##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWASHINGTON, D.C.
    20549
      FORM 10-K
 (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    September 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
    
    to   Commission file number
    0-23340
      ROCK-TENN COMPANY (Exact Name of
    Registrant as Specified in Its Charter)
  Georgia

62-0342590(State or Other Jurisdiction of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)504 Thrasher Street, Norcross, Georgia

30071(Address of Principal Executive
    Offices)

(Zip Code)   (770) 448-2193
    Title of Each Class

Name of Exchange on Which RegisteredClass A Common Stock, par value $0.01 per share

New York Stock Exchange   None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  rule 12b-2
  þ o o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



ROCK-TENN
    COMPANY
  INDEX TO
    FORM 10-K
   
 PageReferencePART IItem 1.


Business


3Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff Comments


11Item 2.


Properties


11Item 3.


Legal Proceedings


12Item 4.


Submission of Matters to a Vote of Security
    Holders


12PART IIItem 5.


Market for the Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


13Item 6.


Selected Financial Data


14Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


16Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


33Item 8.


Financial Statements and Supplementary Data


36Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


86Item 9A.


Controls and Procedures


86Item 9B.


Other Information


87PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


87Item 11.


Executive Compensation


87Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


87Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


87Item 14.


Principal Accounting Fees and Services


87PART IVItem 15.


Exhibits and Financial Statement Schedules


88EX-12 STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGESEX-21 SUBSIDIARIES OF THE REGISTRANTEX-23 CONSENT OF ERNST & YOUNG LLPEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEO & CFO   2




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##### Table of Contents



PART I
  Item 1.
    BUSINESS  Unless the context otherwise requires, we,
    us, our, Rock-Tennand
    the Companyrefer to the business of
    Rock-Tenn Company and its consolidated subsidiaries, including
    RTS Packaging, LLC (RTS) and Fold-Pak, LLC
    (Fold-Pak, formerly known as GSD Packaging,
    LLC). We own 65% of RTS and conduct our interior packaging
    products business through RTS. At September 30, 2006 and
    2005 we owned 60% of Fold-Pak and conducted some of our folding
    carton operations through Fold-Pak. In January 2007, we acquired
    the remaining 40% of Fold-Pak. These terms do not include Seven
    Hills Paperboard, LLC (Seven Hills), Quality
    Packaging Specialists International, LLC
    (QPSI), or Display Source Alliance, LLC
    (DSA). We own 49% of Seven Hills, a
    manufacturer of gypsum paperboard liner, 23.96% of QPSI, a
    business providing merchandising displays, contract packing,
    logistics and distribution solutions, and 45% of DSA, a business
    providing primarily permanent merchandising displays, none of
    which we consolidate. All references in this Annual Report and
    the accompanying consolidated financial statements to data
    regarding sales price per ton and fiber, energy, chemical and
    freight costs with respect to our recycled paperboard mills
    exclude that data with respect to our Aurora, Illinois, recycled
    paperboard mill, which sells only converted products and which
    would not be material. All other references herein to operating
    data with respect to our recycled paperboard mills, including
    tons data and capacity utilization rates, include operating data
    from our Aurora mill.
  General
    Products
  We report our results of operations in four
    segments: Financial Statements
    and Supplementary Data. Note 19. Segment
    Information
  Packaging
    Products Segment
    Folding Cartons.
  Interior Packaging.
 3




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##### Table of Contents



Paperboard
    Segment
      Merchandising
    Displays Segment
    Corrugated
    Packaging Segment
   4




---



##### Table of Contents



Raw
    Materials
  (Gulf States, GSPP GSPP
    Acquisition)
    Energy
    Transportation
    Sales and
    Marketing
   5




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##### Table of Contents




    packaging products to approximately 2,900 customers, the top 10
    of which represented approximately 32% of the external sales of
    our Packaging Products segment;
    paperboard products to approximately 1,100 customers, the top 10
    of which represented approximately 37% of the external sales of
    our Paperboard segment;
    merchandising display products to approximately 400 customers,
    the top 10 of which represented approximately 81% of the
    external sales of our Merchandising Display segment; and
    corrugated packaging products to approximately 500 customers,
    the top 10 of which represented approximately 50% of the
    external sales of our Corrugated Packaging segment.      Competition
           6




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##### Table of Contents



Governmental
    Regulation
  Health
    and Safety Regulations
  (OSHA) and/or
  Environmental
    Regulation
  CERCLA
      Note 18. Commitments and
    Contingencies
  Patents
    and Other Intellectual Property
  ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ®
 7




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##### Table of Contents



Employees
    Available
    Information
  www.rocktenn.com (SEC)
  Forward-Looking
    Information
   8




---



##### Table of Contents



Item 1A.  Risk
    Factors.
  Item 1A.
    RISK
    FACTORS  
    We May Face Increased Costs and Reduced Supply of Raw
    Materials    
    We May Experience Pricing Variability   9




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##### Table of Contents




    Our Earnings are Highly Dependent on Volumes    
    We Face Intense Competition  Business 
    Competition.
  
    We Have Been Dependent on Certain Customers    
    We May Incur Business Disruptions    
    We May be Unable to Complete and Finance
    Acquisitions    
    We are Subject to Extensive Environmental and Other
    Governmental Regulation    Note 18. Commitments and Contingencies
 10




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##### Table of Contents




    We May Incur Additional Restructuring Costs    
    We May Incur Increased Transportation Costs    
    We May Incur Increased Employee Benefit Costs    Item 1B.  UNRESOLVED
    STAFF COMMENTS
    Item 2.
    PROPERTIES   11




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##### Table of Contents



ProductionCapacityLocation of Mill

(in tons @ 9/30/2007)

Paperboard ProducedDemopolis, AL


335,000



Bleached paperboard100,000



Market pulpSt. Paul, MN


184,000



Recycled corrugating mediumSt. Paul, MN


160,000



Coated recycled paperboardBattle Creek, MI


160,000



Coated recycled paperboardSheldon Springs, VT (Missisquoi Mill)


112,000



Coated recycled paperboardDallas, TX


99,000



Coated recycled paperboardStroudsburg, PA


75,000



Coated recycled paperboardTotal Coated Capacity


606,000Chattanooga, TN


132,000



Specialty recycled paperboardLynchburg, VA


103,000
(1)


Specialty recycled paperboardEaton, IN


60,000



Specialty recycled paperboardCincinnati, OH


53,000



Specialty recycled paperboardAurora, IL


32,000



Specialty recycled paperboardTotal Specialty Capacity


380,000Total Mill Capacity


1,605,000     (1)
    
    Reflects the production capacity of a paperboard machine that
    manufactures gypsum paperboard liner and is owned by our Seven
    Hills joint venture.    Type of Facility

LocationsMerchandising Display Operations

Winston-Salem, NC
    (sales, design, manufacturing and contract packing)Headquarters

Norcross, GA   Item 3.
    LEGAL
    PROCEEDINGS  Note 18. Commitments and Contingencies
  Item 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   12




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##### Table of Contents



PART II
  Item 5.
    MARKET
    FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES  Common
    Stock
  (Common Stock
  Price
    Range of Common Stock
  Fiscal 2007


Fiscal 2006High


Low


High


LowFirst Quarter

$
28.50


$
19.33


$
15.12


$
11.70Second Quarter

$
35.54


$
26.91


$
15.19


$
12.54Third Quarter

$
43.22


$
31.51


$
16.74


$
13.88Fourth Quarter

$
37.19


$
23.54


$
20.75


$
15.37   Dividends
    Selected Financial Data.
  Securities
    Authorized for Issuance Under Equity Compensation
    Plans
  Executive
    Compensation Equity
    Compensation Plan Information
  Note 15. Shareholders Equity
   13




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##### Table of Contents



Total Number of


Maximum NumberShares Purchased as


of Shares that MayTotal Number


Average


Part of Publicly


Yet Be Purchasedof Shares


Price Paid


Announced Plans or


Under the Plans orPurchased(a)


per Share


Programs


ProgramsJuly 1, 2007 through July 31, 2007





$








2,033,832August 1, 2007 through August 31, 2007


1,797,000



27.34



1,797,000



2,236,832September 1, 2007 through September 30, 2007


346,700



27.73



346,700



1,890,132Total


2,143,700


$
27.41



2,143,700     (a)
    
    During fiscal 2007, in addition to the information presented in
    the table above, 104,032 shares, at an average price of
    $34.32, were surrendered by employees to the Company to satisfy
    tax withholding obligations in connection with the vesting of
    shares of restricted stock. We had no other share repurchases in
    fiscal 2007. There have been no repurchases subsequent to
    September 30, 2007.  Item 6.
    SELECTED
    FINANCIAL DATA  Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations
 14




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##### Table of Contents



Year Ended September 30,2007


2006


2005


2004


2003(In millions, except per share amounts)Net sales

$
2,315.8


$
2,138.1


$
1,733.5


$
1,581.3


$
1,433.3Restructuring and other costs, net


4.7



7.8



7.5



32.7



1.5Income from continuing operations


81.7



28.7



17.6



9.6



29.5Income from discontinued operations, net of tax














8.0



0.1Net income


81.7



28.7



17.6



17.6



29.6Diluted earnings per common share from continuing operations


2.07



0.77



0.49



0.27



0.85Diluted earnings per common share


2.07



0.77



0.49



0.50



0.85Dividends paid per common share


0.39



0.36



0.36



0.34



0.32Book value per common share


15.51



13.49



12.57



12.28



12.07Total assets


1,800.7



1,784.0



1,798.4



1,283.8



1,291.4Current portion of debt


46.0



40.8



7.1



85.8



12.9Total long-term debt


676.3



765.3



908.0



398.3



513.0Total debt(a)


722.3



806.1



915.1



484.1



525.9Shareholders equity


589.0



508.6



456.2



437.6



422.0Net cash provided by operating activities(b)


238.3



153.5



153.3



93.5



112.5Capital expenditures


78.0



64.6



54.3



60.8



57.4Cash paid for investment in unconsolidated subsidiaries


9.6



0.2



0.1



0.2



0.3Cash paid for purchase of businesses, net of cash received


32.1



7.8



552.3



15.0



81.8       (a)
    
    Total debt includes the aggregate of fair value hedge
    adjustments resulting from terminated and/or existing fair value
    interest rate derivatives or swaps of $8.5, $10.4, $12.3, $18.5,
    and $23.9 during fiscal 2007, 2006, 2005, 2004, and 2003,
    respectively.(b)
    
    Net cash provided by operating activities for the year ended
    September 30, 2004 was reduced by approximately $9.9 in
    cash taxes paid from the gain on the sale of discontinued
    operations. 15




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##### Table of Contents



Item 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Segment
    and Market Information
      Year Ended September 30,2007


2006


2005(In millions)Net sales (aggregate):Packaging Products

$
1,260.9


$
1,267.8


$
994.0Paperboard


939.6



819.7



615.4Merchandising Displays


305.8



233.2



226.3Corrugated Packaging


158.3



135.7



118.5Total

$
2,664.6


$
2,456.4


$
1,954.2Less net sales (intersegment):Packaging Products

$
5.2


$
2.9


$
3.4Paperboard


321.5



298.9



202.3Merchandising Displays






0.1



0.2Corrugated Packaging


22.1



16.4



14.8Total

$
348.8


$
318.3


$
220.7Net sales (unaffiliated customers):Packaging Products

$
1,255.7


$
1,264.9


$
990.6Paperboard


618.1



520.8



413.1Merchandising Displays


305.8



233.1



226.1Corrugated Packaging


136.2



119.3



103.7Total

$
2,315.8


$
2,138.1


$
1,733.5Segment income:Packaging Products

$
49.3


$
45.0


$
33.4Paperboard


114.2



62.2



31.6Merchandising Displays


38.7



16.4



17.6Corrugated Packaging


8.4



4.0



3.5Total segment income


210.6



127.6



86.1Restructuring and other costs, net


(4.7
)


(7.8
)


(7.5
)Non-allocated expenses


(23.0
)


(20.8
)


(17.8
)Interest expense


(49.8
)


(55.6
)


(36.6
)Interest and other income (expense), net


(1.3
)


1.6



0.5Minority interest in income of consolidated subsidiaries


(4.8
)


(6.4
)


(4.8
)Income before income taxes


127.0



38.6



19.9Income tax expense


(45.3
)


(9.9
)


(2.3
)Net income

$
81.7


$
28.7


$
17.6  16




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##### Table of Contents



Overview
      Results
    of Operations
  Form 10-Q Note 20. Financial
    Results by Quarter (Unaudited)
  Net
    Sales (Unaffiliated Customers)
      Net
    Sales (Aggregate)  Packaging Products
    Segment
  First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal Year(In millions)2005

$
221.8


$
218.8


$
239.2


$
314.2


$
994.02006


301.1



319.7



326.2



320.8



1,267.82007


303.1



312.8



319.0



326.0



1,260.9       Net
    Sales (Aggregate)  Paperboard Segment
  First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal Year(In millions)2005

$
128.7


$
131.8


$
155.0


$
199.9


$
615.42006


187.7



205.7



204.1



222.2



819.72007


210.8



231.6



247.7



249.5



939.6    17




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##### Table of Contents



Net
    Sales (Aggregate)  Merchandising Displays
    Segment
  First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal Year(In millions)2005

$
52.7


$
59.0


$
57.0


$
57.6


$
226.32006


49.2



55.8



58.8



69.4



233.22007


60.9



82.6



76.8



85.5



305.8   ®
    Net
    Sales (Aggregate)  Corrugated Packaging
    Segment
  First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal Year(In millions)2005

$
28.8


$
30.2


$
29.8


$
29.7


$
118.52006


28.4



31.9



36.6



38.8



135.72007


36.6



40.4



40.6



40.7



158.3       Cost
    of Goods Sold
   18




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##### Table of Contents



Quantitative and Qualitative Disclosures About
    Market Risk  Foreign Currency
    last-in (LIFO) first-in (FIFO)
    Fiscal 2007


Fiscal 2006


Fiscal 2005LIFO


FIFO


LIFO


FIFO


LIFO


FIFO(In millions)Cost of goods sold

$
1,870.2


$
1,863.4


$
1,789.0


$
1,784.7


$
1,459.2


$
1,463.6Net income


81.7



86.0



28.7



31.3



17.6



14.9   step-up
  Selling,
    General and Administrative Expenses
  (SG&A
 19




---



##### Table of Contents



Acquisitions
        Note 6. Acquisitions
  Restructuring
    and Other Costs, Net
  Note 7. Restructuring and
    Other Costs, Net
 20




---



##### Table of Contents



Segment
    Income
  Segment
    Income  Packaging Products Segment
  Net Sales


Segment


Return(Aggregate)


Income


on Sales(In millions, except percentages)First Quarter

$
221.8


$
5.3



2.4
%Second Quarter


218.8



5.7



2.6Third Quarter


239.2



10.6



4.4Fourth Quarter


314.2



11.8



3.8Fiscal 2005

$
994.0


$
33.4



3.4
%First Quarter

$
301.1


$
6.8



2.3
%Second Quarter


319.7



13.4



4.2Third Quarter


326.2



13.2



4.0Fourth Quarter


320.8



11.6



3.6Fiscal 2006

$
1,267.8


$
45.0



3.5
%First Quarter

$
303.1


$
11.7



3.9
%Second Quarter


312.8



13.1



4.2Third Quarter


319.0



12.4



3.9Fourth Quarter


326.0



12.1



3.7Fiscal 2007

$
1,260.9


$
49.3



3.9
%      21




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##### Table of Contents



Segment
    Income  Paperboard Segment
  Coated andSpecialtyRecycled





BleachedPaperboard


Corrugated


Paperboard


Market PulpNet Sales


Segment





Tons


Medium Tons


Tons


Tons


Average(Aggregate)


Income


Return


Shipped (a)


Shipped


Shipped (b)


Shipped (b)


Price (a) (c)(In millions)


(In millions)


On Sales


(In thousands)


(In thousands)


(In thousands)


(In thousands)


(Per Ton)First Quarter

$
128.7


$
4.4



3.4
%


210.6



42.7



n/a



n/a


$
467Second Quarter


131.8



3.6



2.7



209.7



45.2



n/a



n/a



472Third Quarter


155.0



7.6



4.9



211.6



44.8



26.7



6.9



491Fourth Quarter


199.9



16.0



8.0



209.7



44.8



84.2



23.1



523Fiscal 2005

$
615.4


$
31.6



5.1
%


841.6



177.5



110.9



30.0


$
492First Quarter

$
187.7


$
(1.0
)


(0.5
)%


208.3



45.0



79.2



15.0


$
524Second Quarter


205.7



15.8



7.7



223.5



45.4



80.7



27.9



526Third Quarter


204.1



18.9



9.3



220.6



44.2



76.6



23.7



539Fourth Quarter


222.2



28.5



12.8



229.1



47.0



83.7



20.0



561Fiscal 2006

$
819.7


$
62.2



7.6
%


881.5



181.6



320.2



86.6


$
538First Quarter

$
210.8


$
23.9



11.3
%


221.5



44.6



74.0



20.9


$
558Second Quarter


231.6



26.9



11.6



223.0



46.2



82.2



24.6



571Third Quarter


247.7



34.1



13.8



225.1



45.3



90.1



25.6



588Fourth Quarter


249.5



29.3



11.7



223.5



46.8



88.7



24.8



596Fiscal 2007

$
939.6


$
114.2



12.2
%


893.1



182.9



335.0



95.9


$
578     (a)
    
    Recycled Paperboard Tons Shipped and Average Price Per Ton
    include tons shipped by Seven Hills.(b)
    
    Bleached paperboard and market pulp tons shipped began in June
    2005 as a result of the GSPP Acquisition.(c)
    
    Beginning in the third quarter of fiscal 2005, Average Price Per
    Ton includes coated and specialty recycled paperboard,
    corrugated medium, bleached paperboard and market pulp.       22




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##### Table of Contents



Segment
    Income  Merchandising Displays Segment
  Net Sales


Segment


Return on(Aggregate)


Income


Sales(In millions, except percentages)First Quarter

$
52.7


$
2.4



4.6
%Second Quarter


59.0



3.7



6.3Third Quarter


57.0



5.4



9.5Fourth Quarter


57.6



6.1



10.6Fiscal 2005

$
226.3


$
17.6



7.8
%First Quarter

$
49.2


$
2.8



5.7
%Second Quarter


55.8



3.2



5.7Third Quarter


58.8



1.6



2.7Fourth Quarter


69.4



8.8



12.7Fiscal 2006

$
233.2


$
16.4



7.0
%First Quarter

$
60.9


$
5.1



8.4
%Second Quarter


82.6



12.2



14.8Third Quarter


76.8



10.8



14.1Fourth Quarter


85.5



10.6



12.4Fiscal 2007

$
305.8


$
38.7



12.7
%      23




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##### Table of Contents



Segment
    Income  Corrugated Packaging Segment
  Net Sales


Segment


Return on(Aggregate)


Income


Sales(In millions, except percentages)First Quarter

$
28.8


$
0.3



1.0
%Second Quarter


30.2



1.1



3.6Third Quarter


29.8



1.0



3.4Fourth Quarter


29.7



1.1



3.7Fiscal 2005

$
118.5


$
3.5



3.0
%First Quarter

$
28.4


$
0.4



1.4
%Second Quarter


31.9



1.0



3.1Third Quarter


36.6



1.0



2.7Fourth Quarter


38.8



1.6



4.1Fiscal 2006

$
135.7


$
4.0



2.9
%First Quarter

$
36.6


$
1.8



4.9
%Second Quarter


40.4



2.4



5.9Third Quarter


40.6



2.0



4.9Fourth Quarter


40.7



2.2



5.4Fiscal 2007

$
158.3


$
8.4



5.3
%       Equity
    in Income (Loss) of Unconsolidated Entities
    Interest
    Expense
      Interest
    and Other Income (Expense), net
   24




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##### Table of Contents



Minority
    Interest in Income of Consolidated Subsidiaries
      Provision
    for Income Taxes
  Note 13. Income Taxes
     25




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##### Table of Contents



Liquidity
    and Capital Resources
  Working
    Capital and Capital Expenditures
    Note 11. Derivatives
  364-day (Receivables
    Facility Note 10. Debt
     26




---



##### Table of Contents



clean-up,
        and/or Note 18.
    Commitments and Contingencies
   27




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##### Table of Contents



Contractual
    Obligations
    Payments Due by PeriodFiscal


Fiscal


FiscalContractual Obligations

Total


2008


2009 & 2010


2011 & 2012


Thereafter(In millions)Long-term debt, including current portion(a)(e)

$
714.2


$
46.0


$
287.5


$
250.6


$
130.1Operating lease obligations(b)


23.8



10.0



9.3



3.0



1.5Purchase obligations(c)(d)


263.4



159.4



102.2



1.7



0.1Total

$
1,001.4


$
215.4


$
399.0


$
255.3


$
131.7     (a)
    
    We have included in the long-term debt line item above amounts
    owed on our note agreements, industrial development revenue
    bonds, and credit agreements. For purposes of this table, we
    assume that all of our long-term debt will be held to maturity.
    We have not included in these amounts interest payable on our
    long-term debt. We have excluded aggregate hedge adjustments
    resulting from terminated interest rate derivatives or swaps of
    $8.5 million and excluded unamortized bond discounts of
    $0.4 million 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. Leasesof the Notes to Consolidated Financial Statements.(c)
    
    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
    provision; and the approximate timing of the transaction.
    Purchase obligations exclude agreements that are cancelable
    without penalty.(d)
    
    Seven Hills commenced operations on March 29, 2001. Our
    partner has the option to put its interest in Seven Hills to us,
    at a formula price, effective on the sixth or any subsequent
    anniversary of the commencement date by providing notice to us
    to purchase its interest no later than two years prior to the
    anniversary of the commencement date on which such transaction
    is to occur. No notification has been received by us from our
    partner to date. Therefore, the earliest date at which a put
    could be completed would be March 29, 2010. We currently
    project this contingent obligation to purchase our
    partners interest (based on the formula) to be
    approximately $16 million, which would result in a purchase
    price of less than 60% of our partners share of the net
    equity reflected on Seven Hills September 30, 2007
    balance sheet. We have not included the $16 million in the
    table above.(e)
    
    We have not included in the table above an item labeled
    other long-term liabilities reflected on our
    consolidated balance sheet because none of our other long-term
    liabilities has a definite pay-out scheme. As discussed in
    Note 14. Retirement Plansof the
    Notes to Consolidated Financial Statements, we have long-term
    liabilities for deferred employee compensation, including
    pension, supplemental retirement plans, and 28




---



##### Table of Contents



deferred compensation. We have not included in the table the
    payments related to the supplemental retirement plans and
    deferred compensation because these amounts are dependent upon,
    among other things, when the employee retires or leaves our
    Company, and whether the employee elects lump-sum or installment
    payments. In addition, we have not included in the table minimum
    pension funding requirements because such amounts are not
    available for all periods presented. We estimate that we will
    contribute approximately $23 million to our pension plans
    in fiscal 2008 and, based on current facts and assumptions,
    expect to contribute $22 million to the plans in fiscal
    2009. During fiscal 2007, we contributed approximately
    $20.9 million to our pension and supplemental retirement
    plans.    Note 17. Related Party Transactions
  Stock
    Repurchase Program
    Expenditures
    for Environmental Compliance
  Business 
    Governmental Regulation  Environmental
    Regulation.
  Critical
    Accounting Policies and Estimates
  Note 1. Description of Business and Summary
    of Significant Accounting Policies ,
    Quantitative and Qualitative Disclosures About Market
    Risk.
  Accounts
    Receivable and Allowances
   29




---



##### Table of Contents



Inventory
      Goodwill
    and Long-Lived Assets
  Goodwill and Other
    Intangible Assets
   30




---



##### Table of Contents



Accounting for the Impairment or Disposal
    of Long-Lived Assets (SFAS 144
  Note 8. Other Intangible
    Assets
    Health
    Insurance
  12-month
  Workers
    Compensation
    Accounting
    for Income Taxes
   31




---



##### Table of Contents



Pension
    Plans
  (U.S. Qualified Plans) Note 14. Retirement Plans
       32




---



##### Table of Contents



25 Basis Point


25 Basis PointIncrease


DecreaseDiscount rate

$
(1.3
)

$
1.4Compensation level

$
0.1


$
(0.1
)Expected long-term rate of return on plan assets

$
(0.6
)

$
0.6   (ERISA)
    (FASB) Employers
    Accounting for Defined Benefit Pension and Other Postretirement
    Plans  an Amendment of FASB Statements No. 87,
    88, 106 and 132(R) (SFAS 158)
  New
    Accounting Standards
  Note 1. Description of Business and Summary
    of Significant Accounting Policies
  Item 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   33




---



##### Table of Contents



Derivative
    Instruments
    Interest
    Rates
    Market
    Risks Impacting Pension Plans
    Foreign
    Currency
          Commodities
  Fiber
  (OCC)
 34




---



##### Table of Contents



Coated
    Unbleached Kraft
  (CUK
  Linerboard/Corrugated
    Medium
      Energy
           35




---



##### Table of Contents



Item 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Index to
    Financial Statements
  DescriptionConsolidated Statements of Income


Page 37Consolidated Balance Sheets


Page 38Consolidated Statements of Shareholders Equity


Page 39Consolidated Statements of Cash Flows


Page 40Notes to Consolidated Financial Statements


Page 42Report of Independent Registered Public Accounting Firm


Page 82Report of Independent Registered Public Accounting Firm On
    Internal Control Over Financial Reporting


Page 83Report of Management on Responsibility for Financial Information
    and for Establishing and Maintaining Adequate Internal Control
    over Financial Reporting


Page 84   Note 20. Financial Results by Quarter
    (Unaudited)
 36




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##### Table of Contents



ROCK-TENN
    COMPANY
  CONSOLIDATED STATEMENTS OF INCOME
  Year Ended September 30,2007


2006


2005(In millions, except per share data)Net sales

$
2,315.8


$
2,138.1


$
1,733.5Cost of goods sold


1,870.2



1,789.0



1,459.2Gross profit


445.6



349.1



274.3Selling, general and administrative expenses


259.1



244.2



205.0Restructuring and other costs, net


4.7



7.8



7.5Operating profit


181.8



97.1



61.8Interest expense


(49.8
)


(55.6
)


(36.6
)Interest and other income (expense), net


(1.3
)


1.6



0.5Equity in income (loss) of unconsolidated entities


1.1



1.9



(1.0
)Minority interest in income of consolidated subsidiaries


(4.8
)


(6.4
)


(4.8
)Income before income taxes


127.0



38.6



19.9Income tax expense


(45.3
)


(9.9
)


(2.3
)Net income

$
81.7


$
28.7


$
17.6Basic earnings per share:Net income

$
2.12


$
0.79


$
0.50Diluted earnings per share:Net income

$
2.07


$
0.77


$
0.49    37




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##### Table of Contents



ROCK-TENN
    COMPANY
  CONSOLIDATED BALANCE SHEETS
  September 30,2007


2006(In millions, except share and per share data)ASSETSCurrent Assets:Cash and cash equivalents

$
10.9


$
6.9Accounts receivable (net of allowances of $5.4 and $5.2)


230.6



230.8Inventories


224.4



218.9Other current assets


26.8



25.0Assets held for sale


1.8



4.0Total current assets


494.5



485.6Property, plant and equipment at cost:Land and buildings


274.8



266.0Machinery and equipment


1,368.6



1,299.7Transportation equipment


10.8



10.8Leasehold improvements


5.9



6.21,660.1



1,582.7Less accumulated depreciation and amortization


(822.6
)


(732.1
)Net property, plant and equipment


837.5



850.6Goodwill


364.5



356.6Intangibles, net


67.6



55.1Investment in unconsolidated entities


28.9



21.6Other assets


7.7



14.5$
1,800.7


$
1,784.0LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of debt

$
46.0


$
40.8Accounts payable


161.6



141.8Accrued compensation and benefits


73.8



65.7Other current liabilities


63.5



57.7Total current liabilities


344.9



306.0Long-term debt due after one year


667.8



754.9Hedge adjustments resulting from terminated fair value interest
    rate derivatives or swaps


8.5



10.4Total long-term debt


676.3



765.3Accrued pension and other long-term benefits


47.3



75.9Deferred income taxes


125.7



99.8Other long-term liabilities


7.6



9.6Commitments and contingencies (Notes 12 and 18)Minority interest


9.9



18.8Shareholders equity:Preferred stock, $0.01 par value; 50,000,000 shares
    authorized; no shares outstanding






Class A common stock, $0.01 par value;
    175,000,000 shares authorized; 37,988,779 and
    37,688,522 shares outstanding at September 30, 2007
    and September 30, 2006, respectively


0.4



0.4Capital in excess of par value


222.6



179.6Retained earnings


357.8



341.2Accumulated other comprehensive income (loss)


8.2



(12.6
)Total shareholders equity


589.0



508.6$
1,800.7


$
1,784.0    38




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##### Table of Contents



ROCK-TENN
    COMPANY
  CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
  AccumulatedClass A


Capital in





OtherCommon Stock


Excess of


Retained


ComprehensiveShares


Amount


Par Value


Earnings


Income (Loss)


Total(In millions, except share and per share data)Balance at October 1, 2004


35,640,784


$
0.4


$
155.2


$
321.5


$
(39.5
)

$
437.6Comprehensive income:Net income














17.6







17.6Foreign currency translation adjustments


















13.8



13.8Net unrealized gain on derivative instruments (net of $(2.4) tax)


















3.6



3.6Pension liability adjustments (net of $8.2 tax)


















(10.5
)


(10.5
)Comprehensive income






















24.5Income tax benefit from exercise of stock options










0.2











0.2Shares granted under restricted stock plan


200,000



















Compensation expense under restricted stock plan










1.7











1.7Restricted Stock grant cancelled


(24,333
)


















Cash dividends  $0.36 per share














(12.9
)






(12.9
)Issuance of Class A common stock net of stock received for
    tax withholdings


463,713







5.3



(0.2
)






5.1Balance at September 30, 2005


36,280,164



0.4



162.4



326.0



(32.6
)


456.2Comprehensive income:Net income














28.7







28.7Foreign currency translation adjustments


















3.3



3.3Reclassification of previously terminated hedges to earnings
    (net of $1.1 tax)


















(1.8
)


(1.8
)Net unrealized gain on derivative instruments (net of $(1.7) tax)


















2.8



2.8Pension liability adjustments (net of $(10.6) tax)


















15.7



15.7Comprehensive income






















48.7Income tax benefit from exercise of stock options










1.0











1.0Shares granted under restricted stock plan


469,503



















Compensation expense under share based plans










3.5











3.5Cash dividends  $0.36 per share














(13.2
)






(13.2
)Issuance of Class A common stock net of stock received for
    tax withholdings


938,855







12.7



(0.3
)






12.4Balance at September 30, 2006


37,688,522



0.4



179.6



341.2



(12.6
)


508.6Comprehensive income:Net income














81.7







81.7Foreign currency translation adjustments


















14.0



14.0Reclassification of previously terminated hedges to earnings
    (net of $1.5 tax)


















(2.5
)


(2.5
)Net unrealized loss on derivative instruments (net of $0.3
    tax)


















(0.4
)


(0.4
)Pension liability adjustments (net of $(15.1) tax)


















24.0



24.0Comprehensive income






















116.8Impact of adopting SFAS No. 158 (as hereinafter
    defined) (net of $9.0 tax)


















(14.3
)


(14.3
)Income tax benefit from exercise of stock options










14.1











14.1Shares granted under restricted stock plan


165,497



















Compensation expense under share based plans










7.3











7.3Cash dividends  $0.39 per share














(15.4
)






(15.4
)Issuance of Class A common stock net of stock received
    for tax withholdings


2,278,460







33.6



(3.0
)






30.6Purchases of Class A common stock


(2,143,700
)






(12.0
)


(46.7
)






(58.7
)Balance at September 30, 2007


37,988,779


$
0.4


$
222.6


$
357.8


$
8.2


$
589.0    39




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##### Table of Contents



ROCK-TENN
    COMPANY
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended September 30,2007


2006


2005(In millions)Operating activities:Net income

$
81.7


$
28.7


$
17.6Items in income not affecting cash:Depreciation and amortization


103.7



104.3



84.0Deferred income tax expense


22.2



5.5



4.0Income tax benefit of employee stock options










0.2Share-based compensation expense


7.3



3.6



1.7Gain (loss) on disposal of plant and equipment and other, net


0.9



(0.4
)


(1.8
)Minority interest in income of consolidated subsidiaries


4.8



6.4



4.8Equity in (income) loss of unconsolidated entities


(1.1
)


(1.9
)


1.0Proceeds from (payment on) termination of cash flow interest
    rate hedges


(0.7
)


14.5



Pension funding (more) less than expense


(7.5
)


(4.1
)


8.7Impairment adjustments and other non-cash items


2.0



3.5



2.9Change in operating assets and liabilities, net of acquisitions:Accounts receivable


3.4



(30.9
)


23.4Inventories


(2.6
)


(14.1
)


9.5Other assets


18.8



(7.6
)


(5.2
)Accounts payable


18.7



25.1



3.2Income taxes payable


(4.3
)


8.6



(3.2
)Accrued liabilities


(9.0
)


12.3



2.5Net cash provided by operating activities


238.3



153.5



153.3Investing activities:Capital expenditures


(78.0
)


(64.6
)


(54.3
)Purchases of marketable securities










(195.3
)Maturities and sales of marketable securities










223.5Cash paid for purchase of businesses, net of cash received


(32.1
)


(7.8
)


(552.3
)Investment in unconsolidated entities


(9.6
)


(0.2
)


(0.1
)Return of capital from unconsolidated entities


6.5







Proceeds from sale of property, plant and equipment


2.8



4.7



6.0Proceeds from property, plant and equipment insurance settlement


1.3



0.9



Net cash used for investing activities


(109.1
)


(67.0
)


(572.5
)Financing activities:Additions to revolving credit facilities


68.1



79.5



226.0Repayments of revolving credit facilities


(91.9
)


(210.7
)


(10.0
)Additions to debt


22.1



51.8



320.8Repayments of debt


(85.1
)


(29.7
)


(100.5
)Payment on termination of fair value interest rate hedges










(4.3
)Debt issuance costs






(0.3
)


(4.0
)Issuances of common stock


31.5



11.5



5.1Purchases of common stock


(58.7
)






Excess tax benefits from share-based compensation


14.1



1.0



Capital contributed to consolidated subsidiary from minority
    interest






2.1



Advances from (repayments to) unconsolidated entity


(5.4
)


8.6



1.4Cash dividends paid to shareholders


(15.4
)


(13.2
)


(12.9
)Cash distributions paid to minority interest


(4.2
)


(6.4
)


(5.1
)Net cash provided by (used for) financing activities


(124.9
)


(105.8
)


416.5Effect of exchange rate changes on cash and cash equivalents


(0.3
)


(0.6
)


0.8Increase (decrease) in cash and cash equivalents


4.0



(19.9
)


(1.9
)Cash and cash equivalents at beginning of year


6.9



26.8



28.7Cash and cash equivalents at end of year

$
10.9


$
6.9


$
26.8  40




---



##### Table of Contents



ROCK-TENN
    COMPANY
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (Continued)
    Year Ended September 30,2007


2006


2005(In millions)Cash paid (received) during the period for:Income taxes, net of refunds

$
13.1


$
(4.4
)

$
4.2Interest, net of amounts capitalized


54.4



60.1



38.4           September 30,2006(In millions)Fair value of assets acquired including goodwill

$
8.5Cash paid


7.8Liabilities assumed

$
0.7    41




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Note 1.
    Description
    of Business and Summary of Significant Accounting
    Policies  Description
    of Business
  Unless the context otherwise requires, we,
    us, our, Rock-Tennand
    the Companyrefer to the business of
    Rock-Tenn Company and its consolidated subsidiaries, including
    RTS Packaging, LLC (RTS) and Fold-Pak, LLC
    (Fold-Pak, formerly known as GSD Packaging,
    LLC). We own 65% of RTS and conduct our interior packaging
    products business through RTS. At September 30, 2006 and
    2005 we owned 60% of Fold-Pak and conducted some of our folding
    carton operations through Fold-Pak. In January 2007, we acquired
    the remaining 40% of Fold-Pak. These terms do not include Seven
    Hills Paperboard, LLC (Seven Hills), Quality
    Packaging Specialists International, LLC
    (QPSI), or Display Source Alliance, LLC
    (DSA). We own 49% of Seven Hills, a
    manufacturer of gypsum paperboard liner, 23.96% of QPSI, a
    business providing merchandising displays, contract packing,
    logistics and distribution solutions, and 45% of DSA, a business
    providing primarily permanent merchandising displays, none of
    which we consolidate.
    Consolidation
    Consolidation of Variable Interest Entities.
  Use of
    Estimates
  (GAAP)
    Revenue
    Recognition
   42




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Shipping
    and Handling Costs
    Derivatives
            Accounting for Derivative
    Instruments and Hedging Activities (SFAS 133)
 43




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  Cash
    Equivalents
    Accounts
    Receivable and Allowances
      Inventories
  last-in, (LIFO) first-in, (FIFO)
    Property,
    Plant and Equipment
   44




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Buildings and building improvements

15-40 yearsMachinery and equipment

3-20 yearsTransportation equipment

3-8 years     Goodwill
    and Long-Lived Assets
  Goodwill
    and Other Intangible Assets (SFAS 142)
      Accounting for the Impairment or Disposal
    of Long-Lived Assets (SFAS 144)
 45




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 8. Other
    Intangible Assets.
    Health
    Insurance
  12-month
  Workers
    Compensation
    Income
    Taxes
    Pension
    and Other Post-Retirement Benefits
  Employers
    Accounting for Pensions (SFAS 87) Employers
    Accounting for Defined Benefit Pension
 46




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and Other Postretirement Plans, an amendment of FASB
    Statements No. 87, 88, 106, and 132(R) (SFAS 158) Note 14. Retirement Plans,
  Stock
    Based Compensation
  Note 15. Shareholders Equity. Share-Based
    Payment (SFAS 123(R))
  Note 15. Shareholders Equity
  Asset
    Retirement Obligations
  Accounting for
    Asset Retirement Obligations (SFAS 143) Accounting for Conditional Asset
    Retirement Obligations (FIN 47)
  Repair
    and Maintenance Costs
   47




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Foreign
    Currency
    Environmental
    Remediation Costs
    New
    Accounting Standards  Recently Adopted
  Employers
    Accounting for Defined Benefit Pension and Other Postretirement
    Plans, an amendment of FASB Statements No. 87, 88, 106, and
    132(R) Note 14.
    Retirement Plans  Defined Benefit Pension
    Plans
  New
    Accounting Standards  Recently Issued
  Accounting for Uncertainty in Income Taxes 
    an Interpretation of FASB Statement 109 (FIN 48)
    (SFAS 157)
 48




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 2.
    Basic and
    Diluted Earnings Per Share    Year Ended September 30,2007


2006


2005Numerator:Net income

$
81.7


$
28.7


$
17.6Denominator:Denominator for basic earnings per share  weighted
    average shares


38.5



36.1



35.5Effect of dilutive stock options and restricted stock awards


1.0



0.9



0.6Denominator for diluted earnings per share  weighted
    average shares and assumed conversions


39.5



37.0



36.1Basic earnings per share:Net income per share  basic

$
2.12


$
0.79


$
0.50Diluted earnings per share:Net income per share  diluted

$
2.07


$
0.77


$
0.49     Note 3.
    Accumulated
    Other Comprehensive Income (Loss)    September 30,2007


2006Foreign currency translation gain

$
49.5


$
35.5Net unrealized gain on derivative instruments, net of tax


1.2



4.1Pension liability adjustments, net of tax






(52.2
)Unrecognized pension net loss, net of tax


(40.1
)


Unrecognized pension prior service cost, net of tax


(2.4
)


Total accumulated other comprehensive income (loss)

$
8.2


$
(12.6
)  49




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 4.
    Inventories    September 30,2007


2006Finished goods and work in process

$
152.1


$
140.0Raw materials


71.9



70.6Supplies and spare parts


34.3



35.4Inventories at FIFO cost


258.3



246.0LIFO reserve


(33.9
)


(27.1
)Net inventories

$
224.4


$
218.9     Note 5.
    Assets
    Held for Sale    September 30,2007


2006Property, plant and equipment

$
1.8


$
4.0   Note 6.
    Acquisitions  Folding
    Cartons
  ,
  Interior
    Packaging
   50




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  GSPP
  Gulf
    States GSPP GSPP
    Acquisition
      Current assets, net of cash received

$
127.6Property, plant, and equipment


357.1Goodwill


51.0Intangible assets  customer relationships
    (22.3 year weighted-average useful life)


50.7Other long-term assets


0.3Total assets acquired


586.7Current liabilities


24.6Minority interest


9.4Other long-term liabilities


0.5Total liabilities assumed


34.5Net assets acquired

$
552.2  51




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year EndedSeptember 30,2005Net sales

$
2,075.2Net income

$
30.1Diluted earnings per common share

$
0.83   Note 7.
    Restructuring
    and Other Costs, Net    Summary
    of Restructuring and Other Costs (Income), Net
  Severanceand OtherNet Property,


Employee


Equipment


FacilityPlant and


Related


and Inventory


CarryingSegment

Period

Equipment(1)


Costs


Relocation


Costs


Other


TotalPackaging

Fiscal 2007

$
1.1


$
1.0


$
0.6


$
0.3


$
1.7


$
4.7Products(a)

Fiscal 2006


1.7



1.8



0.7



0.3



2.6



7.1Fiscal 2005


2.5



4.3



0.5







0.1



7.4Cumulative


5.3



7.1



1.8



0.6



4.4



19.2Expected Total


5.3



7.3



2.1



1.1



4.5



20.3Paperboard(b)

Fiscal 2007






















Fiscal 2006


(0.1
)






0.1



0.1



(0.1
)


Fiscal 2005


(1.1
)


0.2



0.6



0.7



0.1



0.5Cumulative


23.3



3.2



1.0



1.3



0.4



29.2Expected Total


23.3



3.2



1.0



1.3



0.4



29.2Other(c)

Fiscal 2007

























Fiscal 2006


















0.7



0.7Fiscal 2005


















(0.4
)


(0.4
)Total

Fiscal 2007

$
1.1


$
1.0


$
0.6


$
0.3


$
1.7


$
4.7Fiscal 2006

$
1.6


$
1.8


$
0.8


$
0.4


$
3.2


$
7.8Fiscal 2005

$
1.4


$
4.5


$
1.1


$
0.7


$
(0.2
)

$
7.5Cumulative

$
28.6


$
10.3


$
2.8


$
1.9


$
4.8


$
48.4Expected Total

$
28.6


$
10.5


$
3.1


$
2.4


$
4.9


$
49.5  52




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    For this Note 7, we have defined Net property,
    plant and equipmentas: property, plant and equipment
    impairment losses, and subsequent adjustments to fair value for
    assets classified as held for sale, subsequent (gains) or losses
    on sales of property, plant and equipment, and property, plant
    and equipment related parts and supplies.(a)
    
    The Packaging Products segment charges primarily reflect the
    following folding carton plant closures recorded: Stone
    Mountain, Georgia (announced and closed in fiscal 2007), Kerman,
    California (announced and closed in fiscal 2006), Marshville,
    North Carolina (announced at the end of fiscal 2005 and closed
    in fiscal 2006), Waco, Texas (announced and closed in fiscal
    2005), and St. Paul, Minnesota (announced in fiscal 2004 and
    closed in fiscal 2005). We transferred a substantial portion of
    each plants assets and production to our other folding
    carton plants. We recognized an impairment charge primarily to
    reduce the carrying value of equipment to its estimated fair
    value or fair value less cost to sell, and recorded charges for
    severance and other employee related costs. At the time of each
    announced closure, we expected to record future charges for
    equipment relocation, facility carrying costs and other employee
    related costs that are reflected in the table above. In fiscal
    2007, we recorded a $1.4 million charge and related
    estimated fair value of the liability for future lease payments
    when we ceased operations at the Stone Mountain plant. In fiscal
    2006, we recorded a $1.0 million charge and related
    liability for future lease payments when we ceased operations at
    the Kerman plant, and recorded charges of $1.3 million for
    a customer relationship intangible asset. Fiscal 2005 also
    includes severance and other employee costs related to our
    folding carton division restructuring. We believe these actions
    have allowed us to more effectively manage the collective
    folding assets.(b)
    
    The Paperboard segment charges primarily reflect the closures of
    our Wright City, Missouri laminated paperboard products facility
    (announced and closed in fiscal 2005) and our Otsego,
    Michigan paperboard mill (announced and closed in fiscal 2004).
    We transferred approximately one-third of the production of the
    Otsego facility to our remaining mills. We recognized an
    impairment charge primarily to reduce the carrying value of
    equipment to its estimated fair value or fair value less cost to
    sell, and recorded a charge for severance and other employee
    related costs. At the time of each announced closure, we
    expected to record future charges for equipment relocation,
    facility carrying costs and other employee related costs that
    are reflected in the table above.(c)
    
    In fiscal 2005, we acquired certain GSPP assets and assumed
    certain of Gulf States related liabilities. We have
    expensed as incurred various incremental transition costs to
    integrate the operations into our mill and folding carton
    operations of $0.5 million in fiscal 2006 and
    $0.7 million in fiscal 2005. In fiscal 2005, we recorded a
    charge of $0.6 million to expense previously capitalized
    patent defense costs and recognized a gain of $1.9 million
    when we sold 9.4 acres of real estate adjacent to our
    Norcross, Georgia headquarters and received proceeds of
    $2.8 million.   53




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restructuring
    and other costs, net
  2007


2006


2005Accrual at beginning of fiscal year

$
2.1


$
1.6


$
1.2Additional accruals


2.6



2.5



2.6Payments


(2.0
)


(1.9
)


(2.2
)Adjustment to accruals


(0.3
)


(0.1
)


Accrual at September 30,

$
2.4


$
2.1


$
1.6Reconciliation of accruals to restructuring and other
    costs, net:Additional accruals and adjustment to accruals (see table above)

$
2.3


$
2.4


$
2.6Severance and other employee costs


0.2



0.5



1.9Net property, plant and equipment


1.1



1.6



1.4Equipment relocation


0.6



0.8



1.1Facility carrying costs


0.3



0.4



0.7Other


0.2



2.1



(0.2
)Total restructuring and other costs, net

$
4.7


$
7.8


$
7.5     2006Accrual at beginning of fiscal year

$
1.5Additional accruals


Payments


(1.4
)Adjustment to accruals


(0.1
)Accrual at September 30,

$
   Note 8.
    Other
    Intangible Assets    September 30,2007


2006Weighted


Gross Carrying


Accumulated


Gross Carrying


AccumulatedAvg. Life


Amount


Amortization


Amount


AmortizationCustomer relationships


21.3


$
78.5


$
(16.3
)

$
65.2


$
(11.7
)Non-compete agreements


5.2



8.3



(6.6
)


6.5



(6.1
)Patents


8.0



1.5



(0.1
)


1.2



(0.3
)Trademark


40.0



2.9



(0.7
)


0.8



(0.6
)License Costs


5.0



0.3



(0.2
)


0.3



(0.2
)Total


21.3


$
91.5


$
(23.9
)

$
74.0


$
(18.9
)  54




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2008

$
5.92009


5.82010


5.02011


4.72012


4.0   Note 9.
    Unconsolidated
    Entities     55




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      write-up
 56




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 10.
    Debt    September 30,


September 30,2007


2006Face value of 5.625% notes due March 2013, net of
    unamortized discount of $0.1 and $0.2

$
99.9


$
99.8Hedge adjustments resulting from terminated interest rate
    derivatives or swaps


1.8



2.1101.7



101.9Face value of 8.20% notes due August 2011, net of
    unamortized discount of $0.3 and $0.3


249.7



249.7Hedge adjustments resulting from terminated interest rate
    derivatives or swaps


6.7



8.3256.4



258.0Term loan facility(a)


160.7



243.7Revolving credit and swing facilities(a)


68.3



86.9Receivables-backed financing facility(b)


100.0



90.0Industrial development revenue bonds, bearing interest at
    variable rates (4.94% at September 30, 2007, and 5.55% at
    September 30, 2006), due through October 2036(c)


23.9



23.9Other notes


11.3



1.7Total debt


722.3



806.1Less current portion of debt


46.0



40.8Long-term debt due after one year

$
676.3


$
765.3The following were the aggregate components of debt (in
    millions):Face value of debt instruments, net of unamortized discounts

$
713.8


$
795.7Hedge adjustments resulting from terminated interest rate
    derivatives or swaps


8.5



10.4$
722.3


$
806.1       (a)
    
    The Senior Credit Facility includes revolving credit, swing,
    term loan, and letters of credit facilities with an aggregate
    original maximum principal amount of $700 million. The
    Senior Credit Facility provides for up to $100.0 million in
    loans to a Canadian subsidiary. At September 30, 2007 and
    2006 there were $46.8 million and $49.8 million in
    borrowings to the Canadian subsidiary, respectively,
    predominantly denominated in Canadian dollars. As scheduled term
    loan payments are made, the facility size is reduced by those
    notional amounts. As of September 30, 2007, the facility
    has cumulatively been reduced by $89.3 million. At
    September 30, 2007 the Senior Credit Facility had a maximum
    principal amount of $610.7 million. The Senior Credit
    Facility is pre-payable at any time and is scheduled to expire
    on June 6, 2010. At September 30, 2007, we had issued
    aggregate outstanding letters of credit under this facility of
    approximately $39 million, none of which had been drawn 57




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  upon. At September 30, 2007, due to the restrictive
    covenants on the revolving credit facility, maximum additional
    available borrowings under this facility were approximately
    $342.7 million. Borrowings in the United States under the
    Senior Credit Facility bear interest based upon either:
    (1) LIBOR plus an applicable margin (U.S. LIBOR
    Loans) or (2) an alternative base rate plus an
    applicable margin (U.S. Base Rate Loans).
    Borrowings in Canada under the Senior Credit Facility bear
    interest based upon either: (1) Canadian Deposit Offering
    Rate plus an applicable margin for Canadian dollar loans
    (Bankers Acceptance Loans);
    (2) LIBOR plus an applicable margin for U.S. Dollar loans
    (Canadian LIBOR Loans); or (3) the
    Canadian or U.S. Dollar base rate plus an applicable margin
    (Canadian Base Rate Loans). The following
    table summarizes the applicable margins and percentages related
    to the Senior Credit Facility:  September 30,Range

2007


2006Applicable margin/percentage for determining:U.S. and Canadian Base Rate Loans interest rate(1)

0.00%-0.75%


0.00
%


0.75
%Bankers Acceptance and U.S. and Canadian LIBOR Loans
    interest rate(1)

0.875%-1.75%


1.00
%


1.75
%Facility commitment fee(2)

0.175%-0.40%


0.20
%


0.40
%     (1)
    
    Based on the ratio of our total funded debt to EBITDA as defined
    in the credit agreement (Leverage Ratio).(2)
    
    Applied to the aggregate borrowing availability based on the
    Leverage Ratio.  Interest on the U.S. revolving credit facility and term
    loan facility are payable in arrears on each applicable payment
    date. At our election, we can choose U.S. and Canadian Base
    Rate Loans, U.S. and Canadian LIBOR Loans, Bankers
    Acceptance Loans or a combination thereof. If we chose
    U.S. and Canadian LIBOR Loans or Bankers Acceptance
    Loans, the interest rate reset options are 30, 60, 90 or
    180 days. The Senior Credit Facility is secured by the real
    and personal property of the GSPP business that we acquired in
    the GSPP Acquisition and the following property of the Company
    and its wholly-owned subsidiaries: inventory and general
    intangibles, including, without limitation, specified patents,
    patent licenses, trademarks, trademark licenses, copyrights and
    copyright licenses. Upon filing this
    Form 10-K,
    we will have the right to cause the lien to be released due to
    our satisfying the requirements to be below a Credit Agreement
    Debt/EBITDA ratio of 3.0 times for two sequential quarters. The
    agreement documenting the Senior Credit Facility, includes
    restrictive covenants regarding the maintenance of financial
    ratios, the creation of additional long-term and short-term
    debt, the creation or existence of certain liens, the occurrence
    of certain mergers, acquisitions or disposals of assets and
    certain leasing arrangements, the occurrence of certain
    fundamental changes in the primary nature of our consolidated
    business, the nature of certain investments, and other matters.
    We are in compliance with these restrictions. Under the most
    restrictive of these covenants, as of September 30, 2007,
    we could pay up to approximately $110 million of dividends
    without violating our Minimum Consolidated Net Worth covenant.(b)
    
    On November 16, 2007, we amended the
    364-day
    receivables-backed financing facility (Receivables
    Facility) and increased the size of the facility from
    $100.0 million to $110.0 million. The new facility is
    scheduled to expire on November 15, 2008. Since the
    facility is scheduled to mature beyond one year from the balance
    sheet date, borrowings from the facility are classified as
    non-current at September 30, 2007 and due to similar
    circumstances, as non-current at September 30, 2006.
    Borrowing availability under this facility is based on the
    eligible underlying receivables. At September 30, 2007 and
    2006, maximum available borrowings under this facility were
    approximately $100.0 million. The borrowing rate, which
    consists of the market rate for asset-backed commercial paper
    plus a utilization fee, was 5.49% and 5.61% as of
    September 30, 2007 and September 30, 2006,
    respectively.(c)
    
    The industrial development revenue bonds are issued by various
    municipalities in which we maintain operations or other
    facilities. The bonds are fully secured by a pledge of payments
    to the municipality by us under a financing agreement. Each
    series of bonds is also secured by and payable through a letter
    of credit 58




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  issued in favor of the Trustee to the bonds. We are required to
    maintain these letters of credit under the terms of the bond
    indenture. The letters of credit are renewable at our request so
    long as no default or event of default has occurred under the
    Senior Credit Facility. A remarketing agent offers the bonds for
    initial sale and uses its best efforts to remarket the bonds
    until they mature or are otherwise fully redeemed. The
    remarketing agent also periodically determines the interest
    rates on the bonds based on prevailing market conditions. The
    remarketing agent is paid a fee for this service. Our industrial
    development revenue bonds are remarketed on a periodic basis
    upon demand of the bondholders. If the remarketing agent is
    unable to successfully remarket the bonds, the remarketing agent
    will repurchase the bonds by drawing on the letters of credit.
    If this were to occur, we would immediately reimburse the
    issuing lender with the proceeds of a revolving loan obtained
    under the Senior Credit Facility. Accordingly, we have
    classified the industrial development revenue bonds as
    non-current, except for $2.5 million classified as current
    because we expect to redeem the bond during fiscal 2008.  (August 2011 notes) (March 2013 notes)
    2008

$
46.02009


165.02010


122.52011


250.32012


0.3Thereafter


130.1Unamortized hedge adjustments from terminated interest rate
    derivatives or swaps


8.5Unamortized bond discount


(0.4
)Total long-term debt

$
722.3   Note 11.
    Derivatives   59




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006Interest rate financial swaps

$
(2.4
)

$
(4.4
)Commodity financial swaps


(3.3
)


(0.1
)Commodity physical contracts


0.5



0.1Net fair value of derivative contracts

$
(5.2
)

$
(4.4
)         2007


2006Proceeds from (payment on) termination of cash flow interest
    rate hedges


(0.7
)


14.5Ineffectiveness recorded in the results of operations in the
    fiscal year  pre-tax


(1.2
)


0.1Amounts in accumulated other comprehensive income/(loss) related
    to active swaps  pre-tax


(4.0
)


(4.1
)Amounts in accumulated other comprehensive income/(loss) related
    to terminated swaps  pre-tax


6.0



10.8       Note 12.
    Leases   60




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008

$
10.02009


6.02010


3.32011


1.82012


1.2Thereafter


1.5Total future minimum lease payments

$
23.8     Note 13.
    Income
    Taxes    Year Ended September 30,2007


2006


2005Current income taxes:Federal

$
17.0


$
1.1


$
(3.4
)State


3.5



(0.8
)


0.5Foreign


2.6



4.1



1.2Total current


23.1



4.4



(1.7
)Deferred income taxes:Federal


21.4



8.1



2.9State


2.0



(2.1
)


(0.1
)Foreign


(1.2
)


(0.5
)


1.2Total deferred


22.2



5.5



4.0Provision for income taxes

$
45.3


$
9.9


$
2.3  61




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended September 30,2007


2006


2005Employee related accruals and allowances

$
0.2


$
(2.7
)

$
(0.8
)Research and development and other federal credit carryforwards,
    net of valuation allowances


3.1



(3.1
)


State net operating loss carryforwards, net of valuation
    allowance


(1.4
)


(2.1
)


(2.6
)State credit carryforwards, net of federal benefit and valuation
    allowance


(0.4
)






0.3Property, plant and equipment


7.8



9.7



15.9Deductible intangibles


2.6



2.4



1.4Pension


7.4



1.5



(4.0
)Inventory reserves


1.2



(0.3
)


(2.3
)Other deferred tax assets


(0.4
)


(0.6
)


0.4Other deferred tax liabilities


2.1



0.7



(4.3
)Deferred income tax expense

$
22.2


$
5.5


$
4.0     Year Ended September 30,2007


2006


2005Statutory federal tax rate


35.0
%


35.0
%


35.0
%Meals and entertainment expense


0.4



0.9



2.5Adjustment of deferred taxes for changes in state and foreign
    tax rates


0.9



(5.2
)


6.9Fixed assets and inventory adjustments


(0.3
)


0.2



(6.6
)Adjustment and resolution of federal and state tax deductions


0.5



3.1



(20.8
)State taxes, net of federal benefit


1.8



(1.6
)


(3.5
)Research and development and other tax credits, net of valuation
    allowances


(3.1
)


(6.9
)


(0.1
)Adjustment to deferred taxes  restructuring






(1.0
)


(1.7
)Other valuation allowances


0.4



0.6



0.8Other, net


0.1



0.7



(1.2
)Effective tax rate


35.7
%


25.8
%


11.3
%    62




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    September 30,2007


2006Deferred income tax assets:Accruals and allowances

$
2.8


$
3.2Employee related accruals and allowances


9.1



9.2Pension


6.0



32.7Research and development and other federal credit carryforwards






3.1State net operating loss carryforwards


8.7



6.8State credit carryforwards, net of federal benefit


1.3



0.9Foreign tax credit carryforwards


1.1



1.6Valuation allowances


(3.5
)


(3.5
)Other


10.1



6.0Total


35.6



60.0Deferred income tax liabilities:Property, plant and equipment


127.8



118.4Deductible intangibles


16.8



13.9Pension






11.7Inventory reserves


2.9



1.7Other


10.0



8.2Total


157.5



153.9Net deferred income tax liability

$
121.9


$
93.9     September 30,2007


2006Current deferred tax asset

$
3.8


$
5.9Long-term deferred tax liability


125.7



99.8Net deferred income tax liability

$
121.9


$
93.9      63




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended September 30,2007


2006


2005United States

$
120.6


$
28.4


$
13.0Foreign


6.4



10.2



6.9Income before income taxes

$
127.0


$
38.6


$
19.9       Note 14.
    Retirement
    Plans  Defined
    Benefit Pension Plans
  (SERP
   64




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2007


2006Equity investment managers


68
%


70
%Fixed income investment managers


31
%


29
%Cash and cash equivalents


1
%


1
%Alternative investment managers


0
%


0
%Total


100
%


100
%         Target
    Allocations
  2007


2006Equity managers


50-80
%


50-80
%Fixed income managers


15-45
%


15-45
%Alternative investments, cash and cash equivalents


0-45
%


0-45
%    65




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      
    Recognize the funded status of a benefit plan in its balance
    sheet.
    Recognize as a component of other comprehensive income, net of
    tax, the gains or losses and prior service costs or credits that
    arise during the period but are not recognized as components of
    net periodic benefit cost.
    Measure defined benefit plan assets and obligations as of the
    date of the employers fiscal year-end balance sheet.
    Provide additional disclosure in the Consolidated Financial
    Statements.      2007


2006Discount rate


6.25
%


5.875
%     (RP-2000
    table) (GAM-83 table)
 66




---



##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended September 30,2007


2006Benefit obligation at beginning of year

$
341.5


$
343.4Service cost


9.6



10.0Interest cost


19.9



18.4Amendments


0.3



1.0Actuarial gain


(11.2
)


(18.6
)Benefits paid


(12.8
)


(12.7
)Benefit obligation at end of year

$
347.3


$
341.5       Year Ended September 30,2007


2006Fair value of plan assets at beginning of year

$
255.6


$
226.8Actual gain on plan assets


36.3



20.8Employer contributions


20.9



20.7Benefits paid


(12.8
)


(12.7
)Fair value of assets at end of year

$
300.0


$
255.6     Other current liability

$
(0.1
)Accrued pension and other long-term benefits


(47.2
)Net amount recognized

$
(47.3
)  67




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Funded status

$
(85.9
)Net unrecognized loss


95.8Unrecognized prior service cost


3.8Net amount recognized

$
13.7Amounts recognized in the consolidated balance sheets consist of:Prepaid pension cost

$
18.1Accrued pension liability


(93.9
)Intangible asset


4.5Accumulated other comprehensive loss


85.0Net amount recognized

$
13.7     Year Ended September 30,2007


2006Net actuarial loss

$
65.4


$
N/APrior service cost


3.8



N/A$
69.2


$
N/A     Year Ended September 30,2007


2006


2005Service cost

$
9.6


$
10.0


$
9.7Interest cost


19.9



18.4



18.0Expected return on plan assets


(23.2
)


(20.6
)


(19.0
)Net amortization of actuarial loss


6.1



7.8



7.2Net amortization of prior service cost


0.3



0.3



0.2Curtailment loss (gain)










(0.4
)Total company defined benefit plan expense


12.7



15.9



15.7Multi-employer plans for collective bargaining employees


0.6



0.5



0.5Net periodic pension cost

$
13.3


$
16.4


$
16.2     2007


2006


2005Discount rate


5.875
%


5.50
%


6.00
%Expected long-term rate of return on plan assets


9.00
%


9.00
%


9.00
%    68




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Actuarial loss

$
2.9Prior service cost


0.4$
3.3     2008

$
14.12009


15.02010


15.92011


17.12012


29.4Years 2013  2017


112.5   401(k)
    Plans
  Code
  Supplemental
    Retirement Plans
  Supplemental Plans Obligations and/or
 69




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 15.
    Shareholders
    Equity  Capitalization
    Stock
    Repurchase Plan
    Adoption
    of SFAS 123(R)
  Accounting for Stock Issued
    to Employees (APB 25
   70




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    de minimis
    2005Net income, as reported

$
17.6Add: Stock-based employee compensation expense included in
    reported net income, net of related tax effects


1.0Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects


(4.9
)Pro forma net income

$
13.7Earnings per share:Basic  as reported

$
0.50Basic  pro forma

$
0.39Diluted  as reported

$
0.49Diluted  pro forma

$
0.38   Stock
    Options
  10-year
   71




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007


2006


2005Expected Term in Years


4.9



7



7Expected Volatility


38.5
%


42.9
%


44.1
%Risk-Free Interest Rate


4.6
%


5.1
%


4.1
%Dividend Yield


1.4
%


2.6
%


2.6
%     WeightedWeighted


Average


AggregateAverage


Remaining


IntrinsicExercise


Contractual


ValueShares


Price


Term


(In Millions)Outstanding at September 30, 2006


3,211,369


$
13.83Granted


264,462



35.95Exercised


(2,250,269
)


13.77Expired


(10,600
)


18.66Forfeited






Outstanding at September 30, 2007


1,214,962


$
18.70



6.7 years


$
14.3Exercisable at September 30, 2007


905,170


$
13.81



5.8 years


$
13.7Options available for future grant at September 30,
    2007


1,471,204       WeightedAverageGrant Date FairShares


ValueNonvested at September 30, 2006


85,991


$
6.19Granted


264,462



12.91Vested


(40,661
)


6.19Forfeited






Nonvested at September 30, 2007


309,792


$
11.93    72




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Restricted
    Stock
  and/or
    WeightedAverageGrant Date FairShares


ValueUnvested at September 30, 2006


1,014,830


$
14.12Granted(1)


171,000



37.67Vested


(333,334
)


13.77Forfeited






Unvested at September 30, 2007


852,496


$
18.99     (1)
    
    The majority of the fiscal 2007 target awards may be increased
    by up to 150% 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%.      
    The first tranche (Tranche 1), with a
    target award of 72,800 shares, contains a performance
    condition based on the annual average return over capital costs
    (ROCC). The target award will be adjusted
    based on our ROCC performance from March 31, 2007 through
    December 31, 2009 compared to the ROCC performance of our
    Peer Group. Subject to the level of performance attained, the
    target award may be increased by up to 150% or decreased to zero.
    The second tranche (Tranche 2), with a
    target award of 61,700 shares, contains a market condition
    based on the percentage return on Common Stock purchased on
    March 31, 2007 and held through December 31, 73




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2009, including reinvestment of all dividends paid thereon
    during such period (the Total Shareholder
    Return). The target award will be adjusted based on
    our Total Shareholder Return from March 31, 2007 through
    December 31, 2009 compared to the Total Shareholder Return
    performance of our Peer Group. Subject to the level of
    performance attained, the target award may be increased to by up
    to 150% or decreased to zero.  
    The third tranche (Tranche 3), with an
    award of 18,500 shares, contains a performance condition
    that will be met upon the achievement of either the achievement
    of a certain Credit Agreement Debt to EBITDA ratio or a certain
    net earnings target.       74




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Employee
    Stock Purchase Plan
  (the Plan)
  Note 16.
    Business
    Interruption and Other Insurance Recoveries    clean-up,
  Note 17.
    Related
    Party Transactions    Note 18.
    Commitments
    and Contingencies  Capital
    Additions
   75




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Environmental
    and Other Matters
      (PRP)
  
    With respect to one site, while we have been identified as a
    PRP, our records reflect no evidence that we are associated with
    the site. Accordingly, if we are considered to be a PRP, we
    believe that we should be categorized as an unproven PRP.
    With respect to each of eight sites, we preliminarily determined
    that, while we may be associated with the site and while it is
    probable that we have incurred a liability with respect to the
    site, one of the following conclusions was applicable:
    With respect to each of six sites, we determined while it was
    not estimable, the potential liability was reasonably likely to
    be a de minimisamount and immaterial.
    With respect to one site, we have preliminarily determined the
    potential liability was best reflected by a range of reasonably
    possible liabilities, all of which we expect to be de minimisand immaterial.
    With respect to one site, we have preliminarily determined that
    it is probable that we have incurred a liability with respect to
    this site. The status of the site is unknown, pending further
    investigation.    
    Contamination was discovered at the time of the Gulf States
    Acquisition at two sites we acquired. We did not assume any
    environmental liabilities as part of the acquisition, but have
    limited indemnification rights with respect to this
    contamination. We would expect to assert various defenses under
    applicable laws with respect to this contamination.
    One of these sites is one of our former locations that is
    involved in an investigation under the state hazardous waste
    sites program. It is expected that any potential issues will be
    handled through administrative controls, such as a deed
    restriction, rather than remediation.
    It is believed that the contamination discovered at one of the
    sites was due to an oil release by a previous owner. The
    previous owner is obligated to indemnify us for any
    contamination caused by the oil release. 76




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Guarantees
    
    We have a 49% ownership interest in Seven Hills. The partners
    guarantee funding of net losses in proportion to their share of
    ownership.
    We lease certain manufacturing and warehousing facilities and
    equipment under various operating leases. A substantial number
    of these leases require us to indemnify the lessor in the event
    that additional taxes are assessed due to a change in the tax
    law. We are unable to estimate our maximum exposure under these
    leases because it is dependent on changes in the tax law.  and/or
  Insurance
    Placed with Kemper
   77




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note
    Receivable
    Note 19.
    Segment
    Information      Note 1. Description of Business and Summary of
    Significant Accounting Policies.
 78




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Years Ended September 30,2007


2006


2005Net sales (aggregate):Packaging Products

$
1,260.9


$
1,267.8


$
994.0Paperboard


939.6



819.7



615.4Merchandising Displays


305.8



233.2



226.3Corrugated Packaging


158.3



135.7



118.5Total

$
2,664.6


$
2,456.4


$
1,954.2Less net sales (intersegment):Packaging Products

$
5.2


$
2.9


$
3.4Paperboard


321.5



298.9



202.3Merchandising Displays






0.1



0.2Corrugated Packaging


22.1



16.4



14.8Total

$
348.8


$
318.3


$
220.7Net sales (unaffiliated customers):Packaging Products

$
1,255.7


$
1,264.9


$
990.6Paperboard


618.1



520.8



413.1Merchandising Displays


305.8



233.1



226.1Corrugated Packaging


136.2



119.3



103.7Total

$
2,315.8


$
2,138.1


$
1,733.5Segment income:Packaging Products

$
49.3


$
45.0


$
33.4Paperboard


114.2



62.2



31.6Merchandising Displays


38.7



16.4



17.6Corrugated Packaging


8.4



4.0



3.5Total


210.6



127.6



86.1Restructuring and other costs, net


(4.7
)


(7.8
)


(7.5
)Non-allocated expenses


(23.0
)


(20.8
)


(17.8
)Interest expense


(49.8
)


(55.6
)


(36.6
)Interest and other income (expense), net


(1.3
)


1.6



0.5Minority interest in consolidated subsidiaries


(4.8
)


(6.4
)


(4.8
)Income before income taxes

$
127.0


$
38.6


$
19.9Identifiable assets:Packaging Products

$
688.4


$
662.1


$
674.6Paperboard


878.5



886.3



901.0Merchandising Displays


162.2



158.0



133.0Corrugated Packaging


43.5



42.7



42.3Assets held for sale


1.8



4.0



3.4Corporate


26.3



30.9



44.1Total

$
1,800.7


$
1,784.0


$
1,798.4Goodwill:Packaging Products

$
93.1


$
84.5


$
81.2Paperboard


243.4



243.4



240.9Merchandising Displays


28.0



28.7



28.8Corrugated Packaging










Total

$
364.5


$
356.6


$
350.9 79




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Years Ended September 30,2007


2006


2005Depreciation and amortization:Packaging Products

$
42.2


$
42.7


$
37.5Paperboard


48.1



47.6



32.3Merchandising Displays


6.6



6.9



7.0Corrugated Packaging


3.7



3.9



4.0Corporate


3.1



3.2



3.2Total

$
103.7


$
104.3


$
84.0Capital expenditures:Packaging Products

$
29.8


$
27.5


$
26.3Paperboard


36.2



29.3



19.4Merchandising Displays


1.2



5.0



5.6Corrugated Packaging


1.7



1.8



1.1Corporate


9.1



1.0



1.9Total

$
78.0


$
64.6


$
54.3Investment in unconsolidated entities:Paperboard

$
17.8


$
21.6


$
19.5Merchandising Displays


11.1







Total

$
28.9


$
21.6


$
19.5Equity in income of unconsolidated entities:Paperboard

$
0.4


$
1.9


$
(1.0
)Merchandising Displays


0.7







Total

$
1.1


$
1.9


$
(1.0
)     Merch.


CorrugatedPackaging


Paperboard


Displays


Packaging


TotalBalance as of October 1, 2005

$
81.2


$
240.9


$
28.8


$



$
350.9Goodwill acquired


1.8



2.5











4.3Impairment loss










(0.1
)






(0.1
)Translation adjustment


1.5















1.5Balance as of September 30, 2006

$
84.5


$
243.4


$
28.7


$



$
356.6Goodwill acquired


3.9















3.9Translation and other adjustment


4.7







(0.7
)






4.0Balance as of September 30, 2007

$
93.1


$
243.4


$
28.0


$



$
364.5  80




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##### Table of Contents



ROCK-TENN
    COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 20.
    Financial
    Results by Quarter (Unaudited)  First


Second


Third


Fourth2007

Quarter


Quarter


Quarter


Quarter(In millions, except per share data)Net sales

$
533.9


$
585.7


$
591.4


$
604.8Gross profit


97.6



112.4



119.2



116.4Restructuring and other costs, net


0.5



1.2



0.6



2.4Income before income taxes


21.4



34.7



39.6



31.3Net income


15.1



21.7



25.2



19.7Basic earnings per share


0.40



0.56



0.64



0.51Diluted earnings per share


0.39



0.55



0.63



0.50   First


Second


Third


Fourth2006

Quarter


Quarter


Quarter


Quarter(In millions, except per share data)Net sales

$
490.4


$
529.7


$
548.3


$
569.7Gross profit


59.6



89.2



92.0



108.3Restructuring and other costs, net


1.0



3.5



2.7



0.6Income (loss) before income taxes


(12.1
)


8.4



12.0



30.3Net income (loss)(a)


(9.0
)


5.2



11.0



21.5Basic earnings (loss) per share


(0.25
)


0.15



0.30



0.59Diluted earnings (loss) per share


(0.25
)


0.14



0.30



0.57     (a)
    
    In the third quarter of fiscal 2006 we recorded a
    $3.5 million tax benefit primarily due to $1.2 million
    of research and development tax credits related to prior years,
    and a $1.1 million tax benefit for a reduction in deferred
    tax liabilities due primarily to recently enacted lower income
    tax rates in Canada. In the fourth quarter of fiscal 2006, we
    recorded a state tax benefit of $2.4 million which related
    primarily to a change in our state effective tax rate from
    approximately 4% to 3%.   81




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans Share Based
    Payments
  Internal Control 
    Integrated Framework
  
    82




---



##### Table of Contents



REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING
     Internal Control 
    Integrated Framework
            
    83




---



##### Table of Contents



ROCK-TENN
    COMPANY
    REPORT OF MANAGEMENT ON RESPONSIBILITY FOR FINANCIAL INFORMATION
    AND
    FOR ESTABLISHING AND MAINTAINING ADEQUATE INTERNAL CONTROL
    OVER
    FINANCIAL REPORTING
  Managements
    Responsibility for the Financial Statements
  Form 10-K. Form 10-K
  Internal
    Control Over Financial Reporting
  Rule 13a-15(f) (Exchange
    Act)
    Internal Control  Integrated
    Framework
   84




---



##### Table of Contents



Audit
    Committee Responsiblility
    James A. Rubright, Chairman and Chief Executive Officer
  steven c. voorhees, Executive Vice President and
    Chief Financial Officer
 85




---



##### Table of Contents



Item 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    Item 9A.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure 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 Chairman of the
    Board and Chief Executive Officer (CEO) and
    our Executive Vice President and Chief Financial Officer
    (CFO), as appropriate to allow timely
    decisions regarding required disclosure.      Internal
    Control Over Financial Reporting
  Regulation S-K
  Regulation S-K
  Rule 13a-15(f)
   86




---



##### Table of Contents



CEO and
    CFO Certifications
  Form 10-K.
  Item 9B.
    OTHER
    INFORMATION    PART III
  Item 10.
    DIRECTORS,
    EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE  Election of
    Directors Board of
    Directors, Nominees for Election  Term
    Expiring 2011, Incumbent Directors  Term
    Expiring 2009, Incumbent Directors  Term
    Expiring 2010, Committees of the Board of
    Directors  Audit Committee, Codes of
    Business Conduct and Ethics  Code of Ethical Conduct
    for Chief Executive Officer and Senior Financial Officers, Codes of Business Conduct and
    Ethics  Copies, Executive Officers Identification of Executive Officers Additional Information Section 16(a) Beneficial Ownership Reporting
    Compliance
  Item 11.
    EXECUTIVE
    COMPENSATION  Election of
    Directors Compensation of
    Directors Committees of the Board
    of Directors  Compensation Committee Interlocks and
    Insider Participation Executive Compensation Executive Compensation
    Tables, Compensation Discussion
    and Analysis Employment Agreement
    with James A. Rubright Compensation Committee Report
  Item 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS  Common Stock
    Ownership by Management and Principal Shareholders Executive
    Compensation Equity
    Compensation Plan Information
  Item 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  Certain
    Transactions Election of Directors Corporate Governance  Director
    Independence
  Item 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES  Independent
    Registered Public Accounting Firm Fees Audit Committee
    Pre-Approval of Services by the Independent Registered Public
    Accounting Firm
 87




---



##### Table of Contents



PART IV
  Item 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  (a)1.
    Financial
    Statements.    PageConsolidated Statements of Income for the years ended
    September 30, 2007, 2006, and 2005


37Consolidated Balance Sheets as of September 30, 2007 and
    2006


38Consolidated Statements of Shareholders Equity for the
    years ended September 30, 2007, 2006, and 2005


39Consolidated Statements of Cash Flows for the years ended
    September 30, 2007, 2006, and 2005


40Notes to Consolidated Financial Statements


42Report of Independent Registered Public Accounting Firm


82Report of Independent Registered Public Accounting Firm on
    Internal Control Over Financial Reporting


83Report of Management on Responsibility for Financial Information
    and for Establishing and Maintaining Adequate Internal Control
    Over Financial Reporting


84   2.
    Financial
    Statement Schedule of Rock-Tenn Company.        3.
    Exhibits.  See separate Exhibit Index attached hereto and
    incorporated herein.
  (b)
    See
    Item 15(a)(3) and separate Exhibit Index attached
    hereto and incorporated herein.  (c)
    Not
    applicable. 88




---



##### Table of Contents



SIGNATURES
      Dated: November 27, 2007

By: /s/  JAMES
    A. RUBRIGHTJames A. RubrightChairman of the Board and
    Chief Executive Officer     Signature

Title

Date/s/  JAMES
    A. RUBRIGHTJames
    A. Rubright

Director, Chairman of the Board and Chief Executive Officer
    (Principal Executive Officer)

November 27, 2007/s/  STEVEN
    C. VOORHEESSteven
    C. Voorhees

Executive Vice President and Chief Financial Officer (Principal
    Financial Officer)

November 27, 2007/s/  A.
    STEPHEN MEADOWSA.
    Stephen Meadows

Chief Accounting Officer (Principal Accounting Officer)

November 27, 2007/s/  STEPHEN
    G. ANDERSONStephen
    G. Anderson

Director

November 27, 2007/s/  J.
    HYATT BROWNJ.
    Hyatt Brown

Director

November 27, 2007/s/  ROBERT
    B. CURREYRobert
    B. Currey

Director

November 27, 2007/s/  RUSSELL
    M. CURREYRussell
    M. Currey

Director

November 27, 2007/s/  G.
    STEPHEN FELKERG.
    Stephen Felker

Director

November 27, 2007/s/  LAWRENCE
    L. GELLERSTEDT, IIILawrence
    L. Gellerstedt, III

Director

November 27, 2007/s/  JOHN
    D. HOPKINSJohn
    D. Hopkins

Director

November 27, 2007/s/  JOHN
    W. SPIEGELJohn
    W. Spiegel

Director

November 27, 2007Bettina
    M. Whyte

Director/s/  JAMES
    E. YOUNGJames
    E. Young

Director

November 27, 2007  89




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##### Table of Contents



INDEX TO
    EXHIBITS
  ExhibitNumber



Description of Exhibits3
.1



Restated and Amended Articles of Incorporation of the Registrant
    (incorporated by reference to Exhibit 3.1 to the
    Registrants Registration Statement on
    Form S-1,
    File
    No. 33-73312).3
.2



Articles of Amendment to the Registrants Restated and
    Amended Articles of Incorporation (incorporated by reference to
    Exhibit 3.2 of the Registrants Annual Report on
    Form 10-K
    for the year ended September 30, 2000).3
.3



Bylaws of the Registrant (incorporated by reference to
    Exhibit 3.3 of the Registrants Annual Report on
    Form 10-K
    for the year ended September 30, 2003).3
.4



Amendment to Bylaws of the Registrant. (incorporated by
    reference to Exhibit 3.4 of the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended June 30, 2007).4
.1



Credit Agreement dated as of June 6, 2005, among the
    Registrant; Rock-Tenn Company of Canada; Wachovia Bank, National
    Association and Bank of America, N.A., acting through its Canada
    branch, as the lenders; Wachovia Capital Markets, LLC, SunTrust
    Robinson Humphrey, a division of SunTrust Capital Markets, Inc.,
    and Banc of America Securities, as the joint book runners;
    Wachovia Capital Markets, LLC and SunTrust Robinson Humphrey, a
    division of SunTrust Capital Markets, Inc., as the joint lead
    arrangers; SunTrust Bank, as syndication agent; Bank of America,
    N.A., as documentation agent; and the following subsidiaries of
    Rock-Tenn Company, as guarantors: Rock-Tenn Converting Company,
    Waldorf Corporation, PCPC, Inc., Rock-Tenn Company, Mill
    Division, LLC, Rock-Tenn Packaging and Paperboard, LLC,
    Rock-Tenn Mill Company, LLC, Rock-Tenn Shared Services, LLC,
    Rock-Tenn Services Inc., Alliance Display, LLC, Rock-Tenn
    Packaging Company, Rock-Tenn Company of Texas, Rock-Tenn
    Partition Company, Rock-Tenn Real Estate, LLC, Ling Industries
    Inc.,
    9124-1232
    Quebec Inc., Groupe Cartem Wilco Inc., Wilco Inc., and Ling
    Quebec Inc. (incorporated by reference to Exhibit 4.2 of
    the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2005).4
.2



The Registrant agrees to furnish to the Securities and Exchange
    Commission, upon request, a copy of any instrument defining the
    rights of holders of long-term debt of the Registrant and all of
    its consolidated subsidiaries and unconsolidated subsidiaries
    for which financial statements are required to be filed with the
    Securities and Exchange Commission.4
.3



Indenture between Rock-Tenn Company and SunTrust Bank, as
    successor trustee to Trust Company Bank (incorporated by
    reference to Exhibit 4.1 of the Registrants
    Registration Statement on
    Form S-3,
    File
    No. 33-93934).*10
.1



Rock-Tenn Company 1993 Employee Stock Option Plan and Amendment
    Number One to the Rock-Tenn Company 1993 Employee Stock Option
    Plan (incorporated by reference to Exhibits 99.1 and 99.2,
    respectively, to the Registrants Registration Statement on
    Form S-8,
    File
    No. 333-77237).*10
.2



Rock-Tenn Company Supplemental Executive Retirement Plan
    Effective as of October 1, 1994 (incorporated by reference
    to Exhibit 10.5 of the Registrants Annual Report on
    Form 10-K
    for the year ended September 30, 2000).*10
.3



2000 Incentive Stock Plan (incorporated by reference to the
    Registrants definitive Proxy Statement for the 2001 Annual
    Meeting of Shareholders filed with the SEC on December 18,
    2000).*10
.4



1993 Employee Stock Purchase Plan as Amended and Restated
    (incorporated by reference to Exhibit 99.3 to the
    Registrants Registration Statement on
    Form S-8,
    File
    No. 333-77237),
    as amended by Amendment No. One to 1993 Employee Stock
    Purchase Plan (incorporated by reference to Exhibit 10.4 of
    the Registrants Annual Report on
    Form 10-K
    for the year ended September 30, 2003), and as further
    amended by Amendment No. Two to 1993 Employee Stock
    Purchase Plan (incorporated by reference to Exhibit 10.1 of
    the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended December 31, 2003), and as further
    amended by Amendment No. Three to 1993 Employee Stock
    Purchase Plan (incorporated by reference to Exhibit 10.4 of
    the Registrants Annual Report on
    Form 10-K
    for the year ended September 30, 2004).*10
.5



Rock-Tenn Company Annual Executive Bonus Program (incorporated
    by reference to the Registrants definitive Proxy Statement
    for the 2002 Annual Meeting of Shareholders filed with the SEC
    on December 19, 2001).*10
.6



Rock-Tenn Company Supplemental Retirement Savings Plan as
    Effective as of May 15, 2003 (incorporated by reference to
    Exhibit 4.1 to the Registrants Registration Statement
    on
    Form S-8,
    File
    No. 333-104870).




---



##### Table of Contents



ExhibitNumber



Description of Exhibits*10
.7



Amended and Restated Employment Agreement between Rock-Tenn
    Converting Company and James L. Einstein, dated as of
    February 21, 2003 (incorporated by reference to
    Exhibit 10.7 of the Registrants Annual Report on
    Form 10-K
    for the year ended September 30, 2003).*10
.8



2004 Incentive Stock Plan (incorporated by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 10-K
    filed with the SEC on February 3, 2005).*10
.9



2005 Shareholder Value Creation Incentive Plan
    (incorporated by reference to Exhibit 4.2 of the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2005).10
.10



Amended and Restated Credit and Security Agreement dated as of
    October 26, 2005 among Rock-Tenn Financial, Inc., as
    Borrower, Rock-Tenn Converting Company, as Servicer, the
    Liquidity Banks from time to time party hereto, SunTrust Capital
    Markets, Inc., as TPF Agent and a Co-Agent and Wachovia Bank,
    National Association, as Blue Ridge Agent, a Co-Agent and
    Administrative Agent (incorporated by reference to
    Exhibit 10.1 of the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended December 31, 2005).10
.11



Amended and Restated Receivables Sale Agreement dated as of
    October 26, 2005 among Rock-Tenn Company, as Parent,
    Rock-Tenn Company of Texas, Rock-Tenn Converting Company,
    Rock-Tenn Mill Company, LLC, Rock-Tenn Packaging and Paperboard,
    LLC, PCPC, Inc. and Waldorf Corporation, as Originators, and
    Rock-Tenn Financial, Inc., as Buyer (incorporated by reference
    to Exhibit 10.2 of the Registrants Quarterly Report
    on
    Form 10-Q
    for the quarter ended December 31, 2005).*10
.12



Amendment to Rock-Tenn Company Supplemental Executive Retirement
    Plan Effective as of November 11, 2005 (incorporated by
    reference to Exhibit 10.3 of the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended December 31, 2005).*10
.13



Amended and Restated Rock-Tenn Company Supplemental Retirement
    Savings Plan Effective as of January 1, 2006 (incorporated
    by reference to Exhibit 10.4 of the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended December 31, 2005).*10
.14



Employment Agreement between Rock-Tenn Company and James A.
    Rubright, dated as of February 6, 2006 (incorporated by
    reference to Exhibit 10.1 of the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2006).10
.15



Amendment to Amended and Restated Credit and Security Agreement
    dated as of October 25, 2006 among Rock-Tenn Financial,
    Inc., as Borrower, Rock-Tenn Converting Company, as Servicer,
    Variable Funding Capital Company LLC, as assignee of Blue Ridge
    Asset Funding Corporation, Three Pillars Funding LLC and
    SunTrust Bank as liquidity provider to TPF, SunTrust Capital
    Markets, Inc., as agent for the TPF Group, and Wachovia Bank,
    National Association, as liquidity provider to VFCC, agent for
    the VFCC Group and Administrative Agent (incorporated by
    reference to Exhibit 10.15 of the Registrants Annual
    Report on
    Form 10-K
    for the year ended September 30, 2006).10
.16



Second Amendment to Amended and Restated Credit and Security
    Agreement dated as of November 17, 2006 among Rock-Tenn
    Financial, Inc., as Borrower, Rock-Tenn Converting Company, as
    Servicer, Variable Funding Capital Company LLC, as assignee of
    Blue Ridge Asset Funding Corporation, Three Pillars Funding LLC
    and SunTrust Bank as liquidity provider to TPF, SunTrust Capital
    Markets, Inc., as agent for the TPF Group, and Wachovia Bank,
    National Association, as liquidity provider to VFCC, agent for
    the VFCC Group and Administrative Agent (incorporated by
    reference to Exhibit 10.1 of the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2007).*10
.17



Amendment Number One to Rock-Tenn Company 2004 Incentive Stock
    Plan (incorporated by reference to Exhibit 10.1 of the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2007).*10
.18



Rock-Tenn Company 1993 Employee Stock Purchase Plan, as Amended
    and Restated (incorporated by reference to Exhibit 4.5 to
    the Registrants Registration Statement on
    Form S-8,
    File
    No. 333-140597).12




Statement re: Computation of Ratio of Earnings to Fixed Charges.21




Subsidiaries of the Registrant.23




Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.




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##### Table of Contents



ExhibitNumber



Description of Exhibits31
.1



Certification Accompanying Periodic Report Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002, executed by
    James A. Rubright, Chairman of the Board and Chief Executive
    Officer of Rock-Tenn Company.31
.2



Certification Accompanying Periodic Report Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002, executed by
    Steven C. Voorhees, Executive Vice President and Chief Financial
    Officer of Rock-Tenn Company.   Additional
    Exhibits.
  No. 33-8238,
  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 James A. Rubright, Chairman of the Board and
    Chief Executive Officer of Rock-Tenn Company, and by Steven C.
    Voorhees, Executive Vice President and Chief Financial Officer
    of Rock-Tenn Company.     *
    
    Management contract or compensatory plan or arrangement.




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##### Table of Contents



SCHEDULE II
  ROCK-TENN
    COMPANY
  September 30,
    2007
 (In
    millions)
  Balance At

Charged to





Balance AtBeginning

Costs and





End ofDescription

of Period

Expenses

Other

Deductions

PeriodYear ended September 30, 2007:Allowance for Doubtful Accounts, Returns and Allowances, and
    Discounts

$
5.2


$
22.6


$



$
(22.4
)

$
5.4Restructuring and Other Reserve for Facility Closures and
    Consolidation


2.1



2.3







(2.0
)


2.4Deferred Tax Assets  Valuation Allowance


3.5



0.6







(0.6
)


3.5Year ended September 30, 2006:Allowance for Doubtful Accounts, Returns and Allowances, and
    Discounts

$
5.1


$
24.7


$



$
(24.6
)

$
5.2Restructuring and Other Reserve for Facility Closures and
    Consolidation


1.6



2.4







(1.9
)


2.1Deferred Tax Assets  Valuation Allowance


1.7



1.8











3.5Year ended September 30, 2005:Allowance for Doubtful Accounts, Returns and Allowances, and
    Discounts

$
6.4


$
18.6


$
0.9


$
(20.8
)

$
5.1Restructuring and Other Reserve for Facility Closures and
    Consolidation


1.2



2.6







(2.2
)


1.6Deferred Tax Assets  Valuation Allowance


1.5



0.2











1.7