* Record net sales were $2.6 billion in fiscal 2006 versus $2.4
billion in fiscal 2005 - an increase of 8 percent excluding the
impact of foreign currency translation. DELAWARE, Ohio, Dec. 6
/PRNewswire-FirstCall/ -- Greif, Inc. (NYSE:GEFNYSE:GEF.B), a
global leader in industrial packaging with niche businesses in
containerboard, corrugated packaging, blending, filling and
packaging services and timber, today announced results for its
fiscal year, which ended on Oct. 31, 2006. Michael J. Gasser,
chairman, chief executive officer and president, commented, "We are
pleased with our record net sales and net income for fiscal 2006.
The improvement in operating profit before special items was driven
by strong top-line growth, which benefited from generally higher
volumes, improved product pricing, and margin expansion." Gasser
continued, "We recently embarked on the next phase of the Greif
Business System, which includes optimizing, embedding and
leveraging it across our global footprint. The recent acquisitions
of Delta Petroleum Company, Inc. and the steel drum manufacturing
and closures business of Blagden Packaging Group are consistent
with implementing our strategic plan for increased growth and
profitability. The Greif Business System, which remains a catalyst
for unlocking value, coupled with positive business momentum and
the recent acquisitions, position us well for fiscal 2007 and
beyond." Special Items and GAAP to Non-GAAP Reconciliation Special
items are as follows: (i) for fiscal 2006, restructuring charges of
$33.2 million ($23.4 million net of tax) and timberland gains of
$41.3 million ($26.0 million net of tax); (ii) for fiscal 2005,
restructuring charges of $35.7 million ($25.7 million net of tax),
timberland gains of $56.3 million ($36.2 million net of tax) and a
debt extinguishment charge $2.8 million ($2.0 million net of tax);
(iii) for the fourth quarter of 2006, restructuring charges of
$10.4 million ($7.3 million net of tax) and timberland gains of
$0.1 million ($0.1 million net of tax); and (iv) for the fourth
quarter of 2005, restructuring charges of $12.6 million ($8.9
million net of tax) and timberland gains of $1.1 million ($0.7
million net of tax). A reconciliation of the differences between
all non-GAAP financial measures used in this release with the most
directly comparable GAAP financial measures is included in the
financial schedules that are a part of this release. Consolidated
Results Net Sales Net sales were $2.6 billion in fiscal 2006
compared to $2.4 billion in fiscal 2005 -- an increase of 8 percent
excluding the impact of foreign currency translation. The $204.2
million increase was attributable to positive contributions from
Industrial Packaging & Services ($141.1 million) and Paper,
Packaging & Services ($60.2 million). This increase is
primarily due to generally higher sales volumes and improved
pricing across the Company's product portfolio. For the fourth
quarter of 2006, net sales increased 19 percent (18 percent
excluding the impact of foreign currency translation) to $735.6
million from $619.7 million in the fourth quarter of 2005, and
included generally higher sales volumes and improved pricing. Gross
Profit Gross profit increased 23 percent to $479.2 million in
fiscal 2006 compared to $390.8 million in fiscal 2005. The gross
profit margin improved 2.1 percentage points to 18.2 percent of net
sales in fiscal 2006 from 16.1 percent of net sales for last year.
The gross profit margin benefited from the improvement in net sales
and positive contributions from the Greif Business System. These
benefits were partially offset by higher energy and transportation
costs compared to fiscal 2005. For the fourth quarter of 2006,
gross profit was $143.3 million, or 19.5 percent of net sales,
versus $110.7 million, or 17.9 percent of net sales, for the fourth
quarter of 2005. Selling, General & Administrative (SG&A)
Expenses SG&A expenses were $259.1 million, or 9.9 percent of
net sales, in fiscal 2006 compared to $224.7 million, or 9.3
percent of net sales, in fiscal 2005. The increase between the two
years was primarily due to higher accruals for performance-based
incentive plans resulting from improvements in the Company's
results. Fourth quarter of 2006 SG&A expenses were $66.9
million, or 9.1 percent of net sales, versus $56.7 million, or 9.2
percent of net sales, in the fourth quarter of 2005. Operating
Profit Operating profit before special items was $238.1 million in
fiscal 2006 compared to $171.4 million in fiscal 2005. The $66.7
million increase was due to positive contributions from Industrial
Packaging & Services ($40.3 million), Paper, Packaging &
Services ($23.8 million) and Timber ($2.7 million), which included
gains on asset disposals. There were $33.2 million and $35.7
million of restructuring charges and $41.3 million and $56.3
million of timberland gains during fiscal 2006 and 2005,
respectively. GAAP operating profit was $246.2 million in fiscal
2006 compared to $191.9 million in fiscal 2005. For the fourth
quarter of 2006, operating profit, before restructuring charges of
$10.4 million and timberland gains of $0.1 million, was $78.4
million compared to $53.4 million, before restructuring charges of
$12.6 million and timberland gains of $1.1 million, for the same
quarter of 2005. This increase was primarily attributable to
increases in Paper, Packaging & Services ($17.2 million) and
Industrial Packaging & Services ($7.9 million). GAAP operating
profit was $68.2 million and $41.8 million in the fourth quarter of
2006 and 2005, respectively. Net Income and Diluted Earnings Per
Share Net income before special items was $139.6 million for fiscal
2006 compared to $96.1 million in fiscal 2005. Diluted earnings per
share before special items were $4.75 per Class A share compared to
$3.27 per Class A share and $7.25 per Class B share compared to
$5.01 per Class B share for fiscal 2006 and 2005, respectively. The
Company had GAAP net income of $142.1 million, or $4.83 per diluted
Class A share and $7.38 per diluted Class B share, in fiscal 2006
compared to GAAP net income of $104.7 million, or $3.56 per diluted
Class A share and $5.45 per diluted Class B share, in fiscal 2005.
For the fourth quarter of 2006, net income before special items was
$49.0 million compared to $30.2 million for the same period of
2005. Diluted earnings per share before special items were $1.66
versus $1.02 per Class A share and $2.54 versus $1.57 per Class B
share in the fourth quarter of 2006 and 2005, respectively. For the
fourth quarter of 2006, the Company reported GAAP net income of
$41.7 million, or $1.41 per diluted Class A share and $2.17 per
diluted Class B share, versus $22.0 million, or $0.75 per diluted
Class A share and $1.15 per diluted Class B share, for the same
quarter of 2005. Business Group Results Industrial Packaging &
Services The Industrial Packaging & Services segment offers a
comprehensive line of industrial packaging products and services,
such as steel, fibre and plastic drums, intermediate bulk
containers, closure systems for industrial packaging products,
polycarbonate water bottles and blending, filling and packaging
services. The key factors influencing profitability in the
Industrial Packaging & Services segment are: * Selling prices
and sales volumes; * Raw material costs, primarily steel, resin and
containerboard; * Energy and transportation costs; * Benefits from
the Greif Business System; * Restructuring charges; and * Impact of
foreign currency translation. In this segment, net sales were $1.9
billion in fiscal 2006 compared to $1.8 billion in fiscal 2005. Net
sales rose 8 percent, excluding the impact of foreign currency
translation, for fiscal 2006 from last year. The improvement in net
sales was primarily due to strong organic growth, which included
higher sales volumes in emerging markets such as China and Russia.
This segment also benefited from two fourth quarter 2005 tuck-in
acquisitions and the Delta Petroleum Company, Inc. acquisition in
the fourth quarter of 2006. Sales volumes declined in the United
Kingdom and France as a result of restructuring activities. The
Industrial Packaging & Services segment gross profit margin
improved to 18.5 percent in fiscal 2006 from 16.3 percent in fiscal
2005 due to higher sales volumes and the Greif Business System,
particularly the impact of strategic sourcing. Operating profit
before restructuring charges rose to $163.1 million in fiscal 2006
from $122.8 million in fiscal 2005 primarily due to the improvement
in net sales and gross profit margin. Restructuring charges were
$24.0 million in fiscal 2006 compared with $31.4 million last year.
GAAP operating profit was $139.0 million in fiscal 2006 compared to
$91.4 million in fiscal 2005. Net sales increased 18 percent (16
percent excluding the impact of foreign currency translation) to
$540.7 million in the fourth quarter of 2006 versus $460.1 million
in the fourth quarter of 2005 due to the same reasons as the
full-year comparison. Operating profit, before restructuring
charges of $4.5 million, was $47.6 million in the fourth quarter of
2006 compared with operating profit, before restructuring charges
of $11.0 million, of $39.6 million in the same quarter of 2005.
GAAP operating profit was $43.0 million and $28.6 million in the
fourth quarter of 2006 and 2005, respectively. Paper, Packaging
& Services The Paper, Packaging & Services segment sells
containerboard, corrugated sheets and other corrugated products and
multiwall bags in North America. The key factors influencing
profitability in the Paper, Packaging & Services segment are: *
Selling prices and sales volumes; * Raw material costs, primarily
old corrugated containers (OCC); * Energy and transportation costs;
* Benefits from the Greif Business System; and * Restructuring
charges. In this segment, net sales were $668.0 million in fiscal
2006 compared to $607.8 million in fiscal 2005 primarily due to
higher containerboard, corrugated sheet and multiwall bag sales
volumes compared to the prior year. In addition, selling prices for
containerboard were higher than last year. The Paper, Packaging
& Services segment's gross profit margin improved to 17.5
percent in fiscal 2006 from 15.3 percent in fiscal 2005. This
improvement over last year was primarily due to higher
containerboard pricing levels, partially offset by approximately
$14.7 million in higher energy and transportation costs. Operating
profit before restructuring charges was $64.4 million in fiscal
2006 compared to $40.6 million in fiscal 2005 primarily due to the
improvement in net sales and gross profit margin. Restructuring
charges were $9.2 million in fiscal 2006 compared to $4.3 million
in fiscal 2005. GAAP operating profit was $55.2 million in fiscal
2006 compared to $36.3 million in fiscal 2005. Net sales were
$192.6 million in the fourth quarter of 2006 versus $158.0 million
in the fourth quarter of 2005. Operating profit, before
restructuring charges of $5.8 million, was $29.9 million in the
fourth quarter of 2006 compared with operating profit, before
restructuring charges of $1.6 million, of $12.7 million in the same
quarter of 2005. GAAP operating profit was $24.0 million and $11.1
million in the fourth quarter of 2006 and 2005, respectively.
Timber The Timber segment consists of approximately 266,700 acres
of timber properties in southeastern United States, which are
actively harvested and regenerated, and approximately 37,400 acres
in Canada. The key factors influencing profitability in the Timber
segment are: * Planned level of timber sales; * Gains on sale of
timberland; and * Sale of special use properties (surplus, higher
and better use, and development properties). Net sales were $15.1
million in fiscal 2006 compared to $12.3 million in fiscal 2005.
Operating profit before special items was $10.6 million (including
$4.6 million of profits on special use property sales) in fiscal
2006 compared to $8.0 million in fiscal 2005. Special items
included timberland gains of $41.3 million in fiscal 2006 and $56.3
million in fiscal 2005 and insignificant restructuring charges in
both years. GAAP operating profit was $51.9 million in fiscal 2006
compared to $64.2 million in fiscal 2005. Net sales were $2.3
million in the fourth quarter of 2006 versus $1.6 million in the
fourth quarter of 2005. Operating profit before special items was
$1.0 million in the fourth quarter of 2006 and 2005. GAAP operating
profit was $1.1 million and $2.1 million in the fourth quarter of
2006 and 2005, respectively. Greif Business System Update The Greif
Business System generates productivity improvements and achieves
permanent cost reductions. The opportunities continue to include,
but are not limited to, improved labor productivity, material yield
and other manufacturing efficiencies, and footprint
rationalization. In addition, a strategic sourcing strategy is
being implemented to more effectively leverage the Company's global
spend and establish a world-class sourcing and supply chain
capability. Cumulative benefits from the Greif Business System of
approximately $175 million have been achieved through the end of
fiscal 2006, including approximately $50 million in fiscal 2006.
Incremental contributions from the Greif Business System are
expected to be approximately $30 million in fiscal 2007.
Restructuring Charges The Company had $33.2 million of
restructuring charges during fiscal 2006. These charges were
primarily the result of severance costs related to closing
industrial packaging facilities in Europe as well as the
consolidation of Paper, Packaging & Services operations in the
United States. In addition, severance costs were incurred due to
the elimination of certain operating and administrative positions.
For fiscal 2005, restructuring charges were $35.7 million. Fiscal
2007 restructuring charges are expected to primarily relate to
integration of the Company's recent acquisitions and further
implementation of the Greif Business System in Paper, Packaging
& Services. Financing Arrangements Net debt outstanding was
$323.6 million at Oct. 31, 2006 versus $325.2 million at Oct. 31,
2005. Net debt is long-term debt plus short-term borrowings less
cash and cash equivalents. A significant portion of cash and cash
equivalents, which was $187.1 million at Oct. 31, 2006, was used to
finance the Company's acquisition of Blagden Packaging Group
subsequent to its fiscal year-end. GAAP long-term debt was $481.4
million at Oct. 31, 2006 and $430.4 million at Oct. 31, 2005. Net
interest expense was $36.0 million and $39.3 million in fiscal 2006
and 2005, respectively. The decrease was primarily due to lower
average net debt outstanding during fiscal 2006 compared to fiscal
2005. During the fourth quarter of 2006, the Company amended its
current revolving credit facility to increase the available funds
by $100 million to $450 million. The additional availability, along
with cash that was available in Europe, was used to finance the
Blagden acquisition. Acquisitions and Capital Expenditures During
the fourth quarter of fiscal 2006, the Company acquired Delta
Petroleum Company, Inc. Delta provides its customers with blending,
filling and packaging, drumming, warehousing, logistics services in
North America. Annual net sales of the acquired operations are
approximately $182 million. On Nov. 30, 2006, subsequent to the end
of the Company's fiscal year 2006, the Company completed the
acquisition of Blagden Packaging Group's steel drum manufacturing
and closures businesses. Annual net sales of the acquired
operations, which are located in Europe and Asia, are approximately
$265 million. Capital expenditures were $75.6 million, excluding
timberland purchases of $62.1 million, compared with capital
expenditures of $67.7 million, excluding timberland purchases of
$17.7 million, for fiscal 2005. Capital expenditures were below the
Company's annual depreciation expense in fiscal 2006. Cash
Dividends The Company paid $34.5 million of cash dividends to its
Class A and Class B stockholders in fiscal 2006 compared to $22.9
million for fiscal 2005. This represents an increase of
approximately 50 percent per share for both classes of the
Company's common stock compared to fiscal 2005. On Dec. 5, 2006,
the Board of Directors declared quarterly cash dividends of $0.36
per share of Class A Common Stock and $0.53 per share of Class B
Common Stock. These dividends are payable on Jan. 1, 2007 to
shareholders of record at close of business on Dec. 20, 2006.
Company Outlook Record net sales and net income were achieved for
the second consecutive year in fiscal 2006, and the Company exited
the year with positive momentum and sound fundamentals in its
businesses. Key factors included strong sales volumes, margin
expansion and ongoing initiatives to further embed the Greif
Business System. Strong financial performance, supplemented by
organic growth, contributions from the Greif Business System and
earnings accretion from the acquisitions, is expected in fiscal
2007. Annual guidance for fiscal 2007, which excludes special
items, is a range of $5.45 to $5.55 per share for the Company's
Class A Common Stock, including accretion of $0.20 to $0.30 per
share from the acquisitions discussed earlier. This range is
approximately 15 percent to 17 percent over the Company's fiscal
2006 record earnings. Conference Call The Company will host a
conference call to discuss its fiscal 2006 results on Dec. 7, 2006,
at 10 a.m. Eastern Time (ET). To participate, domestic callers
should call 800-218-0713 and ask for the Greif conference call. The
number for international callers is +1 303-205-0066. Phone lines
will open at 9:50 a.m. ET. The conference call will also be
available through a live webcast, including slides, which can be
accessed at http://www.greif.com/. A replay of the conference call
will be available on the Company's website approximately one hour
following the call. About Greif Greif is the world leader in
industrial packaging products and services. The Company produces
steel, plastic, fibre, corrugated and multiwall containers,
protective packaging and containerboard, and provides blending and
packaging services for a wide range of industries. Greif also
manages timber properties in North America. The Company is
strategically positioned in more than 40 countries to serve global
as well as regional customers. Additional information is on the
Company's website at http://www.greif.com/. Forward-Looking
Statements All statements other than statements of historical facts
included in this news release, including, without limitation,
statements regarding the Company's future financial position,
business strategy, budgets, projected costs, goals and plans and
objectives of management for future operations, are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may,"
"will," "expect," "intend," "estimate," "anticipate," "project,"
"believe," "continue" or "target" or the negative thereof or
variations thereon or similar terminology. All forward-looking
statements made in this news release are based on information
currently available to management. Although the Company believes
that the expectations reflected in forward-looking statements have
a reasonable basis, the Company can give no assurance that these
expectations will prove to be correct. Forward-looking statements
are subject to risks and uncertainties that could cause actual
events or results to differ materially from those expressed in or
implied by the statements. Such risks and uncertainties that might
cause a difference include, but are not limited to: general
economic and business conditions, including a prolonged or
substantial economic downturn; changing trends and demands in the
industries in which the Company competes, including industry
over-capacity; industry competition; the continuing consolidation
of the Company's customer base for its industrial packaging,
containerboard and corrugated products; political instability in
those foreign countries where the Company manufactures and sells
its products; foreign currency fluctuations and devaluations;
availability and costs of raw materials for the manufacture of the
Company's products, particularly steel, resin and old corrugated
containers; price fluctuations in energy costs; costs associated
with litigation or claims against the Company pertaining to
environmental, safety and health, product liability and other
matters; work stoppages and other labor relations matters; property
loss resulting from wars, acts of terrorism or natural disasters;
the Company's ability to integrate its newly acquired operations
effectively with its existing business; the Company's ability to
achieve improved operating efficiencies and capabilities; the
Company's ability to effectively embed and realize improvements
from the Greif Business System; the frequency and volume of sales
of the Company's timber, timberland and special use timberland; and
the deviation of actual results from the estimates and/or
assumptions used by the Company in the application of its
significant accounting policies. These and other risks and
uncertainties that could materially affect the Company's
consolidated financial results are further discussed in its filings
with the Securities and Exchange Commission, including its Form
10-K for the year ended Oct. 31, 2005. The Company assumes no
obligation to update any forward-looking statements. GREIF, INC.
AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED (Dollars in thousands, except per share amounts) Quarter
ended Year ended October 31, October 31, 2006 2005 2006 2005 Net
sales $735,577 $619,727 $2,628,475 $2,424,297 Cost of products sold
592,231 509,055 2,149,271 2,033,510 Gross profit 143,346 110,672
479,204 390,787 Selling, general and administrative expenses 66,942
56,716 259,122 224,729 Restructuring charges 10,396 12,633 33,238
35,736 Gain on asset disposals, net 2,149 494 59,319 61,611
Operating profit 68,157 41,817 246,163 191,933 Interest expense,
net 8,955 9,940 35,993 39,255 Debt extinguishment charge - - -
2,828 Other income (loss), net 213 (91) (4,235) 1,861 Income before
income tax expense 59,415 31,786 205,935 151,711 Income tax expense
17,677 9,745 63,816 47,055 Net income $ 41,738 $22,041 $142,119
$104,656 Basic earnings per share: Class A Common Stock $1.44 $0.76
$4.93 $ 3.64 Class B Common Stock $2.17 $1.15 $7.38 $ 5.45 Diluted
earnings per share: Class A Common Stock $1.41 $0.75 $4.83 $ 3.56
Class B Common Stock $2.17 $1.15 $7.38 $ 5.45 Earnings per share
were calculated using the following number of shares: Basic
earnings per share: Class A Common Stock 11,611,076 11,548,750
11,563,761 11,397,565 Class B Common Stock 11,520,139 11,547,222
11,527,629 11,576,903 Diluted earnings per share: Class A Common
Stock 11,948,518 11,895,597 11,863,054 11,736,738 Class B Common
Stock 11,520,139 11,547,222 11,527,629 11,576,903 GREIF, INC. AND
SUBSIDIARY COMPANIES SEGMENT DATA UNAUDITED (Dollars in thousands)
Quarter ended Year ended October 31, October 31, 2006 2005 2006
2005 Net sales Industrial Packaging & Services $540,690
$460,130 $1,945,299 $1,804,169 Paper, Packaging & Services
192,581 158,028 668,047 607,818 Timber 2,306 1,569 15,129 12,310
Total $735,577 $619,727 $2,628,475 $2,424,297 Operating profit
Operating profit before restructuring charges and timberland gains:
Industrial Packaging & Services $47,570 $39,644 $163,072
$122,818 Paper, Packaging & Services 29,892 12,719 64,401
40,611 Timber 960 988 10,626 7,972 Operating profit before
restructuring charges and timberland gains 78,422 53,351 238,099
171,401 Restructuring charges: Industrial Packaging & Services
4,548 10,995 24,034 31,375 Paper, Packaging & Services 5,843
1,607 9,189 4,271 Timber 5 31 15 90 Restructuring charges 10,396
12,633 33,238 35,736 Timberland gains: Timber 131 1,099 41,302
56,268 Total $68,157 $41,817 $246,163 $191,933 Depreciation,
depletion and amortization expense Industrial Packaging &
Services $13,536 $13,891 $57,177 $61,688 Paper, Packaging &
Services 7,780 7,323 29,569 31,997 Timber 551 (20) 3,742 1,414
Total $21,867 $21,194 $90,488 $95,099 GREIF, INC. AND SUBSIDIARY
COMPANIES GEOGRAPHIC DATA UNAUDITED (Dollars in thousands) Quarter
ended Year ended October 31, October 31, 2006 2005 2006 2005 Net
sales North America $443,419 $344,387 $1,546,381 $1,323,204 Europe
190,389 182,118 711,641 740,806 Other 101,769 93,222 370,453
360,287 Total $735,577 $619,727 $2,628,475 $2,424,297 Operating
profit Operating profit before restructuring charges and timberland
gains: North America $47,480 $28,741 $126,496 $86,910 Europe 20,721
15,273 72,473 51,021 Other 10,221 9,337 39,130 33,470 Operating
profit before restructuring charges and timberland gains 78,422
53,351 238,099 171,401 Restructuring charges 10,396 12,633 33,238
35,736 Timberland gains 131 1,099 41,302 56,268 Total $68,157
$41,817 $246,163 $191,933 GREIF, INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED (Dollars in
thousands) October 31, October 31, 2006 2005 ASSETS CURRENT ASSETS
Cash and cash equivalents $187,101 $122,411 Trade accounts
receivable 315,661 258,636 Inventories 205,004 170,533 Other
current assets 85,270 74,372 793,036 625,952 LONG-TERM ASSETS
Goodwill 281,737 263,703 Intangible assets 63,587 25,015 Assets
held by special purpose entities 50,891 50,891 Other long-term
assets 52,982 55,706 449,199 395,315 PROPERTIES, PLANTS AND
EQUIPMENT 940,950 862,056 $2,183,185 $1,883,323 LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $302,992
$234,672 Short-term borrowings 29,321 17,173 Other current
liabilities 158,985 131,139 491,298 382,984 LONG-TERM LIABILITIES
Long-term debt 481,408 430,400 Liabilities held by special purpose
entities 43,250 43,250 Other long-term liabilities 318,343 294,105
843,001 767,755 MINORITY INTEREST 4,875 1,696 SHAREHOLDERS' EQUITY
844,011 730,888 $2,183,185 $1,883,323 GREIF, INC. AND SUBSIDIARY
COMPANIES GAAP TO NON-GAAP RECONCILIATION UNAUDITED (Dollars in
thousands, except per share amounts) Quarter ended Quarter ended
October 31, 2006 October 31, 2005 Diluted per Diluted per share
amounts share amounts Class Class Class Class A B A B GAAP -
operating profit $ 68,157 $41,817 Restructuring charges 10,396
12,633 Timberland gains (131) (1,099) Non-GAAP - operating profit
before restructuring charges and timberland gains $ 78,422 $ 53,531
GAAP - net income $ 41,738 $1.41 $2.17 $ 22,041 $0.75 $1.15
Restructuring charges, net of tax 7,297 0.25 0.37 8,851 0.29 0.45
Timberland gains, net of tax (85) - - (662) (0.02)(0.03) Non-GAAP -
net income before restructuring charges and timberland gains $
48,950 $1.66 $2.54 $ 30,230 $1.02 $1.57 Year ended Year ended
October 31, 2006 October 31, 2005 Diluted per Diluted per share
amounts share amounts Class Class Class Class A B A B GAAP -
operating profit $246,163 $191,933 Restructuring charges 33,238
35,736 Timberland gains (41,302) (56,268) Non-GAAP - operating
profit before restructuring charges and timberland gains $238,099
$171,401 GAAP - net income $142,119 $4.83 $7.38 $104,656 $3.56
$5.45 Restructuring charges, net of tax 23,445 0.80 1.22 25,674
0.86 1.34 Timberland gains, net of tax (25,989)(0.88)(1.35)
(36,240) (1.22)(1.89) Debt extinguishment charge, net of tax - - -
2,032 0.07 0.11 Non-GAAP - net income before restructuring charges,
debt extinguishment charge and timberland gains $139,575 $4.75
$7.25 $96,122 $3.27 $5.01 NOTE: During fiscal 2006 and 2005, the
Company sold 21,000 acres and 35,000 acres, respectively, of
timberland holdings in Florida, Georgia and Alabama resulting in
gains of $36.4 million and $42.1 million, respectively. The tax
effect of the gain for these transactions is calculated using a
38.1 percent tax rate. The other adjustments to reconcile the GAAP
to non-GAAP amounts are tax effected using the consolidated
effective rate excluding the impact of these timberland sales.
GREIF, INC. AND SUBSIDIARY COMPANIES GAAP TO NON-GAAP
RECONCILIATION (CONTINUED) UNAUDITED (Dollars in thousands) Quarter
ended Year ended October 31, October 31, 2006 2005 2006 2005
Industrial Packaging & Services GAAP - operating profit $43,022
$28,649 $139,038 $91,443 Restructuring charges 4,548 10,995 24,034
31,375 Non-GAAP - operating profit before restructuring charges
$47,570 $39,644 $163,072 $122,818 Paper, Packaging & Services
GAAP - operating profit $24,049 $11,112 $55,212 $36,340
Restructuring charges 5,843 1,607 9,189 4,271 Non-GAAP - operating
profit before restructuring charges $29,892 $12,719 $64,401 $40,611
Timber GAAP - operating profit $1,086 $2,056 $51,913 $64,150
Restructuring charges 5 31 15 90 Timberland gains (131) (1,099)
(41,302) (56,268) Non-GAAP - operating profit before restructuring
charges and timberland gains $960 $988 $10,626 $7,972 GREIF, INC.
AND SUBSIDIARY COMPANIES GAAP TO NON-GAAP RECONCILIATION
(CONTINUED) UNAUDITED (Dollars in thousands) October 31, October
31, 2006 2005 GAAP - long-term debt $ 481,408 $ 430,400 Short-term
borrowings 29,321 17,173 Cash and cash equivalents (187,101)
(122,411) Non-GAAP - net debt $ 323,628 $ 325,162 DATASOURCE:
Greif, Inc. CONTACT: Deb Strohmaier of Greif, Inc.,
+1-740-549-6074, or cell: +1-614-208-3496; or Analysts: Robert
Lentz, +1-614-876-2000, for Greif, Inc. Web site:
http://www.greif.com/
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