|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 31,
2018
|
or
|
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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, $0.01 par value per share
|
New York Stock Exchange
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Large accelerated filer
þ
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Accelerated filer
o
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Smaller reporting company
o
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|||
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||||
Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Emerging growth company
o
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ITEM 1.
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BUSINESS
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Amount repurchased in millions
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Amount Repurchased
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Number of Shares Repurchased
|
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Average Price
|
|||||
2018
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$
|
120.0
|
|
10,566,144
|
|
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$
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11.35
|
|
2017
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$
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58.4
|
|
4,462,263
|
|
(a)
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$
|
13.08
|
|
2016
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$
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168.8
|
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13,202,425
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|
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$
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12.77
|
|
•
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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 food and drink, including snacks, quick-serve food and drink 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
|
•
|
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 heating and browning 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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2018 Net Tons Produced
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West Monroe, LA
|
CUK
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2
|
878,008
|
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Macon, GA
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CUK
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2
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686,694
|
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Kalamazoo, MI
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CRB
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2
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497,901
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Battle Creek, MI
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CRB
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2
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210,247
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Middletown, OH
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CRB
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1
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173,571
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East Angus, Québec
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CRB
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1
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93,849
|
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Texarkana, TX
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SBS
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2
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650,964
|
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Augusta, GA
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SBS
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2
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508,238
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West Monroe, LA
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Corrugated Medium
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1
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120,281
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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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Export compliance;
|
•
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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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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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|
Augusta, GA
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SBS
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Battle Creek, MI
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CRB
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East Angus, Québec
|
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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Texarkana, TX
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SBS
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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
(a)
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Headquarters, Research and Development, Packaging Machinery and Design
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Concord, NH
(a)
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Research and Development, Design Center
|
Crosby, MN
|
Packaging Machinery Engineering, Design and Manufacturing
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Louisville, CO
(a)
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Research and Development
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Menomonee Falls, WI
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Foodservice Rebuild Center
|
|
|
|
North American Converting Plants:
|
|
International Converting Plants:
|
Atlanta, GA
(a)
|
New Albany, IN
(b)
|
Auckland, New Zealand
(a)
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Carol Stream, IL
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Newton, IA
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Bremen, Germany
(a)
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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
(a)
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Coalville, United Kingdom
(a)
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Clarksville, TN
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Pacific, MO
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Gateshead, United Kingdom
(a)
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Cobourg, Ontario
(a)
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Perry, GA
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Hoogerheide, Netherlands
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Elk Grove, IL
(a)(b)
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Pittston, PA
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Newcastle Upon Tyne, United Kingdom
(a)
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Fort Smith, AR
(b)
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Prosperity, SC
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Igualada, Spain
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Gordonsville, TN
(a)
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Queretaro, Mexico
(a)
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Jundiai, Sao Paulo, Brazil
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Gresham, OR
(a)
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Shelbyville, IL
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Leeds, United Kingdom
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Hamel, MN
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Solon, OH
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Masnieres, France
(a)
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Irvine, CA
|
Staunton, VA
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Melbourne, Australia
(a)
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Kalamazoo, MI
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St.-Hyacinthe, Québec
(a)
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Miliaño, Spain
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Kendallville, IN
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Tijuana, Mexico
(a)
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Portlaoise, Ireland
(a)
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Kenton, OH
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Tuscaloosa, AL
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Requejada, Spain
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Lancaster, TX
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Vancouver, WA
(a)
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Sneek, Netherlands
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Lawrenceburg, TN
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Valley Forge, PA
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Sydney, Australia
(a)
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Lebanon, TN
(a)
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Visalia, CA
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Winsford, United Kingdom
(a)
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Lumberton, NC
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Wayne, NJ
|
|
Marion, OH
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Wausau, WI
|
|
Mississauga, Ontario
(a)(b)
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West Monroe, LA
(b)
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Mitchell, SD
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Xenia, OH
(a)
|
|
Monroe, LA
(a)
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Winnipeg, Manitoba
|
|
Monterrey, Mexico
(a)
|
|
|
(a)
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Leased facility.
|
(b)
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Multiple facilities in this location.
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
|
ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Amount repurchased in millions
|
Amount Repurchased
|
Number of Shares Repurchased
|
|
Average Price
|
|||||
2018
|
$
|
120.0
|
|
10,566,144
|
|
|
$
|
11.35
|
|
2017
|
$
|
58.4
|
|
4,462,263
|
|
(a)
|
$
|
13.08
|
|
2016
|
$
|
168.8
|
|
13,202,425
|
|
|
$
|
12.77
|
|
Period (2018)
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Program (a)
|
|||||
October 1, through October 31,
|
|
1,274,475
|
|
|
$
|
10.98
|
|
|
23,564,374
|
|
|
17,803,540
|
|
November 1, through November 30,
|
|
6,443,082
|
|
|
$
|
11.62
|
|
|
30,007,456
|
|
|
10,105,642
|
|
December 1, through December 31,
|
|
2,848,587
|
|
|
$
|
10.92
|
|
|
32,856,043
|
|
|
8,464,154
|
|
Total
|
|
10,566,144
|
|
|
|
|
|
|
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
||||||||||||
Graphic Packaging Holding Company
|
$
|
100.00
|
|
|
$
|
141.88
|
|
|
$
|
135.60
|
|
|
$
|
134.18
|
|
|
$
|
169.84
|
|
|
$
|
119.58
|
|
S&P 500 Stock Index
|
100.00
|
|
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
157.22
|
|
|
150.33
|
|
||||||
Dow Jones U.S. Container & Packaging Index
|
100.00
|
|
|
114.71
|
|
|
109.77
|
|
|
130.69
|
|
|
155.55
|
|
|
126.85
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended December 31,
|
|||||||||||||
In millions, except per share amounts
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
6,023.0
|
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
$
|
4,160.2
|
|
$
|
4,240.5
|
|
Income from Operations
|
458.2
|
|
327.9
|
|
407.4
|
|
430.1
|
|
222.1
|
|
|||||
Net Income
|
294.0
|
|
300.2
|
|
228.0
|
|
230.1
|
|
89.0
|
|
|||||
Net (Income) Loss Attributable to Noncontrolling Interests
|
(72.9
|
)
|
—
|
|
—
|
|
—
|
|
0.7
|
|
|||||
Net Income Attributable Graphic Packaging Holding Company
|
221.1
|
|
300.2
|
|
228.0
|
|
230.1
|
|
89.7
|
|
|||||
|
|
|
|
|
|
||||||||||
Net Income Attributable to Graphic Packaging Holding Company Per Share Basis:
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.71
|
|
$
|
0.97
|
|
$
|
0.71
|
|
$
|
0.70
|
|
$
|
0.27
|
|
Diluted
|
$
|
0.71
|
|
$
|
0.96
|
|
$
|
0.71
|
|
$
|
0.70
|
|
$
|
0.27
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
||||||||||
(as of period end)
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
70.5
|
|
$
|
67.4
|
|
$
|
59.1
|
|
$
|
54.9
|
|
$
|
81.6
|
|
Total Assets
|
7,059.2
|
|
4,863.0
|
|
4,603.4
|
|
4,256.1
|
|
4,137.6
|
|
|||||
Total Debt
|
2,957.1
|
|
2,274.5
|
|
2,151.9
|
|
1,875.5
|
|
1,957.7
|
|
|||||
Total Equity
|
2,018.5
|
|
1,291.9
|
|
1,056.5
|
|
1,101.7
|
|
1,012.3
|
|
|||||
|
|
|
|
|
|
||||||||||
Additional Data:
|
|
|
|
|
|
||||||||||
Depreciation and Amortization
|
$
|
430.6
|
|
$
|
330.3
|
|
$
|
299.3
|
|
$
|
280.5
|
|
$
|
270.0
|
|
Capital Spending, including Packaging Machinery
|
395.2
|
|
260.1
|
|
294.6
|
|
244.1
|
|
201.4
|
|
|||||
Dividends Declared per Share
|
0.30
|
|
0.30
|
|
0.225
|
|
0.20
|
|
—
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
|
•
|
Net Sales in
2018
increased
by
$1,619.3 million
or
36.8%
, to
$6,023.0 million
from
$4,403.7 million
in
2017
due to the NACP Combination, the 2017 and 2018 Acquisitions discussed below, higher selling prices, and favorable foreign currency exchange rates.
|
•
|
Income from Operations in
2018
increased
by
$130.3 million
or
39.7%
, to
$458.2 million
from
$327.9 million
in
2017
due to the NACP Combination, the 2017 and 2018 Acquisitions, the higher selling prices, gain on sale of assets, and cost savings through continuous improvement and other programs. These increases were partially offset by higher inflation and the Augusta, Georgia mill outage.
|
•
|
On September 30, 2018, the Company acquired substantially all the assets of the foodservice business of Letica Foodservice, a producer of paperboard-based cold and hot cups and cartons. The acquisition included
two
facilities located in Clarksville, Tennessee and Pittston, Pennsylvania. Letica Foodservice is included in the Americas Paperboard Packaging reportable segment.
|
•
|
On August 31, 2018, the Company sold its previously closed coated recycled paperboard mill site in Santa Clara, California, resulting in a gain on sale of assets of
$37.1 million
.
|
•
|
On June 12, 2018, the Company acquired substantially all the assets of PFP, a converter focused on the production of paperboard-based air filter frames. The acquisition included
two
facilities located in Lebanon, Tennessee and Lancaster, Texas. PFP and Letica Foodservice are referred to collectively as the "2018 Acquisitions."
|
•
|
On January 1, 2018, the Company closed the NACP Combination. NACP was a leading producer of SBS and paper-based foodservice products. The NACP business included
two
SBS mills located in Augusta, Georgia and Texarkana, Texas,
three
converting facilities in the U.S. and
one
in the United Kingdom.
|
•
|
During 2017, the Company completed the 2017 Acquisitions which included Seydaco, Norgraft and Carton Craft.
|
•
|
During 2016, the Company completed the 2016 Acquisitions which included G-Box, WG Anderson, Metro and Colorpak.
|
•
|
During 2018, the Company repurchased
10,566,144
shares of its outstanding common stock, or approximately
$120.0 million
, at an aggregate average price of
$11.35
. At
December 31, 2018
, the Company had approximately
$90 million
available for additional repurchases under the 2017 share repurchase program.
|
•
|
During
2018
, GPHC declared and paid cash dividends of
$92.3 million
and
$93.1 million
, respectively.
|
|
Year Ended December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Net Sales
|
$
|
6,023.0
|
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
Income from Operations
|
$
|
458.2
|
|
$
|
327.9
|
|
$
|
407.4
|
|
Nonoperating Pension and Postretirement Benefit Income (Expense)
|
14.9
|
|
14.8
|
|
(11.4
|
)
|
|||
Interest Expense, Net
|
(123.7
|
)
|
(89.7
|
)
|
(76.6
|
)
|
|||
Loss on Modification or Extinguishment of Debt
|
(1.9
|
)
|
—
|
|
—
|
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
$
|
347.5
|
|
$
|
253.0
|
|
$
|
319.4
|
|
Income Tax (Expense) Benefit
|
(54.7
|
)
|
45.5
|
|
(93.2
|
)
|
|||
Income before Equity Income of Unconsolidated Entity
|
$
|
292.8
|
|
$
|
298.5
|
|
$
|
226.2
|
|
Equity Income of Unconsolidated Entity
|
1.2
|
|
1.7
|
|
1.8
|
|
|||
Net Income
|
$
|
294.0
|
|
$
|
300.2
|
|
$
|
228.0
|
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||
|
|
Variances
|
|
|
|
|||||||||||||||
In millions
|
2017
|
Price
|
Volume/Mix
|
Foreign Exchange
|
2018
|
Increase
|
Percent Change
|
|||||||||||||
Consolidated
|
$
|
4,403.7
|
|
$
|
52.9
|
|
$
|
1,547.3
|
|
$
|
19.1
|
|
$
|
6,023.0
|
|
$
|
1,619.3
|
|
36.8
|
%
|
|
Year Ended December 31,
|
|
|
|||||||||||||||||||||||
|
|
Variances
|
|
|
|
|||||||||||||||||||||
In millions
|
2017
|
Price
|
Volume/Mix
(a)
|
Inflation
|
Foreign Exchange
|
Other
(b)
|
2018
|
Increase
|
Percent Change
|
|||||||||||||||||
Consolidated
|
$
|
327.9
|
|
$
|
52.9
|
|
$
|
38.2
|
|
$
|
(73.6
|
)
|
$
|
1.5
|
|
$
|
111.3
|
|
$
|
458.2
|
|
$
|
130.3
|
|
39.7
|
%
|
(a)
|
Includes expenses related to the Augusta, Georgia mill outage and inflation for the NACP Combination of approximately
$26 million
.
|
(b)
|
Includes the Company's cost reduction initiatives and expenses related to business combinations, gain on sale of assets and shutdown and other special charges.
|
|
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
|
$
|
407.4
|
|
$
|
(27.1
|
)
|
$
|
(0.8
|
)
|
$
|
(95.8
|
)
|
$
|
(3.0
|
)
|
$
|
47.2
|
|
$
|
327.9
|
|
$
|
(79.5
|
)
|
(19.5
|
)%
|
(a)
|
Includes the Company’s cost reduction initiatives, sales of assets, expenses related to acquisitions, integration activities, and shutdown costs.
|
|
Year Ended December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
NET SALES:
|
|
|
|
||||||
Paperboard Mills
|
$
|
1,076.5
|
|
$
|
399.7
|
|
$
|
394.7
|
|
Americas Paperboard Packaging
|
4,093.9
|
|
3,243.6
|
|
3,193.1
|
|
|||
Europe Paperboard Packaging
|
695.5
|
|
593.1
|
|
569.9
|
|
|||
Corporate/Other/Eliminations
(a)
|
157.1
|
|
167.3
|
|
140.4
|
|
|||
Total
|
$
|
6,023.0
|
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
|
|
|
|
||||||
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||||
Paperboard Mills
(b)
|
$
|
30.6
|
|
$
|
(35.0
|
)
|
$
|
(3.7
|
)
|
Americas Paperboard Packaging
|
420.1
|
|
358.2
|
|
409.0
|
|
|||
Europe Paperboard Packaging
|
46.1
|
|
37.3
|
|
25.4
|
|
|||
Corporate and Other
(c)
|
(38.6
|
)
|
(32.6
|
)
|
(23.3
|
)
|
|||
Total
|
$
|
458.2
|
|
$
|
327.9
|
|
$
|
407.4
|
|
(a)
|
Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments, which is not material.
|
(b)
|
Includes the Augusta, Georgia mill outage in 2018 and accelerated depreciation related to shutdown of the Santa Clara mill in 2017.
|
|
Years Ended December 31,
|
|||||
In millions
|
2018
|
2017
|
||||
Net Cash Used in Operating Activities
|
$
|
(373.8
|
)
|
$
|
(192.5
|
)
|
Net Cash Provided by Investing Activities
|
$
|
689.1
|
|
$
|
268.1
|
|
Net Cash
Used In
Financing Activities
|
$
|
(310.7
|
)
|
$
|
(69.8
|
)
|
|
Year Ended December 31,
|
|||||
In millions
|
2018
|
2017
|
||||
Receivables Sold and Derecognized
|
$
|
3,824.5
|
|
$
|
1,846.8
|
|
Proceeds Collected on Behalf of Financial Institutions
|
3,645.9
|
|
1,639.0
|
|
||
Net Proceeds (Paid to) Received From Financial Institutions
|
(19.6
|
)
|
134.1
|
|
||
Deferred Purchase Price
(a)
|
66.9
|
|
101.7
|
|
||
Pledged Receivables
|
43.0
|
|
—
|
|
|
Payments Due by Period
|
||||||||||||||
In millions
|
Total
|
Less than 1 Year
|
1-3 Years
|
3-5 Years
|
More than 5 Years
|
||||||||||
Debt Obligations
|
$
|
2,844.8
|
|
$
|
48.2
|
|
$
|
546.0
|
|
$
|
1,946.0
|
|
$
|
304.6
|
|
Operating Leases
|
239.5
|
|
61.8
|
|
87.5
|
|
53.3
|
|
36.9
|
|
|||||
Capital Leases
|
198.7
|
|
10.3
|
|
20.9
|
|
20.3
|
|
147.2
|
|
|||||
Interest Payable
|
598.3
|
|
143.6
|
|
256.8
|
|
145.2
|
|
52.7
|
|
|||||
Purchase Obligations
(a)
|
343.4
|
|
83.4
|
|
68.8
|
|
59.8
|
|
131.4
|
|
|||||
Total Contractual Obligations
(b)
|
$
|
4,224.7
|
|
$
|
347.3
|
|
$
|
980.0
|
|
$
|
2,224.6
|
|
$
|
672.8
|
|
•
|
Depreciation and amortization expense between
$430 million
and
$440 million
, excluding approximately
$10 million
of pension amortization.
|
•
|
Interest expense of
$135 million
to
$145 million
, including approximately
$4 million
to
$5 million
of non-cash interest expense associated with amortization of debt issuance costs.
|
•
|
Pension plan contributions of
$10 million
to
$12 million
.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
|
Expected Maturity Date
|
|||||||||||||||||||||||
In millions
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
Fair Value
|
||||||||||||||||
Total Debt
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed Rate
|
$
|
—
|
|
$
|
1.1
|
|
$
|
425.5
|
|
$
|
250.6
|
|
$
|
0.6
|
|
$
|
304.6
|
|
$
|
982.4
|
|
$
|
963.7
|
|
Average Interest Rate
|
—
|
%
|
1.14
|
%
|
4.75
|
%
|
4.86
|
%
|
1.03
|
%
|
4.08
|
%
|
|
|
|
|
||||||||
Variable Rate
|
$
|
36.5
|
|
$
|
55.5
|
|
$
|
63.9
|
|
$
|
127.8
|
|
$
|
1,567.0
|
|
$
|
—
|
|
$
|
1,850.7
|
|
$
|
1,798.8
|
|
|
LIBOR + Spread
|
|
LIBOR + Spread
|
|
LIBOR + Spread
|
|
LIBOR + Spread
|
|
LIBOR + Spread
|
|
|
|
|
|
|
|
|
Expected Maturity Date
|
||||||||||||||||||||
In millions
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
Total
|
||||||||||||||
Notional
|
$
|
150.0
|
|
$
|
300.0
|
|
$
|
—
|
|
$
|
200.0
|
|
$
|
—
|
|
$
|
—
|
|
$
|
650.0
|
|
Average Pay Rate
|
2.03
|
%
|
2.31
|
%
|
—
|
|
2.87
|
%
|
—
|
|
—
|
|
—
|
|
|||||||
Average Receive Rate
|
LIBOR
|
|
LIBOR
|
|
—
|
|
LIBOR
|
|
—
|
|
—
|
|
—
|
|
|
December 31, 2018
|
|||||
In millions
|
Contract Amount
|
Fair Value
|
||||
FORWARD EXCHANGE AGREEMENTS:
|
|
|
||||
Receive $US/Pay Yen
|
$
|
16.9
|
|
$
|
(0.4
|
)
|
Weighted average contractual exchange rate
|
110.72
|
|
|
|||
Receive $US/Pay Euro
|
$
|
34.7
|
|
$
|
(0.1
|
)
|
Weighted average contractual exchange rate
|
1.16
|
|
|
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, 2018
|
|
|
Year Ended December 31,
|
||||||||
In millions, except per share amounts
|
2018
|
2017
|
2016
|
||||||
Net Sales
|
$
|
6,023.0
|
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
Cost of Sales
|
5,077.0
|
|
3,696.1
|
|
3,497.1
|
|
|||
Selling, General and Administrative
|
465.7
|
|
345.6
|
|
353.4
|
|
|||
Other Expense, Net
|
7.2
|
|
3.0
|
|
3.1
|
|
|||
Business Combinations, Gain on Sale of Assets and Shutdown and Other Special Charges, Net
|
14.9
|
|
31.1
|
|
37.1
|
|
|||
Income from Operations
|
458.2
|
|
327.9
|
|
407.4
|
|
|||
Nonoperating Pension and Postretirement Benefit Income (Expense)
|
14.9
|
|
14.8
|
|
(11.4
|
)
|
|||
Interest Expense, Net
|
(123.7
|
)
|
(89.7
|
)
|
(76.6
|
)
|
|||
Loss on Modification or Extinguishment of Debt
|
(1.9
|
)
|
—
|
|
—
|
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
347.5
|
|
253.0
|
|
319.4
|
|
|||
Income Tax (Expense) Benefit
|
(54.7
|
)
|
45.5
|
|
(93.2
|
)
|
|||
Income before Equity Income of Unconsolidated Entity
|
292.8
|
|
298.5
|
|
226.2
|
|
|||
Equity Income of Unconsolidated Entity
|
1.2
|
|
1.7
|
|
1.8
|
|
|||
Net Income
|
$
|
294.0
|
|
$
|
300.2
|
|
$
|
228.0
|
|
Net Income Attributable to Noncontrolling Interests
|
(72.9
|
)
|
—
|
|
—
|
|
|||
Net Income Attributable Graphic Packaging Holding Company
|
$
|
221.1
|
|
$
|
300.2
|
|
$
|
228.0
|
|
|
|
|
|
||||||
Net Income Per Share Attributable to Graphic Packaging Holding Company — Basic
|
$
|
0.71
|
|
$
|
0.97
|
|
$
|
0.71
|
|
Net Income Per Share Attributable to Graphic Packaging Holding Company— Diluted
|
$
|
0.71
|
|
$
|
0.96
|
|
$
|
0.71
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
In millions
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Graphic Packaging Holding Company
|
Noncontrolling Interest
|
Redeemable Noncontrolling Interest
|
Total
|
|
Graphic Packaging Holding Company
|
||||||||||||||
Net Income
|
$
|
221.1
|
|
$
|
56.3
|
|
$
|
16.6
|
|
$
|
294.0
|
|
|
$
|
300.2
|
|
|
$
|
228.0
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Instruments
|
(1.0
|
)
|
(0.2
|
)
|
(0.1
|
)
|
(1.3
|
)
|
|
(4.9
|
)
|
|
13.0
|
|
||||||
Pension and Postretirement Benefit Plans
|
(19.4
|
)
|
(4.7
|
)
|
(1.4
|
)
|
(25.5
|
)
|
|
8.8
|
|
|
4.0
|
|
||||||
Currency Translation Adjustment
|
(18.7
|
)
|
(4.5
|
)
|
(1.3
|
)
|
(24.5
|
)
|
|
44.9
|
|
|
(58.9
|
)
|
||||||
Total Other Comprehensive (Loss) Income, Net of Tax
|
(39.1
|
)
|
(9.4
|
)
|
(2.8
|
)
|
(51.3
|
)
|
|
48.8
|
|
|
(41.9
|
)
|
||||||
Total Comprehensive Income
|
$
|
182.0
|
|
$
|
46.9
|
|
$
|
13.8
|
|
$
|
242.7
|
|
|
$
|
349.0
|
|
|
$
|
186.1
|
|
|
December 31,
|
|||||
In millions, except share and per share amounts
|
2018
|
2017
|
||||
ASSETS
|
|
|
||||
Current Assets:
|
|
|
||||
Cash and Cash Equivalents
|
$
|
70.5
|
|
$
|
67.4
|
|
Receivables, Net
|
572.9
|
|
321.1
|
|
||
Inventories, Net
|
1,014.4
|
|
634.0
|
|
||
Other Current Assets
|
106.0
|
|
147.4
|
|
||
Total Current Assets
|
1,763.8
|
|
1,169.9
|
|
||
Property, Plant and Equipment, Net
|
3,239.7
|
|
1,867.2
|
|
||
Goodwill
|
1,460.6
|
|
1,323.0
|
|
||
Intangible Assets, Net
|
523.8
|
|
436.5
|
|
||
Other Assets
|
71.3
|
|
66.4
|
|
||
Total Assets
|
$
|
7,059.2
|
|
$
|
4,863.0
|
|
|
|
|
||||
LIABILITIES
|
|
|
||||
Current Liabilities:
|
|
|
||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
52.0
|
|
$
|
61.3
|
|
Accounts Payable
|
711.6
|
|
516.5
|
|
||
Compensation and Employee Benefits
|
154.4
|
|
113.4
|
|
||
Interest Payable
|
13.6
|
|
14.9
|
|
||
Other Accrued Liabilities
|
240.7
|
|
145.3
|
|
||
Total Current Liabilities
|
1,172.3
|
|
851.4
|
|
||
Long-Term Debt
|
2,905.1
|
|
2,213.2
|
|
||
Deferred Income Tax Liabilities
|
462.2
|
|
321.8
|
|
||
Accrued Pension and Postretirement Benefits
|
107.5
|
|
80.0
|
|
||
Other Noncurrent Liabilities
|
117.8
|
|
104.7
|
|
||
|
|
|
||||
Commitments and Contingencies (Note 12)
|
|
|
||||
Redeemable Noncontrolling Interest (Note 14)
|
275.8
|
|
—
|
|
||
|
|
|
||||
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; 299,891,585 and 309,715,624 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively
|
3.0
|
|
3.1
|
|
||
Capital in Excess of Par Value
|
1,944.4
|
|
1,683.6
|
|
||
Retained Earnings (Accumulated Deficit)
|
10.0
|
|
(56.0
|
)
|
||
Accumulated Other Comprehensive Loss
|
(377.9
|
)
|
(338.8
|
)
|
||
Total Graphic Packaging Holding Company Shareholders' Equity
|
1,579.5
|
|
1,291.9
|
|
||
Noncontrolling Interest
|
439.0
|
|
—
|
|
||
Total Equity
|
2,018.5
|
|
1,291.9
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
7,059.2
|
|
$
|
4,863.0
|
|
|
Common Stock
|
Capital in Excess of Par Value
|
(Accumulated Deficit) Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
||||||||||||||
In millions, except share amounts
|
Shares
|
Amount
|
Noncontrolling Interests
|
Total Equity
|
||||||||||||||||
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
|
|
NACP Combination
|
—
|
|
—
|
|
308.4
|
|
—
|
|
—
|
|
424.0
|
|
732.4
|
|
||||||
Net Income
|
—
|
|
—
|
|
—
|
|
221.1
|
|
—
|
|
56.3
|
|
277.4
|
|
||||||
Reclassification to Redeemable Noncontrolling Interest for Share Repurchases
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(12.5
|
)
|
(12.5
|
)
|
||||||
Distribution of Membership Interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(19.4
|
)
|
(19.4
|
)
|
||||||
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|||||||||||||
Derivative Instruments
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.0
|
)
|
(0.2
|
)
|
(1.2
|
)
|
||||||
Pension and Postretirement Benefit Plans
|
—
|
|
—
|
|
—
|
|
—
|
|
(19.4
|
)
|
(4.7
|
)
|
(24.1
|
)
|
||||||
Currency Translation Adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
(18.7
|
)
|
(4.5
|
)
|
(23.2
|
)
|
||||||
Repurchase of Common Stock
(b)
|
(10,566,144
|
)
|
(0.1
|
)
|
(57.1
|
)
|
(62.8
|
)
|
—
|
|
—
|
|
(120.0
|
)
|
||||||
Dividends Declared
|
—
|
|
—
|
|
—
|
|
(92.3
|
)
|
—
|
|
—
|
|
(92.3
|
)
|
||||||
Recognition of Stock-Based Compensation
|
—
|
|
—
|
|
9.5
|
|
—
|
|
—
|
|
—
|
|
9.5
|
|
||||||
Issuance of Shares for Stock-Based Awards
|
658,299
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Balances at December 31, 2018
|
299,807,779
|
|
$
|
3.0
|
|
$
|
1,944.4
|
|
$
|
10.0
|
|
$
|
(377.9
|
)
|
$
|
439.0
|
|
$
|
2,018.5
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||||
Net Income
|
$
|
294.0
|
|
$
|
300.2
|
|
$
|
228.0
|
|
|
|
|
|
||||||
Adjustments to Reconcile Net Income to Net Cash (Used in) Provided by Operating Activities:
|
|
|
|
||||||
Depreciation and Amortization
|
430.6
|
|
330.3
|
|
299.3
|
|
|||
Amortization of Deferred Debt Issuance Costs
|
4.4
|
|
5.1
|
|
4.8
|
|
|||
Deferred Income Taxes
|
26.0
|
|
(54.0
|
)
|
76.7
|
|
|||
Amount of Postretirement Expense Less Than Funding
|
(4.7
|
)
|
(127.1
|
)
|
(31.3
|
)
|
|||
Gain on the Sale of Assets, net
|
(38.6
|
)
|
(3.7
|
)
|
—
|
|
|||
Other, Net
|
35.3
|
|
2.0
|
|
25.4
|
|
|||
Changes in Operating Assets and Liabilities, Net of Acquisitions (See Note 3)
|
(1,120.8
|
)
|
(645.3
|
)
|
(528.9
|
)
|
|||
Net Cash (
Used in)
Provided by Operating Activities
|
(373.8
|
)
|
(192.5
|
)
|
74.0
|
|
|||
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||||
Capital Spending
|
(378.8
|
)
|
(240.9
|
)
|
(278.6
|
)
|
|||
Packaging Machinery Spending
|
(16.4
|
)
|
(19.2
|
)
|
(16.0
|
)
|
|||
Acquisition of Businesses, Net of Cash Acquired
|
(89.4
|
)
|
(189.4
|
)
|
(332.7
|
)
|
|||
Proceeds Received from Sale of Assets, Net of Selling Costs
|
49.4
|
|
7.9
|
|
—
|
|
|||
Beneficial Interest on Sold Receivables
|
1,476.7
|
|
806.1
|
|
592.6
|
|
|||
Beneficial Interest Obtained in Exchange for Proceeds
|
(345.5
|
)
|
(97.4
|
)
|
(25.2
|
)
|
|||
Other, Net
|
(6.9
|
)
|
1.0
|
|
(5.2
|
)
|
|||
Net Cash
Provided by
(Used in) Investing Activities
|
689.1
|
|
268.1
|
|
(65.1
|
)
|
|||
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||||
Repurchase of Common Stock
|
(119.1
|
)
|
(62.1
|
)
|
(164.9
|
)
|
|||
Payments on Debt
|
(152.4
|
)
|
(25.0
|
)
|
(25.0
|
)
|
|||
Proceeds from Issuance of Debt
|
—
|
|
—
|
|
300.0
|
|
|||
Borrowings under Revolving Credit Facilities
|
1,876.9
|
|
1,202.9
|
|
1,200.0
|
|
|||
Payments on Revolving Credit Facilities
|
(1,787.5
|
)
|
(1,090.8
|
)
|
(1,235.8
|
)
|
|||
Debt Issuance Costs
|
(7.9
|
)
|
—
|
|
(5.3
|
)
|
|||
Repurchase of Common Stock related to Share-Based Payments
|
(4.3
|
)
|
(10.2
|
)
|
(11.3
|
)
|
|||
Dividends and Distributions Paid to GPIP Partner
|
(111.0
|
)
|
(93.4
|
)
|
(64.4
|
)
|
|||
Other, Net
|
(5.4
|
)
|
8.8
|
|
3.6
|
|
|||
Net Cash
Used In
Financing Activities
|
(310.7
|
)
|
(69.8
|
)
|
(3.1
|
)
|
|||
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(1.5
|
)
|
2.5
|
|
(1.6
|
)
|
|||
Net
Increase
in Cash and Cash Equivalents
|
3.1
|
|
8.3
|
|
4.2
|
|
|||
Cash and Cash Equivalents at Beginning of Year
|
67.4
|
|
59.1
|
|
54.9
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$
|
70.5
|
|
$
|
67.4
|
|
$
|
59.1
|
|
|
|
|
|
||||||
Non-cash Investing Activities:
|
|
|
|
||||||
Beneficial Interest Obtained in Exchange for Trade Receivables
|
$
|
1,025.7
|
|
$
|
734.7
|
|
$
|
523.7
|
|
Non-cash Investment in NACP Combination
|
1,111.2
|
|
—
|
|
—
|
|
|||
Non-cash Investing Activities
|
$
|
2,136.9
|
|
$
|
734.7
|
|
$
|
523.7
|
|
Non-cash Financing Activities:
|
|
|
|
||||||
Non-cash Financing of NACP Combination
|
$
|
660.0
|
|
$
|
—
|
|
$
|
—
|
|
Non-Cash Financing Activities
|
$
|
660.0
|
|
$
|
—
|
|
$
|
—
|
|
NOTE 1.
|
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
Year Ended December 31,
|
|||||
In millions
|
2018
|
2017
|
||||
Receivables Sold and Derecognized
|
$
|
3,824.5
|
|
$
|
1,846.8
|
|
Proceeds Collected on Behalf of Financial Institutions
|
3,645.9
|
|
1,639.0
|
|
||
Net Proceeds (Paid to) Received From Financial Institutions
|
(19.6
|
)
|
134.1
|
|
||
Deferred Purchase Price
(a)
|
66.9
|
|
101.7
|
|
||
Pledged Receivables
|
43.0
|
|
—
|
|
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, 2018
|
|
December 31, 2017
|
||||||||||||||||
In millions
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
||||||||||||
Amortizable Intangible Assets:
|
|
|
|
|
|
|
|
||||||||||||
Customer Relationships
|
$
|
937.3
|
|
$
|
(442.7
|
)
|
$
|
494.6
|
|
|
$
|
786.9
|
|
$
|
(377.2
|
)
|
$
|
409.7
|
|
Patents, Trademarks, Licenses, and Leases
|
133.7
|
|
(104.5
|
)
|
29.2
|
|
|
130.2
|
|
(103.4
|
)
|
26.8
|
|
||||||
Total
|
$
|
1,071.0
|
|
$
|
(547.2
|
)
|
$
|
523.8
|
|
|
$
|
917.1
|
|
$
|
(480.6
|
)
|
$
|
436.5
|
|
In millions
|
Paperboard Mills
|
Americas Paperboard Packaging
|
Europe Paperboard Packaging
|
Corporate/Other
(a)
|
Total
|
||||||||||
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
|
|
Acquisition of Businesses
|
98.3
|
|
43.1
|
|
(0.1
|
)
|
—
|
|
141.3
|
|
|||||
Foreign Currency Effects
|
—
|
|
(0.3
|
)
|
(2.2
|
)
|
(1.2
|
)
|
(3.7
|
)
|
|||||
Balance at December 31, 2018
|
$
|
506.8
|
|
$
|
881.8
|
|
$
|
57.2
|
|
$
|
14.8
|
|
$
|
1,460.6
|
|
(a)
|
Includes Australia operating segment.
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Charges Associated with Business Combinations
|
$
|
46.8
|
|
|
$
|
16.2
|
|
|
$
|
21.2
|
|
Shutdown and Other Special Charges
|
6.7
|
|
|
18.6
|
|
|
15.9
|
|
|||
Gain on Sale of Assets
|
(38.6
|
)
|
|
(3.7
|
)
|
|
—
|
|
|||
Total
|
$
|
14.9
|
|
|
$
|
31.1
|
|
|
$
|
37.1
|
|
Amount repurchased in millions
|
Amount Repurchased
|
Number of Shares Repurchased
|
|
Average Price
|
|||||
2018
|
$
|
120.0
|
|
10,566,144
|
|
|
$
|
11.35
|
|
2017
|
$
|
58.4
|
|
4,462,263
|
|
(a)
|
$
|
13.08
|
|
2016
|
$
|
168.8
|
|
13,202,425
|
|
|
$
|
12.77
|
|
NOTE 2.
|
SUPPLEMENTAL BALANCE SHEET DATA
|
In millions
|
2018
|
2017
|
||||
Trade
|
$
|
475.9
|
|
$
|
279.2
|
|
Less: Allowance
|
(10.4
|
)
|
(7.2
|
)
|
||
|
465.5
|
|
272.0
|
|
||
Other
|
107.4
|
|
49.1
|
|
||
Total
|
$
|
572.9
|
|
$
|
321.1
|
|
In millions
|
2018
|
2017
|
||||
Finished Goods
|
$
|
426.9
|
|
$
|
240.5
|
|
Work in Progress
|
102.2
|
|
74.1
|
|
||
Raw Materials
|
319.9
|
|
229.4
|
|
||
Supplies
|
165.4
|
|
90.0
|
|
||
Total
|
$
|
1,014.4
|
|
$
|
634.0
|
|
In millions
|
2018
|
2017
|
||||
Deferred Purchase Price
|
$
|
66.9
|
|
$
|
101.7
|
|
Prepaid Assets
|
28.6
|
|
28.6
|
|
||
Assets Held for Sale
|
—
|
|
10.2
|
|
||
Contract Assets, current portion
|
9.8
|
|
5.7
|
|
||
Fair Value of Derivatives, current portion
|
0.7
|
|
1.2
|
|
||
Total
|
$
|
106.0
|
|
$
|
147.4
|
|
In millions
|
2018
|
2017
|
||||
Property, Plant and Equipment, at Cost:
|
|
|
||||
Land and Improvements
|
$
|
134.1
|
|
$
|
106.2
|
|
Buildings
(a)
|
608.5
|
|
431.9
|
|
||
Machinery and Equipment
(b)
|
5,716.2
|
|
4,384.5
|
|
||
Construction-in-Progress
|
201.2
|
|
151.0
|
|
||
|
6,660.0
|
|
5,073.6
|
|
||
Less: Accumulated Depreciation
(a) (b)
|
(3,420.3
|
)
|
(3,206.4
|
)
|
||
Total
|
$
|
3,239.7
|
|
$
|
1,867.2
|
|
(a)
|
Includes gross assets under financing obligation of
$95.5 million
and related accumulated depreciation of
$0.4 million
as of
December 31, 2018
.
|
(b)
|
Includes gross assets under capital lease of
$39.6 million
and related accumulated depreciation of
$10.0 million
as of
December 31, 2018
and gross assets under capital lease of
$39.7 million
and related accumulated depreciation of
$7.4 million
as of
December 31, 2017
.
|
In millions
|
2018
|
2017
|
||||
Deferred Debt Issuance Costs, Net of Amortization of $12.5 million and $10.9 million for 2018 and 2017, respectively
|
$
|
6.4
|
|
$
|
2.9
|
|
Deferred Income Tax Assets
|
8.2
|
|
6.8
|
|
||
Pension Assets
|
19.0
|
|
20.4
|
|
||
Contract Assets, noncurrent portion
|
9.8
|
|
6.0
|
|
||
Fair Value of Derivatives, noncurrent portion
|
0.1
|
|
—
|
|
||
Other
|
27.8
|
|
30.3
|
|
||
Total
|
$
|
71.3
|
|
$
|
66.4
|
|
In millions
|
2018
|
2017
|
||||
Dividends Payable
|
$
|
22.5
|
|
$
|
23.3
|
|
Deferred Revenue
|
14.0
|
|
11.6
|
|
||
Accrued Customer Rebates
|
30.2
|
|
15.5
|
|
||
Fair Value of Derivatives, current portion
|
1.3
|
|
1.2
|
|
||
Other Accrued Taxes
|
44.4
|
|
29.8
|
|
||
Accrued Payables
|
30.3
|
|
25.7
|
|
||
Liabilities Payable to a Financial Institution
|
62.6
|
|
—
|
|
||
Other
|
35.4
|
|
38.2
|
|
||
Total
|
$
|
240.7
|
|
$
|
145.3
|
|
In millions
|
2018
|
2017
|
||||
Deferred Revenue
|
$
|
5.2
|
|
$
|
6.6
|
|
Multi-employer Plans
|
32.4
|
|
29.0
|
|
||
Workers Compensation Reserve
|
9.9
|
|
10.9
|
|
||
Fair Value of Derivatives, noncurrent portion
|
2.1
|
|
—
|
|
||
Accrued Build-to-Suit Obligation
|
—
|
|
35.8
|
|
||
Unfavorable Supply Agreement
|
31.2
|
|
—
|
|
||
Other
|
37.0
|
|
22.4
|
|
||
Total
|
$
|
117.8
|
|
$
|
104.7
|
|
NOTE 3.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
In millions
|
2018
|
|
2017
|
|
2016
|
||||||
Receivables, Net
|
$
|
(1,158.1
|
)
|
|
$
|
(658.8
|
)
|
|
$
|
(541.9
|
)
|
Inventories, Net
|
(82.0
|
)
|
|
(6.5
|
)
|
|
10.5
|
|
|||
Other Current Assets
|
0.3
|
|
|
0.8
|
|
|
(1.2
|
)
|
|||
Other Assets
|
(1.0
|
)
|
|
(32.8
|
)
|
|
8.5
|
|
|||
Accounts Payable
|
76.2
|
|
|
27.0
|
|
|
4.3
|
|
|||
Compensation and Employee Benefits
|
26.9
|
|
|
3.5
|
|
|
(21.7
|
)
|
|||
Income Taxes
|
0.6
|
|
|
2.3
|
|
|
1.7
|
|
|||
Interest Payable
|
(4.1
|
)
|
|
(1.7
|
)
|
|
5.0
|
|
|||
Other Accrued Liabilities
|
11.8
|
|
|
6.7
|
|
|
12.8
|
|
|||
Other Noncurrent Liabilities
|
8.6
|
|
|
14.2
|
|
|
(6.9
|
)
|
|||
Total
|
$
|
(1,120.8
|
)
|
|
$
|
(645.3
|
)
|
|
$
|
(528.9
|
)
|
In millions
|
2018
|
2017
|
2016
|
||||||
Interest
|
$
|
121.3
|
|
$
|
81.8
|
|
$
|
64.9
|
|
Income Taxes
|
$
|
25.8
|
|
$
|
15.9
|
|
$
|
14.5
|
|
NOTE 4.
|
BUSINESS COMBINATIONS
|
In millions
|
Amounts Recognized as of Acquisition Date
|
Measurement Period Adjustments
|
Amounts Recognized as of Acquisition Dates (as adjusted)
|
||||||
Purchase Price
(a)
|
$
|
1,241.7
|
|
$
|
(40.9
|
)
|
$
|
1,200.8
|
|
Assumed Debt
(b)
|
660.0
|
|
—
|
|
660.0
|
|
|||
Total Purchase Consideration
|
$
|
1,901.7
|
|
$
|
(40.9
|
)
|
$
|
1,860.8
|
|
|
|
|
|
||||||
Receivables, Net
|
145.3
|
|
—
|
|
145.3
|
|
|||
Inventories, Net
|
314.2
|
|
0.8
|
|
315.0
|
|
|||
Other Current Assets
|
20.9
|
|
(9.2
|
)
|
11.7
|
|
|||
Property, Plant and Equipment, Net
|
1,242.6
|
|
32.0
|
|
1,274.6
|
|
|||
Intangible Assets, Net
(c)
|
136.6
|
|
13.5
|
|
150.1
|
|
|||
Other Assets
|
6.0
|
|
(6.0
|
)
|
—
|
|
|||
Total Assets Acquired
|
1,865.6
|
|
31.1
|
|
1,896.7
|
|
|||
Accounts Payable
|
112.6
|
|
—
|
|
112.6
|
|
|||
Compensation and Employee Benefits
|
21.0
|
|
(5.7
|
)
|
15.3
|
|
|||
Current Liabilities
|
16.3
|
|
(0.1
|
)
|
16.2
|
|
|||
Other Noncurrent Liabilities
|
41.3
|
|
(1.7
|
)
|
39.6
|
|
|||
Total Liabilities Assumed
|
191.2
|
|
(7.5
|
)
|
183.7
|
|
|||
Net Assets Acquired
|
1,674.4
|
|
38.6
|
|
1,713.0
|
|
|||
Goodwill
|
227.3
|
|
(79.5
|
)
|
147.8
|
|
|||
Total Estimated Fair Value of Net Assets Acquired
|
$
|
1,901.7
|
|
$
|
(40.9
|
)
|
$
|
1,860.8
|
|
(b)
|
Assumed Debt was valued at fair market value based on quoted market prices (Level 2 inputs) obtained from independent pricing services.
|
|
Year Ended December 31,
|
||
In millions, except per share data
|
2017
|
||
Net Sales
|
$
|
5,912.5
|
|
Net Income Attributable to Graphic Packaging Holding Company
|
367.7
|
|
|
Income Per Share — Basic
|
1.18
|
|
|
Income Per Share — Diluted
|
1.18
|
|
NOTE 5.
|
DEBT
|
In millions
|
2018
|
2017
|
||||
Short Term Borrowings
|
$
|
11.7
|
|
$
|
9.1
|
|
Current Portion of Capital Lease Obligations
|
3.8
|
|
2.2
|
|
||
Current Portion of Long-Term Debt
|
36.5
|
|
50.0
|
|
||
Total
|
$
|
52.0
|
|
$
|
61.3
|
|
In millions
|
2018
|
2017
|
||||
Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.18%, payable in 2024
|
$
|
300.0
|
|
$
|
300.0
|
|
Senior Notes with interest payable semi-annually at 4.875%, effective rate of 4.92%, payable in 2022
|
250.0
|
|
250.0
|
|
||
Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.77%, payable in 2021
|
425.0
|
|
425.0
|
|
||
Senior Secured Term Loan Facilities with interest payable at various dates at floating rates (3.89% at December 31, 2018) payable through 2023
|
1,432.6
|
|
925.0
|
|
||
Senior Secured Revolving Credit Facilities with interest payable at floating rates (3.63% at December 31, 2018) payable in 2023
|
399.0
|
|
319.0
|
|
||
Capital Lease and Financing Obligations
|
122.9
|
|
30.0
|
|
||
Other
|
26.5
|
|
28.9
|
|
||
Total Long-Term Debt
|
2,956.0
|
|
2,277.9
|
|
||
Less: Current Portion
|
40.3
|
|
52.2
|
|
||
|
2,915.7
|
|
2,225.7
|
|
||
Less: Unamortized Deferred Debt Issuance Costs
|
10.6
|
|
12.5
|
|
||
Total
|
$
|
2,905.1
|
|
$
|
2,213.2
|
|
In millions
|
|||
2019
|
$
|
36.5
|
|
2020
|
56.6
|
|
|
2021
|
489.4
|
|
|
2022
|
378.4
|
|
|
2023
|
1,567.6
|
|
|
After 2023
|
304.6
|
|
|
Total
|
$
|
2,833.1
|
|
Date
|
Document
(a)
|
Provision
|
Expiration
(b)
|
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
|
|
December 2012
|
Amendment No. 1 to Credit Agreement
|
•$300 million incremental term loan
|
|
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
|
|
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)
|
|
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
|
|
January 2018
|
Third Amended and Restated Credit Agreement
|
•Increased the domestic revolving credit facility by $200 million to $1,450 million and reduced the term loan by approximately $125 million to $800 million. LIBOR plus variable spread (between 125 basis points and 200 basis points) depending on consolidated total leverage ratio
•Assumed the term loan indebtedness as part of the NACP Combination in an aggregate amount of $660.0 million
|
January 2023
|
In millions
|
Total Commitments
|
Total Outstanding
|
Total Available
|
||||||
Senior Secured Domestic Revolving Credit Facility
(a)
|
$
|
1,450.0
|
|
$
|
329.0
|
|
$
|
1,098.3
|
|
Senior Secured International Revolving Credit Facilities
|
180.8
|
|
70.0
|
|
110.8
|
|
|||
Other International Facilities
|
65.4
|
|
38.3
|
|
27.1
|
|
|||
Total
|
$
|
1,696.2
|
|
$
|
437.3
|
|
$
|
1,236.2
|
|
(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
$22.7 million
as of
December 31, 2018
. These letters of credit are primarily used as security against its self-insurance obligations and workers' compensation obligations. These letters of credit expire throughout
2019
unless extended.
|
NOTE 6.
|
STOCK INCENTIVE PLANS
|
|
2018
|
2017
|
2016
|
||||||
RSUs — Employees
|
1,543,410
|
|
1,547,049
|
|
1,891,335
|
|
|||
Weighted-average grant date fair value
|
$
|
14.79
|
|
$
|
13.35
|
|
$
|
11.20
|
|
Stock Awards — Board of Directors
|
51,226
|
|
65,520
|
|
59,880
|
|
|||
Weighted-average grant date fair value
|
$
|
15.03
|
|
$
|
13.43
|
|
$
|
13.36
|
|
|
Shares
|
Weighted Average Grant Date Fair Value
|
|||
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
|
|
Granted
|
1,543,410
|
|
14.79
|
|
|
Released
|
(744,757
|
)
|
14.90
|
|
|
Forfeited
|
(210,553
|
)
|
13.49
|
|
|
Outstanding — December 31, 2018
|
4,460,034
|
|
$
|
13.27
|
|
NOTE 7.
|
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||||||||
|
Year Ended December 31,
|
|||||||||||||||||
In millions
|
2018
|
2017
|
2016
|
2018
|
2017
|
2016
|
||||||||||||
Components of Net Periodic Cost:
|
|
|
|
|
|
|
||||||||||||
Service Cost
|
$
|
17.3
|
|
$
|
8.2
|
|
$
|
10.0
|
|
$
|
0.6
|
|
$
|
0.8
|
|
$
|
0.8
|
|
Interest Cost
|
41.8
|
|
42.6
|
|
43.8
|
|
1.2
|
|
1.3
|
|
1.3
|
|
||||||
Expected Return on Plan Assets
|
(63.6
|
)
|
(64.1
|
)
|
(61.3
|
)
|
—
|
|
—
|
|
—
|
|
||||||
Amortization:
|
|
|
|
|
|
|
||||||||||||
Prior Service Cost (Credit)
|
0.4
|
|
0.5
|
|
0.8
|
|
(0.3
|
)
|
(0.3
|
)
|
(0.2
|
)
|
||||||
Actuarial Loss (Gain)
|
5.9
|
|
6.5
|
|
27.3
|
|
(1.8
|
)
|
(2.1
|
)
|
(2.1
|
)
|
||||||
Net Curtailment/Settlement Loss
|
1.0
|
|
—
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
||||||
Other
|
0.5
|
|
0.8
|
|
0.8
|
|
—
|
|
—
|
|
—
|
|
||||||
Net Periodic (Benefit) Cost
|
$
|
3.3
|
|
$
|
(5.5
|
)
|
$
|
22.4
|
|
$
|
(0.3
|
)
|
$
|
(0.3
|
)
|
$
|
(0.2
|
)
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||
|
Year Ended December 31,
|
|||||||||||
|
2018
|
2017
|
2016
|
2018
|
2017
|
2016
|
||||||
Weighted Average Assumptions:
|
|
|
|
|
|
|
||||||
Discount Rate
|
3.49
|
%
|
4.01
|
%
|
4.41
|
%
|
3.64
|
%
|
4.10
|
%
|
4.29
|
%
|
Rate of Increase in Future Compensation Levels
|
2.09
|
%
|
1.45
|
%
|
1.49
|
%
|
—
|
|
—
|
|
—
|
|
Expected Long-Term Rate of Return on Plan Assets
|
4.86
|
%
|
5.79
|
%
|
5.90
|
%
|
—
|
|
—
|
|
—
|
|
Initial Health Care Cost Trend Rate
|
—
|
|
—
|
|
—
|
|
9.00
|
%
|
7.45
|
%
|
7.80
|
%
|
Ultimate Health Care Cost Trend Rate
|
—
|
|
—
|
|
—
|
|
4.50
|
%
|
4.50
|
%
|
4.50
|
%
|
Ultimate Year
|
—
|
|
—
|
|
—
|
|
2027
|
|
2024
|
|
2024
|
|
|
Pension Benefits
|
Postretirement Benefits
|
||||||||||
In millions
|
2018
|
2017
|
2018
|
2017
|
||||||||
Change in Benefit Obligation:
|
|
|
|
|
||||||||
Benefit Obligation at Beginning of Year
|
$
|
1,367.1
|
|
$
|
1,279.0
|
|
$
|
37.3
|
|
$
|
40.6
|
|
Service Cost
|
17.3
|
|
8.2
|
|
0.6
|
|
0.8
|
|
||||
Interest Cost
|
41.8
|
|
42.6
|
|
1.2
|
|
1.3
|
|
||||
Actuarial Loss (Gain)
|
(101.9
|
)
|
76.4
|
|
(3.0
|
)
|
(3.4
|
)
|
||||
Foreign Currency Exchange
|
(14.8
|
)
|
22.9
|
|
(0.2
|
)
|
0.1
|
|
||||
Settlement/Curtailment (Gain)
|
—
|
|
(0.2
|
)
|
—
|
|
—
|
|
||||
Benefits Paid
|
(65.4
|
)
|
(62.7
|
)
|
(1.9
|
)
|
(2.2
|
)
|
||||
Acquisition
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Other
|
1.1
|
|
0.9
|
|
0.1
|
|
0.1
|
|
||||
Benefit Obligation at End of Year
|
$
|
1,245.2
|
|
$
|
1,367.1
|
|
$
|
34.1
|
|
$
|
37.3
|
|
|
|
|
|
|
||||||||
Change in Plan Assets:
|
|
|
|
|
||||||||
Fair Value of Plan Assets at Beginning of Year
|
$
|
1,340.7
|
|
$
|
1,115.6
|
|
$
|
—
|
|
$
|
—
|
|
Actual Return on Plan Assets
|
(79.6
|
)
|
147.1
|
|
—
|
|
—
|
|
||||
Employer Contributions
|
5.8
|
|
119.1
|
|
1.9
|
|
2.2
|
|
||||
Foreign Currency Exchange
|
(15.0
|
)
|
21.6
|
|
—
|
|
—
|
|
||||
Benefits Paid
|
(65.4
|
)
|
(62.7
|
)
|
(1.9
|
)
|
(2.2
|
)
|
||||
Acquisition
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Settlements
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Fair Value of Plan Assets at End of Year
|
$
|
1,186.5
|
|
$
|
1,340.7
|
|
$
|
—
|
|
$
|
—
|
|
Plan Assets Less than Projected Benefit Obligation
|
$
|
(58.7
|
)
|
$
|
(26.4
|
)
|
$
|
(34.1
|
)
|
$
|
(37.3
|
)
|
|
|
|
|
|
||||||||
Amounts Recognized in the Consolidated Balance Sheets Consist of:
|
|
|
|
|
||||||||
Pension Assets
|
$
|
19.0
|
|
$
|
20.4
|
|
$
|
—
|
|
$
|
—
|
|
Accrued Pension and Postretirement Benefits Liability — Current
|
$
|
(1.8
|
)
|
$
|
(1.7
|
)
|
$
|
(2.5
|
)
|
$
|
(2.4
|
)
|
Accrued Pension and Postretirement Benefits Liability — Noncurrent
|
$
|
(75.9
|
)
|
$
|
(45.1
|
)
|
$
|
(31.6
|
)
|
$
|
(34.9
|
)
|
Accumulated Other Comprehensive Income:
|
|
|
|
|
||||||||
Net Actuarial Loss (Gain)
|
$
|
297.3
|
|
$
|
267.1
|
|
$
|
(1.6
|
)
|
$
|
(20.1
|
)
|
Prior Service Cost (Credit)
|
$
|
3.6
|
|
$
|
0.7
|
|
$
|
(20.2
|
)
|
$
|
(0.8
|
)
|
Weighted Average Calculations:
|
|
|
|
|
||||||||
Discount Rate
|
4.14
|
%
|
3.49
|
%
|
4.29
|
%
|
3.64
|
%
|
||||
Rates of Increase in Future Compensation Levels
|
2.37
|
%
|
2.09
|
%
|
—
|
|
—
|
|
||||
Initial Health Care Cost Trend Rate
|
—
|
|
—
|
|
9.00
|
%
|
9.00
|
%
|
||||
Ultimate Health Care Cost Trend Rate
|
—
|
|
—
|
|
4.50
|
%
|
4.50
|
%
|
||||
Ultimate Year
|
—
|
|
—
|
|
2027
|
|
2027
|
|
|
Target
|
2018
|
2017
|
|||
Cash
|
—
|
%
|
5.0
|
%
|
2.4
|
%
|
Equity Securities
|
8.4
|
|
8.1
|
|
11.2
|
|
Fixed Income Securities
|
86.4
|
|
79.5
|
|
82.7
|
|
Other Investments
|
5.2
|
|
7.4
|
|
3.7
|
|
Total
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
|
Fair Value Measurements at December 31, 2018
|
|||||||||||
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)
|
$
|
58.8
|
|
$
|
0.3
|
|
$
|
58.5
|
|
$
|
—
|
|
Equity Securities:
|
|
|
|
|
||||||||
Domestic
(a)
|
86.4
|
|
3.6
|
|
82.8
|
|
—
|
|
||||
Foreign
(a)
|
9.2
|
|
5.3
|
|
3.8
|
|
—
|
|
||||
Fixed Income Securities
(a)
|
980.1
|
|
15.0
|
|
962.3
|
|
2.8
|
|
||||
Other Investments:
|
|
|
|
|
||||||||
Real estate
|
9.2
|
|
—
|
|
7.6
|
|
1.6
|
|
||||
Diversified growth fund
(b)
|
42.8
|
|
—
|
|
41.5
|
|
1.4
|
|
||||
Total
|
$
|
1,186.5
|
|
$
|
24.2
|
|
$
|
1,156.5
|
|
$
|
5.8
|
|
|
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
|
|
(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
|
2018
|
2017
|
||||
Balance at January 1,
|
$
|
0.8
|
|
$
|
—
|
|
Transfers In
|
5.0
|
|
0.8
|
|
||
Return on Assets Held at December 31
|
—
|
|
—
|
|
||
Balance at December 31,
|
$
|
5.8
|
|
$
|
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
|
|
$
|
(1.7
|
)
|
In millions
|
Pension Plans
|
Postretirement Health Care Benefits
|
||||
2019
|
$
|
69.4
|
|
$
|
2.4
|
|
2020
|
71.9
|
|
2.6
|
|
||
2021
|
74.6
|
|
2.6
|
|
||
2022
|
77.0
|
|
2.8
|
|
||
2023
|
79.1
|
|
2.8
|
|
||
2024— 2028
|
416.3
|
|
12.6
|
|
In millions
|
Pension Benefits
|
Postretirement Health Care Benefits
|
||||
Recognition of Prior Service Cost
|
$
|
0.2
|
|
$
|
(0.3
|
)
|
Recognition of Actuarial Loss (Gain)
|
9.9
|
|
(2.1
|
)
|
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
|
2018
|
2017
|
FIP/RP Status Implemented
|
2018
|
2017
|
2016
|
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
|
7/31/2023
|
PIUMPF
(a)
|
11-6166763/001
|
Red
|
Red
|
Yes
|
0.1
|
|
0.1
|
|
0.1
|
|
Yes
|
6/15/2022
|
|||
Graphic Communications Conference of International Brotherhood of Teamster Pension Fund
(a)
|
52-6118568/001
|
Red
|
Red
|
Yes
|
0.3
|
|
0.3
|
|
0.2
|
|
Yes
|
5/01/2019
|
|||
Total
|
|
|
|
|
$
|
0.5
|
|
$
|
0.5
|
|
$
|
0.4
|
|
|
|
NOTE 8.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
U.S.
|
$
|
298.9
|
|
$
|
227.5
|
|
$
|
290.0
|
|
International
|
48.6
|
|
25.5
|
|
29.4
|
|
|||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
$
|
347.5
|
|
$
|
253.0
|
|
$
|
319.4
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Current (Expense) Benefit:
|
|
|
|
||||||
U.S.
|
$
|
(13.0
|
)
|
$
|
0.7
|
|
$
|
(5.1
|
)
|
International
|
(15.7
|
)
|
(9.2
|
)
|
(11.4
|
)
|
|||
Total Current
|
$
|
(28.7
|
)
|
$
|
(8.5
|
)
|
$
|
(16.5
|
)
|
|
|
|
|
||||||
Deferred (Expense) Benefit:
|
|
|
|
||||||
U.S.
|
(31.6
|
)
|
51.0
|
|
(78.8
|
)
|
|||
International
|
5.6
|
|
3.0
|
|
2.1
|
|
|||
Total Deferred
|
$
|
(26.0
|
)
|
$
|
54.0
|
|
$
|
(76.7
|
)
|
Income Tax (Expense) Benefit
|
$
|
(54.7
|
)
|
$
|
45.5
|
|
$
|
(93.2
|
)
|
|
Year Ended December 31,
|
||||||||||||||||
In millions
|
2018
|
Percent
|
|
2017
|
Percent
|
|
2016
|
Percent
|
|||||||||
Income Tax Expense at U.S. Statutory Rate
|
$
|
(73.0
|
)
|
21.0
|
%
|
|
$
|
(88.5
|
)
|
35.0
|
%
|
|
$
|
(111.8
|
)
|
35.0
|
%
|
U.S. State and Local Tax Expense
|
(11.7
|
)
|
3.4
|
|
|
(8.7
|
)
|
3.4
|
|
|
(10.0
|
)
|
3.2
|
|
|||
IRS Agreement
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
22.8
|
|
(7.2
|
)
|
|||
Permanent Items
|
(3.8
|
)
|
1.1
|
|
|
(2.7
|
)
|
1.0
|
|
|
(1.3
|
)
|
0.5
|
|
|||
U.S. Tax Reform
|
10.9
|
|
(3.1
|
)
|
|
138.0
|
|
(54.5
|
)
|
|
—
|
|
—
|
|
|||
Change in Valuation Allowance due to Tax Reform
|
—
|
|
—
|
|
|
(2.0
|
)
|
0.8
|
|
|
—
|
|
—
|
|
|||
Change in Valuation Allowance
|
13.0
|
|
(3.7
|
)
|
|
(3.5
|
)
|
1.4
|
|
|
0.5
|
|
(0.2
|
)
|
|||
International Tax Rate Differences
|
(1.9
|
)
|
0.5
|
|
|
3.2
|
|
(1.3
|
)
|
|
1.8
|
|
(0.6
|
)
|
|||
Foreign Withholding Tax
|
(0.5
|
)
|
0.1
|
|
|
(0.4
|
)
|
0.2
|
|
|
(0.2
|
)
|
0.1
|
|
|||
Change in Tax Rates
|
1.9
|
|
(0.5
|
)
|
|
(3.0
|
)
|
1.2
|
|
|
0.2
|
|
(0.1
|
)
|
|||
U.S. Federal & State Tax Credits
|
0.3
|
|
(0.1
|
)
|
|
10.2
|
|
(4.0
|
)
|
|
3.5
|
|
(1.1
|
)
|
|||
Uncertain Tax Positions
|
(0.7
|
)
|
0.2
|
|
|
(0.3
|
)
|
0.1
|
|
|
1.2
|
|
(0.4
|
)
|
|||
Capital Loss Expiration
|
(2.7
|
)
|
0.7
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||
Domestic Minority Interest
|
13.7
|
|
(3.9
|
)
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||
Other
|
(0.2
|
)
|
—
|
|
|
3.2
|
|
(1.3
|
)
|
|
0.1
|
|
—
|
|
|||
Income Tax Benefit (Expense)
|
$
|
(54.7
|
)
|
15.7
|
%
|
|
$
|
45.5
|
|
(18.0
|
)%
|
|
$
|
(93.2
|
)
|
29.2
|
%
|
In millions
|
2018
|
2017
|
||||
Deferred Income Tax Assets:
|
|
|
||||
Compensation Based Accruals
|
$
|
2.9
|
|
$
|
16.5
|
|
Net Operating Loss Carryforwards
|
73.4
|
|
114.9
|
|
||
Postretirement Benefits
|
1.0
|
|
25.6
|
|
||
Tax Credits
|
30.8
|
|
17.6
|
|
||
Other
|
7.6
|
|
45.9
|
|
||
Valuation Allowance
|
(36.3
|
)
|
(51.5
|
)
|
||
Total Deferred Income Tax Assets
|
$
|
79.4
|
|
$
|
169.0
|
|
Deferred Income Tax Liabilities:
|
|
|
||||
Property, Plant and Equipment
|
(16.7
|
)
|
(219.8
|
)
|
||
Goodwill
|
(2.3
|
)
|
(192.0
|
)
|
||
Other Intangibles
|
(12.3
|
)
|
(68.7
|
)
|
||
Investment in Partnership
|
(502.1
|
)
|
—
|
|
||
Other
|
—
|
|
(3.5
|
)
|
||
Net Noncurrent Deferred Income Tax Liabilities
|
$
|
(533.4
|
)
|
$
|
(484.0
|
)
|
Net Deferred Income Tax Liability
|
$
|
(454.0
|
)
|
$
|
(315.0
|
)
|
|
December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
Balance Beginning of Period
|
$
|
51.5
|
|
$
|
45.5
|
|
$
|
44.8
|
|
Adjustments for (Income) and Expenses
|
(13.0
|
)
|
5.5
|
|
1.2
|
|
|||
(Deductions) Additions
|
(2.2
|
)
|
0.5
|
|
(0.5
|
)
|
|||
Balance at End of Period
|
$
|
36.3
|
|
$
|
51.5
|
|
$
|
45.5
|
|
In millions
|
2018
|
2017
|
||||
Balance at January 1,
|
$
|
10.5
|
|
$
|
10.1
|
|
Additions for Tax Positions of Current Year
|
0.8
|
|
0.6
|
|
||
Additions for Tax Positions of Prior Years
|
5.2
|
|
0.7
|
|
||
Reductions for Tax Positions of Prior Years
|
(1.0
|
)
|
(0.9
|
)
|
||
Balance at December 31,
|
$
|
15.5
|
|
$
|
10.5
|
|
NOTE 9.
|
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES
|
Start
|
End
|
(In Millions)
Notional Amount |
Weighted Average Interest Rate
|
04/03/2018
|
01/01/2019
|
$150.0
|
2.03%
|
04/03/2018
|
01/01/2020
|
$150.0
|
2.25%
|
04/03/2018
|
10/01/2020
|
$150.0
|
2.36%
|
12/03/2018
|
01/01/2022
|
$120.0
|
2.92%
|
12/03/2018
|
01/04/2022
|
$80.0
|
2.79%
|
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 (Ineffective Portion)
|
|||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|||||||||||||||||
In millions
|
2018
|
2017
|
|
2018
|
2017
|
|
2018
|
2017
|
||||||||||||||
Commodity Contracts
|
$
|
(0.7
|
)
|
$
|
3.6
|
|
|
Cost of Sales
|
$
|
(0.4
|
)
|
$
|
(1.2
|
)
|
|
Cost of Sales
|
$
|
—
|
|
$
|
(0.1
|
)
|
Foreign Currency Contracts
|
(0.3
|
)
|
3.1
|
|
|
Other Income, Net
|
0.7
|
|
(0.3
|
)
|
|
Other Income, Net
|
—
|
|
—
|
|
||||||
Interest Rate Swap Agreements
|
2.0
|
|
(1.0
|
)
|
|
Interest Expense, Net
|
(0.9
|
)
|
(0.6
|
)
|
|
Interest Expense, Net
|
—
|
|
—
|
|
||||||
Total
|
$
|
1.0
|
|
$
|
5.7
|
|
|
|
$
|
(0.6
|
)
|
$
|
(2.1
|
)
|
|
|
$
|
—
|
|
$
|
(0.1
|
)
|
In millions
|
|
2018
|
2017
|
||||
Foreign Currency Contracts
|
Other (Income) Expense, Net
|
$
|
(5.6
|
)
|
$
|
9.7
|
|
In millions
|
2018
|
2017
|
2016
|
||||||
Balance at January 1
|
$
|
(0.3
|
)
|
$
|
7.5
|
|
$
|
(13.5
|
)
|
Reclassification to earnings
|
(0.6
|
)
|
(2.1
|
)
|
15.0
|
|
|||
Current period change in fair value
|
(1.0
|
)
|
(5.7
|
)
|
6.0
|
|
|||
Balance at December 31
|
$
|
(1.9
|
)
|
$
|
(0.3
|
)
|
$
|
7.5
|
|
NOTE 11.
|
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
In millions
|
Pretax Amount
|
Tax Effect
|
Net Amount
(a)
|
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
|
Pretax Amount
|
Tax Effect
|
Net Amount
|
||||||||||||||||||
Derivative Instruments (Loss) Gain
|
$
|
(1.1
|
)
|
$
|
0.1
|
|
$
|
(1.0
|
)
|
|
$
|
(7.8
|
)
|
$
|
2.9
|
|
$
|
(4.9
|
)
|
|
$
|
21.0
|
|
$
|
(8.0
|
)
|
$
|
13.0
|
|
Pension and Postretirement Benefit Plans
|
(24.8
|
)
|
5.4
|
|
(19.4
|
)
|
|
12.3
|
|
(3.5
|
)
|
8.8
|
|
|
7.9
|
|
(3.9
|
)
|
4.0
|
|
|||||||||
Currency Translation Adjustment
|
(18.7
|
)
|
—
|
|
(18.7
|
)
|
|
44.9
|
|
—
|
|
44.9
|
|
|
(58.9
|
)
|
—
|
|
(58.9
|
)
|
|||||||||
Other Comprehensive (Loss) Income
|
$
|
(44.6
|
)
|
$
|
5.5
|
|
$
|
(39.1
|
)
|
|
$
|
49.4
|
|
$
|
(0.6
|
)
|
$
|
48.8
|
|
|
$
|
(30.0
|
)
|
$
|
(11.9
|
)
|
$
|
(41.9
|
)
|
(a)
|
Amounts include impact of noncontrolling interest. See Note 18 - Changes in Accumulated Other Comprehensive (Loss) Income.
|
|
December 31,
|
|||||
In millions
|
2018
|
2017
|
||||
Accumulated Derivative Instruments Loss
|
$
|
(11.3
|
)
|
$
|
(10.3
|
)
|
Pension and Postretirement Benefit Plans
|
(246.1
|
)
|
(226.7
|
)
|
||
Currency Translation Adjustment
|
(120.5
|
)
|
(101.8
|
)
|
||
Accumulated Other Comprehensive Loss
|
$
|
(377.9
|
)
|
$
|
(338.8
|
)
|
NOTE 12.
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
||||
In millions
|
Capital Leases and Financing Obligations
(a)
|
|
Operating Leases
|
||||
2019
|
$
|
10.3
|
|
|
$
|
61.8
|
|
2020
|
10.4
|
|
|
49.8
|
|
||
2021
|
10.5
|
|
|
37.7
|
|
||
2022
|
10.1
|
|
|
30.0
|
|
||
2023
|
10.2
|
|
|
23.3
|
|
||
Thereafter
|
147.2
|
|
|
36.9
|
|
||
Total Minimum Lease Payments
|
$
|
198.7
|
|
|
$
|
239.5
|
|
Less: Amount Representing Interest
|
(75.8
|
)
|
|
|
|||
Present Value of Net Minimum Leases
|
$
|
122.9
|
|
|
|
In millions
|
|
||
2019
|
$
|
83.4
|
|
2020
|
38.6
|
|
|
2021
|
30.2
|
|
|
2022
|
30.0
|
|
|
2023
|
29.8
|
|
|
Thereafter
|
131.4
|
|
|
Total
|
$
|
343.4
|
|
NOTE 13.
|
ENVIRONMENTAL AND LEGAL MATTERS
|
NOTE 14.
|
REDEEMABLE NONCONTROLLING INTEREST
|
In millions
|
|
||
Balance at December 31, 2017
|
$
|
—
|
|
Issuance of Redeemable Noncontrolling Interest at January 1, 2018
|
255.2
|
|
|
Reclassification to Redeemable Noncontrolling Interest for Share Repurchases
|
12.5
|
|
|
Net Income Attributable to Redeemable Noncontrolling Interest
|
16.6
|
|
|
Other Comprehensive Loss, Net of Tax
|
(2.8
|
)
|
|
Distributions of Membership Interest
|
(5.7
|
)
|
|
Balance at December 31, 2018
|
$
|
275.8
|
|
NOTE 15.
|
BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION
|
|
Year Ended December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
NET SALES:
|
|
|
|
||||||
Paperboard Mills
|
$
|
1,076.5
|
|
$
|
399.7
|
|
$
|
394.7
|
|
Americas Paperboard Packaging
|
4,093.9
|
|
3,243.6
|
|
3,193.1
|
|
|||
Europe Paperboard Packaging
|
695.5
|
|
593.1
|
|
569.9
|
|
|||
Corporate/Other/Eliminations
(a)
|
157.1
|
|
167.3
|
|
140.4
|
|
|||
Total
|
$
|
6,023.0
|
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
|
|
|
|
||||||
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||||
Paperboard Mills
(b)
|
$
|
30.6
|
|
$
|
(35.0
|
)
|
$
|
(3.7
|
)
|
Americas Paperboard Packaging
|
420.1
|
|
358.2
|
|
409.0
|
|
|||
Europe Paperboard Packaging
|
46.1
|
|
37.3
|
|
25.4
|
|
|||
Corporate and Other
(c)
|
(38.6
|
)
|
(32.6
|
)
|
(23.3
|
)
|
|||
Total
|
$
|
458.2
|
|
$
|
327.9
|
|
$
|
407.4
|
|
|
|
|
|
||||||
CAPITAL EXPENDITURES:
|
|
|
|
||||||
Paperboard Mills
|
$
|
240.1
|
|
$
|
111.4
|
|
$
|
184.2
|
|
Americas Paperboard Packaging
|
104.3
|
|
98.8
|
|
45.9
|
|
|||
Europe Paperboard Packaging
|
19.5
|
|
17.3
|
|
37.1
|
|
|||
Corporate and Other
|
31.3
|
|
32.6
|
|
27.4
|
|
|||
Total
|
$
|
395.2
|
|
$
|
260.1
|
|
$
|
294.6
|
|
|
|
|
|
||||||
DEPRECIATION AND AMORTIZATION:
|
|
|
|
||||||
Paperboard Mills
|
$
|
197.5
|
|
$
|
143.7
|
|
$
|
120.3
|
|
Americas Paperboard Packaging
|
165.4
|
|
125.3
|
|
124.7
|
|
|||
Europe Paperboard Packaging
|
48.9
|
|
42.1
|
|
41.1
|
|
|||
Corporate and Other
|
18.8
|
|
19.2
|
|
13.2
|
|
|||
Total
|
$
|
430.6
|
|
$
|
330.3
|
|
$
|
299.3
|
|
(a)
|
Includes revenue from contracts with customers for the Australia and Pacific Rim operating segments, which is not material.
|
(b)
|
Includes Augusta, Georgia mill outage in 2018 and accelerated depreciation related to shutdown of the Santa Clara mill in 2017.
|
|
December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
ASSETS AT DECEMBER 31:
|
|
|
|
||||||
Paperboard Mills
|
$
|
3,005.6
|
|
$
|
1,487.0
|
|
$
|
1,496.1
|
|
Americas Paperboard Packaging
|
3,143.6
|
|
2,478.7
|
|
2,419.8
|
|
|||
Europe Paperboard Packaging
|
603.4
|
|
607.1
|
|
491.9
|
|
|||
Corporate and Other
|
306.6
|
|
290.2
|
|
195.6
|
|
|||
Total
|
$
|
7,059.2
|
|
$
|
4,863.0
|
|
$
|
4,603.4
|
|
|
Year Ended December 31,
|
||||||||
In millions
|
2018
|
2017
|
2016
|
||||||
NET SALES:
|
|
|
|
||||||
Americas
(a)
|
$
|
5,170.4
|
|
$
|
3,643.3
|
|
$
|
3,601.7
|
|
Europe
|
695.5
|
|
593.1
|
|
569.9
|
|
|||
Asia Pacific
|
217.8
|
|
215.7
|
|
198.1
|
|
|||
Corporate and Other
|
(60.7
|
)
|
(48.4
|
)
|
(71.6
|
)
|
|||
Total
|
$
|
6,023.0
|
|
$
|
4,403.7
|
|
$
|
4,298.1
|
|
In millions
|
2018
|
2017
|
2016
|
||||||
ASSETS AT DECEMBER 31:
|
|
|
|
||||||
Americas
(a)
|
$
|
6,260.1
|
|
$
|
4,046.4
|
|
$
|
3,923.2
|
|
Europe
|
603.4
|
|
607.1
|
|
491.9
|
|
|||
Asia Pacific
|
195.7
|
|
209.5
|
|
188.3
|
|
|||
Total
|
$
|
7,059.2
|
|
$
|
4,863.0
|
|
$
|
4,603.4
|
|
NOTE 16.
|
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
|
|
2018
|
||||||||||||||
In millions, except per share amounts
|
First
|
Second
|
Third
|
Fourth
|
Total
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,476.0
|
|
$
|
1,509.3
|
|
$
|
1,530.0
|
|
$
|
1,507.7
|
|
$
|
6,023.0
|
|
Gross Profit
|
222.5
|
|
235.9
|
|
256.5
|
|
231.1
|
|
946.0
|
|
|||||
Business Combinations, (Gain) on Sale of Assets and Shutdown and Other Special Charges, Net
|
26.3
|
|
8.6
|
|
(27.4
|
)
|
7.4
|
|
14.9
|
|
|||||
Income from Operations
|
74.0
|
|
110.3
|
|
166.4
|
|
107.5
|
|
458.2
|
|
|||||
Net Income
|
42.7
|
|
66.0
|
|
122.0
|
|
63.3
|
|
294.0
|
|
|||||
Net Income Attributable to Graphic Packaging Holding Company
|
29.9
|
|
49.4
|
|
94.3
|
|
47.5
|
|
221.1
|
|
|||||
Net Income Per Share Attributable to Graphic Packaging Holding Company — Basic
(a)
|
$
|
0.10
|
|
$
|
0.16
|
|
$
|
0.30
|
|
$
|
0.16
|
|
$
|
0.71
|
|
Net Income Per Share Attributable to Graphic Packaging Holding Company — Diluted
|
$
|
0.10
|
|
$
|
0.16
|
|
$
|
0.30
|
|
$
|
0.15
|
|
$
|
0.71
|
|
|
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
|
71.6
|
|
83.8
|
|
91.4
|
|
81.1
|
|
327.9
|
|
|||||
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
|
|
NOTE 17.
|
EARNINGS PER SHARE
|
|
Year Ended December 31,
|
||||||||
In millions, except per share data
|
2018
|
2017
|
2016
|
||||||
Net Income Attributable to Graphic Packaging Holding Company
|
$
|
221.1
|
|
$
|
300.2
|
|
$
|
228.0
|
|
Weighted Average Shares:
|
|
|
|
||||||
Basic
|
309.5
|
|
311.1
|
|
320.9
|
|
|||
Dilutive effect of RSUs
|
0.6
|
|
0.8
|
|
0.6
|
|
|||
Diluted
|
310.1
|
|
311.9
|
|
321.5
|
|
|||
Earnings Per Share — Basic
|
$
|
0.71
|
|
$
|
0.97
|
|
$
|
0.71
|
|
Earnings Per Share — Diluted
|
$
|
0.71
|
|
$
|
0.96
|
|
$
|
0.71
|
|
NOTE 18.
|
CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
|
In millions
|
Derivatives Instruments
|
Pension and Postretirement Benefit Plans
|
Currency Translation Adjustments
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
(10.3
|
)
|
$
|
(226.7
|
)
|
$
|
(101.8
|
)
|
$
|
(338.8
|
)
|
Other Comprehensive Loss before Reclassifications
|
(0.8
|
)
|
(28.8
|
)
|
(24.5
|
)
|
(54.1
|
)
|
||||
Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income
(b)
|
(0.5
|
)
|
3.3
|
|
—
|
|
2.8
|
|
||||
Net Current-period Other Comprehensive Loss
|
(1.3
|
)
|
(25.5
|
)
|
(24.5
|
)
|
(51.3
|
)
|
||||
Less:
|
|
|
|
|
||||||||
Net Current-period Other Comprehensive Income Attributable to Noncontrolling Interest
(c)
|
0.3
|
|
6.1
|
|
5.8
|
|
12.2
|
|
||||
Balance at December 31, 2018
|
$
|
(11.3
|
)
|
$
|
(246.1
|
)
|
$
|
(120.5
|
)
|
$
|
(377.9
|
)
|
(a)
|
All amounts are net-of-tax.
|
In millions
|
|
|
|
|
||
Details about Accumulated Other Comprehensive Income Components
|
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Statement Where Net Income is Presented
|
||
Derivatives Instruments:
|
|
|
|
|
||
Commodity Contracts
|
|
$
|
(0.4
|
)
|
|
Cost of Sales
|
Foreign Currency Contracts
|
|
0.7
|
|
|
Other Expense, Net
|
|
Interest Rate Swap Agreements
|
|
(0.9
|
)
|
|
Interest Expense, Net
|
|
|
|
(0.6
|
)
|
|
Total before Tax
|
|
|
|
0.1
|
|
|
Tax Expense
|
|
|
|
$
|
(0.5
|
)
|
|
Net of Tax
|
|
|
|
|
|
||
Amortization of Defined Benefit Pension Plans:
|
|
|
|
|
||
Prior Service Costs
|
|
$
|
0.4
|
|
(a)
|
|
Actuarial Losses
|
|
5.9
|
|
(a)
|
|
|
|
|
6.3
|
|
|
Total before Tax
|
|
|
|
(1.3
|
)
|
|
Tax Benefit
|
|
|
|
$
|
5.0
|
|
|
Net of Tax
|
|
|
|
|
|
||
Amortization of Postretirement Benefit Plans:
|
|
|
|
|
||
Prior Service Credits
|
|
$
|
(0.3
|
)
|
(a)
|
|
Actuarial Gains
|
|
(1.8
|
)
|
(a)
|
|
|
|
|
(2.1
|
)
|
|
Total before Tax
|
|
|
|
0.4
|
|
|
Tax Expense
|
|
|
|
$
|
(1.7
|
)
|
|
Net of Tax
|
|
|
|
|
|
||
Total Reclassifications for the Period
|
|
$
|
2.8
|
|
|
|
(a)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 7 — Pensions and Other Postretirement Benefits).
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
|
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, 2018
|
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, 2018.
|
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
|
|
4.8
|
|
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*
|
|
14.1
|
|
21.1
|
|
23.1
|
|
24.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
|
|
/s/ Stephen R. Scherger
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
February 12, 2019
|
Stephen R. Scherger
|
|
|
|
|
|
/s/ Michael P. Doss
|
President and Chief Executive Officer
(Principal Executive Officer)
|
February 12, 2019
|
Michael P. Doss
|
|
|
|
|
|
/s/ Stephen R. Scherger
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
February 12, 2019
|
Stephen R. Scherger
|
|
|
|
|
|
/s/ Deborah R. Frank
|
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
February 12, 2019
|
Deborah R. Frank
|
|
Signatures
|
Title
|
Date
|
|
|
|
/s/ Laurie Brlas
|
Director
|
February 12, 2019
|
Laurie Brlas
|
|
|
|
|
|
/s/ David D. Campbell
|
Director
|
February 12, 2019
|
David D. Campbell
|
|
|
|
|
|
/s/ Paul D. Carrico
|
Director
|
February 12, 2019
|
Paul D. Carrico
|
|
|
|
|
|
/s/ Michael P. Doss
|
Director, President and Chief Executive Officer
|
February 12, 2019
|
Michael P. Doss
|
|
|
|
|
|
/
s
/
Robert A. Hagemann
|
Director
|
February 12, 2019
|
Robert A. Hagemann
|
|
|
|
|
|
/s/ Philip R. Martens
|
Chairman of the Board
|
February 12, 2019
|
Philip R. Martens
|
|
|
|
|
|
/s/ Dean A. Scarborough
|
Director
|
February 12, 2019
|
Dean A. Scarborough
|
|
|
|
|
|
/s/ Larry M. Venturelli
|
Director
|
February 12, 2019
|
Larry M. Venturelli
|
|
|
|
|
|
/s/ Lynn A. Wentworth
|
Director
|
February 12, 2019
|
Lynn A. Wentworth
|
|
|
|
|
|
|
|
|
|
/s/ Stephen R. Scherger
|
|
|
|
|
Stephen R. Scherger
|
|
|
|
|
|
|
|
|
|
/s/ Carla J. Chaney
|
|
|
|
|
Carla J. Chaney
|
|
|
|
|
|
|
|
|
|
/s/ Brad Ankerholz
|
|
|
|
|
Brad Ankerholz
|
|
|
|
|
|
|
|
|
|
/s/ Debbie Frank
|
|
|
|
|
Debbie Frank
|
|
|
|
|
|
|
|
|
|
/s/ Brian A. Wilson
|
|
|
|
|
Brian A. Wilson
|
(a)
|
Definitions
. For purposes of this Section, each of the following terms when capitalized has the respective meaning set forth below:
|
(i)
|
Eligible Individual
. An “Eligible Individual” is a vested Member, the Beneficiary of a deceased vested Member or the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Code of a vested Member, who meets all of the requirements described in Subsections (A) through (C) below:
|
(A)
|
The Member, Beneficiary or alternate payee, as applicable, has not attained his or her Required Beginning Date on or before the Final Distribution Date;
|
(B)
|
The Member, Beneficiary or alternate payee, as applicable, has not commenced his or her benefit as of an Annuity Starting Date prior to the Final Distribution Date; and
|
(C)
|
No portion of the benefit of the Member, Beneficiary or alternate payee, as applicable, is subject to a qualified domestic relations order or other lien that is in effect or pending as of the Final Distribution Date and that would prohibit distribution of such benefit in the form of a single lump-sum payment.
|
(ii)
|
Final Distribution Date
. The “Final Distribution Date” means the date as of which lump-sum payments will be made to Members, Beneficiaries and alternate payees in connection with the termination of the Plan. Within a reasonable period of time following the Final Distribution Date, the Plan’s remaining benefit liabilities shall be satisfied through payments to the PBGC or through the purchase of a group annuity contract from an insurance company selected by the Retirement Committee.
|
(iii)
|
Window Election Deadline
. The “Window Election Deadline” means the earlier of (i) the date that is 60 days after an Eligible Individual initiates the process of commencing benefits under this Section, or (ii) such administrative date as the Retirement Committee may establish in its sole discretion, which shall be no later than the Final Distribution Date.
|
(iv)
|
Window Initiation Period
. The “Window Initiation Period” means the period established by the Retirement Committee during which an Eligible Individual may elect to commence his pension pursuant to this Section.
|
(b)
|
Payment Options for Eligible Individuals
. The following provisions apply to Eligible Individuals who commence their Plan benefits under this Section:
|
(i)
|
Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is eligible, or would be eligible if he or she terminated employment, to commence a normal retirement Pension under Section 5.1 of the applicable Appendix, a late retirement Pension under Section 5.2 of the applicable Appendix, an early retirement Pension under Section 5.3 of the applicable Appendix or a vested Pension under Section 5.5 of the applicable
|
(ii)
|
Non-Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is otherwise not eligible to commence his benefit as of the Final Distribution Date even if he or she terminated employment, may elect to receive his or her Pension benefit in the form of:
|
(B)
|
a single life annuity under Section 6.2(a) of the applicable Appendix,
|
(C)
|
if the Eligible Individual is married on the Final Distribution Date, a Qualified Joint and Survivor Annuity, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee, or
|
(D)
|
if the Eligible Individual is married on the Final Distribution Date, a 75% joint and survivor annuity under Section 6.2(c) of the applicable Appendix with the Eligible Individual’s Spouse as his Beneficiary, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee.
|
(iii)
|
Spousal Consent Requirements
. The election of an Eligible Individual who is a Member to waive the normal form of benefit under Section 6.1(b) of the applicable Appendix is subject to Spousal Consent, as described in Section 2.3(a)(ii).
|
(c)
|
Calculation of Benefits
.
|
(i)
|
Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(i) hereof, the benefit payable under this Section shall be calculated under the provisions of the Plan that generally apply to the calculation of such benefit, but disregarding any limitation on the amount of lump sums otherwise payable under the terms of the Plan.
|
(ii)
|
Non-Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(ii) hereof, the benefit payable under this Section shall be of Equivalent Actuarial Value to the
|
(d)
|
Election Procedures
. An Eligible Individual’s election to commence benefits under this Section must be made in accordance with procedures established by the Retirement Committee. An Eligible Individual’s election to receive payment under this Section must be (i) initiated by the Eligible Individual no later than the last day of the Window Initiation Period and (ii) completed by returning an election form postmarked on or before the Window Election Deadline, unless a later date is required by law due to a delay in the delivery of the election notice to the Eligible Individual. An Eligible Individual who does not notify the Retirement Committee of a change in his or her address by the date established by the Retirement Committee in order for the Eligible Individual to commence a benefit with an Annuity Starting Date on the Final Distribution Date, shall not be eligible to commence his or her benefit under this Section. An Eligible Individual who does not submit a completed election form (including any applicable Spousal Consent) in accordance with this subsection (d) may commence benefits only at the time and in the form determined under the Plan without regard to this Section.
|
(a)
|
Definitions
. For purposes of this Section, each of the following terms when capitalized has the respective meaning set forth below:
|
(i)
|
Eligible Individual
. An “Eligible Individual” is a vested Member, the Beneficiary of a deceased vested Member or the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Code of a vested Member, who meets all of the requirements described in Subsections (A) through (C) below:
|
(A)
|
The Member, Beneficiary or alternate payee, as applicable, has not attained his or her Required Beginning Date on or before the Final Distribution Date;
|
(B)
|
The Member, Beneficiary or alternate payee, as applicable, has not commenced his or her benefit as of an Annuity Starting Date prior to the Final Distribution Date; and
|
(C)
|
No portion of the benefit of the Member, Beneficiary or alternate payee, as applicable, is subject to a qualified domestic relations order or other lien that is in effect or pending as of the Final Distribution Date and that would prohibit distribution of such benefit in the form of a single lump-sum payment.
|
(ii)
|
Final Distribution Date
. The “Final Distribution Date” means the date as of which lump-sum payments will be made to Members, Beneficiaries and alternate payees in connection with the termination of the Plan. Within a reasonable period of time following the Final Distribution Date, the Plan’s remaining benefit liabilities shall be satisfied through payments to the PBGC or through the purchase of a group annuity contract from an insurance company selected by the Retirement Committee.
|
(iii)
|
Window Election Deadline
. The “Window Election Deadline” means the earlier of (i) the date that is 60 days after an Eligible Individual initiates the process of commencing benefits under this Section, or (ii) such administrative date as the Retirement Committee may establish in its sole discretion, which shall be no later than the Final Distribution Date.
|
(iv)
|
Window Initiation Period
. The “Window Initiation Period” means the period established by the Retirement Committee during which an Eligible Individual may elect to commence his pension pursuant to this Section.
|
(b)
|
Payment Options for Eligible Individuals
. The following provisions apply to Eligible Individuals who commence their Plan benefits under this Section:
|
(i)
|
Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is eligible, or would be eligible if he or she terminated employment, to commence a normal retirement Pension under Section 4.01, a late retirement Pension under Section 4.02, an early retirement Pension under Section 4.03 or a vested Pension under Section 4.05 as of the Final Distribution Date, may elect to receive his or her Pension benefit in the form of a lump-sum payment pursuant to this Section or in any form of benefit otherwise available to the Eligible Individual under Section 5.02.
|
(ii)
|
Non-Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is otherwise not eligible to commence his or her benefit as of the Final Distribution Date even if he or she terminated employment, may elect to receive his or her Pension benefit in the form of:
|
(C)
|
if the Eligible Individual is married on the Final Distribution Date, a Qualified Joint and Survivor Annuity, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee, or
|
(D)
|
if the Eligible Individual is married on the Final Distribution Date, a 75% joint and survivor annuity under Section 5.02(c) with the Eligible Individual’s Spouse as his or her Beneficiary, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee.
|
(iii)
|
Spousal Consent Requirements
. The election of an Eligible Individual who is a Member to waive the normal form of benefit under Section 5.01(b) is subject to Spousal Consent.
|
(c)
|
Calculation of Benefits
.
|
(i)
|
Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(i) hereof, the benefit payable under this Section shall be calculated under the provisions of the Plan that generally apply to the calculation of such benefit, but disregarding any limitation on the amount of lump sums otherwise payable under the terms of the Plan.
|
(ii)
|
Non-Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(ii) hereof, the benefit payable
|
(d)
|
Election Procedures
. An Eligible Individual’s election to commence benefits under this Section must be made in accordance with procedures established by the Retirement Committee. An Eligible Individual’s election to receive payment under this Section must be (i) initiated by the Eligible Individual no later than the last day of the Window Initiation Period and (ii) completed by returning an election form postmarked on or before the Window Election Deadline, unless a later date is required by law due to a delay in the delivery of the election notice to the Eligible Individual. An Eligible Individual who does not notify the Retirement Committee of a change in his or her address by the date established by the Retirement Committee in order for the Eligible Individual to commence a benefit with an Annuity Starting Date on the Final Distribution Date, shall not be eligible to commence his or her benefit under this Section. An Eligible Individual who does not submit a completed election form (including any applicable Spousal Consent) in accordance with this subsection (d) may commence benefits only at the time and in the form determined under the Plan without regard to this Section.
|
(a)
|
Definitions
. For purposes of this Section, each of the following terms when capitalized has the respective meaning set forth below:
|
(i)
|
Eligible Individual
. An “Eligible Individual” is a vested Member, the Beneficiary of a deceased vested Member or the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Code of a vested Member, who meets all of the requirements described in Subsections (A) through (C) below:
|
(A)
|
The Member, Beneficiary or alternate payee, as applicable, has not attained his or her Required Beginning Date on or before the Final Distribution Date;
|
(B)
|
The Member, Beneficiary or alternate payee, as applicable, has not commenced his or her benefit as of an Annuity Starting Date prior to the Final Distribution Date; and
|
(C)
|
No portion of the benefit of the Member, Beneficiary or alternate payee, as applicable, is subject to a qualified domestic relations order or other lien that is in effect or pending as of the Final Distribution Date and that would prohibit distribution of such benefit in the form of a single lump-sum payment.
|
(ii)
|
Final Distribution Date
. The “Final Distribution Date” means the date as of which lump-sum payments will be made to Members, Beneficiaries and alternate payees in connection with the termination of the Plan. Within a reasonable period of time following the Final Distribution Date, the Plan’s remaining benefit liabilities shall be satisfied through payments to the PBGC or through the purchase of a group annuity contract from an insurance company selected by the Retirement Committee.
|
(iii)
|
Window Election Deadline
. The “Window Election Deadline” means the earlier of (i) the date that is 60 days after an Eligible Individual initiates the process of commencing benefits under this Section, or (ii) such administrative date as the Retirement Committee may establish in its sole discretion, which shall be no later than the Final Distribution Date.
|
(iv)
|
Window Initiation Period
. The “Window Initiation Period” means the period established by the Retirement Committee during which an Eligible Individual may elect to commence his pension pursuant to this Section.
|
(b)
|
Payment Options for Eligible Individuals
. The following provisions apply to Eligible Individuals who commence their Plan benefits under this Section:
|
(i)
|
Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is eligible, or would be eligible if he or she terminated employment, to commence a normal Retirement Allowance under Section 4.01, a late Retirement Allowance under Section 4.02, an early Retirement Allowance under Section 4.03 or a vested Retirement Allowance under Section 4.04 as of the Final Distribution Date, may elect to receive his or her Retirement Allowance in the form of a lump-sum payment pursuant to this Section or in any form of benefit otherwise available to the Eligible Individual under Section 5.02.
|
(ii)
|
Non-Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is otherwise not eligible to commence his benefit as of the Final Distribution Date even if he or she terminated employment, may elect to receive his or her Retirement Allowance:
|
(C)
|
if the Eligible Individual is married on the Final Distribution Date, as a Qualified Joint and Survivor Annuity, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee, or
|
(D)
|
if the Eligible Individual is married on the Final Distribution Date, under the 75% “
Joint and Survivor Option
” described in Section 5.02(a) with the Eligible Individual’s Spouse as his Beneficiary, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee.
|
(iii)
|
Spousal Consent Requirements
. The election of an Eligible Individual who is a Member to waive the normal form of benefit under Section 5.01(b) is subject to Spousal Consent.
|
(c)
|
Calculation of Benefits
.
|
(i)
|
Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(i) hereof, the benefit payable under this Section shall be calculated under the provisions of the Plan that generally apply to the calculation of such benefit, but disregarding any limitation on the amount of lump sums otherwise payable under the terms of the Plan.
|
(ii)
|
Non-Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(ii) hereof, the benefit payable under this Section shall be of Equivalent Actuarial Value to the Eligible Individual’s Accrued Benefit using the actuarial assumptions for calculating lump sums.
|
(d)
|
Election Procedures
. An Eligible Individual’s election to commence benefits under this Section must be made in accordance with procedures established by the Retirement Committee. An Eligible Individual’s election to receive payment under this Section must be (i) initiated by the Eligible Individual no later than the last day of the Window Initiation Period and (ii) completed
|
(7)
|
Notwithstanding the foregoing, Calvin R. Archie, Michael W. Hatten and Grenda L. Smith shall not be Non-Grandfathered Members, and their benefits hereunder shall be determined as if they had never been Non-Grandfather Members.
|
(a)
|
Definitions
. For purposes of this Section, each of the following terms when capitalized has the respective meaning set forth below:
|
(i)
|
Eligible Individual
. An “Eligible Individual” is a vested Member, the Beneficiary of a deceased vested Member or the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Code of a vested Member, who meets all of the requirements described in Subsections (A) through (C) below:
|
(A)
|
The Member, Beneficiary or alternate payee, as applicable, has not attained his or her Required Beginning Date on or before the Final Distribution Date;
|
(B)
|
The Member, Beneficiary or alternate payee, as applicable, has not commenced his or her benefit as of an Annuity Starting Date prior to the Final Distribution Date; and
|
(C)
|
No portion of the benefit of the Member, Beneficiary or alternate payee, as applicable, is subject to a qualified domestic relations order or other lien that is in effect or pending as of the Final Distribution Date and that would prohibit distribution of such benefit in the form of a single lump-sum payment.
|
(ii)
|
Final Distribution Date
. The “Final Distribution Date” means the date as of which lump-sum payments will be made to Members, Beneficiaries and alternate payees in connection with the termination of the Plan. Within a reasonable period of time following the Final Distribution Date, the Plan’s remaining benefit liabilities shall be satisfied through payments to the PBGC or through the purchase of a group annuity contract from an insurance company selected by the Retirement Committee.
|
(iii)
|
Window Election Deadline
. The “Window Election Deadline” means the earlier of (i) the date that is 60 days after an Eligible Individual initiates the process of commencing benefits under this Section, or (ii) such administrative date as the Retirement Committee may establish in its sole discretion, which shall be no later than the Final Distribution Date.
|
(iv)
|
Window Initiation Period
. The “Window Initiation Period” means the period established by the Retirement Committee during which an Eligible Individual may elect to commence his pension pursuant to this Section.
|
(b)
|
Payment Options for Eligible Individuals
. The following provisions apply to Eligible Individuals who commence their Plan benefits under this Section:
|
(i)
|
Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is eligible, or would be eligible if he or she terminated employment, to commence a normal retirement Pension under Section 5.1, a late retirement Pension under Section 5.2, an early retirement Pension under Section 5.3 or a vested Pension under Section 5.5 (or, with respect to an Eligible Individual covered under Appendix 50, a normal retirement benefit under
|
(ii)
|
Non-Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is otherwise not eligible to commence his benefit as of the Final Distribution Date even if he or she terminated employment, may elect to receive his or her Pension benefit in the form of:
|
(B)
|
a single life annuity under Section 6.2(a) (or, with respect to an Eligible Individual covered under Appendix 50, under Section 5.7(b)(1) of Appendix 50),
|
(C)
|
if the Eligible Individual is married on the Final Distribution Date, a Qualified Joint and Survivor Annuity, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee, or
|
(D)
|
if the Eligible Individual is married on the Final Distribution Date, a 75% joint and survivor annuity under Section 6.2(c) (or, with respect to an Eligible Individual covered under Appendix 50, a qualified optional survivor annuity as described in Section 5.7(b) of Appendix 50) with the Eligible Individual’s Spouse as his Beneficiary, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee.
|
(iii)
|
Spousal Consent Requirements
. The election of an Eligible Individual who is a Member to waive the normal form of benefit under Section 6.1(b) (or, with respect to an Eligible Individual covered under Appendix 50, under Section 5.7(a) of Appendix 50) is subject to the Spousal Consent, as described in Section 7.1(a)(ii) (or, with respect to an Eligible Individual covered under Appendix 50, in Section 5.7(a)(2) of Appendix 50).
|
(c)
|
Calculation of Benefits
.
|
(i)
|
Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(i) hereof, the benefit payable under this Section shall be calculated under the provisions of the Plan that generally apply to the calculation of such benefit, but disregarding any limitation on the amount of lump sums otherwise payable under the terms of the Plan.
|
(ii)
|
Non-Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(ii) hereof, the benefit payable under this Section shall be of Equivalent Actuarial Value to the Eligible Individual’s Accrued Benefit using the actuarial assumptions for calculating lump sums.
|
(d)
|
Election Procedures
. An Eligible Individual’s election to commence benefits under this Section must be made in accordance with procedures established by the Retirement Committee. An Eligible Individual’s election to receive payment under this Section must be (i) initiated by the Eligible Individual no later than the last day of the Window Initiation Period and (ii) completed by returning an election form postmarked on or before the Window Election Deadline, unless a later date is required by law due to a delay in the delivery of the election notice to the Eligible Individual. An Eligible Individual who does not notify the Retirement Committee of a change in his or her address by the date established by the Retirement Committee in order for the Eligible Individual to commence a benefit with an Annuity Starting Date on the Final Distribution Date, shall not be eligible to commence his or her benefit under this Section. An Eligible Individual who does not submit a completed election form (including any applicable Spousal Consent) in accordance with this subsection (d) may commence benefits only at the time and in the form determined under the Plan without regard to this Section.
|
(a)
|
Definitions
. For purposes of this Section, each of the following terms when capitalized has the respective meaning set forth below:
|
(i)
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Eligible Individual
. An “Eligible Individual” is a vested Participant, the Beneficiary of a deceased vested Participant or the alternate payee
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(A)
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The Participant, Beneficiary or alternate payee, as applicable, has not attained his or her Required Beginning Date on or before the Final Distribution Date;
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(B)
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The Participant, Beneficiary or alternate payee, as applicable, has not commenced his or her benefit as of an Annuity Starting Date prior to the Final Distribution Date; and
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(C)
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No portion of the benefit of the Participant, Beneficiary or alternate payee, as applicable, is subject to a qualified domestic relations order or other lien that is in effect or pending as of the Final Distribution Date and that would prohibit distribution of such benefit in the form of a single lump-sum payment.
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(ii)
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Final Distribution Date
. The “Final Distribution Date” means the date as of which payments will be made to Participants, Beneficiaries and alternate payees in connection with the termination of the Plan. Within a reasonable period of time following the Final Distribution Date, the Plan’s remaining benefit liabilities shall be satisfied through payments to the PBGC or through the purchase of a group annuity contract from an insurance company selected by the Retirement Committee.
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(iii)
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Window Election Deadline
. The “Window Election Deadline” means the earlier of (i) the date that is 60 days after an Eligible Individual initiates the process of commencing benefits under this Section, or (ii) such administrative date as the Retirement Committee may establish in its sole discretion, which shall be no later than the Final Distribution Date.
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(iv)
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Window Initiation Period
. The “Window Initiation Period” means the period established by the Retirement Committee during which an Eligible Individual may elect to commence his pension pursuant to this Section.
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(b)
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Payment Options for Eligible Individuals
. An Eligible Individual may elect to receive his or her Retirement Benefit in the form of a lump-sum payment pursuant to this Section or in any form of benefit otherwise available to the Eligible Individual under Section 6.3. The election of an Eligible Individual who is a Participant to waive the normal form of benefit under Section 6.1(a) is subject to Spousal Consent.
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(c)
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Calculation of Benefits
. The benefit payable under this Section shall be calculated under the provisions of the Plan that generally apply to the calculation of such benefit, but disregarding any limitation on the amount of lump sums otherwise payable under the terms of the Plan.
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(d)
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Election Procedures
. An Eligible Individual’s election to commence benefits under this Section must be made in accordance with procedures established by the Retirement Committee. An Eligible Individual’s election to receive payment under this Section must be (i) initiated by the Eligible Individual no later than the last day of the Window Initiation Period and (ii) completed by returning an election form postmarked on or before the Window Election Deadline, unless a later date is required by law due to a delay in the delivery of the election notice to the Eligible Individual. An Eligible Individual who does not notify the Retirement Committee of a change in his or her address by the date established by the Retirement Committee in order for the Eligible Individual to commence a benefit with a Payment Date on the Final Distribution Date, shall not be eligible to commence his or her benefit under this Section. An Eligible Individual who does not submit a completed election form (including any applicable Spousal Consent) in accordance with this subsection (d) may commence benefits only at the time and in the form determined under the Plan without regard to this Section.
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(a)
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Definitions
. For purposes of this Section, each of the following terms when capitalized has the respective meaning set forth below:
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(i)
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Eligible Individual
. An “Eligible Individual” is a vested Participant, the Beneficiary of a deceased vested Participant or the alternate payee under a qualified domestic relations order as defined in Section 414(p) of the Code of a vested Participant, who meets all of the requirements described in Subsections (A) through (C) below:
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(A)
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The Participant, Beneficiary or alternate payee, as applicable, has not attained his or her Required Beginning Date on or before the Final Distribution Date;
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(B)
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The Participant, Beneficiary or alternate payee, as applicable, has not commenced his or her benefit as of an Annuity Starting Date prior to the Final Distribution Date; and
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(C)
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No portion of the benefit of the Participant, Beneficiary or alternate payee, as applicable, is subject to a qualified domestic relations order or other lien that is in effect or pending as of the Final Distribution Date and that would prohibit distribution of such benefit in the form of a single lump-sum payment.
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(ii)
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Final Distribution Date
. The “Final Distribution Date” means the date as of which payments will be made to Participants, Beneficiaries and alternate payees in connection with the termination of the Plan. Within a reasonable period of time following the Final Distribution Date, the Plan’s remaining benefit liabilities shall be satisfied through payments to the PBGC or through the purchase of a group annuity contract from an insurance company selected by the Retirement Committee.
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(iii)
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Window Election Deadline
. The “Window Election Deadline” means the earlier of (i) the date that is 60 days after an Eligible Individual initiates the process of commencing benefits under this Section, or (ii) such administrative date as the Retirement Committee may establish in its sole discretion, which shall be no later than the Final Distribution Date.
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(iv)
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Window Initiation Period
. The “Window Initiation Period” means the period established by the Retirement Committee during which an Eligible Individual may elect to commence his pension pursuant to this Section.
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(b)
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Payment Options for Eligible Individuals
. The following provisions apply to Eligible Individuals who commence their Plan benefits under this Section:
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(i)
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Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is eligible, or would be eligible if he or she terminated employment, to commence a Normal or Deferred Retirement Benefit under Section 5.1, an Early Retirement Benefit under Section 5.3 or a Deferred Vested Benefit under Section 6.5 as of the Final Distribution Date, may elect to receive his or her Plan benefit in the form of a lump-sum payment pursuant to this Section or in any form of benefit otherwise available to the Eligible Individual under Section 7.1 or Section 7.2.
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(ii)
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Non-Retirement-Eligible Individual
. An Eligible Individual who, as of the Final Distribution Date, is otherwise not eligible to commence his benefit as of the Final Distribution Date even if he or she terminated employment, may elect to receive his or her Plan benefit in the form of:
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(C)
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if the Eligible Individual is married on the Final Distribution Date, a Qualified Joint and Survivor Annuity, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee, or
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(D)
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if the Eligible Individual is married on the Final Distribution Date, a 75% Joint and Survivor Annuity under Section 7.2(a) with the Eligible Individual’s Eligible Spouse as his Beneficiary, provided this form of distribution will not be available to an Eligible Individual who is a Beneficiary or an alternate payee.
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(iii)
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Spousal Consent Requirements
. The election of an Eligible Individual who is a Participant to waive the normal form of benefit under Section 7.1(a)(i) is subject to the spousal consent requirements of Section 7.1(b).
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(c)
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Calculation of Benefits
.
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(i)
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Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(i) hereof, the benefit payable under this Section shall be calculated under the provisions of the Plan that generally apply to the calculation of such benefit, but disregarding any limitation on the amount of lump sums otherwise payable under the terms of the Plan.
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(ii)
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Non-Retirement-Eligible Individual
. With respect to an Eligible Individual described in subsection (b)(ii) hereof, the benefit payable under this Section shall be Actuarially Equivalent to the Eligible Individual’s Accrued Benefit using the actuarial assumptions for calculating lump sums.
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(d)
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Election Procedures
. An Eligible Individual’s election to commence benefits under this Section must be made in accordance with procedures established by the Retirement Committee. An Eligible Individual’s election to receive payment under this Section must be (i) initiated by the Eligible Individual
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/s/ Stephen R. Scherger
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Stephen R. Scherger
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/s/ Carla J. Chaney
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Carla J. Chaney
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/s/ Brad Ankerholz
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Brad Ankerholz
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/s/ Debbie Frank
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Debbie Frank
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/s/ Brian A. Wilson
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Brian A. Wilson
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Subsidiary Name
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Jurisdiction of Incorporation
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Altivity Packaging Grupo, S. de R.L. de C.V.
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Mexico
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Altivity Packaging Servicios, S. de R.L. de C.V.
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Mexico
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Bond Project Holdings, LLC
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Delaware
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Field Container Queretaro (USA), L.L.C.
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Delaware
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Gbox SA de C.V.
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Mexico
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Golden Equities, LLC
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Colorado
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Golden Technologies Company, LLC
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Colorado
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GPI Funding LLC
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Delaware
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GPI Holding I, Inc.
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Delaware
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GPI Holding II, Inc.
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Delaware
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GPI Holding III, LLC
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Delaware
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GPI Project, LLC
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Delaware
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GPI Netherlands Finance B.V.
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Netherlands
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GPI Scotland Finance LP
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UK
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GPI Scotland Limited
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UK
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Graphic Packaging Flexible Canada ULC
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Canada
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Graphic Packaging Flexible Holdings, LLC
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Delaware
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Graphic Packaging International (Shanghai) Co., Ltd.
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China
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Graphic Packaging International Australia Converting Limited
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Australia
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Graphic Packaging International Australia Pty Limited
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Australia
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Graphic Packaging International Bardon Limited
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UK
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Graphic Packaging International Box Holdings Limited
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UK
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Graphic Packaging International Bremen GmbH
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Germany
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Graphic Packaging International Canada Corporation
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Canada
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Graphic Packaging International Canada, ULC
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Canada
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Graphic Packaging International Cartons Santander, S.A.
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Spain
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Graphic Packaging International Distribution Limited
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UK
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Graphic Packaging International do Brasil - Embalagens Ltda.
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Brazil
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Graphic Packaging International Enterprises, LLC
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Delaware
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Graphic Packaging International Europe Carton Design Limited
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UK
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Graphic Packaging International Europe Cartons B.V.
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Netherlands
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Graphic Packaging International Europe Finance & Real Estate B.V.
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Netherlands
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Graphic Packaging International Europe Holdings B.V.
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Netherlands
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Graphic Packaging International Europe Netherlands B.V.
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Netherlands
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Graphic Packaging International Europe Netherlands Holdings B.V.
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Netherlands
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Graphic Packaging International Europe N.V.
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Belgium
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Graphic Packaging International Europe Spain Holding, S.A.
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Spain
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Graphic Packaging International Europe UK Holdings Limited
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UK
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Graphic Packaging International Europe UK Limited
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UK
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Graphic Packaging International Foodservice Europe Ltd
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UK
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Graphic Packaging International France
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France
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Graphic Packaging International Gateshead Limited
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UK
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Graphic Packaging International Holding Company, LLC
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Delaware
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Graphic Packaging International Holdings Mexico, S. de R.L. de C.V.
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Mexico
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Graphic Packaging International Ireland Designated Activity Company
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Ireland
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Graphic Packaging International Japan Ltd.
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Japan
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Graphic Packaging International Limited
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UK
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Graphic Packaging International, LLC
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Delaware
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Graphic Packaging International Mexicana, S. de R.L. de C.V.
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Mexico
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Graphic Packaging International New Albany, LLC
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Delaware
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Graphic Packaging International New Zealand Limited
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New Zealand
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Graphic Packaging International Operadora de Mexico, S. de R.L. de C.V.
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Mexico
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Graphic Packaging International Partners, LLC
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Delaware
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Graphic Packaging International Philanthropic Fund
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Delaware
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Graphic Packaging International S.p.A.
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Italy
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Graphic Packaging International Servicios, S. de R.L. de C.V.
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Mexico
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Graphic Packaging International Spain, S.A.
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Spain
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Graphic Packaging International UK Finance Limited
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UK
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Graphic Packaging International US Finance LLC
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Delaware
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Graphic Packaging UK Pension Trustee Company Ltd.
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UK
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Handschy Holdings, LLC
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Delaware
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Handschy Industries, LLC
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Delaware
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New Materials Limited
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UK
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Print Design & Graphics Limited
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UK
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PrinTech Systems B.V.
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Netherlands
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Rengo Riverwood Packaging, Limited
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Japan
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Riverdale Industries, LLC
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Delaware
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Riverwood International Pension Trustee Company Ltd.
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UK
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Shoo 553 Limited
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UK
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Spur Development, LLC
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Delaware
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Michael P. Doss
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Michael P. Doss,
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President and Chief Executive Officer
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(Principal Executive Officer)
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February 12, 2019
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Stephen R. Scherger
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Stephen R Scherger
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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February 12, 2019
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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 12, 2019
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/s/ Stephen R. Scherger
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Name: Stephen R. Scherger
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Title: Executive Vice President and Chief Financial Officer
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February 12, 2019
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