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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Graphic Packaging Holding Company | NYSE:GPK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-1.00 | -3.28% | 29.50 | 30.345 | 29.91 | 30.26 | 4,861,916 | 00:06:48 |
|
þ
|
QUARTERLY 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
|
26-0405422
|
(State or other jurisdiction of
|
(I.R.S. employer
|
incorporation or organization)
|
identification no.)
|
|
|
1500 Riveredge Parkway, Suite 100
|
|
Atlanta, Georgia
|
30328
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Smaller reporting company
o
|
|||
|
|
||||
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Emerging growth company
o
|
|
EX-31.1
|
|
EX-31.2
|
|
EX-32.1
|
|
EX-32.2
|
|
XBRL Content
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions, except per share amounts
|
2019
|
|
2018
|
||||
Net Sales
|
$
|
1,505.9
|
|
|
$
|
1,477.4
|
|
Cost of Sales
|
1,239.8
|
|
|
1,253.5
|
|
||
Selling, General and Administrative
|
124.7
|
|
|
122.7
|
|
||
Other Expense, Net
|
1.2
|
|
|
0.9
|
|
||
Business Combinations, Gain on Sale of Assets and Shutdown and Other Special Charges, Net
|
6.2
|
|
|
26.3
|
|
||
Income from Operations
|
134.0
|
|
|
74.0
|
|
||
Nonoperating Pension and Postretirement Benefit (Expense) Income
|
(0.1
|
)
|
|
4.2
|
|
||
Interest Expense, Net
|
(35.0
|
)
|
|
(28.8
|
)
|
||
Loss on Modification or Extinguishment of Debt
|
—
|
|
|
(1.9
|
)
|
||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
98.9
|
|
|
47.5
|
|
||
Income Tax Expense
|
(21.0
|
)
|
|
(5.1
|
)
|
||
Income before Equity Income of Unconsolidated Entity
|
77.9
|
|
|
42.4
|
|
||
Equity Income of Unconsolidated Entity
|
0.2
|
|
|
0.3
|
|
||
Net Income
|
78.1
|
|
|
42.7
|
|
||
Net Income Attributable to Noncontrolling Interest
|
(20.2
|
)
|
|
(12.8
|
)
|
||
Net Income Attributable to Graphic Packaging Holding Company
|
$
|
57.9
|
|
|
$
|
29.9
|
|
|
|
|
|
||||
Net Income Per Share Attributable to Graphic Packaging Holding Company — Basic
|
$
|
0.19
|
|
|
$
|
0.10
|
|
Net Income Per Share Attributable to Graphic Packaging Holding Company — Diluted
|
$
|
0.19
|
|
|
$
|
0.10
|
|
Cash Dividends Declared Per Share
|
$
|
0.075
|
|
|
$
|
0.075
|
|
|
Three Months Ended
|
|||||||||||
|
March 31,
|
|||||||||||
In millions
|
2019
|
|||||||||||
|
Graphic Packaging Holding Company
|
Noncontrolling Interest
|
Redeemable Noncontrolling Interest
|
Total
|
||||||||
Net Income
|
$
|
57.9
|
|
$
|
15.6
|
|
$
|
4.6
|
|
$
|
78.1
|
|
Other Comprehensive (Loss) Income, Net of Tax:
|
|
|
|
|
||||||||
Derivative Instruments
|
(0.4
|
)
|
(0.1
|
)
|
—
|
|
(0.5
|
)
|
||||
Pension and Postretirement Benefit Plans
|
1.2
|
|
0.2
|
|
0.1
|
|
1.5
|
|
||||
Currency Translation Adjustment
|
3.9
|
|
0.9
|
|
0.2
|
|
5.0
|
|
||||
Total Other Comprehensive Income, Net of Tax
|
4.7
|
|
1.0
|
|
0.3
|
|
6.0
|
|
||||
Total Comprehensive Income
|
$
|
62.6
|
|
$
|
16.6
|
|
$
|
4.9
|
|
$
|
84.1
|
|
|
Three Months Ended
|
|||||||||||
|
March 31,
|
|||||||||||
In millions
|
2018
|
|||||||||||
|
Graphic Packaging Holding Company
|
Noncontrolling Interest
|
Redeemable Noncontrolling Interest
|
Total
|
||||||||
Net Income
|
$
|
29.9
|
|
$
|
9.9
|
|
$
|
2.9
|
|
$
|
42.7
|
|
Other Comprehensive (Loss) Income, Net of Tax:
|
|
|
|
|
||||||||
Derivative Instruments
|
(0.6
|
)
|
(0.2
|
)
|
—
|
|
(0.8
|
)
|
||||
Pension and Postretirement Benefit Plans
|
0.5
|
|
0.1
|
|
0.1
|
|
0.7
|
|
||||
Currency Translation Adjustment
|
16.0
|
|
3.2
|
|
0.9
|
|
20.1
|
|
||||
Total Other Comprehensive Income, Net of Tax
|
15.9
|
|
3.1
|
|
1.0
|
|
20.0
|
|
||||
Total Comprehensive Income
|
$
|
45.8
|
|
$
|
13.0
|
|
$
|
3.9
|
|
$
|
62.7
|
|
In millions, except share and per share amounts
|
March 31,
2019 |
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
||||
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
62.3
|
|
|
$
|
70.5
|
|
Receivables, Net
|
647.9
|
|
|
572.9
|
|
||
Inventories, Net
|
1,072.0
|
|
|
1,014.4
|
|
||
Other Current Assets
|
54.7
|
|
|
106.0
|
|
||
Total Current Assets
|
1,836.9
|
|
|
1,763.8
|
|
||
Property, Plant and Equipment, Net
|
3,204.8
|
|
|
3,239.7
|
|
||
Goodwill
|
1,468.0
|
|
|
1,460.6
|
|
||
Intangible Assets, Net
|
507.8
|
|
|
523.8
|
|
||
Other Assets
|
273.7
|
|
|
71.3
|
|
||
Total Assets
|
$
|
7,291.2
|
|
|
$
|
7,059.2
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Short-Term Debt and Current Portion of Long-Term Debt
|
$
|
49.0
|
|
|
$
|
52.0
|
|
Accounts Payable
|
612.8
|
|
|
711.6
|
|
||
Compensation and Employee Benefits
|
121.3
|
|
|
154.4
|
|
||
Other Accrued Liabilities
|
239.1
|
|
|
254.3
|
|
||
Total Current Liabilities
|
1,022.2
|
|
|
1,172.3
|
|
||
Long-Term Debt
|
3,129.8
|
|
|
2,905.1
|
|
||
Deferred Income Tax Liabilities
|
475.1
|
|
|
462.2
|
|
||
Accrued Pension and Postretirement Benefits
|
108.5
|
|
|
107.5
|
|
||
Other Noncurrent Liabilities
|
264.4
|
|
|
117.8
|
|
||
|
|
|
|
|
|||
Redeemable Noncontrolling Interest (Note 14)
|
285.9
|
|
|
275.8
|
|
||
|
|
|
|
||||
SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Preferred Stock, par value $.01 per share; 100,000,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common Stock, par value $.01 per share; 1,000,000,000 shares authorized; 295,337,812 and 299,891,585 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively
|
2.9
|
|
|
3.0
|
|
||
Capital in Excess of Par Value
|
1,918.1
|
|
|
1,944.4
|
|
||
Retained Earnings
|
13.6
|
|
|
10.0
|
|
||
Accumulated Other Comprehensive Loss
|
(373.2
|
)
|
|
(377.9
|
)
|
||
Total Graphic Packaging Holding Company Shareholders' Equity
|
1,561.4
|
|
|
1,579.5
|
|
||
Noncontrolling Interest
|
443.9
|
|
|
439.0
|
|
||
Total Equity
|
2,005.3
|
|
|
2,018.5
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
7,291.2
|
|
|
$
|
7,059.2
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net Income
|
$
|
78.1
|
|
|
$
|
42.7
|
|
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities:
|
|
|
|
||||
Depreciation and Amortization
|
117.1
|
|
|
109.8
|
|
||
Deferred Income Taxes
|
12.4
|
|
|
(3.1
|
)
|
||
Amount of Postretirement Expense Greater (Less) Than Funding
|
2.4
|
|
|
(1.2
|
)
|
||
Gain on the Sale of Assets
|
—
|
|
|
(1.5
|
)
|
||
Other, Net
|
3.3
|
|
|
8.9
|
|
||
Changes in Operating Assets and Liabilities
|
(385.4
|
)
|
|
(345.7
|
)
|
||
Net Cash Used in Operating Activities
|
(172.1
|
)
|
|
(190.1
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Capital Spending
|
(73.0
|
)
|
|
(88.9
|
)
|
||
Packaging Machinery Spending
|
(7.0
|
)
|
|
(3.2
|
)
|
||
Acquisition of Businesses, Net of Cash Acquired
|
(2.0
|
)
|
|
(3.5
|
)
|
||
Beneficial Interest on Sold Receivables
|
279.5
|
|
|
282.6
|
|
||
Beneficial Interest Obtained in Exchange for Proceeds
|
(153.3
|
)
|
|
(138.0
|
)
|
||
Other, Net
|
(1.0
|
)
|
|
(2.3
|
)
|
||
Net Cash Provided by Investing Activities
|
43.2
|
|
|
46.7
|
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Repurchase of Common Stock
|
(60.0
|
)
|
|
—
|
|
||
Payments on Debt
|
(9.1
|
)
|
|
(125.0
|
)
|
||
Borrowings under Revolving Credit Facilities
|
775.2
|
|
|
610.9
|
|
||
Payments on Revolving Credit Facilities
|
(548.9
|
)
|
|
(323.5
|
)
|
||
Repurchase of Common Stock related to Share-Based Payments
|
(4.0
|
)
|
|
(4.0
|
)
|
||
Debt Issuance Costs
|
—
|
|
|
(7.9
|
)
|
||
Dividends and Distributions Paid to GPIP Partner
|
(30.1
|
)
|
|
(23.2
|
)
|
||
Other, Net
|
(2.6
|
)
|
|
—
|
|
||
Net Cash Provided by Financing Activities
|
120.5
|
|
|
127.3
|
|
||
Effect of Exchange Rate Changes on Cash
|
0.2
|
|
|
1.2
|
|
||
Net Decrease in Cash and Cash Equivalents
|
(8.2
|
)
|
|
(14.9
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
70.5
|
|
|
67.4
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
62.3
|
|
|
$
|
52.5
|
|
|
|
|
|
||||
Non-cash Investing Activities:
|
|
|
|
||||
Beneficial Interest (Sold) Obtained in Exchange for Trade Receivables
|
$
|
(142.9
|
)
|
|
$
|
287.5
|
|
Non-cash Investment in NACP Combination
|
—
|
|
|
1,235.7
|
|
||
Non-cash Investing Activities
|
$
|
(142.9
|
)
|
|
$
|
1,523.2
|
|
Non-cash Financing Activities:
|
|
|
|
||||
Non-cash Financing of NACP Combination
|
$
|
—
|
|
|
$
|
660.0
|
|
Non-Cash Financing Activities
|
$
|
—
|
|
|
$
|
660.0
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
Receivables Sold and Derecognized
|
$
|
811.2
|
|
|
$
|
844.8
|
|
Proceeds Collected on Behalf of Financial Institutions
|
504.1
|
|
|
833.7
|
|
||
Net Proceeds Paid to Financial Institutions
|
(28.8
|
)
|
|
(128.7
|
)
|
||
Deferred Purchase Price
(a)
|
4.3
|
|
|
240.4
|
|
||
Pledged Receivables
|
144.2
|
|
|
—
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
Charges Associated with Business Combinations
|
$
|
2.1
|
|
|
$
|
27.0
|
|
Shutdown and Other Special Charges
|
4.1
|
|
|
0.8
|
|
||
Gain on Sale of Assets
|
—
|
|
|
(1.5
|
)
|
||
Total
|
$
|
6.2
|
|
|
$
|
26.3
|
|
In millions
|
March 31,
2019 |
|
December 31, 2018
|
||||
Finished Goods
|
$
|
457.2
|
|
|
$
|
426.9
|
|
Work in Progress
|
104.0
|
|
|
102.2
|
|
||
Raw Materials
|
341.4
|
|
|
319.9
|
|
||
Supplies
|
169.4
|
|
|
165.4
|
|
||
Total
|
$
|
1,072.0
|
|
|
$
|
1,014.4
|
|
In millions
|
March 31, 2019
|
|
December 31, 2018
|
||||
Senior Notes with interest payable semi-annually at 4.125%, effective rate of 4.17%, payable in 2024
|
$
|
300.0
|
|
|
$
|
300.0
|
|
Senior Notes with interest payable semi-annually at 4.875%, effective rate of 4.92%, payable in 2022
|
250.0
|
|
|
250.0
|
|
||
Senior Notes with interest payable semi-annually at 4.75%, effective rate of 4.77%, payable in 2021
|
425.0
|
|
|
425.0
|
|
||
Senior Secured Term Loan Facilities with interest payable at various dates at floating rates (3.93% at March 31, 2019) payable through 2023
|
1,423.5
|
|
|
1,432.6
|
|
||
Senior Secured Revolving Facilities with interest payable at floating rates (3.60% at March 31, 2019) payable in 2023
|
622.8
|
|
|
399.0
|
|
||
Capital Lease and Financing Obligations
|
127.7
|
|
|
122.9
|
|
||
Other
|
31.3
|
|
|
26.5
|
|
||
Total Long-Term Debt
|
3,180.3
|
|
|
2,956.0
|
|
||
Less: Current Portion
|
40.6
|
|
|
40.3
|
|
||
|
3,139.7
|
|
|
2,915.7
|
|
||
Less: Unamortized Deferred Debt Issuance Costs
|
9.9
|
|
|
10.6
|
|
||
Total
|
$
|
3,129.8
|
|
|
$
|
2,905.1
|
|
In millions
|
Total
Commitments
|
|
Total
Outstanding
|
|
Total Available
|
||||||
Senior Secured Domestic Revolving Credit Facility
(a)
|
$
|
1,450.0
|
|
|
$
|
542.0
|
|
|
$
|
884.8
|
|
Senior Secured International Revolving Credit Facility
|
177.4
|
|
|
80.8
|
|
|
96.6
|
|
|||
Other International Facilities
|
66.3
|
|
|
39.7
|
|
|
26.6
|
|
|||
Total
|
$
|
1,693.7
|
|
|
$
|
662.5
|
|
|
$
|
1,008.0
|
|
(a)
|
In accordance with its debt agreements, the Company’s availability under its revolving credit facilities has been reduced by the amount of standby letters of credit issued of
$23.2 million
as of
March 31, 2019
. These letters of credit are primarily used as security against its self-insurance obligations and workers’ compensation obligations. These letters of credit expire at various dates through 2019 unless extended.
|
|
Three Months Ended
|
||
In millions
|
March 31, 2019
|
||
Finance lease costs:
|
|
||
Amortization of right-of-use asset
|
$
|
1.8
|
|
Interest on lease liabilities
|
1.9
|
|
|
Operating lease costs
|
16.0
|
|
|
Short-term lease costs
|
3.6
|
|
|
Variable lease costs
|
1.0
|
|
|
Total lease costs, net
|
$
|
24.3
|
|
|
Three Months Ended
|
||
In millions
|
March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
15.6
|
|
Operating cash flows from finance leases
|
1.8
|
|
|
Financing cash flows from finance leases
|
0.8
|
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
||
Operating leases
|
16.0
|
|
|
Finance leases
|
5.6
|
|
In millions, except lease term and discount rate
|
Balance Sheet Classification
|
March 31, 2019
|
||
Operating Leases:
|
|
|
||
Operating lease right-of-use asset
|
Other Assets
|
$
|
199.7
|
|
Current operating lease liabilities
|
Other Current Liabilities
|
$
|
53.3
|
|
Noncurrent operating lease liabilities
|
Other Noncurrent Liabilities
|
150.1
|
|
|
Total operating lease liabilities
|
|
$
|
203.4
|
|
|
|
|
||
Finance Leases:
|
|
|
||
Property, Plant and Equipment
|
|
$
|
132.2
|
|
Accumulated depreciation
|
|
(6.4
|
)
|
|
Property, Plant and Equipment, net
|
|
$
|
125.8
|
|
Current finance lease liabilities
|
Short-Term Debt and Current Portion of Long-Term Debt
|
4.1
|
|
|
Noncurrent finance lease liabilities
|
Long-Term Debt
|
123.6
|
|
|
Total finance lease liabilities
|
|
$
|
127.7
|
|
|
|
|
||
Weighted Average Remaining Lease Term (Years)
|
|
|
||
Operating leases
|
|
5
|
|
|
Finance leases
|
|
18
|
|
|
|
|
|
||
Weighted Average Discount Rate
|
|
|
||
Operating leases
|
|
4.22
|
%
|
|
Finance leases
|
|
5.54
|
%
|
In millions
|
|
|
||||
Year ending December 31,
|
Operating Leases
|
Finance Leases
|
||||
2019 (excluding the three months ended March 31, 2019)
|
$
|
49.5
|
|
$
|
8.8
|
|
2020
|
54.6
|
|
11.6
|
|
||
2021
|
42.2
|
|
11.7
|
|
||
2022
|
32.2
|
|
11.3
|
|
||
2023
|
25.1
|
|
11.4
|
|
||
Thereafter
|
38.9
|
|
157.0
|
|
||
Total lease payments
|
242.5
|
|
211.8
|
|
||
Less imputed interest
|
(39.1
|
)
|
(84.1
|
)
|
||
Total
|
$
|
203.4
|
|
$
|
127.7
|
|
|
RSUs
|
|
Weighted Average
Grant Date Fair
Value Per Share
|
|||
RSUs — Employees
|
1,992,718
|
|
|
$
|
12.28
|
|
|
Pension Benefits
|
Postretirement Health Care Benefits
|
|||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
March 31,
|
|
March 31,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Components of Net Periodic Cost:
|
|
|
|
|
|
|
|
||||||||
Service Cost
|
$
|
3.3
|
|
|
$
|
4.6
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
Interest Cost
|
11.5
|
|
|
10.5
|
|
|
0.4
|
|
|
0.3
|
|
||||
Administrative Expenses
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Expected Return on Plan Assets
|
(13.8
|
)
|
|
(16.0
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior Service Cost (Credit)
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||||
Actuarial Loss (Gain)
|
2.5
|
|
|
1.4
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||
Net Periodic Cost (Benefit)
|
$
|
3.6
|
|
|
$
|
0.7
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
Start
|
End
|
(In Millions)
Notional Amount |
Weighted Average Interest Rate
|
|
04/03/2018
|
01/01/2020
|
$150.0
|
|
2.25%
|
04/03/2018
|
10/01/2020
|
$150.0
|
|
2.36%
|
12/03/2018
|
01/01/2022
|
$120.0
|
|
2.92%
|
12/03/2018
|
01/04/2022
|
$80.0
|
|
2.79%
|
|
Derivative Assets
|
Derivative Liabilities
|
||||||||||
|
March 31,
|
December 31,
|
March 31,
|
December 31,
|
||||||||
In millions
|
2019
|
2018
|
2019
|
2018
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
0.4
|
|
$
|
0.8
|
|
$
|
4.3
|
|
$
|
2.7
|
|
Foreign currency contracts
|
0.6
|
|
—
|
|
0.1
|
|
0.5
|
|
||||
Commodity contracts
|
0.9
|
|
—
|
|
—
|
|
0.2
|
|
||||
Total Derivatives
|
$
|
1.9
|
|
$
|
0.8
|
|
$
|
4.4
|
|
$
|
3.4
|
|
|
Amount of Loss (Gain) Recognized in Accumulated Other Comprehensive Loss
|
Location in Statement of Operations
|
Amount of Loss (Gain) Recognized in Statement of Operations
|
||||||||||
|
Three Months Ended March 31,
|
Three Months Ended March 31,
|
|||||||||||
In millions
|
2019
|
2018
|
2019
|
2018
|
|||||||||
Commodity Contracts
|
$
|
(0.9
|
)
|
$
|
(0.6
|
)
|
Cost of Sales
|
$
|
0.1
|
|
$
|
(0.2
|
)
|
Foreign Currency Contracts
|
(1.1
|
)
|
2.1
|
|
Other Expense, Net
|
(0.7
|
)
|
0.4
|
|
||||
Interest Rate Swap Agreements
|
2.0
|
|
(0.7
|
)
|
Interest Expense, Net
|
—
|
|
(0.3
|
)
|
||||
Total
|
$
|
—
|
|
$
|
0.8
|
|
|
$
|
(0.6
|
)
|
$
|
(0.1
|
)
|
|
|
Three Months Ended March 31,
|
|||||
In millions
|
|
2019
|
2018
|
||||
Foreign Currency Contracts
|
Other Expense, Net
|
$
|
(0.1
|
)
|
$
|
(1.0
|
)
|
In millions
|
|
||
Balance at December 31, 2018
|
$
|
(1.9
|
)
|
Reclassification to Earnings
|
(0.6
|
)
|
|
Current Period Change in Fair Value
|
—
|
|
|
Balance at March 31, 2019
|
$
|
(2.5
|
)
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
NET SALES:
|
|
|
|
||||
Paperboard Mills
|
$
|
275.5
|
|
|
$
|
278.4
|
|
Americas Paperboard Packaging
|
1,022.8
|
|
|
990.8
|
|
||
Europe Paperboard Packaging
|
173.8
|
|
|
174.6
|
|
||
Corporate/Other/Eliminations
(a)
|
33.8
|
|
|
33.6
|
|
||
Total
|
$
|
1,505.9
|
|
|
$
|
1,477.4
|
|
|
|
|
|
||||
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||
Paperboard Mills
|
$
|
(4.0
|
)
|
|
$
|
(6.7
|
)
|
Americas Paperboard Packaging
|
125.6
|
|
|
112.0
|
|
||
Europe Paperboard Packaging
|
19.2
|
|
|
14.7
|
|
||
Corporate and Other
(b)
|
(6.8
|
)
|
|
(46.0
|
)
|
||
Total
|
$
|
134.0
|
|
|
$
|
74.0
|
|
|
|
|
|
||||
DEPRECIATION AND AMORTIZATION:
|
|
|
|
||||
Paperboard Mills
|
$
|
56.2
|
|
|
$
|
51.5
|
|
Americas Paperboard Packaging
|
43.7
|
|
|
41.0
|
|
||
Europe Paperboard Packaging
|
11.8
|
|
|
12.5
|
|
||
Corporate and Other
|
5.4
|
|
|
4.8
|
|
||
Total
|
$
|
117.1
|
|
|
$
|
109.8
|
|
(a)
|
Includes Revenue from contracts with customers for the Australia and Pacific Rim operating segments, which is
no
t material.
|
(b)
|
Includes expenses related to business combinations, gain on sale of assets and shutdown and other special charges.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions, except per share data
|
2019
|
|
2018
|
||||
Net Income Attributable to Graphic Packaging Holding Company
|
$
|
57.9
|
|
|
$
|
29.9
|
|
Weighted Average Shares:
|
|
|
|
||||
Basic
|
297.5
|
|
|
310.6
|
|
||
Dilutive Effect of RSUs
|
0.7
|
|
|
0.7
|
|
||
Diluted
|
298.2
|
|
|
311.3
|
|
||
Income Per Share — Basic
|
$
|
0.19
|
|
|
$
|
0.10
|
|
Income Per Share — Diluted
|
$
|
0.19
|
|
|
$
|
0.10
|
|
In millions
|
|
||
Balance at December 31, 2018
|
$
|
275.8
|
|
Net Income Attributable to Redeemable Noncontrolling Interest
|
4.6
|
|
|
Other Comprehensive Loss, Net of Tax
|
0.3
|
|
|
Reclassification to Redeemable Noncontrolling Interest for Share Repurchases
(a)
|
6.7
|
|
|
Distributions of Membership Interest
|
(1.5
|
)
|
|
Balance at March 31, 2019
|
$
|
285.9
|
|
In millions
|
Derivatives Instruments
|
|
Pension and Postretirement Benefit Plans
|
|
Currency Translation Adjustments
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
(11.3
|
)
|
|
$
|
(246.1
|
)
|
|
$
|
(120.5
|
)
|
|
$
|
(377.9
|
)
|
Other Comprehensive Income before Reclassifications
|
—
|
|
|
—
|
|
|
5.0
|
|
|
5.0
|
|
||||
Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income
(b)
|
(0.5
|
)
|
|
1.5
|
|
|
—
|
|
|
1.0
|
|
||||
Net Current-period Other Comprehensive (Loss) Income
|
(0.5
|
)
|
|
1.5
|
|
|
5.0
|
|
|
6.0
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Net Current-period Other Comprehensive (Income) Loss Attributable to Noncontrolling Interest
(c)
|
0.1
|
|
|
(0.3
|
)
|
|
(1.1
|
)
|
|
(1.3
|
)
|
||||
Balance at March 31, 2019
|
$
|
(11.7
|
)
|
|
$
|
(244.9
|
)
|
|
$
|
(116.6
|
)
|
|
$
|
(373.2
|
)
|
In millions
|
|
|
|
|
||
Details about Accumulated Other Comprehensive Income Components
|
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Statement Where Net Income is Presented
|
||
Derivatives Instruments:
|
|
|
|
|
||
Commodity Contracts
|
|
$
|
0.1
|
|
|
Cost of Sales
|
Foreign Currency Contracts
|
|
(0.7
|
)
|
|
Other Expense, Net
|
|
Interest Rate Swap Agreements
|
|
—
|
|
|
Interest Income, Net
|
|
|
|
(0.6
|
)
|
|
Total before Tax
|
|
|
|
0.1
|
|
|
Tax Expense
|
|
|
|
$
|
(0.5
|
)
|
|
Net of Tax
|
|
|
|
|
|
||
Amortization of Defined Benefit Pension Plans:
|
|
|
|
|
||
Prior Service Costs
|
|
$
|
—
|
|
(a)
|
|
Actuarial Losses
|
|
2.5
|
|
(a)
|
|
|
|
|
2.5
|
|
|
Total before Tax
|
|
|
|
(0.5
|
)
|
|
Tax Benefit
|
|
|
|
$
|
2.0
|
|
|
Net of Tax
|
|
|
|
|
|
||
Amortization of Postretirement Benefit Plans:
|
|
|
|
|
||
Prior Service Credits
|
|
$
|
(0.1
|
)
|
(a)
|
|
Actuarial Gains
|
|
(0.5
|
)
|
(a)
|
|
|
|
|
(0.6
|
)
|
|
Total before Tax
|
|
|
|
0.1
|
|
|
Tax Expense
|
|
|
|
$
|
(0.5
|
)
|
|
Net of Tax
|
|
|
|
|
|
||
Total Reclassifications for the Period
|
|
$
|
1.0
|
|
|
|
(a)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see “
Note 7 — Pensions and Other Postretirement Benefits
").
|
Ø
|
Overview of Business
|
Ø
|
Overview of 2019 Results
|
Ø
|
Results of Operations
|
Ø
|
Financial Condition, Liquidity and Capital Resources
|
Ø
|
Critical Accounting Policies
|
Ø
|
New Accounting Standards
|
Ø
|
Business Outlook
|
•
|
Net Sales
for the
three months ended
March 31, 2019
,
increased
$28.5 million
or
1.9%
to
$1,505.9 million
from
$1,477.4 million
for the
three months ended
March 31, 2018
, due to the 2018 Acquisitions discussed below and higher selling prices, partially offset by unfavorable foreign currency exchange rates and lower volumes for open market and converting.
|
•
|
Income from Operations
for the
three months ended
March 31, 2019
increased
$60.0 million
or
81.1%
to
$134.0 million
from
$74.0 million
for the
three months ended
March 31, 2018
due to the higher selling prices and cost savings through continuous improvement and other programs, partially offset by higher inflation and unfavorable foreign currency exchange rates.
|
•
|
On September 30, 2018, the Company acquired substantially all the assets of the foodservice business of Letica Corporation, a subsidiary of RPC Group PLC ("Letica Foodservice"), a producer of paperboard-based cold and hot cups and cartons. The acquisition included two facilities located in Clarksville, Tennessee and Pittston, Pennsylvania.
|
•
|
On June 12, 2018, the Company acquired substantially all the assets of PFP, LLC and its related entity, PFP Dallas Converting, LLC (collectively, "PFP"), a converter focused on the production of paperboard-based air filter frames. The acquisition included two facilities located in Lebanon, Tennessee and Lancaster, Texas. PFP and Letica Foodservice are referred to collectively as the "2018 Acquisitions."
|
•
|
On February 21, 2019, the Company's board of directors declared a regular quarterly dividend of
$0.075
per share of common stock paid on April 5, 2019 to shareholders of record as of March 15, 2019.
|
•
|
On January 28, 2019 the Company's board of directors authorized an additional share repurchase program to allow the Company to purchase up to
$500 million
of the Company's issued and outstanding shares of common stock through open market purchases, privately negotiated transactions and Rule 10b5-1 plans (the "2019 share repurchase program"). The previous
$250 million
share repurchase program was authorized on January 10, 2017 (the "2017 share repurchase program"). During the first three months of 2019, the Company repurchased
5,033,426
shares of its common stock at an average price of
$11.82
, all under the 2017 share repurchase program. The Company did not repurchase any shares of its common stock during the three months ended March 31, 2018. As of March 31, 2019, the Company has approximately
$531 million
available for additional repurchases under the 2019 share repurchase program and the 2017 share repurchase program.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
Net Sales
|
$
|
1,505.9
|
|
|
$
|
1,477.4
|
|
Income from Operations
|
134.0
|
|
|
74.0
|
|
||
Nonoperating Pension and Postretirement Benefit (Expense) Income
|
(0.1
|
)
|
|
4.2
|
|
||
Interest Expense, Net
|
(35.0
|
)
|
|
(28.8
|
)
|
||
Loss on Modification or Extinguishment of Debt
|
—
|
|
|
(1.9
|
)
|
||
Income before Income Taxes and Equity Income of Unconsolidated Entity
|
98.9
|
|
|
47.5
|
|
||
Income Tax Expense
|
(21.0
|
)
|
|
(5.1
|
)
|
||
Income before Equity Income of Unconsolidated Entity
|
77.9
|
|
|
42.4
|
|
||
Equity Income of Unconsolidated Entity
|
0.2
|
|
|
0.3
|
|
||
Net Income
|
$
|
78.1
|
|
|
$
|
42.7
|
|
|
Three Months Ended March 31,
|
|||||||||||||
In millions
|
2019
|
|
2018
|
|
Increase
|
|
Percent
Change
|
|||||||
Consolidated
|
$
|
1,505.9
|
|
|
$
|
1,477.4
|
|
|
$
|
28.5
|
|
|
1.9
|
%
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
|
|
Variances
|
|
|
||||||||||||||||||
In millions
|
2018
|
|
Price
|
|
Volume/Mix
|
|
Exchange
|
|
Total
|
|
2019
|
||||||||||||
Consolidated
|
$
|
1,477.4
|
|
|
$
|
32.2
|
|
|
$
|
16.7
|
|
|
$
|
(20.4
|
)
|
|
$
|
28.5
|
|
|
$
|
1,505.9
|
|
|
Three Months Ended March 31,
|
||||||||||||
In millions
|
2019
|
|
2018
|
|
Increase
|
|
Percent
Change
|
||||||
Consolidated
|
$
|
134.0
|
|
|
$
|
74.0
|
|
|
$
|
60.0
|
|
|
81.1%
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||||
|
|
|
Variances
|
|
|
|||||||||||||||||||||||||||
In millions
|
2018
|
|
Price
|
|
Volume/Mix
|
|
|
Inflation
|
|
Exchange
|
|
Other
(a)
|
|
Total
|
|
2019
|
||||||||||||||||
Consolidated
|
$
|
74.0
|
|
|
$
|
32.2
|
|
|
$
|
(5.2
|
)
|
|
|
$
|
(27.2
|
)
|
|
$
|
(3.2
|
)
|
|
$
|
63.4
|
|
|
$
|
60.0
|
|
|
$
|
134.0
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
NET SALES:
|
|
|
|
||||
Paperboard Mills
|
$
|
275.5
|
|
|
$
|
278.4
|
|
Americas Paperboard Packaging
|
1,022.8
|
|
|
990.8
|
|
||
Europe Paperboard Packaging
|
173.8
|
|
|
174.6
|
|
||
Corporate/Other/Eliminations
(a)
|
33.8
|
|
|
33.6
|
|
||
Total
|
$
|
1,505.9
|
|
|
$
|
1,477.4
|
|
|
|
|
|
||||
INCOME (LOSS) FROM OPERATIONS:
|
|
|
|
||||
Paperboard Mills
|
$
|
(4.0
|
)
|
|
$
|
(6.7
|
)
|
Americas Paperboard Packaging
|
125.6
|
|
|
112.0
|
|
||
Europe Paperboard Packaging
|
19.2
|
|
|
14.7
|
|
||
Corporate and Other
(b)
|
(6.8
|
)
|
|
(46.0
|
)
|
||
Total
|
$
|
134.0
|
|
|
$
|
74.0
|
|
(a)
|
Includes Revenue from contracts with customers for the Australia and Pacific Rim operating segments, which is not material.
|
(b)
|
Includes expenses related to business combinations, gain on sale of assets and shutdown and other special charges.
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
Net Cash Used in Operating Activities
|
$
|
(172.1
|
)
|
|
$
|
(190.1
|
)
|
Net Cash Provided by Investing Activities
|
$
|
43.2
|
|
|
$
|
46.7
|
|
Net Cash Provided by Financing Activities
|
$
|
120.5
|
|
|
$
|
127.3
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
In millions
|
2019
|
|
2018
|
||||
Receivables Sold and Derecognized
|
$
|
811.2
|
|
|
$
|
844.8
|
|
Proceeds Collected on Behalf of Financial Institutions
|
504.1
|
|
|
833.7
|
|
||
Net Proceeds Paid to Financial Institutions
|
(28.8
|
)
|
|
(128.7
|
)
|
||
Deferred Purchase Price
(a)
|
4.3
|
|
|
240.4
|
|
||
Pledged Receivables
|
144.2
|
|
|
—
|
|
•
|
Depreciation and amortization expense between $430 million and $440 million, excluding approximately $10 million of pension amortization.
|
•
|
Interest expense of $135 million to $145 million, including approximately $4 million to $5 million of non-cash interest expense associated with amortization of debt issuance costs.
|
•
|
Pension plan contributions of $10 million to $12 million.
|
Period (2019)
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
Per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Program (a)
|
|||||
January 1, through January 31,
|
|
2,679,537
|
|
|
$
|
11.35
|
|
|
35,535,580
|
|
|
4,941,842
|
|
February 1, through February 28,
|
|
570,609
|
|
|
$
|
12.27
|
|
|
36,106,189
|
|
|
4,322,500
|
|
March 1, through March 31,
|
|
1,783,280
|
|
|
$
|
12.37
|
|
|
37,889,469
|
|
|
2,421,472
|
|
Total
|
|
5,033,426
|
|
|
$
|
11.82
|
|
|
|
|
|
Exhibit Number
|
Description
|
|
|
|
|
|
|
10.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
|
|
|
|
101.INS
|
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
(Registrant)
|
|
|
|
|
/s/ STEPHEN R. SCHERGER
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
April 23, 2019
|
Stephen R. Scherger
|
||
|
|
|
/s/ DEBORAH R. FRANK
|
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
|
April 23, 2019
|
Deborah R. Frank
|
1 Year Graphic Packaging Chart |
1 Month Graphic Packaging Chart |
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