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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to
 COMMISSION FILE NUMBER: 001-33988
 Graphic Packaging Holding Company
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    26-0405422
(I.R.S. employer
identification no.)814 Livingston Court 
Marietta, Georgia
(Address of principal executive offices)
    
    30067
(Zip Code)
 (770) 644-3000
  þ o
  o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o
  o þ




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Information Concerning Forward-Looking Statements
  2




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TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATION
    
    
    4ITEM 1. FINANCIAL STATEMENTS
    
    
    4ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    23ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    
    
    31ITEM 4. CONTROLS AND PROCEDURES
    
    
    32PART II  OTHER INFORMATION
    
    
    32ITEM 1. LEGAL PROCEEDINGS
    
    
    32ITEM 1A. RISK FACTORS
    
    
    32ITEM 6. EXHIBITS
    
    
    33SIGNATURES
    
    
    34EX-4.1EX-10.1EX-10.2EX-31.1EX-31.2EX-32.1EX-32.2
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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months EndedMarch 31,In millions, except per share amounts
    
    2011
    
    2010Net Sales
    
    $
    1,000.6
    
    
    $
    1,004.1Cost of Sales
    
    
    842.4
    
    
    
    858.3Selling, General and Administrative
    
    
    89.5
    
    
    
    77.4Other Expense, Net
    
    
    0.1
    
    
    
    0.3Restructuring and Other Special Charges
    
    
    
    
    
    
    8.5Income from Operations
    
    
    68.6
    
    
    
    59.6Interest Expense, Net
    
    
    (39.3
    )
    
    
    (45.0
    )Income before Income Taxes and Equity Income of Unconsolidated Entities
    
    
    29.3
    
    
    
    14.6Income Tax Expense
    
    
    (2.9
    )
    
    
    (8.6
    )Income before Equity Income of Unconsolidated Entities
    
    
    26.4
    
    
    
    6.0Equity Income of Unconsolidated Entities
    
    
    0.3
    
    
    
    0.3Net Income
    
    $
    26.7
    
    
    $
    6.3Income Per Share  Basic
    
    $
    0.08
    
    
    $
    0.02Income Per Share  Diluted
    
    $
    0.08
    
    
    $
    0.02Weighted Average Number of Shares Outstanding  Basic
    
    
    344.2
    
    
    
    343.4Weighted Average Number of Shares Outstanding  Diluted
    
    
    349.8
    
    
    
    346.9
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GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 March 31,
    
    December 31,In millions, except share and per share amounts
    
    2011
    
    2010ASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    109.1
    
    
    $
    138.7Receivables, Net
    
    
    409.2
    
    
    
    382.2Inventories, Net
    
    
    490.5
    
    
    
    417.3Other Current Assets
    
    
    72.8
    
    
    
    75.4Total Current Assets
    
    
    1,081.6
    
    
    
    1,013.6Property, Plant and Equipment, Net
    
    
    1,623.0
    
    
    
    1,641.5Goodwill
    
    
    1,206.3
    
    
    
    1,205.2Intangible Assets, Net
    
    
    565.5
    
    
    
    576.6Other Assets
    
    
    47.7
    
    
    
    47.7Total Assets
    
    $
    4,524.1
    
    
    $
    4,484.6LIABILITIESCurrent Liabilities:Short-Term Debt and Current Portion of Long-Term Debt
    
    $
    26.9
    
    
    $
    26.0Accounts Payable
    
    
    359.0
    
    
    
    361.5Interest Payable
    
    
    41.3
    
    
    
    28.4Other Accrued Liabilities
    
    
    165.4
    
    
    
    179.8Total Current Liabilities
    
    
    592.6
    
    
    
    595.7Long-Term Debt
    
    
    2,553.1
    
    
    
    2,553.1Deferred Income Tax Liabilities
    
    
    244.2
    
    
    
    241.1Other Noncurrent Liabilities
    
    
    342.5
    
    
    
    347.7Total Liabilities
    
    
    3,732.4
    
    
    
    3,737.6SHAREHOLDERS EQUITYPreferred Stock, par value $.01 per share; 100,000,000 shares authorized; no shares issued or outstanding
    
    
    
    
    
    
    Common Stock, par value $.01 per share; 1,000,000,000 shares authorized; 343,730,747 and 343,698,778
shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively
    
    
    3.4
    
    
    
    3.4Capital in Excess of Par Value
    
    
    1,967.4
    
    
    
    1,965.2Accumulated Deficit
    
    
    (981.6
    )
    
    
    (1,008.3
    )Accumulated Other Comprehensive Loss
    
    
    (197.5
    )
    
    
    (213.3
    )Total Shareholders Equity
    
    
    791.7
    
    
    
    747.0Total Liabilities and Shareholders Equity
    
    $
    4,524.1
    
    
    $
    4,484.6
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GRAPHIC PACKAGING HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months EndedMarch 31,In millions
    
    2011
    
    2010CASH FLOWS FROM OPERATING ACTIVITIES:Net Income
    
    $
    26.7
    
    
    $
    6.3Non-cash Items Included in Net Income:Depreciation and Amortization
    
    
    71.0
    
    
    
    74.3Deferred Income Taxes
    
    
    2.8
    
    
    
    7.9Amount of Postemployment Expense Less Than Funding
    
    
    (3.0
    )
    
    
    (1.4
    )Other, Net
    
    
    7.7
    
    
    
    7.0Changes in Operating Assets and Liabilities
    
    
    (99.1
    )
    
    
    (119.3
    )Net Cash Provided by (Used in) Operating Activities
    
    
    6.1
    
    
    
    (25.2
    )CASH FLOWS FROM INVESTING ACTIVITIES:Capital Spending
    
    
    (36.8
    )
    
    
    (18.2
    )Other, Net
    
    
    (0.8
    )
    
    
    (1.1
    )Net Cash Used in Investing Activities
    
    
    (37.6
    )
    
    
    (19.3
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings under Revolving Credit Facilities
    
    
    11.2
    
    
    
    96.0Payments on Revolving Credit Facilities
    
    
    (10.6
    )
    
    
    (95.8
    )Other, Net
    
    
    0.1
    
    
    
    Net Cash Provided by Financing Activities
    
    
    0.7
    
    
    
    0.2Effect of Exchange Rate Changes on Cash
    
    
    1.2
    
    
    
    0.1Net Decrease in Cash and Cash Equivalents
    
    
    (29.6
    )
    
    
    (44.2
    )Cash and Cash Equivalents at Beginning of Period
    
    
    138.7
    
    
    
    149.8CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    109.1
    
    
    $
    105.6
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GRAPHIC PACKAGING HOLDING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 1  GENERAL INFORMATION
 Nature of Business and Basis of Presentation
      Adoption of New Accounting Standards
 Revenue Recognition
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NOTE 2  INVENTORIES, NET
  March 31,
    
    December 31,In millions
    
    2011
    
    2010Finished Goods
    
    $
    277.1
    
    
    $
    231.7Work in Progress
    
    
    46.0
    
    
    
    36.5Raw Materials
    
    
    119.8
    
    
    
    102.0Supplies
    
    
    64.7
    
    
    
    65.6507.6
    
    
    
    435.8Less: Allowance
    
    
    (17.1
    )
    
    
    (18.5
    )Total
    
    $
    490.5
    
    
    $
    417.3
 NOTE 3  DEBT
 Note
6 Debt
  March 31,
    
    December 31,In millions
    
    2011
    
    2010Senior Notes with interest payable semi-annually at 7.875%, payable in 2018 ($250.0 million face amount)
    
    $
    246.1
    
    
    $
    246.0Senior Notes with interest payable semi-annually at 9.5%, payable in 2017 ($425.0 million face amount)
    
    
    423.4
    
    
    
    423.5Senior Subordinated Notes with interest payable semi-annually at 9.5%, payable in 2013
    
    
    73.3
    
    
    
    73.3Senior Secured Term Loan Facility with interest payable at various dates at floating rates (2.30% at March 31, 2011) payable through 2014
    
    
    837.7
    
    
    
    837.7Senior Secured Term Loan Facility with interest payable at various dates at floating rates (3.05% at March 31, 2011) payable through 2014
    
    
    989.9
    
    
    
    989.9Senior Secured Revolving Facility with interest payable at various dates at floating rates (2.52% at March 31, 2011) payable in 2013
    
    
    
    
    
    
    Other
    
    
    2.4
    
    
    
    2.02,572.8
    
    
    
    2,572.4Less: current portion
    
    
    19.7
    
    
    
    19.3Total
    
    $
    2,553.1
    
    
    $
    2,553.1
  Total
    
    Total
    
    TotalIn millions
    
    Commitments
    
    Outstanding
    
    Available(a)Revolving Credit Facility
    
    $
    400.0
    
    
    $
    
    
    
    $
    363.6International Facilities
    
    
    17.1
    
    
    
    7.2
    
    
    
    9.9Total
    
    $
    417.1
    
    
    $
    7.2
    
    
    $
    373.5
  (a)
    
    In accordance with its debt agreements, the Companys availability under its Revolving Credit
Facility has been reduced by the amount of standby letters of credit issued of $36.4 million
as of March 31, 2011. These letters of credit are primarily used as security against its
self-insurance obligations and workers compensation obligations. These letters of credit
expire at various dates in 2012 unless extended.
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NOTE 4  STOCK INCENTIVE PLANS
  Stock Awards, Restricted Stock and Restricted Stock Units
   Weighted Avg.Grant Date FairShares in thousands
    
    Shares
    
    Value Per ShareRSUs  Employees
    
    
    3,946
    
    
    $
    5.17
  NOTE 5  PENSIONS AND OTHER POSTRETIREMENT BENEFITS
   9




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Pension and Postretirement Expense
  Postretirement HealthPension Benefits
    
    Care BenefitsThree Months Ended March 31,In millions
    
    2011
    
    2010
    
    2011
    
    2010Components of Net Periodic Cost:Service Cost
    
    $
    4.8
    
    
    $
    5.0
    
    
    $
    0.3
    
    
    $
    0.3Interest Cost
    
    
    13.1
    
    
    
    12.7
    
    
    
    0.7
    
    
    
    0.7Expected Return on Plan Assets
    
    
    (14.3
    )
    
    
    (12.7
    )
    
    
    
    
    
    
    Amortization:Prior Service Cost
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    Actuarial Loss (Gain)
    
    
    3.0
    
    
    
    2.3
    
    
    
    (0.2
    )
    
    
    (0.5
    )Net Periodic Cost
    
    $
    6.7
    
    
    $
    7.4
    
    
    $
    0.8
    
    
    $
    0.5
 Employer Contributions
   NOTE 6  FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT
 Derivatives and Hedging
 Interest Rate Risk
    10




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Commodity Risk
   Foreign Currency Risk
   Derivatives not Designated as Hedges
  Fair Value of Financial Instruments
   11




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Derivative
    
    DerivativeAssets
    
    LiabilitiesBalance Sheet
    
    March 31,
    
    December 31,
    
    Balance Sheet
    
    March 31,
    
    December 31,In millions
    
    Location
    
    2011
    
    2010
    
    Location
    
    2011
    
    2010Derivative Contracts
Designated as Hedging
InstrumentsCommodity Contracts
    
    Other Current Assets
    
    $
    
    
    
    $
    0.1
    
    
    Other Accrued Liabilities
    
    $
    0.3
    
    
    $
    0.8Foreign Currency Contracts
    
    Other Current Assets
    
    
    0.3
    
    
    
    0.7
    
    
    Other Accrued Liabilities and Other Noncurrent Liabilities
    
    
    0.8
    
    
    
    0.6Interest Rate Swap Agreements
    
    Other Current Assets
    
    
    
    
    
    
    
    
    
    Other Accrued Liabilities, Other Noncurrent Liabilities, and Interest Payable
    
    
    26.1
    
    
    
    33.3Total Derivative Contracts
    
    
    
    $
    0.3
    
    
    $
    0.8
    
    
    
    
    $
    27.2
    
    
    $
    34.7
  Effect of Derivative Instruments
  Amount of Loss (Gain)
    
    
    
    Amount of Loss
    
    
    
    Amount of Loss (Gain)Recognized in
    
    
    
    Recognized in Statement of
    
    
    
    Recognized in Statement ofAccumulated Other
    
    
    
    Operations
    
    
    
    OperationsComprehensive Loss
    
    Location
    
    (Effective Portion)
    
    Location
    
    (Ineffective Portion)Three Months Ended
    
    in Statement of
    
    Three Months Ended
    
    in Statement of
    
    Three Months EndedMarch 31,
    
    Operations
    
    March 31,
    
    Operations
    
    March 31,(Effective
    
    
    
    
    
    
    
    
    
    (IneffectiveIn millions
    
    2011
    
    2010
    
    Portion)
    
    2011
    
    2010
    
    Portion)
    
    2011
    
    2010Commodity
Contracts
    
    $
    0.9
    
    
    $
    7.0
    
    
    Cost of Sales
    
    $
    1.7
    
    
    $
    0.1
    
    
    Cost of Sales
    
    $
    
    
    
    $
    0.2Foreign Currency
Contracts
    
    
    0.7
    
    
    
    (1.5
    )
    
    Other Expense, Net
    
    
    0.4
    
    
    
    0.8
    
    
    Other Expense, Net
    
    
    
    
    
    
    Interest Rate Swap Agreements
    
    
    0.8
    
    
    
    12.2
    
    
    Interest Expense, Net
    
    
    7.7
    
    
    
    9.5
    
    
    Interest Expense, Net
    
    
    
    
    
    
    (0.2
    )Total
    
    $
    2.4
    
    
    $
    17.7
    
    
    
    
    $
    9.8
    
    
    $
    10.4
    
    
    
    
    $
    
    
    
    $
    
  In millions
    
    
    
    2011
    
    2010Foreign Currency Contracts
    
    Other Expense, Net
    
    $
    0.7
    
    
    $
    0.1
 12




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Accumulated Derivative Instruments (Loss) Gain
  In millionsBalance at December 31, 2010
    
    $
    (27.4
    )Reclassification to earnings
    
    
    9.8Current period change in fair value
    
    
    (2.4
    )Balance at March 31, 2011
    
    $
    (20.0
    )
  NOTE 7  INCOME TAXES
  NOTE 8  COMPREHENSIVE INCOME (LOSS)
  Three Months EndedMarch 31,In millions
    
    2011
    
    2010Net Income
    
    $
    26.7
    
    
    $
    6.3Other Comprehensive Income (Loss):Derivative Instruments Income (Loss)
    
    
    7.4
    
    
    
    (7.3
    )Pension Benefit Plans
    
    
    3.1
    
    
    
    2.4Postretirement Benefit Plans
    
    
    (0.2
    )
    
    
    (0.5
    )Postemployment Benefit Plans
    
    
    
    
    
    
    0.1Currency Translation Adjustment
    
    
    5.5
    
    
    
    (0.8
    )Total Comprehensive Income
    
    $
    42.5
    
    
    $
    0.2
 NOTE 9  ENVIRONMENTAL AND LEGAL MATTERS
 Environmental Matters
    13




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Legal Matters
  NOTE
10  BUSINESS SEGMENT INFORMATION
     Three Months EndedMarch 31,In millions
    
    2011
    
    2010NET SALES:Paperboard Packaging
    
    $
    825.0
    
    
    $
    834.6Flexible Packaging
    
    
    175.6
    
    
    
    169.5Total
    
    $
    1,000.6
    
    
    $
    1,004.1INCOME (LOSS) FROM OPERATIONS:Paperboard Packaging
    
    $
    74.4
    
    
    $
    75.7Flexible Packaging
    
    
    6.0
    
    
    
    6.7Corporate
    
    
    (11.8
    )
    
    
    (22.8
    )Total
    
    $
    68.6
    
    
    $
    59.6
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NOTE
11  EARNINGS PER SHARE
 Three Months EndedMarch 31,In millions, except per share data
    
    2011
    
    2010Net Income
    
    $
    26.7
    
    
    $
    6.3Weighted Average Shares:Basic
    
    
    344.2
    
    
    
    343.4Dilutive Effect of Stock Awards
    
    
    5.6
    
    
    
    3.5Diluted
    
    
    349.8
    
    
    
    346.9Earnings Per Share  Basic and Diluted
    
    $
    0.08
    
    
    $
    0.02
  Three Months EndedMarch 31,2011
    
    2010Employee Stock Options
    
    
    4,504,572
    
    
    
    4,892,072
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NOTE 12  GUARANTOR CONSOLIDATING FINANCIAL STATEMENTS
  Three Months Ended March 31, 2011Combined
    
    CombinedSubsidiary
    
    Guarantor
    
    Nonguarantor
    
    ConsolidatingIn millions
    
    Parent
    
    Issuer
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedNet Sales
    
    $
    
    
    
    $
    811.2
    
    
    $
    136.9
    
    
    $
    107.6
    
    
    $
    (55.1
    )
    
    $
    1,000.6Cost of Sales
    
    
    
    
    
    
    680.5
    
    
    
    119.2
    
    
    
    97.8
    
    
    
    (55.1
    )
    
    
    842.4Selling, General and Administrative
    
    
    
    
    
    
    72.9
    
    
    
    9.0
    
    
    
    7.6
    
    
    
    
    
    
    
    89.5Other Expense (Income), Net
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    0.1Income from Operations
    
    
    
    
    
    
    57.9
    
    
    
    8.7
    
    
    
    2.0
    
    
    
    
    
    
    
    68.6Interest Expense, Net
    
    
    
    
    
    
    (39.0
    )
    
    
    
    
    
    
    (0.3
    )
    
    
    
    
    
    
    (39.3
    )Income before Income Taxes and Equity
Income of Unconsolidated Entities
    
    
    
    
    
    
    18.9
    
    
    
    8.7
    
    
    
    1.7
    
    
    
    
    
    
    
    29.3Income Tax Expense
    
    
    
    
    
    
    (2.8
    )
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (2.9
    )Income before Equity Income of
Unconsolidated Entities
    
    
    
    
    
    
    16.1
    
    
    
    8.7
    
    
    
    1.6
    
    
    
    
    
    
    
    26.4Equity Income of Unconsolidated Entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    0.3Equity in Net Earnings of Subsidiaries
    
    
    26.7
    
    
    
    10.6
    
    
    
    (0.4
    )
    
    
    
    
    
    
    (36.9
    )
    
    
    Net Income
    
    $
    26.7
    
    
    $
    26.7
    
    
    $
    8.3
    
    
    $
    1.9
    
    
    $
    (36.9
    )
    
    $
    26.7
 16




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Three Months Ended March 31, 2010Combined
    
    CombinedSubsidiary
    
    Guarantor
    
    Nonguarantor
    
    ConsolidatingIn millions
    
    Parent
    
    Issuer
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedNet Sales
    
    $
    
    
    
    $
    808.0
    
    
    $
    133.5
    
    
    $
    98.8
    
    
    $
    (36.2
    )
    
    $
    1,004.1Cost of Sales
    
    
    
    
    
    
    686.2
    
    
    
    115.6
    
    
    
    92.7
    
    
    
    (36.2
    )
    
    
    858.3Selling, General and Administrative
    
    
    
    
    
    
    61.0
    
    
    
    8.7
    
    
    
    7.7
    
    
    
    
    
    
    
    77.4Other Expense (Income), Net
    
    
    
    
    
    
    1.1
    
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    0.3Restructuring and Other Special Charges
    
    
    
    
    
    
    8.4
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    8.5Income (Loss) from Operations
    
    
    
    
    
    
    51.3
    
    
    
    9.1
    
    
    
    (0.8
    )
    
    
    
    
    
    
    59.6Interest Expense, Net
    
    
    
    
    
    
    (44.6
    )
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    (45.0
    )Income (Loss) before Income Taxes and
Equity Income of Unconsolidated
Entities
    
    
    
    
    
    
    6.7
    
    
    
    9.1
    
    
    
    (1.2
    )
    
    
    
    
    
    
    14.6Income Tax Expense
    
    
    
    
    
    
    (7.7
    )
    
    
    
    
    
    
    (0.9
    )
    
    
    
    
    
    
    (8.6
    )(Loss) Income before Equity Income of
Unconsolidated Entities
    
    
    
    
    
    
    (1.0
    )
    
    
    9.1
    
    
    
    (2.1
    )
    
    
    
    
    
    
    6.0Equity Income of Unconsolidated Entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    0.3Equity in Net Earnings of Subsidiaries
    
    
    6.3
    
    
    
    7.3
    
    
    
    1.3
    
    
    
    
    
    
    
    (14.9
    )
    
    
    Net Income (Loss)
    
    $
    6.3
    
    
    $
    6.3
    
    
    $
    10.4
    
    
    $
    (1.8
    )
    
    $
    (14.9
    )
    
    $
    6.3
 17




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##### Table of Contents



March 31, 2011Combined
    
    CombinedSubsidiary
    
    Guarantor
    
    Nonguarantor
    
    ConsolidatingIn millions
    
    Parent
    
    Issuer
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    
    
    
    $
    74.5
    
    
    $
    
    
    
    $
    34.6
    
    
    $
    
    
    
    $
    109.1Receivables, Net
    
    
    
    
    
    
    282.9
    
    
    
    51.8
    
    
    
    74.5
    
    
    
    
    
    
    
    409.2Inventories, Net
    
    
    
    
    
    
    363.7
    
    
    
    66.3
    
    
    
    60.5
    
    
    
    
    
    
    
    490.5Intercompany
    
    
    11.0
    
    
    
    148.9
    
    
    
    (99.1
    )
    
    
    (60.8
    )
    
    
    
    
    
    
    Other Current Assets
    
    
    
    
    
    
    67.6
    
    
    
    1.0
    
    
    
    4.2
    
    
    
    
    
    
    
    72.8Total Current Assets
    
    
    11.0
    
    
    
    937.6
    
    
    
    20.0
    
    
    
    113.0
    
    
    
    
    
    
    
    1,081.6Property, Plant and Equipment, Net
    
    
    
    
    
    
    1,443.1
    
    
    
    116.6
    
    
    
    63.5
    
    
    
    (0.2
    )
    
    
    1,623.0Investment in Consolidated Subsidiaries
    
    
    780.7
    
    
    
    242.2
    
    
    
    2.8
    
    
    
    141.4
    
    
    
    (1,167.1
    )
    
    
    Goodwill
    
    
    
    
    
    
    1,170.8
    
    
    
    
    
    
    
    35.5
    
    
    
    
    
    
    
    1,206.3Intangible Assets, Net
    
    
    
    
    
    
    553.7
    
    
    
    
    
    
    
    11.8
    
    
    
    
    
    
    
    565.5Other Assets
    
    
    
    
    
    
    35.9
    
    
    
    0.1
    
    
    
    11.7
    
    
    
    
    
    
    
    47.7Total Assets
    
    $
    791.7
    
    
    $
    4,383.3
    
    
    $
    139.5
    
    
    $
    376.9
    
    
    $
    (1,167.3
    )
    
    $
    4,524.1LIABILITIESCurrent Liabilities:Short-Term Debt and Current Portion of Long-Term
Debt
    
    $
    
    
    
    $
    18.9
    
    
    $
    
    
    
    $
    8.0
    
    
    $
    
    
    
    $
    26.9Accounts Payable
    
    
    
    
    
    
    270.0
    
    
    
    48.3
    
    
    
    40.7
    
    
    
    
    
    
    
    359.0Interest Payable
    
    
    
    
    
    
    41.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41.3Other Accrued Liabilities
    
    
    
    
    
    
    142.2
    
    
    
    7.8
    
    
    
    15.4
    
    
    
    
    
    
    
    165.4Total Current Liabilities
    
    
    
    
    
    
    472.4
    
    
    
    56.1
    
    
    
    64.1
    
    
    
    
    
    
    
    592.6Long-Term Debt
    
    
    
    
    
    
    2,552.3
    
    
    
    
    
    
    
    0.8
    
    
    
    
    
    
    
    2,553.1Deferred Income Tax Liabilities
    
    
    
    
    
    
    240.5
    
    
    
    
    
    
    
    3.7
    
    
    
    
    
    
    
    244.2Other Noncurrent Liabilities
    
    
    
    
    
    
    337.4
    
    
    
    
    
    
    
    5.1
    
    
    
    
    
    
    
    342.5Total Liabilities
    
    
    
    
    
    
    3,602.6
    
    
    
    56.1
    
    
    
    73.7
    
    
    
    
    
    
    
    3,732.4SHAREHOLDERS EQUITYTotal Shareholders Equity
    
    
    791.7
    
    
    
    780.7
    
    
    
    83.4
    
    
    
    303.2
    
    
    
    (1,167.3
    )
    
    
    791.7Total Liabilities and Shareholders Equity
    
    $
    791.7
    
    
    $
    4,383.3
    
    
    $
    139.5
    
    
    $
    376.9
    
    
    $
    (1,167.3
    )
    
    $
    4,524.1
 18




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##### Table of Contents



December 31, 2010Combined
    
    CombinedSubsidiary
    
    Guarantor
    
    Nonguarantor
    
    ConsolidatingIn millions
    
    Parent
    
    Issuer
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    
    
    
    $
    107.1
    
    
    $
    
    
    
    $
    31.6
    
    
    $
    
    
    
    $
    138.7Receivables, Net
    
    
    
    
    
    
    266.1
    
    
    
    46.0
    
    
    
    70.1
    
    
    
    
    
    
    
    382.2Inventories, Net
    
    
    
    
    
    
    315.8
    
    
    
    55.2
    
    
    
    46.3
    
    
    
    
    
    
    
    417.3Deferred Income Tax Assets
    
    
    
    
    
    
    27.4
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    28.0Intercompany
    
    
    8.8
    
    
    
    144.0
    
    
    
    (103.3
    )
    
    
    (49.5
    )
    
    
    
    
    
    
    Other Current Assets
    
    
    
    
    
    
    42.0
    
    
    
    1.0
    
    
    
    4.4
    
    
    
    
    
    
    
    47.4Total Current Assets
    
    
    8.8
    
    
    
    902.4
    
    
    
    (1.1
    )
    
    
    103.5
    
    
    
    
    
    
    
    1,013.6Property, Plant and Equipment, Net
    
    
    
    
    
    
    1,460.0
    
    
    
    119.5
    
    
    
    62.2
    
    
    
    (0.2
    )
    
    
    1,641.5Investment in Consolidated Subsidiaries
    
    
    738.2
    
    
    
    220.8
    
    
    
    0.8
    
    
    
    129.6
    
    
    
    (1,089.4
    )
    
    
    Goodwill
    
    
    
    
    
    
    1,170.7
    
    
    
    
    
    
    
    34.5
    
    
    
    
    
    
    
    1,205.2Other Assets
    
    
    
    
    
    
    600.2
    
    
    
    0.2
    
    
    
    23.9
    
    
    
    
    
    
    
    624.3Total Assets
    
    $
    747.0
    
    
    $
    4,354.1
    
    
    $
    119.4
    
    
    $
    353.7
    
    
    $
    (1,089.6
    )
    
    $
    4,484.6LIABILITIESCurrent Liabilities:Short-Term Debt and Current Portion of Long-Term
Debt
    
    $
    
    
    
    $
    18.9
    
    
    $
    
    
    
    $
    7.1
    
    
    $
    
    
    
    $
    26.0Accounts Payable
    
    
    
    
    
    
    281.6
    
    
    
    38.0
    
    
    
    41.9
    
    
    
    
    
    
    
    361.5Interest Payable
    
    
    
    
    
    
    28.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28.4Other Accrued Liabilities
    
    
    
    
    
    
    157.4
    
    
    
    8.7
    
    
    
    13.7
    
    
    
    
    
    
    
    179.8Total Current Liabilities
    
    
    
    
    
    
    486.3
    
    
    
    46.7
    
    
    
    62.7
    
    
    
    
    
    
    
    595.7Long-Term Debt
    
    
    
    
    
    
    2,552.2
    
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    2,553.1Deferred Income Tax Liabilities
    
    
    
    
    
    
    237.1
    
    
    
    
    
    
    
    4.0
    
    
    
    
    
    
    
    241.1Other Noncurrent Liabilities
    
    
    
    
    
    
    340.3
    
    
    
    
    
    
    
    7.4
    
    
    
    
    
    
    
    347.7Total Liabilities
    
    
    
    
    
    
    3,615.9
    
    
    
    46.7
    
    
    
    75.0
    
    
    
    
    
    
    
    3,737.6SHAREHOLDERS EQUITYTotal Shareholders Equity
    
    
    747.0
    
    
    
    738.2
    
    
    
    72.7
    
    
    
    278.7
    
    
    
    (1,089.6
    )
    
    
    747.0Total Liabilities and Shareholders Equity
    
    $
    747.0
    
    
    $
    4,354.1
    
    
    $
    119.4
    
    
    $
    353.7
    
    
    $
    (1,089.6
    )
    
    $
    4,484.6
 19




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##### Table of Contents



Three Months Ended March 31, 2011Combined
    
    CombinedSubsidiary
    
    Guarantor
    
    Nonguarantor
    
    ConsolidatingIn millions
    
    Parent
    
    Issuer
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedCASH FLOWS FROM OPERATING ACTIVITIES:Net Income (Loss)
    
    $
    26.7
    
    
    $
    26.7
    
    
    $
    8.3
    
    
    $
    1.9
    
    
    $
    (36.9
    )
    
    $
    26.7Non-cash Items Included in Net Income (Loss):Depreciation and Amortization
    
    
    
    
    
    
    64.0
    
    
    
    4.4
    
    
    
    2.6
    
    
    
    
    
    
    
    71.0Deferred Income Taxes
    
    
    
    
    
    
    5.6
    
    
    
    (2.8
    )
    
    
    
    
    
    
    
    
    
    
    2.8Amount of Postretirement Expense Less
Than Funding
    
    
    
    
    
    
    (2.2
    )
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    (3.0
    )Equity in Net Earnings of Subsidiaries
    
    
    (26.7
    )
    
    
    (10.6
    )
    
    
    0.4
    
    
    
    
    
    
    
    36.9
    
    
    
    Other, Net
    
    
    
    
    
    
    6.6
    
    
    
    
    
    
    
    1.1
    
    
    
    
    
    
    
    7.7Changes in Operating Assets and Liabilities
    
    
    
    
    
    
    (88.6
    )
    
    
    (9.4
    )
    
    
    (1.1
    )
    
    
    
    
    
    
    (99.1
    )Net Cash Provided by Operating Activities
    
    
    
    
    
    
    1.5
    
    
    
    0.9
    
    
    
    3.7
    
    
    
    
    
    
    
    6.1CASH FLOWS FROM INVESTING ACTIVITIES:Capital Spending
    
    
    
    
    
    
    (33.4
    )
    
    
    (0.9
    )
    
    
    (2.5
    )
    
    
    
    
    
    
    (36.8
    )Other, Net
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.8
    )Net Cash Used in Investing Activities
    
    
    
    
    
    
    (34.2
    )
    
    
    (0.9
    )
    
    
    (2.5
    )
    
    
    
    
    
    
    (37.6
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings under Revolving Credit Facilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.2
    
    
    
    
    
    
    
    11.2Payments on Revolving Credit Facilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10.6
    )
    
    
    
    
    
    
    (10.6
    )Other, Net
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Net Cash Provided by Financing Activities
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    0.7Effect of Exchange Rate Changes on Cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    
    
    
    
    1.2Net (Decrease) Increase in Cash and Cash
Equivalents
    
    
    
    
    
    
    (32.6
    )
    
    
    
    
    
    
    3.0
    
    
    
    
    
    
    
    (29.6
    )Cash and Cash Equivalents at Beginning of Period
    
    
    
    
    
    
    107.1
    
    
    
    
    
    
    
    31.6
    
    
    
    
    
    
    
    138.7CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    
    
    
    $
    74.5
    
    
    $
    
    
    
    $
    34.6
    
    
    $
    
    
    
    $
    109.1
 20




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##### Table of Contents



Three Months Ended March 31, 2010Combined
    
    CombinedSubsidiary
    
    Guarantor
    
    Nonguarantor
    
    ConsolidatingIn millions
    
    Parent
    
    Issuer
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    ConsolidatedCASH FLOWS FROM OPERATING ACTIVITIES:Net Income (Loss)
    
    $
    6.3
    
    
    $
    6.3
    
    
    $
    10.4
    
    
    $
    (1.8
    )
    
    $
    (14.9
    )
    
    $
    6.3Non-cash Items Included in Net Income (Loss):Depreciation and Amortization
    
    
    
    
    
    
    67.9
    
    
    
    4.1
    
    
    
    2.3
    
    
    
    
    
    
    
    74.3Deferred Income Taxes
    
    
    
    
    
    
    7.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.9Amount of Postretirement Expense Less
Than Funding
    
    
    
    
    
    
    (0.8
    )
    
    
    
    
    
    
    (0.6
    )
    
    
    
    
    
    
    (1.4
    )Equity in Net Earnings of Subsidiaries
    
    
    (6.3
    )
    
    
    (7.3
    )
    
    
    (1.3
    )
    
    
    
    
    
    
    14.9
    
    
    
    Other, Net
    
    
    
    
    
    
    7.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.0Changes in Operating Assets and Liabilities
    
    
    
    
    
    
    (102.9
    )
    
    
    (13.2
    )
    
    
    (3.2
    )
    
    
    
    
    
    
    (119.3
    )Net Cash Used in Operating Activities
    
    
    
    
    
    
    (21.9
    )
    
    
    
    
    
    
    (3.3
    )
    
    
    
    
    
    
    (25.2
    )CASH FLOWS FROM INVESTING ACTIVITIES:Capital Spending
    
    
    
    
    
    
    (17.0
    )
    
    
    
    
    
    
    (1.2
    )
    
    
    
    
    
    
    (18.2
    )Other, Net
    
    
    
    
    
    
    (1.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.1
    )Net Cash Used in Investing Activities
    
    
    
    
    
    
    (18.1
    )
    
    
    
    
    
    
    (1.2
    )
    
    
    
    
    
    
    (19.3
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings under Revolving Credit Facilities
    
    
    
    
    
    
    82.3
    
    
    
    
    
    
    
    13.7
    
    
    
    
    
    
    
    96.0Payments on Revolving Credit Facilities
    
    
    
    
    
    
    (82.7
    )
    
    
    
    
    
    
    (13.1
    )
    
    
    
    
    
    
    (95.8
    )Net Cash (Used in) Provided by Financing
Activities
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    0.6
    
    
    
    
    
    
    
    0.2Effect of Exchange Rate Changes on Cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1Net Decrease in Cash and Cash Equivalents
    
    
    
    
    
    
    (40.4
    )
    
    
    
    
    
    
    (3.8
    )
    
    
    
    
    
    
    (44.2
    )Cash and Cash Equivalents at Beginning of Period
    
    
    
    
    
    
    124.3
    
    
    
    
    
    
    
    25.5
    
    
    
    
    
    
    
    149.8CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    
    
    
    $
    83.9
    
    
    $
    
    
    
    $
    21.7
    
    
    $
    
    
    
    $
    105.6
 21




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##### Table of Contents



NOTE
13  SUBSEQUENT EVENTS
    22




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 INTRODUCTION
  
    
    Overview of Business
    
    Overview of 2011 Results
    
    Results of Operations
    
    Financial Condition, Liquidity and Capital Resources
    
    Critical Accounting Policies
    
    New Accounting Standards
    
    Business Outlook
 OVERVIEW OF BUSINESS
    Significant Factors That Impact The Companys Business
 Impact of Inflation.
 23




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##### Table of Contents



Substantial Debt Obligations
  Commitment to Cost Reduction
  Competition and Market Factors.
  24




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##### Table of Contents



OVERVIEW OF 2011 RESULTS
  
    
    Net Sales in the first three months of 2011 decreased by $3.5 million, or 0.3%, to $1,000.6
million from $1,004.1 million in the first three months of 2010 primarily due to lower volume
in both the paperboard packaging and flexible packaging segments. These decreases were
partially offset by pricing improvement across all segments as well as favorable currency
exchange rates, primarily in Japan and Australia.
 
    
    Income from Operations in the first three months of 2011 increased by $9.0 million, or 15.1%,
to $68.6 million from $59.6 million in the first three months of 2010. This increase was
primarily due to lower restructuring charges of $8.5 million, the higher pricing, and improved
performance due to cost savings, partially offset by the higher inflation and the lower
volume.
 RESULTS OF OPERATIONS
 Segment Information
  Three Months EndedMarch 31,In millions
    
    2011
    
    2010NET SALES:Paperboard Packaging
    
    $
    825.0
    
    
    $
    834.6Flexible Packaging
    
    
    175.6
    
    
    
    169.5Total
    
    $
    1,000.6
    
    
    $
    1,004.1INCOME (LOSS) FROM OPERATIONS:Paperboard Packaging
    
    $
    74.4
    
    
    $
    75.7Flexible Packaging
    
    
    6.0
    
    
    
    6.7Corporate
    
    
    (11.8
    )
    
    
    (22.8
    )Total
    
    $
    68.6
    
    
    $
    59.6
 FIRST QUARTER 2011 COMPARED WITH FIRST QUARTER 2010
 Net Sales
 Three Months Ended March 31,Increase /
    
    PercentIn millions
    
    2011
    
    2010
    
    (Decrease)
    
    ChangePaperboard Packaging
    
    $
    825.0
    
    
    $
    834.6
    
    
    $
    (9.6
    )
    
    
    (1.2
    %)Flexible Packaging
    
    
    175.6
    
    
    
    169.5
    
    
    
    6.1
    
    
    
    3.6
    %Total
    
    $
    1,000.6
    
    
    $
    1,004.1
    
    
    $
    (3.5
    )
    
    
    (0.3
    %)
 25




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##### Table of Contents



Three Months Ended March 31,VariancesIn millions
    
    2010
    
    Price
    
    Volume/Mix
    
    Exchange
    
    Total
    
    2011Paperboard Packaging
    
    $
    834.6
    
    
    $
    14.9
    
    
    $
    (28.2
    )
    
    $
    3.7
    
    
    $
    (9.6
    )
    
    $
    825.0Flexible Packaging
    
    
    169.5
    
    
    
    9.1
    
    
    
    (3.7
    )
    
    
    0.7
    
    
    
    6.1
    
    
    
    175.6Total
    
    $
    1,004.1
    
    
    $
    24.0
    
    
    $
    (31.9
    )
    
    $
    4.4
    
    
    $
    (3.5
    )
    
    $
    1,000.6
 Paperboard Packaging
  Flexible Packaging
  Income (Loss) from Operations
 Three Months Ended March 31,Increase
    
    PercentIn millions
    
    2011
    
    2010
    
    (Decrease)
    
    ChangePaperboard Packaging
    
    $
    74.4
    
    
    $
    75.7
    
    
    $
    (1.3
    )
    
    
    (1.7
    %)Flexible Packaging
    
    
    6.0
    
    
    
    6.7
    
    
    
    (0.7
    )
    
    
    (10.4
    %)Corporate
    
    
    (11.8
    )
    
    
    (22.8
    )
    
    
    11.0
    
    
    
    N.M.
    (a)Total
    
    $
    68.6
    
    
    $
    59.6
    
    
    $
    9.0
    
    
    
    15.1
    %
  (a)
    
    Percentage calculation not meaningful.
  Three Months Ended March 31,VariancesIn millions
    
    2010
    
    Price
    
    Volume/Mix
    
    Inflation
    
    Exchange
    
    Other(a)
    
    Total
    
    2011Paperboard Packaging
    
    $
    75.7
    
    
    $
    14.9
    
    
    $
    (4.2
    )
    
    $
    (24.1
    )
    
    $
    1.6
    
    
    $
    10.5
    
    
    $
    (1.3
    )
    
    $
    74.4Flexible Packaging
    
    
    6.7
    
    
    
    9.1
    
    
    
    (1.4
    )
    
    
    (11.4
    )
    
    
    0.1
    
    
    
    2.9
    
    
    
    (0.7
    )
    
    
    6.0Corporate
    
    
    (22.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.1
    
    
    
    8.9
    
    
    
    11.0
    
    
    
    (11.8
    )Total
    
    $
    59.6
    
    
    $
    24.0
    
    
    $
    (5.6
    )
    
    $
    (35.5
    )
    
    $
    3.8
    
    
    $
    22.3
    
    
    $
    9.0
    
    
    $
    68.6
  (a)
    
    Includes the Companys cost reduction initiatives.
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##### Table of Contents



Paperboard Packaging
  Flexible Packaging
  Corporate
  INTEREST EXPENSE AND INCOME TAX EXPENSE
 Interest Expense, Net
  Income Tax Expense
  FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
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##### Table of Contents



Cash Flows
 Three Months EndedMarch 31,In millions
    
    2011
    
    2010Net Cash (Used in) Provided by Operating Activities
    
    $
    6.1
    
    
    $
    (25.2
    )Net Cash Used in Investing Activities
    
    
    (37.6
    )
    
    
    (19.3
    )Net Cash Provided by Financing Activities
    
    
    0.7
    
    
    
    0.2
    Liquidity and Capital Resources
  Covenant Restrictions
  (1)
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##### Table of Contents



Maximum Consolidated SecuredLeverage
Ratio(1)October 1, 2009 and thereafter
    
    
    4.75 to 1.00
  (1)
    
    Credit Agreement EBITDA is defined in the Credit Agreement as consolidated net income
before consolidated net interest expense, non-cash expenses and charges, total income tax
expense, depreciation expense, expense associated with amortization of intangibles and other
assets, non-cash provisions for reserves for discontinued operations, extraordinary, unusual
or non-recurring gains or losses or charges or credits, gain or loss associated with sale or
write-down of assets not in the ordinary course of business, any income or loss accounted
for by the equity method of accounting, and projected run rate cost savings, prior to or
within a twelve month period.
      Twelve Months EndedIn millions
    
    March 31, 2011Net Income
    
    $
    31.1Income Tax Expense
    
    
    21.8Interest Expense, Net
    
    
    168.8Depreciation and Amortization
    
    
    285.4Equity Income of Unconsolidated Entities, Net of Dividends
    
    
    (0.2
    )Other Non-Cash Charges
    
    
    40.0Merger Related Expenses
    
    
    46.6Losses Associated with Sale/Write-Down of Assets
    
    
    5.6Other Non-Recurring/Extraordinary/Unusual Items
    
    
    8.4Projected Run Rate Cost Savings (a)
    
    
    60.8Credit Agreement EBITDA
    
    $
    668.3
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##### Table of Contents



As ofIn millions
    
    March 31, 2011Short-Term Debt
    
    $
    26.9Long-Term Debt
    
    
    2,553.1Total Debt
    
    $
    2,580.0Less: Adjustments (b)
    
    
    752.3Consolidated Secured Indebtedness
    
    $
    1,827.7
  (a)
    
    As defined by the Credit Agreement, this represents projected cost savings expected by
the Company to be realized as a result of specific actions taken or expected to be taken
prior to or within twelve months of the period in which Credit Agreement EBITDA is to be
calculated, net of the amount of actual benefits realized or expected to be realized from
such actions.
 The terms of the Credit Agreement limit the amount of projected run rate cost savings that
may be used in calculating Credit Agreement EBITDA by stipulating that such amount may not
exceed the lesser of (i) ten percent of EBITDA as defined in the Credit Agreement for the
last twelve-month period (before giving effect to projected run rate cost savings) and (ii)
$100 million. As a result, in calculating Credit Agreement EBITDA above, the Company used
projected run rate cost savings of $60.8 million or ten percent of EBITDA as calculated in
accordance with the Credit Agreement, which amount is lower than total projected cost savings
identified by the Company, net of actual benefits realized for the twelve month period ended
March 31, 2011. Projected run rate cost savings were calculated by the Company solely for its
use in calculating Credit Agreement EBITDA for purposes of determining compliance with the
maximum consolidated secured leverage ratio contained in the Credit Agreement and should not
be used for any other purpose.
 (b)
    
    Represents consolidated indebtedness/securitization that is either (i) unsecured, or (ii)
all subordinated indebtedness permitted to be incurred under the Credit Agreement, or
secured indebtedness permitted to be incurred by the Companys foreign subsidiaries per the
Credit Agreement.
  Capital Investment
  Environmental Matters
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##### Table of Contents



CRITICAL ACCOUNTING POLICIES
   NEW ACCOUNTING STANDARDS
  BUSINESS OUTLOOK
    
    
    Depreciation and
amortization in the $285 million range.
    
    Interest expense of $145 million to $155 million, including $9 million of non-cash interest
expense associated with amortization of debt issuance costs.
    
    Net debt reduction from
operations in the $200 million to $220 million range in
addition to the use of the proceeds from the equity offering.
    
    Pension plan contributions of $45 million to $70 million.
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
  31




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  32




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##### Table of Contents



ITEM 6. EXHIBITS
 a)
    
    Exhibit Index
 Exhibit Number
    
    Description4.1
    
    Second Amendment to Registration
Rights Agreement, dated as of March 7, 2011, by and among
Graphic Packaging Holding Company, Clayton Dubilier & Rice Fund V
Limited Partnership, Old Town S.A., Jeffrey H. Coors, TPG Bluegrass
IV-AIV 1, L.P., TPG Bluegrass IV-AIV 2, L.P., TPG Bluegrass V-AIV 1,
L.P., TPG Bluegrass V-AIV 2, L.P., TPG FOF V-A, L.P. and TPG FOF V-B,
L.P.10.1
    
    Form of 2011 Perfomance-Based
Restricted Stock Unit Award Agreement10.2
    
    Form of 2011 Service-Based
Restricted Stock Unit Award Agreement31.1
    
    Certification required by Rule 13a-14(a).31.2
    
    Certification required by Rule 13a-14(a).32.1
    
    Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.32.2
    
    Certification required by Section 1350 of Chapter 63 of Title 18 of the United States Code.
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##### Table of Contents



SIGNATURES
  GRAPHIC PACKAGING HOLDING COMPANY
 /s/ STEPHEN A. HELLRUNG

Stephen A. Hellrung
    
    Senior Vice President, General Counsel and
Secretary
    
    April 21, 2011/s/ DANIEL J. BLOUNT

Daniel J. Blount
    
    Senior Vice President and Chief Financial Officer 
(Principal Financial Officer)
    
    April 21, 2011/s/ DEBORAH R. FRANK

Deborah R. Frank
    
    Vice President and Chief Accounting
Officer 
(Principal Accounting Officer)
    
    April 21, 2011
 34