|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
47-3335141
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer
|
Incorporation or Organization)
|
|
Identification No.)
|
|
|
|
501 South 5th Street, Richmond, Virginia
|
|
23219-0501
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of Each Class
|
|
Name of Exchange on Which Registered
|
Common Stock, par value $0.01 per share
|
|
New York Stock Exchange
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
|
|
|
|
Page
Reference
|
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 1B.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
|
|
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
Item 7.
|
||
|
|
|
Item 7A.
|
||
|
|
|
Item 8.
|
||
|
|
|
Item 9.
|
||
|
|
|
Item 9A.
|
||
|
|
|
Item 9B.
|
||
|
|
|
|
|
|
|
|
|
Item 10.
|
||
|
|
|
Item 11.
|
||
|
|
|
Item 12.
|
||
|
|
|
Item 13.
|
||
|
|
|
Item 14.
|
||
|
|
|
|
|
|
|
|
|
Item 15.
|
||
|
|
|
Item 16.
|
Term or Acronym
|
|
Definition
|
|
|
|
2016 Incentive Stock Plan
|
|
WestRock Company Incentive Stock Plan
|
2004 Incentive Stock Plan
|
|
Amended and Restated 2004 Incentive Stock Plan
|
Adjusted Earnings from Continuing Operations Per Diluted Share
|
|
As defined on p. 44
|
Adjusted Income from Continuing Operations
|
|
As defined on p. 44
|
A/R Sales Agreement
|
|
As defined on p. 90
|
AFMC
|
|
Alternative fuel mixture credits
|
AGI In-Store
|
|
A.G. Industries, Inc.
|
Antitrust Litigation
|
|
As defined on p. 115
|
APBO
|
|
Accumulated postretirement benefit obligation
|
ASC
|
|
FASB’s Accounting Standards Codification
|
ASU
|
|
Accounting Standards Update
|
BSF
|
|
Billion square feet
|
Boiler MACT
|
|
As defined on p. 10 and 113
|
Business Combination Agreement
|
|
The Second Amended and Restated Business Combination Agreement, dated as of April 17, 2015 and amended as of May 5, 2015 by and among WestRock, RockTenn, MWV, Rome Merger Sub, Inc., and Milan Merger Sub, LLC.
|
CBA or CBAs
|
|
Collective bargaining agreements
|
CBPC
|
|
Cellulosic biofuel producers credits
|
CEO
|
|
Chief Executive Officer
|
CERCLA
|
|
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980
|
Clean Power Plan
|
|
As defined on p.11 and 114
|
CFO
|
|
Chief Financial Officer
|
Code
|
|
The Internal Revenue Code of 1986, as amended
|
Combination
|
|
Pursuant to the Business Combination Agreement, (i) Rome Merger Sub, Inc. was merged with and into RockTenn, with RockTenn surviving the merger as a wholly-owned subsidiary of WestRock, and (ii) Milan Merger Sub, LLC was merged with and into MWV, with MWV surviving the merger as a wholly owned subsidiary of WestRock, which occurred on July 1, 2015
|
Common Stock
|
|
Our common stock, par value $0.01 per share
|
containerboard
|
|
Linerboard and corrugating medium
|
CPM
|
|
Canadian Pensioners’ Mortality
|
Credit Agreement
|
|
As defined on p. 88
|
Credit Facility
|
|
As defined on p. 88
|
EBITDA
|
|
Earnings before interest, taxes, depreciation and amortization
|
EPA
|
|
U.S. Environmental Protection Agency
|
ERISA
|
|
Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations thereunder
|
ESPP Plan
|
|
WestRock Company Employee Stock Purchase Plan
|
Exchange Act
|
|
Securities Exchange Act of 1934, as amended
|
FASB
|
|
Financial Accounting Standards Board
|
FCPA
|
|
Foreign Corrupt Practices Act
|
Farm Credit Facility
|
|
As defined on p. 87
|
Farm Loan Credit Agreement
|
|
As defined on p. 87
|
Term or Acronym
|
|
Definition
|
|
|
|
FIFO
|
|
First-in first-out inventory valuation method
|
FIP
|
|
Funding improvement plan
|
GAAP
|
|
Generally accepted accounting principles in the U.S.
|
GHG
|
|
Greenhouse gases
|
GPS
|
|
Green Power Solutions of Georgia, LLC
|
Grupo Gondi
|
|
Gondi, S.A. de C.V.
|
IDBs
|
|
Industrial Development Bonds
|
Ingevity
|
|
Ingevity Corporation, formerly the Specialty Chemicals business of WestRock Company
|
Installment Note
|
|
As defined on p. 116
|
IRS
|
|
Internal Revenue Service
|
LIBOR
|
|
The London Interbank Offered Rate
|
LIFO
|
|
Last-in first-out inventory valuation method
|
MACT
|
|
Maximum Achievable Control Technology
|
MEPP or MEPPs
|
|
Multiemployer pension plan(s)
|
MMBtu
|
|
One million British Thermal Units
|
MMSF
|
|
Millions of square feet
|
MWV
|
|
WestRock MWV, LLC, formerly known as MeadWestvaco Corporation
|
MWV TN
|
|
As defined on p. 116
|
MWV TN II
|
|
As defined on p. 116
|
MWV Merger Sub
|
|
Milan Merger Sub, LLC
|
NPG
|
|
NPG Holding, Inc.
|
NYSE
|
|
New York Stock Exchange
|
OSHA
|
|
The Occupational Safety and Health Act
|
Packaging Acquisition
|
|
The January 19, 2016 acquisition of certain legal entities formerly owned by Cenveo Inc., in a stock purchase
|
Paris Agreement
|
|
An agreement signed in April 2016 among the U.S. and over 170 other countries which arose out of negotiations at the United Nation’s Conference of Parties (COP21) climate summit in December 2015
|
Pension Act
|
|
Pension Protection Act of 2006
|
PRP or PRPs
|
|
Potentially responsible parties
|
Prudential
|
|
The Prudential Insurance Company of America, a subsidiary of Prudential Financial, Inc.
|
Receivables Facility
|
|
Our receivables-backed financing facility
|
RockTenn
|
|
WestRock RKT Company, formerly known as Rock-Tenn Company
|
RockTenn Common Stock
|
|
RockTenn Class A common stock, par value $0.01 per share
|
RockTenn Merger Sub
|
|
Rome Merger Sub, Inc.
|
RP
|
|
Rehabilitation plan
|
SAR or SARs
|
|
Stock appreciation rights
|
SEC
|
|
Securities and Exchange Commission
|
Separation
|
|
The May 15, 2016 distribution of the outstanding common stock, par value $0.01 per share, of Ingevity to WestRock’s stockholders
|
Seven Hills
|
|
Seven Hills Paperboard LLC
|
SG&A
|
|
Selling, general and administrative expenses
|
Smurfit-Stone
|
|
Smurfit-Stone Container Corporation
|
Smurfit-Stone Acquisition
|
|
Our May 27, 2011 acquisition of Smurfit-Stone
|
SP Fiber
|
|
SP Fiber Holdings, Inc.
|
SP Fiber Acquisition
|
|
Our October 1, 2015 acquisition of SP Fiber
|
Term or Acronym
|
|
Definition
|
|
|
|
Supplemental Plans
|
|
Supplemental retirement savings plans
|
Tacoma Mill
|
|
The Tacoma Kraft Paper Mill formerly owned by Simpson Lumber Company LLC
|
Timber Note
|
|
As defined on p. 116
|
TNH
|
|
Timber Note Holdings LLC
|
USW
|
|
United Steelworkers Union
|
U.S.
|
|
United States
|
WestRock
|
|
WestRock Company
|
WestRock MWV, LLC
|
|
Formerly named MWV
|
WestRock RKT Company
|
|
Formerly named RockTenn
|
Item 1.
|
BUSINESS
|
Item 1A.
|
RISK FACTORS
|
•
|
disruption of our ongoing business, including loss of management focus on existing businesses;
|
•
|
difficulties in integrating acquired businesses and personnel into our business;
|
•
|
inability to achieve expected synergies;
|
•
|
working with partners or other ownership structures with shared decision-making authority;
|
•
|
difficulties in obtaining and verifying relevant information regarding a business prior to the consummation of the transaction, including the identification and assessment of liabilities, claims or other circumstances that could result in litigation or regulatory exposure;
|
•
|
inability to obtain required regulatory approvals and/or required financing on favorable terms;
|
•
|
potential impairment of tangible and intangible assets and goodwill;
|
•
|
problems retaining key employees, contractual relationships or customers;
|
•
|
additional operating losses and expenses of the businesses we acquire or in which we invest;
|
•
|
the difficulty of implementing at companies we acquire the controls, procedures and policies appropriate for a larger public company;
|
•
|
dilution of interests of holders of our Common Stock through the issuance of equity securities;
|
•
|
for non-U.S. transactions, additional risks related to the integration of operations across different cultures and languages, and the economic, political and regulatory risks associated with specific countries; and
|
•
|
acquisitions or investments may ultimately harm our business or financial condition, as they may not be successful.
|
•
|
experiencing an impasse on certain decisions because we do not have sole decision-making authority, which could require us to expend additional resources to resolve impasses or potential disputes;
|
•
|
inability to maintain good relationships with our partners, which could limit our future growth potential;
|
•
|
conflict of interest issues if our partners have competing interests in our markets;
|
•
|
conflicting investment or operational goals with our partners, including the timing, terms and strategies for investments or future growth opportunities;
|
•
|
failure by our partners to fund their share of required capital contributions or to otherwise fulfill their obligations as partners, which may require us to infuse our own capital into these ventures on behalf of the related partner despite other competing uses for capital; and
|
•
|
obtaining consents from our partners for any sale or other disposition of our interest in a joint venture or underlying assets of the joint venture.
|
•
|
difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;
|
•
|
unexpected changes in political or regulatory environments; earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;
|
•
|
restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the U.S.;
|
•
|
political and economic instability;
|
•
|
import and export restrictions and other trade barriers;
|
•
|
difficulties in maintaining overseas subsidiaries and international operations;
|
•
|
difficulties in obtaining approval for significant transactions;
|
•
|
government limitations on foreign ownership;
|
•
|
government takeover or nationalization of business;
|
•
|
government mandated price controls; and
|
•
|
fluctuations in foreign currency exchange rates.
|
•
|
catastrophic events, such as fires, floods, explosions, natural disasters, severe weather or other similar occurrences;
|
•
|
interruptions in the delivery of raw materials or other manufacturing inputs;
|
•
|
adverse government regulations;
|
•
|
equipment breakdowns or failures;
|
•
|
unscheduled maintenance;
|
•
|
information system failures;
|
•
|
violations of our permit requirements or revocation of permits;
|
•
|
releases of pollutants and hazardous substances to air, soil, surface water or ground water;
|
•
|
shortages of equipment or spare parts; and
|
•
|
labor disputes.
|
•
|
general economic conditions, including credit markets and interest rates;
|
•
|
local real estate market conditions, including competition from sellers of land and real estate developers; and
|
•
|
impact of federal, state and local laws and regulations affecting land use, land use entitlements, land protection and zoning.
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
|
Number of Facilities
|
||||
Segment
|
Owned
|
|
Leased
|
|
Total
|
Corrugated Packaging
|
100
|
|
38
|
|
138
|
Consumer Packaging
|
67
|
|
37
|
|
104
|
Land and Development
|
2
|
|
1
|
|
3
|
Corporate and significant regional offices
|
1
|
|
9
|
|
10
|
Total
|
170
|
|
85
|
|
255
|
Location of Mill
|
Linerboard
|
Medium
|
White Top Linerboard
|
Kraft Paper/Bag
|
Market Pulp
|
Bleached Paperboard
|
Total Capacity
|
Fernandina Beach, FL
|
930
|
|
|
|
|
|
930
|
West Point, VA
|
|
185
|
735
|
|
|
|
920
|
Stevenson, AL
|
|
885
|
|
|
|
|
885
|
Solvay, NY
|
548
|
272
|
|
|
|
|
820
|
Hodge, LA
|
800
|
|
|
|
|
|
800
|
Florence, SC
|
683
|
|
|
|
|
|
683
|
Panama City, FL
|
353
|
|
|
|
292
|
|
645
|
Seminole, FL
|
402
|
198
|
|
|
|
|
600
|
Dublin, GA
|
130
|
130
|
|
325
|
|
|
585
|
Hopewell, VA
|
527
|
|
|
|
|
|
527
|
Rigesa, Brazil
|
330
|
170
|
|
|
|
|
500
|
Tacoma, WA
|
90
|
|
275
|
60
|
60
|
|
485
|
La Tuque, QC
|
|
|
345
|
|
|
131
|
476
|
St. Paul, MN
|
|
200
|
|
|
|
|
200
|
Morai, India
|
155
|
25
|
|
|
|
|
180
|
Total Corrugated Packaging Mill Capacity
|
4,948
|
2,065
|
1,355
|
385
|
352
|
131
|
9,236
|
Location of Mill
|
Bleached Paperboard
|
Coated Natural Kraft
|
Coated Recycled Paperboard
|
Specialty Recycled Paperboard
|
Market Pulp
|
Total Capacity
|
Mahrt, AL
|
|
1,066
|
|
|
|
1,066
|
Covington, VA
|
942
|
|
|
|
|
942
|
Evadale, TX
|
585
|
|
|
|
125
|
710
|
Demopolis, AL
|
350
|
|
|
|
100
|
450
|
St. Paul, MN
|
|
|
168
|
|
|
168
|
Battle Creek, MI
|
|
|
160
|
|
|
160
|
Chattanooga, TN
|
|
|
|
140
|
|
140
|
Dallas, TX
|
|
|
127
|
|
|
127
|
Sheldon Springs, VT (Missisquoi Mill)
|
|
|
111
|
|
|
111
|
Lynchburg, VA
|
|
|
|
103
|
|
103
|
Stroudsburg, PA
|
|
|
80
|
|
|
80
|
Eaton, IN
|
|
|
|
64
|
|
64
|
Aurora, IL
|
|
|
|
32
|
|
32
|
Total Consumer Packaging Mill Capacity
|
1,877
|
1,066
|
646
|
339
|
225
|
4,153
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Fiscal 2016
|
|
Fiscal 2015
|
||||||||||||||||||||
|
Market Price
|
|
|
|
Market Price
|
|
|
||||||||||||||||
|
High
|
|
Low
|
|
Dividend
|
|
High
|
|
Low
|
|
Dividend
|
||||||||||||
First Quarter
|
$
|
57.85
|
|
|
$
|
42.75
|
|
|
$
|
0.3750
|
|
|
$
|
62.50
|
|
|
$
|
43.32
|
|
|
$
|
0.1875
|
|
Second Quarter
|
$
|
45.71
|
|
|
$
|
29.73
|
|
|
$
|
0.3750
|
|
|
$
|
71.47
|
|
|
$
|
59.35
|
|
|
$
|
0.3205
|
|
Third Quarter
|
$
|
44.49
|
|
|
$
|
35.52
|
|
|
$
|
0.3750
|
|
|
$
|
66.88
|
|
|
$
|
59.25
|
|
|
$
|
0.3205
|
|
Fourth Quarter
|
$
|
49.18
|
|
|
$
|
36.33
|
|
|
$
|
0.3750
|
|
|
$
|
66.40
|
|
|
$
|
48.80
|
|
|
$
|
0.3750
|
|
|
|
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 Plans or
Programs
|
|||||
July 1, 2016 through July 31, 2016
|
|
132,779
|
|
|
$
|
37.64
|
|
|
132,779
|
|
|
27,460,277
|
|
August 1, 2016 through August 31, 2016
|
|
268,711
|
|
|
44.86
|
|
|
268,711
|
|
|
27,191,566
|
|
|
September 1, 2016 through September 30, 2016
|
|
694,827
|
|
|
47.47
|
|
|
694,827
|
|
|
26,496,739
|
|
|
Total
|
|
1,096,317
|
|
|
|
|
1,096,317
|
|
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended September 30,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||
Net sales
|
$
|
14,171.8
|
|
|
$
|
11,124.8
|
|
|
$
|
9,895.1
|
|
|
$
|
9,545.4
|
|
|
$
|
9,207.6
|
|
Pension risk transfer expense
(a)
|
$
|
370.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pension lump sum settlement and retiree medical curtailment, net
(b)
|
$
|
—
|
|
|
$
|
11.5
|
|
|
$
|
47.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring and other costs, net
|
$
|
366.4
|
|
|
$
|
140.8
|
|
|
$
|
55.6
|
|
|
$
|
78.0
|
|
|
$
|
75.2
|
|
Income from continuing operations
(c)
|
$
|
154.8
|
|
|
$
|
501.2
|
|
|
$
|
483.8
|
|
|
$
|
732.5
|
|
|
$
|
252.2
|
|
(Loss) income from discontinued operations (net of tax)
(d)
|
$
|
(544.7
|
)
|
|
$
|
10.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net (loss) income attributable to common stockholders
|
$
|
(396.3
|
)
|
|
$
|
507.1
|
|
|
$
|
479.7
|
|
|
$
|
727.3
|
|
|
$
|
249.1
|
|
Diluted earnings per share from continuing operations
|
$
|
0.59
|
|
|
$
|
2.87
|
|
|
$
|
3.29
|
|
|
$
|
4.98
|
|
|
$
|
1.72
|
|
Diluted (loss) earnings per share from discontinued operations
|
$
|
(2.13
|
)
|
|
$
|
0.06
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diluted (loss) earnings per share attributable to common stockholders
|
$
|
(1.54
|
)
|
|
$
|
2.93
|
|
|
$
|
3.29
|
|
|
$
|
4.98
|
|
|
$
|
1.72
|
|
Diluted weighted average shares outstanding
|
257.9
|
|
|
173.3
|
|
|
146.0
|
|
|
146.1
|
|
|
144.1
|
|
|||||
Dividends paid per common share
|
$
|
1.50
|
|
|
$
|
1.20
|
|
|
$
|
0.70
|
|
|
$
|
0.525
|
|
|
$
|
0.40
|
|
Book value per common share
|
$
|
38.75
|
|
|
$
|
45.34
|
|
|
$
|
30.76
|
|
|
$
|
29.94
|
|
|
$
|
24.02
|
|
Total assets
|
$
|
23,038.2
|
|
|
$
|
25,372.4
|
|
|
$
|
11,039.7
|
|
|
$
|
10,733.4
|
|
|
$
|
10,687.1
|
|
Current portion of debt
|
$
|
292.9
|
|
|
$
|
63.7
|
|
|
$
|
132.6
|
|
|
$
|
2.9
|
|
|
$
|
261.3
|
|
Long-term debt due after one year
|
$
|
5,496.3
|
|
|
$
|
5,558.2
|
|
|
$
|
2,852.1
|
|
|
$
|
2,841.9
|
|
|
$
|
3,151.2
|
|
Total debt
|
$
|
5,789.2
|
|
|
$
|
5,621.9
|
|
|
$
|
2,984.7
|
|
|
$
|
2,844.8
|
|
|
$
|
3,412.5
|
|
Total stockholders’ equity
|
$
|
9,728.8
|
|
|
$
|
11,651.8
|
|
|
$
|
4,306.8
|
|
|
$
|
4,312.3
|
|
|
$
|
3,405.7
|
|
Net cash provided by operating activities
|
$
|
1,688.4
|
|
|
$
|
1,203.6
|
|
|
$
|
1,151.8
|
|
|
$
|
1,032.5
|
|
|
$
|
656.7
|
|
Capital expenditures
|
$
|
796.7
|
|
|
$
|
585.5
|
|
|
$
|
534.2
|
|
|
$
|
440.4
|
|
|
$
|
452.4
|
|
Cash paid (received) for purchase of businesses, net of cash acquired
|
$
|
376.4
|
|
|
$
|
(3.7
|
)
|
|
$
|
474.4
|
|
|
$
|
6.3
|
|
|
$
|
125.6
|
|
Cash received in merger
|
$
|
—
|
|
|
$
|
265.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchases of common stock
|
$
|
335.3
|
|
|
$
|
336.7
|
|
|
$
|
236.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchases of commons stock - merger related
|
$
|
—
|
|
|
$
|
667.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
In fiscal 2016, using plan assets we settled $2.5 billion of pension obligations of the WestRock Company Consolidated Pension Plan by purchasing group annuity contracts from Prudential. This transaction transferred payment responsibility to Prudential for retirement benefits owed to approximately 35,000 U.S. retirees and their beneficiaries. As a result of the transaction, we recorded a non-cash charge of
$370.7 million
pre-tax. For additional information see
“
Note 14. Retirement Plans
”
of the Notes to Consolidated Financial Statements.
|
(b)
|
In fiscal 2015, payments were made to former employees to partially settle obligations of one of our defined benefit pension plans and we recorded a non-cash pre-tax charge of $20.0 million. In addition, changes in retiree medical coverage for certain employees covered by the USW master agreement resulted in the recognition of an $8.5 million pre-tax curtailment gain. These two items netted to an $11.5 million pre-tax charge. In fiscal 2014, we completed the first phase of our previously announced lump sum pension settlement to certain eligible former employees and recorded a pre-tax charge of $47.9 million. For additional information see
“
Note 14. Retirement Plans
”
of the Notes to Consolidated Financial Statements.
|
(c)
|
Income from continuing operations in fiscal 2015 was reduced by $64.7 million pre-tax expense for inventory stepped-up in purchase accounting, primarily related to the Combination. Net income attributable to common stockholders in fiscal 2015, 2014 and 2013 was increased as a result of a reduction of cost of goods sold of $6.7 million, $32.3 million and $12.2 million pre-tax, respectively, due to the recording of additional value of spare parts at our containerboard mills acquired in the Smurfit-Stone Acquisition. For additional information see
“
Note 4. Inventories
”
of the Notes to Consolidated Financial Statements.
|
(d)
|
Loss from discontinued operations, net of tax in fiscal 2016 includes a
$478.3 million
pre-tax goodwill impairment charge and
$101.1 million
pre-tax customer list impairment charge associated with our former Specialty Chemicals operations. For additional information on these non-cash charges see
“
Note 7. Discontinued Operations
”
of the Notes to Consolidated Financial Statements. Income from discontinued operations, net of tax in the fourth quarter of fiscal 2015 was reduced by
$8.2 million
pre-tax of acquisition inventory step-up expense, net of related LIFO impact.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions)
|
||||||||||
Net sales
|
$
|
14,171.8
|
|
|
$
|
11,124.8
|
|
|
$
|
9,895.1
|
|
Segment income
|
$
|
1,226.2
|
|
|
$
|
1,070.3
|
|
|
$
|
1,039.4
|
|
Income from continuing operations
|
$
|
154.8
|
|
|
$
|
501.2
|
|
|
$
|
483.8
|
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions, except per share data)
|
||||||||||
Net sales
|
$
|
14,171.8
|
|
|
$
|
11,124.8
|
|
|
$
|
9,895.1
|
|
Cost of goods sold
|
11,413.2
|
|
|
8,986.5
|
|
|
7,961.5
|
|
|||
Gross profit
|
2,758.6
|
|
|
2,138.3
|
|
|
1,933.6
|
|
|||
Selling, general and administrative, excluding intangible amortization
|
1,379.4
|
|
|
1,014.6
|
|
|
889.7
|
|
|||
Selling, general and administrative intangible amortization
|
211.8
|
|
|
118.9
|
|
|
86.0
|
|
|||
Pension risk transfer expense
|
370.7
|
|
|
—
|
|
|
—
|
|
|||
Pension lump sum settlement and retiree medical curtailment, net
|
—
|
|
|
11.5
|
|
|
47.9
|
|
|||
Restructuring and other costs, net
|
366.4
|
|
|
140.8
|
|
|
55.6
|
|
|||
Operating profit
|
430.3
|
|
|
852.5
|
|
|
854.4
|
|
|||
Interest expense
|
(256.7
|
)
|
|
(132.5
|
)
|
|
(95.3
|
)
|
|||
Gain (loss) on extinguishment of debt
|
2.7
|
|
|
(2.6
|
)
|
|
—
|
|
|||
Interest income and other income (expense), net
|
58.6
|
|
|
9.7
|
|
|
2.4
|
|
|||
Equity in income of unconsolidated entities
|
9.7
|
|
|
7.1
|
|
|
8.8
|
|
|||
Income from continuing operations before income taxes
|
244.6
|
|
|
734.2
|
|
|
770.3
|
|
|||
Income tax expense
|
(89.8
|
)
|
|
(233.0
|
)
|
|
(286.5
|
)
|
|||
Income from continuing operations
|
154.8
|
|
|
501.2
|
|
|
483.8
|
|
|||
(Loss) income from discontinued operations (net of income tax benefit (expense) of $32.3, $(17.5) and $0)
|
(544.7
|
)
|
|
10.6
|
|
|
—
|
|
|||
Consolidated net (loss) income
|
(389.9
|
)
|
|
511.8
|
|
|
483.8
|
|
|||
Less: Net income attributable to noncontrolling interests
|
(6.4
|
)
|
|
(4.7
|
)
|
|
(4.1
|
)
|
|||
Net (loss) income attributable to common stockholders
|
$
|
(396.3
|
)
|
|
$
|
507.1
|
|
|
$
|
479.7
|
|
|
Years Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Earnings from continuing operations per diluted share
|
$
|
0.59
|
|
|
$
|
2.87
|
|
|
$
|
3.29
|
|
Non-cash pension risk transfer expense
|
0.89
|
|
|
—
|
|
|
—
|
|
|||
Restructuring and other items
|
1.05
|
|
|
0.58
|
|
|
0.26
|
|
|||
Inventory stepped-up in purchase accounting, net of LIFO
|
0.02
|
|
|
0.25
|
|
|
0.01
|
|
|||
Pension lump sum settlement and retiree medical curtailment, net
|
—
|
|
|
0.04
|
|
|
0.20
|
|
|||
Gain on investment in Grupo Gondi
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|||
(Gain) loss on extinguishment of debt
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|||
Adjusted Earnings from Continuing Operations Per Diluted Share
|
$
|
2.53
|
|
|
$
|
3.75
|
|
|
$
|
3.76
|
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
Fiscal 2014
|
||||||||||||||||||
|
LIFO
|
|
FIFO
|
|
LIFO
|
|
FIFO
|
|
LIFO
|
|
FIFO
|
||||||||||||
|
|
|
|
|
(In millions)
|
|
|
|
|
||||||||||||||
Cost of goods sold
|
$
|
11,413.2
|
|
|
$
|
11,452.8
|
|
|
$
|
8,986.5
|
|
|
$
|
8,996.8
|
|
|
$
|
7,961.5
|
|
|
$
|
7,958.4
|
|
Income from continuing operations
|
$
|
154.8
|
|
|
$
|
128.4
|
|
|
$
|
501.2
|
|
|
$
|
494.5
|
|
|
$
|
483.8
|
|
|
$
|
485.8
|
|
|
Net Sales
(Aggregate)
|
|
Segment
Income
|
|
Return
on Sales
|
|||||
|
(In millions, except percentages)
|
|||||||||
Fiscal 2014
|
|
|
|
|
|
|||||
First Quarter
|
$
|
1,751.2
|
|
|
$
|
157.8
|
|
|
9.0
|
%
|
Second Quarter
|
1,738.5
|
|
|
135.9
|
|
|
7.8
|
|
||
Third Quarter
|
1,855.1
|
|
|
181.9
|
|
|
9.8
|
|
||
Fourth Quarter
|
1,912.6
|
|
|
252.4
|
|
|
13.2
|
|
||
Total
|
$
|
7,257.4
|
|
|
$
|
728.0
|
|
|
10.0
|
%
|
|
|
|
|
|
|
|||||
Fiscal 2015
|
|
|
|
|
|
|||||
First Quarter
|
$
|
1,842.8
|
|
|
$
|
184.9
|
|
|
10.0
|
%
|
Second Quarter
|
1,799.5
|
|
|
169.4
|
|
|
9.4
|
|
||
Third Quarter
|
1,887.3
|
|
|
217.0
|
|
|
11.5
|
|
||
Fourth Quarter
|
1,987.3
|
|
|
235.4
|
|
|
11.8
|
|
||
Total
|
$
|
7,516.9
|
|
|
$
|
806.7
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|||||
Fiscal 2016
|
|
|
|
|
|
|||||
First Quarter
|
$
|
1,964.3
|
|
|
$
|
180.1
|
|
|
9.2
|
%
|
Second Quarter
|
1,932.8
|
|
|
175.0
|
|
|
9.1
|
|
||
Third Quarter
|
1,967.7
|
|
|
192.4
|
|
|
9.8
|
|
||
Fourth Quarter
|
2,003.7
|
|
|
192.4
|
|
|
9.6
|
|
||
Total
|
$
|
7,868.5
|
|
|
$
|
739.9
|
|
|
9.4
|
%
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
|||||
Fiscal 2014
|
|
|
|
|
|
|
|
|
|
|||||
North American Corrugated Packaging Shipments - thousands of tons
|
1,803.8
|
|
|
1,809.5
|
|
|
1,961.8
|
|
|
2,074.6
|
|
|
7,649.7
|
|
North American Corrugated Containers Shipments - BSF
|
17.7
|
|
|
17.5
|
|
|
18.2
|
|
|
18.2
|
|
|
71.6
|
|
North American Corrugated Containers Per Shipping Day - MMSF
|
290.9
|
|
|
277.8
|
|
|
287.5
|
|
|
284.7
|
|
|
285.2
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fiscal 2015
|
|
|
|
|
|
|
|
|
|
|||||
North American Corrugated Packaging Shipments - thousands of tons
|
1,995.8
|
|
|
1,936.7
|
|
|
2,032.6
|
|
|
2,018.0
|
|
|
7,983.1
|
|
North American Corrugated Containers Shipments - BSF
|
18.2
|
|
|
18.1
|
|
|
18.8
|
|
|
18.7
|
|
|
73.8
|
|
North American Corrugated Containers Per Shipping Day - MMSF
|
297.7
|
|
|
292.6
|
|
|
298.7
|
|
|
292.6
|
|
|
295.4
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|||||
North American Corrugated Packaging Shipments - thousands of tons
|
2,046.7
|
|
|
2,040.3
|
|
|
2,114.1
|
|
|
2,153.2
|
|
|
8,354.3
|
|
North American Corrugated Containers Shipments - BSF
|
18.7
|
|
|
18.2
|
|
|
18.6
|
|
|
18.9
|
|
|
74.4
|
|
North American Corrugated Containers Per Shipping Day - MMSF
|
306.3
|
|
|
288.6
|
|
|
291.4
|
|
|
294.5
|
|
|
295.1
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
||||||
Fiscal 2015
|
|
|
|
|
|
|
|
|
|
||||||
Brazil / India Corrugated Packaging Shipments - thousands of tons
|
—
|
|
|
—
|
|
|
—
|
|
|
171.4
|
|
|
171.4
|
|
|
Brazil / India Corrugated Containers Shipments - BSF
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
1.4
|
|
|
1.4
|
|
Brazil / India Corrugated Containers Per Shipping Day - MMSF
|
—
|
|
|
—
|
|
|
—
|
|
|
18.1
|
|
|
18.1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fiscal 2016
|
|
|
|
|
|
|
|
|
|
||||||
Brazil / India Corrugated Packaging Shipments - thousands of tons
|
180.2
|
|
|
173.5
|
|
|
166.8
|
|
|
164.8
|
|
|
685.3
|
|
|
Brazil / India Corrugated Containers Shipments - BSF
|
1.5
|
|
|
1.3
|
|
|
1.4
|
|
|
1.6
|
|
|
5.8
|
|
|
Brazil / India Corrugated Containers Per Shipping Day - MMSF
|
19.2
|
|
|
19.8
|
|
|
19.1
|
|
|
19.6
|
|
|
19.4
|
|
(Shipments in thousands of tons)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
|||||
Fiscal 2014
|
1,562.5
|
|
|
1,564.0
|
|
|
1,573.6
|
|
|
1,609.0
|
|
|
6,309.1
|
|
Fiscal 2015
|
1,628.0
|
|
|
1,576.6
|
|
|
1,781.8
|
|
|
1,834.9
|
|
|
6,821.3
|
|
Fiscal 2016
|
1,975.2
|
|
|
1,911.2
|
|
|
1,885.8
|
|
|
1,905.5
|
|
|
7,677.7
|
|
|
Net Sales
(Aggregate)
|
|
Segment
Income
|
|
Return
on Sales
|
|||||
|
(In millions, except percentages)
|
|||||||||
Fiscal 2014
|
|
|
|
|
|
|||||
First Quarter
|
$
|
654.4
|
|
|
$
|
76.9
|
|
|
11.8
|
%
|
Second Quarter
|
699.9
|
|
|
66.3
|
|
|
9.5
|
|
||
Third Quarter
|
719.2
|
|
|
81.0
|
|
|
11.3
|
|
||
Fourth Quarter
|
745.0
|
|
|
87.2
|
|
|
11.7
|
|
||
Total
|
$
|
2,818.5
|
|
|
$
|
311.4
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|||||
Fiscal 2015
|
|
|
|
|
|
|||||
First Quarter
|
$
|
713.0
|
|
|
$
|
59.0
|
|
|
8.3
|
%
|
Second Quarter
|
694.9
|
|
|
52.4
|
|
|
7.5
|
|
||
Third Quarter
|
690.2
|
|
|
77.9
|
|
|
11.3
|
|
||
Fourth Quarter
|
1,642.0
|
|
|
77.7
|
|
|
4.7
|
|
||
Total
|
$
|
3,740.1
|
|
|
$
|
267.0
|
|
|
7.1
|
%
|
|
|
|
|
|
|
|||||
Fiscal 2016
|
|
|
|
|
|
|||||
First Quarter
|
$
|
1,542.2
|
|
|
$
|
91.2
|
|
|
5.9
|
%
|
Second Quarter
|
1,588.4
|
|
|
99.7
|
|
|
6.3
|
|
||
Third Quarter
|
1,635.8
|
|
|
151.7
|
|
|
9.3
|
|
||
Fourth Quarter
|
1,621.7
|
|
|
139.1
|
|
|
8.6
|
|
||
Total
|
$
|
6,388.1
|
|
|
$
|
481.7
|
|
|
7.5
|
%
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Fiscal
Year
|
|||||
Fiscal 2014
|
|
|
|
|
|
|
|
|
|
|||||
Consumer Packaging Shipments - thousands of tons
|
378.1
|
|
|
386.0
|
|
|
394.3
|
|
|
408.7
|
|
|
1,567.1
|
|
Consumer Packaging Converting Shipments - BSF
|
5.0
|
|
|
5.3
|
|
|
5.2
|
|
|
5.4
|
|
|
20.9
|
|
Consumer Packaging Converting Per Shipping Day - MMSF
|
82.0
|
|
|
83.6
|
|
|
82.9
|
|
|
84.4
|
|
|
83.2
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fiscal 2015
|
|
|
|
|
|
|
|
|
|
|||||
Consumer Packaging Shipments - thousands of tons
|
371.2
|
|
|
378.5
|
|
|
388.6
|
|
|
1,043.9
|
|
|
2,182.2
|
|
Consumer Packaging Converting Shipments - BSF
|
5.2
|
|
|
5.3
|
|
|
5.5
|
|
|
9.2
|
|
|
25.2
|
|
Consumer Packaging Converting Per Shipping Day - MMSF
|
84.8
|
|
|
86.7
|
|
|
86.3
|
|
|
144.5
|
|
|
100.9
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|||||
Consumer Packaging Shipments - thousands of tons
|
949.3
|
|
|
974.4
|
|
|
986.3
|
|
|
998.7
|
|
|
3,908.7
|
|
Consumer Packaging Converting Shipments - BSF
|
8.8
|
|
|
9.0
|
|
|
9.5
|
|
|
9.4
|
|
|
36.7
|
|
Consumer Packaging Converting Per Shipping Day -
MMSF
|
144.2
|
|
|
143.7
|
|
|
148.5
|
|
|
146.3
|
|
|
145.7
|
|
|
Net Sales
(Aggregate)
|
|
Segment
Income (Loss)
|
|
Return
on Sales
|
|||||
|
(In millions, except percentages)
|
|||||||||
Fiscal 2015
|
|
|
|
|
|
|||||
Fourth Quarter
|
$
|
45.0
|
|
|
$
|
(3.4
|
)
|
|
(7.6
|
)%
|
Total
|
$
|
45.0
|
|
|
$
|
(3.4
|
)
|
|
(7.6
|
)%
|
|
|
|
|
|
|
|||||
Fiscal 2016
|
|
|
|
|
|
|||||
First Quarter
|
$
|
15.4
|
|
|
$
|
0.7
|
|
|
4.5
|
%
|
Second Quarter
|
18.7
|
|
|
(4.0
|
)
|
|
(21.4
|
)%
|
||
Third Quarter
|
42.0
|
|
|
9.5
|
|
|
22.6
|
%
|
||
Fourth Quarter
|
43.7
|
|
|
(1.6
|
)
|
|
(3.7
|
)%
|
||
Total
|
$
|
119.8
|
|
|
$
|
4.6
|
|
|
3.8
|
%
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
(In millions)
|
|
|
||||||
Net cash provided by operating activities
|
$
|
1,688.4
|
|
|
$
|
1,203.6
|
|
|
$
|
1,151.8
|
|
Net cash used for investing activities
|
$
|
(1,351.4
|
)
|
|
$
|
(282.7
|
)
|
|
$
|
(967.4
|
)
|
Net cash used for financing activities
|
$
|
(231.0
|
)
|
|
$
|
(718.0
|
)
|
|
$
|
(188.1
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Fiscal 2017
|
|
Fiscal 2018
and 2019
|
|
Fiscal 2020
and 2021
|
|
Thereafter
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Long-Term Debt, including current portion, excluding capital lease obligations
(a)
|
$
|
5,325.8
|
|
|
$
|
283.8
|
|
|
$
|
851.0
|
|
|
$
|
1,851.8
|
|
|
$
|
2,339.2
|
|
Operating lease obligations
(b)
|
489.2
|
|
|
104.8
|
|
|
161.3
|
|
|
102.9
|
|
|
120.2
|
|
|||||
Capital lease obligations
(c)
|
161.8
|
|
|
6.6
|
|
|
9.1
|
|
|
5.3
|
|
|
140.8
|
|
|||||
Purchase obligations and other
(d) (e) (f)
|
2,382.5
|
|
|
1,695.0
|
|
|
238.6
|
|
|
105.2
|
|
|
343.7
|
|
|||||
Total
|
$
|
8,359.3
|
|
|
$
|
2,090.2
|
|
|
$
|
1,260.0
|
|
|
$
|
2,065.2
|
|
|
$
|
2,943.9
|
|
(a)
|
The long-term debt line item above includes only principal payments owed on our debt assuming that all of our long-term debt will be held to maturity, excluding scheduled payments. We have excluded
$279.0 million
of fair value of debt step-up, deferred financing costs and unamortized bond discounts from the table to arrive at actual debt obligations. For information on the interest rates applicable to our various debt instruments, see
“Note 10. Debt”
of the Notes to Consolidated Financial Statements.
|
(b)
|
For more information, see “
Note 12. Operating Leases
” of the Notes to Consolidated Financial Statements.
|
(c)
|
The fair value step-up of
$22.6 million
is excluded. For more information, see
“Note 10. Debt”
of the Notes to Consolidated Financial Statements.
|
(d)
|
Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price
|
(e)
|
We have included in the table future estimated minimum pension contributions and estimated benefit payments related to postretirement obligations, supplemental retirement plans and deferred compensation plans. Our estimates are based on current factors, such as discount rates and expected return on plan assets. Future contributions are subject to changes in our underfunded status based on factors such as investment performance, discount rates, return on plan assets and changes in legislation. It is possible that our assumptions may change, actual market performance may vary or we may decide to contribute different amounts.
|
(f)
|
We have not included in the table the following items:
|
•
|
An item labeled “other long-term liabilities” reflected on our consolidated balance sheet because these other long-term liabilities do not have a definite pay-out scheme.
|
•
|
We have excluded from the line item “Purchase obligations and other” $198.8 million for certain provisions of ASC 740 “
Income Taxes
” associated with liabilities for uncertain tax positions due to the uncertainty as to the amount and timing of payment, if any.
|
|
Years Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Income from continuing operations
|
$
|
154.8
|
|
|
$
|
501.2
|
|
|
$
|
483.8
|
|
Non-cash pension risk transfer expense
|
229.8
|
|
|
—
|
|
|
—
|
|
|||
Restructuring and other items
|
268.3
|
|
|
100.8
|
|
|
37.6
|
|
|||
Inventory stepped-up in purchase accounting, net of LIFO
|
5.6
|
|
|
42.7
|
|
|
2.0
|
|
|||
Gain on investment in Grupo Gondi
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|||
Pension lump sum settlement and retiree medical curtailment, net
|
—
|
|
|
7.6
|
|
|
29.9
|
|
|||
(Gain) loss on extinguishment of debt
|
(1.9
|
)
|
|
1.7
|
|
|
—
|
|
|||
Noncontrolling interest from continuing operations
|
(2.1
|
)
|
|
(3.4
|
)
|
|
$
|
(4.1
|
)
|
||
Adjusted Income from Continuing Operations
|
$
|
653.0
|
|
|
$
|
650.6
|
|
|
$
|
549.2
|
|
|
Pension Plans
|
|
Postretirement Plans
|
||||||||||||
|
25 Basis Point
Increase
|
|
25 Basis Point
Decrease
|
|
25 Basis Point
Increase
|
|
25 Basis Point
Decrease
|
||||||||
Discount rate
|
$
|
0.9
|
|
|
$
|
13.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.1
|
|
Compensation level
|
0.3
|
|
|
(0.3
|
)
|
|
N/A
|
|
|
N/A
|
|
||||
Expected long-term rate of return on plan assets
|
(17.3
|
)
|
|
17.3
|
|
|
N/A
|
|
|
N/A
|
|
||||
Medical cost trend
|
N/A
|
|
|
N/A
|
|
|
0.1
|
|
|
(0.1
|
)
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Description
|
|
Page
Reference
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions, except per share data)
|
||||||||||
|
|
|
(recast)
|
|
|
||||||
Net sales
|
$
|
14,171.8
|
|
|
$
|
11,124.8
|
|
|
$
|
9,895.1
|
|
Cost of goods sold
|
11,413.2
|
|
|
8,986.5
|
|
|
7,961.5
|
|
|||
Gross profit
|
2,758.6
|
|
|
2,138.3
|
|
|
1,933.6
|
|
|||
Selling, general and administrative, excluding intangible amortization
|
1,379.4
|
|
|
1,014.6
|
|
|
889.7
|
|
|||
Selling, general and administrative intangible amortization
|
211.8
|
|
|
118.9
|
|
|
86.0
|
|
|||
Pension risk transfer expense
|
370.7
|
|
|
—
|
|
|
—
|
|
|||
Pension lump sum settlement and retiree medical curtailment, net
|
—
|
|
|
11.5
|
|
|
47.9
|
|
|||
Restructuring and other costs, net
|
366.4
|
|
|
140.8
|
|
|
55.6
|
|
|||
Operating profit
|
430.3
|
|
|
852.5
|
|
|
854.4
|
|
|||
Interest expense
|
(256.7
|
)
|
|
(132.5
|
)
|
|
(95.3
|
)
|
|||
Gain (loss) on extinguishment of debt
|
2.7
|
|
|
(2.6
|
)
|
|
—
|
|
|||
Interest income and other income (expense), net
|
58.6
|
|
|
9.7
|
|
|
2.4
|
|
|||
Equity in income of unconsolidated entities
|
9.7
|
|
|
7.1
|
|
|
8.8
|
|
|||
Income from continuing operations before income taxes
|
244.6
|
|
|
734.2
|
|
|
770.3
|
|
|||
Income tax expense
|
(89.8
|
)
|
|
(233.0
|
)
|
|
(286.5
|
)
|
|||
Income from continuing operations
|
154.8
|
|
|
501.2
|
|
|
483.8
|
|
|||
(Loss) income from discontinued operations (net of income tax benefit (expense) of $32.3, $(17.5) and $0)
|
(544.7
|
)
|
|
10.6
|
|
|
—
|
|
|||
Consolidated net (loss) income
|
(389.9
|
)
|
|
511.8
|
|
|
483.8
|
|
|||
Less: Net income attributable to noncontrolling interests
|
(6.4
|
)
|
|
(4.7
|
)
|
|
(4.1
|
)
|
|||
Net (loss) income attributable to common stockholders
|
$
|
(396.3
|
)
|
|
$
|
507.1
|
|
|
$
|
479.7
|
|
|
|
|
|
|
|
||||||
Basic earnings per share from continuing operations
|
$
|
0.60
|
|
|
$
|
2.92
|
|
|
$
|
3.34
|
|
Basic (loss) earnings per share from discontinued operations
|
(2.16
|
)
|
|
0.05
|
|
|
—
|
|
|||
Basic (loss) earnings per share attributable to common stockholders
|
$
|
(1.56
|
)
|
|
$
|
2.97
|
|
|
$
|
3.34
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share from continuing operations
|
$
|
0.59
|
|
|
$
|
2.87
|
|
|
$
|
3.29
|
|
Diluted (loss) earnings per share from discontinued operations
|
(2.13
|
)
|
|
$
|
0.06
|
|
|
—
|
|
||
Diluted (loss) earnings per share attributable to common stockholders
|
$
|
(1.54
|
)
|
|
$
|
2.93
|
|
|
$
|
3.29
|
|
|
|
|
|
|
|
||||||
Cash dividends paid per share
|
$
|
1.50
|
|
|
$
|
1.20
|
|
|
$
|
0.70
|
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions)
|
||||||||||
Consolidated net (loss) income
|
$
|
(389.9
|
)
|
|
$
|
511.8
|
|
|
$
|
483.8
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Foreign currency:
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
109.8
|
|
|
(242.0
|
)
|
|
(29.9
|
)
|
|||
Reclassification adjustment of net loss on foreign currency translation included in earnings
|
20.2
|
|
|
—
|
|
|
—
|
|
|||
Derivatives:
|
|
|
|
|
|
||||||
Deferred loss on cash flow hedges
|
(0.4
|
)
|
|
(1.6
|
)
|
|
—
|
|
|||
Reclassification adjustment of net loss on cash flow hedges included in earnings
|
1.2
|
|
|
0.4
|
|
|
—
|
|
|||
Defined benefit pension and other postretirement benefit plans:
|
|
|
|
|
|
||||||
Net actuarial loss arising during period
|
(224.6
|
)
|
|
(52.6
|
)
|
|
(212.8
|
)
|
|||
Amortization and settlement recognition of net actuarial loss, included in pension and postretirement cost
(1)
|
236.5
|
|
|
30.3
|
|
|
39.4
|
|
|||
Prior service credit (cost) arising during period
|
1.4
|
|
|
(15.4
|
)
|
|
7.6
|
|
|||
Amortization and curtailment recognition of prior service cost (credit), included in pension and postretirement cost
|
1.1
|
|
|
(4.6
|
)
|
|
(0.1
|
)
|
|||
Other comprehensive income (loss)
|
145.2
|
|
|
(285.5
|
)
|
|
(195.8
|
)
|
|||
Comprehensive (loss) income
|
(244.7
|
)
|
|
226.3
|
|
|
288.0
|
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
(5.7
|
)
|
|
(3.9
|
)
|
|
(3.1
|
)
|
|||
Comprehensive (loss) income attributable to common stockholders
|
$
|
(250.4
|
)
|
|
$
|
222.4
|
|
|
$
|
284.9
|
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions, except per share data)
|
||||||
|
|
|
(recast)
|
||||
ASSETS
|
|||||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
340.9
|
|
|
$
|
207.8
|
|
Restricted cash
|
25.5
|
|
|
7.3
|
|
||
Accounts receivable (net of allowances of $36.5 and $29.5)
|
1,592.2
|
|
|
1,575.4
|
|
||
Inventories
|
1,638.2
|
|
|
1,761.0
|
|
||
Other current assets
|
315.8
|
|
|
261.7
|
|
||
Current assets of discontinued operations
|
—
|
|
|
362.8
|
|
||
Total current assets
|
3,912.6
|
|
|
4,176.0
|
|
||
Net property, plant and equipment, net
|
9,294.3
|
|
|
9,159.8
|
|
||
Goodwill
|
4,778.1
|
|
|
4,647.1
|
|
||
Intangibles, net
|
2,599.3
|
|
|
2,794.9
|
|
||
Restricted assets held by special purpose entities
|
1,293.8
|
|
|
1,302.1
|
|
||
Prepaid pension asset
|
257.8
|
|
|
532.9
|
|
||
Other assets
|
902.3
|
|
|
503.9
|
|
||
Long-term assets of discontinued operations
|
—
|
|
|
2,255.7
|
|
||
|
$
|
23,038.2
|
|
|
$
|
25,372.4
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|||||||
Current portion of debt
|
$
|
292.9
|
|
|
$
|
63.7
|
|
Accounts payable
|
1,054.4
|
|
|
1,231.4
|
|
||
Accrued compensation and benefits
|
405.9
|
|
|
354.9
|
|
||
Other current liabilities
|
429.8
|
|
|
410.2
|
|
||
Current liabilities of discontinued operations
|
—
|
|
|
118.6
|
|
||
Total current liabilities
|
2,183.0
|
|
|
2,178.8
|
|
||
Long-term debt due after one year
|
5,496.3
|
|
|
5,558.2
|
|
||
Pension liabilities, net of current portion
|
328.1
|
|
|
316.0
|
|
||
Postretirement benefit liabilities, net of current portion
|
140.0
|
|
|
143.0
|
|
||
Non-recourse liabilities held by special purpose entities
|
1,170.2
|
|
|
1,179.6
|
|
||
Deferred income taxes
|
3,130.7
|
|
|
3,189.7
|
|
||
Other long-term liabilities
|
746.2
|
|
|
647.2
|
|
||
Long-term liabilities of discontinued operations
|
—
|
|
|
361.8
|
|
||
Commitments and contingencies (Notes 12 and 18)
|
|
|
|
||||
Redeemable noncontrolling interests
|
13.7
|
|
|
14.2
|
|
||
Equity:
|
|
|
|
||||
Preferred stock, $0.01 par value; 30.0 million shares authorized; no shares outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 600.0 million shares authorized; 251.0 million and 257.0 million shares outstanding at September 30, 2016 and September 30, 2015, respectively
|
2.5
|
|
|
2.6
|
|
||
Capital in excess of par value
|
10,458.6
|
|
|
10,767.8
|
|
||
Retained earnings (deficit)
|
(105.9
|
)
|
|
1,661.6
|
|
||
Accumulated other comprehensive loss
|
(626.4
|
)
|
|
(780.2
|
)
|
||
Total stockholders’ equity
|
9,728.8
|
|
|
11,651.8
|
|
||
Noncontrolling interests
|
101.2
|
|
|
132.1
|
|
||
Total equity
|
9,830.0
|
|
|
11,783.9
|
|
||
|
$
|
23,038.2
|
|
|
$
|
25,372.4
|
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions, except per share data)
|
||||||||||
Number of Shares of Common Stock Outstanding
(1)
:
|
|
|
|
|
|
||||||
Balance at beginning of fiscal year
|
257.0
|
|
|
140.0
|
|
|
144.0
|
|
|||
Shares issued under restricted stock plan
|
1.6
|
|
|
1.7
|
|
|
0.5
|
|
|||
Issuance of common stock, net of stock received for minimum tax withholdings
(2) (3)
|
0.5
|
|
|
131.4
|
|
|
0.2
|
|
|||
Purchases of common stock
(4)
|
(8.1
|
)
|
|
(16.1
|
)
|
|
(4.7
|
)
|
|||
Balance at end of fiscal year
|
251.0
|
|
|
257.0
|
|
|
140.0
|
|
|||
Common Stock:
|
|
|
|
|
|
||||||
Balance at beginning of fiscal year
|
$
|
2.6
|
|
|
$
|
1.4
|
|
|
$
|
0.7
|
|
Issuance of common stock, net of stock received for minimum tax withholdings
(2)
|
—
|
|
|
1.3
|
|
|
—
|
|
|||
Purchases of common stock
(4)
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Two-for-one stock split
(1)
|
—
|
|
|
—
|
|
|
0.7
|
|
|||
Balance at end of fiscal year
|
2.5
|
|
|
2.6
|
|
|
1.4
|
|
|||
Capital in Excess of Par Value:
|
|
|
|
|
|
||||||
Balance at beginning of fiscal year
|
10,767.8
|
|
|
2,839.8
|
|
|
2,871.4
|
|
|||
Income tax (expense) benefit from share-based plans
|
(15.5
|
)
|
|
22.5
|
|
|
15.0
|
|
|||
Compensation expense under share-based plans
|
76.0
|
|
|
50.2
|
|
|
42.6
|
|
|||
Issuance of common stock, net of stock received for minimum tax withholdings
(2)
|
13.9
|
|
|
8,084.1
|
|
|
4.7
|
|
|||
Fair value of share-based awards issued in the Combination
|
—
|
|
|
210.9
|
|
|
—
|
|
|||
Purchases of common stock
(4)
|
(319.2
|
)
|
|
(439.7
|
)
|
|
(93.2
|
)
|
|||
Two-for-one stock split
(1)
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|||
Separation of Specialty Chemicals business
|
(64.4
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of fiscal year
|
10,458.6
|
|
|
10,767.8
|
|
|
2,839.8
|
|
|||
Retained Earnings (Deficit):
|
|
|
|
|
|
||||||
Balance at beginning of fiscal year
|
1,661.6
|
|
|
1,960.9
|
|
|
1,740.8
|
|
|||
Net (loss) income attributable to common stockholders
|
(396.3
|
)
|
|
507.1
|
|
|
479.7
|
|
|||
Dividends declared (per share - $1.50, $1.20 and $0.70)
(5)
|
(384.2
|
)
|
|
(215.3
|
)
|
|
(100.8
|
)
|
|||
Issuance of common stock, net of stock received for minimum tax withholdings
|
(0.8
|
)
|
|
(26.4
|
)
|
|
(15.7
|
)
|
|||
Purchases of common stock
(4)
|
(16.0
|
)
|
|
(564.7
|
)
|
|
(143.1
|
)
|
|||
Separation of Specialty Chemicals business
|
(970.2
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of fiscal year
|
(105.9
|
)
|
|
1,661.6
|
|
|
1,960.9
|
|
|||
Accumulated Other Comprehensive Loss:
|
|
|
|
|
|
||||||
Balance at beginning of fiscal year
|
(780.2
|
)
|
|
(495.3
|
)
|
|
(300.6
|
)
|
|||
Other comprehensive income (loss), net of tax
|
145.9
|
|
|
(284.9
|
)
|
|
(194.7
|
)
|
|||
Separation of Specialty Chemicals business
|
7.9
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of fiscal year
|
(626.4
|
)
|
|
(780.2
|
)
|
|
(495.3
|
)
|
|||
Total Stockholders’ equity
|
9,728.8
|
|
|
11,651.8
|
|
|
4,306.8
|
|
|||
Noncontrolling Interests:
(6)
|
|
|
|
|
|
||||||
Balance at beginning of fiscal year
|
132.1
|
|
|
0.6
|
|
|
0.5
|
|
|||
Noncontrolling interests assumed in merger
|
10.9
|
|
|
159.3
|
|
|
—
|
|
|||
Net income
|
3.2
|
|
|
0.7
|
|
|
0.5
|
|
|||
Contributions
|
—
|
|
|
3.5
|
|
|
—
|
|
|||
Distributions
|
(18.7
|
)
|
|
(31.9
|
)
|
|
(0.4
|
)
|
|||
Sale of subsidiary shares from noncontrolling interest
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income attributable to noncontrolling interest
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Separation of Specialty Chemicals business
|
(26.1
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of fiscal year
|
101.2
|
|
|
132.1
|
|
|
0.6
|
|
|||
Total equity
|
$
|
9,830.0
|
|
|
$
|
11,783.9
|
|
|
$
|
4,307.4
|
|
(1)
|
On August 27, 2014, we effected a
two
-for-one stock split of RockTenn’s Common Stock in the form of a
100%
stock dividend to shareholders of record as of August 12, 2014. All share and per share information has been retroactively adjusted to reflect the stock split and we recorded the incremental par value of the newly issued shares with the offset to additional paid in capital.
|
(2)
|
Included in the Issuance of common stock is the issuance of approximately
131.2 million
shares of Common Stock valued at
$8,075.8 million
in connection with the Combination.
|
(3)
|
In connection with the Smurfit-Stone acquisition, there were approximately
1.4 million
shares reserved but unissued at the time of the acquisition for the resolution of Smurfit-Stone bankruptcy claims. At September 30, 2016,
0.3 million
shares remain reserved and unissued.
|
(4)
|
In fiscal 2016, we repurchased approximately
8.1 million
shares of our Common Stock for an aggregate cost of
$335.3 million
. Pursuant to the then existing repurchase plan, in the first quarter of fiscal 2015, we repurchased
0.2 million
shares for an aggregate cost of
$8.7 million
. Subsequent to the Combination, in the fourth quarter of fiscal 2015, we repurchased approximately
5.4 million
shares for an aggregate cost of
$328.0 million
under the new authorization. Separately as part of the Combination we repurchased
10.5 million
shares for an aggregate cost of
$667.8 million
.
|
(5)
|
Includes cash dividends paid, dividend equivalent units on certain restricted stock awards and dividends declared but unpaid related to the shares reserved but unissued at the time of the acquisition for the resolution of Smurfit-Stone bankruptcy claims.
|
(6)
|
Excludes amounts related to contingently redeemable noncontrolling interests which are separately classified outside of permanent equity in the Consolidated Balance Sheets.
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions)
|
||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Consolidated net (loss) income
|
$
|
(389.9
|
)
|
|
$
|
511.8
|
|
|
$
|
483.8
|
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
1,146.5
|
|
|
740.8
|
|
|
584.5
|
|
|||
Cost of real estate sold
|
87.7
|
|
|
32.1
|
|
|
—
|
|
|||
Deferred income tax (benefit) expense
|
(160.9
|
)
|
|
161.4
|
|
|
252.1
|
|
|||
Share-based compensation expense
|
75.7
|
|
|
49.2
|
|
|
42.6
|
|
|||
(Gain) loss on extinguishment of debt
|
(2.7
|
)
|
|
2.6
|
|
|
—
|
|
|||
(Gain) loss on disposal of plant, equipment and other, net
|
(6.5
|
)
|
|
1.0
|
|
|
0.3
|
|
|||
Equity in income of unconsolidated entities
|
(9.7
|
)
|
|
(7.1
|
)
|
|
(8.8
|
)
|
|||
Pension and other postretirement funding (more) than expense (income)
|
275.6
|
|
|
(137.7
|
)
|
|
(175.0
|
)
|
|||
Gain on Grupo Gondi investment
|
(12.1
|
)
|
|
—
|
|
|
—
|
|
|||
Cash surrender value increase in excess of premiums paid
|
(27.6
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment adjustments
|
200.8
|
|
|
6.9
|
|
|
9.6
|
|
|||
Other non-cash items
|
(42.1
|
)
|
|
(14.5
|
)
|
|
(4.1
|
)
|
|||
Impairment of Specialty Chemicals goodwill and intangibles
|
579.4
|
|
|
—
|
|
|
—
|
|
|||
Change in operating assets and liabilities, net of acquisitions and divestitures:
|
|
|
|
|
|
||||||
Accounts receivable
|
36.6
|
|
|
106.1
|
|
|
67.3
|
|
|||
Inventories
|
50.6
|
|
|
(27.2
|
)
|
|
(80.5
|
)
|
|||
Other assets
|
(83.7
|
)
|
|
(10.0
|
)
|
|
(1.9
|
)
|
|||
Accounts payable
|
(197.1
|
)
|
|
(38.4
|
)
|
|
(11.6
|
)
|
|||
Income taxes
|
73.2
|
|
|
(23.6
|
)
|
|
1.9
|
|
|||
Accrued liabilities and other
|
94.6
|
|
|
(149.8
|
)
|
|
(8.4
|
)
|
|||
Net cash provided by operating activities
|
1,688.4
|
|
|
1,203.6
|
|
|
1,151.8
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(796.7
|
)
|
|
(585.5
|
)
|
|
(534.2
|
)
|
|||
Cash (paid) received for purchase of businesses, net of cash acquired
|
(376.4
|
)
|
|
3.7
|
|
|
(474.4
|
)
|
|||
Debt purchased in connection with an acquisition
|
(36.5
|
)
|
|
—
|
|
|
—
|
|
|||
Cash received in merger
|
—
|
|
|
265.7
|
|
|
—
|
|
|||
Corporate-owned life insurance premium paid
|
(9.0
|
)
|
|
—
|
|
|
—
|
|
|||
Investment in unconsolidated entities
|
(179.9
|
)
|
|
—
|
|
|
—
|
|
|||
Return of capital from unconsolidated entities
|
5.7
|
|
|
1.1
|
|
|
7.0
|
|
|||
Cash received from affiliated entities
|
—
|
|
|
3.5
|
|
|
—
|
|
|||
Proceeds from sale of subsidiary and affiliates
|
10.2
|
|
|
—
|
|
|
6.8
|
|
|||
Proceeds from sale of property, plant and equipment
|
31.2
|
|
|
28.8
|
|
|
22.4
|
|
|||
Proceeds from property, plant and equipment insurance settlement
|
—
|
|
|
—
|
|
|
5.0
|
|
|||
Net cash used for investing activities
|
(1,351.4
|
)
|
|
(282.7
|
)
|
|
(967.4
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Additions (repayments) to revolving credit facilities
|
125.5
|
|
|
(48.1
|
)
|
|
(52.1
|
)
|
|||
Additions to debt
|
1,511.8
|
|
|
2,176.3
|
|
|
663.8
|
|
|||
Repayments of debt
|
(1,073.3
|
)
|
|
(1,587.5
|
)
|
|
(465.1
|
)
|
|||
Other financing additions (repayments)
|
53.3
|
|
|
(0.6
|
)
|
|
3.8
|
|
|||
Debt issuance costs
|
(3.6
|
)
|
|
(7.8
|
)
|
|
(0.7
|
)
|
|||
Specialty Chemicals spin-off of net cash and trust funding
|
(105.0
|
)
|
|
—
|
|
|
—
|
|
|||
Issuances of common stock, net of related minimum tax withholdings
|
11.8
|
|
|
(19.3
|
)
|
|
(11.0
|
)
|
|||
Purchases of common stock
|
(335.3
|
)
|
|
(336.7
|
)
|
|
(236.3
|
)
|
|||
Purchases of common stock - merger related
|
—
|
|
|
(667.8
|
)
|
|
—
|
|
|||
Excess tax benefits from share-based compensation
|
0.3
|
|
|
23.0
|
|
|
15.1
|
|
|||
Repayments to unconsolidated entity
|
(2.3
|
)
|
|
(0.3
|
)
|
|
(2.0
|
)
|
|||
Cash dividends paid to stockholders
|
(380.7
|
)
|
|
(214.5
|
)
|
|
(101.1
|
)
|
|||
Cash distributions paid to noncontrolling interests
|
(33.5
|
)
|
|
(34.7
|
)
|
|
(2.5
|
)
|
|||
Net cash used for financing activities
|
(231.0
|
)
|
|
(718.0
|
)
|
|
(188.1
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
6.6
|
|
|
(7.2
|
)
|
|
(0.1
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
112.6
|
|
|
195.7
|
|
|
(3.8
|
)
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions)
|
||||||||||
Cash and cash equivalents from continuing operations, at beginning of period
|
207.8
|
|
|
32.6
|
|
|
36.4
|
|
|||
Cash and cash equivalents from discontinued operations, at beginning of period
|
20.5
|
|
|
—
|
|
|
—
|
|
|||
Balance of cash and cash equivalents at beginning of period
|
228.3
|
|
|
32.6
|
|
|
36.4
|
|
|||
Cash and cash equivalents from continuing operations, at end of period
|
340.9
|
|
|
207.8
|
|
|
32.6
|
|
|||
Cash and cash equivalents from discontinued operations, at end of period
|
—
|
|
|
20.5
|
|
|
—
|
|
|||
Balance of cash and cash equivalents at end of period
|
$
|
340.9
|
|
|
$
|
228.3
|
|
|
$
|
32.6
|
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions)
|
||||||||||
Cash paid (received) during the period for:
|
|
|
|
|
|
||||||
Income taxes, net of refunds
|
$
|
157.4
|
|
|
$
|
89.3
|
|
|
$
|
18.8
|
|
Interest, net of amounts capitalized
|
229.9
|
|
|
140.1
|
|
|
86.9
|
|
|
2016
|
||
|
(In millions)
|
||
Derecognized:
|
|
||
Accounts receivable
|
$
|
34.7
|
|
Inventories
|
25.8
|
|
|
Other assets
|
86.3
|
|
|
Accounts payable
|
(15.4
|
)
|
|
Income taxes
|
(1.0
|
)
|
|
Accrued liabilities and other
|
(18.8
|
)
|
|
|
|
||
Recognized:
|
|
||
Investment in unconsolidated entities
|
$
|
(123.7
|
)
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(In millions)
|
||||||||||
Fair value of assets acquired, including goodwill
|
$
|
580.7
|
|
|
$
|
16,001.1
|
|
|
$
|
525.3
|
|
Cash consideration for the purchase of businesses, net of cash acquired
|
376.4
|
|
|
—
|
|
|
472.2
|
|
|||
Unreceived working capital or escrow
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|||
Debt purchased in connection with an acquisition
|
36.5
|
|
|
—
|
|
|
—
|
|
|||
Stock issued in the merger
|
—
|
|
|
8,075.8
|
|
|
—
|
|
|||
Fair value of share-based awards issued in the merger
|
—
|
|
|
210.9
|
|
|
—
|
|
|||
Liabilities and noncontrolling interest assumed
|
$
|
171.3
|
|
|
$
|
7,714.4
|
|
|
$
|
53.1
|
|
|
|
|
|
|
|
||||||
Included in liabilities assumed is the following item:
|
|
|
|
|
|
||||||
Debt assumed in acquisition
|
$
|
15.0
|
|
|
$
|
2,152.9
|
|
|
$
|
0.6
|
|
Note 1.
|
Description of Business and Summary of Significant Accounting Policies
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of fiscal year
|
$
|
29.5
|
|
|
$
|
25.1
|
|
|
$
|
26.8
|
|
Reduction in sales and charges to costs and expenses
|
200.8
|
|
|
166.6
|
|
|
135.0
|
|
|||
Deductions
|
(193.8
|
)
|
|
(162.2
|
)
|
|
(136.7
|
)
|
|||
Balance at end of fiscal year
|
$
|
36.5
|
|
|
$
|
29.5
|
|
|
$
|
25.1
|
|
Buildings and building improvements
|
|
15-40 years
|
Machinery and equipment
|
|
3-25 years
|
Transportation equipment
|
|
3-8 years
|
Note 2.
|
Earnings per Share
|
|
September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Basic earnings per share:
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
154.8
|
|
|
$
|
501.2
|
|
|
$
|
483.8
|
|
Less: Net income from continuing operations attributable to noncontrolling interest
|
(2.1
|
)
|
|
(3.3
|
)
|
|
(4.1
|
)
|
|||
Income available to common stockholders, before discontinued operations
|
152.7
|
|
|
497.9
|
|
|
479.7
|
|
|||
Less: Distributed and undistributed income available to participating securities
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Distributed and undistributed income attributable to common stockholders, before discontinued operations
|
152.7
|
|
|
497.9
|
|
|
479.6
|
|
|||
(Loss) income from discontinued operations
(1)
|
(549.0
|
)
|
|
9.2
|
|
|
—
|
|
|||
Net (loss) income attributable to common stockholders
|
$
|
(396.3
|
)
|
|
$
|
507.1
|
|
|
$
|
479.6
|
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
254.0
|
|
|
170.6
|
|
|
143.6
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings per share from continuing operations
|
$
|
0.60
|
|
|
$
|
2.92
|
|
|
$
|
3.34
|
|
Basic (loss) earnings per share from discontinued operations
|
(2.16
|
)
|
|
0.05
|
|
|
—
|
|
|||
Basic (loss) earnings per share attributable to common stockholders
|
$
|
(1.56
|
)
|
|
$
|
2.97
|
|
|
$
|
3.34
|
|
|
|
|
|
|
|
||||||
Diluted earnings per share
:
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
154.8
|
|
|
$
|
501.2
|
|
|
$
|
483.8
|
|
Less: Net income from continuing operations attributable to noncontrolling interest
|
(2.1
|
)
|
|
(3.3
|
)
|
|
(4.1
|
)
|
|||
Income available to common stockholders, before discontinued operations
|
152.7
|
|
|
497.9
|
|
|
479.7
|
|
|||
Less: Distributed and undistributed income available to participating securities
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Distributed and undistributed income (loss) attributable to common stockholders, before discontinued operations
|
152.7
|
|
|
497.9
|
|
|
479.6
|
|
|||
(Loss) Income from discontinued operations
(1)
|
(549.0
|
)
|
|
9.2
|
|
|
—
|
|
|||
Net (loss) income attributable to common stockholders
|
$
|
(396.3
|
)
|
|
$
|
507.1
|
|
|
$
|
479.6
|
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average shares outstanding
|
254.0
|
|
|
170.6
|
|
|
143.6
|
|
|||
Effect of dilutive stock options and non-participating securities
|
3.9
|
|
|
2.7
|
|
|
2.4
|
|
|||
Diluted weighted average shares outstanding
|
257.9
|
|
|
173.3
|
|
|
146.0
|
|
|||
|
|
|
|
|
|
||||||
Diluted earnings per share from continuing operations
|
$
|
0.59
|
|
|
$
|
2.87
|
|
|
$
|
3.29
|
|
Diluted (loss) earnings per share from discontinued operations
|
(2.13
|
)
|
|
0.06
|
|
|
—
|
|
|||
Diluted (loss) earnings per share attributable to common stockholders
|
$
|
(1.54
|
)
|
|
$
|
2.93
|
|
|
$
|
3.29
|
|
(1)
|
Net of income attributable to noncontrolling interests of discontinued operations of
$4.3 million
and
$1.4 million
for the fiscal years ended
September 30, 2016
and
2015
.
|
Note 3.
|
Accumulated Other Comprehensive Loss and Other Comprehensive (Loss) Income
|
|
Deferred Loss on Cash Flow Hedges
|
|
Defined Benefit Pension and Postretirement Plans
|
|
Foreign Currency Items
|
|
Total
(1)
|
||||||||
Balance at September 30, 2014
|
$
|
(0.2
|
)
|
|
$
|
(498.2
|
)
|
|
$
|
3.1
|
|
|
$
|
(495.3
|
)
|
Other comprehensive loss before reclassifications
|
(1.6
|
)
|
|
(67.6
|
)
|
|
(241.2
|
)
|
|
(310.4
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
|
0.4
|
|
|
25.1
|
|
|
—
|
|
|
25.5
|
|
||||
Net current period other comprehensive loss
|
(1.2
|
)
|
|
(42.5
|
)
|
|
(241.2
|
)
|
|
(284.9
|
)
|
||||
Balance at September 30, 2015
|
(1.4
|
)
|
|
(540.7
|
)
|
|
(238.1
|
)
|
|
(780.2
|
)
|
||||
Other comprehensive (loss) income before reclassifications
|
(0.4
|
)
|
|
(222.2
|
)
|
|
109.9
|
|
|
(112.7
|
)
|
||||
Amounts reclassified from accumulated other comprehensive loss
(2)
|
1.2
|
|
|
237.2
|
|
|
20.2
|
|
|
258.6
|
|
||||
Net current period other comprehensive income
|
0.8
|
|
|
15.0
|
|
|
130.1
|
|
|
145.9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Separation of Specialty Chemicals business
|
0.4
|
|
|
1.9
|
|
|
5.6
|
|
|
7.9
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at September 30, 2016
|
$
|
(0.2
|
)
|
|
$
|
(523.8
|
)
|
|
$
|
(102.4
|
)
|
|
$
|
(626.4
|
)
|
(2)
|
Amounts reclasssified from accumulated other comprehensive loss for defined benefit pension and postretirement plans in fiscal 2016 includes the pension risk transfer expense, net of tax.
|
|
Years Ended September 30,
|
||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||
|
Pretax
|
|
Tax
|
|
Net of Tax
|
|
Pretax
|
|
Tax
|
|
Net of Tax
|
||||||||||||
Amortization of defined benefit pension and postretirement items:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial losses
(2)(6)
|
$
|
(379.4
|
)
|
|
$
|
143.2
|
|
|
$
|
(236.2
|
)
|
|
$
|
(47.7
|
)
|
|
$
|
17.9
|
|
|
$
|
(29.8
|
)
|
Prior service (costs) credits
(2)
|
(1.7
|
)
|
|
0.7
|
|
|
(1.0
|
)
|
|
7.6
|
|
|
(2.9
|
)
|
|
4.7
|
|
||||||
Subtotal defined benefit plans
|
(381.1
|
)
|
|
143.9
|
|
|
(237.2
|
)
|
|
(40.1
|
)
|
|
15.0
|
|
|
(25.1
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sale of foreign subsidiary
(3)
|
(20.2
|
)
|
|
—
|
|
|
(20.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative Instruments:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity currency cash flow hedges
(4)
|
(1.5
|
)
|
|
0.5
|
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency cash flow hedges
(5)
|
(0.4
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
0.3
|
|
|
(0.4
|
)
|
||||||
Subtotal derivative instruments
|
(1.9
|
)
|
|
0.7
|
|
|
(1.2
|
)
|
|
(0.7
|
)
|
|
0.3
|
|
|
(0.4
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total reclassifications for the period
|
$
|
(403.2
|
)
|
|
$
|
144.6
|
|
|
$
|
(258.6
|
)
|
|
$
|
(40.8
|
)
|
|
$
|
15.3
|
|
|
$
|
(25.5
|
)
|
(1)
|
Amounts in parentheses indicate charges to earnings. Amounts pertaining to noncontrolling interests are excluded.
|
(2)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “
Note 14. Retirement Plans
” for additional details.
|
(3)
|
These accumulated other comprehensive income components are included interest income and other income (expense), net.
|
(4)
|
These accumulated other comprehensive income components are included in cost of goods sold.
|
(5)
|
These accumulated other comprehensive income components are included in net sales.
|
(6)
|
Fiscal 2016 includes pension risk transfer expense.
|
Fiscal 2016
|
Pre-Tax
Amount
|
|
Tax
|
|
Net of Tax
Amount
|
||||||
Foreign currency translation gain
|
$
|
109.8
|
|
|
$
|
—
|
|
|
$
|
109.8
|
|
Deferred loss on cash flow hedges
|
(0.7
|
)
|
|
0.3
|
|
|
(0.4
|
)
|
|||
Reclassification adjustment of net loss on cash flow hedges included in earnings
|
1.9
|
|
|
(0.7
|
)
|
|
1.2
|
|
|||
Net actuarial loss arising during period
|
(354.0
|
)
|
|
129.4
|
|
|
(224.6
|
)
|
|||
Amortization and settlement recognition of net actuarial loss
(1)
|
379.7
|
|
|
(143.2
|
)
|
|
236.5
|
|
|||
Prior service credit arising during the period
|
2.3
|
|
|
(0.9
|
)
|
|
1.4
|
|
|||
Amortization of prior service cost
|
1.8
|
|
|
(0.7
|
)
|
|
1.1
|
|
|||
Sale of foreign subsidiary
|
20.2
|
|
|
—
|
|
|
20.2
|
|
|||
Consolidated other comprehensive income
|
161.0
|
|
|
(15.8
|
)
|
|
145.2
|
|
|||
Less: Other comprehensive loss attributable to noncontrolling interests
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|||
Other comprehensive income attributable to common stockholders
|
$
|
161.7
|
|
|
$
|
(15.8
|
)
|
|
$
|
145.9
|
|
|
|
|
|
|
|
||||||
Fiscal 2015
|
Pre-Tax
Amount
|
|
Tax
|
|
Net of Tax
Amount
|
||||||
Foreign currency translation loss
|
$
|
(242.0
|
)
|
|
$
|
—
|
|
|
$
|
(242.0
|
)
|
Deferred loss on cash flow hedges
|
(2.6
|
)
|
|
1.0
|
|
|
(1.6
|
)
|
|||
Reclassification adjustment of net loss on cash flow hedges included in earnings
|
0.7
|
|
|
(0.3
|
)
|
|
0.4
|
|
|||
Net actuarial loss arising during period
|
(81.5
|
)
|
|
28.9
|
|
|
(52.6
|
)
|
|||
Amortization and settlement recognition of net actuarial loss
|
48.1
|
|
|
(17.8
|
)
|
|
30.3
|
|
|||
Prior service cost arising during period
|
(25.0
|
)
|
|
9.6
|
|
|
(15.4
|
)
|
|||
Amortization of prior service credit
|
(7.5
|
)
|
|
2.9
|
|
|
(4.6
|
)
|
|||
Consolidated other comprehensive loss
|
(309.8
|
)
|
|
24.3
|
|
|
(285.5
|
)
|
|||
Less: Other comprehensive loss attributable to noncontrolling interests
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||
Other comprehensive loss attributable to common stockholders
|
$
|
(309.2
|
)
|
|
$
|
24.3
|
|
|
$
|
(284.9
|
)
|
|
|
|
|
|
|
||||||
Fiscal 2014
|
Pre-Tax
Amount
|
|
Tax
|
|
Net of Tax
Amount
|
||||||
Foreign currency translation loss
|
$
|
(29.9
|
)
|
|
$
|
—
|
|
|
$
|
(29.9
|
)
|
Net actuarial loss arising during period
|
(333.3
|
)
|
|
120.5
|
|
|
(212.8
|
)
|
|||
Amortization and settlement recognition of net actuarial loss
|
63.9
|
|
|
(24.5
|
)
|
|
39.4
|
|
|||
Prior service credit arising during period
|
12.4
|
|
|
(4.8
|
)
|
|
7.6
|
|
|||
Amortization of prior service credit
|
(0.2
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Consolidated other comprehensive loss
|
(287.1
|
)
|
|
91.3
|
|
|
(195.8
|
)
|
|||
Less: Other comprehensive loss attributable to noncontrolling interests
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|||
Other comprehensive loss attributable to common stockholders
|
$
|
(286.0
|
)
|
|
$
|
91.3
|
|
|
$
|
(194.7
|
)
|
(1)
|
Includes pension risk transfer expense.
|
Note 4.
|
Inventories
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Finished goods and work in process
|
$
|
800.6
|
|
|
$
|
859.7
|
|
Raw materials
|
535.7
|
|
|
652.3
|
|
||
Supplies and spare parts
|
335.7
|
|
|
322.4
|
|
||
Inventories at FIFO cost
|
1,672.0
|
|
|
1,834.4
|
|
||
LIFO reserve
|
(33.8
|
)
|
|
(73.4
|
)
|
||
Net inventories
|
$
|
1,638.2
|
|
|
$
|
1,761.0
|
|
Note 5.
|
Property, Plant and Equipment
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Property, plant and equipment at cost:
|
|
|
|
||||
Land and buildings
|
$
|
2,307.9
|
|
|
$
|
2,245.2
|
|
Machinery and equipment
|
10,672.9
|
|
|
9,712.4
|
|
||
Forestlands and mineral rights
|
201.1
|
|
|
161.3
|
|
||
Transportation equipment
|
27.6
|
|
|
20.2
|
|
||
Leasehold improvements
|
62.4
|
|
|
59.1
|
|
||
|
13,271.9
|
|
|
12,198.2
|
|
||
Less accumulated depreciation and amortization
|
(3,977.6
|
)
|
|
(3,038.4
|
)
|
||
Net property, plant and equipment, net
|
$
|
9,294.3
|
|
|
$
|
9,159.8
|
|
Note 6.
|
Merger, Acquisitions and Investment
|
|
Amounts Recognized as of the Acquisition Date
|
|
Measurement Period Adjustments
(1)
|
|
Amounts Recognized as of Acquisition Date (as Adjusted)
(2)
|
||||||
Cash and cash equivalents
|
$
|
265.7
|
|
|
$
|
—
|
|
|
$
|
265.7
|
|
Current assets, excluding cash and cash equivalents
|
1,858.8
|
|
|
(0.5
|
)
|
|
1,858.3
|
|
|||
Property, plant and equipment
|
3,991.5
|
|
|
19.3
|
|
|
4,010.8
|
|
|||
Prepaid pension asset
|
1,407.8
|
|
|
(9.9
|
)
|
|
1,397.9
|
|
|||
Goodwill
|
3,817.3
|
|
|
44.7
|
|
|
3,862.0
|
|
|||
Intangible assets
|
2,994.2
|
|
|
—
|
|
|
2,994.2
|
|
|||
Restricted assets held by special purpose entities
|
1,302.0
|
|
|
—
|
|
|
1,302.0
|
|
|||
Other long-term assets
|
363.8
|
|
|
18.0
|
|
|
381.8
|
|
|||
Total assets acquired
|
16,001.1
|
|
|
71.6
|
|
|
16,072.7
|
|
|||
|
|
|
|
|
|
||||||
Current portion of debt
|
62.3
|
|
|
74.8
|
|
|
137.1
|
|
|||
Current liabilities
|
1,099.4
|
|
|
(45.6
|
)
|
|
1,053.8
|
|
|||
Long-term debt due after one year
|
2,090.6
|
|
|
18.3
|
|
|
2,108.9
|
|
|||
Non-recourse liabilities held by special purpose entities
|
1,181.0
|
|
|
—
|
|
|
1,181.0
|
|
|||
Accrued pension and other long-term benefits
|
235.1
|
|
|
—
|
|
|
235.1
|
|
|||
Deferred income tax liabilities
|
2,366.7
|
|
|
(11.0
|
)
|
|
2,355.7
|
|
|||
Other long-term liabilities
|
520.0
|
|
|
35.1
|
|
|
555.1
|
|
|||
Noncontrolling interest
|
159.3
|
|
|
—
|
|
|
159.3
|
|
|||
Total liabilities and noncontrolling interest assumed
|
7,714.4
|
|
|
71.6
|
|
|
7,786.0
|
|
|||
|
|
|
|
|
|
||||||
Net assets acquired
(3)
|
$
|
8,286.7
|
|
|
$
|
—
|
|
|
$
|
8,286.7
|
|
(1)
|
The measurement period adjustments recorded in fiscal 2016 did not have a significant impact on our consolidated statements of operations for fiscal 2016 or 2015. In addition, these adjustments did not have a significant impact on
|
(2)
|
The measurement period adjustments were due primarily to refinements to third party appraisals and carrying amounts of certain assets and liabilities as well as adjustments to certain tax accounts based on, among other things, adjustments to deferred tax liabilities, including any appraisal adjustments, analysis of the tax basis of acquired assets and liabilities, other tax adjustments and the classification of supplier financing arrangements. The net impact of the measurement period adjustments resulted in a net increase to goodwill.
|
(3)
|
The net assets acquired include the Specialty Chemicals business which was separated from WestRock on
May 15, 2016
. See “
Note 7. Discontinued Operations
” for more information.
|
|
|
Weighted Avg. Life
|
|
Gross Carrying Amount
|
||
Customer relationships
|
|
19.2
|
|
$
|
2,881.7
|
|
Patents
|
|
9.8
|
|
57.2
|
|
|
Trademarks
|
|
4.5
|
|
52.9
|
|
|
Favorable contracts
|
|
8.2
|
|
2.4
|
|
|
Total
|
|
18.8
|
|
$
|
2,994.2
|
|
|
Year Ended September 30,
|
||||||
|
2015
|
|
2014
|
||||
|
(Unaudited, in millions)
|
||||||
Net sales
|
$
|
14,347.0
|
|
|
$
|
14,342.7
|
|
Net income attributable to common stockholders
|
$
|
666.3
|
|
|
$
|
502.9
|
|
Note 7.
|
Discontinued Operations
|
|
Fiscal Year Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Net sales
|
$
|
533.7
|
|
|
$
|
256.5
|
|
Cost of goods sold
|
387.5
|
|
|
184.0
|
|
||
Gross profit
|
146.2
|
|
|
72.5
|
|
||
Selling, general and administrative, excluding intangible amortization
|
65.6
|
|
|
27.4
|
|
||
Selling, general and administrative intangible amortization
|
28.8
|
|
|
11.5
|
|
||
Restructuring and other costs, net
|
49.5
|
|
|
6.6
|
|
||
Impairment of Specialty Chemicals goodwill and intangibles
|
579.4
|
|
|
—
|
|
||
Operating (loss) profit
|
(577.1
|
)
|
|
27.0
|
|
||
Interest income (expense) and other income (expense), net
|
0.1
|
|
|
1.1
|
|
||
(Loss) income from discontinued operations before income taxes
|
(577.0
|
)
|
|
28.1
|
|
||
Income tax benefit (expense)
|
32.3
|
|
|
(17.5
|
)
|
||
(Loss) income from discontinued operations
|
$
|
(544.7
|
)
|
|
$
|
10.6
|
|
|
Fiscal Year Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Depreciation, depletion and amortization
|
$
|
57.2
|
|
|
$
|
22.0
|
|
Impairment of Specialty Chemicals goodwill and intangibles
|
$
|
579.4
|
|
|
$
|
—
|
|
Capital expenditures
|
$
|
(45.2
|
)
|
|
$
|
(28.6
|
)
|
Note 8.
|
Restructuring and Other Costs, Net
|
Related Segment
|
|
Period
|
|
Net Property,
Plant and
Equipment
(a)
|
|
Severance
and Other
Employee
Related
Costs
|
|
Equipment
and Inventory
Relocation
Costs
|
|
Facility
Carrying
Costs
|
|
Other
Costs
|
|
Total
|
|||||||||||||
Corrugated
Packaging
(b)
|
|
Fiscal 2016
|
|
$
|
184.5
|
|
|
$
|
17.4
|
|
|
$
|
0.3
|
|
|
$
|
18.9
|
|
|
$
|
9.1
|
|
|
$
|
230.2
|
|
|
|
Fiscal 2015
|
|
1.3
|
|
|
0.4
|
|
|
1.1
|
|
|
3.0
|
|
|
2.2
|
|
|
8.0
|
|
||||||||
|
Fiscal 2014
|
|
8.9
|
|
|
0.9
|
|
|
3.3
|
|
|
5.2
|
|
|
4.1
|
|
|
22.4
|
|
||||||||
|
Cumulative
|
|
226.4
|
|
|
46.8
|
|
|
8.0
|
|
|
33.9
|
|
|
22.7
|
|
|
337.8
|
|
||||||||
|
Expected Total
|
|
226.4
|
|
|
46.8
|
|
|
8.9
|
|
|
38.4
|
|
|
24.2
|
|
|
344.7
|
|
||||||||
Consumer Packaging
(c)
|
|
Fiscal 2016
|
|
3.8
|
|
|
4.6
|
|
|
1.1
|
|
|
0.5
|
|
|
—
|
|
|
10.0
|
|
|||||||
|
Fiscal 2015
|
|
0.9
|
|
|
1.8
|
|
|
0.5
|
|
|
0.9
|
|
|
0.3
|
|
|
4.4
|
|
||||||||
|
Fiscal 2014
|
|
1.3
|
|
|
1.1
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
2.7
|
|
||||||||
|
Cumulative
|
|
9.3
|
|
|
8.0
|
|
|
2.1
|
|
|
1.7
|
|
|
0.5
|
|
|
21.6
|
|
||||||||
|
Expected Total
|
|
9.3
|
|
|
8.2
|
|
|
2.8
|
|
|
1.7
|
|
|
0.5
|
|
|
22.5
|
|
||||||||
Land and Development
(d)
|
|
Fiscal 2016
|
|
—
|
|
|
10.6
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
10.6
|
|
||||||
|
Fiscal 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
Fiscal 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
Cumulative
|
|
—
|
|
|
10.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.6
|
|
||||||||
|
Expected Total
|
|
—
|
|
|
14.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.8
|
|
||||||||
Other
(e)
|
|
Fiscal 2016
|
|
1.2
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
112.9
|
|
|
115.6
|
|
|||||||
|
Fiscal 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128.4
|
|
|
128.4
|
|
||||||||
|
Fiscal 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30.5
|
|
|
30.5
|
|
||||||||
|
Cumulative
|
|
1.2
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
387.1
|
|
|
389.8
|
|
||||||||
|
Expected Total
|
|
1.2
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
387.1
|
|
|
389.8
|
|
||||||||
Total
|
|
Fiscal 2016
|
|
$
|
189.5
|
|
|
$
|
34.1
|
|
|
$
|
1.4
|
|
|
$
|
19.4
|
|
|
$
|
122.0
|
|
|
$
|
366.4
|
|
|
|
Fiscal 2015
|
|
$
|
2.2
|
|
|
$
|
2.2
|
|
|
$
|
1.6
|
|
|
$
|
3.9
|
|
|
$
|
130.9
|
|
|
$
|
140.8
|
|
||
|
Fiscal 2014
|
|
$
|
10.2
|
|
|
$
|
2.0
|
|
|
$
|
3.3
|
|
|
$
|
5.3
|
|
|
$
|
34.8
|
|
|
$
|
55.6
|
|
||
|
Cumulative
|
|
$
|
236.9
|
|
|
$
|
66.9
|
|
|
$
|
10.1
|
|
|
$
|
35.6
|
|
|
$
|
410.3
|
|
|
$
|
759.8
|
|
||
|
Expected Total
|
|
$
|
236.9
|
|
|
$
|
71.3
|
|
|
$
|
11.7
|
|
|
$
|
40.1
|
|
|
$
|
411.8
|
|
|
$
|
771.8
|
|
(a)
|
We have defined
“
Net property, plant and equipment
”
as used in this
Note 8
to represent property, plant and equipment impairment losses, subsequent adjustments to fair value for assets classified as held for sale, subsequent (gains) or losses on sales of property, plant and equipment and related parts and supplies, and accelerated depreciation on such assets, if any.
|
(b)
|
The Corrugated Packaging segment related charges in fiscal 2016 primarily reflect the charges associated with the permanent closures of the Coshocton, OH and Uncasville, CT medium mills, the Newberg, OR containerboard and newsprint mill, the Vapi, India linerboard mill, restructuring activities at a corrugated container facility, restructuring activities at a recycling facility and on-going closure costs at previously closed facilities. The Corrugated Packaging segment related charges in fiscal 2015 are primarily associated with the closure of one recycled collection facility and on-going closure costs at other previously closed facilities. The Corrugated Packaging segment related charges in fiscal 2014 are primarily associated with the closure of one corrugated container plant, one collection facility and on-going closure costs and fair value adjustments for assets at previously closed facilities which were partially offset by gains on sale of previously closed facilities. The cumulative charges are primarily associated with the closure of the Coshocton,
|
(c)
|
The Consumer Packaging segment related charges in fiscal 2016 primarily reflect the charges associated with a folding carton and a merchandising displays facility, on-going closure costs at previously closed facilities that were partially offset by the gain on sale of the Cincinnati, OH specialty recycled paperboard mill. The Consumer Packaging segment related charges in fiscal 2015 are primarily associated with the closure of one folding carton facility, one merchandising displays facility, and on-going closure costs at other previously closed facilities. The Consumer Packaging segment related charges in fiscal 2014 are primarily associated with our Cincinnati, OH specialty recycled paperboard mill and on-going closure costs for previously closed converting facilities. The cumulative charges primarily reflect our Cincinnati, OH specialty recycled paperboard mill, and cumulative closures of folding carton and merchandising display facilities. We have transferred a substantial portion of each closed facility's production to our other facilities.
|
(d)
|
The Land and Development segment related charges in fiscal 2016 and cumulative charges reflect severance and other employee costs related to personnel reductions in the segment.
|
(e)
|
The expenses in the “Other” segment primarily reflect costs that we consider as related to Corporate that primarily consist of costs incurred as a result of the Combination, the Smurfit-Stone Acquisition, and other acquisition and divestiture expenses, excluding the Specialty Chemicals costs which are included in discontinued operations. The charges in the Net Property, Plant and Equipment column are for the write-off of leasehold improvements associated with the integration of the Combination. The pre-tax charges in the “Other” segment are summarized below (in millions):
|
|
Acquisition
Expense
|
|
Integration
Expenses
|
|
Other Expense
(Income)
|
|
Total
|
||||||||
Fiscal 2016
|
$
|
8.9
|
|
|
$
|
104.7
|
|
|
$
|
2.0
|
|
|
$
|
115.6
|
|
Fiscal 2015
|
44.4
|
|
|
84.3
|
|
|
(0.3
|
)
|
|
128.4
|
|
||||
Fiscal 2014
|
7.5
|
|
|
23.0
|
|
|
—
|
|
|
30.5
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Accrual at beginning of fiscal year
|
$
|
21.4
|
|
|
$
|
10.9
|
|
|
$
|
21.8
|
|
Accruals acquired in merger
|
—
|
|
|
2.9
|
|
|
—
|
|
|||
Additional accruals
|
75.3
|
|
|
37.6
|
|
|
5.0
|
|
|||
Payments
|
(51.9
|
)
|
|
(31.4
|
)
|
|
(14.1
|
)
|
|||
Adjustment to accruals
|
—
|
|
|
1.4
|
|
|
(1.8
|
)
|
|||
Accrual at end of fiscal year
|
$
|
44.8
|
|
|
$
|
21.4
|
|
|
$
|
10.9
|
|
Note 9.
|
Other Intangible Assets
|
|
|
|
September 30,
|
||||||||||||||
|
|
|
2016
|
|
2015
|
||||||||||||
|
Weighted
Avg. Life
(in years)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Customer relationships
|
18.1
|
|
$
|
3,094.4
|
|
|
$
|
(610.5
|
)
|
|
$
|
3,075.1
|
|
|
$
|
(414.1
|
)
|
Favorable contracts
|
9.1
|
|
48.9
|
|
|
(27.0
|
)
|
|
48.6
|
|
|
(22.1
|
)
|
||||
Technology and patents
|
10.0
|
|
55.4
|
|
|
(14.9
|
)
|
|
55.5
|
|
|
(9.3
|
)
|
||||
Trademarks and tradenames
|
17.8
|
|
65.0
|
|
|
(24.1
|
)
|
|
65.0
|
|
|
(16.1
|
)
|
||||
Non-compete agreements
|
1.0
|
|
0.2
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
||||
License costs
|
8.2
|
|
23.5
|
|
|
(11.5
|
)
|
|
19.9
|
|
|
(7.6
|
)
|
||||
Total
|
17.9
|
|
$
|
3,287.4
|
|
|
$
|
(688.1
|
)
|
|
$
|
3,264.1
|
|
|
$
|
(469.2
|
)
|
Fiscal 2017
|
$
|
213.4
|
|
Fiscal 2018
|
212.0
|
|
|
Fiscal 2019
|
210.5
|
|
|
Fiscal 2020
|
210.4
|
|
|
Fiscal 2021
|
162.8
|
|
Note 10.
|
Debt
|
|
September 30, 2016
|
|
September 30, 2015
|
||||||||||
|
Carrying Value
|
|
Weighted Avg Interest Rate
|
|
Carrying Value
|
|
Weighted Avg Interest Rate
|
||||||
U.S. Dollar Denominated Fixed Rate Debt:
|
|
|
|
|
|
|
|
||||||
Notes due fiscal 2017 to 2022
|
$
|
1,651.0
|
|
|
3.9
|
%
|
|
$
|
1,672.2
|
|
|
3.8
|
%
|
Notes due fiscal 2023 to 2027
|
411.8
|
|
|
4.3
|
%
|
|
436.8
|
|
|
4.4
|
%
|
||
Notes due fiscal 2030 to 2033
|
987.5
|
|
|
4.7
|
%
|
|
1,002.8
|
|
|
4.6
|
%
|
||
Notes due fiscal 2037 to 2047
|
179.2
|
|
|
6.0
|
%
|
|
180.1
|
|
|
5.9
|
%
|
||
|
|
|
|
|
|
|
|
||||||
U.S. Dollar Denominated Floating Rate Debt:
|
|
|
|
|
|
|
|
||||||
Term loan facilities
|
2,195.7
|
|
|
1.8
|
%
|
|
1,794.7
|
|
|
1.4
|
%
|
||
Revolving credit and swing facilities
|
—
|
|
|
N/A
|
|
|
64.1
|
|
|
2.6
|
%
|
||
Receivables-backed financing facility
|
—
|
|
|
N/A
|
|
|
198.0
|
|
|
0.9
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Capital lease obligations
|
184.4
|
|
|
4.2
|
%
|
|
165.8
|
|
|
5.7
|
%
|
||
|
|
|
|
|
|
|
|
||||||
Supplier financing and commercial card programs
|
106.0
|
|
|
N/A
|
|
|
3.2
|
|
|
N/A
|
|
||
|
|
|
|
|
|
|
|
||||||
International and other debt
|
73.6
|
|
|
7.3
|
%
|
|
104.2
|
|
|
7.4
|
%
|
||
Total debt
|
5,789.2
|
|
|
3.3
|
%
|
|
5,621.9
|
|
|
3.3
|
%
|
||
Less current portion of debt
|
292.9
|
|
|
|
|
63.7
|
|
|
|
||||
Long-term debt due after one year
|
$
|
5,496.3
|
|
|
|
|
$
|
5,558.2
|
|
|
|
Fiscal 2017
|
$
|
283.8
|
|
Fiscal 2018
|
84.1
|
|
|
Fiscal 2019
|
766.9
|
|
|
Fiscal 2020
|
1,851.8
|
|
|
Fiscal 2021
|
—
|
|
|
Thereafter
|
2,339.2
|
|
|
Fair value of debt step-up, deferred financing costs and unamortized bond discounts
|
279.0
|
|
|
Total
|
$
|
5,604.8
|
|
Fiscal 2017
|
$
|
6.6
|
|
Fiscal 2018
|
5.3
|
|
|
Fiscal 2019
|
3.8
|
|
|
Fiscal 2020
|
3.2
|
|
|
Fiscal 2021
|
2.1
|
|
|
Thereafter
|
140.8
|
|
|
Fair value step-up
|
22.6
|
|
|
Total
|
$
|
184.4
|
|
Note 11.
|
Fair Value
|
|
2016
|
|
2015
|
||||
Receivable from financial institution at beginning of fiscal year
|
$
|
5.8
|
|
|
$
|
10.4
|
|
Receivables sold to the financial institution and derecognized
|
1,474.6
|
|
|
1,222.0
|
|
||
Receivables collected by financial institution
|
(1,367.2
|
)
|
|
(1,130.4
|
)
|
||
Cash proceeds from financial institution
|
(99.4
|
)
|
|
(96.2
|
)
|
||
Receivable from financial institution at September 30,
|
$
|
13.8
|
|
|
$
|
5.8
|
|
Note 12.
|
Operating Leases
|
Fiscal 2017
|
$
|
104.8
|
|
Fiscal 2018
|
89.2
|
|
|
Fiscal 2019
|
72.1
|
|
|
Fiscal 2020
|
58.9
|
|
|
Fiscal 2021
|
44.0
|
|
|
Thereafter
|
120.2
|
|
|
Total future minimum lease payments
|
$
|
489.2
|
|
Note 13.
|
Income Taxes
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
(25.1
|
)
|
|
$
|
571.3
|
|
|
$
|
665.2
|
|
Foreign
|
269.7
|
|
|
162.9
|
|
|
105.1
|
|
|||
Income from continuing operations before income taxes
|
$
|
244.6
|
|
|
$
|
734.2
|
|
|
$
|
770.3
|
|
|
Year Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
98.3
|
|
|
$
|
31.6
|
|
|
$
|
19.9
|
|
State
|
12.8
|
|
|
7.3
|
|
|
15.2
|
|
|||
Foreign
|
87.0
|
|
|
38.6
|
|
|
(0.7
|
)
|
|||
Total current expense
|
198.1
|
|
|
77.5
|
|
|
34.4
|
|
|||
Deferred income taxes:
|
|
|
|
|
|
||||||
Federal
|
(131.5
|
)
|
|
157.8
|
|
|
201.8
|
|
|||
State
|
6.9
|
|
|
(10.8
|
)
|
|
19.9
|
|
|||
Foreign
|
16.3
|
|
|
8.5
|
|
|
30.4
|
|
|||
Total deferred (benefit) expense
|
(108.3
|
)
|
|
155.5
|
|
|
252.1
|
|
|||
Income tax expense
|
$
|
89.8
|
|
|
$
|
233.0
|
|
|
$
|
286.5
|
|
|
Year Ended September 30,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Statutory federal tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Foreign rate differential
|
(5.5
|
)
|
|
(1.6
|
)
|
|
(1.3
|
)
|
Adjustment and resolution of federal, state and foreign tax uncertainties
|
0.2
|
|
|
0.3
|
|
|
0.4
|
|
State taxes, net of federal benefit
|
4.9
|
|
|
1.2
|
|
|
2.0
|
|
Research and development and other tax credits, net of valuation allowances and reserves
|
(6.1
|
)
|
|
(0.1
|
)
|
|
0.1
|
|
Income attributable to noncontrolling interest
|
0.8
|
|
|
(0.4
|
)
|
|
(0.1
|
)
|
Domestic manufacturer’s deduction
|
(4.4
|
)
|
|
(2.6
|
)
|
|
(0.4
|
)
|
State of New York tax law change, net of valuation allowance
|
—
|
|
|
—
|
|
|
1.2
|
|
Change in valuation allowance
|
6.3
|
|
|
(0.8
|
)
|
|
0.7
|
|
Nondeductible transaction costs
|
0.4
|
|
|
1.0
|
|
|
—
|
|
Deconsolidation of Grupo Gondi joint venture
|
3.4
|
|
|
—
|
|
|
—
|
|
Nontaxable increased cash surrender value
|
(4.6
|
)
|
|
(0.1
|
)
|
|
(0.1
|
)
|
Withholding taxes
|
2.0
|
|
|
—
|
|
|
—
|
|
Brazilian net worth deduction
|
(2.0
|
)
|
|
(0.1
|
)
|
|
—
|
|
Other, net
|
6.3
|
|
|
(0.1
|
)
|
|
(0.3
|
)
|
Effective tax (benefit) rate
|
36.7
|
%
|
|
31.7
|
%
|
|
37.2
|
%
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Deferred income tax assets:
|
|
|
|
||||
Accruals and allowances
|
$
|
12.2
|
|
|
$
|
33.9
|
|
Employee related accruals and allowances
|
217.6
|
|
|
224.9
|
|
||
Pension obligations
|
15.5
|
|
|
—
|
|
||
State net operating loss carryforwards
|
82.3
|
|
|
92.7
|
|
||
State credit carryforwards, net of federal benefit
|
56.1
|
|
|
56.3
|
|
||
Federal tax credit carryforwards
|
185.1
|
|
|
213.8
|
|
||
Foreign net operating loss carryforwards
|
119.3
|
|
|
65.5
|
|
||
Restricted stock and options
|
94.9
|
|
|
63.1
|
|
||
Other
|
44.4
|
|
|
21.4
|
|
||
Total
|
827.4
|
|
|
771.6
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
2,124.0
|
|
|
2,215.2
|
|
||
Deductible intangibles and goodwill
|
891.3
|
|
|
1,182.8
|
|
||
Inventory reserves
|
205.6
|
|
|
178.4
|
|
||
Deferred gain
|
432.1
|
|
|
444.1
|
|
||
Pension obligations
|
—
|
|
|
141.4
|
|
||
Basis difference in joint ventures
|
96.0
|
|
|
3.0
|
|
||
Other
|
1.0
|
|
|
1.0
|
|
||
Total
|
3,750.0
|
|
|
4,165.9
|
|
||
Valuation allowances
|
177.2
|
|
|
100.2
|
|
||
Net deferred income tax liability
|
$
|
3,099.8
|
|
|
$
|
3,494.5
|
|
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Current deferred tax asset
|
$
|
—
|
|
|
$
|
13.2
|
|
Current deferred tax liability
|
—
|
|
|
9.8
|
|
||
Long-term deferred tax asset
|
30.9
|
|
|
42.7
|
|
||
Long-term deferred tax liability
|
3,130.7
|
|
|
3,540.6
|
|
||
Net deferred income tax liability
|
$
|
3,099.8
|
|
|
$
|
3,494.5
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of fiscal year
|
$
|
100.2
|
|
|
$
|
65.1
|
|
|
$
|
36.2
|
|
Charges to costs and expenses
|
24.8
|
|
|
2.7
|
|
|
31.7
|
|
|||
Allowances related to purchase accounting
(1)
|
63.0
|
|
|
40.0
|
|
|
—
|
|
|||
Deductions
|
(10.8
|
)
|
|
(7.6
|
)
|
|
(2.8
|
)
|
|||
Balance at end of fiscal year
|
$
|
177.2
|
|
|
$
|
100.2
|
|
|
$
|
65.1
|
|
(1)
|
Adjustments in fiscal 2016 relate to the Combination and the SP Fiber Acquisition. Adjustments in fiscal 2015 relate to the Combination.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Balance at beginning of fiscal year
|
$
|
106.6
|
|
|
$
|
36.5
|
|
|
$
|
21.3
|
|
Additions related to purchase accounting
(1)
|
16.5
|
|
|
82.9
|
|
|
—
|
|
|||
Additions for tax positions taken in current year
|
30.3
|
|
|
2.4
|
|
|
14.8
|
|
|||
Additions (reductions) for tax positions taken in prior fiscal years
|
10.9
|
|
|
(3.7
|
)
|
|
1.0
|
|
|||
Reductions due to settlement
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|||
Additions (reductions) for currency translation adjustments
|
7.0
|
|
|
(11.5
|
)
|
|
—
|
|
|||
Reductions as a result of a lapse of the applicable statute of limitations
|
(3.2
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||
Balance at end of fiscal year
|
$
|
166.8
|
|
|
$
|
106.6
|
|
|
$
|
36.5
|
|
(1)
|
Adjustments in fiscal 2016 relate to the Combination and the SP Fiber Acquisition. Adjustments in fiscal 2015 relate to the Combination.
|
Note 14.
|
Retirement Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Equity investments
|
14
|
%
|
|
10
|
%
|
|
28
|
%
|
|
28
|
%
|
Fixed income investments
|
71
|
%
|
|
78
|
%
|
|
59
|
%
|
|
59
|
%
|
Short-term investments
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
|
1
|
%
|
Other investments
|
14
|
%
|
|
11
|
%
|
|
12
|
%
|
|
12
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Equity investments
|
15
|
%
|
|
9
|
%
|
|
29
|
%
|
|
28
|
%
|
Fixed income investments
|
66
|
%
|
|
77
|
%
|
|
59
|
%
|
|
59
|
%
|
Short-term investments
|
7
|
%
|
|
3
|
%
|
|
2
|
%
|
|
1
|
%
|
Other investments
|
12
|
%
|
|
11
|
%
|
|
10
|
%
|
|
12
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Pension Plans
|
|||||||
|
2016
|
|
2015
|
|||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Discount rate
|
4.04%
|
|
3.08%
|
|
4.70%
|
|
3.89
|
%
|
Rate of compensation increase
|
3.00%
|
|
3.09%
|
|
2.50%
|
|
3.10
|
%
|
|
Pension Plans
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
Change in projected benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of fiscal year
|
$
|
6,122.3
|
|
|
$
|
865.1
|
|
|
$
|
3,606.5
|
|
|
$
|
964.1
|
|
Service cost
|
45.7
|
|
|
5.7
|
|
|
39.4
|
|
|
5.3
|
|
||||
Interest cost
|
277.8
|
|
|
32.5
|
|
|
183.4
|
|
|
34.7
|
|
||||
Amendments
|
1.4
|
|
|
—
|
|
|
26.5
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
664.2
|
|
|
70.8
|
|
|
(100.2
|
)
|
|
(1.7
|
)
|
||||
Plan participant contributions
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.7
|
|
||||
Special termination benefits
|
18.4
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
||||
Benefits paid
|
(399.2
|
)
|
|
(57.5
|
)
|
|
(232.6
|
)
|
|
(59.6
|
)
|
||||
Business combinations
|
9.9
|
|
|
(0.6
|
)
|
|
2,758.0
|
|
|
74.5
|
|
||||
Curtailments
|
(2.7
|
)
|
|
(0.5
|
)
|
|
(31.9
|
)
|
|
—
|
|
||||
Settlements
|
(2,484.6
|
)
|
|
(0.1
|
)
|
|
(135.9
|
)
|
|
—
|
|
||||
Foreign currency rate changes
|
—
|
|
|
8.3
|
|
|
—
|
|
|
(153.9
|
)
|
||||
Separation of Specialty Chemicals business
|
(21.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Benefit obligation at end of fiscal year
|
$
|
4,231.7
|
|
|
$
|
925.2
|
|
|
$
|
6,122.3
|
|
|
$
|
865.1
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of fiscal year
|
$
|
6,481.6
|
|
|
$
|
711.8
|
|
|
$
|
2,676.2
|
|
|
$
|
802.5
|
|
Actual gain on plan assets
|
707.3
|
|
|
82.9
|
|
|
48.6
|
|
|
25.0
|
|
||||
Employer contributions
|
16.1
|
|
|
31.4
|
|
|
110.6
|
|
|
32.1
|
|
||||
Plan participant contributions
|
—
|
|
|
1.5
|
|
|
—
|
|
|
1.7
|
|
||||
Benefits paid
|
(399.2
|
)
|
|
(57.5
|
)
|
|
(232.6
|
)
|
|
(59.6
|
)
|
||||
Business combinations
|
—
|
|
|
—
|
|
|
4,014.7
|
|
|
41.5
|
|
||||
Settlements
|
(2,484.6
|
)
|
|
(0.1
|
)
|
|
(135.9
|
)
|
|
—
|
|
||||
Separation of Specialty Chemicals business
|
(19.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency rate changes
|
—
|
|
|
4.1
|
|
|
—
|
|
|
(131.4
|
)
|
||||
Fair value of plan assets at end of fiscal year
|
$
|
4,301.5
|
|
|
$
|
774.1
|
|
|
$
|
6,481.6
|
|
|
$
|
711.8
|
|
Funded status
|
$
|
69.8
|
|
|
$
|
(151.1
|
)
|
|
$
|
359.3
|
|
|
$
|
(153.3
|
)
|
Amounts recognized in consolidated balance sheet:
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
247.3
|
|
|
$
|
10.5
|
|
|
$
|
524.2
|
|
|
$
|
8.7
|
|
Other current liability
|
(9.9
|
)
|
|
(1.1
|
)
|
|
(9.8
|
)
|
|
(1.0
|
)
|
||||
Accrued pension and other long-term benefits
|
(167.6
|
)
|
|
(160.5
|
)
|
|
(155.1
|
)
|
|
(161.0
|
)
|
||||
Over (under) funded status at end of fiscal year
|
$
|
69.8
|
|
|
$
|
(151.1
|
)
|
|
$
|
359.3
|
|
|
$
|
(153.3
|
)
|
|
Pension Plans
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
Net actuarial loss
|
$
|
633.4
|
|
|
$
|
195.8
|
|
|
$
|
686.5
|
|
|
$
|
170.8
|
|
Prior service cost
|
28.2
|
|
|
0.4
|
|
|
30.5
|
|
|
0.5
|
|
||||
Total accumulated other comprehensive loss
|
$
|
661.6
|
|
|
$
|
196.2
|
|
|
$
|
717.0
|
|
|
$
|
171.3
|
|
|
Pension Plans
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net actuarial loss arising during period
|
$
|
355.4
|
|
|
$
|
85.9
|
|
|
$
|
335.2
|
|
Amortization and settlement recognition of net actuarial loss
|
(381.6
|
)
|
|
(49.2
|
)
|
|
(65.7
|
)
|
|||
Prior service cost arising during period
|
1.5
|
|
|
26.4
|
|
|
0.9
|
|
|||
Amortization of prior service cost
|
(3.9
|
)
|
|
(3.0
|
)
|
|
(1.2
|
)
|
|||
Net other comprehensive (income) loss recognized
|
$
|
(28.6
|
)
|
|
$
|
60.1
|
|
|
$
|
269.2
|
|
|
Pension Plans
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost
|
$
|
51.4
|
|
|
$
|
44.7
|
|
|
$
|
26.5
|
|
Interest cost
|
310.3
|
|
|
218.1
|
|
|
216.5
|
|
|||
Expected return on plan assets
|
(412.3
|
)
|
|
(292.9
|
)
|
|
(252.9
|
)
|
|||
Amortization of net actuarial loss
|
11.0
|
|
|
29.0
|
|
|
17.8
|
|
|||
Amortization of prior service cost
|
3.9
|
|
|
3.0
|
|
|
1.2
|
|
|||
Curtailment gain
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|||
Settlement loss
|
370.7
|
|
|
20.2
|
|
|
47.9
|
|
|||
Special termination benefits
|
18.4
|
|
|
9.1
|
|
|
—
|
|
|||
Company defined benefit plan expense
|
351.8
|
|
|
31.2
|
|
|
57.0
|
|
|||
Multiemployer and other plans
|
5.8
|
|
|
5.6
|
|
|
6.2
|
|
|||
Net pension cost
|
$
|
357.6
|
|
|
$
|
36.8
|
|
|
$
|
63.2
|
|
|
Pension Plans
|
|||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|||||
Discount rate
|
4.70%
|
|
3.89
|
%
|
|
4.52
|
%
|
|
4.00
|
%
|
|
5.18
|
%
|
|
4.56
|
%
|
Rate of compensation increase
|
2.50%
|
|
3.10
|
%
|
|
2.54
|
%
|
|
3.00
|
%
|
|
2.15
|
%
|
|
3.12
|
%
|
Expected long-term rate of return on plan assets
|
5.88%
|
|
6.34
|
%
|
|
7.11
|
%
|
|
6.88
|
%
|
|
7.50
|
%
|
|
6.88
|
%
|
|
Pension Plans
|
||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
Actuarial loss
|
$
|
18.3
|
|
|
$
|
9.1
|
|
Prior service cost
|
4.0
|
|
|
0.1
|
|
||
Total
|
$
|
22.3
|
|
|
$
|
9.2
|
|
|
Pension Plans
|
||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
Fiscal 2017
|
$
|
195.8
|
|
|
$
|
56.7
|
|
Fiscal 2018
|
202.0
|
|
|
56.4
|
|
||
Fiscal 2019
|
209.3
|
|
|
56.4
|
|
||
Fiscal 2020
|
222.0
|
|
|
55.0
|
|
||
Fiscal 2021
|
211.3
|
|
|
54.4
|
|
||
Fiscal Years 2022 – 2026
|
1,171.0
|
|
|
263.7
|
|
|
September 30,
2016 |
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. equities(a)
|
$
|
193.9
|
|
|
$
|
192.7
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
Non-U.S. equities(a)
|
585.7
|
|
|
73.5
|
|
|
512.2
|
|
|
—
|
|
||||
Hedged equities
(a)
|
90.2
|
|
|
—
|
|
|
90.2
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government securities(b)
|
1,271.1
|
|
|
—
|
|
|
1,271.1
|
|
|
—
|
|
||||
Non-U.S. government securities(c)
|
116.0
|
|
|
5.3
|
|
|
110.7
|
|
|
—
|
|
||||
U.S. corporate bonds(c)
|
1,226.9
|
|
|
9.0
|
|
|
1,217.9
|
|
|
—
|
|
||||
Non-U.S. corporate bonds(c)
|
366.3
|
|
|
6.4
|
|
|
359.9
|
|
|
—
|
|
||||
Mortgage-backed securities(c)
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
||||
Other fixed income(d)
|
317.9
|
|
|
—
|
|
|
317.9
|
|
|
—
|
|
||||
Short-term investments(e)
|
302.1
|
|
|
302.1
|
|
|
—
|
|
|
—
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
||||||||
Alternative investments(f)
|
544.0
|
|
|
—
|
|
|
215.2
|
|
|
328.8
|
|
||||
Global multi-asset investments
(g)
|
59.1
|
|
|
—
|
|
|
59.1
|
|
|
—
|
|
||||
|
$
|
5,075.6
|
|
|
$
|
589.0
|
|
|
$
|
4,157.8
|
|
|
$
|
328.8
|
|
|
September 30, 2015
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
U.S. equities
(a)
|
$
|
169.1
|
|
|
$
|
168.2
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
Non-U.S. equities
(a)
|
532.2
|
|
|
79.3
|
|
|
452.9
|
|
|
—
|
|
||||
Hedged equities
(a)
|
82.6
|
|
|
—
|
|
|
82.6
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
(b)
|
1,791.4
|
|
|
—
|
|
|
1,791.4
|
|
|
—
|
|
||||
Non-U.S. government securities
(c)
|
176.1
|
|
|
4.5
|
|
|
171.6
|
|
|
—
|
|
||||
U.S. corporate bonds
(c)
|
2,435.2
|
|
|
8.1
|
|
|
2,427.0
|
|
|
0.1
|
|
||||
Non-U.S. corporate bonds
(c)
|
616.4
|
|
|
8.6
|
|
|
607.8
|
|
|
—
|
|
||||
Mortgage-backed securities
(c)
|
90.0
|
|
|
—
|
|
|
90.0
|
|
|
—
|
|
||||
Other fixed income
(d)
|
308.3
|
|
|
—
|
|
|
308.3
|
|
|
—
|
|
||||
Short-term investments
(e)
|
213.2
|
|
|
213.2
|
|
|
—
|
|
|
—
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
||||||||
Alternative investments
(f)
|
720.2
|
|
|
—
|
|
|
327.9
|
|
|
392.3
|
|
||||
Global multi-asset investments
(g)
|
58.7
|
|
|
—
|
|
|
58.7
|
|
|
—
|
|
||||
|
$
|
7,193.4
|
|
|
$
|
481.9
|
|
|
$
|
6,319.1
|
|
|
$
|
392.4
|
|
(a)
|
Equity securities are comprised of the following investment types: (i) common stock; (ii) preferred stock; (iii) equity exchange traded funds; (iv) hedged equity investments and (v) commingled equity funds. Level 1 investments in common and preferred stocks and exchange traded funds are valued using quoted market prices multiplied by the number of shares owned. The Level 2 hedged equity investment is a commingled fund that consists primarily of equity indexed investments which are hedged by options and also holds collateral in the form of short term treasury securities. The commingled fund investments are valued at the net asset value per share multiplied by the number of shares held. The determination of net asset value for the commingled funds includes market pricing of the underlying assets as well as broker quotes and other valuation techniques.
|
(b)
|
U.S. government securities include treasury and agency debt. These investments are valued using broker quotes in an active market.
|
(c)
|
The level 1 non-U.S. government securities investment is an exchange traded fund valued using quoted market prices. The level 1 U.S. corporate bonds category is primarily comprised of U.S. dollar denominated investment grade securities and valued using quoted market prices. Level 2 investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data. Level 2 commingled debt funds are valued at their net asset value per share multiplied by the number of shares held. The determination of net asset value for the commingled funds includes market pricing of the underlying assets as well as broker quotes and other valuation techniques.
|
(d)
|
Other fixed income is comprised of municipal and asset-backed securities. Investments are valued utilizing a market approach that includes various valuation techniques and sources, such as broker quotes in active and non-active markets, benchmark yields and securities, reported trades, issuer spreads and/or other applicable reference data.
|
(e)
|
Short-term investments are valued at $1.00/unit, which approximates fair value. Amounts are generally invested in interest-bearing accounts.
|
(f)
|
We maintain holdings in certain private equity partnerships and real estate investments that are considered to be level 3 in the fair value hierarchy. The private equity partnerships are commingled investments. Valuation techniques such as discounted cash flow and market based comparable analyses are used to determine fair value of the private equity investments. Unobservable inputs used for the discounted cash flow technique include projected future cash flows and the discount rate applied to present value those cash flows. Unobservable inputs used for the market based comparisons technique include
|
(g)
|
The global multi-asset investment is a commingled fund with underlying investments that are diversified across multiple asset classes and include global equity, fixed income securities, commodities and derivative contracts. The commingled fund is valued at its net asset value per share multiplied by the number of shares held. The determination of net asset value for the commingled fund includes market pricing of the underlying assets as well as broker quotes and other valuation techniques.
|
|
|
U.S. Corporate Bonds
|
|
Alternative
Investments
|
|
Total
|
||||||
Balance as of September 30, 2014
|
|
$
|
—
|
|
|
$
|
40.6
|
|
|
$
|
40.6
|
|
Purchases, sales, issuances, and settlements, net
|
|
0.1
|
|
|
341.8
|
|
|
341.9
|
|
|||
Actual return on plan assets:
|
|
|
|
|
|
|
||||||
Relating to instruments still held at end of year
|
|
—
|
|
|
(3.6
|
)
|
|
(3.6
|
)
|
|||
Relating to instruments sold during the year
|
|
—
|
|
|
13.5
|
|
|
13.5
|
|
|||
Balance as of September 30, 2015
|
|
$
|
0.1
|
|
|
$
|
392.3
|
|
|
$
|
392.4
|
|
Purchases, sales, issuances, and settlements, net
|
|
(0.1
|
)
|
|
(45.2
|
)
|
|
(45.3
|
)
|
|||
Actual return on plan assets:
|
|
|
|
|
|
|
||||||
Relating to instruments still held at end of year
|
|
—
|
|
|
(16.5
|
)
|
|
(16.5
|
)
|
|||
Relating to instruments sold during the year
|
|
—
|
|
|
24.7
|
|
|
24.7
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
(26.5
|
)
|
|
(26.5
|
)
|
|||
Balance as of September 30, 2016
|
|
$
|
—
|
|
|
$
|
328.8
|
|
|
$
|
328.8
|
|
|
Postretirement plans
|
||||||||
|
2016
|
|
2015
|
||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||
Discount rate
|
4.04%
|
|
6.64
|
%
|
|
4.70%
|
|
6.84
|
%
|
Rate of compensation increase
|
N/A
|
|
3.14
|
%
|
|
N/A
|
|
3.10
|
%
|
|
Postretirement Plans
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
Change in projected benefit obligation
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
|
U.S. Plans
|
|
|
Non-U.S. Plans
|
|
||||
Benefit obligation at beginning of fiscal year
|
$
|
109.5
|
|
|
$
|
51.6
|
|
|
$
|
66.0
|
|
|
$
|
47.1
|
|
Service cost
|
1.7
|
|
|
0.6
|
|
|
0.7
|
|
|
0.3
|
|
||||
Interest cost
|
4.5
|
|
|
3.6
|
|
|
3.3
|
|
|
2.1
|
|
||||
Amendments
|
(4.0
|
)
|
|
—
|
|
|
(1.1
|
)
|
|
(0.2
|
)
|
||||
Actuarial (gain) loss
|
(6.3
|
)
|
|
5.0
|
|
|
(3.9
|
)
|
|
(0.5
|
)
|
||||
Plan participant contributions
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
||||
Benefits paid
|
(14.1
|
)
|
|
(2.5
|
)
|
|
(12.0
|
)
|
|
(2.2
|
)
|
||||
Business combinations
|
—
|
|
|
—
|
|
|
54.2
|
|
|
16.0
|
|
||||
Separation of Specialty Chemicals business
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency rate changes
|
—
|
|
|
4.3
|
|
|
—
|
|
|
(11.0
|
)
|
||||
Benefit obligation at end of fiscal year
|
$
|
90.7
|
|
|
$
|
62.6
|
|
|
$
|
109.5
|
|
|
$
|
51.6
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of fiscal year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employer contributions
|
14.1
|
|
|
2.5
|
|
|
9.7
|
|
|
2.2
|
|
||||
Plan participant contributions
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
||||
Benefits paid
|
(14.1
|
)
|
|
(2.5
|
)
|
|
(12.0
|
)
|
|
(2.2
|
)
|
||||
Fair value of plan assets at end of fiscal year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded Status
|
$
|
90.7
|
|
|
$
|
62.6
|
|
|
$
|
109.5
|
|
|
$
|
51.6
|
|
Amounts recognized in the consolidated balance sheet:
|
|
|
|
|
|
|
|
||||||||
Other current liability
|
$
|
(10.4
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
(15.4
|
)
|
|
$
|
(2.8
|
)
|
Accrued postretirement and other long-term benefits
|
(80.3
|
)
|
|
(59.7
|
)
|
|
(94.1
|
)
|
|
(48.8
|
)
|
||||
Under funded status at end of fiscal year
|
$
|
(90.7
|
)
|
|
$
|
(62.6
|
)
|
|
$
|
(109.5
|
)
|
|
$
|
(51.6
|
)
|
|
|
Postretirement Plans
|
||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
Net actuarial (gain) loss
|
|
$
|
(24.9
|
)
|
|
$
|
4.1
|
|
|
$
|
(20.5
|
)
|
|
$
|
(0.8
|
)
|
Prior service credit
|
|
(14.9
|
)
|
|
(0.4
|
)
|
|
(13.2
|
)
|
|
(0.5
|
)
|
||||
Total accumulated other comprehensive (income) loss
|
|
$
|
(39.8
|
)
|
|
$
|
3.7
|
|
|
$
|
(33.7
|
)
|
|
$
|
(1.3
|
)
|
|
|
Postretirement Plans
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net actuarial gain arising during period
|
|
$
|
(1.4
|
)
|
|
$
|
(4.4
|
)
|
|
$
|
(1.9
|
)
|
Amortization and settlement recognition of net actuarial gain
|
|
1.9
|
|
|
1.1
|
|
|
1.8
|
|
|||
Prior service credit arising during period
|
|
(3.8
|
)
|
|
(1.4
|
)
|
|
(13.3
|
)
|
|||
Amortization or curtailment recognition of prior service credit
|
|
2.1
|
|
|
10.5
|
|
|
1.4
|
|
|||
Net other comprehensive (income) loss recognized
|
|
$
|
(1.2
|
)
|
|
$
|
5.8
|
|
|
$
|
(12.0
|
)
|
|
|
Postretirement Plans
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost
|
|
$
|
2.3
|
|
|
$
|
1.0
|
|
|
$
|
1.2
|
|
Interest cost
|
|
8.1
|
|
|
5.4
|
|
|
5.7
|
|
|||
Amortization of net actuarial gain
|
|
(2.0
|
)
|
|
(1.1
|
)
|
|
(1.8
|
)
|
|||
Amortization of prior service credit
|
|
(2.1
|
)
|
|
(2.0
|
)
|
|
(1.4
|
)
|
|||
Curtailment gain
|
|
—
|
|
|
(8.5
|
)
|
|
—
|
|
|||
Net postretirement cost
|
|
$
|
6.3
|
|
|
$
|
(5.2
|
)
|
|
$
|
3.7
|
|
|
|
2016
|
|
U.S. Plans
|
|
|
|
Health care cost trend rate assumed for next year
|
|
7.02
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
|
4.50
|
%
|
Year the rate reaches the ultimate trend rate
|
|
2036
|
|
Non-U.S. Plans
|
|
|
|
Health care cost trend rate assumed for next year
|
|
7.71
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
|
6.44
|
%
|
Year the rate reaches the ultimate trend rate
|
|
2029
|
|
|
|
Postretirement Plans
|
||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
Discount rate
|
|
4.70%
|
|
6.84
|
%
|
|
4.52%
|
|
4.00
|
%
|
|
5.19
|
%
|
|
4.56
|
%
|
Rate of compensation increase
|
|
N/A
|
|
3.10
|
%
|
|
N/A
|
|
3.00
|
%
|
|
N/A
|
|
|
3.00
|
%
|
|
Postretirement Plans
|
||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
Actuarial (gain) loss
|
$
|
(1.6
|
)
|
|
$
|
0.4
|
|
Prior service credit
|
(2.5
|
)
|
|
(0.1
|
)
|
||
Total
|
$
|
(4.1
|
)
|
|
$
|
0.3
|
|
|
Postretirement Plans
|
||||||
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
Fiscal 2017
|
$
|
10.3
|
|
|
$
|
2.9
|
|
Fiscal 2018
|
9.1
|
|
|
3.0
|
|
||
Fiscal 2019
|
8.7
|
|
|
3.1
|
|
||
Fiscal 2020
|
8.2
|
|
|
3.2
|
|
||
Fiscal 2021
|
7.8
|
|
|
3.3
|
|
||
Fiscal Years 2022 – 2026
|
32.2
|
|
|
18.0
|
|
Pension Fund
|
EIN / Pension Plan Number
|
|
Pension Protection Act Zone Status
|
|
FIP / RP Status Pending / Implemented
|
|
Contributions
(a)
|
|
Surcharge imposed?
|
|
Expiration CBA
|
||||||||||||
|
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
|
|
||||||
U.S. Multiemployer plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pace Industry Union-Management Pension Fund
(b)
|
11-6166763 / 001
|
|
Red
|
|
Red
|
|
Implemented
|
|
$
|
3.3
|
|
|
$
|
3.3
|
|
|
$
|
3.5
|
|
|
Yes
|
|
3/22/16 to 5/11/2022
|
Other Funds
|
|
|
|
|
|
|
|
|
1.2
|
|
|
1.7
|
|
|
2.0
|
|
|
|
|
|
|||
Total Contributions:
|
|
|
|
|
|
|
|
|
$
|
4.5
|
|
|
$
|
5.0
|
|
|
$
|
5.5
|
|
|
|
|
|
(a)
|
Contributions represent the amounts contributed to the plan during the fiscal year.
|
(b)
|
Our contributions for fiscal 2015 and 2014 exceeded 5% of total plan contributions. Although the plan data for fiscal 2016 is not yet available, we would expect to continue to exceed 5% of total plan contributions.
|
Note 15.
|
Stockholders’ Equity
|
Note 16.
|
Share-Based Compensation
|
|
2016
|
|
2015
|
|
2014
|
|||
Expected term in years
|
7.0
|
|
|
3.9
|
|
|
6.9
|
|
Expected volatility
|
38.3
|
%
|
|
21.9
|
%
|
|
43.9
|
%
|
Risk-free interest rate
|
1.6
|
%
|
|
2.4
|
%
|
|
2.1
|
%
|
Dividend yield
|
4.5
|
%
|
|
1.3
|
%
|
|
1.4
|
%
|
|
Stock
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|||||
Outstanding at September 30, 2015
|
7,189,654
|
|
|
$
|
33.19
|
|
|
|
|
|
||
Granted
|
1,251,560
|
|
|
33.39
|
|
|
|
|
|
|||
Exercised
|
(1,225,230
|
)
|
|
30.75
|
|
|
|
|
|
|||
Expired
|
(49,049
|
)
|
|
35.68
|
|
|
|
|
|
|||
Forfeited
|
(31,984
|
)
|
|
37.60
|
|
|
|
|
|
|||
Adjustment due to the Separation
|
930,865
|
|
|
|
|
|
|
|
||||
Outstanding at September 30, 2016
|
8,065,816
|
|
|
$
|
29.73
|
|
|
5.1
|
|
$
|
156.6
|
|
Exercisable at September 30, 2016
|
6,389,188
|
|
|
$
|
28.46
|
|
|
4.1
|
|
$
|
130.9
|
|
Vested and expected to vest at September 30, 2016
|
8,027,460
|
|
|
$
|
29.71
|
|
|
5.1
|
|
$
|
156.0
|
|
|
SARs
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|||||
Outstanding at September 30, 2015
|
86,419
|
|
|
$
|
28.98
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(13,889
|
)
|
|
30.74
|
|
|
|
|
|
|||
Expired
|
(14,742
|
)
|
|
24.29
|
|
|
|
|
|
|||
Adjustment due to the Separation
|
8,183
|
|
|
|
|
|
|
|
||||
Outstanding at September 30, 2016
|
65,971
|
|
|
$
|
26.07
|
|
|
4.0
|
|
$
|
1.5
|
|
Exercisable at September 30, 2016
|
65,971
|
|
|
$
|
26.07
|
|
|
4.0
|
|
$
|
1.5
|
|
|
Shares/Units
|
|
Weighted
Average
Grant Date Fair
Value
|
|||
Unvested at September 30, 2015
|
2,327,231
|
|
|
$
|
56.13
|
|
Granted
|
1,750,546
|
|
|
35.80
|
|
|
Vested
|
(1,589,761
|
)
|
|
49.54
|
|
|
Forfeited
|
(85,222
|
)
|
|
50.02
|
|
|
Adjustment due to the Separation
|
302,110
|
|
|
|
||
Unvested at September 30, 2016
(1)
|
2,704,904
|
|
|
$
|
40.89
|
|
(1)
|
Target awards with a performance condition, net of subsequent forfeitures, granted may be increased up to
200%
of the target or decreased to
zero
, subject to the level of performance attained. The awards are reflected in the table at the target award amount of
100%
. Based on current facts and assumptions we are forecasting the performance of the grants to be attained at levels that would result in the issuance of approximately
1.9 million
additional shares. However, it is possible that the performance attained may vary.
|
|
2016
|
|
2015
|
|
2014
|
||||||
Shares of restricted stock vested
|
1,589,761
|
|
|
1,725,435
|
|
|
530,668
|
|
|||
Aggregate fair value of restricted stock vested
|
$
|
57.5
|
|
|
$
|
110.4
|
|
|
$
|
28.8
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Shares of restricted stock granted to non-employee directors
(1)
|
64,155
|
|
|
15,255
|
|
|
21,500
|
|
Shares of restricted stock granted to employees:
|
|
|
|
|
|
|||
Shares granted for attainment of a performance condition at an amount in excess of target
(2)
|
447,261
|
|
|
801,810
|
|
|
51,218
|
|
Shares granted with a service condition and a Cash Flow Per Share performance condition at target
(3)
|
1,211,760
|
|
|
429,845
|
|
|
482,710
|
|
Shares granted with a service condition
(4)
|
27,370
|
|
|
86,265
|
|
|
12,560
|
|
Shares granted with a service condition and a performance condition prorated upon the Combination
(5)
|
—
|
|
|
64,323
|
|
|
—
|
|
Share of restricted stock assumed upon the Combination:
|
|
|
|
|
|
|||
Shares granted with a service condition and a performance condition
(6) (7)
|
—
|
|
|
650,685
|
|
|
—
|
|
Shares granted with a service condition
(7)
|
—
|
|
|
327,005
|
|
|
—
|
|
Total restricted stock granted
|
1,750,546
|
|
|
2,375,188
|
|
|
567,988
|
|
(1)
|
Non-employee director grants generally vest over a period of up to
one
year and are deemed issued on the grant date and have voting and dividend rights.
|
(2)
|
Shares granted in the table above include shares subsequently issued for the level of performance attained in excess of target. Shares issued in fiscal 2016 for the fiscal 2013 Cash Flow to Equity Ratio were at
200%
of target. Shares issued in fiscal 2015 for the fiscal 2012 Cash Flow to Equity Ratio were at
200%
of target. Shares issued in fiscal 2016 and 2015 also include shares accelerated for terminated employees as a result of the Combination which were achieved at between
146.5%
and
200%
of target. Shares issued in fiscal 2014 for the fiscal 2011 Cash Flow to Equity Ratio were at between
110.56%
and
115.29%
of target.
|
(3)
|
These employee grants vest over approximately
three
years and have adjustable ranges from
0
-
200%
of target subject to the level of performance attained in the respective award agreement.
|
(4)
|
These shares vest over approximately
three
to
four
years.
|
(5)
|
As a result of the Combination, certain target awards granted to employees in fiscal 2015 were prorated with the employee receiving approximately
16.6%
of the target award in accordance with the terms in the award document prior to the application of the performance adjustment. The performance period applicable to each award ended upon consummation of the Combination, and the performance goals were determined in accordance with the applicable grant letter to be attained at
146.5%
of target.
|
(6)
|
The performance period applicable to each award ended upon consummation of the Combination, and the performance goals were determined in accordance with the applicable grant letter to be attained at between
100%
and
168%
of target.
|
(7)
|
These shares vest over approximately
one
to
three
years.
|
Note 17.
|
Related Party Transactions
|
Note 18.
|
Commitments and Contingencies
|
Note 19.
|
Special Purpose Entities
|
Note 20.
|
Segment Information
|
|
Years Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Foreign net sales to unaffiliated customers
|
$
|
2,426.6
|
|
|
$
|
1,506.5
|
|
|
$
|
1,191.8
|
|
Foreign segment income
|
$
|
226.1
|
|
|
$
|
171.6
|
|
|
$
|
109.6
|
|
Foreign long-lived assets
|
$
|
1,341.5
|
|
|
$
|
1,228.0
|
|
|
$
|
379.6
|
|
Foreign operations as a percent of consolidated operations:
|
|
|
|
|
|
||||||
Foreign net sales to unaffiliated customers
|
17.1
|
%
|
|
13.5
|
%
|
|
12.0
|
%
|
|||
Foreign segment income
|
18.4
|
%
|
|
16.0
|
%
|
|
10.5
|
%
|
|||
Foreign long-lived assets
|
14.4
|
%
|
|
13.4
|
%
|
|
6.5
|
%
|
|
Years Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales (aggregate):
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
7,868.5
|
|
|
$
|
7,516.9
|
|
|
$
|
7,257.4
|
|
Consumer Packaging
|
6,388.1
|
|
|
3,740.1
|
|
|
2,818.5
|
|
|||
Land and Development
|
119.8
|
|
|
45.0
|
|
|
—
|
|
|||
Total
|
$
|
14,376.4
|
|
|
$
|
11,302.0
|
|
|
$
|
10,075.9
|
|
Less net sales (intersegment):
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
136.2
|
|
|
$
|
130.6
|
|
|
$
|
148.5
|
|
Consumer Packaging
|
68.4
|
|
|
46.6
|
|
|
32.3
|
|
|||
Land and Development
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
204.6
|
|
|
$
|
177.2
|
|
|
$
|
180.8
|
|
Net sales (unaffiliated customers):
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
7,732.3
|
|
|
$
|
7,386.3
|
|
|
$
|
7,108.9
|
|
Consumer Packaging
|
6,319.7
|
|
|
3,693.5
|
|
|
2,786.2
|
|
|||
Land and Development
|
119.8
|
|
|
45.0
|
|
|
—
|
|
|||
Total
|
$
|
14,171.8
|
|
|
$
|
11,124.8
|
|
|
$
|
9,895.1
|
|
Segment income:
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
739.9
|
|
|
$
|
806.7
|
|
|
$
|
728.0
|
|
Consumer Packaging
|
481.7
|
|
|
267.0
|
|
|
311.4
|
|
|||
Land and Development
|
4.6
|
|
|
(3.4
|
)
|
|
—
|
|
|||
Segment income
|
1,226.2
|
|
|
1,070.3
|
|
|
1,039.4
|
|
|||
Pension risk transfer expense
|
(370.7
|
)
|
|
—
|
|
|
—
|
|
|||
Pension lump sum settlement and retiree medical curtailment, net
|
—
|
|
|
(11.5
|
)
|
|
(47.9
|
)
|
|||
Restructuring and other costs, net
|
(366.4
|
)
|
|
(140.8
|
)
|
|
(55.6
|
)
|
|||
Non-allocated expenses
|
(49.1
|
)
|
|
(58.4
|
)
|
|
(72.7
|
)
|
|||
Interest expense
|
(256.7
|
)
|
|
(132.5
|
)
|
|
(95.3
|
)
|
|||
Gain (loss) on extinguishment of debt
|
2.7
|
|
|
(2.6
|
)
|
|
—
|
|
|||
Interest income and other income (expense), net
|
58.6
|
|
|
9.7
|
|
|
2.4
|
|
|||
Income from continuing operations before income taxes
|
$
|
244.6
|
|
|
$
|
734.2
|
|
|
$
|
770.3
|
|
|
Years Ended September 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Identifiable assets:
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
10,046.0
|
|
|
$
|
9,467.3
|
|
|
$
|
8,701.3
|
|
Consumer Packaging
|
10,122.5
|
|
|
10,175.7
|
|
|
1,980.2
|
|
|||
Land and Development
|
460.6
|
|
|
545.5
|
|
|
—
|
|
|||
Assets of discontinued operations
|
—
|
|
|
2,618.5
|
|
|
—
|
|
|||
Assets held for sale
|
52.3
|
|
|
10.2
|
|
|
22.6
|
|
|||
Corporate
|
2,356.8
|
|
|
2,555.2
|
|
|
335.6
|
|
|||
Total
|
$
|
23,038.2
|
|
|
$
|
25,372.4
|
|
|
$
|
11,039.7
|
|
|
|
|
|
|
|
||||||
Goodwill:
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
1,722.5
|
|
|
$
|
1,667.5
|
|
|
$
|
1,525.4
|
|
Consumer Packaging
|
3,055.6
|
|
|
2,979.6
|
|
|
401.0
|
|
|||
Land and Development
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
4,778.1
|
|
|
$
|
4,647.1
|
|
|
$
|
1,926.4
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
576.2
|
|
|
$
|
496.6
|
|
|
$
|
464.0
|
|
Consumer Packaging
|
498.9
|
|
|
201.8
|
|
|
104.3
|
|
|||
Land and Development
|
1.4
|
|
|
0.2
|
|
|
—
|
|
|||
Discontinued operations
|
57.2
|
|
|
22.0
|
|
|
—
|
|
|||
Corporate
|
12.8
|
|
|
20.2
|
|
|
16.2
|
|
|||
Total
|
$
|
1,146.5
|
|
|
$
|
740.8
|
|
|
$
|
584.5
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
490.1
|
|
|
$
|
378.4
|
|
|
$
|
410.6
|
|
Consumer Packaging
|
244.9
|
|
|
166.1
|
|
|
113.3
|
|
|||
Discontinued operations
|
45.2
|
|
|
28.6
|
|
|
—
|
|
|||
Corporate
|
16.5
|
|
|
12.4
|
|
|
10.3
|
|
|||
Total
|
$
|
796.7
|
|
|
$
|
585.5
|
|
|
$
|
534.2
|
|
|
|
|
|
|
|
||||||
Investment in unconsolidated subsidiaries:
|
|
|
|
|
|
||||||
Corrugated Packaging
|
$
|
281.2
|
|
|
$
|
7.9
|
|
|
$
|
6.7
|
|
Consumer Packaging
|
22.2
|
|
|
21.3
|
|
|
20.6
|
|
|||
Land and Development
|
28.6
|
|
|
31.0
|
|
|
—
|
|
|||
Corporate
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
328.9
|
|
|
$
|
60.2
|
|
|
$
|
27.3
|
|
|
Corrugated Packaging
|
|
Consumer
Packaging
|
|
Total
|
||||||
Balance as of October 1, 2013
|
|
|
|
|
|
||||||
Goodwill
|
$
|
1,499.9
|
|
|
$
|
405.0
|
|
|
$
|
1,904.9
|
|
Accumulated impairment losses
|
—
|
|
|
(42.8
|
)
|
|
(42.8
|
)
|
|||
|
1,499.9
|
|
|
362.2
|
|
|
1,862.1
|
|
|||
Goodwill acquired
|
29.0
|
|
|
42.2
|
|
|
71.2
|
|
|||
Translation adjustment
|
(3.5
|
)
|
|
(3.4
|
)
|
|
(6.9
|
)
|
|||
Balance as of September 30, 2014
|
|
|
|
|
|
||||||
Goodwill
|
1,525.4
|
|
|
443.8
|
|
|
1,969.2
|
|
|||
Accumulated impairment losses
|
—
|
|
|
(42.8
|
)
|
|
(42.8
|
)
|
|||
|
1,525.4
|
|
|
401.0
|
|
|
1,926.4
|
|
|||
Goodwill acquired
|
183.3
|
|
|
2,586.5
|
|
|
2,769.8
|
|
|||
Purchase price allocation adjustments
|
2.4
|
|
|
(1.1
|
)
|
|
1.3
|
|
|||
Translation adjustment
|
(43.6
|
)
|
|
(6.8
|
)
|
|
(50.4
|
)
|
|||
Balance as of September 30, 2015
|
|
|
|
|
|
||||||
Goodwill
|
1,667.5
|
|
|
3,022.4
|
|
|
4,689.9
|
|
|||
Accumulated impairment losses
|
—
|
|
|
(42.8
|
)
|
|
(42.8
|
)
|
|||
|
1,667.5
|
|
|
2,979.6
|
|
|
4,647.1
|
|
|||
Goodwill acquired
|
52.4
|
|
|
8.0
|
|
|
60.4
|
|
|||
Goodwill disposed of
|
(24.0
|
)
|
|
—
|
|
|
(24.0
|
)
|
|||
Purchase price allocation adjustments
|
(4.9
|
)
|
|
67.6
|
|
|
62.7
|
|
|||
Translation adjustment
|
31.5
|
|
|
0.4
|
|
|
31.9
|
|
|||
Balance as of September 30, 2016
|
|
|
|
|
|
||||||
Goodwill
|
1,722.5
|
|
|
3,098.4
|
|
|
4,820.9
|
|
|||
Accumulated impairment losses
|
—
|
|
|
(42.8
|
)
|
|
(42.8
|
)
|
|||
|
$
|
1,722.5
|
|
|
$
|
3,055.6
|
|
|
$
|
4,778.1
|
|
Note 21.
|
Financial Results by Quarter (Unaudited)
|
Fiscal 2016
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
Net sales
|
$
|
3,470.9
|
|
|
$
|
3,492.7
|
|
|
$
|
3,596.5
|
|
|
$
|
3,611.7
|
|
Gross profit
|
654.7
|
|
|
657.3
|
|
|
727.3
|
|
|
719.3
|
|
||||
Pension risk transfer expense
|
—
|
|
|
—
|
|
|
—
|
|
|
370.7
|
|
||||
Restructuring and other costs, net
|
162.8
|
|
|
111.1
|
|
|
43.1
|
|
|
49.4
|
|
||||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
||||
Income (loss) from continuing operations
|
30.4
|
|
|
58.4
|
|
|
152.4
|
|
|
(86.4
|
)
|
||||
(Loss) income from discontinued operations, net of tax
|
(482.1
|
)
|
|
1.4
|
|
|
(58.7
|
)
|
|
(5.3
|
)
|
||||
Consolidated net (loss) income
|
(451.7
|
)
|
|
59.8
|
|
|
93.7
|
|
|
(91.7
|
)
|
||||
Net (loss) income attributable to common stockholders
|
(453.5
|
)
|
|
56.9
|
|
|
92.3
|
|
|
(92.0
|
)
|
||||
Basic (loss) earnings per share from continuing operations
|
0.12
|
|
|
0.22
|
|
|
0.60
|
|
|
(0.34
|
)
|
||||
Diluted (loss) earnings per share from continuing operations
|
0.12
|
|
|
0.22
|
|
|
0.59
|
|
|
(0.34
|
)
|
||||
Basic (loss) earnings per share attributable to common stockholders
|
(1.76
|
)
|
|
0.22
|
|
|
0.37
|
|
|
(0.37
|
)
|
||||
Diluted (loss) earnings per share attributable to common stockholders
|
(1.73
|
)
|
|
0.22
|
|
|
0.36
|
|
|
(0.37
|
)
|
Fiscal 2015
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
Net sales
|
$
|
2,514.2
|
|
|
$
|
2,455.6
|
|
|
$
|
2,538.9
|
|
|
$
|
3,616.1
|
|
Gross profit
|
469.5
|
|
|
457.1
|
|
|
526.3
|
|
|
685.4
|
|
||||
Pension lump sum settlement and retiree medical curtailment, net
|
11.9
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
||||
Restructuring and other costs, net
|
5.4
|
|
|
17.2
|
|
|
13.1
|
|
|
105.1
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.6
|
)
|
||||
Income from continuing operations
|
125.6
|
|
|
110.4
|
|
|
157.9
|
|
|
107.3
|
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
10.6
|
|
||||
Consolidated net income
|
125.6
|
|
|
110.4
|
|
|
157.9
|
|
|
117.9
|
|
||||
Net income attributable to common stockholders
|
125.1
|
|
|
109.8
|
|
|
156.4
|
|
|
115.8
|
|
||||
Basic earnings per share from continuing operations
|
0.89
|
|
|
0.78
|
|
|
1.11
|
|
|
0.41
|
|
||||
Diluted earnings per share from continuing operations
|
0.88
|
|
|
0.77
|
|
|
1.10
|
|
|
0.40
|
|
||||
Basic earnings per share attributable to common stockholders
|
0.89
|
|
|
0.78
|
|
|
1.11
|
|
|
0.45
|
|
||||
Diluted earnings per share attributable to common stockholders
|
0.88
|
|
|
0.77
|
|
|
1.10
|
|
|
0.44
|
|
Note 22.
|
Subsequent Events (Unaudited)
|
S
TEVEN
C. V
OORHEES
,
|
Chief Executive Officer and President
|
|
W
ARD
H. D
ICKSON
,
|
Executive Vice President and Chief Financial Officer
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
•
|
that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms; and
|
•
|
that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our CEO and our CFO, as appropriate to allow timely decisions regarding required disclosure.
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
|
Name
|
|
Age
|
|
|
Position Held
|
|||
|
|
|
||||||
Steven C. Voorhees
|
|
|
62
|
|
|
|
Chief Executive Officer and President
|
|
|
|
|
||||||
Robert A. Feeser
|
|
|
55
|
|
|
|
President, Consumer Packaging
|
|
|
|
|
||||||
Jeffrey W. Chalovich
|
|
53
|
|
53
|
|
|
|
President, Corrugated Packaging
|
|
|
|
|
|
|
|
||
James B. Porter III
|
|
|
65
|
|
|
|
President, Business Development and Latin America
|
|
|
|
|
||||||
Ward H. Dickson
|
|
|
54
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
||||||
Robert B. McIntosh
|
|
|
59
|
|
|
|
Executive Vice President, General Counsel and Secretary
|
|
|
|
|
||||||
Jennifer Graham-Johnson
|
|
|
48
|
|
|
|
Chief Human Resources Officer
|
|
|
|
|
||||||
A. Stephen Meadows
|
|
|
66
|
|
|
|
Chief Accounting Officer
|
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 ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
|
Page
Reference
|
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
Item 16.
|
FORM 10-K SUMMARY
|
|
|
|
WESTROCK COMPANY
|
|
|
|
|
|
|
Dated:
|
November 23, 2016
|
|
By:
|
/s/ STEVEN C. VOORHEES
|
|
|
|
|
Steven C. Voorhees
|
|
|
|
|
Chief Executive Officer and President
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ STEVEN C. VOORHEES
|
|
Chief Executive Officer and President (Principal Executive Officer), Director
|
|
November 23, 2016
|
Steven C. Voorhees
|
|
|
|
|
|
|
|
|
|
/s/ WARD H. DICKSON
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
November 23, 2016
|
Ward H. Dickson
|
|
|
|
|
|
|
|
|
|
/s/ A. STEPHEN MEADOWS
|
|
Chief Accounting Officer (Principal Accounting Officer)
|
|
November 23, 2016
|
A. Stephen Meadows
|
|
|
|
|
|
|
|
|
|
/s/ JOHN A. LUKE, JR.
|
|
Director, Non-Executive Chairman of the Board
|
|
November 23, 2016
|
John A. Luke, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ TIMOTHY J. BERNLOHR
|
|
Director
|
|
November 23, 2016
|
Timothy J. Bernlohr
|
|
|
|
|
|
|
|
|
|
/s/ J. POWELL BROWN
|
|
Director
|
|
November 14, 2016
|
J. Powell Brown
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL E. CAMPBELL
|
|
Director
|
|
November 15, 2016
|
Michael E. Campbell
|
|
|
|
|
|
|
|
|
|
/s/ TERRELL K. CREWS
|
|
Director
|
|
November 23, 2016
|
Terrell K. Crews
|
|
|
|
|
|
|
|
|
|
/s/ RUSSELL M. CURREY
|
|
Director
|
|
November 23, 2016
|
Russell M. Currey
|
|
|
|
|
|
|
|
|
|
/s/ G. STEPHEN FELKER
|
|
Director
|
|
November 23, 2016
|
G. Stephen Felker
|
|
|
|
|
|
|
|
|
|
/s/ LAWRENCE L. GELLERSTEDT, III
|
|
Director
|
|
November 12, 2016
|
Lawrence L. Gellerstedt, III
|
|
|
|
|
|
|
|
|
|
/s/ GRACIA C. MARTORE
|
|
Director
|
|
November 23, 2016
|
Gracia C. Martore
|
|
|
|
|
|
|
|
|
|
/s/ JAMES E. NEVELS
|
|
Director
|
|
November 23, 2016
|
James E. Nevels
|
|
|
|
|
|
|
|
|
|
/s/ TIMOTHY H. POWERS
|
|
Director
|
|
November 19, 2016
|
Timothy H. Powers
|
|
|
|
|
|
|
|
|
|
/s/ BETTINA M. WHYTE
|
|
Director
|
|
November 23, 2016
|
Bettina M. Whyte
|
|
|
|
|
|
|
|
|
|
/s/ ALAN D. WILSON
|
|
Director
|
|
November 14, 2016
|
Alan D. Wilson
|
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
|
|
|
2.1
|
—
|
Agreement and Plan of Merger, dated as of January 23, 2011, by and among, Rock-Tenn Company, Sam Acquisition, LLC and Smurfit-Stone Container Corporation (incorporated by reference to Exhibit 2.1 of RockTenn's Current Report on Form 8-K, filed on January 24, 2011).
|
|
|
|
2.2(a)
|
—
|
Second Amended and Restated Business Combination Agreement, dated as of April 17, 2015, by and among WestRock Company, MeadWestvaco Corporation, Rock-Tenn Company, Milan Merger Sub, LLC and Rome Merger Sub, Inc. (incorporated by reference to Annex A of WestRock’s Registration Statement on Form S-4 initially filed with the SEC on March 10, 2015 and as amended on April 20, 2015, May 6, 2015 and May 18, 2015, File No. 333-202643).†
|
|
|
|
2.2(b)
|
—
|
First Amendment to the Second Amended and Restated Business Combination Agreement, dated as of May 5, 2015, by and among WestRock Company, MeadWestvaco Corporation, Rock-Tenn Company, Milan Merger Sub, LLC and Rome Merger Sub, Inc. (incorporated by reference to Exhibit 2.2 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).†
|
|
|
|
2.3
|
—
|
Separation and Distribution Agreement, dated May 14, 2016, between WestRock Company and Ingevity Corporation (incorporated by reference to Exhibit 2.1 of WestRock’s Current Report on Form 8-K filed on May 19, 2016).
|
|
|
|
3.1
|
—
|
Amended and Restated Certificate of Incorporation of WestRock Company (incorporated by reference to Exhibit 3.1 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
3.2
|
—
|
Second Amended and Restated Bylaws of WestRock Company (incorporated by reference to Exhibit 99.2 of WestRock’s Current Report on Form 8-K filed on September 13, 2016).
|
|
|
|
4.1(a)
|
—
|
Form of Indenture, dated as of July 15, 1982, between The Mead Corporation and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.viv of MWV’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001).
|
|
|
|
4.1(b)
|
—
|
First Supplemental Indenture, dated as of March 1, 1987, to the Indenture dated as of July 15, 1982, between The Mead Corporation and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.viv of MWV’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001).
|
|
|
|
4.1(c)
|
—
|
Second Supplemental Indenture, dated as of October 15, 1989, to the Indenture dated as of July 15, 1982, between The Mead Corporation and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.viv of MWV’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001).
|
|
|
|
4.1(d)
|
—
|
Third Supplemental Indenture, dated as of November 15, 1991, to the Indenture dated as of July 15, 1982, between The Mead Corporation and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.viv of MWV’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001).
|
|
|
|
4.1(e)
|
—
|
Fourth Supplemental Indenture, dated as of January 31, 2002, to the Indenture dated as of July 15, 1982, between The Mead Corporation, WestRock MWV, LLC (formerly MeadWestvaco Corporation), Westvaco Corporation and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as Trustee (incorporated by reference to Exhibit 4.2 of MWV’s Current Report on Form 8-K filed on February 1, 2002).
|
|
|
|
4.1(f)
|
—
|
Fifth Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of July 15, 1982, between MW Custom Papers, Inc. and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 4.2 of MWV’s Current Report on Form 8-K filed on January 7, 2003).
|
|
|
|
4.1(g)
|
—
|
Sixth Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of July 15, 1982, between WestRock MWV, LLC (formerly MeadWestvaco Corporation) and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 4.3 of MWV’s Current Report on Form 8-K filed on January 7, 2003).
|
|
|
|
4.1(h)
|
—
|
Seventh Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of July 15, 1982, between WestRock MWV, LLC (formerly MeadWestvaco Corporation) and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 4.3 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
|
|
|
4.2(a)
|
—
|
Form of Indenture, dated as of March 1, 1983, between Westvaco Corporation and The Bank of New York (formerly Irving Trust Company), as Trustee (incorporated by reference to Exhibit 2 of Westvaco Corporation’s Registration Statement on Form 8-A filed on January 24, 1984).
|
|
|
|
4.2(b)
|
—
|
First Supplemental Indenture, dated as of January 31, 2002, to the Indenture dated as of March 1, 1983, by and among Westvaco Corporation, WestRock MWV, LLC (formerly MeadWestvaco Corporation), The Mead Corporation and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 of MWV’s Current Report on Form 8-K filed on February 1, 2002).
|
|
|
|
4.2(c)
|
—
|
Second Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of March 1, 1983, between WestRock MWV, LLC (formerly MeadWestvaco Corporation) and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1 of MWV’s Current Report on Form 8-K filed on January 7, 2003).
|
|
|
|
4.2(d)
|
—
|
Third Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of March 1, 1983, between WestRock MWV, LLC (formerly MeadWestvaco Corporation) and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.4 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
4.3(a)
|
—
|
Indenture, dated as of February 1, 1993, between The Mead Corporation and The First National Bank of Chicago, as Trustee (incorporated by reference to Exhibit 4.vv of MWV’s Annual Report on Form 10-K for the Transition Period ended December 31, 2001).
|
|
|
|
4.3(b)
|
—
|
First Supplemental Indenture, dated as of January 31, 2002, to the Indenture dated as of February 1, 1993, between The Mead Corporation, WestRock MWV, LLC (formerly MeadWestvaco Corporation), Westvaco Corporation and Bank One Trust Company, NA, as Trustee (incorporated by reference to Exhibit 4.3 of MWV’s Current Report on Form 8-K filed on February 1, 2002).
|
|
|
|
4.3(c)
|
—
|
Second Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of February 1, 1993, between MW Custom Papers, Inc. and Bank One Trust Company, NA, as Trustee (incorporated by reference to Exhibit 4.4 of MWV’s Current Report on Form 8-K filed on January 7, 2003).
|
|
|
|
4.3(d)
|
—
|
Third Supplemental Indenture, dated as of December 31, 2002, to the Indenture dated as of February 1, 1993, between WestRock MWV, LLC (formerly MeadWestvaco Corporation) and Bank One Trust Company, NA, as Trustee (incorporated by reference to Exhibit 4.5 of MWV’s Current Report on Form 8-K filed on January 7, 2003).
|
|
|
|
4.3(e)
|
—
|
Fourth Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of February 1, 1993, between WestRock MWV, LLC (formerly MeadWestvaco Corporation) and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.5 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
4.4(a)
|
—
|
Indenture, dated as of April 2, 2002, by and among WestRock MWV, LLC (formerly MeadWestvaco Corporation), Westvaco Corporation, The Mead Corporation and The Bank of New York, as Trustee, (incorporated by reference to Exhibit 4(a) of MWV’s Current Report on Form 8-K filed on April 2, 2002).
|
|
|
|
4.4(b)
|
—
|
First Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of April 2, 2002, between WestRock MWV, LLC (formerly MeadWestvaco Corporation) and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.6 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
4.5(a)
|
—
|
Indenture, dated as of February 22, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and HSBC Bank USA, National Association, as Trustee (incorporated by reference to Exhibit 4.18 of RockTenn’s Registration Statement on Form S-4 filed on February 8, 2013, File No. 333-186552).
|
|
|
|
4.5(b)
|
—
|
Registration Rights Agreement, dated as of February 22, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein), and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as representatives of the several Initial Purchasers (incorporated by reference to Exhibit 4.20 of RockTenn’s Registration Statement on Form S-4 filed on February 8, 2013, File No. 333-186552).
|
|
|
|
4.5(c)
|
—
|
First Supplemental Indenture, dated as of November 7, 2013, to the Indenture dated as of February 22, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and HSBC Bank USA, National Association, as Trustee (incorporated by reference to Exhibit 4.6(c) of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
|
|
|
4.5(d)
|
—
|
Second Supplemental Indenture, dated as of February 21, 2014, to the Indenture dated as of February 22, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and HSBC Bank USA, National Association, as Trustee (incorporated by reference to Exhibit 4.6(d) of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
4.5(e)
|
—
|
Third Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of February 22, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and HSBC Bank USA, National Association, as Trustee (incorporated by reference to Exhibit 4.1 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
4.6(a)
|
—
|
Indenture, dated as of September 11, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 of RockTenn's Current Report on Form 8-K filed on October 2, 2012).
|
|
|
|
4.6(b)
|
—
|
Registration Rights Agreement, dated as of September 11, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein), and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as representatives of the several Initial Purchasers (incorporated by reference to Exhibit 4.2 of RockTenn's Current Report on Form 8-K filed on October 2, 2012).
|
|
|
|
4.6(c)
|
—
|
First Supplemental Indenture, dated as of November 7, 2013, to the Indenture dated as of September 11, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.7(c) of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
4.6(d)
|
—
|
Second Supplemental Indenture, dated as of February 21, 2014, to the Indenture dated as of September 11, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.7(d) of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
4.6(e)
|
—
|
Third Supplemental Indenture, dated as of July 1, 2015, to the Indenture dated as of September 11, 2012, by and among Rock-Tenn Company, the Guarantors (as defined therein) and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
*10.1(a)
|
—
|
The Mead Corporation 1996 Stock Option Plan, as amended through June 24, 1999 and amended February 22, 2001 (incorporated by reference to Exhibit 10.3 of The Mead Corporation’s Quarterly Report on Form 10-Q for the quarter ended July 4, 1999 and Appendix 2 of The Mead Corporation’s Definitive Proxy Statement for the 2001 Annual Meeting of Shareholders filed with the SEC on March 9, 2001, respectively).
|
|
|
|
*10.1(b)
|
—
|
Amendment to The Mead Corporation 1996 Stock Option Plan, effective April 23, 2002 (incorporated by reference to Exhibit 10.3 of MWV’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
|
|
|
|
*10.1(c)
|
—
|
Amendment to The Mead Corporation 1996 Stock Option Plan, effective January 23, 2007 (incorporated by reference to Exhibit 10.4 of MWV’s Annual Report on Form 10-K for the year ended December 31, 2007).
|
|
|
|
*10.2(a)
|
—
|
Rock-Tenn Company Annual Executive Bonus Program (incorporated by reference to Appendix A of RockTenn’s Definitive Proxy Statement for the 2002 Annual Meeting of Shareholders filed with the SEC on December 19, 2001).
|
|
|
|
*10.2(b)
|
—
|
Amendment Number 1 to Rock-Tenn Company Annual Executive Bonus Program (incorporated by reference to Exhibit 10.1 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008).
|
|
|
|
*10.3
|
—
|
Rock-Tenn Company Supplemental Retirement Savings Plan, effective as of May 15, 2003 (incorporated by reference to Exhibit 4.1 of RockTenn’s Registration Statement on Form S-8 filed on April 30, 2003, File No. 333-104870).
|
|
|
|
*10.4(a)
|
—
|
Rock-Tenn Company 2004 Incentive Stock Plan (incorporated by reference to Exhibit 10.1 of RockTenn’s Current Report on Form 8-K filed on February 3, 2005).
|
|
|
|
*10.4(b)
|
—
|
Amendment Number One to Rock-Tenn Company 2004 Incentive Stock Plan (incorporated by reference to Exhibit 10.1 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007).
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
|
|
|
*10.4(c)
|
—
|
Amendment Number 2 to Rock-Tenn Company 2004 Incentive Stock Plan (incorporated by reference to Exhibit 10.5 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).
|
|
|
|
*10.4(d)
|
—
|
Amendment Number 3 to Rock-Tenn Company 2004 Incentive Stock Plan (incorporated by reference to Exhibit 10.2 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
|
|
|
|
*10.4(e)
|
—
|
Amendment Number 4 to Rock-Tenn Company 2004 Incentive Stock Plan (incorporated by reference to Exhibit 10.1 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011).
|
|
|
|
*10.4(f)
|
—
|
Amendment Number 5 to Rock-Tenn Company 2004 Incentive Stock Plan (incorporated by reference to Exhibit 10.2 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011).
|
|
|
|
*10.5
|
—
|
MeadWestvaco Corporation 2005 Performance Incentive Plan effective April 22, 2005 and as amended February 26, 2007, January 1, 2009, February 28, 2011 and February 25, 2013 (incorporated by reference to Exhibit 10.1 of MWV’s Current Report on Form 8-K filed on April 25, 2013).
|
|
|
|
*10.6(a)
|
—
|
Amended and Restated Rock-Tenn Company Supplemental Retirement Savings Plan, effective as of January 1, 2006 (incorporated by reference to Exhibit 10.4 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005).
|
|
|
|
*10.6(b)
|
—
|
Second Amendment to the Rock-Tenn Company Supplemental Retirement Savings Plan, effective as of November 16, 2007 (incorporated by reference to Exhibit 10.2 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2007).
|
|
|
|
*10.6(c)
|
—
|
First Amendment to the Rock-Tenn Company Supplemental Retirement Savings Plan, effective as of October 1, 2011 (incorporated by reference to Exhibit 10.1 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012).
|
|
|
|
*10.7(a)
|
—
|
MeadWestvaco Corporation Deferred Income Plan Restatement, effective January 1, 2007 (incorporated by reference to Exhibit 10.25 of MWV’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
|
|
*10.7(b)
|
—
|
First Amendment to the MeadWestvaco Corporation Deferred Income Plan (2007 Restatement) effective September 1, 2013 (incorporated by reference to Exhibit 10.7(b) of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
*10.7(c)
|
—
|
Second Amendment to the MeadWestvaco Corporation Deferred Income Plan (2007 Restatement) effective January 1, 2015 (incorporated by reference to Exhibit 10.7(c) of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
*10.7(d)
|
—
|
Third Amendment to the MeadWestvaco Corporation Deferred Income Plan (2007 Restatement) effective July 1, 2015 (incorporated by reference to Exhibit 10.7(d) of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
*10.8
|
—
|
MeadWestvaco Corporation Executive Retirement Plan, as amended and restated effective January 1, 2009 except as otherwise provided (incorporated by reference to Exhibit 10.24 of MWV’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
|
|
*10.9
|
—
|
MeadWestvaco Corporation Retirement Restoration Plan, effective January 1, 2009, except as otherwise provided (incorporated by reference to Exhibit 10.26 of MWV’s Annual Report on Form 10-K for the year ended December 31, 2008).
|
|
|
|
*10.10
|
—
|
Stock Option Awards in 2009 - Terms and Conditions (incorporated by reference to Exhibit 10.3 of MWV’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
|
|
|
|
*10.11
|
—
|
Service Based Restricted Stock Unit Awards in 2009 - Terms and Conditions (incorporated by reference to Exhibit 10.4 of MWV’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009).
|
|
|
|
*10.12
|
—
|
Rock-Tenn Company Supplemental Executive Retirement Plan Amended and Restated effective as of October 27, 2011(incorporated by reference to Exhibit 10.2 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012).
|
|
|
|
*10.13
|
—
|
Amended and Restated Rock-Tenn Company 2004 Incentive Stock Plan effective as of January 27, 2012 (incorporated by reference to Exhibit 10.1 of the RockTenn’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012).
|
|
|
|
*10.14
|
—
|
Stock Option Awards (for 2012) (incorporated by reference to Exhibit 10.43 of MWV’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012).
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
|
|
|
*10.15
|
—
|
Summary of MeadWestvaco Corporation 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.46 of MWV’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013).
|
|
|
|
10.16
|
—
|
Master Purchase and Sale Agreement, dated October 28, 2013, by and among MeadWestvaco Corporation, MWV Community Development and Land Management, LLC and MWV Community Development, Inc., as sellers, and Plum Creek Timberlands, L.P., Plum Creek Marketing, Inc., Plum Creek Land Company and Highland Mineral Resources, LLC, as purchasers, and Plum Creek Timber Company, Inc. (incorporated by reference to Exhibit 2.1 of MWV’s Current Report on Form 8-K filed on October 29, 2013).
|
|
|
|
*10.17
|
—
|
Summary of MeadWestvaco Corporation 2014 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.51 of MWV’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014).
|
|
|
|
*10.18
|
—
|
Amendments to Grants under the MeadWestvaco Corporation 2005 Performance Incentive Plan Amended and Restated Effective February 25, 2013 (2005 Performance Incentive Plan), effective January 27, 2014 (incorporated by reference to Exhibit 10.47 of MWV’s Annual Report on Form 10-K for the year ended December 31, 2013).
|
|
|
|
*10.19
|
—
|
Employment Agreement between MeadWestvaco Corporation and Robert K. Beckler, dated March 3, 2014 (incorporated by reference to Exhibit 10.1 of MWV’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014).
|
|
|
|
10.20
|
—
|
Sixth Amended and Restated Receivables Sale Agreement, dated July 22, 2016, among WestRock Company of Texas, WestRock Converting Company, WestRock Mill Company, LLC, WestRock - Southern Container, LLC, WestRock California, Inc., WestRock Minnesota Corporation, WestRock CP, LLC, WestRock - Solvay, LLC, WestRock - REX, LLC, WestRock - Graphics, Inc., WestRock Commercial, LLC, WestRock Packaging, Inc., WestRock Slatersville LLC, WestRock Consumer Packaging Group, LLC, WestRock Dispensing Systems, Inc., and WestRock Packaging Systems, LLC.
|
|
|
|
*10.21
|
—
|
Employment Agreement by and among RockTenn-Southern Container, LLC (successor-in-interest to Southern Container Corp.), Rock-Tenn Services Inc., and James B. Porter III, dated as of December 22, 2014, and effective as of January 1, 2015 (incorporated by reference to Exhibit 10.1 of RockTenn’s Quarterly Report on Form 10-Q for the quarter ending December 31, 2014).
|
|
|
|
*10.22
|
—
|
Summary of MeadWestvaco Corporation 2015 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.51 of MWV’s quarterly report on Form 10-Q for the period ended March 31, 2015).
|
|
|
|
*10.23
|
—
|
Summary of MeadWestvaco Corporation 2015 Annual Incentive Plan (incorporated by reference to Exhibit 10.50 to MWV’s quarterly report on Form 10-Q for the period ended March 31, 2015).
|
|
|
|
10.24(a)
|
—
|
Seventh Amended and Restated Credit and Security Agreement, dated as of June 29, 2015 among Rock-Tenn Financial, Inc., as Borrower, Rock-Tenn Converting Company, as Servicer, the Lenders and Co-Agents from time to time party thereto, and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”, New York Branch, as Administrative Agent and as Funding Agent (incorporated by reference to Exhibit 10.1 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).
|
|
|
|
10.24(b)
|
—
|
Eighth Amended and Restated Credit and Security Agreement, dated July 22, 2016, among WestRock Financial Inc., WestRock Converting Company, the lenders and co-agents from time to time party thereto and Cooperatieve Rabobank, U.A.
|
|
|
|
*10.25
|
—
|
Letter Agreement between MeadWestvaco Corporation, Rock-Tenn Company and John A. Luke, Jr., dated June 30, 2015 (incorporated by reference to Exhibit 10.25 of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
*10.26
|
—
|
Letter Agreement between MeadWestvaco Corporation, Rock-Tenn Company and Robert K. Beckler, dated June 30, 2015 (incorporated by reference to Exhibit 10.26 of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
10.27(a)
|
—
|
Credit Agreement, dated as of July 1, 2015, among the Company, Rock-Tenn Company of Canada Holdings Corp./Compagnie de Holdings RockTenn du Canada Corp., certain subsidiaries of the Company from time to time party thereto as subsidiary borrowers, certain subsidiaries of the Company from time to time party thereto as guarantors, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent and multicurrency agent (incorporated by reference to Exhibit 10.1 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
|
|
|
10.27(b)
|
—
|
Amendment No. 1, dated July 1, 2016, among WestRock Company, WestRock Company of Canada Holdings Corp./Compagnie de Holdings WestRock du Canada Corp., the other Credit Parties, the Lenders thereto and Wells Fargo Bank, National Association, as administrative agent and multicurrency agent for the Lenders to the Credit Agreement, dated July 1, 2015 (incorporated by reference to Exhibit 10.27.1 of WestRock’s Current Report on Form 8-K filed on July 7, 2016).
|
|
|
|
10.28
|
—
|
Credit Agreement, dated as of July 1, 2015, among RockTenn CP, LLC, Rock-Tenn Converting Company and MeadWestvaco Virginia Corporation, as borrowers, as the guarantors from time to time party thereto, the lenders from time to time party thereto and CoBank, ACB, as administrative agent (incorporated by reference to Exhibit 10.2 of WestRock’s Current Report on Form 8-K filed on July 2, 2015).
|
|
|
|
10.29
|
—
|
Fifth Amended and Restated Performance Undertaking, dated as of September 1, 2015, executed by Westrock RKT Company, as successor-in-interest to Rock-Tenn Company, and Westrock Company(incorporated by reference to Exhibit 10.29 of WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015).
|
|
|
|
*10.30
|
—
|
WestRock Company 2016 Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.30 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
|
|
|
|
10.31
|
—
|
Uncommitted and Revolving Credit Line Agreement, dated November 2, 2015, between Sumitomo Mitsui Banking Corporation and WestRock Company (incorporated by reference to Exhibit 10.1 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2015).
|
|
|
|
*10.32
|
—
|
Employee Stock Purchase Plan, dated February 2, 2016 (incorporated by reference to Exhibit 10.1 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016).
|
|
|
|
*10.33
|
—
|
WestRock Company 2016 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016).
|
|
|
|
10.34
|
—
|
Uncommitted and Revolving Credit Line Agreement, dated February 11, 2016, between The Bank of Tokyo-Mitsubishi UFJ, Ltd. and WestRock Company (incorporated by reference to Exhibit 10.3 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
|
|
|
|
10.35
|
—
|
Uncommitted Line of Credit, dated March 4, 2016, between Cooperatieve Rabobank U.A., New York Branch and WestRock Company (incorporated by reference to Exhibit 10.4 of WestRock’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
|
|
|
|
10.36
|
—
|
Trust Agreement, dated May 6, 2016, among Ingevity Corporation, The Bank of New York Mellon Trust Company, N.A. and WestRock Company (incorporated by reference to Exhibit 10.1 of WestRock’s Current Report on Form 8-K filed on May 11, 2016).
|
|
|
|
10.37
|
—
|
Covington Plant Services Agreement, dated May 11, 2016, between Ingevity Virginia Corporation and WestRock Virginia, LLC (incorporated by reference to Exhibit 10.2 of WestRock’s Current Report on Form 8-K filed on May 11, 2016).
|
|
|
|
10.38
|
—
|
Covington Plant Ground Lease Agreement, dated May 11, 2016, between Ingevity Virginia Corporation and WestRock Virginia, LLC (incorporated by reference to Exhibit 10.3 of WestRock’s Current Report on Form 8-K filed on May 11, 2016).
|
|
|
|
10.39
|
—
|
Tax Matters Agreement, dated May 14, 2016, between WestRock Company and Ingevity Corporation (incorporated by reference to Exhibit 10.1 of WestRock’s Current Report on Form 8-K filed on May 19, 2016).
|
|
|
|
10.40
|
—
|
Transition Services Agreement, dated May 14, 2016, between WestRock Company and Ingevity Corporation (incorporated by reference to Exhibit 10.2 of WestRock’s Current Report on Form 8-K filed on May 19, 2016).
|
|
|
|
10.41
|
—
|
Employee Matters Agreement, dated May 14, 2016, between WestRock Company and Ingevity Corporation (incorporated by reference to Exhibit 10.3 of WestRock’s Current Report on Form 8-K filed on May 19, 2016).
|
|
|
|
10.42
|
—
|
Crude Tall Oil and Black Liquor Soap Skimmings Agreement, dated January 2, 2016, between WestRock Shared Services, LLC and WestRock MWV, LLC, on the one hand, and Ingevity Corporation, on the other hand (incorporated by reference to Exhibit 10.4 of WestRock’s Current Report on Form 8-K filed on May 19, 2016).
|
|
|
|
Exhibit
Number
|
|
Description of Exhibits
|
|
|
|
10.43
|
—
|
Intellectual Property Agreement, dated May 14, 2016, between WestRock Company and Ingevity Corporation (incorporated by reference to Exhibit 10.5 of WestRock’s Current Report on Form 8-K filed on May 19, 2016).
|
|
|
|
@10.44
|
—
|
Commitment Agreement, dated September 8, 2016, among WestRock Company, Prudential Insurance Company of America and State Street Bank and Trust Company.
|
|
|
|
21
|
—
|
Subsidiaries of the Registrant.
|
|
|
|
23
|
—
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
|
|
|
|
31.1
|
—
|
Certification Accompanying Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Steven C. Voorhees, Chief Executive Officer and President of WestRock Company.
|
|
|
|
31.2
|
—
|
Certification Accompanying Periodic Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by Ward H. Dickson, Executive Vice President and Chief Financial Officer of WestRock Company.
|
|
|
|
101.INS
|
—
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
—
|
XBRL Taxonomy Extension Schema.
|
|
|
|
101.CAL
|
—
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF
|
—
|
XBRL Taxonomy Definition Label Linkbase.
|
|
|
|
101.LAB
|
—
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
101.PRE
|
—
|
XBRL Taxonomy Extension Presentation Linkbase.
|
32.1
|
—
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Steven C. Voorhees, Chief Executive Officer and President of WestRock Company, and by Ward H. Dickson, Executive Vice President and Chief Financial Officer of WestRock Company.
|
*
|
Management contract or compensatory plan or arrangement.
|
ARTICLE I
|
AMOUNTS AND TERMS OF THE PURCHASE 2
|
Section 1.1
|
Initial Dividend and Contribution of Receivables 2
|
Section 1.2
|
Purchase of Receivables 3
|
Section 1.3
|
Payment for the Purchases 5
|
Section 1.4
|
Purchase Price Credit Adjustments 6
|
Section 1.5
|
Payments and Computations, Etc 7
|
Section 1.6
|
License of Software 7
|
Section 1.7
|
Characterization 8
|
Section 1.8
|
Excluded Receivables 8
|
ARTICLE II
|
REPRESENTATIONS AND WARRANTIES 8
|
Section 2.1
|
Representations and Warranties 8
|
ARTICLE III
|
CONDITIONS OF PURCHASE 12
|
Section 3.1
|
Conditions Precedent to Purchase 12
|
Section 3.2
|
Conditions Precedent to Subsequent Payments 12
|
ARTICLE IV
|
COVENANTS 13
|
Section 4.1
|
Affirmative Covenants of Transferors 13
|
Section 4.2
|
Negative Covenants of Transferors 17
|
ARTICLE V
|
TERMINATION EVENTS 18
|
Section 5.1
|
Termination Events 18
|
Section 5.2
|
Remedies 21
|
ARTICLE VI
|
INDEMNIFICATION 21
|
Section 6.1
|
Indemnities by Transferors 21
|
Section 6.2
|
Other Costs and Expenses 24
|
ARTICLE VII
|
MISCELLANEOUS 24
|
Section 7.1
|
Waivers and Amendments 24
|
Section 7.2
|
Notices 24
|
Section 7.3
|
Protection of Ownership Interests of Buyer 24
|
Section 7.4
|
Confidentiality 26
|
Section 7.5
|
Bankruptcy Petition 26
|
Section 7.6
|
Limitation of Liability 26
|
Section 7.7
|
CHOICE OF LAW 27
|
Section 7.8
|
CONSENT TO JURISDICTION 27
|
|
i
|
|
Section 7.9
|
WAIVER OF JURY TRIAL 27
|
Section 7.10
|
Integration; Binding Effect; Survival of Terms 27
|
Section 7.11
|
Counterparts; Severability; Section References 28
|
Exhibit I
|
-
|
Definitions
|
|
|
|
Exhibit II
|
-
|
Principal Place of Business; Location(s) of Records; Federal Employer Identification Number; Other Names
|
|
|
|
Exhibit III
|
-
|
Lock-Boxes; Collection Accounts; Collection Banks
|
|
|
|
Exhibit IV
|
-
|
[Reserved]
|
|
|
|
Exhibit V
|
-
|
Credit and Collection Policies
|
|
|
|
Exhibit VI
|
-
|
Form of Subordinated Note
|
|
|
|
Exhibit VII
|
-
|
Form of Purchase Report
|
|
|
|
Schedule A
|
-
|
Documents to Be Delivered to Buyer On or Prior to the Date of this Agreement
|
|
ii
|
|
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: General Counsel Telephone: (678) 291-7456 Facsimile: (770) 263-3582 |
Address:
|
504 Thrasher Street
Norcross, GA 30071 Attn: John D. Stakel Telephone: (678) 291-7901 Facsimile: (770) 246-4642 |
1.
|
Closin
g
.
On the terms and subject to the conditions set forth in paragraph
9, the consummation of the Closing Date Transfers and the
Contract Issuance
(collectively, the
“
Closin
g
”) will take place on
***
if on such date all of the conditions set forth in paragraph
9
have been satisfied or waived, or if the
Closing
does not occur on
***
, then such later date that is one business day after the conditions set forth in paragraph
9
have been satisfied or waived (the
“
Closing Dat
e
”).
In addition to the actions specifically provided for elsewhere in this
Commitment Agreemen
t, each of the parties will cooperate with each other and use commercially reasonable efforts to take, or to cause to be taken, all actions, and to do, or to cause to be done, all things reasonably necessary on its part to consummate the
Closin
g.
|
2.
|
Contract Issuanc
e
. Contemporaneously with
Prudentia
l’s receipt of the
Closing Date Transfer
s, the
Company
and
Prudential
will each duly execute the
Contract
and
Prudential
will issue and deliver to the
Company
the
Contract
(the
“
Contract Issuanc
e
”).
|
a.
|
Group Annuity Contract
. The
Contract
will be in substantially the form of the group annuity
contract
attached hereto as Schedule 1.
|
b.
|
Necessary Data
. In order for
Prudential
to issue the
Contrac
t,
(i)
the
Company
has delivered or caused to be delivered to
Prudential
on
***
a data file in exactly the same form as the
Base File
that reflects with respect to each entry on the
Base File
the social security or federal taxpayer identification number of such entry (the
“
Annuity Exhibit Fil
e
”) and the information necessary for
Prudential
to draft provisions of the
Contract
and administer the payments thereunder and
(ii)
the
Company
will deliver or cause to be delivered to
Prudential
on or before
***
the
Final Production Data File
described in Schedule 5. The annuity exhibit will not include any natural person designated as a payee in the
Contract for which Prudential
has not been provided each of the following: (1) name, (2) gender, (3) date of birth and (4) social security or federal taxpayer identification number.
|
c.
|
Plan of Operation
s
.
Prudential will use commercially reasonable efforts
to obtain approval from The State of New Jersey Department of Banking and Insurance with respect to the
Plan of Operations
prior to the
Closin
g.
|
3.
|
Closing Premium Amount
and Closing Date Transfers
.
At the
Closin
g, the
Independent Fiduciary
will irrevocably direct the
Plan Trustee
to
(x)
assign, transfer and deliver
***
to
Prudential
all rights, title and interests in and to each
***
set forth on
***
, and
(y)
pay to
Prudential
an amount in
Cash
equal to the excess, if any, of the
Closing Premium Amount
over the
Transferred Asset Valuation
((x)
and
(y
), collectively, the "
Closing Date Transfers
"). If on or following the
Closing Date
the
Plan Trustee
***
, then
Prudential
and the
Independent Fiduciary
shall cooperate in good faith to cause any such
***
to be made to the correct party.
|
a.
|
Closing Premium Amoun
t
. On the
Closing Date
(but prior to the
Closing), Prudential
will deliver to the
Company
a calculation of the
Closing Premium Amoun
t. The
“
Closing Premium Amoun
t
” shall equal the
***
and the related defined terms will be
(i)
calculated by
Prudential
pursuant to and as provided for in reasonable detail in
***
that was delivered
by Prudential
to the
Company
in an email at
***
(the
“
Workboo
k
”)
and
(ii)
defined herein or in the
Workboo
k, as applicable. The
Workbook
is incorporated by reference and made a part of this
Commitment Agreement
as if set forth fully in this
Commitment Agreemen
t.
|
b.
|
***
. After the close of business on
***
, the
Company
will deliver or cause to be delivered to
Prudential
an
***
Schedule 2 which
***
because it is
***
, and that provides the
***
as of the close of business on the business day prior to the
Closing Date
for each
Schedule 2 Asset
listed after any such
***
, if applicable (which includes the information in columns
J, K, L and N
of Schedule 2) (
“***
”).
Prudential
will produce the
“Cash and Transferred Assets Schedul
e” to the
Contract
based on
***
|
c.
|
***
|
d.
|
***
. After the close of business on
***
, the
Company
will provide or cause to be provided to
Prudential
***
information in the form of Schedule 4 with respect to
***
(including any
***
) and reflecting all
***
as of such date.
|
e.
|
***
. By written notice to the other party on or before the fifth business day following the
Closing Dat
e, the
Company
or
Prudential
may
***
and the parties will work in good faith for eight business days following the notice date to agree on which, if any,
***
. If the
Company
and
Prudential
agree that
***
within such eight business days, then, on or before the fifteenth business day following the
Closing Dat
e, the
Independent Fiduciary
will irrevocably direct the
Plan Trustee
to pay
Prudential
an amount, in
Cas
h, equal to
***
, and, simultaneously with receipt of such payment from the
Plan Truste
e,
Prudential
will
***
. Simultaneously with such payment and return, the parties will amend the
Contract
to reflect
***
.
If the Company and Prudential cannot resolve any dispute with respect to any *** on or before the
eighth business day following any notice date
, then either party may immediately commence an arbitration dispute.
|
f.
|
Additional Actions with respect to Assets
. The
Independent Fiduciary
will direct the
Plan Trustee
to promptly give or cause to be given all notices that are required, under applicable law and the terms of each
***
in connection with the sale, assignment, transfer and delivery of the
***
on the
Closing Dat
e. The
Independent Fiduciary
will direct the
Plan Trustee
to and
Prudential
will promptly execute, deliver, record or file or cause to be executed, delivered, recorded or filed any and all releases, affidavits, waivers, notices or other documents that the
Plan Trustee
or
Prudential
may reasonably request in order to implement the transfer of the
***
to
Prudentia
l.
|
g.
|
Allocation of Closing Date Transfers
. Upon the
Contract Issuanc
e,
Prudential
will allocate the
Closing Date Transfers
into its insulated separate account.
|
h.
|
Available Assets
. The
Company
will cause the
Plan Trust
to have sufficient
Cash
or other assets (whether by means of a
Cash
contribution or otherwise) to enable the
Plan Trustee
to pay all amounts that it is directed to pay to
Prudential
by the
Independent Fiduciary
pursuant to this
Commitment Agreemen
t.
|
4.
|
Public Announcements and Other Communications
.
|
a.
|
Press Releases
. From the Commitment Agreement Date through the
Closing Dat
e, the
Company
and
Prudential
each may make such public written or oral statements related to the transactions contemplated by this
Commitment Agreement
as it deems necessary or appropriate, in its sole discretion. However, each such party will seek to give the other party (and the
Independent Fiduciar
y, to the extent the statement references the
Independent Fiduciary
or its role, duties or conclusions) a reasonable opportunity to review and comment on such statements in advance to the extent practicable and the party will consider any comments made by such other party in good faith, it being understood that neither the
Company
nor
Prudential
(nor the
Independent Fiduciar
y) will have any right of approval over public statements by the other party, provided that each such party making public statements will accept reasonable requests by the other party (and the
Independent Fiduciar
y) to not include commercially sensitive information in such statements.
|
b.
|
No
Prudential
Communications
. From the Commitment Agreement Date until the issuance of an annuity certificate by
Prudential
to an annuitant, other than as provided for in this
Commitment Agreemen
t, without the
Compan
y’s prior written consent,
(i) Prudential
will cause the employees of its retirement services business unit not to initiate any contact or communication with any participant or beneficiary of the
Plan
in connection with any transactions other than those transactions contemplated by this
Commitment Agreement
and
(ii) Prudential
will not, and will cause all of its affiliates not to, provide any of their respective insurance agents, wholesalers, retailers or other representatives with any contact information of such participants and beneficiaries of the
Plan
obtained from the
Company
or any of its representatives in connection with the transactions contemplated by this
Commitment Agreemen
t, except for those representatives of
Prudential
or any of their respective affiliates who need to know such information for purposes of the transactions contemplated by this
Commitment Agreement
and agree to comply with the requirements of this
Commitment Agreemen
t. However, this paragraph
4.b.
will not restrict employees of
Prudentia
l’s retirement services business unit from contacting any participant or beneficiary of the
Plan
in connection with, or to facilitate,
Prudentia
l’s performance of its obligations under the
Contrac
t, the annuity certificates or this
Commitment Agreemen
t. Until the issuance of an annuity certificate by
Prudential
to an annuitant, other than as provided for in this
Commitment Agreemen
t, if any participant or beneficiary of the
Plan
contacts an employee of
Prudentia
l’s retirement services business unit,
Prudential
and the
Company
will cooperate to coordinate a response to such participant or beneficiary of the
Pla
n.
|
c.
|
SEC
Filings
. If the
Company
concludes that disclosure of this
Commitment Agreement
is required by the rules of the Securities and Exchange Commission (
“
SE
C
”),
(i)
the
Company
and
Prudential
will cooperate to make an application by the
Company
with the
SEC
for confidential treatment of information relating to the pricing of the
Contract
and such other information as the
Company
and
Prudential
mutually conclude is competitively sensitive from the perspective of the
Company
or
Prudential
or otherwise merits
|
5.
|
Welcome Kit and Annuity Certificates
.
|
a.
|
Cooperation
.
Prudentia
l, the
Compan
y, and the
Independent Fiduciary
will cooperate in good faith to agree on communications to be provided prior to the Data Finalization Date to annuitants, including the
Welcome Kit
and the annuity certificates; provided, however, that the annuity certificates shall provide that the annuitant has the right to enforce all provisions of the
Contrac
t, including provisions with respect to such annuitant’s annuity payments under the
Contrac
t, solely against
Prudential
and against no other person including the
Pla
n, the
Compan
y, or any affiliate thereof.
|
b.
|
Welcome Ki
t
. On or before
***
,
Prudential
will mail a welcome kit to annuitants (the
“
Welcome Ki
t
”).
Prudential
will send a preliminary draft of the
Welcome Kit
to the
Company
and the
Independent Fiduciary
as soon as practicable and
Prudential
will consider in good faith any comments made by the
Company
or the
Independent Fiduciary
on or before five business days after they receive the preliminary draft of the
Welcome Kit
from
Prudentia
l.
|
c.
|
Annuity Certificates
.
Prudential will use commercially reasonable efforts
to obtain all regulatory approvals that are necessary for the issuance of any annuity certificate.
Prudential
will mail an annuity certificate to each annuitant a minimum of between
***
days following the mailing of the
Welcome Ki
t, subject to receiving regulatory approvals for any such annuity certificate, if needed. To the extent that any changes are made to the forms of annuity certificate or the related benefit terms after the
Compan
y,
Prudential
and the
Independent Fiduciary
have agreed on the forms of annuity certificates to be filed and the related benefit terms, the mailing of an annuity certificate to each applicable annuitant shall be extended by the number of days elapsed since the
Compan
y,
Prudential
and the
Independent Fiduciary
had first agreed on the form of such annuity certificate and the related benefit terms.
|
6.
|
Administration and Transfer
.
|
a.
|
Administrative Transition
. The
Company
will provide or cause to be provided to
Prudential
the information reasonably needed to administer the payments under the
Contract
and will complete or cause to be completed all processes set forth in Schedule 5 required of the
Company,
or to be carried out by any affiliates, representatives, or service providers of the Company or the Plan or Plan Trustee. The
Company
and
Prudential will use commercially reasonable efforts
to take or cause to be taken all actions and do or cause to be done all things necessary to coordinate the takeover by
Prudential
of all administration responsibilities necessary to effectively provide recordkeeping and administration services regarding payments under the
Contract
commencing on
***
. The
Company
will provide
Prudential
with final census data in good order on or before
***
in order for
Prudential
to provide recordkeeping and administration services regarding payments under the
Contract
commencing on
***
. The
Company
and
Prudential
agree to cooperate with each other in the takeover of such recordkeeping and administration
|
b.
|
Transition Services Agreemen
t
. Each of the
Company
and
Prudential will use commercially reasonable efforts
to take all actions and do all things necessary to coordinate and allow for the provision of recordkeeping and administration services regarding payments under any
Transition Services Agreemen
t. Without limiting the generality of the foregoing, the
Company will use commercially reasonable efforts
to assist
Prudential
in reaching agreement with any prospective party to the
Transition Services Agreemen
t, including in connection with the negotiation of the definitive
Transition Services Agreement
in a form reasonably acceptable to
Prudentia
l.
|
c.
|
Call Center and Company Contact
.
Prudential
will maintain, at its cost and expense, a toll-free phone number and/or a website (the
“
Call Cente
r
”) which will be available starting from
***
to annuitants for
annuitants (or any other payee designated in the Contract)
to contact
Prudential
with questions related to the
Contract
and the annuity certificates. For a period of five years following the
Closing Dat
e, the
Company
will maintain, at its cost and expense, a point of contact (the
“
Company Contac
t
”) that will be available from and after the
Closing Date
and to which
Prudential
may refer
annuitants (or any other payee designated in the Contract)
who pose questions related to their
Plan
benefits. In the event that an
annuitant (or any other payee designated in the Contract)
contacts the
Company
with questions related to the
Contract
and the annuity certificates, the
Company
may refer the annuitant or payee to the
Call Cente
r. In the event that an
annuitant (or any other payee designated in the Contract)
contacts
Prudential
with questions related to their
Plan
benefits,
Prudential
may refer the annuitant or payee to the
Company Contac
t.
|
7.
|
***
.
The
Compan
y,
Prudential
and the
Independent Fiduciary
will cooperate in good faith so that
Prudential
can calculate each
***
subject to the following acknowledgements, limitations and conditions:
|
a.
|
True-Up Files
. Twenty business days before the
Interim Post-Closing True-Up Payment Date
and the
Final Post-Closing True-Up Payment Dat
e,
Prudential
will send to the
Compan
y,
***
pursuant to paragraph
2.b.
above (for the
***
), and the Interim True-Up File (for the
***
), reflecting, in each case, any
***
known to Prudential as of the Interim Data Finalization Date (for the
***
) (the
“
Interim True-Up Fil
e
”) and for the period from the Interim Data Finalization Date to the Data Finalization Date (for the
***
) (the
“
Final True-Up Fil
e
”).
|
b.
|
***
and Annuity Exhibit
.
|
i.
|
To the extent that the
Company
discovers or has any
***
and before the
Interim Data Finalization Date
(for the
***
) and after the
Interim Data Finalization Date
and before the
Data Finalization Date
(for the
***
), the
Company
will provide written notice of such
***
as promptly as reasonably practicable to
Prudentia
l.
Prudential
will only be responsible for incorporating
***
into the
***
that have been delivered by the
Company
on or before the applicable date referenced in the prior sentence and, subject to any limitations on incorporating such
***
into the applicable
***
set forth in Schedule 6. Any updates to the data included in the Final True-Up File not known to
Prudential
before the Data Finalization Date will be governed by the
Contrac
t.
|
ii.
|
Ten business days before the applicable
True-Up Dat
e,
Prudential
will deliver to the
Company
the revised annuity exhibit utilizing and consistent with the applicable True-Up File and reflecting any
***
in accordance with Schedule 6. Six business days before the applicable
True-Up Dat
e, the
Company
will respond to
Prudential
with any questions on the revised annuity exhibit.
Prudential
and the
Company
will cooperate in good faith to resolve any discrepancies on or before the fourth business day before the applicable
True-Up Date
and
Prudential
will reflect in the revised annuity exhibit any changes that have been agreed to on or before such fourth business day. The revised annuity exhibit will not include any natural person designated as a payee in the
Contract
for which
Prudential
has not been provided each of the following: (I) name, (II) gender, (III) date of birth and (IV) social security or federal taxpayer identification number.
|
c.
|
***
Calculations
. On or before the applicable
True-Up Dat
e,
Prudential
will send the calculation of the applicable
***
to the
Compan
y.
|
d.
|
***
Payments
. Each applicable
***
will be paid on the applicable
True-Up Date
as follows:
(i)
if the
***
is a positive number, then the
Independent Fiduciary
will irrevocably direct the
Plan Trustee
to pay to
Prudential
an amount, in
Cas
h, equal to the
***
or
(ii)
if the
***
is a negative number, then
Prudential
will pay to the
Plan Trustee
an amount, in
Cas
h, equal to the absolute value of the
***
. Upon payment of each
***
, the
Company
and
Prudential
will amend the
Contract
on the applicable
True-Up Date
to reflect such
***
and payment thereof and the revised annuity exhibit.
|
8.
|
Representations and Warranties
.
|
a.
|
Company
Representations and Warranties
. The
Company
hereby represents and warrants to
Prudential
and the
Independent Fiduciary
as of the Commitment Agreement Date and as of the
Closing Date
that:
|
i.
|
Due Organization, Good Standing and Corporate Power
. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.
The
Company
is duly qualified or licensed to do business and is in good standing in each jurisdiction in which its performance of its obligations in the
Commitment Agreement
and the transactions contemplated hereunder makes such qualification or licensing necessary, except in such jurisdictions where the failure to be in good standing or so qualified or licensed would not be material.
The Company has all requisite power and authority to enter into and carry out its obligations under this Commitment Agreement and to consummate the transactions contemplated to be undertaken by the Company in this Commitment Agreement.
|
ii.
|
Accuracy of Information
. Notwithstanding anything to the contrary in the
Company ND
A, to the
Compan
y’s
knowledg
e, (I) the mortality experience data file provided by or on behalf of the
Company
to
Prudential
identified on Schedule 7 did not contain any misstatements or omissions that were, in the aggregate, material, and (II) the data in respect of benefit amounts, forms of annuities and the census data for date of birth, date of death, state of residence, gender,
plan
indicator, lump-sum indicator or years of service, in each case, with respect to the annuitants or contingent annuitants that was furnished by or on behalf of the
Company
to
Prudentia
l, was not generated using any materially incorrect systematic assumptions or material omissions.
|
iii.
|
Plan
Investments
. There are no commingled investment vehicles that hold
Plan Asset
s, the units of
which are or will be Plan Assets involved in the transactions contemplated by this
|
iv.
|
Compliance with
ERIS
A
. The
Plan Trust
is maintained under and is subject to
ERISA
and, to the
Compan
y’s
knowledg
e, is in compliance with
ERISA
in all material respects. To the
Compan
y’s
knowledg
e, no event has occurred that is reasonably likely to result in the
Plan
losing its status as qualified by the
Code
for preferential tax treatment under
Code
§§ 401(a) and 501(a). All
Plan
amendments necessary to effect the transactions contemplated by this
Commitment Agreement
and all other agreements it contemplates have been duly executed and, to the extent that they require authorization by the
Compan
y, have been, or will be by the
Closing Dat
e, duly authorized and made by the
Compan
y.
|
v.
|
Independent Fiduciar
y
. The
Independent Fiduciary
has been duly appointed as
independent fiduciary
of the
Plan
with respect to the purchase of one or more group annuity contracts to (I) be the sole fiduciary responsible for selecting one or more insurers to provide annuities in accordance and compliance with the
ERISA Requirement
s, (II) determine whether the transactions contemplated by this
Commitment Agreement
and in the
Contract
satisfy
ERIS
A, (III) represent the interests of the
Plan
and its participants and beneficiaries in connection with the negotiation of a
commitment agreement
and, to the extent set forth in the
IF Engagement Lette
r, the terms of any agreements with
Prudentia
l, including the
Contract
and the annuity certificates, (IV) direct the
Plan Trustee
on behalf of the
Plan
to transfer the
Closing Date Transfers
in connection with the consummation of the transactions contemplated by this
Commitment Agreement
and any amounts required pursuant to paragraphs
3.e.
and 7.d. and (V) take all other actions on behalf of the
Plan
necessary to effectuate the foregoing to the extent set forth in the
IF Engagement Lette
r.
|
vi.
|
Plan Trustee is Directed Trustee
. The Plan Trustee
has been duly appointed as the directed trustee of the
Plan Trust
and is obligated to follow the Independent Fiduciary’s directions to effectuate and consummate the transactions contemplated by this Commitment Agreement and the IF Engagement Letter.
|
vii.
|
No Commissions
. No fees, commissions or payments are or will be owed by the
Company
to any individual or entity in connection with the transactions contemplated by this
Commitment Agreement
and all other agreements it contemplates for which any other party, or its respective affiliates or representatives, could be liable.
|
viii.
|
Enforceability
. This Commitment Agreement is duly executed and delivered by the Company, and is a valid and binding obligation of the Company and enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (such exceptions, as applicable to any person, the “
Enforceability Exceptions
”). The execution, delivery and performance of this Commitment Agreement by the Company, and the consummation by the Company of the transactions contemplated to be undertaken by the Company do not, provided that the representations in paragraph 8.b.iii are true and correct in all material respects as of the Closing Date, (1) violate or conflict with any law or order of any governmental authority applicable to the Company, (2) require any governmental approval (3) violate or conflict with any law or order of any governmental authority applicable to any provision of the
Plan and any documents and instruments governing the Plan as contemplated under ERISA § 404(a)(1)(D) (the “
Plan Governing Documents
”) or (4) require any consent of or other action by any person under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit under, any provision of any contract to which the Company is a party, except where the occurrence of any of the foregoing would not have a material adverse effect on the Company’s ability to consummate the transactions contemplated by this Commitment Agreement. The execution, delivery and performance of this Commitment Agreement by the Company, and the consummation by the Company and the Independent Fiduciary of the transactions contemplated to be undertaken by the Company and the Independent Fiduciary do not violate or conflict with the Plan Governing Documents, except where the occurrence of any of the foregoing would not have a material adverse effect on the Company’s ability to consummate the transactions contemplated by this Commitment Agreement.
|
b.
|
Independent Fiduciary Representations and Warranties
. The Independent Fiduciary hereby represents and warrants to the Company and Prudential as of the Commitment Agreement Date and the Closing Date that:
|
i.
|
Due Organization, Good Standing and Corporate Power
. The Independent Fiduciary is a trust company duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts.
The
Independent Fiduciary
is duly qualified or licensed to do business and is in good standing in each jurisdiction in which its performance of its obligations in the
Commitment Agreement
and the transactions contemplated hereunder makes such qualification or licensing necessary, except in such jurisdictions where the failure to be in good standing or so qualified or licensed would not be material.
The Independent Fiduciary has all requisite power and authority to enter into and carry out its obligations under this Commitment Agreement and to consummate the transactions contemplated to be undertaken by the Independent Fiduciary in this Commitment Agreement.
|
ii.
|
Independent Fiduciary Compliance with ERISA
.
|
1.
|
The Independent Fiduciary meets the requirements of, and in the transactions contemplated by this Commitment Agreement is acting as, an “investment manager” under
|
2.
|
The Independent Fiduciary has accepted, and has not rescinded or terminated, its designation as the sole fiduciary of the Plan with authority to select one or more insurers to issue one or more group annuity contracts in the IF Engagement Letter (a true and correct copy of which has been provided to Prudential, except that the fees to be paid to Independent Fiduciary have been redacted), and the Independent Fiduciary reaffirms its fiduciary status as set forth in the IF Engagement Letter.
|
3.
|
The Independent Fiduciary has accepted, and has not rescinded or terminated, appointment as independent fiduciary of the Plan to (i) be the sole fiduciary responsible for selecting one or more insurers to provide annuities in accordance and compliance with the ERISA Requirements, (ii) determine whether the transactions contemplated by this Commitment Agreement and in the Contract satisfy ERISA, (iii) represent the interests of the Plan and its participants and beneficiaries in connection with the negotiation of a commitment agreement and the terms of any agreements with Prudential, including the Contract and the annuity certificates, (iv) direct the Plan Trustee on behalf of the Plan to transfer the Closing Date Transfers in connection with the consummation of the transactions contemplated by this Commitment Agreement and any amounts required pursuant to paragraphs 3.e. and 7.d. and (v) take all other actions on behalf of the Plan necessary to effectuate the foregoing to the extent set forth in the IF Engagement Letter.
|
4.
|
The Independent Fiduciary is fully qualified and has the requisite expertise together with its reliance on its consultant, AON Hewitt Investment Consulting, Inc. and its counsel, K&L Gates LLP, to serve as an independent fiduciary in connection with the transactions contemplated by this Commitment Agreement, and it is independent of the Company and Prudential within the meaning of 29 C.F.R. § 2570.31(j).
|
iii.
|
ERISA Related Determinations
.
|
1.
|
The Independent Fiduciary has selected Prudential to issue the Contract as set forth in this Commitment Agreement and such selection, the transactions contemplated by this Commitment Agreement, the Transition Services Agreement and the Contract (including its terms) each satisfies the ERISA Requirements.
|
2.
|
If an Independent Fiduciary MAC has not occurred between the Commitment Agreement Date and the Closing Date or, if an Independent Fiduciary MAC has occurred but is not continuing on the Closing Date, the selection of Prudential to provide the Contract, the terms of the Contract and the Plan’s use of assets for the purchase of the Contract as contemplated by this Commitment Agreement will satisfy the ERISA Requirements as of the Closing Date.
|
3.
|
The transactions contemplated by this Commitment Agreement and the purchase of the Contract do not result in a Non-Exempt Prohibited Transaction, provided that the
|
4.
|
The Plan Trust (I) will receive no less than “adequate consideration” for the Transferred Assets and (II) will pay no more than “adequate consideration” for the Contract, in each case within the meaning of “adequate consideration” under ERISA § 408(b)(17)(B) and Code § 4975(f)(10).
|
iv.
|
No Commissions
. No fees, commissions or payments are or will be owed by the Independent Fiduciary to any individual or entity in connection with the transactions contemplated by this Commitment Agreement and all other agreements it contemplates for which any other party, or its respective affiliates or representatives, could be liable.
|
v.
|
Enforceability
. This Commitment Agreement is duly executed and delivered by the Independent Fiduciary, and is a valid and binding obligation of the Independent Fiduciary and enforceable against the Independent Fiduciary in accordance with its terms, subject to the Enforceability Exceptions. The execution, delivery and performance of this Commitment Agreement by the Independent Fiduciary, and the consummation by the Independent Fiduciary of the transactions contemplated to be undertaken by the Independent Fiduciary do not (1) violate or conflict with the certificates or articles of incorporation, bylaws, code of regulations, or the comparable governing documents of the Independent Fiduciary, (2) violate or conflict with any law or order of any governmental authority applicable to the Independent Fiduciary, (3) require any governmental approval, (4) violate or conflict with any law or order of any governmental authority applicable to any provision of the
Plan Governing Documents or (5) require any consent of or other action by any person.
|
c.
|
Prudential Representations and Warranties
. Prudential hereby represents and warrants to the Company and the Independent Fiduciary as of the Commitment Agreement Date and as of the Closing Date that:
|
i.
|
Due Organization, Good Standing and Corporate Power
.
Prudential
is a life insurance
compan
y, duly organized, validly existing and in good standing under the laws of the State of New Jersey.
Prudential
is duly qualified or licensed to do business and is in good standing in each jurisdiction in which its performance of its obligations in the
Commitment Agreement
and the transactions contemplated hereunder makes such qualification or licensing necessary, except in such jurisdictions where the failure to be in good standing or so qualified or licensed would not be material.
Prudential
has all requisite power and authority to enter into and carry out its obligations under this
Commitment Agreement
and to consummate the transactions contemplated to be undertaken by
Prudential
in this
Commitment Agreemen
t.
|
ii.
|
Compliance with Laws
. The business of insurance conducted by Prudential has been and is being conducted in material compliance with applicable laws.
|
iii.
|
Relationship to the
Pla
n
.
Prudential is not (1) a trustee of the Plan (other than a non-discretionary trustee who does not render investment advice with respect to any assets of the Plan), (2) a plan administrator (within the meaning of ERISA § 3(16)(A) or (3) an employer any of whose employees are covered by the Plan
. Schedule 8 sets forth a true and complete list of
(I) Prudential and Prudential’s
affiliates that are investment managers within the meaning of
ERISA
§ 3(38) and (II) without duplication of clause
(I
),
Prudential
and
Prudentia
l’s affiliates that are
|
iv.
|
No Post-Closing Liability
. Following the
Closin
g, the
Plan
and the
Company
and their respective affiliates and representatives will not have any liability to pay any annuity payment under the
Contrac
t.
|
v.
|
RBC Ratio
. As of the Commitment Agreement Date, to
Prudentia
l’s
knowledge
no
***
has occurred and is continuing that would be expected to cause
Prudentia
l’s most recent
*** RBC Ratio
to
***
.
|
vi.
|
Market Sophistication
.
Prudential
is a sophisticated investor with experience in the purchase of publicly traded debt of the type to be included in the
Transferred Asset
s.
|
vii.
|
No Commissions
. No fees, commissions or payments are or will be owed by
Prudential
to any individual or entity in connection with the transactions contemplated in this
Commitment Agreement
and all other agreements it contemplates for which any other party, or its respective affiliates or representatives, could be liable.
|
viii.
|
Enforceability
. This Commitment Agreement is duly executed and delivered by Prudential, and is a valid and binding obligation of Prudential and enforceable against Prudential in accordance with its terms, subject to the Enforceability Exceptions. The execution, delivery and performance of this Commitment Agreement by Prudential, and the consummation by Prudential of the transactions contemplated to be undertaken by Prudential do not (1) violate or conflict with any provision of its certificates or articles of incorporation, bylaws, code of regulations, or the comparable governing documents, (2) except for the filings and approvals of state insurance governmental authorities in the states listed on Schedule 9, violate or conflict with any law or order of any governmental authority applicable to Prudential, or (3) require any consent of or other action by any person under, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit under, any provision of any contract to which Prudential is a party, except where the occurrence of any of the foregoing would not have a material adverse effect on Prudential’s ability to consummate the transactions contemplated by this Commitment Agreement. No filing or approval is required to issue the annuity certificates in accordance with the Contract, other than any filing made or approval received as of the date of this Commitment Agreement and filings with and approvals of state insurance governmental authorities in the states listed on Schedule 9.
|
ix.
|
The Contract
. The Contract, when executed contemporaneously with the completion of the Closing Date Transfers, will be duly executed and delivered by Prudential and will be a valid and binding obligation of Prudential and enforceable against Prudential by the contract-holder, and each annuitant, contingent annuitant and beneficiary in accordance with its terms, subject to the Enforceability Exceptions. No governmental approval is required for Prudential to issue the Contract. After contract-holder ceases to exist, or notifies Prudential that it will cease to perform its obligations under the Contract, the Contract will remain a valid and binding obligation of Prudential
|
9.
|
Conditions to Closing
.
The parties’ obligations to consummate the transactions contemplated by this Commitment Agreement in connection with the Closing, including the Independent Fiduciary’s obligation to direct the Plan Trustee to consummate transactions contemplated by this Commitment Agreement, are subject to satisfaction or, other than the condition set forth in paragraph 9.a. which cannot be waived, waiver of the following conditions as follows: the Company’s obligations are subject to the conditions set forth in paragraphs 9.a., 9.d. and 9.e., Prudential’s obligations are subject to the conditions set forth in paragraphs 9.b., 9.c., 9.d. and 9.e. and the Independent Fiduciary’s obligations are subject to the conditions set forth in paragraphs 9.a. and 9.d:
|
a.
|
The Independent Fiduciary will have confirmed that the transactions contemplated by this Commitment Agreement continue to satisfy the ERISA Requirements because an Independent Fiduciary MAC has not occurred or, if an Independent Fiduciary MAC has occurred, it is not continuing on the Closing Date,
|
b.
|
The Company has delivered or caused to be delivered the Annuity Exhibit File, *** and the delivery pursuant to paragraph 3.d.,
|
c.
|
The Company shall have executed and delivered the Transition Services Agreement in a form that is reasonably acceptable to Prudential,
|
d.
|
No order, decision, injunction (preliminary or otherwise) or judgment entered, issued, made or rendered by any governmental authority will be in effect that prohibits consummation of any of the transactions contemplated by this Commitment Agreement and no action initiated against any party hereto or the Plan or any of its fiduciaries by a governmental authority that seeks to enjoin the consummation of the transactions contemplated by this Commitment Agreement or that otherwise asserts the transactions contemplated by this Commitment Agreement violate applicable law will have been filed or commenced and then be pending, and
|
e.
|
Prudential shall have received approval from The State of New Jersey Department of Banking and Insurance with respect to the Plan of Operations.
|
10.
|
Termination
.
|
a.
|
Termination
. This Commitment Agreement may be terminated at any time before the Closing by the Company or Prudential:
|
i.
|
if the Closing has not occurred by or on *** (the “
Outside Date
”),
provided
that such right to terminate this Commitment Agreement will not be available to a party to this Commitment
|
ii.
|
if the other party has materially breached its obligations with respect to this Commitment Agreement and not cured the breach within 30 days after written notice by the non-breaching party (without limiting any other rights of the non-breaching party); or
|
iii.
|
by mutual agreement between the Company and Prudential.
|
b.
|
Effect of Termination and Survival
. If this Commitment Agreement is terminated pursuant to this paragraph 10, all rights and obligations of the parties under this Commitment Agreement will terminate upon such termination and will become null and void, except that paragraph 11 (Definitions), paragraph 12 (Miscellaneous) and this paragraph 10.a. (Effect of Termination and Survival) will survive any such termination and no party will otherwise have any liability to any other party under this Commitment Agreement. However, nothing in this paragraph 10.a. will relieve any party from liability for any fraud or willful and material breach of this Commitment Agreement.
|
11.
|
Definitions
.
For purposes of this
Commitment Agreemen
t, the following defined terms will have the following meanings:
|
a.
|
“
Accrued Interes
t
” means
***
.
|
b.
|
***
|
c.
|
“***”
is defined in Schedule 3.
|
d.
|
“***
|
e.
|
“
Base Fil
e
” means the data file
as of ***, as was sent to Prudential via the Mercer Pension Exchange Link at ***
|
f.
|
“
Base Premium Amount
” means $***.
|
g.
|
“***” means ***.
|
h.
|
“
Cas
h
” means a wire transfer, through the Federal Reserve System, of currency of the United States of America.
|
i.
|
“
Code
” means the Internal Revenue Code of 1986 and the applicable Treasury Regulations issued thereunder.
|
j.
|
“***” is defined in Schedule 6.
|
k.
|
“
Data Finalization Date
” has the meaning ascribed to such term in the Contract.
|
l.
|
“***”
.
|
m.
|
“
ERIS
A
” means
Employee Retirement Income Security Act of 197
4, as amended, and any federal agency regulations promulgated thereunder that are currently in effect and applicable.
|
n.
|
“
ERISA Requirement
s
” means all of the applicable requirements of
ERISA
and applicable guidance promulgated thereunder, including Interpretive Bulletin 95-1.
|
o.
|
“
Fair Market Valu
e
” means the
***
in an amount equal to the
***
as indicated (i) by the primary pricing source set forth in the table below that corresponds to the applicable asset class of such
***
, (ii) if such primary pricing source is not available or no fair market value is indicated by such primary pricing source for such
***
, by the secondary pricing source set forth in the table below that corresponds to the applicable asset class of such
***
, or (iii) if neither such primary nor secondary pricing source is available
|
***
|
***
|
***
|
***
|
|||
***
|
***
|
***
|
***
|
|
||
***
|
***
|
***
|
***
|
|
||
***
|
***
|
***
|
***
|
|
||
***
|
***
|
***
|
***
|
|
||
***
|
***
|
***
|
***
|
|
p.
|
“
***
”
is defined in and calculated pursuant to the *** of the Workbook.
|
q.
|
“***” means ***.
|
r.
|
“***
.
|
s.
|
“
IF Engagement Lette
r
” means the engagement letter, dated July 1, 2016, by and between the WestRock Company Retirement
Plan
Investment Committee and the
Independent Fiduciar
y.
|
t.
|
“
Independent Fiduciary MAC
” means (i) the occurrence of a material adverse change, as determined in the Independent Fiduciary’s sole discretion, in or directly affecting Prudential after the Commitment Agreement Date that would cause the selection of Prudential and the purchase of the Contract to fail to satisfy ERISA Requirements, or (ii) the occurrence of a change in ERISA Requirements after the Commitment Agreement Date that would cause the selection of Prudential and the Plan’s purchase of the Contract to fail to satisfy ERISA Requirements.
|
u.
|
***
|
v.
|
***
|
w.
|
“
Interim Data Finalization Date
” means 20 business days before the Interim Post-Closing True-Up Payment Date.
|
x.
|
“***” is defined in and calculated pursuant to the *** of the Workbook.
|
y.
|
“
Interim Post-Closing True-Up Payment Date
” means
***.
|
z.
|
“
knowledg
e
” means actual
knowledge
after making appropriate inquiry.
|
aa.
|
“
Lie
n
” means any lien, mortgage, security interest, pledge, deposit, encumbrance, restrictive covenant or other similar restriction.
|
ab.
|
“***.
|
ac.
|
“Non-Exempt Prohibited Transactio
n
” means a transaction prohibited by
ERISA
§ 406 or
Code
§ 4975, for which no statutory exemption or U.S. Department of Labor class exemption is available.
|
ad.
|
“
Permitted Lien
s
” means:
|
i.
|
any
Liens
created by operation of law in respect of restrictions on transfer of securities (other than restrictions relating to the transfer of a
Transferred Asset
on the
Closing Date
in violation of applicable law); or
|
ii.
|
with respect to any
Transferred Asse
t, any transfer restrictions or other limitations on assignment, transfer or the alienability of rights under any indenture, debenture or other similar governing
|
ae.
|
“
Plan Asset
” means an asset of the Plan within the meaning of ERISA.
|
af.
|
“
Plan of Operation
s
” means the Essentials of Method of Operations and Constraints for the WestRock Company Portfolio Protected Buy-Out Separate Account.
|
ag.
|
“
Plan Trust
” means WestRock Company Master Retirement Trust.
|
ah.
|
“
Plan Trustee
” means The Northern Trust Company, in its capacity as the directed trustee of the Plan Trust, and any successor thereto.
|
ai.
|
“***
RBC Rati
o
” means, as of a day of determination,
***
by
Prudential
in its sole discretion of the
***
of
Prudential
as of
***
, which will be calculated in a manner consistent with
***
utilizing the same formula as the National Association of Insurance Commissioners (
“
NAI
C
”), as well as any prescribed or permitted practices approved by the applicable state regulator(s) and changes adopted or expected to be adopted by the
NAI
C.
|
aj.
|
“***.
|
ak.
|
“***
.
|
al.
|
“
Schedule 2 Asse
t
” means each asset listed from time to time on Schedule 2, including
***
.
|
am.
|
“***
.
|
an.
|
“
Transferred Asse
t
” means each
***
transferred pursuant to paragraph
3
and received by
Prudentia
l. Until valid title to an
***
has transferred to
Prudentia
l, such asset is not a
Transferred Asse
t.
|
ao.
|
“***
|
ap.
|
“
Transferred Asset Valuatio
n
” means the sum of the
***
for each
Transferred Asse
t.
|
aq.
|
“
Transition Services Agreemen
t
” means the agreement, substantially in the form of Schedule 10, to be entered into between
Prudential
and the
Company
to provide for the payments due under the
Contract
from
***
.
|
ar.
|
“
True-Up Dat
e
” means the
Interim Post-Closing True-Up Payment Date
or the
Final Post-Closing True-Up Payment Dat
e, as applicable.
|
as.
|
“***
|
12.
|
Miscellaneous
.
The parties each hereby acknowledge that they jointly and equally participated in the drafting of this
Commitment Agreement
and all other agreements it contemplates, and no presumption will be made that any provision of this
Commitment Agreement
will be construed against any party by reason of such role in the drafting of this
Commitment Agreement
or any other agreement contemplated hereby. The
Schedules
to this
Commitment Agreement
are incorporated by reference and made a part of this
Commitment Agreement
as if set forth fully in this
Commitment Agreemen
t.
|
WESTROCK COMPANY
|
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
|
By: __
/s/ John Stakel
________________________
|
By: _____
/s/ Margaret G. McDonald
_________
|
Print Name: _
John Stakel
_____________________
|
Print Name: ___
Margaret McDonald
________
|
Title: ___
SVP and Treasurer
__________________
|
Title: ______
SVP, Prudential Retirement
______
|
STATE STREET BANK AND TRUST COMPANY, acting solely in its capacity as Independent Fiduciary of the Plan
|
|
By: _______
/s/ Denise Sisk
______________
|
|
Print Name: _
Denise Sisk
________________
|
|
Title: ______
Managing Director
___________
|
|
ARTICLE I.
|
THE ADVANCES 3
|
Section 1.1.
|
Credit Facility 3
|
Section 1.2.
|
Increases 4
|
Section 1.3.
|
Decreases 5
|
Section 1.4.
|
Deemed Collections; Borrowing Limit 5
|
Section 1.5.
|
Payment Requirements 6
|
Section 1.6.
|
Advances; Ratable Loans; Funding Mechanics; Liquidity Fundings 6
|
ARTICLE II.
|
PAYMENTS AND COLLECTIONS 7
|
Section 2.1.
|
Payments 7
|
Section 2.2.
|
Collections Prior to Amortization 7
|
Section 2.3.
|
Collections Following Amortization 8
|
Section 2.4.
|
Payment Rescission 9
|
ARTICLE III.
|
CONDUIT FUNDING 9
|
Section 3.1.
|
CP Costs 9
|
Section 3.2.
|
Calculation of CP Costs 9
|
Section 3.3.
|
CP Costs Payments 9
|
Section 3.4.
|
Default Rate 9
|
ARTICLE IV.
|
COMMITTED LENDER FUNDING 9
|
Section 4.1.
|
Committed Lender Funding 9
|
Section 4.2.
|
Interest Payments 10
|
Section 4.3.
|
Selection and Continuation of Interest Periods 10
|
Section 4.4.
|
Committed Lender Interest Rates 10
|
Section 4.5.
|
Suspension of the Adjusted Federal Funds Rate and LIBO Rate 11
|
Section 4.6.
|
Default Rate 11
|
ARTICLE V.
|
REPRESENTATIONS AND WARRANTIES 11
|
Section 5.1.
|
Representations and Warranties of the Loan Parties 11
|
Section 5.2.
|
Certain Committed Lender Representations and Warranties 16
|
ARTICLE VI.
|
CONDITIONS OF ADVANCES 16
|
Section 6.1.
|
Conditions Precedent to Initial Advance 16
|
Section 6.2.
|
Conditions Precedent to All Advances 17
|
ARTICLE VII.
|
COVENANTS 17
|
Section 7.1.
|
Affirmative Covenants of the Loan Parties 17
|
Section 7.2.
|
Negative Covenants of the Loan Parties 27
|
ARTICLE VIII.
|
ADMINISTRATION AND COLLECTION 28
|
Section 8.1.
|
Designation of Servicer 28
|
Section 8.2.
|
Duties of Servicer 29
|
Section 8.3.
|
Collection Notices 30
|
Section 8.4.
|
Responsibilities of Borrower 31
|
Section 8.5.
|
Monthly Reports 31
|
Section 8.6.
|
Servicing Fee 31
|
ARTICLE IX.
|
AMORTIZATION EVENTS 31
|
Section 9.1.
|
Amortization Events 31
|
Section 9.2.
|
Remedies 34
|
ARTICLE X.
|
INDEMNIFICATION 34
|
Section 10.1.
|
Indemnities by the Loan Parties 34
|
Section 10.2.
|
Increased Cost and Reduced Return 38
|
Section 10.3.
|
Other Costs and Expenses 39
|
ARTICLE XI.
|
THE AGENTS 39
|
Section 11.1.
|
Authorization and Action 39
|
Section 11.2.
|
Delegation of Duties 40
|
Section 11.3.
|
Exculpatory Provisions 40
|
Section 11.4.
|
Reliance by Agents 41
|
Section 11.5.
|
Non-Reliance on Other Agents and Other Lenders 41
|
Section 11.6.
|
Reimbursement and Indemnification 42
|
Section 11.7.
|
Agents in their Individual Capacities 42
|
Section 11.8.
|
Conflict Waivers 42
|
Section 11.9.
|
UCC Filings 42
|
Section 11.10.
|
Successor Administrative Agent 43
|
ARTICLE XII.
|
ASSIGNMENTS; PARTICIPATIONS; REMOVAL 43
|
Section 12.1.
|
Assignments 43
|
Section 12.2.
|
Participations 44
|
Section 12.3.
|
Register 45
|
Section 12.4
|
Federal Reserve 45
|
ARTICLE XIII.
|
SECURITY INTEREST 45
|
Section 13.1.
|
Grant of Security Interest 45
|
Section 13.2.
|
Termination after Final Payout Date 45
|
ARTICLE XIV.
|
MISCELLANEOUS 46
|
Section 14.1.
|
Waivers and Amendments 46
|
Section 14.2.
|
Notices 47
|
Section 14.3.
|
Ratable Payments 47
|
Section 14.4.
|
Protection of Administrative Agent’s Security Interest 48
|
Section 14.5.
|
Confidentiality 48
|
Section 14.6.
|
Bankruptcy Petition 49
|
Section 14.7.
|
Limitation of Liability 49
|
Section 14.8.
|
CHOICE OF LAW 50
|
Section 14.9.
|
CONSENT TO JURISDICTION 50
|
Section 14.10.
|
WAIVER OF JURY TRIAL 50
|
Section 14.11.
|
Integration; Binding Effect; Survival of Terms 51
|
Section 14.12.
|
Counterparts; Severability; Section References 51
|
Section 14.13.
|
Release of Certain Defaulted Receivables 51
|
Section 14.14.
|
Patriot Act Notice 51
|
Section 14.15.
|
Acknowledgement and Consent to Bail-In of EEA Financial Institutions 51
|
Section 14.16.
|
Release of Excluded Receivables 51
|
Section 14.17.
|
Lender Consent 51
|
Exhibit I
|
Definitions
|
Exhibit II-A
|
Form of Borrowing Notice
|
Exhibit II-B
|
Form of Reduction Notice
|
Exhibit III-A
|
Places of Business of the Loan Parties and the Performance Guarantor; Locations of Records; Federal Employer Identification Number(s)
|
Exhibit IV
|
Form of Compliance Certificate
|
Exhibit V
|
Form of Assignment Agreement
|
Exhibit VI
|
Form of Monthly Report
|
Exhibit VII
|
Form of Performance Undertaking
|
Schedule A
|
Commitments
|
Schedule B
|
Closing Documents
|
Schedule C
|
Lender Supplement
|
E-mail:
|
naconduit@rabobank.com
|
E-mail:
|
naconduit@rabobank.com
|
Address:
|
Rabobank, New York Branch
|
Email:
|
tmteam@rabobank.com
|
Attention:
|
Transaction Management Team
|
Facsimile:
|
(914) 304-9324
|
Confirmation:
|
(212) 808-6806
|
Address:
|
Nieuw Amsterdam Receivables Corporation B.V.
Prins Bemhardplein 200 1097 JB Amsterdam The Netherlands |
Attention:
|
The Directors
|
Email:
|
securitisation@intertrustgroup.com
|
Facsimile:
|
+31 (0) 20 5214888
|
Confirmation:
|
+31 (0) 20 5214777
|
Address:
|
Rabobank, New York Branch
|
Email:
|
naconduit@rabobank.com
|
Attention:
|
NYSG
|
Facsimile:
|
(914) 304-9324
|
Confirmation:
|
(212) 808-6816
|
Email:
|
ddeangelis@gssnyc.com
|
Attention:
|
Securitization Group
|
Email:
|
securitization_reporting@us.mufg.jp
|
Attn:
|
Securitization Group / David Krafchik
|
Phone:
|
(212) 282-4998
|
Attn:
|
Securitization Group / David Krafchik
|
Phone:
|
(212) 282-4998
|
Attn:
|
Securitization Group / David Krafchik
|
Phone:
|
(212) 282-4998
|
Attn:
|
Securitization Group / David Krafchik
|
Phone:
|
(212) 282-4998
|
Short Term Rating
(S&P/Moody’s)
|
Long Term Rating
(S&P/Moody’s)
|
Maximum
Allowable % of Eligible Receivables
|
A-1+/P-1
|
Aaa to Aa2/AAA to AA
|
10.0%
|
A-1/P-1
|
Aa3 to A2/AA- to A
|
8.0%
|
A-2/P-2
|
A3 to Baa1/A- to BBB+
|
5.0%
|
A-3/P-3
|
Baa2 to Baa3/BBB to BBB-
|
4.0%
|
Below A-3/P3 or Not Rated
|
Below Baa3/BBB- or Not Rated
|
2.5%
|
Calendar Month
|
Volume Rebate Reserve Percentage
|
January
|
82%
|
February
|
69%
|
March
|
65%
|
April
|
78%
|
May
|
70%
|
June
|
77%
|
July
|
76%
|
August
|
72%
|
September
|
56%
|
October
|
73%
|
November
|
73%
|
December
|
61%
|
WESTROCK COMPANY
SIGNIFICANT SUBSIDIARIES OF WESTROCK COMPANY
as of September 30, 2016
|
|
|
|
Name
|
State or Jurisdiction of Incorporation
|
|
|
0993264 B.C. Unlimited Liability Co
|
British Columbia, Canada
|
Eagle Limited S. de R.L. de C.V.
|
Mexico
|
MeadWestvaco Holdings S.A.R.L.
|
France
|
MWV Canada Operations Company
|
Canada
|
MWV International Holdings S.a.r.l.
|
Luxembourg
|
MWV Luxembourg, S.a.r.l.
|
Luxembourg
|
Rigesa Celulose, Papel E Embalagens Ltda.
|
Brazil
|
Stone Global Inc.
|
Delaware
|
WestRock - Solvay, LLC
|
Delaware
|
WestRock - Southern Container, LLC
|
Delaware
|
WestRock Canada Holdings Inc.
|
Georgia
|
WestRock Coated Board, LLC
|
Alabama
|
WestRock Company
|
Delaware
|
WestRock Company of Canada Holdings Corp.
|
Nova Scotia, Canada
|
WestRock Company of Canada Inc.
|
Quebec, Canada
|
WestRock Converting Company
|
Georgia
|
WestRock CP, LLC
|
Delaware
|
WestRock Holdings B.V.
|
The Netherlands
|
WestRock Land and Development Holdings, Inc.
|
Delaware
|
WestRock Luxembourg S.A.R.L.
|
Luxembourg
|
WestRock Mill Company, LLC
|
Georgia
|
WestRock MWV, LLC
|
Delaware
|
WestRock Packaging Systems Germany GmbH
|
Germany
|
WestRock RKT Company
|
Georgia
|
WestRock Services, Inc.
|
Georgia
|
WestRock Virginia Corporation
|
Delaware
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Registration Statement (Form S-8 No. 333-205564) pertaining to the MeadWestvaco Corporation Savings and Employee Stock Ownership Plan for Bargained Hourly Employees, MeadWestvaco Corporation 2005 Performance Incentive Plan, as Amended and Restated, MeadWestvaco Corporation Compensation Plan for Non-Employee Directors, MeadWestvaco Corporation Deferred Income Plan, MeadWestvaco Corporation 1996 Stock Option Plan, RockTenn Amended and Restated 2004 Incentive Stock Plan, RockTenn 2004 Incentive Stock Plan, RockTenn (SSCC) Equity Incentive Plan and RockTenn Supplemental Retirement Savings Plan, and
|
(2)
|
Registration Statement (Form S-8 No. 333-209343) pertaining to WestRock Company 2016 Incentive Stock Plan and the WestRock Company Employee Stock Purchase Plan;
|
1.
|
I have reviewed this Annual Report on Form 10-K of WestRock Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 23, 2016
|
/s/ Steven C. Voorhees
|
|
|
|
|
|
Steven C. Voorhees
|
|
|
|
|
Chief Executive Officer and President
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of WestRock Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
November 23, 2016
|
/s/ Ward H. Dickson
|
|
|
|
|
|
Ward H. Dickson
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
/s/ Steven C. Voorhees
|
Steven C. Voorhees
|
Chief Executive Officer and President
|
November 23, 2016
|
/s/ Ward H. Dickson
|
Ward H. Dickson
|
Executive Vice President and Chief Financial Officer
|
November 23, 2016
|