaging Holding Company’s Quarterly Report on Form 10-Q filed on November 4, 2010 and incorporated herein by reference.
|
10.38*
|
Riverwood International Employees Retirement Plan, as amended and restated through December 31, 2009. Filed as Exhibit 10.38 to the Company’s Annual Report on Form 10-K filed on March 8, 2011 and incorporated herein by reference.
|
10.39*
|
First Amendment to the Riverwood International Employees Retirement Plan effective as of July 1, 2010. Filed as Exhibit 10.39 to the Company’s Annual Report on Form 10-K filed on March 8, 2011 and incorporated herein by reference.
|
10.40*
|
Second Amendment to the Riverwood International Employees Retirement Plan effective as of November 5, 2010. Filed as Exhibit 10.40 to the Company’s Annual Report on Form 10-K filed on March 8, 2011 and incorporated herein by reference.
|
10.41*
|
Graphic Packaging Retirement Plan, as amended and restated through December 31, 2009. Filed as Exhibit 10.41 to the Company’s Annual Report on Form 10-K filed on March 8, 2011 and incorporated herein by reference.
|
10.42*
|
First Amendment to the Graphic Packaging Retirement Plan effective as of July 1, 2010. Filed as Exhibit 10.42 to the Company’s Annual Report on Form 10-K filed on March 8, 2011 and incorporated herein by reference.
|
10.43*
|
Second Amendment to the Graphic Packaging Retirement Plan effective as of November 5, 2010. Filed as Exhibit 10.43 to the Company’s Annual Report on Form 10-K filed on March 8, 2011 and incorporated herein by reference.
|
10.44*
|
Graphic Packaging International, Inc. Non-Qualified Deferred Compensation Plan.
|
14.1
|
Code of Business Conduct and Ethics. Filed as Exhibit 14.1 to the Company's Annual Report on Form 10-K filed on March 8, 2011 and incorporated herein by reference.
|
21.1
|
List of Subsidiaries.
|
23.1
|
Consent of Independent Registered Public Accounting Firm.
|
31.1
|
Certification required by Rule 13a-14(a).
|
31.2
|
Certification required by Rule 13a-14(a).
|
32.1
|
Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
32.2
|
Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
/s/
DAVID W. SCHEIBLE
David W. Scheible
|
President and Chief Executive Officer
(Principal Executive Officer)
|
February 23, 2012
|
|
|
|
/s/
DANIEL J. BLOUNT
Daniel J. Blount
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
February 23, 2012
|
|
|
|
/s/
DEBORAH R. FRANK
Deborah R. Frank
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
February 23, 2012
|
Signatures
|
Title
|
Date
|
|
|
|
/s/
JOHN R. MILLER
John R. Miller
|
Non-Executive Chairman and Director
|
February 23, 2012
|
|
|
|
/s/
GEORGE V. BAYLY
George V. Bayly
|
Director
|
February 23, 2012
|
|
|
|
/s/
G. ANDREA BOTTA
G. Andrea Botta
|
Director
|
February 23, 2012
|
|
|
|
/s/ DAVID
D. CAMPBELL
David D. Campbell
|
Director
|
February 23, 2012
|
|
|
|
/s/
KEVIN J. CONWAY
Kevin J. Conway
|
Director
|
February 23, 2012
|
|
|
|
/s/
JEFFREY H. COORS
Jeffrey H. Coors
|
Director
|
February 23, 2012
|
|
|
|
/s/
JEFFREY LIAW
Jeffrey Liaw
|
Director
|
February 23, 2012
|
|
|
|
/s/
HAROLD R. LOGAN, JR.
Harold R. Logan, Jr.
|
Director
|
February 23, 2012
|
|
|
|
/s/
MICHAEL G. MACDOUGALL
Michael G. MacDougall
|
Director
|
February 23, 2012
|
|
|
|
/s/
DAVID A. PERDUE
David A. Perdue
|
Director
|
February 23, 2012
|
|
|
|
/s/
DAVID W. SCHEIBLE
David W. Scheible
|
Director
|
February 23, 2012
|
|
|
|
/s/
ROBERT W. TIEKEN
Robert W. Tieken
|
Director
|
February 23, 2012
|
|
|
|
/s/
LYNN A. WENTWORTH
Lynn A. Wentworth
|
Director
|
February 23, 2012
|
Section #
|
Subject
|
Page #
|
I
|
Plan Purpose
|
3
|
II
|
Financial Performance
|
3-4
|
III
|
Award Determination and Approval
|
4
|
IV
|
Individual Performance Factors
|
4-5
|
V
|
Currency
|
5
|
VI
|
Participation Level and New Participants
|
5
|
VII
|
Revisions to Plan
|
5-6
|
VIII
|
Form and Timing of Awards
|
6
|
IX
|
Employees on Leave
|
6
|
X
|
Termination, Death or Disability
|
6-7
|
XI
|
Other Plan Design Considerations
|
7-8
|
•
|
Net earnings or net income (before or after taxes)
|
•
|
Earnings per share
|
•
|
Net sales growth
|
•
|
Net operating profit
|
•
|
Return measures (including, but not limited to, return on assets, capital, equity or sales)
|
•
|
Cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital)
|
•
|
Earnings before or after taxes, interest, depreciation and/or amortization
|
•
|
Gross or operating margins
|
•
|
Productivity ratios
|
•
|
Share price (including, but not limited to, growth measures and total shareholder return)
|
•
|
Expense targets
|
•
|
Margins
|
•
|
Operating efficiency
|
•
|
Customer satisfaction
|
•
|
Working capital targets
|
•
|
EVA
®
(Economic Value Added).
|
IV.
|
INDIVIDUAL PERFORMANCE FACTORS:
|
V.
|
CURRENCY:
|
VI.
|
PARTICIPATION LEVEL AND NEW PARTICIPANTS:
|
VII.
|
REVISIONS TO PLAN:
|
VIII.
|
FORM AND TIMING OF AWARDS:
|
X.
|
TERMINATION, DEATH, OR DISABILITY:
|
XI.
|
OTHER PLAN DESIGN CONSIDERATIONS:
|
1.1
|
Plan
|
1.2
|
Effective Dates
|
1.3
|
Amounts Not Subject to Code Section 409A
|
2.1
|
Account
|
2.2
|
Administrator
|
2.3
|
Adoption Agreement
|
2.4
|
Beneficiary
|
2.5
|
Board or Board of Directors
|
2.6
|
Bonus
|
2.7
|
Change in Control
|
2.8
|
Code
|
2.9
|
Compensation
|
2.10
|
Director
|
2.11
|
Disabled
|
2.12
|
Eligible Employee
|
2.13
|
Employer
|
2.14
|
ERISA
|
2.15
|
Identification Date
|
2.16
|
Key Employee
|
2.17
|
Participant
|
2.18
|
Plan
|
2.19
|
Plan Sponsor
|
2.20
|
Plan Year
|
2.21
|
Related Employer
|
2.22
|
Retirement
|
2.23
|
Separation from Service
|
2.24
|
Unforeseeable Emergency
|
2.25
|
Valuation Date
|
2.26
|
Years of Service
|
3.1
|
Participation
|
3.2
|
Termination of Participation
|
4.1
|
Deferral Agreement
|
4.2
|
Amount of Deferral
|
4.3
|
Timing of Election to Defer
|
4.4
|
Election of Payment Schedule and Form of Payment
|
5.1
|
Matching Contributions
|
5.2
|
Other Contributions
|
6.1
|
Establishment of Account
|
6.2
|
Credits to Account
|
7.1
|
Investment Options
|
7.2
|
Adjustment of Accounts
|
8.1
|
Vesting
|
8.2
|
Death
|
8.3
|
Disability
|
9.1
|
Amount of Benefits
|
9.2
|
Method and Timing of Distributions
|
9.3
|
Unforeseeable Emergency
|
9.4
|
Payment Election Overrides
|
9.5
|
Cashouts of Amounts Not Exceeding Stated Limit
|
9.6
|
Required Delay in Payment to Key Employees
|
9.7
|
Change in Control
|
9.8
|
Permissible Delays in Payment
|
9.9
|
Permitted Acceleration of Payment
|
10.1
|
Amendment by Plan Sponsor
|
10.2
|
Plan Termination Following Change in Control or Corporate Dissolution
|
10.3
|
Other Plan Terminations
|
11.1
|
Establishment of Trust
|
11.2
|
Grantor Trust
|
11.3
|
Investment of Trust Funds
|
12.1
|
Powers and Responsibilities of the Administrator
|
12.2
|
Claims and Review Procedures
|
12.3
|
Plan Administrative Costs
|
13.1
|
Unsecured General Creditor of the Employer
|
13.2
|
Employer’s Liability
|
13.3
|
Limitation of Rights
|
13.4
|
Anti-Assignment
|
13.5
|
Facility of Payment
|
13.6
|
Notices
|
13.7
|
Tax Withholding
|
13.8
|
Indemnification
|
13.9
|
Successors
|
13.10
|
Disclaimer
|
13.11
|
Governing Law
|
1.1
|
Plan.
The Plan will be referred to by the name specified in the Adoption Agreement.
|
1.2
|
Effective Dates.
|
(a)
|
Original Effective Date.
The Original Effective Date is the date as of which the Plan was initially adopted.
|
(b)
|
Amendment Effective Date.
The Amendment Effective Date is the date specified in the Adoption Agreement as of which the Plan is amended and restated. Except to the extent otherwise provided herein or in the Adoption Agreement, the Plan shall apply to amounts deferred and benefit payments made on or after the Amendment Effective Date.
|
(c)
|
Special Effective Date.
A Special Effective Date may apply to any given provision if so specified in Appendix A of the Adoption Agreement. A Special Effective Date will control over the Original Effective Date or Amendment Effective Date, whichever is applicable, with respect to such provision of the Plan.
|
1.3
|
Amounts Not Subject to Code Section 409A.
|
2.1
|
“Account”
means an account established for the purpose of recording amounts credited on behalf of a Participant and any income, expenses, gains, losses or distributions included thereon. The Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant or to the Participant’s Beneficiary pursuant to the Plan.
|
2.2
|
“Administrator”
means the person or persons designated by the Plan Sponsor in Section 1.05 of the Adoption Agreement to be responsible for the administration of the Plan. If no Administrator is designated in the Adoption Agreement, the Administrator is the Plan Sponsor.
|
2.3
|
“Adoption Agreement”
means the agreement adopted by the Plan Sponsor that establishes the Plan.
|
2.4
|
“Beneficiary”
means the persons, trusts, estates or other entities entitled under Section 8.2 to receive benefits under the Plan upon the death of a Participant.
|
2.5
|
“Board” or “Board of Directors”
means the Board of Directors of the Plan Sponsor.
|
2.6
|
“Bonus”
means an amount of incentive remuneration payable by the Employer to a Participant.
|
2.7
|
“Change in Control”
means the occurrence of an event involving the Plan Sponsor that is described in Section 9.7.
|
2.8
|
“Code”
means the Internal Revenue Code of 1986, as amended.
|
2.9
|
“Compensation”
has the meaning specified in Section 3.01 of the Adoption Agreement.
|
2.10
|
“Director”
means a non-employee member of the Board who has been designated by the Employer as eligible to participate in the Plan.
|
2.11
|
“Disabled”
means a determination by the Administrator that the Participant is either (a) unable to engage in any substantial gainful activity
|
2.12
|
“Eligible Employee”
means an employee of the Employer who satisfies the requirements in Section 2.01 of the Adoption Agreement.
|
2.13
|
“Employer”
means the Plan Sponsor and any other entity which is authorized by the Plan Sponsor to participate in and, in fact, does adopt the Plan.
|
2.14
|
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
|
2.15
|
“Identification Date”
means the date as of which Key Employees are determined which is specified in Section 1.06 of the Adoption Agreement.
|
2.16
|
“Key Employee”
means an employee who satisfies the conditions set forth in Section 9.6.
|
2.17
|
“Participant”
means an Eligible Employee or Director who commences participation in the Plan in accordance with Article 3.
|
2.18
|
“Plan”
means the unfunded plan of deferred compensation set forth herein, including the Adoption Agreement and any trust agreement, as adopted by the Plan Sponsor and as amended from time to time.
|
2.19
|
“Plan Sponsor”
means the entity identified in Section 1.03 of the Adoption Agreement or any successor by merger, consolidation or otherwise.
|
2.20
|
“Plan Year”
means the period identified in Section 1.02 of the Adoption Agreement.
|
2.21
|
“Related Employer”
means the Employer and (a) any corporation that is a member of a controlled group of corporations as defined in Code Section 414(b) that includes the Employer and (b) any trade or business
|
2.22
|
“Retirement”
has the meaning specified in 6.01(f) of the Adoption Agreement.
|
2.23
|
“Separation from Service”
means the date that the Participant dies, retires or otherwise has a termination of employment with respect to all entities comprising the Related Employer. A Separation from Service does not occur if the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or such longer period during which the Participant’s right to re-employment is provided by statute or contract. If the period of leave exceeds six months and the Participant’s right to re-employment is not provided either by statute or contract, a Separation from Service will be deemed to have occurred on the first day following the six-month period. If the period of leave is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where the impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29 month period of absence may be substituted for the six month period.
|
2.24
|
“Unforeseeable Emergency”
means a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the
|
2.25
|
“Valuation Date”
means each business day of the Plan Year that the New York Stock Exchange is open.
|
2.26
|
“Years of Service”
means each one year period for which the Participant receives service credit in accordance with the provisions of Section 7.01(d) of the Adoption Agreement.
|
3.1
|
Participation.
The Participants in the Plan shall be those Directors and employees of the Employer who satisfy the requirements of Section 2.01 of the Adoption Agreement.
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3.2
|
Termination of Participation.
The Administrator may terminate a Participant’s participation in the Plan in a manner consistent with Code Section 409A. If the Employer terminates a Participant’s participation before the Participant experiences a Separation from Service the Participant’s vested Accounts shall be paid in accordance with the provisions of Article 9.
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4.1
|
Deferral Agreement.
If permitted by the Plan Sponsor in accordance with Section 4.01 of the Adoption Agreement, each Eligible Employee and Director may elect to defer his Compensation within the meaning of Section 3.01 of the Adoption Agreement by executing in writing or electronically, a deferral agreement in accordance with rules and procedures established by the Administrator and the provisions of this Article 4.
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4.2
|
Amount of Deferral.
An Eligible Employee or Director may elect to defer Compensation in any amount permitted by Section 4.01(a) of the Adoption Agreement.
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4.3
|
Timing of Election to Defer.
Each Eligible Employee or Director who desires to defer Compensation otherwise payable during a Plan Year must execute a deferral agreement within the period preceding the Plan Year specified by the Administrator. Each Eligible Employee who desires to defer Compensation that is a Bonus must execute a deferral agreement within the period preceding the Plan Year during which the Bonus is earned that is specified by the Administrator, except that if the Bonus can be treated as performance based compensation as described in Code Section 409A(a)(4)(B)(iii), the deferral agreement may be executed within the period specified by the Administrator, which period, in no event, shall end after the date which is six months prior to the end of the period during which the Bonus is earned, provided the Participant has performed services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date the Participant executed the deferral agreement and provided further that the compensation has not yet become ‘readily ascertainable’ with the meaning of Reg. Sec 1.409A-2(a)(8). In addition, if the Compensation qualifies as ‘fiscal year compensation’ within the meaning of Reg. Sec. 1.409A -2(a)(6), the deferral agreement may be made not later than the
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4.4
|
Election of Payment Schedule and Form of Payment.
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(a)
|
If the Plan Sponsor has elected to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an Eligible Employee or Director completes a deferral agreement, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for the Compensation subject to the deferral agreement from among the options the Plan Sponsor has made available for this purpose and which are specified in 6.01(b) of the Adoption Agreement. Prior to the time required by Reg. Sec. 1.409A-2, the Eligible Employee or Director shall elect a distribution event (which includes a specified time) and a form of payment for any Employer contributions that may be credited to the Participant’s Account during the Plan Year. If an Eligible Employee or Director fails to elect a distribution event, he shall be deemed to have elected Separation from Service as the distribution event. If he fails to elect a form of payment, he shall be deemed to have elected a lump sum
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(b)
|
If the Plan Sponsor has elected not to permit annual distribution elections in accordance with Section 6.01(h) of the Adoption Agreement the following rules apply. At the time an Eligible Employee or Director first completes a deferral agreement but in no event later than the time required by Reg. Sec. 1.409A-2, the Eligible Employee or Director must elect a distribution event (which includes a specified time) and a form of payment for amounts credited to his Account from among the options the Plan Sponsor has made available for this purpose and which are specified in Section 6.01(b) of the Adoption Agreement. If an Eligible Employee or Director fails to elect a distribution event, he shall be deemed to have elected Separation from Service in the distribution event. If the Eligible Employee or Director fails to elect a form of payment, he shall be deemed to have elected a lump sum form of payment.
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5.1
|
Matching Contributions.
If elected by the Plan Sponsor in Section 5.01(a) of the Adoption Agreement, the Employer will credit the Participant’s Account with a matching contribution determined in accordance with the formula specified in Section 5.01(a) of the Adoption Agreement. The matching contribution will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(a)(iii) of the Adoption Agreement.
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5.2
|
Other Contributions.
If elected by the Plan Sponsor in Section 5.01(b) of the Adoption Agreement, the Employer will credit the Participant’s Account with a contribution determined in accordance with the formula or method specified in Section 5.01(b) of the Adoption Agreement. The contribution will be treated as allocated to the Participant’s Account at the time specified in Section 5.01(b)(iii) of the Adoption Agreement.
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6.1
|
Establishment of Account.
For accounting and computational purposes only, the Administrator will establish and maintain an Account on behalf of each Participant which will reflect the credits made pursuant to Section 6.2, distributions or withdrawals, along with the earnings, expenses, gains and losses allocated thereto, attributable to the hypothetical investments made with the amounts in the Account as provided in Article 7. The Administrator will establish and maintain such other records and accounts, as it decides in its discretion to be reasonably required or appropriate to discharge its duties under the Plan.
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6.2
|
Credits to Account.
A Participant’s Account will be credited for each Plan Year with the amount of his elective deferrals under Section 4.1 at the time the amount subject to the deferral election would otherwise have been payable to the Participant and the amount of Employer contributions treated as allocated on his behalf under Article 5.
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7.1
|
Investment Options.
The amount credited to each Account shall be treated as invested in the investment options designated for this purpose by the Administrator.
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7.2
|
Adjustment of Accounts.
The amount credited to each Account shall be adjusted for hypothetical investment earnings, expenses, gains or losses in an amount equal to the earnings, expenses, gains or losses attributable to the investment options selected by the party designated in Section 9.01 of the Adoption Agreement from among the investment options provided in Section 7.1. If permitted by Section 9.01 of the Adoption Agreement, a Participant (or the Participant’s Beneficiary after the death of the Participant) may, in accordance with rules and procedures established by the Administrator, select the investments from among the options provided in Section 7.1 to be used for the purpose of calculating future hypothetical investment adjustments to the Account or to future credits to the Account under Section 6.2 effective as of the Valuation Date coincident with or next following notice to the Administrator. Each Account shall be adjusted as of each Valuation Date to reflect: (a) the hypothetical earnings, expenses, gains and losses described above; (b) amounts credited pursuant to Section 6.2; and (c) distributions or withdrawals. In addition, each Account may be adjusted for its allocable share of the hypothetical costs and expenses associated with the maintenance of the hypothetical investments provided in Section 7.1.
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8.1
|
Vesting.
A Participant, at all times, has a 100% nonforfeitable interest in the amounts credited to his Account attributable to his elective deferrals made in accordance with Section 4.1.
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8.2
|
Death.
The Plan Sponsor may elect to accelerate vesting upon the death of the Participant in accordance with Section 7.01(c) of the Adoption Agreement and/or to accelerate distributions upon Death in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement. If the Plan Sponsor does not elect to accelerate distributions upon death in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement, the vested amount credited to the Participant’s Account will be paid in accordance with the provisions of Article 9.
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8.3
|
Disability.
If the Plan Sponsor has elected to accelerate vesting upon the occurrence of a Disability in accordance with Section 7.01(c) of the Adoption Agreement and/or to permit distributions upon Disability in accordance with Section 6.01(b) or Section 6.01(d) of the Adoption Agreement, the determination of whether a Participant has incurred a Disability shall be made by the Administrator in its sole discretion in a manner consistent with the requirements of Code Section 409A.
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9.1
|
Amount of Benefits.
The vested amount credited to a Participant’s Account as determined under Articles 6, 7 and 8 shall determine and constitute the basis for the value of benefits payable to the Participant under the Plan.
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9.2
|
Method and Timing of Distributions.
Except as otherwise provided in this Article 9, distributions under the Plan shall be made in accordance with the elections made or deemed made by the Participant under Article 4. Subject to the provisions of Section 9.6 requiring a six month delay for certain distributions to Key Employees, distributions following a payment event shall commence at the time specified in Section 6.01(a) of the Adoption Agreement. If permitted by Section 6.01(g) of the Adoption Agreement, a Participant may elect, at least twelve months before a scheduled distribution event, to delay the payment date for a minimum period of sixty months from the originally scheduled date of payment. The distribution election change must be made in accordance with procedures and rules established by the Administrator. The Participant may, at the same time the date of payment is deferred, change the form of payment but such change in the form of payment may not effect an acceleration of payment in violation of Code Section 409A or the provisions of Reg. Sec. 1.409A-2(b). For purposes of this Section 9.2, a series of installment payments is always treated as a single payment and not as a series of separate payments.
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9.3
|
Unforeseeable Emergency.
A Participant may request a distribution due to an Unforeseeable Emergency if the Plan Sponsor has elected to permit Unforeseeable Emergency withdrawals under Section 8.01(a) of the Adoption Agreement. The request must be in writing and must be submitted to the Administrator along with evidence that the circumstances constitute an Unforeseeable Emergency. The Administrator has the discretion to require whatever evidence it deems necessary to determine whether a distribution is warranted, and may require the Participant to certify that the need cannot be met from other sources reasonably available to the Participant. Whether a Participant has incurred an Unforeseeable Emergency will be determined by the Administrator on the basis of the relevant facts and circumstances in its sole discretion, but, in no event, will an Unforeseeable Emergency be deemed to exist if the hardship can be relieved: (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the Participant’s assets to the
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9.4
|
Payment Election Overrides.
If the Plan Sponsor has elected one or more payment election overrides in accordance with Section 6.01(d) of the Adoption Agreement, the following provisions apply. Upon the occurrence of the first event selected by the Plan Sponsor, the remaining vested amount credited to the Participant’s Account shall be paid in the form designated to the Participant or his Beneficiary regardless of whether the Participant had made different elections of time and /or form of payment or whether the Participant was receiving installment payments at the time of the event.
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9.5
|
Cashouts Of Amounts Not Exceeding Stated Limit.
If the vested amount credited to the Participant’s Account does not exceed the limit established for this purpose by the Plan Sponsor in Section 6.01(e) of the Adoption Agreement at the time he separates from service with the Related Employer for any reason, the Employer shall distribute such amount to the Participant at the time specified in Section 6.01(a) of the Adoption Agreement in a single lump sum cash payment following such termination regardless of whether the Participant had made different elections of time or form of payment as to the vested amount credited to his Account or whether the Participant was receiving installments at the time of such termination. A Participant’s Account, for purposes of this Section 9.5, shall include any amounts described in Section 1.3.
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9.6
|
Required Delay in Payment to Key Employees
. Except as otherwise provided in this Section 9.6, a distribution made on account of Separation from Service (or Retirement, if applicable) to a Participant who is a Key Employee as of the date of his Separation from Service (or Retirement, if
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(a)
|
A Participant is treated as a Key Employee if (i) he is employed by a Related Employer any of whose stock is publicly traded on an established securities market, and (ii) he satisfies the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii), determined without regard to Code Section 416(i)(5), at any time during the twelve month period ending on the Identification Date.
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(b)
|
A Participant who is a Key Employee on an Identification Date shall be treated as a Key Employee for purposes of the six month delay in distributions for the twelve month period beginning on the first day of a month no later than the fourth month following the Identification Date. The Identification Date and the effective date of the delay in distributions shall be determined in accordance with Section 1.06 of the Adoption Agreement.
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(c)
|
The Plan Sponsor may elect to apply an alternative method to identify Participants who will be treated as Key Employees for purposes of the six month delay in distributions if the method satisfies each of the following requirements. The alternative method is reasonably designed to include all Key Employees, is an objectively determinable standard providing no direct or indirect election to any Participant regarding its application, and results in either all Key Employees or no more than 200 Key Employees being identified in the class as of any date. Use of an alternative method that satisfies the requirements of this Section 9.6(c ) will not be treated as a change in the time and form of payment for purposes of Reg. Sec. 1.409A-2(b).
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(
d)
|
The six month delay does not apply to payments described in Section 9.9(a),(b) or (d) or to payments that occur after the death of the Participant. If the payment of all or any portion of the Participant’s vested Account is being delayed in accordance with this Section 9.6 at the time he incurs a Disability which would otherwise require a distribution under the terms of the Plan, no amount shall be paid until the expiration of the six month period of delay required by this Section 9.6.
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9.7
|
Change in Control.
If the Plan Sponsor has elected to permit distributions upon a Change in Control, the following provisions shall apply. A distribution made upon a Change in Control will be made at the time specified in Section 6.01(a) of the Adoption Agreement in the form elected by the Participant in accordance with the procedures described in Article 4. Alternatively, if the Plan Sponsor has elected in accordance with Section 11.02 of the Adoption Agreement to require distributions upon a Change in Control, the Participant’s remaining vested Account shall be paid to the Participant or the Participant’s Beneficiary at the time specified in Section 6.01(a) of the Adoption Agreement as a single lump sum payment. A Change in Control, for purposes of the Plan, will occur upon a change in the ownership of the Plan Sponsor, a change in the effective control of the Plan Sponsor or a change in the ownership of a substantial portion of the assets of the Plan Sponsor, but only if elected by the Plan Sponsor in Section 11.03 of the Adoption Agreement. The Plan Sponsor, for this purpose, includes any corporation identified in this Section 9.7. All distributions made in accordance with this Section 9.7 are subject to the provisions of Section 9.6.
If a Participant continues to make deferrals in accordance with Article 4 after he has received a distribution due to a Change in Control, the residual amount payable to the Participant shall be paid at the time and in the form specified in the elections he makes in accordance with Article 4 or upon his death or Disability as provided in Article 8. Whether a Change in Control has occurred will be determined by the Administrator in accordance with the rules and definitions set forth in this Section 9.7. A distribution to the Participant will be treated as occurring upon a Change in Control if the Plan Sponsor terminates the Plan in accordance with Section 10.2 and distributes the Participant’s benefits within twelve months of a Change in Control as provided in Section 10.3. |
(a)
|
Relevant Corporations.
To constitute a Change in Control for purposes of the Plan, the event must relate to (i) the corporation for whom the Participant is performing services at the time of the Change in Control, (ii) the corporation that is liable for the payment of the Participant’s benefits under the Plan (or all corporations liable if more than one corporation is liable) but only if either the deferred compensation is attributable to the performance of services by the Participant for such corporation (or corporations) or there is a bona fide business purpose for such corporation (or corporations) to be liable for such payment and, in either case, no significant purpose of making such corporation (or corporations) liable for such payment is the avoidance of federal income tax, or (iii) a corporation that is a majority shareholder of a corporation identified in (i) or (ii), or any
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(b)
|
Stock Ownership.
Code Section 318(a) applies for purposes of determining stock ownership. Stock underlying a vested option is considered owned by the individual who owns the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). If, however, a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation Section 1.83-3(b) and (j)) the stock underlying the option is not treated as owned by the individual who holds the option.
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(c)
|
Change in the Ownership of a Corporation.
A change in the ownership of a corporation occurs on the date that any one person or more than one person acting as a group, acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of such corporation. If any one person or more than one person acting as a group is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of a corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or to cause a change in the effective control of the corporation as discussed below in Section 9.7(d)). An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation acquires its stock in exchange for property will be treated as an acquisition of stock. Section 9.7(c) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in such corporation remains outstanding after the transaction. For purposes of this Section 9.7(c), persons will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time or as a result of a public offering. Persons will, however, be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with
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(d)
|
Change in the effective control of a corporation.
A change in the effective control of a corporation occurs on the date that a majority of members of the corporation’s board of directors is replaced during any twelve month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors prior to the date of the appointment or election, provided that for purposes of this paragraph (d), the term corporation refers solely to the relevant corporation identified in Section 9.7(a) for which no other corporation is a majority shareholder for purposes of Section 9.7(a). In the absence of an event described in this Section 9.7(d) a change in the effective control of a corporation will not have occurred. A change in effective control may also occur in any transaction in which either of the two corporations involved in the transaction has a change in the ownership of such corporation as described in Section 9.7(c) or a change in the ownership of a substantial portion of the assets of such corporation as described in Section 9.7(e).
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(e)
|
Change in the ownership of a substantial portion of a corporation’s assets.
A change in the ownership of a substantial portion of a corporation’s assets occurs on the date that any one person, or more than one person acting as a group (as determined in accordance with rules similar to those set forth in Section 9.7(d)), acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than eighty percent (80%) of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the corporation or the value of the assets being disposed of determined without regard to any liabilities associated with such assets. There is no Change in Control event under this Section 9.7(e) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer. A transfer of assets by a corporation is not treated as a change in ownership of such assets if the assets are transferred to (i) a shareholder of the corporation (immediately before the asset transfer) in exchange for or with respect to its stock, (ii) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the corporation, (iii) a person, or more than one person acting as a
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9.8
|
Permissible Delays in Payment.
Distributions may be delayed beyond the date payment would otherwise occur in accordance with the provisions of Articles 8 and 9 in any of the following circumstances as long as the Employer treats all payments to similarly situated Participants on a reasonably consistent basis.
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(a)
|
The Employer may delay payment if it reasonably anticipates that its deduction with respect to such payment would be limited or eliminated by the application of Code Section 162(m). Payment must be made during the Participant’s first taxable year in which the Employer reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year the deduction of such payment will not be barred by the application of Code Section 162(m) or during the period beginning with the Participant’s Separation from Service and ending on the later of the last day of the Employer’s taxable year in which the Participant separates from service or the 15th day of the third month following the Participant’s Separation from Service. If a scheduled payment to a Participant is delayed in accordance with this Section 9.8(a), all scheduled payments to the Participant that could be delayed in accordance with this Section 9.8(a) will also be delayed.
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(b)
|
The Employer may also delay payment if it reasonably anticipates that the making of the payment will violate federal securities laws or other applicable laws provided payment is made at the earliest date on which the Employer reasonably anticipates that the making of the payment will not cause such violation.
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(c)
|
The Employer reserves the right to amend the Plan to provide for a delay in payment upon such other events and conditions as the Secretary of the Treasury may prescribe in generally applicable guidance published in the Internal Revenue Bulletin.
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9.9
|
Permitted Acceleration of Payment
.
The Employer may permit acceleration of the time or schedule of any payment or amount scheduled to be paid pursuant to a payment under the Plan provided such acceleration would be permitted by the provisions of Reg. Sec. 1.409A-3(j)(4), including the following events:
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(a)
|
Domestic Relations Order.
A payment may be accelerated if such payment is made to an alternate payee pursuant to and following the receipt and qualification of a domestic relations order as defined in Code Section 414(p).
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(b)
|
Compliance with Ethics Agreements and Legal Requirements.
A payment may be accelerated as may be necessary to comply with ethics agreements with the Federal government or as may be reasonably necessary to avoid the violation of Federal, state, local or foreign ethics law or conflicts of laws, in accordance with the requirements of Code Section 409A.
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(c)
|
De Minimis Amounts.
A payment will be accelerated if (i) the amount of the payment is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), (ii) at the time the payment is made the amount constitutes the Participant’s entire interest under the Plan and all other plans that are aggregated with the Plan under Reg. Sec. 1.409A-1(c)(2).
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(d)
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FICA Tax.
A payment may be accelerated to the extent required to pay the Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2) of the Code with respect to compensation deferred under the Plan (the “FICA Amount”). Additionally, a payment may be accelerated to pay the income tax on wages imposed under Code Section 3401 of the Code on the FICA Amount and to pay the additional income tax at source on wages attributable to the pyramiding Code Section 3401 wages and taxes. The total payment under this subsection (d) may not exceed the aggregate of the FICA Amount and the income tax withholding related to the FICA Amount.
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(e)
|
Section 409A Additional Tax.
A payment may be accelerated if the Plan fails to meet the requirements of Code Section 409A;
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(f)
|
Offset.
A payment may be accelerated in the Employer’s discretion as satisfaction of a debt of the Participant to the Employer, where such debt is incurred in the ordinary course of the service relationship between the Participant and the Employer, the entire amount of the reduction in any of the Employer’s taxable years does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.
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(g)
|
Other Events.
A payment may be accelerated in the Administrator’s discretion in connection with such other events and conditions as permitted by Code Section 409A.
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10.1
|
Amendment by Plan Sponsor.
The Plan Sponsor reserves the right to amend the Plan (for itself and each Employer) through action of its Board of Directors. No amendment can directly or indirectly deprive any current or former Participant or Beneficiary of all or any portion of his Account which had accrued and vested prior to the amendment.
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10.2
|
Plan Termination Following Change in Control or Corporate Dissolution.
If so elected by the Plan Sponsor in 11.01 of the Adoption Agreement, the Plan Sponsor reserves the right to terminate the Plan and distribute all amounts credited to all Participant Accounts within the 30 days preceding or the twelve months following a Change in Control as determined in accordance with the rules set forth in Section 9.7. For this purpose, the Plan will be treated as terminated only if all agreements, methods, programs and other arrangements sponsored by the Related Employer immediately after the Change in Control which are treated as a single plan under Reg. Sec. 1.409A-1(c)(2) are also terminated so that all participants under the Plan and all similar arrangements are required to receive all amounts deferred under the terminated arrangements within twelve months of the date the Plan Sponsor irrevocably takes all necessary action to terminate the arrangements. In addition, the Plan Sponsor reserves the right to terminate the Plan within twelve months of a corporate dissolution taxed under Code Section 331 or with the approval of a bankruptcy court pursuant to 11 U. S. C. Section 503(b)(1)(A) provided that amounts deferred under the Plan are included in the gross incomes of Participants in the latest of (a) the calendar year in which the termination and liquidation occurs, (b) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture, or (c) the first calendar year in which payment is administratively practicable.
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10.3
|
Other Plan Terminations.
The Plan Sponsor retains the discretion to terminate the Plan if (a) all arrangements sponsored by the Plan Sponsor that would be aggregated with any terminated arrangement under Code Section 409A and Reg. Sec. 1.409A-1(c)(2) are terminated, (b) no payments other than payments that would be payable under the terms of the arrangements if the termination had not occurred are made within twelve months of the termination of the arrangements, (c) all payments are made within twenty-four months of the date the Plan Sponsor takes all necessary action to irrevocably terminate and liquidate the arrangements, (d) the Plan Sponsor does not adopt a new arrangement that would be aggregated with any terminated arrangement under Code Section 409A and the regulations thereunder at any time within the three year period following the date of termination of the arrangement, and (e) the
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11.1
|
Establishment of Trust.
The Plan Sponsor may but is not required to establish a trust to hold amounts which the Plan Sponsor may contribute from time to time to correspond to some or all amounts credited to Participants under Section 6.2. If the Plan Sponsor elects to establish a trust in accordance with Section 10.01 of the Adoption Agreement, the provisions of Sections 11.2 and 11.3 shall become operative.
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11.2
|
Grantor Trust.
Any trust established by the Plan Sponsor shall be between the Plan Sponsor and a trustee pursuant to a separate written agreement under which assets are held, administered and managed, subject to the claims of the Plan Sponsor’s creditors in the event of the Plan Sponsor’s insolvency. The trust is intended to be treated as a grantor trust under the Code, and the establishment of the trust shall not cause the Participant to realize current income on amounts contributed thereto. The Plan Sponsor must notify the trustee in the event of a bankruptcy or insolvency.
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11.3
|
Investment of Trust Funds.
Any amounts contributed to the trust by the Plan Sponsor shall be invested by the trustee in accordance with the provisions of the trust and the instructions of the Administrator. Trust investments need not reflect the hypothetical investments selected by Participants under Section 7.1 for the purpose of adjusting Accounts and the earnings or investment results of the trust need not affect the hypothetical investment adjustments to Participant Accounts under the Plan.
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12.1
|
Powers and Responsibilities of the Administrator.
The Administrator has the full power and the full responsibility to administer the Plan in all of its details, subject, however, to the applicable requirements of ERISA. The Administrator’s powers and responsibilities include, but are not limited to, the following:
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(a)
|
To make and enforce such rules and procedures as it deems necessary or proper for the efficient administration of the Plan;
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(b)
|
To interpret the Plan, its interpretation thereof to be final, except as provided in Section 12.2, on all persons claiming benefits under the Plan;
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(c)
|
To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;
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(d)
|
To administer the claims and review procedures specified in Section 12.2;
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(e)
|
To compute the amount of benefits which will be payable to any Participant, former Participant or Beneficiary in accordance with the provisions of the Plan;
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(f)
|
To determine the person or persons to whom such benefits will be paid;
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(g)
|
To authorize the payment of benefits;
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(h)
|
To comply with the reporting and disclosure requirements of Part 1 of Subtitle B of Title I of ERISA;
|
(i)
|
To appoint such agents, counsel, accountants, and consultants as may be required to assist in administering the Plan;
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(j)
|
By written instrument, to allocate and delegate its responsibilities, including the formation of an Administrative Committee to administer the Plan.
|
12.2
|
Claims and Review Procedures.
|
(a)
|
Claims Procedure.
|
(b)
|
Review Procedure.
|
12.3
|
Plan Administrative Costs.
All reasonable costs and expenses (including legal, accounting, and employee communication fees) incurred by the Administrator in administering the Plan shall be paid by the Plan to the extent not paid by the Employer.
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13.1
|
Unsecured General Creditor of the Employer.
Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Employer. For purposes of the payment of benefits under the Plan, any and all of the Employer’s assets shall be, and shall remain, the general, unpledged, unrestricted assets of the Employer. Each Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.
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13.2
|
Employer’s Liability
.
Each Employer’s liability for the payment of benefits under the Plan shall be defined only by the Plan and by the deferral agreements entered into between a Participant and the Employer. An Employer shall have no obligation or liability to a Participant under the Plan except as provided by the Plan and a deferral agreement or agreements. An Employer shall have no liability to Participants employed by other Employers.
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13.3
|
Limitation of Rights
.
Neither the establishment of the Plan, nor any amendment thereof, nor the creation of any fund or account, nor the payment of any benefits, will be construed as giving to the Participant or any other person any legal or equitable right against the Employer, the Plan or the Administrator, except as provided herein; and in no event will the terms of employment or service of the Participant be modified or in any way affected hereby.
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13.4
|
Anti-Assignment
.
Except as may be necessary to fulfill a domestic relations order within the meaning of Code Section 414(p), none of the benefits or rights of a Participant or any Beneficiary of a Participant shall be subject to the claim of any creditor. In particular, to the fullest extent permitted by law, all such benefits and rights shall be free from attachment, garnishment, or any other legal or equitable process available to any creditor of the Participant and his or her Beneficiary. Neither the Participant nor his or her Beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber, or assign any of the payments which he or she may expect to receive, contingently or otherwise, under the Plan, except the right to designate a Beneficiary to receive death benefits provided hereunder. Notwithstanding the preceding, the benefit payable from a Participant’s Account may be reduced, at the discretion of the administrator, to satisfy any debt or liability to the Employer.
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13.5
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Facility of Payment
.
If the Administrator determines, on the basis of medical reports or other evidence satisfactory to the Administrator, that the recipient of
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13.6
|
Notices.
Any notice or other communication to the Employer or Administrator in connection with the Plan shall be deemed delivered in writing if addressed to the Plan Sponsor at the address specified in Section 1.03 of the Adoption Agreement and if either actually delivered at said address or, in the case or a letter, 5 business days shall have elapsed after the same shall have been deposited in the United States mails, first-class postage prepaid and registered or certified.
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13.7
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Tax Withholding
.
If the Employer concludes that tax is owing with respect to any deferral or payment hereunder, the Employer shall withhold such amounts from any payments due the Participant or from amounts deferred, as permitted by law, or otherwise make appropriate arrangements with the Participant or his Beneficiary for satisfaction of such obligation. Tax, for purposes of this Section 13.7 means any federal, state, local or any other governmental income tax, employment or payroll tax, excise tax, or any other tax or assessment owing with respect to amounts deferred, any earnings thereon, and any payments made to Participants under the Plan.
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13.8
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Indemnification.
(a) Each Indemnitee (as defined in Section 13.8(e)) shall be indemnified and held harmless by the Employer for all actions taken by him and for all failures to take action (regardless of the date of any such action or failure to take action), to the fullest extent permitted by the law of the jurisdiction in which the Employer is incorporated, against all expense, liability, and loss (including, without limitation, attorneys' fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding (as defined in Subsection (e)). No indemnification pursuant to this Section shall be made, however, in any case where (1) the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness or (2) there is a settlement to which the Employer does not consent.
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(b)
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The right to indemnification provided in this Section shall include the right to have the expenses incurred by the Indemnitee in defending any
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(c)
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Indemnification pursuant to this Section shall continue as to an Indemnitee who has ceased to be such and shall inure to the benefit of his heirs, executors, and administrators. The Employer agrees that the undertakings made in this Section shall be binding on its successors or assigns and shall survive the termination, amendment or restatement of the Plan.
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(d)
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The foregoing right to indemnification shall be in addition to such other rights as the Indemnitee may enjoy as a matter of law or by reason of insurance coverage of any kind and is in addition to and not in lieu of any rights to indemnification to which the Indemnitee may be entitled pursuant to the by-laws of the Employer.
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(e)
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For the purposes of this Section, the following definitions shall apply:
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(1)
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"Indemnitee" shall mean each person serving as an Administrator (or any other person who is an employee, director, or officer of the Employer) who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding, by reason of the fact that he is or was performing administrative functions under the Plan.
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(2)
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"Proceeding" shall mean any threatened, pending, or completed action, suit, or proceeding (including, without limitation, an action, suit, or proceeding by or in the right of the Employer), whether civil, criminal, administrative, investigative, or through arbitration.
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13.9
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Successors
.
The provisions of the Plan shall bind and inure to the benefit of the Plan Sponsor, the Employer and their successors and assigns and the Participant and the Participant’s designated Beneficiaries.
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13.10
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Disclaimer.
It is the Plan Sponsor’s intention that the Plan comply with the requirements of Code Section 409A. Neither the Plan Sponsor nor the Employer shall have any liability to any Participant should any provision of the
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13.11
|
Governing Law
.
The Plan will be construed, administered and enforced according to the laws of the State specified by the Plan Sponsor in Section 12.01 of the Adoption Agreement.
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Subsidiary Name
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Jurisdiction of Incorporation
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Altivity Packaging Grupo, S. de R.L. de C.V.
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Mexico
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Altivity Packaging Operatora, S. de R.L. de C.V.
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Mexico
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Altivity Packaging Servicios, S. de R.L. de C.V.
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Mexico
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Bluegrass Container Canada Holdings, LLC
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Delaware
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Bluegrass Flexible Packaging Company, LLC
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Delaware
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Bluegrass Labels Company, LLC
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Delaware
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Bluegrass Multiwall Bag Company, LLC
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Delaware
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Field Container Queretaro (USA), L.L.C.
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Delaware
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Golden Equities, Inc.
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Colorado
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Golden Technologies Company, Inc.
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Colorado
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Graphic Hung Hing Packaging (Shangai) Co., Ltd.
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China
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Graphic Packaging Corporation
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Delaware
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Graphic Packaging Flexible Canada Inc.
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Canada
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Graphic Packaging Flexible Holdings, LLC
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Delaware
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Graphic Packaging Holding Company
|
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Delaware
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Graphic Packaging International (Cyprus) Limited
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Cyprus
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Graphic Packaging International Australia Pty Limited
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Australia
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Graphic Packaging International Canada Corporation
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Canada
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Graphic Packaging International do Brasil — Embalagens Ltda.
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Brazil
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Graphic Packaging International Enterprises, Inc.
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Delaware
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Graphic Packaging International Europe S.A.
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Belgium
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Graphic Packaging International France
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France
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Graphic Packaging International GmbH
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Germany
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Graphic Packaging International Holding Company
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Delaware
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Graphic Packaging International Holding Sweden AB
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Sweden
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Graphic Packaging International Japan Ltd.
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Japan
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Graphic Packaging International Limited
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UK
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Graphic Packaging International Mexicana, S. de R.L. de C.V.
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Mexico
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Graphic Packaging International Philanthropic Fund
|
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Delaware
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Graphic Packaging International S.p.A.
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Italy
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Graphic Packaging International Spain, S.A.
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Spain
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Graphic Packaging International, Inc.
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Delaware
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Handschy Holdings, LLC
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Delaware
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Handschy Industries, LLC
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Delaware
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Kalamazoo Valley Group Partnership
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Michigan
(1)
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New Materials Limited
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UK
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Rengo Riverwood Packaging, Ltd.
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Japan
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Riverdale Industries, LLC
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Delaware
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Riverwood International Pension Trustee Company Limited
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UK
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Slevin South Company
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|
Arkansas
|
(1)
|
Jurisdiction of partnership.
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(a)
|
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)
|
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)
|
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)
|
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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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ David W. Scheible
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David W. Scheible,
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President and Chief Executive Officer
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|
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(Principal Executive Officer)
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|
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February 23, 2012
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(a)
|
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)
|
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)
|
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)
|
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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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Daniel J. Blount
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Daniel J. Blount
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Senior Vice President and Chief Financial Officer
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(Principal Financial Officer)
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February 23, 2012
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|
|
/s/ David W. Scheible
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Name: David W. Scheible,
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Title: President and Chief Executive Officer
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February 23, 2012
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/s/ Daniel J. Blount
|
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|
Name: Daniel J. Blount
|
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Title: Senior Vice President and Chief Financial Officer
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February 23, 2012
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