Greif's Q2 net income down 10.9% year-over-year to US$35.8M, due to higher selling, general and administrative expenses, illegal occupation of flexible products manufacturing facility in Hadimkoy, Turkey; net sales up 1.1% to US$1.1B

DELAWARE, Ohio , June 4, 2014 (press release) – -- Net sales increased 1.1 percent compared to second quarter 2013
-- Record second quarter operating profit in Paper Packaging segment
-- Quarterly earnings negatively impacted by approximately $20 million due to an illegal occupation of a Turkey manufacturing facility and weather-related conditions
-- EBITDA1 of $116.2 million in second quarter 2014 compared to $122.0 million in second quarter 2013
-- Diluted Class A earnings per share attributable to Greif, Inc. of $0.61 and $1.12 for second quarter and year-to-date 2014, respectively, compared to $0.69 and $1.09 for second quarter and year-to-date 2013
-- As a result of the estimated $34 million full year impact of the illegal occupation and second quarter weather, the Company revises its fiscal 2014 EBITDA1 guidance to $475 million to $505 million and Class A earnings per share guidance to $2.48 to $2.80

Greif, Inc. (NYSE: GEF, GEF.B), a global leader in industrial packaging products and services, today announced results for its second quarter, which ended April 30, 2014:

"Our Paper Packaging segment achieved record second quarter operating profit; however, our quarterly results were adversely impacted by a prolonged, illegal occupation at the Hadimkoy, Turkey flexible products manufacturing facility and severe weather-related conditions that significantly affected two of our business segments," said David B. Fischer, president and chief executive officer. "As a consequence, second quarter financial results were below our expectations; however, specific actions are being implemented companywide to strengthen our business portfolio, including certain non-core asset sales and initiatives to realize cost savings and address underperforming assets. We look forward to stronger performance in the second half of fiscal 2014."

Consolidated Results

Net sales were $1,100.7 million for the second quarter of 2014 compared with $1,088.9 million for the second quarter of 2013. The 1.1 percent increase in net sales was primarily due to the impact of a 2.3 percent increase in selling prices partially offset by a negative 1.0 percent impact from foreign currency translation. The higher selling prices were primarily for rigid industrial packaging products in North America, partially as a result of the pass-through realization of higher raw material costs, and for paper packaging products. Volumes in Europe within the Rigid Industrial Packaging & Services segment were higher than a year ago.

Gross profit was $204.2 million for the second quarter of 2014 compared with $202.6 million for the second quarter of 2013. Improvements in the Rigid Industrial Packaging & Services and Paper Packaging segments were offset by declines in the Flexible Products & Services and Land Management segments. Gross profit margin was 18.6 percent for the second quarters of 2014 and 2013.

SG&A expenses increased 11.1 percent to $135.4 million for the second quarter of 2014 from $121.9 million for the second quarter of 2013 primarily related to higher professional fees, higher amortization expenses related to intangible assets and scalable business platform expenses. SG&A expenses were 12.3 percent of net sales for the second quarter of 2014 compared with 11.2 percent of net sales for the second quarter of 2013.

Restructuring charges were $3.9 million for the second quarter of 2014 and were primarily related to employee separation costs in the Flexible Products & Services segment and footprint rationalization efforts in our Rigid Industrial Packaging & Services segment. Restructuring charges were immaterial for the second quarter of 2013.

Operating profit was $74.6 million for the second quarter of 2014 compared with $83.9 million for the second quarter of 2013. The $9.3 million decrease consisted of an $11.1 million decrease in the Flexible Products & Services segment and a $6.0 million decrease in the Rigid Industrial Packaging & Services segment, partially offset by a $7.0 million increase in the Land Management segment and a $0.8 million increase in the Paper Packaging segment. Factors contributing to the $9.3 million decrease were the negative financial impact of items related to the occupation of a flexible products manufacturing facility and adverse weather-related conditions in two of our business segments. Included in operating profit for the second quarter of 2014 were $4.0 million of net gains from special items(2) . The impact of special items in the second quarter of 2013 was immaterial. Operating profit before special items was $70.6 million for the second quarter of 2014 compared with $83.9 million for the second quarter of 2013.

EBITDA was $116.2 million for the second quarter of 2014 compared with $122.0 million for the second quarter of 2013. The $5.8 million decrease was primarily due to costs incurred due to the occupation of a flexible products manufacturing facility. EBITDA before special items was $112.2 million for the second quarter of 2014 versus $122.0 million for the second quarter of 2013. Depreciation, depletion and amortization expense was $41.9 million for the second quarter of 2014 compared with $38.9 million for the second quarter of 2013.

Cash provided by operating activities was $102.7 million for the second quarter of 2014 compared with $107.8 million for the second quarter of 2013. Free cash flow(3) was $71.3 million for the second quarter of 2014 compared with free cash flow of $85.4 million for the second quarter of 2013. The decrease in free cash flow was due to costs related to the occupation of a flexible products manufacturing facility and higher timberland purchases in the second quarter of 2014 compared with the second quarter of 2013.

Interest expense, net, was $20.4 million for the second quarter of 2014 compared with $21.4 million for the second quarter of 2013. The decrease was the result of lower average interest rates due to refinancing activities in certain countries offset by higher average debt outstanding primarily resulting from two acquisitions completed in the first quarter of 2014.

Income tax expense was $19.5 million for the second quarter of 2014 compared with $19.6 million for the second quarter of 2013. The company's effective tax rate was 36.2 percent for the second quarter of 2014 versus 31.8 percent for the second quarter of 2013. The second quarter 2014 effective tax rate reflects the impact of a shift in global earnings mix to countries with higher tax rates, which was partially offset by a net discrete tax benefit in the amount of $1.0 million related to prior periods. The net discrete tax benefit related to international subsidiaries in Canada ($2.0 million of tax expense) and Brazil ($3.0 million of tax benefit).

Net income attributable to Greif, Inc. was $35.8 million, or $0.61 per diluted Class A share and $0.92 per diluted Class B share, for the second quarter of 2014 versus net income attributable to Greif, Inc. of $40.2 million, or $0.69 per diluted Class A share and $1.03 per diluted Class B share, for the second quarter of 2013.

Segment Results

Rigid Industrial Packaging & Services

Net sales increased 1.4 percent to $784.3 million for the second quarter of 2014 compared with $773.4 million for the second quarter of 2013. The increase in net sales was attributable to product mix, volume improvements in Europe, and a 3.0 percent increase in selling prices, partially attributable to the contractual pass-through of higher resin costs. The impact of foreign currency translation was a negative 1.6 percent compared with the second quarter of 2013.

Gross profit was $144.0 million for the second quarter of 2014 compared with $136.7 million for the second quarter of 2013. Gross profit margin increased to 18.4 percent for the second quarter of 2014 from 17.7 percent for the second quarter of 2013. The increase was partially due to product mix.

Operating profit was $47.2 million for the second quarter of 2014 compared with $53.2 million for the second quarter of 2013. The $6.0 million decrease was due to higher than planned selling, general and administrative costs associated with increased professional fees, amortization of intangible assets and adverse weather-related conditions in North America and Latin America. Operating profit before special items was $48.3 million for the second quarter of 2014 versus $53.0 million for the second quarter of 2013.

Restructuring charges for the second quarter of 2014 were $0.8 million related to the consolidation of certain Europe, Asia Pacific and Latin America operations. Restructuring charges for the second quarter of 2013 were immaterial.

EBITDA was $78.0 million for the second quarter of 2014 compared with $80.9 million for the second quarter of 2013. This decrease was due to the same factors that impacted the decrease in operating profit. EBITDA before special items was $79.1 million for the second quarter of 2014 compared with $80.7 million for the second quarter of 2013. Depreciation, depletion and amortization expense was $29.3 million for the second quarter of 2014 compared with $26.6 million for the second quarter of 2013.

Paper Packaging

Net sales increased 5.4 percent to $205.0 million for the second quarter of 2014 compared with $194.5 million for the second quarter of 2013. The increase was attributable to higher selling prices partially realized as a result of the pass-through of a previous containerboard price increase and increasing sales of specialty products, partially offset by the impact of adverse weather-related conditions.

Gross profit increased 4.9 percent to $43.1 million for the second quarter of 2014 from $41.1 million for the second quarter of 2013 as a result of the same factors that impacted the segment's net sales. Gross profit margin decreased slightly to 21.0 percent for the second quarter of 2014 from 21.1 percent for the second quarter of 2013.

Second quarter operating profit and operating profit before special items increased 3.1 percent to a second quarter record of $26.5 million compared with $25.7 million for the second quarter of 2013 due to higher selling prices partially offset by higher energy, input and logistic costs associated with adverse weather related conditions.

EBITDA and EBITDA before special items were $33.8 million for the second quarter of 2014 compared with $32.3 million for the second quarter of 2013. This increase was due to the same factors that impacted the segment's operating profit. Depreciation, depletion and amortization expense was $8.1 million for the second quarter of 2014 compared with $7.4 million for the second quarter of 2013.

Flexible Products & Services

Net sales decreased 6.3 percent to $105.3 million for the second quarter of 2014 compared with $112.4 million for the second quarter of 2013. The decrease in net sales was attributable to selling price decreases of 5.6 percent and volume decreases of 1.7 percent due to lost sales as a result of the occupation of a manufacturing facility in Turkey and product mix. The impact of foreign currency translation was a positive 1.0 percent compared with the second quarter of 2013.

Gross profit was $14.8 million for the second quarter of 2014 compared with $20.6 million for the second quarter of 2013. Gross profit margin decreased to 14.1 percent for the second quarter of 2014 from 18.3 percent for the second quarter of 2013 primarily due to the occupation of a manufacturing facility in Turkey, which resulted in higher costs incurred to find alternative supply sources to satisfy customers and idle facility costs.

Operating loss was $10.3 million for the second quarter of 2014 compared with an operating profit of $0.8 million for the second quarter of 2013 due to incremental security costs for certain facilities, unplanned costs to service customers and the impact of lost sales. Operating loss before special items was $7.2 million for the second quarter of 2014 compared with an operating profit of $1.0 million for the second quarter of 2013.

EBITDA was negative $7.6 million for the second quarter of 2014 compared with $3.4 million for the second quarter of 2013. This decrease was due to the same factors that impacted the segment's operating profit. EBITDA before special items was negative $4.5 million for the second quarter of 2014 compared with $3.6 million for the second quarter of 2013. Depreciation, depletion and amortization expense was $3.7 million for the second quarters of 2014 and 2013.

Land Management

Net sales decreased 29.1 percent to $6.1 million for the second quarter of 2014 compared with $8.6 million for the second quarter of 2013. The decrease was due to lower planned sales of timber in the second quarter of 2014.

Operating profit increased to $11.2 million for the second quarter of 2014 from $4.2 million for the second quarter of 2013 primarily due to an $8.2 million gain on the disposal of timberland in the third and fourth phases of an approximately $90 million multi-phase sales contract. The company anticipates closing the final phase of this contract by the first quarter of 2015 and estimates a gain of approximately $22 to $24 million on that sale. Operating profit before special items was $3.0 million for the second quarter of 2014 compared with $4.2 million for the second quarter of 2013. The $1.2 million decrease was primarily due to lower planned sales of timber. Special use property disposals included in operating profit were $1.2 million for the second quarter of 2014 compared with $0.5 million for the second quarter of 2013.

EBITDA was $12.0 million for the second quarter of 2014 compared with $5.4 million for the second quarter of 2013. This increase was primarily due to the same factors that impacted operating profit. EBITDA before special items was $3.8 million for the second quarter of 2014 compared with $5.4 million for the second quarter of 2013 due to lower planned sales of timber. Depreciation, depletion and amortization expense was $0.8 million for the second quarter of 2014 compared with $1.2 million for the second quarter of 2013.

Other Financial Information

Long-term debt was $1,300.8 million at April 30, 2014 compared with $1,207.2 million at Oct. 31, 2013 and $1,269.4 million at April 30, 2013. The increase was partially attributable to two acquisitions completed in the first quarter of 2014.

Capital expenditures were $27.5 million for the second quarter of 2014 compared with $27.0 million for second quarter of 2013. There were $25.7 million in timberland purchases for the second quarter of 2014 compared with $0.5 million for the second quarter of 2013. Depreciation, depletion and amortization expense was $41.9 million for the second quarter of 2014 compared with $38.9 million for the second quarter of 2013.

On June 3, 2014, the Board of Directors declared quarterly cash dividends of $0.42 per share of Class A Common Stock and $0.63 per share of Class B Common Stock. These dividends are payable on July 1, 2014, to stockholders of record at close of business on June 20, 2014.

Company Outlook

The slow motion global economic recovery is anticipated to continue during the remainder of fiscal 2014, resulting in moderate sales volume improvement and slightly higher raw material costs in certain regions. The Rigid Industrial Packaging segment is anticipated to benefit from moderate volume growth, especially in Europe, and Greif Business System cost savings. Specific actions will be implemented in the Flexible Products segment during the second half of 2014 as this business is repositioned for sustainable growth and profitability. Additionally, the Company is pursuing the sale of select non-core assets and plans to accelerate restructuring actions. Based on these factors, including anticipated gains from the sale of select non-core assets, fiscal 2014 EBITDA guidance is $475 million to $505 million and Class A earnings per share guidance is $2.48 to $2.80. This guidance excludes scheduled timberland gains of approximately $20 million or $0.20 per Class A share. In the future, the Company's outlook will be based on Class A earnings per share.

 
 
Selected Financial Highlights 
 
(Dollars in millions, 
except per share amounts)      Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
Selected financial 
highlights                      2014      2013(4)     2014    2013(4) 
---------------------------   ---------  ---------  --------  -------- 
Net sales                      $1,100.7   $1,088.9  $2,135.1  $2,097.5 
Operating profit                   74.6       83.9     146.6     147.9 
Operating profit before 
 special items                     70.6       83.9     137.0     149.7 
EBITDA                            116.2      122.0     222.7     222.4 
EBITDA before special items       112.2      122.0     213.1     224.2 
Cash provided by operating 
 activities                       102.7      107.8      39.9      39.0 
Net income attributable to 
 Greif, Inc.                       35.8       40.2      65.3      63.8 
Diluted Class A earnings per 
 share attributable to 
 Greif, Inc.                      $0.61      $0.69     $1.12     $1.09 
 
Special items included in 
 the amounts above 
---------------------------- 
Restructuring charges            ($3.9)       $0.1    ($6.5)    ($1.2) 
Acquisition-related costs         (0.3)      (0.1)     (0.8)     (0.6) 
Debt extinguishment charges           -          -         -     (1.3) 
Timberland gains                    8.2          -      16.9         - 
                              ---------  ---------  --------  -------- 
  Total special items               4.0          -       9.6     (3.1) 
                              =========  =========  ========  ======== 
  Total special items, net 
   of tax                           2.5          -       6.2     (2.0) 
                              =========  =========  ========  ======== 
  Impact of total special 
   items, net of tax, on 
   diluted Class A earnings 
   per share attributable to 
   Greif, Inc.                    $0.04          -     $0.11   ($0.03) 
                              =========  =========  ========  ======== 
 
 
 
                           April 30, 2014  October 31, 2013 
                           --------------  ---------------- 
Working capital(5)                 $363.6            $292.3 
Net working capital(5)              276.2             214.2 
Long-term debt                    1,300.8           1,207.2 
Net debt(6)                       1,298.8           1,203.2 
 
 

Conference Call

The company will host a conference call to discuss the second quarter of 2014 results on June 5, 2014, at 10 a.m. Eastern Time (ET). To participate, domestic callers should call 877-485-3107 and ask for the Greif conference call. The number for international callers is +1 201-689-8427. Phone lines will open at 9:50 a.m. ET. The conference call will also be available through a live webcast, including slides, which can be accessed at www.greif.com in the Investor Center/Conference Calls. A replay of the conference call will be available on the company's website approximately one hour following the call.

About Greif

Greif is a world leader in industrial packaging products and services. The company produces steel, plastic, fibre, flexible, corrugated and multiwall containers and containerboard, and provides reconditioning, blending, filling and packaging services for a wide range of industries. Greif also manages timber properties in North America. The company is strategically positioned in more than 50 countries to serve global as well as regional customers. Additional information is on the company's website at www.greif.com.

Forward-Looking Statements

All statements, other than statements of historical facts, included in this news release, including without limitation statements regarding our future financial position, business strategy, budgets, projected costs, goals and plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may, " "will," "expect," "intend," "estimate," "anticipate," "project," "believe," "continue," "on track" or "target" or the negative thereof or variations thereon or similar terminology. All forward-looking statements made in this news release are based on information currently available to management. Although we believe that the expectations reflected in forward-looking statements have a reasonable basis, we can give no assurance that these expectations will prove to be correct. Forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. Such risks and uncertainties that might cause a difference include, but are not limited to, the following: (i) the current and future challenging global economy may adversely affect our business, (ii) historically, our business has been sensitive to changes in general economic or business conditions, (iii) our operations are subject to currency exchange and political risks that could adversely affect our results of operations, (iv) the continuing consolidation of our customer base and suppliers may intensify pricing pressure, (v) we operate in highly competitive industries, (vi) our business is sensitive to changes in industry demands, (vii) raw material and energy price fluctuations and shortages may adversely impact our manufacturing operations and costs, (viii) we may encounter difficulties arising from acquisitions, (ix) we may incur additional restructuring costs and there is no guarantee that our efforts to reduce costs will be successful, (x) tax legislation initiatives or challenges to our tax positions may adversely impact our results or condition, (xi) several operations are conducted by joint ventures that we cannot operate solely for our benefit, (xii) our ability to attract, develop and retain talented and qualified employees, managers and executives is critical to our success, (xiii) our business may be adversely impacted by work stoppages and other labor relations matters, (xiv) we may be subject to losses that might not be covered in whole or in part by existing insurance reserves or insurance coverage, (xv) our business depends on the uninterrupted operations of our facilities, systems and business functions, including our information technology and other business systems, (xvi) legislation/regulation related to climate change and environmental and health and safety matters and corporate social responsibility could negatively impact our operations and financial performance, (xvii) product liability claims and other legal proceedings could adversely affect our operations and financial performance, (xviii) we may incur fines or penalties, damage to our reputation or other adverse consequences if our employees, agents or business partners violate, or are alleged to have violated, anti-bribery, competition or other laws, (xix) changing climate conditions may adversely affect our operations and financial performance, (xx) the frequency and volume of our timber and timberland sales will impact our financial performance, (xxi) changes in U.S. generally accepted accounting principles and SEC rules and regulations could materially impact our reported results, and (xxii) if the company fails to maintain an effective system of internal control, the company may not be able to accurately report financial results or prevent fraud. Changes in business results may impact our book tax rates. The risks described above are not all-inclusive, and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. For a detailed discussion of the most significant risks and uncertainties that could cause our actual results to differ materially from those projected, see "Risk Factors" in Part I, Item 1A of our Form 10-K for the year ended Oct. 31, 2013 and our other filings with the Securities and Exchange Commission. All forward-looking statements made in this news release are expressly qualified in their entirety by reference to such risk factors. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
 
               GREIF, INC. AND SUBSIDIARY COMPANIES 
                CONSOLIDATED STATEMENTS OF INCOME 
                            UNAUDITED 
    (Dollars and shares in millions, except per share amounts) 
 
                           Three months ended    Six months ended 
                               April 30,            April 30, 
                          --------------------  ------------------ 
                            2014      2013(7)     2014    2013(7) 
                          ---------  ---------  --------  -------- 
 
Net sales                  $1,100.7   $1,088.9  $2,135.1  $2,097.5 
Cost of products sold         896.5      886.3   1,744.3   1,708.2 
                          ---------  ---------  --------  -------- 
  Gross profit                204.2      202.6     390.8     389.3 
 
Selling, general and 
 administrative 
 expenses                     135.4      121.9     256.9     244.5 
Restructuring charges           3.9      (0.1)       6.5       1.2 
Timberland gains              (8.2)          -    (16.9)         - 
Gain on disposal of 
 properties, plants and 
 equipment, net               (1.5)      (3.1)     (2.3)     (4.3) 
                          ---------  ---------  --------  -------- 
  Operating profit             74.6       83.9     146.6     147.9 
 
Interest expense, net          20.4       21.4      40.8      43.0 
Debt extinguishment 
 charges                          -          -         -       1.3 
Other expense, net              0.3        0.8       4.9       3.9 
                          ---------  ---------  --------  -------- 
  Income before income 
   tax expense and 
   equity earnings of 
   unconsolidated 
   affiliates, net             53.9       61.7     100.9      99.7 
 
Income tax expense             19.5       19.6      36.0      32.8 
Equity earnings of 
 unconsolidated 
 affiliates, net of tax         0.1        0.2       0.2       0.3 
                          ---------  ---------  --------  -------- 
  Net income                   34.5       42.3      65.1      67.2 
Net (income) loss 
 attributable to 
 noncontrolling 
 interests                      1.3      (2.1)       0.2     (3.4) 
                          ---------  ---------  --------  -------- 
  Net income 
   attributable to 
   Greif, Inc.                $35.8      $40.2     $65.3     $63.8 
                          =========  =========  ========  ======== 
 
Basic earnings per share attributable to Greif, Inc. common 
shareholders: 
Class A Common Stock          $0.61      $0.69     $1.12     $1.09 
Class B Common Stock          $0.92      $1.03     $1.67     $1.63 
 
Diluted earnings per share attributable to Greif, Inc. common 
shareholders: 
Class A Common Stock          $0.61      $0.69     $1.12     $1.09 
Class B Common Stock          $0.92      $1.03     $1.67     $1.63 
 
Shares used to calculate basic earnings per share attributable to 
Greif, Inc. common shareholders: 
Class A Common Stock           25.5       25.4      25.5      25.4 
Class B Common Stock           22.1       22.1      22.1      22.1 
 
Shares used to calculate diluted earnings per share attributable 
to Greif, Inc. common shareholders: 
Class A Common Stock           25.6       25.4      25.5      25.4 
Class B Common Stock           22.1       22.1      22.1      22.1 
 
 
 
 
                   GREIF, INC. AND SUBSIDIARY COMPANIES 
                  CONDENSED CONSOLIDATED BALANCE SHEETS 
                                UNAUDITED 
                          (Dollars in millions) 
 
                                          April 30, 2014  October 31, 2013 
                                          --------------  ---------------- 
ASSETS 
 
CURRENT ASSETS 
Cash and cash equivalents                          $87.4             $78.1 
Trade accounts receivable                          489.2             481.9 
Inventories                                        407.1             375.3 
Current portion related party notes 
 receivable                                          2.4               2.8 
Other current assets                               183.4             155.9 
                                          --------------  ---------------- 
                                                 1,169.5           1,094.0 
                                          --------------  ---------------- 
 
LONG-TERM ASSETS 
Goodwill                                         1,028.0           1,003.5 
Intangible assets                                  188.6             180.8 
Related party note receivable                       11.7              12.6 
Assets held by special purpose entities             50.9              50.9 
Other long-term assets                             152.5             142.1 
                                          --------------  ---------------- 
                                                 1,431.7           1,389.9 
                                          --------------  ---------------- 
 
PROPERTIES, PLANTS AND EQUIPMENT, NET            1,395.4           1,398.3 
                                          --------------  ---------------- 
 
                                                $3,996.6          $3,882.2 
                                          ==============  ================ 
 
LIABILITIES AND SHAREHOLDERS' EQUITY 
 
CURRENT LIABILITIES 
Accounts payable                                  $432.5            $431.3 
Short-term borrowings                               70.4              64.1 
Current portion of long-term debt                   15.0              10.0 
Other current liabilities                          288.0             296.3 
                                          --------------  ---------------- 
                                                   805.9             801.7 
                                          --------------  ---------------- 
 
LONG-TERM LIABILITIES 
Long-term debt                                   1,300.8           1,207.2 
Liabilities held by special purpose 
 entities                                           43.3              43.3 
Other long-term liabilities                        436.8             432.0 
                                          --------------  ---------------- 
                                                 1,780.9           1,682.5 
                                          --------------  ---------------- 
 
SHAREHOLDERS' EQUITY                             1,409.8           1,398.0 
                                          --------------  ---------------- 
 
                                                $3,996.6          $3,882.2 
                                          ==============  ================ 
 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014      2013(8)     2014    2013(8) 
                              ---------  ---------  --------  -------- 
CASH FLOWS FROM OPERATING 
 ACTIVITIES: 
Net income                        $34.5      $42.3     $65.1     $67.2 
Depreciation, depletion and 
 amortization                      41.9       38.9      81.0      78.4 
Asset impairments                     -        2.2       0.2       2.3 
Other non-cash adjustments 
 to net income                   (13.0)      (5.3)    (23.3)     (0.6) 
Working capital changes            45.1      (3.5)    (48.2)    (79.2) 
Increase (decrease) in cash 
 from changes in certain 
 assets and liabilities and 
 other                            (5.8)       33.2    (34.9)    (29.1) 
                              ---------  ---------  --------  -------- 
  Net cash provided by 
   operating activities           102.7      107.8      39.9      39.0 
                              ---------  ---------  --------  -------- 
 
CASH FLOWS FROM INVESTING 
 ACTIVITIES: 
Acquisitions of companies, 
 net of cash acquired                 -          -    (52.3)         - 
Purchases of properties, 
 plants, equipment and 
 timber properties               (53.2)     (27.5)    (95.7)    (56.0) 
Proceeds from the sale of 
 properties, plants, 
 equipment, timberland and 
 other assets                      21.8        5.1      36.6       6.1 
Payments on notes receivable 
 with related party, net            0.5        0.4       0.9       0.5 
                              ---------  ---------  --------  -------- 
  Net cash used in investing 
   activities                    (30.9)     (22.0)   (110.5)    (49.4) 
                              ---------  ---------  --------  -------- 
 
CASH FLOWS FROM FINANCING 
 ACTIVITIES: 
Proceeds from (payments on) 
 debt, net                       (51.8)     (66.3)     123.2      56.6 
Dividends paid                   (24.7)     (24.6)    (49.1)    (49.0) 
Other                               6.4        0.9       6.5     (2.5) 
                              ---------  ---------  --------  -------- 
  Net cash provided by (used 
   in) financing activities      (70.1)     (90.0)      80.6       5.1 
                              ---------  ---------  --------  -------- 
 
EFFECTS OF EXCHANGE RATES ON 
 CASH                               3.7      (1.8)     (0.7)     (0.8) 
 
Net increase (decrease) in 
 cash and cash equivalents          5.4      (6.0)       9.3     (6.1) 
Cash and cash equivalents at 
 beginning of the period           82.0       91.4      78.1      91.5 
                              ---------  ---------  --------  -------- 
Cash and cash equivalents at 
 end of the period                 87.4       85.4      87.4      85.4 
                              =========  =========  ========  ======== 
 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                   FINANCIAL HIGHLIGHTS BY SEGMENT 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014      2013(9)     2014    2013(9) 
                              ---------  ---------  --------  -------- 
Net sales: 
  Rigid Industrial Packaging 
   & Services                    $784.3     $773.4  $1,496.6  $1,477.8 
  Paper Packaging                 205.0      194.5     407.7     378.7 
  Flexible Products & 
   Services                       105.3      112.4     218.5     223.8 
  Land Management                   6.1        8.6      12.3      17.2 
                              ---------  ---------  --------  -------- 
    Total net sales            $1,100.7   $1,088.9  $2,135.1  $2,097.5 
                              =========  =========  ========  ======== 
 
Operating profit (loss): 
  Rigid Industrial Packaging 
   & Services                     $47.2      $53.2     $76.7     $84.7 
  Paper Packaging                  26.5       25.7      56.5      53.4 
  Flexible Products & 
   Services                      (10.3)        0.8     (9.5)       1.4 
  Land Management                  11.2        4.2      22.9       8.4 
                              ---------  ---------  --------  -------- 
    Total operating profit        $74.6      $83.9    $146.6    $147.9 
                              =========  =========  ========  ======== 
 
EBITDA(10) : 
  Rigid Industrial Packaging 
   & Services                     $78.0      $80.9    $130.2    $135.5 
  Paper Packaging                  33.8       32.3      71.8      69.0 
  Flexible Products & 
   Services                       (7.6)        3.4     (3.8)       7.2 
  Land Management                  12.0        5.4      24.5      10.7 
                              ---------  ---------  --------  -------- 
    Total EBITDA                 $116.2     $122.0    $222.7    $222.4 
                              =========  =========  ========  ======== 
 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                       SPECIAL ITEMS BY SEGMENT 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014     2013(11)    2014    2013(11) 
                              --------  ----------  -------  --------- 
Rigid Industrial Packaging & 
 Services 
   Restructuring charges          $0.8      $(0.3)     $3.3       $0.9 
   Acquisition-related costs       0.3         0.1      0.8        0.6 
   Debt extinguishment 
    charges                          -           -        -        0.9 
                              --------  ----------  -------  --------- 
      Total special Items          1.1       (0.2)      4.1        2.4 
                              --------  ----------  -------  --------- 
 
Paper Packaging 
   Debt extinguishment 
    charges                          -           -        -        0.2 
                              --------  ----------  -------  --------- 
      Total special Items            -           -        -        0.2 
                              --------  ----------  -------  --------- 
 
Flexible Products & Services 
   Restructuring charges           3.1         0.2      3.2        0.3 
   Debt extinguishment 
    charges                          -           -        -        0.2 
                              --------  ----------  -------  --------- 
      Total special items          3.1         0.2      3.2        0.5 
                              --------  ----------  -------  --------- 
 
Land Management 
   Timberland gains              (8.2)           -   (16.9)          - 
                              --------  ----------  -------  --------- 
      Total special items        (8.2)           -   (16.9)          - 
                              --------  ----------  -------  --------- 
 
Total special Items 
                                ($4.0)          $-   ($9.6)       $3.1 
                              ========  ==========  =======  ========= 
 
 
 
 
                   GREIF, INC. AND SUBSIDIARY COMPANIES 
                     GAAP TO NON-GAAP RECONCILIATION 
                     NET WORKING CAPITAL AND NET DEBT 
                                UNAUDITED 
                          (Dollars in millions) 
 
                                          April 30, 2014  October 31, 2013 
                                          --------------  ---------------- 
 
Current assets                                  $1,169.5          $1,094.0 
Less: current liabilities                          805.9             801.7 
                                          --------------  ---------------- 
   Working capital                                 363.6             292.3 
Less: cash and cash equivalents                     87.4              78.1 
                                          --------------  ---------------- 
   Net working capital                             276.2             214.2 
                                          ==============  ================ 
 
Long-term debt                                  $1,300.8          $1,207.2 
Plus: current portion of long-term debt             15.0              10.0 
Plus: short-term borrowings                         70.4              64.1 
Less: cash and cash equivalents                     87.4              78.1 
                                          --------------  ---------------- 
  Net debt                                      $1,298.8          $1,203.2 
                                          ==============  ================ 
 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                   GAAP TO NON-GAAP RECONCILIATION 
                       CONSOLIDATED EBITDA(12) 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014     2013(13)    2014    2013(13) 
                              --------  ----------  -------  --------- 
 
Net income                       $34.5       $42.3    $65.1      $67.2 
   Plus: interest expense, 
    net                           20.4        21.4     40.8       44.3 
   Plus: income tax expense       19.5        19.6     36.0       32.8 
   Plus: depreciation, 
    depletion and 
    amortization expense          41.9        38.9     81.0       78.4 
   Less: equity earnings of 
    unconsolidated 
    affiliates, net of tax         0.1         0.2      0.2        0.3 
                              --------  ----------  -------  --------- 
EBITDA                          $116.2      $122.0   $222.7     $222.4 
                              ========  ==========  =======  ========= 
 
Net income                       $34.5       $42.3    $65.1      $67.2 
   Plus: interest expense, 
    net                           20.4        21.4     40.8       44.3 
   Plus: income tax expense       19.5        19.6     36.0       32.8 
   Plus: other expense, net        0.3         0.8      4.9        3.9 
   Less: equity earnings of 
    unconsolidated 
    affiliates, net of tax         0.1         0.2      0.2        0.3 
                              --------  ----------  -------  --------- 
Operating profit                  74.6        83.9    146.6      147.9 
   Less: other expense, net        0.3         0.8      4.9        3.9 
   Plus: depreciation, 
    depletion and 
    amortization expense          41.9        38.9     81.0       78.4 
                              --------  ----------  -------  --------- 
EBITDA                          $116.2      $122.0   $222.7     $222.4 
                              ========  ==========  =======  ========= 
 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                   GAAP TO NON-GAAP RECONCILIATION 
                          SEGMENT EBITDA(14) 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014     2013(15)    2014    2013(15) 
                              ---------  ---------  -------  --------- 
Rigid Industrial Packaging & 
 Services 
Operating profit                  $47.2      $53.2    $76.7      $84.7 
   Less: other (income) 
    expense, net                  (1.5)      (1.1)      3.2        2.7 
   Plus: depreciation and 
    amortization expense           29.3       26.6     56.7       53.5 
                              ---------  ---------  -------  --------- 
EBITDA                            $78.0      $80.9   $130.2     $135.5 
 
Paper Packaging 
Operating profit                  $26.5      $25.7    $56.5      $53.4 
   Less: other (income) 
    expense, net                    0.8        0.8        -      (0.2) 
   Plus: depreciation and 
    amortization expense            8.1        7.4     15.3       15.4 
                              ---------  ---------  -------  --------- 
EBITDA                            $33.8      $32.3    $71.8      $69.0 
 
Flexible Packaging & 
 Services 
Operating profit (loss)         $(10.3)       $0.8   $(9.5)       $1.4 
   Less: other expense, net         1.0        1.1      1.7        1.4 
   Plus: depreciation and 
    amortization expense            3.7        3.7      7.4        7.2 
                              ---------  ---------  -------  --------- 
EBITDA                           $(7.6)       $3.4   $(3.8)       $7.2 
 
Land Management 
Operating profit                  $11.2       $4.2    $22.9       $8.4 
   Plus: depreciation, 
    depletion and 
    amortization expense            0.8        1.2      1.6        2.3 
                              ---------  ---------  -------  --------- 
EBITDA                            $12.0       $5.4    $24.5      $10.7 
                              ---------  ---------  -------  --------- 
 
Consolidated EBITDA              $116.2     $122.0   $222.7     $222.4 
                              =========  =========  =======  ========= 
 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                   GAAP TO NON-GAAP RECONCILIATION 
                          FREE CASH FLOW(16) 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014     2013(17)     2014    2013(17) 
                              --------  ----------  --------  -------- 
 
  Net cash provided by 
   operating activities         $102.7      $107.8     $39.9     $39.0 
  Less: Purchases of 
   properties, plants, 
   equipment and timber 
   properties                   (53.2)      (27.5)    (95.7)    (56.0) 
  Plus: Proceeds from sales 
   of properties, plants, 
   equipment, timberland and 
   other assets                   21.8         5.1      36.6       6.1 
                              --------  ----------  --------  -------- 
  Free Cash Flow                 $71.3       $85.4   $(19.2)   $(10.9) 
                              ========  ==========  ========  ======== 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                           GEOGRAPHIC DATA 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014     2013(18)     2014    2013(18) 
                              ---------  ---------  --------  -------- 
Net sales: 
  North America                  $534.6     $513.3  $1,035.0    $989.4 
  Europe, Middle East and 
   Africa                         415.7      413.5     790.7     784.1 
  Asia Pacific and Latin 
   America                        150.4      162.1     309.4       324 
                              ---------  ---------  --------  -------- 
    Total net sales            $1,100.7   $1,088.9  $2,135.1  $2,097.5 
                              =========  =========  ========  ======== 
 
 
Operating profit: 
  North America                   $55.7      $52.0    $109.4     $97.4 
  Europe, Middle East and 
   Africa                          14.1       28.6      28.1      42.9 
  Asia Pacific and Latin 
   America                          4.8        3.3       9.1       7.6 
                              ---------  ---------  --------  -------- 
    Total operating profit        $74.6      $83.9    $146.6    $147.9 
                              =========  =========  ========  ======== 
 
 
 
Notes:    The North America region includes businesses from Rigid Industrial 
          Packaging & Services, Paper Packaging, Flexible Products & Services 
          and Land Management. 
 
          The Europe, Middle East and Africa region includes businesses from 
          Rigid Industrial Packaging & Services and Flexible Products & 
          Services. 
 
          The Asia Pacific and Latin America region includes businesses from 
          Rigid Industrial Packaging & Services and Flexible Products & 
          Services. 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                   GAAP TO NON-GAAP RECONCILIATION 
         SEGMENT OPERATING PROFIT (LOSS) BEFORE SPECIAL ITEMS 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014     2013(19)    2014    2013(19) 
                              --------  ----------  -------  --------- 
Operating profit (loss): 
  Rigid Industrial Packaging 
   & Services                    $47.2       $53.2    $76.7      $84.7 
  Paper Packaging                 26.5        25.7     56.5       53.4 
  Flexible Products & 
   Services                     (10.3)         0.8    (9.5)        1.4 
  Land Management                 11.2         4.2     22.9        8.4 
                              --------  ----------  -------  --------- 
    Total operating profit        74.6        83.9    146.6      147.9 
                              --------  ----------  -------  --------- 
Restructuring charges: 
  Rigid Industrial Packaging 
   & Services                      0.8       (0.3)      3.3        0.9 
  Flexible Products & 
   Services                        3.1         0.2      3.2        0.3 
                              --------  ----------  -------  --------- 
    Total restructuring 
     charges                       3.9       (0.1)      6.5        1.2 
                              --------  ----------  -------  --------- 
Acquisition-related costs: 
  Rigid Industrial Packaging 
   & Services                      0.3         0.1      0.8        0.6 
                              --------  ----------  -------  --------- 
    Total 
     acquisition-related 
     costs                         0.3         0.1      0.8        0.6 
                              --------  ----------  -------  --------- 
Timberland gains: 
  Land Management                (8.2)           -   (16.9)          - 
                              --------  ----------  -------  --------- 
    Total timberland gains       (8.2)           -   (16.9)          - 
                              --------  ----------  -------  --------- 
Operating profit (loss) 
 before special items(20) : 
  Rigid Industrial Packaging 
   & Services                     48.3        53.0     80.8       86.2 
  Paper Packaging                 26.5        25.7     56.5       53.4 
  Flexible Products & 
   Services                      (7.2)         1.0    (6.3)        1.7 
  Land Management                  3.0         4.2      6.0        8.4 
                              --------  ----------  -------  --------- 
Total operating profit 
 before special items            $70.6       $83.9   $137.0     $149.7 
                              ========  ==========  =======  ========= 
 
 
 
                 GREIF, INC. AND SUBSIDIARY COMPANIES 
                   GAAP TO NON-GAAP RECONCILIATION 
                 SEGMENT EBITDA BEFORE SPECIAL ITEMS 
                              UNAUDITED 
                        (Dollars in millions) 
 
                               Three months ended    Six months ended 
                                   April 30,            April 30, 
                              --------------------  ------------------ 
                                2014     2013(21)    2014    2013(21) 
                              --------  ----------  -------  --------- 
EBITDA(22) : 
  Rigid Industrial Packaging 
   & Services                    $78.0       $80.9   $130.2     $135.5 
  Paper Packaging                 33.8        32.3     71.8       69.0 
  Flexible Products & 
   Services                      (7.6)         3.4    (3.8)        7.2 
  Land Management                 12.0         5.4     24.5       10.7 
                              --------  ----------  -------  --------- 
    Total EBITDA                 116.2       122.0    222.7      222.4 
                              --------  ----------  -------  --------- 
Restructuring charges: 
  Rigid Industrial Packaging 
   & Services                      0.8       (0.3)      3.3        0.9 
  Flexible Products & 
   Services                        3.1         0.2      3.2        0.3 
                              --------  ----------  -------  --------- 
    Total restructuring 
     charges                       3.9       (0.1)      6.5        1.2 
                              --------  ----------  -------  --------- 
Acquisition-related costs: 
  Rigid Industrial Packaging 
   & Services                      0.3         0.1      0.8        0.6 
                              --------  ----------  -------  --------- 
    Total 
     acquisition-related 
     costs                         0.3         0.1      0.8        0.6 
                              --------  ----------  -------  --------- 
Timberland gains: 
  Land Management                (8.2)           -   (16.9)          - 
                              --------  ----------  -------  --------- 
    Total timberland gains       (8.2)           -   (16.9)          - 
                              --------  ----------  -------  --------- 
EBITDA before special 
 items(23) : 
  Rigid Industrial Packaging 
   & Services                     79.1        80.7    134.3      137.0 
  Paper Packaging                 33.8        32.3     71.8       69.0 
  Flexible Products & 
   Services                      (4.5)         3.6    (0.6)        7.5 
  Land Management                  3.8         5.4      7.6       10.7 
                              --------  ----------  -------  --------- 
    Total EBITDA before 
     special items              $112.2      $122.0   $213.1     $224.2 
                              ========  ==========  =======  ========= 
 
 
 
(1)     EBITDA is defined as net income plus interest expense, net, plus 
        income tax expense less equity earnings of unconsolidated 
        subsidiaries, net of tax plus depreciation, depletion and 
        amortization. 
 
Note: A reconciliation of the differences between all non-GAAP financial 
measures used in this release with the most directly comparable GAAP financial 
measures is included in the financial schedules that are a part of this 
release. 
 
(2)     A summary of all special items that are included in operating profit 
        before special items and in EBITDA before special items is set forth 
        in the Selected Financial Highlights table following the Company 
        Outlook in this release. 
(3)     Free cash flow is defined as net cash provided by operating activities 
        less capital expenditures and timberland purchases plus proceeds from 
        sales of properties, plants, equipment, timberland and other assets. 
(4)     As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(5)     Working capital represents current assets less current liabilities. 
        Net working capital represents working capital less cash and cash 
        equivalents. 
(6)     Net debt represents long-term debt plus the current portion of 
        long-term debt plus short-term borrowings less cash and cash 
        equivalents. 
(7)     As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(8)     As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(9)     As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(10)    EBITDA is defined as net income plus interest expense, net, plus 
        income tax expense less equity earnings of unconsolidated 
        subsidiaries, net of tax plus depreciation, depletion and 
        amortization. However, because the company does not calculate net 
        income by segment, this table calculates EBITDA by segment with 
        reference to operating profit (loss) by segment, which as demonstrated 
        in the table of Consolidated EBITDA is another method to achieve the 
        same result. See the reconciliations in the table of Segment EBITDA. 
(11)    As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(12)    EBITDA is defined as net income, plus interest expense, net, plus 
        income tax expense, less equity earnings of unconsolidated affiliates, 
        net of tax, plus depreciation, depletion and amortization. As 
        demonstrated in this table, EBITDA can also be calculated with 
        reference to operating profit. 
(13)    As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(14)    EBITDA is defined as net income, plus interest expense, net, plus 
        income tax expense, less equity earnings of unconsolidated affiliates, 
        net of tax, plus depreciation, depletion and amortization. However, 
        because the company does not calculate net income by segment, this 
        table calculates EBITDA by segment with reference to operating profit 
        (loss) by segment, which, as demonstrated in the table of Consolidated 
        EBITDA, is another method to achieve the same result. 
(15)    As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(16)    Free cash flow is defined as net cash provided by operating activities 
        less capital expenditures and timberland purchases plus proceeds from 
        sales of properties, plants, equipment, timberland and other assets. 
(17)    As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(18)    As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(19)    As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(20)    Operating profit (loss) before special items is defined as operating 
        profit (loss) plus restructuring charges plus acquisition-related 
        costs less timberland gains. 
(21)    As restated. See Note 19 in the Notes to Consolidated Financial 
        Statements included in Item 1 of our Quarterly Report on Form 10-Q for 
        the period ended July 31, 2013. 
(22)    EBITDA is defined as net income, plus interest expense, net, plus 
        income tax expense, less equity earnings of unconsolidated affiliates, 
        net of tax, plus depreciation, depletion and amortization. However, 
        because the company does not calculate net income by segment, this 
        table calculates EBITDA by segment with reference to operating profit 
        (loss) by segment, which as demonstrated in the table of Consolidated 
        EBITDA is another method to achieve the same result. See the 
        reconciliations in the table of Segment EBITDA 
(23)    EBITDA before special items is defined as EBITDA plus restructuring 
        charges plus acquisition-related costs less timberland gains. 

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