|
þ
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ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
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For the fiscal year ended December 31,
2017
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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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1500 Riveredge Parkway, Suite 100, Atlanta, Georgia
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30328
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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 Purchase Rights
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New York Stock Exchange
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Associated with the Common Stock
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Large accelerated filer
þ
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Accelerated filer
o
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Smaller reporting company
o
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|||
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||||
Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Emerging growth company
o
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ITEM 1.
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BUSINESS
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•
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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, teas, 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;
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•
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household products, including dishwasher and laundry detergent, health care and beauty aids, and tissues and papers; and
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•
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air filter frames.
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•
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beverage multiple-packaging — multi-packs for beer, soft drinks, energy drinks, teas, 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 — dispensing features, pour spouts and sealable liners.
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Location
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Product
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# of Machines
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2017 Net Tons Produced
|
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West Monroe, LA
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CUK
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2
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827,147
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Macon, GA
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CUK
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2
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695,577
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Kalamazoo, MI
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CRB
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2
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483,848
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Battle Creek, MI
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CRB
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2
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210,307
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Middletown, OH
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CRB
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1
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172,686
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Santa Clara, CA
(a)
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CRB
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1
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132,124
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East Angus, Québec
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CRB
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1
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93,012
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West Monroe, LA
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Corrugated Medium
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1
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124,322
|
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(a)
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Mill closed December 1, 2017 and is classified as an Asset Held for Sale.
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Item 1A.
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RISK FACTORS
|
•
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Compliance with and enforcement of environmental, health and safety and labor laws and other regulations of the foreign countries in which the Company operates;
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•
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Export compliance;
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•
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Imposition or increase of withholding and other taxes on remittances and other payments by foreign subsidiaries; and
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•
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Imposition of new or increases in capital investment requirements and other financing requirements by foreign governments.
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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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Location
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Related Products or Use of Facility
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Mills:
|
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Battle Creek, MI
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CRB
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East Angus, Québec
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CRB
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Kalamazoo, MI
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CRB
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Macon, GA
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CUK
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Middletown, OH
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CRB
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Santa Clara, CA
(a)
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CRB
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West Monroe, LA
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CUK; Corrugated Medium; Research and Development
|
|
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Other:
|
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Atlanta, GA
(b)
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Headquarters, Research and Development, Packaging Machinery and Design
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Concord, NH
(b)
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Research and Development, Design Center
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Crosby, MN
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Packaging Machinery Engineering, Design and Manufacturing
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Louisville, CO
(b)
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Research and Development
|
|
|
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North American Converting Plants:
|
|
International Converting Plants:
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Atlanta, GA
(b)
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New Albany, IN
(c)
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Auckland, New Zealand
(b)
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Carol Stream, IL
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Newton, IA
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Bremen, Germany
(b)
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Centralia, IL
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North Portland, OR
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Bristol, United Kingdom
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Charlotte, NC
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Oroville, CA
(b)
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Coalville, United Kingdom
(b)
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Cobourg, Ontario
(b)
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Pacific, MO
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Gateshead, United Kingdom
(b)
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Elk Grove, IL
(b)(c)
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Perry, GA
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Hoogerheide, Netherlands
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Fort Smith, AR
(c)
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Queretaro, Mexico
(b)
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Newcastle Upon Tyne, United Kingdom
(b)
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Gordonsville, TN
(b)
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Solon, OH
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Igualada, Spain
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Gresham, OR
(b)
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Staunton, VA
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Jundiai, Sao Paulo, Brazil
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Hamel, MN
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St.-Hyacinthe, Québec
(b)
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Leeds, United Kingdom
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Irvine, CA
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Tijuana, Mexico
(b)
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Masnieres, France
(b)
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Kalamazoo, MI
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Tuscaloosa, AL
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Melbourne, Australia
(b)
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Kendallville, IN
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Vancouver, WA
(b)
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Miliaño, Spain
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Lawrenceburg, TN
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Valley Forge, PA
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Portlaoise, Ireland
(b)
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Lumberton, NC
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Wayne, NJ
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Requejada, Spain
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Marion, OH
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Wausau, WI
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Sneek, Netherlands
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Menasha, WI
(d)
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West Monroe, LA
(c)
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Sydney, Australia
(b)
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Mississauga, Ontario
(b)(c)
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Xenia, OH
(b)
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Mitchell, SD
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Winnipeg, Manitoba
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Monterrey, Mexico
(b)
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(a)
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Mill closed December 1, 2017 and is classified as an Asset Held for Sale.
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(b)
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Leased facility.
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(c)
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Multiple facilities in this location.
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(d)
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Facility closed during 2016 and is classified as an Asset Held for Sale.
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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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12/31/2012
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12/31/2013
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12/31/2014
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12/31/2015
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12/31/2016
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12/31/2017
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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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148.61
|
|
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$
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210.84
|
|
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$
|
201.51
|
|
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$
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199.40
|
|
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$
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252.40
|
|
S&P 500 Stock Index
|
100.00
|
|
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132.39
|
|
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150.51
|
|
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152.59
|
|
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170.84
|
|
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208.14
|
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||||||
Dow Jones U.S. Container & Packaging Index
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100.00
|
|
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140.71
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161.42
|
|
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154.47
|
|
|
183.90
|
|
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218.88
|
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ITEM 6.
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SELECTED FINANCIAL DATA
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|
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Year Ended December 31,
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|||||||||||||
In millions, except per share amounts
|
2017
|
2016
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2015
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2014
|
2013
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
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||||||||||
Net Sales
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
$
|
4,160.2
|
|
$
|
4,240.5
|
|
$
|
4,478.1
|
|
Income from Operations
|
342.7
|
|
396.0
|
|
427.1
|
|
227.8
|
|
341.6
|
|
|||||
Net Income
|
300.2
|
|
228.0
|
|
230.1
|
|
89.0
|
|
146.7
|
|
|||||
Net Income (Loss) Attributable to Noncontrolling Interests
|
—
|
|
—
|
|
—
|
|
0.7
|
|
(0.1
|
)
|
|||||
Net Income Attributable Graphic Packaging Holding Company
|
300.2
|
|
228.0
|
|
230.1
|
|
89.7
|
|
146.6
|
|
|||||
|
|
|
|
|
|
||||||||||
Net Income Attributable to Graphic Packaging Holding Company Per Share Basis:
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.97
|
|
$
|
0.71
|
|
$
|
0.70
|
|
$
|
0.27
|
|
$
|
0.42
|
|
Diluted
|
$
|
0.96
|
|
$
|
0.71
|
|
$
|
0.70
|
|
$
|
0.27
|
|
$
|
0.42
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
||||||||||
(as of period end)
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
67.4
|
|
$
|
59.1
|
|
$
|
54.9
|
|
$
|
81.6
|
|
$
|
52.2
|
|
Total Assets
|
4,863.0
|
|
4,603.4
|
|
4,256.1
|
|
4,137.6
|
|
4,373.1
|
|
|||||
Total Debt
|
2,274.5
|
|
2,151.9
|
|
1,875.5
|
|
1,957.7
|
|
2,238.3
|
|
|||||
Total Equity
|
1,291.9
|
|
1,056.5
|
|
1,101.7
|
|
1,012.3
|
|
1,062.3
|
|
|||||
|
|
|
|
|
|
||||||||||
Additional Data:
|
|
|
|
|
|
||||||||||
Depreciation and Amortization
|
$
|
330.3
|
|
$
|
299.3
|
|
$
|
280.5
|
|
$
|
270.0
|
|
$
|
277.4
|
|
Capital Spending, including Packaging Machinery
|
260.1
|
|
294.6
|
|
244.1
|
|
201.4
|
|
209.2
|
|
|||||
Dividends Declared per Share
|
0.30
|
|
0.225
|
|
0.20
|
|
—
|
|
—
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
•
|
Net Sales in
2017
increased
by
$105.6 million
or
2.5%
, to
$4,403.7 million
from
$4,298.1 million
in
2016
primarily due to the acquisitions discussed below and increased volume, partially offset by lower selling prices and unfavorable foreign currency exchange rates.
|
•
|
Income from Operations in
2017
decreased
by
$53.3 million
or
13.5%
, to
$342.7 million
from
$396.0 million
in
2016
due to higher inflation including secondary fiber, the lower selling prices and the unfavorable foreign currency exchange rates. These decreases were partially offset by the acquisitions and cost savings through continuous improvement and other programs.
|
•
|
On December 1, 2017, the Company acquired the assets of Seydaco Packaging Corp. and its affiliates National Carton and Coating Co., and Groupe Ecco Boites Pliantes Ltée (collectively, "Seydaco"), a folding carton producer focused on the foodservice, food, personal care, and household goods markets. The acquisition includes three folding carton facilities located in Mississauga, Ontario, St.-Hyacinthe, Québec, and Xenia, Ohio.
|
•
|
On December 1, 2017, the Company closed its coated recycled paperboard mill in Santa Clara, California. This decision was made as a result of a thorough assessment of the facility's manufacturing capabilities and associated costs in the context of the Company's overall mill operating capabilities and cost structure.
|
•
|
On October 24, 2017, the Company announced that it would combine its business with IP's North American Consumer Packaging business. The Company will own 79.5% of the subsidiary that owns GPI and will be the sole operator of such subsidiary and the business of GPI. See Note 19 in the Notes to Consolidated Financial Statements included herein under “Item 8. Financial Statements and Supplementary Data."
|
•
|
On October 4, 2017, the Company acquired Norgraft Packaging, S.A. ("Norgraft"), a leading folding carton producer in Spain focused on the food and household goods markets. The acquisition includes two folding carton facilities located in Miliaño and Requejada, Spain.
|
•
|
On July 10, 2017, the Company acquired substantially all the assets of Carton Craft Corporation and its affiliate Lithocraft, Inc (collectively, "Carton Craft"). The acquisition includes two folding carton facilities located in New Albany, Indiana, focused on the production of paperboard based air filter frames and folding cartons.
|
•
|
During 2016, the Company acquired G-Box, S.A. de C.V., ("G-Box"), Walter G. Anderson, Inc., ("WG Anderson"), Metro Packaging & Imaging, Inc. ("Metro"), and Colorpak Limited ("Colorpak"). These transactions are referred to collectively as the "2016 Acquisitions."
|
•
|
On January 10, 2017, the Company's board of directors authorized an additional share repurchase program to allow the Company to purchase up to $250 million of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the "2017 share repurchase program"). The original $250 million share repurchase program was authorized on February 4, 2015 (the "2015 share repurchase program"). During 2017, the Company repurchased
4.5 million
shares, or approximately
$58 million
, at an aggregate average price of
$13.08
, including
1.4 million
shares repurchased under the 2015 share repurchase program thereby completing that plan. At
December 31, 2017
, the Company had approximately
$210 million
remaining under the 2017 share repurchase program.
|
•
|
During
2017
, the Company declared and paid cash dividends of
$93.1 million
and
$93.4 million
, respectively.
|
|
Year Ended December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
$
|
4,160.2
|
|
Income from Operations
|
$
|
342.7
|
|
$
|
396.0
|
|
$
|
427.1
|
|
Interest Expense, Net
|
(89.7
|
)
|
(76.6
|
)
|
(67.8
|
)
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
$
|
253.0
|
|
$
|
319.4
|
|
$
|
359.3
|
|
Income Tax Benefit (Expense)
|
45.5
|
|
(93.2
|
)
|
(130.4
|
)
|
|||
Income before Equity Income of Unconsolidated Entity
|
$
|
298.5
|
|
$
|
226.2
|
|
$
|
228.9
|
|
Equity Income of Unconsolidated Entity
|
1.7
|
|
1.8
|
|
1.2
|
|
|||
Net Income
|
$
|
300.2
|
|
$
|
228.0
|
|
$
|
230.1
|
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||
|
|
Variances
|
|
|
|
|||||||||||||||
In millions
|
2016
|
Price
|
Volume/Mix
|
Foreign Exchange
|
2017
|
Increase
|
Percent Change
|
|||||||||||||
Consolidated
|
$
|
4,298.1
|
|
$
|
(27.1
|
)
|
$
|
135.6
|
|
$
|
(2.9
|
)
|
$
|
4,403.7
|
|
$
|
105.6
|
|
2.5
|
%
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||||||||
|
|
Variances
|
|
|
|
|||||||||||||||||||||
In millions
|
2016
|
Price
|
Volume/Mix
|
Inflation
|
Foreign Exchange
|
Other
(a)
|
2017
|
Decrease
|
Percent Change
|
|||||||||||||||||
Consolidated
|
$
|
396.0
|
|
$
|
(27.1
|
)
|
$
|
(0.8
|
)
|
$
|
(95.8
|
)
|
$
|
(3.0
|
)
|
$
|
73.4
|
|
$
|
342.7
|
|
$
|
(53.3
|
)
|
(13.5
|
)%
|
(a)
|
Includes the Company’s cost reduction initiatives, sales of assets, expenses related to acquisitions, integration activities, and shutdown costs.
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||
|
|
Variances
|
|
|
|
|||||||||||||||
In millions
|
2015
|
Price
|
Volume/Mix
|
Foreign Exchange
|
2016
|
Increase
|
Percent Change
|
|||||||||||||
Consolidated
|
$
|
4,160.2
|
|
$
|
(33.8
|
)
|
$
|
219.2
|
|
$
|
(47.5
|
)
|
$
|
4,298.1
|
|
$
|
137.9
|
|
3.3
|
%
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||||||||
|
|
Variances
|
|
|
|
|||||||||||||||||||||
In millions
|
2015
|
Price
|
Volume/Mix
|
Inflation
|
Foreign Exchange
|
Other
(a)
|
2016
|
Decrease
|
Percent Change
|
|||||||||||||||||
Consolidated
|
$
|
427.1
|
|
$
|
(33.8
|
)
|
$
|
(18.7
|
)
|
$
|
(25.0
|
)
|
$
|
(19.1
|
)
|
$
|
65.5
|
|
$
|
396.0
|
|
$
|
(31.1
|
)
|
(7.3
|
)%
|
(a)
|
Includes the Company’s cost reduction initiatives, sales of assets and expenses related to acquisitions, integration activities, and shutdown costs.
|
|
Year Ended December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
NET SALES:
|
|
|
|
||||||
Paperboard Mills
|
$
|
399.7
|
|
$
|
394.7
|
|
$
|
480.5
|
|
Americas Paperboard Packaging
|
3,243.6
|
|
3,193.1
|
|
3,012.1
|
|
|||
Europe Paperboard Packaging
|
593.1
|
|
569.9
|
|
603.9
|
|
|||
Corporate/Other/Eliminations
|
167.3
|
|
140.4
|
|
63.7
|
|
|||
Total
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
$
|
4,160.2
|
|
|
|
|
|
||||||
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||||
Paperboard Mills
|
$
|
(35.0
|
)
|
$
|
(3.7
|
)
|
$
|
17.1
|
|
Americas Paperboard Packaging
|
358.2
|
|
409.0
|
|
395.2
|
|
|||
Europe Paperboard Packaging
|
37.3
|
|
25.4
|
|
40.8
|
|
|||
Corporate and Other
(a)
|
(17.8
|
)
|
(34.7
|
)
|
(26.0
|
)
|
|||
Total
|
$
|
342.7
|
|
$
|
396.0
|
|
$
|
427.1
|
|
(a)
|
Includes expenses related to acquisitions, integration activities and shutdown costs (excluding accelerated depreciation).
|
|
Years Ended December 31,
|
|||||
In millions
|
2017
|
2016
|
||||
Net Cash
Provided by
Operating Activities
|
$
|
516.2
|
|
$
|
641.4
|
|
Net Cash
Used in
Investing Activities
|
$
|
(440.6
|
)
|
$
|
(632.5
|
)
|
Net Cash
Used In
Financing Activities
|
$
|
(69.8
|
)
|
$
|
(3.1
|
)
|
|
Payments Due by Period
|
||||||||||||||
In millions
|
Total
|
Less than 1 Year
|
1-3 Years
|
3-5 Years
|
More than 5 Years
|
||||||||||
Debt Obligations
|
$
|
2,257.0
|
|
$
|
59.1
|
|
$
|
1,215.5
|
|
$
|
676.0
|
|
$
|
306.4
|
|
Operating Leases
|
171.4
|
|
42.9
|
|
60.5
|
|
41.7
|
|
26.3
|
|
|||||
Capital Leases
|
41.1
|
|
3.7
|
|
6.8
|
|
6.1
|
|
24.5
|
|
|||||
Interest Payable
|
322.7
|
|
102.4
|
|
134.1
|
|
60.4
|
|
25.8
|
|
|||||
Purchase Obligations
(a)
|
667.7
|
|
151.8
|
|
129.4
|
|
75.9
|
|
310.6
|
|
|||||
Total Contractual Obligations
(b)
|
$
|
3,459.9
|
|
$
|
359.9
|
|
$
|
1,546.3
|
|
$
|
860.1
|
|
$
|
693.6
|
|
(b)
|
Certain amounts 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 expense between $430 million and $450 million, excluding approximately $6 million of pension amortization.
|
•
|
Interest expense of $125 million to $135 million, including approximately $6 million to $7 million of non-cash interest expense associated with amortization of debt issuance costs.
|
•
|
Pension plan contributions of $5 million to $10 million.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
|
Expected Maturity Date
|
|||||||||||||||||||||||
In millions
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
Fair Value
|
||||||||||||||||
Total Debt
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Rate
|
$
|
50.0
|
|
$
|
200.8
|
|
$
|
1.6
|
|
$
|
425.4
|
|
$
|
250.6
|
|
$
|
306.4
|
|
$
|
1,234.8
|
|
$
|
1,284.0
|
|
Average Interest Rate
|
2.66
|
%
|
2.65
|
%
|
1.08
|
%
|
4.75
|
%
|
4.87
|
%
|
4.06
|
%
|
|
|
|
|
||||||||
Variable Rate
|
$
|
—
|
|
$
|
994.0
|
|
$
|
19.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,013.1
|
|
$
|
1,015.1
|
|
Average Swap Rate is .8% — 1.4%
|
—
|
|
LIBOR + Spread
|
|
LIBOR + Spread
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
Expected Maturity Date
|
||||||||||||||||||||
In millions
|
2018
|
2019
|
2020
|
2021
|
2022
|
Thereafter
|
Total
|
||||||||||||||
Notional
|
$
|
250.0
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
250.0
|
|
Average Pay Rate
|
1.16
|
%
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Average Receive Rate
|
1-Month LIBOR
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
December 31, 2017
|
|||||
In millions
|
Contract Amount
|
Fair Value
|
||||
FORWARD EXCHANGE AGREEMENTS:
|
|
|
||||
Receive $US/Pay Yen
|
$
|
16.0
|
|
$
|
0.2
|
|
Weighted average contractual exchange rate
|
110.19
|
|
|
|||
Receive $US/Pay Euro
|
$
|
30.7
|
|
$
|
(0.4
|
)
|
Weighted average contractual exchange rate
|
1.20
|
|
|
|||
Receive $US/Pay GBP
|
$
|
19.4
|
|
$
|
(0.3
|
)
|
Weighted average contractual exchange rate
|
1.34
|
|
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
GRAPHIC PACKAGING HOLDING COMPANY
|
|
Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended December 31, 2017
|
|
|
Year Ended December 31,
|
||||||||
In millions, except per share amounts
|
2017
|
2016
|
2015
|
||||||
Net Sales
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
$
|
4,160.2
|
|
Cost of Sales
|
3,684.2
|
|
3,506.2
|
|
3,371.1
|
|
|||
Selling, General and Administrative
|
342.7
|
|
355.7
|
|
347.7
|
|
|||
Other Expense (Income), Net
|
3.0
|
|
3.1
|
|
(7.7
|
)
|
|||
Business Combinations and Shutdown and Other Special Charges, Net
|
31.1
|
|
37.1
|
|
22.0
|
|
|||
Income from Operations
|
342.7
|
|
396.0
|
|
427.1
|
|
|||
Interest Expense, Net
|
(89.7
|
)
|
(76.6
|
)
|
(67.8
|
)
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
253.0
|
|
319.4
|
|
359.3
|
|
|||
Income Tax Benefit (Expense)
|
45.5
|
|
(93.2
|
)
|
(130.4
|
)
|
|||
Income before Equity Income of Unconsolidated Entity
|
298.5
|
|
226.2
|
|
228.9
|
|
|||
Equity Income of Unconsolidated Entity
|
1.7
|
|
1.8
|
|
1.2
|
|
|||
Net Income
|
$
|
300.2
|
|
$
|
228.0
|
|
$
|
230.1
|
|
|
|
|
|
||||||
Net Income Per Share — Basic
|
$
|
0.97
|
|
$
|
0.71
|
|
$
|
0.70
|
|
Net Income Per Share — Diluted
|
$
|
0.96
|
|
$
|
0.71
|
|
$
|
0.70
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2017
|
|
2016
|
|
2015
|
||||||
Net Income
|
$
|
300.2
|
|
|
$
|
228.0
|
|
|
$
|
230.1
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
||||||
Derivative Instruments
|
(4.9
|
)
|
|
13.0
|
|
|
(0.7
|
)
|
|||
Pension and Postretirement Benefit Plans
|
8.8
|
|
|
4.0
|
|
|
26.8
|
|
|||
Currency Translation Adjustment
|
44.9
|
|
|
(58.9
|
)
|
|
(37.2
|
)
|
|||
Total Other Comprehensive Income (Loss), Net of Tax
|
48.8
|
|
|
(41.9
|
)
|
|
(11.1
|
)
|
|||
Total Comprehensive Income
|
$
|
349.0
|
|
|
$
|
186.1
|
|
|
$
|
219.0
|
|
|
December 31,
|
|||||
In millions, except share and per share amounts
|
2017
|
2016
|
||||
ASSETS
|
|
|
||||
Current Assets:
|
|
|
||||
Cash and Cash Equivalents
|
$
|
67.4
|
|
$
|
59.1
|
|
Receivables, Net
|
422.8
|
|
426.8
|
|
||
Inventories, Net
|
634.0
|
|
582.9
|
|
||
Other Current Assets
|
45.7
|
|
46.1
|
|
||
Total Current Assets
|
1,169.9
|
|
1,114.9
|
|
||
Property, Plant and Equipment, Net
|
1,867.2
|
|
1,751.9
|
|
||
Goodwill
|
1,323.0
|
|
1,260.3
|
|
||
Intangible Assets, Net
|
436.5
|
|
445.3
|
|
||
Other Assets
|
66.4
|
|
31.0
|
|
||
Total Assets
|
$
|
4,863.0
|
|
$
|
4,603.4
|
|
|
|
|
||||
LIABILITIES
|
|
|
||||
Current Liabilities:
|
|
|
||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
61.3
|
|
$
|
63.4
|
|
Accounts Payable
|
516.5
|
|
466.5
|
|
||
Compensation and Employee Benefits
|
113.4
|
|
107.3
|
|
||
Interest Payable
|
14.9
|
|
15.4
|
|
||
Other Accrued Liabilities
|
145.3
|
|
127.2
|
|
||
Total Current Liabilities
|
851.4
|
|
779.8
|
|
||
Long-Term Debt
|
2,213.2
|
|
2,088.5
|
|
||
Deferred Income Tax Liabilities
|
321.8
|
|
408.0
|
|
||
Accrued Pension and Postretirement Benefits
|
80.0
|
|
202.5
|
|
||
Other Noncurrent Liabilities
|
104.7
|
|
68.1
|
|
||
|
|
|
||||
Commitments and Contingencies (Note 12)
|
|
|
|
|
||
|
|
|
||||
SHAREHOLDERS' EQUITY
|
|
|
||||
Preferred Stock, par value $.01 per share; 100,000,000 shares authorized; no shares issued or outstanding
|
—
|
|
—
|
|
||
Common Stock, par value $.01 per share; 1,000,000,000 shares authorized; 309,715,624 and 313,533,785 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively
|
3.1
|
|
3.1
|
|
||
Capital in Excess of Par Value
|
1,683.6
|
|
1,709.0
|
|
||
Accumulated Deficit
|
(56.0
|
)
|
(268.0
|
)
|
||
Accumulated Other Comprehensive Loss
|
(338.8
|
)
|
(387.6
|
)
|
||
Total Shareholders' Equity
|
1,291.9
|
|
1,056.5
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
4,863.0
|
|
$
|
4,603.4
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|||||||||||
|
Common Stock
|
Capital in Excess of Par Value
|
|
|
|||||||||||||
In millions, except share amounts
|
Shares
|
Amount
|
Accumulated Deficit
|
Total Equity
|
|||||||||||||
Balances at December 31, 2014
|
327,044,500
|
|
$
|
3.3
|
|
$
|
1,796.5
|
|
$
|
(452.9
|
)
|
$
|
(334.6
|
)
|
$
|
1,012.3
|
|
Net Income
|
—
|
|
—
|
|
—
|
|
230.1
|
|
—
|
|
230.1
|
|
|||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|||||||||||
Derivative Instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.7
|
)
|
(0.7
|
)
|
|||||
Pension and Postretirement Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
26.8
|
|
26.8
|
|
|||||
Currency Translation Adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
(37.2
|
)
|
(37.2
|
)
|
|||||
Repurchase of Common Stock
|
(4,625,211
|
)
|
(0.1
|
)
|
(24.4
|
)
|
(38.5
|
)
|
—
|
|
(63.0
|
)
|
|||||
Dividends Declared
|
—
|
|
—
|
|
—
|
|
(65.5
|
)
|
—
|
|
(65.5
|
)
|
|||||
Recognition of Stock-Based Compensation
|
—
|
|
—
|
|
(1.1
|
)
|
—
|
|
—
|
|
(1.1
|
)
|
|||||
Issuance of Shares for Stock-Based Awards
|
2,269,428
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balances at December 31, 2015
|
324,688,717
|
|
$
|
3.2
|
|
$
|
1,771.0
|
|
$
|
(326.8
|
)
|
$
|
(345.7
|
)
|
$
|
1,101.7
|
|
Net Income
|
—
|
|
—
|
|
—
|
|
228.0
|
|
—
|
|
228.0
|
|
|||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|||||||||||
Derivative Instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
13.0
|
|
13.0
|
|
|||||
Pension and Postretirement Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
4.0
|
|
4.0
|
|
|||||
Currency Translation Adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
(58.9
|
)
|
(58.9
|
)
|
|||||
Repurchase of Common Stock
(a)
|
(13,202,425
|
)
|
(0.1
|
)
|
(71.2
|
)
|
(97.5
|
)
|
—
|
|
(168.8
|
)
|
|||||
Dividends Declared
|
—
|
|
—
|
|
—
|
|
(71.7
|
)
|
—
|
|
(71.7
|
)
|
|||||
Recognition of Stock-Based Compensation
|
—
|
|
—
|
|
9.2
|
|
—
|
|
—
|
|
9.2
|
|
|||||
Issuance of Shares for Stock-Based Awards
|
1,659,493
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balances at December 31, 2016
|
313,145,785
|
|
$
|
3.1
|
|
$
|
1,709.0
|
|
$
|
(268.0
|
)
|
$
|
(387.6
|
)
|
$
|
1,056.5
|
|
Net Income
|
—
|
|
—
|
|
—
|
|
300.2
|
|
—
|
|
300.2
|
|
|||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|||||||||||
Derivative Instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
(4.9
|
)
|
(4.9
|
)
|
|||||
Pension and Postretirement Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
8.8
|
|
8.8
|
|
|||||
Currency Translation Adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
44.9
|
|
44.9
|
|
|||||
Repurchase of Common Stock
|
(4,462,263
|
)
|
—
|
|
(24.2
|
)
|
(34.2
|
)
|
—
|
|
(58.4
|
)
|
|||||
Dividends Declared
|
—
|
|
—
|
|
—
|
|
(93.1
|
)
|
—
|
|
(93.1
|
)
|
|||||
Pre-2017 Excess Tax Benefit related to Share-Based Payments
|
—
|
|
—
|
|
—
|
|
39.1
|
|
—
|
|
39.1
|
|
|||||
Recognition of Stock-Based Compensation
|
—
|
|
—
|
|
(1.2
|
)
|
—
|
|
—
|
|
(1.2
|
)
|
|||||
Issuance of Shares for Stock-Based Awards
|
1,032,102
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Balances at December 31, 2017
|
309,715,624
|
|
$
|
3.1
|
|
$
|
1,683.6
|
|
$
|
(56.0
|
)
|
$
|
(338.8
|
)
|
$
|
1,291.9
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||||
Net Income
|
$
|
300.2
|
|
$
|
228.0
|
|
$
|
230.1
|
|
|
|
|
|
||||||
Non-cash Items Included in Net Income:
|
|
|
|
||||||
Depreciation and Amortization
|
330.3
|
|
299.3
|
|
280.5
|
|
|||
Amortization of Deferred Debt Issuance Costs
|
5.1
|
|
4.8
|
|
4.1
|
|
|||
Deferred Income Taxes
|
(54.0
|
)
|
76.7
|
|
110.0
|
|
|||
Amount of Postretirement Expense Less Than Funding
|
(127.1
|
)
|
(31.3
|
)
|
(39.4
|
)
|
|||
(Gain) Loss on the Sale of Assets, net
|
(3.7
|
)
|
—
|
|
1.9
|
|
|||
Other, Net
|
2.0
|
|
25.4
|
|
21.0
|
|
|||
Changes in Operating Assets and Liabilities, Net of Acquisitions (See Note 3)
|
63.4
|
|
38.5
|
|
(19.0
|
)
|
|||
Net Cash
Provided by
Operating Activities
|
516.2
|
|
641.4
|
|
589.2
|
|
|||
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||||
Capital Spending
|
(240.9
|
)
|
(278.6
|
)
|
(228.9
|
)
|
|||
Packaging Machinery Spending
|
(19.2
|
)
|
(16.0
|
)
|
(15.2
|
)
|
|||
Acquisition of Businesses, Net of Cash Acquired
|
(189.4
|
)
|
(332.7
|
)
|
(163.2
|
)
|
|||
Proceeds Received from Sale of Assets, Net of Selling Costs
|
7.9
|
|
—
|
|
—
|
|
|||
Other, Net
|
1.0
|
|
(5.2
|
)
|
7.5
|
|
|||
Net Cash
Used in
Investing Activities
|
(440.6
|
)
|
(632.5
|
)
|
(399.8
|
)
|
|||
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||||
Repurchase of Common Stock
|
(62.1
|
)
|
(164.9
|
)
|
(63.0
|
)
|
|||
Payments on Debt
|
(25.0
|
)
|
(25.0
|
)
|
(25.0
|
)
|
|||
Proceeds from Issuance of Debt
|
—
|
|
300.0
|
|
—
|
|
|||
Borrowings under Revolving Credit Facilities
|
1,202.9
|
|
1,200.0
|
|
903.0
|
|
|||
Payments on Revolving Credit Facilities
|
(1,090.8
|
)
|
(1,235.8
|
)
|
(953.8
|
)
|
|||
Debt Issuance Costs
|
—
|
|
(5.3
|
)
|
—
|
|
|||
Repurchase of Common Stock related to Share-Based Payments
|
(10.2
|
)
|
(11.3
|
)
|
(21.5
|
)
|
|||
Dividends Paid
|
(93.4
|
)
|
(64.4
|
)
|
(49.3
|
)
|
|||
Other, Net
|
8.8
|
|
3.6
|
|
(1.3
|
)
|
|||
Net Cash
Used In
Financing Activities
|
(69.8
|
)
|
(3.1
|
)
|
(210.9
|
)
|
|||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
2.5
|
|
(1.6
|
)
|
(5.2
|
)
|
|||
Net
(Decrease) Increase
in Cash and Cash Equivalents
|
8.3
|
|
4.2
|
|
(26.7
|
)
|
|||
Cash and Cash Equivalents at Beginning of Year
|
59.1
|
|
54.9
|
|
81.6
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
67.4
|
|
$
|
59.1
|
|
$
|
54.9
|
|
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, 2017
|
|
December 31, 2016
|
||||||||||||||||
In millions
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
||||||||||||
Amortizable Intangible Assets:
|
|
|
|
|
|
|
|
||||||||||||
Customer Relationships
|
$
|
786.9
|
|
$
|
(377.2
|
)
|
$
|
409.7
|
|
|
$
|
736.0
|
|
$
|
(321.0
|
)
|
$
|
415.0
|
|
Patents, Trademarks, Licenses, and Leases
|
130.2
|
|
(103.4
|
)
|
26.8
|
|
|
125.1
|
|
(94.8
|
)
|
30.3
|
|
||||||
Total
|
$
|
917.1
|
|
$
|
(480.6
|
)
|
$
|
436.5
|
|
|
$
|
861.1
|
|
$
|
(415.8
|
)
|
$
|
445.3
|
|
In millions
|
Paperboard Mills
|
Americas Paperboard Packaging
|
Europe Paperboard Packaging
|
Corporate/Other
(a)
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
408.5
|
|
$
|
698.3
|
|
$
|
61.0
|
|
$
|
—
|
|
$
|
1,167.8
|
|
Acquisition of Businesses
|
—
|
|
98.8
|
|
—
|
|
14.1
|
|
112.9
|
|
|||||
Foreign Currency Effects
|
—
|
|
(7.7
|
)
|
(12.0
|
)
|
(0.7
|
)
|
(20.4
|
)
|
|||||
Balance at December 31, 2016
|
$
|
408.5
|
|
$
|
789.4
|
|
$
|
49.0
|
|
$
|
13.4
|
|
$
|
1,260.3
|
|
Acquisition of Businesses
|
—
|
|
51.4
|
|
6.3
|
|
(2.3
|
)
|
55.4
|
|
|||||
Reallocation of Goodwill
|
—
|
|
(4.0
|
)
|
—
|
|
4.0
|
|
—
|
|
|||||
Foreign Currency Effects
|
—
|
|
2.2
|
|
4.2
|
|
0.9
|
|
7.3
|
|
|||||
Balance at December 31, 2017
|
$
|
408.5
|
|
$
|
839.0
|
|
$
|
59.5
|
|
$
|
16.0
|
|
$
|
1,323.0
|
|
(a)
|
Includes Australia operating segment.
|
In millions
|
2017
|
2016
|
2015
|
||||||
Net Charges Associated with Business Combinations
|
$
|
16.2
|
|
$
|
21.2
|
|
$
|
14.0
|
|
Shutdown and Other Special Charges
|
18.6
|
|
15.9
|
|
6.1
|
|
|||
(Gain) Loss on Sale of Assets
|
(3.7
|
)
|
—
|
|
1.9
|
|
|||
Total
|
$
|
31.1
|
|
$
|
37.1
|
|
$
|
22.0
|
|
NOTE 2.
|
SUPPLEMENTAL BALANCE SHEET DATA
|
In millions
|
2017
|
2016
|
||||
Trade
|
$
|
279.2
|
|
$
|
370.0
|
|
Less: Allowance
|
(7.2
|
)
|
(6.7
|
)
|
||
|
272.0
|
|
363.3
|
|
||
Other
(a)
|
150.8
|
|
63.5
|
|
||
Total
|
$
|
422.8
|
|
$
|
426.8
|
|
(a)
|
Includes a receivable of approximately
$102 million
and
$31 million
for 2017 and 2016, respectively, from the financial institution under the purchasing and servicing of receivables agreements, which is a Level 3 fair value measurement.
|
In millions
|
2017
|
2016
|
||||
Finished Goods
|
$
|
240.5
|
|
$
|
238.3
|
|
Work in Progress
|
74.1
|
|
73.5
|
|
||
Raw Materials
|
229.4
|
|
187.2
|
|
||
Supplies
|
90.0
|
|
83.9
|
|
||
Total
|
$
|
634.0
|
|
$
|
582.9
|
|
In millions
|
2017
|
2016
|
||||
Prepaid Assets
|
$
|
34.3
|
|
$
|
34.1
|
|
Assets Held for Sale
|
10.2
|
|
5.0
|
|
||
Fair Value of Derivatives, current portion
|
1.2
|
|
7.0
|
|
||
Total
|
$
|
45.7
|
|
$
|
46.1
|
|
In millions
|
2017
|
2016
|
||||
Property, Plant and Equipment, at Cost:
|
|
|
||||
Land and Improvements
|
$
|
106.2
|
|
$
|
105.9
|
|
Buildings
|
431.9
|
|
404.1
|
|
||
Machinery and Equipment
(a)
|
4,384.5
|
|
4,137.0
|
|
||
Construction-in-Progress
|
151.0
|
|
106.4
|
|
||
|
5,073.6
|
|
4,753.4
|
|
||
Less: Accumulated Depreciation
(a)
|
(3,206.4
|
)
|
(3,001.5
|
)
|
||
Total
|
$
|
1,867.2
|
|
$
|
1,751.9
|
|
(a)
|
Includes gross assets under capital lease of
$39.7 million
and related accumulated depreciation of
$7.4 million
as of
December 31, 2017
and gross assets under capital lease of
$25.6 million
and related accumulated depreciation of
$5.0 million
as of
December 31, 2016
.
|
In millions
|
2017
|
2016
|
||||
Deferred Debt Issuance Costs, Net of Amortization of $10.9 million and $9.3 million for 2017 and 2016, respectively
|
$
|
2.9
|
|
$
|
4.5
|
|
Deferred Income Tax Assets
|
6.8
|
|
3.2
|
|
||
Pension Assets
|
20.4
|
|
3.0
|
|
||
Fair Value of Derivatives, noncurrent portion
|
—
|
|
0.7
|
|
||
Other
|
36.3
|
|
19.6
|
|
||
Total
|
$
|
66.4
|
|
$
|
31.0
|
|
In millions
|
2017
|
2016
|
||||
Dividends Payable
|
$
|
23.3
|
|
$
|
23.6
|
|
Deferred Revenue
|
11.6
|
|
11.4
|
|
||
Accrued Customer Rebates
|
15.5
|
|
8.0
|
|
||
Fair Value of Derivatives, current portion
|
1.2
|
|
0.8
|
|
||
Other Accrued Taxes
|
29.8
|
|
22.3
|
|
||
Accrued Payables
|
25.7
|
|
10.8
|
|
||
Other
|
38.2
|
|
50.3
|
|
||
Total
|
$
|
145.3
|
|
$
|
127.2
|
|
In millions
|
2017
|
2016
|
||||
Deferred Revenue
|
$
|
6.6
|
|
$
|
6.7
|
|
Multi-employer Plans
|
29.0
|
|
30.4
|
|
||
Workers Compensation Reserve
|
10.9
|
|
10.7
|
|
||
Accrued Build-to-Suit Obligation
|
35.8
|
|
—
|
|
||
Other
|
22.4
|
|
20.3
|
|
||
Total
|
$
|
104.7
|
|
$
|
68.1
|
|
NOTE 3.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
In millions
|
2017
|
2016
|
2015
|
||||||
Receivables, Net
|
$
|
49.9
|
|
$
|
25.5
|
|
$
|
(1.5
|
)
|
Inventories, Net
|
(6.5
|
)
|
10.5
|
|
(19.7
|
)
|
|||
Prepaid Expenses
|
0.8
|
|
(1.2
|
)
|
0.1
|
|
|||
Other Assets
|
(32.8
|
)
|
8.5
|
|
(12.4
|
)
|
|||
Accounts Payable
|
27.0
|
|
4.3
|
|
12.7
|
|
|||
Compensation and Employee Benefits
|
3.5
|
|
(21.7
|
)
|
(1.9
|
)
|
|||
Income Taxes
|
2.3
|
|
1.7
|
|
0.9
|
|
|||
Interest Payable
|
(1.7
|
)
|
5.0
|
|
(1.1
|
)
|
|||
Other Accrued Liabilities
|
6.7
|
|
12.8
|
|
(3.9
|
)
|
|||
Other Noncurrent Liabilities
|
14.2
|
|
(6.9
|
)
|
7.8
|
|
|||
Total
|
$
|
63.4
|
|
$
|
38.5
|
|
$
|
(19.0
|
)
|
In millions
|
2017
|
2016
|
2015
|
||||||
Interest
|
$
|
81.8
|
|
$
|
64.9
|
|
$
|
60.9
|
|
Income Taxes
|
$
|
15.9
|
|
$
|
14.5
|
|
$
|
11.2
|
|
NOTE 4.
|
ACQUISITIONS
|
In millions
|
Amounts Recognized as of Acquisition Date
|
Measurement Period Adjustments
|
Amounts Recognized as of Acquisition Dates (as adjusted)
|
||||||
Purchase Price
|
$
|
191.0
|
|
$
|
1.5
|
|
$
|
192.5
|
|
Assumed Debt
|
14.0
|
|
—
|
|
14.0
|
|
|||
Total Purchase Consideration
|
$
|
205.0
|
|
$
|
1.5
|
|
$
|
206.5
|
|
|
|
|
|
||||||
Cash and Cash Equivalents
|
$
|
3.1
|
|
$
|
—
|
|
$
|
3.1
|
|
Receivables, Net
|
25.9
|
|
—
|
|
25.9
|
|
|||
Inventories, Net
|
29.9
|
|
1.1
|
|
31.0
|
|
|||
Property, Plant and Equipment, Net
|
32.6
|
|
21.9
|
|
54.5
|
|
|||
Intangible Assets, Net
(a)
|
—
|
|
43.3
|
|
43.3
|
|
|||
Other Assets
|
0.5
|
|
—
|
|
0.5
|
|
|||
Total Assets Acquired
|
92.0
|
|
66.3
|
|
158.3
|
|
|||
Current Liabilities
|
3.7
|
|
—
|
|
3.7
|
|
|||
Pension and Postretirement Benefits
|
0.5
|
|
—
|
|
0.5
|
|
|||
Deferred Tax Liabilities
|
—
|
|
4.6
|
|
4.6
|
|
|||
Other Noncurrent Liabilities
|
0.7
|
|
—
|
|
0.7
|
|
|||
Total Liabilities Assumed
|
4.9
|
|
4.6
|
|
9.5
|
|
|||
Net Assets Acquired
|
87.1
|
|
61.7
|
|
148.8
|
|
|||
Goodwill
|
117.9
|
|
(60.2
|
)
|
57.7
|
|
|||
Total Estimated Fair Value of Net Assets Acquired
|
$
|
205.0
|
|
$
|
1.5
|
|
$
|
206.5
|
|
(a)
|
The weighted average life of Intangibles, Net, is
18
years. The Intangible Assets, Net were valued using the income approach and are a Level 3 fair value measurement.
|
NOTE 5.
|
DEBT
|
In millions
|
2017
|
2016
|
||||
Short Term Borrowings
|
$
|
9.1
|
|
$
|
37.1
|
|
Current Portion of Capital Lease Obligations
|
2.2
|
|
1.3
|
|
||
Current Portion of Long-Term Debt
|
50.0
|
|
25.0
|
|
||
Total
|
$
|
61.3
|
|
$
|
63.4
|
|
In millions
|
2017
|
2016
|
||||
Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.19%, payable in 2024
|
$
|
300.0
|
|
$
|
300.0
|
|
Senior Notes with interest payable semi-annually at 4.875%, effective rate of 4.93%, payable in 2022
|
250.0
|
|
250.0
|
|
||
Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.78%, payable in 2021
|
425.0
|
|
425.0
|
|
||
Senior Secured Term Loan Facilities with interest payable at various dates at floating rates (2.84% at December 31, 2017) payable through 2019
|
925.0
|
|
950.0
|
|
||
Senior Secured Revolving Credit Facilities with interest payable at floating rates (2.55% at December 31, 2017) payable in 2019
|
319.0
|
|
184.8
|
|
||
Capital Lease Obligations
|
30.0
|
|
17.9
|
|
||
Other
|
28.9
|
|
3.0
|
|
||
Total Long-Term Debt
|
2,277.9
|
|
2,130.7
|
|
||
Less: Current Portion
|
52.2
|
|
26.3
|
|
||
|
2,225.7
|
|
2,104.4
|
|
||
Less: Unamortized Deferred Debt Issuance Costs
|
12.5
|
|
15.9
|
|
||
Total
|
$
|
2,213.2
|
|
$
|
2,088.5
|
|
In millions
|
|||
2018
|
$
|
50.0
|
|
2019
|
1,194.8
|
|
|
2020
|
20.7
|
|
|
2021
|
425.4
|
|
|
2022
|
250.6
|
|
|
After 2022
|
306.4
|
|
|
Total
|
$
|
2,247.9
|
|
Date
|
Document
(a)(b)
|
Provision
|
Expiration
|
March 2012
|
Amended and Restated Credit Agreement
|
•$1.0 billion revolving credit facility •$1.0 billion amortizing term loan facility •LIBOR plus variable spread(between 175 basis points and 275 basis points) depending on consolidated total leverage ratio
|
March 2017
|
December 2012
|
Amendment No. 1 to Credit Agreement
|
•$300 million incremental term loan
|
March 2017
|
September 2013
|
Amendment No. 2 to Credit Agreement
|
•Added €75 million (approximately $100 million) revolving credit facility for borrowings in Euro and Pound Sterling and a ¥2.5 billion (approximately $25 million) revolving credit facility for borrowings in Yen. LIBOR plus variable spread (between 150 basis points and 250 basis points) depending on consolidated total leverage ratio
|
September 2018
|
June 2014
|
Amendment No. 3 to Credit Agreement
|
•Increased revolving credit facility under which borrowings can be made in Euros or Sterling by €63 million (approximately $86 million)
|
September 2018
|
October 2014
|
Second Amended and Restated Credit Agreement
|
•Increased the domestic revolving credit facility by $250 million and reduced the term loan by approximately $169 million. LIBOR plus variable spread (between 125 basis points and 225 basis points) depending on consolidated total leverage ratio
|
October 2019
|
In millions
|
Total Commitments
|
Total Outstanding
|
Total Available
|
||||||
Senior Secured Domestic Revolving Credit Facility
(a)
|
$
|
1,250.0
|
|
$
|
218.8
|
|
$
|
1,010.6
|
|
Senior Secured International Revolving Credit Facilities
|
188.1
|
|
100.2
|
|
87.9
|
|
|||
Other International Facilities
|
67.5
|
|
38.0
|
|
29.5
|
|
|||
Total
|
$
|
1,505.6
|
|
$
|
357.0
|
|
$
|
1,128.0
|
|
(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 $
20.6 million
as of
December 31, 2017
. These letters of credit are primarily used as security against its self-insurance obligations and workers' compensation obligations. These letters of credit expire throughout 2018 unless extended.
|
NOTE 6.
|
STOCK INCENTIVE PLANS
|
|
2017
|
2016
|
2015
|
||||||
RSUs — Employees
|
1,547,049
|
|
1,891,335
|
|
1,751,823
|
|
|||
Weighted-average grant date fair value
|
$
|
13.35
|
|
$
|
11.20
|
|
$
|
13.28
|
|
Stock Awards — Board of Directors
|
65,520
|
|
59,880
|
|
54,120
|
|
|||
Weighted-average grant date fair value
|
$
|
13.43
|
|
$
|
13.36
|
|
$
|
14.78
|
|
|
Shares
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding — December 31, 2014
|
7,613,698
|
|
$
|
7.20
|
|
Granted
|
1,751,823
|
|
13.28
|
|
|
Released
|
(3,657,373
|
)
|
5.45
|
|
|
Forfeited
|
(268,560
|
)
|
9.32
|
|
|
Outstanding — December 31, 2015
|
5,439,588
|
|
$
|
10.22
|
|
Granted
|
1,891,335
|
|
11.20
|
|
|
Released
|
(2,596,292
|
)
|
7.29
|
|
|
Forfeited
|
(66,956
|
)
|
12.74
|
|
|
Outstanding — December 31, 2016
|
4,667,675
|
|
$
|
12.21
|
|
Granted
|
1,547,049
|
|
13.35
|
|
|
Released
|
(1,720,327
|
)
|
10.05
|
|
|
Forfeited
|
(622,463
|
)
|
13.13
|
|
|
Outstanding — December 31, 2017
|
3,871,934
|
|
$
|
13.10
|
|
NOTE 7.
|
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||||||||
|
Year Ended December 31,
|
|||||||||||||||||
In millions
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
||||||||||||
Components of Net Periodic Cost:
|
|
|
|
|
|
|
||||||||||||
Service Cost
|
$
|
8.2
|
|
$
|
10.0
|
|
$
|
12.8
|
|
$
|
0.8
|
|
$
|
0.8
|
|
$
|
1.0
|
|
Interest Cost
|
42.6
|
|
43.8
|
|
54.8
|
|
1.3
|
|
1.3
|
|
1.7
|
|
||||||
Expected Return on Plan Assets
|
(64.1
|
)
|
(61.3
|
)
|
(74.4
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization:
|
|
|
|
|
|
|
||||||||||||
Prior Service Cost (Credit)
|
0.5
|
|
0.8
|
|
0.7
|
|
(0.3
|
)
|
(0.2
|
)
|
(0.3
|
)
|
||||||
Actuarial Loss (Gain)
|
6.5
|
|
27.3
|
|
19.7
|
|
(2.1
|
)
|
(2.1
|
)
|
(1.6
|
)
|
||||||
Net Curtailment/Settlement Loss
|
—
|
|
1.0
|
|
1.5
|
|
—
|
|
—
|
|
—
|
|
||||||
Other
|
0.8
|
|
0.8
|
|
0.9
|
|
—
|
|
—
|
|
—
|
|
||||||
Net Periodic (Benefit) Cost
|
$
|
(5.5
|
)
|
$
|
22.4
|
|
$
|
16.0
|
|
$
|
(0.3
|
)
|
$
|
(0.2
|
)
|
$
|
0.8
|
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||
|
Year Ended December 31,
|
|||||||||||
|
2017
|
2016
|
2015
|
2017
|
2016
|
2015
|
||||||
Weighted Average Assumptions:
|
|
|
|
|
|
|
||||||
Discount Rate
|
4.01
|
%
|
4.41
|
%
|
4.02
|
%
|
4.10
|
%
|
4.29
|
%
|
3.95
|
%
|
Rate of Increase in Future Compensation Levels
|
1.45
|
%
|
1.49
|
%
|
1.45
|
%
|
—
|
|
—
|
|
—
|
|
Expected Long-Term Rate of Return on Plan Assets
|
5.79
|
%
|
5.90
|
%
|
6.81
|
%
|
—
|
|
—
|
|
—
|
|
Initial Health Care Cost Trend Rate
|
—
|
|
—
|
|
—
|
|
7.45
|
%
|
7.80
|
%
|
7.38
|
%
|
Ultimate Health Care Cost Trend Rate
|
—
|
|
—
|
|
—
|
|
4.50
|
%
|
4.50
|
%
|
4.96
|
%
|
Ultimate Year
|
—
|
|
—
|
|
—
|
|
2024
|
|
2024
|
|
2036
|
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||
In millions
|
2017
|
2016
|
2017
|
2016
|
||||||||
Change in Benefit Obligation:
|
|
|
|
|
||||||||
Benefit Obligation at Beginning of Year
|
$
|
1,279.0
|
|
$
|
1,239.0
|
|
$
|
40.6
|
|
$
|
40.8
|
|
Service Cost
|
8.2
|
|
10.0
|
|
0.8
|
|
0.8
|
|
||||
Interest Cost
|
42.6
|
|
43.8
|
|
1.3
|
|
1.3
|
|
||||
Actuarial Loss (Gain)
|
76.4
|
|
79.3
|
|
(3.4
|
)
|
(0.7
|
)
|
||||
Foreign Currency Exchange
|
22.9
|
|
(36.0
|
)
|
0.1
|
|
0.1
|
|
||||
Settlement/Curtailment (Gain)
|
(0.2
|
)
|
(3.8
|
)
|
—
|
|
0.3
|
|
||||
Benefits Paid
|
(62.7
|
)
|
(58.4
|
)
|
(2.2
|
)
|
(2.1
|
)
|
||||
Acquisition
|
—
|
|
4.1
|
|
—
|
|
—
|
|
||||
Other
|
0.9
|
|
1.0
|
|
0.1
|
|
0.1
|
|
||||
Benefit Obligation at End of Year
|
$
|
1,367.1
|
|
$
|
1,279.0
|
|
$
|
37.3
|
|
$
|
40.6
|
|
|
|
|
|
|
||||||||
Change in Plan Assets:
|
|
|
|
|
||||||||
Fair Value of Plan Assets at Beginning of Year
|
$
|
1,115.6
|
|
$
|
1,038.9
|
|
$
|
—
|
|
$
|
—
|
|
Actual Return on Plan Assets
|
147.1
|
|
116.3
|
|
—
|
|
—
|
|
||||
Employer Contributions
|
119.1
|
|
51.4
|
|
2.2
|
|
2.1
|
|
||||
Foreign Currency Exchange
|
21.6
|
|
(34.6
|
)
|
—
|
|
—
|
|
||||
Benefits Paid
|
(62.7
|
)
|
(58.4
|
)
|
(2.2
|
)
|
(2.1
|
)
|
||||
Acquisition
|
—
|
|
4.8
|
|
—
|
|
—
|
|
||||
Settlements
|
—
|
|
(2.9
|
)
|
—
|
|
—
|
|
||||
Other
|
—
|
|
0.1
|
|
—
|
|
—
|
|
||||
Fair Value of Plan Assets at End of Year
|
$
|
1,340.7
|
|
$
|
1,115.6
|
|
$
|
—
|
|
$
|
—
|
|
Plan Assets Less than Projected Benefit Obligation
|
$
|
(26.4
|
)
|
$
|
(163.4
|
)
|
$
|
(37.3
|
)
|
$
|
(40.6
|
)
|
|
|
|
|
|
||||||||
Amounts Recognized in the Consolidated Balance Sheets Consist of:
|
|
|
|
|
||||||||
Pension Assets
|
$
|
20.4
|
|
$
|
3.0
|
|
$
|
—
|
|
$
|
—
|
|
Accrued Pension and Postretirement Benefits Liability — Current
|
$
|
(1.7
|
)
|
$
|
(1.7
|
)
|
$
|
(2.4
|
)
|
$
|
(2.8
|
)
|
Accrued Pension and Postretirement Benefits Liability — Noncurrent
|
$
|
(45.1
|
)
|
$
|
(164.7
|
)
|
$
|
(34.9
|
)
|
$
|
(37.8
|
)
|
Accumulated Other Comprehensive Income:
|
|
|
|
|
||||||||
Net Actuarial Loss (Gain)
|
$
|
267.1
|
|
$
|
277.8
|
|
$
|
(20.1
|
)
|
$
|
(18.7
|
)
|
Prior Service Cost (Credit)
|
$
|
0.7
|
|
$
|
1.3
|
|
$
|
(0.8
|
)
|
$
|
(1.1
|
)
|
Weighted Average Calculations:
|
|
|
|
|
||||||||
Discount Rate
|
3.49
|
%
|
4.01
|
%
|
3.64
|
%
|
4.10
|
%
|
||||
Rates of Increase in Future Compensation Levels
|
2.09
|
%
|
1.45
|
%
|
—
|
|
—
|
|
||||
Initial Health Care Cost Trend Rate
|
—
|
|
—
|
|
9.00
|
%
|
7.45
|
%
|
||||
Ultimate Health Care Cost Trend Rate
|
—
|
|
—
|
|
4.50
|
%
|
4.50
|
%
|
||||
Ultimate Year
|
—
|
|
—
|
|
2027
|
|
2024
|
|
|
Target
|
2017
|
2016
|
|||
Cash
|
—
|
%
|
2.4
|
%
|
1.3
|
%
|
Equity Securities
|
46.6
|
|
11.2
|
|
40.0
|
|
Fixed Income Securities
|
53.4
|
|
82.7
|
|
53.9
|
|
Other Investments
|
—
|
|
3.7
|
|
4.8
|
|
Total
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Fair Value Measurements at December 31, 2017
|
|||||||||||
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)
|
$
|
32.2
|
|
$
|
0.3
|
|
$
|
31.9
|
|
$
|
—
|
|
Equity Securities:
|
|
|
|
|
||||||||
Domestic
(a)
|
140.5
|
|
4.1
|
|
136.4
|
|
—
|
|
||||
Foreign
(a)
|
9.1
|
|
5.8
|
|
3.3
|
|
—
|
|
||||
Fixed Income Securities
(a)
|
1,108.6
|
|
16.1
|
|
1,092.5
|
|
—
|
|
||||
Other Investments:
|
|
|
|
|
||||||||
Real estate
|
10.4
|
|
9.6
|
|
—
|
|
0.8
|
|
||||
Diversified growth fund
(b)
|
39.9
|
|
—
|
|
39.9
|
|
—
|
|
||||
Total
|
$
|
1,340.7
|
|
$
|
35.9
|
|
$
|
1,304.0
|
|
$
|
0.8
|
|
|
Fair Value Measurements at December 31, 2016
|
|||||||||||
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)
|
$
|
14.5
|
|
$
|
0.3
|
|
$
|
14.2
|
|
$
|
—
|
|
Equity Securities:
|
|
|
|
|
||||||||
Domestic
(a)
|
340.2
|
|
68.7
|
|
271.5
|
|
—
|
|
||||
Foreign
(a)
|
107.0
|
|
55.5
|
|
51.5
|
|
—
|
|
||||
Fixed Income Securities
(a)
|
600.8
|
|
194.6
|
|
406.2
|
|
—
|
|
||||
Other Investments:
|
|
|
|
|
||||||||
Real estate
|
14.8
|
|
14.8
|
|
—
|
|
—
|
|
||||
Diversified growth fund
(b)
|
38.3
|
|
—
|
|
38.3
|
|
—
|
|
||||
Total
|
$
|
1,115.6
|
|
$
|
333.9
|
|
$
|
781.7
|
|
$
|
—
|
|
(a)
|
The Level 2 investments are held in pooled funds and fair value is determined by net asset value, based on the underlying investments, as reported on the valuation date.
|
(b)
|
The fund invests in a combination of traditional investments (equities, bonds, and foreign exchange), seeking to achieve returns through active asset allocation over a
three
to
five
year horizon.
|
|
|
|||||
In millions
|
2017
|
2016
|
||||
Balance at January 1,
|
$
|
—
|
|
$
|
35.9
|
|
Transfers (Out) In
|
0.8
|
|
(35.9
|
)
|
||
Return on Assets Held at December 31
|
—
|
|
—
|
|
||
Balance at December 31,
|
$
|
0.8
|
|
$
|
—
|
|
|
One Percentage Point
|
|||||
In millions
|
Increase
|
Decrease
|
||||
Health Care Cost Trend Rate Sensitivity:
|
|
|
||||
Effect on Total Interest and Service Cost Components
|
$
|
0.1
|
|
$
|
(0.1
|
)
|
Effect on Year-End Postretirement Benefit Obligation
|
$
|
1.9
|
|
$
|
(1.6
|
)
|
In millions
|
Pension Plans
|
Postretirement Health Care Benefits
|
||||
2018
|
$
|
67.1
|
|
$
|
2.4
|
|
2019
|
69.1
|
|
2.4
|
|
||
2020
|
71.7
|
|
2.7
|
|
||
2021
|
74.4
|
|
2.7
|
|
||
2022
|
76.7
|
|
2.9
|
|
||
2023— 2027
|
405.2
|
|
13.4
|
|
In millions
|
Pension Benefits
|
Postretirement Health Care Benefits
|
||||
Recognition of Prior Service Cost
|
$
|
0.4
|
|
$
|
(0.3
|
)
|
Recognition of Actuarial Loss (Gain)
|
5.6
|
|
(1.8
|
)
|
a.
|
Assets contributed to the multi-employers plan by one employer may be used to provide benefits to employees of other participating employers.
|
b.
|
If a participating employer stops contributing to the plan, the unfunded obligation of the plan may be borne by the remaining participating employers.
|
c.
|
If a company chooses to stop participating in a multi-employer plan, a company may be required to pay that plan an amount based on the underfunded status of the plan, referred to as the withdrawal liability.
|
|
|
Pension Protection Act Zone Status
|
|
Company Contributions
(in millions)
|
|
|
|||||||||
Multi-employer Pension Fund
|
EIN/Pension Plan Number
|
2017
|
2016
|
FIP/RP Status Implemented
|
2017
|
2016
|
2015
|
Surcharge Imposed
|
Expiration Date of Bargaining Agreement
|
||||||
Central States Southeast and Southwest Areas Pension Fund
|
36-6044243/001
|
Red
|
Red
|
Yes
|
$
|
0.1
|
|
$
|
0.1
|
|
$
|
0.1
|
|
Yes
|
7/31/2018
|
PACE Industry Union - Management Pension Fund
(a)
|
11-6166763/001
|
Red
|
Red
|
Yes
|
0.1
|
|
0.1
|
|
—
|
|
Yes
|
6/15/2018
|
|||
Western Conference of Teamsters Pension Trust - Northwest Area
(b)
|
91-6145047/001
|
Green
|
Green
|
No
|
—
|
|
—
|
|
0.1
|
|
No
|
4/30/2017
|
|||
Graphic Communications Conference of International Brotherhood of Teamster Pension Fund
(a)
|
52-6118568/001
|
Red
|
Red
|
Yes
|
0.3
|
|
0.2
|
|
—
|
|
Yes
|
5/01/2019
|
|||
Total
|
|
|
|
|
$
|
0.5
|
|
$
|
0.4
|
|
$
|
0.2
|
|
|
|
NOTE 8.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
U.S.
|
$
|
227.5
|
|
$
|
290.0
|
|
$
|
307.6
|
|
International
|
25.5
|
|
29.4
|
|
51.7
|
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
$
|
253.0
|
|
$
|
319.4
|
|
$
|
359.3
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Current Benefit (Expense):
|
|
|
|
||||||
U.S.
|
$
|
0.7
|
|
$
|
(5.1
|
)
|
$
|
(7.9
|
)
|
International
|
(9.2
|
)
|
(11.4
|
)
|
(12.5
|
)
|
|||
Total Current
|
$
|
(8.5
|
)
|
$
|
(16.5
|
)
|
$
|
(20.4
|
)
|
|
|
|
|
||||||
Deferred Benefit (Expense):
|
|
|
|
||||||
U.S.
|
51.0
|
|
(78.8
|
)
|
(110.6
|
)
|
|||
International
|
3.0
|
|
2.1
|
|
0.6
|
|
|||
Total Deferred
|
$
|
54.0
|
|
$
|
(76.7
|
)
|
$
|
(110.0
|
)
|
Income Tax Benefit (Expense)
|
$
|
45.5
|
|
$
|
(93.2
|
)
|
$
|
(130.4
|
)
|
|
Year Ended December 31,
|
||||||||||||||||
In millions
|
2017
|
Percent
|
|
2016
|
Percent
|
|
2015
|
Percent
|
|||||||||
Income Tax Expense at U.S. Statutory Rate
|
$
|
(88.5
|
)
|
35.0
|
%
|
|
$
|
(111.8
|
)
|
35.0
|
%
|
|
$
|
(125.8
|
)
|
35.0
|
%
|
U.S. State and Local Tax Expense
|
(8.7
|
)
|
3.4
|
|
|
(10.0
|
)
|
3.2
|
|
|
(11.4
|
)
|
3.2
|
|
|||
IRS Agreement
|
—
|
|
—
|
|
|
22.8
|
|
(7.2
|
)
|
|
—
|
|
—
|
|
|||
Permanent Items
|
(2.7
|
)
|
1.0
|
|
|
(1.3
|
)
|
0.5
|
|
|
1.7
|
|
(0.5
|
)
|
|||
U.S. Tax Reform
|
138.0
|
|
(54.5
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||
Change in Valuation Allowance due to Tax Reform
|
(2.0
|
)
|
0.8
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||
Change in Valuation Allowance
|
(3.5
|
)
|
1.4
|
|
|
0.5
|
|
(0.2
|
)
|
|
1.8
|
|
(0.5
|
)
|
|||
International Tax Rate Differences
|
3.2
|
|
(1.3
|
)
|
|
1.8
|
|
(0.6
|
)
|
|
2.4
|
|
(0.7
|
)
|
|||
Foreign Withholding Tax
|
(0.4
|
)
|
0.2
|
|
|
(0.2
|
)
|
0.1
|
|
|
(0.2
|
)
|
0.1
|
|
|||
Change in Tax Rates
|
(3.0
|
)
|
1.2
|
|
|
0.2
|
|
(0.1
|
)
|
|
1.0
|
|
(0.3
|
)
|
|||
U.S. Federal & State Tax Credits
|
10.2
|
|
(4.0
|
)
|
|
3.5
|
|
(1.1
|
)
|
|
5.5
|
|
(1.5
|
)
|
|||
Uncertain Tax Positions
|
(0.3
|
)
|
0.1
|
|
|
1.2
|
|
(0.4
|
)
|
|
(3.7
|
)
|
1.0
|
|
|||
Other
|
3.2
|
|
(1.3
|
)
|
|
0.1
|
|
—
|
|
|
(1.7
|
)
|
0.5
|
|
|||
Income Tax Benefit (Expense)
|
$
|
45.5
|
|
(18.0
|
)%
|
|
$
|
(93.2
|
)
|
29.2
|
%
|
|
$
|
(130.4
|
)
|
36.3
|
%
|
In millions
|
2017
|
2016
|
||||
Deferred Income Tax Assets:
|
|
|
||||
Compensation Based Accruals
|
$
|
16.5
|
|
$
|
20.1
|
|
Net Operating Loss Carryforwards
|
114.9
|
|
165.3
|
|
||
Postretirement Benefits
|
25.6
|
|
88.0
|
|
||
Tax Credits
|
17.6
|
|
35.3
|
|
||
Other
|
45.9
|
|
55.4
|
|
||
Valuation Allowance
|
(51.5
|
)
|
(45.5
|
)
|
||
Total Deferred Income Tax Assets
|
$
|
169.0
|
|
$
|
318.6
|
|
Deferred Income Tax Liabilities:
|
|
|
||||
Property, Plant and Equipment
|
(219.8
|
)
|
(334.6
|
)
|
||
Goodwill
|
(192.0
|
)
|
(284.5
|
)
|
||
Other Intangibles
|
(68.7
|
)
|
(99.6
|
)
|
||
Other
|
(3.5
|
)
|
(4.7
|
)
|
||
Net Noncurrent Deferred Income Tax Liabilities
|
$
|
(484.0
|
)
|
$
|
(723.4
|
)
|
Net Deferred Income Tax Liability
|
$
|
(315.0
|
)
|
$
|
(404.8
|
)
|
|
December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
Balance Beginning of Period
|
$
|
45.5
|
|
$
|
44.8
|
|
$
|
53.6
|
|
Charges to Costs and Expenses
|
5.5
|
|
1.2
|
|
—
|
|
|||
Additions (Deductions)
|
0.5
|
|
(0.5
|
)
|
(8.8
|
)
|
|||
Balance at End of Period
|
$
|
51.5
|
|
$
|
45.5
|
|
$
|
44.8
|
|
In millions
|
2017
|
2016
|
||||
Balance at January 1,
|
$
|
10.1
|
|
$
|
9.1
|
|
Additions for Tax Positions of Current Year
|
0.6
|
|
1.5
|
|
||
Additions for Tax Positions of Prior Years
|
0.7
|
|
1.1
|
|
||
Reductions for Tax Positions of Prior Years
|
(0.9
|
)
|
(1.6
|
)
|
||
Balance at December 31,
|
$
|
10.5
|
|
$
|
10.1
|
|
NOTE 9.
|
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES
|
Start
|
End
|
(In Millions)
Notional Amount |
Weighted Average Interest Rate
|
12/01/2017
|
10/01/2018
|
$250.0
|
1.16%
|
NOTE 10.
|
FAIR VALUE MEASUREMENT
|
|
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)
|
Amount of Loss (Gain) Recognized in Statement of Operations (Effective Portion)
|
|||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|||||||||||||||||
In millions
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
||||||||||||||
Commodity Contracts
|
$
|
3.6
|
|
$
|
(5.0
|
)
|
|
Cost of Sales
|
$
|
(1.2
|
)
|
$
|
12.5
|
|
|
Cost of Sales
|
$
|
(0.1
|
)
|
$
|
(0.1
|
)
|
Foreign Currency Contracts
|
3.1
|
|
(1.4
|
)
|
|
Other Income, Net
|
(0.3
|
)
|
0.5
|
|
|
Other Income, Net
|
—
|
|
—
|
|
||||||
Interest Rate Swap Agreements
|
(1.0
|
)
|
0.4
|
|
|
Interest Expense, Net
|
(0.6
|
)
|
2.0
|
|
|
Interest Expense, Net
|
—
|
|
—
|
|
||||||
Total
|
$
|
5.7
|
|
$
|
(6.0
|
)
|
|
|
$
|
(2.1
|
)
|
$
|
15.0
|
|
|
|
$
|
(0.1
|
)
|
$
|
(0.1
|
)
|
In millions
|
|
2017
|
2016
|
||||
Foreign Currency Contracts
|
Other Expense, Net
|
$
|
9.7
|
|
$
|
3.3
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
Balance at January 1
|
$
|
7.5
|
|
$
|
(13.5
|
)
|
$
|
(12.5
|
)
|
Reclassification to earnings
|
(2.1
|
)
|
15.0
|
|
11.7
|
|
|||
Current period change in fair value
|
(5.7
|
)
|
6.0
|
|
(12.7
|
)
|
|||
Balance at December 31
|
$
|
(0.3
|
)
|
$
|
7.5
|
|
$
|
(13.5
|
)
|
NOTE 11.
|
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
In millions
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
||||||||||||||||||
Derivative Instruments (Loss) Gain
|
$
|
(7.8
|
)
|
$
|
2.9
|
|
$
|
(4.9
|
)
|
|
$
|
21.0
|
|
$
|
(8.0
|
)
|
$
|
13.0
|
|
|
$
|
(1.0
|
)
|
$
|
0.3
|
|
$
|
(0.7
|
)
|
Pension and Postretirement Benefit Plans
|
12.3
|
|
(3.5
|
)
|
8.8
|
|
|
7.9
|
|
(3.9
|
)
|
4.0
|
|
|
40.0
|
|
(13.2
|
)
|
26.8
|
|
|||||||||
Currency Translation Adjustment
|
44.9
|
|
—
|
|
44.9
|
|
|
(58.9
|
)
|
—
|
|
(58.9
|
)
|
|
(37.2
|
)
|
—
|
|
(37.2
|
)
|
|||||||||
Other Comprehensive Income (Loss)
|
$
|
49.4
|
|
$
|
(0.6
|
)
|
$
|
48.8
|
|
|
$
|
(30.0
|
)
|
$
|
(11.9
|
)
|
$
|
(41.9
|
)
|
|
$
|
1.8
|
|
$
|
(12.9
|
)
|
$
|
(11.1
|
)
|
|
December 31,
|
|||||
In millions
|
2017
|
2016
|
||||
Accumulated Derivative Instruments Loss
|
$
|
(10.3
|
)
|
$
|
(5.4
|
)
|
Pension and Postretirement Benefit Plans
|
(226.7
|
)
|
(235.5
|
)
|
||
Currency Translation Adjustment
|
(101.8
|
)
|
(146.7
|
)
|
||
Accumulated Other Comprehensive Loss
|
$
|
(338.8
|
)
|
$
|
(387.6
|
)
|
NOTE 12.
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|||||||
In millions
|
Capital Leases
|
Operating Leases
|
Total
|
||||||
2018
|
$
|
3.7
|
|
$
|
42.9
|
|
$
|
46.6
|
|
2019
|
3.4
|
|
32.8
|
|
36.2
|
|
|||
2020
|
3.4
|
|
27.7
|
|
31.1
|
|
|||
2021
|
3.3
|
|
22.5
|
|
25.8
|
|
|||
2022
|
2.8
|
|
19.2
|
|
22.0
|
|
|||
Thereafter
|
24.5
|
|
26.3
|
|
50.8
|
|
|||
Total Minimum Lease Payments
|
41.1
|
|
171.4
|
|
212.5
|
|
|||
Less: Amount Representing Interest
|
(11.1
|
)
|
—
|
|
(11.1
|
)
|
|||
Present Value of Net Minimum Leases
|
$
|
30.0
|
|
$
|
171.4
|
|
$
|
201.4
|
|
In millions
|
|
||
2018
|
$
|
151.8
|
|
2019
|
86.4
|
|
|
2020
|
43.0
|
|
|
2021
|
37.9
|
|
|
2022
|
38.0
|
|
|
Thereafter
|
310.6
|
|
|
Total
|
$
|
667.7
|
|
NOTE 13.
|
ENVIRONMENTAL AND LEGAL MATTERS
|
NOTE 14.
|
BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION
|
|
Year Ended December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
NET SALES:
|
|
|
|
||||||
Paperboard Mills
|
$
|
399.7
|
|
$
|
394.7
|
|
$
|
480.5
|
|
Americas Paperboard Packaging
|
3,243.6
|
|
3,193.1
|
|
3,012.1
|
|
|||
Europe Paperboard Packaging
|
593.1
|
|
569.9
|
|
603.9
|
|
|||
Corporate/Other/Eliminations
|
167.3
|
|
140.4
|
|
63.7
|
|
|||
Total
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
$
|
4,160.2
|
|
|
|
|
|
||||||
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||||
Paperboard Mills
(a)
|
$
|
(35.0
|
)
|
$
|
(3.7
|
)
|
$
|
17.1
|
|
Americas Paperboard Packaging
|
358.2
|
|
409.0
|
|
395.2
|
|
|||
Europe Paperboard Packaging
|
37.3
|
|
25.4
|
|
40.8
|
|
|||
Corporate and Other
(b)
|
(17.8
|
)
|
(34.7
|
)
|
(26.0
|
)
|
|||
Total
|
$
|
342.7
|
|
$
|
396.0
|
|
$
|
427.1
|
|
|
|
|
|
||||||
CAPITAL EXPENDITURES:
|
|
|
|
||||||
Paperboard Mills
|
$
|
111.4
|
|
$
|
184.2
|
|
$
|
145.0
|
|
Americas Paperboard Packaging
|
98.8
|
|
45.9
|
|
49.7
|
|
|||
Europe Paperboard Packaging
|
17.3
|
|
37.1
|
|
39.9
|
|
|||
Corporate and Other
|
32.6
|
|
27.4
|
|
9.5
|
|
|||
Total
|
$
|
260.1
|
|
$
|
294.6
|
|
$
|
244.1
|
|
|
|
|
|
||||||
DEPRECIATION AND AMORTIZATION:
|
|
|
|
||||||
Paperboard Mills
|
$
|
143.7
|
|
$
|
120.3
|
|
$
|
124.7
|
|
Americas Paperboard Packaging
|
125.3
|
|
124.7
|
|
107.3
|
|
|||
Europe Paperboard Packaging
|
42.1
|
|
41.1
|
|
40.1
|
|
|||
Corporate and Other
|
19.2
|
|
13.2
|
|
8.4
|
|
|||
Total
|
$
|
330.3
|
|
$
|
299.3
|
|
$
|
280.5
|
|
(a)
|
Includes accelerated depreciation related to shutdown of Santa Clara in 2017.
|
(b)
|
Includes expenses related to acquisitions, integration activities and shutdown costs (excluding accelerated depreciation).
|
|
December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
ASSETS AT DECEMBER 31:
|
|
|
|
||||||
Paperboard Mills
|
$
|
1,487.0
|
|
$
|
1,496.1
|
|
$
|
1,445.0
|
|
Americas Paperboard Packaging
|
2,478.7
|
|
2,419.8
|
|
2,157.1
|
|
|||
Europe Paperboard Packaging
|
607.1
|
|
491.9
|
|
574.0
|
|
|||
Corporate and Other
|
290.2
|
|
195.6
|
|
80.0
|
|
|||
Total
|
$
|
4,863.0
|
|
$
|
4,603.4
|
|
$
|
4,256.1
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2017
|
2016
|
2015
|
||||||
NET SALES:
|
|
|
|
||||||
Americas
(a)
|
$
|
3,643.3
|
|
$
|
3,601.7
|
|
$
|
3,492.6
|
|
Europe
|
593.1
|
|
569.9
|
|
603.9
|
|
|||
Asia Pacific
|
215.7
|
|
198.1
|
|
117.4
|
|
|||
Corporate and Other
|
(48.4
|
)
|
(71.6
|
)
|
(53.7
|
)
|
|||
Total
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
$
|
4,160.2
|
|
In millions
|
2017
|
2016
|
2015
|
||||||
ASSETS AT DECEMBER 31:
|
|
|
|
||||||
Americas
(a)
|
$
|
4,046.4
|
|
$
|
3,923.2
|
|
$
|
3,590.4
|
|
Europe
|
607.1
|
|
491.9
|
|
574.0
|
|
|||
Asia Pacific
|
209.5
|
|
188.3
|
|
91.7
|
|
|||
Total
|
$
|
4,863.0
|
|
$
|
4,603.4
|
|
$
|
4,256.1
|
|
NOTE 15.
|
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
|
|
2017
|
||||||||||||||
In millions, except per share amounts
|
First
|
Second
|
Third
|
Fourth
|
Total
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,061.5
|
|
$
|
1,094.7
|
|
$
|
1,137.6
|
|
$
|
1,109.9
|
|
$
|
4,403.7
|
|
Gross Profit
|
175.0
|
|
176.9
|
|
191.6
|
|
176.0
|
|
719.5
|
|
|||||
Business Combinations and Shutdown and Other Special Charges, Net
|
8.6
|
|
6.1
|
|
3.6
|
|
12.8
|
|
31.1
|
|
|||||
Income from Operations
|
75.5
|
|
87.6
|
|
95.4
|
|
84.2
|
|
342.7
|
|
|||||
Net Income
|
37.0
|
|
42.0
|
|
47.3
|
|
173.9
|
|
300.2
|
|
|||||
Net Income Per Share — Basic
|
$
|
0.12
|
|
$
|
0.14
|
|
$
|
0.15
|
|
$
|
0.56
|
|
$
|
0.97
|
|
Net Income Per Share — Diluted
(a)
|
$
|
0.12
|
|
$
|
0.14
|
|
$
|
0.15
|
|
$
|
0.56
|
|
$
|
0.96
|
|
|
2016
|
||||||||||||||
In millions, except per share amounts
|
First
|
Second
|
Third
|
Fourth
|
Total
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,034.0
|
|
$
|
1,103.2
|
|
$
|
1,103.7
|
|
$
|
1,057.2
|
|
$
|
4,298.1
|
|
Gross Profit
|
207.7
|
|
204.8
|
|
191.3
|
|
188.1
|
|
791.9
|
|
|||||
Business Combinations and Shutdown and Other Special Charges, Net
|
10.5
|
|
5.3
|
|
7.4
|
|
13.9
|
|
37.1
|
|
|||||
Income from Operations
|
107.2
|
|
105.6
|
|
105.1
|
|
78.1
|
|
396.0
|
|
|||||
Net Income
|
57.5
|
|
77.8
|
|
57.8
|
|
34.9
|
|
228.0
|
|
|||||
|
|
|
|
|
|
||||||||||
Net Income Per Share — Basic
|
$
|
0.18
|
|
$
|
0.24
|
|
$
|
0.18
|
|
$
|
0.11
|
|
$
|
0.71
|
|
Net Income Per Share — Diluted
|
$
|
0.18
|
|
$
|
0.24
|
|
$
|
0.18
|
|
$
|
0.11
|
|
$
|
0.71
|
|
NOTE 16.
|
EARNINGS PER SHARE
|
|
Year Ended December 31,
|
||||||||
In millions, except per share data
|
2017
|
2016
|
2015
|
||||||
Net Income
|
$
|
300.2
|
|
$
|
228.0
|
|
$
|
230.1
|
|
Weighted Average Shares:
|
|
|
|
||||||
Basic
|
311.1
|
|
320.9
|
|
329.5
|
|
|||
Dilutive effect of RSUs
|
0.8
|
|
0.6
|
|
1.2
|
|
|||
Diluted
|
311.9
|
|
321.5
|
|
330.7
|
|
|||
Earnings Per Share — Basic
|
$
|
0.97
|
|
$
|
0.71
|
|
$
|
0.70
|
|
Earnings Per Share — Diluted
|
$
|
0.96
|
|
$
|
0.71
|
|
$
|
0.70
|
|
NOTE 17.
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
|
In millions
|
Derivatives Instruments
|
Pension Benefit Plans
|
Postretirement Benefit Plans
|
Currency Translation Adjustments
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
(5.4
|
)
|
$
|
(250.2
|
)
|
$
|
14.7
|
|
$
|
(146.7
|
)
|
$
|
(387.6
|
)
|
Other Comprehensive (Loss) Income before Reclassifications
|
(3.6
|
)
|
3.3
|
|
2.6
|
|
44.9
|
|
47.2
|
|
|||||
Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income
(b)
|
(1.3
|
)
|
4.4
|
|
(1.5
|
)
|
—
|
|
1.6
|
|
|||||
Net Current-period Other Comprehensive (Loss) Income
|
(4.9
|
)
|
7.7
|
|
1.1
|
|
44.9
|
|
48.8
|
|
|||||
Balance at December 31, 2017
|
$
|
(10.3
|
)
|
$
|
(242.5
|
)
|
$
|
15.8
|
|
$
|
(101.8
|
)
|
$
|
(338.8
|
)
|
(a)
|
All amounts are net-of-tax.
|
In millions
|
|
|
|
|
||
Details about Accumulated Other Comprehensive Income Components
|
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
|
Affected Line Item in the Statement Where Net Income is Presented
|
||
Derivatives Instruments:
|
|
|
|
|
||
Commodity Contracts
|
|
$
|
(1.2
|
)
|
|
Cost of Sales
|
Foreign Currency Contracts
|
|
(0.3
|
)
|
|
Other Expense, Net
|
|
Interest Rate Swap Agreements
|
|
(0.6
|
)
|
|
Interest Expense, Net
|
|
|
|
(2.1
|
)
|
|
Total before Tax
|
|
|
|
0.8
|
|
|
Tax Expense
|
|
|
|
$
|
(1.3
|
)
|
|
Net of Tax
|
|
|
|
|
|
||
Amortization of Defined Benefit Pension Plans:
|
|
|
|
|
||
Prior Service Costs
|
|
$
|
0.5
|
|
(c)
|
|
Actuarial Losses
|
|
6.5
|
|
(c)
|
|
|
|
|
7.0
|
|
|
Total before Tax
|
|
|
|
(2.6
|
)
|
|
Tax Benefit
|
|
|
|
$
|
4.4
|
|
|
Net of Tax
|
|
|
|
|
|
||
Amortization of Postretirement Benefit Plans:
|
|
|
|
|
||
Prior Service Credits
|
|
$
|
(0.3
|
)
|
(c)
|
|
Actuarial Gains
|
|
(2.1
|
)
|
(c)
|
|
|
|
|
(2.4
|
)
|
|
Total before Tax
|
|
|
|
0.9
|
|
|
Tax Expense
|
|
|
|
$
|
(1.5
|
)
|
|
Net of Tax
|
|
|
|
|
|
||
Total Reclassifications for the Period
|
|
$
|
1.6
|
|
|
|
(c)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 7 — Pensions and Other Postretirement Benefits).
|
NOTE 18.
|
GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS
|
|
Year Ended December 31, 2017
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
Net Sales
|
$
|
—
|
|
$
|
3,509.0
|
|
$
|
50.6
|
|
$
|
1,166.6
|
|
$
|
(322.5
|
)
|
$
|
4,403.7
|
|
Cost of Sales
|
—
|
|
2,934.0
|
|
40.7
|
|
1,032.0
|
|
(322.5
|
)
|
3,684.2
|
|
||||||
Selling, General and Administrative
|
—
|
|
257.4
|
|
3.5
|
|
81.8
|
|
—
|
|
342.7
|
|
||||||
Other (Income) Expense, Net
|
—
|
|
(6.1
|
)
|
0.1
|
|
9.0
|
|
—
|
|
3.0
|
|
||||||
Business Combinations and Shutdown and Other Special Charges, Net
|
—
|
|
19.4
|
|
—
|
|
11.7
|
|
—
|
|
31.1
|
|
||||||
Income from Operations
|
—
|
|
304.3
|
|
6.3
|
|
32.1
|
|
—
|
|
342.7
|
|
||||||
Interest Expense, Net
|
—
|
|
(84.9
|
)
|
—
|
|
(4.8
|
)
|
—
|
|
(89.7
|
)
|
||||||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
—
|
|
219.4
|
|
6.3
|
|
27.3
|
|
—
|
|
253.0
|
|
||||||
Income Tax Benefit (Expense)
|
—
|
|
54.9
|
|
(3.5
|
)
|
(5.9
|
)
|
—
|
|
45.5
|
|
||||||
Income before Equity Income of Unconsolidated Entity
|
—
|
|
274.3
|
|
2.8
|
|
21.4
|
|
—
|
|
298.5
|
|
||||||
Equity Income of Unconsolidated Entity
|
—
|
|
—
|
|
—
|
|
1.7
|
|
—
|
|
1.7
|
|
||||||
Equity in Net Earnings of Subsidiaries
|
300.2
|
|
25.9
|
|
(6.1
|
)
|
—
|
|
(320.0
|
)
|
—
|
|
||||||
Net Income (Loss)
|
300.2
|
|
300.2
|
|
(3.3
|
)
|
23.1
|
|
(320.0
|
)
|
300.2
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Comprehensive Income (Loss)
|
$
|
349.0
|
|
$
|
349.0
|
|
$
|
(26.0
|
)
|
$
|
78.5
|
|
$
|
(401.5
|
)
|
$
|
349.0
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
Net Sales
|
$
|
—
|
|
$
|
3,462.5
|
|
$
|
106.2
|
|
$
|
1,051.3
|
|
$
|
(321.9
|
)
|
$
|
4,298.1
|
|
Cost of Sales
|
—
|
|
2,812.2
|
|
88.6
|
|
927.3
|
|
(321.9
|
)
|
3,506.2
|
|
||||||
Selling, General and Administrative
|
—
|
|
264.4
|
|
11.2
|
|
80.1
|
|
—
|
|
355.7
|
|
||||||
Other (Income) Expense, Net
|
—
|
|
(3.8
|
)
|
—
|
|
6.9
|
|
—
|
|
3.1
|
|
||||||
Business Combinations and Shutdown and Other Special Charges, Net
|
—
|
|
32.9
|
|
—
|
|
4.2
|
|
—
|
|
37.1
|
|
||||||
Income from Operations
|
—
|
|
356.8
|
|
6.4
|
|
32.8
|
|
—
|
|
396.0
|
|
||||||
Interest (Expense) Income, Net
|
—
|
|
(72.3
|
)
|
—
|
|
(4.3
|
)
|
—
|
|
(76.6
|
)
|
||||||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
—
|
|
284.5
|
|
6.4
|
|
28.5
|
|
—
|
|
319.4
|
|
||||||
Income Tax Expense
|
—
|
|
(81.5
|
)
|
(2.6
|
)
|
(9.1
|
)
|
—
|
|
(93.2
|
)
|
||||||
Income before Equity Income of Unconsolidated Entity
|
—
|
|
203.0
|
|
3.8
|
|
19.4
|
|
—
|
|
226.2
|
|
||||||
Equity Income of Unconsolidated Entity
|
—
|
|
—
|
|
—
|
|
1.8
|
|
—
|
|
1.8
|
|
||||||
Equity in Net Earnings of Subsidiaries
|
228.0
|
|
25.0
|
|
(6.1
|
)
|
—
|
|
(246.9
|
)
|
—
|
|
||||||
Net Income (Loss)
|
228.0
|
|
228.0
|
|
(2.3
|
)
|
21.2
|
|
(246.9
|
)
|
228.0
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Comprehensive Income (Loss)
|
$
|
186.1
|
|
$
|
186.1
|
|
$
|
16.8
|
|
$
|
(65.7
|
)
|
$
|
(137.2
|
)
|
$
|
186.1
|
|
|
Year Ended December 31, 2015
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
Net Sales
|
$
|
—
|
|
$
|
3,363.6
|
|
$
|
1.6
|
|
$
|
1,037.2
|
|
$
|
(242.2
|
)
|
$
|
4,160.2
|
|
Cost of Sales
|
—
|
|
2,730.2
|
|
(1.1
|
)
|
884.2
|
|
(242.2
|
)
|
3,371.1
|
|
||||||
Selling, General and Administrative
|
—
|
|
274.9
|
|
2.5
|
|
70.3
|
|
—
|
|
347.7
|
|
||||||
Other (Income) Expense, Net
|
—
|
|
(10.7
|
)
|
—
|
|
3.0
|
|
—
|
|
(7.7
|
)
|
||||||
Business Combinations and Shutdown and Other Special Charges, Net
|
—
|
|
6.1
|
|
—
|
|
15.9
|
|
—
|
|
22.0
|
|
||||||
Income from Operations
|
—
|
|
363.1
|
|
0.2
|
|
63.8
|
|
—
|
|
427.1
|
|
||||||
Interest Expense, Net
|
—
|
|
(64.9
|
)
|
—
|
|
(2.9
|
)
|
—
|
|
(67.8
|
)
|
||||||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
—
|
|
298.2
|
|
0.2
|
|
60.9
|
|
—
|
|
359.3
|
|
||||||
Income Tax Expense
|
—
|
|
(115.8
|
)
|
(0.2
|
)
|
(14.4
|
)
|
—
|
|
(130.4
|
)
|
||||||
Income before Equity Income of Unconsolidated Entity
|
—
|
|
182.4
|
|
—
|
|
46.5
|
|
—
|
|
228.9
|
|
||||||
Equity Income of Unconsolidated Entity
|
—
|
|
—
|
|
—
|
|
1.2
|
|
—
|
|
1.2
|
|
||||||
Equity in Net Earnings of Subsidiaries
|
230.1
|
|
47.7
|
|
(1.3
|
)
|
—
|
|
(276.5
|
)
|
—
|
|
||||||
Net Income (Loss)
|
$
|
230.1
|
|
$
|
230.1
|
|
$
|
(1.3
|
)
|
$
|
47.7
|
|
$
|
(276.5
|
)
|
$
|
230.1
|
|
|
|
|
|
|
|
|
||||||||||||
Comprehensive Income (Loss)
|
$
|
219.0
|
|
$
|
219.0
|
|
$
|
(5.9
|
)
|
$
|
(2.7
|
)
|
$
|
(210.4
|
)
|
$
|
219.0
|
|
|
Year Ended December 31, 2017
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
||||||||||||
Current Assets:
|
|
|
|
|
|
|
||||||||||||
Cash and Cash Equivalents
|
$
|
23.3
|
|
$
|
1.2
|
|
$
|
—
|
|
$
|
42.9
|
|
$
|
—
|
|
$
|
67.4
|
|
Receivables, Net
|
—
|
|
82.9
|
|
—
|
|
339.9
|
|
—
|
|
422.8
|
|
||||||
Inventories, Net
|
—
|
|
417.8
|
|
—
|
|
216.2
|
|
—
|
|
634.0
|
|
||||||
Intercompany
|
—
|
|
1,232.0
|
|
204.3
|
|
—
|
|
(1,436.3
|
)
|
—
|
|
||||||
Other Current Assets
|
—
|
|
33.6
|
|
—
|
|
12.1
|
|
—
|
|
45.7
|
|
||||||
Total Current Assets
|
23.3
|
|
1,767.5
|
|
204.3
|
|
611.1
|
|
(1,436.3
|
)
|
1,169.9
|
|
||||||
Property, Plant and Equipment, Net
|
—
|
|
1,532.9
|
|
0.1
|
|
334.2
|
|
—
|
|
1,867.2
|
|
||||||
Investment in Consolidated Subsidiaries
|
1,711.9
|
|
—
|
|
13.0
|
|
—
|
|
(1,724.9
|
)
|
—
|
|
||||||
Goodwill
|
—
|
|
1,154.8
|
|
—
|
|
168.2
|
|
—
|
|
1,323.0
|
|
||||||
Other Assets
|
—
|
|
362.1
|
|
—
|
|
140.8
|
|
—
|
|
502.9
|
|
||||||
Total Assets
|
$
|
1,735.2
|
|
$
|
4,817.3
|
|
$
|
217.4
|
|
$
|
1,254.3
|
|
$
|
(3,161.2
|
)
|
$
|
4,863.0
|
|
|
|
|
|
|
|
|
||||||||||||
LIABILITIES
|
|
|
|
|
|
|
||||||||||||
Current Liabilities:
|
|
|
|
|
|
|
||||||||||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
—
|
|
$
|
51.5
|
|
$
|
—
|
|
$
|
9.8
|
|
$
|
—
|
|
$
|
61.3
|
|
Accounts Payable
|
—
|
|
381.7
|
|
—
|
|
134.8
|
|
—
|
|
516.5
|
|
||||||
Interest Payable
|
—
|
|
14.3
|
|
—
|
|
0.6
|
|
—
|
|
14.9
|
|
||||||
Intercompany
|
420.0
|
|
—
|
|
—
|
|
1,033.1
|
|
(1,453.1
|
)
|
—
|
|
||||||
Other Accrued Liabilities
|
23.3
|
|
166.5
|
|
—
|
|
68.9
|
|
—
|
|
258.7
|
|
||||||
Total Current Liabilities
|
443.3
|
|
614.0
|
|
—
|
|
1,247.2
|
|
(1,453.1
|
)
|
851.4
|
|
||||||
Long-Term Debt
|
—
|
|
2,082.3
|
|
—
|
|
130.9
|
|
—
|
|
2,213.2
|
|
||||||
Deferred Income Tax Liabilities
|
—
|
|
295.0
|
|
—
|
|
26.8
|
|
—
|
|
321.8
|
|
||||||
Other Noncurrent Liabilities
|
—
|
|
114.1
|
|
—
|
|
70.6
|
|
—
|
|
184.7
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
EQUITY
|
|
|
|
|
|
|
||||||||||||
Total Equity
|
1,291.9
|
|
1,711.9
|
|
217.4
|
|
(221.2
|
)
|
(1,708.1
|
)
|
1,291.9
|
|
||||||
Total Liabilities and Equity
|
$
|
1,735.2
|
|
$
|
4,817.3
|
|
$
|
217.4
|
|
$
|
1,254.3
|
|
$
|
(3,161.2
|
)
|
$
|
4,863.0
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||
In millions
|
Parent
|
Subsidiary Issuer
|
Combined Guarantor Subsidiaries
|
Combined Nonguarantor Subsidiaries
|
Consolidating Eliminations
|
Consolidated
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
||||||||||||
Current Assets:
|
|
|
|
|
|
|
||||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
$
|
0.9
|
|
$
|
1.2
|
|
$
|
57.0
|
|
$
|
—
|
|
$
|
59.1
|
|
Receivables, Net
|
—
|
|
183.7
|
|
10.1
|
|
233.0
|
|
—
|
|
426.8
|
|
||||||
Inventories, Net
|
—
|
|
403.8
|
|
16.1
|
|
163.0
|
|
—
|
|
582.9
|
|
||||||
Intercompany
|
—
|
|
1,077.5
|
|
73.3
|
|
—
|
|
(1,150.8
|
)
|
—
|
|
||||||
Other Current Assets
|
—
|
|
36.4
|
|
—
|
|
9.7
|
|
—
|
|
46.1
|
|
||||||
Total Current Assets
|
—
|
|
1,702.3
|
|
100.7
|
|
462.7
|
|
(1,150.8
|
)
|
1,114.9
|
|
||||||
Property, Plant and Equipment, Net
|
—
|
|
1,435.8
|
|
64.1
|
|
252.0
|
|
—
|
|
1,751.9
|
|
||||||
Investment in Consolidated Subsidiaries
|
1,362.9
|
|
—
|
|
12.3
|
|
—
|
|
(1,375.2
|
)
|
—
|
|
||||||
Goodwill
|
—
|
|
1,098.9
|
|
55.5
|
|
105.9
|
|
—
|
|
1,260.3
|
|
||||||
Other Assets
|
—
|
|
314.8
|
|
65.6
|
|
95.9
|
|
—
|
|
476.3
|
|
||||||
Total Assets
|
$
|
1,362.9
|
|
$
|
4,551.8
|
|
$
|
298.2
|
|
$
|
916.5
|
|
$
|
(2,526.0
|
)
|
$
|
4,603.4
|
|
|
|
|
|
|
|
|
||||||||||||
LIABILITIES
|
|
|
|
|
|
|
||||||||||||
Current Liabilities:
|
|
|
|
|
|
|
||||||||||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
—
|
|
$
|
26.0
|
|
$
|
—
|
|
$
|
37.4
|
|
$
|
—
|
|
$
|
63.4
|
|
Accounts Payable
|
—
|
|
354.3
|
|
8.5
|
|
103.7
|
|
—
|
|
466.5
|
|
||||||
Interest Payable
|
—
|
|
15.4
|
|
—
|
|
—
|
|
—
|
|
15.4
|
|
||||||
Intercompany
|
306.4
|
|
—
|
|
—
|
|
913.0
|
|
(1,219.4
|
)
|
—
|
|
||||||
Other Accrued Liabilities
|
—
|
|
163.2
|
|
3.0
|
|
68.3
|
|
—
|
|
234.5
|
|
||||||
Total Current Liabilities
|
306.4
|
|
558.9
|
|
11.5
|
|
1,122.4
|
|
(1,219.4
|
)
|
779.8
|
|
||||||
Long-Term Debt
|
—
|
|
2,042.4
|
|
—
|
|
46.1
|
|
—
|
|
2,088.5
|
|
||||||
Deferred Income Tax Liabilities
|
—
|
|
342.1
|
|
43.3
|
|
22.6
|
|
—
|
|
408.0
|
|
||||||
Other Noncurrent Liabilities
|
—
|
|
245.5
|
|
—
|
|
25.1
|
|
—
|
|
270.6
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
EQUITY
|
|
|
|
|
|
|
||||||||||||
Total Equity
|
1,056.5
|
|
1,362.9
|
|
243.4
|
|
(299.7
|
)
|
(1,306.6
|
)
|
1,056.5
|
|
||||||
Total Liabilities and Equity
|
$
|
1,362.9
|
|
$
|
4,551.8
|
|
$
|
298.2
|
|
$
|
916.5
|
|
$
|
(2,526.0
|
)
|
$
|
4,603.4
|
|
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, 2017
|
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, 2017.
|
Exhibit
Number
|
Description
|
2.1
|
|
3.1
|
|
3.2
|
|
3.3
|
|
3.4
|
|
3.5
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
10.1*
|
|
10.2*
|
|
10.3*
|
|
10.4*
|
|
10.5*
|
|
10.6*
|
|
10.7*
|
|
10.8*
|
|
10.9*
|
|
10.10
|
|
10.11*
|
|
10.12*
|
|
10.13*
|
|
10.14
|
|
10.15*
|
|
10.16*
|
|
10.17
|
|
10.18*
|
10.19*
|
|
10.20*
|
|
10.21
|
|
10.22
|
|
10.23
|
|
10.24*
|
|
10.25*
|
|
10.26*
|
|
10.27*
|
|
10.28*
|
|
10.29*
|
|
10.30*
|
|
10.31*
|
|
10.32*
|
|
10.33*
|
|
10.34
|
|
10.35
|
10.36
|
|
10.37*
|
|
10.38*
|
|
10.39
|
|
10.40
|
|
10.41
|
|
10.42*
|
|
10.43
|
|
10.44
|
|
10.45
|
|
10.46
|
|
10.47
|
|
10.48
|
|
10.49
|
|
10.50
|
10.51*
|
|
10.52*
|
|
10.53*
|
|
10.54*
|
|
10.55*
|
|
14.1
|
|
21.1
|
|
23.1
|
|
24.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
|
|
/s/ Stephen R. Scherger
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
February 7, 2018
|
Stephen R. Scherger
|
|
|
|
|
|
/s/ Michael P. Doss
|
President and Chief Executive Officer
(Principal Executive Officer)
|
February 7, 2018
|
Michael P. Doss
|
|
|
|
|
|
/s/ Stephen R. Scherger
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
February 7, 2018
|
Stephen R. Scherger
|
|
|
|
|
|
/s/ Deborah R. Frank
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
February 7, 2018
|
Deborah R. Frank
|
|
Signatures
|
Title
|
Date
|
|
|
|
/s/ G. Andrea Botta
|
Director
|
February 7, 2018
|
G. Andrea Botta
|
|
|
|
|
|
/s/ David D. Campbell
|
Director
|
February 7, 2018
|
David D. Campbell
|
|
|
|
|
|
/s/ Paul D. Carrico
|
Director
|
February 7, 2018
|
Paul D. Carrico
|
|
|
|
|
|
/s/ Michael P. Doss
|
Director, President and Chief Executive Officer
|
February 7, 2018
|
Michael P. Doss
|
|
|
|
|
|
/
s
/
Robert A. Hagemann
|
Director
|
February 7, 2018
|
Robert A. Hagemann
|
|
|
|
|
|
/s/ Peter Kelly
|
Director
|
February 7, 2018
|
Peter Kelly
|
|
|
|
|
|
/s/ Philip R. Martens
|
Chairman of the Board
|
February 7, 2018
|
Philip R. Martens
|
|
|
|
|
|
/s/ Larry M. Venturelli
|
Director
|
February 7, 2018
|
Larry M. Venturelli
|
|
|
|
|
|
/s/ Lynn A. Wentworth
|
Director
|
February 7, 2018
|
Lynn A. Wentworth
|
|
|
|
|
|
1.
|
Subject to the terms of this Amendment, the Altivity Agreement is hereby terminated as of the Amendment Date by mutual agreement of the Parties.
|
2.
|
Data that were "Aitivity Data" under Section 7.1 of the Altivity Agreement shall be deemed GPI Data.
|
3.
|
Information that was "Confidential Information" of Altivity or Perot Systems under Section 10.1 of the Altivity Agreement, subject to the exceptions defined in Section 10.3(a) of the Altivity Agreement, shall be Confidential Information ofGPI or Perot Systems, respectively, under the GPI Agreement.
|
4.
|
Subject to Section 5 of this Amendment, "Charges" as defined in and incurred under the Altivity Agreement before the Amendment Date and not previously paid by Altivity shall be deemed "Charges" payable by GPI under the GPI Agreement; provided that GPI shall retain the right to dispute any such amounts in accordance with Section 4.3 (Disputed Invoices) of the GPI Agreement.
|
5.
|
The modified charges payable by GPI under the GPI Agreement as a result of the consummation of the transactions contemplated by this Amendment shall apply beginning September I, 2008. Accordingly, any Monthly Base Charges (as defined in the Altivity Agreement) previously invoiced by Perot Systems under the Altivity Agreement for the month of September 2008 and any Monthly Service Charges (as defined in the GPI Agreement) previously invoiced by Perot Systems under the GPI Agreement for the month of September 2008 shall be deemed void, and shall be
|
6.
|
The Service Levels under the GPI Agreement as a result of the consummation of the transactions contemplated by this Amendment shall apply (including, without limitation, for purposes of determining the accrual of Service Level Credits and reporting obligations) beginning on the effective dates specified in Attachment A to Schedule 2.10 (Service Level Agreement) to the GPI Agreement, as amended by this Amendment (the "SLA Effective Dates"). Service Levels with SLA Effective Dates later than September 1, 2008 (collectively, the "Combined Scope Service Levels") represent combinations of Service Levels in effect prior to the Amendment Date under the Altivity Agreement and under the GPI Agreement (collectively, the "Legacy Service Levels"). From September 1, 2008 until such time as each Combined Scope Service Level takes effect on its SLA Effective Date, the Legacy Service Levels combined to create such Combined Scope Service Level will continue to apply; provided that, in the event during such period there occurs a Service Level Failure (as defined in the GPI Agreement) or Service Level Default (as defined in the Altivity Agreement) of any such Legacy Service Level, the amount of the resulting Service Level Credit (as defined in the GPI Agreement) will equal 50% of the Service Level Credit that would have accrued in the event of a Service
|
7.
|
The following amendments are hereby made to Section 5.2 (Charges Renegotiation) of the Agreement:
|
a.
|
The following sentence is hereby added to the end of Section 5.2(a) (Underutilization of Resource Units) of the Agreement: "With respect to RS6000 Server Services such renegotiation right will be triggered when the consumption for all types ofRS6000 LPARs is less than sixty-five percent (65%) of the cumulative Baselines for all types ofRS6000 LPARs for three (3) consecutive months or for five (5) months in any seven (7) month period, and such reduced resource utilization is anticipated by GPI to continue on a long term basis."
|
b.
|
The following sentence is hereby added to the end of Section 5.2(b) (Excess Utilization of Resource Units) ofthe Agreement: "With respect to RS6000 Server Services such renegotiation right will be triggered when the consumption for all types ofRS6000 LPARs is greater than 135% of the cumulative Baselines for all types ofRS6000 LPARs for three (3) consecutive months or for five (5) months
|
8.
|
Subject to the tenns of this Amendment, only the following sections of the Altivity Agreement shall survive its termination, and only as to rights and obligations arising out of acts, omissions, conditions or events occurring or existing before the Amendment Date, with GPI succeeding to Altivity's rights and obligations under such sections:
|
a.
|
3.14 (Compliance with Laws),
|
b.
|
4.11 (Govenunent Contract Flow-Down Clauses),
|
c.
|
5.5 (Audit Rights) excluding 5.5(b) and, as to operational audits only, 5.5(d) (provided that the Parties acknowledge and agree that GPI' s right to conduct operational audits pursuant to Section 14.1 of the GPI Agreement shall include operational audits pertaining to Altivity, including operational audits related to
|
d.
|
7 (Altivity Data),
|
e.
|
8.1 (Altivity Owned Materials),
|
f.
|
8.2 (Ownership of Developed Materials),
|
g.
|
8.4 (License to Service Provider),
|
h.
|
8.5 (Service Provider Pre-Existing Materials),
|
k.
|
10.3 (Exceptions to Confidential Treatment),
|
I.
|
11 (Representations and Warranties), except that any warranty under 11.7 shall not extend beyond the Amendment Date,
|
m.
|
13.1 (Indemnity by Service Provider),
|
n.
|
13.2 (Indemnity by Altivity),
|
o.
|
13.3 (Additional Indemnities),
|
p.
|
13.4 (Infringement),
|
q.
|
Article 14 (Sections 14.1-14.7) (Liability);
|
r.
|
16.1 (Force Majeure),
|
s.
|
18.6 (Relationship of the Parties),
|
u.
|
18.12 (Order of Precedence),
|
v.
|
18.13 (Waiver of Default; Cumulative Remedies),
|
w.
|
18.14 (Third Party Beneficiaries),
|
x.
|
18.19 (Binding Nature and Assignment),
|
y.
|
18.21 (Entire Agreement), and
|
z.
|
18.23 (Covenant of Good Faith).
|
9.
|
From and after the Amendment Date, (i) "Altivity Owned Materials" existing under and as defined in the Altivity Agreement shall be deemed to be "GPI Software" and/or "GPI Tools," as applicable, under and as defined in the GPI Agreement; (ii) "Service Provider Owned Materials" existing under and as defined in the Altivity Agreement shall be deemed to be "Perot Systems Software" and/or "Perot Systems Tools," as applicable, under and as defined
|
10.
|
The terms and conditions relating to "Transitioned Employees" (as defined in the Altivity Agreement) in Section 4.6 (Training/Career Opportunities), Section 13.l(k)
|
11.
|
Any Projects that are being performed pursuant to the Altivity Agreement as of the Amendment Date shall continue to be performed by Perot Systems in accordance with the applicable Statement of Work or Project Plans under which such Projects were commissioned.
|
12.
|
For purposes of calculating the Damages Limitation defined in the first sentence of Section 18.2(a) of the GPI Agreement during the first twelve months after the Amendment Date, "Charges" as defined in the GPI Agreement shall be calculated so as to include the total "Charges" as defined in the Altivity Agreement that were payable to Perot Systems for performance of the Services under the Altivity Agreement (exclusive of Out-of-Pocket Expenses, Pass-Through Expenses, cost-plus Charges or taxes as those terms are defined in the Altivity Agreement) for the period between (i) twelve months prior to the assertion of the claim and (ii) the Amendment Date.
|
13.
|
Any disputes that arise under the Altivity Agreement after the Amendment Date relating to periods prior thereto shall be administered in accordance with the Dispute Resolution Procedures in the GPI Agreement. Any indemnity proceedings arising under the terms of the Altivity Agreement after the Amendment Date relating to periods prior thereto shall be administered in accordance with the indemnification procedures set forth in Section
|
14.
|
Schedule A is amended by adding the following sentence to the definition of "Operational Change Control Procedures":
|
15.
|
Section 15.11(b) of the GPI Agreement is amended, by adding the phrase "the amount set forth in Schedule 15.11(b) for the month in which the effective date of termination occurs," to state as follows:
|
"(b)
|
Notwithstanding anything to the contrary in this Agreement, regardless of the grounds for any termination, GPI shall pay Perot Systems for all Charges payable by GPI arising prior to the effective date of termination, any accrued and unpaid Transition Fees applicable to Transition tasks completed by Perot Systems prior to the effective date of termination, any Charges for Termination Assistance (which could include payment for Designated Services), the amount set forth in
|
16.
|
Section 8.3(a)(i) of the GPI Agreement is amended by adding the following after the end of the second sentence:
|
17.
|
The following Schedules and Attachments of the GPI Agreement are an1ended and restated, or added, as of the Amendment Date and, as so amended and restated or added, are attached hereto and made part hereof:
|
(a)
|
"personal data", "special categories of data", "process/processing", "controller", "processor", "data subject" and "supervisory authority" shall have the same meaning as in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data;
|
(b)
|
"the data exporter" shall mean the controller who transfers the personal data;
|
(c)
|
"the data importer" shall mean the processor who agrees to receive from the data exporter personal data intended for processing on his behalf after the transfer in accordance with his instructions and the terms of these Clauses and who is not subject to a third country's system ensuring to adequate protection within the meaning of Article 25(1) of Directive 95/46/EC;
|
(d)
|
"the sub-processor" means any processor engaged by the data importer or by any other sub-processor of the data importer who agrees to receive from the data importer or from any other sub-processor of the data importer personal data exclusively intended for processing activities to be
|
(e)
|
"the applicable data protection law" means the legislation protecting the fundamental rights and freedoms of individuals and, in particular, their right to privacy with respect to the processing of personal data applicable to a data controller in the Member State in which the data exporter is established; and
|
1.
|
The data subject can enforce against the data exporter this Clause, Clause 4(b) to (i), Clause 5(a) to (e), and (g) to
0),
Clause 6(1) and (2), Clause 7, Clause 8(2), and Clauses 9 to 12 as third-party beneficiary.
|
2.
|
The data subject can enforce against the data importer this Clause, Clause 5(a) to (e) and (g), Clause 6, Clause 7, Clause 8(2), and Clauses 9 to 12, in cases where the data exporter has factually disappeared or has ceased to exist in law unless any successor entity has assumed the entire legal obligations of the data exporter by contract or by operation of law, as a result of which it takes on the rights and obligations of the data exporter, in which case the data subject can enforce them against such entity.
|
3.
|
The data subject can enforce against the sub-processor this Clause, Clause 5(a) to (e) and (g), Clause 6, Clause 7, Clause 8(2), and Clauses 9 to 12, in cases where both the data exporter and the data importer have factually disappeared or ceased to exist in law or have become insolvent, unless any successor entity has assumed the entire legal obligations of the data exporter by contract or by operation of law as a result of which it takes on the rights and obligations of the data exporter, in which case the data subject can enforce them against such entity. Such third-party liability of the sub-processor shall be limited to outs own processing operations under the Clauses.
|
4.
|
The Parties do not object to a data subject being represented by an association or other body if the data subject so expressly wishes and if permitted by national law.
|
(a)
|
that the processing, including the transfer itself, of the personal data has been and will continue to be carried out in accordance with the relevant provisions of the applicable data protection law (and,
|
(b)
|
that it has instructed and throughout the duration of the personal data processing services will instruct the data importer to process the personal data transferred only on the data exporter's behalf and in accordance with the applicable data protection law and the Clauses;
|
(c)
|
that the data importer will provide sufficient guarantees in respect of the technical and organisational security measures specified in Appendix 2 to this Schedule 4;
|
(d)
|
that after assessment of the requirements of the applicable data protection law, the security measures are appropriate to protect personal data against accidental or unlaw1ul destruction or accidental loss, alteration, unauthorised disclosure or access, in particular where the processing involves the transmission of data over a network, and against all other unlaw1ul forms of processing, and that these measures ensure a level of security appropriate to the risks presented by the processing and the nature of the data to be protected having regard to the state of the art and the cost of their implementation;
|
1
|
Schedule 10.9
|
(e)
|
that it will ensure compliance with the security measures;
|
(f)
|
that, if the transfer involves special categories of data, the data subject has been informed or will be informed before, or as soon as possible after, the transfer that its data could be transmitted to a third country not providing adequate protection within the meaning of Directive 95/46/EC;
|
(g)
|
to forward any notification received from the data importer or any sub-processor pursuant to Clause 5(b) and Clause 8(3) to the data protection supervisory authority if the data exporter decides to continue the transfer or to lift the suspension;
|
(h)
|
to make available to the data subjects upon request a copy of the Clauses, with the exception of Appendix 2, and a summary description of the security measures, as well as a copy of any contract for sub-processing services which has to be made in accordance with the Clauses, unless the Clauses or the contract contain commercial information, in which case it may remove such commercial information;
|
(i)
|
that, in the event of sub-processing, the processing activity is carried out in accordance with Clause 11 by a sub-processor providing at least the same level of protection for the personal data and the rights of data subject as the data importer under the Clauses; and
|
(a)
|
to process the personal data only on behalf of the data exporter and in compliance with its
|
(b)
|
that it has no reason to believe that the legislation applicable to it prevents it from fulfilling the instructions received from the data exporter and its obligations under the contract and that in the event of a change in this legislation which is likely to have a substantial adverse effect on the warranties and obligations provided by the Clauses, it will promptly notify the change to the data
|
(c)
|
that it has implemented the technical and organisational security measures specified in Appendix 2 before processing the personal data transferred; ·
|
(d)
|
that it will promptly notify the data exporter about:
|
(i)
|
any legally binding request for disclosure of the personal data by a law enforcement authority unless otherwise prohibited, such as a prohibition under criminal law to preserve the confidentiality of a law enforcement investigation;
|
2
|
Schedule 10.9
|
(e)
|
to deal promptly and properly with all inquiries from the data exporter relating to its processing of the personal data subject to the transfer and to abide by the advice of the supervisory authority with regard to the processing of the data transferred;
|
(a)
|
at the request of the data exporter to submit its data processing facilities for audit of the processing activities covered by the Clauses which shall be carried out by the data exporter or an inspection body composed of independent members and in possession of the required professional qualifications bound by a duty of confidentiality, selected by the data exporter, where applicable, in agreement with the supervisory authority;
|
(b)
|
to make available to the data subject upon request a copy of the Clauses, or any existing contract for sub-processing, unless the Clauses or contract contain commercial information, in which case it may remove such commercial information, with the exception of Appendix 2 which shall be replaced by a summary description of the security measures in those cases where the data subject is unable to obtain a copy from the data exporter;
|
(c)
|
that, in tlie event of sub-processing, it has previously informed the data exporter and obtained its prior written consent; ·
|
(d)
|
that the processing services by the sub-processor will be carried out in accordance with Clause 11; and
|
U)
|
to send promptly a copy of any sub-processor agreement it concludes under the Clauses to the data exporter.
|
1.
|
The Parties agree that a data subject, who has suffered damage as a result of any breach of the obligations referred to in Clause 3 or in Clause 11 by any party or sub-processor is entitled to receive compensation from the data exporter for the damage suffered_
|
2.
|
If a data subject is not able to bring a claim for compensation in accordance with paragraph 1 against the data exporter, arising out of a breach by the data importer or his sub-processor of any of their obligations referred to in Clause
3
or in Clause 11, because the data exporter has factually disappeared or ceased to exist in law or has become insolvent, the data importer agrees that the data subject may issue a claim against the data importer as if it were the data exporter, unless any
|
3.
|
If a data subject is not able to bring a claim against the data exporter or the data importer referred to in paragraphs 1 and 2, arising out of a breach by the sub-processor of any of their obligations referred to in Clause
3
or in Cause 11 because both the data exporter and the data importer have factually disappeared or ceased to exist in law or have become insolvent, the sub-processor agrees that the data subject may issue a claim against the data sub-processor with regard to its own processing operations under the Clauses as if it were the data exporter or the data importer, unless any successor entity has assumed the entire legal obligations of the data exporter or data importer by contract or by operation of law, in which case the data subject an enforce its rights against such entity. The liability of the sub-processor shall be limited to its own processing operations under the Clauses.
|
1.
|
The data importer agrees that if the data subject invokes against it third-party beneficiary rights and/or claims compensation for damages under the Clauses, the data importer will accept the decision of the data subject:
|
(a)
|
to refer the dispute to mediation, by an independent person or, where applicable, by the supervisory authority;
|
(b)
|
to refer the dispute to the courts in the Member State in which the data exporter is established.
|
2.
|
The Parties agree that the choice made by the data subject will not prejudice its substantive or procedural rights to seek remedies in accordance with other provisions of national or international law.
|
1.
|
The data exporter agrees to deposit a copy of this contract with the supervisory authority if it so requests or if such deposit is required under the applicable data protection law.
|
2.
|
The Parties agree that the supervisory authority has the right to conduct an audit of the data importer, and of any sub-processor, which has the same scope and is subject to the same conditions as would apply to an audit of the data exporter under the applicable data protection law.
|
3.
|
The data importer shall promptly inform the data exporter about the existence of legislation applicable to it or any sub-processor preventing the conduct of an audit of the data importer, or any sub-processor, pursuant to paragraph 2.
In
such a case the data exporter shall be entitled to take the measures foreseen in Clause 5(b).
|
1.
|
The data importer shall not subcontract any of its processing operations performed on behalf of the data exporter under the Clauses without the prior written consent of the data exporter. Where the data importer subcontracts its obligations under the Clauses, with the consent of the data exporter, it shall do so only by way of a written agreement with the sub-processor which imposes
|
2.
|
The prior written contract between the data importer and the sub-processor shall also provide for a third-party beneficiary clause as laid down in Clause 3 for cases where the data subject is not able to bring the claim for compensation referred to in paragraph 1 of Clause 6 against the data exporter or the data importer because they have factually disappeared or have ceased to exist in law or have become insolvent and no successor entity has assumed the entire legal obligations of the data exporter or data importer by contract or by operation of law. Such third-party liability of the sub-processor shall be limited to its own processing operations under the Clauses.
|
3.
|
The provisions relating to data protection aspects for sub-processing of the contract referred to in paragraph 1 shall be governed by the law of the Member State in which the data exporter is established.
|
4.
|
The data exporter shall keep a list of sub-processing agreements concluded under the Clauses and notified by the data importer pursuant to Clause 50), which shall be updated at least once a year. The list shall be available to the data exporter's data protection supervisory authority.
|
1.
|
The Parties agree that on the termination of the provision of data processing services, the data importer and the sub-processor shall, at the choice of the data exporter, return all the personal data transferred and the copies thereof to the data exporter or shall destroy all the personal data and certify to the data exporter that it has done so, unless legislation imposed upon the data importer prevents it from returning or destroying all or part of the personal data transferred. In that case, the data importer warrants that it will guarantee the confidentiality of the personal data transferred and will not actively process the personal data transferred anymore.
|
2.
|
The data importer and the sub-processor warrant that upon the request of the data exporter and/or of the supervisory authority, it will submit its data-processing facilities for an audit of the measures referred to in paragraph 1.
|
1
|
Schedule 10.9
|
•
|
Past, present and prospective employees, volunteers, interns and partners.
|
•
|
Past, present and prospective clients.
|
•
|
Past, present and potential advisors, consultants, suppliers, contractors, subcontractors and agents.
|
•
|
Complainants, correspondents, visitors and enquirers.
|
•
|
Contact details (which may include name, address, email address, telephone, fax, emergency contact details and associated local time zone information).
|
•
|
Employment details (which may include company name, job title, grade, demographic, time recording and location data, nationality and export compliance status).
|
•
|
IT systems and operational information (which may include voice, video and data recordings, user ID and password details, computer name, domain name, IP address, software and hardware inventory, security camera and software usage pattern tracking information, i.e. cookies, and information recorded for operational or training purposes).
|
•
|
Data subjects' email content, online interactive and voice communications (such as blogs, chat, webcam and networking sessions) and transmission data which is available on an incidental basis for the provision of information technology consultancy, support and services (incidental access may include accessing the content of email communications and data relating to the sending, routing and delivery of emails).
|
•
|
Details of goods or services provided to or for the benefit of data subjects.
|
•
|
Financial and government and tax identifier details (e.g. credit, payment, bank details and Nl or social security number).
|
2
|
Schedule 10.9
|
1.
|
Strategy and Compliance with policies/standards and regulations, awareness and education, risk assessments and management, contract security requirements management, application and infrastructure consulting, assurance testing and drives the security direction of the company.
|
2.
|
Security testing, design and implementation of security solutions to enable security controls adoption across the environment.
|
3.
|
Security operations of implemented security solutions, the environment and assets, and manage incident response.
|
4.
|
Forensic investigations with security operations, legal, data protection and human resources for investigations including eDiscovery and eForensics.
|
•
|
Information Assets, such as identified databases, disaster recovery plans, business continuity plans, data classification, archived information.
|
•
|
Software Assets, such as identified applications and system software.
|
•
|
Physical Assets, such as identified servers, desktops/laptops, backup/archival tapes, printers and communications equipment.
|
1
|
Schedule 10.9
|
safeguards.
|
These may include controls such as access management, encryption, logging and monitoring, and
|
2
|
Schedule 10.9
|
2.
|
Payment Terms.
|
2.
|
Section4.3(e) is deleted in its entirety and replaced with the following:
|
5.
|
Data Transfer Agreement.
New Section 10.9 (Data Transfer Agreement)
IS
|
1.
|
Termination Assistance.
|
2.
|
Data
Loss
Event
|
2.
|
Section 18.2(b) is deleted in its entirety and replaced by the following:
|
(i)
|
If to GPI:
|
(ii)
|
If to Dell:
|
(1)
|
A Non-Grandfathered Member means:
|
(a)
|
A Member who is in active employment, is on an approved leave of absence or layoff or is on a military leave provided
|
(ii)
|
whose age measured in years (including fractional years) plus his years (including fractional years) of Benefit Service is at least equal to 70.
|
(b)
|
A Member other than a Member described in subsection (1)(a) above who elects on or before December 31, 2012 to waive participation under this Appendix C and become a Non-Grandfathered Member in accordance with subsection (3)(a) hereof.
|
(c)
|
A Member other than a Member described in subsection (1)(a) above who elects on or before December 31, 2017 to waive participation under this Appendix C and become a Non-Grandfathered Member in accordance with subsection (3)(b) hereof.
|
(2)
|
Applicable Freeze Date means:
|
(a)
|
December 31, 2012, with respect to a Non-Grandfathered Member described in subsection (1)(a) hereof;
|
(b)
|
December 31, 2012, with respect to a Non-Grandfathered Member described in subsection (1)(b) hereof; and
|
(c)
|
December 31, 2017, with respect to a Non-Grandfathered Member described in subsection (1)(c) hereof.
|
(3)
|
(a) A Member other than a Non-Grandfathered Member described in subsection (1)(a) will be eligible to make an irrevocable election on or before December 31, 2012, to waive participation under this Appendix C and by doing so shall become a Non-Grandfathered Member and shall cease to accrue Benefit Service on and after January 1, 2013.
|
(b)
|
A Member other than a Non-Grandfathered Member described in subsection (1)(a) who failed to make an irrevocable election in accordance with subsection (3)(a) above will again be eligible to make an irrevocable election on or before December 31, 2017, to waive participation under this Appendix C and by doing so shall become a Non-
|
(4)
|
Notwithstanding any provision of the Plan to the contrary, benefit accruals shall cease under this Appendix C as of the Applicable Freeze Date for all Non-Grandfathered Members. Non-Grandfathered Members shall not be credited with Benefit Service for any period of service or period of absence under this Appendix C after his Applicable Freeze Date.
|
(5)
|
Effective September 10, 2012, this Appendix C shall be closed to new Members. In addition any Employee who is hired, any Employee who is re-employed or who would otherwise become an Eligible Employee as a result of a transfer as described in Section 4.08 of the Plan on or after September 10, 2012 shall not be credited with Benefit Service under this Appendix C of the Plan for any period after September 10, 2012.
|
(6)
|
Notwithstanding any provision of the Plan to the contrary, a Non-Grandfathered Member who terminates from active employment with the Employer as an Employee on account of Total and Permanent Disability after his Applicable Freeze Date shall not be eligible for a Disability Retirement.
|
(7)
|
Notwithstanding any provisions of the Plan to the contrary, in calculating the benefit payable to or on behalf of a Non-Grandfathered Member under the Plan after his Applicable Freeze Date, the following rules shall apply:
|
(a)
|
Benefit Service for benefit accrual purposes and the Monthly Rate shall be frozen as of his Applicable Freeze Date; and
|
(b)
|
Vesting Service shall continue to be credited under the terms of this Appendix C for purpose of determining his eligibility for a pension under this Appendix C on and after his Applicable Freeze Date.
|
Subsidiary Name
|
|
Jurisdiction of Incorporation
|
Altivity Packaging Grupo, S. de R.L. de C.V.
|
|
Mexico
|
Altivity Packaging Servicios, S. de R.L. de C.V.
|
|
Mexico
|
Bond Project Holdings, LLC
|
|
Delaware
|
Field Container Queretaro (USA), L.L.C.
|
|
Delaware
|
Gbox SA de C.V.
|
|
Mexico
|
Golden Equities, LLC
|
|
Colorado
|
Golden Technologies Company, LLC
|
|
Colorado
|
GPI Funding, LLC
|
|
Delaware
|
GPI Holding I, Inc.
|
|
Delaware
|
GPI Holding II, Inc.
|
|
Delaware
|
GPI Holding III, LLC
|
|
Delaware
|
GPI Project, LLC
|
|
Delaware
|
GPI Netherlands Finance B.V.
|
|
Netherlands
|
GPI Scotland Finance LP
|
|
UK
|
GPI Scotland Limited
|
|
UK
|
Graphic Packaging Flexible Canada ULC
|
|
Canada
|
Graphic Packaging Flexible Holdings, LLC
|
|
Delaware
|
Graphic Packaging International (Shanghai) Co., Ltd.
|
|
China
|
Graphic Packaging International Australia Converting Limited
|
|
Australia
|
Graphic Packaging International Australia Pty Limited
|
|
Australia
|
Graphic Packaging International Bardon Limited
|
|
UK
|
Graphic Packaging International Box Holdings Limited
|
|
UK
|
Graphic Packaging International Bremen GmbH
|
|
Germany
|
Graphic Packaging International Canada Corporation
|
|
Canada
|
Graphic Packaging International Canada, ULC
|
|
Canada
|
Graphic Packaging International Cartons Santander, S.A.
|
|
Spain
|
Graphic Packaging International Distribution Limited
|
|
UK
|
Graphic Packaging International do Brasil - Embalagens Ltda.
|
|
Brazil
|
Graphic Packaging International Enterprises, LLC
|
|
Delaware
|
Graphic Packaging International Europe Carton Design Limited
|
|
UK
|
Graphic Packaging International Europe Cartons B.V.
|
|
Netherlands
|
Graphic Packaging International Europe Finance & Real Estate B.V.
|
|
Netherlands
|
Graphic Packaging International Europe Holdings B.V.
|
|
Netherlands
|
Graphic Packaging International Europe Netherlands B.V.
|
|
Netherlands
|
Graphic Packaging International Europe Netherlands Holdings B.V.
|
|
Netherlands
|
Graphic Packaging International Europe N.V.
|
|
Belgium
|
Graphic Packaging International Europe Spain Holding, S.A.
|
|
Spain
|
Graphic Packaging International Europe UK Holdings Limited
|
|
UK
|
Graphic Packaging International Europe UK Limited
|
|
UK
|
Graphic Packaging International France
|
|
France
|
Graphic Packaging International Gateshead Limited
|
|
UK
|
Graphic Packaging International Holding Company, LLC
|
|
Delaware
|
Graphic Packaging International Holdings Mexico, S. de R.L. de C.V.
|
|
Mexico
|
Graphic Packaging International Ireland Designated Activity Company
|
|
Ireland
|
Graphic Packaging International Japan Ltd.
|
|
Japan
|
Graphic Packaging International Limited
|
|
UK
|
Graphic Packaging International, LLC
|
|
Delaware
|
Graphic Packaging International Mexicana, S. de R.L. de C.V.
|
|
Mexico
|
Graphic Packaging International New Albany, LLC
|
|
Delaware
|
Graphic Packaging International New Zealand Limited
|
|
New Zealand
|
Graphic Packaging International Operadora de Mexico, S. de R.L. de C.V.
|
|
Mexico
|
Graphic Packaging International Partners, LLC
|
|
Delaware
|
Graphic Packaging International Philanthropic Fund
|
|
Delaware
|
Graphic Packaging International S.p.A.
|
|
Italy
|
Graphic Packaging International Servicios, S. de R.L. de C.V.
|
|
Mexico
|
Graphic Packaging International Spain, S.A.
|
|
Spain
|
Graphic Packaging International UK Finance Limited
|
|
UK
|
Graphic Packaging International US Finance LLC
|
|
Delaware
|
Graphic Packaging UK Pension Trustee Company Ltd.
|
|
UK
|
Handschy Holdings, LLC
|
|
Delaware
|
Handschy Industries, LLC
|
|
Delaware
|
International Paper Foodservice Europe Ltd.
|
|
UK
|
New Materials Limited
|
|
UK
|
Print Design & Graphics Limited
|
|
UK
|
PrinTech Systems B.V.
|
|
Netherlands
|
Rengo Riverwood Packaging, Limited
|
|
Japan
|
Riverdale Industries, LLC
|
|
Delaware
|
Riverwood International Pension Trustee Company Ltd.
|
|
UK
|
Shoo 553 Limited
|
|
UK
|
Spur Development, LLC
|
|
Delaware
|
(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;
|
(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;
|
(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
|
(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
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
/s/ Michael P. Doss
|
|
|
|
|
Michael P. Doss,
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
February 7, 2018
|
(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;
|
(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;
|
(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
|
(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
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
/s/ Stephen R. Scherger
|
|
|
|
|
Stephen R Scherger
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
|
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February 7, 2018
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/s/ Michael P. Doss
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Name: Michael P. Doss,
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Title: President and Chief Executive Officer
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February 7, 2018
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/s/ Stephen R. Scherger
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Name: Stephen R. Scherger
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Title: Senior Vice President and Chief Financial Officer
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February 7, 2018
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